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108 F.3d 1397
44 ERC 1129, 323 U.S.App.D.C. 368, 65USLW 2609,27 Envtl. L. Rep. 20,718
COMMONWEALTH OF VIRGINIA, et al., Petitioners,v.ENVIRONMENTAL PROTECTION AGENCY, Respondent.State of Connecticut, et al., Intervenors.
Nos. 95-1163, 95-1177 and 95-1180.
United States Court of Appeals,District of Columbia Circuit.
Argued Oct. 16, 1996.Decided March 11, 1997.Rehearing Denied June 13, 1997.
On Petitions for Review of an Order of the Environmental Protection Agency.
Edward W. Warren, Theodore B. Olson, Washington, DC and John Paul Woodley, Jr., Deputy Attorney General, Commonwealth of Virginia, Virginia, VA, argued the cause for petitioners. With them on the joint briefs were Roger L. Chaffe, Senior Assistant Attorney General, Mary J. Leugers, John R. Butcher, Carl Josephson, Assistant Attorneys General, V. Mark Slywynsky, Detriot, MI, Raymond Ludwiszewski, Washington, DC, Douglas I. Greenhaus, Nahant, MA, Virginia E. Davis, Augusta, ME, Charles H. Lockwood, Arlington, VA, Stuart A. C. Drake, Robert R. Gasaway, John E. Putnam, Washington, DC, David S. Swayze, Thomas P. Preston, Wilmington, DE and Allen Jones, Jr., Washington, DC.
Ronald M. Spritzer and Anna L. Wolgast, Attorneys, U.S. Department of Justice, Washington, DC, argued the cause for respondent. With them on the brief were Lois J. Schiffer, Assistant Attorney General, and Michael J. Horowitz, Attorney, Environmental Protection Agency.
William L. Pardee, Assistant Attorney General, Boston, MA, argued the cause for intervenors Commonwealth of Massachusetts, et al. With him on the joint intervenor-respondents brief were Brian J. Comerford, Stamford, CT, Marjorie L. Fox, Falls Church, VA, Lisa M. Burianek, Albany, NY and John W. Malley, Jr.
David G. Hawkins, Washington, DC and David M. Driesen, Olympia, WA, were on the brief for intervenors Natural Resources Defense Council, Inc. and American Lung Association, Inc.
Before: WILLIAMS, RANDOLPH, and ROGERS, Circuit Judges.
Opinion for the Court filed by Circuit Judge RANDOLPH.
RANDOLPH, Circuit Judge:
1
These are consolidated petitions for review of a final rule issued by the Environmental Protection Agency under the Clean Air Act ("CAA"). The rule is aimed at reducing ozone pollution in the northeastern United States. It requires the twelve states in the region and the District of Columbia to adopt what is essentially California's vehicle emission program. Opposing the rule, and appearing here as petitioners, are the Commonwealth of Virginia, and three associations representing automobile manufacturers and dealers. Intervening to defend the rule are the Commonwealth of Massachusetts, the States of New York, Connecticut, Rhode Island and Vermont, the City of New York, and two associations.
2
Petitioners believe EPA's rule is unsupported by the record, contrary to the statute, and constitutionally defective. The evidence regarding ozone pollution, they maintain, does not support EPA's demand for region-wide emission reductions and, in any event, the means EPA has chosen for realizing those reductions--mandating that these states prohibit the sale of new cars that do not satisfy California's standards--is something Congress has barred the Agency from imposing. A majority of the governors of the twelve northeastern states recommended, over the objection of Virginia and other states, that EPA impose this solution. The group operated as a regional commission under a new section of the Clean Air Act, a section petitioners say is unconstitutional because it gave the commission significant legislative and executive powers without regard to the Appointments Clause of the Constitution, the non-delegation doctrine, the Joinder and Compact Clauses and other constitutional limitations. Furthermore, in petitioners' view EPA's interpretation of the Act renders it unconstitutional under the Tenth Amendment because it compels the states to enact and administer a federal regulatory program.
3
* A
4
EPA believed that if the states in the Northeast passed legislation adopting the California car program this would help alleviate the ozone hazard. Ozone (O sub3 ) in the upper atmosphere was not the problem. There it absorbs harmful ultraviolet rays. Ozone at ground level is another matter entirely. It is one of the primary constituents of smog. Ozone's three-atom arrangement is highly unstable: the third oxygen atom, in a process called oxidation, has an aggressive tendency to react with whatever substance is available. Ozone's high reactivity, evident in the stratosphere where ozone reacts with chlorofluorocarbons, has harmful effects at ground level. Much of the ozone inhaled reacts with sensitive lung tissues, irritating and inflaming the lungs, and causing a host of short-term adverse health consequences including chest pains, shortness of breath, coughing, nausea, throat irritation, and increased susceptibility to respiratory infections. Final Rule, 60 Fed.Reg. 4712, 4712-13 (1995). "The mechanisms of ozone-induced impairment of lung function are only partly understood," but "the effects of a single exposure to" ozone "are reversible and last up to 48" hours. Editorial, Ozone: Too Much in the Wrong Place, THE LANCET, July 27, 1991, at 221. On the other hand, "[c]hronic effects that have resulted from recurrent seasonal exposure to ozone have been studied only to a limited degree. Most of the current evidence is derived from animal responses to chronic ozone exposure." COMMITTEE ON TROPOSPHERIC OZONE FORMATION AND MEASUREMENT, NATIONAL RESEARCH COUNCIL, RETHINKING THE OZONE PROBLEM IN URBAN AND REGIONAL AIR POLLUTION 33 (1991) [hereinafter NATIONAL RESEARCH COUNCIL]. In addition to its direct effect on humans, excessive ozone can also damage forests and food crops.
5
Exactly how ozone is created and transported in the lower atmosphere, and how it decays, is a matter of extreme complexity. Ozone is not a direct pollutant. Vehicles do not emit it, and it does not billow out of smokestacks. Instead, it is formed mostly from the mixture of two chemical precursors emitted by automobiles and industry: nitrogen oxides (NO subx ) and a large group of hydrocarbon pollutants called volatile organic compounds (VOCs).1 NATIONAL RESEARCH COUNCIL, supra, at 153. These precursors cook in the sun--they cook best in a "sea" of warm stagnant air--and produce ozone through a complex chain of reactions. The creation of ozone can thus be seen as a seasonal phenomenon, with concentrations peaking in the summer, and as a diurnal occurrence, with concentrations peaking during the afternoon and falling during the night. The precursor- and ozone-laden air slowly moves downwind, and as the air mass moves, ozone levels often continue to increase, in part because the ozone has more time to develop, in part because the air mass picks up more precursors along the way. Ultimately, this process can bring high ozone levels to areas hundreds of miles downwind of the pollution sources. See id. at 100. Therein lies the source of much of the difficulty in controlling it.
6
At the moment, dozens of areas throughout the United States have not attained the national ambient air quality standard for ozone. The standard permits a maximum one-hour average ozone concentration of 0.12 parts per million. 40 C.F.R. § 50.9. If the ambient air exceeds this standard more than once per year averaged over three years, the area is considered in "nonattainment." Id. The ozone season of 1994 was a good one; EPA estimated that there was twelve percent less ozone than in 1985. EPA AIR QUALITY TRENDS BROCHURE 1994 (EPA-454/F-95-003) (1995). But the warmer 1995 season was worse, with national ozone concentrations increasing four percent from 1994. EPA AIR QUALITY TRENDS BROCHURE 1995 (EPA-454/F-96-008) (1996). According to press reports, New Jersey and Maryland each exceeded the ambient air standard fourteen times. See Northeast Ozone Problems Continue, Show Long-Term Gain, OCTANE WK., Oct. 9, 1995, at 2.
7
Because of the ozone transport phenomenon, an area in nonattainment may be unable to do much about it. Even if the state implements the strictest practicable control measures, it might still fail to satisfy the ambient air standard. Across the country there are what one might call interstate ozone transport regions: around Chicago; in the region from Cleveland to Erie, Pennsylvania; in the Texas-Louisiana area; and in the northeast from Virginia to Maine, an area that became subject to special legislation in 1990.B
8
The "Northeast Ozone Transport Region," defined in the 1990 amendments to the Clean Air Act, consists of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, Vermont, and the District of Columbia.2 To decrease ozone pollution in this "Region," EPA promulgated the rule we have before us. Each of these states had an implementation plan, adopted after public hearings, containing measures to control air pollution, and approved by EPA under section 110. CAA § 110(a)(1), 42 U.S.C. § 7410(a)(1). EPA's rule declared all of these implementation plans "substantially inadequate" and therefore in need of revision. Final Rule, 60 Fed.Reg. 4712, 4736 col. 2 (1995). The plans were inadequate, according to EPA, because nitrogen oxide and volatile organic compound emissions had to be reduced by 50% to 75% from a 1990 baseline "throughout" this densely populated Region to attain the national ambient air quality standard for ozone in "serious and severe areas." Id. at 4720 col. 1. EPA acknowledged that it was "enormously complicated to determine which reductions" were needed where. Id. col. 2. But, it said, "wind trajectory data" supported the following conclusions. Id. col. 3. During the summer, ozone and emissions of precursors in the Washington, D.C. area contribute to the ozone problem in Baltimore, which lies to the northeast. Baltimore and the rest of Maryland contribute to ozone pollution in the Philadelphia area, which contributes to the problem in New York, which contributes to the problem in Boston, and so on up the Eastern seaboard from one metropolitan area to another. Id. at 4720-21. (Of course the northeastern section of the country is not some isolated island; and there are indications that western Pennsylvania receives ozone from Ohio and West Virginia.)
9
Congress, too, had found the entire subject very complex. In the 1990 amendments it ordered EPA, "in conjunction with the National Academy of Sciences, [to] conduct a study on the role of ozone precursors in tropospheric ozone formation and control. The study shall examine the roles of NO subx and VOC emission reductions, the extent to which NO subx reductions may contribute (or be counterproductive) to achievement of attainment in different nonattainment areas...." CAA § 185B, 42 U.S.C. § 7511f. One part of the study, completed in 1991, found that reducing NO subx emissions can sometimes increase, rather than decrease, ambient ozone levels. See NATIONAL RESEARCH COUNCIL, supra, at 11. "This seemingly contradictory prediction, that lowering NO subx can, under certain conditions, lead to increased ozone, results from the complex chemistry involved in ozone formation in VOC-NO subx mixtures...." Id. at 167.
10
Nonetheless, having declared the state plans inadequate, EPA required the states to revise their plans and enact a Low Emission Vehicle program, or LEV as the parties call it. In EPA's words, the final rule orders "all of the northeastern states to adopt the California car program to reduce significantly the pollution emitted by new cars and light-duty trucks." Final Rule, 60 Fed.Reg. at 4713 col. 1. To appreciate the rationale of this order one must understand that there are two, and only two, permissible sets of regulations limiting emissions from new cars sold in the United States. There are the California regulations; and there are the federal regulations, which preempt the laws of the other 49 states. CAA §§ 202, 209(a), 42 U.S.C. §§ 7521, 7543(a). The California standards--the "Low Emission Vehicle" standards--are considerably more restrictive than the federal standards and include ceilings on motor vehicle emission of nitrogen oxides, see 13 CAL. ADMIN.CODE § 1960.1(f)(2), (g)(1), and volatile organic compounds, see 13 CAL. ADMIN.CODE § 1960.1(f)(2), (g)(1), (g)(2), the two chief ozone precursors.
C
11
In finding the twelve state plans inadequate, and in requiring the states to adopt the California solution, EPA acted on the recommendation of the "Northeast Ozone Transport Commission," a body established by section 184 of the Act. CAA § 184, 42 U.S.C. § 7511c. As part of the 1990 amendments, section 184 set up a panel consisting of the governors of the twelve states (and the Mayor of the District of Columbia) or their delegates. This panel, or Ozone Commission as we shall call it, was to develop, through majority vote, proposals for additional control measures for ozone pollution in the Region "necessary to bring any area in such region into attainment." Id. § 7511c(c)(1).3
12
After EPA receives a Commission proposal, EPA must "publish in the Federal Register a notice stating that the recommendations are available and provide an opportunity for public hearing within 90 days beginning on the receipt date"; "commence a review of the recommendations to determine whether the control measures in the recommendations are necessary to bring any area into attainment" with national standards; and "consult with members of the commission" and take into account data and comments received during the notice and comment process. Id. § 7511c(c)(2), (c)(3).
13
From the time of receiving the Commission's recommendations, EPA has nine months: to "determine whether to approve, disapprove," or approve in part and disapprove in part, the recommendation; to "notify the commission in writing" of the Administrator's determination; and to "publish such determination in the Federal Register." Id. § 7511c(c)(4). Absent complete approval, EPA must explain "why any disapproved additional control measures are not necessary to bring any area in such region into attainment ... or are otherwise not consistent with" the remainder of the Act, and must recommend "actions that could be taken by the commission to conform the disapproved portion of the recommendations to the requirements" of section 184. Id. § 7511c(c)(4)(i) & (c)(4)(ii).
14
If EPA approves the recommendation, it must declare each state's implementation plan inadequate and it must order the states to include the approved control measures in their revised plans pursuant to section 110(k)(5). CAA § 184(c)(5), 42 U.S.C. § 7511c(c)(5). Failure to heed EPA's order unleashes a panoply of sanctions upon the noncomplying state. We will have more to say on the subject of sanctions later in the opinion.
15
EPA's final rule in this case resulted from the section 184 process just described. In August 1993, Maine, Maryland, and Massachusetts petitioned the Ozone Commission to adopt a recommendation calling for the application of the California Low Emission Vehicle program throughout the Region. See Notice of Availability, 59 Fed.Reg. 12,914, 12,915 col. 1 (1994). After holding several "public forums," and a hearing, the Commission voted on February 1, 1994, "to recommend that EPA mandate the California" vehicle program "throughout the" Region. Id. A minority of Ozone Commission members--those from Virginia, Delaware, New Jersey, and New Hampshire--voted against the recommendation. See id. On February 10, 1994, the Commission submitted the recommendation to EPA. Id. at 12,914 col. 1.
16
In its final rule, EPA approved the Commission's recommendation. 60 Fed.Reg. at 4713 col. 1. Therefore, as section 184(c)(5) required, EPA found "that the State Implementation Plans" for the twelve states in the Region "are substantially inadequate to comply with the requirements of section 110(a)(2)(D) of the Clean Air Act, 42 U.S.C. § 7410(a)(2)(D), and to mitigate adequately the interstate pollutant transport described in section 184 of the Clean Air Act, 42 U.S.C. § 7511c, to the extent that they do not provide for emission reductions from new motor vehicles in the amount that would be achieved by the" Low Emission Vehicle program. Final Rule, 60 Fed.Reg. at 4736 col. 2 (to be codified at 40 C.F.R. § 51.120(a)).
D
17
EPA purported to offer the states an alternative to enacting the California program. Instead of restricting the type of new cars sold within its jurisdiction, a state may choose its own mix of programs. To be an acceptable "Substitute Program," however, it must reduce ozone precursors anywhere from 3.5 to 6.5 times more than would the California program. See infra part II.A.4
II
18
Of petitioners' many challenges to EPA's rule, one is aimed at something known in Clean Air Act parlance as a "SIP call"--EPA's declaration that a state's implementation plan is substantially inadequate and must be revised. Virginia maintains that the record does not support the SIP call to it. If Virginia is correct, EPA's regulation requiring Virginia to adopt the California car program would fall. However, the issues raised by the other petitioners--the automobile manufacturers and dealers--reach beyond Virginia. If the states implement the California program in response to EPA's rule, these petitioners claim their members will be adversely affected throughout the Northeast Region as new car price increases take effect.5 Furthermore, it is not clear whether EPA would have issued a SIP call to any state if EPA knew it lacked a legal basis for requiring the California program. We therefore think it best to start our analysis with questions other than the SIP call, questions relating mainly to EPA's statutory authority.
19
We will discuss those questions in this order and explain why we have reached the following conclusions. First, did EPA condition its approval of a state's revision of its implementation plan on the state's adoption of the California program? We think the answer is yes. Second, does section 110 give EPA the authority to condition approval of a state's plan on the state's adoption of control measures EPA has chosen? We conclude that section 110 does not give EPA this authority. Third, does section 184 authorize EPA to so condition its approval of plan revisions? We believe the answer is yes. Fourth, did other provisions of the Clean Air Act nevertheless bar EPA from ordering states to enact the California program? We hold that EPA was so barred and that this portion of its final rule is therefore invalid.
20
* Did EPA condition approval of a state's revised implementation plan on the state's adoption of the California car program? EPA tells us it did not because it offered the states a choice--they could either enact the California program or submit a "Substitute Program." It turns out, however, that EPA's alternative is no alternative at all.
21
Having determined that, at a minimum, 50 percent reductions of each precursor are necessary to bring each northeastern state into ozone attainment, 60 Fed.Reg. at 4718 col. 3, EPA required any Substitute Program to reduce precursor emissions by the difference between that 50 percent and the percentage reduction "achievable through implementation of all of the Clean Air Act-mandated and potentially broadly practicable control measures," id. at 4737 col. 2 (to be codified at 40 C.F.R. § 51.120(d)(1) & (d)(2)). The phrase "potentially broadly practicable control measures" refers to other options--"those control measures that could potentially render the" California program "unnecessary in the" Northeast. Supplemental Notice, 59 Fed.Reg. at 48,678 col. 2. EPA has calculated that "potentially broadly practicable control measures" yield a 35.9 percent reduction in nitrogen oxides6 and a 37 percent reduction in volatile organic compounds. Final Rule, 60 Fed.Reg. at 4722. Since none of those options (taken individually or cumulatively) could produce the necessary 50 percent reduction for precursors, EPA takes the position that all the measures are necessary, and presupposes that those measures will be included in state implementation plans submitted sometime in the future. Id. at 4723 col. 3.
22
Thus, a state that chooses not to adopt the California program must legislate a state implementation plan containing measures to make up this "shortfall"--the difference between the 50 percent reductions EPA says is necessary and the 35.9 percent and 37 percent that it has already targeted for nitrogen oxides and volatile organic compounds, respectively. Virginia or any other state seeking to implement a program not involving California vehicles, therefore, must pass legislation or issue regulations or orders reducing nitrogen oxide production in the year 2005 by 14.1 percent (50 percent minus 35.9 percent), and volatile organic compound production by 13 percent (50 percent minus 37 percent).
23
In contrast, the California program, by 2005, reduces nitrogen oxides by 4 percent, and volatile organic compounds by 2 percent. Supplemental Notice, 59 Fed.Reg. at 48,683 col. 1. States adopting the California program need legislate nothing more.7 Virginia, therefore, must reduce nitrogen oxides 3.5 times (14.1%/4%) and volatile organic compounds 6.5 times (13%/2%) more than do states that pass legislation incorporating the California program, and Virginia must do so by means EPA has already concluded are not practicable.8 In sum, the Substitute Program is expected to solve a shortfall EPA itself has no idea how to remedy, a shortfall states enacting the California program are not expected to make up.
24
Of course, only a very foolish state would see EPA's offer to accept this Substitute Program as a real alternative. EPA conceded as much. No state, EPA recognized, "would seriously entertain unreasonable or impracticable measures to adopt in place of the" California program "in order to achieve the necessary emissions reductions." Supplemental Notice, 59 Fed.Reg. at 48,672 col. 2. As a practical matter, then, EPA "require[d] all the northeastern states to adopt the California car program." Final Rule, 60 Fed.Reg. at 4713 col. 1. And that is how we shall treat the rule.
B
25
Does section 110 give EPA the authority to condition approval of a state's plan on the state's adoption of control measures EPA has chosen? EPA's discovery that section 110 gave it this authority came late in the rulemaking proceedings. The Ozone Commission, acting pursuant to section 184, started the ball rolling. It forced ozone pollution in the Northeast to the forefront of EPA's agenda. In EPA's Notice of Proposed Rulemaking, the agency therefore naturally treated section 184 as the sole source of its authority to approve or disapprove the Commission's recommendation. See 59 Fed.Reg. 21,720, 21,720-21 (1994).
26
The agency shifted its position after automobile manufacturers and dealers began questioning the constitutionality of section 184. See Supplemental Notice, 59 Fed.Reg. at 48,670 col. 1 & n.11. In response to the proposed rule, some argued that EPA deference to the Ozone Commission's technical and policy judgments would violate the Appointments Clause of the Constitution9 and the nondelegation doctrine. Commenters also complained that the Joinder and Compact Clauses10 prevented a multi-state alliance such as the Ozone Commission from exercising significant power. And they maintained that the proposed rule forcing the California program on the states would violate the Tenth Amendment because it would " 'commandeer' state governments into the service of federal regulatory purposes, and would for this reason be inconsistent with the Constitution's division of authority between federal and state governments." New York v. United States, 505 U.S. 144, 175, 112 S.Ct. 2408, 2428, 120 L.Ed.2d 120 (1992).
27
In response to these comments, EPA issued a supplemental notice stating that the arguments against section 184's constitutionality lacked "merit," and that "in any case, given EPA's independent authority under section 110(k)(5), any constitutional question regarding the validity of section 184 would not affect the validity of the" proposed rule. Supplemental Notice, 59 Fed.Reg. at 48,670 col. 1. And so, not only section 184, but also section 110 supposedly provided the legal basis for EPA's action.
C
28
Enacted more than a quarter of a century ago, section 110 has gone through many changes, but its basic structure has survived. The provision has been the subject of dozens of appellate court decisions. Yet we are aware of no case (EPA has cited none) supporting the proposition EPA now urges upon us, namely, that under section 110 EPA may condition approval of a state's implementation plan on the state's adopting a particular control measure, here the California Low Emission Vehicle program. Despite the volumes of legislative history on the Clean Air Act and its amendments, EPA has offered no committee reports, no statements on the floor of either house, suggesting that anyone in Congress ever shared its view of section 110. Nor has EPA given us reason to believe that it has followed any consistent, long-standing practice of using section 110 to force states to adopt control measures of EPA's choosing. The final rule provides no explanation of why EPA read section 110 as it did. The rule contains only this bare conclusion: "EPA disagrees with comments claiming that EPA lacks" authority "because section 110 does not authorize EPA to require states to adopt specific measures...." Final Rule, 60 Fed.Reg. at 4717 col. 1. EPA's brief offers little more. We are told the "plain language" of the statute gives EPA this authority, and even if the language is not so plain, EPA's reading is reasonable and deserves our deference. Final Brief for Respondent at 34. We are not persuaded, and therefore do not reach Virginia's contention that EPA's interpretation would render section 110 unconstitutional, in violation of the Tenth Amendment.
29
Congress added section 110 to the Clean Air Act in 1970. See Clean Air Amendments of 1970, Pub.L. No. 91-604, § 4, 84 Stat. 1676, 1680-81 (1970). It has remained one of the key provisions of the Act. The Act authorizes EPA to promulgate national ambient air quality standards for ozone and five other pollutants. CAA §§ 108 & 109, 42 U.S.C. §§ 7408 & 7409. Areas that do not meet the minimum level of air quality mandated by these national standards are considered to be "nonattainment areas." CAA §§ 107(d) & 171(2), 42 U.S.C. §§ 7407(d) & 7501(2). The degree of nonattainment is classified as marginal, moderate, serious, severe, or extreme. CAA § 181(a), 42 U.S.C. § 7511(a).
30
If a state has an area within it that EPA has classified as being in nonattainment with respect to ozone (or one of the five other regulated pollutants), the state must devise and implement a "state implementation plan" ("State Plan"). Section 110 governs the interplay between the states and EPA with respect to the formulation and approval of such State Plans. 42 U.S.C. § 7410. The basic procedure is that "each state determines an emission reduction program for its nonattainment areas, subject to EPA approval, within deadlines imposed by Congress." Natural Resources Defense Council, Inc. v. Browner, 57 F.3d 1122, 1123 (D.C.Cir.1995).
31
Should a state fail to submit an implementation plan, or should its plan fail to provide the required reductions in air pollution, certain penalties--some mandatory, others at EPA's discretion--may follow. See generally Commonwealth of Virginia v. United States, 74 F.3d 517, 520 (4th Cir.1996); Natural Resources Defense Council, 57 F.3d at 1123-25 & n. 5. The noncomplying state may, for instance, be prevented from spending federal highway money in nonattainment areas. See CAA §§ 110(m), 176(c) & 179(b)(1); 42 U.S.C. §§ 7410(m), 7506(c) & 7509(b)(1). This sanction becomes mandatory if the state fails to implement an adequate State Plan within 24 months of EPA's finding that the state's proposed plan is deficient. CAA § 179(b)(1), 42 U.S.C. § 7509(b)(1). At that same point, EPA must impose a "federal implementation plan" ("Federal Plan") on those areas of the state in nonattainment. CAA § 110(c), 42 U.S.C. § 7410(c). The Federal Plan "provides an additional incentive for state compliance because it rescinds state authority to make the many sensitive and policy choices that a pollution control regime demands." Natural Resources Defense Council, 57 F.3d at 1124.
32
Section 110(a)(2), the predecessor to the current section 110(k)(5), spelled out the extent of EPA's authority over state implementation plans within this structure.11 When enacted in 1970, the relevant portion of section 110(a)(2) read:
33
The Administrator shall, within four months after the date required for submission of a plan under paragraph (1), approve or disapprove such plan, or each portion thereof. The Administrator shall approve such plan, or any portion thereof, if he determines that it was adopted after reasonable notice and hearing and that--
34
* * * *
35
(H) it provides for revision, after public hearings, of such plan (i) from time to time as may be necessary to take account of revisions of such national primary or secondary ambient air quality standard or the availability of improved or more expeditious methods of achieving such primary or secondary standard; or(ii) whenever the Administrator finds on the basis of information available to him that the plan is substantially inadequate to achieve the national ambient air quality primary or secondary standard which it implements.
36
42 U.S.C. § 1857c-5(a)(2)(H) (1970) (emphasis added). At the time, section 110(a)(3) required EPA to review a state's revisions to its plan--which is what EPA is calling for here--by the same criteria EPA used to judge the original plan. 42 U.S.C. § 1857c-5(a)(3) (1970). In 1970 as now, if a state failed to submit a plan, or if the plan did not satisfy section 110(a)(2), EPA had a non-discretionary duty to implement the Act through a federal implementation plan. CAA § 110(c), 42 U.S.C. § 1857c-5(c) (1970).
37
In 1975, the Supreme Court analyzed section 110's "division of responsibilities" between the states and the federal government. Train v. Natural Resources Defense Council, 421 U.S. 60, 79, 95 S.Ct. 1470, 1482, 43 L.Ed.2d 731 (1975). The narrow issue in Train was whether states could use section 110(a)(3) to seek "revisions" of State Plans in order to ease limits on a single pollution source, in essence circumventing section 110(f), which restricted the circumstances under which such a "variance" could be granted. A state could, the Court held, use section 110(a)(3) for such a purpose so long as the revised plan would still enable the state to attain and maintain national ambient standards. Train, 421 U.S. at 72, 95 S.Ct. at 1478.
38
A "broader issue," the Court thought, was at stake in the case--namely, "whether Congress intended the States to retain any significant degree of control over the manner in which they attain and maintain national standards." Id. at 78, 95 S.Ct. at 1481. The Act expressly gave the states initial responsibility for determining the manner in which air quality standards were to be achieved. See id. at 64, 95 S.Ct. at 1474-75. Section 107(a) of the Act read then, as it does now: "Each State shall have the primary responsibility for assuring air quality within the entire geographic area comprising such State by submitting an implementation plan which will specify the manner in which national primary and secondary ambient air quality standards will be achieved and maintained within each air quality control region in such State." CAA § 107(a), 42 U.S.C. § 7407(a) (emphasis added). In light of section 107(a), the Court construed section 110:
39
The Act gives the Agency no authority to question the wisdom of a State's choices of emission limitations if they are part of a plan which satisfies the standards of § 110(a)(2), and the Agency may devise and promulgate a specific plan of its own only if a State fails to submit an implementation plan which satisfies those standards. § 110(c). Thus, so long as the ultimate effect of a State's choice of emission limitations is compliance with the national standards for ambient air, the State is at liberty to adopt whatever mix of emission limitations it deems best suited to its particular situation.
40
Train, 421 U.S. at 79, 95 S.Ct. at 1482. The Supreme Court repeated this interpretation in Union Electric Co. v. EPA, 427 U.S. 246, 96 S.Ct. 2518, 49 L.Ed.2d 474 (1976): section 110 left to the states "the power to determine which sources would be burdened by regulations and to what extent." Id. at 269, 96 S.Ct. at 2531. To be sure, if EPA rejected a State Plan because it would not achieve or maintain ambient air quality standards, EPA could promulgate a federal implementation plan. But even then, as EPA admitted in confessing error in the Supreme Court, section 110 did not permit the agency to require the state to pass legislation or issue regulations containing control measures of EPA's choosing. EPA v. Brown, 431 U.S. 99, 103, 97 S.Ct. 1635, 1636-37, 52 L.Ed.2d 166 (1977) (per curiam).
41
In 1977 Congress again amended the Act, changing some parts of section 110.12 But these changes did not modify the "division of responsibilities" Train had discerned in the Act. EPA's later administrative efforts to alter the balance were therefore firmly rebuffed. Bethlehem Steel Corp. v. Gorsuch, 742 F.2d 1028 (7th Cir.1984), held that EPA could not, under the guise of partially approving a state implementation plan, render the plan more stringent than the state intended. If EPA wanted to impose stricter regulations, the Clean Air Act gave it the option of implementing a federal plan. The court explained:
42
[T]he Clean Air Act creates a partnership between the states and the federal government. The state proposes, the EPA disposes. The federal government through the EPA determines the ends--the standards of air quality--but Congress has given the states the initiative and a broad responsibility regarding the means to achieve those ends through state implementation plans and timetables of compliance.... The Clean Air Act is an experiment in federalism, and the EPA may not run roughshod over the procedural prerogatives that the Act has reserved to the states, ... especially when, as in this case, the agency is overriding state policy.
43
Id. at 1036-37. Florida Power & Light Co. v. Costle, 650 F.2d 579 (5th Cir.1981), is to the same effect. EPA's "attempting to require Florida to include" a particular provision in its State Plan was "clearly an abuse of discretion; it is agency action beyond the Congressional mandate," action that would "usurp state initiative in the environmental realm," and "disrupt the balance of state and federal responsibilities that undergird the efficacy of the Clean Air Act." Id. at 587, 589.
44
Thus, as section 110 stood in 1975 when the Supreme Court decided Train and as it stood after the 1977 amendments, the provision did not confer upon EPA the authority to condition approval of Virginia's implementation plan, or the plan of any other state, on the state's adoption of a specific control measure. EPA "identifies the end to be achieved, while the states choose the particular means for realizing that end." Air Pollution Control Dist. v. USEPA, 739 F.2d 1071, 1075 (6th Cir.1984). The validity of EPA's argument that it now has broader authority depends, therefore, on whether the 1990 Clean Air Act Amendments eliminated the "liberty" every state had under the earlier legislation "to adopt whatever mix of emission limitations it deems best suited to its particular situation." Train, 421 U.S. at 79, 95 S.Ct. at 1482.
45
The 1990 amendments were the most comprehensive since 1970, but the changes to section 110, at least as they concern EPA's approval of State Plans, were predominantly of syntax, not substance. Section 110(a)(2)(H)(ii), as amended, requires each State Plan to "provide for revision" not only when EPA finds the plan "substantially inadequate to attain" national ambient standards, but also when EPA finds that the plan does not "otherwise comply with any additional requirements established under this chapter." CAA § 110(a)(2)(H)(ii), 42 U.S.C. § 7410(a)(2)(H)(ii).
46
Also in the 1990 law, Congress repealed section 110(a)(3)(A), a provision requiring the Administrator to approve a State Plan revision meeting the (a)(2) criteria. The language of the repealed subsection was moved to a new subsection (k), so that the new section 110(k)(3) imposed the same obligation upon the Administrator to approve plans satisfying the (a)(2) requirements: "In the case of any" State Plan submission or revision, "the Administrator shall approve such submittal as a whole if it meets all of the requirements of this chapter." Id. § 7410(k)(3).
47
The 1990 amendments added subsection (k)(5), on which EPA relies in this case. Like the original section 110(a)(2)(H)(ii), this new section 110(k)(5) gave EPA authority to require states to revise their plans if they have failed to attain or maintain national ambient air quality standards. 42 U.S.C. § 1857c-5(a)(2)(H)(2) (1970); 42 U.S.C. § 7410(k)(5) (1994). So far as EPA's authority is concerned, the new subsection merely duplicated the language in the 1970 version of section 110(a)(2)(H)(ii). The first two sentences of section 110(k)(5) now read:
48
Whenever the Administrator finds that the applicable implementation plan for any area is substantially inadequate to attain or maintain the relevant national air quality standard, to mitigate adequately the interstate pollution transport described in [CAA sections 176A or 184] or to otherwise comply with any requirement of this Act, the Administrator shall require the State to revise the plan as necessary to correct such inadequacies. The Administrator shall notify the State of the inadequacies, and may establish reasonable deadlines (not to exceed 18 months after the date of such notice) for the submission of such plan revisions.
49
42 U.S.C. § 7410(k)(5).
50
The main differences between this portion of subsection (k)(5) and the original section 110(a)(2)(H)(ii) are that EPA may set the timetable for a state to revise its plan, and that a plan's failure "to mitigate adequately the interstate pollution transport described in" sections 176A or 184 may trigger the need for revision. Neither of these differences, however, amounts to a new grant of authority to EPA to require states to insert in their plans control measures EPA has selected. The original act, interpreted in Train v. Natural Resources Defense Council, 421 U.S. 60, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975), permitted EPA to call upon a state to revise its plan whenever the Administrator found the plan substantially inadequate. Section 110(k)(5) does the same.
51
EPA apparently thinks the "as necessary" language in section 110(k)(5) altered the division of responsibilities between the states and the agency. We suppose the idea is that because section 110(k)(5) empowers EPA to "require the State to revise the plan as necessary to correct" inadequacies, it empowers EPA to require the state to include particular control measures in the revised plan. There is nothing to this.
52
The Supreme Court's decision in Train provides the starting point, and is itself the endpoint for interpreting section 110, unless an "intervening development of the law has 'removed or weakened the conceptual underpinnings from the prior decision, or ... the later law has rendered the decision irreconcilable with competing legal doctrines or policies.' " Neal v. United States, --- U.S. ----, ---- - ----, 116 S.Ct. 763, 768-69, 133 L.Ed.2d 709 (1996) (quoting Patterson v. McLean Credit Union, 491 U.S. 164, 173, 109 S.Ct. 2363, 2370-71, 105 L.Ed.2d 132 (1989)). Congress' insertion of "as necessary" in section 110(k)(5) does not affect the underpinnings of Train, nor is the Train interpretation irreconcilable with those two words. All this additional language does is keep EPA within bounds. If a state plan is inadequate--that is, if the state is not achieving an ambient air quality standard--EPA can call only for revisions "as necessary" to correct that problem. EPA cannot, in other words, require the state to go through a wholesale revision of its entire plan. In that respect, section 110(k)(5) complements section 110(a)(2)(H)(ii), the section requiring State Plans to contain procedures for revisions. We know, for the reasons spelled out above, that Congress did not give EPA authority to choose the control measures or mix of measures states would put in their implementation plans. And we can think of no reason why Congress, merely by inserting the words "as necessary," would have meant to hand over that authority to EPA when it calls upon states to revise their implementation plans.13 We would have to see much clearer language to believe a statute allowed a federal agency to intrude so deeply into state political processes. See Gregory v. Ashcroft, 501 U.S. 452, 463, 111 S.Ct. 2395, 2402, 115 L.Ed.2d 410 (1991).
53
We therefore hold that the 1990 amendments did not alter the division of responsibilities between EPA and the states in the section 110 process. It was with this understanding that we recently summarized the statutory system: "The states are responsible in the first instance for meeting the" national ambient standards "through state-designed plans that provide for attainment, maintenance, and enforcement of the" national standards "in each air quality control region. Thus, each state determines an emission reduction program for its nonattainment areas, subject to EPA approval, within deadlines imposed by Congress." Natural Resources Defense Council, Inc. v. Browner, 57 F.3d 1122, 1123 (D.C.Cir.1995).
54
Because section 110 does not enable EPA to force particular control measures on the states, EPA's authority to promulgate the rule under review must be derived from section 184 alone.
D
55
Does section 184 give EPA the authority to condition approval of a state's plan on the state's adoption of particular control measures? The language of this statute, unlike section 110, answers with an emphatic yes. By a majority vote, the Ozone Commission recommends "additional control measures" for all or part of the Region. CAA § 184(c)(1), 42 U.S.C. § 7511c(c)(1). If EPA approves the recommendation, section 184(c)(5) requires it to issue a "finding" that the implementation plans of the affected states are inadequate. "Such finding shall require each such State to revise its implementation plan to include the approved additional control measures within one year after the finding is issued." Id. We think the only possible reading of section 184(c)(5) is that a state must revise its plan to include whatever "additional control measures" EPA has approved, or it must suffer the consequences of losing its federal highway funds, of having new factories and other "major stationary sources" of air pollution restricted, and of having the federal government impose an implementation plan in the state. See Commonwealth of Va. v. Browner, 80 F.3d 869, 881-83 (4th Cir.1996).
56
Virginia and the other petitioners do not quarrel with this reading of section 184. But, they say, section 184 is unconstitutional in light of the role of the Ozone Commission. We would not have to reach the constitutional questions if, as Virginia also argues, sections 202 and 177 of the Clean Air Act barred EPA from ordering states to implement the California car program. It is an old principle that if a case may be decided on statutory grounds "it will be unnecessary, and consequently improper, to pursue any inquiries, which would then be merely speculative, respecting the power of Congress in the case." Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 441, 5 L.Ed. 257 (1821) (Marshall, C.J.); Ashwander v. Tennessee Valley Auth., 297 U.S. 288, 347, 56 S.Ct. 466, 483, 80 L.Ed. 688 (1936) (Brandeis, J., concurring). And so we turn to those two sections.
E
57
Does section 177, read together with section 202, forbid EPA from conditioning its approval of a state's implementation plan on the state's adoption of the California program to limit motor vehicle emissions? We hold that this provision did so bar EPA and that, in this respect, the final rule is invalid.
58
Section 202 of the Clean Air Act, codified at 42 U.S.C. § 7521, regulates emission standards for new motor vehicles or new motor vehicle engines. The standards, covering all air pollutants that may endanger public health or welfare, preempt the laws of every state except California. CAA § 209(a) & (b), 42 U.S.C. § 7543(a) & (b). Why Congress exempted California, and how, is explained in Motor Vehicle Manufacturers Ass'n v. New York State Department of Environmental Conservation, 17 F.3d 521, 524-28 (2d Cir.1994). We will not go into the subject here.
59
With respect to the federal "Phase I" standards applicable to all the states except California, subparagraph (b)(3)(C) of section 202 provides: "It is the intent of Congress that the numerical emission standards specified in subsections (a)(3)(B)(ii), (g), (h), and (i) of this section shall not be modified by the Administrator after November 15, 1990, for any model year before the model year 2004."14 CAA § 202(b)(3)(C), 42 U.S.C. § 7521(b)(3)(C). Section 202(b)(3)(C) thus prevents EPA from prescribing, before the model year 2004, emissions standards for motor vehicles more restrictive than those already written into the statute. Accord id. § 202(i)(1), (i)(3)(A)(ii), (i)(3)(B)(ii), (i)(3)(C), (i)(3)(E). The proviso just quoted resolved a debate in the Senate about whether there should be any future rounds of heightened emission standards. See, e.g., 136 CONG. REC. S250 (daily ed. Jan. 24, 1990) (statement of Sen. Baucus), reprinted in LEGISLATIVE HISTORY OF THE CLEAN AIR ACT AMENDMENTS OF 1990, at 4941 (1993) [hereinafter 1990 LEGISLATIVE HISTORY]. Senator Wirth, one of the sponsors of the bill, explained: "We do not know if the second round is going to be needed. This compromise was reached. Let us have a jump ball on the situation. Defer the question until the late 1990's; have EPA do a study. If that study points out a second round is needed" then "in effect we in the U.S. Congress can vote it up or down." 136 CONG. REC. S2739 (daily ed. Mar. 20, 1990), reprinted in 1990 LEGISLATIVE HISTORY, supra, at 5864.
60
In the meantime, section 202 required EPA to conduct a study of the "need for, and cost effectiveness of, obtaining further reductions in emissions from [cars and certain trucks], taking into consideration alternative means of attaining or maintaining the national ambient air quality standards pursuant to State implementation plans." CAA § 202(i)(2)(A)(ii), 42 U.S.C. § 7521(i)(2)(A)(ii). EPA must report to Congress on its study no later than June 1, 1997. Based on the study, EPA must then determine by December 31, 1999, whether there is a need for new, stricter standards, and whether new standards would be cost effective. CAA §§ 202(i)(2)(B) & (i)(3), 317(a)(5), 42 U.S.C. §§ 7521(i)(2)(B) & (i)(3), 7617(a)(5).
61
To the extent EPA's final rule can be viewed as setting emissions standards for new motor vehicles in the northeastern states stricter than those contained in section 202, the rule is inconsistent with the statute.15 EPA nevertheless denies that it violated § 202. States may voluntarily choose to adopt the California standards, pursuant to section 177.16 And so, EPA's argument goes, it is the northeastern states, not EPA, who will be deciding to impose the California program on their citizens.
62
There is more than a bit of inconsistency in EPA's stance. On the one hand, in responding to Virginia's constitutional arguments, EPA denies that the Ozone Commission has any real power. EPA tells us that it and it alone has the final say under section 184. Any resulting orders of the sort section 184(c)(5) contemplates--orders, in the statute's words, "requir[ing] each such State to revise its implementation plan to include the approved additional control measures"--are EPA's, not the Commission's. But when it comes to sections 202 and 177, EPA asks us to believe that the states who implement the California program in response to EPA's section 184 order will be doing so voluntarily. Perhaps this is true with respect to states whose governors voted for the Commission's recommendation, although the legislatures in those states might have something to say on the subject. But no one can suppose that Virginia, whose governor voted against the recommendation, will be freely enacting these restrictive emission standards.
63
It is time to examine section 177 more closely. It provides that "any State ... may adopt and enforce ... standards relating to control of emissions from new motor vehicles or new motor vehicle engines" if the state standards "are identical to the California standards" and if the standards are adopted "at least two years before" they take effect. CAA § 177, 42 U.S.C. § 7507. As EPA has acknowledged, section 177 gives states the discretion to pass laws containing certain emission standards, laws that would otherwise be preempted. Supplemental Notice, 59 Fed.Reg. at 48,761 col. 1. In other words, a state may decide to follow California's lead, or it may not.
64
EPA's rule takes this choice from the states. To say, as EPA has, that it is "requiring the states to exercise their own independent authority under section 177" is to admit that EPA is depriving the states of that authority. Final Rule, 60 Fed.Reg. at 4718 col. 1. Independence signifies freedom from the dictates of a federal agency. EPA's rule does not respect the states' independent authority; it removes it. At several points in its final rule EPA made no bones about this. EPA said its rule would "mandate state action that would otherwise be discretionary," id. at 4718 col. 2, and that it was "requir[ing] all the northeastern states to adopt the California car program," id. at 4713 col. 1. And if EPA has chosen those emission standards and mandated their implementation, as it admits it has, the standards are effectively federal standards, in violation of section 177 in light of section 202.
65
There is another way of approaching this subject. One might treat EPA's action, not as a requirement that each northeastern state adopt the California standards, but merely as a condition on EPA's approval of the state's revised implementation plan. We do not think putting the matter this way changes the outcome. For one thing, the effect of EPA's rule remains the same despite the difference in formulation. For another, the House Committee Report on section 177 stated: "Finally, the Committee intends these provisions as grants of authority to the States. They are not intended as requirements. Nor may the Administrator require the States to utilize the authorities contained in this section as a condition of approval of a State's implementation plan."17 H.R.REP. NO. 95-294, at 311 (1977),reprinted in 1977 U.S.C.C.A.N. 1077, 1390; see also 123 CONG. REC. 16,675 (1977) (statement of Rep. Rogers) ("No one will force the State to make a judgment. It is left up to the State. They can either do it or not do it.... If a State decides to make that change to clean up the air, clean up the automobile, it can adopt and enforce the California standards which are more strict than the Federal."); id. at 16,677 (statements of Reps. Wirth and Waxman).
66
EPA would have us disregard this legislative history because it is pre-1990, when the Act was amended. True enough, the report is old, but so is section 177. The 1990 amendments did not affect the substance of section 177. Congress simply added language preventing the states from prohibiting the sale or manufacture of California-certified vehicles and from taking "any action of any kind to create, or have the effect of creating, a [different type of] motor vehicle." CAA § 177, 42 U.S.C. § 7507. As explained by Senator Baucus, the author of the Senate bill: "The new language placed in Section 177 ... neither adds to nor detracts from the present authority of the states under Section 177 to adopt, administer and enforce motor vehicle standards that are identical to those adopted by the state of California. The new language simply codifies, in effect, Congress' understanding of the authority originally" granted "to states by section 177 as expressed in the legislative history of section 177 when it was adopted in 1977." 136 CONG. REC. S16,976 (daily ed. Oct. 27, 1990), reprinted in 1990 LEGISLATIVE HISTORY, supra, at 1021-22.
67
EPA has another defense against the charge that it has violated section 202 and section 177. The argument is that in enacting section 184 and giving the agency the authority to order states to include control measures in their plans, Congress did not "exclude motor vehicle standards from the measures available to achieve attainment," Final Brief for Respondent at 41. But this proves much too much. The fact is that section 184 excludes no sort of control measures, of which there are many, some more effective than others. A state might ration gasoline; impose tougher emission standards for boilers, gas turbines, and large internal combustion engines, Supplemental Notice, 59 Fed.Reg. at 48,679 col. 2; encourage carpooling; develop "a comprehensive system of fees and incentives designed to affect driving habits and vehicle usage," id. at 48,680 col. 2; require "California reformulated gasoline", id.; enhance "vehicle inspection and maintenance" programs, CAA § 182(c)(3), 42 U.S.C. § 7511a(c)(3); encourage "the voluntary removal from use and the marketplace of pre-1980 model year light duty vehicles and pre-1980 model year light duty trucks," CAA § 108(f)(1)(A)(xvi), 42 U.S.C. § 7408(f)(1)(A)(xvi).
68
But among the universe of possible control measures, Congress specifically barred EPA from imposing one particular type--stricter emissions limitations on motor vehicles than those set forth in section 202. And "when a conflict arises between specific and general provisions of the same legislation, the courts should give voice to Congress's specific articulation of its policies and preferences." Ohio Power Co. v. FERC, 954 F.2d 779, 784 (D.C.Cir.1992). Here Congress's policy and preference is loud and clear. It "is the intent of Congress that" EPA not modify the "numerical emission standards" for "any model year before ... 2004." CAA § 202(b)(1)(C), 42 U.S.C. § 7521(b)(1)(C). EPA therefore may not require, mandate, order, or impose conditions demanding that any state enact particular motor vehicle emission standards, even if those standards are identical to California's. The time will come when EPA can make its case for tougher emission limitations on motor vehicles. But that time is years from now and, under section 202, the case must be made to Congress.III
69
This brings us to the issue we postponed at the beginning of part II of this opinion--whether the record supported EPA's "SIP call." In its final rule EPA declared that each of the state's implementation plans were "substantially inadequate to comply with the requirements of section 110(a)(2)(D) ... and to mitigate adequately the interstate pollution transport described in section 184 ... to the extent that they do not provide for emissions reductions from new motor vehicles in the amount that would be achieved by the" California "low emission vehicle ... program." Final Rule, 60 Fed.Reg. at 4736 col. 2 (to be codified at 40 C.F.R. § 51.120(a)).
70
EPA's decision to declare the state plans inadequate depended on its view that it could order the California remedy. Section 184 limits EPA to requiring the control measures the Ozone Commission proposes as "necessary" to cure the problem the Commission identifies. Upon finding the California program "necessary," EPA became obligated to declare, pursuant to section 110(k)(5), that the states' plans were inadequate under section 110(a)(2)(D). See CAA § 184(c)(5), 42 U.S.C. § 7511c(c)(5). Section 110(a)(2)(D) provides that state plans must prohibit "emissions activity"--such as driving cars--if this will produce air pollution in amounts that "contribute significantly to nonattainment" in any other state. CAA § 110(a)(2)(D), 42 U.S.C. § 7410(a)(2)(D). EPA's reasoning was that if the California program is necessary, then the failure of a state to have that program equals a failure (under section 110(a)(2)(D)) to prohibit "significant contribution" to nonattainment in another state. See Final Rule, 60 Fed.Reg. at 4718 col. 3; see also Geoffrey L. Wilcox, New England and the Challenge of Interstate Ozone Pollution Under the Clean Air Act of 1990, 24 B.C. ENVTL. AFF. L.REV. 1, 49 (1996). This explains why EPA framed the SIP call as it did--the state implementation plans are inadequate "to the extent they do not provide for reductions from new motor vehicles in the amount that would be achieved" by the California program. 60 Fed.Reg. at 4736 col. 2 (to be codified at 40 C.F.R. § 51.120(a)); see also id. at 4718 col. 3, 4719 col. 1. In short, since the particular measure recommended to EPA is not one the agency can mandate, EPA's finding of inadequacy--its SIP call--cannot survive.
71
Furthermore, throughout the rulemaking process, EPA operated on the belief that it had discretion to decide whether to issue a SIP call under section 110, but had no such discretion under section 184. Section 184 forced EPA to review the Ozone Commission's recommendation, to decide if it was "necessary," and if it was, to declare all the state plans inadequate. EPA had "no discretion"; it had to find each state plan lacking the measure deficient. But the agency viewed section 110(k)(5) in a different light. As EPA put it, "if the Administrator were to determine ... that a particular measure is necessary to attain" the National Ambient Standards, "she might exercise her authority under section 110(k)(5) to find that a" State Plan "lacking such measure is substantially inadequate, but she might also refrain from doing so." Final Brief for Respondent at 64. Thus, although EPA purported to make an independent finding under section 110(k)(5), it is doubtful whether the agency would have exercised the discretion it finds in that provision if section 184 had not been triggered and if the agency had realized that section 110 gave it no power to choose this particular control measure for the states.
72
Virginia is the only state that has challenged EPA's rule and we have therefore considered whether to vacate the SIP call only with respect to Virginia. No one has argued for such a ruling. Furthermore, such limited relief would be inconsistent with EPA's approach and would threaten to further complicate this proceeding. EPA's modeling was based on an important and, it turns out, invalid assumption: that it could order each northeastern state to adopt the California program. Even if only Virginia's SIP call were stricken, any findings under section 110 would still have to be revised. If the ozone problem does in fact snowball as it moves up the Eastern seaboard, Virginia's lack of participation will necessarily affect all areas in the Region downwind of it, namely the rest of the entire Region. The SIP call requires states to "revise" their State Plans "as necessary to correct" them when the "Administrator finds that the applicable implementation plan ... is substantially inadequate to attain or maintain the relevant national ambient air quality standard," or "to mitigate adequately the interstate pollutant transport described in" sections 176A or 184. CAA § 110(k)(5), 42 U.S.C. § 7410(k)(5). In the absence of applicable modeling, no such agency finding could be made. Thus, there is no existing basis for these SIP calls.
73
Seven states plus the District of Columbia voted for the California program; only three states (New York, Massachusetts, and Connecticut) have enacted it. It is foreseeable that should the SIP call to other states remain in effect, some will be pressured to adopt the California program. They are, of course, free to do so on their own. But they may not be pushed into that step on the basis of an EPA order that is no longer factually supported. The automobile manufacturers and dealers, who would make and sell different and more expensive cars under the California program, would thus be harmed if we allowed the remaining SIP calls to remain in effect on what is an inadequate record.
74
Finally, we notice that EPA's 1996 deadline for areas in moderate nonattainment has passed and that its 1999 deadline for areas in serious nonattainment is drawing near. See CAA § 181(a)(1) Table 1, 42 U.S.C. § 7511(a)(1) Table 1. If EPA considers it appropriate to reexamine state implementation plans in the Northeast, and if EPA requires the states to make revisions in order to bring about further reductions in ozone precursors, it must take these now-passed and rapidly approaching deadlines into account.
IV
75
In sum, we hold that EPA may not, under section 110, condition approval of a state's implementation plan on the state's adoption of a particular control measure. We also hold that EPA may not, under section 184, circumvent section 177, as we interpret it in light of section 202. For the reasons given, we hold that the SIP call EPA issued with respect to each state and the District of Columbia cannot stand.
76
The petitions for review are granted and the rule is vacated in its entirety.
77
So ordered.
1
"Major sources of" volatile organic compounds "in the atmosphere include motor vehicle exhaust, emissions from the use of solvents, and emissions from the chemical and petroleum industries. In addition, there is now a heightened appreciation of the importance of reactive" volatile organic compounds "emitted by vegetation." NATIONAL RESEARCH COUNCIL, supra, at 1. Nitrogen oxides come "mainly from the combustion of fossil fuels; major sources include motor vehicles and electricity generating stations." Id
2
42 U.S.C. § 7511c(a). While Virginia is not among the specifically enumerated States in § 7511c(a), it is considered part of "the Consolidated Metropolitan Statistical Area that includes the District of Columbia." Id. Accordingly, Virginia's participation is limited to that portion of Virginia in the Washington, D.C., metropolitan area. See Supplemental Notice of Proposed Rulemaking, 59 Fed.Reg. 48,664, 48,685 col. 3 (1994) [hereinafter Supplemental Notice]. See generally U.S. Bureau of the Census, Population Estimates for Metropolitan Areas (MAs) Outside of New England: July 1, 1990 to July 1, 1995 (Mar. 8, 1996) (listing counties comprising the Washington-Baltimore consolidated metropolitan statistical area)
3
Another provision, also added in 1990, allows EPA (or the states) to establish interstate transport regions elsewhere in the country. CAA § 176A(a), 42 U.S.C. § 7506a(a). These regions may recommend strategies and plans to EPA and "may request" the agency to issue findings that a member state's implementation plan is substantially inadequate. Id. § 7506a(a) & (b)(2). An individual state, or the subdivision of a state, has the same ability to petition EPA with respect to the State Plan of a neighboring state. See CAA § 126(b), 42 U.S.C. § 7426(b). For that matter, any interested person has "the right to petition" EPA "for the issuance, amendment, or repeal" of any rule. 5 U.S.C. § 553(e). Section 184 is different. EPA must review the Ozone Commission's recommendation, it must do so on an expedited timetable, and it must order the states to include the additional control measures in their plans if EPA approves the recommendation. CAA § 184(c)(5), 42 U.S.C. § 7511c(c)(5)
4
EPA mentioned one other acceptable way for these states to reduce ozone precursors. The idea is to have automakers voluntarily opt into a program to meet higher emissions standards in the 49 states outside California (the "Equivalent Program"). These "national" standards would be less onerous than California's and would enable automakers to enjoy economies of scale in their production processes. Final Rule, 60 Fed.Reg. at 4714 cols. 1-2. The program is voluntary because section 202 of the Clean Air Act forbids EPA from itself modifying motor vehicle emission standards "before the model year 2004." CAA § 202(b)(1)(C), 42 U.S.C. § 7521(b)(1)(C)
The northeastern states also would have to agree to opt into the Equivalent Program, and in so doing, to abandon the California program, or any such program an individual state had itself independently enacted. See Final Rule, 60 Fed.Reg. at 4724 col. 3; Notice of Proposed Rulemaking, 60 Fed.Reg. 52,734, 52,740 col. 2 (1995).
Because the Equivalent Program is merely a proposal, we will not consider it further.
5
Neither EPA's final rule nor either of its notices of proposed rulemaking reach any conclusion about how EPA's ozone reduction rule will affect the price of new cars. Still, there are some estimates floating around. One is that "[v]iewed from a cost-per-car perspective, implementing the [California] program in the Northeast would cost over $2,000 per new vehicle sold.... Viewed from an aggregate cost perspective, households in the Northeast can expect to pay $20 billion between now and the year 2010 if the [California] standards are required." Gary Fauth, Regulating the Automobile: Learning from Cost-Effective Analysis, BUS. ECON. , Oct. 1, 1994, at 23. A report prepared for EPA obtained estimates that ranged from $186.50 to $1,020 and more per car. See E.H. Pechan & Associates, Inc., Draft Report (Revised), Analysis of Costs, Benefits, and Feasibility Regarding Implementation of OTC Petition on California Low Emission Vehicles 40 (Dec. 5, 1994). The $186.50 figure is based on estimates from California regulators. See id. An independent study commissioned by the American Automobile Manufacturers Association estimated the increase at $1,020 per car; the automakers put the figure much higher. See id. at 33-34, 40
6
Mandatory Clean Air Act measures plus implementation of the "0.15 NO subx standard for large boilers, gas turbines, and internal combustion engines would achieve approximately a 32% reduction in NO subx from 1990 baseline levels." Supplemental Notice, 59 Fed.Reg. at 48,682 col. 3. Add to that certain transportation control measures, which reduce nitrogen oxides by 2.5 percent, and the 1.4 percent reductions achievable with reformulated gasoline standards. Id. This yields a total 35.9 percent reduction
7
EPA asserts that states choosing the California program are expected to make up the shortfall, that the California program will be complemented by "other measures that may be promulgated thereafter." Final Brief for Respondent at 35. But this court has already rejected EPA's "strained construction" of section 110(k)(4) to "authorize conditional approval of a" State Plan "that contains no specific substantive measures so long as it ... includes ... a promise to adopt specific enforceable measures within a year and ... a schedule of 'interim milestones' in the future adoption process." Natural Resources Defense Council, Inc. v. EPA, 22 F.3d 1125, 1133-34 (D.C.Cir.1994). State Plans must contain "something more than a mere promise to take appropriate but unidentified measures in the future." Id. at 1134. Since EPA offers nothing more than wishful promises--and promises without deadlines, no less--we examine the reductions created by the measures actually undertaken by states choosing the California program
8
The disparity is greater still if instead of a 50 percent minimum total reduction, we use the 65 percent minimum for nitrogen oxides, the percentage EPA reported as necessary "for attainment in the serious and severe nonattainment areas of the region." Supplemental Notice, 59 Fed.Reg. at 48,682 col. 3. Using this figure, a state choosing a Substitute Program would be required to legislate solutions 7.3 times as great (29.1%/4%) for nitrogen oxides as would states implementing the California program
9
The Appointments Clause provides, in relevant part: The President "shall nominate, and by and with the advice and consent of the Senate, shall appoint ... all other officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law: but the Congress may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments." U.S. CONST. art. II, § 2, cl. 2
10
The Joinder Clause provides that "no new state shall be formed ... by the junction of two or more states, or parts of states, without the consent of the legislatures of the states concerned as well as of the Congress." U.S. CONST. art. IV, § 3, cl. 1. The Compact Clause forbids a state from, "without the consent of Congress," entering "into any agreement or compact with another state." U.S. CONST. art. I, § 10, cl. 3
11
Sections 110(a)(2)(A) to (G) required each State Plan to include deadlines for attaining national ambient standards, id. § 110(a)(2)(A); "emission limitations," id. § 110(a)(2)(B); ample monitoring and analysis, id. § 110(a)(2)(C); review provisions, id. § 110(a)(2)(D); "provisions for intergovernmental cooperation" to prevent one state's pollution from interfering with another state's compliance with the national ambient standards, id. § 110(a)(2)(E); sufficient funding, id. § 110(a)(2)(F); and provisions for inspections of motor vehicles "to enforce compliance with applicable emission standards," id. § 110(a)(2)(G). 42 U.S.C. § 1857c-5(a)(2)(A) to (a)(2)(G) (1970)
12
The 1977 amendments added section 110(a)(2)(E), which set forth a new condition for EPA's approval of a State Plan, namely that the plan contain "adequate provisions" "prohibiting any stationary source within the State from emitting any air pollutant in amounts which will ... prevent attainment or maintenance by any other State of any such national primary or secondary ambient air quality standard." Pub.L. No. 95-95, § 108, 91 Stat. 685, 693 (1977) (codified at 42 U.S.C. § 7410(a)(2)(E) (1982))
The 1977 legislation also amended section 110(a)(2)(I) to require that states submit State Plans as a "precondition for permitting major new stationary sources to locate in a nonattainment area." New England Legal Found. v. Costle, 475 F.Supp. 425, 430 (D.Conn.1979) (Jon O. Newman, J., sitting by designation), aff'd in part, 632 F.2d 936 (2d Cir.1980), and aff'd. in part, 666 F.2d 30 (2d Cir.1981).
13
If EPA could dictate the control measures, why did Congress require in section 110(l) that each state hold a public hearing on proposed revisions before the state adopts them and submits them to EPA for approval?
14
The provisions cited in subparagraph (b)(3)(C) refer, respectively to: the ceiling on nitrogen oxide emissions for heavy duty trucks, model years 1998 and thereafter, CAA § 202(a)(3)(B)(ii); Phase I tailpipe emissions standards in Table G for light-duty trucks and cars, model years 1994 and beyond, CAA § 202(g); the same, in Table H, for light duty trucks greater than 6000 lbs., CAA § 202(h); and the requirement that stricter Phase II standards for light-duty vehicles and light-duty trucks (to replace the existing Phase I standards) begin, if at all, no earlier than 2004, CAA § 202(i)
15
EPA ordered the states to enact California's standards contained in 13 CAL. ADMIN.CODE § 1960.1(g)(1), which sets emissions requirements for each class of California-certified cars; and § 1960.1(g)(2), which prescribes fleet averages for hydrocarbon emissions that must be met by selling a mix of the classes of cars certified in subpart (g)(1). Together these California provisions impose emissions limitations significantly more restrictive for non-methane hydrocarbon emissions--of which volatile organic compounds, ethane, and some exotic hydrocarbons are the constituents, see 40 C.F.R. § 51.100(s)--and nitrogen oxide emissions than those under existing federal Phase I standards. Compare 13 CAL. ADMIN.CODE § 1960.1(g)(1) & (g)(2) with CAA § 202(g), Table G. See generally 60 Fed.Reg. at 4736 col. 3 (implementing the California provisions as part of 40 C.F.R. § 51.120(c)(1)(iii) and (c)(1)(iv))
For example, under the California regulations, model year 2001 cars may emit, as a fleet average, 0.070 grams of non-methane compounds per mile driven, 13 CAL. ADMIN.CODE § 1960.1(g)(2). Under federal Phase I standards, cars may not emit more than 0.25 grams per mile driven, 42 U.S.C. § 7521(g), Table G.
16
New York, Massachusetts, and Connecticut did so before EPA issued its rule
17
The Senate bill did not contain any provision comparable to section 177, and the Conference Committee adopted the House provisions. See H.R. CONF. REP. NO. 95-564, at 158 (1977), reprinted in 1977 U.S.C.C.A.N. 1502, 1538
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37 A.3d 317 (2012)
424 Md. 628
S & S OIL
v.
JACKSON.
Pet. Docket No. 491.
Court of Appeals of Maryland.
Granted February 8, 2012.
Petition for Writ of Certiorari granted.
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Affirmed and Memorandum Opinion filed January 29, 2009
Affirmed and Memorandum Opinion filed January 29, 2009.
In The
Fourteenth Court of
Appeals
____________
NO. 14-07-00720-CV
____________
IN THE INTEREST OF C.F.H. AND
J.C.H.
On Appeal from the 12th
District Court
Grimes County, Texas
Trial Court Cause No. 2088
M E M O R A N D U M O P I N I O N
This case is an appeal from a trial court=s judgment
terminating a father=s parental rights to two minor children
and granting the children=s stepfather adoption of the children.
The father claims the evidence is legally and factually insufficient to support
the trial court=s judgment for termination. Under the
applicable standards of review, we conclude that the evidence is legally and
factually sufficient to support the termination of the father=s parental
rights. Accordingly, we affirm the trial court=s judgment.
I. Factual
and Procedural Background
James and Sandy had two children, C.F.H. (hereinafter ACarl@) and J.C.H.
(hereinafter AJohn@),[1]
during their marriage. In February 2004, Sandy and James divorced. The trial
court=s divorce decree
appointed Sandy as the minor children=s sole managing
conservator. The trial court ordered that James would have possession of the
children Aat times and with the terms and conditions mutually
agreed to in advance@ by Sandy. The trial court, upon a finding
of good cause, did not order child support for the children.
After the divorce, Sandy agreed to the children=s supervised
visitation with James from December 2004 through March 2005. In February 2006,
James was convicted on a charge for aggravated assault, and he was sentenced to
confinement for a period of ten years. He was denied parole in April 2007.
He has remained incarcerated since February 2006, and will again be eligible
for parole in April 2009.
Sandy later married Christopher, the children=s stepfather. In
2007, Sandy and Christopher petitioned the trial court to terminate James=s parental rights
to the children and to allow Christopher to adopt the children. At the time of
the termination proceeding, Carl and John were eight and seven years old,
respectively. The trial court made the following findings of fact and
conclusions of law:
The Court finds by clear and convincing evidence
that James [] hasB
a. voluntarily left the children alone or in
the possession of another without providing adequate support of the children
and remained away for a period of at least six months;
b. engaged in conduct or knowingly placed the
children with persons who engaged in conduct that endangers the physical or
emotional well-being of the children;
c. failed to support the children in
accordance with his ability during a period of one year ending within six
months of the date of the filing of the petition; and
d. knowingly engaged in criminal conduct that
resulted in his conviction of an offense and confinement or imprisonment and
inability to care for the children for not less than two years from the date
the petition was filed.
The Court also finds by clear and convincing
evidence that termination of the parent-child relationship between James [] and
the children the subject of this suit is in the best interest of the children.
The
trial court ordered that the parent-child relationship between James and each
of the children be terminated. The trial court granted Christopher=s request to adopt
the children. In this appeal, James challenges the legal and factual
sufficiency of the evidence supporting the trial court=s judgment in
terminating his parental rights.
II. Standards of Review
Because termination of parental rights is a drastic remedy,
due process and the Texas Family Code require the Department of Child
Protective Services to prove the necessary elements by the heightened burden of
proof of Aclear and convincing evidence.@ See Tex. Fam. Code Ann. ' 161.001 (Vernon
2008); In re B.L.D., 113 S.W.3d 340, 353B54 (Tex. 2003).
In this case, Sandy and Christopher had to prove by clear and convincing
evidence that James engaged one or more of the acts specified in section
161.001(1) as grounds for termination, and that termination of his parental
rights is in the children=s best interest.[2]
See Tex. Fam. Code Ann. ' 161.001; In re
J.L., 163 S.W.3d 79, 84 (Tex. 2005); In re U.P., 105 S.W.3d 222, 229
(Tex. App.CHouston [14th Dist.] 2003, pet. denied). A>Clear and
convincing evidence= means the measure or degree of proof that
will produce in the mind of the trier of fact a firm belief or conviction as to
the truth of the allegations sought to be established.@ Id. ' 101.007 (Vernon 2002).
In
reviewing legal-sufficiency challenges to termination findings, this court must
look at all the evidence in the light most favorable to the termination
findings to determine whether a reasonable factfinder could have formed a firm
belief or conviction that these findings are true. In re J.L., 163
S.W.3d 79, 85 (Tex. 2005). Looking at the evidence in the light most favorable
to the judgment means that a reviewing court must presume that the factfinder
resolved disputed facts in favor of its findings if a reasonable factfinder
could do so. Id. The reviewing court disregards any evidence that a
reasonable factfinder could have disbelieved but does not disregard undisputed
facts. Id.
In
reviewing the factual-sufficiency challenges to termination findings, we must
give due consideration to evidence that the factfinder reasonably could have
found to be clear and convincing. In re J.F.C., 96 S.W.3d 256, 266
(Tex. 2002). The factual-sufficiency inquiry is whether the evidence is such
that the factfinder reasonably could form a firm belief or conviction about the
truth of the petitioners= allegations. Id. This court should consider whether
the disputed evidence is such that a reasonable factfinder could not have resolved
that disputed evidence in favor of its finding. Id. If, in light of
the entire record, the disputed evidence that a reasonable factfinder could not
have credited in favor of the finding is so significant that a factfinder could
not reasonably have formed a firm belief or conviction about the truth of the
petitioners= allegations, then the evidence is factually insufficient. Id.
We must give due deference to fact findings, and we should not supplant the
factfinder=s judgment with our own. In re H.R.M., 209 S.W.3d 105, 108 (Tex.
2006).
III. Analysis
In their petition for termination, Sandy and Christopher
alleged the grounds in subsections (C), (E), (F), and (Q) of section 161.001(1),
and alleged that termination was in the children=s best interest.
In its decree for termination, the trial court relied upon all four of the
subsections cited by Sandy and Christopher and found that termination of James=s parental rights
was in the best interest of each of the children.
The acts specified in subsections (C), (E), (F), and (Q) of
section 161.001(1) are that a parent has:
(C) voluntarily left the child alone or in
possession of another without providing adequate support of the child and
remained away for a period of at least six months;
. . .
(E) engaged in conduct or knowingly placed the
child with persons who engaged in conduct which endangers the physical or
emotional well-being of the child;
(F) failed to support the child in accordance
with the parent=s ability during a period of one
year ending within six months of the date of the filing of the petition;
. . .
(Q) knowingly engaged in criminal conduct that
has resulted in the parent=s:
(i) conviction of an offense; and
(ii) confinement or imprisonment and inability
to care for the child for not less than two years from the date of filing the
petition;
Tex. Fam. Code Ann. '' 161.001(1)(C),
(E), (F), (Q).
In order to satisfy the first prong of section 161.001,
Sandy and Christopher were required to prove only one of these grounds. See
In re C.M.C., __ S.W.3d __, __, No. 14-07-00881-CV, 2008 WL 5244929, at *8
(Tex. App.CHouston [14th Dist.] 2008, no pet.).
A. Texas
Family Code Section 161.001(1)(Q)
Subsection (Q) warrants termination of parental rights when
a parent knowingly engaged in criminal conduct, resulting in the parent=s conviction of an
offense, and the parent is both incarcerated and unable to care for the child
for at least two years from the date the termination petition was filed. Tex. Fam. Code Ann. ' 161.001(1)(Q); In
re A.V., 113 S.W.3d 355, 360 (Tex. 2003) (construing phrase Atwo years from the
date of filing the petition@ to apply prospectively from the date of
filing a petition). Incarceration and a parent=s inability to
care are separate requirements for termination of parental rights under section
161.001(1)(Q)(ii). See In re E.S.S., 131 S.W.3d 632, 639 (Tex. App.CFort Worth 2004,
no pet.); In re B.M.R., 84 S.W.3d 814, 818 (Tex. App.CHouston [1st
Dist.] 2002, no pet.).
1. Evidence
of Incarceration
To support termination under subsection (Q), Sandy and
Christopher must prove that James=s criminal
conviction would result in confinement for at least two years from the date the
petition was filed. See In re D.R.L.M., 84 S.W.3d 281, 295 (Tex. App.CFort Worth 2002,
pet. denied). Sandy and Christopher filed their original termination petition
on April 25, 2007, and amended the petition on June 18, 2007. Under subsection
(Q), Atwo years from the
date of filing the petition@ would be April 25, 2009. See In re
A.V., 113 S.W.3d at 359B60.
In this case, James testified that he was convicted of
aggravated assault. He is currently incarcerated, serving a ten-year sentence
on that conviction. He began his sentence in February 2006, and he has a
projected release date in December 2015. In some cases, neither the length of
the sentence nor the anticipated release date determines when an incarcerated
parent will be released from prison. See In re H.R.M., 209 S.W.3d 105,
108 (Tex. 2006). An incarcerated parent who is sentenced to more than
two years= confinement may be paroled in less than two years. Id.
at 109. Therefore, evidence of eligibility for parole is relevant
to determine whether the parent will be released within two years. Id. James
conceded he was denied parole in April 2007. However, James anticipated being
eligible for parole again in April 2009, as long as he can Astay out of
trouble.@ However, merely
introducing parole-related evidence does not prevent a factfinder from forming
a firm conviction or belief that the parent will remain incarcerated for at
least two years, because parole decisions are Ainherently
speculative.@ Id. (A[W]hile all
inmates doubtless hope for early release and can take positive steps to improve
their odds, the decision rests entirely within the parole board=s discretion.@). James
acknowledged the possibility that he may not be granted parole in April 2009.
Sandy and Christopher produced evidence at trial that James had received eight
reports for misconduct and discipline problems since his sentence began in
February 2006. The mere presentment of parole-related evidence does not
prevent a factfinder from forming the firm conviction or belief that the parent
will remain incarcerated for at least two years. Id. (acknowledging
that parole decisions rest within a parole board=s decision).
Under the applicable standards of review, the record evidence is legally and
factually sufficient for a factfinder reasonably to have formed a firm belief
that James would remain imprisoned or confined on April 25, 2009, two years
from the date the termination petition was filed. See In re R.S., 252
S.W.3d 550, 552B53 (Tex. App.CTexarkana 2008, no
pet.) (reviewing factual and legal sufficiency); In re H.R.M., No.
14-05-00281-CV, 2007 WL 707553, at *2 (Tex. App.CHouston [14th
Dist.] Mar. 14, 2007, no pet.) (mem. op.) (concluding evidence was factually
sufficient).
2. Evidence of the
Incarcerated Father=s Inability to Care for the Children
Termination under subsection (Q) also requires that an
incarcerated parent will be unable to care for the child for two years from the
date when the termination petition is filed. See In re H.R.M., 209
S.W.3d at 110. A reviewing court may consider the availability of financial
and emotional support from the incarcerated parent in deciding an incarcerated
parent=s ability to care
for his child. See Brazoria Co. Children=s Prot. Servs. v.
Frederick, 176 S.W.3d 277, 279 (Tex. App.CHouston [1st
Dist.] 2004, no pet.). Once evidence has established that a parent=s knowing criminal
conduct resulted in incarceration for more than two years, the incarcerated
parent must produce some evidence showing how he would provide or arrange to
provide care for the child during that period. In re Caballero, 53
S.W.3d 391, 396 (Tex. App.CAmarillo 2001, pet. denied). If the
incarcerated parent meets that burden, then the petitioner holds the burden of
proving the arrangement would not satisfy the parent=s duties to the
child. See id.
James acknowledged he is serving a sentence for his
aggravated-assault conviction. He acknowledged difficulty in being able to
discipline the children, provide for their financial and emotional needs, read
to them at bedtime, or be involved with their sports teams if he is
incarcerated. However, James did not indicate, and no other evidence suggests,
that anyone else was willing to care for the children on James=s behalf during
his incarceration. See In re H.R.M., 2007 WL 707553, at *3.
Reviewing all the evidence in the light most favorable to
the finding, we conclude that a reasonable trier of fact could have formed a
firm belief or conviction that James, as a result of his incarceration, would
be unable to care for the children for two years from the date when the
termination petition is filed. In viewing the evidence in the light most favorable to the judgment,
a reasonable factfinder could
have formed a firm belief or conviction that the trial court=s findings under section
161.001(1)(Q) are true. See In re R.S., 252 S.W.3d 550,
552B53 (Tex. App.CTexarkana 2008, no
pet.). Therefore, the evidence is legally sufficient to support the trial
court=s finding under
section 161.001(1)(Q). See In re Caballero, 53 S.W.3d at 396. In light
of the entire record, we conclude the evidence is factually sufficient to
support the trial court=s finding under section 161.001(1)(Q),
because a reasonable factfinder could have formed a firm belief or conviction
that James is both incarcerated and unable to care for the children for at
least two years from the date the termination petition was filed. See id.;
In re H.R.M., 2007 WL 707553, at *3.
B. Best
Interests of the Children
A statutory act or omission under section 161.001(1) also
must be coupled with a finding that termination of the parent-child
relationship is in the best interest of the child. See Tex. Fam. Code Ann. ' 161.001; Yonko
v. Dep=t of Family and Prot. Servs., 196 S.W.3d 236,
242 (Tex. App.CHouston [1st Dist.] 2006, no pet.). In reviewing the
sufficiency of the evidence to support the second prong, a reviewing court
examines a number of factors, including (1) the desires of the child; (2) the
present and future physical and emotional needs of the child; (3) the present
and future emotional and physical danger to the child; (4) the parental
abilities of the persons seeking custody in promoting the best interest of the
child; (5) the programs available to assist these individuals to promote the
best interest of the child; (6) the plans for the child by the individuals or
agency seeking custody; (7) the stability of the home or proposed placement;
(8) acts or omissions of the parent which may indicate the existing
parent-child relationship is not appropriate; and (9) any excuse for the parent=s act or
omissions. See Holley v. Adams, 544 S.W.2d 367, 371B72 (Tex. 1976). A
finding in support of Abest interest@ does not require
proof of any unique set of factors, nor does it limit proof to any specific
factors. Id.
The children=s attorney ad
litem indicated that the children expressed a preference to terminate James=s parental rights
and allow Christopher to adopt them. Both Sandy and Christopher testified
about the children=s physical and emotional well-being and
financial security in their household, in which the children related well with
other children in the household. Christopher=s parents have
accepted the children as their own grandchildren and treated them as such.
Sandy and Christopher, upon the advice of John=s pediatrician,
sought psychiatric therapy for John=s emotional issues
in school. John has continued this therapy and takes medication to counteract
behavioral problems. James has expressed his belief to Sandy that John does
not need medication. John has been enrolled in a counseling program through
his school, and his counselor noted his improvement and progress. The
counselor, who met with Sandy, Christopher, and John, indicated that they
represented a strong family unit. A pre-adoption social study indicated that
Sandy and Christopher have made plans for the children=s future.
James complains that there is no evidence of how his
imprisonment affects the children=s day-to-day
lives; however, James acknowledged his inability to provide for the children=s financial and
emotional needs while incarcerated. Furthermore, James admits to having
engaged in criminal conduct since he was seventeen years old. He has been
incarcerated on multiple occasions. James concedes that, when he is again
eligible for parole in 2009, he will have been imprisoned for half of the
children=s lives. James
accepted responsibility for his choices and indicated he could have made better
choices in his past. Conduct that routinely subjects a child to the likelihood
that the child will be left alone because a parent is jailed endangers the
child=s emotional and
physical well-being. See Smith v. Texas Dep=t of Prot. &
Reg. Servs., 160 S.W.3d 673, 682 (Tex. App.CAustin 2005, no
pet.). A parent=s criminal actions are a factor in
determining the children=s best interest, providing that
termination of parental rights is not an additional punishment for a parent=s crime. See
In re C.T.E., 95 S.W.3d 462, 466 (Tex. App.CHouston [1st Dist.]
2002, pet. denied).
Reviewing all the evidence in the light most favorable to
the termination findings, we conclude that a reasonable factfinder could have
formed a firm belief or conviction as to the truth of the trial court=s findings that
termination of James=s parental rights is in the best interests
of the children. See Smith, 160 S.W.3d at 680B83 (concluding
evidence is legally sufficient to support best-interest finding). In light of
the entire record, the disputed evidence that a reasonable factfinder could not
have credited in favor of the trial court=s best-interest
findings is not so significant that a reasonable factfinder could not
reasonably have formed a firm belief or conviction as to the truth of these
findings. See In re J.F.C., 96 S.W.3d at 266. Giving due consideration
to the evidence, the trial court reasonably could have formed a firm belief or
conviction about the truth of its findings that termination of James=s parental rights
is in the best interests of the children. See Smith, 160 S.W.3d at 680B83 (concluding
evidence is factually sufficient to support best-interest finding); In re
J.F.C., 96 S.W.3d at 266.
IV. Conclusion
Under the applicable standards, set forth
above, the evidence is both legally and factually sufficient to support the
trial court=s finding that James=s parental rights
should be terminated. Therefore, we overrule James=s sole issue on
appeal and affirm the trial court=s judgment.
/s/ Kem Thompson
Frost
Justice
Panel consists of
Justices Frost, Seymore, and Guzman.
[1] To protect the privacy of the parties in this case,
we identify the children by fictitious names and the parents by their first
names only. See Tex. Fam. Code
Ann. ' 109.002(d) (Vernon 2008).
[2] Unless otherwise specified, all statutory citations
in this opinion are to the Texas Family Code.
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7 F.3d 1045
NOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or further order.
UNITED STATES of America, Plaintiff-Appellee,v.Manuel FLORES-MARTINEZ, Defendant-Appellant.
No. 92-3319.
United States Court of Appeals,Tenth Circuit.
Oct. 14, 1993.
ORDER AND JUDGMENT1
Before LOGAN, FEINBERG2 and McWILLIAMS, Circuit Judges.
1
Defendant Manuel Flores-Martinez appeals from a district court order imposing sentence after his guilty plea to illegal presence in the United States after having been deported, in violation of 8 U.S.C. 1326. The only issue in this direct criminal appeal is whether the sentencing court correctly calculated defendant's criminal history category by counting two prior convictions separately when calculating his base offense level under U.S.S.G. 4A1.1(a) and 4A1.2(a), (k), n.11. We afford due deference to the district court's application of the facts to the guidelines, and review questions of law de novo. 18 U.S.C. 3742(e); United States v. Banashefski, 928 F.2d 349, 351 (10th Cir.1991).
2
Defendant was convicted in March 1984 of using a counterfeit registration card to gain employment (conviction no. 1.) He pleaded guilty and received a suspended sentence and three years probation. Defendant was then deported and warned that he would be subjected to immigration charges if he returned illegally. In May 1984, defendant was arrested for disorderly conduct and obstruction of the legal system. He was turned over to the Immigration and Naturalization Service and charged with illegal entry. In August 1984, his probation in conviction no. 1 was revoked and he was resentenced to two years imprisonment, which was suspended, and five years probation. At the same proceeding, he pleaded guilty to the illegal entry charge (conviction no. 2) and received a two year sentence, also suspended, and five years probation, to run consecutively to that imposed in conviction no. 1.
3
Defendant's probation in conviction no. 1 was revoked a second time in June 1988, and he was given a two-year sentence. In the same hearing, his probation in conviction no. 2 was also revoked, and he received a two-year sentence to run consecutively to that in conviction no. 1.
4
Defendant was arrested yet again in November 1990 for violating the terms of that probation, and was charged with entering the country illegally.3 He entered into a plea agreement. In its sentencing proceeding the district court added three points each to defendant's base offense level for conviction nos. 1 and 2, concluding those were prior sentences in unrelated cases and therefore should be counted separately. This resulted in a base offense level of 14, coupled with thirteen criminal history points, which placed defendant in a criminal history category of VI. Defendant's sentence of forty-six months was at the top of the applicable range.
5
Section 4A1.2(a)(2) states the method for counting prior sentences when computing criminal history. A prior sentence includes one previously imposed upon guilty pleas such as those in conviction nos. 1 and 2. Subsection (a)(2) requires sentences in unrelated cases to be counted separately. The district court determined that defendant's conviction nos. 1 and 2 were unrelated cases and therefore should each be counted toward his criminal history category. U.S.S.G. 4A1.1, 4A1.2(a)(2).
6
Section 4A1.2(k) and Application Note 11 address resentencing after revocation of probationary or conditional sentences for purposes of calculating criminal history points. Those provisions explicitly provide that an original sentence and resentence following revocation should be treated as a single conviction, allowing a maximum of three points for that conviction. The second paragraph of Note 11 explains how to aggregate a sentence imposed upon revocation of multiple sentences when the sentencing court has not designated to which revoked sentence the resentence applies. The example given in the note illustrates a situation in which the sentencing court imposes a single term of imprisonment upon revocation of multiple unrelated sentences. Under these facts, the sentence upon revocation is to be combined with what would have been the longer of the probationary sentences so as to maximize the assigned criminal history points.
7
The facts in the case before us are somewhat different because the sentencing court imposed separate sentences upon revocation of defendant's probation for both conviction nos. 1 and 2. The sentencing court treated the convictions as separate and unrelated but evidently handled these matters in a single resentencing hearing for reasons of judicial efficiency. We have previously held that "requiring separate proceedings to revoke probation and resentence the defendant for each offense is not necessary to preserve the status of his prior convictions as 'unrelated cases.' " United States v. Jones, 898 F.2d 1461, 1464 (10th Cir.), cert. denied, 498 U.S. 838 (1990). We do not understand the guidelines to contemplate that the impact of multiple unrelated prior convictions be reduced because the district court conducts resentencing in a single hearing. Here defendant's two probationary sentences were individually revoked and he was resentenced separately as to both. In that circumstance each conviction should be counted to enhance defendant's criminal history category pursuant to 4A1.1(A).
8
AFFIRMED.
1
This order and judgment has no precedential value and shall not be cited, or used by any court within the Tenth Circuit, except for purposes of establishing the doctrine of the law of the case, res judicata, or collateral estoppel. 10th Cir. R. 36.3
2
The Honorable Wilfred Feinberg, Senior United States Circuit Judge, United States Court of Appeals for the Second Circuit, sitting by designation
3
The record does not indicate the factual basis for the probation revocations of June 1988 or the circumstances which led to defendant's release before serving the consecutive sentences on conviction nos. 1 and 2
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826 F.2d 13
U.S.v.Thibaudeau***
NO. 86-5951
United States Court of Appeals,Eleventh Circuit.
JUL 27, 1987
1
Appeal From: S.D.Fla.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 23
**
Local Rule: 36 case
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Case: 16-17615 Date Filed: 10/23/2017 Page: 1 of 5
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-17615
Non-Argument Calendar
________________________
D.C. Docket No. 1:16-cv-00494-WKW-GMB
JAMES BRYSON GRAHAM,
Plaintiff-Appellant,
versus
WELLS FARGO BANK, N.A.,
JOHN G. STUMP,
Chairman & CEO WFB,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Alabama
________________________
(October 23, 2017)
Case: 16-17615 Date Filed: 10/23/2017 Page: 2 of 5
Before MARTIN, JORDAN, and ROSENBAUM, Circuit Judges.
PER CURIAM:
James Bryson Graham, proceeding pro se, appeals the dismissal of his
complaint brought under the Truth in Lending Act (“TILA”) for failure to state a
claim upon which relief can be granted. Graham contends that the district court
erred in dismissing his complaint because he raised a plausible claim under TILA.
After careful review, we affirm.
I.
In the late 1990s, Graham executed a number of promissory notes in favor of
SouthTrust Bank, Wells Fargo’s predecessor in interest. In 2000, after Graham
defaulted on one of these notes, SouthTrust Bank used funds from a money market
account that Graham also had with SouthTrust to offset that debt. Graham has
since filed a number of actions alleging fraud, conversion, due process violations,
and that Wells Fargo was required to surrender the original loan documents. All of
these actions were dismissed.
In May 2016, Graham sent Wells Fargo a letter seeking to rescind his
original promissory notes. He also requested the return of his “paid-in-full
original, unaltered and verified debt instruments” within twenty days. In June
2016, Graham filed suit in the United States District Court for the Middle District
of Alabama seeking return of his original loan documents and damages. He based
2
Case: 16-17615 Date Filed: 10/23/2017 Page: 3 of 5
his claim on the TILA, Generally Accepted Accounting Principles (“GAAP”), and
Supreme Court precedent. Graham’s case was referred to a magistrate judge, who
recommended it be dismissed with prejudice for failure to state a claim. The
magistrate judge found both that the TILA did not require Wells Fargo to return
Graham’s original note, and that Graham’s claim was time barred. The district
court dismissed Graham’s claim, adopting the recommendation of the magistrate
judge in full.
II.
We review de novo dismissals of actions for failure to state a claim upon
which relief can be granted, accepting the factual allegations in the complaint as
true. Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288 (11th Cir. 2010). In
addition, we construe pro se complaints liberally. Alba v. Montford, 517 F.3d
1249, 1252 (11th Cir. 2008).
The TILA requires creditors to provide consumers with “clear and accurate
disclosures of terms dealing with things like finance charges, annual percentage
rates of interest, and the borrower’s rights.” Beach v. Ocwen Fed. Bank, 523 U.S.
410, 412, 118 S. Ct. 1408, 1410 (1998); see also 15 U.S.C. §§ 1631, 1632, 1635,
1638. If a creditor does not make the required disclosures, a borrower may sue for
damages or rescission of the loan. See Beach 523 U.S. at 412, 118 S. Ct. at 1410.
The TILA contains two separate limitations periods for filing actions. For claims
3
Case: 16-17615 Date Filed: 10/23/2017 Page: 4 of 5
seeking damages, actions must be brought within one year of the purported TILA
violation. 15 U.S.C. § 1640(e). For claims seeking rescission of a loan, actions
must be brought within three years of the date of closing. Id. § 1635(f); Beach,
523 U.S. at 411–12, 118 S. Ct. at 1409.
The district court properly dismissed Graham’s complaint because his action
was untimely. While Graham is correct that Jesinoski v. Countrywide Home
Loans, Inc., 574 U.S. ___, 135 S. Ct. 790 (2015), recognized a right of rescission
under the TILA, it also recognized that that right must be exercised “within three
years after the transaction is consummated.” Id. at 792. The loan instruments
challenged in this case were executed in the late 1990s. Wells Fargo’s predecessor
in interest, SouthTrust Bank, satisfied Graham’s indebtedness with funds from his
money market account in 2000. But Graham did not send a letter seeking
rescission until 2016. As the transactions that are the subject of this suit happened
over fifteen years ago, both the one-year limitations period for damages actions
and the three-year limitations period for rescission actions have passed. 15 U.S.C.
§§ 1635(f), 1640(e). Graham does not argue that there is any basis for tolling the
TILA statute of limitations, but instead argues that no statute of limitations should
apply to his action. He relies on a discussion of Alabama quiet title actions. But
Graham asserts a claim under the TILA, not an Alabama quiet title action. Thus,
Graham’s complaint is time-barred.
4
Case: 16-17615 Date Filed: 10/23/2017 Page: 5 of 5
Liberally construed, Graham’s appeal may also be read to raise claims based
on GAAP and the Due Process Clause of the U.S. Constitution. To the extent that
these claims were raised in the district court, the district court did not err in
dismissing them for failure to state a claim upon which relief can be granted.
GAAP principles have no legal force standing alone. Cf. Ziemba v. Cascade Int’l,
Inc., 256 F.3d 1194, 1208 (11th Cir. 2001). And private parties, including the
defendants in this case, cannot be sued for violations of the Due Process Clause.
See Jackson v. Metro. Edison Co., 419 U.S. 345, 349, 95 S. Ct. 449, 453 (1974).
To the extent Graham raises these claims for the first time on appeal, they are
waived. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1331 (11th Cir.
2004).
We affirm the district court’s dismissal of Graham’s action.
AFFIRMED.
5
| {
"pile_set_name": "FreeLaw"
} |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
CALLEN WILLIS, )
)
Plaintiff, )
)
v. ) No. 17-cv-1959 (KBJ)
)
FEDERAL BUREAU OF )
INVESTIGATION, )
)
Defendant. )
)
MEMORANDUM OPINION
Plaintiff Callen Willis believes that “she may have been misrepresented as
having been affiliated with and/or having been under contract with the United States
government minimally during 2014 and 2015” (Compl., ECF No. 1, ¶ 3) and that the
Federal Bureau of Investigation (“FBI”) has both “information pertaining to” this
misrepresentation and “information specific to circumstances in which [she] was
previously involved” (id. ¶ 5). In 2016 and 2017, Willis submitted a series of requests
to the FBI under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, and the
Privacy Act, 5 U.S.C. § 552a, seeking records regarding herself, copies of prior
FOIA/Privacy Act requests the FBI had received regarding her, and also the FBI’s
responses to any such requests. (See Decl. of David M. Hardy (“Hardy Decl.”), ECF
No. 15-1, ¶¶ 5–7, 9, 11–13, 18, 25, 29.) The FBI conducted searches, and while it did
not locate any records responsive to Willis’s requests seeking information about herself
(see id. ¶¶ 40–41), it did locate and produce to Willis a total of 116 pages of records
relating to FOIA/Privacy Act requests that she had previously submitted to the agency
(see id. ¶ 28). The agency’s sole withholding (for which it invoked Exemption 6) was
its redaction of the name of one FBI employee on one page. (See id. ¶ 28 n.4).
Before the Court at present is the FBI’s motion for summary judgment, in which
it argues that it has conducted reasonable and adequate searches for records responsive
to Willis’s various requests, and that its one Exemption 6 redaction was proper. (See
Def.’s Mot. for Summ. J. (“Def.’s Mot.”), ECF No. 15, at 12–16.) 1 Willis has filed an
opposition to the FBI’s motion in which she maintains that she “is entitled to the release
of information via FOIA pursuant to the Freedom of Information Act 5 U.S.C. § 552 in
the form of a Vaughn Index.” (Mot. Opposing Summ. J. (“Pl.’s Opp’n”), ECF No. 17, at
1.) Willis has also filed a separate one-paragraph motion asking this Court to compel
the FBI to prepare a such an index. (See Mot. to Compel Preparation of a Vaughn Index
(“Mot. to Compel”), ECF No. 18, at 1.)
On March 29, 2019, this Court issued an order that GRANTED the FBI’s motion
for summary judgment and DENIED Willis’s motion seeking to compel preparation of
a Vaughn index. This Memorandum Opinion explains the reasons for that Order. In
sum, this Court finds that the FBI a conducted a reasonable and adequate search for
records responsive to Willis’s requests, and that the FBI has sufficiently described the
reasons underlying its one redaction in the declaration that it submitted in support of its
motion for summary judgment, such that a Vaughn index is not needed.
1
Page numbers cited herein refer to those that the Court’s electronic case-filing system automatically
assigns.
2
I. BACKGROUND
A. The FBI's Electronic Databases
The FBI has historically housed its agency records, including “applicant,
investigative, intelligence, personnel, administrative, and general files compiled and
maintained by the FBI” in a system known as the Central Records System (“CRS”).
(Hardy Decl. ¶ 32.) The FBI began using Sentinel, its next generation case management
system, on July 1, 2012, and since date, “all FBI generated records are created
electronically in case files via Sentinel[.]” (Id. ¶ 38.) Both the CRS and Sentinel are
indexed, and when the FBI receives a request for records under the FOIA or the Privacy
Act, it “employs an index search methodology” to locate responsive material. (Id.
¶ 39.)
To search the CRS, the FBI uses an automated index application, within which
an individual’s name may be linked to “identifying information such as date of birth,
race, sex, locality, Social Security Number, address, and/or date of an event.” (Id.
¶ 37.) In addition, if a records request seeks documents that may have been generated
on or after July 1, 2012, the FBI might also perform a separate Sentinel index search.
(See id.) See also Hedrick v. Fed. Bureau of Investigation, 216 F. Supp. 3d 84, 87–88
(D.D.C. 2016) (describing in detail the FBI’s records systems and its search
procedures).
B. Willis’s Requests
1. FOIPA Request No. 1347366-000
By facsimile dated March 23, 2016, Willis submitted a FOIA/PA request to the
FBI for “copies of all files, correspondence and other records concerning myself
3
[Callen Willis].” (Ex. A to Hardy Decl., ECF No. 15-2, at 2.) 2 On March 28, 2016,
Willis sent the FBI an email message asking that “any FOIPA response be mailed to her
home address via certified mail.” (Hardy Decl. ¶ 8; see id., Ex. D.) The FBI assigned
Willis’s request for records Request Number 1347366-000, and responded to the request
on March 31, 2016, stating that “a search of the FBI’s Central Records System failed to
locate any main file records responsive to her request.” (Hardy Decl. ¶ 14.) In
addition, “[t]he FBI advised [Willis that] if she had additional information to provide
showing she was of investigative interest to the FBI, the FBI would conduct an
additional search.” (Id.)
Willis appealed the FBI’s response, and on June 6, 2016, DOJ’s Office of
Information Policy affirmed the FBI’s determination. (See id. ¶¶ 15–17.)
2. FOIPA Request No. 1347366-001
On May 4, 2016, Willis sent a letter to the FBI (with extensive attachments)
explaining why she believed she was of investigative interest to the agency; reiterating
her interest in receiving records about herself; and seeking expedited processing. (Ex.
M. to Hardy Decl., ECF No. 15-2, at 51–105.) The FBI assigned the matter Request
Number 13747366-001 (see Hardy Decl. ¶ 22), and on June 3, 2016, it sent Willis a
letter informing her that it had conducted an additional search based on the information
provided in her letter, but still did not locate any responsive records in its main files
(see id. ¶ 22). Willis did not appeal the FBI’s no-records response. (See id. ¶ 22 n.2.)
2
Instead of sending just one copy of this document request, Willis submitted a total of six duplicate or
near-duplicate requests to the FBI concerning these same records, four of which sought expedited
processing. (See Hardy Decl. ¶¶ 6–7, 9, 11-3.) For the purpose of this Memorandum Opinion, the
Court has treated the six requests as one.
4
3. FOIPA Request Nos. 1380975-000 and 1380990-000
Willis sent another letter to the FBI on July 26, 2017, in which she sought two
additional categories of information. First, she requested copies of her two prior
FOIA/Privacy Act requests from 2016, along with any other FOIA/Privacy Act
“requests submitted on my, Callen Willis’s behalf by any individual other than myself,
Callen Willis,” and she also sought the FBI’s responses to those requests. (See Hardy
Decl. ¶¶ 25.) The FBI assigned Request No. 1380975-000 to this first aspect of Willis’s
request (see id. ¶ 26), and on January 31, 2018, it released 116 pages of responsive
records, after having redacted the name of an FBI employee on one page pursuant to
Exemption 6 (see id. ¶ 28; id ¶ 28 n.4).
The second part of Willis’ request of July 26, 2017 (to which the FBI assigned
Request No. 1380990-000), sought records pertaining to four events in Willis’s life
about which she believed the FBI had information: (1) her employment at Columbia
University’s Irving Cancer Research Center from 2014–2015; (2) the MCAT exam she
took in Halifax, Nova Scotia, in January 2015; (3) her hospitalization at Lennox Hill
Hospital in January 2015; and (4) her FOIA lawsuit against the Central Intelligence
Agency. (See id. ¶ 29.) 3 On July 31, 2017, the FBI sent Willis a letter advising her that
it had conducted “a search of the [Central Records System] . . . and no responsive
records were located[.]” (Id. ¶ 31.) Willis did not appeal this no-records response.
(See id. ¶ 31 n.6.)
3
Willis submitted “a near duplicate” of this request by letter dated July 27, 2017. (See Hardy Decl.
¶ 30.)
5
C. Procedural History
Willis filed the instant complaint on October 24, 2017; her pleading is 32 pages
in length, to which she has attached 337 pages of exhibits, and it contains one FOIA and
Privacy Act claim. (See Compl.) Willis maintains that she “has been the subject of
death threats and other abusive tactics since 2015” (id. ¶ 4), and that she “has
experienced a vast array of electronic errors from 2015-present too numerous to seem
coincidental” (id. ¶ 7). 4 Willis believes that these electronic errors “suggest[] that [the
FBI] has information specific” to her (id.); and in particular that she might have been
“misrepresented as having been affiliated with and/or having been under contract with
the United States government minimally during 2014 and 2015” (id. ¶ 3).
Significantly for present purposes, Willis’s complaint maintains that the FBI’s
responses to her various records requests violate the FOIA, and that “the possibility
exists the FBI has prohibited [her] from exercising her right [under the Privacy Act] to
inspect records that may exist in order to correct records that are potentially inaccurate
or irrelevant.” (Id. ¶ 14(a).) As relief, Willis asks this Court to order the FBI “to make
the requested information promptly available” to her (id. ¶ 17(a)), and to order the
agency to search all its systems of records for all information pertaining to her,
including “any and all surveillance of the plaintiff over the course of her lifetime[.]”
(Id. ¶ 17(b).) 5 For any records that the agency withholds or redacts, Willis also
4
According to the complaint, these “electronic errors” include, inter alia, problems contacting Apple
customer service regarding her iPhone (Compl. ¶ 7(a)); issues with files in her computer (id. ¶ 7(b));
unknown activity on her Gmail account (id. ¶ 7(c)); discrepancies in her medical records (id. ¶ 7(e));
errors in her cell phone call logs (id. ¶ 7(h); issues with her health insurance electronic statements (id.
¶ 7(q)); and problems with electronic payments to a hospital (id. ¶ 7(r)).
5
There appears to be a typographical error in Willis’s complaint, as she references the “National
Security Agency,” rather than the FBI, in this paragraph.
6
requests that the agency be ordered to provide her with a Vaughn index. (See id.,
¶ 17(c).)
On May 29, 2018, the FBI filed a motion for summary judgment and attached to
it a declaration from David M. Hardy, an FBI employee who oversees the agency’s
Records Management Office. (See Def.’s Mot.; Hardy Decl. at 1) In its motion, the
FBI argues that it is entitled to summary judgment because the agency conducted
adequate searches for records responsive to Willis’s various FOIA requests (see Def.’s
Mot. at 12–14) and properly redacted the name of one FBI employee from one page of
responsive records based on FOIA Exemption 6 (see id. at 14–16). This Court
thereafter issued an Order advising Willis of her obligation to respond to the agency’s
motion under the Federal Rules of Civil Procedure and the Local Civil Rules of this
Court. (See Order, ECF No. 16 (explaining to Willis that if she failed to file an
opposition to the FBI’s motion, the Court could accept as undisputed the FBI’s
statement of facts).)
Willis filed an opposition to the FBI’s summary judgment motion on August 1,
2018. (See Pl.’s Opp’n.) In this filing, Willis’s sole argument is that she is entitled to a
Vaughn index. (See id. at 1 (“This is a motion opposing summary judgment as the
Plaintiff (self, non-attorney) is entitled to the release of information via FOIA . . . in the
form of a Vaughn Index.”) 6 Willis also filed a separate one-paragraph motion asking
this Court to require the FBI to produce a Vaughn index for every record it is
withholding as exempt. (See Mot. to Compel at 1.) The FBI subsequently filed an
6
Willis submitted to this Court another copy of this document (see ECF No. 21), and pasted the
substance of this document into another filing (see ECF No. 22).
7
opposition to Willis’s Vaughn index motion (and a reply in support of its summary
judgment motion), in which it argues that Hardy’s declaration sufficiently describes the
information the FBI has withheld, such that a separate index is not necessary. (See
Reply in Supp. of Def.’s Mot., ECF No. 19, at 1–2.)
II. LEGAL STANDARDS
A. The FOIA And The Privacy Act
The FOIA “was enacted to facilitate public access to Government documents” in
order to “pierce the veil of administrative secrecy and to open agency action to the light
of public scrutiny.” Dep’t of State v. Ray, 502 U.S. 164, 173 (1991) (internal quotation
marks and citation omitted). The FOIA requires that “each agency, upon any request
for records which (i) reasonably describes such records and (ii) is made in accordance
with published rules stating the time, place, fees (if any), and procedures to be
followed, shall make the records promptly available to any person.” 5 U.S.C.
§ 552(a)(3)(A). The Court may enjoin a government agency from improperly
withholding records in its possession or under its control at the time it receives a FOIA
request. See 5 U.S.C. § 552(a)(4)(B). However, if “an agency does not possess or
control the records a requester seeks, the agency’s non-disclosure does not violate
FOIA because it has not ‘withheld’ anything.” DiBacco v. U.S. Army, 795 F.3d 178,
192 (D.C. Cir. 2015) (citing Kissinger, 445 U.S. at 150).
“The FOIA also contains nine exemptions—i.e., specified circumstances under
which disclosure is not required.” Neuman v. United States, 70 F. Supp. 3d 416, 420–
21 (D.D.C. 2014) (citing 5 U.S.C. § 552(b)). These exemptions must be construed
narrowly, see Dep’t of the Air Force v. Rose, 425 U.S. 352, 361 (1976), and the
8
government bears the burden of demonstrating that any withheld information falls
within any claimed exemptions, see Maydak v. Dep’t of Justice, 218 F.3d 760, 764
(D.C. Cir. 2000). FOIA Exemption 6, which protects “personnel and medical files and
similar files the disclosure of which would constitute a clearly unwarranted invasion of
personal privacy[,]” 5 U.S.C. § 552(b)(6), is at issue in this case.
In addition, Willis alleges a Privacy Act violation. “The Privacy Act governs
federal agencies’ acquisition, maintenance, use, and disclosure of information
concerning individuals.” Jones v. Exec. Office of the President, 167 F. Supp. 2d 10, 13
(D.D.C. 2001). “The Privacy Act provides an individual with access to government
records that pertain to her which are contained in a system of records and allows the
individual to review and have a copy made of all or any portion of the records.”
Augustus v. McHugh, 825 F. Supp. 2d 245, 255 (D.D.C. 2011) (citing 5 U.S.C.
§ 552a(d)).
B. Summary Judgment In The Privacy Act And FOIA Context
Disputes arising from an agency’s response to a request for records under either
the FOIA or the Privacy Act “typically and appropriately are decided on motions for
summary judgment.” Judicial Watch, 25 F. Supp. 3d at 136 (quoting Defs. of Wildlife
v. U.S. Border Patrol, 623 F. Supp. 2d 83, 87 (D.D.C. 2009)). Under Rule 56 of the
Federal Rules of Civil Procedure, a court must grant summary judgment if the
pleadings, disclosure materials on file, and affidavits “show[] that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a); see Judicial Watch, 25 F. Supp. 3d at 136 (citing Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986)). In the FOIA/Privacy Act context, a
district court conducts a de novo review of the record, and the responding federal
9
agency bears the burden of proving that it has complied with its obligations under the
FOIA and the Privacy Act. See In Def. of Animals v. Nat’l Insts. of Health, 543 F.
Supp. 2d 83, 92–93 (D.D.C. 2008). Because the court must analyze all underlying facts
and inferences in the light most favorable to the requester, see Willis v. Dep’t of Justice,
581 F. Supp. 2d 57, 65 (D.D.C. 2008), it is appropriate to enter summary judgment for
an agency only if “the agency proves that it has fully discharged its obligations[,]”
Moore v. Aspin, 916 F. Supp. 32, 35 (D.D.C. 1996); see also Winston & Strawn, LLP v.
McLean, 843 F.3d 503, 508 (D.C. Cir. 2016) (finding that “a motion for summary
judgment cannot be deemed ‘conceded’ for want of opposition”).
“An agency seeking summary judgment in a case challenging its response to a
request for records, whether that request is made under the Privacy Act or FOIA, must
show that it conducted ‘a search reasonably calculated to uncover all relevant
documents, and, if challenged, must demonstrate beyond material doubt that the search
was reasonable.’” Williams v. Fanning, 63 F. Supp. 3d 88, 93 (D.D.C. 2014) (quoting
Truitt v. Dep’t of State, 897 F.2d 540, 542 (D.C. Cir. 1990)). A court may grant
summary judgment to the agency based on information provided in “a reasonably
detailed affidavit, setting forth the search terms and the type of search performed, and
averring that all files likely to contain responsive materials (if such records exist) were
searched.” Valencia–Lucena v. U.S. Coast Guard, 180 F.3d 321, 326 (D.C. Cir. 1999)
(internal quotation marks, citation, and alteration omitted); see also Campbell v. U.S.
Dep’t of Justice, 164 F.3d 20, 27 (D.C. Cir. 1999) (highlighting the “reasonableness”
standard). Such agency affidavits attesting to a reasonable search “are afforded a
presumption of good faith[,]” and “can be rebutted only ‘with evidence that the
10
agency’s search was not made in good faith.’” Defs. of Wildlife v. U.S. Dep’t of
Interior, 314 F. Supp. 2d 1, 8 (D.D.C. 2004) (quoting Trans Union LLC v. FTC, 141 F.
Supp. 2d 62, 69 (D.D.C. 2001)).
C. Application Of The Governing Legal Standards To Pro Se Parties
When evaluating the FBI’s motion for summary judgment and Willis’s motion to
compel, this Court must be mindful of the fact that Willis is proceeding in this matter
pro se. It is clear beyond cavil that the pleadings of pro se parties are to be “liberally
construed,” and that “a pro se complaint, however inartfully pleaded, must be held to
less stringent standards than formal pleadings drafted by lawyers[.]” Erickson v.
Pardus, 551 U.S. 89, 94 (2007) (per curiam) (internal quotation marks and citations
omitted); see also Haines v. Kerner, 404 U.S. 519, 520–21 (1972) (per curiam).
However, it is equally clear that “[t]his benefit is not . . . a license to ignore the Federal
Rules of Civil Procedure.” Sturdza v. United Arab Emirates, 658 F. Supp. 2d 135, 137
(D.D.C. 2009); see also McNeil v. United States, 508 U.S. 106, 113 (1993).
This means that a pro se “complaint must still present a claim on which the Court
can grant relief.” Budik v. Dartmouth-Hitchcock Med. Ctr., 937 F. Supp. 2d 5, 11
(D.D.C. 2013) (internal quotation marks and citation omitted). Likewise, when faced
with a motion for summary judgment, a pro se plaintiff, just like a represented party,
must comply with a court’s rules regarding responses to statements of material fact and
the need to identify record evidence that establishes each element of his claim for relief.
See Grimes v. Dist. of Columbia, 794 F.3d 83, 94 (D.C. Cir. 2015) (“Because Grimes is
the plaintiff and so bears the burden of proof of her claims, it is well established that
she cannot rely on the allegations of her own complaint in response to a summary
judgment motion, but must substantiate them with evidence.”).
11
III. ANALYSIS
Willis has not disputed the FBI’s Statement of Undisputed Facts or the assertions
made in Hardy’s declaration, nor has she made any substantive arguments in response
to the FBI’s motion for summary judgment. (See Sec. I.C, supra.) As such, this Court
accepts as true the unrebutted facts contained in Hardy’s declaration and the FBI’s
statement of material facts regarding the agency’s responses to Willis’s records
requests. See Jackson v. Finnegan, Henderson, Farabow, Garrett & Dunner, 101 F.3d
145, 154 (D.C. Cir. 1996) (noting that where a responding party does not file a
statement of material facts in dispute, “the district court is to deem as admitted the
moving party’s facts”). Consistent with D.C. Circuit precedent, this Court has
proceeded further to analyze whether or not the FBI is entitled to summary judgment
based on these undisputed facts and the governing law, see Winston & Strawn, 843 F.3d
at 508. For the reasons explained below, this Court has concluded that the FBI has
established that it conducted a reasonable search for responsive records, and that the
agency properly invoked FOIA Exemption 6 to redact the name of one FBI employee.
Therefore, the FBI is entitled to summary judgment.
A. The FBI Conducted Adequate Searches For Records Responsive To
Willis’s Requests
Based on Hardy’s uncontested descriptions of the searches that the FBI
conducted in response to Willis’s various requests for records, this Court easily finds
that the agency’s searches were adequate—even those that revealed no responsive
records. “[T]he only issue that arises when evaluating the adequacy of a FOIA search is
whether the agency used appropriate methods to carry out the search, regardless of the
results of that search.” Hedrick, 216 F. Supp. 3d at 93 (emphasis in original). And, as
12
explained above, Hardy’s declaration lays out a detailed description of the types of
records maintained in its record systems and the manner in which the FBI organizes and
retrieves records from these systems. (See Hardy Decl. ¶¶ 32–38.)
Hardy specifically states that “the CRS is where the FBI indexes information
about individuals,” and that the “CRS is the only record system where records about
[Willis] would likely be maintained[.]” (Id. at ¶ 42.) Hardy further explains that, to
identify any responsive records, FBI staff conducted CRS searches for records
responsive to Willis’s four FOIA requests using a three-way phonetic breakdown of her
full name as search terms, along with personal information, such as her date of birth,
social security number, passport number, and address. (See id. ¶¶ 40–41.) These
searches yielded no records responsive to Request Nos. 1347366-000, 1347366-001,
and 1380990-000 (Willis’s requests for general information about herself). (Id. ¶ 40.)
The FBI then confirmed these no-records results when it conducted additional searches
after receiving notice of this lawsuit. (Id. ¶ 41.) With respect to Request No. 1380975-
000 (Willis’s request for prior FOIA requests/responses about her), the FBI located and
produced 116 pages of responsive records, which Hardy described as “copies of
correspondence to and from the FBI and Plaintiff for her 2016 FOIPA request[s].” (Id.
¶ 43.)
“[T]he touchstone when evaluating the adequacy of an agency’s search for
records in response to a FOIA request is reasonableness, and in particular, whether the
agency made ‘a good faith effort to conduct a search for the requested records, using
methods which can be reasonably expected to produce the information requested.’”
Muckrock, LLC v. CIA, 300 F. Supp. 3d 108, 125 (D.D.C. 2018) (quoting Oglesby v.
13
U.S. Dep’t of Army, 920 F.2d 57, 68 (D.C. Cir. 1990)); see also Physicians for Human
Rights v. U.S. Dep’ t of Def., 675 F. Supp. 2d 149, 164 (D.D.C. 2009) (noting that, “as
long as this standard is met, a court need not quibble over every perceived inadequacy
in an agency’s response, however slight”). Willis makes no argument that the FBI’s
search was unreasonable, and she presents no evidence that the agency acted in bad
faith; rather, she merely asserts an entitlement to the release of the information she
requested. (See generally Pl.’s Opp’n at 1–2.) This is patently insufficient to overcome
the presumption of good faith that this Court must afford to the FBI’s declaration. See,
e.g., Judicial Watch, 25 F. Supp. 3d at 137; Defs. of Wildlife, 314 F. Supp. 2d at 8.
As such, and given the various steps that the FBI’s declarant avers that the
agency undertook to search for records in response to Willis’s requests, this Court
concludes that FBI’s searches of its records systems using variations of Willis’s name
and identifying information about her were reasonably calculated to locate any
information responsive to her four requests, see Hedrick v. FBI, 216 F. Supp. 3d at 93–
94; Lardner v. FBI, 852 F. Supp. 2d 127, 134–35 (D.D.C. 2012), and that the agency is
therefore entitled to summary judgment with respect to the adequacy of its searches for
responsive records.
B. The FBI Properly Relied On FOIA Exemption 6 To Redact The Name
Of An FBI Employee Based On Personal Privacy Interests
In his declaration, Hardy states that the FBI has invoked FOIA Exemption 6 to
redact the name of an FBI employee from one page of the 116 pages that the agency
released to Willis in response to her request for records pertaining to FOIA requests
about her. (See id. ¶¶ 28 n.4, 43–44.) This page “is an email exchange dated May 19,
14
2016 from Plaintiff, informing the FBI Plaintiff was submitting an appeal of the FBI’s
decision not to expedite processing of her May 4, 2017 FOIPA request[.]” (Id. ¶ 44.)
“In determining whether an otherwise responsive record qualifies for the
protections of Exemption 6, a court must first determine that the record fits into one of
the relevant categories—i.e., ‘personnel,’ ‘medical,’ or ‘similar files.’” Judicial Watch,
Inc. v. Dep’t of the Navy, 25 F. Supp. 3d at 137–38. It is well established that a
redacted name falls into the “similar files” category of Exemption 6, because the
Supreme Court has broadly interpreted that phrase “to include all information that
applies to a particular individual[,]” Lepelletier v. FDIC, 164 F.3d 37, 46 (D.C. Cir.
1999), regardless of “the nature of the file in which the requested information is
contained[,]” U.S. Dep’t of State v. Wash. Post Co., 456 U.S. 595, 601 (1982). This
expansive interpretation “has led courts to conclude that Exemption 6 protection not
only relates to entire physical files, but also encompasses bits of personal information
that refer to a particular individual[,]” Judicial Watch, 25 F. Supp. 3d at 142 (internal
quotation marks and citation omitted), including “such items as a person’s name,”
Lewis v. DOJ, 867 F. Supp. 2d 1, 17 (D.D.C. 2011) (citation omitted).
If the record-categorization threshold question is satisfied, the court then looks
to “whether disclosure of that document ‘would compromise a substantial, as opposed
to a de minimis, privacy interest.’” Judicial Watch, 25 F. Supp. 3d at 138 (quoting
Nat’l Ass’n of Retired Fed. Emps. v. Horner, 879 F.2d 873, 874 (D.C. Cir. 1989)).
“And finally, if the defendant successfully identifies a substantial privacy interest, the
court applies a balancing test that weighs the privacy interest in withholding the record
against the public’s interest in the record’s disclosure.” Id. (citations omitted).
15
In the instant case, Hardy’s declaration explains that the redaction pertains to the
name of an FBI employee, which qualifies as a “similar file” for the reasons just
explained, and that release of this information would implicate substantial privacy
interests. For example, according to Hardy, release “would connect this FBI support
personnel with the Plaintiff’s enquiry, possibly exposing him/her to additional
harassing inquiries regarding the FBI’s determinations, and searches.” (Hardy Decl.
¶ 47.) In addition, release of the employee’s name “would allow other FOIPA
requesters, members of the public, members of the press, and/or criminals to directly
email other requests and inquiries for information not related to this exchange . . . ,
thereby, interfering with this . . . employee’s abilities to conduct [his or her] daily
duties.” (Id.) Lastly, Hardy states that disclosure of this name does not serve any
public interest. (Id. (asserting that “[r]eleasing the identity of this FBI employee would
not significantly increase the public’s understanding of the FBI’s operations and
activities, including the process by which the FBI decided how to respond to [Willis’s]
specific inquiry”).)
Willis has not challenged any of these assertions. (See Pl.’s Opp’n at 1–2.)
Moreover, this Court agrees that the privacy interest here is substantial, and that the
public interest in release of this single name is minimal, because it “reveals little or
nothing about an agency’s own conduct” and “does not further the [FOIA’s] statutory
purpose.” Beck v. Dep’t of Justice, 997 F.2d 1489, 1492 (D.C. Cir. 1993) (internal
quotation marks and citation omitted). Thus, the Court concludes that the FBI did not
violate the FOIA when it invoked Exemption 6 to withhold this employee’s name.
16
C. The FBI Has Demonstrated That It Has Released All Reasonably
Segregable Information
“It has long been a rule in this Circuit that non-exempt portions of a document
must be disclosed unless they are inextricably intertwined with exempt portions.” Mead
Data Central, 566 F.2d 242, 260 (D.C. Cir. 1977); see also 5 U.S.C. § 552(b). Hardy
identifies a single piece of information that the agency has withheld on the grounds that
it is exempt from disclosure—the name of one FBI employee—and he further states that
all other information responsive to Willis’s records requests was provided to her. (See
Hardy Decl. ¶ 43.) Under these circumstances, the Court must conclude that the FBI
has demonstrated that it has satisfied its duty to release to Willis all reasonably
segregable, non-exempt information.
D. Willis’s Request For A Vaughn Index Is Moot Because The FBI’s
Declaration Provides Sufficient Information Regarding The One Piece
Of Information That The Agency Withheld
Finally, the Court must deny Willis’s request that it compel the FBI “to provide
an itemized, indexed inventory of every agency record or portion thereof in response to
Plaintiff’s request which Defendant asserts to be exempt from disclosure, accompanied
by a detailed justification statement covering each refusal to release records or portions
thereof in accordance with the indexing requirements of Vaughn v. Rosen.” (Pl.’s Mot.
to Compel at 1.) It is true, as general matter, that if an agency withholds information
under a FOIA exemption, the agency must provide “a detailed description of the
information withheld through the submission of a so-called ‘Vaughn Index,’ sufficiently
detailed affidavits or declarations, or both.” Defs. of Wildlife v. U.S. Border Patrol,
623 F. Supp. 2d at 88 (citations omitted). But, here, the agency has not withheld any
responsive records, and has only redacted a single piece of information (an employee’s
17
name). Hardy’s declaration not only identifies the withheld material, but also provides
a cogent explanation as to why disclosure of that piece of information would constitute
a clearly unwarranted invasion of that employee’s personal privacy. (See Hardy Decl.
¶¶ 28 n.4, 43-45.) Thus, the declaration accomplishes the purposes of a Vaughn index,
and thereby obviates any need for such an additional filing. See Keys v. U.S. Dep’t of
Justice, 830 F.2d 337, 349 (D.C. Cir. 1987) (explaining that “it is the function, not the
form, of the [Vaughn] index that is important”).
IV. CONCLUSION
Based on the FBI’s summary judgment motion and its uncontested declaration,
this Court concludes that the agency conducted reasonable searches for records
responsive to Willis’s requests, properly invoked Exemption 6 to withhold one piece of
information, and otherwise released to Willis all reasonably segregable, responsive
information. Accordingly, as stated in the Order issued on March 29, 2019, the FBI’s
motion for summary judgment has been GRANTED, and Willis’s motion to compel a
Vaughn index has been DENIED. That Order is now a final, appealable order.
DATE: May 16, 2019 Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge
18
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817 P.2d 472 (1991)
James D. HESTER, Appellant,
v.
STATE of Alaska, PUBLIC EMPLOYEES' RETIREMENT BOARD, Appellee.
No. S-3559.
Supreme Court of Alaska.
September 6, 1991.
*473 Chancy Croft, Anchorage, for appellant.
Virginia B. Ragle, Asst. Atty. Gen. and Douglas B. Baily, Atty. Gen., Juneau, for appellee.
Before RABINOWITZ, C.J., and BURKE, MATTHEWS, COMPTON and MOORE, JJ.
OPINION
COMPTON, Justice.
James D. Hester appeals the denial of his claim for occupational disability benefits under the Public Employees' Retirement System (PERS). Hester served as the chief of police in Skagway and then in North Pole, Alaska. He resigned in 1985 as a result of the disabling symptoms of Crohn's disease, a chronic inflammatory bowel ailment, from which he suffers. In his application for occupational disability benefits, Hester did not claim that his work caused the disease. Instead, he claimed that the stress of his job caused the disabling flare-ups of the disease. According to Hester, but for his job he would have been able to manage the effects of his Crohn's disease. The superior court upheld the Public Employees' Retirement Board's denial of occupational benefits. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Hester was first diagnosed as having Crohn's disease in 1968 when he was working as a police officer in San Gabriel, California. He experienced severe abdominal cramps and fever, but these symptoms subsided after a brief period of treatment with steroids. Hester remained symptom-free until 1977.
A job-related motorcycle accident in 1970 rendered Hester physically unable to engage in active patrol work. He worked in various security and private investigator positions until January 26, 1976, when he accepted employment as chief of police in Skagway, Alaska. In 1977 Hester suffered another onset of abdominal cramping and fever. He took steroids to control the condition and underwent surgery in 1982. Following minimal time off work, Hester recovered and returned to full-time police work in Skagway.
In April 1983, Hester accepted a new position as police chief in North Pole, Alaska. According to Hester, he moved so that his ten-year-old daughter could participate in the larger school system of the Fairbanks North Star Borough and so that he could work in a less stressful environment. Hester believed the position in North Pole would be less demanding because the department there had more officers and therefore he would have to work less overtime, the department had a 24-hour dispatch center, and the Alaska State Troopers were available for emergency backup and assistance.
Hester's Crohn's disease was asymptomatic from October 1982 until January 1984. In January 1984, however, he suffered a new onset of symptoms. This flare-up coincided with a stressful personnel problem that Hester had to deal with in the police department. The mayor insisted that Hester fire an officer against whom Hester felt there were insufficient grounds for dismissal. Hester consulted with William H. Doolittle, M.D., of Fairbanks, on February 3, 1984. Thereafter, Dr. Doolittle followed Hester's condition regularly, with visits of no less than once a month.
In response to Dr. Doolittle's treatment, the condition remained under control until April 1985. At this time, Hester experienced another stressful situation at work and a recurrence of his symptoms. He resumed steroid treatment. On May 3, *474 1985, he resigned his position as chief of police on the advice of Dr. Doolittle. Since his resignation, Hester has continued to suffer cramping, diarrhea and weight loss.
On May 9, 1985, Hester filed for occupational disability benefits under AS 39.35.410. Alaska Statute 39.35.410 provides public employees benefits if they can no longer work because of a total and apparently permanent occupational disability.[1] The Administrator of the Division of Retirement and Benefits (administrator) denied Hester's application.[2]
Hester appealed the administrator's decision to the Public Employees' Retirement Board (PERB). Pursuant to AS 39.36.010, PERB requested advice from the Public Employees' and Teachers' Disability Review Board (DRB). DRB was created in 1982 to provide "expert review of applications for disability benefits."[3] AS 39.36.010. DRB recommended that Hester be found not entitled to occupational disability benefits.
After hearing testimony from Hester and Dr. Doolittle, PERB affirmed the denial of occupational disability benefits. PERB's conclusion reads, in part:
[T]he condition suffered by Mr. Hester is Crohn's disease, and the evidence has not proven that Crohn's disease was proximately caused by an injury sustained or hazard undergone by Mr. Hester in the performance of his duties as a police officer.
Hester appealed the decision to the superior court. AS 22.10.020(d); AS 44.62.560(a); Alaska R.App.P. 601. Judge James R. Blair reversed PERB's decision, concluding that the board had misconstrued the issue. Citing Delaney v. Alaska Airlines, 693 P.2d 859 (Alaska 1985), Judge Blair held that Hester might be entitled to occupational disability benefits even if his job did not cause his Crohn's disease. According to Judge Blair, the Delaney decision entitles a claimant to occupational disability benefits if his or her job causes a preexisting condition to advance from a dormant state to an acute state. Judge Blair remanded the case to PERB because it failed to address this issue.
PERB heard additional testimony and arguments relating to the remand. Hester provided telephonic testimony from Dr. Michael Citron, a gastroenterologist in California who had evaluated Hester in 1980 and 1985. PERB also heard from Dr. Vernon Cates, a member of DRB which had previously advised PERB.[4] On May 14, 1987, PERB again denied occupational disability benefits to Hester.
Hester again appealed PERB's decision to the superior court. Judge Michael L. Wolverton affirmed PERB's denial of benefits. Hester appeals.
II. DISCUSSION
Since the superior court acted as an intermediate court of appeal, we independently and directly scrutinize the merits of PERB's decision. Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896, 903 (Alaska 1987). In reviewing PERB's denial of occupational disability *475 benefits to Hester, we must first determine whether the board applied the correct legal standards. Second, we must consider whether substantial evidence supports the board's factual findings.
A. Is the Worsening of a Claimant's Nonwork-related Disease Compensable as an Occupational Disability Under Alaska's Public Employees' Retirement System?
The state argues that PERB applied an appropriate standard in its initial decision, No. 85-7, when it considered simply whether Hester's work proximately caused his Crohn's disease.[5] According to the state, Delaney, 693 P.2d 859, is inapplicable to PERB because Delaney is a workers' compensation case.
In support of its argument, the state emphasizes the following: (1) the broad presumption of coverage under workers' compensation does not apply under PERS; and (2) unlike the workers' compensation statutes, PERS provides for benefits for nonoccupational disability as well as for occupational disability. Therefore, according to the state, the court should apply a narrow interpretation to the words "a bodily injury sustained, or a hazard undergone, while in the performance and within the scope of the employee's duties," when evaluating the PERB's denial of occupational disability benefits. The state argues that this language in AS 39.35.680(26) does not entitle an employee whose preexisting condition is aggravated by his or her work to occupational disability benefits. We disagree.
In Delaney we stated that "a preexisting disease does not rule out compensation [under the Alaska Workers' Compensation Act] if employment aggravated, accelerated or combined with the disease to produce disability." 693 P.2d at 862 (citing Thornton v. Alaska Workers' Compensation Board, 411 P.2d 209, 210 (Alaska 1966)). We held that an employee is entitled to workers' compensation benefits if the employee's work was a substantial factor in bringing about the disability.[6]Id.
We believe that the causation standards articulated in Delaney are applicable to occupational disability claims under the PERS as well as to workers' compensation claims. It is basic that an accident which produces injury by precipitating the development of a latent condition or by aggravating a preexisting condition is a cause of that injury. 22 Am.Jur.2d Damages § 280 (1988); see also LaMoureaux v. Totem Ocean Trailer Express, Inc., 632 P.2d 539 (Alaska 1981) (upholding jury instruction that plaintiff was "entitled to recover damages for an aggravation of such preexisting condition or disability proximately resulting from the injury," while rejecting plaintiff's proposed instruction making defendant liable for plaintiff's entire injury if plaintiff was unable to make an apportionment between his preexisting injury and that suffered in the accident), reh'g on other grounds, 651 P.2d 839 (Alaska 1982).
Other jurisdictions have held that occupational disability can occur from work-related aggravation of a preexisting condition. The Court of Appeals of New York held that a city sanitation worker is entitled to accident disability retirement following an explosion at work if the explosion precipitated the employee's chronic anxiety neurosis. Tobin v. Steisel, 64 N.Y.2d 254, 485 N.Y.S.2d 730, 475 N.E.2d 101 (1985); see also Tingler v. City of Tampa, 400 So.2d 146, 149-50 (Fla. Dist. Ct. App. 1981) ("When the disability is `revealed' by the stress of *476 appellant's job, notwithstanding the preexisting condition, we hold that it was received `in the service' and entitles appellant to [occupational] disability benefits."); Olson v. City of Wheaton Police Pension Board, 153 Ill. App.3d 595, 106 Ill.Dec. 596, 598, 505 N.E.2d 1387, 1389 (1987) (in reviewing policeman's claim for occupational disability resulting from migraine headaches allegedly precipitated by job-related stress, intermediate appellate court applied aggravation of preexisting condition rule articulated by Illinois Supreme Court in workers' compensation cases); Henning v. Carrier, 430 So.2d 1310, 1317 (La. Ct. App. 1983) (aggravation of preexisting heart condition falls into category of an "injury received in the line of duty" under former Louisiana Statute § 33.2376(B)(1)); Gibson v. Texas Mun. Retirement Sys., 683 S.W.2d 882, 884 (Tex. Ct. App. 1985) ("If, indeed, the strain [of repairing firehouse door] aggravated the pre-existing heart condition then Gibson is entitled to receive the supplemental [i.e. occupational] disability benefit."). Like AS 39.35.680(26), none of these states' disability statutes explicitly address preexisting conditions. We agree with the rationale of Tobin, 485 N.Y.S.2d 730, 475 N.E.2d 101, and perceive no reason to alter basic principles of causation when dealing with retirement benefit cases.
The state's contention that the statutory presumption of coverage under the Alaska Workers' Compensation Act is not applicable to claims under PERS is correct. Recently we held that in occupational disability claims, unlike workers' compensation claims, "the employee bears the burden of establishing by a preponderance of the evidence that the disability was proximately caused by an injury which occurred in the course of employment." State, Public Employees' Retirement Board v. Cacioppo, 813 P.2d 679, 682-83 (Alaska, 1991).
Who bears the burden of proof, however, has no relevance to what that party must prove. In Cacioppo, we stated that an occupational injury need not be the sole factor, but rather a substantial factor, in causing the employee's disability. Id. at 683. This holding is consistent with Delaney, 693 P.2d at 862. Hester is entitled to occupational disability benefits if he can establish by a preponderance of the evidence that work-related stress was a substantial factor in aggravating his Crohn's disease to the extent that he was no longer capable of working.
B. Is the Public Employees' Retirement Board's Conclusion that Hester's Work as Police Chief did not Exacerbate His Crohn's Disease Supported by Substantial Evidence?
Both parties agree that the appropriate standard of review is whether the PERB's finding is supported by substantial evidence. We have defined substantial evidence as "such relevant evidence as a reasonable mind might accept as adequate to support [the board's] conclusion." Miller v. ITT Arctic Services, 577 P.2d 1044, 1049 (Alaska 1978).
PERB concluded that Hester's work conditions did not cause his Crohn's disease to advance from a dormant to an acute state.[7] According to PERB, the evidence presented to it indicated that "the very nature of the disease was such that in its natural course it recurs with episodes of flare-up not necessarily or even probably attributable to stress."
We believe that substantial evidence supports the board's conclusion. The following evidence supports PERB's conclusion that there was no proven causal link between Hester's work as police chief and the disabling effects of his Crohn's disease: (1) *477 Dr. Vernon A. Cates' testimony that stress is not a major factor in the pathology of Crohn's disease and that the major cause of flareups is the natural continuing process of the disease itself; (2) the expert opinion of the DRB that there is no persuasive evidence that job-related stress causes Crohn's disease or exacerbates its symptoms; (3) the opinion of Dr. Willard E. Andrews, the consulting physician who reviewed the available medical evidence for the administrator, that the stress of police work is not a causal link to Hester's condition; and (4) Dr. Michael Citron's acknowledgment that Crohn's disease flare-ups can recur for reasons other than stress.
Hester argues that PERB inappropriately discredited the testimony of Dr. Doolittle, Hester's treating physician and a specialist in Crohn's disease. In addition, Hester contends that PERB gave inordinate weight to the testimony of Dr. Cates, considering his bias as a member of the DRB, his lack of personal medical knowledge of Hester and his lack of special expertise relating to Crohn's disease. While we recognize the merit in Hester's criticism of PERB's decision, we do not believe that such weaknesses in the evidence justify reversing the board's decision. Weighing the evidence is the role of the board, not this court. Delaney, 693 P.2d at 863 & n. 2.
AFFIRMED.
RABINOWITZ, Chief Justice, dissenting.
I dissent from the court's holding that there is substantial evidence to support the decision of PERB that "Hester's work conditions did not cause his Crohn's disease to advance from a dormant to an acute state" and that "the very nature of [Crohn's] disease was such that in its natural course it recurs with episodes of flare-up not necessarily or even probably attributable to stress."[8] At 476-477.
In the case at bar the majority affirms the denial by PERB of benefits to Hester on the basis of (1) the testimony of Dr. Cates; (2) the opinion of the DRB; (3) the testimony of Dr. Andrews; and (4) Dr. Citron's acknowledgement that Crohn's disease flare-ups can recur for reasons other than stress. Id. at 476.
Based on my review of the record, I conclude that the denial by PERB of benefits is not supported by substantial evidence. First, Dr. Cates' testimony is less reliable than the testimony this court disregarded in Black v. Universal Servs., Inc., 627 P.2d 1073, 1076 (Alaska 1981).[9] Dr. Cates is a general practitioner, who over the last 10 years hadn't treated, or operated on anyone with Crohn's disease. Furthermore, he never saw, treated, or examined Hester until the proceedings before the PERB were commenced. Dr. Cates acknowledged his lack of specialized expertise in the treatment of Crohn's disease and his limited knowledge of the medical literature in the field. He admitted that stress plays some role in flare-ups. Finally, I think it significant to note that Dr. Cates' testimony is contrary to the testimony of all of Hester's treating physicians, who expressed the opinion that stress exacerbated Hester's Crohn's disease.
Second, I don't believe that significant weight should be attached to the decision *478 of the DRB. Dr. Cates was both a witness and the only member of the DRB who is a physician.
Third, the majority cites Dr. Andrews' testimony for the proposition that "the stress of police work is not a causal link to Hester's condition." On the other hand, the record discloses that Dr. Andrews stated that stress exacerbated the disease.
The role of stress is controversial to this condition, but I believe that stress undoubtedly exacerbates its progression. Relief of the stressful situation makes management of the condition much more successful. I do not feel the stress of police work [sic] is a causal link to this condition.
(Emphasis added). Dr. Andrews' finding that reducing Hester's stress makes his condition more manageable indicates that work related stress exacerbated the disease.
Finally, the PERB relied on Dr. Citron's acknowledgement that Crohn's disease flare-ups can recur for reasons other than stress. It should be noted that Dr. Citron, a gastroenterologist, who has treated 800 to 1000 cases of Crohn's disease, stated in part:
I don't think there is a gastroenterologist that would not admit that there is an association between aggravation of the disease and stress situations.... I don't think there is ... much doubt ... that there is a relationship between stress and exacerbation of the disease.
In brief, based on the testimony of Dr. Jones,[10] Dr. Stevenson,[11] Dr. Doolittle,[12] and the testimony mentioned above, I conclude that the decision of the PERB denying Hester benefits lacks substantial evidence.
NOTES
[1] AS 39.35.680(26) defines "occupational disability" as follows:
"occupational disability" means a physical or mental condition that, in the judgment of the administrator, presumably permanently prevents an employee from satisfactorily performing the employee's usual duties for an employer or the duties of another comparable position or job that an employer makes available and for which the employee is qualified by training or education; however, the proximate cause of the condition must be a bodily injury sustained, or a hazard undergone, while in the performance and within the scope of the employee's duties and not the proximate result of the wilful negligence of the employee.
[2] Hester was, however, entitled to receive nonoccupational disability benefits pursuant to AS 39.35.400.
[3] The legislature disbanded the DRB in 1990. Ch. 40, § 4, SLA 1990. Currently, the governor appoints medical experts to serve as voting members on PERB when it needs such expertise. AS 39.35.030(d).
[4] DRB did not reevaluate Hester's application after the remand. DRB had concluded in its initial recommendation that work-related stress does not cause Crohn's disease nor exacerbate its symptoms.
[5] The state did not appeal the superior court's remand of PERB's initial decision nor petition the supreme court for review. Nevertheless, we must consider the merits of Judge Blair's decision at this point. See City & Borough of Juneau v. Thibodeau, 595 P.2d 626 (Alaska 1979) (The decision of a superior court acting as an intermediate appellate court, which reverses the judgment of an inferior court or the decision of an administrative agency and remands for further proceedings, is not a final judgment for purposes of appeal.).
[6] Like Hester, Delaney suffered from Crohn's disease. We affirmed the Alaska Workers' Compensation Board's denial of Delaney's claim for benefits on the grounds that substantial evidence supported the board's finding that Delaney's Crohn's disease was not aggravated by his employment as an Alaska Airlines pilot. Delaney, 693 P.2d at 865.
[7] In interpreting AS 39.35.680(26), we reject the distinction articulated in Weller v. Union Carbide Corp., 288 Or. 27, 602 P.2d 259 (1979), between worsening of the underlying disease process and worsening of the symptoms of a disease. The Supreme Court of Oregon held that the former is compensable, but that the latter is not. Id., 602 P.2d at 261-62. As the Oregon court recognized, Id., 602 P.2d at 261 n. 2 & 262, it is difficult to separate an aggravation of "symptoms" from aggravation of a "disease." Delaney simply requires that "the employment must have been a substantial factor in bringing about the disability." 693 P.2d at 862 (emphasis added). We believe that increased pain or other symptoms can be as disabling as deterioration of the underlying disease itself.
[8] In determining whether there is substantial evidence, a court "must take into account whatever in the record fairly detracts from its weight." Delaney v. Alaska Airlines, 693 P.2d 859, 863-64 n. 2 (Alaska 1985) overruled on other grounds 741 P.2d 634, 639 (Alaska 1987) (quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1950)).
[9] In Black v. Universal Servs., Inc., this court reversed the denial of continuing compensation by the Workers Compensation Board despite the testimony of a doctor supporting the Board's ruling. 627 P.2d 1073 (Alaska 1981). We reasoned that "Dr. Pennell [the doctor relied upon by the Board] had no opportunity to examine Black in any depth, and because his conclusions are contrary to those of the numerous physicians who treated her, we have concluded that a `reasonable mind' would not accept his diagnosis." Id. at 1075-76 (footnote omitted). Dr. Pennell's examination of Black lasted only twenty minutes. Id. at 1075 n. 9. Thus, in Black we concluded that "Dr. Pennell's knowledge of the case is so slight as to make his report worthless. After reviewing the record, we are unable to accept Dr. Pennell's report as `substantial evidence' in support of the Board's conclusion... ." Id. at 1075.
[10] In his physician's statement, Dr. Jones states that Hester's condition was "aggravated by emotional stress."
[11] In his physician's statement, Dr. Stevenson writes in part that Hester's disease was "exacerbated by stress."
[12] Throughout his extensive testimony before the PERB, Dr. Doolittle, Hester's primary treating physician, related exacerbation of Hester's Crohn's disease to work connected stress.
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574 F.3d 29 (2009)
In re FLAG TELECOM HOLDINGS, LTD. SECURITIES LITIGATION
Peter T. Loftin, Norman H. Hunter, and Joseph Coughlin, individually and on behalf of all others similarly situated, Plaintiffs-Appellees,
v.
Andres Bande, Edward McCormack, Edward Mcquaid, Philip Seskin, Daniel Petri, Dr. Lim Lek Suan, Larry Bautista, and Citigroup Global Markets Inc., formerly known as Salomon Smith Barney Holdings Inc., Defendants-Appellants.
Docket Nos. 07-4017-cv (L), 07-4025-cv (CON).
United States Court of Appeals, Second Circuit.
Argued: April 23, 2009.
Decided: July 22, 2009.
*30 Arthur R. Miller, Milberg LLP, New York, NY, (Brad N. Friedman, Matthew A. Kupillas, and Arvind B. Khurana, on the brief) for Plaintiffs-Appellees.
Jerome S. Fortinsky, Sherman & Sterling LLP, New York, NY, (Daniel H.R. Laguardia and Jeffrey J. Resetarits, on *31 the brief) for Defendants-Appellants Andres Bande, Larry Bautista, Lim Lek Suan, Edward McCormack, Edward McQuaid, Daniel Petri, and Philip Seskin.
Douglas W. Henkin, Milbank Tweed Hadley & McCloy LLP, New York, NY, (James N. Benedict, C. Neil Gray, and Kevin M. Ashby, on the brief) for Defendant-Appellant Citigroup Global Markets, Inc.
Before: POOLER, HALL, Circuit Judges, and SWEET, District Judge.[*]
SWEET, District Judge:
Defendants Andres Bande, Larry Bautista, Dr. Lim Lek Suan, Edward McCormack, Edward McQuaid, Daniel Petri, and Philip Seskin (the "Individual Defendants") and Citigroup Global Markets Inc. ("Citigroup") (collectively, the "Defendants") appeal from an order of the United States District Court for the Southern District of New York (Conner, J.) certifying the proposed class and appointing Peter T. Loftin, Norman H. Hunter and Joseph Coughlin ("Plaintiffs") to serve as class representatives and Milberg Weiss LLP to serve as class counsel.
This appeal raises issues implicating both the substance of the often overlapping requirements of typicality and adequacy laid out in Rule 23(a) of the Federal Rules of Civil Procedure and the correct standard of proof to be applied by courts in this context. We conclude that while the district court did not abuse its discretion in granting certification of a class encompassing members who allege claims under both the Securities Act of 1933 (the "'33 Act") and the Securities Exchange Act of 1934 (the "'34 Act"), it did err in certifying as members of the class those individuals who sold their stock prior to the February 13, 2002 close of the class period.
BACKGROUND
In February 2000, Flag Telecom Holdings, Ltd. ("Flag" or the "Company"), a self-described telecommunications "carriers' carrier" whose business involved the sale of access to its telecommunications network, offered its shares to the public in an initial public offering ("IPO"). See In re Flag Telecom Holdings, Ltd. Sec. Litig. ("In re Flag"), 245 F.R.D. 147, 151-52 (S.D.N.Y.2007). In the prospectus, which was incorporated into the registration statement filed with the U.S. Securities and Exchange Commission in connection with the IPO, Flag stated that it had obtained $600 million in bank financing and presales of $750 million to construct the Flag Atlantic-1 cable system (the "FA-1 system"), a fiber-optic submarine cable connecting Paris and London to New York.
According to Plaintiffs, despite an over-supply of fiber optic capacity in the market generally, Defendants made various misstatements and omissions in the prospectus and during the two years following the IPO, assuring investors that demand for Flag's cable remained strong. On February 13, 2002, the Company disclosed, inter alia, that approximately 14% of the Company's GAAP revenues for the year ending December 31, 2001, were associated with so-called "reciprocal transactions." Described by the lower court as "swaps of telecommunications capacity between competitors," reciprocal sales
may be entered into for legitimate reasons, i.e. to acquire access on networks *32 in a market that a company wishes to enter in exchange for capacity that has yet to be sold and is not otherwise in use ("dark fiber") ... [or] can also be utilized by a company seeking to defraud investors or its creditors to create the impression that the company is selling capacity when it is merely unloading useless dark fiber on one of its networks in exchange for useless dark fiber on a competitor's network.
In re Flag Telecom Holdings, Ltd. Sec. Litig., 352 F.Supp.2d 429, 461 (S.D.N.Y. 2005). Following the announcement, Flag stock dropped 46% from its closing price on February 12, 2002, to $0.36 per share on February 13, 2002.
Shortly after, on April 1, 2002, Flag filed its 10-K report for fiscal year 2001, disclosing that the asset value of its FA-1 system was impaired and that it was forced to recognize an impairment charge of $359 million. On April 12, 2002, the Company filed its Chapter 11 bankruptcy petition. Before being canceled pursuant to Flag's court-approved Chapter 11 plan in September 2002, the Company's common stock was trading at $0.002 per share, having traded as low as $0.0001 per share during the bankruptcy.
The first of several securities class actions was filed against Defendants in connection with these events in April 2002. In October 2002, the Honorable William C. Conner consolidated several of the actions and appointed Loftin, who purchased approximately 1.7 million shares of Flag common stock between July 17, 2000, and September 22, 2000, Lead Plaintiff and Milberg Weiss Bershad Hynes & Lerach LLP Lead Counsel. Plaintiffs filed a Consolidated Amended Complaint on March 20, 2003, and a Second Consolidated Amended Complaint on December 1, 2003. Judge Conner dismissed the Second Consolidated Amended Complaint without prejudice, and a Third Consolidated Amended Complaint was filed on April 14, 2004, adding Hunter, who purchased 200 shares of Flag stock in the IPO, as a plaintiff.
Plaintiffs bring the instant action on behalf of those who purchased or otherwise acquired Flag common stock between February 11, 2000, and February 13, 2002 (the "Class Period") for violations of §§ 11, 12(a)(2), and 15 of the '33 Act (the "'33 Act Plaintiffs") and §§ 10(b) and 20(a) of the '34 Act and Rule 10b-5 promulgated thereunder (the "'34 Act Plaintiffs"). Plaintiffs allege that as a result of Defendants' materially false and misleading statements in the Company's registration statement, SEC filings, and press releases, the value of Flag stock was artificially inflated during the Class Period. Specifically, the '33 Act Plaintiffs allege that Defendants' statements in the prospectus regarding the FA-1 system and the $750 million in presales were misleading in that certain of the presales were entered into to ensure financing and did not accurately represent profit or demand.[1] The '34 Act Plaintiffs allege that the Individual Defendants made false and misleading statements regarding the Company's profitability, most notably by falsely reporting the types of reciprocal sales described above.
In an Amended Opinion and Order dated January 23, 2006, Judge Conner denied Defendants' motion to dismiss, holding that Defendants had not satisfied their burden to establish negative causation with respect to the '33 Act Plaintiffs' claims as required by 15 U.S.C. §§ 77k(e) and 77l(b). See In re Flag Telecom Holdings, Ltd. Sec. Litig., 411 F.Supp.2d 377, 383-84 *33 (S.D.N.Y.2006). The district court rejected Defendants' argument that since the '33 Act Plaintiffs did not learn of the allegedly misleading pre-sale until after the November 2003 filing of a complaint in a related state court action,[2] at which time Flag common stock had been cancelled and was already worthless, none of the decline in the stock's value could be attributed to those misstatements. The court found that Defendants had not "demonstrate[d] that the decline was not due, at least in part, to the alleged misrepresentations concerning pre-sales in Flag's Prospectus, which presumably inflated the price level attained in the IPO and thereby heightened the loss when the price fell virtually to zero." Id. at 384. With the court's approval, Plaintiffs filed a Fourth Consolidated Amended Complaint on October 15, 2007.
In September 2007, the district court granted Plaintiffs' motion for certification pursuant to Fed.R.Civ.P. 23 and appointed Loftin, Hunter, and Coughlin[3] class representatives and Milberg Weiss LLP class counsel. Judge Conner defined the certified class as follows:
All persons or entities who purchased common stock of Flag Telecom Holdings, Ltd. ("Flag" or the "Company") between March 6, 2000 and February 13, 2002, inclusive, as well as those who purchased Flag common stock pursuant to or traceable to the Company's initial public offering between February 11, 2000 and May 10, 2000, inclusive (collectively, the "Class Period"), but shall exclude: (1) defendants herein, members of each individual defendants' immediate family, any entity in which any defendant has a controlling interest, and the legal affiliates, representatives, heirs, controlling persons, successors and predecessors in interest or assigns of any such extended party; (2) Verizon Communications, Inc.; and (3) entities that had the right to appoint a director to Flag's Board of Directors and proceeded to make such an appointment (or, for reasons unique to them, chose not to exercise such right), such as Dallah Albaraka Holding Company, Telecom Asia Corporation Public Co. Ltd., Marubeni Corporation, the Asian Infrastructure Fund and Tyco International Ltd.
In re Flag, 245 F.R.D. at 174. In determining that Plaintiffs had established each of the Fed.R.Civ.P. Rule 23(a) and (b)(3) requirements, the lower court rejected several of Defendants' arguments now before us on appeal.
With respect to the typicality requirement of Rule 23(a)(3), Judge Conner concluded that "the typicality requirement is met because plaintiffs ... like the putative class members, will attempt to prove that they purchased Flag common stock during the Class Period and were injured by defendants' false and misleading representations made in the Registration Statement and throughout the Class Period in violation of the securities laws." Id. at 159. In so doing, the lower court rejected Defendants' argument that a "fundamental conflict" exists between the '33 Act and '34 Act Plaintiffs. Id. Recognizing that the '33 Act Plaintiffs are subject to a "negative causation" affirmative defense under 15 *34 U.S.C. §§ 77k(e) and 77l(b), which precludes recovery where defendants can show "that the decline in Flag's stock price was due to something other than the alleged misstatements concerning the pre-sales," while the '34 Act Plaintiffs are required to prove "loss causation," or "that the decline in Flag's stock price was due to, inter alia, the failure to appropriately disclose the reciprocal transactions that took place after the IPO," the district court concluded that "the two sets of claims are not antagonistic to each other because proof of one does not negate an essential element of the other." Id. at 160.
Judge Conner also rejected Defendants' several challenges to the adequacy of the class representatives. Of particular relevance to Defendants' appeal, the district court found that the class properly included those purchasers who sold their Flag shares before February 13, 2002, the last day of the Class Period and the date on which Plaintiffs allege Flag disclosed the truth behind the alleged misstatements to the public. According to Judge Conner, Plaintiffs sufficiently demonstrated that the truth regarding Flag's financial condition began leaking into the market prior to February 13, 2002. Based on various allegations and an event study submitted by Plaintiffs' expert, the district court held it "conceivable that in-and-out purchasers asserting claims under both the '33 and '34 Act may be able to overcome defendants' affirmative defense of negative causation and prove loss causation, respectively, notwithstanding that the February 13, 2002 announcement is the most critical corrective disclosure." Id. at 167.
On September 19, 2007, Defendants sought leave to appeal the district court's grant of Plaintiffs' motion for class certification pursuant to Fed.R.Civ.P. 23(f) and Fed. R.App. P. 5, which we granted on December 12, 2007.
DISCUSSION
In reviewing class certification under Rule 23, we apply an abuse-of-discretion standard to both the lower court's ultimate determination on certification, as well as to its rulings that the individual Rule 23 requirements have been met. In re Initial Pub. Offering Sec. Litig. ("In re IPO"), 471 F.3d 24, 31-32 (2d Cir.2006). The factual findings underlying the ruling are reviewed for clear error, and we review de novo whether the correct legal standard was applied. Id. at 40-41. Where, as here, the appeal challenges the lower court's grant of class certification, "we accord the district court noticeably more deference than when we review a denial of class certification." In re Salomon Analyst Metromedia Litig., 544 F.3d 474, 480 (2d Cir.2008) (citation omitted).
Rule 23(a) sets out the requirements for class certification:
(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.
Fed.R.Civ.P. 23(a). We recently set forth the standard of proof governing class certification as follows:
(1) a district judge may certify a class only after making determinations that each of the Rule 23 requirements has been met; (2) such determinations can be made only if the judge resolves factual disputes relevant to each Rule 23 requirement and finds that whatever underlying facts are relevant to a particular Rule 23 requirement have been established and is persuaded to rule, based on the relevant facts and the applicable *35 legal standard, that the requirement is met; (3) the obligation to make such determinations is not lessened by overlap between a Rule 23 requirement and a merits issue, even a merits issue that is identical with a Rule 23 requirement; (4) in making such determinations, a district judge should not assess any aspect of the merits unrelated to a Rule 23 requirement;. ...
In re IPO, 471 F.3d at 41. In a later clarification, we further described "the standard of proof applicable to evidence proffered to meet" the requirements of Rule 23 as a "preponderance of the evidence." Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 202 (2d Cir.2008).
To establish typicality under Rule 23(a)(3), the party seeking certification must show that "each class member's claim arises from the same course of events and each class member makes similar legal arguments to prove the defendant's liability." Robidoux v. Celani, 987 F.2d 931, 936 (2d Cir.1993). Adequacy "entails inquiry as to whether: 1) plaintiff's interests are antagonistic to the interest of other members of the class and 2) plaintiffs attorneys are qualified, experienced and able to conduct the litigation." Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d 52, 60 (2d Cir.2000). The focus is on uncovering "conflicts of interest between named parties and the class they seek to represent." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625, 117 S.Ct. 2231, 2250, 138 L.Ed.2d 689 (1997). In order to defeat a motion for certification, however, the conflict "must be fundamental." In re Visa Check/MasterMoney Antitrust Litig. ("In re Visa"), 280 F.3d 124, 145 (2d Cir.2001) (internal quotations and citation omitted), abrogated in part by In re IPO, 471 F.3d 24.
I. Disabling Intra-Class Conflict
On appeal, Defendants renew their argument that the class suffers from a fundamental conflict rendering it uncertifiable because "success for the '34 Act plaintiffs necessarily precludes recovery by the '33 Act plaintiffs and vice-versa." Citigroup Br. at 31. We do not find, however, that the district court abused its discretion in concluding that the typicality requirement is met in this case despite the conflict described by Defendants. Although Judge Conner did not directly address the conflict issue in connection with the adequacy requirement, we also find that the court did not abuse its discretion in determining that any antagonistic interests with respect to causation do not constitute the type of "fundamental" conflict that renders the class uncertifiable. See id.
It is well-established that plaintiffs alleging claims under Section 10(b) of the '34 Act must prove loss causation. See 15 U.S.C. § 78u-4(b)(4) ("[T]he plaintiff shall have the burden of proving that the act or omission of the defendant alleged to violate this chapter caused the loss for which the plaintiff seeks to recover damages."); Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, 552 U.S. 148, 128 S.Ct. 761, 768, 169 L.Ed.2d 627 (2008) (describing six elements of typical 10(b) claim as "(1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation"). To prove loss causation, a plaintiff must demonstrate "that the misstatement or omission concealed something from the market that, when disclosed, negatively affected the value of the security." Lentell v. Merrill Lynch & Co., 396 F.3d 161, 173 (2d Cir. 2005). By contrast, under the '33 Act, it is *36 the defendant who bears the burden of demonstrating that something other than the misstatement at issue caused plaintiff's loss. See 15 U.S.C. §§ 77k(e), 77l (b); Akerman v. Oryx Commc'ns, Inc., 810 F.2d 336, 340-42 (2d Cir.1987) (describing defendants' "heavy burden" of proving negative causation under § 11 of the '33 Act).
As the lower court recognized, we have repeatedly analogized the concept of loss causation to proximate cause. See, e.g., Lentell, 396 F.3d at 173 (stating that although "the tort analogy is imperfect," "a misstatement or omission is the `proximate cause' of an investment loss if the risk that caused the loss was within the zone of risk concealed by the misrepresentations and omissions alleged by a disappointed investor" (emphasis in original)); Emergent Capital Inv. Mgmt., LLC v. Stonepath Group, Inc., 343 F.3d 189, 197 (2d Cir.2003) ("We have often compared loss causation to the tort law concept of proximate cause, meaning that the damages suffered by plaintiff must be a foreseeable consequence of any misrepresentation or material omission." (internal quotations and citation omitted)). In relying on this familiar concept, Judge Conner found fault with Defendants' argument which, the court concluded, mistakenly "overlooks that the decline in value of Flag stock may have been caused by both the alleged fraud relating to the reciprocal transactions and the alleged misstatements relating to pre-sales found in the Registration Statement." In re Flag, 245 F.R.D. at 159-60 (emphasis in original).
Defendants take issue with the lower court's application of proximate cause to the facts here, namely, its conclusion that the decline in value of Flag stock "may have been caused by either or both of [the] alleged acts of deception." In re Flag, 245 F.R.D. at 160. They argue that under the Supreme Court's holding in Dura Pharmaceuticals., Inc. v. Broudo, 544 U.S. 336, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005), loss causation and negative causation add up to a "zero-sum game," and that by establishing loss causation, the '34 Act Plaintiffs will necessarily undermine the '33 Act Plaintiffs' ability to rebut Defendants' negative causation defense. Individual Defendants Br. at 20.
We agree with the lower court that the '34 Act Plaintiffs can establish "the causal link between the alleged misconduct and the economic harm ultimately suffered by the plaintiff," Emergent Capital Inv. Mgmt., 343 F.3d at 197, without threatening the interests of the '33 Act Plaintiffs to such a degree as to render the certified class representatives atypical or inadequate. Dura stands for the proposition that in fraud-on-the-market cases, "an inflated purchase price will not itself constitute or proximately cause the relevant economic loss." 544 U.S. at 342, 125 S.Ct. 1627, 161 L.Ed.2d 577. Rather, to establish loss causation, Dura requires plaintiffs to disaggregate those losses caused by "changed economic circumstances, changed investor expectations, new industry-specific or firm-specific facts, conditions, or other events," from disclosures of the truth behind the alleged misstatements. Id. at 342-43, 544 U.S. 336, 125 S.Ct. 1627, 161 L.Ed.2d 577; see Lattanzio v. Deloitte & Touche LLP, 476 F.3d 147, 157-58 (2d Cir.2007) (finding plaintiffs failed to allege sufficient facts to show that defendant's misstatements were the proximate cause of plaintiffs' losses where non-party's misstatements could also have caused the loss and plaintiffs did not "allege[] facts that would allow a factfinder to ascribe some rough proportion of the whole loss to [defendant's] misstatements").
Although Defendants have contended to the contrary, it is not inconsistent with *37 Dura to permit both the '33 and '34 Act Plaintiffs to proceed as a single class in establishing that each of the misstatements alleged in the complaint was the proximate cause of some portion of Plaintiffs' losses. Securities class actions involving more than one misstatement are far from unusual, and both Plaintiffs and Defendants cite several post-Dura examples of district courts granting certification where plaintiffs alleged claims under both the '33 and '34 Acts. See, e.g., In re Vivendi Universal, S.A. Sec. Litig., 242 F.R.D. 76 (S.D.N.Y.2007); In re Initial Pub. Offering Sec. Litig., 243 F.R.D. 79 (S.D.N.Y. 2007); In re Tyco Int'l, Ltd., 236 F.R.D. 62 (D.N.H.2006). Defendants attempt to distinguish these cases from the instant case on the grounds that they "involved allegations of misstatements made in a single document or allegations of a series of misstatements regarding the same subject," while the allegations here involve unrelated misstatements. Individual Defendants Br. at 24-25 n. 19. While the relatedness of the alleged misstatements may be relevant to the typicality inquiry generally, see, e.g., Robidoux, 987 F.2d at 936-37, we fail to see how this distinction implicates Dura. Defendants point out that "disaggregation requires that a cause be assigned to each piece of a stock price decline and precludes assigning two different causes to the same quantum of loss." Individual Defendants Br. at 22. This is true; however, in every litigation of this type, the pool of money available for each individual class member's recovery is limited to the loss that the individual actually incurred. We see nothing in the record before us that indicates that in these circumstances, where certain plaintiffs are subject to a negative causation affirmative defense, such a requirement precludes the certification of a single class.
In affirming Judge Conner's order with respect to certification of a single class of '33 and '34 Act Plaintiffs, we do not suggest that the issue described by Defendants does not deserve the careful and continued attention of the district court, but merely that it does not inevitably lead at the present time to the decertification of the class. As the lower court recognized, if Plaintiffs are able to prove loss causation with respect to both the '33 and '34 Act claims, then it will be necessary for a jury "to determine the extent of harm caused by each [misstatement], and "it is here that the interests of class members could diverge." In re Flag, 245 F.R.D. at 160. We are confident in the lower court's wisdom and ability to utilize the available case management tools to see that all members of the class are protected, including but not limited to the authority to alter or amend the class certification order pursuant to Rule 23(c)(1)(C), to certify subclasses pursuant to Rule 23(c)(5), and the authority under Rule 23(d) to issue orders ensuring "the fair and efficient conduct of the action." Advisory Committee Note on Subdivision (d); see Marisol A. v. Giuliani, 126 F.3d 372, 379 (2d Cir.1997) (per curiam) (describing "ample tools" available to district court "to fulfill its responsibility" under Rule 23).
II. In-and-Out Traders
Defendants next argue that the lower court abused its discretion by including as members of the certified class those investors who sold their stock before the February 13, 2002 alleged corrective disclosures were made. Class Representative Hunter, who purchased 200 shares in the IPO and sold them in November 2001, several months before the February 13, 2002 disclosures, is one such purchaser. We consider Defendants' argument with respect to these so-called "in-and-out" traders as implicating the court's authority to define the class, pursuant to Fed.R.Civ.P. *38 23(c)(1)(B), and the typicality and adequacy of representation requirements of Rule 23(a).
Before addressing whether the lower court erred by certifying in-and-out traders in this case, we must first briefly address Plaintiffs' argument that this issue is not properly before us on Defendants' Rule 23(f) appeal. Rule 23(f) gives this court the authority to "permit an appeal from an order granting or denying class-action certification under this rule." Fed. R.Civ.P. 23(f). Plaintiffs contend that Defendants' argument with respect to the in-and-out traders goes solely to loss causation, a merits issue properly raised in an appeal of a motion to dismiss or summary judgment order, rather than an appeal of an order granting class certification. We do not agree that Defendants' arguments with respect to the in-and-out traders in this context can be so cleanly separated from class certification as to render the issue outside the scope of our Rule 23(f) review.
Given the district court's careful attention to the issue, the lower court clearly considered the in-and-out traders' ability to prove loss causation as relevant to Plaintiffs' certification motion. See In re Flag, 245 F.R.D. at 165-68. Under In re IPO, lower courts have an "obligation" to resolve factual disputes relevant to the Rule 23 requirements and to determine whether the requirements are met, an obligation "not lessened by overlap between a Rule 23 requirement and a merits issue, even a merits issue that is identical with a Rule 23 requirement." 471 F.3d at 41. To the extent the lower court was required to make factual findings or conclusions of law with respect to any of the Rule 23 requirements, including the definition of the class, those determinations are reviewable here.[4]Id. at 42 ("[W]e decline to follow the dictum in Heerwagen [v. Clear Channel Commc'n, 435 F.3d 219 (2d Cir.2006)], suggesting that a district judge may not weigh conflicting evidence and determine the existence of a Rule 23 requirement just because that requirement is identical to an issue on the merits.").
Defendants again rely on Dura to argue that any purchaser who sold his or her stock prior to Flag's February 13, 2002 announcement cannot prove loss causation, and is, at minimum, subject to unique defenses. Judge Conner concluded that since it was "conceivable" that in-and-out traders "may be able" to defeat Defendants' negative causation defense and prove loss causation "notwithstanding that the February 13, 2002 announcement is the most critical corrective disclosure," they were properly included in the certified class. In re Flag, 245 F.R.D. at 167.
Defendants argue, and we agree, that the district court's "conceivable" standard of proof does not satisfy the preponderance of the evidence standard set forth in In re IPO and its progeny. See Bombardier, *39 546 F.3d at 202 ("[T]he preponderance of the evidence standard applies to evidence proffered to establish Rule 23's requirements."). While applying a more rigorous standard to the other Rule 23 requirements, the district court quoted Roth v. Aon, 238 F.R.D. 603, 607-08 (N.D.Ill.2006), in support of the proposition that courts facing a challenge to the inclusion of in-and-out traders must only determine whether these traders "could conceivably satisfy the requirement of loss causation, and [should] therefore [be] included in the proposed class." In re Flag, 245 F.R.D. at 167 (quotations and citation omitted) (alterations in original).
While we do not disagree with the premise that it may be "premature for courts to attempt to determine whether in-and-out traders have suffered losses at the class certification stage of the game," Roth, 238 F.R.D. at 608, "In re IPO makes clear that courts may resolve contested factual issues where necessary to decide on class certification, and when a claim cannot succeed as a matter of law, the Court should not certify a class on that issue." McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 228 (2d Cir.2008) (quotations and citation omitted). To the extent that the district court relied on a lesser standard in drawing its conclusion that the in-and-out traders could prove loss causation as a matter of law, we find it abused its discretion.
Plaintiffs urge us to reject the approach taken by the Fifth Circuit Court of Appeals in Oscar Private Equity Inv. v. Allegiance Telecom, Inc., 487 F.3d 261 (5th Cir.2007), requiring proof of loss causation at the class certification stage, and instead follow the courts in this Circuit that have rejected such attempts by defendants to require such proof for certification. Compare Oscar Private Equity Inv. v. Allegiance Telecom, Inc., 487 F.3d 261, 269 (5th Cir.2007) ("We hold hence that loss causation must be established at the class certification stage by a preponderance of all admissible evidence."), with Wagner v. Barrick Gold Corp., 251 F.R.D. 112, 118-19 (S.D.N.Y.2008) (concluding that in order to trigger the fraud-on-the-market presumption and thereby satisfy the predominance requirement of Rule 23(b)(3), plaintiffs need not prove loss causation at the class certification stage); Darquea v. Jarden Corp., 06 Civ. 722(CLB), 2008 WL 622811, at *4 (2008) (rejecting Oscar and holding that to show predominance, "[p]laintiff[s] in the Second Circuit may benefit from the fraud-on-the-market presumption of reliance at the certification stage based solely on a showing that they made purchases or sales in an efficient market, and need not show that they specifically relied on the allegedly fraudulent conduct, as reliance-an element of a 10(b) claims-is presumed."); In re Omnicom Group, Inc. Sec. Litig., No. 02 Civ. 4483(RCC), 2007 WL 1280640, at *8 (S.D.N.Y. Apr.30, 2007) (rejecting loss causation challenge to predominance as "an attempt to litigate class certification on the merits of the action"). Each of these cases, however, including Oscar, discusses proof of loss causation in the context of the Rule 23(b)(3) predominance requirement, and the cases cited from this Circuit represent the position that a plaintiff is entitled to a presumption of reliance at the certification stage that does not require the court to make a conclusive finding as to loss causation in order to trigger the fraud-on-the-market presumption laid out in Basic Inc. v. Levinson, 485 U.S. 224, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988), an issue that is not before us here.
By contrast, whether or not Plaintiffs here have met their burden in establishing that the in-and-out traders will be able to show loss causation is relevant to Rule *40 23(a) for reasons that do not implicate either predominance or Basic. Since the lower court appointed Hunter, an in-and-out trader, as Class Representative, Judge Conner was required to find, by a preponderance of the evidence, that he is both an adequate and typical representative of the class and not subject to any "unique defenses which threaten to become the focus of the litigation." Baffa, 222 F.3d at 59.
Rather than remand this issue to the district court to consider whether the in-and-out traders were properly included in the class, we conclude that Plaintiffs have not presented sufficient evidence to demonstrate that the in-and-out traders will even "conceivably" be able to prove loss causation as a matter of law, and that they therefore should not have been included in the certified class. See McLaughlin, 522 F.3d at 228.
In Dura, the Supreme Court rejected the view that an inflated purchase price is sufficient to plead loss causation on 10(b) claims. 544 U.S. at 340, 125 S.Ct. 1627, 161 L.Ed.2d 577. In so doing, the Court recognized that while "an initially inflated purchase price might mean a later loss ... that is far from inevitably so." Id. at 342, 544 U.S. 336, 125 S.Ct. 1627, 161 L.Ed.2d 577 (emphasis in original). Indeed, "that lower price may reflect, not the earlier misrepresentation, but changed economic circumstances, changed investor expectations, new industry-specific or firm-specific facts, conditions, or other events, which taken separately or together account for some or all of that lower price." Id. at 343, 544 U.S. 336, 125 S.Ct. 1627, 161 L.Ed.2d 577.
The Supreme Court's holding in Dura did not represent a break from this Circuit's approach to loss causation, but rather reaffirmed the analysis we laid out in Lentell, 396 F.3d at 173 (holding that to prove loss causation, a plaintiff must allege "that the misstatement or omission concealed something from the market that, when disclosed, negatively affected the value of the security"). In Lentell, we described the two requirements necessary to establish loss causation: 1) the loss must be foreseeable, and 2) the loss must have been caused by the materialization of the concealed risk. Id. In order to satisfy the foreseeability prong, a plaintiff must prove that the risk "was within the zone of risk concealed by the misrepresentations and omissions alleged by the disappointed investor." Id. (emphasis in original).
The standards laid out in Dura and Lentell are relevant to the in-and-out traders because in order to prove loss causation, any plaintiff who sold their stock prior to the February 13, 2002 disclosure must prove that the loss they suffered was both foreseeable and caused by the "materialization of the concealed risk." The leakage theory put forth by Plaintiffs,[5] and accepted as "conceivable" by the lower court, is based on evidence that "the truth regarding Flag's financial condition began to leak into the market prior to the February 13, 2002 announcement, causing the value of Flag common stock to decline." In re Flag, 245 F.R.D. at 166. In support of this theory, Plaintiffs point to an "event study" prepared by Plaintiffs' expert, Dr. Hakala, and several "industry events" that occurred prior to the Company's own February 13, 2002 announcement, that they claim sufficiently establish loss causation *41 for the in-and-out traders' claims.[6] None of this evidence, however, satisfies Lentell because Plaintiffs have failed to demonstrate that any of the information that "leaked" into the market prior to February 13, 2002, revealed the truth with respect to the specific misrepresentations alleged. Lentell, 396 F.3d at 175.
According to Plaintiffs, "the truth about demand and profitability began to leak into the market as early as February 2001 through `industry events'" and "by August 2001, specific news concerning Flag began to leak into the market and depressed Flag's share price further." Plaintiffs Br. at 17-18. However, rather than providing evidence of corrective disclosures, the industry events cited by Plaintiffs appear in their complaint in the context of Defendants' misleading statements themselves. See Third Consolidated Amended Complaint ¶ 113 ("[D]efendant McCormack's statements about the Company's supposedly `enviable' position were an attempt to inaccurately and misleadingly create the impression that FLAG was not in the unenviable position of its competitors, who were being adversely affected by the glut of bandwidth supply, falling prices and raising costs."); ¶ 119 ("FLAG's purpose in providing guidance to analysts to adjust forecasts upward was to distinguish itself from its competitors who, at the same time, were providing much gloomier guidance concerning the state of the telecom industry and the outlook for future results."); ¶ 172 ("FLAG thus continued to issue false and misleading statements about its condition and prospects, even though its competitors were beginning to acknowledge the difficulties they were facing."). Plaintiffs cannot have it both ways. They cannot allege that Defendants made certain misstatements, namely, that Flag was doing well compared to its competitors, and simultaneously argue that the misstatement itself constituted a corrective disclosure, that is, the fact that the other companies were not doing well exposed the public to the truth about Flag's misstatements. See Lentell, 396 F.3d at 173. To permit Plaintiffs to do so in this context would "tend to transform a private securities action into a partial downside insurance policy." Dura, 544 U.S. at 347-48, 125 S.Ct. 1627, 161 L.Ed.2d 577.
Plaintiffs further fail to connect the decline in the price of Flag stock to any corrective disclosures as required by the second prong of Lentell. While the event study links the decline in value of Flag common stock to various events, Plaintiffs have not presented sufficient evidence on which the lower court could conclude that any of the events revealed the truth about the subject of any of Defendants' alleged misstatements. Given that the '33 and '34 Act Plaintiffs primarily allege misstatements with respect to the pre-sale and subsequent reciprocal sales, nothing submitted by Plaintiffs link any disclosure prior to February 13, 2002, to either of these alleged misrepresentations. Without more, we conclude that Plaintiffs have not put forth sufficient evidence on which the in-and-out traders could establish loss causation, and they must therefore be excluded from the certified class. Accordingly, Hunter may not serve as class representative.
III. Remaining Arguments
Defendants raise additional issues challenging the lower court's grant of certification. Since we find these arguments to have no merit, we address them only briefly here.
In addition to the challenges to the adequacy of the class representatives discussed above, Defendants claim that Hunter *42 and Coughlin lack the basic familiarity and involvement with the class required under Rule 23(a)(4).[7]See Maywalt v. Parker & Parsley Petroleum Co., 67 F.3d 1072, 1077-78 (2d Cir.1995) ("[C]lass certification may properly be denied where the class representatives ha[ve] so little knowledge of and involvement in the class action that they would be unable or unwilling to protect the interests of the class against the possibly competing interests of the attorneys." (internal quotations and citation omitted) (alteration in original)). Given our general disfavor of "attacks on the adequacy of a class representative based on the representative's ignorance," Baffa, 222 F.3d at 61, we do not conclude that the lower court abused its discretion in finding that the class representatives "are sufficiently knowledgeable and involved to adequately represent the putative class." In re Flag, 245 F.R.D. at 162.
Similarly, we reject Defendants' argument that the district court erred in including in the class '33 Act Plaintiffs who purchased common stock in the secondary market traceable to the Company's IPO as late as May 10, 2000.[8] Despite Defendants' evidence that on March 17, 2000 and March 23, 2000, Flag employees exercised "a significant amount of stock options" pursuant to the Company's Long Term-Incentive Plan ("LTIP"), the court concluded that since Defendants had produced no evidence that LTIP shares were actually sold in the market prior to the May 10, 2000 cut-off, it was "inclined to resolve the dispute in favor of plaintiffs." In re Flag, 245 F.R.D. at 173. Because we do not conclude that this factual determination constitutes clear error, we affirm this aspect of the certification order.
Finally, Defendants challenge the fairness of the briefing process below on due process grounds. We do not find that the lower court abused its "ample discretion" to limit both discovery and the extent of the hearing on Rule 23 requirements, In re IPO, 471 F.3d at 41, and we therefore also reject Defendants' due process challenge to the certification order.
CONCLUSION
For the reasons stated above, the district court's order granting class certification is affirmed with the exception of that portion of the order that includes in the class those individuals who sold their Flag stock prior to February 13, 2002. To the extent the certified class includes such individuals, that portion of the order is vacated, and the case is remanded to the district court for further proceedings.
NOTES
[*] The Honorable Robert W. Sweet, of the United States District Court for the Southern District of New York, sitting by designation.
[1] Citigroup served as the lead underwriter of the IPO, and the Individual Defendants all served as directors or officers of Flag around the time of the IPO.
[2] The "Rahl Complaint," filed in the Supreme Court of New York State, New York County, on November 19, 2003, by the Trustee of the Flag Litigation Trust, asserts various claims for breaches of fiduciary duties against several defendants, including several of the Individual Defendants named in this action. See Rahl v. Bande, 316 B.R. 127 (S.D.N.Y.2004).
[3] Coughlin, who purchased 250 shares in the IPO on February 23, 2000, and 100 shares in the market on July 3, 2001, brings claims under both the '33 and '34 Acts.
[4] Defendants also seek review of the district court's denial of its motion to dismiss the '33 Act Plaintiffs' claims. See In re Flag Telecom Holdings, Ltd. Sec. Litig., 411 F.Supp.2d 377. According to Defendants, we are permitted under Rule 23(f) to "address issues that should have resulted in the dismissal of some or all claims prior to class certification to the extent that such dismissal would have precluded class certification." Citigroup Br. at 25. We disagree. Defendants' interpretation of the scope of Rule 23(f), even in light of In re IPO, goes too far, and we therefore do not reach the lower court's motion to dismiss on this appeal. See also Regents of the Univ. of Cal. v. Credit Suisse First Boston (USA), Inc., 482 F.3d 372, 380 (5th Cir.2007) (acknowledging that although "[t]he fact that an issue is relevant to both class certification and the merits ... does not preclude review of that issue," "the text of [Rule 23(f)] makes plain that the sole order that may be appealed is the class certification").
[5] We do not take issue with the plausibility of Plaintiffs' "leakage" theory. Indeed, in Lentell, we explicitly acknowledged that loss causation can be established by a "corrective disclosure to the market" that "reveal[s] ... the falsity of prior recommendations." Lentell, 396 F.3d at 175 n. 4. And nowhere does either Dura or our precedent suggest that such disclosures must come from the Company itself.
[6] According to Plaintiffs' expert witness, the purpose of the event study was to "assess the reaction of Flag Telecom's share price to relevant news events." Hakala Decl. ¶ 15.
[7] We have already found that Hunter cannot serve as a class representative for reasons unrelated to his knowledge and competence. Thus, the remainder of our analysis concerns only Coughlin.
[8] Neither party disputes "that shares that are bought on the market after unregistered shares have entered the market cannot be traced back to the IPO." In re Flag, 245 F.R.D. at 173.
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335 F.2d 141
William ESBITT, as Receiver of the assets and property of First Discount Corp., Respondent,v.DUTCH-AMERICAN MERCANTILE CORP., Appellant.
No. 414.
Docket 28724.
United States Court of Appeals Second Circuit.
Argued April 10, 1964.
Decided July 14, 1964.
Eugene M. Parter, New York City, (Joseph Levine and Emil Weitzner, New York City, on the brief), for respondent.
Emanuel Becker, New York City (McLanahan, Merritt & Ingraham, New York City, on the brief), for appellant.
Before MOORE, SMITH and KAUFMAN, Circuit Judges.
J. JOSEPH SMITH, Circuit Judge.
1
The defendant appeals from a judgment of $25,055.79 entered against it in the United States District Court for the Southern District of New York, Irving Ben Cooper, District Judge, in a suit brought by the receiver of the First Discount Corporation to collect an indebtedness. The defendant concedes that it owed the $25,055.79 to the First Discount Corporation, but contends that (1) the District Court had no jurisdiction over the suit and (2) it should have been permitted to retain the $25,055.79 in order to indemnify it against possible future liability from a pending suit. We hold that the Court had jurisdiction and correctly denied set-off, and affirm the judgment.
2
The respondent receiver was appointed in the United States District Court for the Southern District of New York on June 1, 1961 by Judge Herlands in an action brought by the Securities and Exchange Commission to enjoin the First Discount Corporation permanently from using the mails or other interstate facilities for the fraudulent sale of securities. Judge Herlands' order directed the receiver to collect and take charge of "all the assets and property of, belonging to, or in the possession of * * * First Discount Corporation * * * and to hold the same subject to further order of this Court." Pursuant to this order, the receiver brought this action to collect all the indebtedness owed by the defendants.
3
All the parties are residents of New York, and since there is no diversity, the District Court had jurisdiction to entertain the receiver's suit only if it was ancillary to the SEC action. The defendant contends that a suit to collect a simple debt cannot be properly termed "ancillary" to the SEC action. We cannot agree. If the receiver's suit is to aid in the accomplishment of the ends sought and directed in the SEC action, it is ancillary to the main action for jurisdictional purposes. Pope v. Louisville, New Albany & Chicago Ry. Co., 173 U.S. 573, 577, 19 S.Ct. 500, 43 L.Ed. 814 (1899). Unfortunately, the pleadings in the SEC suit were not made part of the record below, but it seems reasonably clear from the judgment granting the injunction and appointing the receiver that one of the aims of the SEC suit was to protect investors who had already been defrauded by the practices of the First Discount Corporation. If the assets of the First Discount Corporation are not promptly marshalled to provide a fund from which defrauded investors may be at least partially reimbursed, there is a strong possibility that these assets will be dissipated or wasted. A primary purpose of appointing a receiver is to conserve the existing estate. Defendant's argument that there is a difference between conserving the estate and adding to it by collecting outstanding debts is specious. Outstanding debts are assets of the estate, and if not collected promptly, may become uncollectible.
4
The fallacy in the defendant's argument stems from its failure to view the aim of the SEC action as anything more than the enjoining of possible future violations. But in bringing an action for an injunction and the appointment of a receiver, the SEC is also concerned with "the protection of those who already have been injured by a violator's actions from further despoliation of their property or rights." SEC v. H. S. Simmons & Co., 190 F.Supp. 432, 433 (S.D. N.Y.1961). In protecting the investing public which has been defrauded from further losses, the District Court has broad equitable powers to direct the receiver to marshal the assets of the First Discount Corporation. See SEC v. Keller Corp., 323 F.2d 397 (7 Cir. 1963); SEC v. Fiscal Fund, Inc., 48 F.Supp. 712 (D.C. Del.1943); Los Angeles Trust Deed and Mortgage Exchange v. SEC, 285 F.2d 162 (9 Cir. 1961). These powers were exercised by Judge Herlands, and this suit by the receiver must be considered ancillary to the main action. We hold that the District Court had jurisdiction over the suit.
5
This is not to say that we approve the use of an equity receivership to perform the functions of the bankruptcy court. The record plainly indicates that the First Discount Corporation is hopelessly insolvent and is in the process (almost completed) of liquidation. We see no reason why violation of the Securities Act should result in the liquidation of an insolvent corporation via an equity receivership instead of the normal bankruptcy procedures, which are much better designed to protect the rights of interested parties. See Los Angeles Trust Deed & Mortgage Exchange v. SEC, supra, 285 F. 2d at 182; New England Coal & Coke Co. v. Rutland Ry. Co., 143 F.2d 179 (2 Cir. 1944). Were it not for this court's decision in Manhattan Rubber Mfg. Co. v. Lucey Mfg. Co., 5 F.2d 39 (2 Cir. 1925), from which we are reluctant to depart without full briefing, though it may possibly be distinguishable, we should feel compelled on our own motion to direct the District Court to order the filing of a bankruptcy petition. However, the receivership has progressed almost to completion without objection and it would apparently not be in the interests of the parties to direct that further proceedings be diverted into bankruptcy channels.
6
Defendant next contends that it should be permitted to retain the $25,055.79 in order to be indemnified if it is held liable to one Zimmerman in a suit now pending before the Supreme Court of New York. Zimmerman seeks to recover $11,686.12 in damages resulting from defendant's alleged conversion of 400 shares of Thiakol Chemical stock. Defendant claims that if it is held liable to Zimmerman, it was acting as First Discount Corporation's agent when it received the allegedly converted securities, and equity would allow a set-off because the First Discount Corporation is insolvent.
7
We see no merit in this contention. Even if we assume that the defendant is entitled to indemnity, the defendant has not yet incurred any liability and may never incur liability. The amount of possible liability is also uncertain. Though here it is well established that First Discount Corporation is insolvent, and where a plaintiff is insolvent, equity may permit a defendant to set off an unmatured claim to prevent injustice, American Surety Co. of N. Y. v. City of Akron, 95 F.2d 966, 970 (6 Cir. 1938), equity will not permit the set-off of a possible but unestablished and unliquidated liability such as the defendant's. Dunn v. Uvalde Asphalt Paving Co., 175 N.Y. 214, 218, 67 N.E. 439 (1903). Moreover, the nature of the allegations in the Zimmerman action indicate that if the defendant is held liable for converting securities, there is no reason equity should prefer the defendant over the defrauded creditors who will be benefited by the recovery of the entire $25,055.79.
8
The defendant's last ditch contention that the District Court abused its discretion in awarding interest on the judgment is patently without merit.
9
The judgment is affirmed.
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66 Mich. App. 594 (1976)
239 N.W.2d 427
PEOPLE
v.
THOMAS
Docket No. 23105.
Michigan Court of Appeals.
Decided January 8, 1976.
*595 Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, John A. Smietanka, Prosecuting Attorney, and Sally M. Zack, Assistant Prosecuting Attorney, for the people.
Norris J. Thomas, Jr., Assistant State Appellate Defender, for defendant.
Before: T.M. BURNS, P.J., and V.J. BRENNAN and M.F. CAVANAGH, JJ.
Leave to appeal denied, 396 Mich ___.
V.J. BRENNAN, J.
Defendant, Albert William Thomas, was charged with armed robbery. MCLA 750.529; MSA 28.797. On January 29, 1974, defendant pled guilty to the crime and was sentenced to life in prison on February 11, 1974.
The defendant was informed of his rights by the plea-taking court. He further indicated that his plea was voluntary and free from coercion. However, at the sentence proceedings the defendant stated that he wanted to withdraw his plea. Defendant stated he had pled guilty because "some officer" told him that the judge was angry with him, was going to "get him", and that it would be easier on him if he pled guilty. The sentencing court denied the defendant's request to withdraw the plea. Defense counsel then moved for a postponement so that defendant could offer proof of the alleged coercion. The court denied the motion and proceeded with sentence.
Defendant now appeals alleging: (1) the court abused its discretion in denying the motion for plea withdrawal, (2) the court should have sua sponte ordered a competency hearing, (3) the plea was involuntary because defendant was intoxicated *596 at the time of the plea, and his counsel was ineffective.
Under the liberal standard of plea withdrawal, defendant should be granted his motion for withdrawal if he can show coercion beyond mere allegation. People v Lewandowski, 394 Mich 529; 232 NW2d 173 (1975), People v Zaleski, 375 Mich 71; 133 NW2d 175 (1965). We, therefore, remand this case to the trial court for a hearing on the issue of coercion. People v Jackson, 13 Mich App 52; 163 NW2d 679 (1968). If the defendant cannot substantiate his claim, the plea shall stand. If there is evidence of coercion, the trial court shall then exercise its discretion with great liberality to determine whether the plea should be set aside.
We find the remaining issues completely without merit.
Remanded for proceedings consistent with this opinion.
M.F. CAVANAGH, J., concurred.
T.M. BURNS, P.J. (dissenting).
In accordance with my opinion in People v Cochrane, 40 Mich App 316; 198 NW2d 417 (1972), I would reverse and remand for an order allowing withdrawal of the plea and a new trial.
Our Supreme Court has recently reaffirmed its position that motions to withdraw should be granted where the request is not obviously frivolous. People v Lewandowski, 394 Mich 529; 232 NW2d 173 (1975).
I believe that the clear intention of the Supreme Court as expressed in Lewandowski, supra, is that in cases such as the one at bar, the cause should be remanded for trial, not for a hearing on the question of the voluntariness of defendant's plea.
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
MAY 2 2001
TENTH CIRCUIT
PATRICK FISHER
Clerk
JOHNNY AUSTIN,
Petitioner-Appellant,
No. 00-6453
v. (W. District of Oklahoma)
(D.C. No. 00-CV-1302-M)
JAMES L. SAFFLE, Warden,
Respondent-Appellee.
ORDER AND JUDGMENT *
Before HENRY, BRISCOE, and MURPHY, Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
This matter is before the court on Johnny Austin’s pro se request for a
certificate of appealability (“COA”). Austin seeks a COA so he can appeal the
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
district court’s dismissal of his 28 U.S.C. § 2254 petition. See 28 U.S.C. §
2253(c)(1)(A) (providing that no appeal may be taken from a final order
disposing of a § 2254 petition unless the petitioner first obtains a COA). Austin
also seeks to proceed in forma pauperis on appeal. Because Austin has not made
a substantial showing of the denial of a constitutional right, he is not entitled to a
COA and his appeal is dismissed. See id. § 2253(c)(2).
Austin was convicted in Oklahoma state court of manslaughter in the first
degree and child beating. It is clear from the record that Austin’s conviction
became final before April 24, 1996. Austin filed an application for post-
conviction relief with the state district court on December 26, 1995. The state
district court denied the application and the Oklahoma Court of Criminal Appeals
affirmed the denial on May 13, 1996. Austin did not file the instant § 2254
habeas petition until July 26, 2000. The petition was referred to a magistrate
judge for initial proceedings pursuant to 28 U.S.C. § 636(b)(1)(B).
On September 21, 2000, Respondent filed a motion to dismiss Austin’s
habeas petition and a brief in support thereof. Because Austin’s Oklahoma state
conviction became final prior to the enactment of the Antiterrorism and Effective
Death Penalty Act ("AEDPA"), Respondent argued that Austin’s § 2254 petition
should have been filed prior to April 24, 1997. See Adams v. LeMaster , 223 F.3d
1177, 1180 (10th Cir. 2000) (reiterating that a state prisoner generally has one
-2-
year from the effective date of the AEDPA to file a § 2254 habeas petition).
Respondent conceded that the one-year limitations period was tolled for a period
of nineteen days while Austin’s application for state post-conviction relief was
pending before the Oklahoma Court of Criminal Appeals, but argued that the §
2254 petition should, therefore, have been filed no later than May 12, 1997. See
Hoggro v. Boone , 150 F.3d 1223, 1226 (10th Cir. 1998) (holding that one-year
limitations period is tolled during the period of time petitioner spends properly
pursuing state post-conviction relief). Respondent then argued that Austin’s
petition was time-barred because it was not filed until July 26, 2000.
Austin filed a response to the motion to dismiss. In that response, he did
not assert that his petition was timely, but argued that the one-year AEDPA
statute of limitations should be equitably tolled because he had no access to
necessary legal materials until he was transferred to the Lawton Correctional
Facility in December 1999. Austin also made an unsupported allegation that he
was actually innocent of the crimes to which he pleaded guilty.
In her report and recommendation, the magistrate judge relied, in part, on
this court’s decision in Miller v. Marr , 141 F.3d 976, 978 (10th Cir. 1998), to
conclude that Austin had failed to identify any circumstances that would support
an equitable tolling of the limitations period. The report and recommendation
also noted that Austin’s § 2254 petition was filed more than seven months after
-3-
he obtained access to the legal materials at the Lawton Correctional Facility. The
magistrate concluded that Austin had not diligently pursued his federal claims
and, therefore, was not entitled to equitable tolling. See Marsh v. Soares , 223
F.3d 1217, 1220 (10th Cir. 2000) (holding equitable tolling “is only available
when an inmate diligently pursues his claims and demonstrates that the failure to
timely filed was caused by extraordinary circumstances beyond his control”).
Austin filed timely objections to the report and recommendation. Although
the district court considered Austin’s objections, the court adopted the report and
recommendation and dismissed Austin’s § 2254 petition.
In his application for a COA, Austin does not argue that the magistrate
judge miscalculated the one-year period. Instead, Austin renews the argument
made in his objection to the report and recommendation that his inability to
access legal materials supports the tolling of the one-year limitations period.
Before he is entitled to a COA, Austin must make a “substantial showing
of the denial of a constitutional right.” 28 U.S.C. § 2253(c)(2). Austin may
make this showing by demonstrating the issues raised are debatable among
jurists, a court could resolve the issues differently, or that the questions presented
deserve further proceedings. See Slack v. McDaniel , 529 U.S. 473, 483-84
(2000). This court has reviewed Austin’s application for a COA, his appellate
brief, the magistrate judge’s report and recommendation, the district court’s order
-4-
dated December 8, 2000, and the entire record on appeal. That review clearly
demonstrates the district court’s dismissal of Austin’s § 2254 petition as untimely
is not deserving of further proceedings or subject to a different resolution on
appeal. Accordingly, this court denies Austin’s request for a COA for
substantially those reasons set forth in the district court’s order and the
magistrate’s report and recommendation and dismisses this appeal. Austin’s
request to proceed on appeal in forma pauperis is granted .
ENTERED FOR THE COURT:
Michael R. Murphy
Circuit Judge
-5-
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117 Cal.Rptr.2d 1 (2002)
27 Cal.4th 413
40 P.3d 718
Barry KEENAN, Petitioner,
v.
SUPERIOR COURT of Los Angeles County, Respondent; Frank Sinatra, Jr., Real Party in Interest.
No. S080284.
Supreme Court of California.
February 21, 2002.
*4 Rohde & Victoroff and Stephen F. Rohde, Los Angeles, for Petitioner.
Dilan A. Esper; Peter J. Eliasberg and Mark D. Rosenbaum, Los Angeles, for ACLU Foundation of Southern California as Amicus Curiae on behalf of Petitioner.
Weil, Gotshal & Manges, R. Bruce Rich, Jonathan Bloom, Heather R. Goldstein, New York, NY, Josh A. Krevitt, Redwood Shores, and Christopher J. Cox, Springfield, VA, for The Association of American Publishers, Inc., The American Booksellers Foundation for Free Expression, Magazine Publishers of America, Inc., and PEN American Center as Amici Curiae on behalf of Petitioner.
No appearance for Respondent.
Corbett & Steelman, Richard B. Specter and Mark M. Monachino, Irvine, of Real Party in Interest.
Bill Lockyer, Attorney General, Richard M. Frank, Chief Assistant Attorney General, Carole Ritts Kornblum, Assistant Attorney General, Peter K. Shack and Kelvin C. Gong, Deputy Attorneys General, as Amici Curiae on behalf of Real Party in Interest.
BAXTER, J.
We confront a claim that California's "Son of Sam law" facially violates constitutional protections of speech by appropriating, as compensation for crime victims, all monies due to a convicted felon from expressive materials that include the story of the crime. We conclude that these provisions of the California statute are facially invalid under both the free speech clause of the First Amendment to the federal Constitution[1] as applied to the states through the Fourteenth Amendment, and the liberty of speech clause of the California Constitution (art. I, § 2, subd. (a)).[2]
The California law was first enacted in 1983 as Civil Code section 2224.1.[3] (Stats. 1983, ch. 1016, § 2, pp. 3581-3584.) In 1986, the law was renumbered as section 2225 (Stats.1986, ch. 820, §§ 7, 8, pp. 2730-2733), and it has since been amended on several occasions (see Stats.1992, ch. 178, § 2, p. 882; Stats.1994, ch. 556, § 1, p. 2823; Stats.1995, ch. 262, § 1; Stats.2000, ch. 261, § 2). As currently in effect, the law seeks to prevent a convicted felon, or a profiteer, from exploiting the felon's *5 crimes for financial gain while victims of crime go uncompensated.
One prong of the California statute, in effect since the law's inception, imposes an involuntary trust, in favor of damaged and uncompensated crime victims as "beneficiaries]," on a convicted felon's "proceeds" from expressive "materials" (books, films, magazine and newspaper articles, video and sound recordings, radio and television appearances, and live presentations) that "include or are based on" the "story" of a felony for which the felon was convicted, except where the materials mention the felony only in "passing ..., as in a footnote or bibliography." (§ 2225, subds.(a)(4), (6), (7), (9), (b)(1); see former § 2224.1, subds. (a)(4), (6), (7), (9), (b), Stats.1983, ch. 1016, § 2, p. 3581.) For convenience, we sometimes hereafter refer to this portion of the statute, governing proceeds from expressive materials that include the story of the crime, by its operative provision, section 2225, subdivision (b)(1) (section 2225(b)(1)).
More recent amendments to the California statute attack the financial exploitation of crime from a second, distinctly different angle. Since 1994, the law's involuntary trust provisions have also applied to "profits" received by the felon, or his or her representative, from the sale or transfer of any "thing" or "right," the value of which "is enhanced by the notoriety gained from the commission of a felony for which a convicted felon was convicted." (§ 2225, subd. (a)(10), italics added; see also id., subd. (b)(2).) In 2000, the involuntary trust provisions were further extended, with limited exceptions, to "profiteer[s] of the felony," i.e., "any person[s]" who derive income by selling memorabilia, property, rights, or things for values enhanced by their felony-related notoriety. (§ 2225, subds.(a)(3)(B), (10), (b)(2)). As necessary, we sometimes hereafter refer to this prong of the statute, governing profits from things sold for their felony-related notoriety value, by its operative provision, section 2225, subdivision (b)(2) (section 2225(b)(2)).[4]
In 1991, the United States Supreme Court held that a somewhat similar New York law violated the First Amendment. (Simon & Schuster, Inc. v. Members of N.Y. State Crime Victims Bd. (1991) 502 U.S. 105, 112 S.Ct. 501, 116 L.Ed.2d 476 (Simon & Schuster).) In provisions somewhat like California's section 2225(b)(1), the statute at issue confiscated, for the benefit of crime victims, all monies a criminal was due under contract with respect to a "reenactment" of the crime, or from the expression of his or her personal thoughts or feelings about the crime, in a film, broadcast, print, recording, or live performance format.
Finding the New York law facially invalid, the Simon & Schuster majority reasoned that the statute, as a direct regulation of speech based on content, must fall unless it satisfied a strict level of constitutional scrutiny. The New York law failed this test, said the majority, because although the state had a compelling interest in compensating crime victims from the fruits of crime, the statute at issue was not narrowly tailored to that purpose. (Simon & Schuster, supra, 502 U.S. 105, 121-123, 112 S.Ct. 501, 116 L.Ed.2d 476.)
The flaw most clearly identified by the Simon & Schuster majority was that the *6 New York statute was overinclusive. The majority noted two respects in which the New York law regulated speech too broadly for its compelling purpose. First, the law applied to expressive works in which one merely admitted crimes for which he or she had not been convicted. Second, it confiscated all profits from expressive works in which one made even incidental or tangential mention of his or her past crimes for nonexploitative purposes. (Simon & Schuster, supra, 502 U.S. 105, 121, 112 S.Ct. 501, 116 L.Ed.2d 476.)
California's analogous provision, section 2225(b)(1), similarly imposes a contentbased financial penalty on protected speech. Yet section 2225(b)(1), like its New York counterpart, fails to satisfy strict scrutiny because it, too, is overinclusive. Section 2225(b)(1) contains the fundamental defect identified in Simon & Schuster; it reaches beyond a criminal's profits from the crime or its exploitation to reach all income from the criminal's speech or expression on any theme or subject, if the story of the crime is included.
Though section 2225(b)(1), unlike the New York law, applies only to persons actually convicted of felonies, and states an exemption for mere "passing mention of the felony, as in a footnote or bibliography" (id., subd. (a)(7)), these differences do not cure the California statute's constitutional flaw. By any reasonable construction, the California statute is still calculated to confiscate all income from a wide range of protected expressive works by convicted felons, on a wide variety of subjects and themes, simply because those works include substantial accounts of the prior felonies.
Because we conclude, contrary to the Court of Appeal, that section 2225(b)(1) is invalid, we will reverse the judgment of the Court of Appeal.
FACTS
On July 8, 1998, Frank Sinatra, Jr. (Sinatra, Jr.), son of the late singer, filed a complaint in Los Angeles Superior Court. Named as defendants were Barry Keenan, Joseph Amsler, John Irwin, Peter Gilstrap, Columbia Pictures (a division of Sony Pictures Entertainment, Inc.), and New Times, Inc. (New Times).
As pertinent here, the complaint alleged as follows: In 1963, Keenan and Amsler, acting pursuant to a conspiracy with Irwin, kidnapped Sinatra, Jr., from his Nevada hotel room and drove him to Los Angeles, where he was held until his father paid a ransom. During his captivity, Sinatra, Jr., suffered economic loss, physical suffering, and emotional distress. Keenan, Amsler, and Irwin were later apprehended, tried, convicted of felony offenses, and incarcerated under California law.[5] Following their arrests, the kidnappers made media statements, since admitted to be false, that Sinatra, Jr., had conspired in his own kidnapping to extract money from his father. These defamatory statements caused further damage to Sinatra, Jr.'s business and reputation.
The complaint further alleged: In January 1998, Keenan and one or both accomplices arranged with Gilstrap, or with New Times (publisher of New Times Los Angeles, a tabloid magazine), for Gilstrap to interview Keenan about the kidnapping. *7 The purpose was to produce a story for sale to print, broadcast, and film media. Monies derived from exploiting the kidnapping story would be split among Gilstrap, New Times, and the kidnappers. An article entitled Snatching Sinatra, authored by Gilstrap, appeared in a January 1998 issue of New Times Los Angeles. In late January 1998 and thereafter, other magazines reported that Columbia Pictures had bought the motion picture rights to Snatching Sinatra for up to $1.5 million. In February 1998, citing section 2225, Sinatra, Jr., made demand on Columbia Pictures to withhold from the kidnappers, and from Gilstrap and New Times as the kidnappers' "representatives," any monies otherwise due such persons or entities for the motion picture rights. Columbia Pictures refused to do so without a court order.
The complaint asserted that under section 2225, all monies due to the kidnappers, or to their "representatives" Gilstrap and New Times, for preparation for sale of the story of Sinatra, Jr.'s, kidnapping, the sale of the rights to the story, or the sale of materials that included or were based on the story, were "proceeds" as defined by subdivision (a)(9) and "profits" as defined by subdivision (a)(10), and were thus subject to an involuntary trust in favor of Sinatra, Jr., a statutory "beneficiary" (id., subd. (a)(4)(A)). The complaint sought an order that the defendants, particularly Columbia Pictures and New Times, hold such present and future proceeds and profits in trust for Sinatra, Jr. It also sought an injunction to (1) prevent Columbia Pictures and New Times from paying such proceeds and profits to any other defendant, and (2) require that all such payments be made instead to Sinatra, Jr., to the extent of his damages or, in the alternative, to the superior court for distribution for the benefit of the victims of the kidnapping.
On August 5, 1998, after a hearing at which only Sinatra, Jr., Columbia Pictures, and New Times appeared, the trial court issued a preliminary injunction prohibiting Columbia Pictures, during the pendency of the action, from paying any monies to Keenan, Amsler, Irwin, or their representatives or assigns in connection with the motion picture rights to the story of Sinatra, Jr.'s, kidnapping.[6]
On November 19, 1998, Keenan first appeared in the action by filing, on his own behalf only, a demurrer to the complaint. At the same time, Keenan moved to dissolve the preliminary injunction. The demurrer asserted, among other things, that section 2225 was facially invalid under the speech clauses of the federal and state Constitutions. Keenan's constitutional attack was based solely on a comparison between section 2225 and the New York law struck down in Simon & Schuster, supra, 502 U.S. 105, 112 S.Ct. 501, 116 L.Ed.2d 476.
In this regard, Keenan noted that because the California statute, like its New York counterpart, targeted a criminal's income from telling the story of his crime, it penalized the content of speech, required strict scrutiny, and was not narrowly tailored to compensate crime victims from the profits of crime. Keenan urged that, by the standards set forth in Simon & Schuster, supra, 502 U.S. 105, 112 S.Ct. 501, 116 L.Ed.2d 476, the California statute was both underinclusive, because it reached only expressive activity, not other *8 sources of crime-related income, and overinclusive, because it penalized all expressive works by convicted felons which included more than passing mention of their crimes.
In response, Sinatra, Jr., asserted that the Simon & Schuster majority had only found New York's law overinclusive. Sinatra, Jr., argued that section 2225 solves the overinclusiveness problem identified in Simon & Schuster by covering only "convicted" felons and exempting expressive materials that contain only a "passing mention of [the] felony." Moreover, he contended, section 2225 is not underinclusive because it is precisely drawn to ensure that victims of crime are compensated before the felon profits from telling the story of their victimization.
On December 22, 1998, the trial court issued an order overruling Keenan's demurrer "for the reasons stated in [Sinatra, Jr.'s,] opposition papers." In the same order, the court denied Keenan's motion to dissolve the preliminary injunction, reiterating its findings, made when the injunction was granted, that "section 2225[is] not unconstitutional as written ... [and] ... was narrowly drafted to overcome the over-inclusive effects found by the Supreme Court" in Simon & Schuster.
On December 31, 1998, Keenan filed in the Court of Appeal the instant petition for mandate or other appropriate relief. The petition requested a writ directing the superior court to vacate its orders overruling his demurrer and granting the preliminary injunction, to enter a new order sustaining the demurrer without leave to amend, and to dissolve the preliminary injunction. On January 14, 1999, the Court of Appeal stayed proceedings in the trial court, ordered the parties to appear for oral argument on the merits of the petition, and called for the filing of a return and reply.[7]
The parties' briefs in the Court of Appeal, like those in the trial court, focused entirely on comparisons between California's Son of Sam law and the New York counterpart addressed in Simon & Schuster. Again Keenan claimed the California statute singled out expressive activity for regulation on the basis of content, required strict scrutiny, and was both overinclusive and underinclusive by the standards set in that case. Again Sinatra, Jr., urged that section 2225 solved the overinclusiveness problem identified in Simon & Schuster because, unlike the New York statute, California's law applied only to convicted felons and exempted expressive materials which made mere "passing mention" of the felony.
The Court of Appeal denied writ relief, concluding, among other things, that section 2225 does not infringe constitutional rights of speech. In this regard, the Court of Appeal accepted Sinatra, Jr.'s, arguments that section 2225 lacks the defects of overbreadth identified in Simon & Schuster, because it is limited to convicted felons and does not confiscate a felon's proceeds from expressive materials that contain mere "passing mention" of the felony.
The Court of Appeal declined to decide whether the California statute was impermissibly underinclusive. The court reasoned it need not do so because, contrary to Keenan's insistence, Simon & Schuster had not expressly found the New York statute underinclusive. Because Keenan "does not otherwise elaborate on the issue *9 of underinclusiveness," said the court, "[a]nd since [his] attack on section 2225 is limited to those issues considered in Simon & Schuster, our discussion of the statute is similarly limited." We granted review.[8] We now reverse.
DISCUSSION
In the late 1970's, New York was terrorized by serial killer David Berkowitz, popularly known as the Son of Sam. By the time Berkowitz was apprehended, publicity about the case had enhanced the value of the rights to his story. New York's Legislature sought to prevent Berkowitz and other notorious criminals from exploiting for profit the tales of their sensational crimes while their victims went uncompensated. The resulting statute, discussed in greater detail below, was dubbed the "Son of Sam law." (Simon & Schuster, supra, 502 U.S. 105, 108-110, 112 S.Ct. 501, 116 L.Ed.2d 476.) In 2000, the United States and over 40 states, including California, had some form of Son of Sam law. (See Kealy, A Proposal for a New Massachusetts Notoriety-for-Profit Law: The Grandson of Sam (2000) 22 W. New Eng. L.Rev. 1, 22; Comment, Son of Sam Laws: Killing Free Speech or Promoting Killer Profits? (1999) 20 Whittier L.Rev. 949, 953, & fns. 48, 49.)[9]
California's version, as pertinent here, provides that all past and future "proceeds" (§ 2225, subds.(a)(9), (b)(1)) paid or owing to a "convicted felon" (id., subds. (a)(1), (b)(1)) from the sale of expressive "materials"[10] or the rights thereto (§ 2225, subds.(a)(6), (b)(1)) are subject to an involuntary trust for designated "beneficiaries" (§ 2225(b)(1)) if the materials "include or are based on the story" of the felony (ibid.). A "convicted felon" is one "convicted ..., or found not guilty by reason of insanity" (id., subd. (a)(1)) of a felony, as defined by "any California or United States statute" (id., subd. (a)(2)), which was committed in California (id., subd. (a)(1)). "Story" means "a depiction, portrayal, or reenactment of a felony" but "shall not be taken to mean a passing mention of the felony, as in a footnote or bibliography." (Id., subd. (a)(7).) A "beneficiary" is one who has a legal claim against the convicted felon, including a survivorship or wrongful death claim, for physical, mental, or emotional injury, or pecuniary loss, caused by the felony. (Id., subd. (a)(4).)
The trust continues for five years from the conviction, or from the payment of any covered proceeds to the felon, whichever is later. (§ 2225(b)(1).) The felon's unpaid obligations for restitution, restitution and penalty fines, and crime-related attorney *10 fees have first priority against the trust. (Id., subd. (d).) Within the five-year trust period, beneficiaries may bring actions to recover their respective interests in the remaining funds (id., subd. (c)(1),(2)), and the filing of such an action extends the trust period until such actions are concluded (id., subd. (b)(1)). Each beneficiary's interest is an equitable share, given the funds available, of his or her recoverable damages from the crime, less any compensation already received from the felon or from the Restitution Fund (id, subds. (a)(5), (d)). Payment to the beneficiary may be ordered from proceeds already received by the felon and, as necessary, from proceeds to be received in the future. (Id, subd. (c)(3).)
Within one year after the conviction or the felon's receipt of covered proceeds, whichever is later (§ 2225, subd. (e)(2)), the Attorney General may also bring an action to impose an "express trust" on covered proceeds, thus requiring their placement in a bank depositary (id., subd. (e)(1); see also id., subd. (e)(3)), if he proves it is "more probable than not" that there are beneficiaries entitled to compensation for the felony (id., subd. (e)(3)). Either a beneficiary or the Attorney General may, in appropriate circumstances, obtain a preliminary injunction to prevent waste of proceeds subject to the involuntary trust. (Id, subd. (f)(1), (2).)
Funds subject to the trust, but not claimed by a beneficiary at the end of the trust period, do not revert to the felon's ownership. Instead, they must be transferred to the Controller for allocation to the Restitution Fund. (§ 2225(b)(1); see also id, subd. (e)(3).)
As indicated above, the United States Supreme Court struck down a similar New York law in Simon & Schuster, supra, 502 U.S. 105, 112 S.Ct. 501, 116 L.Ed.2d 476. We conclude the analysis of Simon & Schuster governs this case and renders section 2225(b)(1) invalid as well. Both the New York and California laws impose content-based financial penalties on protected speech. Thus they must, at a minimum, satisfy strict constitutional scrutiny. Both laws seek to serve compelling interests in preventing criminals from exploiting their crimes for profit, and in compensating crime victims from the profits of crime. Yet both laws are overinclusive for those purposes, because they confiscate all income from all expressive materials, whatever their general themes or subjects, that include significant discussions of their creators' past crimes.
Our reasoning requires, of course, a detailed examination of Simon & Schuster. The New York statute there at issue provided that if any person "accused or convicted of a crime in this state" was due money under contract with respect to a "reenactment" of the crime "`by way of a movie, book, magazine article, tape recording, phonograph record, radio or television presentation, [or] live entertainment of any kind,'" or for expressions of the person's thoughts or feelings about the crime, the contract must be reported to the New York State Crime Victims Board (New York Board), and the money due must be paid over to the New York Board to be placed in an escrow account, primarily for the benefit of victims who, within five years thereafter, won money judgments against the criminal. (Simon & Schuster, supra, 502 U.S. 105, 109, 112 S.Ct. 501, 116 L.Ed.2d 476; see N.Y. Exec. Law § 632-a(l), (4) (McKinney 1982 & 1991 supp.).) The statute defined "convicted" persons to include those who had "voluntarily and intelligently admitted" crimes for which they were not prosecuted. . (Simon & Schuster, supra, at p. 110, 112 *11 S.Ct. 501, italics omitted; N.Y. Exec. Law § 632-a(10)(b).)[11]
While the law was in effect, Simon & Schuster, Inc., contracted to finance and publish a book by Henry Hill, a former gangster turned government witness. The book would tell the story of Hill's organized crime career. After considerable investment of time and effort by Hill and his coauthor, the book, Wiseguy, was published in 1986. Its colorful account of Hill's many criminal exploits, and of life inside the Mafia, met with commercial and critical success.
When the New York Board learned of Wiseguy's publication, it invoked the Son of Sam law. After reviewing the book, and Simon & Schuster's contract with Hill, the New York Board determined that all monies paid or owed to Hill under the contract were subject to the statute's escrow provisions. Simon & Schuster was ordered to pay the New York Board all future sums due to Hill, and Hill was ordered to pay the New York Board all sums already remitted to him. Simon & Schuster filed a federal suit, seeking a declaration, under 42 United States Code section 1983, that the New York law was facially invalid under the First Amendment. The federal district court granted the New York Board's motion for summary judgment, and a divided court of appeals affirmed. (Simon & Schuster, supra, 502 U.S. 105, 115, 112 S.Ct. 501, 116 L.Ed.2d 476.)
The United States Supreme Court unanimously concluded that the judgment of the court of appeals must be reversed.[12] Six justices, in an opinion authored by Justice O'Connor, first noted that "[a] statute is presumptively inconsistent with the First Amendment if it imposes a financial burden on speakers because of the content of their speech. Leathers v. Medlock, 499 U.S. 439, 447, 111 S.Ct. 1438, 113 L.Ed.2d 494 (1991).... [¶] ... In the context of financial regulation, it bears repeating, as we did in Leathers, that the government's ability to impose content-based burdens on speech raises the specter that the government may effectively drive certain ideas or viewpoints from the marketplace. 499 U.S. at 448-449, 111 S.Ct. 1438. The First Amendment presumptively places this sort of discrimination beyond the power of the government." (Simon & Schuster, supra, 502 U.S. 105, 115-116, 112 S.Ct. 501, 116 L.Ed.2d 476.)
New York's Son of Sam law was a presumptively invalid content-based burden on speech, said the majority, because "[i]t singles out income derived from expressive activity for a burden the State places on no other income, ... is directed only at works with a specified content," and "plainly imposes a financial disincentive only on speech of a particular content." (Simon & Schuster, supra, 502 U.S. 105, 116, 112 S.Ct. 501, 116 L.Ed.2d 476.) Because the statute penalized speech on the basis of its content, the majority concluded, the law must survive "strict" constitutional scrutiny, i.e., "`the State must show that its regulation is necessary to serve a compelling state interest and is narrowly drawn *12 to achieve that end.' [Citation.]" (Id., at p. 118, 112 S.Ct. 501.)
The majority emphasized that the state had no compelling interest in shielding readers and victims from negative emotional responses to a criminal's public retelling of his misdeeds. Indeed, the majority observed, the protection of offensive and disagreeable ideas is at the core of the First Amendment. (Simon & Schuster, supra, 502 U.S. 105, 118,112 S.Ct. 501,116 L.Ed.2d 476.) On the other hand, the majority agreed, states do have compelling interests in "ensuring that victims of crime are compensated by those who harm them" (ibid.), "preventing wrongdoers from dissipating their assets before victims can recover" (ibid.), "ensuring that criminals do not profit from their crimes" (id., at p. 119, 112 S.Ct. 501), and transferring the fruits of crime from the criminals to their victims (id, at pp. 119-120, 112 S.Ct. 501). Moreover, the majority concluded it could "assume without deciding" that royalties from a criminal's book about his crimes, the form of income at issue in the case before it, "represent ] the fruits of crime." (Id., at p. 119, 112 S.Ct. 501.)
Of course, the majority observed, New York could not defend its statute by narrowly defining the interest at stake in terms of the actual operation of its law. New York claimed a compelling interest in preventing criminals from retaining the profits of storytelling about their crimes before their victims were compensated. However, the majority noted, the state could not show why it had a greater interest in compensating crime victims from the profits of such storytelling than from the criminal's other assets. "Nor [could the state] justif[y] ... a distinction between this expressive activity and any other activity in connection with its interest in transferring the fruits of crime from criminals to their victims." (Simon & Schuster, 502 U.S. 105, 119-120, 112 S.Ct. 501, 116 L.Ed.2d 476.) "In short," the majority concluded, "the State has a compelling interest in compensating victims from the fruits of the crime, but little if any interest in limiting such compensation to the proceeds of the wrongdoer's speech about the crime." (Id., at pp. 120-121, 112 S.Ct. 501.)
Accordingly, the majority reasoned, it must examine whether New York's statute was "narrowly tailored to advance the former, not the latter, objective." (Simon & Schuster, supra, 502 U.S. 105, 121, 112 S.Ct. 501, 116 L.Ed.2d 476.) The New York statute was not so tailored, the majority determined, for "[a]s a means of ensuring that victims are compensated from the proceeds of crime, the Son of Sam law is significantly overinclusive." (Ibid., italics added.) In the majority's view, two factors in particular illustrated the statute's overbreadth. First, "the statute applies to works on any subject, provided that they express the author's thoughts or recollections about his crime, however tangentially or incidentally. [Citation.]" (Ibid., italics in original.) Second, "the statute's broad definition of `person convicted of a crime' enables the Board to escrow the income of any author who admits in his work to having committed a crime, whether or not the author was ever actually accused or convicted. [Citation.]" (Ibid.)
"These two provisions," said the majority, "combine to encompass a potentially very large number of works. Had the Son of Sam law been in effect at the time and place of publication, it would have escrowed payment for such works as The Autobiography of Malcolm X, which describes crimes committed by the civil rights leader before he became a public figure; Civil Disobedience, in which Thoreau acknowledges his refusal to pay taxes *13 and recalls his experience in jail; and even the Confessions of Saint Augustine, in which the author laments `my past foulness and the carnal corruptions of my soul,' one instance of which involved the theft of pears from a neighboring [orchard]. [Citations.] Amicus Association of American Publishers, Inc., has submitted a sobering bibliography listing hundreds of works by American prisoners and ex-prisoners, many of which contain descriptions of the crimes for which the authors were incarcerated, including works by such authors as Emma Goldman and Martin Luther King, Jr. A list of prominent figures whose autobiographies would be subject to the statute if written is not difficult to construct: The list could include Sir Walter Raleigh, who was convicted of treason after a dubiously conducted 1603 trial; Jesse Jackson, who was arrested in 1963 for trespass and resisting arrest after attempting to be served at a lunch counter in North Carolina; and Bertrand Russell, who was jailed for seven days at the age of 89 for participating in a sit-down protest against nuclear weapons. The argument that a statute like the Son of Sam law would prevent publication of all of these works is hyperbolesome would have been written without compensationbut the Son of Sam law clearly reaches a wide range of literature that does not enable a criminal to profit from his crime while a victim remains uncompensated." (Simon & Schuster, supra, 502 U.S. 105, 121-122, 112 S.Ct. 501, 116 L.Ed.2d 476, fn. omitted, italics in original.)
In sum, said the majority, New York's Son of Sam law "has singled out speech on a particular subject for a financial burden that it places on no other speech and no other income. The State's interest in compensating victims from the fruits of crime is a compelling one, but the Son of Sam law is not narrowly tailored to advance that objective. As a result, the statute is inconsistent with the First Amendment." (Simon. & Schuster, supra, 502 U.S. 105, 123, 112 S.Ct. 501, 116 L.Ed.2d 476.)
In separate opinions, Justices Blackmun and Kennedy concurred in the judgment. Justice Blackmun opined that the New York law was underinclusive as well as overinclusive, and "we should say so." (Simon & Schuster, supra, 502 U.S. 105, 123-124, 112 S.Ct. 501, 116 L.Ed.2d 476 (cone, opn. of Blackmun, J.).) Justice Kennedy suggested that a statute is unconstitutional per se if it regulates the specific content of speech which is neither defamatory, nor tantamount to a criminal act, nor an impairment of some other constitutional right, nor an incitement to lawless action, nor calculated to bring about an imminent harm the state has the substantive power to prevent. A statute that regulates the content of speech beyond these narrow limits, said Justice Kennedy, cannot be saved by finding that it is narrowly tailored to serve a compelling state interest. (Id., at pp. 124-128, 112 S.Ct. 501 (cone, opn. of Kennedy, J.).)[13]
In his efforts to distinguish section 2225(b)(1), Sinatra, Jr., first makes a cursory argument that California's statute, unlike New York's, is not a presumptively invalid content-based regulation of speech. The effort must fail. Section 2225(b)(1), like the New York statute at issue in Simon & Schuster, places a direct financial *14 disincentive on speech or expression about a particular subject. The California statute explicitly targets and confiscates a convicted felon's proceeds from books, films, articles, recordings, broadcasts, interviews, or performances that include the story of the felon's crime. While certain classes of speechobscenity, fighting words, some defamationmay be subject to viewpoint-neutral regulation because of their directly injurious nature (see, e.g., R.A.V. v. St. Paul (1992) 505 U.S. 377, 382-390, 112 S.Ct. 2538, 120 L.Ed.2d 305; Chaplinsky v. New Hampshire (1942) 315 U.S. 568, 571-572, 62 S.Ct. 766, 86 L.Ed. 1031), discussions of crime have never been included in this limited category.[14]
Sinatra, Jr., asserts that laws imposing financial penalties on speech do not necessarily violate the First Amendment. He cites cases for the principle that the government need not subsidize the exercise of free speech or other constitutional rights. (E.g., Lyng v. Automobile Workers (1988) 485 U.S. 360, 108 S.Ct. 1184, 99 L.Ed.2d 380 [denial of food stamps to household with striking worker]; Regan v. Taxation With Representation of Wash. (1983) 461 U.S. 540, 103 S.Ct. 1997, 76 L.Ed.2d 129 [denial of tax exemption to organizations engaged in lobbying]; Harris v. McRae (1980) 448 U.S. 297, 100 S.Ct. 2671, 65 L.Ed.2d 784 [denial of federal funds to reimburse abortions].) But he fails to show how section 2225(b)(1), by confiscating income from speech based on its content, departs from the presumptively unconstitutional form of statute at issue in Simon & Schuster.
Nor does it matter that New York's law focused on media entities contracts for crime stories, while section 2225(b)(1) targets crime story proceeds in the hands of the criminal himself. As Simon & Schuster noted with respect to the facts in that case: "Whether the First Amendment `speaker' is considered to be Henry Hill, whose income the statute places in escrow because of the story he has told, or Simon & Schuster, which can publish books about crime with the assistance of only those criminals willing to forgo remuneration for at least five years, the statute plainly imposes a financial disincentive only on speech of a particular content." (Simon & Schuster, supra, 502 U.S. 105, 116, 112 S.Ct. 501, 116 L.Ed.2d *15 476.) "The government's power to impose content-based financial disincentives on speech surely does not vary with the identity of the speaker" (Simon & Schuster, supra, at p. 117, 112 S.Ct. 501), and section 2225(b)(1), like the New York statute, "establishes a financial disincentive to create or publish works with a particular content" (Simon & Schuster, supra, at p. 118, 112 S.Ct. 501, italics added).[15]
Section 2225(b)(1) is thus a suspect content-based regulation of speech. As such, the section is unconstitutional unless, at a minimum, it is narrowly tailored to serve compelling state interests. (Simon & Schuster, supra, 502 U.S. 105, 118, 112 S.Ct. 501, 116 L.Ed.2d 476; Sable Communications of Cal, Inc. v. FCC (1989) 492 U.S. 115, 126, 109 S.Ct. 2829, 106 L.Ed.2d 93.) In applying this standard, we must first determine what, if any, such compelling interests section 2225(b)(1) seeks to serve.
By its terms, section 2225(b)(1) confiscates, for the benefit of uncompensated victims of crime, sums due or owing to a convicted felon from expressive materials that include the story of the felony. It thus appears the purpose of section 2225(b)(1) is to assure that the "fruits" of one's crimesin this case, proceeds from exploiting the story of those crimeswill be used to compensate crime victims.
Statements of legislative intent confirm this inference. When the predecessor of section 2225(b)(1) was adopted in 1983, the Legislature declared, as justification for the law, that "[v]ictims of felonies have a special relationship to proceeds from the sale of stories about those felonies which are written by persons convicted of committing them." (Stats.1983, ch. 1016, § 1, p. 3581.) It further recited that the new law "amplifies [and] supplements [Civil Code] sections 2224 [making one an involuntary trustee, for the benefit of the true owner, of any thing gained by fraud, accident, mistake, undue influence, violation of trust, or other wrongful act] and 3517 [confirming the duty to compensate for injury or damage caused by one's legal wrong]." (Id., § 3, p. 3584.) In connection with more recent amendments to section 2225, the Legislature asserted, in a paraphrase from Simon & Schuster, that "[t]he state has a compelling interest in ensuring that convicted felons do not profit from their crimes and that the victims of crime are compensated by those who harm them." (Stats.2000, ch. 261, § 1, subd. (b)).
Though there is no compelling interest in targeting a criminal's storytelling proceeds in particular for the purpose of compensating crime victims (Simon & Schuster, supra, 502 U.S. 105, 119-120, 112 S.Ct. 501, 116 L.Ed.2d 476), the state does have a compelling interest in using the fruits of crime generally for that purpose. (Id., at pp. 118-121, 112 S.Ct. 501.) We may assume, in this regard, that the fruits *16 of crime include a criminal's proceeds from exploiting the story of the crime. (Id., at p. 119, 112 S.Ct. 501.) The question thus arises whether section 2225(b)(1), within its sphere of operation, is narrowly tailored to ensure that the fruits of crime are used to compensate the victims of crime.
Of course, to be narrowly tailored does not require "that there be no conceivable alternative, but only that the regulation not `burden substantially more speech than is necessary to further the government's legitimate interests' [citation]." (Board of Trustees, State Univ. of N.Y. v. Fox (1989) 492 U.S. 469, 478, 109 S.Ct. 3028, 106 L.Ed.2d 388.) We examine whether section 2225(b)(1) meets this test.[16]
Keenan urges that section 2225(b)(1) is underinclusive, because it confiscates profits from expressive activity, i.e., storytelling about one's crimes, while leaving undisturbed other gains and profits the criminal might realize from the crimes or their exploitation. Portions of the majority's discussion in Simon & Schuster, supra, 502 U.S. 105, 112 S.Ct. 501, 116 L.Ed.2d 476, imply such a flaw in the New York statute there at issue. At several points, the majority stressed that the statute singled out a criminal's profits from expressive activity to the exclusion of all other crime-related profits, and suggested that the state could demonstrate no compelling interest in such a distinction when fashioning a law to compensate crime victims from the fruits of crime. (Id, at pp. 116, 119-121, 123, 112 S.Ct. 501.) Justice Blackmun suggested this was tantamount to a conclusion that the New York statute was underinclusive. (Id, at pp. 123-124, 112 S.Ct. 501 (cone. opn. of Blackmun, J.).)
However, having determined that the New York law was overinclusive, the high court expressly stated it need not decide whether the law was underinclusive as well. (Simon & Schuster, supra, 502 U.S. 105, 122, fn. *, 112 S.Ct. 501, 116 L.Ed.2d 476). Noting that Keenan's attack on the California statute was focused primarily on Simon & Schuster, the instant Court of Appeal similarly refused to address the issue of underinclusiveness. Because we hereafter conclude that California's law, like New York's, is overinclusive in any event, we pursue a similar course.
*17 Indeed, any conclusion that the New York statute was underinclusive might not apply to California's law. As noted above, the California statute, unlike New York's, does confiscate at least one additional category of a criminal's crime-related profits, those derived from sales of memorabilia, property, things, or rights for a value enhanced by their crime-related notoriety value. (§ 2225(b)(2).) In the posture of this case, and lacking further development of the issue by the parties in their briefs, we need not and do not decide whether the California statute, which includes but reaches beyond speech-related profits, is underinclusive.
We are persuaded, however, that section 2225(b)(1), like the New York law at issue in Simon & Schuster, is overinclusive and therefore invalid. As did the New York statute, section 2225(b)(1) penalizes the content of speech to an extent far beyond that necessary to transfer the fruits of crime from criminals to their uncompensated victims. Even if the fruits of crime may include royalties from exploiting the story of one's crimes, section 2225(b)(1) does not confine itself to such income. Instead, it confiscates all a convicted felon's proceeds from speech or expression on any theme or subject which includes the story of the felony, except by mere passing mention. By this financial disincentive, section 2225(b)(1), like its New York counterpart, discourages the creation and dissemination of a wide range of ideas and expressive works which have little or no relationship to the exploitation of one's criminal misdeeds.
In at least one respect, the involuntary trust provision of section 2225(b)(1) operates more harshly against expressive materials that depict the creator's past crimes than did the escrow account provided for by the New York law at issue in Simon & Schuster. Under the New York statute, proceeds from a crime story contract were to be turned over to the New York Board for placement in escrow, but if, at the end of five years, no valid claims of the criminal's victims or creditors were pending, remaining funds in the account were returned to the criminal. (Simon & Schuster, supra, 502 U.S. 105, 109, 112 S.Ct. 501, 116 L.Ed.2d 476; see N.Y. Exec. Law § 632 a(4).) Under section 2225(b)(1), by contrast, any entrusted amounts not subject to legitimate individual claims at the end of the five-year trust period are turned over to the Controller for allocation to the Restitution Fund.[17]
*18 Sinatra, Jr., nonetheless urges that two features of section 2225(b)(1) cure the overinclusiveness problem identified in Simon & Schuster. First, he notes, section 2225(b)(1), unlike New York's law, applies only to persons actually found guilty of felonies committed in this state. (§ 2225, subd. (a)(1), (2).) Thus, Sinatra, Jr., points out, California's statute, unlike New York's, presents no danger that an innocent person will be penalized, or that income from an expressive work will be confiscated simply for inclusion of a past offense that was minor, or for which the work's creator was never prosecuted. Second, Sinatra, Jr., observes, section 2225(b)(1) applies only to expressive materials that include the "story" of a felony for which one was convicted, and exempts mere "passing mention of the felony, as in a footnote or bibliography." (Id., subd. (a)(7).) These restrictions, Sinatra, Jr., insists, negate Simon & Schuster's concern, with respect to the New York statute, that all profits from an expressive work would be confiscated though the work mentioned a past offense only "tangentially or incidentally." (Simon & Schuster, supra, 502 U.S. 105, 121, 112 S.Ct. 501,116 L.Ed.2d 476.)
We are not persuaded. In Simon & Schuster, the Supreme Court illustrated the overbroad sweep of the New York statute by showing that it encompassed even minor, unprosecuted offenses or mere "tangential[ ] or incidental ]" mention of past crimes in a larger context. (Simon & Schuster, supra, 502 U.S. 105, 121, 112 S.Ct. 501, 116 L.Ed.2d 476.) But we do not read Simon & Schuster as suggesting that a statute which exhibited marginal narrowing in these particular regards would necessarily pass constitutional muster.
Instead, the court's concern was with the essential values of the First Amendment. As the court's lengthy discussion discloses, the vice of the New York law was that in order to serve a relatively narrow interestcompensating crime victims from the fruits of crimethe statute targeted, segregated, and confiscated all income from, and thus unduly discouraged, a wide range of expressive works containing protected speech on themes and subjects of legitimate interest, simply because material of a certain contentreference to one's past crimeswas included.
Thus, the California statute's limitation to felony convictions does not suffice to avoid an overbroad infringement of speech. As Simon & Schuster made clear, one motivated in part by compensation might discuss his or her past crimes, including those that led to felony convictions, in many contexts not directly connected to exploitation of the crime. One might mention past felonies as relevant to personal redemption; warn from experience of the consequences of crime; critically evaluate one's encounter with the criminal justice system; document scandal and corruption in government and business;[18] describe the conditions of prison life; or provide an inside look at the criminal underworld.
Mention of one's past felonies in these contexts may have little or nothing to do with exploiting one's crime for profit, and thus with the state's interest in compensating crime victims from the fruits of crime. Yet section 2225(b)(1) entrusts and permanently confiscates all income, whenever *19 received, from all expressive materials, whatever their subject, theme, or commercial appeal, that include a substantial description of such offenses, whatever their nature and however long in the past they were committed.[19] Thus, even as so limited to felony convictions, section 2225(b)(1) is not narrowly tailored to achieve the compelling interests it purports to serve.
As indicated above, the Simon & Schuster majority also found overbreadth in the New York statute because it confiscated profits from expressive works that "expressed] the author's thoughts or recollections about his crime, however tangentially or incidentally." (Simon & Schuster, supra, 502 U.S. 105, 121, 112 S.Ct. 501, 116 L.Ed.2d 476, italics added.) Sinatra, Jr., urges that the California statute avoids this defect because it applies only to expressive materials containing the "story" of the felonyi.e., a "depiction, portrayal, or reenactment" of the criminal episode (§ 2225, subd. (a)(7)), and because it expressly exempts mere "passing mention of the felony, as in a footnote or bibliography" (ibid.). Thus, Sinatra, Jr., suggests, the California statute applies only when an expressive work provides narrative detail about a felony for which the work's author or creator was convicted, and does not discourage mere acknowledgement of a prior felony conviction in the context of another subject.
The Attorney General echoes this view, suggesting that a "story," as defined by the section 2225, subdivision (a)(7), is a "vivid" depiction, portrayal, or reenactment. Further, the Attorney General suggests, the exemption is for "passing mention ..., as in a footnote or bibliography" (ibid., italics added), demonstrating that the example given is illustrative only, and that other forms of "passing mention" are also exempt.
These arguments do not convince us that section 2225(b)(1) focuses with sufficient precision on the fruits of crime, while leaving other speech-related income undisturbed. Simon & Schuster illustrated the overbreadth of the New York statute by observing that it reached even incidental and tangential mention of past crimes, but nothing in Simon & Schuster suggests the New York law could have cured its overinclusive effect simply by providing an exemption for tangential or incidental references. Moreover, Simon & Schuster neither stated nor implied that the federal Constitution might allow confiscation, on behalf of crime victims, of all proceeds from any expressive work that includes a descriptive account, or even a vivid account, of a past crime committed by the author.
Such arbitrary demarcation lines do not comport with the basic rationale of Simon & Schuster. A statute that confiscates all profits from works which make more than a passing, nondescriptive reference to the creator's past crimes still sweeps within its ambit a wide range of protected speech, discourages the discussion of crime in nonexploitative contexts, and does so by means not narrowly focused on recouping profits from the fruits of crime.
*20 Indeed, Keenan, joined by his amici curiae, urges that the "passing mention" exemption is so imprecise and unclear that it constitutes an impermissibly vague basis for the censorship of protected speech. (Grayned v. City of Rockford (1972) 408 U.S. 104, 109, 92 S.Ct. 2294, 33 L.Ed.2d 222; see also Reno v. American Civil Liberties Union (1997) 521 U.S. 844, 874, 117 S.Ct. 2329, 138 L.Ed.2d 874.) We need not resolve the vagueness issue, because we are persuaded that, by any reasonable interpretation, the statute remains overinclusive. Certainly the statutory definition of "story" includes any substantial account of the facts and circumstances of a past felony which led to conviction, and the "passing mention" exemption would not provide safe harbor to materials containing such a substantial account. But there are multiple contexts in which expressive materials, with diverse subjects and themes unrelated to the exploitation of one's crimes, might include substantial accounts of those episodes.
Had section 2225(b)(1) been in effect at the time and place of publication, the statute would have applied to numerous works by authors whose discussions of larger subjects make substantial, and often vividly descriptive, contextual reference to prior felonies of which they were convicted.[20] A statute which operates in this fashion disturbs or discourages protected speech to a degree substantially beyond that necessary to serve the state's compelling interest in compensating crime victims from the fruits of crime. Accordingly, we conclude, in conformity with Simon & Schuster, that section 2225(b)(1) is facially invalid under the First Amendment to the United States Constitution.
We reach a similar result under the liberty of speech clause of the California Constitution (art. I, § 2, subd. (a)).[21]*21 The California provision provides similar, and sometimes greater, protection of speech than the First Amendment (e.g., Los Angeles Alliance for Survival v. City of Los Angeles (2000) 22 Cal.4th 352, 366-367 & fn. 12, 93 Cal.Rptr.2d 1, 993 P.2d 334), and neither party suggests any reason why it should provide lesser protection under the circumstances of this case.[22]
CONCLUSION
The trial court overruled Keenan's demurrer to Sinatra, Jr.'s, complaint, reasoning that the storytelling provision of California's statute (§ 2225(b)(1)), on which the complaint is solely based (see fn. 22, ante ), is not unconstitutional. The Court of Appeal affirmed on similar grounds. Because we have concluded, contrary to both lower courts, that section 2225(b)(1) is invalid, we must reverse the judgment of the Court of Appeal.
The judgment of the Court of Appeal is reversed, and the cause is remanded for further proceedings consistent with the views expressed in this opinion.
GEORGE, C.J., KENNARD, WERDEGAR, CHIN, and MORENO, JJ., concur.
Concurring Opinion by BROWN, J.
The majority correctly observes Civil Code section 2225, subdivision (b)(1),[1] shares the essential constitutional flaws condemned in Simon & Schuster, Inc. v. Members of N. Y. State Crime Victims Bd. (1991) 502 U.S. 105, 112 S.Ct. 501, 116 L.Ed.2d 476 (Simon & Schuster). Lest it seem the moral of the story is crime does pay, I write separately to dispel the understandable misconception that every "Son of Sam" law is unconstitutional. A properly drafted statute can separate criminals from profits derived from their crimes *22 while complying with the First Amendment.
The Simon & Schuster court recognized the fundamental difference between works like The Confessions of Saint Augustine or Letter from Birmingham Jail and a ghostwritten work entitled Snatching Sinatra. In the former examples, it is the public prominence, fame, wit, passion and eloquence of the authors that make these stories valuable. The "crimes" caused negligible harm to any actual victim and added nothing to the marketability of the stories. In contrast, Mr. Keenan's crime involved both a serious harm and is the source of his work's profitability; judging by the title of his literary effort, it is the celebrity status of his victim that makes the story noteworthy.
Notwithstanding today's decision, the state may constitutionally seize any asset of a criminal to redress the harm inflicted upon his victim. Additionally, the state may seize the fruits of the crime to render it unprofitable. For some works, like The Autobiography of Malcolm X, it may be difficult to determine the extent to which royalties result from the author's criminal involvement or his literary skill. But the existence of hard cases that might win an as-applied challenge does not mean all such laws are facially unconstitutional. The First Amendment protects schlock journalism as well as great literature. Thus, Mr. Keenan has every right to tell his story. That does not mean the First Amendment guarantees he can keep the money. And therein lies the tale.
I.
In Simon & Schuster, supra, 502 U.S. at pages 118-119, 112 S.Ct. 501, the United States Supreme Court found New York's law could further two compelling state interests, which reflect the notion that crime should neither impoverish the victim nor enrich the criminal. Toward the former imperative, the court recognized the compelling interest in "ensuring that victims of crime are compensated by those who harm them." (Id. at p. 118, 112 S.Ct. 501.) Toward the latter end, the court acknowledged the compelling interest in "ensuring that criminals do not profit from their crimes." (Id. at p. 119, 112 S.Ct. 501.) The fulfillment of these interests restores both victim and criminal to the status quo ante and nullifies the tangible effects of the crime.
Simon & Schuster invalidated the New York law, however, because it seized speech-generated revenues without necessarily serving either state interest. "Should a prominent figure write his autobiography at the end of his career, and include ... a brief recollection of having stolen ... a nearly worthless item ... the Board would control his entire income ...." (Simon & Schuster, supra, 502 U.S. at p. 123, 112 S.Ct. 501.) Because the book's popularity would be due to the author's lawful prominence rather than his (perhaps previously undiscovered) crime, the author's income would not be a fruit of the crime, and thus seizure would not serve the antiprofit interest. Since the stolen item was nearly worthless, seizure would not serve the compensation interest. Accordingly, the court found the law "significantly overinclusive." (Id. at p. 121, 112 S.Ct. 501.) A properly structured statute could avoid this overinclusivity by seizing only assets that would compensate the victim or render crime unprofitable.
The hypothetically prominent figure who mentions a minor theft in his autobiography bears a strong resemblance to Saint Augustine, and very little to defendant. Defendant's kidnapping created more than trivial harm, and it appears the notoriety of his criminal conduct is substantially responsible for the salability of his literary *23 efforts. Thus, seizure of defendant's royalties serves one or both of the compelling state interests. If so, the state may constitutionally distinguish between Snatching Sinatra and The Confessions of Saint Augustine.
II.
The constitutionality of seizing a criminal's assets to compensate his victims is beyond dispute. As Simon & Schuster observed, every state has a body of tort law serving this exact interest. (Simon & Schuster, supra, 502 U.S. at p. 118, 112 S.Ct. 501.) To effect compensation, it is immaterial whether the funds come from the fruits of crime or the defendant's other assets.
Although compensation may have been a goal of New York's law, it failed to achieve it constitutionally. The law seized only those assets generated by the offender's storytelling. The problem was not the law's underinclusivity per se; after all, a statute need not solve every problem to be constitutional. A law would be underinclusive if it granted the victim only a partial share of the profits or compensation only up to a maximum sum.[2] These limitations, however, would not create the constitutional defect cited in Simon & Schuster: the content-based nature of the speech restriction.
The high court deemed the law presumptively unconstitutional because it imposed a financial burden on speakers due to the content of their speech. (Simon & Schuster, supra, 502 U.S. at pp. 115-116, 112 S.Ct. 501.) The New York statute "singles out income derived from expressive activity for a burden the State places on no other income, and it is directed only at works with a specified content." (Id. at p. 116, 112 S.Ct. 501.) The dissenting opinion of Judge Newman in the court below demonstrated this content-based discrimination. (Simon & Schuster, Inc. v. Fischetti (2d Cir.1990) 916 F.2d 777, 784 (Fischetti) (dis. opn. of Newman, J.).) Judge Newman observed the New York State Crime Victims Board applied the law to the autobiography of Jean Harris, who had killed "`Scarsdale Diet' Doctor Herman Tarnower" (Simon & Schuster, at p. 111, 112 S.Ct. 501) because the book referred to the homicide in two chapters. (Fischetti, at p. 785.) If her book had concerned only the conditions at her prison, her royalties, though enhanced by the notoriety of her crime, would have been protected from seizure. (Ibid.) The distinction between the treatment of the actual book and the hypothetical book shows how "[t]he Son of Sam law establishes a financial disincentive to create or publish works with a particular content." (Simon & Schuster, at p. 118, 112 S.Ct. 501.)
The content-based discrimination triggered strict scrutiny, whereby the state must show the law is narrowly drawn to further a compelling state interest. (Simon & Schuster, supra, 502 U.S. at p. 118, 112 S.Ct. 501.) But New York limited the law's reach to "`storytelling'" only; the court found no rational reason "why the State should have any greater interest in compensating victims from the proceeds of such `storytelling' than from any of the criminal's other assets." (Id. at p. 119, 112 S.Ct. 501.) The content-based limitation thus not only created the need to establish *24 a compelling interest, it also rendered the state's interest less than compelling: "the State has a compelling interest in compensating victims from the fruits of the crime, but little if any interest in limiting such compensation to the proceeds of the wrongdoer's speech about the crime." (Id. at pp. 120-121, 112 S.Ct. 501.) A law that shields assets such as Ms. Harris's home or stock portfolio from a compensation order hardly serves that interest.
The high court's reasoning shows that a law without this limitation would likely survive review, because the law would not be content based (thus avoiding strict scrutiny) and the law would narrowly serve the compelling interest of victim compensation, and thus, a fortiori, survive a lesser level of scrutiny. The Rhode Island Supreme Court discussed the validity of such a broader law in Bouchard v. Price (R.I.1997) 694 A.2d 670 (Bouchard)[3] "Neither plaintiffs nor the Attorney General justified the act's applicability solely to expressive activity. The state's compelling interest in compensating victims from the proceeds of crime would be better served, for example, by making available to a victim all the criminal's assets, however and wherever derived. Such an expansion of the resources potentially available to a victim would avoid the statute's Achilles' heel of singling out only expressive activity for a special burden. We note that victims of a crime may normally bring a civil action against the offender to recover damages. After a judgment has been obtained, a victim may proceed against the defendant's assets whether or not these assets represent royalties obtained from the commercial exploitation of the crime. The enforcement of such a civil judgment against a defendant's assets following a personal injury or property loss has not heretofore presented a First Amendment problem." (Bouchard, at pp. 677-678, fn. omitted.) Indeed, Simon & Schuster itself approved of New York's content-neutral "statutory provisions for prejudgment remedies and orders of restitution." (Simon & Schuster, supra, 502 U.S. at p. 118, 112 S.Ct. 501), and the majority likewise observes the propriety of content-neutral seizure of a defendant's assets to compensate a victim. (Maj. opn., ante, 117 Cal. Rptr.2d at p. 20, fn. 21, 40 P.3d at p. 734.)
A state may thus seize a defendant's assets in a content-neutral manner to ensure compensation. "Simon & Schuster does not ... stand for the proposition that the government cannot recoup the proceeds of expressive activity relating to crime. Rather, the government cannot single out those proceeds for special treatment while ignoring other assets." (United States v. Seale (3d Cir.1994) 20 F.3d 1279, 1285, fn. 7.) Courts may thus constitutionally order restitution from sources including, but not limited to, the defendant's income from storytelling. (Ibid.; U.S. v. Jackson (5th Cir.1992) 978 F.2d 903, 915.) The law may prevent a criminal from enjoying any of his wealth while his victim remains uncompensated.
III.
The state may also pursue the compelling interest of depriving criminals of their *25 profits. New York's law was defective in this regard; it did not fully deprive criminals of their profits, only those profits resulting from storytelling. If Jean Harris exploited her criminal notoriety by writing a book, the state could confiscate those royalties. If instead of telling her story she chose to exploit her notoriety by charging $25 for underwear depicting the "Scarsdale Diet" logo with a red slash through it,[4] these royalties would be protected from seizure. The law's message was not that crime, doesn't pay but that speaking about crime doesn't pay. Deterring crime is a compelling state interest, deterring speech is not. The disparate treatment accorded the income from her book and from the hypothetical merchandise reveals the discriminatory nature of the New York law.
Furthermore, the discrimination undermined the compelling nature of the interest served by the law. The state could not "offer any justification for a distinction between [storytelling] and any other activity in connection with its interest in transferring the fruits of crime from criminals to their victims." (Simon & Schuster, supra, 502 U.S. at pp. 119-120, 112 S.Ct. 501.) There is a compelling interest in depriving criminals of their profits, but little if any interest in limiting such deprivation to the proceeds of the wrongdoer's storytelling. (See id. at pp. 120-121, 112 S.Ct. 501.)
Whether the law pursues the compensation or antiprofit interest, a limitation on the law's scope to storytelling is the achilles' heel of a Son of Sam provision. Virginia law, therefore, bars a defendant from exploiting her criminal notoriety through any means. It seizes "[a]ny proceeds or profits received or to be received directly or indirectly by a defendant or a transferee of that defendant from any source, as a direct or indirect result of his crime or sentence, or the notoriety which such crime or sentence has conferred upon him." (Va.Code Ann. § 19.2-368.20.) Regardless of whether a Virginia criminal profited by selling her account of the crime, her autograph,[5] or her furniture for an exorbitant price,[6] she could not enjoy such revenues under this law.[7]
*26 Section 2225, subdivision (b)(2) similarly avoids content discrimination in its seizure of profits. In conjunction with section 2225, subdivision (a)(10), it authorizes seizure of "all income from anything sold or transferred by the felon ... including any right, the value of which thing or right is enhanced by the notoriety gained from the commission of a felony...." The statute is indifferent to the thing's expressive or nonexpressive character, and if expressive, its content. The majority correctly observes section 2225, subdivision (b)(2) is "clearly severable" from subdivision (b)(1) (maj. opn., ante, 117 Cal.Rptr.2d at p. 21, fn. 22, 40 P.3d at p. 436), and today's decision does not affect the continuing validity of the former provision.
The content neutrality of section 2225, subdivision (b)(2) is arguable, insofar as the law distinguishes between income-generating activity that exploits criminal notoriety and that which does not. For example, if Mr. Keenan published a book of poetry anonymously, the royalties would probably not qualify as profits as defined by the subdivision. But if he marketed the poems as "Sizzling Sonnets from the Sinatra Snatcher," the royalties would be enhanced by his criminal notoriety, and thus subject to seizure.[8]
On the other hand, Simon & Schuster observed statutes may be content neutral, and thus avoid strict scrutiny, where they are intended to serve purposes unrelated to the content of the regulated speech, notwithstanding their incidental effects on some speakers or messages but not others. (Simon & Schuster, supra, 502 U.S. at p. 122, fn. *, 112 S.Ct. 501, citing Ward v. Rock Against Racism (1989) 491 U.S. 781, 109 S.Ct. 2746, 105 L.Ed.2d 661; City of Renton v. Playtime Theatres, Inc. (1986) 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29.) Although New York's law was too overinclusive to qualify, a more narrowly drawn statute might face only intermediate scrutiny under Ward and City of Renton. (Simon & Schuster, supra, at p. 122, fn. *, 112 S.Ct. 501.) Moreover, even if held to be content based, a statute that pursues a compelling interest (depriving criminals of all their profits) and is narrowly drawn (seizing only profits) could survive strict scrutiny.
A law that neutrally seizes all profits of crime comports with Simon & Schuster, supra, 502 U.S. 105, 112 S.Ct. 501, 116 L.Ed.2d 476 and thus the First Amendment. Even when his victim has been fully compensated, a criminal is not entitled to profit from his crimes.
IV.
As the foregoing analysis shows, a state may constitutionally seize assets by pursuing the compelling interest of compensating victims, in which case the state may seize assets from any source (including assets that are not the fruits of the crime) up to the amount of the victim's damages. Likewise, a state may constitutionally seize assets by pursuing the compelling interest of depriving criminals of assets that are the fruits of crime. And there is no apparent reason why a state must select only one compelling interest to pursue. A state may pursue both interests separately; seizing all assets up to the amount of damage under the compensation rationale, and then all fruits of crime under the antiprofit theory. Because each phase would neutrally seize assets in furtherance of a compelling state interest, the law *27 would avoid the constitutional pitfalls noted in Simon & Schuster.
NOTES
[1] "Congress shall make no law . . . abridging the freedom of speech, or of the press.
[2] "Every person may freely speak, write and publish his or her sentiments on all subjects, being responsible for the abuse of this right. A law may not restrain or abridge liberty of speech or press." (Cal. Const., art. I, § 2, subd. (a).)
[3] All statutory references are to the Civil Code unless otherwise stated.
[4] As indicated in detail below, this case does not, in fact, present a challenge to section 2225(b)(2), the distinct portion of the statute that confiscates profits from memorabilia, property, things, or rights sold for values enhanced by their felony-related notoriety value. We therefore do not address the constitutionality of this clearly severable provision. (See Stats.2000, ch. 261, § 3.)
[5] In a memorandum of points and authorities accompanying his subsequent motion for a preliminary injunction, Sinatra, Jr., alleged that the kidnappers sustained federal convictions (see 18 U.S.C. §§ 2, 371, 875(a), 1201, 1202) and served their time in the federal penitentiary, but nonetheless qualify as "convicted felons" for purposes of section 2225, because they were convicted of felonies, as defined by either California or United States statutes, that were committed in California. (§ 2225, subd. (a)(1), (2).)
[6] In his written motion for a preliminary injunction, Sinatra, Jr., had sought similar injunctive relief against New Times and Gilstrap, but prior to the August 5, 1998, hearing on the motion, Sinatra, Jr., stipulated he would not proceed at that time with the injunctive portion of his application.
[7] We deem this procedure as equivalent to an order for the issuance of an alternative writ, and the parties have proceeded under that assumption. (But see Code Civ. Proc., §§ 1086-1087; Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171, 177-178, 203 Cal.Rptr. 626, 681 P.2d 893.)
[8] In addition to the parties' briefs on the merits in this court, several amicus curiae briefs have also been filed. The Attorney General of California (Attorney General) has filed an amicus curiae brief in support of Sinatra, Jr. In support of Keenan, an amicus curiae brief has been filed on behalf of the ACLU Foundation of Southern California (ACLU), and a joint amicus curiae brief has been filed on behalf of the Association of American Publishers, Inc., The American Booksellers Foundation for Free Expression, Magazine Publishers of America, Inc., and PEN American Center.
[9] "Ironically, the [New York] statute was never applied to the Son of Sam himself; David Berkowitz was found incompetent to stand trial, and the statute at that time applied only to criminals who had actually been convicted. [Citation.] According to the [New York State Crime Victims] Board, Berkowitz voluntarily paid his share of the royalties from the book Son of Sam, published in 1981, to his victims or their estates. [Citation.]" (Simon & Schuster, supra, 502 U.S. 105, 111, 112 S.Ct. 501. 116 L.Ed.2d 476.)
[10] Section 2225, subdivision (a)(6) defines "materials" as "books, magazine or newspaper articles, movies, films, videotapes, sound recordings, interviews or appearances on television and radio stations, and live presentations of any kind."
[11] The New York law, like section 2225(b)(1), established priorities of claims against the account, including the criminal's valid claim for expenses of legal representation. (Simon & Schuster, supra, 502 U.S. 105, 110, 112 S.Ct. 501, 116 L.Ed.2d 476; see N.Y. Exec. Law § 632-a(7), (8), (11).) Unlike section 2225(b)(1), the New York law allowed general creditors of the criminal to reach the impounded funds (Simon & Schuster, supra, at p. 110, 112 S.Ct. 501; see N.Y. Exec. Law § 632-a(11)(c)), but provided that if no claims against the account were pending at the end of the five-year period, remaining funds in the account would be repaid to the criminal (Simon & Schuster, supra, at p. 109, 112 S.Ct. 501; see N.Y. Exec. Law § 632-a(4)).
[12] Justice Thomas did not participate.
[13] One jurisdiction's Son of Sam law has been invalidated since Simon & Schuster. (Bouchard v. Price (R.I. 1997) 694 A.2d 670, 675-678.) The laws in two other states have been challenged, but the appeals in those matters were decided on grounds other than the constitutionality of the statutes at issue. (See Rolling v. State ex rel. Butterworth (Fla.Dist. Ct.App.1994) 630 So.2d 635; Curran v. Price (1994) 334 Md. 149, 638 A.2d 93.)
[14] Concluding that the New York's Son of Sam law was a content-based regulation of speech, the Simon & Schuster majority noted, in a brief passage, that the law "singles out income derived from expressive activity for a burden the State places on no other income." (Simon & Schuster, supra, 502 U.S. 105, 116, 112 S.Ct. 501, 116 L.Ed.2d 476.) As noted above, California's Son of Sam law has a feature New York's did not; besides confiscating a convicted felon's income from telling his crime story, the California statute, by amendments adopted after Simon & Schuster, also confiscates profits earned by a convicted felon, or a profiteer, from the sale of memorabilia, property, things, or rights for a value enhanced by their felony-related notoriety value. (§ 2225(b)(2).) Thus, it cannot be said that California's law, read as a whole, burdens income from speech as distinct from all other crime-related income. The Attorney General urges that this distinction between the California and New York statutes means the California law is not a content-based regulation of speech. We disagree. California's effort to reach the fruits of crime beyond those derived from storytelling about the crime might bear on whether our statute is unconstitutionally underinclusive, an issue we need not and do not decide. However, we do not read this brief language of Simon & Schuster to mean that a statute can escape examination as a content-based regulation of speech merely by targeting, in separate provisions, nonspeech income as well. There can be no doubt that section 2225(b)(1) itself meets the definition of a content-based speech regulation; it focuses directly and solely on income from speech and "is directed only at works with a specified content." (Simon & Schuster, supra, 502 U.S. 105, 116, 112 S.Ct. 501, 116L.Ed.2d 476.)
[15] By denying compensation for an expressive work, a law may chill not only the free speech rights of the author or creator, but also the reciprocal First Amendment right of the work's audience to receive protected communications. (Va. Pharmacy Bd. v. Va. Consumer Council (1976) 425 U.S. 748, 756, 96 S.Ct. 1817, 48 L.Ed.2d 346; see Pacific Gas. & Elec. Co. v. Public Util. Comm'n (1986) 475 U.S. 1, 8, 106 S.Ct. 903, 89 L.Ed.2d 1 (plur. opn. of Powell, J.).) The chilling effect of financial disincentives was recognized again in United States v. Treasury Employees (1995) 513 U.S. 454, 468-470, 115 S.Ct. 1003, 130 L.Ed.2d 964, where the court struck down a congressional ban on the receipt by certain high-level government employees of honoraria for speeches. (See also Va. Pharmacy Bd., supra, 425 U.S. at pp. 756-757, 96 S.Ct. 1817; Mine Workers v. Illinois Bar Ass'n. (1967) 389 U.S. 217, 222, 88 S.Ct. 353, 19 L.Ed.2d 426; Mazer v. Stein (1954) 347 U.S. 201, 219, 74 S.Ct. 460, 98 L.Ed. 630.)
[16] Though it elsewhere clearly concluded that New York's Son of Sam law was a contentbased regulation of speech which must be narrowly tailored to serve a compelling state interest, the Simon & Schuster majority also noted that "[b]ecause the [New York] law is so overinclusive," there was no need to address the New York Board's claim that the statute was content neutral under the test set forth in such cases as Ward v. Rock Against Racism (1989) 491 U.S. 781, 109 S.Ct. 2746, 105 L.Ed.2d 661 and Renton v. Playtime Theatres, Inc. (1986) 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29. (Simon & Schuster, supra, 502 U.S. 105, 122, 112 S.Ct. 501, 116 L.Ed.2d 476, asterisked fn.) As the Simon & Schuster majority explained, Ward and Renton fall within a line of authority suggesting that regulations are content neutral, despite their incidental effect on some but not all speakers, if they are justified by concerns unrelated to the content of speech. (Ward, supra, at p. 791, 109 S.Ct. 2746 [antinoise regulation requiring city sound equipment and city sound technician for outdoor concert, as applied to antiracism organization]; Renton, supra, at p. 48, 106 S.Ct. 925 [zoning regulation of adult theaters].) The Simon & Schuster majority indicated that although a content-neutral regulation of expression need not serve a compelling state interest, it must nonetheless be "narrowly tailored" to serve whatever nonspeech interest the state asserts. (Simon & Schuster, supra, at p. 122, fn. *, 112 S.Ct. 501) The majority concluded that even if New York's Son of Sam law was analyzed as content neutral rather than content based, it was still "too overinclusive" to meet this test. (Ibid.) For reasons explained below, we reach a similar conclusion with respect to section 2225(b)(1).
[17] The ACLU suggests that, for this reason alone, the statute is an impermissibly overbroad deterrent to creative expression for compensation, since it forces a convicted felon to give up speech-related income for the benefit of crime victims generally, even after his own victims have been compensated. Section 2225(b)(1) does appear to impose an involuntary trust on the convicted felon's proceeds from materials that include the story of the crime, and to confiscate such proceeds after five years for the benefit of crime victims generally, even if there never were "beneficiaries" with specific claims against the felon. In order to impose an "express trust" in a bank depositary, the Attorney General must show it is "more probable than not" that beneficiaries exist (id., subd. (e)(3)), and only a beneficiary or the Attorney General may obtain a preliminary injunction to prevent waste or dissipation of entrusted funds (id., subd. (f)(1)). However, the trust character of the proceeds in the felon's hands, and their ultimate forfeiture to the state's Restitution Fund, do not appear to depend on the actual existence of uncompensated victims of the felon's crime.
The Attorney General responds that the state has a compelling interest in using the fruits of a particular crime not only to compensate that crime's direct victims, but also as a source of criminal restitution generally. As we conclude elsewhere in this opinion, section 2225(b)(1) is overbroad in any event, because it confiscates speech-related income on the basis of its content, and thus discourages such protected speech, far beyond the degree necessary to reach the fruits of crime.
[18] As Association of American Publishers, Inc., points out, discussion of governmental affairs is at the core of the First Amendment. (Gentile v. State Bar of Nevada (1991) 501 U.S. 1030, 1034-1035, 111 S.Ct. 2720, 115 L.Ed.2d 888.)
[19] As indicated above, section 2225(b)(1) imposes an involuntary trust upon all "proceeds . . . received by or owing to" a convicted felon for expressive materials that include the story of the crime (id., subd. (a)(9)). The statute imposes no limit on the time that may elapse between the crime and receipt of the proceeds. The trust period begins when proceeds are received or due, then continues, as extended pending the completion of suits by beneficiaries, for five years after the conviction, or five years after the payment of proceeds to the felon, "whichever is later." (§ 2225(b)(1).)
[20] These include, for example, Alex Haley and Malcolm X's The Autobiography of Malcolm X (Ballantine Books ed.1992), in which the murdered civil rights leader describes early burglaries for which he was convicted (id., at pp. 161-172); Eldridge Cleaver's Soul on Ice (1968), which discusses his rapes of White women, for which he was incarcerated, as since-repented acts of racial rage (id., at pp. 14-15); memoirs by Charles Colson (Born Again (1976)), G. Gordon Liddy (Will! (1980)), and John Dean (Blind Ambition: The White House Years (1976)) detailing their criminal roles in the Watergate coverup; and the memoirs of Patricia Hearst, the scion of a publishing dynasty, who was kidnapped by the Symbionese Liberation Army and later participated with her captors in an armed bank robbery for which she was imprisoned (Hearst & Moscow, Every Secret Thing (1981)).
[21] We stress the narrow nature of our holding under both the federal and California Constitutions. We conclude only that section 2225(b)(1) is an overinclusive infringement of protected speech because it targets and confiscates all a convicted felon's proceeds from expressive materials that include any substantial account of the felony, in whatever context. We express no views on whether a statute targeting the income gained from expressive works that include accounts of the author's crimes could be drafted narrowly and precisely enough to overcome this problem of constitutional overbreadth. Moreover, nothing we say here precludes a crime victim, as a judgment creditor, from reaching a convicted felon's assets, including those derived from expressive materials that describe the crime, by generally applicable remedies for the enforcement and satisfaction of judgments. (See generally Code Civ. Proc., §§ 481.010 et seq., 680.010 et seq.) Nor do we intend, by our analysis in this case, to preclude further legislative steps, not directly related to the content of speech, to ensure that a convicted felon's income and assets, including those derived from storytelling about the crimes, are and remain available to compensate persons injured or damaged by the felon's crimes.
Finally, because we conclude that section 2225(b)(1) is overbroad for its legitimate purpose, we need not and do not address Keenan's contention, derived from Justice Kennedy's concurring opinion in Simon & Schuster, that a content-based regulation of speech is unconstitutional per se, and can never be justified by an interest of the state.
[22] The Attorney General argues that even if section 2225(b)(1), confiscating proceeds from expressive materials that include a felon's story of the crime, is invalid, we should affirmatively uphold section 2225(b)(2), which confiscates profits from memorabilia, property, things, or rights sold for values enhanced by their felony-related notoriety. The Attorney General represents that he has pending a case, Lockyer v. Brown, aka "X-Raided" (Super. Ct. Sacramento County, 1999, No. 99AS02640) seeking to confiscate, under section 2225(b)(2), "profits" from a compact disc entitled Unforgiven, which features defendant Brown, a rap artist and convicted murderer. At the Attorney General's request, we have taken judicial notice of the complaint in the Sacramento action.
However, as indicated above, neither the parties nor the Court of Appeal have focused on the "notoriety value" provisions of section 2225(b)(2), which is clearly severable, but have debated only whether section 2225(b)(1), dealing with storytelling about the crime, is constitutional. At oral argument, Sinatra, Jr.'s, counsel acknowledged that, despite its brief prayer for statutory "profits" (§ 2225, subds.(a)(10), (b)(2)) as well as "proceeds" (id., subds. (a)(9), (b)(1)), Sinatra, Jr.'s, complaint is premised solely on section 2225(b)(1), the storytelling provision. Counsel for both parties agreed that the applicability and validity of section 2225(b)(2) are not before us except as raised, for the first time in this court, by the Attorney General as amicus curiae. Under the circumstances, we decline the Attorney General's invitation to opine upon the constitutionality of section 2225(b)(2), and we leave that issue for a case presenting it more directly.
Similarly, because we conclude that the challenged provisions are invalid infringements on speech, we need not and do not address Keenan's argument, raised at all stages, that application to him of section 2225, which was enacted long after the kidnapping of Sinatra, Jr., violates federal and state constitutional prohibitions of ex post facto legislation.
[1] All statutory references are to the Civil Code unless otherwise stated.
[2] Indiana law, for example, seizes only 90 percent of income derived from crime. (Ind. Code Ann. § 5-2-6.3-3(a)(1)(B).) According to the logic underlying the Laffer curve (i.e., by suppressing the profit incentive, a 100 percent taxation rate will not yield revenue), a defendant who may retain some profits will be more inclined to write about his crime, thereby generating income with which to compensate the victim. To a significant degree, the compensation and antiprofit imperatives are thus in tension.
[3] The Bouchard court struck down a statute resembling New York's law in that it confiscated royalties from storytelling: i.e., "`any publication, reenactment, dramatization, interview, depiction, explanation, or expression through any medium of communication which is undertaken for financial consideration. The term includes ... a movie, book, magazine or newspaper article, tape recording, still photograph, radio or television program, live presentation, or reproduction or presentation of any kind.'" (Bouchard, supra, 694 A.2d at p. 674, quoting definition of "commercial exploitation" in Criminal Royalties Distribution Act of 1983, R.I. Gen. Laws § 12-25.1-2(3).)
[4] (See Learned, The Constitutionality of Cashing in on Crime: Free Expression, Free Enterprise, and Not-Profit Conditions of Probation (1995) 1 Suffolk J. Trial & Appellate Advoc. 79, fn. 10 (Learned) [describing the $25 boxer shorts marketed by convicted call girl/panderer Heidi Fleiss].)
[5] (See Rolling v. State ex rel. Butterworth (Fla. Dist.Ct.App.1999) 741 So.2d 627.)
[6] (See Learned, supra, 1 Suffolk J. Trial & Appellate Advoc. at p. 79, fn. 4 [describing sale of serial killer Jeffrey Dahmer's household goods].)
[7] Some states seizing profits do not expressly cover the fruits of criminal notoriety, instead defining as profits "any property obtained through or income generated from the commission of a crime; any property obtained by or income generated from the sale, conversion or exchange of proceeds of a crime, including any gain realized by such a sale, conversion or exchange; and any property that the offender obtained by committing the crime or income generated as a result of having committed the crime, including any assets obtained through the use of unique knowledge obtained during the commission of, or in preparation for the commission of, the crime, as well as any property obtained by or income generated from the sale, conversion or exchange of the property and any gain realized by such a sale, conversion or exchange." (Me.Rev.Stat. Ann. tit. 14, § 752-E; see also Colo.Rev.Stat. Ann. § 24-4.1-201; N.Y. Crime Victims Board Law § 632-a; N.D. Cent.Code § 32-07.1-01; W. Va.Code § 14-2B-3; Wyo. Stat. Ann. § 1-40-302.) It is not evident whether proceeds from writings about subjects unrelated to the crime would qualify as "income generated as a result of having committed the crime." (Me.Rev.Stat. Ann.tit.14, § 752-E.)
[8] Statutes that exclude from coverage works about topics unrelated to the crime would face an even stronger challenge, as the topic (content) would determine whether the state seized the royalties.
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FILED
NOT FOR PUBLICATION NOV 25 2015
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
GUILLERMO ANTONIO CORTES No. 12-73173
FERNANDEZ, AKA Guerno Hernandez
Cortes, Agency No. A094-450-965
Petitioner,
MEMORANDUM*
v.
LORETTA E. LYNCH, Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted November 18, 2015**
Before: TASHIMA, OWENS, and FRIEDLAND, Circuit Judges.
Guillermo Antonio Cortes Fernandez, a native and citizen of El Salvador,
petitions for review of the Board of Immigration Appeals’ (“BIA”) order denying
his motion to reopen based on ineffective assistance of prior counsel. We review
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
for abuse of discretion the BIA’s denial of a motion to reopen, and we review de
novo questions of law and constitutional claims. Singh v. Ashcroft, 367 F.3d 1182,
1185 (9th Cir. 2004). We deny in part, and dismiss in part, the petition for review.
The BIA did not abuse its discretion in denying Cortes Fernandez’s motion
to reopen for failure to establish prejudice from his former attorney. See Rojas-
Garcia v. Ashcroft, 339 F.3d 814, 826 (9th Cir. 2003) (requiring prejudice to state
valid claim of ineffective assistance of counsel). Cortes Fernandez’s contention
that his former counsel deprived him of an opportunity to challenge the agency’s
denial of his application for relief before this court failed to describe a colorable
challenge to the agency’s decision that would establish “plausible grounds for
relief.” Id. (presumption of prejudice rebutted when petitioners do not show
plausible grounds for relief).
We lack jurisdiction to consider Cortes Fernandez’s unexhausted contention
regarding the IJ’s purported excessive reliance on charging documents. See Tijani
v. Holder, 628 F.3d 1071, 1080 (9th Cir. 2010).
PETITION FOR REVIEW DENIED in part; DISMISSED in part.
2 12-73173
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Affirmed and Memorandum Opinion filed November 7, 2006
Affirmed and Memorandum Opinion filed November 7, 2006.
In The
Fourteenth Court of
Appeals
_______________
NO. 14-05-01138-CV
_______________
GEORGE M. BISHOP, Appellant
V.
JOHN J. KING, Appellee
On Appeal from the 164th District Court
Harris County, Texas
Trial Court Cause No. 04-42128
M E M O R A N D U M O P I N I O N
In one
issue, appellant, George M. Bishop, appeals a summary judgment in favor of
appellee, John J. King. Because all dispositive issues are clearly settled in
law, we issue this memorandum opinion and affirm. See Tex. R. App. P. 47.4.
Background
This
suit arises out of Bishop=s withdrawal from the law partnership of Sullivan, Bailey,
King, Bishop & Sabom in 1982. As a part of the withdrawal, Bishop entered
into an agreement, dated May 6, 1983, with the successor partnership, assigning
his partnership interest in the firm. The agreement further provided that
Bishop would be compensated later for contingency cases that were not yet
settled, including the Vina Darko case. Bishop alleges that without his
knowledge or consent, King established two trust accounts containing funds owed
to Bishop due to his withdrawal from the partnership. Bishop alleges the
trusts were created in 1983 at University Savings Association and in 1991 at
Nations Bank. In December 1999, King responded to a letter from Bishop
explaining that he had opened the University Savings Association account in
1983 when Bishop failed to execute documents releasing the law firm in exchange
for the funds and since then, the University Savings Association had closed.
King also explained that he was not responsible for the funds since Bishop had
failed to execute the documents releasing the funds. At or around this same
time, Bishop allegedly learned from an I.R.S. agent, and verbally from King, of
another trust set up at Nations Bank in 1991. Upon learning of the trusts in
1999, Bishop did not assert any claims against King or his other former law
partners. Instead, according to his petition, he Aelected to continue the trust for the
time being as a result of other more pressing matters.@ On October 2, 2002, Bishop sent a
letter to King terminating the trust with the funds from Bishop=s interest in the partnership and
requesting his share of the funds from the 1991 Darko settlement. When King
did not forward the funds, Bishop filed this suit.
Discussion
In his
petition, Bishop sued King asserting claims for (1) breach of trust for
refusing to distribute proceeds of the alleged trusts established in favor of
Bishop, (2) negligence in that King as trustee did not prudently invest the
funds or provide an accounting, (3) conversion arguing King did not give
Bishop the funds upon request, (4) accounting of the former partnership=s receipts under the Texas Uniform
Partnership Act, (5) declaratory judgment of his rights under the Texas
Declaratory Judgment Act, (6) breach of contract for taking funds owed to
Bishop under the May 6, 1983, contract, and (7) attorney=s fees under the Texas Civil Practice
and Remedies Code. King filed both a traditional motion for summary judgment
under Texas Rule of Civil Procedure 166a(c) and a no-evidence motion for
summary judgment under Texas Rule of Civil Procedure 166a(i). Both motions
address all of Bishop=s claims.
The
trial court granted King=s motion for summary judgment. However, the trial court did not
specify the grounds or designate which motion for summary judgment was
granted. When a movant asserts multiple grounds for summary judgment and the
trial court does not specify the ground on which summary judgment was granted,
the appellant must attack all grounds on appeal. See State Farm Fire &
Cas. Co. v. S.S., 858 S.W.2d 374, 381 (Tex. 1993); Haas v. George,
71 S.W.3d 904, 912 (Tex. App.CTexarkana 2002, no pet.); Lewis v. Adams, 979 S.W.2d
831, 833 (Tex. App.CHouston [14th Dist.] 1998, no pet.). If an appellant fails
to attack each ground upon which the summary judgment may have been granted, we
must uphold the summary judgment. See State Farm Fire & Cas. Co.,
858 S.W.2d at 381; Haas, 71 S.W.3d at 912; Lewis, 979 S.W.2d at
833; see also Fields v. City of Texas City, 864 S.W.2d 66, 68 (Tex. App.CHouston [14th Dist.] 1993, writ
denied) (ABecause summary judgment may have been granted on a ground not challenged
on appeal, i.e., consent, we may affirm the summary judgment on that basis
alone.@). Therefore, on appeal Bishop must
attack all the grounds on which the trial court could have granted summary
judgment.
In his
sole issue, Bishop contends that King did not establish his right to a summary
judgment. In his sub-issues, he asserts that (1) the trial court erred in
rendering summary judgment based on affirmative defenses of statute of
limitations or laches, (2) the trial court erred in entering summary judgment
on his breach of trust claim as limitations ran from the termination of the
trust and not from the date of discovery, (3) King had the burden of proof on
the affirmative defense of limitations and failed to prove this defense
conclusively, and (4) the affirmative defense of laches does not apply because
King failed to prove it or show exceptional circumstances.
Bishop
addresses only King=s grounds for traditional motion for summary judgment based
on statute of limitations and doctrine of laches. However, with respect to
each of Bishop=s claims, except the claim for an accounting, King moved for traditional
summary judgment on one or more grounds in addition to statute of limitations
and laches. Therefore, we may uphold the traditional motion for summary
judgment with respect to all the claims, except the claim for an accounting,
for the sole reason that Bishop did not attack all the grounds on which the
trial court could have granted summary judgment. See State Farm Fire
& Cas. Co., 858 S.W.2d at 381; Haas, 71 S.W.3d at 912; Lewis,
979 S.W.2d at 833.
Furthermore,
Bishop failed to address King=s no-evidence motion for summary judgment on all the claims.
Therefore, we must uphold the no-evidence motion for summary judgment on all
the claims. See State Farm Fire & Cas. Co., 858 S.W.2d at
381; Haas, 71 S.W.3d at 912; Lewis, 979 S.W.2d at 833. We
overrule Bishop=s sole issue.
Accordingly,
the judgment of the trial court is affirmed.
/s/ Charles W. Seymore
Justice
Judgment rendered and Memorandum
Opinion filed November 7, 2006.
Panel consists of Chief Justice
Hedges and Justices Seymore and Mirabal.[1]
[1] Senior Justice Margaret Garner Mirabal sitting by
assignment.
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872 F.2d 411
Appeal of Asson (Brian Stephen)
NO. 88-3432
United States Court of Appeals,Third Circuit.
MAR 16, 1989
Appeal From: W.D.Pa.,
McCune, J.
1
AFFIRMED.
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423 F.2d 714
In the Matter of Richard A. CARLSON, Bankrupt.CALIFORNIA STATE BOARD OF EQUALIZATION, Petitioner and Appellant,v.Richard A. CARLSON, Respondent and Appellee.
No. 23580.
United States Court of Appeals, Ninth Circuit.
February 9, 1970.
Neal G. Gobar, Deputy Atty. Gen. (argued), Phillip W. Marking, Deputy Atty. Gen., Thomas C. Lynch, Atty. Gen., of California, Los Angeles, Cal., for appellant.
Andrew F. Leoni (argued), of Slate & Leoni, Los Angeles, Cal., for appellee.
Before BROWNING, ELY and CARTER, Circuit Judges.
PER CURIAM:
1
The only substantial question presented is whether the proviso in section 17a (1) of the Bankruptcy Act, 11 U.S.C. § 35(a), preserves a pre-bankruptcy tax lien as to assets acquired after bankruptcy. The three district courts which have considered this question have answered it in the negative. In re Carlson, 292 F.Supp. 778 (C.D.Calif.1968); In re Braund, 289 F.Supp. 604 (C.D. Calif.1968); United States v. Sanabria (N.D.Ill., June 21, 1968) (Unreported) (Appeal pending in the Court of Appeals for the Seventh Circuit, No. 17,145). See also Marsh, Triumph or Tragedy? The Bankruptcy Amendments of 1966, 42 Wash.L.Rev. 681 (1967); Note, 14 Vill. L.Rev. 323, 326 (1969).
2
There are substantial arguments on both sides, but we have concluded that on balance the result reached in these decisions is the better one.
3
Affirmed.
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25 F.3d 1049NOTICE: 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.
Edwin Lee MORAN, Petitioner-Appellant,v.George WILSON, Warden, Respondent-Appellee.
No. 93-6377.
United States Court of Appeals, Sixth Circuit.
May 11, 1994.
1
Before: NORRIS and DAUGHTREY, Circuit Judges, and GILMORE, Senior District Judge.*
ORDER
2
Edwin Lee Moran, pro se, appeals a district court order denying his petition for a writ of habeas corpus which he filed under 28 U.S.C. Sec. 2254. The case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination, this panel unanimously agrees that oral argument is not needed. Fed.R.App.P. 34(a).
3
In March of 1987, Moran was convicted by a jury of twelve counts of criminal possession of a forged instrument, one count of theft over $100, and of being a first degree persistent felony offender under Kentucky state law. Moran received a sentence of 11 years in prison. The Kentucky state courts affirmed his convictions on appeal. Thereafter, Moran filed a motion with the trial court pursuant to Ky.R.Civ.P. 11.42, on the basis that he received ineffective assistance of trial counsel. The trial court denied his motion, and the Kentucky Court of Appeals affirmed that ruling. Moran did not file a motion for discretionary review of this decision with the state supreme court.
4
On September 6, 1992, Moran filed this petition for a writ of habeas corpus in federal court, raising the following claims: 1) he is being held unlawfully because the evidence was insufficient to sustain the convictions on counts 3, 5-7, 14-17, and 21-23 of the indictment; 2) he was denied due process of law by the trial court's failure to sever the theft charge (count 8) from the other charges; 3) he was denied a fair trial when the prosecutor commented that a defense witness had committed perjury; 4) he was denied a fair trial and due process when the trial court erroneously advised the jury as to the nature of his prior convictions; 5) he was denied effective assistance of counsel when trial counsel failed to attack the validity of the prior convictions utilized by the Commonwealth to establish Persistent Felony Offender First Degree; and 6) he was denied effective assistance of counsel and due process of law when trial counsel failed to object to the jury instructions on accomplice liability.
5
The matter was referred to a magistrate judge, who addressed the merits of the claims and recommended that the petition should be denied. The district court reviewed this report and recommendation and the objections filed by Moran and denied the petition. On appeal, Moran repeats the issues he raised in his petition in district court, with the exception of his claim enumerated as four, above, which he has expressly abandoned.
6
A writ of habeas corpus may issue to correct a fundamentally unfair trial or proceeding resulting in the unjust confinement of the petitioner. Williams v. Withrow, 944 F.2d 284, 288 (6th Cir.1991), aff'd in part and rev'd in part, 113 S.Ct. 1745 (1993). Fundamental fairness has been defined very narrowly. Dowling v. United States, 493 U.S. 342, 352 (1990). Despite de novo review of the petition, this court must give complete deference to evidence-supported state court findings and render a clearly erroneous review of any findings of fact made by the district court. Williams, 944 F.2d at 288; McCall v. Dutton, 863 F.2d 454, 459 (6th Cir.1988), cert. denied, 490 U.S. 1020 (1989). Upon review, this court concludes that, for the reasons stated in the district court's thorough opinion and order, Moran's arguments do not support habeas relief.
7
Accordingly, the district court's order denying Moran's petition for a writ of habeas corpus is affirmed. Rule 9(b)(3), Rules of the Sixth Circuit.
*
The Honorable Horace W. Gilmore, Senior U.S. District Judge for the Eastern District of Michigan, sitting by designation
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NOTE: This order is nonprecedentia|.
United States Court of Appea|s for the Federa| Circuit
2010-3084
SARAH PATR|C|A BENNETT,
Petitioner,
v.
MER|T SYSTEMS PROTECT|ON BOARD,
Respondent,
and
DEPARTMENT OF VETERANS AFFAlRS,
|ntervenor.
Petition for review of the Merit Systems Protection Board
in case no. PH0752090673-|-‘I.
ON MOT|ON
0 R D E R
Upon consideration of the unopposed motions to reform the official caption to
designate the Merit Systems Protection Board as the respondent and to permit the
Department of Veterans Affairs to inten/ene,
|T |S ORDERED THAT:
The motions are granted The revised ofHcia| caption is reflected above.
FOR THE COURT
nm 1 1 mm lslJan |:lorba|y _V__
Date Jan Horba|y
C|erk
u.3ht1!gLéEnrEr’F§ril>§=EALs ron
ca Phinip R. Keie, Esq. ”E*""‘L "‘°“"
Karen V. Goff, Esq. 1 1 = gm
Sara Rearden, Esq. mm 2
58 1ANHoaaALv
emma
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510 U.S. 1131
Joinerv.United States.
No. 93-7272.
Supreme Court of United States.
February 22, 1994.
1
Appeal from the C. A. 11th Cir.
2
Certiorari denied.
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Affirmed and Memorandum Opinion filed January 29, 2013.
In The
Fourteenth Court of Appeals
___________________
NO. 14-11-00991-CR
___________________
MAURO LIMAS, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 56th District Court
Galveston County, Texas
Trial Court Cause No. 11CR0083
MEMORANDUM OPINION
A jury convicted appellant, Mauro Limas, of possessing cocaine with the
intent to deliver it. See Tex. Health & Safety Code Ann. § 481.112 (West 2010).
Appellant contends that an extraneous offense instruction and a mental state
instruction in the jury charge were “so egregious and created such harm that [he]
did not have a fair and impartial trial.” Sakil v. State, 287 S.W.3d 23, 26 (Tex.
Crim. App. 2009) (internal quotation marks omitted). We disagree, concluding
that neither instruction caused appellant egregious harm. We therefore affirm
appellant’s conviction.
BACKGROUND
On January 11, 2011, appellant was driving in Texas City when, without
signaling, he made a u-turn that crossed three traffic lanes. In the process, he nearly
collided with an unmarked police vehicle. The officers in the police vehicle then
initiated a traffic stop and learned that appellant’s license to drive was suspended and
that he had no proof of insurance. An officer asked appellant to exit the car, intending
to arrest him for driving with a suspended license. See Tex. Transp. Code Ann. §
521.457(a)(2) (West 2007). The officer then noticed two large bulges in appellant’s
jacket. A search revealed that the bulges were two 1.02-ounce bags of cocaine with a
street value of approximately $2,700 each. The only issue at trial was whether
appellant intended to deliver this cocaine. A jury concluded that he did and convicted
him of possession of cocaine with the intent to deliver. See Tex. Health & Safety
Code Ann. § 481.112.
ANALYSIS
Appellant now appeals, arguing that two alleged errors in the jury charge
require reversal of his conviction: (1) the trial court improperly instructed the jury
to consider appellant’s uncharged driving offenses in determining whether he
intended to distribute the cocaine; and (2) the trial court impermissibly expanded
the scope of appellant’s indictment by instructing the jury that it could convict if
2
appellant possessed the cocaine knowingly or intentionally when the indictment
only alleged that appellant knowingly possessed the cocaine.
I. Standard of Review
We review a claim of jury-charge error in a criminal case using a two-step
procedure. The first step is to determine whether there is error in the charge.
Barrios v. State, 283 S.W.3d 348, 350 (Tex. Crim. App. 2009). If there was error
and appellant objected to the error at trial, reversal is required if the error “is
calculated to injure the rights of the defendant,” meaning that there is “some
harm.” Id. (quotation omitted). If the error was not objected to, it must be
“fundamental” and requires reversal only if the error was so egregious and created
such harm that the defendant “has not had a fair and impartial trial.” Id. (internal
quotation marks omitted). Here, appellant concedes that he failed to object to
either instruction, so we apply a fundamental error standard.
II. The trial court’s extraneous offense instruction did not cause egregious
harm.
The trial court instructed the jury as follows:
[I]f there is any testimony before you in this case regarding the
Defendant’s having committed offenses other than the offense alleged
against him in the indictment in this case . . . then you may only
consider the same in determining the intent of the Defendant, if any,
in connection with the offense, if any, alleged against him in the
indictment in this case and for no other purpose.
Appellant does not argue that the instruction incorrectly stated the law, but
contends instead that the only extraneous offenses before the jury were reckless
driving, driving without a valid license, failing to signal before turning, and
making an illegal u-turn. Because these offenses are irrelevant to whether he
intended to deliver cocaine, appellant argues that the trial court erred by instructing
3
the jury that it could consider the offenses in determining his intent. The State
does not argue that the instruction was correct, but contends that any error in the
instruction was not fundamental.
Because neither party contends that the instruction was proper, we will
assume that it was error. See Abdnor v. State, 871 S.W.2d 726, 738 (Tex. Crim.
App. 1994) (“[A] limiting instruction is not necessary where the extraneous
offenses are so dissimilar to the charged offense that the jury cannot mistakenly
draw a connection between the charged offense, and the extraneous offenses.”). In
the absence of an objection, we limit our analysis to whether the harm resulting
from the error was such that appellant did not have a fair and impartial trial.
Barrios, 283 S.W.3d at 350. We conclude that any harm resulting from the
instruction did not rise to this level.
Appellant’s assertion that driving offenses are irrelevant to an intent to
deliver cocaine demonstrates the very reason that the instruction was harmless.
The instruction neither suggested nor required that the jury draw any particular
inference about appellant’s intent based upon the other offenses he committed.
Rather, it permitted the jury to assign these offenses their appropriate relevance “in
determining the intent of the Defendant . . . in connection with the offense . . .
alleged against him in the indictment.” If the jury followed this instruction, the
nature of appellant’s driving offenses compelled the conclusion now urged by both
parties: the offenses were entirely irrelevant to appellant’s intent regarding the
cocaine. See Thrift v. State, 176 S.W.3d 221, 224 (Tex. Crim. App. 2005) (“[W]e
generally presume the jury follows the trial court’s instructions . . . .”). In sum,
while it may have been error, it cannot have been egregiously harmful for the jury
to consider the defendant’s extraneous offenses and reach the unavoidable
4
conclusion that they were logically irrelevant to his intent. We overrule appellant’s
first issue.
III. The trial court’s addition of an uncharged mental state of intentional
possession did not cause egregious harm.
In his second issue, Appellant contends the trial court erred by instructing
the jury that it could convict him if it found that he “intentionally” possessed
cocaine with the intent to deliver it because this instruction “improperly expanded
the scope of the charge against [him]” in the indictment. The indictment charged
that appellant “knowingly possess[ed], with intent to deliver, a controlled
substance, namely cocaine.” The court instructed the jury to find appellant guilty
if, among other things, it found beyond a reasonable doubt that he “intentionally,
or knowingly possess[ed], with intent to deliver, a controlled substance, to-wit:
cocaine.” (Emphasis added).
To support his argument, appellant cites cases in which the jury charge
erroneously permitted conviction upon a finding that the defendant possessed a less
culpable mental state than that alleged in the indictment. In those cases, “the
inclusion in the jury instructions of a lower culpable mental state than that charged
in the indictment can lead to the possibility that the defendant was convicted of an
offense that is allowed under the statute but was not alleged in the indictment.”
Reed v. State, 117 S.W.3d 260, 264 (Tex. Crim. App. 2003). This defect deprives
the defendant of the notice necessary for an “adequate opportunity to prepare and
present a defense.” See id. at 267 (Johnson, J., concurring).
In this case, however, the charge included an instruction on a more culpable
mental state as well as on the mental state alleged in the indictment. The Penal
Code itself provided appellant with notice that the State could seek to prove the
5
less culpable mental state through proof of the more culpable one. See Tex. Penal
Code Ann. § 6.02(e) (West 2011) (“[p]roof of a higher degree of culpability than
that charged constitutes proof of the culpability charged”). Because “intentionally”
is a higher degree of culpability than “knowingly,” the State could prove that
appellant possessed the cocaine knowingly, as alleged in the indictment, by
proving that he possessed it intentionally. See id.
We fail to see how adding a jury instruction on a more culpable mental state
could have egregiously harmed appellant. The intentional mental state about
which appellant complains is more difficult for the State to prove, and the jury had
to find at least the knowing mental state alleged in the indictment before it could
convict appellant. Moreover, any error in instructing the jury on the mental state
required to prove possession could not have harmed appellant because he did not
contest the element of possession at trial. Instead, the parties’ dispute focused on
whether appellant intended to distribute the cocaine. In fact, appellant’s counsel
urged the jury to convict appellant of the lesser included offense of possession,
which the charge similarly defined with the mental states of “intentionally or
knowingly.”
Appellant argues that adding the mental state of intentional possession was
nevertheless harmful because it removed a “logical flaw” in the indictment.
According to Appellant, “[i]f a person . . . only knowingly possessed [an] item,
then it would be logically impossible for the same person to have an intent to
deliver that same item to a third person.” By adding intentional possession to the
charge, Appellant contends, the court removed this flaw and made it more likely
that the jury would find he had an intent to deliver.
6
We disagree. Regardless of whether intentional possession was included in
the charge, section 6.02(e) of the Penal Code allowed the State to use evidence of
intentional possession to prove the knowing possession alleged in the indictment.
Thus, the indictment did not constrain the State to prove its case using the
questionable logic appellant suggests.
For these reasons, we hold that Appellant failed to show that it was
fundamental error for the court to add a more culpable mental state to the jury
instructions concerning an undisputed element of the offense. We overrule his
second issue.
CONCLUSION
Having overruled both of appellant’s issues, we affirm the judgment of the
trial court.
/s/ J. Brett Busby
Justice
Panel consists of Chief Justice Hedges and Justices Brown and Busby.
Do Not Publish—Tex. R. App. P. 47.2(b).
7
| {
"pile_set_name": "FreeLaw"
} |
671 A.2d 501 (1996)
341 Md. 523
James Allen POE
v.
STATE of Maryland.
No. 52, Sept. Term, 1995.
Court of Appeals of Maryland.
February 9, 1996.
M. Gordon Tayback, Baltimore, for Petitioner.
Annabelle L. Lisic, Assistant Attorney General, (J. Joseph Curran, Jr., Attorney General, on brief), Baltimore, for Respondent.
*502 Argued before MURPHY, C.J., and ELDRIDGE, RODOWSKY, CHASANOW, KARWACKI, BELL and RAKER, JJ.
CHASANOW, Judge.
The primary issue we are called upon to determine in this case is whether the doctrine of transferred intent applies when a defendant, intending to kill one person, shoots and wounds that person, but the shot passes through the intended victim and kills an unintended victim. We are also asked to decide whether the trial court properly sentenced Petitioner. For the reasons set forth below, we find that the trial court properly applied the doctrine of transferred intent in the instant case, and find no error in Petitioner's sentence. Accordingly, we uphold Petitioner's conviction and affirm the Court of Special Appeals.
I.
Petitioner James Allen Poe (Mr. Poe or the defendant) was charged in the Circuit Court for Cecil County with first degree murder of Kimberly Rice (Kimberly), an innocent bystander, and first degree attempted murder of his intended victim Karen Poe (Ms. Poe), his estranged wife. The defendant was convicted by a jury before the Honorable Donaldson C. Cole, Jr. of the foregoing charges.
On August 10, 1993, Mr. Poe drove to the home of Ms. Poe in order to visit with their four children. Although there was no formal visitation agreement, Ms. Poe generally allowed Mr. Poe to visit with the children whenever he wanted. On that day, however, Ms. Poe heard that Mr. Poe planned to take the children to Florida with his new girlfriend and refused to allow Mr. Poe to take the children. An argument ensued in front of the house. Two adults and eight children were present at the time: Donna Biggs, Ms. Poe's half sister; Biggs's boyfriend, Michael Sponseller; the Poe's four children; two children of Ms. Poe's boyfriend; and two children of Ms. Poe's sister, Virginia Sorrell.
According to the testimony of adults who witnessed the argument, Ms. Poe announced that she was going to call the police. She walked into the house, called 911 and asked the police to come to the house to remove Mr. Poe from the premises. Testimony at trial revealed that as Ms. Poe walked into the house, Mr. Poe walked toward the trunk of his car. Ms. Poe, Donna Biggs, and Michael Sponseller all observed Mr. Poe open the trunk of his car and remove a 12-gauge shotgun. Michael Sponseller testified that Ms. Poe yelled from inside the house, "`I don't have to take this anymore.'" Several witnesses testified that at that moment, Mr. Poe pointed his shotgun toward the door and shouted, "`Take this, bitch'."
At least one shot was fired into the house, hitting both Ms. Poe and Kimberly, the six year old daughter of Ms. Poe's boyfriend, who was apparently standing behind Ms. Poe. The 50 caliber lead slug passed through the front screen door, Ms. Poe's arm, Kimberly's head, and out the wooden back door. The single shot inflicted a nonfatal wound in Ms. Poe, but killed Kimberly instantly.
Michael Sponseller called 911, and gave Mr. Poe's name and a description of his car to the police as he watched the defendant drive away from the scene. Mr. Poe threw the shotgun out of the car window to the side of the road nearby and drove toward Pennsylvania. He was stopped by the Pennsylvania State Police in Chester County, Pennsylvania based on a bulletin given over a police radio broadcast describing Mr. Poe's car. As he was handcuffed, Mr. Poe blurted out that what he had done was an accident and that he loved kids. While being transported to the police barracks nearby, Mr. Poe blurted out that he "`was holding the gun in the air and the gun went off.'"
At the close of all the evidence at trial, Judge Cole instructed the jury on the doctrine of transferred intent as it applied to the homicide of Kimberly. Judge Cole explained to the jury that if they believed that the defendant willfully, deliberately and with premeditation intended to kill Ms. Poe, then they could find Mr. Poe guilty of first degree murder of Kimberly. In other words, if the jury would have convicted Mr. Poe of first degree murder of Ms. Poe had she died as a result of the shot, they could convict Mr. Poe *503 of first degree murder of Kimberly, because the intent to kill Ms. Poe transfers to Kimberly, the unintended victim. The jury found the defendant guilty of first degree murder of Kimberly and guilty of attempted first degree murder of Ms. Poe.
At the defendant's sentencing hearing, Judge Cole heard statements from the defendant, members of his family, and members of Kimberly's family, in addition to reading several letters on behalf of the defendant. The trial judge weighed the evidence, the testimony, the seriousness of the crimes, the impact they had upon the families, and the fact that Mr. Poe had no prior criminal record. The judge also made reference to his belief in "good old-fashioned law and order [and] the Bible." The judge then sentenced Mr. Poe to a term of life imprisonment without the possibility of parole for the murder of Kimberly and a consecutive 30-year sentence for the attempted murder of his estranged wife.
Mr. Poe's convictions were affirmed by the Court of Special Appeals. Poe v. State, 103 Md.App. 136, 652 A.2d 1164 (1994). We granted certiorari to consider the appropriateness of the trial court's instructions on the doctrine of transferred intent and the trial judge's reference to the Bible in sentencing the defendant.
II.
The trial court instructed the jury on the doctrine of transferred intent in pertinent part as follows:
"If I intend to kill ... Karen in this case, and my mark's not good, or bullet goes through, and I kill somebody else, and they die instead of Karen, that's still first degree murder on the second one because the law does not protect a person who has a bad aim or is unfortunate enough to have the bullet go through the first. That is called transferred intent. The intent follows the bullet."
Mr. Poe contends on appeal that the lower courts erred in ruling that the doctrine of transferred intent applies where a defendant intends to kill A, shoots and wounds A, but kills B, an unintended victim, by that same shot.[1] Essentially, Mr. Poe argues that because he intended to and did shoot Ms. Poe and was convicted of her attempted murder, there is no intent left to transfer to Kimberly, the unintended victim. The defendant contends that he "used up" all of his intent on Ms. Poe, his targeted victim. In his brief Mr. Poe states:
"[W]hat is clear is that the [defendant] was charged with, and convicted of, attempted murder (first degree) of Karen Poe. The crime of attempted murder was complete.
As the State presented the evidence against the [defendant], and as the jury so found in its decision, the [defendant] deliberately, with premeditation, intended to kill his wife when he fired a shotgun shell at her. Indeed, the shell did hit her; she was lucky to have survived. The same mens rea was involved whether Karen Poe lived or died. The [defendant] had accomplished the intended physical result of shooting his wife. * * * There was no intent left to transfer from Karen Poe to Kimberly Rice."
We do not agree. The defendant is correct that "the crime of attempted murder [of Ms. Poe] was complete" when he fired the shotgun at her. The defendant fails to recognize, however, that his intent was to murder, not to attempt to murder. Since Mr. Poe killed Kimberly, his intent to murder was "transferred" from Ms. Poe to Kimberly. We agree with the State that the passing of the bullet through the arm of the intended victim before killing the unintended victim does not alter or negate the application of the doctrine of transferred intent. A fortiori, this is a classic case of transferred intent.
In Ford v. State, 330 Md. 682, 625 A.2d 984 (1993), our most recent case interpreting the doctrine of transferred intent, we said that transferred intent links a defendant's mens rea as to the intended victim, with the killing of an unintended victim, and, in effect, "makes a whole crime out of two component *504 halves." 330 Md. at 710, 625 A.2d at 997. The obvious purpose behind this doctrine is to prevent a defendant from escaping liability for a murder in which every element has been committed, but there is an unintended victim. See Ford, 330 Md. at 714, 625 A.2d at 999.
We stated in Ford that transferred intent does not apply to attempted murder. Id. (disapproving application of the doctrine of transferred intent to attempted murder in State v. Wilson, 313 Md. 600, 546 A.2d 1041 (1988)). The doctrine of transferred intent is, of course, pure legal fiction. 1 WAYNE R. LAFAVE AND AUSTIN W. SCOTT, JR., SUBSTANTIVE CRIMINAL LAW § 3.12(d), at 399 (2d ed.1986). It is analogous to the doctrine of felony murder which is also a legal fiction. Both doctrines are used to impose criminal liability for unintended deaths. See Gladden v. State, 273 Md. 383, 404, 330 A.2d 176, 188 (1974) ("In homicide cases ... the doctrine of `transferred intent' performs a function equivalent to that applied under the felony-murder rule." (Footnote omitted)). Clearly, there is no crime of attempted felony murder when no death occurs during the course of a felony. Bruce v. State, 317 Md. 642, 646-47, 566 A.2d 103, 105 (1989). Likewise, the doctrine of transferred intent does not apply to attempted murder when there is no death.
Petitioner tries to unduly stretch our holding in Ford that the doctrine of transferred intent is inapplicable to attempted murder. We reject Poe's argument that because he completed the crime of attempted murder of his intended victim, the doctrine of transferred intent does not apply to the death of another person. In Ford, we made clear that if a defendant intends to kill a specific victim and instead wounds an unintended victim without killing either, the defendant can be convicted only of the attempted murder of the intended victim and transferred intent does not apply.[2] 330 Md. at 714, 625 A.2d at 999. This is not true where, as in the case sub judice, the defendant intends to murder one victim and instead kills an unintended victim. Here, transferred intent applies because there is a death and the doctrine is necessary to impose criminal liability for the murder of the unintended victim in addition to the attempted murder of the intended victim. See Ruffin v. United States, 642 A.2d 1288, 1294-95 (D.C.App.1994) (discussing Ford and upholding the conviction of defendant for first degree murder of unintended victim under the doctrine of transferred intent where defendant only wounded intended victim). In Ford, this Court asserted that the doctrine is used when the defendant fails to commit the crime intended upon the targeted victim and completes it upon another. 330 Md. at 711, 625 A.2d at 998. Thus, the doctrine should be applied to the instant case.
The doctrine of transferred intent is typically applied where a defendant, intending to kill A, shoots at but misses A and instead kills B, an unintended victim. See Gladden, 273 Md. at 390-92, 330 A.2d at 180-81, and cases cited therein. Mr. Poe asserts that his intent to murder cannot be transferred when the shot hits the intended victim and also kills an unintended victim. Mr. Poe's interpretation of the application of transferred intent is too narrow. We hold that transferred intent applies to the death of Kimberly notwithstanding the fact that Mr. Poe actually hit and wounded Ms. Poe.[3] The relevant inquiry in determining the applicability of transferred intent is limited to what could the defendant have been convicted of had he accomplished his intended act? See Gladden, 273 Md. at 393, 330 A.2d at 181. *505 Since Mr. Poe could have been convicted of first degree murder of Ms. Poe had she died, it was proper for the trial court to instruct the jury on the doctrine of transferred intent for the killing of Kimberly.[4]
III.
The defendant's second contention is that the trial judge sentenced him based upon the judge's "own personal religious or moral standard, and in spite of any evidence to mitigate punishment." Although the trial judge made statements regarding his own moral and religious beliefs, he also properly considered all mitigating factors and imposed a sentence that was well within the scope of the trial judge's authority. Accordingly, we find no error in Mr. Poe's sentence.
A judge is vested with very broad discretion in sentencing criminal defendants, Logan v. State, 289 Md. 460, 480, 425 A.2d 632, 642 (1981), and "is accorded this broad latitude to best accomplish the objectives of sentencingpunishment, deterrence, and rehabilitation." State v. Dopkowski, 325 Md. 671, 679, 602 A.2d 1185, 1189 (1992). Accord Jones v. State, 336 Md. 255, 265, 647 A.2d 1204, 1209 (1994). A judge should fashion a sentence based upon the facts and circumstances of the crime committed and the background of the defendant, Dopkowski, 325 Md. at 679, 602 A.2d at 1189, including his or her reputation, prior offenses, health, habits, mental and moral propensities, and social background. Bartholomey v. State, 267 Md. 175, 193, 297 A.2d 696, 706 (1972). As we explained in Johnson v. State, 274 Md. 536, 336 A.2d 113 (1975), a trial judge may base the sentence on "perceptions ... derived from the evidence presented at the trial, the demeanor and veracity of the defendant gleaned from his various court appearances, as well as the data acquired from such other sources as the presentence investigation or any personal knowledge the judge may have gained from living in the same community as the offender." 274 Md. at 540, 336 A.2d at 115-16 (footnotes omitted). A trial judge's discretion is limited only by constitutional standards and statutory limits. The ultimate determination must not be motivated by ill-will, prejudice, or other impermissible considerations. Dopkowski, 325 Md. at 680, 602 A.2d at 1189; Teasley v. State, 298 Md. 364, 370, 470 A.2d 337, 340 (1984).
At the sentencing hearing in the instant case, Judge Cole heard testimony from the defendant's father, two of his aunts, his girlfriend Doreen Jester, Ms. Poe, and Mr. Poe himself regarding Mr. Poe's good character and non-violent nature. The judge also read letters from members of Mr. Poe's family asking Judge Cole to be lenient in sentencing Mr. Poe, and stating that he felt deep remorse for what had happened. Judge Cole then heard testimony from Kimberly's mother and grandmother who described how the loss of this young child has affected their lives. In addition, the trial judge considered the evidence adduced at trial, the witnesses who testified at trial, and the defendant's lack of a prior criminal record in order to aid him in formulating Mr. Poe's sentence. The judge then stated that he did not believe the defendant's contention that the shooting was an accident, and noted the gravity of the offense of killing an innocent child. Based upon all of the evidence before him, the judge believed that Mr. Poe's intent was to kill his wife and that he deliberately and with premeditation fired the shotgun at her. Finally, before announcing the sentence to be imposed on Mr. Poe, the trial judge remarked:
"That's what irritates me today with this liberal philosophy. I guess I'm a dinosaur. I'm still old-fashioned. Maybe my time is gone, maybe. I still believe in good old-fashioned law and order, the Bible, and a lot of things that people say I shouldn't believe anymore. Perhaps I am a dinosaur sitting here, but I'm not going to change. Maybe one day they will say you *506 should not sit here any more because you are too much of a dinosaur. You are too conservative in criminal law. You believe too much in the Bible and law and order."
The trial judge found no mitigating factors that outweighed Mr. Poe's egregious act and sentenced the defendant to life without the possibility of parole for the murder of Kimberly and a consecutive 30-year sentence for the attempted murder of Ms. Poe.
In U.S. v. Bakker, 925 F.2d 728 (4th Cir. 1991), the Fourth Circuit held that the sentencing judge improperly asserted his own personal religious beliefs in sentencing the well-known televangelist James Bakker. That judge stated: "`He had no thought whatever about his victims and those of us who do have a religion are ridiculed as being saps from money-grubbing preachers or priests.'" Bakker, 925 F.2d at 740 (emphasis omitted). The court remanded to the district court for resentencing because it believed that the sentence imposed "may have reflected the fact that the court's own sense of religious propriety had somehow been betrayed." Bakker, 925 F.2d at 741. Although the court found an "explicit intrusion of personal religious principles as the basis of a sentencing decision," the court also recognized "that a trial judge on occasion will misspeak during sentencing and that every ill-advised word will not be the basis for reversible error." Id. We do not believe the remarks made in the instant case were as extreme as those made in Bakker, nor do we believe that Judge Cole's comments reflected that his personal religious beliefs had been betrayed. See Gordon v. State, 639 A.2d 56 (R.I.1994) (holding that biblical reference by sentencing judge did not suggest bias). Reversal is therefore not warranted in the instant case.
In recognizing a trial judge's very broad discretion in sentencing, we by no means express approval of the remarks made by Judge Cole pertaining to his own personal religious and moral beliefs. Nonetheless, we find that the sentence imposed upon the defendant was not motivated by ill-will, prejudice, or other impermissible considerations. Because we believe that the trial judge acted within the limits of his broad discretionary powers in sentencing Mr. Poe, we find no abuse of discretion.
For the reasons indicated, we hold that the doctrine of transferred intent was properly applied to the instant case and the trial judge properly sentenced the defendant.
JUDGMENT AFFIRMED. COSTS TO BE PAID BY PETITIONER.
RAKER, Judge, concurring.
I concur in the judgment of the Court and in the majority's conclusion that the doctrine of transferred intent applies to the death of Kimberly notwithstanding the fact that James actually hit and wounded Karen. I write separately to make clear what I believe the Court is not holding.
I do not believe that the Court intends, by today's decision, to endow the dicta in Part II.C of its opinion in Ford v. State, 330 Md. 682, 708-18, 625 A.2d 984, 996-1001 (1993), with the binding effect of a holding. The central issue in Ford was whether the evidence was sufficient for a jury to find the defendant possessed the specific intent to disable required for a conviction of assault with intent to disable. We concluded that the evidence was sufficient to affirm the conviction. The doctrine of transferred intent arose only as "a somewhat collateral issue," id. at 708, 625 A.2d at 1001, merely providing an alternative basis for affirming the conviction. See Ruffin v. United States, 642 A.2d 1288,1293 (D.C.1994).[1] Although Ford questioned the rationale for our decision in State v. Wilson, 313 Md. 600, 546 A.2d 1041 (1988), which recognized application of the transferred intent doctrine to attempted murder, Ford did not, and could not in dicta, overrule Wilson.[2]
*507 I believe the majority's assertion that "the doctrine of transferred intent does not apply to attempted murder when there is no death," maj. op. at 504, is overly broad. I do not interpret Ford to preclude all applications of transferred intent to the offense of attempted murder. Reading the language in Ford together with our holding in Wilson, I believe the correct interpretation is that transferred intent should not apply to attempted murder if no one is injured. See Harrod v. State, 65 Md.App. 128, 137, 499 A.2d 959, 963 (1985); see also State v. Martin, 342 Mo. 1089,119 S.W.2d 298, 302 (1938); but see State v. Gillette, 102 N.M. 695, 699 P.2d 626 (Ct.App.1985) (applying transferred intent to attempted murder where no one was injured).
The majority attempts to bolster its narrow interpretation of the doctrine of transferred intent by drawing an analogy between transferred intent and felony murder. Maj. op. at 504. The majority maintains that transferred intent and felony murder are essentially equivalent because they serve the same purpose, i.e., "to impose criminal liability for unintended deaths." Id. Next, the majority asserts, correctly, that felony murder is inapplicable if no death results. Id. The majority therefore concludes that transferred intent is also inapplicable when no death results. Id.
Although this argument appears unassailable, it is unsound because it depends on a false premise. Therefore, while the deductive logic of the argument is valid, it leads to a false conclusion. The argument is based on the proposition that transferred intent and felony murder are interchangeable doctrines. On the contrary, although transferred intent and felony murder serve similar purposes in homicide cases, the doctrines are not interchangeable. See People v. Carlson, 37 Cal.App.3d 349, 112 Cal.Rptr. 321, 323-24 (1 Dist.1974); see also R. Perkins & R. Boyce, Criminal Law 922-24 (3d ed.1982). Transferred intent can only function to "shift" the defendant's intent from one object to another, while felony murder may be used to imply an intent from the defendant's act of committing a felony. See infra note 3; see also Carlson, 112 Cal.Rptr. at 323-24 ("the effect of the felony-murder rule is to withdraw from the trier of fact the issue of malice and thus relieve the trier of fact from the necessity of finding one of the elements of the crime of murder."). Therefore, it does not follow that transferred intent is subject to the same limitations as felony murder.
Furthermore, neither history nor policy supports the majority's limitation of transferred intent to cases resulting in death. Both English and American common law support applying the doctrine of transferred intent to situations where innocent third parties are non-fatally injured. In State v. Thomas, 127 La. 576, 53 So. 868 (1911), the Supreme Court of Louisiana traced the English common law history of the doctrine of transferred intent, citing a number of English cases that held transferred intent applied when bystanders received non-fatal injuries. Id. 53 So. at 871. The Thomas court quoted an opinion by Lord Coleridge, Regina v. Latimer, 17 Q.B.D. 359 (1886), which stated:
It is common knowledge that a man who has an unlawful and malicious intent against another, and, in attempting to carry it out, injures a third person, is guilty of what the law deems malice against the person injured, because the offender is doing an unlawful act, and has that which the judges call general malice, and that is enough.
53 So. at 871 (emphasis added)[3]; see also W. Clark & W. Marshall, A Treatise on the Law *508 of Crimes § 5.04, at 274-75 (M. Barnes ed., 7th ed.1967). Based on a thorough review of the English law, the Thomas court concluded that the majority of cases permitted transferred intent to be applied in cases where no death resulted. 53 So. at 871.
Historically, American courts, following the English precedents, have also applied the doctrine of transferred intent to cases where a third party was injured but not killed. See, e.g., Thomas, 53 So. 868; McGehee v. State, 62 Miss. 772, 52 Am.Rep. 209 (1885); State v. Gilman, 69 Me. 163, 31 Am.Rep. 257 (1879). For example, in State v. Gilman, 69 Me. 163, 31 Am.Rep. 257 (1879), the Supreme Court of Maine was asked to determine whether the doctrine of transferred intent could be applied to the offense of assault with intent to kill. The defendant, Gilman, shot into a crowd intending to kill Noyes, but instead wounded a bystander, Flood. Relying on the seminal English case of Regina v. Smith, Dears C.C. 559 (1855), the court held that transferred intent applied, and affirmed Gilman's conviction of assault with intent to kill Flood. See also McGehee, 52 Am.Rep. at 210.
More recently, the District of Columbia Court of Appeals also concluded that the doctrine of transferred intent applied to the offense of assault with intent to kill. Ruffin v. United States, 642 A.2d 1288 (D.C.1994). In reaching this conclusion, the court relied in part on our decisions in Ford and Wilson.[4] In Ruffin, the defendant participated in a drive-by shooting on a public street, which resulted in a non-fatal injury to the intended victim (Younger), a fatal injury to one by stander (Williams), and a non-fatal injury to another bystander (Walker). The defendant was convicted of assault with intent to kill Younger and, applying transferred intent, first-degree murder of Williams and assault with intent to kill Walker. The defendant argued, based on Ford, that he could not be convicted of assault with intent to kill Walker because he had completed the crime of assault with intent to kill against his intended victim, Younger. The court rejected this view, explaining:
[E]ven if we adopted the reasoning in Ford for the purpose of determining this appeal, we would not reverse appellant's conviction for AWIKWA [assault with intent to kill while armed] against Dwayne Walker. This is because the Ford court does not abandon the result it reached in Wilson, supra, (upholding convictions for attempted murder vis-a-vis the intended victim and the injured bystander), but rather provides that ... a defendant can be convicted of murder or assault with intent to kill of bystander victims even where the defendant has been convicted of murder or assault with intent to kill against the intended victim ... `[w]here the means employed to commit the crime against a primary victim [e.g., a hail of gunfire] creates a zone of harm around that victim.'
642 A.2d at 1298. Thus, the court concluded that although neither the intended victim nor the unintended victim was killed, transferred intent could be applied to permit conviction for assault with intent to kill the unintended victim. Id. at 1293 n. 8.[5]
*509 In addition, the policy rationale for the doctrine of transferred intent is to ensure proportionate punishment of criminal offenses, and to prevent criminals from escaping culpability due to "poor aim" or mistaken identity. See, e.g., People v. Birreuta, 162 Cal.App.3d 454, 208 Cal.Rptr. 635, 639 (5 Dist.1984). This rationale supports application of the doctrine regardless of whether the resulting injury to a bystander is fatal or non-fatal.
If the majority's opinion is interpreted to preclude any use of the doctrine of transferred intent in attempted murder prosecutions, the effect of the decision will be to substantially increase the difficulty of prosecuting criminals for the harm inflicted on innocent bystanders. For example, consider a hypothetical drive-by shooting similar to the incident in Ruffin: a defendant, A, participates in a drive-by shooting on a public street, intending to kill B, but instead non-fatally injuring B, and non-fatally injuring bystander C. Although A may be convicted of attempted murder of B, it will be difficult to convict A of the attempted murder of C, or of assault with intent to kill C. Without transferred intent, the State will be required to offer separate proof of intent for each victim, e.g., by demonstrating "depraved heart." While firing a "hail of bullets" at a person on a busy street may be prima facie evidence of a depraved heart, numerous factual situations may arise where it will be difficult to demonstrate recklessness.[6]See, e.g., State v. Gillette, 102 N.M. 695, 699 P.2d 626 (Ct.App.1985) (poisoned soda can mailed to one person, but two other unintended victims also drank from it); People v. Carlson, 37 Cal.App.3d 349, 112 Cal.Rptr. 321 (1 Dist.1974); cf. People v. Gaither, 173 Cal.App.2d 662, 343 P.2d 799 (2 Dist.1959) (defendant sent poisoned candy to ex-wife; she ate none, but four of seven members of her household ate the candy), cert. denied, 362 U.S. 991, 80 S.Ct. 1082, 4 L.Ed.2d 1023 (1960).
For the foregoing reasons, I believe it is important to clarify that our holding, as I understand it, simply means that transferred intent may be applied to first-degree murder of a bystander, regardless of whether the defendant also injured his intended victim. Although the majority's explanatory dicta on the theory underlying the transferred intent doctrine provides useful clarification of our prior decisions, I do not believe the majority intends by these statements to overrule Wilson sub silentio.
I am authorized to state that Judges RODOWSKY and KARWACKI join in the views expressed herein.
NOTES
[1] We note that the defendant argues only that his conviction for the first degree murder of Kimberly should be reversed. He has not asked this Court to vacate his sentence for the attempted murder of Ms. Poe.
[2] The rationale is that the crime of attempted murder of the intended victim is complete regardless of whether he hits his target and thus, there is no need to invoke the doctrine. Ford v. State, 330 Md. 682, 714 n. 13, 625 A.2d 984, 999 n. 13 (1993) ("the crime is complete before the projectile reaches its target").
[3] Judge McAuliffe foresaw this precise scenario in his concurrence in Ford and anticipated the holding we reach today in the instant case:
"Assume, for example, that the defendant, intending to kill A, shoots and wounds him, but the bullet passes through A and kills B. Under the Court's theory, I assume the defendant would be guilty of the murder of B, although also guilty of attempted murder or assault with intent to murder A."
Ford, 330 Md. at 726, 625 A.2d at 1005 (McAuliffe, J., concurring).
[4] Judge Raker writes separately to explain why she agrees with the concurring opinion in Ford, 330 Md. at 723, 625 A.2d at 1004. In Ford, we stated that the doctrine of transferred intent was inapplicable to the offense of attempted murder where there is no death. In the instant case, we hold that the doctrine of transferred intent is applicable to the offense of murder where there is an unintended death. The only reason why Ford is discussed is to explain why the defendant's reliance on that case is misplaced and why Ford is inapposite to the instant case.
[1] Judge McAuliffe's concurring opinion in Ford (joined by Judges Karwacki and Rodowsky) described the Court's "newly announced limitation on the doctrine of transferred intent" as dictum. 330 Md. at 726, 625 A.2d at 1005. Cf. Brooks v. United States, 655 A.2d 844, 846-47 & n. 7 (D.C.1995) (status of Wilson unclear in light of subsequent cases).
[2] Three years before Ford was decided, in State v. Earp, 319 Md. 156, 571 A.2d 1227 (1990), we relied on Wilson for the proposition that "[t]he specific intent that is required [for attempted murder] may be a `transferred' intent, that is, the mens rea of a defendant as to his intended victim will be transferred to an unintended victim who suffers injury as a result of the defendant's attempt." Id. at 163, 571 A.2d at 1231.
[3] Lord Coleridge also noted in Latimer that "but for Regina v. Pembliton, there would not have been the slightest difficulty" in deciding the transferred intent issue. Thomas, 53 So. at 871 (quoting Regina v. Latimer, 17 Q.B.D. 359 (1886)). He distinguished Pembliton, 2 L.R., C.C.R. 119, [1874-1880] All E.R.Rep. 1163 (1874), because it involved not only a transfer of intent from one victim to another, but also a change in the nature of the intent. Thomas, 53 So. at 871 (citing Regina v. Latimer, 17 Q.B.D. 359 (1886)). In Pembliton, the defendant threw a rock at people standing in the street, but missed them and broke a window. [1874-1880] All E.R.Rep. at 1164. The court held that transferred intent could not be applied to the offense of unlawful and malicious property damage because the defendant never intended to damage property. Id. at 1163.
Perkins and Boyce similarly distinguish between transfers of intent involving the "same mental pattern," i.e., where only the object of the intent is shifted, and transfers of intent involving a "different mental pattern," i.e., where the crime intended differs from the crime committed. Perkins & Boyce, supra, at 922-23. Only the first category can accurately be described as "transferred intent." In mathematical terms, transferred intent may be used to effect a "translation" of intent, but not a "transformation." See D. Riddle, Calculus and Analytic Geometry 261 (3d ed. 1979).
[4] By statute, the District of Columbia has adopted the common law of Maryland as it existed in 1801. Ruffin, 642 A.2d at 1294, n. 9. The court in Ruffin did not address the issue of whether case law subsequent to 1801 also has binding effect under the statute, but the District of Columbia relied on our decision in Gladden v. State, 273 Md. 383, 330 A.2d 176 (1974), in adopting the doctrine of transferred intent. 642 A.2d at 1293 n. 8.
[5] The court relied on our decision in Wilson for the proposition that "the doctrine of transferred intent also applies to non-fatal assaults." Ruffin, 642 A.2d at 1293 n. 8.
[6] As we observed in Robinson v. State, 307 Md. 738, 517 A.2d 94 (1986), "although `depraved heart' murder does not require that more than one life be placed in imminent danger," id. at 751, 517 A.2d at 101, more than "mere negligence" must be shown. We stated that:
`[D]epraved heart' means something more than conduct amounting to a high or unreasonable risk to human life. The perpetrator must [or reasonably should] realize the risk his behavior has created to the extent that his conduct may be termed wilful. Moreover, the conduct must contain an element of viciousness or contemptuous disregard for the value of human life.
Id. at 745, 517 A.2d at 98 (quoting R. Gilbert & C. Moylan, Maryland Criminal Law: Practice and Procedure § 1.6-3 (1983)).
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T.C. Summary Opinion 2005-36
UNITED STATES TAX COURT
LEROY J. KLINGAMAN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 19122-03S. Filed March 30, 2005.
Leroy J. Klingaman, pro se.
Miriam C. Dillard and Sandra K. Reid, for respondent.
PANUTHOS, Chief Special Trial Judge: This case was heard
pursuant to the provisions of section 7463 of the Internal
Revenue Code in effect when the petition was filed. The decision
to be entered is not reviewable by any other court, and this
opinion should not be cited as authority. Unless otherwise
indicated, all subsequent section references are to the Internal
Revenue Code in effect at relevant times, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
- 2 -
Respondent determined a deficiency of $998 in petitioner’s
2001 Federal income tax. The issue for decision is whether
petitioner’s gross income includes unreported gambling winnings
and Social Security benefits as determined by respondent.
Background
Some of the facts have been stipulated, and they are so
found. The stipulation of facts and the attached exhibits are
incorporated by this reference. At the time of filing the
petition, petitioner resided in Leesburg, Florida.
In taxable year 2001, petitioner was retired and received
Social Security benefits of $11,088. During the year, petitioner
and a companion traveled throughout the United States to visit
friends and members of petitioner’s family. Petitioner
frequented various casinos to play the slot machines “as a
recreation” during his travels.
Third party information returns (Forms W-2G, Certain
Gambling Winnings) reflect that petitioner received the following
gambling winnings in 2001:
Payor Gambling Winnings
Little River Casino Resort $2,400
Imperial Palace of Mississippi 2,500
Beau Rivage Resorts, Inc. 1,440
Florida Department of the Lottery 1,000
Total 7,340
- 3 -
Petitioner had gambling losses in 2001 in excess of his gambling
winnings.1
On his timely filed 2001 Federal income tax return,
petitioner did not report any gambling winnings or Social
Security benefits. Petitioner’s 2001 return reflects $14,119 in
adjusted gross income, consisting of $13,657 in pension payments,
$39 in taxable interest, $916 of ordinary dividends, and a
capital loss of $493. Petitioner claimed the applicable standard
deduction of $5,650.
In a notice of deficiency, respondent determined that
petitioner received $7,340 in unreported gambling winnings and
$1,002 in unreported taxable Social Security benefits (following
a computational adjustment to petitioner’s adjusted gross
income). Further, respondent determined that petitioner is
entitled to deduct gambling losses of $7,340.
1
Petitioner admits that he received additional gambling
winnings of less than $1,200 on several occasions that were not
subject to information reporting. See sec. 7.6041-1(a),
Temporary Income Tax Regs., 42 Fed. Reg. 33286 (June 30, 1977);
see also Lyszkowski v. Commissioner, T.C. Memo. 1995-235
(describing the information reporting requirements for slot
machine jackpots), affd. without published opinion 79 F.3d 1138
(3d Cir. 1996). Respondent’s determination of the deficiency was
limited to the gambling winnings subject to information
reporting, and petitioner’s other winnings are not at issue in
this case.
- 4 -
Discussion
In general, the Commissioner’s determination set forth in a
notice of deficiency is presumed correct, and the taxpayer bears
the burden of showing that the determination is in error. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). However,
in certain circumstances, if the taxpayer introduces credible
evidence with respect to any factual issue relevant to
ascertaining the proper tax liability, section 7491 places the
burden of proof on the Commissioner. Sec. 7491(a)(1). Section
7491(a)(1) applies only if an individual taxpayer complies with
substantiation requirements, maintains all required records, and
cooperates with reasonable requests by the Commissioner for
witnesses, information, documents, meetings, and interviews.
Sec. 7491(a)(2).
In this case, section 7491 is inapplicable because
petitioner did not introduce any credible evidence with respect
to the gambling winnings and Social Security benefits and failed
to comply with the substantiation and recordkeeping requirements.
The burden of proof remains on petitioner to show that
respondent’s determination is in error.
A. Gambling Winnings and Losses
Section 61(a) provides that gross income includes all income
from whatever source derived unless excludable by a specific
provision of the Code. No specific code section excludes
- 5 -
gambling winnings from gross income. Section 165(d) permits a
deduction for gambling losses, but only to the extent of gambling
winnings.
Petitioner concedes that he “was paid” the amount of
gambling winnings reported by the various casinos. Petitioner’s
only argument is that he owes tax on only a portion of the
gambling winnings because he split them with his traveling
companion. As petitioner testified: “This lady friend of mine
and I were traveling * * * we went from one casino from another.
We figured out how much we could spend and so we’d spend that and
we’d share it [the winnings] * * * I just took the money and then
I gave it to her.” Petitioner did not identify by name the
person with whom he purportedly split his gambling winnings and
did not offer any proof that he split any of his gambling
winnings. Further, there is no evidence that a Form W-2G was
issued to petitioner’s companion, and petitioner testified that
his companion did not report any of the gambling winnings on her
2001 return.2 Given the lack of evidence to support petitioner’s
claim that he split the gambling winnings, we sustain
2
Since petitioner received Forms W-2G, we assume that
petitioner filled out a Form 5754, Statement by Person(s)
Receiving Gambling Winnings, upon winning slot machine jackpots
of $1,200 or more. A Form 5754 not only is used to identify the
winner of the jackpot, but it may be used to report that the
winnings are shared among a group of people. Given the
circumstances of this case, it seems reasonable to conclude that
petitioner did not report on the Form 5754 that he was splitting
the winnings among others.
- 6 -
respondent’s determination that petitioner must include $7,340 of
gambling winnings in gross income. We further sustain
respondent’s determination that petitioner is entitled to deduct
gambling losses of $7,340.3
B. Social Security Benefits
Section 86 taxes Social Security benefits pursuant to
formula. If the sum of the taxpayer’s adjusted gross income
(with modifications not relevant here) and one-half of the Social
Security benefits received during the year exceeds the applicable
“base amount”, then a portion of the Social Security benefits is
includable in gross income. Sec. 86(a) and (b). For 2001, the
base amount was $25,000 for an unmarried taxpayer not filing a
joint return. Sec. 86(c)(1). Once a taxpayer exceeds this base
amount threshold, Social Security benefits are includable in
income in an amount equal to the lesser of (1) one-half of the
Social Security benefits received during the year or (2) one-half
of the amount by which the taxpayer’s modified adjusted gross
income plus one-half of the Social Security benefits received
during the year exceeds the $25,000 base amount. Sec. 86(a). An
additional amount of Social Security benefits may be includable
3
The standard deduction for 2001 is $5,650; thus
petitioner will receive some tax benefit from an itemized
deduction of $7,340. Petitioner had no other itemized deductions
for 2001.
- 7 -
in income under certain circumstances not applicable to this
case. Sec. 86(a)(2).
With the inclusion of $7,340 in gambling winnings,
petitioner’s adjusted gross income is $21,459. The sum of
petitioner’s adjusted gross income of $21,459 and one-half of
petitioner’s Social Security benefits of $5,544 exceeds the
$25,000 base amount threshold by $2,003. Since the amount of
Social Security benefits includable in income is equal to the
lesser of (1) one-half of the Social Security benefits received
of $5,544 or (2) one-half of the amount by which petitioner’s
modified adjusted gross income plus one-half of Social Security
benefits received during the year exceeded the $25,000 base
amount, or $1,002 (one-half of $2,003, rounded to the nearest
whole dollar), we sustain respondent’s determination that
petitioner must include $1,002 of Social Security benefits in
gross income.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered for
respondent.
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887 F.2d 265
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.Eugene HUBBLE, Petitioner-Appellant,v.John DUNCAN, Warden, Respondent-Appellee,Fred Cowan, Attorney General, Respondent.
No. 89-6173.
United States Court of Appeals, Sixth Circuit.
Oct. 16, 1989.
Before KEITH, MILBURN and ALAN E. NORRIS, Circuit Judges.
ORDER
1
This appeal has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit.
2
A review of the documents before the court indicates that appellant appealed from an order denying bail prior to the district court's ruling on his 28 U.S.C. Sec. 2254 habeas corpus proceeding. Such an order is not appealable but the notice of appeal may be treated as a petition for writ of mandamus. Woodcock v. Donnelly, 470 F.2d 93, 94 (1st Cir.1972) (per curiam). The remedy of mandamus is a drastic one to be invoked only in extraordinary situations where the petitioner can show a clear and indisputable right to the relief sought. Will v. Calvert Fire Ins. Co., 437 U.S. 655, 662 (1978). Such an indisputable right to bail has not been shown in the instant case.
3
Accordingly, it is ORDERED that the appeal be dismissed for lack of jurisdiction. Rule 9(b)(1), Rules of the Sixth Circuit. Treating the notice of appeal as a petition for writ of mandamus, such petition is denied.
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762 F.Supp. 10 (1991)
Ageliki Apostolopoulou THEORDROS as personal representative of deceased seaman Antonios Vassiliou and of Antonios Vassiliou, a minor child, Ageliki Apostolopoulou, Plaintiffs,
v.
FARIDA SHIPPING, INC., A & C Anastassiou Ship Management Ltd., Aegean Maritime Agencies, Inc., et al., Defendants.
Civ. No. 90-1385 (JAF).
United States District Court, D. Puerto Rico.
April 10, 1991.
*11 Harry Ezratty, San Juan, P.R., for plaintiffs.
Antonio M. Bird, Jr., Bird Bird & Hestres, San Juan, P.R., for defendants.
OPINION AND ORDER
FUSTE, District Judge.
This action arises from the death of seaman Antonios Vassiliou, a Greek national. Plaintiffs are members of decedent's family suing in both their personal and representative capacities. Defendants are the owners and operators of the ship, the Zoe Christina. The jurisdiction of this court is invoked pursuant to section 20 of the Jones Act of 1920, as amended, 46 U.S.C. App. § 688 (1990). Defendants Farida Shipping, Inc. ("Farida") and A & C Anastassiou Ship Management, Ltd. ("Anastassiou") have filed a motion to dismiss arguing that defendants' contacts with the United States are insufficient to state a cause of action under the Jones Act or the general maritime law of the United States.[1] Using the First Circuit's analysis in Kukias v. Chandris Lines, Inc., 839 F.2d 860 (1st Cir. 1988), we agree with defendants and therefore dismiss the action.
I. Facts and Procedural History
The incident which gave rise to this action allegedly occurred while decedent was a crew member aboard the ship Zoe Christina. During the relevant period defendant Farida was the owner of the Zoe Christina, a ship registered in Greece and flying the Greek flag. Defendant Anastassiou operated and managed the Zoe Christina for Farida. Both Farida and Anastassiou are Liberian corporations with their principal places of business outside of Puerto Rico. The known officers of both Farida and Anastassiou are citizens of Greece. The complaint also named as defendants Aegean Maritime Agencies, Inc. ("Aegean"), a corporation organized under the laws of New York; an unnamed medical doctor who treated decedent in Yabucoa, Puerto Rico; and the corporate insurance carriers.
In January, 1986, en route from Corpus Christi, Texas to Yabucoa, Puerto Rico, decedent complained of severe chest pains. Plaintiffs allege that, although decedent reported the pain to the vessel's master and chief mate, he was left unattended until the boat docked in Yabucoa where he was sent to defendant physician for treatment.
After examination, decedent was returned to the ship and judged by the doctor to be "fit for duty." Plaintiffs, however, claim that, for the remainder of the voyage, decedent continued to suffer from chest pains and experienced a myocardial infarction which required hospitalization in Greece on May 20, 1986. Subsequently, on October 30, 1987, he died.
Following seaman's death, the plaintiffs filed an action arising from the same nucleus of facts in a Texas state court. This state court action was dismissed for lack of jurisdiction.
Plaintiffs commenced this action on March 16, 1990. Defendants Farida and Anastassiou subsequently filed a motion to dismiss. Supporting their motion, defendants submitted affidavits from Marianthi Manginas, Vice-President of Farida, and Christos Bouloukos, Vice President of Anastassiou. Docket Document No. 2, Exhibits 1 and 2. In these affidavits, Manginas and Bouloukos both stated that Farida and Anastassiou were Liberian corporations; *12 that no United States citizens were directors or officers; that no American citizen held a financial interest in the corporations; and that all of the ship's crew, including decedent, were employed pursuant to the customary articles of agreement as recognized by the Greek Mercantile Marine. Boukoulos further clarified that, during the period of decedent's employment, the Zoe Christina was under a time charter to Flopec, an Ecuadorian government corporation, and it was Flopec who directed the ship's movement. Also, in their Reply to Plaintiff's Opposition to Defendants' Motion To Dismiss, defendants submitted a second affidavit from Bouloukos and appended a copy of the employment contract executed between decedent and Anastassiou on November 12, 1985 in Piraeus, Greece. The contract provided that any dispute that arose because of service on the ship would be brought before Greek courts.
II. Discussion
A. Jones Act Claim
Because we are considering a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), we are bound to read the allegations in the light most favorable to the plaintiffs, H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989), exempting "those `facts' which have since been conclusively contradicted by plaintiffs' concessions or otherwise." Chongris v. Board of Appeals, 811 F.2d 36, 37 (1st Cir.1987). In Lauritzen v. Larsen, 345 U.S. 571, 583-591, 73 S.Ct. 921, 928-932, 97 L.Ed. 1254 (1953), the United States Supreme Court set forth a series of factors which should guide courts in their choice of law analysis as to both the Jones Act and general maritime law. These factors are: (1) the place of the wrongful act; (2) the law of the flag; (3) the allegiance or domicile of the injured seaman; (4) the allegiance of the defendant shipowner; (5) the place of the contract; (6) the inaccessibility of the foreign forum; and (7) the law of the forum. In addition, in a subsequent decision, the Supreme Court identified the shipowner's base of operations as an eighth factor which courts should include in its calculus and cautioned that the Lauritzen factors were "not intended as exhaustive." Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306, 309, 90 S.Ct. 1731, 1734, 26 L.Ed.2d 252 (1970); Kukias, 839 F.2d at 862. Here, applying the Lauritzen-Rhoditis test, we find that defendants Farida and Anastassiou have insuffici United States to state a cause of action under the Jones Act. As to the first factor, plaintiffs allege that decedent began experiencing severe chest pains in January, 1986 during the voyage from Texas to Puerto Rico. Decedent was then treated by a medical doctor in Puerto Rico. Following this treatment, he continued to experience distress during the rest of the Zoe Christina's voyage up until he was repatriated to Greece from Africa in May, 1986 at which time he was hospitalized. Aside from any potential malpractice committed by the doctor, any potential tortious activity committed by defendants Farida and Anastassiou would have occurred while the ship was not in United States territory. Even if we were to assume that the tort did, in fact, occur in United States waters, the Supreme Court has warned that the location of the wrongful acts is of limited application to shipboard torts, Lauritzen, 345 U.S. at 583, 73 S.Ct. at 928, and that "[t]he amount and type of recovery which a foreign seaman may receive from his foreign employer while sailing on a foreign ship should not depend on the wholly fortuitous circumstance of the place of injury." Romero v. International Terminal Operating Co., 358 U.S. 354, 384, 79 S.Ct. 468, 486, 3 L.Ed.2d 368 (1959). Therefore, even inferring that the tort was committed within United States territory, the first factor here should be given limited weight.
All of the other Lauritzen-Rhoditis factors weigh in favor of dismissal. At the time of the alleged tortious activity, the Zoe Christina was registered in Greece and flying the Greek flag. The decedent was a national of and domiciled in Greece. The contract of employment was executed in Greece. It is also clear from the employment contract that both parties agreed to settle disputes arising from the agreement in the courts of Greece, thereby evidencing *13 the availability of the foreign forum. And, as to the seventh factor, the law of the forum, here, like in Kukias, we have defendants who have involuntarily been made parties to the action. As such, this factor should count for little. Kukias, 839 F.2d at 863. All of these factors weigh in favor of the application of Greek law.
As to the fourth factor, the allegiance of the shipowner, whether we find Farida's and Anastassiou's allegiance was to Liberia, the place of incorporation, or we "look through the facade of foreign registration and incorporation to find the true ownership of the vessel," Villar v. Crowley Maritime Corp., 782 F.2d 1478, 1481 (9th Cir. 1986); Kukias, 839 F.2d at 862, and find that the shipowner's and operator's allegiance is to Greece, no facts are before the court that would allow us to infer that either corporation was created as a foreign shell by American interests to avoid being subject to American law. Kukias, 839 F.2d at 862. Therefore, this factor also weighs in favor of dismissal.
Finally, we must consider whether the defendants' base of operations should tip the scales in favor of the application of American law. In Rhoditis, 398 U.S. at 309-310, 90 S.Ct. at 1734-1735, the court examined the contacts that the shipowner had with the United States and found that they were substantial. The owner, himself, had been a permanent resident of the United States since 1952. A significant amount of the shipping originated and terminated in the United States. The Supreme Court therefore affirmed the Court of Appeals in holding that the shipowner was an "employer" for purposes of the Jones Act. Subsequent cases have also found that, where defendant shipowner's and operator's base of operations resulted in substantial contacts with the United States, they can be held liable under the Jones Act. Karvelis v. Constellation Lines S.A., 806 F.2d 49, 51 (2d Cir.1986) (Affirming the district court's decision that, where the foreign shipowners contracted with an American agent to manage the ship, to solicit cargo, and to receive and deposit payments in American banks, as well as evidence of some direct management involvement by foreign principals from United States shores, there were substantial United States contacts warranting application of the Jones Act.), cert. denied 481 U.S. 1015, 107 S.Ct. 1891, 95 L.Ed.2d 498 (1987); Antypas v. Cia. Maritima San Basilio, S.A., 541 F.2d 307, 308 (2d Cir.1976) (Substantial contact found where ship's agent is New York Corporation.), cert. denied, Compania Maritima San Basilio, S.A. v. Antypas, 429 U.S. 1098, 97 S.Ct. 1116, 51 L.Ed.2d 545 (1977); Mattes v. National Hellenic Am. Line, S.A., 427 F.Supp. 619 (S.D.N.Y.1977).
In Kukias, the First Circuit enunciated standards for the determination of whether defendants' contacts were "substantial" so as to warrant application of the Jones Act. The factual scenario in Kukias is quite similar to that of the present case. There, a Greek seaman, while sailing aboard a passenger vessel of Panamanian corporate ownership and registry, operated and managed by a Liberian corporation whose general passenger agent was a Delaware corporation, was injured when he fell down a stairway during a voyage from San Juan, Puerto Rico to St. Thomas, Virgin Islands. The seaman received medical treatment on the ship, in a hospital in St. Thomas and in Greece. In resolving the issue of the sufficiency of defendants' contacts with the United States, the court turned to an Eleventh Circuit case, Sigalas v. Lido Maritime, Inc., 776 F.2d 1512 (11th Cir.1985). The First Circuit adopted the reasoning of the court in Sigalas which found that the fact that the bulk of a ship's revenue came from American sources, without more, was not sufficient to justify the application of American law. Sigalas, 776 F.2d at 1518-1519; Kukias, 839 F.2d at 864. The court, in Kukias, found that there were not substantial contacts to establish an American base of operations even where
for a major portion of the year, the Victoria (the ship) embarks on weekly cruises from Puerto Rico; that substantial revenue from American sources is generated from the operation of the Victoria and is collected by a domestic corporation, Chandris, Inc.; that the vessel is supplied *14 with food and provisions in an American port; and that large sums are spent in advertising the Victoria in the United States.
Kukias, 839 F.2d at 864. The court in Kukias further ruled that even though "the base of operations is a significant factor," courts must continue to examine "the full range of factors relevant to choice-of-law determinations" and may decline to apply the Jones Act even where a shipowner had substantial domestic contacts. Kukias, 839 F.2d at 864.
Here, in the complaint, plaintiffs allege that Farida and Anastassiou are foreign corporations doing business in Puerto Rico. They make no further allegations as to defendants' contacts with the United States. While plaintiffs include Aegean, a New York corporation, as a defendant in the complaint, they allege no facts which would reveal Aegean's participation in the tortious activity other than the conclusory allegations that Aegean, individually or jointly, owned, operated, managed or controlled the Zoe Christina and was decedent's employer.
The affidavits of the corporate officers of Farida and Anastassiou attest to the fact that neither corporation has ever maintained a corporate office in the United States nor have the named officers ever resided in the United States. They further attest to the fact that no American citizen or resident owned a financial interest in either corporation nor were there any American crew members. They also state that Farida and Anastassiou did not maintain offices, had no telephone listings, neither owned nor rented property, did not maintain bank accounts and did not solicit or advertise for freight in the United States. And during most of decedent's time aboard the ship it was an Ecuadorian corporation that acted as the time charterer arranging the ship's itinerary. All of these facts lead us to conclude that defendants did not maintain a base of operations in the United States that would warrant the application of American law.
Plaintiffs argue that since the the Jones Act claim is linked to a medical malpractice claim against an unnamed Puerto Rico physician, the court should exert jurisdiction over all of plaintiffs' claims "in order to do justice." We disagree. In Mattes, 427 F.Supp. at 622, the court pointed out that "[t]he fact that plaintiff received initial medical treatment in the United States is simply not sufficiently `substantial' to justify application of American law." See Kukias, 839 F.2d at 863. Here, while plaintiffs may invoke the diversity jurisdiction of this court to file a malpractice action against the local physician, the court in Kukias thought it "unwise to allow the choice of law to be influenced by a factor, the place of hospitalization, which is only slightly less fortuitous than that of the place of the wrongful act." Kukias, 839 F.2d at 863. We follow the First Circuit's counsel and decline to allow the fact that decedent received treatment here, absent further support for the application of American law, to be controlling and dismiss plaintiffs' Jones Act claim as against Farida and Anastassiou.
B. Remaining Defendants
In plaintiffs' complaint, an unnamed physician from Yabucoa allegedly treated decedent during the voyage. Plaintiffs alleged as their fifth cause of action that this physician committed malpractice in the treatment of the decedent. However, the identity of this defendant remains unnamed. Also, as to Aegean, the only references to them are in the complaint where they are identified as a New York corporation who was allegedly the employer of decedent and an owner and/or operator of the Zoe Christina.
In the file, there is no proof of service as to these defendants as required by Rule 4 of the Federal Rules of Civil Procedure. As to the defendant physician, plaintiffs admitted that, as of May 24, 1990, his identity remained unknown to plaintiffs. As to Aegean, we have no proof of service as required by Rule 4.
Therefore, based on the evidence before us that the remaining defendants have never been served with process, pursuant to Fed.R.Civ.P. 4(j), we dismiss the action *15 without prejudice as to the remaining defendants.
III. Conclusion
In sum:
We dismiss the action as to defendants Farida and Anastassiou finding insufficient contacts with the United States to state a cause of action under the Jones Act.
We dismiss the action as to the remaining defendants pursuant to Fed.R.Civ.P. 4(j).
IT IS SO ORDERED.
NOTES
[1] Defendants also raised the issue of forum non conveniens and the statute of limitations defense as alternative bases for dismissal of plaintiffs' action. Because we dispose of the case on the ground of insufficient contacts, we make no ruling as to these alternate bases for dismissal.
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997 A.2d 792 (2010)
MOSS
v.
MILLER.
Pet. Docket No. 74.
Court of Appeals of Maryland.
Denied June 21, 2010.
Petition for writ of certiorari denied.
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568 F.2d 1
William Gregory BOWERS, Petitioner-Appellant,v.Donald BATTLES, Camp Supervisor, Harlan County ForestryCamp, Respondent-Appellee.
No. 77-1017.
United States Court of Appeals,Sixth Circuit.
Argued Oct. 19, 1977.Decided Dec. 22, 1977.
William M. Radigan, Frankfort (Court appointed), for petitioner-appellant.
Robert F. Stephens, Atty. Gen. of Kentucky, William W. Pollard, Asst. Atty. Gen., Frankfort, for respondent-appellee.
Before EDWARDS, CELEBREZZE and LIVELY, Circuit Judges.
LIVELY, Circuit Judge.
1
This appeal from denial of the writ of habeas corpus concerns the adequacy of a retrospective hearing on the issue of the petitioner's mental competence to stand trial. On May 17, 1971 Bowers pled guilty to a charge of murder in the Fayette County, Kentucky, Circuit Court. On recommendation of the Commonwealth's Attorney he was sentenced to life imprisonment by a jury. He was represented by retained counsel prior to, and at the time of his plea. After a pro se attempt at postconviction relief had been denied Bowers filed a second motion to vacate judgment with the assistance of the public defender. An evidentiary hearing was held on March 14, 1975 by the state judge who had accepted the guilty plea, and the motion was denied in an order entered March 18, 1975. The Supreme Court of Kentucky affirmed. Bowers v. Commonwealth, --- S.W.2d ---- (Ky.1976).
2
The district court denied habeas corpus relief upon consideration of the entire record of the state proceedings. On appeal the respondent concedes "that there were sufficient grounds for doubting the appellant's competency to stand trial to make it incumbent upon the trial court to order a due process competency hearing." It is argued, however, that the evidentiary hearing held on March 14, 1975 cured this defect. The petitioner-appellant, on the other hand, contends that the evidence which the trial judge heard at the postconviction hearing raised sufficient doubt concerning his competence at the time of his plea to require that the conviction be set aside.
3
Petitioner had a history of emotional problems and had been under the care of a psychiatrist several times between April 1968 and January 1970. The homicide which led to the charge against Bowers occurred on October 30, 1970. On November 9, 1970 the psychiatrist who had previously treated petitioner visited him in jail. This visit was arranged by petitioner's attorney who also requested the court to order an examination for the purpose of determining whether petitioner was competent to stand trial. In response to this motion the petitioner was sent to a state mental hospital for examination and evaluation. In a report to the committing court a psychologist at the state hospital who examined petitioner wrote, "Although Mr. Bowers is limited intellectually, he is capable of understanding the charges against him and of following the proceedings of a trial." The psychiatrist who discharged petitioner from the hospital for return to the court found that he was competent and could face his charges and stand trial. This report was made in January 1971.
4
A short time before the scheduled trial date in May 1971 petitioner was again interviewed in jail by his psychiatrist, Dr. Knepper, and his attorney. The psychiatrist and an associated psychologist then wrote a report in which they recited their belief that petitioner had experienced emotional and mental problems from early childhood and that he was still suffering from them. Describing petitioner's condition as "schizo-affective reaction," they recommended that he be "institutionalized or incarcerated for public safety and his own" and stressed the need for vocational rehabilitation. This report did not address the question of whether petitioner was able to comprehend court proceedings or assist in the conduct of his defense. The prosecuting attorney read this report to the jury after the guilty plea had been received to support his recommendation of life imprisonment rather than death, the other punishment then possible for willful murder in Kentucky.
5
At the March 1975 hearing Dr. Knepper testified concerning the petitioner's history of emotional problems and related his periods of erratic and irresponsible behavior to excessive use of alcohol. She again stressed the need for vocational rehabilitation. The witness testified that petitioner suffered from no organic brain disorder and diagnosed his condition as schizo-affective with paranoidal tendencies. Referring to her examination of petitioner in May 1971, the witness was asked whether or not she felt petitioner "was able to aid and assist his attorney in the defense of his case on May 17, 1971 . . . ." She answered, "I think he probably was by that time. He had been in a protected environment." This inquiry and answer followed testimony by the witness that shortly after his arrest the petitioner did not appear to comprehend the seriousness of his situation. Dr. Knepper further testified when she saw Bowers in May 1971 he realized that if he pled guilty he would receive either a life sentence or the death penalty.
6
The deposition of petitioner's former retained counsel was then read. The witness stated that he believed the best possible defense for petitioner was a plea of insanity and that he had worked toward establishing the basis for such a plea from the time he was employed. He testified to numerous meetings with Bowers and stated that he went to Dr. Knepper's office on at least three occasions to discuss the Bowers case. He had a total of eight or nine conversations with Dr. Knepper and twice took her to the jail for meetings with petitioner. At Dr. Knepper's suggestion he arranged to have petitioner removed to a Lexington hospital for an electroencephalogram to determine if there was organic brain damage. The witness stated that he concluded that the evidence of insanity was not strong enough to risk a trial and, consequently, he entered into plea bargaining which resulted in the guilty plea with a recommendation of life imprisonment. The prosecution declined to consider a reduced charge of manslaughter with a recommendation of twenty-one years. The witness further testified that he and Dr. Knepper discussed the decision to enter a guilty plea with Bowers at the jail the day before the trial. He again went over a form used in guilty plea cases with petitioner the next morning and felt that he understood what he was doing.
7
The former Commonwealth's Attorney who had approved the plea bargain and made the recommendation to the jury testified that nothing at the May 1971 proceedings during which petitioner pled guilty indicated to him that Bowers was not competent to stand trial. This witness, who is now a state court judge, testified that petitioner appeared to understand the proceedings and that his answers to the court's questions all indicated that he was "perfectly competent."
8
In denying the motion to vacate judgment the trial judge recalled petitioner's responses and demeanor when the guilty plea was taken. It was the court's conclusion that on the day of the plea petitioner had the mental capacity "to completely understand the nature of the charges against him, to assist the attorneys, and to understand the nature and consequences of his act."
9
In Dusky v. United States, 362 U.S. 402, 80 S.Ct. 788, 4 L.Ed.2d 824 (1960), the Supreme Court adopted language suggested by the Solicitor General in defining competence to stand trial: "The test must be whether he has sufficient present ability to consult with his lawyer with a reasonable degree of rational understanding and whether he has a rational as well as a factual understanding of the proceedings against him." It is obvious that this is a determination which can best be made at the time of trial. On at least three occasions the Supreme Court has referred to the difficulties of retrospective determinations. See Dusky v. United States, supra at 403, 80 S.Ct. 788; Pate v. Robinson, 383 U.S. 375, 387, 86 S.Ct. 836, 15 L.Ed.2d 815 (1966); Drope v. Missouri, 420 U.S. 162, 183, 95 S.Ct. 896, 43 L.Ed.2d 103 (1975). Nevertheless this circuit as well as others has found retrospective determinations of competence to stand trial adequate in particular cases. Conner v. Wingo, 429 F.2d 630 (6th Cir. 1970), cert. denied, 406 U.S. 921, 92 S.Ct. 1779, 32 L.Ed.2d 121 (1972); Miranda v. United States, 458 F.2d 1179 (2d Cir.), cert. denied, 409 U.S. 874, 93 S.Ct. 207, 34 L.Ed.2d 126 (1972); United States v. Makris, 535 F.2d 899 (5th Cir. 1976), cert. denied, 430 U.S. 954, 97 S.Ct. 1598, 51 L.Ed.2d 803 (1977); Barefield v. New Mexico, 434 F.2d 307 (10th Cir. 1970), cert. denied, 401 U.S. 959, 91 S.Ct. 969, 28 L.Ed.2d 244 (1971). Cf. United States ex rel. McGough v. Hewitt, 528 F.2d 339 (3d Cir. 1975). The critical question is whether the evidence relied upon for determining a defendant's competence at an earlier time of trial "was evidence derived from knowledge contemporaneous to trial." Conner v. Wingo, supra, 429 F.2d at 637. (emphasis in original).
10
At the postconviction hearing in Conner there was testimony from a psychiatrist who had attended the original trial and observed the defendant's conduct there. He testified that he saw nothing there which changed his earlier opinion that the defendant was competent to stand trial. Court-appointed counsel at the original trial testified that Conner knew the charges against him and actively participated in the defense. There are many factual similarities between Conner and the present case. Here the psychiatrist who testified at the postconviction proceedings based her opinions, in part, on the jail interview a few days before the guilty plea was received. Both the retained counsel for Bowers and the prosecuting attorney related their testimony to his appearance and participation in the plea-taking proceedings. In addition, the trial judge referred to his impressions at the time of the guilty plea.
11
The records of the two cases also disclose differences. Here a guilty plea was involved, whereas Conner stood trial, thus affording a greater opportunity for the other participants to observe his demeanor. This factor is not decisive, however, if the evidence received retrospectively is based on contemporaneous observations. Cf. Miranda v. United States, supra. The evidence of irrational behavior by the defendant between the time of the offense and the trial was greater in Conner than in the present case. Conner had a 20-year history of hospitalization for mental problems, and he attempted suicide while awaiting trial. Bowers had seen a psychiatrist "on and off" for three years and had been hospitalized briefly one time. Though Dr. Knepper referred to Bowers' paranoidal tendencies, the evidence in the present case disclosed no such bizarre behavior as that which the Supreme Court considered in Pate v. Robinson and Drope v. Missouri.
12
The burden of proof was on the petitioner at the state postconviction hearing and in the habeas corpus proceedings. Conner, supra,429 F.2d at 637; Bruce v. Estelle, 536 F.2d 1051, 1058 (5th Cir. 1976). We have carefully examined the evidence produced at the postconviction hearing and have considered the inferences to be drawn from it in determining that petitioner was not denied due process. The only professional opinion available to the court at the time the plea was received was that of the state hospital psychiatrist who stated that Bowers had no psychosis and was competent to stand trial. Though the letter from Dr. Knepper and her associate related a long history of mental problems, it emphasized the necessity that petitioner be institutionalized and given vocational rehabilitation. When this witness testified at the March 1975 hearing she again dwelt on petitioner's history of mental and emotional problems and need for rehabilitation. Though she found him unresponsive and seemingly unaware of the seriousness of his situation shortly after his arrest, the witness testified that by the time of the trial Bowers was probably able to assist his counsel in the defense of his case. She further stated that the petitioner knew the probable consequences of his guilty plea. This testimony, when considered in conjunction with that of the prosecuting attorney and petitioner's retained counsel, supports the finding of the trial judge that the petitioner was competent to stand trial, and to enter a guilty plea, on May 17, 1971.
13
The petitioner also contends he was denied effective assistance of counsel. We find no support for this claim. Immediately after being employed to represent petitioner, Graddy Johnson arranged for Dr. Knepper to interview Bowers in jail. Johnson was responsible for obtaining the order committing petitioner to a state mental hospital for examination and evaluation. He was aware of the possibility of an insanity defense and continued to try to develop such a defense until a few days before the scheduled trial date. It was only after his May 1975 visit with petitioner at the jail in company with Dr. Knepper that Johnson concluded the risk of going forward with a trial was too great. He felt the insanity defense was not strong enough and decided to initiate plea bargaining to eliminate the possibility of a death sentence. Johnson did not reach this conclusion alone; he consulted another attorney who had accompanied him on most of his visits to Dr. Knepper. Moreover, Dr. Knepper was present when petitioner agreed to plead guilty and accept a life sentence, and she took part in the discussions concerning the options which were available.
14
The failure of Johnson to move for an evidentiary hearing on the issue of competence to stand trial on May 17, 1971 was not a denial of effective assistance of counsel. He had fully investigated the only defense which appeared possible. Though he knew that Bowers was mentally disturbed he was able to discuss strategy with him and felt that Bowers understood the proceedings. The psychiatrist who had treated Bowers for three years never advised Johnson that Bowers was not competent to stand trial. The only psychiatrist who ever gave an opinion on that question stated that he was competent.
15
The judgment of the district court is affirmed.
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IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-417
Filed: 6 November 2018
Forsyth County, No. 15CRS051445
STATE OF NORTH CAROLINA
v.
EUGENE OLIVER JACKSON, Defendant.
Appeal by defendant from judgment entered 13 June 2017 by Judge Richard
S. Gottlieb in Forsyth County Superior Court. Heard in the Court of Appeals 2
October 2018.
Attorney General Joshua H. Stein, by Assistant Attorney General Jarrett W.
McGowan, for the State.
David Weiss for defendant.
BERGER, Judge.
Eugene Oliver Jackson (“Defendant”) was indicted for felony possession of
cocaine and driving without an operator’s license. Defendant filed a motion to
suppress, arguing the arresting officer lacked reasonable suspicion to justify the
traffic stop. Defendant’s motion to suppress was denied. On June 13, 2017,
Defendant pleaded guilty to felony possession of a schedule II substance and driving
without an operator’s license. Defendant appeals arguing that his motion to suppress
should have been granted because the arresting officer did not have reasonable
STATE V. JACKSON
Opinion of the Court
suspicion to justify extending the traffic stop. Defendant also contends that the trial
court erred in concluding the contraband seized from Defendant’s person would have
been ultimately or inevitably discovered through lawful means. We disagree.
Facts and Procedural Background
In the order denying Defendant’s motion to suppress, the trial court found: On
February 14, 2015, City of Winston-Salem Police Department Corporal J.B. Keltner
(“Corporal Keltner”), who had more than sixteen years of experience in law
enforcement, including training in narcotics investigation and highway interdiction,
was on the lookout for a gold Kia sedan in connection with an earlier incident that
occurred at the Green Valley Inn. As Corporal Keltner was monitoring the
intersection of Patterson Avenue and Germanton Road, he observed a Kia sedan drive
through the red light on Patterson Avenue approaching Highway 52 North. Corporal
Keltner conducted a traffic stop. The Kia, driven by Defendant, stopped on the right
hand side of the highway, but with its two left tires on the outside right fog line.
Based on Corporal Keltner’s training and experience, persons transporting narcotics
sometimes engaged in the practice of “white lining,” or parking on the white fog line
to make approaching the vehicle and conducting investigations more difficult.
Corporal Keltner approached the passenger side of the vehicle, and
immediately “observed a 24-oz. beer, open, in the center console.” Defendant then
rolled down the window and Corporal Keltner explained that he stopped the vehicle
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STATE V. JACKSON
Opinion of the Court
for running the red light, to which Defendant made spontaneous comments about a
friend running off and not knowing the friend’s location. Corporal Keltner then asked
for his license and registration. Defendant responded that he did not have a license,
but handed Corporal Keltner a Pennsylvania State I.D. card with his right hand,
which was “shaky.”
After noticing that Defendant “had red glassy eyes” and “a moderate odor of
alcohol coming from the car,” Corporal Keltner asked Defendant to exit the car so
that he could search the car and have Defendant perform sobriety tests. Before
searching the car, Corporal Keltner frisked Defendant for weapons. Upon searching
the vehicle, Corporal Keltner found no further evidence or contraband. As Corporal
Keltner returned to his police car to check the status of Defendant’s license and for
any outstanding warrants, “[D]efendant spontaneously handed” Corporal Keltner his
car keys. Because it was cold outside, Corporal Keltner permitted Defendant to sit
in the back of the patrol car un-handcuffed while he ran license and warrant checks.
Corporal Keltner determined Defendant’s license was expired, the Kia was not
registered to Defendant, and Defendant had no outstanding warrants.
While Corporal Keltner was sitting with Defendant in his patrol car,
Defendant voluntarily “made a variety of spontaneous statements to Corp[oral]
Keltner about his missing friend, first saying he could not remember the friend’s
name, then that his name was “Ty,” then “Ty Payne,” and then that “Ty was in fact
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STATE V. JACKSON
Opinion of the Court
his brother-in-law.” Defendant further asked if “he could give him a ride back to the
Green Valley Inn after the traffic stop was finished.”
After concluding his license and warrant check, Corporal Keltner conducted
standardized field sobriety tests, which were performed to his satisfaction. Corporal
Keltner then requested and received consent to search Defendant and found powder
cocaine and crack cocaine in Defendant’s pockets. Defendant was arrested for
possession of cocaine and driving without an operator’s license.
The trial court further found that Corporal Keltner would not have allowed
Defendant to drive away from the traffic stop because he had no driver’s license; and
he would have searched Defendant’s person before transporting Defendant in his
patrol car to any other location or prior to arresting him. Corporal Keltner testified
that it was his practice to search all persons who rode in his patrol car, even if not
under arrest, for safety reasons and to avoid unwittingly transporting contraband.
Defendant was indicted for possession of cocaine and driving without an
operator’s license, and in February 2016, he filed a motion to suppress. The trial
court denied Defendant’s motion to suppress in an order filed on July 24, 2017. On
June 13, 2017, Defendant pleaded guilty to felony possession of a schedule II
substance and driving without an operator’s license. Defendant was placed on
supervised probation for eighteen months.
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STATE V. JACKSON
Opinion of the Court
Defendant appealed the trial court’s denial of his Motion to Suppress, but did
not give notice of his appeal from the underlying judgment. As a result, Defendant
petitioned this Court on May 23, 2018 for a writ of certiorari in light of the defect in
his notice of appeal. Defendant asserts that the trial court erred in denying the
Motion to Suppress because the arresting officer’s reason for extending the traffic
stop failed to distinguish Defendant from other innocent travelers and did not
establish reasonable suspicion. We grant Defendant’s petition for a writ of certiorari,
and address the merits.
Analysis
Defendant argues that Corporal Keltner lacked reasonable suspicion to extend
the stop after determining Defendant was not intoxicated. He further argues that
the State failed to prove discovery of the cocaine was inevitable. We disagree.
Our review of a trial court’s denial of a motion to suppress is “strictly limited
to determining whether the trial judge’s underlying findings of fact are supported by
competent evidence, in which event they are conclusively binding on appeal, and
whether those factual findings in turn support the judge’s ultimate conclusions of
law.” State v. Cooke, 306 N.C. 132, 134, 291 S.E.2d 618, 619 (1982). “The conclusions
of law . . . are reviewed de novo.” State v. Downey, ___ N.C. App. ___, ___, 796 S.E.2d
517, 519 (2017), aff’d, 370 N.C. 507, 809 S.E.2d 566 (2018).
-5-
STATE V. JACKSON
Opinion of the Court
Here, the trial court’s findings of fact were supported by competent evidence.
Based upon those findings, the trial court concluded as a matter of law that “the
purpose of the traffic stop was concluded after the field sobriety tests were
administered, and before Corp[oral] Keltner requested consent to search
[D]efendant’s person.” However, “based on the totality of the circumstances
Corpor[al] Keltner had reasonable articulable suspicion to extend the stop for the
purpose of asking for consent to search the [D]efendant’s person.” The factor’s
supporting Corporal Keltner’s reasonable suspicion to extend the stop for the purpose
of asking consent to search Defendant’s person included:
[D]efendant’s nervousness and shakiness, the vehicle being
registered to a third party not present, the [D]efendant
presenting an out-of-state identification; the [D]efendant
giving conflicting information about where he lived; the
[D]efendant’s repeated offering of unsolicited information
about a missing friend and conflicting information about
the name of the friend while ultimately volunteering that
the friend was in fact his brother-in-law; and the
[D]efendant’s parking the vehicle on the fog line where
officers could not approach the driver’s side of the vehicle
without having to stand in the lane of travel.
The trial court also concluded that Defendant’s “consent to the search of his
person was voluntarily given,” and that Defendant “suffered no constitutional
violations as a result of this stop and search.” Moreover, the trial court stated that,
even if Defendant had not consented to the search of his person,
the drugs located on [D]efendant’s person would have been
inevitably discovered: if Corp[oral] Keltner had merely
written [D]efendant a citation and given [D]efendant the
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STATE V. JACKSON
Opinion of the Court
ride he had requested following the completion of the traffic
stop, and searched him prior to that ride as was Corp[oral]
Keltner’s practice, the drugs would have been located at
that point; or, they would have been located pursuant to a
search incident to arrest for No Operator’s License.
I. Reasonable Suspicion
The Fourth Amendment of the United States protects individuals “against
unreasonable searches and seizures.” State v. Barnard, 362 N.C. 244, 246, 658 S.E.2d
643, 645 (2008) (citing U.S. Const. amend. IV. and N.C. Const. art. I, § 20). A traffic
stop is constitutional if the officer has a “reasonable, articulable suspicion that
criminal activity is afoot.” Id. at 246, 658 S.E.2d at 645 (quoting Illinois v. Wardlow,
528 U.S. 119, 123, 145 L. Ed. 2d 570, 576 (2000)). “[R]easonable suspicion is the
necessary standard for traffic stops, regardless of whether the traffic violation was
readily observed or merely suspected.” State v. Bullock, 370 N.C. 256, 261, 805 S.E.2d
671, 676 (2017) (citation and quotation marks omitted).
Reasonable suspicion is a “less demanding standard than probable cause and
requires a showing considerably less than preponderance of the evidence.” Barnard,
362 N.C. at 247, 658 S.E.2d at 645 (quoting Wardlow, 528 U.S. at 123, 145 L. Ed. 2d
at 576). Reasonable suspicion requires “a minimal level of objective justification,
something more than an unparticularized suspicion or hunch.” State v. Fields, 219
N.C. App. 385, 387, 723 S.E.2d 777, 779 (2012) (citation and quotation marks
omitted). “[T]he stop [must] . . . be based on specific and articulable facts, as well as
the rational inferences from those facts, as viewed through the eyes of a reasonable,
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STATE V. JACKSON
Opinion of the Court
cautious officer, guided by his experience and training.” State v. Styles, 362 N.C. 412,
414, 665 S.E.2d 438, 439-40 (2008) (citation omitted). “[T]he overarching inquiry
when assessing reasonable suspicion is always based on the totality of the
circumstances.” Fields, 219 N.C. App. at 387, 723 S.E.2d at 779 (citation and
quotation marks omitted).
In the present case, Corporal Keltner had reasonable suspicion to conduct a
traffic stop because he had witnessed Defendant run a red light. Defendant concedes
the initial reason for stopping Defendant was lawful, but contends Corporal Keltner
did not have reasonable suspicion to search Defendant’s person once the purpose of
the traffic stop was concluded. However, Corporal Keltner did not need reasonable
suspicion to extend the stop because probable cause developed to justify Defendant’s
arrest.
Even if we were to accept Defendant’s argument that Corporal Keltner lacked
reasonable suspicion to extend the stop, the trial court’s ultimate ruling on
Defendant’s motion to suppress the admission of cocaine is properly upheld. See State
v. Hester, ___ N.C. App., ___, ___, 803 S.E.2d 8, 15-16 (2017) (citations and quotation
marks omitted) (“A correct decision of a lower court will not be disturbed because a
wrong or insufficient or superfluous reason is assigned.”).
Based on the trial court’s findings and Corporal Keltner’s testimony at the
suppression hearing and at trial, two intervening events, i.e., discovery of the open
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STATE V. JACKSON
Opinion of the Court
container and determination that Defendant was driving the vehicle without an
operator’s license, provided Corporal Keltner probable cause to search Defendant’s
person and arrest him.
II. Probable Cause
An officer may lawfully “arrest without a warrant any person who the officer
has probable cause to believe” has committed a criminal offense. N.C. Gen. Stat.
§ 15A-401(b)(2) (2017).
Probable cause is defined as those facts and circumstances
within an officer’s knowledge . . . which are sufficient to
warrant a prudent man in believing that the suspect had
committed or was committing an offense. The Supreme
Court has explained that probable cause does not demand
any showing that such a belief be correct or more likely true
than false. A practical, nontechnical probability that
incriminating evidence is involved is all that is required. A
probability of illegal activity, rather than a prima facie
showing of illegal activity or proof of guilt, is sufficient.
State v. Robinson, 221 N.C. App. 266, 272-73, 727 S.E.2d 712, 717 (2012)
(purgandum1). Additionally, “[p]robable cause is defined as those facts and
circumstances within an officer’s knowledge and of which he had reasonably
trustworthy information[,] which are sufficient to warrant a prudent man in believing
1 Our shortening of the Latin phrase “Lex purgandum est.” This phrase, which roughly
translates “that which is superfluous must be removed from the law,” was used by Dr. Martin Luther
during the Heidelberg Disputation on April 26, 1518 in which Dr. Luther elaborated on his theology
of sovereign grace. Here, we use purgandum to simply mean that there has been the removal of
superfluous items, such as quotation marks, ellipses, brackets, citations, and the like, for ease of
reading.
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STATE V. JACKSON
Opinion of the Court
that the suspect had committed or was committing an offense.” State v. Biber, 365
N.C. 162, 168-69, 712 S.E.2d 874, 879 (2011) (citation and quotation marks omitted).
To determine whether an officer had probable cause
for an arrest, we examine the events leading up to the
arrest, and then decide whether these historical facts,
viewed from the standpoint of an objectively reasonable
police officer, amount to probable cause. Because probable
cause deals with probabilities and depends on the totality
of the circumstances, it is a fluid concept that is not readily,
or even usefully, reduced to a neat set of legal rules. It
requires only a probability or substantial chance of
criminal activity, not an actual showing of such activity.
Probable cause is not a high bar.
District of Columbia v. Wesby, ___ U.S. ___, ___, 199 L. Ed. 2d 453 (2018) (citations
and quotation marks omitted).
Here, two intervening events gave Corporal Keltner probable cause to search
and arrest Defendant. When Corporal Keltner approached Defendant’s vehicle he
“immediately noticed a[n] [open] 24-ounce Bush [sic] beer can that was sitting in the
center console of the drink holder.” Defendant then rolled down the window and
Corporal Keltner detected an odor of alcohol, observed Defendant’s glassy eyes, and
explained that he stopped the car for running the red light, to which Defendant made
spontaneous comments about a friend of his having run off and not knowing where
the friend was. Corporal Keltner then asked for his license and registration.
Defendant responded that he did not have a license and handed Corporal Keltner a
Pennsylvania State I.D. card. Corporal Keltner determined that Defendant’s license
was expired and Defendant had no outstanding warrants.
- 10 -
STATE V. JACKSON
Opinion of the Court
In light of these facts, Corporal Keltner could have arrested Defendant for
either driving with an open container or driving without a valid operator’s license at
that time. N.C. Gen. Stat. § 20-138.7(a)(1) (2017); N.C. Gen. Stat. § 20-35 (2017).
The probable cause to arrest justified extension of the encounter between Corporal
Keltner and Defendant. Corporal Keltner merely asked for consent to do that which
by law he was authorized to do: conduct a search of Defendant’s person.
“An officer may conduct a warrantless search incident to a lawful arrest. A
search is considered incident to arrest even if conducted prior to formal arrest if
probable cause to arrest exists prior to the search and the evidence seized is not
necessary to establish that probable cause.” Robinson, 221 N.C. App. at 276, 727
S.E.2d at 719 (purgandum).
If an officer has probable cause to arrest a suspect and as
incident to that arrest would be entitled to make a
reasonable search of his person, we see no value in a rule
which invalidates the search merely because it precedes
actual arrest. The justification for the search incident to
arrest is the need for immediate action to protect the
arresting officer from the use of weapons and to prevent
destruction of evidence of the crime. These considerations
are rendered no less important by the postponement of the
arrest.
State v. Wooten, 34 N.C. App. 85, 89-90, 237 S.E.2d 301, 305 (1977).
In the present case, because an independent basis for probable cause existed
prior to the search of Defendant’s person and because the independent basis was
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STATE V. JACKSON
Opinion of the Court
separate and apart from discovery of the cocaine, the cocaine found on Defendant’s
person was unnecessary to establish probable cause for arrest.
Moreover, Corporal Keltner testified that prior to asking Defendant for consent
to search his person, he believed that Defendant was engaging in some sort of
criminal activity other than just running a red light or impaired driving, or driving
without a valid operator’s license. Corporal Keltner testified that:
a lot of times individuals that are involved in some sort of
criminal activity or have some type of contraband in their
car will commonly do what we refer to in highway
interdiction as white line the officer whenever they
stopped, because a lot of officers traditionally will make
their approach to the vehicle on the driver’s side of the
vehicle, and by pulling over there on the fog line, would
expose the officer to danger, walking up in the travel lane
and sometimes force the officer to change the way he does
the traffic stop, or just go ahead and hurry them on their
way just to get out of that danger . . .
[W]hen [Defendant] handed me his Pennsylvania . . . I.D.
card, that his left -- or his right hand, rather, was shaking
uncontrollably whenever he handed the license to me. I
know, based on my training and experience, that
individuals that are involved in criminal activity commonly
will shake uncontrollably like that whenever they hand me
their documentation that I have asked for in a traffic stop.
...
When he was sitting in the back of my patrol vehicle, just
the spontaneous conversation that he initiated with me in
regards to an event that had transpired prior to me
stopping him and this individual that was involved in the -
- the incident just seemed very strange to me that he’s
providing me with information that I hadn’t asked for. And
I noticed also that when he was talking to me that he was
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STATE V. JACKSON
Opinion of the Court
talking very, very rapidly. And I know both of these things,
based on my training and experience, are things that are
indications of people who are involved in criminal
activities, are excessively nervous. . . .
When I ran the registration, it was a North Carolina
license plate that was displayed on this vehicle, I found
that the vehicle was registered to a third-party female who
was not present in the vehicle. And I know, based on my
training and experience that very commonly individuals
that are involved in criminal activities will . . . utilize a
vehicle that’s registered to a third party.
Thus, even though the trial court concluded that the traffic stop ended after
the sobriety tests, Corporal Keltner developed probable cause to arrest Defendant
and then to search Defendant’s person. Because the search of Defendant’s person
was incident to a lawful arrest, the trial court’s ruling on Defendant’s motion to
suppress was proper.
III. Consent
Defendant also contends his consent to the search was invalid because
Corporal Keltner had not yet returned his car keys and I.D. card, and thus Defendant
was not free to leave. Defendant relies on State v. Jackson, 199 N.C. App. 236, 681
S.E.2d 492 (2009), which held that a defendant’s consent to search is invalid when it
is tainted by the illegality of an extended detention.
Under the search incident to arrest exception, consent to search is not required
because “[a]n officer may conduct a warrantless search incident to a lawful arrest.”
State v. Chadwick, 149 N.C. App. 200, 205, 560 S.E.2d 207, 211 (2002) (citations
- 13 -
STATE V. JACKSON
Opinion of the Court
omitted). “A search incident to lawful arrest is limited in scope to the area from which
the arrested person might have obtained a weapon or some item that could have been
used as evidence against him. The parameters of search incident to arrest in a given
case depend upon the particular facts and circumstances.” State v. Jones, 221 N.C.
App. 236, 240, 725 S.E.2d 910, 913 (2012) (citation omitted).
Because probable cause existed, Defendant’s consent was unnecessary for
Corporal Keltner to conduct the search. No additional justification is needed beyond
the probable cause required for the arrest. Additionally, the scope of the search was
limited. Corporal Keltner conducted an outer clothing pat-down of Defendant’s
person. As a result of the pat-down, Corporal Keltner located powder cocaine and
crack cocaine in Defendant’s jeans. Once Corporal Keltner secured the cocaine he
placed Defendant under arrest and concluded the search of Defendant’s person.
Thus, because Corporal Keltner had probable cause to arrest, Defendant’s consent
was not required to conduct a search incident to lawful arrest.
IV. Inevitable Discovery
Defendant further argues the trial court erred in alternatively concluding that
discovery of the cocaine was inevitable. Even if we assume the search of Defendant
was unlawful, which it was not, discovery of the illegal contraband on Defendant’s
person was inevitable.
- 14 -
STATE V. JACKSON
Opinion of the Court
“The standard of review for alleged violations of constitutional rights is de
novo.” State v. Graham, 200 N.C. App. 204, 214, 683 S.E.2d 437, 444 (2009). Under
the exclusionary rule, evidence obtained by unreasonable search and seizure is
generally inadmissible in a criminal prosecution. State v. Garner, 331 N.C. 491, 505-
06, 417 S.E.2d 502, 510 (1992).
However, “[u]nder the inevitable discovery doctrine, evidence which is illegally
obtained can still be admitted into evidence as an exception to the exclusionary rule
when the information ultimately or inevitably would have been discovered by lawful
means. . . . Under this doctrine, the prosecution has the burden of proving that the
evidence, even though obtained through an illegal search, would have been discovered
anyway by independent lawful means.” State v. Harris, 157 N.C. App. 647, 654, 580
S.E.2d 63, 67 (2003) (purgandum). “The State need not prove an ongoing independent
investigation; we use a flexible case-by-case approach in determining inevitability.”
State v. Larkin, 237 N.C. App. 335, 343, 764 S.E.2d 681, 687 (2014) (citation omitted).
Moreover, “if the State carries its burden and proves inevitable discovery by separate,
independent means, thus leaving the State in no better and no worse position, any
question of good faith, bad faith, mistake or inadvertence is simply irrelevant.”
Garner, 331 N.C. at 508, 417 S.E.2d at 511.
In the present case, Corporal Keltner testified that had he merely issued
Defendant a citation for driving with no operator’s license, he “would [not] have
- 15 -
STATE V. JACKSON
Opinion of the Court
allowed the [D]efendant to have driven off” from the traffic stop because “he was not
licensed to operate a motor vehicle.” Corporal Keltner further testified that he would
have searched Defendant before giving him a ride or transporting him to jail because
of his practice of searching everyone he transports in his patrol car. Also, Defendant
repeatedly asked Corporal Keltner “if [h]e could give him a ride back over to the Green
Valley Motel and drop him off.”
Here, the State established by a preponderance of the evidence that the cocaine
would have been inevitably discovered because Corporal Keltner would have
searched Defendant’s person for weapons or contraband prior to transporting him to
another location or jail.
Conclusion
For the reasons stated above, the trial court properly denied Defendant’s
motion to suppress.
AFFIRMED.
Judges DIETZ and TYSON concur.
- 16 -
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Case: 18-60088 Document: 00514704714 Page: 1 Date Filed: 10/31/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 18-60088 United States Court of Appeals
Summary Calendar
Fifth Circuit
FILED
October 31, 2018
SALAH ATIA, also known as Rodberg, Lyle W. Cayce
Clerk
Petitioner
v.
JEFFERSON B. SESSIONS, III, U. S. ATTORNEY GENERAL,
Respondent
Petition for Review of an Order of the
Board of Immigration Appeals
BIA No. A212 904 238
Before BENAVIDES, HIGGINSON, and ENGELHARDT, Circuit Judges.
PER CURIAM: *
Salah Atia, a native and citizen of Syria, petitions this court for review
of the decision of the Board of Immigration Appeals (BIA) dismissing his
appeal of the denial of his applications for asylum and protection under the
Convention Against Torture (CAT). Atia argues that the BIA’s denial of
asylum based on his religion and opposition to military conscription is not
supported by substantial evidence and neither is its denial of his claim for CAT
* 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: 18-60088 Document: 00514704714 Page: 2 Date Filed: 10/31/2018
No. 18-60088
protection. Atia also asserts that the IJ and BIA failed to adjudicate his claim
for withholding of removal.
Atia did not argue before the BIA that the IJ failed to adjudicate his
withholding of removal claim. As a threshold matter, the IJ specifically
concluded that Atia had not met the standard for withholding. In any event,
because he did not exhaust his contentions that the IJ and BIA did not
sufficiently address withholding, we lack jurisdiction to consider this claim.
See Omari v. Holder, 562 F.3d 314, 320 (5th Cir. 2009); Roy v. Ashcroft, 389
F.3d 132, 137 (5th Cir. 2004).
We review for substantial evidence the determination that an alien is
not eligible for relief. Zhang v. Gonzales, 432 F.3d 339, 344 (5th Cir. 2005).
Under that standard, we may not reverse the factual findings of the BIA unless
the evidence compels it, i.e., the evidence must be so compelling that no
reasonable factfinder could conclude against it. Wang v. Holder, 569 F.3d 531,
536-37 (5th Cir. 2009).
Our review of the briefs and record satisfy us that substantial evidence
supports the conclusion that Atia was not entitled to asylum or withholding of
removal based on any of his claims of persecution. See Chen v. Gonzales, 470
F.3d 1131, 1136-38 (5th Cir. 2006); Zhao v. Gonzales, 404 F.3d 295, 307 (5th
Cir. 2005); Milat v. Holder, 755 F.3d 354, 361 (5th Cir. 2014). Finally,
regarding Atia’s entitlement to protection under the CAT, the record evidence
would not compel a reasonable person to reach a different conclusion than that
of the IJ and BIA. See Ontunez-Tursios v. Ashcroft, 303 F.3d 341, 354-55 (5th
Cir. 2002).
PETITION DENIED IN PART AND DISMISSED IN PART FOR LACK
OF JURISDICTION.
2
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357 S.E.2d 769 (1987)
STATE of West Virginia
v.
Kim Wesley DAVIS.
No. 17070.
Supreme Court of Appeals of West Virginia.
May 15, 1987.
*770 *771 David Johnson, Asst. Atty. Gen., for appellant.
Edwin C. Runner, Kingwood, for appellee.
MILLER, Justice:
Kim Wesley Davis appeals his conviction for attempted arson by a jury in the Circuit Court of Preston County. Several errors are raised by the defendant. The first is that the the indictment was improperly indorsed by the jury foreman. The defendant also argues that the State failed to prove the defendant intended to willfully and maliciously set the fire. He also claims that the trial court failed to properly charge the jury about the element of criminal intent and that the State failed to prove a jail is a "dwelling" as defined in the arson statute. He claims that the trial court failed to conduct a hearing relative to his mental competency to stand trial and that he was entitled to a copy of the tape recording of his psychiatric examination. Finally, he asserts the trial court erred in allowing the prosecutor to argue a new theory not supported by the evidence during closing rebuttal argument.
On the night of May 18, 1985, approximately one-half hour after lock-up, a fire occurred in the Preston County jail on the second floor in a cell area. The small fire fueled by paper from newspapers and magazines did not burn the jail or the personal property of the inhabitants of the jail. Jailor Robert Chambers saw the fire via a television monitor system. He requested that the communications center get backup assistance. After waiting approximately five to ten minutes for the backup, when the officers entered the cell area, the fire had died out.
A grand jury indicted the defendant on charges of arson and attempted arson. A jury trial was held on August 19 and 20, 1985. At the close of the State's evidence, the trial court directed a judgment of acquittal on the two arson counts, but found that the State had made a prima facie case of attempted arson.
I.
The defendant first contends that the trial court erred in refusing to dismiss the indictment. The defendant's motion to dismiss, made a month before trial, was predicated on the fact that the indorsement of the grand jury foreman appeared on the face of the indictment rather than on the reverse. The defendant contends that this was a fatal defect relying on W.Va.Code, 62-9-1, which provides, in pertinent part:
"Said indictment shall have legibly indorsed on the reverse side thereof the words `State of West Virginia versus....... Indictment for a .......... (Felony or Misdemeanor, as the case may be).
.......... Foreman of the Grand Jury.
Attest: ........, Prosecuting Attorney of ........, county, West Virginia.'"
In referring to the provisions of this statute, we have held that "[t]he requirement in each particular is mandatory." Syllabus Point 7, in part, State v. De Board, 119 W.Va. 396, 194 S.E. 349 (1938); Syllabus Point 2, in part, State v. Burnette, 118 W.Va. 501, 190 S.E. 905 (1937). We have never held, however, that the failure to indorse or attest the indictment on the reverse side is a fatal defect when *772 the indorsement and attestation appear on the face of the indictment. In State v. Huffman, 141 W.Va. 55, 71, 87 S.E.2d 541, 551 (1955), we explained that the purpose served by the indorsement of the grand jury foreman and the attestation by the prosecutor under W.Va.Code, 62-9-1, is to prevent the substitution or the use of an indictment other than the one actually returned by the grand jury.[1]See also State v. Burnette, supra.
This purpose can be accomplished equally as well by an indorsement on the face of the indictment as by an indorsement on the reverse side. This is suggested by Rule 7(c)(1) of the West Virginia Rules of Criminal Procedure, W.Va.R.Crim.P., adopted by this Court effective October 1, 1981, which provides in part: "An indictment shall be signed by the foreman of the grand jury and the attorney for the State." This procedural rule does not specify that the indictment be signed in any particular place.
We have traditionally held that under our rule-making authority, Article VIII, Section 3 of the West Virginia Constitution,[2] rules promulgated by this Court have the force and effect of law and will supersede procedural statutes that conflict with them. State ex rel. Watson v. Ferguson, 166 W.Va. 336, 274 S.E.2d 440 (1980); State v. Byrd, 163 W.Va. 248, 256 S.E.2d 323 (1979); State v. Gary, 162 W.Va. 136, 247 S.E.2d 420 (1978); State v. Bolling, 162 W.Va. 103, 246 S.E.2d 631 (1978); Stern Bros., Inc. v. McClure, 160 W.Va. 567, 236 S.E.2d 222 (1977); State ex rel. Partain v. Oakley, 159 W.Va. 805, 227 S.E.2d 314 (1976).
We, therefore, conclude that Rule 7(c)(1), W.Va.R.Crim.P., supersedes the provisions of W.Va.Code, 62-9-1, to the extent that the indorsement of the grand jury foreman and attestation of the prosecutor are no longer required to be placed on the reverse side of the indictment. Such indorsement and attestation are sufficient if they appear on the face of the indictment.
Since the indictment in this case complies with the requirements of Rule 7(c)(1), W.Va.R.Crim.P., we find no reversible error in the trial court's denial of the defendant's motion to dismiss the indictment.
II.
The defendant claims that the State failed to prove any intent or motive for the fire. It must be remembered that the defendant's conviction was for attempted arson. We have stated this general rule with regard to the crime of attempt in Syllabus Point 2 of State v. Starkey, 161 W.Va. 517, 244 S.E.2d 219 (1978):
"In order to constitute the crime of attempt, two requirements must be met: (1) a specific intent to commit the underlying substantive crime; and (2) an overt act toward the commission of that crime, which falls short of completing the underlying crime."
Our attempted arson statute, W.Va.Code, 61-3-4, speaks of any person who "wilfully and maliciously attempts ... to burn ... or who commits any act preliminary thereto."[3]
*773 In the proof of the substantive crime of arson as distinguished from the crime of attempted arson, we have customarily held that the fire must be of an incendiary origin and that the defendant must be personally connected to the fire. E.g., State v. Yates, 169 W.Va. 453, 288 S.E.2d 522 (1982); State v. Jones, 161 W.Va. 55, 239 S.E.2d 763 (1977). The phrase "wilfully and maliciously" in our arson statutes is common to arson statutes in other states. Courts have rather uniformly held that this phrase means an intentional as distinguished from an accidental burning and without lawful reason, cause, or excuse, as illustrated by State v. Dunn, 199 N.W.2d 104, 107 (Iowa 1972):
"As here employed `willfully' means purposely, deliberately, intentionally....
"And the word `maliciously', when used in a legislative enactment pertaining to the crime of arson, denotes that malice which characterizes all acts done with an evil disposition, a wrong and unlawful motive or purpose; that state of mind which actuates conduct injurious to others without lawful reason, cause or excuse." (Citations omitted).
See also State v. Scott, 118 Ariz. 383, 576 P.2d 1383 (1978); People v. Green, 146 Cal.App.3d 369, 194 Cal.Rptr. 128 (1983); State v. Pisano, 107 Conn. 630, 141 A. 660 (1928); Commonwealth v. Lamothe, 343 Mass. 417, 179 N.E.2d 245 (1961);[4]People v. McCarty, 303 Mich. 629, 6 N.W.2d 919 (1942); State v. Eubanks, 83 N.C.App. 338, 349 S.E.2d 884 (1986); see generally 5 Am. Jur.2d Arson & Related Offenses § 11 (1962); 6A C.J.S. Arson § 8 (1975).
Thus, for purposes of an attempted arson, the requisite proof for the State to show under Starkey is a specific intent to commit the underlying crime, i.e., arson, and an overt act toward its completion.
The State presented testimony from Jailor Chambers, Police Dispatcher Paul Short, and three law enforcement officers. Mr. Chambers, Mr. Short, and City Police Officer Wilbur McCabe testified that while waiting for backup assistance, they watched the cell area television monitor and saw an arm extend from Cell No. 4 and drop lighted matches and additional paper onto the dying out fire causing the fire to flame briefly.
The officers removed the defendant from Cell No. 4. Deputy Sheriff Ronald Nazelrod and Conservation Officer Richard McCrobie testified that they searched the defendant's cell and found matches and torn newspaper. After the search, Deputy Nazelrod took photographs of the burned paper piled in front of Cell No. 4. The defendant was the only occupant of Cell No. 4. Consequently, the intent to burn and his personal involvement in it were shown.
This evidence was sufficient to prove an attempted arson under our traditional rule for reviewing the sufficiency of the evidence in a criminal case found in Syllabus Point 1 of State v. Starkey, supra:
"In a criminal case, a verdict of guilt will not be set aside on the ground that it is contrary to the evidence, where the State's evidence is sufficient to convince impartial minds of the guilt of the defendant beyond a reasonable doubt. The evidence is to be viewed in the light most favorable to the prosecution. To warrant interference with a verdict of guilt on the ground of insufficiency of evidence, the court must be convinced that the evidence was manifestly inadequate and that consequent injustice has been done."
See also Syllabus Point 1, State v. Williams, ___ W.Va. ___, 305 S.E.2d 251 (1983).
*774 III.
The defendant assigns as error that the State failed to prove that the Preston County jail was a "dwelling" under W.Va. Code, 61-3-1. The property distinctions that are relevant to determine the degree of other arson charges are irrelevant under our attempted arson statute, W.Va.Code, 61-3-4, which specifically incorporates "any buildings or property mentioned in the foregoing sections." Thus attempted arson is not confined to a dwelling. See generally State v. Jones, ___ W.Va. ___, 329 S.E.2d 65 (1985).
IV.
The defendant argues that the trial court erred in not holding a hearing to determine his mental competency to stand trial. The defendant made a motion pursuant to W.Va.Code, 27-6A-1, requesting an examination to determine whether he was competent to stand trial and whether he was criminally responsible by reason of mental illness. The court ordered a Dr. Joel Allen to examine the defendant. He considered medical reports of the defendant's recent suicide attempts resulting in an April, 1985 involuntary commitment to Weston State Hospital. Dr. Allen characterized the defendant's behavior as manipulative, determined that the defendant understood the trial process, and found him competent to stand trial.
On August 7, 1985, the trial court, based on Dr. Allen's written report, found that the defendant was competent to stand trial and was criminally responsible. The trial court ordered that Dr. Allen's psychiatric report be sent to the prosecuting attorney, the defendant, and his counsel, along with the court's finding. The defendant was entitled to request a competency hearing under W.Va.Code, 27-6A-1(d).[5] This statutory procedure indicates that when a defendant and his counsel have notice of the court's finding of competency to stand trial, under W.Va.Code, 27-6A-1(d), their failure to make a request for a competency hearing within a reasonable time from the receipt of the court's finding will constitute a waiver of the right to such a hearing.
In State v. Church, 168 W.Va. 408, 414, 284 S.E.2d 897, 901 (1981), we spoke to this Code section and indicated that the defendant had an obligation to request such a hearing, if he desired one, after there had been a medical finding as to his competency to stand trial:
"The defendant in this case had notice of the findings and opinions of the psychiatrist and psychologist who had examined him. He did not request a competency hearing at any time prior to trial. He was not, therefore, prejudiced by the trial judge's failure to make a finding of competency in compliance with W.Va. Code, 27-6A-1(d) [1977]."
See also State v. Schofield, ___ W.Va. ___, 331 S.E.2d 829 (1985); State v. Baker, 169 W.Va. 357, 287 S.E.2d 497 (1982).
In this case, both the defendant and his counsel received a copy of the court's finding that the defendant was competent along with a copy of Dr. Allen's report. No steps were taken prior to trial to request a hearing to contest the finding. By their failure to act, they waived their statutory right to a hearing.
V.
The defendant argues that the psychiatrist failed to follow the trial court's order *775 and tape record the defendant's examination, which denied the defendant any benefit which might have been derived from the tape. We determined in State v. Jackson, ___ W.Va. ___, ___, 298 S.E.2d 866, 872-73 (1982), that a tape recording of a court-ordered psychiatric examination would be a useful adjunct to a court-ordered psychiatric examination to resolve problems surrounding the examination's accuracy and possible self-incrimination problems. Here, the psychiatrist did not testify making his failure to tape record the session a moot point.
VI.
The defendant assigns as error the failure to instruct the jury that intent must be proved beyond a reasonable doubt. The court instructed the jury that the State must prove beyond a reasonable doubt each element of fourth degree arson, including that the defendant wilfully and maliciously attempted to set fire to the Preston County jail. In a separate instruction, the court defined "wilful and malicious" to mean "a deliberate and intentional attempt to set fire to or burn a building as contrasted with an accidental or unintentional attempt to set fire to or burn a building." Reading the instructions as a whole, it is clear that they were adequate and correct under the law set out in Part II of this opinion.
Finally, the defendant complains that the prosecuting attorney's closing argument that plastics in the jail could have burned and emitted toxic fumes was not supported by the facts and denied the defendant a fair trial by inflaming and arousing the prejudices of the jury against the defendant. The prosecutor's argument was undoubtedly a bit hypothetical since there was no testimony that toxic fumes would have been emitted if the fire had continued to burn. However, it was not sufficiently prejudicial to warrant a reversal under Syllabus Point 5 of State v. Ocheltree, ___ W.Va. ___, 289 S.E.2d 742 (1982):
"A judgment of conviction will not be reversed because of improper remarks made by a prosecuting attorney to a jury which do not clearly prejudice the accused or result in manifest injustice."
See also Syllabus Point 7, State v. Beckett, ___ W.Va. ___, 310 S.E.2d 883 (1983); Syllabus Point 7, State v. Buck, ___ W.Va. ___, 294 S.E.2d 281 (1982).
For the reasons stated, we perceive no reversible error and, accordingly, the judgment of the Circuit Court of Preston County is affirmed.
Affirmed.
NOTES
[1] The particular language of Huffman, 141 W.Va. at 71, 87 S.E.2d at 551, is: "The obvious purpose of this requirement of the statute is to identify and authenticate the indictment and to prevent the substitution or the use of an indictment other than the indictment actually returned by the grand jury upon which the accused should be tried."
[2] The pertinent provision of Article VIII, Section 3 of the West Virginia Constitution states: "The court shall have power to promulgate rules for all cases and proceedings, civil and criminal, for all of the courts of the State relating to writs, warrants, process practice and procedure, which shall have the force and effect of law."
[3] Attempted arson is set out in W.Va.Code, 61-3-4, which provides:
"(a) Any person who wilfully and maliciously attempts to set fire to, or attempts to burn or to aid, counsel or procure the burning of any of the buildings or property mentioned in the foregoing sections, or who commits any act preliminary thereto, or in furtherance thereof, shall be guilty of arson in the fourth degree and upon conviction thereof be sentenced to the penitentiary for not less than one nor more than two years, or fined not to exceed one thousand dollars.
"(b) The placing or distributing of any inflammable, explosive or combustible material or substance, or any device in any building or property mentioned in the foregoing sections, in an arrangement or preparation with intent to eventually, wilfully and maliciously set fire to or burn same, or to procure the setting fire to or burning of same shall, for the purposes of this section constitute an attempt to burn such building or property."
[4] Commonwealth v. Lamothe, 343 Mass. at 417, 179 N.E.2d at 246, traces this phrase to its common law origins stating: "At common law the offence of arson consisted of the wilful and malicious burning of the house of another. 4 Blackstone, Commentaries (21st ed.) p. 220. But the meaning given to the word `malicious' when used in defining the crime of arson is quite different from its literal meaning."
[5] W.Va.Code, 27-6A-1(d), provides, in pertinent part:
"Within five days after the receipt of the report on the issue of competency to stand trial, or if no observation pursuant to subsection (b) of this section has been ordered, within five days after the report on said issue following an examination under subsection (a) of this section, the court of record shall make a finding on the issue of whether the defendant is competent for trial. A finding of incompetence for the trial shall require proof by a preponderance of the evidence. Notice of such findings shall be sent to the prosecuting attorney, the defendant and his counsel. If the court of record orders or if the defendant or his counsel on his behalf within a reasonable time requests a hearing on such findings, a hearing in accordance with section two [§ 27-6A-2] of this article shall be held by the court of record within ten days of the date such finding or such request has been made."
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26 F.3d 1001
UNITED STATES of America, Plaintiff-Appellee,v.Harry GREENSPAN, aka Alfred A. Lugo, aka Alfred AnthonyLugo, aka Alex Lugo, aka Alex Stone, Defendant-Appellant.
No. 93-2139.
United States Court of Appeals,Tenth Circuit.
June 6, 1994.
1
Peter Schoenburg of Rothstein, Donatelli, Hughes, Dahlstrom, Cron and Schoenburg, Albuquerque, NM, for appellant.
2
Louis E. Valencia, Asst. U.S. Atty. (U.S. Atty., Larry Gomez with him on the brief), for appellee.
3
Before EBEL and McKAY, Circuit Judges, and VAN BEBBER, District Judge.*
4
VAN BEBBER, District Judge.
5
The defendant-appellant, Harry Greenspan, appeals from the district court's denial of his motion to suppress physical evidence found in his car after a traffic stop on Interstate 25 in New Mexico. We affirm in part, reverse in part, and remand the case for further proceedings.
I. FACTS
6
On October 21, 1992, Harry Greenspan was stopped while driving north on Interstate 25 between Albuquerque and Santa Fe by two New Mexico State Police officers, Jimmy R. Salmon and James Montoya. The officers testified that they stopped Greenspan for driving 74 miles per hour in a 65 mile-an-hour zone.
7
Prior to stopping Greenspan on I-25, Officers Salmon and Montoya had travelled from Albuquerque to Santa Fe to obtain new body armor. They rode together in Officer Salmon's patrol unit. In Santa Fe, the officers were issued their new body armor and visited the state police mechanic's office to inquire about a new patrol unit for Officer Salmon. The officers left Albuquerque at approximately 2:30 p.m. While returning to Albuquerque, the officers decided to turn on the patrol car's radar equipment when they entered the Albuquerque patrol district at approximately mile marker 252 on I-25. They had not engaged the radar during their earlier drive north to Santa Fe or until this point in their return trip.
8
Immediately after turning on the radar equipment, Officer Salmon, the driver and radar operator, locked on and visually observed defendant's northbound vehicle in the fast lane of traffic exceeding the posted speed limit and travelling at 74 miles per hour. The officers crossed the median and pulled over defendant's vehicle at approximately 3:30 p.m. Officer Salmon approached defendant's vehicle, and as he did so, the driver started to get out of his vehicle. Officer Salmon asked the driver to remain in the vehicle and then approached the driver. Officer Salmon testified that immediately upon the driver rolling down his window, he smelled a strong odor of marijuana. Officer Salmon explained to the driver that he had stopped him for travelling 74 in a 65 mile-per-hour zone and asked for his driver's license. He observed that the driver was very nervous. The driver was Harry Greenspan, but gave his name as Alfred Lugo.
9
Officer Salmon then explained to Greenspan what he was going to do, and returned to his patrol car to write a traffic citation. While writing the citation, Officer Salmon told Officer Montoya that he smelled a strong odor of marijuana coming from the vehicle. Officer Montoya asked Officer Salmon for the name of the driver. Officer Salmon told Officer Montoya that the driver's name was Alfred Lugo. Montoya recognized the name as one that he had heard in the context of a previous case.
10
Nearly a month before the stop of Greenspan, Officer Montoya had stopped a man named Michael Haigerty on a nearby stretch of highway, Interstate 40, for speeding. Officer Montoya discovered marijuana in Haigerty's car. Upon being questioned by the police, Haigerty named the supplier of his marijuana as a man he knew by the name of Alfred Lugo. Haigerty also told another New Mexico State Police narcotics agent, Glenn Kelsey, that Lugo drove a blue Mercury Marquis of late 1980's vintage.
11
Officers Salmon and Montoya then approached defendant's car. Montoya was on the passenger side of the vehicle and Salmon was on the driver's side. Both testified that they smelled marijuana. Officer Salmon explained to Greenspan his options concerning the speeding citation. Greenspan responded that he would mail in his fine. Officer Salmon then asked Greenspan if he was carrying anything illegal and Greenspan said "no." Officer Salmon then asked Greenspan for permission to search the car and its contents. Officers Salmon and Montoya testified that Greenspan consented.
12
Officer Salmon asked Greenspan to step out of the vehicle. After walking to the rear of the car, Officer Salmon asked Greenspan for the keys to the trunk and was told they were in the ignition. Officer Salmon took the keys from the ignition and opened the trunk, where marijuana was discovered under a sheet, wrapped in clear plastic and placed in trash bags with baking soda between the bags. Upon being notified by Officer Salmon that there was marijuana in the trunk, Officer Montoya arrested Greenspan. A search of Greenspan revealed $3,600.00 in cash and two additional small baggies of marijuana.
13
Greenspan was indicted and charged with possession with intent to distribute marijuana in violation of 21 U.S.C. Sec. 841(a)(1) and (b)(1)(B), and filed a motion to suppress the physical evidence obtained during the October 21, 1992, search. A suppression hearing was held by the district court, at which time testimony was adduced concerning the New Mexico State Police policies on speeding violations. Officer Montoya testified that it was the state police policy to stop all speeders and that he consistently stops persons travelling nine miles over the limit. Officer Salmon testified that he would not issue traffic citations to persons driving in the "traffic flow" at speeds of 65 to 68 miles per hour. Officer Montoya stated that he would not stop a car going 74 miles per hour only if everybody in the flow of traffic was driving 75 or faster. Evidence was also presented concerning the specific number of traffic stops made by Officers Salmon and Montoya in the months before and after the stop of Appellant Greenspan.
14
At the suppression hearing, the trial court denied defendant's request to rewrap the marijuana seized from his vehicle in order to conduct a "smell test" of the marijuana's odor. The purpose of the proposed experiment was to impeach the arresting officers' testimony concerning the strong odor of marijuana emanating from defendant's car at the time of the stop.
15
The motion to suppress was denied by the trial court orally at the hearing, followed by a written order dated March 2, 1993. On March 8, 1993, Greenspan filed a motion for recusal of the trial judge based upon the judge's evidentiary rulings and in-court statements. It was denied. Also on March 8, 1993, Greenspan entered a plea of guilty to one count of possession of less than fifty kilograms of marijuana contrary to 21 U.S.C. Secs. 841(a)(1) and (b)(1)(C). The guilty plea reserved Greenspan's right to appeal the trial court's denial of his motion to suppress.
16
On April 21, 1993, the trial court sentenced Greenspan to a term of 51 months to be followed by supervised release for three years, and to pay a special assessment of $50.00. At the sentencing hearing, Greenspan amended the affidavit accompanying his prior motion for recusal and renewed the motion based upon allegations that the district judge had received information concerning an investigation into alleged threats on the judge's life by Greenspan. It was denied. Greenspan filed a timely notice of appeal.
II. STANDARDS OF REVIEW
17
In reviewing the district court's denial of a motion to suppress evidence, we must accept the court's factual findings unless they are clearly erroneous and must consider the evidence in the light most favorable to the government. United States v. Abreu, 935 F.2d 1130, 1132 (10th Cir.), cert. denied --- U.S. ----, 112 S.Ct. 271, 116 L.Ed.2d 224 (1991). The ultimate question of whether a search and seizure was reasonable under the Fourth Amendment is a question of law that we review de novo. Id.
18
We review the district court's denial of the motion for recusal under an abuse of discretion standard. United States v. Burger, 964 F.2d 1065, 1070 (10th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1854, 123 L.Ed.2d 477 (1993). The trial court's decision to exclude an in-court reconstruction of the circumstances of the case--here, the so-called marijuana "smell test"--will also be reviewed for abuse of discretion. United States v. Wanoskia, 800 F.2d 235, 238 (10th Cir.1986).
III. MOTION TO SUPPRESS
19
Appellant Greenspan appeals the trial court's denial of his motion to suppress on the ground that the officers' stop of his vehicle was unconstitutionally pretextual. Greenspan contends that because of Officer Montoya's previous involvement with the arrest of Michael Haigerty, the officers lay in wait for Greenspan's vehicle, visually recognized his car from the description given by Haigerty, and hoped to intercept him with a load of marijuana. Greenspan argues that the claimed purpose of the stop of his vehicle for travelling nine miles per hour over the posted speed limit was merely a pretext for stopping him to search for drugs.
20
As has often been stated by this court, "a pretextual stop occurs when the police use a legal justification to make the stop in order to search a person or place, or to interrogate a person, for an unrelated serious crime for which they do not have the reasonable suspicion necessary to support a stop." United State v. Guzman, 864 F.2d 1512, 1515 (10th Cir.1988). In Guzman, this court adopted the following test for determining whether an investigatory stop is unconstitutional: "[A] court should ask 'not whether the officer could validly have made the stop, but whether under the same circumstances a reasonable officer would have made the stop in the absence of the invalid purpose.' " 864 F.2d at 1517 (citing United States v. Smith, 799 F.2d 704, 709 (11th Cir.1986)). Thus, the court's inquiry is objective, rather than a subjective examination of the officer's motives for making the stop.
21
If New Mexico police officers routinely stop persons traveling nine miles over the posted speed limit, then the stop of Greenspan's vehicle would not be unconstitutionally pretextual at its inception, even if Officers Salmon and Montoya subjectively hoped to find "Alfred Lugo" in the car carrying marijuana. See Guzman, 864 F.2d at 1518. On the other hand, if a reasonable officer would not have stopped someone traveling at this speed absent some other reason, the stop might be deemed pretextual.
22
During the hearing on the motion to suppress in this case, the district court heard testimony from Officers Salmon and Montoya regarding the New Mexico State Police policies regarding speeding violations as we have previously summarized. Beyond the testimony of Officers Salmon and Montoya concerning the policies of the New Mexico State Police concerning speeding violations, the record is silent on this issue. In United States v. Maestas, 2 F.3d 1485, 1491 (10th Cir.1993), we held that the defendant bears the burden of proving that a legally sufficient basis asserted as a justification for a search or seizure was pretextual. Thus, if there is a lack of evidence on the issue of the police's policies, defendant bears the risk.
23
Here, Greenspan offered no evidence to show that a reasonable New Mexico State Police officer would not have stopped a person traveling nine miles over the posted speed limit absent some ulterior reason. Instead, he simply attempted to adduce evidence showing that the stop of the defendant was an out-of-the-ordinary occurrence for these particular officers. This type of evidence does not bear on the objective inquiry to be made in a pretextual stop case. We are left with only the testimony of Officers Montoya and Salmon concerning the New Mexico State Police policies regarding speeding violators. Based on this record, we conclude that a reasonable officer would have stopped someone traveling nine miles over the posted speed limit who was not within the flow of traffic. Greenspan has failed to meet his burden of proving that his stop was pretextual. We hold that the district court did not err in finding the stop of Greenspan constitutionally permissible.
IV. RECUSAL
24
Greenspan next argues that the trial judge erred in failing to recuse himself in light of circumstances that would cause a reasonable person to question his impartiality. See 28 U.S.C. Secs. 144 and 455(a). In the present case, the circumstances that Appellant claims should have led to a recusal by the trial judge involve an investigation by the Federal Bureau of Investigation into allegations that defendant had conspired to kill the trial judge or members of his family. The trial court was aware of the allegations at the sentencing hearing, and in fact expedited the hearing in order to "get [Greenspan] into the federal penitentiary system immediately, where he can be monitored more closely." Appellant's Appendix p. 358-59. In addition, the trial court refused to continue the sentencing hearing at the request of defendant's counsel, who had been appointed only two days before the expedited sentencing date.
25
It appears the alleged conspiracy to kill the trial judge and his family spanned several states and included a number of persons who had allegedly contributed large sums of money for the hiring of a "hit man." Greenspan contends that because the trial judge was aware of this alleged threat, a reasonable person might question the judge's impartiality and the judge should have recused himself pursuant to 28 U.S.C. Sec. 455(a). He also argues that recusal is appropriate under 28 U.S.C. Sec. 144, which provides for removal of a judge based on actual bias or prejudice.
26
"Under section 455(a), the judge is under a continuing duty to ask himself what a reasonable person, knowing all the relevant facts, would think about his impartiality." United States v. Hines, 696 F.2d 722, 728 (10th Cir.1982) (citing Roberts v. Bailar, 625 F.2d 125, 129 (6th Cir.1980)). On the other hand, a judge has as much obligation not to recuse himself where there is no reason to do so as he does to recuse himself when the converse is true. City of Cleveland v. Cleveland Elec. Illuminating Co., 503 F.Supp. 368, 370 (N.D.Ohio 1980).
27
In United States v. Cooley, 1 F.3d 985, 993-94 (10th Cir.1993), this court noted that threats or attempts to intimidate a judge will not ordinarily satisfy the requirements for disqualification under section 455(a). Here, however, we are faced with a situation where a trial judge learned of an alleged conspiracy to assassinate him from the FBI, and the judge was told that the defendant he was about to sentence was involved in the conspiracy. Under section 455(a)'s objective standard, we must decide whether the judge's impartiality might reasonably have been questioned in this particular case.
28
The court concludes that under these unique circumstances, the trial judge should have recused himself from sentencing Greenspan. The judge learned of the alleged threat from the FBI, and there is nothing in the record to suggest the threat was a ruse by the defendant in an effort to obtain a different judge. At oral argument, the government conceded that a reasonable person might have questioned the judge's impartiality in light of the judge's knowledge that an investigation was being conducted into alleged threats against him by the defendant. In a case like the present, where there is no inference that the threat was some kind of ploy, the judge should have recused himself pursuant to section 455(a) and allowed another judge to sentence Greenspan. Had there been any reason to believe that threats were made only in an attempt to obtain a different judge, to delay the proceedings, to harass, or for other vexatious or frivolous purpose, recusal would not have been warranted, even if the judge learned of the threats from a third person such as a federal agent.
29
Combined with the judge's knowledge that an investigation was ongoing concerning alleged threats against him by defendant, the totality of the circumstances surrounding the sentencing hearing could have contributed to an appearance that the trial court was prejudiced against Greenspan. The trial court had accelerated the date of Greenspan's sentencing, for the stated reason that the court wanted to get Greenspan into the penitentiary system as quickly as possible, and the trial court refused to grant a continuance of the sentencing hearing even though defendant's counsel had been appointed only two days before the sentencing date. Although any one of these actions standing alone would not provide sufficient reason to believe a judge was biased against the defendant, when considered in light of the judge's knowledge of the alleged threats against him, these factors might provide further bases for questioning the court's impartiality.
30
This is not to say that all death threats against a judge will mandate that judge's recusal under Section 455. To the contrary, if a death threat is communicated directly to the judge by a defendant, it may normally be presumed that one of the defendant's motivations is to obtain a recusal, particularly if he thereafter affirmatively seeks a recusal. As we have stated earlier, if a judge concludes that recusal is at least one of the defendant's objectives (whether or not the threat is taken seriously), then section 455 will not mandate recusal because that statute is not intended to be used as a forum shopping statute. Here, by contrast, the defendant did not communicate the death threat to the judge, nor is there any suggestion that the defendant ever intended the judge to learn of the threat before it was actually carried out. Thus, there is nothing here to suggest that the defendant was using the threat as a device to force a recusal.
31
Similarly, if a defendant were to make multiple threats to successive judges or even to multiple judges on the same court, there might be some reason to suspect that the threats were intended as a recusal device. Once again, that scenario is not presented here as this threat was directed only at a single judge and there is no suggestion that the threat was intended to be communicated to the judge before it was carried out.
32
We observed that this threat was not delivered in court or in connection with an official judicial proceeding involving this defendant. Thus, the threat is properly characterized as an "extrajudicial source." As such, the Supreme Court has recently advised that it has a higher potential for generating a situation where the judge's impartiality might reasonably be questioned than would be the case if the incident arose during the course of the proceedings themselves. Liteky v. United States, --- U.S. ----, 114 S.Ct. 1147, 127 L.Ed.2d 474 (1994).
33
Finally, we note what is surely obvious--that our ruling today should not encourage threats against judges in order to obtain recusals. We have tried to state, as clearly as possible, that any such efforts will be futile. An uncommunicated threat will, by definition, not be an effective recusal device, and we hold that a communicated threat may, under all of the circumstances, be disregarded by the judge for purposes of recusal if the judge concludes that recusal is one of the objectives of the defendant. Furthermore, threats against judges are serious crimes, and any such ploy would likely result in further ancillary prosecution against a defendant in a way that may significantly multiply his or her problems with the law.
34
The bottom line here is that this judge learned of an apparently genuine death threat made against him and against his family under circumstances that made it quite unlikely that the threat was intended as a device to obtain a recusal. The judge obviously took the threat very seriously, and chose to accelerate court procedures in order to reduce the risk to him and his family as he perceived it. Under such circumstances, it is obvious to us that a reasonable person could question the judge's impartiality. Even if this judge were one of those remarkable individuals who could ignore the personal implications of such a threat, the public reasonably could doubt his ability to do so.
35
Recusal under section 455 is to be judged on the record. It is not a question of either the government or the defendant bearing a burden of proof. Rather, recusal is an action taken by the judge, and the judge must document the reasons for his or her decision so that the decision may be reviewed, if necessary, by an appellate court. Here, the record convinces us that the judge's impartiality might reasonably be questioned, and thus his recusal is mandated by 28 U.S.C. Sec. 455(a).
36
There are few characteristics of a judiciary more cherished and indispensable to justice than the characteristic of impartiality. Congress has mandated that justice must not only be impartial, but also that it must reasonably be perceived to be impartial. 28 U.S.C. Sec. 455(a). As the Supreme Court noted in Liljeberg v. Health Servs. Corp., 486 U.S. 847, 859-60, 108 S.Ct. 2194, 2202-03, 100 L.Ed.2d 855 (1988), the purpose of section 455(a) is "to promote public confidence in the integrity of the judicial process." Our decision today is nothing more than an application of these hallowed principles to a very clear record.
37
Our inquiry does not end with the conclusion that the trial judge should have recused himself under the section 455(a) standard. We must also assess what remedy is appropriate. In doing so, we must specifically consider whether the judge's violation of section 455(a) is harmless error that does not warrant setting aside Greenspan's sentence. See Liljeberg, 486 U.S. at 862, 108 S.Ct. at 2203-04. The government urges that even if we determine that the trial judge violated section 455(a)'s standard, because Greenspan was sentenced pursuant to the Federal Sentencing Guidelines and within the applicable guideline range, any violation of section 455(a) is harmless error. We disagree. The Sentencing Guidelines do provide a range from within which the court may sentence Greenspan, and the trial court chose to sentence him at the high end of the range. We cannot conclude the error was harmless.
38
Finally, we note that although the alleged threat by the defendant against the trial judge might still be regarded as an "extrajudicial source" for purposes of recusal under section 455(a) in a subsequent sentencing proceeding administered by a different judge, the additional factor of a second judge against whom the threat was not personally directed provides sufficient insulation so as to avoid any necessary conclusion that the second judge's impartiality could be reasonably questioned. We therefore remand the case for resentencing by a different judge.
39
V. THE "SMELL TEST"
40
Appellant's final contention on appeal is that the trial court erred when it refused to allow him to perform an in-court experiment on the marijuana that was seized from his vehicle. Specifically, at the suppression hearing, Greenspan asked to repackage the marijuana that had been seized from his vehicle and perform a "smell test" to see if the marijuana emitted a strong odor as the arresting officers testified that it did. Appellant claims that it was an abuse of the trial court's discretion to deny his request.
41
The government contends that the trial court did not err in denying Greenspan's request because the conditions of the proposed experiment would have been significantly different from those existing at the time the arresting officers smelled the odor of marijuana emanating from Greenspan's car. The record indicates that at the time Greenspan was stopped, the marijuana was wrapped in three layers of plastic and had been in Greenspan's car for approximately twenty-four hours. The arresting officers testified that there were some small tears in the marijuana's packaging when it was retrieved from the vehicle, and Greenspan could not remember whether or not such tears were present prior to the search. Additionally, Greenspan testified that the marijuana might have had a slight smell, although he denied that it emitted any strong odor.
42
We conclude that there was no abuse of discretion in the trial court's refusal to allow the "smell test" experiment. Whether or not to allow the admission of experimental evidence is within the sound discretion of the trial court. Champeau v. Fruehauf Corp., 814 F.2d 1271, 1278 (8th Cir.1987). The record does not disclose the details of the conditions proposed to surround defendant's experiment, including how the marijuana would be packaged, and whether it would sit in a closed car trunk for a full twenty-four hours before the test. It appears that the conditions surrounding the officers' stop of Greenspan would have been virtually impossible to reconstruct in court. See United States v. Michelena-Orovio, 702 F.2d 496, 499-500 (5th Cir.1983) (refusal to allow smell test of marijuana bales by jury was not abuse of discretion), reh'g, 719 F.2d 738 (5th Cir.1983), cert. denied, 465 U.S. 1104, 104 S.Ct. 1605, 80 L.Ed.2d 135 (1984); United States v. Vallejo, 541 F.2d 1164, 1165 (5th Cir.1976) (refusal to allow smell test of marijuana was not abuse of discretion).
43
Accordingly, the decision of the district court is AFFIRMED in part and REVERSED in part. The case is REMANDED for further proceedings consistent with this opinion.
*
The Honorable G.T. Van Bebber, United States District Judge for the District of Kansas, sitting by designation
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-7405
RODNEY WILSON,
Petitioner - Appellant,
v.
GENE M. JOHNSON,
Respondent - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Norfolk. Raymond A. Jackson, District
Judge. (2:06-cv-00676-RAJ)
Submitted: February 28, 2008 Decided: March 5, 2008
Before WILKINSON, NIEMEYER, and MICHAEL, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Rodney Wilson, Appellant Pro Se. Josephine Frances Whalen, OFFICE
OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for
Appellee
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Rodney Wilson seeks to appeal the district court’s order
accepting the recommendation of the magistrate judge and denying
relief on his 28 U.S.C. § 2254 (2000) petition. The order is not
appealable unless a circuit justice or judge issues a certificate
of appealability. 28 U.S.C. § 2253(c)(1) (2000). A certificate of
appealability will not issue absent “a substantial showing of the
denial of a constitutional right.” 28 U.S.C. § 2253(c)(2) (2000).
A prisoner satisfies this standard by demonstrating that reasonable
jurists would find that any assessment of the constitutional claims
by the district court is debatable or wrong and that any
dispositive procedural ruling by the district court is likewise
debatable. Miller-El v. Cockrell, 537 U.S. 322, 336-38 (2003);
Slack v. McDaniel, 529 U.S. 473, 484 (2000); Rose v. Lee, 252 F.3d
676, 683-84 (4th Cir. 2001). We have independently reviewed the
record and conclude that Wilson has not made the requisite showing.
Accordingly, we deny Wilson’s motions for a certificate of
appealability and 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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537 U.S. 1101
MAYBERRYv.STARR ET AL.
No. 02-7258.
Supreme Court of United States.
January 13, 2003.
1
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT.
2
C. A. 6th Cir. Motion of petitioner for leave to proceed in forma pauperis denied, and certiorari dismissed. See this Court's Rule 39.8. As petitioner has repeatedly abused this Court's process, the Clerk is directed not to accept any further petitions in noncriminal matters from petitioner unless the docketing fee required by Rule 38(a) is paid and the petition is submitted in compliance with Rule 33.1. See Martin v. District of Columbia Court of Appeals, 506 U.S. 1 (1992) (per curiam). JUSTICE STEVENS dissents. See id., at 4, and cases cited therein. Reported below: 44 Fed. Appx. 679.
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291 F.Supp.2d 531 (2003)
Eleanor UPPENDAHL, Plaintiff,
v.
AMERICAN HONDA MOTOR CO., INC., et al., Defendants.
Civil Action No. 3:03CV-24-S.
United States District Court, W.D. Kentucky.
November 17, 2003.
*532 Bryce D. Franklin, Jr., Peter Perlman, Lexington, KY, Stephen E. Van Gaasbeck, San Antonio, TX, for Plaintiff.
Denise A. Dickerson, Lawrence A. Sutter, Sutter, O'Connell, Mannion & Farchione, Cleveland, OH, for Defendants.
MEMORANDUM OPINION AND ORDER
SIMPSON, District Judge.
This matter is before the court on motion of the defendant, Honda Motor Co., Ltd. ("HMC"), to quash service of process made upon it by mail from the Kentucky Office of the Secretary of State to its corporate headquarters in Japan. HMC contends that the plaintiff, Eleanor Uppendahl, has failed to comply with the requirements of the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (commonly referred to as the "Hague Convention").
The parties are in agreement that the provisions of the Hague Convention apply to service of process on HMC in this action. The parties also agree that there is a very clear split of authority in the federal courts concerning whether Article 10(a) of the Convention permits service of process by direct mail. The United States Court of Appeals for the Sixth Circuit has not spoken on the matter. The only district court in this circuit to have addressed the question is the United States District Court for the Eastern District of Tennessee in Wilson v. Honda Motor Company, Ltd., 776 F.Supp. 339 (E.D.Tenn.1991) which held that service of process upon the Japanese manufacturer accomplished by sending the complaint and summons to the Tennessee Secretary of State who, in turn, sent the documents by registered mail directly to HMC in Japan did not comply with the Hague Convention. We agree with that result and hold, for the reasons articulated below, that Uppendahl has not served HMC in accordance with the requirements of the Hague Convention, and that HMC's motion to quash should be granted.
The Hague Convention is a multinational treaty, signed in 1965, whose purpose was to formulate an "appropriate means to ensure that judicial and extrajudicial documents to be served abroad shall be brought to the notice of the addressee in sufficient time," and seeking to "improve the organization of mutual judicial assistance for the purpose of simplifying and expediting the procedure." Hague Convention Preamble, 20 U.S.T. 361, 362, T.I.A.S. No. 6638, reprinted in 28 U.S.C. Fed.R.Civ.P. 4, note, at 124 (West Supp. 1999). A number of different methods of service of process are available under the Convention. Articles 2 through 6 provide a procedure for signatory countries to designate a "Central Authority" to receive and facilitate service of process from other countries. Japan has designated its Minister of Foreign Affairs for this purpose. Article 8 allows service through diplomatic channels. Article 19 permits service by any method permitted by the internal laws of the country in which service is made. Article 21 then permits a signatory country to ratify the provisions of the Convention subject to any conditions or objections to specific articles that it chooses to include.
Additionally, Article 10 provides:
Provided the State of destination does not object, the present Convention shall not interfere with (a) the freedom to *533 send judicial documents, by postal channels, directly to persons abroad, (b) the freedom of judicial officers, officials or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination, (c) the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination.
Hague Convention, at 125-26. Japan has objected to subparagraphs (b) and (c) of Article 10.
The issue which has sharply divided the federal district and circuit courts is whether subparagraph (a) of Article 10 permits service on a Japanese defendant by direct mail.
In the case of Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 700, 108 S.Ct. 2104, 2108, 100 L.Ed.2d 722 (1988), the United States Supreme Court reiterated the canon of construction that "[w]hen interpreting a treaty, we `begin with the text of the treaty and the context in which the written words are used.' [citations omitted]. Other general rules of construction may be brought to bear on difficult or ambiguous passages." This court does not find anything difficult or ambiguous about the passage in question. Very clearly, subparagraphs (b) and (c) of Article 10 address service of judicial documents. Subparagraph (a) does not. The term "service of process" has a well-established technical meaning, as recognized by the Supreme Court in Schlunk, supra. "Service of process refers to a formal delivery of documents that is legally sufficient to charge the defendant with notice of a pending action. 1 Ristau § 4-5(2), p. 123 (interpreting the Convention); Black's Law Dictionary 1227 (5th ed.1979); see 4 C. Wright & A. Miller, Federal Practice and Procedure § 1063, p. 225 (2d ed.1987)." Schlunk, 108 S.Ct. at 2108. Therefore, the terms must be given their plain, ordinary meaning, and must be read in context. See, i.e. Knapp v. Yamaha Motor Corporation, U.S.A., 60 F.Supp.2d 566, 570-71 (S.D.W.Va.1999)("where the text of a treaty is clear, the `court shall not, through interpretation, alter or amend the treaty.'"); Wilson v. Honda Motor Co., Ltd., 776 F.Supp. 339, 342 (E.D.Tenn.1991)("Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive," quoting, Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980)).
The court in Wilson, supra., noted that "other provisions of the Convention use the word `service' when prescribing approved methods of transmission for service, see. e.g., Article 8." Wilson, 776 F.Supp. at 342. "[W]here a legislative body includes particular language in one section but omits that same language from another section of the same act, it is generally presumed that the legislative body acted intentionally and purposefully in the disparate inclusion or exclusion." Id., quoting, Russello v. United States, 464 U.S. 16, 104 S.Ct. 296, 300, 78 L.Ed.2d 17 (1983). Here, the differing terms are contained in the same Article, but different subsections. We simply cannot conclude, as some courts have done, that this amounts to a "drafting error."
Further, we decline to address Japan's potential motivation in objecting to subsections (b) and (c), but not to subsection (a). A number of courts have opined that Japan's failure to object to subsection (a) was simply an "oversight," since service of process by registered mail is not permitted under Japanese law, thus rendering it "extremely *534 unlikely that Japan's failure to object to Article 10(a) was intended to authorize the use of registered mail ... particularly in light of the fact that Japan specifically objected to the much more formal modes of service ..." See, i.e., Wilson, supra.; Suzuki Motor Co. v. Superior Court, 200 Cal.App.3d 1476, 249 Cal.Rptr. 376 (1988); Bankston, 889 F.2d at 174. We are constrained by the canons of construction to look to the plain and unambiguous language of the document before us, rather than attempt to divine the thought processes of drafters and signatories to the document.
A number of commentators and, even more persuasively, authorities such as the Special Commission Report on the Operation of the Hague Service Convention and a United States Department of State Opinion have stated that Article 10(a) does provide for service by mail, and that Japan's delegation statement to the Special Commission indicated that "Japan does not consider service of process by mail to Japan to violate Japanese judicial sovereignty ... [but] that ... service in Japan by mail ... which may be considered valid service by courts in the United States, would not be considered valid service in Japan for purposes of Japanese law." The Department of State Opinion goes on to state that "We therefore believe that the decision of the Court of Appeals in Bankston [v. Toyota Motor Corporation, 889 F.2d 172 (8th Cir.1989)] is incorrect to the extent that it suggests that the Hague Service Convention does not permit, as a method of service of process, the sending of a copy of a summons and complaint by registered mail to a defendant in a foreign country."
While we find the commentary concerning the courts' diverse opinions interesting, the court simply cannot alter the text of the treaty to add matters not contained therein.
[T]o alter, amend, or add to any treaty, by inserting any clause, whether small or great, important or trivial, would be on our part an usurpation of power, and not an exercise of judicial functions. It would be to make, and not to construe a treaty. Neither can this court supply a cassus omissus in a treaty, any more than in a law. We are to find out the intention of the parties by just rules of interpretation applied to the subject matter; and having found that, our duty is to follow it as far as it goes, and to stop where it stops whatever may be the imperfections or difficulties which it leaves behind." The Amiable Isabella, 6 Wheat. 1, 71, 5 L.Ed. 191 (1821).
Chan v. Korean Air Lines, Ltd., 490 U.S. 122, 135, 109 S.Ct. 1676, 1684, 104 L.Ed.2d 113 (1989). See, also, Knapp, 60 F.Supp.2d at 570 (when interpreting treaties, courts must be governed by the text solemnly adopted by the government of separate nations, quoting, Chan, supra.).
For the reasons set forth herein, the court concludes that service of process by direct mail through the Kentucky Secretary of State to HMC in Japan is not authorized by Article 10(a) of the Hague Convention. Therefore, the motion of HMC will be granted and service will be quashed. A separate order will be entered in accordance with this opinion.
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Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
11-14-2006
Martin v. USA
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-1733
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006
Recommended Citation
"Martin v. USA" (2006). 2006 Decisions. Paper 210.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 06-1733
________________
FRANCIS G. MARTIN,
Appellant
v.
*UNITED STATES OF AMERICA
*(Amended per Clerk’s order of 6/20/06)
________________
On Appeal From the United States District Court
For the District of New Jersey
(D.C. Civ. No. 05-cv-3729)
District Judge: Freda L. Wolfson
________________
Submitted Under Third Circuit LAR 34.1(a)
August 2, 2006
Before: RENDELL, AMBRO and ROTH, Circuit Judges
(Filed: November 14, 2006 )
________________
OPINION
________________
PER CURIAM
Francis Martin appeals the dismissal of his civil rights complaint and mandamus
petition by the United States District Court for the District of New Jersey. For the
reasons below, we will affirm the District Court’s judgment.
On July 25, 2005, Martin filed a civil rights complaint against defendant Pamela
Logan, an appeals officer for the Internal Revenue Service (IRS).1 Martin alleged that
Logan denied him due process by refusing to afford him a face-to-face Collection Due
Process (CDP) hearing, pursuant to 26 U.S.C. § 6330, relating to certain outstanding and
unpaid income tax obligations. Martin also sought mandamus relief, pursuant to 28
U.S.C. § 1361, asking the District Court to order Logan to provide a face-to-face CDP
hearing. Logan filed a motion to dismiss arguing that the District Court lacked
jurisdiction to consider Martin’s civil rights claims and that Martin was not entitled to
mandamus relief. The District Court granted Logan’s motion and dismissed Martin’s
complaint.
We have appellate jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary
review over a District Court’s decision to grant a motion to dismiss. See Gould Elec. Inc.
v. United States, 220 F.3d 169, 176 (3d Cir. 2000).
Martin argues the District Court erred in failing to require Logan to provide a face-
to-face CDP hearing. For substantially the reasons given by the District Court, we agree
that Martin is not entitled to mandamus relief.2 A writ of mandamus is a drastic remedy
1
Pursuant to this court’s order entered June 20, 2006, the United States of America
has been substituted as appellee in this matter.
2
The District Court also held that Martin’s civil rights claims were barred by
sovereign immunity. In this appeal, Martin disclaims any reliance on anything other than
mandamus. See Br. 1. Accordingly, we need not, and do not, reach the applicability of
sovereign immunity to civil rights-type claims against the IRS. We note that mandamus
2
that should only be granted in extraordinary situations. See In re Nwanze, 242 F.3d 521,
524 (3d Cir. 2001). A petitioner seeking such relief must show that he has “no other
adequate means to attain the desired result” and that his right to issuance of the writ is
“clear and indisputable.” Id. (internal quotation marks omitted).
In this case, Martin cannot show that he has a clear and indisputable right to a
face-to-face CDP hearing. A CDP hearing under § 6330(b) is an informal proceeding.
The treasury regulations for § 6330(b) provide that “[a] CDP hearing may, but is not
required to, consist of a face-to-face meeting, one or more written or oral communications
... or some combination thereof.” Treas. Reg. § 301.6330-1(d)(2)(Q & A-D6); see also
Kindred v. Comm’r of Internal Revenue, 454 F.3d 688, 691 n.7 (7 th Cir. 2006). Thus, it is
clear that Martin is not guaranteed nor entitled to a face-to-face CDP hearing. This is not
an “extraordinary” situation that warrants issuance of a writ of mandamus. Accordingly,
the District Court did not err in dismissing Martin’s complaint and denying him
mandamus relief.
For the foregoing reasons, we will affirm the judgment of the District Court.
claims such as Martin’s are not barred by sovereign immunity. See Georges v. Quinn,
853 F.2d 994, 995 (1 st Cir. 1988) (per curiam).
3
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IN THE COURT OF APPEALS OF THE STATE OF IDAHO
Docket No. 42721
STATE OF IDAHO, ) 2015 Unpublished Opinion No. 760
)
Plaintiff-Respondent, ) Filed: December 16, 2015
)
v. ) Stephen W. Kenyon, Clerk
)
JARED WEBSTER, ) THIS IS AN UNPUBLISHED
) OPINION AND SHALL NOT
Defendant-Appellant. ) BE CITED AS AUTHORITY
)
Appeal from the District Court of the Seventh Judicial District, State of Idaho,
Jefferson County. Hon. Gregory W. Moeller, District Judge.
Order denying I.C.R. 35 motion for reduction of sentence, affirmed.
Rigby, Andrus, & Rigby Law, PLLC; Sean P. Bartholick, Rigby, for appellant.
Hon. Lawrence G. Wasden, Attorney General; Kenneth K. Jorgensen, Deputy
Attorney General, Boise, for respondent.
________________________________________________
MELANSON, Chief Judge
Jared Webster appeals from the district court’s denial of his Idaho Criminal Rule 35
motion for reduction of his sentence. Webster argues that he was denied due process when the
district court denied the motion without hearing and that his counsel was ineffective by failing to
set the matter for a hearing. For the reasons set forth below, we affirm.
I.
FACTS AND PROCEDURE
Webster pled guilty to felony injury to a child. I.C. §§ 18-1501(1) and 18-206. He was
sentenced to a unified term of ten years, with a minimum period of confinement of four years.
Webster appealed and this Court affirmed in an unreported opinion. State v. Webster, Docket
No. 41695 (Ct. App. Aug. 18, 2014). Webster filed a Rule 35 motion for reduction of his
sentence but took no further action. The district court denied the motion after approximately
1
eight and one-half months had passed and defense counsel had not scheduled a hearing on the
motion. In its order, the district court noted that it lost jurisdiction over Webster and, even if the
matter had been noticed for hearing, there appeared to be no legal or factual basis for disturbing
the sentence already affirmed on appeal. Webster appeals.
II.
STANDARD OF REVIEW
When a trial court’s discretionary decision is reviewed on appeal, the appellate court
conducts a multi-tiered inquiry to determine: (1) whether the lower court correctly perceived the
issue as one of discretion; (2) whether the lower court acted within the boundaries of such
discretion and consistently with any legal standards applicable to the specific choices before it;
and (3) whether the lower court reached its decision by an exercise of reason. State v. Hedger,
115 Idaho 598, 600, 768 P.2d 1331, 1333 (1989).
A motion for reduction of sentence under I.C.R. 35 is essentially a plea for leniency,
addressed to the sound discretion of the court. State v. Knighton, 143 Idaho 318, 319, 144 P.3d
23, 24 (2006); State v. Allbee, 115 Idaho 845, 846, 771 P.2d 66, 67 (Ct. App. 1989). In
presenting a Rule 35 motion, the defendant must show that the sentence is excessive in light of
new or additional information subsequently provided to the district court in support of the
motion. State v. Huffman, 144 Idaho 201, 203, 159 P.3d 838, 840 (2007). In conducting our
review of the grant or denial of a Rule 35 motion, we consider the entire record and apply the
same criteria used for determining the reasonableness of the original sentence. State v. Forde,
113 Idaho 21, 22, 740 P.2d 63, 64 (Ct. App. 1987).
III.
ANALYSIS
A. Due Process
Webster argues that the district court erred by denying his Rule 35 motion and, in so
doing, violated his due process rights. Webster does not appear to challenge the district court’s
substantive holding--only that it was error for the district court to deny the motion without first
holding a hearing. He asserts that his motion should have been decided on the merits, not on
technicality or neglect. In support, Webster cites as authority State v. Chapman, 121 Idaho 351,
825 P.2d 74 (1992) and State v. Day, 131 Idaho 184, 953 P.2d 624 (Ct. App. 1998). However,
2
these cases address the trial court’s limited duration of jurisdiction over Rule 35 motions and the
burden borne by the defendant to precipitate action on the motion within a reasonable time
frame. They do not address due process. Moreover, Webster has not cited any authority
suggesting that, when trial courts deny a Rule 35 motion without hearing, due process is
implicated.
The Due Process Clauses of the United States and Idaho Constitutions forbid the
government from depriving an individual of life, liberty, or property without due process of law.
U.S. CONST. amend. XIV; IDAHO CONST. art. I, § 13. To determine whether an individual’s due
process rights under the Fourteenth Amendment have been violated, courts must engage in a
two-step analysis. Bradbury v. Idaho Judicial Council, 136 Idaho 63, 72-73, 28 P.3d 1006,
1015-16 (2001). The Court must first decide whether the individual’s threatened interest is a
liberty or property interest under the Fourteenth Amendment. Id. Only after a court finds a
liberty or property interest will it reach the next step of analysis in which it determines what
process is due. Id.
To have a constitutionally protected liberty interest, a person must clearly have more than
an abstract need or desire for it; more than a unilateral expectation of it; and, instead, must have a
legitimate claim of entitlement to it. State v. Coassolo, 136 Idaho 138, 143, 30 P.3d 293, 298
(2001); see also Bd. of Regents v. Roth, 408 U.S. 564, 577 (1972). The mere possibility that a
sentence could be suspended or reduced is not a recognized protected liberty interest. See
Coassolo, 136 Idaho at 143, 30 P.3d at 298 (“[W]hen the state has not given back a liberty
interest, no due process is necessary to continue the denial of the liberty interest.”). As noted
previously, a Rule 35 motion is a defendant’s plea for leniency addressed to the discretion of the
trial court. A defendant does not possess a right to a hearing on the motion. State v. Hoffman,
112 Idaho 114, 115, 730 P.2d 1034, 1035 (Ct. App. 1986). Therefore, because Webster did not
have a right to a hearing and had merely a hope that the district court would reduce his sentence,
he did not possess a liberty interest under Rule 35. Therefore, Webster’s due process claim fails.
Accordingly, Webster has failed to show that the district court erred in denying his Rule 35
motion.
3
B. Ineffective Assistance of Counsel
Webster argues that he was not provided effective assistance of counsel when his
attorney failed to set his Rule 35 motion for hearing. Webster has elected to raise this issue by
direct appeal rather than by seeking post-conviction relief. Ordinarily we do not address claims
of ineffective assistance of counsel on direct appeal because the record is rarely adequate for
review of such claims. Sparks v. State, 140 Idaho 292, 296, 92 P.3d 542, 546 (Ct. App. 2004);
State v. Hayes, 138 Idaho 761, 766, 69 P.3d 181, 186 (Ct. App. 2003). The resolution of factual
issues for the first time on appeal, based upon a trial record in which competence of counsel was
not at issue, is at best conjectural. State v. Doe, 136 Idaho 427, 433, 34 P.3d 1110, 1117 (Ct.
App. 2001). Such claims are more appropriately presented through post-conviction relief
proceedings where an evidentiary record can be developed. State v. Mitchell, 124 Idaho 374,
376, 859 P.2d 972, 974 (Ct. App. 1993). Accordingly, we decline to address it further.
IV.
CONCLUSION
Webster has failed to show that the district court erred in denying his Rule 35 motion.
Webster’s ineffective assistance of counsel claim is improper and we decline to address it.
Accordingly, the district court’s order denying Webster’s Rule 35 motion is affirmed.
Judge GUTIERREZ and Judge GRATTON, CONCUR.
4
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819 F.2d 1136
Wrightv.Pennsylvania Bd. of Parole
86-5529
United States Court of Appeals,Third Circuit.
5/14/87
M.D.Pa.,
Rambo, J.
AFFIRMED
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 01-2133
___________
George D. Mitchell, *
*
Appellant, * Appeal from the United States
* District Court for the
v. * District of Nebraska.
*
Union Pacific Railroad Company, * [UNPUBLISHED]
*
Appellee. *
___________
Submitted: September 3, 2002
Filed: September 10, 2002
___________
Before LOKEN, BYE, and RILEY, Circuit Judges.
___________
PER CURIAM.
George Mitchell appeals the district court’s1 denial of his motion for a new trial
after a jury returned a verdict for Union Pacific Railroad in Mitchell’s employment-
discrimination action. Upon careful review of the record, we reject the arguments he
raises on appeal. Mitchell does not have a statutory or constitutional right to effective
assistance of counsel in a civil case, and therefore may not overturn the judgment on
that basis. See Taylor v. Dickel, 293 F.3d 427, 431 (8th Cir. 2002). Mitchell has not
shown prejudice or pervasive bias, and therefore the district judge did not commit
1
The HONORABLE LYLE E. STROM, United States District Judge for the
District of Nebraska.
plain error in not recusing sua sponte. See Liteky v. United States, 510 U.S. 540,
555-56 (1994) (disqualification standards); Rush v. Smith, 56 F.3d 918, 922 (8th Cir.)
(en banc) (plain error standard), cert. denied, 516 U.S. 959 (1995). Finally, we do not
consider the arguments raised for the first time in Mitchell’s untimely reply brief. See
Fed. R. App. P. 31(a); Neb. State Legislative Bd., United Transp. Union v. Slater, 245
F.3d 656, 658 n.3 (8th Cir. 2001).
Accordingly, we deny Mitchell’s pending motions on appeal, we deny
appellee’s motion to strike as moot, and we affirm. See 8th Cir. R. 47B.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-2-
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STATE OF MICHIGAN
COURT OF APPEALS
DAVON DIAZ, UNPUBLISHED
April 12, 2018
Plaintiff-Appellant,
v No. 336359
Macomb Circuit Court
AISHA COLEMAN, ELMINA COLEMAN and LC No. 2015-000711-NI
GABRIELLE YOUNG,
Defendants-Appellees.
Before: SAWYER, P.J., and HOEKSTRA and MURRAY, JJ.
PER CURIAM.
This case arises out of a motor vehicle accident in which plaintiff was a passenger in a
vehicle driven by defendant Aisha Coleman and owned by defendant Elmina Coleman, whose
vehicle collided with one driven by defendant Young. The claims against the Colemans were
dismissed by stipulation several months before trial. At trial, the jury returned a verdict for
defendant Young (“defendant”). We affirm.
Plaintiff first argues that the trial court erred in admitting certain testimony. We disagree.
Plaintiff raises two specific challenges. First, he argues that the trial court erred in allowing
defendant to testify that plaintiff had suggested that she tell police that plaintiff had been driving
rather than Coleman because Coleman had a suspended license. Second, plaintiff argues that the
court should not have allowed testimony that plaintiff did not report all of his income to the IRS
as he was being paid “under the table.” Plaintiff argues that this evidence was “irrelevant and
highly prejudicial,” citing only MRE 401, 402 and 403 as authority. Plaintiff also suggests that
the testimony was “inarguably hearsay” but without any reference to authority. As our Supreme
court observed in Mudge v Macomb Co, 458 Mich 87, 104-105; 580 NW2d 845 (1998), we need
not address issues that are inadequately briefed:
As we explained in Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959):
“It is not enough for an appellant in his brief simply to announce a position or
assert an error and then leave it up to this Court to discover and rationalize the
basis for his claims, or unravel and elaborate for him his arguments, and then
search for authority either to sustain or reject his position. The appellant himself
-1-
must first adequately prime the pump; only then does the appellate well begin to
flow.”
We do note, however, that defendant makes a compelling point that these issues were highly
relevant to plaintiff’s credibility as a witness. We similarly decline to address plaintiff’s two-
sentence “argument” regarding defense counsel’s reference to plaintiff’s resolution of his first-
party insurance claim, especially in light of the fact that plaintiff does not even address the
effectiveness of the curative instruction.
Plaintiff’s remaining argument is that the trial court erred in denying plaintiff’s request to
have Aisha Coleman’s deposition read into evidence after she refused to appear and testify at
trial. Plaintiff does develop, to some extent, an argument that Coleman was unavailable as a
witness and, therefore, her deposition testimony was admissible under MRE 804(a)(5) and (b).
But, ultimately, we agree with defendant and the trial court that plaintiff has failed to establish
that the witness was unavailable.
Plaintiff states in his brief that counsel contacted Coleman by telephone and was told by
her that she would not testify. Counsel then sent her a subpoena by first-class mail one week
before the trial. MCR 2.107 only permits service by first-class mail to be made on parties. A
subpoena to testify at trial must be served in accordance with MCR 2.105, unless the witness
returns an acknowledgement of service. MCR 2.506(G)(1) and (2). MCR 2.105(A) requires
personal service or service by registered or certified mail, with restricted delivery, return receipt
requested and service is effective when the recipient acknowledges receipt. Although Coleman
had been a party to this action, she had long since been dismissed by stipulation. Moreover, the
only subpoenas in the lower-court file related to the trial are for Officer McNeil, subpoenaed by
defendant, and one by plaintiff, but which is blank as to whom the subpoena is directed.
Accordingly, service by first-class mail was ineffective, and the trial court properly ruled
that she was not unavailable as a witness.
Affirmed. Defendant may tax costs.
/s/ David H. Sawyer
/s/ Joel P. Hoekstra
/s/ Christopher M. Murray
-2-
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874 F.2d 1015
Mary S. BLANSIT, Wife of/Leslie G. Blansit, Plaintiffs-Appellees,v.HYATT CORPORATION OF DELAWARE, Defendant-Appellant.
No. 88-3437.
United States Court of Appeals,Fifth Circuit.
June 9, 1989.
Craig R. Nelson, Hulse, Nelson & Wanek, New Orleans, La., for defendant-appellant.
James A. McCann, John J. McCann, Charles J. Ferrara, McCann & McCann, New Orleans, La., for plaintiffs-appellees.
Appeal from the United States District Court For the Eastern District of Louisiana.
Before GEE, SMITH and DUHE, Circuit Judges.
DUHE, Circuit Judge:
1
A "runaway" escalator is the culprit in this personal injury action. Hyatt Corporation, the lessor of the escalator, appeals the trial court's determination that it was strictly liable under La.Civ.Code Art. 2317 for injuries sustained by Mr. and Mrs. Leslie Blansit when the escalator's brakes failed. Alternatively, Hyatt seeks to decrease the amount of damages awarded to the Blansits. We affirm.
FACTS
2
The escalator is located in a building owned by Refco Poydras Hotel Joint Venture (Refco) and leased by Hyatt Corporation. It connects the third floor of the New Orleans Hyatt Regency Hotel to the first floor lobby. At the time of the accident, the escalator was turned off and was being used as a stationary stairway. Nevertheless, it began moving rapidly downward, hurling the Blansits onto the lobby floor. Mr. Blansit sustained three fractured ribs, a fractured vertebra, a contusion of the lower back which lasted two to three months, swelling of the left knee, and a hematoma on the left leg. Mrs. Blansit sustained a contusion of her right ribs.
TRIAL COURT OPINION
3
The trial court found that due to the problem with its brakes, the escalator created an unreasonable risk of injury to others. The court also found that under the lease between Refco and Hyatt, Hyatt had assumed custody (garde)1 of the escalator. The trial court further found that Hyatt paid Westinghouse Electric Corporation to maintain the escalator and it considered this evidence of Hyatt's control over the maintenance of the escalator. Accordingly, the district court held Hyatt liable for the Blansits' injuries under La.Civ.Code Art. 2317 which provides for the liability of the guardian of a thing for damages caused by its defect without proof of negligence.
4
The trial court awarded Mr. Blansit $67,500 for disability, pain and suffering, and mental anguish; $10,000 for loss of enjoyment of life; and $3,898.52 for past medical expenses. Mrs. Blansit received $1,500 for pain and suffering and mental anguish; and $5,000 for loss of consortium.
ANALYSIS
1. Custody
5
Hyatt contends the trial court erred in finding it had "custody" (garde) of the escalator. It asserts several theories in support of this claim. First, Hyatt contends it did not have custody of the escalator because it did not supervise or control the maintenance of the escalator. This argument is without merit. It is well settled that things are in one's custody for purposes of Art. 2317 liability if one bears such a relationship to them as to have the right of direction and control over them and to draw benefit from them. Although this relationship is ordinarily associated with ownership, the owner may transfer the guardianship by transferring the thing to another, such as a bailee, lessee or usufructuary, who will bear such a relationship to the thing as to himself have the custody (guardianship) of it. Loescher v. Parr, 324 So.2d 441 (La.1975). Paragraph 18 of the lease between Refco and Hyatt provides that Hyatt "shall solely and exclusively be responsible for operation of the leased property and shall enjoy the exclusive possession thereof and revenues therefrom, all costs and liabilities arising from such operation being costs and liabilities of Hyatt." This paragraph of the lease transferred to Hyatt the care (garde) of the escalator. Hiring Westinghouse to maintain the escalator did not strip Hyatt of its right of direction and control of the escalator. On the contrary, as the trial court found, it is proof of Hyatt's dominion over the escalator.
6
Next, Hyatt contends that it did not have custody (garde) of the escalator because, under the lease with Refco, it merely agreed to be responsible for operation of the hotel and did not assume responsibility for any liabilities arising out of the condition of the escalator. This argument is frivolous. Hyatt agreed to be responsible for operations of the leased property. The escalator was part of the leased property.
7
Next, Hyatt contends it did not have custody of the escalator because an owner [Refco] who leases a defective thing retains custody (garde) of the thing for Article 2317 purposes. This argument is without merit. None of the cases relied on by Hyatt2 is applicable to the instant case. In Detillier and Ross there was evidence that the structural defect causing the loss existed at the time the offending device was transferred by the owner. There is no proof that the escalator was defective when Refco leased it to Hyatt. In Willis the language relied upon is dicta only. There was no transfer of the offending device by the owner. The district court correctly concluded that Hyatt had "custody" (garde) of the escalator.
2. Third Party Fault
8
Hyatt asserts Westinghouse's negligent failure to maintain and/or repair the brakes on the escalator as a defense to its liability under Article 2317. However, it is well settled that the defense of third-party fault does not apply where the third party is acting with the consent of the custodian of the defective thing. Olsen v. Shell Oil Co., 365 So.2d 1285 (La.1979). Westinghouse was acting with the consent of Hyatt. Therefore, Westinghouse's negligence, if any, did not relieve Hyatt of its liability.
3. Damages
9
Hyatt contends Mr. Blansit's awards for disability, pain, suffering, mental anguish, and loss of enjoyment of life are excessive because Mr. Blansit was 50-60% disabled by an arthritic condition before the accident and his impairment was only marginally increased by the accident.
10
Much discretion is left to the trial judge in assessment of damages in cases of offenses. La.Civ.Code 2324.1. Before the court of appeal can disturb an award by a trial court, the record must clearly reveal that the trier of fact abused his discretion in making the award. Perniciaro v. Brinch, 384 So.2d 392, 395 (La.1980). The trial court found Mr. Blansit's back injuries were extremely painful, required the use of a back brace occasionally for one year and continued to cause Mr. Blansit lower back pain at the time of the trial--more than two years after the accident; Additionally, Mr. Blansit fractured three ribs, had swelling and tenderness in his left knee, and a slight loss of motion and ecchymosis about his lower leg. The awards made by the trial court were supported by the record and were not an abuse of discretion.
11
Hyatt contends that the trial court erred in awarding $5,000 to Mrs. Blansit for loss of consortium. Hyatt argues that no proof of such a loss was established at trial, that Mr. Blansit's participation in household activities before the accident was minimal due to his arthritic condition and therefore, the award to Mrs. Blansit was excessive. Under Louisiana law loss of right of performance and material services is one of the elements of consortium for which a plaintiff may recover. Finley v. Bass, 478 So.2d 608 (La.App. 2d Cir.1985). The trial court specifically found, as a result of the accident, Mr. Blansit could no longer perform household chores, rake leaves or shop for groceries. This constitutes a loss of right to material service for which Mrs. Blansit was entitled to recover and for which the trial court's award was not excessive.
12
AFFIRMED.
1
For a discussion of the civilian concept of "garde" in relation to La.Civ.Code Art. 2317 see Ross v. La Coste de Monterville, 502 So.2d 1026 (La.1987); Loescher v. Parr, 324 So.2d 441 (La.1975)
2
Detillier v. Scafco, Ltd., 507 So.2d 829 (La.App. 5th Cir.), cert. denied, 508 So.2d 820 (1987); Ross v. La Coste de Monterville, 502 So.2d 1026 (La.1987); and Willis v. Cajun Electric Power Co-op, Inc., 484 So.2d 726 (La.App. 1st Cir.), cert. denied, 488 So.2d 200 (1986)
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30 F.3d 1488
U.S.v.Allen (John Brett)
NO. 93-2207
United States Court of Appeals,Third Circuit.
June 27, 1994
1
Appeal From: E.D.Pa.
2
AFFIRMED.
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[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as State
v. Martin, Slip Opinion No. 2019-Ohio-2010.]
NOTICE
This slip opinion is subject to formal revision before it is published in an
advance sheet of the Ohio Official Reports. Readers are requested to
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
South Front Street, Columbus, Ohio 43215, of any typographical or other
formal errors in the opinion, in order that corrections may be made before
the opinion is published.
SLIP OPINION NO. 2019-OHIO-2010
THE STATE OF OHIO, APPELLANT, v. MARTIN, APPELLEE.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as State v. Martin, Slip Opinion No. 2019-Ohio-2010.]
Criminal law—R.C. 2945.71 et seq.—Speedy-trial time is tolled when a defendant’s
request for a continuance is made in open court and on the record or the
reasons for the request are evident from the record, regardless of whether
the trial court specifically journalizes those reasons on its docket sheet—
Court of appeals’ judgment reversed and convictions reinstated.
(No. 2017-1463―Submitted January 29, 2019―Decided May 29, 2019.)
APPEAL from the Court of Appeals for Trumbull County,
Nos. 2016-T-0103 and 2016-T-0104, 2017-Ohio-7453.
_________________
STEWART, J.
{¶ 1} This case concerns defendant-appellee Danielle K. Martin’s right to
be brought to trial within 90 days of her arrest pursuant to the speedy-trial
provisions contained in R.C. 2945.71 et seq. The trial court denied Martin’s motion
SUPREME COURT OF OHIO
to dismiss the charges against her for violation of her right to a speedy trial. The
court determined that after factoring in the periods of delay attributable to Martin,
90 days had not elapsed from the date of her arrest to the date she filed her motion
to dismiss. On appeal, the Eleventh District Court of Appeals reversed the trial
court’s judgment and vacated Martin’s convictions. In doing so, the court held that
the continuances, although entered on behalf of the defendant, must be charged
against the state because the trial court’s journal entries either failed to identify
Martin as the requesting party or failed to explain the precise reasons for the delay.
{¶ 2} The state filed this discretionary appeal asking this court to review the
court of appeals’ judgment. We accepted jurisdiction on the following proposition
of law:
Speedy-trial time is not chargeable to the State—and speedy-
trial time is tolled—when a defendant’s request for a continuance is
made in open court and on the record or the reasons for the request
are evident from the record, regardless of whether or not the trial
court specifically journalizes those reasons on its docket sheet.
{¶ 3} We adopt this proposition of law and reverse the court of appeals’
judgment.
BACKGROUND
{¶ 4} Danielle K. Martin was arrested on November 21, 2015, and charged
with numerous misdemeanor violations, the most serious of which were driving
under the influence and failure to comply with the order of a police officer, both
misdemeanors of the first degree. Martin first appeared before the trial court on
November 23 and was released from jail the same day. Martin did not waive her
speedy-trial rights. Accordingly, under R.C. 2945.71 et seq., the government had
90 days after the date of her arrest to bring her to trial.
2
January Term, 2019
{¶ 5} Following Martin’s first appearance, the court held a number of
pretrial hearings. At the first three hearings, held on December 14, 2015, and
January 13 and February 8, 2016, defense counsel asked for continuances so that
he could have time to adequately prepare for trial and discuss a plea deal with
Martin. At the next hearing, held on March 14, defense counsel notified the court
that a satisfactory deal had not been reached and the court set the case for trial on
March 28.
{¶ 6} The transcript and journal entries show that the trial did not proceed
on March 28 but was rescheduled for May 2, “[f]or good cause.” On May 2, the
record shows, Martin’s case did not proceed to trial—this time “[d]ue to conflicting
notices sent.” The trial was rescheduled again, for May 16. On that date, Martin
appeared with counsel and counsel was granted leave to withdraw from the case.
Consequently, the trial was continued so that Martin could secure new counsel.
{¶ 7} The next pretrial hearing was set for June 20; however, prior to that
date, Martin’s new counsel filed a notice of appearance and requested that the
hearing be rescheduled. On June 29, Martin filed a motion to dismiss the charges,
alleging that her speedy-trial rights had been violated.
{¶ 8} The court denied Martin’s motion on August 18. The court’s entry
explains the circumstances surrounding each delay and concludes that only 36 days
of Martin’s speedy-trial time had elapsed when all the tolling events were
considered. Specifically, the court found that Martin’s speedy-trial time had been
tolled from December 14, 2015, to March 14, 2016, due to defense counsel’s
requests for continuances made on the record at the December 14, January 13, and
February 8 pretrial hearings. Then, explaining the period of delay from March 28
to May 16, the court noted:
On some unknown date between March 14 and March 28,
2016, the court learned that [defense counsel] was suffering a
3
SUPREME COURT OF OHIO
serious medical condition making it impossible for him to proceed
with the trial. For that reason, the court agreed to continue the trial
until [defense counsel’s] medical condition was resolved, and his
office advised the defendant that the trial would be reset. The court
deems this continuance as attributable to either the defendant’s own
motion or as otherwise reasonable, as per ORC Section 2945.72(H).
The court reset the trial date for May 2, 2016. * * *
On some unknown date between March 28, 2016 and May
2, 2016, the court learned that [defense counsel] was still suffering
a serious medical condition making it impossible for him to proceed
with the trial. For that reason, the court again agreed to continue the
trial until [defense counsel’s] medical condition was resolved, and
his office advised the defendant that the trial would be reset. The
court deems this continuance as attributable to either the defendant’s
own motion or as otherwise reasonable, as per ORC Section
2945.72(H). The court reset the trial date for May 16, 2016. * * *
On May 16, 2016, [defense counsel] had sufficiently
recovered and appeared with his client. However, as a result of his
lingering medical difficulties, [defense counsel] indicated that he
would be unable to proceed with the trial. [Defense counsel] was
granted leave to withdraw, and the matter was ordered reset to allow
defendant the opportunity to secure new counsel. The court deems
this reset as a continuance attributable to either the defendant’s own
motion or as otherwise reasonable, as per ORC Section 2945.72(H).
{¶ 9} On September 7, Martin filed a motion for reconsideration, which the
court denied. Martin subsequently pleaded no contest to a number of the charges
on October 3, 2016, and was sentenced accordingly.
4
January Term, 2019
{¶ 10} Martin’s sole argument in the court of appeals was that the trial court
should have found that the period of delay from December 14, 2015, to March 14,
2016, was attributable to the state. The court of appeals agreed with Martin but
went even further in its analysis and set forth an alternative reason for finding a
speedy-trial violation.
{¶ 11} In its decision overturning the trial court’s denial of Martin’s motion
to dismiss and vacating Martin’s convictions, the court of appeals held that the
entire 112-day delay from November 22, 2015, to March 14, 2016, was chargeable
to the state because the court had failed to record in its journal entries that Martin
had requested the continuances. In reaching this conclusion, the court relied on one
of its previous decisions that adopted the holding in State v. Geraldo, 13 Ohio
App.3d 27, 30-31, 468 N.E.2d 328 (6th Dist.1983) (the journal entry granting a
continuance must identify the party to whom the continuance is chargeable, or else
the delay is charged against the state).
{¶ 12} Going further, the court of appeals found that even if the period from
December 14 to March 14 were chargeable to Martin, the time from Martin’s arrest
until September 7, when defense counsel filed his motion for reconsideration of the
motion to dismiss, included 91 days that were chargeable to the state. Thus, the
court of appeals held, the trial court should have granted Martin’s motion for
reconsideration. In so holding, the court of appeals rejected the trial court’s
determination that the period from March 28 to May 2 was chargeable to Martin.
Noting that the trial court’s journal entry failed to establish which party had
requested the continuance or whether it had been entered sua sponte, the court of
appeals concluded that if the continuance constituted a sua sponte order under R.C.
2945.72(H), the speedy-trial time was not tolled unless the order was accompanied
by a journal entry setting forth the justification for the continuance pursuant to this
court’s decision in State v. Mincy, 2 Ohio St.3d 6, 441 N.E.2d 571 (1982). Because
the trial court failed to give specific reasons justifying its continuance and instead
5
SUPREME COURT OF OHIO
merely stated that the continuance was “[f]or good cause,” the court of appeals
found that the 35-day period from March 28 to May 2 should have been charged
against the state, not against Martin. The court of appeals found that when adding
this period to the 36 days from the prior periods of delay, 71 speedy-trial days had
elapsed.
{¶ 13} The court went on to find that the period of delay from May 2 to
August 18 did not count toward the speedy-trial time, because it resulted in part
from a reasonable continuance brought on by a clerical error and in part from
continuance requests by Martin related to the withdrawal of defense counsel, the
retaining of new counsel, and Martin’s motion to dismiss.
{¶ 14} Although the court of appeals agreed that if the trial court had been
correct in its finding that the delay from December 14, 2015, to March 14, 2016,
should be counted against Martin, then its August 18 denial of the motion to dismiss
would also have been correct, it nevertheless found that the trial court erred in
denying Martin’s motion for reconsideration. The court of appeals reasoned that at
the time the motion for reconsideration was filed on September 7, 20 additional
days had run against the state, placing the total speedy-trial time at 91 days.
ANALYSIS
{¶ 15} Criminal defendants are guaranteed the right to a speedy trial under
state and federal law. Ohio Constitution, Article I, Section 10; Sixth Amendment
to the U.S. Constitution. In Ohio, both the state and federal constitutional speedy-
trial guarantees are codified in R.C. 2945.71 et seq. See State v. Parker, 113 Ohio
St.3d 207, 2007-Ohio-1534, 863 N.E.2d 1032, ¶ 11. Pursuant to R.C.
2945.71(B)(2), a person against whom a first-degree-misdemeanor charge is
pending must be brought to trial within 90 days of her arrest. Although the time
limits contained in R.C. 2945.71 must be strictly enforced, R.C. 2945.72 provides
a number of events and circumstances that will toll the running of a defendant’s
speedy-trial time. State v. Ramey, 132 Ohio St.3d 309, 2012-Ohio-2904, 971
6
January Term, 2019
N.E.2d 937, ¶ 24. Pursuant to R.C. 2945.72(H), “[t]he time within which an
accused must be brought to trial * * * may be extended” by “[t]he period of any
continuance granted on the accused’s own motion, and the period of any reasonable
continuance granted other than upon the accused’s own motion.”
{¶ 16} The court of appeals determined that the period of delay from
December 14, 2015, to March 14, 2016, counted against the state because the court
did not note in its journal entries that Martin had requested the continuances during
that period. This determination was incorrect. In State v. Myers, 97 Ohio St.3d
335, 2002-Ohio-6658, 780 N.E.2d 186, this court explained that a court’s journal
entry need not identify the defendant as the requesting party in order for the speedy-
trial time to toll, so long as the record affirmatively demonstrates that the defendant
requested the continuance. Id. at ¶ 54. The pretrial-hearing transcripts
affirmatively show that Martin’s counsel requested all the continuances between
December 14, 2015, and March 14, 2016. Accordingly, the speedy-trial time was
tolled during that time. After removing that period of delay from the speedy-trial
calculation, 36 days of Martin’s speedy-trial time had run as of March 28, 2016.
{¶ 17} The court of appeals’ reliance on Geraldo, 13 Ohio App.3d 27, 468
N.E.2d 328, and its progeny—for the holding that a journal entry must specify the
party requesting the continuance or else the delay is counted against the state—is
misplaced. This court overruled that holding in Myers. Id. at ¶ 54 (“contrary to the
statement in Geraldo, this court has never required that the entry identify the
defendant as the requesting party” in order for the continuance to be charged against
the defendant).
{¶ 18} We also hold that the court of appeals’ alternative reasoning for
finding a speedy-trial violation (by counting 35 days against the state for the period
of March 28 to May 2) was in error. First, Martin never argued that this time period
presented an alternative ground for finding a speedy-trial violation. Rather, Martin
maintained that the speedy-trial violation was due to the delay from December 14,
7
SUPREME COURT OF OHIO
2015, to March 14, 2016, which she alleged was time charged against the state
because the court’s journal entries failed to indicate which party had requested the
continuances. “[A]ppellate courts should not decide cases on the basis of a new,
unbriefed issue without ‘giv[ing] the parties notice of its intention and an
opportunity to brief the issue.’ ” State v. Tate, 140 Ohio St.3d 442, 2014-Ohio-
3667, 19 N.E.3d 888, ¶ 21, citing State v. 1981 Dodge Ram Van, 36 Ohio St.3d
168, 170, 522 N.E.2d 524 (1988).
{¶ 19} Further, we specifically reject the court of appeals’ determination
that the time period from March 28 to May 2 was chargeable to the state because
the trial court had failed to provide the specific reasons for the continuance in its
journal entry. The appellate court concluded that the order allowing the 35-day
continuance from March 28 to May 2 was entered sua sponte, rather than at the
defendant’s request. Although this court’s decision in Mincy, 2 Ohio St.3d 6, 441
N.E.2d 571, requires a trial court to journalize its reasons for a sua sponte
continuance, the same does not apply for continuances that are granted at the
defendant’s request. See Myers, 97 Ohio St.3d 335, 2002-Ohio-6658, 780 N.E.2d
186. Here, the record supports a finding that the continuance was granted at
Martin’s request.
{¶ 20} The trial court’s journal entry for March 28, 2016, states that the trial
was reset “[f]or good cause.” There is no indication from the record that Martin
objected to the continuance at the time it was entered or that she considered the
delay therefrom to be attributable to the state for purposes of her motion to dismiss.
Martin’s motion to dismiss did not mention any specific delay or delays as the basis
for the motion. Rather, Martin’s motion was sufficiently broad and vague to cover
all the delays between her arrest on November 21, 2015, and her June 29, 2016
motion to dismiss. Although the trial court did address the March 28 to May 2
delay in its judgment entry denying the motion, the court doubtlessly did so only to
cover all the delays that Martin could have been referring to in her motion to
8
January Term, 2019
dismiss. The court explained that the reason for the delay from March 28 to May
2 was defense counsel’s illness and that therefore the time should not be counted
against the state. This judgment was journalized, thus becoming part of the record,
on August 18, 2016, see State v. Ellington, 36 Ohio App.3d 76, 78, 521 N.E.2d 504
(9th Dist.1987) (a written and signed judgment becomes part of the court’s
permanent record when it is time-stamped and filed by the clerk).
{¶ 21} After that ruling, Martin had ample opportunity to object to the
court’s characterization of the continuance. She could have objected in her motion
for reconsideration, but she did not. Instead, the motion for reconsideration argued
only that the delay from December 14 to March 14 should count against the state
because of the court’s failure to journalize the fact that Martin was the requesting
party. Martin’s merit brief in the court of appeals makes the same argument. In
fact, Martin never once mentioned this period of delay as being attributable to the
state until her appeal to this court, which was of course after the court of appeals
mentioned that period of delay as an alternative reason for its holding.
{¶ 22} Even now, Martin does not genuinely dispute the accuracy of the
trial court’s statement that the trial was continued from March 28 to May 2 because
of defense counsel’s illness. Instead, she claims that the delay should count against
the state because the court failed to include this reason in its March 28 journal entry.
Moreover, she asserts that the explanation contained in the August 18 judgment
entry is a post hoc justification that this court should ignore.
{¶ 23} However, it is hard to believe that the trial court could have known
of defense counsel’s illness and the need for a continuance without counsel’s
having advised the court of those facts. It is also understandable that a trial court,
out of respect for counsel’s privacy, may not want to publicly disclose upon its
journal that the reason a trial has to be continued is defense counsel’s serious illness.
These two factors, along with the fact that Martin failed to object to both the
9
SUPREME COURT OF OHIO
continuance and the trial court’s August 18 entry explaining the reason for the
continuance, lend credence to the trial court’s August 18 judgment entry.
{¶ 24} Because the March 28-to-May-2 continuance resulted not from the
court’s sua sponte decision to delay trial but from either defense counsel’s request
for, or at the very least consent to, a reasonable delay to preserve Martin’s right to
representation by competent counsel, we do not find that the 35-day delay from
March 28 to May 2 was attributable to the state.
{¶ 25} In reaching this conclusion, we realize that the specific facts
surrounding the March-28-to-May-2 continuance are such that the case cannot
neatly be resolved by applying only Myers, 97 Ohio St.3d 335, 2002-Ohio-6658,
780 N.E.2d 186, and Mincy, 2 Ohio St.3d 6, 441 N.E.2d 571; the record does not
affirmatively show that Martin’s counsel requested the continuance, as Myers
would require, but it strongly indicates that the order was not entered sua sponte,
thus obviating the need to apply Mincy’s holding that the court must state its reasons
for the continuance in its journal entry or the delay is counted against the state. In
cases such as these, hard-line rules announced in decisions such as Myers and
Mincy serve only as guideposts for a court’s analysis. Reviewing courts must focus
on the underlying source of the delay. See State v. Bauer, 61 Ohio St.2d 83, 84,
399 N.E.2d 555 (1980). When the facts and circumstances of the case show that
the underlying source of the delay was attributable to the defendant, it would make
a mockery of justice to attribute the delay to the state. See id.
{¶ 26} Because we are satisfied that the underlying source of the delay in
this case was attributable to Martin, we hold that no speedy-trial violation occurred.
The judgment of the Eleventh District is reversed, and Martin’s convictions are
reinstated.
Judgment reversed
and convictions reinstated.
KENNEDY, FRENCH, DEWINE, and DONNELLY, JJ., concur.
10
January Term, 2019
O’CONNOR, C.J., and FISCHER, J., would dismiss the appeal as having been
improvidently accepted.
_________________
Dennis Watkins, Trumbull County Prosecuting Attorney, and Deena L.
DeVico and Ashleigh J. Musick, Assistant Prosecuting Attorneys, for appellant.
Timothy Young, Ohio Public Defender, and Katherine R. Ross-Kinzie,
Assistant Public Defender, for appellee.
_________________
11
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U.S. v. Grigoruk
UNITED STATES, Appellee
v.
Sean G. GRIGORUK, Staff Sergeant
U.S. Army, Appellant
No. 98-1089
Crim. App. No. 9600949
United States Court of Appeals for the Armed
Forces
Argued December 9, 1999
Decided March 13, 2000
GIERKE, J., delivered the opinion of the
Court, in which SULLIVAN and EFFRON, JJ., and COX, S.J., joined. CRAWFORD,
C.J. filed an opinion concurring in part and dissenting in part.
Counsel
For Appellant: David P. Sheldon (argued);
Eugene
R. Fidell, Mary Price, and Captain Steven P. Haight (on
brief); Lynmarie Cusack, Gary R. Myers, and Captain
Paul J. Perrone.
For Appellee: Captain Kelly D. Haywood
(argued); Colonel Russell S. Estey, Lieutenant Colonel Eugene
R. Milhizer, and Major Patricia A. Ham (on brief); Captain
Arthur J. Coulter.
Military Judge: Robert F. Holland
THIS OPINION IS SUBJECT
TO EDITORIAL CORRECTION BEFORE PUBLICATION.
Judge GIERKE delivered the opinion of the Court.
A general court-martial composed of officer
and enlisted members convicted appellant, contrary to his pleas, of 2 specifications
each of rape, sodomy, and indecent acts with a child under the age of 16,
in violation of Articles 120, 125, and 134, Uniform Code of Military Justice,
10 USC §§ 920, 925, and 934, respectively. The adjudged and approved
sentence provides for a dishonorable discharge, confinement for 20 years,
total forfeitures, and reduction to the lowest enlisted grade. The Court
of Criminal Appeals affirmed the findings and sentence without opinion.
This Court granted review of the following
issues:
I
WHETHER TRIAL DEFENSE COUNSEL PROVIDED INEFFECTIVE
ASSISTANCE OF COUNSEL WHEN HE FAILED TO (1) CALL AN EXPERT WITNESS WHO
WOULD PROVIDE CREDIBLE EVIDENCE THAT SUPPORTED THE DEFENSES THEORY OF
THE CASE; (2) CROSS-EXAMINE A NUMBER OF WITNESSES REGARDING PERTINENT FACTS
IN DISPUTE; AND (3) STIPULATED TO DAMNING EVIDENCE.
II
WHETHER THE REVIEWING COURT CONDUCTED MEANINGFUL
APPELLATE REVIEW WHEN IT FAILED TO ORDER TRIAL DEFENSE COUNSEL TO SUBMIT
AN AFFIDAVIT WHEN A VIABLE CLAIM FOR INEFFECTIVE ASSISTANCE OF COUNSEL
HAD BEEN RAISED.
For the reasons set out below, we remand for further
factfinding and review.
Factual Background
The charges in this case were based on accusations
by appellants stepdaughter, DW. She was 4 years old at the time of the
first alleged incidents, between 5 and 8 years old at the time of the second
alleged incidents, and 9 years old at the time of trial.
Appellant and his ex-wife, an Army sergeant,
were married for about 5 years and divorced about 1 year before the court-martial.
DW was the natural daughter of appellants wife and was about 2 years old
when appellant married her mother. The subsequent divorce was the result
of frequent separations and deployments, and appellants extramarital affair.
In a pretrial statement to agents of the U.S. Army Criminal Investigation
Command (CID), appellant characterized the divorce as "coupled with animosity."
Anticipating a credibility battle between appellant
and DW, defense counsel requested the convening authority to employ Dr.
Ralph Underwager, a child psychologist, as an expert witness for the defense.
After the convening authority denied the request, defense counsel asked
the military judge for relief. Defense counsel represented that Dr. Underwager
would support the defense theory that the accusations were fabricated by
explaining the factors that cause a child to make false accusations. Specifically,
the defense proffered that Dr. Underwager would provide expert testimony
on four points relevant to the defense theory of the case:
(1) A conflicted family environment, particularly
divorce and separation from parents, may influence a child to fabricate
stories of abuse;
(2) Because children are more suggestible than
adults, repeated questioning can teach or reinforce a false accusation;
(3) The initial assumptions of a child interviewer
are a powerful determinant of what the child reports; and
(4) Consistent repetition is more indicative
of learned behavior than actual memory.
The military judge ruled that the first three
points were permissible areas of expert testimony. He ordered the Government
to produce Dr. Underwager or a suitable substitute. He conditioned his
ruling on the defenses ability to produce evidence of the underlying hypothetical
facts on which Dr. Underwager would base his expert opinion.
DW testified at trial, describing the conduct
on which the charges were based in graphic detail. She testified that appellant
told her not to tell anyone about his conduct with her, but that she told
a babysitter "[c]ause I had to tell somebody."
The prosecution presented the stipulated testimony
of a medical doctor who had conducted a genital-rectal examination of DW
and found her condition "normal." The doctor also stated that a "normal"
diagnosis is not inconsistent with an allegation of sexual abuse.
The prosecution also presented the stipulated
testimony of a CID agent who questioned appellant twice. The first time
appellant categorically denied DWs accusations. Responding to questions
about the source of DWs sexual knowledge, he told the CID that DW had
entered his bedroom while he and his wife were engaged in sexual intercourse.
He further stated that DW had entered the bedroom while appellant and his
current girl friend were having sexual intercourse and that he had caught
DW looking through the crack of the bedroom door when appellant thought
she was asleep.
According to the CID agent, appellant was later
confronted with the evidence and said, "I know something happened but not
all that." After being advised that it would be in his best interest to
cooperate with the investigation, appellant said, "I guess all I can do
is try to plea bargain." Appellants second statement was not reduced to
writing. Appellants ex-wife testified that she learned of appellants
conduct from the babysitter. She testified that she initially "could not
believe that something of that nature had taken place." She admitted that
employees of the Tennessee Department of Human Services had mentioned the
possibility that DW would be placed in a foster home if she did not support
her daughter. She testified that DW had "told lies in the past." She testified
that when DW had lied in the past, she and appellant "would usually confront
her and drill her and, you know, question her over and over until she told
the truth."
Appellant testified in his own defense and
categorically denied the allegations. He described an incident of DWs
destructive behavior, where, shortly after the birth of her younger brother,
she went into the kitchen and destroyed everything related to the baby
and his food. Appellant described a second incident when DW hit her younger
brother in the back with a large toy. She initially blamed it on the babysitter,
but finally admitted doing it. Appellant admitted having an extramarital
affair and fathering a child by another woman. He testified that, as his
marriage deteriorated, DW became hostile, and they grew distant.
The defense presented evidence of good character.
A first sergeant testified that appellant was "a very good noncommissioned
officer" and "a very good parent." Another first sergeant testified that
appellant was a good soldier and "very honest." A friend and fellow noncommissioned
officer testified that appellant was "a very good parent." A subordinate
characterized him as "a great parent." Appellants father characterized
him as "a stern parent" but "a fair parent."
The defense did not present evidence from Dr.
Underwager or any other expert in child psychology. In a post-trial affidavit
filed with the court below, appellant asserts that his defense counsel
told him shortly before the trial that he had decided not to use Dr. Underwager.
According to appellant, defense counsel "believed the prosecution had some
dirt on our intended expert which would be used in an attempt to discredit
him and make him out as a hired gun going to the highest bidder." There
is no affidavit from defense counsel in the record.
Appellant now asserts that his defense counsel
were ineffective in three particulars: (1) failure to use Dr. Underwager,
or any other expert, to challenge DWs credibility; (2)failure to cross-examine
the CID agents about the context of appellants oral statements; and (3)
stipulating to damning testimony of the medical doctor that a normal genital-rectal
examination was not inconsistent with sexual abuse.
Discussion
This Court has adopted the Supreme Courts
test for effectiveness of counsel articulated in Strickland v. Washington,
466 U.S. 668, 687 (1984), including the presumption of competence announced
in United States v. Cronic, 466 U.S. 648, 658 (1984). See
United States v. Scott, 24 MJ 186, 188 (1987). In United States
v. Polk, 32 MJ 150, 153 (1991), our Court adopted this three-pronged
test to determine if the presumption of competence has been overcome:
(1) Are appellants allegations true; if so,
"is there a reasonable explanation for counsels actions"?
(2) If the allegations are true, did defense
counsels level of advocacy fall "measurably below the performance . .
. [ordinarily expected] of fallible lawyers"? and
(3) If defense counsel was ineffective, is
there "a reasonable probability that, absent the errors," there would have
been a different result.
Our Court "will not second-guess the strategic
or tactical decisions made at trial by defense counsel." See United
States v. Morgan, 37 MJ 407, 410 (1993). On the other hand, where it
is not apparent what decisions were made or even that a strategic or tactical
decision was made, further inquiry may be required. We will not, however,
compel a defense counsel to justify decisions made at trial --
until a court of competent jurisdiction reviews
the allegation of ineffectiveness and the government response, examines
the record, and determines that the allegation and the record contain evidence
which, if unrebutted, would overcome the presumption of competence.
United States v. Lewis, 42 MJ 1, 6 (1995).
We will also require an appellant to establish a factual foundation for
a claim of ineffective representation. Sweeping, generalized accusations
will not suffice. See United States v. Moulton, 47 MJ 227,
229 (1997).
Applying the foregoing principles, we hold
that appellant has met the threshold for ordering further inquiry. This
case was a classic credibility contest between appellant and DW. The record
reflects that defense counsel prevailed on a contested motion to compel
the production of Dr. Underwager or another equivalent expert. The defense
established the factual predicate for the proffered expert testimony. Inexplicably,
however, defense counsel did not call Dr. Underwager or any other expert
to challenge DWs credibility. We hold that appellant has met the Lewis
threshold for compelling defense counsel to explain his actions. See
United States v. Clark, 49 MJ 98 (1998) (failure to call accident-reconstruction
expert was ineffective representation).
With respect to appellants remaining complaints
about his counsels performance, we hold that appellant has not met the
Lewis
threshold. Failure to cross-examine the CID agents is not ineffective representation,
in the absence of evidence showing what that cross-examination might reasonably
have accomplished. Similarly, stipulating to the medical doctors testimony
is not ineffective representation, in the absence of a showing that her
testimony in person would have been more favorable to appellant.
Decision
The decision of the United States Army Court
of Criminal Appeals is set aside. The record of trial is returned to the
Judge Advocate General of the Army for remand to the court below. That
court will request an affidavit from defense counsel explaining why Dr.
Underwager or any other expert in child psychology was not called to challenge
DWs credibility. The court will obtain additional evidence if necessary,
conduct further factfinding in a manner consistent with United States
v. Ginn, 47 MJ 236 (1997), and then reconsider appellants claim of
ineffective representation. Thereafter, Article 67(a), UCMJ, 10 USC §
867(a) (1994), will apply.
CRAWFORD, Chief Judge (concurring in part and
dissenting in part):
The majority has again1
lost track of the real issue and refused to heed then-Chief Judge Coxs
admonition in United States v. Ingham: the issue "is not what a
certain expert might or might not have opined, but whether defense counsel
was ineffective in contesting the assertions of the victim. Thus the question
is how did counsel deal with the witness testimony." 42 MJ 218, 226
(1995), cert. denied, 516 U.S. 1063 (1996). Instead, this
Court appears to be fashioning a rule that requires a trial defense counsel
to submit a written explanation for his or her strategy whenever
experts are used by defense counsel in pretrial preparation, but are not
called to testify at trial. As I do not agree that this or any appellant
can meet the first prong of the test set forth in United States v. Polk,
32 MJ 150 (CMA 1991), and establish ineffective representation by merely
showing "some expert would have said something consistent with an accuseds
views,"2 I dissent from
so much of the Courts opinion as holds that appellant has met the threshold
for compelling defense counsels explanation for not calling Dr. Underwager
to testify.
In applying the Supreme Courts test for effectiveness
of counsel, the starting point for examining counsels presumed competence
is "whether counsel had a reasonable trial strategy one supported by
the law and evidence." Ingham, supra at 224. My analysis
of this record of trial shows the trial defense counsel had a reasonable
strategy attack the victims credibility and put her truthfulness "squarely
before the court members." Id. at 227. Since counsel is presumed
competent, United States v. Cronic, 466 U.S. 648, 658 (1984), this
Court should accord trial defense counsel the presumption that he evaluated
all the evidence and selected the strategy that would most likely be successful.
See
United States v. Fluellen, 40 MJ 96, 98 (CMA 1994).
I completely agree with the majoritys evaluation
of this case as "a classic credibility contest between appellant and DW."
___ MJ ___ at (8). Cross-examination of DW showed the factfinders
that DW held appellant responsible for breaking up her home, for taking
her brother away, and for marital fights. She further explained that appellant
had treated her less fairly than he treated his natural child. Finally,
both DW and appellants father labeled him as a strict, no-nonsense disciplinarian.
Coupled with testimony from the victims mother that DW had made false
statements in the past, trial defense counsels strategy was to portray
DW as a revenge-seeking liar and convince the court members that her allegations
of being raped and sodomized by her stepfather were more falsehoods.
As the majority notes, the military judges
ruling, granting trial defense counsels request for Dr. Underwager or
other expert testimony, was "conditioned . . . on the defenses ability
to produce evidence of the underlying hypothetical facts on which Dr.
Underwager would base his expert opinion." ___ MJ at (4). By returning
this case to the lower court for additional factfinding concerning defense
counsels failure to produce expert testimony, the majority appears to
assume that defense counsel could have laid the foundation that would have
permitted Dr. Underwager to testify. I can make no such assumption.
Even if Dr. Underwager, a witness who had never
interviewed the victim, had testified within those parameters laid out
by the military judge and in accordance with his post-trial affidavit,
his testimony would have been cumulative. In comparing Dr. Underwagers
opinion, which trial defense counsel had during his pretrial preparations,
to the defense counsels trial strategy, the evidence of record convinces
me that appellants counsel effectively utilized Dr. Underwagers advice
in his presentation of the defense case. Finally, had Dr. Underwager testified,
the record of trial shows that the Government would have been allowed to
counter with an expert of its own.
The Courts action today expands the first
prong of the test we adopted in Polk, 32 MJ at 153, to now require
a written explanation for counsels actions in the defense of a court-martial,
at least when dealing with expert testimony. It is clear that the majority
will
"second-guess" the strategic and tactical decisions of a trial defense
counsel, contrary to our decision in United States v. Morgan, 37
MJ 407, 410 (1993). When use of expert testimony is at issue, I cannot
agree that the requirement for a "reasonable explanation for counsels
actions," set out in Polk (32 MJ at 153) contemplated a written
explanation from the trial defense counsel when the record of trial otherwise
provides a cogent reason for a tactical decision. As I fear that this Court
has fashioned a rule that will lead us back down the slippery slope of
"battling affidavits," a practice we wisely discarded in United States
v. Lewis, 42 MJ 1 (1995), and United States v. Ginn, 47 MJ 236
(1997), I respectfully dissent. Having found a plausible explanation within
the pages of appellants record of trial for trial defense counsels failure
to call Dr. Underwager as a witness, I would affirm the findings and sentence
now.
FOOTNOTES:
1 See United
States v. Clark, 49 MJ 98, 101 (1998)(Crawford, J., dissenting).
2Ingham,
supra at 226.
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230 P.3d 934 (2010)
348 Or. 280
STATE
v.
NEVAREZ.
(S058228).
Supreme Court of Oregon.
April 29, 2010.
Petition for review denied.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-4028
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
JOSEPH R. BAIR, JR.,
Defendant – Appellant.
No. 11-4029
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
JOSEPH R. BAIR, JR.,
Defendant – Appellant.
Appeals from the United States District Court for the Southern
District of West Virginia, at Beckley. Irene C. Berger,
District Judge. (5:08-cr-00264-1; 5:09-cr-00192-1)
Submitted: August 24, 2011 Decided: September 12, 2011
Before NIEMEYER and AGEE, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
Christopher S. Dodrill, ALLEN GUTHRIE & THOMAS, PLLC,
Charleston, West Virginia, for Appellant. Miller A. Bushong,
III, OFFICE OF THE UNITED STATES ATTORNEY, Beckley, West
Virginia; Betty Adkins Pullin, OFFICE OF THE UNITED STATES
ATTORNEY, Charleston, West Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
Joseph R. Bair, Jr., appeals the twenty-seven-month
sentence imposed following his guilty plea to distributing
hydrocodone, in violation of 21 U.S.C.A. § 841(a)(1) (West 1999
& Supp. 2011), and corruptly obstructing the due administration
of tax laws, in violation of 26 U.S.C. § 7212(a) (2006).
Counsel for Bair filed a brief in this court in accordance with
Anders v. California, 386 U.S. 738 (1967), questioning whether
the district court adequately explained the sentence and whether
trial counsel provided ineffective assistance. Counsel states,
however, that he has found no meritorious grounds for appeal.
Bair filed several pro se supplemental briefs. Because we find
no meritorious grounds for appeal, we affirm.
We review a sentence imposed by a district court under
a deferential abuse of discretion standard. Gall v. United
States, 552 U.S. 38, 51 (2007); United States v. Lynn, 592 F.3d
572, 575-76 (4th Cir. 2010). We begin by reviewing the sentence
for significant procedural error, including such errors as
“failing to calculate (or improperly calculating) the Guidelines
range, treating the Guidelines as mandatory, failing to consider
the [18 U.S.C.] § 3553(a) [(2006)] factors, selecting a sentence
based on clearly erroneous facts, or failing to adequately
explain the chosen sentence — including an explanation for any
deviation from the Guidelines range.” Gall, 552 U.S. at 51. If
3
there are no procedural errors, we then consider the substantive
reasonableness of the sentence, taking into account the totality
of the circumstances. United States v. Mendoza-Mendoza, 597
F.3d 212, 216 (4th Cir. 2010).
“When rendering a sentence, the district court ‘must
make an individualized assessment based on the facts
presented.’” United States v. Carter, 564 F.3d 325, 328 (4th
Cir. 2009) (quoting Gall, 552 U.S. at 50) (emphasis omitted).
Accordingly, a sentencing court must apply the relevant
§ 3553(a) factors to the particular facts presented and must
“‘state in open court’” the particular reasons that support its
chosen sentence. Id. (quoting 18 U.S.C.A. § 3553(c) (West 2000
& Supp. 2011)). The court‘s explanation need not be exhaustive;
it must be “sufficient ‘to satisfy the appellate court that the
district court has considered the parties’ arguments and has a
reasoned basis for exercising its own legal decisionmaking
authority.’” United States v. Boulware, 604 F.3d 832, 837
(4th Cir. 2010) (quoting Rita v. United States, 551 U.S. 338,
356 (2007)) (alterations omitted).
We conclude that the sentence imposed by the district
court was both procedurally and substantively reasonable. The
district court calculated the Guidelines range and understood
that it was advisory. Furthermore, it is apparent that the
court had a reasoned basis for its decision. The court made an
4
individualized statement explaining the sentence imposed. Thus,
the court imposed a reasonable sentence under the circumstances.
Additionally, Bair is not entitled to relief on his
claim of ineffective assistance of counsel. We will address a
claim of ineffective assistance on direct appeal only if the
lawyer’s ineffectiveness conclusively appears on the record.
United States v. Baldovinos, 434 F.3d 233, 239 (4th Cir. 2006).
Otherwise, such claims are more properly raised in a motion
filed pursuant to 28 U.S.C.A. § 2255 (West Supp. 2010). Our
review convinces us that ineffective assistance does not
conclusively appear on the face of this record, and therefore we
decline to address this claim on direct appeal.
In accordance with Anders, we have reviewed the record
in this case and have found no meritorious issues for appeal.
We therefore grant Bair’s motions to file additional pro se
supplemental briefs, and affirm the district court’s judgment.
This court requires that counsel inform Bair, in writing, of the
right to petition the Supreme Court of the United States for
further review. If Bair requests that a petition be filed, but
counsel believes that such a petition would be frivolous, then
counsel may move in this court for leave to withdraw from
representation. Counsel’s motion must state that a copy thereof
was served on Bair. We dispense with oral argument because the
facts and legal contentions are adequately presented in the
5
materials before the court and argument would not aid the
decisional process.
AFFIRMED
6
| {
"pile_set_name": "FreeLaw"
} |
252 F.Supp.2d 728 (2003)
Gregory HALE, Plaintiff,
v.
Augustus SCOTT, Jr., Warden; Lana Wildman, Librarian; Gary Wyles, Lieutenant of Internal Affairs; and Donald N. Snyder, Jr., Director of Illinois Department of Corrections, Defendants.
No. 01-CV-3052.
United States District Court, CD. Illinois.
March 17, 2003.
*729 Gregory Hale, Chicago, IL, Pro se.
Michael J. McGee, Office of Illinois Attorney General, Springfield, IL, for Defendant.
Order
BAKER, District Judge.
On January 28, 2002, all the plaintiffs claims were dismissed for failure to state a claim except for his claims that:
1) the discipline he received for insolence based on the content of his prison grievance violated his First Amendment rights;
2) he was transferred to another prison in retaliation for exercising his right of access to the courts or for helping others exercise their right of access to the courts; and,
3) defendant Wildman retaliated against the plaintiff for exercising his right of access to the courts by refusing him copies of necessary legal documents and/or otherwise hindering his use of the library.
Before the court is the defendants' motion for summary judgment [d/e 53], which is granted for the reasons below.
Standards
A party moving for summary judgment must show, from the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ..." that there is no genuine issue of material fact and that the "moving party is entitled to judgment as a matter of law." Outlaw v. Newkirk, 259 F.3d 833, 837 (7th Cir.2001), citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986);Fed. R. Civ. P.56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Herman v. National Broadcasting Co., Inc., 744 F.2d 604, 607 (7th Cir.1984), cert, denied, 470 U.S. 1028, 105 S.Ct. 1393, 84 L.Ed.2d 782 (1985). This burden can be satisfied by " `showing'that is, pointing out to the district courtthat there is an absence of evidence to support the nonmoving party's case." Celotex, All U.S. at 325, 106 S.Ct. 2548. If such a showing is made, the burden shifts to the non-movant to "set forth specific facts showing that there is a genuine issue for trial." Fed. R.Civ.P. 56(e); Outlaw, 259 F.3d at 837. A nonmoving party cannot rest on its pleadings, but must demonstrate that there is admissible evidence that will support its position. Tolle v. Carroll Touch, Inc., 23 F.3d 174, 178 (7th Cir.1994). Credibility questions "defeat summary judgment only `[w]here an issue as to a material fact cannot be resolved without *730 observation of the demeanor of witnesses in order to evaluate their credibility.'" Outlaw, 259 F.3d at 838, citing Advisory Committee Notes, 1963 Amendment to Fed.R.Civ.P. 56(e)(other citations omitted).
In determining whether factual issues exist, the court must view all the evidence in the light most favorable to the nonmoving party. Beraha v. Baxter Health Corp., 956 F.2d 1436, 1440 (7th Cir.1992). However, Rule 56(c) "mandates the entry of summary judgment, after adequate time for discovery and upon motion, 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, 477 U.S. at 322, 106 S.Ct. 2548. "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party there is no `genuine' issue for trial." Mechnig v. Sears, Roebuck & Co., 864 F.2d 1359 (7th Cir.1988). A "metaphysical doubt" will not suffice. Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Disputed facts are material only if they might affect the outcome of the suit. First Ind. Bank v. Baker, 957 F.2d 506, 507-08 (7th Cir.1992). "Summary judgement is not a discretionary remedy. If the plaintiff lacks enough evidence, summary judgement must be granted." Jones v. Johnson, 26 F.3d 727, 728 (7th Cir.1994).
Background and Facts
On June 30, 1999, during his incarceration at Lincoln Correctional Center ("Lincoln"), the plaintiff filed a grievance against an Officer Drone. [Complaint, d/e 5 at p. 4]. The grievance stated that Officer Drone failed to "call chow" in the mornings, dozed off during duty, talked on the phone excessively, and slandered the plaintiffs name by labeling him to other inmates as a complainer. The plaintiff characterized Officer Drone as unethical and unprofessional. The plaintiff further accused this officer of "fratilizing"[1] with inmates, including the plaintiff. He stated,
Furthermore, I have observed C/O Drone badge # 138, Fratilizing with inmates and on two occasions with me. In which she told me that this is her third 90 days being assigned to Housing Unit 5B, and she must be doing something right, why she hadn't been moved. Rumor goes according to inmates that have been on the unit since she came, [Officer Drone] is screwing a lot of the Officer's on the midnight shift along with a few Sergeants and Lt's, etc.. Maybe C/O Drone had became to at ease with H.U. 5B and should be reassigned or put on days to enable her to review how to perform her job assignment when assigned to Housing unit.
[Grievance attached to Complaint, d/e 5, [sics not specifically identified]]. The plaintiff requested in his grievance that the administration discipline the officer, remove her from the unit or switch her to the day shift.
The grievance officer's response was "The allegations/accusation Mr. Hale cites in this grievance are quite serious in nature. The matter has already been referred to Internal Affairs for Investigation." Defendant Wyles (a lieutenant) interviewed the plaintiff, and on July 7, 1999, wrote a disciplinary report against the plaintiff accusing him of insolence for his grievance statements referring to the rumors about Officer Drone having sexual intercourse with other officers during her shift. Defendant Wyles' ticket stated that the plaintiff had admitted on interview that it was just a rumor which he had included because "he wanted to put everything he knew about Drone in the grievance." [Disciplinary Report dated *731 7/7/99, attached to Complaint]. The plaintiff stated in his deposition that defendant Wyles had asked him why he had included the statement in his grievance, and the plaintiff had replied, "I said no apparent reason. I was reporting the conduct and that was part of the conduct that I was aware of and I wanted to include that." [Plaintiffs Aff. p. 51. lines 8-11].
An Adjustment Committee Report attached to the plaintiff's complaint found the plaintiff guilty of insolence for stating in his grievance that the officer was "messing (screwing) around with staff members."[2] The Report states that the guilty finding was based on defendant Wyles' credibility and the plaintiffs admission that the accusations against the officer were only rumors. The plaintiff was demoted to C grade for 15 days and received segregation for 15 days.[3]
In a separate incident, the plaintiff alleges that he was transferred to Logan Correctional Center in retaliation for filing his grievances and lawsuits and/or acting as a jailhouse lawyer. Defendant Wildman (the librarian) allegedly refused to allow him to make photocopies of legal documents he needed to file his complaint in an action in Illinois Claims Court and otherwise hindered his library access, in retaliation for his filing grievances and lawsuits. The plaintiff admitted in his deposition that defendant Wildman allowed him to make photocopies when the plaintiff had enough money on the books.
The following facts are offered by the defendants with support in the record and are not disputed by the plaintiff. On October 7, 2000[4], Lincoln was transformed from a men's prison to an exclusively women's prison, medium security. The plaintiff was transferred from Lincoln on September 20, 2000, because of this transformation. The majority of male inmates at Lincoln were transferred to Logan Correctional Center or Dixon Correctional Center.[5] Approximately 260 inmates were transferred from Lincoln to Logan Correctional Center on or before October 7, 2000. The plaintiff admits that the transfer itself was not done in retaliation, but maintains that he was transferred to Logan rather than another minimum security prison in retaliation. At no time did Warden Scott contact the clinical service supervisor's officer to involve himself in the transfer assignment of inmate Hale.
The plaintiff does not dispute that if inmates are permitted to harass, annoy, show disrespect for, and intimidate officers, the safety and security of the prison is compromised. He does not dispute that inmates might be able to manipulate staff to their advantage and to conduct prohibited activities without intervention by the compromised staff.
Analysis
Discipline for Insolent Statement in Grievance
The trouble arises from the plaintiff's statement in his grievance that, "Rumor *732 goes according to inmates that have been on the unit since she came, [Officer Drone] is screwing a lot of the Officer's on the midnight shift along with a few Sergeants and Lt's, etc.,...." 20 Ill. Adm.Code 504, Table A, defines insolence as "talking, touching, gesturing, or other behavior which harasses, annoys or shows disrespect."
The plaintiff argues in his response that his grievance did not compromise any safety or security concerns and that he has a First Amendment right to grieve unprofessional and unethical conduct of employees. He asserts that he could have called a witness, a Chaplain Tockey, to corroborate the rumor's existence, but that his witness request was refused.[6] He further asserts that he has known inmates to use "all kinds of disrespectful names thru the griv. proc. and they were never disciplined for it," though he offers no evidence to support his assertion. [Plaintiffs Objections to the Defendant's Uncontested Facts, d/e 58, para. 17]. He also argues that he did not need to know if the rumor was true, since he clearly labeled it as a rumor in his grievance. He cites Illinois statute 730 ILCS 5/3-8-8(e) which states that "[discipline shall not be imposed because of use of the grievance procedure."
Defendant Wyles avers that he wrote the disciplinary ticket because he believed that the plaintiff intended to harass, annoy and show disrespect to Officer Drone. He further believed that the plaintiff intended to either intimidate Officer Drone into treating the plaintiff more favorably or to retaliate against her. Wyles avers that he issued the disciplinary ticket to prevent the plaintiff from attempting to compromise safety and security concerns and to prevent the plaintiff from manipulating Officer Drone's reassignment by "repeating baseless rumors in a communication to other correctional staff." [Wyles Aff. paras. 7-9].
"In the First Amendment context, ... a prison inmate retains those First Amendment rights that are not inconsistent with his status as a prisoner or with the legitimate penological objectives of the corrections system." Pell v. Procunier, 417 U.S. 817, 822, 94 S.Ct. 2800, 41 L.Ed.2d 495 (1974); see also Turner v. Safley, 482 U.S. 78, 95, 107 S.Ct. 2254, 96 L.Ed.2d 64 (1987). Restrictions on First Amendment rights are constitutional if they are " `reasonably related to legitimate penological interests.'" See Thornburgh v. Abbott, 490 U.S. 401, 412, 109 S.Ct. 1874, 104 L.Ed.2d 459 (1989), citing Turner v. Safley, 482 U.S. 78, 89, 107 S.Ct. 2254, 96 L.Ed.2d 64 (1987). Additionally, the plaintiffs statements were in a grievance, which means that the discipline not only affected his free speech rights, but also his right to petition the government for redress and right to access the courts. "Prisoners have a constitutional right of access to the courts that, by necessity, includes the right to pursue the administrative remedies that must be exhausted before a prisoner can seek relief in court." DeWalt v. Carter, 224 F.3d 607, 618 (7th Cir.2000); see also Walker v. Thompson, 288 F.3d 1005, 1009 (7th Cir.2002)(assuming on motion to dismiss that prison grievances may be protected by speech or petition clauses of the First Amendment and right to access the courts).
It is settled that prison officials may discipline inmates for insolent and disrespectful behavior, for obvious legitimate penological concerns of security and order. In Ustrak v. Fairman, 781 F.2d 573, 579 (7th Cir.1986), the Seventh Circuit upheld an inmate's punishment for violating a regulation forbidding, among other *733 things, disrespect or insolence. The inmate in Ustrak had written a letter describing prison officers as " `stupid lazy assholes'" and challenging them to " `bring their fat asses around the gallery at night.'" 781 F.2d at 580. The Seventh Circuit held that "[i]f inmates have some First Amendment rights, still they have only those rights that are consistent with prison discipline ... We can imagine few things more inimical to prison discipline than allowing prisoners to abuse guards and each other. The level of violence in American prisons makes it imperative that the authorities take effective steps to prevent provocation." Id. Other cases the court has found upholding discipline for insolent language involve similar epithets and "fighting words." See Leonard v. Nix, 55 F.3d 370, 375 (8th Cir.1995)(racial obscenities in outgoing letter: "They really got pissed off for me calling him [the warden] a N____. Ha. That's why I'm putting it in this letter so many times."... "Fthat Black B and all his Fing Merry Little Band."); In re Parmelee, 63 P.3d 800 (Wash.Ct.App.2003)(statements in written grievances calling officer "piss-ant officer," "asshole," "prick," and "shithead").
The court has found no Seventh Circuit case addressing whether prisoners can be punished for insolent statements in grievances, and the parties have offered none. The Ninth Circuit held in Bradley v. Hall, 64 F.3d 1276 (9th Cir.1995), citing Bounds v. Smith, 430 U.S. 817, 821, 97 S.Ct. 1491, 52 L.Ed.2d 72 (1977)(other citations omitted), that a prison regulation prohibiting disrespectful language, though facially valid, was unconstitutional as applied to a prison grievance because it unnecessarily burdened a prisoner's "fundamental right of access to the courts." The prisoner in Bradley was disciplined for using "disrespectful" language in a written grievance complaining about a prison employee's conduct when he wrote:
Her [the guard's] actions shows her misuse of her authority and her psychological disorder needs attention. Then you wonder why things happen like that guard getting beat down? I suggest you talk to this woman and have her act professionally instead of like a child.
Bradley, 64 F.3d at 1278. The Bradley court reasoned that the rule, though "rationally related to a legitimate interest," was an exaggerated response when balancing the "importance of the prisoner's infringed right against the importance of the penological interest served by the rule." 64 F.3d at 1280. However, the Supreme Court in Shaw v. Murphy, addressing a separate First Amendment issue, implicitly disapproved of Bradley's balancing act and affirmed that Turner is the test for First Amendment claims, without regard to the purpose of the communication. Shaw v. Murphy, 532 U.S. 223, 229 n. 2, 121 S.Ct. 1475, 149 L.Ed.2d 420 (2001). In any event, Bradley is not controlling in this Circuit, and this court declines to adopt Bradley's blanket rule that discipline "merely for using hostile, sexual, abusive or threatening language" in grievances is unconstitutional. Bradley, 64 F.3d at 1281 (emphasis supplied).
Cases involving discipline for false statements in grievances may also be instructive because the plaintiffs statements here became insolent only after the defendants determined the plaintiff had no evidence to support them. No doubt the rumor was scandalous, but the defendants do not argue that the plaintiff could not have reported Officer Drone's sexual misconduct if he had evidence that it was true. Sexual misconduct by a prison employee on the job would be a serious infraction and, the court presumes, an infraction reportable by inmates in a grievance. Like the insolence issue, the court has found no Seventh Circuit case discussing discipline for false accusations in a grievance, but a few *734 courts outside this Circuit have upheld such discipline, though their analyses and conclusions differ. See Hancock v. Thalacker, 933 F.Supp. 1449, 1490 (N.D.Iowa, 1996)(proof by preponderance of evidence that grievance statements knowingly false required to impose discipline); Curry v. Hall, 839 F.Supp. 1437, 1440 (D.Or. 1993)(no First Amendment right implicated by discipline for false statements in grievances; actual malice standard does not apply); see also Wolfel v. Bates, 707 F.2d 932, 934 (6th Cir.1983)(invalidating punishment for false statements in petition, but only on grounds that the officials had not found that statements false or maliciously communicated).
Following Ustrak's reasoning, the court sees no reason why the insolence regulation cannot be applied to statements in an inmate's grievance, just as it is to statements in an inmate's letters. Adopting the Ninth's Circuit's approach in Bradley would permit inmates to use the grievance procedure for the purpose of abusing guards. "... [T]he grievance procedure is for the purpose of bringing issues to the attention of the jail authorities, not a forum to make disparaging, degrading, abusive comments about correctional staff." In re Parmelee, 63 P.3d 800, 807. The court concludes that the insolence regulation may be constitutionally applied to inmates' statements in grievances, provided that application passes the Turner test established by the Supreme Court. That is, the application must be "reasonably related to legitimate penological interests." Turner v. Safley, 482 U.S. 78, 89, 107 S.Ct. 2254, 96 L.Ed.2d 64 (1987).
Here, the determination of whether the plaintiffs discipline passes that test turns in large part on whether the plaintiff had any basis for making the allegation. That question is easily resolved against him on the record. He does not seriously dispute that he had no evidence that defendant Drone was having sexual relations with other officers on her shift, and he admitted to defendant Wyles and the Adjustment Committee that the statements were "only" rumors. Construing the plaintiffs deposition liberally in his favor, he included the rumor merely because he thought it might be true and wanted to include everything bad he had seen and heard about Officer Drone. Yet he admitted that he did not personally see correctional Officer Drone being intimate with anyone. His speculation that the rumor might be true was based only on conversations he observed between Officer Drone and other inmates and officers (though he did not hear what was said and cannot remember anyone's name), and the fact she had been staffed on the unit (the "best housing unit in the whole joint") longer than the typical 90 day shift. [See Plaintiffs Dep. pp. 24-31 (where he discusses the reasons he put the rumor in the grievance). The court need not determine in general the quantum of evidence or scienter necessary for disciplining false accusations of sexual misconduct, since the defendants here had ample reason to conclude that the plaintiff knowingly made a scandalous accusation without any factual basis.
Applying the Turner test, the record compels the conclusion that the plaintiffs discipline was reasonably related to the prison's legitimate interest in preventing manipulation and harassment of its employees. The plaintiffs grievance spawned an investigation, holding Officer Drone up to ridicule and a complete loss of respect and authority as to both inmates and other officers. A correctional officer without authority is a threat to the security of the institution. Tolerating the plaintiffs statements, in light of the plaintiffs admissions to defendant Wyles that they were only rumors, could lead to a general breakdown of the authority and effectiveness of Officer *735 Drone and other officers facing bogus charges of sexual misconduct. It was reasonable for the defendants to sanction the plaintiff for making such a scandalous allegation in his grievance with no evidentiary support. The court could do the same under Fed.R.Civ.P. 11(b)(3), which requires allegations in pleadings (even a pro se pleadings) to "have evidentiary support, or, if specifically so identified, are likely to have evidentiary support" based on a reasonable inquiry by the pleader. Divane v. Krull Electric Co., 319 F.3d 307 (7th Cir.2003)(upholding district court's sanctions against party filing counterclaim without reasonable inquiry or evidentiary support); Fries v. Helsper, 146 F.3d 452, 458 (7th Cir.1998)(Rule ll's purpose " `is to deter baseless filings in the district court ...'")(quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990)). The court according concludes that the defendants did not violate the plaintiffs constitutional rights by disciplining him for statements in his grievances.
The plaintiff argues that his statements were not false or insolent because he labeled them as rumors, thus admitting up front he did not know if the rumors were true. The plaintiffs grievance belies this characterization. His statements, taken as a whole, clearly insinuate that the rumor was more than just a rumorthe plaintiff implied that Officer Drone manipulated her retention in the unit by having sexual relations with officers, and referred to the rumor for corroboration. The defendants understandably took the allegations seriously and launched an internal investigation. [Grievance Officer's Report dated 7/7/99, attached to Complaint: "The allegations/accusations Mr. Hale cites ... are quite serious in nature. The matter has already been referred to Internal Affairs for Investigation."]. In any event, as discussed above, the defendants had a legitimate penological reason for disciplining the plaintiff for putting the rumor in his grievance, even if he identified it as a rumor.
Even if the court found a constitutional violation, the defendants would be entitled to qualified immunity. Government officials performing discretionary functions are not liable unless they "violate clearly established statutory or constitutional rights then known to a reasonable officer." Saffell v. Crews, 183 F.3d 655, 658 (7th Cir.1999), citing Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). The analysis is a "fact-specific question which depends upon the clearly established law at the time." Hinnen v. Kelly, 992 F.2d 140, 1423 (7th Cir.1993). Saffell, 183 F.3d at 658; Jones v. City of Chicago, 856 F.2d 985, 994 (7th Cir.1988). If conduct is based on an objectively reasonable decision, qualified immunity does apply, even if that conduct is later determined to be wrong. Saffell 183 F.3d at 658. As already stated, the court found no binding precedent on point addressing discipline for false or insolent statements in grievances, and analogous cases apply different approaches and reach different results. A reasonable officer could have objectively believed that disciplining the plaintiff in this instance did not offend the constitution.
Retaliation for Exercising First Amendment Rights
Transfer to Medium Security Prison
The plaintiff does not dispute that Lincoln (a minimum security prison at the time) was transformed to an all-female prison, making his transfer inevitable. He argues instead that his transfer to Logan, a medium security prison, rather than to another minimum security prison, constituted the retaliation. Yet he does not dispute defendant Scott's averment that the majority of men were transferred to *736 Logan or Dixon, both medium security prisons. He does not offer any examples of similarly situated inmates who were transferred to a minimum security prison. Further, over two hundred inmates were transferred to Logan as part of the transformation. The plaintiff was transferred to Logan on September 20, 2000, and about 260 more inmates were transferred there a little over two weeks later. The plaintiff asserts that retaliation is obvious because he was transferred first, but no reasonable inference of retaliation arises from this fact. Additionally, the plaintiff does not point out any particular grievances or litigation that allegedly spurred the retaliatory transfer. He alludes generally to his grievance and litigation activities, but the grievances in the record go back to 1999, including his "insolent" grievance, well over a year before he was transferred. Further, the plaintiff provides no evidence to rebut the affidavit of Jeff Hamilton, who was involved in the process of transferring the inmates, and who avers that inmates were selected at random by the transfer coordinator's office, with the exception of factoring in an inmate's list of documented enemies. The transfer coordinator's officer communicated the assignments to Mr. Hamilton, who then initiated the paperwork and forwarded it for the proper signatures. [Hamilton Aff. para. 3-6]. The plaintiff counters that the warden's signature is required for every transfer, but that does not address Hamilton's assertion that the assignment was random. In sum, the plaintiff has failed to produce any competent evidence that would allow a reasonable juror to conclude that he was transferred in retaliation for his First Amendment activities. Summary judgment must therefore be granted to the defendants on this claim.
Defendant Wildman
The plaintiff alleges that defendant Wildman retaliated against the plaintiff for exercising his right of access to the courts by refusing him copies of necessary legal documents and/or otherwise hindering his use of the library. The defendants assert that the plaintiff has no evidence that retaliation was a substantial or motivating factor in defendant Wildman's alleged denial of photocopies, early library closing or other actions. They point to the plaintiffs statements in his depositions where the plaintiff admits that the denial of photocopies was only temporary and pursuant to what Wildman stated was a state-wide policy against providing photocopies of cases for inmates. [Plaintiffs Dep. 92]. The plaintiff further stated that he learned later that there was no such statewide policy, and that inmates were allowed such copies as long as they paid for them. Id. He also averred that defendant Wildman would not let him make copies when he had a negative trust balance, that once he was not permitted to use the typewriter, and the library was closed too often. [Plaintiffs Dep. p. 95].
The court agrees that the plaintiff has failed to offer any competent evidence that could permit a reasonable juror to infer defendant Wildman's actions were taken in retaliation for his grievance and litigation pursuits. He does not dispute the defendants' argument that she would have taken the same action regardless of the plaintiffs litigation and that the photocopying policy and library hours applied to all inmates, not just to the plaintiff. The plaintiff only repeats his conclusory allegations, which were sufficient to overcome a motion to dismiss, but not a motion for summary judgment. Summary judgment must therefore be granted to the defendants on this claim as well.
IT IS THEREFORE ORDERED:
1) The defendants' motion for summary judgment [d/e 53-1] is granted. Summary judgment is granted to the *737 defendants on all the plaintiff's claims. All pending motions are denied as moot, and this case is closed, with the parties to bear their own costs;
2) If the plaintiff wishes to appeal this dismissal, he may file a notice of appeal with this court within 30 days of the entry of judgment. Fed. R.App. P. 4(a)(4). A motion for leave to appeal in forma pauperis should set forth the issues the plaintiff plans to present on appeal. See Fed. R.App. P. 24(a)(1)(C). If the plaintiff does choose to appeal, he will be liable for the $105 appellate filing fee irrespective of the outcome of the appeal. Furthermore, if the appeal is found to be non-meritorious, the plaintiff may also accumulate a strike under 28 U.S.C.1915(g).
NOTES
[1] The court assumes the plaintiff means "fraternizing.
[2] There are two Adjustment Committee Reports attached to the complaint, one dated July 13, 1999 and one dated July 7, 1999.
[3] The plaintiff alleges in his complaint he was demoted to C grade for one month and B grade for one month. The difference is not relevant to the court's analysis.
[4] It is apparent from the affidavits that the defendants' date of October 7, 2002, is an error.
[5] The proposed fact states the inmates were transferred to Logan or Taylorville, but defendant Scott's affidavit states that they were transferred to Logan or Dixon. The plaintiff does not dispute either statement. The court accepts the statements of defendant Scott, which are made under oath.
[6] There is no affidavit or anything else from Chaplain Tockey in the record.
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88 F.Supp. 677 (1950)
TRUNCALE
v.
BLUMBERG et al.
United States District Court S. D. New York.
January 31, 1950.
Millard & Greene, New York City, for plaintiff. Milton Pollack, New York City, of counsel.
H. G. Pickering, New York City, Mudge, Stern, Williams & Tucker, New York City, for defendant Clifford Work. John Wallis and Robert E. Walsh, New York City, of counsel.
Phillips, Nizer, Benjamin & Krim, New York City (Louis Nizer and Daniel Glass, New York City, of counsel), for defendant William A. Scully.
Adolph Schimel, New York City (C. S. Landau, New York City, of counsel), for defendant Universal Pictures Co., Inc.
RIFKIND, District Judge.
In the following discussion I shall assume familiarity with the decisions of Judge Medina in Truncale v. Blumberg, D.C.S.D. N.Y. 1948, 80 F.Supp. 387, and D.C., 8 F.R.D. 492. See also Truncale v. Blumberg, D.C.S.D.N.Y. 1948, 83 F.Supp. 628. These narrate the background facts against which the specific issues are herein decided.
The action was brought by a stockholder suing under § 16(b) of the Securities Exchange *678 Act of 1934, 15 U.S.C.A. § 78p(b), in behalf of Universal Pictures Co., Inc., to recover shortswing profits realized by defendants from dealings in the corporation's securities.
On motion of plaintiff Judge Medina granted summary judgment and made an order as follows:
"Ordered, that summary judgment be entered accordingly adjudging that Universal Pictures Company, Inc. recover of defendants Cliff Work and William A. Scully such amounts, if any, as may be found to be due to it as damages, and it is further
"Ordered, that so much of this cause as relates to said defendants Cliff Work and William A. Scully be placed on the trial calendar for trial on the sole issue of damages."
The trial so ordered was had and developed no serious issues of fact. It crystallized an issue of law relating to the measure of damages. The facts relevant to that issue may be summarized thus: On March 4, 1941, each of the defendants Work and Scully entered into employment contracts with a corporation to serve in important executive capacities for a period of years. Simultaneously, the parent of the corporation agreed, in consideration of defendants' making the employment contracts, to issue to each of them, after each year of such employment, warrants entitling the holder to purchase 3,000 shares of stock of the parent corporation at $10 a share. Parent and subsidiary were subsequently merged and became Universal Pictures, Company, Inc., the beneficiary corporation named in this action. On December 12, 1945, each of these defendants received from that corporation, pursuant to the contract, warrants for 3,000 shares of its stock. Within six months preceding the date of receipt, each of the defendants had sold warrants for at least 3,000 shares. The total price received by Work was $73,053.90. The total price received by Scully was $47,635.
It is plaintiff's contention that the total price received was the profit realized and is, therefore, the measure of the damages recoverable against each defendant. It argues that profit is the excess of selling price over cost and that here cost was zero. It supports its view by calling attention to the fact that in their income tax returns each of these defendants, in reporting their capital gains, treated these warrants as having been acquired at no cost.[1]
Plaintiff's contention, superficially, seems to be supported by the language of the statute. The results it produces in this case are, however, so bizarre as to compel closer scrutiny. If plaintiff is right, it follows that throughout the term of employment defendants can never sell any warrants for their own benefit. Since the warrants were issued in annual installments, any sale by them, no matter when effected during the term of employment, would be within six months of the last previous receipt or of the next succeeding one. The whole of the sale price would be forfeited to the corporation. The contract here involved did not prohibit sales of the warrants by the defendants during the term of employment. This is, of course, irrelevant to the construction of the statute; but it does reveal its impact when damages are measured in accordance with the plaintiff's theory.
Warrants of the kind here under consideration become valuable only as the enterprise is successful. [When this contract was made the market price of the stock was below the price stated in the warrants.] The corporation issuing such warrants may believe that success may be wrung out of the marketplace by the extraordinary effort of its management, stimulated by a stock purchase warrant. Nothing in § 16(a) or § 16(b) suggests that Congress frowned upon the use of such a stimulant. But it is not so much the scope of the statute, as the rule of damages advocated by the plaintiff which would tend *679 to debase the value of stock purchase-warrants as a coin with which corporations might attract able personnel and stimulate their efforts.
The weak link in the plaintiff's argument, I believe, is the facile assumption that arithmetic is competent to describe the whole of a situation. True enough these defendants paid no dollars for the warrants they received; nevertheless, they did not receive them for nothing. They surrendered their previous employment; they bound themselves contractually to work for a corporation whose prospects at the time were far from promising; they surrendered their freedom of action. There is no ready means of converting these imponderables into dollars and cents.
The route to be followed in measuring damages in such a case has not been marked out by the authorities. However, Judge Clark has made a suggestion in his dissenting opinion in Shaw v. Dreyfus, 2 Cir., 172 F.2d 140, which may well be adopted here. That case was concerned with the profits realized on the sale of warrants, evidencing the right to subscribe for stock, issued by a corporation to all stockholders in proportion to their stockholdings. Judge Clark there said, 172 F.2d page 143: "Of course computation of the amount of profit may be slightly more difficult than in the cases of direct purchase and sale. But I cannot see that it presents any insuperable difficulties. It seems to me but the ordinary task of valuing the security at its fair market price at the crucial dates of its acquisition and disposition."
The effect of such a measurement is to treat the transaction as if, on December 12, 1945, the corporation had paid to defendants an amount of money sufficient to purchase such warrants and defendants had thereupon made the purchases. So to treat it seems to me to be sound practice. Clearly the value which the warrants then possessed was not the product of any short-term market activity engaged in by the defendants. It is profits realized from such short-term operations which the statute is designed to reach.
In the case at bar the market price of the warrants on December 12, 1945, the date of acquisition, was greater than the market price at the time of the earlier sales. No profits, within the meaning of § 16(b), have been realized and no damages are recoverable.
Findings of fact and conclusions of law accompany this opinion.
NOTES
[1] The argument from the income tax report is entitled to very little weight. The income tax law operates on a rationale and system of definitions all its own. They are nowise related to the purposes and definitions controlling § 16(b). Cf. Smolowe v. Delando Corporation, 2 Cir., 1943, 136 F.2d 231, 237-238, 148 A.L.R. 300.
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U NITED S TATES N AVY –M ARINE C ORPS
C OURT OF C RIMINAL A PPEALS
_________________________
No. 201700362
_________________________
UNITED STATES OF AMERICA
Appellee
v.
JERRY G. KNIGHT
Electronics Technician Nuclear Power Second Class (E-5), U.S. Navy
Appellant
_________________________
Appeal from the United States Navy-Marine Corps Trial Judiciary
Military Judge: Commander Stephen Reyes, USN.
Convening Authority: Commander, U.S. Naval Forces Japan,
Yokosuka, Japan
Staff Judge Advocate’s Recommendation : Lieutenant Commander B. R.
Orton, JAGC, USN.
For Appellant: Commander Richard E.N. Federico, JAGC, USN.
For Appellee: Brian K. Keller, Esq.
_________________________
Decided 23 March 2018
_________________________
Before M ARKS , J ONES , and G ERDING , Appellate Military Judges
_________________________
After careful consideration of the record, submitted without assignment of
error, we affirm the findings and sentence as approved by the convening
authority. Art. 66(c), Uniform Code of Military Justice, 10 U.S.C. § 866(c).
The supplemental court-martial order will reflect that the adjudged sentence
included 24 months of confinement and that all confinement in excess of 18
months is suspended for a period of 12 months from the date of the convening
authority’s action, at which time, unless sooner vacated, the suspended portion
will be remitted without further action. Additionally the supplemental court-
United States v. Knight, No. 201700362
martial order will reflect that the adjudged bad-conduct discharge, not a
dishonorable discharge, will be executed after final judgement.
For the Court
R.H. TROIDL
Clerk of Court
2
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466 F.2d 53
UNITED STATES of America, Appellant,v.Dominic FACHINI, Jr., Appellee.
No. 71-2096.
United States Court of Appeals,Sixth Circuit.
Aug. 11, 1972.
Mervyn Hamburg, Dept. of Justice, Criminal Div., Washington, D. C., Sidney M. Glazer, Dept. of Justice, Criminal Div., Washington, D. C., Ralph B. Guy, U.S. Atty., Detroit, Mich., Laurence Leff, Attorney in Charge Detroit Strike Force, U.S. Dept. of Justice, Haskell Shelton, Sp. Atty., Detroit, Mich., on brief, for appellant.
Peter Shumar, Liberson, Fink, Feiler, Crystal, Burdick & Schwartz, P.C., Detroit, Mich., Neil H. Fink, Detroit, Mich., on brief, for appellee.
Before PHILLIPS, Chief Judge, and McALLISTER and O'SULLIVAN, Senior Circuit Judges.
PHILLIPS, Chief Judge.
1
The United States appeals from an order granting a motion to suppress the use of five counterfeit Federal Reserve notes as evidence.
2
An indictment was filed March 4, 1969, charging Fachini with having knowingly possessed five counterfeit notes, in violation of 18 U.S.C. Sec. 472. The notes had been taken from the person of Fachini at the time he was arrested at his home pursuant to an arrest warrant issued by a District Court judge upon a complaint. On November 5, 1971, prior to Fachini's second trial,1 the District Court sustained a motion to suppress these counterfeit notes as evidence on the ground that the complaint was invalid. The Government, pursuant to 18 U.S.C. Sec. 3731, appealed to this court. We reverse.
3
The warrant for the arrest of Fachini was issued by District Judge Fred W. Kaess2 upon the basis of the following complaint:
4
"United States District Court for the Eastern District of Michigan, Southern Division
5
United States of America v. Dominic Henry Fachini
6
Complaint for Violation of U.S.C. Title 18 Section 1001
7
"Before the Honorable Fred W. Kaess, U.S. District Judge, Detroit, Michigan, The undersigned complainant being duly sworn states: That on or about October 16, 1967, at Detroit, Michigan, in the Eastern District of Michigan, Southern Division, Dominic Henry Fachini did in a matter within the jurisdiction of the United States Immigration and Naturalization Service make and use a false writing knowing the same to contain false, fictitious and fraudulent statements; in violation of Section 1001, Title 18, United States Code.
8
"And the complainant states that this complaint is based on the personal knowledge of the complainant Raymond J. Tallia, Special Agent, Federal Bureau of Investigation, and upon information supplied by Allen Wardowski, Notary Public, Macomb County, James Killeen, General Investigator, United States Immigration and Naturalization Service, and Julius Toth that Dominic Henry Fachini submitted to the United States Immigration and Naturalization Service a false, ficititious and fraudulent statement representing that he was employed by R.J. Engineering Company.
9
"And the complainant further states that he believes that Raymond J. Tallia, Allen Wardowski and Julius Toth are material witnesses in relation to this charge.
10
/s/ Raymond J. Tallia Raymond J. Tallia Special Agent, Federal Bureau of Investigation
11
"Sworn to before me, and subscribed in my presence, May 16, 1968.
12
/s/ Fred W. Kaess Fred W. Kaess United States Judge"
13
Before filing this complaint, FBI Agent Tallia, in the course of an investigation with Agent James Killeen of the Immigration and Naturalization Service, had learned that when Fachini had applied to bring his wife into the United States, he had furnished information to the Immigration and Naturalization Service that he was employed by the R. J. Engineering Company. Julius Toth, the owner of this firm, had told the FBI Agent that he had never employed Fachini and could not identify his photograph.
14
On May 17, 1968, Tallia and other FBI agents executed the arrest warrant and arrested Fachini at his home. Incident to the arrest they searched his person and found and seized the five ten dollar counterfeit notes.
15
Two questions are presented on this appeal:
16
(1) Was the complaint upon which the arrest warrant was based adequate to show probable cause? and
17
(2) If the complaint was insufficient, was the search of the person of Fachini and the seizure of the counterfeit notes valid as incident to a lawful arrest?I.
18
In his order suppressing the evidence, the District Court held that the complaint was insufficient under Giordenello v. United States, 357 U.S. 480, 78 S.Ct. 1245, 2 L.Ed.2d 1503 (1958), and Rule 4, Fed.R.Crim.P.
19
The complaint filed before Judge Kaess states that on October 16, 1967, Fachini made a false statement in a matter within the jurisdiction of the Immigration and Naturalization Service in violation of 18 U.S.C. Sec. 1001. This offense is punishable by a fine of not more than $10,000 or imprisonment of not more than five years or both.
20
The complaint states that it is based "on the personal knowledge of the complainant," an FBI agent, and upon information supplied by a named investigator of the Immigration and Naturalization Service and by Julius Toth, that Fachini had submitted a false statement to the Immigration and Naturalization Service representing that he was employed by R. J. Engineering Company.
21
In granting the motion to suppress, the District Court laid emphasis upon the fact that the complaint does not identify Julius Toth. Certainly the FBI agent would have been more prudent if he had identified Mr. Toth in the complaint as the owner of R.J. Engineering Company. Although the complaint does not so state, the record discloses that Mr. Toth was owner of this firm, which Fachini had claimed under oath to be his employer. The record is silent as to whether the identity of Mr. Toth was disclosed orally to Judge Kaess at the time the arrest warrant was issued. Even without the identification of Mr. Toth, we hold that the complaint was sufficient for Judge Kaess to conclude that there was "probable cause to believe that an offense has been committed and that the defendant has committed it." Rule 4, Fed.R.Crim.P. The complaint contained more than a mere conclusion that Fachini had committed a crime, which was the deficiency found by the Supreme Court in the complaint in Giordenello.
22
Mr. Justice Harlan, author of the majority opinion in Giordenello, also wrote the subsequent opinion in Jaben v. United States, 381 U.S. 214, 85 S.Ct. 1365, 14 L.Ed.2d 345 (1967). In this later case the Court sustained the sufficiency of a complaint, distinguishing and explaining Giordenello. Under the requirement of Jaben, Judge Kaess was required "to make a neutral judgment that resort to further criminal process is justified." The complaint had to be sufficient to "provide a foundation for that judgment." It had to provide the affiant's answer to the hypothetical question, "What makes you think that the defendant committed the offense charged?" It is not required that "every factual allegation which the affiant puts forth must be independently documented, or that each and every fact which contributed to his conclusion be spelled out in the complaint." The complaint simply had to be sufficient to enable Judge Kaess "to make the judgment that the charges are not capricious and are sufficiently supported to justify bringing into play the further steps of the criminal process." 381 U.S. at 224-225, 85 S.Ct. at 1371.
23
Based upon the information set forth in the complaint, Judge Kaess could have concluded that a reasonable reading of the affidavit showed that the facts were obtained by Government investigation, rather than tips from unnamed informants. Cf. United States v. Moore, 452 F.2d 569, 572 (6th Cir. 1971).
24
We therefore conclude that the complaint was sufficient under the standards of Giordenello and Jaben.
II.
25
After determining that the complaint was invalid, the District Court heard evidence on the question of whether the FBI agents had independent probable cause to arrest Fachini, notwithstanding the invalidity of the complaint. The District Court found, on the basis of uncontradicted testimony, that "probable cause did exist at the time of the arrest to believe that Fachini had committed a felony in violation of federal law." This conclusion is well supported by the testimony, which is made an appendix to this opinion.
26
The factual basis for a conclusion of probable cause supporting a warrantless arrest is at least as stringent as the standards applied for the issuance of an arrest warrant. Whiteley v. Warden, 401 U.S. 560, 566, 91 S.Ct. 1031, 28 L. Ed.2d 306 (1971). If this standard is met, a showing of probable cause that a felony has been committed has long been deemed sufficient to justify arrest, even if the arrest warrant is invalid. United States v. Wilson, 451 F.2d 209, 214 (5th Cir. 1971); United States ex rel. Gockley v. Myers, 450 F.2d 232, 234 (3rd Cir. 1971); Chrisman v. Field, 448 F.2d 175, 176 (9th Cir. 1971); Ferganchick v. United States, 374 F.2d 559, 560 (9th Cir. 1967), cert. denied, 387 U.S. 947, 87 S.Ct. 2085, 18 L.Ed.2d 1337.
27
After ruling that probable cause existed at the time of the arrest to believe that Fachini had committed a felony in violation of federal law, the District Court held that FBI agents were not authorized to arrest Fachini in his private residence without a valid warrant supported by a valid complaint, relying on language in Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971). That decision involved a search warrant issued by a State Attorney General. After holding the search warrant to be invalid, the court examined and rejected three alternate theories urged by New Hampshire to bring the facts of that case within one of the exceptions to the search warrant requirement. Applying a basic maxim for the interpretation of judicial opinions, we read the language of Coolidge, "in connection with the case in which those expressions are used." Cohens v. Virginia, 19 U.S. (6 Wheat) 264, 398, 5 L.Ed. 257.
28
In the present case, no search was made of the private residence of Fachini. The five counterfeit notes were found on his person as an incident to his arrest. We do not agree with the District Court that the incidental search of Fachini's person became invalid because he was arrested in his home rather than on the street. The only objects seized were from his person, and the same incidental search of his person would have occurred regardless of the site of the arrest. See United States v. Baratta, 397 F.2d 215, 222-223 (2d Cir. 1968), cert. denied, 393 U.S. 939, 89 S.Ct. 293, 21 L. Ed.2d 276; Hagans v. United States, 315 F.2d 67, 69 (5th Cir. 1963), cert. denied, 375 U.S. 826, 84 S.Ct. 68, 11 L.Ed.2d 58. Compare, United States v. Simpson, 453 F.2d 1028 (10th Cir. 1972).
29
It is to be emphasized that this is not a case where arresting officers undertook an arrest by illegal police action. The FBI agent sought out judicial process and was issued a warrant. Any error that may have occurred was in failing to state a sufficient factual basis upon which to issue the arrest warrant, i. e., the identity of Julius Toth. Nevertheless, the warrant was issued and signed by a federal judge.
30
We hold: (1) that the complaint and arrest warrant were valid; and (2) in any event the search of the person of Fachini was incident to a lawful arrest.
31
Reversed and remanded.
APPENDIX
Raymond J. Tallia
32
having been first duly sworn, was examined and testified on his oath as follows:
Direct Examination
By Mr. Shelton:
33
Q. State your name for the Court, please.
34
A. Raymond J. Tallia.
35
Q. What is your position or occupation, Mr. Tallia?
36
A. Special Agent, Federal Bureau of Investigation.
37
Q. How long have you been so employed?
38
A. Almost seven years.
39
Q. Where were you stationed on October 17, 1968?
40
A. October 17, 1968?
41
Q. Yes, sir.
42
A. Detroit, Michigan.
43
Q. Did you have occasion during this period to conduct an investigation involving a man named Dominic Fachini?
44
A. Yes, I did.
45
Q. In connection with what violation of the United States Statute were you conducting this investigation, sir?
46
A. In connection with false statements to the government, Section 1001, Title 18.
47
Q. Would you describe to the Court what your investigation consisted, sir?
48
A. It consisted of review of the Immigration and Naturalization Service records regarding Mr. Fachini; and in so doing with the assistance of the investigator James Killeen of INS, the uncovering of a statement made to the Immigration and Naturalization Service; application to bring Mr. Fachini's wife into the United States. In regard to this statement Mr. Fachini had to furnish certain information supporting the fact that he was employed, that he would be able to support a wife and certain other facts with regard to his background.
49
Q. Did you personally examine the statement, sir?
50
A. Yes, I did.
51
Q. Did it have a statement to the effect that he was employed?
52
A. Yes, it did.
53
Q. What did it relate to his employment?
54
A. It stated that he had been employed by R. J. Engineering Company, Detroit, Michigan.
55
Q. Did you subsequently make a check with the officials R. J. Engineering Company?
56
A. Yes, I did.
57
Q. Who did you interview?
58
A. I interviewed the owner, Mr. Julius Toth.
59
Q. What did Mr. Toth tell you, sir?
60
A. Mr. Toth stated that he had never employed Mr. Fachini; he had very few employees; that he had been in business for several years and neither at that time or previously had ever employed Mr. Fachini. He observed the photograph of Mr. Fachini, which I exhibited to him, and he stated emphatically that he did not know this man under any other name. I interviewed also the bookkeeper and payroll clerk of R. J. Engineering, and the results were the same.
61
Q. As a result of your investigation, sir, did you obtain authorization to proceed with the case and file a complaint?
62
A. Yes, I did.
63
Q. Before whom did you file the complaint, sir?
64
A. I filed it before the United States District Judge Fred Kaess.
65
Q. Calling your attention to May 17, 1968, I believe I confused you a minute ago on the date. As a result of filing your complaint did you obtain a warrant of arrest?
66
A. Yes.
67
Q. Did you make an arrest in this case?
68
A. Yes, I did.
69
Q. What date was the arrest, sir?
70
A. May 17, 1968.
71
Q. And the individual arrested was whom?
72
A. Dominic Fachini.
73
Q. Do you see Mr. Fachini in the courtroom today, sir?
74
A. Yes.
75
Q. Point him out and describe what he is wearing.
76
A. Seated at the counsel table in a green suit.
77
Mr. Shelton: May the record reflect that he has identified Dominic Fachini. Where did the arrest occur?
78
A. At his residence, East McNichols in Detroit.
79
Q. Describe what happened first in sequence of events upon your arrival at his residence?
80
A. I was accompanied by three other agents of the Federal Bureau of Investigation. And Agent Robertson and myself went to the front door and I asked Transeth and Cammarota to cover the back door. The door was open, ajar, and I knocked on the door and loudly announced that this is the FBI. A voice from inside said, "Okay. Come on in."
81
Q. What happened next, sir?
82
A. I then entered through the door, into the living room area, and Mr. Fachini was coming in to the living room at this time also.
83
Q. Did you announce to Mr. Fachini that he was under arrest?
84
A. I first identified myself, exhibited my credentials as an agent of the Federal Bureau of Investigation. I told Mr. Fachini that I had a warrant for his arrest.
85
Q. Was a search subsequently made of Mr. Fachini's person?
86
A. Yes, it was.
87
Q. Was any contraband obtained from his person?
88
A. Yes, there was.
89
Q. How long was it after you first entered that house when the search was conducted and the contraband received?
90
A. Several minutes thereafter.
91
Q. What was the contraband?
92
A. Consisted of counterfeit United States currency.
93
Q. How many?
94
A. Five ten dollar bills.
95
Mr. Shelton: Pass the witness.
96
Mr. Fink: No questions.
97
The Court: Well, I find that the agent had probable cause. He did sufficient investigation and the testimony and exhibit upon which he relied were credible. I believe there was probable cause.
1
The first trial was conducted before the late Theodore Levin, District Judge. Following a jury conviction and sentencing Judge Levin found error in his instructions to the jury and granted Fachini a new trial
2
Now Chief Judge of the Eastern District of Michigan
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711 N.W.2d 737 (2006)
474 Mich. 1086
Everett CASEY and Maryalice Casey, Plaintiffs-Appellants,
v.
AUTO OWNERS INSURANCE COMPANY, Homeowners Insurance Company, Asu Group, and Meredith Reschly, Defendants-Appellees.
Docket Nos. 130727 & (70)(71), COA No. 266576.
Supreme Court of Michigan.
March 22, 2006.
On order of the Court, the motion for immediate consideration is GRANTED. *738 The application for leave to appeal the March 1, 2006 order of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court. The motion for stay is DENIED as moot.
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30 Cal.App.3d 892 (1973)
106 Cal. Rptr. 700
Estate of EVELYNE F. COCHRAN, Deceased.
THELMA M. WISE, as Executrix, etc., Petitioner and Respondent,
v.
GARY J. GARIBALDI et al., Claimants and Appellants
KAREN MILES et al., Claimants and Respondents.
Docket No. 11343.
Court of Appeals of California, Fourth District, Division One.
February 27, 1973.
*894 COUNSEL
Ronald H. Prenner, Garibaldi & Lane, Warren J. Lane and Abe Mutchnik for Claimants and Appellants.
Irsfeld, Irsfeld & Younger and James B. Irsfeld, Jr., for Petitioner and Respondent and for Claimants and Respondents.
OPINION
COUGHLIN, J.[*]
This is an appeal from an order settling a first account current of the executrix of the will of Evelyne F. Cochran; fixing the source of payments of certain state inheritance and federal estate taxes, of debts of the decedent and the estate, of executrix's and attorney's fees, and of the expenses of administration; and decreeing abatement of the "legacies" of nonkindred testamentary beneficiaries in the event the "residue of the estate" is insufficient to make such payments.
Appellants are nonrelative beneficiaries under the will. Respondent, Karen Niles, referred to hereinafter as respondent, is a relative beneficiary. Thelma Wise is executrix. She makes no appearance on the appeal.
The will bequeaths specific personal property to an aunt of decedent and sums of money to three friends; bequeaths an interest in real property in trust for respondent and her issue; devises and bequeaths real and personal property to respondent directly; bequeaths real property in trust for appellant Donna Hoch, a friend; bequeaths real property in trust for appellant Gary Garibaldi, a friend; and devises and bequeaths "the rest residue and remainder" of the estate to another friend.[1] The will also provides all inheritance and estate taxes shall be paid out of the residue of the estate and shall not be chargeable against any legatee or devisee or beneficiary thereunder, except the taxes chargeable against respondent shall be paid by her and not out of the residue.
The court found and decreed "all legacies set forth in the will of the decedent" to appellants and respondent are "specific legacies," and further decreed, in substance, the "residue of the estate" shall be used first to pay federal estate and inheritance taxes chargeable to the beneficiaries under the *895 will, other than respondent; in the event the residue of the estate is insufficient to pay all of the taxes, the balance thereof shall be paid by the affected beneficiaries pursuant to Probate Code section 970 et seq.; after payment of taxes the balance of the residue of the estate, if any, shall be used to pay the "funeral expenses, debts, and costs of administration"; and in the event the residue is insufficient to make all the latter payments the additional funds needed to do so shall be obtained by abatement of "legacies" in the following order: (1) General "legacies" i.e., the bequests of money; (2) specific "legacies" to nonkindred of the decedent; and (3) specific "legacies" to kindred.
The executrix, by her account, asserts the residue of the estate on hand is not sufficient to pay the taxes, claims, debts, fees and expenses of administration remaining unpaid at the time she filed her account; further asserts an additional $235,820 cash is needed for this purpose; and sets up a schedule of abatement of "legacies" to effect payment in full of these items. It appears the total residue of the estate for which the executrix accounts is sufficient to pay all of the debts, fees and expenses of administration, but is not sufficient to pay these items and the estate and inheritance taxes payable therefrom under the terms of the will.
Concededly, the order directing the executrix first to pay the taxes from the residue, and thereafter to pay the debts, fees and expenses of administration, requires an abatement of devises and bequests under the will; the provisions of the order directing abatement first of testamentary dispositions to nonkindred, and then to kindred, results in a total abatement of "bequests" of real property to appellants; but there would be no such total abatement if the debts, fees and expenses of administration were paid first from the residue, the federal estate taxes were "prorated among the persons interested in the estate" as devisees and legatees pursuant to Probate Code sections 970, 971, 976, and appellants paid the state inheritance taxes for which they are liable under Revenue and Taxation Code sections 14101 and 14121.
(1) Federal estate and state inheritance taxes are obligations of the devisees and legatees named in a will unless the "testator otherwise directs in his will" (Prob. Code, § 970; Estate of Armstrong, 56 Cal.2d 796, 800 [17 Cal. Rptr. 138, 366 P.2d 490]; Estate of Hendricks, 11 Cal. App.3d 204, 206-208 [89 Cal. Rptr. 748]; Estate of Nesbitt, 158 Cal. App.2d 630, 631 [323 P.2d 474]; Estate of Cushing, 113 Cal. App.2d 319, 323 [248 P.2d 482]; see also Cohn v. Cohn, 20 Cal.2d 65, 68 [123 P.2d 833]); and, in any event, are not debts or expenses of administration of the estate (Cohn v. Cohn, supra, 20 Cal.2d 65, 68; Estate of Nesbitt, supra, 158 Cal. App.2d 630, 631).
*896 (2a) Appellants contend the residue of the estate should be charged first with payment of debts, fees and expenses of administration, and then with payment of the taxes directed by the will. Respondent contends the taxes should be paid first. The real issue is not the order of payment of these items from the residue, but rather, what part of the estate constitutes the "residue" from which the testator directed the payment of taxes. The issue is one of interpretation of the will. Paragraph I thereof states: "I direct my Executrix to pay all my just debts and funeral expenses as soon as convenient after my death. I direct that all estate and inheritance taxes payable by reason of my decease ... shall be paid out of the residue of my estate, and shall not be charged against or collected from any legatee, devisee, or beneficiary hereunder ... except all estate and inheritance taxes payable by reason of my decease (without limitation to taxes attributable to property passing under this Will, or any other limitation) to my niece, KAREN NILES, shall not be paid out of the residue of my estate but shall be deducted from the bequest or bequests under this Will to my niece, KAREN NILES." [Italics ours.] Paragraphs III through XI are devises and bequests of money or property, including those to appellants and respondent. Paragraph XII is a devise and bequest of the "rest, residue and remainder of my estate" to a named beneficiary.
We conclude the direction by the testatrix to pay the designated estate and inheritance taxes "out of the residue of my estate" is a direction to pay such out of that part of her estate remaining after satisfaction of the devises and bequests made in her will and payment of the debts, fees and expenses of administration of her estate.
(3) The purpose of interpreting a will is to ascertain the intention of the testator as expressed therein, and to give effect to that intention (Estate of Armstrong, supra, 56 Cal.2d 796, 803; Estate of Lawrence, 17 Cal.2d 1, 6 [108 P.2d 893]; Estate of Keller, 134 Cal. App.2d 232, 236, 239 [286 P.2d 889]; Estate of Moorehouse, 64 Cal. App.2d 210, 215-216 [148 P.2d 385]).
(4) Ordinarily the phrase "residue of my estate," as used in a will, refers to that part of the estate remaining after satisfaction of the devises and bequests in the will and the payment of debts, fees and expenses of administration (McDougald v. Low, 164 Cal. 107, 110 [127 P. 1027]; Estate of Keller, supra, 134 Cal. App.2d 232, 240-241; Estate of Moorehouse, supra, 64 Cal. App.2d 210, 214; see also Estate of Lawrence, supra, 17 Cal.2d 1, 8).
In Paragraph I of the will the testatrix first directed her executrix to pay all her "just debts and funeral expenses," and then directed payment of the designated taxes out of the residue of her estate. The arrangement of these *897 provisions is a factor indicating the testatrix intended her debts first should be paid and then the taxes (Estate of Keller, supra, 134 Cal. App.2d 232, 236-237).
Respondent's contention the taxes should be paid first, and then the debts of the estate, is premised on an interpretation of the will which would defeat the basic intent of the testatrix to devise designated property to appellants. For the apparent purpose of enabling her devisees to receive the property devised them without depletion, the testatrix directed the estate and inheritance taxes chargeable to them as devisees should be paid from the residue of her estate. Certainly, she did not intend this provision to effect an abatement of these devises. (5) An interpretation of a will which defeats a basic intention of the testator will be rejected, unless there is no alternative. (Estate of Armstrong, supra, 56 Cal.2d 796, 803-804.) (2b) Assuming the phrase "residue of my estate" as used in the will at bench might be interpreted to mean the remainder of my estate after satisfaction of the devises and bequests therein but before payment of debts, fees and expenses of administration, it also might be interpreted to mean the balance of my estate after satisfaction of the devises and bequests therein and payment of debts, fees and expenses of administration. The former interpretation would defeat the basic intention of the testatrix; the latter would not; the former should be rejected; and the latter should be accepted.
If, as appears from the record, the residue of the estate, after payment of debts, fees and commissions, is not sufficient to pay the estate and inheritance taxes as directed by the will, the direction is ineffective to the extent the residue is not sufficient to permit compliance; the devises to appellants remain intact; but appellants are subject to the tax burdens imposed by statute as though the tax payment direction in Paragraph I never existed (Estate of Nesbitt, supra, 158 Cal. App.2d 630, 633).
In light of the foregoing conclusion we need not consider other contentions of the parties, the ambiguous nature of the order appealed from or its effect.[2] However, as the erroneous concept of the meaning of the phrase *898 "residue of my estate," as used in the will, upon which the order is predicated also permeates the account of the executrix, the order should be reversed in its entirety.
The order is reversed.
Whelan, Acting P.J., and Ault, J., concurred.
A petition for a rehearing was denied March 14, 1973, and the petition of claimant and respondent Miles for a hearing by the Supreme Court was denied April 25, 1973.
NOTES
[*] Retired Associate Justice of the Court of Appeal sitting under assignment by the Chairman of the Judicial Council.
[1] The will uses the term "bequeath" to express testamentary disposition of real property as well as personal property. The language used in summarizing the provisions of the will conforms to the language used in the will.
[2] Paragraphs VI and IX of the will give and bequeath real property in trust for appellants Donna Hoch and Gary Garibaldi. The order decrees the "legacies" in Paragraphs VI and IX are "specific legacies." The term "devise" means "a testamentary disposition of land" whereas the term "legacy" or "bequest" means "a like disposition of personalty" (Estate of Ross, 140 Cal. 282, 290 [73 P. 976]). A testator may use the words devise and bequeath erroneously, intending the terms merely to mean a testamentary purpose to dispose of property; and, for this reason, as in the case at bench, use of the word "bequeath" to express an intention to make a testamentary disposition of real property in effect is a devise (Estate of Ryan, 21 Cal.2d 498, 511 [133 P.2d 626]). On the other hand when a court or the Legislature uses these terms, adherence to the distinction between them is a significant prerequisite to clarity (gen. see Estate of Ryan, supra, 21 Cal.2d 498, 511-513; Estate of Ross, supra, 140 Cal. 282, 289, 290).
The trial court in the case at bench did not find or decree the testamentary disposition of real property in Paragraphs VI and IX of the will were "legacies"; instead, it found and decreed merely the "legacies" in these paragraphs were "specific legacies." [Italics ours.] In fact there were no "legacies" in those paragraphs.
The distinction between devises and legacies is significant in this case because Probate Code section 752 provides: "[L]egacies ... to kindred shall abate only after abatement of legacies to persons not related to the testator." [Italics ours.] However, there is an indication the Legislature intended section 752 should govern devises of real property as well as bequests of personal property, i.e., legacies, when the cause of abatement is the satisfaction of "debts or expenses or family allowance" as provided in Probate Code section 753 (Estate of Stevens, 27 Cal.2d 108, 118-121 [162 P.2d 918]).
However, as noted, the effect of the foregoing ambiguities on the merits of this case are nonexistent at this stage in light of our conclusion respecting the meaning of the phrase "residue of my estate" as used by the testatrix in Paragraph I of her will.
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952 F.2d 1393
Palumbo (Jerry)v.Haney (Arthur), English (Thomas), Young (Theodore), Councilof Old Bridge Township, Leo (Joseph)
NO. 91-5439
United States Court of Appeals,Third Circuit.
Dec 17, 1991
Appeal From: D.N.J.,
Barry, J.
1
AFFIRMED.
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 16, 2008
No. 07-60993
Summary Calendar Charles R. Fulbruge III
Clerk
SUPERIOR BOAT WORKS, INC.; MISSISSIPPI INSURANCE GUARANTY
ASSOCIATION,
Petitioners,
v.
TROY CREMEEN; DIRECTOR, OFFICE OF WORKER’S COMPENSATION
PROGRAMS, U.S. DEPARTMENT OF LABOR,
Respondents.
On Petition for Review from the Benefits Board
United States Department of Labor
Case Nos. 07-0349 and 07-0349A
Before STEWART, OWEN, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
Petitioners Superior Boat Works, Inc. (Superior) and Mississippi
Insurance Guaranty Association appeal the decision and order of the Benefits
Review Board (Board) awarding benefits on a claim filed pursuant to the
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 07-60993
Longshore and Harbor Workers’ Compensation Act (LHWCA).1 Because the
Administrative Law Judge’s (ALJ) final decision was not supported by
substantial evidence, we reverse and render judgment.
I
On August 3, 1998, Troy Cremeen fell three feet from a raised catwalk and
struck his right shin while working for Superior at its Harbor Front industrial
field facility. He later drove himself to Family Medical Center (FMC) where Dr.
Dishongh dressed the wound, gave Cremeen a pair of crutches, and prescribed
Lorcet, a painkiller, for two days. Cremeen did not tell anyone at FMC or at
Superior that he had hurt his back on that day.
Cremeen had previously injured his back in an automobile accident on
June 28, 1997. In connection with this accident, Cremeen saw Dr. Daniel Dare,
an orthopedic surgeon in Vicksburg, Mississippi, on March 31, 1998, and
complained of back pain radiating down his right leg. An MRI on April 4, 1998,
showed mild central disc protrusions at the L4-5 and L5-S1 vertebrae. Cremeen
continued to complain of pain during visits to Dr. Dare on April 14, 1998, and
May 19, 1998. In a letter dated June 11, 1998, Dr. Dare explained that Cremeen
had a five percent permanent partial disability to the body as a whole as a result
of his back injury.
Cremeen testified that he first reported back pain allegedly related to the
accident at Superior on September 11, 1998, when he had exhausted the pain
medications given by Dr. Dare. Cremeen continued to complain of back pain
through sporadic clinic and emergency room visits. On December 8, 1998,
Cremeen visited Delta Health Center and stated that he hurt his back in a fall
at work but had been having back problems from a prior car accident. On
December 27, 2001, Cremeen reported to the Jackson, Mississippi University
1
33 U.S.C. § 901.
2
No. 07-60993
Hospitals and Clinics (University Hospitals) Emergency Department that his
back pain began “4 years ago” (the year the car accident occurred) and that “[t]he
symptoms have been constant over this time.” Cremeen did not tell anyone at
University Hospitals that his back injury was caused by a work-related accident.
MRIs conducted on March 2, 1999, November 13, 2001, and November 30, 2002,
each showed bulging discs at L4-5 and L5-S1, unchanged from his April 4, 1998,
MRI.
On February 24, 2003, Cremeen first saw Dr. Rahul Vohra. After several
sessions over the next year, in April 2004, Dr. Vohra suggested for the first time
that Cremeen’s pain was caused by a problem with his sacroiliac (SI) joints,
rather than his back.
Cremeen did not file a workers’ compensation claim with Superior. Missy
Laws, administrative assistant for Superior and Cremeen’s sister, explained in
a letter dated September 14, 1998 that Cremeen told her that he did not want
to file a worker’s compensation claim because his work injury was caused by a
previous back injury related to an automobile accident. The letter also noted
that on August 31, 1998, Cremeen told his sister that he was taking pain
medication for his back and was unable to work.
In 2004, Cremeen sought total disability compensation and medical
benefits based on his injury at Superior in August 1998. The ALJ found that
Cremeen established a prima facie case of an “injury” within the meaning of the
LHWCA and thus was entitled to a presumption under 33 U.S.C. § 920.
However, the ALJ also found that Superior had introduced evidence sufficient
to rebut the § 920 presumption that Cremeen’s alleged back injury arose out of
or in the course of his employment with Superior. Specifically, the ALJ found
that Superior had produced substantial evidence showing that Cremeen had a
pre-existing back injury of a permanent nature and that his MRIs after the
work-related accident showed no worsening of the back condition. “Given the
3
No. 07-60993
absence of any expert medical opinion regarding causation, the Court can only
rely upon the objective medical records that showed no changes in the MRI’s [sic]
to conclude that [Cremeen’s] back condition was caused solely by the car
accident. Therefore, the Court finds the objective medical records sufficient to
favor a finding that [Cremeen’s] fall at work did not worsen his pre-existing back
condition.”
Because Superior had rebutted the § 920 presumption, the ALJ then
examined the evidence as a whole to determine causation.2 The court found that
the record lacked any medical evidence substantiating Cremeen’s claim that his
back condition was causally related to his fall at Superior. Instead, the ALJ
found that the medical reports showed that Cremeen’s back injury was solely the
result of the prior car accident. Further, the ALJ found Cremeen’s testimony
that his pain worsened after the fall to be self-serving, inconclusive, and
unreliable and that Cremeen lacked the frame of reference to determine whether
his back pain increased because, at the time of the work injury, he was already
taking pain medication due to the car accident.
The ALJ also did not give weight to Cremeen’s argument that the fall
caused the SI joint disease diagnosed by Dr. Vohra. The court noted that
Cremeen’s medical history pertaining to the car accident was “glaringly absent
from Dr. Vohra’s notes, while [Cremeen’s] complete medical history beginning
with the work injury [was] included.” The ALJ also explained that “Dr. Vohra’s
notation clearly does not amount to a medical opinion regarding causation of the
SI joint tenderness,” and “even had [Dr. Vohra] rendered an opinion, it would be
discredited on the basis of an incomplete medical history.”
2
Port Cooper/T. Smith Stevedoring Co., Inc. v. Hunter, 227 F.3d 285, 288 (5th Cir.
2000) (stating that if the employer rebuts the presumption, then the issue of causation must
be decided by looking at all of the evidence in the record).
4
No. 07-60993
Following the ALJ’s initial decision denying benefits, Cremeen filed a
notice of appeal and forwarded additional evidence to the Board. The Board
construed this submission as a request for modification and remanded the case
to the ALJ for consideration of the additional evidence.3 The ALJ affirmed its
prior decision, determining that a modification was not warranted and again
concluded that there was no evidence linking Cremeen’s SI joint tenderness to
the work accident.
The Board affirmed the ALJ’s finding that Cremeen’s current back
condition was not caused by his fall at work but concluded that “[s]ince
claimant’s work injury was to the same body part as that injured in the 1997 car
accident, the aggravation rule[4] is at issue.” Even though the ALJ found that
the objective medical records were sufficient to favor a finding that Cremeen’s
“fall at work did not worsen his pre-existing back condition,” the Board held that
the ALJ had not explicitly determined whether Superior had produced
substantial evidence that the work accident did not aggravate Cremeen’s
pre-existing condition. And despite the ALJ’s finding that there was no link
between the work-related accident and Cremeen’s alleged SI joint disease, the
Board also explained that the MRI evidence could not be used in this
determination “in light of the evidence that the work injury involves a different
condition [SI joint disease].” The Board stated that it would affirm the ALJ’s
decision in the event that he finds the presumption was rebutted because “the
3
See 33 U.S.C. § 922 (“Upon his own initiative, or upon the application of any party in
interest . . . on the ground of a change in conditions or because of a mistake in a determination
of fact by the deputy commissioner, the deputy commissioner may . . . review a compensation
case . . . and . . . issue a new compensation order which may terminate, continue, reinstate,
increase, or decrease such compensation, or award compensation.”); O’Keeffe v. Aerojet-Gen.
Shipyards, Inc., 404 U.S. 254, 255 (1971).
4
See Strachan Shipping Co. v. Nash, 782 F.2d 513, 517 (5th Cir.1986) (en banc) (stating
that when “an employment injury worsens or combines with a preexisting impairment to
produce a disability greater than that which would have resulted from the employment injury
alone, the entire resulting disability is compensable”).
5
No. 07-60993
evidence in toto weighed heavily in favor of Superior and the denial of benefits.”
On remand, the ALJ found that Superior failed to rebut the presumption
because it presented “no evidence” that the work accident did not aggravate
Cremeen’s SI joint disease. Recounting the Board’s holding that the production
of the MRIs before and after the accident was not determinative, the ALJ
explained that he was “forced” to find that Superior had not presented
substantial evidence to prove that Cremeen’s pre-existing back condition and
pain were not aggravated by the fall at work. Accordingly, the ALJ found that
Cremeen was entitled to temporary total disability compensation for the period
of August 3 to August 29, 1998, as well as the reasonable and necessary past and
future medical expenses arising out of his back injury.
Superior appealed to the Board, contending that it rebutted the § 920(a)
presumption by providing MRIs taken before and after the work accident, which
showed no change in Cremeen’s physical condition, and Cremeen’s failure to
complain of any back pain until several weeks after the incident. The Board
held that “[t]his circumstantial and lay evidence, however, is insufficient to
rebut the Section [9]20(a) presumption in this case” reiterating that “the
existence of comparable MRIs before and after the injury is not determinative
of whether the work accident aggravated Cremeen’s condition, in view of the
different diagnoses, i. e., sacroiliac joint disease following the injury and
discogenic pain prior.” The Board further concluded that the MRIs did not
address whether the accident caused Cremeen’s condition to become
symptomatic. Finally, the Board concluded that Cremeen’s failure to complain
was not substantial evidence, in light of the fact that Cremeen continued to take
pain medication for his previous injury until one month after the fall.
6
No. 07-60993
II
7
No. 07-60993
The LHWCA requires the Board to accept the findings of the ALJ “if
supported by substantial evidence in the record considered as a whole.”5 In
reviewing the ALJ’s decision, the Board “may not substitute its judgment for
that of the ALJ or engage in a de novo review of the evidence”, but instead must
“accept the findings of the ALJ if they are rational and supported by substantial
evidence in the record considered as a whole.”6 Therefore, we review decisions
of the Board to determine whether it “correctly concluded that the
Administrative Law Judge’s order was supported by substantial evidence on the
record as a whole and is in accordance with law.”7 “‘[W]e may not substitute
[our] judgment for that of the ALJ, nor may we reweigh or reappraise the
evidence, instead we inquire whether there was evidence supporting the ALJ’s
factual findings.’”8
A
Section 920 of the LHWCA states, “it shall be presumed, in the absence of
substantial evidence to the contrary . . . (a) That the claim comes within the
provisions” of the Act.9 “[I]nherent in this provision is the presumption that an
injury is causally related to a worker’s employment.”10 “To invoke the
section 920(a) presumption, a claimant must prove (1) that []he suffered a harm
5
33 U.S.C. § 921(b)(3).
6
Gulf Best Elec., Inc. v. Methe, 396 F.3d 601, 603 (5th Cir. 2004) (citing Ceres Marine
Terminal v. Dir., Office of Worker’s Comp. Programs, 118 F.3d 387, 389 (5th Cir. 1997)).
7
Conoco, Inc. v. Dir., Office of Worker’s Comp. Programs, 194 F.3d 684, 687 (5th Cir.
1999) (quoting Ingalls Shipbuilding, Inc. v. Dir., Office of Worker’s Comp. Programs, 991 F.2d
163, 165 (5th Cir. 1993)).
8
Port Cooper/T. Smith Stevedoring Co., Inc. v. Hunter, 227 F.3d 285, 287 (5th Cir.
2000) (alterations in original) (quoting Boland Marine & Mfg. Co. v. Rihner, 41 F.3d 997, 1002
(5th Cir. 1995)).
9
33 U.S.C. § 920.
10
Hunter, 227 F.3d at 287.
8
No. 07-60993
and (2) that conditions existed at work, or an accident occurred at work, that
could have caused, aggravated or accelerated the condition.”11 The ALJ
determined that Cremeen established a prima facie case of an “injury” within
the meaning of the LHWCA and, accordingly, applied the § 920(a) presumption.
Superior now claims that Cremeen did not establish a prima facie case
entitling him to the § 920(a) presumption. The ALJ found, based on the medical
records, that Cremeen suffers from a back condition. The ALJ also found that
Cremeen’s three-foot fall from a catwalk to a dry dock at Superior could have
caused Cremeen’s back condition. We agree with the Board that the ALJ’s
decision is supported by substantial evidence. Moreover, Superior did not
challenge the ALJ’s decision before the Board and, thus, has waived this issue
on appeal.12
B
Once the claimant establishes a prima facie case entitling him to the
§ 920(a) presumption, the burden shifts to the employer to rebut the
presumption through facts that the harm was not work-related.13 “[T]he
evidentiary standard for rebutting the § [9]20(a) presumption is the minimal
requirement that an employer submit only ‘substantial evidence to the
contrary.’”14 “The language does not require a ‘ruling out’ standard; indeed, the
hurdle is far lower.”15 An employer need only produce “more than a modicum
11
Conoco, 194 F.3d at 687.
12
See McIntosh v. Partridge, 540 F.3d 315, 325 (5th Cir. 2008).
13
Conoco, 194 F.3d at 687-88; see 33 U.S.C. § 920 (presumption can be rebutted by
“substantial evidence to the contrary”).
14
Ortco Contractors, Inc. v. Charpentier, 332 F.3d 283, 289 (5th Cir. 2003) (emphasis
in original).
15
Conoco, 194 F.3d at 690.
9
No. 07-60993
but less than a preponderance” of evidence that the injury was not work-
related.16
After reviewing the record, we conclude that Superior produced
substantial evidence to rebut the presumption that the work-related injury
aggravated Cremeen’s pre-existing back condition. As the ALJ noted in its
initial decision, Superior provided evidence that Cremeen had been taking
medication for severe back pain before and after the work incident. Additionally,
the University Hospitals Emergency Room notes reported that Cremeen’s back
pain began before the work-related injury and had “been constant over th[at]
time.” Superior also produced evidence that Cremeen’s MRIs after the work-
related accident showed no worsening of his back condition. Superior’s
production of the comparable MRIs and medical records exhibiting constant back
pain and use of pain medication since the automobile accident is substantial
evidence to rebut the presumption that the work-related injury aggravated
Cremeen’s previous back injury.
The ALJ’s initial decision to rely on the MRIs was “rational and supported
by substantial evidence in the record.”17 The ALJ relied on the MRIs due to “the
absence of any expert medical opinion regarding causation” and concluded from
the MRIs that “[Cremeen’s] fall at work did not worsen his pre-existing back
condition.” The Board erred in determining that the use of comparable MRIs
was not proper “in light of the different diagnoses,” because the ALJ had
concluded that there was no link between the second diagnosis, SI joint disease,
and the work injury. The Board also disapproved of the ALJ’s use of the MRIs
because “the MRIs do not address whether the accident caused claimant’s
condition to become symptomatic, irrespective of the lack of worsening in the
16
Ortco, 332 F.3d at 290.
17
Gulf Best Elec., Inc. v. Methe, 396 F.3d 601, 603 (5th Cir. 2004) (citing Ceres Marine
Terminal v. Dir., Office of Worker’s Comp. Programs, 118 F.3d 387, 389 (5th Cir. 1997)).
10
No. 07-60993
underlying condition.” But, along with the MRIs, Superior produced medical
records noting that Cremeen’s back pain and use of pain medications had
remained constant since the auto accident. Further, the ALJ explicitly found
Cremeen’s testimony of increased pain, the only evidence that Cremeen’s
condition had become symptomatic, to be “self-serving and unreliable.” The ALJ
concluded that the fact that Cremeen continued to take pain medication for his
previous injury until one month after the fall “evidences that [Cremeen] lacked
the frame of reference necessary to determine how his back pain changed after
the fall, thereby detracting from the reliability of his testimony that his back
pain increased.”
The ALJ’s final decision, holding that Superior did not rebut the § 920(a)
presumption, was not supported by substantial evidence. Therefore, we must
reverse. Moreover, because the Board stated that it would affirm the ALJ’s
previous decision denying benefits in the event that Superior rebutted the
§ 920(a) presumption, we render judgment denying benefits.
REVERSED and RENDERED.
11
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483 S.W.2d 790 (1972)
In the Interest of C. S., a child, E. S., Mother of C. S., Appellant,
v.
Ralph L. SMITH, Juvenile Officer, St. Louis County, Respondent.
No. 34316.
Missouri Court of Appeals, St. Louis District, Division Two.
July 25, 1972.
*791 Harold E. Scheppner, Jr., David A. Lander, Clayton, for appellant.
Corinne Goodman, Legal Advisor, Miriam Bricker, Clayton, for respondent.
DOWD, Presiding Judge.
The Juvenile Court of the Circuit Court of St. Louis County entered a judgment terminating the parental rights of both parents to a minor child. The natural mother appeals.
On March 30, 1971, the Juvenile Officer of St. Louis County Juvenile Court filed a petition in the Juvenile Court to terminate the rights of the parents to C.S. on the grounds "[T]hat the said parents of said minor child, have since on or about March 26, 1970 have abandoned the child and/or have willfully, substantially and continuously or repeatedly neglected the child and refused to give the child necessary care and protection." Summons was duly served on both parents.
Trial was had on June 2, 1971. The evidence of the Juvenile Officer consisted of the testimony of Miss Suzanne Douglass, a social worker with Family Services. Miss Douglass was the case worker assigned to the case. She testified that she was not aware of any contacts between the parents and the child during the period March 30, 1970 to March 31, 1971. On September 8, 1970, the rights of the parents to two of their other children, M.S., and T.S., were terminated. On September 9, 1970, Miss Douglass received a call from Mrs. S. who said she wanted to visit all five of her children. Miss Douglass explained that Mrs. S.'s rights to M.S. and T.S. had been terminated the previous day, whereupon Mrs. S. became "very upset" and hung up.
Miss Douglass further testified that on May 18, 1970, there was a court hearing in reference to Mrs. S.'s oldest daughter. At that time Mr. S. was asked to support C.S. in foster care. However, no support was ever given. C.S. has been supported exclusively by St. Louis County. Miss Douglass *792 visited Mr. and Mrs. S. on April 18, 1970, and there were two court hearings around that time, at which the mother was present. On March 18, 1970, Miss Douglass had also visited Mr. and Mrs. S., with a financial form, and at that time attempted to get support for C.S. However, there was nothing on the form to indicate the amount of support needed or required. Miss Douglass was then permitted to testify as to the contents of a psychologist's report evaluating Mrs. S.'s mental capacity. The report showed a defective range of intellectual functioning, with an I.Q. of 62.
Miss Douglass admitted that she never explained to Mrs. S. the possible consequences of the latter's failure to support C.S. But at the April 18, 1970 meeting, she stated she did explain the consequences with regard to M.S. There was never any indication given to Mrs. S. that this petition to terminate her rights to C.S. was going to be filed. C.S. is now 10 years old and has been in foster care since 1968.
Appellant's evidence consisted of the testimony of Mrs. S. Her husband did not appear. When asked why she didn't try to see C.S. between March 30, 1970 and March 31, 1971, Mrs. S. replied, "Because, when I called her, she said I couldn't see them at all, is what she said; said I couldn't see none of my children at all, is what she told me. * * * "
The following questions and answers were given:
"Q Did you want to see them?
"A Yes, I did, want to see them, awful bad. I haven't seen them for three years and I think it is about time I got the right to have them all back so I can take care of them before I die.
"Q Did you send them any gifts, Mrs. S.?
"A No, I couldn't because I didn't have no address to send them. I would send them gifts, and money, and things like that, but I didn't haveI didn't know where to send it to. She never explained where to send it or anything.
"Q Did you feel as though you were getting along well with Mrs. Douglass?
"A No. I never did get along with her at all because I think I got a dirty deal over the whole mess.
"Q * * * Mrs. S., why did you let the Welfare people have your children in the first place?
"A I didn't, I didn't, Mr. Scheppner. My mom had threatened me. My mom had called the Welfare and gotten my kids taken away. I don't know why. She just threatened me thatshe just threatened me that she was going to get my kids taken away and sure enough she had gotten them taken away from me and ever since, I haven't seen them at all, haven't seen them for three or four years now and I think I got the right to have them back and take care of them before I die.
"Q Mrs. S., how far in school did you go?
"A Only through the eighth grade and then my mom had found in the paper about the night school so I went to night school and learned a little more in night school."
Mrs. S. further testified that no one ever told her to send money for the children's support, and no one would let her see the children at all. This included the April 18, 1970 meeting. At one time her mother was helping to support the S. family. The parents are presently living in a two room furnished apartment, but, although they can afford a larger place, she doesn't want to move until the children are back.
At one point C.S. was living with Mrs. S.'s sister and brother-in-law and she saw him twice, once when she went over to her sister's house, and once when her brother-in-law brought him over to the S.'s house.
*793 Mr. S. usually works as a truck driver, but is presently a film developer. Mrs. S. baby sits, and has applied to Missouri State Employment Office for a job.
Miss Douglass was recalled to testify that C.S. lived with his aunt and uncle from October of 1968 until February of 1970. Thus, according to Miss Douglass, Mrs. S. would not have seen C.S. during the statutory period, but during the previous year. After trial, the court ordered the parents' rights terminated.
"The action for termination of parental rights is designed to extinguish forever the pre-existing legal rights of the parents with respect to their child and is the subject of specialized legislation. The power of the juvenile court to effectuate such a result is in its entirety the creation of the statute; it does not otherwise exist. Therefore, the terms of the statute [Sec. 211.441] must be strictly applied." In Re Taylor, Mo.App., 419 S.W.2d 473, 475[1, 2]; In re C___, Mo.App., 468 S.W.2d 689, 691.
The pertinent statute [Section 211.441][1] provides in part:
" * * * The juvenile court may, upon petition filed as provided in other cases of children coming under the jurisdiction of the court, terminate all rights of parents to a child when it finds that such termination is in the best interest of the child and one or more of the following conditions are found to exist:
* * * * * *
(2) When it appears by clear, cogent and convincing evidence that for one year or more immediately prior to the filing of the petition
(a) The parents have abandoned the child;
(b) The parents have willfully, substantially and continuously or repeatedly neglected the child and refused to give the child necessary care and protection;
(c) The parents, being financially able, have willfully neglected to provide the child with the necessary subsistence, education or other care necessary for his health, morals or welfare or have neglected to pay for such subsistence, education or other care when legal custody of the child is lodged with others;
(d) The parents are unfit by reason of debauchery, habitual use of intoxicating liquor or narcotic drugs or repeated lewd and lascivious behavior, which conduct is found by the court to be seriously detrimental to the health, morals, or well-being of the child; * * *."
It is our duty in the review of this non-jury case to make our own independent findings of fact and conclusions of law. Rule 73.01(d), V.A.M.R.; S.K.L. v. Smith, Mo.App., 480 S.W.2d 119[1].
Appellant urges that there was no "clear, cogent and convincing evidence" of abandonment and willful neglect of this child by his parents. We agree. The picture presented by the mother's testimony in the court below is one of utter confusion. The fact that her rights to two of her other children were terminated and still she requested visits with them only serves to strengthen the impression we have that this woman did not understand what was happening nor what she was expected to do.
The problem before us is not unique. It seems to arise frequently where children are taken from their natural parents and placed into foster homes, under change of custody orders of the Juvenile Court. The reasons for such custody changes vary but the net effect is to place the parent in the position of having to maintain contact with the child through third personsthe *794 agency personnel. It is not at all clear that many of these parents understand they still have the right to see their children, or what efforts they must make to do so, or whom they must contact. It is certainly not clear that they understand that their failure to attempt to see their children may result in termination proceedings being brought.
As to the actual hearing to terminate parental rights, it is clear that the burden of proof rests entirely on those seeking to effectuate the termination. Because the termination proceedings are bottomed on willful neglect and abandonment, we believe it incumbent on the agency or a juvenile officer to clearly establish that the natural parents were fully aware of their right to visit their children and of their obligation to furnish support and other incidentals which demonstrate their interest in the children. While a child is in a foster home, the duty of the parents to support the child seems to be especially difficult for the parents to understand. This is entirely natural. The parents know that the children are being cared for, and that they are not being physically neglected.
Based on this type of factual case, we believe that the agency or juvenile officer should inform the parents of their obligation to support their child who is in foster care and to inform them of what the parents must do to meet this obligation. The agency or a juvenile officer should also show that the parents were made aware of the procedures to be followed and the persons to be contacted in order to maintain a relationship with their child. The parents should be fully advised that failure to exercise their parental responsibilities and maintain contact with the children may result in the termination of their parental rights.
It is quite clear from the record that no abandonment and no willful neglect was shown during the period March 30, 1970, to March 31, 1971. "Abandonment" implies a willful, positive act such as deserting the child. In re Slaughter, Mo. App., 290 S.W.2d 408. "Neglect" is the intentional, deliberate and unjustifiable failure to perform the duty with which the parent is charged by law according to acceptable community standards. S.K.L. v. Smith, supra.
The mother from her testimony appears to be undereducated and totally confused over the series of events which has deprived her of her children. The fact that she requested a visit with all her children the day after her rights to two of them had been terminated further illustrates this woman's lack of understanding of what was happening. Rather than willfully neglecting them, she appears not to have known what procedure to follow in order to see them. She also testified that she was often told she could not see them, and that she did not know where they were. Resultant anger and frustration held her back from further requests. From the record, we do not find either abandonment or willful neglect. In re Taylor, supra.
Lest we be accused of failing to take into consideration the best interests of the child, let us hasten to add that we full well realize the burdens under which the Juvenile Court and its personnel labor, and the honest efforts they make on behalf of the underprivileged families with whom they deal. We also realize that many of these children would have a much better chance at life were they placed in adoptive homes. But we do not have the authority to decide the children's welfare to such an extent, nor do we want it. The statute lists grave reasons for terminating parental rights. If one of these reasons is not proved to exist, the court may not act to terminate. Renfro v. Jackson County Juvenile Court, Mo.App., 369 S.W.2d 616[2]. We see no evidence in this case that any of the statutory reasons do exist. The burden of proof was not carried. Accordingly, the judgment is reversed.
SMITH and SIMEONE, JJ., concur.
NOTES
[1] All references to statutes and rules are to RSMo 1969, V.A.M.S. and V.A.M.R.
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75 Ill. App.3d 25 (1979)
393 N.E.2d 556
JOHN J. DOOLIN, Plaintiff-Appellant,
v.
K-S TELEGAGE COMPANY et al., Defendants-Appellees.
No. 78-43.
Illinois Appellate Court First District (1st Division).
Opinion filed July 16, 1979.
*26 Jeffrey Dean Lewis, Ltd., of Chicago, for appellant.
Harlene G. Matyas, of The Law Offices of Thomas J. Keevers, of Chicago (Sidney Z. Zarasik, of counsel), for appellees.
Reversed and remanded.
Mr. JUSTICE CAMPBELL delivered the opinion of the court:
The plaintiff, John Doolin, appeals from an order of the circuit court of Cook County granting the motion of the defendants, K-S Telegage Company and David B. Lilly Company, to quash service of summons and to dismiss the plaintiff's amended complaint. The plaintiff contends that the defendants are subject to the in personam jurisdiction of the Illinois courts because of their commission of a tortious act in Illinois (Ill. Rev. Stat. 1975, ch. 110, par. 17(1)(b)) and also maintains that sufficient minimum contacts existed as required by the due process clause to constitutionally justify jurisdiction.
The plaintiff filed an action against the K-S Telegage Company, a Delaware corporation, and the David B. Lilly Company, individually and as successor to Telegage, to recover for injuries suffered when a hand truck that he was operating collapsed. (Hereinafter both entities will be jointly referred to as Telegage.) Plaintiff's amended complaint alleged that Telegage maintained one or more offices in Illinois to carry on its business of "designing, manufacturing, and selling hand cars for sale and distribution throughout the United States * * *." It further alleged that, in the course of this business, Telegage did "design, manufacture, and sell to Bresler's Ice Cream Company, an Illinois corporation, a K-S-1, narrow aisle two wheel delivery hand truck." The complaint asserted liability on the basis that Telegage manufactured and sold the hand truck to Bresler's in an unreasonably dangerous condition in that the truck was not equipped with safety equipment to insure its stability. It was also alleged that the unreasonably dangerous condition of the truck proximately caused the injuries that Doolin sustained in Illinois while using the truck in the course of his employment with Bresler's.
Service of process was made upon defendants in Wilmington, Delaware. Telegage filed a special and limited appearance and moved to quash service of summons and to dismiss the plaintiff's amended complaint on the ground that there were insufficient contacts with the State of Illinois to subject Telegage to the in personam jurisdiction of the *27 Illinois courts. Telegage filed an affidavit in support of its motion to quash. The affidavit, sworn to by Charles Ashton III, a vice president of K-S Telegage, division of David B. Lilly Company, stated in pertinent part:
"4. That the K-S Telegage Co., which is a division of the David B. Lilly Company, Inc., maintains no offices, facilities, plants, or any other structure in the State of Illinois.
5. That the K-S Telegage Company, a division of David B. Lilly Company, Inc., maintains no agents, salesmen, personnel or any representatives within the State of Illinois.
6. That the K-S Telegage Company, a division of David B. Lilly Company, Inc., does not have any salesmen or agents or any other representatives or personnel who periodically come into the State of Illinois for transaction of business, nor does it maintain any such personnel to solicit business within the State of Illinois, nor has it ever so acted within the State of Illinois.
7. That the K-S Telegage Company, a division of David B. Lilly Company, Inc., does not execute any contracts or purchase orders within the State of Illinois.
8. That the K-S Telegage Company, a division of the David B. Lilly Company, Inc. does not negotiate any contracts within the State of Illinois.
9. That the K-S Telegage Company, a division of the David B. Lilly Company, Inc., does not have any distributorships within the State of Illinois.
10. That the K-S Telegage Company, a division of David B. Lilly Company, Inc., does not now, nor has it ever, engaged in the design or manufacture of any hand cars for sale and distribution, whether in the State of Illinois or anywhere in the United States.
11. That the K-S Telegage Company, a division of David B. Lilly Company, Inc., has never entered into or executed any contracts with Bresler's Ice Cream Company in the State of Illinois."
In response, the plaintiff filed a memorandum of law and two exhibits. The plaintiff did not, however, file a counteraffidavit. Exhibit A attached to the plaintiff's memorandum, appears to be a copy of a letter written by C.M. Ashton, to an Illinois corporation, Lincoln-Reilly, Inc., Elmhurst, Illinois, in response to an apparent request by Lincoln-Reilly for information and prices on Telegage's hand trucks. In the letter Ashton acknowledged he had included two brochures on "our KS Aluminum Delivery Trucks." The two brochures, the letter noted, included a complete description of Telegage's trucks. Exhibit B appears to be a two-page brochure illustrating and describing several models of K-S Telegage dollies or hand carts. The brochure directs orders to the K-S Telegage Company, P.O. Box 2285, Wilmington, De. 19899. Printed as part of the *28 descriptive copy is the statement that "Many of the largest dairies in the country are using K-S Dollies exclusively." Plaintiff, in his memorandum accompanying the exhibits, asserted that the defendants did not deny that it sold its products to Bresler's, that its product was sold in contemplation of ultimate use in Illinois, or that the accident occurred in Illinois. There was no hearing on the disputed jurisdictional facts nor was any additional evidence taken by the trial court.
On August 31, 1977, the trial court entered an order and pursuant to Telegage's motion, quashed summons and dismissed the plaintiff's amended complaint. On October 4, 1977, upon plaintiff's motion, the trial court amended its August 31, 1977, order nunc pro tunc to state its finding that: (1) the defendants did not transact business within the State pursuant to section 17(1)(a) (Ill. Rev. Stat. 1975, ch. 110, par. 17(1)(a)); and that (2) the defendants had insufficient contacts to justify jurisdiction under section 17(1)(b). The modified order also stated that there was "no just reason to delay enforcement or appeal from this final order."
At this time the trial court at the plaintiff's request entered an order stating that the record on appeal should include three exhibits. Exhibit 3, apparently introduced by the plaintiff at the hearing on the motion to quash, appears to be a letter by C.M. Ashton to Peacock Business Press, Inc., a Park Ridge, Illinois, corporation, in which Ashton, in response to a phone inquiry by Peacock concerning hand trucks, stated that he was enclosing "our brochure describing the two (2) models of Aluminum Hand trucks that we produce for the Ice Cream Industry." On the bottom of this letter were printed the words: "We Also Design And Build Custom Specials."
The notice of appeal filed by plaintiff requested this court to vacate the trial court's order which quashed summons and dismissed the amended complaint. However, plaintiff's brief and reply brief and his remarks at oral argument are directed solely toward arguments that personal jurisdiction over the defendants was proper under 17(1)(b); no arguments are made concerning jurisdiction under 17(1)(a). An appellant who fails to argue an issue waives it, according to Supreme Court Rule 341(e)(7). Ill. Rev. Stat. 1977, ch. 110A, par. 341(e)(7); Wiedemann v. Cunard Line Limited (1978), 63 Ill. App.3d 1023, 380 N.E.2d 932.
We consider first the defendants' contention that the plaintiff's failure to file an affidavit controverting the facts contained in defendants' verified affidavit warranted the trial court's order quashing defendants' summons and dismissing plaintiff's amended complaint. As there was no hearing on the disputed jurisdictional facts and as no additional evidence was taken by the trial court, this court is called upon to examine the plaintiff's amended complaint and the defendants' affidavit. Our review of these *29 documents convinces this court that the defendants' argument is not well taken.
1-3 Illinois decisions recognize that a defendant may attack the court's jurisdiction over him by making a special and limited appearance and filing a motion to quash and dismiss the action. (Farley v. Blackwood (1978), 56 Ill. App.3d 1040, 372 N.E.2d 921; Hawes v. Hawes (1970), 130 Ill. App.2d 546, 263 N.E.2d 625.) A motion to dismiss for improper jurisdiction, premised as it is on a matter which does not appear on the face of the complaint, must be accompanied by a supporting affidavit. (Ill. Rev. Stat. 1977, ch. 110, par. 48(1); Crowe v. Public Building Com. (1977), 54 Ill. App.3d 699, 370 N.E.2d 32; Yale Development Co. v. Oak Park Trust & Savings Bank (1975), 26 Ill. App.3d 1015, 325 N.E.2d 418.) If the defendants' affidavit contesting jurisdiction is not refuted by a counteraffidavit filed by the plaintiff, the facts alleged in the affidavit are accepted as true. (Loughman Cabinet Co. v. C. Iber & Sons, Inc. (1977), 46 Ill. App.3d 873, 361 N.E.2d 379.) However, the defendants' affidavit will be determinative of the motion only if it negates the facts upon which the plaintiff bases jurisdiction because otherwise, the defendant has not effectively controverted plaintiff's prima facie showing that the defendant has submitted to the jurisdiction of Illinois. Continental Nut Co. v. Robert L. Berner Co. (7th Cir.1965), 345 F.2d 395.
In the present case, the plaintiff alleged liability against the defendants based on the Suvada doctrine of strict liability (Suvada v. White Motor Co. (1965), 32 Ill.2d 612, 210 N.E.2d 182), and jurisdiction upon the defendants' commission of a tort in Illinois under the Illinois long-arm statute. (Ill. Rev. Stat. 1975, ch. 110, par. 17(1)(b).) The defendants contend that their affidavit denied every jurisdictional fact alleged by the plaintiff in his amended complaint. We do not agree. An examination of the defendants' affidavit discloses that the affidavit avoids any reference to certain facts material to the disposition of this case. The affidavit does deny the plaintiff's jurisdictional facts based on doing business in Illinois under section 17(1)(a) and also denies that Telegage designed or manufactured hand trucks. However, the affidavit did not go as far as the affidavit in Gray v. American Radiator & Standard Sanitary Corp. (1961), 22 Ill.2d 432, 176 N.E.2d 761 or that approved by the court in Continental Nut Co., because it did not deny every one of the plaintiff's jurisdictional allegations. Most particularly, the affidavit did not deny that defendants sold "Telegage" trucks throughout the United States, did not attempt to explain the defendants' affiliation or connection with the product as suggested by the plaintiff's exhibits A, B and C, leaves open the question as to whether a sale was in fact made by defendants to Bresler's or its agents as alleged in the complaint and how the truck came into *30 Illinois, that the truck was sold to Bresler's in an unreasonably dangerous condition, or that the tort occurred in Illinois. Accordingly, the affidavit was not sufficient to deny the grounds upon which plaintiff claimed jurisdiction.
The defendants rely upon Continental Nut Co. to support its position; that reliance, however, is misplaced. In that case, the plaintiff sued two parties for libel. Each defendant contested jurisdiction by filing a motion to dismiss with an affidavit attached. The plaintiff failed to file any counteraffidavits. On appeal, the Seventh Circuit sustained the dismissal of one of the defendants because it had denied that it was a part of the conspiracy which resulted in the publication of the alleged libel. However, the court reversed as to the other defendant because, although his affidavit was also unrefuted, the affidavit did not deny the plaintiff's basis for jurisdiction. The facts in this case are analogous to the facts involving the latter defendant. Accordingly, we do not find that the defendants' affidavit is dispositive of the motion to dismiss.
The main issue on appeal is whether the defendants were subject to the personal jurisdiction of the Illinois courts within the dictates of the due process clause. The plaintiff argues that Telegage is subject to the personal jurisdiction of the Illinois courts because it committed a "tortious act" within the meaning of section 17(1)(b) of the Civil Practice Act. (Ill. Rev. Stat. 1975, ch. 110, par. 17(1)(b).) Telegage argues that it had insufficient contacts with Illinois to subject it to the jurisdiction of the Illinois courts and that it could not be held amenable to Illinois process because there was no showing that it "contemplated" use of the hand truck in this State.
4 Section 17, known as the long-arm statute, provides for the exercise of in personam jurisdiction over nonresident defendants "to the extent permitted by the due process-clause." (Nelson v. Miller (1957), 11 Ill.2d 378, 389, 143 N.E.2d 673; accord, Connelly v. Uniroyal, Inc. (1979), 75 Ill.2d 393, 389 N.E.2d 155.) It provides in pertinent part:
"§ 17. Act submitting to jurisdiction Process. (1) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, his personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any such acts:
(a) The transaction of any business within this State;
(b) The commission of a tortious act within this State." Ill. Rev. Stat. 1975, ch. 110, par. 17(1)(a)(b).
5 Traditionally, jurisdiction was available only where the defendant was present within the territorial jurisdiction of the court because a court's jurisdiction was limited by the requirement that a State exercise physical *31 power over a defendant. (Pennoyer v. Neff (1877), 95 U.S. 714, 24 L.Ed. 565.) In International Shoe Co. v. Washington (1945), 326 U.S. 310, 90 L.Ed. 95, 66 S.Ct. 154, this rule was changed and the jurisdiction of courts greatly expanded. There, the court held that:
"[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" 326 U.S. 310, 316, 90 L.Ed. 95, 102, 66 S.Ct. 154.
In construing the International Shoe Co. due process requirements, the court in Nelson v. Miller (1957), 11 Ill.2d 378, 143 N.E.2d 673, recognized that a State has an interest in providing a forum to a citizen who has suffered injuries caused by persons who have substantial contacts within Illinois and have enjoyed the benefit and protection of the laws of Illinois. In Nelson, the court held that sufficient contacts with the State existed to justify jurisdiction where a nonresident defendant's agent, present within the State, committed a tortious act. Where a tort has been committed from outside the State, some difficulty exists in determining whether sufficient contacts exist with the State to warrant jurisdiction over the person of a defendant. A variety of State and Federal decisions have focused on interpreting the "minimum contacts" requirement within this context. McBreen v. Beech Aircraft Corp. (7th Cir.1976), 543 F.2d 26; Keckler v. Brookwood Country Club (N.D. Ill. 1965), 248 F. Supp. 645; Gray v. American Radiator & Sanitary Corp. (1961), 22 Ill.2d 432, 176 N.E.2d 761; Bolf v. Wise (1970), 119 Ill. App.2d 203, 255 N.E.2d 511.
In Gray, the leading case in this area, the court held that in personam jurisdiction could be asserted over an Ohio manufacturer who negligently manufactured and marketed a defective valve. The valve was later incorporated into a water heater by a Pennsylvania company and sold to an Illinois resident who was injured in Illinois when the heater exploded. No other contacts with the State existed. Titan, the Ohio manufacturer, argued that an out-of-State manufacturer could not be held subject to the court's jurisdiction merely because an accident occurred while his product was present within the State of Illinois. The court looked at whether Titan "engaged in some act or conduct by which he may be said to have invoked benefits and protections of the law of the forum" (22 Ill.2d 432, 440), in order to determine whether sufficient contacts existed. As Titan did not argue that the use of the valve in Illinois was an isolated instance, the court inferred that its commercial transactions resulted in the substantial use and consumption of its products within the State and as such that Titan had enjoyed the benefits of Illinois law in the marketing of its product. The court explained that:
*32 "[I]f a corporation elects to sell its products for ultimate use in another State, it is not unjust to hold it answerable there for any damage caused by defects in those products." (22 Ill.2d 432, 442.)
In so deciding, the court laid down a "contemplation test" by which to determine whether a defendant has benefitted from the laws of Illinois. Where the defendant contemplated or anticipated that his products would be placed in the national stream of commerce or sold for ultimate use in Illinois, the defendant would have benefitted from the law of Illinois. Consequently, it would not be unreasonable to require him to defend in Illinois.
The facts in Gray are analogous to those in the present case despite the fact that it involved a suit premised on negligence rather than strict liability. (Keckler v. Brookwood Country Club (N.D. Ill. 1965), 248 F. Supp. 645.) The defendants argue that sufficient contacts with Illinois were not shown because, among other things, the sale to Bresler's was not executed in Illinois and because Telegage did not maintain any offices or facilities or generally did business within the State. We disagree. Whether the type of activity conducted within the State is adequate depends upon the facts in the particular case not on any mechanical test. (International Shoe Co. v. Washington (1945), 326 U.S. 310, 319, 90 L.Ed. 95, 66 S.Ct. 154; Gray, 22 Ill.2d 432, 440; accord, Connelly v. Uniroyal, Inc. (1979), 75 Ill.2d 393, 389 N.E.2d 155.) In the application of this flexible test, the relevant inquiry is whether the defendant has by some act or type of conduct benefitted from the law of Illinois. Hanson v. Denckla (1958), 357 U.S. 235, 253, 2 L.Ed.2d 1283, 78 S.Ct. 1228; International Shoe Co., 326 U.S. 310, 319, 90 L.Ed. 95, 104, 66 S.Ct. 154.
Here, the defendants did not deny that they sold a hand truck to Bresler's, an Illinois corporation, for its ultimate use in Illinois and that an injury resulted in Illinois as a result of an unreasonably dangerous condition in the truck or that this sale was an isolated sale. The contacts alleged in the complaint were greater than those present in Gray. There the court concluded that Titan's contacts were sufficient because it had indirectly benefitted from the law of the State. Here, Telegage allegedly marketed its products in Illinois, and therefore, directly received the benefits and protections of Illinois law. Anderson v. Penncraft Tool Co. (N.D. Ill. 1961), 200 F. Supp. 145; Bolf v. Wise (1970), 119 Ill. App.2d 203, 255 N.E.2d 511.
6, 7 The principles of due process support jurisdiction where certain "minimum contacts" exist and "the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" (International Shoe Co. v. Washington (1945), 326 U.S. 310, 316, 90 L.Ed. 95, 102, 66 S.Ct. 154.) The court in Gray v. American Radiator & Sanitary *33 Corp. (1961), 22 Ill.2d 432, 176 N.E.2d 761, explained that this was where it was convenient for the parties to settle their case and noted that technological advancements in transportation and communication have greatly reduced the inconvenience which once attended the defense of a suit brought in other States. Consequently, courts now find the imposition of jurisdiction reasonable where minimum contacts have been found, the injury occurred within Illinois, the law of Illinois governs, and potential witnesses are located within Illinois. (Gray; Nelson v. Miller (1957), 11 Ill.2d 378, 143 N.E.2d 673; Bolf.) In the present case all of these factors are present. Accordingly, we conclude that Gray warrants the exercise of in personam jurisdiction over these defendants by the Illinois courts.
The defendants seek to avoid this result by asserting that the application of the Gray "contemplation test" differs where a distributor is involved rather than a manufacturer. This difference, defendants argue, is based on the fact that a manufacturer is more likely to anticipate the use of its product in a national market than a distributor or retailer who might only contemplate local or regional consumption of its product. Defendants cite the Washington case, Oliver v. American Motors Corp. (1967), 70 Wash.2d 875, 425 P.2d 647, in support of this proposition. We find this reliance misplaced because the facts in Oliver are readily distinguishable from those in the case at hand.
In Oliver, plaintiffs, several Washington residents, sued an Oregon automobile dealer and American Motors Corporation for manufacturing and distributing an allegedly defective automobile. Plaintiffs sued under the long-arm statute of Washington, a statute virtually identical to the Illinois statute. The Washington high court affirmed the dismissal of the complaint as to the automobile dealer because the court felt that the dealer did not contemplate the use of the car in another State with a tortious result. The court in distinguishing Gray noted:
"Though it may be just to infer minimal contacts as to a manufacturer who produces goods and puts them into the broad stream of interstate commerce as was done in Gray v. American Radiator & Standard Sanitary Corp., supra, and as was done, in fact, in Golden Gate Hop Ranch, Inc. v. Velsicol Chem. Corp., supra; we believe that no such inference is warranted where there is a sale by an out-of-state retailer to his local customer, if nothing further appears by way of a purposeful act on his part or possession of information, which would in any way charge the retailer with knowledge that his transaction might have out-of-state consequences." 70 Wash.2d 875, 889, 425 P.2d 647, 656.
The court went on to explain that:
"To attach personal jurisdiction because thereafter the out-of-state purchaser brings the offending mechanism into this state and a *34 tortious consequence occurs is so slender and tenuous a thread upon which to hang the implication of submission to our jurisdiction, that in our judgment it does indeed offend `traditional notions of fair play and substantial justice' within the contemplation of the due process clause." 70 Wash.2d 875, 889, 425 P.2d 647, 656.
This case is factually distinguishable from Oliver because Telegage allegedly sold a finished product directly to an Illinois company for ultimate use by that company in Illinois. Bresler's was not a retailer of hand trucks, so Telegage could not have anticipated that the truck in question would be used anywhere but Illinois. Unlike the automobile dealer in Oliver, Telegage could not expect its product to be used locally. Moreover, the alleged contacts apparent in the present instance are far greater than those which existed in Oliver. There, the only contact that the defendant had with Washington was the fortuitous fact that the place of the injury occurred there; both the plaintiffs and the defendant were citizens of Oregon, and the sale itself was made in Oregon.
The defendants next urge that in order to show that they benefitted from the laws of Illinois as a distributor, the plaintiff must show a particular distribution volume or pattern. In support they cite Gray and Keckler v. Brookwood Country Club (N.D. Ill. 1965), 248 F. Supp. 645. In these cases, the manufacturers did not sell their products to Illinois consumers or even to Illinois distributors; rather, they sold their goods to parties who then placed the products into the stream of commerce. Therefore, it was necessary to find or infer that each defendant knew that it was placing its product into the national channels of commerce in order to find that the defendant-manufacturer did benefit from the law of Illinois in marketing its product. Such a showing was unnecessary here because Telegage, if it did sell the hand truck to the Illinois company, as alleged, knew it was for ultimate use in Illinois. As such it was reasonable to subject Telegage to the jurisdiction of the courts of Illinois, because Telegage, in marketing its product in Illinois, received the benefit and protection of the laws of Illinois.
For the foregoing reasons the order of the circuit court of Cook County quashing summons is reversed and the matter is remanded to the circuit court of Cook County to allow defendant to answer or otherwise plead.
Judgment reversed; cause remanded to the circuit court of Cook County.
GOLDBERG, P.J., and O'CONNOR, J., concur.
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958 So.2d 1108 (2007)
W.T. PARKER, Petitioner,
v.
James R. McDONOUGH, Secretary, Florida Department of Corrections, Respondent.
No. 1D06-4858.
District Court of Appeal of Florida, First District.
June 21, 2007.
W.T. Parker, pro se, Petitioner.
Bill McCollum, Attorney General, and Linda Horton Dodson, Assistant Attorney General, Tallahassee, for Respondent.
PER CURIAM.
The petition for writ of certiorari is denied on the merits. We also deny petitioner's request to quash the circuit court's order on indigency for filing the petition for writ of mandamus below. There is nothing in the record to show that petitioner requested relief from that order by filing a proper motion in the circuit court, therefore, petitioner waived the issue. Norman v. Fla. Parole Comm'n, 957 So.2d 697 (Fla. 1st DCA 2007); Kemp v. McDonough, 955 So.2d 635 (Fla. 1st DCA 2007).
However, pursuant to Florida Rule of Appellate Procedure 9.430, we quash the circuit court's order imposing a lien for costs and fees incurred in this appellate proceeding and direct the circuit court to order reimbursement of any funds that have been withdrawn from petitioner's inmate trust account to satisfy the *1109 improper appellate fee lien order. Wheeler v. McDonough, 957 So.2d 94 (Fla. 1st DCA 2007); Reddick v. McDonough, 938 So.2d 595 (Fla. 1st DCA 2006). Because petitioner challenged the loss of gain time, the proceeding below qualified as a "collateral criminal proceeding" under Schmidt v. Crusoe, 878 So.2d 361 (Fla.2003), and there is no authority for imposing a lien under section 57.081, Florida Statutes (2006), the general indigency statute. Cason v. Crosby, 892 So.2d 536 (Fla. 1st DCA 2005).
KAHN, LEWIS, and HAWKES, JJ., concur.
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201 Cal.App.2d 131 (1962)
PICO CITIZENS BANK, Plaintiff and Respondent,
v.
TAFCO INC., Defendant and Appellant.
Civ. No. 25126.
California Court of Appeals. Second Dist., Div. One.
Mar. 9, 1962.
Nicolas Ferrara for Defendant and Appellant.
Betts, Ely & Loomis, Forrest A. Betts, Burton & Gauldin and R. Jackson Gauldin for Plaintiff and Respondent.
LILLIE, J.
This is the second appeal in this case. Plaintiff as assignee of Moos Manufacturing Co. sought a judgment in replevin for the possession of a quantity of knife and scissor sharpeners or their value in the event of nondelivery (Code Civ. Proc., 667). Plaintiff prevailed at the first trial, the judgment ordering defendant to pay damages in the sum of $2,000 as and for shortages in the quantities of sharpeners actually replevined prior to trial by claim and delivery. The judgment was thereafter reversed without further order or direction to the trial court (Pico Citizens Bank v. Tafco Inc., 165 Cal.App.2d 739 [332 P.2d 739]). Upon the second trial plaintiff again prevailed, and defendant has again appealed.
There is no dispute as to certain salient facts. They are set forth in the opinion on the prior appeal in which certain determinations were made with respect thereto. On or about September 22, 1954, Moos and Tafco entered into a written contract by which Moos agreed to manufacture, and Tafco agreed to sell, the sharpeners in question. In the form of a letter signed by L. E. Crowley, Tafco's president, the contract confirmed various oral agreements theretofore reached; among other things, the agreement provided that title to the sharpeners would remain in Moos until they were sold by Tafco to third parties. Said the court on the previous appeal: "The explicit language of the agreement: 'It is your [Moos's] merchandise until it is sold' precludes any other conclusion" (p. 743). It was further there pointed out that "While not strictly a contract of consignment under which one delivers possession of goods to another for the purpose of sale with title remaining in the former, the agreement here bears a close resemblance thereto" (p. 744).
Another clause in the contract, material to this second appeal, was as follows: " 'In the event it [the contract] is cancelled by either party, the above arrangement will remain in effect until you [seller] have been paid for the merchandise delivered and the dies and other equipment of ours returned to us. Neither party shall terminate any part of this agreement without giving the party ninety (90) days written notice in advance' " (p. 742). It was determined on the prior appeal that Tafco, in the event of cancellation under this clause, *133 had the continuing right for a reasonable time to possession of the articles in its possession for the purpose of selling such merchandise--contrary to the finding of the trial court that Tafco had no right to possession of any unsold sharpeners stored on its premises. The reviewing court thus rationalized its conclusion in this regard: "In view of the fact that the parties had agreed that the agreement could be terminated by either they undoubtedly contemplated that at the time of the cancellation the defendant might have on hand a quantity of the manufactured articles remaining unsold and for which orders might reasonably be expected thereafter as the result of the defendant's prior advertising and selling efforts." (Pp. 747-748.) In reaching the above result it was assumed, but not decided, that there was support for the finding that a notice of cancellation was given by Moos within the meaning of the agreement.
[1] As a result of the simple reversal of the previous judgment, the matter proceeded to trial a second time with the cause "at large for readjudication [of] all issues involved in the case" (De Hart v. Allen, 26 Cal.2d 829, 833 [161 P.2d 453]), and with "the parties in the same position as if the case had never been tried" (Forgeron Inc. v. Hansen, 169 Cal.App.2d 832, 834 [338 P.2d 10]). Tafco subsequently conceded, however, that title to the sharpeners (as distinguished from the right of possession thereto) remained in Moos until the goods were sold. In view of that concession, therefore, there remained for determination at the second trial (1) whether the contract in suit was in fact cancelled and, if so (2) whether a reasonable time thereafter had elapsed within which Tafco could have sold the goods remaining in its possession. Findings favorable to plaintiff on these issues were rendered by the trial court; the claimed insufficiency of the evidence to support such findings forms the principal basis of this appeal.
We first summarize the events leading up to and involving the asserted cancellation of the agreement. Following execution of the contract, and pursuant thereto, large quantities of sharpeners were manufactured and delivered by Moos to Tafco; the latter, in turn, sold the merchandise to various accounts, among whom were certain chain stores. There was testimony that the Safeway account would require production of 5,000 units per week for a period of one year; predicated upon that prospect and Tafco's request therefor, Moos produced and stored with Tafco stocks of the merchandise in *134 quantities much more numerous than would have been manufactured except for the Safeway account. Deliveries on that account commenced about the first part of January 1955; Safeway, however, terminated its order some 90 days later--the last delivery being about March 31, 1955. Moos, having borrowed funds from plaintiff in order to manufacture the large number of units required by the anticipated continuance of the Safeway account, found itself facing financial difficulties unless the sharpeners were sold to other outlets; Tafco was notified to that effect. On May 10, 1955, a registered letter was sent to Tafco in which reference was made to "recent and numerous conversations with yourself [Tafco's president] wherein emphasis has been placed on the need for relief for Moos Manufacturing Company from the untenable situation which the absence of continuing sales thru Tafco's efforts has placed on your manufacturing source for these items." After itemizing the merchandise manufactured and that sold and unsold, the letter concluded as follows: "Had the program gone on as represented this balance no doubt would have been liquidated before this date, and as you know, on the basis of your representation of a firm program to our bank, credit was obtained on the promises thereof for an obligation that it is necessary be dealt with without delay. We are forced therefore, to request payment in full of the outstanding balance on our customary terms of net 30 days."
On or about June 24, 1955, Moos served on Tafco a document entitled "Notice of Rescission and Demand for Return of Property." Included therein was a formal demand for the return of 60,309 Tafco Scissor Sharpeners and 56,913 Tafco Knife Sharpeners "now held by you ... This same demand has been made upon you on several previous occasions." Tafco thereafter refused to deliver the sharpeners and continued to sell to its customers from the stockpile (already accumulated) through October 1955; in that regard, it was admitted by Tafco's president that no accounting of these sales was made to Moos after June 27th of 1955.
Following the assignment (September 15, 1955) by Moos to plaintiff of all its interest in and to the sharpeners, the instant litigation was commenced; contemporaneously therewith and by resort to the auxiliary remedy of claim and delivery, some but not all of the articles were replevined on November 9, 1955. The shortage in the number of sharpeners demanded and those replevined apparently resulted either from the sale of said sharpeners by Tafco or its use of them *135 as samples--the contract value of the sharpeners unaccounted for was, by stipulation, fixed at $2,402.45 (the amount of the judgment appealed from).
Finally, it was found "That the financial records of Tafco established that in only one month during the years 1955 and 1956 did Tafco ever show a business profit and that was the month of November 1956, the month during which the sharpeners were repossessed by the replevin action; that said financial records introduced in evidence or testified to, establish that during the period of time involved in the contract at issue in this case, Tafco operated at an average monthly loss of $1,500.00; that there is no showing that Tafco could, over any given period of time up to the time of the trial of this case, have sold the sharpeners which are the subject of this controversy in such a manner or at such a price or under such circumstances as to make a profit therefrom; that there is no proof of a money value loss to Tafco with reference to these sharpeners in any event."
It was further found "That the dies and tools necessary for or incident to the manufacture of the knife and scissors sharpeners were, at all times, reproducible on the die and tool market at reasonable prices; that the sharpeners in controversy are not of such individualistic or unique character that they could not have been manufactured by persons other than Moos in the manufacturing business; that it was possible for Tafco to secure other manufacturers, or to have the parts manufactured and assembled the sharpeners itself, as it had done before the Moos contract, and as it did after the Moos contract; that the sharpeners involved in this action were not, in and of themselves, necessary or required items incident to the continuation of Tafco's business of marketing knife and scissors sharpeners; that so far as the parties to this action are concerned, and so far as this litigation is concerned, Tafco could have continued in the knife and scissors sharpener business by securing the manufacturer or assembly of sharpeners through its own or other agencies."
Taking up the first of Tafco's major points on appeal, it is contended that neither the letter of May 10, 1955, nor the notice of rescission received by Tafco on June 24, 1955, served to cancel the contract within the meaning of the subject agreement. Emphasized by Tafco is the claim that the word "cancel" is not found in either document. Thus, the May 10 letter simply demanded an accounting and payment in full of the outstanding balance, while the June notice and demand *136 made use of the word "rescission" in its heading. [2] There is a distinction, of course, between the terms "cancel" and "rescind"--accordingly, it has been observed that "an important problem of construction is presented by notices or agreements which purport to terminate the contract." (Witkin, Summary of Cal. Law (7th ed. 1960) 324.) Cited in the work just quoted is Winter v. Kitto, 100 Cal.App. 302 [279 P. 1024], wherein expressions of "cancellation" or "rescission" were not construed as the renunciation of any claim for damages for prior breach unless such intention clearly appears. The factual question is a close one; but two trials have resulted in findings that either or both of the documents just mentioned effected a cancellation pursuant to the terms of the agreement. [3] "The question of whether a contract has been cancelled, rescinded or abandoned is a mixed question of law and fact [citations] which is addressed to the trial court [citations] and the finding of the trial court will be upheld if it is supported by substantial evidence." (Ross v. Frank W. Dunne Co., 119 Cal.App.2d 690, 698-699 [260 P.2d 104].)
In the instant case there was conflicting evidence, by inference and otherwise, upon this issue. The record shows that Tafco, at least subsequent to the June 24 notice, considered the agreement terminated. As stated earlier, after June 27, 1955, no accounting of its sales was rendered by Tafco to plaintiff's assignor, and this despite the conceded fact that sharpeners (presumably those manufactured by Moos) were being sold by Tafco to its various accounts. [4] Since "The terminology used is not controlling" (12 Cal.Jur.2d, Contracts, 187), the inference was reasonably deducible that Tafco understood the documents to constitute a cancellation of the contract within the meaning of the agreement. The record also reveals that Tafco's president, when cross-examined on this phase of the controversy, proved to be an evasive witness--parrying questions and otherwise establishing his testimony to be unworthy of complete credence; his evasiveness, of course, is understandable in view of the finding that his company, save for one month, was operating at a loss. It thus appears that during the critical period following the termination of the Safeway account, and for an indefinite period thereafter, Tafco could not have kept its end of the bargain. Where one party is unable to perform as required by the terms of the contract, a notice of cancellation (or rescission) would have been unnecessary and an idle act. [5] As stated by respondent, "The party abandoning the contract *137 cannot, after failing to perform its obligations, insist upon compliance by the other party with reference to [a] technical notice of termination," citing Walker v. Harbor Business Blocks Co., 181 Cal. 773, 778 [186 P. 356].
The next major point relates to the finding that a reasonable time had elapsed from the notice of cancellation within which Tafco could have disposed of the sharpeners then unsold. The trial court found that Tafco had such notice not later than June 30, 1956--obviously, and there is reference thereto in other findings, the notice in question was that served on Tafco on or about June 24, 1955. Since the property was replevined by claim and delivery on or about November 9, 1955, a period of some 130 days intervened from the notice (of cancellation) to the replevin. Plaintiff produced a witness, qualified to so testify, that in his opinion a period of 90 days would have been reasonable under the circumstances. [6] Although Tafco presented contrary testimony, "What constitutes reasonable time is always a question of fact." (Leiter v. Handelsman, 125 Cal.App.2d 243, 251 [270 P.2d 563].) We are not impressed by Tafco's argument that the period of reasonable time should be computed from the expiration of the 90-day advance notice, nor may such construction be read into the opinion on the prior appeal. Substantial evidence exists for the criticized finding, and we need pursue the matter no further.
Other assignments of error are likewise without merit. First, without citation of authority it is argued that the dismissal by Moos of an action filed prior to the assignment constituted a relinquishment of plaintiff's right to pursue the present proceeding; to the contrary, such prior action was dismissed because title to the merchandise and the claimed right to its possession had been assigned, and not otherwise. Next, but briefly and with little supporting authority Tafco claims that the assignment and bill of sale (from Moos to plaintiff) were in legal effect a chattel mortgage. It will suffice to state that the instruments in question do not warrant any such interpretation. From the foregoing erroneous premise Tafco also urges that the sharpeners were Tafco's stock in trade and may not be mortgaged. (Civ. Code, 2955, subd. 3.) If it may be said that the sharpeners were stock in trade, they were those of the manufacturer--in this case, plaintiff's assignor, and not Tafco. [7] Finally, it is contended that the findings of fact are ambiguous, contradictory and inconsistent. There is a measure of validity to this claim in that, as *138 mentioned earlier, reference is made to the year 1956 as the date of certain events material to the controversy; certainly, however, the asserted deficiencies are not grounds for reversal. Thus, if the criticized findings had been made in accordance with the evidence, they would not have been more favorable to Tafco than the findings which were made. (Chamberlain v. Wakefield, 95 Cal.App.2d 280, 292 [213 P.2d 62].)
The judgment is affirmed.
Wood, P. J., and Fourt, J., concurred.
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730 P.2d 1053 (1986)
112 Idaho 133
FIRST SECURITY BANK OF IDAHO, N.A., Plaintiff-Respondent,
v.
Richard W. STAUFFER and Colleen A. Stauffer, husband and wife; Warren E. Stauffer and Alta E. Stauffer, husband and wife, Defendants-Appellants, and
The Federal Land Bank of Spokane; the United States of America Acting Through the Farmers Home Administration; United States Department of Agriculture, Defendants-Respondents.
No. 16127.
Court of Appeals of Idaho.
December 29, 1986.
*1055 Kenneth L. Perkes (argued) and G. Rich Andrus, Rexburg, for appellants.
Alan C. Stephens, Idaho Falls, for respondent First Security.
Ron Kerl, Pocatello, for respondent Federal Land Bank.
Daniel L. Hawkley, Boise, for respondent United States Department of Agriculture.
Alan C. Stephens argued on behalf of all respondents.
WALTERS, Chief Judge.
This case involves the foreclosure of a real property mortgage. The action reaches the appellate court in an unusual posture. A judgment was entered in favor of the plaintiff-mortgagee, allowing recovery on a claim and delivery action (Count I) and for foreclosure of a real property mortgage (Count II). The plaintiff then moved to amend the judgment. The plaintiff requested dismissal of Count II for foreclosure of the real property mortgage, deleting recovery on that claim from the judgment. The amendment was allowed without a hearing. The defendants-mortgagors moved to set aside the amended judgment. Their motion was denied and they appealed. The defendants want the original judgment against them, on both of the plaintiff's claims, reinstated. Moreover, the defendants' real property has been sold on foreclosure of a separate, superior mortgage. Neither the defendants nor the plaintiff in this action redeemed the property following that sale.
The issues involved in this appeal include: (1) whether a junior real property mortgagee, who also possesses a personal property lien, is barred from collecting a deficiency judgment by its failure to redeem from a senior mortgagee's foreclosure on the real property; (2) if not, (a) whether under Idaho law a joint foreclosure of junior and senior mortgages on the same real property may be ordered; and (b) whether a prevailing party's motion to amend a judgment by removing a claim may be granted without hearing. We conclude that a deficiency judgment is not barred and that a joint foreclosure could be entered. However, we hold that due process requires a hearing before a judgment is amended to the detriment of opposing parties. We vacate the orders of the district court amending the judgment and denying the mortgagors' motion to set aside the amended judgment. We remand the cause for further proceedings.
In 1974, Warren and Alta Stauffer, husband and wife, agreed to sell 320 acres of land in Butte County, Idaho, to Richard and Colleen Stauffer, also husband and wife. Record title to the property remained in Warren and Alta, apparently until the sale price was paid in full by Richard and Colleen.[1] In 1976 all of the Stauffers executed a mortgage on the same property, in favor of the Federal Land Bank of Spokane, as security for a loan of $75,000. The Stauffers later obtained additional loans for nearly $180,000 from the Butte County Bank (now First Security Bank of Idaho). These loans were secured by a lien *1056 on Richard and Colleen's personal property and by a second mortgage on the same real property pledged to the Federal Land Bank. The Stauffers defaulted on both the Federal Land Bank and First Security loans.
First Security brought an action for claim and delivery of the personal property and to foreclose its mortgage on the real property. A deficiency judgment was also sought. Warren and Alta Stauffer answered by pro se denial. Richard and Colleen Stauffer did not file any appearance and an order of default subsequently was entered against them. The Stauffers sought reorganization relief in bankruptcy court. However, bankruptcy stays were lifted to permit First Security to attach the personal property.
In response to First Security's foreclosure complaint, the Federal Land Bank filed a counterclaim against First Security and a crossclaim against the Stauffers. In those pleadings, Federal Land Bank alleged the property had a fair market value of $250,000 and sought foreclosure of its senior lien. First Security answered the counterclaim, admitted the value alleged, admitted Federal Land Bank's superior position, and prayed for a joint foreclosure. Both First Security and the Federal Land Bank moved for summary judgment on their claims. They filed supporting affidavits and a proposed decree of foreclosure declaring that the fair market value of the real property was $250,000.
On April 15, 1985, the decree of joint foreclosure was summarily issued. Four days later, following notice of the foreclosure sale, First Security moved pursuant to I.R.C.P. 59(e) and 60(b) to alter or amend the judgment and for relief from the judgment in its favor. First Security sought to amend the judgment by dismissing that portion relating to foreclosure of its real property mortgage. First Security apparently sought this amendment to avoid an allegedly erroneous fair market value figure contained in the decree. It is unclear why First Security did not simply move to amend the stated value. First Security indicated it would proceed only on its action for claim and delivery of personal property and for any deficiency. The motion was designed not to affect Federal Land Bank's foreclosure, stated no grounds, and was not supported by affidavit or any allegation of fact or law.
First Security's motion to amend the judgment was served upon the Stauffers. On May 6, the trial court granted the motion by dismissing the real property foreclosure portion of First Security's claim "without prejudice as to the Plaintiff against all Defendants and Cross-defendants." The motion was granted without a hearing. First Security argues that in fact the court was acting on its own initiative to correct an erroneous decree under I.R.C.P. 60(a) or pursuant to an implied power under I.R.C.P. 59. See 6A MOORE'S FED. PRACTICE ¶ 59.12[4] (2d ed. 1986). For purposes of our analysis, the district court's motivation is not dispositive.
The Stauffers argue that they became aware of the potential consequences of this amendment only upon seeking the advice of counsel after receiving the amendment order. They contend they were under the impression the order sought by First Security would merely dismiss its claim and have no additional consequences. After the amendment, the Stauffers realized that they could be exposed to an additional liability to First Security for the deficiency balance of their debt owed to that bank, if the fair market value of the mortgaged property was not $250,000 but was a sum less than the debt owed to First Security. On June 5, 1985, pursuant to I.R.C.P. 60(b), the Stauffers moved to vacate and set aside the amendment to the judgment, and to stay the sale of the property. A stay was granted. Following a hearing, this stay was lifted and the property was sold at a sheriff's execution sale on August 9, 1985 to Federal Land Bank (the highest bidder at the sale) for $99,203.38. On August 28, the court entered a written order, reiterating that the stay was lifted and denying Stauffers' motion to set aside the amended judgment. In that same order *1057 the court found the value of the property was $175,000 as of August 5, 1985.[2] Stauffers appealed from the denial of their motion to set aside the amendment of the judgment.
The Stauffers contend that their failure to recognize the ramifications of this amendment constituted mistake, inadvertance, surprise or excusable neglect within the terms of Rule 60(b)(1) and justifies their initial failure to contest First Security's amendment motion when it was filed. In the alternative, they argue that the lack of a hearing on First Security's motion to alter or amend denied them due process. They contend that such an error falls within "any other reason justifying relief from the operation of the judgment" as provided by I.R.C.P. 60(b)(6).
As a preliminary matter, First Security contends the Stauffers' appeal is not timely, asserting that a Rule 60(b) motion may not substitute for a timely appeal. See Puphal v. Puphal, 105 Idaho 302, 669 P.2d 191 (1983); Dustin v. Beckstrand, 103 Idaho 780, 783, 654 P.2d 368, 371 (1982); 7 MOORE'S FED.PRACTICE ¶ 60.18[8] (2d ed. 1985). First Security argues that the time for appeal from the judgment ran from May 6, 1985, the date of entry of the amended judgment. First Security Bank v. Neibaur, 98 Idaho 598, 570 P.2d 276 (1977). In this case the forty-two day period for appeal from the judgment elapsed before the notice of appeal was filed. See I.A.R. 14. However, a postjudgment order is itself appealable, if not also time-barred. I.A.R. 11(a)(7). Here, the notice of appeal was filed and served within forty-two days of the order denying the Stauffers' Rule 60(b) motion. Because this appeal is brought from the denial of Stauffers' Rule 60(b) motion, we have jurisdiction to review that decision. We need examine only the district court's refusal to set aside the amendment of the judgment.
I
We turn first to the question of whether First Security's alleged right to collect any deficiency balance is affected by its failure to redeem following the sale on foreclosure of the Federal Land Bank mortgage. At oral argument in this case, the parties disclosed that neither First Security, as junior mortgagee, nor the Stauffers, as mortgagors, redeemed within the statutory period (I.C. § 11-402), which expired while this appeal was pending. First Security suggests that the case is moot because neither party redeemed. However, relying on Eastern Idaho Production Credit Assoc. v. Placerton, Inc., 100 Idaho 863, 606 P.2d 967 (1980), First Security also contends that it may still seek a deficiency judgment to the extent its remaining debt exceeds the fair market value of the real property on the last possible day of redemption. First Security contends that this value has not been finally determined, but that it is approximately $112,000 rather than $250,000 as earlier adjudged. It is the prospect of liability for a deficiency beyond $112,000, instead of $250,000, that led Stauffers to challenge the amendment of the judgment.
The value of the subject real property clearly is significant only if First Security is permitted to seek a deficiency judgment. Idaho's single-action statute, I.C. § 6-101, provides an exclusive remedy where a debt is secured by real property. The statute requires a real property mortgagee to look first to its security before proceeding on the personal debt. Clark v. Paddock, 24 Idaho 142, 132 P. 795 (1913) (construing predecessor statute, R.C. § 4520). Idaho Code § 6-108 limits any subsequent deficiency judgment to
the difference between the mortgage indebtedness, as determined by the decree, plus costs of foreclosure and sale, and the reasonable value of the mortgaged property, to be determined by the court in the decree upon the taking of evidence of such value. [Emphasis added.]
We recently have had occasion to examine the purpose of these statutes.
*1058 [This] statutory scheme responded to a haunting spectre of mortgage debtors defaulting on loans, losing their property in distress sales and encountering massive deficiencies. These statutes have protected debtors by sheltering unmortgaged property from potential execution until mortgaged property had been sold in a judicially supervised foreclosure. The statutes also have established a right to redeem the property sold and ... they have restricted the amounts of deficiency judgments after foreclosure sales.
Quintana v. Anthony, 109 Idaho 977, 980, 712 P.2d 678, 681 (Ct.App. 1985).
Here, First Security has proceeded by seeking claim and delivery of its personal property collateral, but has declined to redeem from Federal Land Bank's foreclosure of the real property. I.C. § 28-9-501(4) provides for an action solely upon the personal property security agreement. First Security admits that it must give "credit" for the fair market value of the real property pursuant to I.C. § 6-108 as interpreted in Eastern Idaho Production Credit, supra. See also Ferry v. Fisk, 54 Cal. App. 763, 202 P. 964 (1921) (voluntary credit may extinguish debt).[3] However, First Security contends it may still sue upon any remaining deficiency.
In Eastern Idaho Production Credit the Idaho Supreme Court held that redemption by a junior mortgagee satisfied the debt up to the fair market value of the property redeemed. Thus the court found I.C. § 6-108 applicable to junior mortgagees as well as to seniors. We are confronted with a similar question. Does our one-action statute, I.C. § 6-101, which bars a deficiency award to a nonforeclosing senior, similarly bar a deficiency to a nonredeeming junior?
Upon foreclosure by the senior, a junior mortgagee obtains a redemption right in place of the lien. I.C. § 11-401. To save the security interest the junior must redeem from the purchaser by paying the foreclosure sale price plus interest and certain costs. I.C. § 11-402. If redeemed, such property would be acquired subject to any other outstanding redemption rights. I.C. § 11-403.[4]
Whether a junior mortgagee must redeem to protect his deficiency rights appears to be an issue of first impression in Idaho. In McMillan v. United Mortgage Co., 84 Nev. 99, 437 P.2d 878 (1968), the Supreme Court of Nevada held that its one-action rule "does not apply to a soldout junior lienor where his security has been lost by foreclosure of a senior lienor." Id. 437 P.2d at 879. The court reasoned:
There is clearly no reason to compel a junior lienor to go through a foreclosure and sale when there is nothing left to sell.
The position of a junior lienor whose security is lost through a senior sale is different from that of a selling senior lienor. A selling senior can make certain that the security brings an amount equal to his claim against the debtor, or the fair market value, whichever is less, simply by bidding in for that amount. He need not invest any additional funds.
The junior lienor, however, is in no better position to protect himself than is the debtor. Either would have to invest additional funds to redeem or buy in at the sale. Equitable consideration favors placing the burden on the debtor, not only because it is his default which provokes the senior sale, but also because he has the benefit of his bargain with the junior lienor, who, unlike the selling senior, might otherwise end up with nothing.
*1059 The obvious purpose of the "One-action Rule" is to compel one who has taken a special lien to secure his debt to exhaust the secured property before having recourse to the general assets of the debtor.
Where, however, without his fault, the security has been lost by a foreclosure of the senior lienor, the policy of the law permits a personal action on the promissory note. [Citations omitted.]
Id. at 879. See also Roseleaf Corporation v. Chierighino, 59 Cal.2d 35, 27 Cal. Rptr. 873, 378 P.2d 97 (1963) (junior lienor not required to foreclose where security rendered valueless by private sale).[5] In each of these cases, the junior lienholder was allowed to seek a deficiency judgment, without first having to exercise its redemption right, because its security interest was rendered valueless as a result of the senior's foreclosure. This approach parallels the long-recognized rule in Idaho relating to security interests in personal property. That rule allows an action on the debt, without foreclosure, where a chattel mortgagee's security in personal property has become valueless. Gebrueder Heidemann, K.G. v. A.M.R. Corp., 107 Idaho 275, 688 P.2d 1180 (1984); Edminster v. Van Eaton, 57 Idaho 115, 63 P.2d 154 (1936). See also Annotation, Action on Secured Debt When Permissible, 108 A.L.R. 397 (1937).
Against this background, the question now before us is whether the exercise of a redemption right must always precede a deficiency judgment where as here the amount of a senior's lien is less than the judicially determined fair market value of the property. Obviously, in such a case there is an excess over the amount of the senior's lien to which the junior's lien remains attached. While the fair market value of the property here continues to be in dispute, either at $250,000 as fixed by the court in the initial joint foreclosure decree of April 15, 1985, or at some lesser amount as now contended by First Security ($112,000), there appears to be no dispute that the latter's security was not rendered "valueless" as a result of Federal Land Bank's foreclosure.
Under these circumstances, it seems reasonable that the junior lienholder should be required either to redeem to protect its security, or as suggested by First Security at oral argument in this case to give credit to the debtor for the difference between the amount realized by the senior mortgagee on the foreclosure sale, and the judicially determined fair market value of the property as of the date the junior's redemption right expired. Through such an approach the junior must decide whether it is economically practical to redeem, and if not, to give the debtor credit against any deficiency judgment for the amount the junior would have realized on a subsequent foreclosure sale after exercising its redemption right. This procedure would not prevent the junior mortgagee from pursuing a judgment for the deficiency balance and it would afford the debtor the same protection as if a redemption and subsequent foreclosure by the junior mortgagee had taken place. We believe that approach would be proper in this case.
Having concluded that First Security is not barred by its failure to redeem we turn next to the questions concerning the district court's denial of Stauffers' motion to set aside the amendment of the judgment.
II
Rule 60(b), I.R.C.P., provides a means for an aggrieved party to obtain relief from "a final judgment, order, or proceeding" directly from the trial court without resorting to an appeal. This rule is essentially the same as the federal rule; differing only regarding time limits. The party moving to have an order or judgment vacated or set aside bears the burden of proof. Puphal v. Puphal, 105 Idaho 302, 669 P.2d 191 (1983). The Stauffers allege excusable *1060 neglect, mistake or inadvertence under Rule 60(b)(1), and due process violations as grounds for setting aside the order amending the judgment. These allegations are supported by an affidavit. Although Stauffers admit they were served with First Security's motion to amend the judgment, they assert they should have been provided an opportunity to be heard on the motion to amend, before it was decided by the court.
First Security contends that the Stauffers waived their opportunity to be heard when, upon receipt of First Security's motion, the Stauffers did not request a hearing. Stauffers' attorney counters that he had become accustomed to motions being regularly placed on the court's hearing calendar and, if such a request were required, that the Stauffers' failure to notice the motion for hearing constitutes excusable neglect. Alternatively, they argue the court abused its discretion in failing to notice the motion for hearing under I.R.C.P. 6(e)(2).
It appears the trial court did not reach the merits of the Stauffers' Rule 60(b) motion. The court denied the motion from the bench, ruling that the decree had been amended upon discovery that a "joint" foreclosure could not be ordered as a matter of law. Therefore, the trial court also found it unnecessary to receive evidence offered by First Security to explain why it initially, and erroneously, believed the $250,000 value was proper. Upon this state of the record we intimate no opinion as to whether First Security should be bound by, or should be freed from, the $250,000 valuation. Our review is limited to (a) whether the expanded remedy sought by First Security was properly granted upon the ground advanced by the district court that the joint foreclosure was invalid; and (b) whether the relief from this remedy sought by the Stauffers was properly denied.
Where discretionary grounds are invoked for relief from a judgment, we defer to the lower court unless discretion was abused. But where nondiscretionary grounds are asserted the question presented is one of law upon which the appellate court exercises free review. Knight Insurance, Inc. v. Knight, 109 Idaho 56, 704 P.2d 960 (Ct. App. 1985).
A
We first examine the court's stated grounds for granting First Security its expanded remedy. As noted, it appears the trial court believed a simultaneous foreclosure of real property mortgages by senior and junior mortgagees is contrary to Idaho's foreclosure scheme. Although the senior lienholder, Federal Land Bank, did not object to the order for simultaneous foreclosure, the trial judge reasoned from the bench,
I have set the value, haven't I? And I have entered an order saying that First Security is not foreclosing. And I think it's an appropriate order because I don't think I can force [a joint foreclosure on] the first mortgagee. I don't know how you would operate under it.
The question of the propriety of a joint foreclosure came to the forefront only at the hearing on Stauffers' motion to set aside the amendment to the judgment. It was not argued extensively in the lower court.
We are unable to determine why the court believed a joint foreclosure was impractical or impossible. Ordinarily, a junior mortgagee may foreclose first, with the purchaser taking subject to the senior's lien; or the junior could await foreclosure by the senior and receive a right of redemption in exchange for his lien. I.C. § 11-401. However, where acceptable to the mortgagees, we perceive no impediment to ordering a simultaneous foreclosure consistent with our statutory provisions. In such a case the foreclosure sale would result in each party being reimbursed by priority to the extent of the proceeds, neither would receive a redemption right, and each would receive a deficiency to the extent his debt was not satisfied, with appropriate credit being given for the reasonable value of the security.
*1061 The Stauffers point to cases in other jurisdictions where joint foreclosures have been upheld by the courts. E.g., Western Land & Cattle Co. v. National Bank of Arizona, 28 Ariz. 270, 236 P. 725 (1925); Horn v. Indianapolis Nat. Bank, 125 Ind. 381, 25 N.E. 558 (1890); Burwell and Morford v. Seattle Plumbing Supply Co., 14 Wash.2d 537, 128 P.2d 859 (1942) (junior cannot redeem following joint foreclosure). Apparently joint foreclosure is not an uncommon practice. In certain cases other states require such a remedy. See Hackman, Statutory Reduction Rights, 3 WASH.L.REV. 177, 187 (1928).
We believe the joint foreclosure remedy sought by First Security was within the power of the court.
The policy of the law is to make the property bring its full value, and to discourage persons from bidding less than the fair value of the property. It is also the intention of the law to do justice to interested parties, by securing the fair value of the property at one sale, and thus prevent the annoyance and expense of numerous sales; and numerous sales may follow where there are many successive redemptions. .. .
Horn v. Indianapolis National Bank, 125 Ind. 381, 25 N.E. 558, 562 (1890). As did the Indiana court, we believe a joint foreclosure would satisfy these purposes without prejudice to any party. This procedure would be comparable to the result provided by our legislature for security interests in personal property. See I.C. § 28-9-504. Therefore, we hold that the trial court erred in concluding that Stauffers' motion should be denied to avoid reinstating an invalid judgment. A joint foreclosure judgment would not be invalid.
B
We now turn to whether Stauffers' Rule 60(b) motion for relief should have been decided on its own merits. Our examination of the record reveals that the Stauffers were served by mail with First Security's motion to amend the judgment. This motion sought "an order of the court dismissing the Decree of Foreclosure in favor of Plaintiff and against Defendants." Contrary to the requirement of 7(b)(1), I.R.C.P, First Security's motion stated no particular grounds.[6] The motion was granted without hearing. The Stauffers argue that failure to provide such a hearing was a violation of due process, affording a basis for granting relief under Rule 60(b), clause (b).[7] We agree.
Notice and a meaningful opportunity to be heard are fundamental to the due process guaranteed by the United States and Idaho constitutions. Rudd v. Rudd, 105 Idaho 112, 666 P.2d 639 (1983). A party has a "property interest" in a judgment, of which the owner may not be deprived without due process. Curtis v. Siebrand Bros. Circus & Carnival Co., 68 Idaho 285, 291, 194 P.2d 281, 284 (1948). The doctrine of res judicata provides the losing party, as well as the prevailing party, *1062 with an interest in the finality of a judgment. These rights adhere to defaulting parties as well as those who have contested an action. Occidental Life Ins. Co. v. Niendorf, 55 Idaho 521, 44 P.2d 1099 (1935). Notice to defaulting defendants of a motion to vacate the judgment is required unless the judgment is void on its face. Id. at 529, 44 P.2d at 1101. The purpose of notice when a judgment is opened is to provide "that the court can make a full determination of the equities involved." Keane v. Allen, 69 Idaho 53, 61, 202 P.2d 411, 415 (1949).
Here, Stauffers were in the throes of insolvency. They saw no reason to contest the result as originally formulated. However, they did have a significant interest in maintaining the protection provided by the $250,000 value assigned to this property in the original judgment.
With respect to Richard and Colleen Stauffer, who defaulted, First Security cites I.R.C.P. 41(a)(1) for the proposition that a plaintiff has the right to dismiss an action or count at will at any time before an answer is filed. First Security contends that its motion to amend the judgment was comparable to a motion to dismiss. We disagree.
Once a judgment has been entered and notice provided to the parties, all parties have an interest in maintaining it. A party in default does not waive this interest. To obtain amendment of the judgment, as First Security was aware and intended, is one means of avoiding the binding effects of that judgment. Judgment had been entered and a decree issued. The Stauffers were entitled to rely upon that judgment.
Rule 7(b)(3) of the Idaho Rules of Civil Procedure provides that a motion may be denied without hearing. We hold that under I.R.C.P. 59(e) the complementary proposition is also true. A motion to amend a judgment in a manner which would be prejudicial to another party, may not be granted without notice and an opportunity for hearing. To do so contravenes the very basis of due process and finality of judgments.
First Security contends that a hearing was in fact provided following the Stauffers' motion to set aside the amendment. At that hearing counsel for the Stauffers came prepared to argue that his clients were entitled to a hearing on First Security's Rule 59(e) motion and possibly to contest First Security's unknown grounds for that motion. Instead Stauffers' counsel found himself faced with a new theory for amendment raised sua sponte by the court, that of a void or invalid judgment. Counsel was unprepared to argue this new point of law. The motion to set aside the amendment was denied from the bench on the basis of an erroneous theory of law. Such a proceeding did not constitute the hearing on the merits of First Security's motion sought by the Stauffers. The Stauffers have not yet had a meaningful opportunity to resist this motion on the grounds urged by the bank.
Of course, because the appeal from denial of a Rule 60(b) motion may not substitute for a direct appeal, an error of law alone ordinarily is not sufficient to justify setting aside an order or judgment. Wagner v. United States, 316 F.2d 871 (2d Cir.1963). Where an appeal from the judgment is the proper remedy, Rule 60(b)(6) may not be used as an end-run around the time limits of I.A.R. 14. However, clause 6 of the rule is applicable whenever "such action is appropriate to accomplish justice." Klapprott v. United States, 335 U.S. 601, 615, 69 S.Ct. 384, 390, 93 L.Ed. 266, modified, 336 U.S. 942, 69 S.Ct. 384, 93 L.Ed. 1099 (1949). But see Ackermann v. United States, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207 (1950) (circumstances found not "extraordinary"). See generally 7 MOORE'S FED.PRACTICE ¶ 60.27[2] (2d ed. 1985); 11 WRIGHT & MILLER, FED. PRACTICE AND PROCEDURE: Civil § 2864 (1973). In Fleming v. Gulf Oil Corporation, 547 F.2d 908 (1977), the Tenth Circuit held an ex parte dismissal at the behest of the defendant to constitute grounds for Rule 60(b)(6) relief. The court found the lack of a fair opportunity to be heard particularly unjust.
*1063 We find the unique circumstances in this case equally compelling. The Stauffers were deprived without a hearing of the protection afforded by a final decree when First Security's motion to amend the judgment was granted. Upon seeking relief directly from the district court, the Stauffers' counsel was confronted by an unexpected, novel and erroneous justification for the judgment amendment. The Stauffers have alleged facts appropriate and sufficient for obtaining the relief requested. Justice will best be served by granting their request for a hearing concerning First Security's motion.
Having found for the Stauffers under I.R.C.P. 60(b)(6), we need not reach the merits of their theory of inadvertence and excusable negligence. First Security's Rule 59(e) motion was addressed to the discretion of the court. See Lowe v. Lym, 103 Idaho 259, 646 P.2d 1030 (Ct.App. 1982). The trial court has not ruled on the merits of this motion after hearing the position of both parties. Therefore, we vacate the order allowing amendment of the judgment and the order denying the Stauffers' motion to vacate the order amending the judgment. We remand to the district court for a hearing on First Security's motion to amend the judgment. In the meantime, the judgment prior to amendment is hereby reinstated.
Costs to appellants. No fees awarded.
BURNETT and SWANSTROM, JJ., concur.
NOTES
[1] A copy of the sale agreement between these parties was not included in the record in this appeal. A report issued by a title insurance company in 1984, however, shows Warren and Alta as record title owners of the property and discloses that the Stauffers' land sale agreement was recorded in Butte County in 1978.
[2] The record before us contains no evidence to support this finding.
[3] Thus we need not decide whether credit must be given when a mixed-property secured creditor proceeds only against the personal property. See generally Leipziger, Deficiency Judgments in California. The Supreme Court Tries Again, 22 U.C.L.A. L.REV. 753 (1975) (addressing this issue under California law).
[4] Regarding deeds of trust, Idaho provides a similar statutory redemption right to the junior lienor following recording of a notice of default by the senior. I.C. § 45-1506. Comparable limits are also placed upon deficiency judgments. See I.C. § 45-1512, and, e.g., Alpine Villa Development Co., Inc. v. Young, 99 Idaho 851, 590 P.2d 578 (1979).
[5] The Nevada court does not apply this exception where the loss of security is due to the junior lienor's own action. See Keever v. Nicholas Beers Co., 96 Nev. 509, 611 P.2d 1079 (1980) (junior lienor released lien in exchange for consideration from senior lienor).
[6] Although particular grounds should be stated in support of any written motion, we do not find this flaw fatal since a Rule 59(e) motion may also serve to enable a trial judge to reconsider his judgment and thus avoid an appeal. Clipper Exxpress v. Rocky Mountain Motor Tariff, 690 F.2d 1240 (9th Cir.1982), cert. denied, 459 U.S. 1227, 103 S.Ct. 1234, 75 L.Ed.2d 468 (1983). The trial court was not restricted to any specific contentions of error raised by First Security and could correct any error which came to its attention because of the motion. Continental Casualty Co. v. American Fidelity and Cas. Co., 186 F. Supp. 173 (S.D.Ill.), modified 190 F. Supp. 236 (S.D.Ill. 1959), aff'd, 275 F.2d 381 (7th Cir.1960).
[7] Under the prior statute, I.C. § 5-905, the alleged mistake could not be one of law. Thomas v. Stevens, 78 Idaho 266, 300 P.2d 811 (1956). Although mistake or inadvertence may now encompass an error of law in the federal courts, see 7 MOORE'S FEDERAL PRACTICE ¶ 60.22[3] (2d ed. 1985), we believe such an error is more properly addressed under clause (6) of the Rule instead of clause (1), as the application of the latter to such mistakes is not clear. Id., WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE: Civil § 2858 (1973). See also Puphal v. Puphal, supra; Gro-Mor, Inc. v. Butts, 109 Idaho 1020, 712 P.2d 721 (Ct.App. 1985). Neither is clause (4) applicable. An error of law alone, unless jurisdictional, does not void a judgment. First Sec. Bank v. Neibaur, 98 Idaho 598, 605 n. 4, 570 P.2d 276, 283 (1977).
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956 P.2d 215 (1998)
153 Or. App. 66
STATE of Oregon, Respondent,
v.
Deangelo Leroy TURNER, Appellant.
93-02-30863; CA A92779.
Court of Appeals of Oregon.
Argued and Submitted May 28, 1997.
Decided March 18, 1998.
Diane L. Alessi, Deputy Public Defender, argued the cause for appellant. With her on the brief was Sally L. Avera, Public Defender.
Kaye E. Sunderland, Assistant Attorney General, argued the cause for respondent. With her on the brief were Hardy Myers, Attorney General, and Virginia L. Linder, Solicitor General.
*216 Before RIGGS, P.J., and DEITS, C.J.,[*] and LANDAU, J.
LANDAU, Judge.
Defendant appeals a judgment of conviction on three counts of murder and one count each of first-degree rape and first-degree sexual abuse. His principal contention on appeal is that the trial court erred in permitting the state to try its case against him jointly with its case against codefendant Ronald Simmons. According to defendant, he was seriously prejudiced by the trial court's failure to order severance of the two trials and is entitled to reversal on that basis. We affirm.
The police found the body of Erinn Radke, who apparently had been stabbed to death. Investigation revealed that she had been killed in a nearby apartment rented by Shanta Turner. Further investigation revealed that Turner's brother, defendant, and Ronald Simmons had been seen with Radke at a local restaurant shortly before the discovery of Radke's body.
When questioned by police, defendant gave several different versions of the events leading up to Radke's death. Ultimately, he told the police that he and Simmons met Radke at the restaurant and eventually went to his sister's apartment. There, he said, he raped Radke in the back bedroom. He said that he then went into the living room and tried to sleep, only to be disrupted a short time later by the sound of Radke screaming. Defendant said that he ran into the bedroom and found Simmons standing over Radke's body with a knife in his hand. Simmons, he said, told him that he had killed Radke because she might have told the authorities that she had been raped. When questioned by police, Simmons initially denied any criminal conduct. His story, too, then changed. Ultimately, he said that it was he who had consensual sex with Radke, that it was he who went into the living room to rest and that, when he heard screams coming from the bedroom, it was defendant who was standing over Radke's body with knife in hand.
Defendant and Simmons were jointly indicted for multiple counts of aggravated murder, rape, sodomy and sexual abuse in the first degree. Before trial, defendant moved for severance of his trial, arguing that he could not receive a fair trial as a codefendant with Simmons. The trial court denied the motions, and the trial proceeded against both defendant and Simmons.
At trial, the state took the position that both defendant and Simmons were responsible for Radke's death and that both were guilty of the charges against them. Defendant took the position that Simmons killed Radke. Simmons, in turn, attempted to prove that defendant committed the murder. During his opening statement, Simmons said that defendant had lied to the police, that he had changed his story too often to be believed and that the evidence did not support his version of the events. During cross-examination of several of the state's witnesses, Simmons stressed inconsistencies in various statements that defendant had made to the police. When defendant attempted to introduce the testimony of two witnesses who, he claimed, would have testified that Simmons confessed to the murder, Simmons objected, and the trial court sustained the objection.
Simmons took the stand and testified that defendant committed the murder and that he had committed no wrong. During the examination of Simmons, the trial court received a note from a juror who complained that defendant apparently had been making eye contact in an attempt to communicate to the juror that Simmons was not telling the truth. The trial court examined the juror, and defendant moved to strike him as a juror and renewed his motion to sever. Simmons opposed the motion. Meanwhile, the state, in "an exercise of caution," agreed that the juror should be excused. The trial court found that the juror was not prejudiced in any way from the eye contact, that the juror clearly understood his obligation to judge the case impartially on the evidence and, on the basis of those findings, concluded that the juror need not be excused.
*217 On cross-examination, the state attempted to impeach Simmons's testimony, asking whether he had conspired to shift responsibility for the murder to defendant by persuading another individual, Lavell Matthews, to testify falsely that defendant had confessed. Simmons denied that he had done so. The state called Matthews as a rebuttal witness to prove that Simmons had attempted to "plant" a confession by defendant. Defendant requested and received a jury instruction that "statements by Mr. Matthews attributed to [defendant] may only be used in deciding the charges against Mr. Simmons."
In its closing argument, the state emphasized that it was not asking the jury to decide which of the two codefendants was guilty of the crimes charged. Regardless of who held the knife, the state argued, both defendants had equal involvement in causing the victim's death. Defendant adhered to his version of the events, arguing that is was Simmons who was guilty. Simmons, in turn, attempted to shift the blame to defendant.
The jury ultimately found defendant guilty of murder, rape and sexual abuse and found Simmons guilty of the lesser included offense of manslaughter. On appeal, defendant assigns error to the trial court's failure to sever the trial. He first contends that, because his and Simmons's defenses were "mutually exclusive," it was per se inappropriate to try them together. In the alternative, he argues that, as a result of its decision to try the two together, the court committed a number of errors that would not have happened had the cases been tried separately. Specifically, he contents that, (1) Simmons was able to argue in his opening statement essentially as a second prosecutor; (2) the trial court sustained Simmons's objection to the hearsay testimony of defendant's witnesses who would have testified that Simmons confessed to the murder; (3) the trial court refused to excuse a juror whom defendant believed to be biased against him even though the state agreed that the dismissal was appropriate; (4) the trial court permitted the state to call Matthews as a rebuttal witness to impeach Simmons with testimony that was inherently prejudicial to defendant; (5) in closing argument, Simmons again acted essentially as a second prosecutor in disputing defendant's version of the events; and (6) the jury was confused about the extent to which it could consider evidence against Simmons as evidence against defendant.
The state argues that, under ORS 136.060, jointly charged defendants "shall be tried jointly" unless the court concludes before trial that it is "clearly inappropriate" to do so. According to the state, there is no per se rule that it is "clearly inappropriate" to conduct a joint trial in a case in which defendants assert mutually antagonistic or inconsistent defenses. To the contrary, the state argues, severance is required only when defendant demonstrates that a joint trial would violate an applicable statute or conflict with a constitutional provision. The state contends that in this case defendant has failed to demonstrate that any of the asserted errors that occurred at trial, alone or in combination, satisfied that substantial showing.
ORS 136.060 governs the disposition of motions to sever criminal trials:
"(1) Jointly charged defendants shall be tried jointly unless the court concludes before trial that it is clearly inappropriate to do so and orders that a defendant be tried separately. In reaching its conclusion the court shall strongly consider the victim's interest in a joint trial.
"(2) In ruling on a motion by a defendant for severance, the court may order the prosecution to deliver to the court for inspection in camera any statements or confessions made by any defendant that the prosecution intends to introduce in evidence at the trial."
We have had few occasions to address the meaning of that statute. In State v. Umphrey, 100 Or.App. 433, 786 P.2d 1279, rev. den. 309 Or. 698, 790 P.2d 1141 (1990), we explained that ORS 136.060
"places substantial limitations on defendants being tried separately, by providing that jointly charged defendants `shall be tried jointly' unless the court determines that it is `clearly inappropriate.'"
Id. at 437, 786 P.2d 1279. The defendant in that case complained that he had demonstrated substantial prejudice that resulted *218 from the introduction of an inculpatory confession of a codefendant and that such prejudice made a joint trial clearly inappropriate. We disagreed:
"ORS 136.060(1) does not provide for severance on a showing of prejudice. There is the possibility of prejudice in any joint trial. * * * [T]he people chose to require joint trials, despite that possibility.
"We find no basis to conclude that a joint trial was `clearly inappropriate.' The trial court did not violate the applicable statutory provisions nor conflict with any constitutional provisions."
Id. at 438, 786 P.2d 1279.
We again addressed the application of ORS 136.060 in State v. Coleman, 130 Or. App. 656, 883 P.2d 266 (1994), rev. den. 320 Or. 569, 889 P.2d 1300 (1995). In that case, the defendant argued that, because there was little evidence linking him to the activities of his codefendant, the jury likely was confused about the defendant's own guilt, and that likelihood of confusion prejudiced his opportunity to obtain a fair trial and justified severing his trial from that of his codefendant. We rejected the argument, holding that "such potential prejudice, without more, cannot justify severance." Id. at 661, 883 P.2d 266. Because the decision to try the two defendants jointly "did not violate any statute or conflict with any constitutional provision," the joint trial was not "clearly inappropriate" within the meaning of ORS 136.060(1). Coleman, 130 Or.App. at 662, 883 P.2d 266.
Thus, in examining whether joinder is "clearly inappropriate," our cases have focused on whether joinder either violates a pertinent statute or contravenes the state or federal constitution. Substantial prejudice, by itself, is insufficient.
Defendant contends that, in some cases, the likelihood of substantial prejudice is so strong that severance should be required as a matter of law. In particular, he contends that, when two defendants assert mutually exclusive defenses, neither can obtain a fair trial if tried jointly because the jury necessarily must believe one defendant or the other. According to defendant, in such circumstances a fair trial is impossible, because the jury will be inclined merely to choose which defendant is guilty, regardless of whether the state has established the guilt of either beyond a reasonable doubt. Defendant observes that a number of decisions from other jurisdictions suggest that separate trials may be required when jointly indicted defendants rely on mutually exclusive defenses. See, e.g., United States v. Berkowitz, 662 F.2d 1127, 1134 (5th Cir.1981) (severance required where defendants assert defenses that are "antagonistic at their core," because a substantial possibility exists that the jury will infer guilt from the conflict alone); Hill v. State, 481 So.2d 419, 425 (Ala. Crim.App.1985) (severance required when defenses are "so inconsistent that the jury would have to believe one defendant at the expense of the other"); State v. Brown, 118 N.J. 595, 573 A.2d 886, 891 (N.J.1990) (severance required when defendants assert defenses that "are antagonistic at their core"); People v. Cardwell, 78 N.Y.2d 996, 575 N.Y.S.2d 267, 268, 580 N.E.2d 753, 754 (1991) (severance required when mutually exclusive defenses create a danger "that the conflict alone would lead the jury to infer defendant's guilt"); see also Wade R. Habeeb, Annotation, Antagonistic Defenses as Ground for Separate Trials of Codefendants in Criminal Case, 82 A.L.R.3d 245 (1978 & 1995 Supp.). The state replies that those decision are inapposite, because they do not apply Oregon's joinder statute, which favors joinder more strongly than does the law of other jurisdictions.
At the outset, we note that it is not entirely clear that defendant's and Simmons's defenses were "mutually exclusive." The state attempted to prove that both were guilty. The jury was not necessarily put in the position of determining which defendant was telling the truth. It could have believed or disbelieved portions of either defendants' testimony and convicted both of the same offenses.
In any event, we decline to adopt the per se rule of severance that defendant proposes. To begin with, it is derived from cases that apply rules that are different from ORS 136.060. The federal cases, for example, are *219 based on Federal Rules of Criminal Procedure 8(b) and 14, which permit defendants to be charged together if the defendants are alleged to have participated in the same acts or transactions constituting the offense and which permit courts to order separate trials "[i]f it appears that a defendant or the government is prejudiced." In the state court decisions on which defendant relies, the applicable rules are similarly more permissive about joinder in criminal cases. See, e.g., Brown, 573 A.2d at 890 (citing applicable New Jersey rule of practice governing severance as permitting courts to order severance "if it appears that a defendant or the State is prejudiced" by joint trial). ORS 136.060, in contrast, requires joinder unless doing so is "clearly inappropriate."
Moreover, even under the federal standard, no per se rule applies. In Zafiro v. United States, 506 U.S. 534, 113 S.Ct. 933, 122 L.Ed.2d 317 (1993), the Court declined to adopt a "bright-line rule, mandating severance whenever codefendants have conflicting defenses." 506 U.S. at 538, 113 S.Ct. at 937-38. "Mutually antagonistic defenses," the Court held, "are not prejudicial per se." Id. The court instead held that, in accordance with Federal Rules 8(b) and 14, trial courts should grant a motion to sever
"only if there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence. * * * The risk of prejudice will vary with the facts in each case * * *."
Id., at 539, 113 S.Ct. at 938.
We turn, then, to whether it was "clearly inappropriate" under ORS 136.060(1) to try defendant and Simmons jointly. Defendant makes no argument that, by declining to sever, the trial court violated any particular statute or constitutional provision. Defendant does argue that events that occurred during the trial itself violated various rules of evidence or constitutional provisions and that those violations demonstrate why it was clearly erroneous for the court to have failed to grant defendant's motion to sever. When we review a trial court's ruling on a motion to sever, however, we examine the decision in the light of the arguments asserted and circumstances pertaining at the time the pretrial motion was made. As we explained in State v. Quintero, 110 Or.App. 247, 252 n. 6, 823 P.2d 981 (1991), clarified on recons. 114 Or.App. 142, 834 P.2d 496, rev. den. 314 Or. 392, 840 P.2d 710 (1992):
"`Appellate review * * * in this context (a motion to sever) should center on the circumstances as they appeared at the time the motion was ruled on. It would be improper to evaluate the decision post facto, that is, in the light of all the facts which were adduced at trial.'"
(Quoting State v. Tyson, 72 Or.App. 140, 143 n. 3, 694 P.2d 1003, rev. den. 299 Or. 37, 698 P.2d 965 (1985).) Errors that occur during trial may provide grounds for a mistrial motion or for other relief, but they cannot provide the basis for a motion to sever. Id. at 251 n. 4, 823 P.2d 981. We conclude therefore that defendant has failed to demonstrate that it was clearly inappropriate within the meaning of ORS 136.060(1) to try him jointly with Simmons.
Defendant asserts numerous other assignments of error. We have considered each of them and reject them without further discussion.
Affirmed.
NOTES
[*] Deits, C.J., vice Leeson, J.
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17-1130-cr
United States v. Zheng (Huang)
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a document
filed with this Court, a party must cite either the Federal Appendix or an electronic database
(with the notation “summary order”). A party citing a summary order must serve a copy of it
on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 20th day of March, two thousand eighteen.
PRESENT: JOSÉ A. CABRANES,
SUSAN L. CARNEY,
Circuit Judges,
LAWRENCE J. VILARDO,
District Judge.1
UNITED STATES OF AMERICA,
Appellee,
v. 17-1130-cr
KAI HUAN HUANG, A/K/A SHEN SHEN,
Defendant-Appellant.2
______________________________________________
1
Judge Lawrence J. Vilardo, of the United States District Court for the Western District of New
York, sitting by designation.
2
The Clerk of Court is respectfully requested to amend the official caption as set forth above.
1
FOR GOVERNMENT-APPELLEE: Susan Corkery & Nadia E. Moore, for
Richard P. Donoghue, United States Attorney
for the Eastern District of New York,
Brooklyn, NY.
FOR DEFENDANT-APPELLANT: Malvina Nathanson, New York, NY.
Appeal from a judgment of the United States District Court for the Eastern District of New
York (Carol B. Amon, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the April 11, 2017 judgment of the District Court is AFFIRMED.
Defendant-appellant Kai Huan Huang (“Huang”) appeals from a judgment of conviction
following a jury trial in which he was convicted of an extortion conspiracy and attempted extortion,
in violation of 18 U.S.C. § 1951. He was sentenced to 70 months’ imprisonment and three years’
supervised release, and he was ordered to pay $3,000 in restitution. We assume the parties’ familiarity
with the underlying facts, the procedural history of the case, and the issues on appeal.
Huang’s criminal activity stemmed from his involvement in a conspiracy to extort and attempt
to extort the owner of a gambling parlor who owed money to the owner of a local money club. A
money club is an entity whose members regularly contribute funds to a pool in order to have the
opportunity to take a loan from the pool when necessary. When a member takes funds from the pool,
he must, at regular intervals, pay back a portion of the loan that he previously received from the group.
On May 28, 2015, Huang and his associates physically assaulted the alleged debtor and damaged his
place of business in an attempt to force the debtor to pay the money owed.
On appeal, Huang argues that his sentence of 70 months’ imprisonment was substantively
unreasonable. We disagree.
We review a sentence for substantive reasonableness under a “deferential abuse-of-discretion
standard.” Gall v. United States, 552 U.S. 38, 41 (2007); see also United States v. Broxmeyer, 699 F.3d 265,
278 (2d Cir. 2012) (explaining that “our standard is reasonableness, a particularly deferential form of
abuse-of-discretion review” (internal quotation marks omitted)). A sentence is substantively
unreasonable “only if it cannot be located within the range of permissible decisions.” United States v.
Bonilla, 618 F.3d 102, 108 (2d Cir. 2010) (internal quotation marks and citations omitted). As we have
observed before, “in the overwhelming majority of cases, a Guidelines sentence will fall comfortably
within the broad range of sentences that would be reasonable in the particular circumstances.” United
2
States v. Fernandez, 443 F.3d 19, 27 (2d Cir. 2006) (abrogated on other grounds by Rita v. United States,
551 U.S. 338, 364 (2007)).
Upon review of the record, we conclude that Huang’s below-Guidelines sentence of 70
months’ imprisonment was substantively reasonable. Huang claims that the District Court did not
adequately consider (1) his lack of prior criminal history and his allegedly minimal conduct during the
extortion attempt; (2) the victim’s allegedly minimal injuries, (3) the alleged lack of evidence that
Huang was a member of a criminal organization; and (4) the deportation consequences following
Huang’s sentence. The record reflects otherwise. The District Court carefully considered Huang’s
criminal history and family circumstances, as well as his role in the offense. It correctly calculated
Huang’s Guidelines Range to be 78 to 97 months, and discussed nearly all of the Section 3553(a)
factors before deciding to sentence defendant to a term below the Guidelines range. Huang’s sentence
is in no way substantively unreasonable.
CONCLUSION
We have considered Huang’s remaining arguments and find them to be without merit.
Accordingly, we AFFIRM the judgment of the District Court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
3
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273 F.Supp.2d 14 (2002)
DSMC, INC., Plaintiff,
v.
CONVERA CORP., Defendant., and
NGT LIBRARY, Intervenor-Applicant
No. CIV. 01-2284(EGS).
United States District Court, District of Columbia.
August 29, 2002.
*15 *16 H. Jay Speigel, Esq., Mount Vernon, VA.
Julie Rubin Goldberg, Esq., Astrachan, Gunst, Goldman, and Thomas, Baltimore, MD.
James S. Kurz, Esq., Reed, Smith, Hazel & Thomas LLP, Falls Church, VA.
Anthony Herman, Esq., Covington & Burling, Washington.
MEMORANDUM OPINION
SULLIVAN, District Judge.
Plaintiff DSMC, Incorporated ("DSMCi") filed this lawsuit against defendant Convera Corporation alleging violations of the Uniform Trade Secret Act and the common law torts of civil conspiracy and unjust enrichment. DSMCi later amended its complaint to include allegations of violations of federal copyright laws. The claims against Convera are related to a contract between DSMCi and National Geographic Television Library, Inc. ("NGTL"), as a result of which, alleges DSMCi, Convera was allowed to access plaintiff's trade secrets.
The case comes before the Court on Convera's motion to dismiss for improper venue and/or to transfer the case to the Eastern District of Virginia, Convera's motion to dismiss for failure to state a claim and/or for a more definite statement, NGTL's motion to intervene, NGTL's motion to stay all proceedings pending arbitration between DSMCi and NGTL, and Convera's motion to compel arbitration. Upon review of the many motions filed in this case, the oral argument of counsel, and the applicable statutory and case law, this Court will GRANT NGTL's motion to intervene, DENY Convera's motions to dismiss, DENY Convera's motion to compel arbitration, and DENY NGTL's motion to stay these proceedings.
*17 BACKGROUND
DSMCi is a Maryland corporation with its principal place of business in Beltsville, Maryland. DSMCi is engaged in the business of software and systems integration and employs its proprietary software, architecture, and techniques to provide digitizing, cataloguing, archiving, and hosting services to media and non-media organizations that possess extensive audio, video and picture libraries. Convera is a Delaware corporation with its principal place of business in Vienna, Virginia. Convera, a far larger corporate entity than DSMCi, is a direct competitor of DSMCi in the design, development, marketing, implementation and support of products and services pertaining to the digitizing and management of audio, video, and picture libraries.
In September of 2000, DSMCi entered into a contract with NGTL that was designed to preserve and organize NGTL's unique film footage archive. NGTL is a subsidiary of National Geographic Television, which produces documentary television programs related to nature, natural history, world cultures, science, exploration, and other topics consistent with the education and conservation mission of its parent organization, the National Geographic Society. The contract required DSMCi to convert NGTL's video footage to digital format, and create a mechanism for organizing and searching that content, among other things. The contract required DSMCi to support the project through July of 2001.
The contract between DSMCi and NGTL included a confidentiality provision designed to protect DSMCi's trade secrets. DSMCi contends that it has spent over ten thousand hours and a million dollars developing valuable and proprietary trade secrets which include the software, architecture and functionality it used in the NGTL project.
DSMCi alleges that in May 2001, it determined that NGTL had violated the confidentiality agreement by providing unauthorized access to its trade secret information to Convera. DSMCi alleges that at least as early as May 2001 NGTL and Convera conspired to allow Convera to copy the software and architecture of the digital media system designed for NGTL by DSMCi. Among other things, DSMCi alleges that NGTL provided user name and access to the system to an affiliate of Convera. As a result, DSMCi alleges, Convera was able to reverse engineer and copy DSMCi's trade secrets.
Both NGTL and Convera deny DSMCi's allegations. NGTL responds that DSMCi's performance was continually deficient and consistently missed performance deadlines. NGTL contends that as a result of DSMCi's deficient performance, NGTL decided to not renew the contract and transferred the hosting function to another vendor. In the summer of 2001 NGTL informed DSMCi that it would be transferring the contract to Convera.
The contract between DSMCi and NGTL contained a provision requiring arbitration of any contract disputes. On October 31, 2001, after initial attempts at mediation, DSMCi filed a formal arbitration demand on NGTL. That arbitration is ongoing.
On November 1, 2001, DSMCi filed this lawsuit against Convera, alleging wrongful appropriation of trade secrets, unjust enrichment, and civil conspiracy. Convera responded by filing a motion to dismiss for improper venue or in the alternative to transfer the case to the Eastern District of Virginia. Convera also filed a motion to dismiss for failure to state a claim or in the alternative for a more definite statement. On December 17, 2001, NGTL filed a motion to intervene and a motion to stay this proceeding pending the outcome of the *18 arbitration between NGTL and DSMCi. On February 28, 2002 plaintiff amended its complaint to include claims under federal copyright laws. Convera renewed its motions to transfer and to dismiss.
This Court heard argument on the pending motions on April 9, 2002. At that hearing the Court identified further issues to be briefed by the parties and the intervenor-applicant. After fully briefing those issues, on April 25, 2002, defendant Convera filed a motion to compel arbitration. The briefing of that motion was completed on May 10, 2002.
During the course of this litigation, despite the fact that this Court had not yet ruled on defendants' motions to transfer or dismiss, the parties engaged in discovery. Several discovery motions are also pending before this Court. On March 29, 2002, this Court ordered all discovery stayed until further Order of this Court. Despite this Order, on May 30, 2002 defendant filed a motion to compel discovery, which this Court promptly denied in light of the stay.
DISCUSSION
I. Defendant Convera's Motion to Dismiss for Improper Venue and/or Transfer
Plaintiff's amended complaint includes the following five claims: 1) Misappropriation of Trade Secrets in violation of the D.C.Code; 2) the common law tort of Civil Conspiracy; 3) the common law tort of Unjust Enrichment;[1] 4) the federal Copyright Act; 5) the federal Digital Millennium Copyright Act. Defendant Convera has moved to dismiss all of these claims for lack of venue pursuant to 12(b)(3), and in the alternative to transfer the case to the Eastern District of Virginia.
Which federal venue statute applies depends on the basis for this Court's jurisdiction. This Court has jurisdiction over plaintiff's first two claims by virtue of diversity of citizenship of the parties, as DSMCi is a Maryland corporation with its principal place of business in Maryland and Convera is a Delaware corporation with its principle place of business in Virginia. The other two claims arise under federal statutes.
A. Diversity Claims
Because some but not all of plaintiff's claims arise under diversity jurisdiction, the venue provision at 28 U.S.C. § 1391(b) applies. That statute states:
A civil action wherein jurisdiction is not founded solely on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which any defendant may be found, if there is no district in which the action may otherwise be brought.
28 U.S.C. § 1391(b). With respect to corporations, the venue statute also states: "a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." § 1391(c).
DSMCi argues that this Court has venue over its diversity claims against Convera by virtue of the Court's personal jurisdiction over Convera. DSMCi argues further *19 that this Court has personal jurisdiction, both because Convera has waived any challenge to personal jurisdiction and because of Convera's contacts with the District of Columbia. Convera responds that it has not waived jurisdiction because it previously brought to this Court's attention its "disagreement" with DSMCi's personal jurisdiction arguments.
This Court has personal jurisdiction over Convera by virtue of Convera's waiver. See Fed.R.Civ.P. 12(g) and (h). Convera's failure to move to dismiss for lack of personal jurisdiction is fatal. See Simpkins v. District of Columbia Govt., 108 F.3d 366, 368 (D.C.Cir.1997). However, this Court does not have venue simply by virtue of this waiver and must make a separate inquiry into whether personal jurisdiction exists.
The venue statute states "a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." § 1391(c) (emphasis added). This language requires an independent inquiry into whether personal jurisdiction was appropriate at the time the plaintiff filed the lawsuit, not as of the time defendant failed to object to jurisdiction. At least one District Court has interpreted this statute to require an independent assessment of jurisdiction. See Wine Markets Intern., Inc. v. Bass, 939 F.Supp. 178 (E.D.N.Y.1996)(holding that in determining whether party would be subject to personal jurisdiction in state, for purpose of ruling on motion to transfer venue, Court should assess situation as it existed when complaint was filed, irrespective of subsequent consent or waiver). Plaintiff has cited two unpublished district court cases that denied venue challenges based solely on a corporation's waiver of objection to personal jurisdiction. See Chavis v. A-1 Limousine and Home State Ins., 1998 WL 78290, at *3 (S.D.N.Y.1998); SoliTech, Inc. v. Halliburton Co., 1993 WL 315358, at *2 (E.D.Mich.1993). At least one other District Court has held this as well: Zumbro, Inc. v. California Natural Products, 861 F.Supp. 773 (D.Minn.1994). However, none of these cases attempted to account for the statutory language "at the time the action is commenced." § 1391(c). Therefore, this Court does not find these cases persuasive.
Because venue hinges on the existence of jurisdiction at the time a complaint is filed, this Court must make an independent inquiry into the basis for personal jurisdiction. The District of Columbia's personal jurisdiction statutes, D.C.Code § 13-423 and § 13-334, apply here. Section 13-423 provides for personal jurisdiction in the District of Columbia as to a claim for relief arising from the person's
(1) transacting any business in the District of Columbia;
(2) contracting to supply services in the District of Columbia;
(3) causing tortious injury in the District of Columbia by an act or omission in the District of Columbia;
(4) causing tortious injury in the District of Columbia by an act or omission outside the District of Columbia if he regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia;
Id. Plaintiff argues that (a)(1) and (a)(3) apply by virtue of Convera's alleged conspiracy with NGTL, and (a)(4) applies directly to Convera's alleged conduct. Convera argues that DSMCi has failed to met the heightened pleading standard for venue based on conspiracy claims, and that it has not caused any injury within the District of Columbia.
*20 1. § 13-423(a)(1) and (3)
Plaintiff has charged Convera with participating in a civil conspiracy with NGTL to steal trade secrets. It is undisputed that NGTL is headquartered in Washington, DC. Plaintiff argues that actions by a co-conspirator within the subject forum, are sufficient to subject a nonresident co-conspirator to personal jurisdiction in that forum. Dooley v. United Technologies Corp., 786 F.Supp. 65, 78 (D.D.C.1992); Mandelkorn v. Patrick, 359 F.Supp. 692 (D.D.C.1973).
This Court in Dooley explained that a plaintiff seeking to carry its burden of proving personal jurisdiction under § 13-423(a)(1) must show: first, that the defendant transacted business in the District of Columbia; second, that the claim arose from the business transacted in D.C.; and third, that the defendant had minimum contacts with the District of Columbia such that the Court's exercise of personal jurisdiction would not offend "traditional notions of fair play and substantial justice." International Shoe v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945); see also Dooley, 786 F.Supp. at 71. Furthermore, the plaintiff has the burden of establishing that jurisdiction exists. See Lott v. Burning Tree Club, Inc., 516 F.Supp. 913, 918 (D.D.C. 1980). For purposes of determining jurisdiction, facts asserted by the plaintiff in his Complaint will be presumed to be true unless directly contradicted by affidavit. Data Disc, Inc. v. Systems Tech. Assocs., Inc., 557 F.2d 1280, 1284 (9th Cir.1977). Finally, the plaintiff need make only a prima facie showing to prevail on a motion to dismiss for want of jurisdiction. Chase v. Pan-Pacific Broadcasting, Inc., 617 F.Supp. 1414 (D.D.C.1985).
Courts in this Circuit after Mandelkorn v. Patrick, 359 F.Supp. 692 (D.D.C.1973), have applied the conspiracy theory of jurisdiction warily. Dooley, 786 F.Supp. at 78. In seeking to prevent a broad extension of long-arm jurisdiction by the mere allegation of conspiracy, courts have required particularized pleading of the conspiracy as well as the overt acts within the forum taken in furtherance of the conspiracy. See First Chicago Int'l v. United Exchange Co., Ltd., 836 F.2d 1375, 1378-79 (D.C.Cir.1988). Also, mere speculation that the nonresident defendants are co-conspirators is insufficient to meet plaintiff's prima facie burden. Hasenfus v. Corporate Air Services, 700 F.Supp. 58, 62 (D.D.C.1988). The D.C. Circuit has explained, "It is settled a plaintiff `must allege specific acts connecting [the] defendant with the forum,' and that the `bare allegation' of conspiracy or agency is insufficient to establish personal jurisdiction." First Chicago Int'l, 836 F.2d at 1378 (citations omitted).
The parties dispute whether plaintiff has sufficiently alleged the existence of a conspiracy, and the connection of that conspiracy with the District of Columbia. The relevant specific acts alleged to comprise the conspiracy between NGTL and Convera included in plaintiff's complaint do not give the specific locations of the alleged actions. However, plaintiff clearly alleges that NGTL disclosed information by granting Convera access to the information systems at issue here. Defendant admits that Convera was granted access, but alleges that the relevant actions took place between Convera employees in California and NGTL's internet servers in Maryland. In response, plaintiff has submitted several e-mails, filed pursuant to a protective order, from individuals at NGTL's offices in D.C. to Convera employees.
Convera's argument that the interactions between Convera employees and NGTL employees occurred via a server located in Maryland is a red herring. The *21 alleged conspiracy was not between the computer server and Convera, but between the companies' employees. It is undisputed that NGTL's employees were located in the District. The fact that the server is located in Maryland does not undermine the allegations that the relevant actions by NGTL employees, in conspiracy with Convera employees, took place at NGTL's headquarters in D.C. The e-mails sent by NGTL employees located in the District to Convera employees are actions in furtherance of the alleged conspiracy. While it is a close question, conspiracy theory of personal jurisdiction is appropriate here.
Furthermore, traditional notions of fair play and substantial justice are not offended by asserting personal jurisdiction over Convera here. Convera has substantial contacts with the District of Columbia by virtue of having assumed the lucrative contract with NGTL formerly possessed by DSMCi. The contract is worth millions of dollars. Convera has availed itself of the protections and privileges of the District by entering into a substantial contract with a business located here. Although plaintiff's claims with respect to its trade secrets occurred prior to that contract, and can not be said to arise out of that contract, it certainly is fair to say that Convera would not be inconvenienced by a lawsuit in this jurisdiction. This is further supported by the fact that Convera wants to transfer this case to the abutting jurisdiction of the Eastern District of Virginia.
2. § 13-423(a)(4)
Plaintiff argues that this Court also has personal jurisdiction by virtue of § 13-423(a)(4). Section 13-423(a)(4) allows for personal jurisdiction over defendants "causing tortious injury in the District of Columbia by an act or omission outside the District of Columbia if he regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia."
Plaintiff alleges that as a result of the alleged conspiracy between Convera and NGTL, plaintiff lost a very lucrative contract with NGTL. Plaintiff argues that because this contract was to be performed in the District, the injury to DSMCi in the form of the loss of the contract, occurred in the District. Therefore, argues plaintiff, § 13-423(a)(4) applies. Defendant responds that any alleged injury to DSMCi was financial, and therefore as a matter of law occurred where DSMCi is located, in Maryland.
Unfortunately, neither party cites any case law to support its argument about where the injury should be deemed to have occurred. This Court need not resolve this dispute in light of the holding that venue is appropriate pursuant to § 13-423(a)(1) and (3).
3. § 13-334
Section 13-334 of the D.C.Code allows for service of process on foreign corporations doing business in the District. See § 13-334("a) In an action against a foreign corporation doing business in the District, process may be served on the agent of the corporation or person conducting its business, or, when he is absent and can not be found, by leaving a copy at the principal place of business in the District, or, where there is no such place of business, by leaving a copy at the place of business or residence of the agent in the District, and that service is effectual to bring the corporation before the court."). Plaintiff argues that pursuant to D.C. law, this statute also provides an independent basis for personal jurisdiction. However, even if this is an accurate statement of D.C. law, it is uncontested that service of process was not effectuated within the District of Columbia. *22 For this reason, § 13-334 does not apply and this Court need not reach the issue of whether this section alone can support personal jurisdiction.
B. Federal claims
Plaintiff's federal copyright claims in Counts IV and V are governed by 28 U.S.C. § 1400(a). That venue statute states:
Civil actions, suits, or proceedings arising under any Act of Congress relating to copyrights or exclusive rights in mask works or designs may be instituted in the district in which the defendant or his agent resides or may be found.
28 U.S.C. § 1400(a). This provision is subject to the definition of residence for corporations in 28 U.S.C. § 1391(c) discussed above. See § 1391(c)("a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced"). Section 1391(c) explicitly applies "[f]or purposes of venue under this chapter." Id.
Thus, once again, whether this Court has venue for these claims turns on whether this Court can assert personal jurisdiction over this defendant. For the reasons given above, this Court does have personal jurisdiction by virtue of the alleged conspiracy. Therefore because Convera is subject to the personal jurisdiction of this Court at the time this action was commenced, Convera is deemed to reside in the District of Columbia pursuant to § 1391(c). Because Convera can be said to reside in the District, venue is proper pursuant to § 1400(a).
C. Transfer Justification
Transfer is only appropriate if venue exists in the District to which the case is to be transferred. Convera does not devote much time to the justification for a transfer of this case to the Eastern District of Virginia in particular. Convera simply argues that venue is appropriate there, and certain factors in the "interests of justice" test would support such a transfer. Plaintiff correctly responds that two of the three factors stated by Convera are irrelevant: first, that DSMCi has Virginia-based counsel, and second, that the Fourth Circuit is familiar with cases involving the internet. The other factor cited by Convera, that Virginia law will apply to this case, remains to be determined. It is unclear to this Court why the interests of justice will be served by a transfer to an abutting jurisdiction when venue exists in both districts. In light of the strong presumption in favor of plaintiff's choice of a forum, defendants' justification for transfer is unpersuasive.
II. Defendant Convera's Motion to Dismiss for Failure to State a Claim
A. Federal Rules of Civil Procedure 12(g) and (h)
Convera has also moved to dismiss DSMCi's complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Before addressing the merits of the parties' argument, the Court must make note of defendant's failure to comply with the Federal Rules. This Court could deny defendant's motion to dismiss in its entirety for defendant's failure to comply with Federal Rule of Civil Procedure 12(g) and (h). In response to plaintiff's original complaint, defendant Convera filed no less than four independent motions to dismiss. Those motions were mooted by the amended complaint. In response to plaintiff's amended complaint, defendant Convera has again filed two separate motions to dismiss. The motion to dismiss pursuant to 12(b)(3) for lack of venue discussed above was filed first, followed by the motion to dismiss for failure *23 to state a claim pursuant to Rule 12(b)(6).
It is an elementary rule of civil procedure that a party shall file one motion which contains all defenses brought pursuant to Rule 12. Rule 12(g) states
A party who makes a motion under this rule may join with it any other motions herein provided for and then available to the party. If a party makes a motion under this rule but omits therefrom any defense or objection then available to the party which this rule permits to be raised by motion, the party shall not thereafter make a motion based on the defense or objection so omitted, except a motion as provided in subdivision (h)(2) hereof on any of the grounds there stated.
Fed.R.Civ.P. 12(g). Thus, the only exceptions to the requirement that all defenses be contained in one motion are listed in Rule 12(h)(2):
A defense of failure to state a claim upon which relief can be granted, a defense of failure to join a party indispensable under Rule 19, and an objection of failure to state a legal defense to a claim may be made in any pleading permitted or ordered under Rule 7(a), or by motion for judgment on the pleadings, or at the trial on the merits.
Fed.R.Civ.P. 12(h)(2). Rule 7(a) limits pleadings to a complaint and answer, and other responses where appropriate. Thus, the defense of failure to state a claim must be brought in the one motion to dismiss, or in an answer. The Federal Rules of Civil Procedure do not permit a second motion to dismiss to be filed.
However, because Rule 12(h)(2) does allow a motion for judgment on the pleadings that asserts the defense of failure to state a claim to be filed at any time, even after a previous motion to dismiss has been filed, defense counsel's decision to file multiple motions to dismiss was harmless error.
B. Standard of Review
This Court will not grant the defendant's motions to dismiss pursuant to Rule 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276 (D.C.Cir.1994). "Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). A motion to dismiss is intended to test the sufficiency of the complaint and the complaint alone. See, e.g., Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Tele-Communications of Key West v. U.S., 757 F.2d 1330, 1335 (D.C.Cir.1985) ("a Rule 12(b)(6) disposition must be made on the face of the complaint alone"). Accordingly, at this stage in the proceedings, the Court must accept as true all of the complaint's factual allegations. See Doe v. United States Dep't of Justice, 753 F.2d 1092, 1102 (D.C.Cir.1985). Plaintiff is entitled to "the benefit of all inferences that can be derived from the facts alleged." Kowal, 16 F.3d at 1276.
C. Trade Secrets Claims
Convera argues that the first three Counts of DSMCi's Complaint, misappropriation of trade secrets, civil conspiracy, and unjust enrichment, all fail because DSMCi has not alleged the trade secrets at issue with sufficient factual particularity. Convera argues that DSMCi has failed to plead with the specificity required for a trade secrets act claim for two reasons: first, only certain software named in the DSMCi-NGTL contract is *24 subject to "reverse engineering" prohibitions and DSMCi's allegations failed to name that specific software; and second, the database Convera alleged improperly accessed was the property of NGTL not DSMCi and therefore DSMCi has no claim to it. Convera further argues that the civil conspiracy claim is contingent on proving the violation of the trade secrets statute, and therefore because DSMCi has failed to state what trade secrets are at issue with sufficient particularity, the conspiracy claim fails as well. Finally, as discussed above, the unjust enrichment claim was previously dismissed without prejudice by this Court and need not be discussed here.
Convera's arguments are unpersuasive. Convera fails to apply the standard for notice pleading under Federal Rule of Civil Procedure 8. Swierkiewicz v. Sorema, 534 U.S. 506, 122 S.Ct. 992, 998, 152 L.Ed.2d 1 (2002). The cases cited by Convera in support of this argument are primarily cases discussing the standard of proof on the merits at the summary judgment stage. Furthermore, one case relied on by Convera extensively, IDX Systems Corp. v. Epic Systems Corp., actually explicitly holds that there is no heightened pleading for trade secrets claims: "plaintiff is not and cannot be expected to plead its trade secrets in detail. Such a public disclosure would amount to an effective surrender of trade secret status." 165 F.Supp.2d 812, 817 (W.D.Wis.2001) The usual notice pleading requirements under Rule 8 therefore apply. Pursuant to notice pleading, DSMCi has sufficiently alleged claims of misappropriation of trade secrets and civil conspiracy.
D. Federal Copyright Claims
1. Copyright Act and Digital Millennium Copyright Act
Once again, Convera argues that there is a heightened pleading standard for copyright cases, but cites no authority from this Circuit for that proposition. Further, Convera gives no justification as to why this Court would adopt such a heightened pleading requirement based on the nature of copyright actions. Furthermore, DSMCi cites many copyright cases that hold the oppositethat there is no heightened pleading requirement. These cases rely on the Supreme Court's holding in Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit, 507 U.S. 163, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993), which held that the only two types of cases with a heightened pleading requirement under the Federal Rules are claims involving fraud or mistake. Id. at 168, 113 S.Ct. 1160. Convera's dismissal of the Leatherman decision as limited to the pleading requirements for civil rights statutes is unpersuasive.
DSMCi has sufficiently alleged all the elements of both copyright claims, save one. While a later-approved copyright application relates back to the date that the application, deposit and fee were received, a claim under the Copyright Act or Digital Millennium Copyright Act can not be brought prior to actually applying to register a copyright. Plaintiff's amended complaint was filed on February 28, 2002. Plaintiff admits that it mailed via Federal Express its copyright application on this same date, and that it was not received by the U.S. Copyright Office until March 1, 2002. Thus, technically, plaintiff's copyright claim was filed in this Court prior to its application for a copyright and is legally barred. However, in the interests of justice, the Court will nonetheless deny the motion to dismiss and grant plaintiff leave to amend its complaint to properly bring the copyright claims after the registration date.
*25 III. NGTL's Motion to Intervene
NGTL has moved to intervene in this case pursuant to Rule 24(a) and (b). Initially, NGTL moved to intervene for the limited purpose of requesting a stay of this case pending the outcome of the arbitration between DSMCi and NGTL. After admitting at the hearing before this Court that no precedent supports intervention in a case pursuant to Rule 24 for such a limited purpose, NGTL changed its position and now wishes to intervene as a defendant for all purposes. NGTL has not, however, also waived its right to insist on arbitration of its dispute with DSMCi pursuant to the contract between them. It is undisputed that the arbitration clause in that contract requires any dispute between DSMCi and NGTL related to that contract to be arbitrated rather than litigated unless both parties waive that right. Thus, this Court is faced with a peculiar dilemma-whether to allow an interested party to intervene as a party defendant when it has not waived its right to insist on arbitration of any claims between it and plaintiff. Finally, the added complication, discussed below, is that NGTL has joined in defendant Convera's request to compel arbitration among all three parties, despite the fact that there is no arbitration agreement between DSMCi and Convera.
Federal Rule of Civil Procedure 24 has two mechanisms for allowing a party to intervene: intervention as of right pursuant to Rule 24(a) and permissive intervention pursuant to Rule 24(b). Because NGTL has not established a legally cognizable interest adversely affected by this litigation, the Court will deny its request to intervene as of right pursuant to Rule 24(a). However, because NGTL and Convera have asserted a common defense, whether this Court will allow permissive intervention turns on whether such intervention will further the dual interests of justice and efficiency.
A. Rule 24(a) Intervention as of Right
Intervention as of right is permitted by Federal Rule of Civil Procedure 24(a) only when the proposed intervener meets four requirements: 1) the application to intervene must be timely, 2) the party must have an interest relating to the property or transaction which is the subject of the action, 3) the party must be situated so that the potential disposition of the action may impair or impede the party's ability to protect that interest, and 4) the party's interest must not be adequately represented by existing parties to the action. See, e.g., Building and Construction Trades Department, AFL-CIO v. Reich, 40 F.3d 1275, 1282 (D.C.Cir.1994). The D.C. Circuit has further explained that the proposed intervener's interest in the lawsuit can not be any potential interest, but must be a legally protectable interest. Cleveland v. Nuclear Regulatory Comm'n, 17 F.3d 1515, 1517 (D.C.Cir.1994). As a practical matter, this means that the proposed intervener "would suffer harm from an adverse decision on the merits." Alaska v. Federal Energy Regulatory Comm'n, 980 F.2d 761, 763 (D.C.Cir.1992).
NGTL has not demonstrated the harm it would suffer from any ruling on the merits by this Court. NGTL argues first that this litigation has the potential to adversely impact its interests because in the event that Convera were held liable to DSMCi, Convera will seek indemnification from NGTL. See NGTL's Mot. to Intervene, Ex. 1. There are two contingencies that precede any liability of NGTL to Convera under any indemnity agreement that may exist between them: first, Convera must lose this lawsuit, and second, Convera must succeed in holding NGTL liable for indemnification. Many courts outside this Circuit have held such potential harm caused by an indemnification agreement to be too attenuated to justify *26 intervention as of right because that harm is contingent on intervening events. See, e.g., Travelers Indemnity Co. v. Dingwell, 884 F.2d 629, 638 (1st Cir.1989); Restor-A-Dent Dental Laboratories Inc. v. Certified Alloy Products, Inc., 725 F.2d 871, 875-76 (2d Cir.1984). This Court is persuaded by the reasoning of these cases. The possibility of indemnification liability is too attenuated to justify mandatory intervention.
NGTL also argues that its interests are implicated because the arbitrator would be bound by the doctrine of collateral estoppel and issue preclusion to follow factual and legal determinations of this Court. This estoppel argument is unpersuasive. NGTL initially made this estoppel argument in a conclusory manner without citing any case law to support its position. At the hearing before this Court, when challenged to provide support for this argument, NGTL requested a further opportunity to brief the issue, which the Court granted. Having reviewed the briefs submitted by the parties on the estoppel issue, the Court finds NGTL's argument unconvincing.
First of all, the parties have not briefed the estoppel issue relevant to the question of intervention: whether NGTL's interests will be adversely impacted by this litigation because determinations of this Court will have a preclusive effect in arbitration. The estoppel issue briefed by the parties relates to the propriety of this Court issuing a stay pending the outcome of arbitration between DSMCi and NGTL. The estoppel issue briefed by the parties with respect to the stay request is whether this litigation may be narrowed or eliminated by the arbitrator's decision. Thus, one issue focuses on the impact of the court on the arbitration, and the other on the impact of the arbitration on the court. As NGTL has presented no case law to support its argument that this Court's decisions with respect to DSMCi's claims against Convera will have a preclusive effect on the arbitration of claims between DSMCi and NGTL, this Court rejects that argument. The burden of demonstrating its fulfillment of the requirements of Rule 24(a) is squarely on the intervenor-applicant, NGTL. Conclusory, unsupported arguments are insufficient to meet this burden.
Finally, NGTL admits the harm with which it is concerned-discovery by DSMCi. NGTL complains that DSMCi would be able to engage in "one-sided discovery from Convera and NGTL." NGTL's Mot. to Intervene at 8. DSMCi will most definitely not be permitted by this Court to engage in "one-sided" discovery with Convera discovery in this case will proceed efficiently and fairly. Whether or not DSMCi would be able to serve third-party discovery requests on NGTL depends on the rules that govern such requests. Once again, NGTL cites no case law that supports its argument that the threat of third-party discovery is an interest sufficient to justify intervention pursuant to Rule 24(a).
Because the Court holds that NGTL has not articulated an interest to be adversely impacted by this litigation, there is no need to reach the other factors, timeliness, impairment of interest, and adequacy of representation, of the intervention as of right analysis.
B. Rule 24(b) Permissive Intervention
Rule 24(b) allows intervention "when a statute of the United States confers a conditional right to intervene," or "an applicant's claim or defense and the main action have a question of law or fact in common." Fed.R.Civ.P. 24(b). This determination is discretionary, and "[i]n exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the *27 rights of the original parties." Fed. R.Civ.P. 24(b).
Initially, when NGTL moved to intervene for the limited purpose of requesting a stay, the Rule 24(b) analysis was straightforward. Because NGTL was asserting no claim or defense in this case, but only moving to request a stay, NGTL failed to satisfy the requirement that "an applicant's claim or defense and the main action have a question of law or fact in common." Fed.R.Civ.P. 24(b). Now that NGTL has decided to move to intervene for all purposes, the analysis becomes more complex.
NGTL does not purport to rely on a federal statute, arguing instead commonality of questions of law and fact. NGTL argues that this case and the arbitration between NGTL and DSMCi share many common questions of law and fact. Clearly the facts at issue in the arbitration and this litigation at least in part overlap: determining whether NGTL violated its contract by revealing information to Convera, and whether Convera conspired with NGTL to receive the information will involve much of the same factual development.
NGTL and Convera share the common defense of the arbitration clause of the DSMCi-NGTL contract and the Federal Arbitration Act, 9 U.S.C. § 1 et seq. Both NGTL and Convera argue that pursuant to the equitable estoppel doctrine DSMCi should be compelled to arbitrate its claims against both NGTL and Convera.
Allowing NGTL to intervene will not unduly prejudice or delay these proceedings. The question of whether this Court should stay this case pending arbitration, or compel all three parties to arbitrate has been fully briefed by all three parties already. Allowing NGTL to intervene will not require delay while NGTL has an opportunity to brief these issues. Nor will bringing NGTL into this litigation prejudice either DSMCi or Convera. Convera has consented to the intervention, and DSMCi no longer objects to NGTL's intervention now that NGTL has moved to intervene for all purposes. All parties agree that justice and efficiency will be served by litigating or arbitrating plaintiffs' claims against Convera and NGTL in one forum.
For these reasons, NGTL's motion to intervene will be granted.
IV. Defendant Convera's Motion to Compel Arbitration
On April 25, 2002, Convera moved this Court to compel DSMCi to arbitrate its claims against Convera.[2] Convera and NGTL argue that this Court has the authority pursuant to the doctrine of equitable estoppel to order DSMCi to arbitrate claims related to its contract with NGTL against a non-signatory to that agreement. In response, DSMCi argues first that *28 Convera has waived any right to request arbitration by its participation thus far in this lawsuit,[3] and second, that this Court should not adopt an equitable estoppel rule that has not yet been recognized in the D.C. Circuit.
The Supreme Court and this Circuit have repeatedly held that a party can not be compelled to arbitrate a dispute that it has not contractually agreed to arbitrate. See, e.g., Equal Employment Opportunity Comm'n v. Waffle House, Inc., 534 U.S. 279, 122 S.Ct. 754, 764, 151 L.Ed.2d 755 (2002); Air Line Pilots Assoc. v. Miller, 523 U.S. 866, 876, 118 S.Ct. 1761, 140 L.Ed.2d 1070 (1998) ("Ordinarily, `arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.'") (quoting United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)); see also First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995) ("a party who has not agreed to arbitrate will normally have a right to a court's decision about the merits of its dispute.... arbitration is simply a matter of contract between the parties; it is a way to resolve those disputes but only those disputes that the parties have agreed to submit to arbitration."); Bailey v. Fed. Nat'l Mortgage Assoc., 209 F.3d 740, 746 (D.C.Cir.2000). Most recently in Waffle House, the Supreme Court addressed whether the Equal Employment Opportunity Commission (EEOC) could be compelled to arbitrate a discrimination claim against an employer when the employee who was subject to the discrimination signed an agreement to arbitrate all claims related to employment. 122 S.Ct. at 764. The Supreme Court held that the EEOC could not be compelled to arbitrate because it was not a signatory to the contract agreeing to arbitration and had independent statutory basis for bringing suit. 122 S.Ct. at 764. The Court held that "[a]bsent some ambiguity in the agreement, however, it is the language of the contract that defines the scope of disputes subject to arbitration.... For nothing in the [Federal Arbitration Act] authorizes a court to compel arbitration of any issued, or by any parties, that are not already covered in the agreement." Id. at 762. The Court was emphatic: "It goes without saying that a contract cannot bind a nonparty." Id. at 764. Similarly in Air Line Pilots Assoc., the Supreme Court held that non-union members who objected to certain use of funds by a union but who were not bound by the union membership agreement that contained an arbitration clause could not be compelled to arbitrate their claims. 523 U.S. at 879-80, 118 S.Ct. 1761 ("We hold that, unless they agree to the procedure, agency-fee objectors may not be required to exhaust an arbitration remedy before bringing their claims in federal court.").
While it is clear that a non-signatory can not be compelled to arbitrate a claim, neither the Supreme Court nor this Circuit have directly addressed the issue of whether a willing non-signatory to an arbitration agreement can compel a signatory to arbitrate its claims against the non-signatory. Dicta in the Supreme Court's decision in Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), supports the holding that such arbitration can not be compelled. Like this case, Moses involved a plaintiff, the Hospital, with two distinct but related disputes with two parties, defendant Mercury Construction and an architect. Only the Hospital's dispute with Mercury Construction was subject to *29 an arbitration clause. The Moses Court observed:
The Hospital points out that it has two substantive disputes here one with Mercury, concerning Mercury's claim for delay and impact costs, and the other with the Architect, concerning the Hospital's claim for indemnity for any liability it may have to Mercury. The latter dispute cannot be sent to arbitration without the Architect's consent, since there is no arbitration agreement between the Hospital and the Architect. It is true, therefore, that if Mercury obtains an arbitration order for its dispute, the Hospital will be forced to resolve these related disputes in different forums. That misfortune, however, is not the result of any choice between the federal and state courts; it occurs because the relevant federal law requires piecemeal resolution when necessary to give effect to an arbitration agreement. Under the Arbitration Act, an arbitration agreement must be enforced notwithstanding the presence of other persons who are parties to the underlying dispute but not to the arbitration agreement. If the dispute between Mercury and the Hospital is arbitrable under the Act, then the Hospital's two disputes will be resolved separately one in arbitration, and the other (if at all) in state-court litigation.
460 U.S. at 19-20, 103 S.Ct. 927 (emphasis added).
Convera and NGTL urge this Court to apply the doctrine of equitable estoppel to compel DSMCi to arbitrate its claims against Convera. While neither the Supreme Court nor the D.C. Circuit has directly addressed this issue, several other Circuits have held that equitable estoppel can apply to this situation. See, e.g., In re: Humana Inc. Managed Care Litigation, 285 F.3d 971 (11th Cir.2002); Grigson v. Creative Artists Agency, LLC, 210 F.3d 524 (5th Cir.2000); International Paper Company v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411 (4th Cir. 2000); Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753 (11th Cir. 1993); Hughes Masonry Co., Inc. v. Greater Clark County Sch. Bldg. Corp., 659 F.2d 836, 841 n. 9 (7th Cir.1981).
The Eleventh Circuit has held several times that equitable estoppel may be invoked to compel a plaintiff to arbitrate claims against a nonsignatory defendant if the plaintiff's claims are "based upon, and inextricably intertwined with, the written agreement" that contains the arbitration clause. In re Humana, 285 F.3d at 975. "The plaintiff's actual dependance on the underlying contract in making out the claim against the nonsignatory defendant is therefore always the sine qua non of an appropriate situation for applying equitable estoppel." Id. at 976. Applying the reasoning of the Eleventh Circuit, DSMCi may be compelled to arbitrate its claims against Convera if those claims are based on and inextricably intertwined with the contract between DSMCi and NGTL. Regardless of the availability of this doctrine in this Circuit, none of the four remaining claims, for the misappropriation of trade secrets, civil conspiracy, and the federal copyright claims are "inextricably intertwined" with contractual obligations owed DSMCi by NGTL pursuant to the contract.[4] While NGTL allegedly failed to *30 observe its contractual obligation to maintain the confidentiality of certain information, Convera's obligation to DSMCi, should one be proven to exist, does not arise out of that contract, but rather from state and federal statutes and common law.
DSMCi has not sued Convera for example, for tortious interference with the contract between DSMCi and NGTL. Such a claim would turn on the Court's interpretation of the agreement's provisions and Convera's conduct with respect to that agreement. See, e.g., Grigson v. Creative Artists Agency, LLC, 210 F.3d 524 (5th Cir.2000) (applying equitable estoppel to require plaintiff to arbitrate claim of tortious interference with contract against non-signatory to contract containing arbitration clause). This case is also distinguishable from another equitable estoppel arbitration case relied upon by Convera and NGTL, International Paper Company v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411 (4th Cir.2000). The plaintiff in International Paper sued the manufacturer of a saw as a third party beneficiary of the guarantees and warrantees in a contract between the manufacturer and distributor of the saw. Id. at 413. The Fourth Circuit held that plaintiff could not sue based pursuant to contractual provisions without also complying with the contract's arbitration provision. Id. at 413-14.
This Court need not hold as a matter of law whether equitable estoppel may or may not be invoked to compel arbitration of claims against a non-signatory to a contract in the D.C. Circuit. Even if such an argument were available in this Circuit, none of DSMCi's remaining claims against Convera turn on this Court's interpretation of the agreement between DSMCi and NGTL. Convera's motion to compel is therefore denied.
V. NGTL's Motion to Stay Pending Arbitration
NGTL has moved to stay this litigation pending the resolution of the arbitration between DSMCi and NGTL. DSMCi opposes this motion, and while Convera initially expressed no opinion, Convera now consents to this motion. This Court does have the authority and discretion[5] to stay this case pending the prompt resolution of the arbitration in question. See, e.g., Air Line Pilots Assoc. v. Miller, 523 U.S. 866, 876 n. 6, 118 S.Ct. 1761, 140 L.Ed.2d 1070 (1998) ("Our recognition of the right of objectors to proceed directly to court does not detract from district courts' discretion to defer discovery or other proceedings pending the prompt conclusion of arbitration."); Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 21 n. 23, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) ("In some cases, of course, it may be advisable to stay litigation among the non-arbitrating parties pending the outcome of the arbitration. That decision is one left to the district court ... as a matter of its discretion to control its docket."); Landis v. North American Co., 299 U.S. 248, 254-255, 57 S.Ct. 163, 81 L.Ed. 153 (1936) ("[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of *31 judgment, which must weigh competing interests and maintain an even balance.").
NGTL argues that the following factors weigh in favor of staying this litigation: the outcome of arbitration could limit or narrow the issues before this Court, the outcome of this case could have precedential effect on the arbitration, judicial economy, avoiding the risk of inconsistent determinations on the same factual issues, and the strong national policy in favor of arbitrating disputes. NGTL's Mot. to Stay at 1-2.
NGTL makes two arguments with regard to preclusive effect and the relationship between arbitration and litigation. First, NGTL argues that this Court should stay this litigation because the issues before this Court will be narrowed by the result of the arbitration. NGTL's Mot. to Stay at 1; NGTL's Supp. Mem. of 4/23/02 at 1. Second, NGTL argues that this Court should stay this litigation "in order to guard against the possible precedential effect that an adverse court ruling in this litigation could have on the parallel arbitration." NGTL's Reply at 7.
NGTL's first argument that decisions made by the arbitrator of DSMCi's claims against NGTL will have a preclusive effect in this Court is unpersuasive. This Court recognizes that there are many overlapping factual issues common to both the arbitration and this litigation. However, the simple fact that these issues may be resolved in both fora does not mean that this Court will be bound by the determination of the arbitrator. While NGTL cited no authority to support this argument in its initial motion to stay and reply brief, in response to this Court's request at oral argument, NGTL cited the following four cases: Mandich v. Watters, 970 F.2d 462 (8th Cir.1992), Central Transport, Inc. v. Four Phase Sys. Inc., 936 F.2d 256, 260 (6th Cir.1991); Norris v. Grosvenor Marketing Ltd., 803 F.2d 1281, 1285 (2d Cir. 1986), and Hogue v. Hopper, 728 A.2d 611 (D.C.Ct.App.1999). None of these cases comports with the collateral estoppel standard in this Circuit.
With respect to the impact of this Court's factual determinations on the arbitrator's decision, NGTL again cites no case law. This Court will not prevent plaintiff from having its day in court based on unsupported assertions about preclusive effect. Neither NGTL nor Convera have met the heavy burden of persuading this Court that a stay is appropriate.
Moreover, judicial economy will not be served by granting a stay. It is unclear how long the arbitration proceeding will take to complete. Postponing the resolution of the issues raised in this case for some indefinite time does not comport with the efficient and timely judicial resolution of matters before the federal courts. Allowing a case to languish for years on this Court's docket would not serve the interest of this Court or the parties involved. A stay issued prior to the completion of discovery is particularly problematic, as with time evidence may be lost and memories fade. Because this Court ultimately must resolve the issues presented by this case, that resolution will occur in a timely manner.
CONCLUSION
While all parties in this case agree that ideally this litigation should be resolved in one forum, the parties simply cannot agree on whether that forum should be this Court or arbitration. For the reasons stated above, this Court will not deprive plaintiff of its right to pursue its claims against Convera in federal court. If that means that litigation must proceed in this Court against Convera, while NGTL asserts its right to arbitrate any disputes between it and DSMCi, as the Supreme Court said in Moses H. Cone Memorial *32 Hospital, "[t]hat misfortune ... occurs because the relevant federal law requires piecemeal resolution when necessary to give effect to an arbitration agreement." 460 U.S. at 19-20, 103 S.Ct. 927.
An appropriate Order accompanies this Memorandum Opinion.
NOTES
[1] At the hearing before this Court on April 9, 2002, plaintiff conceded that its unjust enrichment claim was precluded by federal law and this Court accordingly granted plaintiff's request to dismiss this claim without prejudice.
[2] The Court notes that at the hearing on April 9, 2002, this Court granted the parties leave to file supplemental briefs related to the issues presented by counsel to the Court that day, which included the issue of whether this Court can compel DSMCi to arbitrate its claim against Convera. The parties filed those supplemental briefs and responses, which in part addressed this issue, and fully complied with the Court-imposed deadlines and page limitations. Then, without explanation and without requesting leave to file from this Court, Convera also chose to file this additional motion, prompting yet another round of briefing from the parties that exceeded both the page limitations and deadlines for briefing on these issues imposed by this Court on April 9, 2002. While this Court will not deny Convera's motion on these grounds alone, Convera's repeated and excessive motions practice has not gone without this Court's notice. See Order of 6/5/02. Any further improper and excessive filings will result in appropriate sanctions.
[3] Because this Court holds that it will not compel DSMCi to arbitrate its claims against Convera, it need not reach the issue of waiver.
[4] Defendant Convera's April 16, 2002 Supplemental Memorandum purports to explain the relationship between the issues at stake in this litigation and in the arbitration between DSMCi and NGTL. While the three factual issues explained by Convera may or may not overlap, those factual issues do not depend on an interpretation of the contract between DSMCi and NGTL. The fact that these factual allegations may be similar or identical does not mean that DSMCi's claims against Convera are inextricably intertwined with the agreement between DSMCi and NGTL.
[5] This Court does not agree with NGTL's suggestion that the Federal Arbitration Act mandates a stay of this litigation. See NGTL's Mot. to Stay at 7 n. 3. The mandatory stay provision of the Act applies only to parties to the arbitration agreement. IDS Life Ins. Co. v. SunAmerica, Inc., 103 F.3d 524, 529-30 (7th Cir.1996). Whether or not to issue a stay is a matter for this Court's discretion.
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United States Court of Appeals
Fifth Circuit
F I L E D
In the April 6, 2005
United States Court of Appeals Charles R. Fulbruge III
for the Fifth Circuit Clerk
_______________
m 03-11217
_______________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
FREDERICK CHARLES MILLER,
Defendant-Appellant
_________________________
Appeal from the United States District Court
for the Northern District of Texas
______________________________
Before HIGGINBOTHAM, SMITH, and restitution to Miller’s former employer and the
BENAVIDES, Circuit Judges. IRS. Miller appeals several aspects of the
application of the sentencing guidelines and
JERRY E. SMITH, Circuit Judge: the alleged use of certain admissions in the
sentencing decision, and claims that numerous
After embezzling over a million dollars errors were made with respect to restitution.
from his employer, Frederick Miller pleaded We affirm.
guilty of one count of conducting a monetary
transaction with criminally derived funds and I.
one count of tax evasion; he agreed to the Miller engaged in a scheme to defraud his
forfeiture of about $950,000 in assets. The employer and was indicted on eleven counts:
district court imposed a sentence of ninety-six one count of wire fraud, 18 U.S.C. § 1343;
months’ imprisonment and ordered substantial five counts of theft from a health care benefit
program, id. § 669; and five counts of con- mining that the two offenses should not be
ducting a monetary transaction with criminally grouped, a one-level increase was added to the
derived funds (“money laundering”), id. highest offense level, yielding a total of 26.
§ 1957. A superseding information charged
Miller with tax evasion in the year 2000. See The government objected, contending that
26 U.S.C. § 7201. either (1) § 2F1.1 should be used in conjunc-
tion with a four-level increase because the of-
Miller was, at various times, chief financial fense derived more than $1,000,000 and af-
officer of Medical Pathway (an affiliate of fected a financial institution, generating an of-
Medical Select Management (“MSM”)) and a fense level for the first count of 29; or
related entity, Harris Methodist Select (2) § 2S1.2, the guideline for money launder-
(“HMS”). He wrote checks drawn from the ing crimes, should apply, yielding an offense
accounts of HMS and MSM payable to fic- level of 28. Miller objected, contending that
titious entities and accounts in HMS’s and the factual resume to which he stipulated did
MSM’s names but under his control, and later not constitute fraud, so § 2F1.1 could not ap-
diverted the funds to his own use. None of ply. In sum, after these objections were raised,
this illegally obtained income was declared on the question was whether (before grouping)
his tax returns. the total offense level for the first count would
be calculated under the fraud guideline (result-
Pursuant to a cooperation agreement and, ing in an offense level of 29) or the money
later, a plea agreement, Miller pleaded guilty laundering guideline (resulting in a level of
of one count of conducting a monetary trans- 28).
action with criminally-derived funds (in viola-
tion of 18 U.S.C. § 1957) and one count of At the sentencing hearing, the court denied
income tax evasion (in violation of 26 U.S.C. credit for acceptance of responsibility and ap-
§ 7201). In exchange for these pleas and plied an enhancement for obstruction of justice
agreement to forfeit all embezzled funds, the based on attempts to conceal funds after ar-
government moved to dismiss the remaining rest. The court then ruled that the factual
ten counts. resume did not contain the necessary elements
to make out a fraud offense; opted to sustain
The presentence report (“PSR”) initially Miller’s objection; and rejected the contention
concluded Miller’s offense level for the money that § 2F1.1 applies. Implicitly, therefore, the
laundering count should be calculated using court adopted t he position argued in Miller’s
U.S.S.G. § 2F1.1, the applicable guideline for objection and articulated by the prosecutor at
offenses involving fraud. Using § 2F1.1’s base sentencing that if § 2F1.1 did not apply, then
offense level of 6, incorporating the value of § 2S1.2 o r § 2B1.1 would apply, with either
the stolen funds (+11), considering the sophis- one generating an offense level of 28, which,
ticated means used (+2), t he abuse of a posi- when grouped with the tax offense, yielded 29.
tion of trust (+2), the presence of more than
minimal planning (+2), and taking into account After sustaining Miller’s objection, the
Miller’s obstruction of justice (+2), the PSR court called a recess to allow the probation of-
arrived at an offense level of 25. The PSR ficer to recalculate the total offense level.
also concluded that the tax evasion charge Notwithstanding this intention, the probation
should yield a total offense level of 19. Deter- officer could not be located, and the court
2
eventually imposed sentence without consult- A.
ing her. The offense level used, 29, was of- Miller complains that the court erred in im-
fered by the prosecution, and Miller’s counsel posing an unrealistic schedule of payments for
agreed that this was the appropriate level, but the restitution. The Mandatory Victim’s Res-
cautioned, “I did not do the grouping and, titution Act requires a court to order restitu-
once again, it was pretty cursory. I would tion irrespective of ability to pay. 18 U.S.C. §
prefer to have [the probation officer] do the 3664(f)(1)(A). In determining the manner and
calculation].” The court subsequently ordered schedule with respect to which restitution will
Miller imprisoned for 96 months (a sentence be paid, however, a court must consider, inter
within the 87 to 108 months delineated by the alia, the defendant’s financial resources. Id. §
guidelines for an offense level of 29). 3664(f)(2)(A).
Miller was also sentenced to a three-year The restitution order, as noted above, man-
term of supervised release, as a condition of dates as a condition of supervised release that
which the court ordered him to make restitu- Miller return approximately $1.4 million to his
tion of $1,485,074.24, a large portion of which former employer and the IRS. This restitution
would be covered by the property Miller is payable immediately (and accordingly, a
agreed to forfeit under the terms of the plea substantial portion will be paid with the pro-
agreement. The restitution is payable immedi- ceeds of numerous large forfeitures of prop-
ately, but nonpayment is not a violation of su- erty to which Miller agreed), yet Miller’s
pervised release so long as Miller makes the nonpayment will not be deemed a violation of
ordered payments of at least $500 per month his supervised release so long as he pays in
during his supervised release. accordance with the conditions of supervised
release.1 Miller avers that the order that resti-
II. tution is payable immediately is plain error
Miller alleges a number of errors in the cal- where the court conceded that he is unable to
culation and imposition of restitution. Not- afford both restitution and a fine.
withstanding these arguments on appeal, how-
ever, Miller made no objection with respect to Miller relies exclusively on United States v.
any aspect of the restitution order. Accord- Myers, 19 F.3d 160, 168-69 (5th Cir. 1999),
ingly, we review for plain error. See United for his contention that where the record dem-
States v. Branam, 231 F.3d 931, 933 (5th Cir. onstrates that a defendant is not capable of
2000). This standard requires that we find making immediate restitution, the perfunctory
(1) that an error has occurred; (2) that the reference to the fact that he is unable to pay
error is plain; and (3) that it affects a substan- both a fine and restitution is not sufficient con-
tial right. United States v. Olano, 507 U.S. sideration of his ability to pay to justify the
725, 732- 34 (1993). Nevertheless, even if we restitution schedule. Myers, however is readi-
find plain error, “we will not exercise our ly distinguishable.
discretion to correct a forfeited error unless it
seriously affects the fairness, integrity, or
public reputation of judicial proceedings.”
Branam, 231 F.3d at 933 (citing Olano, 507 1
Miller is required to make monthly payments
U.S. at 735-36). of at least $500 beginning sixty days after his
release from prison.
3
In Myers, the court ordered a lump sum “arising from all relevant conduct, not limited
payment, in contrast to the monthly restitution to that arising from the offenses of conviction
payments here. Although the restitution in this alone.” Though he pleaded guilty to a charge
case is payable immediately, Miller is not of evading income tax only in 2000, he omitted
ordered to make full restitution at once. embezzled income from his 1998 and 1999 tax
Rather, the forfeiture will commence immedi- returns as well. In those years, he avoided
ately, and presuming no other property of his paying $149,136.01 in income taxes. As a
materializes between now and his release, he result, the court could have ordered signifi-
will begin making monthly payments after his cantly more restitution than the $78,808 about
release. This schedule, therefore, is not plain which Miller complains. Consequently, the
error, if it is error at all, in light of the court’s failure to deduct the taxes he did pay in 2000
consideration of Miller’s financial situation was not plain error.
evident in its decision that he is unable to pay
both restitution and a fine. C.
According to Miller, it was plain error for
B. the court to order any restitution to the IRS
As part of the restitution order, Miller is re- because, he says, such an order is not autho-
quired to pay the IRS $335,074.24, which os- rized by any federal statute. The government
tensibly represents the taxes unpaid on his responds that such restitution is authorized un-
unreported income for 2000. Miller contends der several different theories. First, the gov-
that because he paid $78,808 in taxes for that ernment contends that the court possesses the
year, the restitution should be reduced by that power to order restitution as a condition of su-
amount. Miller reported his taxable income pervised release. In United States v. Dahl-
for 2000 as $265,999, with a tax due of strom, 180 F.3d 677, 686 (5th Cir. 1999), we
$78,808. In reality, counting the embezzled held that “although restitution may not be di-
funds, his income was $915,167.52, which rectly permitted under § 3663(a), a district
would have generated a tax liability of court may order restitution within the context
$335,074.24 (the amount that the restitution of a supervised release” pursuant to 18 U.S.C.
order mandates be paid to the IRS). Con- § 3583(d). Thus, although the Victim and
sequently, it is Miller’s position that the res- Witness Protection Act, 18 U.S.C. § 3663,
titution order should require him to pay only does not expressly cover tax offenses such as
the difference, or $256,266.24.2 that under which Miller was convicted,
§ 3583(d) authorizes such restitution as a con-
The government concedes that this was er- dition of Miller’s supervised release.
ror. It nevertheless maintains that no relief
should be afforded because the error was In response, Miller argues that United
harmless, resulted in no prejudice to Miller, States v. Stout, 32 F.3d 901, 904 (5th Cir.
and cannot constitute plain error. In his plea 1994), limits the court’s ability to impose resti-
agreement, Miller agreed to pay all restitution tution, even as a condition of supervised
release, to situations in which the defendant
agreed to such restitution as part of a plea
2 agreement. Therefore, Miller contends, be-
Miller also asserts, and we address, infra, that
no restitution may be properly ordered to the IRS
cause as he did not so agree, § 3583(d) does
at all. not apply.
4
This argument, limiting § 3583(d) to cases he did give his consent to the restitution. In
in which restitution is agreed to in a plea the plea agreement, he acknowledges that the
agreement, is the subject of vigorous debate by maximum penalties for both counts to which
the parties. According to the government, he pleaded guilty (including tax evasion) in-
Stout’s limitation of restitution to cases in clude “restitution to victims or to the commu-
which it is agreed to in the plea agreement is nity, which may be mandatory under the law,
limited to cases in which such restitution and which Miller agrees may include restitu-
would otherwise have been foreclosed by stat- tion arising from all relevant conduct, not lim-
utes that formerly barred restitution for uncon- ited to that arising from the offenses of con-
victed offenses.3 Thus, goes the argument, viction alone . . . .”
Stout limits restitution, by requiring the plea
agreement to allow for it, only in cases in Miller contends this section is ambiguous
which the harm for which restitution is sought and that all such ambiguities must be resolved
was caused by conduct beyond the counts of in his favor, because the government drafted
conviction. Because Miller pleaded guilty of the agreement. See Spacek v. Mar.
tax evasion, Stout’s limitation is inapplicable. Ass’nSSI.L.A. Pension Plan, 134 F.3d 283,
298-99 (5th Cir. 1998). There is, however, no
ambiguity. Miller was pleading guilty of, inter
Miller disputes this logic, concluding that alia, tax evasion. He agreed that by pleading
Stout’s limitation is wholly unrelated to wheth- guilty he recognized that the maximum penal-
er the restitution is sought for unconvicted ties that might be imposed on him included
conduct. Instead, Miller believes that Stout restitution for all relevant conduct. Stout is
stands squarely against any imposition of therefore inapplicable, because Miller con-
restitution as a condition of supervised release sented to the restitution. Ordering restitution
without the defendant’s consent in a plea was, consequently, not plain error.
agreement.
D.
As the government points out, this interpre- Miller is simultaneously being asked to
tation of § 3583 and Stout would preclude the make restitution to his former employer of
imposition of restitution as a condition of su- $1,150,000 and to the IRS of $335,074.24.
pervised release in any case in which the de- According to Miller, this order is plain error
fendant goes to trial and is convicted. Yet, no- because it directs him to make his employer
where in the statute is such a counterintuitive whole, yet he still must pay restitution in the
intention manifest. amount of taxes he would have been liable for
if he had reported the embezzled fundsSSthe
We need not resolve that particular dispute. same embezzled funds he is ordered to re-
Despite Miller’s protestations to the contrary, turnSSon his income tax returns. Once again,
however, Miller failed to object and raise this
3
argument with the district court. Under the
Congress later changed this situation by al- ensuing plain error standard of review, he
lowing restitution based on any harm caused by a
cannot prevail.
scheme, conspiracy, or pattern of criminal activity,
even if no harm resulted from the offense to which
a defendant pleads guilty. See 18 U.S.C.
In the first instance, the argument that Mil-
§ 3663A(a)(2). ler makes, although possessing some intuitive
5
appeal, is a novel one in this circuit. It would less nature of the purported error, we cannot
therefore be a stretch of language to dub the say that the trial court’s action was plain error.
district court’s decision “‘obvious,’ ‘clear,’ or
‘readily apparent,’ [an error that is] so con- E.
spicuous that ‘the trial judge and prosecutor Miller contends that the restitution order
were derelict in countenancing [it], even ab- incorrectly identifies the corporate entity to
sent the defendant’s timely assistance in de- which restitution is owed. Miller is undeterred
tecting [it].’” United States v. Dupre, 117 by the fact that if the alleged error is corrected
F.3d 810, 817 (5th Cir. 1997) (quoting United and restitution is payable to a different entity,
States v. Calverley, 37 F.3d 160, 163 (5th Cir. he will still be liable for the same amount of
1994) (en banc )). Absent any precedent restitution. Apparently, in Miller’s eyes, this
directly supporting Miller’s contention, it can- constitutes plain errorSSan error affecting
not be said that the alleged error was “plain” substantial rights that “seriously affects the
for purposes of our review. fairness, integrity, or public reputation of
judicial proceedings.” Olano, 507 U.S. at 732.
Furthermore, even if we were to say that
such an error is “plain,” Miller would not nec-
essarily be entitled to relief. As discussed The basis of Miller’s argument is rooted in
above, plain error review precludes relief ex- the changes in corporate structure that his em-
cept where the putative error affects a substan- ployer underwent during his tenure. Essen-
tial right. Olano, 507 U.S. at 732- 34. Even tially, according to Miller, although restitution
then, “we will not exercise our discretion to was ordered payable to MSM, only a small
correct a forfeited error unless it seriously af- portion of the embezzled funds was embezzled
fects the fairness, integrity, or public reputa- from MSM. Instead, Miller contends that he
tion of judicial proceedings.” Branam, 231 initially was employed by HMS, which was
F.3d at 933 (citing Olano, 507 U.S. at controlled by Harris Methodist Health Systems
735-36). (“HMHS”), which was in turn owned by Texas
Health Resources (“THR”). At the beginning
Given that the district court was statutorily of 1999, allegedly HMHS, and thus THR,
empowered to impose a fine in addition to res- divested itself of all interest in HMS, and HMS
titution, it cannot be that Miller’s substantial subsequently became MSM. As part of this
rights were affected. In the absence of the or- transaction, Miller states that THR agreed to
der mandating restitution to the IRS that Mil- assume almost $25 million in liabilities on
ler seeks to have vacated, the district court behalf of HMS. Thus, goes the argument, any
could have, and indeed likely would have im- embezzlement occurring before the formation
posed a fine, making any error harmless.4 of MSM should be payable to THR, not
Thus, considering the novelty of Miller’s claim MSM.
(a fact that belies the “plain” nature of the
supposed error), coupled with the likely harm- The government counters with multiple ar-
guments. According to its first theory, even if
restitution was ordered to the wrong entity
4 and “should go to either HMHS or THR
It was only after noting that Miller would not
be able to afford both restitution and a fine that the
because of some contractual obligation, then
court declined to impose a fine. that is a matter for those parties to determine
6
among themselves.” This argument is unper- to this proceeding, neither can claim that its
suasive. If the court truly incorrectly divined substantial rights are affected. We therefore
the correct victim to which restitution is owed, affirm the restitution order.
the dictates of § 3663 would be violated,
because under the terms of that section restitu- III.
tion would not be going to the “victim.” Miller raises a number of issues with re-
Perhaps it could be argued that this is not plain spect to his sentencing. We reject these chal-
error, but forcing private “victims” to litigate, lenges and affirm the sentence.
in civil court, the question of who is entitled to
the restitution likely affects the integrity and A.
public reputation of the courtSSnot to mention Miller contends that the district court vio-
the fact that it is inefficient. lated Federal Rule of Criminal Procedure
32(d)(1)6 and U.S.S.G. §§ 6A1.2 and 6A1.37
The government next posits that the change by failing to allow the probation officer to
from HMS to MSM was merely a name alter- “identify all applicable guidelines” after the
ation and that no relevant change took place. court sustained Miller’s objection to the use of
Additionally, it contends that the PSR, on the fraud guideline as initially suggested in the
which the court relied, constituted sufficient PSR. Specifically, Miller suggests that the
evidence for the court to conclude that MSM decision to sentence him without benefit of the
was due the restitution, and Miller did not pre- probation officer’s recalculation of the applica-
sent evidence to the contrary.5 The evidence ble offense level deprived him of a meaningful
in the record seems to support Miller’s posi- sentencing hearing and requires a vacatur of
tion. According to the PSR, much of the his sentence.
embezzlement took place before the corporate
changed took place, so a substantial portion of
the restitution would seem properly payable
not to MSM, but to THR. 6
The rule reads, in pertinent part,
Nevertheless, because Miller would be re-
The presentence report must:
quired to pay the same amount in restitution,
regardless of which entity receives it, he can- (A) identify all applicable guidelines and policy
not show that any error affects his substantial statements of the Sentencing Commission;
rights. As inefficient as it may seem to force
the competing entities to sort out this dispute (B) calculate the defendant’s offense level and
themselves, our scope of review is highly criminal history category . . . .
circumscribed where an error is unobjected to,
and because neither THR nor MSM is a party FED R. CRIM. P. 32(d)(1).
7
These provisions prescribe that “[c]ourts shall
adopt procedures for the timely disclosure of the
5
See United States v. Londono, 285 F.3d 348, presentence report [and] the narrowing and res-
354 (5th Cir. 2002) (“In general the PSR bears olution . . . of issues in dispute,” U.S.S.G.
sufficient indicia of reliability to be considered as § 6A1.2, and that “the parties shall be given an ad-
evidence by the district court, especially when there equate opportunity to present information to the
is no evidence in rebuttal.”). court regarding the factor,” id. § 6A1.3.
7
At the outset, there is some dispute as to court correctly reached without benefit of the
whether Miller properly objected on this issue. probation officer’s assistance. Any error,
If not, our review is for plain error rather than therefore, is harmless.
abuse of discretion.8
Further, it does not appear that the decision
Apparently the court was aware of Miller’s to proceed with sentencing was error at all.
request that the probation officer make the re- Contrary to Miller’s assertions, neither the text
calculation; therefore the court had an oppor- of rule 32 nor §§ 6A1.2 and 6A1.3, nor our
tunity to correct the alleged error. As Miller precedents interpreting them, require the court
points out, requiring him to renew his objec- to allow the probation officer to make a recal-
tion once the court decided to impose sentence culation following the sustaining of an ob-
without further input would be tantamount to jection to the PSR. Rule 32(d), the provision
requiring him to continue objecting after the on which Miller most heavily relies, merely
court had ruled (a rule akin to the old require- requires that the PSR include an identification
ment of taking exceptions). Miller’s counsel of all applicable guidelines. Nowhere does the
communicated to the court, in no uncertain rule indicate that a new PSR must be gener-
terms, that he would “prefer to have Ms. Mc- ated after every decision by the court with
Millan,” the probation officer, do the calcula- respect to those calculations.
tion. This articulation served the purposes of
rule 52(b), which is designed to “provide the In United States v. Knight, 76 F.3d 86, 88
trial judge an opportunity to avoid or correct (5th Cir. 1996), we held that “at least if the de-
any error.” United States v. Rodriguez, 15 fendant has actual knowledge of the facts on
F.3d 408, 417 (5th Cir. 1994); FED. R. CRIM. which the district court bases an enhancement
P. 52(b) . The proper standard of review, or a denial of a reduction, the Sentencing
therefore, is abuse of discretion. Guidelines themselves provide notice of the
grounds relevant to the proceeding sufficient
Even under that standard (more generous to satisfy the requirements of Rule 32 and
than plain error), Miller’s argument is merit- U.S.S.G. § 6A1.3.” Miller was provided with
less. He objected to the guideline used to more than adequate notice of the grounds on
calculate the applicable offense level in the which the court would impose sentence. In
PSR and instead suggested the use of a differ- fact, the main issue of dispute at the sentencing
ent guideline. The court sustained the objec- hearingSSthe choice of applicable guideline for
tion. It is therefore difficult to imagine how the money laundering countSSwas the subject
any alleged error in procedure could have pre- of Miller’s own objection to the PSR.
judiced Miller. If the sentence were vacated, Miller tries to distinguish Knight and urges
on resentencing the probation officer would that United States v. Zapatka, 44 F.3d 112,
merely reach the same conclusion that the 114 (2d Cir. 1994), is more on point. There,
the court held that the sentencing procedure
was violative of rule 32 and § 6A1.3. Refer-
8
ence to Zapatka, however, is unavailing, be-
Compare United States v. Henry, 288 F.3d
cause there the district court, apparently sua
657, 664 (5th Cir. 2002) (plain error where no ob-
sponte, applied a guideline different from than
jection) with United States v. Narvaez, 38 F.3d
162, 165 (5th Cir. 1994) (application of § 6A1.3
that used in the PSR. Id.
and rule 32(c) reviewed for abuse of discretion).
8
In stark contrast, here the court sustained safe in their house. In previous interviews
Miller’s objection to the guideline used in the with agents, Miller had admitted that some of
PSR and utilized the guideline that Miller him- the stolen money was hidden in two safes in
self argued should apply. Consequently, the his attic. Yet, when agents arrived to search
procedures used in this case violated neither his residence, only one safe was there. Appar-
the text of rule 32 or the guidelines nor their ently, Miller’s father-in-law then arrived with
underlying purpose of giving defendants ade- the other, eventually admitting that Miller’s
quate notice such that there can be “focused, wife had brought him the safe the previous
adversarial resolution of the legal and factual night.
issues relevant to fixing Guidelines sentences
. . . .” Burns v. United States, 501 U.S. 129, Unbeknownst to Miller, his conversations
137 (1991). with his wife, during which he allegedly told
her to remove the money, were recorded.
B. When confronted with this fact and shown the
1. inmate call logs, Miller conceded, “It’s true
Miller avers that he is entitled either to . . . okay, it’s true.”
withdraw his plea or to be resentenced before
another judge because the district court im- Faced with these facts, the PSR recom-
properly considered self-incriminating state- mended that an obstruction-of-justice enhance-
ments made by Miller to government agents. ment be applied to Miller’s offense levelSSan
Twelve days after his arrest, Miller entered in- enhancement to which Miller objected, claim-
to a cooperation agreement with the govern- ing that he had later abandoned his attempt to
ment. The government agreed that no self- conceal the funds. After reviewing the tapes
incriminating statements made by Miller in the of the conversations, the probation officer
course of his interviews with government concluded that the obstruction-of-justice
agents would be used against him in any trial enhancement was justified. The district court,
or sentencing. based on Miller’s conduct with respect to the
concealed funds, denied a reduction for accep-
This broad proposition, however, was tance of responsibility and applied the ob-
subject to numerous caveats, including the struction-of-justice enhancement.
understanding that if Miller made any materi-
ally false or misleading statement, all state- 2.
ments could be used against him. The gov- Miller claims that his statements regarding
ernment further agreed that any information the concealed funds are protected by the co-
provided by Miller would be covered by operation and plea agreements and § 1B1.8
U.S.S.G. § 1B1.8, which (subject to some ex- and therefore could not be properly considered
ceptions) deems self-incriminating statements at sentencing. He further argues that the gov-
made pursuant to a cooperation agreement un- ernment cannot now claim that he was in
usable at sentencing. breach of the agreements, because it failed to
declare a breach before sentencing. Attempt-
Miller made more trouble for himself when ing to preempt the government’s inevitable re-
he allegedly attempted to communicate with sponse that the court could have reached the
his wife, in code, that she should remove and same conclusion without relying on his state-
conceal some $40,000 that was stashed in a ments, Miller contends that the record does
9
not demonstrate that the same information was to the court.9 Nevertheless, there is a mean-
available absent the statements. He lastly ingful difference between this case and
avers that regardless of any prejudice that may Castaneda in that Miller did not object, so our
or may not have befallen him, relief is war- review is for plain error.
ranted because the consideration of the state-
ments was virtually a per se violation of the Regardless of whether Miller breached the
cooperation and plea agreements that requires agreement, however, the government argues
a remedy. quite correctly that the record is replete with
information on which the court could have
The government makes a three-pronged re- reached the same conclusions independently of
sponse. First, it maintains that there was more the disputed admissions. Besides averring that
than adequate information in the record, inde- the record does not contain such evidence,
pendent of Miller’s statements, from which the Miller contends that in the context of the gov-
court divined that Miller was not entitled to an ernment’s failure to honor its agreements, such
acceptance of responsibility reduction (and in- errors are never harmless and constitute plain
deed deserved an obstruction of justice en- error in most cases.10
hancement). Second, the government con-
tends that § 1B1.8 is inapplicable because, by These cases, contrary to Miller’s conten-
its own terms, it covers only self-incriminating tion, do not establish that a failure to fulfill
evidence gleaned while the defendant provides promises contained in agreements constitutes
information concerning the unlawful activities per se plain error.11 Where, as here, the record
of others. Miller, in contrast, goes the argu- contains ample bases for the court to make the
ment, was only admitting to his own miscon- same determination regardless of the disputed
duct. Lastly, the government posits that the admissions,12 it cannot be said that the use of
cooperation agreement was breached by
Miller’s initially false statements regarding the
9
concealed $40,000. The obvious counter argument to this, how-
ever, is that the government never raised the spec-
The government’s breach argument con- ter of breach because Miller never objected to the
tains a major weakness. As Miller correctly use of his statements. Nevertheless, it would be
unjust to say that the government forfeits this ar-
points out, the government ratified the cooper-
gument on appeal where it was not given a mean-
ation agreement after the alleged breach when
ingful motivation for bringing it in the district court
it tendered the cooperation agreement to the because of Miller’s failure to object.
court at Miller’s rearraignment. As we held in
United States v. Castaneda, 162 F.3d 832, 836 10
See, e.g., United States v. Wilder, 15 F.3d
(5th Cir. 1998), in the context of non-prosecu- 1292, 1301 (5th Cir. 1994).
tion agreements the government is prevented
11
by due process considerations from unilaterally See United States v. Goldfaden, 959 F.2d
determining that a defendant is in breach and 1324, 1328 (5th Cir. 1992) (“We thus conclude
nullifying the agreement. At the very least, that a prosecutor’s breach of a plea agreement can
notice must have been given to Miller that the amount to plain error.” (emphasis added)).
government considered him in breach, thus 12
In addition to the disputed statements, the
giving him the opportunity to debate this issue determination that Miller obstructed justice and did
(continued...)
10
those admissions constitutes plain error that
seriously affects the fairness, integrity, or pub- The general rule in this circuit is that claims
lic reputation of judicial proceedings. This is of ineffective assistance will not be considered
especially so in Miller’s case, where he most on direct appeal “when, as here, it was not
certainly breached the agreement, and his own raised in the district court, because there has
failure to object likely led to the government’s been no opportunity to develop record evi-
not declaring this breach in the district court. dence on the merits of the claim.” United
Therefore, in contrast to cases such as Gold- States v. Lampaziana, 251 F.3d 519, 527 (5th
faden, Miller’s sentencing did not constitute Cir. 2001). Accordingly, we decline the invi-
plain error.13 tation to address Miller’s ineffective assistance
of counsel claim, and we express no opinion as
C. to its merits.
Miller avers that his counsel’s failure to ob-
ject to the application of the grouping rules D.
constituted ineffective assistance of counsel in Miller asserts that application of the sen-
violation of the Sixth Amendment. Specifi- tencing guidelines violates the Sixth Amend-
cally, in following the recommendation of the ment. This argument was initially grounded in
PSR, the court did not group the money laun- Blakely v. Washington, 124 S. Ct. 2531, 2537
dering offense with the tax evasion offense, the (2004), in which the Court ruled unconstitu-
result being a one-level upward adjustment to tional the State of Washington’s sentencing
the offense level for the money laundering scheme because it mandated the imposition of
offense. Miller did not object. sentences based on facts not reflected in the
verdict or admitted by the defendant. After
briefing and argument had been concluded in
12
(...continued) the instant case, the Court issued United States
not accept responsibility could easily have been v. Booker, 125 S. Ct. 738 (2005), explicitly
based on the government’s discovery of only one extending the fundamental holding of Blakely
safe, rather than the two Miller reported, at the to the federal sentencing guidelines and declar-
house. Add to this discrepancy the strange re-ap-
ing that their mandatory nature runs afoul of
pearance of the safe at the hands of Miller’s father-
the Sixth Amendment. Essentially, Booker
in-law, and it is further obvious that the govern-
ment was well aware something was amiss. The makes the guidelines merely advisory. See
recordings of Miller’s phone conversations, on United States v. Mares, No. 03-21035, 2005
which the probation officer relied in making his U.S. App. LEXIS 3653, at *17 (5th Cir. Mar.
recommendation in the PSR, and on which the 4, 2005).
court, in turn, explicitly relied, make certain that
there was ample evidence of Miller’s mischievous Nevertheless, the Court explicitly cautioned
scheme. that “we expect reviewing courts to apply or-
dinary prudential doctrines, determining, for
13
Given our conclusion that any breach of the example, whether the issue was raised below
cooperation agreement by the government was ei- and whether it fails the ‘plain-error’ test.”
ther justified by Miller’s own breach or was not
Booker, 125 S. Ct. at 769. Miller concedes
plain error because of the substantial amount of ad-
that this standard of review applies.
ditional evidence on which the court relied, we do
not reach the government’s contention that Miller’s
statements are not covered by § 1B1.8. Before we can reverse based on error not
11
raised at trial, there must be “‘(1) error, (2) Because Booker renders the guidelines ad-
that is plain, and (3) that affects substantial visory, if we were to remand because of an er-
rights.’” Mares, 2005 U.S. App. LEXIS ror under Booker the district court would have
3653, at *23 (quoting United States v. Cotton, the discretion to impose the same sentence by
535 U.S. 625, 631.14 The plainness or ob- giving consideration to the guidelines and the
viousness of the error is assessed by reference other factors enumerated in 18 U.S.C.
to the law as it exists at the time of appellate § 3553(a). Miller can point to nothing in the
consideration.15 Therefore, in this case, where record to demonstrate that, operating under an
the sentencing court applied the guidelines and advisory sentencing scheme, the district court
made factual findings that were neither au- would have reached a significantly different re-
thorized by the verdict nor admitted by the sult. Miller’s substantial rights, therefore, have
defendant, there is an error that is clear or not been affected, and he is unable to show
obvious under Blakely and Booker. See Cot- plain error.
ton, 535 U.S. at 632.
AFFIRMED.
The crucial question, therefore, is whether
the error affects Miller’s substantial rights. In
Mares, 2005 U.S. App. LEXIS 3653, at *27-
*28, we said that “the pertinent question is
whether [the defendant] demonstrated that the
sentencing judgeSSsentencing under an advi-
sory scheme rather than a mandatory
oneSSwould have reached a significantly
different result.” That is, the plain error stan-
dard places the
burden of proof [on the defendant] and
requires “the defendant to show that the
error actually did make a difference: if it is
equally plausible that the error worked in
favor of the defense, the defendant loses; if
the effect of the error is uncertain so that
we do not know which, if either, side it
helped the defendant loses.”
Id. (quoting United States v. Rodriguez, 398
F.3d 1291, 1300 (11th Cir. 2005)).
14
See also Olano, 507 U.S. at 732; Calverley,
37 U.S. at 162.
15
Cotton, 535 U.S. at 631-32; Johnson v.
United States, 520 U.S. 461, 467-68 (1997).
12
| {
"pile_set_name": "FreeLaw"
} |
875 F.2d 639
13 Fed.R.Serv.3d 1339
Randolph J. GREENE, Petitioner-Appellant,v.Edwin MEESE, III, et al., Respondents-Appellees.
No. 87-2344.
United States Court of Appeals, Seventh Circuit.
Argued Feb. 13, 1989.
Decided May 24, 1989.
Terry Miller, Lorri Staal, Law Students, Northwestern University School of Law, Chicago, Ill., for petitioner-appellant.
William D. Braun, U.S. Dept. of Justice, Washington, D.C., for respondents-appellees.
Before WOOD, Jr., POSNER and COFFEY, Circuit Judges.
POSNER, Circuit Judge.
1
The plaintiff is a federal prisoner who complains that while incarcerated in the federal prison at Terre Haute in the fall of 1983 he was denied due process of law by being repeatedly subjected to disciplinary sanctions in retaliation for having rejected homosexual solicitations by guards and resisted improper searches having homosexual overtones. The disciplinary proceedings led to his spending 119 days in administrative segregation (an approximation to solitary confinement) and losing 70 days of statutory "good time" credits; in addition his eligibility for parole was undermined. The suit, brought in 1987 against then Attorney General Meese, the warden of Terre Haute, and a number of prison officers, seeks both the restoration of the good-time credits and parole-eligibility status, and the payment of damages to compensate Greene for being wrongfully punished. The district court construed Greene's complaint as an application for habeas corpus and dismissed the suit because he had not exhausted his administrative remedies.
2
On the surface at least, this is a hybrid civil rights-habeas corpus suit. Insofar as Greene seeks damages for the infringement of his constitutional right to due process of law, it is a Bivens-type civil rights suit (see Bivens v. Six Unknown Named Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971); Carlson v. Green, 446 U.S. 14, 100 S.Ct. 1468, 64 L.Ed.2d 15 (1980)), that is, a suit brought directly under the Constitution against federal officers. Normally a civil rights plaintiff is not required to exhaust his administrative or judicial remedies. But insofar as Greene seeks the expungement of disciplinary sanctions in order to shorten his stay in prison, he seeks relief obtainable only in a habeas corpus proceeding, Preiser v. Rodriguez, 411 U.S. 475, 93 S.Ct. 1827, 36 L.Ed.2d 439 (1973); Larsen v. Sielaff, 702 F.2d 116, 118 (7th Cir.1983), where exhaustion--of state judicial remedies in the case of state prisoners and federal administrative remedies in the case of federal prisoners--is required. Statutory for state prisoners, see 28 U.S.C. Sec. 2254(b), the requirement of exhaustion is judge-made for federal ones, see, e.g., Del Raine v. Carlson, 826 F.2d 698, 703 (7th Cir.1987); Sanchez v. Miller, 792 F.2d 694, 697 (7th Cir.1986), but it is a requirement nonetheless. Greene's suit is based on seven separate incidents in which he was punished for alleged disciplinary infractions, and he concedes that the record does not demonstrate that in every instance he exhausted the administrative remedies available to him in the Bureau of Prisons for the rectification of such punishment.
3
The rule of complete exhaustion announced in Rose v. Lundy, 455 U.S. 509, 102 S.Ct. 1198, 71 L.Ed.2d 379 (1982), is an interpretation of section 2254(b), the provision requiring exhaustion by state prisoners; as far as we know, the question whether complete exhaustion should be required of federal prisoners as well had not arisen until this case. Insofar as Rose emphasizes considerations of comity--more concretely, the desirability of the federal courts' respecting decisions by courts of (nominally) other sovereigns, the states--it has no application to a habeas corpus case brought by a federal prisoner. But the opinion in Rose also mentions the desirability of avoiding piecemeal litigation, see id. at 520-21, 102 S.Ct. at 1204, and in support cites a federal-prisoner case, Sanders v. United States, 373 U.S. 1, 18, 83 S.Ct. 1068, 1078, 10 L.Ed.2d 148 (1963). These bits of authority are not definitive, but we think the rule of complete exhaustion should apply to federal-prisoner cases. If Greene wants a federal district court to adjudicate a group of interrelated claims all involving the same conduct at the same prison in the same period of time, he ought to exhaust all the claims so that the district judge can consider them in one lump at one time.
4
Greene advances a number of arguments against requiring exhaustion in the circumstances of this case. One is that exhaustion would be futile because the higher-ups in the Bureau of Prisons are bound to turn down Greene's remaining requests for relief, just as they turned down his other claims. No doubt denial is the likeliest outcome, but that is not sufficient reason for waiving the requirement of exhaustion. Lightning may strike; and even if it doesn't, in denying relief the Bureau may give a statement of its reasons that is helpful to the district court in considering the merits of the claim. It is true that a request by Greene for relief now would be untimely; it is almost six years since he was disciplined and he should have complained within 15 days of each incident. 28 C.F.R. Sec. 542.13(b). But "where the inmate demonstrates a valid reason for delay [in filing his complaint], an extension in filing time shall be allowed." Sec. 542.13. Perhaps the extension can be sought even after the time for filing has expired--the regulations are silent on this.
5
The Bureau must be given a chance to clean up its act before the courts are asked to intervene. If the Bureau declines to act, the question will then arise whether Greene's delay in seeking administrative relief on the unexhausted claims should also forfeit his right to seek judicial relief. Even if the answer is "yes," this will not put Greene completely out of court; he will be allowed to proceed on the five claims that he did exhaust in timely fashion.
6
Greene next argues that no exhaustion should be required here because this is not really a habeas corpus case--a case about the duration of confinement--but a damages case. This would be a good argument if the target of his complaint were homosexual impositions or other indignities visited on him by the guards, for these indignities would not be redressed by a shortening of Greene's remaining term of imprisonment; indeed, such a remedy would bear no relation to the nature of the wrong. But that is not his target: Greene alleges that he successfully resisted the homosexual solicitations. Nor does he (in this court anyway) complain directly about the patdown searches and body-cavity inspections that he contends were homosexual assaults, beyond a passing reference in his brief to injury from "unreasonable searches." His complaint, at least his principal complaint, is about the punishment he received (for resisting the assaults, he says), and he seeks restoration of his lost good-time credits and of his former parole-eligibility status as well as damages. The effect of restoration of those lost credits and parole status would be to shorten the expected term of his imprisonment, and this makes the suit a challenge to the duration of his confinement and hence a habeas corpus suit. Preiser v. Rodriguez, supra, 411 U.S. at 494, 93 S.Ct. at 1838; Hanson v. Heckel, 791 F.2d 93 (7th Cir.1986) (per curiam); see also Crump v. Lane, 807 F.2d 1394 (7th Cir.1986); Scruggs v. Moellering, 870 F.2d 376, 379 (7th Cir.1989).
7
This was true, we held in Hanson, even when the prisoner is not asking for a reduction in his prison stay (Hanson was a suit for a declaratory judgment). For if the prisoner proved that he had been wrongfully deprived of his statutory good time, he could not be forbidden to request its restoration in a habeas corpus proceeding later; there is no defense of res judicata to habeas corpus. A prisoner may not circumvent the requirement of complete exhaustion by first suing for damages or a declaratory judgment and then using a favorable judgment in that suit as the basis for requesting a reduction in the length of his imprisonment. Greene's brief coyly states that "there is nothing in the record which demonstrates the effect of [restoring the good-time credits] on the plaintiff's custodial status." But if the effect were nil, there would be no point in asking for their restoration; indeed, that aspect of the case would be moot. What is true is that if the prisoner has been released from prison and seeks not to annul his conviction but only to obtain an award of damages, it is a pure damages suit and the principle of Hanson does not apply. Smith v. Springer, 859 F.2d 31, 35 (7th Cir.1988). But this is not such a case.
8
A panel of this court recently expressed concern about the implications of Hanson if read too broadly. See Viens v. Daniels, 871 F.2d 1328, 1332-1335 (7th Cir.1989). The panel was worried that "the state could insulate every imposition of discipline from attack under section 1983 by simply revoking one hour, one day, of good time as part of every punishment it imposed." Id. at 1333. Two extreme situations should be distinguished. In one the plaintiff by artful pleading seeks to disguise a habeas corpus case as a suit for damages or for a declaratory judgment or for an injunction or whatever; Hanson was such a suit. In the other the prison authorities seek to insulate themselves from damages liability by making deprivation of good time a part of every disciplinary sanction. In between are genuine hybrid suits. This would be one if, while attacking the validity of his disciplinary punishment and seeking restoration of the good time credits that he lost as a result of that punishment, Greene were also seeking damages for the disutility that he incurred from spending 119 days in administrative segregation, instead of in ordinary imprisonment with its less restrictive conditions. But Greene's brief in this court, prepared by highly competent court-appointed counsel, does not suggest that the modest damages sought in the complaint ($15,000, of which $5,000 are punitive) are to compensate Greene for the indignities of administrative segregation, as distinct from monetizing the loss in good-time credits and parole-eligibility status.
9
Greene's brief stresses the deterrent effects of a damages award; so far as compensation is concerned, however, the brief states only that "the consequences of prison officials' failure to afford Mr. Greene due process of law were punitive segregation, adverse impact on parole eligibility, and loss of statutory good time, all of which were losses giving rise to money damages." It is unclear from this statement whether or how much damages are being sought for the restrictive conditions of administrative segregation, as distinct from the fact of punishing Greene and the consequences of that fact for the length of his imprisonment. It seems fairly clear, however, that the principal (if not sole) damages sought are for the possible lengthening of his prison stay as a result of the disciplinary proceedings--and insofar as this is so, the claim for damages is spurious, given that Greene, unlike the petitioner in Smith v. Springer, supra, is still in prison. If Greene was disciplined unlawfully, he is entitled to the restoration of his good-time credits and parole-eligibility status, mooting the claim for damages for their deprivation. For recall that he is demanding the restoration of these things, and if they are restored he will have incurred no damages from their (temporary) deprivation. If on the other hand he was disciplined lawfully, he is entitled neither to restoration of his good-time credits and parole-eligibility status nor to damages for their deprivation, for on that assumption he suffered no wrong. The district judge was therefore correct in concluding that this is really, or at least predominantly, a habeas corpus case, in which exhaustion, meaning complete exhaustion, is required.
10
The government goes further than we need go in this case and argues that exhaustion of administrative remedies should be required in every Bivens case attacking a prison disciplinary sanction, even if only damages are sought. As we noted in Del Raine v. Carlson, supra, 826 F.2d at 704, the circuits are divided on this issue. The issue would have no possible practical significance in a case such as the present if it were plain that exhaustion was required in every hybrid case, as the Third Circuit has held. See Veteto v. Miller, 794 F.2d 98 (3d Cir.1986); Lyons v. U.S. Marshals, 840 F.2d 202, 204 (3d Cir.1988). But we rejected this position in Viens, 871 F.2d at 1334, on the authority of Wolff v. McDonnell, 418 U.S. 539, 554, 94 S.Ct. 2963, 2973, 41 L.Ed.2d 935 (1974), which held that when a prisoner seeks damages as well as restoration of good-time credits, he can proceed in federal court with his damages claim even while exhausting his remedies in state court with regard to the restoration of good time. Wolff and Viens, however, are state-prisoner cases brought under 42 U.S.C. Sec. 1983 rather than under the Constitution directly. Federal judges may have greater freedom in formulating the procedural requirements for suits under the Constitution than they have in interpreting section 1983.
11
Whether complete exhaustion of Bureau of Prison remedies should be required even in cases where the prisoner is also seeking damages, a remedy not found in the Bureau's arsenal, may depend on what the damages are being sought for. Greene contends not that he was beaten up by the guards or that he was denied medical care or that conditions in the federal prison at Terre Haute, Indiana are reminiscent of the Black Hole of Calcutta, India, but that he was punished for the lawful activity of resisting homosexual advances and assaults. Unless exhaustion is required in such a case, prisoners will have an incentive to bypass the administrative procedures for correcting unlawful prison discipline by suing for damages and raising the identical issues in such suits that they would have raised in a complaint to the Bureau of Prisons if they had filed one. The danger is especially acute in a case such as this, where the claim for damages is largely, perhaps entirely, a vehicle for obtaining a reversal of the disciplinary judgment. Greene's claim for damages will be largely, perhaps entirely, moot if he succeeds in getting his good-time credits and parole-eligibility status restored, and will be rejected on the merits otherwise.
12
Greene argues, finally, that, at the very least, the district judge should not have dismissed the case with prejudice. Indeed he should not have; the proper remedy for a failure to exhaust administrative remedies is to dismiss the suit without prejudice, thereby leaving the plaintiff free to refile his suit when and if he exhausts all of his administrative remedies or drops the unexhausted claims. See, e.g., Donnelly v. Yellow Freight System, Inc., 874 F.2d 402, 410 n. 11 (7th Cir. 1989); Nutall v. Greer, 764 F.2d 462, 464 (7th Cir.1985). The judge should have been explicit that he was dismissing the case without prejudice, since Rule 41(b) of the Federal Rules of Civil Procedure provides that "unless the court in its order for dismissal otherwise specifies, ... any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits," and is therefore with prejudice. A dismissal for failure to exhaust administrative remedies is not, as it might appear to be, jurisdictional. See Granberry v. Greer, 481 U.S. 129, 107 S.Ct. 1671, 1673, 95 L.Ed.2d 119 (1987) (state prisoners); Del Raine v. Carlson, supra, 826 F.2d at 703. And although the norm regarding the character of dismissals for failure to exhaust administrative remedies may be sufficiently well established to override the implication from Rule 41(b) of the judge's failure to specify that he was dismissing Greene's case without prejudice, it would be better if judges were explicit on this score. We are therefore modifying the order of dismissal to make clear that it is without prejudice to Greene's refiling his suit when and if he completely exhausts his administrative remedies.
13
MODIFIED AND AFFIRMED.
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261 F.3d 993 (10th Cir. 2001)
UNITED STATES OF AMERICA, Plaintiff-Appellee,v.ROBERT C. LAHUE, Defendant-Appellant.UNITED STATES OF AMERICA, Plaintiff-Appellee,v.DAN ANDERSON, Defendant-Appellant.UNITED STATES OF AMERICA, Plaintiff-Appellee,v.RONALD H. LAHUE, Defendant-Appellant.THE AMERICAN HOSPITAL ASSOCIATION; FEDERATION OF AMERICAN HEALTH SYSTEMS; ASSOCIATION OF AMERICAN MEDICAL COLLEGES; AMERICAN OSTEOPATHIC ASSOCIATION; MISSOURI HOSPITAL ASSOCIATION; NATIONAL ASSOCIATION OF CRIMINAL DEFENSE LAWYERS, Amici Curiae.
Nos. 99-3344, 99-3347, 99-3352
UNITED STATES COURT OF APPEALS TENTH CIRCUIT
August 17, 2001
Appeal from the United States District Court for the District of Kansas (D.C. Nos. 98-CR-20030-03, 98-CR-20030-01, 98-CR-20030-04)[Copyrighted Material Omitted]
Tanya J. Treadway; Jackie N. Williams, United States Attorney, Topeka, KS; William H. Bowne, Department of Justice, Washington, DC, with her on the brief, Assistant United States Attorney, Topeka, KS, for Plaintiff-Appellee.
Bruce C. Houdek of Bruce C. Houdek, P.C., Kansas City, MO, for Defendant-Appellant Robert C. LaHue.
James R. Wyrsch; Keith E. Drill, Jacqueline A. Cook, and Cheryl A. Pilate with him on the briefs, of Wyrsch Hobbs Mirakian & Lee, P.C., Kansas City, MO, for Defendant-Appellant Dan Anderson.
Jeffrey D. Morris of Bryan Cave LLP, Overland Park, Kansas, for Defendant-Appellant Ronald H. LaHue.
Thomas S. Crane, Tracy A. Minder, Jeffrey D. Clements and Theresa M. Claffey, of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston, MA, filed an amici curiae brief for The American Hospital Association, Federation of American Health Systems, Association of American Medical Colleges, and American Osteopathic Association, Missouri Hospital Association.
Vicki Mandell-King, National Association of Criminal Defense Lawyers, Denver, Colorado; Barbara E. Bergman, National Association of Criminal Defense Lawyers, Albuquerque, NM; Philip C. Zimmerman of Holme Roberts & Owen LLP, Denver, CO, filed an amicus curiae brief for National Association of Criminal Defense Lawyers.
Before ANDERSON, BALDOCK and BRORBY, Circuit Judges.
ORDER
BRORBY, Circuit Judge.
1
These matters are before the court on appellant's petitions for panel rehearing and for rehearing en banc. The petitions for rehearing are denied.
2
The petitions for rehearing en banc were transmitted to all of the judges of teh court who are in regular active service as required by Fed.R.App.P.35. As no member of the panel and no judge in regular active service on the court requested that the court be polled, those petitions are also denied.
3
A revised panel opinion is attached to this order.
OPINION
4
Defendants Dan Anderson, Dr. Robert LaHue, and Dr. Ronald LaHue were convicted by a jury for violations of the Medicare Antikickback Act ("Act"), 42 U.S.C. 1320a-7b(b), which criminalizes any remuneration knowingly and willfully offered, paid, solicited, or received in exchange for Medicare or Medicaid patient referrals, and violation of the conspiracy statute, 18 U.S.C. 371. See United States v. Anderson, 85 F. Supp. 2d 1047, 1053 (D. Kan. 1999). In ruling on defendants' objections during trial and denying their motions for a new trial, the district court concluded: (1) the jury instructions on the Act correctly utilized the "at least in part" or "one purpose" standard; (2) Rule 801(d)(2)(E) of the Federal Rules of Evidence contemplates statements made pursuant to a lawful common plan, which justified the court's admission of over sixty documents under the rule; (3) two variances between the indictment and the evidence at trial did not prejudice defendants' right to a fair trial; and (4) it correctly denied defendants' request to provide judicial immunity to selected witnesses in light of this circuit's case law and no indication the government engaged in a deliberate attempt to distort the fact-finding process. See Anderson, 85 F. Supp. at 1069-72, 1074-75, 1079-81. We have jurisdiction pursuant to 28 U.S.C. 1291 and affirm.
I. Background1
5
As a guide, the individuals discussed in this opinion can be broken down into three groups. First, osteopathic physicians Robert and Ronald LaHue ("the LaHues") served as the principals in Blue Valley Medical Group ("Blue Valley"), a specialized medical practice providing care to patients in nursing homes and other residential care facilities. See McClatchey, 217 F.3d at 826-27; Anderson, 85 F. Supp. 2d at 1052. Second, Baptist Medical Center ("Baptist"), a Kansas City, Missouri hospital, employed:
6
Anderson, Dan (President, Chief Executive Officer),
7
Eckard, Tom (Director of Geriatric Services),
8
Flynn, Dixie (Director of Geriatric and Gerontology Services),
9
Grim, Sarah (Director of Alternative Care Services),
10
Grimes, Deborah (Director of Geriatric Services),
11
Keel, Ronald (Vice President),
12
McClatchey, Dennis (Senior Vice President, Chief Operating Officer),
13
McGrath, Kevin (Vice President),
Probst, Gerard (Chief Financial Officer)
14
See McClatchey, 217 F.3d at 827; Anderson, 85 F. Supp. 2d at 1052, 1054-57. Third, attorneys Ruth Lehr and Mark Thompson represented Baptist at various times during the course of the alleged conspiracy. See McClatchey, 217 F.3d at 827-28; Anderson, 85 F. Supp. 2d at 1052.
15
In the early 1980s, the LaHues were part-time faculty members at University Hospital, where they referred, admitted, and treated their patients. See Anderson, 85 F. Supp. 2d at 1053. In 1984, the LaHues sought an increase in salary from University Hospital in return for their continued patient referrals, in light of a competing offer from Baptist for $120,000 to $140,000 per year for the same patient referrals. See id. at 1054. University Hospital declined their request. See id.
16
In 1985, Baptist entered into a contract ("1985 contract") with the LaHues making them "Co-Directors of Gerontology Services." McClatchey, 217 F.3d at 827; see Anderson, 85 F. Supp. 2d at 1054. By this time, the LaHues had approximately 3,500 patients in the Kansas City metropolitan area and a correlatively large number of hospital referrals. See Anderson, 85 F. Supp. 2d at 1054-55. Mr. Probst testified the negotiations were "backwards"--establishing the fee first and only then agreeing to the services the LaHues would provide in return--and, from his and Messrs. Anderson, McClatchey, and Keel's perspective, were grounded in the hospital receiving patient referrals.2 McClatchey, 217 F.3d at 827. Mr. Probst described the resulting arrangement as unlike any he had seen in twenty years, and one with "the highest request for an annual consulting fee that I had experienced or had been involved with."
17
The arrangement evolved into a consulting contract in 1986 between Baptist and the LaHues ("1986 agreement"). See Anderson, 85 F. Supp. 2d at 1055-56. The 1986 agreement stated Baptist "desires to obtain the professional services of the [LaHues] to assist it and its affiliate organizations in the development and maintenance of a comprehensive Geriatrics Program, including medical education of health care professionals, quality of care standards, and philosophical and promotional matters relating to the care of the aged." The LaHues' duties under the 1986 agreement included: (1) clinical instruction, training, and information to Baptist's professional staff, including the Adult Health Care Services Clinic ("Clinic"), Emergency Services, Social Services, the medical staff in general, and the hospital administration; (2) instruction and training to the family practice residents and medical students; (3) consultation relating to the development of geriatrics programs and the expansion and utilization of Baptist's services for the aged; and (4) assisting in the completion of applications or reviewing patient care data for grants and studies relating to the medical care and institutional treatment of the aged.
18
Pursuant to the 1985 contract and the 1986 agreement, Baptist paid $75,000 annually to each of the LaHues from 1985 to 1993, with the exception of 1990 when the LaHues each received $68,750. See McClatchey, 217 F.3d at 827 & n.2; Anderson, 85 F. Supp. 2d at 1054.3 Mr. Anderson directed those payments. See Anderson, 85 F. Supp. 2d at 1054. When the payments began, Blue Valley referred massive numbers of patients to Baptist, with a corresponding halt in referrals to University Hospital. See Anderson, 85 F. Supp. 2d at 1062. Blue Valley referred 8-10% of Baptist's hospital admissions and over 90% of the out-patient volume in its Clinic, which made it Baptist's largest referral source.
19
Ms. Grim, Baptist's Director of Alternative Care Services from 1984 to 1985, testified that Mr. Anderson: (1) made it clear to her the Baptist-Blue Valley relationship was a business deal in which Baptist would pay money to Blue Valley in return for patient referrals; and (2) told her he was very protective of the Baptist-Blue Valley relationship, because, in her words, Baptist was "going to get patients. It was about occupancy." Ms. Grimes, Baptist's Director of Geriatric Services from approximately 1986 to 1988, testified she was not aware of the 1985 contract, which purportedly made the LaHues Co-Directors of Gerontology Services.
20
In the summer of 1985, the LaHues approached Mr. Anderson for help in managing their practice. See McClatchey, 217 F.3d at 827; Anderson, 85 F. Supp. 2d at 1055, 1064. Mr. Anderson placed one of Baptist's employees, Thomas Eckard,4 with Blue Valley soon thereafter, but kept him on the Baptist payroll. See McClatchey, 217 F.3d at 827; Anderson, 85 F. Supp. 2d at 1055. "Although [Mr.] Eckard's official title was Director of Geriatric Services for Baptist, [he] worked at [Blue Valley] and effectively acted as [Blue Valley]'s manager." McClatchey, 217 F.3d at 827.
21
Based on his discussions with Messrs. Anderson and McClatchey, and others, Mr. Eckard understood his primary job responsibility was to maintain Baptist's relationship with Blue Valley in order to ensure the continued flow of patients to the hospital. See Anderson, 85 F. Supp. 2d at 1055. Mr. Eckard remained on the Baptist payroll and worked at Blue Valley in this capacity for approximately eight years. See id.
22
Mr. Anderson and the Baptist management team were aware Blue Valley never compensated Baptist for Mr. Eckard's management services. Drawing on his thirty-two-year career in the health care industry, Mr. Anderson testified he was "not aware of any [situation] that's identical to what we had with Blue Valley Medical Group and Tom Eckard." Mr. McClatchey testified it was a one-of-a-kind relationship.
23
Mr. Eckard described the services provided by the LaHues pursuant to the 1985 contract as "'minimal to none.'" Anderson, 85 F. Supp. 2d at 1056 n.6, 1062 (quoting Mr. Eckard's testimony). Indeed, with Mr. Anderson's approval, the relationship changed to a consulting agreement in 1986, because the LaHues did not perform their duties under the 1985 contract. Id. at 1056, 1065. However, this change did not significantly affect the amount of services the LaHues provided to Baptist. Numerous witnesses "testified that the LaHues performed very few actual services in return for the substantial annual sum they were paid." Id. at 1062.
24
For example, Mr. Eckard testified his observations over the eight and one-half years of the Baptist-Blue Valley relationship revealed the LaHues did not provide the enumerated services in the agreements on a routine basis. Specifically, Mr. Eckard testified the LaHues: (1) never operated the Clinic; (2) only went on rounds with the Clinic staff "four or five times"; (3) provided "very little" in-service medical education and training to Baptist personnel; (4) spent "very minimal" amounts of time meeting with Baptist emergency room personnel on issues other than patient care; (5) only met with the emergency room nurses "two or three times"; and (6) trained Baptist family practice residents just "a few times."
25
Ms. Grimes sent Mr. McClatchey the following memorandum on March 3, 1987:
26
The [Blue Valley] contract, effective June 1, 1986, stipulated scheduled activities to be carried out through the year (see enclosed). As of this date only one activity, quarterly staff meetings, has been implemented. I feel that it is in Baptist Medical Center's best interest to promptly implement the activities as outlined in the contract.
27
See Anderson, 85 F. Supp. 2d at 1056.
28
Ms. Flynn, Baptist's Director of Geriatric and Gerontology Services from 1988 to 1990, had operational responsibility for the Clinic and met weekly with Mr. Anderson, who she characterized as "very knowledgeable" regarding the Clinic and its operation. She testified the LaHues did not provide her any administrative consulting regarding supervision, budgeting, policy and procedure development, or standard of care development for the Clinic. Further, all the clinical development work was performed by Ms. Flynn and others; the LaHues only made recommendations as to the types of clinics to be created.
29
Regarding the services listed in the 1986 agreement as those sought by Baptist from the LaHues, Ms. Flynn testified: (1) the LaHues did nothing to develop a comprehensive geriatrics program at Baptist; (2) she did not observe them providing any medical education to health care professionals; (3) they had "very limited" contact with the physicians who treated their patients at Baptist; and (4) did not contribute regarding quality of care issues. Turning to the LaHues' enumerated duties in the 1986 agreement, Ms. Flynn testified she neither observed nor knew of the LaHues: (1) providing appropriate clinical instruction and training to the professional staff at Baptist; (2) performing rounds with Baptist personnel; (3) providing instruction or training to the Baptist family practice residents; (4) developing geriatric programs or expansion and utilization of Baptist services; and (5) developing grants or studies. Most importantly, none of the Baptist management team ever asked her whether the LaHues provided the required services. She also testified she would not have budgeted any money for the services the Clinic received from the LaHues. In summary, she stated: "I felt more like I was working for them rather than them being available to me," and, had she known about the $150,000 payments to the LaHues per year, she stated: "I would have been alarmed."
30
In late 1991/early 1992, Mr. McGrath5learned from Dr. Robert LaHue that he and Dr. Ronald LaHue were not performing some of the services listed in the 1986 agreement. See McClatchey, 217 F.3d at 828. Further, Mr. McGrath received documentation the LaHues provided consulting for only approximately two hours per week. See id. at 830. Mr. McGrath discussed this information with Messrs. Anderson, McClatchey and Thompson, and expressed his concern the two hours per week did not justify the fees Baptist was paying the LaHues. See id. at 828. Messrs. Anderson, McClatchey, and Thompson neither disputed the accuracy of nor told Mr. McGrath the LaHues were performing other services not reflected in this documentation.
31
Nonetheless, the payments from Baptist to the LaHues continued. During 1993 and 1994, when it appeared the relationship with the LaHues might soon end, "Mr. Anderson worked to develop a strategy to replace the [Blue Valley] patients but did nothing to replace the LaHues' consulting services."6 See Anderson, 85 F. Supp. 2d at 1065. As stated by the district court in its ruling on the defendants' post-trial motions: "Mr. Anderson knew the payments he directed were more than fair market value for consulting services, that the services specified ultimately proved to be not entirely bona fide, and that the services specified were not sufficiently being performed." Id.
32
The LaHues and Baptist benefitted greatly from their relationship. The LaHues received over $1.8 million from Baptist as a result of the various contracts and Mr. Eckard's unreimbursed salary, and Baptist received over $39.5 million from Medicare for services rendered to Blue Valley's patients.
33
With Mr. Eckard's assistance, Blue Valley entered into similar arrangements or contracts with four other hospitals: (1) from 1991 to 1994, St. Joseph's Medical Center paid Blue Valley over $341,000 and received over $4.9 million from Medicare; (2) from 1990 to 1992, Deaconess Medical Center paid Blue Valley $125,000 and received over $2 million from Medicare; (3) from 1992 to 1994, Bethany Medical Center paid Blue Valley over $169,000 and received over $3.5 million from Medicare; and (4) from 1992 to 1994, Alexian Brothers Hospital paid Blue Valley $190,000 and received over $5.6 million from Medicare. See Anderson, 85 F. Supp. 2d at 1060-61. Around 1992, Liberty Hospital refused the LaHues' offer to enter a similar arrangement or contract. See id. at 1061.
II. Procedural History
In pertinent part, the Act provides:
34
(1) whoever knowingly and willfully solicits or receives any remuneration ... directly or indirectly, overtly or covertly, in cash or in kind (A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program ...
35
. . . .
36
shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both.
37
(2) whoever knowingly and willfully offers or pays any remuneration ... directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person --
38
(A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program ...
39
. . . .
40
shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both.
41
42 U.S.C. 1320a-7b(b). Baptist executives Mr. Anderson, Mr. McClatchey and Mr. Keel as well as attorneys Ms. Lehr and Mr. Thompson were each charged with one count of conspiracy to violate the Act with the LaHues and six other hospitals, and one substantive count of violating the Act. See Anderson, 85 F. Supp. 2d at 1052. The LaHues were each charged with one count of conspiracy to violate the Act with Baptist and six other hospitals, seven substantive counts of violating the Act, and a false claims conspiracy count in violation of 18 U.S.C. 286. See id. Dr. Robert LaHue was also charged with threatening a witness in violation of 18 U.S.C. 1512. See id.
42
At the close of the government's case, the district court: (1) granted the attorneys' motions for acquittal; (2) ruled the government failed to present sufficient evidence to demonstrate that any defendant but the LaHues participated in a conspiracy extending to the six other hospitals;7 (3) severed the false claims and witness tampering counts as improperly joined pursuant to Fed. R. Crim. P. 8(b);8 and (4) dismissed one of the substantive counts against the LaHues on statute of limitations grounds. See id. at 1053.
43
On completion of a nine-week trial, the jury: (1) convicted Mr. Anderson on both charges; (2) convicted Mr. McClatchey on both charges; (3) acquitted Mr. Keel on the basis of his statute of limitations defense; (4) convicted Dr. Ronald LaHue of the conspiracy charge and four of the substantive charges of violating the Act; and (5) convicted Dr. Robert LaHue of the conspiracy charge and six of the substantive charges of violating the Act. See id. The district court granted Mr. McClatchey's motion for judgment of acquittal or, in the alternative, a new trial, and granted Dr. Ronald LaHue's motion for acquittal as to the substantive count charging him with a violation of the Act with regard to Alexian Brothers Hospital. See id. at 1051-52, 1061, 1063-68.
44
The district court: (1) sentenced Mr. Anderson to fifty-one months imprisonment, a $75,000 fine, a $100 special assessment, and three years supervised release; (2) sentenced Dr. Ronald LaHue to thirty-seven months imprisonment, a $25,000 fine, a $200 special assessment, and three years supervised release; and (3) sentenced Dr. Robert LaHue to seventy months imprisonment, a $75,000 fine, $142,040 restitution, a $350 special assessment, and three years supervised release.
45
There are four issues on appeal. All three defendants raise the following two issues: (1) whether the district court adopted an improperly broad construction of the Act, thereby erroneously instructing the jury under a "one purpose test" which effectively criminalized innocent conduct; and (2) whether the district court erred in admitting numerous co-conspirator statements under a so-called "joint venture" theory, thereby violating Fed. R. Evid. 801(d)(2)(E) and defendants' constitutional right to confrontation. Mr. Anderson and Dr. Robert LaHue raise the third issue: (3) whether the district court erred in failing to grant a new trial based on prejudicial variances between the indictment and evidence at trial. Finally, the LaHues raise the fourth issue: (4) whether the district court abused its discretion by refusing to grant use immunity to twelve proposed defense witnesses who invoked the Fifth Amendment and refused to testify after the government identified them as unindicted co-conspirators in this case.
46
Before the government filed its consolidated brief in this appeal, another panel of this court published its opinion resolving the government's appeal of the district court's judgment of acquittal and the alternative grant of a new trial for Mr. McClatchey. See McClatchey, 217 F.3d at 826. This court reversed the district court's judgment and order, and remanded with instructions to reinstate the jury verdict against Mr. McClatchey. See id. at 836. This opinion is critical to our resolution of the first and third issues on appeal here, as we will detail in those sections of our discussion. See infra Part III.A, C.
III. Discussion
47
A. Jury Instruction on and Construction of the Act
48
Defendants9 claim the applicable jury instructions on the Act--Instruction #3210 for Mr. Anderson and Instruction #3311for the LaHues are incorrect and warrant a new trial. Specifically, they challenge the "at least in part" or "one purpose" standard applied in these two instructions. In other words, they argue a defendant should not be convicted under the Act when his offer, payment, solicitation, or receipt of remuneration was motivated merely in part to induce or in return for referrals; rather, they suggest conviction is only appropriate when the motivation to induce or in return for referrals was the defendant's primary purpose.
49
In their opening briefs filed before the McClatchey panel published its decision defendants correctly noted this was an issue of first impression in this circuit, and argued for the rejection of the "one purpose" standard enunciated by the Third Circuit in United States v. Greber, 760 F.2d 68 (3d Cir.), cert. denied, 474 U.S. 988 (1985). Defendants argued the "one purpose" standard was inappropriate because: (1) "[i]t converts a criminal statute passed with a specific aim to deter and punish abusive practices that threaten the integrity of federally funded health care programs into prohibition of all arrangements, no matter how slight, that implicate patient referrals" (emphasis in original); (2) as a policy matter, it will destroy highly beneficial health care arrangements; (3) statutory construction principles require a narrower interpretation of the Act; (4) the Department of Health and Human Services, charged by statute in 1987 to promulgate regulations defining conduct not subject to the Act's prohibitions, did not provide "any authoritative interpretation of the [Act] as it applied to hospital-physician relationships" during the term of the charged conspiracy; and (5) it leads to "unduly confusing" jury instructions and courts should utilize the actual language of the Act instead. Finally, anticipating this court's potential agreement with Greber, defendants argued the "one purpose" standard renders the Act unconstitutionally vague by vesting undue discretion in "government officials to decide what is legal and what is illegal."
50
In McClatchey, this court rejected Mr. McClatchey's same argument "that the district court improperly instructed the jury it could convict [him] if remuneration was paid 'at least in part' to induce patient referrals." McClatchey, 217 F.3d at 826, 834 (emphasis added). We held Instruction #32 "accurately informed the jury of the applicable law," because "a person who offers or pays remuneration to another person violates the Act, so long as one purpose of the offer or payment is to induce Medicare or Medicaid patient referrals." Id. at 835 (emphasis added). We recognized "[t]he only three Circuits to have decided this issue have all adopted the 'one purpose' test." Id. (citing cases from the Third, Fifth, and Ninth Circuits). Our decision to adopt the "one purpose" test rested upon our review of, and agreement with, the "sound reasoning" of the Third Circuit in Greber. Id. In this appeal, the government claims defendants' challenges to Instructions #32 and 33 are foreclosed by the stare decisis effect of McClatchey, the Act as construed by McClatchey is not void for vagueness under due process, and, therefore, defendants are not entitled to a new trial based on the jury instructions. We agree with the government.12
51
"We are bound by the precedent of prior panels absent en banc reconsideration or a superceding contrary decision by the Supreme Court." In re Smith, 10 F.3d 723, 724 (10th Cir. 1993) (per curiam), cert. denied, 513 U.S. 807 (1994). In this case, defendants' petition for initial hearing en banc on this issue was denied, and the Supreme Court has not decided a case on the Act since our McClatchey decision. See Order filed August 3, 2000. Accordingly, McClatchey is controlling authority,13and we must conclude Instruction #32 accurately informed the jury of the law applicable to Mr. Anderson.
52
Similarly, we conclude the reasoning underlying the McClatchey holding applies equally to remuneration solicited or received in return for Medicare or Medicaid patient referrals. See United States v. Meyers, 200 F.3d 715, 720 (10th Cir. 2000) ("The precedent of prior panels which this court must follow includes not only the very narrow holdings of those prior cases, but also the reasoning underlying those holdings, particularly when such reasoning articulates a point of law."); see also McClatchey, 217 F.3d at 835 (citing the Ninth Circuit's opinion in United States v. Kats, 871 F.2d 105, 108 (9th Cir. 1989) adopting the "one purpose" standard); Kats, 871 F.2d at 108 (adopting the "one purpose" standard and affirming the defendant's conviction for receiving kickbacks in exchange for referral of Medicare payments). As a practical matter, if we held otherwise, we could illogically be faced with a case in which the offeror/payor is deemed to violate the Act, but the offeree/payee is not. Accordingly, we conclude Instruction #33 accurately informed the jury of the law applicable to the LaHues.
53
We turn to defendants' due process challenge to our "one purpose" interpretation of the Act as unconstitutionally vague, which is the only unresolved issue after McClatchey and our above conclusions. "When reviewing a statute alleged to be vague, courts must indulge a presumption that it is constitutional, and the statute must be upheld unless the court is satisfied beyond all reasonable doubt that the legislature went beyond the confines of the Constitution." United States v. Day, 223 F.3d 1225, 1228 (10th Cir. 2000) (quotation marks and citation omitted). "Under settled law, a broadly worded statute can be sufficiently clarified by a narrowing, authoritative interpretation to fend off a vagueness challenge." Dirks v. SEC, 802 F.2d 1468, 1471 (D.C. Cir. 1986).
54
Defendants appear to argue this court's "one purpose" interpretation of the Act is unconstitutional on its face and as applied to them. As a preliminary matter, we hold their facial challenge is prohibited. See United States v. Gaudreau, 860 F.2d 357, 360-61 (10th Cir. 1988). Facial challenges are permitted when the statute "threaten[s] to chill constitutionally protected conduct" and "in some instances ... on pre-enforcement review." Id. at 360-61. In this case, defendants have not argued, nor do we perceive, that the Act threatens to chill constitutionally protected conduct,14and this is not a pre-enforcement situation. See id. at 361. Accordingly, we must examine the Act, as applied in this case, for vagueness in light of the conduct with which defendants are charged. See id.
55
"[T]he void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement." Kolender v. Lawson, 461 U.S. 352, 357 (1983). "The same facets of a statute usually raise concerns of both fair notice and adequate enforcement standards. Hence the analysis of these two concerns tends to overlap. The Supreme Court, however, while ... recognizing the second concern as more important, continues to treat each as an element to be analyzed separately." Gaudreau, 860 F.2d at 359-60. We evaluate each element in turn.15
56
Regarding fair notice, "[o]ne to whose conduct a statute clearly applies may not successfully challenge it for vagueness." Day, 223 F.3d at 1228 (addressing the defendant's vagueness challenge to a federal criminal statute) (quotation marks and citations omitted). In this case, the evidence produced at trial clearly demonstrated defendants negotiated and entered "consulting" contracts in an attempt to camouflage an underlying agreement to exchange remuneration for patient referrals. Therefore, defendants' conduct is the very conduct contemplated by the Act, and they cannot successfully challenge the Act for vagueness as to fair notice. See id. at 1228-29.
57
Specifically, the record shows the following about the Baptist-LaHues relationship:16 (1) the LaHues entered negotiations with Baptist, because University Hospital refused to acquiesce to their demand for an increased salary in return for continued patient referrals; (2) the 1985 contract and 1986 agreement established a fee of $150,000 per year from Baptist to the LaHues; (3) Baptist and the LaHues resolved the fee before discussing an arrangement to justify it; (4) from Mr. Anderson's perspective, these negotiations were grounded in the hospital receiving patient referrals, and he told Ms. Grim the Baptist-Blue Valley relationship was a business deal in which Baptist would pay money to Blue Valley in return for patient referrals; and (5) once Baptist began the payments, Blue Valley referred massive numbers of patients to Baptist with a corresponding halt in referrals to University Hospital.
58
Further evidence substantiates this was a pay-for-patients scheme. For instance, the record on whether the LaHues fulfilled their commitments under the 1985 contract and 1986 agreement and Mr. Anderson's knowledge thereof reveals: (1) Ms. Grimes was unaware of the 1985 contract, which purportedly made the LaHues co-directors of gerontology services, and she documented the LaHues' failure to fulfill all but one of the activities required of them in the 1986 agreement as of March 1987; (2) Ms. Flynn testified the LaHues did nothing required of them in the 1986 agreement from 1988 to 1990, and intimated Mr. Anderson knew this because he was "very knowledgeable" about the Clinic's operations; (3) in late 1991/early 1992, Mr. McGrath met with Mr. Anderson and discussed (a) Dr. Robert LaHue's statement that he and Dr. Ronald LaHue were not performing some of the services listed in the 1986 agreement, and (b) documentation reflecting the LaHues consulted at Baptist for only two hours per week17; and (4) Mr. Eckard testified the LaHues provided minimal to no services under the 1985 contract, and failed to provide the enumerated services in the 1986 agreement on a routine basis, if at all.
59
Finally, we note the evidence supports the following conclusions: (1) although Mr. Anderson controlled whether the payments would continue, he did not stop them when he learned the services were neither entirely bona fide nor performed by the LaHues, and the payments were more than fair market value for consulting services; and (2) when it appeared the Baptist/LaHues relationship might end in 1994, Mr. Anderson worked to develop a strategy to replace the Blue Valley patients, but did nothing to replace the LaHues' consulting services. We therefore conclude the evidence produced at trial demonstrated defendants knew their conduct, which was clearly a pay-for-patients scheme, was prohibited by the Act. Accordingly, their vagueness challenge as to fair notice must fail. See Day, 223 F.3d at 1228-29.
60
Regarding the adequacy of enforcement standards, "[d]ue process requires that legislation state reasonably clear guidelines for law enforcement officials, juries, and courts to follow in discharging their responsibility of identifying and evaluating allegedly illegal conduct." Gaudreau, 860 F.2d at 363. "Where the legislature fails to provide such minimal guidelines, a criminal statute may permit 'a standardless sweep [that] allows policemen, prosecutors, and juries to pursue their personal predilections.'" Kolender, 461 U.S. at 358 (quoting Smith v. Goguen, 415 U.S. 566, 575 (1974)). A statute is unconstitutionally vague if its language and construction by the courts vest authority in law enforcement officers, prosecutors, and juries to assign their own subjective meaning to an element of the offense. See Kolender, 461 U.S. at 355-61; Gaudreau, 860 F.2d at 363-64.18
61
Even if defendants understood the illegality of a pay-for-patients scheme under the Act, they claim the Act is unconstitutionally vague because it encourages arbitrary enforcement. Defendants argue "prosecutors and agency officials may choose to proceed criminally against virtually anyone in the health care community" under the "one purpose" test, which they describe as having "limitless reach." Specifically, they claim the "one purpose" test
62
makes virtually every arrangement between a hospital and a physician unlawful, because the hospital executive will always have patient referrals in mind, at least to some degree....
63
... In other words, in the hospital-physician context at least, according to the district court, all conduct is illegal unless the [Department of Health and Human Services] has expressly, or through an 'advisory' dispensation, made a specific act legal.
64
We disagree for two reasons.
65
First, the Act explicitly prohibits any remuneration knowingly and willfully offered or paid to induce, or solicited or received in return for, Medicare or Medicaid patient referrals. See 42 U.S.C. 1320a-7b(b). Defendants fail to point to any language in the Act or the "one purpose" test that vests authority in law enforcement officers, prosecutors, and juries to assign their own subjective meaning to an element of the offense. We do not perceive any such problem, and conclude a fair reading of the Act provides reasonably clear guidelines for law enforcement officials, juries, and courts to evaluate and discern illegal conduct. See Gaudreau, 860 F.2d at 363-64. Moreover, it is the application of the Act to defendants by law enforcement officials we review; in an "as applied" examination, defendants may not generalize beyond the conduct with which they are charged. See id. at 360-61. As noted above, the evidence produced at trial shows defendants clearly participated in a pay-for-patients scheme. Thus, enforcement of the Act as applied to defendants was not arbitrary or discriminatory. See United States v. Corrow, 119 F.3d 796, 804 (10th Cir. 1997) ("Our analysis of the fairness issue infuses our disposition of the second vagueness concern, the potential for arbitrary and discriminatory enforcement."), cert. denied, 522 U.S. 1133 (1998).
66
Second, defendants' argument ignores the actual instructions given in this case. The district court instructed the jury that
67
[Mr.] Anderson ... cannot be convicted merely because [he] hoped or expected or believed that referrals may ensue from remuneration that was designed wholly for other purposes. Likewise, mere oral encouragement to refer patients or the mere creation of an attractive place to which patients can be referred does not violate the law.
68
The district court further instructed the jury that
69
Robert LaHue and Ronald LaHue cannot be convicted merely because they received remuneration wholly in return for services and also decided to refer patients to the hospital. Likewise, mere referral of patients because of oral encouragement or because of a belief that the place to which patients are to be referred is attractive does not violate the law.
70
This application of the Act by the district court clearly allows business relationships between a hospital and physician where the motivation to enter into the relationship is for legal reasons entirely distinct from the collateral hope for or decision to make referrals. See McClatchey, 217 F.3d at 834 & n.7. Accordingly, contrary to defendants' assertion, the Act, as applied in this case, does not make all conduct illegal when a hospital executive or physician has referrals in mind.
71
In summary, under the controlling authority of McClatchey and for the other reasons articulated herein, we conclude the district court correctly instructed the jury on the Act. We hold the Act, as applied to defendants, is not unconstitutionally vague. Accordingly, defendants are not entitled to a new trial on this issue.
72
B. Rule 801(d)(2)(E) of the Federal Rules of Evidence
73
Rule 801(d)(2)(E) of the Federal Rules of Evidence excludes from the hearsay prohibition "statement[s] by a coconspirator of a party during the course and in furtherance of the conspiracy." Fed. R. Evid. 801(d)(2)(E).
74
In order for statements to be admissible under Rule 801(d)(2)(E), the proponent of the evidence must establish, by a preponderance of the evidence, that: (1) a conspiracy existed; (2) the declarant and the defendant were both members of the conspiracy; and (3) the statements were made during the course of, and in furtherance of, the conspiracy.
75
United States v. Williamson, 53 F.3d 1500, 1517-18 (10th Cir.) (citations omitted), cert. denied, 516 U.S. 882 (1995).
76
Defendants19 claim the district court erroneously admitted over sixty documents under Rule 801(d)(2)(E). Specifically, they challenge the district court's conclusion that the word "conspiracy" includes a lawful common plan, and therefore argue documents related to such a plan are inadmissible. The government argues the district court correctly determined Rule 801(d)(2)(E) contemplates any common plan or enterprise, whether legal or illegal, in which the declarant and Mr. Anderson or the LaHues jointly participated. In the alternative, the government claims any error in admitting the documents under Rule 801(d)(2)(E) was harmless.
77
We conclude the admission of these disputed documents constitutes harmless error.20 See United States v. Jones, 44 F.3d 860, 873 (10th Cir. 1995) ("While we review evidentiary rulings by considering the record as a whole, deference to the trial judge is heightened when reviewing rulings on hearsay questions. This court applies a harmless error standard when reviewing trial courts' rulings on hearsay objections resting solely on the Federal Rules of Evidence."); United States v. Perez, 989 F.2d 1574, 1582 (10th Cir. 1993) (en banc) (before considering whether remand is appropriate for an alleged Rule 801(d)(2)(E) error, this court should assume the challenged statements were inadmissible and then assess whether their admission was harmless error). In applying the harmless error standard, we must first resolve whether defendants' objection to the documents rested solely on the Federal Rules of Evidence. On appeal, defendants argue the admission of these documents violated their Sixth Amendment right to confrontation. However, the government claims defendants did not raise this Confrontation Clause argument to the district court, and waived it on appeal by failing to claim the district court committed plain error by not raising the issue sua sponte.
78
"[W]here a Confrontation Clause objection is not explicitly made below we will not address the constitutional issue in the absence of a conclusion that it was plain error for the district court to fail to raise the constitutional issue sua sponte." United States v. Perez, 989 F.2d 1574, 1582 (10th Cir. 1993) (en banc). Defendants do not respond to the government's argument in their reply brief, and, as the government claims, they do not argue the district court committed plain error in failing to raise the constitutional issue sua sponte. For this reason, we deem the issue waived. See United States v. Hardwell, 80 F.3d 1471, 1492 (holding issue waived when party failed "to make any argument or cite any authority to support his assertion"), reh'g granted in part on other grounds, 88 F.3d 897 (10th Cir. 1996). Accordingly, we are left to review only a hearsay objection, which we review under the nonconstitutional harmless error standard. See Perez, 989 F.2d at 1582.
79
"A [nonconstitutional] harmless error is one that does not have a substantial influence on the outcome of the trial; nor does it leave one in grave doubt as to whether it had such effect." Jones, 44 F.3d at 873. A conclusion that an alleged error is harmless completes our review of a hearsay objection. See id. at 873-75. The Background section of this opinion is supported by witness testimony and exhibits to which there is no objection on appeal; in other words, it was constructed without any reference to the disputed documents. See supra Part I. Our review of the disputed documents, coupled with the overwhelming evidence of defendants' guilt of the charged offenses revealed in the Background section, convinces us that the admission of the disputed documents did not substantially influence the trial's outcome and does not leave us in grave doubt as to whether they had such effect. See supra Part III.A. Accordingly, even if the district court erroneously admitted the disputed documents, we hold their admission constituted harmless error.
80
Finally, defendants claim "the district court failed to require the government to identify the declarant of the hearsay statements being admitted into evidence over the objection of the defense." However, they fail to identify the specific statements the district court allegedly admitted in error, or even meet our requirement of providing citations to the record where these statements may be found. See Fed. R. App. P. 28(a)(9)(A); Tenth Cir. R. 28.2(C)(2), (3)(a). "Due to these failures, this court cannot even attempt to assess the merits of [their] argument. The issue of the admissibility of this evidence is therefore waived on appeal." McClatchey, 217 F.3d at 835-36.
C. Variances
81
Mr. Anderson and Dr. Robert LaHue claim certain variances between the indictments and case presented at trial substantially prejudiced their right to a fair trial. In its ruling on their motions for a new trial, the district court stated: "The court agrees with the defendants that there were two variances in this case. The first was the variance the court recognized at trial when it narrowed the count one conspiracy. The second was the variance with respect to the government's failure of proof as to the lawyer defendants." Anderson, 85 F. Supp. 2d at 1070.
82
More specifically, the "other hospitals variance" represents the government's failure to present sufficient evidence to demonstrate that any defendant but the LaHues participated in a conspiracy extending to the six hospitals other than Baptist. See id. at 1053. The "attorney defendants variance" reflects the acquittal of Ms. Lehr and Mr. Thompson at the close of the government's case. See id. Despite these variances, the district court denied the motions for a new trial. See id. at 1051-52, 1069-73. On appeal, Mr. Anderson claims these two variances entitle him to a new trial, while Dr. Robert LaHue argues the "attorney defendants variance" entitles him to a new trial.21
83
"Whether a variance between an indictment and the case presented at trial is sufficiently prejudicial to warrant a new trial is a question of law.... A new trial is only necessary, however, if the variance substantially prejudiced the defendant's right to a fair trial." McClatchey, 217 F.3d at 831. In McClatchey, this court faced the same two variances at issue here, concluded neither variance substantially prejudiced Mr. McClatchey's right to a fair trial, and reversed the district court's decision to grant Mr. McClatchey's motion for a new trial. See id. at 831-34. Because Mr. McClatchey, Mr. Anderson, and the LaHues were tried together, the government argues the law of the case doctrine forecloses our review of this issue and requires us to hold insufficient prejudice existed to require a new trial.22 Defendants23 claim the McClatchey panel "did not have a complete record and based its decision on factually erroneous conclusions," and, accordingly, we should find the law of the case doctrine does not control and revisit the issue. We hold the law of the case doctrine controls the "other hospitals variance" issue, and, in combination with the invited error doctrine, also controls the "attorney defendants variance" issue.
84
"The law of the case doctrine posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." United States v. Alvarez, 142 F.3d 1243, 1247 (10th Cir.) (quotation marks and citations omitted), cert. denied, 525 U.S. 905 (1998). "Furthermore, when a rule of law has been decided adversely to one or more codefendants, the law of the case doctrine precludes all other codefendants from relitigating the legal issue." United States v. Aramony, 166 F.3d 655, 661 (4th Cir.), cert. denied, 526 U.S. 1146 (1999). As a "rule of practice" and not a limit on a court's power,
85
we will depart from the law of the case doctrine in three exceptionally narrow circumstances:
86
(1) when the evidence in a subsequent trial is substantially different; (2) when controlling authority has subsequently made a contrary decision of the law applicable to such issues; or
87
(3) when the decision was clearly erroneous and would work a manifest injustice.
88
Alvarez, 142 F.3d at 1247.
89
As to the "other hospitals variance," Mr. Anderson does not argue any of these three exceptions apply. In addition, he claims Mr. McClatchey "was in all relevant respects identically situated to [Mr.] Anderson." Accordingly, we affirm the district court's denial of Mr. Anderson's motion for a new trial on the basis of the "other hospitals variance" in light of McClatchey and the law of the case doctrine. See McClatchey, 217 F.3d at 833-34 (holding "any variance caused by the narrowing of the conspiracy charge did not substantially prejudice [Mr.] McClatchey.")
90
As previously noted, defendants undertake the "formidable task" of attempting to convince us the McClatchey decision was clearly erroneous and would work a manifest injustice as to the "attorney defendants variance." Alvarez, 142 F.3d at 1247. Specifically, they claim "the panel partly based its decision that the attorney variance did not prejudice [Mr.] McClatchey on the erroneous premise that the jury 'was not informed that the district court had acquitted the attorney defendants' and therefore could not conclude he must have been guilty because the court had not acquitted him too" (quoting McClatchey, 217 F.3d at 833). However, they do not cite any case law in which such an argument prevailed. See Alvarez, 142 F.3d at 1247 ("[O]ur own research indicates that while courts may often pay lip service to the clearly erroneous/manifest injustice exception, they rarely, if ever, invoke it.").
91
We acknowledge defense counsel informed the jury of the attorney defendants' acquittal during closing arguments, but this does not make the McClatchey decision either clearly erroneous or even remotely work a manifest injustice for the following reasons. Although defendants call this a "crucial point," they acknowledge it was only one of several reasons why the McClatchey panel held Mr. McClatchey's right to a fair trial had not been substantially prejudiced due to this variance. See McClatchey, 217 F.3d at 831-33. Here, defendants raise the same claims as did Mr. McClatchey, but do not challenge the McClatchey panel's other reasoning. Therefore, defendants themselves limit our review to this one claim of error regarding the jury's knowledge of the attorney defendants' acquittal.
92
Focusing on this sole error, we conclude the jury's awareness of the district court's acquittal of the attorney defendants did not substantially prejudice their right to a fair trial in light of the invited error doctrine. "The invited error doctrine prevents a party from inducing action by a court and later seeking reversal on the ground that the requested action was in error." United States v. Edward J., 224 F.3d 1216, 1222 (10th Cir. 2000) (quotation marks and citation omitted). The McClatchey panel correctly determined the district court did not inform the jury of the attorney defendants' acquittal in its jury instructions. See McClatchey, 217 F.3d at 833. Instead, the jury was so informed by defendants' counsel during their closing arguments as a result of the following events.
93
Toward the end of its closing argument, the government stated: "The evidence in this case has been that the attorneys were well aware that the--that this was a paying for patients deal and worked to develop agreements that covered up that fact." On completion of the government's argument, the district court recessed the proceedings and heard from Mr. Anderson's counsel about this statement. Counsel argued this statement "opened the door" to allow defense counsel to present to the jury the acquittal of the attorney defendants. The district court agreed and stated: "You may tell the jury that the two lawyer defendants were found were acquitted by order of the court." Defendants' counsel each took advantage of this ruling.
94
In his closing argument, Mr. Anderson's counsel claimed the acquittal of the attorney defendants created reasonable doubt as to his client's guilt:
95
In this case the quality of the Government prosecution creates reasonable doubt. And that's what the jury system is set out to do is to correct these abuses.
96
For instance, the last argument that was made to you by the Government in this case had to do with the attorneys. And she said that they were knowing participants in a--knowing participants that this was a scheme to pay [sic] patients and that they drafted sham agreements.
97
Well, folks, these two lawyers have been acquitted by the court. They were acquitted here because the court found that there was no evidence beyond a reasonable doubt that these lawyers had done anything. And yet the Government stood up here in argument, and despite the fact they had been acquitted, and told you that those lawyers had, in fact, been knowing participants in crime and that's just not right.
98
That in itself should create a reasonable doubt as to all the other defendants in this case, particularly the Baptist defendants.
99
. . . .
100
Now the attorneys have been acquitted in this case. If they're not guilty and Mr. Anderson relied upon what they said, does that--how does that affect Mr. Anderson's specific intent in the case? He cannot have the specific intent to violate the law if those lawyers, who are not guilty, advise him appropriately, which they did.
101
Dr. Robert LaHue's counsel similarly argued:
102
Now, one other thing that Ms. Treadway spoke about were some of the defenses that we have presented to you, and that is the defense of good faith. And all of the witnesses, all of the Defendants--the evidence is clear, that all of the Defendants relied on the attorneys who were acquitted in this case and relied on attorneys for other hospitals to process and review and prepare these agreements to make them legal and appropriate. The evidence is uncontroverted about that. Nobody ever took--you never had an attorney come in here and said they took my agreement and changed it, took it out and changed it or modified it. You never had that.
103
These attorneys were acquitted. And the testimony of all the witnesses was--certainly the hospital witnesses who employed the attorneys and witnesses concerning the Doctors' activities who said the Doctors knew about and relied on the advice of the attorneys that are--that are now acquitted and found not guilty. And so there is good faith here, no doubt about it.
104
Obviously, neither counsel believed their statements would prejudice defendants' right to a fair trial. In other words, they did not believe the jury would interpret the district court's acquittal of the attorney defendants, along with the continued prosecution of Mr. Anderson and Dr. Robert LaHue, as a signal the court believed defendants were guilty. Indeed, counsel affirmatively sought the opportunity to argue about the acquittal of the attorney defendants, rather than object to the government's argument and have it stricken along with an instruction from the court for the jury to disregard the argument. We conclude the invited error doctrine applies and no prejudice was suffered, because defendants' argument on appeal is a complete reversal from the position they sought to and did assert during closing argument. See John Zink Co. v. Zink, 241 F.3d 1256, 1259 (10th Cir. 2001) (holding the invited error doctrine precluded review of appellants' argument on appeal that was directly contradictory to its position in the district court).
105
Finally, defendants fail to explain, as they must in order to prevail, how the application in this appeal of the ruling in McClatchey would work a manifest injustice. See Alvarez, 142 F.3d at 1247. Indeed, as discussed in McClatchey, the district court told the jury that "the charges against [the attorney defendants] ... have been removed from your consideration and are no longer before you for decision," and instructed them: "Do not concern yourself with these developments and do not speculate about them." See McClatchey, 217 F.3d at 833. "[T]his court presumes that the jury followed the district court's instructions and therefore did not speculate as to the reason why the charges against the attorney defendants had been removed from its consideration." Id. (citing United States v. Ailsworth, 138 F.3d 843, 850 (10th Cir.), cert. denied, 525 U.S. 896 (1998)).24 As a result, we do not perceive a manifest injustice resulting from the application of the McClatchey ruling on the identical "attorney defendants variance" issue raised in this appeal.
106
Accordingly, we affirm the district court's denial of defendants' motion for a new trial on the basis of the "attorney defendants variance" in light of McClatchey and the law of the case and invited error doctrines. See id. at 833-34 ("[E]ven if the district court's acquittal of the attorney defendants created a variance between the allegations in the indictment and the case presented at trial, this court is unconvinced that such a variance substantially prejudiced [Mr.] McClatchey.").
D. Use Immunity
107
In a two-part argument, the LaHues claim the district court abused its discretion by refusing to grant use immunity to twelve proposed defense witnesses who invoked the Fifth Amendment and refused to testify at trial. First, the LaHues argue the government is guilty of prosecutorial misconduct, because it allegedly engaged "in a plan to unduly distort the fact-finding process" by: (1) identifying these twelve individuals as unindicted co-conspirators; (2) leading them to believe, "in the pretrial setting," they faced potential criminal prosecution, which caused them to invoke the Fifth Amendment and refuse to testify; (3) claiming, "near the end of the trial," the government did not perceive them as criminally culpable; and (4) confirming, prior to sentencing in this case, it would not subject any of the unindicted co-conspirators to criminal charges. Second, the LaHues argue this prosecutorial misconduct authorized the district court to grant these twelve witnesses use immunity, and its refusal to do so constitutes an abuse of discretion.
108
In response, the government claims it appropriately listed these individuals as unindicted co-conspirators for Rule 801(d)(2)(E) purposes. It argues "[t]he defendants offer no facts of discriminatory use of immunity [by the government] to gain a tactical advantage, and offer no facts that the government forced any witness to invoke the Fifth Amendment." (Emphasis in original.) Finally, it cogently notes the LaHues failed on appeal to identify the witnesses allegedly affected, proffer their expected testimony, or explain how the witnesses "were essential to their defense."
109
The district court rejected the LaHues' arguments for judicial grants of use immunity before, during, and after trial, emphasizing "there is no indication that the government engaged in a 'deliberate attempt to distort the fact finding process.'" Anderson, 85 F. Supp. 2d at 1081 (denying defendants' motion for a new trial based on prosecutorial misconduct) (quoting United States v. Hunter, 672 F.2d 815, 818 (10th Cir. 1982), abrogation on other grounds recognized in United States v. Call, 129 F.3d 1402, 1404 (10th Cir. 1997), cert. denied, 524 U.S. 906 (1998)).25 We review the district court's decisions under an abuse of discretion standard. See United States v. Gabaldon, 91 F.3d 91, 94 & n.2 (10th Cir. 1996).
110
"'The power to apply for immunity ... is the sole prerogative of the government being confined to the United States Attorney and his superior officers.'" Hunter, 672 F.2d at 818 (quoting United States v. Graham, 548 F.2d 1302, 1314 (8th Cir. 1977)). Accordingly, courts have no inherent authority to grant a witness use immunity. See id. However, in Hunter, we left open the possibility "that where the prosecutor's denial of immunity is a deliberate attempt to distort the fact finding process, a court could force the government to choose between conferring immunity or suffering an acquittal." Hunter, 672 F.2d at 818; see United States v. Chalan, 812 F.2d 1302, 1310 (10th Cir. 1987) (same), cert. denied, 488 U.S. 983 (1988).
111
We need not decide this legal question and are not persuaded to overturn the district court's finding for two reasons. First, the LaHues fail to "cite the precise reference in the record where the issue was ... ruled on" initially as required by our rules. 10th Cir. R. 28.2(C)(2). The district court's pretrial ruling on this issue is critical, because the court referred to and relied on its reasoning in that ruling to deny the subsequent motions. See, e.g., Anderson, 85 F. Supp. 2d at 1081 ("The court rejects the defendants' arguments for the same reasons it rejected them before and during trial."). While the LaHues cite to a "Minute Order" in which the district court memorialized its denial of their "motion for grant of judicial immunity or for stay [doc. 142] ... as set forth on the record," they do not identify where "on the record" the district court ruling exists. Second, as the government claims, the LaHues do not identify the twelve individuals at issue, provide a record citation for the proffer of their expected testimony, or explain how their testimony would be material, exculpatory, and not cumulative as well as unavailable from any other source. See United States v. Bahadar, 954 F.2d 821, 826 (2d Cir.) (requiring such evidence to find a distortion of the fact-finding process), cert. denied, 506 U.S. 850 (1992).
112
We will not "sift through" this case's voluminous record to find support for the LaHues' claims, "but instead defer to the district court's rulings." Mile High Indus. v. Cohen, 222 F.3d 845, 854 (10th Cir. 2000). Likewise, we will not substitute our judgment for that of the district court under the abuse of discretion standard of review, see In re Coordinated Pretrial Proceedings in Petroleum Prod. Antitrust Litig., 669 F.2d 620, 623 (10th Cir. 1982), especially in the absence of facts identifying the material, exculpatory, and non-cumulative nature of the witnesses' testimony as well as its unavailability from any other source. See United States v. Rodriquez-Aguirre, 108 F.3d 1228, 1237 n.8 (10th Cir.) (holding it is the appellant's responsibility to tie the relevant facts, supported by specific citations to the record, to his legal arguments), cert. denied, 522 U.S. 847 (1997).
113
Accordingly, the district court did not abuse its discretion in refusing to grant immunity to the twelve unnamed defense witnesses, because use immunity is the sole prerogative of the executive branch and defendants provided no facts to support their claim the government engaged in a deliberate attempt to distort the fact-finding process.26
IV. Conclusion
114
For the foregoing reasons, the convictions of Mr. Anderson, Dr. Robert LaHue, and Dr. Ronald LaHue are AFFIRMED.
NOTES:
1
Because this case arises from jury verdicts against defendants, we view the evidence in the light most favorable to the prosecution. See United States v. Woodlee, 136 F.3d 1399, 1405 (10th Cir.), cert. denied, 525 U.S. 842 (1998). This section focuses on evidence applicable to Mr. Anderson and the Drs. LaHue and necessary to resolve their issues on appeal. We refer the reader to two of the published post-trial opinions in this case for a comprehensive review of the evidence. See Anderson, 85 F. Supp. 2d 1047; see also United States v. McClatchey, 217 F.3d 823 (10th Cir.), cert. denied, 121 S. Ct. 574 (2000).
2
Mr. Probst testified for the government under a grant of statutory immunity. See Anderson, 85 F. Supp. 2d at 1054 n.3.
3
Baptist and the LaHues signed a new contract in April 1993, but Dr. Ronald LaHue terminated it in November 1993. See McClatchey, 217 F.3d at 827-28. "Two temporary agreements sustained the payments to the LaHues through June of 1984." Id. at 828.
4
Mr. Eckard pled guilty to conspiracy to violate 18 U.S.C. 666 and cooperated with the government. See Anderson, 85 F. Supp. 2d at 1055 n.4.
5
Mr. McGrath testified for the government under a grant of statutory immunity. See Anderson, 85 F. Supp. 2d at 1057 n.9.
6
Mr. Anderson claims Baptist "entered into an agreement ... with Drs. Leonard Hock and Cathy Weatherford to perform essentially the same services provided by the LaHues in prior consulting agreements." The record does not support this claim, because Dr. Weatherford (with Dr. Hock as backup) contracted to be the Clinic's Medical Director. This role was previously handled by Dr. Nevada Lee, and the efforts of Drs. Weatherford and Hock appear to have focused on primary patient care services in the Clinic.
7
Accordingly, the district court limited the jury's consideration of all evidence concerning the other hospitals to the charges against the LaHues.
8
On the government's post-trial motion, the court dismissed the false claims count with prejudice and the witness tampering count without prejudice. (Doc. #415.)
9
In this section, "defendants" refers to Mr. Anderson and the LaHues.
10
In Instruction #32, the district court charged the jury as follows:
In order to sustain its burden of proof against the hospital executives for the crime of violating the Anti-Kickback statute, the government must prove beyond a reasonable doubt that the defendant under consideration offered or paid remuneration with the specific criminal intent "to induce" referrals. To offer or pay remuneration to induce referrals means to offer or pay remuneration with intent to gain influence over the reason or judgment of a person making referral decisions. The intent to gain such influence must, at least in part, have been the reason the remuneration was offered or paid.
On the other hand, defendants Anderson, Keel, and McClatchey cannot be convicted merely because they hoped or expected or believed that referrals may ensue from remuneration that was designed wholly for other purposes. Likewise, mere oral encouragement to refer patients or the mere creation of an attractive place to which patients can be referred does not violate the law. There must be an offer or payment of remuneration to induce, as I have just defined it.
(Emphasis added.)
11
In Instruction #33, the district court charged the jury as follows:
Likewise, in order to sustain its burden of proof against the doctor defendants for violating the Anti-Kickback statute, the government must prove beyond a reasonable doubt that the defendant under consideration solicited or received the remuneration with specific criminal intent that the remuneration be "in return for" referrals. To solicit or receive remuneration in return for referrals means to solicit or receive remuneration with intent to allow the remuneration to influence the reason and judgment behind one's patient referral decisions. The intent to be influenced must, at least in part, have been the reason the remuneration was solicited or received.
On the other hand, defendants Robert LaHue and Ronald LaHue cannot be convicted merely because they received remuneration wholly in return for services and also decided to refer patients to the hospital. Likewise, mere referral of patients because of oral encouragement or because of a belief that the place to which the patients are to be referred is attractive does not violate the law. There must be a solicitation or receipt of remuneration in return for referrals, as I have just defined it.
(Emphasis added.)
12
Our resolution of these issues moots defendants' sufficiency of the evidence challenge to Counts One and Three of the indictment, which is predicated on our finding the "primary purpose" standard applies.
13
Defendants cite United States v. Boyd, 958 F.2d 247, 249-50 (8th Cir. 1992) to support their argument that McClatchey does not control here. Boyd is inapposite, because it dealt with a res judicata argument by the government on issues not briefed by the parties to the first appeal or decided by the district court. See Boyd, 958 F.2d at 249. In this case, we rely on our In re Smith rule, which is based on stare decisis, see United States v. Nichols, 169 F.3d 1255, 1261 (10th Cir.), cert. denied, 528 U.S. 934 (1999), and the jury instruction issue was both briefed by the parties in the first appeal, see McClatchey, 217 F.3d at 826, 831, 834-35, and decided by the district court pursuant to defendants' motions for a new trial. See Anderson, 85 F. Supp. 2d at 1069, 1074-75.
14
See Hanlester Network v. Shalala, 51 F.3d 1390, 1398 (9th Cir. 1995) ("[The Act] chills no constitutional rights."); United States v. Bay State Ambulance & Hosp. Rental Serv., Inc., 874 F.2d 20, 32-33 (1st Cir. 1989) ("[T]he [Act] is not the type that can be used to chill constitutionally protected rights.").
15
Defendants base their vagueness challenge primarily on the alleged inadequacy of enforcement standards under a "one purpose" test. Because they claim cases evaluating the Act under the fair notice element are "irrelevant," defendants do not address whether they could reasonably understand their conduct was prohibited by the Act. See Gaudreau, 860 F.2d at 360 ("[C]riminal responsibility should not attach where one could not reasonably understand that his contemplated conduct is proscribed." (quotation marks, alteration, and citation omitted)); see also Day, 223 F.3d at 1229 (same). Accordingly, in order to resolve this question and in light of the interrelated nature of the fair notice and enforcement standards inquiries, we address the fair notice element as well. See Gaudreau, 860 F.2d at 359-60.
16
We need address only the Baptist-LaHues relationship because of its similarity to: (1) Dr. Robert LaHue's interaction with the five other hospitals for which he was convicted of violating the Act; and (2) Dr. Ronald LaHue's interaction with the two other hospitals for which he was convicted of violating the Act. See Anderson, 85 F. Supp. 2d at 1060-64; supra Part I.
17
Annualizing this data, Baptist was paying the LaHues the effective rate of $1,442 per hour.
18
For example, the Supreme Court struck down as unconstitutionally vague a statute criminalizing a person's failure to provide "credible and reliable" identification to police during a valid investigative detention, because the determination of the credibility and reliability of identification was left to the subjective judgment of the police. See Kolender, 461 U.S. at 355-61. In light of the "full discretion accorded to the police," the Court concluded the statute "furnishes a convenient tool for harsh and discriminatory enforcement by local prosecuting officials, against particular groups deemed to merit their displeasure, and confers on police a virtually unrestrained power to arrest and charge persons with a violation." Id. at 360 (quotation marks and citations omitted).
19
In this section, "defendants" refers to Mr. Anderson and the LaHues.
20
Accordingly, we will not address the government's alternative theories of admissibility argument.
21
Dr. Robert LaHue raises, for the first time on appeal, an alternative argument that the district court's severance of the false claims and witness tampering counts after the close of the government's case was a prejudicial variance warranting a new trial. However, he "has not attempted to articulate a reason for us to depart from the general rule that 'a federal appellate court does not consider an issue not passed upon below.'" Walker v. Mather (In re Walker), 959 F.2d 894, 896 (10th Cir. 1992) (quoting Singleton v. Wulff, 428 U.S. 106, 120 (1976)). Therefore, we decline to consider his alternative argument. See id.
22
Although the government also argues stare decisis controls this issue, we note its argument focuses on the law of the case doctrine and supporting case law. Accordingly, and in light of our resolution of this issue, we do not reach the government's stare decisis argument.
23
In this section, "defendants" refers to Mr. Anderson and Robert LaHue.
24
Defendants argue they faced a "Hobson's choice" created by the government's closing argument quoted above--either let the government's claim go unchallenged or "reluctantly" tell the jury of the attorney defendants' acquittal, with prejudice either way. We do not agree. Defense counsel had a third option--they could have requested the district court strike that portion of the government's closing and instruct the jury to disregard the statement and focus on the jury instructions as to the attorney defendants, something defense counsel and the court did with regards to other portions of the government's closing. This would have returned defendants to the position deemed non-prejudicial in McClatchey, where the jury is presumed to follow the "district court instructions and therefore did not speculate as to the reason why the charges against the attorney defendants had been removed from its consideration." McClatchey, 217 F.3d at 833. Further, the statements to the district court and arguments to the jury on this issue by defense counsel clearly reveal their desire to present the acquittal of the attorney defendants to the jury; any reluctance in informing the jury of the acquittals must have accrued after these arguments were unsuccessful.
25
During the trial, the district court granted defendants the alternative relief sought in their "Motion for Order Compelling Judicial Immunity." See Anderson, 85 F. Supp. 2d at 1081 n.29. Specifically, the district court gave defendants the opportunity to call the attorneys of some of these witnesses to testify, pursuant to Rule 807 of the Federal Rules of Evidence, about what the witnesses told FBI agents in government interviews. See id. Although they sought this relief, defendants decided against calling these attorneys as witnesses "based on strategic trial issues."
26
Notwithstanding the basis for our decision, we have reviewed every document cited by the LaHues on this issue in their appellate briefs. In their "Motion for Order Compelling Judicial Immunity" filed on the close of the government's case, the LaHues listed twenty unindicted co-conspirators and presented "proffers of potential testimony" in varying levels of detail for fourteen of them. They repeated this list and attached a copy of these "proffers" to their motion for a new trial, which they inexplicably do not address or cite on appeal. Further, although the LaHues cite to the defense witness lists in their appellate briefs, they failed to provide these documents in the record on appeal.
Even if we were to consider this material as the basis for the LaHues' appeal of this issue, there are three reasons why it is insufficient to find the district court abused its discretion. First, we do not know whether the twelve witnesses on appeal are a subset of the twenty listed in these motions, or are others from the over 160 people defendants allegedly listed as witnesses but did not call at trial. Second, the LaHues provide information regarding testimony from only fourteen of the twenty witnesses listed in the motions, and of these: (1) it is unclear whether three were even subpoenaed by the defense or ever invoked the Fifth Amendment; (2) there is no proffer of testimony for four; (3) virtually the entire "proffer" of six are the conclusory assertions that the witness both "affirms," "confirms," "defend[s]," or "assert[s]" the "legitimate nature" of the relationship between the hospital and the LaHues and "did not perceive the relationship to be a payment for patients;" and (4) the four somewhat detailed proffers provide no basis for determining whether this testimony was unavailable from any other source. Finally, in their motion for a new trial, the LaHues claim the witnesses who did testify at trial presented "exculpatory" testimony for them, but do not explain how those who allegedly invoked the Fifth Amendment would offer testimony, assuming arguendo it was material and exculpatory, that would not be deemed cumulative.
| {
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Filed 2/24/14 BP West Coast Products v. Azari CA1/5
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FIVE
BP WEST COAST PRODUCTS
LLC et al.,
A135829
Plaintiffs and Respondents,
v.
(Solano County
KAMAL Y. AZARI et al.,
Super. Ct. No. FCS 035180)
Defendants and Appellants.
Kamal Azari and Pari Azari appeal from an order adding them as judgment
debtors, in their capacity as trustees for their family trust, to a judgment obtained against
Kamal Azari individually. (See Code Civ. Proc., § 187.) Appellants contend the
evidence did not support the order and the amended judgment is void. We will affirm.1
I. FACTS AND PROCEDURAL HISTORY
Kamal Azari (Azari) and respondent BP West Coast Products LLC (BP) were
parties to certain franchise agreements by which Azari operated a gasoline station and
1 Respondent filed a motion to augment the record and a request for judicial notice on
June 25, 2013. We granted the motion to augment, deemed the record on appeal to be
augmented to include a copy of the documents attached to the motion, and deferred our
ruling on the request for judicial notice. Because the request for judicial notice pertains
to the same documents as the motion to augment, we now deny the request for judicial
notice as moot.
1
convenience store in Vallejo. BP also loaned Azari $525,000 pursuant to two written
loan agreements; Azari signed promissory notes that were secured by a deed of trust on
the station property.
A. BP’s Complaint
In February 2010, BP filed a lawsuit against Azari to recover $82,593.85 for
unpaid gasoline deliveries, royalties, advertising, and maintenance charges under the
franchise agreements, $249,861 for outstanding loan payments, and prejudgment interest,
costs, and attorney fees. BP also sought $123,284.29 in liquidated damages in
connection with Azari’s termination of his franchise. The complaint included a cause of
action for breach of the franchise agreements, a common count for goods sold and
delivered, and a claim for foreclosure of the deed of trust on the station property.
B. Azari’s Cross-Complaint
Azari filed a cross-complaint and amended cross-complaint, asserting claims for
breach of contract, breach of the implied covenant of good faith and fair dealing,
declaratory relief, and violation of statute. Azari’s declaratory relief claim represented
that a judicial declaration was necessary for Azari to “ascertain his rights and duties
under the deed of trust and protect his property from foreclosure.” (Italics added.)
C. Trial and Judgment
At trial, Azari did not dispute that he owed BP $49,731.68 for unpaid gasoline
deliveries and $32,861.17 for unpaid franchise fees; his primary defense was that BP
caused him to withhold payment when it deprived him of two bills of lading regarding
two loads of gasoline that it had sold and delivered to him.
Nor did Azari claim at trial that he was unable to pay BP due to a lack of personal
assets or cash flow. To the contrary, he emphasized his substantial personal wealth and
financial wherewithal, introducing his personal bank records to indicate that he had
millions of dollars at his disposal. Furthermore, Azari did not disclose that the station
property at the heart of BP’s foreclosure claim was no longer owned by Azari, but by a
family trust.
2
The court issued its tentative decision in August 2011. Azari filed a “Request for
Statement of Decision and Objections.” The court overruled Azari’s objections and
ordered judgment in favor of BP and against Azari on all causes of action alleged in BP’s
complaint and Azari’s operative cross-complaint. Judgment was entered against Azari in
the sum of $648,703.20.
Azari appealed from the judgment in December 2011 (No. A134076). The appeal
was dismissed in January 2012 due to Azari’s failure to designate the record on appeal.
D. Azari’s Posttrial Communications Regarding His Assets
Not long after judgment had been entered against him, Azari finally disclosed that
his assets were held in the family trust, and he had no funds to pay the judgment.
1. The November 2011 Smith Letter
BP’s attorney, John Arya, received a letter from Azari’s business consultant,
Robert L. Smith, dated November 25, 2011 (Smith Letter). The letter, written on Azari’s
behalf, advised BP that Azari and his wife had transferred to their family trust—later
identified as “The Kamal and Pari Azari 2003 Living Trust, dated 5-15-03” (Azari
Trust)—all of the Azaris’ personal assets, including the station property that was the
subject of BP’s foreclosure claim. The letter further admonished that, in light of the
Azari Trust’s ownership of these assets, BP’s remedies were “limited, difficult and
expensive to assert,” and proposed a settlement of the judgment against Azari based on
the potential sale of the station property that belonged to the Azari Trust. The Smith
Letter also represented that Azari now had an approximate net worth of just about $6,300,
but the Azari Trust had net assets of approximately $6.4 million.2
2 The Smith Letter stated in part:
“As you are aware Kamal and his wife have a family trust, that was established in
2009. All of their personal assets were transferred into the trust in early 2009, as a
part of a comprehensive estate plan and without any anticipation of litigation with BP.
The service station (333 Curtola Parkway) was transferred to the trust by a deed dated
February 9, 2009 and recorded October 20, 2009. There are no liquid assets or other
holdings in the trust capable of conversion into cash or that are readily saleable.
3
2. The January 2012 Azari E-mail
In correspondence to BP’s counsel dated January 11, 2012 (January e-mail), Azari
claimed that the trial evidence of his substantial personal assets reflected a
misrepresentation to the court by his lawyer. Azari stated: “I am currently diligently
working towards liquidation of the station in order to generate liquidity. No cash monies
exist. Acknowledge that during the trial Attorney Lewis represented to the Court a
different picture of my financial status than what reality is.”
E. BP’s Amendment of the Judgment to Add the Azaris as Trustees
On January 27, 2012, after receiving the Azari’s January e-mail, BP filed a motion
to amend the judgment by adding “Kamal and Pari Azari, [in their capacity] as Trustees
“The trust’s assets consist primarily of various parcels of real property, the house
and winery, a vacant parcel, and various improved commercial and residential
properties. The trust’s net worth is but a mere fraction of the values attributed to
Kamal in 2007 or 2008. I am informed that a fair estimate of the net worth of the
trust’s property, after deducting encumbrances of record is approximately [$6.4
million].
“The remedies available to BP as a judgment creditor in this matter are limited,
difficult and expensive to assert and, as is the situation with the deed of trust on 333
Curtola Parkway, subject to prior liens of record. Without ready cash, or other
available liquid assets, the only apparent solution is through the sale of one or more of
the properties. The obvious first choice being the service station site.
“Accordingly, I am authorized on behalf of Kamal Y. Azari to submit the
following proposal. The parties shall enter into a stipulation providing that Kamal
will pay [BP] the sum of $525,000 on or before December 31, 2012, payable through
proceeds of sale of the service station directly from escrow. If the station is not sold
on or before December 31, 2012, the sum of $625,000 on or before December 31,
2013, shall become payable from proceeds of sale of the service station directly from
escrow. If the station is not sold on before December 31, 2013 then the amounts due
under the judgment shall become all due and payable. After satisfaction of the
existing first deed of trust in favor of Scott Valley Bank (approximate principal
balance of [$1.6 million]), taxes, and expenses of sale [BP] shall receive the sum of
$525,000 if the sale is prior to December 31, 2012 or $625,000 provided the sale is
prior to December 31, 2013. The service station (333 Curtola Parkway) shall be listed
for sale and aggressively marketed.” The letter stated that “the comments and
representations contained herein are made subject to the provisions of [Evidence
Code] § 1152.”
4
of the Kamal and Pari Azari 2003 Living Trust dated 5-15-03” as judgment debtors. The
motion was brought on the ground that Azari was the alter ego and trustee of the Azari
Trust, and the amendment was necessary to avoid injustice.
In support of its motion, BP submitted a declaration by Arya, recounting Azari’s
trial testimony about his assets and noting that Azari “introduced as trial exhibits his
personal bank records to reflect that at all relevant times he had millions of dollars of
cash at his ready disposal.” Arya’s declaration also noted there was no mention at trial
that the station property was owned by the Azari Trust, rather than Azari. Attached to
Arya’s declaration was the November 2011 Smith Letter, advising of the transfer of the
Azaris’ assets to their family trust, and the January 2012 Azari e-mail, indicating that
Azari’s attorney had misstated Azari’s finances at trial.
Azari opposed BP’s motion to amend on March 2, 2012, contending that he
performed the acts alleged in BP’s complaint on his own behalf and he did not represent
the trust’s interests. Azari’s accompanying declaration asserted: he and his wife created
the Azari Trust in 2003 as part of an estate plan; the station property was transferred by a
deed recorded in October 2009, before he had any “inclination” that BP would commence
litigation against him;3 on January 27, 2010—shortly before BP filed its complaint—the
Azaris amended the Azari Trust to make it irrevocable; on January 30, 2012—just four
days after BP served its motion to amend the judgment—the Azaris executed a second
trust amendment that again described the trust as irrevocable and represented that they
had resigned as trustees and appointed Integrated Capital Management LLC (ICM) as the
trustee; Azari had authorized Smith to write the letter to Arya in order to settle the
lawsuit; Azari acted on his own behalf rather than on behalf of the trust; and the financial
data presented at trial pertained to “2001-2007.” Pari Azari also submitted a declaration,
stating that she had only minimal knowledge of the litigation, did not participate in
pretrial planning or exercise control over trial preparation, and had little involvement in
3 It is not clear how the transfer of the station property occurred, since BP had a deed of
trust on the property. There is no indication that notice was given to BP.
5
the trial. In addition, Azari filed a motion to strike the Smith Letter based on Evidence
Code section 1152.
BP filed a reply, supported by declarations averring that the Azaris had not
brought documents pertaining to the trust to their judgment debtors’ examinations
because, they claimed, they had turned over the documents to ICM shortly before the
examinations.
After a hearing, the court issued its written order on March 23, 2012, granting
BP’s motion and ordering that the judgment be amended to include “Kamal Azari and
Pari Azari, as Trustees of the Kamal and Pari Azari 2003 Living Trust dated 5-15-03,” as
judgment debtors. The amended judgment was filed on the same date.
“Defendants Kamal Azari and Pari Azari” thereafter filed a notice of appeal from
the amended judgment.
F. Azari’s Continuing Protection of Azari Trust Assets
BP proceeded to attempt enforcement of the amended judgment, recording
abstracts of judgment and obtaining a writ of sale for the station property. In January
2013 after notice, the station property was sold at a foreclosure sale to an Azari
“employee or associate” for just $100.
Azari then acted to protect the other assets of the Azari Trust from enforcement.
In May 2013, Azari filed a motion to stay the levy, sale or other distribution of real
property owned by the trust, and to recall and stay execution of all writs of execution
until resolution of this appeal. In June 2013, long after the Azari Trust had purportedly
been made irrevocable and Azari had resigned as trustee, Azari confirmed that he
nonetheless continued to represent and defend the Azari Trust’s interests. In particular,
he asserted: “Azari is not appealing the judgment against him personally. Instead, Azari
is appealing to protect the rights of the Trustees of the Kamal and Pari Azari 2003 Living
Trust Dated May 15, 2005 (‘Trust’). In the appeal, Azari will seek to protect the rights of
the Trust and its beneficiaries from the Trust’s addition as an additional defendant in the
Amended Judgment.” (First and third italics added.)
6
II. DISCUSSION
Under the authority of Code of Civil Procedure section 187 (section 187), a court
may amend a judgment at any time so that it designates the true defendants. (Carolina
Casualty Ins. Co. v. L.M. Ross Law Group, LLP (2012) 212 Cal.App.4th 1181, 1188
(Carolina Casualty).) For example, the alter ego of an original judgment debtor may be
added as an additional judgment debtor. (Greenspan v. LADT LLC (2010) 191
Cal.App.4th 486, 508 (Greenspan).) “ ‘ “Amendment of a judgment to add an alter ego
‘is an equitable procedure based on the theory that the court is not amending the
judgment to add a new defendant but is merely inserting the correct name of the real
defendant. . . . “Such a procedure is an appropriate and complete method by which to
bind new . . . defendants where it can be demonstrated that in their capacity as alter ego
of the [original judgment debtor] they in fact had control of the previous litigation, and
thus were virtually represented in the lawsuit.” . . . ’ . . . ” ’ [Citations.]” (Ibid.)
Furthermore, even if the requirements for an alter ego finding cannot be
established, a judgment may be amended under section 187 to add a new judgment
debtor where necessary to prevent injustice. (Carolina Casualty, supra,
212 Cal.App.4th at pp. 1188-1189; Carr v. Barnabey’s Hotel Corp. (1994)
23 Cal.App.4th 14 (Carr).)
We review a trial court’s decision to amend the judgment under section 187 for an
abuse of discretion; factual findings necessary to the court’s decision are reviewed for
substantial evidence. (California Casualty, supra, 212 Cal.App.4th at p. 1189.)
A. Substantial Evidence of Alter Ego
Under an alter ego theory, a judgment may be amended to include the trustees of a
trust as judgment debtors, so the judgment creditor can reach the assets of the trust to
satisfy the judgment. (See Greenspan, supra, 191 Cal.App.4th at p. 518.) As applied
here, the question in the trial court was whether the proposed judgment debtors (Azari
and his wife, as trustees of the Azari Trust) were the alter ego of the original judgment
debtor (Azari); if so, Azari could be considered the owner of the Azari Trust’s assets for
7
purposes of satisfying the judgment, and the trust’s trustees could rightfully be named as
judgment debtors. (Greenspan, supra, 191 Cal.App.4th at p. 522.)4
Substantial evidence supports the conclusion that Azari and his wife, as trustees of
the Azari Trust, were the alter ego of Azari at all relevant times. Azari, as an individual,
is of course the same human being who held the position of trustee of the Azari Trust.
Moreover, there was a unity of interest between Azari individually and the Azaris as
trustees, such that they were indistinguishable for all intents and purposes.
First, substantial evidence supports the conclusion that Azari exercised control
over the trust assets as trustees would, with the trustees’ consent. He and his wife created
the Azari Trust, transferred all their assets to the trust (including the station property that
was the subject of the litigation), and appointed themselves trustees. By virtue of their
role as trustees, Azari and his wife held title to the assets that they had transferred into the
trust and continued to control those assets.
Azari’s control over trust assets—and his willingness to use trust assets for his
personal benefit—continued despite the Azaris’ show of making the trust “irrevocable.”5
Although in January 2010—just a few days before BP filed its complaint—the Azaris
purported to amend the Azari Trust documents to state that the trust “shall be
irrevocable,” other terms of the trust show that it remained revocable in effect, and the
4 To enforce the judgment against the Azari Trust, the judgment must identify as
judgment debtors the trustees of the trust, not the trust itself. (See Portico
Management Group, LLC v. Harrison (2011) 202 Cal.App.4th 464, 473-474.)
Furthermore, because a trust is not a legal entity, and because it is the trustee who
holds legal title to the property for the benefit of the trust beneficiaries, it is the trustee
rather than the trust that can be an alter ego. (Greenspan, supra, 191 Cal.App.4th at
pp. 518, 521-522.) Nonetheless, if we phrased the issue as whether Azari was the alter
ego of the Azaris as trustees (or vice versa), or whether Azari was the alter ego of the
Azari Trust (or vice versa), our conclusion in this case would be the same: the court
did not abuse its discretion in adding the Azaris as trustees to the judgment as
judgment debtors, so that BP could attempt to satisfy the amended judgment with the
assets of the Azari Trust.
5 The ostensible purpose of making the trust irrevocable was to protect the trust assets
from any judgment BP might obtain: a judgment creditor may enforce its judgment
against assets held by the judgment debtor in a revocable trust. (Prob. Code, § 18200.)
8
assets remained under Azari’s control. The amendments by which the Azaris declared
the trust irrevocable specified that “[t]he remaining terms contained in this Trust are
hereby affirmed in their entirety, and shall remain in full force and effect.” (Italics
added.) One of those remaining terms—Article VI.A.—provides that “[t]he trustee shall
also deliver as much of the community property to the Trustors as they jointly request in
a written statement delivered to the Trustee.” In addition, Article VI.B. provides that all
income from the Azari Trust “shall” be distributed, and that “[t]he Trustee shall also
deliver to the Trustor whose separate property was transferred to the trust as much of the
principal of that Trustor’s separate property as that Trustor requests in a written
instrument delivered to the Trustee.” Furthermore, the Azaris maintained the right to
amend the terms of the trust by their written consent. In short, Azari and his wife still
had the power to distribute the trust assets to themselves.
Second, throughout the litigation with BP, Azari zealously protected the
trust assets as a trustee would, even when contrary to his interests as an individual.
For example, knowing that title to the station property was held not by Azari but
by the Azari Trust trustees, Azari could have sought dismissal of the foreclosure
claim against him. Instead, he withheld the fact that he did not hold title to the
property, declined to advance his own interests by arguing that the transfer of the
property precluded the foreclosure claim against him, and affirmatively filed a
cross-complaint representing that a declaratory judgment was necessary to
“ascertain his rights and duties under the deed of trust and protect his property
from foreclosure.” (Italics added.) Since Azari had essentially no assets during
the litigation, the assets he was protecting in defending against BP’s lawsuit were
really assets of the Azari Trust; effectively, he was acting at least in part as a
trustee in the litigation with BP.
Azari’s representation and defense of the Azari Trust continued after the trial.
Azari opposed BP’s efforts to amend the judgment in a manner that would expose the
trust assets. As appellants now put it in their opening brief in this appeal, Azari was
“excessively zealous” in protecting the assets of the Azari Trust in the litigation.
9
Furthermore, although occurring after the court ruled on the motion to amend, Azari
sought a stay of BP’s enforcement of the amended judgment against the Azari Trust’s
property months after he purportedly resigned as trustee, and he continues to litigate in
this court to protect the trust’s assets.
Indeed, the Smith Letter captures perfectly the control Azari continued to wield
over the assets of the Azari Trust, and his willingness to use the trust assets for his own
purposes: Azari authorized Smith to settle Azari’s liability under the judgment with the
property of the Azari Trust—on a date after the trust had reportedly become irrevocable.
In short, the evidence is overwhelming that Azari, and Azari and his wife as
trustees of the Azari Trust, were alter egos: Azari controlled the litigation against BP,
representing and defending the interests of the Azari Trust; and he also controlled the
trust assets, proposing to use them for his own benefit. As such, the Azari Trust and its
trustees effectively controlled the litigation, the Azari Trust held the assets at stake, and
both Azari and the trust treated the station property and other assets as belonging to one
or the other depending on what best suited their needs at the time. Accordingly, the Azari
Trust trustees should be identified as judgment debtors so that the Azari Trust assets can
be reached by BP. (See Greenspan, supra, 191 Cal.App.4th at pp. 508-510.)
Appellants’ arguments to the contrary are meritless. They contend the Smith
Letter (advising that the Azaris’ personal assets had been transferred into the family trust)
was inadmissible, because the letter stated it was “made subject to the provisions of
[Evidence Code section] 1152.” However, Evidence Code section 1152, subdivision (a)
provides that evidence of a party’s settlement offer and conduct or statements made
during negotiations is “inadmissible to prove his or her liability for the loss or damage or
any part of it.” The Smith Letter was not offered to prove Azari’s liability (as an
individual or trustee) for BP’s loss or damage. It was offered after trial to show that
Azari’s assets had been transferred to the trust, such that the judgment could not be
satisfied against Azari in his individual capacity. Besides, any error in admitting the
Smith Letter was harmless, since Azari asserted in his own declaration the fact of his
transfer of the assets into the trust and the settlement authority he conveyed to Smith.
10
Appellants also argue that the statements by BP’s attorney (Arya) in his
declaration—recounting that Azari did not disclose at trial that the station property was
owned by the trust or that Azari would be unable to satisfy his debt to BP—were hearsay.
It is unclear how something that was not said could be hearsay. But in any event, the
objection was waived and forfeited by Azari’s failure to object in the trial court. (Evid.
Code, § 353.)
The court did not abuse its discretion in amending the judgment based on an alter
ego theory.
B. Substantial Evidence of Overwhelming Equities
Even if the alter ego theory were not applied, the court’s amendment of the
judgment would be appropriate in equity to avoid injustice. (Carolina Casualty, supra,
212 Cal.App.4th at pp. 1188-1189 [“if all the formal elements necessary to establish alter
ego liability are not present, an unnamed party may be included as a judgment debtor if
‘the equities overwhelmingly favor’ the amendment and it is necessary to prevent an
injustice”].)
The equities overwhelmingly favor the amendment of the judgment. Shortly
before BP filed its complaint, the Azaris purported to make their trust, containing all their
assets, irrevocable. Still believing that Azari owned the station property, BP pursued its
lawsuit against Azari rather than the trustees of the Azari Trust. During the trial, while
Azari was still a trustee of the Azari Trust, Azari defended against BP’s claims as if he
owned the station property, without disclosing the transfer. In fact, Azari expressly
represented that he was defending his own property in the litigation, leading BP and the
court to believe that his own assets were at stake. After judgment was entered against
him, Azari finally disclosed that he had no money, and the assets were in the trust, in an
attempt to negotiate a favorable settlement. And within days after BP’s service of its
motion to amend the judgment to include the Azaris as trustees, the Azaris purported to
resign as trustees and attempted to dissuade the court from amending the judgment to
reflect the true owner of the property and other assets. Equity supports the conclusion
that the assets of the Azari Trust should be available to BP to satisfy the judgment.
11
Instructive in this regard is Carolina Casualty, supra, 212 Cal.App.4th 1181.
There, an insurer had obtained a judgment for certain amounts in a coverage action
against a law firm (Ross Law Group). (Id. at pp. 1184-1186.) Ross Law Group refused
to satisfy the judgment, asserting it had ceased operations before it settled the underlying
litigation and had no assets. The trial court amended the judgment by adding an
individual (Ross) as a judgment debtor. (Id. at p. 1187.) The appellate court affirmed,
finding substantial evidence that Ross actively participated in and controlled the litigation
on behalf of Ross Law Group, encouraged the lawsuit to proceed against the law firm to
resolve the coverage litigation while knowing Ross Law Group was a dissolved entity
without funds, unfairly led Carolina Casualty and the court to believe Ross Law Group
was the proper defendant, and revealed the truth only after entry of the judgment. (Id. at
pp. 1189-1194.) Accordingly, the equities overwhelmingly favored affirmance of the
trial court’s ruling. (Id. at p. 1193.)
In short, Carolina Casualty ruled that it was within the court’s discretion to amend
the judgment to include an individual because he, not his defunct law firm, was actually
the one controlling the litigation, and he failed to disclose that the law firm had no assets.
Here, it was within the court’s discretion to amend the judgment to include the trust
(technically, the Azaris as trustees) because the trust (and the Azaris as trustees), not
Azari as an individual, was actually controlling the litigation, and Azari failed to disclose
that he had no assets.
To similar effect is Carr, supra, 23 Cal.App.4th 14. There, the plaintiff obtained a
judgment against a corporation (Barnabey’s), whom she believed owned the hotel where
she worked. (Id. at pp. 16-17.) Throughout the trial on the merits, Barnabey’s defended
against her claims. At the trial on punitive damages, however, there was testimony that
Barnabey’s had never held title to the hotel, stopped doing business before the plaintiff
was hired, and had no assets and no source of income, and that the true owner of the hotel
was a limited partnership (Peppercorn). (Id. at pp. 18, 20.) The trial court added
Peppercorn to the judgment as a judgment debtor. (Id. at p. 20.) The appellate court
affirmed, concluding that the conduct of Peppercorn (whose personnel overlapped with
12
Barnabey’s) approached a fraud on the court: when the plaintiff mistakenly sued
Barnabey’s, Barnabey’s did not say anything about the mistake, acted as if it was a
proper defendant, and sought to shield the entity (Peppercorn) that should have been
named. (Id. at pp. 20-21.) Although there was insufficient evidence to find that
Peppercorn was Barnabey’s alter ego or that Peppercorn’s identity had been actively
concealed from the plaintiff, equity justified the amendment of the judgment. (Id. at
pp. 21-23.) Here too, whether or not Azari and the Azari Trust trustees were or are alter
egos, equitable principles justify the affirmance of the court’s order in this case.
Appellants argue that denying the motion to amend the judgment would not have
sanctioned a fraud or promoted injustice. They urge that Azari’s trial testimony
regarding his finances, and his attorney’s depiction of his financial condition, pertained to
his finances in 2006 (when Azari was not making his payments to BP) and perhaps 2007,
not at the time of trial. They urge that the transfer of the property occurred before the
lawsuit, and the Smith Letter was not an attempt by Azari to avoid enforcement of the
judgment. However, it is not our role to reweigh the evidence; our review is merely for
substantial evidence and abuse of discretion. For our reasons stated ante, the evidence
was sufficient and there was no abuse of discretion.6
The court did not err in granting BP’s motion to amend the judgment.
C. The Amended Judgment Is Not Void
Appellants contend they were trustees when BP commenced the litigation against
Azari in February 2010, but by the time the judgment was amended, they had appointed
ICM as trustee in their stead. They argue that the amended judgment is void because the
trustees (ICM or the Azaris in their capacity as trustees) were not served with a summons
or with the motion papers on BP’s motion to amend. Appellants are incorrect.
6 Azari also argues that BP could still satisfy all or part of the judgment by enforcing
the deed of trust on the station property, which Azari represented “could net $1.2
million.” But the property was sold at a foreclosure sale for $100. That left a deficiency
of over $700,000, for which the court has entered a deficiency judgment.
13
In the first place, section 187 does not require that the party being added to the
judgment have its own day in court to defend against the plaintiff’s claims. (Greenspan,
supra, 191 Cal.App.4th at p. 508.) Instead, it is sufficient if the proposed judgment
debtors (Azaris as trustees) are in effect identical to the original judgment debtor (Azari),
the action was fully and fairly tried, and nothing appears in the record to show that the
proposed judgment debtor could have produced evidence that would have affected the
results of the litigation. (Id. at p. 509.) Here, the Azaris as trustees were in effect
identical to Azari (as we discuss, ante), there is no assertion that the action was not fully
and fairly tried, and there is no indication that the litigation would have had a different
outcome if the Azaris as trustees had been named parties to the lawsuit. Indeed, Azari
zealously protected the Azari Trust’s interests.
Furthermore, we find no significance to the fact that BP’s motion to amend
was not served on the Azaris as trustees, or on ICM, based on the record in this
case. Azari was served with the motion papers, and even if he was technically
served in his individual capacity, there is no indication that the Azari Trust,
through its trustees, lacked notice of the proceeding or would have asserted any
evidence or argument other than what Azari asserted. Azari vigorously opposed
the motion to add Azari and his wife in their trustee capacity (thus protecting the
Azari Trust assets), and both Azari and his wife submitted declarations in
opposition to the motion. There is no indication whatsoever that the Azari Trust
or its trustees did not receive meaningful notice and opportunity to be heard in
regard to BP’s motion to amend the judgment.
Appellants fail to establish error.7
7 Appellants also argue that the requirements for adding judgment debtors under Code
of Civil Procedure section 989 et seq. were not met. However, BP did not proceed
under section 989, but under section 187.
14
III. DISPOSITION
The order is affirmed.
NEEDHAM, J.
We concur.
JONES, P.J.
SIMONS, J.
15
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COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Beales and Senior Judge Annunziata
AMANDA M. SUTTON
MEMORANDUM OPINION *
v. Record No. 1567-11-3 PER CURIAM
FEBRUARY 7, 2012
SHENANDOAH VALLEY DEPARTMENT OF SOCIAL SERVICES
FROM THE CIRCUIT COURT OF THE CITY OF STAUNTON
Humes J. Franklin, Jr., Judge
(S. Scott Baker, on brief), for appellant.
(James B. Glick; Paul A. Titus, Guardian ad litem for the minor
child; Vellines, Cobbs, Goodwin & Glass, P.L.C., on brief), for
appellee.
Amanda M. Sutton (mother) appeals a decision of the circuit court terminating her parental
rights to her child, S.C. She contends on appeal that the “trial court erred in finding that the
Shenandoah Valley Department of Social Services [(SVDSS)] met its burden by clear and
convincing evidence to terminate [her] residual parental rights.” We disagree with mother and
summarily affirm the decision of the trial court. See Rule 5A:27.
BACKGROUND
On appeal, we view the evidence in the “‘light most favorable’ to the prevailing party in
the circuit court and grant to that party the benefit of ‘all reasonable inferences fairly deducible
therefrom.’” Toms v. Hanover Dep’t of Soc. Servs., 46 Va. App. 257, 262, 616 S.E.2d 765, 767
(2005) (quoting Logan v. Fairfax County Dep’t of Human Dev., 13 Va. App. 123, 128, 409
S.E.2d 460, 463 (1991)).
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
SVDSS removed the child in February 2009 and placed him in foster care where he has
remained. Although the initial goal was to return the child home, SVDSS social worker Allison
Straw by letter dated July 15, 2010 indicated that mother “has failed to cooperate with services
and has not demonstrated her ability to provide a safe and stable home for the child.” As a
result, SVDSS filed a petition on July 22, 2010, requesting termination of mother’s parental
rights.
On May 17, 2011, the trial court conducted a de novo hearing on mother’s appeal of a
decision by the juvenile and domestic relations district court terminating her residual parental
rights. A summary of the evidence follows. 1
Dr. Gerald Showalter evaluated mother. During the evaluation, mother acknowledged
giving her child unauthorized prescription drugs. Dr. Showalter diagnosed mother with
“paranoia schizophrenia, NOS, together with some certain abnormal personality traits, which he
did not believe would change over time.”
Martha Sheridan, a therapist with Augusta Behavioral Health, met with mother
thirty-three times from February 2009 until June 2010. Sheridan opined that mother made little,
if any, progress.
Barbara Finn, a therapist with Augusta Behavioral Health, worked with mother from June
2010 until March 18, 2011, when mother stopped attending. Finn testified that mother made
some progress.
Social worker Straw worked with the child and mother, and in February 2009, Straw
prepared a foster care plan with an initial goal of “Return Home,” which she later changed to
adoption. Straw explained that mother was referred to Augusta Psychological Associates, but
1
The facts are from the trial court’s detailed letter opinion dated June 6, 2011, the
parties’ signed statement of facts, and the record on appeal.
-2-
she did not succeed in either therapy program and did not follow up with SVDSS. Mother was
then referred to Dr. Christian, who referred her to Dr. Robertson, but mother was dismissed from
that service for noncompliance. Straw related that mother typically exhibited oppositional traits
and on several occasions would become extremely agitated, curse at the doctors and staff, and
throw chairs. Mother was then referred to a fifteen-week parenting class, which she completed
in January 2010. Mother maintained weekly visits with the child except for June and July of
2009. Straw testified that mother exhibited poor parenting skills in the visits, and at times
appeared to be on the verge of crying. At one point, SVDSS allowed mother once-a-month
unsupervised visitation. However, it later became necessary to return to supervised visitation.
Straw referred mother to the Department of Rehabilitative Services (DRS) in July 2009 and
again in September 2009 “to identify the services which were offered,” but mother failed to
participate. Straw met with mother in July 2010 and emphasized the need for her to obtain and
maintain employment. Mother worked at Hardees for a short time until she was terminated, and
she later worked for two days in April 2011, until she was terminated. Although mother
maintained a regular residence, the environment in the home was unstable due, in part, to her
tumultuous relationship with her boyfriend, who lived there “off and on.” The relationship
involved several incidents of physical abuse. Mother acknowledged giving her son sedatives in
the past to keep him “safe from her boyfriend.” Straw “testified that the overall situation was a
non-cooperative one and that between the ages of four and six years old, the child has been in
foster care for over one-third of his life.” Mother’s failure to successfully address the issues and
show improvement after being provided numerous services for an extended period of time
caused SVDSS to change the goal to adoption.
-3-
Mother testified and acknowledged missing some appointments, but stated that her
boyfriend had changed and “they were learning how to cope.” She said she was currently
unemployed, but was looking for work.
After considering all of the evidence, the trial court found that SVDSS proved by clear and
convincing evidence that without good cause, mother has been unwilling or unable within a
reasonable period of time to remedy substantially the conditions that brought the child into foster
care, notwithstanding the reasonable and appropriate efforts and resources provided by SVDSS, and
it is in the best interests of the child that mother’s residual parental rights be terminated.
DISCUSSION
Mother’s counsel endorsed the court’s July 15, 2011 order “SEEN AND OBJECTED
TO:” and did not particularize any basis for her objection. In lieu of a transcript, the parties
submitted an agreed written statement of facts pursuant to Rule 5A:8(c). The statement of facts
did not recite mother’s arguments, if any, or any objections she made to the trial court’s rulings.
Rule 5A:18 provides that “[n]o ruling of the trial court . . . will be considered as a basis
for reversal unless an objection was stated together with reasonable certainty at the time of the
ruling, except for good cause shown or to enable the Court of Appeals to attain the ends of
justice.”
The purpose of the rule is to allow the trial court to cure any error
called to its attention, thereby avoiding unnecessary appeals and
retrials. See, e.g., Lee v. Lee, 12 Va. App. 512, 514, 404 S.E.2d
736, 737 (1991) (en banc). Ordinarily, endorsement of an order
“Seen and objected to” is not specific enough to meet the
requirements of Rule 5A:18 because it does not sufficiently alert
the trial court to the claimed error. See id. at 515, 404 S.E.2d at
738. Such an endorsement is sufficient to satisfy Rule 5A:18 only
if “the ruling made by the trial court was narrow enough to make
obvious the basis of appellant’s objection.” Mackie v. Hill, 16
Va. App. 229, 231, 429 S.E.2d 37, 38 (1993).
Herring v. Herring, 33 Va. App. 281, 286, 532 S.E.2d 923, 927 (2000).
-4-
Notwithstanding mother’s failure to specify a basis for her challenge to the trial court’s
decision, we recognize that “‘[t]he termination of [residual] parental rights is a grave, drastic and
irreversible action,’” Helen W. v. Fairfax County Dep’t of Human Dev., 12 Va. App. 877, 883,
407 S.E.2d 25, 28-29 (1991) (quoting Lowe v. Dept. of Pub. Welfare, 231 Va. 277, 280, 343
S.E.2d 70, 72 (1986)), and therefore consider whether there exists a principled basis for
suspending Rule 5A:18 under the good cause or ends-of-justice exceptions.
“When addressing matters concerning a child, including the termination of a parent’s
residual parental rights, the paramount consideration of a trial court is the child’s best interests.”
Logan, 13 Va. App. at 128, 409 S.E.2d at 463. Where the trial judge hears the evidence ore
tenus, his decision is entitled to great weight and will not be disturbed on appeal unless plainly
wrong or without evidence to support it. See Lowe, 231 Va. at 282, 343 S.E.2d at 73.
A termination of parental rights pursuant to Code § 16.1-283(C)(2) requires the trial court
to find by clear and convincing evidence that termination was in the child’s best interests and
[t]he parent or parents, without good cause, have been unwilling or
unable within a reasonable period of time not to exceed twelve
months from the date the child was placed in foster care to remedy
substantially the conditions which led to or required continuation
of the child’s foster care placement, notwithstanding the
reasonable and appropriate efforts of social, medical, mental health
or other rehabilitative agencies to such end.
In determining what is in the best interests of a child,
a court must evaluate and consider many factors, including the age
and physical and mental condition of the child or children; the age
and physical and mental condition of the parents; the relationship
existing between each parent and each child; the needs of the child
or children; the role which each parent has played, and will play in
the future, in the upbringing and care of the child or children; and
such other factors as are necessary in determining the best interests
of the child or children.
Barkey v. Commonwealth, 2 Va. App. 662, 668, 347 S.E.2d 188, 191 (1986).
-5-
Despite the weighty significance of termination, “[i]t is clearly not in the best interests of
a child to spend a lengthy period of time waiting to find out when, or even if, a parent will be
capable of resuming his [or her] responsibilities.” Kaywood v. Halifax County Dep’t of Soc.
Servs., 10 Va. App. 535, 540, 394 S.E.2d 492, 495 (1990).
Decisions to terminate parental rights under Code § 16.1-283(C)
hinge not so much on the magnitude of the problem that created
the original danger to the child, but on the demonstrated failure of
the parent to make reasonable changes. Considerably more
“retrospective in nature,” subsection C requires the court to
determine whether the parent has been unwilling or unable to
remedy the problems during the period in which he [or she] has
been offered rehabilitation services.
Toms, 46 Va. App. at 271, 616 S.E.2d at 772 (citation omitted).
“In order to avail oneself of the [good cause or ends of justice] exception [to Rule
5A:18], a [litigant] must affirmatively show that a miscarriage of justice has occurred, not that a
miscarriage might have occurred.” Redman v. Commonwealth, 25 Va. App. 215, 221, 487
S.E.2d 269, 272 (1997) (emphasis added). Here, the record falls far short of affirmatively
demonstrating a miscarriage of justice. Code § 16.1-283 provides for the termination of parental
rights when parents are “unwilling or unable within a reasonable period of time not to exceed
twelve months from the date the child was placed in foster care to remedy substantially the
conditions which led to or required continuation of the child’s foster care placement . . . .” Code
§ 16.1-283(C)(2) (emphasis added).
The child was removed in February 2009 and remained in foster care continuously while
SVDSS provided services to mother. By the time of the May 2011 hearing, the child had been in
foster care for over two years. The evidence showed that mother suffered from abnormal
personality traits that would not change over time, and from February 2009 until June 2010,
although mother met with a therapist numerous times, she made little, if any, progress. Mother
-6-
exhibited poor parenting skills during supervised visitations, at times appearing emotionally
distraught. In addition, mother was dismissed from psychological treatment for noncompliance
and poor behavior, and she failed to participate in DRS services despite two referrals in 2009.
Furthermore, mother failed to maintain steady employment, and despite having a regular
residence, the environment was unstable due to mother’s volatile relationship with her boyfriend.
The record supports the circuit court’s findings that SVDSS offered reasonable services,
that mother failed to timely remedy the conditions that led to the removal of the child, that clear
and convincing evidence proved mother’s parental rights should be terminated pursuant to Code
§ 16.1-283(C)(2), and that the termination of her parental rights was in the child’s best interests.
Accordingly, we summarily affirm the judgment of the trial court.
Affirmed.
-7-
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(2008)
Bradford LYTTLE, Plaintiffs,
v.
John KILLACKEY, Officer (F.N.U.) Jones, Officer E. Shields, Unknown Police Officers and Employees of the City of Chicago, and the City of Chicago, Defendants.
No. 07 C 1406.
United States District Court, N.D. Illinois, Eastern Division.
March 13, 2008.
MEMORANDUM OPINION AND ORDER
VIRGINIA M. KENDALL, District Judge.
Plaintiff, Bradford Lyttle ("Lyttle"), moves to reconsider this Court's November 20, 2007 Order dismissing Counts I and IV of Lyttle's Complaint on the basis of res judicata and collateral estoppel. Lyttle filed this action pursuant to 42 U.S.C. § 1983 and the First, Fourth, and Fourteenth Amendments to the Constitution against John Killackey ("Killackey"), Officer (F.N.U.) Jones ("Jones"), Officer E. Shields ("Shields"), Unknown Police Officers ("Officers"), and the City of Chicago ("the City") (collectively "Defendants"). For the reasons stated herein, Lyttle's Motion to Reconsider is granted, but Counts I and IV are dismissed on other grounds namely, as a matter of law because the City's disorderly conduct ordinance is constitutional as written.[1]
I. Background
On March 20, 2003, the night after the United States' invasion of Iraq, Lyttle was part of an anti-war demonstration in Chicago that led to the mass detention of approximately 800 citizens, and the arrest of 500 of those citizens by the Chicago Police Department. Officers Jones and Shields detained and arrested Lyttle under Chicago Municipal Code, MCC8-4-010(d) ("Subsection (d)") which is the disorderly conduct ordinance in Chicago. Lyttle was imprisoned for eight hours and the State prosecuted him for violating the ordinance. During the criminal trial, Lyttle moved to dismiss the charges on the basis that Subsection (d) was unconstitutional, facially vague, and over broad. The judge denied Lyttle's motion. In making its decision, the judge reviewed Illinois Supreme Court cases involving Subsection (d) and challenges to its constitutionality finding that the Illinois Supreme Court had consistently held that Subsection (d) was neither unconstitutional, vague, nor over broad. Id. at Ex. F, 4-6 (citing City of Chicago v. Fort, 46 Ill.2d 12, 262 N.E.2d 473 (Ill. 1970); People v. Raby, 40 Ill.2d 392, 240 N.E.2d 595 (Ill.1968); City of Chicago v. Greene, 47 Ill.2d 30, 264 N.E.2d 163 (Ill. 1970)). On December 12, 2006, the City prosecuted Lyttle on the disorderly conduct charge for which he was arrested in the Circuit Court of Cook County. Cplt. ¶ 17. The court issued a directed finding of not guilty. Cplt. ¶ 17.
Following his acquittal, Lyttle filed this action against Defendants. Lyttle's Complaint alleged that the City's disorderly conduct ordinance is unconstitutional and that his arrest violated his civil rights under color of state law because the ordinance violates the First and Fourteenth Amendments of the United States Constitution, and Sections 2, 4, and 5 of the Illinois Constitution. Cplt. ¶ 18-21. In his Complaint, Lyttle seeks preliminary and permanent injunctions against the City barring the City from enforcing Subsection (d) because the ordinance is unconstitutional. Cplt. ¶ 22. Lyttle also alleged that the City violated his due process rights under 42 U.S.C. § 1983 and brought State law claims against the City for malicious prosecution, respondent superior, and indemnification.
The City moved to dismiss Lyttle's Complaint arguing that Counts I and IV should be dismissed as a matter of law pursuant to the doctrine of res judicata and collateral estoppel, and alternatively, because Subsection (d) is constitutional as written. On November 20, 2007, this Court dismissed Counts I and IV on the basis that Lyttle's facial attacks to the City's ordinance were barred by the doctrines of res judicata and collateral estoppel. Lyttle moved to reconsider the Court's ruling.[2]
In order for Lyttle to prevail on such a motion, he must allege the discovery of new evidence, an intervening change in the controlling law, or a manifest error of law. See LB Credit Corp. v. Resolution Trust Corp., 49 F.3d 1263, 1267 (7th Cir. 1995). Lyttle further argues that the circumstances of his case require this Court to apply an exception to the bar of collateral estoppel because "peculiar circumstances" exist an argument he failed to develop in his filings. Namely, Lyttle argues that he did not have the opportunity to appeal the State Court's decision denying his motion to dismiss because he was later acquitted of the criminal charges. Although Lyttle failed to raise the "peculiar circumstance" exception in his Response brief to Defendants' Motion to Dismiss, Lyttle cited case law supporting his assertion, and therefore, this Court will consider this argument to determine whether the Court's ruling was clearly erroneous and would work an manifest injustice. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988); quoting Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983) ("A court has the power to revisit prior decisions of its own ... in any circumstances such as where the initial decision was `clearly erroneous and would work a manifest injustice.'") Lyttle moved to reconsider the Court's decision under both the collateral estoppel and the res judicata doctrines.
II. Collateral Estoppel
Under Illinois law for the doctrine of collateral estoppel a defendant must show that: "(1) the issue decided in the prior adjudication is identical with the one presented in the suit in question; (2) there was a final judgment on the merits in the prior adjudication; and (3) the party against whom the estoppel is asserted was a party or in privity with a party to the prior adjudication." Bajwa v. Metropolitan Life Ins. Co., 208 Ill.2d 414, 281 Ill. Dec. 554, 804 N.E.2d 519, 532 (2004). Since the doctrine of collateral estoppel is an equitable doctrine, "collateral estoppel must not be applied to preclude parties from presenting their claims or defenses unless it is clear that no unfairness results to the party being estopped." Id. Here, the parties agree that the issues and the parties are identical and that the State Court judge issued a written opinion following a fully briefed motion to dismiss Lyttle's facial attacks to the City's disorderly conduct ordinance. The parties also agree that the State Judge's order was interlocutory, and thus, unappealable, and that the defendant was later acquitted precluding a post-conviction appeal.
Pre-trial rulings in criminal trials can have a preclusive effect on later cases. See e.g. People v. Owens, 102 Ill.2d 145, 79 Ill.Dec. 654, 464 N.E.2d 252, 255 (1984) (estopping inmate from relitigating suppressing his confession because the matter was decided in a motion to suppress hearing before the trial court); People v. Miller, 124 Ill.App.3d 620, 80 Ill.Dec. 214, 464 N.E.2d 1197, 1199 (1984) (barring defendant from relitigating a pretrial motion to suppress unless there is additional evidence or peculiar circumstances warranting reconsideration not merely discovering a new argument). However, Illinois Courts have identified a limited exception to the application of collateral estoppel in "peculiar circumstances," specifically, when a criminal defendant did not have an opportunity to obtain a review of the correctness of a ruling made in his earlier trial because of his acquittal. See People v. Mordican, 64 Ill.2d 257, 1 Ill.Dec. 71, 356 N.E.2d 71, 73-74 (1976); see also People v. Hopkins, 52 Ill.2d 1, 284 N.E.2d 283, 285 (1972) (peculiar circumstances include a "variety of reasons [the criminal defendant] might not wish to appeal" or additional evidence). Lyttle's Motion to Dismiss was denied in an interlocutory order issued by the State Court trial judge, and as such, Lyttle could not appeal the pretrial order. See e.g. People v. Farmer, 165 Ill.2d 194, 209 Ill.Dec. 33, 650 N.E.2d 1006, 1009 (1995) (Under Illinois law, a criminal defendant cannot appeal prior to trial the denial of a pre-trial motion). Nor could Lyttle appeal the decision post-acquittal. See e.g. People v. Collins, 328 Ill.App.3d 366, 262 Ill.Dec. 703, 766 N.E.2d 323 (2d Dist.2002) (A criminal defendant who is acquitted cannot appeal pre-trial rulings). Accordingly, Lyttle's circumstances constitute a "peculiar circumstance" permitting him to raise the issue and not be collaterally estopped under exception to the collateral estoppel doctrine under Illinois law.[3]
Defendants argue that the "peculiar circumstances" exception to the collateral estoppel doctrine is limited to criminal prosecutions citing to the Hopkins and Mordican cases both criminal cases and to Justice Burger's dissent in Ashe v. Swenson, 397 U.S. 436, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970) in which he distinguished the policy rationales for applying collateral estoppel in civil cases as being of less importance in criminal trials. Id. at 464, 90 S.Ct. 1189. Yet, language in the Sutherland opinion suggests against limiting the exception to subsequent criminal prosecutions. See People v. Sutherland, 223 Ill.2d 187, 207, 307 Ill.Dec. 524, 860 N.E.2d 178 (Ill.2006) (emphasis added) ("[W]here a defendant is acquitted and thereby denied the opportunity to appeal the trial court's ruling" that party will not be barred from relitigating the issue "in a subsequent proceeding.") Because Lyttle was not allowed to appeal the State Court Judge's ruling on his motion to dismiss in the criminal proceeding after he was acquitted, Lyttle's claim in this subsequent proceeding is not barred by the doctrine of collateral estoppel. Applying the doctrine of collateral estoppel to Counts I and IV would result in a manifest injustice, and therefore, Lyttle's Motion to Reconsider this Court's ruling dismissing Counts I and IV on the basis of collateral estoppel is granted.
III. Res judicata
Lyttle also moves to reconsider this Court's ruling dismissing Counts I and IV on the basis of res judicata. Federal courts must give a state-court judgment "full faith and credit," and give state-court judgments the res judicata effect an Illinois court would give it. Torres v. Rebarchak, 814 F.2d 1219, 1222 (7th Cir.1987) (applying Illinois law); Long v. Shorebank Dev. Corp., 182 F.3d 548, 560 (7th Cir. 1999) ("Because an Illinois state court rendered the ... order at issue, we must apply Illinois law to determine whether res judicata bars [the] claims."). Under Illinois law, the essential elements of the res judicata doctrine are (1) identity of parties or their privies in the two suits; (2) identity of causes of action in the prior and current suit; and (3) a final judgment on the merits in the prior suit. Rockford Mut. Ins. Co. v. Amerisure Ins. Co. and Michigan Mut. Ins. Co., 925 F.2d 193, 195 (7th Cir.1991); Torres, 814 F.2d at 1222. The parties agree that the first two prongs are met, but disagree as to whether Lyttle received a final judgment on the merits. Specifically, Lyttle contends that the "peculiar circumstance" exception recognized by the Illinois Courts in Mordican, Sutherland, and Hopkins should also be applied to the doctrine of res judicata. Put another way, Lyttle argues that he did not receive a final judgment on the merits because he was prevented from appealing the State Court's interlocutory order denying his motion to dismiss.
The Illinois Supreme Court has yet to address whether the "peculiar circumstance" exception applies to the doctrine of res judicata. Since the Illinois Supreme Court has not directly addressed this issue, decisions of the Illinois Appellate Courts control, unless there are persuasive indications that the Illinois Supreme Court would decide the issue differently. Allen v. Transamerica Insurance Co., 128 F.3d 462, 466 (7th Cir.1997). At least one Appellate Court has limited the applications of both doctrines in "exceptional circumstances." People v. Savory, 105 Ill.App.3d 1023, 61 Ill.Dec. 737, 435 N.E.2d 226, 229-30 (1982) (Defendant was not barred from relitigating his motion to suppress during the second trial by the doctrines of res judicata and collateral estoppel because the statements that the defendant sought to suppress could not have contributed to his first conviction and would have been considered moot on appeal.); see also People v. Smith, 72 Ill.App.3d 956, 28 Ill.Dec. 766, 390 N.E.2d 1356 (1979) (defendant was not precluded from relitigating issues on remand concerning the validity of a search warrant where issues were presented to, but not decided by, the appellate court).
Moreover, Illinois Courts refrain from applying res judicata and collateral estoppel "if the plaintiff did not have a full and fair opportunity to litigate his claim in state court." Hicks v. Midwest Transit, Inc., 479 F.3d 468, 471 (7th Cir.2007) (res judicata); see also Sutherland, 223 Ill.2d at 207, 307 Ill.Dec. 524, 860 N.E.2d 178 (collateral estoppel); citing People v. Pawlaczyk, 189 Ill.2d 177, 244 Ill.Dec. 13, 724 N.E.2d 901 (2000), quoting Vroegh v. J & M Forklift, 165 Ill.2d 523, 209 Ill.Dec. 193, 651 N.E.2d 121 (1995). Under Illinois law, "the denial of [a] defendant's motion to dismiss the indictment [is] not a final and appealable order" but is, in fact, an interlocutory order. See People v. Taylor, 6 Ill.App.3d 961, 286 N.E.2d 122, 123 (1972). And, Illinois courts have held that "[r]es judicata does not apply to an interlocutory order." Id; citing Quinn v. McMahan, 40 Ill.App. 593; see also People v. 1965 Chevrolet, 99 Ill.App.2d 201, 240 N.E.2d 169 (1st Dist.1968).
Because the Illinois Appellate Court has recognized an "exceptional circumstances" exception to the doctrine of res judicata similar to the "peculiar circumstance" exception to the doctrine of collateral estoppel set forth in People v. Hopkins and because Illinois Courts do not apply res judicata when a dismissal is not final and appealable, it would result in manifest injustice to bar Lyttle's claims on the basis of res judicata. See Savory, 61 Ill.Dec. 737, 435 N.E.2d at 229-30; citing Hopkins, 284 N.E.2d at 285. Therefore, Lyttle's motion to reconsider dismissing Counts I and IV on the basis of res judicata is granted.
IV. Lyttle's facial challenge to Subsection (d) fails as a matter of law because the ordinance is constitutional as written.
A) Background
This Court originally dismissed Counts I and IV as barred by the doctrines of res judicata and collateral estoppel on November 20, 2007; and as a result, this Court did not consider' Defendants' other arguments in support of dismissing Counts I and IV. Because the Court is now reconsidering that dismissal, the Court will now consider the constitutional arguments presented by the parties.
Lyttle mounts only facial challenges to Subsection (d) arguing it impermissibly infringes on the First Amendment's protection of freedom of speech and assembly without serving any compelling state interests; it is vague; it confers upon third parties a "hecklers' veto"; it is over broad; it fails to ensure that authorities to do not abuse their discretion; it fails to require authorities issuing the order to disperse to provide those affected a reasonable opportunity to comply; and it fails to specify what acts must be committed by three or more persons in order to the justify an order to disperse. Cplt, Count I, ¶¶ A-G. Lyttle contends that he was arrested for violating Subsection (d) while he was exercising his First Amendment rights in a public forum, and thus, Lyttle believes that his constitutional rights were violated.
Subsection (d), the City's disorderly conduct ordinance, provides in pertinent part:
"A person commits disorderly conduct when he knowingly: (d) Fails to obey a lawful order of dispersal by a person known by him to be a peace officer under circumstances where three or more persons are committing acts of disorderly conduct in the immediate vicinity, which acts are likely to cause substantial harm or serious inconvenience, annoyance or alarm ..."
The test that a facial challenge must meet is demanding. "A facial challenge to a legislative Act is ... the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which the Act would be valid." United States v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095, 95 L.Ed.2d 697 (1987). When a statute is reasonably capable of a construction compatible with the Constitution, courts are required to so construe it in that way. See St. Martin Evangelical Lutheran Church v. South Dakota, 451 U.S. 772, 780, 101 S.Ct. 2142, 68 L.Ed.2d 612 (1981). "Even in a public forum the government may impose reasonable restrictions on the time, place, or manner of protected speech, provided the restrictions `are justified without reference to the content of the regulated speech, that they are narrowly tailored to serve a significant governmental interest, and that they leave open ample alternative channels for communication of the information.'" Ward v. Rock Against Racism, 491 U.S. 781, 791, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989); citing Clark v. Community for Creative Non-Violence, 468 U.S. 288, 293, 104 S.Ct. 3065, 82 L.Ed.2d 221 (1984). This Court considers these requirements in turn.
B) Subsection (d) is a content neutral, reasonable time, place, and manner regulation of conduct.
The first consideration is whether Subsection (d) is content neutral. "The principal inquiry in determining content neutrality in speech cases generally, and in time, place, or manner cases in particular, is whether the government has adopted a regulation of speech because of disagreement with the message it conveys." Ward Rock, 491 U.S. at 791, 109 S.Ct. 2746. A regulation that serves purposes unrelated to the content of expression is deemed neutral, even if it has an incidental effect on some speakers or messages but not others. Id.; citing Renton v. Playtime Theatres, Inc., 475 U.S. 41, 47-48, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986). Government regulation of expressive activity is content neutral so long as it is "justified without reference to the content of the regulated speech." Id.; citing Community for Creative Non-Violence, 468 U.S. at 293, 104 S.Ct. 3065; Heffron, 452 U.S. at 648, 101 S.Ct. 2559 (quoting Virginia Pharmacy Bd., 425 U.S. at 771, 96 S.Ct. 1817); see Boos v. Barry, 485 U.S. 312, 320-321, 108 S.Ct. 1157, 99 L.Ed.2d 333 (1988). The City's disorderly conduct ordinance does not identify any message nor does it challenged the content of speech. Instead, it targets conduct that is disruptive. Because the Ordinance does not restrict any particular message or form of expression, Subsection (d) is content-neutral.
Additionally, Subsection (d) is a reasonable time, place, and manner regulation of conduct. Subsection (d) constrains the ability to stand in the vicinity of three or more people who are creating a serious disturbance after a peace officer has ordered a lawful dispersal. Lyttle alleges that the anti-war demonstration included at least "some 800 citizens" and took place at the corner of Oak Street and Michigan Avenue in downtown Chicago. Insomuch as the subsection incidentally restricts speech at the time and location of a disturbance, the ordinance serves a significant interest of regulating street traffic and assuring public safety. See e.g. Cox v. Louisiana, 379 U.S. 536, 554-55, 85 S.Ct. 453, 13 L.Ed.2d 471 (1965) ("[T]he State has a legitimate interest in enforcing its traffic laws and its officers were entitled to enforce them free from possible interference or interruption from bystanders, even those claiming a third-party interest in the transaction."); Accord Grayned v. City of Rockford, 408 U.S. 104, 115-16, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972) ("A demonstration or parade on a large street during rush hour might put an intolerable burden on the essential flow of traffic, and for that reason could be prohibited").
Because Subsection (d) is content-neutral, intermediate scrutiny applies. See Turner Broadcasting System, Inc. v. Federal Communications Comm'n, 512 U.S. 622, 662, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994) (intermediate scrutiny applies to interpretation of an ordinance that is content neutral and imposes an incidental burden on speech). Lyttle briefly suggests that this Court should apply "strict scrutiny" as the Court did in Watcktower Bible & Tract Society of New York, Inc. v. Village of Stratton, 536 U.S. 150, 122 S.Ct. 2080, 153 L.Ed.2d 205 (2002). Watchtower Bible, however, involved a statute that prevented all door-to-door canvassing without first registering and receiving a permit; whereas Subsection (d) is violated only when an individual fails to adhere to a peace officer's order to disperse. Therefore, this content neutral ordinance requires the Court to apply an intermediate level of scrutiny when determining its constitutionality.
C) Subsection (d) is narrowly tailored to serve a significant governmental interest.
Subsection (d) is narrowly tailored and is not substantially broader than necessary to achieve the government's interest. A statute is narrowly tailored if it targets and eliminates no more than the exact source of the "evil" it seeks to remedy. Frisby v. Schultz, 487 U.S. 474, 484-85, 108 S.Ct. 2495, 101 L.Ed.2d 420 (1988); citing City Council of Los Angeles v. Taxpayers for Vincent, 466 U.S. 789, 808-810, 104 S.Ct. 2118, 80 L.Ed.2d 772 (1984). Put another way, the statute is narrowly tailored "[s]o long as the means chosen [by the City] are not substantially broader than necessary to achieve the government's interest." Ward 491 U.S. at 799, 109 S.Ct. 2746. The statute need not be the "least restrictive or the least intrusive means." Id.
This Court finds that Subsection (d) is narrowly tailored because there are at least six conditions that limit its reach: 1) a disturbance "likely to cause substantial harm or serious inconvenience, annoyance or alarm" must be in progress; 2) the disturbance must involve three or more persons; 3) the disturbance must be in the immediate vicinity of the peace officer; 4) the peace officer must issue an order to disperse; 5) the person subject to the dispersal order must know the order is being issued by a peace officer; and 6) the person must "knowingly" fail to obey the order. See Chicago Mun. § 8-4-010(d). Although Lyttle asserts that the ordinance fails because it does not require that a disturbance be imminent, the ordinance is only invoked when an officer observes circumstances where three or more persons are committing acts of disorderly conduct in the immediate vicinity which are likely to cause substantial harm or serious inconvenience, annoyance or alarm. Chicago Mun. § 8-4-010(d) (emphasis added). As such, Subsection (d) is narrowly tailored because it eliminates the exact source of the "evil" it seeks to remedy a group of persons causing substantial harm, serious inconvenience, or alarm in the immediate vicinity of a peace officer that refuses to disperse after a lawful order of dispersal has been given.
In 1992, the Supreme Court affirmed the constitutionality of a disorderly conduct statute similar to the City's ordinance and even broader than Subsection (d). See Colten v. Kentucky, 407 U.S. 104, 92 S.Ct. 1953, 32 L.Ed.2d 584 (1972). In that case, the Plaintiff was arrested for disorderly conduct after he failed to obey an officer's request to leave a congested roadside where his friend was being ticketed. Id. at 110, 92 S.Ct. 1953. The ordinance applicable to Colten's arrest provided:
(1) A person is guilty of disorderly conduct if, with intent to cause public inconvenience, annoyance or alarm, or recklessly creating a risk thereof, he:
(f) Congregates with other persons in a public place and refuses to comply with a lawful order of the police to disperse.
Id.; citing Ky.Rev. Stat. § 437.016(1)(f) (Supp.1968). The Court affirmed both Colten's conviction and the constitutionality of the Kentucky ordinance. In doing so, the Court rejected Colten's "over-breadth argument" finding that "individuals may not be convicted under the Kentucky statute merely for expressing unpopular or annoying ideas." Id. Rather, the statute had effect only in situations when "the individual's interest in expression, judged in the light of all relevant factors, was `minuscule' compared to a particular public interest in preventing that expression or conduct at that time and place." Id. at 111, 92 S.Ct. 1953.
Similarly, Subsection (d) also leaves open ample alternative channels of communication. Lyttle himself pleaded that protesters were allowed to gather at the plaza on March 20, 2003 to protest the war. Protesters could have continued to exercise their First Amendment rights provided that they continued to conduct themselves in a manner that did not cause substantial harm, serious inconvenience, annoyance, or alarm. Not only does Lyttle fail to plead facts supportive of his assertion that the ordinance does not allow protesters to disperse and assemble elsewhere; the plain wording of the ordinance contradicts that interpretation. Subsection (d), on its face, allows persons an opportunity to comply with the order of dispersal prior to arrest because it requires that a person "knowingly" violate the order. Accordingly, a person expressing his First Amendment rights who is lawfully ordered to disperse may reconvene elsewhere and continue to exercise his First Amendment rights.[4]
Subsection (d) also serves a significant government interest. Lyttle has pleaded that the demonstration took place at the intersection of Oak Street and Michigan Avenue a busy intersection in downtown Chicago. Courts have upheld similar statutes and ordinances which concern the safety, order, and convenience of other citizens, enforcing traffic laws, and avoiding congestion. See Heffron, 452 U.S. at 653-4, 101 S.Ct. 2559 (a statute is constitutional if it protects the State's interest in avoiding congestion and maintaining orderly movement of patrons); Colten, 407 U.S. at 110, 92 S.Ct. 1953 (1972) (a statute is constitutional if it protects the state's "legitimate interest in enforcing [its] traffic laws ..."); Cox v. New Hampshire, 312 U.S. 569, 574, 61 S.Ct. 762, 85 L.Ed. 1049; (municipalities may impose regulations to assure the safety and convenience of public highways). Subsection (d) serves the interest of protecting the public from disturbances that threaten substantial harm, serious annoyance, or alarm and this Court finds that doing so, especially at the intersection of Oak Street and Michigan Avenue, a congested area of a large City, serves a significant government interest. See Heffron, 452 U.S. at 653-54, 101 S.Ct. 2559; (ensuring the safety and convenience of public places serves a substantial governmental interest); see also Grayned v. City of Rockford, 408 U.S. 104, 116-117, 92 S.Ct. 2294, 33 L.Ed.2d 222; Lehman v. City of Shaker Heights, 418 U.S. 298, 302-303, 94 S.Ct. 2714, 41 L.Ed.2d 770 (1974) (consideration of a forum's special attributes is relevant to the constitutionality of a regulation since the significance of the governmental interest must be assessed in light of the characteristic nature and function of the particular forum involved).[5]
D) Subsection (d) does not allow a "Heckler's Veto".
Lyttle next contends that Subsection (d) confers upon third parties a "hecklers' veto" which is law enforcement criminalizing otherwise legal, First Amendment protected conduct. See Forsyth County, Ga. v. Nationalist Movement, 505 U.S. 123, 112 S.Ct. 2395, 120 L.Ed.2d 101 (1992). The "heckler's veto" label fails to define this ordinance because Subsection (d) is content-neutral and the "heckler's veto" doctrine applies solely to content-based restrictions on speech. See Terminiello, 337 U.S. at 4-5, 69 S.Ct. 894; Reno v. ACLU, 521 U.S. 844, 880, 117 S.Ct. 2329, 138 L.Ed.2d 874 (1997); Church of the Am. Knights of the Ku Klux Klan v. City of Gary, 334 F.3d 676, 689-81 (7th Cir.2003).
E) Subsection (d) is not impermissibly vague.
Lyttle argues that Subsection (d) is impermissibly vague as to what conduct it forbids so that persons of common intelligence must necessarily guess at its meaning. Lyttle also contends that the ordinance fails to give persons fair warning as to what conduct is forbidden. Cplt. ¶ 19B. When assessing whether Lyttle has stated a valid claim in his Complaint regarding the impermissibly vague nature of Subsection (d), this Court must make two determinations: first, the court must determine whether the penal statute defines "the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited"; and second the court must determine whether the statute is enforced in a manner that encourages arbitrary and discriminatory enforcement. Kolender v. Lawson, 461 U.S. 352, 357, 103 S.Ct. 1855, 75 L.Ed.2d 903 (1983).
1. The ordinance gives clear notice of the conduct prohibited.
Subsection (d) clearly defines the prohibited conduct. A person must fail to disperse when ordered by a police officer, when there are three or more people committing acts of disorderly conduct in the immediate vicinity, before he can be arrested. The statute defines disorderly conduct as acts that are likely to cause substantial harm or serious inconvenience, annoyance or alarm to others. An ordinary person can understand what is prohibited by this statute. See United States v. Lanier, 520 U.S. 259, 265, 117 S.Ct. 1219, 137 L.Ed.2d 432 (1997).
The Colten Court rejected the contention that the Kentucky disorderly conduct statute was void for vagueness. 407 U.S. at 110, 92 S.Ct. 1953. It reasoned, "the statute authorized conviction for refusing to disperse with the intent of causing inconvenience, annoyance, or alarm." Id. Like the Colten ordinance, Subsection (d) authorizes conviction for knowingly failing to obey a lawful order of dispersal after committing acts that are likely to cause substantial harm or serious "inconvenience, annoyance, or alarm." Arguably, the Colten ordinance is broader than Subsection (d) because a person will not be arrested for merely causing inconvenience, annoyance, or alarm, but rather will only be arrested after doing so in the immediate vicinity of a peace officer, with three or more persons, and only after knowingly disobeying a lawful order of dispersal. Citizens will have no difficulty in understanding the statute.
The narrowly-defined situation of an ongoing disturbance that threatens substantial harm, serious inconvenience, annoyance, or alarm distinguishes Subsection (d) from the gang loitering statute in Chicago v. Morales, 527 U.S. 41, 119 S.Ct. 1849, 144 L.Ed.2d 67 (1999). The gang loitering ordinance addressed in Morales banned any public presence involving "no apparent purpose" and relied upon the police officer's subjective belief that someone in the loitering group was a criminal street gang member. Id. at 47, 119 S.Ct. 1849. The right to loiter is constitutionally protected conduct. Id. at 53, 119 S.Ct. 1849. Subsection (d), however, does not allow officers to order dispersal of individuals who are merely loitering. Subsection (d) governs "disorderly conduct" as defined in the ordinance, which is "likely to cause substantial harm or serious inconvenience, annoyance, or alarm." Lyttle does not allege that disorderly conduct, the underlying offense in Subsection (d), is constitutionally protected.
2. The language of Subsection (d) discourages arbitrary and discriminatory enforcement.
Subsection (d) also ensures that the police officers cannot choose to enforce the ordinance in an arbitrary or discriminatory manner. The police officer must observe someone who is in the midst of committing disorderly conduct and then the officer must order the individual(s) to disperse. Before ordering the individual to disperse, the officer must identify himself as a police officer. Once a lawful order of dispersal is given, the officer may only arrest the individual if he or she "knowingly" fails to obey the order. Despite Lyttle's arguments, the ordinance does not equate disorderly conduct with a failure to obey an order to disperse. Rather, Subsection(d) separately defines what is considered to be "disorderly conduct" and requires the peace officer to issue a lawful order to disperse. An officer cannot arrest the individual until that individual "knowingly" fails to obey the order.[6]
Despite Lyttle's arguments, Subsection (d) establishes minimal guidelines for law enforcement distinguishing it from the Morales gang loitering ordinance. The ordinance in Morales allowed officers to order individuals to disperse when they appeared to be loitering for with no apparent purpose. Id. at 62, 119 S.Ct. 1849. The Supreme Court found that the "`no apparent purpose' standard for making that decision [was] inherently subjective because its application depend[ed] on whether some purpose [was] `apparent' to the officer on the scene." Id. Subsection (d), however, only allows officers to give a dispersal order if the individual is currently committing acts which are "likely to cause substantial harm or serious inconvenience, annoyance, or alarm." Only after the individual refuses to obey a lawful dispersal order is the officer allowed to arrest. There is a significant difference between an officer who is allowed to order someone to disperse because he does not perceive a purpose for the individual's conduct and an officer who is observing actual conduct and determines that the conduct is likely to cause harm.
V. Conclusion
For the reasons stated, this Court finds that Subsection (d) is constitutional as written. Lyttle has failed the demanding challenged of establishing that "no set of circumstances exists under which the Act would be valid." See Salerno, 481 U.S. at 745, 107 S.Ct. 2095.[7] Therefore, Counts I and IV are dismissed with prejudice.
So ordered.
NOTES
[1] Although briefed by the parties, this Court did not reach the constitutionality issue in its original opinion because it dismissed Counts I and IV on the basis of res judicata and collateral estoppel.
[2] In the November 20, 2007 Order, this Court dismissed Count III without prejudice.
[3] In its Memorandum and Opinion Order dated November 20, 2007, this Court likened Lyttle's case to Thompson v. Mueller. See 976 F.Supp. 762 (N.D.Ill.1997). Upon further review, Thompson is distinguishable because the Court applied the collateral estoppel doctrine because under the particular facts of the case it was "not unfair nor would it lead to an injustice since appeals of credibility determinations go nowhere." Id. at 766. The Court's decision in Lyttle's criminal trial did not rest upon a credibility determination, but rather, upon its interpretation of Illinois law. Accordingly, Lyttle's circumstances are more akin to those presented in Torn v. Gainer, 370 F.Supp.2d 736, 740 (acquittal is a peculiar circumstance that militates against collateral estoppel) and the reasoning set forth in the recent Illinois Supreme Court decision in People v. Sutherland. 370 F.Supp.2d 736 (N.D.Ill.2005); 223 Ill.2d 187, 207, 307 Ill. Dec. 524, 860 N.E.2d 178 (Il.2006) (Special circumstances have been found where a defendant is acquitted and thereby denied the opportunity to appeal the trial court's ruling).
[4] Although Lyttle claims that no dispersal order was given, Lyttle has not set forth an "as applied" challenge to the statute. Certainly, Lyttle has successfully pleaded a cause of action under Section 1983, false detention and arrest, and malicious prosecution to challenge the City's motives behind his arrest assuming Lyttle's allegations are true under the 12(b)(6) standard. However, these facts do not bear upon a facial challenged to the constitutionality of a content-neutral ordinance.
[5] Lyttle cites Terminiello v. Chicago, 337 U.S. 1, 69 S.Ct. 894, 93 L.Ed. 1131 (1949) in support of his assertion that Subsection (d) does not serves a significant governmental interest. Terminiello is distinguishable because that case involved speech that incited the public to anger, invited dispute, or created a disturbance. Terminiello, 337 U.S. at 4, 69 S.Ct. 894. In contrast, this ordinance is content-neutral.
[6] In the context of other disorderly conduct and similar statutes, the Supreme Court has recognized that the standards of enforcement must be less precise than for other types of criminal or quasi-criminal charges. For example, in Smith v. Goguen, 415 U.S. 566, 581, 94 S.Ct. 1242, 39 L.Ed.2d 605 (1974), the Court held:
There are areas of human conduct where, by the nature of the problems presented, legislatures simply cannot establish standards with great precision. Control of the broad range of disorderly conduct that may inhibit a policeman in the performance of his official duties may be one such area, requiring as it does an on-the-spot assessment of the need to keep order. Cf. Colten v. Kentucky. 407 U.S. 104, 92 S.Ct. 1953, 32 L.Ed.2d 584 (1972).
[7] Subsection(d) has been upheld by several Illinois Supreme and Appellate Court decisions. See City of Chicago v. Weiss, 51 Ill.2d 113, 281 N.E.2d 310, 313-14 (1970); City of Chicago v. Greene, 47 Ill.2d 30, 264 N.E.2d 163, 166 (1970); City of Chicago v. Jacobs, 46 Ill.2d 214, 263 N.E.2d 41, 43 (1970); City of Chicago v. Fort, 46 Ill.2d 12, 262 N.E.2d 473, 475 (1970). The language of the ordinance is broader than the language upheld as constitutional in Colten v. Kentucky, 407 U.S. at 110-111, 92 S.Ct. 1953, has been endorsed by the American Law Institute, and appears in the Model Penal Code. See Model Penal Code (U.L.A.) § 250.1(2).
| {
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403 So.2d 292 (1981)
Ex parte Keith WHITE.
(Re: Keith White v. State of Alabama).
No. 80-689.
Supreme Court of Alabama.
August 21, 1981.
T. Michael Putnam of Potts, Young & Blasingame, Florence, for appellant.
No briefs filed for respondent.
TORBERT, Chief Justice.
The duty is not on the defendant to request a court reporter. He is entitled to a court reporter but can waive the right.
*293 By denying the writ, we are not to be understood as approving the statement by the Court of Criminal Appeals that "[n]o violation of the guaranty of due process results from the failure to provide a court reporter to preserve a record of testimony in the absence of a request therefore," for which proposition that court cited Aldridge v. State, 278 Ala. 470, 179 So.2d 51 (1965).
WRIT DENIED.
MADDOX, JONES, SHORES and BEATTY, JJ., concur.
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17-2931
Singh v. Barr
BIA
Kolbe, IJ
A202 065 218
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Thurgood Marshall United
States Courthouse, 40 Foley Square, in the City of New York,
on the 22nd day of November, two thousand nineteen.
PRESENT:
ROBERT A. KATZMANN,
Chief Judge,
REENA RAGGI,
SUSAN L. CARNEY,
Circuit Judges.
_____________________________________
MAKHAN SINGH,
Petitioner,
v. 17-2931
NAC
WILLIAM P. BARR, UNITED STATES
ATTORNEY GENERAL,
Respondent.
_____________________________________
FOR PETITIONER: Jaspreet Singh, Esq., Jackson
Heights, NY.
FOR RESPONDENT: Chad A. Readler, Acting Assistant
Attorney General; Greg D. Mack,
Senior Litigation Counsel;
Shahrzad Baghai, Trial Attorney,
Office of Immigration Litigation,
United States Department of
Justice, Washington, DC.
UPON DUE CONSIDERATION of this petition for review of a
Board of Immigration Appeals (“BIA”) decision, it is hereby
ORDERED, ADJUDGED, AND DECREED that the petition for review
is DENIED.
Petitioner Makhan Singh, a native and citizen of India,
seeks review of an August 23, 2017, decision of the BIA
affirming a January 20, 2017, decision of an Immigration Judge
(“IJ”) denying asylum, withholding of removal, and relief
under the Convention Against Torture (“CAT”). In re Makhan
Singh, No. A202 065 218 (B.I.A. Aug. 23, 2017), aff’g No.
A202 065 218 (Immig. Ct. N.Y. City Jan. 20, 2017). We assume
the parties’ familiarity with the underlying facts and
procedural history in this case.
Because the BIA agreed with the IJ and “emphasize[d]
particular aspects of that decision,” we have reviewed both
decisions. Yun-Zui Guan v. Gonzales, 432 F.3d 391, 394 (2d
Cir. 2005). The applicable standards of review are well
established. See 8 U.S.C. § 1252(b)(4)(B); see also Chuilu
Liu v. Holder, 575 F.3d 193, 196 (2d Cir. 2009) (reviewing
factual findings underlying burden of proof determinations
under the substantial evidence standard); Yanqin Weng v.
Holder, 562 F.3d 510, 513 (2d Cir. 2009) (reviewing questions
2
of law to undisputed fact de novo). The agency did not err
in finding that Singh failed to satisfy his burden of proof
given problems with his testimony and a lack of reliable
corroborating evidence that Congress Party members in India
beat him and threatened him and his father because they were
members of the Akali Dal Mann Party (“Mann Party”).
“The testimony of the applicant may be sufficient to
sustain the applicant’s burden without corroboration, but
only if the applicant satisfies the trier of fact that the
applicant’s testimony is credible, is persuasive, and refers
to specific facts sufficient to demonstrate that the
applicant is a refugee.” 8 U.S.C. § 1158(b)(1)(B)(ii); see
also Chuilu Liu, 575 F.3d at 196-97. “In determining whether
the applicant has met [his] burden, the trier of fact may
weigh the credible testimony along with other evidence of
record. Where the trier of fact determines that the
applicant should provide evidence that corroborates otherwise
credible testimony, such evidence must be provided unless the
applicant does not have the evidence and cannot reasonably
obtain the evidence.” 8 U.S.C. § 1158(b)(1)(B)(ii). “No
court shall reverse a determination made by a trier of fact
with respect to the availability of corroborating evidence .
3
. . unless the court finds . . . that a reasonable trier of
fact is compelled to conclude that such corroborating
evidence is unavailable.” 8 U.S.C. § 1252(b)(4).
The IJ did not err in declining to credit Singh’s
evidence of his alleged persecution and in finding it
insufficient to meet his burden. The medical certificate
Singh provided to corroborate an injury was not
contemporaneous with treatment and had no foundation given
Singh’s testimony that he threw away the mailing envelope and
his admission that he did not know how the document was
created or what records the author relied on. See Y.C. v.
Holder, 741 F.3d 324, 334 (2d Cir. 2013) (“We defer to the
agency’s determination of the weight afforded to an alien’s
documentary evidence.”); see also In re H-L-H- & Z-Y-Z-, 25
I. & N. Dec. 209, 214 n.5 (BIA 2010) (noting that the “failure
to attempt to prove the authenticity of a document through [8
C.F.R. § 1287.6] or any other means is significant”),
overruled on other grounds by Hui Lin Huang v. Holder, 677
F.3d 130, 133-38 (2d Cir. 2012).
Nor was the IJ required to credit the evidence Singh
submitted to corroborate his claim that Congress Party
members harmed him, which consisted of statements from the
4
Mann Party president, a village leader, his mother, his uncle,
and his neighbor. The statements were prepared for Singh’s
removal proceedings, they contained some nearly identical
language, Singh’s mother was an interested witness, and the
authors were not available for cross-examination. See Y.C.,
741 F.3d at 334 (deferring to agency decision to afford little
weight to petitioner’s husband’s letter because it was
unsworn and from an interested witness); see also In re H-L-
H- & Z-Y-Z-, 25 I. & N. Dec. at 215 (finding letters from
friends and family insufficient to support alien’s claims
because the authors were interested witnesses not subject to
cross-examination), overruled on other grounds by Hui Lin
Huang, 677 F.3d at 133-38; Surinder Singh v. BIA, 438 F.3d
145, 148 (2d Cir. 2006) (determining that “the nearly
identical language in the written affidavits allegedly
provided by different people” was a proper consideration in
an adverse credibility determination). Further, a Mann Party
document, which confirmed Singh’s membership in the party,
did not contain any details of Singh’s alleged persecution
and contains a confusing postscript implying that the letter
was a template that could be forged.
5
The IJ reasonably required corroboration given Singh’s
nonresponsive testimony about whether he had evidence of his
father’s political participation, and his inconsistent
testimony about when his father went missing. See 8 U.S.C.
§ 1158(b)(1)(B)(ii); see also Chuilu Liu, 575 F.3d at 196-
97. The IJ properly identified the missing evidence. See
Chuilu Liu, 575 F.3d at 198-99. Singh testified that his
father was a member of the Mann Party, influenced his
political work, and was also threatened by the Congress Party,
but he did not produce a letter from his father. The agency
was not required to credit his explanation that his father
could not provide a letter given Singh’s inconsistent
testimony about when his father went missing. See 8 U.S.C.
§ 1252(b)(4)(B); Majidi v. Gonzales, 430 F.3d 77, 80 (2d Cir.
2005) (“A petitioner must do more than offer a plausible
explanation for his inconsistent statements to secure relief;
he must demonstrate that a reasonable fact-finder would be
compelled to credit his testimony.” (internal quotation marks
omitted)). And despite submitting a letter from the Mann
Party about his own membership, he did not provide similar
information about his father’s membership. The IJ did not
err in finding this evidence reasonably available given that,
6
a month prior to his hearing, Singh received a membership
confirmation letter from the Mann Party that his father had
arranged. See 8 U.S.C. § 1252(b)(4).
Given the lack of persuasive and credible testimony and
reliable corroboration, the agency did not err in finding
that Singh failed to satisfy his burden of establishing past
persecution on account of his political opinion. See 8
U.S.C. § 1158(b)(1)(B)(ii); Chuilu Liu, 575 F.3d at 196-98.
That finding is dispositive of asylum, withholding of
removal, and CAT relief because all three claims were based
on the same factual predicate. See Paul v. Gonzales, 444
F.3d 148, 156-57 (2d Cir. 2006).
For the foregoing reasons, the petition for review is
DENIED. As we have completed our review, the pending motion
for a stay of removal in this petition is DISMISSED as moot.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
7
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09-4726-cv
G&G Steel, Inc. v. Sea Wolf Marine Transp., LLC
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUM M ARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUM M ARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERM ITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. W HEN
CITING A SUM M ARY ORDER IN A DOCUM ENT FILED W ITH THIS COURT, A PARTY M UST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (W ITH THE NOTATION
“SUM M ARY ORDER”). A PARTY CITING A SUM M ARY ORDER M UST 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 10 th day of June, two thousand ten.
PRESENT: JON O. NEWMAN,
REENA RAGGI,
PETER W. HALL,
Circuit Judges.
----------------------------------------------------------------------
G&G STEEL, INC.,
Plaintiff-Appellant,
v. No. 09-4726-cv
SEA WOLF MARINE TRANSPORTATION, LLC,
Defendant-Appellee.
-----------------------------------------------------------------------
APPEARING FOR APPELLANT: FRANK E. DE GRIM, Luboja & Thau, LLP,
New York, New York.
APPEARING FOR APPELLEE: GARTH S. WOLFSON, Mahoney & Keane, LLP,
New York, New York.
Appeal from the United States District Court for the Southern District of New York
(Charles S. Haight, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court entered on October 28, 2009, is
AFFIRMED.
Plaintiff G&G Steel, Inc. (“G&G”), appeals from an award of summary judgment in
favor of defendant Sea Wolf Marine Transportation, LLC, (“Sea Wolf”) on G&G’s claims
of negligence and breach of maritime contract.1 In particular, G&G submits that the district
court erred in concluding that its claims were foreclosed by the rule announced in Robins Dry
Dock & Repair Co. v. Flint, 275 U.S. 303 (1927), because (1) G&G raised triable issues of
fact as to whether it possessed a proprietary interest in the subject vessel, and (2) its claims
fall within the loss-shifting exception to the rule. We review a summary judgment award de
novo, viewing the facts in the light most favorable to the non-moving party. See Havey v.
Homebound Mortgage, Inc., 547 F.3d 158, 163 (2d Cir. 2008). While we will not uphold an
award in favor of the defendant if the evidence is sufficient to permit a reasonable jury to
find for the plaintiff, the plaintiff must point to more than a scintilla of evidence in support
of its claims to defeat summary judgment. See id.; see also Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 252 (1986). In applying these standards, we assume the parties’ familiarity
with the facts and the record of prior proceedings, which we reference only as necessary to
explain our decision to affirm.
1
Although Sea Wolf moved for dismissal pursuant to Fed. R. Civ. P. 12(b)(6), the
district court converted the motion to one for summary judgment under Fed. R. Civ. P. 56.
2
1. Proprietary Interest
G&G contends that its obligation to “maintain the MARMAC [400] in a good and
seaworthy condition” and to pay certain expenses relating to the use and insurance of the
vessel give rise to a proprietary interest sufficient to render the Robins Dry Dock rule
inapplicable. Appellant’s Br. at 9. We are not persuaded.
In Robins Dry Dock, the Supreme Court held that “a tort to the person or property of
one man does not make the tort-feasor liable to another merely because the injured person
was under a contract with that other unknown to the doer of the wrong.” 275 U.S. at 309.
The ruling effectively bars recovery for economic losses caused by an unintentional maritime
tort absent physical damage to property in which the victim has a proprietary interest. See
Federal Commerce & Navigation Co., Ltd. v. M/V MARATHONIAN, 528 F.2d 907, 908
(2d Cir. 1975); Agwilines, Inc. v. Eagle Oil & Shipping Co., 153 F.2d 869, 871-72 (2d Cir.
1946) (L. Hand, J.); Conti Corsi Schiffahrts-GMBH & Co. KG NR. 2 v. M/V “PINAR
KAPTANOGLU”, 414 F. Supp. 2d 443, 446-47 (S.D.N.Y. 2006) (discussing “bright line
rule” established by consistent application of Robins Dry Dock).
To establish a proprietary interest, G&G was required to show that it had “actual
possession or control, responsibility for repair and responsibility for maintenance” of the
MARMAC 400. IMTT-Gretna v. Robert E. Lee SS, 993 F.2d 1193, 1194 (5th Cir. 1993);
see also Gas Natural SDG S.A. v. United States, No. 04 Civ. 8370, 2007 WL 959259, at *3
(S.D.N.Y. Mar. 22, 2007); MTA Metro-North R.R. v. Buchanan Marine, L.P., No. 05 Civ.
3
881, 2006 WL 3655244, at *6 (D. Conn. Dec. 12, 2006) (noting that “[a]ctual ownership or
title is not necessary to demonstrate that a proprietary interest exists”). The record evidence
does not permit such a finding.
Under the terms of the relevant charter party, the owner of the MARMAC 400 bore
responsibility for carrying and paying for “Hull and Protection and Indemnity insurance” in
the amount of $8.5 million and $5 million, respectively, while G&G agreed to pay a $50,000
deductible on any “Hull” or “Protection and Indemnity” claim and “to provide and carry
Comprehensi[ve] General Liability [insurance].” May 6, 2004 Time Charter Party. In the
event of a “total or constructive total loss” of the vessel, G&G was not obligated to continue
paying charter hire but only timely to notify the owner and all insurers of such loss. Id.
Thus, while G&G certainly had possession and control of the vessel, its responsibility
for repair and maintenance was minimal at best. “Hull” and “Protection and Indemnity”
insurance, which were carried by the vessel owner, cover collision-related losses flowing
from damage to the vessel or other fixed and floating objects, as well as losses stemming
from injury to crew members or others on board. Comprehensive General Liability insurance
such as that carried by G&G, by contrast, provides only generalized protection from liability
relating to an entity’s business operations. The nature of these insurance policies alone
indicates that the owner of the MARMAC 400, not G&G, retained primary responsibility for
maintaining the overall integrity of the vessel.
4
Although G&G was required to (1) pay a deductible on those claims for which it did
not provide insurance, (2) “maintain the [MARMAC 400] in a good and seaworthy condition
during the term of the charter, . . . fair wear and tear excepted,” id., (3) bear any costs
incurred by the owner in restoring the vessel to such condition, and (4) cover any expenses
incident to its particular use of the MARMAC 400, these standard charter obligations are
insufficient to demonstrate the requisite proprietary interest in the vessel. See Texas E.
Transmission Corp. v. McMoRan Offshore Exploration Co., 877 F.2d 1214, 1225 (5th Cir.
1989) (concluding that oil company lacked proprietary interest in damaged pipeline where
it conducted “routine maintenance, consisting of the painting, cleaning, and inspecting of
[appurtenances to the pipeline],” but was not responsible for performing repairs on pipeline
when damaged); compare McLean Contracting Co. v. Waterman S.S. Corp., 131 F. Supp.
2d 817, 820-21 (E.D. Va. 2001) (concluding that where demise charterer had “charge and
care” of trestle and was obligated to make any repairs to trestle until state gave final approval
of project, it had proprietary interest in trestle rendering application of Robins Dry Dock rule
improper); In re Moran Enters. Corp., 77 F. Supp. 2d 334, 341 (E.D.N.Y. 1999) (finding
triable issue of fact as to plaintiff’s proprietary interest in cable damaged by vessel where
plaintiff and third party jointly contracted and paid for construction and installation of cable,
maintained single insurance policy, and shared cost of environmental harm from or damage
to cable, regardless of location of harm or damage).
5
2. Loss-Shifting Exception
Equally unpersuasive is G&G’s contention that, even if it lacks a proprietary interest
in the MARMAC 400, dismissal of its claims was improper because the charter agreement
shifted the risk of loss from the vessel owner to G&G. Even the courts that recognize a loss-
shifting exception to the Robins Dry Dock rule would not do so in this case. G&G relies
upon Amoco Transportation Co. v. S/S MASON LYKES, 768 F.2d 659 (5th Cir. 1985),
Venore Transport Co. v. M/V STRUMA, 583 F.2d 708 (4th Cir. 1978), and Nexen Petroleum
U.S.A., Inc. v. Sea Mar Division of Pool Well Services Co., 497 F. Supp. 2d 787 (E.D. La.
2007). The Fifth Circuit has recently limited its holding in Amoco, expressly restricting any
exceptions to Robins Dry Dock to cases where two vessels collide and the action is by the
charterer of one vessel against the other, negligent vessel. See Norwegian Bulk Transp. A/S
v. Int’l Marine Terminals P’ship, 520 F.3d 409, 412-13 (5th Cir. 2008) (“In the collision
context, . . . the vessel owner and the cargo owners were engaged in a common venture, in
which they shared the risks of the voyage, and thus the cargo owners could recover economic
losses.”). And although the Fourth Circuit has not made the limits of its loss-shifting
exception so explicit, it did, in announcing the exception, find it necessary to distinguish
Robins Dry Dock by pointing out that “Robins Dry Dock was not a case arising out of a
collision.” Venore Transp. Co. v. M/V STRUMA, 583 F.2d at 709.
As the present case involves an allision, not a collision, we find no basis for
recognizing a loss-shifting exception here. This remains a conventional case for application
6
of the Robins Dry Dock rule, and it is indistinguishable from cases in which circuits that
recognize loss-shifting have continued to apply the usual rule. See, e.g., Norwegian Bulk
Transp. A/S v. Int’l Marine Terminals P’ship, 520 F.3d at 410-11, 414 (declining to award
cost of extra charter hire to charterer where vessel was damaged while in defendant’s dry
dock and was consequently returned late to its owner, incurring approximately 15 extra hours
of charter hire). Absent any indication that the charter agreement contractually shifted to
G&G the risk of any losses, the district court properly concluded that G&G’s claims are
barred by the Robins Dry Dock rule.
3. Conclusion
We have considered G&G’s remaining arguments on appeal and conclude that they
are without merit. For the foregoing reasons, the October 28, 2009 judgment of the district
court is AFFIRMED.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
7
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71 F.Supp.2d 592 (1999)
Frank GREER, Plaintiff,
v.
BUNGE CORPORATION, Defendant.
No. 3:97-cv-558WS.
United States District Court, S.D. Mississippi, Southern Division.
May 4, 1999.
*593 Shane F. Langston, Langston, Frazer, Sweet & Freese, Jackson, MS, Bobby Ray Long, Brenda Carol Greer Cameron, Mississippi State Tax Commission, Jackson, MS, for Frank E. Greer, plaintiff.
Frank S. Thackston, Jr., Lake Tindall, LLP, Greenville, MS, for Bunge Corporation, defendant.
ORDER
WINGATE, District Judge.
Before the court is defendant's motion to exclude the expected expert testimony of plaintiffs witness, Dr. R.L. Rollins, Jr., a veterinarian who is prepared to opine on the causal relationship between the presence of aflatoxin in corn feed allegedly sold by defendant to plaintiff and the death, illness, infertility and milk-producing inability of plaintiffs dairy cattle. Defendant argues that Rollins' proposed testimony fails to meet the standards promulgated by the United States Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and its progeny. Plaintiff opposes the motion; however, for the reasons which follow, this court is persuaded to grant the motion.
In Daubert, the United States Supreme Court set out the criteria district courts are to follow in assessing challenged expert testimony offered under Federal Rules of Evidence 702. The Court stated that:
Proposed testimony must be supported by appropriate validation i.e., "good grounds," based on what is known ... [T]he requirement that an expert's testimony pertained to "scientific knowledge" establishes a standard of evidentiary reliability. (footnote omitted) Daubert, 509 U.S. at 590, 113 S.Ct. at 2795.
Accordingly, the United States Supreme Court then held that a trial court has a duty to screen expert testimony for both its relevance and reliability. Id. An expert's opinion must have a "reliable basis in the knowledge and experience of his discipline." Id. at 592, 113 S.Ct. at 2796. Specifically, the Court must determine that the reasoning and methodology underlying the testimony is scientifically valid and that the reasoning and methodology can properly be applied to the facts in issue. Id. at 592-93, 113 S.Ct. at 2796. Thus, said the Court, under Rule 703, an expert must base his opinion on facts and data of a type reasonably relied on by experts in the field. Id. at 595, 113 S.Ct. at 2789-98.
So, "whether an expert's testimony is based on `scientific technical or other specialized knowledge,' Daubert and Rule 702 demand that the district court evaluate the methods, analysis, and principles relied upon in reaching the opinion. The court should ensure that the opinion comports with applicable professional standards outside the courtroom and that it `will have a reliable basis in the knowledge and experience of [the] discipline.' 509 U.S. at 592, 113 S.Ct. at 2796." Watkins v. Telsmith, Inc., 121 F.3d 984, 991 (5th Cir.1997).
Daubert also instructs the trial court on the procedural mechanics for resolving disputes *594 relative to the expert's competence to testify under the standards enunciated by Daubert. Daubert directs that the district court determine admissibility under Rule 702 by following the directions provided in Rule 104(a). Federal Rule of Evidence 104(a) provides that preliminary questions concerning the qualifications of a person to be a witness, the existence of a privilege, or the admissibility of evidence shall be determined by the court, subject to the provisions of subdivision (b). So, Rule 104(a) requires the trial judge to conduct a preliminary fact-finding and to make a "preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue." Daubert, 509 U.S. at 592-93, 113 S.Ct. at 2796.
The party sponsoring the expert testimony has the burden of showing that the expert's findings and conclusions are based on the scientific method and, therefore, are reliable. "This requires some objective, independent validation of the expert's methodology. The expert's assurances that he has utilized generally accepted scientific methodology is insufficient." Moore v. Ashland Chemical, Inc., 151 F.3d 269, 276 (5th Cir.1998). "The proponent need not prove to the judge that the expert's opinion is correct, but [he] must prove by a preponderance of the evidence that the testimony is reliable." Id.
In seeking to perform its role as the juridical gatekeeper as envisioned by Daubert, this court conducted a preliminary fact-finding session during which the court heard the testimony of Dr. Rollins outside the presence of the jury. Dr. Rollins is a Doctor of Veterinary Medicine. The defendant does not question his expertise as a veterinarian; instead, the defendant questions Dr. Rollins' methodology in arriving at his ultimate conclusion that plaintiff's dairy cattle were infected by aflatoxin poison.
Aflatoxins represent a unique group of potentially dangerous poisons that are produced by the widespread occurrence of Aspergillus molds. These poisons belong to a large family consisting of structurally diverse by-products of mold-growth known as mycotoxins. Not all molds produce mycotoxins and of those that do, many do not produce mycotoxins under all conditions. Four aflatoxins commonly occur in grains, including corn, namely, aflatoxins B-1, B-2, G-1, and G-2, but these four aflatoxins do not possess the same toxic potency to animals. Supposedly, aflatoxins B-1 and G-1 are more potent than B-2 and G-2. Molds can form and grow in corn at any stage from pre-harvest to the time the corn is consumed. Odor in corn may or may not be an indication of mold growth since the presence of odor in a quantity of corn is not a scientifically valid indication. Similarly, a "black light" examination of a sample of corn for sparkling luminescence may or may not confirm the presence of aflatoxin since a black light examination can result in both false positive and false negative detection of aflatoxin. The scientifically accepted method for determining whether a particular quantity of corn does or does not contain aflatoxin and, if so, the level of concentration that is present in such corn, is to procure and chemically analyze a representative sample of such corn or, alternatively, procure and chemically analyze a representative sample of the milk excreted by cows that consume such corn.
So, the parties all agree that aflatoxin poisoning, aflatoxicosis, may be detected by appropriate tests upon either the blood, urine, tissue or milk of dairy cattle. The parties also agree that the presence of aflatoxin in corn feed initially may be indicated by a black light (fluorescent) test and confirmed by specific lab tests. The parties also agree that the United States Food and Drug Administration regulates what quantity of B-1 aflatoxin may be present in milk, an action level of 0.5 ppb, and what quantity of aflatoxin may be present in dairy cattle feed, 20 ppb. Apparently, *595 the United States Food and Drug Administration distinguishes among the various aflatoxins and regulates only the B-1 variety. The parties further agree that aflatoxins can harm dairy cattle; however, the parties disagree on how concentrated the exposure need be and how long the duration of exposure need be.
Dr. Rollins is prepared to tell the jury that in his opinion plaintiff's troubles with his dairy cattle herd were caused by aflatoxicosis. Plaintiff claims that after he fed his herd feed corn purchased by him from defendant Bunge Corporation that his cattle became ill, many died, many failed to conceive, many lost their offspring and plaintiffs milk production decreased significantly. Plaintiff agrees that he last purchased Bunge corn on July 12, 1994, and last fed Bunge corn to his dairy cattle on August 8, 1994.
According to Dr. Rollins, he based his opinion upon his experience as a veterinarian and upon certain laboratory reports, namely, an August 26, 1994, report from the Mississippi State Chemical Laboratory indicating the presence of aflatoxin in a milk sample submitted by plaintiff on August 23, 1994; an autopsy report of December, 1994, performed on two of plaintiff's dairy cattle; and the October 26, 1994, report from Romer Labs, Inc.
This court is not persuaded that Rollins' methodology in reaching his conclusion passes the Daubert test. Dr. Rollins testified that after observing the cattle on more than one occasion, he noted that their symptoms indicated aflatoxicosis. Dr. Rollins acknowledges that he did not order any blood tests, urine tests or tissue tests. Further, he acknowledges that the symptoms he observed are common to other cattle illnesses. While he says he relied upon the autopsy report of two slain cattle for that purpose, he admits that the autopsy reports failed to show that the cattle suffered from pneumonia and failed to show that the cattle suffered from aflatoxicosis. Then, there is the August 26 report from the Mississippi State Chemical Laboratory showing .09 m-1 ppb aflatoxin present in a milk sample. Dr. Rollins is unable to make a connection between this slight level of aflatoxin in the milk sample (an amount not proscribed by the United States Food and Drug Administration) and the amount of aflatoxin that was in the feed fed to the cow producing this milk. Further, Dr. Rollins is unable to state within the realms of scientifically accepted data what concentration of aflatoxin in corn feed fed to dairy cattle over what period of time would cause the harm to dairy cattle about which plaintiff complains. Dr. Rollins acknowledged that he did not know what measure of concentration would cause harm, only that he believes that any amount of aflatoxin would hurt. He does not clothe his naked opinion with any scientific literature. The United States Food and Drug Administration in its regulation of aflatoxin in milk proscribes any presence of aflatoxin in excess of 0.5 ppb. This prohibition governs the integrity of milk, but does not speak to that quantity which would cause dairy cattle to become ill, infertile, and die.
Dr. Rollins' reliance upon the October 26 Romer report suffers from the same infirmity. That report purports to show that the corn sample submitted contained aflatoxin. Defendant contends that the corn sample was not representative. Even so, the report contains nothing to undergird Dr. Rollins' ultimate opinion. The report shows a corn sample submitted by plaintiff to contain B-1 aflatoxin in the amount of 280 ppb and 13 ppb of aflatoxin B-2. The report also shows that 2.7 ppm fumonisin B-1 was detected. This report does not state and Rollins' testimony does not establish whether this level of aflatoxin was consumed by plaintiffs cattle or even when this level of aflatoxin occurred. As acknowledged by all parties herein, plaintiff's cows ceased to eat dairy concentrate containing Bunge corn on August 8, 1994. The Romer report of October 26, 1994, shows the concentrate level as of the date the corn was tested. Dr. Rollins is unable *596 to make a connect between this test date and the date the plaintiffs cattle last consumed Bunge corn. Moreover, Dr. Rollins' analysis thoroughly ignores testimony that plaintiffs cattle were fed a mix of grains along with the Bunge corn. Defendant and its experts maintain that a grain "mix" would affect the potency of any aflatoxins present and that this "mix" must be factored into any expert's opinion on toxicity. Dr. Rollins' testimony, structured as it is upon the assertion that any amount of aflatoxin present in corn would harm dairy cattle, simply ignores this consideration.
In challenging Dr. Rollins' methodology, the defendant has presented the live and affidavit testimony of three experts who all challenge Dr. Rollins' ability to diagnose dairy cattle as suffering from aflatoxicosis by an observation of symptoms. These experts, Dr. John C. Reagor, a toxicologist who is Head of the Department of Toxicology, Texas Veterinary Diagnostic Laboratory and Professor in the Department of Veterinary Anatomy and Public Health, College of Veterinary Medicine, Texas A & M University; Dr. Steven S. Nicholson, a veterinary toxicologist employed by the Louisiana Cooperative Extension Service and Associate Professor in the Louisiana State University School of Veterinary Medicine; and Dr. Timothy D. Phillips, a toxicologist who is Chair and Professor of Toxicology at Texas A & M University, all state that appropriate scientific methodology requires an analysis of blood, urine, or tissue. Further, these experts opine that in order to determine whether the presence of aflatoxins in milk may harm dairy cattle, one must know the concentration of the aflatoxin in feed and the duration over which the dairy cattle consumed the feed.
Daubert and its progeny establish the district courts as gatekeepers for the purpose of admitting or excluding opinion testimony. This court simply is unpersuaded that Dr. Rollins' testimony is based upon appropriate scientific methodology as commanded by Daubert. Therefore, this court hereby grants defendant's motion to exclude the testimony of Dr. R.L. Rollins, Jr.
SO ORDERED AND ADJUDGED.
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296 F.2d 252
61-2 USTC P 15,376
Thomas J. McGOWAN, Appellant,v.UNITED STATES of America, Appellee.
No. 19078.
United States Court of Appeals Fifth Circuit.
Nov. 17, 1961.
David W. Palmer, Destin, Fla., for appellant.
Harold M. Seidel, Atty., Dept. of Justice, Washington, D.C., Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, Atty., Dept. of Justice, Washington, D.C., Edward F. Boardman, U.S. Atty., Miami, Fla., John B. Jones, Jr., Acting Asst. Atty. Gen., Meyer Rothwacks, Atty., Dept. of Justice, Washington, D.C., for appellee.
Before BROWN, GEWIN and BELL, Circuit Judges.
JOHN R. BROWN, Circuit Judge.
1
This is another one of many similar cases in which operators of small watercraft through their inveterate counsel have, with varying success, waged a running, relentless, vigorous battle with the Government over the application of the transportation tax, 26 U.S.C.A. 4261.1
2
Most of the former cases have involved vessels used for fishing parties. Here the problem arises in connection with sight-seeing ships. The Taxpayer asserts, in the main, that none of the taxes paid for the years 1957-1958 was legally due for two reasons. First, the value of the transportation service actually rendered did not exceed 60cents so this was an element expressly exempt under the statute. Second, the remainder of the cost of the cruise ticket represents payment for non-transportation services which are beyond the reach of the statute. These included the scenic or cultural benefit from seeing the sights, listening to the description of the scenery by an interlocutor and absorbing the interests during the mid voyage stopping point at the Indian village where Indians wrestled with alligators. Taxpayer also urged that if he was not completely successful on these theories, then, at least, the tax should be apportioned as between transportation and non-transportation services as various regulations and rulings contemplate.2
3
The trial court rejected the Taxpayer's claim for refund. But in doing so it never reached the merits concerning either of the two main contentions or the in-between request for suitable apportionment. The Court, rather, sustained the Government's basic contention that Taxpayer did not have standing to sue. This was so because Taxpayer had not satisfied either the express requirements of 26 U.S.C.A. 6415(a)3 or the Court-made amelioration by showing that Taxpayer, not his cruise 'passengers' had borne the economic burden of the tax. Smith v. United States, 5 Cir., 1957, 242 F.2d 486; Davis v. United States, 5 Cir., 1956, 235 F.2d 174; United States v. Walker, 5 Cir., 1956, 234 F.2d 910.
4
The physical operations relate primarily to the merits of the claim, and hence no purpose is served in any extended recitation of the facts. A brief review does illumine the threshold question of standing or right to sue. For this, it suffices to paraphrase the summary set forth in the pretrial stipulation by which, without admitting their truth, the parties agreed that these facts would not be contested on the trial of the case.
5
The Taxpayer operated two boats for cruises in the Fort Lauderdale area. The boats departed from and returned to the same dock, making one stop at an Indian village where the passengers were permitted to get off. A special attraction at this point was that of Indians wrestling alligators. The usual purpose for which people rode in these boats was for sight-seeing. Taxpayer paid the Federal excise tax, the refund of which is the subject of this action, by taking 1/11th of the amount he received from the sale of tickets for these cruises.4
6
Of course the fact findings of the District Judge come here with the buckler and shield of F.R.Civ.P. 52(a), 28 U.S.C.A. But because the findings carry such weight, we must be certain that in making credibility choices-- particularly of the basic kind in which the question revolves around the selection of one of two divergent statements-- the trier of fact has evaluated them in the light of proper legal standards. Ferran v. Flemming, 5 Cir., 1961, 293 F.2d 568; Butler v. Flemming, 5 Cir., 1961, 288 F.2d 591; Mitchell v. Mitchell Truck Line, Inc., 5 Cir., 1961, 286 F.2d 721; Henderson v. Flemming, 5 Cir., 1960, 283 F.2d 882; United States v. Williamson, 5 Cir., 1958, 255 F.2d 512; Mitchell v. Raines, 5 Cir., 1956, 238 F.2d 186. In this approach we are of the view that the finding ought not to stand. In so holding we do not determine that the District Court, as a matter of law, had to conclude, one way or the other, that Taxpayer had or had not sustained the economic burden test. Similarly, this is not a forecast of what the ruling must be on the retrial on either substantially the same evidence or on different proof. That must await the retrial.
7
Both the Taxpayer and his wife, who was active in the operation of the business, testified positively that the tax had not been collected from the cruise customers. So did McConnell, the previous owner of the M/V Abeona from whom Taxpayer bought the vessel and the business. More important, this was corroborated rather impressively by communications from Taxpayer and his counsel and representatives of the District Director's office seeking administrative relief by rulings and otherwise from the impact of this tax. Many of these letters were offered in evidence and they show two things: first, a relentless, persistent, tenacious, contemporary assertion that no tax was legally due; and second, that no such tax was being collected from cruise customers.
8
While the Government now urges that the Court was entitled in the fact finding process to reject this testimony as untrue because a Revenue Agent testified to a prior inconsistent statement given by Taxpayer and his wife to the Agent during the administrative investigation of the claim for refund, it seems almost positive that the Judge did not rest it on this ground at all. As corrected by the Trial Judge's recent order, the record now shows that on rebuttal counsel for Taxpayer proferred Taxpayer and his wife to refute the Agent's prior inconsistent statement. To this the Judge stated that the record would show that it was stipulated that if recalled they would deny Agent's testimony. Since a critical fact finding on a decisive issue turned on when Taxpayer (and his wife) was telling the truth, it seems quite certain that this distinguished and experienced Trial Judge would have desired their actual testimony with the searching exposure of cross examination and not merely a lawyer's denial as though a matter of rote.5
9
The Trial Judge's fact finding was, as his memorandum opinion reflects, based rather on two factors quite independent of any such run-of-the-mill credibility choice. The first was that 'since the $2 fare charged by (Taxpayer's) predecessor included the tax, it is reasonable to assume that the same fare charged by the (Taxpayer) likewise included the tax.' The second was that Taxpayer 'by taking 1/11 of the total paid for transportation' in computing the quarterly tax payments made to the Government demonstrated as a matter of 'mathematical necessity' that 'the 10% tax must have been included in the amount charged passengers.'
10
As to the first, the issue is not whether Taxpayer's predecessor collected the tax. The question concerns the Taxpayer's conduct after he commenced his own operations. In any event, the evidence showed that as to the predecessor, printed tickets showing an established price plus a specified federal excise tax were used for only two weeks. Thereafter they were discontinued, and all such tickets destroyed. It is uncontradicted that Taxpayer never used any tickets which indicated that the transportation tax was being collected. The fact that Taxpayer charged a $2 fare when his operations were commenced hardly supports the inference that since for a time the predecessor expressly included the tax in that same amount, it is therefore 'reasonable to assume that the same fare charged by the (Taxpayer) likewise included the tax.' Certainly this would not be so in the light of the persistent contemporaneous contentions that no tax was due by anyone.
11
The second factor-- the use of the 1/11th fraction-- is similarly deficient in the light of this whole record. The Trial Judge in his arguendo assumption gave considerable currency to the suggestion running through this whole record that the use of the 1/11th fraction came from administrative suggestions made by Revenue Agents in handling the vexing problem confronting these small businessmen in making quarterly returns and payments of a tax which they then thought, and still contend, was not legally due. There was a practical problem facing both Government and boat operators alike. The Director had the absolute duty to collect the full measure of the tax. The vessel operators, on the other hand, had the right to preserve, if they could, their contention for appropriate court decision. In the meantime, whether the tax was, or was not, collected from cruise customers, the obligation was a compelling one on the vessel operator to file a quarterly return and make payment of the tax. 26 U.S.C.A. 4291. Unless payment was made, vessels, bank accounts, and other assets would be subject to attachment or seizure under distraint. Save in the rarest occasions, injunctive relief is not available in view of the prohibition of 26 U.S.C.A. 7421; and see United States v. Curd, 5 Cir., 1958, 257 F.2d 347; Enochs v. Williams Packing & Navigation Co., 5 Cir., 1961, 291 F.2d 402; Poretto v. Usry, 5 Cir., 1961, 295 F.2d 499 (No. 18645, Oct. 20, 1961). See aso Miller v. Standard Nut Margarine Co., 1932, 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422. See also 9 Mertens, Law of Federal Income Taxation 49.212.
12
In the face of these persistent contentions made by this Taxpayer-- and others in similar operations-- that no transportation tax was due for any of these activities, it is not reasonable to read into the choice of the 1/11th fraction an implication which would set at nought all that these boat operators and their vigorous counsel were undertaking to establish. And yet, in the final analysis, this was deemed by Government counsel to be decisive, if not single, factor.6 Adopting this contention, the Trial Judge likewise treated it as of dominant, decisive significance.
13
But by itself and in its relation to this record, the fraction of 1/11th proves nothing. The choice was made after the ticket was sold to the customer. It was made quarterly when some return and some tax had to be paid. Its only significance in this context is in determining whether the correct amount of tax was paid. It does not support other inferences on whether such a tax in any amount had been paid by others to Taxpayer at a previous time. That was the issue in suit.
14
The cause must therefore be reversed and remanded for a new trial on this and the other issues presented and for such other and further proceedings as are consistent7 with this opinion. We take pains to reiterate that nothing said or unsaid, expressed or implied, is an expression or an intimation, one way or the other, how the issue on such retrial should or must be resolved. That awaits the trial.
15
Reversed and remanded.
1
Knowles v. United States, 5 Cir., 1958, 260 F.2d 852; Davis v. United States, 5 Cir., 1957, 244 F.2d 308; Smith v. United States, 5 Cir., 1957, 242 F.2d 486; United States v. Knowles, 5 Cir., 1956, 235 F.2d 177; Davis v. United States, 5 Cir., 1956, 235 F.2d 174; United States v. Walker, 5 Cir., 1956, 234 F.2d 910; United States v. Walls, 5 Cir., 1956, 231 F.2d 440; Knowles v. United States, D.C.N.D.Fla., 1957, 157 F.Supp. 678; Brunson v. United States, D.C.N.D.Fla., 1957, 155 F.Supp. 748; Smith v. United States, D.C.N.D., Fla., 1957, 155 F.Supp. 743; Knowles v. United States, D.C.N.D.Fla., 1957, 155 F.Supp. 678; Walls v. United States, D.C.N.D.Fla., 1955, 144 F.Supp. 440; Walls v. United States, D.C.N.D.Fla., 1955, 137 F.Supp. 518; Gibson v. United States, D.C.N.D.Fla., 1955, 137 F.Supp. 296; Smith v. United States, D.C.N.D.Fla., 1953, 110 F.Supp. 892; Abbott v. United States, Ct.Cl., 1959, 175 F.Supp. 917 (Advisory opinion pursuant to H.R.Res. 323, 85th Cong., 1st Sess. (1957))
2
Taxpayer points to the following regulations and others: 26 C.F.R. 49.4261-2(d), 49.4261-3(c)(2), 49.4261-7(d), 49.4261-8 and 8(f)(4), and 49.4263(a)-2(a). Rev.Rul. 58-60, Rev.Rul. 55-565, and the recent ones Rev.Rul. 61-172 and Rev.Rul. 61-10, I.R.B. 1961-39, 10
3
26 U.S.C.A. 6415(a). 'Allowance of credits or refunds.-- Credit or refund of any overpayment of tax imposed by section * * * 4261 * * * may be allowed to the person who collected the tax and paid it to the Secretary * * * if such person establishes, under such regulations as the Secretary * * * may prescribe, that he has repaid the amount of such tax to the person from whom he collected it, or obtains the consent of such person to the allowance of such credit or refund. * * *'
4
The stipulation stated that 'The following facts, though not admitted, are not to be contested at the trial by evidence to the contrary: The nature of plaintiff's business operation during the period in question was as follows: Plaintiff operated two boats, the Abeona and Cocoon. These boats each had seating capacities in excess of fifty persons. Plaintiff usually operated these boats on daily cruises along the rivers and canals surrounding the Fort Lauderdale area. One stop was made along the way at an Indian village where the passengers were permitted to get off the boat and look around. The cruise was concluded when the boat had completed its cruise around the Fort Lauderdale area and returned to the dock where it had initially commenced. Plaintiff advertised these cruises through various media to the tourists and people in the area. The usual purpose for which people purchased tickets on plaintiff's tours was for the purpose of sightseeing. When plaintiff commenced his operations in April 1957, he charged as his usual price for the tickets $2.00 for adults and $1.00 for children. Sometime near the end of the period in question, plaintiff increased the price of his tours to $2.50 for adults and $1.25 for children passengers. Plaintiff paid the Federal excise tax, the refund of which is sought herein, by taking 1/11th of the amount he received from the sale of tickets as above described, paying this amount as the tax. Plaintiff also operated charter tours but he did not pay any tax on the amounts charged for such charter tours.'
5
In addition to this, the Agent's prior inconsistent statement, though not objected to, came in with no predicate laid. See, 3 Wigmore, Evidence 1025-29 (1940); McCormick, Evidence 37 (1954). And, as related by the Agent from the stand, it was couched in the most obvious conclusions which the Taxpayer and wife would hardly have employed, e.g., '* * * and we asked them about the Federal excise tax and they both stated that they felt that it was included in the total price that they charged * * *.'
6
In the colloquy with the Court over the relevance of testimony on whether the Taxpayer included the tax as such in the amount charged his customers, Government counsel stated:
'Now, with respect to that fatual issue (Taxpayer) has contended in his deposition that he did not. Now, the Government contends that he did. And the sole reason that we contend he did is the way he computed the tax. That is, he took one-eleventh of the amount charged rather than taking ten per cent of the amount charged, which the tax would have been had he not included it.'
7
Taxpayer contends that there has been a denial of a right to jury trial under 28 U.S.C.A. 2402; see 1954 U.S.Code and Congressional Administrative News, Conference Report, pages 2720-2721. The complaint was filed November 7, 1960, with the Government's answer filed January 6, 1961. Not until after denial of many motions for summary judgment, discovery, and the like did Taxpayer move on the eve of trial for a jury trial. This was not timely under F.R.Civ.P. rule 38 The Court on remand does, however, have the right to allow a jury trial in its discretion. See Jackson v. King, 5 Cir., 1955, 223 F.2d 714, 719. See also 2 Barron & Holtzoff, Federal Practice and Procedure 879 (1960 Wright Supp.)
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152 N.J. 382 (1998)
705 A.2d 741
IN THE MATTER OF ARTHUR D. BROMBERG, AN ATTORNEY AT LAW.
The Supreme Court of New Jersey.
February 4, 1998.
*383 ORDER
The Disciplinary Review Board on December 23, 1997, having filed its decision with the Court concluding that ARTHUR D. BROMBERG of SADDLE BROOK, who was admitted to the bar of this State in 1979, should be reprimanded for violating RPC 1.15(b) (failure to safeguard funds of a third party) and RPC 8.4(c) (conduct involving deceit, dishonesty, misrepresentation and fraud), and good cause appearing;
It is ORDERED that ARTHUR D. BROMBERG is hereby reprimanded; and it is further
ORDERED that the entire record of this matter be made a permanent part of respondent's file as an attorney at law of this State; and it is further
ORDERED that respondent reimburse the Disciplinary Oversight Committee for appropriate administrative costs incurred in the prosecution of this matter.
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170 Kan. 346 (1951)
226 P.2d 251
THE STATE OF KANSAS, Appellee,
v.
SYLVESTER E. RAGLAND, Appellant.
No. 38,072
Supreme Court of Kansas.
Opinion filed January 6, 1951.
Geo. K. Melvin, of Lawrence, argued the cause, and A.B. Mitchell, also of Lawrence, was with him on the briefs for the appellant.
Robert B. Oyler, county attorney, argued the cause, and Harold R. Fatzer, attorney general, C. Harold Hughes, assistant attorney general, and Milton P. Allen, assistant county attorney, were with him on the briefs for the appellee.
The opinion of the court was delivered by
KAGEY, J.:
This is an appeal by defendant from a conviction upon an information charging burglary and larceny.
The facts may be stated as follows: Complainant Leta Ingalls testified that she and her husband Harry Ingalls ran a restaurant and beer tavern in Lawrence, Kansas, known as Duck's Sea Food Tavern. The Ingalls had been separated and living apart for one or two years prior to November 22, 1949; Mrs. Ingalls lived at 913 Connecticut street and did not know where her husband was staying, although they were operating the restaurant business daily as equal partners. About midnight November 22, 1949, one of the help at the tavern took Mrs. Ingalls from the tavern to her home at 913 Connecticut Street where she had been living in a two-story, seven-room house alone; formerly she had two roomers, but no one had lived with her within six months preceding this date; on arriving home she went directly to her upstairs bedroom, placed her pocketbook under the bed, and retired for the night; after falling asleep, she was awakened sometime during the night thinking she heard a creak in the floor, but did not turn on the light and again fell asleep; the next morning she awoke, went to *347 the downstairs bathroom and found her purse on the clothes hamper there; went upstairs to check her money and found that it had been stolen; she immediately called the police and when they arrived, advised them that $4,000 had been taken from her; she thought the information later filed by the county attorney was correct; she went down to the police station with her husband and heard him report to police that the loss was $400; she had told them it was $4,000, but after she checked she "found out"; she made a claim for repayment on a burglary insurance policy for $250, which was all the insurance she had. She further testified that she had $2,200 in currency in one billfold in her purse, consisting of one fifty dollar bill and the rest in crisp, rather new, twenty-dollar bills, all of which was her own personal money; she also had $1,200 in currency in her purse consisting of tens, fives and one-dollar bills (the number of each denomination not mentioned) and also $60 to $100 in silver, all of which belonged to the business or partnership, which she handled as cashier; that she had been accumulating the $2,200 over a period of ten years, had been carrying it around in her pocketbook off and on during that time, and had been so carrying it for more than a year last past; that she had intended to buy bonds; that she had a personal bank account, and there was no particular reason for carrying the money around in her purse; she did not think her husband had a bank account.
Police officers testified that when they went to the home of Mrs. Ingalls on the morning of November 22, 1949, they found the night lock on the front door had been jimmied and the door pried from its hinges and that it would not stay closed; they found an "El Roi Tan" cigar band on the living room floor four or five feet from the front door; the officers further testified that on November 26, 1949, they saw defendant at a used car lot in Lawrence and later arrested him in the east part of the city while driving with his family in a 1933 Chevrolet automobile; they took defendant to the police station and made a search of defendant's car finding, among other things, children's clothing, a revolver, an automatic pistol, and under the dash of the automobile on top of the radio they found a money bag containing about $1,200 in currency and silver consisting of one $50 bill and 59 twenty-dollar bills; that defendant stated he had won $4,000 gambling from Fred Holloway; a search of the purse of defendant's wife at the police station revealed 22 ten-dollar bills, 10 twenty-dollar bills, and 45 five-dollar bills.
*348 Mr. Barncord, a used car dealer, testified that about six weeks prior to November 22, 1949, the defendant purchased a 1933 Chevrolet from him for $85 with a down payment of $35, leaving a balance due of $50; that defendant failed to make his weekly payments; that on November 26, 1949, defendant talked to Mr. Barncord about buying a 1948 Buick; defendant gave Mr. Barncord $650 in five, ten and twenty-dollar bills; the Buick was priced at $1,850, but defendant could not get the balance financed and the deal was terminated and the money returned. Barncord did prevail upon the defendant to pay the balance due on the Chevrolet by compromising for $40.
A used car dealer from Emporia, Kansas, testified that he sold defendant a 1942 Buick about fifteen or eighteen months before November 22, 1949, for $1,450, and took a chattel mortgage on the car; that during the fall of 1949 he had seen defendant four or five times about the defaulted payments and that the balance due was $272.65; defendant's brother gave a check for the balance which was never honored by the bank; that he finally received the balance due from a used car dealer in Topeka, Kansas, shortly before November 22, 1949.
Fred Holloway, owner and operator of a pool hall in Lawrence, testified that he had known defendant about three years; had played cards with defendant two or three times a week and had lost $400 or $500 to defendant on different occasions but that he had not lost any money to him within three or four months prior to November 22; that defendant smoked several kinds of cigars including Roi Tans.
At the conclusion of the state's evidence, defendant interposed a demurrer on the ground that the state failed to produce any evidence on which the jury could base a verdict of guilty, and also moved the court to discharge defendant for the same reason. Both the demurrer and the motion to discharge were by the court overruled.
The only evidence offered by the defendant was the testimony of a Mr. Parker who stated that on August 17, 1949, defendant made a deposit of $100 on a new Buick automobile; that prior to October 28, 1949, defendant talked to him about delivery on an automobile; that he tried to take a credit statement from defendant and learned defendant had no job of any kind and that he could not finance the automobile; that defendant threw some money in a *349 clip on the desk, but he had no idea how much it was; that he refunded the $100 deposit to defendant.
At the close of defendant's evidence, he moved for a directed verdict of not guilty, which motion was by the court overruled.
Defendant brings the case here and assigns as error among other specifications, the court's ruling on his demurrer and motion for discharge at the close of the state's case. Defendant predicates his argument on the fact that there was no direct evidence against the defendant; that the entire case of the state was based on circumstantial evidence; and the circumstances were not sufficient to support the verdict.
At the outset it is agreed by both the state and the defendant that the evidence upon which the conviction was had is entirely circumstantial. The universal rule with reference to conviction on circumstantial evidence is that the circumstances must be so strong that they exclude every reasonable hypothesis except that of the guilt of the defendant. (State v. Robinson, 158 Kan. 287, 147 P.2d 374; State v. Sweizewski, 73 Kan. 733, 85 Pac. 800; State v. Brizendine, 114 Kan. 699, 220 Pac. 174.) This court recognizes the rule laid down in State v. Murphy, 145 Kan. 242, 65 P.2d 342; Syll. ¶ 4 of which is as follows:
"When considering on appeal the sufficiency of circumstantial evidence to sustain conviction of crime, the question before this court is not whether the evidence is incompatible with any reasonable hypothesis except guilt. That was a question for the jury and the trial court, and the function of this court is limited to ascertaining whether there was basis in the evidence for a reasonable inference of guilt, following State v. Brizendine, 114 Kan. 699, 220 Pac. 174."
It follows from the above that it devolves upon this court to determine from the evidence whether there was any basis in the evidence for a reasonable inference of guilt. In connection with this statement, we are compelled to the belief that there was no evidence upon which an inference of guilt could be based. In support thereof, we notice briefly certain pertinent parts of the evidence presented by counsel for both parties in this court.
To begin with, it is interesting to note that the information filed charged the defendant with breaking and entering in the night-time the dwelling of the complaining witness, Leta Ingalls, at 913 Connecticut street in Lawrence, Douglas county, Kansas, and with stealing, taking and carrying away therefrom the sum of $3,387 in money. No charge was made that the defendant took bills or *350 currency of any particular denomination. Testimony of the complaining witness in connection with this charge was that she told the police after the alleged entering and stealing occurred on November 22, 1949, that $4,000, mostly in bills, had been stolen. The testimony fails to show that any statement was made at that time about the denomination of the bills. There is some doubt after an examination of the evidence that as much as $3,387 had ever been stolen from her. From the counter abstract furnished by the state, she testified on cross examination as follows:
"Q. Were you there when your husband reported to the police that the loss was $400.00?
"A. No, not at the house.
"Q. Were you down at the station when he so reported that?
"A. Yes.
"Q. You heard him tell them it was $400.00?
"A. Yes.
"Q. You had told them it was $4000.00?
"A. At first but after I checked I found out. We had other money, too."
The purport of the above testimony is of no immediate concern, however, because as we read the record, there was no identification of the money taken from the defendant as being the stolen money, the only testimony in reference thereto by the complaining witness, as gleaned from the counter abstract, being as follows:
"Q. Would you examine Exhibits 4 and 6, Mrs. Ingalls, and tell us if these twenties are new?
"A. Just about like I had. I wouldn't say they are brand new, but they are crisp twenties, all of them."
In view of the above testimony, it is doubtful that there could be any inference of guilt by reason of identity of the money.
Defendant's wife Dolly worked for the complaining witness at Duck's Sea Food Tavern and was in the home of the complaining witness once (she thinks) about one and one-half years prior to November 22, 1949, to buy some second hand clothes, and from this fact it is inferred that defendant might have known his way around in the house; further that defendant might have known that the complaining witness carried a large sum of money in her pocketbook, although the testimony fails to disclose how defendant's wife could have known about it. The testimony merely showed that Mrs. Ragland worked in the tavern and had been in the home a year and a half before and that is all; purely an inference on an inference.
*351 In connection with the amount of money allegedly purloined by the defendant, the state attempts to attach great significance to the fact that defendant stated when he was arrested that he had won about $4,000. We fail to see how an inference could be drawn from this statement that defendant had stolen the money of the complaining witness when she herself had made no claim that money in the amount of $4,000 was stolen from her.
Significance is attached to the money clips and money bag found in defendant's car. No claim is made that any of the money allegedly lost by the complaining witness was affixed with money clips, nor that complaining witness had her funds in a money bag like the one found in defendant's car.
The state attempts to infer that the defendant was in flight when apprehended by the officers by reason of the fact that when defendant was in the used car lot, Barncord, the owner, saw the police watching defendant and therefore defendant could have seen the police watching him, although there is no evidence any place in the record that defendant did see the police watching him. This was on November 26, four days after the alleged robbery; and certainly no inference, in the absence of direct testimony, could be drawn that defendant was in flight when the police arrested him.
An inference is attempted to be drawn that because an El Roi Tan cigar band was found in the house of complaining witness after the alleged robbery; further, because friends of the defendant brought him cigars at the jail after he was arrested among which were El Roi Tans; and because Holloway, the person from whom defendant had won four or five hundred dollars on occasions, had seen the defendant smoke El Roi Tans; therefore the El Roi Tan cigar band found in the burglarized premises must have been left there by the defendant. This is another illustration of basing an inference on an inference. In the case of McKenzie v. New York Life Ins. Co., 153 Kan. 439, 112 P.2d 86, this court said:
"Presumptions or inferences based upon presumptions or inferences are insufficient to meet a burden of proof resting upon a pleader." (Syl. ¶ 2.)
See, also, Schmidt v. Twin City State Bank, 151 Kan. 667, 100 P.2d 652; 31 C.J.S., Evidence, § 116b and cases cited in note 10. While the cited cases are civil cases, the rule is the same as to criminal cases, particularly in view of the fact that the burden of proof in a criminal case is greater.
Counsel for the state assert that there are other circumstances *352 from which inferences of commission of the crime charged may be drawn, but from our examination of the record, they do not dignify a discussion.
Some reference is made in the record and in the argument about a petition for a writ of habeas corpus filed by the defendant and Dolly Ragland, his wife, upon the evidence as disclosed in the record now before this court; and that Dolly Ragland was discharged upon the petition. That case was apparently another case in which no appeal was taken from the court's decision, and is therefore not before us.
The judgment is reversed with directions to discharge the defendant.
HARVEY, C.J., dissents.
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Court of Appeals
of the State of Georgia
ATLANTA,____________________
June 15, 2017
The Court of Appeals hereby passes the following order:
A17A1701. IN THE INTEREST OF J. C., A CHILD (FATHER).
Michael Lingerfelt filed a petition to legitimate, which the trial court dismissed
on October 27, 2016. The child’s permanent guardian subsequently moved for
attorneys’ fees pursuant to OCGA § 9-15-14 (b), and the trial court granted her
motion on March 24, 2017. On April 3, 2017, Lingerfelt filed a notice of appeal as
to both orders.
A notice of appeal must be filed within 30 days after the entry of the trial
court’s order. OCGA § 5-6-38 (a). The proper and timely filing of a notice of appeal
is an absolute requirement to confer jurisdiction upon this Court. Couch v. United
Paperworkers Intl. Union, 224 Ga. App. 721 (482 SE2d 704) (1997). Here,
Lingerfelt’s notice of appeal was filed 158 days after entry of the order dismissing his
petition to legitimate. His notice of appeal is timely as to the order awarding OCGA
§ 9-15-14 fees, but such an order must be appealed by discretionary application
unless it is challenged in conjunction with a timely appeal from a judgment that is
directly appealable. See OCGA § 5-6-35 (a) (10); Cheeley-Towns v. Rapid Group,
212 Ga. App. 183 (2) (441 SE2d 452) (1994).
Under the circumstances, we lack jurisdiction to consider this appeal, which
is hereby DISMISSED.
Court of Appeals of the State of Georgia
Clerk’s Office, Atlanta,____________________
06/15/2017
I certify that the above is a true extract from
the minutes of the Court of Appeals of Georgia.
Witness my signature and the seal of said court
hereto affixed the day and year last above written.
, Clerk.
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287 U.S. 404 (1932)
DALTON ET AL.
v.
BOWERS, EXECUTOR.
No. 52.
Supreme Court of United States.
Argued November 14, 1932.
Decided December 12, 1932.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT.
*405 Mr. Arnold Lichtig for petitioners.
Assistant Attorney General Youngquist, with whom Solicitor General Thacher, and Messrs. Whitney North Seymour, Sewall Key, and John H. McEvers were on the brief, for respondent.
Mr. JUSTICE McREYNOLDS delivered the opinion of the Court.
For twenty-five years petitioner Dalton has busied himself with physical research and invention; he has devised and patented hundreds of articles. A large income from sundry sources has enabled him to lay out considerable sums in connection with his inventions; the inventions *406 brought in no net profit after 1914. During the five years following 1912 he caused the organization of six separate corporations and transferred to each certain patents for exploitation. The last of these the Dalton Manufacturing Corporation was incorporated under the laws of New York in 1917; he paid for all the capital stock $395,000.00; became a director, president, treasurer and controlled its affairs. No other person was financially interested. He testified that his primary purpose in this venture was to perfect his sundry models and patented articles and sell the corporate shares profitably; he thought it would be better to market such articles through the corporation, to have the business in corporate form; he considered the corporation as a branch or part of his own business as an inventor and dealer in patents, etc. as a means to an end, an instrumentality of his purpose. Also, that he believed it essential thus to have his inventions manufactured and brought before the public; the corporations were used in order to develop and improve his inventions.
The Manufacturing Corporation promptly took over certain Dalton patents, manufactured the articles and sought to sell them. The petitioner endeavored to sell the corporate shares and thereby to obtain gain. From time to time he advanced large sums to pay debts and carry on the corporate business. These loans appeared on the books, but were not repaid. For six years credits were placed to his salary account; he withdrew nothing. In 1924 the Corporation became hopelessly insolvent and during 1925 passed out of existence. The evidence indicates losses during several preceding years. All creditors were paid by petitioner.
The Corporation and Dalton made separate returns for federal income taxes. In 1923 and 1924 he claimed large deductions $157,035.50 and $162,309.24 on account of bad debts due from it.
*407 In their joint income return for 1925 Dalton and his wife claimed a deduction of $395,000 the full amount paid for the then worthless shares of the Manufacturing Corporation. The Commissioner ruled that this loss occurred in 1924. Adjustments for that year showed $374,000.00 net loss by the Daltons. The Commissioner refused to apply this upon their 1925 return because not attributable to the operation of a trade or business regularly carried on by the taxpayer. If so applied, there would have been no taxable income for that year. Payment of $56,841.32 was demanded and made under protest. This suit to recover followed.
Petitioners maintain that the $395,000.00 loss, adjudged by the Commissioner to have occurred in 1924, was sustained in a trade or business regularly carried on by Mr. Dalton; consequently, the net loss for that year $374,078.98 should have been deducted from the 1925 income under terms of the Revenue Act of 1924, § 206 (a) and (b), and Treasury Regulations 65, Article 1621. The District Court accepted their view; the Circuit Court of Appeals held otherwise. 56 F. (2d) 16.
The latter court said [p. 18]
"There is no justification for saying that the business of the corporation was that of the appellee. During the period the appellee dealt with the corporation as an entity. When he paid the debts of the corporation, he drew on his personal account in favor of the corporation's account and this made the corporation his debtor. Separate tax returns were filed by the corporation and by the appellee. He purchased the capital stock with the intention of disposing of it to the public. His individual time was spent in large part in matters of invention. . . . The loss now sought to be deducted was an investment which he made in the corporation and did not occur in the operation of the trade or business regularly carried on by the appellee. . . .
*408 "By the statute, allowing the deductions and carrying over the loss for two years, Congress intended to give relief to persons engaged in an established business for losses incurred during a year of depression in order to equalize taxation in the two succeeding and more profitable years. It was not intended to apply to occasional or isolated losses. . . .
"This taxpayer did not regard the business losses of the Dalton Manufacturing Company as his loss. The loss sustained by the appellee which he seeks to charge off is a capital investment loss. The rule is well settled that the corporation will be looked upon as a legal entity. . . ."
We agree with the conclusion of the Circuit Court of Appeals and its judgment must be affirmed.
The Revenue Act of 1924, c. 234, 43 Stat. 253, 260, (U.S.C., Title 26, § 937), provides
"Sec. 206. (a) As used in this section the term `net loss' means the excess of the deductions allowed by section 214 or 234 over the gross income, with the following exceptions and limitations:
"(1) Deductions otherwise allowed by law not attributable to the operation of a trade or business regularly carried on by the taxpayer shall be allowed only to the extent of the amount of the gross income not derived from such trade or business;
"(2) In the case of a taxpayer other than a corporation, deductions for capital losses otherwise allowed by law shall be allowed only to the extent of the capital gains; . . .
"(b) If, for any taxable year, it appears upon the production of evidence satisfactory to the Commissioner that any taxpayer has sustained a net loss, the amount thereof shall be allowed as a deduction in computing the net income of the taxpayer for the succeeding taxable year (hereinafter in this section called `second year'), and if such net loss is in excess of such net income (computed *409 without such deduction), the amount of such excess shall be allowed as a deduction in computing the net income for the next succeeding taxable year (hereinafter in this section called `third year'); the deduction in all cases to be made under regulations prescribed by the Commissioner with the approval of the Secretary."
In the courts below the petitioners unsuccessfully insisted that the loss upon sale of the corporate shares occurred in 1925 and should be offset against gains received during that year. Here that insistence is not renewed.
The claim of right to offset the net loss of 1924 against 1925 gains cannot prevail unless the requirements of the quoted section, Revenue Act of 1924, are met the loss must have been "attributable to the operation of a trade or business regularly carried on by the taxpayer."
In support of their position petitioners say
The losses of the Manufacturing Corporation were not the losses of the taxpayers. They do not seek to disregard the corporate entity, but respect it. Taken as a whole this entity constituted a part of the individual trade or business of Hubert Dalton. His trade or business was not merely that of inventing; it included exploiting of his inventions, putting them on a paying basis by developing, manufacturing, improving and selling them through corporations organized for that special purpose. All of these things formed a complete, comprehensive enterprise of which the Corporation was part. It was an instrumentality of the taxpayer's business. Consequently, the investment in the corporate shares was part of business regularly carried on.
Whether theoretically valid or not, this argument rests upon assumptions out of harmony with the facts disclosed by the record. Dalton was not regularly engaged in the business of buying and selling corporate stocks. He organized the Manufacturing Corporation and took over *410 all its shares with the intention of selling them at a profit. He treated it as something apart from his ordinary affairs, accepted credits for salaries as an officer, claimed loss to himself because of loans to it which had become worthless, and caused it to make returns for taxation distinct from his own. Nothing indicates that he regarded the corporation as his agent with authority to contract or act in his behalf. Ownership of all the stock is not enough to show that creation and management of the corporation was a part of his ordinary business. Certainly, under the general rule for tax purposes a corporation is an entity distinct from its stockholders, and the circumstances here are not so unusual as to create an exception.
Affirmed.
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161 F.3d 22
Registerv.Sivley*
NO. 98-6099
United States Court of Appeals,Eleventh Circuit.
October 01, 1998
1
Appeal From: N.D.Ala. , No.97-01159-CV-AR-E
2
Affirmed.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
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634 F.Supp. 1480 (1986)
Clayton RICHARDSON, III, Plaintiff,
v.
CLAYTON & LAMBERT MANUFACTURING COMPANY, Defendant,
v.
FABRICO MANUFACTURING COMPANY, Third Party Defendant,
v.
B.F. GOODRICH COMPANY, Fourth Party Defendant.
No. EC 84-03-GD-D.
United States District Court, N.D. Mississippi, E.D.
May 20, 1986.
*1481 John W. Crowell and Aubrey E. Nichols, Columbus, Miss., for plaintiff.
Tommie G. Williams, Greenwood, Miss., for defendant Clayton & Lambert Mfg. Co.
W. Wayne Drinkwater and Janet D. McMurtray, Greenville, Miss., for defendant Fabrico Mfg. Co.
L.F. Sams, Jr. and Thomas D. Murry, Tupelo, Miss., for defendant B.F. Goodrich Co.
MEMORANDUM OPINION
DAVIDSON, District Judge.
FACTS
Presently before the court is the third party defendant's motion for summary judgment on the third party complaint of Clayton & Lambert Manufacturing Company. After due consideration of the voluminous memoranda and exhibits submitted in reference to this motion, the court is of the following opinion:
Clayton Richardson, III instituted the instant action against Clayton & Lambert Manufacturing Company for injuries he received in a swimming pool accident on July 22, 1980. Richardson sued Clayton & Lambert for negligence, breach of express and implied warranties, and for products liability in that the pool was in a defective condition unreasonably dangerous. Clayton & Lambert then filed a third party complaint against Fabrico Manufacturing Company for indemnity based on active-passive negligence, *1482 breach of implied warranty and strict liability. It is alleged that the vinyl liner in the pool was the cause of the plaintiff's injuries. Clayton & Lambert claims that it was a mere conduit of this vinyl liner from Fabrico to the buyer of the swimming pool. The defendant claims that if it is held liable on the causes of action alleged against it by the plaintiff, it should be indemnified by Fabrico.
Fabrico in turn argues that it is in no way responsible for the injuries that the plaintiff incurred and that it should not be held liable in any indemnity action by the defendant. In its motion for summary judgment Fabrico claims that it cannot be held liable for indemnity because Illinois law applies to the instant action, and Illinois does not recognize a cause of action for active-passive indemnity by a defendant tort feasor. Fabrico also claims that Clayton and Lambert's claim for indemnity for breach of implied warranties is barred by the statute of limitations of the Uniform Commercial Code. As to Clayton & Lambert's claim for indemnity for strict liability, Fabrico claims that Clayton & Lambert did not plead this cause of action in its third-party complaint nor in the pretrial order and therefore cannot recover on this claim. Fabrico also asserts that Clayton & Lambert cannot recover indemnity because it was actively at fault in not discovering the defect if any, in the liner.
In its response to Fabrico's motion for summary judgment, Clayton & Lambert asserts that its indemnity claims against Fabrico are viable because Mississippi law applies to the claim for active-passive indemnity, not the law of Illinois, and because the applicable statute of limitations has not run on the indemnity claims for breach of implied warranties. As to the strict liability claim, Clayton & Lambert asserts that this claim was asserted in its pleadings and that it is entitled to indemnity from Fabrico, the manufacturer.
LAW
In diversity actions based on causes of action that arise under state law, federal courts are required to apply the choice of law rules of the forum state. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477, 1480-81 (1941); Erie Railroad Co. v. Thompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed.2d 1188 (1938); Wayne v. Tennessee Valley Authority, 730 F.2d 392, 399 (5th Cir.1984), cert. denied ___ U.S. ___, 105 S.Ct. 908, 83 L.Ed.2d 922 (1985). As the instant action was brought in the federal district court for the Northern District of Mississippi, this court must apply the choice of law rules of the State of Mississippi.
Generally, Mississippi courts use the center of gravity test to determine whether Mississippi law or a foreign state's law will be applied. Mitchell v. Kraft, 211 So.2d 509 (Miss.1968); see also White v. Malone Properties (Miss.1986) No. 55,195, slip op. (March 12, 1986). In applying the Mississippi choice of law rules, the first step is to ascertain the nature of the issues involved. It is necessary to classify each issue as a problem in the law of torts, contracts, property or another area of the law. After this is done, the court must then determine what specific choice of law rules the State of Mississippi applies to issues arising in that legal area. See Acme Circus Operating Co., Inc. v. Kuperstock, 711 F.2d 1538, 1540 (11th Cir.1983).
In the instant action, the third party defendant alleges that the issues involved in the third party plaintiff's claims arise under the law of contracts. Accordingly, the third party defendant argues that provisions of the Restatement (Second) of Conflicts of Laws dealing with contracts should be applied in determining which state's laws will be used in resolving the issues that arise in the third-party action. Section 188 of the Restatement provides the factors to be considered in contract cases. These include:
(a) The place of contracting,
(b) the place of negotiation of the contract,
(c) the place of performance,
(d) the location of the subject matter of the contract, and
*1483 (e) the domicil, residence, nationality, place of incorporation and place of business of the parties.
Section 188 is generally used in cases where an issue exists concerning construction of a contract or breach of a contract. There is no Mississippi authority that this section should be used in determining which state's law on indemnity should be used.
In considering what law should be applied in the instant action for indemnity, the court is of the opinion that § 188 is inapplicable. See Lamb v. McDonnell-Douglas Corp., 712 F.2d 466, 469 (11th Cir.1983), (court used tort principles of conflicts of law to determine which state's law to apply in action for indemnity); Colonial Refrigerated Transp., Inc. v. Worsham, 705 F.2d 821, 826 (6th Cir.1983) (tort principles of conflicts of law used in determining which state's law to apply in implied indemnity action); Jones & Laughlin Steel v. Johns-Mansville Sales, 453 F.Supp. 527, 539 (W.D.Penn.1978) affirmed in part, reversed in part on other grounds, 626 F.2d 280 (3rd Cir.1981) (contacts relating to the personal injury, not contacts relating to the contract were examined in determining which state's law to apply in indemnity action).
The claim for indemnity based on active-passive negligence sounds in tort, not contract. Similarly, a claim for indemnity based on implied warranties has tort characteristics. While the action for breach of warranty may be considered a "mixed bag" between the law of contracts and the law of torts, Kellan v. Holster, 518 F.Supp. 175, 179 (M.D.Fla.1981), the court is of the opinion that the action more closely resembles a tort action. An implied warranty is not literally a "contractual" warranty because it is not incorporated into the formal agreement of the parties and is not a basis of the bargain. See 1 R. Anderson, Uniform Commercial Code § 2-314:3 at 528 (2d ed. 1970). The implied warranty arises independent of the sales contract. Furthermore, an action for breach of implied warranty is based on concepts of duty created by the sale of a product, breach of duty, proximate causation and injury. Defenses that may be asserted include contributory negligence and assumption of the risk. Thus, analysis of an indemnity claim based on an implied warranty is more akin to the area of tort law than to contract law. The indemnity claim based on the theory of products liability has similar tort characteristics.
Since tort concepts dominate the causes of action from which the defendant's third-party action is derivative, the court is of the opinion that tort conflicts of laws considerations should be analyzed in determining whether to use Mississippi law or Illinois law.
Section 145 of the Restatement provides that in tort cases the parties' rights and liabilities are to be determined under the local law of the state that has the most significant relationship to the occurrence at issue and to the parties. Principles of § 6 of the Restatement are to be used as guidelines in determining which state has the most significant relationship. Section 6 provides:
(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.
(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law include
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
In applying the principles of § 6, contacts that are to be considered include:
(a) the place where the injury occurred,
*1484 (b) the place where the conduct causing the injury occurred,
(c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and
(d) the place where the relationship, if any, between the parties is centered.
Restatement (Second) Conflict of Laws, § 145(2).
In the instant case, the court finds the following contacts:
1) The injury upon which the indemnity claim is based occurred in Mississippi.
2) The conduct that allegedly caused the injury may have occurred in Mississippi, Kentucky, Illinois, Ohio or in a combination of these states. Clayton & Lambert asserts that Fabrico was responsible for the conduct causing the plaintiff's injuries. Fabrico's fabrication of the vinyl liner sold to Clayton & Lambert took place in Illinois. Fabrico alleges, however, that it was not guilty of any injury-causing conduct. In its answer to the third-party complaint, Fabrico alleges that any injury-causing conduct took place when the liner was installed or when it was used. The liner was installed and used in Mississippi. Fabrico also alleges in its fourth-party complaint that the conduct causing the injury may be attributable to B.F. Goodrich, the fourth-party defendant. The activity by B.F. Goodrich took place in Ohio. In its motion for summary judgment, Fabrico also alleges that Clayton & Lambert may have been negligent in failing to discover any defects in the liner. Any such negligence would have occurred in Kentucky or Mississippi. From the foregoing allegations, it appears that the place where the conduct causing the injury occurred cannot be determined at this stage of the proceedings. Consequently, this factor is not of great import in the court's analysis of the contacts.
3) Fabrico was incorporated in Illinois and has its principle place of business there. Clayton & Lambert was incorporated in Kentucky, and its principle place of business is in Kentucky. The plaintiff, who instituted the original cause of action upon which recovery, if any, in the indemnity action will be predicated, is a resident of Mississippi.
4) The relationship between the parties herein, as it relates to the instant action, appears to be centered in Mississippi. The purpose of the transaction between the defendant and third-party defendant was to provide necessary materials for a pool to be installed in Mississippi. The vinyl liner was shipped to Mississippi and was installed there. While negotiations between the defendant and third-party defendant may have taken place in Illinois and in Kentucky, the purpose and result of these negotiations was to install a swimming pool in Mississippi.
In balancing these contacts, it appears that Mississippi has the most significant relationship with the action and the parties.
This conclusion is further supported by consideration of the factors listed in § 6 of the Restatement. As there is no statutory directive in Mississippi concerning choice of law in indemnity actions, the court looks to other relevant factors. In the instant case it appears that no matter what law this court applies, it will not affect the needs of the interstate and international systems. In looking at the relevant policies and interests of the forum and other interested states, it is apparent that all concerned states have policies and interests that could be promoted by the application of their laws. Mississippi has an interest in having the laws applied because it is the forum state and because the cause of action upon which the claim for indemnity is based occurred in Mississippi.
Illinois has an interest in having its laws applied because Fabrico is incorporated there and fabrication of the vinyl liner allegedly took place in Illinois. Likewise, Kentucky has an interest in having its laws applied because Clayton & Lambert is incorporated there and has its principle place of business in Birchner, Kentucky.
In considering the relevant policies of each of these states, it appears that Mississippi recognizes a right to common-law indemnity as well as a right to indemnity for breach of implied warranty and for strict *1485 liability. It also appears that Kentucky recognizes these indemnity rights. While Illinois apparently recognizes a right of action for indemnity based on breach of warranty and strict liability, Illinois law on common-law indemnity appears to be unsettled. Illinois courts of appeal have held that Illinois no longer recognizes a cause of action predicated on active-passive negligence. The Illinois Supreme Court has not ruled on this issue. If a cause of action for indemnity based on active-passive negligence no longer exists in Illinois, then that state would not have an interest in having its law applied to the common-law indemnity claim. Although Illinois does recognize a right to contribution among joint tort feasors, no claim has been made for such contribution pursuant to Illinois law.
The next factor the court must consider is the protection of justified expectations. The court is of the opinion that no evidence has been presented that the parties anticipated that any particular state's laws would be applied to a cause of action for indemnity by Clayton & Lambert against Fabrico based on a personal injury action. No actions were taken directly or indirectly in reliance on any state's laws.
Under the next factor, the court finds that the basic policy underlying the law of indemnity is that responsibility should be shifted so that one party will not be required to pay money that another should pay. This policy can be adequately served by applying Mississippi law on indemnity.
In considering the certainty of results, it appears that no interested state has well established law on each issue in this indemnity action. While Mississippi generally does have settled law on indemnity, several issues that may arise under the facts of the instant case have not been ruled upon by the Mississippi Supreme Court. For example, there is no Mississippi law on whether a defendant who was actively negligent may obtain strict liability indemnity from a third-party defendant who was also actively negligent. There also has been no Mississippi ruling on whether the explicit extension of time on warranties in a contract applies only to the express warranties or also to the implied warranties.
Illinois law also appears to be unsettled. The Illinois Supreme Court has not ruled on whether Illinois presently recognizes a common-law cause of action for implied indemnity. Also, the Illinois Supreme Court apparently has not ruled on whether an actively negligent defendant may obtain strict liability indemnity from another actively negligent party.
Fabrico asserts that the need for predictability and uniformity of results points to application of Illinois law. Fabrico alleges that Clayton & Lambert and Fabrico have a long-standing business relationship in which Fabrico manufactures vinyl liners and Clayton & Lambert sells them as components of swimming pools throughout the country. Since the vinyl liner could be shipped to any one of 50 states, Fabrico argues that the only way to promote uniformity and predictability of results is to apply Illinois law. Fabrico concludes that applying the law of the state where the vinyl liner is shipped would prevent both Fabrico and Clayton & Lambert from "systematically protecting [themselves] against unexpected liability." No evidence is provided to support this conclusion. Surely both parties may and do systematically obtain liability insurance on their products that are shipped out-of-state. Also, while Fabrico may have predicted that Illinois law would apply to any indemnity claim against it by Clayton & Lambert, it appears that Clayton & Lambert made no such prediction.
In considering the ease in determining and applying the law, it is clear that determination and application of Mississippi law would be much easier than determination and application of Illinois law. The court and the attorneys herein are located and licensed in Mississippi and are familiar with Mississippi law.
Based on the foregoing analysis of the factors in § 6 of the Restatement combined with the contacts in § 145, the court concludes that Mississippi is the center of gravity and that its laws will apply to the instant action.
*1486 STATUTE OF LIMITATIONS ON IMPLIED WARRANTY CLAIM
Pursuant to Mississippi Code §§ 75-2-314 and 75-2-315, when a merchant sells a product, he extends certain implied warranties with that product to the customer. Fabrico states that if any such implied warranties were extended by it on the vinyl liner in the instant case, such warranties were made when the vinyl liner was shipped in July 1977. Fabrico further states that if any such implied warranties were breached, an action for the breach is now time-barred. Fabrico reasons that since Mississippi applies the law of the forum in procedural questions, the Mississippi statute of limitations on claims for implied warranty governs in the instant case. Although the court agrees that the Mississippi statute of limitations applies, the court has reached this conclusion by applying the center of gravity test. See Mitchell v. Craft, 211 So.2d 509 (Miss.1968) and White v. Malone Properties (Miss. 1968). No. 55,195, slip op. (March 12, 1986).
Mississippi Code § 75-2-725 (1972) governs the time period in which a personal injury suit founded on a breach of warranty claim may be brought. This section provides in pertinent part:
(1) An action for breach of any contract for sale must be commenced within six (6) years after the cause of action has accrued.
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.
Under § 75-2-725(2), the statute of limitations for a breach of warranty claim begins to run from the date of tender of delivery, and not from the date of the personal injury. Alexander v. Conveyors & Dumpers, Inc., 731 F.2d 1221, 1227-28 (5th Cir.1984); Ocean Springs Corp. v. Celotex Corp., 662 F.2d 353, 354 (5th Cir.1981); Maly v. Magnavox Co., 460 F.Supp. 47, 48 (N.D.Miss.1978); Rutland v. Swift Chemical Co., 351 So.2d 324, 325 (Miss.1977). Fabrico claims that since delivery of the pool liner occurred more than six years before the instant action was filed, the action for indemnity based on the breach of warranty is barred by the statute of limitations.
In response to Fabrico's assertion, Clayton & Lambert argues that the future performance exceptions embodied in Mississippi Code § 75-2-725(2) applies and that the statute of limitations on the breach of warranty action has not run. Clayton & Lambert argues that Fabrico explicitly extended its warranties to the future performance of the vinyl liner and that the discovery of the breach of this warranty did not occur until the accident. The action is alleged to have accrued at the time of such discovery. Under this theory, the plaintiff's claim for breach of warranty is not barred. The Fabrico extension of warranty provides:
THIS IS FABRICO'S SOLE WRITTEN WARRANTY. ANY AND ALL OTHER WARRANTIES WHICH MAY BE IMPLIED BY LAW, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY LIMITED TO THE DURATION OF THIS WRITTEN WARRANTY.
The duration of the written warranty was expressly provided to be 10 years. Clayton & Lambert argues that the above written warranty not only limited the implied warranty to a 10 year period, but also extended the time of implied warranty to a period of 10 years.
Fabrico argues that the future performance exception to the six-year statute of limitations applies only to express warranties. Fabrico cites several cases supporting this proposition. See Stumler v. Ferry-Morse Seed Co., 644 F.2d 667 (7th Cir. *1487 1981); Holdridge v. Heyer-Schulte Corp., 440 F.Supp. 1088 (N.D.N.Y.1977); Wright v. Cutler-Hammer, Inc., 358 So.2d 444 (Ala.1978). None of the cases cited by Fabrico, however, have involved a clause wherein the implied warranties were specifically mentioned. The cases cited by Fabrico hold that the future performance exception to the statute of limitations in § 75-2-725 does not apply to implied warranties. In reaching this conclusion, the courts reason that it is not logical that the Uniform Commercial Code drafters intended that an implied warranty be explicitly extended because the terms implied and explicit are anonyms. This court is of the opinion, however, that if a contract provides: "The implied warranties in this contract are extended to a period of ten years," then the implied warranty is expressly extended to future performance.
In Rutland v. Swift Chemical Co., 351 So.2d 324 (Miss.1977), the Mississippi Supreme Court recognized that the future performance exception could apply to an implied warranty if the implied warranty had clearly related to future performance. Id. at 325. In Fabrico's warranty it is explicitly provided that the implied warranties are "LIMITED TO THE DURATION OF THIS [TEN YEAR] WRITTEN WARRANTY." The court must determine whether this language explicitly extends the warranty to future performance. The court is of the opinion that it does. The writing limiting the implied warranty to 10 years unambiguously expresses the intent that the warranty will run up to and including 10 years but no longer than 10 years. Since no ambiguity exists, the court must accept the plain meaning of the extension of warranty and give effect to the instrument as written. See Freeman v. Continental Grain Co., 381 F.2d 459, 465 (5th Cir.1967); Allen v. Powell, 260 So.2d 182, 184 (Miss.1972); Roberts v. Corum, 236 Miss. 809, 112 So.2d 550, 554 (1959). Consequently, the future performance exception to the rule that the statute of limitations runs from the time of delivery is applicable. The court is of the opinion that the cause of action accrued at the time of discovery, and the breach of warranty action is not barred.
IMPLIED INDEMNITY
In his complaint, Richardson asserts that the vinyl liner of the swimming pool was unreasonably dangerous because its coefficient of friction was too low. This defect allegedly caused Richardson's hands to slide apart when he hit the bottom of the pool, causing his head to be exposed. Richardson also alleges that the pebble design imprinted on the pool liner prevented him from properly estimating the depth of the water from a standing position on the side of the pool. As to each of these claims Clayton & Lambert alleges that it is not responsible for any defect in the pool liner and that it was a "mere conduit" of the liner from Fabrico to the pool owners. In its third party action against Fabrico for indemnity, Clayton & Lambert contends that any negligence on its part in selling the pool liner was passive and that Fabrico should be required to indemnify Clayton & Lambert based on Fabrico's active negligence.
In its motion for summary judgment, Fabrico contends that Clayton & Lambert cannot be held liable to Richardson under either principles of strict liability or negligence for selling a product with a latent defect. Fabrico therefore argues that it cannot be held liable to indemnify Clayton & Lambert. Fabrico further contends that if the vinyl liner contained a patent defect, Clayton & Lambert is actively negligent for selling such a product and that this active negligence bars it from receiving indemnity from Fabrico.
Mississippi courts have held that one who sells a product that has been manufactured by another cannot be held liable for negligence in failing to discover a latent defect in the product that causes injury to a third person. See Early-Gary, Inc. v. Walters, 294 So.2d 181, 187 (Miss.1974); Shainberg *1488 Company of Jackson v. Barlow, 258 So.2d 242, 246 (Miss.1972). Accordingly, if it is found that the alleged defects in the pool liner were latent defects, Clayton & Lambert cannot be held liable for failure to discover these defects on either a negligence or strict liability theory. Since Clayton & Lambert cannot be held directly liable, Fabrico cannot be held liable to indemnify Clayton & Lambert.
If the alleged defects in the pool liner are found to be obvious defects, Fabrico asserts that Clayton & Lambert must be held liable based on an independent duty that it owed to the plaintiff to discover and remedy those defects. Fabrico asserts that any such failure to discover a patent defect constitutes active negligence and precludes common law indemnity. Fabrico cites two cases to support this proposition.
Fabrico states:
In Alabama Great Southern Railroad Co. v. Allied Chemical Corp., 501 F.2d 94 (5th Cir.1974), a railroad company settled damage claims resulting from an accident caused by defective parts used in one of its trains, and sued the parts manufacturer for indemnity. The court refused to allow indemnity, stating that the railroad could have been liable to the claimants only if it had negligently failed to discover and remedy the defects, which constituted active negligence barring indemnity.
The court reads the Alabama Great Southern Railroad case differently. First, the defect that caused the accident in that case was a latent defect, not a patent one. The court held that a jury could have concluded that the railroad company was either actively negligent for lack of reasonable care in operating the railroad or that the railroad was guilty of no negligence because it had no duty to discover a latent defect. This court does not find any statement by the Alabama Great Southern Railroad court that the railroad could have been liable "only if it had negligently failed to discover and remedy the defects, which constituted active negligence barring indemnity."
Fabrico next claims that in Home Insurance Company of New York v. Atlas Tank Manufacturing Co., 230 So.2d 549 (Miss.1970), the Mississippi Supreme Court held that a defendant who fails to remedy a condition that the defendant knows or should know is dangerous is actively at fault, precluding indemnity against a third party who created the danger. The court's reading of the Atlas Tank case indicates that the determination of whether a party is actively or passively negligent is a question of fact and depends upon the facts of each case. Based on the facts that the power company in Atlas Tank had safety regulations requiring its lines to be at a certain height, that the power company had failed to inspect its lines and realize that the lines were dangerously low, and that in fact the power company had knowledge of the danger indicated that the power company was actively negligent.
Any such factual question of whether Clayton & Lambert was actively or passively negligent may not be decided on summary judgment. Since it cannot be determined at this juncture whether Clayton & Lambert was actively or passively negligent, there are material issues of fact and Fabrico is not entitled to judgment as a matter of law on the implied indemnity and strict liability indemnity claims.
Accordingly, it is Ordered that the third party defendant's motion for summary judgment be and is hereby denied.
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732 S.W.2d 527 (1987)
STATE of Missouri, Respondent,
v.
Jerome MALLETT, Appellant.
No. 68030.
Supreme Court of Missouri, En Banc.
June 16, 1987.
Dissenting Opinion July 14, 1987.
Rehearing Denied July 14, 1987.
*530 Kathleen Murphy Markie, Columbia, for appellant.
William L. Webster, Atty. Gen., and John M. Morris, Asst. Atty. Gen., Jefferson City, for respondent.
Dissenting Opinion July 14, 1987 (Blackmar, Judge).
BILLINGS, Judge.
Defendant Jerome Mallett was convicted of the first degree murder, § 565.020, RSMo 1986, of Missouri State Highway Patrol Trooper James M. Froemsdorf and sentenced to death, the jury finding the following statutory aggravating circumstances: (1) the murder was outrageously or wantonly vile, horrible or inhuman in that it involved depravity of mind, § 565.032.2(7), RSMo 1986; (2) the murder was committed against a peace officer while engaged in the performance of his official duty, § 565.032.2(8), and (3) the murder was committed by a person who had escaped from the lawful custody of a peace officer, § 565.032.2(9). Affirmed.
Defendant contends: (1) the evidence was insufficient to support his verdict; (2) evidence of crimes he committed in Texas shortly before the murder was erroneously admitted at trial; (3) an instruction on the defense of accident should have been submitted; (4) an instruction on circumstantial evidence should have been submitted; (5) the prosecutor improperly argued his character during the guilt phase; (6) evidence of his character and prior criminal activities was erroneously admitted during the penalty phase; (7) one witness improperly testified as an expert; (8) his videotaped statement was erroneously admitted; (9) Missouri's death penalty is discriminatorily applied; (10) Missouri's death penalty is unconstitutional; (11) his sentence was imposed under the influence of passion and prejudice; and (12) his sentence is disproportionate to sentence imposed in similar cases.
In assessing a sufficiency of the evidence challenge, the evidence, together with all reasonable inferences to be drawn therefrom, is viewed in the light most favorable to the verdict and evidence and inferences contrary to the verdict are ignored. E.g., State v. Guinan, 665 S.W.2d 325, 327 (Mo. banc), cert. denied, 469 U.S. 873, 105 S.Ct. 227, 83 L.Ed.2d 156 (1984).
On February 4, 1985, defendant robbed a jewelry store in Plano, Texas. Based upon the robbery victim's identification of defendant as the holdup man, the Plano police obtained a warrant for defendant's arrest. The warrant was placed in the computer system of the National Crime Information Center (N.C.I.C.). The N.C.I.C. is a system that provides law enforcement agencies nationwide access to information on persons wanted for criminal offenses. The last information sent by the Plano police to the N.C.I.C. was that defendant might be returning to Missouri.
*531 Shortly after 5:30 p.m., on March 2, 1985, defendant, driving a white over copper Ford, was pulled over for speeding on Interstate 55 in Perry County by Trooper James Froemsdorf. Before Trooper Froemsdorf approached his vehicle, defendant hid his wallet and identification under the front seat. When Trooper Froemsdorf arrived and asked for his driver's license, defendant replied that he did not have it with him. Defendant told Trooper Froemsdorf that his name was Anthony Mallet. Anthony Mallet is defendant's brother. Trooper Froemsdorf handcuffed defendant and then in a search of the Ford found several items bearing the name "Jerome Mallet," including defendant's wallet containing a Texas driver's license and several pawnshop tickets.
Returning to his patrol car with these items, Trooper Froemsdorf called in to the Highway Patrol radio dispatcher. After running a check on the driver's license, the dispatcher informed Trooper Froemsdorf that defendant was wanted in Texas on four warrants for probation violation and one warrant for aggravated robbery. At 5:40 p.m., Trooper Froemsdorf, in his last radio transmission, told the dispatcher that defendant was in custody, that he needed no assistance, and that the dispatcher could contact him next at the Perry County Sheriff's Office.
At approximately 6:00 p.m., a passing motorist, curious at seeing an apparently unoccupied patrol car with its red lights flashing, stopped to investigate and found Trooper Froemsdorf's body. At 6:15 p.m., a highway patrol trooper also arrived at the scene. The trooper called for medical personnel who subsequently pronounced Trooper Froemsdorf dead.
The inside of Trooper Froemsdorf's patrol car was a shambles, evidencing a struggle. Found in the patrol car were defendant's driver's license and the other identifying items Trooper Froemsdorf had taken from defendant's vehicle, along with a partially filled out speeding ticket for defendant and a handwritten note listing defendant's Texas warrants. Missing from the patrol car was Trooper Froemsdorf's service revolver, a .357 magnum. On the hood of the car investigators later found defendant's palm print.
Around 7:00 p.m. that evening, a St. Francois County deputy sheriff sighted defendant's copper and white Ford and began a pursuit. The chase ended with defendant missing a turn, running up an embankment, and crashing through a fence into a field. Defendant evaded capture by quickly exiting the vehicle and fleeing on foot. On the front floorboard of defendant's car the deputy found Trooper Froemsdorf's service revolver. The weapon contained four spent and two unspent shells. The only fingerprint found on the revolver belonged to defendant. Defendant's fingerprints were also on the door of the Ford.
After fleeing, defendant swam across a river and spent the first night in a car in a nearby garage, where he also stole a jacket and shoes to replace his own wet clothing. Leaving the garage the next day, defendant saw signs of a search and stole away to a barn where he burrowed under some hay. After spending two nights in the barn, defendant attempted to reach a nearby McDonald's for food. Law enforcement officers, who had been conducting an extensive search, spotted defendant and captured him following a brief pursuit. The officers noticed that handcuffs dangled from defendant's left wrist. When the right cuff was placed on defendant's right wrist, it slid halfway down his hand. It was ultimately discovered that defendant had suffered an injury to his right hand as a child which enabled him to compress it to nearly the size of his wrist and slip out of handcuffs. After defendant was resecured, he was taken to a highway patrol station where he waived his Miranda rights and gave a video-taped statement. In the statement defendant admitted shooting Froemsdorf, but claimed it was accidental.
In the investigation of the killing of Trooper Froemsdorf, an autopsy was performed on his body. Large bruises and numerous abrasions were evident on Trooper Froemsdorf's face, primarily on the left side. Under the trooper's left eye was a serrated cut which matched the ratchet on *532 handcuffs used by the highway patrol. Abrasions on the left side of the chin matched the solid portion of the handcuffs. The pathologist testified that this cut and these abrasions were consistent with a blow or blows to the trooper's face with the handcuffs. Such blows, the pathologist continued, would immediately cause the eyes to water and blind a person for a brief period of time.
On the lower left side of the trooper's chest was a 7.7 by 4.0 centimeter abrasion surrounded by a large area of bruising. This wound was inflicted by the impact from short range of a .357 magnum bullet into Trooper Froemsdorf's bulletproof vest. Tests of the bullet causing the wound, which was found imbedded in the vest, indicated that it had been fired from Trooper Froemsdorf's service revolver. The impact of a .357 magnum bullet from short range, the pathologist testified, would knock the breath out of the victim and render him helpless for a short time.
On the right side of Trooper Froemsdorf's neck, about an inch and a half apart, were the entrance wounds of two gunshots. The slug causing the lower wound passed through the victim's trachea and carotid artery and exited out of the left side of the neck. Such a wound would cause heavy bleeding and hamper the victim's breathing. The slug causing the higher wound fractured two vertebrae and severely damaged the spinal cord before also exiting out of the left side of the neck. The effect of this wound was the instantaneous death of Trooper James Froemsdorf.
Both the bullets which pierced the victim's neck left the neck at a higher point than they entered. After exiting the neck, one of the bullets struck the chrome strip at the bottom of the front driver's side window and the other went through the driver's seat and passed out of the car through the left rear door. The combination of the upward angle of the slugs through Trooper Froemsdorf's neck with the slugs' impact points with the car led defendant's firearms expert to conclude Trooper Froemsdorf was leaning downward toward the driver's door and away from the passenger's seat when he was shot. This was the position in which the body was, in fact, found.
Besides the three slugs which hit Trooper Froemsdorf's body, there was alos evidence of a fourth shot which plowed a furrow in the right epaulet of the trooper's uniform shirt and shattered the driver's window of the patrol car. Defendant's firearms expert testified that he believed that this shot that shattered the window was the first one to be fired. In his opinion, the second shot hit the trooper's bullet proof vest and the third and fourth shots went through the trooper's neck. The pathologist agreed that the shot to the vest occurred before the shots through the neck.
Forensic analysis of the powder burn "stippling" on the victim's neck indicated that the muzzle of the murder weapon was from twelve to eighteen inches away from the neck at the time the shots were fired. Tests to determine the presence of gunshot residue on Trooper Froemsdorf's hands established the presence of such residue only on his left palm. This is consistent with him having his left hand raised in front of the muzzle of a discharging revolver, but not with him having fired the revolver himself.
Given the evidence outlined above, a jury could have made the following reasonable inferences as to the events which occurred after Trooper Froemsdorf's last radio transmission to the dispatcher and which ended with his death.
After his final contact with the dispatcher, Trooper Froemsdorf led defendant back to his patrol car and ordered him into the front passenger's seat. The trooper got into the driver's seat and began to write a speeding ticket for defendant. Meanwhile, defendant, fearing that the Texas warrants for his arrest would soon be discovered (or perhaps even knowing they had already been found) and that he would be extradited to Texas for near certain jail time, managed to work his right hand out of the handcuffs. While liberating himself from the handcuffs, defendant decided to attack Trooper Froemsdorf, kill him if he could, *533 and make a break for freedom. Using his handcuffed left hand, defendant, without warning, struck Trooper Froemsdorf repeatedly across the face. On one blow, the ratchet of the handcuffs cut into the area below the trooper's left eye, temporarily blinding him. Despite defendant's fierce onslaught and his own injuries, Trooper Froemsdorf struggled as best he could to subdue defendant. While Trooper Froemsdorf was hampered by his temporary inability to see and other injuries, defendant managed to draw the trooper's .357 magnum service revolver from the holster on his right hip. Defendant's first shot was wild, grazing the trooper's right epaulet before shattering the driver's window. Defendant's second shot hit the trooper in the left lower chest. Although this slug was stopped by the bullet proof vest which Trooper Froemsdorf was wearing under his uniform shirt, its impact slammed him back against the driver's door, knocked him breathless, and rendered him helpless for a time. Then defendant, taking advantage of Trooper Froemsdorf's momentary defenselessness, fired two slugs at point-blank range into the officer's neck, killing him.
In order for a jury to return a verdict of guilt on first degree murder, it must reasonably find, beyond a reasonable doubt, that the defendant knowingly caused the death of another person after deliberation upon the matter. Section 565.020.1, RSMo 1986. The evidence and inferences that defendant killed Trooper Froemsdorf through the use of a deadly weapon on a vital part of his body support a jury finding that defendant knowingly fired the trooper's revolver with the awareness that the bullets were practically certain to cause his death. See State v. LaRette, 648 S.W.2d 96, 103 (Mo. banc), cert. denied, 464 U.S. 908, 104 S.Ct. 262, 78 L.Ed.2d 246 (1983). The evidence that defendant had to slip out of handcuffs before attacking Trooper Froemsdorf gives rise to the reasonable inference that defendant reflected for a time about killing the Trooper. The evidence that the shot to Trooper Froemsdorf's chest would have temporarily incapacitated him gives rise to the reasonable inference that defendant reflected further upon whether to send two slugs through the trooper's neck. Either of these inferences would support a jury finding of deliberation. See § 565.002(3), RSMo 1986 ("`Deliberation' means cool reflection for any length of time no matter how brief"). See also State v. Roberts, 709 S.W.2d 857, 862-63 (Mo. banc), cert. denied, ___ U.S. ___, 107 S.Ct. 427, 93 L.Ed.2d 378 (1986); and State v. McDonald, 661 S.W.2d 497, 500-501 (Mo. banc 1983), cert. denied, 471 U.S. 1009, 105 S.Ct. 1875, 85 L.Ed.2d 168 (1985), for somewhat similar facts which were found to support a finding of deliberation.
Defendant urges that the facts and circumstances adduced at trial are at least as consistent with his story that the death of Trooper Froemsdorf was accidental as they are with the inferences, outlined above, that he assaulted the trooper, drew his revolver, and knowingly and deliberately shot and killed him. Defendant's story was that Trooper Froemsdorf, after seating defendant in the patrol car, struck him lightly twice and accused him of lying about his name and not having his driver's license; that defendant slipped his hand out of the handcuffs and grabbed the trooper's arms to prevent further physical abuse to himself; that Trooper Froemsdorf drew his revolver; that defendant, fearing the trooper would shoot him, clutched at the trooper's hands and the gun and butted the trooper in the face with his head several times; and that in the course of the struggle, while Trooper Froemsdorf's finger was on the trigger, the gun fired several times.
Defendant's version of events, however, is not consistent with the evidence. First, the bruises and abrasions on Trooper Froemsdorf's face were consistent with being struck by handcuffs, and not with being butted by defendant's head. Second, although defendant asserts that Trooper Froemsdorf drew his service revolver and had his finger on the trigger when it discharged, the only fingerprint on the weapon was defendant's. Also Trooper Froemsdorf's hands had gunshot residue only on the left palm. As stated above, this residue *534 pattern is consistent with the trooper having held his hand up in front of a firing revolver, but inconsistent with Trooper Froemsdorf having himself fired the weapon. Third, the slugs penetrating Trooper Froemsdorf's neck caused immediate and heavy bleeding and a considerable amount of blood covered the trooper's hands and shirt. Defendant's claim that the four shots were fired while he was grappling with the trooper for the gun is thus belied by defendant's admission that he had none of the trooper's blood on himself. Fourth, defendant's claim that each shot was fired during a struggle while Trooper Froemsdorf's finger was on the trigger is inconsistent with medical testimony as to the effect of the trooper's wounds. The slug which buried itself in the trooper's bulletproof vest, which defendant admits was the first to hit the trooper, would have knocked him breathless and rendered him temporarily unresponsive. The trooper would thereafter be incapable of continuing the struggle for the revolver for a time or of keeping his finger on the trigger. Even if Trooper Froemsdorf had been able to tense his finger on the trigger after being hit in the chest, either subsequent shot to the neck would have completely disabled him, thus preventing him even from inadvertantly pulling the trigger for the second shot to the neck. Fifth, defendant's version of events is refuted by the trajectories of the bullets penetrating Trooper Froemsdorf's neck. These bullets entered the trooper's neck an inch and a half apart and at nearly identical angles. This evidence, combined with the testimony that a .357 magnum recoils backward and upward when discharged, is inconsistent with the claim that the trooper's .357 magnum was fired randomly during a struggle. Sixth, defendant had reason to fear that the Texas warrants for his arrest for probation violations and aggravated robbery would be discovered. Thus, he had a motive to murder Trooper Froemsdorf so that he could avoid being returned to Texas for a lengthy period of incarceration. The presence of motive is a factor consistent with defendant's guilt, see State v. Stapleton, 518 S.W.2d 292, 296 (Mo. banc 1975), and inconsistent with defendant's story that the shooting of Trooper Froemsdorf was an accidental and motiveless event.
Considering all the evidence, together with all reasonable inferences therefrom, which supports the verdict, and casting aside all contrary evidence and inferences, the jury could reasonably find, beyond a reasonable doubt, that defendant knowingly shot Trooper Froemsdorf to death after deliberation upon the matter.
Defendant next contends that the trial court erred in admitting evidence that he had robbed a jewelry store in Plano, Texas the month before Trooper Froemsdorf was murdered. He argues that the admission of this evidence was irrelevant and highly prejudicial in that, while it had no legitimate bearing on his guilt on the murder charge, it, in fact, tended to raise in the minds of the jurors an unwarranted presumption of guilt on that murder charge.
Evidence of commission by defendant of crimes separate and distinct from the crime for which he is charged is generally inadmissible. E.g., State v. Shaw, 636 S.W.2d 667, 671-72 (Mo. banc), cert. denied, 459 U.S. 928, 103 S.Ct. 239, 74 L.Ed.2d 188 (1982). But such evidence is generally admissible to prove the crime charged when it tends to establish motive, intent, the absence of mistake or accident, a common scheme or plan embracing the commission of two or more crimes so related that proof of one tends to establish the other, or the identity of the person charged with the commission of the crime on trial. E.g., id. at 672. Evidence of other crimes should be admitted under one of these exceptions only when the prejudicial effect of the evidence is outweighed by its probative value. This balancing of prejudicial effect and probative value lies within the sound discretion of the trial court. E.g., id.
The evidence presented here of defendant's robbery of the Texas jewelry store was admissible to show defendant's motive for killing Trooper Froemsdorf. Defendant's knowledge that he would quite probably be returned to Texas to face aggravated robbery charges for acts he committed *535 while already in violation of his probation gave him a very discernible reason to kill Trooper Froemsdorf. Although the introduction of this evidence put before the jury evidence of a crime for which defendant had never been convicted, the probative value of the evidence was greater than any prejudicial effect. The great probative value of evidence of motive is made clear in State v. Stapleton, 518 S.W.2d 292, 296 (Mo. banc 1975), where this Court noted that the absence of motive has been a pivotal factor in determinations as to the sufficiency of the evidence. The evidence of motive in this case was particularly probative because it tended to refute defendant's story that the shots were fired accidentally. See State v. Crabtree, 625 S.W.2d 670, 676 (Mo.App.1981). Evidence of other crimes has frequently been admitted to show motive, despite any incidental prejudice to defendant. See, e.g., State v. Williams, 652 S.W.2d 102, 110 (Mo. banc 1983); State v. Graham, 641 S.W.2d 102, 105 (Mo. banc 1982); State v. Trimble, 638 S.W.2d 726, 732-33 (Mo. banc 1982), cert. denied, 459 U.S. 1188, 103 S.Ct. 838, 74 L.Ed.2d 1031 (1983); State v. Shaw, 636 S.W.2d at 672. The trial court did not abuse its discretion by admitting evidence of the Texas robbery.
Defendant further argues that, even if some evidence of the Texas robbery was admissible, the trial court erred in permitting the state to present the details of the robbery. Defendant asserts that the state's theory as to motive was established by testimony that word of the Texas warrants for the arrest of defendant for aggravated robbery and probation violations had been transmitted to Trooper Froemsdorf and that he had radioed in that he had defendant in custody and was on the way to the Perry County Sheriff's Office. Admission of any further details of the robbery, defendant concludes, added nothing to the state's theory of motive but greatly increased the prejudice to defendant.
Contrary to defendant's argument, introduction of the detailed evidence of the Texas robbery was necessary in order for the state to establish motive. The state would not have made a sufficient showing of motive simply by presenting evidence that Trooper Froemsdorf knew of the warrant for defendant's arrest for robbery. Rather, the state needed to show that defendant knew he was wanted for the robbery. Only then would defendant have had a reason to escape from Trooper Froemsdorf by killing him, because only in this case would defendant have had reason to believe a traffic stop would result in the connection of himself to the robbery and his subsequent return to Texas for trial and, given the evidence, probable conviction and a lengthy sentence. Cf. State v. Willis, 632 S.W.2d 63, 65 (Mo.App.1982) (evidence that defendant would gain financially under an insurance policy on the victim admissible only if defendant knew of existence of the policy, that it was in force, and that he could gain under the policy by the death of the victim). Only by introducing evidence of the manner in which the jewelry store was robbed could the state show that defendant knew he was wanted for the robbery. The state therefore presented testimony that a man had entered the Plano jewelry store and had spoken to both sales clerks at some length without attempting to conceal his face in any way. He was wearing a gold necklace monogrammed with the letter "M". The clerks recognized him as being the same man who had been in two weeks earlier and had unsuccessfully attempted to purchase jewelry with an insufficient funds check. The man had filled out a sales ticket at that time and had given defendant's name. After looking at diamond pendants, the man drew a nickle-plated revolver, ordered the clerks to place jewelry in a bag he was holding, had them lie on the floor, and left. At trial, one of the clerks testified that she recognized defendant as the man who had committed the robbery.
These details of the robbery give rise to the reasonable inference that defendant knew he was wanted for the robbery and thus that he had a motive to resist being taken into custody. Wide latitude is generally allowed in the development of evidence of motive. State v. Holt, 592 S.W.2d 759, 775 (Mo. banc 1980). Because *536 of this wide latitude and the great probative value of evidence of motive, the Court concludes that the trial court did not abuse its discretion in admitting detailed evidence of the Texas robbery.
Also with respect to evidence of the Texas robbery, defendant urges that pawn tickets found in Trooper Froemsdorf's patrol car were erroneously admitted into evidence and read to the jury because the information contained on the pawn tickets, particularly notations on most of the tickets that the item pawned was jewelry, constituted inadmissible hearsay connecting defendant to the robbery. The rule that hearsay is inadmissible, however, has no application where the extrajudicial statement is not offered as proof of the matters asserted therein. State v. Hale, 371 S.W.2d 249, 254 (Mo.1963). The pawn tickets here were admitted by the trial court not as proof of the matter asserted therein (that certain items were pawned by defendant), but as proof of defendant's presence at the murder scene. Defendant attempts to bring the pawn tickets within the bounds of the hearsay rule by pointing to a statement made out of the hearing of the jury by one of the prosecutors which suggests that the pawn tickets were offered to show defendant's connection with the Texas robbery. This attempt fails because the principal prosecutor had previously stated that he was offering the pawn tickets solely to show defendant's presence at the crime scene, because the trial court admitted the tickets for the sole purpose of showing defendant's presence at the scene, and because the tickets were never used by the state for any purpose other than showing the defendant's presence at the scene.
Defendant next argues that the trial court erred in failing to instruct the jury on the defense of accident (excusable homicide). No need exists, however, for a separate instruction on accident because, under the current Missouri statute on the defense of accident, § 563.070, RSMo 1986 (effective October 1, 1984, five months before the murder of Trooper Froemsdorf), a finding of the elements of any homicide offense is inconsistent with such a defense. MAI-CR3d 304.11, part D.[1] Thus an instruction on accident would have been redundant. No error was committed by the trial court in refusing to submit the requested accident instruction.
Defendant also assigns error to the trial court's refusal to submit his requested instruction on the definition and use of circumstantial evidence. The requested instruction was identical to MAI-CR2d 3.42. Defendant acknowledges that a circumstantial evidence instruction need not be given in a case where the evidence is partially direct and partially circumstantial. See, e.g., State v. Griffin, 662 S.W.2d 854, 857 (Mo. banc 1983), cert. denied, 469 U.S. 873, 105 S.Ct. 224, 83 L.Ed.2d 153 (1984). In defendant's videotaped statement, which was introduced into evidence, defendant, in describing what happened in the patrol car, said:
When we was wrestlin' [for the gun] the gun went off and ... shot up somewhere. I shot him again when I was taking it from him. I shot again. Then just shot again.
This is direct evidence that defendant shot Trooper Froemsdorf. This direct evidence obviated the requirement that a circumstantial evidence instruction be given.
Defendant argues that the trial court erred in permitting the state to argue defendant's supposed bad character in closing argument. No foundation was laid for appellate review of this point because defendant made no objections on this ground during the state's closing argument. The Court, nevertheless, has examined the closing argument for plain error and has found no manifest injustice or miscarriage of justice. See Rule 30.20. At no point did the prosecutor directly or indirectly urge the jury to convict defendant because of his bad character or his criminal proclivities. The challenged comments were either made for the permissible purpose of attacking *537 defendant's credibility or were permissible arguments upon such propositions as the prevalence of crime and the jury's duty to uphold the law. See, e.g., State v. Newlon, 627 S.W.2d 606, 619 (Mo. banc), cert. denied, 459 U.S. 884, 103 S.Ct. 185, 74 L.Ed.2d 149 (1982).
Defendant next contends that the state was erroneously permitted to introduce evidence of defendant's character and prior criminal record, in proof of non-statutory aggravating circumstances, in the penalty phase of the trial because it failed to comply with the notice provision of § 565.005.1, RSMo 1986. Section 565.005.1(1) provides:
At a reasonable time before the commencement of the first stage of any trial of murder in the first degree at which the death penalty is not waived, the state and defendant, upon request and without order of the court, shall serve counsel of the opposing party with: (1) A list of all aggravating or mitigating circumstances as provided in subsection 1 of Section 565.032, which the party intends to prove at the second stage of the trial....
(Emphasis added). Section 565.032.1, RSMo 1986, provides in pertinent part:
In all cases of murder in the first degree for which the death penalty is authorized, the judge in a jury-waived trial shall consider, or he shall include in his instructions to the jury for it to consider
* * * * * *
(3) Any mitigating or aggravating circumstances otherwise authorized by law and supported by the evidence and requested by a party including any aspect of the defendant's character, the record of any prior criminal convictions, and pleas and findings of guilty and admissions of guilt of any crime or pleas of nolo contendere of the defendant
Defendant's contention here fails because he never made the required request for disclosure under § 565.005 of the aggravating circumstances which the state intended to prove. It is noted that defendant, despite this lack of request, was not taken unaware or otherwise prejudiced by the admission of evidence relating to his character and prior criminal record or by the submission of the non-statutory aggravating circumstances, which were premised upon his prior convictions. By at least a month before trial, the state had voluntarily provided defendant with copies of all certified convictions which it planned to introduce as penalty phase exhibits and with written notice of the witnesses it intended to call during the penalty phase.
Defendant's next argument is that the trial court erred in permitting the testimony of state's witness Dr. Zaricor concerning the order in which the shots struck Trooper Froemsdorf and concerning the effect upon a person wearing a bulletproof vest of being shot in the chest by a .357 magnum because Dr. Zaricor was not qualified as an expert in these areas.
With respect to Dr. Zaricor's testimony regarding the impact of a .357 magnum slug on a person wearing a bulletproof vest, defendant made no objection when Dr. Zaricor first gave his opinion. The objection made when Dr. Zaricor repeated his opinion five days later after being called by the defense was untimely. The Court, however, has reviewed defendant's challenge to this testimony and has found no error, plain or otherwise. The test of expert qualification is whether he has knowledge from education or experience which will aid the trier of fact. State v. Garrett, 682 S.W.2d 153, 155 (Mo.App. 1984). The qualification of an expert is a matter resting primarily in the sound discretion of the trial court. State v. Jones, 594 S.W.2d 932, 938 (Mo.1980). Dr. Zaricor's qualifications to testify on this topic were quite sufficient. He was a pathologist who had conducted forty or fifty autopsies involving gunshot wounds and observed two hundred others, including five where the weapon used was a .357 magnum. He had talked to people who had been shot while wearing bulletproof vests. Dr. Zaricor had also seen abrasions like that inflicted on Trooper Froemsdorf by the shot into his bulletproof vest. Moreover, his evaluation as to the effect of this *538 injury was primarily a medical one and thus certainly within his field of expertise. The trial court did not abuse its discretion in admitting Dr. Zaricor's testimony on this topic.
With respect to Dr. Zaricor's testimony regarding the order of shots, error, if any, in admission of the testimony was non-prejudicial. Dr. Zaricor's opinion as to the order of shots was exactly the same as that of defendant's firearms expert.
Defendant's next assignment of error is that his videotaped statement was improperly admitted into evidence because it was not made voluntarily. Any challenge to the introduction of the videotaped statement, however, has been waived. Before trial, defendant moved to suppress only an oral statement he made to police. Defense counsel advised the trial court that "we chose, as part of our trial strategy, not to file a motion to suppress the videotaped statement". At the close of the state's evidence, defendant filed a motion requesting permission to introduce his post-arrest statements as defense evidence. The motion was denied. When the videotaped statement was introduced by the state to impeach defendant's testimony, defense counsel stated that he had no objection. Given defendant's trial strategy not to move to suppress the videotaped statement, his desire during trial to have the tape admitted, and his express consent to its admission by the state, he cannot now claim that the admission of the tape was erroneous. See State v. Crawley, 501 S.W.2d 31, 33 (Mo.1973). On its own initiative, the Court has examined the admission of the videotaped statement for plain error, Rule 30.20, and found none. That no manifest injustice could have resulted from the introduction of the videotaped statement is evidenced by defendant's desire to have his post-arrest statements admitted in his own behalf.
Defendant next challenges the constitutionality of Missouri's death penalty statutes on the ground that they are applied in a racially discriminatory manner. In support of this challenge defendant offered the following statistics. Of those individuals (excluding appellant) who have been sentenced to death in Missouri since 1977, 39% are non-white. Of these non-white death row inmates, 53% had white victims. Of the white death row inmates, 74% had white victims. Missouri's racial composition is 88.4% white and 11.6% non-white. Defendant asserts that these statistics indicate that non-whites are more likely to be sentenced to death than whites and that killers of whites are more likely to be sentenced to death than killers of non-whites. As a black defendant who killed a white victim, defendant further claims that these statistics demonstrate that he was discriminated against because of his race and because of the race of his victim. Therefore, defendant appears to conclude, Missouri's death penalty in general and his death sentence in particular violate the equal protection clause of the fourteenth amendment to the United States Constitution.
In order to establish an equal protection violation, a defendant must show an intent to discriminate. E.g., McCleskey v. Kemp, ___ U.S. ____, 107 S.Ct. 1756, 1766, 95 L.Ed.2d 262 (1987). Defendant's evidence to prove intentional discrimination in this case consists of statistics.[2] Statistics indicating a disparate impact seldom suffice to establish an equal protection claim. E.g., Adams v. Wainwright, 709 F.2d 1443, 1449 (11th Cir.1983), cert. denied, 464 U.S. 1063, 104 S.Ct. 745, 79 L.Ed.2d 203 (1984). See also McCleskey, 107 S.Ct. at 1767.
In McCleskey, the United States Supreme Court recently faced an equal protection challenge to Georgia's death penalty statutes, similar to the challenge here. The defendant attempted to prove intentional discrimination through the use of two sophisticated statistical studies that examined over 2000 murder cases that occurred in Georgia in the 1970's. Despite the intricate statistics, which indicated that *539 killers of white victims and black defendants were more likely to receive death sentences, the Court declined to infer a discrimination intent on the part of prosecutors in seeking the death penalty, on the part of juries in giving the death penalty, or on the part of the Georgia legislature in enacting and maintaining the death penalty statutes. 107 S.Ct. at 1768-70. Accordingly, the Court rejected the defendant's equal protection claim. Id. at 1769-70. The basis of the Court's decision was that prosecutors, juries, and legislatures are vested with discretion in the making of their decisions. Id. at 1768-70. "Because discretion is essential to the criminal justice process," the Court demands "exceptionally clear proof" before it will infer that the discretion has been abused. Id. at 1769. The proffered statistics did not provide the required "exceptionally clear proof". Id. at 1769-70.
Compared to the statistics introduced by the defendant in McCleskey, the statistics offered by the defendant here are superficial. Therefore, given that the McCleskey statistics were insufficient to establish an equal protection claim, the statistics offered here also are insufficient to establish such a claim.
In addition to defendant's specific constitutional challenge to Missouri's death penalty statutes on the ground of discriminatory application, he also challenges the inherent constitutionality of Missouri's death penalty statutes, under both the United States and Missouri Constitutions. This Court has repeatedly rejected constitutional challenges to Missouri's death penalty statutes and does so again now. See, e.g., State v. Driscoll, 711 S.W.2d 512, 517 (Mo. banc), cert. denied, ___ U.S. ____, 107 S.Ct. 329, 93 L.Ed.2d 301 (1986); State v. Newlon, 627 S.W.2d 606, 611-13 (Mo. banc), cert. denied, 459 U.S. 884, 103 S.Ct. 185, 74 L.Ed.2d 149 (1982).
Finally, defendant attacks the jury's imposition of the death penalty in this case. Defendant asserts that the sentence was imposed under the influence of prejudice and that the sentence is excessive and disproportionate to the penalty imposed in similar cases. These assertions will be considered within the Court's independent review of defendant's death sentence.
Section 565.035.3, RSMo 1986, mandates that the Court conduct an independent review of the imposition of all death sentences. That section requires the Court to determine:
(1) Whether the sentence of death was imposed under the influence of passion, prejudice, or any other arbitrary factor;
(2) Whether the evidence supports the jury's or judge's finding of a statutory aggravating circumstance as enumerated in subsection 2 of section 565.032 and any other circumstance found.
(3) Whether the sentence of death is excessive or disproportionate to the penalty imposed in similar cases, considering both the crime, the strength of the evidence and the defendant.
Defendant submits that his death sentence was imposed under the influence of passion, prejudice, and the arbitrary factor of his race.
Defendant's attack upon the motivations of the jurors in this case is supported by no direct evidence. There is, however, direct evidence that the jurors were not motivated by racism. During voir dire, the defense counsel questioned all potential jurors concerning their relationship and experience with blacks and whether those relationships and experiences would impair their ability to give defendant a fair trial. Out of a panel of approximately 80 persons, all but three testified, either by express statement or by silence to the defense counsel's questions, that they would have no problem in judging this case on the evidence without regard to race. The three who indicated that their racial views might impede them in judging the case fairly were excused for cause. There is no hint in the record that the venirepersons testified falsely or that race was a factor in the jury's decision.
Lacking any other evidence, defendant urges that this Court assume racial bias because, while he is black and his victim was white, the county in which he was tried *540 had no black residents, which resulted in a jury panel without blacks. Defendant also contends that racial prejudice on the part of the jury is apparent from a comparison of this case with State v. Tate, 731 S.W.2d 846 (Mo.App.1987), in which a white defendant who shot a highway patrol trooper received a sentence of life imprisonment, and with other capital cases.
The Court declines to infer racial prejudice on the part of a jury which sentences a black killer of a white victim to death simply because that jury was drawn from a county which has no black residents. To hold that racial prejudice on the part of a jury may be inferred from the absence of members of the defendant's race on the jury would be, in practical effect, to hold that the defendant has a right to members of his race on the jury. A defendant, however, has no right to a jury of any particular racial composition. Taylor v. Louisiana, 419 U.S. 522, 538, 95 S.Ct. 692, 701, 42 L.Ed.2d 690 (1975); State v. Blair, 638 S.W.2d 739, 753 (Mo. banc 1982), cert. denied, 459 U.S. 1188, 103 S.Ct. 838, 74 L.Ed.2d 1030 (1983).
It is possible that defendant's position is broader than the assertion that prejudice should be inferred just from the lack of blacks on the jury. Defendant's position may be that the trial of a black in a county with no black residents to serve on juries inherently results in a jury motivated by prejudice because the jury members likely have had no personal experience with blacks and thus can act only on misconceptions about and stereotypes of blacks. Defendant points to no evidence to support such a proposition. This position is, in fact, refuted by the statements of the potential jurors during voir dire. When asked about their relationships and experiences with blacks, many indicated that they had regular contact with blacks or had previously lived in communities which did have black residents. A number of others had known blacks in the past. Given these personal contacts with blacks by many on the venire, there is no reason to suspect that this jury acted any more out of misinformation and prejudice than would have a jury drawn from a multiracial county.
Additionally, it is noted that defendant's trial occurred in the county in which it did, Schuyler County, as a result of defendant's own action. Because Trooper Froemsdorf was murdered in Perry County, he was originally held before the court in that county. Defendant moved for a change of venue, and this was granted, the case being transferred to Schuyler County. As Perry County is situated along the Mississippi River in Southeast Missouri and Schuyler County is located along the Iowa border, it can be assumed that venue was changed to Schuyler County in order to get the case moved as far north as possible to a county where reports of Trooper Froesmdorf's killing may have received less attention. There is not the slightest suggestion that race was a consideration in the decision to change the venue to Schuyler County. According to 1980 census statistics, Schuyler County contains 4964 white persons, 3 black persons. U.S. Bureau of Census, Census of Population and Housing (1980).
Just as no inference of racial prejudice on the part of the jury arises because of the racial composition of the county from which the jury was drawn, neither does such an inference arise from a comparison of this case with State v. Tate, 731 S.W.2d 846 (Mo.App.1987).[3]Tate and this case are superficially similar in that both involve defendants who killed highway patrol troopers. On this superficial level, the primary differences are that defendant here is black and received a death sentence while the defendant in Tate was white and received a sentence of life imprisonment. Defendant reasons that, because the offenses were identical, the disparate sentences can be explained only by reference to the race of the defendants.
*541 The explanation for the disparate sentences, however, far from being due to racial prejudice on the part of the jury, is found in the differences in the nature of the respective defendants. Up to the time of Tate's trial, he had never been convicted of any criminal offense. The only evidence before the jury of any prior criminal activity by Tate was testimony that he was wanted on an unspecified felony warrant at the time of his offense and that illegal weapons were present in his vehicle when he killed the highway patrol trooper. By contrast, defendant in this case had six felony convictions prior to the time he shot Trooper Froemsdorf and a substantial history of other criminal activity, including incidents of resisting arrest, the writing of $20,000 worth of bad checks to support a drug habit, the brandishing of a sawed-off shotgun in a residential area, and the commission of an armed robbery shortly before the murder of Trooper Froemsdorf. Another major distinction between Tate and the defendant here is that Tate, from at least the age of 13, was heavily influenced by and immersed in a militant and fanatical religious sect which justified violence as an appropriate defense when a member's freedom was threatened and which described members who were arrested as prisoners of war. In defense of Tate, it was argued that he was so influenced by this sect that he was not completely responsible for his actions. Extensive psychiatric testimony supported this theory. It was reasonable for the jury in Tate's trial to decline to impose the death penalty upon that misguided defendant. In comparison, defendant in this case was raised in a more typical environment. He grew up in a home free from abuse and neglect. Despite his supportive family, defendant, now 28, has engaged in numerous criminal forays since the age of 20. There is nothing to suggest that these forays were not the result of defendant's conscious and individual choice. Finding defendant guilty of deliberately killing Trooper Froemsdorf, the jury in this case was justified in imposing the death penalty. Far from being the result of racial prejudice, defendant's death sentence justifiably lays him in a bed of his own making.
Comparison of this case with other first degree murder cases in which the jury decided between sentences of death or life imprisonment also does not give rise to any inference that this defendant's death sentence was imposed under the influence of racial prejudice. On four occasions, excluding this case, a jury has been faced with the choice of whether to impose the death penalty or a life sentence upon a black defendant who has been found by it to be guilty of the first degree murder of a white law enforcement or corrections officer. See State v. Baker, 636 S.W.2d 902 (Mo. banc 1982), cert. denied, 459 U.S. 1183, 103 S.Ct. 834, 74 L.Ed.2d 1027 (1983); State v. Shaw, 636 S.W.2d 667 (Mo. banc), cert. denied, 459 U.S. 928, 103 S.Ct. 239, 74 L.Ed.2d 188 (1982); State v. Thomas, 625 S.W.2d 115 (Mo.1981); State v. Lomax, 712 S.W.2d 698 (Mo.App.1986). The death penalty was imposed in Baker and Shaw. Life sentences were imposed in Thomas and Lomax. Comparing these cases with each other and with this case indicates no racial prejudice in the decision here but does indicate that juries are quite capable of considering the full range of punishment and of imposing just sentences in cases such as this one. There are also two cases involving the first degree murder of black police officers in which the choice of death or life imprisonment was submitted to the jury. See State v. McDonald, 661 S.W.2d 497 (Mo. banc 1983), cert. denied, 471 U.S. 1009, 105 S.Ct. 1875, 85 L.Ed.2d 168 (1985); State v. Sargent, 702 S.W.2d 877 (Mo.App. 1985). The defendant in McDonald received the death penalty. The defendant in Sargent received a life sentence. The lesson from these two decisions is that juries are no more severe when the victim is a white law enforcement officer than they are when the victim is a black law enforcement officer.
The Court's conclusion with respect to the first prong of our independent review pursuant to § 565.035.3 is that defendant's sentence of death was not imposed under the influence of racial prejudice. Further, there is nothing in the record to suggest *542 that the sentence resulted otherwise from the influence of passion, prejudice, or any other arbitrary factor.
Turning to the second prong of § 565.035.3, the Court finds substantial evidence to support the jury's finding of the existence of the three submitted statutory aggravating circumstances. The evidence leaves no question that Trooper Froemsdorf was a peace officer killed while engaged in the performance of his official duties. The jury was justified in finding from the evidence that defendant slipped out of handcuffs and attacked Trooper Froemsdorf immediately prior to shooting him and thus that the murder was committed by a person who had escaped from the lawful custody of a peace officer. The evidence that defendant repeatedly beat Trooper Froemsdorf across the face with his still handcuffed left hand, that defendant temporarily incapacitated the trooper by firing a shot into the trooper's bulletproof vest, and that defendant took advantage of this temporary incapacity by pumping not one, but two, .357 magnum slugs through the helpless trooper's neck, provided justification for the jury's finding that the murder was outrageously or wantonly vile, horrible, or inhuman in that it involved depravity of mind. See State v. Newlon, 627 S.W.2d 606, 622 (Mo. banc), cert. denied, 459 U.S. 884, 103 S.Ct. 185, 74 L.Ed.2d 149 (1982).
In relation to the final prong of the Court's independent review of defendant's death sentence, defendant argues that the imposition of the death sentence in this case is excessive and disproportionate to the penalty imposed in similar cases, considering the crime, the strength of the evidence, and the defendant.
Defendant relies heavily on State v. Tate, 731 S.W.2d 846 (Mo.App.1987), to establish his claim that his death sentence is excessive and disproportionate. As stated above, Tate involved a defendant who received a life sentence after being convicted of the first degree murder of a highway patrol trooper. Even if this case and Tate were factually equivalent, this fact alone would not aid defendant. Any capital sentencing scheme may occasionally produce an aberrational outcome. Pulley v. Harris, 465 U.S. 37, 54, 104 S.Ct. 871, 881, 79 L.Ed.2d 29 (1984); State v. Gilmore, 681 S.W.2d 934, 946 (Mo. banc 1984). The issue when determining the proportionality of a death sentence is not whether any similar case can be found in which the jury imposed a life sentence, but rather whether the death sentence is excessive or disproportionate in light of "similar cases" as a whole. See § 565.035.3(3). In any event, there are substantial distinctions, discussed above, between this case and Tate which completely undercut defendant's argument that his sentence is excessive and disproportionate when compared with the sentence in Tate.
The Court has also reviewed the other cases in which the defendant was found guilty of the first degree murder of a law enforcement or corrections officer and in which the jury was given the choice of imposing either the death penalty or a life sentence. See State v. Driscoll, 711 S.W.2d 512 (Mo. banc) (death sentence), cert. denied, ___ U.S. ____, 107 S.Ct. 329, 93 L.Ed.2d 301 (1986); State v. Roberts, 709 S.W.2d 857 (Mo. banc) (death sentence), cert. denied, ___ U.S. ____, 107 S.Ct. 427, 93 L.Ed.2d 378 (1986); State v. McDonald, 661 S.W.2d 497 (Mo. banc 1983) (death sentence), cert. denied, 471 U.S. 1009, 105 S.Ct. 1875, 85 L.Ed.2d 168 (1985); State v. Davis, 653 S.W.2d 167 (Mo. banc 1983) (life sentence); State v. Baker, 636 S.W.2d 902 (Mo. banc 1982) (death sentence), cert. denied, 459 U.S. 1183, 103 S.Ct. 834, 74 L.Ed.2d 1027 (1983); State v. Shaw, 636 S.W.2d 667 (Mo. banc) (death sentence), cert. denied 459 U.S. 928, 103 S.Ct. 239, 74 L.Ed.2d 188 (1982); State v. Thomas, 625 S.W.2d 115 (Mo.1981) (life sentence); State v. Lomax, 712 S.W.2d 698 (Mo.App.1986) (life sentence); State v. Carr, 708 S.W.2d 313 (Mo.App.1986) (life sentence); State v. Sargent, 702 S.W.2d 877 (Mo.App.1985) (life sentence); State v. Stephens, 672 S.W.2d 714 (Mo.App.1984) (life sentence). Defendant's beating of Trooper Froemsdorf with his own handcuffs and his subsequent decision to fire two slugs through *543 the trooper's neck while the trooper was temporarily incapacitated rather than to take the opportunity to flee make this murder at least as heinous as those murders of law enforcement or corrections officers which resulted in death sentences. Defendant's extensive history of criminal activity distinguishes him from the defendants in the life sentence cases of Sargent, Stephens and Davis. The life sentence cases of Lomax and Carr are distinguishable from this case in that both Lomax and Carr killed in participation with others and the evidence was inconclusive as to who dealt the death blow. The defendant in the life sentence case of Thomas differs from defendant here in that Thomas' I.Q. was significantly lower than that of defendant here and there was also more substantial evidence of mental illness on the part of Thomas than there was on the part of defendant here. After examining these cases involving the murder of law enforcement and corrections officers and comparing them to this case, the Court concludes that the sentence in this case is neither excessive nor disproportionate.
The judgment is affirmed.
HIGGINS, C.J., RENDLEN, J., and SMITH, Special Judge, concur.
BLACKMAR and DONNELLY, JJ., dissent in separate opinions.
WELLIVER, J., dissents and concurs in dissenting opinion of DONNELLY, J.
ROBERTSON, J., not sitting.
BLACKMAR, Judge, dissenting.
I.
I believe that MAI-CR2d 3.42 (then in effect) should have been given as requested. The evidence of the essential elements of premeditation and deliberation was wholly circumstantial. The defendant's admission as set out in the principal opinion simply showed that he was present at the scene and that he fired shots after a struggle in which he wrestled the gun from the officer. If the jury believed his statement, conviction of first degree murder would be very doubtful.
As the principal opinion indicates, our decisions have announced in general terms a rule that, whenever both direct and circumstantial evidence are presented, MAI-CR2d 3.42[1] need not be given. The principal opinion apparently would apply this rule expansively, so that the instruction is not required if there is any direct evidence of any element of the offense. This goes beyond the case law. In State v. Griffin, 662 S.W.2d 854 (Mo. banc 1983), cert. denied, 469 U.S. 873, 105 S.Ct. 224, 83 L.Ed.2d 153 (1984), cited in the principal opinion, there was eyewitness testimony to the shooting. That case relied on State v. Baldwin, 571 S.W.2d 236 (Mo. banc 1978), in which the knife which was the subject of the charges was found concealed on the defendant's person. In other cases announcing the rule relied on in the principal opinion, there was also stronger direct evidence to support the convictions than was present in this case. E.g., State v. Stevens, 467 S.W.2d 10, 25 (Mo.), cert. denied, 404 U.S. 994, 92 S.Ct. 531, 30 L.Ed.2d 546 (1971); State v. Aubuchon, 394 S.W.2d 327, 336 (Mo.1965); State v. Spica, 389 S.W.2d 35, 52-53 (Mo.1965), cert. denied, 383 U.S. 972, 86 S.Ct. 1277, 16 L.Ed.2d 312 (1966); State v. Tallie, 380 S.W.2d 425, 429 (Mo.1964); State v. Loston, 234 S.W.2d 535, 538 (Mo.1950).
The principal opinion sets out a lengthy chain of circumstances supporting the findings of deliberation and premeditation. It also demonstrates in detail circumstances showing that the defendant's explanation was unreasonable and incredible. The jury should have been told that it had the duty of making the indicated comparison of competing theories.
It has sometimes been said that an instruction along the lines of 3.42 might confuse the jury when there is direct evidence. There would be no confusion in this case because the jury was obliged to analyze evidence which was purely circumstantial *544 before it could find guilt of first degree murder. The instruction would be helpful to the jury and it should have had the benefit of it.
I can understand that the trial judge may have thought, from the Notes on Use, that he was not obliged to give this instruction,[2] but when the state seeks to take a life, the defendant should be afforded all available procedural safeguards.
II.
For the reasons above assigned I am of the opinion that the case should be reversed and remanded for new trial, and so I would not reach the issue of proportionality review under § 565.035.2 and .3, RSMo 1986. Since the Court considers the point I vote for a mitigation of the sentence.
The comparison to the Tate case is patent. The principal opinion refers to this defendant's other convictions as a distinguishing feature. Balanced against those are Tate's having shot and seriously wounded a second trooper with intent to kill and his involvement in an incipient armed insurrection against the United States and the State of Missouri.
There is an inherent conflict between jury sentencing and proportionality review. In Furman v. Georgia, 408 U.S. 238, 92 S.Ct. 2726, 33 L.Ed.2d 346 (1972), the Court majority was disturbed about disparity in the application of capital punishment under existing statutes. Gregg v. Georgia, 428 U.S. 153, 96 S.Ct. 2909, 49 L.Ed.2d 859 (1976), considered that the modified statutes there considered would introduce elements of objectivity and uniformity into the administration of capital punishment and so once again allowed the states to reinstitute it. Now, in McCleskey v. Kemp, ___ U.S. ____, 107 S.Ct. 1756, 95 L.Ed.2d 262 (1987), the Court majority appears to recognize that disparities are inevitable and seems to take a position of indifference. Our duty under § 565.035 is not limited to the minimum that the Supreme Court of the United States might allow. We should strive to make sure that essentially similar offenses are similarly punished. Although the first degree murder of a law enforcement officer is a statutory aggravating circumstance supporting the death penalty, juries have reached divided conclusions in cases in which this circumstance is present.[3]
The racial question also impacts the issues. It is unfortunate that the judge initially assigned sent the case to a county in which there were no black residents available for jury service. I have every confidence that he did this for the sole reason that he wanted to get the case a long way away from Perry County, as the defendant requested, and without any racial motivation whatsoever. When the problem was called to the attention of the successor judge, however, I believe that the case should have been transferred to another county. We should be mindful of appearances when life is at stake. I do not suggest that the jurors of Schuyler County did not do their duty as they saw it, nor do I argue that a defendant is entitled to have persons of his own race on the panel. But the appearances remain.
I would exercise our duty to "consider the punishment" pursuant to § 565.035.2 by reducing the sentence to life imprisonment without probation or parole. In addition to the factors discussed earlier, I give attention to the nature of the homicide, which, although it could be found to be deliberate by the rather legal standard defining that term, was nevertheless quite impulsive.
The judgment should be reversed as to guilt and punishment and the case remanded for new trial.
*545 DONNELLY, Judge, dissenting.
Whenever the death penalty is imposed in any case, "the sentence shall be reviewed on the record by the supreme court of Missouri" and this Court must determine whether such sentence "was imposed under the influence of passion, prejudice, or any other arbitrary factor * * *." § 565.035, RSMo 1986.
In Godfrey v. Georgia, 446 U.S. 420, 428, 100 S.Ct. 1759, 1764, 64 L.Ed.2d 398 (1980), the Court held "that if a State wishes to authorize capital punishment it has a constitutional responsibility to * * * apply its law in a manner that avoids the arbitrary and capricious infliction of the death penalty." And the Court held that a death sentence cannot be permitted to stand when the circumstances under which it was imposed "create a substantial risk that the punishment will be inflicted in an arbitrary and capricious manner." 446 U.S., at 427, 100 S.Ct., at 1764.
Given the circumstances in this case, I would set the judgment aside and resentence appellant to life imprisonment without eligibility for probation, parole, or release except by act of the governor.
I respectfully dissent.
NOTES
[1] Although MAI-CR 3d was not effective at the time of the offense on trial in this case, it does make clear why MAI-CR 2d 2.28, an instruction form on accident, was withdrawn effective October 1, 1984, five months before the offense here.
[2] Defendant's further allegation that intent to discriminate is shown by a comparison of this case with State v. Tate, 731 S.W.2d 846 (Mo.App. 1987), is answered in this Court's review of defendant's death sentence pursuant to § 565.035, RSMo 1986.
[3] This opinion may refer to some facts about Tate and other capital cases, in its comparison of those case with this one, which are not apparent from the opinions in those cases (such as the race of the defendant or victim). These facts have been gleaned from the records of capital cases which this Court keeps pursuant to § 565.035.6, RSMo 1986.
[1] Now MAI-CR3d 310.02.
[2] 2. This instruction may be given even if there is some direct evidence of guilt, though it need not be given at all unless the evidence is wholly circumstantial.
[3] Compare State v. Thomas, 625 S.W.2d 115 (Mo.1981), State v. Lomax, 712 S.W.2d 698 (Mo. App.1986), State v. Sargent, 702 S.W.2d 877 (Mo. App.1985), State v. Stephens, 672 S.W.2d 714 (Mo.App.1984) (life sentence cases) with State v. McDonald, 661 S.W.2d 497 (Mo. banc 1983), cert. denied, 471 U.S. 1009, 105 S.Ct. 1875, 85 L.Ed.2d 168 (1985) and State v. Baker, 636 S.W.2d 902 (Mo. banc), cert. denied, 459 U.S. 1183, 103 S.Ct. 834, 74 L.Ed.2d 1027 (1982) (death sentence cases). In McDonald, the police officer was recognized as such by the defendant, even though he was not on duty.
| {
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Supreme Court
No. 2015-305-M.P.
(K1/14-79A)
State :
v. :
John Cavanaugh. :
NOTICE: This opinion is subject to formal revision before
publication in the Rhode Island Reporter. Readers are requested to
notify the Opinion Analyst, Supreme Court of Rhode Island,
250 Benefit Street, Providence, Rhode Island 02903, at Telephone
222-3258 of any typographical or other formal errors in order that
corrections may be made before the opinion is published.
Supreme Court
No. 2015-305-M.P.
(K1/14-79A)
State :
v. :
John Cavanaugh. :
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.
OPINION
Justice Goldberg, for the Court. This case came before the Supreme Court on
February 23, 2017, on a writ of certiorari by the defendant, John Cavanaugh (defendant), from
judgments of conviction entered in the Superior Court, following a jury trial.1 The defendant
was convicted of one count of first-degree sexual assault and four counts of second-degree child
molestation sexual assault.
Before this Court, defendant argues that the Superior Court justice committed reversible
error in: (1) failing to strike testimony about defendant’s interaction with certain family members
after the sexual assault allegations came to light and then failing to give an adequate cautionary
instruction to the jury; (2) denying defendant’s motion to pass the case after the state alluded to
an “empty chair” during cross-examination of defendant and during closing argument; (3) failing
to exclude the victim’s testimony that she had witnessed defendant inappropriately touching a
family friend after she could not be located in order to corroborate the allegation; and (4)
1
Common law certiorari was granted by this Court after defendant failed to file a timely appeal.
-1-
denying defendant’s motion for judgment of acquittal on two of the counts in the indictment.
For the reasons set forth herein, we affirm the judgments of conviction.
Facts and Travel
On June 20, 2013, the victim, Danielle M. (Danielle),2 decided to “stand[] up for
[her]self” by contacting the Warwick Police Department and reporting that defendant, her uncle,
had sexually abused her, when she was between six and fifteen years old. She claimed that she
was no longer “that scared little girl anymore.” On January 28, 2014, an indictment was
returned, charging defendant with one count of first-degree sexual assault in violation of G.L.
1956 § 11-37-2 and four counts of second-degree child molestation sexual assault in violation of
§ 11-37-8.3. The case was tried before a jury in November 2014.3
The sexual abuse recounted in this case began at a family cookout in Warwick, Rhode
Island.4 Danielle, who was between the ages of eight and ten, was living with her mother’s
family, her grandmother, aunt, Carol C. (Carol), uncle, defendant, and cousin, John C. (John), in
Warwick. Danielle testified that, when she came into the house in her bathing suit, she
encountered defendant, who was in the living room. The defendant asked Danielle to sit on his
lap, and then “he put his hand down in front of [her] bathing suit and began touching [her]
vaginal area in a circular motion while kissing [her] neck and the side of [her] face.” This
continued for approximately one or two minutes. The defendant also told Danielle that she was
going to be “a beautiful girl when [she] got older.” Danielle also testified that, during this same
2
For the sake of privacy, the parties will be referred to by their first names.
3
The case was originally tried in September 2014, but a mistrial was declared when the jury was
unable to reach a verdict.
4
Danielle also recounted two occasions of sexual abuse that occurred while she was living in
Massachusetts; she was approximately six years old at that time.
-2-
family cookout, she saw defendant in her bedroom with a child named Rosemary, who was a
close family friend and who lived in the same building.5 Danielle stated that she observed
defendant “doing the same thing to [Rosemary]” that he had done to her earlier that day.
However, despite diligent efforts by the police, Rosemary could not be located. Warwick Police
Detective Shaun Turcotte testified regarding the efforts he undertook to locate Rosemary, to no
avail.
On another occasion, Danielle testified that she and John—defendant’s son—were
playing in the family living room when defendant placed a blanket over the two cousins and
“told [them] that [they] could touch each other if [they] wanted to.” The defendant then put John
to bed and joined Danielle in the living room. According to Danielle, defendant placed his hand
inside her underwear and “began doing the same thing as the other times, moving his hand
around in a circular motion.” He again commented on Danielle’s beauty and kissed her face and
neck.
The next incident occurred when Danielle was around thirteen years of age when she and
defendant were watching a movie in defendant’s bed. The defendant placed a comforter over
Danielle, put his hand up her shirt, and began touching her breast and areola. He also “put his
hand down [Danielle’s] pants and * * * began doing the same thing as the other times.” The
final incident occurred after Danielle and her family moved to East Providence when she was
around age fifteen. Danielle was spending the night at defendant’s house because his home was
closer to her school. She recalled that she was lying on the floor and watching television when
defendant “got down on the floor” and grabbed her chest over her clothes. The defendant then
5
Danielle testified that Rosemary was approximately three years older than she.
-3-
unbuttoned Danielle’s pants and inserted his finger into her vagina. She then rolled onto her
stomach in order to avoid this assault.6
Danielle initially attempted to tell her cousin, Jeffrey L. (Jeff), about the abuse when she
was between the ages of eight and ten. Jeff testified at trial and corroborated this testimony, but
added that Danielle indicated “that she was joking as like a way so as [he] wouldn’t tell
anybody.” Many years later, on Christmas Eve 2010, when Danielle was having relationship
issues, Danielle’s mother, Audrey R. (Audrey), asked Danielle if she had ever been abused by
anyone. Audrey testified that she began naming male figures in Danielle’s life; when Audrey
named defendant, Danielle “just looked at [her].” Although she denied having sexual intercourse
with defendant, Danielle would not divulge much more. When defendant’s wife, Carol, who is
Audrey’s sister, telephoned on Christmas Day, Audrey confronted defendant, stating: “I know
what you did to my daughter. * * * I know what you did to my daughter when she was younger.”
When Carol asked him what they were talking about, defendant responded, “She’s saying I
molested Danielle.” Audrey testified that she never used the word “molested” when she
confronted defendant. The two families never spoke again. At trial, defendant testified and
acknowledged that the families became estranged after the allegations, but he denied that he had
sexually assaulted Danielle.
The defendant was convicted of all counts in the indictment. The Superior Court justice
denied defendant’s motion for a new trial and sentenced defendant to life in prison for first-
degree sexual assault, and ten years suspended, to run concurrently with the life sentence, on the
remaining counts of second-degree child molestation.
6
Because this act involved sexual penetration, defendant was charged with first-degree sexual
assault pursuant to G.L. 1956 § 11-37-2.
-4-
Because no timely appeal was taken in this case, defendant filed a petition for writ of
certiorari, which this Court granted on October 20, 2015.
Standard of Review
“In reviewing the admission or exclusion of evidence, it is well settled that ‘[t]he
admissibility of evidence is within the sound discretion of the trial justice, and this Court will not
interfere with the trial justice’s decision unless a clear abuse of discretion is apparent.’” State v.
Peltier, 116 A.3d 150, 153 (R.I. 2015) (quoting State v. Clay, 79 A.3d 832, 838 (R.I. 2013)). It is
likewise established “that a decision to pass a case and declare a mistrial are matters left to the
sound discretion of the trial justice.” State v. Dubois, 36 A.3d 191, 197 (R.I. 2012) (quoting
State v. Barkmeyer, 949 A.2d 984, 1007 (R.I. 2008)). “We often have stated that ‘the trial
justice has a front row seat during the trial so that he can best evaluate the effects of any
prejudice on the jury.’” Id. (quoting Barkmeyer, 949 A.2d at 1007). “The ruling of the trial
justice * * * is accorded great weight and will not be disturbed on appeal unless clearly wrong.”
Id. (quoting Barkmeyer, 949 A.2d at 1007).
“When passing on ‘a trial justice’s denial of a motion for judgment of acquittal, this
Court applies the same standard as the trial justice.’” State v. Long, 61 A.3d 439, 445 (R.I.
2013) (quoting State v. Lynch, 19 A.3d 51, 56 (R.I. 2011)). “A motion for a judgment of
acquittal should be granted only if the evidence, viewed in the light most favorable to the
prosecution, is insufficient to establish the defendant’s guilt beyond a reasonable doubt.” Id.
(quoting State v. Heredia, 10 A.3d 443, 446 (R.I. 2010)). “If, however, a reasonable juror could
find the defendant guilty beyond a reasonable doubt, the motion should be denied.” Id. (quoting
Heredia, 10 A.3d at 446).
-5-
Analysis
Motions to Pass the Case
The defendant twice moved to pass the case and argued that the state improperly alluded
to defendant’s failure to produce evidence. First, defendant directs our attention to the state’s
cross-examination of defendant concerning his wife and son and the fact that they did not contact
authorities after the sexual assault allegations were made. According to defendant, this
questioning improperly suggested that defendant bore a burden to produce evidence in this case,
such that a mistrial was warranted. However, only the cross-examination concerning defendant’s
wife was preserved for appellate review. The record discloses that during cross-examination of
defendant, the state asked about defendant’s interaction with his son, John. Because there was
no objection to this line of questioning, we deem this issue waived.
Turning to the cross-examination concerning defendant’s wife, the following colloquy
occurred:
“Q. And you’ve talked to your wife since this?
“A. Yes.
“Q. Did you ever tell your wife to give a statement to Detective
Turcotte?
“[DEFENSE COUNSEL]: Objection
“THE COURT: Overruled. You can answer yes or no.
“A. I didn’t have to tell them.
“Q. She didn’t give a statement to Detective Turcotte; right?
“A. He never called her. I sent her the transcripts of the
courthouse, of everything that was said. She knows
everything that is happening in this court.
“Q. So you sent her all the transcripts of all the testimony from
the prior hearings?
-6-
“A. Yes, I did.
“Q. Okay. And after she received that, she didn’t contact the
Warwick Police; right?
“A. No, they didn’t contact her.
“Q. She didn’t contact my office?
“A. You didn’t either.
“Q. But she didn’t contact us either?
“A. No.
“[DEFENSE COUNSEL]: Judge, I object and I have a
motion.
“THE COURT: Actually, it’s asked and answered. I’m
going to sustain the last [objection].” (Emphasis added.)
After the Superior Court justice sustained the objection, defendant did not ask to have
the answer stricken. The defendant did move to pass the case and argued that the questioning
shifted the burden of proof by creating an impression that defendant had an obligation to produce
evidence. After the Superior Court justice declined to declare a mistrial, defendant moved to
strike all of the testimony related to defendant’s son and wife. We decline to review that portion
of the motion that relates to defendant’s son because this testimony came in without objection,
and thus, the issue was waived. See State v. Fry, 130 A.3d 812, 826 (R.I. 2016) (“[W]hether
strategic or not, [the] defendant’s failure to object places her plaint toward the [prosecutor’s]
questions squarely within our ‘raise-or-waive’ rule and, thus, her contention with regard to these
* * * questions is not preserved for our review.”); State v. Moreno, 996 A.2d 673, 684 (R.I.
2010) (holding that the defendant did not object to the trial justice’s exclusion of certain
evidence, thereby waiving the argument on appeal); State v. Merced, 933 A.2d 172, 174 (R.I.
-7-
2007) (“[A]lleged errors ‘not specifically objected to at trial—that is, by an objection that is
sufficiently focused so as to call the trial justice’s attention to the basis for said objection—are
not preserved for consideration by this court on appeal.’” (quoting State v. Brown, 709 A.2d 465,
477 (R.I. 1998))).
Turning to the colloquy concerning defendant’s wife, we begin by recognizing that when
defense counsel objected to the state’s inquiry about whether his wife gave a statement to police,
the trial justice directed defendant to answer “yes or no.” However, defendant proceeded to give
a substantive answer to which no objection was made. It was only after the fifth question was
asked and answered that defendant offered an objection, which the trial justice sustained.
“In the context of the examination of a witness at trial, ‘[w]e give considerable latitude to
a trial justice’s rulings.’” State v. Mann, 889 A.2d 164, 166 (R.I. 2005) (quoting State v. Gomez,
848 A.2d 221, 237 (R.I. 2004)). We are not persuaded that the trial justice abused his discretion
in declining to strike the testimony. “A defendant may be cross-examined not only on the basis
of what he specifically states by way of factual information but also in respect to the inferences
and conclusions that would naturally and probably be drawn from such testimony.” State v.
Filuminia, 668 A.2d 336, 338 (R.I. 1995) (citing State v. McDowell, 620 A.2d 94 (R.I. 1993)).
The defendant was questioned on direct examination about his home on Washington Street in
Warwick; it was defendant’s contention on direct examination that he did not know whether
Danielle had ever visited that house when his wife lived there alone. When the state asked
about an assault that occurred on Washington Street, defendant flatly declared that the incident
“could [have] never happen[ed]” because “Danielle ha[d] never been in [that house].” The
prosecutor then asked whether it was also Danielle’s testimony that defendant’s wife, Carol, was
present. We are satisfied that this questioning was not a reference into defendant’s failure to
-8-
produce evidence, but that this inquiry had a bearing on defendant’s credibility. In State v.
D’Alo, 435 A.2d 317, 320 (R.I. 1981), this Court declared that “[a]ny defendant in a criminal
trial who testifies in his own behalf runs the risk of having his credibility impeached. By
testifying, he places his own credibility in issue.”
A careful review of the cross-examination also reveals that it was defendant who
volunteered information and argued with the prosecutor. As noted, when the trial justice directed
defendant to answer “yes or no,” he did not do so. Also, when defendant was asked whether his
wife gave a statement to police, defendant countered that it was the police who never contacted
his wife, but that he had sent “the transcripts of the courthouse, of everything that was said.” He
continued, stating that his wife “kn[e]w[] everything that [was] happening in * * * court.”
When the prosecutor asked if his wife had contacted authorities after she received the transcript,
defendant’s response was that no one had contacted her. By volunteering these answers,
defendant opened the door to further inquiry. See State v. Rosario, 14 A.3d 206, 217, 218 (R.I.
2011) (affirming the denial of a motion to pass and recognizing that “[the] defendant chose to do
more than answer the question that had been asked” by answering “with an extremely broad and
unqualified declaration,” thereby “open[ing] the door”).
Moreover, in order to eliminate any potential prejudice, the trial justice gave a
comprehensive cautionary instruction to the jury. At the end of the state’s cross-examination of
defendant, the trial justice instructed the jury as follows:
“I want to go through with the jury something that I said at the
very beginning of the trial and I want to emphasize now and that’s
the issue of burden of proof. Certainly this jury can consider all of
the evidence and testimony before it by any of the witnesses in the
case itself, but the burden of proving the defendant guilty rests and
only rests with the State.
“For example, there was certain testimony that the jury
-9-
could consider about the defendant’s wife and the defendant’s son
and the jury can consider that. However, the burden of proof never
shifts. So, for example, the jury can’t say, well, why wasn’t
someone else called as a witness by the defendant because the
defendant has no obligation to put on any evidence. It’s the State’s
obligation to put on the evidence.
“I will go through at the end as well, but I just wanted to
remind you it’s the State’s burden. Certainly, all the evidence that
you hear can be used for the jury to consider, the believability of
the witness, what to consider, what not to consider as fact. I just
wanted to make that point. I will be going through that in more
detail in the closing instructions. This comes up often in cases
where the defendant chooses to take the stand.”
Defense counsel did not object to this instruction. We are satisfied that this cautionary
instruction was more than sufficient to cure any potential prejudice in these circumstances.
Because we conclude that the trial justice did not commit error in denying the motion to strike, it
goes without saying that the trial justice likewise did not err in denying the motion for a mistrial
in relation to this questioning.
The defendant again moved for a mistrial after the prosecutor made the following
comments during closing argument:
“And I want to talk to you about his actions after that
because I asked him about, ‘Did you ask your son John to give a
statement to Detective Turcotte?’ And he said no. And [defense
attorney] said, [w]ell, his son wouldn’t have anything to add.
Danielle is claiming his son was there when he put the blanket over
her and his son. But he didn’t tell his son to go to the police. He’s
claiming that Danielle never went to that house on Washington
Street. His wife would know that, but he never asked her to give a
statement to the police and tell them, no, Danielle was never in that
house. He never did that. His actions are not the actions of an
innocent person. They’re the actions of somebody whose secret
finally caught up with him. He finally came face to face with it.”
The Superior Court justice refused to pass the case, noting that defendant elected to testify in this
case. He explained that he already gave a cautionary instruction concerning the burden of proof
and informed the jury that closing arguments are not evidence; he additionally stated that he
- 10 -
would discuss the burden of proof as part of his customary instructions with some additional
language.7
The defendant posits that the prosecutor’s remarks during closing argument, coupled with
the testimony on cross-examination, amount to an improper reference to an “empty chair.” He
directs our attention to State v. Taylor, 425 A.2d 1231 (R.I. 1981) and its progeny. In Taylor, we
held that State v. Jefferson, 116 R.I. 124, 353 A.2d 190 (1976), “forbids prosecutorial comment
on the failure of a defendant to present witnesses.” Taylor, 425 A.2d at 1234. Comments of this
nature are considered inflammatory because they may suggest that the defendant has a burden to
produce evidence or that “[the] defendant did not call the witnesses because he knew their
testimony would be unfavorable.” Id. at 1234-35 (quoting Jefferson, 116 R.I. at 139, 353 A.2d at
199). It is well-settled that, although the state may make reference to the quality of a defendant’s
evidence, it is impermissible to imply that a “defendant was required to offer evidence in his own
defense.” State v. Williams, 656 A.2d 975, 980 (R.I. 1995).
However, this Court also has declared that potential prejudice from improper comments
7
The Superior Court justice instructed the jury as follows:
“Always bear in mind that the defendant does not have to
prove or disprove anything, nor does a defendant have any
obligation to disprove that which the State asserts or claims. The
defendant has no obligation to call any witnesses, and you may not
speculate upon what another witness who did not testify may have
said during the course of the proceedings.
“The burden of proof is on the State from the beginning to
the end of the trial. It never shifts. It is the State which has the
burden of proof beyond a reasonable doubt to prove each and
every element of the offenses under your consideration.
“* * *
“As I instructed you at the beginning of the trial, a defendant is
under no obligation to prove anything or present evidence.”
- 11 -
by the prosecutor may be cured by a timely and adequate cautionary instruction:
“[T]he cautionary instruction must (1) identify the prosecutor’s
conduct as improper[;] (2) unequivocally indicate that the jury
must disregard it[;] and (3) unequivocally indicate that since the
defendant has no duty to present witnesses or any other evidence,
his failure to do so cannot be construed as an admission that the
evidence, if produced, would have been adverse.” Taylor, 425
A.2d at 1235.
Although the cautionary instruction given in this case did not meet the Taylor standard, we are
satisfied that, in the context of this case, that precise instruction was unnecessary, because the
prosecutor’s comments during closing argument did not rise to the level of an improper reference
to an “empty chair.” It was defense counsel, during his final argument, who specifically called
attention to the state’s cross-examination of defendant:
“[The prosecutor] asked [defendant], ‘Did you tell your son
to give a statement to the police?’ First of all, since when is it
[defendant’s] responsibility? Why didn’t Detective Turcotte call
[defendant’s] wife? Why didn’t Detective Turcotte call
[defendant’s] son? He was in charge of this investigation. He had
the obligation of interviewing witnesses. That was his
responsibility. So why didn’t he do that? Is he interested in
finding the truth or is he interested in just getting a conviction?
The [s]tate has the burden of proving the case.
“But what does [the prosecutor] think that [defendant’s]
son or wife would be able to help in this case; right? Because
remember these allegations are from a period of when she was six
years old to fifteen, for nine years. Does he think they would be
able to get on the stand and say, oh, no, [defendant] was never
alone with Danielle * * *, never. Never happened. There was
always someone in the room with him; right? Because anything
short of that testimony is not compelling. And even if they said
that, it’s not believable. Think about your relationships, where
you’ve been, cookouts, parties, you’ve gone to friends or relative’s
parties. There are children there. Can you ever know for certain
that you were never alone with a child at any of those events, any
cookouts, any picnics, any parties, anything, can you, over a period
of nine years?
“So when the [s]tate says, ‘Why didn’t they call Detective
- 12 -
Turcotte[,] he should have called them and f[ou]nd out if they had
any information that would either help the [s]tate or hurt the [s]tate
because they’re supposed to investigate. They’re supposed to be
neutral. They’re not supposed to make up their mind about the
charge until they thoroughly investigate the case and he did not
call them, he did not meet with them, and he didn’t go down to
Florida to interview them.”
Clearly, defense counsel referenced the cross-examination of defendant and the failure of the
police to contact defendant’s wife and son, which he characterized as the state’s failure to
investigate. A prosecutor is permitted to respond to defense counsel’s remarks made during
closing argument. See State v. Valenti, 772 A.2d 127, 131 (R.I. 2001) (assigning no error to the
prosecutor’s response during his closing argument to statements made by defense counsel during
his closing).
“A prosecutor is given considerable latitude in closing argument, as long as the
statements pertain only to the evidence presented and represent reasonable inferences from the
record.” State v. Boillard, 789 A.2d 881, 885 (R.I. 2002). Here, the prosecutor’s comments
dovetailed a summary of defendant’s actions after the initial disclosure and were not comments
on defendant’s failure to produce evidence. See id. (“The probable effect of the prosecutorial
statements on the outcome of the case must be evaluated by examining the remarks in the context
in which they were made.” (citing State v. Brown, 522 A.2d 208, 211 (R.I. 1987))). In this case,
the prosecutor’s remarks specifically relate to defendant’s performance on the witness stand and
his interactions with his son and wife in the face of these disclosures.
The defendant draws our attention to cases of improper prosecutorial comment that are
not similar to the case at bar. In Taylor, 425 A.2d at 1234, the prosecutor argued to the jury that
“([t]he defendant) said his mother sent him money, his grandmother (sic). I didn’t see them
come in to testify. He raised that issue. I didn’t see them come in here[.] * * * Yet, he cannot
- 13 -
produce, or he did not make any effort to show us this girl (sic) that he bought the car from in
Tennessee.” Furthermore, in State v. White, 512 A.2d 1370, 1373 (R.I. 1986), the state, in
responding to defense counsel’s argument, told the jury that the defendant had failed to present a
variety of witnesses: “You didn’t hear from Carolyn Manfredi, that’s true. What do you know
about her? Girl friend of this Defendant. What would you expect her to say? * * * You heard
testimony about the LaFonds. What testimony did you hear? They were riding with this
Defendant. They were friends of the Defendant.” In State v. Turner, 561 A.2d 869, 873 (R.I.
1989), the state argued, “Where is Mr. Saunders? Why didn’t we hear from Mr. Saunders? * * *
That door has been open. The State doesn’t have a lock on that door[,]” and in State v. LaPointe,
525 A.2d 913, 914 (R.I. 1987), the state argued that “the defendant could have subpoenaed the
doctor to testify.” These cases are clear examples of improper arguments by the state. We are
satisfied that is not the case under review. Accordingly, we are of the opinion that the Superior
Court justice did not err in denying the motion for a mistrial in relation to the prosecutor’s
closing remarks. The record before us discloses that the jury was properly instructed on the
burden of proof on multiple occasions by the court.
We caution, however, that comments of this nature may approach the line of improper
prosecutorial conduct. In the case at bar, however, defendant elected to testify, placed his
credibility in issue, and then volunteered information about his wife. It was defense counsel who
discussed the state’s cross-examination of defendant during his closing remarks to the jury.
These circumstances persuade us that, while coming close to the line of reversible error, the
prosecutor did not cross it. However, we caution prosecutors to refrain from engaging in this
type of conduct and to bear in mind that the state always bears the burden of proof in a criminal
prosecution.
- 14 -
Rule 404(b) of the Rhode Island Rules of Evidence
The defendant assigns error to the trial justice’s decision to admit evidence that Danielle
witnessed defendant assaulting another small child. Specifically, Danielle was permitted to
testify that she saw defendant inappropriately touch Rosemary at the family cookout, on the
same day that Danielle was first sexually assaulted by defendant. Defense counsel objected on
the basis that this evidence was not relevant under Rule 402 of the Rhode Island Rules of
Evidence8 and, if relevant, was inadmissible under Rule 403 of the Rhode Island Rules of
Evidence’s9 balancing test because Rosemary could not be located to corroborate the allegation.
The state responded that it was offering the evidence under Rule 404(b), which allows for the
admission of evidence in certain circumstances. Although defendant clearly anticipated this
testimony, there was no pretrial motion in limine seeking to exclude this evidence.
We proceed to examine whether the Superior Court justice abused his discretion in
admitting the testimony under Rule 404(b), or whether it should have been excluded in
accordance with Rule 403. “When performing [an] abuse of discretion analysis in the context of
Rule 404(b), this Court first looks to the scope of allowable proof under the rule.” Peltier, 116
A.3d at 153. “In reviewing a trial justice’s admission of Rule 404(b) evidence, this Court is
‘disinclined to perceive an abuse of discretion so long as the record contains some grounds for
supporting the trial justice’s decision * * *.’” Clay, 79 A.3d at 838 (quoting State v. Ciresi, 45
A.3d 1201, 1211 (R.I. 2012)). Rule 404(a) excludes “[e]vidence of a person’s character or a trait
8
See Rule 402 of the Rhode Island Rules of Evidence (“All relevant evidence is admissible
* * *.”).
9
See Rule 403 of the Rhode Island Rules of Evidence (“Although relevant, evidence may be
excluded if its probative value is substantially outweighed by the danger of unfair prejudice,
confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of
time, or needless presentation of cumulative evidence.”).
- 15 -
of the person’s character * * * for the purpose of proving that he or she acted in conformity
therewith on a particular occasion”; nor are “other crimes, wrongs, or acts * * * admissible to
prove the character of a person in order to show that the person acted in conformity therewith.”
Rule 404(b). Such conduct, however, is admissible under Rule 404(b) for other purposes, such
as proof of “motive, opportunity, intent, preparation, plan, knowledge, identity, absence of
mistake or accident, or to prove that [the] defendant feared imminent bodily harm and that the
fear was reasonable.” Id. “[T]he list of admissible purposes contained within this rule provides
‘examples, rather than a complete enumeration, of permitted purposes.’” State v. Martinez, 59
A.3d 73, 85 (R.I. 2013) (quoting Ciresi, 45 A.3d at 1213).
In the context of sexual assault prosecutions, “evidence of a defendant’s prior sexual
misconduct cannot be admitted to prove that ‘defendant is a bad man, and that he has a
propensity toward sexual offenses and, therefore, probably committed the offenses with which he
is charged.’” State v. Mohapatra, 880 A.2d 802, 806 (R.I. 2005) (quoting State v. Quattrocchi,
681 A.2d 879, 886 (R.I. 1996)). Nonetheless, prior sexual misconduct that is “nonremote” and
“similar” to the crime on trial is admissible under Rule 404(b). See Mohapatra, 880 A.2d at 806.
“Offenses will be considered sufficiently ‘nonremote’ and ‘similar’ when they are ‘closely
related in time, place, age, family relationships of the victims, and the form of the sexual acts.’”
Id. (quoting State v. Brigham, 638 A.2d 1043, 1045 (R.I. 1994)). In the case at bar, the
similarity between the sexual acts of child molestation committed upon Danielle and allegedly
upon Rosemary is striking to say the least. The assaults occurred on the same day and at the
same party; Danielle and Rosemary were around the same age; they lived in the same building as
defendant; and the form of the sexual acts likewise was the same—defendant placed his hand in
the bathing suit bottom of both girls. We can conceive of few instances in which two sexual
- 16 -
assaults could be closer in time and manner.
However, such evidence is only admissible in “proving the charge lodged against the
defendant” and when “reasonably necessary.” Mohapatra, 880 A.2d at 806 (quoting State v.
Jalette, 119 R.I. 614, 627, 382 A.2d 526, 533 (1978)). In Mohapatra, we held that similar
incidents of sexual assault are relevant to proving that the defendant committed the act “with the
purpose of ‘sexual arousal, gratification, or assault.’” Id. at 808 (quoting § 11-37-1(7)).
Therefore, defendant’s contemporaneous assault of Rosemary can serve as proof of a pattern of
behavior. We likewise recognized in Mohapatra that prior incidents of sexual assault are
reasonably necessary to the state’s case when the victim’s credibility is placed at issue. Id. We
are cognizant that this is a case in which the evidence revealed a crime committed in private with
a significant lapse of time between the sexual assaults and the prosecution. The credibility of the
complainant was placed at center stage. We therefore are persuaded that this evidence meets the
test of relevancy and necessity to the state’s case. It is not cumulative.
The defendant’s attempt to distinguish these principles by homing in on Rosemary’s
unavailability as a witness is unavailing. It is defendant’s contention that, by presenting this self-
serving testimony that could not be verified because Rosemary, despite diligent efforts, could not
be located, the state was able to corroborate Danielle’s testimony. Although defendant
acknowledges that certain prior incidents of sexual assault are reasonably necessary when the
state’s case rests on credibility, he argues that in this context Danielle, in effect, corroborated her
own testimony. This contention is incorrect. Our rules do not limit evidence of prior misconduct
to testimony by the victim of that conduct, and we decline to make such a pronouncement.
Danielle offered testimony about her own observations. Under Rule 602 of the Rhode Island
Rules of Evidence, “[a] witness’s testimony is inadmissible * * * only if the trial justice finds
- 17 -
that the witness could not have actually perceived or observed that to which he or she purports to
testify.” State v. Grant, 840 A.2d 541, 546 (R.I. 2004) (quoting State v. Addison, 748 A.2d 814,
821 (R.I. 2000)). “Rule 602 * * * does not require that the witness’ knowledge be positive or
rise to the level of absolute certainty.” State v. Ranieri, 586 A.2d 1094, 1098 (R.I. 1991).
According to Danielle, she witnessed this assault first-hand. She therefore testified from
personal knowledge about her observations that fateful day, and she was subject to cross-
examination, the unavailability of Rosemary notwithstanding.
We pause to note however, that the Superior Court justice did not engage in a Rule 403
balancing test to determine the probative value of this evidence, nor was he pressed to do so by
counsel after the state submitted that the evidence was offered under Rule 404(b). Nonetheless,
the Superior Court justice should have undertaken a Rule 403 analysis when deciding to admit
the evidence. See State v. Cook, 45 A.3d 1272, 1280 (R.I. 2012) (reaffirming that Rule 403 is
inherent in a Rule 404(b) analysis, but holding that a trial justice does not have to engage in a
Rule 403 analysis, if an objection is not made). We deem this error harmless because the
evidence was correctly admitted, and its probative value outweighed any potential prejudice.
“A Rule 403 analysis requires the trial justice to not only examine the evidence in the
context of the case on trial, but to balance the evidence to determine whether its probative force
‘is substantially outweighed by the danger of unfair prejudice, * * *.’” State v. Patel, 949 A.2d
401, 413 (R.I. 2008) (quoting Rule 403). We are not convinced that this testimony was unfairly
prejudicial to defendant under Rule 403. See State v. Gaspar, 982 A.2d 140, 148-49 n.12 (R.I.
2009) (“[B]ecause most evidence offered at trial is inherently prejudicial, [o]nly unfairly
prejudicial evidence is barred under Rule 403 * * *[.]” (quoting 29 Am. Jur. 2d Evidence § 338
at 360 (2008))). As noted, Danielle’s credibility was at issue throughout the entire trial. She
- 18 -
testified that she had personal knowledge of the alleged sexual assault upon Rosemary. See
Mohapatra, 880 A.2d at 808 (“When charges of sexual abuse hinge upon a credibility contest
between [a] defendant and * * * complainant, relevant evidence of prior sexual misconduct is
reasonably necessary to support the complainant’s testimony.”). The jury was well aware that
Rosemary could not be located and that this allegation was unsupported by any other evidence.
Before this Court, defendant paints Rosemary as “a little girl who was never seen, never heard,
but whose presence haunted the proceedings from beginning to end.” Although defendant
contends that the state improperly gave reference to an “empty chair,” it is actually the defense
that did so explicitly by arguing that “[w]ithout Rosemary testifying I would submit [the state]
cannot prove [its] case beyond a reasonable doubt.”
Finally, the trial justice gave the following timely cautionary instruction:
“And I just want to make clear to the jury there was
testimony that the Court allowed in about the incident that the
witness just described when she was leaving the bathroom and was
going in the bedroom. I just want the jury to understand that you
cannot consider that evidence of these acts to show that the
defendant, if you get that far, has a propensity to commit the crime
for which he is currently charged at this point. It is admissible for
other purposes for the jury to consider such as motive, opportunity,
intent and I’ll be going into that. But the jury can’t say, for
example, well, because he did such and such, he had a propensity
to do other things.”
We are satisfied that this cautionary instruction served to eliminate any unfair prejudice that
defendant may have faced from this testimony. See State v. Mitchell, 80 A.3d 19, 29, 30 (R.I.
2013) (determining that “trial justice fulfilled his obligation to give a sua sponte instruction on
the Rule 404(b) evidence” and did not abuse his discretion in admitting “evidence of [the]
defendant’s other sexual misconduct”); State v. Garcia, 743 A.2d 1038, 1052 (R.I. 2000) (noting
that “in sexual assault cases * * * a trial justice is required to issue a cautionary instruction to the
- 19 -
jury regarding the limited use of Rule 404(b) evidence”).
Motion for Judgment of Acquittal
The defendant argues that the trial justice erred in denying his motion for judgment of
acquittal on counts 4 and 5 of the indictment because Danielle did not testify that defendant
touched her vagina in relation to those counts. Counts 4 and 5 were charged under § 11-37-8.3,
which prohibits sexual contact with a person under the age of fourteen. “Sexual contact” is
defined as “the intentional touching of the victim’s or accused’s intimate parts.” Section 11-37-
1(7). “Intimate parts” is defined as “genital or anal areas, groin, inner thigh, or buttock of any
person or the breast of a female.” Section 11-37-1(3). We are mindful that, in passing on a
motion for judgment of acquittal, the trial justice is compelled to view the evidence in the light
most favorable to the state and draw every reasonable inference consistent with guilt. See State
v. Grantley, 149 A.3d 124, 131 (R.I. 2016).
Although Danielle did not explicitly offer testimony that defendant’s hand touched her
vagina in describing every occasion of sexual assault, she clearly testified that defendant placed
his hand in her bathing suit and “began touching [her] in [her] vaginal area in a circular motion.”
When recounting the subsequent occasions of sexual abuse, Danielle testified that defendant
placed his hand in her underwear and “began doing the same thing as the other times.” This later
reference to defendant’s conduct during an earlier assault—that he touched her vaginal area in a
circular motion—satisfies the requirement that Danielle’s testimony was precise and specific.
See In re B.H., 138 A.3d 774, 782 (R.I. 2016) (affirming that “‘precise and specific testimony is
necessary to support’ a prosecution for first-degree sexual assault or first-degree child
molestation” (quoting State v. McDonald, 602 A.2d 923, 925 (R.I. 1992))).
We are satisfied that Danielle’s testimony on counts 4 and 5 sufficiently refers back to an
- 20 -
earlier assault in which the defendant was “doing the same thing as the other times” and creates a
nexus between her testimony and the body part delineated in the statute, her genital area. See
Brown, 709 A.2d at 481 (“Just as a reviewing court should not pick out one isolated statement
from a slew of jury instructions without considering all the jury instructions as a whole, * * * so
too should it not pick one isolated statement in a witness’s testimony out of context from the
whole of it.” (citing State v. Peguero, 652 A.2d 972, 974 (R.I. 1995))). Because we are of the
opinion that a reasonable jury could find the defendant guilty beyond a reasonable doubt on these
charges, we conclude that the Superior Court justice properly denied the defendant’s motion for
judgment of acquittal on counts 4 and 5.
Conclusion
For the reasons stated in this opinion, we affirm the judgments of conviction. The papers
in this case shall be remanded to the Superior Court.
- 21 -
STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS
SUPREME COURT – CLERK’S OFFICE
OPINION COVER SHEET
Title of Case State of Rhode Island v. John Cavanaugh.
No. 2015-305-M.P.
Case Number
(K1/14-79A)
Date Opinion Filed April 28, 2017
Suttell, C.J., Goldberg, Flaherty, Robinson, and
Justices
Indeglia, JJ.
Written By Associate Justice Maureen McKenna Goldberg
Source of Appeal Kent County Superior Court
Judicial Officer From Lower Court Associate Justice Brian P. Stern
For State:
Virginia M. McGinn
Department of Attorney General
Attorney(s) on Appeal
For Defendant:
Lara E. Montecalvo
Office of the Public Defender
SU-CMS-02A (revised June 2016)
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IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
AT NASHVILLE FILED
OCTOBER 1998 SESSION
November 4, 1998
Cecil W. Crowson
Appellate Court Clerk
STATE OF TENNESSEE, )
) C.C.A. No. 01C01-9709-CR-00398
Appellee, )
) Davidson County
V. )
) Honorable Cheryl Blackburn, Judge
)
GEORGE D. FITZPATRICK, ) (Rape)
)
Appellant. )
FOR THE APPELLANT: FOR THE APPELLEE:
Carlton M. Lewis John Knox Walkup
Attorney at Law Attorney General & Reporter
Petway, Blackshear & Cain
208 Third Avenue, North Michael J. Fahey, II
Nashville, TN 37201-1604 Assistant Attorney General
425 Fifth Avenue North
Nashville, TN 37243-0493
Victor S. (Torry) Johnson III
District Attorney General
Dan Hamm
Sharon Brox
Assistant District Attorneys General
200 Washington Square, Suite 500
Nashville, TN 37201-1619
OPINION FILED: ___________________
AFFIRMED
PAUL G. SUMMERS,
Judge
OPINION
The appellant, George D. Fitzpatrick, was convicted by a jury of rape and
assault. The sole issue presented on appeal is whether the evidence at trial was
sufficient to support a finding of guilt beyond a reasonable doubt. We find that it
was and affirm the judgment of the trial court.
The evidence showed that the appellant agreed to drive the victim and her
male friend, Chris, to a nearby store to buy some beer. The victim asked Chris
to get her purse and went on to the appellant’s vehicle ahead of him. W hile
Chris was delayed, the victim got into the rear seat of the vehicle, a small two-
door Toyota, and the appellant and another man got into the front seats, thereby
trapping the victim in the car. The appellant then drove away before Chris could
join them.
Rather than go for beer, the appellant drove the victim around for about
twenty minutes. He then stopped the car in a desolate area, reached into the
back seat and grabbed the victim’s leg, and ordered her to take off her pants.
The victim began to scream and cry but did not disrobe. The victim testified that
the appellant then pulled her head forward and forced her to preform oral sex on
him. She unequivocally stated that the victim’s penis penetrated her mouth and
that she did not consent.
When an appellant challenges the sufficiency of the evidence, this Court
must determine whether, after viewing the evidence in a light most favorable to
the prosecution, any rational trier of fact could have found the essential elements
of a crime beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307,
319 (1979); State v. Duncan, 698 S.W.2d 63, 67 (Tenn. 1985); Tenn. R. App. P.
13(e). The appellee is entitled to the strongest legitimate view of the evidence
and all reasonable inferences that may be drawn therefrom. See State v.
-2-
Cabbage, 571 S.W.2d 832, 835 (Tenn. 1978). Moreover, a guilty verdict
removes the presumption of innocence enjoyed by defendants at trial and
replaces it with a presumption of guilt. See State v. Grace, 493 S.W.2d 474, 476
(Tenn. 1973). Thus, an appellant challenging the sufficiency of the evidence
carries the burden of illustrating to this Court why the evidence is insufficient to
support the verdict. See State v. Freeman, 943 S.W.2d 25, 29 (Tenn. Crim.
App. 1996).
The appellant is convicted under Tennessee Code Annotated § 39-13-
503, which provides that rape is the “unlawful sexual penetration of a victim by
the defendant or of the defendant by a victim accompanied by any of the
following circumstances . . . [f]orce or coercion is used to accomplish the act.”
The appellant argues that the credibility of the victim is “highly questionable” and
advances a theory as to the victim’s motive to wrongly accuse him. These
issues are not proper inquires for this Court. The credibility of witnesses, the
weight of their testimony, and the reconciliation of conflicts in the evidence are
matters entrusted exclusively to the trier of fact. See State v. Sheffield, 676
S.W.2d 542, 547 (Tenn. 1984); State v. Gentry, 881 S.W.2d 1, 3 (Tenn. Crim.
App. 1993). A jury verdict for the state accredits the testimony of the state’s
witnesses and resolves all conflicts in favor of the state. See State v. Williams,
657 S.W.2d 405, 410 (Tenn. 1983). We look only to see whether there was
sufficient evidence from which a reasonable trier of fact could have found that
the appellant committed each element of the crime for which he was convicted.
In the present case, the victim’s uncontradicted testimony was clearly sufficient.
The jury’s verdict indicates that they accredited her testimony, and it was their
prerogative to do so.
The judgment of the trial court is affirmed.
__________________________
PAUL G. SUMMERS, Judge
-3-
CONCUR:
_____________________________
JOSEPH M. TIPTON, Judge
_____________________________
JOE G. RILEY, Judge
-4-
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Order entered January 29, 2014
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-13-01325-CV
JOHN H. CARNEY & ASSOCIATES, Appellant
V.
OFFICE OF THE ATTORNEY GENERAL OF TEXAS, Appellee
On Appeal from the 68th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-12-02253
ORDER
Before the Court is appellant’s January 23, 2014 motion to extend time for filing brief.
The motion is in response to our January 17, 2014 notice that the brief was overdue. Appellant
explains in the motion, and our records confirm, that the notice was sent even though appellant
appeals from a bench trial and the reporter’s record has not been filed. Appellant seeks an
additional thirty days to file the brief. Because the briefing deadline is not triggered until the
reporter’s record has been filed and, to date, the reporter has not filed the record, it appears our
notice was inadvertently sent and no extension is necessary. See TEX. R. APP. P. 38.6(a). We
DENY appellant’s motion as premature.
Because the reporter’s record is overdue, we ORDER Antoinette Reagor, Official Court
Reporter of the 68th Judicial District Court, to file the record no later than February 10, 2014.
We DIRECT the Clerk of the Court to send a copy of this order by electronic transmission to
Ms. Reagor and all parties. We further DIRECT the Clerk of the Court to remove the current
briefing deadline. The deadline shall be reset once the reporter’s record has been filed.
/s/ ELIZABETH LANG-MIERS
JUSTICE
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243 S.C. 368 (1963)
133 S.E.2d 833
J.B. WATSON, Administrator of the Estate of Jimmy Gantt Watson, Respondent,
v.
Harold L. AIKEN, and one 1954 Pontiac Tudor Automobile, 1961 S.C. License No. E-176812, Appellant.
18144
Supreme Court of South Carolina.
December 17, 1963.
Messrs. Leatherwood, Walker, Todd & Mann, of Greenville, for Appellants.
*369 Messrs. Harold N. Morris and Paul Montjoy, of Greenville, for Respondent.
December 17, 1963.
BRAILSFORD, Justice.
This action for the alleged wrongful death of eight year old Jimmy Gantt Watson resulted in a verdict for plaintiff and defendant has appealed on the ground that the court erred in refusing his motion for a directed verdict. The issue must be resolved by determining whether the evidence, viewed in the light most favorable to plaintiff, is sufficient to support a reasonable inference that the defendant was guilty of actionable negligence in the operation of his automobile, which struck a coaster wagon in which the child entered the highway from a private drive.
As the defendant approached the scene from the east, traveling on a highway with which he was not familiar, his view of the driveway on his right was obstructed by an embankment on which tall grass and weeds were growing. This obstruction was more than 6 feet in height to a point near the highway, whence it tapered to a few inches in height at *370 the entrance of the driveway. The driveway runs downgrade to the highway and the highway is downgrade in the direction of defendant's travel. At a point about opposite the driveway, Cely Road comes to a dead end in the highway traveled by defendant. The intersection is in a rural area and was unmarked by center line or highway sign.
The defendant was accompanied by his wife, seated in the middle on the front seat, and by J. Fred Roe, seated on the right side. Roe, who had not known the defendant previously, was directing him to a nearby pasture to see a milk cow which Roe had for sale.
As a witness for plaintiff, Mr. Roe testified that the defendant was driving about 40 miles per hour as he approached the scene. This witness estimated that when he first saw two boys and a wagon, they were 8 or 10 feet from the highway and the defendant's automobile was about forty to fifty feet from the driveway. Jimmy Watson was in the wagon and was being pushed rapidly toward the highway by the other boy, who was running behind it. This boy turned back after having taken a step onto the highway. The defendant, having promptly applied his brakes, almost succeeded in stopping his car before colliding with the wagon near the center of the road and did come to a complete stop within 8 or 10 feet from the point of impact. In the course of stopping, the automobile veered slightly to the left, about a foot according to the recollection of this witness. The left front of the automobile struck the wagon, "which continued on across the road."
The investigating patrolman testified that he measured the length of skid marks laid down by defendant's automobile to be 70 feet, 4 inches, and that the point of impact was in the center of the 18 foot roadway. He did not measure the distance from this point to where the car came to a stop, but, according to his best recollection, when he arrived "it was still sitting in the road about where it happened." This witness also measured a distance of 50 feet to where he found *371 the wagon on the opposite side of the road from the driveway "along the ditch banks," and a distance of 18 feet from the wagon to a blood spot "in the grass" from which the boy's body had been removed. It may be inferred that the measurement to the wagon was made from the point of impact.
Having summarized the testimony of the only two witnesses offered by plaintiff on the issue of actionable negligence, we turn now to the defense evidence, on some of which plaintiff relies.
The defendant testified that he approached the scene at a speed of about 35 miles per hour. He did not see the driveway before the children, who had been hidden by the embankment and vegetation, suddenly appeared in view. He immediately applied his brakes and undertook to veer to the left. The car had almost stopped before the collision and it continued forward only a few more feet, "four or five feet at the most."
Defendant did not undertake to estimate in feet the distance between the automobile and wagon when he first observed the latter. When asked on cross examination for a rough estimate of how far the wagon was from the asphalt road when he first saw it, the witness replied:
"It would be hard to say without actually going back to the scene of the accident cause you got to look up the road as far as you can see into the driveway, which would be a very short distance, maybe three or four feet back from the actual shoulder of the road. Probably as far as you can see. In other words, I seen them as soon as they cleared the brush and stuff grown up where I could see them, but that was too late."
The only other eye witness to testify was defendant's wife, whose testimony was consistent with that of the other two. She estimated her husband's speed at 35 miles per hour and stated that when she first saw the wagon, "the little boy was pushing it very fast directly out into the road. * * * As he *372 came into the road a foot or two on the pavement he must have seen the car; he whirled around instantly. * * * We were right on him when he whirled. I don't see how we missed him."
The trial judge assigned no reason for his denial of defendant's motion for a directed verdict. In overruling an earlier motion for nonsuit, he stated:
"I conclude the seventy foot marks undisputed, seventy foot eight inches, there's some indication of an unreasonable speed. In addition, the testimony at this stage of it is that there was only a slight turning to the left, at most, not more than twelve inches.
"As I understand it, it is an eighteen foot pavement, and that left on the other side of the road a total distance unobstructed and open road of nine feet. The testimony being susceptible to more than one reasonable inference as to negligence and proximate cause.
"The motion is respectfully overruled."
There was no testimony that an automobile such as defendant's can be braked to a stop from a speed of 40 miles per hour in a lesser distance than 70 feet, 4 inches, nor is this established by the ordinary experience of mankind. Therefore, there is no support in the record for an inference resting on the length of the skid marks that defendant was driving at a speed in excess of that testified to by the only witnesses on the point. To illustrate the fallacy of inferring excessive speed from skid marks, without some evidence as to the braking distance required to stop a vehicle from the speed otherwise indicated by the evidence, see charts in Am. Jur. (2d) Desk Book, particularly Document No. 173, pg. 453, which is the chart published by the South Carolina Highway Department.
The suggestion that defendant is chargeable with negligence for having failed to miss the wagon by turning farther to the left is, in our view, unsound. It loses sight of the fact that the wagon was moving rapidly *373 across the highway, at a 45 degree angle according to Roe's testimony, and the defendant did not know whether it would continue on this course. The evidence indicates that the accident might have been avoided if the defendant had remained in his lane of travel or turned to the right, and plaintiff contends that he should have adopted this course. We think that either view imposes on the defendant the burden of exercising a degree of skill and foresight which the law does not require. It is abundantly clear that the defendant, without negligence on his part, was cast in a sudden emergency and is entitled to the benefit of the applicable rule, which we quote from Porter v. Cook, 196 S.C. 433, 13 S. E. (2d) 486:
"Persons who have to act in the face of sudden and imminent peril, are not to be judged in the light of later events, but are to be judged under all the circumstances which surround them at the time, by the standard of what a person of ordinary prudence would have been likely to do under the same conditions. If the emergency had been brought about by the defendant's own negligence a different rule would apply, but here we think the evidence shows beyond question that the situation which resulted in the tragic death of James Calvin Porter cannot properly be laid at the door of the defendant, Cook." 13 S.E. (2d) 488.
When defendant's efforts to avoid the peril are judged in the light of the emergency and by the standard of what a driver of ordinary care would have been likely to do under such circumstances, we find no evidence that he was in any way negligent.
Plaintiff contends that an inference of excessive speed may be drawn from the length of the skid marks coupled with the post collision position of the wagon 50 feet from the point of impact and that of the intestate 18 feet beyond the wagon. The post collision positions of this rolling vehicle and its occupant have no probative value on the question of defendant's speed because the impact occurred within 10 feet *374 of the stopping point of the automobile, where, necessarily, it was traveling very slowly.
A number of photographs of the scene were offered in evidence, largely for the purpose of picturing the obstructions to vision. Neither the photographer nor any other expert in his field testified. In several of the pictures, dark marks appear on the road surface which were identified as the skid marks made by defendant's automobile. In three of the photographs, made with the camera pointed lengthwise the highway, these marks appear to be only a few feet long. In another, taken crosswise, they appear much longer, although their full length cannot be seen because of vegetation on the shoulder of the highway. Plaintiff would infer from the photographs "that the skid marks were darker and heavier on the asphalt surface of the highway for a few feet before the impact than they were where the skid marks began. This would indicate that the Appellant failed to maintain proper brakes or failed to make proper use of the brakes with which the car was equipped."
This argument assumes that the patrolman measured tire marks for a distance before the point at which the brakes held effectively and the tires began to skid. The pictures do not show any such marks and there is no testimony to this effect. We quote from the direct examination of the patrolman by plaintiff's counsel:
"Q. Now these marks here you indicated seventy feet and four inches skid marks. What does that mean?
"A. That's where Mr. Aiken put his brakes on and slid."
* * *
"Q. Did you check the brakes?
"A. Yes, sir, I looked the car over and I didn't find any defects on it."
No reasonable inference that the brakes were defective or ineffectively applied may be drawn from the photographs of the skid marks, which, according to the undisputed testimony, do not accurately portray their length and were not intended for nor adapted to this purpose.
*375 Finally, plaintiff contends that it is reasonably inferable from the testimony that the defendant failed to keep a proper lookout. This is based solely upon Roe's estimate that he saw the wagon when it was 8 or 10 feet from the road, as compared with defendant's estimate that it was "3 or 4 feet from the actual shoulder of the road" when first seen by him. The defendant testified that he saw the children "as soon as they cleared the brush and stuff grown up where I could see them." He estimated the distance from this point to the "actual shoulder of the road" to be 3 or 4 feet. Mr. Roe could not have seen the boys until they cleared the obstructions, and he estimated this point to be "around 8 to 10 feet up this driveway." The difference is in the estimates of the two witnesses as to the distance between given points and does not necessarily indicate which, if either, saw the children first. But assuming that the passenger on the right saw the children an instant before the driver did, this would not indicate that the driver, who was approaching the intersection of Cely Road on his left, was not in the exercise of due care.
We are satisfied that the only reasonable inference from the evidence is that the sole proximate cause of this unfortunate accident was the impulsive act of the children in entering the highway from behind obstructions in such close proximity to defendant's approaching car that he had no opportunity to see them in time to avoid the collision by the exercise of due care. The case is similar to Gunnels v. Roach, 133 S.E. (2d) 757 and Critzer v. Kerlin, 231 S.C. 315, 98 S.E. (2d) 761, and Williams v. Clinton, 236 S.C. 373, 114 S.E. (2d) 490, in which the same conclusion was reached.
Reversed and remanded for entry of judgment for defendant.
TAYLOR, C.J., and MOSS, LEWIS and BUSSEY, JJ., concur.
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921 F.2d 21
1991 A.M.C. 912
Ilsa KLINGHOFFER and Lisa Klinghoffer Arbitter, asCo-Executrixes of the Estates of Leon and MarilynKlinghoffer, Plaintiffs-Respondents,v.S.N.C. ACHILLE LAURO ED ALTRI-GESTIONE MOTONAVE ACHILLELAURO IN AMMINISTRAZIONE STRAORDINARIA, et al.,Defendants.Sophie CHASSER, et al., Plaintiffs-Respondents,v.ACHILLE LAURO LINES, et al., Defendants.Viola MESKIN, et al., Plaintiffs-Respondents,v.ACHILLE LAURO LINES, et al., Defendants.Donald SAIRE, et al., Plaintiffs-Respondents,v.ACHILLE LAURO ED ALTRI-GESTIONE M/N ACHILLE LAURO S.N.C., etal., Defendants.Frank R. HODES and Mildred Hodes, Plaintiffs-Respondents,v.PALESTINE LIBERATION ORGANIZATION, An UnincorporatedAssociation, John Doe, President, PLO, and RichardRoe, Treasurer, PLO, Defendants-Petitioners.Donald E. SAIRE and Anna G. Saire, Plaintiffs-Respondents,v.PALESTINE LIBERATION ORGANIZATION, and John Doe as Presidentand Don Roe as Treasurer of The PalestineLiberation Organization, Defendants-Petitioners.
No. 90-9060.
United States Court of Appeals,Second Circuit.
Submitted Nov. 13, 1990.Decided Dec. 7, 1990.
Ramsey Clark, Lawrence W. Schilling, New York City, for defendant-petitioner The Palestine Liberation Organization.
Steven E. Obus, Jay D. Fischer, Juliet Sarkessian, Proskauer Rose Goetz & Mendelsohn, New York City, for plaintiffs-respondents Ilsa Klinghoffer and Lisa Klinghoffer Arbitter.
Rodney E. Gould, Rubin, Hay & Gould, P.C., Framingham, Mass., for plaintiff-respondent Crown Travel.
Before FEINBERG, TIMBERS and MINER, Circuit Judges.
FEINBERG, Circuit Judge:
1
The Palestine Liberation Organization (PLO) seeks leave to appeal an order of the United States District Court for the Southern District of New York, Louis L. Stanton, J., denying the PLO's motion to dismiss the complaints and third-party complaints against it. The district court subsequently granted the PLO's motion pursuant to 28 U.S.C. Sec. 1292(b) for certification of the order for interlocutory appeal, and the PLO now seeks leave from this court to pursue the appeal. For reasons given below, we grant the PLO's petition for leave to appeal. We issue an opinion, however, in order to clarify that a "controlling question of law" under section 1292(b) need not affect a wide range of pending cases.
Background
2
This consolidated action arises from the forcible seizure of the Italian passenger liner Achille Lauro in the Mediterranean Sea in October 1985. During the course of the seizure, one of the passengers, Leon Klinghoffer, was shot and his body thrown overboard. Plaintiffs, passengers or executors of the estates of persons who were passengers, assert that the seizure and murder were done by members of the PLO. The PLO denies responsibility for those acts and claims that they were done by its opponents in an effort to discredit it.
3
Several passengers brought suit in the district court, alleging that the owner and charterer of the Achille Lauro, travel agencies and various other entities failed to take sufficient steps to prevent, or warn of the risk of, the piracy. The Klinghoffer action asserts claims under state law, general maritime law and the Death on the High Seas Act, 46 U.S.C.App. Secs. 761-68.
4
Two of the defendants then impleaded the PLO, seeking indemnification or contribution for any damages awarded against them on plaintiffs' claims and compensatory and punitive damages against the PLO for tortious interference with their businesses. Other Achille Lauro passengers later filed two actions directly against the PLO.
5
The PLO then moved pursuant to Fed.R.Civ.P. 12(b)(1), (2), (5), (6) and 17(b) to dismiss the complaints and third-party complaints against it on the grounds that the district court had no subject matter jurisdiction because the case presents a nonjusticiable political question, that the PLO is immune from suit because it is a sovereign state and a Permanent Observer at the United Nations, that the district court lacked personal jurisdiction over it, that the PLO, assuming it is an unincorporated association, lacks the capacity to be sued and that the service of process on Zuhdi Labib Terzi, the PLO's Permanent Observer at the United Nations, was insufficient.
6
In June 1990, Judge Stanton denied the PLO's motion to dismiss. The PLO then moved for reargument or for certification of an interlocutory appeal pursuant to 28 U.S.C. Sec. 1292(b). In July 1990, the district court in a memorandum opinion denied the motion for reargument, but granted the PLO's request under section 1292(b) and certified the order for review by this court. The PLO then petitioned this court for permission to pursue its appeal from the district court's June 1990 order denying the PLO's motion to dismiss.
Discussion
7
Section 1292(b) provides a means of appealing from interlocutory orders that are otherwise non-appealable, upon consent of both the district court and the court of appeals:
8
When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals ... may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order....
9
28 U.S.C. Sec. 1292(b).
10
Before deciding whether we should exercise our discretion under the statute to accept the appeal, we must first determine whether the district court properly found that the requisites for section 1292(b) certification have been met. See Red Bull Assocs. v. Best Western Int'l, Inc., 862 F.2d 963, 965 & n. 5 (2d Cir.1988). Plaintiffs argue that the appeal does not involve a "controlling question of law" because it does not involve issues that affect a wide range of pending cases, and plaintiffs cite a number of district court opinions in this circuit that have imposed this condition for certification. See, e.g., Friends of the Earth v. Archer Daniels Midland Co., No. 84-CV-413, 1988 WL 128618 (N.D.N.Y. Nov. 30, 1988); Department of Economic Development v. Arthur Andersen & Co., 683 F.Supp. 1463, 1486-87 (S.D.N.Y.1988); Herold v. Braun, 671 F.Supp. 936, 938 (E.D.N.Y.1987); Kohn v. Royall, Koegel & Wells, 59 F.R.D. 515, 525 (S.D.N.Y.1973), appeal dismissed, 496 F.2d 1094 (2d Cir.1974).
11
The district courts have apparently derived this requirement from Brown v. Bullock, 294 F.2d 415 (2d Cir.1961) (in banc), in which the in banc court noted that leave to appeal was granted in that case in part because "such a determination was likely to have precedential value for a large number of other suits ... now pending in the Southern District [of New York]." Id. at 417. We do not, however, interpret Brown v. Bullock as holding that certification is proper only if the certified issue has precedential value for a large number of pending suits. The court in that case did not expressly address the "controlling question of law" requirement, and we do not regard its reference to the precedential value of the issues before it as a restrictive interpretation of that statutory term. Rather, the reference was only one of the reasons provided as justification for acceptance of the appeal, see id., and was an explanation of why the court was so exercising its discretion. Thus, Brown v. Bullock did not decide the issue plaintiffs pose for us, and we must still decide whether their position is correct.
12
Although the resolution of an issue need not necessarily terminate an action in order to be "controlling," cf. In re The Duplan Corp., 591 F.2d 139, 148 n. 11 (2d Cir.1978); Atlantic City Elec. Co. v. General Elec. Co., 312 F.2d 236, 238 (2d Cir.1962) (in banc), cert. denied, 373 U.S. 909, 83 S.Ct. 1298, 10 L.Ed.2d 411 (1963), it is clear that a question of law is "controlling" if reversal of the district court's order would terminate the action. See J. Moore & B. Ward, 9 Moore's Federal Practice p 110.22, at 268 (1990) (collecting cases). For example, we have granted certification when the order involved issues of in personam and subject matter jurisdiction. See, e.g., Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1326, 1330 (2d Cir.1972). The order being appealed from in this case denied the PLO's motion to dismiss the complaints and third-party complaints against it. If we reverse the district court's order and dismiss the actions against the PLO, those actions would be terminated, and thus our resolution of the issues involved in the certified order would be "controlling" in that sense.
13
As already indicated, however, plaintiffs argue that a question of law must be "controlling" in a wider sense, that is, the resolution of the question must also have precedential value for a number of pending cases. We disagree. Section 1292(b) expressly states that the court of appeals may "in its discretion" permit the appeal "to be taken." The legislative history of section 1292(b) clearly shows that this discretion encompasses denial of a properly certified appeal--which by definition includes a "controlling question of law"--for any reason, including docket congestion. See Coopers & Lybrand v. Livesay, 437 U.S. 463, 475, 98 S.Ct. 2454, 2461, 57 L.Ed.2d 351 (1978). Therefore, in exercising our discretion under the statute, we may properly consider the system-wide costs and benefits of allowing the appeal. In other words, the impact that an appeal will have on other cases is a factor that we may take into account in deciding whether to accept an appeal that has been properly certified by the district court. But that is not the same as defining a "controlling question of law" in terms of its precedential value. We have not found any circuit court decisions that squarely support plaintiffs' position, and we regard In re Cement Antitrust Litigation, 673 F.2d 1020, 1026 (9th Cir.1982), aff'd for absence of quorum sub. nom. Arizona v. Ash Grove Cement Co., 459 U.S. 1190, 103 S.Ct. 1173, 75 L.Ed.2d 425 (1983), as contrary to their view. Moreover, distinguished commentators have concluded that "[t]he suggestion ... that the question must be important to a large number of other suits ... is not supported by any statutory purpose." C. Wright, A. Miller, E. Cooper & E. Gressman, 16 Federal Practice and Procedure Sec. 3930, at 159 (1977). Our review of the statute and relevant authorities convinces us that a "controlling question of law" under section 1292(b) need not affect a wide range of pending cases, and we so hold.
14
In reaching this result, we do not imply that section 1292(b) should be liberally construed, since "the power [to grant an interlocutory appeal] must be strictly limited to the precise conditions stated in the law." Gottesman v. General Motors Corp., 268 F.2d 194, 196 (2d Cir.1959). Rather, we think that the construction of "controlling question of law" pressed upon us by plaintiffs is an overly restrictive interpretation of the "precise conditions" imposed by section 1292(b). Thus, our holding does not extend the statute beyond its intended limits, and it continues to be true that only "exceptional circumstances [will] justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment." Coopers & Lybrand, 437 U.S. at 475, 98 S.Ct. at 2461.
15
In light of the above, it is apparent that the present appeal does involve a "controlling question of law." Our inquiry, however, does not end there. Plaintiffs also argue that the appeal does not satisfy the remaining statutory requirements because there are no "substantial grounds for difference of opinion" regarding the controlling legal questions nor will their resolution "materially advance the ultimate termination of the litigation." We disagree. In his July 1990 memorandum opinion, Judge Stanton pointed out that the issues are difficult and of first impression. For example, the judge observed that
16
[t]he undefined juristic nature of the PLO [which the district court held may be treated in this litigation as an unincorporated association], the PLO's argument that it is entitled to "functional" immunity since its presence in New York is principally connected with its status as an Observer at the United Nations, and the special attention given to the PLO by Congress in the Anti-Terrorism Act of 1987, 22 U.S.C. Secs. 5201-03 (1988), argue that this is an exceptional case in which section 1292(b) certification is appropriate.
17
The district court also stated that if we find that there is no jurisdiction over the PLO, that finding will greatly assist the ultimate termination of the litigation. We see no persuasive reason for rejecting the reasoning of Judge Stanton on these matters.
18
The PLO's petition for permission to appeal is granted.
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People v Musayelyan (2019 NY Slip Op 07287)
People v Musayelyan
2019 NY Slip Op 07287
Decided on October 9, 2019
Appellate Division, Second 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 October 9, 2019
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department
REINALDO E. RIVERA, J.P.
HECTOR D. LASALLE
BETSY BARROS
ANGELA G. IANNACCI, JJ.
2015-11178
(Ind. No. 3017/14)
[*1]The People of the State of New York, respondent,
vYevhen Musayelyan, appellant.
Janet E. Sabel, New York, NY (Svetlana M. Kornfeind of counsel), for appellant.
Eric Gonzalez, District Attorney, Brooklyn, NY (Leonard Joblove, Rhea A. Grob, and Sullivan & Cromwell LLP [Yuliya Neverova], of counsel), for respondent.
DECISION & ORDER
Appeal by the defendant from a judgment of the Supreme Court, Kings County (Evelyn Laporte, J.), rendered October 1, 2015, convicting him of operating a motor vehicle while under the influence of alcohol or drugs in violation of Vehicle and Traffic Law § 1192(3), reckless driving, and violation of Vehicle and Traffic Law § 1128(a), upon a jury verdict, and imposing sentence.
ORDERED that the judgment is affirmed.
Viewing the evidence in the light most favorable to the prosecution (see People v Contes, 60 NY2d 620), we find that it was legally sufficient to establish the defendant's guilt of reckless driving beyond a reasonable doubt. Moreover, in fulfilling our responsibility to conduct an independent review of the weight of the evidence (see CPL 470.15[5]; People v Danielson, 9 NY3d 342, 348), we nevertheless accord great deference to the factfinder's opportunity to view the witnesses, hear the testimony, and observe demeanor (see People v Romero, 7 NY3d 633, 644). Upon reviewing the record here, we are satisfied that the verdict of guilt as to that count was not against the weight of the evidence (see id. at 644).
Since the evidence adduced to establish the elements of operating a motor vehicle while under the influence of alcohol or drugs in violation of Vehicle and Traffic Law § 1192(3) was supported by the direct testimony of the arresting police officers, a circumstantial evidence charge was not required (see People v Hardy, 26 NY3d 245, 249; People v Roldan, 88 NY2d 826, 827; People v Daddona, 81 NY2d 990, 992; People v Duffin, 28 Misc 3d 126[A], 2010 NY Slip Op 51174[U] [App Term, 9th & 10th Jud Dists 2010]).
RIVERA, J.P., LASALLE, BARROS and IANNACCI, JJ., concur.
ENTER:
Aprilanne Agostino
Clerk of the Court
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444 So.2d 1245 (1984)
STATE of Louisiana
v.
Rubin WADE.
No. 83-K-2625.
Supreme Court of Louisiana.
February 3, 1984.
Denied.
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813 F.2d 401Unpublished Disposition
NOTICE: 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.Peggy Darlene LITTLEJOHN, and Merina Swimmer; on behalf ofthemselves and all others similarly situated, Appellants,v.Phillip J. Kirk, Jr., in his official capacity as Secretaryof the North Carolina Department of Human Resources; JohnSyria, in his official capacity as Director of the NorthCarolina Division of Social Services; and Susan Smith, inher official capacity as Section Chief of the North CarolinaChild Support Enforcement Agency, Appellees,v.Donald P. HODEL, in his official capacity as U.S. Secretaryof the Interior; Margaret Heckler, in her official capacityas U.S. Secretary of Health and Human Services; and KennethSmith, in his official capacity as U.S. Assistant Secretaryof the Interior of Indian Affairs, Third-Party Defendants.
No. 86-2027.
United States Court of Appeals, Fourth Circuit.
Argued Dec. 9, 1986.Decided Dec. 29, 1986.
Before WINTER, Chief Judge, PHILLIPS, Circuit Judge, and HENDERSON, United States District Judge for the District of South Carolina, sitting by designation.
James H. Holloway (Lawrence Nestler, Western North Carolina Legal Services, on brief), for appellant.
Robert E. Cansler, Assistant Attorney General, North Carolina Department of Justice (Lacy H. Thornburg, Attorney General of North Carolina, on brief) for appellees.
PER CURIAM:
1
In plaintiffs' application for attorney's fees under 42 U.S.C. Sec. 1988, the district court ruled that they were not prevailing parties and denied them an award. They appeal and we affirm.
2
Plaintiffs filed suit on the eve of redress of the civil rights that they assert were being denied. Enforcement of those rights had been the subject of long and tortuous negotiations prior to plaintiffs' suit which were successfully concluded shortly thereafter.
3
We recognize that the evidence would have supported a finding that plaintiffs' suit was a catalyst in the successful resolution of the issue, but we cannot say that a contrary finding was clearly erroneous. Because the question was one of how much, if at all, plaintiffs contributed to the successful outcome, the finding of the district court that they made no compensable contribution is a finding that is unassailable.
4
AFFIRMED.
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638 F.2d 167
UNITED STATES of America, Plaintiff-Appellee,v.Ariel Henry TAGER, Defendant-Appellant.
No. 79-1691.
United States Court of Appeals,Tenth Circuit.
Argued July 9, 1980.Decided Oct. 20, 1980.
James R. Wyrsch of Koenigsdorf, Kusnetzky & Wyrsch, Kansas City, Mo., for defendant-appellant.
Michael DeFeo, Atty., U. S. Dept. of Justice, Kansas City, Mo. (James P. Buchele, U. S. Atty., Topeka, Kan., David B. B. Helfrey and Grover G. Hankins, Attys., U. S. Dept. of Justice, Kansas City, Mo., on brief), for plaintiff-appellee.
Before SETH, Chief Judge, and HOLLOWAY and SEYMOUR, Circuit Judges.
SETH, Chief Judge.
1
This appeal arises from the conviction of appellant for mail fraud. 18 U.S.C. § 1341. The government alleged a scheme involving many people, including doctors, lawyers, and automobile repairmen, who were engaged in defrauding insurance companies. Appellant, an attorney, was indicted and prior to trial he moved to dismiss the indictment and to suppress certain evidence. The motions were denied, and it is from the denial of these motions that Mr. Tager appeals.
2
The relevant facts are as follows. The investigation leading to the indictment herein at issue was started by a Mr. Edward House employed by the Insurance Crime Prevention Institute (ICPI). The ICPI is an organization funded by over 300 insurance companies to investigate possible frauds against insurance companies. Neither the ICPI nor Mr. House was in any official position whatever. Mr. House worked as an investigator of ICPI and developed sufficient evidence to refer this case to the United States Postal Inspection Service. Thereafter he continued to assist in the investigation at the government's invitation.
3
A grand jury was convened in Kansas City, Kansas. The government moved for disclosure to Mr. House of certain grand jury materials to enable him further to assist in the investigation. The motion was made under Fed.R.Crim.P. 6(e) (3)(C)(i) (then Rule 6(e)(2)(C)(i)). The trial judge who heard the motion granted it and ordered the requested disclosure. The investigation was subsequently transferred from the Kansas City, Kansas grand jury to a grand jury in Topeka, Kansas. An indictment was returned against appellant and others in Topeka. As stated above, appellant moved to dismiss the indictment and to suppress evidence, but the motions were denied. The trial judge hearing these motions had misgivings as to whether the disclosure to Mr. House was authorized by Rule 6(e); however, he felt bound by the prior decision of the judge who originally authorized the disclosures. This second judge registered his misgivings in a thorough memorandum accompanying his order denying the motions. We have followed and rely to a large measure on his analysis.
4
The primary issue on appeal is whether the disclosure in these circumstances of grand jury materials to Mr. House was within the authority provided by Fed.R.Crim.P. 6(e). For the reasons that follow we conclude it was not.
5
The Federal Rules of Criminal Procedure prohibit generally the disclosure of "matters occurring before the grand jury." Fed.R.Crim.P. 6(e)(2). This rule codifies the long-standing policy of secrecy provided grand jury proceedings. The compelling policy reasons supporting this strict rule have been described in many cases. See, e. g., Douglas Oil Co. of California v. Petrol Stops Northwest, 441 U.S. 211, 99 S.Ct. 1667, 60 L.Ed.2d 156; Dennis v. United States, 302 F.2d 5 (10th Cir.); Bary v. United States, 292 F.2d 53 (10th Cir.); United States v. Rose, 215 F.2d 617, 628-29 (3d Cir.). This rule of secrecy "must not be broken except where there is a compelling necessity," shown with particularity. United States v. Proctor & Gamble Co., 356 U.S. 677, 682, 78 S.Ct. 983, 986, 2 L.Ed.2d 1077.
6
There are several exceptions to the rule of secrecy. These are for disclosure to a government attorney, Rule 6(e)(3)(A)(i); to government personnel assisting the government attorney, Rule 6(e)(3)(A)(ii); by court order preliminarily to or in connection with a judicial proceeding, Rule 6(e)(3)(C)(i); and to a criminal defendant under certain conditions, Rule 6(e)(3)(C)(ii). Inasmuch as Mr. House is neither a government attorney, government "personnel," nor a criminal defendant, subsections (A)(i), (A)(ii), and (C)(ii) are not applicable. Accordingly, the government argues the authority provided the court in subsection (C)(i) (in connection with a judicial proceeding) is sufficiently broad to encompass the disclosure to Mr. House ordered here.
7
As an initial concern we note that Mr. House did in fact review transcripts of the proceedings before the grand jury. The government conceded this at the hearing on the motions for dismissal and suppression. The government attorney stated: "The witness (Mr. House) will testify he has reviewed grand jury transcripts in this investigation. The government concedes that." VII Rec. at 117. The disclosure is therefore controlled by Rule 6(e), and United States v. Interstate Dress Carriers, Inc., 280 F.2d 52 (2d Cir.) (disclosure of material that does not reveal matters occurring before grand jury not controlled by Rule 6(e)), is inapposite.
8
Subsection (C)(i) excepts from the rule of secrecy disclosures "when so directed by a court preliminarily to or in connection with a judicial proceeding." The government contends that the grand jury proceedings in this case are "judicial proceedings" within the meaning of Rule 6(e)(3)(C)(i). The government cites several cases in support of this proposition. See United States v. Stanford, 589 F.2d 285 (7th Cir.); In re Grand Jury Witness Subpoenas, 370 F.Supp. 1282 (S.D.Fla.); In re Minkoff, 349 F.Supp. 154 (D.R.I.). Indeed, one court has termed this proposition "well settled." In re Braniff Airways, Inc., 390 F.Supp. 344, 346 (W.D.Tex.).
9
The proposition is hardly well settled. While the Minkoff court ruled that a grand jury proceeding was a "judicial proceeding" within the meaning of subsection (C)(i), it limited its power to order disclosure to discharged grand jury proceedings. The court conditioned its order granting disclosure upon the adjournment of the grand jury. The court said:
10
"Where termination is a condition of disclosure, it is obvious that such disclosure can neither help nor harm the completed investigation. In such circumstances I find I have the power to order disclosure, without deciding today the power of the court to order disclosure of grand jury minutes which would take effect before the dismissal of the grand jury."
11
In re Minkoff, 349 F.Supp. 154, 156-57 (D.R.I.). In addition, the disclosure was to a witness of her own testimony before the grand jury and not to an investigator to assist the investigation. Thus Minkoff provides no support for the government's position in this case. The grand jury proceedings here were in full force at the time disclosure was ordered.
12
Furthermore, the unanswered question in Minkoff was recently resolved by the same court in In re Grand Jury Proceedings, 445 F.Supp. 349 (D.R.I.), appeal dismissed, 580 F.2d 13 (1st Cir.) (nonappealable order). The court there held that it was without subsection (C)(i) power to order disclosure to state investigative personnel during an ongoing grand jury proceeding.
13
The government's reliance on In re Braniff Airways, Inc., 390 F.Supp. 344 (W.D.Tex.), and In re Grand Jury Witness Subpoenas, 370 F.Supp. 1282 (S.D.Fla.), is misplaced. The orders in those cases involved the disclosure to grand jury witnesses of transcripts of their own testimony before the ongoing grand jury. Both cases assumed the "judicial proceeding" requirement of subsection (C)(i) to be satisfied. The Braniff court then exercised its discretion in favor of disclosing transcripts of the witness' own testimony to that particular witness, given the unusual complexity and length of those proceedings. The Subpoenas court denied disclosure, finding that the movants had failed to show a particularized and compelling need for disclosure. We are not here faced with the disclosure of a witness' testimony to that witness during an ongoing grand jury proceeding. We therefore express no view as to the propriety of a (C)(i) order approving such a disclosure. It is enough for our purpose to observe that Braniff and Subpoenas offer little, if any, support for the government in this case.
14
Indeed, the Subpoenas court, the Southern District of Florida, denied a subsection (C)(i) motion for disclosure to state government personnel to assist in the investigation of an ongoing grand jury. In re Miami Federal Grand Jury No. 79-8, 478 F.Supp. 490 (S.D.Fla.). The court ruled that the government had failed to show a particularized and compelling need for disclosure, mere familiarity with the case and local expertise being insufficient to justify breaching the grand jury's veil of secrecy. For the purpose of deciding the case before it the Miami court was willing to assume that subsection (C)(i)'s "judicial proceeding" requirement was satisfied. The court observed, however, that "(t)o apply this provision to the very grand jury from which disclosure is sought seems somewhat illogical." Id. at 493.
15
The only case offered by the government which parallels the facts before us and arguably supports the government's position is United States v. Stanford, 589 F.2d 285 (7th Cir.), cert. denied, 440 U.S. 983, 99 S.Ct. 1794, 60 L.Ed.2d 244. There the Seventh Circuit held that the lower court properly ordered disclosure to state government personnel under subsection (C)(i) of proceedings occurring before an ongoing grand jury to assist the federal government in its investigation. The court decided that the "judicial proceeding" requirement was met. It then concluded that the lower court had not abused its discretion. It did not address the propriety of subsection (C)(i) disclosure to a private, nongovernmental investigator. And it is unclear whether the Stanford court would have reached the same result if disclosure had been to a person like Mr. House instead of state government officials.
16
In addition to its lack of case support, the government's position is further undermined by the structure of Rule 6(e). The need for assistance in federal investigations which is highlighted by the issue before us was not a matter within the contemplation of subsection (C)(i). The need for assistance is addressed by subsection (A)(ii). This subsection authorizes disclosure to "such government personnel as are deemed necessary by an attorney for the government to assist an attorney for the government in the performance of such attorney's duty to enforce federal criminal law." Moreover, the drafters of (A)(ii) considered whether the assistance of private persons like Mr. House should be included. They decided against such inclusion by limiting (A)(ii) to "government personnel." See Proposed Amendments to the Federal Rules of Criminal Procedure: Hearings on H.R. 5864 Before the Subcomm. on Criminal Justice of the House Comm. on the Judiciary, 95th Cong., 1st Sess. 92 (1977). See also S.Rep.No. 354, 95th Cong., 1st Sess. 5-6, reprinted in (1977) U.S.Code Cong. & Admin.News pp. 527, 528-30.
17
Subsection (C)(ii) contemplates proceedings other than the grand jury proceeding itself, otherwise there is little purpose for the other subsections. As previously discussed, some courts have authorized disclosures in connection with a grand jury proceeding under subsection (C)(i). But these were not for the purpose of assisting the ongoing grand jury investigation, which is the province of subsection (A)(ii); they were for witnesses of their own testimony to prevent unfairness which would otherwise have occurred. We must hold that subsection (C)(i) "is not designed nor has it been used in the past as a source of authority for a court to order disclosure to assist with the present grand jury proceedings." In re Grand Jury Proceedings, 445 F.Supp. 349 (D.R.I.), appeal dismissed, 580 F.2d 13 (1st Cir.).
18
While the Supreme Court has not addressed this question, in Douglas Oil Co. of California v. Petrol Stops Northwest, 441 U.S. 211, 99 S.Ct. 1667, 60 L.Ed.2d 156, the Court stated with regard to exceptions to secrecy:
19
"(C)ourts have been reluctant to lift unnecessarily the veil of secrecy from the grand jury. At the same time, it has been recognized that in some situations justice may demand that discrete portions of transcripts be made available for use in subsequent proceedings."
20
Id. at 219-20, 99 S.Ct. at 1673 (emphasis added). The Court then announced the standard governing subsection (C)(i) disclosures as follows:
21
"Parties seeking grand jury transcripts under Rule 6(e) must show that the material they seek is needed to avoid a possible injustice in another judicial proceeding, that the need for disclosure is greater than the need for continued secrecy, and that their request is structured to cover only material so needed."
22
Id. at 222, 99 S.Ct. at 1674. (emphasis added).
23
Accordingly, we hold that the trial court was without authority under Rule 6(e)(3)(C)(i) to order disclosure to Mr. House to assist the ongoing grand jury investigation. The grand jury proceedings themselves from which information is sought to be revealed are not the "judicial proceeding" contemplated by Rule 6(e)(3)(C)(i) as here sought to be applied. The structure of the Rule determines this conclusion. As we have already said, we intimate no views concerning the propriety in general of subsection (C)(i) disclosure to a grand jury witness during an ongoing grand jury proceeding in order to avoid injustice to that witness. Also, in view of our disposition of the case we do not pass on the pre-indictment publicity issue.
24
Appellant's remaining contentions are persuasively and correctly disposed of by the lower court. We need consider them no further.
25
REVERSED and REMANDED for further proceedings consistent with the views expressed herein.
26
SEYMOUR, Circuit Judge, dissenting.
27
In reaching its decision under Fed.R.Crim.P. 6(e), the majority distinguishes United States v. Stanford, 589 F.2d 285 (7th Cir. 1978), cert. denied, 440 U.S. 983, 99 S.Ct. 1794, 60 L.Ed.2d 244 (1979). Persuaded, as I am, by the Seventh Circuit's reading of the "judicial proceeding" language in Rule 6(e), see id. at 292, I dissent from the holding that the trial court lacked authority under Rule 6(e)(3)(C)(i) to order disclosure to Mr. House.
28
Stanford construed a predecessor version of Rule 6(e). See id. at 289 n.1. Nevertheless, both that version and the one applicable here permit disclosure "when so directed by a court preliminarily to or in connection with a judicial proceeding."
29
Like Tager, the Stanford defendants were convicted of federal mail fraud. The Illinois Department of Public Aid (IDPA) was a victim in the welfare fraud scheme. During the grand jury investigation, the district court issued orders under Rule 6(e) that permitted disclosure of grand jury materials, including transcripts, to FBI agents, IDPA employees, and Illinois Department of Law Enforcement personnel. These disclosures were necessary to provide federal prosecutors with expert assistance in aid of the grand jury investigation.
30
On appeal, Stanford and his codefendants claimed, inter alia, that because a grand jury investigation was not a Rule 6(e) "judicial proceeding," the disclosure orders were improper. The Seventh Circuit rejected the argument:
31
"Rule 6(e) permits disclosure orders not only 'in connection with' but also 'preliminarily to' a judicial proceeding. Although a grand jury proceeding may not itself be 'determinable by a court,' Special February 1971 Grand Jury v. Conlisk, 490 F.2d 894, 897 (7th Cir. 1973), quoting Doe v. Rosenberry, 255 F.2d 118, 120 (2d Cir. 1958), it is nevertheless preliminary to such proceedings. See United States v. Universal Manufacturing Co., 525 F.2d 808 (8th Cir. 1975); In re Special February 1971 Grand Jury v. Conlisk, supra."
32
Stanford, 589 F.2d at 292. In my view, this reasoning applies to the disclosure order here.1
33
I cannot agree with the majority's implied suggestion that the Seventh Circuit might have decided Stanford in reverse had the disclosures been made to private, nongovernmental investigators. Stanford rests upon the actual "judicial proceeding" language now in subsection (3)(C)(i), not upon the identity of those to whom disclosure is made. Even the majority's own view of that subsection does not suggest such a government-nongovernment distinction.
34
Neither can I agree that the structure of Rule 6(e) implies a lack of authority for disclosure orders such as here. The majority views the grouping principle of Rule 6(e)(3) to be disclosures in aid of grand jury investigations (subsections (A) and (B)) versus disclosures in judicial proceedings that occur after discharge of the grand jury (subsection (C)). The grouping principle might just as easily be viewed as disclosures that do not require court approval versus disclosures that do. Permitting disclosures to government personnel without court approval, as Congress did in subsection (A), does not of itself imply a prohibition in subsection (C) against court-approved disclosure to nongovernment personnel.
35
Finally, I find nothing in the legislative history cited by the majority that suggests a per se rule against court-approved disclosure to nongovernment personnel during an ongoing grand jury investigation for the sole purpose of aiding that investigation. I would hold that Rule 6(e)(3)(C)(i) permits such disclosure within the discretion of the court.
1
In direct support for its contrary holding, the majority cites language from In re Miami Federal Grand Jury No. 79-8, 478 F.Supp. 490 (S.D.Fla.1979), and In re Grand Jury Proceedings, 445 F.Supp. 349 (D.R.I.), appeal dismissed, 580 F.2d 13 (1st Cir. 1978) (lack of appellate jurisdiction). The Southern District of Florida is quoted as saying that the application of Rule 6(e)(3)(C) "to the very grand jury from which disclosure is sought seems somewhat illogical." 478 F.Supp. at 493. But the Florida court just as plainly conceded that "(c)onceivably, however, subsection C can be seen as providing the court with a discretionary means of disclosure beyond the confines of subsection A." Id. In the end, the court found it unnecessary to resolve the issue, for it concluded that the Government failed to show the requisite need for disclosure
The District of Rhode Island did say subsection (C)(i) was "not designed" to permit disclosures during ongoing grand jury investigations. See 445 F.Supp. at 350. But the thrust of its holding was that the federal prosecutor failed to establish the requisite need for disclosure to the state detective. See id. It was on this discretionary basis only that the First Circuit viewed the holding. See 580 F.2d at 17.
In sum, I cannot find in either case the solid support found by the majority for its reading of Rule 6(e)(3)(C)(i).
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397 F.Supp. 350 (1975)
Kenneth H. WARNER et al.
v.
Charles F. REPLINGER, Chairman and member of the Rhode Island State Pilotage Commission,[1] et al.
Civ. A. No. 74-90.
United States District Court, D. Rhode Island.
May 22, 1975.
*351 Martin Malinou, Providence, R.I., for plaintiffs.
Ronald Dwight, Special Asst. Atty. Gen., Providence, R.I., William J. Riccitelli, Cranston, R.I., for defendants.
MEMORANDUM OPINION
PETTINE, Chief Judge.
This opinion is supplemental to this Court's unpublished Memorandum and Order dated July 2, 1974,[2] wherein I denied the plaintiffs' request for the convening of a three-judge court, upheld their standing to prosecute this suit, found the defendants' contentions were insufficient to sustain a motion for summary judgment, and concluded that there only remained a factual determination by stating that the "very core" and "sole remaining issue" is ". . . whether the R. I. law is authorized by and falls within the scope of 46 U.S.C. Sec. 211" the "resolution" of which ". . . lies in determining whether Block Island Sound is a bay, inlet, river, harbor or port within the meaning of the 1789 federal statutes."[3]
46 U.S.C. Sec. 211 reads:
"Until further legislative provision shall be made by Congress all pilots in the bays, inlets, rivers, harbors, and ports of the United States shall continue to be regulated in conformity with the existing laws of the States respectively wherein such pilots may be, or with such laws as the States may respectively hereafter enact for the purpose."
Defendants contend that since the commencement of this action the plaintiffs Warner and Losch have been licensed by the State of Rhode Island and therefore the case as to these plaintiffs has become moot, citing DeFunis v. Odegaard, 416 U.S. 312, 94 S.Ct. 1704, 40 L.Ed.2d 164 (1974). I need not reach this issue since it is undisputed the status of plaintiff Michael D. Ball remains unchanged. His standing to sue sustains *352 the controversy and a decision by this Court will definitively resolve the issue as to the questioned Rhode Island statute.
Findings of Fact
The affidavits, pleadings and the testimony in this hearing present a broad and somewhat amorphous background for a factual finding as to what constitutes a "bay", "inlet", "river", "harbor", or "port" within the meaning of the federal statute.
There is no solid legal precedent and so we must look to ancient documents, history, and as the plaintiffs urge, Article 7 of the Convention on the Territorial Sea and The Contiguous Zone.
By reference to Chart 1211 (19th ed) National Ocean Survey, National Oceanic and Atmospheric Administration, United States Department of Commerce, the plaintiffs drew various configurations by which the Rhode Island legislature could have intended to describe "Block Island Sound".[4] These were referred to as Area 1, comprising 203.1 square miles and Area 2, of 337.9 square miles. The boundaries of each were drawn out[5] and described as broad continuations of the open sea which cannot be termed a bay, inlet, river, harbor or port. With these configurations as a premise the defendants look to Article 7 of the Convention on the Territorial Sea and The Contiguous Zone, T.I.A.S. No. 5639, approved by the Senate, May 26, 1960, 106 Cong.Rec. 1196, and ratified March 24, 1961, 44 State Dept. Bull. 609. It defines a "bay" as ". . . a well marked indentation whose penetration is in such proportion to the width of the mouth as to contain landlocked waters and constitutes more than a mere curvature of the coast"; and further provides a test which requires that the area of a bay must be equal to or greater than the area within its closing lines as would be contained in a semi-circle whose diameter is equal to the distance between the *353 entrance points to the bay; "Where, because of the presence of islands, an indentation has more than one mouth, the semi-circle shall be drawn on a line as long as the sum total of the lengths of the lines across the different mouths."[6]
The configurations drawn by the plaintiffs' expert as set forth in N. 5 supra, readily show that this test is not satisfied and, if applied and considered alone, Block Island Sound would not constitute a bay within the meaning of the convention. In support of their position the plaintiffs cite United States v. California, 381 U.S. 139, 85 S.Ct. 1401, 14 L.Ed.2d 296 (1965) as adopting this international rule for defining a bay. By way of dicta, I find the plaintiffs' position unpersuasive when applied within the factual framework before me because the Convention pertained to national sovereignty and proprietary interests which are not the issues here as existed in United States v. California, supra, where suit was brought by the United States against the state of California as it related to the dominion over submerged lands and mineral rights under the three mile belt of sea off the California coast. The court specifically stated at page 142, 85 S.Ct. 1401, the suit was to determine "mineral rights" under the three mile belt of sea off the coast of California, and it adopted the convention definition only for the purposes of the Submerged Lands Act, id. 165, 85 S.Ct. 1401. The case did not deal with such navigational issues as are present in this controversy. To me the two situations cannot be equated because they present diametric positions. Navigation with all its attendant dangers is a far cry from asserted ownership of land which happens to be under water. However, conceding arguendo respectable extrapolation to the contrary may be made so as to include navigational situations, the plaintiffs nevertheless do not succeed. On a sheer factual basis the semi-circle test does not apply, for the evidence fails to establish that the configurations drawn by the plaintiffs are controlling.
The plaintiffs' own expert could give no reason why the pattern should not be applied to the entire geographical body of water enclosed within lines drawn at the East River in New York City on the west and between Point Judith, Block Island and Montauk on the east.[7] If this were done it is conclusive, as admitted, that the area enclosed, including Block Island Sound and Long Island Sound, would constitute a bay within the meaning of the Convention. To me this configuration, which takes into consideration *354 all the different mouths, makes infinitely more sense within the rationale of international relations and comports with the clear language of the Convention that "where, because of the presence of islands, an indentation has more than one mouth, the semi-circle shall be drawn on a line as long as the sum total of the lengths of the lines across the different mouths." N. 6, supra.
Furthermore, the terms of the Convention do not apply to so-called "historic" bays. "Essentially these are bays over which a coastal nation has traditionally asserted and maintained dominion with the acquiescence of foreign nations." United States v. California, supra at p. 172, 85 S.Ct. at p. 1419. At trial it was conceded that foreign fishing vessels are not permitted to fish in Block Island Sound and though specific acts of dominion were not introduced, historically the term "bay" was loosely used in the 18th century encompassing configurations that were triangular, long and narrow, and broad areas with a wide expanse of sea.[8] As examples one need only look to the expansive indentations of Massachusetts Bay, or the Bays of Bonavista, Trepassey or Placentia in Newfoundland. This was all placed on the record.
The plaintiffs further argue that a bay is a place used by boats as a harbor of refuge, a port or anchorage and that their witnesses testified such is not so as to Block Island Sound. On the other hand the defendants' witnesses who stated the contrary were more convincing and were bolstered by historic documentation as reflected in Defendants' Exhibit D, Des Barres, J. F. W., The Coast of Nova Scotia, New England, New York, Jersey (London 1778), Map No. 80, clearly showing that the area directly to the east of Block Island was used as an anchorage and harbor even in the 1770's. The Town of New Shoreham has had a port of necessity since its settlement. All this together with the presence of numerous shallow soundings throughout the Sound as shown on the maps introduced at trial and the evidence of the navigational hazards existing therein belie the assertion that the sound be considered part of the open ocean.[9]
Finally the plaintiffs urge that even if Block Island Sound contains a bay as a matter of constitutional law their Connecticut licenses to pilot foreign flag and American registry vessels are valid to transverse the waters of Block Island Sound en route to and from Connecticut ports since such routes are more than 3 miles off the Rhode Island shores at high water mark (except as to one of these routes for a distance of 1 mile) and that this is significant because,
"Sovereign jurisdiction of the three mile belt of territorial sea became vested in the United States, rather than the states, when, after 1776 the concept of territorial sea was recognized and its extent defined by the national government." (Plaintiffs' brief p. 55).
The terse reply is that no one questions the federal government's control over all navigable waters. However, it saw fit to enact 46 U.S.C. sec. 211 which specifically validates the regulation of pilots in the "bays" by the states respectively "wherein such pilots may be". It follows if you pass through a "bay" or an "inlet" or "river," a pilot of the state within which they lie may be required by such state. These pilotage laws exist at the sufferance of Congress, and it has not seen fit to preempt this field. Certainly under the authority of the Commerce clause it can act. *355 However, as decisional law clearly establishes, such laws as we are discussing "fall within that class of powers which may be exercised by the states until Congress shall see fit to act." Anderson v. Pacific Coast Steamship Company, 225 U.S. 187, 32 S.Ct. 626, 56 L.Ed. 1047 (1912). As this court stated in its July 2, 1974 memorandum, the sole issue is whether Block Island Sound is a bay, inlet, river, harbor or port. Once that is established, there is no doubt it falls within the ambit of 46 U.S.C. sec. 211, and Rhode Island may constitutionally enact pilotage laws. The very wording of the section itself is unclouded and precise. The enabling legislation we are talking about concerns the sovereignty of the United States in all questions of navigation with regulatory power in the state, absent exercise of its paramount authority.[10]
46 U.S.C. sec. 212, which reads, "The master of any vessel coming into or going out of any port situated upon waters which are the boundary between two States, may employ any pilot duly licensed or authorized by the laws of either of the States bounded on such waters, to pilot the vessel to or from such port" is not relevant. No evidence was introduced, nor can this court conclude from a reading of the maps, that Block Island Sound is a boundary between Connecticut and Rhode Island or New York and Rhode Island.
The plaintiffs' reliance on The Swift Arrow, 292 F. 651 (D.Mass.1923), is misplaced, for as the defendants have stated, "In that case, the vessel made the mistake of using a R. I. pilot in Mass. waters. The vessel was not required to take a R. I. pilot because she was outside Narragansett Bay and not yet within waters where R. I. law then required a R. I. pilot, but the vessel was required by Mass. law to have a Mass. pilot in a Mass. port" (Defendants' brief p. 12). It does not stand for the constitutional contention recited by the plaintiffs.
The plaintiffs also cite Leech v. Louisiana, 214 U.S. 175, 29 S.Ct. 552, 53 L. Ed. 956 (1909), as authority "touching" on the position they take. Louisiana, relying on what is now 46 U.S.C. sec. 212, made it a criminal offense for a pilot not licensed under its laws to pilot a foreign vessel from the Gulf of Mexico to New Orleans though he held a Mississippi license.
The court, after finding that it was error to assume that the whole Mississippi was the boundary between Louisiana and Mississippi, held ". . . the section relied upon does not apply. That being out of the way, Louisiana had power to pass her local regulations." Id. 29 S.Ct. at 553. The plaintiffs can find little comfort in this case.
In a total sense, I find the defendants' evidence more persuasive. It is of greater weight.
Though it cannot always be that the application of the law and factual findings spawn pragmatic results, the court feels that this opinion achieves that end. In a very real sense there is much at stake for the State of Rhode Island in ensuring safe passage through its waterways. The sealed hazards of the sea in a bay such as Block Island Sound imperil not only the vessels that plow its waters, but more viciously the sacred lives of all those on board and the environmental integrity of the state's coastline. These dangers can only be avoided by those intimately familiar with such mysteries.
It is the sum total of the sanity and intelligence of the authorized congressional enactment which leaves to the states the determination of the qualification of those who shall be trusted with this responsibility, until Congress acts otherwise.
I find that Block Island Sound is a bay within the meaning of 46 U.S.C. sec. 211 and that R.I.Gen.L., 1956 (1969 Reenactment) sec. 46-9.1-1 et seq., *356 properly requires that vessels transversing the waters of Block Island Sound be piloted by the individuals licensed by the State Pilotage Commission.
The defendants will draft an order accordingly.
APPENDIX A
July 2, 1974.
As Amended July 8, 1974.
MEMORANDUM AND ORDER
PETTINE, Chief Judge.
Seeking declaratory, 28 U.S.C. Secs. 2201, 2202 and injunctive relief, the plaintiffs in this civil action challenge R.I.Gen.Laws 1956 (1969 reenactment) sec. 46-9.1-1 et seq., a statute which requires that all pilots of foreign flag and American registry vessels transversing Block Island Sound be licensed by the State of Rhode Island. The plaintiffs allege that the Rhode Island statute violates the Commerce Clause, Art. 1, Sec. 8, cl. 3, the Supremacy Clause, Art. 6, and the Due Process and Equal Protection Clauses of the Fourteenth Amendment to the United States Constitution. At present, this case comes before this Court on the plaintiffs' application for a three judge court pursuant to 28 U.S.C. Secs. 2281, 2284, and the defendants' motion[1] for summary judgment in accordance with Rule 56 of the Fed.R.Civ. P. against the plaintiffs.
Each of the named plaintiffs is a citizen and resident of the State of Connecticut. Each of the defendants is a citizen of the State of Rhode Island. There being more than $10,000 in controversy as to each plaintiff, jurisdiction is conferred upon this Court by 28 U.S. C. Sec. 1331 and 28 U.S.C. Sec. 1332.
FACTUAL BACKGROUND
R.I.Gen.Laws 1956 (1969 reenactment) sec. 46-9.1-5 requires every foreign vessel or American vessel under registry transversing the waters of Block Island Sound to take on a pilot licensed by the State of Rhode Island or by any other state having concurrent jurisdiction over these waters. To enforce this requirement, sec. 46-9.1-10 provides:
"Use of unlicensed pilots. (a) It shall be unlawful for the master, owner, agent or consignee of any vessel, not exempt from the provisions of this chapter, entering or departing from any port or landing place of the state or transversing the waters of Block Island Sound to take on any person not licensed as a Block Island Sound pilot under this chapter or any person not licensed as such pilot under the laws of any state having concurrent jurisdiction over such waters to pilot such a vessel in said waters.
(b) Piloting Without License. It shall be unlawful for any person not licensed as a Block Island Sound pilot or any person not licensed as such pilot by any state having concurrent jurisdiction over said waters to pilot or offer to pilot a vessel, not exempt from the provisions of this chapter entering or departing from any port or landing place of this state or transversing the waters of Block Island Sound. It shall likewise be unlawful for any master or person on board a tug or towboat to tow such a vessel unless such vessel shall have on board a duly licensed state pilot.
(c) Violations. Violation of the provisions of subparagraphs (a) and (b) of this section shall be a misdemeanor punishable by a fine not to exceed five hundred dollars ($500), or by imprisonment not to exceed one (1) year, or both."
All of the plaintiffs are licensed by the State of Connecticut to pilot foreign flag and American registry vessels through Connecticut waters but none have been licensed by the State of Rhode *357 Island. Each has earned his living by piloting vessels through the waters of Block Island Sound to Connecticut ports. In April 1973 defendant Replinger notified the Gulf Oil Trading Corporation, a corporation whose vessels plaintiff Warner had been piloting, that their employment of Warner violated sec. 46-9.1-10. Warner alleges that since the date of defendant Replinger's letter he has been unable to secure employment as a pilot with the Gulf Oil Trading Corporation and as a result has sustained a loss of pilotage fees in excess of $30,000. The complaint also asserts that Losch and Ball are presently the focus of an investigation by the defendants and each is being threatened with arrest and prosecution pursuant to sec. 46-9.1-10(c).
THREE JUDGE COURT
When an injunction is sought against the enforcement of a state statue on grounds of unconstitutionality, a three judge court is required. 28 U.S.C. secs. 2281 and 2284. A three judge court is improper if the sole claim is that a state statute conflicts with a federal statute which is controlling by virtue of the Supremacy Clause. Swift and Co. v. Wickham, 382 U.S. 111, 86 S.Ct. 258, 15 L.Ed.2d 194 (1965). Nor need a three judge court be convened when prior decisions make the claim that a statute is unconstitutional wholly insubstantial, legally speaking non-existent. Swift and Co. v. Wickham, supra; Bailey v. Patterson, 369 U.S. 31, 82 S.Ct. 549, 7 L.Ed.2d 512 (1962); Ex parte Poresky, 290 U.S. 30, 54 S.Ct. 3, 78 L.Ed. 152 (1933). The Supreme Court in Bailey v. Patterson, supra, stated:
"The three-judge requirement is a technical one to be narrowly construed, Phillips v. United States, 312 U.S. 246, 251, 61 S.Ct. 480, 483, 85 L. Ed. 800. The statute comes into play only when an injunction is sought `upon the ground of the unconstitutionality' of a statute. There is no such ground when the constitutional issue presented is essentially fictitious." 369 U.S. at 33, 82 S.Ct. at 551.
Consideration of these principles necessarily involves an examination of the nature and merits of this controversy.
The plaintiff asserts three basic grounds to support this action. The first seeks a declaration that sec. 46-9.1 -1 et seq. violates Art. 1, Sec. 8, cl. 3, the Commerce Clause of the U. S. Constitution.[2] The courts have long agreed that state pilotage laws are regulations of commerce. Kotch v. Board of River Port Pilot Com'rs, 330 U.S. 552, 67 S.Ct. 910, 91 L.Ed. 1093, re-hearing denied 331 U.S. 864, 67 S.Ct. 1196, 91 L.Ed. 1869 (1947); Anderson v. Pacific Coast Steamship Co., 225 U.S. 187, 32 S.Ct. 626, 56 L.Ed. 1047 (1912); Wilson v. McNamee, 102 U.S. 572, 26 L.Ed. 234 (1881); Ex parte McNiel, 80 U.S. (13 Wall) 236, 20 L.Ed. 624 (1872); Cooley v. Board of Wardens of Port of Philadelphia, 53 U.S. (12 How.) 299, 13 L.Ed. 996 (1851). However, each of these courts also unanimously hold that in light of the passage of 1 Stat. at Large 54, 46 U.S.C. Sec. 211[3] by Congress in 1789, state pilotage laws governing the waters described in 46 U.S.C. Sec. 211 do not violate the Commerce Clause. In Anderson v. Pacific Coast Steamship Co., supra, Mr. Justice Hughes succinctly stated the basis for this holding:
"When the Constitution of the United States was adopted, each state had its own regulations of pilotage. While this subject was embraced within the grant of the power `to regulate commerce with foreign nations and among the several states' (art. 1, § 8), Congress did not supersede the state legislation, *358 but by the act of August 7, 1789, chap. 9, § 4 (1 Stat. at L. 53, 54, Rev.Stat. § 4235, U.S.Comp.Stat.1901, p. 2903), it was enacted that `all pilots in the bays, inlets, rivers, harbors, and ports of the United States, shall continue to to be regulated in conformity with the existing laws of the states respectively wherein such pilots may be, or with such laws as the states may respectively hereafter enact for the purpose, until further legislative provision shall be made by Congress.' This was `a clear and authoritative declaration by the first Congress, that the nature of this subject is such that until Congress should find is necessary to exercise its power it should be left to the legislation of the states;' and it has long been established by the decisions of this court that, although state laws concerning pilotage are regulations of commerce, they fall within that class of powers which may be exercised by the states until Congress shall see fit to act." 225 U.S. at 195, 32 S.Ct. at 629.
Consequently, so long as a state statute governing the licensing of pilots falls within the ambit of 46 U.S.C. sec. 211, the state statute is permissible under the Commerce Clause. Thus, the sole issue left to be resolved by this ground is the same posited by the second ground, does the R. I. statutory scheme established by sec. 46-9.1-1 et seq. conflict with 46 U.S.C. sec. 211 thereby creating a violation of the Supremancy Clause? That being the case, 28 U.S.C. § 2281 does not require the convening of a three judge court to resolve the issues posed by the plaintiffs' first two grounds. Separate from the possible conflict with the relevant federal statutes, no substantial commerce clause claim is raised by the plaintiffs.[4]
Finally, the plaintiffs allege that the R. I. legislation without due process of law deprives them of a property right granted to them by the license they have obtained from the State of Connecticut. This assertion is without foundation. Connecticut is without *359 power to issue a license covering pilotage through waters under the exclusive jurisdiction of R. I. and as to those waters over which the two states have concurrent jurisdiction, R. I. recognizes the validity of Connecticut's license.[5] Accordingly, the plaintiffs having asserted no substantial constitutional claims, their motion for a three judge court be and the same is hereby denied.[6]
SUMMARY JUDGMENT
The defendants move for summary judgment pursuant to Rule 56, Fed.R. Civ.P. contending the plaintiffs lack standing in that the R. I. statutory scheme is authorized by 46 U.S.C. sec. 211.
The standing argument is hereby rejected. The plaintiff Warner's allegation that defendants' action has resulted in a $30,000 economic loss of pilotage fees and poses a continuing bar to the means from which he earns his livelihood firmly establishes a personal stake in the outcome as pronounced by decisional law articulating Art. 3, U. S. Constitution, requirements:
"Where the party does not rely on any specific statute authorizing invocation of the judicial process, the question of standing depends upon whether the party has alleged such a `personal stake in the outcome of the controversy,' Baker v. Carr, 369 U.S. 186, 204, [82 S.Ct. 691, 703, 7 L.Ed.2d 663], as to ensure that `the dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution.' Flast v. Cohen, 392 U.S. 83, 101 [88 S.Ct. 1942, 1953, 20 L.Ed.2d 947]." Sierra Club v. Norton, 405 U. S. 727, 732, 92 S.Ct. 1361, 1364, 31 L. Ed.2d 636. See also United States v. SCRAP, 412 U.S. 669, 686, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973); Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25 L.Ed.2d 192 (1973).
This brings us to the very core and sole remaining issue of the controversy, i.e., whether the R. I. law is authorized by and falls within the scope of 46 U.S. C. Sec. 211. Resolution lies in determining whether Block Island Sound is a bay, inlet, river, harbor or port within the meaning of the 1789 federal statutes.
The defendants contend that the R. I. statutory scheme is authorized by 46 U.S.C. Sec. 211 and offer as the only document in support of their position a national ocean survey map covering Block Island Sound published by the U. S. Dept. of Commerce National Oceanic and Atmosphere Administration.[7] However, no supporting affidavits were filed, and I must conclude it is insufficient to sustain a summary judgment motion and rule the same is *360 hereby denied unless within 10 days from the issuance of this opinion defendant files affidavit satisfying its burden of proof that no genuine issue of fact exists that the designated waters as shown by the map were intended to and do fall within the scope of 46 U.S.C. sec. 211. Something more than this map is necessary to establish that the waters in question constitute a bay, inlet, river, harbor or port.
So ordered.
NOTES
[1] Since the commencement of this action Chairman Replinger was succeeded in office as a member of the commission by George M. Smith who was subsequently succeeded in office by defendant James T. Beattie. Defendant Vernon D. Dunlap now serves as chairman. Richard J. Israel was succeeded as attorney general by defendant Julius C. Michaelson.
[2] In the interest of reporting this controversy in its entirety and to avoid needless repetition and reference to facts and law of the case as decided by this Court the Memorandum and Order of July 2, 1974 is appended hereto and made a part of this opinion, and denominated Appendix A.
[3] Id. page 359.
[4] "Block Island Sound" is the only description used in the statute. The pertinent provisions of section 5 are:
"46-9.1-5. VESSELS REQUIRED TO TAKE PILOT.
"Every foreign vessel and every American vessel under register entering or departing from any port or landing place of the state or transversing the waters of Block Island Sound shall take a pilot licensed under this chapter or under the laws of any other state having concurrent jurisdiction over these waters; and such vessels shall be subject to rules and regulations promulgated by the commission. In case of refusal to take such pilot, the master, owner, agent or consignee of any such vessel shall pay the established pilotage fee as if a pilot had been employed."
For other provisions see page 356, N 4 and 5, Memorandum and Order July 2, 1974.
[5] AREA 1 The 203.1 sq. mi. (nautical miles) body of water shown on chart 1211 (19th Ed.) National Ocean Survey, National Oceanic and Atmospheric Administration, United States Department of Commerce, bounded by a line drawn from the easterly point of Point Judith, Rhode Island, to the southeasterly point of Block Island, Rhode Island, and a line drawn from the said southeasterly point of Block Island to the easterly point of Montauk Point, Long Island, New York, and a line drawn from said easterly point of Montauk Point to Watch Hill, Rhode Island, and by the land between Watch Hill and the easterly point of Point Judith.
AREA 2 The 337.9 square mile (nautical) body of water shown on chart 1211 (19th Ed.) National Ocean Survey, National Oceanic and Atmospheric Administration, United States Department of Commerce, bounded by a line drawn from the easterly point of Point Judith, Rhode Island, to the southeasterly point of Block Island, Rhode Island, and a line drawn from the said southeasterly point of Block Island to the easterly point of Montauk Point, Long Island, New York, and a line drawn from the westerly point of Montauk (Culloden Point) to the northeasterly point of Gardiner's Island, and a line drawn from the northwesterly point of Gardiner's Island to the southerly point of Plum Island, and a line drawn from the northeasterly point of Plum Island to the southeasterly point of Great Gull Island, and a line drawn from the northeasterly point of Great Gull Island to the Race Point on Fisher's Island, and a line drawn from East Point on Fisher's Island to Watch Hill, Rhode Island, and by the land between Watch Hill and the easterly point of Point Judith. Described as such in plaintiffs' brief pp. 49-53.
[6] The full text of Article 7 is as follows:
"1. This article relates only to bays the coasts of which belong to a single state.
2. For the purpose of these articles a bay is a well-marked indentation whose penetration is in such proportion to the width of its mouth as to contain landlocked waters and constitute more than a mere curvature of the coast. An indentation shall not, however, be regarded as a bay unless its area is as large as, or larger than, that of the semi-circle whose diameter is a line drawn across the mouth of that indentation.
3. For the purpose of measurement, the area of an indentation is that lying between the low-water mark around the shore of the indentation and a line joining the low-water marks of its natural entrance points. Where, because of the presence of islands, an indentation has more than one mouth, the semi-circle shall be drawn on a line as long as the sum total of the lengths of the lines across the different mouths. Islands within an indentation shall be included as if they were part of the water areas of the indentation.
4. If the distance between the low-water marks of the natural entrance points of a bay does not exceed twenty-four miles, a closing line may be drawn between these two low-water marks, and the waters enclosed thereby shall be considered as internal waters.
5. Where the distance between the low-water marks of the natural entrance points of a bay exceeds twenty-four miles, a straight baseline of twenty-four miles shall be drawn within the bay in such a manner as to enclose the maximum area of water that is possible with a line of that length.
6. The foregoing provisions shall not apply to so-called `historic' bays, or in any case where the straight baseline system provided for in article 4 is applied."
[7] See defendants' exhibit A and other map exhibits introduced in evidence.
[8] Thomas Jeffreys, North American Atlas (London 1778), Map 13, (Newfoundland), (Defendants' exhibit B); Gulf of Mexico called the "Bay of Mexico" in the seventeenth century, see John Seller, Atlas Terrestris, (London, Ca. 1676), Map 60, (Defendants' exhibit C).
[9] Defendants' exhibits E and F, "Des Barres," supra; a chart of the Harbour of Rhode Island, William Heather, The Marine Atlas (London 1801) Chart 33.
[10] See Wilson v. McNamee (12 Otto) U.S. 572, 26 L.Ed. 234 (1881); Whistler, 13 F. 295 (D.Or.1882). N.Y. Navigation Law s. 89-b (McKinney's), Opinion of the Attorney General of N.Y., Dec. 17, 1973.
[1] In their motion the defendants "mistakenly refer to themselves as the plaintiffs" and move for a summary judgment "against the defendant". Recognizing this clerical error, the Court will treat the motion as one by the defendants for judgment in their favor and against the plaintiffs.
[2] The Commerce Clause provides, "the Congress shall have power to regulate commerce with foreign nations, and among the several states, and with the Indian tribes."
[3] 46 U.S.C. sec. 211 states, "until further provision is made by Congress, all pilots in the bays, inlets, rivers, harbors, and ports of the United States shall continue to be regulated in conformity with the existing laws of the States respectively wherein such pilots may be, or with such laws as the States may respectively enact for the purpose".
[4] The plaintiffs also claim that the R.I. Statutory Regulations serve no reasonable R.I. purpose. This is ironic because in their opposition to the defendants' motion for summary judgment, the plaintiffs argue that the R.I. General Assembly by enacting this legislation found a need for the use of a local pilots knowledge and experience in transversing these waters. Without question this concerned represents a legitimate state interest. Kotch v. Board of River Port Pilot Com'rs, supra. In Kotch the court wrote:
"Studies of the long history of pilotage reveal that it is a unique institution and must be judged as such. In order to avoid invisible hazards, vessels approaching and leaving ports must be conducted from and to open waters by persons intimately familiar with the local waters. The pilot's job generally requires that he go outside the harbor's entrance in a small boat to meet incoming ships, board them and direct their course from open waters to the port. The same service is performed for vessels leaving the port. Pilots are thus indispensable cogs in the transportation system of every maritime economy. Their work prevents traffic congestion and accidents which would impair navigation in and to the ports. It affects the safety of lives and cargo, the cost and time expended in port calls, and in some measure, the competitive attractiveness of particular ports. Thus, for the same reasons that governments of most maritime communities have subsidized, regulated, or have themselves operated docks and other harbor facilities and sought to improve the approaches to their ports, they have closely regulated and often operated their ports' pilotage system." 330 U.S. at 557-558, 67 S.Ct. at 913.
Additionally, the R.I. legislature adopted the following declaration of policy in conjunction with the passage of this legislation:
"Declaration of policy It is declared to be the policy and intent of the General Assembly and the purpose of this chapter: (1) to provide maximum safety for the dangers of navigation for vessels entering or leaving the waters of this state; (2) to maintain a state pilotage system devoted to the preservation and protection of lives, property and vessels entering or leaving waters of this state at the highest standard of efficiency, and (3) to ensure an adequate supply of pilots well qualified for the discharge of their duties."
Therefore, even this assertion by the plaintiffs has little merit except as it refers to a conflict with 42 U.S.C. sec. 211 and alleges that R.I. possesses no power to regulate the particular waterway in question.
[5] 46-9.1-5 Vessels required to take pilot. Every foreign vessel and every American vessel under register entering or departing from any port or landing place of the state or transversing the waters of Block Island Sound shall take a pilot licensed under this chapter or under the laws of any other state having concurrent jurisdiction over these waters; and such vessel shall be subject to rules and regulations promulgated by the commission.
[6] I have not discussed Count II of the plaintiffs' complaint because the parties have informed the Court in conference that Count II is presently moot. In any case Count II would not warrant a three judge court because the thrust of the plaintiffs' claim here is that state officials are administering a constitutional statute in an unconstitutional manner. Phillips v. United States, 312 U.S. 246, 61 S.Ct. 480, 85 L.Ed. 800; Ex parte Bransford, 310 U.S. 354, 60 S.Ct. 947, 84 L. Ed. 1249 (1940).
[7] To be admissible for consideration in deciding a Rule 56 motion a document must be authenticated by and attached to an affidavit that meets the requirement of Rule 56(e). Steven v. Roscoe Turner Aeronautical Corp., 324 F.2d 157 (7th Cir. 1963); Douglas v. Beneficial Finance Co. of Anchorage, 334 F.Supp. 1166, 1169 (D.Alaska). The map submitted by the defendants has not been so certified. However, the plaintiffs have not objected to its admission for consideration and the Court may deem their objection waived. Auto-drive-away Co. of Hialeah, Inc. v. ICC, 360 F.2d 446, 448-449 (5th Cir. 1966).
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673 F.2d 1310
Harrisv.City of Norfolk, Virginia
81-1619
UNITED STATES COURT OF APPEALS Fourth Circuit
12/24/81
1
E.D.Va.
VACATED AND REMANDED
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4 F.Supp.2d 1297 (1998)
Dwayne L. SHEPHERD, SSN: XXX-XX-XXXX, Plaintiff,
v.
Kenneth S. APFEL, Commissioner of Social Security Administration,[1] Defendant.
No. 97-C-146-J.
United States District Court, N.D. Oklahoma.
April 23, 1998.
*1298 Paul F. McTighe, Jr., Tulsa, OK, for Plaintiff.
Peter Bernhardt, U.S. Atty., Tulsa, OK, for Defendant.
ORDER[2]
JOYNER, United States Magistrate Judge.
Plaintiff, Dwayne L. Shepherd, pursuant to 42 U.S.C. § 405(g), appeals the decision of the Commissioner denying Social Security benefits.[3] Plaintiff asserts that the Commissioner erred because (1) Plaintiff's case involves a period of "closed disability" but the ALJ failed to appropriately follow the "medical improvement" standard, (2) the ALJ's findings as to Plaintiff's RFC are arbitrary and not supported by substantial evidence, (3) the ALJ failed to properly consider Plaintiff's pain and limited mobility, (4) the consultative examinations of Dr. Lee and Dr. Grewe establish that Plaintiff cannot perform light work, (5) the ALJ referred to no specific evidence to support his conclusions as to Plaintiff's RFC, (6) the ALJ failed to pose Plaintiff's true limitations to the vocational expert, (7) some of the testimony of the vocational expert conflicted with the Dictionary of Occupational Titles ("DOT"), and (8) the ALJ's credibility findings do not comply with Kepler v. Chater, 68 F.3d 387 (10th Cir.1995). For the reasons discussed below, the Court AFFIRMS the Commissioner's decision.
I. PLAINTIFF'S BACKGROUND
Plaintiff was born May 31, 1960. [R. at 34]. Plaintiff did not finish high school, but testified that he had completed and obtained his GED. [R. at 34-35]. Plaintiff testified, at his hearing on August 23, 1995, that the last time he had seen a doctor was in June or July of 1995, but that he did not see the doctor for treatment. [R. at 43]. Plaintiff said that he experiences a lot of pain. [R. at 48].
In Plaintiff's request for reconsideration of the decision of the Social Security Administration, Plaintiff reported that he was "unable to do the work I'm trained in and wish to learn another occupation/trade." [R. at 124].
A Residual Functional Capacity Assessment ("RFC Assessment") completed by Dr. Thurma Fiegel on July 10, 1992, noted that Plaintiff could occasionally lift 20 pounds, frequently lift ten pounds, stand or walk six out of eight hours, and sit six out of eight hours. [R. at 75]. An RFC Assessment completed by Dr. Paul Woodcock on July 13, 1993 noted that Plaintiff could occasionally lift ten pounds, frequently lift five to ten pounds, stand two out of eight hours, and sit six out of eight hours. In addition, Plaintiff was reported as being to able to ambulate without aide, and having good range of motion at knees.
When Plaintiff was sixteen, he tore ligaments and cartilage in his knee which required surgery. When Plaintiff was twenty-one he was injured while working in oil field construction. He tore cartilage and ligaments in his left knee and underwent several subsequent surgeries. In November of 1983 Plaintiff had a motorcycle accident and had a compound fracture of his right tibia and fibula which was treated with a bone graft. The fragment subsequently healed, but Plaintiff had a deformity. In December 1991 Plaintiff had a motorcycle accident and suffered a compound fracture of his right tibia and fibula *1299 with the right patella split in half. Plaintiff had numerous subsequent operations including a metal plate and screws. [R. at 242].
At an examination on June 15, 1994, Plaintiff stated that he could walk only three to six blocks and stand only one to two hours before he would have to rest. [R. at 249]. Plaintiff takes ibuprofen to control his pain. [R. at 242, 309].
II. SOCIAL SECURITY LAW & STANDARD OF REVIEW
Disability under the Social Security Act is defined as the
inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment ....
42 U.S.C. § 423(d)(1)(A). A claimant is disabled under the Social Security Act only if his
physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work in the national economy....
42 U.S.C. § 423(d)(2)(A). The Commissioner has established a five-step process for the evaluation of social security claims.[4]See 20 C.F.R. § 404.1520.
The Commissioner's disability determinations are reviewed to determine (1) if the correct legal principles have been followed, and (2) if the decision is supported by substantial evidence. See 42 U.S.C. § 405(g); Bernal v. Bowen, 851 F.2d 297, 299 (10th Cir.1988); Williams, 844 F.2d at 750.
The Court, in determining whether the decision of the Commissioner is supported by substantial evidence, does not examine the issues de novo. Sisco v. United States Dept. of Health and Human Services, 10 F.3d 739, 741 (10th Cir.1993). The Court will not reweigh the evidence or substitute its judgment for that of the Commissioner. Glass v. Shalala, 43 F.3d 1392, 1395 (10th Cir.1994). The Court will, however, meticulously examine the entire record to determine if the Commissioner's determination is rational. Williams, 844 F.2d at 750; Holloway v. Heckler, 607 F.Supp. 71, 72 (D.Kan. 1985).
"The finding of the Secretary[5] as to any fact, if supported by substantial evidence, shall be conclusive." 42 U.S.C. § 405(g). Substantial evidence is that amount and type of evidence that a reasonable mind will accept as adequate to support a conclusion. Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971); Williams, 844 F.2d at 750. In terms of traditional burdens of proof, substantial evidence is more than a scintilla, but less than a preponderance. Perales, 402 U.S. at 401, 91 S.Ct. *1300 1420. Evidence is not substantial if it is overwhelmed by other evidence in the record. Williams, 844 F.2d at 750.
This Court must also determine whether the Commissioner applied the correct legal standards. Washington v. Shalala, 37 F.3d 1437, 1439 (10th Cir.1994). The Commissioner's decision will be reversed when she uses the wrong legal standard or fails to clearly demonstrate reliance on the correct legal standards. Glass, 43 F.3d at 1395.
III. THE ALJ'S DECISION
In this case, the ALJ awarded to Plaintiff a "closed period of disability" on July 29, 1994, effective December 8, 1991, through December 31, 1992. The closed period of disability was based on the injuries Plaintiff received in a motorcycle accident.[6] Plaintiff additionally had a prior period of disability from November 1983 until July 1988 based on injuries in a previous motorcycle accident. [R. at 13].
The ALJ concluded that after December 31, 1992, the Plaintiff retained the RFC to perform light and sedentary work with no prolonged standing, and no prolonged use of his feet or legs. [R. at 17]. The ALJ analyzed Plaintiff's complaints of pain, but noted that for several reasons he discounted some of Plaintiff's complaints.
The ALJ concluded that Plaintiff could not return to his past relevant work. Based on the testimony of a vocational expert, the ALJ concluded that numerous sedentary and light jobs existed which Plaintiff could perform.
IV. REVIEW
Closed Period Case
Plaintiff initially asserts that this appeal involved a "closed period of disability," and that in such a case the "medical improvement" standard applies. Plaintiff argues that the ALJ failed to properly follow the medical improvement standard.
In a typical social security case, benefits are granted for an indefinite period. That is, benefits continue unless they are terminated in a proceeding brought by the Secretary at some later date. After much wrangling in the federal circuit courts of appeal, it is now clear that the "medical improvement" standard, now codified at 20 C.F.R. § 404.1594, is to be applied in a proceeding to terminate benefits. Brown v. Sullivan, 912 F.2d 1194, 1196 (10th Cir.1990).
A question not yet answered in a published decision by the Tenth Circuit Court of Appeals is whether the "medical improvement" standard applies in a closed period case.
In a `closed period' case, the decision maker determines that a new applicant for disability benefits was disabled for a finite period of time which started and stopped prior to the date of his decision. Typically, both the disability and the cessation decision are rendered in the same document.
Pickett v. Bowen, 833 F.2d 288, 289 n. 1 (11th Cir.1987). Plaintiff's argument is essentially that a closed period case consists of two distinct parts a disability determination and a termination of benefits. Plaintiff argues, therefore, that the § 404.1594's medical improvement standard applies to the termination portion of a closed period determination, just as it would in a traditional termination proceeding. A split of authority exists on this issue. Compare Chrupcala v. Heckler, 829 F.2d 1269, 1274 (3rd Cir.1987) (holding that "[f]airness would certainly seem to require an adequate showing of medical improvement whenever an ALJ determines that disability should be limited to a specific period.") with Ness v. Sullivan, 904 F.2d 432, 434 n. 4 (8th Cir.1990) (holding that the normal sequential evaluation process and not the medical improvement standard applies in closed period cases). The Tenth Circuit, in Pittser v. Apfel, 132 F.3d 43 (10th Cir.1997), in an unpublished opinion, noted that Plaintiff argued in a closed period case that the Commissioner had the burden to establish that Plaintiff's disability ceased and must consider the medical improvement. *1301 The Pittser court referred to the Eighth Circuit opinion in Camp v. Heckler, 780 F.2d 721, 721-22 (8th Cir.1986) in declining to adopt Plaintiff's argument.
In accord with the Eighth and Tenth Circuit Courts of Appeals, the Court is inclined to conclude that the ALJ is not required to abide by the full dictates of the "medical improvement standard." Regardless, the Court finds that the issue does not have to be resolved. Initially, the Court does not perceive that a substantially different result would occur in this case regardless of whether the traditional five step sequential evaluation process[7] is applied or the medical improvement standard is applied. The ALJ's findings contain conclusions that Plaintiff underwent medical improvement and was able to work after the medical improvement. [R. at 21].
Pursuant to 20 C.F.R. § 404.1594, the following evaluation process must be followed to terminate disability benefits:
1. Is the claimant engaged in substantial gainful activity? [Step one of the traditional sequential evaluation process]. If he is, disability benefits will be terminated.
2. Does the claimant have an impairment which meets or equals the severity of an impairment in the "Listings"? See 20 C.F.R. Pt. 404, Subpt. P, App. 1. [Step three of the traditional sequential evaluation process]. If he does, disability benefits will be continued.
3. Has the claimant experienced "medical improvement"? If not, disability benefits continue.
a. Medical improvement is defined as "any decrease in the medical severity" of the claimant's impairments since the last disability determination. "A determination that there has been a decrease in medical severity must be based on changes (improvement) in the symptoms, signs and/or laboratory findings associated with [the claimant's] impairment(s)." 20 C.F.R.
§ 404.1594(b)(1).
4. Looking only at the impairments present at the last disability determination, has the claimant's medical improvement resulted in an increase in the claimant's residual functional capacity ("RFC") since the last disability determination? If not, disability benefits will continue?
5. Do any exceptions to the application of the medical improvement standard apply? If an exception applies, the Secretary is relieved of her burden of showing medical improvement, and disability benefits will be terminated. None of the exceptions are applicable in this case. (None of the exceptions apply to this case.) See 20 C.F.R. § 404.1594(d) and (e).
6. Looking at all of the claimant's current impairments, not just those present at the last disability determination, are these impairments severe? [Step two of the traditional sequential evaluation process]. If not, disability benefits will be denied.
7. Looking at all of the claimant's current impairments, not just those present at the last disability determination, can claimant perform his past relevant work? [Step four of the traditional sequential evaluation process]. If claimant can, disability benefits will be terminated.
8. Looking at all of the claimant's current impairments, not just those present at the last disability determination, does claimant have the RFC to perform an alternative work activity in the national economy? [Step five of the traditional sequential evaluation process].
20 C.F.R. § 404.1594(f).
The Court concludes that even if the ALJ was required to follow the medical improvement standard, substantial evidence supports the ALJ's decision that Plaintiff achieved medical improvement.
*1302 RFC not Supported by Substantial Evidence
Plaintiff asserts that the ALJ's RFC findings are based on an incomplete consideration of Plaintiff's impairments. Plaintiff provides no specifics.
The ALJ concluded that Plaintiff could perform a full range of sedentary or a narrow range of light work with the additional limitation of no prolonged standing or prolonged use of his feet or legs. [R. at 17, 21].
A Residual Functional Capacity Assessment ("RFC Assessment") completed by Dr. Thurma Fiegel on July 10, 1992, indicated that Plaintiff could occasionally lift 20 pounds, frequently lift ten pounds, stand or walk six out of eight hours, and sit six out of eight hours. [R. at 75]. An RFC Assessment completed by Dr. Paul Woodcock on July 13, 1993 noted that Plaintiff could occasionally lift ten pounds, frequently lift five to ten pounds, stand two out of eight hours, and sit six out of eight hours. Plaintiff additionally was reported as being able to ambulate without aide, and having good range of motion at his knees.
The Court has reviewed the record and concludes that substantial evidence supports the ALJ's conclusions regarding Plaintiff's RFC.
Consideration of Pain and Mobility
Plaintiff asserts that the ALJ failed to appropriately consider Plaintiff's complaints of pain and Plaintiff's limited mobility.
The ALJ analyzed Plaintiff's complaints of pain but determined based on numerous factors, including, several inconsistent statements by Plaintiff, Plaintiff's infrequent visits to the doctor, the limited medication (aspirin) which Plaintiff took, and Plaintiff's failure to attend physical therapy sessions, that Plaintiff's testimony regarding his pain was not fully credible. The ALJ's analysis is supported by the record.
Consultative Examiners/Light Work
Plaintiff further asserts that a consultative examination done by Steven Lee, M.D., and a consultive examination by Terrence Grewe, D.O. establish that Plaintiff cannot sit or stand for six hours out of an eight hour day.
Dr. Lee examined Plaintiff July 7, 1993. [R. at 242]. After an examination, Dr. Lee concluded:
This young man basically was healthy with the exception of multiple injuries with subsequent deformity of both knees, malalignment of the fracture and some difficulty with walking. At the present time he is wearing a brace on the right leg. He could not tolerate prolonged standing and he apparently could not tolerate prolonged walking. On a short distance he seemed to be able to walk fairly steadily. He was advised to seek alternative employment because he was no longer able to work as a construction worker. He expresses interest in becoming a trained mechanic for motorcycle repair with an interest to go to a training school for motorcycle repair type of job. This young man appeared to be quite pleasant and I believe he might be motivated to seek alternative occupation and training. Occupational rehabilitation probably will be worthwhile to explore for him.
[R. at 244]. Dr. Lee's assessment is not inconsistent with the findings of the ALJ.
Dr. Grewe examined Plaintiff on June 15, 1994. He noted that Plaintiff reported to him that he could walk only three to six blocks and could stand only one to two hours. [R. at 249]. Dr. Grewe reported arthritis secondary to trauma and multiple trauma of the lower extremities secondary to a motorcycle vehicle accident. [R. at 250]. Dr. Grewe's assessments are not inconsistent with the ALJ's findings.[8]
*1303 Evidence to Support RFC
Plaintiff notes that the ALJ made his decision at Step Five and therefore was required to have evidence to support his conclusions. The record contains two RFC Assessments which support the conclusion of the ALJ that Plaintiff can do sedentary work.
Limitations Posed to Vocational Expert
Plaintiff additionally asserts that the ALJ failed to pose all appropriate limitations in his question to the vocational expert. The ALJ provided several sedentary and light jobs which an individual who cannot stand for prolonged periods of time and cannot use his feet or legs could perform. The record substantiates the ALJ's findings. [R. at 61].
Plaintiff states that if all of Plaintiff's limitations are posed in a question to the vocational expert no jobs exist which Plaintiff can perform. However, an ALJ is not required to accept all of a plaintiff's testimony with respect to restrictions as true, but may pose such restrictions to the vocational expert which are accepted as true by the ALJ. Talley v. Sullivan, 908 F.2d 585, 588 (10th Cir.1990). See also Evans v. Chater, 55 F.3d 530, 532 (10th Cir.1995) (an ALJ need include only those limitations in the question to the vocational expert which he properly finds are established by the evidence).
Conflict with the DOT
Plaintiff further asserts that a conflict occurred between the ALJ and the DOT and that the DOT controls. Assuming Plaintiff's argument as true, that would eliminate only the job of "hand packer."[9] The ALJ additionally found that Plaintiff could work in sedentary or light assembly or cashier jobs. The ALJ's conclusion that work exists which Plaintiff is capable of performing is supported by substantial evidence.
Credibility and Kepler
Plaintiff finally asserts that the ALJ failed to appropriately address the Plaintiff's credibility in accordance with Kepler v. Chater, 68 F.3d 387 (10th Cir.1995). The ALJ addressed Plaintiff's credibility and provided numerous reasons for discounting Plaintiff's subjective complaints. The ALJ's decision is in accord with Kepler.
Accordingly, the Commissioner's decision is AFFIRMED.
NOTES
[1] On September 29, 1997, Kenneth S. Apfel was sworn in as Commissioner of Social Security. Pursuant to Fed.R.Civ.P. 25(d)(1), Kenneth S. Apfel, Commissioner of Social Security, is substituted for Shirley S. Chater as the Defendant in this action.
[2] This Order is entered in accordance with 28 U.S.C. § 636(c) and pursuant to the parties' Consent to Proceed Before United States Magistrate Judge.
[3] Administrative Law Judge James D. Jordan (hereafter "ALJ") concluded that Plaintiff was not disabled on September 27, 1995. Plaintiff appealed to the Appeals Counsel. The Appeals Counsel declined Plaintiff's request for review on December 13, 1996. [R. at 5].
[4] Step One requires the claimant to establish that he is not engaged in substantial gainful activity (as defined at 20 C.F.R. §§ 404.1510 and 404.1572). Step Two requires that the claimant demonstrate that he has a medically severe impairment or combination of impairments that significantly limit his ability to do basic work activities. See 20 C.F.R. § 404.1521. If claimant is engaged in substantial gainful activity (Step One) or if claimant's impairment is not medically severe (Step Two), disability benefits are denied. At Step Three, claimant's impairment is compared with those impairments listed at 20 C.F.R. Pt. 404, Subpt. P, App. 1 (the "Listings"). If a claimant's impairment is equal or medically equivalent to an impairment in the Listings, claimant is presumed disabled. If a Listing is not met, the evaluation proceeds to Step Four, where the claimant must establish that his impairment or the combination of impairments prevents him from performing his past relevant work. A claimant is not disabled if the claimant can perform his past work. If a claimant is unable to perform his previous work, the Commissioner has the burden of proof (Step Five) to establish that the claimant, in light of his age, education, and work history, has the residual functional capacity ("RFC") to perform an alternative work activity in the national economy. If a claimant has the RFC to perform an alternate work activity, disability benefits are denied. See Bowen v. Yuckert, 482 U.S. 137, 140-42, 107 S.Ct. 2287, 96 L.Ed.2d 119 (1987); Williams v. Bowen, 844 F.2d 748, 750-51 (10th Cir.1988).
[5] Effective March 31, 1995, the functions of the Secretary of Health and Human Services ("Secretary") in social security cases were transferred to the Commissioner of Social Security. P.L. No. 103-296. For the purpose of this Order, references in case law to "the Secretary" are interchangeable with "the Commissioner."
[6] The ALJ notes that based on "disability status," Plaintiff was entitled to disability through February 1993, but that Plaintiff was incarcerated in January and February of 1993 and was therefore not entitled to benefits for those months. [R. at 13].
[7] See, footnote 4, supra.
[8] Plaintiff does not assert that the ALJ erred in his evaluation of the medical report of Michael Farrar, D.O. Dr. Farrar concluded that Plaintiff was 100 percent disabled and unemployable. [R. at 312]. The ALJ adequately discusses Dr. Farrar's conclusions. In addition, Dr. Farrar does not limit his conclusions to Plaintiff's physical limitations. Rather, Dr. Farrar bases his opinion, in part, on Plaintiff's lack of education, training and experience. [R. at 312]. These conclusions obviously invade the province of the ALJ. The Court concludes that the ALJ appropriately evaluated the evidence provided by Dr. Farrar. In addition, as noted, Plaintiff does not address this as an error on appeal.
[9] This issue has not yet been decided in a published Tenth Circuit opinion. This Court previously addressed this issue in Simmons v. Chater, 950 F.Supp. 1501 (N.D.Okla.1997), concluding that the DOT does not "control." See also Conn v. Secretary of Health & Human Services, 51 F.3d 607, 610 (6th Cir.1995) ("[W]hile the ALJ may take judicial notice of the classification in the Dictionary, the ALJ may accept testimony of a vocational expert that is different from information in the Dictionary of Occupational Titles.... The social security regulations do not require the Secretary or the expert to rely on classifications in the Dictionary of Occupational Titles.") (citations omitted).
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150 F.3d 1197
U.S.v.Davis*
NO. 97-6703
United States Court of Appeals,Eleventh Circuit.
July 6, 1998
Appeal From: S.D.Ala. ,No.9600134CR3
1
Affirmed.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
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352 So.2d 964 (1977)
SOUTH CENTRAL BELL TELEPHONE CO.
v.
LOUISIANA PUBLIC SERVICE COMMISSION.
No. 59705.
Supreme Court of Louisiana.
November 3, 1977.
Rehearing Denied December 14, 1977.
*966 Norman C. Frost, M. Robert Sutherland, Ronald W. Tweedel, New Orleans, Victor A. Sachse, Jr., Victor A. Sachse, III, Breazeale, Sachse & Wilson, Baton Rouge, for plaintiff-appellant.
Jeff McHugh David, Gen. Counsel, Saul Stone, Michael R. Fontham, Stone, Pigman, Walther, Wittmann & Hutchinson, New Orleans, for defendant-appellee.
DENNIS, Justice.
The ultimate issue in this case concerns the reasonableness of a rate order issued by the Louisiana Public Service Commission denying a rate increase requested by South Central Bell Telephone Company. 15 P.U. R.4th 87 (1976). On appeal to the district court for review of the order pursuant to La.R.S. 45:1192, the court, after remanding to the Commission for further determinations, reversed the order of the Commission in part and entered judgment granting the utility a rate increase. The case is here on appeals from the district court judgment by both the Company and the Commission. La.Const. art. 4, § 21.
South Central Bell, a Delaware corporation, is one of twenty-four operating companies included in the Bell System of the American Telephone & Telegraph Company. All of South Central Bell's outstanding capital stock is owned by A. T. & T. The Bell System includes Bell Telephone Laboratories, Inc., and Western Electric Company. The former performs research, development and design work, and the latter manufactures, purchases, repairs, and distributes apparatus, equipment and supplies, and installs central office equipment for the Bell System. Under license contracts, Bell System Laboratories provides services for the operating companies and the long lines department of A. T. &. T.
South Central Bell serves customers in Louisiana, Alabama, Kentucky, Mississippi and Tennessee. Its service covers both intrastate and interstate calls.
South Central Bell applied to the Louisiana Public Service Commission on April 18, 1975 for a rate increase sufficient to produce additional intrastate revenues of $73,000,000 annually in Louisiana. The application was based on a forecasted test year ending June 30, 1976. In November of 1975, the application was amended to base the requested increase on a new test year ending December 31, 1976 and to elevate the requested increase so as to produce an additional $16,000,000 in revenues for a total of $89,000,000 annually.
On June 18, 1976 the Commission issued an order denying South Central Bell's application for a rate increase.[1] The Company *967 appealed, and after proceedings were held, the district court rendered a written opinion finding that the Commission had erred in its treatment of research and development costs and in failing to grant the Company an attrition allowance. The case was remanded to the Commission for a period of forty-five days for the purpose of amending the order to conform with the views expressed by the court and for further proceedings in this connection. The Commission determined that under the court's opinion and judgment an increase would be required in intrastate rates sufficient to produce revenues of $6,714,000 for an attrition allowance and $1,728,000 for reversal of the Commission's research and development cost adjustment. In order to preserve its right to appeal the court's ruling the Commission did not amend its order but merely reported its findings to the district court. After further judicial review, the district court concluded that the attrition allowance determined by the Commission was inadequate and amended the order of the Commission to grant a rate increase to South Central Bell sufficient to produce $26,320,000 in additional intrastate revenues. Both South Central Bell and the Commission appealed to this Court.
Elements of Rate-Making
The primary purpose of the ratemaking process is to set rates at such a level that the utility's revenue will be sufficient to permit the utility both to pay its legitimate operating expenses and to provide a return on investment adequate to compensate existing investors and attract new capital as it is required. See, Jones, Judicial Determination of Public Utility Rates: A Critique, 54 B.U.L.Rev. 873, 875 (1975) [hereinafter referred to as Jones]. When this level is achieved the utility's revenues produce a "fair rate of return." The legal standard for determining a fair rate of return was articulated in two well known cases: Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 602, 64 S.Ct. 281, 88 L.Ed. 333 (1944); Bluefield Waterworks & Improvement Co. v. Public Service Commission, 262 U.S. 679, 692-93, 43 S.Ct. 675, 67 L.Ed. 1176 (1923). In Federal Power Commission v. Hope Natural Gas Co., supra, the Supreme Court observed:
"Rates which enable the company to operate successfully, to maintain its financial integrity, to attract capital, and to compensate its investors for the risks assumed certainly cannot be condemned as invalid. * * *" Id. 320 U.S. at 605, 64 S.Ct. at 289.
Once the regulatory agency has determined the amount of annual revenue required by the utility to produce a fair rate of return the agency will consider the question of rate design: that is, the rates each class of consumers should pay in order to produce the annual revenues required for a fair rate of return. In the instant case we are not concerned with rate design, but our basic concern is whether the annual revenue requirement of the utility was fairly and reasonably determined by the public service commission.
The general approach of a regulatory agency in determining whether an existing rate structure is producing inadequate or excessive revenues is well established. The agency first selects a "test year," normally the most recent annual period for which complete financial data are available, and calculates the utility's revenues, expenses and investments during the test period. The utility's revenues minus its expenses, exclusive of interest, constitute the earnings or the "return" that is available to be distributed to the utility's stockholder and creditor investors. The total amount of investment in a utility employed in providing its service, the utility's rate base, is determined by adding the investment in *968 physical properties to an allowance for working capital. The agency then decides whether the actual "rate of return," the ratio of return to rate base, is deficient, adequate or excessive. Jones, supra, at 876. See also, J. Bonbright, Principles of Public Utility Rates, 147-283 (1961) [hereinafter referred to as Bonbright]; 1 A. Priest, Principles of Public Utility Regulation, 45-226 (1969) [hereinafter referred to as Priest].
For example, if a utility's rate base during the test year was $100,000,000 its test-year revenues $35,000,000, and its test-year expenses, exclusive of interest, were $28,000,000, then the utility's return would be $7,000,000 and its rate of return would be seven per cent. If the fair rate of return is six per cent, a rate reduction would be appropriate. If seven per cent is fair, no rate change would be required. If eight per cent is the fair rate of return, a rate increase would be justified. See Jones, supra, at 876.
The final calculations involved in determining the utility's revenue requirement, as thus summarized, are relatively simple. However, to arrive at the ultimate figures used in these calculations requires extensive examination of the utility's operations and frequent exercise of informed judgment. Every aspect of the utility's operations during the test year must be examined in order to determine the extent to which the figures it has received from the utility are representative of the figures that will, or should, prevail in the future. Ideally, the agency should conduct an audit to insure that the utility's books accurately describe the revenues, expenses and investment and that proper accounting procedures have been followed. The auditing may lead the agency to question whether particular expenditures or investments are properly chargeable to utility operations, whether capital expenditures have been improperly charged to operating expenses or operating expenses improperly capitalized, whether accruals for reserves have been made at appropriate levels, and whether any expenses incurred during the test year are properly chargeable to some other period of time. If the rate making agency determines that any such matter has been improperly treated from a regulatory standpoint, appropriate adjustments must be made to the operating results. As we shall see, two of the contested issues in the instant case involve whether the public service commission acted reasonably in adjusting the utility's treatment of particular investment, expense or revenue items.
Principles of Judicial Review
In reviewing the rate making process the inquiry of the judiciary is generally confined to a determination of whether the regulatory agency acted unreasonably or arbitrarily in establishing rates for the utility. Priest, supra, at 436. The United States Supreme Court, in assessing the Federal Power Commission's performance of its statutory duty to fix "just and reasonable" rates, elaborated on this principle:
"* * * If the total effect of the rate order cannot be said to be unjust and unreasonable, judicial inquiry under the Act is at an end. The fact that the method employed to reach that result may contain infirmities is not then important. Moreover, the Commission's order does not become suspect by reason of the fact that it is challenged. It is the product of expert judgment which carries a presumption of validity. And he who would upset the rate order under the Act carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences. * * *" Id. 320 U.S. at 602, 64 S.Ct. at 288.
The Louisiana Public Service Commission is authorized to fix "just and reasonable" rates to be charged by public utilities. La. R.S. 45:1176. In Louisiana rate cases this Court has articulated various descriptions of its role in reviewing the regulatory determinations of the public service commission. We have said the orders of the Commission are entitled to great weight and are not to be overturned unless shown to be arbitrary, capricious or abusive of its authority; Louisiana Oilfield Carriers Association, *969 Inc. v. Louisiana Public Service Commission, 281 So.2d 698 (La.1973); Louisiana Tank Truck Carriers, Inc. v. Louisiana Public Service Commission, 244 La. 909, 155 So.2d 15 (1963); Louisiana Power & Light Co. v. Louisiana Public Service Commission, 256 La. 656, 237 So.2d 673 (1970); that courts should act slowly in substituting their views for those of the expert body charged with the legislative function of rate making, and should not disturb the Commission's decision in the absence of a clear showing of an abuse of power; Greater Livingston Water Co. v. Louisiana Public Service Commission, 294 So.2d 501 (La. 1974); United Gas Pipe Line Co. v. Louisiana Public Service Commission, 241 La. 687, 130 So.2d 652 (1961); Gulf States Utilities Co. v. Louisiana Public Service Commission, 222 La. 132, 62 So.2d 250 (1952); Illinois Central R. Co. v. Louisiana Public Service Commission, 224 La. 279, 69 So.2d 43 (1953); Southern Bell Telephone & Telegraph Co. v. Louisiana Public Service Commission, 232 La. 446, 94 So.2d 431 (1957); Southern Bell Telephone & Telegraph Co. v. Louisiana Public Service Commission, 239 La. 175, 118 So.2d 372 (1960); that Commission decisions will not be disturbed unless found to be clearly erroneous or unsupported by evidence. White v. Louisiana Public Service Commission, 259 La. 363, 250 So.2d 368 (1971); Monochem, Inc. v. Louisiana Public Service Commission, 253 La. 1047, 221 So.2d 504 (1969); Arkansas & Louisiana Missouri Railway Co. v. Louisiana Public Service Commission, 251 La. 963, 207 So.2d 760 (1968); Texas & Pacific Railway Co. v. Louisiana Public Service Commission, 240 La. 669, 124 So.2d 902 (1960).
The Commission's Determinations
The Public Service Commission used the generally accepted approach in determining whether South Central Bell's application for a rate increase and additional revenues has merit. The Commission selected the calendar year of 1975 as the test year. After considering thousands of pages of testimony, exhibits, tables, cross-examination, data requests, and data responses the Commission made its determinations. It found that during the test year the utility had revenues of $72,017,000, an average rate base of $828,280,000 and an actual rate of return of 8.7%. Because the Commission had previously determined that a rate of return of 8.55% to 9.01% would be a fair rate of return for South Central Bell, it concluded that no rate change was warranted because the actual rate of return earned during the test year was within this range. We will discuss later the method used by the Commission to determine that the fair rate of return was 8.55% to 9.01%.
In arriving at the figures it used to make the final calculation of the actual rate of return, the Commission made a series of adjustments to the data furnished by South Central Bell from its books. Adjustments to the rate base included reductions to account for overstatement of materials and supplies paid for, overstatement of federal income taxes paid, sums advanced by customers, accumulated deferred income taxes and unamortized tax credits, and overstatement of intrastate plant. Among the Commission's adjustments to revenues and expenses was a requirement that research and development costs be capitalized rather than treated as a current expense, flow through of deferred state income taxes, reduction of test year income tax expense, and reduction of overstated intrastate operations expenses.
Two of the Commission's adjustments are subjects of dispute in this Court. The other questions presented by the appeals concern the Commission's calculation of the rate of return and its failure to increase the utility's required revenues to offset attrition of the rate of return.
The Commission contends that the district court erred in reversing its adjustment of research and development costs and in ordering a rate increase to offset attrition. South Central Bell argues that the district court erred in affirming the Commission's findings that the appropriate capital structure for rate making purposes is the Bell System capital structure; that the proper cost of debt is that of the Bell System; that the proper cost of equity is 10.5-11.5%; *970 that the Commission's separations of interstate plant and expenses from intrastate rate base and expenses were proper. South Central Bell also contends that the increase in rates to offset attrition is inadequate and should be increased to allow an additional $21,000,000-$26,000,000 in annual revenues over the amount awarded by the district court.
Fair Rate of Return
The generally accepted method of computing the fair rate of return is the "cost of capital" approach. For purposes of explanation, we will assume a small utility corporation, providing only intrastate service within one state, and not affiliated with other enterprises.[2] The rate making authority examines the utility's capital structure to identify the sources of the utility's capital. The utility might have a capital structure consisting of fifty per cent debt, fifteen per cent preferred stock and thirty-five per cent common stock. The regulatory agency then ascertains the cost of each component: the cost of debt, determined essentially by the annual interest requirements of the utility's bonds, could be six per cent; the cost of preferred stock, governed basically by the stated dividend requirement on such stock, might be eight per cent; the cost of common stock, determined by the return required to sell such stock on reasonable terms in the market, may be twelve per cent. Using these preliminary computations, the overall cost of capital may be calculated as follows:
Debt 50% at 6% = .030
Preferred Stock 15% at 8% = .012
Common Stock 35% at 12% = .042
____
.084
The fair rate of return is essentially the same as the overall cost of capital. Sometimes regulatory agencies will adjust this percentage figure to take account of imperfections in the resolution of preliminary issues. For example, dispute often arises in connection with three preparatory determinations. First, if the existing capital structure is inappropriate for the utility, its cost of capital may be excessive or inadequate due to lack of proper proportion between its debt and common stock. Second, because common stock does not bear a fixed return, its valuation is the subject of a number of varied, highly complex approaches, often yielding differing results. Third, there may be need in some cases to add an increment to the overall rate of return to allow for contingencies or for imprecision; to offset for anticipated inflation; to provide incentive or recognition for good performance. Priest, supra, at 47-51; Jones, supra, at 882.
In the instant case the Commission utilized the capital structure of the Bell System, consisting of 49.5% debt, 4.4% preferred stock and 46.1% common stock, in computing the fair rate of return. The regulatory agency further determined the cost of debt to be 6.8%, the cost of preferred stock, 7.8%, and the cost of common stock or equity, 10.5% to 11.5%. Using these figures it calculated the fair rate of return as follows:
Debt 49.5% at 6.8% = 3.37%
Preferred 4.4% at 7.8% = .34%
Common 46.1% at 10.5-11.5% = 4.84% to 5.30%
______________
Fair Rate of Return 8.55% to 9.01%
South Central Bell contends that the fair rate of return calculated by the Commission is too low because the agency used the Bell System capital structure rather than South Central Bell's actual capital structure and because it improperly computed the cost of debt and cost of equity. A considerably higher fair rate of return would have resulted if the Commission had used South *971 Central Bell's figures in calculating the percentage as follows:
Debt 45% at 7.61% = 3.42%
Equity 55% at 13% to 15% = 7.15% to 8.25%
________________
Fair Rate of Return 10.57% to 11.67%
Capital Structure
South Central Bell contends that only its own capital structure, consisting of 45% debt and 55% equity, should have been considered by the Commission in its determination of the fair rate of return, rather than the entire Bell System capital structure. The cost of equity capital is higher than the cost of debt capital, both generally and for the Bell System. Since the capital structure of South Central Bell contained a greater percentage of equity capital than the Bell System structure, a fair rate of return based on South Central Bell's structure alone would have been higher.
The opinions of other regulatory agencies and scholars indicate that in calculating the cost of capital of a wholly owned subsidiary, such as South Central Bell, valid reasons may be given for employing the capital structure of either the subsidiary or its parent corporation. Use of the latter has been criticized on grounds that it fails to recognize that each subsidiary is regulated by a different agency and may experience significantly different operating and financial risks. See, Fitzpatrick, Subsidiaries' Capital CostsA Compromise Approach, 99 Public Utilities Fortnightly, No. 13, p. 23 (1977); cf. Re Southwestern Bell Telephone Co., 10 P.U.R.4th 323, 329 (Ark.1975). The great weight of expert regulatory bodies, nevertheless, favors use of the parent's capital structure for several reasons. The subsidiary is an integral part of a corporate system, its risks are indistinguishable from those of the system, and, in the case of South Central Bell, its cost of equity is determined solely by Bell System management and investors since it issues stock only to the parent corporation. See, Re Southern Bell Telephone & Telegraph Co., 10 P.U.R.4th 166 (S.Car.1975); Re The Chesapeake & Potomac Telephone Co., 10 P.U. R.4th 211 (Md.1975); Re Southern Bell Telephone & Telegraph Co., 8 P.U.R.4th 188 (Ga.1974); Re Southwestern Bell Telephone Co., 98 P.U.R.3d 30 (Kan.1973); Re Southern Bell Telephone & Telegraph Co., 83 P.U.R.3d 84 (Fla.1970); Cf. Re Southern Bell Telephone & Telegraph Co., 12 P.U. R.4th 252 (Fla.1975); Re New York Telephone Co., 12 P.U.R.4th 1 (N.Y.1975). Moreover, it has been argued that determination of a subsidiary's cost of capital based on its own merits ignores the fact that the parent company can elect to create an "artificial" capital structure in the sense that it could not be supported efficiently in the market in the absence of financial support by the parent company. Fitzpatrick, Id. at 25.
Both the Commission and the utility contend that the testimony of South Central Bell's expert witnesses supports their respective positions on the capital structure issue. From our reading of the record it appears that the witnesses were not interrogated directly on the question of the proper capital structure for determining cost of equity. Nevertheless, the tenor of their testimony as well as some of the assumptions upon which it appears to have been based supports a reasonable inference that use of the Bell System capital structure is justified. Each witness' testimony dealt almost entirely with the Bell System and its cost of equity capital, and each of the witnesses recommended a rate of return on equity capital for South Central Bell which exactly coincided with the requisite return on equity capital he derived for A. T. & T. However, no independent explanation was given of how the figures for South Central Bell were determined. It was apparent from their testimony that the South Central Bell experts viewed the Bell System as a whole and did not treat South Central Bell as a separate entity. They merely adopted for South Central Bell the same cost of equity capital which they concluded investors in the open market would assign to Bell System capital issues.
Alternatively, South Central Bell argues, if use of the Bell System capital structure is not intrinsically unreasonable, the Commission was arbitrary because it departed from a long practice of using a hypothetical 45% debt, 55% equity ratio *972 which had been approved in the past by this Court. The Commission initiated the practice in 1956 because it found that the Company's actual debt ratio of 22.3% in 1955 was disproportionately low. We affirmed and found reasonable the Commission's determination that, because of the relatively higher cost of equity capital, it would be unfair to require ratepayers to support the Company's actual capital structure with its disproportionably high 74.6% ratio of common stock. Southern Bell Telephone & Telegraph Co. v. Louisiana Public Service Commission, 232 La. 446, 94 So.2d 431 (1957); Cf. Southern Bell Telephone & Telegraph Co. v. Louisiana Public Service Commission, 239 La. 175, 118 So.2d 372 (1960). However, it does not follow that this is the only reasonable capital structure that can ever be used in determining the utility's cost of capital. Past practices should not prevent a regulatory agency from adopting in good faith new approaches and techniques in an effort to more realistically determine a rate of return fair to both the utility and the ratepayers. Perhaps several frequent changes or a new approach adopted under different circumstances would indicate capriciousness or bad faith. The instant case, however, presents the Commission's first actual change in this respect in twenty years. One previous attempt to use a different capital structure was nullified by the district court, but no appeal was taken to this Court. South Central Bell Telephone Company v. Louisiana Public Service Commission, 90 P.U.R.3d 69 (La.1971). For this reason, and also because there is no evidence that the Commission acted in bad faith, we cannot say that the decision to depart from its past practice in order to consider the capital structure of the Bell System was unreasonable.
Accordingly, we conclude that the Commission did not act arbitrarily or in abuse of its discretion by departing from its past practice or by adopting the capital structure of the Bell System for purposes of rate making because its decision is supported by the weight of regulatory authorities, its own expertise and reasonable inferences drawn from the testimony of the expert witnesses.
Cost of Debt and Preferred Stock
The determination of cost of debt and preferred stock usually does not involve complexities. Bonds and preferred stock carry a fixed yield provided by contract which can be readily ascertained. This is true in the instant case, but the parties disagree as to the proper source of the yield data.
Having determined that the Bell System capital structure should be used for regulatory purposes, the Commission concluded that it would be appropriate and consistent to use the Bell System cost of debt and cost of preferred stock in deriving the fair rate of return. 15 P.U.R. 4th 87, 123. The agency's use of these cost rates, i. e., 6.8% as the cost of debt and 7.8% as the cost of preferred stock, was upheld by the district court.
On appeal in this Court the utility contends the commission should have used the South Central Bell cost of debt of 7.61% because it has issued bonds to outsiders who are independent of the parent corporation. The company relies on New England Telephone and Telegraph Company v. Department of Public Utilities, 360 Mass. 443, 275 N.E.2d 493 (1971) in which the court held that, where a subsidiary utility corporation raises debt capital from sources independent of its parent corporation, the subsidiary's historic cost of capital should be used. Additionally, South Central Bell argues that the cost of debt adopted by the Commission will deprive its equity owners of the opportunity to earn a fair return and jeopardize its AAA bond rating.
The Commission, on the other hand, contends that its determination was warranted for a number of reasons: South Central Bell's obligation to pay a relatively high average yield, 7.61%, results from its imprudent failure to issue more debt, instead of equity, in earlier years when debt capital was less expensive, and ratepayers should not bear the burden of a utility's imprudence. Since South Central Bell is wholly owned by A. T. & T., it is appropriate to *973 evaluate equity and debt costs with reference to the Bell System financial structure. The Company's argument lacks credibility because its own witnesses in other cases have based their testimony on the debt costs of the Bell System. See, Re The Chesapeake & Potomac Telephone Co. of Maryland, 10 P.U.R.4th 211, 218 (Md.1975); Re Southern Bell Telephone & Telegraph Company, 10 P.U.R.4th 166 (S.Car.1975). The Massachusetts high court's holding in the New England Telephone & Telegraph case, supra, is inapposite because that case did not involve a wholly owned subsidiary, and use of the Massachusetts utility's actual cost of debt was justifiable as a means of protecting members of the public who owned a 29% minority share of the company's stock.
South Central Bell's arguments are plausible but not irrefutable. The Commission's position may have infirmities but it is likewise reasonable and meritorious. When confronted with the same question, the Florida Public Service Commission concluded that use of the subsidiary's cost of debt would be improper because the regulatory agency had decided to utilize the parent corporation's capital structure in its determinations. Re Southern Bell Telephone and Telegraph Company, 83 P.U.R.3d 84 (Fla.1970). In a similar case involving a different utility, this Court approved the Commission's use of the parent company's cost of debt in regulating its subsidiary utility corporation. United Gas Pipe Line Co. v. Louisiana Public Service Commission, 241 La. 687, 130 So.2d 652 (1961). There, we said:
"The cost of debt capital has a contractual basis. While it is possible to determine the cost of this to [the subsidiary], we agree with the Commission that in view of the intercorporate relationship the most reliable means of determining the historical cost of debt is to look to [the parent corporation]. It is well established that, in making a determination of costs for rate purposes, the reviewing Commission may look through the corporate form of affiliated corporations and probe for economic realities." 130 So.2d at 660.
The Commission is not required to accept uncritically for regulatory purposes the utility's corporate form or financial information. It is the agency's duty to look beyond superficialities for economic reality. Accordingly, the regulatory body was not obliged to treat South Central Bell as a free standing utility rather than a wholly owned subsidiary of A. T. & T., or as a corporation whose capital structure, cost of equity and cost of debt have been determined entirely by its own management and investors in the open market. By the same token, it was not unreasonable for the Commission to consider whether the utility's historical debt issuance policy had been unfair to the ratepayers.
Because South Central Bell is wholly owned by A. T. & T., the parent company in the final analysis is responsible for the utility's capital structure and the quality of its capital debt. The Commission's decision to look through the corporate form and use the parent company's cost of debt was reasonable. The Court's function is to review the Commission's action for reasonableness, not to decide which party's theory is better or to substitute its judgment. The Commission's determination of this issue was correctly upheld by the district court.
Cost of Equity
The cost of equity or risk capital is more difficult to evaluate than fixed charge capital. Equity capital does not always pay dividends; all profits after fixed charges accrue to it and it must withstand all losses. The cost of such capital cannot be read or computed directly from the company's books. Its determination involves a judgment of what return on equity is necessary to enable the utility to attract enough equity capital to satisfy its service obligations. Conclusions arrived at by regulatory bodies, utilities and their experts vary engagingly. Priest, supra, at 209.
Since the equity capital of South Central Bell is derived entirely from investments by its parent company, A. T. & T., both the *974 utility's experts and the Commission based their opinions primarily upon their respective judgments of the Bell System's current cost of equity. While the Commission used A. T. & T.'s past stock issues and earnings records as a premise for its evaluation, the methods employed by the company's experts relied upon current but more subjective data. The parties agree that the cost of equity capital should be high enough to enable a corporation to issue stock at book value or above.
Return on equity is that portion of the utility's return available for distribution to equity owners after payment of fixed capital charges. The Commission found that A. T. & T. has not historically required a return of over 10.5% on equity to attract equity capital. It noted that in 1976 the parent company marketed 12,000,000 new common shares at a gross price in excess of book value after the equity earnings in 1975 had been only 9.8%. Based upon its analysis and review of the record presented in the case, including all of the evidence of South Central Bell, and after allowing for a margin of safety, the Commission concluded that the appropriate cost of equity was in the range of 10.5% to 11.5%.
The Commission expressly rejected the opinions of the Company's expert witnesses who testified that the cost of equity was in the range of 13% to 15%. Their estimates were based upon three different sources, viz., a comparative earnings test, a correlation of other companies' earnings on book equity with bond yields, and opinions of institutional investors. In its opinion the regulatory body discussed and criticized each witness' method of evaluation. It was not established to the agency's satisfaction that the corporations whose earnings were compared presented investment risks comparable to that of A. T. & T. or South Central Bell, or that the returns actually earned by the compared companies were reasonable. The estimation of cost of equity by correlation with bond yields was rejected because it was based on the faulty premise that the rate earned on book equity is always equal to the cost of equity. The opinion of the witness who based his opinion on his conversations with institutional investors, who were his clients, was rejected as being founded on an unreliable and speculative basis. The Commission concluded that the high rates of return recommended by the South Central Bell witnesses were attributable in large measure to the unusual impact of the recession.
The district court held that the figure arrived at by the Commission, although conservative, was within the bounds of discretion accorded to that body. In making this determination the district judge compared the earnings of several companies to arrive at what he considered an average rate of return on equity. The result of this calculation was 11.73%, which falls between the Commission's 10.5%11.5% cost of equity and the 13%15% range recommended by the company witnesses. Based on this comparison, the district court concluded the Commission's determination was reasonable.
In this Court, South Central Bell urges the merits of its witnesses' opinions and attacks the Commission's determination on various grounds. The company contends that the agency's reliance on A. T. & T.'s 9.8% rate of earnings on book equity in 1975 was misplaced because the investors who paid over book value for Bell System stock in 1976 were expectant of a return of much more due to their awareness of an earlier 1976 F. C. C. determination that A. T. & T. needed to earn 12%-13% on equity. According to the utility the Commission failed to recognize that inflation causes investors to demand a higher rate of return and that the recent introduction of more competition into some facets of the telephone industry warrants a comparison of A. T. & T. with higher risk companies having higher costs of equity. Moreover, the company contends, the cost of equity established by the Commission is discriminatory when a comparison is made with other utility companies as this Court did in Southern Bell Telephone & Telegraph Company v. Louisiana Public Service Commission, 239 La. 175, 118 So.2d 372 (1960).
*975 In reply, the Commission asserts that the opportunity to earn a 12%13% return on equity allowed A. T. & T. by the F. C. C. on interstate operations indicates that a lower return is warranted on South Central Bell's intrastate operations. The F. C. C. approved return reflects risks inherent in A. T. & T.'s interstate operations which do not confront South Central Bell in its intrastate operations, viz., risks caused by newly sanctioned competition in the interstate telephone industry and risks inherent in the deferment of collection for interstate calls until after the service has been rendered. The utility's comparison of other corporations' cost of equity is invalid, according to the Commission, because the sample of corporations used were non-Bell System companies subject to higher risk factors than A. T. & T. or South Central Bell.
We agree with the district court that the determination of the Commission was not arbitrary, unreasonable or deserving of judicial intervention. The comparison made by the district court of the utility's earnings with that of other companies tends to show that the Commission's cost of equity determination was not discriminatory. When compared with the cost of equity of A. T. & T. the allowance here is adequate. Testimony by one of the utility's own expert witnesses indicated that during the 1975 test year A. T. & T. stock sold above gross book value while the parent company's return on equity was approximately 9.8%. This data was recent and probative evidence providing an adequate basis for the regulatory body's finding that South Central Bell needed a 10.5% to 11.5% return on equity to attract equity capital at book value or above. The evidence of regulatory abuse of discretion underlying the company's arguments was simply not substantial enough to show that the Commission's divergent view was arbitrary or capricious. Perhaps the expert testimony and evidence presented by the utility would have supported a different approach and conclusion by the Commission, but the Commission's method of determining cost of equity was equally valid and supported by the record.
Attrition
Attrition is a decline in a utility's actual rate of return, after the test year, caused by a growth in its rate base or operating expenses, or both, which outstrips any increase in its revenues. As long as revenues increase in the same proportion as rate base and expenses, the rate of return will remain constant. If revenues lag in rate of growth, however, attrition occurs and the utility's actual rate of return falls below the level which the rates fixed by the regulatory agency were designed to produce.
In order to illustrate the dynamics of attrition, the Commission used the following examples in its second rate order:
Assume in the test year that:
Revenues = $1,000
Expenses = $ 800
Net Operating Income = $ 200
Rate Base = $2,500
Realized Rate of Return = 8%
Assume further that 8% is the fair rate of return and as a further simplification that there are no income taxes. If revenues, expenses and rate base each grew at the same rate, say 6%, the following result is obtained:
Test Following
Year Year
____ _________
Revenues $1,000 × 1.06 = $1,060
Expenses $ 800 × 1.06 = $ 848
Net Operating
Income $ 200 Rev. Exp. = $ 212
Rate Base $2,500 × 1.06 = $2,650
Realized Rate
of Return 8% (NOI divided by
rate base) = 8%
Thus, under these assumed facts there will be no attrition. Now assume that revenues grow by 6% but that expenses and rate base grow by 8%. In that situation the following would result:
Test Following
Year Year
____ _________
Revenues $1,000 × 1.06 = $ 1,060
Expenses $ 800 × 1.08 = $ 864
Net Operating
Income $ 200 Rev.-Exp. = $ 196
Rate Base $2,500 × 1.08 = $ 2,700
Realized Rate
of Return 8% (NOI divided by
rate base) = 7.26%
Annual Rate of
Attrition = .74%
Thus, based on this assumed set of facts, test year rates would produce an 8% rate of *976 return in the test year, but would produce only 7.26% in the following year. The accrued rate of attrition is .74%.
One final example will show the result where the components grow at different rates and yet produce no attrition:
Test Following
Year Year
____ _________
Revenues $1,000 × 1.084 = $1,084
Expenses $ 800 × 1.09 = $ 872
Net Operating
Income $ 200 Rev.-Exp. = $ 212
Rate Base $2,500 × 1.06 = $2,650
Realized Rate
of Return 8% = 8%
It can be seen that even though expenses are growing faster than revenues (9% versus 8.4%) the rate base is growing at a rate sufficiently less than revenues (6% versus 8.40%) to completely offset the effect of the expense growth. See, Ex Parte Application of South Central Bell Telephone Company, Order No. U-12785A, pp. 10-11 (La.Pub. Serv.Comm.1977).
Accordingly, attrition is not simply the result of growth or inflation, but is caused by particular forms of increases which produce a distortion in the test year relationship between the utility's revenues and its rate base or its expenses, or both.
Although South Central Bell presented evidence that attrition would occur in 1976, the year following the test year, the Commission did not grant any allowance to offset attrition and did not expressly address the issue in its first opinion rendered on June 28, 1976 explaining its rate order of June 15, 1976.
On appeal the district court found that the Commission's failure to consider an adjustment for attrition was unreasonable because it ignored several economic realities. First, the court found that the Commission had improperly disallowed the treatment of research and development costs as current expenses. When these costs were included in expenses, the court found that the Company's actual earned rate of return in the test year was only 8.59% instead of 8.7% as determined by the Commission. Second, the district court found that the Commission did not consider factors reasonably anticipated to affect the rate of return, such as inflation. Third, the court's study of decisions by other regulatory agencies revealed precedents for making attrition adjustments or allowances. See, e. g., Re The Mountain States Telephone & Telegraph Co., 8 P.U.R.4th 547 (Ariz.1975); Re The Chesapeake & Potomac Telephone Co. of Va., 10 P.U.R.4th 255 (Va.1975); Re New York Telephone Co., 12 P.U.R.4th 1 (N.Y. 1975); Re Southern Bell Telephone & Telegraph Co., 12 P.U.R.4th 252 (Fla.1975).
In its opinion of January 4, 1977 the district court stated that "the Commission should make an evaluation based upon the known inflation rate and make an adjustment to the rate of return such as other Commissions have done in order that a fair rate of return may be secured." It declined, however, to dictate how the adjustment should be made. The opinion indicated the case would be remanded to permit the Commission to correct its order by making an allowance to offset attrition and an adjustment to treat research and development costs as current expenses. However, in its final judgment of January 6, 1977, the case was remanded for the purpose of "receiving evidence and making findings" of the adjustments required by the district court opinion, and the Commission was further ordered to complete its action on the case within forty-five days.
On January 14, 1977 South Central Bell filed with both the district court and the Commission new evidence in support of an attrition allowance consisting of affidavits of three Company witnesses presenting actual and forecasted financial data with anticipated regulatory adjustments. The affidavit of D. M. Ballard, Assistant to the Chief Accountant of South Central Bell, set forth his calculations of the Company's rate of return using data from three different *977 test years, i. e., the 1976 average test year, the 1976 year end period, and the forecasted 1977 average test year. According to Ballard, the calculations included adjustments to the Company's income, expense and rate based items made on the same basis as the Commission's adjustments to the 1975 data, except for the separations adjustments. His computations indicated attrition in the form of a decline from the fair rate of return of 8.55%-9.01% determined by the Commission to an actual rate of return of 7.31% based on the average 1976 data, 7.09% on the 1976 end-of-period data, and 6.08% based on projected 1977 data.
The Commission moved the district court to either amend the January 6, 1977 judgment to make it clear that the consideration of new evidence was not mandatory or to extend the 45-day remand period to one year to permit full analysis of the new evidence. The district judge denied the motion without written reasons but later addressed a letter to counsel for the Commission stating that he had indicated in oral reasons "that the Commission could use its discretion whether it wished to consider the additional evidence filed by South Central Bell following the decision."
On remand the Commission did not use the new evidence filed by South Central Bell on the issue of attrition. The Commission stated that the affidavits of the Company witnesses consisted of "conclusionary" statements and contained none of the underlying data necessary for a proper regulatory analysis. Because of the 45-day time limitation imposed by the district court, the Commission found that a proper regulatory analysis of the new evidence, including numerous data requests, analysis of underlying data, open hearings, examination of witnesses, and presentation of expert witnesses was not possible. Moreover, the new evidence was found to be unnecessary to an attrition adjustment, and the Commission noted that the Company had never before said that the original record was inadequate for the purpose of analyzing attrition. The Commission also relied on the assurances made by the district court that consideration of the new evidence would be discretionary.
In making its examination for attrition the Commission used a detailed study approach in which the relationship between South Central Bell's revenues, expenses and rate base was examined during the past ten years. The Commission found that over the last ten years revenues had grown by 8%, expenses had grown by 9% and depreciation and rate base had grown by 10.5%. Finding that these growth rates reflected the factors of economic conditions and inflation, which the court directed it to consider, the Commission projected an expected annual rate of attrition of .4%. The Commission further determined that a revenue increase of $6,714,000 would be needed to offset this rate of attrition.
In its review of the Commission's findings on remand, the district court found that the Commission's method of adjustment for attrition was very conservative, yet not unreasonable. However, the district court found that the Commission's overall result would not produce a fair rate of return and that a further increase was warranted. Adopting the findings contained in Mr. Ballard's affidavit which pertained to the 1976 average test year, the court ordered that rates be increased to produce an additional $26,320,000 in revenues to offset attrition.
On appeal in this Court South Central Bell contends that the district court erred in approving only part of the increase needed and requests an additional allowance of $21,500,000 to $26,000,000. The Company argues that the amount awarded by the district court only covered 1976 and that a comparable amount should have been awarded to offset the impact of inflation and attrition after the new rates became effective.
The Commission on appeal contends that no allowance for attrition is justified but, in the alternative, if this Court determines *978 that an allowance is warranted, that it should not exceed the amount computed by the Commission. The Commission argues that the district court failed to consider factors which tend to offset attrition, viz., that the return in the test year was sufficient; bond prices have dropped reducing the cost of capital; the Company has enjoyed consistent increases in productivity; the economy is improving and inflation is subsiding. The Commission further argues that no allowance is justified because no adjustments were made for the impact on the cash flow of the Company of deferred income taxes and tax credits. The 1969 Tax Reform Act allows utilities to defer payment of huge amounts of income taxes if they are treated as current expenses for regulatory purposes. The actual tax effect for South Central Bell, according to the Commission, is an indefinite deferral of tax payments which amounts to an average of $8,000,000 per year and an accrued total of $51,000,000 to date. In support of its contentions that the attrition allowance determined by the Commission was adequate, the Commission points out that the allowance raises the return on equity to 11.7%, a figure well within the average range in Bell System decisions.
We find that the Commission erred in its original decision in failing to consider whether attrition would occur in the years following the test year and that the district court correctly remanded for such a consideration. Adjustments are often necessary to take into account conditions that may not be reflected in the test year data. Priest, supra, p. 203, et seq.; Nichols and Welch, Ruling Principles of Utility Regulation (Rate of Return Supplement A) (1964), p. 55, et seq.; Jones, supra, at 879.
The Commission's refusal on remand to adopt the Company's conclusions as to the amount which should be granted to offset attrition was not unreasonable. The Commission as a regulatory body has a duty to analyze a utility's data critically and its decision that this could not be done properly within the thirty-seven days remaining after its receipt of the data was not arbitrary or capricious. Additional time in which to properly verify and scrutinize the information was requested by the Commission but denied by the district court. The Commission was expressly informed by the district court that it should use its judgment as to the consideration of additional evidence. Under these circumstances the Commission's decision to use other methods to determine the amount of attrition, if any, rather than either accepting at face value the Company's conclusions or taking the extensive time necessary to verify new test year data was entirely reasonable.
The Commission's determination of an attrition allowance by use of the detailed study method was also reasonable. Forecasting future industrial, financial and economic trends is fraught with uncertainty, and there is no single fool-proof method for doing it. As one regulatory commission aptly noted, the issue "must be analyzed in the context of the individual rate proceedings and that the commission has discretion in determining, in light of all the facts and circumstances of an individual rate proceeding, the most appropriate method of coping with this problem." Re New England Telephone & Telegraph Co., 10 P.U.R. 4th 132, 142 (R.I.1975); see also, Re Orange and Rockland Utilities, Inc., 98 P.U.R. 3d 335, 348 (N.Y.1973). The Company acknowledges that attrition can be determined from historical trends and concedes that the selection of the time frame to be used in such a forecast is a matter of judgment. South Central Bell argues, however, that the Commission should not have gone back ten years in establishing an historical pattern. Its argument appears to be founded on the assumption that the growth pattern of revenues, expenses, and rate base during this period will not correspond with that to be expected in the future. The Commission, on the other hand, concluded that a briefer period would not provide a valid time frame reflecting the Company's probable future growth patterns. We cannot say that either party's opinion is unreasonable or arbitrary, and in such cases we will respect the judgment of the Commission which has *979 been constitutionally entrusted with the responsibility of making the determination.
We therefore conclude that the district court erred in rejecting the Commission's findings on attrition. The findings of the Commission should not be set aside by the courts unless they are unreasonable or arbitrary. Further, the district court exceeded its authority in accepting and relying on the company's data which was filed on remand and which had not been verified and subjected to expert critical analysis. In discussing judicial review of administrative proceedings this Court, in White v. Louisiana Public Service Commission, 259 La. 363, 250 So.2d 368 (1971), stated:
"* * * Ordinarily, review of administrative rulings does not even allow the trial court or this court to make independent findings of fact where there are findings of fact in the record, unless there is a showing that the findings of fact were arbitrary and unreasonable and made without substantial evidence. Moreover, new facts are not ordinarily received by courts for an independent determination on purely administrative adjudications. * * *" 250 So.2d at 372.
The only clear statutory provision for the taking of additional evidence by a court in a rate proceeding requires the court to submit the evidence to the Commission specifically for its consideration and for further determinations within its sound discretion. La.R.S. 45:1194.[3] Although this procedure would not have been practicable in the instant case, and the court properly remanded the complex issue of attrition to the Commission for consideration and determination upon evidence which the Commission within its sound judgment deemed appropriate, the statute does reflect a legislative intent that judicial review should not be based on evidence which has not been verified and analyzed by the Commission. Cf. Delaware Alcoholic Beverage Control Comm. v. Mitchell, 7 Storey 103, 57 Del. 103, 196 A.2d 410 (Del.1963); Alcoholic Beverage Control Board v. Eversole, 275 S.W.2d 55 (Ky.1955); Fascination, Inc. v. Hoover, 39 Cal.2d 260, 246 P.2d 656 (1952).
The Commission reserved the attrition issue for appeal and contends that no allowance whatsoever should be granted, but there is no merit to its contention. The Commission's own detailed study demonstrates that attrition probably did occur in 1976 and there is no evidence in the record which contradicts this finding in a convincing manner.
Accordingly, the allowance to offset attrition granted by the district court must be set aside, and the attrition allowance determined by the Commission should be formally adopted and implemented.
Research and Development
South Central Bell included in its test year expenses an amount paid under a license contract agreement to A. T. & T. for various services and benefits, among which was the right to share in the results of Bell System research and development. Until October 1, 1974, the amount charged South Central Bell under the contract could not exceed 1% of the subsidiary company's revenues; at that time, however, the maximum was increased to 2½% of the gross annual earnings. Other operating companies of the Bell System have similar contracts with A. T. & T.
*980 The Commission expressed reservations about the validity of any assessment in excess of 1% of gross earnings because of the unique relationship between South Central Bell and its parent and the vagueness of the utility witnesses' evidence concerning the services performed under the agreement. Instances in which other regulatory agencies have totally disallowed such increases were cited by the Commission: Re South Central Bell Telephone & Telegraph Co., 12 P.U.R. 4th 426 (Ky.1972); Re New England Telephone & Telegraph Co., 11 P.U.R. 4th 297 (Mass.1975). Rather than completely disallowing the increase, however, the Commission found that it would be appropriate to require that the amount attributable to research and development costs be capitalized and amortized over a future period of approximately twenty years.
The Commission acknowledged the accepted accounting practice of treating research and development costs as current expenses, but decided that the costs should be capitalized to conform with a more basic principle of economics and regulation, i. e., costs which benefit future ratepayers should be capitalized and expensed in the future. The Commission explained the reasons and calculations underlying its treatment as follows:
"The fact that accountants often treat research and development expenditures as a current expense is no reason for doing so for regulatory purposes. It appears that the basic reason why accountants reflect research and development as a current expense is that there is uncertainty, or at minimum, a high degree of risk associated with the prediction of the revenue accomplishments associated with research and development costs as compared to other asset expenditures. When faced with a high degree of uncertainty, the accountant invokes the convention of conservation and effects an immediate charge off of research and development costs. This conservative approach is, however, in conflict with the more basic underlying accounting concept which calls for an association of costs with the time periods benefited and/or the revenues produced by such costs. However, under regulation there is no uncertainty as to the inclusion of research and development costs in the price of a regulated public utility's service.
"In order to bring South Central Bell's net operating income into accord with sound principles of regulation and economics, we have made an adjustment to reflect the capitalization and subsequent amortization of research and development costs. We have used the ratio of research and development expense to total allocated license contract expense of 39 per cent as shown in the record for the year 1974. Thus, 39 per cent of the 1975 license contract expense was treated as research and development expense. After allowing for annual amortization at the overall depreciation rate of 5.3 per cent and a return of 13.33 per cent (the allowed before-tax rate of return on 1975) on the capitalized portion of research and development, we find that an aftertax adjustment to increase net operating income of $853,000 is required." 15 P.U.R. 4th 87, 115-16.
The district court found the Commission had no reasonable basis for departing from its past practice of treating the research costs as current expenses. Accordingly, the court disapproved this adjustment as an abuse of regulatory discretion.
In this Court South Central Bell argues that the district court's decision was justified because the adjustment by the Commission was arbitrary and unreasonable. It asserts that the Commission's change from treating research payments as current expense to requiring capitalization and future amortization is contrary to the Uniform System of Accounts prescribed by the F. C. C., to generally accepted accounting principles, and to the past practices of the Public Service Commission. The Company further contends that no regulatory commission has ever approved such an adjustment, and that some commissions have considered and rejected the capitalization treatment. See, Re Chesapeake and Potomac Telephone Co., *981 ___ P.U.R.4th ___ (Md.1977); Ohio Bell Telephone Co., 15 P.U.R.4th 344 (Ohio 1976).
South Central Bell's statement of the agency determinations in the above-cited cases is essentially correct. However, in both of these proceedings, the regulatory agency itself, after a review of all of the evidence, determined that current expense treatment was preferable to capitalization. These decisions were based simply upon what the agencies perceived to be the better accounting procedure; the agencies did not reject capitalization because they thought it would amount to arbitrary or unreasonable regulatory action. Furthermore, we are aware of no appellate court decision in which such a conclusion was reached.
In our earlier discussion of capital structure, we articulated our view that consistency of administrative treatment is desirable and that capricious alterations of regulatory practices will not be upheld. Nevertheless, the Commission is free to make modifications in its rate making procedures which are reasonably calculated to protect the interests of Louisiana ratepayers while treating the utility fairly. Otherwise, there could be no improvement in the regulatory process or variation to meet changing circumstances. In the instant case, we find that the actions of the Commission were not arbitrary or precipitous. The adjustment made by the Commission was its first change of course regarding the treatment of South Central Bell's research and development costs, and the change was apparently instituted in good faith after careful consideration.
Moreover, the Commission's determination to depart from current expense treatment appears to have an adequate rational basis. The line of demarcation between capital expenditures and revenue charges is a flexible one that is a source of disagreement between accountants in tax matters and in other areas. See, E. M. Faris, Accounting for Lawyers, pp. 85-92 (3d ed. 1975). The fact that capitalization of research costs may not accord with accounting practices prescribed by the F. C. C. does not necessarily render it unreasonable. As we have seen in the case of adjustment and treatment of other financial data for regulatory purposes, accounting rules and even legal forms sometimes must be disregarded by the rate making body in order to properly account for economic realities and to defend legitimate ratepayer interests. Accounting practices are established for the benefit of many different observers of corporate activity, and a practice may vary depending upon whether it was adopted to facilitate analysis by stockholders, creditors, management or the Internal Revenue Service. See, Faris, supra, p. 86. Although an accounting procedure formulated for a non-regulatory purpose may provide one rational basis for a regulatory determination, there is no logical reason why a rate making agency cannot base its decision upon another reasonable procedure devised solely for the purpose of considering the merits of a proposed utility rate increase.
Because the reasons advanced by the Commission for its ruling make a great deal of sense when judged on their merits, and because the departure from past regulatory practice was not unfair under the circumstances, proper judicial inquiry should have ended with the conclusion that the administrative agency's determination was not arbitrary or unreasonable.
Separations
The Louisiana Public Service Commission may regulate only intrastate utility operations. Consequently, the Company's investment and expenses devoted to interstate services should not be considered in the state agency's regulatory process. This presents a problem because the major portion of the Company's telephone property is used in common for both intrastate and interstate services. Similarly, the major portion of the expenses is incurred in the joint rendition of these services. In state rate making, this problem is resolved by subtracting from the mixed investment and the mixed expenses a percentage which has *982 been allocated to interstate service in order to assure that intrastate rates are fixed on the basis of the correct rate base and expenses. This procedure is called "separations" in the telephone industry.
The Supreme Court, in Smith v. Illinois Bell Telephone Co., 282 U.S. 133, 51 S.Ct. 65, 75 L.Ed. 255 (1930), established the principle of "actual use" or "relative use" as a proper basis for the separation of telephone property, revenues and expenses between the interstate and intrastate operations of the company involved. Generally speaking, the actual use of telephone lines for interstate calls may be determined from the Company's time records of interstate toll calls. The interstate use of plant, switching facilities and related expenses, however, cannot be determined directly from the records. Instead, this is estimated by developing a ratio or factor, called the "subscriber plant factor," which is then applied to the pertinent investment and expenses in order to allocate the appropriate portion to interstate operations. The "subscriber plant factor" is derived from a simpler ratio or fraction based on interstate toll call time records, called the "subscriber line use" ratio. The numerator of the "subscriber line use" ratio or fraction consists of the total minutes of interstate use, and the denominator consists of the total minutes of use of the lines, both intrastate and interstate. The "subscriber line use" ratio is multiplied by 3.39 to determine the "subscriber plant factor." The 3.39 is an element used to reflect the fact that "toll rate schedules inherently have a deterrent effect on the use of non-traffic sensitive plant."[4] Thus it is apparent that a substantial understatement or overstatement of the minutes of interstate use in the numerator of the "subscriber line use" ratio will significantly affect the related "subscriber plant factor" and the allocation of plant and switching facilities to interstate operations.
The separations controversy in this case involves the question of whether the minutes of interstate use in Louisiana by the Federal Telecommunications System (FTS), an extensive system of interstate private lines leased to the federal government, should be included in the numerator of the "subscriber line use" ratio. It is undisputed that all of the revenues received by the Company from FTS are interstate revenues. The FTS calls, which are mostly interstate, flow through lines and plant used jointly by local, intrastate calls. However, the total interstate minutes of use by FTS are not recorded because FTS is billed on a flat charge, rather than being billed on the regular customer basis of minutes per call. It is primarily for this reason that the Company takes the position that the FTS use of facilities in Louisiana should not be included in the numerator of the "subscriber line use" ratio.
The Commission did not approve the utility's proposed treatment in the rate proceeding. Instead, the agency approximated[5] the amount of line use by FTS and used all of it in determining the "subscriber line use" ratio, which it in turn used to derive the "subscriber plant factor." On the basis of these formulae, the Commission adjusted the Company's data and calculations to require additional separations in the amounts of $10,192,000 from intrastate rate base and $3,562,000 from intrastate expenses. The district court affirmed finding that the Commission's estimate and adjustments were reasonable in the absence of accurate evidence directly showing the actual amount of time the lines were used by FTS in interstate communications. On appeal South Central Bell attacks on several grounds the Commission's method of estimating the FTS minutes of use of Company lines as well as its decision to include them in the numerator of the "subscriber line use" ratio.
*983 South Central Bell places great reliance on its interpretation of the Separations Manual developed by the National Association of Regulatory Utility Commissioners. According to the manual's foreword it represents the product of the joint efforts made over a period of many years by the technical experts of the regulatory agencies and telephone industry to design fair and equitable separations methods. The manual recognizes the "actual use" principle established by Smith v. Illinois Bell Telephone Co., supra, as the "fundamental basis on which separations are made." NARUCFCC Cooperative Committee on Communications, Separations Manual, ¶ 11.13 (1971). Nevertheless, the Company contends, as we understand its argument, that one of the manual's provisions implies that the actual use by FTS of plant and lines in interstate calls should not be estimated by use of the "subscriber plant factor" and must be ignored in the absence of systematic time use measurement records. That provision, ¶ 11.22(3)(d), states:
"Underlying the procedures included in this manual for the separation of plant costs is an over-all concept which may be described as follows:
"* * *
"3. In general, the bases for apportioning telephone plant used jointly for state and interstate operations are:
"* * *
"d. A subscriber plant factor is the basis for apportioning the cost of message telephone subscriber plant and the non-traffic sensitive portion of local dial switching plant between state and interstate operations. The subscriber plant factor is developed by the use of a two part formula (See Par. 23.444), the first part of which is designed to develop a basic cost per holding time minute of use for application alike to each exchange and toll holding time minute of use and the second part of which is designed to add to the basis cost thus assigned to each toll holding time minute an additive cost reflective of the fact that toll rate schedules inherently have a deterrent effect on the use of non-traffic sensitive plant and that this deterrent effect increases as the distance of the related toll call increases." (Emphasis supplied).
According to the Company, the reference to the deterrent effect of toll rate schedules implies that the "subscriber plant factor" is to be used exclusively for apportioning costs incurred in serving subscribers who pay long distance tolls and not the FTS which pays a flat charge. Furthermore, the utility argues, it is unfair to apply to FTS use the additive cost built in to the "subscriber plant factor" to reflect that long distance callers tend to curtail conversations due to the graduated costs of toll fares; a caller on FTS, which pays a flat rate, is not subject to any such deterrent effect, according to the Company.
The Commission effectively counters these arguments, first, by pointing out that they are contrary to the basic principle that separations should be made on the basis of actual use. To disregard the actuality that FTS interstate calls flow through lines and equipment supported by Louisiana ratepayers simply because the Company has not kept records of the calls would be to exalt form over substance and to require the Company's intrastate subscribers to bear the cost of investment and expenses devoted to interstate operations. Moreover, as the Commission correctly indicates, in addition to the paragraph stating that actual use is the fundamental basis for separations, there are several other provisions of the Separations Manual which demand that all minutes of use be considered for cost allocation purposes. See, 15 P.U.R.4th at 103. The Commission further contends that usage of the FTS is subject to a deterrent effect similar to long distance toll use because the government monitors and limits the duration of calls on its lines to avoid inefficiency and the expense of additional lines. Although the agency does not cite any evidence in the record supporting this conclusion, the Company does not contest it, and we note that another commission has made a similar determination. Re Chesapeake & Potomac Telephone Co., 4 P.U. R.4th 1, 12 (1974). For these reasons we *984 agree with the district court that the Commission interpretation of the Separations Manual is reasonable and should be affirmed. A strong argument could also be made for the proposition that the Commission is not necessarily bound by the Separations Manual but is free to apply any reasonable method of separation which is not arbitrary, capricious or unfair. We pretermit a consideration of this issue, however, as being unnecessary to our decision in this case.
The Company claims that its treatment of the FTS minutes of use is the same as that employed by all other jurisdictions, except for the District of Columbia Commission. We have examined the single case cited by South Central Bell in support of its separations procedure, Re Ohio Bell Telephone Co., 15 P.U.R.4th 344 (Ohio 1976), and have compared it with the decision of the District of Columbia Commission advancing the opposite viewpoint. See, Chesapeake & Potomac Telephone Co., 4 P.U. R.4th 1 (1974). We frankly find the reasons given in the Chesapeake & Potomac opinion to be more persuasive and more consistent with the notion of separating revenue, property and expenses between intrastate and interstate operations on the basis of the actual use to which the utility's property is put. As a matter of fact, the Commission in the Ohio Bell proceedings advanced no reasons except its conclusion that the weight of the evidence indicated the company's methodology was proper and reasonable. On judicial review the fact that our commission has aligned itself with a minority view should not be allowed to obscure the logic and reasonableness of its position. Although impressive numbers of authorities may be arrayed on the other side of the issue, once we determine, as we do here, that the Commission has not been unreasonable or arbitrary in its procedures our judicial inquiry is at an end.
South Central Bell also advances an argument based on equitable considerations. It urges that the Commission's separations procedure will create a hiatus in that the investment and expenses in question will not be included in either a state or an interstate regulatory jurisdiction; consequently, there will be no compensation for a substantial amount of the Company's property. The Commission takes issue with this prediction, stating that even if the property and expenses are excluded altogether from consideration in the fixing of intrastate rates the Chesapeake & Potomac case demonstrates the likelihood they will be accepted by the F.C.C. in fixing rates. Although the case does seem to support the Commission's assertion, we are not prepared to evaluate its prediction on the basis of this decision alone. Weighing the equities independently of this argument by the Commission, however, we find that the principles articulated in Smith v. Illinois Bell Telephone Co., supra, indicate that the Commission's approach to separations was equitable from the standpoint of apportionment of costs on the basis of actual use. In holding that an allocation of cost of exchange property between intrastate and interstate message services was required, the court stated:
"While the difficulty in making an exact apportionment of the property is apparent, and extreme nicety is not required, only reasonable measures being essential [citations omitted] it is quite another matter to ignore altogether the actual uses to which the property is put. It is obvious that, unless an apportionment is made, the intrastate service to which the exchange property is allocated will bear an undue burdento what extent is a matter of controversy. We think that this subject requires further consideration, to the end that by some practical method the different uses of the property may be recognized and the return properly attributable to the intrastate service may be ascertained accordingly." 282 U.S. at 150, 51 S.Ct. at 69, 75 L.Ed. at 264.
The principles announced in the Smith case fully support the action of the Commission. It is clear that South Central Bell's property is being employed in providing service to both the interstate FTS and the local, intrastate ratepayers. The Commission reasonably determined that to make a proper apportionment *985 would not require an extreme nicety, and failure to act would require that it ignore altogether the actual uses to which the property was being put. It is obvious that unless the Commission had required an adjustment in the apportionment the intrastate service would have borne an undue burden. In our opinion the action taken by the Commission in assigning to the interstate operations a fair share based on actual use was more equitable and more in keeping with the principles of sound rate making than giving preferred treatment to the interstate operations by ignoring the FTS use.
In its final argument the Company assails the method by which the Commission estimated the FTS minutes of use as having been based upon a premise that is contrary to the evidence. The Commission found that one of South Central Bell's 176 exchanges within the state of Louisiana was dedicated exclusively to serving the FTS network. Assuming that each exchange produced the same amount of minutes of use and that all of the FTS minutes of use were involved with interstate communications, the Commission recomputed the "subscriber line use" ratio and the "subscriber plant factor." These recomputations led to the Commission's adjustments decreasing the intrastate rate base and the intrastate expenses mentioned earlier.
South Central Bell now contends that the ratio of 1/176, which is the mathematical base from which the Commission's entire recomputation flows, was founded upon a faulty assumption. According to the Company's brief, South Central Bell has not dedicated one whole "exchange" to handling the FTS traffic as the Commission assumed, but only one of the many "switching facilities" in the "exchange" in question. If this is correct, the key to the Commission's separations adjustment is contrary to fact.
The evidence underlying this purely factual determination is sketchy and ambiguous. One of the Company's witnesses testified as follows:
"Q. You mentioned that you have a dedicated switching facility providing this Switched Private Line Service [for the FTS], is that correct?
"A. That is correct."
Another utility witness' prepared statement, in generally describing the facilities of the Company, alluded to the fact that in Louisiana the Company serves its customers "through 176 exchanges, many of which contain numerous switching centers." We have not been directed to any other evidence shedding light on this issue. Nor have we discovered any means, using the present record, by which we could discover with reasonable certainty the meaning in context of the three terms in question, viz., "exchange," "dedicated switching facility," and "switching center." Under these circumstances, although we are prepared to accord the proper respect to the facts as found by the Commission, we conclude there is not sufficient evidence in the record to support a factual determination crucial to its estimation.
Accordingly, we approve the Commission's decision to include the FTS minutes of interstate use in the numerator of the "subscriber line use" ratio; we agree with the district court that the Commission's method of estimating such use was reasonable in the absence of accurate evidence showing the precise measurement of minutes employed in intrastate versus interstate use during the 1975 test year; but because of the lack of supporting evidence we will remand the case to the Commission for reconsideration and clarification of its factual determination that one of the Company's 176 exchanges is dedicated entirely to FTS traffic.
Conclusion
Except for any revision which may be required by the reconsideration of the factual issue involved in the separations adjustments, we conclude that the total effect of the Commission's rate order, when combined with its attrition allowance, cannot be said to be unjust or unreasonable. Specifically, we find that the Commission fairly and reasonably determined for regulatory purposes the Company's capital structure, *986 cost of debt, cost of equity and fair rate of return. The Commission's attrition allowance and research and development adjustment were not arbitrary or unreasonable. We approve of the Commission's approach and calculations in making its separations adjustments, but we find that there is not sufficient evidence to support one factual finding crucial to its determination.
For the foregoing reasons the judgment of the district court is vacated and the case is remanded to the Commission with the following instructions. The Commission is directed to reinstate its original research and development adjustment, adopt the attrition allowance calculated by it on remand from the district court, and reconsider and redetermine its factual finding that the Company dedicated one of its 176 exchanges entirely to FTS traffic during the test year. In reconsidering this factual issue the Commission may, within its discretion, take any additional evidence which it deems necessary. After complying with the above instructions and making any modifications of its separations adjustments necessitated by a redetermination of the factual question, the Commission shall proceed without taking further evidence to decide whether the Company is entitled to a rate increase, and to enter such order as justice may require.
Because of the extensive delays in this case, which have been contributed to by the reorganization of the public service commission required by the Louisiana Constitution of 1974, we will retain jurisdiction of this matter under our general supervisory jurisdiction for expeditious review. If the Company is dissatisfied with the Commission's decision, it may by motion filed in this Court within fifteen days following the Commission's action, bring the matter before us for further consideration.
The district court judgment is vacated and the case is remanded to the public service commission with instructions.
SANDERS, C. J., concurs in part and dissents in part with written reasons.
MARCUS, J., dissents and assigns reasons.
SUMMERS, J., dissents for the reasons assigned by MARCUS, J.
SANDERS, Chief Justice (concurring in part and dissenting in part).
I concur with the majority in the resolution of all major issues save two: the attrition allowance and research and development costs. As to these, in my opinion, the determinations of the district court are correct and fall within the proper scope of judicial review. I would affirm the judgment of the district court.
For the reasons assigned, I concur in part and dissent in part.
MARCUS, Justice (dissenting).
I dissent from the majority opinion. I do not consider that the majority in affirming the Commission allows South Central Bell a fair rate of return. First, I believe that the decision to utilize the capital structure of the Bell System, rather than that of South Central Bell, is incorrect. I feel that South Central Bell's capital structure of 45% debt and 55% equity is the appropriate ratio to use in determining the company's overall rate of return. Secondly, I consider the majority erred in affirming the Commission in fixing the cost of debt at that of the Bell System. On the contrary, I believe that South Central Bell's actual cost of debt of 7.61% is the proper cost to be used in computing its rate of return. Thirdly, I agree with the majority and the Commission in fixing South Central Bell's cost of equity at 10.5-11.5%. Predicated on these findings and applying the formula accepted by the Commission, I find that South Central Bell is entitled to earn 9.20-9.75% as a fair rate of return. Accordingly, I would recommend that the case be remanded to the Commission to increase rates to produce additional revenues so that South Central Bell would be able to realize an overall rate of return of 9.20%.
I also disagree with the majority in affirming the attritional allowance of $6,714,000 found by the Commission. I find this *987 amount insufficient. Although I approve the method used by the district judge in determining the attritional allowance, I do not believe he accorded sufficient weight to certain factors which tend to offset the effects of attrition. Therefore, I consider the $26,320,000 allowed by the district court too high. However, in view of my conclusion that South Central Bell is entitled to an overall rate of return of 9.20% and taking into consideration the factors which tend to offset attrition, I conclude that the attritional allowance of $26,320,000 is appropriate under the circumstances to assure that the company will realize this increased rate of return during the present inflationary period. Accordingly, I would affirm the district court's allowance of $26,320,000 for attrition.
Furthermore, I disagree with the majority's affirmance of the Commission's treatment of research and development costs. I do not feel that these costs should be capitalized; rather, I agree with the district court that the cost attributable to research and development should be treated as an operating expense.
Finally, I agree with the Commission's allocation or "separation" of investment and expenses of the FTS between interstate and intrastate jurisdictions. I believe that the Commission's decision was proper and appropriate under the circumstances. I do not find that a remand is necessary on this point.
I shall now proceed to set forth my reasons for arriving at the foregoing conclusions. I consider it necessary and appropriate to review in detail the history of the proceedings, the contentions of the parties, the applicable law, and the individual issues involved.
HISTORY OF PROCEEDINGS
On April 18, 1975, South Central Bell, a wholly-owned subsidiary of American Telephone and Telegraph Company (hereinafter referred to as AT&T), filed an application before the Commission seeking an increase in intrastate tariffs sufficient to provide an additional $73,000,000 in gross revenues per annum on a Louisiana intrastate basis. The application was based on data and computations concerning a forecasted test year ending June 30, 1976. In November, 1975, South Central Bell submitted new evidence to the Commission relying on a forecasted test year ending December 31, 1976, and amended its application by requesting additional tariffs of $16,000,000, thereby seeking a total increase in tariffs of $89,000,000. While the proposed rate increase was under consideration by the Commission, South Central Bell filed a petition for injunction and mandamus in the district court to require a decision by the Commission on the company's application for a rate increase by April 18, 1976, and the establishment of interim rates under bond in absence of a decision by the Commission. The district court issued a writ of mandamus ordering the Commission to render its decision no later than April 18, 1976, and, in default thereof, to implement the proposed rate increase, subject to a bond to assure refunds.[1] Pursuant to an application filed by the Commission, this court issued an order to stay the execution of the judgment of the district court and also issued a writ of certiorari to review the correctness of the lower court's ruling.[2] After review, this court reversed the judgment of the district court and ordered that a writ of mandamus issue to the Commission directing it to render a decision on South Central Bell's application for a rate increase no later than thirty days from the finality of the judgment. However, this court concluded that the trial judge was without authority to order the interim rate increase.[3]
On June 15, 1976, the Commission issued an order in which it denied in full South Central Bell's application for a rate increase.[4]*988 In its written opinion, the Commission, inter alia, found that 1975 was the appropriate test year, using the average rate base for that year, thereby rejecting the use of forecasted test years for the purpose of establishing rates as requested by South Central Bell. After finding that the capital structure of the Bell System was the appropriate one to use in the determination of the rate of return of South Central Bell, the Commission then fixed the cost of debt for South Central Bell at 6.8% and the cost of preferred stock at 7.8%. These figures were based on the actual cost rates of debt and preferred stock of the Bell System rather than South Central Bell's cost of debt of 7.61%. The Commission fixed the cost of equity at 10.5-11.5% and computed the overall rate of return at 8.55-9.01%. The Commission's order became effective on June 28, 1976.
On July 23, 1976, pursuant to La.Const. art. 4, § 21(E) (1974),[5] South Central Bell filed a petition in the district court seeking judicial review of the Commission's order dated June 15, 1976. It further sought an injunction to permit the imposition of an interim rate increase pending the outcome of its appeal.[6] The application for an injunctive relief was denied by the district court which ruling was affirmed by this court on appeal.[7]
On January 4, 1977, the district court, in written reasons for judgment on South Central Bell's application for judicial review of the Commission's order dated June 15, 1976, upheld the Commission's order on all but one of the regulatory issues presented for its review. Specifically, the district court disagreed with the Commission's determination that research and development costs paid by South Central Bell to AT&T under the License Contract Agreement should be capitalized and recouped in the future through amortization but rather concluded that these costs should be treated as a current expense item. The district court further found that the Commission committed error by not making an allowance in fixing rates for the effects of attrition and inflation to offset their impact on the rate of return and remanded the case to the Commission to make whatever adjustments in the rates as were necessary to permit South Central Bell to realize the rate of return found by the Commission and approved by the court as fair. The court stated that such action was to be completed by the Commission within forty-five days from the date of the judgment. On January 6, 1977, a judgment, drafted and presented to the district court by South Central Bell, was adopted by the court in which it was ordered that the case be remanded to the Commission for further proceedings and "specifically for the purpose of receiving evidence" and making any findings necessary to comply with the judgment of the district court. Pursuant to this judgment, South Central Bell submitted to the district court and to the Commission new evidence in the form of affidavits and filed testimony of three expert witnesses which related the effects of attrition on the overall rate of return of the company. Subsequently, the Commission filed in the district court a motion to amend the judgment by altering its phraseology so as "to eliminate any uncertainty that the receipt and consideration by the Commission of new evidence not contained in the record on the remand of this case is discretionary." Opposition to this motion was asserted by South Central Bell which argued that any alteration in the phraseology of the judgment would involve a substantive matter which could only be modified by a motion for a new trial, the delay for which had already run. The district court denied any formal amendment of the judgment but explained that consideration of the evidence filed by South Central Bell on the remand was discretionary with the Commission.
*989 On February 16, 1977, following a review of the case on remand from the district court, the Commission reported its findings to the district court as to the adjustments necessitated by the expensing of research and development costs and by allowance for attrition. Specifically, after making adjustments to comply with the district court's decision to expense research and development costs, the Commission concluded that an increase in rates of $1,728,000 was necessary to preserve the 8.7% rate of return. The Commission also found that an additional increase in rates of $6,714,000 was necessary to offset the impact of attrition on the overall rate of return. Hence, a total rate increase of $8,447,000 was required to implement the findings of the district court.[8] After return of the record to the district court, South Central Bell filed a petition for review of the Commission's findings in which the company argued that the attrition allowance specified by the Commission was inadequate in that a revenue increase of about $53,000,000 was needed to offset the impact of attrition and inflation. On March 11, 1977, the district court amended the order of the Commission and ordered intrastate rates increased to produce an additional $26,320,000 in revenues to offset the effects of attrition and inflation as of January 1, 1976 so that an overall rate of return of 8.7% which was realized by South Central Bell in the historical test year of 1975 might be preserved. Both South Central Bell and the Commission have appealed from this decision.[9]
CONTENTIONS
On appeal, South Central bell assigns as error:
(1) the Commission's decision to utilize the capital structure of the Bell System, rather than that of South Central Bell, in computing the overall rate of return of the company;
(2) the Commission's decision to assess the cost of debt at the Bell System's cost of 6.8%, as opposed to the company's cost of debt of 7.61%;
(3) the Commission's decision to fix the cost of equity at 10.5-11.5% in that such return is far below that required by South Central Bell to attract new capital and to pay investors a fair return and is discriminatory when compared with the earnings of other utilities having corresponding risks;
(4) the district court's denial of South Central Bell's request for an additional allowance of $21,000,000 to $26,000,000 to offset the effects of attrition and inflation experienced by the company since the 1975 historical test year; and
(5) the Commission's finding that an allocation of investment and expenses of the Federal Telecommunications System between intrastate and interstate jurisdictions was required.
The Louisiana Public Service Commission has answered this appeal and in turn assigns as error:
(1) the district court's ruling which ordered an increase in intrastate rates to provide for an allowance for attritional effects and which fixed the allowance at $26,320,000 based upon evidence filed by South Central Bell with the district court and the Commission on remand; and
(2) the district court's determination to require the expensing of research and fundamental development costs paid by South Central Bell to AT&T pursuant to the License Contract Agreement, as opposed to the capitalization and recoupment of these costs in the future as proposed by the Commission.
LAW
La.Const. art. 4, § 21(B) (1974) provides that the Louisiana Public Service Commission *990 "shall regulate all common carriers and public utilities and have such other regulatory authority as provided by law. It shall adopt and enforce reasonable rules, regulations, and procedures necessary for the discharge of its duties, and shall have other powers and perform other duties as provided by law." Under La.Const. art. 4, § 21(E) (1974), an appeal may be taken in the manner provided by law by any aggrieved party to the district court. All such cases shall be tried in the same manner as civil cases. The court may affirm the order of the Commission complained of, or it may change, modify, alter, or set it aside, as justice may require. La.R.S. 45:1192. A right of direct appeal from any judgment of the district court shall be allowed to the supreme court. These rights of appeal shall extend to any action of the Commission. La.Const. art. 4, § 21(E) (1974). According to the settled jurisprudence of this court, the orders of the Louisiana Public Service Commission must be accorded great weight and will not be disturbed in the absence of a clear showing of abuse of power. Greater Livingston Water Company v. Louisiana Public Service Commission, 294 So.2d 501 (La.1974); Monochem, Inc. v. Louisiana Public Service Commission, 253 La. 1047, 221 So.2d 504 (1969); United Gas Pipe Line Co. v. Louisiana Public Service Commission, 241 La. 687, 130 So.3d 652 (1961); Southern Bell Telephone & Telegraph Co. v. Louisiana Public Service Commission, 239 La. 175, 118 So.2d 372 (1960); Gulf States Utilities Co. v. Louisiana Public Service Commission, 222 La. 132, 62 So.2d 250 (1952). Courts should act slowly in substituting their own views for those of the expert body charged with the legislative function of rate making, a technical field which embraces farreaching economic policies.
The obligation of the Louisiana Public Service Commission in rate cases is to fix "just and reasonable rates" to be charged by public utilities. La.R.S. 45:1176. The fixing of rates involves a delicate balancing of consumer and investor interests. Rulings of the Louisiana Public Service Commission in which intrastate rates for public utilities are fixed will be upheld when the rates so fixed are "just and reasonable." Only where the action of the Commission is found to be arbitrary or capricious in that it is either plainly contrary to the facts or unsupported by evidence will the rates be declared to be unjust and unreasonable. Gulf States Utilities Co. v. Louisiana Public Service Commission, supra. The guiding principles have been laid down in the case of Federal Power Commission v. Hope Natural Gas Company, 320 U.S. 591, 64 S.Ct. 281, 88 L.Ed. 333 (1944) where the Court said:
Under the statutory standard of `just and reasonable' it is the result reached not the method employed which is controlling. Cf. Los Angeles Gas & E. Corp. v. Railroad Commission, 289 U.S. 287, 304, 305, 314, 53 S.Ct. 637, 77 L.Ed. 1180, 1191, 1192, 1197; West Ohio Gas Co. v. Public Utilities Commission, 294 U.S. 63, 70, 55 S.Ct. 316, 79 L.Ed. 761, 768; West v. Chesapeake & P. Teleph. Co., 295 U.S. 662, 692, 693, 55 S.Ct. 894, 79 L.Ed. 1640, 1657, 1658 (dissenting opinion). It is not theory but the impact of the rate order which counts. If the total effect of the rate order cannot be said to be unjust and unreasonable, judicial inquiry under the Act is at an end. . . .
The rate-making process under the Act, i. e., the fixing of `just and reasonable' rates, involves a balancing of the investor and the consumer interests. . . . [T]he investor interest has a legitimate concern with the financial integrity of the company whose rates are being regulated. From the investor or company point of view it is important that there be enough revenue not only for operating expenses but also for the capital costs of the business. These include service on the debt and dividends on the stock. . . By that standard the return to the equity owner should be commensurate with returns on investments in other enterprises having corresponding risks. That return, moreover, should be sufficient to assure confidence in the financial integrity of the enterprise, so as to maintain its credit and to attract capital. . . .
*991 . . . Rates which enable the company to operate successfully, to maintain its financial integrity, to attract capital, and to compensate its investors for the risks assumed certainly cannot be condemned as invalid, even though they might produce only a meager return on the so-called `fair value' rate base.
A fair rate of return in a given case is a judgment percentage of the rate base which the utility is entitled to earn for interest, dividend payments and related requirements. The return should be reasonably sufficient to assure confidence in the financial soundness of the utility, and should be adequate, under efficient and economical management, to maintain and support its credit and enable it to raise the money necessary for the proper discharge of its public duties. Bluefield Water Works & Improvement Company v. Public Service Commission of State of West Virginia, 262 U.S. 679, 43 S.Ct. 675, 67 L.Ed. 1176 (1923). The question of the reasonableness of a return is one of fact rather than of law requiring the application of enlightened judgment to the multiplicity of variables disclosed by the evidence. United Gas Pipe Line Co. v. Louisiana Public Service Commission, supra.
CAPITAL STRUCTURE
South Central Bell contends that the Commission was arbitrary in utilizing the capital structure of the Bell System in computing its overall rate of return rather than its actual capital structure. In defense of its decision, the Commission argues that, since South Central Bell is a wholly-owned subsidiary of AT&T, it is appropriate to use the capital structure of the Bell System in determining the rate of return of South Central Bell.
The evidence presented to the Commission revealed that during the test year of 1975 South Central Bell's capital structure was approximately 45% debt and 55% equity before stock issues and short-term repayments. On the other hand, the capital structure of the Bell System during this period was approximately 49.5% debt, 4.4% preferred stock and 46.1% common equity. Several expert witnesses testified that the announced objective capital structure of AT&T was a debt ratio of 45%, similar to that of South Central Bell. Moreover, an opinion was expressed that in the absence of this publicly-announced objective and of steps taken by AT&T to achieve this reduced percentage of debt capital, it was doubtful that the bonds of the Bell System companies would maintain their AAA rating. Expert testimony further revealed that a decrease in the debt ratio of the Bell System to 45% was desirable in that it would result in a reduction of the cost of debt and equity capital and would increase access to the capital markets. Based on these facts, expert witnesses advocated the use of a capital structure of 45% debt and 55% equity in computing South Central Bell's overall rate of return.
Nevertheless, the Commission rejected the use of South Central Bell's actual capital structure of 45% debt and 55% equity and instead adopted the capital structure of the Bell System. It did not consider the debt ratio of the Bell System excessive nor the capital structure unreasonable. Accordingly, the Commission used the capital structure of the Bell System consisting of 49.5% debt, 4.4% preferred stock and 46.1% common equity in computing the overall rate of return of South Central Bell.
In determining the appropriate capital structure to be used in the computation of the rate of return, I consider it inappropriate to make rates for the regulated utility using the capital structure of the parent company when the actual capital structure for the company is available and more desirable. Moreover, methods of raising capital should be left to the discretion of management unless there is a substantial showing that ratepayers are being prejudiced materially by the managerial options in the area of capital financing. Mountain States Telephone & Telegraph Co. v. Colorado Public Utilities Commission, 182 Colo. 269, 513 P.2d 721 (1973); Re The Mountain States Telephone & Telegraph Co., 8 PUR 4th 514 (Colo.Pub.Util.Comm.1974).
*992 After review of the record, I am convinced that the Commission's decision to utilize the capital structure of the Bell System rather than that of South Central Bell was arbitrary and capricious. Although South Central Bell is a wholly-owned subsidiary of AT&T, it has a corporate existence separate and apart from that of its parent corporation. It is South Central Bell that is being regulated by the Commission, not either AT&T or the Bell System. Moreover, no showing was made that the capital structure of South Central Bell was either unreasonable or at variance with the usual and accepted practice or that it imposed an unfair burden on the consumer. On the contrary, South Central Bell's capital structure of 45% debt and 55% equity was considered by the expert witnesses to be financially sound and the appropriate one on which to compute the overall rate of return. The capital structure was also approved by this court as appropriate on two previous occasions. Southern Bell Telephone & Telegraph Co. v. Louisiana Public Service Commission, 239 La. 175, 118 So.2d 372 (1960); Southern Bell Telephone & Telegraph Co. v. Louisiana Public Service Commission, 232 La. 446, 94 So.2d 431 (1957). Furthermore, a capital structure of 45% debt and 55% equity was the announced objective capitalization ratio of AT&T as financial overseer of the Bell System. The arbitrary and capricious nature of the Commission's decision to use the Bell System's actual capital structure consisting of debt, preferred stock and common equity is particularly evident in view of the fact that South Central Bell has no preferred stock.
For the above reasons, I feel that the Commission's decision to utilize the capital structure of the Bell System, rather than that of South Central Bell, in computing South Central Bell's overall rate of return was unsupported by the evidence and therefore was arbitrary and capricious. As such, it constituted a clear abuse of power. I believe that South Central Bell's capital structure of 45% debt and 55% equity was the appropriate ratio on which to determine the company's overall rate of return.
COST OF DEBT
South Central Bell contends that the Commission erred in computing its rate of return upon the Bell System's cost of debt of 6.8% rather than South Central Bell's actual cost of debt of 7.61%. The Commission reasoned that once having determined that the Bell System's capital structure was appropriate to use in computing South Central Bell's rate of return, it followed that the Bell System's cost of debt should also be used.
There is no dispute as to South Central Bell's cost of debt which consists of embedded and current costs of debt capital. Giving consideration to these existing contractual interest costs as well as the estimated costs of anticipated bond offerings and short-term borrowings, the evidence was uncontradicted that South Central Bell's cost of debt would range from 7.61 to 7.71%. Accordingly, the experts concluded that the cost of debt used in computing South Central Bell's rate of return should be based on these figures.
South Central Bell's debt securities are rated AAA by both Standard & Poor's and Moody's (major bond rating agencies). This rating assures the widest possible access to the money market at the lowest possible interest rate. Expert testimony indicated that in order for South Central Bell's bonds to maintain their AAA rating, the company's earnings should exceed its interest charges by about three times. If this level of interest coverage is not sustained, the bonds would be downgraded thereby adversely affecting the company's ability to obtain needed funds and increasing their cost. Moreover, downgrading of the bonds would reduce by millions of dollars the market values of outstanding bonds held by investors. Therefore, an adequate level of interest coverage was advocated as a means of maintaining the AAA rating of South Central Bell's bonds.
Additionally, since South Central Bell is contractually obligated to pay interest charges based on the actual rates set in its debt securities, the effect of fixing cost of *993 debt at a figure lower than its actual cost of debt would be that the overall rate of return fixed by the Commission as applied to the rate base would not produce sufficient revenues to enable the company to meet its actual cost of debt without reducing its return on equity capital below that determined by the Commission as fair. Moreover, it might have the further effect of reducing the level of interest coverage to the extent of affecting the AAA rating of South Central Bell's bonds.
Accordingly, I consider that the Commission erred in fixing the cost of debt at that of the Bell System. Rather, I believe that South Central Bell's actual cost of debt of 7.61% is the proper cost to be used in computing its rate of return.[10] This finding is consistent with my previous determination that the overall rate of return should be calculated on the basis of South Central Bell's capital structure rather than that of the Bell System.
COST OF EQUITY
South Central Bell assigns as error the Commission's decision to fix the cost of equity at 10.5-11.5% in computing its overall rate of return. The company contends that the rate of return used by the Commission is far below that required to attract new capital and to pay investors a fair return and is discriminatory when compared with the earnings of other utilities having corresponding risks.
The experts who testified on behalf of South Central Bell as to the cost of equity were Mr. J. D. Matheson, vice president of South Central Bell in the Revenue Requirements Department; Mr. Robert R. Nathan, a consulting economist; Mr. Robert E. LaBlanc, a general partner and manager of Salomon Brothers, an investment banking firm; and Mr. Charles W. McCoy, president and chairman of the board of Louisiana National Bank in Baton Rouge. These experts concluded that the Commission should fix South Central Bell's cost of equity at 13-15% in computing its overall rate of return. The testimony was generally to the effect that in order to induce the commitment of new capital, a return on equity of three to five percentage points above the return available on South Central Bell's bonds would be required. Therefore, since the company's current bonds were yielding 8-10%, a return on book equity of 13-15% would be necessary to attract new stock investors. Moreover, to insure the sale of new equity at net proceeds per share at least equal to book value, the market value of its stock should be maintained at about 20% above book value. It was argued that this would be accomplished where the return on book equity was in the 13-15% range. Additionally, a comparable earnings approach was advanced to support the recommended rate of return; rates of earnings of other companies were cited for the purpose of comparison.
After reviewing the testimony and documentary evidence presented at the hearings, the Commission decided to fix South Central Bell's cost of equity for the 1975 test year at 10.5-11.5%. In support of its decision, the Commission emphasized that AT&T, the parent corporation of the Bell System, had not historically required a return on equity in excess of 10.5% in order to attract equity investment and in fact in 1975 had earned only 9.8% on its book equity. In the Commission's opinion, fixing South Central Bell's cost of equity at 10.5-11.5% would provide a safe margin as well as a rate which would have allowed the company to sell its stock above book value if its stock were traded on the open market rather than owned entirely by AT&T. The Commission was further impressed by the fact that the high rates of return recommended by the expert witnesses were attributable in large measure to the unusual impact of the recession experienced in *994 recent years. The Commission also rejected the comparable earnings approach in that no similarity of investment risk or reasonableness of earnings was established between the allegedly comparable companies and South Central Bell. Ex Parte South Central Bell Telephone Co., 87 PUR 3d 498 (La.Pub.Serv.Comm.1971).
In the final analysis, South Central Bell is entitled to earn a return on its equity capital equal to that being made on investments in other enterprises with corresponding risks and uncertainties. As the parent corporation of the Bell System, AT&T is such an enterprise and the Commission correctly used its cost of equity as the appropriate standard of comparison in fixing the cost of equity of South Central Bell. The Commission's decision to fix the cost of equity at 10.5-11.5% was based on a careful evaluation of the return on equity requirement of AT&T, which historically had not exceeded 10.5%, and an adjustment of that requirement which would have permitted the stock of South Central Bell to sell above book value if traded on the open market. Accordingly, I do not find that the Commission erred in fixing South Central Bell's cost of equity at 10.5-11.5% in computing its overall rate of return.
COMPUTATION OF THE OVERALL RATE OF RETURN
Predicated on my findings that South Central Bell's capital structure of 45% debt and 55% equity is the appropriate basis on which to compute its overall rate of return, that the cost of debt is 7.61% and that the cost of equity is 10.5-11.5%, the overall rate of return may now be determined by applying the formula accepted by the Commission and all of the expert witnesses:
Proportion of Debt × Cost of Debt
45% × 7.61% = 3.42%
Proportion of
Equity × Cost of Equity
55% × 10.5-11.5% = 5.78-6.33%
__________
Overall Rate
of Return = 9.20-9.75%
Therefore, the overall rate of return which South Central Bell is entitled to earn is 9.20-9.75%. I consider this a fair rate of return.
ATTRITIONAL ALLOWANCE
Both South Central Bell and the Commission have appealed the district court's judgment ordering an increase in intrastate rates to produce an additional $26,320,000 in revenues to offset the effects of attrition and inflation experienced by South Central Bell since the 1975 historical test year. The Commission contends that the district court erred in granting any attritional allowance and alternatively that if the court determines an attritional allowance should be granted, the district court erred in fixing the allowance at $26,320,000, based on evidence filed by South Central Bell with the Commission on remand, rather than at $6,714,000 which was determined by the Commission to be a sufficient allowance. On the other hand, South Central Bell asserts that the court erred in granting an attritional allowance of only $26,320,000 rather than the allowance of approximately $53,000,000 requested by the company.
After remand by the district court to the Commission to make whatever adjustments necessary to offset the effects of attrition and inflation on South Central Bell's overall rate of return since the 1975 test year, South Central Bell filed with the district court and the Commission additional evidence on the impact of attrition and inflation experienced by the company in 1976 and anticipated in 1977. This evidence included the company's actual investment, revenues and expenses based on the average year 1976, year-end 1976 and forecasted data for the average year 1977. Although briefly reviewed by the Commission, this evidence was not relied on by it in determining the attritional allowance. The Commission specifically rejected the use of the year-end rate base and an adjustment to the rate of return as methods of computing the allowance but instead adopted a detailed study approach in which the relationship between revenues, expenses and plant investment (rate base) were examined during the past ten years as a means of ascertaining an appropriate allowance for attrition to offset its effect on the company's *995 future realized rate of return. On the basis of this analysis, the Commission projected an annual rate of attrition of .4% which, when applied to the 1975 average rate base adopted by the Commission and after adjustment for taxes, translated into a needed increase in revenues of $6,714,000.
After reviewing the Commission's decision, the district court rejected the attritional allowance as fixed by the Commission concluding that the Commission's action was arbitrary and unreasonable in that it would not produce revenues necessary to insure the healthy operation of the utility. Rather, the court adopted the findings of Mr. D. M. Ballard, assistant chief accountant for South Central Bell, relative to his determination of additional revenues needed to offset attrition and inflation since the 1975 test year, which findings had been filed with the Commission on remand. The additional revenues were computed by multiplying the company's average rate base for 1976 by the 8.7% rate of return authorized by the Commission to derive the 1976 required net operating income. From this figure, the company's achieved net operating income for 1976 was deducted. This produced an income deficiency after taxes. After an adjustment for taxes, the company's revenue deficiency attributable to attrition and inflation was revealed as $26,320,910. Based on the foregoing computation, the district court ordered the Commission to increase rates to produce an additional $26,320,000 in revenues to offset attrition and inflation so that South Central Bell might realize an overall rate of return of 8.7%.
In the instant case, the Commission elected to use an historical test year (1975) and the average rate base for that year in fixing rates under which South Central Bell would operate for some time in the future. The use of an historical test year assumes that the actual results for the same period of operations will be sufficiently representative of the future to provide a reliable testing vehicle for the proposed rates. New England Telephone & Telegraph Co. v. State, 113 N.H. 92, 302 A.2d 814 (1973); Note, The Use of the Future Test Year in Utility Rate-Making, 52 B.U.L.Rev. 791 (1972). However, we know that a utility's operations in the future will be at a different level from the test year. We can normally expect a utility's service requirements to grow and generally its investment, revenues and expenses can be expected to increase as the service grows. As long as investments, revenues and expenses remain in generally the same relative position as the test year, the future realized rate of return will not fall below that level which rates were fixed to produce. However, in an inflationary period where unprecedented demands for goods and services at increasing costs upset the balance among investments, revenues and expenses, the assumption that future results will approximate those of the past is not realized in fact. The result is attrition, an erosion in earning power of revenue-producing investment caused by operating expenses or plant investment, or both, increasing more rapidly than revenues. If attrition occurs, the rate of return realized in the future will be below that which the rates are designed to produce. This effect is particularly apt to occur during a period in which high cost plant investments replace obsolete assets as this tends to increase the applicable rate base at a more rapid pace than the resulting earnings.
When it is shown that, because of attrition, a utility will not earn the overall rate of return determined by the Commission to be fair, the Commission must evaluate the impact of attrition on earnings of the utility and make an appropriate allowance for it. Only if this is done can an historical test period properly be used as a basis for determining a company's future revenue requirements. Re New York Telephone Co., 12 PUR 4th 1 (N.Y.Pub.Serv.Comm.1975). Accordingly, I conclude that the district court's decision to grant an allowance to South Central Bell to offset the impact of attrition experienced since the 1975 test year was proper.
In view of this conclusion, it is now proper to consider whether the district court erred in fixing the attritional allowance at *996 $26,320,000. In deciding this issue, it should be recognized that any determination must necessarily be based upon the projection of future conditions. Accordingly, such a determination must be subjected to close scrutiny.
At the outset, I find that, since evidence of the effects of attrition actually experienced by South Central Bell since the test year was made available to the court after having also been filed with the Commission and subject to its review, this evidence was properly considered by the district court. The authority of a reviewing court in fixing an attritional allowance extends to new evidence necessary to bring the proof as nearly as reasonably possible down to the final decision. New England Telephone & Telegraph Co. v. Dept. of Public Utilities, 354 N.E.2d 860 (Mass.1976).
After reviewing the method used by the Commission in fixing the allowance for attrition, I do not agree with the Commission's conclusion that a revenue increase of only $6,714,000 was needed to offset attrition. The ten-year period used by the Commission in its analysis failed to properly consider South Central Bell's actual investment, revenues and expenses for 1976 as well as the increased rate of inflation in recent years. The Commission may not rely on predictions when actual experience is available and establishes that the predictions are substantially incorrect. Moreover, the Commission is bound to take into account drastic changes in economic circumstances. New York Telephone Co. v. Public Service Commission, 29 N.Y.2d 164, 324 N.Y.S.2d 53, 272 N.E.2d 554 (1971). For the aforesaid reasons, I find that the attritional allowance fixed by the Commission was insufficient.
On the other hand, although I approve the method used by the district court in determining the attritional allowance since it is based on the company's actual investment, revenues and expenses for 1976, I believe that the district court failed to accord sufficient weight in its computation to certain factors which tend to offset the effects of attrition, such as lower bond prices since the hearings before the Commission, the company's increased productivity, the recent upturn in the economy, and the benefits to the company of deferred income taxes and tax credits. Thus, I consider that the district court's award of $26,320,000 to offset attrition so that South Central Bell could realize 8.7% overall rate of return authorized by the Commission is too high.
However, in view of my belief that South Central Bell is entitled to earn an overall rate of return of 9.20% and taking into consideration the factors which tend to offset attrition, I conclude that the attritional allowance of $26,320,000 is appropriate under the circumstances to assure that the company will realize this increased rate of return during the present inflationary period. For this reason, I would affirm the district court's attritional allowance of $26,320,000.
RESEARCH AND DEVELOPMENT COSTS
The Commission contends that the district court erred in requiring the expensing of research and fundamental development costs paid by South Central Bell to AT&T pursuant to the License Contract Agreement. It argues that, because these funds are expended to benefit future ratepayers, they should be capitalized and recouped in the future through amortization. On the other hand, South Central Bell argues that research and development costs should be expensed in that they represent payment for services rendered for the benefit of current ratepayers, sound accounting principles dictate such treatment, and South Central Bell has consistently expensed such costs in the past which method of accounting has been accepted by the Commission in prior rate proceedings.
On July 1, 1968, South Central Bell and AT&T entered into a License Contract Agreement in which AT&T granted certain rights and agreed to furnish certain services to South Central Bell. Other operating companies of the Bell System have similar contracts with AT&T. Basically, the rights *997 and services furnished by AT&T to the companies under this agreement are (1) the right to use telephones and telephonic devices, methods and systems which are covered by patents owned or controlled by AT&T, (2) the right to receive advice and assistance in the conduct of telephone operations, (3) financial advice and assistance, and (4) the right to share in the results of research and development of the art and science of telephony. In consideration for AT&T's performance of these services, each operating company agreed to pay annually 2½% of the company's gross earnings computed in conformity with the Uniform System of Accounts prescribed by the Federal Communications Commission. On the same date as the contract (July 1, 1968), a letter was addressed to South Central Bell by AT&T in which AT&T agreed to accept until further notice as payment for its services under the contract 1% of the total gross earnings. Thereafter, on June 3, 1974, a similar letter was addressed to South Central Bell by AT&T informing South Central Bell that effective October 1, 1974 and continuing thereafter until further notice AT&T would require an amount equal to South Central Bell's allocated share of the total costs associated with providing services under the contract, but not to exceed the rate of 2½ of gross earnings. There is evidence in the record that, pursuant to this agreement, South Central Bell pays about 5% of the total license service costs with the share of its Louisiana operation comprising about one-fifth of that amount.
The task of research and fundamental development is performed by Bell Telephone Laboratories, which is owned equally by AT&T and Western Electric Company (a wholly-owned subsidiary of AT&T). According to Mr. W. R. Meredith, Jr., general revenue supervisor for South Central Bell, experience has demonstrated that it is more efficient and economical to perform work involving common needs and problems of the Bell companies on a centralized basis conducted by the Bell Labs. Mr. James H. Brenneman, manager of license and regulatory matters of AT&T, testified that research and development is not product-oriented; rather, its primary purpose is to develop innovative techniques resulting in more efficient operations of the Bell System companies. In other words, the efforts of Bell Labs are geared to assisting the operating companies in solving their day-to-day problems. He further indicated that, when the efforts of Bell Labs reach a point that they can be identified with a specific product, the funding of the product by AT&T ceases and thereupon is assumed by Western Electric. Brenneman also testified that, according to accepted accounting principles and a formal opinion by the Financial Accounting Standards Board, costs attributable to research and fundamental development are expensed rather than capitalized.
Although the Commission expressed reservations about any assessment under the License Contract in excess of 1% of revenues, it did not disallow the amount of the license service costs but rather elected to adjust only the costs attributable to research and fundamental development by requiring that they be capitalized and amortized over a future period. This ruling was contrary to expert testimony in the record that accepted accounting principles would treat such costs as an expense item.
After reviewing the Commission's order, the district court found no reasonable basis to support the Commission's decision to capitalize these costs and thus concluded that the Commission had abused its discretion in disallowing the expensing of these costs. The court ordered the Commission to make the necessary adjustments to conform with its ruling.
Based upon the evidence in the record, I believe that the costs of research and fundamental development are properly treated for rate-making purposes as an operating expense. There is no implication that the License Contract Agreement was entered in bad faith. Nor is there any dispute that the services rendered by AT&T under the contract were beneficial to South Central Bell and more than justified the payments made by the company to AT&T. The costs are clearly expended to enable South Central Bell to provide its current ratepayers *998 with efficient and economic telephone service and are expensed and allocated to the operating companies in the year in which they are incurred. Moreover, the expensing of these costs conforms with generally accepted accounting principles as enunciated by the Financial Accounting Standards Board. Furthermore, in two recent utility decisions, research and development costs were found to be a proper and appropriate expense item for rate-making purposes. Re The Chesapeake & Potomac Telephone Co., ___ P.U.R.4th___ (Order No. 62319, Public Service Commission of Maryland, May 5, 1977); Re Ohio Bell Telephone Co., 15 P.U. R.4th 344 (Ohio Pub.Util.Comm.1976). Accordingly, I find that the district court did not err in ordering that the costs attributable to research and fundamental development be treated as an operating expense.
SEPARATIONS
South Central Bell contends that the Commission erred in ordering an allocation or "separation" of investment and expenses of the Federal Telecommunications System (FTS) between interstate and intrastate jurisdictions. The company argues that all of FTS investment and expenses should be included in the intrastate rate base and expenses; whereas, the Commission contends that the adjustment of the company's rate base and expenses to exclude that portion of FTS investment and expenses attributable to interstate operations is based on a proper interpretation of the Separations Manual and is fair to Louisiana ratepayers.
It should be noted at the outset that the procedure employed to allocate investment and expenses between interstate and intrastate operations is set forth in the Separations Manual developed by the NARUCFCC Cooperative Committee on Communications. As stated in the manual, the fundamental basis on which separations are made is the use of telephone plant in each of the operations.
The method prescribed in the manual by which to apportion plant and expenses to interstate operations is the subscriber plant factor. This factor is developed by the use of a two-part formula, the first of which is expressed as a ratio of interstate minutes of use to total minutes of use and is known as the subscriber line use factor. The subscriber line use (interstate ratio or percentage of use) is multiplied by 3.39 to determine the subscriber plant factor. The 3.39 is a factor used to recognize the deterrent effect of usage sensitive pricing of long-distance service.
In the instant case, South Central Bell, relying upon its interpretation of the Separations Manual, included in its intrastate rate base all of the investment of the common control switching arrangement (CCSA), a system of switched private lines, a portion of which is composed of the FTS. The FTS is a dedicated network of switching equipment and connecting lines serving federal offices and installations around the United States. FTS traffic involves both interstate and intrastate uses. The allocation of CCSA investment entirely to South Central Bell's intrastate rate base was accomplished by the company's excluding CCSA interstate minutes of use from the numerator of the subscriber line use factor while including CCSA total minutes of use in the denominator of the ratio. The company maintained that this exclusion of CCSA interstate minutes of use from the subscriber line use factor was necessitated by the lack of data with which to compute its actual interstate minutes of use.
The Commission disagreed with South Central Bell's method of applying the Separations Manual. The company's exclusion of CCSA interstate minutes of use from the formula resulted in an over-allocation of plant and expenses to the company's intrastate operations. In absence of exact data, the Commission estimated the interstate minutes of use.
In computing this estimate, the Commission noted that one of South Central Bell's 176 exchanges was devoted exclusively to handling CCSA traffic for the federal government. It assumed that each exchange produced 100 minutes of use or a total of 17,600 minutes of use. The Commission *999 found from the record that the interstate use (subscriber line use) of these exchanges was 4.51% of the total use. Therefore, 793.76 minutes of use were interstate (.0451 X 17,600). Since one exchange exclusively handled CCSA traffic for the federal government (interstate use), all of the exchange's minutes of use (100) were included in the interstate rate. Thus, the adjusted numerator of the subscriber line use ratio was 893.76 (793.76 + 100); the denominator (total use) was 17,600; the result was 5.08% (subscriber line use or interstate percentage of use). As previously indicated, subscriber line use is multiplied by 3.39 in order to determine the subscriber plant factor. Therefore, the Commission proceeded to multiply 5.08% (subscriber line use) by 3.30 [11] which resulted in 17.2212% (subscriber plant factor). South Central Bell had relied on a subscriber plant factor of 15.2890% which resulted in an over-allocation to intrastate plant and expenses by the use of this factor. The over-allocation was 1.9322% (17.2212% - 15.2890%). Since the average net plant (including both intrastate and interstate) was approximately 1.055 billion dollars, the Commission estimated that 50% of this amount (527.5 million dollars) was allocated to intrastate operations. Applying the aforesaid over-allocation of 1.9322%, the net intrastate plant as reported by South Central Bell was overstated by $10,192,000 (.019322 X $527,500,000). Therefore, the Commission reduced South Central Bell's intrastate rate base by this amount. The record also indicates that the net operating income for the 1975 test year was adjusted in the amount of $1,813,000 to reflect the appropriate separations. The district court approved the actions of the Commission on this issue.
After review of the evidence in the record, the findings of the Commission and the arguments of counsel, I would reject South Central Bell's contention that the Commission erred in ordering an allocation of investment and expenses of the Federal Telecommunications System between interstate and intrastate jurisdictions. The Commission's decision was proper and appropriate under the circumstances. Re The Chesapeake & Potomac Telephone Co., 4 P.U. R.4th 1 (D.C.Pub.Serv.Comm.1974). Moreover, I do not consider that the Commission erred in the manner in which the allocation was accomplished. It represented a perfectly reasonable interpretation of the Separations Manual. Finally, I do not find that the apportionment ordered by the Commission will deprive South Central Bell of a return on that portion of its FTS investment allotted to its interstate operations since it may seek an appropriate adjustment of its interstate rates from either the Federal-State Joint Board or Federal Communications Commission.
Accordingly, I respectfully dissent.
NOTES
[1] While the proposed rate increase was under consideration, South Central Bell filed a petition for injunction and mandamus in the district court. By this action, the company sought to require a decision by the Commission on its application before April 18, 1976, and the establishment of interim rates pending a final determination. The district court rendered judgment in favor of South Central Bell, ordering the Commission to render its decision by April 18, 1976, and, in default thereof, to implement the proposed rate increase under bond.
Acting on an application filed by the Commission, this Court issued an order to stay the execution of the district court judgment and also issued a writ of certiorari to review the correctness of the ruling. After review, this Court ordered the Commission to render a decision within thirty days. However, this Court concluded that the trial judge was without authority to order the interim rate increase. South Central Bell Telephone Company v. Louisiana Public Service Commission, 334 So.2d 189 (La.1976).
[2] The following discussion is not directly applicable to the more complex problem presented by the instant case involving a wholly owned subsidiary affiliated with three national corporations which together with other subsidiaries conduct both intrastate and interstate operations which are regulated by a host of state and federal agencies. See, Jones, supra, at 881-83; see discussion of capital structure, infra.
[3] "If, upon the trial of any suit brought to contest any decision, act, rule, rate, charge, classification, or order, of the commission, the plaintiff introduces evidence which is found to be different from that offered upon the hearing before the commission, or additional thereto, the court, before proceeding to render judgment, unless the parties to such action stipulate in writing to the contrary, shall send a transcript of such evidence to the commission, and stay proceedings in the suit for fifteen days from the date of such transmission. Upon the receipt of the transcript, the commission shall consider the evidence, and it may alter, modify, amend, or rescind its decision, act, rule, rate, charge, classification, or order, complained of in the suit and shall report its action to the court within fifteen days from the receipt of the transcript."
[4] NARUC-FCC Cooperative Committee on Communications, Separations Manual, ¶ 11.22(3)(d) (1971).
[5] This approximation was derived by a method improvised by the Commission because of the lack of any data showing the actual amount of time used by FTS in interstate communications. See discussion, infra, pp. 43-4.
[1] South Central Bell Telephone Co. v. La. Public Service Commission, No. 190,040 (19th Jud. Dist.Ct., Division B, April 8, 1976).
[2] 329 So.2d 683 (La.1976).
[3] 334 So.2d 189 (La.1976).
[4] Order No. U-12785, as reported at 15 P.U.R. 4th 87.
[5] See also La.R.S. 45:1192.
[6] South Central Bell Telephone Co. v. La. Public Service Commission, No. 193,946 (19th Jud. Dist.Ct., July 23, 1976).
[7] 340 So.2d 1300 (La.1976).
[8] Order No. U-12785-A. In computing the amount of the appropriate adjustments for the district court, the Louisiana Public Service Commission reserved its right to appeal the substantive determinations of the district court that any attrition allowance was necessary and that capitalization of research and development costs paid to AT&T was improper.
[9] La.Const. art. 4, § 21(E) (1974).
[10] Accord, New England Telephone & Telegraph Co. v. Department of Public Utilities, 360 Mass. 443, 275 N.E.2d 493 (1971). In that case the utility, unlike South Central Bell, had minority shareholders. However, I do not find that this factual distinction has any significant bearing on the right of a regulated company to have its own cost of debt used in computing its overall rate of return rather than that of its parent corporation.
[11] The Commission was of the opinion that the use of FTS is subject to a deterrent factor (3.39) because of the extra costs of installing additional special lines as use increases.
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114 F.2d 207 (1940)
CHALK, Commissioner of Game and Inland Fisheries, et al.
v.
UNITED STATES.
No. 4627.
Circuit Court of Appeals, Fourth Circuit.
August 30, 1940.
*208 J. Y. Jordan, Jr., of Asheville, N. C., and L. O. Gregory, Asst. Atty. Gen. of North Carolina (Harry McMullan, Atty. Gen. of North Carolina, and J. M. Horner, Jr., of Asheville, N.C., on the brief), for appellants.
Marvin J. Sonosky, of Washington, D. C., Atty., Department of Justice (Norman M. Littell, Asst. Atty. Gen., James O. Carr, U. S. Atty., of Wilmington, N. C., John Hall Manning, Asst. U. S. Atty., of Raleigh, N. C., and Charles R. Denny, of Washington, D. C., Atty., Department of Justice, on the brief), for appellee.
Peyton Randolph Harris, of New York City, for Campfire Club of America, amicus curiae.
M. M. Redden, of Hendersonville, N. C., for North Carolina Hunters' and Fishers' Ass'n, Inc., amicus curiae.
Thomas Read, Atty. Gen. of Michigan, for the State of Michigan, amicus curiae.
Before PARKER, SOPER, and NORTHCOTT, Circuit Judges.
NORTHCOTT, Circuit Judge.
This is a civil suit brought by the appellee, United States of America, here referred to as the plaintiff, in March, 1939, in the District Court of the United States for the Eastern District of North Carolina, at Raleigh, against the appellants, J. D. Chalk, Commissioner of Game and Inland Fisheries, of the State of North Carolina, and E. B. Kugler, J. A. Bradshaw, J. H. Longshore, Seaman S. Whittaker and C. N. Mease, State Officials under the direction and supervision of the said Chalk, here referred to as the defendants. The object of the suit was to permanently enjoin and restrain the defendants, and anyone acting under them in their official capacity, from enforcing or attempting to enforce the state-wide game laws of the State of North Carolina with respect to the game, birds and fish on the lands of the plaintiff known as the Pisgah National Forest and the Pisgah National Game Preserve, located in the Western part of the State of North Carolina.
Motion was made by the defendants to dismiss the suit for want of jurisdiction, which motion was denied and the defendants answered. Thereafter, the plaintiff instituted a second suit against the same parties in the same Court upon substantially identical allegations in the complaint, with the exception that it set up a determination and authorization made by the Secretary of Agriculture in September, 1939, and seeking the same relief prayed for in the original suit.
The defendants filed a motion, in the nature of a plea in bar, to dismiss the second action, on the grounds that a prior suit was pending and in October, 1939, an agreement was reached between the litigants whereby the plaintiff was to dismiss the second suit with the privilege of filing an amended complaint in the suit first brought. Such amended complaint was filed containing an allegation setting up the determination and authorization made by the Secretary of Agriculture, of the United States, with respect to the said Pisgah National Game Preserve, determining that the deer herd in said Game Preserve was damaging and injuring the land and forest and authorizing the diminishing of said herd by hunting and trapping under such conditions as the Chief of the Forest Service might find necessary.
Defendants answered the amended complaint and requested that a jury trial be had on the issue as to whether the lands and forest of the plaintiff were being damaged by the deer thereon as alleged by the plaintiff.
The cause came on for trial on November 6, 1939, and a jury was impaneled to pass upon the one issue of fact raised by the pleadings.
At the close of plaintiff's evidence defendants moved for a directed verdict, which motion was denied. At the close of all the evidence the defendants again moved for a directed verdict. The Court thereupon instructed the jury that "from the evidence in the case, the opinion of the Court with respect to the application of the facts to the law and the law to the facts is such that if the jury should return a verdict *209 contrary to the Court's determination of the value of the evidence, the Court would not feel in conscience bound to follow it", and thereupon the jury was discharged, and the Court found as a fact that "the land, forest and vegetative cover comprising said Game Preserve have been and are being severely damaged by the deer on said Preserve."
A decree was entered granting the relief prayed for by the plaintiff and enjoining the defendants from interfering with the reduction of the deer herd on the lands in question, under the direction of the Secretary of Agriculture of the United States. From this action this appeal was brought.
The State of Michigan, the Camp Fire Club of America and the North Carolina Hunters' and Fishers' Association upon petition were each granted leave to appear in this Court as amicus curiae and filed briefs in support of the defendants' contention.
Two questions are involved in this appeal: First, whether the deer herd was causing serious damage to the Pisgah National Game Preserve and second, whether the United States, without regard to State Laws, may protect the Game Preserve in question against damage caused by the excessive number of deer in a herd on such Preserve.
Pursuant to the Weeks Act of March 1, 1911, c. 186, 36 Stat. 961, and with the consent of the State of North Carolina (N.C.Laws 1901, c. 17), the plaintiff acquired approximately 150,000 acres of land in western North Carolina for the Pisgah National Forest.
In the year 1915 the Legislature of the State of North Carolina passed the following Act with respect to the control of the plaintiff over the game animals, birds and fish on the lands acquired by the United States, in the State:
N.C.Laws 1915, c. 205, N.C.Code Ann. (1939), sec. 2099:
"An Act To give the consent of the State of North Carolina to the making by the Congress of the United States, or under its authority, of all such rules and regulations as in the opinion of the Federal Government may be needful in respect to game animals, game and non-game birds, and fish on lands, and in or on the waters thereon, acquired or to be acquired by the Federal Government in the western part of North Carolina for the conservation of the navigability of navigable rivers.
"Whereas, the Government of the United States, with the consent of the General Assembly of the State of North Carolina, has acquired and will acquire areas of forested land in the western part of said State for the purpose of conserving the navigability of navigable streams, and said lands and waters thereon are and will be stocked, naturally and artificially, with game animals, game and non-game birds, and fish: and
"Whereas, in order adequately to enjoy and protect the occupancy and use of said areas, it is important that the United States be fully authorized to make all needful rules and regulations in respect to such animals, birds, and fish: Therefore,
"The General Assembly of North Carolina do enact:
"Section 1. That the consent of the General Assembly of North Carolina be, and hereby is, given to the making by the Congress of the United States, or under its authority, of all such rules and regulations as the Federal Government shall determine to be needful in respect to game animals, game and non-game birds, and fish on such lands in the western part of North Carolina as shall have been, or may hereafter be, purchased by the United States under the terms of the Act of Congress of March first, one thousand nine hundred and eleven, entitled `An act to enable any State to cooperate with any other State or States, or with the United States, for the protection of the watersheds of navigable streams, and to appoint a commission for the acquisition of lands for the purposes of conserving the navigability of navigable rivers,' (Thirty-sixth United States Statutes at Large, page nine hundred and sixty-one), and acts of Congress supplementary thereto and amendatory thereof, and in or on the waters thereon."
Acceptance of such a grant, as is made by this Act of 1915, may be presumed. Fort Leavenworth Railroad Company v. Lowe, 114 U.S. 525, 5 S.Ct. 995, 29 L.Ed. 264; Silas Mason Co. et al. v. Tax Commission, 302 U.S. 186, 58 S.Ct. 233, 82 L.Ed. 187. However, the amendment of August 11, 1916, c. 313, Sec. 1, 39 Stat. 446, 476, 16 U.S.C.A. § 683, to the Weeks Act, constitutes an acceptance of the cession of jurisdiction made by the Act of the North Carolina *210 Legislature of 1915. That amendment authorized the establishment of Game Preserves and prohibited the taking of wildlife on such Preserves except under rules and regulations made by the Secretary of Agriculture. The debate in the Senate of the United States on the passage of this amendment (53 Cong.Rec. 10327) shows that the amendment was passed in view of and in response to the Act of the North Carolina Legislature and was an acceptance of the cession of jurisdiction. On October 17, 1916, by proclamation of the President of the United States, an area of approximately 96,000 acres of land lying within the boundaries of the Pisgah National Forest was declared to be the Pisgah National Game Preserve.
During the period in which the Pisgah National Forest and the Game Preserve were established, and the Act of the North Carolina Legislature of 1915 was passed, there was no general game law in North Carolina and not until 1933 and 1935 was there any such law. In the meantime the herd of deer on the Game Preserve had increased to such an extent that, in the opinion of the officials of the United States Government, it was damaging the lands of the forest to such an extent that it became necessary to reduce the herd by hunting and by trapping and shipping the deer. After the passage of the general game laws in North Carolina there arose some friction between the State officials and the employees of the United States, in charge of the Game Preserve, with regard to the hunting and trapping of the deer, but for several years matters were arranged by agreement. In 1939 the Legislature of North Carolina passed an Act (Public Laws of 1939, c. 79) expressly prohibiting the trapping, hunting or transportation of any living animal game or non-game, game or non-game birds, and fish by anyone on the lands that had been, or might hereafter be, purchased by the United States in the State of North Carolina except in accordance with the Game Laws of North Carolina passed in 1935.
The officials of North Carolina asserted jurisdiction over the hunting, trapping and transportation of any of the deer on the Pisgah National Game Preserve and there were prosecutions by the State against persons hunting the deer under the authority of the United States officials, and against the officials themselves.
The evidence shows that at one time the deer herd numbered in the neighborhood of seven thousand (7,000) and at the time of the hearing below the best estimate was that the herd numbered five thousand. There was evidence to the effect that the Game Preserve and the Forest could not support, without damage, more than two or three thousand deer.
On the first question as to whether the deer herd was severely injuring the Forest and Game Preserve: a study of the evidence leads us to the conclusion that the judge below was clearly right in his finding of fact, that the land, forest and vegetative cover comprising said Game Preserve was being severely damaged by the deer herd. The evidence on behalf of the plaintiff on this question was much more persuasive than that offered on behalf of the defendants and the reasons given for the conclusions reached by the plaintiff's witnesses were much more convincing than those given by defendants' witnesses.
Findings of a trial court on questions of fact will not be set aside unless clearly erroneous. Federal Rules of Civil Procedure, Rule 52(a), 28 U.S.C.A. following section 723c. Guilford Const. Co. v. Biggs, 4 Cir., 102 F.2d 46.
As to the second question: whether, the fact being established that the deer herd was damaging the Game Preserve, the United States, without regard to State Laws, may protect its property from such damage, we are of the opinion, under the circumstances here presented, that the plaintiff has that right.
Having purchased the lands in question, with the consent of the State of North Carolina, and having been encouraged to go ahead with the project of the National Forest, the right of the plaintiff to protect its lands and property from severe damage, cannot be doubted. On this point we consider the decision of the Supreme Court in Hunt v. United States, 278 U.S. 96, 49 S.Ct. 38, 73 L.Ed. 200, as controlling the issues here. In that case the Court said: "The direction given by the Secretary of Agriculture was within the authority conferred upon him by act of Congress. And the power of the United States to thus protect its lands and property does not admit of doubt, Camfield v. United States, 167 U.S. 518, 525, 526, 17 S.Ct. 864, 42 L.Ed. 260; Utah Power & Light Co. v. *211 United States, 243 U.S. 389, 404, 37 S.Ct. 387, 61 L.Ed. 791; McKelvey v. United States, 260 U.S. 353, 359, 43 S.Ct. 132, 67 L.Ed. 301; United States v. Alford, 274 U.S. 264, 47 S.Ct. 597, 71 L.Ed. 1040, the game laws or any other statute of the state to the contrary notwithstanding."
In addition to the inherent power of the Government to protect its property we have the power expressly ceded to the plaintiff by the State of North Carolina in the Act of 1915, above quoted. In this Act the State ceded exclusive jurisdiction over the control of wild life in the Pisgah Game Preserve to the Federal Government and such a cession of jurisdiction for a limited purpose is exclusive as to that purpose, while not necessarily a cession of the right to legislate for all purposes. In compliance with the provisions of the North Carolina Act of 1915, the United States, through the determination and authorization of the Secretary of Agriculture, made in September, 1939, set up such rules and regulations as the Federal Government deemed needful with respect to the deer herd.
"The United States has large bodies of public lands. These properties are used for forests, parks, ranges, wild life sanctuaries, flood control, and other purposes which are not covered by Clause 17. * * * it may be deemed important or desirable by the national government and the state government in which the particular property is located that exclusive jurisdiction be vested in the United States by cession. * * * the respective sovereignties should be in a position to adjust their jurisdictions. There is no constitutional objection to such an adjustment of rights." Collins et al. v. Yosemite Park & Curry Co., 304 U.S. 518, 58 S.Ct. 1009, 1014, 82 L.Ed. 1502.
The State of North Carolina having granted to the plaintiff exclusive jurisdiction over the wild life in the Game Preserve, the State could not, by the passage of any General Game Law, in any way affect the right of the plaintiff under the cession.
It is contended that the trial court erred in admitting in evidence, over the objection of the defendants, the determination and authorization of the Secretary of Agriculture of September 9, 1939. The Secretary of Agriculture had the authority to make such determination and authorization and it was clearly admissible under the agreement entered into between the parties, before the Court, and was proper to show that those acting for the plaintiff were proceeding under the orders of an official of the United States authorized to issue the orders.
The plaintiff has the unquestioned right to reduce the deer herd, damaging its property, without regard to the State Game Laws of North Carolina, and the action of the judge below in granting the permanent injunction was correct.
Affirmed.
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[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as State
ex rel. Penland v. Dinkelacker, Slip Opinion No. 2020-Ohio-3774.]
NOTICE
This slip opinion is subject to formal revision before it is published in an
advance sheet of the Ohio Official Reports. Readers are requested to
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
South Front Street, Columbus, Ohio 43215, of any typographical or other
formal errors in the opinion, in order that corrections may be made before
the opinion is published.
SLIP OPINION NO. 2020-OHIO-3774
THE STATE EX REL. PENLAND v. DINKELACKER, JUDGE.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as State ex rel. Penland v. Dinkelacker, Slip Opinion No.
2020-Ohio-3774.]
Mandamus—Inmate had adequate remedy at law to raise on direct appeal trial
court’s failure to issue findings of fact and conclusions of law—A judgment
granting or denying postconviction relief is a final, appealable order even
if it does not include findings of fact and conclusions of law—State v.
Mapson and State ex rel. Ferrell v. Clark overruled—Writ denied.
(No. 2020-0027—Submitted March 10, 2020—Decided July 22, 2020.)
IN MANDAMUS.
__________________
DEWINE, J.
{¶ 1} Alex Penland filed two petitions for postconviction relief in the trial
court. The court denied the petitions without making findings of fact and
SUPREME COURT OF OHIO
conclusions of law. Penland appealed the trial court’s judgments, and they were
affirmed on appeal.
{¶ 2} Penland then instituted this original mandamus action, asking this
court to order the trial-court judge to issue findings of fact and conclusions of law.
He contends that under this court’s decision in State ex rel. Ferrell v. Clark, 13
Ohio St.3d 3, 469 N.E.2d 843 (1984), the trial court’s judgments did not constitute
final, appealable orders because they lacked findings and that therefore, the court
of appeals’ decision is void for lack of jurisdiction and he is entitled to another
appeal. See also State v. Mapson, 1 Ohio St.3d 217, 438 N.E.2d 910 (1982)
(followed in Ferrell). As we explain below, our decisions in Mapson and Ferrell
do not support his claim. Because the trial court’s judgments have already been
reviewed on direct appeal, Penland had an adequate remedy at law to address the
lack-of-findings issue, which precludes mandamus relief. We therefore deny the
writ.
{¶ 3} Additionally, we take this opportunity to clarify that a trial court’s
failure to issue findings of fact and conclusions of law with respect to a judgment
denying postconviction relief is an error that may be corrected through an appeal,
not a defect depriving the appellate court of jurisdiction over the appeal. To the
extent that Mapson and Ferrell hold that a petitioner seeking postconviction relief
may not appeal an adverse judgment unless the judgment entry contains findings of
fact and conclusions of law, those decisions are overruled.
Penland had an adequate remedy at law
{¶ 4} Penland is currently serving prison sentences for multiple crimes. He
alleges that he timely filed two petitions for postconviction relief in September
2016 and that Hamilton County Court of Common Pleas Judge Patrick Dinkelacker
summarily overruled them without making findings of fact or conclusions of law,
as required by R.C. 2953.21(H). Penland appealed the trial court’s denials of his
petitions. The First District Court of Appeals did not dismiss his appeals for lack
2
January Term, 2020
of a final order; rather, it proceeded to consider the merits of his appeals and
affirmed the trial court’s judgments.1 State v. Penland, 1st Dist. Hamilton Nos. C-
160820 and C-160797, 2018 Ohio App. LEXIS 880, *2 (Mar. 7, 2018). Penland
took a further appeal to this court, and we declined to accept his case. 153 Ohio
St.3d 1433, 2018-Ohio-2639, 101 N.E.3d 465.
{¶ 5} Penland subsequently filed this original mandamus action, asserting
that the absence of findings means that the trial court’s judgments were not final,
appealable orders and the First District therefore lacked jurisdiction to decide his
appeals. He asks us to issue a writ of mandamus to compel Judge Dinkelacker to
issue a new judgment entry with findings of fact and conclusions of law, so as to
enable him to take yet another appeal.
{¶ 6} On its face, this contention precludes mandamus relief. This court is
barred from issuing a writ of mandamus when the relator has or had an adequate
remedy at law to obtain the requested relief. R.C. 2731.05. Penland had an
adequate remedy to challenge the trial court’s failure to issue findings and
conclusions: he could have raised the error in his direct appeals from the judgments
denying postconviction relief.2 Penland cannot now obtain another appeal simply
because he subsequently became aware of an error in the prior proceedings.
1. The First District determined that although the trial court entered judgments denying Penland’s
petitions for postconviction relief, the petitions themselves were not made a part of the record in the
trial court. As the appellant, it was Penland’s obligation to ensure that a complete record was
presented for review. Rose Chevrolet, Inc. v. Adams, 36 Ohio St.3d 17, 19, 520 N.E.2d 564 (1988);
see also App.R. 9(E) (setting forth procedures for modification or correction of the record).
2. Indeed, Penland did raise that argument on direct appeal—but not until he sought this court’s
review. Because he did not assert that argument in the court of appeals, the First District did not
address the lack-of-findings issue in its decision.
3
SUPREME COURT OF OHIO
Our precedent does not allow Penland to avoid the lack-of-adequate-remedy
requirement
{¶ 7} Penland’s argument that the First District lacked jurisdiction over his
appeals is premised on this court’s decisions in Mapson, 1 Ohio St.3d 217, 438
N.E.2d 910 (1982), and Ferrell, 13 Ohio St.3d 3, 469 N.E.2d 843 (1984). But as
we will explain, those cases do not compel the result Penland seeks.
{¶ 8} In Mapson, this court was asked to determine the point at which the
time to appeal a trial court’s judgment denying postconviction relief began to run
under App.R. 4. The question arose because the trial court had denied the motion
in a judgment entry stating that it had separately filed findings of fact and
conclusions of law, but in fact the trial court did not file the findings and
conclusions until many months later. This court determined that the time for the
petitioner to appeal had not commenced until the complete judgment had been
entered on the docket—which included the court’s separate entry containing its
findings of fact and conclusions of law.
{¶ 9} That result could easily have been justified under the familiar rule that
when a judgment entry contemplates further action by the trial court, the judgment
is not final until the trial court takes those steps. See, e.g., State ex rel. Keith v.
McMonagle, 103 Ohio St.3d 430, 2004-Ohio-5580, 816 N.E.2d 597, ¶ 4; Cincinnati
v. Cincinnati Union Terminal Co., 27 Ohio Law Abs. 264, 31 N.E.2d 888 (1st
Dist.1938). But the Mapson court didn’t rely on this rule. Instead, it based its
decision on policy considerations, opining that it would be inefficient to require a
petitioner to institute an appeal without findings of fact because “it would guarantee
two trips to the appellate court—one to force the findings and another to review the
decision on the merits.” Mapson at 219.
{¶ 10} It’s not clear that the court in Mapson intended to create a new
finality requirement. Mapson does not address R.C. 2953.23(B), the statute
governing finality on decisions awarding or denying postconviction relief, nor does
4
January Term, 2020
it consider R.C. 2505.02, the statute defining final orders generally. There is simply
no mention at all of finality in Mapson.
{¶ 11} A couple of years after Mapson, though, this court decided Ferrell,
13 Ohio St.3d 3, 469 N.E.2d 843—a per curiam opinion consisting of just six
sentences. In Ferrell, the relator filed a complaint for a writ of mandamus in the
court of appeals, seeking an order compelling the trial court to issue findings of fact
and conclusions of law with respect to its denial of his postconviction-relief
petition. The court of appeals denied the writ on the rationale that the relator could
raise the issue in a direct appeal from the trial court’s judgment. This court reversed
on the authority of Mapson, concluding that the relator did not have an adequate
remedy by way of direct appeal because, under Mapson, he would not have been
able to appeal from a nonfinal order.
{¶ 12} Like Mapson, Ferrell did not consider the relevant jurisdictional
statutes. To the contrary, the decision is devoid of legal reasoning. The court issued
a writ of mandamus compelling the trial court to issue findings of fact and
conclusions of law, saying only that “[m]andamus will lie to compel a court to
proceed to final judgment in an action for post-conviction relief.” (Emphasis
added.) Id. at 3, citing State ex rel. Turpin v. Court of Common Pleas, 8 Ohio St.2d
1, 220 N.E.2d 670 (1966). This language suggests that the court issued the writ so
that the relator could take an appeal.
{¶ 13} Thus, Ferrell falls within our longstanding rule that writs of
mandamus and procedendo are appropriate to direct a court to enter a judgment to
enable an appeal to go forward. See State ex rel. Grove v. Nadel, 81 Ohio St.3d
325, 327, 691 N.E.2d 275 (1998) (writ of procedendo was available to order a court
to journalize its judgment because “[a]bsent journalization of the judgment, [the
relator] cannot appeal it”); State ex rel. Dehler v. Sutula, 74 Ohio St.3d 33, 35, 656
N.E.2d 332 (1995) (mandamus and procedendo will lie to compel a court to proceed
to judgment), citing State ex rel. Sherrills v. Cuyahoga Cty. Court of Common
5
SUPREME COURT OF OHIO
Pleas, 72 Ohio St.3d 461, 462, 650 N.E.2d 899 (1995), and Ferrell. Had the First
District dismissed Penland’s appeal for lack of a final order, and had Judge
Dinkelacker subsequently refused to issue a final order, one could cite Ferrell for
the proposition that a writ of mandamus would then be appropriate to compel the
judge to do so.
{¶ 14} But nothing in Ferrell requires that we issue a writ of mandamus
compelling a trial court to put on a new final order when the first one already
allowed the relator to appeal. Here, the First District, in reaching the merits of the
action and affirming the trial court’s judgments, implicitly decided that it had
jurisdiction over Penland’s appeals. Whether that decision was correct or incorrect
is beside the point. Penland received what he was entitled to: the opportunity to
present his challenge in the court of appeals.
{¶ 15} Indeed, the rule advocated by Penland would throw the doors wide
open for seriatim appeals through the use of extraordinary writs. Imagine the
number of inmates who might find a decades-old judgment denying a petition for
postconviction relief that has already been appealed, discover that the trial court
had failed to issue findings of fact and conclusions of law, and seek mandamus
relief and a second appeal on the basis that the first appeal was void for lack of
jurisdiction. If we adopted Penland’s view, they would all be entitled to new
appeals.
{¶ 16} That approach would take us well beyond the holdings of Mapson
and Ferrell, and it would still fail to address the clear adequate-remedy problem.
Because Penland has already had an appeal, he has received an adequate remedy at
law. We are therefore compelled to deny the writ.
It is time to overrule Mapson and Ferrell
{¶ 17} Correctly understood, Mapson and Ferrell do not support Penland’s
claim for relief, and this case may be properly resolved without overruling those
decisions. Nevertheless, our review of those cases has convinced us that they were
6
January Term, 2020
wrongly decided. And not only were they wrongly decided, but they have caused
significant confusion about the appealability of a judgment denying postconviction
relief that does not include findings of fact and conclusions of law. Compare State
v. Gholston, 1st Dist. Hamilton No. C-010789, 2002-Ohio-3674, with State v.
Wilson, 8th Dist. Cuyahoga No. 70008, 1996 WL 492284 (Aug. 29, 1996). We
therefore take this opportunity to clarify that a trial court’s failure to issue findings
of fact and conclusions of law does not affect a petitioner’s ability to appeal a
judgment dismissing or denying postconviction relief but is instead an error that
may be remedied through an appeal.
{¶ 18} The Ohio Constitution provides that the courts of appeals shall have
“such jurisdiction as may be provided by law” to review “judgments or final orders”
of inferior courts. Ohio Constitution, Article IV, Section 3(B)(2). The “provided
by law” part of the grant has long been understood as tying the court’s jurisdictional
authority to the statutory enactments of the General Assembly. See, e.g., State v.
Craig, __ Ohio St.3d __, 2020-Ohio-455, __ N.E.3d __, ¶ 9; Gen. Acc. Ins. Co. v.
Ins. Co. of N. Am., 44 Ohio St.3d 17, 20, 540 N.E.2d 266 (1989).
{¶ 19} Here, the General Assembly has enacted a specific statute
establishing the jurisdiction of the courts of appeals to hear appeals from orders
granting or denying motions for postconviction relief. R.C. 2953.23(B) provides
that “[a]n order awarding or denying relief sought in a petition filed pursuant
to section 2953.21 of the Revised Code is a final judgment.” Each of Judge
Dinkelacker’s 2016 orders denying Penland’s petitions was inarguably “an order
* * * denying relief sought in a petition filed pursuant to section 2953.21.” Thus,
they were final judgments, subject to appeal.
{¶ 20} It is true, of course, that R.C. 2953.21 requires a trial court to issue
findings of fact and conclusions of law when dismissing or denying a
postconviction-relief petition. R.C. 2953.21(H) states, “If the court does not find
grounds for granting relief, it shall make and file findings of fact and conclusions
7
SUPREME COURT OF OHIO
of law and shall enter judgment denying relief on the petition.” See also R.C.
2953.21(D). And if a court fails to do so, its decision is subject to reversal on
appeal. Indeed, that’s exactly how this court had handled the problem before
Mapson. In State v. Lester, 41 Ohio St.2d 51, 322 N.E.2d 656 (1975), the court
reversed the dismissal of a postconviction-relief petition because the trial court had
failed to issue findings of fact and conclusions of law. Indeed, even after Mapson,
the courts of appeals—like the First District in Penland’s prior appeals—have in
some cases continued to assume that they had jurisdiction over appeals from
judgments that lacked findings of fact and conclusions of law. See, e.g., State v.
Petefish, 7th Dist. Mahoning No. 11 MA 70, 2012-Ohio-1502, ¶ 9; Wilson, 8th Dist.
Cuyahoga No. 70008, 1996 WL 492284; State v. Riggins, 91 Ohio App.3d 350, 632
N.E.2d 922 (2d Dist.1993).
{¶ 21} The statutory mandate that a trial court issue findings of fact and
conclusions of law does not transform the trial court’s failure to do so into a
jurisdictional defect. That is simply not the way that we handle trial-court errors.
Indeed, in other contexts, courts routinely treat the failure to make findings as an
error to be corrected on appeal, not one that prevents an appeal. See, e.g., In re
S.W., 12th Dist. Butler Nos. CA2006-09-211 and CA2006-10-263, 2008-Ohio-
1194 (reversing and remanding for juvenile court to issue statutorily required
findings with respect to grant of temporary child custody); Cole v. Cole, 5th Dist.
Stark No. 2004CA00057, 2004-Ohio-5194 (reversing and remanding for trial court
to enter statutorily required findings with respect to child-support award).
{¶ 22} To make fulfillment of the findings requirement a precondition of
appellate jurisdiction would be akin to saying that because a trial court failed to
make mandatory consecutive-sentencing findings, a defendant could not appeal his
or her sentence. Or that because a trial court failed to afford a defendant the right
to speak in mitigation, the defendant could not appeal the sentence. Quite simply,
8
January Term, 2020
the failure to issue findings of fact and conclusions of law is an error that should be
corrected on appeal, not one that prevents an appeal.
{¶ 23} To the extent that Mapson and Ferrell hold that an order dismissing
or denying postconviction relief is not a final judgment unless the order contains
findings of fact and conclusions of law, those decisions are inconsistent with R.C.
2953.23(B). Our Constitution gives the legislature, not the judiciary, the power to
define the jurisdictional boundaries of the courts of appeals. We do not have the
authority to simply make up jurisdictional rules. This court’s failure to account for
the jurisdictional statute is fatal to its holdings in Mapson and Ferrell, and we
therefore conclude that those decisions are no longer viable.
{¶ 24} In Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-
5849, 797 N.E.2d 1256, this court provided a set of useful, though nonexclusive,
considerations in determining whether to overrule precedent. See id. at paragraph
one of the syllabus. We have utilized the test at times in overruling prior decisions,
see, e.g., State ex rel. Klein v. Precision Excavating & Grading Co., 155 Ohio St.3d
78, 2018-Ohio-3890, 119 N.E.3d 386, but we have also overruled prior decisions
without explicitly applying the test, see, e.g., State v. Harper, __ Ohio St.3d __,
2020-Ohio-2913, __ N.E.3d __.
{¶ 25} For those who find the Galatis factors useful in determining whether
to overrule precedent, those factors all counsel in favor of doing so here. First,
Mapson and Ferrell were wrongly decided. See Galatis at paragraph one of the
syllabus. Unless one believes that judges, not the legislature, possess the authority
to set the jurisdiction of the courts, that point is inarguable.
{¶ 26} Second, the decisions defy practical workability. See id. Penland’s
proposed resolution of this case—effectively declaring his prior appeals and the
appellate court’s judgment therein a nullity—demonstrates as much. Indeed, in
another context, we recently overruled precedent that had allowed judgments to be
challenged indefinitely, in large part because the lack of finality occasioned by
9
SUPREME COURT OF OHIO
adherence to our precedent had proved unworkable. See Harper at ¶ 39.
Furthermore, Mapson and Ferrell have the unfortunate impact of forcing
defendants (the vast majority of whom are proceeding pro se) to resort to an
extraordinary writ to address a trial court’s error in failing to issue findings of fact
and conclusions of law, rather than simply allowing the error to be corrected
through the ordinary remedy of appeal. Indeed, Mapson is a good example of the
problems this court creates when it reaches a results-oriented decision without
appropriate consideration of the statutory framework or the implications for other
cases: the case was decided with the aim of allowing the defendant in that case to
appeal, but its practical effect has been to cut off the rights of defendants to appeal
trial-court errors in failing to issue findings and conclusions.
{¶ 27} Finally, there are no appreciable reliance interests that would be
disrupted. See Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, 797 N.E.2d 1256, at
paragraph one of the syllabus. No litigant can reasonably be said to have a reliance
interest in being prevented from seeking relief in the court of appeals when the trial
court has failed to comply with its statutory duties.
{¶ 28} In short, there are good reasons to overrule Mapson and Ferrell, and
we think it appropriate to do so now. We therefore hold that pursuant to R.C.
2953.23(B), a judgment granting or denying postconviction relief is a final,
appealable order. If a trial court errs by failing to issue statutorily required findings
of fact and conclusions of law, the petitioner may obtain relief by raising that issue
in an appeal from the trial court’s judgment.
Conclusion
{¶ 29} Penland received an adequate remedy at law by way of his appeals
from the trial court’s judgments denying postconviction relief, and this court’s
decisions in Mapson and Ferrell do not provide a workaround to the adequate-
remedy bar. We are therefore precluded from issuing a writ of mandamus in this
case. Moreover, because Mapson and Ferrell wrongly suggest that a judgment
10
January Term, 2020
dismissing or denying postconviction relief is not a final, appealable order if it fails
to include findings of fact and conclusions of law, we overrule those decisions and
clarify that the absence of findings and conclusions does not affect the appealability
of the judgment but, rather, is an error that may be corrected on appeal.
{¶ 30} As a final matter, Penland has filed a motion for leave to file a reply
to Judge Dinkelacker’s answer. Our Rules of Practice do not provide for the filing
of a reply to an answer, and such a pleading is allowed under Civ.R. 7(A) only by
leave of court. See S.Ct.Prac.R. 12.01(A)(2)(b) (providing that the Ohio Rules of
Civil Procedure supplement this court’s Rules of Practice). Penland fails to present
any argument justifying leave in this case, so we deny his motion.
Writ denied.
O’CONNOR, C.J., and KENNEDY and FRENCH, JJ., concur.
DONNELLY, J., concurs in judgment only, with an opinion.
STEWART, J., concurs in judgment only, with an opinion.
FISCHER, J., not participating.
_________________
DONNELLY, J., concurring in judgment only.
{¶ 31} The postconviction petitions at issue in this mandamus action were
lost years ago at the Hamilton County Court of Common Pleas. Although relator,
Alex Penland, should not be faulted for the loss, it would be an exercise in futility
to order a trial court to issue findings of fact and conclusions of law regarding lost
petitions about which the trial court likely has no memory. For that reason, the writ
should not issue. But it remains true that the unusual procedural history of
Penland’s case has produced a manifest injustice. It calls for a solution—perhaps
one that is equally unusual—at the trial-court level. It does not call for us to hold
forth from the ivory tower. The underlying problem revealed by this mandamus
action does not provide this court with an appropriate opportunity for any broad
legal holding, let alone the overruling of decades-old precedent.
11
SUPREME COURT OF OHIO
{¶ 32} According to Penland’s complaint, he filed a timely petition for
postconviction relief in two criminal cases on September 23, 2016. The trial court
summarily denied the petitions just three days later. In an accelerated-calendar
judgment entry that is only slightly longer than the trial court’s summary denial,
the court of appeals noted that Penland’s postconviction petition did not appear on
either of the dockets for his criminal cases. State v. Penland, 1st Dist. Hamilton
Nos. C-160820 and C-160797, 2018 Ohio App. LEXIS 880 (Mar. 7, 2018). The
appellate court held, in effect, that the trial court was correct in denying the petitions
because there were no petitions. Penland spent the next three years filing a variety
of motions that appear to solicit proper consideration of the merits of his 2016
postconviction petition, to no avail.
{¶ 33} In a Kafkaesque tangle of mysterious judgment entries, appellate
decisions devoid of substance, and summary rejections of further attempts at
meaningful review, Penland’s due-process rights have suffered. The merits of
Penland’s postconviction petitions were not appropriately addressed before and
cannot be adequately addressed now on the current record, made deficient by the
clerk of courts’ apparent failure to docket the petitions as required by R.C.
2953.21(B). And Penland cannot receive the level of consideration he was due
under R.C. 2953.21 by refiling his postconviction petition, because a new petition
would be untimely under the statute. See R.C. 2953.21(A)(2).
{¶ 34} The fact that Penland’s postconviction petitions failed by getting
crushed in the cogs of bureaucratic machinery instead of by rejection on their merits
should be just as concerning to the state and the trial court as it is to Penland. I
believe that the state and the trial court should come up with an equitable solution
to this due-process problem, whether by creative application of the exceptions
provided for untimely postconviction petitions under R.C. 2953.23(A) or by some
other one-off undertaking. When confronting extraordinary circumstances, we
12
January Term, 2020
government actors should refrain from acting like bulldogs or nitpickers and simply
be good shepherds of justice.
_________________
STEWART, J., concurring in judgment only.
{¶ 35} Relator, Alex Penland, is seeking to compel respondent, Hamilton
County Court of Common Pleas Judge Patrick Dinkelacker, to issue findings of fact
and conclusions of law in support of his orders purporting to deny nonexistent
petitions for postconviction relief. On direct appeal, in affirming the denial of
postconviction relief, the First District Court of Appeals stated: “[T]he record does
not reflect the filing * * * of a motion seeking postconviction relief. Therefore,
the record cannot be said to manifest the errors of which Penland now complains.”
State v. Penland, 1st Dist. Hamilton Nos. C-160820 and C-160797, 2018 Ohio App.
LEXIS 880, *2 (Mar. 7, 2018).
{¶ 36} It is true that Judge Dinkelacker issued orders purporting to deny
relief on two petitions for postconviction relief. But given that the First District
established that the record did not show that any petition for postconviction relief
had been filed, we cannot accept Penland’s allegation to the contrary, particularly
because he offers no proof to support it. Because there is no indication in the record
that the petitions Judge Dinkelacker purported to deny were ever filed, Penland can
demonstrate neither a clear legal right to the relief he seeks nor a clear legal duty
on the part of the judge to provide it. See State ex rel. Waters v. Spaeth, 131 Ohio
St.3d 55, 2012-Ohio-69, 960 N.E.2d 452, ¶ 6 (setting forth requirements for
issuance of writ of mandamus). I would therefore deny the requested writ of
mandamus on that basis.
_________________
Alex Penland, pro se.
Joseph T. Deters, Hamilton County Prosecuting Attorney, and Scott M.
Heenan, Assistant Prosecuting Attorney, for respondent.
13
SUPREME COURT OF OHIO
_________________
14
| {
"pile_set_name": "FreeLaw"
} |
United States Court of Appeals
For the Eighth Circuit
___________________________
No. 18-2423
___________________________
Victor Bernard Williams, M.D.
lllllllllllllllllllllPlaintiff - Appellant
v.
Baptist Health, doing business as Baptist Health Medical Center; Douglas Weeks,
Individually and in his Official Capacity as Sr. Vice-President and Administrator;
Everett Tucker, M.D., Individually and in his Official Capacity as a Member of the
Credentials Committee; Tim Burson, M.D., Individually, and in his Official
Capacity as Chief of Surgery and Chairperson of the Surgery Control Committee;
Scott Marotti, M.D., Individually, and in his Official Capacity as a Member of the
Surgery Control Committee; Susan Keathley, M.D., Individually, and as
Chairperson of the Credentials Committee; Chris Cate, M.D., Individually, and as
Chairman of the Executive Committee and Chief of Staff; Surgical Clinic of Central
Arkansas; John E. Hearnsberger, II, M.D., Individually; Joseph M. Beck, M.D.,
Individually; Charles Mabry, M.D., Individually; James Counce, M.D., Individually
lllllllllllllllllllllDefendants - Appellees
____________
Appeal from United States District Court
for the Eastern District of Arkansas - Little Rock
____________
Submitted: May 23, 2019
Filed: May 29, 2019
[Unpublished]
____________
Before BENTON, STRAS, and KOBES, Circuit Judges.
____________
PER CURIAM.
Victor Williams, M.D., filed this action against a medical center, six of its
employees, a surgical clinic, two members of the Arkansas State Medical Board, and
two of the Medical Board’s consulting physicians alleging a conspiracy to revoke his
medical license in violation of state law and 42 U.S.C. §§ 1981, 1982, and 1983.
Willams appeals the district court’s1 dismissal of his claims against numerous
defendants, and grant of summary judgment against the remaining defendants. After
careful de novo review, see Marsh v. Phelps Cty., 902 F.3d 745, 751 (8th Cir. 2018)
(de novo review of grant of summary judgment); Smith v. Johnson, 779 F.3d 867, 870
(8th Cir. 2015) (de novo review of dismissal based on res judicata), we affirm.
We agree with the district court that Williams’s claims against several
defendants were barred by res judicata. See Finstand v. Beresford Bancorporation,
Inc., 831 F.3d 1009, 1014 (8th Cir. 2016) (federal suit was barred because, under state
law, prior judgment precluded claims that could have been raised in prior actions);
Baptist Health v. Murphy, 373 S.W.3d 269, 278 (Ark. 2010) (when case is based on
same events as first lawsuit, res judicata applies even if second lawsuit raises new legal
issues and seeks additional remedies). We conclude that the district court properly
granted summary judgment for the remaining defendants, as those claims were barred
by absolute quasi-judicial or statutory immunity. See Ark. Code Ann. § 17-80-
103(West 2018) (amended 2019) (no individual acting on behalf of medical board shall
be liable for action taken or recommendation made within scope of board’s functions);
Briscoe v. LaHue, 460 U.S. 325, 345 (1983) (extending absolute judicial immunity to
witnesses); Buser v. Raymond, 476 F.3d 565, 570-71 (8th Cir. 2007) (state medical
board member had absolute quasi-judicial immunity for performing judicial functions).
We find no error in the district court’s summary denial of Williams’s Federal Rule of
1
The Honorable James M. Moody, Jr., United States District Judge for the
Eastern District of Arkansas.
-2-
Civil Procedure 59(e) and 60(b) motion. See Auto Servs. Co., Inc. v. KPMG, LLP,
537 F.3d 853, 857 (8th Cir. 2008) (abuse of discretion review).
Accordingly, we affirm the judgment of the district court. See 8th Cir. R. 47B.
______________________________
-3-
| {
"pile_set_name": "FreeLaw"
} |
COURT OF APPEALS
SECOND
DISTRICT OF TEXAS
FORT
WORTH
NO.
2-09-159-CV
IN THE INTEREST OF N.Q. AND F.Q., CHILDREN
------------
FROM
THE 322ND DISTRICT COURT OF TARRANT COUNTY
------------
MEMORANDUM OPINION[1]
------------
I.
INTRODUCTION
Appellant
Rola Jabri appeals the trial court=s
order relating to possession of and access to her two children, N.Q. and
F.Q. Because we hold that the trial
court did not abuse its discretion in making its custody decisions, we affirm.
II.
BACKGROUND
Jabri
and the children=s father, Jamal Qaddura,
were married on September 3, 1993. Six
years later, Jabri filed for divorce.
The parties subsequently signed an arbitration agreement in which they
agreed to submit their dispute to arbitration by the Texas Islamic Court. Jabri filed a motion to compel arbitration,
which the trial court denied. We
previously considered her appeal of this denial, reversed the trial court=s
order, and rendered judgment that the arbitration agreement was valid and
enforceable. Jabri v. Qaddura,
108 S.W.3d 404, 413B14 (Tex. App.CFort
Worth 2003, no pet.).
Qaddura
then filed a motion to set aside the arbitration agreement on February 10,
2004, which the trial court granted.
Jabri sought mandamus relief from this court, which we denied because
she had an adequate remedy by appeal. In
re Qaddura, No. 02-04-00069-CV, 2004 WL 541052, at *1 (Tex. App.CFort
Worth Mar. 12, 2004, orig. proceeding) (mem. op.).[2] Jabri did not appeal the trial court=s
order setting aside the arbitration agreement, and the trial court signed a
final decree of divorce on June 22, 2004.
In
the divorce decree, Jabri was ordered to pay Qaddura $590 per month in child
support. She missed several payments,
however, and at a January 20, 2006 enforcement hearing, the associate judge
confirmed an arrearage of $5,000 and ordered Jabri to pay a total of $3,000 in
attorney=s
fees to Qaddura=s attorneys and to the
office of the attorney general.
Approximately
a year and a half later, on August 28, 2007, the trial court ordered Jabri=s
access to her children suspended until she posted a $2,500 cash bond with the
district clerk. Jabri posted the bond in
either late May or early June 2008. She
then filed a petition to modify the custody provisions of the divorce decree on
June 30, 2008, requesting the court to name her the sole managing conservator
of the children and to appoint her the temporary conservator with the right to
designate the primary residence of the children. In an order dated April 28,
2009, the trial court denied Jabri=s
motion to modify, found that the motion had been made in bad faith, entered
judgment against Jabri for $4,600 in attorney=s
fees, and again ordered Jabri to pay the $3,000 in attorney=s
fees that had been previously assessed against her in the January 2006 contempt
proceeding but remained unpaid. In the
same order, the trial court also found that Jabri=s
$2,500 bond was forfeited and ordered Jabri=s
access to her children suspended until the posting of a $5,000 cash bond. Jabri now appeals.
III.
LAW AND APPLICATION TO FACTS
A. The
Arbitration Agreement
Jabri
complains in her first of four issues that the trial court abused its
discretion by revoking the arbitration agreement. We previously held in Jabri v. Qaddura
that the arbitration agreement was valid and enforceable and that it covered
all disputes between the parties that arose prior to the date the parties
signed it. 108 S.W.3d at 413. Despite this holding, the trial court
subsequently granted Qaddura=s
motion to set aside the arbitration agreement on February 25, 2004, declaring
that the agreement was Avoid and of no force or
effect@ and
setting the case for trial. Jabri
challenged this ruling by filing a petition for writ of mandamus in the
appellate court, which we denied. Jabri
did not file a motion for rehearing.
In
our opinion denying mandamus relief, we specifically stated that Jabri had an
adequate remedy by interlocutory appeal.
In re Qaddura, 2004 WL 541052, at *1; see Tex. Civ. Prac.
& Rem. Code Ann. ' 171.098(a)(2) (Vernon
2005) (authorizing interlocutory appeal of an order granting an application to
stay arbitration).[3] Despite this specific statement in our
opinion of the availability of an interlocutory appeal to address Jabri=s
complaint, Jabri did not file a notice of appeal. Instead, the case proceeded to trial, and the
trial court signed its final decree of divorce on June 22, 2004. The divorce decree named Jabri possessory
conservator of the children and established her child support obligation at
$590 per month. Jabri did not file a
notice of appeal from this final divorce decree. Nearly five years passed from trial and final
judgment until Jabri filed a notice of appeal that raised her complaint about the
trial court=s
refusal to arbitrate.
Generally,
a complaint must be raised in the trial court to preserve the issue for
appeal. See Tex. R. App. P.
33.1(a). Further, the complaint must be
sufficiently specific to make the trial court aware of the complaint, unless
the specific grounds were apparent from the context. Tex. R. App. P. 33.1(a)(1)(A). The record before us does not reveal that
Jabri continued to urge her objection in the trial court to the order staying
arbitration after she declined to challenge the order by interlocutory appeal
and proceeded to trial on the merits. It
does, however, reveal Jabri=s
activities in the trial court after the final divorce decree was signed: she filed two petitions to modify the custody
arrangement; she signed a rule 11 agreement agreeing to abide by
recommendations in an associate judge=s
report; and she participated in hearings, including questioning witnesses and
arguing before the trial court.
Notably,
Jabri argued extensively in the trial court for a modification to the custody
provisions in the divorce decree, but it was only after she was unsuccessful on
her motionsCnearly
five years after the final divorce decree was signedCthat
she appealed the trial court=s
refusal to send the case to arbitration.
She cannot affirmatively request the trial court to take action on her
motions to modify the divorce decree and now complain on appeal that the trial
court erred by complying with her request.
See Tittizer v. Union Gas Corp., 171 S.W.3d 857, 862 (Tex.
2005) (stating general rule that a party cannot complain on appeal that the
trial court took a specific action that the complaining party requested). Given Jabri=s
failure to appeal the trial court=s
granting the motion to set aside the arbitration agreementCnot
just once, after the court=s
ruling on the motion, but twice, after the entry of the final divorce decreeCand
given her postjudgment activities in the trial court that are inconsistent with
her complaint on appeal, we cannot conclude that her stated intention to
enforce the arbitration agreement remained fairly before the trial court or was
apparent from the context. See Tex.
R. App. P. 33.1(a). Therefore, we hold
that Jabri has failed to preserve her challenge to the trial court=s revoking
the arbitration agreement. See id. We overrule Jabri=s
first issue.
Jabri
argues in her fourth issue that the trial court judge had a Apersonal
vendetta@
because of the religious nature of the arbitration agreement, which submitted
the parties=
claims to arbitration by the Texas Islamic Court. She also claims that the judge prevented her
from exercising her religion. She points
to no evidence in the record, however, that the trial court judge=s
decision to set aside the arbitration agreement was in any way motivated by an
improper bias against her religion.
An
appellate court is not required to search the appellate record, with no
guidance from the briefing party, to determine if the record supports the party=s
argument. Hall v. Stephenson, 919
S.W.2d 454, 466B67 (Tex. App.CFort
Worth 1996, writ denied). Also, Awe
know of no authority obligating us to become advocates for a particular
litigant through performing their research and developing their argument for
them.@ Tello v. Bank One, N.A., 218 S.W.3d
109, 116 (Tex. App.CHouston [14th Dist.] 2007,
no pet.) (internal quotation omitted).
Thus, an inadequately briefed issue may be waived on appeal.[4] Hall, 919 S.W.2d at 467; see also Tex.
R. App. P. 38.1(i); Fredonia State Bank v. Gen. Am. Life Ins. Co., 881
S.W.2d 279, 284B85 (Tex. 1994) (discussing Along-standing
rule@
that point may be waived due to inadequate briefing). Because Jabri has not
supported her contentions that the trial court judge was motivated by a Apersonal
vendetta@ or
a bias against her religion with any evidence from the record, we overrule her
fourth issue.
B. Jabri=s
First Amendment Rights and Right to a Fair Trial
In
her second issue, Jabri complains that the trial court abused its discretion by
denying her constitutional rights under the First Amendment and her right to a
fair trial. At the January 20, 2006
enforcement hearing, Jabri was charged with contempt for multiple instances of
failure to pay child support, and she pleaded guilty to the charges. The associate judge sentenced her to 180 days=
confinement per violation but placed her on community supervision and suspended
commitment. One of Jabri=s
conditions of community supervision was to refrain from communicating with the
DallasBFort
Worth area mosque except through counsel.
Jabri argues that this condition violated her First Amendment right to
exercise her religion. She further
argues that the trial court was biased against her due to a Apolitical
connection@
with Qaddura and that the trial court=s
bias and Apattern
of abuse and partiality@ deprived her of a fair
trial.
First,
Jabri=s
claimed deprivation of her First Amendment rights allegedly occurred during the
contempt proceedings, which cannot be challenged on appeal. A contempt order is not a final, appealable
judgment, and an appellate court has no jurisdiction over such an order. See Norman v. Norman, 692 S.W.2d 655,
655 (Tex. 1985). A contempt judgment may
be attacked by a petition for writ of habeas corpus (if the contemnor is
confined) or a petition for writ of mandamus (if no confinement is involved). See Cadle Co. v. Lobingier, 50 S.W.3d
662, 671 (Tex. App.CFort Worth 2001, pet.
denied) (en banc). However, because a contempt order is not a final judgment,
there is no remedy by appeal. In re
Office of the Att=y Gen. of Tex.,
215 S.W.3d 913, 916 (Tex. App.CFort
Worth 2007, orig. proceeding) (citing Lehmann v. Har‑Con Corp., 39 S.W.3d
191, 195 (Tex. 2001)). Therefore, we
have no jurisdiction to address this portion of Jabri=s
second issue.[5]
Next,
as for Jabri=s
complaint of bias in the overall proceedings, she again points to no evidence
in the record of any political connection between the trial court and Qaddura
or any other evidence that the trial court was not impartial, other than the
fact that the trial court ruled against her.
Further, she did not raise the issue of bias in the trial court. The impartiality of a judge may be challenged
in the trial court by a motion to recuse.
See Tex. R. Civ. P. 18a, 18b.
Even assuming that a basis for recusal may have existed, it cannot be
raised for the first time on appeal. See
McElwee v. McElwee, 911 S.W.2d 182, 186 (Tex. App.CHouston
[1st Dist.] 1995, writ denied). Jabri
did not file a motion to recuse or otherwise raise her claim of bias to the
trial court. Because this portion of her
issue raises a complaint that she did not present to the trial court, she has
failed to preserve error. See Tex.
R. App. P. 33.1(a). We overrule the
remainder of Jabri=s second issue.
C. Child
Custody and Support
1. Petition
to Modify
In
her third issue, Jabri asserts that the trial court endangered the well-being
of the children and undermined the parentBchild
relationship. Specifically, she
complains of the trial court=s
denial of her petition to modify the custody provisions of the divorce
decree. In her petition, she requested
that the court name her the sole managing conservator of the children and
appoint her the temporary conservator with the right to designate the primary
residence of the children. The trial
court=s
most recent order relating to possession of and access to the children before
Jabri filed her motion to modify was the trial court=s
August 28, 2007 order that suspended Jabri=s
access to her children until she posted a $2,500 cash bond. Jabri filed her petition to modify on June
30, 2008.
If a
suit seeking to modify the designation of the person having the exclusive right
to designate the primary residence of a child is filed not later than one year
after the rendition of an order relating to possession and access, the person
filing the suit must provide a supporting affidavit. Tex. Fam. Code Ann. ' 156.102(a)
(Vernon Supp. 2009).[6] Jabri does not dispute that she did not
execute the required affidavit.
Accordingly, the trial court did not err by denying her petition to
modify. See id. ' 156.102(c).
2. Writ
of Attachment
Jabri
also complains in her third issue that the trial court erred by granting a writ
of attachment for N.Q. and by failing to bring N.Q. before the court for an
interview. Qaddura filed a motion for
enforcement on August 1, 2008, alleging that Jabri had violated the possession
order by failing to return N.Q. at the end of her summer visitation. The trial court judge ordered the issuance of
a writ of attachment the same day and set a hearing for August 15, 2008, to
determine the right to possession of the children. Thus, this writ of
attachment awarding possession of the child to Qaddura pending the August 15
custody hearing was a temporary order and, as such, is not appealable. See id. '
105.001(e); In re J.W.L., 291 S.W.3d 79, 83 (Tex. App.CFort
Worth 2009, orig. proceeding) (ATemporary
orders entered in family law cases are not appealable.@); see
also Tex. Civ. Prac. & Rem. Code Ann. '
51.014(a)(7) (Vernon 2008) (listing types of appealable interlocutory orders).
The
associate judge heard Qaddura=s
motion for enforcement on August 22, 2008, but it was truncated by the parties=
agreement to continue the case to January 2009.
The associate judge signed a report on enforcement that gave Jabri
supervised visitation, forfeited her $2,500 bond, and sent the children to
counseling. Under the associate judge=s
signature is written, AAgreed after partial hearing
w/o waiving future testimony.@ Attached to the report is a handwritten
document, signed by Jabri, Qaddura, and their respective attorneys, that
states, AThe
parties agree to this AJ=s report as a rule 11
between the parties. The case shall be
reset in Jan. 2009. No contempt
determination at this time.@ The parties appeared before the associate
judge on January 23, 2009, but the case was reset to March 31 due to the
withdrawal of Jabri=s attorney.
Jabri
argues that these actions in the August 22, 2008 and January 23, 2009
proceedings were abuses of the trial court=s
discretion. She agreed to the
recommendations in the associate judge=s
August 22, 2008 report, however, so she cannot complain of these on
appeal. See Tex. R. App. P.
33.1(a); see also Gomez de Hernandez v. Bridgestone/Firestone N. Am. Tire,
L.L.C., 204 S.W.3d 473, 481 (Tex. App.CCorpus
Christi 2006, pet. denied) (holding that, even if the trial court erred by
setting a hearing date too close to trial, appellant could not complain when
the parties had enforceable rule 11 agreements resetting the hearing and trial
dates and appellant did not object in the trial court to the hearing date that
was set in accordance with the rule 11 agreements); Blackburn v. Dobbs,
258 S.W.2d 432, 433 (Tex. Civ. App.CAmarillo
1953, writ dism=d) (providing that a rule 11
agreement is binding on appellant, Awho must
not now be heard to complain about the matter@); Ingram
v. Ingram, 249 S.W.2d 86, 89 (Tex. Civ. App.CGalveston
1952, no writ) (concluding that a litigant on appeal may not seek a reversal
for error that he himself has committed or invited). Furthermore, we do not agree that the judge
acted arbitrarily or unreasonably when he reset the hearing due to the
withdrawal of Jabri=s attorney; thus, we hold
that the judge=s
order was not an abuse of discretion. See
Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire v. Cummings, 134
S.W.3d 835, 838B39 (Tex. 2004).
3. Security
Bond
A
court may order a person who has a possessory interest in a child to execute a
bond or deposit security if the court finds that the person may violate the
court order relating to the interest.
Tex. Fam. Code Ann. '
153.011 (Vernon 2008). Jabri claims in
her third issue that the trial court abused its discretion by requiring her to
post a $5,000 cash bond. However, an
abuse of discretion does not occur as long as some evidence of substantive and
probative character exists to support the trial court=s
decision. Butnaru v. Ford Motor Co.,
84 S.W.3d 198, 211 (Tex. 2002). When the
trial court serves as factfinder, it weighs the evidence and judges a witness=s
credibility, and it may accept or reject any witness=s
testimony in whole or in part. See
In re Rhodes, 293 S.W.3d 342, 344 (Tex. App.CFort
Worth 2009, orig. proceeding); see also In re R.D.S., 902 S.W.2d 714,
716 (Tex. App.CAmarillo
1995, no writ) (AThe
appellate court must recall that the trier of fact has the authority to weigh
the evidence, draw reasonable inferences therefrom, and choose between
conflicting inferences.@).
The
trial court heard evidence at the March 31, 2009 hearing that Jabri had not
returned one of the children at the close of her summer visitation in 2008,
which necessitated the writ of attachment.
Qaddura testified that Jabri had told the children=s
counselor and their school that the rule 11 agreement, which included
supervised visitation procedures for Jabri, was Anot
enforceable@ and
that she had Aevery
right to go back on it.@ Additionally, Qaddura testified that Jabri
had asserted that an order signed in 2004 was the only custody order in place,
and she had attempted to follow the visitation schedule under that prior order. Jabri did not present any controverting
testimony at the hearing. Accordingly,
we hold that the trial court did not abuse its discretion by requiring Jabri to
post a bond before exercising her visitation rights. See Low, 221 S.W.3d at 614; Cire,
134 S.W.3d at 838B39. We overrule Jabri=s
third issue.
IV.
CONCLUSION
Having
dismissed or overruled all of Jabri=s
issues on appeal, we affirm the trial court=s
order.
BOB MCCOY
JUSTICE
PANEL:
GARDNER, WALKER, and MCCOY, JJ.
WALKER,
J. concurs without opinion.
DELIVERED:
July 15, 2010
[1]See Tex. R. App. P.
47.4.
[2]On our own motion, we
take judicial notice of our record in In re Qaddura. See Tex. R. Evid. 201; In re Y.M.A.,
111 S.W.3d 790, 792 (Tex. App.CFort Worth 2003, no
pet.) (holding that an appellate court may take judicial notice of its own
records in an earlier mandamus proceeding).
We have obtained the history of this 2004 original proceeding from the
clerk=s record and file in
that case.
[3]A trial court may
stay an arbitration commenced or threatened on application and a showing that
there is not an agreement to arbitrate.
Tex. Civ. Prac. & Rem. Code Ann. ' 171.023(a).
Qaddura=s motion to set aside
the arbitration agreement requested the trial court to set aside or void the
agreement and set the case for trial because Jabri had waived the agreement and
because the agreement had become unworkable in light of events occurring after
our decision in Jabri v. Qaddura.
The trial court granted this motion, declaring the arbitration agreement
Avoid and of no force
or effect@ and setting the case
for trial. Accordingly, by declaring the
arbitration agreement void, the trial court effectively held that the parties
no longer had an agreement to arbitrate and therefore stayed arbitration under
section 171.023(a). See id.
[4]We notified Jabri by
letter on September 29, 2009, that her brief did not comply with several rules
of appellate procedure, including rule 38.1(i), and requested that she file an
amended brief in compliance with the rules.
In the letter, we notified her that failure to do so could result in
waiver of noncomplying points on appeal.
Jabri filed an amended brief on October 12, 2009, but it again did not
comply with rule 38.1(i). Therefore, we
issued a written order on October 26, 2009, directing Jabri to file a second
amended brief that complied with rule 38.1(i) within ten days. In the order, we again informed her that
failure to file a brief that complied with the appellate rules could result in
the waiver of noncomplying points. Jabri
then filed her second amended brief, and it is this brief upon which the case
was submitted.
[5]For the same reason,
we do not address Jabri=s complaint on appeal
regarding the $3,000 in attorney=s fees that she was ordered to pay in these
contempt proceedings (and reordered to pay in the trial court=s April 28, 2009
order).
[6]The affidavit must
contain, along with supporting facts, at least one of the following
allegations:
(1)
that the child=s present environment
may endanger the child=s physical health or
significantly impair the child=s emotional
development;
(2)
that the person who has the exclusive right to designate the primary residence
of the child is the person seeking or consenting to the modification and the
modification is in the best interest of the child; or
(3)
that the person who has the exclusive right to designate the primary residence
of the child has voluntarily relinquished the primary care and possession of
the child for at least six months and the modification is in the best interest
of the child.
Id. ' 156.102(b).
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-2008
CADENCE BANK NA,
Plaintiff - Appellee,
v.
HORRY PROPERTIES, LLC, a South Carolina Limited Liability
Company; M&M BUILDERS, LLC OF OD, a South Carolina Limited
Liability Company; ARTHUR F. MCLEAN, JR.,
Defendants – Appellants,
and
BEACH FIRST NATIONAL BANK; HORRY COUNTY STATE BANK,
Defendants.
Appeal from the United States District Court for the District of
South Carolina, at Florence. R. Bryan Harwell, District Judge.
(4:10-cv-02717-RBH)
Submitted: April 25, 2013 Decided: April 30, 2013
Before WILKINSON, KING, and DUNCAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Louis D. Nettles, FOLKENS LAW FIRM P.A., Florence, South
Carolina, for Appellants. J. Thomas McBratney, III, MCBRATNEY
LAW FIRM, PA, Florence, South Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
Horry Properties, LLC, M&M Builders, LLC of OD, and
Arthur F. McLean, Jr., appeal the district court’s orders
setting aside transfers of certain real property and associated
leases as fraudulent conveyances and denying their motion to
alter or amend the judgment. We have reviewed the district
court’s thorough opinions, as well as the parties’ briefs and
the record included on appeal, and find no reversible error.
Accordingly, we affirm for the reasons stated by the district
court. Cadence Bank NA v. Horry Prop., LLC, 4:10-cv-02717-RBH
(D.S.C. April 3, 2012; July 17, 2012). We dispense with oral
argument because the facts and legal contentions are adequately
presented in the materials before this court and argument would
not aid the decisional process.
AFFIRMED
3
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683 So.2d 552 (1996)
OWENS-CORNING FIBERGLAS CORPORATION, Appellant,
v.
Naomi CRANE, as Personal Representative of the Estate of Survivors of Carlton D. Crane, Deceased, Appellee.
Nos. 95-951, 95-1263.
District Court of Appeal of Florida, Third District.
October 16, 1996.
Rehearing Denied December 18, 1996.
*553 Blaire & Cole, Coral Gables; Berger & Chafetz and Steven R. Berger, Miami, for appellant.
Robles & Gonzalez, P.A., Miami; A.J. Barranco & Associates, P.A. and Sam Daniels and Michael Pfundstein and Robert Kohlman, Miami, for appellee.
Robert A. Butterworth, Attorney General and Louis F. Hubener, Assistant Attorney General, for Amicus Curiae, State of Florida.
Before BARKDULL, LEVY and GREEN, JJ.
PER CURIAM.
Owens-Corning Fiberglas Corporation ("OCF") appeals from a final judgment awarding Naomi Crane as personal representative of the estate of Carlton Crane both compensatory and punitive damages in a wrongful death action after a jury trial.
Naomi Crane filed suit below in September 1992 against OCF and other defendants for the asbestos-related death of her husband, Carlton. Prior to his death in 1991, Carlton Crane had been employed as a pipefitter and had been exposed to asbestos-laden products manufactured by OCF from 1956 through 1966. This case proceeded to trial solely against OCF after all of the remaining defendants settled prior to trial for a total of $157,100. After a two week trial, the jury found in favor of Crane on the issues of negligence and strict liability and attributed 60% of the fault to OCF and 40% to "others". As compensatory damages, the jury awarded the Plaintiff $98,000 for past and future economic damages and $344,000 for past and future noneconomic damages. The jury further found OCF liable for punitive damages.
Approximately two weeks later, the same jury was reconvened to consider the amount of punitive damages to be awarded. Although OCF requested two days for the trial, the court limited this trial to one day. The jury awarded the plaintiff $666,000 in punitive damages.
Thereafter, final judgment was entered in the plaintiff's favor in the amount of $950,900 which represented the difference between the total amount awarded by the jury ($1,108,000) and the amount paid by the settling defendants ($157,100).[1] The court declined to reduce the plaintiff's noneconomic damages further by the 40% of fault the jury attributed to "others" because it found that OCF's conduct "rose to the level of intentional, willful, or wanton." This appeal followed the judgment.
We first address OCF's argument that this action is barred by the twelve year *554 products liability statute of repose formerly found at subsection 95.031(2), Florida Statutes. See, e.g., § 95.031(2), Fla. Stat. (1985) (repealed in pertinent part by ch. 86-272, § 2 at 2020, Laws of Fla.). In support of this argument, OCF points to the fact that Mr. Crane's last possible exposure to its asbestos product occurred in either 1966 or 1967 and this suit was not brought until 1992, more than twenty-five years later. We recently considered this precise issue in Owens-Corning Fiberglass Corp. v. Corcoran, 679 So.2d 291 (Fla. 3d DCA 1996). Citing to Diamond v. E.R. Squibb & Sons, Inc., 397 So.2d 671 (Fla.1981), we found that an application of the statute of repose under the facts of this case would result in an unlawful denial of the plaintiff's access to the courts, therefore, we concluded that the statute was not a bar to recovery. Corcoran, 679 So.2d at 293. Accordingly, the trial court did not err in denying OCF's motion to dismiss the complaint or motion for directed verdict.
Next, OCF asserts that it is entitled to a new trial because of certain inflammatory, improper and prejudicial comments made by plaintiff's counsel during closing arguments. OCF asserts that its counsel's credibility was impugned before the jury during its closing argument when Crane's counsel repeatedly accused OCF's counsel of fabricating and misrepresenting the evidence in a speaking objection.[2] Further, when Crane's counsel began his rebuttal argument, he asked the jurors to rely upon their recollection of the evidence but he again insinuated that OCF's counsel had been less than forthright with them about the evidence.[3]
The appellee, on the other hand, argues that the trial court correctly denied OCF's motion for a new trial on this issue where no objection was made to the statements during the trial, and where OCF otherwise failed to demonstrate that they constituted fundamental error. We disagree and find plaintiff's counsel's comments about opposing counsel to come within the purview of those improper comments repeatedly condemned by this court in Owens Corning Fiberglas Corp. v. Morse, 653 So.2d 409 (Fla. 3d DCA)[4], rev. denied, 662 So.2d 932 (Fla. 1995), Sun Supermarkets, Inc. v. Fields, 568 So.2d 480 (Fla. 3d DCA 1990), rev. denied, 581 So.2d 164 (Fla.1991), and Carnival *555 Cruise Lines, Inc. v. Rosania, 546 So.2d 736 (Fla. 3d DCA 1989). While it is perfectly permissible for trial attorneys to point out perceived discrepancies in the evidence introduced at trial and opposing counsel's characterization of the same, it is never acceptable for one attorney to effectively impugn the integrity or credibility of opposing counsel before the jury in the process. Even in the absence of a contemporaneous objection, we have found such comments about opposing counsel made during closing argument to be fundamentally erroneous. Morse, 653 So.2d at 410-11; Kaas v. Atlas Chemical Co., 623 So.2d 525, 526 (Fla. 3d DCA 1993) ("[A]rguments like these fall squarely within that category of fundamental errorrequiring no preservation belowin which the basic right to a fair and legitimate trial has been fatally compromised.").
In conclusion, we find that these improper statements made by plaintiff's counsel sufficiently tainted this proceeding enough to warrant a new trial. We therefore do not reach OCF's remaining challenges to the damages awarded in this case.
Reversed and remanded for a new trial.
NOTES
[1] As the final judgment was entered on March 28, 1995, the trial court did not have the benefit of the supreme court's June 15, 1995 opinion in Wells v. Tallahassee Memorial Regional Medical Ctr., 659 So.2d 249 (Fla.1995).
[2] Specifically, the following transpired:
[OCF's Counsel]: The one last thing that I want to talk to you about is this business about the fibers in the lung. Kaylo is made up of amosite and chrysotile, about 15 percent. Unibestos, the stuff that Mr. Helser said was consistent with the description of the co-workers, 60 to 80 percent amosite. Zonolite, that was that spray on stuff that was talked about in the depositions made by W.R. Grace, that was talc with tremolite.
[Plaintiff's Counsel]: Your honor, I'm going to object at this time. Now that we have fabrication of evidence, this is not true. Unibestos
THE COURT: Please, we will have no talking objections. Thank you. Sustained.
[OCF's Counsel]: Your Honor, I have
THE COURT: Sustained. Let's finish up.
[Plaintiff's Counsel]: May it be stricken, Your Honor?
THE COURT: Yes, Let's finish up. Close your argument now if you would, Mrs. Cole.
[Plaintiff's Counsel]: Your Honor, I'm also concerned about the representation of the deposition of Dr. Schepers.
THE COURT: No further objections. I'll overrule your objection. Thank you. Anything else, Mrs. Cole? Move onto another area.
[OCF's Counsel]: Your Honor, may I come side bar briefly so that I can understand your ruling?
THE COURT: No side bar. Let's finish up your final argument, please.
[OCF's Counsel]: Dr. Roggli testified that unibestos was 60 percent amosite asbestos.
[Plaintiff's Counsel]: Your Honor, I object. That's a fabrication.
THE COURT: Overruled. Please go ahead, Mrs. Cole, overruled.
[OCF's Counsel]: Mr. Helser testified that amositethat unibestos was 60 percent amosite.
[Plaintiff's Counsel]: Your Honor, that is absolutely a misrepresentation of Mr. Helser's We've read his transcripts.
THE COURT: Overruled.
[OCF's Counsel]: I can understand why this issue raises some blood pressure, because amosite was what Dr. Cagel and Dr. Roggli found in Mr. Crane's lung tissue.
[3] Crane's counsel stated as follows:
"Its supposed to mean something to a lawyer to come in here and make representations to the jury. You have the duty and obligation to seek the truth. Rely on your memory please."
[4] It is ironic [and unfortunate] that the same attorney who was the object of such improper comments in Morse is now the offending counsel in this case.
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J-S88018-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN THE INTEREST OF: A.J.K.P.-E., A : IN THE SUPERIOR COURT OF
MINOR : PENNSYLVANIA
:
:
APPEAL OF: J.T.P., MOTHER :
:
:
:
: No. 344 EDA 2016
Appeal from the Decree December 17, 2015
In the Court of Common Pleas of Philadelphia County
Family Court at No(s): CP-51-AP-0000261-2015,
CP-51-DP-0002528-2013
IN THE INTEREST OF: D.C.L.E., A : IN THE SUPERIOR COURT OF
MINOR : PENNSYLVANIA
:
:
APPEAL OF: J.T.P., MOTHER :
:
:
:
: No. 345 EDA 2016
Appeal from the Decree December 17, 2015
In the Court of Common Pleas of Philadelphia County
Family Court at No(s): CP-51-AP-0000260-2015,
CP-51-DP-0002527-2013
BEFORE: OLSON, J., RANSOM, J., and STRASSBURGER, J.*
MEMORANDUM BY RANSOM, J.: FILED JANUARY 23, 2017
Appellant, J.T.P., (“Mother”), appeals from the decree in the
Philadelphia County Court of Common Pleas, which terminated her parental
____________________________________________
*
Retired Senior Judge assigned to the Superior Court.
J-S88018-16
rights to her minor children, A.J.K.P.-E. and D.C.L.E.1, pursuant to the
Adoption Act, 23 Pa.C.S. § 2511(a)(1), (2), (5), (8) and 2511(b). After a
thorough review of the record, we affirm.
The relevant facts are as follows:
On December 20, 2013, DHS received a Child Protective Services
(CPS) Report which alleged that Child, [A.J.K.P.-E].,[born August
2008,] was hit in the eye and on the leg with a stick by his
Mother, J.[T.]P.; that [A.J.K.P.-E.] suffered bruising and
swelling; and that he was fearful of returning home from school.
It was alleged that [A.J.K.P.-E.] was watching television and
doing his homework when Mother hit him; that he is in the
kindergarten at McDaniel School; that he did not suffer from
delays or disabilities; and that Mother used physical discipline in
the past on both [A.J.K.P.-E.] and [D.C.L.E.], [born October
2006]. It was further alleged that [A.J.K.P.-E.] was transported
to Saint Christopher’s Hospital for a medical assessment and to
the Special Victims Unit (SVU), that the Children resided with
Mother at 2228 Dickenson Street in Philadelphia; that [A.J.K.P.-
E.] had a slight speech impediment; and that Mother had five (5)
prior assault arrests, including Endangering the Welfare of
Children. The Report was indicated against Mother as a
perpetrator of abuse.
On December 20, 2013, Dr. Pramath Nath of St. Christopher’s
Hospital examined [A.J.K.P.-E.] and observed bilateral bruises on
the child’s thighs, a bruise under the right eye and a healing
burn across his entire left forearm. Dr. Nath determined that
[A.J.K.P.-E.] suffered a second degree burn.
Dr. [Maria McColgan], the head of the Child Protection Clinic at
St. Christopher’s Hospital and an Expert in Pediatric and Child
Abuse Medicine concluded that the burn on [A.J.K.P.-E.’s] arm
was consistent with someone having held his arm over the stove
and inconsistent with the child reaching for something on the
stove.
____________________________________________
1
The trial court identifies the Children in an abbreviated fashion, A.J.K.P.-E.
is referenced as A.P.E., and D.C.L.E. is referenced as D.P.E.
-2-
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* * *
On December 20, 2013, an Order of Protective Custody (OPC)
was obtained and [D.C.L.E.] and [A.J.K.P.-E.] were placed at
Catholic Social Services.
On December 20, 2013, DHS contacted Mother, who stated that
the staff at McDaniel Elementary School never told her that
[A.J.K.P.-E.] was transported to SVU; that his eye injury
occurred while he was in school; and that the police and school
official had forced [A.J.K.P.-E.] to say that his Mother had
abused him. Mother admitted to using physical discipline on
both Children in the past.
A Shelter Care Hearing was held on December 23, 2013, the
OPC was amended to reflect that an Order of Protective Custody
was obtained on 12/20/2013, the OPC [w]as lifted and the
temporary commitment to DHS was ordered to stand. Mother
was offered supervised visits at the agency.
* * *
On December 30, 2013, Mother was arrested and charged with:
1) aggravated assault; 2) endangering welfare of Children-
parent/guardian/other commits offense; 3) possessing
instrument of crime with intent, simple assault-grading victim
under 12 defendant 21 or older; 4) recklessly endangering
another person; and 5) unlawful restraint/serious bodily injury.
The Court granted a motion to quash on the first three charges
and the remaining two charges were disposed at lower court.
The matter was scheduled for a waiver trial on May 15, 2015, in
Criminal Courtroom 1005.
On January 8, 2014, an Adjudicatory Hearing was held. The
Court discharged the Children’s temporary commitment to DHS;
adjudicated both Children Dependent; and committed them to
DHS. The Children were referred to Behavioral Health Services
(BHS) for consultation and/or evaluation; a paternity test was
ordered for putative father, C.E. as to [A.J.K.P.-E.]; Mother was
referred to the Achieving Reunification Center (ARC[)]; and a
criminal stay-away Order was Ordered to Stand. Mother to not
have visits until therapist says appropriate. Grandmother to
have supervised visits with the Children at the Agency.
-3-
J-S88018-16
On February 11, 2014, DHS held an initial Family Services Plan
(FSP) Meeting. The goal for [D.C.L.E.] and [A.J.K.P.-E.] was
“Return to Parent”. The parental objectives established for
Mother and Father were: 1) parents to meet with parent
educator on a weekly basis to understand how their
behavior/neglect resulted in injury and/or neglect to their
Children; 2) Mother will meet with parent educator on a weekly
basis to be educated on the expected behavior for Children; 3)
Mother will set age appropriate expectations; 4) Father will meet
with parent educator on a weekly basis to be educated on the
expected behavior for Children; 5) Father will set age
appropriate expectations; 6) Mother will participate in mental
health evaluation; Mother will comply with all treatment
recommendations; 7) Father will report to Family
Court/Domestic Relations Division for paternity test; 8) Father
will keep all visits and maintain regular contact with Children; 9)
Father will meet regularly with agency social worker and follow
through with Individual Service Plan (ISP); 10) Mother will meet
regularly with agency social worker and follow through with ISP.
Mother attended the meeting and signed the FSP. C.E.
participated via telephone.
On March 20, 2014, DHS referred Mother to ARC. Areas of
service included: parent education, anger management, mental
health, employment, housing and women’s empowerment group.
* * *
On August 6, 2014, a Permanency Review Hearing was held.
The [c]ourt found that the Children received therapeutic staff
support (TSS) services and trauma-focused therapy. The [c]ourt
ordered that both Children remain committed to DHS. The
[c]ourt found by clear and convincing evidence that Mother was
the perpetrator of child abuse as to Children, [A.J.K.P.-E.] and
[D.C.L.E.] An Aggravated Circumstances Order was issued and
that Mother’s criminal Stay-Away Order as to both Children was
to stand. If Mother’s Stay-Away Order is lifted, her visits are
suspended until the Children’s Therapist recommends otherwise.
It was further ordered that no efforts are to be made to preserve
the family and reunify the Children with Mother.
On January 26, 2015, a Permanency Review Hearing was held.
The [c]ourt found that [A.J.K.P.-E.] remained placed at
Devereux for psychiatric treatment; that he receives trauma-
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focused therapy through Children’s Crisis Treatment Center; and
that DHS is exploring goal change/termination of parental rights.
The [c]ourt ordered that [A.J.K.P.-E.] may be moved to
appropriate treatment foster care prior to the next court hearing,
if DHS and Child Advocate agree. The [c]ourt found that
[D.C.L.E.] was doing well; that she receives trauma-focused
therapy through Silver Springs. The [c]ourt ordered that Mother
participate in the second half of the Parenting Capacity
Evaluation authorized DHS to sign for [D.C.L.E.’s] treatment plan
if Mother is not available. The next hearing for [D.C.L.E.] and
[A.J.K.P.-E.] was scheduled as a Contested Goal
Change/Termination Hearing.
Trial Court Opinion, 4/19/16 at 3-11.
In December 2015, following three days of hearings, the court
terminated Mother’s parental rights as to both Children pursuant to 23
Pa.C.S.A. § 2511(a)(1), (2), (5), (8), as well as 2511(b), and changed the
children’s goal to adoption. In January 2016, Mother was granted leave to
appeal nunc pro tunc. She did so and filed a statement pursuant to
Pa.R.A.P. 1925(b). In April 2016, the trial court filed an opinion pursuant to
Pa.R.A.P. 1925(a).
Mother raises the following issues on appeal:
1. Did the Department of Human Services (DHS) sustain the
burden that Mother’s rights should be terminated when
there was evidence that [M]other had completed almost all
of her permanency goals?
2. Was there sufficient evidence presented to establish that it
was in the best interest of the children to terminate
[M]other’s parental rights.
Appellant’s Brief at 4.
-5-
J-S88018-16
Our standard of review regarding orders terminating parental rights is
as follows:
When reviewing an appeal from a decree terminating parental
rights, we are limited to determining whether the decision of the
trial court is supported by competent evidence. Absent an abuse
of discretion, an error of law, or insufficient evidentiary support
for the trial court’s decision, the decree must stand. Where a
trial court has granted a petition to involuntarily terminate
parental rights, this Court must accord the hearing judge’s
decision the same deference that we would give to a jury
verdict. We must employ a broad, comprehensive review of the
record in order to determine whether the trial court’s decision is
supported by competent evidence.
In re S.H., 879 A.2d 802, 805 (Pa. Super. 2005). In termination cases, the
burden is upon the petitioner to prove by clear and convincing evidence2
that the asserted grounds for seeking the termination of parental rights are
valid. In re S.H., 879 A.2d at 806.
“The trial court is free to believe all, part, or none of the evidence
presented, and is likewise free to make all credibility determinations and
resolve conflicts in the evidence.” In re M.G. and J.G., Minors, 855 A.2d
68, 73-74 (Pa. Super. 2004). “If competent evidence supports the trial
court’s findings, we will affirm even if the record could also support the
____________________________________________
2
The standard of clear and convincing evidence is defined as testimony that
is so “clear, direct, weighty and convincing as to enable the trier of fact to
come to a clear conviction, without hesitance, of the truth of the precise
facts in issue.” In re J.L.C. and J.R.C., 837 A.2d 1247, 1251 (Pa. Super.
2003).
-6-
J-S88018-16
opposite result.” In re Adoption of T.B.B., Jr., 835 A.2d 387, 394 (Pa.
Super. 2003).
We only need to agree with the trial court as to any one subsection of
Section 2511(a), as well as Section 2511(b), in order to affirm. See In re
B.L.W., 843 A.2d 380, 384 (Pa. Super. 20014) (en banc). As such, we will
focus on 2511(a)(2) and 2511(b), which provide as follows:
§ 2511. Grounds for involuntary termination
(a) General rule. – The rights of a parent in regard to a child
may be terminated after a petition filed on any of the
following grounds:
* * *
(2) The repeated and continued incapacity, abuse, neglect
or refusal of the parent has caused the child to be
without essential parental care, control or subsistence
necessary for his physical or mental well-being and
the conditions and causes of the incapacity, abuse,
neglect or refusal cannot or will not be remedied by
the parent.
* * *
(b) Other considerations. – The court in terminating the
rights of a parent shall give primary consideration to the
developmental, physical and emotional needs and welfare
of the child. The rights of a parent shall not be terminated
solely on the basis of environmental factors such as
inadequate housing, furnishings, income, clothing and
medical care if found to be beyond the control of the
parent. With respect to any petition filed pursuant to
subsection (a)(1), (6), or (8), the court shall not consider
any efforts by the parent to remedy the conditions
described therein which are first initiated subsequent to
the giving of notice of the filing of the petition.
-7-
J-S88018-16
23 Pa.C.S.A. § 2511(a)(2), (b).
We first examine the court’s termination of Mother’s parental rights
pursuant to Section 2511(a)(2). To satisfy the requirements of Section
2511(a)(2), the moving party must prove by clear and convincing evidence
the following elements 1) repeated and continued incapacity, abuse, neglect
or refusal; 2) such incapacity, abuse, neglect or refusal caused the child to
be without essential parental care, control or subsistence necessary for his
physical or mental well-being; and 3) the causes of the incapacity, abuse,
neglect or refusal cannot or will not be remedied. See In re Adoption of
M.E.P., 825 A.2d 1266, 1272 (Pa. Super. 2003). The grounds for
termination based on incapacity are not limited to affirmative misconduct.
Those grounds may include acts of refusal as well as incapacity to perform
parental duties. In re A.L.D., 797 A.2d 326, 337 (Pa. Super. 2002).
Mother argues that she completed most of her permanency objectives
and as such, DHS failed to meet its burden. Mother’s assertion is
misleading. While she has completed a parenting class and an anger
management class, she has failed to attend mental health treatment or
complete the second part of her parenting capacity evaluation. Notes of
Testimony (N.T.), 5/14/15, at 60-61. Furthermore, although Mother
completed an anger management class, the court expressed ongoing
concern regarding Mother’s anger. Trial Court Opinion, 4/19/16, at 20. The
trial court noted concerns regarding Mother’s irate behavior and that she
was escorted out of the courtroom during a hearing. Id. In essence,
-8-
J-S88018-16
Mother has refused to meet her objectives, thus leaving her children without
essential parental care, control or substance necessary for their mental well-
being.
The trial court found persuasive the testimony of Dr. Erica Williams,
the Director of Forensic Services at Assessment and Treatment Alternatives,
Inc. and stipulated to be an expert in the area of parenting capacity and
forensic evaluation of parenting capacity. According to Dr. Williams, Mother
lacked the capacity to provide safety and permanency for the children. Id.
at 21. Dr. Williams expressed concerns regarding Mother’s mental health,
failure to take responsibility for her children’s injuries, and lack of treatment
to address these issues. Dr. Williams concluded that Mother met the DSM 5
criteria for unspecified schizophrenia, spectrum, and other psychotic
disorder. N.T. 12/17/15 at 7-16. Due to Mother’s refusal to address her
mental health objective, her continued incapacity renders her unable to
provide parental care, control or subsistence to her children. Accordingly,
termination under Section 2511(a)(2) was appropriate.
After we determine that the requirements of Section 2511(a) are
satisfied, we proceed to review whether the requirements of Section 2511(b)
are satisfied. See In re Adoption of C.L.G., 956 A.2d 999, 1009 (Pa.
Super. 2008) (en banc). Pursuant to Section 2511(b), the court, in
terminating the rights of a parent, shall give primary consideration to the
developmental, physical, and emotional needs and welfare of a child.
-9-
J-S88018-16
In evaluating the needs and welfare of the Children, it is evident that
terminating Mother’s parental rights is in their best interest. Due to abuse
and the trauma inflicted by Mother, she has not visited with them since they
were committed to DHS. N.T. 5/14/15 at 83. Furthermore, the Children
have expressed no interest in seeing Mother. Id.; N.T., 7/28/15, at 27.
When Mother’s name was mentioned, A.J.K.P.-E. exhibited anxiety. N.T.,
7/28/15, at 28. The trial court found credible the testimony of the Children’s
therapists as well as the testimony of the social workers, all of whom opined
that termination was in the best interest of the children. Trial Court Opinion
at 11-16. Terminating Mother’s parental rights is in the Children’s best
interest, as Mother has failed to address her role in the abuse and trauma
she inflicted on her children.
There is competent evidence in the record that supports the trial
court’s credibility and weight assessments that severing the bond with
Mother would not cause the Children irreparable harm. Thus, we conclude
that the trial court did not abuse its discretion in terminating Mother’s
parental rights to the Children with regard to section 2511(b).
Accordingly, after a careful review, we affirm the decree terminating
Mother’s parental rights on the basis of 2511(a)(1) and (b).
Decree affirmed.
- 10 -
J-S88018-16
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/23/2017
- 11 -
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