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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 16-1191
DAVID CHARLES BACH, a/k/a David Bach,
Plaintiff - Appellant,
v.
CIA,
Defendant - Appellee.
Appeal from the United States District Court for the District of
South Carolina, at Florence. Kaymani D. West, Magistrate Judge.
(4:15-cv-04915-MGL)
Submitted: July 5, 2016 Decided: July 11, 2016
Before GREGORY, Chief Judge, and MOTZ and KEENAN, Circuit Judges.
Dismissed by unpublished per curiam opinion.
David Charles Bach, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
David Charles Bach seeks to appeal the magistrate judge’s
report recommending that his civil action be dismissed without
prejudice. This court may exercise jurisdiction only over final
orders, 28 U.S.C. § 1291 (2012), and certain interlocutory and
collateral orders, 28 U.S.C. § 1292 (2012); Fed. R. Civ. P. 54(b);
Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545-46 (1949).
The magistrate judge’s report and recommendation Bach seeks to
appeal is neither a final order nor an appealable interlocutory or
collateral order. Furthermore, the district court’s adoption of
the report and recommendation after Bach noted his appeal does not
overcome the jurisdictional defect in Bach’s appeal because the
magistrate judge’s report was not an order that the district court
could have certified for immediate appeal. See Equip. Fin.
Group v. Traverse Comput. Brokers, 973 F.2d 345, 347-48 (4th Cir.
1992) (holding that doctrine of cumulative finality only applies
where order appealed from could have been certified under Fed. R.
Civ. P. 54(b)). Accordingly, we dismiss the appeal for lack of
jurisdiction. We dispense with oral argument because the facts
and legal contentions are adequately presented in the materials
before this court and argument would not aid the decisional
process.
DISMISSED
2
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J-A06015-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
KEITH SIMMONS
Appellant No. 2153 EDA 2013
Appeal from the Judgment of Sentence July 17, 2013
In the Court of Common Pleas of Philadelphia County
Criminal Division at No(s): CP-51-CR-0001504-2012
CP-51-CR-0001833-2012
BEFORE: PANELLA, J., OTT, J., and JENKINS, J.
MEMORANDUM BY PANELLA, J. FILED MAY 29, 2015
Appellant, Keith Simmons, appeals from the judgment of sentence
entered July 17, 2013, in the Court of Common Pleas of Philadelphia County.
No relief is due.
During the early morning hours on January 7, 2012, Simmons
perpetrated two gunpoint robberies within two hours and three miles of each
other. With the aid of a co-conspirator, Simmons held his victims at
gunpoint and robbed them of their wallets and cell phones. On February 21,
2013, a jury convicted Simmons in the consolidated cases of two counts of
robbery, two counts of criminal conspiracy to commit robbery, two counts of
possession of an instrument of crime, two counts of firearms not to be
J-A06015-15
carried without a license, two counts of carrying a firearm on the streets of
Philadelphia, and two counts of possession of firearm prohibited.1 At
sentencing, the trial court determined that the counts of conspiracy and
violations of the Uniform Firearms Act merged for sentencing purposes
because the incident was in the nature of a continuing offense. However,
with respect to the charges of possession of an instrument of crime, the trial
court ruled the convictions did not merge for sentencing as Simmons had
wielded a gun in two separate robberies involving two different victims. See
N.T., Sentencing, 7/17/13 at 4-5. The trial court sentenced Simmons to an
aggregate term of 36½ to 79 years’ imprisonment. This timely appeal
followed.
We proceed to address Simmons’s first issue, wherein he challenges
the trial court’s decision to deny his request for a continuance. Our review
of a trial court’s continuance decision is deferential. See Commonwealth
v. Brooks, 104 A.3d 466, 469 (Pa. 2014). “The grant or denial of a motion
for a continuance is within the sound discretion of the trial court and will be
reversed only upon a showing of an abuse of discretion.” Id. (citation
omitted).
The record reveals that on February 13, 2013, Simmons rejected a
plea offer and indicated his wish to proceed to trial. See N.T., 2/13/13 at
____________________________________________
1
18 Pa.C.S.A. § 3701; 18 Pa.C.SA. § 903; 18 Pa.C.S.A. § 907; 18 Pa.C.S.A.
§ 6106; 18 Pa.C.S.A. § 6108; and 18 Pa.C.S.A. § 6105.
-2-
J-A06015-15
23. Jury selection was scheduled to commence the following day. At the
outset of the proceedings on February 14, 2013, Simmons requested a
continuance in order to retain private counsel. The Commonwealth objected
on the basis that Simmons had not previously indicated a desire to retain
private counsel and that both it and the defense were prepared to go to trial.
See N.T., Voir Dire, 2/7/13 at 8. Noting that no defense counsel had yet
been hired and Simmons had failed to indicate that he wished to retain
different counsel when he expressed his intent to proceed to trial the day
before, the trial court denied Simmons’s request. See id. at 9-10.
We discern no abuse of discretion in the trial court’s denial of the
continuance request. The “right to counsel does not give [a defendant] the
right to delay the trial indefinitely because he is dissatisfied with competent
counsel … ready and willing to represent him.” Commonwealth v.
Ingram, 591 A.2d 734, 738 (Pa. Super. 1991) (citation and internal
quotation marks omitted). Here, Simmons did not raise his request to retain
new counsel until immediately prior to the commencement of jury selection.
Simmons has not, either at the time he initially made his continuance or in
his appellate brief, explained any reason for his supposed dissatisfaction with
his appointed counsel. Although Simmons baldly maintains that he “suffered
prejudice from being deprived of obtaining counsel of his choice,” Appellant’s
-3-
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Brief at 32, he does not elucidate the manner in which he was prejudiced. 2
Given Simmons’s failure to provide any substantial reason why his current
appointed counsel was incompetent or otherwise deficient, we cannot find
that the trial court abused its discretion in denying the last-minute request
for a continuance in order to employ private counsel.
Simmons next argues that the trial court erred when it permitted to
the Commonwealth to introduce the victim’s Verizon cellular phone records.
When reviewing a trial court’s evidentiary rulings, we note that, “the
admission of evidence is within the sound discretion of the trial court and will
be reversed only upon a showing that the trial court clearly abused its
discretion.” Commonwealth v. Fransen, 42 A.3d 1100, 1106 (Pa. Super.
2012), appeal denied, 76 A.3d 538 (Pa. 2013) (citations omitted).
At trial, the victim, Turhan Laws, testified that Simmons robbed him at
gunpoint and stole everything from his pockets, including his cell phone.
See N.T., Trial, 2/15/13 at 47-48. Laws explained that he later called
Verizon at the behest of the police with instructions to leave his cell phone
active, in case the robber tried to use it. See id. at 59-60. The
Commonwealth then proceeded to question Laws regarding the call logs he
____________________________________________
2
Simmons claims in his brief that the trial court’s decision was influenced by
bias. We do not find any evidence to support the claim of bias. But we
admonish the trial court, the Honorable Chris R. Wogan, for his intemperate
reference to Simmons as an “idiot” for requesting the continuance. See
N.T., Trial, 2/14/13 at 10. Such behavior is simply unacceptable.
-4-
J-A06015-15
received from Verizon for the calls made during the period after his phone
was stolen, marked as Exhibit C-17. See id. at 60-61. Defense counsel
objected, noting that the Commonwealth had previously indicated that a
Verizon record’s custodian would testify regarding the phone records from
the victim’s cellular phone. See id. at 69. On the morning of trial, however,
the Commonwealth provided defense counsel with a copy of the phone
records with an attached certification of authentication from the Verizon
Wireless Custodian of Records. See id. at 62-63; see also Exhibit C-17.
Defense counsel argued that even with the attached certification the victim
was not a proper witness to authenticate the phone records compiled by
Verizon and that the victim was not qualified to explain what the records
purported to contain. See id. at 63-67; 69. The trial court ultimately
overruled counsel’s objection.
Simmons ultimately concedes on appeal that the call logs were
admissible as self-authenticating records of a regularly conducted activity
pursuant to Pennsylvania Rule of Evidence 902(11). See Appellant’s Brief at
34. Rule 902 provides:
The following items of evidence are self-authenticating; they
require no extrinsic evidence of authenticity in order to be
admitted:
...
(11) Certified Domestic Records of a Regularly Conducted
Activity. The original or a copy of a domestic record that meets
the requirements of Rule 803(6)(A)-(C), as shown by a
certification of the custodian or another qualified person that
complies with Pa.R.C.P. No. 76. Before the trial or hearing, the
-5-
J-A06015-15
proponent must give an adverse party reasonable written notice
of the intent to offer the record--and must make the record and
certification available for inspection--so that the party has a fair
opportunity to challenge them.
...
Pa.R.E. 902(11).
Simmons now argues that the Commonwealth failed to provide
“reasonable written notice” of its intent to offer the phone records with an
accompanying certification of the custodian of records. Appellant’s Brief at
34-35. This specific objection to the lack of written notice was not raised at
trial. We are therefore constrained to find that this issue is waived. See
Pa.R.A.P. 302(a) (“Issues not raised in the lower court are waived and
cannot be raised for the first time on appeal.”); see also Commonwealth
v. Pearson, 685 A.2d 551, 555 (Pa. Super. 1996) (en banc) (an appellant
may not raise a new theory for an objection made at trial on his appeal).
Lastly, Simmons contends that he was improperly convicted of two
counts of possession of an instrument of crime, where the evidence
established only a single, continual possession. See Appellant’s Brief at 37.
This claim raises a challenge to the sufficiency of the evidence to support
Simmons’s convictions.
The standard we apply when reviewing the sufficiency of
the evidence is whether viewing all the evidence admitted at trial
in the light most favorable to the verdict winner, there is
sufficient evidence to enable the fact-finder to find every
element of the crime beyond a reasonable doubt. In applying the
above test, we may not weigh the evidence and substitute our
judgment for the fact-finder. In addition, we note that the facts
and circumstances established by the Commonwealth need not
preclude every possibility of innocence. Any doubts regarding a
-6-
J-A06015-15
defendant’s guilt may be resolved by the fact-finder unless the
evidence is so weak and inconclusive that as a matter of law no
probability of fact may be drawn from the combined
circumstances. The Commonwealth may sustain its burden of
proving every element of the crime beyond a reasonable doubt
by means of wholly circumstantial evidence. Moreover, in
applying the above test, the entire record must be evaluated and
all evidence actually received must be considered. Finally, the
trier of fact while passing upon the credibility of witnesses and
the weight of the evidence produced is free to believe all, part or
none of the evidence. Furthermore, when reviewing a sufficiency
claim, our Court is required to give the prosecution the benefit of
all reasonable inferences to be drawn from the evidence.
However, the inferences must flow from facts and
circumstances proven in the record, and must be of such volume
and quality as to overcome the presumption of innocence and
satisfy the jury of an accused's guilt beyond a reasonable doubt.
The trier of fact cannot base a conviction on conjecture and
speculation and a verdict which is premised on suspicion will fail
even under the limited scrutiny of appellate review.
Commonwealth v. Slocum, 86 A.3d 272, 275-276 (Pa. Super. 2014)
(citation omitted).
An individual commits the offense of possession of an instrument of
crime if he or she “possesses any instrument of crime with intent to employ
it criminally.” 18 Pa.C.S.A. § 907(a).
Instantly, despite the jury’s conviction of two separate conspiracy
charges, the trial court merged Simmons’s multiple convictions of conspiracy
and violations of the Uniform Firearms Act as it found that the conspiracy
was in the nature of a continuing offense. However, the court refused to
merge the separate convictions for possession of an instrument of crime, on
the basis that Simmons’s use of “a handgun in the commission of two
separate robberies that occurred over an hour apart in two separate
-7-
J-A06015-15
locations approximately two miles apart,” Supplemental Trial Court Opinion,
5/6/14 at 5, evinced the development of two separate and distinct intentions
to use a firearm criminally.
In reaching this conclusion, the trial court relied upon the Pennsylvania
Supreme Court’s decision in Commonwealth v. Andrews, 768 A.2d 309
(Pa. 2001). In Andrews, the appellant argued that his continuous
possession of a handgun during the course of two separate robberies
rendered the evidence insufficient to support his conviction of two counts of
possession of an instrument of crime. See id. at 317. Rejecting this
reasoning, the Supreme Court affirmed that “it is the actor's criminal
purpose that provides the touchstone of his liability for possessing an
instrument of crime.” Id. at 317-318 (citations and internal quotes
omitted). Thus, the court reasoned that the “use of a firearm in committing
an offense bears upon the element of intent,” such that where the jury had
convicted Andrews of two separate conspiracies to commit robbery, “there
was sufficient evidence from which the jury could conclude that Andrews'
intention to employ the firearm criminally was also separately developed as
part of each conspiratorial agreement.” Id. at 318.
Herein, of course, the trial court determined that the conspiracy to
commit the robberies developed as a course of continuing conduct, rather
than two separate conspiracies. Even in the absence of two distinct
agreements to commit the robberies, we are satisfied that the evidence
sufficiently established that Simmons brandished a firearm with the intent to
-8-
J-A06015-15
employ it criminally during the course of two separate and distinct robberies,
such that his conviction and sentence on each count of possession of an
instrument of crime was proper.
Judgment of sentence affirmed.
Judge Ott joins in the memorandum.
Judge Jenkins concurs in the result.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/29/2015
-9-
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350 F.Supp. 929 (1972)
Joseph Gilbert HERNANDEZ, Petitioner,
v.
Walter E. CRAVEN, Warden, Folsom State Prison, Represa, California, Respondent.
Civ. No. 72-1315.
United States District Court, C. D. California.
October 31, 1972.
*930 Hugh R. Manes, Los Angeles, Cal., for petitioner.
Evelle J. Younger, Atty. Gen., Edward A. Hinz, Jr., Chief Asst. Atty. Gen., Crim. Div., Doris H. Maier, Asst. Atty. Gen., Writs Section, Russell Iungerich, Alan G. Novodor, Deputy Attys. Gen., for respondent.
OPINION AND ORDER DENYING PETITION FOR WRIT OF HABEAS CORPUS
HAUK, District Judge.
Petitioner, a California State prisoner incarcerated at Folsom Prison, was sentenced in Los Angeles County Superior Court on January 12, 1971, following his conviction in 1970 by a jury of 2nd degree robbery (Penal Code § 211). The *931 conviction was affirmed in an unpublished opinion by the Court of Appeal, Second Appellate District, on January 3, 1972. A petition for rehearing was denied, and petition for hearing was denied by the California Supreme Court on March 16, 1972. Thus, State remedies have been exhausted as required by 28 U.S.C. § 2254, and the prisoner now seeks a Federal Habeas Corpus Writ.
An Order to Show Cause why the writ should not be granted was issued, and a hearing was held on August 7, 1972. Pursuant thereto and for the reasons expressed in this written Order, which also shall constitute the findings of fact and conclusions of law supporting the Order, the petition for writ of habeas corpus is denied.
The following contentions are advanced by counsel in support of his claim that petitioner's conviction violated his constitutional rights:
1. The conviction was obtained by the use of a 1961 prior felony burglary conviction which was constitutionally invalid.
2. The identification testimony was tainted by constitutionally impermissible pre-trial identification procedure.
3. Counsel at trial was ineffective and incompetent.
The Court has reviewed the Petition, the Response, the Traverse and points and authorities cited by both parties. In connection with the 1970 conviction here attacked (for which he was sentenced in 1971 as mentioned above), case Number A007 490, the Court has also reviewed the following documents:
1. Unpublished opinion of the California State Court of Appeal.
2. Appellant's opening brief on appeal.
3. Respondent's opening brief on appeal.
4. Petition for rehearing in the State Court of Appeal.
5. Petition for hearing in the State Supreme Court.
6. Clerk's Transcript and Supplemental Transcript.
7. Reporter's Transcript and 2 Supplemental Reporter's Transcripts.
Additionally, the Court has studied the following records pertaining to the 1961 felony burglary conviction, Number 241-778[1]:
8. Opinion of the State Court of Appeal reported as People v. Hernandez, 209 Cal.App.2d 33, 25 Cal.Rptr. 640 (1962).
9. Opening brief on appeal.
10. Respondent's brief on appeal.
11. Petition for hearing in the State Supreme Court.
12. Clerk's transcript and supplement.
13. Reporter's transcript and supplement.
The Court is, therefore, fully advised in the premises. Since there is no factual dispute, no evidentiary hearing is required and no recitation or findings of fact beyond those recited hereafter are necessary.
THE PRIOR CONVICTION
Counsel for petitioner contends that the 1961 conviction was constitutionally invalid because defendant had been denied counsel in violation of the Sixth Amendment. In the 1970 trial this conviction was used to impeach petitioner when he testified, and was also used in the prosecutor's argument to the jury.
In the 1970 trial, A007 490, petitioner was arraigned on March 17, 1970. On June 17, 1970, an amended information *932 was filed alleging the 1961 prior felony burglary conviction, which petitioner then denied. Objection was made and the trial court held a hearing on October 30 and again on November 4, 1970. At the conclusion of the hearings, the trial Judge ruled that the prior 1961 conviction was not constitutionally invalid, and petitioner then admitted it. The jury was instructed not to concern itself with the allegation previously read to them, and no objection is here made to the procedure followed.
The argument advanced is that the Court of Appeal erred in upholding the validity of the 1961 opinion as previously determined in the 1962 reported opinion, People v. Hernandez, supra. Counsel for petitioner contends that subsequent decisions require a reversal of the 1961 conviction.[2] He also appears to complain about the wording of the trial court's ruling on the prior, alleging that the court offered "no other reasons for his conclusions and made no Findings of Fact, nor any comment upon the credibility of the witnesses." (Pet. 10-11)
The petitioner must establish by convincing evidence that the factual determination by the state was erroneous, or that the state proceedings were not full and fair. Lurie v. Oberhauser, 431 F.2d 330 (9th Cir. 1970); Martinez v. Wilson, 357 F.2d 173 (9th Cir. 1966); Cancino v. Craven, 305 F.Supp. 539 (C. D.Cal.1970). This he has not done.
It is true that the Court did not make findings of fact as such, nor did the Court specifically pass on the credibility of witnesses at the time of the hearing on November 4, 1970. However, it is not accurate to say that the Court only relied upon the appellate ruling on the validity of the 1961 conviction, although the Judge did quote with approval from that opinion. Thereafter, he added:
"I do not feel that a defendant having the services of the public defender can then discharge the public defender, and say, `Now appoint other private counsel for me.' I do not think Gideon v. Wainright [Wainwright] intends such a situation ever to come about. There was, apparently, within the meaning of People vs. Maddox, an intelligent waiver of counsel by Mr. Hernandez and, therefore, the prior os [sic] not constitutionally invalid." (R.T. 57)
Although the petitioner has not demonstrated to the satisfaction of this Court that the proceedings in the State at the 1970 trial were not full and fair, nevertheless the Court now reviews the facts surrounding the 1961 conviction and makes its own determination of its validity.
On April 7, 1961, Mr. Mead from the Public Defender's office was appointed to represent this petitioner. On May 19, 1961, when the case was called for trial, the petitioner insisted that the Public Defender be dismissed and requested a continuance for the appointment of private counsel to represent him. There was an extended colloquy during which the Court first refused all requests, but finally released the Public Defender and granted a continuance until May 24th. The entire proceedings are reported in the Reporter's Supplemental Transcript. p. 3, and appear verbatim in the margin.[3]*933
*934 It is clear that petitioner was determined to proceed alone and rely on his interpretation of Penal Code § 987, insisting that he was entitled to appointment of private counsel, even though he was repeatedly told that this simply was not true. Although counsel for petitioner objects to the characterization of his procedure as "strategy" by the appellate court, it is nonetheless clear that the petitioner knew what he was doing and did make a considerable choice.
Perhaps the petitioner felt that the case was so hopelessat least on the question of guilt or innocencethat there was nothing an attorney could do for him, and decided that his only chance was the hope that the jury would be sympathetic to him as a layman pitting himself against the awesome forces of the State. But that is pure conjecture; whatever his reasons, his conduct and statements made his intention clear, and he reinforced and adhered to the purpose he had expressed.
After the continuance, at the start of the trial in the jury's presence on May 24, 1961, the following appears:
"THE DEFENDANT: Your Honor, before we start I'd like to state my position in this case. I cannot act as my own attorney. I have no attorney, *935 and for the sake of the court record, I repeat my request for effective counsel under 987a of the Penal Code authorizing the Court to appoint one.
"THE COURT: Well, the Court has explained all of that to you previously. We have gone all through that, Mr. Hernandez. You had a very competent attorney in the Court's opinion. The Court appointed him for you and you discharged him and said you wanted to represent yourself. The Court strongly advised against it and told you that in the Court's opinion you were making a very grave mistake, but you insisted upon it. The Court gave you a continuance to obtain other counsel or be prepared to proceed today in pro per, in your own person.
"MR. HERNANDEZ: I think if we go back to the transcript of the last proceeding here, I did not request to represent myself at any time.
"THE COURT: Well, the Court informed you that it was then up to you to obtain an attorney." (R.T. 3-4).
Throughout the trial when asked if he wanted to question witnesses he said, "I do, but I do not have a lawyer, your Honor." "I am not acting as my own counsel." "The California Constitution guarantees me the right to have counsel." The Court consistently readvised him, saying finally "You did. You had counsel. We gave you the guarantee and complied with it and appointed counsel for you, and your counsel was all ready for trial some time ago, and then you fired him and said you didn't want him and you would proceed without him. So that's the status of the case now." (R.T. 10-11)
Mr. Hernandez was not a naive and inexperienced young man who was not aware of his rights or the ramifications. His arrest record, which was relevant to his attitude, approach and statements was made known to the trial Judge outside the presence of the jury. Beginning in 1950, there were 5 arrests and dismissals of charges before a conviction in 1954 for burglary and larceny. He apparently was paroled, for he was arrested again for investigation of burglary and jumped bail on May 20, 1955. A warrant was outstanding on that charge at the time of trial.
Continuing, he was arrested May 13, 1956, for burglary of a motor vehicle and charged with grand theft in Santa Monica. He again jumped bail and another hold was placed on him when he was arrested March 18, 1961. The report also shows Mr. Hernandez' true name to be Gilbert J. Craley, and he has been known and convicted under 5 aliases. (R.T.1961 pp. 55-58)
During proceedings on the 1961 charge, petitioner was also going through proceedings connected with the 1956 Santa Monica charge. Represented by the Public Defender, he was arraigned and entered a plea of guilty to a lesser charge of petty theft on May 29, 1961. It is, therefore, reasonable to assume that he knew his right to counsel when he discharged the Public Defender 10 days previously. (See footnote 3). It would appear from this chronology that petitioner was satisfied with the services of the Public Defender's office when an advantageous plea bargain was arranged, but decided to employ other tactics in this 1961 case when no such deal could be made.
As final evidence that this was a knowingly conceived plan, the petitioner said at the conclusion of the trial that he would make a few remarks to the jury, although he was not a lawyer and was not acting as a lawyer. His arguments and comments on the evidence cover more pages than that of the prosecuting attorney (R.T. 93-106). At the conclusion of the trial and at sentence he made a motion for a new trial, citing cases (R.T. 73, 122).
Although the Court feels that its finding on the validity of the 1961 conviction answers the objection raised here, there still remain a few arguments about the hearing on November 4, 1970, which will be clarified so that the correctness *936 of the Judge's ruling will be even more apparent.
At that hearing, petitioner replied affirmatively when asked: "Did you at all times ask for an attorney to aid you or for legal counsel to aid you prior to asking or being offered the opportunity to cross-examine witnesses?" (R.T. 32). This affirmative reply is not borne out by the record. As previously pointed out, at the beginning of trial on May 24, 1961, and throughout the trial this petitioner made it clear that he was standing on his claimed right to have private counsel appointed, and did not ask for assistance, but for complete representation.
Again, on November 4, 1970, petitioner testified that he never told the Court in 1961 that he wouldn't accept the Public Defender. (R.T. 50). But at the proceedings on May 19, 1961, he said: "I merely state that I wish a private attorney and I don't have the means and I do not wish to have the Public Defender." (See n. 3, supra)
Finally, at the November 4, 1970, hearing, petitioner testified that he told the Judge the reason he wanted a private attorney was because the Public Defender wasn't prepared for trial and had seen him for only 5 or 6 minutes about 3 days before the trial began. The 1961 record shows that nothing was said about lack of preparation when he asked to have the Public Defender relieved. It was during a discussion in chambers towards the end of the prosecution case that the subject was brought up, and petitioner then made his claim that the office was too busy to be effective.[4]
This petitioner did not present any facts either in 1961 or at the hearing in the 1970 trial to indicate lack of preparation on the part of the Public Defender. He doesn't indicate that he ever had any discussion to that effect, nor has he shown any defense in the 1961 case which was neglected or omitted. At most, the record both times and in each case bespeaks merely a vague, general dissatisfaction or disagreement as was the situation in Kates v. Nelson, 435 F. 2d 1085 (9th Cir. 1970).
This Court recognizes, of course, that the Sixth Amendment right to assistance *937 of counsel extends to state trials, and even to petty offenses where the loss of liberty is possible. Argersinger v. Hamlin, 407 U.S. 25, 92 S.Ct. 2006, 32 L.Ed.2d 530 (1972). We hold that in 1961 this petitioner was offered the assistance of counsel.
There is no constitutional right to counsel of one's own choosing. Reiff v. United States, 299 F.2d 366 (9th Cir. 1962), cert. denied 372 U.S. 937, 83 S.Ct. 884, 9 L.Ed.2d 768 (1963). It is equally true that while a defendant is guaranteed the right to assistance of counsel, the Constitution does not force an unwanted attorney on a defendant. Adams v. United States ex rel. McCann, 317 U. S. 269, 279, 63 S.Ct. 236, 87 L.Ed. 268 (1942).
Counsel for petitioner argues here that the Court in 1961 should have insisted on appointing another member of the Public Defender's office, but even this hind-sight assessment is an idle gesture. The proceedings make it abundantly clear that on May 19, 1961, this petitioner did not want anyone from that office, and indicated that his dissatisfaction was not directed against Mr. Mead [the Public Defender appointed] personally. (See footnote 3) In the light of his statements, he could not have been compelled to accept counsel against his will. Arellanes v. United States, 302 F.2d 603, 610 (9th Cir. 1962), cert. denied 371 U.S. 930, 83 S.Ct. 294, 9 L.Ed.2d 238 (1962).
This is not a case where a defendant and counsel had become embroiled in such irreconcilable conflict that there was no cooperation or communication as in Brown v. Craven, 424 F.2d 1166 (9th Cir. 1970). Note that in the Brown case the Court said: "Of course, a court is not required to provide an indigent accused with any particular attorney whom he may desire." Id. at 1170.
A judgment cannot be lightly set aside on collateral attack. The judgment of a court carries with it a presumption of regularity. Where a defendant, without counsel, acquiesces in a trial resulting in his conviction and later seeks release by the extraordinary remedy of habeas corpus, the burden of proof rests upon him to establish that he did not competently and intelligently waive his constitutional right to assistance of counsel. Johnson v. Zerbst, 304 U.S. 458, 468-469, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938). It is noted that petitioner has never sought to attack the 1961 conviction directly by way of petition for writ of habeas corpus, but has chosen instead to attack it in this indirect manner through the 1970 conviction. The same standards will prevail, however.
It is argued that the conviction is invalid because it does not meet the classic statement about waiver being shown on the record, as set forth in Carnley v. Cochran, 369 U.S. 506, 82 S.Ct. 884, 8 L.Ed.2d 70 (1962), but that bald statement of a holding perverts the meaning of the case. A waiver is ordinarily "an intentional relinquishment or abandonment of a known right or privilege. The determination of whether there has been an intelligent waiver of the right to counsel must depend, in each case, upon the particular facts and circumstances surrounding that case, including the background, experience, and conduct of the accused."[5]
Thus, although the abstract of judgment and clerk's record do not expressly recite a valid waiver, the record in toto of all proceedings show a clear and knowing and voluntary waiver by conduct based on the petitioner's background and experience as previously set forth.
In the 1961 trial, the Court cited as the law at that time People v. Duncan, 175 Cal.App.2d 372, 346 P.2d 521 (1959), holding that there were two choices in the matter of a court-appointed attorney: he can accept the representation by counsel, or he can elect to represent *938 himself. (R.T.1961 trial 61). The California test used in the unpublished opinion of the 1970 trial, in dealing with this point, cited People v. Addison, 256 Cal.App.2d 18, 63 Cal.Rptr. 626 (1967), (Op. p. 7), holding "A defendant who, with an intelligent conception of the consequences of his act, declines the aid of counsel prior to or at the commencement of his trial, is not entitled thereafter to interrupt and delay the hearing at any stage he deems advantageous merely to interpose a demand for legal assistance." Id. at 24, 63 Cal. Rptr. at 629.
That statement is in accord with the holdings of the Ninth Circuit Court of Appeals, which starts with the premise that there is no right to counsel of one's own choosing. Reiff v. United States, 299 F.2d 366 (9th Cir. 1962), cert. denied 372 U.S. 937, 83 S.Ct. 884, 9 L.Ed. 2d 768 (1963).
The instant petition is very similar to the situation in Kates v. Nelson, 435 F.2d 1085 (9th Cir. 1970). The petitioner here, as in Kates is in no position to complain that he is forced to proceed without counsel, a situation for which he is intentionally and knowingly responsible. In Kates, the defendant had stated unequivocally that he no longer wanted the services of counsel and that he would refuse to cooperate if counsel were allowed to continue. He attempted to excuse his conduct by insisting that the attorney was not handling his case properly, but this bespoke merely a simple disagreement. "While Appellant did not waive the entire California bar, he, knowing full well the nature of the charges against him and the enormity of the consequences if convicted, adamantly refused the further assistance of his appointed counsel, an able member of that bar." Kates v. Nelson, supra, 1089.
Counsel for petitioner further argues that the United States Supreme Court has concluded that the use of an invalid prior conviction to prove guilt or to impeach credibility is, without regard to impact, reversible error. He cites as authority for this claim Loper v. Beto, 405 U.S. 473, 92 S.Ct. 1014, 31 L.Ed.2d 374 (1972). On the contrary, that case specifically held that in the circumstances of the case there was little room for a finding of harmless error. Id., 483 n. 12, 92 S.Ct. 1014.
In the instant case, there was more than ample evidence to support the finding of guilt, and to discredit this petitioner's testimony by evidence other than that pertaining to the prior conviction. The victim of the robbery, whose testimony was unshakeable, identified the defendant positively. She said she looked at him from a distance of 12 to 14 inches (R.T. 66); she was positive of his face (R.T. 69). While she was awaiting emergency treatment she was shown several pictures but was unsure of the exact identification. She picked out 2 pictures (R.T. 155) who might be her assailant.
The following day, after treatment and rest, she gave a description of the robber (R.T. 143). She picked out a picture of this petitioner from a group presented to her (R.T. 156) and testified that she had a positive memory of his face (R.T. 85, 89). Finally, she pointed out the petitioner at the preliminary hearing with no prompting (R.T. 149-150). Another witness, Pierson, also identified the petitioner and gave a description very similar to that given by the victim (R.T. 184). [It is the testimony of this witness which has been challenged in ground 2 of this petition and will be more fully discussed later.] Additionally, two men, Martinez and Roberts, working nearby at the time of the robbery, saw a man running from the scene. He took off in a white car which they followed (R.T. 102). They obtained a license number which they gave to police (R.T. 105, 106), which proved to be that of a car registered to this petitioner. He was arrested at his *939 home when he drove up in that car later the same day.[6]
The defense was an alibi, petitioner attempting to show that he could not have committed the robbery, which apparently occurred about 2 P.M. (R.T. 62). A witness testified that she saw Hernandez in a bar across the street from his home about that time. He testified that he was in Hollywood on business and at his attorney's office about 4 or 4:30 P.M. (R.T. 427). Both he and his mother testified that he had loaned his car to a casual acquaintance, and that it was not returned until about 1:30 or 2 that day. He did not tell the police about this at any time (R.T. 481-482).
There was conflict about whether he told the arresting officer he had had the car with him all day. This he denied. Obviously, the jury simply did not believe his story[7] and this Court will not, of course, reweigh the evidence. Fernandez v. Klinger, 346 F.2d 210 (9th Cir. 1965), cert. denied 382 U.S. 895, 86 S.Ct. 191, 15 L.Ed.2d 152 (1965).
After a complete review of the transcripts and records of all proceedings in the trial court in both the 1961 and 1970 convictions, the Court concludes that the petitioner received a fair hearing with full opportunity to develop the material facts related to his claim, that the material facts were adequately developed, and that there is sufficient evidence in support of the California State trial and appellate court determinations that the 1961 prior conviction was not constitutionally invalid. See Jarvis v. Nelson, 464 F.2d 1299 (9th Cir.).
Additionally, the Court finds that if there were any error, in the light of the overwhelming evidence of guilt, it did not contribute to the verdict of guilty, and such error, if any, was harmless beyond a reasonable doubt. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967).
Finally, mention must be made of United States v. Tucker, 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592 (1972), affirming Tucker v. United States, 431 F. 2d 1292 (9th Cir. 1970). That case held, as the Court does here, that even though a prior invalid conviction had been used for impeachment, it was harmless error beyond a reasonable doubt, because the conviction played no part in the sentencing. In the 1970 robbery conviction the sentence imposed was within the bounds set by the California Legislature for violation of this Penal Code section 8[8] and the petitioner has not shown that the prior 1961 burglary conviction played any part in the sentencing.
THE IDENTIFICATION
Counsel for petitioner contends that the in-court identification by witness Pierson was tainted by constitutionally unfair and overly suggestive pre-trial identification procedures (Pet. 13-14). He attacks the lineup as violative of constitutional requirements, pointing out that petitioner was the only person whose features were Mexican-American, and that none of the others whose pictures were in the group of mug shots was in the lineup (Pet. 39-40).
Since the petitioner was represented by counsel at the lineup, there was no *940 violation of the "Wade-Gilbert" rule.[9] Nevertheless, the Court must determine whether the identification procedure was impermissibly suggestive, and then whether the procedure had such a tendency to give rise to a substantial likelihood of irreparable misidentification that the in-court identification must be excluded. Simmons v. United States, 390 U.S. 377, 88 S.Ct. 967, 19 L.Ed.2d 1247 (1968).
The witness saw a man running from a distance of about 42 feet (R.T. 188) and identified the petitioner from having seen him that day (R.T. 178, 186). Shortly thereafter she gave a description to police (R.T. 184) describing him as a male Caucasian (R.T. 195-196). The next day she was shown five or six pictures and picked two which could possibly be the man she saw, but indicated that she would be more certain if she could see him in person, since that was only a picture (R.T. 185, 200).
The following day she attended a lineup of six persons who were all asked to speak and to walk back and forth. At her request, the six men were recalled and repeated the procedure. She had been seated in the front the first time, and went to the back and stood so that she could be more certain of the size (R.T. 203).
It was suggested that there was only one person with Mexican-American features in the lineup which made it unfair (Pet. p. 40), but at no time did the witness describe him as Mexican-American. She said that she would not know the nationality of the two whose pictures she picked out, nor of this petitioner (R.T. 200). It is not suggested that there were dissimilarities in height, weight or in any other respect. She merely was positive that he was the man she saw fleeing on the day of the robbery (R.T. 186).
There has been no showing that the lineup itself or the composition of the group of pictures was so unfair as to amount to a denial of due process. Foster v. California, 394 U.S. 440, 89 S. Ct. 1127, 22 L.Ed.2d 402 (1969). The witness had a clear view of the man she saw and there is no question but that the in-court identification had an independent origin. Riley v. Hocker, 441 F. 2d 552 (9th Cir. 1971); Plies v. United States, 431 F.2d 727 (9th Cir. 1970).
Finally, bearing in mind the considerations we are to apply to determine if any possible taint in the lineup has been purged,[10] the record reveals no discrepancy between the description given by the witness and the petitioner's actual physical description. She identified his picture, and never made a misidentification, nor failed to identify him. The lineup was held only one day after the offense, and there was an equally positive identification of this petitioner by the only other eyewitness, the victim. Clearly, this claim is without merit.
*941 COMPETENCY OF TRIAL COUNSEL
Counsel argues that trial counsel was so ineffective and incompetent that he reduced the proceedings to a farce and a sham, and deprived the petitioner of due process. He supports the contention by making several contentions:
1. Counsel's ignorance of law prevented a fair hearing on the prior conviction (R.T. 15). By originally denying it, he did not keep knowledge of the prior from the jury. Further, his lack of knowledge prevented the Judge from knowing pertinent facts which would have persuaded him of the invalidity of the prior.
2. Failure to challenge the identification procedures resulted in withdrawing a crucial defense (R.T. 20)
3. By testifying personally, counsel abandoned his client then and for the balance of the trial, including summation (R.T. 21)
4. Failure to prepare resulted in unavailability of crucial evidence (R.T. 23)
5. Failure to investigate the scene and interrogate his own witnesses impaired his ability to interrogate or cross-examine (R.T. 23)
6. Crucial defenses were withdrawn by his ignorance of the proper application of Miranda rights (R.T. 24)
The Court starts with the premise that counsel here in the habeas corpus matter must show that counsel at the trial was "so incompetent or inefficient as to make the trial a farce or a mockery of justice." Wright v. Craven, 412 F.2d 915, 917 (9th Cir. 1969); Dalrymple v. Wilson, 366 F.2d 183, 185 (9th Cir. 1966). Clearly, petitioner has failed to show such ineffectiveness that it would "shock[ing to] the conscience of the Court." Musgrove v. Eyman, 435 F.2d 1235 (9th Cir. 1971).
Most of the argument here is concerned with the proceedings concerning the validity of the prior conviction. Prior to trial, there had been numerous continuances and various hearings on a motion to suppress held in another Department of the California Superior Court. There was some confusion about whether there had actually been a hearing on the validity of the prior conviction, and it is true that petitioner's counsel at the time indicated his unfamiliarity with the exact procedure mandated for a "Coffey hearing."[11] However, a hearing was held, and counsel argued strenuously for the exclusion of the prior conviction.
Apparently he had been successful in some other case in having it declared invalid, for he attempted to convince both Judges involved in the 1970 trial that the matter of the invalidity of prior was res judicata. Thereafter, at the hearing he also attempted to urge the invalidity, pointing out that in 1961 there had been no inquiry of petitioner's competence to represent himself, and insisting that there has been no intention to waive counsel (R.T. 57). Contrary to the assertions in this petition, these facts were all brought to the attention of the State trial Judge in 1970.
Moreover, no harm was done by the fact that denial permitted the reading of the prior conviction to the jury, inasmuch as petitioner took the stand. It was then, of course, proper to use the fact of the prior conviction to impeach him as well as in argument by the prosecution. At any rate, there was extended discussion about the prior conviction, and the Court's previous holding about its validity also makes it clear that former counsel's attack or lack of it is no indication of ineffectiveness.
The same is true of the claim that counsel failed to attack the identification proceedings, here ruled to be valid. Failure to raise an issue which was unassailable is no proof of incompetence. See Zavala v. Craven, 433 F.2d 335 (9th Cir. 1970).
*942 So far as the attorney himself testifying, the Court cannot see that this fact resulted in abandonment of petitioner for the balance of the trial, including the summation, as is claimed. It is true that there was no one by petitioner's side with whom he could consult during counsel's testimony, but although the record may show this to have been poor or careless trial tactics, it does not amount to plain or constitutional error. United States v. Cox, 439 F.2d 86 (9th Cir. 1971).
Next, it is said that counsel failed to interview or subpoena records early enough to prove petitioner's alibi that he was in a different part of the city at the time of the robbery. The witness in question testified that she recognized petitioner; he had been in three or four times to inquire about a claim and she particularly recalled a conversation the second time petitioner was there (R.T. 322). After six months, all records are stored in San Francisco.
Nothing in the testimony or otherwise presented to the Court indicates that if the file were produced it would have any notation about visits by petitioner or any other claimants. Apparently, she told petitioner that no payment could be made until a report or claim was filed by the insured, and no such claim had been filed at that time, whenever it was. Rather than being remiss, counsel seemed to be rather clever in creating an impression that the conversation took place on the day in question but could not be verified through no fault of his, but through the filing procedure involved.
Point 4 raises conclusory allegations that the credibility of the key witnesses was diminished as a result of lack of preparation by counsel. Although it is claimed that counsel's interview with witnesses was brief and recent, petitioner does not show how an earlier or more extended interview would have strengthened the credibility matter. Nor is there any basis for the claim that the attorney failed to visit the scene. On the contrary, counsel prepared and introduced diagrams into evidence (R.T. 114, 129) which he used to attempt to discredit several witnesses. He was expressly concerned with showing that the two witnesses, Martinez and Roberts, who saw and followed petitioner's car missed some very important facts. They could not identify the man running, and from their position they never actually saw that man enter the car they followed (which was admittedly the petitioner's).
Finally, there is no merit in the argument that counsel's unfamiliarity with Miranda resulted in withdrawing a crucial defense. Counsel did in fact try to keep out the testimony that petitioner had said he had the car with him all day but actually this was a matter of credibility. Petitioner denied having made the statement (R.T. 471), but later admitted it was possible he might have said it in a different connection (R.T. 480). In any event, even had there been a failure to object to the statement, that would not have been proof of counsel's incompetence. Hill v. Nelson, 423 F.2d 167 (9th Cir. 1970); Bates v. Wilson, 385 F.2d 771 (9th Cir. 1967).
It is interesting to note that petitioner made no objection to his attorney at trial or thereafter, although his contentions concerning the 1961 trial involved his belief that counsel was ineffective, as pointed out by respondent (Resp. p. 22). It is not enough that in afterlight it appears that some argument might have been made or position taken which might have produced different results. Kreiling v. Field, 431 F.2d 502 (9th Cir. 1970).
In short, counsel represented his client ably and vigorously as revealed by his cross-examination of witnesses, presentation of the alibi defense, various motions and strenuous arguments to the Court and to the jury. The Court finds that the petitioner did receive effective aid of counsel in the *943 preparation and trial of the case in accordance with the standards set forth in Brubaker v. Dickson, 310 F.2d 30, 37 (9th Cir. 1962).[12]
NOTES
[1] In that case Number 241-778, the prior felony conviction which has been attacked in connection with its use in the 1970 trial, the defendant (petitioner here) was convicted of violating Penal Code § 459 (burglary). The contention is made that the conviction was invalid because the defendant had been denied the assistance of counsel in violation of the Sixth Amendment.
[2] Counsel particularly stresses Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963), decided six months after the opinion affirming the 1961 conviction in People v. Hernandez, 209 Cal.App.2d 33, 25 Cal.Rptr. 640 (1962). He also mentions Carnley v. Cochran, 369 U.S. 506, 82 S.Ct. 884, 8 L.Ed.2d 70 (1962); Pate v. Robinson, 383 U.S. 375, 86 S.Ct. 836, 15 L.Ed.2d 815 (1966) and Boyd v. Dutton, 405 U.S. 1, 92 S.Ct. 759, 30 L.Ed.2d 755 (1972). The latter two have no connection with the facts of this case and merit no further discussion.
[3] Reporter's Supplemental Transcript, May 19, 1961, pp. 3-10:
MR. MEAD: Your Honor, I have talked to the defendant within the last twenty minutes. The defendant advises me, your Honor, that he does not desire the Public Defender's office to represent him. I think it's his intention, your Honor, if the Court will not appoint an attorney for him, to represent himself, but he would like a continuance for that purpose.
THE COURT: The Court is not agreeable to a continuance, Mr. Hernandez. You have had plenty of time to get this case ready for trial and the witnesses are present. The Court strongly recommends that you have the benefit of an attorney. The Court cannot appoint another attorney for you. If you do not have money or property with which to employ
THE DEFENDANT: Well, your Honor
THE COURT: to employ an attorney, why, the Court strongly recommends that you have your present attorney, in whom the Court has great confidence. I believe you have a very excellent attorney.
THE DEFENDANT: I have nothing against Mr. Mead, your Honor, it's just that I feel he isthe Public Defender's office is overburdened with cases. The man cannot properly represent me or devote his time.
THE COURT: He can represent you far better than you can represent yourself, the Court will assure you of that.
THE DEFENDANT: I would like the Court to appoint me an attorney.
THE COURT: The Court cannot do that. The Court does not have the authority to do that.
THE DEFENDANT: I have some notes here. 987, Penal Code, authorizes the Judge to appoint a private effective counsel under grounds of conflict of interests or any other reason.
THE COURT: Well, there is no conflict of interests and the Court just assures you now that he does not have the authority to appoint another counsel for you. That's why we have Public Defenders. When you are given the benefit of a Public Defender, the Court does not have the power to appoint anyone else for you. The Court strongly recommends that you
THE DEFENDANT: I would like to dismiss the Public Defender under Section 284.
THE COURT: You may dismiss him if you like, but the Court advises you against it.
THE DEFENDANT: And I would also like to state that I am standing mute and I am not being represented by counsel, and also that I ask for a continuance in order
THE COURT: The Court is going to deny a continuance, Mr. Hernandez. We are all ready for trial. You have had plenty of time to get prepared for trial and you are in custody and the Court does not want to put this over for a month or six weeks and leave you in custody without an attorney.
THE DEFENDANT: All right.
THE COURT: You still wish to represent yourself, do you?
THE DEFENDANT: I merely state that I wish a private attorney and I don't have the means and I do not wish to be represented by the Public Defender.
THE COURT: Well, the Court states he cannot give you a private attorney. The Court is not satisfied that the Public Defender should be relieved in this matter. The Court doesn't feelhave you ever had any legal training?
THE DEFENDANT: No, I haven't.
THE COURT: The Court doesn't feel that you are in a position to
THE DEFENDANT: There are some aspects of this case which must be investigated, I feel, and an attorneyI mean, if we are to have a semblance of justice, I must have a prepared case and
THE COURT: Do you have the funds with which to employ a private attorney?
THE DEFENDANT: I do not.
THE COURT: Well, the Court will not relieve the Public Defender.
MR. MEAD: May I make this statement, your Honor: From what I know of the case, the People's case, I don't think there would be more than probably one civilian witness and maybe one police officer. There are not a lot of witnesses in court on this case. . . .
THE COURT: Supposing you were granted a continuance, Mr. Hernandez, what would you do in the meantime to be better prepared for trial?
THE DEFENDANT: Well, I would try to get an attorney to take interest in the case.
THE COURT: Well, you say you don't have funds with which to do that.
THE DEFENDANT: That is correct, I have no funds, but feel that I am not being properly represented.
. . . . RECESS . . . .
THE COURT: Mr. Hernandez, the Court is reconsidering your motion to relieve the Public Defender and for a continuance. Now, if the Court continues this matter to next Wednesday, will that give you enough time to be prepared for trial with or without an attorney?
THE DEFENDANT: You see, your Honor, the only reason for a continuance was that my original plea was to get a private attorney to represent me. I dismissed the Public Defender, however, that was denied and the continuance was in the hope of interesting a private attorney. However, I have no funds and I don't know any private attorneys, so I don't see
THE COURT: What would you like to have the Court do?
THE DEFENDANT: Then I withdraw my asking for a continuance.
THE COURT: And you still, then, wish to proceed without an attorney, or do you wish the Public Defender to remain in to represent you?
THE DEFENDANT: I would proceed without an attorney since I have dismissed the Public Defender.
THE COURT: Well, the Court hasn't dismissed him so he's still of record, but if you wish to proceed without an attorney, while the Court strongly advises against it, as he did this morning, because the Court doubts very much that you are familiar enough with the proceedings and procedures and the defenses available to you and the penalties involved and the matter of empaneling a jury, and so forth, doubts that you are personally skilled enough to well represent yourself, but if you yet want the Public Defender relieved and you want to proceed as your own attorney, the Court will permit you to do so and will relieve the Public Defender.
THE DEFENDANT: Let me state my position. I quite realize the importance of having an attorney, That is the purpose for my asking for a private attorney appointed by the Court, and I don't wish to proceed without counsel, however, my statement as to the dismissal of the Public Attorney still stands.
. . . (Hands him transcript and information)
THE COURT: Do you desire any continuance now, Mr. Hernandez?
THE DEFENDANT: I am without counsel now, is that correct?
THE COURT: That is correct, and the Court has no power to appoint anyone for you.
THE DEFENDANT: I understand, your Honor, by
THE COURT: You have been talking to too many of these jailhouse lawyers, but the Court tells you as a matter of law the Court does not have the authority to appoint an attorney for you now other than the Public Defender, and he has done that and you relieved him.
THE DEFENDANT: May I justNo. 987 of the Penal Code authorizes the Judge to appoint private effective counsel
THE COURT: You may.
THE DEFENDANT: on a conflict of interests or any other reason.
THE COURT: You may employ private counsel. The Court is not denying you that right. If you can get private counsel, the Court would be very happy.
THE DEFENDANT: The Court may appoint private counsel.
THE COURT: The Court may appoint private counsel if he does not have a Public Defender, but we do have a Public Defender in this County and the Court appointed one for you, an excellent one, and it was your request to have him relieved and the Court has relieved him. . . . Continued to May 24, 1961."
[4] Reporter's Transcript May 24, 1961 pp. 59-60:
THE COURT: . . . If you recall, the Court has continuously urged you to accept the services of counsel.
MR. HERNANDEZ: I agree with you. That's exactly the motion I have made numerous times, requesting counsel. And
THE COURT: The Court has told you, you have a perfect right to have one and you can get anybody you can get. The Court informed you previously that having appointed the Public Defender for you, the Court has no authority to appoint a private attorney for you.
MR. HERNANDEZ: Then you are saying that 987a is void in this case.
THE COURT: Under the facts of this matter so far, yes. The Court has complied with the Code section, has appointed a counsel for you.
MR. HERNANDEZ: I do not consider the Public Defender as effective counsel, your Honor.
THE COURT: Well, now, you are not the judge of that. The Court and the Government feels that he is.
MR. HERNANDEZ: Will the Court consider the grounds that the Public Defender hasI have been up there about nine weeks in the County Jail and the Public Defender has come down and talked to me briefly for about five minutes. However, the alarm bell rang which signals the dinner hour and he left before he could even discuss the case. He was back on another briefanother occasion for approximately ten minutes, and as far as that isas far as, I mean, constituting a defense in a felony case, I can't buy it. He has an overload of I don't know how many cases, but every time I see him he's got a stack so high.
THE COURT: You will probably find that private counsel have very heavy overloads, also.
MR. HERNANDEZ: But at least he could devote time and effort to my case.
THE COURT: Well, there is no question but what the counsel the Court appointed for you would devote all the time that was necessary to give you every representation that you could possibly have.
[5] Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 1023, 32 L.Ed. 1461 (1938).
[6] It is not disputed that Petitioner's car was used by the robber. The defense claimed that an acquaintance had borrowed the car the morning of the crime and had returned it later that day. Thus the contention was advanced that although the car may have been involved in the escape, petitioner was not.
[7] It is noted that the actual trial, beginning with the empanelment of the jury, took six days. The jury deliberated only one and one-half hours. (Clerk's transcript on appeal 2d Crim. 10809)
[8] Penal Code § 213; Minutes of 1970 trial, Case No. AOO 490, January 12, 1971; Reporter's Transcript on Appeal, pp. 552-553; Clerk's Transcript on Appeal, p. 56.
[9] Gilbert v. California, 388 U.S. 263, 87 S.Ct. 1951, 18 L.Ed.2d 1178 (1967); United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967).
[10] To see if a pre-trial identification was "impermissibly suggestive" or sufficiently purged of the primary taint, we must consider
(1) the manner in which the pretrial identification was conducted;
(2) the witness' prior opportunity to observe the alleged criminal act;
(3) the existence of any discrepancies between the defendant's actual description and any description given by the witness before the photographic identification;
(4) any previous identification by the witness of some other person;
(5) any previous identification of the defendant himself;
(6) failure to identify the defendant on a prior occasion; and
(7) the lapse of time between the alleged act and the out-of-court identification.
United States v. Wade, 388 U.S. 218, 241, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967).
[11] People v. Coffey, 67 Cal.2d 204, 60 Cal.Rptr. 457, 430 P.2d 15 (1967).
[12] "This does not mean that trial counsel's every mistake in judgment, error in trial strategy, or misconception of law would deprive accused of a constitutional right. Due process does not require `errorless counsel, and not counsel judged ineffective by hindsight, but counsel reasonably likely to render and rendering reasonably effective assistance.' Determining whether the demands of due process were met in such a case as this requires a decision as to whether `upon the whole course of the proceedings,' and in all the attending circumstances, there was a denial of fundamental fairness; it is inevitably a question of judgment and degree."
Brubaker v. Dickson, 310 F.2d at 37 (9th Cir. 1962).
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967 F.2d 585
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.Timothy E. DESS, Petitioner-Appellant,v.Jack MCCORMICK, Respondent-Appellee.
No. 91-35892.
United States Court of Appeals, Ninth Circuit.
Submitted May 26, 1992.*Decided June 2, 1992.
Before FARRIS, DAVID R. THOMPSON and FERNANDEZ, Circuit Judges.
1
MEMORANDUM**
2
Montana prisoner Timothy Dess challenges the district court's dismissal of his pro se habeas corpus petition under 28 U.S.C. § 2254 alleging that his prison sentence was incorrectly calculated. We review for clear error the district court's factual determination that Montana prison authorities did not miscalculate Dess's sentence. See United States v. Silverman, 861 F.2d 571, 576 (9th Cir.1988). We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
3
Dess argues that Montana prison authorities miscalculated his sentence when they corrected their previous erroneous credit of seven months and eleven days for time served while Dess was free on bond.1 Dess alleges that in correcting the error, prison officials inadvertently added seven months and eleven days to his sentence twice. A review of the record reveals, however, that no such error was made.
4
There is no basis for concluding that the district court committed clear error in dismissing Dess's petition. We affirm.2
5
AFFIRMED.
*
The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a); 9th Cir.R. 34-4
**
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3
1
Dess has previously argued that credit for time free on bond is mandated by Montana statute and the federal constitution. This argument has been rejected by the Montana Supreme Court, Dess v. Eighth Judicial District Court, No. 89-063, order (Mont.S.Ct. March 23, 1988), as well as by this court, Dess v. Eighth Judicial District Court, No. 90-35073, unpublished memorandum disposition (9th Cir. Oct. 11, 1990)
2
Dess's motion for default judgment is denied
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No. 91-236
IN THE SUPREME COURT OF THE STATE OF MONTANA
1991
THE STATE OF MONTANA,
Plaintiff and Respondent,
-vs-
WILLIAM NELSON KOWALSKI,
Defendant and Appellant.
APPEAL FROM: District Court of the Nineteenth Judicial District,
In and for the County of Lincoln,
The Honorable Robert S . Keller, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Stephen J. Nardi, Sherlock & Nardi, Kalispell,
Montana.
For Respondent:
Marc Racicot, Attorney General, Helena, Montana;
Micheal S. Wellenstein, Assistant Attorney General,
Helena, Montana; Scott B. Spencer, County
Attorney, Libby, Montana.
Submitted on briefs: October 31, 1991
Decided: March 5 , 1992
Clerk
Justice Fred 3 . Weber delivered the Opinion of the Court.
Following jury trial in the Nineteenth Judicial District
Court, Lincoln County, Montana, the defendant, William Kowalski
(Kowalski) was convicted of two counts of felony incest in
violation of § 45- 5- 507, MCA, for sexual contact with his daughters
M.K. and C.K. Kowalski appeals. We affirm.
The determinative issues are restated as follows.
1. Did the court err in ruling that if Kowalski introduced
letters M.K. had written, then it would allow the State to disclose
circumstances surrounding the communication?
2. Did the court abuse its discretion by prohibiting Kowalski
from using extrinsic evidence, on the issue of physical assault, to
impeach C.K.'s testimony?
3. Did the court abuse its discretion by prohibiting Kowalski
from using extrinsic evidence on the issue of physical assault to
impeach Bushfield's testimony?
In April 1989, C.K. moved from Missouri to Eureka, Montana to
live with her father, William Kowalski, and her sister, M.K. M.K.
and C.K. testified that after C.K. arrived, Kowalski would have the
girls undress to their waist or place h i s hands under their
clothing, and fondle their breasts. They further testified that
Kowalski measured their breasts, recorded these measurements on a
door frame in his bedroom, and commented on their shape and
development. Additionally, Kowalski painted a star on C.K.'s naked
breast, and attempted to cast a mold of his daughters' breasts with
"plaster-".
The girls related this conduct to their brother Benjamin who
came to Eureka in November 1989 to stay with M.K. and C.K. while
Kowalski was in Belgium. After listening to the victims, observing
them, and seeing the measurements on Kowalski's door frame,
Benjamin drove the victims to Missouri. There they reported
Kowalski's conduct to Missouri officials.
On February 7, 1990, the State of Montana charged Kowalski
with incest for repeated sexual contact with his daughters M.K. and
C.K. from June 1989 through November 1989. M.K. and C.K. were 13
and 15 years old at the time. On July 11, 1990, pursuant to a plea
agreement, Kowalski pled guilty to felony assault. The District
Court accepted this plea on the condition that Kowalski complete a
sex offender examination. Kowalski failed to complete the sex
offender examination, thus the court allowed him to withdraw his
guilty plea, and the case proceeded to trial. At trial,
Kowalski testified that he only measured the victims' bustlines
while they were fully clothed. Further, he stated that he painted
a star on C.K.'s breast as a joke, at the child's insistence.
Finally, Kowalski argued that the girls fabricated the story of
sexual touching in order to escape his physical and emotional
abuse. Kowalski testified that due to post traumatic stress, he
would often hit and yell at his children.
I
Did the court err in ruling that if Kowalski introduced
letters M.K. had written, then it would allow the State to disclose
circumstances surrounding the communication?
M.K. testified at trial that she was afraid of Kowalski. In
3
cross-examination, Kowalski attempted to impeach M.K.'s claim of
fear and undermine her credibility by introducing letters M.K. sent
to Kowalski from Missouri. M.K. sent these letters after the
defendant pled guilty to felony assault.
The court ruled that if Kowalski introduced these letters, he
would open the door for the State to explore circumstances
surrounding the communication. At the time M.K. wrote to Kowalski
she was in Missouri and he was in Montana. He had pled guilty to
felony assault based on his sexual contact with the victims and was
awaiting sentencing. Thus Kowalski posed no threat to M.K. or C.K.
at the time his daughter wrote the letters. As a result of this
ruling, Kowalski withdrew his request to introduce the letters.
Kowalski contends the court violated Rule 410, M.R.Evid., by
ruling that the introduction of M.K.'s letters required full
disclosure of the facts underlying Kowalski's prior plea. Under
Rule 410, evidence of guilty pleas, later withdrawn, and statements
made during pleading are inadmissable in criminal trials except for
impeachment purposes. Kowalski relies on State v. Hanson (1981),
194 Mont. 197, 204, 633 P.2d 1202, 1207, where this Court citing
Commission Comments stated:
[Rule 4101 allows an accused to offer to plead
guilty...or to withdraw such plea without either action
being used against him in any subsequent trial. This is
intended ... to allow highly prejudicial evidence to be
excluded under considerations that the reasons for
offering to plead or withdrawing pleas of guilty ...
would
not be understood by a jury and would almost preclude a
fair trial.
Kowalski contends the court's ruling denied him a fair trial by
forcing him to choose between effectively cross-examining M.K. and
4
exposing the jury to highly prejudicial statements made during
pleading.
The State contends that the trial court's ruling was proper.
In United States v. Martinez (2nd Cir. 1985), 775 F.2d 31, 37, the
court allowed the prosecution to introduce prejudicial evidence to
rehabilitate the credibility of a witness during re-direct. The
court held:
. . . [I]t is well settled that a cross-examination
attacking a witness's credibility and character will open
the door to redirect examination rehabilitating the
witness. Evidence whose probative value might not be
thought to outweigh its prejudicial effect if offered on
direct examination may well be admitted during redirect
examination "for the purpose of rebutting the false
impression which resulted from ... cross examination."
[Citations omitted.]
We agree with the State and conclude that allowing evidence of
guilty pleas under the Martinez analysis is consistent with Rule
410. Here, Kowalski intended to introduce the letters to impeach
M.K. and attack her credibility. Had the court suppressed the
circumstances surrounding the letters while allowing Kowalski to
use the letters to impeach M.K., it would have misled the jury. We
conclude the court properly ruled that if the letters were
introduced, a full disclosure of the circumstances surrounding
Kowalski's guilty plea was necessary for the jury's proper
evaluation of the evidence.
We hold that the court correctly determined that if Kowalski
impeached M.K. with letters she mailed to Kowalski, then the State
could disclose the circumstances surrounding the guilty plea.
I1
Did the court abuse its discretion by prohibiting Kowalski
5
from using extrinsic evidence on the issue of physical assault to
impeach C.K.'s testimony?
At trial, C.K. testified that she was afraid of Kowalski, but
he never struck her. Further, C.K. denied telling anyone that
Kowalski had struck her. Subsequently, Sarah Bushfield, a friend
of C.K., and Detective Vessel, of the Jefferson County, Missouri
Sheriff's Department, both offered opinion testimony that C.K. was
truthful, without objection on the part of the defendant.
On cross-examination, Bushfield was asked whether C.K. said
that Kowalski had struck her. Bushfield responded tlno.tl that
At
point, Kowalski attempted to attack C.K.'s credibility with a prior
out of court statement Bushfield made to officers during the
investigation. Bushfield previously told officers that Kowalski
had struck C.K. in the ribs. The State objected to Kowalski using
extrinsic evidence to impeach C.K. on the collateral issue of
physical abuse.
Later, during cross-examination of Detective Vessel, Kowalski
once again attempted to impeach C.K. on the issue of physical
abuse. Vessel was asked whether C.K. admitted being "hit" by
Kowalski. The State again objected to Kowalski's using extrinsic
evidence to impeach C.K. on the collateral issue of physical abuse.
The court sustained both objections. It ruled that the issue
of Kowalski's physical abuse of the children was collateral to the
issue of sexual abuse. Thus, Kowalski was improperly impeaching
C.K. on a collateral issue. In each instance Kowalski submitted an
offer of proof.
Admitting or refusing evidence lies within the sound
6
discretion of the trial judge. State v. Rudolph (1989), 238 Mont.
135, 142, 777 P.2d 296, 301. Thus, the rulings of the District
Court will be upheld unless Kowalski proves the court abused its
discretion by refusing the testimony. Here we conclude the court
did not abuse its discretion in excluding the contested testimony.
First, Kowalski contends the District Court should have
admitted the extrinsic evidence to show C.K.'s bias and motive to
fabricate the sexual assault. Here, the record reflects that the
jury had overwhelming evidence from which to conclude that Kowalski
physically abused his children. Kowalski testified that he slapped
and yelled at the children. M.K. stated she was afraid of her
father, and that he had hit her and C.K. Kowalski's son, Benjamin,
testified Kowalski hit and yelled at M.K., C.K. and himself.
Benjamin's wife Salina Echolt, testified Kowalski was violent with
the children. Finally, although C.K. testified that her father did
not hit her, she did testify that she was afraid of him and that he
hit M.K.
Given the amount of evidence indicating that Kowalski had
previously "hit*'C.K., her testimony to the contrary is of little
consequence. Clearly the jury had sufficient evidence to conclude
that the girls had motive to fabricate the sexual fondling in order
to escape the physical abuse. Accordingly, the court did not abuse
its discretion in refusing to admit this testimony to show C.K.'s
bias and motive to fabricate.
Next, Kowalski contends that the testimony was properly
admissable to attack C.K.'s credibility. Here, under Rule 608(b),
M.R.Evid., Kowalski is not allowed to introduce extrinsic evidence
7
of specific instance of C.K. I s conduct. Rule 608(b), M.R.Evid.
states:
Specific instances of the conduct of a witness, for the
purpose of attacking or supporting the witness'
credibility, may not be proved by extrinsic evidence.
They may, however, in the discretion of the court, if
probative of truthfulness or untruthfulness, be inquired
into on cross-examinations of the witness...
Under Rule 608(b), Kowalski could, at the court's discretion,
introduce C.K.'s prior statements in the course of cross-
examination of C.K. in order to attack her credibility. Here,
Kowalski chose to introduce these statements through other
witnesses instead of during his cross-examination of C.K. Thus,
under Rule 608(b), the court did not abuse its discretion in
excluding Kowalski's questioning of Bushfield and Vessel.
Next, Kowalski contends the court should have admitted the
evidence under Rule 613(b), M.R.Evid., which allows extrinsic
evidence of a witness's prior inconsistent statement. The State
contends these statements regarding physical abuse were collateral
to the charge of incest and the court correctly prohibited Kowalski
from using extrinsic evidence of prior inconsistent statements to
impeach C.K. on this collateral issue.
The State and the trial court improperly addressed the issue
of collateral matters. A s stated in Cooper v. Rosston (1988), 232
Mont. 186, 756 P.2d 1125, the rule limiting impeachment of
witnesses on collateral matters was abolished in favor of a
relevancy analysis under Rules 401 and 403, M.R.Evid. Citing
Commission comments, CooDer stated:
The Commission believes that the limitation of
impeachment by Rule 401, defining relevant evidence as
8
including impeaching evidence, and Rule 403, allowing the
court to exclude relevant evidence if its probative value
is outweighed by prejudice, confusion, waste of time,
will allow the same result to be reached through a more
flexible means than currently used with the collateral
matters rule. Therefore, Section 93-401-25, R.C.M. 1947
[superseded], (to the extent that it is concerned with
collateral matters) and case law statinq the collateral
matters rule are abolished in favor of the relevancy
aQQroach. (Emphasis supplied.)
CooDer, 232 Mont. at 191, 756 P.2d 1128. While the District Court
applied the collateral matters rule instead of using the relevancy
analysis, it did not abuse its discretion in excluding this
evidence under Rule 401, M.R.Evid.
Rule 401, M.R.Evid., defines relevant evidence as evidence
which tends to make the existence of any fact at issue more or less
probable and may include evidence relating to a witness's
credibility. Rule 403, M.R.Evid., excludes relevant evidence if
its probative value is substantially outweighed by the danger of
unfair prejudice, confusion of the issues, or misleading the jury.
In State v. Hammer (1988), 233 Mont. 101, 759 P.2d 979, this
Court upheld the trial court's decision to exclude credibility
evidence using Rules 401 and 403, M.R.Evid. In that case, the
defendant attempted to introduce evidence of an assault victim's
prior traffic offenses and misdemeanor possession charges. The
Court held that: "the evidence in question does not tend to make
any fact at issue in this action more or less probable than that
fact would be without the evidence." Rule 401, M.R.Evid. Hammer,
233 Mont. at 111, 759 P.2d at 985. While Hammer raised the issue
of self-defense, the Court concluded this evidence failed to make
the defendant's assault more or less probable. Further, evidence
9
of the victim's criminal conduct did not reflect on the
truthfulness of his testimony regarding the assault. Thus,
although the nature of the victim's prior crimes was not highly
inflammatory, the probative value of the evidence did not exceed
its prejudicial effect.
Similarly, in this case, we conclude that evidence of Kowalski
striking C.K. fails to make it more or less probable that he had
sexual contact with M.K. and C.K. Likewise, such evidence does not
reflect on the credibility of C.K.'s testimony regarding the sexual
contact. Thus we conclude the trial court did not abuse its
discretion in excluding the evidence under a Rule 401, M.R.Evid.,
analysis.
In addition, while 16 years old at the time of trial, C.K. had
a "borderline IQ" and functioned at around an 11 or 12 year old
level. This is an additional factor which the court could properly
consider in exercising its discretion.
We hold that the District Court did not abuse its discretion
by prohibiting Kowalski from using extrinsic evidence, on the issue
of physical assault, to impeach C.K.
I11
Did the court abuse its discretion by prohibiting Kowalski
from using extrinsic evidence, on the issue of physical assault, to
impeach Bushfield's testimony?
Finally, Kowalski contends Bushfield's prior inconsistent
statement regarding Kowalski striking C.K. in the ribs, was
properly admissible to attack Bushfield's credibility. As with the
previous issue, we point out that evidence of Kowalski's physical
10
abuse of C.K. does not make it more or less probable that he
sexually abused the victims. Kowalski failed to prove the court
abused its discretion in excluding the evidence. Thus, we hold the
court did not abuse its discretion by prohibiting Kowalski from
using extrinsic evidence, on the issue of sexual assault to impeach
Bushfield's testimony.
Af finned.
We Concur:
--4--/e++,p-q
/
Chief JusticeA/\
Justices
11
Justice Karla M. Gray, concurring in part and dissenting in part.
I concur in the opinion of the majority as to the first issue.
I must respectfully dissent from that opinion on issue two, which
relates to the important question of evidence impeaching the
credibility of an alleged incest victim. The majority's analysis
is confused, at best, and legally flawed; the extent of the flaw is
apparent even in the majority's statement of the issues, where the
evidence at issue is characterized as "extrinsic evidence, on the
issue of physical assault, ... In fact, the issue is whether
"extrinsic evidence of prior inconsistent statements of a witness"
is admissible under Rule 613(b), M.R.Evid. The majority opinion in
this case will create unnecessary confusion and uncertainty for
attorneys practicing on both sides of the minefield commonly called
criminal law, as well as €or the district courts of this state.
This case involves two charges of felony incest against
Kowalski for sexual conduct with his daughters M.K. and C.K. My
disagreement with the majority is only as to the evidence relating
to the charge of incest with daughter C.K. As is not uncommon in
sex offense cases of all types, this case boils down to the
credibility of the victim and the credibility of the defendant.
The importance of the credibility issue is clear from the fact that
the State put on several witnesses to opine, without objection, as
to C.K.'s truthfulness.
During her testimony, C.K. denied that her father had ever
struck her. She also denied ever telling anyone that he had done
so. The defense then sought to impeach C.R.'s credibility by
12
inquiring of the State witnesses who testified as to C.K.'s
truthfulness regarding certain statements C . K . made to them stating
that her father had struck her, statements clearly and
unequivocally inconsistent with her testimony at trial. As the
majority notes, the State objected to Kowalski using extrinsic
evidence to impeach C.K. on the collateral issue of physical abuse.
The court sustained the State's objections, ruling that the
physical abuse issue was collateral to the issue of sexual abuse
and, therefore, that the impeachment was improper. The majority
affirms the District Court on other grounds, purportedly rejecting
the "collateral matters rule" and premising its affirmance on Rule
401, M.R.Evid. It is my view that the majority herein did not
altogether succeed in divorcing itself from the collateral matters
analysis. As a result, the majority never addresses the
dispositive issue, whether the statements were Rule 613 prior
inconsistent statements admissible for impeachment of C.K.
Furthermore, the majority concludes that the evidence was properly
excludible under an erroneous Rule 401 relevancy analysis, relying
on an entirely inapposite case. The flaws in the majority approach
are addressed separately below.
The majority first raises Kowalski's contention that the
"extrinsic evidence" relating to physical abuse was admissible to
show C.K.'s bias and motive to fabricate the sexual assault. This
argument not having been made at the trial, it simply should not be
considered by this Court on appeal: the majority should have so
stated and moved on. However, rather than take that clear, direct
13
and correct approach to the issue, the majority sets off at some
length to insert the question of physical abuse into its opinion.
It then cavalierly concludes that C.K.'s testimony that her father
did not strike her "is of little consequence." This is the first
clear indication that the majority has totally missed the mark in
this case: the "consequence" of any part of a victim's testimony is
not for this Court to weigh, but for the jury to consider.
Further, this case has to do with credibility and with impeachment
evidence. It does not have to do with whether or not physical
abuse occurred, but with the consistency and, as a result, the
credibility of the statements of the victim C.K.
Next, the majority addresses Kowalski's argument that the
testimony was admissible under Rule 608(b), M.R.Evid. since
Kowalski concedes in his brief that the evidence was not admissible
under Rule 608(b), this issue should not have been addressed.
The majority finally seems headed in the right direction when
it raises Kowalskils contention that the evidence was admissible
under Rule 613(b), M.R.Evid., which allows extrinsic evidence of a
witness' prior inconsistent statement. Unfortunately, this is the
last mention the majority makes of Rule 613(b); the Rule, and
Kowalski's entire argument on prior inconsistent statements, are
never again taken up by the majority. Concluding correctly that
both the State and the trial court improperly addressed the issue
of vtcollateral
matters" and that the 'Icollateral matters rule" has
been abolished in favor of a relevancy approach, the Court proceeds
to make a confusing and incorrect application of Rule 401,
14
M.R.Evid., and the Hammer case. It never comes back to the Rule
613 argument, apparently unable to differentiate between the
concepts of extrinsic evidence, collateral matters, and prior
inconsistent statements.
An appropriate analysis under Rules 401 through 403 would
conclude that the testimony at issue in this case was relevant and
admissible. As the majority notes, relevant evidence “may include
evidence bearing upon the credibility of a witness. .. .‘I Rule
401, M.R.Evid. Indeed, in a trial of the type before us,
credibility is often the crucial determination to be made by the
jury. It is quintessentially clear to me that the testimony at
issue, relating to statements the victim made to the very witnesses
who supported her truthfulness, and directly at odds with testimony
she gave at trial, is relevant. Therefore, the evidence is
admissible pursuant to Rule 402, M.R.Evid.
Rule 403 cautions, of course, that even relevant evidence may
be excluded if its probative value is outweighed by one of the
considerations mentioned in the Rule. None of those considerations
is present here and, to its credit, the majority does not suggest
otherwise. In any event, given the overwhelming importance of
credibility in this case and, therefore, of other statements made
by the victim which conflicted with her trial testimony, it is
beyond me how the probative value could seriously be suggested to
be outweighed. I conclude that the evidence was relevant and
admissible under Rules 401 through 403, M.R.Evid.
Further, the majority‘s reliance on Hammer to buttress its
15
relevancy analysis is misplaced. In Hammer, the excluded evidence
was of an assault victim's prior traffic and misdemeanor offenses:
it was offered both to impeach the victim's credibility and, in
conjunction with a self-defense theory, to show the victim's
violent tendencies. We held in Hammer, and rightly so, that the
evidence was not relevant for either purpose: it did not reflect on
the truthfulness of the witness and did not relate in any way to
the probability of the assault against the victim having taken
place. For reasons unclear to me, the Court went on in Hammer to
reference Rule 403's balancing test and conclude that the
prejudicial effect of the evidence outweighed any probative value.
If the case before us were of the Hammer variety, I would
agree with the majority's analysis. The evidence at issue here,
however, is not even superficially related to the type properly
excluded in Hammer. Here we are faced with statements made by the
victim which directly conflict with her testimony at trial.
The majority completes its analysis of the issue by re-
evidencing its inability to divorce itself from the "collateral
matters" theory or to focus on the question of inconsistent
statements by concluding that evidence of Kowalski striking C.K.
"fails to make it more or less probable that he had sexual contact
with . .. C.K." The evidence was not offered to prove that the
physical contact occurred: that was not the "fact at issue" under
Rule 401, M.R.Evid. The evidence was offered to impeach the
credibility of the victim, as specifically authorized by Rule 401.
Under Rule 613(b), M.R.Evid., extrinsic evidence of a prior
16
inconsistent statement of a witness is admissible if certain
procedural safeguards are met. It is clear to me that the evidence
Kowalski attempted to introduce was, indeed, extrinsic evidence of
prior inconsistent statements by C.K. to the State's two witnesses.
The statements to them that her father had struck her were
undeniably inconsistent with her sworn testimony at trial that he
had never struck her: they were also inconsistent with her
testimony denying that she ever told anyone that he hit her. As
such, they constituted evidence going directly to C.K.'s overall
truthfulness. The evidence was atextrinsic" that Kowalski wanted
in
to introduce it through the witnesses to whom the inconsistent
statements had been made, rather than through the victim herself.
The Rule specifically allows for extrinsic evidence; the statements
were both "prior1'in time to the testimony given at trial by the
victim and "inconsistent1'with that testimony. I would hold that
the evidence was admissible under Rule 613(b), reverse and remand.
Justice Terry N. Trieweiler joins in the foregoing concurring
and dissenting opinion of Justice Karla M. Gray.
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546 N.W.2d 744 (1996)
In re LAWYERS PROFESSIONAL RESPONSIBILITY BOARD PANEL NO. 94-17.
C7-95-1666.
Supreme Court of Minnesota.
May 2, 1996.
*745 Michael J. McNamara, Henderson, Howard, Pawluk & McNamara, P.A., Brooklyn Center, pro se.
Craig Donald Klausing, St. Paul, for Lawyers Professional Responsibility Bd.
Considered and decided by the court en banc without oral argument.
OPINION
PER CURIAM.
In February of 1995, the Director of the Office of Lawyers Professional Responsibility (Director) issued appellant a private admonition pursuant to Rule 8(d)(2), Rules on Lawyers Professional Responsibility (RLPR), concluding that appellant's conduct in charging a client for time spent defending an ethics complaint brought by the client violated Minn. R. Prof. Conduct 1.5(a) and 8.4(d). Appellant appealed the admonition, a hearing was held before a Lawyers Professional Responsibility Board Panel (LPRB Panel), and the LPRB Panel affirmed the admonition. Appellant then appealed the LPRB Panel's affirmance of the admonition to this court, arguing that the LPRB Panel's decision was not supported by clear and convincing evidence because: (1) the LPRB Panel determination was legally and factually insufficient; and (2) the corresponding fact-finding body of the State of Wisconsin found no basis for discipline. We affirm.
Appellant was admitted to practice law in Minnesota on May 22, 1981, and currently practices in Minneapolis, Minnesota. He is also licensed to practice law in Wisconsin. In December of 1993, K.M. contacted appellant seeking advice regarding a land purchase in Wisconsin. K.M. signed a retainer agreement on January 11, 1994, which provided for a retainer fee of $500. The retainer agreement indicated that the $500 fee was to be applied toward appellant's hourly charge and reimbursement of expenses advanced on K.M.'s behalf and did not represent the total cost of appellant's representation of K.M.
Appellant spent over seven hours working on K.M.'s file between January 6 and January 20, 1994, and sent K.M. a billing statement dated February 1, 1994, reflecting charges of $915 with a balance due of $415 after the $500 retainer was applied. K.M. initially refused to pay the balance, alleging an oral agreement that limited appellant's fees to $500. Appellant denied the existence of any oral agreement and continued to bill K.M.
Based on this fee dispute, K.M. filed ethics complaints with the Minnesota Office of Lawyers Professional Responsibility and its Wisconsin counterpart, the Board of Attorneys Professional Responsibility (Wisconsin Board). Both complaints were dismissed. On July 20, 1994, the Director determined *746 that discipline was not warranted, and on November 1, 1994, the Wisconsin Board sent appellant a letter stating, "the facts presented do not constitute a basis to find a violation of the Rules set forth by the Supreme Court." On July 29, 1994, K.M. paid appellant $425.50, the full sum demanded, which included interest.
On November 7, 1994, appellant wrote a letter to K.M. demanding that K.M. pay additional fees in the amount of $540.93. The letter stated:
You should recognize that the billing statement balance due excludes any charge for my time in attempting to collect on the balance, which time included the many hours spent responding to your complaints to the three administrative bodies, and which time I am entitled to charge you for according to the express terms of our Retainer Agreement. If the above balance is not paid within 10 days of the date of this letter, I am going to add those attorney fee charges to the bill when it is turned out for collection. I estimate this will increase the collection amount by approximately $1,000.00, making the collection amount approximately $1,540.93 plus any additional interest.
While the letter says that the billing statement excluded any charges for time spent responding to the ethics complaints, in fact, the bill included $480 in charges for time appellant spent defending himself against the ethics complaint filed by K.M. with the Wisconsin Board.
As a result, K.M. made a second complaint to the Director and to the Wisconsin Board. On November 23, 1994, the Wisconsin Board wrote to appellant, informing him of K.M.'s second complaint. The Wisconsin Board's letter stated:
Pursuant to SCR 21.03(4) and SCR 22.07(2), you have a professional obligation to provide a written response to a grievance filed against you. That obligation is one of the conditions for the privilege of practicing law. It is inappropriate, therefore, to bill a client/complainant for the time necessary to respond. As you can well imagine, the filing of grievances would be chilled were an attorney able to bill for the cost of responding.
The letter also asked appellant to eliminate from the billing statement any amount charged for time spent responding to K.M.'s initial complaint.
On November 30, 1994, appellant wrote to the Director and the Wisconsin Board, claiming that the billing statement erroneously charged K.M. for time appellant spent responding to K.M.'s initial complaint due to an error with his firm's billing system. Appellant stated that the cover letter "at worst shows my intention not to charge for those services now but only if he did not pay the outstanding pre-termination balance." The letter also indicated that appellant would have "nothing more to do with [K.M.]."
The Director conducted an investigation and found that appellant's act of charging K.M. for time spent responding to the ethics complaint violated Minn. R. Prof. Conduct 1.5(a) (unreasonable fees) and 8.4(d) (conduct prejudicial to the administration of justice) and issued a private admonition to appellant. The record reflects that the Wisconsin Board took no further action against appellant after receiving the November 30 letter.
Two issues are presented for our review:
(1) Whether the conduct of appellant warrants the issuance of an admonition; and
(2) Whether this court should defer to Wisconsin's lack of disciplinary action with regard to appellant's conduct.
For this court to reverse the decision of the LPRB Panel, appellant must demonstrate that the LPRB Panel decision was clearly erroneous. In re Charges of Unprofessional Conduct against MDK, 534 N.W.2d 271, 272 (Minn.1995); In re Admonition issued to X.Y., 529 N.W.2d 688, 689-90 (Minn. 1995).
Appellant contends that his conduct does not warrant the issuance of an admonition. We disagree. The November 7, 1994, cover letter and accompanying billing statement clearly signify appellant's intention to charge K.M. for time appellant spent responding *747 to K.M.'s Wisconsin ethics complaint. While appellant gave an exculpatory explanation for the billing statement, the LPRB Panel was under no obligation to credit that explanation. See In re Disciplinary Action against Getty, 452 N.W.2d 694, 697 (Minn.1990). Charging a client for time spent responding to the client's ethics complaint is a violation of Minn. R. Prof. Conduct 1.5(a) and 8.4(d).
Further, appellant admits intending to charge K.M. for time spent responding to the ethics complaint in the event that K.M. did not pay the outstanding pre-termination balance. A threat to charge a client for time spent responding to ethics complaints has a chilling effect on the public's right to bring ethics charges and is therefore prejudicial to the administration of justice in violation of Minn. R. Prof. Conduct 8.4(d). See Appeal of Admonition Regarding A.M.E., 533 N.W.2d 849, 851 (Minn.1995) (concluding that panel's determination that attorney's conduct violated Minn. R. Prof. Conduct 8.4(d) was not clearly erroneous where attorney's abusive language relating to an ethics complaint was intended to intimidate the complainant and constituted interference with the disciplinary process). In addition, attempting to charge any fee for time spent responding to a client's charge of unethical conduct is inherently unreasonable and violates Minn. R. Prof. Conduct 1.5(a), which provides that a lawyer's fee shall be reasonable.
Appellant also urges us to dismiss the admonition because the "conclusion of [the] Wisconsin Board * * * that [appellant's] conduct was ethical should be dispositive" of this case. We find this argument of appellant's offensive. It is offensive because the record is clear that the Wisconsin Board did not conclude that appellant's conduct was ethical. The Wisconsin Board, while stating in its November 23 letter that it was inappropriate to bill a client for time spent responding to the client's ethics complaint, simply took no further action against appellant after receiving the November 30 letter. Because the Wisconsin Board did not take any formal action on K.M.'s second complaint, we need not determine whether deference would be appropriate.
Affirmed.
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215 B.R. 1004 (1997)
In re S.N.A. NUT COMPANY, Debtor.
S.N.A. NUT COMPANY, Plaintiff,
v.
The HÄAGEN-DAZS COMPANY, INC., Defendant.
Bankruptcy No. 94 B 5993, Adversary No. 96 A 1237.
United States Bankruptcy Court, N.D. Illinois, Eastern Division.
December 24, 1997.
*1005 James R. Figliulo, Chicago, IL, for Movant or Plaintiff.
Catherine Steege, Chicago, IL, for Defendant.
Arthur G. Simon, Trustee.
*1006 MEMORANDUM OPINION
ERWIN I. KATZ, Bankruptcy Judge.
This case comes before the Court on the Motion of the Defendant, The Häagen-Dazs Company, Inc. (hereinafter "HD"), for summary judgment, pursuant to Federal Rule of Bankruptcy Procedure 7056. For the reasons set forth herein, the Court denies the motion.
JURISDICTION
The Court has jurisdiction to entertain this matter pursuant to 28 U.S.C. § 1334(b) and General Rule 2.33(A) of the United States District Court for the Northern District of Illinois. It constitutes a non-core proceeding, but is otherwise related to the bankruptcy case under 28 U.S.C. § 157(c)(1).
FACTS
On March 4, 1994, five petitioning creditors filed an involuntary chapter 11 petition against S.N.A. Nut Company (hereinafter "S.N.A.") in the United States Bankruptcy Court for the Western District of Texas. On March 24, 1994, S.N.A. consented to the entry of an order for relief.
S.N.A. is an Illinois corporation, headquartered in Elk Grove Village, Illinois, with its principal place of business in Chicago. S.N.A. engaged in the business of buying, shelling, processing, and selling pecans and other nut products to industrial food producers. HD, a New Jersey corporation which primarily manufactures ice cream, was one of S.N.A.'s long time customers. S.N.A. manufactured nuts and confections that HD used to make ice cream. After the petition was filed, S.N.A. continued to operate as a nut processor.
In mid-October, 1994, S.N.A.'s secured lenders, known in this case as the Bank Group, refused the Debtor's request to finance S.N.A.'s operations for 1995. As a result, S.N.A. was forced to liquidate its assets. On October 24, 1994, S.N.A. and the Bank Group filed a joint reorganization plan (hereinafter the "Plan") and disclosure statement. Throughout November and early December, 1994, S.N.A. and the Bank Group amended the Plan and the disclosure statement. On December 6, 1994, the Court approved an amended disclosure statement. On December 10, 1994, S.N.A. mailed the amended disclosure statement, the Plan and balloting materials to the creditors. On January 12, 1995, the Court confirmed the Plan which calls for S.N.A. to cease operations, turn all S.N.A.'s assets into cash and distribute proceeds to the creditors.
In accordance with the Plan, S.N.A. continued operations, processing nuts for many months after the confirmation hearing. On February 28, 1995, S.N.A. filed the first of its two adversary complaints against HD. In the first adversary proceeding, S.N.A. alleged that it made nine shipments of pecans to HD between September 30, 1994 and November 30, 1994. HD admitted that it had not paid for seven post-petition shipments that it received, asserting that these shipments were made pursuant to a pre-petition one year supply contract dated February 18, 1994, and that Debtor breached the contract by rejecting it. As an affirmative defense and counterclaim, HD sought to recover damages for S.N.A.'s alleged breach of the contract as a setoff to S.N.A.'s claims. The Court determined that the contract was rejected under a general provision of the Plan which provided that all executory contracts that S.N.A. had not assumed or rejected at the time of the confirmation were deemed rejected. The Court concluded that HD's claim was "prepetition," and under 11 U.S.C. § 553(a), lacked the mutuality required to be a setoff against S.N.A.'s post-petition claim. (See HD's 402(M) Statement, ¶ 12);[1]In re S.N.A. Nut Co., 191 B.R. 117, 122 (Bankr.N.D.Ill. 1996). On December 4, 1996, the Court entered an Agreed Order resolving S.N.A.'s claims against HD in the first adversary proceeding and preserving S.N.A.'s claims in the second adversary proceeding. (See S.N.A.'s 402(N) Statement, ¶ 17).
*1007 On September 6, 1996, S.N.A. filed the second and instant adversary proceeding asserting HD's breach of contract as well as promissory estoppel claims against HD in the amount of $1,338,372.20. The complaint alleges that HD failed to perform under a series of oral sales contracts entered into prior to the confirmation hearing which required HD to purchase various types of specially manufactured goods. Of this series of contracts the last two were to expire by their own terms on December 31, 1995, which was subsequent to December 10, 1994, the date of the amended Plan, but prior to the date of the Confirmation Order of January 12, 1995. After researching its claim, S.N.A. made its demand on HD for damages. HD then moved the Court to dismiss the complaint for lack of jurisdiction or, in the alternative, for the Court's abstention. The Court found that jurisdiction over Debtor's complaint exists and declined to abstain, finding that the complaint "relates to" Debtor's bankruptcy estate, in that the outcome of the case affects the distribution to creditors under the Plan. In re S.N.A. Nut Co., 206 B.R. 495, 501 (Bankr.N.D.Ill.1997).
On June 27, 1997, HD filed this motion for summary judgment.
STANDARDS FOR SUMMARY JUDGMENT
Under Federal Rule of Civil Procedure 56(c) (made applicable by Federal Rule of Bankruptcy Procedure 7056), summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986); Matsushita Elect. Indust. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-86, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986); Trautvetter v. Quick, 916 F.2d 1140, 1147 (7th Cir.1990). The burden is on the moving party to show that there is no such factual dispute. Celotex, 477 U.S. at 322, 106 S.Ct. at 2552.
The party opposing the motion may not rest upon pleadings, allegations or denials. The response of that party must set forth in required filings specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553; Anderson, 477 U.S. at 248, 106 S.Ct. at 2510; Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356; Randle v. LaSalle Telecommunications, Inc., 876 F.2d 563, 567 (7th Cir.1989); Patrick v. Jasper County, 901 F.2d 561, 564-66 (7th Cir. 1990).
On summary judgment motions, inferences to be drawn from underlying facts must be viewed in the light most favorable to parties opposing the motion. Anderson, 477 U.S. at 255, 106 S.Ct. at 2513-14; Matsushita; Peerman v. Georgia-Pacific Corp., 35 F.3d 284, 286 (7th Cir.1994); Billups v. Methodist Hospital of Chicago, 922 F.2d 1300, 1302 (7th Cir.1991). However, a material factual dispute is sufficient to prevent summary judgment only when the disputed fact is determinative of the outcome under applicable law. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510; Howland v. Kilquist, 833 F.2d 639, 642 (7th Cir.1987).
The court should not "weigh the evidence." Anderson, 477 U.S. at 249, 106 S.Ct. at 2510-11; Illinois Bell Telephone Co. v. Haines and Company, Inc., 905 F.2d 1081, 1087 (7th Cir.1990). However, "[i]f evidence opposing summary judgment is merely colorable or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249, 250, 106 S.Ct. at 2510, 2511; Trautvetter, 916 F.2d at 1147. When 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 and summary judgment should be granted. Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356.
DISCUSSION
HD argues that S.N.A.'s breach of contract claims are barred by the doctrine of res judicata on the ground that S.N.A. did not assert or preserve those claims under the confirmed Plan. S.N.A. responds that a finding of res judicata is improper because this *1008 adversary proceeding and the confirmation proceedings do not share an identity of claims or an identity of parties. Next, S.N.A. argues that, even assuming, arguendo that the elements of res judicata exist, the Plan reserved the cause of action. Lastly, S.N.A. argues that HD is estopped from asserting the affirmative defense of res judicata by the Court's Order dated December 4, 1996.
I. Res Judicata
The doctrine of res judicata provides that final judgment on the merits of an action precludes the parties or their privies from relitigating claims that were or could have been raised in that action. Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 2427-28, 69 L.Ed.2d 103 (1981); D & K Properties Crystal Lake v. Mutual Life Ins. Co. of New York, 112 F.3d 257, 259 (7th Cir.1997); Shaver v. F.W. Woolworth Co., 840 F.2d 1361, 1363 (7th Cir.), cert. denied, 488 U.S. 856, 109 S.Ct. 145, 102 L.Ed.2d 117 (1988). "The doctrine of res judicata applies in the bankruptcy context." Crop-Maker Soil Serv. v. Fairmount State Bank, 881 F.2d 436, 439 (7th Cir.1989). Three requirements must be met for the doctrine of res judicata to apply: (1) an identity of the parties or their privies in both the prior and subsequent suits; (2) an identity of the cause of action in the two suits; and (3) a final judgment on the merits in the prior suit. Crop-Maker, 881 F.2d at 439; Matter of Energy Co-op., Inc., 814 F.2d 1226, 1230 (7th Cir.1987).
The doctrine of res judicata in the bankruptcy context is generally applied where a contested matter or an adversary proceeding arising in the bankruptcy proceeding provided an opportunity to litigate a claim. See MAI Systems Corp. v. C.U. Tech., Inc. (In re MAI Systems), 178 B.R. 50, 55 (Bankr.D.Del.1995). In this case, HD argues that the Plan confirmation hearing is the action, and that the Confirmation Order bars any claim by S.N.A. which could have been raised in the confirmation proceeding and which is not expressly reserved in the Plan.
The parties do not dispute that the third element is met and that this Court's Order of January 12, 1995 confirming the Plan constitutes a final judgment on the merits by a court of competent jurisdiction.[2] However, S.N.A. argues that neither identity of parties nor identity of claims exists between the confirmation hearing and this adversary proceeding.
A. Identity of Parties
The "[i]dentity of parties" element is satisfied where the parties in interest are, "persons whose interests are properly placed before the court by someone with standing to represent them." Republic Supply Co. v. Shoaf, 815 F.2d 1046, 1051 (5th Cir.1987). For the purposes of adjudication, a party in interest includes "all who are directly interested in the subject matter and who have a right to make defense, control the proceedings, examine and cross-examine witnesses and appeal from the judgment if an appeal lies." In re Justice Oaks II, Ltd., 898 F.2d 1544, 1550 (11th Cir.1990) (quoting 1 A. Freeman, A Treatise of the Law of Judgments § 430, at 936-37 (5th ed.1925)).
S.N.A. and HD are parties to this adversary proceeding. The debtor, S.N.A., is clearly a participant in the confirmation proceedings. It is also well established that all creditors of a debtor are parties in interest to bankruptcy confirmation proceedings. In re Justice Oaks II, Ltd., 898 F.2d 1544, 1551 n. 5 (citing 8 Collier on Bankruptcy, ¶ 3020.04 (15th ed.1989)). This Court on July 22, 1996 allowed HD to file a proof of claim against S.N.A.; therefore, HD is a creditor with a proof of claim in the bankruptcy estate.
S.N.A. argues that HD was not part of the confirmation proceedings because it had "successfully argued that it was not a party to the confirmation hearing and is not bound by the confirmation order." (See S.N.A.'s Mem. in Opp. to HD's Mot. for Summ. J. p. *1009 10). However, HD has not previously argued that it is not a party to the confirmation hearing. Instead, HD argued only that was unable to file its claim in a timely manner due to a lack of notice it. (See HD's 402(M) Statement, ¶ 14). The Court held that HD's proof of claim was deemed timely under the Plan and rejected S.N.A.'s assertion that HD was not a known creditor prior to the confirmation of the Plan.
Accordingly, HD is a known creditor of S.N.A. whose interests have been affected by the confirmation proceeding. Therefore, the element of identity of parties is fulfilled because S.N.A. and HD are the parties to this adversary proceeding and were also both parties to the confirmation hearing.
B. Identity of Causes of Action
As to the identity of causes of action, the Seventh Circuit has defined that element as follows: "Once a transaction has caused injury, all claims arising from that transaction must be brought in one suit or lost." Matter of Energy Co-op., 814 F.2d at 1226, 1230-31 (7th Cir.1987), cert. denied, 484 U.S. 928, 108 S.Ct. 294, 98 L.Ed.2d 254 (1987)(quoting Restatement (Second) of Judgments § 24 (1982)). Federal law defines a single cause of action as "`a core of operative facts' which gives rise to a remedy." Energy Co-op., 814 F.2d at 1231. In drawing a brighter line the Seventh Circuit has suggested that "two claims are one for the purposes of res judicata if they are based on the same, or nearly the same, factual allegations." Herrmann v. Cencom Cable Assocs., Inc., 999 F.2d 223, 226 (7th Cir. 1993). Thus the issue is not what effect the present cause of action might have had on the earlier one, but whether the same facts are involved in both cases, so that the present cause of action should have been asserted in the prior case.
The doctrine of res judicata has typically been applied where a prior contested matter or adversary proceeding, arising in a Chapter 11 proceeding, provided an opportunity to litigate a claim. MAI Sys. Corp. v. C.U. Tech., Inc. (In re MAI Sys. Corp.), 178 B.R. 50, 55 (Bankr.D.Del.1995). In this case, it is undisputed that there was no contested matter or adversary proceeding raising the underlying claims of S.N.A.'s complaint. However, HD asserts that the confirmation proceedings are identical to the breach of contract action.
In support of this concept, HD asserts "a Chapter 11 bankruptcy case encompasses all matters pertaining to S.N.A.-creditor relationship that [the debtor] or any creditors might raise to advance their interest in the proceeding." Kelley v. South Bay Bank (In re Kelley), 199 B.R. 698, 702 (9th Cir.BAP 1996); Sure-Snap Corp. v. State Street Bank & Trust Co., 948 F.2d 869, 874-75 (2nd Cir. 1991); see, Micro-Time Management Sys., Inc. v. Allard & Fish, P.C., 983 F.2d 1067 (Table), 1993 WL 7524 (6th Cir.) cert. denied, 510 U.S. 906, 114 S.Ct. 287, 126 L.Ed.2d 237 (1993) (Malpractice claim against Trustee's counsel should have been litigated in bankruptcy proceedings thus barred by res judicata); In re Varat Enterprises, Inc., 81 F.3d 1310 (4th Cir.1996)(res judicata bars objection to treatment of secured creditor in the plan where the order confirming the plan was based, in part, on the transaction at the core of the dispute presented by the objection.).
In Sure-Snap, the confirmed plan determined the validity of the claim and the amount to be paid to State Street Bank, Sure-Snap's pre-petition lender. Post-confirmation, Sure-Snap, filed a complaint against State Street and another bank alleging tortious banking practices and related lender liability theories. In particular, the complaint alleged that pre-petition, State Street had suddenly terminated Sure-Snap's line of credit, and forced the company into bankruptcy. This same claim had appeared in a disclosure statement. Id. at 871. The court emphasized the close relation between the allegations of the complaint, and the focus of Sure-Snap's plan of reorganization. Id. at 874-75. Further, all such allegations could have and should have been raised in determining the lender's claim. By providing for the validity and amount of the lender's claim in the plan, the debtor was barred by res judicata from relitigating the issue post-confirmation. Id.; accord, D & K Properties Crystal Lake v. Mutual Life Ins. Co. of New York, 1996 WL 224517 at *3 (N.D.Ill. *1010 1996), aff'd, 112 F.3d 257, 259 (7th Cir.1997) (parties agreed that elements of res judicata had been satisfied and in the Confirmation Order, the Court found that Defendant had not acted in bad faith in proposing a plan or in resetting the interest rate); Eubanks v. F.D.I.C., 977 F.2d 166 (5th Cir.1992) (holding that the lender liability claims of the debtor are precluded by res judicata); Matter of Howe, 913 F.2d 1138 (5th Cir.1990) (same); Heritage Hotel Limited Partnership I v. Valley Bank of Nevada, 160 B.R. 374 (9th Cir. BAP 1993) (same).
Similarly, In re Kelley dealt with a scenario wherein debtors alleged that the Bank failed to dispose of its collateral in commercially reasonable manner and failed to obtain debtors' consent before extending their loan agreement. 199 B.R. at 703. The charges and counter-charges were the subject of pre-confirmation negotiations which resulted in a compromise whereby the claim was allowed in a specified amount and the Bank changed its vote to an acceptance of the plan. The Kelley decision, however, turned on the sufficiency of the reservation of rights under the plan. The court held that the reservation was not sufficient for res judicata purposes.
HD is mistaken to the extent that it suggests that a confirmation order includes any claim by S.N.A. that could have been raised in the bankruptcy proceedings or the confirmation proceedings. This Court agrees with the court in MAI that the accurate rule is that any claim which must have been determined by, or should have been part of, the confirmation or other final judgment proceeding process, is barred by res judicata. See In re MAI Sys. Corp., 178 B.R. at 55.
In MAI, the court concluded that the Chapter 11 debtor's post-confirmation claims against a patent licensee, ex-employees and others for breach of contract and various torts were not barred by res judicata. Id. The court stated that none of the elements of res judicata had been satisfied. The court opined that there was a "threshold problem" regarding the application of res judicata. Id. The court noted that the claims had never been raised in either a contested matter or an adversary proceeding. To circumvent this "threshold problem" the defendant argued that the confirmation hearing was the action. Id. However, the court concluded that unlike the lender liability claims in Sure-Snap the claims in MAI were not integrally related to the reorganization plan. Id.
As in MAI, the cause of action in this case is not integrally related to the Plan of confirmation. This Court's Order confirming the Plan did not involve any facts remotely connected to the first cause of action.[3] The Sure-Snap and Kelley disputes centered on a loan and activities related to that loan. All of which led to a confirmation which dealt specifically with the loan activities.
A general rule that confirmation acts as an adjudication of any claim that could have been raised in the bankruptcy proceedings or the confirmation proceedings is without merit. There is considerable authority for the limited proposition that a plan of reorganization confirmation is binding on all parties to the plan with regard to all questions that could have been raised pertaining to the plan. See 11 U.S.C. § 1141(a); 5 L. King, Collier on Bankruptcy ¶ 1141.01, at 1141-5 (15th ed.1983); see also Varat, 81 F.3d at 1317; In re Weidel, 208 B.R. 848, 852 (Bankr.M.D.N.C.1997). That general principle does not dispose of the issue presented here. Confirmation of a Chapter 11 plan has three effects. First, section 1141(a) provides that the debtor issuing securities or acquiring property under the plan and any creditor or equity security holder or general partner in the debtor are bound by the provisions of the plan. See 11 U.S.C. § 1141(a). Second, section 1141(b) and (c) provide that, except as may be otherwise provided in the plan or in the order confirming the plan, confirmation vests all property of the estate in the debtor, and property dealt with by the plan *1011 is free and clear of all claims and interests of creditors, equity security holders, and general partners. See 11 U.S.C. § 1141(b), (c). Finally, plan confirmation discharges the debtor from all claims arising prior to the date of confirmation subject to certain exceptions. See 11 U.S.C. § 1141(d).
Nothing in the Bankruptcy Code or the legislative history suggests that confirmation of a plan was to have the effect of barring the debtor from pursuing undisclosed assets in the case.[4]See In re MAI Sys. Corp., 178 B.R. at 55-56 ("[O]nly creditors of a debtor have an obligation to determine and file claims."); Oneida Motor Freight, Inc., 848 F.2d at 421 (3rd Cir.1988) ("As the court acknowledges, no compulsory counterclaim statute or rule required [the debtor] to assert its claim in the bankruptcy proceedings.") (Stapleton, J., dissenting); In re Auto West, Inc., 43 B.R. 761, 763 (D.Utah 1984). Moreover, absent special circumstances, at a confirmation hearing the debtor's only obligation is to satisfy the standards outlined in 11 U.S.C. § 1129 as well as other applicable provisions of the Bankruptcy Code. In re MAI Sys. Corp., 178 B.R. at 55. Section 1129 does not require the debtor to include every dispute it may have had involving specific entities with which it had commercial relationships. A Chapter 11 plan classifies claims according to various classes, and while some classes consist of a single creditor, HD's claim is in a class with multiple creditors.
Finally, the rule would contravene the central purposes of the Chapter 11 proceeding. A Chapter 11 proceeding gives a debtor a breathing spell from paying its creditors, provides it with an adequate opportunity to restructure its liabilities and business operations in anticipation of the fresh start that it receives under 11 U.S.C. § 1141. Id. at 56. The requirement to file all claims before entry of the confirmation order, at the risk of having the claims barred by res judicata, would restrict the ability of the debtor's principals to focus upon restructuring the debtor.
The Court concludes that there is no identity of cause and that the breach of contract action therefore is not barred by res judicata. This Court respectively disagrees with the proposition that all causes of action, whether or not dealt with during the pendency of the Chapter 11 proceeding, are barred by the order confirming the plan. However, res judicata may be the result from confirmation if all three elements have been met.
II. Judicial estoppel
A party will be judicially estopped from asserting a position inconsistent with one previously asserted in a prior proceeding. See Matter of Cassidy, 892 F.2d 637, 641 (7th Cir.1990). The doctrine intended to prevent the perversion of the judicial process. Id. HD contends that S.N.A.'s position in the instant motion starkly contrasts the position it took in opposing HD's motion to dismiss this case, by quoting S.N.A.'s statement that "this adversary proceeding is related to [S.N.A.'s] Chapter 11 case because any recovery in this case is all about how much amount money will come in to [S.N.A.'s] coffers." (See HD's 402(M) Statement, Ex. N, p. 4). HD argues that by taking this position, S.N.A. asserted that the confirmation proceedings encompass all matters involved in debtor-creditor relationship, including the amount owed to, and by S.N.A. The Court disagrees, claims raised in the instant case differ from those matters addressed in the bankruptcy proceeding, and HD's position need not be addressed further.
III. Specific Reservation of Rights
HD argues that the Plan does not specifically reserve the present cause of action citing D & K Properties Crystal Lake v. Mutual Life Ins. Co. of New York, 112 F.3d 257 (7th Cir.1997). However, in D & K Properties Crystal Lake the parties did not dispute that the elements of res judicata had been satisfied. In the instant case, all of the *1012 elements of res judicata are not satisfied, it is unnecessary for the Court to discuss whether the Plan sufficiently reserved this cause of action.
IV. HD is not estopped from asserting res judicata as an affirmative defense by the December 4, 1996 Court Order
S.N.A. argues that HD is estopped from asserting the defense of res judicata by the following language in the December 4, 1996 Court Order:
Nothing contained in this Agreed Order or the orders contemplated herein shall constitute a release of any of S.N.A.'s claims set forth in Adversary 96 A 01237, S.N.A. Nut Company v. Häagen-Dazs Co., Inc. It is the intention of the parties hereto that S.N.A.'s claims against Häagen-Dazs set forth in Adversary 96 A 01237, S.N.A. Nut Company v. Häagen-Dazs Co., Inc., shall survive and shall be enforceable.
(See S.N.A.'s 402(N) Statement, ¶ 17). S.N.A. argues that in accordance with this language, the order "expressly preserve[s] the claims raised in this case from res judicata attack." (See S.N.A.'s Mem. in Opp. to HD's Mot. for Summ. J. p. 12). However, the parties agreed that settling S.N.A.'s first adversary complaint "shall not constitute a release from any of S.N.A.'s claim's" and does not prevent HD from raising affirmative defenses. As HD notes, the final sentence of the Court's Order states:
Häagen-Dazs . . . reserves all rights to defend against any claims that are or become the subject of Adversary Proceeding 96 A 01237, S.N.A. Nut Company v. Häagen-Dazs Co., Inc.
(See S.N.A.'s 402(N) Statement, Ex. C, p. 3). Res judicata provides an affirmative defense. D & K Properties Crystal Lake, 112 F.3d at 259. Therefore, HD is not estopped from asserting the defense of res judicata by the December 6, 1996 Court Order.
V. CONCLUSION
For the foregoing reasons, the Court denies the motion Of the Haagen-Dazs Company, Inc., for Summary Judgment.
NOTES
[1] Citations to Rule 402 refer to the Local Rules of the United States Bankruptcy Court for the Northern District of Illinois.
[2] As an interesting aside, it is important to note that a confirmed plan is a hybrid. While it is a court order, courts have also held that any ambiguity should be analyzed according to the principles of state contract law. See UNR Indus., Inc. v. Paterson Factory Workers, 176 B.R. 472, 474 (N.D.Ill.1994).
[3] The Debtor asserts that its claim was not ripe for suit until after confirmation of the Plan because until that time it was still required to mitigate its damages. However, under Illinois law, a cause of action for breach of contract accrues at the time of the breach and not when a party sustains damages. See 810 ILCS 5/2-725(2) (1997); Hermitage Corp. v. Contractors Adjustment Co., 166 Ill.2d 72, 77, 209 Ill.Dec. 684, 651 N.E.2d 1132 (1995).
[4] HD has not argued that S.N.A. is equitably or collaterally estopped from bringing the instant case therefore this Court need not discuss the matter. "The doctrine of equitable estoppel allows a person's act, conduct or silence when it his duty to speak preclude him from asserting a right he otherwise would have had against another who relied on that voluntary action." Weidel, 208 B.R. at 853 (quoting Varat, 81 at 1317); see Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414 (3rd Cir.1988). The distinction between collateral estoppel, or issue preclusion, and res judicata is discussed in Levinson v. United States, 969 F.2d 260 (7th Cir.1992).
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57 Cal.2d 718 (1962)
Estate of JACK ROBBINS, Deceased. IRVINE ROBBINS, as Administrator with the Will Annexed, Petitioner and Appellant,
v.
LEE MISHKIN, Claimant and Respondent.
L. A. No. 26196.
Supreme Court of California. In Bank.
May 21, 1962.
Brock, Fleishman & Rykoff and Hugh R. Manes for Petitioner and Appellant.
John T. McTernan, David B. Finkel, A. L. Wirin and Fred B. Okrand as Amici Curiae on behalf of Petitioner and Appellant.
Pacht, Ross, Warne & Bernhard, Clore Warne, Harvey M. Grossman and Ira E. Bilson for Claimant and Respondent.
TRAYNOR, J.
In his will the testator divided his estate into Fund A consisting of "cash, securities and money in the bank" and Fund B consisting of "a parcel of real estate situated in Los Angeles, California, and improved with two (2) single family residences, together with furniture, fixtures, personal belongings and library contained therein." He directed that the assets comprising Fund B be sold and the cash distributed to three named trustees in trust. "The income of said trust, or so much of the principal as in the sole discretion of the Trustees may be deemed desirable or advisable, is to be used for the care, comfort, support, medical attention, education, sustenance, maintenance or custody of such minor Negro child or children, whose father or mother, or both, have been incarcerated, imprisoned, detained or committed in any federal, state, county or local prison or penitentiary, as a result of the conviction of a crime or misdemeanor of a political nature." He then set forth illustrative examples of crimes of a political nature for the guidance of the trustees in the exercise of their discretion and stated his reasons for creating the trust. [fn. 1]*721
In this proceeding to determine heirship (Prob. Code, 1080) the disposition of Fund A is not in dispute, but Lee Mishkin, a grandnephew of the testator, challenges the validity of the Fund B trust. The trial court determined that the trust is invalid. Since the will contained no residuary clause, the court entered an order determining that the property bequeathed to the trustees should pass by the law of intestate succession. The administrator-with-the-will-annexed appeals.
[1] We agree with the contention of the administrator that the testator established a valid charitable trust. The trustees, the beneficiaries, and the trust purpose are all stated. *722 [2] "A bequest is charitable if: (1) It is made for a charitable purpose; its aims and accomplishments are of religious, educational, political or general social interest to mankind. [Citations.] (2) The ultimate recipients constitute either the community as a whole or an unascertainable and indefinite portion thereof. [Citations.]" (Estate of Henderson, 17 Cal.2d 853, 857 [112 P.2d 605].) [3] Provision for *723 the "care, comfort, support, medical attention, education, sustenance, maintenance or custody" of minor children who have been deprived of normal home life by the incarceration of one or both of their parents is unquestionably of social value. Any risk that a parent might be induced to commit a crime he otherwise would not commit because of the possibility that his child might become a beneficiary of this trust is far outweighed by the interests of the innocent children involved and society's interest in them. To hold otherwise would, as stated in another context, "incorporate into the law of the land, as legal precepts, the sayings that the sins of fathers are visited upon their children (Westbrook v. Railroad, 66 Miss. loc. cit. 569 [6 So. 321, 14 Am.St.Rep. 587]), and that the child's teeth must be set on edge because the father has eaten sour grapes. (B. & I. Railroad Co. v. Snyder, 18 Ohio St. loc. cit. 409 [98 Am.Dec. 175])." (Neff v. City of Cameron, 213 Mo. 350, 360 [111 S.W. 1139]; see also Zarzana v. Neve Drug Co., 180 Cal. 32, 34-37 [179 P. 203, 15 A.L.R. 401]; Reynolds v. Willson, 51 Cal.2d 94, 102 [331 P.2d 48].)
[4] The testator selected a class of beneficiaries constituting an indefinite part of the community and provided adequate standards to guide his trustees in administering the trust. (Estate of Bunn, 33 Cal.2d 897, 901-904 [206 P.2d 635], and authorities cited.) Like the aged beneficiaries in Estate of Henderson, supra, 17 Cal.2d 853, Fredericka Home for the Aged v. County of San Diego, 35 Cal.2d 789 [221 P.2d 68], and Estate of Tarrant, 38 Cal.2d 42 [237 P.2d 505, 28 A.L.R.2d 419], these children require special care and attention, and it is immaterial that the beneficiaries are not limited to children in financial need. [5] "Relief of poverty is not a condition of charitable assistance. If the benefit conferred has a sufficiently widespread social value, a charitable purpose exists." (Estate of Henderson, supra, 17 Cal.2d 853, 857; see also Estate of Tarrant, supra, 38 Cal.2d 42, 50.) [6] "In short, as the word 'charity' is commonly understood in modern usage, it does not refer only to aid to the poor and destitute and exclude all humanitarian activities ... which are maintained to care for the physical and mental well-being of the recipients, and which make it less likely that such recipients will become burdens on society." (Fredericka Home for the Aged v. County of San Diego, supra, 35 Cal.2d 789, 793.)
Lee Mishkin contends, however, that the testator's purpose was to encourage the commission of political crimes and that *724 therefore the trust is illegal. The administrator and amici curiae contend, on the contrary, that the testator's purpose was to encourage constitutionally protected freedom of speech and expression and to protect the right of lawful dissent and that these are valid charitable purposes. They contend that the illustrations the testator set forth in his will, convictions of violating the Smith Act, convictions of contempt of congressional committees, convictions for violating laws dealing with test oaths, convictions for engaging in labor-union activities, all involve areas where the lines between constitutionally protected activity and illegal activity are vaguely defined. (Cf., e.g., Dennis v. United States, 341 U.S 494 [71 S.Ct. 857, 95 L.Ed. 1137], with Yates v. United States, 354 U.S. 298 [77 S.Ct. 1064, 1 L.Ed.2d 1356]; Scales v. United States, 367 U.S. 203 [81 S.Ct. 1469, 6 L.Ed.2d 782], with Noto v. United States, 367 U.S. 290 [81 S.Ct. 1517, 6 L.Ed.2d 836]; Barenblatt v. United States, 360 U.S. 109 [79 S.Ct. 1081, 3 L.Ed.2d 1115], with N.A.A.C.P. v. Alabama, 357 U.S. 449 [78 S.Ct. 1163, 2 L.Ed.2d 1488].) They assert that the will can reasonably be interpreted as referring only to parents who have been unlawfully convicted for engaging in constitutionally protected activity and that thereby any question of illegality can be avoided.
We need not search for any such limitation in the language of the will to sustain the trust. We may assume that the testator intended to benefit the children of those convicted of even valid laws of which he disapproved and that his motive in part at least was to encourage challenges to such laws by violations of them. [7] It is the purpose for which the property is to be used, however, not the motives of the testator that determines whether a trust is a valid charitable trust. (Estate of Butin, 81 Cal.App.2d 76, 83 [183 P.2d 304]; Matter of Frasch, 245 N.Y. 174, 182 [156 N.E. 849]; Archambault's Estate, 308 Pa. 549, 555 [162 A. 801]; Woodstown Nat. Bank & Trust Co. v. Snelbaker, 136 N.J.Eq. 62 [40 A.2d 222, 224], affd., 133 N.J.L. 256 [44 A.2d 210]; Jackson v. Phillips, 96 Mass. (14 Allen) 539, 568-569; see Estate of Loring, 29 Cal.2d 423, 434- 435 [175 P.2d 524]; In re Little's Estate, 403 Pa. 534 [170 A.2d 106, 107-108]; Chamberlain v. Van Horn, 246 Mass. 462, 464 [141 N.E. 111]; Baker v. Hickman, 127 Kan. 340 [273 P. 480, 481, 68 A.L.R. 743]; Rest. 2d Trusts, 368, com. d; 4 Scott on Trusts [2d ed.] 348, 368, pp. 2551, 2628; 2A Bogert, Trusts and Trustees, 364, pp. 30-34.) *725
[8] Assistance to the minor beneficiaries of the trust in this case is a valid charitable purpose. The risk that such assistance may serve to encourage crime is far more remote than that which the Legislature itself may have created by provision for the care of children that extends to those of convicted prisoners. (See Welf. & Inst. Code, 1500.) The benefit to society offered by the testator transcends whatever criticism there may be of his motives, which have died with him.
The order is reversed. The appeal from the order denying the motion for new trial is dismissed. (Prob. Code, 1240; Estate of Duke, 41 Cal.2d 509, 515-516 [261 P.2d 235].)
Gibson, C. J., Peters, J., and Dooling, J., concurred.
WHITE, J.
I dissent.
Undoubtedly a valid trust may be created where its purposes are to effect changes in existing laws. (See 4 Scott on Trusts [2d ed.] 374.4, p. 2677; 2A Bogert on Trusts, 378, pp. 168-170.)
As was said by this court in Collier v. Lindley, 203 Cal. 641, 650-651 [266 P. 526]: "The trend of modern authority has been toward the upholding of trusts which have for their object the creation of a more enlightened public opinion, with a consequent change in laws having to do with human relations and rights in a republic such as ours. ... To hold that a change in a law is in effect an attempt to violate that law would discourage improvement in legislation and tend to compel us to continue indefinitely to live under laws designed for an entirely different state of society. Such view is opposed to every principle of our government based on the theory that it is a government 'of the people, by the people and for the people,' and fails to recognize the right of those who make the laws to change them at their pleasure when circumstances seem to require. With the wisdom of the proposed change the courts are not concerned."
However, recognition cannot be given to a trust as valid where its purpose is illegal. Therein lies the vice of the trust now engaging our attention. It not only encourages but offers an inducement for violation of the criminal law. In the Restatement of Trusts is found the following cogent statement: "A trust which tends to induce a breach of the criminal law is invalid. Thus, a trust of property to be applied to the payment of fines of persons convicted of criminal offenses ... *726 is invalid." (Emphasis added.) And in 4 Scott on Trusts (2d ed.) section 377 at page 2729, it is said: "A trust cannot be created for a purpose which is illegal. The purpose is illegal if the trust property is to be used for an object which is in violation of the criminal law, or if the trust tends to induce the commission of crime, or if the accomplishment of the purpose is otherwise against public policy. Questions of public policy are not fixed and unchanging, but vary from time to time and from place to place. A trust fails for illegality if the accomplishment of the purposes of the trust is regarded as against public policy in the community in which the trust is created and at the time when it is created. Where a policy is articulated in a statute making certain conduct a a criminal offense, then, of course, a trust is illegal if its performance involves such criminal conduct, or if it tends to encourage such conduct. Thus, in an early English case a bequest to trustees 'to make seats for poor people to beg in by the highway' was held invalid since such begging was a criminal offense."
"A trust is illegal, even if it does not involve the performance of an illegal act by the trustees, if the natural result of the performance of the trust would be to induce the commission of crime. Thus a bequest to purchase the release of persons committed to prison for nonpayment of fines under the game laws was held illegal." (Emphasis added.)
In my opinion, it would do violence to reason and challenge credulity to say that the object of the trust with which we are here concerned is to bring about a change in the law by lawful and orderly means. On the contrary the testator, with care and precision, undertook to instruct his trustees that those who would violate certain named existing penal statutes, or commit any crime or misdemeanor which the testator terms "of a political nature," and is convicted thereof, were to be rewarded by the furnishing of aid to their children. That the trust property in the case at bar was to be used in the performance of the trust to encourage if not induce the commission of crime, to me seems manifest, and therefore, consonant with the foregoing reasoning and authorities, it cannot be held to be a valid charitable trust.
I would affirm the judgment.
Schauer, J., and McComb, J., concurred.
"1. The prosecution, conviction and incarceration resulting from a purported violation of any federal, state or local statute, ordinance or regulation, seeking to proscribe, limit, abolish, enjoin or regulate the teaching, advising, adopting, advocating or implementing any political, geopolitical, or social-political doctrine, thesis, theory or philosophy, or speaking or writing in support thereof. I cite the Smith Act of the Federal Government and the prosecutions resulting thereunder as an example of this paragraph."
"2. The prosecution, conviction and incarceration resulting from any contempt citation arising out of the refusal to answer any question or questions concerning the religious, social, economic or political opinions, beliefs, persuasions or affiliations, past and present, as may be propounded by any federal, state or local committee or sub-committee, or by any legislative committee of any state or municipality or of the Congress of the United States. I cite the appearances before the Un-American Activities Committee or the Internal Securities Committee of the United States Congress and subsequent prosecutions flowing therefrom as appropriate examples of this paragraph."
"3. The prosecution, conviction and incarceration resulting from the refusal to execute any affidavit, certification or other statement, whether under oath, or not under oath, requiring [sic] into the political affiliations, beliefs or association of the affiant; or the prosecution, conviction or incarceration which may result from the execution of a purported false statement, affidavit or certification as to the past or present political affiliations, beliefs or associations of the affiant. I cite the prosecutions under the non-Communist affidavit of the Taft-Hartley Act, or the prosecutions flowing from the McCarron-Walters Immigration Act, or the prosecutions and proceedings filed under the so- called Broyle's Bill of the State of Illinois, or prosecutions pursued by the Un-American Activities Committees of the various states as appropriate examples of this paragraph."
"4. The prosecution, conviction and incarceration resulting from any activity in the organization, or assisting in the organization, of any trade union movement; or from the violation of any injunction of any court, restraining, enjoining or limiting in any way the activities of any union of working men and women in the United States, or restricting and limiting the right to collectively bargain or go out on strike."
"The above examples are cited for illustration purposes only, so as to enable and assist my said Trustees to determine what, in their own collective opinion, shall constitute a crime or misdemeanor of a political nature, in accordance with the uses and purposes of this trust. It is my intention, however, and I do by these presents vest in my said Trustees the full and complete power and authority to determine according to their sole and best judgment what is now, or what in the future may constitute, conviction of a crime or misdemeanor of a political nature. I am aware and cognizant that the law is an ambulatory institution and accordingly is subject to constant change. I anticipate that subsequent to the execution of these presents or subsequent to the date of my demise, laws, statutes and regulations, other than those presently in full force and effect, may be adopted by the Congress of the United States or by the respective legislatures of the several states, which will or may be calculated to limit, abolish or circumscribe the field of activity in unorthodox or unpopular political or economic causes or philosophies; and that people will be arrested, convicted and imprisoned as a result therefrom. Accordingly, and with full cognizance of this eventuality, I hereby endow my said Trustees, in their sole discretion and in accordance with their best collective judgment, to determine who shall receive the benefits of this trust estate. My only stipulation to my said Trustees is that the recipients be the minor Negro children of such defendants. ..."
"I am aware of the unusual and unorthodox provisions in this testament generally, and particularly with regard to the creation of the trust estate, and the purposes and uses for which it is created. Unorthodoxy or lack of conformity have never been a deterrent or governing factors in my life. They shall play no governing or deterring role in my death or in the disposition of my estate after death. Nevertheless, some small word or mention should be made by way of explaining the reasons and basis for the creation of the trust estate set forth herein and created hereby."
"I have always believed in the full, complete and unabridged freedom of expression in a democratic society, including (but not limited to) freedom to write, freedom to espouse and freedom to advocate. To limit these freedoms to the majority, or to confine these freedoms to the protagonists of the orthodox or popular, is to negate or abolish the whole democratic concept of freedom of expression; for in the final analysis, the majority, the orthodox and the conformists have no need for this legal immunity or protection--they already have it. It is the minority, the unpopular, the advocate of the unorthodox who requires and who must have the unabridged and inalienable right to differ and be heard."
"In my lifetime, I have, from time to time, been associated and affiliated with causes, campaigns, beliefs and organizations advocating or espousing unorthodox or unpopular concepts, and I have lived to see many of these concepts and philosophies accepted and heralded many years later as part of the social, political and economic progress of our society, fully accepted and recognized as natural and respectable concomitants of the democratic processes. Yet during the early struggles on behalf of these same causes or beliefs, men and women were persecuted, ostracized and sometimes jailed, and their families left destitute and devoid of all means of support and maintenance. I have learned from a long line of such experiences that there are occasions when to differ or to dissent may well place one's own security and the security of one's family in jeopardy. However, I have also learned that irrespective of this jeopardy, certain brave and intrepid men and women will always insist on being heard, their personal security notwithstanding."
"It is because I wish to preserve the right to dissent, the right to differ and to be different, that I have created the trust estate set up in this will. It is my last contribution to a more democratic way of life for all people."
"The right to disagree, the right to dissent, the right to be different, these are warp and woof of the fabric of democracy, they are the fertilizers that feed and nurture the tree of liberty and freedom."
NOTES
[fn. 1] 1. "In order to clarify my intention and make clear to my Trustees what I mean or intend to be meant by crimes or misdemeanor of a political nature, the following examples are offered for the guidance of my Trustees:
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969 A.2d 989 (2009)
Anthony Loyd MITCHELL
v.
STATE of Maryland.
No. 11 September Term, 2008.
Court of Appeals of Maryland.
April 16, 2009.
*991 Bradford C. Peabody, Asst. Public Defender (Nancy S. Forster, Public Defender, Baltimore), on brief, for Petitioner.
Brian S. Kleinbord, Asst. Atty. Gen. (Douglas F. Gansler, Atty. Gen. of Maryland, Baltimore), on brief, for Respondent.
Argued Before BELL, C.J., HARRELL, BATTAGLIA, GREENE, MURPHY, ADKINS and JOHN C. ELDRIDGE (Retired, Specially Assigned), JJ.
GREENE, Judge.
This appeal arises from the trial, in the Circuit Court for Harford County, of Anthony Loyd Mitchell, the petitioner, for attempted murder and related offenses. During his closing argument, defense counsel called attention to certain potential witnesses that the State did not call. Defense counsel stated, among other things, that "the idea ... is to bring ... all the evidence into court" (emphasis added). According to defense counsel, some eyewitnesses did not testify, and Wali Henderson, whom the police initially thought was involved in the incident, as well as Mitchell's alleged accomplices, should have been present at trial. In response to these statements by defense counsel, the prosecutor remarked in rebuttal closing argument that both the State and the defense have the power to subpoena witnesses. The prosecutor then commented that "[the defense] had an equal right to present [the witnesses named by defense counsel] if [the defense] thought it would contradict something [the State] presented."
Mitchell contends, in this Court, that the prosecutor's remarks calling attention to the defendant's subpoena power improperly shifted the burden of proof. The State retorts, by contrast, that the prosecutor's remarks were justified, under either the "invited response" doctrine or "as a matter *992 of fundamental fairness." (Resp.'s Br. 18). We conclude that the prosecutor's remarks, made during rebuttal closing argument, were not improper. Although defense counsel's closing argument did not invoke the "invited response" doctrine, his argument did "open the door" to the prosecutor's narrow and isolated remarks calling attention to Mitchell's subpoena power. Under the circumstances, the prosecutor's remarks did not shift the burden of proof.
I
On June 4, 2004, a high school graduation party took place at the Harford Square Community Pool in the Edgewood neighborhood in Harford County. Approximately two to three hundred people attended the party, which was held in honor of the niece of Theodore Roosevelt Johnson, Jr. The complainants in this case, Aylesworth Johnson and Josh Barmer, served along with others as chaperones at the party.
At approximately 11:45 p.m., Theodore Johnson attempted to end the party because he was concerned about the large crowd that had gathered, and he expected trouble. At that time, the chaperones began preventing additional people from entering the party. Two men insisted on gaining admission, and a scuffle ensued between them and Aylesworth Johnson and Barmer. Aylesworth Johnson grabbed the first man and pushed him away. The first man raised his T-shirt to reveal the butt of a handgun tucked in his waistband and shouted, "Nobody [sic] going to be putting their hands on me, nobody be putting their hands on me." He then began to fire shots into the air. The second man displayed a shotgun and fired towards the crowd, shooting both Aylesworth Johnson and Barmer. Theodore Johnson testified that the man with the shotgun, whom he described as "five-seven, five-eight," dark-skinned, 190 to 200 pounds, and wearing brown clothing and a black hat, was Anthony Loyd Mitchell.
Theodore Johnson further testified that he thought the shooters sped away in a black Hummer that had been parked in the pool complex. Acting on this information, the police stopped a Hummer and detained its occupants, Wali Henderson[1] and Anthony Andoll. The police later decided that neither man was involved in the shooting.
Anthony Darryl Wood, Jr. attended the party. Wood made an in-court identification of Mitchell as the person who fired the shotgun at Aylesworth Johnson and Barmer. Wood also testified that the other gunman was Antonio Corprew and that Corprew used a handgun. Wood said that he was familiar with Mitchell and Corprew because he knew them from the neighborhood.
Wood further testified that as he drove away from the scene in his Chevrolet Impala, he encountered Mitchell, Corprew, and "two or three other guys," including Lewis "Man Man" Cochran, standing in the street. According to Wood, he slowed down to avoid hitting the men, who then jumped into Wood's car and told him to drive away. During the drive, Corprew became angry with Cochran, and Corprew fired his weapon.[2] The bullet missed Cochran and entered the passenger seat, where it became lodged.[3] Also left behind *993 in Wood's car was a black hat that Wood testified belonged to one of his passengers.
Several hours after the shooting, police recovered a shotgun in the wheel well of a van parked near the Harford Square pool complex. Police were led to the van by Darnell Carter and Andre Chase. Carter told one of the officers that a "heavyset black guy stuck something up somewhere, you might want to go check it out...." Chase told police that he heard gunshots and then "saw a heavyset black male, wearing all dark clothing, stoop next to the left front tire of the van...."
Following the evening's events, Mitchell was indicted in the Circuit Court for Harford County. At Mitchell's trial, during opening statements, the prosecutor told the jury that it would hear from Antonio Corprew and Lewis Cochran, Mitchell's alleged accomplices. Specifically, the prosecutor stated:
You will hear testify in this case Antonio Corprew, the one that fired the handgun into the air. He is now serving a sentence in the Division of Correction, and you'll hear about that in relation to this case. You'll also hear from a Lewis Cochran who was in the company of the defendant and Antonio Corprew. He also was prosecuted in this case and ended up pleading guilty to a lesser charge.
For whatever reason, neither Corprew nor Cochran testified at trial.
Defense counsel informed the jury during his opening statement that the State had the burden of proof. Defense counsel stated:
Now, what about Mr. Mitchell's job? What does he have to do? Well, the judge has already told you. He doesn't have to do anything.... Because the State has the burden of proof. The State has the burden of proving him guilty beyond a reasonable doubt. Again, that is the State's burden, that is the State's obligation, and that is the law.
The State requested that the court issue a body attachment for Wali Henderson, the driver of the Hummer stopped by the police. After meeting with Henderson at the courthouse, however, the prosecutor decided not to call him as a witness and asked the court to recall the body attachment.[4] Carter and Chase, the men who led police to the shotgun, did not testify either. Several police officers and investigators did testify, however. Among them, the State's firearms expert stated that the shotgun recovered from under the van was used to shoot Aylesworth Johnson and Barmer.
At the close of all the evidence, before closing arguments, the trial judge gave the jury its instructions as to the law governing the case. The jury instructions provided, in pertinent part, that "[t]he Defendant is presumed to be innocent of the charges" and that "[t]he State has the burden of proving the guilt of the Defendant beyond a reasonable doubt." In addition, the court informed the jury that opening statements and closing arguments are not evidence and that "[t]hey are intended only to help the [jurors] to understand the evidence and to apply the law." Moreover, the court stated to the jury:
*994 There are times when different inferences may be drawn from the facts, whether proved by direct or by circumstantial evidence. The State may ask you to draw one set of inferences, while the defense may ask you to draw another. It is for you, and for you alone, to decide what inferences you will draw from the body of evidence in this case.
During closing arguments, defense counsel called attention to the absences of Henderson, Corprew, Cochran, Carter, Chase, and Maurice Turner, who was listed as a potential witness in the State's proposed voir dire. Defense counsel stated:
Now, obviously you saw me writing as much as I could during the course of the trial. I just have some basic questions. Now, we heard or rather we never heard from Mr. Cochran, and I'm not sure who Mr. Cochran was. We never heard from Mr. Corprew, although there was mention of his name, and Mr. Turner also, but we never saw them. And that's important. We also never saw Wal[i] Henderson. And I believe he was identified as the individual who was operating the Hummer. We never saw him.
I have written down here: We can't trust anybody else's ID, even though there were these other IDs, because we never know if the identifications were due to the photograph in the paper.[[5]]
We don't know whether Mr. Johnson and I think some of the testimony was that the guy who placed the gun in the wheel well of the van was a heavyset guy, and I'm not sure what that means, but I would characterize Mr. Wood, the guy who was driving the getaway car, as a heavyset guy, but we don't know if Mr. Johnson ever saw Mr. Wood. And we'll never know what Mr. Johnson, Theodore Roosevelt Johnson, would have said had he seen Mr. Wood. We know there was [sic] a lot of people at the party, a lot of cars, a lot of vehicles, and then we heard information that there were some neighborhood children that gave information to Mr. Daryl Carter, and that led the deputies to the gun and the van....
* * * *
Now, I already mentioned that we have a whole bunch of people who were not present during these proceedings; Corprew, Mr. Turner, Mr. Cochran, and, you know, Mr. Henderson, Mr. Chase, Mr. Carter. See, the whole idea, I would submit, the whole idea is for you, the jury, to evaluate the evidence. For you, the jury, to determine what happened. For you, the jury, to make sense of it all. So I think the idea is to bring, I submit, all the evidence into court. And with all the people, all the noise, with all the people that were there, clearly you have a situation where a misidentification could take place. They saw 350 people that night, and they saw them altogether, and it was nighttime, and then something really traumatic happened, and the mind is trying to compute what happened. Fine. But you have had the opportunity to step back from the excitement. Let's bring Wal[i] Henderson here so we can see if he's a heavyset, dark-skinned man. Let's bring Antonio Corprew here so we can gauge his stature. Let's look at Man-Man, what does he look like? Get that hat out of the car. Does that hat fit his head?
(Emphasis added.)
At the conclusion of his closing argument, defense counsel again reminded the jury of the State's burden of proof:
*995 Now, the prosecutor gets another opportunity to address you. And that's just the way it is, because the prosecution, the State, has the burden, and the prosecutor may indicate why the defense is wrong and how I'm blowing smoke and all that, and that's fine, but there's something I really want you to remember. This case is not about what the defense's position is. The issue is proof beyond a reasonable doubt. You each must be convinced. And don't forget one other thing [the trial judge] said: Each of you must decide the case for yourself....
During rebuttal closing argument, the prosecutor stated:
The defense made mention a couple times about what the State didn't present to you all. We never saw Cochran, never saw Corprew, never saw Turner, never saw Wal[i] Henderson....
As far as dealing with certain people that weren't here, the defense made a specific point. He said you all should have had a chance to look at them and see what they looked like. I don't quite understand what that was meant to indicate.
Defense counsel objected. The trial judge overruled the objection and the prosecutor continued: "The only thing I can gather is that [defense counsel] wanted to make some sort of inference that the State was holding back something." Defense counsel then requested to approach and the following discussion ensued at the bench:
[Defense Counsel]: Judge, it's my position that the State's Attorney is not allowed to suggest to the jury that since we acknowledge these people, that we could have brought them in.
[Prosecutor]: That's exactly what I was going to do.
[Defense Counsel]: That shifts the burden from the State to the defense.
The Court: You generated the issue, [defense counsel]. You generated it in your remarks and he has a right to rebut your remarks.
[Defense Counsel]: That's still shifting the burden, Judge.
The Court: I don't think it's burden shifting. I think that you raised the issue of whether or not they should have been seen, and I don't think the mere rebuttal of saying that you had the opportunity also, if you thought it was that important, to have them seen, I don't think that shifts the burden. You opened the door for it and he's responding to it. I don't think you can open the door and require him to be silent on this issue.
[Defense Counsel]: No, I just
The Court: You raised the issue of the burden.
[Defense Counsel]: Yeah, but what I'm saying
The Court: If you raise it, you're stuck with it.
[Defense Counsel]: But we still don't have any burden.
The Court: I know you don't have a burden, but [the prosecutor] has a right to respond to your raising this issue of why they weren't here. He has the right to raise that.
[Defense Counsel]: So you're saying it's our fault they're not here?
The Court: It's your fault for raising it.
[Defense Counsel]: But that's implying to the jury that we have some burden to
The Court: I understand what shifting the burden is, or I think I do, and maybe I'm wrong, and if I'm wrong the appellate courts can decide it, but I'm overruling your objection. You raised the issue.
*996 [Defense Counsel]: Yes, sir.
After counsel departed from the bench, the prosecutor continued with his closing argument. In pertinent part, he stated:
If [defense counsel] thought that them being here would have shown that something we presented was so contradictory to something about them, he could have brought them in as well. The defense has subpoena power just like the State does. You can't say why didn't the State present a witness, when they had an equal opportunity to present it to you, and then try to say, well, it wasn't presented. They had an equal right to present it if they thought it would contradict something we presented.
Following closing arguments, the jury deliberated and found Mitchell guilty of two counts of attempted second degree murder, and one count each of carrying a deadly weapon openly with the intent to injure and reckless endangerment. Mitchell filed a motion for a new trial arguing, among other things, that the prosecution's statement in rebuttal closing argument shifted the burden of proof to the defense to disprove guilt. The court denied the motion and sentenced Mitchell to a total of fifty-five years' imprisonment.
Mitchell appealed his convictions to the Court of Special Appeals, which, in an unreported opinion, affirmed the judgments of the Circuit Court. The intermediate appellate court held that the prosecutor's comments were a "satisfactorily tailored `invited response'" to defense counsel's "attempt to exploit weaknesses in the State's case." Mitchell then filed a Petition for Writ of Certiorari, which we granted. Mitchell v. State, 404 Md. 658, 948 A.2d 70 (2008). Mitchell's petition raises one question for our review: "Did the State's closing argument improperly shift the burden of proof?"
II
A
The "Invited Response" Doctrine
Mitchell contends that the prosecutor's remarks in rebuttal calling attention to the defendant's subpoena power improperly shifted the burden of proof. In reply, the State responds that the prosecutor's remarks were justified, under either the "invited response" doctrine or "as a matter of fundamental fairness." (Resp.'s Br. 18). We first address the prosecutor's remarks under the "invited response" doctrine. In so doing, however, we must necessarily begin by discussing the scope of permissible closing argument.
This Court addressed the scope of permissible closing argument in Wilhelm v. State, 272 Md. 404, 326 A.2d 707 (1974). We stated:
As to summation, it is, as a general rule, within the range of legitimate argument for counsel to state and discuss the evidence and all reasonable and legitimate inferences which may be drawn from the facts in evidence; and such comment or argument is afforded a wide range. Counsel is free to use the testimony most favorable to his side of the argument to the jury, and the evidence may be examined, collated, sifted and treated in his own way.... Generally, counsel has the right to make any comment or argument that is warranted by the evidence proved or inferences therefrom; the prosecuting attorney is as free to comment legitimately and to speak fully, although harshly, on the accused's action and conduct if the evidence supports his comments, as is accused's counsel to comment on the nature of the evidence and the character of *997 witnesses which the prosecution produces.
Wilhelm, 272 Md. at 412, 326 A.2d at 714 (citations omitted); see also Degren v. State, 352 Md. 400, 429, 722 A.2d 887, 901 (1999) (noting "the general rule that attorneys are afforded great leeway in presenting closing arguments to the jury").
Recognizing the broad scope of permissible closing argument, we have held that "[w]hat exceeds the limits of permissible comment or argument by counsel depends on the facts of each case." Smith and Mack v. State, 388 Md. 468, 488, 880 A.2d 288, 299-300 (2005). Because the trial judge is in the best position to gauge the propriety of argument in light of such facts, we have also held that "[a]n appellate court should not disturb the trial court's judgment absent a clear abuse of discretion by the trial court of a character likely to have injured the complaining party." Grandison v. State, 341 Md. 175, 225, 670 A.2d 398, 422 (1995); see Henry v. State, 324 Md. 204, 231, 596 A.2d 1024, 1038 (1991) (noting that "[t]he inference of any impropriety occurring in closing arguments `must of necessity rest largely in the control and discretion of the presiding judge'" (quoting Wilhelm, 272 Md. at 413, 326 A.2d at 714-15)). Nevertheless, we have acknowledged certain boundaries that counsel may not exceed in delivering his or her closing argument. For instance, counsel may not "comment upon facts not in evidence or ... state what he or she would have proven." Smith and Mack, 388 Md. at 488, 880 A.2d at 299. It is also improper for counsel to appeal to the prejudices or passions of the jurors, Wood v. State, 192 Md. 643, 652, 65 A.2d 316, 320 (1949), or invite the jurors to abandon the objectivity that their oaths require, Lawson v. State, 389 Md. 570, 594, 886 A.2d 876, 890 (2005).
Grounded in the idea that the scope of permissible closing argument is quite broad, and the attendant rule that the propriety of closing argument must be judged contextually, on a case-by-case basis, is the "invited response" doctrine. Lee v. State, 405 Md. 148, 163, 950 A.2d 125, 134 (2008). In Lee, a recent case, we defined the "invited response" doctrine as follows: "`where a prosecutorial argument has been made in reasonable response to improper attacks by defense counsel, the unfair prejudice flowing from the two arguments may balance each other out, thus obviating the need for a new trial.'" 405 Md. at 163-64, 950 A.2d at 137 (quoting Spain v. State, 386 Md. 145, 157 n. 7, 872 A.2d 25, 32 n. 7 (2005)).
The Supreme Court of the United States has also addressed the "invited response" doctrine. In United States v. Young, 470 U.S. 1, 12-13, 105 S.Ct. 1038, 1045, 84 L.Ed.2d 1, 11 (1985), the Court stated:
In order to make an appropriate assessment, the reviewing court must not only weigh the impact of the prosecutor's remarks, but must also take into account defense counsel's opening salvo. Thus the import of the evaluation has been that if the prosecutor's remarks were "invited," and did no more than respond substantially in order to "right the scale," such comments would not warrant reversing a conviction.
Thus, from Lee and Young it is evident that the "invited response" doctrine applies only when defense counsel first makes an improper argument. See, e.g., Lee, 405 Md. at 169, 950 A.2d at 137 ("[B]ecause the `invited response doctrine' calls for the prosecutor's invited response to be considered in context with the defense counsel's own impropriety, it is not applicable when defense counsel has made *998 no improper argument.").[6]
An improper argument by defense counsel sufficient to invoke the "invited response" doctrine is one that goes outside the scope of permissible closing argument and "invite[s] the jury to draw inferences from information that was not admitted at trial." Lee, 405 Md. at 166, 950 A.2d at 135. In Young, during closing argument, defense counsel repeatedly attacked the integrity of the prosecution, "charg[ing it] with `reprehensible' conduct in purportedly attempting to cast a false light on [the defendant's] activities." 470 U.S. at 4, 105 S.Ct. at 1041, 84 L.Ed.2d at 6. The Court held that defense counsel's conduct was sufficient to invoke the "invited response" doctrine because "[d]efense counsel ... must not be permitted to make unfounded and inflammatory attacks on the opposing advocate." Young, 470 U.S. at 9, 105 S.Ct. at 1043, 84 L.Ed.2d at 8; see also United States v. Robinson, 485 U.S. 25, 33 n. 5, 108 S.Ct. 864, 869 n. 5, 99 L.Ed.2d 23, 32 n. 5 (1988) (opining that, under Young, a prosecutor's reference to a criminal defendant's failure to testify may be contextually proper); United States v. Nickens, 955 F.2d 112, 121-22 (1 st Cir.1992) (holding that defense counsel's argument that the prosecution was trying to "railroad" his client was sufficient to invoke the "invited response" doctrine).
This Court has not yet had the opportunity to address an improper argument by defense counsel sufficient to invoke the "invited response" doctrine. In Lee, involving a handgun assault, the defendant called the victim to the stand. 405 Md. at 154, 950 A.2d at 128. The victim testified that the defendant did not shoot him; nor did the victim recount any prior altercation with the defendant. Id. During his closing argument, defense counsel commented that the testimony of the State's only eyewitness was unreliable because it had changed over time, and that the jury instead should believe the testimony of the victim, whom the State did not call because "`[h]e didn't prove their case.'" Lee, 405 Md. at 155, 950 A.2d at 129. The prosecutor then responded in rebuttal closing argument that the jurors should not believe the victim because he was following "the law of the streets...." Lee, 405 Md. at 156, 950 A.2d at 130. We held that defense counsel's argument regarding the veracity of the victim's testimony was not improper, and, therefore, the prosecutor's "law of the streets" argument could not be justified under the "invited response" doctrine. Lee, 405 Md. at 170, 950 A.2d at 138; see also Johnson v. State, 325 Md. 511, 519, 601 A.2d 1093, 1097 (1992) (determining that the prosecutor's improper remarks in rebuttal closing argument could not be justified because defense counsel's closing argument was not improper).
In the instant case, like in Lee, defense counsel's closing argument was insufficient to invoke the "invited response" doctrine. Maurice Turner was listed as a potential witness in the State's proposed voir dire, and the prosecutor acknowledged in his opening statement that the jury would hear from Mitchell's alleged cohorts Antonio Corprew and Lewis "Man-Man" Cochran. In addition, the jury heard about Wali Henderson, the driver of the Hummer, an initial suspect in the shooting, and the jury also learned of Darnell Carter and Andre Chase, the two men who led police to the shotgun. Because it is within the scope of permissible closing argument *999 for counsel to draw inferences from the evidence admitted at trial, which includes the ability to comment on an absence of such evidence, defense counsel's closing argument was not improper. See Eley v. State, 288 Md. 548, 553, 419 A.2d 384, 386-87 (1980) (holding that defense counsel may call attention to the State's failure to produce evidence); Wise v. State, 132 Md. App. 127, 146, 751 A.2d 24, 33 (2000) (recognizing "the right of a defendant to comment upon the failure of the State to produce evidence"), cert. denied, 360 Md. 276, 757 A.2d 811 (2000); Eastman v. State, 47 Md.App. 162, 167, 422 A.2d 41, 43 (1980) (noting that "it is not unreasonable to permit the defense to comment upon the State's shortcomings in producing prosecutorial evidence").
Further, the State contends that defense counsel's closing argument was improper, and therefore sufficient to invoke the "invited response" doctrine, because it made an impermissible "missing witness" inference. In other words, according to the State, defense counsel's closing argument drew the inference that witnesses not called by the State would have testified unfavorably to the prosecution. We addressed the propriety of a missing witness inference in Davis v. State, 333 Md. 27, 633 A.2d 867 (1993), stating:
"The failure to call a material witness raises a presumption or inference that the testimony of such person would be unfavorable to the party failing to call him, but there is no such presumption or inference where the witness is not available, or where the testimony is unimportant or cumulative, or where he is equally available to both sides."
Davis, 333 Md. at 48, 633 A.2d at 877 (quoting Christensen v. State, 274 Md. 133, 134-35, 333 A.2d 45, 46 (1975)). In addition, we noted that
[t]he missing witness inference may arise in one of two contexts. A party may request that a trial judge instruct the jury on the operation and availability of the inference where all the elements of the rule are present. Additionally, a party may wish to call the jury's attention to this inference directly during closing arguments.
Davis, 333 Md. at 52, 633 A.2d at 879 (citations omitted).
In the instant case, generally, defense counsel mentioned in closing argument that the jury did not hear from Corprew, Cochran, Henderson, Chase, Carter, and Turner. By this argument, defense counsel pointed out that the prosecutor failed to call these potential witnesses. As to the significance of their absences, defense counsel indicated that the State's case was significantly weak on the issue of identification of Mitchell as the shooter. Specifically, according to defense counsel, the jury was never given an opportunity to see and compare for themselves whether certain of these witnesses corresponded to the descriptions of the suspects in the case.[7]*1000 As such, Defense counsel stated, in closing argument:
Now, we heard or rather we never heard from Mr. Cochran, and I'm not sure who Mr. Cochran was. We never heard from Mr. Corprew, although there was mention of his name, and Mr. Turner also, but we never saw them. And that's important. We also never saw Wal[i] Henderson. And I believe he was identified as the individual who was operating the Hummer. We never saw him.
* * * *
[C]learly you have a situation where a misidentification could take place.... Let's bring Wal[i] Henderson here so we can see if he's a heavyset, dark-skinned man. Let's bring Antonio Corprew here so we can gauge his stature. Let's look at Man-Man, what does he look like? Get that hat out of the car. Does that hat fit his head?
To be certain, defense counsel did not infer that Corprew, Cochran, Henderson, Chase, Carter, and Turner would have testified unfavorably to the prosecution. Rather, defense counsel argued to the jury the sufficiency of the State's evidence, pointing to gaps in the State's case notably a failure to corroborate the identification of Mitchell and contending that additional evidence was necessary. Clearly, defense counsel suggested that the State needed to produce more witnesses to prove its case against Mitchell, thereby implying that every witness, whether material or not, no matter how cumulative the evidence might be, should have been heard or seen. Such an argument is not tantamount to an improper missing witness inference and does not invoke the "invited response" doctrine.
In response to defense counsel's argument, the prosecutor did not contend that defense counsel inferred that any witnesses that were not called would have testified unfavorably to the State. Instead, the prosecutor stated that the inference drawn by defense counsel was "that the State was holding back something." An inference that the State is "holding back" does not amount to a statement that witnesses not called by the State would have testified unfavorably to the prosecution. A party may have any number of reasons to "hold back" and not call a potential witness. For instance, the witness's testimony might be cumulative, or the existence of impeaching evidence may detract too greatly from the probative value of the testimony and taint the party's case.
B
The "Opened Door" Doctrine
Although we hold that the "invited response" doctrine is inapplicable, because defense counsel did not make an improper argument and no impermissible missing *1001 witness inference was made, our analysis does not end here. The State contends that several federal court cases and cases from other jurisdictions support its position that the "invited response" doctrine applies and that Mitchell's convictions ought to be affirmed. See, e.g., United States v. Hernandez, 145 F.3d 1433, 1439 (11th Cir.1998) (holding that it is not improper for a prosecutor to comment on a defendant's subpoena power, "`particularly when done in response to a defendant's argument about the prosecutor's failure to call a specific witness'" (quoting United States v. Blackman, 66 F.3d 1572, 1578 n. 7 (11th Cir.1995))); United States v. Molovinsky, 688 F.2d 243, 247 (4th Cir.1982) (holding that prosecutor's remarks regarding the defendant's subpoena power were "a justified defensive response"); accord People v. Kliner, 185 Ill.2d 81, 235 Ill.Dec. 667, 705 N.E.2d 850, 886 (1998); Doby v. State, 557 So.2d 533, 539-40 (Miss.1990). None of those cases, however, mention the "invited response" doctrine as we have defined it; thus, the State's reliance is misplaced. Instead, the cases cited support another one of the State's assertions, that is, that fundamental principles of fairness permitted the prosecutor to call attention to Mitchell's subpoena power. We agree with that assertion, which we also find supported by our own cases, and hold that defense counsel's closing argument "opened the door" to the prosecutor's remarks about Mitchell's subpoena power. We, therefore, consider the prosecutor's remarks to be fair comment.
The "opened door" doctrine is based on principles of fairness and permits a party to introduce evidence that otherwise might not be admissible in order to respond to certain evidence put forth by opposing counsel. Conyers v. State, 345 Md. 525, 545, 693 A.2d 781, 790 (1997). "`[O]pening the door' is simply a way of saying: `My opponent has injected an issue into the case, and I ought to be able to introduce evidence on that issue.'" Clark v. State, 332 Md. 77, 85, 629 A.2d 1239,1243 (1993); see also McLain, Maryland Evidence, § 103:13(c)(i) ("If one party has introduced irrelevant evidence, over objection, or, indeed, even `admissible evidence which generates an issue,' the trial court may rule that the first party has `opened the door' to evidence offered by the opposing party that previously would have been irrelevant, but has become relevant."). We have held that the opened door doctrine applies in the context of opening statements, see Terry v. State, 332 Md. 329, 337, 631 A.2d 424, 428 (1993) (noting that, although the opening statement is not evidence, "the general principles involved in allowing a party to `meet fire with fire' are applicable"), and we see no reason why it should not apply in the context of closing arguments as well.[8]
Here, as we have noted, defense counsel, in closing argument, permissibly drew the jury's attention to the absences of Wali Henderson, Antonio Corprew, Lewis "Man-Man" Cochran, and others. By saying "Let's bring Wal[i] Henderson," Corprew, and "Man-Man" into the courthouse, however, defense counsel argued the relevancy *1002 of their absences and the weakness in the State's case. This maneuver "opened the door" for the prosecutor to offer an explanation as to why those witnesses were not present. See Degren, 352 Md. at 433, 722 A.2d at 903 ("[P]rosecutors may address during rebuttal issues raised by the defense in its closing argument."). Moreover, defense counsel's choice of language in stating "Let's bring Wal[i] Henderson," Corprew, and "Man-Man" into the courthouse for inspection associated the jurors with the defense, as if the jurors were entitled to see these witnesses and somehow were prevented from doing so by the State. In light of such language, a response by the prosecutor calling attention to Mitchell's subpoena power was fair comment.
Accordingly, our holding in regard to the State's rebuttal argument is a narrow one. The prosecutor's remarks calling attention to the defendant's subpoena power were a tailored response to defense counsel's assertion that all the potential witnesses should have been brought into the courtroom given what defense counsel identified as a weakness in the State's case. Indeed, in response to defense counsel's assertion that Mitchell faced a case of misidentification, the prosecutor responded as follows:
The defense made mention a couple of times about what the State didn't present to you all. We never saw Cochran, never saw Corprew, never saw Turner, never saw Wal[i] Henderson....
* * * *
As far as dealing with certain people that weren't here, the defense made a specific point. He said you all should have had a chance to look at them and see what they looked like....
* * * *
If [defense counsel] thought that them being here would have shown that something we presented was so contradictory to something about them, he could have brought them in as well. The defense has subpoena power just like the State does. You can't say why didn't the State present a witness, when they had an equal opportunity to present it to you, and then try to say, well, it wasn't presented. They had an equal right to present it if they thought it would contradict something we presented.
Cases from other courts that the State has called to our attention support our conclusion that a prosecutor may comment on the defendant's subpoena power after defense counsel has "opened the door." In Hernandez, supra, defense counsel first brought up the defendant's subpoena power. 145 F.3d at 1436. Defense counsel argued in closing, "Now I will suspect the government will say ... [the defendant] has the subpoena power." Id. During rebuttal, the prosecutor stated:
It is much easier to raise questions than it is to answer [them], folks, isn't it? It is much easier to raise questions. [Defense counsel] starts first with where is the confidential informant? Well, where was the confidential informant? Remember Special Agent Greene told you the informant was not too confidential to Ms. Short [defense counsel] because she met the informant before.
Hernandez, 145 F.3d at 1437.
On appeal, Hernandez argued that the prosecutor's rebuttal argument shifted the burden of proof to the defense. See Hernandez, 145 F.3d at 1438 ("Hernandez contends that the prosecutor, in his rebuttal argument, created a non-existent relationship between the confidential informant and defense counsel which left the jury with the impression that defense counsel had an equal if not elevated duty to use its subpoena power to produce the informant at trial."). The court rejected this argument, *1003 stating that "it is not improper for a prosecutor to note that the defendant has the same subpoena powers as the government, `particularly when done in response to a defendant's argument about the prosecution's failure to call a specific witness.'" Hernandez, 145 F.3d at 1439 (quoting Blackman, 66 F.3d at 1578 n. 7).
In Molovinsky, supra, one of the defendant's alleged co-conspirators, Ed Sparrow, was present in the courthouse throughout the trial. 688 F.2d at 247. The government never called Sparrow to testify, and defense counsel commented in closing argument as follows:
[I]t is clear from the evidence that Sparrow was as heavily involved, subsequently, in trying to find a way of counterfeiting as the defendant was. He is not here; he did not testify. He is not on trial. He is not charged. He did not testify. You cannot speculate on what his testimony might have been, but you can note his absence and ask yourself whether or not, given all the factors in this case whether or not the Government has really proven to your satisfaction, beyond a reasonable doubt, given that they do not call the co-conspirator in, that there was an agreement to counterfeit....
Molovinsky, 688 F.2d at 247-48 (alterations in original). The prosecutor then replied in rebuttal argument:
Now where was Ed Sparrow? I have a sneaking suspicion that Gale Molovinsky knows his address and phone number. The law provides him subpoena power. Do you think it is possible that Mr. Molovinsky might not have wanted you to hear Mr. Sparrow's version of what went on? Ladies and gentlemen, he [Sparrow] was at least as available to the defense as he was to the Government.
Molovinsky, 688 F.2d at 247 (alteration in original). The court held that the prosecutor's response was proper in light of the argument made by defense counsel. Molovinsky, 688 F.2d at 247-48.
In Doby, supra, defense counsel cross-examined an officer about the whereabouts of a confidential informant. 557 So.2d at 538. During closing argument, the prosecutor rekindled the discussion, stating that "[t]he State has the power of subpoena. So does defense counsel. You didn't see anybody subpoena him, did you?" Id. In holding that the prosecutor's statements were not improper, the Supreme Court of Mississippi stated:
[W]here opposing counsel "opens the door," the prosecution may enter and develop a matter in greater detail....
* * * *
Moreover, a fair reading of th[e] cross-examination does indeed find the defense suggesting that the prosecution was up to something in its failure to have the confidential informant present. We may not in fairness hold the prosecution unable to answer.
Doby, 557 So.2d at 539-40 (emphasis added).
C
Shifting the Burden of Proof
In holding that the prosecutor's remarks calling attention to Mitchell's subpoena power were a narrow and isolated, justified response to defense counsel's "opening the door," we conclude that such remarks did not shift the burden of proof. Thus, our prior statement in Eley, 288 Md. 548, 419 A.2d 384, is inapposite. In Eley, we noted that
[a prosecutor's] comment upon the defendant's failure to produce evidence to refute the State's evidence ... might well amount to an impermissible reference *1004 to the defendant's failure to take the stand. Moreover, even if such a comment were not held tantamount to one that the defendant failed to take the stand it might in some cases be held to constitute an improper shifting of the burden of proof to the defendant.
288 Md. at 555 n. 2, 419 A.2d at 388 n. 2 (emphasis added). But see, e.g., United States v. Williams, 990 F.2d 507, 510 (9th Cir.1993) (holding that the prosecutor's comment regarding the defendant's failure to call a potential witness did not shift the burden of proof because it did not implicate the defendant's Fifth Amendment right not to testify); United States v. Dahdah, 864 F.2d 55, 59 (7th Cir.1988) ("[C]ommenting on a defendant's failure to call a witness does not have the effect of shifting the burden unless it taxes the exercise of the defendant's right not to testify....").
Even if the prosecutor's remarks were improper, such that Eley applied, an analysis of Mitchell's "burden-shifting" argument in context, as our case law requires, would also mandate the conclusion that the prosecutor's remarks in rebuttal argument could not have shifted the burden of proof. See Wilhelm, 272 Md. at 436, 326 A.2d at 727; see also Woodland v. State, 62 Md. App. 503, 516-17, 490 A.2d 286, 293 (1985) (applying a contextual analysis to a burden-shifting argument), cert. denied, 304 Md. 96, 497 A.2d 819 (1985). Here, during his opening statement and closing argument, defense counsel emphasized to the jury that it was the State's burden to prove the defendant's guilt. More importantly, the court carried out its function and instructed the jury as to the burden of proof. Moreover, immediately preceding counsel's closing arguments, the court noted to the jury that such arguments are not evidence and that the jury was entitled to draw any reasonable inference from the evidence, and not just the inferences that counsel asked them to draw.
Under the circumstances, the prosecutor's remarks during rebuttal argument constituted a reasonable reply to arguments made by defense counsel in closing argument. The trial judge did not abuse his discretion in allowing the State's rebuttal argument, and the trial judge's ruling did not unfairly prejudice Mitchell or shift to him the burden of proof.
JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED, WITH COSTS.
BELL, C.J., dissents and files opinion joined by JOHN C. ELDRIDGE, J., Retired Specially Assigned.
Dissenting Opinion by BELL, Chief Judge, which JOHN C. ELDRIDGE, J., Retired Specially Assigned, joins.
"It is critical that the moral force of the criminal law not be diluted by a standard of proof that leaves people in doubt whether innocent men are being condemned." In re Winship, 397 U.S. 358, 364, 90 S.Ct. 1068, 1072-73, 25 L.Ed.2d 368, 375 (1970). "It is also important in our free society that every individual going about his ordinary affairs have confidence that his government cannot adjudge him guilty of a criminal offense without convincing a proper factfinder of his guilt with the utmost certainty." Id. at 364, 90 S.Ct. at 1073, 25 L.Ed.2d at 375. In the present case, counsel for Anthony Loyd Mitchell, the petitioner, did nothing more in closing argument than argue that the State failed to meet its burden of proof. That, in the process, he commented on the absence of witnesses, some of whom the prosecutor promised in opening statement would be presented at trial, does not change this basic fact or provide any basis for the *1005 argument the State was permitted to make in this case.[1]
I.
The prosecutor gave an opening statement at the onset of Mitchell's trial, in which he laid out the State's theory of the case. In that regard, he stated, in pertinent part:
"With the defendant at the time [of the shooting] was another individual you'll hear about during the course of the trial, one Antonio Corprew. Mr. Corprew had a handgun, and right before the shotgun was fired by the defendant, one of the two adults saw Corprew going for his dip, which is a slang term for going for a handgun stuck down by the belt. Corprew, the witnesses indicated, began to fire shots into the air or toward the air, and it was at this time that the defendant was firing directly at the two victims.
* * * *
"Once the shooting stopped and the two victims lay on the ground bleeding and in pain, the defendant, the Corprew individual, and a couple of the other individuals that were with them, we believe that it was four or five altogether, then ran off up to one of the streets over in the Harford Square development....
"You will hear testify in this case Antonio Corprew, the one that fired the handgun into the air. He is now serving a sentence in the Division of Correction, and you'll hear all about that in relation to this case. You'll also hear from a Lewis Cochran who was in the company of the defendant and Antonio Corprew. He also was prosecuted in the case and ended up pleading guilty to a lesser charge. So you'll hear from them. You'll also hear from several other individuals who were present at this incident, some of which will be able to testify that they actually saw the defendant firing the shotgun toward the victims, *1006 and others who can merely put him at the scene."
(emphasis added).
The State made clear in its opening statement the importance of the testimony of Antonio Corprew and even Lewis Cochran to the proof of its case. According to the prosecutor, Corprew and Cochran were present at the time the crimes were committed and, indeed, Corprew himself was involved with Mitchell in the commission of the crimes. In that regard, it was significant that the prosecutor pointed out that Corprew was serving a period of incarceration as a result of the charges in this case and that Cochran had pled guilty to criminal charges, albeit lesser charges, stemming from this case. It is significant as well that the State also promised to present several other individuals, who either were eyewitnesses to the shooting or could place Mitchell at the scene.
Counsel for the petitioner made no such promises. Instead, in his opening statement, he summarized the allocation of the burden of proof, pointing out the responsibility that each party has. Thus, counsel advised the jury, in pertinent part:
"Now, what about Mr. Mitchell's job? What does he have to do? Well the judge has already told you. He doesn't have to do anything. He doesn't have to prove he didn't do it. He doesn't have to prove that he is not guilty. He doesn't have to prove that he's innocent. Because the State has the burden of proof. The State has the burden of proving him guilty beyond a reasonable doubt. Again, that is the State's burden, that is the State's obligation, and that is the law."
After counsel made their respective opening statements, the trial ensued. The State presented several witnesses, including Deputies Gregory Young and James Tsompanas, who were patrolling the area when they heard shots fired and responded to the scene. Neither saw the shooting and, so, did not testify that they saw the shooters. Deputy Young did indicate that he stopped a black Hummer that he had been told was involved in the incident.[2] Deputy Young identified the occupants of the Hummer as Wally Henderson and Anthony Sylvester Andoll, whom he held at gunpoint. He testified that they were subsequently determined not to be suspects and released.
Theodore Johnson also testified at trial. He identified Mitchell as the man who fired the shotgun and also testified that there was another shooter present with Mitchell.
Josh Barmer, one of the victims in the case, testified that he did not know where the shot that injured him came from. Barmer, too, indicated that there was more than one shooter.
Aylesworth Johnson, the other victim in the case and the brother of the honoree of the party, testified that he got into a shoving match with a young guy who was trying to enter the party and that the young guy lifted his shirt to reveal a gun stuck inside his trousers. Immediately thereafter, he continued, he was hit by a gunshot. Aylesworth Johnson stated, "I have no idea where that shot came from. I was looking at the gentleman in front of me with the handgun and then I hit the ground."
Anthony Daryl Wood, Jr. testified that he also was at the party on the evening of *1007 the shooting. He explained that, as he was leaving the party, he heard loud noises and saw a confrontation between four or five people. Wood recalled hearing gunshots and, responding to the prosecutor's inquiry whether he saw who shot the victims, identified Antonio Corprew, someone he knew from school, and Mitchell[3], whom he had known from the neighborhood, as the two shooters. Wood testified that, when he left the scene, he encountered Corprew and Mitchell, along with some others and, when they jumped in his car and told him to drive toward Route 40, he gave them a ride. Incidentally, Wood reported that Corprew got into an argument with one of the passengers[4], fired a shot inside the vehicle, and then exited the car shortly after the other occupants jumped out and ran.
The last witness presented by the State was Detective Eric Gonzalez of the Criminal Investigation Division, Major Crimes of the Harford County Sheriff's Department. Gonzales indicated that, of the possible three hundred attendees at the party where the shooting occurred, forty-two people were interviewed, with four of those interviewed providing substantial information as to what happened at the incident. In response to the question, "what other individuals have been charged in this case?", Detective Gonzales answered "Lewis Cochran and Antonio Corprew."
After the State rested its case, the defense presented one witness, Iris Nicole Scontion-Williams. Williams testified that she was a friend of Aylesworth Johnson and was waiting in her car to pick up her cousin when the shooting occurred. She did not testify that she saw the shooters, and, did not identify the shooters. She did testify that, when she spoke with him, Aylesworth Johnson did not tell her who had shot him.
The State did not call Antonio Corprew, Lewis Cochran, or Wally Lamar Henderson as witnesses, even though those individuals were mentioned throughout the State's case and during the testimony of the State's witnesses. Corprew was mentioned the most often.
In closing argument, the prosecutor argued that Mitchell should be convicted as charged and offered reasons therefor. Although he reiterated that Corprew and Cochran or "Man-Man" were present at the shooting and that Corprew was directly involved, he did not explain why he did not call the witnesses he promised in opening statement to call.
To be sure, the defense, in closing argument, commented on the absence of certain witnesses, the failure of the State to call certain witnesses, and invited the jury to take that into account. The manner in which counsel made those comments must be viewed in context. After lamenting the sad state of society where gun violence is prevalent, defense counsel stressed to the jury:
"... the only issue in this case, whether you are pro-gun, whether you're antigun, that doesn't matter, the only issue *1008 in this case is proof beyond a reasonable doubt."
Counsel then described the jury system as a protection for the individual, "the arm of the individual," that stands between the individual and wrongful prosecution by the government. The jury was told, "[y]ou are his insurance against oppression. You are his insurance against an unfair trial." Then directing the jury's attention once again to the reasonable doubt standard that it was required to apply in reaching its verdict, defense counsel questioned the State's case, noting and emphasizing the State's failure to call certain witnesses. He stated, in pertinent part:
"Now, we heard or rather we never heard from Mr. Cochran, and I'm not sure who Mr. Cochran was. We never heard from Mr. Corprew, although there was mention made of his name and Mr. Turner also, but we never saw them. And that's important. We also never saw Wally Henderson. And I believe that he was identified as the individual who was operating the Hummer. We never saw him."
(emphasis added).
Defense counsel then implied to the jury that Theodore Johnson, one of the two eyewitnesses for the State, was mistaken in his identification of Mitchell as the shooter, based on a newspaper article which identified Mitchell as a suspect. Regarding this, counsel said, in pertinent part:
"[Theodore Johnson] specifically said that this was Antonio. I told him, the defense counsel told him, that his name was Anthony Mitchell. Suppose Mr. Johnson got everything mixed up? And suppose Mr. Johnson, in his desperation to make some sense of a horrific event, started to read and believe what he had seen in the newspaper? Have we ever heard of that happening before? The power of suggestion? Think about it."
As for the State's second and final eyewitness, Anthony Wood, the defense counsel questioned whether Wood's version of events should be believed by the jury. Counsel forcefully argued to the jury that Wood's story that he was an innocent attendee at the party and was not involved in any way in the shooting, but only gave a ride to the shooters, was not credible and should not believed. Moreover, in an effort to discredit Wood's testimony, he questioned why Wood did not take Interstate 95 to 695, the most direct route to his home in Parkville from Edgewood, but instead drove down Pulaski Highway or Route 40. Counsel posited, on that point, "[i]t's like somebody going down the back road trying to hide something." The defense also emphasized the point that Wood discarded the bullet that was in the back of his car, instead of reporting the incident to the police immediately. The defense counsel then went on to question why certain evidence, including a baseball bat that was at the scene and a hat that was in the back of Anthony Wood's car, was not presented or analyzed for DNA by the State.
With regard to his earlier discussion concerning the missing witnesses, the defense counsel argued:
"Now, I already mentioned that we have a whole bunch of people who were not present during these proceedings; Corprew, Mr. Turner, Mr. Cochran, and, you know, Mr. Henderson, Mr. Chase, Mr. Carter. See, the whole idea, I would submit, the whole idea is for you, the jury to evaluate the evidence. For you, the jury, to determine what happened. For you, the jury, to make sense of it all. So I think the idea is to bring, I submit, all the evidence into court. They saw 350 people that night, and they saw them all together, and it *1009 was nighttime, and then something really traumatic happened, and the mind is trying to compute what happened. Fine. But you have had the opportunity to step back from the excitement. Let's bring Wally Henderson here so we can see if he's a heavyset, dark-skinned man. Let's bring Antonio Corprew here so we can gauge his stature. Let's look at Man-Man, what does he look like? Get that hat out of the car. Does that hat fit his head?"
The defense finished his closing argument with a final thought for the jury to consider. He said, "[t]his case is not about what the defense's position is. The issue is proof beyond a reasonable doubt. You each must be convinced."
In rebuttal argument, the prosecutor stated, in pertinent part:
"The defense made mention a couple times about what the State didn't present to you all. We never saw Cochran, never saw, Corprew, never saw Turner, never saw Wally Henderson. He also made mention of some items of evidence that perhaps weren't shown or brought out in the case.... As far as dealing with certain people that weren't here, the defense made a specific point. He said that you all should have had a chance to look at them and see what they looked like. I don't quite understand what that was meant to indicate."
Over the defense's objection, the State continued:
"If [defense counsel] thought that [the absent witnesses] being here would have shown that something we presented was so contradictory to something about them, he could have brought them in as well. The defense has subpoena power just like the State does. You can't say why didn't the State present a witness, when they had an equal opportunity to present it to you, and then try to say, well, it wasn't presented. They had an equal right to present it if they thought it would contradict something we presented."
II.
Mitchell's position is that the State failed to meet its burden of proof. "In view of the fact that the accused bears no burden of proof, but needs only to raise a reasonable doubt in the minds of the jury," Foster v. State, 297 Md. 191, 211, 464 A.2d 986, 996 (1983); e.g., In re Winship, 397 U.S. 358, 364, 90 S.Ct. 1068, 1073, 25 L.Ed.2d 368 (1970); State v. Evans, 278 Md. 197, 206, 362 A.2d 629, 634 (1976); State v. Grady, 276 Md. 178, 181-82, 345 A.2d 436, 438 (1975), the comments of Mitchell's counsel are the equivalent of counsel arguing that the State failed to prove its case, that the State did not produce sufficient evidence to prove Mitchell's guilt beyond a reasonable doubt. Certainly, no one would argue that an argument that the State failed to meet its burden of proof, using those precise terms, or their equivalent, would have been improper. That the identical argument was made in the way that it was in this case, albeit in different terms, substantively and logically, is, and should be, of no consequence.
How the State meets its burden of proof is critical. Here, the State charged Mitchell with attempted murder and other related offenses as a result of a shooting that occurred on the night of June 4, 2004. The prosecutor, in opening statement, said that he would call Corprew, Cochran, and others, whom he did not name, to prove that Mitchell was guilty. See State v. Snowden, 385 Md. 64, 96, 867 A.2d 314, 332 (2005)("The burden ... is on the State... to prove its case through production of witnesses and evidence that conform to the U.S. Constitution and the Maryland Declaration of Rights.") (citation omitted). Specifically, *1010 the prosecutor said "[y]ou will hear testify in this case Antonio Corprew.... You'll also hear from a Lewis Cochran who was in the company of the defendant and Antonio Corprew." Regarding the eyewitnesses, the prosecutor said "[y]ou'll also hear from several other individuals who were present at this incident, some of which will be able to testify that they actually saw the defendant firing the shotgun toward the victims, and others who can merely put him at the scene." The State called some witnesses, but not those it mentioned by name or others whose testimony might have supported its theory of the defendant's guilt. See Dorsey v. State, 349 Md. 688, 707, 709 A.2d 1244, 1253 (1998)("`The burden of proving evidence on an issue means the liability to an adverse ruling (generally a finding or directed verdict) if evidence on the issue has not been produced. It is usually cast first upon the party who has pleaded the existence of the fact.'")(quoting McCormick on Evidence, § 336 at 568 (4th Ed. 1992)). The State presented only two eyewitnesses and neither of those eyewitnesses included the witnesses the State promised to call in this case. It logically would have followed that the State should have presented those individuals that were central to it proving its case. The failure of the State to call Corprew or Cochran after promising in opening statement to do so, or to offer an explanation as to why they were not called, provided the defense with the opportunity to comment on the State's failure to present those witnesses. Taking that opportunity was not only the appropriate thing for Mitchell's counsel to do, it was critical to ensuring that Mitchell received effective and competent representation, which is so necessary to a fair trial.
The presentation of witnesses is one way for the State to prove its case, although not the only way. In this instance, however, by promising to present their testimony in opening statement, the State made that testimony and thus the presence of Corprew and even Cochran important to its case. That importance was reinforced by its repeated references to them during the presentation of the State's case. The fact that they were not presented was significant, as counsel for the defense noted. There was no way for Mitchell to make his case that the State failed to meet its burden of proof, other than to point out evidence that the State did not present. See Jonathan Wayne Eley v. State, 288 Md. 548, 554, 419 A.2d 384, 387 (1980) ("While it is not incumbent upon the State to produce fingerprint evidence to prove guilt, nevertheless, where a better method of identification may be available and the State offers no explanation whatsoever for its failure to come forward with such evidence, it is not unreasonable to allow the defendant to call attention to its failure to do so.") Mitchell simply called attention to the State's failure to produce the witnesses it promised to present. Just because Mitchell presented one witness at trial does not give the State license to comment on other witnesses that the defense could, or the State believes it should, have presented.
I dissent. Judge ELDRIDGE joins in the views expressed herein.
NOTES
[1] In the record before us, Henderson's name is spelled both "Wally" and "Wali." For purposes of consistency, we shall use the latter spelling.
[2] Wood testified that the men argued about why Mitchell and Cochran decided to "start shooting."
[3] Wood later located the bullet in his car and disposed of it. Two days after the shooting, he contacted his friend Kevin Williams, a detective in Bel Air, who gave Wood the phone number to two detectives involved in the investigation. Wood met with the detectives and provided a statement consistent with the testimony he recounted in court.
[4] The jury was neither informed of Henderson's presence at the courthouse nor that the body attachment was recalled.
[5] Mitchell's picture appeared in The Aegis, a local Harford County newspaper.
[6] See also Bruce J. Berger, The Prosecution's Rebuttal Argument: The Proper Limits of the Doctrine of "Invited Response," 19 CRIM. L. BULL. 5, 7 (1983) (noting that courts often invoke the "invited response" doctrine erroneously, to allow a prosecutor to rebut an entirely proper defense argument).
[7] This case is unlike the case of Christensen v. State, 274 Md. 133, 333 A.2d 45 (1975). In Christensen, defense counsel requested an instruction that there was no duty on the defendant's part to produce the alleged accomplice and that no inference should be drawn from the fact that the accomplice was not produced. 274 Md. at 136, 333 A.2d at 47. The court denied the instruction. Id. The prosecutor then argued to the jury that an inference should be drawn from the defendant's failure to call the accomplice to testify. Christensen, 274 Md. at 138-39, 333 A.2d at 48. Here, however, the prosecutor did not argue to the jury that an inference should be drawn from the defendant's failure to call his accomplices to testify. The prosecutor remarked only that Mitchell had the power to subpoena witnesses, and that the defense could do so "if they thought it would contradict something [the State] presented." In light of defense counsel's earlier statements that "clearly you have a situation where a misidentification could take place," and that the jury should be able to see Corprew, Cochran, and Henderson in the courtroom, the prosecutor's remarks did not relate to the substance of those witnesses' potential testimonies.
Had the prosecutor inferred that Corprew, Cochran, and Henderson would have testified unfavorably to the defense, that inference might well have conflicted with Christensen, 274 Md. at 140-41, 333 A.2d at 49 (holding that an adverse inference cannot be drawn from a defendant's failure to call a witness, if the State's evidence establishes that the witness is an accomplice who would be entitled to assert a Fifth Amendment privilege). Nevertheless, we conclude that the prosecutor's rebuttal argument did not go so far, and we note that defense counsel never asked the trial judge to draw a distinction between Mitchell's ability to have the jury see Corprew, Cochran, and Henderson and Mitchell's inability to present the testimony of an alleged accomplice.
[8] The Court of Special Appeals has long recognized that the "opened door" doctrine applies to closing arguments. For example, in Booze v. State, 111 Md.App. 208, 224, 681 A.2d 534, 541 (1996), rev'd on other grounds, 347 Md. 51, 698 A.2d 1087 (1997), defense counsel, in closing argument, referred to testimony from a prior trial of the defendant. Thereafter, during rebuttal argument, the prosecutor also referenced that trial. Booze, 111 Md.App. at 224, 681 A.2d at 541. Although noting that the defendant did not preserve the issue for review, the intermediate appellate court stated that defense counsel "opened the door" to the prosecutor's rebuttal. Id.
[1] While I agree with the majority's holding that the "invited response" doctrine is inapplicable in the case sub judice, Mitchell v. State, ___ Md. ___, ___, ___ A.2d ___, ___ (2009), I disagree with its conclusion that the defense counsel's closing argument "opened the door," id., to the prosecutor's remarks concerning Mitchell's subpoena power.
The Court of Special Appeals has held that, "Maryland prosecutors, in closing argument, may not routinely draw the jury's attention to the failure of the defendant to call witnesses, because the argument shifts the burden of proof." Wise v. State, 132 Md.App. 127, 148, 751 A.2d 24, 34 (2000). The intermediate court went on to discuss an instance where it is proper for the prosecution to make such a comment, saying:
"On the other hand, a defense attorney's promising in opening statement that the defendant will produce evidence and thereafter failing to do so does open the door to the fair comment upon that failure, even to the extent of incidentally drawing attention to the defendant's exercising a constitutional right not to testify."
Id. at 148, 751 A.2d at 34-35 (emphasis added). In the present case, the defense did not indicate in its opening statement that witnesses would be produced and then fail to call them. The State did.
This case is not about whether the defense opened the door to the prosecution's comments regarding Mitchell's subpoena power, in any event. It concerns, rather, whether or not the State has met the burden of proof that it has in this and every criminal case. I submit that it did not. Mitchell did nothing more in closing argument than point out evidence that the State failed to present. Such an argument does not open the door to an argument that at best, is tangential, and, at worst, impermissibly shifts the burden of proof to the defendant. The defense is allowed to comment on the State's failure to produce promised witnesses, just as the State is allowed to comment on the defendant's failure to produce witnesses promised in opening statement.
[2] Theodore Johnson, an uncle of the honoree of the party and a chaperone, testified that he believed the shooters fled in the Hummer, and that he yelled for the Hummer to be stopped.
[3] Wood testified that, although Mitchell's back was to him and he did not see Mitchell's hands, he concluded from Mitchell's stance when he saw him that he was shooting.
[4] Wood testified on direct examination that he did not know the name of the passenger with whom Corprew argued but that he was nicknamed "Man-Man." On cross-examination by the defense, the suggestion was made that "Man-Man" was Lewis Cochran:
"[Defense Counsel]: ... you don't know Man-Man's real name, right?
"[Anthony Wood]: No.
"[Defense Counsel]: Could that be Lewis Lee Cochran?
"[Anthony Wood]: Could be."
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258 S.C. 91 (1972)
187 S.E.2d 224
William James BALLARD, Appellant,
v.
The STATE of South Carolina, Respondent.
19381
Supreme Court of South Carolina.
March 6, 1972.
*92 Frank B. Register, Jr., Esq., of Lexington, for Appellant.
Messrs. Daniel R. McLeod, Atty. Gen., and Emmet H. Clair and John P. Wilson, Asst. Attys. Gen., of Columbia, *93 for Respondent.
March 6, 1972.
LITTLEJOHN, Justice:
William James Ballard is serving a five year sentence in a Richland County Prison Camp. He sought a new trial in the court below under our recently enacted Post-Conviction Procedure Act, § 17-601 et seq., of the South Carolina Code (1962). Relief was denied in that court. Ballard has appealed.
In the lower court it was the contention of Ballard that his guilty plea was involuntarily given, and that he was improperly sentenced because he was not sentenced under the Youthful Offender Act, § 55-395 of the Code.
In this appeal there is submitted only one question, taken from the brief of Ballard's counsel as follows:
"In the light of the purpose, meaning and standards of the Youthful Offenders Act, did the court err in its application and use of subsection (d) of Section 55-395 of the Youthful Offender's Act? (S.C. Code Ann., § 55-395 Suppl. 1969)."
The facts leading up to the sentence to which Ballard objects are as follows: On December 15, 1969, Ballard was sentenced in the Richland County Criminal Court to imprisonment for a term of two years. The sentence was suspended and he was placed on probation for three years under the usual terms of the probationary law as set forth in the Code. The offense charged was breaking and entering a motor vehicle with intent to steal.
*94 On July 30, 1970, Ballard was before the court charged with burglary and housebreaking. He entered a guilty plea to the offense of housebreaking. The record reveals that he had broken into a residence in the nighttime and had candidly admitted to the court that he did so with intent to steal. At that time the trial judge had not only the duty of sentencing him for housebreaking, but of taking appropriate action on the probationary sentence. The judge revoked the two year probationary sentence and sentenced him to three additional years for housebreaking, making a total of five years to be served.
At the time of the sentence Ballard was 19 years of age. The Youthful Offender Act, to which we have referred above, provides as follows:
"§ 55-395. Powers of courts upon conviction of youthful offenders. In the event of a conviction of a youthful offender the court may:
"(a) Suspend the sentence and place the youthful offender on probation.
"(b) Release the youthful offender to the custody of the Division prior to sentencing for an observation and evaluation period of not more than sixty days. The observation and evaluation will be conducted by the Reception and Evaluation Center operating under joint agreement between the Department of Vocational Rehabilitation and the Department of Corrections and the findings, along with recommendations for sentencing, shall be returned with the youthful offender to the court for sentencing.
"(c) If the offender is under the age of twenty-one, without his consent sentence the youthful offender indefinitely to the custody of the Department for treatment and supervision pursuant to this chapter until discharged by the Division, the period of such custody not to be in excess of six years. If the offender is twenty-one years of age but less than twenty-five years of age he may be sentenced in accordance with the above procedure if he consents thereto *95 in writing. No youthful offender shall be sentenced more than twice under the provisions of this chapter.
"(d) If the court shall find that the youthful offender will not derive benefit from treatment, then the court may sentence the youthful offender under any other applicable penalty provision. The youthful offender shall be placed in the custody of the Department." (Emphasis added.)
The transcript of record reveals the following dialogue between counsel for Ballard and Judge G. Badger Baker at the time sentence was imposed:
"COUNSEL: I would like to suggest to the court that the court consider the Youth Offender sentence in the light of his age, his lack of education, and lack of vocational or occupational training. He has been in jail since the date this occurred, which was April 9th, I believe.
"THE COURT: What is his age?
"COUNSEL: Nineteen.
"THE COURT: Well, he has a probationary sentence which he has violated. So the sentence is that he be confined upon the Public Works of Richland County or in the State Penitentiary for a period of three years, and his probation is revoked, which means an additional two years, making a total of five years."
Counsel for the appellant has submitted a praiseworthy brief, urging upon this Court a rather far-reaching, though not necessarily far-fetched, construction of subsection 55-395(d). In short, counsel contends that the statute makes it obligatory upon the court to specifically find that a youthful offender will not derive benefit from treatment before the court may impose sentence under other applicable penalty provisions. Such evaluation, counsel urges, "must be of the same quality as would have been given the youth had he been referred to a reception and evaluation center." Here, counsel says, the court's consideration of Ballard's fitness and eligibility for treatment was cursory at best. Counsel *96 concludes that the court therefore erred in sentencing Ballard without first making sufficient findings.
We do not agree with this conclusion.
The legislature has given to the trial judge the right, in his discretion, to impose a sentence under subsections (a), (b), (c), or (d). In December 1969 he was sentenced under (a). It is implicit in the action of the judge that he considered, as he was requested to do, the advisability of sentencing this defendant under the Youth ful Offender Act. At that time the judge had before him the probationary record, as well as full information relative to the offense which the defendant committed while he was on probation. Among the things which the judge must have considered was the fact that under the admissions made by the defendant in open court he was in actuality guilty of burglary. We do not construe the act as requiring the trial judge to make up an extended record on the issue of whether or not one should be sentenced under the Youthful Offender Act. It is abundantly clear from the record before us that the judge was within his discretionary powers when he declined the request of counsel that the Youthful Offender sentence be imposed in this case. There is no requirement that specific factual findings be made a part of the record. Nor is there any requirement for observation and evaluation such as is provided in subsection (b). Had the legislature intended such requirement it could have easily so provided.
The order of Judge Grimball refusing relief is
Affirmed.
MOSS, C.J., and LEWIS, BUSSEY and BRAILSFORD, JJ., concur.
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774 F.2d 1174
Nunez-Alfarov.I.N.S.
83-7208
United States Court of Appeals,Ninth Circuit.
9/17/85
1
B.I.A.
PETITION FOR REVIEW DENIED
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 17-1375
ANDRE JUSTE,
Plaintiff - Appellant,
v.
RESIDENT AGENCY; ERIE PENNSYLVANIA (SATELLITE OFFICE);
WILLIAM J. GREEN BUILDING; EDWARD J. HANKO; FEDERAL BUREAU
OF INVESTIGATION; PITTSBURGH LEADERSHIP AGENT; FEDERAL
BUREAU OF INVESTIGATION HEADQUARTERS OFFICE; ROBERT F.
MUELLER, (Chief Agent James S. Yawne Director Agents),
Defendants - Appellees.
Appeal from the United States District Court for the Northern District of West Virginia,
at Martinsburg. John Preston Bailey, District Judge. (3:14-cv-00130-JPB-RWT)
Submitted: July 27, 2017 Decided: July 31, 2017
Before AGEE and FLOYD, Circuit Judges, and HAMILTON, Senior Circuit Judge.
Affirmed by unpublished per curiam opinion.
Andre Juste, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Andre Juste appeals the district court’s order dismissing his civil action for failure
to prosecute. We have reviewed the record and find no reversible error. Accordingly,
although we grant leave to proceed in forma pauperis, we affirm for the reasons stated by
the district court. Juste v. Resident Agency, No. 3:14-cv-00130-JPB-RWT (N.D.W. Va.
Jan. 31, 2017). 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
2
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Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
2-20-2009
Ponta-Garcia v. Atty Gen USA
Precedential or Non-Precedential: Precedential
Docket No. 07-2551
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2009
Recommended Citation
"Ponta-Garcia v. Atty Gen USA" (2009). 2009 Decisions. Paper 1801.
http://digitalcommons.law.villanova.edu/thirdcircuit_2009/1801
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 07-2551
RENATO MANUEL DA COSTA PONTA-GARCIA,
Petitioner
v.
ATTORNEY GENERAL OF THE UNITED STATES,
Respondent
PETITION FOR REVIEW OF A DECISION OF
UNITED STATES IMMIGRATION AND CUSTOMS
ENFORCEMENT
Argued: January 15, 2009
Before: SLOVITER, BARRY, and SILER, JR.,* Circuit Judges
(Opinion Filed: February 20, 2009)
Michael P. DiRaimondo, Esq. (Argued)
DiRaimondo & Masi
401 Broadhollow Road
Suite 302
Melville, NY 11747-0000
Counsel for Petitioner
*
The Honorable Eugene E. Siler, Jr., Senior Circuit Judge,
United States Court of Appeals for the Sixth Circuit, sitting by
designation.
Andrew Oliveira, Esq. (Argued)
United States Department of Justice
Office of Immigration Litigation
P.O. Box 878
Ben Franklin Station
Washington, DC 20044-0000
Counsel for Respondent
OPINION OF THE COURT
BARRY, Circuit Judge
Petitioner contests the reinstatement of a twenty-year old
order of removal, challenging both its legal and factual bases.
Given the nature of the reinstatement procedure, the record
before us is, not surprisingly, sparse and, in the ordinary case,
might nonetheless be sufficient for us to perform the full judicial
review we are required to perform. But petitioner, with some
support in even that sparse record, has raised questions which,
with further development of the facts, could lead to a different
result. He also challenges the regulation that applies to a
reinstatement determination, a challenge we reject. We will,
however, vacate the reinstatement determination itself and
remand so that the relevant facts can be developed and the open
questions answered.
I. Factual Background
Petitioner Renato Manuel Da Costa Ponta-Garcia
(“Ponta-Garcia”) is a native and citizen of Portugal. In 1978, at
age nine, he entered the United States with his family as a lawful
permanent resident. Shortly thereafter, he and his family left the
country for Bermuda, apparently relinquishing their lawful
permanent resident status. In 1983, now age fourteen, Ponta-
Garcia returned, with his family, to the United States as a visitor,
and overstayed his visa. Removal proceedings were initiated
2
against him and his family in 1985.
In 1987, an immigration judge found that the Ponta-
Garcia family was subject to removal, and granted them the right
to depart voluntarily by July 31, 1987. They did not do so, and
Ponta-Garcia asserts that the order of removal was judicially
invalidated at some later point. Some support for that assertion
is the fact that on October 30, 1990, Ponta-Garcia applied for a
“New Alien Registration Receipt Card,” which application was
granted in early 1991. It was noted on the application,
presumably by the examining immigration officer, that Ponta-
Garcia’s original I-151 (green card) was “seen and destroyed on
1-4-91.” The assertion is also supported by the fact that in April
1992, Ponta-Garcia went to Canada to attend a wedding, and
reentered the United States four days later using his green card.
This reentry occurred without incident. Finally, we note, it does
not appear that any member of his family has been removed
pursuant to the 1987 order of removal over these many years.
On March 2, 1995, Ponta-Garcia and his brother, Helder,
filed a “Complaint for Declaratory and Injunctive Relief and
Petition for Writ of Habeas Corpus (with Stay of Deportation)”
in the U.S. District Court for the District of Connecticut, naming
the Department of Justice and John P. Weiss, the officer in
charge of the Immigration and Naturalization Service in
Hartford, Connecticut, as defendants. A stay of deportation was
granted that same day by the Hon. Dominic J. Squatrito, a
motion for the review of bond was denied on March 13, 1995,
and, for reasons unknown, the case was dismissed on March 28,
1995.
It may well have been the filing of that complaint that
prompted the investigation of Ponta-Garcia’s status and the
affidavit of his girlfriend attesting to his trip to and from Canada
in April 1992. Based on that affidavit, on March 16, 1995, a
warrant for Ponta-Garcia’s deportation was issued with the
notation that he was “to be put in proceedings anew.” JA17.
(Query whether “proceedings anew” would have been necessary
had the removal order not been invalidated.)
3
In any event, for twelve years after the warrant for
deportation issued and for fifteen years after Ponta-Garcia
reentered from Canada, nothing relevant to his immigration
status – at least, nothing of which we know – appears to have
happened. Then, in April 2007, Immigration and Customs
Enforcement (“ICE”) issued Ponta-Garcia a notice that it
intended to reinstate the by-then twenty-year old order of
removal, perhaps having been roused after all of those years
when notified of one or more of Ponta-Garcia’s run-ins with the
law. The stated grounds for reinstatement were that Ponta-
Garcia voluntarily departed the United States pursuant to an
order of removal when he left the country for the visit to Canada,
and that he illegally reentered the United States four days later.
Acting through an immigration officer, ICE determined that
Ponta-Garcia’s order of removal was subject to reinstatement,
and thus that he should be removed. This petition followed.
II. Discussion
In 1996, Congress changed the manner in which
reinstatements of orders of removal are handled. In relevant
part, the new statute reads:
If the Attorney General finds that an alien has
reentered the United States illegally after having
been removed or having departed voluntarily,
under an order of removal, the prior order of
removal is reinstated from its original date and is
not subject to being reopened or reviewed, the
alien is not eligible and may not apply for any
relief under this Act, and the alien shall be
removed under the prior order at any time after the
reentry.
8 U.S.C. § 1231(a)(5).
Under the relevant regulation interpreting the statute, an
alien subject to reinstatement “has no right to a hearing before an
immigration judge.” 8 C.F.R. § 241.8(a). To effectuate
reinstatement, an immigration officer must find that (1) the alien
4
was subject to a prior order of removal; (2) the alien is the same
person as the one named in the prior order (i.e., confirmation of
identity) and; (3) the alien unlawfully reentered the country. See
id. § 241.8(a)(1)-(3). In determining whether the alien
unlawfully reentered the country, the immigration officer “shall
consider all relevant evidence, including statements made by the
alien and any evidence in the alien’s possession. The
immigration officer shall attempt to verify an alien’s claim, if
any, that he or she was lawfully admitted . . . .” Id. §
241.8(a)(3). The regulation also provides the alien with notice,
and allows for him or her to make a “written or oral statement
contesting the determination.” Id. § 241.8(b).
A. The Challenge to the Reinstatement Procedures
Ponta-Garcia challenges the reinstatement procedures on
two grounds: first, he asserts that the regulation promulgated by
the Attorney General constitutes an unreasonable and thus
impermissible construction of 8 U.S.C. § 1231(a)(5); and
second, he asserts that the regulation violates due process.
1. The Regulation Is A Reasonable Construction
of the Statute
Every court of appeals to have considered the issue has
concluded that the regulation constitutes a reasonable
construction of 8 U.S.C. § 1231(a)(5).1 We agree. Under
Chevron U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837, 842 (1984), we are required to determine, as
an initial matter, whether Congress “has directly spoken to the
precise question at issue.” Congress has not done so here, for
1
See Morales-Izquierdo v. Gonzales, 486 F.3d 484, 493-94
(9th Cir. 2007) (en banc); Lorenzo v. Mukasey, 508 F.3d 1278,
1283-84 (10th Cir. 2007); Ochoa-Carrillo v. Gonzales, 437 F.3d
842, 846 (8th Cir. 2006); De Sandoval v. Attorney General, 440
F.3d 1276, 1280-83 (11th Cir. 2006); Tilley v. Chertoff, 2005 WL
1950796, at *3 (6th Cir. Aug. 15, 2005); Lattab v. Ashcroft, 384
F.3d 8, 17-20 (1st Cir. 2004).
5
the statute does not specify the procedures to be used to reinstate
a prior order of removal. Accordingly, we proceed to the second
prong of Chevron, and determine whether the regulation
promulgated by the Attorney General is “based on a permissible
construction of the statute.” Id. at 843.
Ponta-Garcia’s primary complaint is that the regulation
does not provide for a hearing before an immigration judge. See
8 C.F.R. § 241.8(a) (providing that an alien subject to a
reinstatement determination “has no right to a hearing before an
immigration judge”). He argues that the statutory scheme must
be interpreted to provide for a hearing by an immigration judge
because of the exclusivity clause of 8 U.S.C. § 1229a. Indeed, §
1229a does state that “[a]n immigration judge shall conduct all
proceedings for deciding the inadmissibility or deportability of
an alien.” Moreover, § 1229a(3) provides that “[u]nless
otherwise specified under this chapter, a proceeding under this
section shall be the sole and exclusive procedure for determining
whether an alien may be admitted to the United States, or, if the
alien has been so admitted, removed from the United States.”
On their face, these statutory provisions would appear to
govern reinstatement determinations, as such determinations
involve the “deportability of an alien” and can result in his or her
“remov[al] from the United States.” Id. However, in line with
the other courts that have considered this issue, see supra note 1,
we conclude that 8 U.S.C. § 1231(a)(5), the sole statute dealing
with reinstatement determinations, is an “otherwise specified”
exception to the exclusivity clause.
Section 1231(a)(5) makes quite clear Congress’s intent to
expedite and streamline reinstatement determinations. See 8
U.S.C. § 1231(a)(5) (providing that an order of removal is “not
subject to being reopened or reviewed” at a reinstatement
determination, disallowing “relief under this chapter,” and
declaring that “the alien shall be removed under the prior order
at any time after the reentry”). The Attorney General concluded
that the goal of streamlining would be advanced by providing
previously-removed aliens with review only by an immigration
officer.
6
This conclusion is reasonable in light of the
circumstances presented by reinstatement determinations: aliens
subject to reinstatement have already been ordered removed, and
thus have already been provided with the requisite procedures
and review. The risk of error is much reduced under such
circumstances, and the regulation properly reflects this reality.
Section 1231(a)(5) has reasonably been interpreted as an
exception to § 1229a.2
2. The Regulation Does Not Violate Due Process
We are similarly unpersuaded by Ponta-Garcia’s
argument that the regulation violates due process.3 As with the
2
We note that the Attorney General was well aware of the
argument that a reinstatement determination should be made by an
immigration judge. The Federal Register’s commentary discussing
the regulation states that “[s]everal commenters suggested that
aliens caught illegally reentering the United States after removal
should be provided a hearing before an immigration judge. They
expressed concern that issues such as identity and the propriety of
the earlier removal order would not be addressed.” Reinstatement
of Removal Orders Against Aliens Illegally Reentering, 62 Fed.
Reg. 10312, 10326 (Mar. 6, 1997). The Attorney General rejected
these concerns, and concluded that the regulation “adequately
addresses the concerns expressed by the commenters.” Id. This
conclusion was a legitimate and reasonable construction of the
statute entitled to Chevron deference. Indeed, when taking into
consideration congressional intent to streamline the procedures,
this may well have been the more reasonable construction of the
statute.
3
The government argues that Ponta-Garcia has not shown
that he was prejudiced by the procedures, and thus cannot
challenge them on due process grounds. Other courts have taken
this approach when faced with petitioners who did not dispute “the
facts necessary to warrant reinstatement of the original deportation
order.” Lattab, 384 F.3d at 20-21(declining to reach the due
process issue because petitioner could not show prejudice because
he did not dispute “the facts necessary to warrant reinstatement of
7
Chevron issue discussed above, the gravamen of Ponta-Garcia’s
due process claim is that the regulation does not provide for a
hearing before an immigration judge.
The delegation of authority to immigration officers, as
opposed to immigration judges, is not of constitutional import.
Indeed, there is nothing constitutionally special about
immigration judges; they are wholly a creature of statute. See,
e.g., Lopez-Telles v. INS, 564 F.2d 1302, 1303 (9th Cir. 1977)
(“Immigration judges . . . are creatures of statute, receiving some
of their powers and duties directly from Congress, and some of
them by subdelegation from the Attorney General.”) (internal
citations omitted). While we may not “grant immigration
inspectors the same fact-finding deference as we would
immigration judges, there is a presumption that immigration
inspectors are not biased.” Gomez-Chavez v. Perryman, 308
F.3d 796, 802 (7th Cir. 2002).
Moreover, the regulation does, in fact, provide more than
just minimal procedural protections. Under the regulation, the
immigration officer is required to determine whether (1) the
alien was subject to a prior order of removal; (2) the alien is the
same person as the one named in the prior order and; (3) the
alien unlawfully reentered the country. See 8 C.F.R. §
241.8(a)(1)-(3). Additionally, the regulation requires the
immigration officer to “consider all relevant evidence” in
making the above determinations. Id. § 241.8(a)(3). The alien is
also specifically given an opportunity to be heard, as the
immigration officer must consider “statements made by the alien
and any evidence in the alien’s possession,” id., and must also
allow the alien to make a “written or oral statement contesting
the determination,” id. § 241.8(b). Remembering that a
the original deportation order”); De Sandoval, 440 F.3d at 1285
(same).
The situation here is much different. Ponta-Garcia does
dispute the factual underpinnings of the reinstatement order and
has also linked the allegedly erroneous determination to the
inadequacy of the procedures.
8
reinstatement determination can only be applied to a person who
was already subject to a prior order of removal with its attendant
pre- and post-order protections, there is no issue of constitutional
concern.
Finally, full judicial review is available to an alien
adjudged removable following the reinstatement procedures at
issue. (See Respondent’s Br. 33 (“Aliens subject to
reinstatement have the opportunity for full judicial review of the
determination in the court of appeals.”).) See also United States
v. Charleswell, 456 F.3d 347, 353 (3d Cir. 2006); Ponta-
Garc[i]a v. Ashcroft, 386 F.3d 341, 342 (1st Cir. 2004) (“An
order reinstating an earlier order of deportation is subject to
review. . . .”); 8 U.S.C. § 1252 (providing for judicial review of
final orders of removal); Duran-Hernandez v. Ashcroft, 348 F.3d
1158, 1162 n.3 (10th Cir. 2003) (finding that 8 U.S.C. § 1252
covers review of reinstatement orders).
One caveat, however. The original order of removal is
“not subject to being reopened or reviewed” at the time of the
reinstatement determination or on judicial review. 8 U.S.C. §
1231(a)(5). While this language prohibits relitigation of the
merits of the original order of removal, it does not prohibit an
examination of whether the original order was invalidated, or
preclude judicial review of whether ICE met its obligations in
making the reinstatement determination. As we will now
address, it is for precisely these reasons that we are returning this
case for further factual development. See, e.g., Arevalo v.
Ashcroft, 344 F.3d 1, 9 (1st Cir. 2003) (“While we cannot revisit
the validity of the original deportation order, we do have the
authority to determine the appropriateness of its resurrection.”).
The provision of this judicial review, as well as the adequate
procedures set forth in the regulations, persuade us that, separate
and apart from whether Ponta-Garcia will ultimately prevail on
the merits of his claim, the reinstatement regulation is
constitutional.4
4
The only courts to have reached this issue are in
agreement. See Morales-Izquierdo, 486 F.3d at 495-98 (“Given the
9
B. The Claim on the Merits
Ponta-Garcia argues that even if the reinstatement
procedures pass muster, they should not have been applied to
him. He claims not only that the 1987 order of removal was
invalidated by a court, but claims as well that he did not reenter
the country illegally when he returned from his four-day visit to
Canada in 1992 with what he says was a valid green card. If he
is correct as to either or both of these claims – and there is some
support for each – serious concerns are raised.
narrow and mechanical determinations immigration officers must
make and the procedural safeguards provided by [the regulations],
the risk of erroneous deprivation is extremely low. . . . While the
regulation does not offend due process, we leave open the
possibility that individual petitioners may raise procedural defects
in their particular cases.”); Lorenzo, 508 F.3d at 1284; Tilley, 2005
WL 1950796, at *4 (“We also hold that the reinstatement
procedure offers adequate due process. . . . The reinstatement order
asks only three factual questions. A judge is not needed to decide
whether the alien was subject to a prior order of removal, nor
whether the alien deported is the same alien as the one subject to
reinstatement, not whether the alien re-entered the country illegally.
And if the alien asserts that any of these decisions was incorrect,
she may appeal the immigration officer’s findings directly to the
circuit court. To plead for additional process in this procedure is
to forget how limited is its scope.”).
Other courts have discussed this issue in dicta, and indicated
mixed feelings. Compare Alvarez-Portillo v. Ashcroft, 280 F.3d
858, 867 (8th Cir. 2002) (declining to reach the issue, but stating
that the “streamlined notice and opportunity to be heard afforded
illegal reentrants under [the regulations] seem quite appropriate
when the only issues to be determined are those establishing the
agency’s right to proceed under [the reinstatement statute”) with
Lattab, 384 F.3d at 21 n.6 (declining to reach the issue, but
commenting that “[t]he summary reinstatement process offers
virtually no procedural protections,” and suggesting that appellate
review “may not be adequate when the alien has not been given a
meaningful opportunity to develop an administrative record”).
10
The Court of Appeals for the First Circuit addressed the
nearly-identical situation of Ponta-Garcia’s brother, Helder, and
recognized these same concerns. Helder, subject to the same
order of removal, and, much later, subject to reinstatement of
that order, challenged the reinstatement in the Court of Appeals.
See Ponta-Garc[i]a, 386 F.3d 341. The Court found that it
lacked jurisdiction because the petition for review was untimely,
see id. at 341-42, but noted that the issues were potentially
meritorious and “encourage[d] the respondent to reexamine the
case with care.” Id. at 343.
If the representations made by [Helder’s] counsel
are accurate, he would appear to have a strong case
on the merits. [Helder] contends that he did not
voluntarily depart under the prior deportation order
but, rather, left the country temporarily to attend a
wedding. He also contends that he did not reenter
the country illegally, but, rather, was inspected and
allowed entry. If either of these assertions is
correct, the reinstatement provision would appear
to be inapplicable by its express terms. Moreover,
the petitioner contends that the 1987 deportation
order was invalidated by the federal district court
in Connecticut at some point after his reentry. If
that is so, the administrative reinstatement of that
order would appear problematic. See Chacon-
Corral v. Weber, 259 F.Supp.2d 1151, 1164
(D.Col. 2003) (“Because deportation for
unauthorized reentry under INA § 241(a)(5) is
under the original order of deportation, a
determination that the original order was invalid
renders § 241(a)(5) inapplicable in a given case.”).
Particularly in light of the due process concerns
that can arise in this context. . . ., we encourage
the respondent to reexamine the case with care.
Id. (citations omitted).
Just as the First Circuit was troubled by the brother’s
claims, we are troubled by Ponta-Garcia’s claims and thus return
11
the matter from whence it came for a careful consideration of
those claims.5 In so doing, we are cognizant of the fact that
Congress passed 8 U.S.C. § 1231(a)(5) to streamline and
expedite reinstatement determinations. In most cases, a
reinstatement determination will be simple, and the underlying
grounds for reinstatement (the existence of an order of removal,
identity confirmation, and the fact of illegal reentry) will not be
contested. However, in circumstances such as these, where the
alien claims that he contested the bases for reinstatement and
offered some support for why he may be correct, the regulation
requires that the immigration officer “consider [the alien’s]
evidence” and “attempt to verify an alien’s claim.” 8 C.F.R. §
241.8(a)(3). As the government tells us in its brief on appeal,
“ICE has the necessary expertise to determine the validity of
Petitioner’s assertions.” (Respondent’s Br. 25.) Assuming that
Ponta-Garcia contested before the immigration officer the notice
of intent to reinstate the prior order of removal, more is required
than it appears was done here.
III. Conclusion
For the foregoing reasons, we will vacate the order of
reinstatement and remand to ICE for further proceedings in
accordance with this Opinion.
5
We suggest that on remand some consideration be given
to whether leaving the country for a four-day personal trip
constitutes “depart[ing] voluntarily, under an order of removal,” as
required by the statute. 8 U.S.C. § 1231(a)(5) (emphasis added).
12
| {
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} |
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-05-00240-CR
Federico Yadao, Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF CALDWELL COUNTY, 421ST JUDICIAL DISTRICT
NO. 2004-375, HONORABLE TODD A. BLOMERTH, JUDGE PRESIDING
M E M O R A N D U M O P I N I O N
Appellant’s motion to dismiss this appeal is granted. See Tex. R. App. P. 42.2(a).
The appeal is dismissed.
__________________________________________
W. Kenneth Law, Chief Justice
Before Chief Justice Law, Justices Puryear and Pemberton
Dismissed on Appellant’s Motion
Filed: August 31, 2005
Do Not Publish
| {
"pile_set_name": "FreeLaw"
} |
Case: 09-30558 Document: 00511798930 Page: 1 Date Filed: 03/23/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 23, 2012
No. 09-30558
Lyle W. Cayce
Clerk
THOMAS D TURNER,
Plaintiff - Appellant
v.
KANSAS CITY SOUTHERN RAILWAY COMPANY,
Defendant - Appellee
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
Plaintiff - Appellant
THOMAS D. TURNER,
Intervenors - Appellants
v.
KANSAS CITY SOUTHERN RAILWAY COMPANY,
Defendant - Appellee
Appeals from the United States District Court
for the Eastern District of Louisiana
Before DENNIS, OWEN, and SOUTHWICK, Circuit Judges.
DENNIS, Circuit Judge:
In this employment discrimination case, the Equal Employment
Opportunity Commission (EEOC) and Thomas D. Turner (collectively, “the
plaintiffs”) appeal the district court’s grant of the summary judgment motion of
Case: 09-30558 Document: 00511798930 Page: 2 Date Filed: 03/23/2012
No. 09-30558
defendant Kansas City Southern Railway Company (KCSR), dismissing all of
the plaintiffs’ claims that the decisions to discipline Turner and three other
African American employees for putative work-rule violations were based on
race in violation of federal and state laws. We AFFIRM with respect to the
claims based on the decisions to discipline Jesse Frank and Clarence Cargo
because we conclude that the EEOC has failed to establish a prima facie case of
discrimination with regard to those decisions. However, we REVERSE with
respect to the claims based on the decisions to discipline Thomas Tuner and
Lester Thomas because we conclude that the plaintiffs have established a prima
facie case of discrimination; and that KCSR has failed to produce admissible
evidence of legitimate, nondiscriminatory reasons for those decisions. Thus, a
jury question exists as to whether the decisions to discipline Turner and Thomas
were impermissibly based on race.
I.
The discrimination claims of four KCSR employees are relevant in this
appeal: Thomas Turner, Lester Thomas, Jesse Frank, and Clarence Cargo. All
four are African American, and all four were disciplined between 2002 and 2004
following separate incidents involving putative violations of KCSR’s workplace
rules. The plaintiffs contend that these employees were disciplined, or received
more severe discipline, because of their race. The circumstances leading to the
complained-of discipline are as follows:
• Thomas Turner, a train engineer, was driving a train that was “shoving”
a damaged engine onto a spur track when the damaged engine derailed at
a low rate of speed. Turner was operating the locomotive and Thomas
Schmitt, the train’s conductor, was providing Turner with instructions
from the ground via radio about how much more room remained before the
damaged engine reached the end of the track. Turner and Schmitt blamed
2
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No. 09-30558
each other for the accident. Turner was dismissed; Schmitt, who is white,
was not disciplined.
• Lester Thomas, a train conductor, was performing a training exercise
when the train that he was operating along with Joshua Hall, the
engineer who was driving the train, failed to timely stop at a “dark signal”
(a signal that did not show a green or red light). Thomas was dismissed;
Hall, who is white, was dismissed but reinstated thirty days later.
• Jesse Frank, a train engineer, missed a shift in order to visit his uncle in
the hospital. Frank was suspended for ninety days; Frank Mouney, a
white engineer who missed a shift around the same time, was suspended
for five days.
• Clarence Cargo, a train conductor, was operating a train that derailed
after passing over an improperly locked switch. Cargo was dismissed;
Scott Claiborne, the white engineer who was driving the train, was
suspended.
All four employees administratively appealed their discipline pursuant to
their collective bargaining agreements.1 The appeals resulted in the discipline
for Turner, Frank, and Cargo being reduced; Thomas, meanwhile, accepted a
“leniency reinstatement” from KCSR while his administrative appeal was
pending.
Independently of these administrative appeals, the plaintiffs sued KCSR
regarding the initial disciplinary decisions. Turner filed suit against KCSR in
1
Turner and Frank appealed first to Denise L. Brame, KCSR’s Manager of Labor
Relations; then to Kathleen A. Alexander, KCSR’s Director of Labor Relations; and finally to
Public Law Board No. 6647, which was comprised of Merle W. Geiger, a representative of the
union; Kathleen Alexander, representing KCSR; and a neutral member, Robert L. Hicks.
Cargo also initially appealed to Brame and then to Alexander; but instead of pursuing his
appeal to the Public Law Board, Cargo appealed to the National Railroad Adjustment Board.
Public Law Boards and the National Railroad Adjustment Board are provided for by the
Railway Labor Act. See 45 U.S.C. § 153; Public Law 89-456, 80 Stat. 208 (1966).
3
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No. 09-30558
federal district court in 2003, alleging that the initial decision to dismiss him
was based on race in violation of 42 U.S.C. § 1981 and the Louisiana
Employment Discrimination Law, La. Rev. Stat. § 23:332. In 2005, the EEOC,
after conducting an investigation, filed suit against KCSR alleging that the
initial disciplinary decisions against Turner, Thomas, Frank, and Cargo were
based on race in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§ 2000e et seq. Turner intervened in the EEOC’s suit and the district court
consolidated the two cases.
During the EEOC’s investigation and the first few years of discovery in
this litigation, KCSR identified the employees who investigated each of the
incidents as the persons responsible for making the disciplinary decisions at
issue—that is, the decisions to dismiss Turner, Thomas, and Cargo, and to
suspend Frank. However, in depositions later conducted by the EEOC, those
employees testified that they did not make these disciplinary decisions. At least
one of the employees identified J.R. Thornell, who served as KCSR’s General
Superintendent of Transportation from 2002 to 2005, as the person responsible
for making these decisions. Thereafter, in 2008, more than four years after
these decisions were made, KCSR admitted that Thornell was the “likely”
decisionmaker, but at the same time, averred that Thornell could no longer
remember any of these specific decisions. KCSR later produced a declaration
from Thornell stating that during the period in which these decisions were made,
it was Thornell’s responsibility to make disciplinary decisions regarding KCSR
engineers and conductors; that in making such decisions, it was his usual
practice to review the employee’s infraction and employment history; but that
he had no specific recollection of these decisions; and that he may have delegated
the decisions to his assistant. The record contains no testimony from Thornell’s
assistant, A.J. Sonnier, who died during the litigation in this case.
4
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No. 09-30558
KCSR moved for summary judgment; the district court granted the motion
and dismissed all of the plaintiffs’ claims. Turner v. Kan. City S. Ry. Co., 622
F. Supp. 2d 374, 378 (E.D. La. 2009).2 The district court adopted most of KCSR’s
summary judgment arguments and concluded that the plaintiffs had failed to
establish a prima facie case of discrimination under the first step of the
McDonnell Douglas burden-shifting framework. Id. at 386-89. The district court
also concluded, in the alternative, that KCSR had met its burden at the second
McDonnell Douglas step by producing evidence of legitimate, nondiscriminatory
reasons for its disciplinary decisions of Turner, Thomas, Cargo, and Frank; and
that the plaintiffs had failed to meet their burden at the third step of the
McDonnell Douglas analysis to show that KCSR’s proffered reasons were
pretextual. Id. at 393-96. The plaintiffs timely appealed.
II.
“This court reviews a district court’s grant of summary judgment de novo,
applying the same standards as the district court.” EEOC v. WC&M Enters.,
Inc., 496 F.3d 393, 397 (5th Cir. 2007) (citing Turner v. Baylor Richardson Med.
2
The district court did not specifically mention Turner’s § 1981 and Louisiana
Employment Discrimination Law claims; however, the court’s opinion stated that “”[a]ll claims
against KCS[R] are hereby DISMISSED WITH PREJUDICE.” 622 F. Supp. 2d at 396.
Therefore, the district court disposed of Turner’s § 1981 and Louisiana law claims along with
the plaintiffs’ Title VII claims. The parties do not contend that Turner’s § 1981 and Louisiana
Employment Discrimination Law claims should be analyzed or resolved any differently from
the Title VII claims related to Turner. Indeed, employment discrimination claims under
Title VII, § 1981, and the Louisiana Employment Discrimination Law are analyzed under the
same standard. See Lawrence v. Univ. of Tex. Med. Branch at Galveston, 163 F.3d 309, 311
(5th Cir. 1999) (“Employment discrimination claims brought under 42 U.S.C. [§] 1981 . . . are
analyzed under the evidentiary framework applicable to claims arising under Title VII . . . .”);
Knapper v. Hibernia Nat’l Bank, 49 So. 3d 898, 902 n.11 (La. Ct. App. 2010) (“Claims under
the [Louisiana Employment Discrimination Law] are subject to the same analysis as
discrimination claims under federal Title VII of the Civil Rights Act of 1964.” (citing Hicks v.
CLECO, Inc., 712 So. 2d 656 (La. Ct. App. 1998); Plummer v. Marriott Corp., 654 So. 2d 843
(La. Ct. App. 1995))). Accordingly, our conclusion that the district court erred in granting
summary judgment for KCSR on the plaintiffs’ Title VII claims related to Turner applies
equally to Turner’s § 1981 and Louisiana Employment Discrimination Law claims.
5
Case: 09-30558 Document: 00511798930 Page: 6 Date Filed: 03/23/2012
No. 09-30558
Ctr., 476 F.3d 337, 343 (5th Cir. 2007)). “The court shall grant summary
judgment if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). “On a motion for summary judgment, the court must view the
facts in the light most favorable to the non-moving party and draw all
reasonable inferences in its favor.” WC&M Enters., 496 F.3d at 397 (citing
Hockman v. Westward Commc’ns, L.L.C., 407 F.3d 317, 325 (5th Cir. 2004)).
Therefore, because KCSR moved for summary judgment, we must view the
evidence in the light most favorable to the plaintiffs. “In reviewing the evidence,
the court must . . . ‘refrain from making credibility determinations or weighing
the evidence.’” Id. at 397-98 (quoting Turner, 476 F.3d at 343).
Where a defendant has moved for summary judgment on an employment
discrimination claim based on circumstantial evidence, as in this case, we apply
the burden-shifting framework established in McDonnell Douglas Corp. v. Green,
411 U.S. 792 (1973).3 See Russell v. McKinney Hosp. Venture, 235 F.3d 219, 222
(5th Cir. 2000). The first step of the McDonnell Douglas analysis requires “[t]he
plaintiff [to] establish a prima facie case that the defendant made an
employment decision that was motivated by a protected factor.” Mayberry v.
Vought Aircraft Co., 55 F.3d 1086, 1089 (5th Cir. 1995). If the plaintiff
establishes a prima facie case, we proceed to the next stage of the analysis,
3
Turner argues in his reply brief that “[s]ince [he] has provided direct evidence of a
cover up intended to exonerate a white employee at the expense of a black employee, it is not
necessary to work through the McDonnell Douglas test.” Turner Reply Br. 13. However, in
his opening brief, Turner argued only that this putative “direct evidence” established his prima
facie case under the McDonnell Douglas framework. See Turner Br. 16, 19, 35. It is true that
“the McDonnell Douglas test is inapplicable where the plaintiff presents direct evidence of
discrimination.” Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 621-22 (1985).
Nonetheless, we will not decide if the evidence Turner points to qualifies as direct evidence
of discrimination taking this case out of the McDonnell Douglas framework because Turner
did not raise this argument in his initial brief, and “[t]his Court will not consider a claim
raised for the first time in a reply brief.” Yohey v. Collins, 985 F.2d 222, 225 (5th Cir. 1993).
6
Case: 09-30558 Document: 00511798930 Page: 7 Date Filed: 03/23/2012
No. 09-30558
where “the defendant bears the burden of producing evidence that its
employment decision was based on a legitimate nondiscriminatory reason.” Id.
If the defendant carries its burden, the analysis moves to the third McDonnell
Douglas step, where “[t]he burden . . . shifts back to the plaintiff to prove that
the defendant’s proffered reasons were a pretext for discrimination.” Id.
III.
First, we address whether the plaintiffs have met their burden to establish
a prima facie case of discrimination.
A.
i.
The Supreme Court and this court have explained the standard for
establishing a prima facie case of discrimination in the context of a Title VII
claim of disparate treatment. “The burden of establishing a prima facie case of
disparate treatment is not onerous.” Tex. Dep’t of Cmty. Affairs v. Burdine, 450
U.S. 248, 253 (1981). The prima facie case is necessarily a flexible standard that
must be adapted to the factual circumstances of the case. Id. at 253 n.6;
McDonnell Douglas, 411 U.S. at 802 n.13. Nonetheless, “[t]he prima facie case
serves an important function in the litigation: it eliminates the most common
nondiscriminatory reasons for the plaintiff’s [discipline].” Burdine, 450 U.S. at
253-54. “[T]he prima facie case ‘raises an inference of discrimination only
because we presume these acts, if otherwise unexplained, are more likely than
not based on the consideration of impermissible factors.’” Id. at 254 (quoting
Furnco Constr. Corp. v. Waters, 438 U.S. 567, 577 (1978)).
This court has held that “[i]n work-rule violation cases,” such as the
instant case, “a Title VII plaintiff may establish a prima facie case by showing
‘either [1] that he did not violate the rule[,] or [2] that, if he did, white employees
who engaged in similar acts were not punished similarly.’” Mayberry, 55 F.3d
at 1090 (quoting Green v. Armstrong Rubber Co., 612 F.2d 967, 968 (5th Cir.
7
Case: 09-30558 Document: 00511798930 Page: 8 Date Filed: 03/23/2012
No. 09-30558
1980)). “To establish a prima facie case in this [second] manner, [the plaintiff]
must show that . . . employees [who were not members of the plaintiff’s protected
class] were treated differently under circumstances ‘nearly identical’ to his.” Id.
(citing, inter alia, Little v. Republic Ref. Co., 924 F.2d 93, 97 (5th Cir. 1991)).
“The employment actions being compared will be deemed to have been taken
under nearly identical circumstances when the employees being compared held
the same job or responsibilities, shared the same supervisor or had their
employment status determined by the same person, and have essentially
comparable violation histories.” Lee v. Kan. City S. Ry. Co., 574 F.3d 253, 260
(5th Cir. 2009) (footnotes omitted). Moreover, “the plaintiff’s conduct that drew
the adverse employment decision must have been ‘nearly identical’ to that of the
proffered comparator who allegedly drew dissimilar employment decisions,”
because “[i]f the difference between the plaintiff's conduct and that of those
alleged to be similarly situated accounts for the difference in treatment received
from the employer, the employees are not similarly situated for the purposes of
an employment discrimination analysis.” Id. (internal quotation marks omitted).
However, we have made clear that “nearly identical” is not “synonymous
with ‘identical.’” Id.; see also id. at 260 n.25 (“[T]his Circuit’s ‘nearly identical’
standard is not equivalent to ‘identical.’”). “Applied to the broader circumstances
of a plaintiff's employment and that of his proffered comparator, a requirement
of complete or total identity rather than near identity would be essentially
insurmountable, as it would only be in the rarest of circumstances that the
situations of two employees would be totally identical.” Id. at 260. “For example
. . . [e]ach employee’s track record at the company need not comprise the
identical number of identical infractions, albeit these records must be
comparable.” Id. at 260-61. “As the Supreme Court has instructed, the
similitude of employee violations may turn on the ‘comparable seriousness’ of the
offenses for which discipline was meted out and not necessarily on how a
8
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No. 09-30558
company codes an infraction under its rules and regulations. Otherwise, an
employer could avoid liability for discriminatory practices simply by coding one
employee’s violation differently from another’s.” Id. at 261 (citing McDonald v.
Santa Fe Trail Transp. Co., 427 U.S. 273, 283 n.11 (1976)). “The relevant
perspective is that of the employer at the time of the adverse employment
decision.” Id. at 261 n.27 (citing Perez v. Tex. Dep’t of Criminal Justice,
Institutional Div., 395 F.3d 206, 210 (5th Cir. 2004)).
ii.
The parties do not quarrel with these standards for establishing a prima
facie case of discrimination in a work-rule violation case; they disagree, however,
about another aspect of the prima facie case.4 KCSR argues that to establish a
prima facie case, the plaintiffs must show a “causal nexus” between the alleged
discriminatory motivation of the person who decided to dismiss Turner, Thomas,
and Cargo, and to suspend Frank, and the disciplinary decisions later rendered
by the administrative appeals boards. KCSR refers to the decisions of the
administrative appeals boards as “the ultimate discipline decisions,” the
“disciplinary actions at issue,” and the “alleged adverse employment actions.”
KCSR Br. at 17-18, 47-48. KCSR is mistaken.
The decisions of the administrative appeals boards are not the decisions
at issue. Instead, the plaintiffs’ claims are that the initial decisions to dismiss
4
The EEOC also contends that under McDonald v. Santa Fe Trail Transportation Co.,
427 U.S. 273 (1976), it could establish a prima facie case of discrimination by showing that a
black train engineer or conductor was disciplined more severely than the white conductor or
engineer who was working on the train at the time of the incident—what the EEOC refers to
as the “same incident test.” However, the EEOC did not make this argument below, and
therefore, we will not address it for the first time on appeal. See Nasti v. CIBA Specialty
Chems. Corp., 492 F.3d 589, 595 (5th Cir. 2007) (“If an argument is not raised to such a degree
that the district court has an opportunity to rule on it, we will not address it on appeal.”
(internal quotation marks omitted)).
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Turner, Thomas, and Cargo, and to suspend Frank violated Title VII. The
EEOC’s Amended Complaint5 alleges:
7. . . . . Defendant engaged in unlawful employment practices
. . . in violation of . . . Title VII, 42 U.S.C. § 2000e-2(a) and
§2000e-3(a). Specifically:
A. Turner. On or about October 23, 2002, Defendant
terminated the employment of Turner on the basis of
his race (Black), in violation of Title VII.
B. Frank. On or about February 5, 2003, Defendant
suspended Frank for 90 days on the basis of his race
(Black), in violation of Title VII.
C. Cargo. On or about May 29, 2003, Defendant
suspended Cargo for 45 days on the basis of his race
(Black) and/or in retaliation for engaging in protected
activity, in violation of Title VII. On or about January
23, 2004, Defendant terminated the employment of
Cargo on the basis of his race, and/or in retaliation for
engaging in protected activity, in violation of Title VII.
D. Thomas. On or about March 12, 2004, Defendant
terminated the employment of Thomas on the basis of
his race (Black), in violation of Title VII.
Thus, the allegedly “unlawful employment practices” under Title VII6 at issue
in this case are these initial decisions and not the disciplinary decisions made
by the administrative appeals boards.
KCSR mistakenly relies upon cases in which the final decisionmaker was
different from the intermediate supervisor with discriminatory animus toward
the plaintiff. See Jennings v. Ill. Dep’t of Corrs., 496 F.3d 764 (7th Cir. 2007);
Mato v. Baldauf, 267 F.3d 444 (5th Cir. 2001); Sherrod v. Am. Airlines, Inc., 132
5
Turner filed an Intervenor Complaint alleging that his claim “arises out of the same
facts and circumstances, occurring at the same time, [and] involves the same set of witnesses,
facts and laws as the matter contained in the EEOC’s complaint; Title VII.”
6
Title VII provides, among other things, that “[i]t shall be an unlawful employment
practice for an employer . . . to discharge any individual, or otherwise to discriminate against
any individual with respect to his compensation, terms, conditions, or privileges of
employment, because of such individual’s race, color, religion, sex, or national origin . . . .” 42
U.S.C. § 2000e-2(a).
10
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No. 09-30558
F.3d 1112 (5th Cir. 1998). Here, by contrast, the plaintiffs contend that the final
decisionmaker was Thornell; that he was motivated by discriminatory animus
when he made the decisions to dismiss Turner, Thomas, and Cargo, and to
suspend Frank; and that these decisions violated Title VII.
Therefore, we do not agree with KCSR that the plaintiffs need to show that
the alleged discriminatory animus motivating the disciplinary decisions at issue
in this case “caused” later decisions that are not at issue.
B.
Turning to whether the plaintiffs established a prima facie case of
discrimination, we conclude that, viewing the evidence in the light most
favorable to the plaintiffs, the plaintiffs have met their burden with regard to
the decisions to dismiss Turner and Thomas, but not the decisions to suspend
Frank and to dismiss Cargo.
i.
With regards to the decision to dismiss Turner, we conclude that the
plaintiffs have met their burden to establish a prima facie case by showing that
Turner received more severe discipline than a similarly situated white employee,
Thomas Schmitt, under nearly identical circumstances. See Lee, 574 F.3d at
259-61.7 “The employment actions being compared will be deemed to have been
taken under nearly identical circumstances when the employees being compared
held the same job or responsibilities, shared the same supervisor or had their
employment status determined by the same person, and have essentially
comparable violation histories.” Id. at 260. “[W]e require that an employee who
7
We note that the plaintiffs also argue that they established a prima facie case by
showing that Turner did not in fact violate any workplace rule. We need not address this
argument, however, because we conclude that they have met their burden by showing
disparate treatment of a similarly situated white employee. Of course, this does not foreclose
the plaintiffs from presenting evidence to the jury that Turner did not violate a workplace rule
and arguing that the jury can infer discrimination from such evidence.
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No. 09-30558
proffers a fellow employee as a comparator [to] demonstrate that the
employment actions at issue were taken under nearly identical circumstances.”
Id. (internal quotation marks omitted). However, we must keep in mind that we
are reviewing KCSR’s motion for summary judgment, and thus, we “must view
the facts in the light most favorable to” the plaintiffs, WC&M Enters., 496 F.3d
at 397; and KCSR is required to “show[] that there is no genuine dispute as to
any material fact.” Fed. R. Civ. P. 56(a).
Turner was terminated following an incident on October 1, 2002, in which
he and Schmitt were operating a train—Turner, as the engineer, was controlling
the locomotive; Schmitt, as the conductor, was providing instructions to Turner
via radio from the ground—when the damaged engine that their train was
shoving onto a spur track derailed at a low speed. Turner’s letter of termination
stated that Turner was found to have violated KCSR “General Code of Operating
Rules 2.13, 6.22, 6.28, 7.1, 7.12, and 7.2.” The plaintiffs contend that a
comparable employment action for Schmitt was the decision to not discipline him
following the derailment incident for which Turner was dismissed. However,
KCSR argues that this decision was not made under nearly identical
circumstances because Schmitt was found not to be at fault in the derailment
incident. The EEOC points to record evidence—viz., the deposition of Paul
Lobello, who was responsible for investigating this incident for KCSR—which
indicates that Schmitt was also at fault. Therefore, according to the EEOC, the
disparate decisions, most likely made by the same individual, J.R. Thornell, are
comparable. Lobello’s deposition, however, indicates that he believed that
Schmitt and Turner were not necessarily equally at fault.
We need not decide, however, whether Turner’s and Schmitt’s conduct was
“nearly identical” because the plaintiffs have offered another employment action
for Schmitt that we conclude is comparable: the decision to suspend Schmitt for
45 days for a sideswipe incident that occurred on October 30, 2002, only a few
12
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No. 09-30558
weeks after the derailment incident. According to KCSR’s own records relating
to that incident, Schmitt was found responsible for “violation of restricted speed
or the operational equivalent thereof, failure to protect a shoving movement on
the main line resulting in a run through of the crossover switch, [and]
sideswiping 2 hazardous material cars — [General Code of Operating Rules]
1.1.1, 1.6, 2.13, 6.28, 6.5, 7.1, 7.2 and System Timetable No. 5 Rule 1.16.”
Two points convince us that Schmitt’s violations arising from the
sideswipe incident are comparable to Turner’s putative violations in the
derailment incident. First, Schmitt was found to have violated most of the same
workplace rules that Turner was found to have violated. Second, KCSR does not
dispute that there is a meaningful distinction between the rules that Turner and
Schmitt were found to have violated. Instead, KCSR argues that “[g]enerally,
a derailment is a more serious incident than a sideswipe.” KCSR Br. 32 (citing
a statement from the affidavit of KCSR’s Director of Labor Relations that says,
“a derailment is generally a more serious incident than a sideswipe”). In
contrast to this general statement, Paul Lobello, who investigated both the
derailment and sideswipe incidents, testified in his deposition about these
specific incidents. He testified that this sideswipe incident was “more severe”
than the derailment incident in terms of “[t]he damages and the hazardous
material,” and that otherwise, “[t]he circumstances were the same . . . with
regards to the fact that in both instances we had a locomotive engineer that
operated without proper guidance.” “As the Supreme Court has instructed, the
similitude of employee violations may turn on the ‘comparable seriousness’ of the
offenses for which discipline was meted out and not necessarily on how a
company codes an infraction under its rules and regulations,” Lee, 574 F.3d
at 261 (footnote omitted); and we have explained that “[t]he relevant perspective
is that of the employer at the time of the adverse employment decision.” Id. at
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No. 09-30558
261 n.27. Under that standard, and viewing the evidence in the light most
favorable to the plaintiffs, these violations are comparably serious.
Additionally, the record evidence shows that Schmitt and Turner had “the
same . . . responsibilities,” and “had their employment status determined by the
same person.” Id. at 260. Although Turner was an engineer and Schmitt was
a conductor, KCSR does not contend that Schmitt’s responsibilities during the
sideswipe incident were materially different than Turner’s responsibilities
during the derailment incident.8 Further, KCSR has averred that J.R. Thornell
is most likely the person who was responsible for making the decisions to
dismiss Turner and to suspend Schmitt.
We are also satisfied that Turner and Schmitt had “essentially comparable
violation histories.” Id. According to KCSR’s records, Turner had the following
disciplinary history preceding the derailment incident: In December 2000,
Turner was reinstated after having been dismissed in October 1999 for failing
a random alcohol test; in 1988, he was suspended for ten days for a failed brake
test; and in 1982, he received a written reprimand for a deficient train
inspection.9 KCSR acknowledges that Schmitt had the following disciplinary
history preceding the sideswipe incident: In 1999, Schmitt was discharged for
failing to follow directions (and later reinstated); in 1990, he received a written
8
Indeed, KCSR quotes its own General Code of Operating Rule 1.47 as providing:
“[T]he conductor and the engineer are responsible for the safety and protection of their train
[and] observance of the rules . . . . [I]f any doubts arise concerning the authority for proceeding
or safety, the conductor must consult with the engineer who will be equally responsible for the
safety and proper handling of the train.”
9
The record in this case also includes a 1974 drug test for Turner that showed “a long
acting barbiturate,” but there is no indication that Turner was disciplined as a result of this
test, and KCSR does not include this incident in its chart of Turner’s “[d]iscipline [h]istory at
[t]ime of [v]iolation.” KCSR Br. 62.
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No. 09-30558
reprimand;10 and in 1988, he received two written reprimands and was later
discharged for failing an alcohol test following a derailment in which he was the
brakeman. In sum, Turner had one prior violation serious enough to warrant
dismissal and one violation serious enough to warrant a short suspension; on the
other hand, Schmitt had two previous infractions serious enough to warrant
dismissal both times. These employment histories, which are marked by a
comparable number of serious violations by train operators with similar
responsibilities, are sufficiently similar to require comparison. See id. at 261-62.
KCSR argues that Turner’s and Schmitt’s employment histories are not
comparable because Schmitt’s positive alcohol test occurred many years before
the sideswipe incident when he was acting as a brakeman, whereas Turner’s
positive alcohol test occurred two years before the derailment incident when
Turner was an engineer. However, these distinctions do not render Turner’s and
Schmitt’s employment histories incomparable. We have “emphasize[d] . . . that
this Circuit’s ‘nearly identical’ standard is not equivalent to ‘identical.’” Id. at
260 n.25; see also id. at 260 (“We do not . . . interpret ‘nearly identical’ as
synonymous with ‘identical.’”); id. at 261 (“Each employee’s track record at the
company need not comprise the identical number of identical infractions . . . .”).
A requirement of something more stringent than nearly identical employment
histories would run afoul of the Supreme Court’s instruction that “[t]he burden
of establishing a prima facie case of disparate treatment is not onerous.”
Burdine, 450 U.S. at 253. It is also worth noting that Schmitt’s positive alcohol
test occurred in connection with an incident in which a train derailed, whereas
Turner’s test was a random test unrelated to any incident. Therefore, Schmitt’s
alcohol incident was not so much less serious than Turner’s as to undermine our
conclusion that Schmitt and Turner had comparable employment histories.
10
Turner also points out that the record shows that Schmitt was issued a second
written reprimand in 1990.
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No. 09-30558
The parties also quarrel over the significance of Turner’s December 2000
reinstatement order. KCSR contends that “Turner’s recent reinstatement was
on a ‘last-chance’ basis, meaning he could be dismissed for any further
violations.” KCSR Br. 32; see also id. at 33 (“The order d[id] not limit [Turner’s]
last-chance status to alcohol/drug violations, nor d[id] it preclude his dismissal
for other violations, such as derailment.”). According to KCSR, Schmitt was not
similarly situated to Turner because he was not on a “last-chance basis” at the
time of the sideswipe incident. The EEOC responds that the reinstatement
order was related only to drug and alcohol testing and there was no allegation
that Turner was intoxicated or refused a drug or alcohol test in relation to the
derailment incident; thus, the reinstatement order was not implicated.
We agree that the mere fact of the reinstatement order does not render
Turner’s disciplinary history incomparable to Schmitt’s. The reinstatement
order provided only that a violation of any of its terms would be “sufficient
grounds for [Turner’s] permanent dismissal,” and the derailment incident did
not implicate any of the terms of the reinstatement order. Therefore, the
derailment incident did not, based on the terms of the reinstatement order,
provide “sufficient grounds” to dismiss Turner. Moreover, in the same period of
time that Turner had been dismissed and later reinstated, Schmitt had also been
discharged, for failing to follow directions, and later reinstated. Thus, Schmitt’s
disciplinary history is comparable to Turner’s, despite the reinstatement order.
KCSR may still argue to the jury that these distinctions between Turner’s
and Schmitt’s infractions and employment histories account for the difference
in their discipline; however, we cannot say that, viewing the evidence in the light
most favorable to the plaintiffs, these distinctions show that the employment
actions were not taken under nearly identical circumstances. Therefore, we
conclude that the plaintiffs have met their burden to establish a prima facie case
of discrimination with regard to the decision to dismiss Turner.
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No. 09-30558
ii.
We also conclude that the EEOC has met its burden to establish a prima
facie case of discrimination with regard to the decision to dismiss Lester Thomas
by showing that a white employee, Joshua Hall, was disciplined less severely
than Thomas under nearly identical circumstances.11
Thomas was dismissed following an incident in February 2004 in which
the train that he and Hall were operating—Thomas was the conductor and Hall
was the engineer—failed to stop within the appropriate distance of a “dark
signal” during an unannounced safety test. Hall was initially dismissed, then
reinstated thirty days later. KCSR’s Disciplinary Action Reports for Thomas
and Hall, generated after the investigation and hearing to determine whether
any workplace rules were violated, both specify that Thomas and Hall committed
the exact same infractions: “[General Code of Operating Rules] 1.1.1, 8.9, 8.9.1,
8.10 & TT No. 5[,] Page 198, Item 9[.] Failure to control train in accordance with
a signal displaying a dark aspect at S. LaBarre in addition to f/t update consist
after picking up cars from Baton Rouge Yard while serving as [‘Engineer’ in
Hall’s case, and ‘Conductor’ in Thomas’ case] of the INOKC.” Therefore, it is
abundantly clear that Thomas’ and Hall’s violations “were essentially the same.”
Lee, 574 F.3d at 260 n.25.
KCSR argues that Thomas and Hall were not equally at fault for two
reasons: “First, only Thomas failed to update the train consist, and thereby
committed rule violations that Hall did not.” KCSR Br. 39. However, KCSR’s
Disciplinary Action Reports for Thomas and Hall state that both men were found
11
The EEOC argues also, as it did for Turner, see supra note 4, that it established a
prima facie case by showing that Thomas did not in fact violate any workplace rule. As with
Turner, we need not reach this argument because we conclude that the EEOC has met its
burden by showing disparate treatment of a similarly situated white employee. Accordingly,
we make the same observation here that we made with regard to Turner’s claim: Our decision
does not foreclose the EEOC from presenting evidence to the jury that Thomas did not violate
a workplace rule and arguing that the jury can infer discrimination from such evidence.
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No. 09-30558
to have failed to update the consist. Therefore, the record does not support
KCSR’s assertion. Second, KCSR argues that Thomas was more at fault for the
failure of the train to timely stop because “[Thomas], but not Hall, failed to
diligently watch for the signal as the rules require.” Id. However, in McDonald
v. Santa Fe Trail Transportation Co., 427 U.S. 273 (1976), the Supreme Court
expressly rejected the argument that in order to establish a prima facie case the
plaintiffs “were required to plead with ‘particularity’ the degree of similarity
between their culpability in the alleged theft and the involvement of the favored
coemployee.” Id. at 283 n.11. Instead, the Court held that “precise equivalence
in culpability between employees is not the ultimate question.” Id. The ultimate
question is “the ‘comparable seriousness’ of the offenses.” Lee, 574 F.3d at 261,
260 n.25; see also McDonald, 427 U.S. at 283 n.11. Viewed in the light most
favorable to the EEOC, Thomas’s and Hall’s offenses are comparably serious.
KCSR does not allege that Thomas and Hall are incomparable because of
differences in their responsibilities; nor does it allege that the employment
status of each was determined by different people. The only remaining issue is
whether Thomas and Hall “have essentially comparable violation histories.” Lee,
574 F.3d at 260. We conclude that they do. KCSR’s only argument about why
their histories are incomparable is based on the fact that Thomas had a greater
number of violations than Hall—Thomas had eight infractions in his disciplinary
history whereas Hall had only four. See KCSR Br. 39-40, 63. However, as the
EEOC correctly points out, Thomas began working for KCSR in 1981, whereas
Hall was hired in 2000. As we said in Lee, “[e]ach employee’s track record at the
company need not comprise the identical number of identical infractions, albeit
these records must be comparable.” 574 F.3d at 261. In Lee, we concluded that
“employment histories marked by a comparable number of serious moving
violations” were comparable by looking only at the violations that had occurred
“[d]uring the same period.” Id. In this case, in the four years preceding the
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No. 09-30558
incident, during which time Thomas and Hall both worked at KCSR, Thomas
had five violations to Hall’s four;12 both of them had three moving violations; and
Hall was disciplined for an incident involving a sideswipe and another involving
a derailment, whereas Thomas was cited for only one derailment. We must view
the facts in the light most favorable to the EEOC, and KCSR must show the
absence of a genuine dispute of material fact to be entitled to summary
judgment. However, KCSR has made no argument about why Thomas’ and
Hall’s infractions are incomparable. Thus, we conclude that Hall is a proper
comparator whom the district court erroneously rejected.
iii.
The EEOC contends that it established a prima facie case of
discrimination with regard to the 90-day suspension of Jesse Frank for a missed
call because Frank Mouney is a valid comparator, and Mouney was disciplined
less severely than Frank under nearly identical circumstances. We disagree
because Frank’s and Mouney’s employment histories are not sufficiently similar.
See Lee, 574 F.3d at 261-62. There are some similarities in their employment
histories: Frank was hired in 1972 and Mouney in 1978; Frank’s first recorded
violation was in 1985 and Mouney’s was in 1984; and both had a comparable
number of violations for missed calls. However, there are also critical
differences: Frank had significantly more moving violations than Mouney,
including one that resulted in Frank having his engineer’s license suspended;
and unlike Mouney, Frank was discharged in 1997 due to a failed alcohol test.
Therefore, we conclude that Frank’s and Mouney’s employment records are not
“essentially comparable,” id. at 260; and thus, that the EEOC has not
12
KCSR mistakenly claims that “[s]ix of [Thomas’] prior incidents occurred between
January 2002 and January 2004.” KCSR Br. 40. That misstatement is belied by KCSR’s own
chart, which reveals that Thomas had five infractions in that period. Id. at 63.
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No. 09-30558
established a prima facie case of discrimination for the decision to suspend
Frank for ninety days for a missed call.
iv.
With respect to the decision to dismiss Clarence Cargo, the EEOC
contends only that it established a prima facie case based on its “same incident
test.” See supra note 4. However, the EEOC failed to argue before the district
court that under McDonald, 427 U.S. 273, it could establish a prima facie case
simply by showing that two employees of different races received disparate
treatment from their participation in the same incident. Thus, we will not
consider this argument for the first time on appeal. See Nasti, 492 F.3d at 595.
IV.
Having concluded that the plaintiffs established a prima facie case of
discrimination with respect to the decisions to dismiss Turner and Thomas, we
turn to decide whether KCSR has met its burden at the second step of the
McDonnell Douglas analysis, viz., to produce admissible evidence that these
decisions were based on legitimate, nondiscriminatory reasons. We conclude
that KCSR has failed to meet this burden.
In Texas Department of Community Affairs v. Burdine, 450 U.S. 248
(1981), the Supreme Court explained that “[t]he nature of the burden that shifts
to the defendant should be understood in light of the plaintiff’s ultimate and
intermediate burdens.” Id. at 253. The plaintiff’s “ultimate burden” is to
“persuad[e] the trier of fact that the defendant intentionally discriminated
against the plaintiff.” Id. The defendant’s intermediate burden “serves to bring
the litigants and the court expeditiously and fairly to this ultimate question.”
Id. At the same time, “[t]he burden that shifts to the defendant . . . is to rebut”
the “presumption that the employer unlawfully discriminated against the
employee,” which presumption arises from the “[e]stablishment of the
[plaintiff’s] prima facie case.” Id. at 254. While the defendant is not required to
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No. 09-30558
“persuade the court that it was actually motivated by the proffered reasons,” in
order to satisfy its burden, “the defendant must clearly set forth, through the
introduction of admissible evidence, the reasons for [its decision].” Id. at 254-55.
“An articulation not admitted into evidence will not suffice. Thus, the defendant
cannot meet its burden merely through an answer to the complaint or by
argument of counsel.” Id. at 255 n.9. “If the defendant carries this burden of
production, the presumption raised by the prima facie case is rebutted, and the
factual inquiry proceeds to a new level of specificity,” id. at 255 (footnote
omitted); that is, “the inquiry . . . turns from the few generalized factors that
establish a prima facie case to the specific proofs and rebuttals of discriminatory
motivation the parties have introduced,” St. Mary’s Honor Ctr. v. Hicks, 509 U.S.
502, 516 (1993). “Placing this burden of production on the defendant thus serves
simultaneously to meet the plaintiff’s prima facie case by presenting a legitimate
reason for the action and to frame the [ultimate] factual issue [of discrimination
vel non] with sufficient clarity so that the plaintiff will have a full and fair
opportunity to demonstrate pretext. The sufficiency of the defendant’s evidence
should be evaluated by the extent to which it fulfills these functions.” Burdine,
450 U.S. at 255-56.
For more than four years, KCSR misidentified the relevant decisionmaker,
and by the time the likely decisionmaker was identified, that person could no
longer remember making the decisions to dismiss Turner and Thomas. During
the EEOC’s investigation and throughout the initial phases of discovery in this
case, KCSR identified the pertinent decisionmakers as Paul Lobello and Robert
Lane Bonds, the KCSR employees who had investigated the incidents involving
Turner and Thomas. However, when the EEOC later deposed Lobello and
Bonds, they testified that they did not make the dismissal decisions. Bonds
testified that J.R. Thornell, KCSR’s General Superintendent of Transportation
from 2002 to 2005, decided to dismiss Thomas (and to dismiss and later reinstate
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No. 09-30558
Joshua Hall). In 2008—six years after the decision to dismiss Turner and four
years after the decision to dismiss Thomas—KCSR finally responded to the
EEOC’s third request for admissions by admitting that Thornell had made the
decisions to terminate Turner and Thomas. However, in the same response,
KCSR explained that “Thornell has no present recollection regarding” these
decisions. Later that year, in a deposition conducted by the EEOC, Thornell
testified that he could not remember making these decisions; and in a
declaration subsequently submitted by KCSR, Thornell stated:
3. As the General Superintendent, I was the person
responsible for making disciplinary decisions regarding
Transportation employees, including engineers and conductors.
4. In making these disciplinary decisions, I would review
the transcript of the investigation into the incident and the subject
employee's disciplinary history. I also relied on the disciplinary
policy in effect at the time. On many occasions I would consult with
others, including the investigating officer or the Director of Labor
Relations, before making a determination.
5. I cannot be completely sure that I made the disciplinary
decisions at issue in this case pertaining to Thomas Turner . . . and
Lester Thomas. While it was my responsibility at the time to make
these decisions, if I was absent I may have delegated the decision to
someone else, primarily the Assistant Superintendent.
6. I do not have any specific recollection of the disciplinary
actions or decisions that are at issue in this case. I made many
hundreds of these decisions during my tenure as General
Superintendent and none of them stand out. Additionally, I have
had some very serious health problems over the last several years,
which have impaired my memory.
It is undisputed that the Assistant Superintendent mentioned by Thornell
was A.J. Sonnier, who died during the litigation in this case. There is no
deposition testimony, affidavit, or declaration from Sonnier in the record. Thus,
Thornell’s own declaration casts doubt on KCSR’s admission that Thornell was
in fact the relevant decisionmaker. In sum, the fact that KCSR misidentified the
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No. 09-30558
relevant decisionmaker for so long makes it now impossible to know whether
Thornell or Sonnier made the decisions to dismiss Turner and Thomas.
The character of the plaintiffs’ ultimate burden depends on whether
Sonnier or Thornell made the relevant decisions—that is, they must prove that
the actual decisionmaker was motivated by race in taking the adverse
employment action. Thus, the nature of the defendant’s intermediate burden
also depends on whether Sonnier or Thornell made the relevant decisions.
Burdine, 450 U.S. at 253 (“The nature of the burden that shifts to the defendant
should be understood in light of the plaintiff’s ultimate and intermediate
burdens.”).13 We note, for example, that there is extensive record evidence of
race-based comments by Sonnier, which, if he were the actual decisionmaker,
would be extremely probative of intentional discrimination. The purpose of
“[t]he McDonnell Douglas division of intermediate evidentiary burdens [is] to
bring the litigants and the court expeditiously and fairly to th[e] ultimate
question” of whether “the defendant intentionally discriminated against the
plaintiff.” Burdine, 450 U.S. at 253 (emphasis added). By misidentifying the
relevant decisionmaker for so long, KCSR has not acted to bring us expeditiously
and fairly to this ultimate question. KCSR is no stranger to Title VII
13
See Patrick v. Ridge, 394 F.3d 311, 319 (5th Cir. 2004) (“As the ultimate issue is the
employer’s reasoning at the moment the questioned employment decision is made, a
justification that could not have motivated the employer’s decision is not evidence that tends
to illuminate this ultimate issue and is therefore simply irrelevant at this stage of the
inquiry.”); Sabree v. United Bhd. of Carpenters & Joiners Local No. 33, 921 F.2d 396, 404 (1st
Cir. 1990) (“Unless . . . a defendant articulates a legitimate non-discriminatory reason that
actually motivated the decision, the reason is legally insufficient.” (internal quotation marks
omitted)); cf. Russell v. McKinney Hosp. Venture, 235 F.3d 219, 227 (5th Cir. 2000) (“We . . .
look to who actually made the decision” because the ultimate issue is the discriminatory
animus of that person.).
23
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No. 09-30558
employment discrimination litigation,14 and it would behoove KCSR to discharge
its burden with greater acuity.
Nonetheless, the parties do not dispute that Thornell likely made the
decisions to dismiss Turner and Thomas; and instead, they focus their
arguments on the evidence that KCSR contends satisfies its burden. We agree
with the plaintiffs that this evidence is insufficient. KCSR asserts in its brief
that “[i]n determining the discipline to be issued to Turner, KCSR management
considered the information contained in the transcript [of the investigative
hearing], the hearing officer’s assessment of the evidence, and Turner’s previous
disciplinary history.” KCSR Br. 8. Likewise, with respect to the discipline of
Thomas, KCSR asserts that “KCSR management reviewed the hearing
transcript and Thomas’ disciplinary record to determine the appropriate
discipline.” KCSR Br. 11. Because the “argument of counsel” cannot satisfy the
defendant’s burden, Burdine, 450 U.S. at 255 n.9, we must consider the specific
evidence that KCSR cites in support of these assertions. We conclude that the
evidence that KCSR cites fails to satisfy its burden of production.
KCSR first cites a paragraph from an affidavit of KCSR’s Director of Labor
Relations, Kathleen Alexander.15 However, that paragraph indicates only that
Thornell was likely the decisionmaker, and does not explain the reasons for
Thornell’s decisions.
Next, KCSR cites Thornell’s declaration. However, this particular
declaration does not satisfy the railroad’s burden of production. It did not
14
See, e.g., Lee v. KCSR, 574 F.3d 253 (5th Cir. 2009); Hannawacker v. KCSR, 326 F.
App’x 269 (5th Cir. 2009) (unpublished); Abner v. KCSR, 513 F.3d 154 (5th Cir. 2008); Carter
v. KCSR, 456 F.3d 841 (8th Cir. 2006); Grappe v. KCSR, 71 F. App’x 302 (5th Cir. 2003)
(unpublished); Baylor v. KCSR, 31 F. App’x 833 (5th Cir. 2002) (unpublished).
15
Alexander’s affidavit states: “During the time period that J.R. Thornell served as the
General Superintendent of Field Operations for [KCSR] he was the designated employee to
make the disciplinary decisions for all Brakemen Trainees, Conductors, and Locomotive
Engineers (‘Train and Engine’ or ‘T & E’ employee).”
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No. 09-30558
attempt to have Thornell tie his usual practice to the particular decisions made
here. Neither did the declaration say that Thornell looked anew at the evidence
available at the time of the discipline, nor that Thornell looked at the discharge
letters the railroad sent the employees and believed that the letters properly
reflected the decisions he would have made. Indeed, Thornell’s saying that he
might not have been the decision-maker likely eliminates its sufficiency on
summary judgment. A declaration from someone who acknowledges he may not
even have been the decision-maker and makes no effort to re-evaluate what he
would have done at the time based on what would have been before him,
produces nothing to support the employer’s evidentiary burden.16
KCSR then cites Turner’s and Thomas’ discharge letters, which it says “set
forth the grounds on which the Charging Parties were disciplined.” KCSR
Br. 53. Although the discharge letters state that Turner and Thomas were found
to have violated certain workplace rules, they do not provide any reason for
Thornell’s decisions to dismiss these employees: The letters are not signed by
Thornell; they do not mention the employees’ disciplinary histories; and they do
not give any indication that they reflect Thornell’s reason for choosing to dismiss
the employees, as opposed to merely suspending them. The investigating officers
who signed those letters both testified that they had no part in assessing the
chosen discipline, and were unclear about Thornell’s reason for dismissing
Turner and Thomas. Moreover, Bonds, who investigated Thomas’s incident and
signed Thomas’s discharge letter, testified that he “didn’t understand the
reasoning” behind Thornell’s decision to fire Thomas but reinstate Hall, and that
16
KCSR contends that Mayberry v. Vought Aircraft Co., 55 F.3d 1086 (5th Cir. 1995),
supports its argument that Thornell’s declaration satisfies its burden; however, that case does
not help KCSR’s position. The parties in Mayberry did not dispute that the defendant
employer had met its burden; and the defendant employer’s summary judgment evidence
included an affidavit giving a specific reason for the employer’s decision to suspend the
plaintiff employee. See id. at 1091-92; see also Brief for Appellant at 5, 13, Mayberry v. Vought
Aircraft Co., 55 F.3d 1086 (5th Cir. 1995) (No. 94-10825), 1994 WL 16507696, at *5, *13.
25
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No. 09-30558
it “seem[ed] odd” because “[i]n the past, if a crew was fired, the crew came back
together.”
KCSR next cites “[t]he transcripts of the investigative hearings,” which
again, it asserts “set forth the grounds on which discipline was decided.” KCSR
Br. 53. However, the hundreds of pages of transcripts that KCSR cites discuss
only the circumstances of the incidents in which Turner, Frank, and Cargo were
involved. (There is no transcript of any hearing related to Thomas’ case.) The
transcripts do not, as KCSR asserts, include any reason for why the particular
disciplinary decisions were made. Indeed, the transcripts do not even include
a determination about whether or not the employees violated a workplace rule.
Finally, KCSR cites “[t]he letters from Denise Brame[, KCSR’s Manager
of Labor Relations,] and Kathleen Alexander[, KCSR’s Director of Labor
Relations,] denying the appeals of the Charging Parties”; and “[t]he decisions of
the various arbitral boards uphold[ing] the reasons for the disciplinary
decisions.” Id. However, these documents are insufficient. The letters from
Brame and Alexander regarding Turner—there are no letters regarding Thomas’
case—merely state, as did the discharge letter from Lobello, that the
investigative hearing showed that Turner had violated company rules. The
letters do not mention Thornell or his decision to dismiss Turner. The same is
true of the decision of the Public Law Board with regard to Turner (again, there
is no decision related to Thomas’ case): It does not mention, nor give any reason
for Thornell’s decision to dismiss Turner. In fact, the Public Law Board decision
is at odds with Thornell’s dismissal decision: The Board decided that Turner’s
violation warranted only a long suspension. Thus, that decision does not provide
KCSR with a legitimate, nondiscriminatory reason for the decision to dismiss
Turner. Moreover, the letters and Board decision reflect decisions of people
other than Thornell, made after Thornell’s challenged decisions. Accordingly,
they do not give any reason for Thornell’s decisions at the time that he made
26
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No. 09-30558
those decisions, and thus cannot satisfy KCSR’s burden. See Burdine, 450 U.S.
at 254-55; Patrick, 394 F.3d at 319 (“As the ultimate issue is the employer’s
reasoning at the moment the questioned employment decision is made, a
justification that could not have motivated the employer’s decision is not
evidence that tends to illuminate this ultimate issue and is therefore simply
irrelevant at this stage of the inquiry.”).
Therefore, we hold that KCSR has not met its burden at this stage of the
inquiry of producing legitimate, nondiscriminatory reasons that motivated the
actual employment decisions at issue here.17
V.
“In the context of an employer’s motion for summary judgment seeking
dismissal of an employee’s discrimination [claims], a holding that the employer’s
offered reasons for its adverse decision does not fulfill its burden of production
under McDonnell Douglas is the legal equivalent of the employer’s having
produced no reason at all.” Patrick, 394 F.3d at 320. Thus, because “the
plaintiff[s] . . . ha[ve] produced evidence sufficient to make out a prima facie
case” with respect to the discipline of Turner and Thomas, “and the defendant
employer has failed to rebut the presumption of discrimination with evidence of
a legitimate, nondiscriminatory reason for its employment decision, the
[plaintiffs] [are] entitled to take [their] case to a jury.” Id. at 316 (citing Fisher
v. Vassar Coll., 114 F.3d 1332, 1335 (2d Cir. 1997) (en banc), abrogated on other
grounds by Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000)); see
also id. at 320 (“As we hold that the [defendant employer] has not met its burden
of producing a legitimate, non-discriminatory reason, we never reach the
question whether [the plaintiffs] could demonstrate pretext, much less whether
17
We need not and do not offer any opinion on whether any of this evidence is relevant
to or admissible at trial to show that the employment decisions were not motivated by
discriminatory animus.
27
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No. 09-30558
discrimination actually motivated [their] employer’s decision [at issue]. [The
plaintiffs’] prima facie case thus pretermits summary judgment dismissal of
[their] action, leaving the ultimate question of discriminatory animus to be
determined by the trier of fact.”).
We therefore affirm the district court’s grant of KCSR’s motion for
summary judgment on the discrimination claims related to the decisions to
discipline Jesse Frank and Clarence Cargo, but reverse on the claims related to
the decisions to dismiss Turner Thomas and Lester Thomas; and we remand this
case for further proceedings consistent with this opinion.
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No. 09-30558
OWEN, Circuit Judge, concurring in the judgment in part and dissenting in
part:
I would affirm the district court’s judgment in its entirety. I therefore
concur in the judgment the panel majority reaches in its disposition of the claims
of Jesse James Frank and Clarence Cargo. I do not agree with all of the
opinion’s reasoning with regard to those claims and therefore join in the
judgment only. I dissent with respect to the claims asserted by Thomas Turner
and Lester Thomas because I would affirm the district court’s grant of summary
judgment in favor of Kansas City Southern Railway Company (KCSR).
I
There is error in the panel majority opinion that pervades its analysis of
Thomas Turner’s claims. First, at the second stage of the familiar burden-
shifting framework set forth in McDonnell Douglas Corp. v. Green,1 KCSR was
required to produce evidence of a legitimate, nondiscriminatory reason for its
adverse employment action against Turner, not why it chose termination instead
of a lesser disciplinary action or why it did not terminate other employees for
similar violations.2 KCSR has met its burden of production because there is
evidence that Turner violated operational rules, termination was within the
range of options for disciplining such violations, and Turner was told he was
terminated due to those violations. Second, the panel majority opinion
incorrectly focuses only on whether there is evidence of the reason that J. R.
Thornell decided to terminate Turner. The majority’s opinion rejects KCSR’s
1
411 U.S. 792, 803 (1973).
2
Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 252-53 (1981); Mayberry v.
Vought Aircraft Co., 55 F.3d 1086, 1091 (5th Cir. 1995) (holding in a work-rule violation case
that “by insisting that there was no racial motivation in its decision to suspend Mayberry
[and] that the decision was based solely on its conclusion, following an investigation, that
Mayberry was at least partially at fault . . . [the employer] has discharged its burden of
production.”).
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arguments that Thornell was not the final decision-maker and that two
independent internal reviews were thereafter conducted as to whether Turner
had violated operational rules and whether the discipline for those violations
was appropriate. Evidence regarding these reviews establishes a neutral reason
for the actions that KCSR took.3 In fact, after the two internal reviews of the
disciplinary action taken against Turner, a third review was conducted by a
three-member Public Law Board that included a union representative and a
neutral public member. The Board unanimously held: “[u]pon the whole record
and all the evidence, . . . shoving the disabled engine over a derail can be
attributed to [Turner’s] negligence in not following the Rules.” However, the
Board converted the termination “to a long suspension,” which amounted to
more than a year, and directed that Turner be reinstated without back pay. The
Board also admonished that, “[t]he next time [Turner] faces a disciplinary
hearing for any infraction of the Rules, the next Board will surely weigh the two
dismissals that were converted to long suspensions in judging the severity of the
discipline.”
Evidence that KCSR had a legitimate, non-discriminatory reason for
concluding that Turner violated operational rules and terminating him abounds.
I am mystified how the panel majority can conclude otherwise.
A
If the record before us does not contain evidence of a non-discriminatory
reason for terminating Turner, very few records would satisfy the other two
members of this panel. Within two weeks after the derailment, KCSR held an
extensive hearing, with sworn testimony that was transcribed, about the cause
of the derailment. The record of that hearing is voluminous. The entire focus
of Turner’s disciplinary proceedings at each stage was the cause of the
3
Lieberman v. Gant, 630 F.2d 60, 65 (2d Cir. 1980) (“It is enough for the defendants in
the second phase of the case to bring forth evidence that they acted on a neutral basis.”).
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derailment and who was at fault. In fact, there is no evidence that Turner was
terminated for any reason other than his fault in the derailment, except for the
alleged disparate treatment of other employees, which will be discussed in more
detail below. While Turner continues to dispute any wrongdoing in causing the
derailment, the evidence is overwhelming that KCSR thought that he was
primarily, if not solely, at fault, and that he had violated operational rules.
“[E]ven an incorrect belief that an employee’s performance is inadequate
constitutes a legitimate, nondiscriminatory reason” for an adverse employment
action.4
There is sufficient evidence to satisfy the employer’s burden of production
in the burden shifting framework in employment discrimination cases.5
Contrary to the majority opinion, the evidence frames the issue “with sufficient
clarity so that the plaintiff will have a full and fair opportunity to demonstrate
pretext.”6
B
The panel’s majority opinion mistakenly focuses on the initial decision to
terminate Turner. P. A. Lobello testified that after presiding over the
evidentiary hearing, he concluded that Turner had violated operational rules
and that those violations had resulted in the derailment. But Lobello did not
decide the disciplinary action to be taken. He identified Thornell as the
individual who made that decision. However, this was not the final employment
decision. Two independent investigations were subsequently conducted within
4
Mayberry, 55 F.3d at 1091 (quoting Little v. Republic Ref. Co., 924 F.2d 93, 97 (5th
Cir. 1991)).
5
See St. Mary’s Honor Center v. Hicks, 509 U.S. 502, 506-07 (1993); Tex. Dep’t of Cmty.
Affairs v. Burdine, 450 U.S. 248, 254 (1981).
6
Burdine, 450 U.S. at 255-56.
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KCSR, and evidence of the reasons given for Turner’s discipline at the conclusion
of each of those reviews must be considered.
There is evidence that after Turner received the letter dated October 23,
2002, signed by Lobello, which said that Turner had violated seven specified
operating rules and that Turner was terminated, two subsequent independent
internal reviews occurred at Turner’s request First, Turner’s union
representative appealed the disciplinary ruling in Lobello’s letter to Denise
Brame, an African American whose title was Manager-Labor Relations. In a
letter dated February 3, 2003, Brame informed Turner’s representative that she
had “carefully reviewed the transcript of the formal investigation held and the
discipline assessed” and that she had concluded that “[t]he discipline issued in
this case was fully warranted and clearly supported by the facts adduced at the
formal investigation.” The letter set forth the specific violations committed by
Turner. The letter further stated
Mr. Turner received due process in accordance with the Collective
Bargaining Agreement. As a result, the formal investigation was
fair and impartial. There was no showing of any arbitrary or
capricious action against Mr. Turner by the Carrier, nor could the
penalty issued be determined as unwarranted or excessive due to
the importance of the proven rule violations.
This is admissible evidence of the reason articulated by KCSR for
terminating Turner, and it is sufficient to meet KCSR’s burden of production,
even if there were no other evidence of why Turner was terminated.
A second internal review of Turner’s termination occurred after Brame
sent her letter. Kathleen Alexander, whose title was Director of Labor Relations
for KCSR, informed Turner’s representative in a letter dated May 8, 2003, that
Turner’s request for reinstatement and lost pay remained declined because
Turner “was afforded a fair and impartial investigation and the transcript
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clearly proved that Claimant was guilty of the rules violations with which he
was charged.”
Turner pursued a further appeal to the Public Law Board, which consisted
of a union representative, a KCSR member, and a neutral member. The Public
Law Board likewise concluded that Turner was at fault in connection with the
derailment, but the Board converted his dismissal to a long suspension and
directed that he be reinstated without back pay.
The initial decision to terminate Turner, whether made by Thornell or
another KCSR employee, was not “rubber-stamped” by any of those involved in
the subsequent investigations of whether Turner had violated operational rules
and the appropriate punishment.7 Evidence regarding KCSR’s entire process in
disciplining Turner should be considered.
The facts before us are similar to, though far less damning than, those
before the Seventh Circuit in Jennings v. Illinois Department of Corrections.8 In
Jennings, a correctional officer was terminated for smuggling contraband into
a prison and trading that contraband with inmates for goods from the prison
commissary.9 Jennings contended that he was terminated and denied “a last-
chance settlement agreement” because he was Mexican-American.10 There was,
in the words of the Seventh Circuit, “a plethora of evidence of discriminatory
remarks and comments” about Mexican-Americans in general and Jennings,
personally, by two individuals involved in investigating Jennings and
recommending his termination, including the prison’s warden.11 There was also
7
See generally Mato v. Baldauf, 267 F.3d 444, 450 (5th Cir. 2001).
8
496 F.3d 764 (7th Cir. 2007).
9
Id. at 766.
10
Id. at 766.
11
Id.
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evidence that “non-Mexican-Americans were treated more favorably when
caught engaging in prohibited conduct.”12 However, the Seventh Circuit looked
beyond the two individuals’ improper motivations.13 That court considered
evidence that the warden had initiated an investigation against Jennings, in the
course of which an independent investigator interviewed eight inmates and
Jennings and concluded that Jennings engaged in the charged conduct.14 The
evidence also revealed that the other individual who had made racially charged
statements recommended a hearing before the correctional center’s Employee
Review Board after the independent investigation had concluded.15 That Board
recommended discharge, and the warden signed the discharge.16 The Illinois
Department of Central Management Services approved the discharge.17 The
Seventh Circuit held that even assuming Jennings had made a prima facie case,
the employer had met its burden of proffering a legitimate explanation of its
adverse employment action by offering evidence of the independent investigation
and independent arbitrator’s conclusions that Jennings had engaged in trading
and trafficking, which was prohibited conduct.18
In the present case, the decisional process beyond Thornell’s involvement
must be considered and provides evidence of a legitimate, nondiscriminatory
reason for Turner’s termination. When evidence of that process is considered,
the district court’s ruling as to Turner must be affirmed.
12
Id.
13
Id. at 768.
14
Id.
15
Id.
16
Id.
17
Id.
18
Id. at 768-69.
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No. 09-30558
C
The panel majority concludes that the affidavit from J. R. Thornell, dated
almost seven years after the derailment, is no evidence at all of a legitimate,
nondiscriminatory reason for the adverse employment action against Turner.
I disagree. Thornell’s affidavit is entirely consistent with all of the
contemporaneous evidence of the reason for Turner’s discharge. Furthermore,
Turner knew that Thornell was involved in the disciplinary actions against him
as early as the initial evidentiary hearing held within two weeks after the
derailment. The panel majority nevertheless takes KCSR to task for not
identifying Thornell sooner than it did in answers to discovery requests.
The panel majority apparently would require Thornell to explain why he
disciplined Turner by terminating him, instead of some lesser sanction, and to
further explain why he did not terminate other employees who violated
operational rules. KCSR is not required to come forward with such evidence at
the second stage of the burden-shifting framework of McDonnell Douglas. As the
Second Circuit has explained, the employer does not have the burden at the
second stage of rebutting pretext.19 Such a “requirement would place on the
employer at the second stage of the McDonnell Douglas process ‘the burden of
showing that the reason for the rejection was not a pretext, rather than
requiring such proof from the employee as a part of the third step.’”20
Thornell avers in his declaration that as General Superintendent of
Transportation, he “was the person responsible for making disciplinary
decisions” regarding employees, although at times, another employee made such
decisions. Thornell “made many hundreds of these decisions” and has no specific
recollection of Turner’s case. However, Turner recalls that Thornell was having
19
Lieberman v. Gant, 630 F.2d 60, 65 (2d Cir. 1980).
20
Id. (quoting Bd. of Trustees of State College v. Sweeney, 439 U.S. 24, 24-25 n.1 (1978)).
35
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a discussion with Lobello outside the hearing room prior to the evidentiary
hearing held shortly after the derailment. Turner knew that Thornell was
involved in the decision-making process and tried to discuss his case with
Thornell as Thornell and Lobello were conversing. Thornell rebuffed Turner’s
effort.
Lobello testified in his deposition in the present case that Thornell made
the decision to terminate Turner after the hearing had concluded. Therefore,
there is evidence that Thornell was the initial decision-maker regarding the
consequences of Turner’s violations of operating rules.
Thornell affirmatively states how he reached disciplinary decisions. He
would review the transcript of the investigation into the incident and the
employee’s disciplinary history. He also relied on the disciplinary policy in effect
at the time. He states that he never made a decision based on race. The
affidavit is cumulative of considerable other evidence of the reason for Turner’s
discharge and is some evidence of a legitimate, nondiscriminatory reason for
discharging Turner. But even if the affidavit were not part of the record, there
is more than sufficient evidence of a legitimate, non-discriminatory action for the
employment decision.
Contrary to the majority opinion, all of the evidence presented by KCSR
regarding Turner’s violation of operational rules and his termination frames the
issue “with sufficient clarity so that the plaintiff will have a full and fair
opportunity to demonstrate pretext.”21 I strongly disagree with the majority’s
conclusion otherwise.
D
The district court held that Thomas Turner, an African American, failed
to establish a prima facie case of racial discrimination, and I would affirm the
21
Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 255-56 (1981).
36
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district court. Turner does not contend and cannot establish that after he was
terminated and before his reinstatement, he was replaced with a white person.
Turner’s position was not filled, and no engineers were hired at the New Orleans
facility during this time period. Instead, Turner contends that he was
disciplined more severely than other white employees. In order to establish a
prima facie case on such a basis, Turner “must show that white employees were
treated differently under circumstances ‘nearly identical’ to his.”22 Turner’s
circumstances are not similar enough to either of his proposed comparators
(Schmitt and Mouney) to show disparate treatment. For the same reason,
Turner cannot show that KCSR’s legitimate, nondiscriminatory reason for his
dismissal was pretextual.
Turner’s and Schmitt’s work histories are quite different. They had
different jobs—Turner was an engineer, and Schmitt was a conductor. Turner
controlled the movement of the train at the time of the derailment. Schmitt was
on the ground, outside of the train. Their disciplinary histories differ
significantly. While they may have had a comparable number of offenses, the
offenses were not “nearly identical.” Schmitt’s positive alcohol test occurred
fourteen years before the derailment at issue while he was a brakeman. Turner
likewise had a positive test in the past, but Turner’s infractions continued over
time. In 1974, a drug test showed the presence of long-lasting barbiturates in
Turner’s system. In 1982, Turner was reprimanded for a deficient train
inspection report. Six years later in 1988, Turner was suspended for failing a
brake test. Turner had a positive drug and alcohol test only two years before the
incident at issue in this case while he was an engineer, and he was terminated,
until a review board reinstated him with the proviso that any violation of the
reinstatement order’s terms would be sufficient grounds for dismissal. While the
22
Mayberry v. Vought Aircraft Co., 55 F.3d 1086, 1090 (5th Cir. 1995) (quoting Little
v. Republic Ref. Co., 924 F.2d 93, 97 (5th Cir. 1991)).
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incident here did not implicate any of the reinstatement order’s terms, the mere
existence of such an order is a major difference in the work histories of Turner
and Schmitt.
Turner is also not similar to Frank Mouney. Almost all of the disciplinary
actions against Mouney were for missed-call violations, unlike Turner’s more
serious violations. In short, Turner’s work history is sufficiently different from
both Schmitt’s and Mouney’s work histories to account for the differences in
discipline. Nor has Turner pointed to anything that would show that KCSR’s
reason for dismissal is “false or unworthy of credence.”23 Accordingly, Turner
has not met his burden of producing evidence to show that KCSR’s legitimate,
non-discriminatory reason for his dismissal was a pretext for discrimination.
II
The district court concluded with regard to Lester Thomas that he failed
to demonstrate that he was treated differently from similarly situated
employees. The only comparator offered was Hall. For the reasons stated by the
district court, Hall’s history of disciplinary actions was not comparable to
Thomas’s, and Hall’s infractions were relatively minor. Hall received a five-day
suspension while a helper for a sideswipe, a reprimand for a derailment while
serving as engine foreman, a three-day deferred suspension for a “bad-ordered”
car on an outbound train while he was a helper, and a five-day suspension for
proceeding past a blue flag. By contrast, Thomas had received a 15-day
suspension for failure to control the speed of a train, a five-day suspension for
failing to protect a train in a shoving move and providing false information, a
three-day suspension for failure to follow instructions, a 15-day deferred
suspension for failure to follow instructions and other violations, a three-day
suspension for failure to acknowledge the presence of a train, a reprimand for
23
Vaughn v. Woodforest Bank, 665 F.3d 632, 637 (5th Cir. 2011).
38
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failure to sign a work order, a 45-day suspension and a 45-day deferred
suspension for occupying the main track without authority, and a ten-day
suspension and a 45-day deferred suspension for derailment. The disciplinary
histories of Thomas and Hall are not comparable, much less “nearly identical.”
To allow a fact-finder to infer discriminatory intent from the disparate
positions and disciplinary histories of the comparators that Turner and Thomas
have offered is to allow a fact-finder to second-guess business decisions that
KCSR employees made in the furtherance of their job responsibilities and their
responsibilities to insure a safe working environment. The panel majority
ignores our precedent: “we have repeatedly and emphatically stated that anti-
discrimination laws ‘are not vehicles for judicial second-guessing of business
decisions.’”24
*****
I would affirm the district court’s grant of summary judgment.
24
Mato v. Baldauf, 267 F.3d 444, 452 (5th Cir. 2001) (quoting Deines v. Tex. Dep’t of
Protective & Reg. Serv., 164 F.3d 277, 281 (5th Cir. 1999)).
39
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16 So.3d 514 (2009)
Philip BELL, Franklin Mercantile, IIII, Inc. and First Franklin Company, Inc.
v.
Charles G. GLASER.
No. 2008-CA-0279.
Court of Appeal of Louisiana, Fourth Circuit.
July 1, 2009.
*515 Kearney S. Loughlin, New Orleans, LA, for Plaintiffs/Appellants.
J. Don Kelly, Jr., Provosty & Gankendorff, L.L.C., New Orleans, LA, for Defendant/Appellee.
(Court composed of Judge CHARLES R. JONES, Judge JAMES F. McKAY, III, and Judge DENNIS R. BAGNERIS, SR.).
CHARLES R. JONES, Judge.
The Appellant, Philip Bell, seeks review of the district court's judgment in favor of the Appellee, Dr. Charles Glaser, sustaining his exception of prescription. We affirm.
On February 19, 1993, Mr. Bell entered into a sublease for commercial property with Dr. Glaser for a Mail Boxes, Etc. franchise at 630 South Carrollton Avenue in Orleans Parish. The owner of the building was Slatten Realty Company (hereinafter referred to as "Slatten"), which leased the building to Dr. Glaser for a period of 15 years: April 1, 1985 through March 31, 2000. The original sublease to Mr. Bell was for the term of March 1, 1993 to March 1, 1994, with two options to extend for either a three year period or another year.
The Primary Lease terms between Slatten and Dr. Glaser regarding roof repair were:
... Lessee assumes responsibility for the condition of the premises and Lessor will not be responsible for damage caused by leaks in the roof, by bursting pipes, by freezing or otherwise, or by any vice or defects of the leased property, or the consequences thereof except in the case of positive neglect or failure to take action toward the remedying of such defects within reasonable time after having received written notice from Lessee of such defects and the damage caused thereby. Should Lessee fail to promptly notify Lessor, in writing of any such defects, Lessee will become responsible for any damage resulting to Lessor or other parties. [Emphasis added.]
The addendum to the Primary Lease regarding roof repairs and the sublease provides:
(1) Lessee agrees to do all interior and exterior renovations and improvements at his own expense except for roof repairs.
(2) Lessee agrees to maintain all leased areas set forth in this lease, both interior and exterior, excluding roof maintenance and repairs.
(3) Lessee to be granted the right to sublease, but will remain liable for lease if sub-lessee becomes unable to pay his rent. [Emphasis Added].
Lastly, the sublease terms between Dr. Glaser and Mr. Bell states in pertinent part:
7. This is a sublease of the above-described property, covered by primary lease from April 1, 1985 through March 31, 2000, dated March 26, 1985, a copy of which is attached hereto, and all of the terms and provisions of said primary lease are incorporated in and shall be considered a part of this sublease to the extent applicable and where not inconsistent with the terms and provisions of this sublease, except that sublessee's rights or renewal shall be specified in Paragraph 8 of this sublease. [Emphasis Added].
8(d). Sublessee shall have the right, with one hundred twenty (120) days prior to written notice, to extend this lease *516 for an additional 2 terms: commencing immediately upon the expiration of the primary term and first option provided above and ending March 31, 2000, upon the same terms and conditions, including rental increase on the same schedule as during the primary term. The [sic] first option period is a term of three years and the [sic] second option period ends March 31, 2000. [Emphasis Added].
Mr. Bell extended the lease for an additional three (3) years through March 1, 1997. He had the only Mail Boxes, Etc. franchise in the area from Birmingham, Alabama to Houston, Texas. Since Mr. Bell had an exclusive franchise, he had the right to share in the royalties of all franchises in the area so long as he provided a training center (which he provided) at the Carrollton location.
In the fall of 1994, after extending the lease through 1997, Mr. Bell noticed water intrusion in the ceiling in the rear bathroom portion of the building. In November 1994, a water leak appeared again. This time the leak occurred in the administrative offices of the building causing damage to the carpet, countertops and desks. One month later in December 1994, more water leaking occurred, causing damage to the mid-section of the building, carpet, countertops, and desks. In February 1995, water began leaking from the ceiling again through light fixtures. Due to the ongoing leaking, Mr. Bell sent a letter on March 10, 1995, describing the damages suffered and the costs of repairs already undertaken. The letter noted damages to copy equipment, cabinets, etc. A total of $8,053.86 in damages was sought.
On April 28, 1995, Mr. Bell sent a second letter to Dr. Glaser giving him notice that he was going to terminate his lease effective May 30, 1995. On May 9, 1995, the business again experienced flooding from the roof. This time the damage was widespread, and led Mr. Bell to write another letter to Dr. Glaser that same month. In addition to major problems, the letter noted that the building was uninhabitable for the purpose for which it was leased. It follows that as of May 30, 1995, the lease was cancelled at Mr. Bell's request and all contractual relations between both parties ceased. Subsequently, Mr. Bell brought suit against Dr. Glaser in 1999; however, the suit was legally abandoned.
On July 29, 2005, Mr. Bell filed another suit against Dr. Glaser, this one for breach of the sublease and to recover damages. Dr. Glaser filed an Exception of Prescription arguing that Mr. Bell's claims accrued greater than ten years earlier. The district court granted the exception of prescription, and this timely appeal followed.
Mr. Bell argues on appeal that the district court erred in sustaining Dr. Glaser's exception of prescription and dismissing his suit.
An appellate court cannot disturb the factual findings of the district court in the absence of "manifest error" or unless it is "clearly wrong." Stobart v. State, Through Dept. of Transp. & Dev., 617 So.2d 880, 882 (La.1993). However when a trial court commits legal error, an appellate court is required to review the record de novo. Edwards v. Pierre, 08-0177 (La. App. 4 Cir. 9/17/08), 994 So.2d 648, 656. Prescription is a purely factual determination. Thus, the standard of review on an exception to prescription is manifest error. Katz v. Allstate Ins. Co., XXXX-XXXX (La. App. 4 Cir. 2/2/05), 917 So.2d 443; Parker v. B & K Const. Co., Inc., XXXX-XXXX (La. App. 4 Cir. 6/27/07), 962 So.2d 484.
In his lone assignment of error, Mr. Bell alleges that the prescriptive period did not begin to run until August 1995, at the termination of the sublease and *517 when he permanently moved out of the building. He asserts that the ongoing physical damages and consequential economic damages caused by defects in the leased premises are within the ten year prescription period; therefore, the prescriptive period for any of the more recent damages has not run. He also asserts that the ongoing damages should be treated similarly to a continuing tort where prescription does not begin until the damage-causing conduct ends.
Prescription begins to run when it is determined that damage was sustained. Landry v. Blaise Inc., XXXX-XXXX, p. 4 (La.App. 4 Cir. 10/23/02), 829 So.2d 661, 664. Damage is sustained for the purposes of prescription when it has manifested itself with sufficient certainty to support the accrual of a cause of action. Id., p. 5, 829 So.2d at 665; Hazelwood Farm Inc. v. Liberty Oil and Gas Corp., 2002-266 (La.App. 3 Cir. 4/2/03), 844 So.2d 380, 389. Where a claimant has suffered some but not all damages, prescription runs from the day on which he suffered actual and appreciable damages even though he may thereafter realize more precise damages. Hazelwood, at 389; Harvey v. Dixie Graphics, Inc. (La.1/17/92), 593 So.2d 351, 354. Thus, even where there are ongoing damages, prescription does not run from each incident of damages; rather, it runs from the day that actual and appreciable damages were noticed or suffered by the claimant.
Our review of the record indicates that Mr. Bell had first-hand knowledge of actual and appreciable damages as early as the fall 1994, and undoubtedly by May 1995. His letter to Dr. Glaser in May 1995, noting that the building was uninhabitable for the purpose for which it was leased along with the widespread damage from the flooding of the roof, provided notice of actual physical and appreciable damages. Prescription began to toll from May 1995. Since Mr. Bell did not file suit within the requisite prescription period of ten years, his cause of action prescribed. Therefore, we find that this assignment of error is without merit.
DECREE
For the foregoing reasons, the judgment of the district court granting the Exception of Prescription in favor of Dr. Charles Glaser is affirmed.
AFFIRMED.
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In the
United States Court of Appeals
For the Seventh Circuit
No. 99-2422
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
FANY MORENO,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 98 CR 499-2--William T. Hart, Judge.
Argued May 9, 2000--Decided November 6, 2000
Before MANION, KANNE, and ROVNER, Circuit Judges.
ROVNER, Circuit Judge. Shortly after her
significant other, Evaristo Moreno, pleaded
guilty to possessing both heroin and cocaine with
the intent to distribute these narcotics, a jury
convicted Fany Moreno ("Moreno") of these same
crimes; and she is currently serving a prison
term of six and one-half years./1 Moreno now
appeals her conviction. She contends that the
prosecution was improperly permitted to elicit
the fact that her partner initially consented to
a search of their home but then withdrew his
consent after she said something to him (we do
not know what) in Spanish. Moreno characterizes
the testimony that Mr. Moreno granted, and then
withdrew, his consent, as inadmissible hearsay.
We believe that Mr. Moreno’s statements were
verbal acts, although we share Moreno’s doubts
about their probative value. Any error in
admitting the statements was, however, harmless.
We therefore affirm Moreno’s conviction.
I.
The Morenos had the misfortune to conduct a
suspicious transaction within view of members of
a U.S. Customs Service task force that happened
to be conducting an unrelated investigation. On
July 9, 1998, six agents were conducting
surveillance on Chicago’s northwest side when one
of them noticed the Morenos’ Chevrolet pull into
the parking lot of a nearby 7-Eleven convenience
store. Evaristo Moreno was driving, Fany Moreno
was in the front passenger seat, and their nine
year-old son was in the back seat. Ms. Moreno got
out of the car, stood in front of the 7-Eleven
for a moment, returned to the auto and spoke with
Mr. Moreno, and then resumed her station in front
of the store. A Jeep subsequently pulled into the
parking lot, an unidentified man stepped from it,
and he handed Moreno a small white plastic bag.
She accepted the bag, quickly returned to the
Chevrolet, and the Morenos left the lot.
Their suspicions aroused, several members of the
task force followed the Morenos and eventually
pulled their car over after Evaristo Moreno drove
through a red light. As Mr. Moreno got out of the
car and approached Agent Vince Scaccianoce,
Moreno herself exited the vehicle with two bags
in hand, one of them the small bag that she had
collected at the 7-Eleven. The agent asked her to
return to the car and she complied. Subsequently,
after Mr. Moreno had consented to a search of the
car, Moreno again left the vehicle, again with
the two bags in hand. Agent Daniel Morro
instructed her to leave the bags in the car. When
he asked her what was in the smaller bag, Moreno
claimed not to know. When Morro looked into the
bag, he discovered a Nike shoe box containing a
large amount of cash--some $69,000. (Inside of
the larger bag were recently purchased child’s
clothing and a pillow.)/2
As it turned out, the agents had stopped the
Morenos within a block of their home. After the
car was searched, Agent Scaccianoce solicited Mr.
Moreno’s consent to search the home and he gave
it. However, as he and some of the agents began
to walk toward the house, Ms. Moreno yelled
something in Spanish to her partner that none of
the agents managed to catch. Mr. Moreno promptly
withdrew his consent to a search of the house,
and the agents were forced to obtain a warrant.
Warrant in hand, the agents returned later that
evening and searched the house. In a master
bedroom closet, which contained clothing and
shoes for both men and women, they found nearly
a kilogram of cocaine inside of a purse, along
with the stubs of three movie tickets (two for
adults and one for a child) and a variety of
other documents (year-old receipts and a lottery
ticket). In the same closet, some twenty-one
baggies containing small amounts of cocaine were
discovered in a stuffed-animal knapsack and a
number of shoe boxes. Some $27,000 in U.S.
currency was also found in a fanny pack. The
bills in that pack, like the much larger amount
found in the bag that Moreno accepted at the 7-
Eleven, were bundled together in a manner and
comprised of denominations typical of drug
trafficking funds. A dresser in the master
bedroom, which, like the closet, contained
masculine and feminine clothing as well as a
utility bill addressed to Fany Moreno and several
other pieces of correspondence, yielded more
cocaine (packaged in glycine and plastic baggies,
some stashed in film canisters, others in socks),
two digital gram scales, and inositol, a baby
laxative that people in the drug trade often use
as a cutting agent. All told, the search yielded
1,690.5 grams of cocaine. In addition, the agents
discovered just over 260 grams of heroin in a
living room closet, secreted within a box that
once contained an Asteroid Air Blasters toy. The
total retail value of the drugs found in the home
exceeded $200,000.
Although Evaristo Moreno pleaded guilty to the
two-count indictment, Fany Moreno, whom no
witness had ever seen purchase or sell narcotics,
opted for a trial. Her defense was that she was
unaware of her partner’s narcotics trafficking
and, at most, was an unwitting accomplice to it.
To meet that defense, the government was
permitted, over Moreno’s objection, to elicit
testimony from several agents that Evaristo
Moreno had at first consented to a search of
their home and then, after the defendant yelled
something in Spanish to him, had withdrawn his
consent. E.g., Tr. 76, 95-96, 186-87. Although no
one (other than Fany Moreno and Evaristo Moreno)
knows what she yelled to him, in the government’s
view one may reasonably infer that she in some
way urged him not to permit the search; that
inference reasonably suggests in turn that Moreno
knew about the narcotics in their house. The
government pursued this theme forcefully in its
closing arguments:
At this point, what happens? Fanny [sic] Moreno
begins to yell. She begins to yell loudly in
Spanish. Do we know what she says? Emphatically
we do not. No one there who was able to hear her
knows what she said.
But interestingly, what happens next, ladies and
gentlem[e]n? Right after Fanny [sic] Moreno
begins to yell at her husband, begins to yell at
Evaristo Moreno, who was about to let the agents
in the house, he turns around and says, "You
can’t come in. You have to get a warrant."[/3]
Again, is that consistent with someone with no
knowledge? Is that consistent with someone who
has nothing that she’s aware of that’s in the
house that she possessed, that she controls?
Absolutely not.
Tr. 244; see also Tr. 261-63.
II.
Moreno’s appeal focuses on the admission of
testimony regarding Evaristo Moreno’s initial
consent to the search of their home and the
withdrawal of that consent upon the heels of her
yelled remark to him. She contends that
Evaristo’s out-of-court statements constitute
hearsay, so that it was improper for the
government to elicit his change of heart about
the search, in conjunction with her own shouted
comment to him, as proof of her knowledge that
the home contained narcotics.
We agree with the government that Mr. Moreno’s
utterance of consent to the search, and his
subsequent retraction, amount to verbal acts, and
as such are not inadmissible hearsay. Like the
classic examples of verbal acts, offer and
acceptance, see Hydrite Chem. Co. v. Calumet
Lubricants Co., 47 F.3d 887, 892 (7th Cir. 1995),
statements that grant or withhold permission to
the authorities to conduct a search carry legal
significance independent of the assertive content
of the words used. See generally 4 Christopher B.
Mueller & Laird C. Kirkpatrick, Federal Evidence,
sec. 385 (2d ed. 1994); see also, e.g., United
States v. Rojas, 53 F.3d 1212, 1216 (11th Cir.)
(consent to exercise of jurisdiction over
vessel), cert. denied, 516 U.S. 976, 116 S. Ct.
478 (1995); State v. Welker, 536 So.2d 1017,
1019-20 (Fla. 1988) (consent to record telephone
conversation); State v. Gillespie, 569 P.2d 1174,
1175 (Wash. App. 1977) (consent to search
residence). In appropriate circumstances,
therefore, the government may elicit the giving
or refusal of one’s consent to a search without
running afoul of the proscription against
hearsay.
That said, we are skeptical that Mr. Moreno’s
decision to grant or withhold his consent to the
search had much, if any, probative value vis a
vis Ms. Moreno’s culpable knowledge of the drugs
in the house. The government’s theory as to the
relevance of Mr. Moreno’s statements depends on
the assumption that Fany Moreno instructed or
encouraged Evaristo not to let the agents search
the house. Certainly it is possible that she did,
but it is also possible that she said something
entirely different--"If you’ve committed a crime,
I’ll never forgive you!", for example. Even if
Moreno did say something that encouraged her
partner to reconsider his decision to permit the
search, the remark did not necessarily reflect
guilt on her part. Perhaps she simply reminded
him that he had a right to insist on a warrant,
as any competent attorney might have done. See
United States v. Prescott, 581 F.2d 1343, 1352
(9th Cir. 1978) ("Because the right to refuse
entry when the officer does not have a warrant is
equally available to the innocent and the guilty,
just as is the right to remain silent, the
refusal is as "ambiguous" as the silence was held
to be in United States v. Hale, 1975, 422 U.S.
171, 176-77, 95 S. Ct. 2133, 45 L. Ed. 99.") The
truth is, we can only speculate as to the nature
of Ms. Moreno’s remark, and that being the case,
the fact that Mr. Moreno withdrew his consent to
the search immediately after she shouted that
remark was of little probative value.
Furthermore, even if we indulge the inference
that Moreno urged Evaristo not to allow the
search, admitting this evidence as a means of
establishing Moreno’s guilt may have run afoul of
her constitutional rights. Doyle v. Ohio, 426
U.S. 610, 96 S. Ct. 2240 (1976), and Griffin v.
California, 380 U.S. 609, 85 S. Ct. 1229 (1965),
forbid the government from pointing to a
defendant’s post-arrest silence, or to his
invocation of his Fifth Amendment privilege not
to testify, as evidence of his guilt. In reliance
on Griffin and Doyle, other courts have either
held or suggested that the government may not
cite a defendant’s refusal to consent to a search
of his home as evidence that he knew the search
would produce incriminating evidence. See United
States v. Dozal, 173 F.3d 787, 794 (10th Cir.
1999); United States v. Thame, 846 F.2d 200, 206-
07 (3d Cir.), cert. denied, 488 U.S. 928, 109 S.
Ct. 314 (1988); Prescott, 581 F.2d at 1350-52;
United States v. Taxe, 540 F.2d 961, 969 (9th Cir.
1976), cert. denied, 429 U.S. 1040, 97 S. Ct. 737
(1977); United States v. Turner, 39 M.J. 259, 262
(C.M.A. 1994); State v. Palenkas, 933 P.2d 1269
(Ariz. App. 1996), cert. denied, 521 U.S. 1120,
117 S. Ct. 2513 (1997); State v. Jennings, 430
S.E.2d 188, 200 (N.C.), cert. denied, 510 U.S.
1028, 114 S. Ct. 644 (1993); Simmons v. State,
419 S.E.2d 225, 226-27 (S.C. 1992); see also
United States v. Hyppolite, 65 F.3d 1151, 1157
(4th Cir. 1995) (mere assertion of constitutional
right to refuse consent to search does not supply
probable cause to search), cert. denied, 517 U.S.
1162, 116 S. Ct. 1558 (1996); United States v.
Taxacher, 902 F.2d 867, 873 n.6 (11th Cir. 1990)
(same), cert. denied, 499 U.S. 919, 111 S. Ct.
1307 (1991); Snow v. State, 578 A.2d 816, 825
(Md. App. 1990) (driver’s refusal to consent to
search of automobile did not give rise to
reasonable suspicion that vehicle contained
narcotics); cf. United States v. McNatt, 931 F.2d
251, 257-58 (4th Cir. 1991) (evidence of
defendant’s refusal to consent to search was
admissible to respond to defendant’s claim that
police planted evidence), cert. denied, 502 U.S.
1035, 112 S. Ct. 879 (1992). The Fourth Amendment
entitled the Morenos to withhold their consent to
the search, and so to have held up Mr. Moreno’s
invocation of that right, purportedly at his
partner’s urging, as evidence that Ms. Moreno
knew the house contained contraband, may have
been inconsistent with due process.
We are satisfied, however, that any error in
the admission of this evidence was harmless. The
agents had witnessed Moreno accept a bag filled
with $69,000 in cash in front of the 7-Eleven,
while Evaristo waited nearby in the car. When the
agents subsequently stopped the Morenos, Ms.
Moreno twice attempted to take that bag with her
when she left the car, a circumstance that
suggests she had some idea of what the bag
contained. Moreover, when the Moreno home was
searched, drugs and drug paraphernalia were found
throughout the house, in places where Ms. Moreno
almost certainly would have seen them: more than
a kilogram of cocaine was found in the master
bedroom closet, which contained both men’s and
women’s clothing, and much of the cocaine was
found in a purse along with the movie ticket
stubs and various receipts. Additional cocaine,
together with two digital gram scales and the
inositol, was discovered in the master bedroom
dresser, along with a bill addressed to Fany
Moreno. Finally, more than 260 grams of heroin
were found within a toy box in a living room
closet. Under these circumstances, it strains
credulity to argue, as Moreno does, that she was
at most an unwitting participant in Evaristo
Moreno’s drug trafficking.
III.
Although we agree with Moreno that the
testimony concerning her significant other’s
decision to withdraw his consent to a search of
their home probably should not have been
admitted, we find any error to have been harmless
in this case. We therefore AFFIRM her conviction.
/1 Although Evaristo and Fany Moreno had lived
together for eleven years, and were referred to
as husband and wife at trial, they were not
married; they simply happened to have the same
last name.
/2 No issue is raised as to the scope of the
automobile search to which Mr. Moreno consented.
See Florida v. Jimeno, 500 U.S. 248, 111 S. Ct.
1801 (1991).
/3 As Moreno points out, the record does not
actually establish precisely what Mr. Moreno said
when he withdrew his consent. The agents simply
testified that he withdrew his consent. See Tr.
96, 187.
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In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 05-1424 & 05-1435
DAVID and LYNETTE KINDRED,
Petitioners-Appellants,
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
____________
Appeals from an Order of the
United States Tax Court.
Nos. 5658-04L & 5860-04L.
____________
ARGUED OCTOBER 25, 2005—DECIDED JULY 20, 2006
____________
Before COFFEY, MANION, and KANNE, Circuit Judges.
COFFEY, Circuit Judge. After their income tax return was
reviewed, taxpayers David and Lynette Kindred (collec-
tively the “taxpayers”) were determined by the Internal
Revenue Service (“IRS” or “the Service”) to be deficient in
their payments for the tax year 1999. The taxpayers were
informed of this when they were sent a statutory notice of
deficiency, which provided them the opportunity to chal-
lenge the IRS’ determination in the United States Tax
Court (“Tax Court”). They failed to do so, and the tax was
assessed as due in owing on December 16, 2002. Shortly
thereafter, the Kindreds were sent a demand for payment
via certified mail and informed that, if they failed to satisfy
2 Nos. 05-1424 & 05-1435
the tax obligation, a lien in favor of the United States
government would attach to all of their real and personal
property. See IRC § 6321.1 The assessment went unpaid,
and in an effort to prevent a lien from attaching, the
Kindreds promptly notified the IRS that they wished to
exercise their right to request a hearing pursuant to IRC
§ 6330, challenging inter alia their underlying tax liability.
The IRS sustained the lien holding that the Kindreds’
claims were barred by statute, see § 6330(c)(2)(B), and the
Kindreds filed a petition with the Tax Court. After the close
of the pleadings, the IRS moved for summary judgment
pursuant to Rule 121(b) of the United States Tax Court
Rules of Practice and Procedure and the Tax Court granted
the motion. We affirm.
I. BACKGROUND
On July 15, 1999, David and Lynette Kindred filed a joint
income tax return, Form 1040, for the tax year 1998.
Suspecting that the Kindreds had under-reported their
taxable income by approximately $628,000, the IRS flagged
the return for examination, more commonly referred to
as an audit. See generally IRC § 7602; Treas. Reg.
§§ 301.7602-1 et seq. According to the record, the Kindreds
failed to communicate with the IRS concerning their return
and refused to take part in the examination process.2 The
1
Citations using the abbreviation “IRC” refer to the Internal
Revenue Code, which can be found at 26 U.S.C. § 1 et seq. In
addition, citations found in this opinion using the abbrevia-
tion “Treas. Reg.” refer to regulations promulgated by the
Department of the Treasury pursuant to authority conferred in
the IRC, which may be found at Treas. Reg. 1.1-1 et seq.
2
Although the IRS is entitled to summon taxpayers and to
“examine any books, papers, records, or other data which may
be relevant or material” in order to perform an audit, it ap-
(continued...)
Nos. 05-1424 & 05-1435 3
IRS thereafter determined, without the Kindreds participa-
tion, that the couple had attempted to avoid paying taxes on
their income by placing their assets into various trusts;
something the Service has characterized in the past as an
“abusive tax trust scheme.” See, e.g., Muhich v. Commis-
sioner, 238 F.3d 860, 863 (7th Cir. 2001).
Accordingly, on May 9, 20023 the IRS sent the Kindreds
a statutory “notice of deficiency” informing them that they
owed $991,096.43 in tax, penalties and interest. See IRC
§§ 6211(a), 6212(a), 7522(a), 6601(a), 6662(a); Treas. Reg.
§§ 301.6211-1 et seq. Included in the notice of deficiency was
information advising them of their statutory right to
challenge the proposed assessment of tax deficiency by
filing a petition with the Tax Court within 90 days. See IRC
§ 6503(a); Treas. Reg. § 301.6503(a)-1.4
2
(...continued)
pears that the IRS did not choose to do so in this case. IRC
§ 7602(a)(1)-(3).
3
It is undisputed that the statutory notice of deficiency was
sent via certified mail on May 9, 1999 and that the Kindreds
received said notice.
4
Section 6501 of the Internal Revenue Code provides inter alia
that “the amount of any tax imposed by this title shall be assessed
within 3 years after the return was filed (whether or not such
return was filed on or after the date prescribed) . . . .” The mailing
of a statutory notice of deficiency tolls the running of the three-
year limitations statute “for the period during which the Secretary
is prohibited from making the assessment or from collecting by
levy or proceeding in court . . . and for 60 days thereafter.” IRC
§ 6503(a)(1). Pursuant to IRC § 6213, once the Kindreds were sent
a statutory notice of deficiency, they had 90 days in which to file
a petition with the Tax Court. This, in addition to the 60-day
waiting period proscribed by § 6503(a)(1), means that the IRS was
precluded from actually assessing the tax liability until approxi-
mately December 12, 2002.
4 Nos. 05-1424 & 05-1435
The Kindreds failed to contest the IRS’ determination,
and on December 16, 2002, the tax was statutorily assessed
as due in owing. See IRC §§ 6201 et seq.; Treas. Reg.
§ 301.6203-1. The same day, the Kindreds were sent a
notice of payment, stating that, in order to avoid further
collection efforts by the Service, they should immediately
remit $991,096.43, the amount in arrears. See IRC
§ 6303(a). Similar notices were sent on January 19, 2003,
June 8, 2003 and July 6, 2003, advising the Kindreds that
if they failed to pay the outstanding tax balance immedi-
ately, the IRS would seek a federal tax lien against their
assets.
The Kindreds once again refused to either remit payment
or to acknowledge the IRS’ collection efforts in any manner.
At that point, the IRS assigned a revenue officer5 to the
Kindreds’ case in order to ensure payment of the tax and
oversee any future collection activities. See Treas. Reg.
301.7430-1(g), Example 8. On September 9, 2003, the
designated revenue officer paid a visit to the Kindreds’
home in order to discuss their tax liability and to inquire as
to how they would like to proceed. The revenue officer found
5
Revenue officers represent the collection arm of the United
States Department of the Treasury. See, e.g., Tennessee v. Davis,
100 U.S. 257, 261 (1879); Barnes v. Philadelphia & R.R. Co., 84
U.S. 294, 304 (1872). According to the Internal Revenue Manual
§ 5.1.1.2, revenue officers working for an IRS field officer under-
take the following assignments: (1) managing “balance
due accounts”; (2) undertaking “delinquent return investigations”;
(3) performing “courtesy investigations”; (4) investigating “Federal
Tax Deposit alerts”; (5) taking part in “compliance initiative
projects”; and (6) evaluating “Offers in Compromise.” All revenue
officers are to discharge their duties in “[c]ompliance with Service
policy and guidelines” and “results achieved are to be commensu-
rate with the resources expended.” Internal Revenue Manual
§ 5.1.1.3.2.
Nos. 05-1424 & 05-1435 5
the Kindreds to be unavailable at their residence and they
did not attempt to get in contact with him after the visit.6
With the tax liability unliquidated and no other options
available, the IRS sent the Kindreds a notice entitled:
“Notice of Federal Tax Lien Filing and Your Right to a
Hearing Under IRC § 6320.” See IRC §§ 6320, 6321. This
notice informed the Kindreds of the amount owed as well as
their right to challenge the lien, within 30 days, by request-
ing an administrative proceeding known as a “Collection
Due Process” (“CDP”) hearing. See IRC §§ 6320, 6330.
After receiving the required statutory notice of the filing
of a levy, the Kindreds timely exercised their statutory right
to request a CDP hearing pursuant to IRC § 6330. When
they completed the required CDP hearing request form, IRS
Form 12153, the Kindreds were asked to explain why they
did not agree with the IRS’ filing of a federal tax lien. In
response, they stated: “We disagree with the determination
of the taxes and additions owed and the calculation of the
amounts, if any.” The IRS responded by assigning an
appeals officer to the case and scheduling a hearing for
January 15, 2004.7
6
Although the record is unclear, it appears that the revenue
officer left some type of notification at the Kindreds’ residence
advising them that he wanted to speak with them regarding
their unpaid taxes.
7
Collection Due Process hearings are informal affairs. Indeed,
the regulations provide that no transcript need be created and
that the hearing itself may be conducted via telephone or the mail.
See Treas. Reg. § 301.6330-1(d)(2)A-D6. As Treas. Reg.
§ 301.6330-1(d)(2)A-D6 states: “The formal hearing procedures
required under the Administrative Procedure Act, 5 U.S.C. 551 et
seq., do not apply to CDP hearings. CDP hearings are much like
Collection Appeal Program (CAP) hearings in that they
(continued...)
6 Nos. 05-1424 & 05-1435
In the documents that the Kindreds submitted to the
appeals officer prior to the hearing, they maintained their
objection to the accuracy of the taxes, penalties and interest
which had been assessed by the IRS. In addition, they
argued that instead of being subject to a levy, they should
be entitled to pursue collection alternatives pursuant to IRC
§ 6330(c)(2), such as “the posting of bond, the substitution
of other assets, or an offer in compromise.” In particular,
the Kindreds sought to submit an offer in compromise
which, if accepted, could have reduced the amount deter-
mined to be owed to the IRS. See generally Young v. United
States, 535 U.S. 43, 53 (2002). In response, the appeals
officer requested additional financial information and
documentation from the Kindreds in order to ascertain
whether it would be in the IRS’ interests to pursue collec-
tion alternatives. See Treas. Reg. 301.6330-1(e)(1); IRC
§ 7122. However, the Kindreds failed to submit a formal
written offer in compromise or the financial information
required for an appeals officer to entertain collection
alternatives.8 Indeed, the Kindreds refused to submit any
7
(...continued)
are informal in nature and do not require the Appeals officer or
employee and the taxpayer, or the taxpayer’s representative, to
hold a face-to-face meeting. A CDP hearing may, but is not
required to, consist of a face-to-face meeting, one or more writ-
ten or oral communications between an Appeals officer or em-
ployee and the taxpayer or the taxpayer’s representative, or some
combination thereof. A transcript or recording of any face-to-face
meeting or conversation between an Appeals officer or employee
and the taxpayer or the taxpayer’s representative is not re-
quired. The taxpayer or the taxpayer’s representative does not
have the right to subpoena and examine witnesses at a CDP
hearing.”
8
Furthermore, the Kindreds also failed to appear at their
scheduled CDP hearing on January 15, 2004. When they did not
appear, the appeals officer sent a follow up letter, giving them yet
(continued...)
Nos. 05-1424 & 05-1435 7
financial information at all.
As such, the appeals officer refused to consider collec-
tion alternatives and was left with only the question of
whether the Kindreds could challenge the Service’s mathe-
matical calculation and/or the accuracy of the taxes,
penalties and interest assessed. The appeals officer con-
cluded that the Kindreds were precluded from doing so
because such an argument could be properly classified as a
challenge to the underlying liability, which is barred in a
CDP hearing by IRC § 6330(c)(2)(B). Accordingly, the levies
were sustained.
Unhappy with this determination, David and Lynette
Kindred individually filed petitions in the United States
Tax Court,9 arguing that the appeals officer had abused his
discretion by refusing to entertain their arguments chal-
lenging the mathematical accuracy of the IRS’ assessments
and by failing to entertain any collection alternatives, such
as an offer in compromise or “innocent spouse” relief.10 See
8
(...continued)
another opportunity to submit financial information which would
allow him to consider collection alternatives. The appeals officer
requested that they do so by January 29, 2004. The Kindreds
failed to respond and, on February 13, 2004, the determination
was rendered and filed.
9
David and Lynette Kindred filed separate petitions in the Tax
Court although both petitions raised essentially the same
issues. As a result, the Tax Court issued two separate decisions in
the cases. However, since the issues raised and the Tax
Court’s determinations were essentially identical, we discuss
the two cases as one unless otherwise noted.
10
In general, taxpayers filing joint returns are joint and severally
liable for any deficiencies, penalties and interest assessed against
them regarding the return. See Grossman v. Commissioner, 182
F.3d 275, 278 (4th Cir. 1999); Shea v. Commissioner, 780 F.2d
(continued...)
8 Nos. 05-1424 & 05-1435
IRC § 6015(b)(1). Also, they averred that, in addition to
being inaccurate, the assessments made by the Service were
untimely pursuant to the three-year limitations period set
forth in IRC § 6501.11 At the close of pleadings, the IRS
moved for summary judgment pursuant to Rule 121(a) of
the Tax Court Rules of Practice and Procedure. The Tax
Court granted the IRS’ motion, finding that the IRS appeals
officer had not abused his discretion in sustaining the
respective levies, that the petitioners had failed to present
a question of material fact and that entry of judgment in
favor of the IRS was proper as a matter of law. See Kindred
v. Commissioner, No. 5658-04L (Nov. 5, 2004); Kindred v.
Commissioner, No. 5860-04L (Nov. 5, 2004). The court
concluded that: (a) the petitioners were barred from chal-
lenging their underlying tax liability during the CDP
hearing pursuant to IRC § 6330(c)(2)(B); (b) although no
offer in compromise was ever proposed or formally submit-
ted by the Kindreds, they were precluded from proffering
one “under [the] guise of an offer in compromise based on
doubt as to liability”; (c) failure to raise an “innocent
spouse” defense during the administrative process pre-
cluded them from doing so for the first time in a petition to
the Tax Court;12 and (d) the petitioners’ arguments that the
IRS’ assessment of tax was outside the three-year limita-
10
(...continued)
561, 564 (6th Cir. 1986). As discussed infra, IRC § 6015 consti-
tutes an exception to this rule and provides that where one spouse
fails to report income, an “innocent” spouse may seek relief from
joint and several liability as long as certain conditions set forth in
§ 6015(b)(1) are met.
11
The Kindreds raised this argument for the first time in the Tax
Court, explaining that they had not been provided Form 4340,
which lists the date of assessment of the tax, until after their
petition in Tax Court had been filed.
12
Only Mrs. Kindred raised the issue of “innocent spouse” relief
in her petition in the Tax Court.
Nos. 05-1424 & 05-1435 9
tions period of § 6501 were entirely without merit. The
Kindreds appealed pursuant to the jurisdiction conferred on
this court under IRC § 7482(a).13
II. ISSUES
On appeal, the Kindreds challenge the Tax Court’s grant
of summary judgment in favor of the IRS based on three
perceived errors. Initially, they contend that, contrary to
the Tax Court’s determination, the IRS appeals officer
abused his discretion when he failed to allow them to
introduce proposed “collection alternatives” such as an offer
in compromise during the CDP proceedings. IRC
§ 6330(c)(2)(A)(iii). They also maintain that they should
have been allowed to introduce evidence during the CDP
proceedings which, they argue, would have entitled them to
an “innocent spouse” defense. See Grossman, 182 F.3d at
278; IRC §§ 6330(c)(2)(A)(i), 6015(a). Finally, the Kindreds
take exception with the Tax Court’s determination that the
IRS’ assessment of tax liability was timely within the
meaning of IRC § 6501.
III. ANALYSIS
We review the Tax Court’s grant of summary judgment in
favor of the IRS, “in the same manner and to the same
extent as decisions of the district courts in civil actions tried
without a jury.” IRC § 7482(a)(1). The material facts are
undisputed and petitioners present only questions of law.14
13
David and Lynette Kindred lodged separate appeals from the
Tax Court. This court, on its own motion, consolidated the appeals
in an Order issued on March 15, 2005.
14
Much like Rule 56(c) of the Federal Rules of Civil Procedure,
Rule 121(b) of the United States Tax Court Rules of Practice
(continued...)
10 Nos. 05-1424 & 05-1435
Thus, we review the Tax Court’s decision to grant summary
judgment de novo. See Krukowski v. Commissioner, 279
F.3d 547, 550 (7th Cir. 2002); Connor v. Commissioner, 218
F.3d 733, 736 (7th Cir. 2000). See L & C Springs Assocs. v.
Commissioner, 188 F.3d 866, 869 (7th Cir. 1999). In addi-
tion, because it is evident from the record before us that the
petitioners’ underlying tax liability is not at issue,15 we
review the administrative determinations of the IRS
appeals officer during the CDP hearing process under an
abuse of discretion standard. See Orum v. Commissioner,
412 F.3d 819, 820 (7th Cir. 2005); Sego v. Commissioner,
114 T.C. 604, 610 (2000) (holding that “where the validity
of the underlying tax liability is not properly at issue, the
Court will review the Commissioner’s administrative
determination for abuse of discretion”); Craig v. Comm’r,
119 T.C. 252, 260 (2002), cf. Jones v. Comm’r, 338 F.3d 463,
466 (5th Cir. 2003) (stating that: “In a collection due process
case in which the underlying tax liability is properly at
issue, the Tax Court (and hence this Court) reviews the
underlying liability de novo and reviews the other adminis-
trative determinations for an abuse of discretion.”). Put
14
(...continued)
and Procedure proscribes that summary judgment is only
proper where “the pleadings, answers to interrogatories, deposi-
tions, admissions, and any other acceptable materials, together
with the affidavits, if any, show that there is no genuine issue
as to any material fact and that a decision may be rendered as
a matter of law.”Spellman v. Commissioner, 845 F.2d 148, 152
(7th Cir. 1988) (noting that “the pertinent language in the Tax
Court’s summary-judgment rule . . . is materially identical to
that of Rule 56”).
15
During the administrative process neither of the petitioners
ever disputed the fact that they received a statutory notice of
deficiency. Thus, they were statutorily precluded from challenging
their underlying tax liability at the CDP hearing stage. See IRC
§ 6330(c)(2)(B).
Nos. 05-1424 & 05-1435 11
simply, if we conclude that the IRS appeals officer did not
abuse his discretion in upholding the levy imposed on the
petitioners, then summary judgment was properly granted
and we will affirm the Tax Court’s decision.16
A. Collection Due Process Hearings
As mentioned above, IRC § 6321 authorizes the Secretary
of the Treasury to levy against “any person liable to pay any
tax [who] neglects or refuses to pay the same after demand.”
The lien, when in place, attaches to “all property and rights
to property, whether real or personal, belonging to such
person.” § 6321. In order for the IRS to collect overdue tax
via lien, however, a notice and demand for payment must be
served on the taxpayer17 within 60 days of the assessment
of the tax. IRC § 6303. If payment is not remitted by the
taxpayer, a lien may be sought as soon as the tenth day
following transmittal of the notice and demand. Treas. Reg.
§ 301.6331-1.
Prior to 1998, the abovementioned service of a notice
and demand for payment, along with a failure or refusal by
the taxpayer to pay the assessed amounts, was all that was
procedurally required prior to an IRS lien attaching to a
person’s property. See, e.g., Commissioner v. Shapiro, 424
U.S. 614, 617-18, 629-32 (1976). Taxpayers were entitled to
post-deprivation proceedings to challenge a levy, see id., but
16
As the Sixth and First Circuits have acknowledged, while
§ 6330 was intended to guard against taxpayer harassment at
the hands of the IRS, it does not strip the Service of the right
to undertake legitimate tax collection activities. See Living
Care Alternatives of Utica, Inc. v. United States, 411 F.3d 621, 625
(6th Cir. 2005); Olsen v. United States, 414 F.3d 144, 151 (1st Cir.
2005). Accordingly, the standard of review is highly deferential as
Congress intended.
17
Or taxpayers if married and filing jointly.
12 Nos. 05-1424 & 05-1435
there was no procedure in place for a taxpayer to challenge
the IRS’ decision to levy against their property prior to the
lien attaching, as long as the IRS could demonstrate that
either: (a) the underlying liability was not properly at issue;
or (b) where the IRS would have been “jeopardized by delay”
in collecting the tax due. See Shapiro, 424 U.S. at 617-18;
Living Care, 411 F.3d at 624; see also Phillips v. Commis-
sioner, 283 U.S. 589, 595-97 (1931) (holding that where
“adequate opportunity [was] afforded for a later determina-
tion of [ ] legal rights, summary proceedings to secure
prompt performance of pecuniary obligations to the govern-
ment” were entirely consistent with the Due Process Clause
of the Fifth Amendment).
On July 22, 1998, Congress enacted the IRS Restructur-
ing and Reform Act of 1998, Pub.L. No. 105-206, § 3401, 112
Stat. 685,18 which was specifically intended to pro-
vide taxpayers with additional pre-deprivation opportuni-
ties to oppose IRS collection actions. See Pub.L.
No. 105-206, § 1001, 112 Stat. 685, 689 (stating that inter
alia the bill is intended to “ensure an independent appeals
function within the Internal Revenue Service”). Section
6330 of the IRC was enacted as part of that bill and
grants taxpayers the right to request a pre-deprivation
hearing19 in order to allow them to present arguments as to
why the filing of a lien would not constitute an appropriate
collection device, before that lien actually attaches. In
particular, IRC § 6330(c)(2)(A) authorizes the Secretary of
the Treasury to consider “any relevant issue relating to the
unpaid tax or the proposed levy” during a CDP hearing.
18
The bill was also popularly known by the pseudonym “Taxpayer
Bill of Rights.” See Preslar v. Commissioner, 167 F.3d 1323, 1327
n.2 (10th Cir. 1999).
19
While taxpayers have a right to a “hearing,” such proceedings
may be conducted either in a formal setting with all the parties
present or via written or oral communications.
Nos. 05-1424 & 05-1435 13
This includes “offers of collection alternatives, which may
include the posting of a bond, the substitution of other
assets, an installment agreement, or an offer in compro-
mise.” § 6330(c)(2)(A)(iii). The statute does, however, limit
challenges to the “existence or amount of underlying tax
liability” to situations in which a taxpayer has “not
receive[d] any statutory notice of deficiency for such tax
liability or did not otherwise have an opportunity to dispute
such tax liability.” § 6330(c)(2)(B).
1. The Kindreds’ Right to Submit an Offer in Compromise
The Kindreds initially argue that they should have been
permitted to submit an offer in compromise premised on
“doubt as to liability” during the CDP hearing process under
IRC § 6330(c)(2)(A)(iii). The failure to entertain such an
offer, they assert, constitutes an abuse of discretion on the
part of the appeals officer. In addition, they take issue with
the Tax Court’s determination that the Kindreds, by
attempting to introduce collection alternatives, were simply
trying to challenge their underlying tax liability under the
“guise of an offer in compromise based on doubt as to
liability.”
As stated above, IRC § 6330(c)(2)(A) gives taxpayers faced
with an IRS levy the right to proffer collection alternatives
at the CDP hearing stage, including offers-in-compromise.20
This right, however, carries with it certain obligations on
the part of the taxpayer. For instance, Treas. Reg.
20
Section 301.6330-1(e)(3)A-E6 of the Treasury Regulations gives
some additional examples of collection alternatives, such as “a
proposal to withhold the proposed or future collection action in
circumstances that will facilitate the collection of the tax liability,
an installment agreement . . . the posting of a bond, or the
substitution of other assets.”
14 Nos. 05-1424 & 05-1435
§ 301.6330-1(e)(1) states that “[t]axpayers will be expected
to provide all relevant information requested by [the
appeals officer], including financial statements, for its
consideration of the facts and issues involved in the hear-
ing.” In addition, the regulations implore taxpayer partici-
pation in the CDP hearing process. Indeed, Treas. Reg.
§ 301.6330-1(e)(3)A-E8(ii) specifically provides that,
“taxpayers are encouraged to discuss their concerns with
the IRS office collecting the tax.” Suggested collection plans
submitted during a CDP hearing are weighed according to
“whether [the] collection action balances the need for the
efficient collection of taxes with the legitimate concern of
the person that any collection be no more intrusive than
necessary.” Treas. Reg. § 301.6330-1(e)(3)A-E8(i). The
decision to entertain, accept or reject an offer in compromise
is squarely within the discretion of the appeals officer and
the IRS in general. See IRC § 7122; Treas. Reg. § 301.7122-
1(c)(1).
The Kindreds’ argument that they should have been
allowed to submit an offer in compromise is frivolous. To
begin with, the Tax Court’s review, as well as our review, is
strictly confined to only those issues which were originally
raised during the CDP hearing. See Treas. Reg.
§ 301.6330-1(f)(2), Q-F5 & A-F5; Living Care v. United
States, 411 F.3d 621, 625 (6th Cir. 2005). Although the
record of the CDP hearing proceedings in this case is
sparse,21 it is clear that the Kindreds failed to ever actu
21
As the Sixth Circuit noted in Living Care, review of CDP
hearings is often based on a particularly scant record which
consists mainly of “parties’ appellate briefs and the Notice of
Determination letter . . . . No transcript or official record of the
hearing is required and, accordingly, one rarely exists.” 411 F.3d
at 625.
While the record consists of some additional information—such
as exhibits provided by the IRS concerning when certain events
(continued...)
Nos. 05-1424 & 05-1435 15
ally make an offer in compromise, much less submit one to
the IRS appeals officer for consideration in accordance with
the requirements set forth in IRC §§ 6330(c)(3) and 7122.
Without an actual offer in compromise to consider, it would
be most difficult for either the Tax Court or this court to
conclude that the appeals officer might have abused his
discretion; for the appeals officer could not mistakenly
reject something which has not been presented to him. See
Kendrics v. Commissioner, 124 T.C. 69, 79 (2005) (holding
that: “Since there was no offer in compromise before [the
appeals officer], there was no abuse in discretion in [the
officer] failing to consider an offer in compromise.”); Magna
v. Commissioner, 118 T.C. 488, 493 (2002) (holding that it
would be “anomalous . . . to conclude that [an] Appeals
Office abused its discretion under section 6330(c)(3) in
failing to grant relief, or in failing to consider arguments,
issues, or other matters not raised by the taxpayers or not
otherwise brought to the attention of [an] Appeals Office”
during a CDP hearing).
The Kindreds attempt to dodge the proverbial bullet,
however, by stating that the IRS appeals officer “would not
permit” them to submit an offer in compromise. However,
we have been unable to discern anything in the record
which would lend support to this statement or lead us to
believe that the appeals officer did any such thing. Indeed,
it is eminently clear that the Kindreds failed to participate
21
(...continued)
took place—the Kindreds’ case is no exception. Indeed, because
the Kindreds failed to ever show up to their scheduled CDP
hearing, obviously no transcript exists. In addition, the communi-
cations that transpired between the appeals officer and the
Kindreds prior to a determination was made are not included
in the record on appeal. Therefore, aside from the appeals officer’s
actual written decision, which is in the record, we are left with
little outside the pleadings to parse.
16 Nos. 05-1424 & 05-1435
in the CDP hearing process in any meaningful way. For
example, it is undisputed that, when asked to do so, the
Kindreds failed to provide financial information of any kind
to the appeals officer as required by Treas. Reg. § 301.6330-
1(e)(1). This alone would have provided the appeals officer
with a reason to refuse to consider any proffered offer in
compromise. See Olsen, 414 F.3d at 151 (stating that
“failure to respond to inquiries for information in a timely
manner constitutes grounds for giving no further consider-
ation to an offer in compromise.”).
What’s more, the Kindreds even failed to attend their
scheduled hearing in Las Vegas, Nevada, on January 15,
2004. The appeals officer, if he had seen fit, could have
issued a determination that day sustaining the levy and
denying the Kindreds any additional time to submit an offer
in compromise. However, he did not do so and in-
stead offered the Kindreds another fourteen days—until
January 29, 2004—to submit the requested financial
information along with an offer in compromise. True to
form, the Kindreds failed to do so and, thus, on February
13, 2004 a determination sustaining the levy was issued.22
The only explanation given for this complacency was offered
by the Kindreds’ representative during the administrative
proceedings, who stated: “I explained to [the appeals officer]
that I would require adequate time, based upon the near
lack of records and need to acquire information from the
Service itself, to prepare any [offer in compromise]. He [(the
appeals officer)] extended the hearing until January 29,
2004 but would not give any additional time for preparing
the [offer in compromise]. I was unable to submit an [offer
in compromise].” This statement, at the very least, serves to
22
It should be noted that this represents yet another two-week
period prior to the appeals determination in which the Kindreds
could have, but did not, submit financial information and/or
an offer in compromise.
Nos. 05-1424 & 05-1435 17
undermine the veracity of the Kindreds’ claim that they
were not “permitted to submit” an offer in compromise. To
the contrary, their own representative’s statement illus-
trates the fact that they were given numerous opportunities
to submit the required financial information and/or an offer
in compromise, but failed to do so. The fact that the
Kindreds were unable, or unwilling, to timely supply the
financial information that the regulations require in order
for the IRS to consider an offer in compromise, see Treas.
Reg. § 301.6330-1(e)(1), falls far short of establishing that
the appeals officer’s determination was hasty under the
circumstances23 and certainly does not mean that he abused
his discretion by “refusing” to allow the Kindreds to submit
such an offer.24 See, e.g., Olsen, 414 F.3d at 151; Murphy v.
Commissioner, 125 T.C. 301, 323 (2005) (holding that it was
reasonable for appeals officer to sustain levy where the
taxpayer had a two month period of time to submit a
reasonable offer in compromise, but failed to do so); Chan-
dler v. Commissioner, T.C. Memo 2005-99 (2005) (when
petitioner failed to supply requested financial information
after being given six weeks to do so it was not an abuse of
discretion for the appeals officer to issue a determination
sustaining a levy); Roman v. Commissioner, T.C. Memo
2004-20 (2005) (reasonable for appeals officer to sustain
levy where, after being give six weeks to do so, the taxpayer
23
They had approximately three months from the date they
requested a hearing, October 30, 2003, until the determination
was rendered on February 13, 2004, to submit the requisite
financial information along with an offer in compromise.
24
As the appeals officer stated in his written decision sustaining
the lien against the Kindreds, they “were offered the opportunity
to discuss alternative methods of collection, whether administra-
tive procedures [were] properly followed by the IRS, and the
degree of intrusiveness caused by the filing of the Notice of
Federal Tax Lien,” but failed to do so.
18 Nos. 05-1424 & 05-1435
failed to supply the requisite financial information in
conjunction with an offer in compromise).
Also, while our review of the Tax Court’s decision is
de novo, we pause for the sake of completeness and note
that the Tax Court had good reason to believe that the
Kindreds wished to submit an offer in compromise only as a
“guise” to lodge an impermissible collateral attack on their
underlying liability. As recently as their brief before this
court the Kindreds maintained their former intention to
introduce an offer which would be predicated on “doubt as
to liability.” It is true that the Kindreds would be precluded
from challenging their underlying liability during a CDP
proceeding, see infra p. 20-22. However, as discussed above
we are convinced that there are more fundamental reasons
for concluding that the appeals officer did not abuse his
discretion in not considering an offer in compromise, e.g.,
because no offer was in front of him and because the
Kindreds failed to supply the necessary financial informa-
tion.
2. Innocent Spouse Defense
The Kindreds next argument on appeal closely tacks their
claims regarding the consideration of an offer in compro-
mise. It is their assertion that the appeals officer “ignored
Appellant Lynette Kindred’s spousal defense.” See IRC
§ 6015. Nevertheless, the Kindreds maintain that “Lynette
Kindred’s spousal defense [would have been] part and
parcel of the [offer in compromise],” which, as discussed
above, was never properly before the appeals officer.
Innocent spouse relief or “relief from joint and several
liability,” such as that claimed by the Kindreds, falls under
the provisions of IRC § 6015(b)(1). That section requires
that: “(A) a joint return has been made for a taxable year;
(B) on such return there is an understatement of tax
attributable to erroneous items of one individual filing the
joint return; (C) the other individual filing the joint re-
Nos. 05-1424 & 05-1435 19
turn establishes that in signing the return he or she did not
know, and had no reason to know, that there was
such understatement; (D) taking into account all the facts
and circumstances, it is inequitable to hold the other
individual liable for the deficiency in tax for such taxable
year attributable to such understatement; and (E) the other
individual elects (in such form as the Secretary may
prescribe) the benefits of this subsection not later than the
date which is 2 years after the date the Secretary has begun
collection activities with respect to the individual making
the election.” However, in order to be eligible for relief
under § 6015, a taxpayer is first required to submit IRS
Form 8857, “Request for Innocent Spouse Relief.” See Treas.
Reg. § 6015-5(a). Form 8857 must be filed with the IRS
within two years of the date of the first collection activity
and requires that the taxpayer make certain statements
regarding their tax liability and marital status under
penalties of perjury. Id. at 6015-5(b).
Not surprisingly, the Kindreds did not submit a Form
8857. Nor did they even inform the appeals officer that they
wished to seek innocent spouse relief under § 6015(b).
Indeed, the first mention of a possible innocent spouse
defense is on Lynette Kindred’s petition in the Tax Court.
We agree with the Tax Court’s conclusion that this was
far too late to introduce such an argument. See Kindred v.
Commissioner, No. 5860-04L, at *2 (Nov. 5, 2004). The
regulations clearly state that, “[a] taxpayer may raise any
appropriate spousal defenses at a CDP hearing,” however,
“the taxpayer must do so in writing according to the rules
prescribed by the Commissioner or the Secretary.” Treas.
Reg. § 301.6330-1(e)(2). The Kindreds’ failure to submit
Form 8857 or any notice whatsoever of their intention to
raise a spousal defense during the CDP hearing process
is thus fatal to their claim that the appeals officer abused
his discretion by not considering such a defense. See supra
p. 13; Living Care, 411 F.3d at 625; Magna v. Commis-
20 Nos. 05-1424 & 05-1435
sioner, 118 T.C. at 493; see also Treas. Reg. § 6330-1(f)(2) A-
F5 (stating that: “In seeking Tax Court . . . review of Ap-
peals’ Notice of Determination, the taxpayer can only ask
the court to consider an issue that was raised in the tax-
payer’s CDP hearing.”). In addition, if it is the Kindreds’
contention that their spousal defense was to be included in
their non-existent offer in compromise, that argument
would also fail for the reasons outlined above. See supra.
p. 11-15.
B. Petitioners’ Challenge to the Timeliness of the IRS’
Assessment of an Income Tax Deficiency
In their final argument on appeal, the Kindreds claim
that “the Tax Court erred in determining that the assess-
ment by the [IRS] on December 20, 2002 for tax year 1998
was timely because it violates the [IRC § 6501].” We
disagree.
Contrary to the Kindreds’ statement, the Tax Court did
not determine that the assessment of the tax by the IRS
was timely under IRC § 6501. Instead, what the Tax Court
found was that “[b]ecause petitioner received a statutory
notice of deficiency for 1998, she is precluded from challeng-
ing her underlying tax liability.” There was good reason for
this determination.
As noted above, IRC § 6330(c)(2)(B) limits challenges as
to the “existence or amount of underlying tax liability” to
situations in which a taxpayer has “not receive[d] any
statutory notice of deficiency for such tax liability or did not
otherwise have an opportunity to dispute such tax liability.”
It is well settled law that a challenge to the IRS’ ability to
assess a tax under the statute of limitations codified at IRC
§ 6501 constitutes a “challenge to the underlying tax
liability.” See Pomerantz v. Commissioner, T.C. Memo 2005-
295 (2005); Jensen v. Commissioner, 87 T.C.M. 1340, 1343
(2004); Wolk v. Commissioner, T.C. Summ.Op. 2003-173
(2003); Hoffman v. Commissioner, 119 T.C. 140, 145 (2002).
Nos. 05-1424 & 05-1435 21
The Kindreds do not dispute the fact that they received a
statutory notice of deficiency. Thus, their claim that the IRS
was barred from assessing the tax based on the expiration
of the three-year statute of limitations in IRC § 6501, which
constitutes a challenge to the underlying tax liability, is
barred by IRC § 6330(c)(2)(B). The proper time to challenge
the amount, existence or timeliness of the IRS’ proposed
assessment would have been to file a petition with the Tax
Court within 90 days of receipt of the statutory notice of
deficiency. See IRC § 6213(a).25 The Kindreds failed to do
this and are thus precluded from doing so at this stage. See
IRC § 6330(c)(2)(B). In addition, this is yet another claim
that the Kindreds failed to present to the appeals officer
during CDP hearing proceedings, therefore they were
precluded from raising it either in a petition before the Tax
Court or in this court. Living Care, 411 F.3d at 625; Magna
v. Commissioner, 118 T.C. at 493; see also Treas. Reg.
§ 6330-1(f)(2) A-F5.
IV. CONCLUSION
We are convinced that the Tax Court properly concluded
25
In fact, Treas. Reg. 301.6330-1(e)(4) Example 1, specifically
states that if the IRS sends a statutory notice of deficiency to
a taxpayer, and that taxpayer “receives the notice of deficiency in
time to petition the Tax Court for a redetermination of the
asserted deficiency . . . . [and] [t]he taxpayer does not timely file
a petition with the Tax Court . . . [he/she] is precluded from
challenging the existence or amount of the tax liability in a
subsequent CDP hearing.” That is precisely what happened here.
The Kindreds have never disputed that they received the statu-
tory notice of deficiency in time to petition the Tax Court
for redetermination of the underlying tax liability. In addition,
they never disputed the IRS’ assessment in any way, that is, until
the CDP hearing; something that is specifically disallowed by the
regulations.
22 Nos. 05-1424 & 05-1435
that the IRS appeals officer did not abuse his discretion
during the Kindreds’ CDP hearing. Accordingly, summary
judgment was properly granted in favor of the IRS and the
decision of the Tax Court is
AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—7-20-06
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615 N.W.2d 604 (2000)
2000 SD 102
In the Matter of the Application of B.Y. DEVELOPMENT, INC.
No. 21104.
Supreme Court of South Dakota.
Considered on Briefs March 20, 2000.
Decided August 2, 2000.
*606 Roger A. Tellinghuisen, Michelle K. Percy, Spearfish, South Dakota, Paul J. Bradsky, Rapid City, South Dakota, Attorneys for appellee B.Y. Development, Inc.
Jon W. Mattson, Deadwood, South Dakota, Attorney for City of Deadwood and the Deadwood Historical Preservation Commission.
Mark Barnett, Attorney General, Michele K. Bennett, Diane Best, Assistant Attorneys General, Pierre, South Dakota, Attorneys for appellant South Dakota Department of Education and Cultural Affairs, Office of History.
KONENKAMP, Justice
[¶ 1.] This appeal concerns the proposed construction of a hotel-gaming facility within a historic district in the City of Deadwood, South Dakota. The Deadwood Historic Preservation Commission approved a modified project plan, with alterations suggested by, among others, the Department of Education and Cultural Affairs, Office of History. On appeal before the circuit court, the Office of History contended that although it did have an earlier opportunity to comment on the project, it did not have notice of the modified project plans ultimately approved by the Commission. In its ruling, the circuit court concluded that the Office of History received proper statutory notice of the project, and that later alterations to the plans did not require a new statutory notice, as every design change is not the instigation of a new project. We affirm.
Background
[¶ 2.] In the spring of 1998, B.Y. Development, Inc. proposed a plan for a hotel-gaming project on the 300 block of Main Street in Deadwood. Located near the edge of town, the project area lies within the Deadwood National Historic Landmark District, but outside the Downtown *607 Historic District. The area was zoned commercial in 1990. Among the properties currently in the general vicinity are an apartment building, a gas station-convenience store, several hotels, a restaurant, an insurance agency, and a rodeo grandstand and arena. The project required demolition of a 1950s era motel and certain residences, and the relocation of other buildings.
[¶ 3.] B.Y. applied to the Deadwood Historic Preservation Commission for permits to demolish the buildings in April and May of 1998. No plans for the project following the demolition were submitted at that time, so the application was tabled until the plans were presented. Four preliminary concept designs were submitted to the Commission on May 18, 1998. The City of Deadwood reviewed these designs and suggested changes. In the next several weeks, B.Y. submitted further preliminary concept designs that reflected the comments made by the City and the Commission. On June 5, 1998, the City submitted the preliminary concept design to the State Department of Education and Cultural Affairs, Office of History, for review and comment pursuant to SDCL 1-19A-11.1. B.Y. submitted color drawings of the project and preliminary floor plans, a site plan, and elevations to the City to review on June 7. The City suggested changes, which B.Y. incorporated into the plans, and on June 18, B.Y. submitted updated plans. On June 24, the Commission reviewed these revised project plans. B.Y supplied a computerized drawing of the completed project, after which the Commission approved the project design and sent its approval to the Office of History with an abbreviated case report.
[¶ 4.] After reviewing the project plans, the Office of History issued a "Determination of Adverse Effect." The Commission reviewed this, but reaffirmed its approval. Several days later the Office of History met with the City and B.Y. to discuss design alternatives. No consensus for an acceptable design was reached at this meeting. B.Y., however, incorporated some suggestions made by the Office of History and revised the project, reducing the building height from 58 feet to 45 feet, increasing the length of the building from 250 feet to 296 feet, decreasing the number of rooms from 90 to 80, adding landscaping to improve the appearance of the facade, and simplifying the design. Before the Commission met to review and vote on the revised plan on August 12, 1998, Christopher Hetzel, the Deadwood Historic Preservation Officer, spoke with the Office of History about the revised plan. The Office informed him that this plan too would not be approved and Hetzel duly reported that decision to the Commission. Nonetheless, formal notice of the revised plan was not sent to Office of History as it now insists is required under SDCL 1-19A-11.1. The Commission approved the revised plan and entered its written determination and case report detailing the factors and alternatives it considered in making its decision.
[¶ 5.] The Office of History appealed the matter to the circuit court. At the hearing, B.Y. sought to admit affidavits that had not been presented to the Commission. Over the Office of History's objection, the court admitted a portion of the affidavits. Thereafter, the court affirmed the decision of the Commission. The Office of History now appeals to this Court contending that (1) the circuit court erred by improperly admitting evidence outside the administrative record; (2) the Commission erred by issuing its final decision before the Office of History was provided with and afforded an opportunity to review final project plans; (3) the Commission erred by failing to address each feasible and prudent alternative to the proposal; and (4) the Commission erred by failing to include concise and explicit fact statements to support its findings.
Standard of Review
[¶ 6.] We review an agency's decisions the same as the circuit court, "unaided by any presumption of the correctness *608 of the circuit court's determination." Olson v. City of Deadwood, 480 N.W.2d 770, 775 (S.D.1992) (citation omitted). Our first inquiry under SDCL 1-26-36 is whether the question is one of fact or law. Questions of law and statutory construction are fully reviewable. Hanten v. Palace Builders, Inc., 1997 SD 3, ¶ 8, 558 N.W.2d 76, 78. Mixed questions of law and fact are also fully reviewable. Abild v. Gateway 2000, Inc., 1996 SD 50, ¶ 6, 547 N.W.2d 556, 558-59. Factual findings are reviewed under the clearly erroneous standard. Sopko v. C & R Transfer Co., 1998 SD 8, ¶ 6, 575 N.W.2d 225, 228.
Analysis and Decision
1. Admission of Evidence Outside the Administrative Record
[¶ 7.] The Office of History challenges the admissibility of the affidavits, pointing out that they were written after the Commission made its decision, and the Commission therefore could not have considered them. In the circuit court hearing, B.Y. offered the affidavits of Christopher Hetzel, the Deadwood Historic Preservation Officer, and Bernadette Williams, the Deadwood Zoning Administrator. In admitting the affidavits, the court explained:
Well, it's my view that some of it is additional evidence; some of it is not. And I willI will accept the filings only insofar as they're specifically referenced and it's evident that that evidence was considered by the Commission. The affidavits also go beyond that and to the extent that they incorporate any other matters that aren't specifically in the record or referred to in the record and show that they were considered, they're excluded.
It is unclear, however, exactly what was admitted and what was excluded. Pointing to SDCL 1-26-35,[1] the Office of History believes that while this statute allows a court sitting without a jury to go beyond the record in certain instances, the exceptions are inapplicable here. Because the circuit court did not specify what was being admitted, the Office of History argues that the affidavits and the accompanying exhibits should have been entirely excluded.
[¶ 8.] Comparing the information before the Commission and the information in the circuit court's findings and conclusions confirms that the findings that form the basis for the court's decision do not refer to any fact stated in the affidavits not also contained in the official record. Those items not considered by the Commission were also not considered by the court in its ruling. For example, an attachment to the affidavit of Williams lists variances granted in zoning unit four, the most stringent unit for historic preservation, and in zoning unit ten. The list states the various Deadwood businesses given a variance and the nature of the variance. A check of the references to the location in the record that allegedly indicate that the Commission considered this information shows that the Commission discussed the height of several buildings, but no specific variances were mentioned. The court's findings and conclusions do not mention this information either. Similarly, Williams stated in her affidavit that the project as approved by the Commission "satisfies the 1:7:1 Floor Area Ratio requirement in Commercial Highway zoning." It would be an overstatement to say that the general conversations in the record concerning zoning to which the court was directed are the same as this specific information, but the circuit court also did not include this in its findings.
[¶ 9.] As declared in SDCL 1-26-35, the court's review is confined to the *609 record below, absent an exception. Stanley County Sch. v. Stanley County Educ. Ass'n, 310 N.W.2d 162, 164 (S.D.1981). However, we presume until the contrary is shown that the "court did not rely on improper evidence." State Highway Comm'n v. Foye, 87 S.D. 206, 205 N.W.2d 100, 103 (1973) (citing Sabbagh v. Prof'l and Bus. Men's Life Ins. Co., 79 S.D. 615, 116 N.W.2d 513, 521 (1962)). It appears the circuit court relied only on evidence the Commission considered in making its decision. Even though the court did not specify what exact evidence it admitted, it made clear that to the extent an affidavit contained information not specifically in or referred to in the record, it would not be considered. The Office of History has not shown how this process harmed its position. In re Novaock, 1998 SD 3, ¶ 10, 572 N.W.2d 840, 843. Because the court confined its determination to the record, we find no prejudicial error.
2. Opportunity to Review Final Project Plans
[¶ 10.] The Office of History argues that the Commission is required to notify the Office before proceeding with a final decision. Its source for this view is SDCL 1-19A-11.1:
The state or any political subdivision of the state, or any instrumentality thereof, may not undertake any project which will encroach upon, damage or destroy any historic property included in the national register of historic places or the state register of historic places until the office of history has been given notice and an opportunity to investigate and comment on the proposed project. The office may solicit the advice and recommendations of the board with respect to such project and may direct that a public hearing be held thereon. If the office determines that the proposed project will encroach upon, damage or destroy any historic property which is included in the national register of historic places or the state register of historic places or the environs of such property, the project may not proceed until:
(1) The Governor, in the case of a project of the state or an instrumentality thereof or the governing body of the political subdivision has made a written determination, based upon the consideration of all relevant factors, that there is no feasible and prudent alternative to the proposal and that the program includes all possible planning to minimize harm to the historic property, resulting from such use; and
(2) Ten day's notice of the determination has been given, by certified mail, to the office of history. A complete record of factors considered shall be included with such notice.
Any person aggrieved by the determination of the Governor or governing body may appeal the decision pursuant to the provisions of chapter 1-26.
The failure of the office to initiate an investigation of any proposed project within thirty days from the date of receipt of notice thereof is approval of the project.
Any project subject to a federal historic preservation review need not be reviewed pursuant to this section.
After the Office of History decided the initial proposed project would encroach upon, damage, or destroy historic property, B.Y prepared a modified design. This design, the Office of History argues, amounted to a new proposal, and the Office was not given an opportunity to investigate and comment on that proposal before the plans were submitted to the Commission for final approval.
[¶ 11.] First, SDCL 1-19A-11.1 does not give the Office of History the power to disapprove the Commission's final decision. Instead, the statute provides that the Commission may not take any action on a proposed project until the Office *610 of History has been given an opportunity to investigate and comment on it. Even if the Office of History concludes that a project "will encroach upon, damage or destroy any historic property," the project may proceed if the Commission finds that, based on consideration of all relevant factors, "there is no feasible and prudent alternative to the proposal and that the program includes all possible planning to minimize harm to the historic property, resulting from such use...." SDCL 1-19A-11.1(1). Therefore, unless the Office of History is successful on appeal, following the Commission's written determination the project may proceed despite the Office of History's objections. Here, the circuit court found that the revised plans, rather than being a new proposal, were modifications, which the Commission had the authority under the statute to finally approve.
[¶ 12.] Second, SDCL 1-19A-11.1 calls for "notice and an opportunity to investigate and comment on the proposed project." (Emphasis added.) We usually give statutory "words and phrases their plain meaning and effect." South Dakota Subsequent Injury Fund v. Casualty Reciprocal Exch., 1999 SD 2, ¶ 17, 589 N.W.2d 206, 209 (quoting Delano v. Petteys, 520 N.W.2d 606, 608 (S.D.1994) (quoting In re Famous Brands, Inc., 347 N.W.2d 882, 884-85 (S.D.1984))). Had the Legislature intended to give the Office of History the right to notice and an opportunity to comment on every design change in a project, it could have used language to that effect.
[¶ 13.] The words "proposed project" suggest that design modifications do not necessarily trigger a requirement for resubmission of project plans to the Office of History. The Legislature also chose the word "comment" rather than "approve." Therefore, under our interpretation of SDCL 1-19A-11.1, the Commission was not required to resubmit the adjusted plans to the Office of History. As a practical matter, to hold otherwise would create a situation where every alteration in a plan would subject a project to resubmittal, effectively bringing construction to a standstill. We do not believe that is what the Legislature intended.
[¶ 14.] Third, even if we were to interpret the statute to prohibit design changes without a full resubmission to the Office of History, as the circuit court found, there was no prejudice to the Office of History because there was no showing how any further comments would have made any difference in the final plans the Commission approved. After all, the project remained essentially the same, but with some modification made in part to mollify the Office of History.
3. Feasible and Prudent Alternatives
[¶ 15.] Next, the Office of History contends that the Commission did not consider all feasible and prudent alternatives to the proposal. In accord with the requirements of SDCL 1-19A-11.1(1), the Commission must issue a written decision after an adverse finding by the Office of History. The Commission's determination must conclude, "based upon the consideration of all relevant factors, that there is no feasible and prudent alternative to the proposal and that the program includes all possible planning to minimize harm to the historic property, resulting from such use...." The Office of History argues that rather than considering "all relevant factors," such as the historic criteria outlined in ARSD 24:52:07:04 and 36 CFR 67, the Commission considered only economic factors, giving cursory attention to historical criteria.
[¶ 16.] The Commission is not required to consider as "relevant factors" any and all alternatives, but only those supported by sufficient facts to indicate they are feasible and prudent. B.Y. points out that according to the South Dakota Local Preservation Handbook (1995), all *611 that is required is the exploration of feasible alternatives to reduce harm to historic property. Further, B.Y. continues, the extensive consideration given to the plans over a four month period, along with the detail set out in the case report, establish that while economic factors were considered, all relevant factors were considered as well.
[¶ 17.] The circuit court noted that the Office of History did not brief or argue this issue and thus the matter was not properly before it. Generally, failure to raise an issue below will preclude appellate review. Matter of Simpson, 500 N.W.2d 624, 626 (S.D.1993); Sharp v. Sharp, 422 N.W.2d 443, 445 (S.D.1988). Our function on appeal is to decide from the record whether the Commission took a hard look at the prudent and reasonable alternatives using relevant factors and based its decision on evidence. The weight to be given the individual factors is for the Commission to decide. The record shows that, among other things, the Commission reviewed several proposed designs and rejected several; considered smaller and different shaped buildings; expressed concern about the height of the building, rejecting taller structures and eventually approving a height of forty-five feet; considered setbacks from the street; evaluated overall width and mass, as well as overall appearance, including landscaping; appraised the impact on the surrounding historic properties; and recognized that the area is zoned commercial, in that residential development was not allowed. It is apparent that the Commission considered not only economic factors, but also other reasonable alternatives.
4. Factual Support for the Commission's Findings
[¶ 18.] Finally, the Office of History argues that the Commission failed to reveal the underlying facts supporting its findings, as required by SDCL 1-26-25.[2] The Office contends that the Commission's written decision does not establish a basis for its approval of the project, as evidenced by the record having to be supplemented with affidavits. The Commission, the Office asserts, did not make specific findings on the economic feasibility of or the need for a project of this size, or what it meant by its finding that "[o]ther designs were also discussed, but were rejected because they would not accommodate the project's objectives." As it exists, the Office of History argues, the record does not allow for meaningful judicial review.
[¶ 19.] We conclude that SDCL 1-26-25 does not apply to the Commission's preparation of its written decision; rather, that statute applies to contested cases. A contested case is one in which a matter is to be determined by an agency.[3] The definition of "agency" under SDCL 1-26-1(1) expressly excludes any unit of local *612 government.[4] Therefore, the Commission is not required to follow the requirements of SDCL 1-26-25 in conducting its administrative responsibilities. Also, SDCL 1-29A-11.1 requires the Commission to prepare a written determination, not findings. The Commission appears to have followed the directives of this statute and SDAdminR 24:52:07:03 in preparing its written decision. The Commission is not required to follow all the requirements of an administrative agency, but it must make a written decision detailing its reasons for approving a project.
[¶ 20.] Here, the written decision adequately details the reasons the Commission arrived at its conclusion. The decision follows closely the pattern set forth in SDAdminR 24:52:07:03, which specifies the requirements for case reports submitted to the Office of History. Presented in the decision are alternatives and other relevant factors the Commission considered. We conclude that this writing was adequate to provide meaningful appellate review, and that it satisfied the requirements of SDCL 1-19A-11.1 and SDAdminR 24:52:07:03.
[¶ 21.] Affirmed.
[¶ 22.] MILLER, Chief Justice, and AMUNDSON and GILBERTSON, Justices, concur.
[¶ 23.] SABERS, Justice, dissents.
SABERS, Justice (dissenting).
[¶ 24.] I respectfully disagree with the majority opinion's determination in Issue 2 that the Office of History was provided with an opportunity to investigate and comment on the project ultimately approved by the Commission.
[¶ 25.] SDCL 1-19A-11.1 prohibits the Commission from undertaking a project that will "encroach upon, damage or destroy any historic property ... until the [O]ffice of [H]istory has been given notice and an opportunity to investigate and comment on the proposed project[.]" Given the plain meaning of this statutory language, the obvious purpose of the statute is to protect historical property.[5] In order to carry out that purpose, the legislature requires that the Office of History be provided with an opportunity to investigate and comment on any proposed project that is to be constructed on historical property.
[¶ 26.] Here, the site for the proposed project involves historical property in Deadwood. The Office of History reviewed and commented on the initial plans. However, after the Office commented on the initial plans, substantial changes were made: (1) the height of the building was reduced from fifty-eight feet to forty-five feet; (2) the length of the building was increased from 250 feet to 296 feet; (3) the number of the rooms was reduced from ninety to eighty; and (4) landscaping was added to aesthetically improve the facade. Obviously, this plan was drastically different in dimension, capacity and appearance *613 than the initial plan submitted to the Office of History. In fact, these substantial changes constitute an entirely new plan. Therefore, the Office of History was statutorily entitled to evaluate the new plan to determine the extent of the encroachment, damage or destruction of historic property. However, this new plan was never submitted to the Office of History. Instead, BY circumvented the statutory procedure and obtained final approval from the Commission.
[¶ 27.] The majority opinion terms these substantial and material alterations as a mere "design change." The effect of this characterization is to invite developers to submit preliminary plans to the Office of History once and, thereafter, substantially change the plans and seek final approval from the Commission. Clearly, this was not the legislature's intention, which was to preserve and protect historical property.
[¶ 28.] The Office of History is a regulatory agency established to ensure that historic preservation concerns are satisfied. While the legislature does not require that developers comply with the comments from the Office of History, it did, nonetheless, clearly require that the Office of History be provided with an opportunity to "investigate and comment on the proposed project." This is part of the statutory process to ensure that "there is no feasible and prudent alternative to the proposal and that the program includes all possible planning to minimize harm to the historic property...." SDCL 1-19A-11.1(1). Here, the statutory process was circumvented and the Office was denied its opportunity to investigate and comment on the project that received final approval from the Commission.
[¶ 29.] The majority opinion further claims that a reversal "would create a situation where every alteration in a plan would subject a project to resubmittal, effectively bringing construction to a standstill." I disagree. Insignificant modifications do not require resubmissions to the Office before they are implemented. However, when the plans substantially change the dimension, appearance and capacity, resubmission to the Office of History is statutorily required because the changes constitute a new proposed plan.
[¶ 30.] Because a new plan was proposed to the Commission without providing an opportunity to the Office of History to investigate and comment, the Commission's final approval was premature and illegal. Therefore, this case should be reversed and remanded.
[¶ 31.] I would also reverse and remand on Issue 1 because the acceptance of affidavits outside the record clearly violates SDCL 1-26-35 and demonstrates the cavalier attitude of the trial court and this court toward "historic preservation" when it dares to get in the way of "economic progress." SDCL 1-26-35 provides that "[t]he review shall be conducted by the court without a jury and shall be confined to the record." (emphasis added). The plain language cannot be any plainer.
NOTES
[1] SDCL 1-26-35 provides:
The review shall be conducted by the court without a jury and shall be confined to the record. A trial de novo may not be granted unless otherwise authorized by law, but in cases of alleged irregularities in procedure before the agency, not shown in the record, proof thereon may be taken in the court. The court, upon request, may hear oral argument.
[2] SDCL 1-26-25 states in part:
A final decision or order adverse to a party in a contested case shall be in writing or stated in the record. It may affirm, modify, or nullify action previously taken or may direct the taking of new action within the scope of the notice of hearing. It shall include findings of fact and conclusions of law, separately stated. Findings of fact, if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings.
[3] A "contested case" is defined as
a proceeding, including rate-making and licensing, in which the legal rights, duties, or privileges of a party are required by law to be determined by an agency after an opportunity for hearing but the term does not include the proceedings relating to rule making other than rate-making, proceedings related to inmate disciplinary matters as defined in § 1-15-20, or student academic or disciplinary proceedings under the jurisdiction of the Board of Regents or complaints brought by students attending institutions controlled by the Board of Regents about their residency classification under §§ 13-53-23 to 13-53-41, inclusive[.]
SDCL 1-26-1(2). Also, as we recently discussed in Bergee v. South Dakota Board of Pardons and Paroles, 2000 SD 35, ¶ 6, 608 N.W.2d 636, 640, a usual characteristic of a contested case is that it is adversarial.
[4] SDCL 1-26-1(1) defines "Agency" as
each association, authority, board, commission, committee, council, department, division, office, officer, task force or other agent of the state vested with the authority to exercise any portion of the state's sovereignty. The term does not include the Legislature, the Unified Judicial System, any unit of local government, or any agency under the jurisdiction of such exempt departments and units unless the department, unit, or agency is specifically made subject to this chapter by statute[.]
[5] SDCL 1-19A-11.1 is similar to the National Historic Preservation Act of 1966 (16 USC § 470 et seq.) which establishes the National Register of Historic Places. Property that is listed in the National Register is subject to favorable tax treatments as well as federal grants. 36 C.F.R. § 60.2(c). Whenever a listed site is the subject of a federal proposed project, the Advisory Council on Historic Preservation must be afforded "a reasonable opportunity to comment" on the project. 16 USC § 470h-2(f). These comments must be "taken into account and integrated into the decisionmaking process, [however,] the program decisions rest with the agency implementing the [project]." 36 C.F.R. § 60.2(c).
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17-1327
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
CORY S. CASTETTER,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Fort Wayne Division.
No. 1:14-CR-44-TLS — Theresa L. Springmann, Chief Judge.
____________________
ARGUED JUNE 2, 2017 — DECIDED AUGUST 4, 2017
____________________
Before FLAUM, EASTERBROOK, and KANNE, Circuit Judges.
EASTERBROOK, Circuit Judge. With the authority of a war-
rant, see United States v. Jones, 565 U.S. 400 (2012), police in-
stalled and monitored a GPS locator on a car owned and
driven by Mark Holst. They were investigating Holst’s par-
ticipation in methamphetamine sales and wanted to know,
among other things, where he was getting the drug. The GPS
device had the ability to transmit data so that the car could
be traced in real time. Police tracked Holst’s car on Septem-
2 No. 17-1327
ber 4, 2014, and learned that it had stopped at a particular
place for more than an hour. An informant told the police
that Holst had traveled to buy methamphetamine. Police
stopped Holst’s car as he was driving home and found some
of that drug. They relayed the information to other officers,
who applied for a warrant to search the house in whose
driveway Holst’s car had lingered. That house turned out to
be Cory Castetter’s. The search turned up methampheta-
mine, other drugs, and approximately $62,000 in cash.
Prosecuted under federal law, 21 U.S.C. §841(a)(1),
Castetter moved to suppress the evidence found when the
police executed the second warrant. He did not dispute the
validity of the first warrant or the existence of probable
cause to support the second warrant, but he contended that
information derived from the first warrant should be ig-
nored—and, if it is ignored, the second warrant would lose
its foundation. Castetter observed that Holst lives in Michi-
gan, where the first warrant issued, while he lives just across
the border in Indiana. As Castetter saw things, Michigan’s
police lack authority to monitor the location of a car in Indi-
ana, no matter what the Michigan warrant says. Castetter’s
fallback argument is that the first warrant pertains to Holst,
not him, and that police (whether from Michigan or Indiana)
were forbidden to learn who was doing business on his
property without obtaining a warrant based on his own ac-
tivities. The district court rejected these arguments and de-
nied the motion. 115 F. Supp. 3d 968 (N.D. Ind. 2015). Castet-
ter then entered a conditional plea of guilty, reserving the
right to raise the suppression argument on appeal, and was
sentenced to 108 months’ imprisonment.
No. 17-1327 3
The problem with Castetter’s principal argument is that
the Fourth Amendment does not concern state borders. It
reads: “The right of the people to be secure in their persons,
houses, papers, and effects, against unreasonable searches
and seizures, shall not be violated; and no Warrants shall is-
sue, but upon probable cause, supported by Oath or affir-
mation, and particularly describing the place to be searched,
and the persons or things to be seized.” Nothing there about
state lines. The Constitution demands that a warrant be sup-
ported by probable cause, an oath, and particularity. As we
have already mentioned Castetter does not deny that these
requirements were satisfied.
States may decide as a matter of domestic law not to au-
thorize their police to acquire information extraterritorially,
but federal courts do not use the exclusionary rule to enforce
state-law doctrines. See Virginia v. Moore, 553 U.S. 164 (2008).
States also may elect to ignore information given to them, by
other states’ officers, about what happens within their terri-
tory. As far as the Fourth Amendment is concerned, the Indi-
ana judge who was asked to issue the second warrant could
have said: “I don’t think that the Michigan police have any
business insinuating their GPS locators into this state, so I
refuse to issue a warrant.” But the Indiana judge did not say
that. So we have not only the principle of Moore that viola-
tions of state law do not justify suppression in federal prose-
cutions, but also the (implicit) decision of the Indiana judge
that there was no problem, as a matter of Indiana’s law, in
using information about Indiana sent to police in Michigan.
Information about Holst’s driving (and stopping) went
by radio to a receiver connected to the Internet. We do not
know the receiver’s location (it may have been a satellite or a
4 No. 17-1327
cell-data node), but the Internet transcends state borders—
and the GPS satellites, all launched and operated by the U.S.
Air Force, are in orbit 12,540 miles high, well beyond any
state’s domain. The process of tracking a car’s location by
GPS does not offend any state’s sovereign rights; this prose-
cution cannot founder on the theory that the drug laws, or
the GPS system, exceed the national power to legislate, regu-
late, or investigate. Compare Bond v. United States, 134 S. Ct.
2077 (2014), with Gonzales v. Raich, 545 U.S. 1 (2005). The na-
tional government, not any state, regulates radio, interstate
computer networks, and the GPS system.
Castetter’s fallback argument is equally weak. True, the
first warrant was not based on information about Castetter.
But neither did it authorize anyone to learn about the inside
of his home, as the infrared device did in Kyllo v. United
States, 533 U.S. 27 (2001). All the police learned by monitor-
ing the GPS device was the location of Holst’s car, and
Castetter lacked a privacy interest in that location.
Suppose that instead of getting a warrant to track Holst’s
car, police had persuaded him to become an informant and
report what happened inside Castetter’s house. Suppose, in-
deed, that Holst had agreed to wear a camera and an audio
recorder, providing many facts about Castetter’s house and
comprehensive details about the transaction. That would not
have violated any of Castetter’s rights. See, e.g., Hoffa v. Unit-
ed States, 385 U.S. 293 (1966). Or suppose Castetter had given
Holst documents revealing specifics of his drug operations,
and the police later had stopped Holst without either proba-
ble cause or a warrant. Castetter could not object, because
the privacy invaded would have been Holst’s rather than
Castetter’s. See United States v. Payner, 447 U.S. 727 (1980);
No. 17-1327 5
Rawlings v. Kentucky, 448 U.S. 98 (1980). But the police did
none of these things. They obtained a location-tracking war-
rant and learned no more than where Holst had driven his
car. The Constitution is not offended if, by executing a war-
rant to search one person (such as Holst), police learn in-
criminating details about another (such as Castetter).
AFFIRMED
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720 F.2d 684
Moctezumav.Crown Beverage Co., Inc.
82-5784, 82-6025
UNITED STATES COURT OF APPEALS Ninth Circuit
10/3/83
1
C.D.Cal.
AFFIRMED
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FILE COPY
Court of Appeals
Twelfth Court of Appeals District at Tyler
BILL OF COSTS
Court of Appeals No. 12-14-00300-CV
Trial Court No. P12025
In the Estate of Rodney Joe Knight, Deceased
DOCUMENTS FILED AMOUNT FEE PAID BY
Motion fee $10.00 William N Pedersen
Reporter's record $140.00 Bill Pedersen
Reporter's record $479.00 Appellant and Appellee
Clerk's record $211.00 Bill Pedersen III
Motion fee $10.00 William N Pedersen
Supreme Court chapter 51 fee $50.00 Stripling, Pedersen & Floyd
Indigent $25.00 Stripling, Pedersen & Floyd
Required Texas.gov efiling fee $20.00 Stripling, Pedersen & Floyd
Filing $100.00 Stripling, Pedersen & Floyd
TOTAL: $1,045.00
I, Pam Estes, Clerk of the Court of Appeals, Twelfth Court of Appeals District at Tyler, Texas,
certify that the above copy of the Bill of Costs is true and correct. GIVEN UNDER MY HAND
AND SEAL OF SAID COURT, at Tyler, this 4th day of December 2015, A.D.
PAM ESTES, CLERK
By:_____________________________
Katrina McClenny, Chief Deputy Clerk
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
FEB 18, 2011
No. 10-10941
JOHN LEY
CLERK
D. C. Docket No. 5:09-cr-00030-RS-AK-8
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
AMY COOPER,
Defendant-Appellant.
______________________
Appeal from the United States District Court
for the Northern District of Florida
______________________
(February 18, 2011)
Before BLACK and HULL, Circuit Judges, and HOWARD,* District Judge.
PER CURIAM:
*
Honorable Marcia Morales Howard, United States District Judge for the Middle District of
Florida, sitting by designation.
Appellant Amy Cooper appeals her conviction for using a telephone to
facilitate the commission of the felony of distribution of cocaine, in violation of 21
U.S.C. § 843(b). Cooper argues she was a “principal” in the purchase of the
cocaine and she cannot be found to have facilitated the distribution in light of
Abuelhawa v. United States, – U.S. –, 129 S. Ct. 2102 (2009). Because the facts
support Cooper using a telephone to facilitate the distribution of cocaine, the jury
verdict is affirmed.
I. BACKGROUND
Amy Cooper lived with her boyfriend, Dr. Michael Reed. Twelve to
eighteen months before she was arrested, Cooper introduced Reed to a drug dealer,
Hector Melara. Cooper was already a cocaine customer of Melara, and Reed soon
became a customer as well. Melara testified at trial that he began to sell Reed
cocaine both when Reed was with Cooper and when Reed was alone in his office.
In early May 2009, Reed contacted Melara and negotiated for the purchase of one
kilogram of cocaine for $30,000. Reed planned to pay for the kilogram out of his
own bank account because he was trying to “keep [Cooper] out of it” and he
intended to tell Cooper he was only buying 7 ½ or 10 grams of cocaine. Melara
testified that it was his impression Reed was lying to Cooper and continued to lie
to Cooper until the day the deal was to occur.
2
Melara’s supplier delivered the cocaine to Melara the same day Melara was
supposed to deliver the cocaine to Reed, but the supplier arrived later than
expected. Melara called Reed and said he was running late. Reed told Melara he
had to go to work, but Melara could still come to Reed’s house and Cooper would
“do the deal” for him. Reed explained that Cooper was unaware of the quantity of
cocaine Melara was bringing to the house, and that he was going to tell Cooper he
was “just going to pass it on to someone else,” referring to the cocaine.
On his way to deliver the cocaine to Reed’s residence, Cooper called Melara
and told him she had visitors and Melara should give her ten minutes before he
came over. Melara said that was fine, as he was currently driving by a business he
knew to be more than ten minutes away from Reed’s residence. This was the first
conversation Melara had with Cooper regarding the deal. Fifteen minutes later,
Cooper called Melara again and told him the guests were gone and to come over.
Melara arrived at Reed’s residence and Cooper greeted him at the door.
Cooper escorted Melara through the garage to a stairwell leading to the master
bedroom closet. She told Melara to look in the closet at the right-hand desk
drawer where he would find the money. Melara found the money, counted
$30,000, and Cooper double counted it to ensure the accuracy of the payment.
Melara then handed the cocaine to Cooper, who felt and smelled it. After the
3
exchange, Melara left the house, followed shortly thereafter by Cooper who was
accompanied by another female thought to be the maid. Cooper returned to the
house approximately 30 minutes later and was confronted by law enforcement.
Cooper was charged and found guilty of using a telephone to facilitate the
commission of a felony, 21 U.S.C. § 841(a)(1), that being the distribution of
cocaine, in violation of 21 U.S.C. § 843(b). The district court denied Cooper’s
motion for a judgment of acquittal at the close of the Government’s evidence. It
also denied her post-verdict motion for judgment of acquittal pursuant to Fed. R.
Crim. P. 29(c). Cooper now appeals her conviction.
II. DISCUSSION
This Court reviews “the sufficiency of the evidence de novo, viewing the
evidence in the light most favorable to the government.” United States v. Garcia,
405 F.3d 1260, 1269 (11th Cir. 2005). “All reasonable inferences and credibility
choices must be made in favor of the government and the jury’s verdict.” Id.
Cooper makes two main arguments. First, Cooper argues she was a
“principal” in the transaction because she was standing in the place of Reed as the
buyer. Thus, she concludes, she cannot be found to have facilitated the
distribution of cocaine in light of the Supreme Court’s holding in Abuelhawa, –
U.S. –, 129 S. Ct. 2102, 2107 (holding that a buyer using a telephone to make a
4
misdemeanor drug purchase does not “facilitate” felony drug distribution because
the term “facilitate” is limited to someone other than a principal or necessary
actor).
Cooper was not a “principal” as a stand-in buyer in this transaction. The
evidence showed it was Reed, not Cooper, who was the purchaser: (1) Reed
initiated the purchase by calling Melara and asking to purchase a kilogram of
cocaine; (2) Reed and Melara had multiple conversations to “negotiate” the sale;
and (3) Reed supplied the money to purchase the cocaine. In contrast, Cooper was
only enlisted at the last minute to help complete the final stages of the transaction.
It was in this capacity that she placed calls to Melara. In fact, Cooper only learned
the deal involved one kilogram of cocaine the day of the transaction because Reed
had previously lied and told Cooper he was only getting 7 ½ or 10 grams of
cocaine. Undoubtably, Cooper aided Reed through her actions; however, her
actions also aided Melara. Cooper cannot be characterized as the purchaser of the
cocaine when her role in the transaction was to aid both Reed and Melara. In this
regard, Abuelhawa is not applicable.
Second, Cooper argues the Government failed to present sufficient evidence
that her phone calls facilitated Melara’s actions. She contends her phone calls did
nothing to help Melara as he was already on his way over to Reed’s house.
5
Viewing all the evidence in the light most favorable to the Government, this
argument is unpersuasive. Melara testified Cooper’s calls assisted him because it
was “very important” for him to know no one else was at the house, and “very
important” to know that the house would be clear if he waited the time specified
by Cooper. Cooper’s calls allowed Melara to judge his timing to ensure he and
Cooper would be alone when Melara delivered the cocaine. Melara claims he
would have been concerned if other people were at the house because others could
inform law enforcement about the deal. Therefore, the Government presented
sufficient evidence to support a finding that Cooper used a telephone to facilitate
Melara’s distribution of the cocaine.
III. CONCLUSION
In conclusion, Cooper was not a “principal” in the transaction and the
evidence sufficiently supported the jury’s verdict that she used a telephone to
facilitate the distribution of cocaine.1
AFFIRMED.
1
In light of this opinion, Cooper’s motion for release pending appeal is now moot.
6
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IN THE SUPREME COURT OF THE STATE OF DELAWARE
MELODY STARLING, §
§ No. 33, 2019
Defendant Below, Appellant, §
§ Court Below—Superior Court
v. § of the State of Delaware
§
SPENCER APARTMENTS, § C.A. No. N18A-09-003
§
Plaintiff Below, Appellee. §
Submitted: July 12, 2019
Decided: August 29, 2019
Before VAUGHN, SEITZ, and TRAYNOR, Justices.
ORDER
After consideration of the parties’ briefs and the record on appeal, we
conclude that the judgment below should be affirmed on the basis of the Superior
Court’s decision dated January 8, 2019. A tenant who seeks to terminate a rental
agreement or deduct the reasonable cost of repairs based on a landlord’s failure to
maintain the rental unit as required must first provide to the landlord written notice
of the maintenance issue, in accordance with 25 Del. C. §§ 5306-07. The appellant
testified that she did not provide written notice of the alleged maintenance
deficiencies.1
1
Starling v. Spencer Apartments, CPU4-17-004961, Transcript of Civil Trial Proceedings, at 70
(Del. Ct. Com. Pleas Sept. 6, 2018).
NOW, THEREFORE, IT IS ORDERED that the judgment of the Superior
Court is AFFIRMED.
BY THE COURT:
/s/ James T. Vaughn, Jr.
Justice
2
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608 F.2d 1375
U. S.v.McElroy
No. 79-1671
United States Court of Appeals, Ninth Circuit
11/8/79
1
C.D.Cal.
AFFIRMED; DENIED
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298 F.2d 544
62-1 USTC P 12,060
Rose GELB, Executrix, Victor Edwin Gelb, Manufacturers TrustCompany, Executors, of the Estate of Harry Gelb, Petitioners,v.COMMISSIONER OF INTERNAL REVENUE, Respondent.
No. 33, Docket 26952.
United States Court of Appeals Second Circuit.
Argued Nov. 30, 1961.Decided Jan. 22, 1962.
Sanford Saideman, New York City, for petitioners.
Morton K. Rothschild, Washington, D.C. (Louis F. Oberdorfer, Asst. Atty. Gen., Lee A Jackson, Robert N. Anderson, Attys., Dept. of Justice), Washington, D.C., for respondent.
Before CLARK, FRIENDLY and KAUFMAN, Circuit Judges.
FRIENDLY, Circuit Judge.
1
The executors under the will of Harry Gelb petition for review of a decision of Judge Opper in the Tax Court, 19 T.C.M. 987, which sustained the Commissioner's determination that a residuary trust created by the will did not qualify for the marital deduction. We agree that no deduction was warranted under 812(e)(1)(F) of the Internal Revenue Code of 1939, as added by 361(a) of the Revenue Act of 1948, c. 168, 62 Stat. 110, 117-118, 26 U.S.C.A. 812(e)(1) (F), which was in effect at Gelb's death. However, we hold that a 'specific portion' of the trust qualified for the deduction under the retrospective amendment of that section made by 93(a) of the Technical Amendments Act of 1958, 72 Stat. 1606, 1668.
I.
2
The critical provisions of the residuary clause of the will, executed May 27, 1953, are set out in the margin.1 At the date of Gelb's death, November 16, 1953, the governing statute, cited above, provided that 'an interest in property passing from the decedent in trust' should qualify for the marital deduction 'if under the terms of the trust his surviving spouse is entitled for life to all the income from the corpus of the trust, payable annually or at more frequent intervals, with power in the surviving spouse to appoint the entire corpus free of the trust (exercisable in favor of such surviving spouse, or of the estate of such surviving spouse, or in favor of either, whether or not in each case the power is exercisable in favor of others), and with no power in any other person to appoint any part of the corpus to any person other than the surviving spouse.' The statute added that the provision 'shall be applicable only if, under the terms of the trust, such power in the surviving spouse to appoint the corpus, whether exercisable by will or during life, is exercisable by such spouse alone and in all events.'
3
There is no doubt that the residuary trust would fit the statute save for the paragraph with respect to Claire. We find no merit in the Commissioner's contention that this provision violated the requirement that the surviving spouse must be 'entitled for life to all the income from the corpus of the trust.' The language of the will is plain that the provision in regard to Claire was an additional power to invade corpus, not one to divert income from the widow; if the language were ambiguous, which it is not, the fact that the trust income ranged only from some $3000 to $3500 a year, a probability hardly unknown to the testator, would be determinative in taxpayers' favor. However, the Commissioner and the Tax Court were right that the provision infringed the requirement that there must be 'no power in any other person to appoint any part of the corpus to any person other than the surviving spouse,' and the converse that the power of the surviving spouse to appoint the entire corpus must be 'exercisable by such spouse alone and in all events.'
4
If the draftsman of the will had worded the provision for Claire as he did the clause with respect to wedding gifts for his daughters, there would have been no difficulty. If these happy events should occur, Rose was free in her individual capacity to demand or not to demand an additional $3000 out of corpus. Taxpayers contend that although the power with respect to Claire was vested in two trustees, Rose was one of them and that her discretion was similarly unlimited, hence no person other than Rose could 'appoint any part of the corpus to any person other than' herself. They add, as a makeweight, that any payments for Claire's benefit were to be made to Rose.
5
The contention fails on two counts: (1) The will did not make it certain that Rose would be a trustee throughout her life; and (2) equity would not permit her as a trustee to veto, in her individual interest, payments to Claire required to carry out the testator's stated purpose. The basic argument thus failing, the makeweight alone cannot carry the burden; the interposition of Rose as a conduit, at least after claire attained majority, see Regulations 105, 81.47a(c)(9), added by T.D. 6529, I.R.B. 1961-9 at p. 73, would not prevent the appointment's being 'to' Claire.
6
(1) In sharp contrast to the clause as to the wedding gifts and, we must presume, for sufficient reasons, the power with respect to Claire was vested in 'my individual Trustees.' At Harry's death it was not certain that Rose would be one, or would remain such throughout her life; legal incapacity on her part would prevent this, 1 Scott, Trusts (2d ed. 1956), 107, at p. 776. If it did, Victor, or Victor and Ruth, would have the power to appoint to Claire. Under the 1939 Act, the entire trust was disqualified for the deduction by the existence of such a power in a person other than the spouse to pay even a limited amount to a person other than the spouse. See Estate of Raymond Parks Wheeler, 26 T.C. 466 (1956); Estate of Allen L. Weisberger, 29 T.C. 217 (1957).
7
Taxpayers might seek to counter this by pointing to rulings that when a sufficient power of appointment is given to the surviving spouse personally, the trust qualifies for the marital deduction even though the spouse is incompetent on the day of death, Rev.Rul. 55-518, 1955-2 Cumb.Bull. 384; see 4 Mertens, Law of Federal Gift and Estate Taxation (1959) 29.38, at p. 570, and then arguing that, by the same token, the mere naming of Rose as trustee sufficed. This does not follow. In the absence of contrary provision, the effect of incompetency on a power held personally is a suspension of the power for the period of the incapacity; the effect of incompetency on a trustee is removal from office. See 1 Scott, supra. The consequences of the difference are illustrated by Starrett v. Commissioner, 223 F.2d 163 (1 Cir. 1955), where the testator had given his spouse a qualifying power but had provided for its termination in the event of her legal incapacity. The Court, through Chief Judge Magruder, held the sum in controversy not available for the marital deduction, relying ultimately on the distinction between the absolute termination provided for and the mere suspension that would have occurred if the holder of the power had become incompetent, with nothing said in the will, 223 F.2d at 167. Here incapacity on Rose's part would cause a termination of her status as trustee, with effect similar to the termination of the widow's power in Starrett. In that event another person, Victor, or other persons, Victor and Ruth, would have power to appoint part of the corpus to Claire. Estate of Morton H. Spero, 34 T.C. 1116 (1960).
8
Miller v. Dowling, 1956-1 USTC P11646 (S.D.N.Y.1956), relied on by taxpayers, is distinguishable. There the widow in her individual capacity had a sufficient power to invade corpus and as trustee held a power to terminate the trust. The court held that a provision for a successor trustee in the event of the trustee's incapacity did not render the deduction unavailable. Although a successor trustee would take over the power to terminate the trust, the court said that, because of N.Y.Civil Practice Act, 1357,2 the widow's power to invade would be protected in the event of her incapacity, so that the trustee's power to terminate could not be exercised in derogation of the widow's rights. Thus it concluded that the trust could be terminated during the widow's life only by her own release, and the deduction was available. No similar reasoning would prevent invasions of principal for the benefit of Claire by Victor, or by Victor and Ruth, in the event of Rose's not serving as trustee; that would be carrying out the testator's intent, not frustrating it.
9
(2) Even if it were certain that Rose would always be a trustee, she could not in her individual interest block payments required 'for the proper support, maintenance, education and up-bringing' of Claire. Whereas the testator indicated no interest in whether the wife bestowed wedding gifts or not, he made it clear that he 'particularly wish(ed) to provide for the support and education' of Claire, and the rest of that paragraph must be read as requiring the trustees to exercise their discretion in that light. The cases cited by petitioners in which equity refused to order any payments did not involve powers in trust but absolute gifts with precatory words of hope that the recipient would take care of someone else or pay him a certain amount. Closer to the instant case is Collister v. Fassitt, 163 N.Y. 281, 57 N.E. 490 (1900). The testator directed his wife to pay money to the testator's niece 'out of the property hereinafter given and bequeathed to her * * * as my said wife shall from time to time, in her discretion, think best so to do.' No amounts were specified, nor was any standard enunciated to govern the exercise of discretion. Yet the niece was held to have a right enforceable in equity. With the specification of an amount and the articulation of a standard in the instant case, an equitable right in Claire to compel the trustees to exercise the power as dictated by her interest and free from any adverse one of their own follows a fortiori.3 See 1 Scott, Trusts (2d ed. 1956), 25.2 at pp. 194-195. In Phillips v. Phillips, 112 N.Y. 197, 19 N.E. 411 (1889), a sum was specified, but the wife was to pay only 'if she find it always convenient to pay'; the beneficiary was held to have an enforceable right. See also Colton v. Colton, 127 U.S. 300, 8 S.Ct. 1164, 32 L.Ed. 138 (1888).
II.
10
The provision of the Internal Revenue Code of 1954, 2056(b)(5), 26 U.S.C.A. 2056(b)(5), with respect to the qualification for the marital deduction of trusts for the surviving spouse, altered the previous law in an important way. Under the earlier statute, unless a trust qualified in whole, no part of it did. The 1954 Code introduced a new concept-- a qualifying 'specific portion.' Section 93(b) of the Technical Amendments Act of 1958,72 Stat. 1606, passed after the petition here had been filed in the Tax Court but long prior to the decision, made the new dispensation applicable to estates of decedents who had died after April 1, 1948 and before August 17, 1954, when the provision of the 1954 Code took effect; we quote in the margin the 1939 Code provision as so amended.4 However, neither the counsel who represented taxpayers in the Tax Court, the Commissioner, nor the Court itself, considered the effect of the amendment, as the Commissioner now properly concedes must be done.
11
Counsel representing the taxpayers in this court contends that if we reject his argument as to the entire trust, at least 'a specific portion' qualifies for the marital deduction-- namely, so much of the corpus as could not be diverted to Claire, the latter amount equalling the present value of $5,000 multiplied by Rose's expectancy (more accurately by Rose's and Claire's joint expectancy). The Commissioner says this is not what Congress meant by 'a specific portion.' He points to the example given in all the Congressional reports, both as to the 1954 Code and the 1958 amendment, namely, that if a testator leaves his spouse the annual income from one-half of the property, and gives her a power of appointment over one-half the property, then one-half the value of the property is deductible.5 He points also to the reports on the 1954 Code which said 'The bill makes it clear * * * that a right to income plus a general power of appointment over only an undivided part of the property will qualify that part of the property for the marital deduction.' H.Rep.No.1337, 1954 U.S.Code Cong. & Adm. News, at p. 4119, S.Rep.No.1622, 1654 id. at p. 4759, and to the Senate report on the 1958 Act, S.Rep.No.1983, 1958 id. at p. 4896, which said 'Your committee, therefore, has amended the House bill to add a provision to conform the marital deduction provisions of the 1939 Code with the more realistic rules of the 1954 Code.' He urges still more vigorously the language of the Regulations, first adopted as 20.2056(b)-5(c) under the 1954 Code, T.D. 6296, 1958-2 C.B. at p. 572, and later made applicable to estates entitled to the benefit of the 1958 amendment to the 1939 Code, as Regulations 105, 81.47a(c)(3) by T.D. 6529, I.R.B. 1961-9 at p. 68, which we quote in the margin.6
12
The Commissioner does not argue that the divergence between the extent of Rose's right to income and her power to appoint prevents her interest from constituting a 'specific portion.' One of the purposes of the 1958 amendment was to remedy the situation under the 1939 Code wherein the deduction was lost altogether unless both these factors were 100%, S.Rep.No.1983, 85th Cong., 2d Sess., in 1958 U.S.Code Cong. and Adm. News, at p. 5029, and the Commissioner has recognized that 'While the rights over the income and the power must coexist as to the same interest in property, it is not necessary that the rights over the income or the power as to such interest be in the same proportion,' Regulations 105, 81.47a(c)(2), added by T.D. 6529, I.R.B. 1961-9 at p. 67, the deduction being limited to whichever is smaller as between the share over which the power to appoint corpus extends and that to which the income rights pertain. The Commissioner's argument is rather that here even the smaller portion, that over which the right to appoint corpus extends, does not qualify because it is not the 'fractional or percentile share' demanded by the Regulations, see fn. 6 supra.
13
We fail to comprehend why a life interest in a residuary trust which at testator's death amounted to $200,000 and a qualifying power to appoint $100,000 out of it, or a life interest in such a trust and a qualifying power to appoint all but $100,000 out of it, do not relate to a 'specific portion,' namely, $100,000, quite as much as if the testator had used a fraction or a percentage with respect to the power over corpus. Example (1) attached to the definitional paragraph of the Regulations says the reason why a trust where the spouse has been given a qualifying power over a specified dollar amount does not meet the statutory test is that 'there is no certainty that the value' of the entire corpus 'will be the same on the date of the surviving spouse's death as it was on the date of the decedent's death,' so that a specific dollar amount fails to meet the Regulations' stricture that the widow's share must reflect 'its proportionate share of the increment or decline in the whole of the property' in trust. This elaboration of the statutory language seems to bespeak a desire that the risk of change in value, up or down, should be shared equally by the spouse and the Government. True, when the power is to draw a specific dollar amount the spouse bears no risk of change in the value of the corpus, unless, indeed, it shrinks below the dollar figure; and when the power is over all the corpus except a named dollar amount, the spouse is saddled with a disproportionate risk. However, Congress spoke of a 'specific portion,' not of a 'fractional or percentile share,' and nowhere indicated any policy that deductibility of a 'specific portion' should be governed by the possibility that the spouse's portion will change in value relatively more or less than the clearly nonqualifying part. Neither has the Commissioner given us any reason why this should be so. A basic purpose of the marital deduction was to reduce the discrimination against taxpayers not in community property states, S.Rep.No.1013, 80th Cong., 2d Sess., in 1948-1 C.B. at pp. 305-306; see Commissioner of Internal Revenue v. Estate of Ellis, 252 F.2d 109, 112 (3 Cir.1958). The liberalization in the provision as to trusts, made in the 1954 Code and applied to earlier years by the Technical Amendments Act, was evidently designed to permit certain normal testamentary dispositions without the total forfeiture of the deduction that the 1939 Code had occasioned in some instances. That Congress gave a fractional interest as an example of a 'specific portion' does not warrant a construction that Congress did not mean to include other instances fairly within the language and the underlying policy. We disapprove Regulations 105, 81.47a(c)(3) (1954 Code-- Regs. 20.2056(b)-5(c)) insofar as it would limit a 'specific portion' to 'a fractional or percentile share.'
14
However, the taxpayers here encounter an added difficulty. Rose's qualifying power was not over the entire corpus less a sum described in dollars, but over all less a sum which can at best be estimated by actuarial calculations. It is surely arguable that in the latter case the power is not exercisable over a 'specific portion' even though in the former it is-- the joint lives of Rose and Claire might differ substantially from their actuarial expectancy. Yet the use of actuarial tables for dealing with estate tax problems has been so widespread and of such long standing7 that we cannot assume Congress would have balked at it here; the United States is in business with enough different taxpayers so that the law of averages has ample opportunity to work.
15
The case is remanded to the Tax Court to determine how much of the residuary trust qualifies for the marital deduction under the principles herein stated. The Court should consider whether the power in respect of Claire is not a qualifying power to the extent that it is exercisable during her minority, Regulations 105, 81.47a(c)(9), added by T.D. 6529, I.R.B. 1961-9 at p. 73.
1
'FIFTH: All the rest, residue and remainder of my property, whether real or personal, and wheresoever situated which I may own or to which I may be entitled at the time of my death, I give, devise and bequeath to my Trustees hereinafter named IN TRUST nevertheless, to invest, reinvest, and keep the same invested for and during the life of my beloved wife, ROSE GELB, and to collect and pay over to her during her life, in monthly installments, the net income therefrom. In the event that the net income payable to my beloved wife during any year shall amount to less than Ten Thousand ($10,000.00) Dollars, I direct my Trustees to draw upon the principal of the trust fund to the extent of such deficit, and pay such difference to my beloved wife, it being my intent that my beloved wife shall receive at least the sum of Ten Thousand ($10,000.00) Dollars per year in installments of Eight Hundred Thirty-Three and 33/100 ($833.33) Dollars per month from my estate during her life.'
'In the event that after my death, any of my daughters shall marry and my wife desires, in the sole exercise of her discretion, to make a wedding gift to such daughter, then in that event on the demand of my wife in her sole discretion, I direct that my Executors and Trustees pay to my such daughter out of said trust fund such sums as my wife may demand not exceeding Three Thousand ($3,000.00) Dollars for each daughter that may marry. It is my intention that the payment referred to in this paragraph shall be in addition to all other payments provided to be made to my wife by this Will.
'I particularly wish to provide for the support and education of my youngest daughter, CLAIRE LILA GELB. Accordingly, I direct that if, in any year or years, my individual Trustees desire funds from said trust fund to provide for the education, maintenance and upbringing of my said youngest daughter, CLAIRE LILA GELB, then upon application of my individual Trustees, in their sole discretion, my Executors and Trustees are hereby directed to pay to my beloved wife such sums as such individual Trustees shall in writing request, not exceeding the sum of Five Thousand ($5,000.00) Dollars per year and I authorize my individual Trustees to apply said sums so requested and paid for the proper support, maintenance, education and up-bringing of my said daughter, CLAIRE LILA GELB. The receipt of my individual Trustees for such sums shall constitute an acquittance therefor. The said payments referred to in this numbered paragraph shall be in addition to all other payments provided for by this Will to be made during the lifetime of my said wife.'
'Upon the death of my said wife, my Trustees are directed to pay over and distribute the then corpus of this trust, to her estate or to any persons or corporations, in such estates, interest and proportions, either outright or in trust and in such manner, without any restriction or limitation whatsoever, as my said wife shall validly appoint by her Last Will and Testament. In default of such valid appointment, the then corpus shall, upon the death of my said wife, be distributed outright or in trust as provided for in paragraph 'SIXTH' of my said Will, as though my wife had predeceased me.'
'EIGHTH: I hereby nominate, constitute and appoint my beloved wife, ROSE GELB, my beloved son, VICTOR EDWIN GELB, and MANUFACTURERS TRUST COMPANY OF THE CITY OF NEW YORK, as Executors and Trustees of and under this my Last Will and Testament.
'If my said wife, ROSE GELB, or my said son, VICTOR EDWIN GELB, shall predecease me or for any reason shall fail or refuse to qualify as Executor or Trustee or should either die after qualifying, then and in such event, I direct that my beloved daughter, RUTH GELB, now known as RUTH GILBERT, be appointed substitute Executrix and Trustee hereunder, in his or her place and stead, and this Will and all the provisions thereof shall be read and construed in the same manner and shall have the same operation and effect as if her name were originally inserted herein as Executrix and Trustee.'
2
'The court exercising jurisdiction over the property of either of the incompetent persons, specified in the last section, must preserve his property from waste or destruction; and, out of the proceeds thereof, must provide for the payment of his debts and for the safe keeping and maintenance, and the education, when required, of the incompetent person and his family.'
3
In fact, the trustees seem to have acted precisely in this way; they drew $5,000 from corpus for Claire's benefit in 1954 and in 1956-1959 inclusive
4
'812(e)(1)(F) (As amended by Sec. 93(a), Technical Amendments Act of 1958, P.L. 85-866, 72 Stat. 1606, 1668)-- Life estate with power of appointment in surviving spouse.-- In the case of an interest in property passing from the decedent, if his surviving spouse is entitled for life to all the income from the entire interest, or all the income from a specific portion thereof, payable annually or at more frequent intervals, with power in the surviving spouse to appoint the entire interest, or such specific portion (exercisable in favor of such surviving spouse, or of the estate of such surviving spouse, or in favor of either, whether or not in each case the power is exercisable in favor of others), and with no power in any other person to appoint any part of the interest, or such specific portion, to any person other than the surviving spouse--
'(i) the interest or such portion thereof so passing shall, for purposes of subparagraph (A), be considered as passing to the surviving spouse, and
'(ii) no part of the interest so passing shall, for purposes of subparagraph (B) (i), be considered as passing to any person other then the surviving spouse.
This subparagraph shall apply only if such power in the surviving spouse to appoint the entire interest, or such specific portion thereof, whether exercisable by will or during life, is exercisable by such spouse alone and in all events.'
5
H.Rep. No. 1337, 83rd Cong., 2d Sess., in 1954 U.S.Code Cong. and Adm.News, at p. 4462; S.Rep. No. 1622, 83d Cong., 2d Sess., in 1954 id. at page 5119; S.Rep. No. 1983, 85th Cong., 2d Sess., in 1958 id. at pp. 5029-5030
6
'DEFINITIONS OF 'SPECIFIC PORTION'. A partial interest in property is not treated as a specific portion of the entire interest unless the rights of the surviving spouse in income and as to the power constitute a fractional or percentile share of a property interest so that such interest or share in the surviving spouse reflects its proportionate share of the increment or decline in the whole of the property interest to which the income rights and the power relate. Thus, if the right of the spouse to income and the power extend to one-half or a specified percentage of the property, or the equivalent, the interest is considered as a specific portion. On the other hand, if the annual income of the spouse is limited to a specific sum, or if she has a power to appoint only a specific sum out of a larger fund, the interest is not a deductible interest. Even though the rights in the surviving spouse may not be expressed in terms of a definite fraction or percentage, a deduction may be allowable if it is shown that the effect of local law is to give the spouse rights which are identical to those she would have acquired if the size of the share had been expressed in terms of a definite fraction or percentage.'
7
The use of life expectancy tables was sanctioned by the Commissioner in the 1863 edition of 'Boutwell's Manual' at p. 203, in the context of a group of regulations which, according to Carlton Fox, 'appear to embody the first that were promulgaged in respect of taxes on legacies.' Since the federal succession tax enacted in 1862 was an inheritance tax, see Warren & Surrey, Federal Estate and Gift Taxation (1961 ed.), p. 2, it was necessary to value legacies individually, and for that purpose the 1863 regulations provided that remainders and life annuities should 'be estimated by Carlisle's, or other approved tables of life annuities.' As the regulations grew more elaborate, the Commissioner added examples to aid in applying the life tables 'in ascertaining the values of life and reversionary interests,' Instructions Concerning the Tax on Legacies, Distributed Shares, and Successions, pp. 24-25 (Series 7 - No. 3, 1878). The change to the estate tax concept in the Revenue Act of 1916, c. 463, 39 Stat. 756, and its immediate successor, the Revenue Act of 1918, c. 18, 40 Stat. 1057, was accompanied by contemporaneous acceptance of the use of life expectancy tables to value 'annuities, life, and remainder interests,' art. 20, Regulations 37 (1919 ed.)
Introduction of the charitable deduction to the estate tax in 403(a)(3) of the 1918 Act, 40 Stat. at 1098, led to instant acquiescence in the use of mortality tables to value charitable remainders, art. 53, Regulations 37 (1919 ed.). Perhaps their most frequent use in this area is to compute a gift to charity made subject to a life estate, see Merchants National Ban.k v. Commissioner, 320 U.S. 256, 259 fn. 6, 64 S.Ct. 108, 88 L.Ed. 35 (1943); Commissioner v. Estate of Sternberger, 348 U.S. 187, 190-192, 75 S.Ct. 229, 99 L.Ed. 246 (1955). The Supreme Court has even gone so far as to compel their use for such a computation when the life tenant had died before the case came to the Court, Ithaca Trust Co. v. United States, 279 U.S. 151, 49 S.Ct. 291, 73 L.Ed. 647 (1929). See generally 4 Mertens, Law of Federal Gift and Estate Taxation (1959), 28.30.
Other uses of mortality tables in Federal taxation are manifold. A typical application under the estate tax occurs if a vested remainderman dies before the life beneficiary, William Korn, 35 B.T.A. 1071 (1937). For purposes of the gift tax, they are used to value gifts of remainders, Henry F. du Pont, 2 T.C. 246 (1943); Betty Dumaine, 16 T.C. 1035 (1951), and of life estates and annuities, F. J. Sensenbrenner, 46 B.T.A. 713 (1942). They have long been utilized to value annuities, not only for estate and gift tax purposes, but to allocate between return of capital and incremental return for income tax purposes. See GCM 8826, C.B. IX-2, p. 194 (1930); Florence L. Klein, 6 B.T.A. 617 (1927); Guaranty Trust Co., 15 B.T.A. 20 (1929); Estate of Sarah A. Bergan, 1 T.C. 543 (1943). They are used also to derive the 'adjusted uniform basis,' the 1954 Code's way of splitting basis between life tenant and remainderman in the event, for instance, either wishes to sell his interest while both are still alive. See Regs. 1.1014-5(a)(1); 3A Mertens, Law of Federal Income Taxation (Zimet & Weiss rev. vol. 1958), 21.71, at p. 200.
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[Cite as State v. Timberling, 2013-Ohio-1377.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
GREENE COUNTY
STATE OF OHIO :
: Appellate Case No. 2012-CA-35
Plaintiff-Appellee :
: Trial Court Case No. 2011-CR-406
v. :
:
CHARLES A. TIMBERLING, JR. : (Criminal Appeal from
: (Common Pleas Court)
:
Defendant-Appellant :
:
...........
OPINION
Rendered on the 5th day of April, 2013.
...........
STEPHEN K. HALLER, Atty. Reg. No. 0009172, Prosecuting Attorney Greene County Ohio,
by NATHANIEL R. LUKEN, Atty. Reg. No. 0087864, Assistant Prosecutor, 61 Greene
Street, Xenia, Ohio 45385
Attorney for Plaintiff-Appellee
MELISSA REPLOGLE, Atty. Reg. No. 0084215, 2312 Far Hills Avenue, Suite 145, Dayton,
Ohio 45419
Attorney for Defendant-Appellant
.............
WELBAUM, J.
[Cite as State v. Timberling, 2013-Ohio-1377.]
{¶ 1} Defendant-Appellant, Charles A. Timberling, Jr., appeals from his prison
sentence following a guilty plea to four counts of violating a protection order. Timberling
argues that the trial court abused its discretion by imposing consecutive prison sentences and
also by denying Timberling’s request for a psychological report pursuant to R.C. 2947.06(B).
We conclude that the trial court did not abuse its discretion by imposing consecutive prison
sentences or by denying Timberling’s request for a psychological report.
I. Facts and Course of Proceedings
{¶ 2} This case involves multiple violations of a protection order placed on
Timberling by his ex-girlfriend, Yevonn Jacaruso. In 2011, Timberling violated the
protection order by sending four separate correspondences to Jacaruso over a period of seven
months. In January 2011, Timberling sent Jacaruso two birthday cards. In June 2011, he
sent her a greeting card. His fourth communication was a letter sent after the June 2011
greeting card. All the correspondences were innocuous and did not contain any threats of
harm. Timberling also did not try to physically contact Jacaruso.
{¶ 3} Timberling, however, has a prior criminal history related to his infatuation
with Jacaruso. In 2004, he pleaded guilty to abducting Jacaruso. He maintains that he did
not abduct her, and that he only pleaded guilty due to a plea bargain. While Timberling was
in prison for the abduction offense, Jacaruso obtained a protection order against him under
R.C. 2903.214. In 2009, after Timberling was released from prison, he attempted to
communicate with Jacaruso in violation of the protection order. He was then sent back to
prison for nine months.
{¶ 4} As a result of his four communications with Jacaruso in 2011, Timberling
3
was indicted for four counts of violating a protection order under R.C. 2919.27 and two counts
of menacing by stalking under R.C. 2903.211. The prosecution agreed to dismiss the two
counts for menacing by stalking in exchange for Timberling pleading guilty to the four
protection order violations. On February 23, 2012 Timberling pleaded guilty to the four
protection order violations. Prior to pleading guilty, Timberling requested that his mental
condition be evaluated pursuant to R.C. 2919.271(B). The court permitted the evaluation
and a psychological report was prepared. On January 30, 2012, Timberling requested a
second psychological report be prepared because the first report allegedly contained errors and
improper conclusions. The trial court decided not to permit a second report and did not
consider the first report when sentencing Timberling.
{¶ 5} Timberling’s sentencing hearing took place on April 13, 2012. Both
Jacaruso and Timberling appeared and gave statements at the hearing.
{¶ 6} Jacaruso expressed her frustration with Timberling. She stated that her
relationship with him was brief and destructive, and that she asked for a protection order to
protect herself physically and mentally. Additionally, she stated that Timberling went out of
his way to locate her, and she felt intimidated by him. She feels as though she and her loved
ones are in danger whenever he makes contact with her. She therefore requested the trial
court to set aside Timberling’s plea bargain, which dismissed the two counts of menacing by
stalking, and to issue the maximum allowable sentence.
{¶ 7} Timberling apologized for all of his actions and explained that they were a
result of his feelings for Jacaruso. He advised the court multiple times that he had no
intention of hurting Jacaruso, and that he had no idea how much she feared him. He also
4
promised to never contact her again.
{¶ 8} After hearing Timberling’s and Jacaruso’s statements, the trial court
sentenced Timberling to one year in prison for each of the first three counts and six months for
the fourth count. His total prison sentence is 42 months, and the trial court ordered the
sentences to run consecutively.
{¶ 9} On December 28, 2012, Timberling appealed the trial court’s imposition of
consecutive sentences and its decision denying his request for a second psychological
evaluation.
II. The Trial Court Did Not Abuse Its Discretion By Sentencing Charles A. Timberling,
Jr. to Consecutive Prison Terms
{¶ 10} Timberling’s First Assignment of Error states that:
The trial court abused its discretion when it sentenced Appellant to
consecutive sentences.
{¶ 11} Under this assignment of error, Timberling argues that he did not cause or
attempt to cause any harm to Jacaruso, and that he took full responsibility for his actions.
Accordingly, Timberling claims the trial court abused its discretion when it sentenced him to
consecutive prison terms.
{¶ 12} A two-step approach is used in Ohio to review felony sentences. “[A]n
appellate court must first determine whether the sentencing court complied with all applicable
rules and statutes in imposing the sentence, including R.C. 2929.11 and 2929.12, in order to
decide whether the sentence is contrary to law.” State v. Clark, 2d Dist. Champaign No.
2011-CA-32, 2013-Ohio-300, ¶ 13, citing State v. Kalish, 120 Ohio St.3d 23,
5
2008-Ohio-4912, 896 N.E.2d 124, ¶ 26. “If the sentence is not clearly and convincingly
contrary to law, the trial court’s decision in imposing the term of imprisonment must be
reviewed under an abuse-of-discretion standard.” Id.
A. The Trial Court’s Imposition of Consecutive Prison Sentences Was Not Clearly and
Convincingly Contrary to Law
{¶ 13} “The trial court has full discretion to impose any sentence within the
authorized statutory range, and the court is not required to make any findings or give its
reasons for imposing maximum or more than minimum sentences.” (Citation omitted.) State
v. Blessing, 2d Dist. Clark No. 2011 CA 56, 2013-Ohio-392, ¶ 27. “[T]he trial court must
comply with all applicable rules and statutes, including R.C. 2929.11 and R.C. 2929.12.”
(Citation omitted.) Id.
{¶ 14} Pursuant to R.C. 2929.11(A):
A court that sentences an offender for a felony shall be guided by the
overriding purposes of felony sentencing. The overriding purposes of felony
sentencing are to protect the public from future crime by the offender and
others and to punish the offender using the minimum sanctions that the court
determines accomplish those purposes without imposing an unnecessary
burden on state or local government resources. To achieve those purposes, the
sentencing court shall consider the need for incapacitating the offender,
deterring the offender and others from future crime, rehabilitating the offender,
and making restitution to the victim of the offense, the public, or both.
{¶ 15} Under R.C. 2929.12(A), the sentencing trial court “has discretion to
6
determine the most effective way to comply with the purposes and principles of sentencing set
forth in section 2929.11 of the Revised Code.”
{¶ 16} With regard to consecutive prison sentences, R.C. 2929.14(C)(4) states that:
If multiple prison terms are imposed on an offender for convictions of
multiple offenses, the court may require the offender to serve the prison terms
consecutively if the court finds that the consecutive service is necessary to
protect the public from future crime or to punish the offender and that
consecutive sentences are not disproportionate to the seriousness of the
offender's conduct and to the danger the offender poses to the public, and if the
court also finds any of the following:
***
The offender's history of criminal conduct demonstrates that
consecutive sentences are necessary to protect the public from future crime by
the offender.
{¶ 17} In this case, the record shows that prior to sentencing Timberling, the trial
court considered his criminal history, his history with Jacaruso, and his recidivism. Based on
these considerations, the trial court determined that consecutive prison sentences were
necessary to protect the public and to punish Timberling. We find that the trial court’s
purpose and reasoning for imposing consecutive sentences comply with R.C. 2929.11(A),
2929.12(A) and 2929.14(C)(4). The prison sentence also falls within the permissible
statutory range for fifth degree felonies as set forth in R.C. 2929.14(A)(5). The prison
sentence therefore complies with all applicable rules and statutes.
[Cite as State v. Timberling, 2013-Ohio-1377.]
{¶ 18} For the foregoing reasons, we find that the trial court’s decision was not
clearly and convincingly contrary to law.
B. The Trial Court’s Decision to Impose Consecutive Prison Sentences Was Not an Abuse of
Discretion
{¶ 19} “A trial court has broad discretion in sentencing a defendant and a reviewing
court will not interfere with the sentence unless the trial court abused its discretion.” (Citations
omitted.) State v. Bray, 2d Dist. Clark No. 2010CA14, 2011-Ohio-4660, ¶ 28.
“Abuse of discretion” has been defined as an attitude that is
unreasonable, arbitrary or unconscionable. (Citation omitted.) It is to be
expected that most instances of abuse of discretion will result in decisions that
are simply unreasonable, rather than decisions that are unconscionable or
arbitrary.
A decision is unreasonable if there is no sound reasoning process that
would support that decision. It is not enough that the reviewing court, were it
deciding the issue de novo, would not have found that reasoning process to be
persuasive, perhaps in view of countervailing reasoning processes that would
support a contrary result. AAAA Enterprises, Inc. v. River Place Community
Urban Redevelopment Corp., 50 Ohio St.3d 157, 161, 553 N.E.2d 597 (1990).
{¶ 20} In this case, the trial court’s decision to impose consecutive prison sentences
was not unreasonable, arbitrary, or unconscionable. Timberling has engaged in the same
pattern of conduct multiple times over the past ten years, and he has continued to cause
Jacaruso to fear for her safety. At the sentencing hearing, the trial court expressed its concern
8
regarding Timberling’s criminal history and explained why it decided to impose consecutive
sentences. The trial court stated that:
[T]his is the third time you have appeared before me for essentially the
same type of conduct, the same victim and, in the past, the same outcomes.
The first time you were in front of this Court you received an 18-month prison
sentence. The second time you were in front of this Court you received a
nine-month prison sentence, and now you’re before this Court a third time for
essentially the same conduct, certainly the same offense for which you were
sent to prison the previous time.
***
The Court finds that these sentences should be served consecutively
pursuant to R.C. 2929.14(C)(4) because the Court finds that consecutive
sentences are necessary to protect the public from future crime from you, to
punish you, and that they are not disproportionate to the seriousness of your
conduct and the danger that you pose to the public, including Ms. Jacaruso.
The Court also finds that your history of criminal conduct demonstrates
that consecutive sentences are necessary to protect the public from future crime
by the offender.
As such, the Court will order that all four counts be served
consecutively for a total effective sentence of 36 months [calculation later
corrected on the record to 42 months]. Transcript of Sentencing, p. 26 and
29-31.
9
{¶ 21} The record demonstrates that the trial court decided to impose consecutive
sentences due to Timberling’s criminal history and recidivism. The trial court reasoned that
this was necessary to protect the public and to punish Timberling. We find that the trial
court’s reasoning is sound, and that its decision is not unreasonable, arbitrary or
unconscionable.
{¶ 22} For the foregoing reasons, the trial court’s imposition of consecutive prison
sentences was not an abuse of discretion.
{¶ 23} The First Assignment of Error is overruled.
III. The Trial Court’s Decision to Deny a Second Psychological Report Was Not an
Abuse of Discretion
{¶ 24} Timberling’s Second Assignment of Error states that:
The trial court’s denial of a psychological report under R.C.
2947.06(B) was an abuse of discretion.
{¶ 25} Under this assignment of error, Timberling argues that a second psychological
report, which a court may require when sentencing under R.C. 2947.06(B), would have helped
the trial court understand his thought process and his reasons for violating the protection
order. Timberling argues that a psychological report was crucial in determining an
appropriate prison sentence, and it was therefore an abuse of discretion for the trial court to
deny his request to have a second report prepared and considered. We disagree.
{¶ 26} Pursuant to R.C. 2947.06(B), “[t]he court may appoint not more than two
psychologists or psychiatrists to make any reports concerning the defendant that the court
requires for the purpose of determining the disposition of the case.” R.C. 2947.06(B) is not a
10
mandatory statute because “[i]t employs the word ‘may,’ which is ‘generally construed to
render optional, permissive, or discretionary the provision in which it is embodied * * *.’ ”
State v. Taylor, 114 Ohio App.3d 416, 423, 683 N.E.2d 367 (2d Dist. 1996), quoting State ex
rel. City of Niles v. Bernard, 53 Ohio St.2d 31, 34, 372 N.E.2d 339 (1978). Because the trial
court’s decision to implement a psychological report is discretionary, the decision is reviewed
under an abuse of discretion standard. As previously discussed, the trial court’s decision
must be “unreasonable, arbitrary or unconscionable” to be considered an abuse of discretion.
AAAA Enterprises, Inc., 50 Ohio St.3d at 161, 553 N.E.2d 597.
{¶ 27} In this case, the trial court’s decision to deny Timberling’s request for a
second psychological report was not unreasonable, arbitrary or unconscionable. The first
psychological report, which was allegedly erroneous, was not considered by the trial court, and
a second one was deemed unnecessary. Denying the request for a second report was not
unreasonable because there is nothing in the record indicating that Timberling suffered from
mental health issues that may have affected his behavior. There is also nothing in the record
indicating that Timberling was receiving any mental health treatment. At the sentencing
hearing, Timberling explained to the court his feelings for Jacaruso and why he contacted her.
His explanation adequately informed the trial court of his reasons for violating the protection
order, and it did not require clarification by a psychologist.
{¶ 28} For the foregoing reasons, we find that a psychological report was not crucial
to determining an appropriate sentence, and it was not unreasonable, arbitrary or
unconscionable for the trial court to deny Timberling’s request to have a second one prepared.
Accordingly, the trial court did not abuse its discretion by denying Timberling’s request for a
11
psychological report under R.C. 2947.06(B).
{¶ 29} The Second Assignment of Error is overruled.
IV. Conclusion
{¶ 30} Having overruled both of Charles A. Timberling, Jr.’s assignments of error,
we hereby affirm the judgment of the trial court.
.............
FAIN, P.J. and DONOVAN, J., concur.
Copies mailed to:
Nathaniel R. Luken
Melissa Replogle
Hon. Stephen Wolaver
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 02-30224
Conference Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ELVIN PIGOTT,
Defendant-Appellant.
--------------------
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 01-CR-84-1-T
--------------------
October 30, 2002
Before DeMOSS, BENAVIDES, and STEWART, Circuit Judges.
PER CURIAM:*
Elvin Pigott appeals his guilty-plea conviction and sentence
for conspiracy to distribute 50 grams or more of cocaine base and
distribution of 50 grams or more of cocaine base in violation of
21 U.S.C. §§ 841(a)(1) and 846. Pigott argues that his guilty
plea lacked a factual basis because his indictment charged him
with offenses involving 50 grams or more of cocaine base but a
lab report determined that the substance had a net weight of 67
*
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. 02-30224
-2-
grams and contained only 27.5 grams of pure drug. We have
already held that for purposes of cocaine base the relevant
consideration is the total weight of the mixture or substance,
not the weight of the pure drug alone. See United States v.
Cartwright, 6 F.3d 294, 303 (5th Cir. 1993); see also Chapman v.
United States, 500 U.S. 453, 461 (1991). Therefore, Pigott's
argument fails.
Pigott also argues that his sentence should be limited to
the 27.5 grams of pure drug because a recent Sentencing
Commission report calls into question the constitutionality of
the disparity in penalties for offenses involving cocaine base
and cocaine powder. Pigott has filed a motion to supplement the
record with the executive summary of the Sentencing Commission's
report. We have previously rejected equal protection, Eighth
Amendment, and due process challenges to the disparate sentencing
provisions, however. See United States v. Wilson, 105 F.3d 219,
222 (5th Cir. 1997). Absent an overriding Supreme Court
decision, a change in statutory law, or an en banc decision of
this court, we are bound by our prior precedent. See United
States v. Zuniga-Salinas, 952 F.2d 876, 877 (5th Cir. 1992)(en
banc).
The district court's judgment is AFFIRMED. The motion to
supplement the record is DENIED.
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
SEPTEMBER 22, 2005
No. 05-11316 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 04-00200-CR-WS
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
THOMAS JOSEPH HEBERT,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Alabama
_________________________
(September 22, 2005)
Before BIRCH, BARKETT and WILSON, Circuit Judges.
PER CURIAM:
Thomas Joseph Hebert appeals his 12-month sentence imposed after he pled
guilty to wire fraud, in violation of 18 U.S.C. § 1343. On appeal, Hebert argues
that the district court erred in applying a vulnerable victim enhancement to his
sentence pursuant to U.S. Sentencing Guidelines Manual § 3A1.1(b)(1) (2004).
Hebert, impersonating a prison guard, called the victim, whose son was
incarcerated, and informed her that her son was in trouble. He warned that if she
did not send him money, her son was in danger of further criminal charges or
assault by prisoners or guards. Hebert made several more calls to the victim,
requesting that she send money.
The district court determined that Hebert selected a vulnerable victim and
assessed a two level-enhancement pursuant to U.S. Sentencing Guidelines Manual
§ 3A1.1(b)(1). The district court noted that Hebert had preyed on a “special
relationship” that he knew existed between Smith and her son, based on Hebert’s
prior contact with her. Hebert’s conduct exacerbated the stressful situation created
by the imprisonment of Smith’s son, especially since Hebert relied on veiled
threats against him and promises of early release. Hebert contends that the mere
fact that the victim’s son was imprisoned did not increase her susceptibility to
fraud. Further, Hebert argues that the issue of whether he selected the victim due
to a perceived vulnerability is controlling, and because parents of prison inmates as
a class are not unusually vulnerable to fraud schemes, the district court should not
2
have enhanced his sentence on the “vulnerable victim” basis.
“The district court’s application of section 3A1.1 presents a mixed question
of law and fact, which we review de novo. The district court’s determination of a
victim’s ‘vulnerability’ is, however, essentially a factual finding to which we give
due deference.” United States v. Arguedas, 86 F.3d 1054, 1057 (11th Cir. 1996)
(internal citations omitted).
U.S. Sentencing Guidelines Manual § 3A1.1(b)(1) allows a sentencing court
to increase a defendant’s base offense level by two levels “[i]f the defendant knew
or should have known that a victim of the offense was a vulnerable victim.” A
“vulnerable victim” is “a person (A) who is a victim of the offense of conviction . .
. and (B) who is unusually vulnerable due to age, physical or mental condition, or
who is otherwise particularly susceptible to the criminal conduct.” U.S.S.G. §
3A1.1, cmt. n.1 (2004). The adjustment applies only if “the defendant selects his
victim due to the defendant’s perception of the victim’s vulnerability to the
offense.” Arguedas, 86 F.3d at 1058.
“In construing the ‘otherwise particularly susceptible’ language in section
3A1.1, we have held that circumstances, as well as immutable characteristics, can
render a victim of criminal activity unusually vulnerable.” United States v. Davis,
967 F.2d 516, 523 (11th Cir. 1992). Although we have never addressed this
3
particular situation, we have upheld vulnerable victim enhancements where: (1) the
defendant extorted money from the father of a missing child, promising to reveal
the location of the child, United States v. Villali, 926 F.2d 999, 1000 (11th Cir.
1991) (per curiam); (2) the defendant, a bank officer, embezzled money from the
trust accounts of elderly persons, United States v. Yount, 960 F.2d 955, 957-58
(11th Cir. 1992); (3) the defendant in a loan fraud scheme targeted consumers with
bad credit, United States v. Page, 69 F.3d 482, 490-91 (11th Cir. 1995); (4) the
defendant, a former local police chief, robbed a rural bank when he knew that
police would not be in the area, United States v. Phillips, 287 F.3d 1053, 1056-58
(11th Cir. 2002); (5) the defendant provided narcotics to minor victim, whom the
defendant knew suffered from a drug addiction, United States v. Amedeo, 370 F.3d
1305, 1318-19 (11th Cir. 2004); (6) the defendant, based upon a personal
relationship with victim, knew of victim’s troubled financial situation, Arguedas,
86 F.3d at 1057-58; and (7) the defendant in a car jacking case knew that the
victim, a cab driver, had a duty to respond to all dispatches and would have to pick
him up, United States v. Frank, 247 F.3d 1257, 1259-60 (11th Cir. 2001).
The circumstances in the present case are not significantly different from
these prior instances involving the exploitation of a vulnerable victim. Here,
Hebert exploited, for personal gain, a parent’s concern for a child that was in
4
danger. He relied on personal knowledge of the victim, acquired through an
existing relationship with her, in targeting her and committing the crime. Based on
our prior precedent, we find that the district court did not err in applying the
vulnerable victim enhancement to Hebert’s sentence. Accordingly, we affirm his
sentence.
AFFIRMED.
5
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FILED
Mar 10 2017, 9:14 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Lori B. Schmeltzer Kristina J. Jacobucci
Schmeltzer Law PLLC Newby, Lewis, Kaminski & Jones,
Traverse City, Michigan LLP
La Porte, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Imre L. Falatovics, March 10, 2017
Appellant-Respondent, Court of Appeals Case No.
46A04-1605-DR-1161
v. Appeal from the La Porte Superior
Court
Amy L. Falatovics, The Honorable Michael S.
Appellee-Petitioner Bergerson, Judge
Trial Court Cause No.
46D01-1302-DR-59
Crone, Judge.
Case Summary
[1] For the third time, this matter comes before us for review. Imre L. Falatovics
(“Husband”) and Amy L. Falatovics (“Wife”) were divorced. Following the
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 1 of 17
issuance of the dissolution decree, Wife filed an appeal and Husband filed an
Indiana Trial Rule 60(B) motion (“Trial Rule 60(B) Motion”) to set aside the
dissolution decree. After this Court reversed a portion of the dissolution decree
and remanded, another appeal ensued. Once this Court’s opinion was certified,
Wife moved to dismiss Husband’s Trial Rule 60(B) Motion and his addendum
to his Trial Rule 60(B) Motion (“Addendum”) (sometimes collectively referred
to as “Trial Rule 60(B) Motions”). The trial court granted Wife’s motion and
dismissed Husband’s Trial Rule 60(B) Motions.
[2] Husband now appeals the dismissal of his Trial Rule 60(B) Motions. He argues
that the trial court erred in finding that he failed to follow the proper procedure
for bringing his Trial Rule 60(B) Motions. He also asserts that Wife is barred
by the doctrines of laches and/or invited error from arguing that he failed to
follow the proper procedure. Finally, he also contends that his constitutional
rights were violated because he did not receive an evidentiary hearing on his
motions. Wife contends that Husband’s appeal is frivolous and in bad faith and
requests that we award her appellate attorney fees.
[3] We conclude that trial court did not err in finding that Husband failed to follow
the proper procedure. We further conclude that neither laches nor invited error
applies and that Husband was not deprived of his constitutional rights. We
affirm the judgment and deny Wife’s request for attorney’s fees.
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 2 of 17
Facts and Procedural History
[4] On December 19, 2013, the trial court issued the dissolution decree, dissolving
the parties’ marriage and dividing the marital estate. On January 13, 2014,
Wife appealed. On January 29, 2014, the Court of Appeals acquired
jurisdiction when the notice of completion of clerk’s record was entered in the
chronological case summary (“CCS”). Ind. Appellate Rule 8.
[5] While the appeal was still pending, on May 7, 2014, Husband filed in the trial
court his verified Trial Rule 60(B) Motion to set aside the dissolution decree,
asserting that “Wife committed fraud to the court by not disclosing assets,
vehicle(s) and bank accounts” owned during the divorce proceedings.
Appellant’s App. at 26. The trial court set the matter for hearing on August 26,
2014. On August 5, 2014, Wife filed a motion to continue the hearing, stating
that her appeal was pending, and therefore the trial court had no jurisdiction to
hear Husband’s Trial Rule 60(B) Motion “until after a decision on the Appeal
has been rendered.” Id. at 28. The trial court granted Wife’s motion.
[6] On August 14, 2014, this Court issued its opinion on Wife’s appeal. Falatovics
v. Falatovics, 15 N.E.3d 108 (Ind. Ct. App. 2014) (“Falatovics 1”). In her appeal,
Wife argued that the trial court erred in excluding from the marital estate
Husband’s interest in two parcels of real estate (“Parcels 1 and 2”) that he held
with his brother as joint tenants subject to a life estate in his mother. Husband
did not file a brief, and therefore we reviewed the trial court’s judgment for
prima facie error. We concluded that Husband held a present pecuniary
interest in Parcels 1 and 2, and therefore the trial court improperly excluded his
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 3 of 17
interest in them from the marital estate. In addition, we observed that the
parties had agreed on the value of Husband’s interest in Parcels 1 and 2, and
therefore, we reversed and remanded with instructions to the trial court to
include Husband’s interest in Parcels 1 and 2 in the marital estate and divide
the marital estate based on the new valuation in a manner it deemed fair. Id. at
111-12. Neither Husband nor Wife sought rehearing or transfer of our opinion,
and it was certified as final on September 26, 2014.
[7] On October 29, 2014, the trial court held a status conference and addressed the
remanded issues. On November 14, 2014, Husband filed his Addendum,
claiming that the appraisals for Parcels 1 and 2 submitted by Wife “during the
final hearing” were mistaken in fact and valuation. Appellant’s App. at 36. On
November 25, 2014, the trial court issued its amended dissolution decree,
wherein it included Husband’s interest in Parcels 1 and 2 in the marital estate,
revised the value of the estate accordingly, and equally divided the marital
estate based upon this revised valuation. On December 9, 2014, the trial court
scheduled a hearing for all pending issues on March 2, 2015.
[8] On December 23, 2014, Husband appealed the amended dissolution decree.
On January 23, 2015, the notice of completion of clerk’s record was entered in
the CCS.
[9] On February 17, 2015, Wife filed in the trial court a motion for continuance of
the hearing on Husband’s pending Trial Rule 60(B) Motions, declaring that his
appeal was pending before the Court of Appeals, and therefore the trial court
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 4 of 17
had no jurisdiction to hear the motions until after the appeal was rendered. Id.
at 42. The same day, Husband filed an objection to continuance, claiming that
the appeal briefing schedule was stayed and that “his pleadings before [the trial]
Court must be heard prior to the appeal and it’s [sic] briefing schedule.” Id. at
43. On February 23, 2015, Wife filed a response to Husband’s objection,
asserting that the CCS did not show that the briefing schedule for the appeal
had been stayed. The same day, the trial court granted Wife’s motion for
continuance.
[10] On March 12, 2015, Husband filed in the Court of Appeals a motion to stay
appeal and remand jurisdiction to the trial court to consider his Trial Rule 60(B)
Motions. Husband attached his Trial Rule 60(B) Motion and Addendum and
averred that a ruling on these motions “may resolve some or all of the issues
raised on appeal.” Appellee’s App. at 10. On March 30, 2015, Wife filed her
objection to Husband’s motion to stay appeal, asserting that Husband waived
all issues raised in his Trial Rule 60(B) Motions by failing to seek leave of the
Court of Appeals to file his motions. Id. at 18. On April 10, 2015, this Court
denied Husband’s motion to stay appeal. It did not provide the basis for its
denial.
[11] On November 5, 2015, this Court handed down its memorandum decision on
Husband’s appeal of the amended dissolution decree. Falatovics v. Falatovics,
No. 46A03-1412-DR-449, 2015 WL 6777221 (Ind. Ct. App. Nov. 5, 2015),
trans. denied (2016) (“Falatovics 2”). In this appeal, Husband challenged the
equal division of the marital estate. We concluded that the trial court did not
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 5 of 17
abuse its discretion in equally dividing the martial estate. Id. at * 3. We also
rejected Husband’s attempt to relitigate issues regarding his interest in Parcels 1
and 2 and their valuation. Id. at * 2. Accordingly, we affirmed the amended
dissolution decree. Husband petitioned for transfer, which was denied on
February 11, 2016.
[12] On February 15, 2016, the matter was certified back to the trial court. On
March 14, 2016, Wife filed a motion to dismiss Husband’s Trial Rule 60(B)
Motions. Husband filed a response. In April 2016, following a hearing, the
trial court granted Wife’s motion to dismiss, finding that Husband failed to
follow the appropriate procedure for bringing his Trial Rule 60(B) Motions, and
that therefore he had waived his arguments and was not entitled to an
evidentiary hearing. This appeal ensued.
Discussion and Decision
Section 1 – The trial court did not err in granting Wife’s
motion to dismiss.
[13] Husband challenges the dismissal of his Trial Rule 60(B) Motions. His first
Trial Rule 60(B) Motion alleged that Wife committed fraud in failing to disclose
assets, and his Addendum alleged that Wife’s appraisals of Parcels 1 and 2 were
based on mistakes of fact and valuation. Trial Rule 60(B) provides, “On
motion and upon such terms as are just the court may relieve a party … from a
judgment, including a judgment by default, for the following reasons: (1)
mistake, … and (3) fraud (whether heretofore denominated intrinsic or
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 6 of 17
extrinsic), misrepresentation, or other misconduct of an adverse party[.]” Trial
Rule 60(D) states, “In passing upon a motion allowed by subdivision (B) of this
rule the court shall hear any pertinent evidence.”
[14] As an initial matter, we must resolve the parties’ dispute as to the proper
standard of review. Husband claims that this is an appeal of the trial court’s
decision on a motion to dismiss pursuant to Trial Rule 12(B), which we review
de novo. Wife contends that the trial court’s dismissal of Husband’s Trial Rule
60(B) Motions is effectively a denial, which we review for an abuse of
discretion.
[15] We conclude that the trial court’s dismissal of Husband’s Trial Rule 60(B)
Motions is effectively a denial. See Jahangirizadeh v. Pazouki, 27 N.E.3d 1178,
1181 (Ind. Ct. App. 2015) (equating dismissal of Trial Rule 60(B) motion with
denial). In general, we review a trial court’s denial of a motion to set aside
judgment for an abuse of discretion. Id. However, in this case the issue
presented involves purely a question of law, which we review de novo. See
Goodson v. Carlson, 888 N.E.2d 217, 220 (Ind. Ct. App. 2008) (observing that
when appeal of trial court’s denial of motion to set aside judgment involves
question of law, our review is de novo).
[16] Husband first asserts that the trial court erred in finding that he failed to follow
the appropriate procedure for bringing his Trial Rule 60(B) Motions and
therefore waived his claims and is not entitled to an evidentiary hearing.
Husband filed his Trial Rule 60(B) Motion after Wife appealed the dissolution
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 7 of 17
decree. On January 29, 2014, the Court of Appeals obtained jurisdiction when
the notice of completion of the clerk’s record was entered in the CCS. Husband
filed his Trial Rule 60(B) Motion on May 7, 2014. Thus, when Husband filed
his Trial Rule 60(B) Motion, the trial court did not have jurisdiction over the
case.
[17] In Logal v. Cruse, 267 Ind. 83, 368 N.E.2d 235 (1977), cert. denied (1978), our
supreme court set forth the proper procedure to follow when a party wishes to
pursue a Trial Rule 60(B) motion while an appeal is pending. There, the trial
court dismissed Logal’s lawsuit because he failed to comply with a discovery
order. Logal appealed the dismissal. During the pendency of the appeal, Logal
filed in the trial court a motion to set aside the dismissal and reinstatement of
the lawsuit. The trial court “overruled” Logal’s motion, and he appealed that
ruling. Id. at 83, 368 N.E.2d at 236. Our supreme court consolidated Logal’s
appeals and adopted the following procedure for bringing a motion to set aside
while a judgment is on appeal (“the Logal Procedure”):
(1) The moving party files with the appellate court an application
for leave to file his 60(B) motion. This application should be
verified and should set forth the grounds relied upon in a specific
and non-conclusory manner.
(2) The appellate court will make a preliminary determination of
the merits of the movant’s 60(B) grounds. In so doing the
appellate court will determine whether, accepting appellant’s
specific, non-conclusory factual allegations as true there is a
substantial likelihood that the trial court would grant the relief
sought. Inasmuch as an appellate court is not an appropriate
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 8 of 17
tribunal for the resolution of factual issues, the opposing party
will not be allowed to dispute the movant’s factual allegations in
the appellate court.
(3) If the appellate court determines that the motion has sufficient
merit, as described in the preceding paragraph, it will remand the
entire case to the trial court for plenary consideration of the 60(B)
grounds. Such remand order will terminate the appeal and the
costs in the appellate court will be ordered taxed against the party
procuring the remand. The decision to remand does not require
the trial court to grant the motion. If the trial court denies the
motion, the movant should file a motion to correct errors
addressed to this denial, and appeal the denial. In this new
appeal any of the issues raised in the original appeal may be
incorporated, without being included in the second motion to
correct errors.
(4) If the trial court grants the motion, the opposing party may
appeal that ruling under the same terms as described in
paragraph (3). The original appeal shall be deemed moot.
Id. at 86-87, 368 N.E.2d at 237 (citations omitted). The Logal court explained
that “this procedure will allow full and fair consideration of grounds for relief
from judgment with a minimum of disruption of the appellate process.” Id. at
87, 368 N.E.2d at 237.
[18] The Logal court then considered the issues raised in the two consolidated
appeals. “For purposes of illustration and in the interests of fairness,” the Logal
court considered Logal’s motion to set aside the dismissal as though he had
followed the procedure set forth above. Id., 368 N.E.2d at 237. The court
concluded that there was not a substantial likelihood that Logal would succeed
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 9 of 17
in his claim that he did not have notice of the trial court’s discovery order. Id.,
368 N.E.2d at 238. In addition, the court reviewed whether the trial court
abused its discretion in dismissing the lawsuit and concluded that it had not. Id.
at 88, 368 N.E.2d at 238. Accordingly, the Logal court affirmed the trial court’s
dismissal of the action and the denial of Logal’s motion to set it aside. Id., 368
N.E.2d at 238.
[19] The Logal Procedure was enforced in Southwood v. Carlson, 704 N.E.2d 163 (Ind.
Ct. App. 1999). There, Southwood brought a medical malpractice action
against various medical care providers. The trial court granted the medical care
providers’ summary judgment motion, and Southwood appealed. Before the
trial clerk submitted the record of proceedings to the Court of Appeals,
Southwood filed a motion for relief from judgment pursuant to Trial Rule 60(B)
with the trial court. After the Court of Appeals obtained jurisdiction over the
case, the trial court granted Southwood’s motion for relief from judgment and
set aside its grant of summary judgment in favor of the medical care providers.
The medical care providers appealed the grant of Southwood’s motion for relief
from judgment.
[20] The medical care providers’ appeal and Southwood’s appeal of the summary
judgment ruling in favor of the medical care providers were consolidated. The
Southwood court began by addressing the medical care providers’ argument that
the trial court was without jurisdiction to grant Southwood’s motion for relief
from judgment. The court rejected Southwood’s contention that because the
Court of Appeals had not yet acquired jurisdiction over the case at the time he
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 10 of 17
filed his motion, the Logal Procedure was inapplicable. Id. at 165. The court
concluded that Southwood was obligated to follow the Logal Procedure when
the Court of Appeals acquired jurisdiction, and he had not. Id. Therefore, the
court concluded that the trial court was without jurisdiction to rule upon
Southwood’s motion for relief from judgment and vacated the trial court’s ruling
granting his motion. Id. at 166.
[21] The Southwood court then considered the trial court’s summary judgment ruling
in favor of the medical care providers. Southwood argued that there was a
genuine issue of material fact precluding summary judgment and that the trial
court erred by refusing to consider his designated affidavits. The Southwood
court concluded that Southwood’s designation of evidence was untimely, and
therefore the trial court correctly entered summary judgment in favor of the
health care providers. Id. at 169.
[22] Here, Husband concedes that he did not follow the Logal Procedure, but he
contends that Logal and Southwood are distinguishable, and therefore the Logal
Procedure is inapplicable. First, he asserts that in Logal and Southwood, the
party seeking to have the trial court’s judgment set aside was also the appellant
and the issue raised in the motion to set aside and the appeal was the same.
Thus, according to Husband, the movant/appellant in those cases was seeking
to have two bites of the same apple. Husband points out that he filed the Trial
Rule 60(B) Motion, but Wife brought the first appeal, and he claims that the
issue he raised in his Trial Rule 60(B) Motion was different from the issue
raised in Wife’s appeal.
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 11 of 17
[23] We reject the contention that the identity of the movant and the appellant is
relevant to the rationale underlying the Logal Procedure; namely, to permit fair
consideration of the motion without unduly disrupting the appeals process.
The trial court loses jurisdiction over the case once the Court of Appeals obtains
jurisdiction regardless of who initiated the appeal. We also reject Husband’s
assertion that the issues must be the same. As long as the same judgment is the
subject of the appeal and the motion for relief from judgment, the issues raised
could result in the judgment or a portion of it being reversed or set aside. If a
judgment is on appeal, and there are grounds to set aside that same judgment, it
is a waste of the parties’ and the court’s resources to follow through with the
appeals process only to have that same judgment set aside albeit for a different
reason. The motion to set aside should be heard before the appeal proceeds so
that all issues can be appealed at once. In fact, the circumstances of this case
are a perfect illustration of this concept.
[24] Here, Husband claims that the potential for competing results is not present
because the issues presented to this Court and the trial court were different. We
disagree. Wife’s appeal addressed the exclusion of Husband’s interest in
Parcels 1 and 2 from the marital estate, and Husband’s Trial Rule 60(B) Motion
addressed the exclusion of Wife’s assets as a result of her failure to disclose
assets. Wife’s appeal and Husband’s Trial Rule 60(B) Motion both directly
affected the same judgment. Each raised issues pertaining to the
exclusion/inclusion of marital assets, which affects the ultimate determination
of the value of the marital estate and the equitable distribution thereof. Thus,
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 12 of 17
the failure to follow the Logal Procedure would result in piecemeal decisions
regarding the same judgment and multiple appeals as to the fair distribution of
the marital estate. Furthermore, Husband’s Addendum and the first appeal
both addressed Husband’s interest in Parcels 1 and 2, and inclusion of
Husband’s interest in that property was the reason for the issuance of the
amended dissolution decree. Husband recognized in his motion to stay appeal
that a ruling on his Trial Rule 60(B) Motions “may resolve some or all of the
issues raised on appeal.” Appellee’s App. at 10.
[25] Another distinction Husband attempts to make is that the movant/appellant in
both Logal and Southwood had the issues in their motions to set aside heard on
the merits, whereas he has not. However, Logal did not have his motion to set
aside heard on the merits. The Logal court considered only whether there was a
substantial likelihood that the trial court would grant the relief Logal sought in
his motion to set aside in accordance with the procedure it had outlined. Thus,
the Logal court did not hear evidence in support of Logal’s motion to set aside
and the opposing party was not permitted to dispute the movant’s factual
allegations. Logal, 267 Ind. at 86-87, 368 N.E.2d at 237-38.
[26] Husband’s comparison to Southwood is also unavailing. In Southwood, although
the trial court conducted an evidentiary hearing on Southwood’s motion for
relief from judgment and issued a ruling, the appellate court vacated that ruling
because the trial court did not have jurisdiction over the case. 704 N.E.2d at
166. We fail to see the benefit of having a hearing on a motion when the ruling
on the motion is vacated. Finally, we note that although Trial Rule 60(D)
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 13 of 17
generally requires trial courts to hold a hearing on any pertinent evidence before
granting Trial Rule 60(B) relief, a party is not always entitled to an evidentiary
hearing. See Thompson v. Thompson, 811 N.E.2d 888, 904 (Ind. Ct. App. 2004)
(concluding that appellant was not entitled to evidentiary hearing on his Rule
60(B)(1) motion based on excusable neglect where he alleged that his attorney
was negligent but attorney negligence will not support a finding of excusable
neglect as a matter of law), trans. denied (2005). Accordingly, we are
unpersuaded that the distinctions between this case and Logal and Southwood
render the Logal Procedure inapplicable.
[27] Next, Husband claims that Wife’s motion to dismiss is barred by the doctrines
of laches and/or invited error. “Laches is an equitable defense that may be
raised to stop a person from asserting a claim that he would normally be
entitled to assert.” Ind. Real Estate Comm’n v. Ackman, 766 N.E.2d 1269, 1273
(Ind. Ct. App. 2002). “Laches requires: ‘(1) inexcusable delay in asserting a
known right; (2) an implied waiver arising from knowing acquiescence in
existing conditions; and (3) a change in circumstances causing prejudice to the
adverse party.’” SMDfund, Inc. v. Fort Wayne-Allen Cty. Airport Auth., 831
N.E.2d 725, 729 (Ind. 2005) (quoting Shafer v. Lambie, 667 N.E.2d 226, 231
(Ind. Ct. App. 1996)). Husband argues that he filed his Trial Rule 60(B)
Motion on May 7, 2014, but Wife did not file her motion to dismiss until
almost two years later on March 14, 2016, which constitutes inexcusable delay.
Husband ignores that two appeals occurred during that time period. Wife filed
her motion to dismiss within thirty days of the trial court resuming jurisdiction
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 14 of 17
on February 15, 2016, when the decision in Falatovics 2 was certified. We
cannot say that Wife inexcusably delayed in filing her motion to dismiss.
[28] “The doctrine of invited error is grounded in estoppel.” Witte v. Mundy ex rel.
Mundy, 820 N.E.2d 128, 133 (Ind. 2005). Under this doctrine, “a party may not
take advantage of an error that she commits, invites, or which is the natural
consequence of her own neglect or misconduct.” Evans v. Evans, 766 N.E.2d
1240, 1245 (Ind. Ct. App. 2002). Husband argues that Wife invited the error by
moving for two continuances, rather than dismissal, of the Trial Rule 60(B)
Motions, indicating to the trial court that “the matter could not be adjudicated
and heard until after the appeal was completed.” Appellant’s Br. at 28.
Husband overstates the effect of Wife’s motions for continuance. In her
motions, she merely informed the trial court that it lacked jurisdiction to
entertain evidentiary hearings while the case was pending on appeal. That was
not error. If the trial court had ruled on Husband’s Trial Rule 60(B) Motions
when the appeals were pending, the judgment would have been void. See
Southwood, 704 N.E.2d at 166. We conclude that the doctrine of invited error
does not apply.
[29] Finally, Husband claims that the dismissal of his Trial Rule 60(B) Motions
without an evidentiary hearing violates his federal constitutional due process
rights and his state constitutional right to open access to the courts. The
Fourteenth Amendment of the United States Constitution prohibits any state
from depriving a person of life, liberty, or property without due process of law.
Article 1, Section 12 of the Indiana Constitution provides, “All courts shall be
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 15 of 17
open; and every person, for injury done to him in his person, property, or
reputation, shall have remedy by due course of law.” Indiana courts have
consistently construed Article 1, Section 12 of the Indiana Constitution as
analogous to the federal due process clause. Doe v. O’Connor, 790 N.E.2d 985,
988 (Ind. 2003).
[30] We observe that Husband had an opportunity to be heard on the issue raised in
the Addendum—the valuation of Parcels 1 and 2—before the dissolution decree
was issued, but at that time he apparently agreed to the valuation of properties
in Wife’s appraisals. See Falatovics 1, 15 N.E.3d at 111 (“The parties agreed that
the value of Husband’s interest in Parcels 1 and 2 was $106,700.”). As for his
Trial Rule 60(B) Motion, parties are not entitled to evidentiary hearings when
procedural requirements have not been satisfied. See Plank v. Cmty. Hosps. of
Ind., Inc., 981 N.E.2d 49, 54 (Ind. 2013) (concluding that Plank forfeited
opportunity for evidentiary hearing on his constitutional challenge to Medical
Malpractice Act damages cap); Bunker v. Nat’l Gypsum Co., 441 N.E.2d 8, 14
(Ind. 1982) (concluding that statute of limitations in Occupational Diseases Act
was constitutional as applied to worker’s claim for permanent disability). Here,
Husband would have received an evidentiary hearing on the merits of his
motion if he had followed the proper procedure. Husband was not completely
denied an opportunity to be heard merely by being required to follow the proper
procedure. We find no violation of Husband’s constitutional rights.
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 16 of 17
Section 2 - Wife is not entitled to appellate attorney’s fees.
[31] As a final matter, we address Wife’s request for attorney’s fees pursuant to
Indiana Appellate Rule 66, which permits this Court to assess damages,
including attorney’s fees, if an appeal is frivolous or in bad faith. “Our
discretion to award attorney fees under Indiana Appellate Rule 66(E) is limited
to instances when an appeal is permeated with meritlessness, bad faith,
frivolity, harassment, vexatiousness, or purpose of delay.” Thacker v. Wentzel,
797 N.E.2d 342, 346 (Ind. Ct. App. 2003). “[W]e must use extreme restraint
when exercising this power because of the potential chilling effect upon the
exercise of the right to appeal.” Id. “A strong showing is required to justify an
award of appellate damages and the sanction is not imposed to punish mere
lack of merit but something more egregious.” Ballaban v. Bloomington Jewish
Cmty., Inc., 982 N.E.2d 329, 339-40 (Ind. Ct. App. 2013). While we find
Husband’s argument unpersuasive, his appeal is not permeated with frivolous
claims or brought in bad faith. Therefore, we decline Wife’s request for
attorney’s fees.
[32] Based on the foregoing, we affirm the dismissal of Husband’s Trial Rule (60)(B)
Motions.
[33] Affirmed.
Riley, J., and Altice, J., concur.
Court of Appeals of Indiana | Opinion 46A04-1605-DR-1161 | March 10, 2017 Page 17 of 17
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NUECES COUNTY COURTHOUSE
CHIEF JUSTICE
901 LEOPARD, 10TH FLOOR
ROGELIO VALDEZ
CORPUS CHRISTI, TEXAS 78401
361-888-0416 (TEL)
JUSTICES
361-888-0794 (FAX)
NELDA V. RODRIGUEZ
DORI CONTRERAS GARZA
HIDALGO COUNTY
GINA M. BENAVIDES
ADMINISTRATION BLDG.
GREGORY T. PERKES
NORA L. LONGORIA Court of Appeals 100 E. CANO, 5TH FLOOR
EDINBURG, TEXAS 78539
956-318-2405 (TEL)
CLERK
CECILE FOY GSANGER Thirteenth District of Texas 956-318-2403 (FAX)
www.txcourts.gov/13thcoa
July 14, 2015
Hon. Stephen B. Tyler Hon. Brendan W. Guy
District Attorney Assistant District Attorney
205 N. Bridge St., Suite 301 205 N. Bridge Street, Ste 301
Victoria, TX 77901 Victoria, TX 77901
* DELIVERED VIA E-MAIL * * DELIVERED VIA E-MAIL *
Hon. Daniel Gilliam Hon. Patti Hutson
County Court at Law No. 2 Attorney at Law
115 N. Bridge, Room 127 110 E. Constitution
Victoria, TX 77901 Victoria, TX 77901
* DELIVERED VIA E-MAIL * * DELIVERED VIA E-MAIL *
Re: Cause No. 13-15-00317-CR
Tr.Ct.No. 2-103177
Style: In Re The State of Texas ex. rel. Stephen B. Tyler
Enclosed please find a copy of an order issued by this Court on this date.
Very truly yours,
Cecile Foy Gsanger, Clerk
CFG:ch
Enc.
cc: Hon. Heidi Easley (DELIVERED VIA E-MAIL)
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266 F.2d 681
MASS COMMUNICATORS, INC., Appellant,v.FEDERAL COMMUNICATIONS COMMISSION, Appellee.Jane A. Roberts, Permittee of Radio Station KCFI, Cedar Falls, Iowa, Intervenor.
No. 14630.
United States Court of Appeals District of Columbia Circuit.
Argued March 3, 1959.
Decided April 16, 1959.
Mr. Seymour M. Chase, Washington, D. C., for appellant.
Mr. Richard M. Zwolinski, Counsel, Federal Communications Commission, with whom Messrs. John L. Fitzgerald, Gen. Counsel, Federal Communications Commission, and Richard A. Solomon, Asst. Gen. Counsel, Federal Communications Commission at the time the brief was filed, were on the brief, for appellee. Mr. Mark E. Fields, Counsel, Federal Communications Commission, also entered an appearance for appellee.
Mr. Harry J. Daly, Washington, D. C., with whom Mrs. Lenore G. Ehrig, Washington, D. C., was on the brief, for intervenor.
Before WILBUR K. MILLER, WASHINGTON and DANAHER, Circuit Judges.
WASHINGTON, Circuit Judge.
1
The issue in the present case is whether the Federal Communications Commission is required under the doctrine of Ashbacker Radio Corp. v. Federal Communications Commission, 1945, 326 U.S. 327, 66 S.Ct. 148, 90 L.Ed. 108, to hold a comparative hearing as between the applications made to it by appellant on the one hand and the intervenor (Mrs. Jane A. Roberts) on the other. The facts may be briefly stated.
2
On March 20, 1957, the Commission granted the application of Mrs. Roberts for a construction permit for a new standard broadcast station at Cedar Falls, Iowa. The permit specified November 20, 1957, as the date for the completion of construction. By the specified date, Mrs. Roberts had not completed the construction, nor had she filed an application on Form 701 for additional time to complete construction. See Communications Act of 1934, § 319(b), 48 Stat. 1089, as amended, 47 U.S.C.A. § 319(b); 47 C.F.R. § 1.323(a) (1958). Accordingly, the permit expired by its terms on November 20, 1957. Twenty-three days later, on December 13, 1957, the appellant, Mass Communicators, Inc., filed an application on Form 301 for a construction permit for a new standard station, proposing the same facilities. See Communications Act of 1934, §§ 308-09, 48 Stat. 1084-85, as amended, 47 U.S.C.A. §§ 308-09; 47 C.F.R. § 1.322(a)(1) (1958). Ten days thereafter, on December 23, 1957, Mrs. Roberts filed an application on Form 321 for a construction permit to replace the expired permit. See Section 319(b) of the Act; 47 C.F.R. § 1.323(b) (1958).
3
The Commission found that although Mrs. Roberts had not been prevented from completing construction by causes outside of her control, she nevertheless had displayed a degree of due diligence in carrying on the construction, and that in fact the work had been substantially completed by November 20, 1957. The Commission therefore granted her Form 321 application and, without hearing, returned the appellant's Form 301 application, stating in essence that it had exercised its discretion to replace Mrs. Roberts' expired construction permit, even though she had filed her Form 321 application more than thirty days after the expiration date. See ibid.
4
The appellant thereupon filed with the Commission a petition for reconsideration of its actions, again tendering its Form 301 application. In the petition, the appellant averred that, according to the terms of Section 319(b) of the Act, there had been an automatic forfeiture of the intervenor's construction permit on the date of its expiration, and that therefore the Commission had before it two conflicting and mutually exclusive applications, one pursuant to Sections 308-09, and the other pursuant to Section 319(b) of the Act. Appellant took the position that the Commission was obliged under the Ashbacker doctrine to hold a comparative hearing on the two applications. The Commission denied the petition for reconsideration and returned the appellant's application. This appeal followed.
5
Section 319(b) of the Communications Act provides:
6
"(b) Such permit for construction shall show specifically the earliest and latest dates between which the actual operation of such station is expected to begin, and shall provide that said permit will be automatically forfeited if the station is not ready for operation within the time specified or within such further time as the Commission may allow, unless prevented by causes not under the control of the grantee."
7
The permit is thus required to provide for automatic forfeiture "if the station is not ready for operation within the time specified," subject, however, to two important avenues by which forfeiture may be avoided. If the Commission finds that the construction of the station facilities had not been completed by the specified time because of "causes not under the control of the grantee," the Commission cannot declare an automatic forfeiture of the permit. Cf. Richmond Development Corporation v. Federal Radio Commission, 1929, 59 App.D.C. 113, 35 F.2d 883 (holding under Section 21 of the Radio Act of 1927, ch. 169, 44 Stat., pt. 2, at page 1171, the counterpart of present Section 319(b)). If, on the other hand, the causes for delay of construction are within the control of the grantee, the Commission is given the power to exercise its discretion and allow further time for construction. An automatic forfeiture of the permit then occurs only "if the station is not ready for operation * * * within such further time as the Commission may allow * * *."
8
While over the years the Commission has established varying procedures for the consideration of requests for granting further time for construction, its course of decision seems to us to have been consistent with the statutory plan. Prior to 1947, the Commission's regulations only provided for a Form 701 application for the extension of time within which a station could be constructed. FCC Rules and Regulations § 3.215(b), 10 Fed.Reg. 2006 (1945) [now 47 C.F.R. § 1.323(a) (1958)]. Under the regulation, the application had to be filed "at least 30 days prior to the expiration date of [the construction] permit." Applications were also accepted if filed within less than thirty days prior to the expiration date upon a showing satisfactory to the Commission of sufficient reasons for late filing. In both circumstances, the Commission granted the extension "upon a specific and detailed showing that the failure to complete was due to causes not under the control of the grantee, or upon a specific and detailed showing of other matters sufficient to justify the extension."
9
In 1947, the problem arose as to what discretionary power the Commission had when a Form 701 application was filed after the expiration date of the original construction permit. The Commission held that even in this situation no automatic forfeiture takes place unless and until the Commission refuses to exercise its discretion to allow additional time for construction. Bremer Broadcasting Corp., 3 Pike & Fischer R.R. 1579 (1947) (hereinafter cited as R.R.). As the Commission stated:
10
"Clearly, the statute confers on the Commission the discretionary power to allow additional time for construction. Moreover, the statute contains no requirement that this power be exercised by the Commission only upon application filed prior to the completion date specified in the permit." Id. at 1582.
11
The Commission thus made plain its view that although the regulations specified that applications for renewal be filed either thirty days prior to the expiration date or at least within the thirty-day period prior to the expiration date, such specification did not exhaust the statutory grant of power in Section 319(b) of the Act.
12
Ten days after the Bremer decision, the Commission promulgated a new regulation concerning expired construction permits. Once a permit had expired, the applicant was now required to make an application on FCC Form 321 for a new construction permit to replace the expired permit. Rules and Regulations § 1.314(c), 12 Fed.Reg. 7080 (1947) [now 47 C.F.R. § 1.323(b) (1958)]. The new procedure would now make impossible a filing on Form 701 after the original permit had expired, as was done in Bremer, but clearly the new regulation was not intended to change or renounce the statutory power of the Commission in exercising its discretion. As was stated in Christian County Broadcasting Co., 6 R.R. 849, 850 n. 2 (1950):
13
"The fact that the request of Christian County * * * was filed on Form 321, `Application for Construction Permit to Replace Expired Permit,' whereas in the Bremer case the request was made on Form 701, `Application for Additional Time to Construct Radio Station,' is immaterial, since both seek additional time in which to complete construction." Accord, WAAB, Inc., 13 R.R. 461 (1956).
14
Thus, the new regulation presumably was to make explicit what the statute itself already allowed. It is clear then that an expiration of a permit was by no means to be considered an automatic forfeiture of the permit. Only if the Commission did not exercise its discretion in extending the time within which the facilities were to be constructed, either by an actual extension under Section 1.314(b) of the regulations (Form 701), or by a grant of a new permit to replace the expired permit under Section 1.314(c) (Form 321), was there to be an automatic forfeiture.
15
Since no automatic forfeiture occurs unless and until the Commission has exercised its discretion, the Ashbacker doctrine has never been applied to a Section 319(b) application. Thus a Form 301 application for a construction permit has never been allowed a comparative hearing with a Form 701 application for an extension of time to complete construction when the Form 701 application was filed prior to the expiration date of the old permit. See, e.g., United Detroit Theatres Corp. v. Federal Communications Commission, 1949, 85 U.S.App.D.C. 239, 178 F.2d 700; New England Theatres, Inc., 4 R.R. 1194 (1949); Lacy-Potter Television Broadcasting Co., 4 R.R. 893 (1948); Don Lee Broadcasting System, 4 R.R. 100 (1948). Similarly no comparative hearing has been allowed when the Form 701 application was filed after the expiration date of the original permit. See Bremer Broadcasting Corp., supra. Nor has a comparative hearing been allowed when a Form 321 application was filed for a replacement permit. See WAAB, Inc., supra; Christian County Broadcasting Co., supra. Presumably the rationale behind all these decisions is that the two applications presented cannot be considered to be "mutually exclusive" applications for "an available frequency," see Ashbacker Radio Corp. v. Federal Communications Commission, supra, 326 U.S. at page 333, 66 S.Ct. at page 151, for the frequencies in effect are not "available" in the Ashbacker sense; nor can they become "available" until there occurs an actual forfeiture, either by an abandonment of the permit by the original permittee or by an adverse — and valid — administrative action by the Federal Communications Commission.
16
In the present case, there is an added difficulty. The regulation now in force requires that a Form 321 application be filed "within 30 days of the expiration date of the authorization sought to be replaced." 47 C.F.R. § 1.323(b) (1958). The intervenor in the case at bar filed her Form 321 application thirty-three days after the expiration of the original permit. Nevertheless, the Commission satisfied itself that there had been sufficient extenuating circumstances so as to allow it to grant additional time. Its action here is comparable to the Commission's action in the Bremer case in which a Form 701 application was allowed to be filed after the expiration date. Here, as there, the regulations require that the discretionary power of the Commission be exercised upon the application filed only prior to the date or time period specified. But the regulations cannot be read to limit the statutory grant of power under Section 319(b). One of the major purposes of the section is to allow the Commission to exercise its discretion before an automatic forfeiture takes place. Under the circumstances of the present case, where the Commission's discretion has been exercised to prevent a forfeiture, there can be no basis for applying the Ashbacker doctrine.
17
Appellant also contends that because it raised questions as to the intervenor's fitness to operate the station, the Commission should have considered and resolved those questions in a hearing prior to the granting of intervenor's application for a construction permit on Form 321. Instead, the Commission granted the latter application and postponed the questions raised concerning intervenor's fitness until the holding of a hearing — which the Commission ordered — on intervenor's application for license to operate. We do not think this exceeded the Commission's powers, or abused its discretion. Compare Section 319(c) with Section 319(b); see also Section 312. We do not reach the other contentions of the parties.
18
The orders of the Commission will accordingly be
19
Affirmed.
20
WILBUR K. MILLER, Circuit Judge, dissents.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 19-6507
MICHAEL S. OWL FEATHER-GORBEY, Chief,
Petitioner - Appellant,
v.
WARDEN FCI CUMBERLAND,
Respondent - Appellee.
Appeal from the United States District Court for the District of Maryland, at Baltimore.
Richard D. Bennett, District Judge. (1:19-cv-00715-RDB)
Submitted: September 27, 2019 Decided: November 6, 2019
Before NIEMEYER, FLOYD, and RICHARDSON, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Michael S. Gorbey, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Michael S. Owl Feather-Gorbey, a District of Columbia code offender incarcerated
at FCI Cumberland in Maryland, seeks to appeal the district court’s order denying relief on
his 28 U.S.C. § 2241 (2012) petition. The order is not appealable unless a circuit justice
or judge issues a certificate of appealability. ∗ 28 U.S.C. § 2253(c)(1)(A) (2012). 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) (2012). When the district court denies relief
on the merits, a prisoner satisfies this standard by demonstrating that reasonable jurists
would find that the district court’s assessment of the constitutional claims is debatable or
wrong. Slack v. McDaniel, 529 U.S. 473, 484 (2000); see Miller-El v. Cockrell, 537 U.S.
322, 336-38 (2003). When the district court denies relief on procedural grounds, the
prisoner must demonstrate both that the dispositive procedural ruling is debatable, and that
the petition states a debatable claim of the denial of a constitutional right. Slack, 529 U.S.
at 484-85.
We have independently reviewed the record and conclude that Owl Feather-Gorbey
has not made the requisite showing. Accordingly, we deny a certificate of appealability,
deny leave to proceed in forma pauperis, and dismiss the appeal. We dispense with oral
∗
Because Owl Feather-Gorbey was convicted in a District of Columbia court, he is
required to obtain a certificate of appealability in order to appeal the denial of his habeas
petition. See Madley v. United States Parole Comm’n, 278 F.3d 1306, 1310 (D.C. Cir.
2002).
2
argument because the facts and legal contentions are adequately presented in the materials
before this court and argument would not aid the decisional process.
DISMISSED
3
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344 Mass. 71 (1962)
181 N.E.2d 594
THOMAS H. DOWDALL
vs.
THE COMMERCIAL TRAVELERS MUTUAL ACCIDENT ASSOCIATION OF AMERICA.
Supreme Judicial Court of Massachusetts, Suffolk.
February 9, 1962.
April 4, 1962.
Present: WILKINS, C.J., SPALDING, WHITTEMORE, CUTTER, & KIRK, JJ.
Monto Rosenthal, (Albert S. Resnick with him,) for the plaintiff.
David H. Fulton, for the defendant.
SPALDING, J.
This is an action on an insurance policy to recover disability benefits. At the close of the evidence the defendant presented a motion for a directed verdict, which was granted, subject to the plaintiff's exception. The judge thereupon reported the case, and the sole question is whether the judge erred in allowing the motion.
It was agreed that the plaintiff was a holder of an insurance policy issued by the defendant on November 10, 1952, and that the plaintiff had paid the required premiums up to the time he became incapacitated. The policy provided for weekly payments of $50 for a period of fifty-two weeks in case the assured was totally disabled by disease or sickness. For twenty-one years prior to the issuance of this policy the plaintiff was the holder of a similar type of policy issued by the defendant. The weekly benefits under the earlier policy were one half the amount called for in the later policy. Attached to the new policy was a photostat of the plaintiff's application for that policy; a photostat of the plaintiff's application for the old policy was likewise attached. It was agreed that the plaintiff was totally disabled from December 18, 1958, to the time of the trial. And the cause of this disability (multiple sclerosis) is not in dispute.
*73 Under the policy, benefits were payable only for disability "resulting from sickness or disease originating more than 30 days... after the effective date hereof" (emphasis supplied). The defendant argues that this provision precludes recovery. The evidence bearing on this issue was as follows: The plaintiff submitted to the defendant a form furnished by the defendant entitled "Attending Physician's Statement Sickness." This was filled out on December 30, 1958, by Dr. Thomas A. Kelly who had been the defendant's physician from 1944 to 1958. In answer to certain questions on the form, Dr. Kelly stated that the disease for which disability benefits were claimed was multiple sclerosis; that the symptoms of the disease first appeared in 1944; and that the plaintiff first consulted him for this condition in 1947-1948. Dr. Kelly testified that he "had reasonable cause to believe that the plaintiff had multiple sclerosis in 1946, 1947, 1948 along in there"; that he did not tell the plaintiff that he had the disease; that as late as 1952 the plaintiff did not know that he had it; and that a definite diagnosis was made in 1955.
On January 2, 1959, the plaintiff filled out and submitted to the defendant a form entitled "Preliminary Report of Sickness" in which, among other things, he stated that he first learned that he had multiple sclerosis in June, 1954, when he consulted an eye doctor. The diagnosis was confirmed in 1955 while the plaintiff was undergoing treatment in a hospital. The plaintiff testified that from "1944, with the exception of remissions ... [he had] had trouble with his arms and legs." Answers to interrogatories in another action were put in evidence in which the plaintiff stated that he had learned in 1954 that he had "had that disease since 1944."
On the basis of the foregoing evidence, as to which there was virtually no dispute, we are of opinion that the plaintiff's disability resulted from a disease "originating" several years prior to the issuance of the policy on November 10, 1952. While the definitive diagnosis was not made until later, it is apparent that the progress of the disease was *74 well advanced when the policy was issued. Knowledge of the existence of the disease on the part of the plaintiff was not required; it was sufficient if the disease had in fact originated prior to the effective date of the policy. We are mindful that the word "originating" in a policy of this sort should receive a restrictive construction; otherwise the purported coverage would be illusory. The mere presence of latent germs or seeds of illness in the body prior to the issuance of such a policy would not preclude recovery. "Few adults are not diseased, if by that one means only that the seeds of future troubles are not already planted." Grain Handling Co. Inc. v. Sweeney, 102 F.2d 464, 466 (2nd Cir.). Thus, it has generally been held in construing policies of this type that the origin of a sickness or disease is deemed to be the time when it first becomes manifest or active, or when there is a distinct symptom or condition from which one learned in medicine can diagnose the disease. See note, 53 A.L.R. (2d) 682, 689. Here that test has been satisfied for the symptoms of the disease had become manifest long before the issuance of the policy. See Mutual Benefit Health & Acc. Assn. v. Patton, 37 F. Supp. 48 (E.D. Ky.). Cf. Jefferson Life & Cas. Co. v. Bevill, 264 Ala. 206; Cohen v. North Am. Life & Cas. Co. 150 Minn. 507; Reserve Life Ins. Co. v. Lyle, 288 P.2d, 717 (Okla.).
The plaintiff contends that by attaching to this policy the application for the earlier (1931) policy the defendant "must have intended to convey the meaning that the [second] policy ... [was] a continuation" of the earlier policy, and "that at least the insured had the continuance of the benefits" of the earlier policy. All that the second policy did, it is argued, was to increase the benefits of the first policy. In support of this contention, the plaintiff relies on a clause under the heading "Standard Provisions" which reads: "1. This certificate includes the endorsements and attached papers."[1] But this argument ignores another clause of the policy which, under the heading "Additional *75 Provisions," reads, "This certificate is issued in lieu of and supersedes all prior certificates issued by this Association to the member herein named, and this Association shall not after date hereof be liable for any loss or claim of any kind arising hereafter under or by reason of any certificate heretofore issued by it to said member."[2] There can be no doubt that under this provision the plaintiff's rights arise exclusively out of the second policy. Accordingly, if the disease resulting in the plaintiff's disability originated prior to the issuance of that policy and, as indicated above, we think that it did the plaintiff was not entitled to recover, and the judge rightly directed a verdict for the defendant.[3]
Judgment for the defendant.
NOTES
[1] Although we have referred to the contract of insurance as a policy, it is called a "certificate" in the contract.
[2] In the policy the insurer is called "Association" and the policyholder is called "member."
[3] The policy contained a clause that it shall "for all purposes be deemed to be executed, issued and delivered within, and to be construed in accordance only with the laws of, the State of New York." Whether, in view of the fact that the plaintiff is a resident of this Commonwealth, New York rather than Massachusetts law would govern need not be decided (see Restatement 2d: Conflict of Laws, Tent. draft no. 6, 1960, § 346h), for the law is the same. See Reiser v. Metropolitan Life Ins. Co. 262 App. Div. (N.Y.) 171, affd. 289 N.Y. 561.
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Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
9-17-2004
Saudi v. Acomarit Maritimes
Precedential or Non-Precedential: Non-Precedential
Docket No. 03-1609
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004
Recommended Citation
"Saudi v. Acomarit Maritimes" (2004). 2004 Decisions. Paper 336.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/336
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 03-1609
SHERIFF SAUDI, CAPTAIN,
Appellant
v.
ACOMARIT MARITIMES SERVICES, S.A.
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
D.C. Civil Action No. 01-cv-04301
(Honorable Michael M. Baylson)
Argued April 22, 2004
Before: SCIRICA, Chief Judge, ROSENN and GREENBERG, Circuit Judges
(Filed: September 17, 2004)
JOE ALFRED IZEN, JR., ESQUIRE (Argued)
5222 Spruce Street
Bellaire, Texas 77401
Attorney for Appellant
THOMAS R. NORK, ESQUIRE (Argued)
Bell, Ryniker, Letourneau & Nork
5847 San Felipe, Suite 4600
Houston, Texas 77057
Attorney for Appellee
OPINION OF THE COURT
SCIRICA, Chief Judge.
In this personal injury suit, petitioner appeals a Fed. R. Civ. P. 12(b)(6) dismissal
by the District Court for lack of specific and general personal jurisdiction. We will
affirm.
I.
Plaintiff Sheriff Saudi was employed as a “mooring master” by American Eagle
Tankers, a global maritime services company. As a mooring master, Saudi was assigned
by his employer to moor supertankers or vessels on the high seas for the purpose of on-
loading and off-loading petroleum and other cargo. Supertankers are often unable to
enter American ports in the continental United States because the vessels’ drafts exceed
the depth of domestic ports.
Defendant Acomarit Maritimes Services, S.A. is an international ship management
company. Acomarit is a Swiss company with headquarters in Bermuda. It neither
engaged in business in Pennsylvania nor registered to do business in Pennsylvania. It
does not maintain offices in Pennsylvania or an agent for service of process. It manages
vessels, including supertankers, handling the vessels’ crewing and provisioning, and
ensuring that it arrives at its intended destination. Acomarit managed the Marine
Atlantic, the supertanker involved in plaintiff’s accident.
2
On M ay 17, 1999, Saudi left a vessel managed and operated by his employer,
disembarked on to a tender vessel, and was placed aboard the Marine Atlantic
supertanker. At the time, the Marine Atlantic was at anchor sixty miles southeast of
Galveston, Texas, in international waters. The crane transferring Saudi to the tender
vessel collapsed, causing him to fall fifty feet into the Gulf of Mexico. Saudi alleges he
was lashed by the wire support cable of the crane and suffered extensive injuries
including a broken arm, nerve damage, broken ribs, injured lungs, as well as lost wages
and income.
II.
Saudi filed an admiralty and maritime action in the United States District Court for
the Southern District of Texas against the owner of the Marine Atlantic, the manufacturer
and servicer of the allegedly defective crane, the owner of the crude oil being stored on
the M arine Atlantic, and Acomarit. Saudi v. Marine Atlantic, 159 F. Supp. 2d 469 (S.D.
Tex. 2000). He alleged claims of negligence, unseaworthy vessel, breach of warranty of
merchantability, and strict liability in tort. Id. at 472. On February 1, 2000, the federal
court in Texas granted without prejudice Acomarit’s motion to dismiss for lack of
personal jurisdiction. The court held Saudi failed to demonstrate sufficient minimum
3
contacts to Texas or to the United States to establish specific or general personal
jurisdiction in Texas or general jurisdiction under Fed. R. Civ. P. 4(k)(2). Id. at 483.1
On May 16, 2001, Saudi filed a complaint in Pennsylvania state court, seeking
actual and punitive damages against Acomarit for negligently failing to properly inspect
and maintain the Marine Atlantic's crane, as well as negligently failing to make the
Marine Atlantic safe for performing the operations for which he was hired. Saudi alleged
jurisdiction was proper in Pennsylvania because Acomarit “employed” Thomas Garrett, a
resident of Nazareth, Pennsylvania, who carried out Acomarit’s business partly from
Pennsylvania. Acomarit timely removed to federal court under 28 U.S.C. § 1332 and
28 U.S.C. § 1331, as the case involved admiralty and maritime jurisdiction under 28
U.S.C. § 1333.
Acomarit filed a motion to dismiss for lack of personal jurisdiction, which was
denied with leave to refile by July 30, 2002. After a limited period of discovery,
Acomarit filed a renewed motion to dismiss for lack of personal jurisdiction, which the
District Court granted on January 31, 2003. 245 F. Supp. 2d at 667. The court found it
1
Saudi has also filed actions in connection with his accident against various defendants
in at least five federal jurisdictions, as well as in Texas and Wisconsin state courts. See
Saudi v. Northrop Grumman Corp., 273 F. Supp. 2d 101 (D.D.C. 2003) (products liability
action); Saudi v. S/T Marine Atlantic, 2001 U.S. Dist. LEXIS 15155, 2001 WL 893871
(S.D. Tex. Feb. 20, 2001) (maritime negligence action); Saudi v. Valmet-Appleton, Inc.,
219 F.R.D. 128 (E.D. Wis. 2003) (products liability action); Saudi v. V. Ship Switzerland,
S.A., 2004 U.S. App. LEXIS 5923 (Mar. 31, 2004). The record indicates he has not been
able to establish personal jurisdiction in any of the federal courts against Acomarit.
4
lacked general jurisdiction because Acomarit’s contacts with Pennsylvania were sporadic
at best, rather than continuous and systematic, id. at 669, 675; and that it lacked specific
jurisdiction because Saudi did not allege that Acomarit purposefully directed its activities
at the forum. The court found the Southern District of Texas’s ruling on Fed. R. Civ. P.
4(k)(2) jurisdiction did not amount to claim preclusion, since a final adjudication on the
merits (one of the requirements for claim preclusion) cannot result from a dismissal
without prejudice for lack of personal jurisdiction. But the court rejected Rule 4(k)(2)
jurisdiction on its merits, holding there was no nexus to the United States since the
accident took place outside the territorial waters of the United States and had no effect
inside the Untied States. Id. at 679-80. The court also rejected Saudi’s motion to compel
discovery, finding that Acomarit properly complied with Saudi’s discovery requests. Id.
at 681.
Saudi filed this timely appeal.
III.
We review de novo the District Court’s dismissal of a party for lack of personal
jurisdiction, Pinker v. Roche Holdings, Ltd, 292 F.3d 361, 368 (3d Cir. 2002), but we
review factual findings for clear error. Pennzoil Products Co. v. Colelli & Assoc., Inc.,
149 F.3d 197, 200 (3d Cir. 1998). We review for abuse of discretion the District Court’s
discovery rulings. Ins. Corp. of Ir. v. Companie Des Bauxites De Guinee, 456 U.S. 694,
707 (1982). We have appellate jurisdiction under 28 U.S.C. § 1291.
5
IV.
A. Personal Jurisdiction in Pennsylvania
Saudi claims that the District Court erred in dismissing his suit for lack of personal
jurisdiction. Fed. R. Civ. P. 4(e) allows a district court to assert personal jurisdiction over
a non-resident to the extent allowed by the law of the forum state. Time Share Vacation
Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 63 (3d Cir. 1984). Pennsylvania’s long-arm
statute provides that a court may exercise personal jurisdiction over non-residents “to the
fullest extent allowed under the Constitution of the United States.” 42 Pa. Cons. Stat.
Ann. § 5322(b).
The Due Process Clause of the Fourteenth Amendment guarantees in personam
jurisdiction may only be asserted over a nonresident defendant corporation if that
defendant has “certain minimum contacts with [the forum] such that the maintenance of
the suit does not offend traditional notions of fair play and substantial justice.”
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quotation omitted). In
assessing personal jurisdiction, the court must resolve the question based on the
circumstances that the particular case presents. Burger King v. Rudzewicz, 471 U.S. 462,
485 (1985).
A court may exercise personal jurisdiction over a defendant if the defendant has
specific or general contacts with the forum. Specific jurisdiction is appropriate only if the
cause of action is related to or arises out of the defendant’s forum-related activities, so
6
that it should reasonably expect to be haled into court. Vetrotex Certainteed Corp. v.
Consol. Fiber Glass Prod. Co., 75 F.3d 147, 151 (3d Cir. 1996); Helicopteros Nacionales
de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8. The defendant must have “purposefully
directed his activities at residents of the forum” and the litigation must have resulted from
alleged injuries that “‘arise out of or relate[] to those activities.’” BP Chem. Ltd. v.
Formosa Chem. & Fibre Corp., 229 F.3d 254, 259 (3d Cir. 2000) (quoting Burger King,
471 U.S. at 472). This determination is both claim-specific and defendant-specific. See
Remick v. Manfredy, 238 F.3d 248, 255-56 (3d Cir. 2001); Rusk v. Savchuk, 444 U.S.
320, 332 (1980).
If the cause of action does not “arise out of” the defendant foreign corporation’s
activities, a court may assert general jurisdiction if the corporation has “continuous and
systematic” contacts with the forum state. 466 U.S. at 414-15. The standard for
evaluating whether minimum contacts satisfy the test for general jurisdiction is more
stringent than the test applied to questions of specific jurisdiction. See Noonan v.
Winston Co., 135 F.3d 85, 93 (1st Cir. 1998).
1. Specific Jurisdiction
The District Court found no basis to exercise specific personal jurisdiction over
Acomarit, as Saudi presented no evidence demonstrating the underlying accident arose
out of or related to Acomarit’s contacts with or activities in Pennsylvania, such that
Acomarit “should reasonably expect being haled into court” in Pennsylvania. 245 F.
7
Supp. 2d at 669 (quoting Vetrotex, 75 F.3d at 151). Saudi’s claims against Acomarit
relate only to an accident which occurred in the Gulf of M exico, not in Pennsylvania or its
territorial waters, and Saudi’s alleged injury did not arise from any activities Acomarit
“purposefully directed” at Pennsylvania. Id. We find no error.
2. General Jurisdiction
Saudi contends Acomarit had sufficient continuous and substantial contacts with
Pennsylvania to establish general jurisdiction over Acomarit through its alleged employee
Thomas Garrett. He claims that Osprey-Acomarit Ship Management employee Thomas
Garrett was actually a “hidden” employee of Acomarit. According to Saudi, Acomarit
hired Garrett as its port captain and entered into a joint venture with American Automar
to form a company called Osprey-Acomarit Ship Management (“Osprey-Acomarit”),
placed Garrett on that company’s payroll, and hid the fact that Acomarit used a resident
agent in the United States to carry out its business.
Even if Garrett was employed by Acomarit, Saudi has not shown sufficient
contacts with Pennsylvania through Garrett’s employment to warrant general jurisdiction
over Acomarit. At most, Garrett traveled to and from Pennsylvania to Osprey-Acomarit’s
office in Maryland, where he had an office, sent some reports from his home in
Pennsylvania, and made some telephone calls and some e-mails to and from
Pennsylvania. There is no evidence that Acomarit conducted or solicited any business in
Pennsylvania. With the exception of one vessel that paid a port call after the Saudi
8
accident, no Acomarit-managed vessels entered Pennsylvania waters. As such, these
actions in Pennsylvania are not sufficient to establish “continuous and systematic”
contacts with Pennsylvania. See, e.g., BP Chem. Ltd., 229 F.3d at 262 (finding lack of
continuous and systematic contacts where the defendant corporation has no personnel or
facilities in the forum and has not advertised or solicited business in the forum); Nichols
v. Searle & Co., 991 F.2d 1195, 1200 (4th Cir. 1993) (finding insufficient “continuous
and substantial activities” to justify general jurisdiction despite defendant’s solicitation
activities and employment of representatives in the forum state). The District Court did
not abuse its discretion in finding lack of general personal jurisdiction over Acomarit in
Pennsylvania.
B. Fed. R. Civ. P. 4(k)(2)
1. Claim Preclusion and Issue Preclusion as Applied to the Rule 4(k)(2) Claim
The federal court in Texas dismissed Saudi’s case without prejudice for lack of
personal jurisdiction. Acomarit contends Saudi already litigated whether jurisdiction lies
under Fed. R. Civ. P. 4(k)(2), so he should have been estopped from litigating the Rule
4(k)(2) claim before the District Court here. See Saudi v. S/T Marine Atlantic, 159 F.
Supp. 2d 469, 479-83 (S.D. Tex. 2000). Two types of estoppel might be applicable: res
judicata (claim preclusion) and collateral estoppel (issue preclusion).
Claim preclusion does not apply here. Three elements are required for claim
preclusion to take effect: (1) a final judgment on the merits must have been rendered in a
9
prior suit; (2) the same parties or their privies are involved; and (3) the subsequent suit is
based on the same cause of action as the original. Lubrizol Corp. v. Exxon Corp, 929
F.2d 960, 963 (3d Cir. 1991). The first prong has not been satisfied here. The federal
court in Texas dismissed Saudi’s suit for lack of personal jurisdiction, rather than issuing
a judgment “on the merits.” See Fed. R. Civ. P. 41(b); Compagnie des Bauxites de
Guinee v. L’Union Atlantique S.A. d’Assurances, 723 F.2d 357, 360 (3d Cir. 1983).
Furthermore, dismissals without prejudice are not considered to be “final judgments” as
required for claim preclusion to take effect. Trevino-Barton v. Pittsburgh Nat’l Bank,
919 F.2d 874, 877-78 (3d Cir. 1990). As the District Court correctly concluded, claim
preclusion does not bar Saudi from bringing the current Rule 4(k)(2) action.
It is possible that issue preclusion, might bar Saudi’s Rule 4(k)(2) action.2 Issue
preclusion may apply to non-merits judgments which are conclusive as to those matters
actually adjudged. See Matosantos Commercial Corp. v. Applebee’s Int’l, Inc., 245 F.3d
1203, 1209 (10th Cir. 2001) (“Although the dismissal for lack of personal jurisdiction in
the Puerto Rico district court does not have res judicata effect, it does have collateral
2
While counsel for Acomarit mainly focused its arguments on claim preclusion, their
arguments appear to encompass issue preclusion as well. Counsel wrote in two separate
briefs, “the Court correctly noted that the issue of Rule 4(k)(2) jurisdiction was
‘previously resolved in the Texas litigation,’” App. 496, and “[t]he issue of Fed. R. Civ.
P. 4(k)(2) jurisdiction has already been decided by the United States District Court for the
Southern District of Texas and serves as res judicata to bar the re-litigation of that claim
in this case” (emphasis added). Furthermore, counsel for Acomarit supported its
contentions by citing to Montana v. Supreme Court of the United States, 440 U.S. 147,
153-55 (1979), a case addressing issue preclusion.
10
estoppel effect, preventing the relitigation of issues decided in the Puerto Rico district
court”); Okoro v. Bohman, 164 F.3d 1059, 1063 (7th Cir. 1999). To establish issue
preclusion, Acomarit must demonstrate: “(1) the issue sought to be precluded is the same
as that involved in the prior action; (2) that issue was actually litigated; (3) it was
determined by a final and valid judgment; and (4) the determination was essential to the
prior judgment.” Burlington N. R.R. v. Hyundai Merchant Marine Co., 63 F.3d 1227,
1232 (3d Cir. 1995) (quoting In re Braen, 900 F.2d 621, 628-29 n.5 (3d Cir. 1990), cert.
denied, 498 U.S. 1066 (1991)). It appears all four elements may have been met here. The
Southern District of Texas decided the same Rule 4(k)(2) issue that Saudi now raises,
namely whether Acomarit was subject to personal jurisdiction based upon nationwide
contacts. See Saudi, 159 F.Supp.2d at 479-83, and Saudi, 245 F.Supp.2d at 676-681.
This issue was litigated in the Texas action, the Texas court issued a valid judgment
regarding Rule 4(k)(2) jurisdiction, and the issue of Rule 4(k)(2) jurisdiction was
essential to the Texas judgment in determining whether there was personal jurisdiction
over Acomarit. See 159 F.Supp.2d at 479-83. Nonetheless, the able District Court did
not specifically address issue preclusion and so we are reluctant to rule on it here,
especially since we believe plaintiff cannot prevail on the merits.
2. Rule 4(k)(2) Discussion on the Merits
Even if Saudi were permitted to bring a claim of personal jurisdiction under Fed.
R. Civ. P. 4(k)(2), his claim would fail. Rule 4(k)(2) allows a federal court to exert
11
jurisdiction over a foreign defendant where the defendant lacks sufficient contacts in a
single state to bring it within the reach of the state’s long arm statute, yet has enough
contacts with the United States as a whole to make jurisdiction constitutional. Thomas A.
Coyne, Federal Rules of Civil Procedure II-25 (2d ed. 2002). The rule, enacted in
December 1993, provides:
If the exercise of jurisdiction is consistent with the Constitution and laws of the
United States, serving a summons or filing a waiver of service is also effective,
with respect to claims arising under federal law, to establish personal jurisdiction
over the person of any defendant who is not subject to the jurisdiction of the courts
of general jurisdiction of any state.
Therefore, to establish personal jurisdiction, there must be: (1) a claim arising under
federal law; (2) the defendant must be beyond the jurisdictional reach of any state court of
general jurisdiction; and (3) the defendant must have sufficient contacts with the United
States so that the court’s exercise of personal jurisdiction over the defendant comports
with the due process requirements of the Constitution or other federal law. See BP Chem.
Ltd., 229 F.3d at 262; United States v. Swiss American Bank, Ltd., 191 F.3d 30, 38 (1st
Cir. 1999). The third prong of the test under Rule 4(k)(2)—minimum contacts—is
similar to that of personal jurisdiction for a particular state: “general jurisdiction is
available when the defendant’s contacts unrelated to the litigation are ‘continuous and
systematic.’” BP Chemicals, 229 F.3d at 262 (citing Helicopteros, 466 U.S. at 416.3
3
In Leasco, 468 F.2d 1326, a case decided before Rule 4(k)(2) was promulgated, the
Court of Appeals for the Second Circuit stated:
(continued...)
12
Saudi claims he presented sufficient contacts with the United States, described by
the Texas court as a “laundry list” but not elaborated on, see 159 F. Supp. 2d at 483, to
ensure due process has been satisfied. He also argues his injury necessarily has an effect
within the United States.
We do not believe that the “minimum contacts” presented by Saudi are sufficient
to establish personal jurisdiction over Acomarit. As the District Court noted, Saudi
presented even fewer contacts with the United States than the moving party in BP
Chemicals Ltd., 227 F.3d 254. In BP Chemicals, we found that a foreign defendant did
not have sufficient contacts with the United States as a whole to justify the exercise of
Rule 4(k)(2) jurisdiction. Id. at 258. Although the defendant Taiwanese corporation
3
(...continued)
[T]he Restatement (Second) of Conflict of Laws, § 27, lists various bases for the
exercise of judicial jurisdiction over an individual who is not present. Those
relevant here are doing business in the state, § 35; doing an act in the state, § 36;
and causing an effect in the state by an act done elsewhere, § 37.
468 F.2d at 1340. The Second Circuit chose three of the many factors under the
Restatement which apply to the facts of that particular case.
See also, e.g., United States v. Swiss American Bank, Ltd., 191 F.3d 30 (1st Cir.
1999) (performing a Rule 4(k)(2) minimum contacts test but not limiting its analysis to
the three factors described above); Chew v. Dietrich, 143 F.3d 24 (2d Cir. 1998) (same);
World Tankers Carriers Corp., 99 F.3d 717 (5th Cir. 1996) (same); Central States v.
Reimer Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000) (ERISA case); Doe v.
Unocal Corp., 27 F. Sup. 2d 1174 (C.D. Ca. 1998); aff’d, 248 F.3d 915 (9th Cir. 2001);
SEC v. Knowles, 87 F.3d 413, 416-19 (10th Cir. 1996) (involving a contract dispute);
Associated Transp. Line, Inc. v. Productos Fitosanitarios Proficol El Carmen, S.A., 197
F.3d 1070, 1074-76 (11th Cir. 1999) (tort case involving communication of
misinformation).
13
exported its products to the United States, held an ownership interest in a Delaware
corporation, and entered into contracts requiring its personnel to travel to the United
States for training, we held the cumulative effects of these contacts did not meet the
requirements for general personal jurisdiction under Rule 4(k)(2). Id. at 258-59. In this
case, there appear to be fewer jurisdictional connections than in BP Chemicals. Saudi’s
accident occurred outside the United States, and Saudi presents no evidence that
Acomarit solicited or transacted business in the United States. The District Court did not
err in finding lack of sufficient contacts with the United States.
C. Motion to Compel Discovery and Impose Sanctions
Finally, Saudi alleges Acomarit abused the discovery process and blocked
discovery of jurisdictional facts. He alleges Acomarit committed unauthorized
redactions, submitted meritless objections to requests for telephone bills and financial
records showing reimbursements in Pennsylvania, and made unsupported claims that
documents were destroyed and cannot be produced. Saudi claims that he is entitled to a
finding of personal jurisdiction based on this alleged willful obstruction of discovery.
The District Court found no abuse of discovery. It noted, “Despite [Saudi’s] insistence
that Acomarit has not produced documents in its possession, [Saudi] has not produced
any evidence to prove that Acomarit is withholding documents.” Saudi, 245 F. Supp. at
681. We see no abuse of discretion.
14
V.
For the reasons stated above, we will affirm the judgment of the District Court.
15
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-6473
PATRICK L. BOOKER,
Plaintiff - Appellant,
v.
SOUTH CAROLINA DEPARTMENT OF SOCIAL SERVICES; GREENVILLE
COUNTY SHERIFF’S OFFICE; BRANDY P. SULLIVAN; TAMMY CHILDS;
SHAWNEE PEEPLES; KELLY P. KAROW,
Defendants - Appellees,
and
GREENVILLE COUNTY SCHOOL DISTRICT,
Defendant.
Appeal from the United States District Court for the District of
South Carolina, at Anderson. Timothy M. Cain, District Judge.
(8:12-cv-00985-TMC)
Submitted: August 29, 2014 Decided: September 9, 2014
Before WILKINSON and GREGORY, Circuit Judges, and DAVIS, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
Patrick L. Booker, Appellant Pro Se. Russell W. Harter, Jr.,
CHAPMAN, HARTER & HARTER, PA, Greenville, South Carolina; Paul
L. Agnew, Abbeville, South Carolina, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
Patrick Booker, a South Carolina prisoner, filed a
complaint under 42 U.S.C. § 1983 (2012), alleging, in pertinent
part, that the South Carolina Department of Social Services
(“SCDSS”) and its agents, Brandy Sullivan, Shawnee Peeples, and
Tammy Childs, violated his substantive and procedural due
process rights when they temporarily removed his daughter, J.J.,
from the custody of her mother. The district court granted
summary judgment to each defendant and denied Booker’s
subsequent Fed. R. Civ. P. 59(e) motion. Booker now appeals
both orders. We affirm.
We review de novo a district court’s order granting
summary judgment. Robinson v. Clipse, 602 F.3d 605, 607 (4th
Cir. 2010). Summary judgment shall be granted when “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). “At the summary judgment stage, facts must be viewed in
the light most favorable to the nonmoving party only if there is
a genuine dispute as to those facts.” Scott v. Harris, 550 U.S.
372, 380 (2007) (internal quotation marks omitted). A district
court should grant summary judgment unless a reasonable jury
could return a verdict for the nonmoving party on the evidence
presented. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249
(1986). “Conclusory or speculative allegations do not suffice,
3
nor does a mere scintilla of evidence in support of [the
nonmoving party’s] case.” Thompson v. Potomac Elec. Power Co.,
312 F.3d 645, 649 (4th Cir. 2002) (internal quotation marks
omitted).
Booker claimed that Peeples violated his due process
rights by taking emergency custody of J.J. in the absence of
prior notice, a court order, or exigent circumstances. However,
having carefully reviewed the record, we conclude that Peeples
had an appropriately founded belief that J.J. and her siblings
were in immediate danger, namely of being re-exposed to
narcotics by their mother or other family members. See Weller
v. Dep’t of Soc. Servs. for the City of Balt., 901 F.2d 387,
391-92 (4th Cir. 1990). Under such circumstances, no prior
notice of the emergency removal was required. Id.
Further, we agree with the district court that
Sullivan was entitled to absolute immunity from Booker’s claim
that she made intentional misstatements when preparing and
presenting a petition for J.J.’s retention in SCDSS’s custody.
Vosburg v. Dep’t of Soc. Servs., 884 F.2d 133, 138 (4th Cir.
1989). Although not addressed by the district court, we also
conclude that Sullivan’s absolute immunity extends to her
alleged failure to notify Booker of J.J.’s removal and the
resulting probable cause hearing. See Pusey v. City of
Youngstown, 11 F.3d 652, 658-59 (6th Cir. 1993); see also
4
Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir.
1992).
Finally, we conclude that Booker’s claims regarding
Childs’ conduct in the wake of J.J.’s removal failed to suggest
a violation of his substantive due process rights and,
therefore, that Childs was rightly granted qualified immunity.
To survive summary judgment, Booker was required to produce
evidence that Childs was more than merely negligent but,
instead, unjustifiably intended to injure Booker’s right to
maintain a relationship with J.J. See Huggins v. Prince
George’s Cnty., 683 F.3d 525, 535 (4th Cir. 2012); Patten v.
Nichols, 274 F.3d 829, 834 (4th Cir. 2001). Booker’s sparse,
factually unsupported allegations against Childs fell well
short.
Because the district court properly granted summary
judgment and did not abuse its discretion in denying Booker’s
Rule 59(e) motion, we affirm the district court’s orders. We
grant Booker’s motion for leave to file a supplemental pro se
brief and 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
5
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731 N.W.2d 384 (2007)
2007 WI App 130
STATE EX REL. OBRIECHT
v.
BARTOW[4]
No. 2006AP2094.
Wisconsin Court of Appeals.
March 8, 2007.
Unpublished Opinion. Affirmed.
NOTES
[4] Petition for Review Dismissed
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In the
United States Court of Appeals
For the Seventh Circuit
No. 99-1187
United States of America,
Plaintiff-Appellee,
v.
Marcus O. Evans,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Western Division.
No. 93 CR 20024--Philip G. Reinhard, Judge.
Submitted July 28, 2000--Decided August 18, 2000
Before Posner, Easterbrook, and Diane P. Wood, Circuit
Judges.
Easterbrook, Circuit Judge. This appeal presents
the question whether a motion for a new trial,
purportedly based on Fed. R. Crim. P. 33, is a
collateral attack on a criminal judgment, and
therefore subject to the rule that advance
appellate approval is required to initiate a
successive collateral attack. 28 U.S.C. sec.2255
para.8. Two of our decisions--United States v.
Woods, 169 F.3d 1077 (7th Cir. 1999), and
O’Connor v. United States, 133 F.3d 548 (7th Cir.
1998)--reserve this question for future decision.
The future is now, and we hold that any post-
judgment motion in a criminal proceeding that
fits the description of sec.2255 para.1 is a
motion under sec.2255, and that the second (and
all subsequent) of these requires appellate
approval. For this purpose the caption that the
defendant puts on the motion is irrelevant; a
federal prisoner may not use Rule 33 to avoid
sec.2255 para.8. But a genuine claim of newly
discovered evidence tending to show innocence is
not within sec.2255 para.1 and therefore does not
require prior appellate approval, even if the
prisoner has litigated and lost a collateral
attack under sec.2255.
Section 2255 para.8 and 28 U.S.C. sec.2244(b),
both enacted in 1996 as part of the Antiterrorism
and Effective Death Penalty Act, replace the
doctrine of abuse-of-the-writ with a statutory
formula for successive collateral attacks.
Paragraph 8 says that "a second or successive
motion" is subject to this screening mechanism,
but the simplicity of the phrase is deceptive.
Does this mean any successive motion, so that a
new motion after the first was dismissed on
procedural grounds, is subject to prior screening
(and the stringent substantive limits)? A
substantial body of opinions have been devoted to
the question what counts as a collateral attack
for this purpose. E.g., Slack v. McDaniel, 120 S.
Ct. 1595 (2000); Stewart v. Martinez-Villareal,
523 U.S. 637 (1998); Calderon v. Thompson, 523
U.S. 538 (1998); Potts v. United States, 210 F.3d
770 (7th Cir. 2000); Gray-Bey v. United States,
209 F.3d 986 (7th Cir. 2000); In re Page, 179
F.3d 1024 (7th Cir. 1999); Benton v. Washington,
106 F.3d 162 (7th Cir. 1996); Burris v. Parke, 95
F.3d 465 (7th Cir. 1996) (en banc). Many of these
decisions try to cope with procedural
complexities--motions dismissed as premature or
otherwise irregular procedurally. But a few
address the substantive question: what
distinguishes a motion under sec.2255 (or
sec.2254), and thus countable under sec.2244(b)
and sec.2255 para.8, from other post-verdict
motions in a criminal case? Take Rule 33, which
provides:
On a defendant’s motion, the court may grant a
new trial to that defendant if the interests of
justice so require. . . . A motion for new trial
based on newly discovered evidence may be made
only within three years after the verdict or
finding of guilty. . . . A motion for a new trial
based on any other grounds may be made only
within 7 days after the verdict or finding of
guilty or within such further time as the court
may fix during the 7-day period.
No one supposes, for example, that a motion under
the last sentence, filed within 7 days of the
jury’s verdict, is a collateral attack that
subjects any later sec.2255 motion to the
appellate screening mechanism. Yet Rule 33 also
authorizes new-trial motions as late as three
years after the verdict, which often will be
later than the period of limitations for motions
under sec.2255 para.6. These deferred motions are
a form of collateral attack even when they seek
to vindicate "the interests of justice" rather
than any constitutional norm, and as in this case
some Rule 33 motions may be indistinguishable
from successive motions under sec.2255.
Evans was sentenced to life imprisonment for
his role in a large-scale, long-running cocaine
distribution operation. On direct appeal we
affirmed his conviction and sentence. United
States v. Evans, 92 F.3d 540 (7th Cir. 1996).
Evans then filed a motion under sec.2255
specifying twelve grounds on which, he believed,
he was entitled to collateral relief. The
district court denied the motion, and we declined
to issue a certificate of appealability. Evans v.
United States, No. 98-3870 (7th Cir. Apr. 30,
1999) (unpublished order). Meanwhile Evans filed
his motion under Rule 33, seeking a new trial on
the basis of what he called "newly discovered
evidence"--that the prosecution had withheld
until after the end of his trial information that
his lawyer might have used to impeach Melvin
Jones, one of the witnesses against him. Delay in
disclosing this information violated the due
process clause and entitled him to a new trial,
if not to dismissal of the indictment, Evans
insisted. See Brady v. Maryland, 373 U.S. 83
(1963). Evans also contended that he is entitled
to a new trial because the prosecution’s use of
witnesses who expected lenience in exchange for
their testimony violated federal law. See United
States v. Singleton, 144 F.3d 1343 (10th Cir.
1998), reversed en banc, 165 F.3d 1297 (1999),
and disapproved by United States v. Condon, 170
F.3d 687 (7th Cir. 1999). Evans had tried to add
the Brady claim to his sec.2255 proceeding, but
the district judge declined to allow him to amend
his motion; the Singleton claim was new. But both
the Brady claim and the Singleton claim readily
could have been presented under sec.2255. Both
fit the description in sec.2255 para.1:
A prisoner in custody under sentence of a court
established by Act of Congress claiming the right
to be released upon the ground that the sentence
was imposed in violation of the Constitution or
laws of the United States, or that the court was
without jurisdiction to impose such sentence, or
that the sentence was in excess of the maximum
authorized by law, or is otherwise subject to
collateral attack, may move the court which
imposed the sentence to vacate, set aside or
correct the sentence.
If a motion within the scope of sec.2255 para.1
is the kind of "motion" to which sec.2255 para.8
refers, then Evans’s motion was a second or
successive collateral attack requiring this
court’s prior approval. Without considering the
possibility that he was looking at a second
collateral attack, the district judge denied
Evans’s motion on the merits (and redundantly
held that it was untimely). When Evans sought
leave to proceed on appeal in forma pauperis, we
directed the parties to file memoranda addressing
the question whether the district judge had
jurisdiction to entertain the motion at all.
These memoranda have been received, and the case
is ready for decision.
It is awfully hard to see how the "motion" to
which sec.2255 para.8 refers could be anything
other than a motion fitting the description of
para.1. This is how we understood matters in
Romandine v. United States, 206 F.3d 731, 734-36
(7th Cir. 2000), and Valona v. United States, 138
F.3d 693, 694 (7th Cir. 1998); the approach those
opinions take is generalizable: any motion filed
after the expiration of the time for direct
appeal, and invoking grounds mentioned in
sec.2255 para.1, is a collateral attack for
purposes of para.8. The qualification relating to
the time for appeal is important, because issues
presented to the district court in time for
inclusion on direct appeal are not collateral
attacks on a judgment. Reading sec.2255 para.8 in
this manner treats likes alike. Any other
approach enables prisoners to defeat the AEDPA by
changing the captions on their papers and
proceeding as if the Act did not exist. But, as
Romandine added, a corollary is that proceedings
that do not meet the description of sec.2255
para.1 are not motions for purposes of para.8,
even if they otherwise walk and talk like
collateral attacks. A bona fide motion for a new
trial on the basis of newly discovered evidence
falls outside sec.2255 para.1 because it does not
contend that the conviction or sentence violates
the Constitution or any statute. We know from
Herrera v. Collins, 506 U.S. 390 (1993), that a
conviction does not violate the Constitution (or
become otherwise subject to collateral attack)
just because newly discovered evidence implies
that the defendant is innocent. See also Guinan
v. United States, 6 F.3d 468, 470-71 (7th Cir.
1993) (observing that a Rule 33 motion is
designed to rectify factual injustice, not to
correct legal error). The Constitution guarantees
a trial designed to separate the guilty from the
innocent; it does not ensure that these
procedures always work. Like most states, the
federal government provides a window during which
prisoners may present newly discovered evidence,
leading to new trials in the interest of justice,
even though the Constitution does not require
this procedure. The only significance of newly
discovered evidence for genuine collateral
attacks, Herrera holds, is that
a petitioner otherwise subject to defenses of
abusive or successive use of the writ may have
his federal constitutional claim considered on
the merits if he makes a proper showing of actual
innocence. This rule, or fundamental miscarriage
of justice exception, is grounded in the
"equitable discretion" of habeas courts to see
that federal constitutional errors do not result
in the incarceration of innocent persons. But
this body of our habeas jurisprudence makes clear
that a claim of "actual innocence" is not itself
a constitutional claim, but instead a gateway
through which a habeas petitioner must pass to
have his otherwise barred constitutional claim
considered on the merits.
506 U.S. at 404 (citation omitted). The AEDPA
supersedes the common-law equitable discretion to
which Herrera refers but likewise allows actual
innocence to open the door to a successive
collateral attack. See sec.2244(b)(2)(B),
sec.2255 para.8(1).
Because a claim of innocence based on newly
discovered evidence is not itself a ground of
collateral attack, the AEDPA does not affect the
operation of (or three-year window to file) bona
fide motions under Rule 33. A defendant whose
argument is not that newly discovered evidence
supports a claim of innocence, but instead that
he has new evidence of a constitutional violation
or other ground of collateral attack, is making
a motion under sec.2255 (or sec.2254) no matter
what caption he puts on the document. This is the
burden of Evans’s motion. He claimed to have
evidence of a Brady problem, not evidence
demonstrating his innocence. (What is more, his
evidence suggesting a Brady problem was not
"newly discovered." Evans’s lawyer learned after
trial, but before sentencing, that Melvin Jones
was a drug user and was featured in a police
report as a suspect in an armed robbery; these
matters might have been useful in impeachment,
and thus set the stage for a Brady argument, but
by the time Evans had been sentenced they were no
longer "newly discovered.") The panel decision in
Singleton may have been "newly discovered" but it
was not "evidence" and again was only
tangentially related to innocence. Both the Brady
claim and the Singleton claim are classic grounds
of collateral attack. They fall within sec.2255
para.1 and, because Evans already has had a
collateral attack, they may be pursued only with
advance appellate approval. The district court
accordingly lacked jurisdiction to entertain
Evans’s motion.
One caveat is in order. Our case is easy
because Evans filed a motion explicitly under
sec.2255, then tried to evade the limitations on
successive motions by placing a Rule 33 caption
on his next collateral attack. Suppose the
sequence had been reversed: a motion nominally
under Rule 33 but actually making Brady and
Singleton claims, followed by an avowed sec.2255
motion. Should the district judge recharacterize
the Rule 33 motion in retrospect as one under
sec.2255 and then dismiss the express sec.2255
motion? Like at least two other circuits, see
United States v. Miller, 197 F.3d 644 (3d Cir.
1999); Adams v. United States, 155 F.3d 582 (2d
Cir. 1998), we have been reluctant to allow
district judges to convert one kind of motion
into another with different procedural effects
under the AEDPA and its cousin the Prison
Litigation Reform Act. See, e.g., Valona, 138
F.3d at 694-95; Moore v. Pemberton, 110 F.3d 22
(7th Cir. 1997); Copus v. Edgerton, 96 F.3d 1038
(7th Cir. 1996). When a prisoner who has yet to
file a motion under sec.2255 invokes Rule 33 but
presents issues substantively within sec.2255
para.1, the district judge should alert the
movant that this can preclude any later
collateral proceedings and ask whether the
prisoner wishes to withdraw the claim (or add any
other arguments for collateral relief). We
postpone, until the occasion requires, deciding
what should happen if the district judge fails to
deliver that advice, denies the Rule 33 motion on
the merits, and the prisoner then files what
would otherwise be a timely sec.2255 petition.
The judgment of the district court is vacated,
and the case is remanded with instructions to
dismiss for want of jurisdiction. Nunez v. United
States, 96 F.3d 990 (7th Cir. 1996). Treating
Evans’s papers as an implied application for
leave to commence a second collateral attack, we
deny the application. Evans does not point to any
new rule of constitutional law made retroactive
by the Supreme Court, sec.2255 para.8(2), and
although he uses the phrase "newly discovered
evidence" he does not contend that this is "newly
discovered evidence that, if proven and viewed in
light of the evidence as a whole, would be
sufficient to establish by clear and convincing
evidence that no reasonable factfinder would have
found [him] guilty of the offense", sec.2255
para.8(1). Evans therefore is not entitled to a
second round of collateral review.
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636 So.2d 1 (1993)
S.A.
v.
THOMASVILLE HOSPITAL and Dr. James Prescott.
1911938.
Supreme Court of Alabama.
August 27, 1993.
Larry C. Moorer, Mobile, and William M. Pompey, Camden, for appellant.
Davis Carr and James W. Lampkin II of Pierce, Carr & Alford, P.C., Mobile, for Thomasville Hosp.
W. Boyd Reeves and Tara T. Bostick of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, Mobile, for Dr. James Prescott.
ADAMS, Justice.
The plaintiff, S.A., appeals a summary judgment entered in favor of Dr. John Prescott and Thomasville Hospital. She alleges that at 5 to 6 months into a pregnancy she consulted Dr. Prescott about performing an elective abortion on her. According to her, he agreed; however, she contends that she was never informed by Dr. Prescott or the hospital of the potential risks involved in having an abortion and that, had she been so informed, she would not have consented to the procedure. She alleges that during the elective abortion procedure she began hemorrhaging and that another operation was thereafter performed to stop the bleeding. Eventually, she alleged, when the bleeding did not cease, she was flown to the University of South Alabama Hospital (USA), where she says a hysterectomy was ultimately performed.
The defendants offer a different version of the facts. They contend that S.A. presented herself at the hospital with vaginal bleeding and was in the process of an incomplete abortion. The medical records indicate that portions of the placenta and a fetal leg were already in S.A.'s vagina at the time it was determined that a dilation and curretage procedure (D & C) should be performed. During the procedure, according to the hospital and the doctor, S.A. began to hemorrhage and a second procedure was done to try to stop the hemorrhaging, and after several transfusions of blood she was flown to USA hospital. According to the hospital and the doctor, S.A. signed consent forms for the *2 dilation and curretage, as well as for the second procedure done to attempt to stop the bleeding. Those consent forms were in S.A.'s medical file.[1]
In support of their motions for summary judgment, Dr. Prescott and Thomasville Hospital offered Dr. Prescott's affidavit stating that he had not breached the standard of care with regard to S.A. His affidavit was accompanied by hospital records detailing the events preceding her D & C. The hospital records coincide with Dr. Prescott's and the hospital's version of the facts. Although Rudolph v. Lindsay, 626 So.2d 1278, 1281 (Ala.1993), states that the unsupported assertion that "I did not breach the standard of care" will not shift the burden of proof to the plaintiff, in this case, Dr. Prescott's affidavit was accompanied by hospital records sufficient to shift the burden of proof to S.A. to offer evidence creating a genuine issue of material fact and indicating that the defendants were not entitled to a judgment as a matter of law. See Terry v. City of Decatur, 601 So.2d 949 (Ala.1992). S.A. offered her own affidavit; however, she offered no expert testimony as to the breach of the standard of care.
S.A. was allowed an extension in order to find an expert to support her contention that Dr. Prescott and Thomasville Hospital had breached the standard of care. She failed to do so. Although she did offer the deposition testimony of a doctor, that doctor, when asked about informing patients of the potential risks of surgery, stated, "I can't say what is normal among the medical community." In addition, the doctor stated that the hospital records shown to him did not describe an elective abortion as asserted by the plaintiff but, rather, described an incomplete abortion as asserted by the defendants. The trial judge found the deposition offered by S.A. insufficient to withstand a motion for summary judgment, and this Court agrees.
Therefore, the judgment of the trial court is hereby affirmed.
AFFIRMED.
HOUSTON, KENNEDY and INGRAM, JJ., concur.
ALMON and SHORES, JJ., concur specially.
MADDOX and STEAGALL, JJ., concur in the result.
ALMON, Justice (concurring specially).
I agree that the defendants presented sufficient evidence in support of their summary judgment motion and that the plaintiff failed to present sufficient evidence in opposition. The plaintiff's expert would not testify that he was familiar with the standard of care regarding the risks of which a person should be apprised when seeking an abortion; he did not testify that the defendants breached the standard of care in obtaining S.A.'s consent; and he testified that he would not apprise his patients of the risk of hysterectomy or sterilization "in such elaborate details in all patients." Thus, I concur in the affirmance of the summary judgment. In respect to the majority opinion's citations to Pruitt v. Zeiger, 590 So.2d 236 (Ala.1991), and Rudolph v. Lindsay, 626 So.2d 1278 (Ala.1993), I continue to hold the views expressed in my special concurrence in Rudolph v. Lindsay.
SHORES, J., concurs.
NOTES
[1] S.A. states that she did not sign the forms until the procedure was well under way and problems arose. She alleges that a nurse came to her and told her that her signature was required.
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705 N.W.2d 507 (2005)
STATE v. PENNEY
No. 05-0291.
Court of Appeals of Iowa.
September 14, 2005.
Decision without published opinion. Affirmed.
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331 Md. 317 (1993)
628 A.2d 178
ATTORNEY GRIEVANCE COMMISSION OF MARYLAND
v.
GEORGE F. DAVID, IV.
Misc. Docket (Subtitle BV) No. 36, September Term, 1992.
Court of Appeals of Maryland.
July 27, 1993.
Melvin Hirshman, Bar Counsel and Glenn M. Grossman, Assistant Bar Counsel for the Attorney Grievance Commission of Maryland, argued for petitioner.
Herschel Milliken, Baltimore, argued for respondent.
Argued before MURPHY, C.J., and ELDRIDGE, RODOWSKY, McAULIFFE, CHASANOW, KARWACKI and ROBERT M. BELL, JJ.
McAULIFFE, Judge.
Respondent George Franklin David IV was admitted to the Bar of the State of Maryland on 9 December 1982. He maintains a solo, general practice in Baltimore. The events leading up to the present disciplinary action occurred between 1990 and 1992 and involve respondent's handling of the cases of four former clients.
Petitioner Attorney Grievance Commission (AGC) commenced the present disciplinary action after receiving several complaints from former clients of respondent. The AGC filed a Petition for Disciplinary Action against him in this Court on 19 October 1992. We entered an order transmitting the charges to the Circuit Court for Baltimore City for hearing by Judge David Ross, and we directed that respondent file an answer within 15 days of service of the charges upon him. Respondent did not file a timely answer to the petition, and Judge Ross entered an order of default.
A hearing was held before Judge Ross on 25 January 1993. Respondent's counsel attended the hearing, but respondent did not. Respondent moved to vacate the default order, but Judge Ross denied the motion as untimely. Respondent's counsel requested a continuance to allow the respondent to be present, on the grounds that he "was unable to be here today." Judge Ross also denied respondent's motion for a continuance. Judge Ross accepted all of petitioner's requests for admissions of fact and genuineness of documents, with the express consent of counsel for the respondent.
In a memorandum opinion dated 26 January 1993, Judge Ross addressed separately respondent's actions as to each of the four complainants. Judge Ross made the following conclusions of law:
1) With respect to the complaint of Michelle Perdue, respondent violated Rules of Professional Conduct 1.3, 1.4(a), 1.5(a)(1) through (8), 1.16(d), 8.1(a) and (b), 8.4(a), (c) and (d).
2) With respect to the complaint of Gail Moses-Kareri, respondent violated Rules 1.1, 1.3, 1.4(a), 1.15(b), 5.3(b) and (c)(1) and (2), 8.1(b), 8.4(a) and (d).
3) With respect to the complaint of Pamela Barnes, respondent violated Rules 1.3, 1.4(a), 8.1(b), 8.4(a) and (d).
4) With respect to the complaint of Theresa Telp, respondent violated Rules 1.3, 1.4(a), 5.3(b), 8.4(a) and (d).
Neither party filed exceptions to Judge Ross' findings of fact and conclusions of law. Respondent appeared by counsel in this Court to request that the sanction be limited to a reprimand, or in the event of a suspension, that payment of costs be waived. We briefly review the facts of the four cases which resulted in this disciplinary action.
COMPLAINT OF MICHELLE PERDUE
Ms. Michelle Perdue retained the respondent in June of 1991 to represent her in a domestic relations case. She paid the respondent $750 as a retainer on 14 June 1991. Respondent promised Ms. Perdue that he would prepare some papers for her signature by 18 June. Ms. Perdue called the respondent's office every day for a two week period beginning on 18 June, and was repeatedly told that respondent was not available and that the papers were not completed.
Respondent was notified that a hearing on Ms. Perdue's domestic relations case was scheduled for August of 1991. He did not inform Ms. Perdue of the court date, nor did he file his appearance with the court. When Ms. Perdue's case was postponed, she discharged respondent and retained new counsel. Ms. Perdue requested the return of her $750 fee on that date, but respondent did not refund this sum until his Inquiry Panel Hearing on 13 March 1992.
After respondent was discharged, Ms. Perdue and her new attorney attempted to contact him about her case. Respondent did not answer their letters nor return their telephone calls. He also did not respond in a timely fashion to three letters from the AGC concerning Ms. Perdue's complaint. When respondent did contact the AGC by letter dated 3 September 1991, he alleged that Ms. Perdue was already represented by another attorney when she approached him about representing her in her domestic relations case. In fact, the record reflects that Ms. Perdue had discharged her previous attorney before contacting respondent.
COMPLAINT OF GAIL MOSES-KARERI
Ms. Gail Moses-Kareri was injured in an automobile accident in April 1990. She contacted respondent about representing her in connection with claims arising out of this accident. On 5 June 1990, she met with respondent's paralegal, Ted Brown, and signed a retainer agreement engaging respondent as her counsel. Ms. Moses-Kareri also signed medical and lost wage authorizations at that time, and provided Mr. Brown with all relevant information about the accident, including the other vehicles involved and her own insurance data. Ms. Moses-Kareri gave Mr. Brown a copy of the personal injury protection (PIP) form she had already submitted to her insurance carrier, Allstate Insurance Company (Allstate).
Respondent wrote letters to Allstate and the United States Postal Service, Ms. Moses-Kareri's employer, informing them that he would be representing her in claims arising out of the accident. Respondent also requested a police report of the accident. He did not contact the insurance carrier of the party responsible for the accident, nor did he take any other substantive action on the case. Respondent did not pursue any party responsible for his client's injuries or property damage. Respondent received a check from Allstate in the amount of $2,480.04, representing the partial settlement of Ms. Moses-Kareri's claim for personal injury protection benefits arising out of her accident. Respondent endorsed the check in the name of Ms. Moses-Kareri and deposited it in his escrow account in October of 1990. Respondent never informed Ms. Moses-Kareri of the receipt of this check and did not pay her medical bills nor reimburse her for lost wages.[1] Respondent also did not contact her regarding the status of her claim.
When Ms. Kareri discovered through her own investigations that Allstate had sent respondent a check, she attempted to contact him numerous times by mail and telephone, and visited his office to speak with him. Respondent admitted in his testimony before the Inquiry Panel that he never returned any of Ms. Moses-Kareri's calls before 1991. Respondent eventually remitted a check in the amount of $2,480.04 to Ms. Moses-Kareri on 8 July 1991, almost nine months after he received that amount from her insurance carrier.
The AGC docketed a complaint against respondent as a result of two letters written by Ms. Moses-Kareri. In a letter dated 7 August 1991, the AGC ordered respondent to address in writing the charges against him within fifteen days. Specifically, petitioner requested documentation that the check received on behalf of Ms. Moses-Kareri from her insurance company was retained in escrow from the date of deposit until the time he turned that amount over to her, and a detailed accounting of the services performed on her behalf.
Respondent ignored this letter, and another was sent on 29 August 1991, demanding a reply within ten days. When respondent did contact the AGC by letter dated 3 September 1991, he failed to produce the requested documentation regarding his escrow account and did not provide a detailed account of the work done in pursuit of Ms. Moses-Kareri's claim. Respondent similarly ignored three subsequent inquiries by the AGC requesting verification of the date on which he had asked Ms. Moses-Kareri to pick up her PIP benefits, and demanding that respondent forward the bank records for his escrow account. At his hearing before the Inquiry Panel on 13 March 1992, respondent testified that he had no explanation for his failure to provide his bank records to the AGC:
BAR COUNSEL: What is your explanation for not responding to at least Bar Counsel # 7, the October 9 letter?
RESPONDENT: I have no explanation for that. By the October 9 letter, I had already sent the bank records. My assumption was they had been received.
BAR COUNSEL: Wouldn't your assumption be rebutted by a letter like that?
RESPONDENT: It should be.
COMPLAINT OF PAMELA BARNES
Ms. Pamela Barnes approached respondent about representing her in claims arising out of an automobile accident in January 1990 in which she sustained injuries. Ms. Barnes retained respondent when her original attorney, Mr. Wendall Grier, was suspended from the practice of law in Maryland during the course of his pursuit of her claims.
In December 1990, Ms. Barnes executed a release authorizing respondent to obtain her case file from Mr. Grier. At that time, she also gave respondent all pertinent insurance information. Respondent never attempted to obtain Ms. Barnes' file from her previous attorney, nor did he take any substantive action in pursuit of her claims. Respondent failed to return Ms. Barnes' phone calls and her written correspondence, and did not keep her apprised of the status of her case.
Because of respondent's failure to communicate with her, Ms. Barnes engaged the services of another attorney, Mr. Stanley H. Miller. By letter dated 19 September 1991, Mr. Miller noted his and Ms. Barnes' previous oral and written inquiries concerning Ms. Barnes' file, and again requested that respondent contact Mr. Miller regarding her claim. Respondent admitted in his testimony before the Inquiry Panel that he never responded to Mr. Miller's letter. Respondent also failed to respond to two written inquiries by the AGC regarding Ms. Barnes' complaint.
COMPLAINT OF THERESA TELP
On 29 October 1991, Ms. Theresa Telp contacted respondent by telephone about representing her in an uncontested divorce. Ms. Telp arranged to meet with respondent that afternoon at his office. When she arrived there at the designated time, respondent called to inform her that he would not be able to meet with her that day, but instructed Ms. Telp to leave $470.00 with his secretary as his fee for representing her in the divorce proceedings.
Ms. Telp paid $300.00 that day and returned on 1 November with the balance of $170.00. On that date, she executed a complaint for divorce which respondent had prepared for her signature. A few weeks later, Ms. Telp called respondent's office to check on the status of her case and was told by respondent's secretary that her complaint had been filed. In fact, respondent did not file Ms. Telp's complaint for divorce until 11 December 1991, almost six weeks later.
Upon learning from her husband on 15 November that he had not yet been served with divorce papers, Ms. Telp attempted to contact respondent numerous times at his office. Respondent did not return Ms. Telp's calls, nor did he keep her informed about the status of her case by other means. Ms. Telp filed a complaint against respondent with the AGC on 10 December 1991 which resulted in the present disciplinary action. Counsel for respondent informed this Court at oral argument that respondent has refunded half of the $470.00 fee paid by Ms. Telp, by mutual agreement.
SANCTION
As Bar Counsel points out, respondent's representation of these four clients was marked by serious neglect and inattention. Respondent failed to return a fee which was unearned for a period of nine months; he failed to timely remit funds he received on behalf of a client; he failed to communicate with his clients; and in connection with the investigation of three of the complaints, respondent failed to answer Bar Counsel's requests for information. The sanction we impose must provide adequate protection to the public and motivate respondent to adopt appropriate practices in the future. Accordingly, George F. David IV shall be indefinitely suspended from the practice of law, with the right to apply for reinstatement after the suspension has been in effect for six months. Respondent's reinstatement shall be conditioned upon his payment of all costs in this matter, and upon the monitoring of respondent's practice for a period of not less than two years by a monitor approved by Bar Counsel and by this Court. The suspension shall be effective 15 days from the filing of this opinion.
IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BY THE CLERK OF THIS COURT, INCLUDING COSTS OF ALL TRANSCRIPTS, PURSUANT TO MARYLAND RULE BV 15c, FOR WHICH SUM JUDGMENT IS ENTERED IN FAVOR OF THE ATTORNEY GRIEVANCE COMMISSION AGAINST GEORGE F. DAVID IV.
NOTES
[1] A paralegal employed by respondent sent Ms. Moses-Kareri a letter dated 19 August 1990 alleging that respondent had learned that she had settled her case without notifying his office, and that she should check with him to collect any money received on her behalf from the insurer. Respondent never affirmatively notified Ms. Moses-Kareri on his own initiative that he had received monies on her behalf.
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MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Jul 09 2019, 5:38 am
court except for the purpose of establishing CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
estoppel, or the law of the case. and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Curtis T. Hill, Jr. Mark C. Webb
Attorney General of Indiana Tyler D. Helmond
Voyles Vaiana Lukemeyer Baldwin
Natalie F. Weiss & Webb
Deputy Attorney General Indianapolis, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Indiana Alcohol and Tobacco July 9, 2019
Commission, Court of Appeals Case No.
Appellant-Respondent, 18A-MI-2522
Appeal from the Marion Superior
v. Court
The Honorable Tim Oakes, Judge
PNC Bancorp, LLC, Trial Court Cause No.
Appellee-Petitioner. 49D02-1801-MI-898
Friedlander, Senior Judge.
[1] Appellant Indiana Alcohol and Tobacco Commission (the Commission) brings
this interlocutory appeal of the trial court’s denial of its motion to dismiss PNC
Court of Appeals of Indiana | Memorandum Decision 18A-MI-2522 | July 9, 2019 Page 1 of 6
Bancorp, LLC’s (PNC) amended petition for judicial review. Concluding that
PNC’s failure to timely file the agency record precludes judicial review of the
Commission’s decision, we reverse the trial court’s decision and remand for
further proceedings consistent with this opinion.
[2] The Commission denied PNC’s application for renewal of its permit to sell
alcoholic beverages. On January 9, 2018, PNC filed a petition for judicial
review of the Commission’s decision. Pursuant to statute, the agency record, or
a request for an extension of time to file the record, was due to be filed on or
before February 8. See Ind. Code § 4-21.5-5-13(a) (2004). This deadline passed
without PNC filing the record or requesting an extension of time.
[3] On February 21, PNC belatedly filed a motion for enlargement of time to file
the agency record. In response, the Commission filed a motion to dismiss
PNC’s petition arguing that PNC had failed to timely file either the agency
record or a request for an extension of time. The trial court denied the
Commission’s motion and granted PNC an extension of time through and
including March 31. PNC filed a second motion for enlargement of time to file
the record on March 29, which the Commission also opposed. The trial court
proceedings between the end of March and July are not entirely clear from the
record on appeal, but, during that time, PNC obtained new counsel.
[4] On July 23, PNC filed an amended petition for judicial review, to which it
attached the agency record. As before, the Commission filed a motion to
dismiss PNC’s petition, which the trial court denied. Upon the Commission’s
Court of Appeals of Indiana | Memorandum Decision 18A-MI-2522 | July 9, 2019 Page 2 of 6
motion, the court certified its order for interlocutory appeal, and this Court
granted the Commission’s motion to accept interlocutory jurisdiction.
[5] We review de novo a trial court’s ruling on a motion to dismiss for failure to
timely file necessary agency records where the court ruled on a paper record.
Teaching Our Posterity Success, Inc. v. Ind. Dep’t of Educ., 20 N.E.3d 149 (Ind.
2014).
[6] The Administrative Orders and Procedures Act (AOPA) governs the
proceedings and judicial review of decisions of the Commission. See Ind. Code
§§ 4-21.5-1-3 (1995) (providing that Commission is an agency under article
21.5), 4-21.5-2-0.1 (2011) (providing that article 21.5 governs all proceedings
and all proceedings for judicial review of agency action). A person aggrieved
by an action of the Commission may file a petition for review in the appropriate
trial court. See Ind. Code § 4-21.5-5-2 (1986).
[7] Once a petitioner has filed its petition for judicial review under Indiana Code
section 4-21.5-5-2, it must comply with the filing requirements for the agency
record. In that regard, Indiana Code section 4-21.5-5-13 provides in pertinent
part:
(a) Within thirty (30) days after the filing of the petition, or within
further time allowed by the court or by other law, the petitioner
shall transmit to the court the original or a certified copy of the
agency record for judicial review of the agency action . . . .
(b) An extension of time in which to file the record shall be
granted by the court for good cause shown. Inability to obtain
Court of Appeals of Indiana | Memorandum Decision 18A-MI-2522 | July 9, 2019 Page 3 of 6
the record from the responsible agency within the time permitted
by this section is good cause. Failure to file the record within the
time permitted by this subsection, including any extension period ordered
by the court, is cause for dismissal of the petition for review by the
court, on its own motion, or on petition of any party of record to
the proceeding.
(Emphasis added).
[8] Here, PNC filed its petition for judicial review of the Commission’s decision on
January 9, 2018. Thus, pursuant to Section 13, the agency record, or a request
for an extension of time to file the record, was due to be filed on or before
February 8. This deadline passed without PNC filing the record or a request for
more time. On February 21—thirteen days after the record was due to be
filed—PNC filed a motion for enlargement of time to file the record of
proceedings, which the trial court granted.
[9] On appeal, the Commission contends the trial court erred by not granting its
motion to dismiss PNC’s petition because PNC failed to timely file the record.
Citing Trial Rule 15, PNC claims its filing of an amended petition with the
agency record attached on July 23 relates back to the date of filing of its original
petition for judicial review, thus making its filing of the record timely.
Therefore, the crux of this appeal is: whether the AOPA required the court to
deny PNC’s petition for an extension of time to file the record when the petition
was filed after the time for filing the record or a request for an extension had
expired.
Court of Appeals of Indiana | Memorandum Decision 18A-MI-2522 | July 9, 2019 Page 4 of 6
[10] In Indiana Family and Social Services Administration v. Meyer, 927 N.E.2d 367
(Ind. 2010), our supreme court interpreted the AOPA requirement of filing the
agency record set forth in Indiana Code section 4-21.5-5-13. The court stated,
“We believe the statute is clear. The statute places on the petitioner the
responsibility to file the agency record timely. Although the statute allows a
petitioner to seek extensions of time from the trial court . . . the statute does not
excuse untimely filing or allow nunc pro tunc extensions.” Id. at 370. Further,
the trial court may grant a request for an extension under this section “only if
the request is made during the initial thirty days following the filing of the
petition for review or within any previously granted extension.” Id. at 370-71.
Citing its decision in Meyer, the court more recently confirmed that trial courts
lack the “authority to extend the filing deadline for an agency record that was
not filed within the required statutory period or an authorized extension
thereof.” Teaching Our Posterity Success, Inc., 20 N.E.3d at 155. The court also
clearly established a bright-line approach to the filing of an agency record by
holding that a petitioner cannot obtain consideration of its petition where the
agency record, as defined by statute, has not been filed. Id.
[11] As confirmed by our supreme court, the statute plainly mandates that the
agency record or a motion for an extension of time must be filed within thirty
days of the filing of the petition, and the trial court may not extend this
statutory filing deadline or retroactively grant an extension. Accordingly, the
trial court in this case lacked the authority to grant PNC’s February 21 motion
for enlargement of time. Under the statute, PNC was required to file the
Court of Appeals of Indiana | Memorandum Decision 18A-MI-2522 | July 9, 2019 Page 5 of 6
agency record or file a motion for an extension of time by February 8, 2018; it
did not do so. Therefore, the trial court should have dismissed PNC’s petition
for judicial review.
[12] Finally, for the reasons explained above, we reject PNC’s claim under Trial
Rule 15 that the relation back doctrine cures the tardiness of the agency record
that it attached to its amended petition filed in July. Moreover, it has been
noted that after a filing deadline has passed, a party is not permitted to amend a
petition to cure its procedural defects. Town of Pittsboro Advisory Plan Comm’n v.
Ark Park, LLC, 26 N.E.3d 110 (Ind. Ct. App. 2015).
[13] Judgment reversed and remanded for further proceedings consistent with this
opinion.
Robb, J., and Bradford, J., concur.
Court of Appeals of Indiana | Memorandum Decision 18A-MI-2522 | July 9, 2019 Page 6 of 6
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88 Cal.App.2d 867 (1948)
THE PEOPLE, Respondent,
v.
PAUL BURNS, Appellant.
Crim. No. 4232.
California Court of Appeals. Second Dist., Div. Three.
Nov. 29, 1948.
William B. Neeley, Public Defender, and Al Matthews, Deputy Public Defender, for Appellant.
Fred N. Howser, Attorney General, Frank Richards, Deputy Attorney General, W. E. Simpson, District Attorney, Jere J. Sullivan and Robert Wheeler, Deputy District Attorneys, for Respondent.
VALLEE, J.
Defendant, Paul Burns, was charged by information and convicted by a jury of the offense denounced by Penal Code, section 273d, in that "on or about the 7th day of October, 1947," he did "wilfully, unlawfully and feloniously make an assault and inflict a corporal injury upon Joy Burns, who was then and there the wife of said Paul Burns, and that the said assault did result in a traumatic injury to said Joy Burns, a human being." The defendant made a motion for a new trial which was denied. He made application for probation which was granted, conditioned upon his serving the first 30 days of the probationary period in the county jail. He appealed from the order denying his motion for a new trial.
Penal Code, section 273d, so far as pertinent, provides: "Any husband who wilfully inflicts upon his wife corporal injury resulting in a traumatic condition, but not constituting a felonious assault or attempted murder, ... is nevertheless *869 guilty of a felony." The section was added to the Penal Code in 1945 (Stats. 1945, ch. 1312, 1).
Joy Burns testified that on October 7, 1947, the date alleged in the information as that upon which the offense was committed, she was living with the defendant, her husband, in an apartment in Los Angeles; that he hit her with his bedroom slipper. The defendant testified: On the morning of October 7, 1947, an argument with his wife occurred about the radio being on; at that time she tried to kick him; he then grabbed her foot to protect himself; there was a mark on his leg where she kicked him; he picked up his slipper and slapped her with it on the derriere, but did not hit her anywhere else; he did not recall how many blows were struck in that quarrel; they had breakfast and he left to find work. Defendant was taken into custody on the afternoon of October 7, 1947. The arresting officer testified that defendant was very intoxicated at the time of the arrest. Defendant admitted to Officer Weaver that on October 7, 1947, he had spanked his wife with a hairbrush after getting into an argument over the radio being turned on and that he had then gone out.
Joy Burns, without objection, also testified: During the evening of October 6, 1947, appellant came home very intoxicated; he did not recognize who she was; she was sitting on her bed, propped up with pillows, and he asked her if she would go out with him; she said no, that he should go to bed since he was in no condition to go out; there was a sort of brawl; she tried to get him ready for bed, he resented it and struck her more than twice with his closed hand on the back of the head; she also testified that in the brawl she received injuries on the right side of her face just below the mouth, on the left side of her body opposite the navel, on her left upper arm, some bruises on her left knee and a mark on the back of the neck and about the top of the hip bone.
A chiropractor testified: He visited Mrs. Burns in the late afternoon of October 7, 1947, and found her in bed; he examined her and found bruises on the right cheek, right shoulder, a black and blue spot over the right hip and right knee; her temperature was 99.6 and her pulse 90; she showed symptoms of slight shock; her reflexes were a little exaggerated; the pupillary reflexes were normal; there were no fractures or dislocations; she had a partial sublaxation of the right hip; he treated her three times for pains in the *870 head and in the neck. He stated that he had treated her for five years prior to that time and that during that period she had complained of fainting spells. Photographs taken of Mrs. Burns on October 8, 1947, show only superficial, minor contusions.
Defendant testified: He came home about 10:30 in the evening on October 6, 1947; he was not intoxicated, he only had had a couple of beers at 6 o'clock; he and his wife had an argument, but it did not get to the point where blows were inflicted; he did not strike his wife at all that night; he asked her, "Let's make up, I will take you out"; she said, "No," and talked him into staying home; they both went to bed but there was no striking or hitting and he did not touch her that night; he did not know how she received the marks shown in the photographs; she could have fallen down or fainted; he did not hit her. After his arrest defendant told Officer Weaver that he had not struck Mrs. Burns before the morning of October 7th, that he had just given her a mild spanking on that morning and gone out. The officer questioned him as to how his wife had received the bruises. He stated that he did not know, that he had never noticed them, and that he had never hit her hard enough to make them.
Appellant contends that the trial court committed prejudicial error in refusing to give the following instructions to the jury:
(1) "An assault is an unlawful attempt, coupled with a present ability, to commit a violent injury upon the person of another."
"The term 'violent injury', as used in this definition, does not require that the injury be a severe one, but includes any wrongful act committed by means of physical force against the person of another even though it entails no pain and leaves no mark."
"To constitute an assault, it is not necessary that any actual injury be inflicted, but if an injury is inflicted, that fact may be considered by the jury, in connection with all other evidence, in determining the nature of the assault."
(2) "You may find the defendant guilty of any offense, the commission of which is necessarily included in that with which he is charged, (or of an attempt to commit the offense,) if, in your judgment, the evidence supports such a verdict under my instructions. *871"
"To enable you to apply the foregoing instruction, if your findings of fact require you to do so, I instruct you that the offense of violation of section 273d of the Penal Code, of which the defendant is charged in the information, necessarily includes the crime(s) of assault, a misdemeanor."
(3) "If you find that the defendant was guilty of an offense included within the charge of the information (indictment), but entertain a reasonable doubt as to the degree of the crime of which he is guilty, it is your duty to convict him only of the lesser offense."
No instruction of any point covered in the foregoing instructions was given to the jury. Appellant argues that the crime of assault is necessarily included in the offense defined by Penal Code, section 273d, and that under the evidence the jury could have found the defendant guilty of "simple" assault. The attorney general concedes that the offense of "simple" assault defined by Penal Code, section 240, is necessarily included in the offense defined in section 273d. He argues that an instruction defining assault was not necessary.
Penal Code, section 1159 provides: "The jury may find the defendant guilty of any offense, the commission of which is necessarily included in that with which he is charged, or of an attempt to commit the offense." [1] It is elementary that the court should instruct the jury upon every material question upon which there is any evidence deserving of any consideration whatever. (People v. Quimby, 6 Cal.App. 482, 486 [92 P. 493]; People v. Foster, 79 Cal.App. 328, 337 [249 P. 231]; People v. Hill, 76 Cal.App.2d 330, 343 [173 P.2d 26].) [2] The fact that the evidence may not be of a character to inspire belief does not authorize the refusal of an instruction based thereon. (People v. Perkins, 75 Cal.App.2d 875, 881 [171 P.2d 919]; People v. Peete, 54 Cal.App. 333, 356, 359 [202 P. 51]; People v. Wong Hing, 176 Cal. 699, 705-706 [169 P. 357].) That is a question within the exclusive province of the jury. However incredible the testimony of a defendant may be he is entitled to an instruction based upon the hypothesis that it is entirely true. (People v. Perkins, supra, p. 881; People v. Williamson, 6 Cal.App. 336, 339 [92 P. 313]; People v. Keefer, 65 Cal. 232, 234 [3 P. 818].) [3] It is the duty of the court to instruct the jury in regard to any included offense which the evidence tends to prove. (People v. Stofer, 3 Cal.App. 416, 418 [86 P. 734]; *872 People v. Carroll, 20 Cal.App. 41, 45 [128 P. 4]; People v. Wilson, 29 Cal.App. 563, 564 [156 P. 377]; People v. Mock Ming Fat, 82 Cal.App. 618 [256 P. 270]; People v. Driscoll, 53 Cal.App.2d 590, 593 [128 P.2d 382].) In People v. Carroll, supra, the court said (p. 45): "It is undoubtedly the rule that, where there is any evidence from which a reasonable inference may be drawn that the crime of which the defendant was convicted was of a lesser degree ... it is prejudicial error to withdraw from the jury the consideration of such evidence and confine the instructions to the crime [charged]." A similar situation to that in the case at bar was before the court in People v. Hickey, 109 Cal. 275 [41 P. 1027]. The defendant was charged with sodomy. The court first stated that "simple" assault may or may not be included in the offense of sodomy. It then held (p. 276): "It is further argued that the evidence discloses either a commission of the felony, or establishes that the defendant is wholly innocent. Possibly the evidence might support such conclusion if the prosecution had confined itself to facts occurring at a single time; but, for reasons not here perceptible, evidence was introduced as to circumstances of guilt arising upon two different occasions, and upon different days. The evidence failed to disclose the commission of a felony upon one of these occasions at least, but possibly disclosed a simple assault. By reason of these facts the principle of law presented is enveloped in some confusion. But section 220 of the Penal Code in terms recognizes the offense of assault with intent to commit the crime here charged, and a simple assault is a necessary element in the offense named in said section 220. From all the facts here disclosed we conclude the question of consent was an open one, which should have been presented to the jury; and, also, that the case was such that the question of assault likewise should have been submitted to the jury." Cases relied upon by the attorney general were cases where the evidence did not, upon any view of it, justify conviction of a lesser offense. They were cases where there was no room for a compromise verdict. They are not applicable to the record in this case.
[4] It is clear that the evidence which we have recited required the giving of the quoted instructions requested by defendant. Under the instructions as given the jury had only two alternatives, to return a verdict of guilty as charged or one of not guilty. There was evidence which would have warranted the jury in finding the defendant guilty of "simple" *873 assault. The evidence was not such as to make it clear that if the defendant was guilty at all, he was guilty of the higher offense charged. Under the well settled rule of law cited in the foregoing authorities it was prejudicial error to refuse the instructions.
[5] Appellant also contends that the court committed prejudicial error in not giving on its own motion an instruction defining the words "a traumatic condition" used in Penal Code, section 273d. The point is well taken. In order to convict the defendant of the offense charged it was incumbent on the prosecution to establish the existence of the following elements constituting the offense: (1) that the defendant and the victim are husband and wife; (2) that the defendant wilfully inflicted upon his wife corporal injury; and (3) that the corporal injury thus inflicted resulted in "a traumatic condition." The court instructed the jury that: "Any husband who wilfully inflicts upon his wife corporal injury resulting in a traumatic condition but not constituting a felonious assault or attempted murder, is guilty of the offense with which the defendant is here charged." It then defined the term "corporal injury" for them as follows: "Corporal injury is touching of the person of another against his will with physical force in an intentional, hostile and aggravated manner, or projecting of such force against his person." It did not define for them the third element of the offense "a traumatic condition." We are of the opinion that the court should have given, on its own motion, an instruction to the jury defining and advising them as to what, in contemplation of law, constitutes "a traumatic condition." "Trauma" has been defined as: "An abnormal condition of the living body produced by violence as distinguished from that produced by poisons, zymotic infection, bad habits, and other less evident causes; an injury or wound; any injury to the body caused by external violence; a wound; a wound or injury directly produced by causes external to the body; also the violence producing a wound or injury, the word generally implying physical force." (63 C.J. 804.) "Traumatic" has been defined as: "A term applied to wounds, caused by or resulting from a wound or any external injury, having to do with a wound or injury, of or pertaining to wounds, pertaining to or due to a wound or injury." (63 C.J. 804.) (See, also, 42 Words and Phrases perm. ed., pp. 387-391.) In Jellico Coal Co. v. Adkins, 197 Ky. 684 [247 S.W. 972], the court went extensively into the meaning of the word *874 "traumatic" [p. 974, 247 S.W.]: "The word 'trauma' is defined in Black's Legal Dictionary as a 'wound; any injury to the body caused by external violence.' And 'traumatic' is defined as 'caused by or resulting from a wound or any external injury.' In Webster's New International Dictionary, the word 'trauma' is defined as 'a wound or injury;' 'traumatic' as 'pertaining to or due to a wound or injury.' The Century Dictionary defines 'traumatic' to be 'an abnormal condition of the human body produced by external violence as distinguished from that produced by poisons, symotic infections, bad habits and other less evident causes.' Webster's Unabridged Dictionary defines 'traumatism' as 'a wound or injury directly produced by causes external to the body; also violence producing a wound or injury, as rupture of the stomach by traumatism.' " (See, also, Straight Creek Fuel Co. v. Hunt, 221 Ky. 265 [298 S.W. 686, 687]; Great Atlantic & Pacific Tea Co. v. Sexton, 242 Ky. 266 [46 S.W.2d 87, 89]; Cavalier v. Chevrolet Motor Co., 189 App.Div. 412 [178 N.Y.S. 489, 491]; Periss v. Nevada Industrial Commission, 55 Nev. 40 [24 P.2d 318].) In the Kentucky cases of Adkins and Hunt it was held that a traumatic injury was one resulting from external physical force. In the later Sexton case it was held that a traumatic injury may be produced by any external force whether physical or not. An examination of the cases cited in Corpus Juris and Words and Phrases reveals that there has been much controversy and litigation with respect to the meaning of "traumatic." The words, "a traumatic condition" are not commonplace words. We cannot say, as a matter of law, that their meaning is within the knowledge of jurors. The difficulty the legal profession and the courts have had with the meaning of the word "traumatic" clearly indicates that the term is a technical one. "The court should define legal and technical terms used in its instructions, but need not define commonplace words, especially in the absence of a request therefor." (8 Cal.Jur. 374, p. 327.) In People v. Malone, 82 Cal.App.2d 54, 69 [185 P.2d 870], we said: "The rule is that it is the duty of the court in criminal cases to give, sua sponte, instructions on the general principles of law pertinent to such cases where they are not proposed or presented in writing by the parties themselves. It is not the duty of the court to give such instructions upon specific points developed through the evidence introduced at the trial, unless such instructions are requested by the party desiring them. (People v. Warren, *875 16 Cal.2d 103, 116 [104 P.2d 1024]; People v. Bender, 27 Cal.2d 164, 175 [163 P.2d 8].)" (See, also, People v. Klor, 32 Cal.2d 658, 662 [197 P.2d 705].) An instruction defining "a traumatic condition" was on a principle of law pertaining to the offense charged. It was not on a point developed through the evidence introduced at the trial. It should have been given by the court on its own motion.
In view of the conclusions stated it is unnecessary to consider other points made by appellant for reversal.
Order reversed.
Wood, J., concurred.
SHINN, J.
I concur in the judgment because of error in failing to instruct on the included offense of assault. I agree that it would have been advisable to define the term "traumatic condition" but do not believe the omission was reversible error. The condition to which the evidence of injury related was a traumatic condition, whether it resulted from blows struck by defendant or was caused in some other manner. Only one condition of injury was described by the witnesses and this was of traumatic origin. The crucial question was not the nature of the injury, but the cause of it.
| {
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_________________________________________
)
DONALD J. TRUMP, et al. )
)
Plaintiffs, )
)
v. ) Case No. 19-cv-01136 (APM)
)
COMMITTEE ON OVERSIGHT AND )
REFORM OF THE U.S. HOUSE OF )
REPRESENTATIVES, et al. )
)
Defendants. )
_________________________________________ )
MEMORANDUM OPINION
I. INTRODUCTION
I do, therefore, . . . solemnly protest against these proceedings of the
House of Representatives, because they are in violation of the rights
of the coordinate executive branch of the Government, and
subversive of its constitutional independence; because they are
calculated to foster a band of interested parasites and informers,
ever ready, for their own advantage, to swear before ex parte
committees to pretended private conversations between the
President and themselves, incapable, from their nature, of being
disproved; thus furnishing material for harassing him, degrading
him in the eyes of the country . . .
- President James Buchanan 1
These words, written by President James Buchanan in March 1860, protested a resolution
adopted by the U.S. House of Representatives to form a committee—known as the Covode
Committee—to investigate whether the President or any other officer of the Executive Branch had
sought to influence the actions of Congress by improper means. See Buchanan at 218–21.
1
JAMES BUCHANAN, THE WORKS OF JAMES BUCHANAN VOLUME XII 225–26 (John Bassett Moore ed., J.B. Lippincott
Company) (1911) [hereinafter Buchanan].
Buchanan “cheerfully admitted” that the House of Representatives had the authority to make
inquiries “incident to their legislative duties,” as “necessary to enable them to discover and to
provide the appropriate legislative remedies for any abuses which may be ascertained.” Id. at 221.
But he objected to the Covode Committee’s investigation of his conduct. He maintained that the
House of Representatives possessed no general powers to investigate him, except when sitting as
an impeaching body. Id. Buchanan feared that, if the House were to exercise such authority, it
“would establish a precedent dangerous and embarrassing to all my successors, to whatever
political party they might be attached.” Id. at 226.
Some 160 years later, President Donald J. Trump has taken up the fight of his
predecessor. On April 15, 2019, the Committee on Oversight and Reform of the House of
Representatives issued a subpoena for records to Mazars USA LLP, a firm that has provided
accounting services to President Trump. The subpoena called for Mazars to produce financial
records and other documents relating to President Trump personally as well as various associated
businesses and entities dating back to 2011—years before he declared his candidacy for office.
The decision to issue the subpoena came about after the President’s former lawyer and confidant,
Michael Cohen, testified before the House Oversight Committee that the President routinely would
alter the estimated value of his assets and liabilities on financial statements, depending on the
purpose for which a statement was needed. For instance, Cohen said that the President provided
inflated financial statements to a bank to obtain a loan to purchase a National Football League
franchise. But when it came time to calculate his real estate taxes, the President would deflate the
value of certain assets. To support his accusations, Cohen produced financial statements from
2011, 2012, and 2013, at least two of which were prepared by Mazars.
2
Echoing the protests of President Buchanan, President Trump and his associated entities
are before this court, claiming that the Oversight Committee’s subpoena to Mazars exceeds the
Committee’s constitutional power to conduct investigations. The President argues that there is no
legislative purpose for the subpoena. The Oversight Committee’s true motive, the President
insists, is to collect personal information about him solely for political advantage. He asks the
court to declare the Mazars subpoena invalid and unenforceable.
Courts have grappled for more than a century with the question of the scope of Congress’s
investigative power. The binding principle that emerges from these judicial decisions is that courts
must presume Congress is acting in furtherance of its constitutional responsibility to legislate and
must defer to congressional judgments about what Congress needs to carry out that purpose. To be
sure, there are limits on Congress’s investigative authority. But those limits do not substantially
constrain Congress. So long as Congress investigates on a subject matter on which “legislation
could be had,” Congress acts as contemplated by Article I of the Constitution.
Applying those principles here compels the conclusion that President Trump cannot block
the subpoena to Mazars. According to the Oversight Committee, it believes that the requested
records will aid its consideration of strengthening ethics and disclosure laws, as well as amending
the penalties for violating such laws. The Committee also says that the records will assist in
monitoring the President’s compliance with the Foreign Emoluments Clause. These are facially
valid legislative purposes, and it is not for the court to question whether the Committee’s actions
are truly motivated by political considerations. Accordingly, the court will enter judgment in favor
of the Oversight Committee.
3
II. BACKGROUND
A. The 116th Congress and the House Oversight Committee
On January 3, 2019, the 116th Congress began with the Democratic Party controlling a
majority of seats in the U.S. House of Representatives. One of the House’s first actions was to
adopt the “Rules of the House of Representatives,” which govern proceedings during the two-year
term. This vote took place on January 9, 2019. 2 Rule X of the adopted House Rules, titled
“Organization of Committees,” establishes various standing committees and their respective
jurisdictions. 3 Among the standing committees with the broadest purview is the Committee on
Oversight and Reform (“Oversight Committee”). Its subject areas of primary jurisdiction range
from the lofty—“[o]verall economy, efficiency, and management of government operations”—to
the mundane—“[f]ederal paperwork reduction.” House Rules at 8. If there is a common thread
running through the subjects within the Oversight Committee’s jurisdiction, it is the oversight of
the operations and administration of the Executive Branch.
Each of the House’s standing committees possess “[g]eneral oversight responsibilities.”
Id. at 9. Those responsibilities are meant to assist the House in (1) “its analysis, appraisal, and
evaluation of” “the application, administration, execution, and effectiveness of Federal laws” and
(2) “conditions and circumstances that may indicate the necessity or desirability of enacting new
or additional legislation,” and (3) “its formulation, consideration, and enactment of changes in
Federal laws, and of such additional legislation as may be necessary or appropriate.” Id. Some of
the House’s standing committees have “[s]pecial oversight functions.” Id. at 10. The Oversight
2
Final Vote Results for Roll Call 19, Adopting the Rules of the House of Representatives for the One Hundredth
Sixteenth Congress, http://clerk.house.gov/evs/2019/roll019.xml (last visited May 20, 2019).
3
Rules of the House of Representatives, 116th Congress at 6 (Jan. 11, 2019),
https://rules.house.gov/sites/democrats.rules.house.gov/files/116-1/116-House-Rules-Clerk.pdf (last visited May 20,
2019) [hereinafter House Rules].
4
Committee is one of them. Its “special oversight function” is described as involving the “review
and study on a continuing basis the operation of Government activities at all levels, including the
Executive Office of the President.” Id. The Executive Office of the President consists of a small
group of federal agencies that most immediately aid the President on matters of policy, politics,
administration, and management. The President’s closest advisors typically are situated in the
Executive Office. 4
Rule X also vests the Oversight Committee with special authority to conduct investigations.
According to the Rule, “the Committee on Oversight and Reform may at any time conduct
investigations of any matter without regard to [other rules] conferring jurisdiction over the matter
to another standing committee.” House Rules at 11 (emphasis added). In other words, the
Oversight Committee is empowered to investigate as to any subject matter, even in those areas that
are expressly assigned to other committees. No other committee possesses such sweeping
investigative authority.
The Oversight Committee’s broad investigative power is not new. In each of the four
preceding Congresses—all controlled by the Republican Party, including during the final six years
of the Obama Administration—the House Oversight Committee enjoyed the same power “at any
time [to] conduct investigations of any matter.” 5
4
See generally Congressional Research Service, “The Executive Office of the President: An Historical Overview,”
Nov. 26, 2008, https://fas.org/sgp/crs/misc/98-606.pdf (last visited May 20, 2019).
5
Rules of the House of Representatives, 115th Congress at 505 (2017), https://www.govinfo.gov/content/pkg/HMAN-
115/pdf/HMAN-115.pdf, (last visited May 20, 2019); Rules of the House of Representatives, 114th Congress at 497
(2015), https://www.govinfo.gov/content/pkg/HMAN-114/pdf/HMAN-114.pdf (last visited May 20, 2019); Rules
of the House of Representatives, 113th Congress at 496 (2013), https://www.govinfo.gov/content/pkg/HMAN-
113/pdf/HMAN-113-houserules.pdf (last visited May 20, 2019); Rules of the House of Representatives, 112th
Congress at 492 (2011), https://www.govinfo.gov/content/pkg/HMAN-112/pdf/HMAN-112.pdf (last visited May 20,
2019).
5
B. The Oversight Committee’s Investigation
From the start of the 116th Congress, the Oversight Committee, now led by a Democrat,
moved aggressively to use its investigative powers. It did not adopt a resolution or issue a public
statement defining the scope of what it intended to investigate. Instead, it sent a series of letters
to the White House and elsewhere seeking various records regarding the President’s personal
finances, as well as records concerning his businesses and related entities. For instance, days
before the new Congress started, the incoming Chairman of the Oversight Committee,
Representative Elijah Cummings, wrote the President’s personal lawyer, Sheri Dillon, and the
Executive Vice President and Chief Compliance Counsel of the Trump Organization, George
Sorial, asking them to produce previously requested “documents regarding the Trump
Organization’s process for identifying payments from foreign governments and foreign-
government controlled entities . . .”6 In a different letter, the Chairman asked the General Services
Administration (“GSA”), the agency that manages federally owned and leased buildings, to
produce records concerning the federal government’s lease with the Trump Organization for the
Old Post Office Building, which houses the Trump International Hotel in Washington, D.C. 7
Chairman Cummings indicated that he sought these records for multiple reasons, including the
concern that the lease might violate the Constitution’s Emoluments Clauses. Cummings’ April
6
Letter from the Honorable Elijah E. Cummings, Ranking Member, House Comm. on Oversight & Reform, to Sheri
A. Dillon, Counsel to Donald Trump, and George A. Sorial, Exec. Vice President and Chief Compliance Counsel,
Trump Org. (Dec. 19, 2018), https://tinyurl.com/Dec19CummingsDillonLetter (last visited May 20, 2019).
7
Letter from the Honorable Elijah E. Cummings, Chairman, House Comm. on Oversight & Reform, et al., to Emily
Murphy, Administrator, Gen. Servs. Admin. (Apr. 12, 2019), https://tinyurl.com/Apr12CummingsHorneLetter (last
visited May 20, 2019) [hereinafter Cummings’ April 12th GSA Letter].
6
12th GSA Letter at 1. 8 These are but two examples of the types of records requests made by the
Oversight Committee at the start of the 116th Congress.
The investigative demand that sparked this lawsuit was issued on January 8, 2019. On that
day, Chairman Cummings wrote to Pat Cipollone, the White House Counsel, asking the President
to produce “documents related to President Trump’s reporting of debts and payments to his
personal attorney, Michael Cohen, to silence women alleging extramarital affairs with the
President before the election.” 9 The prior year, in May 2018, the Office of Government Ethics
had concluded that the President should have disclosed a payment made by Cohen as a liability on
the President’s public financial disclosure report. 10 Chairman Cummings noted in the January 8th
letter that the Oversight Committee “has jurisdiction over a wide range of matters, including the
Ethics in Government Act of 1978,” a law that requires “all federal officials, including the
President, to publicly disclose financial liabilities that could impact their decision-making.”
Cummings’ January 8th Letter at 1. On February 1, 2019, the White House Counsel responded to
8
This request for documents was not new. During the early months of the Trump Administration, Representative
Cummings, who was then the Ranking Member on the Oversight Committee, along with other Democratic members,
asked GSA to produce records regarding the Old Post Office lease. See Cummings v. Murphy, 321 F. Supp. 3d 92,
97–99 (D.D.C. 2018). When GSA did not cooperate, the Members brought a lawsuit to force it to disclose the records.
See generally id. This judge handled that very matter and ruled that the Democratic members lacked standing to bring
the case. See id. at 101–17. That decision is pending before the D.C. Circuit.
9
Letter from the Honorable Elijah E. Cummings, Chairman, House Comm. on Oversight & Reform, to Pat Cipollone,
White House Counsel (Jan. 8, 2019), https://tinyurl.com/Jan8CummingsCipolloneLetter (last visited May 20, 2019)
[hereinafter Cummings’ January 8th Letter]. Then-Ranking Member Cummings made a request for similar records in
September 2018, which went unanswered. See Letter from the Honorable Elijah E. Cummings, Ranking Member,
House Comm. on Oversight & Reform, to Donald F. McGahn II, White House Counsel, and George A. Sorial, Exec.
Vice President and Chief Compliance Counsel, Trump Org. (September 12, 2018),
https://oversight.house.gov/sites/democrats.oversight.house.gov/files/documents/2018-09-
12.EEC%20to%20McGahn-WH%20Sorial-
TrumpOrg%20re%20Financial%20Disclosures%20Cohen%20Payments.pdf (last visited May 20, 2019).
10
Letter from David J. Apol, Acting Dir., Office of Gov’t Ethics, to Rod J. Rosenstein, Deputy Att’y Gen., Dep’t of
Justice (May 16, 2018),
https://oge.gov/web/OGE.nsf/0/D323FD5ABB1FD2358525828F005F4888/$FILE/OGE%20Letter%20to%20DOJ%
20(posting).pdf (last visited May 20, 2019).
7
Chairman Cummings that the President was prepared to consider making some documents
available for review. 11
Chairman Cummings wrote the White House Counsel again on February 15, 2019. See
Cummings’ February 15th Letter. He opened by stating that, by his January 8th letter, “the
Committee launched an investigation into the failure of President Donald Trump to report
hundreds of thousands of dollars in payments and liabilities to his former attorney, Michael Cohen,
to silence women alleging extramarital affairs during the 2016 presidential campaign.” Id. at 1.
Chairman Cummings explained that “[t]he Committee’s interest in obtaining these documents is
even more critical in light of new documents obtained by the Committee from the Office of
Government Ethics (OGE) that describe false information provided by lawyers representing
President Trump . . . ” Id. The letter went on to detail a timeline of recent events starting with
statements made by the President’s lawyers to the Office of Government Ethics and to the public
about a supposed purpose of the Cohen payments unrelated to the election; followed by the
President’s disclosure of the Cohen payments on his 2017 Financial Disclosure form as a liability
of less than $250,000; and then revelations by federal prosecutors that the Cohen payments in fact
exceeded the $250,000 reported by the President. Id. at 2–6. In the end, Chairman Cummings
cited Congress’s “plenary authority to legislate and conduct oversight regarding compliance with
ethics laws and regulations” as the source of its authority to make the records demand, as well as
its “broad authority to legislate and conduct oversight on issues involving campaign finance.” Id.
at 7.
Letter from the Honorable Elijah E. Cummings, Chairman, House Comm. on Oversight & Reform, to Pat Cipollone,
11
White House Counsel at 1 (Feb. 15, 2019), https://tinyurl.com/Feb15CummingsCipolloneLetter [hereinafter
Cummings’ February 15th Letter].
8
C. Subpoena to Mazars USA LLP
On February 27, 2019, Michael Cohen appeared for a public hearing before the House
Oversight Committee. 12 By this time, Cohen had pleaded guilty to a host of federal felony charges,
including tax evasion, campaign finance violations, and making false statements to Congress. 13
During his testimony, Cohen alleged that financial statements prepared by the President’s
accountants falsely represented the President’s assets and liabilities. See Cohen Testimony at 13,
19. Specifically, Cohen stated that, in his experience, “Mr. Trump inflated his total assets when it
served his purposes . . . and deflated his assets to reduce his real estate taxes.” Id. Cohen supplied
the Oversight Committee with portions of the President’s Statements of Financial Condition from
2011, 2012, and 2013, some of which were signed by Mazars. 14
Following Cohen’s testimony, Chairman Cummings wrote to Mazars on March 20, 2019.
The letter first summarized aspects of Cohen’s testimony accusing the President of manipulating
financial statements to suit his purposes; it then identified a half-dozen questions about assets and
liabilities reflected in the President’s Statements of Financial Condition that Cohen had provided
to the Oversight Committee. See Cummings’ March 20th Letter at 1–3. Chairman Cummings
stated that these financial statements “raise questions about the President’s representations of his
financial affairs on these forms and on other disclosures, particularly relating to the President’s
debts.” Id. at 1. The letter concluded by asking Mazars to produce four categories of documents
12
Hearing with Michael Cohen, Former Attorney to President Donald Trump: Hearing Before the H. Comm. on
Oversight & Reform, 116th Cong. (2019), https://tinyurl.com/CohenHearing (last visited May 20, 2019) [hereinafter
Cohen Testimony].
13
See Mark Mazzetti, et al., Cohen Pleads Guilty and Details Trump’s Involvement in Moscow Tower Project, N.Y.
TIMES, Nov. 29, 2018, https://www.nytimes.com/2018/11/29/nyregion/michael-cohen-trump-russia-mueller.html
(last visited May 20, 2019).
14
See Letter from the Honorable Elijah E. Cummings, Chairman, House Comm. on Oversight & Reform, to Victor
Wahba, Chairman and Chief Exec. Officer, Mazars USA LLP (Mar. 20, 2019),
https://tinyurl.com/Mar20CummingsLetter (last visited May 20, 2019) [hereinafter Cummings’ March 20th Letter];
see also Cohen Testimony at 13.
9
with respect to not just the President, but also several affiliated organizations and entities,
including the Trump Organization Inc., the Donald J. Trump Revocable Trust, the Trump
Foundation, and the Trump Old Post Office LLC. See id. at 4. The records requested included
statements of financial condition, audited financial statements, documents relied upon to prepare
any financial statements, engagement agreements, and communications between Mazars and the
President or employees of the Trump Organization. See id. The relevant time period identified
for the requested records was “January 1, 2009, to the present.” Id. In his initial letter to Mazars,
Chairman Cummings did not articulate any legislative purpose for the records requested.
A week later, on March 27, 2019, Mazars responded that it “cannot voluntarily turn over
documents sought in the Request.” 15 Mazars cited various federal and state regulations and
professional codes of conduct that prevented it from doing so. See Mazars March 27th Letter at 1.
On April 12, 2019, Chairman Cummings distributed a memorandum to Members of the
Oversight Committee (“Memorandum”), advising them of his intent to issue a subpoena to
Mazars. 16 Under a section titled “Need for Subpoena,” Chairman Cummings cited to Cohen’s
testimony that the President had “altered the estimated value of his assets and liabilities on
financial statements,” as well as to the records Cohen had provided to support these claims.
Cummings’ April 12th Mem. at 1–2. He also referenced “[r]ecent news reports” raising “additional
concerns regarding the President’s financial statements and representations.” Id. at 1. In the
“Conclusion” section of the Memorandum, Chairman Cummings listed the purposes for seeking
the Mazars-held records:
15
Letter from Jerry D. Bernstein, BlankRome LLP, Outside Counsel to Mazars USA LLP, to the Honorable Elijah E.
Cummings, Chairman, House Comm. on Oversight & Reform (Mar. 27, 2019),
https://tinyurl.com/Mar27MazarsLetter (last visited May 20, 2019) [hereinafter Mazars March 27th Letter].
16
Memorandum from Honorable Elijah E. Cummings, Chairman, House Comm. on Oversight & Reform, to Members
of the Committee on Oversight and Reform (April 12, 2019), https://www.politico.com/f/?id=0000016a-131f-da8e-
adfa-3b5f319d0001 (last visited May 20, 2019) [hereinafter Cummings’ April 12th Mem.].
10
The Committee has full authority to investigate whether the President may have
engaged in illegal conduct before and during his tenure in office, to determine
whether he has undisclosed conflicts of interest that may impair his ability to make
impartial policy decisions, to assess whether he is complying with the Emoluments
Clauses of the Constitution, and to review whether he has accurately reported his
finances to the Office of Government Ethics and other federal entities. The
Committee’s interest in these matters informs its review of multiple laws and
legislative proposals under our jurisdiction, and to suggest otherwise is both
inaccurate and contrary to the core mission of the Committee to serve as an
independent check on the Executive Branch.
Id. at 4. Chairman Cummings allowed 48 hours for Members to offer their views on issuing the
subpoena. See id. The Committee’s new Ranking Member, Congressman Jim Jordan, responded,
declaring the action “an unprecedented abuse of the Committee’s subpoena authority to target and
expose the private financial information of the President of the United States.” 17
Notwithstanding the Ranking Member’s objection, on April 15, 2019, the Oversight
Committee issued the subpoena to Mazars that is the subject of this lawsuit. The subpoena sought
the same four categories of records identified in the March 20th letter relating to the President and
his affiliated organizations and entities. See Subpoena, ECF No. 9-2, Ex. A, at 3 [hereinafter
Subpoena]; see also Cummings’ March 20th Letter at 4. The subpoena, however, differed in one
respect—it narrowed the relevant time period by two years to “calendar years 2011 through
2018.” 18 Subpoena at 3.
17
Letter from the Honorable Jim Jordan, Ranking Member, House Comm. on Oversight & Reform, to the Honorable
Elijah E. Cummings, Chairman, House Comm. on Oversight & Reform at 1 (April 15, 2019), https://republicans-
oversight.house.gov/wp-content/uploads/2019/04/2019-04-15-JDJ-to-EEC-re-Mazars-Subpoena.pdf (last visited
May 20, 2019).
18
At oral argument, Plaintiffs stated that paragraph 2 of the subpoena applies “without regard to time.” Hr’g Tr. at
69. That paragraph, however, is for all engagement agreements or contracts related to items “described in Item
Number 1,” which is time-limited from 2011 to 2018. See Subpoena at 3.
11
D. Procedural History
1. Plaintiffs Seek Injunctive Relief
On April 22, 2019, President Trump, along with his affiliated organizations and entities
(collectively “Plaintiffs”), 19 filed this lawsuit. See Compl., ECF No. 1 [hereinafter Compl.]. They
originally named as defendants Chairman Cummings; Peter Kenny, the Chief Investigative
Counsel of the Oversight Committee; and Mazars. Plaintiffs asked the court, among other things,
to declare that the Oversight Committee’s subpoena to Mazars “is invalid and unenforceable” and
to issue a “permanent injunction quashing Chairman Cummings’ subpoena.” Compl. at 13. With
their Complaint, Plaintiffs filed an Application for a Temporary Restraining Order and Motion for
Preliminary Injunction. See Pls.’ App. for a TRO, ECF No. 9; Pls.’ Mot. for Prelim. Inj., ECF No.
11; Stmt. of P&A in Support of Pls.’ App. for a TRO and Mot. for Prelim. Inj., ECF Nos. 9-1, 11-
1 [hereinafter Pls.’ Stmt.]. The Application asked the court to enter an order “prohibiting
Defendants from enforcing or complying with Chairman Cummings’ subpoena so that the Court
can decide Plaintiffs’ motion for a preliminary injunction.” Pls.’ Stmt. at 14.
Following discussions with the Oversight Committee, Plaintiffs consented to the
Committee’s intervention as a defendant in this matter and agreed to dismiss Chairman Cummings
and Kenny as defendants. See Consent Mot. of the Oversight Committee to Intervene, ECF No.
12; Joint Stip., ECF No. 15. The parties settled on a briefing schedule on Plaintiffs’ motion for
preliminary injunction, which the court entered. Minute Order, Apr. 23, 2019. The Oversight
Committee also agreed to postpone the date for Mazars to produce records until seven days after
19
The complete list of affiliated organizations and entities includes: The Trump Organization, Inc.; Trump
Organization LLC; The Trump Corporation; DJT Holdings LLC; The Donald J. Trump Revocable Trust; and the
Trump Old Post Office LLC.
12
the court ruled on Plaintiffs’ motion. See id. That agreement made it unnecessary for the court to
enter a temporary restraining order.
2. Consolidation under Rule 65(a)(2)
Under the entered schedule, the parties were to appear before the court for oral argument
on May 14, 2019. Five days before the hearing and one day after the parties had completed
briefing, the court entered an order announcing its intention to consolidate the hearing on the
preliminary injunction with the “trial on the merits,” as is permitted under Federal Rule of Civil
Procedure 65(a)(2). See Order, ECF No. 25 [hereinafter Order]. The court explained the reason
for consolidation as follows:
The sole question before the court—Is the House Oversight
Committee’s issuance of a subpoena to Mazars USA LLP for
financial records of President Donald J. Trump and various
associated entities a valid exercise of legislative power?—is fully
briefed, and the court can discern no benefit from an additional
round of legal arguments. Nor is there an obvious need to delay
ruling on the merits to allow for development of the factual record.
Id. The court made the decision to consolidate conscious of the need to expedite these types of
cases. In Eastland v. U.S. Servicemen’s Fund, the Supreme Court stated that motions to enjoin a
congressional subpoena “be given the most expeditious treatment by district courts because one
branch of Government is being asked to halt the functions of a coordinate branch.” 421 U.S. 491,
511 n.17 (1975); see also Exxon Corp. v. F.T.C., 589 F.2d 582, 589 (D.C. Cir. 1978) (describing
Eastland as emphasizing “the necessity for courts to refrain from interfering with or delaying the
investigatory functions of Congress”). The court also was cognizant of the fact that the
Constitution’s Speech or Debate Clause forecloses Plaintiffs from compelling discovery from the
Oversight Committee, its Members, or staff. See Eastland, 421 U.S. at 503 (stating that “a private
civil action, whether for an injunction or damages, creates a distraction and forces Members to
13
divert their time, energy, and attention from their legislative tasks to defend the litigation”); see
also Gravel v. United States, 408 U.S. 606, 616–22 (1972). Relatedly, the D.C. Circuit has
recognized that evidence relevant to determining whether Congress has acted in its legislative
capacity is likely to come largely, if not exclusively, from public sources. See Shelton v. United
States, 404 F.2d 1292, 1297 (D.C. Cir. 1968) (observing that relevant sources of evidence include
“the resolution of the Congress authorizing the inquiry,” “the opening statement of the Chairman
at the hearings,” and “statements of the members of the committee . . . or of the Staff Director”)
(citations omitted). The court ordered the parties to submit any additional evidence to the court or
lodge an objection to consolidation by May 13, 2019. Order at 2.
Plaintiffs protested the court’s consolidation order, but the Oversight Committee did not.
See Pls.’ Objections to Rule 65(a)(2) Consolidation, ECF No. 29 [hereinafter Pls.’ Objections];
see also Oversight Committee’s Resp. to the Court’s May 9, 2019 Order, ECF No. 31. Plaintiffs
asserted that, in briefing only a motion for preliminary injunction, they were constrained in their
arguments on the merits. See Pls.’ Objections at 4 (“Nor have the parties had the opportunity to
fully brief the important constitutional questions that this case presents.”). They also maintained
that they needed more time to obtain additional evidence, specifically (1) a memorandum of
understanding negotiated between Chairman Cummings and a Chair of a different House
Committee, which they believed the Ranking Member of the Oversight Committee would
voluntarily disclose to them, and (2) communications between Mazars and the Oversight
Committee. Id. at 6–7. Plaintiffs did not assert that they could obtain discovery from the Oversight
Committee. See generally id.
At the May 14th hearing, the court heard further argument from Plaintiffs on consolidation,
and overruled their objection. The court found that no additional briefing would aid in its decision-
14
making, as the parties had comprehensively presented the issues and cited all applicable precedent.
See Hr’g Tr. at 34. Indeed, Plaintiffs could identify no new argument that they would make if
given the chance to do so. Id. at 34–36. To allow for Plaintiffs’ asserted need to gather additional
evidence, the court left the record open until May 18, 2019. Id. at 75. Plaintiffs already had
submitted some additional evidence after the consolidation order, which consisted of news reports
of public statements of various Members of Congress. See Supp. Decl. of William S. Consovoy,
ECF No. 30 [hereinafter First Supp. Decl.]. Plaintiffs added two more letters from the Ranking
Member before the record closed. See Second Supp. Decl. of William S. Consovoy, ECF No.
34. 20
E. Cross-Motions for Summary Judgment
The legal issues presented do not require the court to resolve any fact contests because the
material facts are not in dispute. 21 Accordingly, having ordered consolidation under Rule 65(a)(2),
the court treats the parties’ briefing as cross-motions for summary judgment. See Mar. for Life v.
Burwell, 128 F. Supp. 3d 116, 124 (D.D.C. 2015) (reviewing case consolidated under Rule 65(a)(2)
as cross-motions for summary judgment); Indep. Bankers Ass’n of Am. v. Conover, 603 F. Supp.
948, 953 (D.D.C. 1985) (same).
20
Plaintiffs did not offer any evidence from Mazars; nor did they submit the memorandum of understanding that they
claimed in their Opposition was critical evidence. The Oversight Committee, however, did submit that memorandum
of understanding to the court in camera. The court has considered the contents of the agreement in rendering its
judgment.
21
Although the Oversight Committee’s “motive” for issuing the subpoena to Mazars is a disputed fact, as discussed
further below, it is not a “material” fact that would prevent deciding the case on cross-motions for summary judgment.
See Watkins v. United States, 354 U.S. 178, 200 (1957). In addition, the Committee admitted “there is no legitimate
dispute about the facts here. We’re not saying that Congressman Cummings didn’t say the things that he’s quoted as
saying . . .” Hr’g Tr. at 61–62.
15
III. LEGAL PRINCIPLES
A. Congress’s Broad Investigative Authority
Article I of the Constitution grants Congress all “legislative Powers.” U.S. Const. art. I,
§ 1. Although Article I does not say so expressly, the power to secure “needed information . . .
has long been treated as an attribute of the power to legislate.” McGrain v. Daugherty, 273 U.S.
135, 161 (1927). As the Supreme Court observed in McGrain, the power to investigate is deeply
rooted in the nation’s history: “It was so regarded in the British Parliament and in the colonial
Legislatures before the American Revolution, and a like view has prevailed and been carried into
effect in both houses of Congress and in most of the state Legislatures.” Id. “There can be no
doubt as to the power of Congress, by itself or through its committees, to investigate matters and
conditions relating to contemplated legislation.” Quinn v. United States, 349 U.S. 155, 160 (1955).
Related to Congress’s legislative function is its “informing function.” The Supreme Court
has understood that function to permit “Congress to inquire into and publicize corruption,
maladministration or inefficiency in agencies of the Government.” Watkins v. United States, 354
U.S. 178, 200 n.33 (1957). “From the earliest times in its history, the Congress has assiduously
performed an ‘informing function’ of this nature.” Id. (citing James M. Landis, Constitutional
Limitations on the Congressional Power of Investigation, 40 HARV. L. REV. 153, 168–194
(1926)). The informing function finds its roots in the scholarship of President Woodrow Wilson,
which the Court first cited in United States v. Rumely:
It is the proper duty of a representative body to look diligently into
every affair of government and to talk much about what it sees. It
is meant to be the eyes and the voice, and to embody the wisdom
and will of its constituents. Unless Congress have and use every
means of acquainting itself with the acts and the disposition of the
administrative agents of the government, the country must be
helpless to learn how it is being served; and unless Congress both
scrutinize these things and sift them by every form of discussion, the
16
country must remain in embarrassing, crippling ignorance of the
very affairs which it is most important that it should understand and
direct. The informing function of Congress should be preferred
even to its legislative function.
345 U.S. 41, 43 (1953) (quoting WOODROW WILSON, CONGRESSIONAL GOVERNMENT: A STUDY IN
AMERICAN POLITICS, 303). Thus, though not wholly distinct from its legislative function, the
informing function is a critical responsibility uniquely granted to Congress under Article I. See
Landis, 40 HARV. L. REV. at 205 n.227 (describing the informing function as “implied and
inherent” within the legislative function).
In furtherance of these duties, Congress’s power to investigate is “broad.” Watkins, 354
U.S. at 187. “It encompasses inquiries concerning the administration of existing laws as well as
proposed or possibly needed statutes. It includes surveys of defects in our social, economic or
political system for the purpose of enabling the Congress to remedy them.” Id. In short, “[t]he
scope of the power of inquiry . . . is as penetrating and far-reaching as the potential power to enact
and appropriate under the Constitution.” Barenblatt v. United States, 360 U.S. 109, 111 (1959).
But Congress’s investigatory power is not unbounded. The Constitution’s very structure
puts limits on it. For instance, the power to investigate may not “extend to an area in which
Congress is forbidden to legislate.” Quinn, 349 U.S. at 161. Nor may Congress “trench upon
Executive or judicial prerogatives.” McSurely v. McClellan, 521 F.2d 1024, 1038 (D.C. Cir. 1975).
A prime example of such overreach is exercising the “powers of law enforcement; those powers
are assigned under our Constitution to the Executive and the Judiciary.” Quinn, 349 U.S. at 161.
The Supreme Court has recognized other limits. Congress cannot “inquire into private affairs
unrelated to a valid legislative purpose.” Id. Nor is there a “congressional power to expose for
the sake of exposure.” Watkins, 354 U.S. at 200. “The public is, of course, entitled to be informed
17
concerning the workings of its government. That cannot be inflated into a general power to expose
where the predominant result can only be an invasion of the private rights of individuals.” Id. 22
B. Determining Whether Congress Has Acted Legislatively
When a court is asked to decide whether Congress has used its investigative power
improperly, its analysis must be highly deferential to the legislative branch. A number of
guideposts mark the way forward.
To start, the court must proceed from the assumption “that the action of the legislative body
was with a legitimate object, if it is capable of being so construed, and [the court] ha[s] no right to
assume that the contrary was intended.” McGrain, 273 U.S. at 178 (citation omitted). It also
“must presume that the committees of Congress will exercise their powers responsibly and with
due regard for the rights of affected parties.” Exxon Corp., 589 F.2d at 589. So, when it appears
that Congress is investigating on a subject-matter in aid of legislating, “the presumption should be
indulged that this was the real object.” McGrain, 273 U.S. at 178.
An important corollary to this presumption of regularity is that courts may not “test[] the
motives of committee members” to negate an otherwise facially valid legislative purpose. Watkins,
354 U.S. at 200; see also Eastland, 421 U.S. at 508 (“Our cases make clear that in determining the
legitimacy of a congressional act we do not look to the motives alleged to have prompted it.”)
(citation omitted). “So long as Congress acts in pursuance of its constitutional power, the Judiciary
lacks authority to intervene on the basis of the motives which spurred the exercise of that power.”
Barenblatt, 360 U.S. at 132 (citation omitted). Thus, it is not the court’s role to decipher whether
Congress’s true purpose in pursuing an investigation is to aid legislation or something more sinister
22
Other limitations on Congress’s investigative powers can be found in the Bill of Rights. See Quinn, 349 U.S. at
161. Plaintiffs have not asserted that disclosure of the records sought from Mazars would implicate any “specific
individual guarantees of the Bill of Rights.” Id.; see generally Pls.’ Stmt.
18
such as exacting political retribution. See McSurely, 521 F.2d at 1038. If there is some discernable
legislative purpose, courts shall not impede Congress’s investigative actions. See Watkins, 354
U.S. at 200 (“Their motives alone would not vitiate an investigation which had been instituted by
a House of Congress if that assembly’s legislative purpose is being served.”).
Although Congress’s motives are off limits, courts can consider what Congress has said
publicly to decide whether it has exceeded its authority. See Shelton, 404 F.2d at 1297. Relevant
evidence includes the resolution authorizing the investigation, statements by Committee members,
and questions posed during hearings. See id. At the same time, the mere absence of public
statements identifying the investigation’s purpose or subject matter is not, by itself, conclusive
proof of an invalid purpose. See McGrain, 273 U.S. at 176–78. Congress is not required to
announce its intentions in advance. See id. at 178. Similarly, it does not matter if the investigation
does not produce legislation. See Eastland, 421 U.S. at 509. “The very nature of the investigative
function—like any research—is that it takes the searchers up some ‘blind alleys’ and into
nonproductive enterprises. To be a valid legislative inquiry there need be no predictable end
result.” Id.; see also Townsend v. United States, 95 F.2d 352, 355 (D.C. Cir. 1938) (Congress’s
“power to conduct a hearing for legislative purposes is not to be measured by recommendations
for legislation or their absence.”). The critical inquiry then is not legislative certainty, but
legislative potential: If the subject matter of the investigation is “one on which legislation could
be had,” Congress acts within its legislative function. McGrain, 273 U.S. at 177 (emphasis added);
see also Eastland, 421 U.S. at 504 n.15 (“The subject of any inquiry always must be one ‘on which
legislation could be had.’”) (quoting McGrain, 273 U.S. at 177).
Once a court finds that an investigation is one upon which legislation could be had, it must
not entangle itself in judgments about the investigation’s scope or the evidence sought. Only an
19
investigative demand that is “plainly incompetent or irrelevant to any lawful purpose of the
[committee] in the discharge of its duties” will fail to pass muster. McPhaul v. United States, 364
U.S. 372, 381 (1960) (citation omitted) (cleaned up). Importantly, in making this assessment, it is
not the judicial officer’s job to conduct a “line-by-line review of the Committee’s requests.” Bean
LLC v. John Doe Bank, 291 F. Supp. 3d. 34, 44 (D.D.C. 2018). “There is no requirement that
every piece of information gathered in such an investigation be justified before the judiciary.”
McSurely, 521 F.2d at 1041.
And, finally, courts must take care not to be swayed by the political conflicts of the day.
Its role is not to act as a political referee. As the Supreme Court cautioned in Tenney v. Brandhove:
In times of political passion, dishonest or vindictive motives are
readily attributed to legislative conduct and as readily believed.
Courts are not the place for such controversies. Self-discipline and
the voters must be the ultimate reliance for discouraging or
correcting such abuses. The courts should not go beyond the narrow
confines of determining that a committee’s inquiry may fairly be
deemed within its province.
341 U.S. 367, 378 (1951).
IV. ANALYSIS
With these principles in mind, the court proceeds to consider whether the Oversight
Committee’s subpoena to Mazars is “facially legislative in character,” McSurely, 521 F.2d at 1038,
or whether it exceeds Congress’s power to investigate. To answer that question, the court first
considers the legislative reasons offered by the Oversight Committee to justify the subpoena.
It then addresses Plaintiffs’ contentions why those reasons are invalid.
A. Legislative Purpose for Issuing the Subpoena to Mazars
Had the Oversight Committee adopted a resolution that spells out the intended legislative
purpose and scope of its investigation, the court would have begun its inquiry there. Indeed, the
20
Supreme Court has considered congressional resolutions as a primary source from which to glean
whether information “was sought . . . in aid of the legislative function.” McGrain, 273 U.S. at
176; see also Shelton, 404 F.2d at 1297 (observing that relevant sources of evidence to “ascertain
whether [an inquiry] is within the broad investigative authority of Congress” include “the
resolution . . . authorizing the inquiry”). However, the Committee never adopted one. While a
clearly drafted resolution would have made this court’s task easier or might have preempted the
challenge now brought altogether, it is not a constitutional prerequisite to start an investigation.
Cf. McGrain, 273 U.S. at 178.
Without a resolution as a point of reference, the logical starting point for identifying the
purpose of the Mazars subpoena is the memorandum to Members of the Oversight Committee
written by Chairman Cummings on April 12, 2019. Chairman Cummings penned that
Memorandum in anticipation of issuing the subpoena. It is therefore the best evidence of the
Committee’s purpose. The Memorandum lists four areas of investigation: (1) “whether the
President may have engaged in illegal conduct before and during his tenure in office,” (2) “whether
he has undisclosed conflicts of interest that may impair his ability to make impartial policy
decisions,” (3) “whether he is complying with the Emoluments Clauses of the Constitution,” and
(4) “whether he has accurately reported his finances to the Office of Government Ethics and other
federal entities.” Cummings’ April 12th Mem. at 4. Each of these is a subject “on which legislation
could be had.” McGrain, 273 U.S. at 177.
Taking the reasons in reverse order, the accuracy of the President’s financial reporting
relates directly to the law that requires it: The Ethics in Government Act of 1978. See 5 U.S.C.
App. 4 § 101 et seq. In his letter to the White House Counsel dated February 15, 2019, Chairman
Cummings alluded to how documents relating to the accuracy of the President’s disclosures fell
21
within the legislative purview of Congress: “Since the earliest days of our republic, Congress has
investigated how existing laws are being implemented and whether changes to the laws are
necessary. For decades, this has included laws relating to financial disclosures required of the
President.” Cummings’ February 15th Letter at 9. As to the specific demand made on February
15th, which related to the payments by Michael Cohen and the President’s failure to publicly report
them as a liability, Chairman Cummings explained that “[t]hese documents will help the
Committee determine why the President failed to report these payments and whether reforms are
necessary to address deficiencies with current laws, rules, and regulations.” Id. (emphasis added).
This legislative rationale applies equally to the financial records requested by the Mazars
subpoena. Congress reasonably might consider those documents in connection with deciding
whether to legislate on federal ethics laws and regulations. For example, the discovery of
additional disclosure violations by the President could influence whether Congress strengthens
public reporting requirements or enhances penalties for non-compliance. Thus, there can be little
doubt that Congress’s interest in the accuracy of the President’s financial disclosures falls within
the legislative sphere.
Investigating whether the President is abiding by the Foreign Emoluments Clause is
likewise a subject on which legislation, or similar congressional action, could be had. The Foreign
Emoluments Clause prohibits the President from “accept[ing]” any “Emolument” from “any King,
Prince, or foreign State” without the “Consent of the Congress.” U.S. Const. art. I, § 9, cl. 8. The
Constitution thus expressly vests in Congress the unique authority to approve the President’s
acceptance of “Emoluments,” however one defines that term. See generally Blumenthal v. Trump,
No. 17-1154 (EGS), 2019 WL 1923398 (D.D.C. Apr. 30, 2019). Even under the President’s
favored interpretation, the Clause, at a minimum, “was intended to combat corruption and foreign
22
influence . . .” Id. at *8. Surely, incident to Congress’s authority to consent to the President’s
receipt of Emoluments is the power to investigate the President’s compliance with the Clause.
Without such power, Congress’s constitutional function to approve or disapprove Emoluments
would be severely and unduly constrained. The Founders could not have intended that result. A
congressional investigation to carry out an expressly delegated Article I function, in addition to
any legislation that might be had relating to that function, is plainly valid. 23
So, too, is an investigation to determine whether the President has any conflicts of interest.
As already discussed, it lies within Congress’s province to legislate regarding the ethics of
government officials. Indeed, exposing conflicts of interest is one of the core objectives of the
Ethics in Government Act. As the D.C. Circuit has observed, “the Act shows Congress’[s] general
belief that public disclosure of conflicts of interest is desirable despite its cost in loss of personal
privacy.” Washington Post Co. v. U.S. Dep’t of Health & Human Servs., 690 F.2d 252, 265 (D.C.
Cir. 1982). Obtaining records to shed light on whether the President has undisclosed conflicts of
interests is therefore entirely consistent with potential legislation in an area where Congress
already has acted and made policy judgments.
Finally, a congressional investigation into “illegal conduct before and during [the
President’s] tenure in office,” Cummings’ April 12th Mem. at 4, fits comfortably within the broad
scope of Congress’s investigative powers. At a minimum, such an investigation is justified based
on Congress’s “informing function,” that is, its power “to inquire into and publicize corruption,”
23
To be clear, even if Congress’s authority to approve the President’s receipt of Emoluments is technically not a
“legislative” act, the court doubts that the Supreme Court would read its precedent to foreclose Congress from
investigating an Emoluments Clause violation based on a semantic distinction. The fact is, no court has ever been
asked to address the extent of Congress’s power to police the Emoluments Clause. Therefore, it should come as no
surprise that there is no case holding that Congress may exercise its power to investigate in relation to that Clause.
But just as Congress’s authority to legislate is expressly rooted in Article I, so too is its power to consent to presidential
receipt of Emoluments. If Congress’s power to investigate is incidental to its legislative function, it likewise must be
incidental to carry out its Foreign Emoluments Clause function.
23
Watkins, 354 U.S. at 200 n.33. 24 It is simply not fathomable that a Constitution that grants
Congress the power to remove a President for reasons including criminal behavior would deny
Congress the power to investigate him for unlawful conduct—past or present—even without
formally opening an impeachment inquiry. On this score, history provides a useful guide.
Cf. Tobin v. United States, 306 F.2d 270, 275–76 (D.C. Cir. 1962) (relying on historical practice
to determine the scope of a congressional investigation). Twice in the last 50 years Congress has
investigated a sitting President for alleged law violations, before initiating impeachment
proceedings. It did so in 1973 by establishing the Senate Select Committee on Presidential
Campaign Activities, better known as the Watergate Committee, and then did so again in 1995 by
establishing the Special Committee to Investigate Whitewater Development Corporation and
Related Matters. See S. Res. 60 (93rd Cong., 1st Session) (Feb. 7, 1973) [hereinafter Watergate
Res.]; see also S. Res. 120 (104th Cong., 1st Session) (May 17, 1995). The former investigation
included within its scope potential corruption by President Nixon while in office, while the latter
concerned alleged illegal misconduct by President Clinton before his time in office. Congress
plainly views itself as having sweeping authority to investigate illegal conduct of a President,
before and after taking office. This court is not prepared to roll back the tide of history. 25
24
Plaintiffs suggested at oral argument that Congress’s informing function was limited to rooting out corruption only
in “agencies” of the Government, and the President is not an “agency” of the government. See Hr’g Tr. at 9, 75.
Although footnote 33 in Watkins refers to the informing function in connection with “agencies of the Government,”
Watkins, 354 U.S. 200 n.33, the original conception of that function as embraced by the Court in Rumely was not so
limited, see Rumely, 345 U.S. 41. Rumely spoke more generally of shining a light on “every affair of government”
and “the acts and the disposition of the administrative agents of the government,” without qualification. Id. at 43.
Watkins’ reference to administrative agencies is therefore better understood as a case-specific statement—the
investigation there involved the Attorney General—rather than a limiting principle. Plaintiffs’ artificial line-drawing
is antithetical to the checks and balances inherent in the Constitution’s design.
25
Even if an investigation into a sitting President’s past or present illegal conduct lies beyond the Oversight
Committee’s reach, its investigation here still would be legitimate because the Committee identified three other
justifications with a valid legislative purpose. See McGrain, 273 U.S. at 176–77 (rejecting lower court’s opinion
striking down a congressional investigation because the investigation “contemplat[ed] the taking of action other than
legislative”).
24
Before moving on to Plaintiffs’ arguments, the court notes that the Oversight Committee
has identified several pieces of actual legislation that, it asserts, are related to its overall
investigation of the President. See Oversight Committee’s Opp’n to Pls.’ Mot. for Prelim.
Injunction, ECF No. 20, at 5–6. The House has passed H.R. 1, which requires, among other things,
the President and Vice President to file new financial disclosure forms within 30 days of taking
office, and to divest all financial interests that would pose a conflict of interest by “either
converting those interests to cash or investments that satisfy ethics rules or placing those interests
in a qualified blind trust or disclosing information about business interests.” Id. at 6 (citing H.R.
1, 116th Cong., Title VIII (2019)). Other bills cited by the Oversight Committee include H.R. 745,
which would strengthen the Office of Government Ethics, and H.R. 706, which would prohibit the
President and Vice President from conducting business directly with the Federal Government. See
id. (citing H.R. 745, 116th Cong. (2019); H.R. 706, 116th Cong. (2019)). There is no mention of
any of these bills in any written request from the Oversight Committee, let alone the
April 12th Memorandum justifying the Mazars subpoena. That absence is not fatal, however.
Again, the question for the court is whether the congressional investigation pertains to a subject
matter on which legislation could be had, so Congress need not proactively identify any specific
legislation to justify its activities. Here, the bills identified by the Oversight Committee
demonstrate Congress’s intent to legislate, at the very least, in the areas of ethics and accountability
for Executive Branch officials, including the President. These are subjects, therefore, on which
legislation could be had.
B. Plaintiffs’ Contentions
The court now turns to Plaintiffs’ contentions. Each of Plaintiffs’ arguments for why the
Mazars subpoena exceeds Congress’s Article I investigative power fall into one of three general
25
categories. First, by characterizing the Oversight Committee’s investigation as one delving “into
the accuracy of a private citizen’s past financial statements,” Plaintiffs contend that the Oversight
Committee is engaged in “a quintessential law enforcement task reserved to the executive and
judicial branches.” Pls.’ Stmt. at 11. Plaintiffs similarly contend that an investigation into the
accuracy of the President’s financial disclosures, his adherence to the Emoluments Clauses, and
his present or past compliance with the law is “law enforcement” activity that encroaches on the
prerogatives of the coordinate branches. Hrg. Tr. at 7, 13–18, 25. Second, Plaintiffs charge that
the Oversight Committee’s investigation “has nothing to do with government oversight,” but is
instead intended to expose for the mere sake of exposure “the conduct of a private citizen years
before he was even a candidate for public office . . .” Pls.’ Stmt. at 11. Finally, Plaintiffs maintain
that the Oversight Committee has exceeded its authority, insofar as it is doing nothing more than
“conduct[ing] roving oversight of the President,” and the records sought from Mazars are not
“pertinent” to any legitimate legislative purpose. Pls.’ Reply in Support of Pls.’ Mot. for Prelim.
Injunction, ECF No. 24 [hereinafter Pls.’ Reply], at 11–12. The court addresses each of these
arguments in turn.
1. Usurpation of Executive and Judicial Functions
Plaintiffs first assert that each of the four justifications for the Mazars subpoena identified
by Chairman Cummings in the April 12th Memorandum falls outside the bounds of legislative
power, because each seeks to determine whether the President broke the law, a function reserved
exclusively to the Executive and Judicial branches. See id. at 13–14. That argument, however,
rests on a false premise. Just because a congressional investigation has the potential to reveal law
violations does not mean such investigation exceeds the legislative function. The Supreme Court’s
understanding of a “legislative” purpose is not so constrained.
26
To be certain, the Supreme Court has said that the “power to investigate must not be
confused with any of the powers of law enforcement; those powers are assigned under our
Constitution to the Executive and the Judiciary.” Quinn, 349 U.S. at 161; see also Watkins, 354
U.S. at 187 (“Nor is the Congress a law enforcement or trial agency.”). But that limitation is not
so absolute as to foreclose Congress from investigating any law violation by a private citizen, let
alone a sitting President, so long as Congress is operating with a legislative purpose. As the Court
explained in Sinclair v. United States:
It may be conceded that Congress is without authority to compel
disclosures for the purpose of aiding the prosecution of pending
suits; but the authority of that body, directly or through its
committees, to require pertinent disclosures in aid of its own
constitutional power is not abridged because the information sought
to be elicited may also be of use in such suits.
279 U.S. 263, 295 (1929). Thus, the Court has made clear that the mere prospect that a
congressional inquiry will expose law violations does not transform a permissible legislative
investigation into a forbidden executive or judicial function. See McGrain, 273 U.S. at 179–80
(“Nor do we think it a valid objection to the investigation that it might possibly disclose crime or
wrongdoing on [the Attorney’s General’s] part.”); see also Townsend, 95 F.2d at 355 (describing
McGrain as holding that “the presumption should be indulged that the object of the inquiry was to
aid the Senate in legislating . . . even though the investigation might possibly disclose crime or
wrongdoing on the part of the then Attorney General, whose name was expressly referred to in the
resolution”).
Moreover, appellate courts have demanded exacting proof before declaring that Congress
has impermissibly intruded into exclusive executive or judicial territories. According to the
Supreme Court, “[t]o find that a committee’s investigation has exceeded the bounds of legislative
power it must be obvious that there was a usurpation of functions exclusively vested in the
27
Judiciary or the Executive.” Tenney, 341 U.S. at 378 (emphasis added). Similarly, the D.C. Circuit
has said that Congress avoids trenching upon executive or judicial prerogatives “so long as [the
investigative activity] remains facially legislative in character.” McSurely, 521 F.2d at 1038.
Therefore, a congressional investigation that seeks to uncover wrongdoing does not, without more,
exceed the scope of Congress’s authority.
In this case, there is nothing “obvious” about the Oversight Committee’s activities to
support the conclusion that the subpoena to Mazars is a usurpation of an exclusively executive or
judicial function. Nothing “give[s ] warrant for thinking the [Oversight Committee is] attempting
or intending to try [the President] at its bar or before its committee for any crime or wrongdoing.”
McGrain, 273 U.S. at 179. Nor is there evidence before the court that the Oversight Committee
initiated its investigative activities at the behest of federal or state law enforcement officials, or is
coordinating its actions with such officials. If anything, the evidence is to the contrary.
The Executive Branch is clearly not coordinating with Congress, as it continues to resist calls to
disclose records relating to the President’s actions in areas arguably well within Congress’s
investigative powers. 26 The Committee’s stated purposes, therefore, do not usurp judicial or
executive functions.
To support their position, Plaintiffs point out that (1) the Mazars subpoena arose out of the
testimony of Michael Cohen—“an admitted perjurer,” Pls.’ Stmt. at 4; (2) the records sought relate
primarily to the President’s personal and financial interests years before he became a candidate,
id. at 11; and (3) Chairman Cummings admitted that the Mazars subpoena was intended to
26
See, e.g., Carol D. Leonnig, et al., No ‘Do-Over’ on Mueller Probe, White House Lawyer Tells House Panel, Saying
Demands for Records, Staff Testimony Will be Refused, WASH. POST, May 15, 2019,
https://www.washingtonpost.com/politics/no-do-over-on-mueller-probe-white-house-lawyer-tells-house-panel-
saying-demands-for-records-staff-testimony-will-be-refused/2019/05/15/1ad19728-7715-11e9-b3f5-
5673edf2d127_story.html?utm_term=.b67bc595c86a (last visited May 20, 2019).
28
“investigate whether the President may have engaged in illegal conduct before and during his
tenure in office,” Cummings’ April 12th Mem. at 4. In addition, Plaintiffs cite to statements made
by Chairman Cummings before he issued the Mazars subpoena. For instance, in his March 20th
letter to Mazars, Chairman Cummings focused solely on Michael Cohen’s allegations that
President Trump misrepresented his assets and liabilities and made no mention of a legislative
purpose for obtaining the records. See Cummings’ March 20th Letter; see also First Supp. Decl.
at 5–9. Additionally, Plaintiffs offer a November 2018 Vox article that quotes Chairman
Cummings as saying, “[w]e’ve got to address this issue of exposing President Trump and what he
has done, and we’ve got to face the truth . . . The [P]resident is a guy who calls truth lies and lies
truth. But at some point, he’s also creating policy, and that’s affecting people’s day-to-day life.”
First Supp. Decl. at 42. Plaintiffs also provide a Politico article in which Chairman Cummings is
quoted as saying, “[o]ver the last two years President Trump set the tone from the top in his
administration that behaving ethically and complying with the law is optional . . . We’re better
than that.” Id. at 54. None of these facts, individually or taken together, make for an “obvious”
“usurpation of functions exclusively vested in the Judiciary or the Executive.” Tenney, 341 U.S.
at 378.
History has shown that congressionally-exposed criminal conduct by the President or a
high-ranking Executive Branch official can lead to legislation. The Senate Watergate Committee
provides an apt example. That Committee’s express mandate was to investigate “the extent, if
any, to which illegal, improper, or unethical activities were engaged in by any persons, acting
either individually or in combination with others, in the presidential election of 1972, or in any
related campaign or canvass conducted by or [o]n behalf of any person seeking nomination or
election as the candidate . . . for the office of President . . .” Watergate Res. at 1–2. As a
29
consequence of the Committee’s work, Congress passed numerous pieces of legislation—among
them, the Ethics in Government Act, the Congressional Budget and Impoundment Control Act of
1974, the War Powers Resolution, and the Independent Counsel Statute—with objectives to “open
up the operation of the presidency to greater public oversight, subject[] the presidency to legal
checks by other branches or institutions of government and, more generally, impose[] rule of law
principles to more and more types of presidential decision making.” Michael A. Fitts,
The Legalization of the Presidency: A Twenty-Five Year Watergate Retrospective, 43 ST. LOUIS
UNIV. LAW J. 725, 726 (1999). The Teapot Dome Scandal provides another illustration. That
congressional investigation concerned the award of a no-bid contract to lease federal oil reserves
in Wyoming. Congress’s investigation revealed that the Secretary of Interior had accepted bribes
from the oil companies that were awarded the leases. This discovery motivated Congress to enact
several good-government reforms, including the Revenue Act of 1924 and the Federal Corrupt
Practices Act of 1925. See James Sample, The Last Rites of Public Campaign Financing?, 92
NEB. L. REV. 349, 363 (2013). See also Lawrence A. Zelenak & Marjorie E. Kornhauser, Shaping
Public Opinion and the Law: How a “Common Man” Campaign Ended a Rich Man’s Law, 73
LAW & CONTEMP. PROBS. 123, 126 (2010). This court is in no position to say that an equally
ambitious legislative agenda might not arise out of the current era of congressional investigations
of the presidency.
2. Investigation of Private Affairs
Plaintiffs next accuse the Oversight Committee of issuing the subpoena to Mazars simply
to investigate the private affairs of a citizen. See Pls.’ Stmt. at 9, 11. This argument fares no better
than Plaintiffs’ first.
30
More than a century ago, in Kilbourn v. Thompson, the Supreme Court stated that Congress
does not possess “the general power of making inquiry into the private affairs of the citizen.” 103
U.S. 168, 190 (1880). In the ensuing decades, the Supreme Court repeatedly has affirmed that
constraint on Congress’s investigative powers. See, e.g., McGrain, 273 U.S. at 173–74; Quinn,
349 U.S. at 161; Eastland, 421 U.S. at 504 n.15. But Kilbourn is the high-water mark for that
limiting principle. In the nearly 140 years since Kilbourn, neither the Supreme Court nor any
circuit court has found a congressional investigation unconstitutional because it invades the
“private affairs of the citizen.” Indeed, years later, in the context of warning courts to be wary of
declaring a congressional inquiry unconstitutional, the Supreme Court acknowledged Kilbourn’s
shortcomings:
Experience admonishes us to tread warily in this domain. The loose
language of Kilbourn v. Thompson, 103 U.S. 168, the weighty
criticism to which it has been subjected, see, e.g., Fairman,
Mr. Justice Miller and the Supreme Court, 332–334; Landis,
Constitutional Limitations on the Congressional Power of
Investigation, 40 Harv. L. Rev. 153, the inroads that have been made
upon that case by later cases, McGrain v. Daugherty, 273 U.S. 135,
170–171, and Sinclair v. United States, 279 U.S. 263, strongly
counsel abstention from adjudication unless no choice is left.
Rumely, 345 U.S. at 46 (alternations added). Accordingly, although the notion from Kilbourn that
Congress does not have the general power to investigate into personal affairs remains alive today,
the case is largely impotent as a guiding constitutional principle. See Landis, 40 HARV. L. REV.
at 220 (“But no standard for judgment can be developed from Kilbourn v. Thompson. Its result
contradicts an unbroken Congressional practice continuing even after the decision, with the
increasing realization that committees of inquiry are necessary in order to make government
effectively responsible to the electorate.”).
31
How then to measure whether Congress has ventured into impermissible territory of
investigating the personal affairs of a private citizen? The Supreme Court has provided some
guidance. In Quinn, the Court said that Congress cannot use its investigative power “to inquire
into private affairs unrelated to a valid legislative purpose.” 349 U.S. at 161 (emphasis added).
Similarly, in Watkins, the Court stated that: “The public is, of course, entitled to be informed
concerning the workings of its government. That cannot be inflated into a general power to expose
where the predominant result can only be an invasion of the private rights of individuals.” 354
U.S. at 200 (emphasis added). Thus, the question the court must ask is whether the Oversight
Committee’s investigation into the President’s personal affairs is fully divorced from any
legislative purpose.
Indulging in the presumption that when Congress acts it does so for a proper reason, the
court cannot say that the records sought from Mazars are “unrelated to a valid legislative purpose”
or that the “predominant result can only be an invasion of” the President’s private affairs. As
discussed above, legislation could stem from the Oversight Committee’s investigation of the
President’s personal and corporate finances and the possible conflicts of interest under which he
is operating. Thus, the potential presence of some intent to “ridicule, harass, or punish” the
President cannot overcome this facially valid legislative purpose. McSurely, 521 F.2d at 1038.
In their Complaint and in their supplemental evidentiary submissions, Plaintiffs reference
various statements from Democratic Members of Congress and congressional aides to the effect
that Democrats are intending to use their subpoena power to exact political retribution. See Compl.
¶¶ 27–30; see also First Supp. Decl. at 35–79. For instance, one Congressman is quoted as saying,
“We’re going to have to build an air traffic control tower to keep track of all the subpoenas flying
from here to the White House.” Compl. ¶ 29. Another unnamed Democratic official said that
32
House Democrats were preparing a “subpoena cannon” to fire at the President. Id. Plaintiffs urge
that these and similar statements reveal that the Democrats’ true motive is to embarrass and harass
the President, which cannot be cured by the Committee’s “retroactive rationalizations” in the April
12th Memorandum. Hr’g Tr. at 8.
Even if the court were to take these statements at face value—at best, a dubious evidentiary
proposition given that these individuals do not control the actions of the Oversight Committee—
they make no material difference. The case law makes clear that “motives alone would not vitiate
an investigation which had been instituted by a House of Congress if that assembly’s legislative
purpose is being served.” Watkins, 354 U.S. at 200. In Watkins, the petitioner “marshalled an
impressive array of evidence that some Congressmen have believed that” their duty “was to bring
down upon himself and others the violence of public reaction because of their past beliefs,
expressions and associations.” Id. at 199. This evidence did not, however, carry the day with the
Supreme Court because Congress also had a legitimate legislative purpose for its investigation.
Id. at 200. Likewise, in McGrain, the Court rejected a lower court’s decision echoing the
arguments Plaintiffs advance here: “The extreme personal cast of the original resolutions; the
spirit of hostility towards the then Attorney General which they breathe; that it was not avowed
that legislative action was had in view until after the action of the Senate had been challenged; and
that the avowal then was coupled with an avowal that other action was had in view—are calculated
to create the impression that the idea of legislative action being in contemplation was an
afterthought.” McGrain, 273 U.S. at 176. The Court held that the lower court was “wrong,”
because “the subject [of the investigation] was one on which legislation could be had.” Id. at 177.
33
In short, as long as there is a facially valid legislative purpose for the investigation, Congress acts
within its constitutional authority. That is the case here. 27
3. Pertinency of the Records Request
Plaintiffs’ third and final challenge rests on the “pertinency” of the records requested from
Mazars. See Pls.’ Reply at 12–14. This argument takes multiple forms, none of which are
persuasive.
To begin, according to Plaintiffs, for the Mazars subpoena to be valid the records sought
must be “‘reasonably relevant’ to [the subpoena’s] legitimate legislative purpose,” and the records
demanded fail that test. Id. at 13 (citing McPhaul, 364 U.S. at 381–82). This argument suffers
from two problems. The first is that Plaintiffs conflate the concept of “pertinency” with the notion
of “relevancy” as used in civil proceedings. “Pertinency” does not require the court to ask, as it
would in a civil discovery dispute, whether the documents requested are likely to yield useful
evidence. Instead, pertinency “is a jurisdictional concept . . . drawn from the nature of a
congressional committee’s source of authority.” Watkins, 354 U.S. at 206. The concept appears
most often in the context of a criminal conviction for contempt of Congress, in which a person has
refused to comply with a subpoena or answer questions posed at a hearing. Pertinency, in this
setting, is an element of criminal contempt. See 2 U.S.C. § 192 (making it a misdemeanor for a
person summoned as a witness before Congress either to not appear or, if “having appeared, [to]
refuse[] to answer any question pertinent to the question under inquiry . . .”) (emphasis added).
The pertinency inquiry therefore asks whether the question posed to a witness is one that fell within
27
For this same reason, the forceful dissenting statements of the Ranking Member of the Oversight Committee,
Congressman Jim Jordan, do not change the court’s calculus. The Ranking Member views the Committee’s
investigation as without legislative purpose, and its sole design to harass and embarrass the President. See Second
Decl. of William S. Consovoy, ECF No. 34; Ex. B, Letter from the Honorable Jim Jordan, Ranking Member, House
Comm. on Oversight & Reform, to the Honorable Elijah E. Cummings, Chairman, House Comm. on Oversight &
Reform (May 15, 2019). But, again, so long as lawmaking could follow from the Committee’s investigation, any
attendant political purpose does not make the inquiry unconstitutional.
34
the scope of the Committee’s investigative authority, which typically is defined by the resolution
authorizing the investigation. See Watkins, 354 U.S. at 207–10; Sinclair, 279 U.S. at 292 (stating
that, under the contempt statute, “a witness rightfully may refuse to answer where the bounds of
the power are exceeded or where the questions asked are not pertinent to the matter under
inquiry”). This is not a contempt case and therefore the pertinency inquiry, properly understood,
has no role here.
But even if the court were to treat pertinency as akin to a relevance determination, that test
is satisfied here. The standard adopted by the Supreme Court is a forgiving one. The subpoenaed
records need only be “not plainly incompetent or irrelevant to any lawful purpose [of the
Committee] in the discharge of its duties.” McPhaul, 364 U.S. at 381 (cleaned up). Here, the
Oversight Committee has shown that it is not engaged in a pure fishing expedition for the
President’s financial records. It is undisputed that the President did not initially identify as
liabilities on his public disclosure forms the payments that Michael Cohen made to alleged
mistresses during the presidential campaign. 28 Furthermore, Michael Cohen has pleaded guilty to
campaign finance violations arising from those payments. 29 These events, when combined with
Cohen’s testimony and the financial statements he supplied, make it reasonable for the Oversight
Committee to believe that the records sought from Mazars might reveal other financial
transgressions or improprieties. As already discussed, it is not unreasonable to think that the
Mazars records might assist Congress in determining whether ethics statutes or regulations need
updating to strengthen Executive Branch accountability, promote transparency, and protect against
Executive Branch officials operating under conflicts of interest. Additionally, the Mazars records
28
Letter from David J. Apol, supra n.10.
29
See Mark Mazzetti, et al., Cohen Pleads Guilty and Details Trump’s Involvement in Moscow Tower Project, N.Y.
TIMES, Nov. 29, 2018, https://www.nytimes.com/2018/11/29/nyregion/michael-cohen-trump-russia-mueller.html
(last visited May 20, 2019).
35
could provide the Oversight Committee with clues about the President’s foreign interests or
sources of foreign income, if any, which would assist in determining Congress’s obligations under
the Foreign Emoluments Clause. This concern is not a new one. In other letters seeking records,
one sent to the Trump Organization and the other to the GSA, Chairman Cummings expressly
stated that the records sought would be useful in assessing the President’s compliance with the
Foreign Emoluments Clause. See n. 7 & 8, supra. The records from Mazars likewise could
advance this legislative purpose. Pertinency, to the extent it may apply, is thus satisfied.
Two more arguments remain. First, Plaintiffs insist that the Oversight Committee cannot
be seeking pertinent material because the legislative actions contemplated “extend to an area in
which Congress is forbidden to legislate,” Quinn, 349 U.S. at 161. See Pls.’ Reply at 15–16. For
example, Plaintiffs argue that H.R. 1 is unconstitutional insofar as it adds qualifications for the
presidency beyond those contained in Article II of the Constitution. See id. at 16. More broadly,
Plaintiffs maintain that any regulation of the “President’s finances or conflicts of interest” would
be unconstitutional for the same reason. Id.
Plaintiffs’ contention flies in the face of decades of legislation covering the President. For
example, the Ethics in Government Act requires the President to report the source, type, and
amount of certain income and assets to the Office of Government Ethics. See 5 U.S.C. App. 4
§§ 101(a), (f); id. §§ 102(a), (b); id. § 103(b). The Stop Trading on Congressional Knowledge Act
of 2012 provides that no “executive branch employee,” including the President, may use
“nonpublic information derived from such person’s position” “as a means for making a private
profit,” and further states that “executive branch employees,” including the President, “owe[] a
duty arising from a relationship of trust and confidence to the United States Government and the
citizens of the United States with respect to material, nonpublic information derived from [their]
36
position.” Pub. Law No. 112-105 § 9. And, the Presidential Records Act “directs the President to
‘take all such steps as may be necessary to assure that the activities, deliberations, decisions, and
policies that reflect the performance of his constitutional, statutory, or other official or ceremonial
duties are adequately documented and that such records are maintained as Presidential records.’”
Armstrong v. Bush, 924 F.2d 282, 285 (D.C. Cir. 1991) (citing 44 U.S.C. § 2203). Plaintiffs’
argument, if accepted, would wipe out some, and perhaps all, of these statutes.
But there is an even more fundamental problem with Plaintiffs’ position. It is not the
court’s role in this context to evaluate the constitutionality of proposed or contemplated legislation.
Doing so would go beyond its limited powers. The Supreme Court said as much in Rumely:
“Whenever constitutional limits upon the investigative power of Congress have to be drawn by
this Court, it ought only to be done after Congress has demonstrated its full awareness of what is
at stake by unequivocally authorizing an inquiry of dubious limits. Experience admonishes us to
tread warily in this domain.” 345 U.S. at 46. Consequently, courts must avoid declaring an
investigation by Congress unconstitutional, unless “no choice is left.” See id. In this case, not
only is there no need to confront difficult constitutional questions, it would be improper to do so.
Federal courts do not “render advisory opinions. For adjudication of constitutional issues
‘concrete legal issues, presented in actual cases, not abstractions’ are requisite.” United Pub.
Workers of Am. (C.I.O.), et al., v. Mitchell, et al., 330 U.S. 75, 89 (1947) (citations omitted). The
court here faces only abstract constitutional questions about prospective legislation that is not yet
law. The court cannot declare a congressional investigation unconstitutional in such ill-defined
circumstances. 30
30
The D.C. Circuit’s decision in Tobin does not compel a different result. 306 F.2d 270 (D.C. Cir. 1962). If anything,
Tobin advises courts to sidestep important constitutional issues unless squarely presented and unavoidable. In Tobin,
the setting was review of a contempt conviction, which the Circuit found “is not the most practical method of inducing
courts to answer broad questions broadly.” 306 F.2d at 274. This case is even less amenable to resolving an important
37
Finally, Plaintiffs suggest that the court has the authority to “narrow overbroad
[congressional] subpoenas,” and should consider doing so here. Pls.’ Reply at 13. But the federal
courts enjoy no such power. “A legislative inquiry may be as broad, as searching, and as
exhaustive as is necessary to make effective the constitutional powers of Congress.” Townsend,
95 F.2d at 361 (citation omitted). “There is no requirement that every piece of information
gathered in such an investigation be justified before the judiciary.” McSurely, 521 F.2d at 1041.
The court therefore cannot “engage in a line-by-line review” of the Mazars subpoena and narrow
its demands. Bean LLC, 291 F. Supp. 3d at 44; see also Senate Select Committee on Ethics v.
Packwood, 845 F. Supp. 17, 20 (D.D.C. 1994) (“This [c]ourt . . . has no authority to restrict the
scope of the Ethics Committee’s investigation.”).
V. REQUEST FOR STAY PENDING APPEAL
At the May 14th oral argument, Plaintiffs asked the court to stay the return date of the
subpoena beyond the seven days already agreed upon by the parties, pending final appellate review
by the D.C. Circuit. See Hr’g Tr. at 77–78. The court declines to do so.
Federal Rule of Civil Procedure 62(c) authorizes a district court to issue an injunction
pending appeal. Fed. R. Civ. P. 62(c). To obtain a stay pending appeal, the moving party “must
establish [1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm
in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that
an injunction is in the public interest.” See Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20
(2008); accord Cuomo v. U.S. Nuclear Regulatory Comm’n, 772 F.2d 972, 974 (D.C. Cir. 1985)
(per curiam) (citing Wash. Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d 841, 843
constitutional issue than Tobin. There is no conviction or piece of legislation before the court to evaluate. Assessing
the constitutionality of a not-yet-enacted statute would be the equivalent of answering a hypothetical question on a
law school exam. This court cannot engage in such an exercise.
38
(D.C. Cir. 1977)). The court balances these factors on a “sliding scale,” such that “a strong
showing on one factor could make up for a weaker showing on another.” Sherley v. Sebelius, 644
F.3d 388, 392 (D.C. Cir. 2011); see also Cigar Ass’n of Am. v. U.S. Food & Drug Admin.,
317 F. Supp. 3d 555, 560 (D.D.C. 2018).
As to the first factor, Plaintiffs have not shown that their challenge to the Mazars subpoena
presents “serious legal questions going to the merits, so serious, substantial, difficult as to make
them a fair ground of litigation and thus for more deliberative investigation.” Population Inst. v.
McPherson, 797 F.2d 1062, 1078 (D.C. Cir. 1986) (quoting Holiday Tours, 559 F.2d at 844).
None of the three grounds upon which Plaintiffs challenge the subpoena rests on “potentially
persuasive authority.” John Doe Co. v. Consumer Financial Protection Bureau, 849 F.3d 1129,
1131 (D.C. Cir. 2017). Indeed, Plaintiffs have cited no case since Kilbourn from 1880 in which
the Supreme Court or the D.C. Circuit has interfered with a congressional subpoena—because it
either intrudes on the law enforcement prerogatives of the Executive or Judicial branches, seeks
personal information unrelated to a legislative purpose, or demands records that lack “pertinency.”
This case does not merit becoming the first in nearly 140 years. 31
As for irreparable harm, this court has recognized that “the disclosure of confidential
information is, by its very nature, irreparable ‘because such information, once disclosed, loses its
confidential nature.’” Robert Half Int’l Inc. v. Billingham, 315 F. Supp. 3d 419, 433 (D.D.C. 2018)
(citations omitted). That concern is somewhat mitigated here, however, because of the recipient
of the records. Unlike Robert Half Int’l, where the challenged disclosure was to a market
competitor, the disclosure here is made to Congress, and the D.C. Circuit has held that “courts
31
This case is unlike Eastland in which the D.C. Circuit by a 2-1 margin granted a stay to enforce subpoenas issued
by Congress. See United States Servicemen’s Fund v. Eastland, 488 F.2d 1252, 1256–57 (D.C. Cir. 1974), rev’d on
other grounds, Eastland, 421 U.S. at 491. The court granted the stay because the case presented “serious constitutional
questions . . .” Id. at 1256. No such “serious constitutional questions” are presented here.
39
must presume that the committees of Congress will exercise their powers responsibly and with due
regard for the rights of affected parties.” Exxon, 589 F.2d at 589 (citation omitted). That said, the
court is not naïve to reality—a reality confirmed by the fact that the Oversight Committee has said
that the decision whether to make the records public lies within its discretion. See Hr’g Tr. at 59.
Thus, there is a chance that some records obtained from Mazars will become public soon after they
are produced. The second factor of irreparable harm therefore favors a stay.
The final two factors—the balance of equities and the public interest—merge when, as
here, “the Government is the opposing party.” Nken v. Holder, 556 U.S. 418, 435 (2009). These
factors tip the balance in favor of denying a stay. In Exxon, the plaintiff had challenged Congress’s
right to obtain records from the Federal Trade Commission that contained its trade secrets.
589 F.2d at 586–87. The district court denied the plaintiff’s request for injunctive relief. In
affirming that decision on appeal, the D.C. Circuit held that the public interest favored Congress
having access to the records. The court stated that the plaintiff’s burden to obtain injunctive relief
was “considerably heightened by the clear public interest in maximizing the effectiveness of the
investigatory powers of Congress . . . It would, then, require an extremely strong showing by the
appellants to succeed in obtaining an injunction in light of the compelling public interest in denying
such relief.” Id. at 594 (emphasis added). The court concluded: “To grant the injunction
appellants request, this court would be required to interfere with the operation of Congress, and
also to depart from traditional doctrine concerning the availability of equitable relief.” Id.
The same would be true in this case. 32
32
The court acknowledges that this case differs from Exxon in one respect. Unlike Exxon, this case does involve
records whose public disclosure might give rise to “private injury.” 589 F.2d at 594. It is unclear, however, what
proportion of the records at issue in this case are truly “personal,” as opposed to corporate records. The fact of some
uncertain amount of private injury does not change the court’s calculus.
40
The court is well aware that this case involves records concerning the private and business
affairs of the President of the United States. But on the question of whether to grant a stay pending
appeal, the President is subject to the same legal standard as any other litigant that does not prevail.
Plaintiffs have not raised a “serious legal question[] going to the merits.” Population Inst., 797
F.2d at 1078. And, the balance of equities and the public interest weigh heavily in favor of denying
relief. The risk of irreparable harm does not outweigh these other factors. The court, therefore,
will not stay the return date of the subpoena beyond the seven days agreed upon by the parties.
VI. CONCLUSION
For the foregoing reasons, the court will enter judgment in favor of the House Oversight
Committee and against Plaintiffs. The court denies Plaintiffs’ request for a stay pending appeal.
A separate final order accompanies this Memorandum Opinion.
Dated: May 20, 2019 Amit P. Mehta
United States District Court Judge
41
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35 Ill. App.3d 905 (1976)
342 N.E.2d 748
JIMMY ANGEL, d/b/a Jimmy Angel Trio, Plaintiff-Appellee,
v.
JAMES ANGELOS et al., d/b/a The French Connection, Defendants-Appellants.
No. 61440.
Illinois Appellate Court First District (3rd Division).
Opinion filed February 10, 1976.
*906 Michael G. Cheronis and Kenneth A. Green, both of Chicago, for appellants.
Brundage and Garr, of Chicago, for appellee.
Judgment affirmed.
Mr. JUSTICE DEMPSEY delivered the opinion of the court:
This case involves an action for breach of contract. The plaintiff, Jimmy Angel d/b/a the Jimmy Angel Trio, a group of musicians, agreed pursuant to a written contract, to perform for the defendants, James Angelos and Angelo Letsos, d/b/a The French Connection, an entertainment lounge. When the defendants refused the group's services at the appointed starting date, the plaintiff initiated a successful suit for damages resulting from the breach. However, judgment was entered against James Angelos only and Angelos, referring to himself as James Angelopoulos, filed a motion to vacate the judgment. After a hearing, the motion was denied. Angelos' principal contention on appeal is that he is not obligated to the plaintiff because he did not sign the contract.
A copy of the contract was attached to the complaint. The body of the contract contained the name of The French Connection, which was designated as the place where the plaintiff was to perform. The name appeared again at the bottom of the contract in the space that indicated the employer's name. Just below this space was the signature of Angelo Letsos. Angelos' name or signature did not appear anywhere in the contract.
Angelos' answer denied the allegations of the complaint and stated that the contract was entered into solely by Letsos, an officer and director of The French Connection. In his motion to vacate the judgment, Angelos repeated his assertion that he was not a party to the contract. He said that his name was Angelopoulos, not Angelos and that the judgment was against the latter; that Letsos, not he, signed the contract; *907 that the contract was between the plaintiff and The French Connection, Inc., and if there was any liability it was on the part of that corporation.
1 On the surface, there appears to be merit in Angelos' contentions. But no report of proceedings has been filed by him and we do not know what the evidence may have been that caused the court, sitting without a jury, to make the finding that it did. In the absence of a transcript of the proceedings it must be presumed that the proof presented was sufficient to support the court's decision. Perezz v. Janota (1969), 107 Ill. App.2d 90, 246 N.E.2d 42.
The party who prosecutes an appeal has the duty of presenting to the court of review everything necessary to deciding the issues on appeal and the burden of showing that the trial court's judgment was erroneous. (Flynn v. Vancil (1968), 41 Ill.2d 236, 242 N.E.2d 237; Denenberg v. Prudence Mutual Casualty Co. (1970), 120 Ill. App.2d 68, 256 N.E.2d 71.) Angelos attempts to evade this obligation by contending that it was the plaintiff's responsibility to make a complete record and that his failure to do so requires a reversal of the judgment. Three cases in which judgments were reversed on appeal are cited in support of this contention: Kaszmierczak v. Jamrosz (1914), 185 Ill. App. 352; Mitchell v. Northwestern Manufacturing & Car Co. (1887), 26 Ill. App. 295, and Groenebeld v. Chicago City Ry. Co. (1915), 192 Ill. App. 62. However, Kaszmierczak was reversed because the record and the evidence did not support the judgment. In Mitchell an injunction had been issued against the defendant at the plaintiff's request. The trial court subsequently dissolved the injunction and assessed damages against the plaintiff. The reviewing court reversed the award because neither the record nor the decree showed the facts upon which the damages were assessed. In Groenebeld the reviewing court reversed the judgment because it was unable to determine from the report of proceedings, "exactly where and how the accident in question occurred." The defendant's reliance on these cases is misplaced.
2 It was no more the plaintiff's obligation at the trial than it was the defendant's to see that the evidence was transcribed. But once an appeal is taken the burden of preserving the evidence, where it is alleged that it is insufficient to support the court's order, rests upon the party who appeals from that order. (Skaggs v. Junis (1963), 28 Ill.2d 199, 190 N.E.2d 731.) Furthermore, the additional fact that the defendant in his praecipe requested that the clerk of the court prepare "[a] transcript of the trial proceedings, including all testimony, objections and rulings of the trial court," did not shift his burden, as the appellant, to present all material essential to the appeal's disposition.
*908 Angelos seeks to justify his failure to present a report of proceedings on the further ground that his counsel on appeal did not represent him at the trial and that the latter, therefore, cannot be held responsible for the trial record. This contention cannot be accepted. The responsibility of an appellant to present an adequate record cannot be avoided by a change in counsel. The law makes liberal provision for the reconstruction of the trial proceedings. Supreme Court Rule 323(c) (Ill. Rev. Stat. 1973, ch. 110A, par. 323(c)) provides that:
"If no verbatim transcript of the evidence of proceedings is obtainable the appellant may prepare a proposed report of proceedings from the best available sources, including recollection. * * * [T]he appellant shall, upon notice, present the proposed report or reports and any proposed amendments to the trial court for settlement and approval. The court, holding hearings if necessary, shall promptly settle, certify, and order filed an accurate report of proceedings."
3 The "recollection" that may be used to prepare a proposed report of proceedings is not limited to that of the trial attorney; it may be that of the appellant or a bystander. A report may be prepared from the best available sources and if it is not acceptable to the court because of its inadequacy or inaccuracy, the court may hold hearings and examine witnesses to determine what actually occurred at the trial. (See Feldman v. Munizzo (1957), 16 Ill. App.2d 58, 147 N.E.2d 427.) The court may use all reasonable means to determine what the report should contain so that it will truly and fairly present the testimony, the evidence and the rulings at the trial of the case. (See People ex rel. Simus v. Donoghue (1941), 377 Ill. 122, 35 N.E.2d 371, cert. denied, 314 U.S. 678.) Despite the many sources available to him the appellant made no effort to reconstruct the trial proceedings.
4 If a record does not contain a report of the trial proceedings the appeal may be dismissed (Glover v. Glover (1974), 24 Ill. App.3d 73, 320 N.E.2d 513), but it is also proper to affirm the judgment. Following the filing of this appeal, the appellee moved for its dismissal. Upon the appellant's protestations that the correctness of his position could be established from the balance of the record, the motion was taken with the case. It is not necessary to pass on this motion as the judgment is affirmed.
Affirmed.
MEJDA, P.J., and McGLOON, J., concur.
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599 So.2d 858 (1992)
STATE of Louisiana
v.
Pennie WIGLEY and Robert Earle Higginbotham.
Nos. K91-526, K91-734.
Court of Appeal of Louisiana, Third Circuit.
May 4, 1992.
*859 John Holdridge, MS & LA Capital Trial Asst. Prjt., New Orleans, Thomas L. Lorenzi, Lorenzi & Sanchez, Lake Charles, J. Michael Small, Alexandria, Rebecca L. Hudsmith, Shreveport, Nicholas J. Trenticosta, Loyola Death Penalty Resc. Ctr., New Orleans, for defendants.
F. Wayne Frey, Paul Reggie, Asst. Dist. Attys., Lake Charles, Barbara Rutledge, Asst. Atty. Gen., New Orleans, for plaintiff.
Before LABORDE, J., and MARCANTEL and COREIL, JJ. Pro Tem.[*]
JOSEPH E. COREIL, Judge Pro Tem.
This case is before the Court by writ of certiorari on remand from the Louisiana Supreme Court. The writ application concerns the request for payment of reasonable attorney's fees and expenses filed by four private attorneys who were appointed to represent indigent defendants charged with first degree murder.
Mark Delphin and David Dwight, both private attorneys, were court appointed to represent Robert Earle Higginbotham, a 16-year-old defendant charged with capital murder.[1] Alcide J. Gray and Anna R. Gray, both private attorneys, were appointed to represent Pennie Wigley, a 17-year-old defendant charged with capital murder.[2] The four attorneys were appointed *860 by the court from a list of non-volunteer attorneys.
During the pendency of the criminal prosecution, motions for payment of reasonable compensation and expenses were filed in these two prosecutions.[3]
The evidentiary hearings were consolidated and conducted on March 22, 1991[4]. This writ arises out of the denial of the request for payment.
HEARING ON THE MOTION
At the hearing, the chairman of the Calcasieu-Cameron Indigent Defendant Board, Walter Sanchez, testified about the funding and financing of the local indigent defender board (IDB). He stated that the four attorneys appointed by the court from the list of non-volunteer attorneys have not been paid for their services and will not be paid in the future. In fact, Sanchez testified, all non-volunteer attorneys appointed by the court since the latter part of 1990 would not be paid by the IDB for their services. As far as Sanchez knew from his years of service to the IDB, non-volunteer attorneys appointed by the courts to represent indigent defendants have never been paid, due to the inadequate funding.
After the hearing, the motions were denied. Counsel for the attorneys objected to the ruling and gave notice of intent to seek supervisory writs.
DISCUSSION
Relators assert various constitutional violations in their assignments of error.[5] There is no need for this Court to address each assignment of error. This case turns *861 on the violation of an attorney's right to substantive due process. Substantive due process, as it relates to matters here, primarily protects against an oppressive interpretation of the law and is in many ways similar to the "taking" clause of the state and federal constitutions. See La. CONST., art. 1, § 4 and U.S. CONST. amend. V.
I.
The United States Constitution, Amendment VI, provides the right of an accused to have the assistance of counsel. The Louisiana Constitution art. 1, § 13, further provides the appointment of counsel for indigent defendants charged with an offense punishable by imprisonment. This article also provides:
"The legislature shall provide for a uniform system for securing and compensating qualified counsel for indigents."
The only justifiable objective of this portion of the article is obvious. Attorneys appointed to represent indigent defendants in criminal proceedings are entitled to compensation. To require the services of an attorney to defend without fee is in conflict with Section 13 of Article 1 of the Louisiana Constitution.
The traditional view held by the courts has been that when an attorney is admitted to practice law, he takes on an obligation to render his services to indigents without compensation. This principle, once so firmly established in the history of the courts and the legal profession, is now categorically rejected by numerous state supreme court decisions when the services are to indigent defendants in capital murder cases.[6]
In State v. Clifton, 247 La. 495, 172 So.2d 657 (1965), the Louisiana Supreme Court held that a court has the inherent power to require an attorney, as an obligation burdening the attorney's privilege to practice and to serve as an officer of the court, to represent an indigent without compensation "so long as the burden is not oppressive." 172 So.2d, at 667. The Court held that the compensation must be provided if the "task imposed upon [counsel] is so onerous that it constitutes an abusive extension of their professional obligations." Id. at 668.
When an attorney is required to donate time (his or her "stock in trade") to subsidize a defense, the attorney is being deprived of property in the form of money. When the burden imposed is excessive to the extent that it is confiscatory, this taking of his property is constitutionally unacceptable.
The practice of maintaining indigent defender boards as provided for under La. R.S. 15:145 imposes upon the indigent defender boards the obligation to pay an attorney who undertakes the defense of indigents. Furthermore, this requirement does not limit payment of compensation to appointed lawyers who are not on a volunteer panel or list. See State v. Bryant, 324 So.2d 389 (La.1975). More recently, in the case decided by the Second Circuit, In re Compensation for Indigents' Criminal Defense. State of Louisiana v. Clark, 580 So.2d 1058 (La.App. 2 Cir.1991), the Court affirmed the trial court's denial of motions seeking reasonable compensation and expenses. In affirming, the Court noted that the attorneys had not shown that the amount of time expended was so "unduly burdensome so as to amount to an unconstitutional taking, deprivation, or involuntary servitude." Id. at 1061. This recent interpretation further indicates the trend and inclination to compensate indigent defense counsel under certain circumstances.
In addition, the Court noted that in some circumstances, it is within the court's power to order compensation from another branch of government. The judicial branch has wide ranging inherent powers to compel the governmental body it deems appropriate to reasonably compensate and reimburse *862 court appointed counsel, and this power cannot be limited by any other branch of government. See State in the Interest of Johnson, 475 So.2d 340 (La. 1985).
An interesting parallel to this case is State in Interest of HLD v. CDM, 563 So.2d 360 (La.App. 3 Cir.1990), where, in the context of termination of parental rights cases, we stated:
"Ordering attorneys to serve without compensation is hardly practical, especially considering modern economic conditions."
If this statement is true with respect to attorneys appointed to represent parents facing the loss of their children, then it should even be more true with respect to attorneys appointed to represent defendants facing the loss of their lives. The principles are consistent, despite the different type of legal representation.
II.
We first make the determination that the court appointments, from a non-voluntary list, to defend a person charged with a capital offense, without compensation, is, in itself, onerous and oppressive. Given the extreme nature of the burden of a capital case appointment on the court appointed lawyer, it is unrealistic to conclude otherwise. Testimony by Ms. Michele Fournet, an expert in capital defense, enlightened the court as to the financial and emotional burden of defending a capital murder case. According to Ms. Fournet, an average of five hundred hours is spent handling a capital case. This in itself has serious negative consequences on the law practice. Involvement in a capital case requires the attorney to forego profitable employment by other clients. By the same token, this involvement has a direct and substantial adverse impact on the attorney's ability to render competent counsel to existing clients, as well as draining his financial resources.
Furthermore, as a practical matter, the defense attorney in a capital case has the burden to show reasons why the client's life must be spared. No case can be more demanding of a lawyer's skill and time. The representation of a citizen facing the sanction of execution is the most awesome responsibility that a lawyer will shoulder in his or her legal career. The skills must encompass, at the least, a working knowledge of the complex constitutional, procedural, and scientific developments that are necessarily concomitant to any criminal case, particularly a capital case. The burden and costs of representing indigent defendants should be a public responsibility and not the responsibility of a select group of the bar.
CONCLUSION
As of the date of the hearing, March 22, 1991, Mr. Delphin had two uncompensated court appointments, and had devoted over one hundred and forty hours to Mr. Higginbotham's case alone. According to the Loyola Death Penalty Resource Survey, submitted by the Loyola Death Penalty Resource Center as amicus curiae, the average private practitioner in Louisiana charges $118 per hour.[7] Therefore, excluding his case-specific expenses, which Mr. Delphin testified amounted to $550.45, Mr. Delphin lost $16,520 as a direct result of his representation of Mr. Higginbotham.
As of the date of the hearing, Mr. Gray had three uncompensated court appointments and had devoted over eighty-three hours to Ms. Wigley's defense. Therefore, excluding his case-specific expenses, Mr. Gray lost $9,793 as a direct result of his representation of Ms. Wigley. Moreover, Mr. Gray is not financially able to represent Ms. Wigley as, at the time of the hearing, Mr. Gray was bankrupt. Furthermore, he had no associates employed at the time and had a caseload that numbered two hundred.
*863 As of the date of the hearing, Ms. Gray had three uncompensated court appointments, and had devoted over eighty-three hours to Ms. Wigley's case. Therefore, excluding her case-specific expenses, Ms. Gray lost $9,000 as a direct result of her representation of Ms. Wigley. Additionally, Ms. Gray's practice is primarily environmental and corporate law.
Mr. Dwight devoted very little time to Mr. Higginbotham's defense. He conceded at the hearing that the time he spent in Mr. Higginbotham's defense was principally making some phone calls, and consequently, we do not feel that he should be compensated as his efforts were minimal.
Although we have no evidence before us as to the total number of hours devoted to the case, we note that a guilty plea from Mr. Higginbotham was not accepted until April 17, 1991, and from Ms. Wigley on April 29, 1991. We find that not compensating these attorneys constitutes an abusive extension of their professional obligations, and we therefore order the Indigent Defender Board to compensate Mr. Gray, Ms. Gray, and Mr. Delphin the maximum amount paid to appointed voluntary attorneys. According to the record, voluntary attorneys are paid a $1,000 cap to represent a capital murder defendant.
WRIT MADE PEREMPTORY:
The trial court's denial of the motion for reasonable compensation is reversed; and,
IT IS ORDERED THAT the Indigent Defender Board pay relators, Alcide Gray, Anna R. Gray, and Mark A. Delphin, the maximum amount allowable according to law.
LABORDE, J., concurs and assigns written reasons.
MARCANTEL, J., concurs for reasons assigned.
LABORDE, Judge, concurring.
I respectfully concur.
I agree with the decision to compensate those volunteer attorneys appointed to represent indigents in capital murder trials, however, I would not limit such compensation to the statutory cap of $1,000.00 as mandated by La.R.S. 15:145 et seq. No compensation as well as compensation as low as $1,000.00 for representation of a capital murder defense is oppressive, and in my opinion, amounts to an unconstitutional taking of the attorney's property. An attorney's legal education is a distinct investment-backed expectation. See, Penn Central v. New York City, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978). An attorney should not be forced to forego representation of paying clients in order to conduct a proper defense in a capital murder defense case to the extent the attorney falls into economic hardship. Expert testimony in this case indicates a capital murder defense generally requires an average of 500 hours of work given that the trial is divided into two stages: the guilt phase and the sentencing phase. Furthermore, such a defense, if properly conducted, is generally so taxing on the attorney's law practice that the attorney must choose between properly representing the indigent and representing his own clients.
Because most attorneys cannot afford to forego representation of their paying clients, a court-appointment to represent an indigent often forces the attorney to violate the Rules of Professional Conduct he has sworn to uphold. Expert testimony of Professor Warren Mengis, ethics professor at the LSU Law Center, indicates uncompensated attorneys will probably not give sufficient attention to their capital court-appointments or their regular cases, thus violating Rule 1.3. This rule states in pertinent part: "A lawyer shall act with reasonable diligence and promptness in representing a client." Professor Mengis further testified an attorney compelled to represent an indigent in a capital murder case would also, in all probability, be forced to violate Rules 1.4 and 1.7. Rule 1.4 provides: "A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information". Rule 1.7 provides: "A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities *864 to another client to a third person ... unless the lawyer reasonably believes the representation will not be adversely affected..." Any capital appointment requires so much of an attorney's time that it is generally impossible for the attorney to represent his regular clients without his responsibility to that client being materially limited by the time he must devote to a capital murder defense. If an attorney is forced to neglect his regular clients as a result of a court-appointment, he cannot fulfill his ethical obligation to them. Likewise if the attorney is foregoing preparation for the indigent defendant's case in order to keep up with his private practice, he violates this ethical rule with respect to the indigent. Furthermore, criminal law is generally not an area of the law which a court-appointed attorney is familiar, and the attorney will have to work extra hard to properly represent the indigent which will cause him to further neglect his paying clients or do less than what is needed to properly represent the indigent defendant.
An attorney must uphold the Rules of Professional Conduct or risk losing his license to practice law. The evidence and expert testimony in this case indicates a noncompensated court-appointed attorney in a capital murder defense case is forced to choose between rendering ineffective assistance of counsel to the indigent defendant or risk violating these rules with respect to his regular clients. It is simply economically impossible in today's world for an attorney to maintain a stable private practice and earn a decent living while representing an indigent without compensation for a case generally requiring an average of about 500 hours. Reasonable compensation for these court-appointments will eliminate these problems and conflicts for court-appointed attorneys. While I commend the traditional view that attorneys as officers of the court have an ethical obligation to represent indigents, I do not believe such a view is realistic when applied to representation of an indigent in a capital murder trial. This type of representation requires a thorough knowledge of the very complicated criminal, constitutional, and procedural laws applicable to the case. Additionally, a thorough knowledge of today's modern scientific and technical developments, such as DNA testing which usually accompany a capital murder trial, may be necessary. Given the amount of time an attorney must invest to properly represent an indigent charged with capital murder, the attorney must be compensated for his time, skill, and knowledge. To hold otherwise allows the State of Louisiana to shift the responsibility of indigent capital murder defense to a very small portion of the bar. This responsibility should not burden just a portion of the bar, but should be the burden of the entire state. I therefore believe noncompensation or compensation in the ridiculously low amount of $1,000.00 for over 500 hours of legal work is oppressive.
I do not adopt any opinion regarding compensation for representation of indigents of any other matter as this court was only asked to address the issue of whether an attorney appointed to represent an indigent in a capital murder trial should be compensated for his time and expenses. I concur with the majority that such attorneys should be compensated, however, I would extend this compensation beyond the statutory cap of $1,000.00. I believe such low compensation not only violates the Taking Clause of the Federal and Louisiana Constitutions, but also forces such attorneys to violate the Rules of Professional Conduct thereby placing their license to practice law in jeopardy.
BERNARD N. MARCANTEL, Judge Pro Tem., concurring.
I believe requiring attorneys to furnish uncompensated services not only denies indigent defendants the assistance of competent counsel but also deprives attorneys of valuable property rights. While I fully subscribe to the reasoning set forth in the majority opinion, I believe we should also note the legislature's failure to follow the Louisiana Constitution of 1974, Article I, § 13, which clearly mandates the legislature to provide for a uniform system for securing and compensating qualified counsel for indigents.
*865 Surely no one can seriously argue that Louisiana Revised Statutes, Title 15, Section 146 provides a uniform system for funding the indigent defender boards. That system for funding makes the funds dependent upon the collection of special costs which are to be assessed for violations of certain state statutes and parish and municipal ordinances. The amount collected varies from court to court, except for those courts that are entirely exempt from collecting costs for the indigent defender boards. Thus, it is apparent that indigent defender boards could prosper in heavily populated jurisdictions and be unable to function in sparsely populated areas.
I respectfully suggest that the indigent defender system, as presently funded, is unconstitutional.
I foresee serious constitutional problems in administering our criminal justice system unless the legislature acts promptly to provide a uniform funding system.
NOTES
[*] Judge Bernard N. Marcantel and Judge Joseph E. Coreil, Retired, participated in this decision by appointment of the Louisiana Supreme Court as Judges Pro Tempore.
[1] State of Louisiana v. Robert Earle Higginbotham, Docket No. 9603-90, 14th Judicial District Court, Parish of Calcasieu.
[2] State of Louisiana v. Pennie Wigley, Docket No. 7563-90, 14th Judicial District Court, Parish of Calcasieu.
[3] Both defendants entered into a plea bargain after the March 22, 1991 hearing. Defendant Higginbotham plead guilty to manslaughter on April 17, 1991; defendant Wigley plead guilty to manslaughter on April 29, 1991. No motions for appeal have been filed. Therefore, the defendants' convictions are final and no further services are required by the court appointed attorneys.
[4] A separate opinion will be rendered in the consolidated case of State of Louisiana v. Pennie Wigley and Robert Earle Higginbotham, 599 So.2d 865 (La.App. 3 Cir.1992).
[5] "1. The lower court erred in compelling the court-appointed attorneys in these cases to represent indigent defendants without reasonable compensation and reimbursement for all reasonable expenses because such compelled representation, particularly in capital cases, is contrary to precedent of the Louisiana Supreme Court and, in capital cases, constitutes an abusive extension of the attorneys' professional responsibilities.
2. The lower court erred in refusing to order the governmental body it deemed appropriate to reasonably compensate and reimburse for all reasonable expenses the court-appointed attorneys because the State's failure to provide reasonable compensation and full reimbursement contravenes the doctrines of separation of powers and judicial independence.
3. The lower court erred in compelling the court-appointed attorneys to represent indigent defendants without reasonable compensation and reimbursement for all reasonable expenses because such compelled representation, particularly in capital cases, deprives the attorneys of due process of law.
4. The lower court erred in compelling the court-appointed attorneys in these cases to represent indigent defendants without reasonable compensation and reimbursement for all reasonable expenses because such compelled representation, particularly in capital cases, constitutes a taking under the Constitutions of Louisiana and these United States.
5. The lower court erred in compelling the court-appointed attorneys to represent indigent defendants without reasonable compensation and reimbursement for all reasonable expenses because such compelled representation, particularly in capital cases, deprives the attorneys of equal protection of the law.
6. The lower court erred in compelling the court-appointed attorneys to represent indigent defendants without reasonable compensation and reimbursement for all reasonable expenses because such compelled representation, particularly in capital cases, constitutes involuntary servitude.
7. The lower court erred in compelling the court-appointed attorneys to represent indigent defendants without reasonable compensation and reimbursement for all reasonable expenses because such compelled representation, particularly in capital cases, violates the defendants' rights under the Louisiana Constitution to compensated counsel, and their rights under the Louisiana and United States Constitutions to effective assistance of counsel and due process of law.
8. The lower court erred in compelling the court-appointed attorneys to represent indigent defendants without reasonable compensation and reimbursement for all reasonable expenses because such compelled representation, particularly in capital cases, deprives defendants of their rights to equal protection of law."
[6] Arnold v. State of Arkansas, 306 Ark. 294, 302-303, 813 S.W.2d 770 (1991); State ex rel. Stephan v. Smith, 242 Kan. 336, 747 P.2d 816 (1987); Jackson v. State, 413 P.2d 488 (Alaska 1967); Smith v. State, 118 N.H. 764, 394 A.2d 834 (1978); State v. Rush, 46 N.J. 399, 217 A.2d 441 (1966); State v. Lynch, 796 P.2d 1150 (Okla.1990).
[7] "The Resource Center's Survey on Court Appointed Counsel in Capital Murder Cases was administered under the direction of undersigned counsel between April 11, 1991 and May 10, 1991. Over 200 private attorneys were asked to answer close ended questions regarding their appointments in capital cases; 38 qualified respondents completed surveys and the data was analyzed using established methods of statistical analysis."
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181 U.S. 183
21 S.Ct. 555
45 L.Ed. 810
CHARLES W. LYNDE, Plff. in Err.,v.MARY W. LYNDE. MARY W. LYNDE, Plff. in Err., v. CHARLES W. LYNDE.
Nos. 305 and 369.
Submitted November 5, 1900.
This was an action brought May 26, 1898, in the supreme court for the county and state of New York, on a decree of the court of chancery of New Jersey, of December 28, 1897, by which it was ordered that the plaintiff was entitled to recover of the defendant the sum of $7,840 for alimony at the rate of $80 per week from February 11, 1896, to the date of the decree, and the further sum of $80 per week permanent alimony from the date of the decree, the said weekly payments to be valid liens on the defendant's real estate; that the defendant give bond to the plaintiff in the sum of $100,000 to secure the payment of the sums of money directed to be paid; and to pay costs, taxed at $136.07, and a counsel fee of $1,000; and that on his default to pay any of the 'foregoing sums of money' or to give bond, application might be made for the issue of a writ of sequestration against him, or for an order appointing a receiver of his property, and enjoining his transfer thereof. The record showed the following material facts:
On November 18, 1892, the plaintiff in this action filed her bill for a divorce in the court of chancery of New Jersey, setting forth her marriage with the present defendant on March 25, 1884, in New Jersey, where she has since resided; and praying for a divorce from the bond of matrimony for desertion for two years, and for reasonable alimony. The defendant was not served with process other than by publication, and did not appear or answer the bill. On August 7, 1893, a decree of divorce was entered not mentioning alimony.
On February 10, 1896, the plaintiff, alleging that this decree was incomplete through the neglect of her counsel, filed a petition in that court, praying for an opening and amendment of the decree by allowing reasonable alimony. Upon this petition a rule to show cause was entered, and it was ordered that copies of the petition and affidavits accompanying it be served on the defendant.
In answer to the rule the defendant appeared generally, and filed an affidavit declaring that he was a resident of New York; 'that this defendant was by the decree of this court divorced from said petitioner' on August 7, 1893, 'and since that time has been married again to another woman;' 'that the decree for divorce in said cause was purposely drawn without providing for or reserving any alimony;' and 'that he is financially unable to pay alimony.'
On October 26, 1896, the court of chancery of New Jersey amended the decree of August 7, 1893, by ordering that the petitioner 'have the right to apply to this court at any time hereafter, at the foot of this decree, for reasonable alimony, and for such other relief in the premises touching alimony as may be equitable and just; and this court reserves the power to make such order or decree as may be necessary to allow and compel the payment of alimony to the petitioner by defendant, or to refuse to allow alimony.' 54 N. J. Eq. 473, 35 Atl. 641. On appeal this order was affirmed by the New Jersey court of errors and appeals. 55 N. J. Eq. 591, 39 Atl. 1114. Thereupon an order of reference, based on all prior proceedings and on notice to the solicitor for the defendant, was made by the court of chancery to a master to find the amount of alimony, if any, due to the plaintiff. Neither the defendant not his solicitor appeared at the hearing before the master; and on December 28, 1897, the court of chancery, confirming the master's report, made the decree now sued on.
That court on its being made to appear that a certified copy of this decree was personally served on the defendant, and that he refused to comply with said decree, ordered that a receiver be appointed to take possession of all the defendant's real and personal property in New Jersey, to apply it to the payment of the plaintiff's claim. The receiver, however, was 'unable to obtain possession of any property or assets of said defendant in the state of New Jersey;' nor had the defendant 'complied with said decree in any respect.'
The supreme court of New York decreed that the plaintiff was 'entitled to a judgment against the defendant, enforcing against said defendant the decree of the court of chancery of New Jersey, dated December 28, 1897,' and the order appointing a receiver, and enjoining the defendant from transferring his property; also that the plaintiff was entitled to judgment that the defendant pay her $8,976.07, 'being alimony, counsel fee, and costs, due under said decree,' and interest thereon from its date; also the 'sum $4,400, being the amount of weekly alimony which has accrued since said decree in accordance with the terms thereof,' and interest thereon; also $80 a week from the date of this decision, 'as and for permanent alimony,' bearing interest until paid; that he give bond 'in the sum of $100,000 to secure payment of the several sums of money aforesaid;' and that, if the defendant fail to comply with this decision, 'a receiver be appointed, ancillary to the receiver heretofore appointed by the court of chancery of New Jersey as aforesaid, of the real and personal property of the defendant within the state of New York.'
On appeal by the defendant to the appellate division, the decree was modified so as to allow the plaintiff to recover only $8,840 alimony, the amount declared by the New Jersey court as due and payable at the date of its decree. Thus modified, the judgment of the supreme court was affirmed. 41 App. Div. 280, 58 N. Y. Supp. 567.
From the judgment of the appellate division both parties appealed to the court of appeals, which affirmed the judgment of the appellate division. 162 N. Y. 405, 48 L. R. A. 679, 56 N. E. 979. Each party sued out a writ of error from this court.
Mr. George S. Ingraham for Charles W. Lynde.
Messrs. James Westervelt and Matthew C. Fleming for Mary W. Lynde.
Mr. Justice Gray, after stating the case as above, delivered the opinion of the court:
1
The husband, as the record shows, having appeared generally in answer to the petition for alimony in the court of chancery in New Jersey, the decree of that court for alimony was binding upon him. Laing v. Rigney, 160 U. S. 531, 40 L. ed. 525, 16 Sup. Ct. Rep. 366. The court of New York having so ruled, thereby deciding in favor of the full faith and credit claimed for that decree under the Constitution and laws of the United States, its judgment on that question cannot be reviewed by this court on writ of error. Gordon v. Caldcleugh, 3 Cranch. 268, 2 L. ed. 436; Missouri v. Andriano, 138 U. S. 496, 34 L. ed. 1012, 11 Sup. Ct. Rep. 385. The husband having appeared and been heard in the proceeding for alimony, there is no color for his present contention that he was deprived of his property without due process of law. Nor does he appear to have made any such contention in the courts of the state. His writ of error therefore must be dismissed.
2
By the Constitution and the act of Congress requiring the faith and credit to be given to a judgment of the court of another state that it has in the state where it was rendered, it was long ago declared by this court: 'The judgment is made a debt of record, not examinable upon its merits; but it does not carry with it, into another state, the efficacy of a judgment upon property or persons, to be enforced by execution. To give it the force of a judgment in another state, it must be made a judgment there, and can only be executed in the latter as its laws may permit.' M'Elmoyle v. Cohen, 13 Pet. 312, 325, 10 L. ed. 177; Thompson v. Whitman, 18 Wall. 457, 463, 21 L. ed. 897, 899; Wisconsin v. Pelican Ins. Co. 127 U. S. 265, 292, 32 L. ed. 239, 244, 8 Sup. Ct. Rep. 1370; Bullock v. Bullock, 51 N. J. Eq. 444, 27 Atl. 435, and 52 N. J. Eq. 561, 27 L. R. A. 213, 30 Atl. 676.
3
The decree of the court of chancery of New Jersey, on which this suit is brought, provides, first, for the payment of $7,840 for alimony already due, and $1,000 counsel fee; second, for the payment of alimony since the date of the decree at the rate of $80 per week; and, third, for the giving of a bond to secure the payment of these sums, and, on default fault of payment or of giving bond, for leave to apply for a writ of sequestration, or a receiver and injunction.
4
The decree for the payment of $8,840 was for a fixed sum already due, and the judgment of the court below was properly restricted to that. The provision of the payment for alimony in the future was subject to the discretion of the court of chancery of New Jersey, which might at any time alter it, and was not a final judgment for a fixed sum. The provisions for bond, sequestration, receiver, and injunction, being in the nature of execution, and not of judgment, could have no extraterritorial operation; but the action of the courts of New York in these respects depended on the local statutes and practice of the state, and involved no Federal question.
5
On the writ of error of the wife, therefore,
6
The judgment is affirmed.
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78 So.3d 959 (2011)
Ex parte KOHLBERG KRAVIS ROBERTS & COMPANY, L.P., et al.
(In re 27001 Partnership et al. v. Kohlberg Kravis Roberts & Company, L.P., et al.).
Ex parte Ronald G. Bruno.
(In re 27001 Partnership et al. v. Kohlberg Kravis Roberts & Company, L.P., et al.).
1091191 and 1091206.
Supreme Court of Alabama.
August 19, 2011.
*962 Michael A. Florie and Jay M. Ezelle of Starnes Davis Florie LLP, Birmingham; and Paul C. Curnin, James G. Gamble, Bryce L. Friedman, and George S. Wang of Simpson Thacher & Bartlett LLP, New York, New York, for petitioners Kohlberg Kravis Roberts & Company, L.P., KKR Associates, L.P., KKR Partners II, L.P., Crimson Associates, L.P., Henry R. Kravis, George R. Roberts, Paul E. Raether, James H. Greene, Jr., Nils P. Brous, and Robert Tobin.
Mac M. Moorer, James F. Hughey III, Tenley E. Armstrong, and James W. Gibson of Lightfoot, Franklin & White, L.L.C., Birmingham, for petitioner Ronald G. Bruno.
James L. North and J. Timothy Francis of James L. North & Associates, Birmingham; and Leo R. Beus, Quinton F. Seamons, and Scot C. Stirling of Beus Gilbert PLLC, Scottsdale, AZ, for respondent.
MURDOCK, Justice.
Kohlberg Kravis Roberts & Co., L.P. ("KKR"), KKR Associates, LP ("KKR Associates"), KKR Partners II, LP ("KKR Partners II"), and Crimson Associates, LP ("Crimson Associates"), and individual defendants Paul Raether, James Greene, Jr., George Roberts, Henry Kravis, Nils Brous, and Robert Tobin petition this Court in case no. 1091191 for a writ of mandamus directing the Jefferson Circuit Court to vacate its order denying the defendants' motion seeking the dismissal of the plaintiffs' complaint on the ground of lack of personal jurisdiction. Additionally, in case no. 1091206, individual defendant Ronald G. Bruno petitions this Court for a writ of mandamus directing the Jefferson Circuit Court to vacate a separate order by which it denied a motion seeking the dismissal of the plaintiffs' claims under the Alabama Securities Act, § 8-6-1 et seq., Ala.Code 1975 ("the ASA"). We deny both petitions.
I. Facts and Procedural History
KKR is a Delaware limited partnership having its principal place of business in New York, New York. KKR's affiliates KKR Associates, KKR Partners II, and Crimson Associatesare Delaware limited *963 partnerships with their principal places of business also in New York.[1] KKR Associates is the sole general partner of KKR Partners II and Crimson Associates. KKR and KKR Associates have the same 11 general partners, who include Greene, Raether, Roberts, and Kravis. Before the events that culminated in this action, KKR held significant ownership interests in a large number and wide variety of businesses throughout the nation, including supermarket-grocery chains doing business in multiple states.[2]
The plaintiffs in this action are 46 individuals, partnerships, corporations, foundations, trusts, and retirement and pension funds located throughout the country that invested in certain promissory notes issued as part of a leveraged recapitalization of Bruno's, Inc. ("Bruno's"). At the time of the events at issue, Bruno's was an Alabama corporation engaged in the supermarket-grocery business with its headquarters and significant operations and assets located throughout Alabama.
The plaintiffs allege that in December 1994, Ronald G. Bruno, who at the time was the chairman and chief executive officer ("CEO") of Bruno's, invited representatives of KKR to Birmingham to conduct meetings concerning a possible takeover of Bruno's. Raether and Greene represented KKR in those meetings. In April 1995, KKR agreed in principle that its affiliate, Crimson Associates, would acquire more than 80% of the outstanding common stock of Bruno's.
In the spring of 1995, KKR hired Deloitte & Touche LLP ("Deloitte"), an accounting firm, to conduct a due-diligence investigation of Bruno's financial, accounting, and operational affairs, including its financial condition and financial reporting. The investigation included the physical inspection of Bruno's assets in Alabama, including warehouses and grocery stores, and the examination in Alabama of Bruno's books and records.
On May 8, 1995, Deloitte prepared a written report for KKR and other defendants entitled "Project Crimson Due Diligence" ("Project Crimson Report"), which documented Deloitte's findings that Bruno's had serious problems in its facilities, financial condition, and financial reporting.[3] The Project Crimson Report detailed, among other things, that Bruno's had overstated the worth of various assets and had understated its depreciation and self-insurance reserves and stated that a downward adjustment to Bruno's net worth of $55.6 million was necessary.
Despite the negative findings in the Project Crimson Report, KKR decided to proceed with its acquisition of Bruno's. The plaintiffs allege that KKR determined that the best way to effect the acquisition was through a leveraged recapitalization to be executed through the efforts of KKR Associates, KKR Partners II, and Crimson Associates. In conjunction with the leveraged recapitalization, the acquisition of *964 more than 80% of Bruno's common stock was accomplished on August 18, 1995.
The plaintiffs allege that KKR used the knowledge it gained from the Project Crimson Report to negotiate a price reduction of over $50 million for Bruno's common stock in effecting its takeover of Bruno's. The plaintiffs allege that information contained in the report also caused KKR to realize that acquiring Bruno's presented significant financial risks and that the acquisition would require a substantial amount of debt financing, including the sale of notes to the public.
In order to accomplish the leveraged recapitalization, KKR had Bruno's and its underwriters, including BT Securities Corporation ("BT Securities"), effect a public offering of $400 million in principal amount of notes described as "10-1/2% Senior Subordinated Notes due 2005" ("the notes"). In preparation for the sale, BT Securities conducted its own due diligence of Bruno's in Birmingham. It is undisputed that the sale of the notes occurred in order to make possible the acquisition of Bruno's.
The plaintiffs allege that the defendants made material, fraudulent misrepresentations to the plaintiffs' investment money manager, W.R. Huff Asset Management Co., LLC ("Huff"), which misrepresentations induced Huff to purchase in November 1995, on the plaintiffs' behalf, over $190 million in principal amount of the notes. The misrepresentations were made in the form of a prospectus concerning Bruno's ("the prospectus") made available to Huff in August 1995, in public filings made in September 1995, in presentations made to Huff at a so-called "road show" in New York City attended by representatives of KKR, Bruno's, and underwriters for Bruno's, and in individual meetings at Huff's offices in Morristown, New Jersey, attended by Greene and Brous of KKR, Ronald Bruno of Bruno's, and representatives of the underwriters. The plaintiffs allege that the defendants knew that their representations in the prospectus and in its public filings in September 1995 directly contradicted the financial information contained in the Project Crimson Report. Specifically, the plaintiffs allege that Bruno's made a total of $243.6 million in write-downs in 1996 and 1997, and that, at a minimum, $185.6 million of these write-downs should have been taken and disclosed at the time Huff was presented the prospectus in August 1995 and when the public filings were made in September of the same year.
The original complaint in this action was filed by Huff in the Jefferson Circuit Court on August 6, 1999. The case was removed to the United States Bankruptcy Court for the Northern District of Alabama ("the bankruptcy court") because Bruno's had filed a petition in bankruptcy and the action was related to Bruno's bankruptcy proceedings. On April 24, 2000, Huff filed a first amended complaint in the bankruptcy court. Huff submitted a second amended complaint on May 25, 2000, that streamlined the allegations. On January 4, 2001, the bankruptcy court returned this case to the Jefferson Circuit Court. On November 14, 2001, the defendants removed the case to the United States District Court for the Northern District of Alabama ("the district court"). On November 5, 2002, while the action was pending in the district court, Huff filed a third amended complaint designed to avoid the preclusion of its claims pursuant to the Securities Litigation Uniform Standards Act of 1998, 15 U.S.C. §§ 77p and 78bb. In April 2005, before the district court had ruled upon the third amended complaint, Huff sought leave to file a fourth amended complaint.
On February 7, 2005, the district court struck the third amended complaint and *965 denied Huff's request for leave to file the fourth amended complaint. On December 11, 2006, the United States Court of Appeals for the Eleventh Circuit vacated the district court's denial of Huff's motion for leave to file the fourth amended complaint, and it remanded the action. On June 22, 2007, the district court granted leave for the filing of the fourth amended complaint. The defendants appealed the ruling to the Eleventh Circuit Court of Appeals, which dismissed the appeal for lack of jurisdiction. Following that ruling, the case was remanded to the Jefferson Circuit Court. On August 29, 2009, the circuit court consolidated Huff's action with an action the remaining plaintiffs had filed in 2004 against three firms that served as the underwriters for the sale of the notes that facilitated the acquisition of Bruno'sBT Securities, Chemical Securities, Inc., and Salomon Brothers, Inc.as well as against accounting firms Deloitte and Arthur Andersen, L.P.
In the fourth amended complaint, the plaintiffs asserted claims relating to the sale of the notes, alleging fraudulent suppression; fraudulent, reckless, and negligent misrepresentation; fraudulent and reckless deceit; violations of the Alabama Securities Act ("the ASA"); breach of fiduciary duty; civil conspiracy; and aiding and abetting on all other claims. The plaintiffs allege that KKR has managed and controlled Bruno's since the leveraged-recapitalization takeover in August 1995 and that its affiliates were organized in part or exclusively for holding the controlling interest in Bruno's and for directing and controlling Bruno's on behalf of the general partners of KKR.[4] All the named individual defendants became members of the Bruno's board of directors at the time of KKR's leveraged-recapitalization takeover. Ronald Bruno was chairman of the Bruno's board of directors and its CEO in September 1994, and he remained a member of its board of directors through its declaration of bankruptcy in February 1998.
As previously noted, the defendants filed motions in the circuit court seeking the dismissal of the plaintiffs' claims for lack of personal jurisdiction and seeking the dismissal of the plaintiffs' complaint, including allegations of violations of the ASA, for failure to state a claim. As also noted, the circuit court entered an order denying the defendant's motions in all respects, concluding, among other things, that it had specific personal jurisdiction over all the defendants and that the ASA applied to the transactions at issue in this action. As noted, the petitions before us ask us to vacate the circuit court's order as it relates to both of these conclusions.
II. Standard of Review
"`The writ of mandamus is a drastic and extraordinary writ, to be "issued only when there is: 1) a clear legal right in the petitioner to the order sought; 2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; 3) the lack of another adequate remedy; and 4) properly invoked jurisdiction of the court." Ex parte United Serv. Stations, Inc., 628 So.2d 501, 503 (Ala.1993); see also Ex parte Ziglar, 669 So.2d 133, 134 (Ala. 1995).' Ex parte Carter, [807 So.2d 534,] 536 [(Ala.2001)]."
Ex parte McWilliams, 812 So.2d 318, 321 (Ala.2001).
*966 "Subject to certain narrow exceptions..., we have held that, because an `adequate remedy' exists by way of an appeal, the denial of a motion to dismiss or a motion for a summary judgment is not reviewable by petition for writ of mandamus." Ex parte Liberty Nat'l Life Ins. Co., 825 So.2d 758, 761-62 (Ala.2002). One such exception is a motion to dismiss for lack of personal jurisdiction. See, e.g., Ex parte Citizens Prop. Ins. Corp., 15 So.3d 511, 515 (Ala.2009) (stating that "[a] petition for a writ of mandamus can be used to challenge the denial of a motion to dismiss for lack of personal jurisdiction.").
"A de novo standard of review applies when an appellate court reviews a trial court's judgment on a motion to dismiss for lack of in personam jurisdiction. Hiller Invs. Inc. v. Insultech Group, Inc., 957 So.2d 1111 (Ala.2006); Elliott v. Van Kleef, 830 So.2d 726 (Ala.2002). The plaintiff has the burden of proving that the trial court has personal jurisdiction over the defendant. Ex parte Covington Pike Dodge, Inc., 904 So.2d 226 (Ala.2004).
"`"In considering a Rule 12(b)(2), Ala. R. Civ. P., motion to dismiss for want of personal jurisdiction, a court must consider as true the allegations of the plaintiff's complaint not controverted by the defendant's affidavits. Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253 (11th Cir. 1996), and Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829 (11th Cir. 1990), and `where the plaintiff's complaint and the defendant's affidavits conflict, the ... court must construe all reasonable inferences in favor of the plaintiff.' Robinson, 74 F.3d at 255 (quoting Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990)). `For purposes of this appeal [on the issue of in personam jurisdiction] the facts as alleged by the... plaintiff will be considered in a light most favorable to him [or her].' Duke v. Young, 496 So.2d 37, 38 (Ala.1986)."
"`Ex parte McInnis, 820 So.2d 795, 798 (Ala.2001).'
"Ex parte Puccio, 923 So.2d 1069, 1072 (Ala.2005). When a defendant files a motion to dismiss for lack of personal jurisdiction and supports that motion with an affidavit, the plaintiff is then required to controvert that affidavit with his or her own affidavit or other competent evidence to survive the motion to dismiss. Ex parte Duck Boo Int'l Co., 985 So.2d 900 (Ala.2007)."
J.C. Duke & Assocs. Gen. Contractors, Inc. v. West, 991 So.2d 194, 196-97 (Ala.2008).
III. Analysis
A. Case no. 91191: The Circuit Court's Denial of the Defendants' Motion to Dismiss for Lack of Personal Jurisdiction
1. The Trial Court's Order and the Positions of the Parties.
In concluding that it had specific personal jurisdiction over the defendants, the circuit court first noted that "the gravamen of the allegations contained in Plaintiffs' Fourth Amended Complaint" was that
"[t]he alleged deficiencies in the financial condition of Bruno's Inc. identified in the Project Crimson Report are alleged to have been known by the non-resident individual Defendants either through their participation in the preparation of the said due diligence report known as Project Crimson; their alleged[ly] becoming aware of the contents of the report; or their alleged awareness that the Prospectus, issued in conjunction with the underwriting and marketing *967 of the Bruno's Notes to Plaintiffs, allegedly materially misstat[ed] the true financial condition of Bruno's Inc. to Plaintiffs' financial detriment."
The circuit court reasoned that based on these allegations, the "[p]laintiffs' complaint provides a basis for specific in personam jurisdiction" because the plaintiffs pleaded "that the actions of Defendants were purposeful and were directed toward an Alabama corporation. All acts and omissions alleged against Defendants are allegedly acts and omissions undertaken in the process of taking over the management and control of an Alabama Corporation, Bruno's Inc."
The defendants counter that the alleged misrepresentations stemming from the prospectus, the public filings, the "road show," and the one-on-one meetings with Huff did not take place in Alabama. They argue that the Project Crimson Report and the acquisition of Bruno's are irrelevant to personal jurisdiction because, the defendants argue, they do not give rise to the plaintiffs' claims. Instead, they argue, the plaintiffs' claims arise from alleged misrepresentations made outside Alabama: the prospectus was distributed in relation to the nationwide sale of the notes and not specifically targeted to Alabama residents, the "road show" occurred in New York, and the one-on-one meetings with Huff occurred in New Jersey. The defendants emphasize that none of them reside in Alabama or have contacts with Alabama that relate to the allegations in the action and that none of the plaintiffs reside in Alabama. Thus, they contend that Alabama has no interest in adjudicating this action.
In support of their statement that none of the defendants reside in Alabama or have contacts with Alabama that relate to the plaintiffs' allegations of misrepresentation, individual defendants Raether, Greene, Kravis, Brous, Roberts, and Tobin submitted nearly identical affidavits in the circuit court in support of the defendants' motion to dismiss for lack of personal jurisdiction. All but one of these defendants admitted being a member of Bruno's board of directors from 1995 to 1999,[5] but they denied "approv[ing] and/or execut[ing] any Bruno's public filings while in Alabama." All of them denied "target[ing] any activities relating to Bruno's securities filings or the sale of Bruno's notes toward Alabama." All of them also denied that Bruno's or any of the KKR affiliates was a sham corporation, i.e., that either Bruno's or the KKR affiliates were alter egos of KKR. All of them stated that they committed no wrongdoing in relation to the Bruno's transaction. Kravis stated that he was not a member of the KKR team assigned to the Bruno's transaction and that he never traveled to Alabama in connection with the acquisition of Bruno's. Kravis admitted attending one Bruno's board meeting in Alabama after the acquisition occurred. Roberts stated that he was not a member of the KKR team assigned to the Bruno's transaction. He also stated that he never traveled to Alabama in connection with the acquisition or ownership of Bruno's, nor did he travel to Alabama in connection with his service on Bruno's board of directors. Tobin stated that he did not travel to Alabama in connection with the acquisition of Bruno's and that the only contacts he had with Alabama related to the action consisted of acts taken in his fiduciary capacity as a director of Bruno's and/or as an executive at The Stop & Shop Supermarket Company, which was then a KKR affiliate. Raether, Greene, and Brous admitted that they were part of the KKR team assigned to the Bruno's *968 transaction. Each of them also stated that the only contact he had had with Alabama that related to the action consisted of acts taken in his fiduciary capacity as a KKR executive and/or as a member of the Bruno's board of directors.
The aforesaid affidavits do not mention that Kravis, Roberts, Greene, and Raether were members of KKR's board of directors as well as on the board of directors of KKR Associates. KKR Associates was the sole general partner of Crimson Associates and KKR Partners II, the entities formed for the purpose of facilitating the acquisition of a controlling majority share of common stock in Bruno's. The affidavits also contain no statements challenging the plaintiffs' allegation that each of these individuals either contributed to the production of the prospectus or approved of its distribution in their capacities as members of KKR's board of directors. Likewise, these individual defendants do not deny the plaintiffs' allegation that they were aware of the contents of the Project Crimson Report at the time the prospectus was produced and distributed to the public for the purpose of soliciting sales of the notes.[6]
The plaintiffs' arguments echo the trial court's reasoning in that the plaintiffs focus on the fact that their allegations relate to the acquisition of an Alabama corporation. The plaintiffs contend that the defendants' actions have sufficient contacts with Alabama because Bruno's is an Alabama corporation that, at the time of the acquisition, was the largest supermarket operator in Alabama and owned and operated a large number of facilities throughout the State. The plaintiffs emphasize that all the allegations involve actions taken by the defendants to purchase Bruno's or in furtherance of advertising and selling the notes, which financed the purchase. Those alleged actions include: meeting with Ronald Bruno in Alabama to work out preliminary details of KKR's acquisition of Bruno's; sending agents to Alabama to investigate the financial condition of Bruno's; obtaining the Project Crimson Report that detailed the financial condition of Bruno's; causing Bruno's to offer for sale $400 million in notes to help with the leveraged recapitalization; preparing and distributing a prospectus that deliberately failed to reveal the truth about the financial condition of Bruno's in order to facilitate the sale of the notes; actively soliciting Huff to purchase notes of the Alabama corporation through a "road show" and one-on-one meetings; and participating in Bruno's board meetings and in the approval of Bruno's public filings following the acquisition that deliberately delayed revealing the Alabama corporation's actual financial condition until after the plaintiffs had purchased the notes.
2. Application of Fundamental Principles of In Personam Jurisdiction.
Application of established principles governing the assertion of jurisdiction by Alabama courts over out-of-state defendants begins with an acknowledgment of Alabama's "long-arm rule":
"The extent of an Alabama court's personal jurisdiction over a person or corporation is governed by Rule 4.2, Ala. R. Civ. P., Alabama's `long-arm rule,' bounded by the limits of due process under the federal and state constitutions. Sieber v. Campbell, 810 So.2d 641 (Ala.2001). Rule 4.2(b), as amended in 2004, states:
"`(b) Basis for Out-of-State Service. An appropriate basis exists for *969 service of process outside of this state upon a person or entity in any action in this state when the person or entity has such contacts with this state that the prosecution of the action against the person or entity in this state is not inconsistent with the constitution of this state or the Constitution of the United States....'
"In accordance with the plain language of Rule 4.2, both before and after the 2004 amendment, Alabama's long-arm rule consistently has been interpreted by this Court to extend the jurisdiction of Alabama courts to the permissible limits of due process. Duke v. Young, 496 So.2d 37 (Ala.1986); DeSotacho, Inc. v. Valnit Indus., Inc., 350 So.2d 447 (Ala.1977). As this Court reiterated in Ex parte McInnis, 820 So.2d 795, 802 (Ala.2001) (quoting Sudduth v. Howard, 646 So.2d 664, 667 (Ala.1994)), and even more recently in Hiller Investments Inc. v. Insultech Group, Inc., 957 So.2d 1111, 1115 (Ala.2006): `Rule 4.2, Ala. R. Civ. P., extends the personal jurisdiction of the Alabama courts to the limit of due process under the federal and state constitutions.' (Emphasis added.)"
Ex parte DBI, Inc., 23 So.3d 635, 643 (Ala.2009).
In the oft-cited cases of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), and Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), the United States Supreme Court laid out fundamental principles upon which a decision as to in personam jurisdiction over a nonresident defendant must rest.
"It is evident that the criteria by which we mark the boundary line between those activities which justify the subjection of a corporation to suit, and those which do not, cannot be simply mechanical or quantitative. The test is not merely, as has sometimes been suggested, whether the activity, which the corporation has seen fit to procure through its agents in another state, is a little more or a little less. St. Louis S.W.R. Co. v. Alexander, supra, 227 U.S. [218,] 228 [33 S.Ct. 245, 57 L.Ed. 486 (1912)], Ann. Cas.1915B, 77; International Harvestor [Harvester] Co. v. Kentucky, supra, 234 U.S. [579,] 587 [34 S.Ct. 944, 58 L.Ed. 1479 (1914)]. Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure."'
International Shoe, 326 U.S. at 319, 66 S.Ct. 154 (emphasis added).
"As has long been settled, and as we reaffirm today, a state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist `minimum contacts' between the defendant and the forum State. International Shoe Co. v. Washington, [326 U.S. 310] at 316[ (1945)]. The concept of minimum contacts, in turn, can be seen to perform two related, but distinguishable, functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.
"The protection against inconvenient litigation is typically described in terms of `reasonableness' or `fairness.' We have said that the defendant's contacts with the forum State must be such that maintenance of the suit `does not offend *970 "traditional notions of fair play and substantial justice."' International Shoe Co. v. Washington, supra, at 316, quoting Milliken v. Meyer, 311 U.S. 457, 463 [61 S.Ct. 339, 85 L.Ed. 278] (1940). The relationship between the defendant and the forum must be such that it is `reasonable ... to require the corporation to defend the particular suit which is brought there.' 326 U.S., at 317. Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum State's interest in adjudicating the dispute, see McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957); the plaintiff's interest in obtaining convenient and effective relief, see Kulko v. California Superior Court, supra, 436 U.S.[ 84], at 92 [98 S.Ct. 1690, 56 L.Ed.2d 132 (1978)], ...; the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies, see Kulko v. California Superior Court, supra, 436 U.S., at 93, 98.
World-Wide Volkswagen Corp., 444 U.S. at 291-92, 100 S.Ct. 559 (emphasis added).
"The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful `contacts, ties, or relations.' International Shoe Co. v. Washington, 326 U.S.[ 310], at 319[ (1945)]. By requiring that individuals have `fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign,' Shaffer v. Heitner, 433 U.S. 186, 218 [97 S.Ct. 2569, 53 L.Ed.2d 683] (1977) (Stevens, J., concurring in judgment), the Due Process Clause `gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit,' World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
"....
"... Jurisdiction is proper, ... where the contacts proximately result from actions by the defendant himself that create a `substantial connection' with the forum State."
Burger King Corp., 471 U.S. at 471-75, 105 S.Ct. 2174 (final emphasis added; footnotes omitted).
In Elliott v. Van Kleef, 830 So.2d 726, 730-31 (Ala.2002), this Court further discussed the fundamental principles outlined in the foregoing cases:
"The Due Process Clause of the Fourteenth Amendment permits a forum state to subject a nonresident defendant to its courts only when that defendant has sufficient `minimum contacts' with the forum state. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The critical question with regard to the nonresident defendant's contacts is whether the contacts are such that the nonresident defendant `"should reasonably anticipate being haled into court"' in the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). The sufficiency of a party's contacts are assessed as follows:
"`Two types of contacts can form a basis for personal jurisdiction: general contacts and specific contacts. General contacts, which give rise to general personal jurisdiction, consist *971 of the defendant's contacts with the forum state that are unrelated to the cause of action and that are both "continuous and systematic." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 9, 415, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); [citations omitted]. Specific contacts, which give rise to specific jurisdiction, consist of the defendant's contacts with the forum state that are related to the cause of action. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-75, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). Although the related contacts need not be continuous and systematic, they must rise to such a level as to cause the defendant to anticipate being haled into court in the forum state. Id.'
"Ex parte Phase III Constr., Inc., 723 So.2d 1263, 1266 (Ala. 1998) (Lyons, J., concurring in the result). Furthermore, this Court has held that, for specific in personam jurisdiction, there must exist `a clear, firm nexus between the acts of the defendant and the consequences complained of.' Duke v. Young, 496 So.2d 37, 39 (Ala.1986). See also Ex parte Kamilewicz, 700 So.2d 340, 345 n. 2 (Ala.1997).
"In the case of either general in personam jurisdiction or specific in personam jurisdiction, `[t]he "substantial connection" between the defendant and the forum state necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State.' Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 112, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). This purposeful-availment requirement assures that a defendant will not be haled into a jurisdiction as a result of `"the unilateral activity of another person or a third person."' Burger King, 471 U.S. at 475, 105 S.Ct. 2174, 85 L.Ed.2d 528, quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).
Elliott v. Van Kleef, 830 So.2d 726, 730-31 (Ala.2002) (emphasis omitted).
"Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with `fair play and substantial justice.' International Shoe Co. v. Washington, 326 U.S.[ 310], at 320[ (1945)]. Thus, courts in `appropriate case[s]' may evaluate `the burden on the defendant,' `the forum State's interest in adjudicating the dispute,' `the plaintiff's interest in obtaining convenient and effective relief,' `the interstate judicial system's interest in obtaining the most efficient resolution of controversies,' and the `shared interest of the several States in furthering fundamental substantive social policies.' World-Wide Volkswagen Corp. v. Woodson, supra, 444 U.S.[ 286], at 292[ (1980)]. These considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser showing of minimum contacts than would otherwise be required. See, e.g., Keeton v. Hustler Magazine, Inc., supra, 465 U.S.[ 770], at 780[ (1984)]; Calder v. Jones, supra, 465 U.S.[ 783], at 788-789[ (1984)]; McGee v. International Life Insurance Co., supra, 355 U.S.[ 220], at 223-224[ (1957)]."
Burger King Corp., 471 U.S. at 476-77, 105 S.Ct. 2174.
With respect to the question whether the defendants in this case have "purposefully established minimum contacts within the forum state," Burger King Corp., 471 U.S. at 476, 105 S.Ct. 2174, the *972 defendants repeatedly emphasize that none of the plaintiffs, and only one of the defendantsRonald Brunoreside in Alabama. The defendants' effort to limit our focus only to the places of residence of the plaintiffs who have allegedly been injured by the acts of the defendants, and the places of residence of the defendants themselves, is misplaced.[7]
"Rule 4.2, Ala. R. Civ. P., extends the personal jurisdiction of Alabama courts to the limit of due process under the federal and state constitutions. Sieber [v. Campbell, 810 So.2d 641 (Ala.2001)]. See also World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Duke [v. Young, 496 So.2d 37 (Ala.1986)]; Brooks v. Inlow, 453 So.2d 349 (Ala. 1984); and Alabama Waterproofing Co. v. Hanby, 431 So.2d 141, 144-146 (Ala. 1983). `A physical presence in Alabama is not a prerequisite to personal jurisdiction over a nonresident.' Sieber, 810 So.2d at 644. See also Sudduth [v. Howard], 646 So.2d [664,] 667 [(Ala. 1994)].
"`"`What is required is that the out-of-state resident have "some minimum contacts with this state [so that], under the circumstances, it is fair and reasonable to require the person to come to this state to defend an action." Rule 4.2(a)(2)(I), Ala. R. Civ. P. [(Emphasis added.)]
"`"`"`[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."'"' McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). Alabama's long-arm statute (Rule 4.2, Ala. R. Civ. P.) has been interpreted by this Court to extend the jurisdiction of Alabama courts to the permissible limits of due process. DeSotacho, Inc. v. Valnit Industries, Inc., 350 So.2d 447 (Ala.1977); Duke v. Young, 496 So.2d 37 (Ala.1986).
"`"`Alabama's long-arm procedure for service of process is not limited to "rigid transactional categories" or subject to a mechanical formula. Alabama Waterproofing Co. v. Hanby, 431 So.2d 141 (Ala.1983). Instead, the relevant facts and attendant circumstances must be examined and the relationship among the defendant, the forum, and the litigation analyzed to determine if the defendant has sufficient "minimum contacts" so that "the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington.'" [(Emphasis added.)]
"`"A relevant factor in a due process analysis is whether the defendant should have reasonably anticipated that he would be sued in the forum state. [(Emphasis added.)] In Dillon Equities [v. Palmer & Cay, Inc., 501 So.2d 459, 462 (Ala.1986)], this Court, quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), noted:
"`"`"The foreseeability that is critical to due process analysis ... is *973 that the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there." (Citations omitted.) [(Emphasis added.)]'"'
"Sudduth, 646 So.2d at 667 (quoting Knowles v. Modglin, 553 So.2d 563, 565-66 (Ala.1989))."
Ex parte McInnis, 820 So.2d at 795, 802-03 (2001).
The gravamen of the plaintiffs' allegations is that the defendants misrepresented the financial condition of Bruno's in connection with the acquisition of that company and the financing of that acquisition. Although many of the activities at issue did not take place in Alabama and the purchasers of the notes do not reside here, the entire focus of the defendants' actions was the leveraged recapitalization of Bruno's and the associated acquisition of Bruno's. Bruno's was an Alabama corporation, and a corporation with substantial physical assets and business operations throughout Alabama. In addition, physical contacts the defendants had with this forumincluding attending meetings in Alabama to discuss the possible acquisition of Bruno's, having KKR's agents investigate Bruno's in Alabama, causing Bruno's to issue the notes to help finance the leveraged recapitalization, and participating in meetings of Bruno's board of directors specifically relate to the plaintiffs' cause of action.
Given these circumstances and "the relationship among the defendant[s], the forum, and the litigation analyzed," Ex parte McInnis, 820 So.2d at 802, we must conclude that it is appropriate for the courts of this State to exercise in personam jurisdiction over the defendants. Among other things, we cannot avoid the conclusion that the defendants' actions were purposefully directed toward the State of Alabama in a manner that created a "substantial connection" between the defendants and this State. Further, there exists a firm nexus between the defendants' actions and Alabama. Accordingly, the defendants have "purposefully establish[ed] minimum contacts with the forum state" such that the defendants reasonably could have anticipated being haled into court here.
We also are clear to the conclusion that the assertion of jurisdiction over the defendants based on their connection with the State of Alabama comports with "traditional notions of fair play and substantial justice." International Shoe, 326 U.S. at 316, 66 S.Ct. 154. As noted above, factors that may be considered in this regard include the forum state's interest in adjudicating the dispute and the burden on the defendants of litigating this matter in the forum state. Burger King, 471 U.S. at 476-77, 105 S.Ct. 2174 (quoting World-Wide Volkswagen, 444 U.S. at 292, 100 S.Ct. 559).
The defendants contend that they "will be unduly burdened by being forced to litigate in Alabama" because
"[t]he cost and complexity of defending against Plaintiffs' claims will be severely increased if this case is tried in Alabama given that: (i) all but one of the parties (Mr. Ronald Bruno) are non-Alabama residents; (ii) an overwhelming amount of the documents and witnesses are located outside Alabama; (iii) Defendants' ability to call trial witnesses will be severely restricted given that Alabama may not have personal jurisdiction over critical defense witnesses, such as Deloitte and the underwriters of the Bruno's Notes; and (iv) Defendants will have to travel hundreds of miles for court hearings and trial, and will be required to be away from home and work for an extended period of time given the expected length of any trial."
*974 The factors the defendants raise, however, would be little different in any other forum, given the fact that the defendants and other witnesses reside in multiple states throughout the country.[8] The defendants have had a substantial presence in Alabama given their acquisition of an Alabama corporation and the individual defendants' involvement as directors of that corporation. Moreover, as the plaintiffs observe, Alabama has an obvious and substantial interest in an action involving the acquisition of an Alabama corporation such as Bruno's and misconduct of the nature alleged here in relation to that acquisition. Thus, traditional notions of fair play and substantial justice weigh in favor of the circuit court's exercise of personal jurisdiction over the defendants in this case.
3. The "Fiduciary Shield Doctrine."
Individual defendants Raether, Kravis, Greene, Brous, Roberts, and Tobin also argue that even if we determine that personal jurisdiction over KKR and its affiliates is appropriate, the court cannot exercise personal jurisdiction over them because such jurisdiction is based solely upon their actions as directors of those corporations. In so arguing, the individual defendants claim to be protected by the so-called "fiduciary-shield doctrine." That doctrine provides that
"an officer's or employee's mere association with a corporation is an insufficient basis for the Court to assert jurisdiction over them, even though the Court can assert jurisdiction over the corporation. See 4 C. Wright & A. Miller, Federal Practice and Procedure § 1069 at 370 (2nd ed.1987). Restated, jurisdiction over individual officers and employees of a corporation may not be predicated on the court's jurisdiction over the corporation itself. Id. at 371."
Brink v. First Credit Res., 57 F.Supp.2d 848, 858-59 (D.Ariz.1999).
As the defendants observe, this Court first applied the fiduciary-shield doctrine in Thames v. Gunter-Dunn, Inc., 373 So.2d 640, 641-42 (Ala.1979), wherein this Court stated:
"[I]t is clear that jurisdiction over individual officers or employees of a corporation may not be predicated merely upon jurisdiction over the corporation itself. Weller v. Cromwell Oil Co., 504 F.2d 927 (6th Cir.1974); Professional Investors Life Ins. Co. v. Roussel, 445 F.Supp. 687 (D.Kan.1978); Path Instruments v. Asahi Optical Co., 312 F.Supp. 805 (S.D.N.Y.1970).
"The relationship of bank officers to their bank is analogous to the relationship of corporate officers to their corporation. Therefore we will consider the question of personal jurisdiction here in the same way we would consider it in a corporate frame of reference. It is established that there must be a showing that the individual officers engaged in some activity that would subject them to the state's long-arm statute before in personam jurisdiction can attach.
"In Idaho Potato Com'n v. Washington Potato Com'n, 410 F.Supp. 171, 181 (D.Idaho 1975) the court said:
"`(U)nless there is evidence that the act by the corporate officer was other than as an agent for the corporation, then personal jurisdiction over the corporate officer will not lie. Fashion Two Twenty, Inc. v. Steinberg, 339 F.Supp. 836, 842 (E.D.N.Y.1971).'
*975 "In this case there was no allegation that the corporate entity was a sham or facade intended only to protect the individual appellees. Nor was there a showing that the appellees engaged in any business for personal gain or profit or any transaction which was outside the scope of their employment with the bank. Thus the corporation could not be said to have acted as an agent of the individual appellees so as to become their alter egos and to warrant personal jurisdiction over them.
"....
"While it is sometimes proper to hold that a foreign corporation or bank whose agents acted in Alabama, and caused ramifications in this state, has sufficient contacts with the state to warrant jurisdiction, it is a totally different matter to hold that individual officers have such... contacts. In this case the officers had never been present in Alabama, and there was no proof that the appellees were conducting any personal business either through the use of the corporation as an alter ego, or through personal agents in this state. Thus this Court finds that the ... contacts necessary to extend personal jurisdiction are lacking."
373 So.2d at 641-42.
Since the publication of that decision, however, this Court has distinguished Thames on several bases so as to avoid applying the fiduciary-shield doctrine. For example, in Ex parte Sekeres, 646 So.2d 640, 641-42 (Ala.1994), this Court explained:
"After Thames ... this Court addressed the question of in personam jurisdiction over seven corporate officer/employee defendants in Brooks v. Inlow, 453 So.2d 349 (Ala.1984). The Court affirmed the circuit court's holding that it had no jurisdiction over the two defendants who had never been present in Alabama, but reversed the judgment in favor of the five defendants who had come to Alabama on corporate business. The Court in Brooks distinguished Thames by emphasizing the statement in Thames that the bank officers had never been present in Alabama. The Court has similarly found personal jurisdiction over directors or officers of corporations in Keelean v. Central Bank of the South, 544 So.2d 153 (Ala.1989); Duke v. Young, 496 So.2d 37 (Ala.1986); Alabama Waterproofing Co. v. Hanby, 431 So.2d 141 (Ala.1983); and View-All, Inc. v. United Parcel Service, 435 So.2d 1198 (Ala.1983)."
646 So.2d at 641-42.
Moreover, in Sudduth v. Howard, 646 So.2d 664, 668-69 (Ala.1994), the Court explained a distinctly different analytical approach than was articulated in Thames:
"We note Larry Howard's contention that, under the `fiduciary shield doctrine,' he lacks sufficient contact with this state for purposes of personal jurisdiction. We find that argument to be without merit. Larry Howard's status as an employee or agent of CMS is not relevant in this case. This Court held in Duke v. Young, 496 So.2d 37, 40 (Ala. 1986):
"`[A]s demonstrated by the facts and holding in Calder [v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984)], an individual is not shielded from liability simply because his acts were done in furtherance of his employer's interest. In fact, the Court stated there that the defendants' "status as employees does not somehow insulate them from jurisdiction." Calder, supra, 465 U.S. at 790, 104 S.Ct. at 1487.'
"See, also, Ex parte Sekeres, 646 So.2d 640 (Ala.1994).
*976 "Larry Howard specifically cites us to Thames v. Gunter-Dunn, Inc., 373 So.2d 640 (Ala.1979), and Pierce v. Heyman, 480 So.2d 1185 (Ala.1985). However, the Court in Duke, supra, at 40, distinguished Thames and Pierce on their facts, holding that `[i]n each instance the tortious act complained of was exactly what Calder referred to as "mere untargeted negligence."' See Lowry v. Owens, 621 So.2d 1262 (Ala. 1993). The thrust of the Sudduths' allegation is that Larry Howard participated in, if he did not mastermind, a scheme to defraud and deceive potential investors in Alabama. This is not an allegation of `mere untargeted negligence.' Rather, this is an allegation of intentional and tortious action expressly aimed at Alabama residents. See, Lowry v. Owens, supra, at 1266; Calder, supra, 465 U.S. at 789, 104 S.Ct. at 1487; Duke, supra, at 40."
646 So.2d at 668-69 (emphasis added).[9]
By their own admissions, all the individual defendants except Roberts had been to Alabama in connection with the acquisition of Bruno's. More importantly, the allegations against these defendants do not consist of mere untargeted negligence. Instead, the plaintiffs allege that the defendants were complicit in committing fraudulent suppression, fraudulent misrepresentation, and deceit, all of which, as noted, was allegedly committed to the end of acquiring an Alabama corporation with a significant physical presence in Alabama.
"`A corporate agent who personally participates, albeit in his or her capacity *977 as such agent, in a tort is personally liable for the tort.' Sieber v. Campbell, 810 So.2d 641, 645 (Ala.2001). See also Bethel v. Thorn, 757 So.2d 1154, 1158 (Ala.1999), and Ex parte Charles Bell Pontiac-Buick-Cadillac-GMC, 496 So.2d 774, 775 (Ala.1986). Likewise, corporate agent status does not insulate the agent personally from his or her jurisdictional contacts with a state or from personal jurisdiction in the state. Calder v. Jones, 465 U.S. 783, 790, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984); Sieber, supra; Sudduth v. Howard, 646 So.2d 664, 668 (Ala.1994); and Duke[ v. Young], 496 So.2d [37] at 40[ (Ala.1986)].
Ex parte McInnis, 820 So.2d at 798-99; see also Licciardello v. Lovelady, 544 F.3d 1280, 1285 (11th Cir.2008) (citing Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), for the proposition that "[i]ntentional torts ... may support the exercise of personal jurisdiction over the nonresident defendant who has no other contacts with the forum").
The individual defendants allegedly engaged in tortious activity directed toward the State of Alabama in connection with the leveraged recapitalization and resulting acquisition of Bruno's. In addition, the plaintiffs allege that the fraud continued after the leveraged recapitalization through the submission of misleading Bruno's public filings, filings the individual defendants approved as members of the board of directors of Bruno's. Based on the torts allegedly committed by the individual defendants, we conclude that the fiduciary-shield doctrine does not insulate those defendants from personal jurisdiction in this State.
B. Case no. 1091206: The Circuit Court's Denial of the Defendants' Motion to Dismiss the Plaintiffs' Alabama Securities Act Claims
As we noted at the outset of this opinion, Ronald Bruno seeks a writ of mandamus that would require the circuit court to vacate the portion of its April 16, 2010, order denying the defendants' motion to dismiss the plaintiffs' claims under the ASA. Bruno makes two arguments in his petition. First, citing § 8-6-19, Ala. Code 1975,[10] he contends that the ASA covers only initial public sales of securities by the owner or issuer of such securities. Bruno asserts that the plaintiffs purchased the notes on the secondary market and, accordingly, that the plaintiffs' claims under the ASA should have been dismissed. *978 Second, citing § 8-6-12, Ala.Code 1975,[11] Bruno contends that the ASA does not apply to these transactions because none of the offers to sell or offers to buy the notes occurred in Alabama.
As we noted above in the standard of review, aside from certain limited exceptions, the denial of a motion to dismiss is not reviewable through a petition for a writ of mandamus because an adequate remedy is available by way of an appeal. In his petition, Bruno contends that "[t]his Court has jurisdiction to hear this mandamus petition because Mr. Bruno seeks review of an order denying his motion to dismiss based on plaintiffs/respondents lack of standing to assert a claim under the Alabama Securities Act."
Bruno is correct that "[m]andamus review is available where the petitioner challenges the subject-matter jurisdiction of the trial court based on the plaintiff's alleged lack of standing to bring the lawsuit." Ex parte HealthSouth Corp., 974 So.2d 288, 292 (Ala.2007). Lack of standing was not, however, the basis of the defendants' motion below concerning the plaintiffs' ASA claims. The circuit court denied the defendants' Rule 12(b)(6), Ala. R. Civ. P., motion for failure to state a claim upon which relief could be granted with regard to the plaintiffs' ASA claim.
In keeping with the arguments made below, Bruno's arguments in his petition consist of contentions that the plaintiffs do not have a cognizable claim under the ASA because they purchased the notes on the secondary market and because neither the offers to sell nor the offers to buy the notes occurred in Alabama. In other words, the arguments contend that the plaintiffs failed to state a claim for which relief could be granted under the ASA.
"[O]ur courts too often have fallen into the trap of treating as an issue of `standing' that which is merely a failure to state a cognizable cause of action or legal theory, or a failure to satisfy the injury element of a cause of action. As the authors of Federal Practice and Procedure explain:
"`The question whether the law recognizes the cause of action stated by a plaintiff is frequently transformed into inappropriate standing terms. The [United States] Supreme Court has stated succinctly that the cause-of-action question is not a question of standing.'
"13A Charles Alan Wright, Arthur K. Miller, and Edward H. Cooper, Federal Practice & Procedure § 3531 (2008) (noting, however, that the United States Supreme Court, itself, has on occasion `succumbed to the temptation to mingle these questions'). The authors go on to explain:
"`Standing goes to the existence of sufficient adversariness to satisfy both *979 Article III case-or-controversy requirements and prudential concerns. In determining standing, the nature of the injury asserted is relevant to determine the existence of the required personal stake and concrete adverseness.... The focus of the cause-of-action inquiry must not be confused with standingit does not go to the quality or extent of the plaintiff's injury, but to the nature of the right asserted.'
"13A Federal Practice & Procedure § 3531.6... Cf. 13B Federal Practice & Procedure § 3531.10 (discussing citizen and taxpayer standing and explaining that `a plaintiff cannot rest on a showing that a statute is invalid, but must show "some direct injury as a result of its enforcement, and not merely that he suffers in some indefinite way in common with people generally"')."
Wyeth, Inc. v. Blue Cross & Blue Shield of Alabama, 42 So.3d 1216, 1219-20 (Ala. 2010) (emphasis omitted).
The arguments made by Ronald Bruno in his mandamus petition concern an asserted failure by the plaintiffs to allege a claim upon which relief is available under Alabama law. That is, they are arguments that go to the nature of the claims asserted by the plaintiffs, not the nature of any injury sustained by the plaintiffs as a result of the defendants' conduct. They are arguments that are consistent with a Rule 12(b)(6) motion to dismiss, which is exactly how the defendants framed them before the circuit court. In an effort to gain a review of the circuit court's ruling on this issue through a mandamus petition, Bruno has incorrectly attempted to recast the defendants' arguments as raising the issue of the plaintiffs' standing.
Any alleged error in the circuit court's decision to deny the defendants' motion to dismiss for failure to state a claim as to the plaintiffs' ASA claim can be adequately remedied by appeal. Therefore, Bruno's mandamus petition is due to be denied.
1091191PETITION DENIED.
1091206PETITION DENIED.
MALONE, C.J., and WOODALL, STUART, BOLIN, PARKER, SHAW, MAIN, and WISE, JJ., concur.
NOTES
[1] In their mandamus petition in case no. 1091191, the defendants describe KKR Associates and Crimson Associates as "inactive Delaware limited partnership[s]." Petition, p. 8 n. 4.
[2] By way of example, KKR directly or indirectly held significant ownership interests in Safeway, Inc., and in The Stop & Shop Supermarket Company.
[3] The plaintiffs did not become aware of the Project Crimson Report until October 1999. Bruno's had filed for bankruptcy in Delaware federal district court on February 2, 1998. The Project Crimson Report was made available to the plaintiffs through their participation or the participation of their representatives in creditors' committees formed pursuant to bankruptcy court filings.
[4] The prospectus states that following the leveraged recapitalization Bruno's would be managed by the directors of a corporation called Crimson, which the prospectus states is "an Alabama corporation" that is "a wholly owned subsidiary of Crimson Associates." The directors of Crimson were Raether, Greene, and Brous.
[5] Tobin stated that he served on the board from 1995 to 1997.
[6] The viability of the plaintiffs' action against the individual defendants premised in part on the alleged acts and omissions relating to the sale of the notes is not before us.
[7] We note that Bruno's itself is not a defendant in this action but that it was not amenable to suit in this regard because of its status as a debtor in its own bankruptcy proceeding.
[8] According to submissions, there are defendants residing or located in Alabama, California, Connecticut, Delaware, and New York. Witnesses, such as representatives of Deloitte, Arthur Andersen, BT Securities, and Chemical Securities, Inc., reside in Illinois and New York. The plaintiffs reside or are located in various states throughout the country.
[9] The defendants complain that the trial court "elected not to follow Thames" because "[i]t believed, incorrectly, that Thames was effectively superceded by Calder v. Jones, 465 U.S. 783, 790 (1984)." The trial court reached its conclusion, however, with good reason. The United States Supreme Court itself summarized the holding in Calder as follows in a case released the same day:
"[W]e ... reject the suggestion that employees who act in their official capacity are somehow shielded from suit in their individual capacity. But jurisdiction over an employee does not automatically follow from jurisdiction over the corporation which employs him; nor does jurisdiction over a parent corporation automatically establish jurisdiction over a wholly owned subsidiary. Consol. Textile Co. v. Gregory, 289 U.S. 85, 88 [53 S.Ct. 529, 77 L.Ed. 1047] (1933); Peterson v. Chicago, R.I. & P. Railway Co., 205 U.S. 364, 391 [27 S.Ct. 513, 51 L.Ed. 841] (1907). Each defendant's contacts with the forum State must be assessed individually. See Rush v. Savchuk, 444 U.S. 320, 332 [100 S.Ct. 571, 62 L.Ed.2d 516] (1980) (`The requirements of International Shoe ... must be met as to each defendant over whom a state court exercises jurisdiction.')."
Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781 n. 13, 104 S.Ct. 1473, 79 L.Ed.2d 790, (1984). In other words, an evaluation of personal jurisdiction over a defendant should be made independent of his status as a corporate employee. As one federal district court succinctly explained:
"The idea that jurisdiction over individual officers and employees of a corporation may not be predicated on the court's jurisdiction over the corporation survives after Calder v. Jones. However, the Supreme Court held that due process does not require that individuals be shielded from suit based solely on their status as employees. Id. Rather, a court can assert jurisdiction over officers and employees if jurisdiction is supported by the long-arm statute of the forum state. See id. If the state's long-arm statute allows jurisdiction to the extent allowed by the Constitution, then employing the fiduciary shield to insulate employees is inconsistent with the wide reach of the statute. See, e.g., Davis v. Metro Productions, Inc., 885 F.2d 515, 522 (9th Cir.1989). See also Lynn C. Tyler, Personal Jurisdiction: Is It Time to Stick a Fork in the Fiduciary Shield Doctrine?, 40-APR Res Gestae 9, 14 (1997); Robert A. Koenig, Personal Jurisdiction and the Corporate Employee: Minimum Contacts Meet the Fiduciary Shield, 38 Stan. L.Rev. 813, 827 (1986)."
Brink v. First Credit Res., 57 F.Supp.2d 848, 859 (D.Ariz. 1999).
[10] In pertinent part, § 8-6-19, Ala.Code 1975, provides:
"(a) Any person who:
"(1) Sells or offers to sell a security in violation of any provision of this article or of any rule or order imposed under this article or of any condition imposed under this article, or
"(2) Sells or offers to sell a security by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, the buyer not knowing of the untruth or omission, and who does not sustain the burden of proof that he did not know and in the exercise of reasonable care could not have known of the untruth or omission,
"is liable to the person buying the security from him who may bring an action to recover the consideration paid for the security, together with interest at six percent per year from the date of payment, court costs and reasonable attorneys' fees, less the amount of any income received on the security, upon the tender of the security, or for damages if he no longer owns the security. Damages are the amount that would be recoverable upon a tender less the value of the security when the buyer disposed of it and interest at six percent per year from the date of disposition."
[11] In pertinent part, § 8-6-12, Ala.Code 1975, provides:
"(a) The provisions of this article shall apply to persons who sell or offer to sell when
"(1) an offer to sell is made in this state, or
"(2) an offer to buy is made and accepted in this state.
"(b) The provisions of this article shall apply to persons who buy or offer to buy when
"(1) an offer to buy is made in this state, or
"(2) an offer to sell is made and accepted in this state.
"(c) An offer to sell or to buy is made in this state, whether or not either party is then present in this state, when the offer
"(1) originates from this state, or
"(2) is directed by the offeror to this state and received at the place to which it is directed (or at any post office in this state in the case of a mailed offer)."
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United States Court of Appeals
For the Eighth Circuit
___________________________
No. 19-2311
___________________________
United States of America
lllllllllllllllllllllPlaintiff - Appellee
v.
Gary Lee Christinson
lllllllllllllllllllllDefendant - Appellant
____________
Appeal from United States District Court
for the Southern District of Iowa - Des Moines
____________
Submitted: April 13, 2020
Filed: May 1, 2020
[Unpublished]
____________
Before BENTON, BEAM, and KOBES, Circuit Judges.
____________
PER CURIAM.
Gary Lee Christinson violated the conditions of his supervised release five
times. As a result, the district court1 revoked his supervised release and sentenced
1
The Honorable Rebecca Goodgame Ebinger, United States District Judge for
the Southern District of Iowa.
him to 12 months and one day in prison, followed by an additional 60 months of
supervised release. Christinson argues that his sentence is substantively
unreasonable. We affirm.
In 2007, Christinson was sentenced to 180 months in prison followed by
60 months supervised release after he pleaded guilty to conspiracy to distribute
methamphetamine. After four months of being on supervised release, Christinson had
two reported violations: one for using marijuana and another for associating with a
convicted felon. After discovering five more violations during a home visit, a
probation officer petitioned the court to revoke Christinson’s supervised release.
At the revocation hearing, Christinson admitted to violating his supervised
release by: (1) using heroin and marijuana; (2) possessing marijuana during the home
visit; (3) possessing and using Suboxone (used to mask drug use) without a
prescription; (4) possessing and using drug paraphernalia; and (5) possessing and
using synthetic urine three times to circumvent drug tests.2 His counsel and the
Government recommended that Christinson complete treatment at an inpatient drug
treatment facility in lieu of returning to prison immediately. The court disagreed and
sentenced him to 12 months and one day in prison.
Christinson timely appealed and only challenges the substantive reasonableness
of his revocation sentence. We review the reasonableness of a revocation sentence
in the same manner as an initial sentence and will reverse if the district court abused
its discretion while weighing the 18 U.S.C. § 3553(a) factors. See United States v.
Perkins, 526 F.3d 1107, 1110 (8th Cir. 2008); United States v. Bear Robe, 521 F.3d
909, 910–11 (8th Cir. 2008). “A district court abuses its discretion when it (1) fails
to consider a relevant factor that should have received significant weight; (2) gives
2
Both parties agree these were Class C violations and the Government
represents that Christinson’s Guidelines range was 8 to 14 months in prison.
-2-
significant weight to an improper or irrelevant factor; or (3) considers only the
appropriate factors but in weighing those factors commits a clear error of judgment.”
United States v. Jenkins, 758 F.3d 1046, 1050 (8th Cir. 2014) (citation omitted).
Christinson argues that the court abused its discretion when it disregarded the
recommendations of all parties and summarily rejected his request for inpatient
treatment. The record shows otherwise. The district court agreed with Christinson’s
need to receive treatment, but, guided by 18 U.S.C. § 3583(e) and the § 3553(a)
factors, concluded that “a significant term of revocation [was] required in order to
reflect the seriousness of these violations and to account for the seriousness of these
violations.” Sent. Tr. 17:6–8. The court observed that after his probation officer
caught him using marijuana, rather than seek additional help, Christinson continued
using drugs and sought to evade subsequent drug tests. The court was also skeptical
that additional treatment would work because Christinson had failed to take
advantage of the outpatient drug treatment afforded to him while on supervised
release. Even though the court sentenced Christinson to 12 months and one day in
prison, it accounted for his treatment needs and required him to complete a new
substance abuse and mental health evaluation within 30 days of his release from
custody. If treatment is recommended then, Christinson will be required to attend.
On this record, we find no abuse of discretion occurred and affirm Christinson’s
sentence.
______________________________
-3-
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145 N.W.2d 597 (1966)
Kenneth LAME, M. D. Bommel, D. D. Sindt, Regie Jergens, Earl Stone, Richard Nesselroad, Larry Kemmer, and James Manley, Appellees,
v.
George KRAMER, Mayor of Waukee, Iowa, Appellant.
No. 52183.
Supreme Court of Iowa.
October 18, 1966.
*598 Gill & Huscher, Des Moines, for appellant.
Whitfield, Musgrave, Selvy & Kelly, Des Moines, for appellees.
MASON, Justice.
Plaintiffs seek by mandamus to compel the calling of a special election to submit the question of granting a franchise to Iowa Power and Light Company for the distribution and sale of natural gas in Waukee.
Plaintiffs are resident property owners of the incorporated town of Waukee. Defendant is the mayor.
On June 22, 1964, the issue of whether a municipal gas distribution system should be established in Waukee was submitted to the voters. The proposal carried by a vote of 210 to 127. At that time Northern Natural Gas was preparing an application to the Federal Power Commission for authority to serve several communities in Iowa and the midwest and suggested to the mayor and town council that Waukee would secure gas most expeditiously by joining in an application for certificate of authority. *599 This was done. From time to time the town had provided evidence to Northern Natural for use at the Federal Power Commission.
February 11, 1966, defendant was notified the hearing examiner for the Federal Power Commission had approved Waukee's application. Defendant immediately wrote a letter to the citizens of Waukee, stating "We are taking steps to get going on this and are now preparing the necessary papers for an election to grant a franchise to the Northern Natural Gas Company of Omaha, Nebraska." Defendant should have used the word "contract" rather than "franchise" in the letter. He instructed the town attorney to prepare the necessary papers for an election on the proposition of entering into a 20-year contract with Northern for the purchase of gas for sale and distribution in Waukee and also a contract with Northern for a five-year duration, for use at the regular council meeting on February 14. The five-year contract would not require voter approval. Section 397.5, Code, 1966.
At the February 14 council meeting plaintiffs, for themselves and others, filed with the mayor and council a petition containing 123 names requesting a special election be called April 14 for the purpose of submitting to the electors the question of granting Iowa Power and Light Company, its successors and assigns, a franchise for 25 years to construct, maintain and operate in Waukee the necessary facilities for the distribution and sale of natural gas for public and private use and to use and occupy the public streets, bridges and public places within the town corporate limits for such purposes.
Plaintiffs left with the council the franchise petition and other papers including a proposed notice of special council meeting to be held February 21 to consider whether the question of granting a franchise to Iowa Power and Light and investing it with certain rights and privileges in connection with the production, distribution and sale of gas in Waukee should be submitted to the voters. The notice of the proposed minutes fixed April 14 as the date for the special election and March 9, 16, 23 and 30 as dates for publication of notice of the election. At the meeting plaintiff Lame was asked if he knew Iowa law provided that persons proposing a special election on a franchise had to pay the costs. He responded that he did, but the question had never been raised to him before, he was not able to answer it and did not want to be quoted on it one way or the other. The question had reference to section 397.7, Code, 1966. The costs were not tendered at this meeting nor was inquiry made by plaintiffs as to the amount.
Plaintiffs' petition was not acted upon at the meeting on February 15 and it adjourned about 1 a. m. That evening another council meeting was held, the proposed contract with Northern was discussed and defendant and the town attorney were instructed to visit with Northern concerning the contract. Plaintiffs' petition was not discussed at this meeting.
On February 17 a council meeting was held and it was determined to put the issue of a contract in excess of five years to a vote of the electors on March 22. This was done without further consideration of plaintiffs' petition on the franchise. No council meeting was held February 21 as plaintiffs' petition requested.
I. Plaintiffs' petition in equity was filed February 23. The same day defendant was served with an original notice requiring him to appear within 20 days after service. March 15 was thus the appearance date. February 25 plaintiffs filed an amendment to the petition, alleging they were entitled to a speedy determination of the issues as provided in section 661.11, Code, 1962. That day the trial court ordered a hearing on the amendment on March 4 and provided a copy of the order be served on defendant in the manner prescribed for service of original notices in civil actions five days before the date set for the hearing.
*600 March 2 defendant appeared specially to attack the jurisdiction of the court. March 4 the court overruled defendant's special appearance. He then filed motions to dismiss and strike. After these motions were overruled, defendant filed a motion for continuance which was also overruled. Defendant then filed his answer in seven divisions, asserting various affirmative defenses. The matter proceeded to trial on March 4 and decree was entered March 10 requiring defendant to canvass plaintiffs' petition for franchise and if it was determined it contained the names of 50 property owners, defendant should fix a date for the franchise election, the date the first notice of election should be published and inform the trial court within five days that the order has been complied with. From this decree, defendant appeals.
II. Defendant assigns nine propositions relied on for reversal. The first three attack the trial court's jurisdiction over defendant and assert plaintiffs' petition fails to state a cause of action. He argues his special appearance should have been sustained and he should not have been required to appear before expiration of the 20 days set by the original notice served on him when the original petition did not allege a speedy determination of the issues was urgent.
Defendant concedes a matter may be brought on for early hearing in mandamus if the statutory procedure therefor is followed but contends plaintiffs failed to follow that procedure, instead they served an original notice and commenced their lawsuit in the manner provided in the Rules of Civil Procedure, and having elected the manner in which defendant was brought before the court, they are bound thereby and should not be allowed to cause another notice to be served requiring a different appearance date. In other words, defendant says he has a right to rely upon the recitations in the original notice.
Plaintiffs assert that when they amended their petition on February 25, setting forth sufficient facts to satisfy the court that this matter was urgent and should be speedily determined, they complied with section 661.11 and the court had authority to bring the matter on for trial and to cause the issues to be made up prior to the 20 days originally set forth in the original notice. They contend the February 25 order complied with 661.11 and superseded the original notice.
We hold the court's order of February 25 directing an earlier appearance date than set by the original notice was proper under section 661.11, superseded the prior original notice and defendant's special appearance was rightly overruled.
Plaintiffs were within their rights in amending their petition before answer. Rule 88, R.C.P. "There is no reason why this power to allow amendments should not extend to cases of mandamus; and as such cases are not excluded by the language of the law [rule 88], we hold they are included in it, and the right of amendment is the same in those cases as in other civil proceedings." State ex rel. Floyd v. Mayor and City Council of Keokuk, 18 Iowa 388, 389.
III. Defendant further maintains the court could not require him to answer before expiration of seven days from the appearance date or prior to March 11 and his motion for continuance based on this contention should have been granted, citing rule 85(e), R.C.P.
Plaintiffs admit rule 85(e) provides for answer but contend the rule has no application to mandamus wherein section 661.11 states the court may prescribe the notice and service thereof to bring defendant before the court and cause the issues to be made up, that if rule 85(e) were applicable from the date of appearance the provisions of 661.11 would be meaningless.
We disagree with plaintiffs on this proposition. While the time for appearance in mandamus may be shortened under the provisions of 661.11 and defendant required to *601 appear at a date earlier than would normally be required under rule 53, no exception is provided in rule 85(e) as to the time to answer.
The Rules of Civil Procedure apply to mandamus actions unless a statute or rule provides otherwise. The February 25 order should have granted defendant seven days after the date set for hearing in which to plead. Defendant's motion for continuance should have been granted. In the absence of a showing of prejudice this alone would not be reversible error.
Defendant's assertion plaintiffs' petition failed to state a cause of action for mandamus even when its allegations are taken as true cannot be sustained.
IV. Under his fifth proposition defendant contends no mandatory duty on his part had arisen at the time plaintiffs brought action, 14 days before the date they had requested him to cause the first publication of notice of an election, and by their request for dates of publication plaintiffs invited and authorized any delay in calling such an election up to the time this lawsuit was filed. In other words, defendant says he still had 14 days to act on plaintiffs' petition for an election when this action was commenced, and that a cause of action must exist at the time of filing a petition in mandamus if at all.
Plaintiffs maintain their franchise petition which complied with section 397.6 obligated defendant to set the date for the special election and by tabling their petition and proceeding with the contract with Northern on the 15th and 17th and setting an election for March 22, he failed to perform his duties as required by the section and plaintiffs had ground under section 661.1 for mandamus.
The evidence does not support plaintiffs' claim the franchise petition was tabled.
We agree in general with defendant's statement but unless further circumstances appear section 397.6 casts upon the mayor a mandatory duty, enforceable by mandamus, to call the election on a proper petition of the voters. Baird v. City of Webster City, 256 Iowa 1097, 1114, 130 N.W.2d 432, 442.
Section 661.1 provides:
"Definition. The action of mandamus is one brought to obtain an order commanding an inferior tribunal * * * or person to do or not to do an act, the performance or omission of which the law enjoins as a duty resulting from an office, trust, or station."
It is true the mayor was entitled to a reasonable time in which to determine the number of signers to the petition, their residence, and their ownership of property, within the meaning of section 397.6.
"Mandamus will not lie, at least, until the expiration of such period, because until then the mayor has not refused to act. Did this officer, in the case at bar, delay an unreasonable length of time? * * * [W]hat is `reasonable' depends upon the facts and circumstances. * * * (T)here could be a situation where the interim here allowed would not be too long. Yet, under this record, it is very apparent that the appellee mayor had ample opportunity in which to make his investigations." Iowa Public Service Co. v. Tourgee, 208 Iowa 36, 39, 222 N.W. 882, 884. The quoted statement is persuasive here.
In our opinion, by February 23 defendant had a reasonable time to investigate the petition and determine whether it was regular as to the number of signers, their residency and ownership of property. As to this investigation the mayor was a seeker of the truth. If the petition contained the required signatures, their residences were sufficient and each was a property owner, and if these facts were not controverted or in conflict, the mayor's function did not embrace a discretion. Iowa Public Service Co. v. Tourgee, supra, 208 Iowa, at 40, 222 N.W., at 884. For approved definitions of ministerial and discretionary acts see Arrow Express Forwarding *602 Co. v. State Commerce Comm., 256 Iowa 1088, 1091, 130 N.W.2d 451, 453.
On February 20 and even as late as March 8 the mayor had made no findings of any kind other than he had "* * * talked to several of the signers. I'm sure most of the signers are property owners from my preliminary check. I don't know but I assume there are more than 50 property owners on this." This plus the fact the special meeting requested of the city for February 21 to consider plaintiffs' franchise petition was not called and defendant stated to Lame on February 20 an election had not been called at that time and "things had been turned over * * * to legal counsel" do not indicate an active investigation of plaintiffs' franchise petition was being made without delay.
There was sufficient basis to warrant plaintiffs' procedure, mandamus was the proper remedy and the action was not premature.
V. Defendant contends under his sixth and seventh propositions the trial court should not have required him to call a special election on granting a gas franchise to a private utility when the town was in the process of establishing its own gas distribution system pursuant to a vote of the electorate; that causing a notice of election on the question of purchasing gas from Northern and a notice on the question of granting a franchise to Iowa Power and Light to be published in the same issue of the same paper would confuse the voters; the fact plaintiffs waited until after they knew the council planned to hold an election on the contract before presenting their petition for a franchise election, justifies an inference the presentation of the franchise petition was not a good faith effort to ascertain the desire of the people on the question of the sale of natural gas.
Defendant's argument in support of these assignments is without merit. Elections were required on both questions by statute. We believe the voters are certainly able to distinguish an election granting a franchise from one for the purchase of gas by a municipally-owned plant. The question of plaintiffs' good faith is not involved.
VI. Defendant's eighth assignment is directed to the proposition plaintiffs, seeking equitable relief, must come into court with clean hands. He asserts plaintiffs, by using a printed form attached to their franchise petition, referred to in the record as a "fact sheet", as a part of the inducement used to obtain signers, which defendant claims contains misrepresentation of material facts, should not have been granted equitable relief.
It is true "[w]here a suit in equity concerns the public interest * * * the doctrine that he who comes into equity must come with clean hands assumes a greater significance * * *." Bankers Life & Casualty Co. v. Alexander, 242 Iowa 364, 377, 45 N.W.2d 258, 265-266.
We have read the "fact sheet" introduced as an exhibit and are not prepared to sustain defendant's contention.
VII. In his final assignment defendant contends plaintiffs failed to carry the burden of proving the material allegations of their petition.
Since this is an equity case our review is de novo. Section 624.4; rule 334, R.C.P.
Plaintiffs established their right to have a preliminary investigation by the mayor to determine the regularity of the franchise petition and a special council meeting to consider the adoption of proceedings relating to the calling of a franchise election. However, for the reasons stated in the following division it is our opinion they did not establish their right to have notice of the election published.
*603 VIII. Section 397.7 provides:
"Noticetime of electioncosts. * * * The person asking for the granting, renewal, or extension of a franchise shall pay the costs incurred in holding the election."
The court's order directed: "* * * the plaintiffs shall pay the costs of said special election and the defendant shall file a return with the clerk of this court showing the costs of said election which must be paid by the plaintiffs within ten (10) days from the filing of said return. If said costs are not paid within the ten (10) days, the defendant shall have the right to pursue the collection of said costs as the laws of this state provide."
Defendant complains he should not have been compelled to call an election and rely upon his remedy at law for collection of these costs. Plaintiffs' failure to pay the costs was raised in defendant's motion to dismiss and again in his answer.
Plaintiffs argue the statute does not require any tender of costs before the election petitioned for is scheduled because it would be impossible to know the amount thereof when the petition is filed and that whether the costs were tendered is wholly immaterial to the mayor's duty to call an election provided in section 397.6.
There was never any tender of costs by those seeking the election, no inquiry was ever made as to their amount and in fact when Lame was questioned about costs, he did not want to be committed.
The statute is silent as to when the costs are to be paid. This we must decide.
In our opinion payment or tender of costs is not a condition precedent to having a preliminary investigation by the mayor to determine if the franchise petition is regular and in compliance with section 397.6 or the right to have a special council meeting called to consider calling a franchise election. However, once the election has been called, the next step is to cause publications of the notice. Section 397.7. This is the first time expenses attributable to the franchise question are to be incurred and the amount could be ascertained with certainty at this stage of the proceedings.
It is our conclusion that before publication of notice of the election is required under section 397.7, the costs to be incurred must be paid or tendered.
The burden is on those asking for the franchise to have the costs determined in order that payment may be made.
The fact the requirement for payment of costs is contained in the same Code section as the direction for publication of notice tends to support our position. Section 397.7.
However, because of the mayor's failure to make a preliminary investigation of the franchise petition and the failure to consider the adoption of proceedings relating to the calling of a franchise election, the stage for publication of notice of election was never reached in his case.
IX. The court's order regarding payment of costs quoted in Division VIII was erroneous. Defendant should not be required to personally incur this indebtedness and face the possibility of further expense in collection suits.
Because of the court's error as to payment of costs by plaintiffs and collection in the event of nonpayment, this cause is remanded to the district court for decree directing defendant to canvass plaintiffs' franchise petition and if it is determined that it contains the names of 50 resident property owners, fix dates for the franchise election and the first publication of notice of election and inform the court within five days from the entry of said order that it has been complied with.
Said decree shall further provide the costs of the special election shall be paid *604 or tendered to the town clerk at least seven days before the date set for the first publication and if not then paid or tendered, no further proceedings with reference to the election need be had. Costs of the appeal are taxed two thirds to defendant and one third to plaintiffs.
Modified, affirmed and remanded with directions.
All Justices concur.
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676 F.2d 703
Henkinv.S. Dak. Dept. of Social Serv.
80-2049
UNITED STATES COURT OF APPEALS Eighth Circuit
10/27/81
D.S.D. 498 F.Supp. 659
1
VACATED**
**
See Local Rule 12
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CAUSE NO. 007-1110-10
THE STATE OF TEXAS IN THE 7™ JUDICIAL
§
VS. DISTRICT COURT IN AND FOR
§
JQPY FORD MCCREARY SMITH COUNTY, TEXAS
ORDERDENYING DEFENDANT'S MOTION TO SET ASIDE THE JUDGMENT OF
GUILT AND SENTENCE. MOTION FOR NEW TRIAL ARREST JUDGEMENT AND
MOTION FOR JUDGEMENT NUNC PRO TUNG
On the 22nd day of March, 2012, the above-entitled and numbered cause came before the
* i
Court for thpnurnocr ;>f D^te*""'0''1* IfwfvM-"^1.—,-i\~ **„+:.,„ i o.... A ,:.i . .1,.. t. 1 „ '•-,;;, ,„,;
"V"
Sentence, Motion for New Trial Arrest Judgment and Motion for Judgment Nunc Pro Tunc filed on
March 15, 2012. The Court takes judicial notice of the Court's file herein and the evidence
presented.
The Court finds that Defendant Jody McCreary's Motions should beDENIED.
IT IS THEREFORE ORDERED that Jody McCreary's Motion to Set Aside the Judgment
of Guilt and Sentence, Motion for New Trial Arrest Judgment and Motion for Judgment Nunc Pro
Tunc are DENIED.
IT IS SO ORDERED.
Signed on this the 22nd day of Marcjx-2012
(
HGNO0&SLE KERRY^L. RUSSELL*!
ludge, Th Judicial District Court
^inith County. Texas
!
?. J
cc: Jody Ford McCreary
TDCJ# 01694118
William G. McConnell Unit > ? ?ni2
3001 South Emily Drive
Beeville, TX 78102
CLERK n JilHV. SMITH CO., TX
BY _DEPUTY
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557 F.Supp. 1091 (1983)
In re FOLDING CARTON ANTITRUST LITIGATION.
No. MDL 250.
United States District Court, N.D. Illinois, E.D.
February 17, 1983.
*1092 *1093 Eugene Warlich, Doherty, Rumble & Butler, St. Paul, Minn., for Land O'Lakes, Hartz Mountain.
Douglas Rigler, Foley, Lardner, Hollabough & Jacobs, Washington, D.C., for G. Heileman.
Thomas R. Meites, Chicago, Ill., for Beatrice.
Harold E. Kohn, Philadelphia, Pa., for Cumberland Farms, Food Fair.
W. Donald McSweeney, Richard J. Hoskins, Schiff, Hardin & Waite, Chicago, Ill., for Federal Paperboard Co.
Irving H. Goldberg, Jenner & Block, Chicago, Ill., for Champion Intern.
Henry L. King, Davis, Polk & Wardwell, New York City, Ned Robertson, Mayer, Brown & Platt, Chicago, Ill., for Intern. Paper.
Alan Wiseman, Howrey & Simon, Washington, D.C., for Mead Corp.
Roger Harris, Altheimer & Gray, Chicago, Ill., for Alton Boxboard.
Lowell E. Sachnoff, Sachnoff, Weaver & Rubenstein Ltd., Chicago, Ill., for Grist Mill.
Before ROBSON and WILL, District Judges.
MEMORANDUM OPINION
The folding carton antitrust litigation involved an alleged conspiracy on the part of the various defendants, all manufacturers of folding cartons, to fix prices in violation of the Sherman Act. Among the civil cases consolidated in this district for pretrial proceedings, see 28 U.S.C. § 1407, were several nationwide class actions on behalf of a certified class of direct purchasers of various *1094 types of folding cartons. On September 19, 1979, prior to trial, the class actions settled. The settlement was the result of a so-called "global agreement" under which all defendants contributed a total amount of roughly $200,000,000 to a settlement fund for ultimate distribution in accordance with an agreed-upon "plan of distribution."
In our order approving the settlement on the basis of our finding that it was fair, reasonable and adequatewe retained jurisdiction "for all purposes related to the administration and distribution of the settlement funds." See Pretrial Order No. 60. Although the cases have long been closed, the matter is before us again pursuant to that retained jurisdiction. Several motions have been filed by a few former class members whose claims were paid relating to the disposition of approximately $6 million in the reserve fund established to pay late claims and to meet various expenses and contingencies associated with the distribution of the settlement fund.
Also pending is the motion of two former class members to vacate certain administrative orders approving payments from the reserve fund of attorneys' fees and expenses associated with the administration of the settlement fund. These two former class members, Cumberland Farms Dairy, Inc. and Pantry Pride Enterprises, Inc., also seek, through depositions to be taken pursuant to subpoenas duces tecum, to obtain access to records relating to those fees and expenses.
For the reasons which follow, we deny all motions filed by certain former class members and by certain settling defendants for distribution of the reserve fund, either to the former class members and/or to the settling defendants, respectively. We approve the recommendation of the Folding Carton Administration Committee that any reserve funds remaining after all valid claims and expenses have been paid be utilized for research into possible techniques for maximizing competition and preventing or detecting and stopping violations of the antitrust laws or other anticompetitive activity. To that end, we direct the Committee, subject to our approval as to the charter, by-laws, directors, officers and procedures, to establish a foundation to be called "The Antitrust Development and Research Foundation" and to transfer the interest hereafter earned on the reserve fund to the foundation from time to time as it accrues. Finally, we direct that the remaining principal be transferred to the foundation one year from the date hereof. The Administration Committee is also directed to propose steps to locate former class members who have not previously filed claims and assist them in making properly substantiated claims against the reserve fund. The motion of the former class members Cumberland Farms Dairy, Inc. and Pantry Enterprises, Inc. to vacate administrative orders authorizing payment from the reserve fund of administrative fees and expenses is denied and the subpoenas duces tecum are quashed.
The Settlement and Distribution
The approximately $200,000,000 settlement of these class actions was, at the time of its approval, unprecedented in amount. The complaints had alleged an ongoing conspiracy on the part of the defendants to fix prices and to conceal the existence of the conspiracy which allegedly spanned the years 1960 to 1974. Billions of dollars worth of purchases of folding cartons were involved. And settlement negotiations undertaken by appointed attorneys for the plaintiff class with the assistance of the Courtwere in progress almost from the beginning of the litigation.
The global settlement which we ultimately approved was the result of separate agreements entered into by attorneys for the plaintiff class with each of the various defendants. Each agreement provided that the settling defendant was to pay its settlement share into an escrow fund, the interest on which was to be retained in the fund; identical Escrow Agreements were entered into with each settling defendant. The settlement papers established no basis for calculating the class members' shares or for distributing the settlement funds and it was *1095 understood at the time that a mechanism for pro rata distribution based on class members' purchases would have to be developed. The parties agreed, and we ordered, that no distribution of the funds be made without an order of Court.
The Escrow Agreements recited that the settlement funds were "irrevocabl[y]" transferred for the purpose of satisfying the defendants' possible liabilities and that the defendants had the right to return of the deposited funds only in the case of termination or invalidity of the settlement. Paragraph 11 of the Escrow Agreements the only paragraph in the Agreements regarding defendants' possible future interest in the fundprovided:
No Settling Defendant shall have any right, title or interest to any portion of the principal or interest of the Fund until such time as such Settling Defendant, pursuant to the settlements and this Agreement, shall receive return of its contribution to the Fund upon withdrawal from or termination of the Settlements.
None of the contingencies which would have generated an interest of the settling defendants in the escrow funds ever materialized.
The proponents of the settlement, representatives of the plaintiff class, formulated and proposed a plan of distribution of the settlement fund which they submitted together with their memorandum in support of the proposed settlement. The plan of distribution, to which we agreed, was described in the following terms:
Plaintiffs propose that the distribution to class members be made on a claims made basis. Each participating class member would be required to submit a claim to the Court for approval which would consist of its highest four years of folding carton purchases from defendants during the 1960-1974 period. Record substantiation would be required for each claim, except that where records for less than four years exist an estimate could be provided for the missing years.... Each claimant will recieve [sic] a share of the Fund based upon the claimants' allowed purchases as they relate to the Fund, after deduction of attorneys' fees, costs, administration expenses and reserves ordered by the Court.
Memorandum of Class Plaintiffs in Support of The Proposed Settlements and Proposed Plan of Distribution at 69.
As an appendix to their Memorandum in Support of the Settlement, the class attorneys suggested a form of Notice of Hearing on the proposed settlement and plan of distribution. We approved the form and, prior to the September 13, 1979 hearing on the adequacy of the settlement, see Fed.R. Civ.P. 23(e), that form together with an approved claim form was forwarded to all the putative members of the plaintiff class. The recipients of these materials were approximately 6,000 direct purchasers of folding cartons who could be identified from defendants' customer and sales lists.
The class notice described the approximate amount of the settlement and the plan of distribution. In pertinent part it provided:
Subject to Court approval, proposed settlements in the aggregate principal amount of $199,616,051 have been reached with all of the defendants in the case. Inclusive of interest, it is estimated that the Fund will be $218 million as of January 2, 1980. These figures are before any deduction for attorneys' fees, costs and administrative expenses and reserves which may be ordered by the Court.
* * * * * *
THE PROPOSED PLAN OF DISTRIBUTION OF THE SETTLEMENT FUND. On July 9, 1979, plaintiffs submitted to the Court a proposed Plan of Distribution of the Settlement Fund. This proposed Plan of Distribution has been approved by all of the active class representatives and their attorneys, and has been preliminarily approved by the Court subject to modification or final approval after the hearing commencing on September 13, 1979. The proposed Plan of Distribution provides that:
*1096 (a) All class members desiring to participate in the Fund must submit their claims on the Claim Form which accompanies this Notice.
* * * * * *
(c) The allowed claims of all class members will be totalled.
(d) Each claimant will receive a share of the Fund based upon the claimant's allowed purchases for any four years from 1960 to 1974 inclusive, as they relate to the Fund, after deduction of attorneys' fees, costs, administrative expenses and reserves ordered by the Court as more fully described in the Claim Form which accompanies this Notice.
The class notice also contained an emphasized waiver provision which stated:
ANY CLASS MEMBER WHO DOES NOT MAKE ITS OBJECTION, IF ANY, TO THE PROPOSED SETTLEMENTS, THE PROPOSED PLAN OF DISTRIBUTION, OR THE ATTORNEYS' FEES, COSTS, ADMINISTRATIVE EXPENSES, AND RESERVES IN THE MANNER SET FORTH IN THIS NOTICE, SHALL BE DEEMED TO HAVE WAIVED SUCH OBJECTION. [Emphasis added.]
The attached claim form advised each plaintiff how to estimate the amount of its recovery. It contained the following instructions:
ESTIMATE OF YOUR RECOVERY. For purposes of the computation of your recovery, `Total Defendants' Sales' shall mean the sum of $4,701,604,000, representing the total sales of folding cartons for the period of 1971-1974 by all of the defendants, and `Net Fund' shall mean the sum of $199,367,285, representing the estimate of the Fund as of an estimated January 2, 1980 distribution date, including an estimate of interest earned and minus an estimate for attorneys' fees and costs and administrative expenses and reserves. To estimate the approximate amount of your recovery from the proposed settlements, make the following calculation: First, divide your total purchases for the four years shown on the Claim Form by Total Defendants' Sales and then multiply the resulting percentage by the Net Fund. The actual amount of your recovery will vary to some extent from the amount obtained by such calculation as a result of the following factors:
(a) Any particular claimant may submit a Claim Form for four years different than 1971-1974. Therefore, Total Defendant Sales for purposes of the calculation may be more or less than the sum of $4,701,604,000 referred to above.
(b) Certain class members may decide not to submit any Claim Form, which would tend to reduce the amount of Total Defendants' Sales for purposes of the calculation and increase your recovery.
(c) A portion of the claims submitted may be disallowed by the Court upon notice.
(d) On the date of distribution, the Net Fund may be more or less than the estimate of $199,367,285, depending on the actual amount of interest earned to the date of distribution, the valuation of the Federal Paper Company, Inc. notes and warrants, and the actual attorneys' fees, costs, administrative expenses and reserves ordered by the Court.
Prior to the hearing on the settlement, expert opinion was received on the fairness of the proposal. The class plaintiffs' expert estimated that the overcharge attributable to defendants' illegal activity was 3.6% of the selling price on defendants' total sales during the four year period 1971-1974, the period which formed the basis for the settlements. Using the $4.7 billion total sales estimate, total single damages were calculated at $169,200,000. The Court's impartial expert viewed the overcharge rate as approximately 2.6% of the total sales price, yielding an estimated total single damages amount of $122,200,000.
The benefit of the settlement to the plaintiff class is fairly, if rather glowingly, described in the Report of the Folding Carton Fee Committee, an appendix to Pretrial Order 61A, which approved the awards of fees and expenses to the plaintiff class attorneys. The Pretrial Order and its appendix *1097 are reported at In re Folding Carton Antitrust Litigation, 84 F.R.D. 245, 254 (N.D.Ill.1979):
The settlement was the largest dollar settlement in the history of class action litigation at the time it was made, and is the highest [antitrust] settlement ever achieved as a percentage of single damages, i.e., 118% [of the estimated damages to the total class]. Compared to settlements approved as fair, adequate and reasonable in other cases the result is outstanding. For example, in Newman v. Stein, 464 F.2d 689 (2d Cir.1972), the Court approved a settlement representing 14% of potential recovery; in City of Detroit v. Grinnell Corp., 356 F.Supp. 1380, 1386 (S.D.N.Y.1972), aff'd, 495 F.2d 448 (2d Cir.1974), the Court approved a settlement amounting to 9-11% of estimated damages; in In Re Four Seasons Securities Law Litigation, 58 F.R.D. 19, 37 (W.D.Okl.1972), the Court approved a settlement of less than 8% of estimated damages; in Helfand v. New America Fund, Inc., 64 F.R.D. 86, 92 (E.D.Pa.1974), the Court approved a settlement of 5% of damage claims filed; in In Re Sugar Antitrust Litigation, MDL 201 (N.D.Cal.), the Court approved partial settlements of 30.90%, 54.02%, and 47.90% of estimated damages for four years; in Dorey Corp. v. E.I. duPont de Nemours and Co., 426 F.Supp. 944, 947 (S.D.N.Y.1977), the Court approved a final settlement of approximately 55% of estimated damages; in Mersey v. First Republic Corp. of America, 43 F.R.D. 465, 1967-69 CCH Fed.Sec.L.Rep. ¶ 92,304, p. 97, 422 (S.D.N. Y.1968), the Court approved a 5-10% final settlement; and in In Re Anthracite Coal Antitrust Litigation, 79 F.R.D. 707 (M.D.Pa.1978), the Court approved a final settlement of 28% of estimated damages for four years.
The $35,000,000 [footnote omitted] offered by defendants on March 24, 1977 to settle this litigation amounted to 20% of single damages and was within the range of settlements approved by other courts, indicated above.
* * * * * *
The amount should also be viewed in the context of the statute of limitations defense, which in antitrust actions is four years. The conspiracy alleged in the complaints terminated in mid-1974. The government indictments were returned in February, 1976. The four year statute, applicable if fraudulent concealment could not be proved for earlier periods, would go back to February, 1972, leaving only approximately two years and nine months vulnerable to damage, [sic] claims, absent fraudulent concealment. The $200 million settlement then can be described as more than 200% of single damages for two years and nine months.
It was clearly understood that the principal amount of the settlement fund$199,616,051 at the time of our approval of the settlementwas subject to deductions for "attorneys' fees, costs and administrative expenses and reserves which may be ordered by the Court." In fact, however, because of profitable investment of the fund as settlements were reached and added to the fund, the actual amount eventually distributed substantially exceeded the total amount of the individual settlements. The aggregate of fees and expenses which we approved was less than the interest earned on the fund and left a balance of more than $8,000,000 in interest available for distribution in addition to the principal of the settlement fund. Thus, after appointment of an Administration Committee to review the documentation and validity of class members' claims against the fund and after recommendations by that Committee with respect to each submitted claim, distribution of some $206,000,000 in cash and in notes and warrants of one of the defendants was made to over 2,500 claimants who filed claims which were satisfactorily substantiated. Distributions to a total of approximately 75 class members who filed properly substantiated late claims were subsequently made out of the reserve fund as follows: $1,548,909 in September 1980; $298,696 in 1981; and $72,627 in 1982. In all, distribution payments have been made to approximately 2,632 class members who *1098 filed valid claims based on approximately $3.6 billion in purchases, or roughly 77% of the total estimated $4.7 billion in purchases for the relevant period. The figures indicate that 97% of the total available funds, exclusive of class attorneys' fees and costs, were paid to these claimants. Thus, those who filed valid claims have already received 163% of their provable single damages using the plaintiffs' expert's 3.6% damage estimate, or 174% of single damages if the 2.6% damage estimate of the Court's expert is used.
Because of the very large amount in the settlement fund as well as the large number of claims against the fund, the Administration Committee's review and audit of the claims filed was, obviously, a substantial undertaking. The Administration Committee, with our approval, engaged Touche Ross & Co. as accountants to assist in the review and audit of the claims; Analytical Computer Services, Inc. to provide computer services and procedures; LaSalle National Bank to maintain custody of the funds; and Harris Associates to act as investment advisors. Beginning shortly after the approval of the settlement, the Administration Committee, assisted by these technical advisors, began the extensive process of reviewing the submitted claims and conducting individual negotiations with many of the approximately 2,700 class claimants.
As a result of the review, the purchases allowed for purposes of computation of the pro rata shares in the distribution was reduced by over 25%from over $4,800,000,000 in claimed purchases to approximately $3,900,000,000 of allowed purchases. Thus, the effect of the review and audit process was to distribute to valid class claimants an additional approximately $54,000,000 of the settlement fund. The Administration Committee was also responsible, with the Court's approval, for investment decisions concerning the fund during the interim between its deposit in escrow and its distribution to those class members who filed properly substantiated claims. And the Committee responded to numerous inquiries and concerns expressed by various claimants with respect to all aspects of the distribution process.
The Administration Committee, with the assistance of the supporting services including the accountants and computer services, expeditiously reviewed claims from approximately 2,700 purchasers of folding cartons, each with innumerable purchases over a four year period. The total amount of the purchases reviewed was almost $5,000,000,000. Questions were raised with respect to the eligibility of a substantial number of the purchases, conferences and hearings were held, and innumerable allegedly substantiating documents were examined. Approximately 25% of the originally claimed purchases were rejected, with the result that the claimants whose purchases were ultimately approved by us received, as previously noted, their allowable shares of an additional $54,000,000 of the settlement fund. Thereafter, the amount due to each successful claimant was calculated and checks in the appropriate amounts sent to each. Ultimately, checks were sent to some 2,632 class members whose claims were approved in an aggregate amount of approximately $208,000,000. At the same time, the Administration Committee, with the assistance of the investment advisors and subject to our final approval, was responsible for the investment and reinvestment of a fund which ultimately grew, as more settlements were made and interest was earned, to well over $220,000,000 and earned interest over the period at an average rate of 15%. All of this was accomplished at a cost of $1,176,000, slightly over one half of 1% of the fund. The entire operation was so well done that not one appeal was filed from our orders approving either rejection or payment of claims after review of the committee's recommendations.
The Administration Committee has from time to time submitted for our review petitions for reimbursement from the reserve fund for fees and expenses, including those of the accountants, computer services, custodian and investment advisors. By specific Administrative Orders, we have approved, based on our careful review of the submitted petitions, disbursements for attorneys' *1099 fees, for accounting fees and computer services, and for banking, escrow and investment advisor fees in an aggregate of $1,176,000, in our judgment a very reasonable amount in light of the time spent, the quality of the services performed, and the amounts involved.
Distributees of the settlement fund, per our Administrative Order No. 17, dated April 14, 1980, received, together with their distribution checks, flyers which read as follows:
Enclosed is a check for your distributive share of the Folding Carton Antitrust Settlement Fund. If your check is for an amount greater than $4,000, then you will receive additional distribution from the Settlement Fund in the form of Federal Paper Board Company notes and warrants shortly. If your enclosed check is for an amount of $4,000 or less, then this check includes your fractional share of Federal Paper Board Company notes and warrants, and is thus in full distribution of your claim to the Settlement Fund. [Emphasis added]
We ordered on April 22, 1980, that those whose cash payment exceeded $4,000 and who therefore also received notes and warrants of defendant Federal Paper Board Company, receive together with their distribution a notice stating:
The enclosed Federal Paper Board Company notes and warrants represent final distribution of your share of the Folding Carton Antitrust Litigation Settlement Fund .... Your claim to the settlement fund is now fully satisfied. [Emphasis added]
See Administrative Order No. 20. The actual distribution and receipt of these notices occurred shortly after April 22, the date of Administrative Order No. 20.
Pursuant to the settlement agreement, a portion of the settlement fund was allocated to a reserve fund to cover expenses, costs and fees related to the administrative portion of the action, corrections to claims arising after the first distribution and to cover payment of late claims against the fund. Administrative Order No. 10, dated March 6, 1980, which substantially approved the Administration Committee's first distribution recommendation, accordingly directed that the settlement funds remaining in escrow after the distribution be held in escrow and reinvested until further order of Court. As of March 31, 1982after drawing on the funds to cover payment of the late claims referred to above as well as various administrative expenses, $5,729,550 remained in the fund. That amount has continued to earn interest and the reserve fund is now estimated to be approximately $6 million.
These Proceedings
As a result of various factors including high investment yield on the settlement fund, exceptionally low per dollar administration expenses and a small and dwindling number of late claims filed, the amount now remaining in the reserve fund is in excess of what the Court or any of the parties to the settlement and distribution originally estimated. It now seems probable that the reserve fund exceeds the amount of any possible future administration costs as well as possible future claims of class members, although we note that if even a fraction of the purchasers who have not heretofore filed claims based on their purchases were to do so and their claims were allowed on the same basis as those of the class members whose claims have previously been paid, the reserve fund would be inadequate. See footnote 9, infra.
In light of this probability, we face a novel administrative problemthe result primarily of the high income earned on the unprecedented amount involved in this settlement as a result of outstanding investment decisions, fewer late claims and lower administration expenses than anticipated. That problem is how to dispose of the funds remaining on account after defendants have relinquished all right to them and after all claiming class members have been paid substantially more than the aggregate settlements, more than anyone anticipated, and have received notice as provided in the Court-approved settlement and distribution *1100 plan, that no further distribution would be made to them.
Beginning in October 1980, certain of the former claiming class members made inquiries of the Administration Committee and the Court with respect to the disposition of the reserve fund. Motions have now been filed by a comparative handful of the 2,632 class members who filed claims which were allowed, including Hartz Mountain Corporation, G. Heileman Brewing Co., Grist Mill Co., Cumberland Farms Dairy, Inc., Food Fair, Inc. and Beatrice Foods Company, requesting distribution of the excess reserves to those members of the former plaintiff class who have previously been allowed claims against the fund. Various defendants, Mead Corporation, Alton Boxboard Company, Industrial Paper Company, Champion International Corporation and Federal Paper Board Company, have each filed motions arguing in effect that, since members of the plaintiff class who filed claims have been more than adequately compensated and were on notice that they had received their full and final distributions, any amounts in the reserve fund that cannot now be distributed as contemplated in the notice of settlement should be distributed pro rata to the settling defendants.
The Administration Committee has filed briefs supporting distribution of the excess reserves to a not-for-profit educational foundation dedicated to public interest research concerning the effective judicial and legal management of complex and multidistrict litigation, competition and the enforcement of the antitrust laws. Specifically, the Administration Committee suggests that the foundation be responsible for the following undertakings:
1. The research, study and promotion of judicial and legal management of complex and multi-district litigation with particular emphasis on the procedural and substantive aspects of the antitrust laws.
2. The promotion of research, study and implementation of the antitrust laws including, but not limited to the interplay of the federal and state antitrust laws, the federal and foreign antitrust laws, and the antitrust laws and other areas of the law.
3. The payment of late claims for folding carton purchases falling within the class definition for the Folding Carton Antitrust Litigation.
Also before us is a related motion of the former class members, Cumberland Farms Dairy, Inc. and Pantry Pride Enterprises, Inc., purportedly on behalf of themselves and the other claiming former class members, to vacate certain Administrative Orders[1] awarding fees and expenses out of the reserve fund, the ownership of which they also claim. The Administration Committee has filed a brief in opposition to this motion challenging its timeliness and the standing of the two movants to challenge the Administrative Orders. The Administration Committee further contends that the fees and expenses were reasonable in any event.
The Legal Status of the Reserve Fund
It is clear that the settling defendants can lay no claim to legal ownership of the reserve fund. The settlement papers signed by each defendant unambiguously provided that the defendants' payments into escrow of their settlement liabilities constituted irrevocable transfers subject only to possible subsequent invalidity or termination of the settlements, contingencies which never occurred. Defendants have not contended that these agreements should now be subject to reformationan argument for which there appears to be very little basis in any event. See Beecher v. Able, 575 F.2d 1010, 1015 (2d Cir.1978); Haas v. Pittsburgh National Bank, 495 F.Supp. 815 (W.D.Pa.1980); see also Pennsylvania R.R. v. United States, 98 F.2d 893, 894 (3d Cir.1938) (rejecting railroad's contention *1101 that it was the beneficiary of a "resulting trust" consisting of the unclaimed residue of a judgment fund into which it had paid). The defendants have relinquished any claim to any portion of the settlement fund and therefore lack any possible claim to the reserve fund.
The bulk of the argument advanced by the several former claiming class members in support of their claim to the reserve fund is that they are legally entitled to "return" of the funds which, they contend, were "erroneously taken" from them. We conclude that the former class members, like the settling defendants, do not have a legal or equitable interest in the fund.
We turn initially to the Administration Committee's argument that the former class members, by failing to object to the settlement and distribution procedure described in the 1979 class notice, have waived any right to object to disposition of the reserve fund. The Committee's position is based on the waiver clause of the class notice, quoted above, which provided that failure to object to the plan of distribution and to the reserves in the manner set forth in the notice constituted waiver of objection. Since no objection was raised to the creation of the reserve fund or to the formula for determining the amount to be distributed to each class membera formula which was carefully adhered tothe Committee contends all class members have waived any claim to the reserve fund.
It is, of course, accurate that no objection was raised. It is also true thatalthough there was certainly some probability, as is usually the case in class action distributions, that the reserve fund would contain an excess over all claims and expensesit did not become clear until two years after the September 1979 hearing on the class settlement how much might be remaining in the fund. Accordingly, the former class members' failure to raise contentions with respect to possible distribution of any excess amounts in the reserve fund may arguably not have constituted a waiver of their right to object to present distribution proposals. Cf. Curtis Publishing Co. v. Butts, 388 U.S. 130, 142-45, 87 S.Ct. 1975, 1984-86, 18 L.Ed.2d 1094 (1967). In any event, while it may well be that former class members whose claims were paid waived any claim to the reserve fund, we will nevertheless consider their contention that they are the legal owners of that fund.[2]
The notice of settlement and the claim form, previously quoted, define the legal entitlement of the class members to the settlement fund. Essentially, the claimants argue that those documents establish that their bargain was for a shareto be determined on the basis of the number and *1102 amount of the claims actually filedof the total settlement fund, less attorneys' fees, costs and reserves held back as insurance against late claims and possible miscalculation in the settlement distribution. They argue that, so long as there remains any amount in the settlement fund which is not necessary to meet the expenses and contingencies for which deductions were anticipated, their claims have not been "fully satisfied" under the terms of the settlement arrangement and they are therefore entitled to the excess funds.
The relevant documents clearly indicate, however, that the basis for the total settlement bargain for each class member was that class member's fractional share alone of total purchases in the relevant period. The claim form did state that "[t]he actual amount of [each class member's] recovery will vary to some extent" from the estimation derived on the basis of share of total purchases, as a result of various factors including, among others, the fact that some purchasers might not file claims. However, the basis for estimation of the recovery and, it must follow, for the class members' entry into the settlement bargain was each claimant's fractional share of total purchases. See Claim Form, § 9.
We agree with the proposition that the class members were to receive a variable share of the settlement fund. We are unable to concur, however, in the second step of the argument that the entitlement to a variable share amounts somehow to a legal claim on the reserve fund. The uncontrovertible fact is that the bargain has been carried through and the variable shares to which claiming class members were entitled have been fully distributed. In fact, the class members who filed claims established that they made 77% of the relevant purchases but have already received roughly 97% of the settlement fund, a substantial, advantageous variance from the expected and projected terms of the bargain.
We are aware of one fairly close analogy to the situation here and that analogy supports the conclusion we reach. In In re Vulcan & Reiter Co., 162 F.2d 92, 94 (2d Cir.1947), a bankruptcy creditor who had received his share in a creditors' composition sought to obtain funds remaining on deposit in court after distribution to creditors of their composition shares. Even though the amount which the creditor sought to recover was less than the unpaid balance of his original debts, the attempt was unsuccessful. The court concludedas we conclude here with respect to the former class membersthat the creditor had already had the benefit of his bargain and was entitled to nothing more.
Moreover, the former class claimants have already agreed that their claims against the fund have been fully satisfied. Every class member who filed a valid claim against the settlement fund and received a distribution from it was informed that its distributed share was final and represented full satisfaction of its claims against the fund. See Administrative Orders 17 and 20. Not a single distributee contested the finality of the distribution to it at that time.[3]
*1103 Accepting the argument that the former class members are now legally entitled to "return" of the reserve fund would compromise the important policy of finality in class action distributions. The clear intent of Administrative Orders 17 and 20, as well as that of the allocations to the reserve fund, was to avoid prolonging and complicating the settlement distribution process. The finality of the distributions was clearly and unambiguously expressed in order to protect all of the parties concerned and to reduce the costs of settlement administration. We will not disregard the clear and unequivocal understanding that the distributions to the claiming class members were final distributions which extinguished their claims to the settlement fund.
The claimants emphasize that the class was a group of approximately 2,632 whose identities and pro rata shares of the settlement are known and that distribution of the $6 million to them could be accomplished efficiently and at relatively moderate expense. Those facts do not, however, establish the right of any or all of them to the reserve fund. The fact that further distribution to them would not be a complicated process and that the reserve fund would not necessarily be exhausted in the process of a further distribution to the already well compensated former class members provides no legal basis for upsetting the finality of the settlement distribution.
It may be noted in passing that counsel for the plaintiff class have also been well compensated for their services to the class, having received, with our approval, approximately $13,500,000. To the extent that they would share in any further distribution to clients who were members of the class, and we are aware that most of them had contingent fee agreements with clients who were class members since we took those agreements into account in awarding fees, they would be excessively compensated. Those counsel who were not compensated from the settlement fund have, we assume, been paid by their clients for whatever services they may have rendered, whether under contingent fee agreements or otherwise. Since all counsel who represented the class and performed the services which generated the settlement fund have received full compensation for their services, there would appear to be no justification for further compensation to any attorneys whether class counsel or not.
All of the movants before us appear to agree that the members of the plaintiff class who did not file claims have no legal interest in the reserve fund. These absent class memberswhatever may be their equitable statusfailed to file timely claims against the settlement fund. Although it was within our discretion to allow their late claims,[4] a procedure to which no one has objected in any event, the non-claiming class members clearly have no present legal ownership interest in the fund. See, e.g., Illinois Bell Telephone Co. v. Slattery, 102 F.2d 58, 66-67 (7th Cir.1939); In re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106, 1135 n. 51 (7th Cir.) (dicta), cert. denied, 444 U.S. 870, 100 S.Ct. 146, 62 L.Ed.2d 95 (1979).
We have also considered the possibility that the reserve fund may have escheated either to the State of Illinois or to the United States government. The statutes which would govern that event are inapplicable by their terms, however. The federal statute, 28 U.S.C. § 2042, applies only where "money" has been "deposited in court" for at least five years and the right to the money "has been adjudicated or is not in dispute." Five years has not elapsed, these funds have not been "deposited in court" and the right to them is hotly contested. Similarly, Ill.Rev.Stat. ch. 141 §§ 101, et seq., vests no interest in the state until property held "in a fiduciary capacity," Ill.Rev.Stat. ch. 141 § 107, or by a court, Ill.Rev.Stat. ch. 141 § 108, has gone unclaimed for a period of seven years.
*1104 Equitable Considerations
We recapitulate: the settlement agreements and the plan of distribution in these lawsuits might have provided for "recapture" of excess reserves by the settling defendants; they might also have provided for a supplemental distribution of excess funds to those class members who filed valid claims. In fact, no provision was made for disposition of excess funds remaining in the settlement account either to defendants or to the class members. On the contrary, far from providing for recapture by defendants or supplemental distribution to the already compensated claimants, the clear terms of the settlement and distribution agreements foreclose any legal interest of either group in the reserve fund.
As is clear from the relevant documents, the reserve fund was established primarily as an accommodation to plaintiff class members who failed to file claims in advance of the date set for distribution of the settlement and for payment of administrative fees and expenses which, it was understood, would be substantial. Our minimal[5] allocation to reserves reflected the judgment that every opportunity should be afforded class members who had not filed claims to come forward and collect their rightful share of the settlement. Although a cutoff date for the filing of claims was established, we have consistently paid properly substantiated late claims out of the reserve fund. This was a policy conceived out of fairness to those smaller class members who faced particular difficulties filing or substantiating their claims as well as to those class members who, for whatever reason, might not have had notice of their possible interest in the settlement. See generally Zients v. LaMorte, 459 F.2d 628, 630 (2d Cir.1972). No party has ever objected to this practice.
As matters now stand, we are obliged to determine the disposition of a fund, subject to our jurisdiction and control, to which no contender has a legal right: not the settling defendants, who have expressly relinquished any interest in the fund; nor the claiming plaintiffs who have received and acknowledged full satisfaction of their claims against the fund; not their already well compensated counsel; not even the non-claiming former class members who have failed to file timely claims against the fund.
Although the situation with which we are faced is, so far as the size of the reserve fund is concerned, an unprecedented one, we are not wholly without guidance in our resolution of the question. In virtually every class action, there remains a reserve fund after all claims and expenses have been paid. Applying a cy pres concept, courts have directed that such funds be turned over to organizations serving the public interest such as law schools, state attorneys general, the American Bar Foundation, the Chicago Bar Foundation, and others. Moreover, it is well recognized that the administration of class actions, particularly of the multidistrict variety, will present novel and unanticipated administrative difficulties. We are admonished to respond with flexibility and imagination. Miller, Problems in Administering Judicial Relief in Class Actions Under Federal Rule 23(b)(3), 54 F.R.D. 501, 510-11 (1972); see also Manual for Complex Litigation § 1.43 (1982). That admonition reflects in part the equitable origin of the class action device, see Hansberry v. Lee, 311 U.S. 32, 41, 61 S.Ct. 115, 117, 85 L.Ed. 22 (1940); Montgomery Ward & Co. v. Langer, 168 F.2d 182, 187 (8th Cir.1948), a setting characterized by innovation consistent with settled principles. 1 Pomeroy, Equity Jurisprudence § 60 (Symons ed. 1941).
The Seventh Circuit, in a case which presented the converse of the problem we face today, adverted to the pivotal role of equitable principles in apportioning class action settlement funds. In affirming the district court's allocation, the court stated:
*1105 [T]he allocation of an inadequate fund among competing claimants is a traditional equitable function, see Chafee, Some Problems of Equity 169-70, 223 (1950)using equity to denote not a particular type of remedy, procedure, or jurisdiction but a mode of judgment based on broad ethical principles rather than narrow rules. Cf. Zients v. LaMorte, 459 F.2d 628, 630 (2d Cir.1972). To make an equitable allocation in this case the judge did not have to resolve trial-type issues of liability and therefore did not have to conduct a trial. He had only to weigh the relative deservedness of Curtiss-Wright and the other class members, and he could do this on the basis of the undisputed facts before him.
Curtiss-Wright Corp. v. Helfand, 687 F.2d 171, 174-75 (7th Cir.1982). Faced with the more closely analogous problem of how to dispose of unclaimed portions of settlement funds, courts have the power and the responsibility to exercise equitable discretion to achieve substantial justice in the distribution of the funds. See Beecher v. Able, supra, 575 F.2d at 1016; see also 3 Newberg, Class Actions § 5620j (1977).
As previously indicated, there are three identifiable groups who might lay claims to the reserve fund: the settling defendants, the claiming former class members (and their counsel), and the non-claiming or absent former class members. We turn now to consideration of the "relative deservedness," Curtiss-Wright Corp., supra, 687 F.2d at 174, of these groups, a determination which must be informed by the punitive and compensatory policies of the antitrust laws, the wrongdoing or "unclean hands" of each group and the extent to which each has been compensated for any actual injury it may have suffered. Cf. United States v. Morgan, 307 U.S. 183, 194, 197-98, 59 S.Ct. 795, 801, 802, 83 L.Ed. 1211 (1939) (court of equity, which molds its remedies in light of public policy, should not distribute funds on deposit until claimants' relative entitlements have been determined).
The overriding Sherman Act policy of deterring price fixing violationsconduct for which many of these defendants or their officers had previously been criminally convictedis the most important factor in assessing the defendants' possible equitable entitlement to the reserve fund. That policy is beyond question. See Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 494, 88 S.Ct. 2224, 2232, 20 L.Ed.2d 1231 (1968) (rejecting pass-on defense in part because its application might permit Sherman Act violators to "retain the fruits of their illegality"); Illinois Brick Co. v. Illinois, 431 U.S. 720, 745-46, 97 S.Ct. 2061, 2074, 52 L.Ed.2d 707 (1977).
Even the defendants do not argue very strenuously that the reserve fund should be "returned" to them, although they suggest equitable considerations which they assert warrant return of the fund to them in lieu of cy pres distribution of the funds. Specifically, they urge that the members of the plaintiff class whose claims were paid have already received compensation far in excess of what anyone anticipated at the time the settlements and plan of distribution were approved and were on notice and acknowledged that they had received their full and final distribution. While we recognize these facts, in light of the Sherman Act policy of deterrence and the defendants' wrongdoing, we reject their equitable claim to the fund. See Beecher v. Able, supra, 575 F.2d at 1016; cf. Hansen v. United States, 340 F.2d 142, 144 (8th Cir.1965) (no equitable basis for return of illegal rent overcharges).[6]
We find almost equally unpersuasive the equitable claim of the claiming former class members (and their counsel) to these funds. The crux of their argument is that because their complaints originally covered an alleged 15 year conspiracy and because *1106 the Sherman Act provides for treble damage recovery, the terms of the settlement do not award them "their [full] out-of-pocket losses." They argue that, even though the final distribution to them in accordance with the agreed-upon plan of distribution has already resulted in their obtaining between 163% and 174% of their estimated single damages ("out-of-pocket losses") for the four year period 1971-74, an additional distribution to them of the reserve fund would only constitute deserved "compensation."
The benefit of the settlement to the plaintiff class has already been the subject of extended briefing and of a hearing in this Court. We approved the settlement on the premise that members of the plaintiff class would recover approximately 118% of their single damages for four of the alleged fifteen years of the price fixing conspiracy a percentage and amount substantially below that (163%-171%) which the claiming class members actually recovered.
No one could seriously suggest that the settlement, which was unprecedented both in absolute amount and in percentage of alleged single damages recovered, was not an outstanding result from the point of view of the class plaintiffs. See In re Folding Carton Antitrust Litigation, supra, 84 F.R.D. at 254, 268-69. That point has been made repeatedly, not least forcefully by the attorneys for the plaintiff class themselves. See Confidential Memorandum in Support of Proposed Settlements and Plan of Distribution 65-68.
Moreover, it is an economic fact of which we can take judicial notice that the members of the plaintiff class, none of whom were ultimate consumers, in almost every instance had no "out-of-pocket losses" at all. Since virtually all purchasers of folding cartons were subject to the price-fixing conspiracy here alleged, the probabilities are that most, if not all, of the class members included the total cost of their folding carton purchases in the costs on the basis of which they calculated their profits and then passed those costs and the profit thereon to their customers.[7] While this "pass-on" is no defense so far as the defendants are concerned, see Hanover Shoe, Inc., supra, it is relevant to our analysis of the equitable entitlement of the class members whose claims were paid. We cannot overlook in connection with our equitable analysis the fact that these claimants have already received between 163% and 174% of the estimated overcharges which they paid in the highest four years of their purchases between 1960 and 1974, overcharges which in almost every instance they had already passed on with a profit to their customers.
The claiming former class members' contentions that they have not been properly compensated and are therefore equitably entitled to an additional distribution proceed from the assumptionfor which there is absolutely no demonstrated basisthat the class could have recovered treble damages for the entire 15 year period for which a conspiracy was alleged. In fact, use of a four year period for damage estimation may well have worked a benefit to the class plaintiffs who, had they failed to show at trial that the alleged conspiracy was fraudulently concealed, might have recovered for only two years and nine months of alleged overcharges. In re Folding Carton Antitrust Litigation, 84 F.R.D. at 254, 269; and see In re Anthracite Coal Antitrust Litigation, 79 F.R.D. 707, 714 (M.D.Pa.1978). The use of four years in the settlements and in the distribution formula was clearly a reflection of some uncertainties with respect to liability and the period of damages which could be established.
*1107 Moreover, as previously discussed, in measuring the deservedness of the claiming former class members to additional settlement fundsas distinct from what might have been their legal rights had this litigation proceeded through trial on the merits we may properly take account of the near certainty that they passed on to their customers most, if not all, of the overcharges to which they were subjected. Though they refer to themselves in their briefs as "injured" in the amount of defendants' overcharges, equity must recognize that they may well have suffered actual losses substantially below the amount of those alleged overcharges or, more probably, both recovered any overcharges and enjoyed a profit on them.
The attempt of a few former class members to assert an equitable interest in the reserve fund is rendered anomalous by the simple fact that these claimants and their attorneys have already been more than amply compensated for their diligence in enforcing the antitrust policies of the Sherman Act. In light of the terms of the settlement and the even more generous distribution already made, it is apparent that a further distribution to class members who voluntarily settled their claims for the substantial amount they have already received, would be an undeserved windfall.[8]Cf. Van Gemert v. Boeing Co., 553 F.2d 812, 815-16 (2d Cir.1977) (affirming district court's refusal to redistribute unclaimed portion of securities fraud judgment among those who had already appeared and collected their share).
In contrast, the equitable claim on these settlement funds of the non-claiming class members is substantial. They furnished equal consideration for the settlement in this litigation in that their purchases formed part of the base of the various settlements. Moreover, they too are bound by the final judgment. Even though the settlement fund was established for their benefit and, in effect, paid for in part with consideration furnished by them, the non-claiming class plaintiffs have to date received no direct or indirect benefit from the settlement fund. In a related context, the Supreme Court has recently remarked that "members of the class, whether or not they assert their rights, are at least the equitable owners of their respective shares in the recovery." Boeing Co. v. Van Gemert, 444 U.S. 472, 481-482, 100 S.Ct. 745, 750, 62 L.Ed.2d 676 (1980) (holding that attorneys' fees could not be paid out of unclaimed recovery in securities fraud case where fund was created by final judgment entered after trial on the merits).
What is more, the reserve fund itself was established for the express purpose of benefiting those class members who might appear and file late claims. The conclusion seems unavoidable that those class members who have not come forward to receive their intended benefit have an equitable claim to the reserve fund. It is beyond question that these class members' claims are equitably superior both to those of the settling defendants on account of whose wrongdoing the settlement fund was created and to those of the class members who have already received substantially more than their anticipated share of the fund.
Disposition of the Fund
The superior equitable claim of the non-claiming class plaintiffs to the reserve fund constitutes the focal point for our deliberations with respect to its proper disposition. Unfortunately, recognition of that superior claim does not resolve the distribution question in this case. The difficulty of distributing the reserve fund fairly among the non-claiming class members is obvious. Although the defendants' purchaser lists, which were used to identify the 35,000 entities who received original notice of the pendency of this litigation and the 6,000 who were notified of the settlement, are still available, their value for determining *1108 the true identity and the share of the absent class members must, realistically, be viewed as limited. Those lists provide no indication of the relative purchases of those who are identified as defendants' customers. The corporate identity of some of those who appear on the lists has changed or may even have terminated, a fact which became apparent in 1979 when we were unable to contact by mail some of those on the lists. And, what is most significant, neither the notice that was mailed to those on the lists nor the wide publicity that this settlement received through the media has yielded properly substantiated claims with respect to nearly 25% of the folding carton purchases for the relevant four year period.[9] More than three years have now elapsed since the approval of this settlement and we must now recognize the reality that we will probably never be able properly to verify all the unaccounted for purchases and purchasers.
The claiming former class members appear to suggest that the relative facility with which these excess funds could be distributed to them should warrant our ruling in their favor. As already noted, we agree that these former class members, who have filed properly documented claims representing 77% of the relevant sales and who have already received pro rata 97% of the settlement, can be easily enough identified for further distributions. However, we do not accept the implication that considerations of expediency should be allowed to obscure the equitable principles that we have analyzed above. Though the claiming former class members can be readily identified and the non-claiming class members cannot, the "relative deservedness" of the latter group is obvious.
The position of the Administration Committee, which we accept in principle, is that we should do the best we can, under the circumstances, to achieve a disposition of the reserve fund which advances the Sherman Act policies pursuant to which the settlement fund was created and which even if indirectlybenefits those absent class members for whom the fund was established. The Committee suggests that we should explore the concepts of cy pres or "fluid class recovery" for what guidance they may offer in achieving an equitable disposition.
Essentially, we are urged to apply the propositionone with equitable origins of its ownthat where distribution to the class who should ideally receive a fund is impracticable or inappropriate, the distribution should be made in the "next best" fashion in order as closely as possible to approximate the intended disposition. This is the central concept of both the cy pres and fluid class recovery theoriesthe terms appear to be used interchangeably in the literature, see The Cy Pres Solution to the Damage Distribution Problems of Mass Class Actions, 9 Ga.L.Rev. 893, 894-95 (1975)and it is this concept, rather than any possibly tainted label with which we are concerned today. The notion that the unclaimed portion of a class action recovery in particular may be applied cy pres, as nearly as possible, to the failed or unachievable purpose for which the recovery was collected, has gained the support of scholars and commentators. See, e.g., Note, 9 Ga.L. Rev. 893 (1975); Comment, Damage Distribution in Class Actions: The Cy Pres Remedy, 39 U.Chi.L.Rev. 448 (1972); Jacoby and Cherkasky, The Effects of Eisen IV and Proposed Amendments to Federal Rule 23, 12 San Diego L.Rev. 1, 20-27 (1974).
The problem in class action litigation of an unclaimed surplus of funds collected pursuant to settlement is, as the literature and the cases document, a recurrent one. Use of a cy pres mechanism is an apparent solution to this problem. At least one antitrust settlement agreement has expressly *1109 provided that the unclaimed surplus, which could have been as much as $20 million, be turned over to certain state attorneys general for use in pro bono projects that would benefit consumers who might have been adversely affected by the defendants' illegal activities. State of West Virginia v. Chas. Pfizer & Co., 314 F.Supp. 710, 728, 733-34 (S.D.N.Y.1970), aff'd, 440 F.2d 1079, 1084, 1091 (2d Cir.), aff'd by an equally divided court, 404 U.S. 548, 92 S.Ct. 731, 30 L.Ed.2d 721 (1971).
We are fully aware that the cy pres and fluid class recovery distribution theories have been the subject of controversy. While some courts appear to have endorsed the principle, see, e.g., Bebchick v. Public Utilities Commission, 318 F.2d 187, 203-04 (D.C.Cir.) (market distribution of rate overcharge; non-class action), cert. denied, 373 U.S. 913, 83 S.Ct. 1304, 10 L.Ed.2d 414 (1963); Daar v. Yellow Cab Co., 67 Cal.2d 695, 63 Cal.Rptr. 724, 433 P.2d 732 (1967) (California procedural law); Simer v. Rios, 661 F.2d 655, 675-77 (7th Cir.1981) (fluid or cy pres distribution proper only where recovery is under a statute embodying policies of deterrence, disgorgement and compensation), cert. denied, 456 U.S. 917, 102 S.Ct. 1773, 72 L.Ed.2d 177 (1982), others have flatly rejected its validity, see, e.g., Eisen v. Carlisle & Jacquelin, 479 F.2d 1005, 1016-18 (2d Cir.1973), vacated on other grounds, 417 U.S. 156, 172 n. 10, 94 S.Ct. 2140, 2150 n. 10, 40 L.Ed.2d 732 (1974); In re Hotel Telephone Charges, 500 F.2d 86, 90 (9th Cir. 1974); City of Philadelphia v. American Oil Co., 53 F.R.D. 45, 72 (D.N.J.1972).
We do not believe that it is necessary for us to enter this debate. The objections to fluid class or cy pres recovery voiced in Eisen, supra, and similar cases have centered on the impermissibility of using such recovery to allow an otherwise allegedly unmanageable class action to proceed to trial. In that context, some courts have viewed these recovery mechanisms as inconsistent with Fed.R.Civ.P. 23 and, alternatively, due process. By contrast, we are presented here with what is in effect a fait accompli: the class members who filed claims have been substantially compensated yet the reserve fund remains and must be allocated to some appropriate use. We are not now making the determination whether the fund may be established in the first place consistent with the federal rules and the due process clause. Cf. Beecher v. Able, supra, 575 F.2d at 1016 n. 3 (defendant may agree to a settlement which provides for fluid recovery notwithstanding the Eisen rule).
We are not aware of any judicial opinions dealing with the question whether, after the fact, the cy pres distribution mechanism may be used to dispose of unclaimed settlement funds for which there is no legal owner. As previously indicated, we are aware of situations in which it has been applied.[10] In light of the willingness of a number of courts to extend the doctrine to the class action setting and, we must add, in light of the manifest inadequacy of the alternative solutions that have been proposed, we conclude that a cy pres approach is the correct one here.
We note that, because this fund already exists, the analogy between this case and the trust law origins of the cy pres doctrine is a particularly close one. We have already subject to our control a substantial fund, originally allocated to a reserve in part in order to benefit those members of the plaintiff class who had yet to file their claims, which, it is now apparent, may not fully be put to that intended use. Those who contributed to the fund never had any expectation that it would be returned to *1110 them. Those who filed claims have been fully and well paid. We have the authority to accomplish what may fairly be termed the "general intention" of the allocation to reservesenforcement of the antitrust policies and benefit to the absent class members by substituting another purpose which approximates as closely as possible the failed one. See generally Noel v. Olds, 138 F.2d 581, 587 (D.C.Cir.1943), cert. denied, 321 U.S. 773, 64 S.Ct. 611, 88 L.Ed. 1067 (1944).
We know of no fairer or more equitable way to dispose of the reserve funds than to allocate them to a use which will serve the Sherman Act policies of antitrust enforcement, deterrence and fair competition while providing some indirect benefit not only to the uncompensated members of the plaintiff class, but also to the general public, the ultimate consumers of folding cartons who were really the persons adversely affected by defendants' activities as well as to those class plaintiffs who have already received their final distribution.
The Administration Committee has proposed that the reserve funds be used to establish a tax-exempt foundation whose purposes would be (1) research, study and promotion of judicial and legal management of all complex and multidistrict litigation, particularly antitrust litigation; (2) promotion of research, study and implementation of various aspects of the antitrust laws; and (3) payment of possible future late claims in this case.
In principle, we accept the Committee's proposal with the following qualifications: First, we observe that the superior equitable claims of the non-claiming class members to these funds has motivated in part our decision to accept the Committee's proposal. It is essential, in our view, therefore, that prior to full commencement of the foundation's activities, a final effort be made to locate the non-claiming members of the plaintiff class and to assist them in making proper claims against the remaining reserve funds. We therefore direct the Administration Committee to propose steps for our approval to accomplish this. The principal of the reserve fund should be held available for a period of one year from the date of this opinion to cover the cost of locating absent class members and of making appropriate payments to them. Any interest accruing after the date of this opinion may be transferred to the foundation. What funds remain undistributed after all possible efforts have been made to locate and substantiate the claims of non-claiming class members may be transferred to the foundation one year from the date hereof.
Second, we note again that the problem of undistributed or surplus funds in class actions and in related contexts is a recurrent one. It should be a high priority of the newly created foundation to explore ways of dealing with this problem while benefiting the maximum number of claimants in these cases.
We believe that the foundation should also include in its purposes consideration of ways to improve competition and to deter or detect and stop anticompetitive activities. It should also include research into the possible forms of notice to class members and the relative effectiveness of different approaches to settlement of complex cases. Finally, we believe that it should include research into the numerous questions that have been raised with respect to the conduct and compensation of counsel in class actions. Subject to these qualifications, we are in agreement with the Administration Committee's proposal. We leave to that body, subject to our approval, the details of forming the foundation and obtaining the proper tax exempt status for it.
Motion to Vacate Awards of Fees and Expenses for Settlement Administration
Finally, we turn to the motion of certain former class members to vacate Administrative Orders that awarded attorneys fees and other fees and expenses associated with the distribution of the settlement fund. The challenged orders, the dates of which cover the period November 2, 1979 through August 24, 1982, all provide for awards of fees and expenses out of the same reserve fund in which the former class members have asserted an interest. We have concluded, however, that the former *1111 class members, having received and acknowledged full satisfaction of their claims against the settlement, do not have either a legal or an equitable interest in any reserve funds now remaining on account.
It follows from this conclusion that the former class members have no standing to complain that the unclaimed and unexpended residue of the settlement reserve fund is improperly small. The arguments of those former class members who challenge these Administrative Orders are all founded on the incorrect premise that they have been and are now the owners of the reserve fund. See Memorandum in Support of Motion to Vacate Certain Administrative Orders at 4; Reply and Memorandum in Support of Motion to Vacate Certain Administrative Orders at 6. As we have found, however, they lack any interest in the reserve fund and cannot contend that they have been injured in fact by our payment out of that fund of fees and expenses incurred by the Administration Committee and otherseven if it were the case that the fees and expenses were unreasonable. Cf. In re Fine Paper Litigation, 632 F.2d 1081, 1086-87 (3d Cir.1980) (putative member of a not yet certified class has no standing to object to terms of settlement that do not affect its rights); and see generally Warth v. Seldon, 422 U.S. 490, 498-500, 95 S.Ct. 2197, 2204-06, 45 L.Ed.2d 343 (1975).
In any event, it is obvious that the attorneys' fees and expenses authorized by the challenged Administrative Orders were in fact reasonable. The movants correctly point out, as we are well aware, having contributed to their development, that the factors which should guide our discretion in assessing the reasonableness of attorneys' fees have been developed in a long line of authority. In a recent opinion, the Seventh Circuit adverted to eight, possibly overlapping, factors that are contained in the Code of Professional Responsibility of the American Bar Association:
(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly.
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.
(3) The fee customarily charged in the locality for similar legal services.
(4) The amount involved and the results obtained.
(5) The time limitations imposed by the client or by the circumstances.
(6) The nature and length of the professional relationship with the client.
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services.
(8) Whether the fee is fixed or contingent.
Bonner v. Coughlin, 657 F.2d 931, 934 (7th Cir.1981) (quoting DR 2-106); see also Lindy Brothers v. American Radiator Corp., 540 F.2d 102, 113-18 (3d Cir.1976); Boggess v. Hogan, 410 F.Supp. 443 (N.D.Ill.1976); Liebman v. J.W. Petersen Coal & Oil Co., 63 F.R.D. 684 (N.D.Ill.1974).
The Administration Committee's petitions for attorneys' fees incurred in connection with the settlement administration phase of this litigation have been accompanied by contemporaneous time records as well as affidavits listing the hourly rates of the attorneys involved, the time spent and a detailed description of the work. These materials, like all time records filed in connection with attorneys' fees claims in this litigation, were filed under seal for our review.
We carefully reviewed each of the fee petitions when submitted under the standards outlined above and concluded that each petition was properly substantiated as to hours and normal hourly charges and, as adjusted on occasion, was for a reasonable amount in light of the nature and quality of the services rendered, the amounts involved and the benefit conferred on the class.
Nor is there any merit to the contention that the expenses or fees awarded for accounting and analytical services as well as for banking services and investment advice were in any way unreasonable, excessive or duplicative. It was clear to us and to the parties from the beginning that *1112 highly competent technical computer and accounting services would be necessary to achieve a fair distribution of the settlement fund. See Transcript of September 13, 1979 Proceedings. The services that have been provided have been of a high quality and at a reasonable cost. We have previously outlined in detail the extensive services performed by the various professionals who made the administration of the settlement fund and its distribution so successful.
Finally, we reject the suggestion that the Administrative Orders are subject to challenge because they were entered without notice to the plaintiff class. A previously quoted notice advised all class members that deductions would be made from the settlement fund to cover administrative expenses and attorneys' fees. Opportunity was provided, with proper notice, for objection to any aspects or features of the proposed settlement, including the attorneys' fees and expenses associated with the settlement, and the creation of the reserve fund and its use for late claims and administrative expenses. No objections were lodged either to the adequacy of the procedures or the notice or to the withholding of a reserve to cover payment of late claims and reasonable fees and expenses associated with the settlement distribution.
The notice that these movants allege they should have received is not required either by the Due Process Clause of the United States Constitution or by Fed.R.Civ.P. 23. In the exercise of our discretion to devise adequate notice procedures in the conduct of class action litigation, we determined that additional notice to all class attorneys of each of the Administrative Orders approving, after careful review, disbursements from the already agreed to reserve fund, in which neither they nor their clients had any legal or equitable interest, would be both unnecessary and wasteful. See generally Reynolds v. National Football League, supra, 584 F.2d at 282, 285; In re Equity Corp. of America Securities Litigation, supra, 603 F.2d at 1361.
Conclusion
For the reasons stated above, all motions of former class members whose claims have been paid as well as those of defendants requesting distribution of the reserve fund to them are denied. The Folding Carton Administration Committee is ordered to distribute any interest accruing on the excess reserve funds after the date of this opinion to the Antitrust Development and Research Foundation to be established in accordance with this opinion. The Administration Committee which has so ably handled the fee applications, the investment of the settlement fund, the processing of claims and the distribution of the fund, is to retain the principal of the fund for a period of one year, during which time the Committee will take all possible steps to locate former class members who have not previously filed claims and to assist them in filing proper claims against the fund. One year from the date hereof, the Administration Committee shall distribute any remaining reserve funds to the Foundation.
The motion to vacate certain Administrative Orders awarding fees and expenses incurred in connection with the administration of the settlement fund is likewise denied and the subpoenas duces tecum associated with that motion are quashed.
NOTES
[1] Administrative Orders numbered 4, 6, 7, 9, 16, 21, 23, 24, 26, 28, 34-37, 41, 42 and 46, which are dated between November 2, 1979 and August 24, 1982, are now sought to be vacated.
[2] It does not follow, however, that Fed.R.Civ.P. 23 or the Due Process Clause of the Fifth Amendment of the United States Constitution require that notice of these proceedings initiated by a handful of former class members be provided to all former class members, as certain of the movants argue. Federal Rule 23 requires only that notice of dismissal or compromise of class actions, Fed.R.Civ.P. 23(e), be provided.
No one now contends that the 1979 notice of dismissal of these actions was inadequate under Fed.R.Civ.P. 23(e) or the Due Process Clause; it clearly was adequate. See generally Reynolds v. National Football League, 584 F.2d 280, 285 (8th Cir.1978); In re Equity Funding Corp. of America Securities Litigation, 603 F.2d 1353, 1361 (9th Cir.1979). Pursuant to that notice, these actions have been dismissed and all of the claiming class members accepted, without objection, final distribution of their shares of the settlement fund. Since their claims have been dismissed and they have received final distribution in accordance with the terms of the approved settlement, the former class members are not entitled to any further notice in this case. Cf. Chlupsa v. Posvic, 113 F.2d 375 (7th Cir.1940) (no class notice necessary prior to entry of post-judgment order permitting defendant's receiver to compromise indebtedness found by money decree).
In any event, we have no doubt that those several former class members who have already appeared and moved for pro rata distribution to them of the reserve fund represent the interests of any of the class claimants. There is no basis for bringing all possible claimants before the Court when their interests will be adequately represented by the class movants who are identically situated. Cf. Hartford Life Ins. Co. v. IBS, 237 U.S. 662, 672, 35 S.Ct. 692, 695, 59 L.Ed. 1165 (1914) (judgment concerning disposition of a mortuary fund binding on non-parties to suit whose interests were adequately represented).
[3] The claiming former class members suggest that second distributions are commonplace in class action litigation that has resulted in the establishment of a settlement fund. However, the cases relied upon for this proposition, In re Eastern Sugar Antitrust Litigation, MDL 201A (E.D.Pa.); In re Cenco, MDL 291 (N.D.Ill.); In re Equity Funding Corp. of America Securities Litigation, MDL 142 (C.D.Cal.); Mary Green v. Occidental Petroleum Corp., Civ. 71-591 RJK (C.D.Cal.), all involved a prior understanding that subsequent distributions would be made.
In Eastern Sugar, the first distribution notified claimants that they had received 80% of what they were entitled to. In Mary Green, the order authorizing the distribution stated that each claimant would receive 50% of its claim in the first distribution and 50% in the second. In Equity Funding, approximately 20% of the settlement funds were held back during the first distribution for the benefit of so-called "settlement fund B" group claimants. In Cenco, the "second distributions" were distributions of additional settlements received; it was understood that the "first distribution" represented only a partial settlement of the action. No additional settlements were made and no additional funds were received in the instant case after the plan of distribution was approved.
[4] Payments to late claimants were also made without discussion or objection in State of West Virginia v. Chas. Pfizer & Co., 314 F.Supp. 710 (S.D.N.Y.1970), aff'd, 440 F.2d 1079 (2d Cir.), aff'd, 404 U.S. 548, 92 S.Ct. 731, 30 L.Ed.2d 721 (1971).
[5] Less than 3% of the total settlement was allocated to the reserve fund. At the time of the allocation, the suggestion was made, and rejected by us, that fully 10% of the settlement be allocated to reserves.
[6] We do not accept the argument of certain defendants that rejecting the claiming former class members' right to these funds would oblige us to "return" them to the settling defendants rather than distribute them in a fashion that would indirectly benefit the entire plaintiff class as well as the general public.
[7] The originally certified class in this litigation included both direct and indirect folding carton purchasers. The Supreme Court's decision in Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), intervened, prompting decertification of the indirect purchasers. Although the Court in Illinois Brick refused to allow indirect purchasers to sue for antitrust injury allegedly passed on to them, the opinion acknowledged that overcharges are in fact passed ona matter of common knowledge but that the substantial difficulty of calculating and apportioning such losses should preclude indirect purchasers from consuming judicial resources in attempting to demonstrate them. See 431 U.S. at 740-46, 97 S.Ct. at 2071-75.
[8] It follows from our conclusion that the claiming former class plaintiffs have neither a legal nor an equitable claim to the reserve fund that we need not solicit them for their consent, as suggested, to contributing a portion of "their share" of the reserve fund to another purpose. See Petitioners' Response to the Administration Committee's Surreply 2-3.
[9] If all of the non-claiming purchasers of the nearly 25% of total purchases were to file valid claims and receive distributions on the same ratio as the class members whose claims were paid, they would be entitled to over $50,000,000, far in excess of the reserve fund. Moreover, some of the late filing claimants whose claims were allowed were paid at a lower percentage rate than those who filed timely claims. The equitable considerations in a further distribution are obviously complex.
[10] Allocation of the unclaimed residue of a settlement fund to a charitable or pro bono purpose has on previous occasions been made, but neverso far as we are awarewith an opinion. See, e.g., Lindy Bros. Builders v. American Radiator & Standard Sanitary Corp., CA No. 71774 SC (E.D.Pa. Feb. 28, 1978) (approximately $25,000 to two law schools to establish loan funds for needy students at those institutions); State of Illinois v. J.W. Petersen Coal & Oil Co., No. 71 C 2548 (N.D.Ill. March 15, 1976) (distribution of one-half of the unclaimed residue to the Chicago Bar Foundation and one-half to the Chicago Lawyers Committee for Civil Rights).
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398 F.Supp.2d 1197 (2005)
The WYOMING LODGING AND RESTAURANT ASSOCIATION, a Wyoming nonprofit corporation, Plaintiff,
The State of Wyoming, Plaintiff-Intervenor,
v.
UNITED STATES DEPARTMENT OF THE INTERIOR; The National Park Service; Gale Norton, in her official capacity as Secretary of the Department of the Interior; and Fran Mainella, in her official capacity as Director of the National Park Service, Defendants.
No. 04-CV-315-B.
United States District Court, D. Wyoming.
October 14, 2005.
*1198 *1199 *1200 *1201 *1202 Steven F. Freudenthal, Freudenthal, Salzburg, & Bonds, P.C., Monique J. Ojeda, Freudenthal, Salzburg, & Bonds, P.C., Cheyenne, for Plaintiff.
Patrick J. Crank, Attorney General, State of Wyoming, Jay Jerde, Deputy Attorney General, State of Wyoming, Thomas W. Rumpke, Senior Assistant Attorney General, State of Wyoming, Cheyenne, for Plaintiff-Intervenor.
Matthew H. Mead, United States Attorney, Nicholas Vassallo, Assistant United States Attorney, Cheyenne, Lauren Fischer, United States Department of Justice, Environmental and Natural Resources Division, General Litigation Section, Kelly A. Johnson, Acting Assistant Attorney General, Environment and Natural Resources Division, Andrew C. Emrich, Counsel to the Assistant Attorney General, Environment and Natural Resources Division, Washington, D.C., for Defendants.
ORDER
BRIMMER, District Judge.
This matter is before the Court upon Plaintiff's Complaint and Plaintiff-Intervenor's Complaint, both of which challenge decisions of the United States Department of the Interior and the National Park Service. After considering the administrative record, reading the briefs, reviewing the materials on file, having heard oral argument, and being fully advised in the premises, the Court FINDS and ORDERS as follows:
STATEMENT OF PARTIES AND JURISDICTION
Plaintiff Wyoming Lodging & Restaurant Association ("WLRA") is a non-profit corporation organized under Wyoming law. The WLRA is comprised of approximately 400 members, all of whom are involved in the Wyoming lodging and restaurant industry.
Plaintiff-Intervenor State of Wyoming ("Wyoming") intervened in this matter based upon its economic and sovereign interests directly related to recreational snowmobiling in Yellowstone National Park, Grand Teton National Park, and the John D. Rockefeller, Jr., Memorial Parkway.[1]
Defendant United States Department of the Interior is an executive branch agency of the United States of America responsible for managing national parks in the United States, including Yellowstone National Park, Grand Teton National Park, and the John D. Rockefeller, Jr., Memorial Parkway. Defendant National Park Service ("NPS") is a bureau of the United States Department of the Interior. The National Park Service is responsible for promoting and regulating the use of the national parks in the United States. Defendant Gale Norton is sued in her official *1203 capacity as the Secretary of the Department of the Interior. Defendant Fran Mainella is sued in her official capacity as the Director of the National Park Service. All of the Defendants will be collectively referred to as "Federal Defendants" or "Defendants."
Jurisdiction in this Court is proper pursuant to 28 U.S.C. § 1331 (federal question), 28 U.S.C. § 1346(a)(2) (United States as a defendant), and 5 U.S.C. §§ 702-706 (Administrative Procedure Act right of review). Venue is appropriate under 28 U.S.C. § 1391(b) & (e).
BACKGROUND
The case now before the Court is the most recent link in an extended chain of litigation regarding the use of snowmobiles in Yellowstone National Park ("Yellowstone"), Grand Teton National Park ("Grand Teton"), and the John D. Rockefeller, Jr., Memorial Parkway ("Parkway") (collectively referred to as "the Parks"). This complex and convoluted saga of related suits encompasses five cases, two separate courts in two different circuits, and over twenty-five parties.[2]See, e.g., Fund For Animals v. Norton, 352 F.Supp.2d 1 (D.D.C.2005); Int'l Snowmobile Manufacturers Ass'n v. Norton, 340 F.Supp.2d 1249 (D.Wyo.2004); Fund for Animals v. Norton, 323 F.Supp.2d 7 (D.D.C.2004); Int'l Snowmobile Manufacturers Ass'n v. Norton, 304 F.Supp.2d 1278 (D.Wyo.2004); Fund for Animals v. Norton, 294 F.Supp.2d 92 (D.D.C.2003).
The Fund for Animals organization brought the first snowmobile suit against the NPS in 1997.[3] In that case, Fund for Animals challenged the then-existing Yellowstone winter use rules, which allowed snowmobiles into the Parks on an essentially unlimited basis, on the grounds that they violated the National Environmental Policy Act ("NEPA") and the Endangered Species Act ("ESA"). See Int'l Snowmobile Manufacturers Ass'n v. Norton, 340 F.Supp.2d at 1253-54. Ultimately, the Fund for Animals and the NPS reached a settlement in which the NPS agreed to prepare an environmental impact statement ("EIS") that focused on snowmobile use and trail grooming in Yellowstone. Id. at 1254.
Upholding their end of the bargain, the NPS issued a Draft EIS ("1999 DEIS") on winter use in the Parks on September 29, 1999. Id. The 1999 DEIS contained seven alternatives for winter use of the Parks, including several alternatives which would have continued snowmobile use in the Parks so long as the machines met new noise and emission standards. Id. One of these alternatives, Alternative B, was the preferred alternative for the NPS at the time the DEIS was issued.
Over a year later, in October 2000, the NPS published the final EIS ("2000 FEIS") for winter use in Yellowstone. Id. The 2000 FEIS was substantially different from the 1999 DEIS in that the last alternative had been revised and had become the preferred alternative. Id. The revised alternative, identified as Alternative G, allowed snowcoach entry into the Parks but prohibited all snowmobile access. Id. Alternative G was officially adopted by the NPS in a November 22, 2000, Record of *1204 Decision ("2000 ROD"). Id. The 2000 ROD was subsequently implemented by rule ("2001 Snowcoach Rule") on January 18, 2001, the last day of the Clinton Administration. Id. (citing 66 Fed.Reg. 7260, 7268 (January 22, 2001)).
The 2000 FEIS, 2000 ROD, and the 2001 Snowcoach Rule prompted several parties, including the International Snowmobile Manufacturers Association ("ISMA"), to bring suit against the NPS in this Court.[4]Id. Like ISMA and the other plaintiffs, the State of Wyoming was unhappy with the 2000 FEIS, 2000 ROD, and the 2001 Snowcoach Rule and, consequently, intervened in the suit shortly after its inception. Id. Several other groups intervened as Defendants in the suit. Id.
In June of 2001, the parties reached a settlement agreement which required the NPS to complete a supplemental EIS ("SEIS"), taking into account new snowmobile technology not included in the 2000 FEIS. Id. As part of the settlement, the parties requested this Court to stay all litigation until the SEIS was completed. Id. The stay was granted on July 2, 2001. Id. at 1254-55.
Approximately a year and half later, the NPS finished the SEIS ("2003 SEIS") and made it available to the public on February 24, 2003. See 68 Fed.Reg. 8618 (February 24, 2003). The 2003 SEIS identified Alternative 4 as the preferred alternative. Under this alternative, 950 snowmobiles would be allowed into Yellowstone per day. However, the majority of snowmobiles entering the park would be required to meet best available technology ("BAT") standards and would have to be accompanied by a guide. Alternative 4 was formally adopted by the NPS in a March 25, 2003, Record of Decision ("2003 ROD"). Id. at 1255; A.R. 92624-73. NPS published the final rule on December 11, 2003 ("2003 Rule"). See 68 Fed.Reg. 69,268 (December 11, 2003).
However, before the NPS had issued the final rule, several parties, including the Fund for Animals, challenged the 2003 SEIS and the 2003 ROD in the United States District Court for the District of Columbia ("D.C.Court").[5] The plaintiffs, although they were without question aware of this Court already having jurisdiction of this issue but obviously hoped for a District of Columbia judge of environmental disposition to give them a decision of their persuasion, alleged that "snowmobiling and trail grooming cause air and noise pollution, threaten wildlife and endangered species, and create health threats to visitors and park employees." Fund for Animals, 294 F.Supp.2d at 97. Thus, given these alleged adverse effects, the plaintiffs argued that "NPS's decision to allow the continuation of these winter activities belie[d] the evidence collected during the rule-making process" and thus violated the Administrative Procedure Act ("APA"). Id. The D.C. Court agreed, and on December 16, 2003, only 5 days after the issuance of the 2003 Rule, found that the 2003 SEIS and the 2003 ROD were inadequate. Id. at 115. As a result, the D.C. Court vacated the 2003 SEIS, the 2003 ROD, and the 2003 Rule. Id. The D.C. Court also ordered the NPS to reinstate the 2001 Snowcoach Rule until directed to do otherwise by the court. Id.
Once the D.C. Court reinstated the 2001 Snowcoach Rule, the plaintiffs in the case then pending before this Court moved to lift the stay then imposed. Int'l Snowmobile Manufacturers Ass'n, 340 F.Supp.2d at 1256. The Court lifted the stay on *1205 December 31, 2003. Id. After the stay was lifted, the Plaintiffs moved the Court for an order preventing implementation of the 2001 Snowcoach Rule.
On February 10, 2004, this Court granted the plaintiff's motion and issued a Temporary Restraining Order prohibiting the NPS from implementing the 2001 Snowcoach Rule.[6]Int'l Snowmobile Manufacturers Ass'n, 304 F.Supp.2d at 1293-94. The Court further directed the NPS to "promulgate temporary rules for this 2004 snowmobile season that will be fair and equitable to snowmobile owners and users, to the business community, and to the environmental interests...." Id. at 1294.
In an effort to comply with the Court's February 10, 2004, order, the NPS issued emergency rules, called Compendium Amendments, to govern snowmobile use in the Parks. A.R. 106205-106214. Under the Compendium Amendments, 920 snowmobiles would be allowed to enter the Parks each day for the rest of the 2004 winter season. Id. Of the allotted 920 entries, 780 could visit Yellowstone per day. A.R. 106213.
The NPS also moved the D.C. Court to amend its judgment entered on December 16, 2003. According to that order, the NPS was required to implement the 2001 Snowcoach Rule. Fund for Animals, 294 F.Supp.2d at 115. Obviously, the NPS was stuck between the proverbial rock and a hard place the D.C. Court had ordered the NPS to implement the 2001 Snowcoach Rule and this Court had ordered the converse. Seeing that a comity problem had arisen, the D.C. Court granted the relief requested and relieved the NPS from enforcing the 2001 Snowcoach Rule. Fund for Animals, 323 F.Supp.2d at 10-11. The D.C. Court did, however, direct the NPS to develop a new rule for the 2004-2005 season. Id. at 11.
On October 14, 2004, this Court vacated the 2000 FEIS, the 2000 ROD, and the 2001 Snowcoach Rule. Int'l Snowmobile Manufacturers Ass'n v. Norton, 340 F.Supp.2d at 1266. In reaching such decision, the Court found that:
[T]he NPS was clearly arbitrary and capricious in its actions leading up to FEIS, 2000 ROD and 2001 Snowcoach Rule. The NPS and/or the Clinton administration higher-ups had made a predetermined political decision, did not seriously consider public comments and performed mere pro forma compliance with NEPA. During this entire time the NPS ignored the purposes and procedures of NEPA and the APA in order to get this legislation approved before the end of the Clinton Administration.
Id. at 1265.
In response to the various aforementioned court orders, the NPS began the process of promulgating new temporary winter use rules for the Parks. These temporary rules were intended to be implemented by the start of the 2004-2005 season and were to remain in effect until the NPS could establish permanent rules which addressed the concerns of this Court and the D.C. Court. A.R. 96958.
As part of this process, the Federal Defendants began to prepare an environmental assessment ("2004 EA"). The 2004 EA, which was first released for public comment on August 20, 2004, contained *1206 five alternative actions. The proposed alternatives ranged in variety from prohibiting snowmobile entries into the Parks to permitting 1140 snowmobile entries per day. A.R. 95926-39. However, the alternatives allowing snowmobile entries (Alternatives 2-5) were all similar in that each alternative was based on daily snowmobile entry limits and required the snowmobiles to meet the BAT requirements. A.R. 95919, 95922.
Under Alternative 1, only snowcoaches would be allowed to enter the Parks; snowmobiles would be prohibited. A.R. 95926, 95940. This alternative was nearly identical to the 2001 Snowcoach Rule enjoined, and later vacated by this Court, in 2004. See Int'l Snowmobile Manufacturers Ass'n v. Norton, 340 F.Supp.2d at 1266; Int'l Snowmobile Manufacturers Ass'n, 304 F.Supp.2d at 1293-94; A.R. 95926.
Alternative 2 provided that 368 snowmobiles could enter the Parks each day. A.R. 95927. Of those, 318 were allotted for Yellowstone. Id. All snowmobiles entering Yellowstone would have to be accompanied by a commercial guide and would have to travel in groups of eleven (11) snowmobiles or less. A.R. 95927-28.
Alternative 3 permitted 540 snowmobiles to enter Yellowstone and 75 snowmobiles to enter Grand Teton and the Parkway. A.R. 95930. During the 2004-2005 season, all snowmobiles entering Yellowstone would have to be guided. A.R. 95931. However, starting in the 2005-2006 season, 95 of the snowmobiles entering Yellowstone each day could enter without a guide. Id.
Alternative 4, the preferred alternative, provided that 720 snowmobiles could enter into Yellowstone daily and a combined 140 snowmobiles could enter into Grand Teton and the Parkway daily. A.R. 95933. All snowmobiles entering Yellowstone would have to be accompanied by a commercial guide. A.R. 95933. Additionally, like with Alternative 2, all snowmobiles entering Yellowstone would be limited to groups of eleven (11) or less. A.R. 95934.
Alternative 5 allowed 950 snowmobiles to enter Yellowstone and 190 snowmobiles to enter Grand Teton and the Parkway. A.R. 95936. During the 2004-2005 winter season, twenty percent (20%) of the snowmobiles entering Yellowstone each day could be unguided. Id. The remaining entries would have to enter with a guide. Id. During the ensuing seasons, eighty percent (80%) of the Yellowstone entries would be required to acquire a commercial guide while the other twenty percent (20%) could enter with a non-commercial guide. Id. The specifics of Alternative 5 were nearly identical to the 2003 Rule vacated by the D.C. Court on December 16, 2003. See Fund for Animals, 294 F.Supp.2d at 115 (vacating 2003 Rule); 68 Fed.Reg. 69,268 (December 11, 2003); A.R. 95936.
On September 7, 2004, the Federal Defendants published a proposed temporary rule, in connection with the 2004 EA, which was intended to govern winter use in the National Parks for the 2004-2005 winter season, the 2005-2006 winter season, and, if necessary, the 2006-2007 winter season. A.R. 97340. The proposed rule adopted Alternative 4 from the 2004 EA as the basis for the temporary regulation. A.R. 97342. The NPS received comments on this proposed regulation until October 7, 2004. A.R. 97340.
On November 4, 2004, the Federal Defendants issued a Finding of No Significant Impact ("2004 FONSI") in connection with the 2004 EA. The 2004 FONSI adopted Alternative 4 from the 2004 EA with slight modifications. Six days later, on November 10, 2004, Federal Defendants *1207 published the final temporary rule ("2004 Temporary Rule"), which took effect on December 10, 2004. See 69 Fed.Reg. 65,348 (November 10, 2004). The 2004 Temporary Rule formally implemented Alternative 4 as the governing winter use regulation for the Parks.
As one might expect, the issuance of the 2004 EA, the 2004 FONSI, and the 2004 Temporary Rule sparked more litigation in this ongoing saga. On November 4, 2004, the same day the NPS published the 2004 FONSI, the Fund For Animals brought suit in the D.C. Court challenging the 2004 EA and the 2004 FONSI.[7] On November 10, 2004, WLRA filed the instant suit in this Court challenging the validity of the 2004 EA, the 2004 FONSI, and the 2004 Temporary Rule.
In response to the dual actions pending before this Court and the D.C. Court, the Federal Defendants filed a motion with the D.C. Court to transfer the Fund for Animals case to the District of Wyoming. On November 23, 2004, the Federal Defendants filed an alternative motion requesting that this Court transfer the case at bar to the D.C. Court should the D.C. Court refuse to transfer the Fund for Animals case to the District of Wyoming. The November 23, 2004, motion also moved the Court to consolidate the two cases should the D.C. Court grant the motion to transfer. On January 5, 2005, the D.C. Court denied the Federal Defendants' motion. See Fund for Animals, 352 F.Supp.2d at 2 (order denying Federal Defendant's motion to transfer). Thereafter, on January 20, 2005, this Court, believing that this District is the proper forum for the snowmobile litigation, denied the Federal Defendant's alternative motion to transfer this case to the D.C. Court.[8] Consequently, the case at bar proceeded to a hearing on the merits.
STANDARD OF REVIEW
Judicial review of an agency's final action is governed by the Administrative Procedure Act ("APA"). See 5 U.S.C. §§ 701 to 706; Lujan v. Nat'l Wildlife Federation, 497 U.S. 871, 882, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990); Fuel Safe Washington v. F.E.R.C., 389 F.3d 1313, 1322-23 (10th Cir.2004). This standard applies not only to claims asserting a violation of the APA, but also to those asserting NEPA violations. See Fuel Safe Washington, 389 F.3d at 1322-23. Under the APA, a federal court may set aside agency action if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A). An agency decision is arbitrary or capricious if: (1) the agency entirely failed to consider an important aspect of the issue; (2) the agency offered an explanation for its decision that was counter to the evidence before it; (3) the agency relied on factors that Congress did not intend for it to consider; or (4) the agency's decision is so implausible that it could not be ascribed to the product of agency expertise. Colo. Envtl. Coalition v. Dombeck, 185 F.3d 1162, 1167 (10th Cir.1999).
In applying this deferential standard of review, a federal court is required to review the whole administrative record, or those parts of the record cited by the *1208 parties. Utahns for Better Transp. v. U.S. Dep't of Transp., 305 F.3d 1152, 1164 (10th Cir.2002). The court reviews the administrative record to ensure the agency's decision was based on consideration of the relevant factors and was not the result of a clear error in judgment. Colo, Envtl. Coalition, 185 F.3d at 1167. In so reviewing, the court cannot substitute its judgment for that of the agency. Utahns for Better Transp., 305 F.3d at 1164.
The essential function of judicial review under the APA is for the federal court to determine whether the agency: (1) acted within its scope of authority; (2) complied with prescribed procedures; and (3) acted in accordance with law (i.e., did not act arbitrarily or capriciously). Olenhouse, 42 F.3d at 1574. As part of this review, a court must also ensure that the agency action is supported by substantial evidence in the record. Id. In the end, administrative decisions may only be set aside for substantial procedural or substantive reasons. Utahns for Better Transp., 305 F.3d at 1164. However, courts and agencies alike should be mindful that an "agency's rulemaking power is not the power to make law, it is only the power to adopt regulations to carry into effect the will of Congress as expressed by the statute." Sundance Assocs. v. Reno, 139 F.3d 804, 808 (10th Cir.1998) (internal quotations and citations omitted).
DISCUSSION
Plaintiff and Plaintiff-Intervenor claim that the 2004 EA, 2004 FONSI, and the 2004 Temporary Rule were issued in violation of NEPA and the APA. Specifically, Plaintiff and Plaintiff-Intervenor contend that the NPS violated NEPA because: (1) the NPS did not comply with NEPA in evaluating the commercial guide requirement; (2) the NPS failed to consider a reasonable range of alternatives; (3) the NPS failed to analyze a "no action" alternative. In regards to the APA claim, Plaintiff and Plaintiff-Intervenor argue that (1) the NPS's conclusion that all snowmobiles must be accompanied by commercial guides is not supported by substantial evidence; (2) the NPS's conclusion that commercial guides lead to responsible wildlife viewing and a lessening of impacts to the natural soundscapes is not supported by a reasoned analysis; (3) the NPS's decision that more than 720 snowmobiles would cause significant adverse effects on the environment is not supported by substantial evidence; and (4) the NPS's decision that more than 720 snowmobiles would cause significant adverse effects on the environment is not supported by a reasoned analysis.
In response, the Federal Defendants argue that Plaintiff and Plaintiff-Intervenor have waived any challenges they may have to the ultimate agency decision regarding the Parks as they allegedly failed to submit comments during the administrative decision-making process. In the alternative, the Federal Defendants aver that the NPS should be afforded great discretion in promulgating rules and that the NPS did not exceed such discretion in issuing the 2004 EA, 2004 FONSI, and the 2004 Temporary Rule.
I. Waiver Defense
As just stated, the Federal Defendants argue that Plaintiff and Plaintiff Intervenor should not be able to challenge the 2004 EA because neither party provided meaningful participation in the public processes by which such regulation was promulgated. According to Defendants, a party challenging federal agency action must participate in the notice and comment process before it may proceed in federal court to challenge such action. The Court, however, while agreeing with *1209 the Defendants to some extent, disagrees with the Defendants' proposed bright-line rule for the following reasons.
In Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978), the Supreme Court determined that a party wishing to challenge agency action must participate in the public process so that it alerts the agency of the party's positions and contentions and, therefore, allows "the agency to give the issue meaningful consideration." Department of Transp. v. Public Citizen; 541 U.S. 752, 764, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004); Vermont Yankee, 435 U.S. at 553-54, 98 S.Ct. 1197. See also Wilson v. Hodel, 758 F.2d 1369, 1373 (10th Cir.1985) ("[A] reviewing court will not consider contentions which were not pressed upon the administrative agency."). But see City of Seabrook, Tex. v. United States Environmental Protection Agency, 659 F.2d 1349, 1360-61 (5th Cir.1981) (holding that plaintiffs are not required to participate in the public process before challenging agency action).[9] The purpose of this rule is to ensure that reviewing courts do not substitute their "judgment for that of the agency on matters where the agency has not had an opportunity to make a factual record or apply its expertise." New Mexico Environmental Imp. Div. v. Thomas, 789 F.2d 825, 835 (10th Cir.1986). Agency action should be "reviewed on the basis articulated by the agency, and on the evidence and proceedings before the agency at the time it acted." Lewis v. Lujan, 826 F.Supp. 1302, 1306 (D.Wyo.1992) (Johnson, J.) (citing American Min. Congress v. Thomas, 772 F.2d 617, 626 (10th Cir.1985)). "Simple fairness to those who are engaged in the tasks of administration, and to litigants, requires as a general rule that courts should not topple over administrative decisions unless the administrative body not only has erred but erred against objection made at the time appropriate under its practice." Wilson, 758 F.2d at 1372-73 (quoting United States v. L.A. Tucker Truck Lines, 344 U.S. 33, 37, 73 S.Ct. 67, 97 L.Ed. 54 (1952)). "A reviewing court usurps the agency's function when it sets aside the administrative determination on a ground not theretofore presented...." Unemployment Compensation Commission of Territory of Alaska v. Aragon, 329 U.S. 143, 155, 67 S.Ct. 245, 91 L.Ed. 136 (1946).
The rule is not, however, meant to preclude any particular party from bringing a suit to challenge agency action. It is not a strictly-construed jurisdictional prerequisite. A party is not always required to submit comments in order to challenge agency action. For example, the Supreme Court stated:
*1210 Admittedly, the agency bears the primary responsibility to ensure that it complies with NEPA ... and an EA's or an EIS' flaws might be so obvious that there is no need for a commentator to point them out specifically in order to preserve its ability to challenge a proposed action.
Department of Transp., 541 U.S. at 765, 124 S.Ct. 2204. See also Holy Cross Wilderness Fund, 960 F.2d at 1528 n. 18 (noting that regardless of public comment an agency always has the duty to consider all reasonable and practicable alternatives).
As stated above, the rule is intended to give the agency a chance to review the information submitted during the public process and make a decision based upon that information. The purpose of the rule is not to create a jurisdictional requirement for suits challenging agency action. Thus, so long as the agency is informed of a particular position and has a chance to address that particular position, any party may challenge the action based upon such position whether or not they actually submitted a comment asserting that position. See Benton County v. United States Dept. of Energy, 256 F.Supp.2d 1195, 1198-99 (E.D.Wash.2003)("Under the rule established in Vermont Yankee, a plaintiff, or another, must bring sufficient attention to an issue to stimulate the agency's attention and consideration of the issue during the environmental analysis comment process." (emphasis added)). See also New Mexico Environmental Imp. Div., 789 F.2d at 835 (noting that because neither plaintiff "nor anyone else advanced any dissatisfaction" to the agency action, plaintiff could not later challenge the action before the courts.)
In this case, Defendants contend that Plaintiff and Plaintiff-Intervenor did not alert the NPS of their positions, during the administrative process, in regards to their contentions that: (1) the NPS failed to take a hard look at the commercial guiding requirement, (2) the NPS failed to consider an alternative that includes seasonal as opposed to daily entry limits, and (3) the NPS failed to include a "no action" alternative. However, after reviewing the administrative record, it is clear that the NPS was alerted to the positions now asserted by Plaintiff and Plaintiff-Intervenor, regardless of which commentor actually notified Defendants of such positions.[10]
For example, Wyoming specifically commented on the guiding requirement by noting that it supported a twenty percent (20%) non-commercial guiding requirement. A.R. 104934. The States of Idaho and Montana also suggested that a large amount of the entries into Yellowstone should be unguided. A.R. 104874, 104656. In fact, a total of 1173 comments were received regarding the guiding requirement contained in the 2004 Temporary Rule. A.R. XXXXXX-XX.
Wyoming also submitted comments regarding the daily entry limits. See Plaintiff-Intervenor's Motion to Supplement the Administrative Record at Exhibit A. Specifically, Wyoming stated as follows:
*1211 Please consider regulating outfitter snowmobile entries to the Parks and Parkway based upon a total number of entries per operator per season basis. When entry permits are allocated on a per day basis, operators do not have enough permits to satisfy demand on some days, and have permits that go unused on some days. By allocating entry permits on a per season basis, the operator would have the discretion to determine when the permits will be used, thereby resulting in a more efficient use of entry permits.
Id. The State of Montana also made comments regarding the problems caused by daily limits when it noted that "peak days" are eliminated under the preferred alternative. A.R. 104885; see also A.R. 104658.
The record also contains comments on the "no action" alternative. For example, the International Snowmobile Manufacturers Association commented that the "no action" alternative should be park management under the 1983 regulations, not a snowmobile ban in the Parks. A.R. 104896. Another commentor stated that the scoping document did not identify a "no action" alternative, which is similar to the assertion made by Plaintiff and Plaintiff-Intervenor in this case. See A.R. 104649.
As Defendants correctly point out, there are many cases where the courts have held that a plaintiff could not challenge an agency action because he or she did not participate in the public rule making processes. See, e.g., Department of Transp., 541 U.S. at 764-65, 124 S.Ct. 2204; Vermont Yankee, 435 U.S. at 553-54, 98 S.Ct. 1197; New Mexico Environmental Improvement Division, 789 F.2d at 835; Wilson, 758 F.2d at 1373. However, these cases can be distinguished from this case in that neither the plaintiff nor any other party in the cited cases submitted comments to the agency in opposition to the proposed action. Thus, the agency was not given a fair opportunity to address the concerns of the plaintiff. See Wilson, 758 F.2d at 1372-73. In this case, however, thousands of comments were filed and many of the comments addressed the issues raised by Plaintiff and Plaintiff-Intervenor in their complaints. Thus, the purpose of the rule fairness to the agency has been fulfilled and the claims of Plaintiff and Plaintiff-Intervenor are properly before this Court. See id.
II. NEPA Claims
As previously noted, Plaintiff and Plaintiff Intervenor contend that the NPS did not fulfill the requirements of NEPA when it promulgated the 2004 EA, 2004 FONSI, and 2004 Temporary Rule. Specifically, Plaintiff and Plaintiff Intervenor allege that: (1) the NPS did not comply with NEPA in evaluating the commercial guide requirement; (2) the NPS failed to consider a reasonable range of alternatives; and (3) the NPS failed to analyze a "no action" alternative. The Court will analyze these claims in turn below.
A. NEPA Overview
NEPA requires federal agencies to consider the environmental impacts of their actions, disclose those impacts to the public, and then explain how their actions will address those impacts. Baltimore Gas & Elec. Co. v. Natural Res. Defense Council, 462 U.S. 87, 97, 103 S.Ct. 2246, 76 L.Ed.2d 437 (1983). NEPA prescribes the process, not the end result, of agency action. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989); Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 371, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989). In this regard, the Tenth Circuit has repeatedly emphasized that *1212 NEPA only requires an agency to take a "hard look" at environmental consequences before taking a major federal action that significantly affects the quality of the human environment. Citizens' Comm. to Save Our Canyons v. United States Forest Service, 297 F.3d 1012, 1022 (10th Cir.2002). "[O]nce environmental concerns are adequately identified and evaluated by the agency, NEPA places no further constraint on agency actions." Friends of the Bow v. Thompson, 124 F.3d 1210, 1213 (10th Cir.1997) (internal quotations and citation omitted). A court may not find agency action lacking simply because it would have reached a different decision. Strycker's Bay Neighborhood Council, Inc. v. Karlen, 444 U.S. 223, 227, 100 S.Ct. 497, 62 L.Ed.2d 433 (1980) (quoting Vermont Yankee, 435 U.S. at 558, 98 S.Ct. 1197). To put it quite simply, "NEPA merely prohibits uninformed rather than unwise agency action." Robertson, 490 U.S. at 351, 109 S.Ct. 1835.
Thus, based upon the foregoing, the role of the judiciary in the NEPA process is twofold. First, the court must ensure that the agency has taken a hard look at the environmental consequences of its actions and has adequately disclosed those impacts to the public. Baltimore Gas & Elec. Co., 462 U.S. at 97-98, 103 S.Ct. 2246; Utahns for Better Transp., 305 F.3d at 1163. Second, the court must ensure that the agency's decisions were not arbitrary or capricious. Baltimore Gas & Elec. Co., 462 U.S. at 97-98, 103 S.Ct. 2246; Utahns for Better Transp., 305 F.3d at 1163. While a federal agency is entitled to a presumption of regularity in arriving at its decision, the court is not simply a "rubber stamp" for agency action and will set aside agency action if it is in contravention of the agency's own rules or congressional mandate. See Glisson v. United States Forest Service, 876 F.Supp. 1016, 1023-24 (S.D.Ill.1993). In other words, the court will not accept pro forma compliance with NEPA procedures, nor post hoc rationalizations as to why and how the agency complied with NEPA. See Utahns for Better Transp., 305 F.3d at 1165; Davis v. Mineta, 302 F.3d 1104, 1112-13 (10th Cir.2002).
Under NEPA, any agency proposing "major Federal action[] significantly affecting the quality of the human environment" must prepare an environmental impact statement ("EIS"). 42 U.S.C. § 4332. "When it is unclear whether a proposed action requires an EIS, the agency may first prepare a less detailed environmental assessment ("EA")." Greater Yellowstone Coalition v. Flowers, 359 F.3d 1257, 1274 (10th Cir.2004) (citing 40 C.F.R. § 1501.4(b)). The EA is, essentially, a less detailed version of an EIS intended to "briefly provide sufficient evidence and analysis for determining whether to prepare an EIS ...." Utah Shared Access Alliance v. United States Forest Service, 288 F.3d 1205, 1213 (10th Cir.2002). "If the EA leads the agency to conclude that the proposed action will not significantly affect the environment, the agency may issue a finding of no significant impact ("FONSI") and forego the further step of preparing an EIS." Greater Yellowstone Coalition, 359 F.3d at 1274 (citing 40 C.F.R. § 1501.4(e); Lee v. United States Air Force, 354 F.3d 1229, 1237 (10th Cir.2004)).
B. Did the NPS Fail to Comply with NEPA in Evaluating the Commercial Guide Requirement?
According to NEPA, "an agency takes a sufficient `hard look' when it obtains opinions from its own experts, obtains opinions from experts outside the agency, gives careful scientific scrutiny and responds to all legitimate concerns *1213 that are raised." Hughes River Watershed Conservancy v. Johnson, 165 F.3d 283, 288 (4th Cir.1999) (citing Marsh, 490 U.S. at 378-85, 109 S.Ct. 1851). In this case, Plaintiff and Plaintiff-Intervenor allege that the NPS failed to meet this standard in evaluating the commercial guiding requirement. Plaintiffs contend that the NPS prejudged the guiding requirement and did not support its conclusions with any meaningful analysis. Specifically, Plaintiffs contend that the research leading to the conclusion that commercial guiding ensures responsible wildlife viewing and ameliorates impacts to natural soundscapes was inadequate.
1. Responsible Wildlife Viewing
Plaintiffs allege that the NPS only relied upon law enforcement statistics in reaching the conclusion that commercial guiding ensures responsible wildlife viewing. Essentially, Plaintiffs claim that such statistics are irrelevant to environmental review and cannot constitute meaningful review. The Court, however, disagrees for three reasons.
First, the law enforcement statistics are full of facts which tend to support the NPS's conclusion. For example, the law enforcement statistics demonstrate that under the commercial guiding program, the number of law enforcement cases fell from 383 to 172, arrests declined from twenty-one (21) to two (2), and moving violations were reduced from 238 to forty-four (44). A.R. 95959. Surely, no one can argue that a decrease in irresponsible drivers does not reduce the impact on wildlife in the Parks. It seems that irresponsible drivers would not only have tendency to disobey the law, but also to harass and endanger the animals within the Parks. Thus, the Court cannot say that these statistics are irrelevant.
Second, an agency is entitled to deference in determining which methodologies to use in making decisions. See Citizens' Committee to Save Our Canyons, 297 F.3d at 1027 ("[C]ourts defer to the expertise and discretion of the agency to determine proper testing methods." (internal quotations and citation omitted)); Friends of Boundary Waters Wilderness v. Dombeck, 164 F.3d 1115, 1130 (8th Cir.1999); C.A.R.E. Now, Inc. v. F.A.A., 844 F.2d 1569, 1573 (11th Cir.1988). This is especially true "with respect to questions involving engineering and scientific matters." United States v. Alpine Land and Reservoir Co., 887 F.2d 207, 213 (9th Cir.1989). Thus, so long as the chosen method has a rational basis and examines the relevant factors, it is not within the Court's province to determine that the methodology used is improper. Committee to Preserve Boomer Lake Park v. Department of Transp., 4 F.3d 1543, 1553 (10th Cir.1993). In this case, the Court cannot say that reliance upon law enforcement statistics was irrational.
Third, the Court is confident that the aforementioned law enforcement statistics were not the only basis for the agency's decision. The record contains many other facts which support the conclusion that guides reduce the impacts on animals. In one expert report, the authors note that animal fatalities caused by snowmobiles were reduced from seven (7) in 2003, when guides were not required for all visitors, to zero (0) in 2004, when guides were required for all visitors. A.R. 105881. The same report also shows that the percentage of visitors that dismounted their snowmobile and approached park animals declined under the commercial guiding program. A.R. 105878. This data only serves to bolster the NPS's decision.
2. Natural Soundscapes
Plaintiffs take issue with the NPS's analysis regarding the impact of *1214 commercial guides on the natural soundscapes. Plaintiffs allege that the NPS made faulty assumptions, utilized an improper method of analysis, and failed to consider evidence contradictory to the final conclusion. All of these contentions lack merit.
In regards to the assumptions made by the NPS, it is not the function of this Court "to decide what assumptions ... we would make were we in the Secretary's position, but rather to scrutinize the record to ensure that the Secretary has... provided a reasoned explanation for his policy assumptions...." American Iron & Steel Institute v. Occupational Safety and Health Admin., 939 F.2d 975, 982 (D.C.Cir.1991). In this case, the NPS has clearly provided a reasonable explanation for the assumptions used in formulating the 2004 Temporary Rule. For instance, Plaintiffs contend that the assumption that guided groups usually contain eight (8) snowmobiles and unguided groups contain five (5) is irrational and unfounded. NPS, however, states that these assumptions are based upon entry data collected at the Park. See A.R. 103968-104018. Assumptions based on entry data undoubtedly satisfy the reasoned explanation test outlined above.
Plaintiffs also challenge the assumption that commercial guiding reduces the amount of time that snowmobiles are audible in the Park. However, the NPS also provided a reasonable basis for this assumption:
Obviously, more vehicles are audible for a greater percentage of time and are louder than fewer vehicles. Snowmobiles that remain grouped together rather than individually spread out reduces the percent time audible at any one point along a travel route and increases the time when only natural sounds are audible. As group size increases, the overall sound level increases, but this increase is offset by the reduction in audibility between the presence of groups.
A.R. 96007. See also A.R. 96964, 99711.
Plaintiffs next argue that the method used by NPS to measure the effects of snowmobiles on the natural soundscapes was flawed. More specifically, Plaintiffs contend that the NPS wrongly compared the 2003 SEIS and the 2004 EA to reach its conclusion. However, as with the assumptions made by NPS, it is not the Court's duty to second guess the testing methods used by the NPS so long as they are "not arbitrary or without foundation." Friends of Boundary Waters Wilderness, 164 F.3d at 1130. As noted by the Eighth Circuit:
We may not second-guess the values assigned to the environmental impacts considered in an agency study; and NEPA does not anticipate that courts will determine the merits of conflicting views between two or more schools of scientific thought. It is not the role of this court to choose between differing studies or differing expert views. We defer to the agency's reasoned explanation.
Id. (internal citations omitted).
In this case, the Court finds that the methods used by NPS are not arbitrary and are not without foundation. As explained by NPS, and contrary to Plaintiffs' contentions, the 2004 EA does not base its audibility study on the 2003 SEIS. Rather, the conclusion reached in the 2004 EA was based upon new studies completed during the 2002-2003 and 2003-2004 seasons. See A.R. 96002-96017; see also XXXXXX-XX. The 2004 EA also contains an adequate explanation regarding the basis for the analysis. See A.R. 96006-96007. However, even if the NPS had compared the 2003 *1215 SEIS and the 2004 EA to reach a conclusion regarding the audibility analysis, the Court cannot say that such methodology would be irrational or without foundation.
In their final argument regarding the effects of commercial guiding on the soundscapes, Plaintiffs aver that the NPS failed to consider evidence which contradicts the NPS's final conclusion. Specifically, Plaintiffs contend that the NPS did not analyze the impact of group size when making its predictions concerning audibility in the 2004 EA. The 2004 EA, however, does address this precise issue. For example, on pages 104 and 105, the 2004 EA contains analytical tables describing the effect of group size on decibel levels and the distance to limit of audibility. A.R. 96004-05. There is also other evidence in the record regarding the impact of group size on audibility. This evidence is set forth in the report entitled Natural Soundscape Monitoring in Yellowstone National Park December 2003 March 2004. See A.R. 105493, 105544. In the report, the author stated, "Up to a certain level, the greater the number of snowmobiles and snowcoaches using the park the greater the time they are audible. Grouping snowmobiles and requiring best available technology for sound emission reduces the direct relationship between vehicle numbers and audibility." A.R. 105544.
Based upon the evidence in the record, and contrary to Plaintiffs' contentions, it is clear that the NPS took a "hard look" at the effect of group size on audibility. Therefore, the Court finds that Plaintiffs' argument on this issue must fail as well.
3. Conclusion
For the reasons just stated, the Court finds that the NPS took a hard look at all aspects of the guiding requirement. However, in saying that, the Court must state that this conclusion is not the one that it would prefer. The Court can think of at least half a dozen responsible Wyoming natives with snowmobiles who observe the rules and are concerned about the wildlife and therefore need no guides and would regard the guiding fee as an excessive tax or surcharge. But, the Court's duty is to comply with the decided cases and not invent its own findings on the guide issue. The Plaintiffs' argument must fail for the reasons aforesaid.
C. Did the NPS Fail to Consider a Reasonable Range of Alternatives?
Plaintiffs contend that the NPS failed to consider a reasonable range of alternatives in the 2004 EA. More particularly, Wyoming and the WLRA argue that the NPS should have considered an alternative based upon seasonal entry limits rather than daily entry limits.
Under NEPA and its corresponding regulations, "government agencies must `include in every recommendation or report on proposals' detailed statements analyzing `alternatives to the proposed action.'" Citizens' Committee to Save Our Canyons, 297 F.3d at 1030 (quoting 42 U.S.C. § 4332(C)(iii)). However, "[d]etermining the alternatives to be studied is a matter left to the agency's discretion." Jackson Hole Conservation Alliance v. Babbitt, 96 F.Supp.2d 1288, 1298 (D.Wyo.2000) (Brimmer, J.); see also City of Aurora v. Hunt, 749 F.2d 1457, 1467 (10th Cir.1984), overruled on other grounds, Village of Los Ranchos De Albuquerque v. Marsh, 956 F.2d 970, 973 (10th Cir.1992). An agency only needs to review reasonable alternatives. 40 C.F.R. § 1502.14; Citizens' Committee to Save Our Canyons, 297 F.3d at 1030. "An agency need not analyze the environmental consequences of alternatives it has in good faith rejected as too remote, speculative, or ... impractical or ineffective." *1216 City of Aurora, 749 F.2d at 1467. Furthermore, an agency need not "include every possible alternative." Lidstone v. Block, 773 F.2d 1135, 1137 (10th Cir.1985). The agency need only set forth alternatives sufficient to permit a reasoned choice. See Custer County Action Ass'n v. Garvey, 256 F.3d 1024, 1039-40 (10th Cir.2001); Associations Working for Aurora's Residential Environment v. Colorado Dept. of Transp., 153 F.3d 1122, 1130 (10th Cir.1998).
"It must also be noted that the agency's duty to consider alternatives in preparing an EA is a lower duty than the duty to consider alternatives in preparing an EIS." Jackson Hole Conservation Alliance, 96 F.Supp.2d at 1298; see also Mt. Lookout-Mt. Nebo Property Protection Ass'n v. F.E.R.C., 143 F.3d 165, 172 (4th Cir.1998). An EA only requires brief discussions of the alternatives. 40 C.F.R. § 1508.9(b). Conversely, an agency preparing an EIS must "[r]igorously explore and objectively evaluate all reasonable alternatives." 40 C.F.R. § 1502.14.
In the case sub judice, there can be no question that the NPS met the requirements of NEPA in regards to evaluating the alternatives to the proposed action. The EA contains and discusses five alternatives that range from prohibiting snowmobiles in Yellowstone to allowing 950 snowmobiles into the Park each day. As noted by Defendants, the EA contains over eighty pages analyzing the environmental consequences of each alternative. See A.R. 95987-96068. The information contained within these pages provided the NPS with a plethora of information regarding the environmental impacts of each alternative. For instance, the EA includes a detailed discussion regarding how each alternative would affect air quality, animals in the Parks, natural soundscapes, and human health and safety.
Therefore, based upon the foregoing, the Court finds that the NPS considered a reasonable range of alternatives. The five alternatives discussed by the NPS undoubtedly allowed the agency to make a "reasoned decision." The fact that Plaintiffs can conceive another alternative does not make the range of alternatives unreasonable or insufficient. See Lidstone, 773 F.2d at 1137; Custer County Action Ass'n, 256 F.3d at 1039-40; Associations Working for Aurora's Residential Environment, 153 F.3d at 1130.
D. Did the NPS Fail to Analyze a "No Action" Alternative?
In their final NEPA argument, Plaintiffs contend that the NPS failed to identify and analyze a "no action" alternative in the 2004 EA as required by NEPA. See 40 C.F.R. § 1508.9(b); Custer County Action Ass'n, 256 F.3d at 1040. The record does not support this contention. The EA explicitly discusses the "no action" alternative in the following terms:
At present, the identification of a no action alternative is uncertain, therefore several alternatives are being treated as no action for the purpose of the EA. A complicating factor in determining the no action alternative for this EA is the uncertain outcome of the proceedings in separate U.S. District Courts, which may result in several possible no action alternatives. One no action alternative could be the snowcoach-only alternative. This was the no action alternative in the SEIS, and it is incorporated as alternative 1 in this EA. It was also the alternative selected by the NPS in the 2000 winter use plan and 2001 implementing regulations.
A second no action alternative would be to continue the park superintendents' compendia that were amended in February 2004 following the February 10, *1217 2004, decision by the U.S. District Court for the District of Wyoming. As of the writing of this EA, neither the February 10, 2004, injunction has been formally dissolved, nor have the compendia amendments been rescinded. Alternative 4 in this EA most closely matches the provisions of the superintendents' compendia amendments.
A third no action alternative would be to adhere to the 1983 regulations that governed snowmobile use in the parks prior to promulgation of the 2001 regulations. The regulations are supported by the 1990 winter use plan and environmental assessment. They restrict snowmobile use to designated routes in the parks. However, the 1983 regulations describe a type and amount of snowmobile use that was found to constitute impairment of park resources and values in the 2000 EIS and 2003 SEIS. This alternative may not be legally permissible and thus does not meet the purpose and need's criteria for detailed consideration in this EA. However, comparisons are made throughout this EA between the alternatives and the historical conditions represented by the 1983 regulations. Thus the reader can compare the different alternatives with regulated and managed snowmobile use (or snowcoaches only) with the historical use levels and vehicle types.
A.R. 95925-26.
In the Court's opinion, this language more than satisfies the requirements of NEPA. Plaintiffs, however, seem to take issue with this section of the EA because it did not set forth one, and only one, definite "no action" alternative. As explained by the NPS in the quoted language from the EA, the agency could not accurately predict the "no action" alternative due to the ongoing litigation. Had the agency attempted to do, the chosen "no action" alternative may have been invalidated by court order in the pending suits. If this had happened, the EA would have violated NEPA for its failure to include a "no action" alternative. Thus, the NPS followed the only logical course and included all possible "no action" alternatives. The Court can find no error in this decision and, therefore, concludes that the EA contained, and the NPS discussed and analyzed, a valid "no action" alternative.
III. APA Claims
In their remaining claims, WLRA and Wyoming allege that the NPS violated the APA in issuing the 2004 EA, the 2004 FONSI, and the 2004 Temporary Rule because (1) the NPS's conclusion that all snowmobiles must be accompanied by commercial guides is not supported by substantial evidence; (2) the NPS's conclusion that commercial guides lead to responsible wildlife viewing and a lessening of impacts to the natural soundscapes is not supported by a reasoned analysis; (3) the NPS's decision that more than 720 snowmobiles would cause significant adverse effects on the environment is not supported by substantial evidence; and (4) the NPS's decision that more than 720 snowmobiles would cause significant adverse effects on the environment is not supported by a reasoned analysis. Each of these claims is discussed below.
The general standard for evaluating the following APA claims is fully described above. However, in its simplest form, the standard requires the Court to determine: "(1) whether the agency acted within the scope of its authority, (2) whether the agency complied with prescribed procedures, and (3) whether the action is otherwise arbitrary, capricious or an abuse of discretion." Olenhouse, 42 F.3d at 1574.
*1218 A. Is the NPS's conclusion that all snowmobiles must be accompanied by commercial guides supported by substantial evidence?
In their first APA claim, Plaintiffs contend that the NPS's conclusion that all snowmobiles must be accompanied by commercial guides is not supported by substantial evidence. This argument is very similar to Plaintiffs' NEPA claim regarding the commercial guiding requirement. Essentially, Plaintiffs claim that the evidence in the administrative record does not support the conclusion that commercial guides ameliorate environmental impacts. The Court must, however, based upon the standard of review applicable to such a claim, disagree with WLRA and Wyoming.
The applicable Tenth Circuit standard provides that "[s]ubstantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Doyal v. Barnhart, 331 F.3d 758, 760 (10th Cir.2003) (internal quotations and citation omitted). "This is something more than a mere scintilla but something less than the weight of the evidence." Foust v. Lujan, 942 F.2d 712, 714 (10th Cir.1991). "Evidence is generally substantial under the APA if it is enough to justify, if the trial were to a jury, refusal to direct a verdict on a factual conclusion." Hoyl v. Babbitt, 129 F.3d 1377, 1383 (10th Cir.1997).
In this case, the Court cannot say that there is less than a scintilla of evidence supporting the agency's decision. In fact, there is ample evidence in the record indicating that commercial guides ameliorate the environmental impacts of snowmobiles in the Parks. As noted previously, the institution of the one hundred percent (100%) commercial guiding requirement cut the number of law enforcement cases reported in the Park in half. A.R. 95959. It also reduced the number of arrests from twenty-one (21) to two (2). Id. The guiding requirement also reduced the number of animals deaths caused by snowmobiles from seven (7) to zero (0). A.R. 105881. In addition, the guiding requirement reduced the percentage of time that snowmobiles are audible as it keeps the machines grouped together and concentrates the sound into a smaller time period. See A.R. 96007, 96964, 99711.
Furthermore, the mere fact that there is evidence in the record contradicting the NPS's final conclusion does not prevent it from being supported by substantial evidence. See Consolo v. Federal Maritime Commission, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) ("[T]he possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence."); Wyoming Farm Bureau Federation v. Babbitt, 199 F.3d 1224, 1241 (10th Cir.2000)("[T]he mere presence of contradictory evidence does not invalidate the Agencies' actions or decisions."). A reviewing court "cannot displace the [agency's] choice between two conflicting views, even if [it] would have made a different choice had the matter been before [it] de novo." Custer County Action Ass'n, 256 F.3d at 1036.
Therefore, the Court finds that the NPS's conclusion that all snowmobiles must be accompanied by commercial guides is supported by substantial evidence.
B. Is the NPS's conclusion that commercial guides lead to responsible wildlife viewing and a lessening of impacts to the natural soundscapes supported by a reasoned analysis?
Plaintiffs next claim that the NPS's conclusion that commercial guides lead to responsible wildlife viewing and a lessening of impacts to the natural soundscapes *1219 is not supported by a reasoned analysis. Plaintiffs claim that the commercial guiding requirement is a dramatic change in policy by the NPS and, therefore, the NPS is obligated to supply a reasoned analysis for such change. See Motor Vehicle Mfrs. Ass'n of the United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) ("[A]n agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance.").
As stated by the Federal Defendants, Plaintiffs' argument "plainly ignores history." See Defendants' Response to Plaintiff's and Plaintiff-Intervenor's Joint Opening Brief at 42. The NPS has been attempting to reduce snowmobile use, especially unguided use, in the Park since the issuance of the 2000 ROD. A.R. 91407-48. This trend has continued since that time. For example, the 2003 ROD found that guiding would lessen the environmental impacts caused by snowmobiles. A.R. 91654. Similarly, the 2003 Rule required eighty percent (80%) of all snowmobiles to be commercially guided. 68 Fed.Reg. 69,268 (December 11, 2003). Thus, the 2004 Temporary Rule only differs from the 2003 Rule in one way: it does not allow twenty percent (20%) of the visitors to enter with a noncommercial guide or with no guide at all. See 69 Fed.Reg. 65,348 (November 10, 2004); 68 Fed.Reg. 69,268 (December 11, 2003). The Court cannot say that this change constitutes a major change in direction for the NPS.
However, even if the NPS did change its previous policy in the 2004 Temporary Rule, the NPS has provided valid reasons for its decision to require all visitors to travel with commercial guides. The NPS explained that due to "the timing of this FONSI and the commencement of the 2004-2005 winter season, it would be impossible to develop an adequate non-commercial guide training program for the upcoming winter season. In addition, it would be expensive and inappropriate during the winters of 2005-2006 and 2006-2007 due to the temporary nature of this plan." A.R. 99732. In regards to unguided access, the NPS noted that there were implementation problems with the non-commercial reservation system. A.R. 99732. The NPS found that local entities were buying large blocks of the reservations, most likely to be resold at a later date. Id. The NPS felt that this situation was unacceptable. Id. The NPS also stated that "unguided or non-commercially guided access to the parks would be addressed in a long-term winter use plan." Id. All of these statements explain why the NPS decided to require one hundred percent (100%) commercial guiding under the 2004 Temporary Rule.
Based upon the foregoing, the Court finds that the NPS was not required to supply a reasoned analysis for the guiding requirement as it was not a drastic change in policy. However, even if it were, the Court further finds that the NPS's conclusion that commercial guides lead to responsible wildlife viewing and a lessening of impacts to the natural soundscapes is supported by a reasoned analysis. Nevertheless, had the Court been given the chance to decide this issue instead of the NPS, it would have selected the alternative of twenty percent (20%) unguided snowmobiles; but, as already noted, the Court is obligated to decide this matter within the parameters of the decided cases, not its own preferences.
C. Is the NPS's decision that more than 720 snowmobiles would cause significant adverse effects on the environment supported by substantial evidence?
Under this claim, WLRA and Wyoming contend that the NPS's decision *1220 that more than 720 snowmobiles would cause significant adverse effects on the environment is not supported by substantial evidence. More specifically, Plaintiffs argue that the NPS's decision to reject Alternative 5 cannot be supported by the record. The Court disagrees for the reasons stated below.
As mentioned previously, "[s]ubstantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Doyal, 331 F.3d at 760 (internal quotation omitted). Substantial evidence requires "something more than a mere scintilla but something less than the weight of the evidence." Foust, 942 F.2d at 714. In other words, "[e]vidence is generally substantial under the APA if it is enough to justify, if the trial were to a jury, refusal to direct a verdict on a factual conclusion." Hoyl, 129 F.3d at 1383.
In the current case, the record is replete with evidence supporting the decision to limit daily snowmobile entries to 720 and to reject the 950 snowmobile limit. By way of example, the 2004 EA explicitly states that "950 snowmobiles per day would pose major adverse impacts upon park soundscapes, increased risks to park employee health and safety, and would also impact the visitor experience in the park." A.R. 99735-36. There is also evidence which shows that 720 snowmobiles per day have an audibility level of ninety-three percent (93%) at Old Faithful, well above the seventy-five percent (75%) maximum allowed for a FONSI. See A.R. 96012. Similarly, the record tends to show that an increase in snowmobile numbers will have a greater impact on the natural soundscapes. See, e.g., A.R. 96016-17, 105429. This evidence more than satisfies the substantial evidence standard required by the APA.
Additionally, the fact that the record may contain evidence which supports a 950 snowmobile limit does not render the Agency's decision invalid. Consolo, 383 U.S. at 620, 86 S.Ct. 1018; Wyoming Farm Bureau Federation, 199 F.3d at 1241. The NPS is allowed to choose between conflicting evidence in making its decision. Custer County Action Ass'n, 256 F.3d at 1036. We all must keep in mind that the NPS is the expert in this area and, consequently, is entitled to a great amount of deference when making such decisions. See Organized Fishermen of Florida v. Hodel, 775 F.2d 1544, 1550 (11th Cir.1985) ("[T]he Secretary [of the Interior] has broad discretion in determining how best to protect public land resources."); Southern Utah Wilderness Alliance v. National Park Service, 387 F.Supp.2d 1178, 1189 (D.Utah 2005) (noting that the NPS has expertise in managing national parks); Miccosukee Tribe of Indians of Florida v. United States, 980 F.Supp. 448, 462 (S.D.Fla.1997) ("[T]he Interior Department has broad discretion in determining how best to protect public lands, weigh competing uses of federal property, and allocate park resources."); Conservation Law Foundation of New England, Inc. v. Clark, 590 F.Supp. 1467, 1476 (D.Mass.1984) (noting that "the National Park Service ... [has] significant expertise in environmental matters").
Therefore, the Court finds that the NPS's decision that more than 720 snowmobiles would cause significant adverse effects on the environment is supported by substantial evidence.
D. Is the NPS's decision that more than 720 snowmobiles would cause significant adverse effects on the environment supported by a reasoned analysis?
In their final claim, Plaintiffs argue that NPS's decision that more than *1221 720 snowmobiles would cause significant adverse effects on the environment is not supported by a reasoned analysis. Plaintiffs contend that the NPS used different assumptions when analyzing Alternatives 4 and 5. Plaintiffs aver that under Alternative 4 the NPS assumed that fifty-one percent (51%) of the daily limit of 720 snowmobiles would enter the Park on non-peak days. However, according to Plaintiffs, the NPS did not use this assumption under Alternative 5. Rather, the NPS simply assumed that the total of snowmobiles entering the park would be much higher on non-peak days. The Federal Defendants respond that NPS did not utilize a fifty-one percent (51%) assumption. Rather, according to them, this test was "invented" by Plaintiffs.
The Court tends to agree with Defendants. At no place does the 2004 EA reference a fifty-one percent (51%) assumption in regards to non-peak days. In fact, the EA actually infers that the NPS assumes non-peak entries to be between forty-one (41%) and seventy-five percent (75%). See A.R. 96012 (noting that 300-540 snowmobiles would enter Yellowstone on non-peak days under Alternative 4). Furthermore, as argued by Defendants, applying a fifty-one percent (51%) assumption to Alternative 5 would defeat the purpose of that potential choice, to wit, to evaluate the effects of allowing more than 720 snowmobiles into the Parks on a daily basis.
Therefore, for the reasons just stated, the Court finds that the NPS's decision that more than 720 snowmobiles would cause significant adverse effects on the environment is supported by a reasoned analysis.
CONCLUSION
This case, like those before it, illustrates that there may not be a solution which fully satisfies all parties involved in this litigation. As a result, this case is not likely to be the terminal, or even penultimate for that matter, suit pertaining to snowmobiles in the Parks. The Court can only hope that the long-term studies proposed by the NPS will yield results that are acceptable to all of the parties. However, in the interim, it is clear to this Court that the 2004 Temporary Rule, while not perfect in any sense, seems to be the best compromise currently available. The 2004 Temporary Rule will protect the natural resources of the Parks until the NPS determines the impact of the new and improved, best available technology snowmobiles.
However, the Court also clearly realizes that not all visitors to the Parks require guides and that most of these guests are very responsible in terms of protecting the Parks' resources. The Court hopes that the ultimate conclusion reached in the research of this issue allows many visitors to visit the Parks on an unguided basis. Yet, until the point when such research is complete, the aforementioned guests will have to abide by the commercial guiding requirements.
Therefore, based upon the foregoing discussion, the Court FINDS that: (1) the claims of WLRA and Wyoming are properly before this Court; (2) the NPS complied with NEPA in evaluating the commercial guide requirement; (3) the NPS did consider a reasonable range of alternatives; (4) the NPS adequately analyzed a "no action" alternative; (5) the NPS's conclusion that all snowmobiles must be accompanied by commercial guides is supported by substantial evidence; (6) the NPS's conclusion that commercial guides lead to responsible wildlife viewing and a lessening of impacts to the natural soundscapes is supported by a reasoned analysis; (7) the NPS's decision that more than 720 *1222 snowmobiles would cause significant adverse effects on the environment is supported by substantial evidence; (8) the NPS's decision that more than 720 snowmobiles would cause significant adverse effects on the environment is supported by a reasoned analysis; and (9) the 2004 FONSI, 2004 EA, and 2004 Temporary Rule were promulgated in accordance with the requirements of the APA and NEPA.
ACCORDINGLY, IT IS HEREBY ORDERED that the relief requested in Plaintiff's and Plaintiff-Intervenor's administrative appeal is DENIED.
HOWEVER, IT IS FURTHER ORDERED that this Court will retain jurisdiction over this matter during the pendency of the long-term environmental study to ensure that the NPS meets the requirements of NEPA and the APA during such process. More specifically, the Court will, should the need arise, carefully review the further actions of the NPS to ensure that the Agency adequately studies the impacts, or lack thereof, of unguided access to the Parks. Therefore, any claims or challenges regarding the long-term study and its resultant rules brought by the current parties shall proceed before this Court. The Court exercises this jurisdiction in an effort to promote judicial economy and effectiveness.
NOTES
[1] Plaintiff and Plaintiff-Intervenor are, at times, jointly referred to as "Plaintiffs" in the remainder of this Order.
[2] Because the cases and agency actions leading up to the case sub judice have been discussed at length by this Court on several prior occasions, the following discussion of facts and procedural history is somewhat abbreviated. For a complete and thorough recitation of the prior history of the snowmobile litigation, see Int'l Snowmobile Manufacturers Ass'n v. Norton, 340 F.Supp.2d 1249, 1253-56 (D.Wyo.2004).
[3] Fund For Animals v. Babbitt, No. 97-1126(EGS) (D.D.C.).
[4] Int'l Snowmobile Manufacturers Ass'n v. Norton, No. 00-CV-229-B (D.Wyo.).
[5] Fund for Animals v. Norton, No. Civ. A. 02-2367(EGS) (D.D.C.).
[6] In making the decision to issue a temporary restraining order, this Court found, as required by law, that Plaintiffs had a substantial likelihood of success on the merits in their challenge to the 2001 Snowcoach Rule. Int'l Snowmobile Manufacturers Ass'n, 304 F.Supp.2d at 1289-93. This Court also found that the 2001 Snowcoach Rule would cause "significant financial loss ... that cannot be compensated if Wyoming and ISMA Plaintiffs prevail on the merits in this case." Id. at 1293.
[7] Fund for Animals v. Norton, No. 04-1913(EGS) (D.D.C.).
[8] Due to the fact that this Court and the D.C. Court each retained jurisdiction in this matter there is once again the possibility of the issuance of conflicting orders. This lurking comity problem weighs heavy on the Court's mind, as it did in the previous litigation. However, given the Court's belief that this District is the proper forum for a suit involving the Parks, there is little the Court can do to alleviate the situation.
[9] In City of Seabrook, the Fifth Circuit explained its reasoning for not requiring participation as a prerequisite to challenging agency action as follows:
[C]ourts should not generally hold a petitioner estopped from objecting to an agency rule because his specific objection was not made during the "notice and comment" period. The rule urged by EPA would require everyone who wishes to protect himself from arbitrary agency action not only to become a faithful reader of the notices of proposed rulemaking published each day in the Federal Register, but a psychic able to predict the possible changes that could be made in the proposal when the rule is finally promulgated.
City of Seabrook, 659 F.2d at 1360-61. Although the Court finds this reasoning somewhat persuasive, it does not appear that the Tenth Circuit would follow this line of thinking to the conclusion reached by the Fifth Circuit. See, e.g., Holy Cross Wilderness Fund, 960 F.2d at 1528 n. 18. But see Big Horn Coal Co. v. Temple, 793 F.2d 1165, 1170-71 (10th Cir.1986) (Barrett, J., specially concurring) (discussing the rule established by City of Seabrook and other similar cases).
[10] The Court notes that the administrative record in this case has been supplemented with comments that were submitted by Wyoming and subsequently excluded from the record due to a computer malfunction. See The Wyoming Lodging and Restaurant Association et al. v. United States Department of the Interior et al., No. 04-CV-315-B (D.Wyo. Sept.29, 2005) (Order on Plaintiff-Intervenor's Statement of Reconsideration of Magistrate's Order Denying the Motion to Supplement the Record); Plaintiff-Intervenor's Motion to Supplement the Administrative Record. Thus, some references to the administrative record will actually cite Plaintiff-Intervenor's proposed appendix, which has now been accepted by the Court as part of the administrative record.
| {
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COURT OF APPEALS OF VIRGINIA
Present: Judges Bray, Annunziata and Overton
STEVEN EDWARD MITCHELL
MEMORANDUM OPINION *
v. Record No. 2283-97-3 PER CURIAM
APRIL 14, 1998
ELIZABETH JANE THOMPSON MITCHELL
FROM THE CIRCUIT COURT OF BOTETOURT COUNTY
George E. Honts, III, Judge
(Burton L. Albert, on brief), for appellant.
(Richard Lee Lawrence; Sam Garrison, on
brief), for appellee.
Steven Edward Mitchell (husband) appeals the decision of the
circuit court awarding spousal support to Elizabeth Jane Thompson
Mitchell (wife) and deciding other issues. Husband contends that
the trial court erred by (1) failing to impute income to wife in
connection with its determination of spousal support; (2) making
findings of fact which were not supported by evidence; (3)
including non-marital assets as part of the marital estate; (4)
valuing assets as of a date other than the equitable distribution
hearing without a motion from either party seeking an alternative
valuation date; (5) awarding wife the maximum marital share of
husband's 401(k) pension plan; and (6) considering matters
outside the record. Upon reviewing the record and briefs of the
parties, we conclude that this appeal is without merit.
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
Accordingly, we summarily affirm the decision of the trial court.
See Rule 5A:27.
Spousal Support
Husband contends that the trial court erred by failing to
impute income to wife before awarding her spousal support.
Husband also challenges the trial court's finding that wife was
depressed due to the break-up of the marriage and his adultery.
A party seeking spousal support is obligated to earn as much
as reasonably possible in order to reduce the amount of support
needed. See Srinivasan v. Srinivasan, 10 Va. App. 728, 734, 396
S.E.2d 675, 679 (1990). In keeping with this principle, a court
may, under appropriate circumstances, impute income to a party
who seeks spousal or child support. See id. However, the
decision to impute income is left to the discretion of the trial
court.
The evidence established that, at the time of the hearing,
wife suffered from major depression. Her doctor opined that she
was disabled from working because she had trouble focusing and
concentrating. While wife was trained as a nurse and had earned
$30,000 per year in the past, she had not earned that amount in
several years prior to the parties' separation. Wife's earnings
from selling cosmetics had been minimal.
The trial court found that wife had a demonstrable ability
to earn at least $20,000 per year as a nurse, but that she was
unable presently to work full-time. The trial court set the
2
matter for review in six months. The trial court's decision was
based upon credible evidence, i.e., her doctor's opinion, and we
find no abuse of discretion in its refusal to impute income to
wife under these circumstances.
Findings of Fact Not Supported By Evidence
Husband contends that the trial court committed reversible
error in its final decree when it corrected an error made in its
letter opinion. A court speaks only through its written orders.
See Waterfront Marine Construction, Inc. v. North End 49ers, 251
Va. 417, 427 n.2, 468 S.E.2d 894, 900 n.2 (1996); Cunningham v.
Smith, 205 Va. 205, 208, 135 S.E.2d 770, 773 (1964).
Pursuant to husband's motion to reconsider, the trial court
lowered the value of the parties' personal property to eliminate
the double inclusion of a $7,000 tractor. Evidence supports the
trial court's adjustment. Husband admits that the value set out
in the final decree was proper and that he incurred no damage.
Therefore, this argument is without merit.
Inclusion of Assets in the Marital Estate
Husband also challenges the court's inclusion in the marital
estate of $21,683 out of a total value of $43,683, which arose
from a stock option exercised by husband in April 1994. Husband
contended that the net proceeds of this transaction amounted to
$22,000, all of which went towards the marital residence, and
that no asset worth $21,683 existed at the date of separation or
of the hearing.
3
The trial court's final decree does not include the amount
challenged by husband. Therefore, husband's contention is
without merit.
Alternative Valuation Date
Husband contends that the trial court erred by valuing a
KEMBA Credit Union marital account titled in husband's name as of
the date of separation. The account had no remaining funds as of
the date of the hearing. Neither party filed a motion to value
the account as of a date different from the hearing date. See
Code § 20-107.3(A).
As the party last in control of the KEMBA Credit Union
funds, husband bore the burden to prove by a preponderance of the
evidence that he did not dissipate those funds. See Clements v.
Clements, 10 Va. App. 580, 586, 397 S.E.2d 257, 261 (1990).
Husband testified that he transferred the funds into a checking
account and began to use the funds to pay various expenses,
including the mortgage and spousal support. However, the record
contains no other evidence indicating how these marital funds
were used. Husband did not provide documentary evidence to
support his testimony that he used these funds to pay living
expenses. The trial court noted that it found husband to be
"less than forthcoming in his oral testimony."
When determining the amount of a monetary award, the court
may consider which party benefitted from the dissipation of
marital funds. See Booth v. Booth, 7 Va. App. 22, 27-28, 371
4
S.E.2d 569, 572-73 (1988). "[E]quity can only be accomplished if
the party who last had the funds is held accountable for them."
Id. at 28, 371 S.E.2d at 573. The trial court is not required to
quantify what weight it gives to the statutory factors. See id.
Based upon the evidence and the trial court's credibility
determination, we cannot say that the trial court committed
reversible error by including in the value of the marital estate
the value of the KEMBA account as of the date of separation.
Husband admitted spending the funds, and failed to establish by
any credible evidence that the funds were used for a legitimate
purpose.
Share of 401(k)
Husband contends that the trial court erred by awarding wife
the maximum share of his 401(k) pension authorized by Code
§ 20-107.3. Husband admits that the trial court indicated that
it considered the statutory factors, and a review of its letter
opinion demonstrates that it did consider the factors.
Code § 20-107.3(E)(5) authorizes the trial court to consider
"[t]he circumstances and factors which contributed to the
dissolution of the marriage, specifically including any ground
for divorce under the provisions of subdivisions (1) [adultery],
(3) or (6) of § 20-91 . . . ." The trial court found that
husband's post-separation adultery was the cause of the parties'
divorce. The court noted that husband's adultery occurred
"within hours or days of his departure from the marital home"
5
with a woman to whom he admitted he had an emotional attachment
even before the parties separated. The court also found that the
separation was disabling for wife, who incurred over $13,000 in
medical expenses as a result of her emotional problems resulting
from the separation. The court was entitled to consider
husband's adultery and its effect on the marital partnership in
reaching its equitable distribution decision. See O'Loughlin v.
O'Loughlin, 20 Va. App. 522, 527-28, 458 S.E.2d 323, 325-26
(1995).
The trial court found that both parties contributed
monetarily and non-monetarily to the marriage. Wife withdrew all
funds held in her 401(k) plan to purchase a new car which husband
retained after separation. Wife also contributed $30,000 towards
the purchase of the marital residence. The parties were married
for over eleven years. We find no error in the trial court's
election to award wife her statutory share of husband's 401(k)
benefits.
We also reject husband's contention that the division of the
marital estate was a gross abuse of discretion. Wife received
approximately sixty-two percent of the marital estate.
Virginia's equitable distribution scheme does not provide "a
statutory presumption of equal distribution." Papuchis v.
Papuchis, 2 Va. App. 130, 132, 341 S.E.2d 829, 830 (1986). Under
the facts of this case, we cannot say the trial court abused its
discretion in making its equitable distribution award.
6
Considering Matters Outside the Record
Finally, husband contends that the trial court erred by
considering disparaging remarks about the trial judge made by
husband's counsel in a letter to wife's counsel. Nothing in the
record before us supports husband's contention that the trial
court referred to this letter. "The trial court's judgment is
presumed to be correct, and 'the burden is on the appellant to
present to us a sufficient record from which we can determine
whether the lower court has erred.'" Twardy v. Twardy, 14 Va.
App. 651, 658, 419 S.E.2d 848, 852 (1992) (en banc) (citation
omitted). Nothing in the record before us supports husband's
contention.
Accordingly, the decision of the circuit court is summarily
affirmed.
Affirmed.
7
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449 F.Supp. 553 (1978)
Daniel O. ALSTON
v.
ALLEGHENY LUDLUM STEEL CORPORATION, DIVISION OF ALLEGHENY LUDLUM INDUSTRIES, INC.
Civ. A. No. 78-94.
United States District Court, W. D. Pennsylvania.
May 2, 1978.
*554 Samuel J. Goldstein, Pittsburgh, Pa., for plaintiff.
R. A. King, Pittsburgh, Pa., for defendant.
OPINION
ROSENBERG, Senior District Judge.
The matter here before me is on a motion of the defendant, Allegheny Ludlum Steel Corporation, Division of Allegheny Ludlum Industries, Inc., to dismiss the complaint filed by a former employee, Daniel O. Alston.
The complaint was filed on January 30, 1978, and avers that the plaintiff is a black man; that he entered the employment of the defendant on December 28, 1928; that his employment continued until his retirement on April 4, 1969, during which time his employment had been interrupted by a leave of absence to serve in the United States Army from 1943 to 1945, and an additional leave of absence to secure a degree from Bluefield State College in 1947 to 1950, from which college he graduated with honor and a Bachelor of Science degree in commercial education; that he holds a Masters degree from the University of Pittsburgh; that prior to his induction into the army, he had been doing general labor work under the jurisdiction of a contract between the defendant and the United Steelworkers *555 of America after 1936; that being employed as a laborer, and upon his return from military service on July 12, 1945, he was employed as an electrical grinder operator until 1947, when he obtained a leave to attend Bluefield State College; that he returned to his employment under the defendant in 1950 and successfully bid for the job of craneman; that during the years 1963 to 1966, he was partially unemployed by reason of eye surgery and upon his return was directed to do general labor because of his impaired vision and because of leg wounds incurred in the United States Armed Service; that upon his return from college he had made innumerable applications for supervisor or foreman, but his applications were ignored or rejected because of racial discrimination, although he was well qualified because of experience, training and ability to handle the work, and although many promotions were made in preference to caucasians who were less competent or experienced; that in 1963 to 1969 janitor maintenance was the only employment available to him until he retired in 1969; that after applying for aid through the Union Grievance procedure, he was advised that he had no remedy; that the defendant throughout his tenure of employment informed the plaintiff it would give him an opportunity for advancement while at the same time indicated it would be necessary for him to take a battery of tests; that the plaintiff refused to take the tests because they were not generally given to applicants for promotion, and such tests were specifically created, if at all, as "being illusory and discriminatory"; that the plaintiff secured employment with the Pittsburgh Board of Education and retired from that employment in 1976; that after May 30, 1950 until until his retirement, he had been competent and qualified to be promoted to foreman or supervisor with an increase in salary but his efforts for promotion were ignored as a discriminatory practice on account of his color; that had he been advanced in accordance with his capabilities and had he received the available promotions, his pension would have been based on his salary and would have been much larger upon his retirement; that as a result he lost a considerable sum of money based upon loss of salary in promotions to which he was entitled; that he is entitled to treble damages as a result thereof and an increase in pension such as he would have received or additional compensations, punitive damages, counsel fees, costs and expenses; and that this court has jurisdiction of the matter under 42 U.S.C. § 2000e-2 of Title VII of the Equal Opportunity statute and under the Civil Rights Act, 42 U.S.C. § 1981 and § 1983.
The defendant moves to dismiss, arguing that the complaint fails to state a claim upon which relief can be granted: (1) under 42 U.S.C. § 1983, because it fails to allege action under color of state law or state authority; (2) under Article 1, § 28 of the Pennsylvania Constitution, because it fails to support a cause of action based on sex discrimination; (3) under 42 U.S.C. § 1981 because it is barred by the applicable Statute of Limitations, and additionally because it fails to allege racial motivation and fails to specifically plead facts from which a court may infer discrimination; and (4) under 42 U.S.C. § 2000e-1, because timely charges were not filed with the EEOC, a jurisdictional prerequisite to a Title VII action. The defendant also attacks an Amended Complaint which seeks as an additional remedy a class action.
The principal issue to which oral argument and briefs for both the plaintiff and defendant primarily addressed themselves, is the timeliness of the assertion of claims under 42 U.S.C. § 1981 and 42 U.S.C. § 2000e, et seq. Basically the plaintiff claims two different forms of discrimination in regard to his employment with Allegheny Ludlum. First, the operation (from 1950 to 1969) of a racially discriminatory promotion system; and second, the operation of the defendant's pension system under which the plaintiff currently receives monthly benefits.
*556 Section 1981[1] has been recognized in this Circuit as creating a cause of action for alleged employment discrimination. Young v. Intern'l. Telephone & Telegraph Co., 438 F.2d 757, C.A. 3, 1971. Since this statute provides no period of limitations, it is necessary to refer to the appropriate period stated in a statute of local application. Macklin v. Spector Freight Systems, Inc., 156 U.S.App.D.C. 69, at page 84, 478 F.2d 979, C.A.D.C., 1973, at page 994. Such a cause of action must be brought at least within six years from the date on which such cause accrued. Meyers v. Pennpack Woods Home Ownership Assn., 559 F.2d 894, C.A. 3, 1977.
Similarly, under the terms of 42 U.S.C. § 2000e et seq.,[2] a plaintiff may not bring suit in a district court unless a charge has been filed with the Equal Employment Opportunity Commission within 180 days of the occurrence of the alleged unfair practice. The timely filing of charges with the EEOC and the timely filing of suit thereafter are "jurisdiction" facts. Wetzel v. Liberty Mutual Insurance Co., 508 F.2d 239, C.A. 3, 1975, cert. den., 421 U.S. 1011, 95 S.Ct. 2415, 44 L.Ed.2d 679 (1975). Any failure to comply with 42 U.S.C. § 2000e-5(e) deprives a district court of subject matter jurisdiction. DeGideo v. Sperry-Univac Company, 415 F.Supp. 227 (E.D.Pa.1976). See also, Kutska v. California State College Department, 410 F.Supp. 48, 49-50, n.1 (W.D.Pa.1976), aff'd, 549 F.2d 795, C.A. 3, 1977; Macklin, supra, 156 U.S.App.D.C. at page 76, 478 F.2d at page 986.
This is settled law and the plaintiff does not challenge it, only its application to the facts at hand.
In regard to the refusal to promote the plaintiff, I find the last date on which the plaintiff could have been illegally refused promotion and discriminated against was on the last day of his employment with the defendant corporation on August 4, 1969. Since the plaintiff failed to institute any action within the six-year statute of limitations (on or before August 4, 1975), and also failed to make this the basis of a timely charge with the EEOC within 180 days of his retirement date, this claim of the plaintiff is barred and must be dismissed.
The plaintiff's second claim alleges that the operation of the defendant's pension system constitutes a continuing violation of both § 1981 and § 2000e et seq. (Title VII) in that the plaintiff is not receiving as much as he would have received if he had not been allegedly discriminated against in promotion, and therefore, that each monthly benefit the plaintiff does receive is the present effect of prior acts of discrimination.
A recent case, United Air Lines, Inc. v. Evans, 431 U.S. 553, 97 S.Ct. 1885, 52 L.Ed.2d 571 (1977) deals with an issue similar to that here being considered. Evans was employed by United as a flight attendant from November, 1966 to February 1968 at which time she married and was forced to resign because United maintained a policy of refusing to allow its female flight attendants to be married (which policy was subsequently found to be in violation of Title VII of the Civil Rights Act of 1964). Evans was rehired in February 1972 and in 1973 filed charges with the EEOC claiming that United had committed an unlawful employment practice by refusing to credit her with seniority for any period prior to February, 1972. No charge had been filed *557 with the EEOC within the appropriate time period after the plaintiff was forced to resign in 1968.
The sole question for decision by the Supreme Court was whether United had committed a second violation of Title VII by refusing to credit her with seniority for any period prior to February, 1972. Evans argued, inter alia, that United's seniority system illegally discriminated against her in that it gave present effect to the past illegal act and therefore perpetuated the consequences of forbidden discrimination.
The majority of seven, through Justice Stevens, agreed with the appellant that the seniority system gave present effect to a past act of discrimination, but held that such a discriminating act must have been based on a timely charge before the Court could have adjudicated the question of remedy. The Court noted:
"A discriminatory act which is not made the basis for a timely charge is the legal equivalent of a discriminatory act which occurred before the statute was passed. It may constitute relevant background evidence in a proceeding in which the status of a current practice is at issue, but separately considered, it is merely an unfortunate event in history which has no present legal consequences." 431 U.S. at page 558, 97 S.Ct. at page 1889.
The Court continued:
"Respondent emphasizes the fact that she has alleged continuing violation. United's seniority system does indeed have a continuing impact on her pay and fringe benefits. But the emphasis should not be placed on mere continuity the critical question is whether any present violation exists. She has not alleged that the system discriminates against former female employees or that it treats former employees who were discharged for a discriminatory reason any differently than former employees who resigned or were discharged for a non-discriminatory reason. In short, the system is neutral in its operation." 431 U.S. at page 558, 97 S.Ct. at page 1889.
The plaintiff, Alston, makes no allegations that the pension system discriminates against blacks, or that it treats the plaintiff any differently than whites who were in the same position as the plaintiff on retirement. In fact, the plaintiff does not seek a modification or elimination of the existing pension system, but rather an increase in pension based on such additional compensation as he would have received had the defendant not discriminated in its hiring practice. However, it is evident that the pension system under which the plaintiff retired is neutral in operation just as was the seniority system in Evans, supra. In light of Evans, the plaintiff thus cannot use these pension benefits as a basis for a present unlawful employment practice.
"[A] challenge to a neutral system may not be predicated in the mere fact that a past event which has no present legal significance has affected the calculation of seniority credit, even if the past event might at one time have justified a valid claim against the employer." 431 U.S. at page 560, 97 S.Ct. at page 1890.
Since the plaintiff had not challenged the alleged unlawful act or practice itself, he cannot now challenge any of its derivative effects. Upon retirement, the plaintiff was treated like any other pensioner by the defendant (regardless of the merits of its promotion system), and such conduct is not in violation of either § 1981 or § 2000e et seq. Therefore, its continued adherence to that policy is not illegal.
The plaintiff attempts to distinguish Cates v. Trans World Airlines, 561 F.2d 1064, C.A. 2, 1977 from the case at bar. In Cates the appellants contended that a facially neutral date-of-hire seniority system violated Title VII insofar as it adversely affected victims of past discrimination. However, that Court noted the separateness of the issues of "violation" and of "remedy".
"It is plain in the light of Evans and Franks, [Franks v. Bowman Transportation Co., 424 U.S. 747, 96 S.Ct. 1251, 47 L.Ed.2d 444] that the Title VII claims of Cates, George & Whithead were not timely *558 asserted. Those decisions sharply distinguish the issues whether there has been a violation of Title VII and what the appropriate remedy is for such a violation; while earlier lower court decisions tended to mix the two questions together. Unless there is a timely charge which is proven to be a violation of Title VII, the question of remedy is never reached." 561 F.2d at 1072.
and also,
"What was characterized as a second independent violation of Title VII, the seniority claim, was nothing more than the residual effect of a prior discriminatory refusal to hire, which could have been remedied had that past unlawful employment practice been timely asserted and proven." 561 F.2d at page 1072.
The plaintiff also states that the applicability of a limitation statute under § 1981 was merely a matter of judicial convenience and that it could be inferred that Congress intended that there was no statute of limitations in cases brought under this statute. The answer is that
"The court in Evans also expressed its concern that any other result would prevent a claim from ever being barred by limitations . . . Similarly, were we to accept plaintiff's argument in this case, almost any time-barred discrimination in promotion could be raised by alleging that `but for' that discrimination one would not be able to apply for positions for which one does not now have the experience qualification . . . To allow this charge to make timely all old incidents of discrimination is to defeat totally the concept of limitations." Myles v. Schlesinger, 436 F.Supp. 8 (D.C.1976) at page 15.
Any distinction between a challenged seniority system and a pension system (under the continuing violation theory) was found inconsequential in Freude v. Bell Telephone Co. of Pa., 438 F.Supp. 1059 (E.D.Pa.1977). In that case, a retired employee brought suit under Title VII for alleged sex discrimination and asserted that continuing payments of pension benefits in an amount derived from an alleged sex discriminatory salary scale (attained during her employment) constituted discrimination which permitted her to file charges and bring suit after the applicable period of limitations had expired from the date of her retirement. The plaintiff conceded that her charge with the EEOC was not filed until thirteen months after her retirement.
In dismissing the plaintiff's argument, the Court held that:
"The receipt by the plaintiff of payments received pursuant to a fair and sex neutral pension plan do not constitute a continuing violation tolling the statute even though the amount of pension payments is derived from a sex discriminatory salary scale. The latter fact, which was not made the basis of a timely charge, is, however regrettably `an unfortunate event in history which has no present legal consequences.'" Freude, supra, at page 1061.
Under both Evans, supra and Freude, supra, the plaintiff does not charge a present violation under either § 1981 or Title VII. Since this court has no jurisdiction over time barred claims, I need not examine any other of the defendant's grounds to dismiss.
In order for a plaintiff to succeed under 42 U.S.C. § 1983[3] two elements must be present: (1) the conduct complained of must have been done or caused to have been done by a person acting under color of law; and (2) the conduct must have subjected the complainant to the deprivation of rights, privileges or immunities secured to him by the Constitution and laws of the *559 United States. Via v. Cliff, 470 F.2d 271, 274, C.A. 3, 1972; Meyer v. Lavelle, 389 F.Supp. 972, 975 (E.D.Pa.1975). Ordinarily, a private person or corporation cannot be held liable under 42 U.S.C. § 1983 unless his or its wrongful action was done under color of state law or state authority. Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974). Since the complaint fails to allege action under color of state law or state authority, the plaintiff's claim under 42 U.S.C. § 1983 must be dismissed.
Finally, the plaintiff, a black male, has failed to allege any facts to support a cause of action based on sex discrimination. In Article 1, § 28 of the Pennsylvania Constitution, it is provided that: "Equality of rights under the law shall not be denied or abridged in the Commonwealth of Pennsylvania because of the sex of the individual."
No allegation is made that females were promoted to positions for which the plaintiff was qualified. On the contrary the plaintiff solely alleges discrimination based on race. Therefore, the plaintiff's claim under Article 1, § 28 of the Pennsylvania Constitution, will also be denied.
NOTES
[1] 42 U.S.C. § 1981 provides that: "All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other."
[2] 42 U.S.C. § 2000e-5(d) provides in part: "A charge under subsection (a) shall be filed within ninety days after the alleged unlawful employment practice occurred . . ." 78 Stat. 260. The 1972 amendments to Title VII redesignated subsection (d) as (e). At the same time it was amended to enlarge the limitations period to 180 days. 42 U.S.C. § 2000e-5(e).
[3] 42 U.S.C. § 1983 provides that:
"Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress."
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-7725
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
DENNIS ALLEN BREWER,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. T. S. Ellis, III, District
Judge. (CR-91-342; CA-97-1089-1)
Submitted: March 30, 2006 Decided: April 7, 2006
Before TRAXLER, GREGORY, and SHEDD, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Dennis Allen Brewer, Appellant Pro Se. Christine Fay Wright,
OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Dennis Allen Brewer seeks to appeal the district court’s
order denying relief on his Fed. R. Civ. P. 60(b) motion requesting
reconsideration of his motion filed under 28 U.S.C. § 2255 (2000).
The order is not appealable unless a circuit justice or judge
issues a certificate of appealability. 28 U.S.C. § 2253(c)(1)
(2000); Reid v. Angelone, 369 F.3d 363, 368-69 (4th Cir. 2004). 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 the district
court’s assessment of his constitutional claims is debatable and
that any dispositive procedural rulings by the district court are
also debatable or wrong. See Miller-El v. Cockrell, 537 U.S. 322,
336 (2003); Slack v. McDaniel, 529 U.S. 473, 484 (2000); Rose v.
Lee, 252 F.3d 676, 683 (4th Cir. 2001). We have independently
reviewed the record and conclude that Brewer has not made the
requisite showing. Accordingly, we deny a certificate of
appealability 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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21 Ariz. App. 186 (1974)
517 P.2d 1079
Ben JOHNSON and Mary Johnson, his wife, Sam L. Linder and Cindy Linder, his wife, Appellants,
v.
Bill NYCHYK, Appellee and Cross-Appellant,
v.
Wesley G. GREEN and Susan Green, his wife, Cross-Appellees.
No. 1 CA-CIV 1886.
Court of Appeals of Arizona, Division 1, Department A.
January 10, 1974.
*187 Cavness, DeRose, Senner & Rood by John W. Rood, Phoenix, for appellants.
Strong & Pugh, by William K. Strong, Phoenix, for appellee and cross-appellant.
Robbins, Green, O'Grady & Abbuhl, P.A. by Robert H. Green, Phoenix, for cross-appellees.
OPINION
OGG, Judge.
In October, 1964 the plaintiffs Bill Nychyk and Inez Nychyk, husband and wife, met with appellants Ben Johnson and Sam L. Linder and cross-appellee Wesley G. Green (all originally defendants) in Phoenix to discuss an outdoor theater venture which the defendants desired to promote. At the meeting the parties agreed that the plaintiffs would invest $60,000.00 to finance the venture which was to be operated by a new corporation, Cinema International. Plaintiffs were to receive 25 percent of the stock in the corporation for their investment and the defendants were to receive 75 percent of the stock in return for their services.
Within the next month plaintiffs sent two checks to Green in the total sum of $60,000.00. These funds were placed in various checking and savings accounts controlled by one or all of the defendants. Two months later Cinema International, Inc. was formed and plaintiffs received their shares but no corporate bank account was established and the funds remained in the defendants' accounts. Although plaintiff Bill Nychyk signed the articles of incorporation which named him as an incorporator, director and vice-president of the company, he was never given notice of, nor did he attend or waive notice of, any incorporators', directors' or shareholders' meetings. The corporation never really became a viable, operating entity.
In the months following, a total of $40,000.00 of the plaintiffs' investment was expended by the defendant-promoters, but only $509.69 of that sum was used for the actual costs of promoting the venture; i.e., the incorporation expense. The remainder of the $40,000.00, except for $9,000.00 spent by Green, was used in unaccountedfor endeavors, one of which was an unsuccessful pool-table venture and for the personal living expenses of the defendant-promoters. As to defendant Green, the trial court found that he had fully accounted for his use of $9,000.00 of the funds as personal living expenses and that he had appropriated these funds as bona fide compensation for his services; he had devoted full time to the promotion of the venture. The $20,000.00 not expended by the defendants was later returned to the plaintiffs in exchange for their stock.
Judgment was entered in favor of plaintiff Bill Nychyk (he had acquired his wife's rights in the action) and against defendants Linder and Johnson individually and against them and their wives jointly and severally in the sum of $40,779.11, $9,768.38 of which consisted of interest at 6 percent computed over the course of the litigation; judgment was further entered against Linder individually for $1,340.00 consisting of a $1,000.00 principal sum which he received, plus interest. All of plaintiff's claims against Green were dismissed.
Defendants Linder and Johnson appealed from the judgment in favor of plaintiff and plaintiff cross-appealed from the judgment against him in favor of defendant Green. The original appeal will be considered first and then plaintiff's cross-appeal.
Appellants' first question is the propriety of the trial court's action permitting the plaintiffs to file their second amended complaint. Appellants assert that plaintiffs' second amended complaint, which was filed two and one-half years after the original complaint, set forth a new cause of action and thus did not relate back to the original complaint under Rule *188 15(c), Arizona Rules of Civil Procedure 16 A.R.S. Therefore, since the statute of limitations had expired on the alleged new theory, they allege that the plaintiffs were barred from asserting it.
Plaintiffs' original complaint set forth the circumstances of the case as outlined above and asserted liability based on fraud. Their second amended complaint included an allegation of conversion and was based upon the same transactions and occurrences as the original complaint.
Rule 15(c), Arizona Rules of Civil Procedure, states in part:
"15(c) Relation back of amendments. Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading."
Appellants are asserting that when a party sets forth a completely new theory of liability relating to the same factual background, Rule 15(c) does not apply to relate the amended pleading back to the date of the original complaint.
Arizona Court of Appeals decisions interpreting Rule 15(c) are clear in their holdings that as long as the amended pleading sets forth the same conduct, transaction or occurrence as the earlier pleading the amendment should be allowed and will relate back even though new theories of recovery are alleged. Green Reservoir Flood Control Dist. v. Willmoth, 15 Ariz. App. 406, 489 P.2d 69 (1971). This is true even though the change of theories is from contract to tortious misrepresentation. Arizona Title Ins. & Trust Co. v. O'Malley Lumber Co., 14 Ariz. App. 486, 484 P.2d 639 (1971); Neeriemer v. Superior Court of Maricopa County, 13 Ariz. App. 460, 477 P.2d 746 (1970).
Next, appellants assert that the trial court was not justified in entering a judgment against them based on a theory of confidential and fidiciary relationship, joint venture, resulting trust and conversion because there were no findings of fact on these points, rather there were only conclusions of law on them. We note initially that the only thing absent from the findings of fact in this regard are the labels; the findings in and of themselves are complete without using the terms "fiduciary relationship" and "joint venture."
In Arizona the promoters of a corporation stand in a fiduciary relationship to the stockholder investors. Frame v. Mahoney, 21 Ariz. 282, 187 P. 584 (1920). Therefore, a finding that the defendants were promoters is a finding that they occupied a fiduciary relationship with the investors in the venture. Thus there need not be a specific finding by the trial court that a fiduciary duty is present so long as the promoter-investor relationship exists.
The appellants further argue that the imposition of a resulting trust is improper in this case because there was no finding of a fiduciary and confidential relationship between the parties. We reject this argument inasmuch as we have already determined that there is such a relationship existing. The mere designation of the form of the trust is not controlling; the court will look to the substance of the circumstances and not the labels placed on them by the parties. Nitrini v. Feinbaum, 18 Ariz. App. 307, 501 P.2d 576 (1972); 54 Am.Jur, Trusts, §§ 193, 225, 230.
The final question raised by the appellants pertains to the dischargeability of the debts in the bankruptcy proceeding. The trial court held that the obligations of the appellants were not dischargeable under § 17 of the Bankruptcy Act. 11 U.S.C.A. § 35 (1953). The court held that the judgments were based upon "the deliberate wilful conversion, misappropriation and defalcation of monies while serving and acting in a fiduciary capacity." The applicable subsection of 11 U.S.C.A. § 35(a)(4) reads:
"A discharge in bankruptcy shall release a bankrupt from all of his provable debts, whether allowable in full or in *189 part, except such as ... (4) were created by his fraud, embezzlement, misappropriation or defalcation while acting as an officer or in any fiduciary capacity." [Emphasis added]
We have earlier found there was a fiduciary relationship between the promoters and the Nychyks and we find the trial court had ample evidence for finding that there was a deliberate wilful conversion, misappropriation and defalcation of the Nychyk funds by Johnson and Linder. In our opinion all three of the defendant promoters are in the same legal position and as will be discussed later in the Nychyk cross-appeal, we believe there is no valid legal reason to exempt Green from responsibility.
We therefore hold that the conduct of all three promoters in the handling of the Nychyk funds amounted to a defalcation and a breach of their fiduciary duty which prevents a discharge of their obligations by a release in bankruptcy. See Kadish v. Phoenix-Scottsdale Sports Company, 11 Ariz. App. 575, 466 P.2d 794 (1970).
Although Kadish involved the fiduciary duty of an officer to a corporation, we believe the promoter-investor relationship is analogous since it exists because of the relationship of the parties to one another and gives rise to the creation of a fiduciary relationship for all purposes. For all the reasons heretofore stated, we affirm that portion of the trial court's decision which granted judgment in favor of Nychyk against the Johnsons and Linders.
CROSS-APPEAL
Nychyk files this cross-appeal alleging judgment should have been rendered in his favor against the Greens for the Nychyk funds wrongfully used by Wesley G. Green for his personal living expenses. As stated earlier in this opinion it is our belief that all three promoters were in the same legal position and owed the same fiduciary duties to the investor Nychyk. It was the agreement of the parties that Nychyk was to invest $60,000.00 for 25 percent of the stock. Johnson, Linder and Green were to receive the remaining 75 percent of the stock for performing the necessary work to open the theater. Green admitted that the $60,000.00 invested by Nychyk was to cover the cost of the lease and capital improvements for the theater. There was never any agreement or proper authorization for Green to use any of these funds for his private living expenses. Green could not logically have his share of the stock and also claim a right to use $9,000.00 of Nychyk's money for a salary to cover his living expenses.
It is a general proposition of law that, absent an agreement to the contrary, the promoters of a venture must bear the expenses and losses of the venture and refund the contributions of investors if the venture is abandoned. Alkire v. Acuff, 134 Okl. 43, 272 P. 405 (1928); 1 Fletcher on Corporations, §§ 220-221; 18 C.J.S. Corporations §§ 136-145; 18 Am.Jur.2d, Corporations, §§ 114-118.
We therefore reverse that portion of the decision denying Nychyk a judgment against Green and direct the trial court to enter judgment in favor of Nychyk and against Wesley G. Green and Susan Green, his wife, for the sum of Nine Thousand Dollars ($9,000.00), together with interest accrued thereon.
DONOFRIO, P.J., and STEVENS, J., concur.
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197 F.3d 287 (7th Cir. 1999)
Michael R. Damerville, Petitioner-Appellant,v.United States of America, Respondent-Appellee.
No. 98-1057
In the United States Court of Appeals For the Seventh Circuit
Submitted October 13, 1999Decided November 23, 1999Rehearing Denied Dec. 23, 1999
Appeal from the United States District Court for the Western District of Wisconsin. No. 97 C 619--Barbara B. Crabb, Judge.
Before Posner, Chief Judge, and Ripple and Kanne, Circuit Judges.
Per Curiam.
1
Federal inmate Michael Damerville believes that a footnote in the Supreme Court's opinion in United States v. LaBonte, 520 U.S. 751 (1997), stands for the proposition that a criminal defendant cannot be sentenced as a career offender under U.S.S.G. sec. 4B1.1 unless the government has complied with the procedural requirements of 21 U.S.C. sec. 851. We write today only to clarify why Damerville is wrong.
2
Damerville pleaded guilty to a one-count indictment charging that, while he was incarcerated in the Federal Correctional Institution at Oxford, Wisconsin, he conspired to distribute marijuana in violation of 21 U.S.C. sec.sec. 846 and 841(a)(1). On the basis of two prior drug trafficking convictions, the probation office recommended and the district court imposed a "career offender" sentence under U.S.S.G. sec. 4B1.1. The application of sec. 4B1.1 increased Damerville's sentencing range from 10 to 16 months under the otherwise-applicable guidelines, to 77 to 96 months under the career offender guideline. Damerville objected to the proposed career offender status on the ground that his two previous convictions were related and therefore insufficient to warrant application of sec. 4B1.1. The district court rejected this argument, and Damerville abandoned it on direct appeal. He now attempts to collaterally challenge his career offender sentence through a motion under 28 U.S.C. sec. 2255. He argues that, because he was not given notice of the application of sec. 4B1.1 in the precise manner dictated by 21 U.S.C. sec. 851, he should not have been subject to the career offender sentence. In support of this argument, he points to language in footnote 1 of LaBonte, 520 U.S. at 754 n.1.
3
In LaBonte, the Supreme Court clarified the meaning of Congress's directive in 28 U.S.C. sec. 994(h) that the United States Sentencing Commission assure that three-time offenders are sentenced at or near the "maximum term authorized." The Commission attempted to implement this directive via sec. 4B1.1, but the language of the original version of the guideline did not specify whether applicable statutory sentence enhancements should be included in defining the "maximum term authorized." In 1994, the Commission adopted Amendment 506 to sec. 4B1.1 to clarify that statutory enhancements should not be included. The Supreme Court held in LaBonte, however, that Amendment 506 was inconsistent with sec. 994(h)'s directive and that "maximum term authorized" must be read to include all applicable statutory sentence enhancements. Id. at 753.
4
In reaching this result, the Supreme Court observed that, as initially drafted, sec. 4B1.1 and its accompanying commentary had failed to specify "which 'maximum term' was to be used when federal law established a basic statutory maximum for persons convicted of a particular offense, but also provided an enhanced maximum penalty for career offenders convicted of that same offense." Id. at 754. In a footnote to this passage, the Court commented:
5
We note that imposition of an enhanced penalty is not automatic. Such a penalty may not be imposed unless the Government files an information notifying the defendant in advance of trial (or prior to acceptance of the plea) that it will rely on that defendant's prior convictions to seek a penalty enhancement. 21 U.S.C. sec. 851(a)(1). If the government does not file such notice, however, the lower sentencing range will be applied even though the defendant may otherwise be eligible for the increased penalty.
6
Id. at 754 n.1. Damerville argues that this footnote specifically extends the procedural requirements of sec. 851, which literally apply only to statutory recidivism enhancements for specified drug offenses under 21 U.S.C. sec. 841(b), to the application of the career offender guideline under sec. 4B1.1.
7
The procedures set forth in sec. 851, including the requirement that the government file an information specifying that it will seek an enhancement, are statutory requirements that attach only to sentence enhancements under sec. 841(b). The sec. 841(b) enhancements increase the statutory maximum penalties based on prior drug convictions, and in order for a guilty plea to be informed, the defendant must know what the maximum penalty is under the applicable statute. In contrast, an informed guilty plea does not require that the defendant know where the sentence will fall under the guidelines. Compare United States v. Padilla, 23 F.3d 1220, 1221-22 (7th Cir. 1994) with United States v. Knorr, 942 F.2d 1217, 1220 (7th Cir. 1991). Accordingly, we have reiterated on several occasions that defendants who, like Damerville, are subject to sentencing as career offenders under sec. 4B1.1 are not entitled to the same procedural protections as defendants subject to the sec. 841(b) penalty enhancements. See, e.g., United States v. Jackson, 121 F.3d 316, 319 (7th Cir. 1997); United States v. Robinson, 14 F.3d 1200, 1206 (7th Cir. 1994); United States v. Price, 988 F.2d 712, 722 (7th Cir. 1993); United States v. Koller, 956 F.2d 1408, 1417 (7th Cir. 1992). Almost every other circuit has considered the issue and likewise concluded that the filing of an enhancement information before entry of a guilty plea, while mandated by sec. 851 to trigger enhancement under sec. 841(b), is not a prerequisite when the government seeks career offender sentences under the guidelines. See United States v. Foster, 68 F.3d 86, 89 & n.2 (4th Cir. 1995) (collecting cases).
8
Damerville argues that footnote 1 of LaBonte overturns this entire line of precedent. But his interpretation of the footnote is flawed. He assumes that the footnote's statement that the notice requirements of sec. 851 must be met before imposition of an enhanced penalty pertains to the textual discussion of the career offender guideline. The proper reading of this text reveals, however, that the observations in the footnote in fact refer to the discussion of the statutory increased maximum penalty. The phrase "enhanced penalty" in footnote 1 also mirrors the phrase "enhanced maximum penalty" in the second clause of the footnoted sentence. Thus, the footnote merely reiterates that an enhanced penalty under sec. 841(b) cannot be imposed without the procedural protections described in sec. 851. It does not contradict the precedents holding that the statutory requirements of sec. 851 do not apply to career offender sentences under U.S.S.G. sec. 4B1.1.
9
To the extent that Damerville argues due process mandates the sec. 851 procedures, we disagree. Due process demands only that adequate procedures be employed in determining when to include prior convictions in increasing a sentence. Procedures satisfy the requirements of due process by providing the defendant with "reasonable notice and an opportunity to be heard regarding the possibility of an enhanced sentence for recidivism." United States v. Belanger, 970 F.2d 416, 418 (7th Cir. 1992) (citing Oyler v. Boles, 368 U.S. 448, 452 (1962)). Although Federal Rule of Criminal Procedure 32 is not as specific as sec. 851, it furnishes adequate due process protections to defendants subject to sec. 4B1.1 by providing notice and an opportunity to be heard in the form of a presentence investigation report. See Burns v. United States, 501 U.S. 129, 133-34 (1991). In Damerville's case, the probation officer recommended in the presentence investigation report that Damerville be sentenced as a career offender under sec. 4B1.1. Damerville's counsel responded with two pages of written objections, which he reiterated and defended at length at the sentencing hearing. At no time did counsel file a request for a continuance or in any way contest his ability to challenge the application of sec. 4B1.1. Thus, the requirements of due process, that Damerville receive notice and an opportunity to be heard, were met in this case.
10
AFFIRMED.
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75 B.R. 287 (1987)
In re Nadir Erbesler KING, Bouquet Erbesler King, Debtors.
Bankruptcy No. 2-86-01503.
United States Bankruptcy Court, S.D. Ohio, E.D.
February 25, 1987.
*288 David G. Korn, Columbus, Ohio, for debtors.
Richard J. Welt, Columbus, Ohio, for General Motors Acceptance Corp.
Thomas C. Scott, Thompson, Hine and Flory, Columbus, Ohio, Chapter 7 Trustee.
OPINION AND ORDER ON APPLICATION FOR REDEMPTION
B.J. SELLERS, Bankruptcy Judge.
This matter is before the Court upon an application filed by Nadir and Bouquet King seeking to redeem a 1979 Chrysler New Yorker pursuant to 11 U.S.C. § 722. The application was opposed by General Motors Acceptance Corporation ("GMAC") and was heard by the Court.
The Court makes the following findings of fact. Nadir King ("the debtor") owns a 1979 Chrysler New Yorker ("the Chrysler") which, according to the certificate of title, was purchased on March 8, 1985 for $3,535. On April 18, 1986 the debtor and his wife filed a joint petition under the provisions of Chapter 7 of the Bankruptcy Code. The schedule of creditors filed in their case included GMAC for an obligation evidenced by a note remaining unpaid in the amount of $1,943.20. In connection with that obligation, the debtor granted GMAC a security interest in the Chrysler, and GMAC's lien is noted on the certificate of title for the vehicle. On August 18, 1986 the debtor filed his application to redeem the Chrysler, and while that application was pending, the debtors' discharge was issued by the Court.
The debtor's application, as initially filed, seeks to redeem the Chrysler from GMAC's lien by making a $500 lump sum payment to the creditor. The amount of that proposed redemption payment was orally reduced to $200 during the hearing. The decrease in the debtor's opinion of the Chrysler's value from the $2500 amount reflected in the bankruptcy schedules to the $200 figure currently proposed is attributed to events occurring after the bankruptcy filing. GMAC contests not only the *289 value attributed to the Chrysler by the debtor, but also the appropriateness of using the date of the redemption request or the date of the hearing on that request as the relevant date for determining the value of the vehicle. GMAC's position is that redemption pursuant to 11 U.S.C. § 722 can be accomplished only if the lienholder receives the value of its collateral as of the date the bankruptcy petition was filed.
The legal issues before the Court are two-fold: determination of the date for measuring the value of the creditor's collateral for purposes of redemption in a pending Chapter 7 bankruptcy case, and adoption of the appropriate standard for such valuation. Once those legal issues have been resolved, the Court will find, as a matter of fact, the value of the Chrysler.
A debtor's right to redeem collateral under the Bankruptcy Code is governed by 11 U.S.C. § 722 which states:
An individual debtor may, whether or not the debtor has waived the right to redeem under this section, redeem tangible personal property intended primarily for personal, family, or household use, from a lien securing a dischargeable consumer debt, if such property is exempted under section 522 of this title or has been abandoned under section 554 of this title, by paying the holder of such lien the amount of the allowed secured claim of such holder that is secured by such lien.
It is not contested in this case that the Chrysler is tangible personal property upon which GMAC has a lien. It also has been established by evidence that the vehicle is used primarily for the debtors' personal or family use. It is unchallenged that whatever obligation remains owing to GMAC on the underlying note in excess of the value of the Chrysler has been discharged, and that neither the debtor nor his wife have any post-bankruptcy personal liability thereupon. The dispute, however, centers upon the additional statutory requirement that the debtor pay GMAC, as the holder of the lien, the amount of its allowed secured claim.
Determination of the amount of an allowed secured claim is governed by 11 U.S.C. § 506(a) which states in pertinent part:
(a) An allowed claim of a creditor secured by a lien on property in which the estate has an interest, . . . is a secured claim to the extent of the value of such creditor's interest in the estate's interest in such property, . . . Such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor's interest.
GMAC's claim in this case, $1,943.20, is the amount asserted to be owing on the underlying note for which the Chrysler serves as security. That claimed amount, pursuant to 11 U.S.C. § 502(a), is deemed allowed unless objected to during the case. A debtors' request to redeem collateral, however, challenges the extent of that claim which will be allowed as secured for the limited purpose of redemption.
Valuation of security in the bankruptcy context within the meaning of § 506(a) is a flexible concept which varies with the purpose for which the valuation is intended. Where the focus is retention of an asset, the valuation process should be consistent with the policy underlying such retention. This Court believes that redemption is provided to enable a debtor, who has the ability to make a lump sum payment, to retain consumer goods which will enable him to implement his fresh start, free from burdensome debt, but equipped with necessary goods. At the same time, the right granted to the debtor to fulfill that purpose must preserve the constitutionally protected property rights of the secured creditor.
Property rights, protected in this country primarily through the substantive due process concepts of the Fifth Amendment to the United States Constitution, include the ability of a secured creditor to repossess and sell its security pursuant to an underlying agreement governed by state law. When a bankruptcy case is filed, exercise of that right is constitutionally delayed until *290 the automatic stay against such action is lifted by specific order, the discharge is granted or denied, or the case is dismissed or closed. Continental Illinois National Bank & Trust Co. v. Chicago, Rock Island & Pacific Ry. Co., 294 U.S. 648, 55 S.Ct. 595, 79 L.Ed. 1110 (1935); 11 U.S.C. § 362(c). However, that relief does not occur simultaneously with the filing of the case, and, realistically, the secured creditor incurs significant delay before it is able to exercise its right to recover and dispose of its collateral. It follows, therefore, that only the value of the collateral, measured by its return on the date of that disposition, is effectively protected as a property right. See Report of the Commission on the Bankruptcy Laws of the United States, H.Doc. 93-137, Part II, 131 (1973) ("Commission Report"). Consistent with that reality, the date selected for valuation in a redemption context should be the date which most accurately establishes the same value the creditor would realize had it obtained relief from the stay and abandonment of its collateral from the bankruptcy estate and then proceeded to liquidate that collateral.
Absent objection to the redemption process which requires additional time for hearing before the Court, § 521(2) of Title 11 specifically requires a debtor to exercise his stated intention of redeeming collateral within approximately 75 days after filing his petition in bankruptcy. In the typical Chapter 7 bankruptcy case that time period is comparable to the time it takes for a secured creditor to become aware of the bankruptcy filing, to file its motion for required relief, and to repossess and initiate the process of selling its collateral.
Based upon the foregoing, the Court finds that the later of the date upon which a debtor files his request seeking to establish the amount required to redeem specific collateral or the date upon which such a request, if contested, is heard by the Court, is the relevant date for determining the value of collateral sought to be redeemed. Depreciation or appreciation subsequent to the bankruptcy filing date bears upon the debtor's determination of the feasibility and continuing existence of his desire for redemption and, therefore, that factor is properly reflected in the value ascribed to the secured claim. That rule may be varied, however, if the creditor is able to show undue delay, gross negligence or other acts of the debtor which have unfairly decreased the collateral's value. Pierce v. Industrial Savings Co. (In re Pierce), 5 B.R. 346 (Bankr.D.Neb.1980).
Having determined the reference date for valuation, the Court must next determine the appropriate standard to be used for valuing collateral for purposes of redemption. Is that value, as suggested by the Commission Report, the net amount the creditor would be able to apply to its obligation following liquidation of the collateral, or is that value better measured by other delineated standards such as the amount owing or loan, wholesale, liquidation, fair market, retail, or replacement values? Does the standard also depend upon whether the creditor lienholder is in the business of reselling or liquidating goods of the same type? Are some of these "values" different in label, but identical in result?
The language in § 506(a) makes it clear that redemption under the Bankruptcy Code differs from redemption under the Uniform Commercial Code, as enacted in Ohio, in that the Bankruptcy Code's measure is independent of the amount of the debt. Compare Ohio Rev.Code § 1309.49 (Page 1979) with 11 U.S.C. § 506(a). It may be helpful, therefore, to examine the standard used to value collateral in the analogous situation of payment pursuant to 11 U.S.C. § 1325(a)(5) in a Chapter 13 Plan. That standard, determined by reference to what would be obtainable upon a commercially reasonable sale, permits consideration of the age, condition and nature of the particular collateral. In re Damron, 8 B.R. 323 (Bankr.S.D.Ohio 1980). Application of that rule generally produces "a middle ground between distressed sale valuation and retail valuation." Damron at 326. Absent evidence of deliberate depreciation, that standard is also consistent with the legislative history of § 722. See S.Rep. No. 95-989, 95th Cong. 2nd Sess. 95 *291 (1978), U.S.Code Cong. & Admin.News 1978, p. 5787.
The value obtainable upon a commercially reasonable sale of necessity contemplates reduction of the gross sales price to reflect costs, including necessary repairs, required to produce the sale. That value, however, does not contemplate the circumstances of an auction or forced distressed sale unless the collateral could not be disposed of in any other manner. Such measure also accommodates the consideration of other factors such as the particular position of the creditor and its market access. It hypothesizes a seller similarly situated to the lienholder and a buyer similarly situated to the Chapter 7 debtor. Catholic Credit Union v. Siegler (In re Siegler), 5 B.R. 12 (Bankr.D.Minn.1980). That redemption payment standard, therefore, is not identical to any of the previously enumerated standards. Siegler at 14.
Upon application of the standard of a commercially reasonable sale, where the seller is the financing arm of a car manufacturer and the debtor is an individual without unusual connections in the car industry, the Court finds that the value of the Chrysler is $600. That finding is based upon examination of the present book values of the vehicle as testified to by GMAC's representative, the debtor's own opinion testimony, consideration of the cost of needed repairs which are alleged to have caused the decline in the vehicle's value since the bankruptcy was filed, and the scheduled value asserted by the debtor when his bankruptcy case was filed in April, 1986. Because of the lack of qualification of GMAC's unavailable agent as an expert and the objection on that basis by GMAC, that appraisal opinion was not considered.
Based upon the foregoing, the debtor's application to redeem the 1979 Chrysler liened to GMAC is sustained upon the debtor's tender to GMAC of $600 within thirty (30) days of the date of the entry of this order.
IT IS SO ORDERED.
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977 F.Supp. 202 (1997)
Melissa HILLER, Ryan Sefton, Robert Ethridge, Robert Hogan, and Ryan Duryee, Plaintiffs,
v.
COUNTY OF SUFFOLK, Suffolk County Police Department, Police Commissioner Peter Cosgrove, Suffolk County Executive Robert Gafney, Defendants.
No. 95-CV-4496 (JS).
United States District Court, E.D. New York.
September 25, 1997.
John Ray, John Ray & Associates, Miller Place, NY, for Plaintiffs.
Theodore Sklar, Deputy Suffolk County Attorney, Hauppauge, NY, for Defendants.
MEMORANDUM AND ORDER
SEYBERT, District Judge.
Pending before the Court is defendants' motion for summary judgment and plaintiffs' *203 cross-motion for summary judgment and for a hearing on damages. The genesis of this controversy began fourteen years ago, when the United States Department of Justice called into question Suffolk County's hiring practice for police officers. In the interim, Suffolk County (the "County") has attempted to address these concerns through specially designed examinations, and numerous recruitment efforts and yet, the questions remain. The discrete issue before the Court, the resolution of which will not arrest this longstanding battle for a badge, is whether one such effort went too far, and in so doing, violated the constitutional rights of other police applicants.
BACKGROUND
On November 3, 1995, plaintiffs commenced the instant action asserting claims against the defendants for violations of 42 U.S.C. § 1983, Title VII of the Civil Rights Act of 1964 and § 296 of the New York Executive Law. Specifically, plaintiffs Melissa Hiller, Ryan Sefton, Robert Etheridge, Robert Hogan and Ryan Duryee assert that they have been discriminated against on the basis of race and color as the result of an affirmative action program instituted by the Suffolk County Police Department (hereinafter "SCPD"). The challenged program is commonly known as the Suffolk County Police Cadet Program and excludes non-minorities from admission into, and the benefits of, the program in favor of black and Hispanic people.
1. DEPARTMENT OF JUSTICE CONSENT DECREE
In 1983, the United States of America filed an action alleging that the County was engaged in a pattern or practice of employment discrimination against women, blacks and Hispanics with respect to job opportunities in the SCPD. Specifically, the complaint alleged that just 59 of 2,580 sworn officers, or 2.3%, were Black or Hispanic and that only 25 or 0.9% were women. Exhibit C, ¶ 14, at 4.[1] The United States alleged that the County's policies and practices discriminated because (1) the County failed to "recruit, hire, assign and promote women, Blacks and Hispanics on an equal basis with white Anglo males;" (2) the standards in hiring and promoting in the SCPD have a "disproportionately adverse impact" on women, Blacks and Hispanics; (3) the County did not establish objective standards to prevent this discrimination; and (4) the County failed to take proper steps to "correct the present effects of past discriminatory policies and practices." Exhibit C at 5-6. The County answered that suit by specifically denying that it had done any of the acts alleged by the United States. Exhibit D. On September 12, 1986, the County and the United States settled the action by executing a Consent Decree entered by the Honorable Eugene H. Nickerson.[2] Exhibit E. It *204 has been brought to the Court's attention that the Department of Justice has continued to investigate the hiring, promotion, and disciplinary practices of the SCPD.
2. RESULTS DESIRED WERE NOT ACHIEVED
In 1993, the SCPD concluded that despite its efforts under the 1986 Consent Decree, which included a massive recruitment effort and the administration of two open competitive examinations validated in accordance with the 1986 Consent Decree, it failed to realize a true representation of the minority community in the County. Exhibit G. In view of its conclusion that blacks and Hispanics were under-represented in the Department, the SCPD advised the Justice Department that it was creating the Cadet Program at issue here. The memorandum indicated that the program was designed to augment the diversification of the SCPD and to benefit the disadvantaged groups identified in the consent decree. The Justice Department apparently did not reply.
3. THE CADET PROGRAM
The Police Cadet Program essentially selected black and Hispanic candidates only, who were then required to complete a two-year criminal justice degree program, tuition-free, at Suffolk County Community and to work for the SCPD in the title of Police Service Aide[3] for $10 per hour. On or about June 8, 1996, the Cadets were administered the Suffolk County Police Officer examination. Although identical in all respects to the open competitive examination for Suffolk County Police Officer given the same day, the Cadet examination was denominated a promotional examination. As per the terms of the Cadet Program, a passing grade entitles the Cadet to a "promotion" to the rank of Police Officer. This means that all qualified Police Cadets will be considered for appointment before any other candidate on the eligible list, irrespective of examination *205 grade. Hartvik affidavit, ¶ 12, at 3. Accordingly, the Cadets are ensured seniority and earlier receipt of various other benefits as police officers.
There were initially 43 candidates accepted for the program, 31 sat for and passed the examination and currently 29 Police Cadets remain in the program. For reasons unrelated to this matter, no appointments have been made from either the promotional or the open competitive list for Police Officer.
4. THE PLAINTIFFS' APPLICATIONS
There is no dispute that each of the plaintiffs applied for the program in 1994, and it appears that all parties agree that each plaintiff was rejected because they are not black or Hispanic. The County informed each plaintiff in writing that their applications had been "reviewed with great care and, of course, complete objectivity" and that the reason for their rejection was "based on information [the applicant] supplied in the application packet and on the results of various examinations." Plaintiffs' Complaint, ¶¶ 30, 55, 79, 102, 127; see Plaintiffs' Exhibit A, attached to Plaintiffs' Memorandum of Law (a letter to plaintiff Sefton of June 1, 1994, which is identical to letters given to other Plaintiffs). None of the plaintiffs, however, were asked to submit to any examination, and obviously, the letters never mentioned that the only reason plaintiffs were rejected was because they were not black or Hispanic.
Each of the Plaintiffs filed discrimination complaints with the EEOC in 1994 and early 1995, respectively. (Plaintiffs' Complaint, paragraph 1). After receiving "Right to Sue" letters from the U.S. Justice Department, plaintiffs commenced the instant action on November 3, 1995.
5. SCPD'S PAST EFFORTS TO ACHIEVE DIVERSITY
Prior to creating the Cadet Program, the County had already taken significant strides towards achieving racial diversity and fully complied with the requirements of the Consent Decree, including the mandated recruitment provisions. The recruitment drive did achieve a significant increase in minority applicants, unfortunately, the ultimate results did not measure up to the efforts. Pursuant to the Consent Decree, the County retained RBH, a consulting firm, to develop, administer, and grade the 1988, 1992, and 1996 police officer examinations. In spite of these efforts, the number of minorities hired as a result of the 1988 and 1992 examinations did not significantly approach the established targets.
DISCUSSION
Pending before the Court are motions for summary judgment by all parties. Pursuant to Federal Rule of Civil Procedure 56(c), courts may not grant a motion for summary judgment unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." The burden of proof is on the moving party to show that there is no genuine issue of material fact, Gallo v. Prudential Residential Servs., L.P., 22 F.3d 1219, 1223 (2d Cir. 1994) (citing Heyman v. Commerce & Indus. Ins. Co., 524 F.2d 1317, 1320 (2d Cir.1975)), and "all ambiguities must be resolved and all inferences drawn in favor of the party against whom summary judgment is sought." Id. (citing Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 249 (2d Cir.1985), cert. denied, 484 U.S. 918, 108 S.Ct. 269, 98 L.Ed.2d 226 (1987)). "Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A party opposing a motion for summary judgment "`may not rest upon the mere allegations or denials of his pleading, but ... must set forth specific facts showing that there is a genuine issue for trial.'" Id. at 248, 106 S.Ct. at 2510 (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89, 88 S.Ct. 1575, 1592, 20 L.Ed.2d 569 (1968)). Under the law of the Second Circuit, "when no rational jury could find in favor of the nonmoving party because the evidence is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper." Gallo, 22 F.3d at 1224 (citing Dister v. Continental Group, *206 Inc., 859 F.2d 1108, 1114 (2d Cir.1988)). In the instant action, the parties agree that there are no material issues of fact in dispute and that the Court should decide the action as a matter of law; the Court concurs.
The Cadet Program, as established, constitutes de jure discrimination and is directly violative of the express terms of the 1986 Consent Decree because employment decisions were not made on a "non-discriminatory basis without regard to an applicant's or an employee's race, sex or national origin." The failure to consider non-minority applicants was an employment decision made on a discriminatory basis. The Cadet Program is a practice with respect to the recruitment or hire of applicants which has both the purpose and effect of "discriminating unlawfully on the basis of sex, race or national origin."
The Suffolk County Police Department Cadet Program indisputably rejected applicants based solely on the color of their skin. All racial classifications imposed by a governmental actor must be analyzed by a reviewing court under strict scrutiny. Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 227-29, 115 S.Ct. 2097, 2113, 132 L.Ed.2d 158 (1995). "To pass a strict scrutiny review, the government's racially motivated actions, must serve a compelling governmental interest, and must be narrowly tailored to further that interest." Id.
The Court first considers whether the Cadet Program is justified by a compelling state interest, that is, whether the County "had a strong basis in evidence for its conclusion that remedial action was necessary." Wygant v. Jackson Board of Education, 476 U.S. 267, 277, 106 S.Ct. 1842, 1849, 90 L.Ed.2d 260 (1986). Achieving diversity is not a sufficiently compelling state interest. See Adarand, 515 U.S. at 225-27, 115 S.Ct. at 2112; Wygant, 476 U.S. at 274, 106 S.Ct. at 1847. Rather, there must be some "showing of prior discrimination by the governmental unit involved before allowing limited use of racial classifications in order to remedy such discrimination." Wygant, 476 U.S. at 274, 106 S.Ct. at 1847. "The use of statistical evidence, where gross statistical disparities can be shown, may constitute prima facie proof of a pattern or practice of discrimination, however, when special qualifications are required to fill particular jobs, comparisons to the general population may have little probative value." City of Richmond v. J.A. Croson Co., 488 U.S. 469, 501, 109 S.Ct. 706, 726, 102 L.Ed.2d 854.
Here, however, it is not necessary for the Court to find a showing of past discrimination sufficient to satisfy a compelling governmental interest because the Cadet program is not narrowly tailored. To determine whether race conscious remedies are narrowly tailored, the Court applies the factors enunciated in United States v. Paradise, 480 U.S. 149, 107 S.Ct. 1053, 94 L.Ed.2d 203 (1987). These include: (1) the necessity for the relief; (2) the efficacy of alternative remedies; (3) the flexibility and duration of the relief, including the availability of waiver provisions; (4) the relationship of the numerical goals to the relevant labor market; and (5) the impact of the relief on the rights of third parties. Id., 480 U.S. at 171, 107 S.Ct. at 1066.
In deciding whether the Cadet Program was necessary, the Court takes notice of the good faith efforts by the County to comply with the 1986 Consent Decree, however, it also notes that the Cadet Program was a voluntary undertaking by the County. It was not established under the direction of a court order nor was it pursuant to the express terms of the Consent Decree, rather, it contravened the express terms of the Consent Decree in its attempt to satisfy the Decree's goals. Moreover, the inclusion of a college degree and part time employment as part of the Cadet Program has not been shown to directly foster the qualifications and appointment of minorities as police officers. A college degree is not a necessary requirement for employment as a Suffolk County Police Officer.
Additionally, there is no evidence in the record to suggest that all other alternative measures were evaluated and properly passed over. The recruitment efforts succeeded in increasing the number of minority applicants and there are other remedies available to increase minority exam performance *207 absent an unqualified preference. The Cadet Program does not satisfy the first element of necessity, nor the second element of the efficacy of alternative remedies.
The element of flexibility considers whether a waiver exists when sufficient number of qualified minorities are not available for hire. The Police Service Aides, in passing the same examination which qualifies all candidates for consideration of appointment, met the minimal threshold, and thereby satisfied the flexibility standard. However, continuation of the Cadet Program until the goals of racial balance are achieved would constitute an unreasonable duration of at least nine years. See Local 93, Int'l Ass'n of Firefighters v. City of Cleveland, 478 U.S. 501, 512, 106 S.Ct. 3063, 3070, 92 L.Ed.2d 405 (1986). This period would be further extended by the attrition of minority police officers and the potential that Police Cadets would not successfully complete the program.
The fourth factor is the relationship of the numerical goals to the relevant labor market. The Court finds that the statistics provided may not have accurately assessed the percentage of the labor force that would satisfy the additional qualifications needed to be appointed as a Suffolk County Police Officer, instead, the figures utilized reflected the minority percentage of the general population in the geographical areas from which the examination historically draws who were in the proper age range. There are additional educational, physical, medical, psychological and background requirements that were not considered, and therefore, the statistics provided have little probative value. Educational and sociological factors, among others, contribute to examination performance. A statistical deviation in a group's participation and success rate on an examination, does not constitute prima facie discrimination.
Finally, the impact on the rights of third parties is attenuated and diffused to a considerable extent among society generally. And although the impact is not as intrusive as a loss of an existing job, this does not rescue an otherwise unconstitutional program. In totality, a weighing of the factors dictates the conclusion that the Cadet Program was not a narrowly tailored remedy.
CONCLUSION
As the Court finds that the Suffolk County Police Department Cadet Program discriminated on the basis of the applicants' race and did not pass the strict scrutiny test required of all racially motivated governmental programs, it is axiomatic that this discriminatory hiring practice also violates 42 U.S.C. § 1983, Title VII of the Civil Rights Act of 1964 and § 296 of the New York Executive Law.
For the foregoing reasons and the reasons stated on the record, the Court denies the defendants' motion for summary judgment and grants the plaintiffs' motion for summary judgment.
The parties are ordered to brief the issue of whether, and to what extent, the plaintiffs are entitled to damages. The plaintiffs shall submit to the Court a briefing schedule in accordance with my individual rules.
SO ORDERED.
NOTES
[1] References are to Exhibits annexed to the declaration of Theodore D. Sklar, attached to Defendants' Notice of Motion.
[2] The 1986 Consent Decree contains a number of provisions pertinent to the instant action as summarized herein. The County expressly denied engaging in a pattern or practice of discrimination against women, blacks or Hispanics as alleged by the United States. The County did state that an inference of discrimination may arise from (1) certain of its selection criteria for hire into and assignment within the SCPD, (2) certain of the SCPD's personnel practices, and (3) the existence of a substantial disproportion between the percentages of women, blacks and Hispanics in the SCPD as compared to the percentages of women, blacks and Hispanics within the relevant labor market.
The County entered into the Decree to avoid "the burden, expense and uncertainty of further contested litigation and ... [to eliminate] any disadvantage to women, blacks and Hispanics that may have resulted from any past practice with respect to job opportunities in the SCPD." The Decree "shall constitute neither an admission by the County nor an adjudication by the Court on the merits of the allegations of the United States."
The purpose of the Decree was "to ensure that women, blacks and Hispanics are considered for employment by Suffolk County in the SCPD on an equal basis with white males, and that all employment decisions with respect to the SCPD shall be made on a non-discriminatory basis without regard to an applicant's or an employee's race, sex or national origin. In furtherance of this purpose, Suffolk County shall in good faith undertake to employ increased numbers of qualified women, blacks and Hispanics in all sworn ranks and non-sworn positions within the SCPD in accordance with their respective interest in and ability to qualify for such employment under non-discriminatory selection procedures and criteria." Moreover, "the achievement of this objective [would be] facilitated by a process free of unlawful barriers to entry and by a substantial increase in recruitment efforts directed toward women, blacks and Hispanics." Additionally, the Decree provided that "Suffolk County ... shall not engage in any act or practice with respect to the recruitment or hire of applicants for employment in the SCPD, ... which has either the purpose or the effect of discriminating unlawfully on the basis of sex, race or national origin."
The parties agreed that Suffolk County would establish a new selection procedure for Police Officers that would be lawful under Title VII and that would conform to the Uniform Guidelines on Employee Selection Procedures, 28 C.F.R. § 50.14, 29 C.F.R. Pt. 1607, 31 C.F.R. § 51.53, or successor guidelines. The parties further agreed that RBH, a testing firm, would aid the County in designing new, lawful selection procedures.
Additionally, the Decree provided that Suffolk County would "immediately establish and in good faith implement during the life of the Decree a vigorous recruitment program directed at enhancing the employment opportunities of qualified female, black and Hispanic applicants for the rank of Police Officer in the SCPD. Absent explanation, it is expected that an appropriate recruitment program will attract qualified female, black and Hispanic applicants in numbers which reflect their availability in the relevant labor market."
Significantly, the decree then provided that "failure to attain a particular female, black or Hispanic applicant flow is not itself a violation of this decree." The recruitment efforts provided for in the Consent Decree included advertisements in schools, black and Hispanic communities and churches. The advertisements were (1) to emphasis that the SCPD was active in its recruitment program of women, blacks and Hispanics; (2) to emphasis that it was an Equal Employment Opportunity employer; (3) to summarize Suffolk County Police Department qualifications and various incidental information; and (4) to invite women, blacks and Hispanics to apply for Police Officer appointment. The parties expected "that an appropriate recruitment program [would] attract qualified female, black and Hispanic applicants in numbers which reflect their availability in the relevant labor market."
The United States could conduct an inquiry "as to the County's good faith implementation of the recruitment program and activities required" by the Consent Decree. The County also was entitled to move for a dissolution of the decree at any time after September 12, 1991 if it materially complied with the decree.
There was a subsequent modification to the Consent Decree in 1987 which authorized the hiring of additional Police Officers in exchange for remedial relief for unsuccessful black and Hispanic applicants of the 1984 exam.
[3] This Order uses the terms Police Cadet and Police Service Aide interchangeably.
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221 N.W.2d 722 (1974)
FOREMOST INSURANCE COMPANY, a foreign corporation, Plaintiff and Appellee,
v.
ROLLOHOME CORPORATION, a foreign corporation, Defendant, and
Intertherm, Inc., a foreign corporation, Defendant and Appellant.
Civ. No. 8997.
Supreme Court of North Dakota.
August 30, 1974.
*724 Hjellum, Weiss, Nerison, Jukkala & Vinje, Jamestown, for plaintiff and appellee.
Wheeler, Wolf, Wefald & Durick, Bismarck, for defendant Rollohome Corp.
Wattam, Vogel, Vogel & Peterson, Fargo, for defendant and appellant.
VOGEL, Judge.
This is an appeal from a judgment in an action tried without a jury, in which the district court found in favor of the plaintiff insurance company, as subrogee of the rights of its insured, and against the defendant Intertherm, Inc. The trial court found in favor of the defendant Rollohome Corporation, and the ruling in its favor was not appealed.
Plaintiff's insureds, Mr. and Mrs. Daryl Wileman, purchased from Liechty Mobile Home Sales a mobile home manufactured by Rollohome Corporation. The Wilemans wanted central air conditioning installed, and Liechty purchased a central air-conditioning unit manufactured by Intertherm from a Frank Clark, doing business as Clark's Repair Service, a retailer in such products. At the request of Liechty, Clark installed the air-conditioning unit in the mobile home. It was subject to a warranty for one year. The installation required him to make modifications in the wiring within the main electrical fusebox of the mobile home in order to provide the additional electrical capacity needed to handle the electrical load of the air conditioner. Although he was not a licensed electrician, Mr. Clark rewired the fusebox to install a 220-volt circuit, and installed and wired a fuseholder for this circuit and installed 30-ampere screw-in type fuses in the holder.
The Wilemans soon complained that the air conditioner was not working. Clark investigated and found that one of the 30-ampere fuses in the air-conditioner circuit had blown. He replaced the fuse on several occasions and the Wilemans replaced fuses 15 to 20 times, and eventually Clark substituted new fuseholders containing 40-ampere cartridge fuses. The air conditioner still did not work properly. In early August 1970, Clark called the office of Intertherm at Wichita, Kansas, and spoke to an unidentified employee of Intertherm who advised Clark that the correct fuse for the air conditioner was a 40-ampere fusetron fuse. A fusetron fuse is so constructed as to allow an initial high surge of amperage to pass through the fuse for a short period of time. Clark advised the Intertherm employee that he had no 40-ampere fusetron fuses, and the agent replied that a 50-ampere regular fuse would be equivalent to a 40-ampere fusetron fuse. On August 25, 1970, Clark thereupon replaced the 40-ampere fuses on the air conditioner circuit with 50-ampere fuses. Later the same day, the Wilemans advised him that the air conditioner still was not cooling properly. Clark resolved to call the Intertherm factory again for assistance, but before he was able to do so a fire destroyed the Wileman mobile home, on August 26, 1970. The fire started in the steel fusebox. Plaintiff insurance company paid the Wilemans $10,250 for their property loss due to the fire and brought suit, as subrogor, against Rollohome and Intertherm, alleging strict liability in tort and negligence against Rollohome, and strict liability in tort and negligence of its agent, Frank Clark, against Intertherm.
The court made the following pertinent findings of fact and conclusions of law:
"3.
"That one Frank Clark is engaged on a part-time basis in the business of installing air conditioning units as an independent contractor and in the business of servicing air conditioning equipment under warranty from Defendant Intertherm, Inc. as the designated warranty service representative for Defendant Intertherm, Inc., . . .
"4.
"That Plaintiff issued and had in force and effect its policy No. 2376887 *725 to Daryl Wileman and Judith Wileman of Jamestown, North Dakota, under which policy it afforded fire and extended coverage insurance on a certain mobile home owned by said parties and that on or about the 26th day of August, 1970, a fire caused extensive damage to the said mobile home and its contents, and that Plaintiff was obligated to pay Daryl Wileman and Judith Wileman the sum of $10,250.00 under the insurance policy in effect between the parties.
"5.
". . . that an air conditioner manufactured by the Defendant Intertherm, Inc. was installed in said trailer home by one Frank Clark of Jamestown, North Dakota in July, 1969 at the request and as an agent for Liechty Mobile Homes.
. . . . . .
"7.
"That following the installation of said air conditioner and immediately upon taking possession of said mobile home by the owner thereof, the air conditioner connections resulted in difficulties requiring the enlargement of the fusing system to the air conditioner, and that said difficulties were called to the attention of Frank Clark and Liechty Mobile Homes Sales in 1969; that in 1970 continuing difficulties with the electrical connections for the air conditioner were called to the attention of Frank Clark and Liechty Mobile Homes Sales by the owners of said mobile home and that the fusing system for said electrical connections to the air conditioner were increased by the said Frank Clark from 30 Amps. to 40 Amps. and finally on August 25, 1970 to 50 Amps.,. . . but that the addition of the 50 Amp. fusing system was made by the said Frank Clark at the suggestion of representatives of Defendant Intertherm, Inc.
"8.
"That the said air conditioning unit required an electrical current surge upon starting in excess of the demand for current required by any other appliance located in said mobile home and in excess of the continuing current demand for which the electrical system in said unit were designed by the manufacturer; that continuing use of said air conditioner with said connections and increased fusing systems beyond the normal running current level for which said unit was designed caused a breakdown in the electrical installation in said unit and that said fire was somehow caused thereby.
"9.
"That Intertherm, Inc. and Frank Clark jointly and severally were responsible to Plaintiff for the installation of an article not inherently dangerous but which became dangerous when they failed to use due diligence to see it was fit for the purpose for which it was intended.
"CONCLUSIONS OF LAW
. . . . . .
"2. That the action of Intertherm, Inc., and its agent, Frank Clark, in making the electrical connections to the mobile home for the air conditioning unit and the overloading of said electrical system in the mobile home, and the addition of higher level fusing systems for the air conditioning unit after repeated complaints of electrical difficulties in said unit without engaging the services of a licensed electrician or without notifying the manufacturer of said mobile home, constituted an independent intervening cause, which cause was the proximate cause of the fire which resulted in the damages resulting therefrom.
. . . . . .
*726 "4. The manufacturer of an article not inherently dangerous, but which may become dangerous when put to the use for which it is intended, owed the Plaintiff in this case the duty of employing care, skill and diligence to see that it was reasonably fit for the purpose for which it was intended."
There is much controversy as to whether Clark was at various times an agent of Liechty or of Intertherm, or whether he was an independent contractor. Evidence from which the trial court could conclude that he was an agent of Intertherm included the following: that he was a part-time vendor of Intertherm products as well as those of other manufacturers; that he was a warranty service agent for Intertherm products as well as the products of other manufacturers; that Intertherm issued to buyers of its air conditioners a brochure listing its authorized service agents, including Clark's Repair Service; that Clark made approximately 50 service calls a year in response to requests for warranty service for Intertherm products and billed Intertherm for warranty service work done on such service calls; that Intertherm required him to attend classes periodically to familiarize himself with methods of repair of Intertherm products; that Intertherm periodically sent him materials intended to keep him abreast of changes in product models; and, that when he ran into a problem with warranty service of Intertherm products, he was instructed to call the Intertherm representative at the factory in Wichita, Kansas, for assistance, and that he made such a call in this case.
Clark testified that he had never been authorized by Intertherm to replace fuses or install air conditioning as part of his warranty repair work.
Although the testimony of experts conflicted, the testimony of some of them tended to show that each of the two main fuses of the fusebox at the time of the fire were of 50-ampere capacity; that the fire started at a loose connection where the inlet wire into the fusebox connected with the clipholder for the main fuses; that the air conditioner was built to draw 20.8 amperes when running, but that the initial surge required to start the compressor of the air conditioner was approximately 100 amperes; that the initial surges of the air conditioner as it periodically cycled on caused the loose connection to break down; and that a proximate cause of the fire was the overfusing of the air conditioner circuit which allowed high surges of electrical current to break down the loose connection of the inlet terminal to the main fuse assembly.
The first issue raised by Intertherm on this appeal is whether the finding of the trial court that Clark acted as agent of Intertherm was clearly erroneous. We hold that the evidence outlined above, while conflicting, is sufficient to establish agency. The appellant asserts, correctly, that our cases require "clear and convincing evidence" of agency relationship, citing Tostenson v. Ihland, 147 N.W.2d 104 (N. D.1966); Vaux v. Hamilton, 103 N.W.2d 291 (N.D.1960); and Newman v. Sears, Roebuck & Co., 77 N.D. 466, 43 N.W.2d 411 (1950). We believe the trial court did not err in determining that the evidence meets the standard of these cases and in finding that Clark's apparent authority was broad enough to include the service calls he made and the substitution of heavier fuses.
It is true, as Intertherm asserts, that the trial judge found Clark to be the agent of Liechty in the installation of the air conditioner. However, the court also found that he was the warranty service representative of Intertherm, and found, implicitly, at least, that Clark, acting as the warranty service representative, was the agent of Intertherm in making the service calls at the Wileman residence. We believe this finding is justified by the evidence.
However, the result would not necessarily be different even if Clark were *727 deemed an independent contractor. While the general rule is that one who contracts with an independent contractor is not vicariously liable for the tortious acts of the independent contractor, as Prosser points out, this general rule is subject to so many exceptions that it has become merely a preamble to an enumeration of the exceptions. Prosser, Law of Torts, 4th Ed., p. 468, quoting Pacific Fire Insurance Co. v. Kenny Boiler & Manufacturing Co., 201 Minn. 500, 503, 277 N.W. 226 (1937).
Restatement of Torts 2d, Sections 410 to 429, lists 24 exceptions to the so-called general rule of nonliability of employers of independent contractors.
The Eighth Circuit Court of Appeals, construing North Dakota law, in Schultz & Lindsay Construction Co. v. Erickson, 352 F.2d 425, 435 (CA8 1965), noted that North Dakota has adopted at least one of the exceptions to the general rule:
"It is a fundamental principle of law, requiring no citation of authority, that an employer or contractee is not liable for the torts of an independent contractor.. . . However, the rule is not absolute. It affords no protection to the contractee for injuries caused by the failure of an independent contractor to exercise due care in the performance of work which is inherently or intrinsically dangerous. Restatement, Torts, 2d Ed. § 427; 27 Am.Jur., Independent Contractors, § 39. North Dakota recognized and applied the inherent danger doctrine in the early case of Ruehl v. Lidgerwood Rural Telephone Co., 23 N.D. 6, 135 N. W. 793, L.R.A. 1918C, 1063 (1912). The doctrine was also recognized in Taute v. J. I. Case Threshing Machine Co., 25 N. D. 102, 141 N.W. 134 (1913); and in the more recent case of Newman v. Sears, Roebuck & Co., 77 N.D. 466, 43 N.W.2d 411, 17 A.L.R.2d 694 (1950)."
The California Court of Appeal for the Fifth District took note of the general rule and its exceptions when it said, in Harold A. Newman Co., Inc. v. Nero, 31 Cal.App. 3d 490, 496, 107 Cal.Rptr. 464 (1973):
"It is true that an employer of an independent contractor is ordinarily not liable to third persons for losses attributable to the negligence of the independent contractor; . . . However, the rule is subject to numerous exceptions and has no application where a person, either by contract or law, owes an obligation to another; a person who has assumed the contractual duty to perform a service for another cannot escape his contractual obligation to perform the service in a competent manner by delegating performance to another." [Emphasis supplied.]
The Supreme Court of Oklahoma, in Hudgens v. Cook Industries, Inc., 521 P.2d 813, 815 (Okl.1974), stated:
"Generally, an employer is not liable for the torts of an independent contractor, but there are many exceptions to the rule. The rule in Oklahoma is that a person who performs work through an independent contractor is not liable for damages to third persons caused by the negligence of the [independent] contractor except where the work is inherently dangerous or unlawful or where the employer owes a contractual or defined legal duty to the injured party in the performance of the work. Oklahoma City v. Caple, 187 Okl. 600, 105 P.2d 209, 212 (1940)." [Emphasis supplied.]
In Capitol Chevrolet v. Lawrence Warehouse Co., 227 F.2d 169, 173 (CA9 1955), the Ninth Circuit Court of Appeals stated:
"The second type of exceptions to the general rule stated [re nonliability of employers of independent contractors] is based upon contractual relationships. One who contracts to perform an undertaking is liable to his promisee for the negligence of an independent contractor to whom he delegates actual performance."
*728 See also Dorkin v. American Express Co., 74 Misc.2d 673, 345 N.Y.S. 891; 41 Am. Jur.2d, Independent Contractors, § 37.
Particularly in view of the fact that the air conditioner could not function without electricity (and electricity is inherently dangerous), and in view of the contractual warranty undertaking of Intertherm, we find no error in the determination that the defendant Intertherm is jointly and severally liable for the acts of Clark.
The second claim of error is that the trial court's finding that an act or omission of either Intertherm or Clark was the proximate cause of the fire is clearly erroneous.
As we have indicated, there is expert evidence in the record to the effect that negligence of Clark and Intertherm proximately caused the fire and resulting damage. There also is evidence to the contrary, to the effect that the installation of the larger fuses could not have caused the fire at a point in the wiring preceding the fuses.
The finding of the trial court that overfusing of the air-conditioner circuit proximately caused the ensuing fire is supported by expert testimony to the effect that the overfusing allowed momentary surging of the high-amperage current whenever the air conditioner started operating, and such surging caused the loose connection at the inlet terminal of the fusebox to break down, resulting in temperatures high enough to melt the wiring and start the fire.
It is not our function to provide expertise on technical, nonlegal subjects nor to appraise the credibility of expert witnesses. We cannot say that the finding of the trial court was clearly erroneous.
The third issue presented for review by the appellant is whether the finding of the trial court that Intertherm was independently negligent is clearly erroneous. In view of the expert testimony on the issue of proximate cause, we believe the trial court had the right to conclude that the advice given by the employee of Intertherm, suggesting the use of 50-ampere fuses, was negligent and a proximate cause of the fire. And since we have concluded that Intertherm is liable for Clark's acts, a finding of independent negligence, or lack of it, would not alter the result.
The fourth claim of the appellant is that the trial court decided the case on the theory of liability which was not pleaded by the plaintiff and which never was incorporated into the pleadings by amendment. In support of this allegation, Intertherm points out that the trial court found, in paragraph 8 of its findings, that Intertherm and Clark were jointly and severally responsible to the plaintiff. Clark, of course, was not named as a defendant. The finding that he was jointly and severally responsible with Intertherm is, of course, beyond the issues. Whether Intertherm itself, without reference to the agency relationship with Clark, would be liable is a question we need not decide, since we have determined that it is liable, both on the ground of its principal-and-agent relationship with Clark and the nondelegable nature of the duties imposed upon Clark, even as an independent contractor.
Affirmed.
ERICKSTAD, C. J., and KNUDSON, PAULSON and JOHNSON, JJ., concur.
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388 F.Supp. 935 (1975)
Glenroy A. STREATCH, Plaintiff,
v.
ASSOCIATED CONTAINER TRANSPORTATION, LTD., Defendant.
ASSOCIATED CONTAINER TRANSPORTATION, LTD., Third Party Plaintiff,
v.
CRESCENT WHARF & WAREHOUSE COMPANY, a corporation, Third Party Defendant.
CRESCENT WHARF & WAREHOUSE COMPANY, a corporation, Counter-Claimant,
v.
ASSOCIATED CONTAINER TRANSPORTATION, LTD., Counter-Defendant.
No. CV 74-376-IH.
United States District Court, C. D. California.
January 22, 1975.
*936 Newton R. Brown, Wilmington, Cal., for plaintiff.
Michael D. Dempsey, Lillick, McHose, Wheat, Adams & Charles, Los Angeles, Cal., for defendant and third party plaintiff.
Robert Sikes, North Hollywood, Cal., for third party defendant.
ORDER DENYING DEFENDANT'S MOTION TO DISMISS
IRVING HILL, District Judge.
In this opinion, the Court considers whether a longshoreman who is injured aboard a vessel as a result of an alleged defect in a vehicle furnished by the vesselowner for loading and unloading cargo may assert a claim against the vesselowner for strict liability in tort. The question arises as a result of the Defendant's motion to dismiss the strict liability claim for failure to state a claim upon which relief can be granted. Defendant's principal argument is that a longshoreman's strict liability claim against a vessel is barred by the Longshoremen's and Harbor Workers' Compensation Act Amendments of 1972[1], now codified in pertinent part at 33 U. S.C. § 905(b)(Supp.1972). Counsel inform the Court, and the Court's research confirms, that this is a question of first impression in this country.
The Court holds that a vesselowner may be sued by a longshoreman on a strict liability theory. The Court, however, does not have before it now *937 all the facts which may ultimately be determinative of whether the doctrine of strict liability is applicable to this vesselowner in this case. The Court, therefore, denies Defendant's motion to dismiss, but does so without prejudice to a reconsideration of whether the strict liability claim is appropriate in this particular case, which reconsideration can be had when the parties have fully investigated and developed all of the facts.
The facts now before the Court are taken in part from the allegations of the complaint (which for the purposes of a motion to dismiss are assumed to be true) and in part from fact statements orally made by counsel in the argument of this motion. The facts are these: Plaintiff is a longshoreman employed by a stevedoring company, Crescent Wharf & Warehouse Company. At the time of his injury, Plaintiff, in the course of his duties, was operating a motorized vehicle aboard the vessel "DILKARA" in the Port of San Pedro in this District. The vehicle was designed to load and unload the vessel's cargo of vans. The injury happened because the vehicle's brakes and steering failed, causing the vehicle to crash against a bulkhead.
The vehicle's ownership is not shown in the complaint but the vehicle was maintained and controlled by the vesselowner and carried aboard the vessel from port to port for use in handling the vessel's cargo. On the date of the injury, the vehicle had been provided by the vesselowner to the stevedoring company for use by the latter's employees in unloading the cargo of vans. The vehicle was provided to the stevedoring company "for consideration," which was in the form of a rebate or a reduction from the usual rate for stevedoring services.
Although the facts now before the Court reveal that the vesselowner was not the manufacturer of the vehicle, they do not show whether the vesselowner was in any other way involved in designing or building the vehicle. Nor is there any showing whether the vehicle was specially designed for use on this vessel alone or was designed for general use. The facts also do not reveal the nature of the agreement under which the stevedoring company was allowed to use the vehicle, whether there are similar vehicles that Defendant makes available in connection with the DILKARA or other vessels, or whether there is any other indication (such as use by Defendant of standardized printed license forms in connection with supplying vehicles) that Defendant is engaged in an organized and continuing business relating to cargo vehicles.
In order to rule on Defendant's motion to dismiss the strict liability claim, the Court must consider three issues: (1) whether, even absent the 1972 amendments affecting a longshoreman's rights, a strict liability claim is cognizable by a federal court under federal maritime law; (2) whether the 1972 amendments bar Plaintiff's strict liability cause of action; and (3) whether the vesselowner in this case has the requisite status with regard to the allegedly defective vehicle and the injured longshoreman to render the owner suable on a strict liability theory.
I
Since the Court in this case is exercising its admiralty or maritime jurisdiction, it must first decide whether the common law theory of strict liability for injuries caused by a defective product is or should be a part of federal maritime law.[2] Federal maritime law *938 has been derived mainly from historical admiralty principles as interpreted by the federal courts, and from statutes. But a widely accepted common law principle developed by the state courts can also be drawn into federal maritime law, especially when the principle is not contrary to federal legislation or admiralty law precedents. Cf. Just v. Chambers, 312 U.S. 383, 61 S.Ct. 687, 85 L.Ed. 903 (1941); Igneri v. Cie. de Transports Oceaniques, 323 F.2d 257 (2nd Cir.), cert. den., 376 U.S. 949, 84 S.Ct. 965, 11 L.Ed.2d 969 (1963).
Applying this rule of law, several federal courts, exercising their maritime jurisdiction, have held manufacturers of products liable for defects in manufacture or design. E. g., Sears, Roebuck and Co. v. American President Lines, Ltd., 345 F.Supp. 395 (N.D.Cal. 1971); Montgomery v. Goodyear Tire & Rubber Co., 231 F.Supp. 447 (S.D.N.Y. 1964); Middleton v. United Aircraft Corp., 204 F.Supp. 856 (S.D.N.Y.1960). These holdings enunciate a theory of recovery based on breach of implied warranty, a contracts concept. On analysis, however, it seems to this Court that they are not and could not be contract holdings. It would have been a jurisdictional impossibility to impose contractual liability in these cases since the contracts that would have been at issue were non-maritime. Only maritime contracts can furnish the jurisdictional basis for maritime contract litigation in the federal courts. See Grant Smith-Porter Ship Co. v. Rohde, 257 U.S. 469, 42 S.Ct. 157, 66 L.Ed. 321 (1922); 7 ALR Fed. 502 (1971).
The Restatement of Torts and other authorities have commented that the use of warranty concepts and language in this type of situation is a misnomer, an unfortunate attempt to provide a familiar basis and nomenclature for what is actually a tort theory of strict liability. Cf. Restatement (Second) of Torts § 402A, comment m (1965). Thus, this Court regards the above cited federal cases as precedents for applying strict liability in tort within the federal admiralty jurisdiction. Accord, 7 ALR Fed., supra at 511.
II
Given that strict liability is cognizable under federal maritime law, the Court must next consider whether a longshoreman's strict liability claim against a vessel is nonetheless barred by the Longshoremen's and Harbor Workers' Compensation Act Amendments of 1972. The relevant section reads in part:
"In the event of injury to a person covered under this chapter caused by the negligence of a vessel, then such person . . . may bring an action against such vessel as a third party . . . and the employer shall not be liable to the vessel for such damages directly or indirectly and any agreements or warranties to the contrary shall be void. . . . The liability of the vessel under this subsection shall not be based upon the warranty of seaworthiness or a breach thereof at the time the injury occurred. The remedy provided in this subsection shall be exclusive of all other remedies against the vessel . . .." 33 U.S.C. § 905(b) (Supp.1972) (emphasis added).
The main purpose of the 1972 amendments, of which the above section is a part, was to raise the level of compensation benefits payable to an injured longshoreman by his employer. See H. R.Rep. No. 92-1441, 92d Cong., 2d Sess., U.S.Code Cong. & Admin.News, p. 4698 (1972). During the hearings on the proposed legislation, it became apparent that one of the principal causes of resistance to increasing the level of compensation benefits was the potential *939 additional liability of an employer to indemnify a vessel that had been held liable to an injured longshoreman on a claim of unseaworthiness, whenever the unseaworthy condition was in fact caused by the employer. See H.R.Rep. No. 92-1441, supra; cf. Seas Shipping Co., Inc. v. Sieracki, 328 U.S. 85, 66 S. Ct. 872, 90 L.Ed. 1099 (1946) (extended a vesselowner's obligation of seaworthiness, traditionally owed to seamen, to a longshoreman who is injured while aboard and loading the vessel); Ryan Stevedoring Co., Inc. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956) (permitted the vesselowner to cross-claim the stevedoring company for indemnity where the longshoreman collected against the vessel for an injury in fact caused by the stevedoring company's breach of its obligation to stow the cargo properly and safely). At hearings held in both houses of Congress, the Secretary of Labor pointed out that the ability of vessels to cross-claim the employer constituted a "circuity" of actions that (1) often resulted in much greater liability for the employer than he owed under the then existing compensation schedules, and (2) resulted in expensive litigation that cost the longshoreman much of what he would win and introduced huge inefficiencies into the compensation scheme. Hearings Before the Subcommittee on Labor of the Senate Committee on Labor and Public Welfare on the Longshoremen's and Harbor Workers' Act Amendments of 1972, 92d Cong., 2d Sess. 28-33 (1972); Hearings Before the Select Subcommittee on Labor of the House Committee on Education and Labor on the Longshoremen's and Harbor Workers' Act Amendents of 1972, 92d Cong., 2d Sess. 46-50 (1972).
To overcome the problem, Congress could have eliminated only the ability of vessels to cross-claim the employer, leaving to injured longshoremen their unseaworthiness action against the vessel. But in view of the increase in compensation levels that was to be afforded longshoremen by the amendments, Congress decided to do away with all unseaworthiness claims brought by longshoremen. Congress also thought that eliminating the longshoreman's unseaworthiness claim would be fairer (especially to vesselowners) than eliminating only the vesselowner's right of indemnity.
While eliminating longshoremen unseaworthiness claims, Congress rejected proposals to eliminate a longshoreman's negligence claim against the vessel. The congressional reports indicate a concern for preserving a vessel's negligence liability as an incentive to vesselowners to exercise due care. The House and Senate Reports also both state that the purpose of the amendments was to take away only the longshoreman's special maritime theory of recovery and to leave him in the same position as a non-maritime worker:
"The purpose of the amendments is to place an employee injured aboard a vessel in the same position he would be if he were injured in non-maritime employment ashore . . . and not to endow him with any special maritime theory of liability . . .." H.R.Rep. No. 92-1441, supra at p. 4703; S.Rep. No. 92-1125, 92d Cong., 2d Sess. (1972).
In the context of the longshoreman's rights against the vessel, Congress was dealing with a pre-existing situation in which there were two possible theories of action: negligence and unseaworthiness. In the new act, Congress restated and reaffirmed the liability of the vessel to the longshoreman for negligence (while denying to the vessel a cause of action for indemnity against the longshoreman's employer). Congress, on the other hand, specifically took away the longshoreman's other cause of action, i. e., unseaworthiness. And as if to underscore this taking away, it provided that the longshoreman's negligence remedy would be "exclusive of all other remedies against the vessel." 33 U.S.C. § 905(b) (Supp. 1972).
*940 The Court feels that this language must be read in a way that would be consistent with the clearly expressed intention to put the longshoreman "in the same position" as if he were injured in non-maritime employment ashore. To do so, it is necessary to construe the words "exclusive of all other remedies" to apply only to remedies against the vesselowner qua vesselowner. Other causes of action which the longshoreman might have against the vesselowner based on other theories, which causes of action he would have if similarly injured in non-maritime employment ashore, are not affected. Thus, the Court reads the statute so that longshoremen are able to sue a vessel for strict liability in the same situations in which a non-maritime worker could sue for strict liability. As noted below, to be suable on a strict liability claim, a defendant must be in the business of distributing the allegedly defective product to the public. If a vesselowner is in that business, the cause of action arises against him not qua vesselowner but qua provider of a defective product.
Defendant seizes upon a short sentence in the legislative history as pointing to a contrary result. Both House and Senate Committee Reports state: "The Committee also rejected the thesis that a vessel should be liable without regard to its fault for injuries . . . ." H.R.Rep. No. 92-1441, supra at p. 4702; S.Rep. No. 92-1125, supra. Defendant urges the Court to read this sentence as precluding longshoremen claims of strict liability against a vessel.
Given the pre-existing situation that Congress was dealing with, however, the Court believes that the above quoted sentence is merely an imprecise way of stating that the Committee was proposing to end unseaworthiness liability of a vessel to a longshoreman. It is only an unintended coincidence that strict liability in tort has also sometimes been described as liability of a party "without regard to its fault." Equating the two theories of recovery is not accurate; there are important differences between them. Liability for unseaworthiness is sweeping and unconditional. Vesselowners are liable for injuries resulting from failure to provide a seaworthy vessel, regardless of the nature of the condition or its cause. It has been characterized by the Supreme Court as "a form of absolute duty . . . ." Seas Shipping, supra, 328 U.S. at 95, 66 S.Ct. 872. Strict liability in tort, on the other hand, is not such a broad and absolute liability. For example, it can be asserted only against those who are in the business of distributing the allegedly defective product to the public. Under it, moreover, a defendant is liable only for defects in the design and manufacture of the product and, as further limited by the Restatement, supra, only for defects that render the product unreasonably dangerous.[3]
Thus, it can be argued that strict liability in tort does not fall within the Congressional rejection of the liability of a vessel "without regard to its fault." But the more persuasive argument is the one stated above, i. e., that the language used by the congressional committee was an imprecise synonym for unseaworthiness liability. The language will thus not be construed to bar the instant claim, especially in view of Congress' more precisely stated intention "to place [a longshoreman] injured aboard a vessel in the same position he would be if he were injured in non-maritime employment ashore . . .."
III
Having decided that a claim of strict liability in tort is cognizable under federal *941 maritime law and that the 1972 amendments do not bar a longshoreman's strict liability cause of action against the vesselowner, the Court must finally consider whether, on the particular facts of this case, the relationship of the vesselowner to the Plaintiff with respect to the vehicle in question makes the vesselowner a proper defendant within the definitional limits of strict liability in tort. Unfortunately, this question was not briefed by the parties at all and the parties have not yet furnished a complete factual statement on this aspect of the case. But the Court nevertheless has before it a motion to dismiss which it must decide on the facts now before it, incomplete as they may turn out to be.
Attention is again directed to the fact statement above, and particularly to the areas where no detailed facts are yet known. As already noted, these missing detailed facts may be important and even determinative in a later motion for summary judgment.
The Court has found no case in which a vesselowner was held liable under federal maritime law to a longshoreman or to a business visitor on a theory of strict liability.[4] Although federal maritime law recognizes products liability claims, the relevant cases have all involved claims against the manufacturer or retailer of the allegedly defective product. In this case, the Defendant is not the manufacturer of the item, nor is the Defendant its distributor in the usual sense of that term. So it is necessary to explore the extent of the reach of the doctrine of strict liability in tort. With no precedent in the federal maritime law for holding any vesselowner under this theory, much less for holding a vesselowner who is neither a manufacturer nor the typical distributor, this Court must examine the common law as developed by the state courts for guidance.[5]
It is appropriate to look at the way in which the doctrine of strict liability in tort developed and the rationale given for its development by leading courts and the Restatement. The doctrine originated in cases against manufacturers; see, e. g., Greenman v. Yuba Power Products, Inc., 59 Cal.2d 57, 27 Cal.Rptr. 697, 377 P.2d 897 (1963), in which the Supreme Court of California explained:
"The purpose of such liability is to insure that the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market rather than by the injured persons who are powerless to protect themselves."
The Restatement (Second) of Torts, supra, comment f, added:
"The basis for the rule is the ancient one of the special responsibility for the safety of the public undertaken by one who enters into the business of supplying human beings with products which may endanger [their] . . . safety . . ., and the forced reliance upon that undertaking on the part of those who purchase such goods."
The rationale given for the doctrine laid the groundwork for its broader application, including cases against wholesalers and retailers. E. g., Vandermark v. Ford Motor Co., 61 Cal.2d 256, 37 Cal.Rptr. 896, 391 P.2d 168 (1964); see Restatement (Second) of Torts, supra, *942 comment f. As the Court said in Vandermark, supra, 61 Cal.2d at 262-263, 37 Cal.Rptr. at 899, 391 P.2d at 171:
"Retailers like manufacturers are engaged in the business of distributing goods to the public. They are an integral part of the overall producing and marketing enterprise that should bear the cost of injuries resulting from defective products. . . . Strict liability on the manufacturer and retailer alike affords maximum protection to the injured plaintiff and works no injustice to the defendants, for they can adjust the costs of such protection between them in the course of their continuing business relationship."
From these decisions, the underlying public policy and social justification for imposing strict liability appears to pertain only to those people engaged in the business of providing a product to the public for use by the public. Only then would a court be justified in imposing the added responsibility, and assured that defendant could spread the added cost.
Relying and expanding upon these rationales, lessors, bailors and licensors have more recently been held answerable to a strict liability claim. E. g., Price v. Shell Oil Co., 2 Cal.3d 245, 85 Cal.Rptr. 178, 466 P.2d 722 (1970) (lessor-bailor); Fakhoury v. Magner, 25 Cal.App. 3d 58, 101 Cal.Rptr. 473 (1972) (lessor); Garcia v. Halsett, 3 Cal.App.3d 319, 82 Cal.Rptr. 420 (1970) (licensor). In Price, supra, 2 Cal.3d at 251-252, 85 Cal.Rptr. at 182, 466 P.2d at 726, the Court said:
"[W]e can perceive no substantial difference between sellers of personal property and non-sellers, such as bailors and lessors. In each instance, the seller or non-seller `places [an article] on the market, knowing that it is to be used without inspection for defects, . . ..' In the light of the policy to be subserved, it should make no difference that the party distributing the article has retained title to it. . . . The [non-sellers], like the [sellers], are able to bear the cost of compensating for injuries . . . by spreading the loss through an adjustment of the rental."
The cases that extend the doctrine to non-sellers such as bailors, licensors and lessors seem to make it clear that not all such persons are subject to strict liability in tort. The twin requirements of the original cases are particularly emphasized in this context, i. e., that the defendant must be in the business of providing the product and that he must provide the product to the public for use by the public. As stated in Price, supra, 2 Cal.3d at 254, 85 Cal.Rptr. at 184, 466 P.2d at 728:
"Our analysis of [the] authorities leads to the conclusion that for the doctrine of strict liability in tort to apply to a lessor of personalty, the lessor should be found to be in the business of leasing, in the same general sense as the seller of personalty is found to be in the business of manufacturing or retailing." (Emphasis added.)
And, as said by the court in Garcia, supra, 3 Cal.App.3d at 326, 82 Cal.Rptr. at 423:
"Although [a licensor of chattels] is not engaged in the distribution of the product, in the same manner as a manufacturer, retailer or lessor, he does provide the product to the public for use by the public, and consequently does play more than a random and accidental role in the overall marketing enterprise of the product in question." (Emphasis added.)
Unfortunately, there is not as yet any refinement of what is meant either by engaging in the "business" of supplying products[6] or by supplying products "to the public."
*943 As it now appears, the Defendant in this case may well be a licensor of the vehicle. As such, Defendant may be placing the vehicle on the market or in the stream of commerce by distributing it to the ultimate user. Moreover, the Court at this time and in this posture of the case cannot find a lack of the "business" requisite. The Defendant allows the vehicle to be used for its business benefit and obtains a consideration therefor. The Defendant may also be engaged in a continuity of transactions involving the commercial licensing of this and similar vehicles. On the other hand, this may be an isolated transaction. The vehicle may also be a singular vehicle designed and used only on this ship and in a few ports. Such facts as may be later developed on these issues will be important in finally determining whether the requisite "business" exists.
Such facts also may affect whether the Defendant meets the requisite of distributing a product "to the public for use by the public." If there is involved in that concept the notion of distribution to a numerous, undefined and uninformed group of users, this aspect may be lacking in the present case. At first glance, it appears that this vehicle is not intended for any "public" use at all. The vesselowner apparently intends it to be used on the vessel by a presumptively knowledgeable and strictly limited class of user. Again, however, the Court does not feel free to grant a motion to dismiss without full development of all the facts and will undoubtedly have a further opportunity to consider the same question at or before the trial after the facts are fully known.
Pursuant to the above, it is ordered as follows:
Defendant's Motion to Dismiss is denied.
NOTES
[1] Pub.L. No. 92-576, 86 Stat. 1251 (Oct. 27, 1972).
[2] Notwithstanding that 28 U.S.C. § 1332 (1970) (diversity of citizenship) is the jurisdictional basis relied upon by Plaintiff in his complaint, the case is governed by federal maritime law because it arises under the admiralty and maritime jurisdiction of this Court. See 28 U.S.C. § 1333 (1970); Victory Carriers, Inc. v. Law, 404 U.S. 202, 204, 92 S.Ct. 418, 30 L.Ed.2d 383 (1971); Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 408-411, 74 S.Ct. 202, 98 L.Ed. 143 (1953). That jurisdiction attaches and makes federal maritime law applicable in tort cases in the federal courts involving maritime torts, that is, torts occurring on navigable waters. See Victory Carriers, Inc., supra 404 U.S. at 205, 92 S.Ct. 418. The fact that diversity can also be alleged as the basis of jurisdiction does not make the forum state's law applicable. See Pope & Talbot, Inc., supra 346 U.S. at 409-411, 74 S.Ct. 202.
[3] The Court is aware that the Supreme Court of California has rejected the "unreasonably dangerous" requirement, Cronin v. J. B. E. Olson Corporation, 8 Cal.3d 121, 104 Cal. Rptr. 433, 501 P.2d 1153 (1972). The Court is not required at this time to determine whether, under federal maritime law in this case, the "unreasonably dangerous" requirement does or does not apply.
[4] This absence of authority undoubtedly results from the fact that before 1972 a longshoreman could assert an unseaworthiness claim against the vessel that would cover all such cases. So in this respect, as in respect to the interpretation of the 1972 amendments, this case is one of first impression.
[5] This part of the opinion relies exclusively on California precedents and the Restatement of Torts. The California appellate courts have been national leaders in the development and elaboration of the law in this field. Moreover, the decisions of the courts of the forum state are of special significance to a federal court in this type of situation. See Watz v. Zapata Off-Shore Company, 431 F.2d 100, 113 (5th Cir. 1970).
[6] Restatement (Second) of Torts, supra, comment f, states:
"The rule does not, however, apply to the occasional seller of food or other such products who is not engaged in that activity as a part of his business. Thus it does not apply to the housewife who, on one occasion, sells to her neighbor a jar of jam or a pound of sugar. Nor does it apply to the owner of an automobile who, on one occasion, sells it to his neighbor . . . ."
On the other hand, it is clear that the "business" referred to need not be the main business or the raison d'etre of the defendant. In Price, supra, for example, the Shell Oil Company was held to be in the business of leasing trucks and thus answerable to a strict liability claim for injuries caused by an allegedly defective ladder attached to one of the trucks it had leased.
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916 S.W.2d 760 (1996)
323 Ark. 649
Courtney Carnell GUY, Appellant,
v.
STATE of Arkansas, Appellee.
No. 95-1148.
Supreme Court of Arkansas.
March 11, 1996.
*761 Daniel D. Becker, Public Defender, Michael E. Harmon, Deputy Public Defender, Little Rock, for appellant.
Vada Berger, Asst. Atty. General, Little Rock, for appellee.
CORBIN, Justice.
Appellant, Courtney Carnell Guy, appeals the order of the Garland County Circuit Court denying his motion to transfer his case to juvenile court. This interlocutory appeal is authorized by statute, Ark.Code Ann. § 9-27-318(h) (Supp.1995). Jurisdiction is therefore properly in this court. Ark.Sup.Ct.R. 1-2(a)(12). We find no error and affirm the denial of the motion to transfer.
Consistent with the discretion given in section 9-27-318(b)(1), appellant was charged by information in circuit court, along with two others, Jerry Burkes and Tarrel Macon, alleging that on June 8, 1995, they committed two counts of terroristic act in violation of Ark.Code Ann. § 5-13-310 (Repl.1993) and one count of aggravated assault in violation *762 of Ark.Code Ann. § 5-13-204 (Repl.1993). Appellant was born September 28, 1978, and was therefore aged sixteen years at the time the crimes were alleged to have been committed. We recently affirmed the denial of Macon's motion to transfer. Macon v. State, 323 Ark. 498, 915 S.W.2d 273 (1996). An affidavit of probable cause indicated that a total of six shots were fired with a weapon at two residences and one person outside one of the residences near a vehicle. The affidavit indicated that one bullet struck the driver's door of the vehicle and another bullet entered the other residence, struck a metal object, and landed in the shirt collar of the resident. According to the affidavit, four spent .380-caliber casings were found in the street near the residences.
Appellant moved to transfer his case to juvenile court, and the circuit court held a hearing on the motion. Appellant presented no evidence or witnesses in support of his motion. The state called a single witness, Sharon Smith, a juvenile court intake officer who was familiar with appellant.
Smith testified that appellant had two prior adjudications in the juvenile system. In February 1992, appellant was charged with theft of property valued at less than $200.00; he was sentenced to a suspended term of ten days in jail, placed on probation, assessed costs, and ordered to twenty-five hours of community service. Appellant was discharged from that probation in September 1992. In February 1995, appellant was charged with criminal trespass; he was again given probation, assessed costs, and ordered to twenty-five hours community service. Smith stated that, according to her files, appellant had not yet completed the community service requirement.
Smith also testified, based on her experience, as to the possible punishments applicable to appellant's current case. According to Smith, jail was not a viable option because Garland County did not have a juvenile detention facility. Smith stated that, if appellant were transferred to a juvenile detention facility in another county, the maximum time appellant would serve would be ninety days. Smith also mentioned the training school, but stated appellant would only be there for a short time also. The only long-term program of which Smith was aware was the serious offender program; she could not guarantee appellant would be accepted in that program if adjudicated delinquent on these charges, although she could recommend that program. Finally, Smith testified that, while appellant could remain under a juvenile court's jurisdiction until aged twenty-one years, he could not be held in a juvenile facility past his eighteenth birthday on September 26, 1996.
On cross-examination, Smith opined that appellant's previous adjudications were not for serious crimes. She also stated that, in addition to jail, the juvenile system had other options for appellant that had not yet been offered to him.
After the hearing, the trial court took the motion under advisement and later entered an order denying the motion. In deciding whether to transfer a case to juvenile court, the factors to be considered by the circuit court are the seriousness of the alleged offense and whether violence was involved, whether the alleged offense is part of a pattern of adjudicated offenses, and the prior history, character traits, mental maturity, and any other factors that reflect upon the juvenile's prospects for rehabilitation. McGaughy v. State, 321 Ark. 537, 906 S.W.2d 671 (1995) (citing Myers v. State, 317 Ark. 70, 876 S.W.2d 246 (1994) and section 9-27-318(e)). Appellant, as the party seeking the transfer, has the burden of proving the transfer is warranted under section 9-27-318(e). Sebastian v. State, 318 Ark. 494, 885 S.W.2d 882 (1994). The circuit court is not required to give equal weight to each factor, nor is proof required to be presented with regard to each factor. McGaughy, 321 Ark. 537, 906 S.W.2d 671. However, if the circuit court decides to retain jurisdiction of the juvenile's case, that decision must be supported by clear and convincing evidence. Section 9-27-318(f); Sebastian, 318 Ark. 494, 885 S.W.2d 882. Clear and convincing evidence is evidence of a degree that produces in the trier of fact a firm conviction as to the allegation sought to be established. Cole v. State, 323 Ark. 136, 913 S.W.2d 779 (1996). This court will not reverse a circuit court's *763 decision to retain jurisdiction of a juvenile's case unless that decision is clearly erroneous. Id.
Appellant does not seriously dispute that he was charged with serious offenses and that violence was involved, but contends that the trial court erred in failing to consider the remaining statutory factors. Specifically, appellant argues that because he had two prior adjudications for which he had only received probation, there were other punishments available to him within the juvenile system, and therefore it could not be said that he had little or no prospects for rehabilitation. Appellant contends he met his burden as the moving party through Smith's testimony.
Appellant's argument is without merit. This court has repeatedly held that the use of violence in committing a serious offense is a factor sufficient in and of itself for a circuit court to retain jurisdiction of a juvenile. Holland v. State, 311 Ark. 494, 844 S.W.2d 943 (1993). The trial court's order specifically found that the charges stemmed from a "drive-by" shooting in a residential neighborhood, that the charges were serious in nature, two of which were Class B felonies with a punishment range of five to twenty years each, and that violence was employed in the firing of a total of six .380-caliber rounds toward an individual and residence. It is of no consequence that appellant may or may not have personally used a weapon, as his association with the use of a weapon in the course of the crimes is sufficient to satisfy the violence criterion. Collins v. State, 322 Ark. 161, 908 S.W.2d 80 (1995) (citing Walter v. State, 317 Ark. 274, 878 S.W.2d 374 (1994)). Furthermore, no violence beyond that necessary to commit the offense charged is necessary. Cole, 323 Ark. 136, 913 S.W.2d 779. It is not apparent that the trial court failed to consider the remaining statutory factors. The order made findings with respect to appellant's age and education level as well as his prior adjudications and punishments.
The circuit court's order retaining jurisdiction is affirmed.
DUDLEY, NEWBERN and GLAZE, JJ., concur.
GLAZE, Justice, concurring.
This case is a companion appeal to one we handed down on February 19, 1996, Macon v. State, 323 Ark. 498, 915 S.W.2d 273, and involves identical facts and contentions. There is, however, a difference in the two juveniles' ages. That difference is what prompts my concurring opinion.
In Macon, we rejected the seventeen-year-old juvenile's argument that the trial court had failed to consider factors (2) and (3) of Ark.Code Ann. § 9-27-318(e) (Supp.1995) when deciding whether to transfer his case to juvenile court. We then determined the proof was sufficient to support the trial court's holding that Macon's actions and offenses exhibited a serious and violent nature under § 9-27-318(e)(1), and affirmed the decision, denying Macon's motion to transfer. We added that Macon failed to show the trial court clearly erred in finding Macon was not a good prospect for rehabilitation, especially in view of the fact Macon would turn eighteen years old within thirty days after the hearing. See McGaughy v. State, 321 Ark. 537, 906 S.W.2d 671 (1995). For example, a person who has reached his eighteenth birthday cannot be committed to a youth services center. Ark.Code Ann. §§ 9-27-331(a)(1) and 9-28-206 (Supp.1995); Bright v. State, 307 Ark. 250, 819 S.W.2d 7 (1991).
The Macon decision is unquestionably controlling here, because juvenile Courtney Guy's actions and offenses are the same as Macon's, and therefore support denial of his motion to transfer under § 9-27-318(e)(1). However, unlike Macon who had turned eighteen years old only days after his transfer hearing, Guy was only sixteen at the time of his hearing; thus, existing rehabilitation programs (such as youth services center) were still available for Guy, assuming he had met the other requirements of § 9-27-318(e). Because Guy's prior offenses involved misdemeanor criminal trespass and theft, I believe he would have been a viable candidate for rehabilitation except for the seriousness of his and his accomplices' actions and employment of violence.
*764 In sum, I would affirm solely on the basis that Guy failed to show the trial court erred in finding the proof supported its denial decision under § 9-27-318(e)(1).
DUDLEY and NEWBERN, JJ., join this concurrence.
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274 F.Supp.2d 308 (2003)
Michael J. CECERE, III, Christine A. Nagy, William Odol, Carolyn Delvecchio and Donald V. Pupke, Jr., Plaintiffs,
v.
THE COUNTY OF NASSAU, the Nassau County Legislature, Judith Jacobs, as Presiding Officer of the Nassau County Legislature, and Nassau County Board of Elections, John A. Degrace, in his official capacity as a Commissioner of the Nassau County Board of Elections, Eric S. Brown, in his official capacity as a Commissioner of the Nassau County Board of Elections, Defendants.
No. 03-CV-1548(DRH)(WDW).
United States District Court, E.D. New York.
July 31, 2003.
*309 Rivkin Radler LLP, Uniondale, By Evan H. Krinick, Esq., for Plaintiffs.
Lorna B. Goodman, Nassau County Attorney, Mineola, By Jeffrey M. Wice, Esq., David B. Goldin, Esq., for Defendants.
MEMORANDUM AND ORDER
HURLEY, District Judge.
Pending before the Court are (1) defendants' motion for an order dismissing the complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and (2) plaintiffs' motion for reconsideration of their motion for expedited discovery.
For the reasons provided infra, defendants' motion is granted and plaintiffs' is denied as moot.
BACKGROUND
1. Complaint
The five plaintiffs, who reside in various Nassau County legislative districts, brought suit against the County of Nassau, the County Legislature, Judith Jacobs, as presiding officer of the Legislature and against the Board of Elections and its Commissioners. The relief sought includes a declaration by this Court that the redistricting plan adopted by the Nassau County Legislature on June 27, 2003, with respect to the County's nineteen legislative districts violates the Fourteenth Amendment of the United States Constitution, as well as various provisions of state law.
The complaint contains 285 numbered paragraphs. Reduced to its essentials, plaintiffs complain that (1) the Democratic majority used its ten-to-nine advantage to enact a redistricting plan to advance its political agenda, (2) the resulting map is essentially a hodgepodge of misshapen districts in which various towns, villages and communities are unnecessarily divided and (3) that the Democratic legislators did not make a good faith effort "to reduce the total population deviation to as low a deviation as practicable." (Compl., ¶ 250.)
With respect to item 1, viz., that the redistricting plan is the product of the Democratic legislators' political agenda, the following paragraphs of the complaint are illustrative: Local Law "2-2003 was promulgated for political reasons, to wit, to strengthen Districts represented by Democratic legislators, to increase the chances of Democratic candidates to prevail in Districts currently represented by Republican Legislators, and to weaken districts presently represented by Republican Legislators where Democratic candidates had a viable chance to succeed" (id. 1244); "[t]he design of the Democratic Legislators was to satisfy a political agenda" (id. K 251); "[u]nder the final map, many registered *310 Democrats were purposefully placed in the districts of Republican legislators Salvatore Portillo, Norma Gonsalves and John Ciotti so as to give Democratic candidates a better chance of winning in those districts" (id. ¶ 233); a Democratic appointee to the Temporary Districting Advisory Commission "conceded" that the redistricting proposal that was the basis for Local Law 2-2003 "was motivated by an effort to strengthen Democratic candidates in many districts" (id. ¶ 234); the chair of the Nassau County Democratic Party "acknowledged that the final map `gives us [the Nassau County Democratic Party] a more competitive chance and minimizes the impact of the Republican machine'" (id. ¶ 235).
The following paragraphs of the complaint are representative of those which speak of towns, villages and communities being unnecessarily divided: "members of the public who spoke at the December 30th and 31st public hearing, overwhelming expressed the desire that the proposed map not differ significantly from the 1994 [i.e., the prior] map" (id. ¶ 131); "[t]he final map enacted by the Nassau County Legislature increased by 33% the number of Village lines split" (id. ¶ 220); [t]he final map enacted by the Nassau County Legislature increases by over 50% the number of communities split" (id. ¶ 221); [t]he final map enacted by the Nassau County Legislature increases by 100% the number of Town lines crossed" (id, ¶222); "[i]n order to achieve a constitutional districting plan, only five district lines would have been needed to be changed from the [1994 map]" (id. ¶ 230); and "[u]nder the final map, all nineteen districts were substantially re-drawn" (id. ¶ 231).
Finally, with respect to the allegations in the complaint alleging that defendants did not endeavor to enact a plan with the lowest deviation rate practicable, consider the following paragraphs: "[t]he Democratic Legislators did not make good faith efforts to reduce the total population deviation to as low a deviation as practicable" (id. ¶ 250); "[t]he objective of the Democratic Legislators was to create nineteen districts with a total population deviation of less than 10% regardless of the practicality and ease of reaching a lower percentage of deviation" (id. ¶ 252); "[t]he Legislature could have, with great practicality, come much closer to equal population for each district" (id. ¶ 255); Local Law 2-2003 "was not the result of an honest and good faith effort to construct districts as nearly equal in population as practicable" (id. ¶ 257); "[t]he Legislature did not make any reasonable effort to minimize the maximum total deviation" (id. ¶ 1259).
2. Position of Parties
A. Plaintiffs'Position
Plaintiffs' sole federal claim is that the weight of their vote, as members of more populous legislative districts, has been diluted vis-a-vis their counterparts in less populated districts.[1] "Simply put, [plain *311 argue] the Constitution requires a good faith effort to achieve a deviation as low as practicable, not an arbitrary, secretive process that attempts to achieve a deviation as close to 10% as possible that violates every districting principle but enhances the political power of the controlling political party." Pis.' Mem. Supp. at 26.
B. Defendants'Position
Preliminarily it should be noted that plaintiffs acknowledge that the current map "has an estimated total deviation rate of 8.94%" (Compl., ¶ 218).[2] That brings into play the so-called 10% rule applicable to state and local elections. Marylanders for Fair Representation v. Schaefer, 849 F.Supp. 1022, 1030 (D.Md. 1994). If the deviation rate is less than 10%, the difference is considered to be a "minor deviation" (Broum v. Thomson, 462 U.S. 835, 842-43, 103 S.Ct. 2690, 77 L.Ed.2d 214 (1983)) and the redistricting plan is presumptively valid. Marylanders for Fair Representation, 849 F.Supp. at 1031. Conversely, a plan with a deviation of more than 10% "creates a prima facie case of discrimination and therefore must be justified by the state." Brown v. Thomson, 462 U.S. at 842-43, 103 S.Ct. 2690, 77 L.Ed.2d 214 (1983).
Having discussed the 10% rule, attention will now be directed to defendants' argument in support of their motion to dismiss the complaint under Rule 12(b)(6). In essence, defendants' argument is that plaintiffs, given that the maximum deviation rate is less than 10%, must plead facts which, if ultimately established, would indicate that the "minor" deviation in the redistricting plan is a result of the promotion of an unconstitutional or irrational state policy.
The gravamen of the complaint is that the map was drawn to favor Democrats, resulting in the unnecessary division of town, villages and communities. In defendants' view, that conduct simply is not violative of the equal protection clause of the Fourteenth Amendment, i.e., it may not be equated with the promotion of an unconstitutional or irrational state policy.
3. Standard for Determining Rule 12(b)(6) Motion
On a motion to dismiss made pursuant to Rule 12(b)(6), the Court may dismiss the complaint "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984) (citation omitted). When considering a Rule 12(b)(6) motion, a court must accept the truth of, and draw all reasonable inferences from, the wellpleaded factual allegations contained in the complaint. Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir.1993). "The task of the court in ruling on a Rule 12(b)(6) motion is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir.1998)(internal quotations omitted). Therefore, the Court only considers the allegations of the complaint,[3] drawing all inferences in the plaintiffs' favor. Id.
DISCUSSION
1. Preliminary Observations:
A. Significance of Deviation Rate
Given that the deviation rate is under 10%, the plan is presumptively constitutional *312 For plaintiffs to rebut that presumption, plaintiffs must prove that the deviation, albeit small, is nonetheless constitutionally unacceptable. See Abate v. Rockland County Legislature, 964 F.Supp. 817, 819 (S.D.N.Y.1997)("Where a state or local apportionment plan deviates from equality by less than 10%, it is presumptively constitutional, and a challenger has the burden of proving that even such a `minor deviation' is the result of discriminatory state action"); Mary landers for Fair Representation, 849 F.Supp. at 1032 ("[Although there is some language in several decisions indicating that plans with less than a ten percent deviation are essentially per se constitutional, none of those decisions expressly so states, and it appears that the plaintiffs in those cases did not raise any arguments that the minor deviation was the result of an unconstitutional or irrational purpose.").
B. Reynolds v. Sims Must be Read in Conjunction With Such Cases as Brown v. Thomson and Gaffney v. Cummings
In Reynolds v. Sims, 377 U.S. 533, 84 S.Ct. 1362, 12 L.Ed.2d 506 (1964), the Supreme Court held that the:
"Equal Protection Clause requires that a State make an honest and good faith effort to construct districts ... as nearly of equal population as is practicable."
Id. at 577, 84 S.Ct. 1362. That excerpt, applied literally, might suggest that any plan, even those with a deviation of under 10%, would be subject to a successful attack if the person claiming to be aggrieved could proffer a feasible alternate plan producing greater population equality among districts. Although population equality to the extent practicable may be the goal, "an individual's right to vote for state legislators [as distinct from congressional representatives] is [not] unconstitutionally impaired [unless] its weight is in a substantial fashion diluted when compared with votes of citizens living in other parts of the State." Reynolds v. Sims, 377 U.S. at 568, 84 S.Ct. 1362 (emphasis added). Moreover, as explained by Justice Brennan in his dissent in Brown v. Thomson, almost twenty years after Reynolds v. Sims, "[o]ur cases since Reynolds have clarified the structure of the constitutional inquiry into state legislature apportionments setting up what amounts to a fourstep test," with the first step being a determination of whether the deviation is above or below 10%. 462 U.S. at 852, 103 S.Ct. 2690, 77 L.Ed.2d 214 (1983) (Brennan, J. in dissent). A deviation rate under 10% "will ordinary be considered de minimis." Id. And Gaffney v. Cummings, 412 U.S. 735, 93 S.Ct. 2321, 37 L.Ed.2d 298 (1973) (which involved deviation rates under 10%) instructs that judicial involvement in the inherently political and legislative process of apportionment "must end at some point, but that point constantly recedes if those who litigate need only produce a plan that is marginally `better' when measured against a rigid and unyielding population-equality standard. The point is, that such involvements should never begin." 412 U.S. at 750-51, 93 S.Ct. 2321, 37 L.Ed.2d 298 (1973).
In sum, a plaintiffs burden, both as to pleading and ultimate proof, is formidable when, like here, a pure "one vote, one person" claim is advanced, devoid of any racial or other protected status claim, or of a Davis v. Bandemer political gerrymandering cause of action.
The question is whether the complaint, construed most favorably to the nonmovants, sets forth facts which, if established, would prove that one or more plaintiffs will be deprived of his or her right to equal protection under the Fourteenth Amendmerit *313 should Local Law 2-2003 be permitted to stand.
As noted, the complaint speaks of the current map being the product of rank partisanship by the Democratic majority with a resulting inordinate division of towns, villages and communities. But, for the reasons to be provided, infra, such conduct, although perhaps a violation of state law, is not violative of the Fourteenth Amendment.
2. Even if Local Law 2-2003 was Promulgated for Political Reasons (i.e., to Benefit Democratic Candidates and Disadvantage Republican Candidates), as Plaintiffs Allege, That Alone is not Violative of the Fourteenth Amendment
Gaffney v. Cummings involved a reapportionment plan for the Connecticut General Assembly and Senate Districts. "The maximum deviation [under the challenged plan] between any two [General Assembly] districts [was] 7.83%." 412 U.S. at 737, 93 S.Ct. 2321. The corresponding rate for the Senate was 1.81%. Id.
In Connecticut, towns, not counties, are the basic unit of local government. The Democratic and Republican Party leaders in the State Legislature appointed an equal number of members to a bipartisan Apportionment Board. The Board, using "party voting results in the preceding three statewide elections .. . created what was thought to be a proportionate number of Republican and Democratic legislative seats." Id, at 738, 93 S.Ct. 2321. In the process, "the Board cut the boundary lines of 47 of the State's 169 towns" (id,), with some town lines "cut more than once." Id., n. 3, 93 S.Ct. 2321.
Shortly after the Board filed its reapportionment plan, an action was brought in federal district court seeking declaratory and injunctive relief. Among the claims advanced were that "an excessive number of towns [were divided] in forming assembly district[s]" due to the Board endeavoring to achieve a "smaller deviation from population equality than required by the Fourteenth Amendment." Id. at 739, 93 S.Ct. 2321 (emphasis added). Additionally, it was alleged that the plan "contained `a built-in bias in favor of the Republican Party.'" Id,
The three judge district court which decided the case found for plaintiffs,[4] concluding that "`the deviation from equality of population of the Senate and House districts [was] not justified by any sufficient state interest and that the Plan denie[d] equal protection of the law in the districts of greater population ....' .... *314 More particularly, the court found that the `partisan political structuring ... cannot be approved as a legitimate reason for violating the requirement of numerical equality of population in districting.'" Id. at 739-40, 93 S.Ct. 2321.
In reversing, the Supreme Court explained:
We think that appellees' showing of numerical deviations from population equality among the Senate and House districts in this case failed to make out a prima facie violation of the Equal Protection Clause of the Fourteenth Amendment, whether those deviations are considered alone or in combination with the additional fact that another plan could be conceived with lower deviations among the State's legislative districts. Put another way, the allegations and proof of population deviations among the districts fail in size and quality to amount to an invidious discrimination under the Fourteenth Amendment which would entitle appellees to relief, absent some countervailing showing by the State.
Id. at 740-41, 93 S.Ct. 2321.
The rationale for its holding that plaintiff-appellees had failed to, inter alia, make out a prima facie violation of the Fourteenth Amendment is found in the following excerpts from the opinion:
The very essence of districting is to produce a differenta more "politically fair"result than would be reached with elections at large, in which the winning party would take 100% of the legislative seats. Politics and political considerations are inseparable from districting and apportionment. The political profile of a State, its party registration, and voting records are available precinct by precinct, ward by ward. These subdivisions may not be identical with census tracts, but, when overlaid on a census map, it requires no special genius to recognize the political consequences of drawing a district line along one street rather than another. It is not only obvious, but absolutely unavoidable, that the location and shape of districts may well determine the political complexion of the area. District lines are rarely neutral phenomena. They can well determine what district will be predominantly Democratic or predominantly Republican, or make a close race likely. Redistricting may pit incumbents against one another or make very difficult the election of the most experienced legislator. The reality is that districting inevitably has and is intended to have substantial political consequences.
412 U.S. at 753, 93 S.Ct. 2321. In that context, the Court said:
[T]he goal of fair and effective representation [is not] furthered by making the standards of reapportionment so difficult to satisfy that the reapportionment task is recurringly removed from legislative hands and performed by federal courts which themselves must make the political decisions necessary to formulate a plan or accept those made by reapportionment plaintiffs who may have wholly different goals from those embodied in the official plan.
. . . . . .
The point is, that such involvements should never begin. We have repeatedly recognized that state reapportionment is the task of local legislatures or of those organs of state government selected to perform it. Their work should not be invalidated under the Equal Protection Clause when only minor population variations among districts are proved.
Id. at 749-751, 93 S.Ct. 2321.
There are obvious distinctions between Gaffney and the case at bar. In Gaffney, *315 notwithstanding appellees' allegations that the plan had a built-in bias in favor of Republicans, it seems that the drafters of the plan tried to perpetrate the then current percentages of Democrats and Republicans in the State Legislature rather than, as here, to allegedly enhance the Democrats' position at the expense of Republicans. Additionally, the primary focus of the challenge in Gaffney was upon the allegedly unnecessary division of so many towns. That argument was based on the anomalous proposition that the Board went too far in endeavoring to promote equality, i.e., the deviation rate was unnecessarily low. Nonetheless, Gaffney is instructive for present purposes in that it (1) underscores that redistricting is essentially a political and legislative process and (2) found that a maximum deviation rate of 7.83% in a non-congressional redistricting case was insufficient, as a matter of law, to establish a prima facie violation of the Fourteenth Amendment in the context of a pure "one person, one vote" challenge.
Indeed, the Supreme Court has recognized political motivation as a possible defense against a claim of racial gerrymandering. In Hunt v. Cromartie, 526 U.S. 541, 119 S.Ct. 1545, 143 L.Ed.2d 731 (1999), North Carolina residents brought action against various state officials challenging the state's redistricting plan as racially motivated in violation of the Fourteenth Amendment. A three judge district court granted summary judgment and injunctive relief to plaintiffs. The Supreme Court, in reversing that determination stated:
Accepting appellants' political motivation explanation as true, as the District Court was required to do in ruling on appellees' motion for summary judgment... appellees were not entitled to judgment as a matter of law. Our prior decisions have made clear that a jurisdiction may engage in constitutional political gerrymandering, even if it so happens that the most loyal Democrats happen to be black Democrats and even if the State were conscious of that fact. . . Evidence that blacks constitute even a supermajority in one congressional district while amounting to less than a plurality in a neighboring district will not, by itself, suffice to prove that a jurisdiction was motivated by race in drawing its district lines when the evidence also shows a high correlation between race and party preference.
Id. at 552, 119 S.Ct. 1545 (emphasis added to "constitutional").
As defendants correctly note, Hunt instructs that it is not just that "political motivation in redistricting is not impermissible[but] more importantfly] ... that political motivation is the essence of a permissible policy." Defs.' Mem. Supp. at 13. See also Duckworth v. State Administration Board of Elections Laws, 332 F.3d 769, 774 (4th Cir.2003)("[W]hen a plaintiff fails to proffer sufficient evidence to satisfy Davis' elements [or here, to even suggest political gerrymandering under Davis ], the resulting conclusion is not that no political gerrymandering exists, but that any gerrymandering that did occur was constitutional").
In sum, the alleged political motivation alleged in the complaint does not, standing alone, implicate the equal protection clause of the Fourteenth Amendment.
But, of course plaintiffs have alleged more. Not only does the complaint charge defendants with passing Local Law 2-2003 for the purpose of promoting the Democratic agenda but it is also replete with paragraphs, many quoted earlier, charging that towns, villages and communities were unnecessarily divided and that defendants did not endeavor to enact a plan with the lowest deviation rate practicable.
*316 It is evident from a reading of the complaint that plaintiffs' three federal claims regarding (1) defendants' political agenda, (2) the unnecessary division of towns, villages and communities, and (3) the absence of a good faith effort to construct districts as nearly equal in population as practicable, are intertwined. Accordingly, much of what has been said thus far pertains to all three issues. Nonetheless, given the importance of the subject matter and that it is atypical to dismiss a voting rights claim prior to discovery (cf. Rodriguez v. Pataki, 02-CV-618, 2002 WL 1058054 (S.D.N.Y. June 24, 2003)), the Court will address the geographical division and lack of good faith issues separately, endeavoring to avoid unnecessary repetition.
3. Divisions of Toums, Villages, and Communities, as Alleged by Plaintiffs, is not Sufficient to Invalidate the Redistricting Plan Under the Fourteenth Amendment
Plaintiffs cite the purportedly inordinate division of towns, villages and communities as evidence of defendants' "bad faith" in enacting Local Law 2-2003. A similar argument was voiced by the unsuccessful appellant in Duckworth. Duckworth maintained that "the bizarre appearance of the districts, and their alleged lack of continuity, are proof of the states's districting manipulations, of the assured electoral victory of Democratic candidates, and of the illegal repression of his political voice." Duckworth, 332 F.3d at 769.
In rejecting that claimand affirming the district court's Rule 12(b)(6) dismissal of his complaintthe Fourth Circuit explained:
At most it may be fairly inferred from bizarreness that the political apportionment was a result of intentional political action and resulted in political affect. But, of course, political affect itself is an expected and indeed intended, result of apportionment.... That bizarreness may establish political affect is therefore an unobjectable, and in fact expected conclusion."
Id. at 775, citing Gaffney v. Cummings (emphasis in original).
Gaffney is also instructive for present purposes. As earlier discussed, a major component of Gaffney's challenge to the redistricting plan was that its implementation caused the "`segmentation of an excessive number of towns in assembly district[s].'" Gaffney, 412 U.S. at 739, 93 S.Ct. 2321. Yet the Supreme Court was not required to, and did not substantively address the segmentation issue given its conclusion that Gaffney's "showing of numerical deviations from population equality among the Senate and House districts ... failed to make out a prima facie violation of the Equal Protection Clause of the Fourteenth Amendment." Id. at 740-41, 93 S.Ct. 2321.
In sum, the division of towns, villages and communities is evidence of political motivation being the driving force behind Local Law 2-2003. There are no factual allegations in the complaint to suggest that it is anything more. Therefore, as a matter of law, as in Duckworth and Gaffney, those allegations, are of no federal constitutional significance under the present pleading.
With respect to the complaint's repeated reference to "bad faith," such cases as Abate v. Rockland County Legislature, and Marylanders for Fair Representation make clear that, for an apportionment plan with a deviation rate under 10% to be subject to a Fourteenth Amendment constitutional challenge, the challenger must plead, and ultimately prove that the minor deviation is the result of, in the language of Abate "discriminatory state action," (964 *317 F.Supp. at 819) or, as phrased in Marylanders for Fair Representation "the result of an unconstitutional or irrational purpose" (849 F.Supp. at 1032). However, a reading of the instant complaint indicates that the challenged geographical divisions are the by-product of the political motivation which allegedly shaped the plan embodied in Local Law 2-2003. Given that political motivation of the type alleged here is, as discussed supra, common in the redistricting process and is not unconstitutional, the concomitant by-product may not be legitimately labeledagain construing everything most favorably to plaintiffsas unconstitutional, irrational or the result of discriminatory state action.
4. The Additional Allegations of Bad Faith in the Complaint Beyond Those Pertaining to the Division of Towns, Villages and Communities are Insufficient to Render the Complaint Viable
There are numerous allegations in the complaint along the lines of Local Law 2-2003 entailing "a total population deviation rate greater than necessary" and the plan being "the product of bad faith not intended to further any legitimate governmental interest." Pis.' Reply Mem. at 13. However, it is axiomatic that such conclusory allegations as "bad faith" are insufficient to defeat a properly grounded Rule 12(b)(6) motion. Duckworth, 332 F.3d at 778. For plaintiffs' bad faith allegation to have legal significance, therefore, they must be read in conjunction with the complaint, drawing all reasonable inferences in favor of plaintiffs. With that preliminary observation having been made, the Court will focus on the substance of plaintiffs' additional bad faith claim.
As understood by the Court, the proposition is that Local Law 2-2003 is unconstitutional unless the differential, if any, between its deviation rate of 8.94% and the lowest rate practicable is proven to be necessary to advance a legitimate state interest. From that, plaintiffs maintain that "[f]actually, until defendants initially plead and ultimately prove that ... the extreme population deviation is necessary to satisfy a rational state policy [i.e., the product of "good faith"], plaintiffs' pleading more than states a claim." Pis.' Reply Mem. at 10.
Plaintiffs placing of the burden of proof on defendants is incorrect given that the deviation rate is under 10%. But that really is not the central question for present purposes. Instead, the issue is whether Local Law 2-2003 must be invalidated unless the claimed differential is attributable to such state interests as contiguousness, preserving municipal boundaries or creating compact districts. Which is to say, if the proof ultimately establishes that the defendants failed to harmonize such considerations with their political agenda in drafting the challenged map, does that cause the map to run afoul of the Fourteenth Amendment? The question does not lend itself to a simple response.
Plaintiffs are correct in stating that "[n]umerous federal courts have recognized that certain traditional New York districting criteria ... may be considered [in evaluating] a districting plan." Pis.' Mem. Supp. Motion for Recons. at 21. It does not follow, however, that such considerations are germane for present purposes.
The Supreme Court has not explicitly addressed the question, as explained in the following excerpt from Duckworth:
[M]ight a plaintiff be able to offer probative evidence of discriminatory political effect in a political gerrymandering case by way of a non-contiguity complaint. The Supreme Court has said that contiguousness represents one of the principles of apportionment, along *318 with compactness and respect for political subdivisions. See Shaw v. Reno, 509 U.S. 630, 647, 113 S.Ct. 2816, 125 L.Ed.2d 511 (1993). But the Court has also said that "these criteria are important not because they are constitutionally requiredthey are not, but because they are objective factors that may serve to defeat a claim that a district has been gerrymandered[]" Id. at 647, 113 S.Ct. 2816 (emphasis added). Thus, the Court, though noting that these factorsas principles of apportionment represent valid state interests in apportionment, has never said that lack of such factors could be probative of discriminatory political effect.
332 F.3d at 778.
However, the answer to this pivotal question is implicit in the holding in Gaffney. As noted earlier, the district court had declared Connecticut's reapportionment plan unconstitutional because the deviation rate, although under 10%, was "not justified by any sufficient state interest." Gaffney, 412 U.S. at 740, 93 S.Ct. 2321. Yet the Supreme Court found it unnecessary to even address the "state interest" argument in reversing the lower court given the low deviation rate and concomitant failure by plaintiff-appellees to establish a prima facie case.
If, as plaintiffs urge, state interest factors are relevant, not only if invoked by a state to justify a deviation rate over 10%, but also as affirmative evidence of "bad faith" sufficient to invalidate a pure "one person, one vote" claim, the 10% rule would be rendered virtually meaningless. It would mean that any plan with a deviation rate would be subject to attack. That the challenger bears the burden of proof when the deviation rate is under 10% is largely irrelevant to the concern expressed in Gaffney that federal courts not be drawn into the political and legislative redistricting thicket in scenarios involving "minor deviations from mathematical equality among state legislative districts." Gaffney, 412 U.S. at 745, 93 S.Ct. 2321. "It makes little sense to conclude [that such] variations among legislative districts [causes] any person's vote [to be] substantially diluted." Id. at 745-56, 93 S.Ct. 2321 (emphasis added). Gaffney tells us that a rate of 7.83% is a "minor deviation." There is no reason to conclude that the instant rate of 8.94% should not be similarly categorized. See Fund for Accurate and Informed Representation, Inc., v. Weprin, 796 F.Supp. 662, 668 (N.D.N.Y. 1992), affd Mem., 506 U.S. 1017, 113 S.Ct. 650, 121 L.Ed.2d 577 (1993)("absent credible evidence that the maximum deviation exceeded 10 percent [it was 9.43%], plaintiffs failed to establish a prima facie case of discrimination ... sufficient to warrant further analysis by this court.")[5]
*319 In urging a contrary result, plaintiffs place considerable stock in Hulme v. Madison County. In Hulme, the challenged "apportionment plan was the creation of one Board member [of the twenty nine person Board], Wayne Bridgewater, the Chair of the assigned [five member] Committee, influenced by another Board member." 188 F.Supp.2d at 1044. Mr. Bridgewater accomplished his goal via insults, threatening and bullying other Board members. Id. Under the circumstances, it is readily understandable that the court concluded that the apportionment plan passed by the Board was unconstitutionally affected by "arbitrariness or discrimination" even though the deviation rate was under 10%. Here, however, Local Law 2-2003 is not alleged to be the work product of one person but rather of the Democratic majority of the Nassau County Legislature, and political motivation is recognized as constitutionally permissible in a redistricting context. Nor is the law claimed to be the product of threats or other forms of intimidation. Yes, there are allegations in the complaint that defendants were rude to Republican legislators and gave short shrift, if any consideration to their proposals. As lamentable as that conduct may be, it does not implicate the Fourteenth Amendment.
CONCLUSION
A fair reading of the complaint indicates that the driving force behind defendants' actions was to advance their political agenda as alleged by plaintiffs. As a result, the maximum deviation rate was not as low as it otherwise arguably could have been and a number of towns, villages and communities were divided. However, as noted, those circumstances, viewed singularly or cumulatively, given the limited nature of plaintiffs' challenge, do not, as a matter of law, run afoul of the equal protection clause of the Fourteenth Amendment. If plaintiffs established each and every allegation in their complaint, independent of those that are purely conclusory, their proof would fall short of establishing a federal constitutional violation. The Court notes that plaintiffs may well have articulated viable state-based constitutional and statutory causes of action (see generally Rodriguez v. Pataki, 2002 WL 1058054, *4 (S.D.N.Y.)) but declines to entertain those claims in the absence of a federal constitutional claim. Under the circumstances, defendants are entitled to judgment as a matter of law under Rule 12(b)(6). The dismissal of the complaint, however, is without prejudice. Should plaintiffs elect to file an amended complaint, such filing shall be done within thirty days of the docketing of this decision; otherwise the complaint will be dismissed and the case closed.
SO ORDERED.
NOTES
[1] Although the perceived wrong articulated by plaintiffs is said to be the result of the Democratic legislators' political agenda, plaintiffs have not invoked the principle of unconstitutional political gerrymandering, as defined in Davis v. Bandemer, 478 U.S. 109, 106 S.Ct. 2797, 92 L.Ed.2d 85 (1986), in seeking to invalidate the map. See Compl. and Apr. 11, 2003 Letter from Pis.' counsel, Evan H. Krinick of Rivkin Radler, at 1, n.l. Had plaintiffs done so, as defendants seem to suggest they have [Defs.' Mem. Supp. at 9], the challenged pleading clearly would be insufficient given its failure to "plead facts adequate to prove Davis' two required elements: that there has been intentional discrimination against an identifiable group and an actual discriminatory effect on that group." Duckworth v. State Administration Board of Elections, 332 F.3d 769, 774 (4th Cir.2003).
[2] The "1994 [map] had a 9.3% total deviation from population equality." Compl., ¶ 212.
[3] For Rule 12(b)(6) purposes, the complaint includes exhibits referenced therein.
[4] The Court notes that it may be confusing that certain of the cited cases involving challenges to redistricting plans required a threejudge panel and others, such as the instant case, did not. The applicable statute, 28 U.S.C. § 2284(a), states that "[a] district court of three judges shall be convened when ... an action is filed challenging the constitutionality of the apportionment of congressional districts or the apportionment of any statewide legislative body." Id. (emphasis added). Under this statute, the Supreme Court has identified four elements that, if present, necessitate convening a three-judge district court: (1) a claim for injunctive relief (2) against a state officer, (3) to prevent enforcement of a statewide statute (4) which is challenged as being unconstitutional in substantial ways. Gonzalez v. Automatic Emp. Credit Union, 419 U.S. 90, 94, 95 S.Ct. 289, 42 L.Ed.2d 249 (1974); see also Brown v. Liberty Loan Cor/), of Duval, 539 F.2d 1355. 1359 n. 2 (5th Cir. 1976). "If any one of those criteria is missing, a three-judge district court is not necessary.'' Young v. Walker. 435 F.Supp. 1089, 1093 (M.D.Fla.1977). Specifically, if, as in the instant case, the challenged statute does not have statewide effect, a three-judge panel is not required. Board of Regents of Univ. of Tex. System v. New Left Educ. Project, 404 U.S. 541, 545, 92 S.Ct. 652, 30 L.Ed.2d 697 (1972).
[5] In this Court's April 23, 2003 decision denying plaintiffs' motion for expedited discovery, I found that a deviation rate of under 10% did not render a pure "one person, one vote" controversy nonjusticiable. Apr. 23, 2003 Mem. In doing so, I disagreed with the holding in Fund for Accurate and Informed Representation, Inc. v. Weprin, 796 F.Supp. 662 (N.D.N.Y.1992), aff'd Mem. 506 U.S. 1017, 113 S.Ct. 650, 121 L.Ed.2d 577 (1993) insofar as that court concluded to the contrary. Id. at 9-10.
Had the present plaintiffs alleged facts which, if ultimately established, would have demonstrated that the deviation rate differential between 8.94% and what it could have been, was attributable to "discriminatory state action" (Abate v. Rockland County Legislature, 964 F.Supp. 817, 819 (S.D.N.Y.1997)) or "the result of an unconstitutional or irrational purpose" (Marylanders for Fair Representation v. Schaefer, 849 F.Supp. 1022, 1032 (D.Md.1994)), then defendants' Rule 12(b)(6) would be denied. Those circumstances would create a justiciable controversy. Instead, however, a fair reading of the complaint, drawing all inferences in favor of plaintiffs, paints a different, and one dimensional. picture viz., one of a redisticting map shaped by the political agenda of the Demo cratic majority within the Nassau County Legislature.
| {
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346 Pa. Superior Ct. 505 (1985)
499 A.2d 1369
Lambert SNYDER and Cindy Snyder, Appellants,
v.
James M. ROGERS, Jr., and Joanne M. Rogers.
Supreme Court of Pennsylvania.
Argued June 6, 1985.
Filed October 18, 1985.
*506 Frank S. Poswistilo, Easton, for appellants.
Before SPAETH, President Judge, and McEWEN and BECK, JJ.
SPAETH, President Judge:
This is an appeal from an order dismissing appellants' exceptions and entering judgment against defendant husband only. Appellants, plaintiffs below, argue that judgment should also have been entered against defendant wife. We affirm.[1]
Appellants, Lambert Snyder and his wife Cindy Snyder, were the owners of a wholesale produce business. James M. Rogers, Jr., was manager of the business. In January 1981 Mr. Snyder concluded that Mr. Rogers and another employee, a truck driver named Teddy, were stealing produce, and on January 30 he fired them. Mr. Rogers was *507 arrested but was released the same day, and so far as the record discloses, no further criminal proceedings occurred.
On January 31, 1981, Mr. Snyder, in the presence of Mr. and Mrs. Rogers, at their home, played a tape recording of a telephone conversation he had had with Teddy, in which Teddy accused Mr. Rogers of being the one mainly responsible for stealing the produce. After listening to the tape, Mr. Rogers agreed to make restitution, although no amount was specified at that time. The next business day, Monday, February 2, Mr. Snyder telephoned Mr. Rogers and agreed to rehire him, stating that the parties would "straighten things out." Mr. Rogers returned to work that afternoon.
On February 7, 1981, Mr. and Mrs. Snyder went to the home of Mr. and Mrs. Rogers. There, after some conversation, which will be discussed later, Mr. and Mrs. Rogers executed, under seal, a note by which they promised to pay Mr. and Mrs. Snyder $30,000, with interest, and authorized confession of judgment. Slip opinion of tr.ct., Decision and Verdict, at 4.[2] On February 10 appellants confessed judgment on the note, in the amount of $30,000 plus interest, costs of suit, release of errors, and a collection fee of 10 *508 percent. Notice of entry of the judgment was mailed to Mr. and Mrs. Rogers.
Over the next eight months, Mr. and Mrs. Rogers made payments on the note totalling $13,980. When the payments stopped, Mr. and Mrs. Snyder threatened execution on the judgment. On October 20, 1981, Mr. and Mrs. Rogers filed a petition to open the judgment raising the defenses of fraud and duress. The trial court granted the petition. Mr. and Mrs. Snyder appealed to this court, but the appeal was discontinued and the case was returned for trial.
At the conclusion of the trial, the court, sitting without a jury, found in favor of Mr. and Mrs. Snyder in the amount of $16,020 plus interest, a collection fee of 10 percent, and record costs. The finding, however, was against Mr. Rogers only. Mr. and Mrs. Snyder filed exceptions to the court's determination that Mrs. Rogers was not liable on the note. The court dismissed the exceptions, judgment was entered accordingly, and this appeal followed.
The trial court found that Mrs. Rogers, to whom we will hereafter refer as appellee, was not liable on the note because her promise was "nudum pactum" and as such, unenforceable. Slip Opinion of the Court, at 3. Appellants argue that this conclusion is erroneous on several grounds. We shall not, however, address all of appellants' arguments. Even assuming the correctness of their arguments, either that consideration for the note was unnecessary because it was under seal, or that appellee received consideration, Brief for Appellants at 13-14, 16-18, still, we decline to enforce the note against appellee, for the record discloses that the note was an unconscionable contract and therefore against public policy. Germantown Manufacturing Co. v. Rawlinson and Rawlinson, 341 Pa.Super. 42, 491 A.2d 138 (1985) (where confession of judgment clause in note unconscionable, court will not bind party to it); Restatement (Second) of Contracts, § 208 (1979) (court may refuse to enforce unconscionable contract). Cf. Standard Venetian Blind Co. v. American Empire Insurance Co., *509 503 Pa. 300, 307, 469 A.2d 563, 567 (1983) ("[A] court may on occasion be justified in deviating from the plain language of a contract of insurance. See 13 Pa.C.S. § 2302 (court may refuse to enforce contract or any clause of contract if court as a matter of law deems the contract or any clause of the contract to have been `unconscionable at the time it was made').").
"It is impossible to formulate a precise definition of the unconscionability concept." Bishop v. Washington, 331 Pa.Super. 387, 399, 480 A.2d 1088, 1094 (1984). As other courts have done, however, we turn to Judge SKELLY WRIGHT's definition:
Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.
Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 (D.C.Cir. 1965) (footnote omitted).
See also Witmer v. Exxon Corp., 495 Pa. 540, 551, 434 A.2d 1222, 1228 (1981); Bishop v. Washington, supra 331 Pa.Super. at 400, 480 A.2d at 1094.
To determine whether appellee made a "meaningful choice", when she signed the note, we must consider her bargaining position and determine whether it was grossly inferior to appellants'. Cf. Restatement (Second) of Contracts § 208, Comment d (1979).
As already mentioned, before she signed the note appellee had heard a tape recording of Teddy accusing her husband of being the main actor in the thefts from appellants' business. N.T. 47-48. Appellee testified that she was concerned to protect her husband's name:
And Mr. Snyder said, "Well, your husband's name will be blown up in the newspapers," that this will happen. I couldn't see this happening to Jim [her husband].
N.T. 51.
[Mr. Snyder] said, "I kept it out of the paper but it will be put in the paper." Jim has been too honest all his life to *510 have something like this happen at this late stage. So, Jim looked over at me, he said, "Please sign it because," he says, "I don't want my name in the paper. Please."
So I signed it.
N.T. 51.
So, this is why I went ahead and did what I did, to keep Jim's name out of the paper and to keep everything clear.
N.T. 53.
Appellants, indeed, effectively concede appellee's concern to protect her husband's name; one of their arguments is that their forbearance in not going to the newspapers represented lawful consideration. Brief for Appellants at 16-18.
Appellee also testified that during the February 7th meeting, when appellants asked her husband and her to sign the note, she said that she would like to consult an attorney, but appellants dissuaded her: "Mr. Snyder told me I didn't need one, that everything was on the up and up." N.T. 52. Although it was too late, appellee did consult an attorney promptly after being informed that judgment had been confessed. N.T. 57-59.[3]
Even if we assume that appellee understood the terms of the note she was signing, and its confession clause, we cannot find that in signing it she made a "meaningful choice." Appellants had a damaging tape recording; they suggested that adverse publicity was likely to follow if she did not sign the note; her husband pleaded with her to sign it; and finally, she had no opportunity to consult with anyone not a party to the note. Her bargaining position was indeed grossly inferior to appellants'. See and compare Germantown Manufacturing Co. v. Robert J. Rawlinson, Jr. and Joan Rawlinson, supra, where the facts *511 were significantly similar. Mrs. Rawlinson had co-signed two notes to satisfy a loss suffered by her husband's former employer because of her husband's embezzlement. On appeal from the order opening the judgment confessed on the notes, this court found that she had a meritorious defense on the ground of unconscionability. We stated in part:
[E]ven assuming she [Mrs. Rawlinson] read and understood the confession of judgment in all of its star-chamber ramifications, she did not genuinely assent to it because the clause was adhesive. . . . It is difficult to conceive of a greater lack of choice than that which faced Mrs. Rawlinson. . . . We will not bind her to a clause to which she could not refuse her "assent."
Id. 341 Pa.Super. at 59, 491 A.2d at 147-148 (emphasis in original).
The remaining question is whether the terms of the note, in particular, those terms obligating appellee to make payment, were "unreasonably favorable" to appellants. Williams v. Walker-Thomas Furniture Co., supra. We find that the terms were unreasonably favorable, for they gave appellants an advantage they were not entitled to. Nothing in the record indicates, and appellants do not argue, that appellee had anything to do with her husband's theft from appellants. Cf. N.T. 88-89. Appellants evidently did not pursue the criminal prosecution of Mr. Rogers. Instead, despite appellee's innocence of the theft, appellants sought to ensure recovery of their loss by obtaining appellee's signature to the note, thereby putting themselves in the position, they believed, of being able to execute against her resources. Appellants were aware of those resources: Mr. Rogers testified that he and Mr. Snyder had had a conversation before the note was signed in which they discussed appellee's certificate of savings as expected to yield at maturity approximately $25,000, N.T. 39; and appellee testified that after the tape recording was played, Mr. Snyder asked her whether she had any money and she admitted *512 that she had inherited some money from her father that she had put into a certificate of savings, N.T. 48, 49.
Whether a contract is unconscionable is a matter of law, to be determined by the court. Bishop v. Washington, supra 331 Pa.Super. at 399, 480 A.2d at 1094. We hold that as to appellee, the note was unconscionable. In signing the note, appellee did not make a "meaningful choice", and the terms of the note were "unreasonably favorable" to appellants. Williams v. Walker-Thomas Furniture Co., supra. We therefore decline to enforce the note as against public policy.
Affirmed.
NOTES
[1] The judgment against defendant husband has not been challenged. This appeal concerns only defendant wife's liability, and she is appellee here.
[2] Plaintiffs' Exhibit No. 1 is the promissory note. It is dated February 7, 1981, and states:
One day after date we promise to pay to the order of Lambert & Cindy Snyder THIRTY THOUSAND 30,000 ______ dollars with defalcation, value received, with interest.
And further we do hereby authorize and empower the Prothonotary, Clerk of Court or any Attorney of any Court of Record of Pennsylvania, or elsewhere, to appear for and to confess Judgment against us for the above sum, as of any term, past, present or future, with or without declaration, with costs of suit, release of errors, without stay of execution, and with 10 per cent added for collecting fees; and we also waive the right of inquisition on any real estate that may be levied upon to collect this note, and do hereby voluntarily condemn the same, and authorize the Prothonotary to enter upon the writ of execution our said voluntary condemnation, and we further agree that said real estate may be sold on a writ of execution and we hereby waive and release all relief from any and all appraisement, stay or exemption laws of any State, now in force, or hereafter to be passed.
Witness, ______________________ /s/ James M. Rogers, Jr. (SEAL)
______________________ /s/ Joanne M. Rogers (SEAL)
[3] Cf. Germantown Manufacturing Co. v. Rawlinson and Rawlinson, 341 Pa.Super. 42, 491 A.2d 138 (1985), where a similar situation prompted the following comment: "This [the case presented in Palatucci v. Woodland, 166 Pa.Super. 315, 70 A.2d 674 (1950)] differs from the instant case where appellee's option of consulting counsel before executing the note was not a viable one as such an action may have been deemed `noncompliance' by, the appellant thus resulting in the prosecution of Mr. Rawlinson which appellee so dreaded." Id., 341 Pa.Superior Ct. at 50 n. 2, 491 A.2d at 142 n. 2.
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46 F.3d 1146
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.UNITED STATES of America, Plaintiff-Appellee,v.Constantino Santos CORRAL, Defendant-Appellant.
No. 93-50779.
United States Court of Appeals, Ninth Circuit.
Submitted Jan. 11, 1995.*Decided Jan. 24, 1995.
1
Before: CANBY and NOONAN, Circuit Judges, and KING, District Judge.
2
MEMORANDUM**
3
Constantino Santos Corral appeals the ten year sentence imposed upon him under 21 U.S.C. Sec. 841(b) after he pled guilty to possession with intent to distribute cocaine. He argues that the government's refusal to move for a downward departure for substantial assistance was unconstitutional and arbitrary, and that the district court erred in refusing to depart downward after the government refused to file a substantial assistance motion. This court has jurisdiction under 18 U.S.C. Sec. 3742.
FACTS
4
On September 30, 1992, Corral pled guilty to one count of possession of cocaine with intent to distribute in violation of 21 U.S.C. Sec. 841(a)(1). Section 841(a)(1) carries a mandatory minimum sentence of ten years.
PROCEEDINGS
5
The written plea agreement advises Corral of the statutory ten year minimum sentence and notes that the district court must impose that sentence unless the U.S. Attorney's Office moves for a downward departure under USSG Sec. 5K1.1 for substantial assistance. It provides that the decision whether or not to move for a downward departure is within the sole discretion of the government.
6
The government admitted at sentencing that Corral had cooperated to the fullest extent possible and given the government every piece of useful information he possessed. The government refused, however, to move for a downward departure for substantial assistance on the ground that it had been "unable to do anything" with the information that Corral had provided. That was clearly the case; Corral gave information only about the man he worked for, who had left this country for Colombia.
7
Corral's attorney moved for a downward departure on the ground that Corral was merely a "mule" for the distributors, that this incident was an aberration in his otherwise upright life, that he had accepted responsibility for his actions, and that he had provided substantial assistance.
8
District Judge John Davies noted that it was "one of those truly unfortunate situations" where an undeserving defendant gets "caught up in the mandatory minimum." The Judge went on to note that "if ever there was a case where the application of a mandatory minimum is unfair, this is it," and that "it's draconian ... to send this man to jail for 10 years for what he did. Ten years in a federal penitentiary is too much, some lesser sentence is appropriate."
9
Judge Davies concluded, however, that absent a motion by the government for a downward departure he had no discretion to depart below the statutory minimum of ten years. "The only flexibility arises from the government's willingness to file a 5K1.1 motion, and apparently the government has chosen not to."
10
Corral moved for bail pending appeal. Judge Davies denied the motion on the ground that Corral had not met his burden of raising a substantial question for appeal, noting that "even if the defendant made every effort to assist the government, [the government] could choose not to request a reduction in sentence as long as it was not acting arbitrarily or on a class-based animus. The defendant has made no showing that the government acted impermissibly." He also noted that absent a government motion for downward departure, the court had no discretion to depart below the ten year statutory minimum required by 21 U.S.C. Sec. 841(b).
ANALYSIS
11
I. The District Court Did Not Err In Holding That The Government's Refusal To Move For A Downward Departure Was Neither Arbitrary Nor Unconstitutional
12
Corral argues that the district court erred when it declined to review the government's refusal to file a substantial assistance motion.
13
"[A] district court can review a prosecutor's refusal to file a substantial assistance motion and grant relief if the court finds that the refusal was based upon an unconstitutional motive, such as race or religion, or that the refusal was not rationally related to any legitimate state objective." U.S. v. Delgado-Cardenas, 974 F.2d 123, 126 (9th Cir.1992), citing Wade v. united States, 112 S.Ct. 1840, 1943-44 (1992).
14
This court reviews the legality of Corral's sentence de novo. Id. However, factual findings of the district court are reviewed for clear error. Id.
15
Corral argued that the government's motives for refusing to file a substantial assistance motion were arbitrary and constitutionally suspect; arbitrary because the refusal was based on an illegitimate and irrational hope that Corral's unreduced sentence would lead to substantial assistance in the future, constitutionally suspect because that hope was related to Corral's nationality. Judge Davies rejected these arguments, finding that the government's motives were neither arbitrary nor unconstitutional.
16
That finding was not clearly erroneous. It was not irrational for the government to conclude that Corral's assistance had not proven to be substantial, and that a downward departure was consequently not warranted. We also agree with the district judge that there is no evidence of racial animus in the government's refusal to file for downward departure.
17
Hence the district court did not err in declining to review the government's refusal to file a substantial assistance motion.
18
II. The District Court Had No Discretion To Depart Below The Statutory Minimum Sentence
19
Corral argues that the district court should have departed below the statutory minimum sentence despite the government's refusal to file a substantial assistance motion.
20
A district court may impose a sentence below the statutory minimum only if, upon motion of the government, the court finds the defendant offered substantial assistance. U.S. v. Sharp, 883 F.2d 829, 831 (9th Cir.1989), citing 18 U.S.C. Sec. 3553(e). The provision allowing for a downward departure upon motion by the government, U.S.S.G. Sec. 5K1.1, "is the only section that allows a downward departure from a statutorily required minimum sentence." U.S. v. Valente, 961 F.2d 133, 135 (9th Cir.1992).
21
Hence, although the ten year minimum sentence required by the statute was clearly draconian given Corral's circumstances, the court had no discretion to depart below the minimum sentence absent a substantial assistance motion from the government.
22
We AFFIRM the decision of the district court to sentence Corral to the statutory minimum of 10 years.
*
The panel finds this case appropriate for submission without argument pursuant to 9th Cir.R. 34-4 and Fed.R.App.P. 34(a)
**
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3
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341 U.S. 105 (1951)
CALIFORNIA STATE AUTOMOBILE ASSOCIATION INTER-INSURANCE BUREAU
v.
MALONEY, INSURANCE COMMISSIONER.
No. 310.
Supreme Court of United States.
Argued March 8, 1951.
Decided April 23, 1951.
APPEAL FROM THE DISTRICT COURT OF APPEAL OF CALIFORNIA, FIRST APPELLATE DISTRICT.
Moses Lasky argued the cause for appellant. With him on the brief were Maurice E. Harrison and Herman Phleger.
Harold B. Haas, Deputy Attorney General of California, argued the cause for appellee. With him on the brief were Edmund G. Brown, Attorney General, and T. A. *106 Westphal, Jr., Deputy Attorney General. Fred N. Howser, then Attorney General, was with Mr. Haas and Mr. Westphal on a motion to dismiss or affirm.
Nathaniel L. Goldstein, Attorney General, Wendell P. Brown, Solicitor General, and John C. Crary, Jr., Assistant Attorney General, filed a brief for the State of New York, as amicus curiae, supporting appellee.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
Appellant is an unincorporated association which the California District Court of Appeal analogizes to a mutual insurance corporation. The details of its organization and operation are not important here. It is supervised by the Insurance Commissioner of California, like other insurance companies doing a liability insurance business. It was formed to write automobile insurance to a select group of members at a lower cost than the then prevailing rate. A California law requiring proof of financial responsibility from certain people before issuing them a license to drive a car, provides that a person who does not pay a judgment of $100 or more arising out of an automobile accident has his driver's license suspended, and the suspension can be lifted only by paying the judgment and establishing his ability to pay claims arising from future accidents. That ability to pay may be established by proof that the person is insured, by posting a surety bond, or by deposit of $11,000 in cash. Cal. Vehicle Code, 1943, §§ 410, 414. Another law requires operators of trucks for hire to supply such evidence of financial responsibility before they may get permits to operate trucks. Cal. Stat. 1935, c. 312.
One result of these laws was to make it impossible for a large number of driversclassified as poor risks by the insurance companies and not possessing enough resources *107 to get a surety bond or to make the cash depositto receive drivers' licenses to operate motor vehicles. Some of these people were poor risks, others were not. Many hardship cases developed among people who were dependent on the use of the highways for a living. There was a proposal that California go into the insurance business and insure these and other risks. The insurance companies countered by adopting a voluntary assigned risk plan under which all automobile insurance companies doing business in California undertook to insure some, though not all, of the groups unable to obtain insurance. This plan, approved by California's Insurance Department, provided for the allocation of applicants to the subscribing insurers in proportion to the amount of automobile insurance written by each in the preceding year.
The voluntary plan did not reach all applicants. Moreover, appellant withdrew from it, causing the other insurers to be reluctant to continue it. Thereupon the legislature enacted the Compulsory Assigned Risk Law. Cal. Stat. 1947, c. 39, p. 525, as amended, c. 1205. It provides that the Insurance Commissioner shall approve "a reasonable plan for the equitable apportionment" among insurers of applicants for automobile insurance "who are in good faith[1] entitled to but are unable to procure such insurance through ordinary methods." Cal. Ins. Code, 1947, § 11620. It is mandatory on all insurers to subscribe to the plan. Id. §§ 11625, 11626.
*108 The plan approved by the Commissioner was objectionable to appellant, who refused to subscribe to it. The Commissioner, acting pursuant to authority granted him, suspended appellant's permit to transact automobile liability insurance in California. Appellant contested the suspension in the California courts. The District Court of Appeal sustained the act against the claim that it violated the Due Process Clause of the Fourteenth Amendment. 96 Cal. App. 2d 876, 216 P. 2d 882. A petition for hearing was denied by the Supreme Court. The case is here on appeal. 28 U. S. C. § 1257 (2).
Appellant assails the constitutionality of the Act under the Due Process Clause of the Fourteenth Amendment on the following grounds: it commands insurers to enter into contracts and to incur liabilities against their will; it forces on insurers contracts that have abnormal risks and from which financial loss may be expected; it requires appellant to alter its type of business from a cooperative with a select membership to a venture insuring members of the general public.
Appellant in support of its contentions presses Michigan Commission v. Duke, 266 U. S. 570, and Frost Trucking Co. v. Railroad Comm'n, 271 U. S. 583, on us. Those cases held that private carriers by motor vehicle could not consistently with Due Process be converted into public carriers by legislative fiat nor be allowed to use the public highways only on condition that they become common carriers. We put those cases to one side. To be sure, appellant is required to insure members of a different group than the select one it voluntarily undertook to serve. But there are important restrictions on the financial commitments incident to the broadened undertaking. We were advised on the argument that the premiums chargeable can be commensurate with the greater risks of the new business. Confiscation is therefore not a factor in the case. Moreover, the California statute provides *109 for an equitable apportionment of the assigned risks among all insurers, not that appellant serve all comers. Furthermore, uninsurable risks are eliminated from the plan; and policies issued may provide limited coverage of $5,000-$10,000.
The case in its broadest reach is one in which the state requires in the public interest each member of a business to assume a pro rata share of a burden which modern conditions have made incident to the business. It is therefore not unlike Noble State Bank v. Haskell, 219 U. S. 104, which sustained a state law assessing each state bank for the creation of a depositors' guaranty fund. What was there said about the police powerthat it "extends to all the great public needs" and may be utilized in aid of what the legislative judgment deems necessary to the public welfare (p. 111)is peculiarly apt when the business of insurance is involveda business to which the government has long had a "special relation."[2] See Osborn *110 v. Ozlin, 310 U. S. 53, 65, 66. Here, as in the banking field, the power of the state is broad enough to take over the whole business, leaving no part for private enterprise. Mountain Timber Co. v. Washington, 243 U. S. 219; Osborn v. Ozlin, supra, p. 66. The state may therefore hold its hand on condition that local needs be serviced by the business. Osborn v. Ozlin, supra, was such a case; it sustained on that theory Virginia's law requiring Virginia residents to have a share in writing casualty and surety risks in Virginia. The principle of Osborn v. Ozlin now presses for recognition in a situation as acute as any with which the states have had to deal. Highway accidents with their train of property and personal injuries are notoriously important problems in every community. Clearing the highways of irresponsible drivers, devising ways and means for making sure that compensation is awarded the innocent victims, and yet managing a scheme which leaves the highways open for the livelihood of the deserving are problems that have taxed the ingenuity of law makers and administrators.
Whether California's program is wise or unwise is not our concern. See Olsen v. Nebraska, 313 U. S. 236; Lincoln Union v. Northwestern Co., 335 U. S. 525. The problem is a local one on which views will vary. We cannot say California went beyond permissible limits when it made the liability insurance business accept insurable risks which circumstances barred from insurance *111 and hence from the highways. Appellant's business may of course be less prosperous as a result of the regulation. That diminution in value, however, has never mounted to the dignity of a taking in the constitutional sense. See Noble State Bank v. Haskell, supra, p. 110; Block v. Hirsh, 256 U. S. 135, 155.
Affirmed.
MR. JUSTICE BLACK would dismiss the appeal on the ground that the constitutional questions are frivolous.
NOTES
[1] Under the plan approved by the Commissioner, Cal. Administrative Code, 1947, Tit. 10, §§ 2400-2498, there are several categories of people excluded. Those excluded cover a wide range. The following are illustrative: those convicted more than once, within three years of application, of manslaughter or negligent homicide resulting from operation of the vehicle; those convicted more than twice, in the same three-year period, of driving while intoxicated or under the influence of liquor; those addicted to use of drugs. § 2431.
[2] State regulation of the insurance business has been upheld in a wide variety of circumstances against the claim that the law violated the Due Process Clause of the Fourteenth Amendment: See Hooper v. California, 155 U. S. 648, requirement of license and bond; Orient Insurance Co. v. Daggs, 172 U. S. 557, fixing recovery at insured value; Nutting v. Massachusetts, 183 U. S. 553, license and deposit of security; Carroll v. Greenwich Insurance Co., 199 U. S. 401, prohibition of combinations or agreements between companies; Northwestern Life Ins. Co. v. Riggs, 203 U. S. 243, limitation of defenses; Whitfield v. Aetna Life Ins. Co., 205 U. S. 489, same; German Alliance Ins. Co. v. Hale, 219 U. S. 307, statutory penalty against rate-fixing combinations; German Alliance Ins. Co. v. Lewis, 233 U. S. 389, rate regulations; Mountain Timber Co. v. Washington, 243 U. S. 219, workmen's compensation act; La Tourette v. McMaster, 248 U. S. 465, licensing of brokers; National Union Fire Ins. Co. v. Wanberg, 260 U. S. 71, limiting the time for rejection of hail insurance policies; Merchants Mutual Automobile Ins. Co. v. Smart, 267 U. S. 126, regulation of liability under indemnity policies; Aetna Insurance Co. v. Hyde, 275 U. S. 440, rate regulations; O'Gorman & Young v. Hartford Fire Ins. Co., 282 U. S. 251, regulation of agents' commissions; Hardware Dealers Mutual Fire Ins. Co. v. Glidden Co., 284 U. S. 151, prescribing compulsory arbitration provisions; Life & Casualty Ins. Co. v. McCray, 291 U. S. 566, additional recovery for failure to pay on demand; Osborn v. Ozlin, 310 U. S. 53, requiring participation by resident agents; Hoopeston Canning Co. v. Cullen, 318 U. S. 313, regulation of reciprocal insurance associations; State Farm Mutual Automobile Ins. Co. v. Duel, 324 U. S. 154, reserve requirements; Robertson v. California, 328 U. S. 440, licensing of brokers; Daniel v. Family Security Life Ins. Co., 336 U. S. 220, separation of life insurance and undertaking businesses.
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455 S.E.2d 84 (1995)
216 Ga. App. 487
JOHNSTON
v.
ADERHOLD.
No. A94A2687.
Court of Appeals of Georgia.
March 6, 1995.
Certiorari Denied May 19, 1995.
*85 Morris, Manning & Martin, Warren W. Wills, Jr., Atlanta, for appellant.
Cofer, Beauchamp & Butler, Frank R. Seigel, Atlanta, for appellee.
SMITH, Judge.
James Johnston filed a pro se action against Thomas Aderhold. Johnston and Aderhold, along with Ron Jordan, had been shareholders in a failed corporation, Atlanta Sash & Door, Inc. (ASD). Johnston, an attorney, sought a declaration that an indemnity agreement he executed is void because of Aderhold's alleged fraud and self-dealing as chief financial officer of the failed corporation. Johnston also sought damages resulting from Aderhold's alleged fraud in connection with a promissory note Aderhold executed to pay off certain liabilities of the corporation. Aderhold moved the trial court to disqualify Johnston from representing himself, alleging that Johnston had previously represented Aderhold in defending similar allegations made by Jordan in a suit against the corporation. Aderhold alleged that in the course of that prior representation he revealed confidential information to Johnston, and that in representing himself in this action Johnston breached the canons of professional ethics and the disciplinary rules of the State Bar. The trial court granted Aderhold's motion to disqualify Johnston and certified the order for immediate review. We granted Johnston's application for interlocutory appeal.
1. Johnston first contends the trial court erroneously disqualified him from representing himself because his right to do so is express and unequivocal under Art. I, Sec. I, Par. XII of the Ga. Const. of 1983. We agree.
*86 Art. I, Sec. I, Par. XII of the Ga. Const. of 1983 provides: "No person shall be deprived of the right to prosecute or defend, either in person or by an attorney, that person's own cause in any of the courts of this state." This language is plain and unambiguous. Case law has also construed this provision as having been primarily intended to guarantee the right of self-representation. See Dobbins v. Dobbins, 234 Ga. 347, 216 S.E.2d 102 (1975).
The constitutional provision in issue formerly provided that no person shall be deprived of the right to prosecute or defend his own cause in any of the courts of this state "in person, by attorney, or both." Ga. Const. of 1976, Art. I, Sec. I, Par. IX. We cannot agree with Aderhold's argument that the omission of the phrase "or both" from the 1983 version means that either form of representation is sufficient to satisfy the constitution and that Johnston in this case must be represented by an attorney.
In Cherry v. Coast House, Ltd., 257 Ga. 403, 405-406(3), 359 S.E.2d 904 (1987), the Supreme Court upheld an attorney's right to represent himself at trial in the face of allegations of conflict of interest. Affirming the trial court's disqualification of the attorney from representing another party, the Supreme Court nevertheless reversed that portion of the trial court's order disqualifying the attorney from representing himself, basing its holding on the Georgia constitutional provision guaranteeing the right of self-representation in our courts.
The attorney/party in Cherry was also represented by other counsel. The Supreme Court held that the attorney's rights under the constitutional provision may be limited in order to preserve the trial court's power to control the litigation: if the attorney/client and his counsel are unable to "speak with one voice" the trial court may appoint a single lead counsel. However, the right to self-representation does not "evaporate [even] when an attorney is hired." Id. at 406(3), 359 S.E.2d 904.[1]
Here, there is less factual basis for disqualification than in Cherry. Johnston has not hired other counsel. Instead, he has chosen to stand on his constitutionally guaranteed right to appear pro se, and he should be permitted to do so.
It is true, as pointed out by Aderhold, that no right guaranteed by the Constitution is absolute. The rights of the individual "must be adjusted to the rights of others." Durham v. State, 219 Ga. 830, 835-836, 136 S.E.2d 322 (1964). Nonetheless, we are aware of no right of Aderhold's that would require "adjustment" of Johnston's right to represent himself, nor do we perceive any harm to Aderhold that would be cured by forcing him to retain counsel in this case. If Johnston were to retain counsel, he presumably would disclose to counsel his knowledge of these matters in order that counsel be able to represent him properly. Moreover, disqualification would not prevent Johnston from testifying as a party to the alleged confidential matters. Aderhold's concern that Johnston's attempt to represent himself "would unfairly hinder [Aderhold's] right to a fair trial" because he "would want to object to each attempt at disclosure of attorney/client confidences" could fairly be addressed by evidentiary rulings at trial.
2. We are unpersuaded as well that the Rules of the State Bar of Georgia should be applied to Johnston when he is acting not as an attorney but as a party to the litigation. The Rules provide that the State Bar is authorized "to maintain and enforce ... in rules ... standards of conduct to be observed by [its] members ... and those authorized to practice law in the State of Georgia and to punish the violation thereof." State Bar Rule 4-101. The standards of conduct are set forth in Rule 4-102. Standard 69 provides, in pertinent part, that "[a] lawyer shall not represent a client whose interests are adverse to the interests of a former client of the lawyer in any matter substantially related to the matter in which the lawyer represented the former client unless he has *87 obtained written consent of the former client after full disclosure."
The conflict between this prohibition and Art. I, Sec. I, Par. XII of the Constitution under circumstances such as these, when a member of the bar is acting as a party to litigation, rather than as an attorney, has never been squarely addressed by our courts. It is not surprising, therefore, that none of the cases cited by Aderhold in support of his position is directly on point. We note that no question exists that an attorney may be disqualified from exercising the licensed privilege of representing others in a particular proceeding. Crawford W. Long Mem. Hosp., etc. v. Yerby, 258 Ga. 720, 722, 373 S.E.2d 749 (1988), cited by the trial court in support of its disqualification order, involved such a situation. This case presents a more difficult issue: whether a citizen of this state may be prevented from exercising his constitutionally guaranteed right to represent himself because he is also an attorney who has provided representation in the past to an opposing party. We conclude that, at least under the circumstances presented here, he may not.
Although we have found no Georgia cases on this precise issue, our research has revealed cases from other jurisdictions reversing orders disqualifying attorneys from representing themselves or from participating in varying degrees in the trial of actions in which they are parties, based on similar state constitutional or statutory authority. See, e.g., State v. Bates, 62 Ohio St.3d 6, 577 N.E.2d 347 (1991) (reversing order requiring attorney/parties to retain counsel in reliance on previous Ohio decision, Svoboda v. City of Brunswick, 6 Ohio St.3d 348, 453 N.E.2d 648, 649-650 (1983), which held that prohibition against practice of law by lay persons does not prevent lay persons from representing themselves); Ayres v. Canales, 790 S.W.2d 554 (Tex.1990) (reversing trial court's order prohibiting attorney/party and his firm from verbally participating in trial concerning whether referral fee owed opposing attorney/party); Walker & Bailey v. We Try Harder, 123 A.D.2d 256, 506 N.Y.S.2d 163 (1986) (reversing trial court's order disqualifying attorney/parties from acting as trial counsel).
Common to several of these cases is the principle that although rules of professional conduct preclude attorneys from engaging in certain behavior considered unethical when they are exercising their privilege of representing others, such prohibitions do not necessarily apply when attorneys exercise their right, either statutory or constitutional, to represent themselves as parties to litigation. See, e.g., Ayres, supra; Walker & Bailey, supra, 506 N.Y.S.2d at 164.[2] We agree with that principle and find it applicable to the facts in this case. This is also in harmony with the established practice of our courts of weighing each case on its particular set of facts. "The rules of disqualification of an attorney will not be mechanically applied; rather, we should look to the facts peculiar to each case in balancing the need to ensure ethical conduct on the part of lawyers appearing before the court and other social interests, which include the litigant's right to freely chosen counsel. [Cit.]" Stoddard v. Bd. of Tax Assessors, 173 Ga.App. 467, 468(1), 326 S.E.2d 827 (1985).
Looking both to the plain meaning of the constitutional provision and the social interests involved here, we conclude that the trial court abused its discretion in disqualifying Johnston. The disqualification must be reversed.
Judgment reversed.
McMURRAY and POPE, P.JJ., concur.
NOTES
[1] This is contrary to the rule for non-attorneys. Because the risk is significantly higher that lay persons representing themselves will disrupt the proceedings, they do not have the right to be represented by counsel and also represent themselves. Seagraves v. State, 259 Ga. 36, 38-39, 376 S.E.2d 670 (1989).
[2] In fact, the State Bar of Texas has apparently recently adopted new Disciplinary Rules of Professional Conduct that exempt lawyers from the application of certain rules that would otherwise disqualify them from litigation if they are parties to the action and appear pro se. See Ayres, supra at 556.
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535 U.S. 977
MADRIGAL-TRUJILLOv.UNITED STATES.
No. 01-8608.
Supreme Court of the United States.
April 1, 2002.
1
C. A. 5th Cir. Certiorari denied. Reported below: 265 F. 3d 276.
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In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 19-0137V
UNPUBLISHED
BRITTA SCHWARTZ, Chief Special Master Corcoran
Petitioner, Filed: June 25, 2020
v.
Special Processing Unit (SPU);
SECRETARY OF HEALTH AND Damages Decision Based on Proffer;
HUMAN SERVICES, Influenza (Flu) Vaccine; Shoulder
Injury Related to Vaccine
Respondent. Administration (SIRVA)
Bridget Candace McCullough, Muller Brazil, LLP, Dresher, PA, for petitioner.
Lisa Ann Watts, U.S. Department of Justice, Washington, DC, for respondent.
DECISION AWARDING DAMAGES1
On January 28, 2019, Britta Schwartz filed a petition for compensation under the
National Vaccine Injury Compensation Program, 42 U.S.C. §300aa-10, et seq.,2 (the
“Vaccine Act”). Petitioner alleges that she suffered a left shoulder injury related to
vaccine administration (“SIRVA”), a Table Injury, due to an influenza (“flu”) vaccine
administered on October 5, 2016. Petition at ¶¶ 1-15. Petitioner further alleges that she
suffered the sequela of her injury for more than six months. Petition at 3. The case was
assigned to the Special Processing Unit of the Office of Special Masters.
On March 20, 2020, a ruling on entitlement was issued, finding Petitioner entitled
to compensation for SIRVA. On June 25, 2020, Respondent filed a proffer on award of
compensation (“Proffer”) indicating Petitioner should be awarded $65,000.00 for her
past and future pain and suffering. Proffer at 1. In the Proffer, Respondent represented
1
Because this unpublished decision contains a reasoned explanation for the action in this case, I am
required to post it on the United States Court of Federal Claims' website in accordance with the E-
Government Act of 2002. 44 U.S.C. § 3501 note (2012) (Federal Management and Promotion of
Electronic Government Services). This means the decision will be available to anyone with access
to the internet. In accordance with Vaccine Rule 18(b), Petitioner has 14 days to identify and move to
redact medical or other information, the disclosure of which would constitute an unwarranted invasion of
privacy. If, upon review, I agree that the identified material fits within this definition, I will redact such
material from public access.
2
National Childhood Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755. Hereinafter, for
ease of citation, all “§” references to the Vaccine Act will be to the pertinent subparagraph of 42 U.S.C. §
300aa (2012).
that Petitioner agrees with the proffered award. Id. Based on the record as a whole, I
find that Petitioner is entitled to an award as stated in the Proffer.
Pursuant to the terms stated in the attached Proffer, I award Petitioner a lump
sum payment of $65,000.00, in the form of a check payable to Petitioner. This
amount represents compensation for all damages that would be available under § 15(a).
The clerk of the court is directed to enter judgment in accordance with this
decision.3
IT IS SO ORDERED.
s/Brian H. Corcoran
Brian H. Corcoran
Chief Special Master
3
Pursuant to Vaccine Rule 11(a), entry of judgment can be expedited by the parties’ joint filing of notice
renouncing the right to seek review.
2
IN THE UNITED STATES COURT OF FEDERAL CLAIMS
OFFICE OF SPECIAL MASTERS
BRITTA SCHWARTZ,
Petitioner,
v. No. 19-137V
Chief Special Master Corcoran
SECRETARY OF HEALTH AND ECF
HUMAN SERVICES,
Respondent.
RESPONDENT’S PROFFER ON AWARD OF COMPENSATION
On January 28, 2019, Britta Schwartz (“petitioner”) filed a petition for vaccine injury
compensation alleging that she suffered a left shoulder injury related to vaccine administration
(“SIRVA”), a Table Injury, due to an influenza (“flu”) vaccine administered on October 5, 2016.
Respondent filed his Rule 4(c) Report conceding entitlement to compensation on March 20, 2020.
The Court issued a Ruling on Entitlement that same day.
I. Items of Compensation
Based upon the evidence of record, respondent proffers that petitioner should be awarded
a lump sum of $65,000.00 for her past and future pain and suffering. This represents all elements
of compensation to which petitioner would be entitled under 42 U.S.C. § 300aa-15(a). 1
Petitioner agrees.
1
Petitioner’s medical costs were paid by Worker’s Compensation. See Exhibit 7. Should
petitioner die prior to entry of judgment, the parties reserve the right to move the Court for
appropriate relief. In particular, respondent would oppose any award for future damages.
1
II. Form of the Award
The parties recommend that the compensation provided to petitioner should be made
through a lump sum payment of $65,000.00 in the form of a check payable to petitioner. 2
Petitioner agrees.
Respectfully submitted,
JOSEPH H. HUNT
Assistant Attorney General
C. SALVATORE D’ALESSIO
Acting Director
Torts Branch, Civil Division
CATHARINE E. REEVES
Deputy Director
Torts Branch, Civil Division
DARRYL R. WISHARD
Assistant Director
Torts Branch, Civil Division
s/Lisa A. Watts
LISA A. WATTS
Senior Trial Attorney
Torts Branch, Civil Division
U.S. Department of Justice
P.O. Box 146
Benjamin Franklin Station
Washington, D.C. 20044-0146
Tel.: (202) 616-4099
DATED: June 25, 2020
2
Petitioner is a competent adult. Proof of guardianship is not required in this case.
2
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266 A.2d 190 (1970)
Herman E. TAYLOR, individually, and as next friend for Michael E. Taylor, minor, Plaintiffs,
v.
Merton E. STEELE, Jr., a minor, by his Guardian Ad Litem, Doris M. Di Amario, Defendant.
Superior Court of Delaware, New Castle.
April 16, 1970.
Robert K. Payson, of Potter, Anderson & Corroon, Wilmington, for plaintiffs.
Alfred M. Isaacs, of Flanzer & Isaacs, Wilmington, for defendant.
*191 STOREY, Judge.
In this case, the defendant has moved for summary judgment against the plaintiff based on the defenses of contributory wantonness and/or assumption of risk.
The facts shall be stated in the light most favorable to the party against whom summary judgment is requested. Wilson v. Tweed, 209 A.2d 899 (Del. Supreme Ct.1965).
On February 9, 1969, plaintiff Michael Taylor, one of two passengers in an automobile operated by Merton (Timmy) E. Steele, was injured when the automobile collided with a tree on Moore's Lane, New Castle, Delaware. At the time of the accident plaintiff was 15 years old, did not have a driver's license, and did not know how to drive. The defendant was 17 years old and was licensed to drive an automobile.
The sequence of events leading up to the accident were as follows:
Timmy picked up Michael at the latter's house at approximately 8:00 P. M. Michael, Timmy, and several other boys then rode around for awhile in the car Timmy was driving. Sometime after 9:00 P. M. Timmy arranged for the purchase of 1½ cases of beer to be sent to the home of Eugene Smallwood (the other passenger in the car at the time of the accident). While at the Smallwood home, Michael saw Timmy drink six cans of Budweiser beer. Michael drank one can. After remaining at the Smallwood home for two hours, Timmy, Michael and Smallwood left in Timmy's car for Gino's Restaurant in Wilmington Manor. At Gino's, Timmy ate two cheeseburgers and french fries and drank a coke. After Gino's, Timmy drove to Alvin's house in Castle Hills, drinking a beer on the way. Timmy finished his beer at Alvin's and drank no more. During these short trips, Michael did not notice Timmy driving in any unusual manner. On the way to the Sherwood Diner, however, Timmy said he felt funny and needed some coffee. At the Sherwood Diner when Timmy went in for his coffee, Michael remained in the car, thinking that Timmy would return shortly. After waiting 30 minutes, Michael went into the diner and found Timmy the center of attraction. Someone pointed to Timmy and said to Michael "Get him out of here, he's drunk." Michael escorted Timmy from the diner. Michael admitted that Timmy could not walk properly and stated that he believed Timmy was intoxicated at that time. As Timmy and Michael entered the car, Michael told him to take it easy and go back to Castle Hills. Timmy drove back to Gino's, which was closed, and on the way Michael threw out a can of beer so Timmy would not drink it. Then as Timmy began driving again, Michael became concerned since Timmy was hunched over the wheel. Michael thought that Timmy might have been trying to see through the snow then coming down. At this time Timmy reversed direction of his car by turning from the southbound to the northbound lanes of traffic. In making the crossover Timmy missed the three northbound traffic lanes and drove the car on the shoulder of the road until he reached the Doghouse Restaurant a short distance down the road. Timmy never stopped at the Doghouse because Michael pushed the wheel over, directing the car onto the travel lane. Then Timmy drove the car farther up the duPont Highway and took the overpass for Route 41 toward Interstate 95 and Newport. At this time, Timmy was driving properly and was no longer hunched over the wheel. Timmy thereupon encountered no difficulty in driving along Interstate 95 to the Landers' Lane exit, and thence to Moore's Lane. At this time Moore's Lane was wet and slushy from the snowfall. Timmy accelerated the car to 70 miles per hour and was egged on by Eugene Smallwood. Michael told Timmy to slow down because he, Michael, was too young to die. Michael also said that he wanted to go home because Timmy was driving too fast. Shortly thereafter Timmy failed to negotiate a curve and collided with a tree.
*192 The question for determination is whether the facts compel a finding of contributory wantonness or assumption of risk by the plaintiff.
In Wagner v. Shanks, 194 A.2d 701 (Del. Supreme Ct.1963), a minor plaintiff sought recovery for damages suffered when a minor defendant was operating a motor vehicle which, while travelling at a high rate of speed, collided with a tree stump. One of the questions before the Court was whether the plaintiff's silence as to the high rate of speed would be sufficient to raise the issue of contributory wantonness on the part of the plaintiff. The Court said that:
"Thus, to be guilty of contributory wantonness, a plaintiff must do some overt act such as encouraging the driver, directing his course of action, etc. Mere silence on his part is not enough." Id. at 708.
and elsewhere that:
"However, a failure to exercise reasonable care on the part of the plaintiff is nothing more than contributory negligence. We have already indicated that this is no defense to defendant's reckless conduct. Under the specific circumstances of this case, we consider that (plaintiff's) failure, if in fact that is the case, to request (defendant) to drive more carefully is nothing more than contributory negligence. Hence, there is not sufficient evidence in this record to warrant on instruction by the trial court on the issue of contributory wantonness." Id. at 707.
In the instant case, Michael did not merely sit by passively while the defendant accelerated to 70 miles per hour. He requested that the defendant slow down and asked to be taken home because defendant was driving too fast. Further, in no way did Michael encourage Timmy to go faster; nor did he direct Timmy's course of action. As a matter of Delaware Law, then, Michael's conduct did not amount to contributory wantonness.
The defense of assumption of risk is available to the defendant and, if proven, would be a bar to recovery by the plaintiff. Bib v. Merlonghi, 252 A.2d 548 (Del. Supreme Ct.1969). In that case, however, the plaintiff voluntarily rode with the defendant, knew of defendant's intoxication, and had no compelling reason to ride with him. Such facts point to the Court's concern with the plaintiff's conduct in entering defendant's car and not with the subsequent conduct of plaintiff during the ride as in Wagner. Thus, in the instant case it is clear that the defense of assumption of risk would be applicable only with regard to plaintiff Michael Taylor's entering defendant's car at some point in the evening and, upon entering, impliedly consenting to take the risk involved in riding with the defendant.
Generally speaking, issues of negligence are not susceptible of summary judgment except when the moving party establishes the absence of a genuine issue of fact. Ebersole v. Lowengrub, 4 Storey 463, 180 A.2d 467 (1962). The moving party here has not demonstrated the absence of a genuine issue of fact with regard to assumption of risk. A jury could find that the plaintiff did not understand the risk he was taking or whether he was able to extricate himself from the situation. And the extent of plaintiff minor's assumption of risk, if any, will have to be measured by his maturity, ability to understand the danger, and all other circumstances of the case. O'Hara v. Petrillo Bros., Inc., 216 A.2d 672 (Del. Supreme Ct. 1966).
Accordingly, the defendant's motion for summary judgment is denied.
It is so ordered.
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667 F.3d 886 (2012)
UNITED STATES of America, Plaintiff-Appellee,
v.
Armando NAVARRETE, Defendant-Appellant.
No. 10-1543.
United States Court of Appeals, Seventh Circuit.
Argued November 2, 2011.
Decided January 19, 2012.
*887 Manish S. Shah (argued), Attorney, Office of the United States Attorney, Chicago, IL, for Plaintiff-Appellee.
Hannah V. Garst (argued), Attorney, Chicago, IL, for Defendant-Appellant.
Before EASTERBROOK, Chief Judge, and POSNER and WOOD, Circuit Judges.
POSNER, Circuit Judge.
A jury convicted the defendant of defrauding LaSalle Bank, a large bank in Chicago (later acquired by Bank of America), in violation of federal bank-fraud law, and of related federal offenses. The district judge sentenced him to 96 months in prison and ordered him to forfeit the money that he had obtained from the fraud, which the judge determined to be $16,241,202, plus property that he had bought with proceeds of the fraud, and to pay restitution to the bank also in the amount of $16,241,202. The only challenge by the defendant's lawyer on appeal is to the order of restitution. We permitted the defendant to file his own "supplementary" briefs, which raise additional issuesbut they are frivolous.
A confusing feature of the case is that the government tells us that it's planning to convey any forfeited assets that turn up to the bank (which is to say to its successor, Bank of America). One might think that if the government does that, the order of restitution will be mootthe victim of the fraud will have been made whole, especially since the amount of the forfeiture exceeds the bank's loss because of the property that was ordered forfeited. The cases, moreover, interpreting vague statutory language, see 18 U.S.C. §§ 981(a)(1)(C), 982(a)(2)(A); 28 U.S.C. § 2461(c), allow the sentencing judge to make the forfeiture order in personam rather than in rem, so that it is a personal judgment against the defendant rather than a claim to specified assets. E.g., United States v. Baker, 227 F.3d 955, 970 (7th Cir.2000); United States v. Newman, 659 F.3d 1235, 1242 (9th Cir.2011); United States v. McGinty, 610 F.3d 1242, 1246 *888 (10th Cir.2010). The judge did that in this case, and so the order will remain in force when the defendant is released from prison, just like the order of restitution. He appears to be a capable businessman, so, while he has no money now (he was permitted to appeal in forma pauperis), he may eventually be able to pay both debts in full. If so, the government will not be permitted to pay the bank twice the bank's loss, because restitution (as we'll see) cannot exceed the victim's loss; instead the government will pocket the proceeds of the forfeiture. So the defendant if able will be paying twice the victim's loss, though not to the victim. And so a successful attack on the restitution order will reduce the defendant's total liability by almost half ("almost" because of the property forfeited along with the defendant's monetary gain from the fraudbut remember that he is not attacking the forfeiture order).
It might seem that a defendant should never have to pay more than his victim's loss, and therefore that a forfeiture order and a restitution order should be considered alternative rather than cumulative punishments. But the cases hold otherwise. United States v. Emerson, 128 F.3d 557, 566-67 (7th Cir.1997); United States v. Newman, supra, 659 F.3d at 1240-42; United States v. McGinty, supra, 610 F.3d at 1246-48. That's not much of a paradox. It means, very appropriately in a fraud case since fraud is a concealable offense, that the combination of a forfeiture order and a restitution order results in a form of punitive damages piled on top of the other penalties for the defendant's crime, such as imprisonment.
The defendant owned a company called Illinois National Safe (we'll call it "the Company") that was in the business of installing and maintaining security devices, such as surveillance cameras, closed-circuit television, locks, and fire and burglar alarms. One of its customers was LaSalle Bank. In 1998 George Konjuch, the bank's vice president in charge of security, told the defendant that he would authorize the Company to provide additional services for the bank in exchange for bribesand that he would cut off the Company if the defendant refused his offer. The defendant accepted the offer. Years passed. The Company's sales to the bank soaredit went from servicing 30 branches of the bank to servicing almost 150and Konjuch received larger and larger bribes until he was receiving more than $40,000 a month from the defendant. Eventually LaSalle's management became suspicious of the large amounts of money being paid to the Company because the bank was being billed by it in hundreds of invoices each for less than $5,000. Konjuch kept them below that level and thus within the range in which he could authorize payments without a supervisor's approval; in addition, a large bank like LaSalle makes many small payments on a daily basis, and he could hope that his superiors wouldn't add them up and learn how much the bank was paying the Company. The tactic failing, in 2006 the bank stopped doing business with the Company, having paid it more than $45 million since 2001. The defendant had paid Konjuch $1.3 million in bribes.
For purposes of calculating a prison sentence, if the victim's loss can't be estimated the offender's gain can be used to approximate the loss. U.S.S.G. § 2B1.1, Application Note 3(B); United States v. Vrdolyak, 593 F.3d 676, 680 (7th Cir.2010); United States v. Chatterji, 46 F.3d 1336, 1340 (4th Cir.1995). But an order of restitution, unlike either a prison sentence or an order of forfeiture (including the order of forfeiture in this case, which added to the defendant's monetary gain the property that he bought with the *889 proceeds of the fraud), can be based only on the victim's loss, 18 U.S.C. § 3664(f)(1)(A); United States v. George, 403 F.3d 470, 474 (7th Cir.2005); United States v. Galloway, 509 F.3d 1246, 1253 (10th Cir.2007); see also 18 U.S.C. §§ 3663A(c)(3)(B), 3664(e), even though disgorgement of an ill-gotten gain is a standard example of restitution in civil cases.
It is not clear whether the district judge understood the relation between forfeiture and (criminal) restitution. He did not discuss restitution separately in sentencing the defendant except to say that the restitution would be equal in amount to the forfeiture.
After severing its relationship with the Company, the bank hired Ingersoll Rand to provide security services that the Company had provided. The government's experts (forensic accountants) compared Ingersoll Rand's prices to the Company's prices, found that the former were lower, and used the difference to calculate the loss that the fraud had caused the bank between 2001 and 2006. The figure they came up with was $29.6 million. But the judge, in calculating the amount of the bank's loss for purposes of determining the length of the defendant's prison sentence, rejected the government's loss estimate, noting that the services provided by the Company were not identical to those provided by Ingersoll Rand when it replaced the Company as the bank's vendor and that had the Company charged the same prices that Ingersoll Rand charged it would have been operating at a loss which could mean that the Company's services had been better or more extensive than Ingersoll Rand's and that that was why they cost the bank more. The judge didn't think there was persuasive evidence that the Company's cost structure had been significantly "inflated" as a result of the bribes, though the bribes had gotten the Company more business with the bank. He was sure the bank had suffered a loss, but threw up his hands at quantifying it: "I am persuaded that LaSalle Bank paid [the Company] significantly more than it would have paid Ingersoll Rand or another similar company for the same services, but I just can't reasonably determine exactly how much more." Despairing of determining the loss, the judge ordered the defendant to pay restitution equal to the defendant's gain from the fraud.
Though conceding as it must that the amount awarded as restitution must be based on the victim's loss rather than on the defendant's gain, the government defends the award (it thinks the amount should have been higher, but didn't cross-appeal). It argues that since the bank would not have paid the Company a dime had it known the defendant was bribing Konjuch, the bank "lost" the money that ended up in the defendant's pocket; his gain was the bank's loss. That is too hasty. Suppose the Company's (and so the defendant's) gain from the bribes was based on a combination of charging the bank more than it would have had to pay a competitor of the Company for identical services and selling more services to the bankthat is, edging out competitors. Imagine that instead of selling the bank 1000 burglar alarms at a price of x that would yield a profit of $50 for each alarm (which let us say was the pre-bribe quantity and price sold by the Company to the bank), the defendant had been able by bribing Konjuch to induce the bank to buy 1500 burglar alarms from the Company at a price, $x + $10, that would yield a $60 profit per alarm, displacing a competitor who had been selling the bank 500 alarms each year also at $x apiece. The Company's ill-gotten gain would have been $40,000 (1000 × ($60$50 = $10) + 500 × $60), consisting of the entire profit on *890 the additional 500 alarms the Company sold to the bank and the inflated profit (the extra $10 per alarm) on the original 1000 alarms that it had sold to the bank. But the bank's loss would have been only $15,000 (1500 × ($60$50 = $10)), consisting of the $10 excess profit obtained by the Company on all 1500 alarms that it sold to the bank. There is, it is true, another victim of the fraudthe competitor who was edged out as a result of the bribes. But the only victim for whom restitution is being sought in the present case is the bank.
According to the government's own figures, the Company's sales to the bank rose from $2,404,622 in 2001 to $14,797,364 in 2004an increase of 515 percent. Is it conceivable that the Company increased its prices by 515 percent in three years? Or that Konjuch could have concealed a 515 percent excess markup from his superiors for so long a period without being caught? There is no evidence of that. The Company must therefore have been selling more to the bank. Maybe the bank was paying more for the extra services than it would have had to pay a competitor edged out by the fraud, as in our example; or maybe they were services that the bank didn't want and would not have bought had it not been for Konjuch's treachery. There is little if any evidence to support either conjecture. Remember that in 1998 the Company was servicing 30 branches and in 2006 150. We don't know exactly how much of this growth took place between 2001 and 2004. We know only that the Company added an average of 15 branches each year over the period of the fraud (which had begun in 1998), which suggests (no stronger word is possible, because we don't know how much variance there was), that in 2001 the Company was servicing 75 branches (30 + (3 × 15)) and by 2004 120 (75 + (3 × 15)). This is only a 60 percent increase, consistent with the hypothesis that the Company kept raising its prices dramatically, but as we said we don't know how much variance in the growth rate there was from year to year, and, more important, we do not know whether the Company was providing the same quality and quantity of services to each branch. In addition, in 2004 the Company and the bank signed a $7.8 million maintenance contract, which doubled the Company's revenues from selling to the bankfrom $7.16 million in 2003 to $14.8 million the following year.
It's true that the bank paid less to Ingersoll Rand, the Company's honest replacement, for comparable services than it had paid the Company. But the bank may have been effecting economies that it thought would make it more attractive to potential buyers, because it was looking to sell itselfand 18 months later it did. And the bank's demand for the kind of services that the Company had provided to it may have shrunk for reasons unrelated to overpricing or gold plating by the Company or even wanting to save money. Or perhaps the services that the Company had provided and Ingersoll Rand did not provide were still being bought by the bank, only from some other company or companies.
Maybe the government's experts explored all these possibilities and their $29.6 million figure is an accurate estimate. But the thrust of the government's response to the appeal is not to defend its experts' loss assessment against the judge's criticisms or the defendant's criticisms but instead to insist that in computing the defendant's illicit gain the judge waswithout knowing itcomputing the victim's loss. The government bases this argument not on evidence, however, but on the proposition that any payment pursuant to contracts obtained by fraud must enrich *891 the seller by the precise amount paid by the purchaser, net of the seller's costs. That is not correct, as we have said. Indeed, in an extreme case, where the only effect of the fraud is to transfer business between two sellers whose prices and quality are the same, there is no loss to the purchaser.
The price of the Ingersoll Rand replacement contract could, however, be made the starting point for computing the loss to the bank. If that contract price was x percent lower than the Company's price, then x percent of the quantity of services (in dollars) that the Company sold to the bank could be treated as the bank's prima facie loss. The defendant could rebut by showing that the quality or quantity of services rendered under the Company's contracts exceeded the quality or quantity of services rendered under Ingersoll Rand's contract; if so, the bank's loss would be less, and maybe zero (or even negative). Much of the relevant information may be buried in the worksheets of the government's forensic accountants.
So maybe the judge threw up his hands too soon, and should try to estimate the bank's loss along the lines just suggested, though alternatively he may decide to invoke 18 U.S.C. § 3663A(c)(3)(B), which allows the sentencing judge to decline to award restitution if he "finds, from facts on the record, that ... determining complex issues of fact related to the cause or amount of the victim's losses would complicate or prolong the sentencing process to a degree that the need to provide restitution to any victim is outweighed by the burden on the sentencing process." That is a choice for the district judge to make in the first instance; we note that the need to determine the bank's loss is limited in this case because of the government's decision to convey forfeited assets to the victim up to the limit of the victim's loss. All that is clear is that the order of restitution cannot stand. The rest of the judgment is affirmed.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
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14 Mich. App. 201 (1968)
165 N.W.2d 418
DE GUVERA
v.
SURE FIT PRODUCTS
Docket No. 3,811.
Michigan Court of Appeals.
Decided October 25, 1968.
Cyrowski & Pasternacki, for plaintiff.
Hertzberg, Jacob, and Weingarten & Kennedy (Dennis S. Kayes, of counsel), for defendant.
ANDREWS, J.
Plaintiff appeals from the orders of the trial judge granting defendant's motions for accelerated judgment and for summary judgment.
The complaint contains two counts. In count I, plaintiff alleged that defendant, a Pennsylvania partnership, wrongfully discharged him from his employment as its salesman in territory consisting of Chicago, Illinois, and Michigan. He claims damages for breach of contract. In his amended count II, plaintiff alleges that defendant drew a check payable to him for compensation, which he negotiated at a local A & P store where he customarily traded, and that three days later the manager informed him that payment of the check had been *203 stopped and demanded immediate restitution. He further alleges that in stopping payment of the check, defendant thereby published to the manager that plaintiff was guilty of wrong-doing in negotiating the check thus defaming his character and injuring his reputation and credit standing.
COUNT I
Defendant's motion for accelerated judgment as to count I is filed under GCR 1963, 116.1. Defendant contends that under CLS 1961, § 600.721(3) (Stat Ann 1962 Rev § 27A.721[3]), and CLS 1961, § 600.725(5) (Stat Ann 1962 Rev § 27A.725[5]), supported by affidavits that defendant does not carry on a continuous and systematic part of its general business in Michigan, that it does not transact business in Michigan and that it did not enter into a contract for services to be performed or for materials to be furnished in the state by it; and therefore the court has no jurisdiction over defendant for breach of contract.
By affidavit plaintiff states that he was hired by defendant to call upon retail merchants in the territory to introduce and sell defendant's goods, service its accounts, and represent defendant in the "prosecution" of its general business in Michigan. He claims that the courts of Michigan have general personal jurisdiction over the defendant within the meaning of CLS 1961, § 600.721(3) because the defendant was carrying on a continuous and systematic part of its general business in Michigan through plaintiff as its agent, or, in any case, he claims that the courts of Michigan have limited personal jurisdiction over the defendant within the meaning of CLS 1961, § 600.725(5) because the defendant contracted with him for services to be performed or *204 for materials to be furnished in the state by defendant.
Defendant claims that plaintiff has not pleaded nor shown either that defendant was carrying on a continuous and systematic part of its general business within the state or that defendant entered into a contract for services to be performed or for materials to be furnished in Michigan by defendant, and that, on the contrary, defendant has shown by affidavits that it does not maintain an office or property in Michigan, and ships its goods from its facilities in Pennsylvania directly to its customers on orders solicited by its salesmen. Defendant claims that this activity constitutes inter-state commerce and to apply CLS 1961, § 600.721(3) to it would violate Article IV § 2 of the United States Constitution and the Fourteenth Amendment. We do not reach this question for we agree with defendant that the activity of defendant as alleged by plaintiff does not bring the action within the language of CLS 1961, § 600.721(3).
The decisive question, then, is whether plaintiff has shown that the activity of defendant is such as to bring it within the language of CLS 1961, § 600.725(5). Did defendant enter into a contract for services to be performed or for materials to be furnished in Michigan by it?
This question was answered in a substantially identical situation by this Court in Corey v. Cook & Company (1966), 3 Mich App 359. In that case the plaintiff was hired by the defendants, one a partnership and the other an individual, as a broker to sell an airplane and parts. He brought suit for breach of contract and in quantum meruit for services rendered. The Court held that to meet the "minimal contacts" requirement of due process CLS 1961, § 600.725(5) requires that the nonresident must *205 have entered into a contract by which "he agreed to either deliver materials or furnish services within the State".
Plaintiff seeks to distinguish Corey on the ground that he was Sure Fit's agent and therefore Sure Fit was present in the state vicariously. He cites no authority, and we have found none, for this proposition. We believe that Corey is controlling precedent and cannot be distinguished. Corey was hired by Cook to sell Cook's property. De Guvera was hired by Sure Fit to sell its products. Both Corey and De Guvera sued for breach of contract. The only difference in the cases is that Corey was hired to make a single sale while De Guvera was hired as a general salesman. In both cases the contract relied upon by the plaintiff was not a contract for services to be performed or for materials to be furnished in Michigan by the nonresident defendants.
On this appeal, De Guvera does not rely on CLS 1961, § 600.725(1) (Stat Ann 1962 Rev § 27A.725[1]), and accordingly we intimate no opinion regarding the applicability of that provision on the facts of this case.
The trial court was correct in granting the motion for accelerated judgment.
COUNT II
Defendant's motion for summary judgment is filed under GCR 1963, 117.2(1) upon the ground that the amended complaint does not allege what defamatory words, if any, were used by defendant. Citing MacGriff v. Van Antwerp (1950), 327 Mich 200, he claims that a libel complaint must state the alleged libelous words and their publication.
Plaintiff claims that by stopping payment of the check defendant thereby impliedly disparaged his *206 reputation for honesty and credit, citing Svendsen v. State Bank of Duluth (1896), 64 Minn 40 (65 NW 1086); Cox v. National Loan & Exchange Bank (1926), 138 SC 381 (136 SE 637), and Johnston v. Savings Trust Company of St. Louis (Mo, 1933), 66 SW2d 113.
In each of these cases the action of the defendant bank amounted to a dishonor of its customer's check, an entirely different factual situation than is here presented.
The uniform commercial code[*] authorizes the drawer of a check to order his bank to stop payment of the check, and if done as required, the bank is authorized to do so. The order is directed to the bank. The drawer is not required to notify any other person. Plaintiff does not allege or show that defendant used or published any defamatory writing concerning the plaintiff to anyone. All he states is that defendant stopped payment of the check, and this is done by order to his bank. He does not allege when defendant ordered payment stopped. He simply states that the check was issued on November 10, was negotiated by him on November 11, and he learned of the stop order from the store where he cashed it on November 14.
"A declaration in an action for libel which fails to show where the alleged libels were published or their contents failed to state a cause of action for libel." Syllabus #3, MacGriff v. Van Antwerp, supra.
"The law requires the very words of the libel to be set out in the declaration in order that the court or judge may judge whether they constitute a ground of action." Gatley, Law and Practice of Libel and Slander (1924 Ed) 467.
*207 We hold that plaintiff's amended count II does not set forth any allegation which if proved would constitute a libel. We can find no authority for the proposition that the payee of a check who has negotiated the same is libeled simply because the drawer stops payment thereof.
The summary judgment was properly granted.
Affirmed. Costs to appellee.
LESINSKI, C.J., and LEVIN, J., concurred.
NOTES
[*] CLS 1961, § 440.4403(1) (Stat Ann 1964 Rev § 19.4403[1]) states, "A customer may by order to his bank stop payment of any item payable for his account."
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******************************************************
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of an opinion and the print version appearing in the
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necticut Reports or Connecticut Appellate Reports, the
latest print version is to be considered authoritative.
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NUTMEG HOUSING DEVELOPMENT
CORPORATION v. TOWN OF
COLCHESTER
(SC 19551)
Rogers, C. J., and Palmer, Zarella, Eveleigh, McDonald,
Espinosa and Robinson, Js.
Argued September 21—officially released December 27, 2016
James Stedronsky, for the appellant (plaintiff).
Lloyd L. Langhammer, for the appellee (defendant).
Robert A. White and Proloy K. Das filed a brief for
the Connecticut Housing Finance Authority as ami-
cus curiae.
Opinion
ZARELLA, J. In this appeal, we consider whether
the trial court correctly determined that the plaintiff,
Nutmeg Housing Development Corporation, failed to
establish aggrievement in that it failed to prove that the
defendant, the town of Colchester (town), had overval-
ued its property for tax purposes. After a bench trial,
the court found that the plaintiff had failed to establish
that it was aggrieved by the town’s valuation because
the court found that the plaintiff’s expert did not present
sufficient, credible evidence to establish that the town
had overvalued the property. The trial court rendered
judgment for the town, and the plaintiff appealed. We
conclude that the trial court’s determination of credibil-
ity is supported by the record, and, thus, we affirm the
judgment of the trial court.
The following facts and procedural history are rele-
vant to this appeal. The plaintiff is the owner of a unique
parcel of land in Colchester. The property contains a
thirty-two unit apartment complex, which was built in
2008. All of the units are age and income restricted.
The property is subject to a ninety-nine year restrictive
covenant requiring that the property be rented only to
low income, elderly individuals. Because of the
restricted use of the property, investors in the develop-
ment of the property are eligible to receive federal low
income housing tax credits (tax credits). The federal
government created this tax credit program as a means
of funding the development and rehabilitation of
affordable housing. Investors in these projects receive
dollar for dollar tax credits in addition to normal depre-
ciation deductions. These tax credit projects must com-
ply with strict requirements, or else they are subject to
recapture penalties.
For tax year 2011, the town assessed the plaintiff’s
property at approximately $2.29 million. The plaintiff
challenged this assessment before the Colchester Board
of Assessment Appeals (board), claiming that the prop-
erty was worth only $1.3 million. The board disagreed,
upholding the town’s original valuation, and the plaintiff
appealed from the board’s decision to the Superior
Court pursuant to General Statutes § 12-117a, again
claiming that its property was overvalued.
Before the trial court, the plaintiff argued that the
town had used an improper method for valuing the
property. The plaintiff claimed that the town was
required to use the method described in General Stat-
utes § 8-216a. That provision calls for the valuation of
certain low income property using an income capitaliza-
tion approach, that is, determining the property’s actual
rental income less reasonable expenses, and then
adjusting that figure by a suitable capitalization rate.
See General Statutes § 8-216a (a). The plaintiff further
claimed that § 8-216a does not allow the town to include
the value of the tax credits in its valuation. At the trial
on the plaintiff’s appeal, however, the plaintiff did not
provide any evidence to the trial court to show precisely
which method the town used to value the property and
presented no evidence to show that the town had used
the tax credits in valuing the property. Nevertheless,
the plaintiff claimed that the town’s valuation was
excessive.
In support of its claim, the plaintiff relied on an
appraisal report prepared by Christopher Italia, a certi-
fied appraiser. Italia did not, however, value the prop-
erty according to the income capitalization approach
described in § 8-216a. He instead reached his valuation
by blending an income capitalization approach with a
sales comparison approach. For the income capitaliza-
tion portion of his analysis, Italia first calculated the
net operating income of the property by examining the
actual income and expenses of the subject property.
Italia used the below market restricted rents of the
subject property but adjusted the other income and
expense figures on the basis of the average income
and expense figures derived from other, market rate
properties, in order to determine reasonable income
and expense figures. He then divided the net operating
income by the capitalization rate—a figure that he deter-
mined from examining other market rate properties.
Notably, however, none of the properties that Italia
considered in this approach was age and income
restricted.1 Italia determined that the property was
worth $1.06 million under this approach. For the sales
approach, Italia examined the sales prices of other com-
parable apartment complexes. He then adjusted those
prices based on perceived differences between these
properties and the subject property in an attempt to
calculate the price for which the subject property would
sell. Once again, however, none of the comparable prop-
erties that Italia selected was age or income restricted
like the subject property. In addition, the properties
Italia relied on were also much older than the subject
property. At the time of the valuation, the subject prop-
erty was only three years old, yet one of the properties
that Italia used as a comparable was eighty-six years
old. Italia determined that the value under this approach
was $1.15 million. After developing both methods, Italia
then took the average of the two valuations and con-
cluded that the fair market value of the property was
$1.1 million.2
The town then presented its own expert, Robert Sil-
verstein, a certified appraiser, who was not the town’s
original appraiser of the property but had been retained
as an expert for trial. Silverstein testified that the fair
market value of the property was $2.5 million. Unlike
Italia, Silverstein valued the property using solely an
income capitalization approach, similar to the approach
prescribed in § 8-216a. Also, unlike Italia, Silverstein’s
income capitalization analysis took into consideration
the restricted nature of the subject property. In order
to determine reasonable income and expense figures,
Silverstein used market rates but adjusted them to
reflect the subject property’s restrictions. Silverstein,
however, included the value of the tax credits associ-
ated with the property when evaluating the property’s
income and expenses.
After the trial concluded, the parties submitted post-
trial briefs. In the plaintiff’s posttrial brief, it disregarded
its expert’s valuation of $1.1 million and claimed,
instead, to perform its own valuation of the property
using § 8-216a and determined that the value of the
property was actually $526,940—less than one half of
the value assigned by its own expert. To reach this
value, the plaintiff did not rely on its own expert’s
income and expense figures but used different figures
from a 2011 statement of operation. The plaintiff
adduced no expert testimony as to why this valuation
was more appropriate than that used by its expert or
whether the income and expense figures that the plain-
tiff relied on were reasonable.
The trial court rejected the plaintiff’s claims and ren-
dered judgment for the town. In its memorandum of
decision, the court did not credit the plaintiff’s $526,940
valuation because it was based solely on the plaintiff’s
own reading of § 8-216a and was not supported by any
expert testimony. The court also cast doubt on the
plaintiff’s claim that § 8-216a applied and on its argu-
ment that the town could not consider tax credits when
valuing the property. Nevertheless, the trial court ulti-
mately did not base its decision on either of these
grounds. Instead, the trial court determined that the
plaintiff had not established that it was aggrieved by
the town’s valuation because it found that the plaintiff’s
expert was not credible. The court found that Italia’s
opinion of fair market value was not credible because it
was ‘‘based [on] unrestricted sales and rental properties
unrelated to age and income restrictions . . . .’’
(Emphasis in original.) The trial court explained that
‘‘[i]t is a basic principle of law governing tax appeals
that it is the burden of the taxpayer to show that he or
she has been aggrieved by the action of the assessor
overassessing the property. Ireland v. Wethersfield, 242
Conn. 550, 556, 698 A.2d 888 (1997). It is also recognized
by our case law that, [when] the trial court finds that
the taxpayer’s appraiser is unpersuasive, judgment may
be [rendered] in favor of the municipality on this basis
alone. Id., 557–58. . . . [I]t is clear that Silverstein’s
opinion of value, based on the subject being an age
and income restricted property (in contrast to Italia’s
opinion of value based on unrestricted property), is the
more credible.’’ (Emphasis added.) Because the trial
court concluded that the plaintiff was not aggrieved,
the court upheld the town’s original assessment. After
the court issued its memorandum of decision, the plain-
tiff moved for an articulation, requesting that the court
articulate the statutory formula it had used to determine
the property’s value. More specifically, the plaintiff
asked the trial court whether § 8-216a applied and, if
not, which standard of valuation the court applied and
what the property’s value was under that standard. The
court issued an articulation, explaining that it did not
apply any standard to value the property because it
determined that the plaintiff did not establish that it
was aggrieved by the town’s valuation, and, therefore,
the court was not required to determine the property’s
value. The court reiterated that it found that the plaintiff
had failed to establish aggrievement because ‘‘Italia’s
opinion of fair market value of the subject property
[was] based [on] unrestricted sales and rental proper-
ties unrelated to age and income restrictions . . . .’’
(Emphasis in original.) This appeal followed.
The plaintiff appealed to the Appellate Court, and we
transferred the appeal to this court pursuant to General
Statutes § 51-199 (c) and Practice Book § 65-1. In this
appeal, the plaintiff claims that the trial court improp-
erly applied the incorrect legal standard of valuation
to the subject property. The plaintiff claims that the
court should have applied § 8-216a to value that prop-
erty and that § 8-216a does not allow for the inclusion
of tax credits in the valuation of the property. In
response, the town argues that the trial court did not
reach the issue of valuation because it determined that
the plaintiff failed to prove that it was aggrieved by
the actions of the board in that the plaintiff’s expert
testimony was not credible, and, therefore, the plaintiff
failed, as a threshold matter, to show that the town had
overassessed its property. We agree with the town.
We begin with the applicable legal principles on
aggrievement in a tax appeal under § 12-117a. In an
appeal under § 12-117a, the trial court performs a two
step function. ‘‘The burden, in the first instance, is [on]
the plaintiff to show that he has, in fact, been aggrieved
by the action of the board in that his property has been
overassessed. . . . In this regard, [m]ere overvaluation
is sufficient to justify redress under [§ 12-117a], and the
court is not limited to a review of whether an assess-
ment has been unreasonable or discriminatory or has
resulted in substantial overvaluation. . . . Whether a
property has been overvalued for tax assessment pur-
poses is a question of fact for the trier. . . . The trier
arrives at his own conclusions as to the value of land
by weighing the opinion of the appraisers, the claims of
the parties in light of all the circumstances in evidence
bearing on value, and his own general knowledge of
the elements going to establish value including his own
view of the property. . . . Konover v. West Hartford,
242 Conn. 727, 734–35, 699 A.2d 158 (1997). Thus, the
trial court first must determine whether the plaintiff
has offered sufficient, credible evidence that the subject
property has been overvalued. If the trial court con-
cludes that the plaintiff has not met [this] burden, the
trial proceeds no further, and the town’s assessment
stands.’’ (Internal quotation marks omitted.) Redding
Life Care, LLC v. Redding, 308 Conn. 87, 99–100, 61
A.3d 461 (2013). ‘‘If the trial court finds that the taxpayer
has failed to meet his burden because, for example,
the court finds unpersuasive the method of valuation
espoused by the taxpayer’s appraiser, the court may
render judgment for the town on that basis alone.’’
Ireland v. Wethersfield, supra, 242 Conn. 557–58. With
respect to appeals by taxpayers, ‘‘we have regularly
affirmed such judgments without a showing that the
town adduced affirmative evidence sufficient to demon-
strate that the assessor’s determination of market value
was not unjust.’’ Id., 558.
‘‘In a tax appeal taken from the trial court to the
Appellate Court or to this court, the question of over-
valuation usually is a factual one subject to the clearly
erroneous standard of review . . . .’’ (Internal quota-
tion marks omitted.) Redding Life Care, LLC v. Red-
ding, supra, 308 Conn. 100. ‘‘Under this deferential stan-
dard, [w]e do not examine the record to determine
whether the trier of fact could have reached a conclu-
sion other than the one reached. Rather, we focus on
the conclusion of the trial court, as well as the method
by which it arrived at that conclusion, to determine
whether it is legally correct and factually supported.
. . . A finding of fact is clearly erroneous when there
is no evidence in the record to support it . . . or when
although there is evidence to support it, the reviewing
court on the entire evidence is left with the definite and
firm conviction that a mistake has been committed.’’
(Citation omitted; internal quotation marks omitted.)
United Technologies Corp. v. East Windsor, 262 Conn.
11, 23, 807 A.2d 955 (2002).
Additionally, ‘‘[i]t is well established that [i]n a case
tried before a court, the trial judge is the sole arbiter
of the credibility of the witnesses and the weight to be
given specific testimony. . . . The credibility and the
weight of expert testimony is judged by the same stan-
dard, and the trial court is privileged to adopt whatever
testimony [it] reasonably believes to be credible. . . .
On appeal, we do not retry the facts or pass on the
credibility of witnesses.’’ (Citations omitted; internal
quotation marks omitted.) Torres v. Waterbury, 249
Conn. 110, 123, 733 A.2d 817 (1999). To reiterate, ‘‘a
trial court is afforded wide discretion in making factual
findings and may properly render judgment for a town
based solely [on] its finding that the method of valuation
espoused by a taxpayer’s appraiser is unpersuasive.’’ Id.
‘‘Conversely, we review de novo a trial court’s deci-
sion of law. [W]hen a tax appeal . . . raises a claim
that challenges the propriety of a particular appraisal
method in light of a generally applicable rule of law,
our review of the trial court’s determination whether
to apply the rule is plenary. Breezy Knoll Assn., Inc.
v. Morris, [286 Conn. 766, 776, 946 A.2d 215 (2008)].
To be sure, if the trial court rejects a method of appraisal
because it determined that the appraiser’s calculations
were incorrect or based on a flawed formula in that
case, or because it determined that an appraisal method
was inappropriate for the particular piece of property,
that decision is reviewed under the abuse of discretion
standard. See id., 775–76. Only when the trial court
rejects a method of appraisal as a matter of law will we
exercise plenary review. See id.’’ (Emphasis in original;
footnote omitted; internal quotation marks omitted.)
Redding Life Care, LLC v. Redding, supra, 308 Conn.
101–102.
Thus, in the present case, we must first determine
whether the trial court reached its decision through (1)
the exercise of its discretion in crediting evidence and
expert witness testimony, or (2) as a matter of law. We
conclude that the trial court rejected the testimony of
the plaintiff’s expert witness because the court found,
as a threshold matter, that the plaintiff’s expert was
not credible and, therefore, that the plaintiff was not
aggrieved. Consequently, the trial court did not base its
decision on whether § 8-216a governed the property’s
valuation or whether associated tax credits could be
included in the property’s value.
This conclusion is supported by both the trial court’s
memorandum of decision and its articulation. The mem-
orandum of decision illustrates that the court’s dis-
agreement with the plaintiff’s valuation was based on
flaws in Italia’s underlying data and not on the plaintiff’s
reliance on any particular statutory formula. For exam-
ple, the court rejected Italia’s income capitalization
approach because Italia relied on unrestricted market
properties to determine reasonable income and
expense figures for the subject property, which is age
and income restricted. The trial court reaffirmed this
reasoning in its articulation, in which the trial court
clarified that it had rejected Italia’s valuations because
it found that the data he relied on were not credible,
irrespective of which statutory standard applied.
Accordingly, the plaintiff’s claim could be resolved on
this basis alone. See, e.g., Priest v. Edmonds, 295 Conn.
132, 140, 989 A.2d 588 (2010) (articulation serves to
clarify ‘‘the factual and legal basis [on] which the trial
court rendered its decision’’ [internal quotation marks
omitted]). Simply put, the court rejected Italia’s
appraisal as not credible because it was premised on
data derived from properties that were not representa-
tive of the subject property.3 As a result, we review the
trial court’s credibility determination under the deferen-
tial clear error standard.
The record supports the trial court’s finding. The trial
court rejected Italia’s valuation because he had relied
on income and expense figures derived from rentals
that were not age or income restricted, like the subject
property, and had failed to make any adjustment for
this difference. The town’s expert, on the other hand,
testified that such adjustments were necessary to
appropriately value the property given its restrictions.
Because the trial court rejected the plaintiff’s expert
testimony, the plaintiff could not rely on that testimony
to establish overvaluation. See Redding Life Care, LLC
v. Redding, supra, 308 Conn. 104. The trial court also
could have rejected the plaintiff’s claim that the prop-
erty was overvalued under § 8-216a because the plain-
tiff’s expert did not value the property under the
standard prescribed by that statute. Instead, the plain-
tiff, in its posttrial brief, performed its own calculation,
under § 8-216a, but did not provide any testimony to
support this calculation. Therefore, the trial court cor-
rectly concluded that the plaintiff had failed to satisfy
its initial burden of establishing aggrievement under
§ 12-117a. See, e.g., Ireland v. Wethersfield, supra, 242
Conn. 557–58. Thus, there is no need to determine
whether the town used the correct statutory formula
to value the subject property. See id., 558 (‘‘[in] appeals
[pursuant to § 12-117a] by the taxpayer, we have regu-
larly affirmed such judgments without a showing that
the town adduced affirmative evidence sufficient to
demonstrate that the assessor’s determination of mar-
ket value was not unjust’’). Accordingly, we do not
determine whether § 8-216a is the proper standard valu-
ation for the subject property and leave for another
day the issue of whether tax credits may properly be
included in a valuation under that standard.
We therefore conclude that the trial court’s determi-
nation that the plaintiff failed to establish aggrievement
under § 12-117a is not clearly erroneous and that the
trial court properly rejected the plaintiff’s appeal.4
The judgment is affirmed.
In this opinion the other justices concurred.
1
Italia’s reliance on unrestricted properties could have affected the accu-
racy of his valuation in at least two different ways. First, Italia did not
consider how the property’s restrictions impacted the occupancy rate of
the property; he instead based the vacancy loss figures on what would be
reasonable for a market property. Unlike a market property, which competes
with many other properties for tenants, the subject property is in high
demand because there is no nearby competition for age and income
restricted housing. The subject property, therefore, can maintain a higher
occupancy rate than a market property. Second, the property generates
more income through laundry services, late fees, and other sources than a
market property. Italia based his additional income figures on the average for
unrestricted market properties, but the subject property actually generated
more than twice the amount that Italia used in his calculations.
2
We note that Italia was unavailable to testify at trial, so the plaintiff
presented testimony from one of Italia’s coworkers, Josephine Aberle. Aberle
testified that she did not prepare a report of her own but instead adopted
Italia’s report as her own. Aberle claimed to rely on the same underlying
data as Italia, and she reached the same conclusions as Italia. Even though
her testimony mirrored Italia’s report, she claimed to have performed an
independent valuation, although she acknowledged that she had not actually
visited the property before reaching her conclusions. Because Aberle’s testi-
mony mirrored Italia’s, the trial court focused its analysis of the plaintiff’s
evidence solely on Italia’s report. Because the trial court did not give any
independent weight to Aberle’s testimony, we too address only Italia’s report
in this opinion.
3
Although the plaintiff focuses its appeal on § 8-216a, not even its own
expert, Italia, solely relied on the income capitalization approach. Italia also
relied on the sales comparison approach—his final valuation was a near
equal blend of the two valuation methods. The record supports the trial
court’s disagreement with Italia’s valuation derived from the sales approach.
The court found that this approach was improper because Italia used compa-
rable properties that were not age and income restricted. The comparable
properties were also much older than the subject property, specifically,
between thirty-four and eighty-three years older.
4
The plaintiff raises two additional claims in its appeal. First, it claims
that including the federal tax credits in the valuation of the property violates
article six of the United States constitution. The plaintiff did not raise this
claim before the trial court, and, accordingly, we decline to address it.
‘‘[O]nly in most exceptional circumstances can and will this court consider
a claim, constitutional or otherwise, that has not been raised and decided
in the trial court.’’ (Internal quotation marks omitted.) Lopiano v. Lopiano,
247 Conn. 356, 373, 752 A.2d 1000 (1998); see also Practice Book § 60-5.
The plaintiff has not demonstrated such exceptional circumstances.
Second, the plaintiff argues in the alternative that, because it does not
own the apartment complex located on the subject property, and because
the land is subject to restrictions, its property interest has no value. After
the trial concluded, the plaintiff, in its posttrial brief, for the first time
claimed that another party, Amston Village, LP (Amston), was responsible
for paying the property taxes. Amston leases the subject property from the
plaintiff. The plaintiff claimed that, by the terms of the lease, the buildings
on the property actually belonged to Amston, and, therefore, the plaintiff
is responsible for paying taxes only on the land, which, due to the restrictive
covenants, is valueless.
We decline to address this claim because nowhere in the plaintiff’s com-
plaint is there an allegation that the plaintiff is not the owner of the property
at issue. Because the plaintiff failed to properly raise this issue in the trial
court, we decline to address it. See, e.g., Connecticut Education Assn., Inc.
v. Milliman USA, Inc., 105 Conn. App. 446, 460, 938 A.2d 1249 (2008) (‘‘The
purpose of a complaint . . . is to limit the issues at trial, and . . . pleadings
are calculated to prevent surprise. . . . It is fundamental to our law that
the right of a [party] to recover is limited to the allegations in his [pleadings]
. . . . Facts found but not averred cannot be made the basis for a recovery.’’
[Emphasis omitted; internal quotation marks omitted.]).
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271 N.W.2d 36 (1978)
ACTION TIME CARPETS, INC., Respondent,
v.
MIDWEST CARPET BROKERS, INC., Appellant.
No. 47893.
Supreme Court of Minnesota.
September 15, 1978.
Rehearings Denied November 8, 1978.
*37 Bloedel, Nelson, Slade, Volstad & Hawkinson, Minneapolis, for appellant.
Stringer, Donnelly, Courtney, Cowie & Rohleder and Owen Sorenson, St. Paul, for respondent.
Heard before PETERSON, SCOTT, and GODFREY, JJ., and considered and decided by the court en banc.
SCOTT, Justice.
This is an appeal from a judgment entered against defendant Midwest Carpet Brokers, Inc. (Midwest), in an action for breach of contract brought by plaintiff Action Time Carpets, Inc. (Action Time). We affirm in part and reverse in part, and remand for further proceedings.
In December 1972, Midwest entered into a contract with the Darrel Farr Development Corporation (Farr) to furnish and install 7,000 yards of carpet in a 96-unit apartment building Farr was constructing in St. Cloud, Minnesota. Samuel J. Peraro, Midwest's president, delayed ordering the required carpet until the date of Midwest's performance was established more specifically, since he did not want to tie up corporate funds in inventory over a long period of time.
In a January 29, 1974, letter, Farr advised Midwest that the installation of the carpet was to commence on February 15, 1974. Peraro received this letter on February 1, 1974, and immediately contacted Samuel J. Cavallaro, a self-employed manufacturer's representative who represented *38 plaintiff Action Time. On the same day, Cavallaro came to Midwest's shop where Peraro asked him if he could copy the texture and color of a certain carpet Peraro desired to order. Cavallaro then telephoned Action Time at its office in Chattanooga, Tennessee. Action Time stated that the carpet would have to be specially dyed and that it could fill the order if the colors could be matched. Cavallaro told Action Time that this was a "rush order" since Peraro had told him the carpet was needed immediately. According to Peraro, immediately after the telephone call was completed Cavallaro told him that it would take a week to ten days to get the carpet after the color was verified. Peraro then gave Cavallaro samples of the carpet to be matched for color, and Cavallaro sent the samples by airmail to Action Time the same day with a note asking Action Time to "rush" the specially-dyed samples back.
Action Time sent the samples back to Cavallaro, who brought them to Peraro's shop on February 12, 1974. Peraro approved of the special dyes and signed a purchase order on one of Midwest's own purchase order forms. The purchase order called for 7,000 square yards of carpet 3,500 yards of gold and 3,500 yards of orange. Written in the blank to the right of the printed words "Date Required" were the words "at once." The purchase order also contained the written words "W/Letter of FHA Approved."
Upon completing the purchase order, Cavallaro called Action Time and told them that the color was approved and that he was mailing a written order. After receiving Midwest's purchase order, Action Time obtained a credit approval of Midwest and sent the order to Masterpiece Finishing, Inc. in Dalton, Georgia. Action Time did business by contracting with carpet manufacturers to fill its orders. The manufacturing records show that the order was completed in mid-March.
At the end of February, 1974, Farr cancelled Midwest's contract since Midwest had not begun installation in St. Cloud. Upon learning of the cancellation, Peraro claims to have telephoned Cavallaro and Action Time on March 1 or 2, 1974, to cancel Midwest's contract with Action Time. The cancellation was not confirmed later in writing. Around March 14, 1974, Peraro was notified by Action Time that the carpet was ready. He responded that it was no longer needed.
On April 3, 1974, Action Time's attorneys notified Midwest that it had breached the contract and that Action Time intended to resell the goods at a private sale and intended to hold Midwest responsible for damages. On April 10, 1974, William Brooks, Action Time's president at the time of the transaction, wrote a similar letter to Peraro.
Action Time sold a large quantity of the carpet which it claimed was identified to the Midwest contract. It then sued Midwest pursuant to Minn.St. 336.2-706(1) for damages measured by the difference between the resale price and the contract price, plus incidental damages.
At a trial to the court without a jury the district court held that Action Time was entitled to receive $3,705.56, which constituted "the difference between the contract price of carpet and the resale price of carpet identified to the contract, less any expenses saved because of defendant's breach."
On appeal, Midwest raises the following issues:
(1) Whether the trial court erred in finding that the time taken for the manufacture of the carpet was not unreasonable and in receiving evidence regarding the usage in the carpet industry of the term "at once";
(2) Whether the trial court erred in failing to find that Action Time had not identified conforming goods to the contract;
(3) Whether the trial court erred in failing to find that the private sales of carpet were not made in "good faith" or in a "commercially reasonable manner;"
(4) Whether the trial court erred in finding that all the carpet identified to the contract was sold.
*39 1. In determining that Action Time did not breach the contract, the trial court found that the "time taken for the manufacture of the carpet was not unreasonable * * *." Midwest contends that this finding was erroneous since the purchase order called for delivery "at once" and since the parties allegedly orally contracted for delivery within 7 to 10 days. Midwest also argues that the trial court erred in admitting evidence of custom and usage in the carpet industry that the phrase "at once" meant "as soon as possible."
Action Time correctly asserts that the controlling legal principles are contained in the Uniform Commercial Code's parol evidence rule with respect to the sale of goods, which is codified at Minn.St. 336.2-202, as follows:
"Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented
(a) by course of dealing or usage of trade (section 336.1-205) or by course of performance (section 336.2-208); and
(b) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement." (Italics supplied.)
In its attempt to establish that the parties agreed that the carpet was required to be delivered within 7 to 10 days, Midwest relies upon a representation by Cavallaro to Peraro on February 1 that Action Time could get the carpet to Midwest within 7 to 10 days from the time the color was verified and approved by Peraro and upon the fact that Action Time was told during the negotiations that this was a "rush" order. These conversations and representations, however, were made prior to the signing of the purchase order and thus were properly disregarded by the trial court, since Minn.St. 336.2-202 provides that terms contained in an agreement "may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement * * *."
Midwest's argument that the court erred in receiving the testimony of Hazel Jerry Cline, Action Time's new president, that the phrase "at once" was used within the carpet industry to mean "as soon as possible" also fails since Minn.St. 336.2-202 expressly authorizes the receipt of "usage of trade" evidence to either explain or supplement the terms of a written agreement. "Usage of trade" is defined in Minn.St. 336.1-205(2), as:
"* * * any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage are to be proved as facts. * * *"
The trial court thus properly received Cline's testimony, which explained the special meaning of the term "at once" throughout the carpet industry, and its finding that the time taken to manufacture the carpet was reasonable is supported by the evidence.
2. Midwest next asserts that the trial court erred in granting Action Time the remedy of selling the goods at a private sale and ordering Midwest to pay the difference between the resale price and the contract price pursuant to Minn.St. 336.2-706, since Action Time allegedly had not identified conforming goods to the contract pursuant to Minn.St. 336.2-704(1), which provides:
"(1) An aggrieved seller under the preceding section may
(a) identify to the contract conforming goods not already identified if at the time he learned of the breach they are in his possession or control;
(b) treat as the subject of resale goods which have demonstrably been intended for the particular contract even though those goods are unfinished." (Italics supplied.)
*40 Thus, a prerequisite for invoking the remedy of resale pursuant to Minn.St. 336.2-706 is the identification of "conforming goods" to the contract. See, Comment 1 to U.C.C. § 2-704; Minnesota Code Comment to Minn.St. 336.2-704.
The purchase order called for the manufacture of 3,500 yards of each of two colors of carpet "W/Letter of FHA Approved." While Midwest introduced some evidence that the carpeting being manufactured did not meet FHA density standards, Action Time introduced evidence to the contrary; namely, a letter stating that the carpeting "meets or exceeds" minimum FHA standards.
In reviewing decisions of a trial court sitting without a jury, it is not our function to reconcile conflicting evidence adduced at trial but rather to determine whether the trial court's findings are supported by the evidence. See, e. g., Bergstedt, Wahlberg, Berquist Assoc. v. Rothchild, 302 Minn. 476, 225 N.W.2d 261 (1975). A trial court's findings of fact will not be set aside unless clearly erroneous. Rule 52.01, Rules of Civil Procedure. In light of this conflicting evidence, we are compelled to hold that the trial court's failure to find that Action Time had not identified conforming goods to the contract prior to resale was proper and was supported by the evidence.
3. Midwest also contends that Action Time's private sales of the carpet were not made in "good faith" or in a "commercially reasonable manner," in violation of Minn.St. 336.2-706 which governs such sales, as follows:
"(1) Under the conditions stated in section 336.2-703 on seller's remedies, the seller may resell the goods concerned or the undelivered balance thereof. Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under the provisions of this article (section 336.2-710), but less expenses saved in consequence of the buyer's breach." (Italics supplied.)
One of Midwest's major contentions in this regard is that Action Time sold a large amount of carpet at private sale prior to giving Midwest notice of the sale pursuant to Minn.St. 336.2-706(3). The trial court, however, did not include the amount of carpet sold prior to giving Midwest notice in the calculation of damages. Consequently, the damages assessed Midwest pursuant to Minn.St. 336.2-706 were based solely on the yardage sold subsequent to the giving of notice. We thus conclude that the sale was "commercially reasonable" and made in "good faith" as to the portion of the total carpeting used by the trial court in assessing damages.
4. Midwest finally contends that the trial court's calculation of damages was based on the assumption that all the carpet identified to the contract was sold at private sale. In calculating the damages, the trial court multiplied the square yards of carpet identified to the contract that were sold after the giving of notice times the contract price per square yard. From this, it deducted the amount of commissions and freight expenses saved and the amount received from the resale of this amount of carpet. It follows that if not all the carpet was resold the damages assessed by the trial court would be in excess of the proper damages.
We have carefully reviewed the record and find that the trial court erred in finding that all the carpet was resold. Action Time's own records do not account for the disposition of all the carpet, and nothing else in the record shows that all the carpet was resold. We therefore remand this case to the trial court for further proceedings on the issue of the amount of carpet resold and calculation of the damages accordingly.
Affirmed in part; reversed in part and remanded.
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127 Ill. App.2d 377 (1970)
262 N.E.2d 271
People of the State of Illinois, Plaintiff-Appellee,
v.
Tyrone Armstrong, Defendant-Appellant.
Gen. No. 53,925.
Illinois Appellate Court First District, Fourth Division.
July 22, 1970.
*378 Richard J. Cochran, Tenney, Bentley, Howell, Askow & Lewis, of Chicago, for appellant.
Edward V. Hanrahan, State's Attorney of Cook County, of Chicago (Elmer C. Kissane and Michael J. Goldstein, Assistant State's Attorneys, of counsel), for appellee.
MR. JUSTICE LEIGHTON delivered the opinion of the court.
This appeal is to review a judgment that convicted defendant of rape. He waived trial by jury. The court, after overruling oral post-trial motions, sentenced him to serve eight to twenty years. Although defendant argues *379 five contentions for reversal, the disposition we make of this appeal requires discussion only of two: (1) the evidence did not prove him guilty beyond a reasonable doubt; and (2) the trial court committed prejudicial error in allowing a child to appear as a prosecution witness without prior judicial determination that the child was competent to testify. The first contention requires a reference to the facts.
On January 5, 1967, at about 11:00 or 11:30 p.m., the complaining witness, a mature woman, mother of three children then aged twelve, seven and two years, respectively, was at home in Chicago, with her husband and her children. Defendant, then seventeen years of age, with three other youths of about the same age, came to the home. According to the woman and her husband, defendant had a gun. Some shots were fired from a back porch. The youths "wanted to know how they could get rid of the gun." A short time later the husband with one of the youths left the house and went to a nearby store. He was gone approximately fifteen minutes. When he returned, "[m]y wife was lying on the bed, her clothes tore, panties tore off her, hollering and screaming hysterically, and she was hollering `Oh, they raped me, they raped me, they raped me. Oh, they raped me' (sic)." The police were called. The complaining witness was taken to a hospital. Defendant was arrested a short time thereafter.
At the trial, the complaining witness, her husband, the seven-year-old daughter and two police officers were witnesses for the prosecution. Defendant and one of the three youths gave evidence for the defense. The complaining witness testified that after her husband left for the store, defendant and the other defense witness took turns raping her. One or the other held a gun to the head of the seven and a half-year-old daughter while they compelled the complaining witness to have intercourse. *380 Her husband described the condition in which he found his wife when he returned home. The seven and a half-year-old daughter testified that while her father was away, defendant put a gun to her mother's head and "[h]e got on top of my mother, ...." The two police officers testified to their interview with the complaining witness and defendant's arrest. No medical testimony or evidence was offered.
Defendant and the other youth testified that they went to the complaining witness' home to have sexual intercourse with her. Both claimed they had done this on several occasions prior to January 5, 1967. Both said it was the complaining witness who made suggestions by which her husband was induced to leave the home. The complaining witness, in rebuttal, denied she ever had sexual intercourse with the two youths. After hearing the evidence, the trial judge found defendant guilty of rape. Defendant contends that the evidence did not prove him guilty beyond a reasonable doubt.
[1-3] Few contentions are as common in criminal appeals as the one defendant urges in this case. Because of this fact, we have had many occasions to say that in a bench trial, conflicts in the testimony of witnesses are to be resolved by the trial judge. People v. Pierre, 114 Ill. App.2d 283, 252 NE2d 706. We have also said that questions concerning credibility of witnesses is for the trial judge, who is in a better position to decide the weight to be given the testimony of a witness. For these reasons, we will not interfere with the trial court determinations on these points.
[4-6] It is settled in our law that to sustain a conviction for rape, the testimony of the prosecutrix must either be clear and convincing in the light of all the evidence, or be corroborated by other facts and circumstances. People v. Jackson, 103 Ill. App.2d 209, 220, 243 NE2d 551. Whether the case made at trial met this *381 test was for the trial judge to decide in the first instance. As a reviewing court we will not substitute our view of the evidence for that of the trial judge unless the proof is so unsatisfactory that we can say it raises a reasonable doubt. People v. Boney, 28 Ill.2d 505, 192 NE2d 920; People v. Anthony, 117 Ill. App.2d 46, 254 NE2d 101; People v. Bailey, 112 Ill. App.2d 361, 251 NE2d 375. On the record before us, we cannot say the proof is so unsatisfactory that it raises a reasonable doubt of defendant's guilt.
Defendant's second contention arises from the appearance of the complainant's daughter as a prosecution witness. She was questioned by the assistant who was prosecuting. No inquiry concerning her competency to testify was made by the trial judge. Questions asked her by the prosecuting attorney disclosed she was then eight years old and a student in the third grade. She said she knew the difference between the truth and a lie: "[l]ittle girls who don't tell the truth get punished." At one point defense counsel requested that the child be asked when she attained the age of eight. One assistant state's attorney replied, "You can do that on cross, Counsel." The court added, "Let him conduct his own examination. I will let him proceed." The child then gave testimony which tended to corroborate her mother.
Cross-examination disclosed that when the alleged crime was committed, the child was less than seven and a half years old. She did not know when the alleged offense occurred. She testified to some facts not mentioned by her mother. She said mother "told me when this happened." Pressed further, the child said that the assistant state's attorney "told me what to say. Not he didn't tell me what to say, he told me some of it ... just told me some of it, ...." At the conclusion of the State's case, defendant moved to strike the testimony of the child. The motion was denied. It is claimed this was error.
*382 [7-10] There is a presumption in this state that every person who is fourteen years old is competent to testify. Shannon v. Swanson, 208 Ill. 52, 69 NE 869. When a child under the age of fourteen is called as a witness, it is the duty of the trial judge to determine whether the child is competent to testify. People v. Crews, 38 Ill.2d 331, 231 NE2d 451. In the discharge of this duty the trial judge must conduct a preliminary inquiry into the competency of the offered witness by examining the child's intelligence, understanding and moral sense. It is not age, but the degree of intelligence that a child displays which determines the question of its competency as a witness. People v. Davis, 10 Ill.2d 430, 140 NE2d 675. "If testimony is to be permitted, the court's inquiry must, with reason, satisfy the judge that the witness is sufficiently mature (1) to receive correct impressions by his senses, (2) to recollect these impressions, (3) to understand questions and narrate answers intelligently, and (4) to appreciate the moral duty to tell the truth (and comprehend the meaning of the oath)." People v. Sims, 113 Ill. App.2d 58, 61, 251 NE2d 795.
[11] It is impossible to escape observing that the little girl was called as a witness to corroborate the testimony of her mother. Knowledge of human nature reminds us that a child of tender years is impressionable and will repeat what is said by adults. This record vividly demonstrates the rationale for requiring the trial judge to conduct an in-person examination of a child before it is allowed to testify. The examination was not conducted. Thus, questions concerning the competency of the child witness were not answered. Therefore, the judgment is reversed and the cause is remanded for a new trial.
Reversed and remanded.
DRUCKER and ENGLISH, JJ., concur.
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43 F.Supp. 137 (1942)
KING FEATURES SYNDICATE, Inc.,
v.
VALLEY BROADCASTING CO. et al.
No. 552-Civ.
District Court, N. D. Texas, Dallas Division.
February 9, 1942.
M. M. Wade, of Dallas, Tex., for plaintiff.
W. J. Rutledge, Jr., of Dallas, Tex., for defendants.
ATWELL, District Judge.
In addition to the description of this case given in 42 F. Supp. 107, the defendants plead that in March, 1941, at Havana, Cuba, certain governments, including the Republic of Mexico, and the United States of America, entered into the treaty of Havana, a portion of which made it impossible for the defendants to continue to operate XEAW broadcasting station situated at Reynosa, Mexico, which town is near Hidalgo, Texas. That the treaty became operative in Mexico and in the United States in June, 1941, and the defendants were required to decrease their scope of broadcasting territory which required a change in their station's power, and to remove the station to a new location.
That of such required changes the plaintiff was notified but refused to forego any of its rights, as claimed by it, under the contract theretofore existing between it and the Valley Broadcasting Company. That in July following the peremptory notice was given by the defendants, Collins and Collins.
Since a ratified and valid treaty is binding upon not only the governments entering into the same, but upon the nationals of such governments, if the provisions of the treaty are within the constitutional provisions of the government making it, the status of the defendants was altered thereby.
They show to the court by unquestioned testimony that the changes in the dial and in the station location result in a lesser territorial coverage, and in the offering of stale news by the plaintiff to the defendants.
That in such a situation it would be improper to enforce against them the provisions of the original contract between the Valley Broadcasting Company and the plaintiff, even if that contract were not unilateral, and even if that contract had been, in fact, assumed by Collins and Collins by reason of their letter of February, 1941, wherein they asked that they be billed for the weekly payments which the Valley Broadcasting Company had promised to make to the plaintiff under the original contract between those two.
Pretermitting any statements of views at this time with reference to the making by the plaintiff of a profitable arrangement with the Atlanta Constitution at Atlanta, Georgia, for the use of the same machines and service, without loss to it, that it had been furnishing to the Valley Broadcasting Company, and to the defendants, Collins and Collins, it seems to me that the treaty should be considered as a sufficient reason for the discontinuance of the service in the way that it was discontinued by the defendants, Collins and Collins.
A treaty effective and binding upon the contracting parties binds the courts and affects contracts theretofore entered. *138 Pollard's Heirs' Lessee v. Kibbe, 14 Pet. 353, 10 L.Ed. 490.
Courts have no right to annul or disregard any of its provisions. Doe ex dem. Clark v. Braden, 16 How. 635, 14 L.Ed. 1090. They cannot dispense with any of its conditions or requirements upon any notion of equity, general convenience, or substantial justice. United States v. Choctaw Nation, 179 U.S. 494, 21 S.Ct. 149, 45 L.Ed. 291.
Private rights which have suffered by reason of a treaty may be salved by the government which entered into the treaty, and which required the condition causing the injury. O'Reilly de Camara v. Brooke, D.C., 135 F. 384.
Decree should go for the plaintiff for such arrearages plus interest as are due up to September 1, 1941, the date of the discontinuance of the service.
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2006 SD 91
LISA DAWN TOFT, Plaintiff,
v.
PATRICK DALE TOFT, Defendant and Appellee, And
ELMER AND CORNELIA STRATMEYER, Intervenors and Appellants.
No. 23945
Supreme Court of South Dakota.
Considered on Briefs on August 28, 2006
Opinion Filed October 18, 2006
ROBERT L. SPEARS, Spears Law Office, Watertown, South Dakota, Attorney for appellee.
TAMARA D. LEE, Yankton, South Dakota, Attorney for appellants.
ZINTER, Justice.
[¶1.] Elmer and Cornelia Stratmeyer, maternal grandparents, appeal the circuit court's award of attorney's fees[1] in an ongoing dispute with the biological father over custody and visitation of the grandchildren. We affirm.
Facts and Procedural History
[¶2.] The Grandparents' custodial rights were terminated as a result of their misconduct detailed in In re Guardianship and Conservatorship of A.L.T. & S.J.T., 2006 SD 28, 712 NW2d 338. Only the facts relevant to the current dispute concerning attorney's fees are restated.
[¶3.] Lisa Dawn Toft (Mother) and Patrick Dale Toft (Father) were married on May 14, 1994. They are the biological parents of twins, A.L.T. and S.J.T, born October 22, 1994. Because of Mother's and Father's problems, the children lived with Grandparents from birth.
[¶4.] In 1999, Mother filed an action for divorce in Turner County. Grandparents subsequently filed a petition for temporary guardianship and conservatorship in Minnehaha County. Following a hearing, the Minnehaha County Circuit Court granted Grandparents temporary custody.
[¶5.] Father then moved to dismiss the temporary guardianship. However, before a hearing on Father's motion, the parties stipulated to a change of venue to Lincoln County. Following the hearing on Father's motion to dismiss the guardianship in Lincoln County, Judge Bogue ordered that Grandparents' temporary custody continue pending the outcome of the custody issue in the Turner County divorce.
[¶6.] Shortly thereafter, Judge McMurchie, who was presiding over the Turner County divorce, formally joined Grandparents as parties in the divorce. The order stated that "Cornelia and Elmer Stratmeyer shall be joined as interested parties in the above-entitled divorce action, pursuant to SDCL 26-5A-10, and shall be duly notified hereinafter of all proceedings in said action, in accordance with the Uniform Child Custody Jurisdiction Act."[2]
[¶7.] A final judgment and decree of divorce was entered in Turner County on June 6, 2002. The divorce decree awarded Grandparents custody of the children subject to Father's visitation rights. However, a number of disputes arose between Grandparents and Father over custody and visitation. See Guardianship of A.L.T. & S.J.T., 2006 SD 28, 712 NW2d 338. As a result, Father filed a number of motions to enforce visitation or to terminate Grandparents' custodial rights. Those motions underlie Father's request for attorney's fees.
[¶8.] In the course of litigating Father's motions, venue of the Turner County divorce was moved to Lincoln County. Ultimately, Judge Tiede presided over both the divorce and guardianship proceedings in Lincoln County. On August 18, 2004, he terminated the guardianship and granted joint custody to Mother and Father. Mother was given physical custody and Father was given visitation.
[¶9.] In litigating the subsequent custody and visitation issues with Grandparents, Father made four motions for reimbursement of his attorney's fees. All four motions were captioned in the divorce action. In an order dated April 29, 2003, Judge Tiede deferred a decision on Father's attorney's fees request until a final decision was made on custody.[3] Following the final custody decision, Judge Tiede conducted a hearing and awarded Father $11,963.05, which was less than one-half of the attorney's fees requested. Grandparents appeal raising the following issues:
1) Whether the award of attorney's fees should be reversed because the circuit court failed to file findings of fact and conclusions of law.
2) Whether one of Father's motions was timely.
3) Whether the circuit court was authorized to award attorney's fees under SDCL 15-17-38.
4) Whether either party is entitled to appellate attorney's fees.
Standard of Review
[¶10.] We generally review an award of attorney's fees under the abuse of discretion standard of review. Credit Collection Services, Inc. v. Pesicka, 2006 SD 81, ¶5, 721 NW2d 474, 476 (citing In re South Dakota Microsoft Antitrust Litigation, 2005 SD 113, ¶27, 707 NW2d 85, 97). In this case, Grandparents do not challenge the reasonableness of the award. They only question whether attorney's fees are authorized under SDCL 15-17-38. This is a question of law that is reviewed de novo.
Decision
1. Findings of Fact and Conclusions of Law
[¶11.] Grandparents first argue that the attorney's fees award should be reversed and remanded because the court failed to file findings of fact and conclusions of law on that issue. This Court has "stated that a circuit court is required to 'enter findings of fact and conclusions of law when ruling on a request for attorney's fees.'" Wald, Inc. v. Stanley, 2005 SD 112, ¶10, 706 NW2d 626, 629 (quoting Hoffman v. Olsen, 2003 SD 26, ¶10, 658 NW2d 790, 793). Generally, the failure to file findings of fact and conclusions of law constitutes reversible error. Grode v. Grode, 1996 SD 15, ¶29, 543 NW2d 795, 803 (citations omitted). However, we have also noted that an appellate court may remand for findings, or, because findings are not jurisdictional, "an appellate court may decide the appeal without further findings if it feels it is in a position to do so." Hoffman, 2003 SD 26, ¶10, 658 NW2d at 793 (quoting Ridley v. Lawrence County Com'n, 2000 SD 143, ¶13, 619 NW2d 254, 259); see also Swanson & Youngdale, Inc. v. Seagrave Corp., 561 F2d 171, 173 (8thCir 1977) (citing 5A Moore's Federal Practice § 52.07 at 2731 (2d ed 1975) and 9 Wright and Miller, Federal Practice and Procedure § 2577 at 699-700 (1971)).
[¶12.] In order to determine whether we are in a position to review a ruling that is not supported by findings and conclusions, it is helpful to review their purpose.
The purpose of findings of fact is threefold: to aid the appellate court in reviewing the basis for the trial court's decision; to make it clear what the court decided should estoppel or res judicata be raised in later cases; and to help insure that the trial judge's process of adjudication is done carefully.
Heikkila v. Carver, 416 NW2d 591, 592 (SD 1987) (citing J. Moore & J. Lucas, 5A Moore's Federal Practice, ¶52.06 [1] (1987); C. Wright & A. Miller, 9 Federal Practice and Procedure, § 2571 (1971)). Considering these purposes, Swanson explained: "The appellate court may decide the appeal without further findings if '(1) the record itself sufficiently informs the court of the basis for the trial court's decision on the material issue, or (2) the contentions raised on appeal do not turn on findings of fact.'" Swanson, 561 F2d at 173 (citation omitted).
[¶13.] We have also considered a third requirement. In Speck v. Anderson, 349 NW2d 49 (SD 1984), a party challenged the circuit court's failure to enter findings of fact and conclusions of law under SDCL 15-6-52(a). In considering an alleged Rule 52(a) violation, this Court noted that the trial judge had "issued a lengthy memorandum decision explaining in detail [the judge's] reasoning process as well as reciting in detail the testimony, circumstances and inferences upon which [the judge] relied in reaching [the] decision. . . ." Id. at 51. This Court also noted that the memorandum opinion was filed with the clerk of courts, was attached to the subsequent order and was incorporated therein by reference. We ultimately concluded that the circuit court complied with SDCL 15-6-52(a)[4] by incorporating the memorandum opinion by reference. Id.
[¶14.] In this case, the circuit court complied with SDCL 15-6-52(a), and we are in a position to decide the attorney's fees issue without formal findings and conclusions. First, the circuit court incorporated its memorandum opinion into its order by reference. Second, Grandparents have challenged the statutory authorization for, rather than the reasonableness of, the attorney's fees. Therefore, their contentions on appeal do not turn on findings of fact. Finally, the circuit court issued an extremely comprehensive memorandum opinion. That opinion details the facts of the case, the applicable law, and the application of the law to the facts. From that opinion, we can clearly ascertain the basis for the circuit court's decision. Considering the posture of this case, we find it unnecessary to remand for findings of fact and conclusions of law.
2. Timely Motion
[¶15.] Grandparents argue that Father's July 31, 2003 motion for disbursements and attorney's fees was untimely. They point to the requirement in SDCL 15-6-54(d) that an application for the taxation of disbursements must be filed within thirty days of the entry of judgment. Because there was no judgment entered during the thirty-day period before Father's July 31, 2003 motion, Grandparents contend that the motion was untimely.
[¶16.] Grandparents misinterpret SDCL 15-6-54(d). That statute provides in relevant part: "Costs and disbursements under this section shall be waived if proper application is not made within thirty days of the entry of the judgment. For good cause shown, the court may extend the time." Thus, we read the statute simply as a deadline to file the motion. Because the July 31, 2003 motion was not filed after the deadline; i.e. more than thirty days after entry of the judgment awarding fees, the motion was timely.[5]
3. Entitlement to Attorney's Fees under SDCL 15-17-38
[¶17.] "South Dakota utilizes the American rule that each party bears the burden of the party's own attorney['s] fees." Microsoft Antitrust Litigation, 2005 SD 113, ¶29, 707 NW2d at 98 (citing Crisman v. Determan Chiropractic, Inc., 2004 SD 103, ¶26, 687 NW2d 507, 513) (citing Public Entity Pool for Liability v. Score, 2003 SD 17, ¶7, 658 NW2d 64, 67-68)). However, there are two exceptions. The first is when the parties enter into an agreement entitling the prevailing party to an award of attorney's fees. Id. The second is when an award of attorney's fees is authorized by statute. Id.
[¶18.] Grandparents contend that there was an implied agreement that the parties would pay their own attorney's fees. They claim that an implied agreement arose because "each party hired their own legal representation and paid the bills associated with that representation without stating that any other person was responsible for the payment of such legal services." However, such individual arrangements for fees simply reflect that no agreement, express or implied, was reached on the subject of reimbursement.
[¶19.] Grandparents next contend that SDCL 15-17-38 does not authorize attorney's fees because this was a guardianship case. When this matter was decided by the circuit court, SDCL 15-17-38 authorized attorney's fees in "in all cases of divorce, annulment of marriage, determination of paternity, separate maintenance, support, or alimony."[6] Grandparents argue that guardianships were not included in this list of actions.[7] They also argue that although there was an ongoing divorce, they were ordered into the divorce merely because they were the court-appointed guardians.
[¶20.] To support their arguments, Grandparents rely on In re Guardianship of T.L.R., 2002 SD 54, 645 NW2d 246. In that case, maternal grandparents were appointed guardians of T.L.R. The father filed a motion to terminate the guardianship, which the circuit court eventually granted. On appeal, the father filed a motion for attorney's fees. This Court stated that guardianship proceedings were not within the list of actions specified in SDCL 15-17-38, and therefore, fees were not authorized by the statute. Id. ¶19. We caution, however, that Guardianship of T.L.R. failed to mention the statutory language allowing fees in "guardianship proceedings." See SDCL 15-17-38 (2001) (emphasis added). In addition, the 2006 amendment of SDCL 15-17-38 now allows attorney's fees in cases of "custody" and "visitation." See supra n6. Therefore, the attorney's fee rationale in Guardianship of T.L.R. is both inapplicable in this case and superseded in future cases.
[¶21.] Finally, even if we were to apply the 2001 version of the statute, Guardianship of T.L.R. is factually distinguishable. It is distinguishable because those biological parents never married, and therefore, there was no divorce order governing custody. In contrast: the biological parents in the present case were married; the Grandparents intervened as parties in the divorce; the guardianship court deferred to the divorce court on the ultimate issue of custody; the divorce court entered the final order concerning custody; and Grandparents were parties in the post decree divorce proceedings concerning modification of visitation and custody. Considering these facts, we previously noted that although the ultimate termination of [Grandparents'] custodial rights took place through a dismissal of a guardianship, "the court considered [Father's] motion to terminate the guardianship in the context of a divorce proceeding."[8]Guardianship of A.L.T. & S.J.T., 2006 SD 28, ¶38, 712 NW2d at 347.[9] This litigation occurred in the context of the divorce because "[i]t is well settled in this state that a divorce court has continuing jurisdiction over its decrees," and "[a]n application for modification or enforcement of such decree is a supplementary proceeding incidental to the original suit. It is not an independent proceeding or the commencement of a new action." Weekley v. Weekley, 1999 SD 162, ¶25, 604 NW2d 19, 25 (citing Hershey v. Hershey, 467 NW2d 484, 486 (SD 1991) (quoting Eggers v. Eggers, 82 SD 675, 679, 153 NW2d 187, 189 (1967) (citations omitted))).
[¶22.] A more analogous case is Osgood v. Osgood, 2004 SD 22, 676 NW2d 145. In Osgood, the parents divorced and were granted joint legal custody. The paternal grandparents were later awarded visitation rights. The mother, as primary custodian, denied the grandparents their court ordered visitation. The grandparents filed a motion for relief and for attorney's fees in subsequent proceedings in the divorce action. On appeal, this Court affirmed the circuit court's award of grandparent's attorney's fees under SDCL 15-17-38. Id. ¶22.
[¶23.] Here, Grandparents were formally joined as interested parties in the divorce. Furthermore, the ultimate custody decision was made in the divorce. And, they remained parties in the supplemental divorce proceedings to modify or terminate their custodial rights. Judge Tiede clearly recognized these facts stating:
[I]t's clear that Judge McMurchie made an order, entered an order by which he in some manner joined or required or permitted the Stratmeyers to intervene in the divorce case, and his award of custody came through the divorce case. Now, if the Stratmeyers really didn't want to be there you know they had several options: They could have appealed the decision; they could have appealed being brought into the case, but for whatever reason they subjected themselves to the jurisdiction of the [divorce] Court and Judge McMurchie; and when the order was entered, they did not appeal it. So I'm not so sure that it hasn't become the law of the case and they no longer can argue that, hey, we really didn't want to be there and we you know you can't nail me for anything because I didn't want to be there.
Ultimately, because Father's motions were decided in a divorce proceeding in which Grandparents were parties, SDCL 15-17-38 authorized an award of attorney's fees.
4. Apportionment
[¶24.] Grandparents finally argue that the circuit court erred in ordering them to pay attorney's fees while not ordering reimbursement from Mother. They contend that nothing authorizes the court to make this "arbitrary split." However, SDCL 15-17-38 provides circuit courts with discretion in awarding attorney's fees. In relevant part, it provides: "The court, if appropriate, in the interests of justice, may award payment of attorneys' fees in all cases of divorce. . . ." SDCL 15-17-38 (emphasis added).
[¶25.] In applying this statute, the circuit court noted that Grandparents had engaged in a long history of interference with Father's rights and relationship with his children despite orders from numerous circuit court judges. Grandparents also improperly and maliciously influenced the children. Grandparents made unsupported allegations that Father sexually abused the children.[10] Two of the children's counselors expressed concerns about the Grandparents' open negativity regarding Father. And, according to one counselor, the negativity reached the level where the children were "mirroring" the Grandparents' remarks and comments, which "increased the children's fears and anxieties." Guardianship of A.L.T. & S.J.T., 2006 SD 28, ¶23, 712 NW2d at 344. We have been pointed to no similar conduct on the part of Mother. We therefore see no abuse of discretion in ordering Grandparents to reimburse part of Father's attorney's fees without apportionment to Mother.
5. Appellate Attorney's Fees
[¶26.] Both Father and Grandparents moved for appellate attorney's fees. "SDCL 15-26A-87.3 permits an award of appellate attorney['s] fees if they are otherwise allowable and if they are accompanied by a verified, itemized statement of the legal services rendered." Schaefer ex rel. S.S. v. Liechti, 2006 SD 19, ¶20, 711 NW2d 257, 264 (quoting In re Writ of Certiorari as to Wrongful Payments of Attorney Fees Made by Brookings Sch. Dist. Sch. Bd., 2003 SD 101, ¶25, 668 NW2d 538, 547). SDCL 15-17-38 authorizes attorney's fees in cases of divorce. Furthermore, Father provided an itemized statement of the legal services he incurred. As the prevailing party, Father's motion for appellate attorney's fees is granted in the amount of $2,356.22. Because Grandparents have failed to prevail, their motion is denied.
[¶27.] Affirmed.
[¶28.] GILBERTSON, Chief Justice and SABERS, KONENKAMP and MEIERHENRY, Justices, concur.
NOTES
[1] Grandparents actually appeal the award of costs, expenses, and attorney's fees. Grandparents' brief indicates that "the term 'attorney['s] fees' will be used as the inclusive term for attorney['s] fees, costs and expenses." We consider this case with that understanding.
We note, however, that the concept of "costs" has been replaced by "disbursements." SDCL 15-17-36 provides:
The concept of costs as an indemnity to be recovered by a prevailing party is abolished in the courts of South Dakota. Whenever the term, costs, is used, it means disbursements as defined in § 15-17-37.
[2] The statutory authority for joining Grandparents as guardians was SDCL 26-5A-10, which has since been repealed. See SDCL 26-5A-10 (repealed 2005 SD Laws ch 137 § 43). Prior to its repeal, it provided in part:
If the court learns from information furnished by the parties pursuant to § 26-5A-9 or from other sources that a person not a party to the custody proceeding has physical custody of the child or claims to have custody or visitation rights with respect to the child, it shall order that person to be joined as a party and to be duly notified of the pendency of the proceeding and of his joinder as a party.
[3] The Order Regarding Application for Costs and Disbursements stated:
[T]he Court will reserve the right to award attorney['s] fees at a later time in so much as it was represented to the Court by attorney Robert L. Spears and attorney Steven Binger that based on the material both attorneys received from the Family Visitation Center that it is anticipated that this is a continuing matter for the Court and future court hearings are eminent [sic] and therefore a request for reimbursement of attorney['s] fees and costs is premature at this time for the above reasons.
[4] SDCL 15-6-52(a) provides in part,
If an opinion or memorandum of decision is filed, the facts and legal conclusions stated therein need not be restated but may be included in the findings of fact and conclusions of law by reference.
[5] We also note that there were good reasons why Father filed the July 31, 2003 motion before the judgment. At the time Father filed this motion, it was expected that the request for attorney's fees would be decided at the August 11, 2003 hearing in which a final custody decision was expected. However, the final custody decision was continued by the circuit court. For a number of legitimate reasons, the circuit court was unable to make a final decision on custody until August 2004. Thereafter, the previously filed motion for attorney's fees was heard.
[6] Prior to a 2006 amendment, SDCL 15-17-38 provided:
The compensation of attorneys and counselors at law for services rendered in civil and criminal actions and special proceedings is left to the agreement, express or implied, of the parties. However, attorneys' fees may be taxed as disbursements if allowed by specific statute. The court, if appropriate, in the interests of justice, may award payment of attorneys' fees in all cases of divorce, annulment of marriage, determination of paternity, separate maintenance, support or alimony. The court may award the fees before or after judgment or order. The court may award attorneys' fees from trusts administered through the court as well as in probate and guardianship proceedings. Attorneys' fees may be taxed as disbursements on mortgage foreclosures either by action or by advertisement.
The 2006 version of SDCL 15-17-38 was amended to also permit an award of attorney's fees in cases determining "custody" and "visitation." The new statute provides:
The compensation of attorneys and counselors at law for services rendered in civil and criminal actions and special proceedings is left to the agreement, express or implied, of the parties. However, attorneys' fees may be taxed as disbursements if allowed by specific statute. The court, if appropriate, in the interests of justice, may award payment of attorneys' fees in all cases of divorce, annulment of marriage, determination of paternity, custody, visitation, separate maintenance, support, or alimony. The court may award the fees before or after judgment or order. The court may award attorneys' fees from trusts administered through the court as well as in probate and guardianship proceedings. Attorneys' fees may be taxed as disbursements on mortgage foreclosures either by action or by advertisement.
See 2006 SD Laws ch 111 § 1 (emphasis added). This change appears to allow an award of attorney's fees whether the custody and visitation dispute is a part of a divorce or a part of a guardianship. However, the applicability of this amendment has not been raised on appeal, and we express no opinion on it.
[7] This argument is not technically correct. See the text of the statute n6, supra, and the discussion ¶20, infra. (see blue book page 63 on internal cross references)
[8] Compare the two cases. In Guardianship of T.L.R. we applied the termination of guardianship burden of proof in "SDCL 29A-5-506, [noting] that T.L.R. [was] no longer in need of [the grandparents'] guardianship." 2002 SD 54, ¶17, 645 NW2d at 251. In contrast, in this case, Father was required to satisfy the divorce burden of proof:
For the father's motion, the circuit court required that he plead and prove that there had been a substantial or material change in circumstances affecting the welfare and best interests of the children. See Berens v. Berens, 2004 SD 121, ¶12, 689 NW2d 207, 212; Price v. Price, 2000 SD 64, ¶52, 611 NW2d 425, 436; SDCL 25-4-45. Accordingly, the court found that "any continued custody of the children by the grandparents would be detrimental to the children's welfare."
Guardianship of A.L.T. & S.J.T, 2006 SD 28, ¶38, 712 NW2d at 347 n10.
[9] The caption of the order awarding attorney's fees contained both the guardianship and the divorce filing numbers.
[10] Judge Tiede, in a thirty-eight page memorandum opinion, found:
by the greater convincing force of the evidence that the grandparents have intentionally, deliberately, maliciously and wrongfully prevented [the father] from exercising his lawful rights of visitation with his children. They have improperly and maliciously influenced [the children] by their words and conduct in a deliberate effort to alienate these children from [the father]. They have repeatedly and flagrantly refused to comply with the lawful orders of four separate judges, all of whom have ordered visitation for [the father]. The evidence in support of these findings is overwhelming, beginning with the records of Ms. Langenfeld, the children's initial therapist extending back to 2000.
Guardianship of A.L.T. & S.J.T., 2006 SD 28, ¶27, 712 NW2d at 344-45. Judge Tiede also "concluded that based on the evidence no sexual abuse had occurred." Id.
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620 F.Supp. 880 (1985)
MARSH INVESTMENT CORPORATION, Plaintiff,
v.
John A. LANGFORD, et al, Defendants.
PONTCHARTRAIN STATE BANK, Defendant-Third-Party Plaintiff,
v.
CRUMP LONDON UNDERWRITERS, INC. and Eunice K. Langford, Third-Party Defendants.
Civ. A. No. 79-2020.
United States District Court, E.D. Louisiana.
August 30, 1985.
*881 Don M. Richard, New Orleans, La., for third-party defendant Eunice K. Langford.
Michael R. Allweiss, New Orleans, La., for defendant & third-party plaintiff Pontchartrain State Bank.
OPINION ON REMAND
CASSIBRY, Senior District Judge:
The judgment of this court has been affirmed in part and vacated in part, and remanded for further proceedings. Marsh Inv. Corp. v. Langford, 721 F.2d 1011 (5th Cir.1983). The single question presented *882 on remand is whether the prior indebtedness of Eunice Langford Bristow (Mrs. Bristow) to the Pontchartrain State Bank (Bank) should be reinstated.[1] Having carefully studied the record and the applicable Louisiana law, I conclude that the answer is no and enter the following in support of my judgment.
I.
The facts surrounding the cancellation of Mrs. Bristow's debt were never seriously disputed.[2] Mrs. Bristow's obligation to the Bank arose from her execution of two promissory notes for $74,766.32 and $263,481.78 respectively. Mrs. Bristow executed the notes on behalf of her son, John Langford, and never received any of the proceeds from them. In 1976, the Bank filed suit against Mrs. Bristow to collect these notes. At this point, Langford entered into an agreement with the Bank to restructure his debts as well as those of his mother. The Bank agreed to dismiss the suit against Mrs. Bristow and cancel her notes in exchange for a new note, representing the combined indebtedness of mother and son, executed by Langford and secured by a collateral mortgage on property owned by Marsh Investment Corporation (Marsh). The parties have stipulated that the recollaterization agreement between Langford and the Bank constituted a novation of Mrs. Bristow's debt.
II.
Langford had no authority to encumber Marsh's property, and Marsh sued to cancel the mortgages. I granted Marsh's motion for summary judgment and ordered cancellation of the mortgages finding they were acquired either through error or fraud and were, therefore, "illegal, null, and void." Marsh Inv. Corp. v. Langford, 490 F.Supp. 1320, 1328 (E.D.La.1980), aff'd 652 F.2d 583 (5th Cir.1981). In a third party demand, the Bank sought to recover on a blanket bond and to reinstate Mrs. Bristow's released debts. I denied all relief to the Bank. See Marsh Inv. Corp. v. Langford, 554 F.Supp. 800 (E.D.La.1982). On appeal, the Court of Appeals vacated the judgment in favor of Mrs. Bristow and remanded for reconsideration of the Bank's claim against her in light of several contentions grounded in Louisiana law. 721 F.2d at 1015.
III.
Under the Louisiana law of obligations, legally given consent of both parties is essential to the validity of a contract. La.Civ.Code Ann. art. 1779 (West 1952) (amended and reenacted by Acts 1984, No. 331).[3] When consent has been produced by error, on the part of one or both parties, or by fraud, the consent may be vitiated and the contract invalidated or rescinded. La. Civ.Code Ann. art. 1819 (West 1952) (amended and reenacted by Acts 1984, No. 331); see also Ferace v. Fullerton, 425 So.2d 393, 395 (La.App.3d Cir.1982). Not every error will invalidate a contract, but only error as to some point "which was the principal cause" or "motive" for making the contract. La.Civ.Code Ann. art. 1823 (West 1952) (amended and reenacted by Acts 1984, No. 331). This concept of Louisiana law is often referred to as failure of cause. See Carpenter v. Williams, 428 So.2d 1314, 1316 (La.App. 3d Cir.1983). Fraud, as applied to contracts, is the cause of an error "bearing on a material part of the contract." La.Civ.Code Ann. art. 1847 (West 1952) (amended and reenacted by Acts 1984, No. 331). Either error or fraud, *883 depending upon proof of intent or deliberateness, may be the basis of a rescissory action prompted by discovery of a contractual misrepresentation.
The Bank asserts that the facts of this case present a classic example of the Louisiana doctrine of failure of cause. The Bank agreed to the novation of Mrs. Bristow's debt solely on the basis of receiving valid security in the form of a mortgage on the Marsh property. Because the mortgages were invalid, there was no consent on the part of the Bank, and therefore, no contract. Thus, the Bank argues that because it labored under an error of fact, and because of Langford's fraudulent misrepresentations, the novation must be rescinded and Mrs. Bristow's debts reinstated.
In response to the Bank's argument of failure of cause, Mrs. Bristow contends that the Bank's own fault in this matter bars the relief it now seeks.[4] Proclaiming her status as an innocent third party, Mrs. Bristow asserts that the Louisiana jurisprudence and the Civil Code support the proposition that contractual negligence on the part of the party seeking rescission counteracts its claim of contractual error. Before delving into a discussion of the effect of the Bank's fault on its claim for relief, it is necessary to address the Bank's contentions that the issue is not properly before the court.
IV.
Citing Rule 8(c) of the Federal Rules of Civil Procedure, the Bank contends that Mrs. Bristow's contractual negligence argument was not affirmatively plead and therefore must be considered waived. However, the requirement that an affirmative defense must be pleaded or waived must be applied in the context of the liberal pleading and amendment policy of the Federal Rules. This policy is embodied in Rule 15(b) which provides that an unpleaded issue, tried by the express or implied consent of the parties, is to be treated as if it had been raised. Thus, Rule 15(b) may permit consideration of an affirmative defense in a case even when not asserted in the pleadings. See 6 C. Wright and A. Miller, Federal Practice and Procedure: Civil § 1492 (1971). In such a case, the pleadings may be amended to include issues tried by consent, either by motion or through the judgment of the court, at any time, even on remand following an appeal. See 6 Wright & Miller, supra, § 1494, at 475.
Express consent to the issue of the Bank's negligence exists in this case because it is raised in the pretrial order. See 6 Wright & Miller, supra, § 1493, at 461. Furthermore, Mrs. Bristow raises the issue in her pretrial memorandum. Thus, the Bank's contention that Mrs. Bristow failed to raise such an argument until appeal is erroneous. The Bank's conduct and fault have been at issue in this case from the beginning. Under these circumstances, no unfair surprise or prejudice will result from the court's consideration of the Bank's fault in reaching a decision in this matter.
V.
The Bank also contends that the issue of contractual negligence or fault is not properly before the court because it is a defense which only the parties to the contract may raise. The Bank cites no law in support of its position, but rather simply argues that Mrs. Bristow was not a party to the novation agreement and, therefore, may not assert a contractual defense. In *884 my previous disposition of this matter, I held that Mrs. Bristow was an "innocent party in the restructuring of the loans, did not participate in any of the negotiations, and received none of the funds from the notes she had previously signed." 554 F.Supp. at 807. Although the Court of Appeals did not overturn this factual finding of third party status on the part of Mrs. Bristow, the Court stated that Mrs. Bristow had "constituted Langford her universal agent to deal with the bank." 721 F.2d at 1015. If Mrs. Bristow clothed her son with the power to act as her agent, she is entitled to raise any issue concerning the contract confected by her agent. However, even if she cannot properly be characterized as a "party" to the novation agreement, the issue of the Bank's fault in this matter is properly before the court on remand. The Bank's fault goes to the heart of its case in chief and negates one of the essential elements of its claim for rescission of the novation agreement: its right to rely on Langford's misrepresentations.
VI.
Neither I nor the parties have uncovered any Louisiana law directly on point with this case which concerns the rescission of a novation agreement and the reinstatement of a released debt.[5] However, my conclusion that the Bank is not entitled to rescission of the novation agreement finds support in the jurisprudence and Civil Code articles concerning sales contracts.[6] Typically, a purchaser seeks to rescind a contract of sale based on alleged defects in the thing bought or on misrepresentations by the seller. Where the purchaser brings a rescissory action in redhibition based on a defective condition, relief is denied where the defect is one which the buyer might have discovered by simple inspection. La. Civ.Code Ann. art. 2521 (West 1952); see also Wax v. Woods, 209 So.2d 329, 336 (La.App. 4th Cir.1968). In the case of a misrepresentation, relief is denied where the purchaser had every reasonable opportunity to become informed about the facts and has failed to do so. White v. Lamar Realty, Inc., 303 So.2d 598, 601 (La.App.2d Cir.1974); Packwood v. Johnson, 264 So.2d 663, 666 (La.App. 1st Cir.1972).
To establish a right to rescission of a contract based on fraud, the party seeking relief must show a material misrepresentation of fact upon which that party had "a right to rely and actually did rely." La Croix v. Recknagel, 230 La. 842, 89 So.2d 363, 367 (1956); Luquette v. Floyd, 147 So.2d 894, 899 (La.App.3d Cir.1963). Likewise, in a case of nonfraudulent misrepresentation, or "innocent misrepresentation," a contract may be rescinded when there has been justifiable reliance. Cryer v. M & M Mfg. Co., Inc., 273 So.2d 818, 823 (La. 1973). Thus, "[w]here the means of knowledge are at hand, and equally available to both parties, and the subject of purchase is alike open to their inspection, if the purchaser does not avail himself of these *885 means and opportunities, he will not be heard to say ... that he was deceived by the vendor's misrepresentations." Rocchi v. Schwabacher & Hirsch, 33 La.Ann. 1364, 1368 (1881) (quoting Slaughter's Administrator v. Gerson, 80 U.S. (13 Wall.) 379, 383, 20 L.Ed. 627 (1871)).[7]
The Bank's conduct in this case clearly establishes that it had no right to rely on Langford's representations of agency and authority, whether made fraudulently or with reckless disregard of their veracity.[8] The Bank recognized that it needed more than Langford's bald assertions of authority to encumber Marsh's property, but it took no steps to verify the documents which purported to give him that authority. As I have previously held, the Bank was not justified in relying on either the corporate resolution or the shareholder consents. Although the shareholder consents were readily available for inspection, the Bank failed to take steps either to see them or to obtain further information about their validity. 554 F.Supp. at 805. As to the corporate resolution, a "cursory examination of Marsh's corporate records" would have revealed the falsehood. 490 F.Supp. at 1325. "Moreover, the Bank could not have justifiably relied on the opinion by Langford's counsel, Mr. Stassi, which was so qualified that it should have waved a sea of red flags indicating that additional investigation was necessary." Id. The means of checking Langford's authority to act as Marsh's agent lay as "near as the closest telephone." 721 F.2d at 1014. Having failed to make the slightest inquiry into the nature, extent, and very existence of Langford's agency, the Bank is held to have dealt with him at its risk. See Carey Hodges Associates v. Continental Fidelity Corp., 264 So.2d 734, 736 (La.App. 1st Cir. 1972), quoted in 490 F.Supp. at 1324.
I have previously held that the Bank failed to act in good faith in the restructuring transaction.[9] I now hold that the Bank has failed to establish its right to a rescission of the novation agreement and the reinstatement of Mrs. Bristow's debts. The Bank has failed to show that it had a right to rely, or in some instances, in fact did rely, on Langford's misrepresentations of authority. If there was error or fraud in this case it was readily apparent. Bank officials knew that Langford was a poor credit risk, knew that he had no connection with the Marsh corporation other than his asserted agency, and expressly discussed the possibility that Langford was attempting to defraud the Bank. The Bank, schooled in financial dealings and fully assisted by counsel, chose to proceed in ignorance in this matter. 721 F.2d at 1014. Such a conscious course of conduct under the suspicious circumstances of this case may properly be characterized under Louisiana law as gross fault or negligence.[10]*886 The result of the Bank's failure to apprise itself of the facts behind Langford's patent misrepresentations can be laid at no doorstep except its own.
My decision to deny the Bank's claim against Mrs. Bristow remains the same regardless of whether she is an innocent party in the restructuring transaction or "the beneficiary of her agent's calculated fraud." This case is dismissed not because Mrs. Bristow's defense succeeded, or because the equities lie in her favor, but because the Bank failed to establish its right to the relief requested.
Therefore, IT IS ORDERED that the Bank's case against Eunice K. Langford be dismissed. The Clerk of Court shall enter judgment accordingly.
NOTES
[1] Mrs. Bristow has been referred to as Mrs. Langford in the prior opinions of this court.
[2] For the full details of this case, see the opinion of the Court of Appeals, 721 F.2d 1101, as well as the prior opinions of this court reported at 490 F.Supp. 1320 and 554 F.Supp. 800.
[3] In 1984 the Louisiana legislature amended the Civil Code articles dealing with obligations. The amended law became effective January 1, 1985. However, this case arose and will be decided under the prior law. The revisions were substantive in nature and there is no indication that they were intended to apply retroactively. See Frito-Lay, Inc. v. WAPCO Constructors, Inc., 520 F.Supp. 186, 189 (M.D.La.1981) (citations omitted).
[4] In her ultimate memorandum, Mrs. Bristow points out that under the Louisiana Code, as amended in 1984, novation is no longer defined as a contract. See La.Civ.Code Ann. art. 1879 (West Supp.1985). Therefore, she reasons that the contractual defense of failure of cause is inapplicable to a novation. Mrs. Bristow's reasoning is faulty in several respects. The fact that a novation is no longer defined as a contract does not change the fact that a contractual agreement is involved in this case. Further, the revised article "still contemplates a novation effectuated by agreement, as is the case in the vast majority of instances." La.Civ.Code Ann. art. 1879 comment (a). Finally, as previously explained, the new article is not retroactive and thus is not implicated in this case. See supra note 3.
[5] Mrs. Bristow has directed the court to authority in the civil law which supports her position.
If the new obligation were to be annulled because of error, violence or fraud, the novation itself should be considered as not made except if the new obligation were declared by reason of a fact imputable to the creditor himself, in which case the novation would continue to subsist.
C. Aubry & C. Rau, Cours de Droit Civil Francais, Obligations § 324, at 233 (6th ed. 1965) (emphasis added).
[6] For a recent case involving the denial of rescission of a contract for services based on contractual negligence, see Hebert v. Livingston Parish School Board, 438 So.2d 1141 (La.App. 1st Cir.1983). In that case, the plaintiff brought suit for breach of a service contract under which the plaintiff was to provide the musical entertainment for a junior prom. The defendants alleged error of fact, arguing that their consent to the contract was vitiated since, at the time of contracting, they had erroneously believed that the plaintiff was a live band. The Court of Appeals for the First Circuit held that the defendants were not entitled to rescission because the "lack of diligence [on the part of the defendant employee] toward his responsibilities as class sponsor resulted in his erroneous assumption that the plaintiff was a band. In view of this carelessness, defendants cannot now avoid the obligations of the contract by claiming error of fact." 438 So.2d at 1146 (citations omitted).
[7] This case is cited in the comments to new article 1954 of the Louisiana Civil Code which provides that fraud does not vitiate consent where the complaining party could have ascertained the truth without difficulty, inconvenience, or special skill. Article 1954 changes the law in that it generalizes the principles enunciated in former article 1847(3) and (4). Although the change is not retroactive, it is considered to be consistent with views expressed by the Louisiana jurisprudence. See La.Civ.Code Ann. art. 1954 comment (a) (West Supp. 1985).
[8] Although this court has never held that Langford's representations were fraudulent, in the bankruptcy proceedings before the Bankruptcy Court for the Eastern District of Louisiana, the court held that "Langford did either knowingly or in wreckless disregard cause to be issued this bogus mortgage." In addition, the Fifth Circuit Court of Appeals characterized Langford's actions in this case as "calculated fraud." 721 F.2d at 1015.
[9] For authority supporting the denial of rescission of a contract based on this finding alone, see Restatement (Second) of Contracts §§ 164, 172 (1979).
[10] The Louisiana Civil Code defines gross fault as "that which proceeds from inexcusable negligence or ignorance; it is considered as nearly equal to fraud." La.Civ.Code Ann. art. 3556 (13) (West 1953). The Louisiana jurisprudence provides the following edification:
Gross fault undoubtedly implies wanton or wilful negligence.
Sullivan v. Hartford Accident & Indem. Co., 155 So.2d 432, 436 (La.App.2d Cir.1963).
The terms "willful", "wanton", and "reckless" have been applied to that degree of fault which lies between intent to do wrong, and the mere reasonable risk of harm involved in ordinary negligence. These terms apply to conduct which is still merely negligent, rather than actually intended to do harm, but which is so far from a proper state of mind that it is treated in many respects as if harm was intended. The usual meaning assigned to the terms is that the actor has intentionally done an act of unreasonable character in reckless disregard of the risk known to him, or so obvious that he must be taken to have been aware of it, and so great as to make it highly probable that harm would follow. It is usually accompanied by a conscious indifference to consequences, amounting almost to a willingness that harm should follow.
Cates v. Beauregard Elec. Coop., Inc., 316 So.2d 907, 916 (La.App.3d Cir.1975) (citations omitted).
[R]eckless misconduct requires a conscious choice of a course of action either with knowledge of the [harm] involved ... or with knowledge of facts which would disclose this danger to any reasonable man.
Restatement (First) Torts § 500 comment g, quoted in Sullivan, 155 So.2d at 436, n. 2.
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811 F.2d 1022
UNITED STATES of America, Plaintiff-Appellee,v.John M. McGRATH, Defendant-Appellant.
No. 86-1569.
United States Court of Appeals,Seventh Circuit.
Argued Sept. 23, 1986.Decided Jan. 29, 1987.
Lawrence J. Fleming, London, Greenberg & Pleban, St. Louis, Mo., for defendant-appellant.
Bruce E. Ruppert, Frederick J. Hess, U.S. Atty., Asst. U.S. Atty., U.S. Attorney's Office, East St. Louis, Ill., for plaintiff-appellee.
Before BAUER, Chief Judge, WOOD, Circuit Judge and ESCHBACH, Senior Circuit Judge.
BAUER, Chief Judge.
1
Defendant, John McGrath, was convicted of conspiracy to transport stolen jewelry in violation of Title 18, United States Code Sec. 2311 and with receiving and selling stolen jewelry in violation of Title 18, United States Code Sec. 2315. On appeal the defendant argues that the district court erred in permitting the government to elicit testimony from its witness, Thomas Tucker, that he had been indicted with defendant, and that he had pled guilty to both counts in the indictment in exchange for cooperation. Next defendant argues that the district court erred in denying his request for a limiting instruction charging the jury that the co-defendant's guilty plea could not be considered on the issue of defendant's guilt. We disagree with both arguments and affirm the judgment of conviction.
I.
2
On June 12, 1982, an alleged robbery occurred at Lordo's Diamonds, a retail jewelry outlet in St. Louis, Missouri. Robbers allegedly took jewelry valued at over $1,000,000. The evidence suggests that the robbery was committed by Ray Flynn, Lefty Miller, and George Eidson. McGrath assisted Flynn in disposing of a portion of the jewelry by referring him to Thomas Tucker, who traded automobiles in exchange for the stolen jewelry. The evidence also shows that McGrath assisted Tucker by delivering an additional $5,000 from Tucker to Flynn and by referring Jesse Stoneking to Tucker so that Tucker could sell Stoneking a portion of the jewelry he had purchased from Flynn.
3
Thomas Tucker was originally charged as a co-defendant with McGrath, but pursuant to a plea agreement testified as a government witness. After establishing Tucker's address and occupation, government counsel asked him, over defendant's objection, whether he had been "indicted by a grand jury with Mr. McGrath" (Tr. 2-44), whether "you and Mr. McGrath were co-defendants in that indictment" (Tr. 2-45) and whether he had pled guilty to the charge of "conspiracy and receipt, sale and disposition of stolen property having a value of $5,000 or more" (Tr. 2-47).1 The trial court overruled defendant's objection to this testimony and denied his motion to strike it from the record.
4
At the instruction conference the defendant requested a limiting instruction:
5
"Your Honor, there is one instruction that I think perhaps ought to be given and I don't have one but I could probably get you one and that is something to the effect that the guilty plea of Tucker should in no way be considered in any way in the determination of the case against Jack McGrath. I objected at the time that the prosecutors cross-examined or directly examined Tucker on it, because I think they went a little bit too far and I don't waive that objection. But I do think that in view of that, I think the court should at least go to the extent of giving an instruction to the effect that his guilty plea cannot be considered in any way." (Tr. 159).
6
The district court declined to give the instruction.
7
"[T]he court has looked over the overall instructions given, or to be given to the jury. I feel that they will be adequately instructed and accordingly, especially with the instruction not being actually tendered, nor the exact wording of it, I'm not inclined to give it." (Tr. 160).
8
The defendant renewed the same objections and requests after the charge to the jury but still did not tender an instruction. (Tr. 202). The district court overruled defendants objections to the challenged testimony and refused to give a limiting instruction to the jury. The jury found McGrath guilty of both counts and this appeal followed.
II.
9
McGrath argues that the district court erred in permitting the government to elicit testimony from Tucker that he had been indicted with him, that he was a co-defendant, and that he had pled guilty to the charge of conspiracy and the substantive offense of receiving and selling stolen jewelry. He argues that the government should have restricted its examination to establishing only that Tucker had pled guilty to an offense involving interstate transportation of stolen property, without inquiry into the offense itself.
10
In conjunction with this argument, the defendant argues that the government improperly emphasized Tucker's plea of guilty in its direct examination of Tucker. McGrath argues that the government referred to Tucker's guilty plea, his indictment, and the fact that he was McGrath's co-defendant on three separate occasions. He argues that this triple emphasis was improper.
11
First, a number of courts have determined that a co-conspirator's or co-defendant's entry of a guilty plea, even on occasion before the jury, was not prejudicial. See United States v. Kahn, 381 F.2d 824 (1967); United States v. Aldridge, 484 F.2d 655 (1973); United States v. Harris, 141 U.S.App.D.C. 253, 437 F.2d 686 (D.C.Cir.1970). McGrath's argument ignores the fact that both men were alleged in the indictment to be co-conspirators and that the indictment was read to the jury. Had the information that Tucker pled guilty in exchange for cooperation not been brought to the jury's attention, the plain inference which the jury would have been left to draw was that Tucker was permitted by the government to go unpunished for his illegal activities. Thus, to foreclose the possibility that the government had singled out McGrath for prosecution, while permitting his co-defendant to go free, the testimony at issue was properly elicited. Moreover, the record does not reflect that the government improperly emphasized Tucker's guilty plea. The government's examination of Tucker consisted of three questions in a single inquiry. The record does not reflect any additional references to Tucker's guilty plea.
12
Next McGrath argues that the district court erred in refusing to instruct the jury that Tucker's guilty plea could not be considered in any way on the issue of the defendant's guilt. He argues that defense counsel specifically requested that the court give a limiting instruction at the conclusion of the case and during the instruction conference. McGrath relies on United States v. Bryza, 522 F.2d 414, 425 (7th Cir.1975) to support his argument that he was entitled to a limiting instruction. In Bryza we held that the defendant is entitled to a limiting instruction in those cases which have approved the introduction of a co-defendant's guilty plea. Although we agree that a limiting instruction should have been given in this case, none was tendered. Rule 30 of the Federal Rules of Criminal Procedure provides "any party may file written [emphasis added] requests that the court instruct the jury on the law as set forth in the requests." We require a formal submission of a proposed charge, otherwise we will consider alleged defects in the court's instructions only under the plain error doctrine. United States v. Fountain, 642 F.2d 1083 (7th Cir.), cert. denied, 451 U.S. 993, 101 S.Ct. 2335, 68 L.Ed.2d 854 (1981); United States v. Bastone, 526 F.2d 971 (7th Cir.1975), cert. denied, 425 U.S. 2172, 96 S.Ct. 2172, 48 L.Ed.2d 797 (1976). The district court committed no error by refusing the defendant's ambiguous oral request.
13
Finally, pattern jury instruction 3.17 was read to the jury. It charged the jury "that evidence that has been introduced that a witness has been convicted of a crime is to be considered only insofar as it may affect the witness's credibility" (Tr. 192). We agree with the district court that the jury was adequately instructed notwithstanding the district court's denial of defendant's offer to submit a limiting instruction.
14
For the foregoing reasons the judgment of the district court is
15
AFFIRMED.
1
Tucker pled guilty to the conspiracy and substantive count and was later sentenced to two years with a provision for immediate eligibility for parole pursuant to 18 United States Code Sec. 4205(b)(2)
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NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT SEP 15 2010
MOLLY C. DWYER, CLERK
UNITED STATES OF AMERICA, No. 09-10185 U.S. COURT OF APPEALS
Plaintiff - Appellee, D.C. No. 3:07-cr-00325-PJH
v.
MEMORANDUM*
DIANA JING JING HOJSAK, aka Jing
Jing Lu,
Defendant - Appellant.
Appeal from the United States District Court
for the Northern District of California
Phyllis J. Hamilton, District Judge, Presiding
Submitted August 12, 2010**
San Francisco, California
Before: GRABER, CALLAHAN, and BEA, Circuit Judges.
Defendant Diana Hojsak appeals her conviction and sentence for tax evasion
and for filing a false tax return, in violation of 26 U.S.C. §§ 7201, 7206(1). We
affirm.
*
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. Fed. R. App. P. 34(a)(2).
Reviewing de novo the district court’s construction of the hearsay rules,
United States v. Marguet-Pillado, 560 F.3d 1078, 1081 (9th Cir.), cert. denied, 130
S. Ct. 435 (2009), we hold that the documents that purported to be invoices by
Michael Yell were not hearsay. The district court refused to admit the invoices
into evidence on the ground that the statements contained therein were hearsay.
The district court erred because the prosecution did not proffer the statements for
the truth of the matter asserted. Rather, the prosecution proffered the statements to
suggest, through a comparison with other admissible evidence, that the statements
in the invoices were false and that Defendant attempted to palm them off as
legitimate invoices paid with tax deductible dollars. Anderson v. United States,
417 U.S. 211, 219-20 (1974); United States v. Candoli, 870 F.2d 496, 507-08 (9th
Cir. 1989). Because the invoices were improperly excluded from evidence as
hearsay, the district court did not err in permitting the prosecution to cross-examine
Defendant about the statements in them. 1
Reviewing for plain error the district court’s admission of the un-confronted
statements in the invoices, United States v. Jawara, 474 F.3d 565, 583 (9th Cir.
1
Given our conclusion that the invoices were not proffered to prove the
matters asserted therein and that the invoices and the statements made therein were
not received in evidence, we need not address Defendant’s contention that there
was an inadequate foundation to admit the invoices into evidence under an
exception to the hearsay rule.
2
2007), we hold that the district court did not plainly err. The Confrontation Clause
did not prohibit introducing the invoices here because the Confrontation Clause
"does not bar the use of testimonial statements for purposes other than establishing
the truth of the matter asserted." Crawford v. Washington, 541 U.S. 36, 60 n.9
(2004); accord United States v. Mitchell, 502 F.3d 931, 966 (9th Cir. 2007) .
Reviewing for abuse of discretion the district court’s denial of Defendant’s
motion for mistrial on the ground of prosecutorial misconduct, United States v.
Cardenas-Mendoza, 579 F.3d 1024, 1029 (9th Cir. 2009), we hold that the district
court did not abuse its discretion. Because the invoices were not hearsay, the
prosecution’s use of them in cross-examination did not constitute misconduct. The
prosecution failed to establish, outside the presence of the jury, its good-faith basis
for asking Defendant whether she fabricated the invoices before asking that
question of Defendant in the jury’s presence. United States v. Rushton, 963 F.2d
272, 274-75 (9th Cir. 1992). But the failure to establish the prosecution’s basis in
advance did not prejudice Defendant, because the district court later found the
good-faith basis. Id. at 275. That finding was not plainly erroneous; the invoices
asserted an implausible number of hours worked and information in the invoices
suggested that they had been created after the fact and by a non-native English
3
speaker.2 And the prosecution received the invoices from Defendant’s counsel.
The district court did not abuse its discretion by denying Defendant’s motion for
mistrial when the prosecution’s question did not prejudice Defendant. United
States v. Allen, 341 F.3d 870, 891-92 (9th Cir. 2003).
Reviewing de novo the district court’s refusal to give Defendant’s requested
jury instructions, United States v. Pierre, 254 F.3d 872, 875 (9th Cir. 2001), we
hold that the instructions given adequately covered Defendant’s theory of defense.
A district court does not err by refusing to give a good-faith instruction in a
criminal tax case if it properly instructs the jury on specific intent, as the district
court did here. United States v. Dorotich, 900 F.2d 192, 194 (9th Cir. 1990);
United States v. Solomon, 825 F.2d 1292, 1297 (9th Cir. 1987). Dorotich and
Solomon remain binding precedent in our circuit after Cheek v. United States, 498
U.S. 192, 201-02 (1991), because they are not "clearly irreconcilable" with it.
Miller v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc). Indeed, Cheek,
498 U.S. at 202, confirms the premise of those cases, which was that good faith is
incompatible with wilfully evading taxes or with filing tax returns knowing that
they are false.
2
Yell, the ostensible author of the invoices, is a native English speaker.
Defendant is not.
4
Reviewing for abuse of discretion the district court’s decision to give an
Allen charge, United States v. Berger, 473 F.3d 1080, 1089 (9th Cir. 2007), we
hold that the jury’s note stating that it was deadlocked clearly warranted the
charge, United States v. Steele, 298 F.3d 906, 911 (9th Cir. 2002). Reviewing de
novo whether the district court coerced the jury’s verdict, Berger, 473 F.3d at
1089, we hold that it did not. The form of the charge here was not coercive; it was
substantially identical to the model instruction. Ninth Circuit Model Criminal Jury
Instructions § 7.7 (2003). The jury deliberated for a sufficient length of time after
the Allen charge to reach a reasoned decision. See, e.g., Warfield v. Alaniz, 569
F.3d 1015, 1029 (9th Cir. 2009); United States v. Freeman, 498 F.3d 893, 908 (9th
Cir. 2007); Berger, 473 F.3d at 1092-93. The timing of the verdict is also not an
indicator of coercion, because the verdict appears to have been triggered by the
court’s providing the jury with requested clarification on an issue. See United
States v. Banks, 514 F.3d 959, 975 (9th Cir. 2008) (noting that a jury "appears to
have requested portions of the evidence to be shown to them again" during the time
between the Allen charge and the verdict). This is not a case in which "it’s clear
from the record that the charge had an impermissibly coercive effect on the jury."
United States v. Williams, 547 F.3d 1187, 1205 (9th Cir. 2008) (internal quotation
marks omitted).
5
Reviewing for clear error the district court’s factual findings at sentencing,
United States v. Dewey, 599 F.3d 1010, 1014 (9th Cir. 2010), we hold that the
district court’s calculation of tax loss was not clearly erroneous. Under United
States v. Yip, 592 F.3d 1035, 1041 (9th Cir. 2010), and United States v. Valentino,
19 F.3d 463, 464 (9th Cir. 1994), the district court was not required to reduce
calculated tax loss by any offsetting deductions that Defendant or her business
might have claimed had they reported the income.
Because there were no prejudicial errors in this case, there were no
"aggregated errors [that] so infected the trial with unfairness as to make the
resulting conviction a denial of due process." Jackson v. Brown, 513 F.3d 1057,
1085 (9th Cir. 2008) (internal quotation marks omitted).
AFFIRMED.
6
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ELECTRONIC RECORD mi*/?
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COA# 06-15-00026-CR OFFENSE: 1
Companion-e-lS^^S-CR
Roger Dale Gammons v. The State
STYLE: ofTexas COUNTY: Hopkins
COA DISPOSITION: Affirmed TRIAL COURT: 8th District Court
DATE: 8/11/15 Publish: No TCCASE#: 1423872
IN THE COURT OF CRIMINAL APPEALS
Roger Dale Gammons v. The State
STYLE: ofTexas , CCA#:
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APPELLANT^ Petition CCA Disposition:
FOR DISCRETIONARY REVIEW IN CCA IS: DATE:
JUDGE:
DATE: //Itf7w/r SIGNED: PC:_
JUDGE: WA 'aAS-6—- PUBLISH: DNP:
MOTION FOR
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JUDGE:
ELECTRONIC RECORD
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FILED
NOT FOR PUBLICATION MAY 22 2012
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
LARRY TRUNDLE, No. 11-15281
Plaintiff - Appellant, D.C. No. 1:09-cv-02058-JLT
v.
MEMORANDUM *
COMMISSIONER OF SOCIAL
SECURITY ADMINISTRATION,
Defendant - Appellee.
Appeal from the United States District Court
for the Eastern District of California
Jennifer L. Thurston, Magistrate Judge, Presiding
Submitted May 15, 2012 **
San Francisco, California
Before: THOMAS, McKEOWN, and W. FLETCHER, Circuit Judges.
Larry Trundle appeals the district court’s judgment affirming the
Commissioner’s denial of Trundle’s application for social security benefits.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
Upon the parties’ mutual agreement, this case was submitted for
decision without oral argument. See Fed. R. App. P. 34(f).
Trundle alleges disability due to back pain. At Step Five, the Administrative Law
Judge (“ALJ”) found Trundle could perform jobs that exist in significant numbers
in the national economy. On appeal, Trundle makes two core arguments: 1) the
ALJ improperly rejected the opinion of Trundle’s examining physician, Dr.
Berrien; and 2) substantial evidence does not support the ALJ’s Step Five decision
because the ALJ improperly relied on testimony of past work that was more than
15 years old and the ALJ used the medium medical-vocational rules as a
framework. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
The ALJ provided “specific, legitimate reasons” supported by “substantial
evidence,” Thomas v. Barnhart, 278 F.3d 947, 957 (9th Cir. 2002) (citation and
internal quotation marks omitted), for her decision to credit Dr. Madireddi over Dr.
Berrien. Based on the totality of the evidence in the record, “[t]he ALJ may
disregard the treating physician’s opinion whether or not that opinion is
contradicted.” Magallanes v. Bowen, 881 F.2d 747, 751 (9th Cir. 1989). Both
doctors examined Trundle only once. Dr. Berrien’s examination, however,
occurred more than seven years before Trundle filed the Social Security claim at
issue here, and was based on unreliable subjective complaints voiced by Trundle.
In addition, Dr. Berrien was an examining physician, not a treating physician, and
his findings were contradicted by Dr. Madireddi’s more recent and more reliable
-2-
findings. The decision to credit Dr. Madireddi over Dr. Berrien was therefore
supported by substantial evidence.
Substantial evidence also supports the ALJ’s Step Five decision. Trundle is
not limited to light work; rather, he is limited to medium work with a slight
reduction in the total amount of lifting. Although the ALJ referred to Trundle’s
past work experience as a truck driver, the record is unclear as to whether that past
work experience was more than fifteen years old. Assuming, without deciding,
that the ALJ erred in referring to Trundle’s past work experience, the error was
harmless because the ALJ twice acknowledged in her opinion that Trundle’s prior
work experience was not relevant. See Batson v. Comm’r of the Soc. Sec. Admin.,
359 F.3d 1190, 1197 (9th Cir. 2004) (finding error harmless where it did not negate
the validity of the ALJ’s ultimate conclusion). Further, the regulation does not
preclude considering past work experience older than fifteen years. 20 C.F.R.
§ 404.1565(a). Rather, fifteen years is the time frame that the agency “usually
consider[s].” Id. The regulation also states that where an applicant has “acquired
skills through your past work, we consider you to have these work skills unless you
cannot use them in other skilled or semi-skilled work that you can now do.” Id.
Driving is a skill unlikely to be entirely lost with the passage of time, and Trundle
testified that he still drives. Additionally, the ALJ properly posed hypothetical
-3-
questions to the Vocational Expert and properly based those questions on the
medical findings of Dr. Madireddi. See Tackett v. Apfel, 180 F.3d 1094, 1101 (9th
Cir. 1999) (describing the role of a Vocational Expert in a Social Security hearing).
Finally, the Vocational Expert properly accounted for Trundle’s lifting
capacity being slightly below the normal cut-off for “medium” and accordingly
discounted the number of jobs available.
Trundle’s motion to take judicial notice is denied.
AFFIRMED.
-4-
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[Cite as State v. Hunt, 2013-Ohio-4431.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
BUTLER COUNTY
STATE OF OHIO, :
Plaintiff-Appellee, : CASE NO. CA2013-03-053
: DECISION
- vs - 10/7/2013
:
JOHN SAMUEL HUNT, :
Defendant-Appellant. :
CRIMINAL APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS
Case No. CR2012-05-0653
Michael T. Gmoser, Butler County Prosecuting Attorney, Government Services Center, 315
High Street, 11th Floor, Hamilton, Ohio 45011, for plaintiff-appellee
Christopher Paul Frederick, 304 North Second Street, Hamilton, Ohio 45011, for defendant-
appellant
Per Curiam.
{¶ 1} This cause came on to be considered upon a notice of appeal, the transcript of
the docket and journal entries, the transcript of proceedings and original papers from the
Butler County Court of Common Pleas, and upon a brief filed by appellant's counsel, oral
argument having been waived.
{¶ 2} Counsel for defendant-appellant, John Samuel Hunt, has filed a brief with this
Butler CA2013-03-053
court pursuant to Anders v. California, 386 U.S. 738, 87 S.Ct. 1396 (1967), which (1)
indicates that a careful review of the record from the proceedings below fails to disclose any
errors by the trial court prejudicial to the rights of appellant upon which an assignment of
error may be predicated; (2) lists two potential errors "that might arguably support the
appeal," Anders at 744, 87 S.Ct. at 1400; (3) requests that this court review the record
independently to determine whether the proceedings are free from prejudicial error and
without infringement of appellant's constitutional rights; (4) requests permission to withdraw
as counsel for appellant on the basis that the appeal is wholly frivolous; and (5) certifies that
a copy of both the brief and motion to withdraw have been served upon appellant.
{¶ 3} Having allowed appellant sufficient time to respond, and no response having
been received, we have accordingly examined the record and find no error prejudicial to
appellant's rights in the proceedings in the trial court. The motion of counsel for appellant
requesting to withdraw as counsel is granted, and this appeal is dismissed for the reason that
it is wholly frivolous.
S. POWELL, P.J., PIPER and M. POWELL, JJ., concur.
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206 P.3d 1222 (2009)
227 Or. App. 642
STATE
v.
WINNOP.
Court of Appeals of Oregon.
April 22, 2009.
Affirmed without opinion.
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cv5-061
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-95-00061-CV
Board of Law Examiners of The State of Texas, Appellant
v.
James Brian Allen, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT
NO. 94-07537, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING
The Board of Law Examiners ("Board") found James Brian Allen to be chemically
dependent and recommended him for a probationary license to practice law in Texas. The district
court reversed the decision, holding that the Board's order was not supported by substantial
evidence. Because we find that substantial evidence does exist to support the Board's order, we
will reverse the judgment of the district court.
BACKGROUND
Appellee James Brian Allen applied for admission to the State Bar of Texas on
August 25, 1993. The Board of Law Examiners made a preliminary determination that Allen
might suffer from chemical dependency based on certain disclosures Allen made in his Declaration
of Intention to Study Law and in the application itself. Because of this determination, the Board
was required to order Allen to submit to a treatment facility for a chemical dependency evaluation,
and Allen was evaluated on December 3, 1993. See Tex. R. Governing Bar Admission 10(b)(1).
The Board held a hearing on April 22, 1994 to determine if Allen actually did
suffer from chemical dependency. Notably, Allen conceded that there was sufficient evidence for
the Board to make a preliminary determination of chemical dependency and thus to justify the
hearing. At the hearing, the Board determined that Allen, in fact, suffers from chemical
dependency and ordered that he be awarded a probationary license for a period of two years,
subject to certain restrictions and conditions. These conditions included, among other things,
abstinence from alcohol, obtaining psychiatric or psychological care, compliance with the
Lawyer's Assistance Program, participation in Alcoholics Anonymous, and submission to random
alcohol/drug screens.
Allen exercised his right to judicial review, and the district court found that the
Board's order was not supported by substantial evidence. The district court remanded the case
to the Board and ordered that the "Board immediately certify James Brian Allen to the Supreme
Court of Texas for issuance of a regular license to practice law."
DISCUSSION
Appellant Board attacks the judgment of the district court by three points of error.
In its first two points of error, the Board asserts that the trial court erred in setting aside the
Board's order because: (1) the chemical dependency evaluation was properly before the Board
for consideration, and (2) the order is supported by substantial evidence in the record even in the
absence of the chemical dependency evaluation. In its third point, the Board asserts that the trial
court abused its discretion by ordering the Board to certify Allen to the supreme court for issuance
of a regular license to practice law.
We will initially address the Board's second point of error in which it argues that
the trial court erred in setting aside its order because the order is supported by substantial
evidence even in the absence of the chemical dependency evaluation. We note that, because of
its supervisory role in the admission process, the Board is essential to preserving the integrity and
character of the Texas Bar. Board of Law Examiners v. Stevens, 868 S.W.2d 773, 776 (Tex.),
cert. denied, 114 S. Ct. 2676 (1994). The supreme court grants the Board considerable discretion
to evaluate applicants based upon the promulgated admission standards. Id. at 776. Before it may
recommend a person for a license, however, the Board must be convinced "that the person is of
the moral character and of the capacity and attainment proper for that person to be licensed."
Tex. Gov't Code Ann. § 82.004(c) (West 1988).
The Rules Governing Admission to the Bar of Texas (the "Rules"), which have the
same effect as statutes, dictate that the Board shall complete an investigation and determine that
an applicant possesses good moral character and fitness before that person shall be eligible for bar
admission. Tex. R. Governing Bar Admission 4(a).
Fitness, as used in these Rules, is the assessment of mental and emotional health
as it affects the competence of a prospective lawyer. The purpose of requiring an
Applicant to possess this fitness is to exclude from the practice of law any person
having a mental or emotional illness or condition which would be likely to prevent
the person from carrying out duties to clients, courts or the profession. A person
may be of good moral character, but may be incapacitated from proper discharge
of his or her duties as a lawyer by such illness or condition.
Tex. R. Governing Bar Admission 4(c). When the Board makes a negative character and fitness
determination, an applicant is entitled to judicial review of the Board's decision. See Tex. R.
Governing Bar Admission 15(i). The reviewing court may affirm or remand the matter to the
Board depending on whether or not the decision "is reasonably supported by substantial
evidence." Tex. R. Governing Bar Admission 15(i)(5) (emphasis added).
The Administrative Procedure Act ("APA") does not govern Board procedures,
however, reference to the APA sections which address the scope of judicial review under the
substantial evidence rule is beneficial. See Stevens, 868 S.W.2d at 777 (citing Tex. Gov't Code
Ann. §§ 2001.001-2001.902 (West 1995)). Under the APA, "a court may not substitute its
judgment for the judgment of the state agency on the weight of the evidence on questions
committed to agency discretion." Tex. Gov't Code Ann. § 2001.174 (West 1995); see Railroad
Comm'n v. Pend Oreille Oil & Gas Co., 817 S.W.2d 36, 41 (Tex. 1991) (substantial evidence
rule "prevents the court from usurping the agency's adjudicative authority even though the court
would have struck a different balance"). A court may affirm the agency decision in whole or in
part and must reverse or remand the agency's decision only if "the administrative findings,
inferences, conclusions, or decisions are: . . . (E) not reasonably supported by substantial
evidence considering the reliable and probative evidence in the record as a whole; or (F) arbitrary
or capricious or characterized by abuse of discretion or clearly unwarranted exercise of
discretion." Tex. Gov't Code Ann. § 2001.174; see also Stevens, 868 S.W.2d at 777-78 (quoting
same statute). "Although substantial evidence is more than a mere scintilla, the evidence may
actually preponderate against the decision of the agency and nonetheless amount to substantial
evidence." City of El Paso v. Public Util. Comm'n, 883 S.W.2d 179, 185 (Tex. 1994) (emphasis
added).
In this case, Allen put his fitness to practice law in issue through statements he
made in his Declaration of Intention to Study Law and in his application for admission to the
Texas Bar. At the hearing to determine chemical dependency, Allen's testimony indicated that
he had a past history of alcohol abuse. Evidence established that Allen applied for admission to
the Oklahoma bar in July of 1993. In his application, Allen admitted to the Oklahoma Board of
Law Examiners that he had been addicted to alcohol. He testified that he dropped out of
Oklahoma City University Law School in 1991 because of alcohol abuse. Allen also affirmed that
he unsuccessfully attempted to stop drinking some time before August of 1989.
Additionally, Allen discussed civil and criminal legal problems that had arisen as
a consequence of excessive drinking. Specifically, in 1985, Allen was arrested for public
intoxication when the car in which he was a passenger was pulled over and a small quantity of
marijuana was found in the car. In 1988, Allen was arrested and charged with driving while
intoxicated. Allen had a .21 blood-alcohol content and was driving down the wrong side of the
road when he collided head-on with a pickup truck. Further, in 1991, Allen was charged with
criminal trespass and disorderly conduct because he unwittingly entered someone else's house
while he was intoxicated.
Despite his statements in the Oklahoma application, Allen testified that it was now
his belief that he drank alcohol in an attempt to self-treat the depression from which he suffered
and that he was not addicted to alcohol. Allen explained that the only reason he told the
Oklahoma Board that he was addicted was to offer something by way of explanation for his
behavioral wrongdoings.
Allen's medical expert, Dr. Richard E. Coons, testified that he administered a
general psychiatric exam to Allen on March 23, 1994 and determined that Allen was suffering
from depression. Dr. Coons stated his belief that Allen was overdrinking at least in part to self-treat his depression and that Allen was less likely to resort to alcohol if he was cured of the
depression. However, Dr. Coons admitted in his testimony that, if Allen stopped taking his
prescribed anti-depressant medication, a further problem with alcohol was a possibility.
Allen was sober from December 1992 until the date of the hearing. During this
time he married and found strength in his spouse as well as in his church. Allen testified that he
was now more confident, was sleeping better and that his anxiety level had dropped. He believed
that his anti-depressant medicine was effectively curing him and claimed that he no longer desires
alcohol. It is also noteworthy that Allen was employed as a legal intern in an Austin law office
at the time of the hearing and had been so employed since July or August of 1993. Will Wilson,
an attorney in that office, testified that Allen has properly discharged his duties under the Code
of Professional Responsibility and that he believed Allen would continue to do so.
Allen asserts that he is not presently chemically dependent as evident by his
seventeen months of sobriety. According to Allen, his past behavioral indiscretions are not
indicative of present chemical dependency. Allen points to Texas Rule Governing Bar Admission
4(c), which states that "[t]he fitness required is a present fitness, and prior mental or emotional
illness or conditions are relevant only so far as they indicate the existence of a present lack of
fitness." The supreme court, however, granted the Board considerable discretion in evaluating
applicants based upon the promulgated admission standards. Stevens, 868 S.W.2d at 776. Based
on the evidence, the Board found that Allen presently suffers from chemical dependency and that
he is in need of psychiatric assistance. Apparently, the Board found that Allen's "prior mental
or emotional illness or conditions" were relevant as tending to indicate a present lack of fitness.
The supreme court has not undertaken the impossible task of implementing specific
standards for the Board to employ when attempting to determine whether an applicant has been
"clean" or sober long enough to remove the chemically dependent label. The Board must look
at the evidence in each individual situation to determine chemical dependence. After a "good
moral character and fitness" hearing, the Board has the discretion to recommend, among other
things, that an applicant be granted a regular license, a probationary license, or no license at all.
Tex. R. Governing Bar Admission 15(f). "The Board shall not have the authority to refuse to
recommend the granting of a Probationary License to an Applicant who has passed the applicable
bar examination solely because the Applicant suffers from chemical dependency." Tex. R.
Governing Bar Admission 16(b).
Pursuant to its authority under the Rules, the Board ordered that Allen's good
moral character and fitness be conditionally approved and that he be recommended for a
probationary license upon passing the Texas Bar Examination. See Tex. R. Governing Bar
Admission 16(a)(1). The probationary license extended for two years and contained thirteen
conditions. Among other things, these conditions included abstinence from alcohol, obtaining
psychiatric or psychological care, compliance with the Lawyers' Assistance Program, participation
in Alcoholics Anonymous, and submission to random alcohol/drug screens. Although we may
not agree that certain of the thirteen conditions comply with Texas Government Code
section 82.038 or with Rule 16(c) of the Rules Governing Admission to the Bar of Texas, neither
the Board's power to delineate such conditions, nor the extent of such conditions are challenged
by this appeal and thus we do not address those issues.
In this case, Allen had been sober for seventeen months prior to the hearing, but
he was not participating in any structured treatment program. In light of all the evidence of
alcohol abuse, including Allen's previous unsuccessful attempt to stop drinking, his seventeen
months of sobriety did not remove the Board's discretion to find Allen presently chemically
dependent. We refuse to set the precedent that seventeen months is an adequate period of sobriety
under any circumstance to eliminate the possibility that an applicant remains chemically
dependent. The Board did not improperly deny Allen an opportunity to practice law because he
was found to be chemically dependent, but rather attempted to exercise its discretion properly by
awarding Allen a probationary license. The district court improperly usurped the Board's
authority and replaced the Board's judgment with its own. Based on the evidence in the
administrative record excluding the chemical dependency evaluation, (1) we find that there was
substantial evidence to reasonably support the Board's decision that Allen was presently
chemically dependent.
CONCLUSION
We hold that, because substantial evidence existed in the record to support the
Board's decision that Allen was presently chemically dependent at the time of the hearing, the
district court improperly substituted its judgment for that of the Board. Because we sustain the
Board's second point of error, it is unnecessary to address appellant's remaining points of error.
We reverse the district court's judgment and render judgment affirming the Board's order.
Jimmy Carroll, Chief Justice
Before Chief Justice Carroll, Justices Jones and B. A. Smith
Reversed and Rendered
Filed: October 18, 1995
Publish
1. The failure to consider the chemical dependency evaluation in our decision is in no way
indicative of our opinion as to whether such evaluation was properly before the Board for
consideration at the good character and fitness hearing.
ss.
The supreme court has not undertaken the impossible task of implementing specific
standards for the Board to employ when attempting to determine whether an applicant has been
"clean" or sober long enough to remove the chemically dependent label. The Board must look
at the evidence in each individual situation to determine chemical dependence. After a "good
moral character and fitness" hearing, the Board has the discretion to recommend, among other
things, that an applicant be granted a regular license, a probationary license, or no license at all.
Tex. R. Governing Bar Admission 15(f). "The Board shall not have the authority to refuse to
recommend the granting of a Probationary License to an Applicant who has passed the applicable
bar examination solely because the Applicant suffers from chemical dependency." Tex. R.
Governing Bar Admission 16(b).
Pursuant to its authority under the Rules, the Board ordered that Allen's good
moral character and fitness be conditionally approved and that he be recommended for a
probationary license upon passing the Texas Bar Examination. See Tex. R. Governing Bar
Admission 16(a | {
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233 F.2d 56
Fred M. FORD, Appellant,v.UNITED STATES of America, Appellee.
No. 15672.
United States Court of Appeals Fifth Circuit.
April 19, 1956.
Rehearing Denied May 22, 1956.
COPYRIGHT MATERIAL OMITTED Douglas W. McGregor, Houston, Tex., McGregor & Sewell, Houston, Tex., of counsel, for appellant.
Harman Parrott, Asst. U. S. Atty., San Antonio, Tex., Frederick B. Ugast, Atty., Dept. of Justice, Washington, D. C., Russell B. Wine, U. S. Atty., San Antonio, Tex., for appellee.
Before BORAH, TUTTLE and JONES, Circuit Judges.
JONES, Circuit Judge.
1
An indictment in three counts charged that appellant had wilfully and knowingly attempted to evade and defeat a large part of the income tax due and owing by him and his wife for the years 1945, 1946 and 1947 by filing false and fraudulent returns on behalf of himself and his wife wherein he reported income for a less sum than the true amount, and in which he stated the tax for smaller amounts than he knew to be owing. The counts were in substantially the same form. A separate count set forth the amounts of income and tax for each of the three years. The indictment alleged violations of the portion of the Internal Revenue Code of 1939 which provided that:
2
"* * * any person who willfully attempts in any manner to evade or defeat any tax imposed by this chapter or the payment thereof, shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, be fined not more than $10,000, or imprisoned for not more than five years, or both, together with the costs of prosecution." Internal Revenue Code of 1939, Former 26 U.S. C.A. § 145(b); Internal Revenue Code of 1954, 26 U.S.C.A. § 7201.
3
This is an appeal from a conviction and sentence following a second trial of this case held at Austin, Texas. This court reversed a conviction obtained at the first trial. Ford v. United States, 5 Cir., 1954, 210 F.2d 313. At the second trial, as at the first, the Government relied upon the cash receipts and expenditures method, sometimes called the net worth method, of establishing unreported income. In the first appeal, as in the present appeal, the appellant contended that the District Court should have granted a motion for acquittal because of the insufficiency of the evidence. After relating in some detail the evidence adduced at the former trial it was held by this Court that the motion for acquittal was properly denied. The evidence in the record now before us presents proofs no less convincing, and without setting forth the evidentiary facts, we hold, as we held before, that the motion for acquittal was properly denied.
4
The appellant contends that error was committed in denying his motion for acquittal because there had been no determination of his tax liability by the Commissioner under § 272 or § 3612 of the Internal Revenue Code of 1939. § 272 of the Internal Revenue Code of 1939, former 26 U.S.C.A., provides for the procedure in determining the correctness of a tax deficiency proposed by the Commissioner of Internal Revenue, including the issuance of the familiar ninety-day letter. § 3612 authorizes the Collector to make a return where no return or a false or fraudulent return has been filed, and requires that the Commissioner [of Internal Revenue] shall determine and assess all taxes, other than stamp taxes, as to which returns are made pursuant to the section. Whatever bearing the appellant's contention might have in a proceeding for the collection of a tax, it has no application in a criminal prosecution for attempting to evade and defeat a tax by filing false and fraudulent returns. As this Court has heretofore said: "A prosecution for income tax evasion is not an effort by the Government to compute income tax at all. It is an effort by the Government to prove that the taxpayer failed to compute it honestly. There is nothing in this Section [Former 26 U.S.C.A. § 41] nor in any other applicable statute that restricts the Government in the method of proving this fact if it exists." Dupree v. United States, 5 Cir., 1955, 218 F.2d 781, 789.
5
At the first trial of this case, Margaret Lera testified as a witness for the Government. She testified as a witness for the Government at the second trial. On the first trial this witness testified to the making of pay-offs to the police department of Galveston. There was no testimony in the first trial that the appellant received any of the moneys. We held, on the former appeal, that the admission of the testimony of this witness was erroneous and highly prejudicial. For this error, and another which we need not here mention, a new trial was granted. At the second trial the witness testified that she sent pay-off money to the appellant during the years 1945, 1946 and 1947 by detectives. Being interrogated about conversations between the appellant and herself during these years, she stated that she had asked appellant if the detectives had been delivering what she had been sending, and quoted his reply as being "Yes, that everything was all right". This, we think, was enough to meet the objection which was found to be error on the former appeal. It was shown that Mrs. Lera had made a settlement after the first conviction of the appellant of her own income tax liability. On cross-examination she told of being interviewed by Government agents about a month before the trial, being furnished with a transcript of the questions and answers comprising the interview, and of burning the transcript of the testimony during the noon recess of the day she testified. The owing and settlement of income taxes, the discussion with Government agents regarding some matter, possibly the Ford case, and the destruction of the transcript of the interview are not matters which would exclude Mrs. Lera's testimony.
6
The District Court admitted testimony as to expenditures made by appellant's wife and error is assigned because such testimony was received. There was evidence that such funds as Mrs. Ford had and spent were received from the appellant. The court declined to give a charge to the jury, requested by appellant, that it should give no consideration to purchases of Mrs. Ford in determing the taxable income of the appellant. We need not discuss these questions as they are disposed of in the former appeal. Ford v. United States, supra. See Lloyd v. United States, 5 Cir., 1955, 226 F.2d 9.
7
Relying chiefly upon Calderon v. United States, 9 Cir., 1953, 207 F.2d 377, the appellant urges that the unsworn statements made by appellant to Government agents were inadmissible because, he says, the corpus delicti had not been established. The agents testified that appellant had said, in response to questions, that he kept cash in a chifforobe drawer in the amount of two or three thousand dollars in 1945 and 1947. Again he said, that in 1944, prior to the tax years involved, he had $12,000 in cash in the chifforobe drawer. Where the net worth doctrine is relied upon in a criminal prosecution of a tax evasion case, the taxpayer's opening net worth cannot be established by his uncorroborated extra-judicial statement. Smith v. United States, 348 U.S. 147, 75 S.Ct. 194, 99 L. Ed. 192; United States v. Calderon, 348 U.S. 160, 75 S.Ct. 186, 99 L.Ed. 202. In the case before us the Government did not rely upon but rather rejected the statements of the appellant Ford as to the cash in the drawer. When the extra-judicial statements are disbelieved and are not relied upon by the Government it can hardly be error on its part that it produced no corroborative evidence.
8
The appellant urges that the indictment upon which he was convicted was void because the only witness who appeared before the Grand Jury was a Government agent who had no personal knowledge of the facts, that his testimony was based upon hearsay and hence incompetent. The Supreme Court of the United States has considered the question and given an answer adverse to appellant's contention. In the causa celebre of Frank Costello a conviction was had of income tax evasion upon proof of increases of net worth. The only witnesses before the Grand Jury which returned the indictment were Government agents who had no first-hand knowledge. The Supreme Court, in an opinion rendered March 5, 1956, held the indictment valid and said:
9
"In Holt v. United States, 218 U.S. 245, 31 S.Ct. 2, 4, 54 L.Ed. 1021, this Court had to decide whether an indictment should be quashed because supported in part by incompetent evidence. Aside from the incompetent evidence `there was very little evidence against the accused.' The Court refused to hold that such an indictment should be quashed, pointing out that `The abuses of criminal practice would be enhanced if indictments could be upset on such a ground.' 218 U.S. at page 248, 31 S.Ct. at page 4. The same thing is true where as here all the evidence before the grand jury was in the nature of `hearsay.' If indictments were to be held open to challenge on the ground that there was inadequate or incompetent evidence before the grand jury, the resulting delay would be great indeed. The result of such a rule would be that before trial on the merits a defendant could always insist on a kind of preliminary trial to determine the competency and adequacy of the evidence before the grand jury. This is not required by the Fifth Amendment. An indictment returned by a legally constituted and unbiased grand jury, like an information drawn by the prosecutor, if valid on its face, is enough to call for trial of the charge on the merits. The Fifth Amendment requires nothing more.
10
"Petitioner urges that this Court should exercise its power to supervise the administration of justice in federal courts and establish a rule permitting defendants to challenge indictments on the ground that they are not supported by adequate or competent evidence. No persuasive reasons are advanced for establishing such a rule. It would run counter to the whole history of the grand jury institution, in which laymen conduct their inquiries unfettered by technical rules. Neither justice nor the concept of a fair trial requires such a change. In a trial on the merits, defendants are entitled to a strict observance of all the rules designed to bring about a fair verdict. Defendants are not entitled, however, to a rule which would result in interminable delay but add nothing to the assurance of a fair trial." Costello v. United States, 350 U.S. 359, 76 S.Ct. 406, 408, 100 L.Ed. ___.
11
The appellant also contends that because the only witness before the Grand Jury did not compute taxes there could not have been any evidence before the Grand Jury from which an indictment could have been found as to the amount of tax, if any, due by appellant. To this there are two answers; first, there was no indictment sought or returned with respect to the amount of appellant's unpaid tax; and second, the holding in Costello, supra, is contra to the position we are asked to take.
12
The Government introduced as one of its witnesses, George Roy Clough, the Mayor of Galveston at the time of the trial, who testified that the reputation of appellant for being a peaceable and law-abiding citizen during the years in question was bad. On cross-examination questions were asked and answer elicited showing or tending to show the bias of the witness against the appellant. Counsel for the appellant then proposed to show by the witness that as a candidate for Mayor he had advocated open houses of prostitution. The court sustained objections to this line of questioning. Claiming this was error, the appellant tries to come within the rule announced in Alford v. United States, 282 U.S. 687, 51 S.Ct. 218, 219, 75 L.Ed. 624. The trial court had, in the Alford case, declined to permit counsel for the defendant to show that a Government witness was, at the time of the trial, in custody of Federal authorities. The Supreme Court reversed saying that "Cross-examination of a witness is a matter of right", and that:
13
"Its permissible purposes, among others, are that the witness may be identified with his community so that independent testimony may be sought and offered of his reputation for veracity in his own neighborhood [citing cases] that the jury may interpret his testimony in the light reflected upon it by knowledge of his environment [citing cases]; and that facts may be brought out tending to discredit the witness by showing that his testimony in chief was untrue or biased [citing cases]. "* * * Prejudice ensues from a denial of the opportunity to place the witness in his proper setting and put the weight of his testimony and his credibility to a test, without which the jury cannot fairly appraise them." Alford v. United States, 282 U.S. 687, 51 S.Ct. 218, 75 L.Ed. 624.
14
The extent of the scope of cross-examination is largely within the discretion of the trial court and its ruling will not be reversed absent an abuse of discretion. A wide latitude is allowed in order to show hostility, bias, prejudice, or interest, or to discredit the knowledge or veracity of the witness. Wharton's Criminal Evidence, 12th ed. Vol. III, p. 266, et seq. § 871 et seq.; Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 470, 86 L.Ed. 680. The views of the witness as to the desirability of open houses of prostitution would not tend to show any bias of the witness against the appellant or that the witness was unworthy of belief. The rejected testimony was not relevant and was properly excluded.
15
At the beginning of the trial the court instructed the jury in these words:
16
"Gentlemen of the Jury, during the trial of this case you will be permitted to separate, but you must not discuss the facts of this case with anyone, nor permit anyone to discuss the facts in your presence or hearing. Don't read any stories in the newspapers about the case".
17
While in Austin waiting to be called as a witness in this case, Mayor Clough was interviewed by a newspaper reporter. The press report of this interview quoted the Galveston mayor as saying that he had the greatest admiration for the lowest prostitute when compared to his contempt for city officials who accept her money for permission to operate. The newspaper item gave other views of the Mayor about prostitution, gambling and liquor. This story appearing in the morning of the last day of the trial (the verdict was returned the following morning), was headlined "`I Believe: Live and Let Live.' Galveston's George R. Clough. Galveston Haven — Clough Promises Prostitutes Home." The appellant's counsel made a motion to interrogate the jury as to whether they had read the article for the stated purpose of determining whether any of the jury may have been prejudiced by the article. The Court overruled the motion and its action is specified by the appellant as an error. The published article was a rather sensational report of a rather extended interview, but the only portions which could be said to have any direct influence upon the mind of a juror were the statement that the witness Clough had the greatest admiration for the lowest prostitute when compared to his own contempt for city officials who accept money for permission to operate, and his reference to unscrupulous politicians and pay-offs as the curse of America. The rest of the article related to the Mayor's views regarding the toleration of prostitution. In urging that the District Court erred, the appellant quotes from American Jurisprudence as follows:
18
"It is improper for jurors to read newspaper accounts of the progress of a trial or relating to the case on trial. But a new trial should not be granted by a trial court because thereof unless the facts are such that it cannot determine with reasonable certainty whether the result was effected. Nor is a verdict vitiated by the finding of a newspaper in the jury room where the jury had no knowledge of its contents." 53 Am. Jur. 644, Trial § 895.
19
In the pocket supplement to the above-cited volume the editors have made an addition to the foregoing text in these words:
20
"It is within the discretion of the trial court as to whether, after impanelment, during a criminal trial, the jurors may be interrogated or polled as to whether they have read newspaper articles pertaining to the alleged crime or the trial." 1955 Cum.Supp. Vol. 53, Am.Jur. p. 40. See annotation 15 A.L.R.2d 1152.
21
This Court, considering a similar question, in a case where the Government had been permitted to impeach its own witness and the press reported upon the impeachment and the subsequent arrest of the witness for perjury, said:
22
"On the day following impeachment of the witness Diaz, appellant presented to the court a written motion for a mistrial, to which was attached the front page of an El Paso morning newspaper containing an account of the arrest of Diaz for perjury in denying receipt of the stolen property from appellant. Appellant orally informed the court that similar accounts had been broadcast over the El Paso radio stations. The court overruled this motion, and denied a request by appellant that the jurors be interrogated relative to their knowledge of the radio and newspaper reports, but instructed the jury not to read any articles or listen to radio reports in connection with the case, and further instructed them, in case such reports had already reached the jury, that they should not be considered for any purpose." Apodaca v. United States, 5 Cir., 1953, 200 F.2d 775, 777.
23
The appellant does not complain that no further instruction was given the jury, and of course would not be heard in the making of such a complaint as no instruction was requested. The refusal to permit interrogation of the jury regarding the newspaper article was not error.
24
Other questions raised are without merit and do not require discussion. The judgment before us on appeal is
25
Affirmed.
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558 F.3d 1025 (2009)
Johnnie WALKER, aka PJ's Auto Body, Plaintiff-Appellant,
v.
GEICO GENERAL INSURANCE COMPANY; Geico Casualty Company; and Geico Indemnity Co., Defendant-Appellees.
Johnnie Walker, aka PJ's Auto Body, Plaintiff-Appellant,
v.
USAA Casualty Insurance Company, Defendant-Appellee.
Nos. 07-15357, 07-15424.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted February 11, 2009.
Filed March 10, 2009.
*1026 Douglas L. Johnson, Beverly Hills, CA, for the plaintiff-appellant.
Richard A. Derevan, Costa Mesa, CA, for the defendants-appellees Geico Insurance Co., et al.
James R. McGuire, San Francisco, CA, for defendant-appellee USAA Casualty Insurance, Co.
Before MARY M. SCHROEDER, WILLIAM C. CANBY, JR. and MICHAEL DALY HAWKINS, Circuit Judges.
OPINION
SCHROEDER, Circuit Judge.
The plaintiff-appellant Johnnie Walker does business as PJ's Auto Body ("Walker"). He filed these putative class actions against two major insurance companies doing business in California: USAA Casualty Insurance Company ("USAA") and GEICO *1027 General Insurance Company, et al. Walker claimed violations of various California statutes in connection with volume discount agreements the insurers had with other automotive body repair shops ("direct repair providers"). Walker similarly challenged the inclusion of negotiated prices in price surveys that insurance companies are permitted to conduct pursuant to California law. See Cal.Code Regs. tit. 10, § 2698.91. The district court dismissed the actions for failure to state a claim on which relief could be granted, and we affirm.
All issues arise under California law. The district court's decision in Walker's suit against USAA is published at Walker v. USAA Cas. Ins. Co., 474 F.Supp.2d 1168 (E.D.Cal.2007).
Walker first contends on appeal that the district court erred in ruling that he lacked standing under California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof.Code § 17200, et seq. As amended pursuant to the 2004 voter approval of Proposition 64, the UCL in § 17204 now requires a plaintiff to establish that it has "suffered injury in fact and has lost money or property." See Californians for Disability Rights v. Mervyn's, LLC, 39 Cal.4th 223, 46 Cal.Rptr.3d 57, 138 P.3d 207, 209-10 (2006). Walker's position is that, although he cannot establish the requisite "lost money or property" for purposes of monetary relief under the UCL, he is nevertheless entitled to an injunction effectively requiring these insurers in the future to pay higher rates for their insureds' auto body repairs. His argument is supported neither by the language of the amended statute nor its purpose. See Buckland v. Threshold Enters. Ltd., 155 Cal.App.4th 798, 66 Cal.Rptr.3d 543, 557 (2007) ("Because remedies for individuals under the UCL are restricted to injunctive relief and restitution, the import of the requirement is to limit standing to individuals who suffer losses of money or property that are eligible for restitution."). The history and purpose of the law are outlined more fully in the district court's opinion, with which we agree. See Walker, 474 F.Supp.2d at 1172.
Next, Walker maintains that the district judge erred in dismissing his cause of action for "unjust enrichment," and that the district court should have analyzed his complaint as one attempting to plead a cause of action for restitution. See McBride v. Boughton, 123 Cal.App.4th 379, 20 Cal.Rptr.3d 115, 121-22 (2004). Because the defendants have no money or property that belongs to Walker, he has no stronger claim for the equitable remedy of restitution than he has for unfair competition under California law. See Buckland, 66 Cal.Rptr.3d at 557-58.
Finally, Walker contends he has adequately alleged a violation of California's Cartwright Act, Cal. Bus. & Prof. Code § 16720. He essentially claims that the defendants conspired with direct repair providers for the purpose of restraining trade by agreeing to provide the providers more business in exchange for negotiated rates. He further alleges the agrements wrongfully enabled the insurers to include these negotiated rates in surveys in order to set lower prices for auto body repairs than the prices Walker would like to charge. As the district court correctly pointed out, however, the discounts negotiated between the insurance companies and the direct repair providers reflect the proper functioning of the market to bring about lower prices to consumers. "[Walker's] desire to charge more than the market will bear does not transform [defendants'] lawful formation of service contracts into a forbidden conspiracy *1028 to destroy competition." Walker, 474 F.Supp.2d at 1175.
AFFIRMED.
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838 F.2d 1203
Landiv.U.S.
NO. 87-2276
United States Court of Appeals,Second Circuit.
DEC 01, 1987
1
Appeal From: S.D.N.Y.
2
AFFIRMED.
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T.C. Memo. 2011-292
UNITED STATES TAX COURT
TERRY L. AND CHERYL A. WRIGHT, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 30957-09. Filed December 22, 2011.
Frank O’Neal Hendrick, for petitioners.
Tammra S. Mitchell, for respondent.
MEMORANDUM OPINION
WELLS, Judge: The instant case is before the Court on
respondent’s motion for partial summary judgment pursuant to Rule
121.1 The sole issue we are asked to decide is whether an over-
1
Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended, and Rule references
are to the Tax Court Rules of Practice and Procedure.
- 2 -
the-counter foreign currency option entered into by a limited
liability company wholly owned by petitioners was a “foreign
currency contract” as defined in section 1256(g)(2).
Background
The facts set forth below are based upon examination of the
parties’ pleadings, moving papers, responses, and attachments.
Petitioners are husband and wife who resided in Tennessee at
the time of filing the petition. At all relevant times,
petitioners each owned 50 percent of Cyber Advice, LLC (Cyber
Advice), a Georgia limited liability company. Petitioner Terry
L. Wright (Mr. Wright) was president of Cyber Advice and its
member manager. During 2002 Cyber Advice was taxable as a
partnership for Federal income tax purposes.
During 2002 Cyber Advice authorized Multi National
Strategies, LLC (Multi National), to engage in various over-the-
counter foreign currency option transactions. Mr. Wright and
Multi National agreed that Beckenham Trading Company, Inc.
(Beckenham), would serve as the counterparty to the foreign
currency option transactions. During December 2002 Cyber Advice
purchased from Beckenham nine over-the-counter foreign currency
options, and it sold to Beckenham nine offsetting over-the-
counter foreign currency options. In his motion for partial
summary judgment, respondent contests only Cyber Advice’s
- 3 -
reporting of one of those transactions, so we will describe only
that transaction.
On December 20, 2002, Cyber Advice purchased a euro put
option for a premium of $36,177,750 (the euro put option). The
euro put option gave Cyber Advice the right to sell to Beckenham
on the expiration date of the option €1,237,477,902 for
$1,260,000,000. On December 23, 2002, Beckenham, Cyber Advice,
and the Foundation for Educated America, Inc. (FEA), entered into
an agreement whereby they assigned the euro put option to FEA.
At the time the euro put option was assigned to FEA, it was
valued at $33,018,574. Relying upon Greene v. United States, 79
F.3d 1348 (2d Cir. 1996), Cyber Advice took the position that the
assignment of the euro put option to FEA resulted in a
termination as defined in section 1256(c). With respect to the
transaction involving the euro put option, Cyber Advice therefore
reported a short-term capital loss of $3,159,176 on Schedule D,
Capital Gains and Losses, of its 2002 Form 1065, U.S. Return of
Partnership Income. Because Cyber Advice was taxed as a
partnership during 2002, the effects of that loss flowed through
to petitioners.
Petitioners timely filed their Federal income tax return for
2002. Respondent subsequently issued a notice of deficiency, and
petitioners timely filed their petition with this Court.
- 4 -
Discussion
Rule 121(a) allows a party to move “for a summary
adjudication in the moving party’s favor upon all or any part of
the legal issues in controversy.” Summary judgment is
appropriate “if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law.” Rule 121(b). Facts are viewed in
the light most favorable to the nonmoving party. Dahlstrom v.
Commissioner, 85 T.C. 812, 821 (1985). The moving party bears
the burden of demonstrating that no genuine issue of material
fact exists and that the moving party is entitled to judgment as
a matter of law. Sundstrand Corp. v. Commissioner, 98 T.C. 518,
520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). We conclude that
partial summary judgment is appropriate in the instant case
because the material facts are not in dispute. The parties’ only
disagreement is the proper interpretation of section 1256.
Section 1256(a)(1) generally permits certain financial
instruments to be marked to market on the last business day of
the taxable year. Any gain or loss on those contracts is
included on the taxpayer’s Federal income tax return. Sec.
1256(a)(1). Section 1256(b) defines a “section 1256 contract” to
include: (1) Any regulated futures contract; (2) any foreign
- 5 -
currency contract; (3) any nonequity option; (4) any dealer
equity option; and (5) any dealer securities futures contract.
Section 1256(b) excludes from the definition of a “section 1256
contract” any securities futures contract or option on such a
contract unless the contract or option is a dealer securities
futures contract. Section 1256(c)(1) applies the mark-to-market
rule from section 1256(a) to instances where taxpayers terminate
or transfer their obligations or rights under a regulated futures
contract.
A “regulated futures contract” means a contract with respect
to which the amount required to be deposited and the amount which
may be withdrawn depend on a system of marking to market and
which is traded on or subject to the rules of a qualified board
or exchange. Sec. 1256(g)(1). A qualified exchange means a
national securities exchange which is registered with the
Securities and Exchange Commission, a domestic board of trade
designated as a contract market by the Commodity Futures Trading
Commission, or any other exchange, board of trade, or other
market which the Secretary determines has rules adequate to carry
out the purposes of section 1256. Sec. 1256(g)(7).
Section 1256(g)(2) defines a “foreign currency contract” as
a contract:
(i) which requires delivery of, or the settlement of
which depends on the value of, a foreign currency which is a
currency in which positions are also traded through
regulated future contracts,
- 6 -
(ii) which is traded in the interbank market, and
(iii) which is entered into at arm’s length at a price
determined by reference to the price in the interbank
market.
We have discussed the language, requirements, and legislative
history of section 1256 in more detail in Summitt v.
Commissioner, 134 T.C. 248 (2010).
Because the euro put option Cyber Advice assigned to FEA was
denominated in a major currency, it is a major foreign currency
option. A major foreign currency is a “currency in which
positions are * * * traded through regulated futures contracts”.
Sec. 1256(g)(2)(A)(i). Major currencies include the U.S. dollar,
British pound, Japanese yen, Swiss franc, and European Union
euro.
Petitioners contend that a major foreign currency option is
a “foreign currency contract” subject to the mark-to-market rules
of section 1256. Petitioners further contend that, pursuant to
section 1256(c) and Greene v. United States, supra, when they
assigned their major foreign currency option to a charity, that
assignment constituted a termination of the contract requiring
them to recognize their loss.
Respondent’s motion asks us to decide whether a major
foreign currency option is a “foreign currency contract”
qualifying for section 1256 treatment. We have already decided
that issue in Summitt v. Commissioner, supra, and in Garcia v.
- 7 -
Commissioner, T.C. Memo. 2011-85. In both of those cases, we
held that a major foreign currency option is not a foreign
currency contract.
In Summitt v. Commissioner, supra at 264, we analyzed the
“delivery” or “settlement” requirement under section 1256(g)(2),
concluding:
A foreign currency option is a unilateral contract that does
not require delivery or settlement unless and until the
option is exercised by the holder. An obligation to settle
may never arise if the holder does not exercise its rights
under the option. It is clear that, as originally enacted
in 1982, * * * [the statute] applied only to forward
contracts. The statute referred to a contract which
required delivery of the foreign currency, not to a contract
in which delivery was left to the discretion of the holder.
We further held that the phrase “or the settlement of which
depends on the value of” in section 1256(g)(2)(A)(i), which was
added to the original statute pursuant to the Deficit Reduction
Act of 1984, Pub. L. 98-369, sec. 722(a)(2), 98 Stat. 972, was
added:
to allow a cash-settled forward contract to come within the
term “foreign currency contract”. Foreign currency
contracts can be physically settled or cash-settled, but
they still must require, by their terms at inception,
settlement at expiration. * * *
Summitt v. Commissioner, supra at 264-265. On the basis of our
conclusion that the plain language of the statute was
“dispositive”, we held that a foreign currency option does not
fall within the meaning of a “foreign currency contract” under
section 1256(g)(2). Id. at 265.
- 8 -
Petitioners do not attempt to factually distinguish the
instant case from Summitt and Garcia. Rather, petitioners
contend that Summitt and Garcia were wrongly decided. We
disagree. Following Summitt and Garcia, we hold that Cyber
Advice’s major foreign currency option was not a “foreign
currency contract” as defined in section 1256(g)(2).
Accordingly, we will grant respondent’s motion for partial
summary judgment.
In reaching these holdings, we have considered all the
parties’ arguments, and, to the extent not addressed herein, we
conclude that they are moot, irrelevant, or without merit.
To reflect the foregoing,
An appropriate order will be
issued.
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787 So.2d 73 (2001)
DOLLY BOLDING BAIL BONDS, Appellant,
v.
STATE of Florida, Appellee.
No. 2D00-718.
District Court of Appeal of Florida, Second District.
March 7, 2001.
Joseph R. Fritz of Joseph R. Fritz, P.A., Tampa, for Appellant.
Paul D. Johnston, Assistant County Attorney, Tampa, for Appellee.
BLUE, Judge.
Dolly Bolding Bail Bonds ("Dolly") contends the trial court erred when denying its motion to discharge the forfeiture of bond. Although we question that the legislature intended the result, we conclude we are compelled by the plain language of the statute relied on by Dolly to reverse.
The parties agree on the factual background. Dolly posted bond for a criminal defendant in Hillsborough County. When the defendant failed to appear for arraignment, the bond was estreated (forfeited), and Dolly was notified. Dolly located the defendant in a New Jersey jail or prison where he was incarcerated and had been incarcerated on the date of his arraignment. Subject to the payment of transportation costs, Dolly moved for discharge of the forfeiture under section 903.26(5), Florida Statutes (1999).
Section 903.26(5), as amended in 1999, provides in part that "[t]he court shall discharge a forfeiture within 60 days upon: ... (b) A determination that, at the time of the required appearance, the defendant was adjudicated insane and confined in an institution or hospital or was confined in a jail or prison." (Emphasis supplied.) The 1999 amendment, relied on by Dolly, was the substitution of "shall" for "may" in this section. See Ch. 99-303, § 5, at 3272, Laws of Fla. Thus, it appears mandatory for a trial court to discharge a forfeiture in this case.
Previously, this court reversed a trial court's discharge of a forfeiture on facts similar to this case. Pinellas Co. v. Robertson, 490 So.2d 1041 (Fla. 2d DCA 1986). In the proceeding below, the State convinced the trial judge that this court's decision in Pinellas was controlling, in part arguing that the failure to reference section 903.26 in the Pinellas opinion made forfeiture discharge a question of case law *74 rather than statutory interpretation. The same argument has been made to this court.[1]
We conclude we are bound by the plain wording of the statute. "[W]hen the language of the statute is clear and unambiguous and conveys a clear and definite meaning, there is no occasion for resorting to the rules of statutory interpretation and construction; the statute must be given its plain and obvious meaning." Holly v. Auld, 450 So.2d 217, 219 (Fla.1984) (quoting A.R. Douglass, Inc. v. McRainey, 102 Fla. 1141, 137 So. 157, 159 (1931)). We are concerned that the legislative history of this amendment offers some indication that the legislature did not intend the result required by the plain meaning of the statute. If the intent was not to discharge a forfeiture when the bonded defendant fails to appear because he or she has been jailed or imprisoned in another state, we suggest the legislature clarify the language in section 903.26.
We reverse the trial court's order denying discharge of the forfeitures in this case. The discharge of forfeiture, as conceded by Dolly at oral argument, is subject to Dolly paying the costs and expenses required to return the defendant to Hillsborough County. See § 903.27, Fla. Stat. (1999).
Reversed and remanded.
PATTERSON, C.J., and SALCINES, J., concur.
NOTES
[1] We find appealing the State's argument that our decisions are capable of "trumping" legislative enactments; however, we graciously concede that this is not the function of the judicial branch in the absence of constitutional questions.
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445 F.3d 940
CHICAGO UNITED INDUSTRIES, LTD., et al., Plaintiffs-Appellees,v.CITY OF CHICAGO, et al., Defendants-Appellants.
No. 05-4092.
United States Court of Appeals, Seventh Circuit.
Argued March 28, 2006.
Decided April 25, 2006.
Mark A. LaRose (argued), LaRose & Bosco, Chicago, IL, for Plaintiffs-Appellees.
Christopher S. Norborg (argued), Office of the Corporation Counsel Appeals Division, Chicago, IL, for Defendants-Appellants.
Before POSNER, EASTERBROOK, and WILLIAMS, Circuit Judges.
POSNER, Circuit Judge.
1
This appeal presents jurisdictional issues, specifically regarding temporary restraining orders and preliminary injunctions, arising from a dispute between the City of Chicago and one of its contractors, Chicago United Industries. (The other parties to the appeal can be ignored.) Believing that CUI had billed the City for goods that the contractor knew it had not delivered, the City, after months of wrangling, notified CUI that it proposed to cancel all CUI's contracts with the City and bar it ("debarment," the parties call this) from further contracts with the City. The company was given 30 days to respond to the proposal; it responded; and the City then terminated the contracts and instituted a three-year bar, whereupon CUI filed this suit in the federal district court in Chicago. The suit sought injunctive relief on the ground that the City had violated the due process clause of the Fourteenth Amendment by failing to give CUI a predeprivation hearing. CUI moved for a preliminary injunction, and (until it was granted) a temporary restraining order, to prevent the cancellation and debarment.
2
The court issued the TRO on August 31, 2005, the day after CUI had moved for it, saying that "plaintiffs have no adequate remedy at law as there is no appeal provision of the debarment at the City level, and any further administrative appeal would be an inadequate opportunity to present the constitutional matters at issue in this litigation." The court added that the plaintiffs would "suffer irreparable harm if the temporary restraining order is not granted since continuation of the debarment, even for a short period of time, will materially impair their business and their ability to do business." The TRO stated that the defendants were "temporarily restrained and enjoined from 1) enforcing the debarment of [CUI] 2) from canceling any existing contracts that CUI has with the City of Chicago and 3) from conducting any further decertification or administrative hearing regarding, related to or based upon the issue of debarment pending further action of this Court."
3
The order was to remain in force for 10 days, but at the end of that period the court renewed it for another 10 days. During the extension period, the City notified CUI that it was withdrawing its cancellation of CUI's contracts with the City and rescinding the debarment order, though without prejudice to seeking both cancellation and debarment in the future based on the same alleged fraudulent billing. On the basis of these representations, the City moved to dismiss CUI's lawsuit as moot. The district court, troubled by the "without prejudice" qualification, denied the motion. The temporary restraining order was then extended by agreement of the parties for another month, to October 31.
4
During this further extension period, CUI asked the district court to modify the order to prevent the City from circumventing it. Also on the table was the need to set a date for the hearing on CUI's motion for a preliminary injunction. Because a temporary restraining order cannot remain in force for more than 20 days without the consent of the parties, Fed. R.Civ.P. 65(b), the district court offered to hold the hearing on November 7. The City asked for an extension. The district court offered to extend the date to November 21, provided the City agreed to an extension of the restraining order for another month, to November 28. The City agreed. But before either date arrived, the court modified the TRO, essentially as requested by CUI, by adding to its previous terms that the City was also restrained "from [1] awarding any of the following contracts [ten are listed] to any company other than Chicago United if it is the lowest responsive bidder, or using its emergency purchasing power to circumvent the award to Chicago United and pay a higher price to some other company, unless and until the City provides this Court with a showing that awarding the contract to or purchasing such goods from such other company is in accordance with the status quo ante bellum ... and ... [2] imposing any restrictions on communications between Chicago United and employees of the City with the exception that Chicago United and its attorneys may not speak directly with any employees of the City regarding matters directly related to this action." A temporary restraining order is not appealable, despite its close resemblance to a preliminary injunction, which is appealable. 28 U.S.C. § 1292(a)(1). But if kept in force by the district court for more than 20 days without the consent of the parties, the order is deemed a preliminary injunction and so is appealable, since otherwise a district court could by the simple expedient of extending the TRO circumvent (to use CUI's favorite word) the right of appeal granted by section 1292(a)(1). Sampson v. Murray, 415 U.S. 61, 86-88, 94 S.Ct. 937, 39 L.Ed.2d 166 (1974); United Airlines, Inc. v. U.S. Bank N.A., 406 F.3d 918, 923 (7th Cir.2005); United States v. Board of Education of City of Chicago, 11 F.3d 668, 671-72 (7th Cir.1993); SEC v. Black, 163 F.3d 188, 194 (3d Cir.1998). CUI argues that the City consented to the final extension and therefore cannot appeal.
5
The City could have elided the issue of consent by waiting until November 29, the day after the expiration of the period of extension that the parties had agreed upon, to appeal. For at that point there would have been no doubt that the temporary restraining order was appealable. Instead the City filed its notice of appeal during the extension period. The preliminary-injunction hearing had been set for November 21, and evidently the City didn't want to participate in such a hearing. Had it done so, and a preliminary injunction been issued, the City could, again uncontroversially, have appealed. When the City foreswore the hearing, the district court extended the TRO indefinitely — thus unequivocally converting it into an appealable preliminary injunction — without the City's agreement. Again the City could have appealed uncontroversially. Furthermore, although the only notice of appeal that the City filed preceded the expiration of the TRO on November 28, Rule 4(a)(2) of the Federal Rules of Appellate Procedure provides that "a notice of appeal filed after the court announces a decision or order — but before the entry of the judgment or order — is treated as filed on the date of and after the entry," see also Otis v. Chicago, 29 F.3d 1159, 1166 (7th Cir. 1994) (en banc), and that is a plausible description of what happened here. The TRO "announced" the preliminary relief that became an appealable order by the passage of time, bringing the case within our jurisdiction after November 28, 2005, whether or not the TRO was modified.
6
In any event it is apparent that the City did not consent to the extension of the TRO that expired on that date. It consented to the extension of the existing TRO, not to the entry of a modified order the text of which it had not seen because the district judge had not yet drafted it. The judge had told the City that he would accept a modified order if the parties could agree to one, and if not he would review competing draft orders submitted by the parties and decide which one to adopt. But he entered the modified order right after CUI submitted its draft order and before the City submitted its draft order.
7
CUI ripostes that there was no "modification," that all that the new provisions that we quoted did was to particularize the original order, which had forbidden cancellation and debarment, so that in consenting to the extension of the original order the City should be taken to have consented to the additional provisions. That argument is frivolous. The additional provisions are vague, open-ended, and onerous, enjoining as they do conduct that goes far beyond cancellation and debarment. The City cannot be deemed to have consented to them.
8
In insisting that there was no modification, CUI further argues that the new provisions were intended, like the original TRO, merely to maintain the "status quo ante bellum" ("bellum" being Latin for "war"). That temporary restraining orders and preliminary injunctions are intended to "preserve the status quo" is indeed a common formula, e.g., Ellis v. Sheahan, 412 F.3d 754, 757 (7th Cir.2005), but it is much, and rightly, criticized. E.g., Praefke Auto Electric & Battery Co., Inc. v. Tecumseh Products Co., 255 F.3d 460, 464 (7th Cir.2001); O Centro Espirita Beneficiente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 1001-04 (10th Cir.2004) (en banc) (separate opinion of Seymour, J.), affirmed on other grounds, ___ U.S. ___, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006); United Food & Commercial Workers Union, Local 1099 v. Southwest Ohio Regional Transit Authority, 163 F.3d 341, 348 (6th Cir.1998), Rum Creek Coal Sales, Inc. v. Caperton, 926 F.2d 353, 359-60 (4th Cir.1991); Ortho Pharmaceutical Corp. v. Amgen, Inc., 882 F.2d 806, 813-14 (3d Cir.1989); Canal Authority of State of Fla. v. Callaway, 489 F.2d 567, 576 (5th Cir. 1974); Thomas R. Lee, "Preliminary Injunctions and the Status Quo," 58 Wash. & Lee L.Rev. 109, 157-66 (2001).
9
Preliminary relief is properly sought only to avert irreparable harm to the moving party. In re Aimster Copyright Litigation, 334 F.3d 643, 655-56 (7th Cir.2003); Jones v. InfoCure Corp., 310 F.3d 529, 534-35 (7th Cir.2002); Rum Creek Coal Sales, Inc. v. Caperton, supra, 926 F.2d at 359-60. Whether and in what sense the grant of relief would change or preserve some previous state of affairs is neither here nor there. To worry these questions is merely to fuzz up the legal standard. What was the "status quo" before the parties' dispute in this case? Was it that a contractor accused of fraud cannot be terminated and debarred without a pretermination hearing? That certainly was not what the City's rules provided. The merits of the underlying litigation are not before us; but the idea that a public contractor has a constitutional right to enjoin termination if he isn't given a hearing before his contract is terminated is sufficiently outré to make us deeply uncertain what the status quo was before CUI's suit. Maybe it was that the City could terminate and bar contractors without a hearing, for there is no absolute constitutional right to a hearing before a public contract can be cancelled. Ellis v. Sheahan, supra, 412 F.3d at 758; Mid-American Waste Systems, Inc. v. City of Gary, 49 F.3d 286, 291-92 (7th Cir.1995); Northlake Community Hospital v. United States, 654 F.2d 1234, 1241-42 (7th Cir. 1981).
10
The amount and timing of the process due when a deprivation of liberty or property (in the constitutional sense of these terms) is alleged varies with circumstances. Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). In Ellis we said that it didn't "make a lot of sense to say that when a postdeprivation hearing not only is feasible but will give the deprived individual a completely adequate remedy, ... due process requires a right to a predeprivation hearing as well. Such a rigid approach would be inconsistent with the spirit, at least, of the sliding-scale approach of Mathews, which requires comparison of the costs and benefits of alternative remedial mechanisms." 412 F.3d at 758. And earlier, in Mid-American Waste Systems, we had explained that "the adequacy of litigation as a means to determine the meaning of a contract is a premise of our legal system. Mid-American's opportunity to litigate in the courts of Indiana (where it has already filed suit) therefore is all the process `due' for ordinary claims of breach of contract.... [W]hen the issue is the meaning of a commercial contract, a prior hearing is unnecessary, and the opportunity to litigate in state court is all the process `due' to determine whether the state has kept its promise." 49 F.3d at 291 (emphasis in original).
11
Nor, so far as the debarment issue is concerned, is it at all clear that there is a property right in being eligible to receive future contracts. Ferencz v. Hairston, 119 F.3d 1244, 1247-48 (6th Cir.1997); Kim Construction Co. v. Board of Trustees of Village of Mundelein, 14 F.3d 1243, 1245-47 (7th Cir.1994); Blackburn v. City of Marshall, 42 F.3d 925, 936-37, 940 (5th Cir.1995).
12
Of course, there are cases in which the normal remedy for a breach of contract, namely damages, is inadequate, and those are cases in which the victim of an alleged breach can seek preliminary relief. But Ellis and Mid-American suggest that the right to seek such relief is not a constitutional right to a predeprivation hearing in every case of alleged breach of a public contract, though that is a form of preliminary relief. Ellis v. Sheahan, supra, 412 F.3d at 757.
13
As a detail, we note that, preoccupied with the status quo issue, the district judge did not require a persuasive showing of irreparable harm by CUI. The normal remedy for breach of contract is an award of damages, not an order of specific performance (i.e., a positive injunction); "practically speaking the duty created by a contract is just to perform or pay damages, for only if damages are inadequate relief in the particular circumstances of the case will specific performance be ordered." Zapata Hermanos Sucesores, S.A. v. Hearthside Baking Company, Inc., 313 F.3d 385, 389 (7th Cir.2002); see, e.g., Miller v. LeSea Broadcasting, Inc., 87 F.3d 224, 230 (7th Cir.1996); Lucente v. International Business Machines Corp., 310 F.3d 243, 262 (2d Cir.2002). CUI did not explain why an award of damages would not make it whole. It merely asserted that "without this injunction, the Plaintiffs' business will die and 40 contracts will be terminated. Those contracts represent the majority of all business conducted by CUI."
14
Actually the district judge was less concerned with CUI's right to a hearing, as a possible element of the status quo ante, than with the fact that until recently CUI had been selling to Chicago and receiving payment. That was the status quo in his eyes. Yet Chicago's ability to stop dealing with a contractor that it believed was cheating it was as much a part of the status quo ante as was the fact of previous purchases from the contractor.
15
We should not leave the issue of status quo without considering Judge McConnell's thoughtful recent defense of the utility of the concept. O Centro Espirita Beneficiente Uniao Do Vegetal v. Ashcroft, supra, 389 F.3d at 1012-18 (concurring opinion). "It is one thing for a court to preserve its power to grant effectual relief by preventing parties from making unilateral and irremediable changes during the course of litigation, and quite another for a court to force the parties to make significant alterations in their practices before there has been time for a trial on the merits." Id. at 1015. "Moreover, preserving the status quo enables the court to stay relatively neutral in the underlying legal dispute. The restrictions placed on the parties can be understood as requiring only that they act in a manner consistent with the existence of a good-faith dispute about the relevant legal entitlements. The moving party is not given any rights, even temporarily, that would normally be his only if the legal dispute were resolved in his favor." Id. "Fundamentally, the reluctance to disturb the status quo prior to trial on the merits is an expression of judicial humility .... [A] court bears more direct moral responsibility for harms that result from its intervention than from its nonintervention, and more direct responsibility when it intervenes to change the status quo than when it intervenes to preserve it .... Moreover, like the doctrine of stare decisis, preserving the status quo serves to protect the settled expectations of the parties. Disrupting the status quo may provide a benefit to one party, but only by depriving the other party of some right he previously enjoyed. Although the harm and the benefit may be of equivalent magnitude on paper, in reality, deprivation of a thing already possessed is felt more acutely than lack of a benefit only hoped for." Id. at 1015-16.
16
Now it may be that these considerations are better invoked on a case-by-case basis than made the basis of a rule that depends on a judge's ability to determine what state of affairs should be viewed as the status quo. But it is unnecessary in this case to come down on one side or the other of that question. For notice that Judge McConnell is arguing for making it harder to issue preliminary injunctions that change the status quo, not for making it easier to issue preliminary injunctions that preserve the status quo. The issue in this case is the propriety of preliminary relief intended to preserve an arguable status quo.
17
CUI further argues that the 20-day rule applies only when a TRO is issued without notice. This is a plausible reading of Rule 65(b), but would not make any sense, and is generally and we think correctly rejected. Nutrasweet Co. v. Vit-Mar Enterprises, Inc., 112 F.3d 689, 693-94 (3d Cir.1997), and cases cited there; Connell v. Dulien Steel Products, Inc., 240 F.2d 414, 417-18 (5th Cir.1957); see also Sampson v. Murray, supra, 415 U.S. at 85-88, 94 S.Ct. 937; Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers Local No. 70 of Alameda County, 415 U.S. 423, 442-45, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974); Rothner v. City of Chicago, 879 F.2d 1402, 1419 (7th Cir.1989). For it would enable a district court to issue a preliminary injunction of indefinite duration without any possibility of the defendant's appealing, simply by calling the injunction a temporary restraining order and being careful to notify the defendant in advance of issuing it. Moreover, a TRO issued after notice, especially if there is a hearing, is procedurally as well as functionally even more like a preliminary injunction than a TRO issued without notice and hearing, so it would be a considerable paradox if only the latter type of TRO were appealable after 20 days. CUI's suggestion that such an order should be appealable not after 20 days but after a "reasonable" time has elapsed from when it was issued is unsatisfactory; the defendant would be unable, when it filed its notice of appeal, to know whether it was filing too early or too late. The proper interpretation of the "without notice" language in Rule 65(b) is that the rule imposes additional restrictions on temporary restraining orders issued without notice, but imposes the 20-day limit on all TROs.
18
To summarize our discussion to this point, the temporary restraining order in this case was modified without party consent and so, the 20 days having expired, was appealable. United Airlines, Inc. v. U.S. Bank N.A., supra, 406 F.3d at 923; compare Geneva Assurance Syndicate, Inc. v. Medical Emergency Services Associates (MESA) S.C., 964 F.2d 599, 600 (7th Cir.1992) (per curiam). But although we thus have jurisdiction of the appeal, we must decide whether the measures taken by the City after the suit was filed have rendered the case moot. The City has reinstated all the cancelled contracts. It has rescinded the debarment. It has adopted a new rule that authorizes, although it does not explicitly require, a hearing before debarment if there are genuine issues of material fact. City of Chicago Debarment Rules, ¶ 7.05(h). (The previous rules made no provision for a hearing.) It has promised us on the record in open court that if termination or debarment proceedings are again instituted against CUI, the contractor will be entitled to a full evidentiary hearing.
19
These are significant changes since the filing of the suit. It is true that the mere cessation of the conduct sought to be enjoined does not moot a suit to enjoin the conduct, lest dismissal of the suit leave the defendant free to resume the conduct the next day. Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 189, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000); United States v. W.T. Grant Co., 345 U.S. 629, 632-33, 73 S.Ct. 894, 97 L.Ed. 1303 (1953); Kikumura v. Turner, 28 F.3d 592, 597 (7th Cir.1994). But that is in general rather than in every case. "The case may nevertheless be moot if the defendant can demonstrate that there is no reasonable expectation that the wrong will be repeated." United States v. W.T. Grant Co., supra, 345 U.S. at 633, 73 S.Ct. 894 (citation and quotation marks deleted). In light of the promise made by the City, and the City's new rule, we think it highly unlikely that, should the City reinstate its termination and debarment proceeding against CUI, it will fail to offer CUI a hearing that satisfies the requirements of due process of law.
20
Comity, moreover — the respect or politesse that one government owes another, and thus that the federal government owes state and local governments — requires us to give some credence to the solemn undertakings of local officials. Wisconsin Right to Life, Inc. v. Schober, 366 F.3d 485, 492 (7th Cir.2004); Federation of Advertising Industry Representatives, Inc. v. City of Chicago, 326 F.3d 924, 929-30 (7th Cir.2003); Ragsdale v. Turnock, 841 F.2d 1358, 1365 (7th Cir.1988); Building & Construction Dept. v. Rockwell Int'l Corp., 7 F.3d 1487, 1491-92 (10th Cir.1993); Chamber of Commerce of United States of America v. U.S. Dept. of Energy, 627 F.2d 289, 291-92 (D.C.Cir.1980). "[W]hen the defendant is not a private citizen but a government actor, there is a rebuttable presumption that the objectionable behavior will not recur" if the injunction is lifted. Troiano v. Supervisor of Elections in Palm Beach County, 382 F.3d 1276, 1283 (11th Cir.2004) (emphasis in original). Compare City of Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289, 102 S.Ct. 1070, 71 L.Ed.2d 152 (1982), where the presumption was rebutted by the city's stating that it intended to reen-act the ordinance that had been enjoined.
21
Comity argues against the casual granting of preliminary relief in a public-contract case, see Quaak v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren, 361 F.3d 11, 16 (1st Cir.2004); cf. Hoover v. Wagner, 47 F.3d 845, 850 (7th Cir.1995), and especially against the district court's assumption in this case — by the issuance of temporary restraining orders continuously extended and, through the addition of vague and encompassing provisions apt to invite contempt proceedings, continuously expanded — of control over local governmental functions in a setting of contentious relations between a city and its contractors. The era of micromanagement of government functions by the federal courts is over.
22
Nor do we think that CUI actually fears that the City won't give it a hearing. Its concerns lie elsewhere, with what it complains are "circumvention" tactics employed by the City, such as forcing the contractor to communicate regarding its reinstated contracts and bids on future contracts with only a single official, who, according to CUI, ignores the communications; or entertaining CUI's bids but then awarding the contracts to bidders who submit much higher bids. Such conduct is not charged in the complaint, however, and postdates the event on which the complaint is based, namely the issuance of the termination and disbarment orders. Assuming that the charges are accurate, they are best described as retaliation against CUI for fighting the termination and disbarment. The fight is this suit, and CUI won when the City rescinded the orders and promised a full hearing in the event it tries to reinstate them in new proceedings. Retaliation is, with a qualification noted in our recent decision in Manicki v. Zeilmann, 443 F.3d 922, 925-26 (7th Cir.2006), a separate wrong from the wrongdoing that precipitated the complaint that led to the retaliation. Merriweather v. Family Dollar Stores of Indiana, Inc., 103 F.3d 576, 583 (7th Cir.1996); Spearman v. Exxon Coal USA, Inc., 16 F.3d 722, 725-26 (7th Cir.1994); Malhotra v. Cotter & Co., 885 F.2d 1305, 1312-13 (7th Cir.1989). CUI can if it wishes bring a suit (we will not speculate on what legal theory it might be based on) to enjoin the alleged retaliation.
23
All this said, the suit is saved from complete mootness, though only barely, by CUI's claim to have lost $500,000 in profits as a result of the termination and debarment proceedings. It is true that the "claim" is made only in its brief and oral argument in this court, and not in the complaint. But it is at least plausible that CUI lost profits, even though the contracts were terminated, and the debarment order effective, for only one week, until the first of the TROs was entered. The company argues that payments under the contracts were interrupted and its ability to obtain new business from the City disrupted by the fraud accusation that underlay the City's efforts at termination and debarment. Rule 54(c) of the civil rules entitles a prevailing plaintiff to the relief proper to his claim even if he did not request that relief, Laskowski v. Spellings, 443 F.3d 930, 935-36 (7th Cir.2006), because the circumstances bearing on the feasibility of particular forms of relief often change between the initiation of the suit and the rendition of the final judgment.
24
There is, it is true, an exception for explicit waivers, and, more to the point, for cases in which a damages claim is added at the last minute in a desperate effort to stave off the dismissal of the case as moot. Arizonans for Official English v. Arizona, 520 U.S. 43, 71, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997), was such a case; "it should have been clear to the Court of Appeals that a claim for nominal damages, extracted late in the day from [the plaintiff's] general prayer for relief and asserted solely to avoid otherwise certain mootness, bore close inspection." See also Seven Words LLC v. Network Solutions, 260 F.3d 1089, 1097-98 (9th Cir. 2001); Boucher v. Syracuse University, 164 F.3d 113, 117-18 (2d Cir.1999). The City argues with considerable force that CUI deliberately withheld its damages claim lest such a claim weaken its case for preliminary relief by indicating that it had incurred no irreparable harm, which is a precondition to such relief. On that ground, Harris v. City of Houston, 151 F.3d 186, 191 (5th Cir.1998), and Thomas R.W., By and Through Pamela R. v. Massachusetts Dept. of Education, 130 F.3d 477, 480-81 (1st Cir.1997), hold that a plaintiff cannot forestall a dismissal for mootness by arguing for the first time on appeal that he can prove damages.
25
This case is different because the litigation had barely begun before it came to us; had there been no appeal, CUI would doubtless have asked for damages before the litigation had proceeded far. If withholding was a tactic, moreover, it has failed, since we are vacating the injunction, and should circumstances change and CUI again seek preliminary injunctive relief in the district court, the City will be able to argue against a finding of irreparable harm by pointing to CUI's claim for damages.
26
So while the request for injunctive relief is moot, the case as a whole is not. The temporary restraining order is vacated; and we direct that 7th Cir. R. 36 shall govern the further proceedings in this case in the district court.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 11-4071
___________
XIU YING LI,
Petitioner
v.
ATTORNEY GENERAL OF THE UNITED STATES,
Respondent
____________________________________
On Petition for Review of an Order of the
Board of Immigration Appeals
(Agency No. A077-297-720)
Immigration Judge: Honorable Eugene Pugliese
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
November 1, 2012
Before: SMITH, CHAGARES and WEIS, Circuit Judges
(Opinion filed: November 6, 2012)
___________
OPINION
___________
PER CURIAM.
Xiu Ying Li petitions for review of the Board of Immigration Appeals’ (“BIA” or
“Board”) order denying her second motion to reopen. We will deny the petition for
review.
1
In 2000, Li, a native and citizen of China, entered the United States without valid
documentation. She was placed in removal proceedings and applied for asylum,
withholding of removal, and protection under the Convention Against Torture, alleging
that she had been persecuted under China’s population control policy. Following a merits
hearing, an Immigration Judge (“IJ”) determined that Li had not testified credibly and
thus denied her application for asylum and related relief. Li appealed the ruling and, in a
November 2002 decision, the BIA affirmed. Li did not petition this Court for review of
that determination.
In November 2004, Li filed a motion to reopen her removal proceedings, arguing
that there had been a change in country conditions in China as a result of the
government’s enactment of new and more restrictive birth control policies. 1 The BIA
determined that Li’s motion was untimely filed and that she was unable to demonstrate a
change in conditions regarding the family planning policy so as to avoid application of
the time restriction. The Board further noted that the births of her three children in the
United States did not amount to a change in circumstances in China, only a change in her
1
Under the applicable regulations, a motion to reopen must be filed no later than 90 days
after the date on which the administrative decision was rendered. 8 C.F.R.
§ 1003.2(c)(2). An exception exists, however, for motions to reopen “based on changed
country conditions arising in the country of nationality . . ., if such evidence is material
and was not available and could not have been discovered or presented at the previous
hearing.” 8 C.F.R. § 1003.2(c)(3)(ii).
2
personal circumstances. 2 The BIA later denied Li’s motion for reconsideration. Li did
not petition this Court for review of either ruling.
In October 2009, Li filed a second motion to reopen with the BIA, alleging that
she will be sterilized upon her return to China due to changed country conditions
regarding the one-child family planning policy, and that she will be persecuted because of
her new affiliation with the Jehovah’s Witnesses. Li argued in her motion that, since her
last hearing in 2000, conditions in China have worsened because the government more
stringently enforces family planning laws and laws prohibiting the free exercise of
religion for Christian churches that are not sanctioned by the government. 3
The BIA denied the motion, concluding that the “evidence fail[ed] to establish a
change in circumstances or country conditions ‘arising in the country of nationality’ so as
to create an exception to the time and number limitation for filing a late motion to reopen
to apply for asylum.” (A.R. at 31.) Li petitioned for review. This Court granted Li’s
petition and remanded the case to the BIA after determining that it had failed to
adequately explain its reasoning for rejecting the evidence that Li submitted in support of
her motion to reopen. See Li v. Att’y Gen, 414 F. App’x 482 (3d Cir. 2011).
2
Li’s first child was born in China; she has a total of four children.
3
In support of her motion, Li submitted, inter alia, the 2008 United States Department
of State Country Report for China; the 2008 United States Department of State
International Religious Freedom Report for China; various news articles discussing
China’s policies on population control and Christianity; and two notices issued by the
Village Committee of Houer Village, Fujian Province, indicating that she will be
sterilized upon her return to China because she has given birth to four children.
3
On remand, the Board again denied Li’s second motion to reopen as time and
number barred, concluding that the evidence that Li submitted with her motion failed to
demonstrate any material or substantial change in China. Specifically, the Board
concluded that there had not been a significant change in China’s family-planning policy
since Li’s last administrative hearing. In this regard, the Board gave the greatest weight
to the 2008 State Department Reports. The Board also determined that there had not
been a change in country conditions regarding the treatment of Jehovah’s Witnesses. Li
timely petitioned for review. 4
We have jurisdiction under 8 U.S.C. § 1252(a)(1), and review the Board’s denial
of Li’s motion for abuse of discretion. See Sevoian v. Ashcroft, 290 F.3d 166, 174 (3d
Cir. 2002). Motions to reopen are plainly “disfavored” because “[t]here is a strong public
interest in bringing litigation to a close as promptly as is consistent with the interest in
giving the adversaries a fair opportunity to develop and present their respective cases.”
INS v. Abudu, 485 U.S. 94, 107 (1988). The BIA’s decision is thus entitled to broad
deference, Ezeagwuna v. Ashcroft, 325 F.3d 396, 409 (3d Cir. 2003), and it “will not be
disturbed unless [it is] found to be arbitrary, irrational, or contrary to law.” Guo v.
Ashcroft, 386 F.3d 556, 562 (3d Cir. 2004) (quotation marks omitted).
4
The BIA also rejected Li’s argument that she is eligible for relief because she left
China illegally and applied for asylum in the United States, and it declined to exercise its
authority to reopen the proceedings sua sponte. In her opening brief, Li does not
articulate any challenge to either determination. As a result, review of those issues has
been waived. See Bradley v. Att’y Gen., 603 F.3d 235, 243 n.8 (3d Cir. 2010).
4
As an initial matter, contrary to Li’s argument, we conclude that, on remand, the
BIA thoroughly considered the evidence and corrected the deficiency in its analysis that
we identified in our earlier decision in this case. Moreover, we discern no error in the
BIA’s evaluation of Li’s evidence.
As mentioned, the Board first held that the evidence Li submitted with her motion
did not provide a sufficient basis for concluding that China’s population control
enforcement policies have materially changed since Li’s merits hearing in 2000. The
BIA did not abuse its discretion in so holding. For example, Li submitted a 2009 article
entitled “China to continue family-planning policy,” which states that the Chinese Vice
Premier had stressed “the importance of continuing the family-planning policy” which
was introduced in the late 1970’s. (A.R. at 116.) The 2008 State Department Country
Report explains that China has prohibited “the use of physical coercion to compel
persons to submit to abortion or sterilization.” (Id. at 218.) Rather, China mostly relies
on education, propaganda, economic incentives, and the imposition of social
compensation fees to enforce its policy. (Id. at 198.)
Li argues that greater attention should have been given to her Village Committee
Notices. The BIA did not ignore that evidence. Rather, the Board determined that the
Notices were not sufficiently persuasive in light of other, more reliable evidence. See
Zubeda v. Ashcroft, 333 F.3d 463, 478 (3d Cir. 2003) (noting that State Department
Reports are “the most appropriate and perhaps the best resource for information on
political situations in foreign nations”) (quotation marks omitted). Further, in addition to
5
the fact that neither Notice was signed by a member of the Village Committee, both
Notices failed to indicate what will happen to Li if she does not report to the authorities,
or the amount of fine that will be imposed. (A.R. at 109, 112.) We discern no error in
the BIA’s decision to afford lesser weight to those documents. See generally In re H-L-
H- & Z-Y-Z-, 25 I. & N. Dec. 209, 214 (BIA 2010) (giving less weight to documents
which were obtained for the purpose of the hearing, were unsigned, or which even failed
to identify the authors).
Additionally, our decision in Chen v. Attorney General, 676 F.3d 112 (3d Cir.
2011), although arising in a different procedural posture, lends further support to the
BIA’s decision. In Chen, the petitioners, a married couple from Fujian Province, sought
relief because they had two U.S.-born children, and they claimed to fear forced
sterilization and economic penalties should they return to China. 676 F.3d at 114. In
affirming the BIA’s decision and rejecting the petitioners’ claims, we determined that In
re H-L-H- was “persuasive[],” Chen, 676 F.3d at 114, in its conclusion that “‘physical
coercion to achieve compliance with family planning goals is uncommon and
unsanctioned by China’s national laws and that the overall policy is much more heavily
reliant on incentives and economic penalties,’” and that those economic penalties were
not sufficiently severe to constitute persecution, id. at 115 (quoting In re H-L-H-, 25 I. &
N. Dec. at 218.). That description of recent family-planning policies is consistent with
the description of the policies in the 1999 State Department Report, and accordingly, it
6
was reasonable for the BIA to conclude that Li failed to show that the conditions in China
have materially changed since her initial 2000 hearing.
We also agree that the record evidence does not demonstrate a change in China’s
treatment of Jehovah’s Witnesses. 5 The 2008 International Religious Freedom Report
states that many Christian groups no longer operate in secrecy and that the government’s
repression is inconsistent and sporadic. (A.R. at 236-37.) Further, although the
government seeks to repress groups it has designated as “cults,” which includes several
Christian groups and Falun Gong, the Jehovah’s Witness church is not among those
listed. (Id. at 238.) Li claims that Jehovah’s Witnesses are treated similarly to
practitioners of Falun Gong, but there is no record evidence supporting her contention.
The Board also properly afforded little weight to a letter Li submitted from a
practicing Jehovah’s Witness living in the United States who claims that Li will go to jail
in China for studying the Bible with Jehovah’s Witnesses. (Id. at 143-46.) There is no
evidence to demonstrate that the author has any relevant knowledge regarding country
conditions in China. In sum, Li did not provide any evidence which would undermine
the BIA’s conclusion that there has not been a significant change in the treatment of
Jehovah’s Witnesses since the date of her last hearing.
5
We need not address whether Li’s decision to embrace this religion demonstrates a
change in her personal circumstances, rather than country conditions, because even if Li
was a Jehovah’s Witness at her initial hearing, she did not present material evidence of
changed country conditions so as to warrant relief under 8 C.F.R. § 1003.2(c)(3)(ii).
7
Because Li did not present material evidence of changed country conditions, the
BIA did not abuse its discretion in denying her motion to reopen.
Accordingly, we will deny the petition for review.
8
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431 F.2d 391
CONTINENTAL OIL COMPANY, Atlantic Richfield Company, Getty Oil Company, and Cities Service Oil Company, Libelants-Appellants, Cross-Appellees,v.SS ELECTRA, Her Engines, Tackle, Apparel, etc., and RIO PALMEA, CIA, NAV., S. A. Her Engines, Respondents-Appellees, Cross-Appellants.
No. 28751.
United States Court of Appeals, Fifth Circuit.
August 31, 1970.
Joseph Newton, Sweeney J. Doehring, Fulbright, Crooker, Freeman, Bates & Jaworski, Houston, Tex., for appellants.
George W. Renaudin, Royston, Rayzor & Cook, Houston, Tex., for appellees.
Before GODBOLD, SIMPSON and MORGAN, Circuit Judges.
GODBOLD, Circuit Judge:
1
Appellants are four oil companies which owned an offshore drilling platform in the Gulf of Mexico, with which, on April 8, 1964, the appellee S.S. Electra collided. Several wells had been drilled from the platform, two of which were in production. There was no damage to the wells and no loss of oil, but the platform was so badly wrecked that production was halted.
2
Appellants filed this libel in rem. An agreement was reached under which appellees agreed to pay 90% of the provable damages resulting from the collision. The agreement was carried out as to physical damage to the platform, but the parties were unable to agree on damages for suspension of production from the wells. By agreement that issue was submitted to a commissioner.
3
Reconstruction of the platform had been delayed, and a hurricane had demolished it in October, 1964. The parties stipulated that if reconstruction had been started without delay, 130 days would have been required to get the two wells in production again. They agreed that the net value of the production — i. e., the net income realized from oil produced — which appellants would have received during the 130 days would have been $60,000.
4
After the platform was destroyed by the hurricane, the two wells which had been in production prior to the collision were abandoned. Part of the reservoirs on which the two wells had drawn extended under lands leased to third parties. Other reservoirs of oil which could have been tapped by drilling from the platform also extended under lands leased to third parties. No third parties have drilled offset wells into these reservoirs, but in 1966 appellants drilled into both and currently are obtaining oil from them through wells located at a new offshore station in the same general area as the demolished platform.
5
The commissioner concluded that appellants' damages for loss of production consisted of interest on the $60,000 net production figure for 130 days. The District Court approved the amount so determined. The oil companies contend that the wrong standard was employed in measuring their damages, and urge that they were entitled to an award based on $60,000, the full value of the net production, i. e., 90% of $60,000. By cross appeal the shipowner urges that the District Court erred in taxing against it the commissioner's fee, expenses and court costs.
6
The commissioner and the District Court erred. They focused on the fact that the oil companies had not shown that they had lost any oil as a result of the collision. As they viewed the matter, since the oil was still intact and available the plaintiffs ultimately could bring it to the surface and realize profit therefrom just as they would have during the 130 day period had they been operating — or at least they had not proved with reasonable certainty that this would not occur, so that their loss was purely theoretical. In this court the shipowner continues to focus on the fact that plaintiffs have not lost oil as a capital asset and strenuously insists that to allow $60,000 as damages is to allow a double recovery.
7
All of this wholly misses the mark. The oil companies do not claim for lost oil or damage to oil as an asset. Their suit is for damages suffered as a consequence of the collision of the ship with the platform. Profit on oil production is simply one means of measuring the damage suffered. The plaintiffs have lost the use of their capital investment in lease, platform and producing wells for 130 days during which that investment was tied up without return. The fact that the same amount of profit can be made at a later time with the same investment of capital by removing from the ground a like quantity of oil at the same site does not alter the fact that the plaintiffs are out of pocket a return on 130 days use of their investment. Presumably the oil companies ultimately will produce from the reservoir all the oil that is economic to produce, but, as the District Court pointed out, it will require 130 days longer to do so. The plaintiffs must stay on the site 130 days longer, with investment in place, than necessary but for the ship's negligence.
8
This is no theoretical, shadowy concept of loss. It is squarely within the basic damage doctrine for marine collision of restitutio in integrum, as applied in many comparable situations. Thus, for the vessel laid up for repairs:
9
In order to make full compensation and indemnity for what has been lost by the collision, restitutio in integrum, the owners of the injured vessel are entitled to recover for loss of her use, while laid up for repairs. When there is a market price for such use, that price is the test of the sum to be recovered. When there is no market price, evidence of the profits that she would have earned if not disabled is competent; but from the gross freight must be deducted so much as would in ordinary cases be disbursed on account of her expenses in earning it; in no event can more than the net profits be recovered by way of damages; and the burden is upon the libellant to prove the extent of the damages actually sustained by him.
10
The Potomac, 105 U.S. 630, 631, 632, 26 L.Ed. 1194 (1882). Accord, The Conqueror, 166 U.S. 110, 17 S.Ct. 510, 4 L.Ed. 937 (1897); The Pocahontas, 109 F.2d 929, 931 (2d Cir.), cert. denied, sub nom. Eagle Transport Company v. United States, 310 U.S. 641, 60 S.Ct. 1088, 84 L.Ed. 1409 (1940); Agwilines, Inc. v. Eagle Oil & Shipping Co., 153 F.2d 869 (2d Cir.), cert. denied, sub nom. Agwilines, Inc. v. Motorship San Veronico, 328 U.S. 835, 66 S.Ct. 980, 90 L.Ed. 1611 (1946). As to vessel under charter, City of Miami v. Western Shipping & Trading Co., 232 F.2d 847 (5th Cir. 1956); The El Monte, 252 F. 59 (5th Cir.), cert. denied, sub nom. Southern Pacific Co. v. Stag Line, 248 U.S. 573, 39 S.Ct. 11, 63 L.Ed. 427 (1918).
11
Brooklyn Eastern District Terminal v. United States, 287 U.S. 170, 53 S.Ct. 103, 77 L.Ed. 240 (1932) points out that, depending upon the circumstances, the damages in some instances may be the value of hire of another vessel, in others the value of hire of the disabled vessel, in others the return upon capital, and, of course, in some cases no damage at all.1
12
The appellee shipowner derives no aid from the fleet cases on which it relies. If the shipowner is carrying his own cargo and has another vessel available as a temporary replacement for the one under repair he has a duty to use it to mitigate damages and, having earned the profit with the otherwise idle replacement, cannot recover for detention of the vessel being repaired.2 There is no fleet of drilling platforms, no evidence that the plaintiffs had any other platform or could have set a platform in place and obtained any of the 130 days' production. The oil companies are like a single shipowner with his ship laid up. It would be no answer to his claim to assert that he has lost nothing because the same cargo is still on the dock when his ship comes out of repair and that he can move it then — if other cargoes are also then available.
13
Our conclusion is consistent with that of the United States District Court for the Southern District of Texas which in a like case awarded as damages the net production. Continental Oil Company v. M/S Glenville, A.D. No. 2092, Mar. 31, 1967.3
14
The appellee urges the inapplicability of shipowner cases because plaintiffs are not shipowners and the platform not a vessel. But the result is no different for a landbased accident. E. g., Cranston Print Works Co. v. Public Service Co. of North Carolina, 291 F.2d 638 (4th Cir. 1961) (natural gas explosion; held, lost profits from damage to boiler house and equipment recoverable); Brooks Transp. Co. v. McCutcheon, 80 U.S.App.D.C. 406, 154 F.2d 841 (1946) (motor vehicle collision; held, loss of drayage resulting from collision recoverable); Restatement, Torts §§ 928, 931 (1939).
15
Our decision on the appeal makes it unnecessary to discuss the contentions made on the cross-appeal.
16
Appellants are entitled to a judgment for 90% of $60,000, with interest thereon from August 9, 1967, the parties having agreed that interest on any sum awarded by the commissioner would commence on that date.
17
As to the appeal, reversed and remanded with directions. As to the cross-appeal, affirmed.
Notes:
1
InBrooklyn Terminal, the plaintiff, with one tug disabled by defendant's fault, used its other two tugs to perform the work previously done by three. Plaintiff presented no evidence of extra expense incurred or increased wear and tear on the two tugs. Thus, having performed the work of the idle tug and presumably earned such profit as there was in the work, and having proved no increase in cost, it could not recover for detention of the tug under repair. This has no application to the oil companies in this case whose work was closed down.
2
Brooklyn Terminal,supra; City of Peking, 15 A.C. 438, 6 Asp. 572 (1890). Also see the full discussion in Sinclair Refining Co. v. America Sun, 188 F.2d 64 (2d Cir. 1951), and Bue, Admiralty Law in the Fifth Circuit, 5 Hous.L.Rev. 767 at 919-920.
3
We need not consider whether lost profit or a fair return on investment is a better measure. See the discussion inSinclair Refining, supra. The only evidence before us is of lost profit. The shipowner has not asserted that the profit is excessive but has stood on the erroneous theory that profits are not recoverable at all, only interest on profits.
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United States Court of Appeals
For the First Circuit
No. 14-1929
UNITED STATES OF AMERICA,
Appellee,
v.
HAINZE ELÍAS DÍAZ-ARROYO,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Francisco A. Besosa, U.S. District Judge]
Before
Torruella, Selya and Dyk,*
Circuit Judges.
Steven A. Feldman and Feldman and Feldman on brief for
appellant.
Rosa Emilia Rodríguez-Vélez, United States Attorney, Nelson
Pérez-Sosa, Assistant United States Attorney, Chief, Appellate
Division, and Carmen M. Márquez-Marín, Assistant United States
Attorney, on brief for appellee.
August 12, 2015
* Of the Federal Circuit, sitting by designation.
SELYA, Circuit Judge. In this sentencing appeal,
defendant-appellant Hainze Elías Díaz-Arroyo complains that his
48-month sentence is substantively unreasonable and that a
condition of supervised release fails to make clear that he is not
prohibited from using the internet. After careful consideration,
we affirm the sentence itself but remand for the limited purpose
of correcting the judgment to clarify the challenged supervised
release condition.
I.
BACKGROUND
As this appeal follows a guilty plea, we draw the facts
from the plea agreement, the change-of-plea colloquy, the
presentence investigation report (PSI Report), and the transcript
of the disposition hearing. See United States v. Rivera-González,
776 F.3d 45, 47 (1st Cir. 2015); United States v. Dávila-González,
595 F.3d 42, 45 (1st Cir. 2010). In January of 2014, a Puerto
Rico police officer spied the defendant pulling a firearm from his
waistband in the vicinity of a public housing project. The
defendant attempted to flee on foot (losing a black wig in the
process) but was eventually apprehended. He admitted that he had
been wearing the wig to disguise himself as he knew there was an
outstanding arrest warrant against him on homicide charges. During
a search incident to his arrest, the police found a container of
marijuana, a stolen 40-caliber Glock pistol loaded with 13 rounds
- 2 -
of ammunition, and a magazine loaded with 12 rounds of 40-caliber
ammunition.
In due course, a federal grand jury sitting in the
District of Puerto Rico returned an indictment charging the
defendant with being a felon in possession of a firearm. See 18
U.S.C. §§ 922(g)(1), 924(a)(2). This charge carries a maximum
prison sentence of 10 years. See id. § 924(a)(2).
After some preliminary skirmishing (not relevant here),
the defendant entered into a non-binding plea agreement with the
government (the Agreement). See Fed. R. Crim. P. 11(c)(1)(B). In
the Agreement, the defendant agreed to request a sentence no lower
than the bottom of the applicable guideline sentencing range (GSR)
while the government agreed to recommend a sentence no higher than
the top of the range. Withal, the Agreement reached no consensus
about the defendant's criminal history category (CHC), although it
did forecast a possible GSR based on a CHC of II.
After the district court accepted the defendant's guilty
plea, it directed the preparation of the PSI Report. The PSI
Report adumbrated a series of guideline calculations. Starting
with a base offense level of 14, see USSG §2K2.1(a)(6), it
suggested a two-level upward adjustment because the firearm was
stolen, see id. §2K2.1(b)(4)(A), and a three-level downward
adjustment for timely acceptance of responsibility, see id.
§3E1.1(a), (b), yielding a total offense level of 13. The PSI
- 3 -
Report then proposed a CHC of II because the defendant had
previously been convicted of three counts of possession of a
firearm without a license, and he was on probation for those crimes
when he committed the instant offense. Cumulatively, these
computations produced a recommended GSR of 15 to 21 months.
The PSI Report went on to note that the defendant's
criminal past included two separate incidents for which he was not
convicted (and, thus, for which no criminal history points were
assessed). In 2012, he was arrested for possessing false documents
and pointing a firearm at a law enforcement officer. These charges
were eventually dismissed due to a reported lack of probable cause.
In 2014, the defendant was again arrested; this time he was charged
with causing the death of two men and attempting to murder a third
with a firearm. These charges were also dismissed, but the PSI
Report was silent as to the reason for the dismissal.
At the disposition hearing, the district court — without
objection — adopted the guideline calculations limned in the PSI
Report. Defense counsel requested a bottom-of-the-range sentence
(15 months). The prosecutor recommended a top-of-the-range
sentence (21 months). As part of her statement to the court, the
prosecutor explained that the 2014 murder and attempted murder
charges were dropped only after the sole surviving witness to the
incident (a minor who was able positively to identify the defendant
as the shooter) was threatened and fled the jurisdiction. Defense
- 4 -
counsel did not strongly deny the prosecutor's account, stating
that the defendant maintained his innocence with respect to those
charges, and adding, ambiguously, that the defendant had "no
relation to that." Defense counsel went on to say that she
understood that the charges had been dropped because the witness
had been in witness protection and did not appear to testify.
The district court noted that it had considered all of
the factors enumerated in 18 U.S.C. § 3553(a). It specifically
acknowledged the Agreement, the defendant's criminal history
(including the dismissed charges), his age, his family and
employment status, his history of drug abuse, and the circumstances
surrounding the offense of conviction. The court then mentioned
the high incidence of violent crime in Puerto Rico1 and decried
the fact that "[t]oo many young men on this island are carrying
dangerous weapons without the proper training to use them and
without the finances to purchase them." Stressing, inter alia,
the defendant's prior weapons convictions and the dropped
murder/attempted murder charges, the court concluded that an
upwardly variant sentence was necessary to "reflect[] the
seriousness of the offense, promote[] respect for the law, [and]
protect[] the public from further crimes by [the defendant]." The
court then sentenced the defendant to serve 48 months in prison
1Among other things, the court observed that the crime rate
in Puerto Rico "is about quadruple the national rate."
- 5 -
(consecutive to any sentence imposed in the then-pending
Commonwealth probation revocation proceedings), followed by a
three-year term of supervised release. No objections were made
either to the sentence or to the supervised release conditions.
In setting forth the conditions of supervised release,
the court required the defendant, inter alia, to comply with
electronic monitoring strictures. In so doing, the court stated:
"[i]n addition to any telephone or cell phone that he may have,
[the defendant] shall maintain a telephone at his residence without
a modem, an answering machine or a cordless feature during the
term of electronic monitoring."
This timely appeal ensued.
II.
ANALYSIS
On appeal, the defendant raises three issues. We discuss
those issues sequentially.
A.
To begin, the defendant argues that the waiver-of-appeal
clause contained in the Agreement does not pretermit his appeal.
That argument, however, sets up a straw man.
In so many words, the waiver-of-appeal clause hinges the
defendant's waiver on the subsequent imposition of a sentence "in
accordance with the terms and conditions set forth in the Sentence
Recommendation provisions of [the Agreement]." Because the
- 6 -
sentence imposed by the district court was beyond the bounds of
the Agreement's Sentence Recommendation provisions, the waiver-
of-appeal clause does not apply. See, e.g., Rivera-González, 776
F.3d at 49. And the government, to its credit, has conceded the
point all along.
B.
The centerpiece of this appeal is the defendant's
contention that the sentence imposed by the district court is
substantively unreasonable. Since the defendant did not object
below, the standard of review is open to question. We have
recently explained that most courts have held that an objection in
the district court is not necessary to preserve a claim that the
length of a sentence is substantively unreasonable. See United
States v. Vargas-García, ___ F.3d ___, ___ (1st Cir. 2015) [No.
14-1335, slip op. at 8]; United States v. Ruiz-Huertas, ___ F.3d
___, ___ (1st Cir. 2015) [No. 14-1038, slip op. at 10].
Nevertheless, "a pair of First Circuit cases have expressed a
contrary view (albeit without any analysis of the issue)." Vargas-
García, ___ F.3d at ___ [slip op. at 8] (citing Ruiz-Huertas, ___
F.3d at ___ n.4 [slip op. at 10 n.4]). Here, though, we can follow
the same path that we took in both Vargas-García and Ruiz-Huertas
and leave the issue for another day. Thus, we assume, favorably
to the defendant, that the abuse of discretion rubric applies.
- 7 -
In appraising the substantive reasonableness of a
sentence, we first ask whether the district court has offered a
plausible rationale for the sentence and then ask whether the
sentence embodies a defensible result. See United States v.
Flores-Machicote, 706 F.3d 16, 25 (1st Cir. 2013); United States
v. Martin, 520 F.3d 87, 96 (1st Cir. 2008). Variant sentences are
subject to this two-part inquiry. See United States v. Santiago-
Rivera, 744 F.3d 229, 234 (1st Cir. 2014). Throughout, we remain
mindful that where (as here) a properly calculated GSR is in place,
"sentencing becomes a judgment call, and a variant sentence may be
constructed based on a complex of factors whose interplay and
precise weight cannot even be precisely described." Martin, 520
F.3d at 92 (internal quotation marks omitted).
In the case at hand, the defendant contests both parts
of the two-part inquiry. He begins by denigrating the district
court's rationale because (in his view) the court premised its
sentencing determination on two factors "beyond his control,"
namely, the crime rate in Puerto Rico and the charges against him
that were later dismissed. Although the defendant concedes that
each of these factors is a permissible consideration at sentencing,
he submits that the court below erred in relying on them in
combination.
We discern no abuse of the sentencing court's broad
discretion. As we repeatedly have explained, "[d]eterrence is
- 8 -
widely recognized as an important factor in the sentencing
calculus." Flores-Machicote, 706 F.3d at 23; accord United States
v. Romero-Galindez, 782 F.3d 63, 73 (1st Cir. 2015). To this end,
a sentencing court may consider the pervasiveness of similar crimes
in the community in formulating its sentence. See, e.g., United
States v. Narváez-Soto, 773 F.3d 282, 286 (1st Cir. 2014); United
States v. Politano, 522 F.3d 69, 74 (1st Cir. 2008). So, too, the
fact that a defendant's CHC substantially underrepresents the
gravity of his prior criminal history because of previously
dismissed charges may shed light upon the need for specific
deterrence. See, e.g., Flores-Machicote, 706 F.3d at 21
(explaining that "[a] record of past arrests or dismissed charges
may indicate a pattern of unlawful behavior even in the absence of
any convictions" (internal quotation marks omitted)); United
States v. Lozada-Aponte, 689 F.3d 791, 792 (1st Cir. 2012)
(similar); United States v. Gallardo-Ortiz, 666 F.3d 808, 814-15
(1st Cir. 2012) (similar); cf. USSG §4A1.3(a)(2)(E) (authorizing
upward departures based on reliable information that defendant
committed "[p]rior similar adult criminal conduct not resulting in
a criminal conviction"). We know of no reason why these two
sentencing considerations, each of which is proper, cannot be used
synergistically in fashioning a sentencing rationale.
We add, moreover, that the district court's sentencing
rationale was altogether plausible. The court gave several reasons
- 9 -
for imposing a sentence above the GSR, including the need for
deterrence in view of the defendant's demonstrated proclivity for
committing firearms offenses (as shown in part by his many prior
weapons-related brushes with the law).2 The court then voiced its
concern that no sentence within the GSR would appropriately
"address the issues of deterrence and punishment." Given the
amalgam of convicted and dismissed firearms-related charges
reflected in the record — which show "a pattern of unlawful
behavior even in the absence of [corresponding] convictions,"
Lozada-Aponte, 689 F.3d at 792 (quoting United States v. Zapete-
Garcia, 447 F.3d 57, 61 (1st Cir. 2006)) — we find no lack of
plausibility in the district court's sentencing rationale.3
2 In this regard, the court emphasized the need for the
sentence imposed both to deter the defendant and to serve the
purpose of general deterrence in the population at large.
3 We note that the sentencing court was entitled to take into
account the prosecutor's representations at the disposition
hearing regarding the circumstances surrounding the 2014
murder/attempted murder charges to shed light on the reason for
the dismissal of those charges. The prosecutor stated that the
victim of the attempted murder (who was the sole eyewitness) fled
the jurisdiction because he "was threatened." Defense counsel did
not directly challenge the prosecutor's account of the
circumstances surrounding the dismissal of the charges. At
sentencing, a court is not bound by the rules of evidence but,
rather, may take into account any information that has sufficient
indicia of reliability. See United States v. Tardiff, 969 F.2d
1283, 1287 (1st Cir. 1992); USSG §6A1.3(a). For sentencing
purposes, a prosecutor's statement, not adequately challenged by
defense counsel who has a full opportunity to respond, may
constitute reliable information.
- 10 -
Nor do we find that the sentence embodies an indefensible
result. We recognize, of course, that the district court's duty
is to impose a sentence that is "sufficient, but not greater than
necessary" to accomplish the manifold goals of sentencing. 18
U.S.C. § 3553(a). Still, "[i]n most cases, there is not a single
appropriate sentence but, rather, a universe of reasonable
sentences." Rivera-González, 776 F.3d at 52. We conclude that
the upwardly variant sentence here falls near the outer margin of,
but within, that universe.
To be sure, the sentence is severe — but not unreasonably
so. The offense of conviction was serious; it involved a stolen
firearm; and it was aggravated both by the defendant's possession
of an additional (loaded) magazine and by his flight. Moreover,
the defendant committed the offense while on probation for an
earlier weapons charge. When the facts of this case are viewed
against the backdrop of the defendant's checkered criminal history
and the community's burgeoning problems with violent crime linked
to the illegal possession and use of firearms, we cannot say that
the sentence was outside the wide universe of permissible
sentences.
C.
The district court imposed, inter alia, a special
condition of supervised release designed to ensure the efficacy of
electronic monitoring: it required that the defendant maintain a
- 11 -
"clean" telephone line, sans modem, in his home. The defendant's
final claim of error posits that this condition, as phrased in the
written judgment, fails to make clear that the condition was not
intended to prohibit him from accessing the internet.4
We start our appraisal of this claim by noting that such
a supervised release condition normally should not be construed to
bar internet access. In reviewing a substantially similar
supervised release condition in an earlier case, we explained that
such a condition "affirmatively commands one particular action
(i.e., the maintenance of a certain type of phone line), but does
not expressly prohibit any other, including that of accessing the
internet from home." United States v. Rivera-López, 736 F.3d 633,
634 n.1 (1st Cir. 2013). Here, however, there is a problem with
the wording of the written supervised release condition.
In Rivera-López, we cautioned district courts to take
care in the use of language so as to make clear that the condition
of maintaining a telephone line sans modem is not a prohibition on
all internet usage. See id. The court below complied in part
with this admonition: when it announced the condition from the
bench at the disposition hearing, it began with the qualifying
phrase, "[i]n addition to any telephone or cell phone that he may
4The condition in the written judgment provided: "[The
defendant] shall maintain a telephone at his place of residence
without any special features, modems, answering machines, or
cordless telephones during the term of electronic monitoring."
- 12 -
have. . . ." But in the written judgment, this qualifying language
was inexplicably omitted, and the written condition was
substantially similar to, if not less clear than, the condition
that we found suspect in Rivera-López. The result is that the
written judgment contains the very ambiguity against which the
Rivera-López court warned.
This oversight is easily corrected. We direct the
district court, on remand, to correct the judgment so that the
language of the challenged supervised release condition makes
clear that there is no prohibition on the defendant's access to
the internet.
III.
CONCLUSION
We need go no further. For the reasons elucidated above,
we affirm the sentence but remand the case with directions to
correct the challenged supervised release condition.
So ordered.
- 13 -
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195 F.Supp. 440 (1961)
UNITED STATES of America, Plaintiff,
v.
John W. SCOTT, Defendant.
Cr. No. 8906.
United States District Court D. North Dakota, Northeastern Division.
July 11, 1961.
As Amended July 12, 1961.
*441 David Rubin, U. S. Department of Justice, Washington, D. C., for plaintiff, United States of America.
Harold D. Shaft, of Shaft, Benson & Shaft, Grand Forks, N. D., for defendant, John W. Scott.
RONALD N. DAVIES, District Judge.
On November 15th, 1960, the United States Attorney for the District of North Dakota filed the following Information:
"I
"Prior to June 28, 1960, Quentin Burdick had publicly declared his intention to seek, and did seek, the office of United States Senator from the State of North Dakota, in the Special Senatorial Election held in the State of North Dakota on the 28th day of June, 1960.
"II
"During the month of June, 1960, in the District of North Dakota, John W. Scott wilfully published and distributed, and caused to be published and distributed copies of a certain pamphlet, writing and statement relating to and concerning the said Quentin Burdick. The said pamphlet, writing and statement was entitled IS THIS SMEAROR ARE THEY FACTS, and did not contain the names of persons, associations, committees and corporations responsible for the publication and distribution of the same and the names of the officers of such associations, committees and corporations in violation of Section 612 of Title 18 U.S.C."
§ 612 reads:
"Whoever willfully publishes or distributes or causes to be published or distributed, or for the purpose of publishing or distributing the same, knowingly deposits for mailing or delivery or causes to be deposited for mailing or delivery, or, except in cases of employees of the Post Office Department in the official discharge of their duties, knowingly transports or causes to be transported in interstate commerce any card, pamphlet, circular, poster, dodger, advertisement, writing, or other statement relating to or concerning any person who has publicly declared his intention to seek the office of President, or Vice President of the United States, or Senator or Representative in, or Delegate or Resident Commissioner to Congress, in a primary, general, or special election, or convention of a political party, or has caused or permitted his intention to do so to be publicly declared, which does not contain the names of the persons, associations, committees, and corporations responsible for the publication or distribution of the same, and the names of the officers of each such association, committee, or corporation, shall be fined not more than $1,000 or imprisoned not more than one year, or both. June 25, 1948, c. 645, 62 Stat. 724, amended Aug. 25, 1950, c. 784, § 2, 64 Stat. 475."
On December 8th, 1960, the Defendant, John W. Scott, moved to dismiss the Information alleging:
*442 "The indictment[1] does not state facts sufficient to constitute an offense against the United States in this, that Section 612 or Title 18 of the United States Code, violation of which is alleged in the Indictment, is in violation of the first amendment to the Constitution of the United States."
Defendant and the Government thereafter filed briefs in support of and in opposition to the Motion to Dismiss, and on February 7, 1961, the United States Attorney filed the following request:
"In view of the serious Constitutional question presented by the Defendant's motion herein, the fact that this case appears to be one of first impression, and the importance of the Constitutional issue presented herein, the undersigned, on behalf of the Civil Rights Division of the Department of Justice, does hereby request an opportunity for oral argument, and that sufficient time be allowed to permit an attorney from the Civil Rights Division of the Department of Justice to present the oral argument."
On March 7, 1961, the motion was argued orally by counsel, and time was granted for filing additional briefs and memoranda.
The Defendant challenges the Information filed against him solely upon the ground of the unconstitutionality of Title 18, U.S.C., § 612, as violative of the First Amendment to the Constitution of the United States. The Defendant does not question the sufficiency of the Information to charge the offense of violation of that specific Section. The Defendant stakes his position "almost exclusively" as he stated on oral argument on the holding in Talley v. State of California, 362 U.S. 60, 80 S.Ct. 536, 4 L.Ed.2d 559.
In support of his motion to dismiss the Defendant Scott filed an affidavit, the text of which follows:
"John W. Scott being first duly sworn on oath says:
"I am the defendant in the above entitled action and submit this affidavit in support of my motion to dismiss the Information:
"My principal occupation is that of farming. I reside upon a farm owned by me in Gilby Township, Grand Forks County, North Dakota, and am actively and personally engaged in the farming of approximately three thousand acres of land; in such farming operations I raise substantial quantities of Wheat, Durum, Potatoes and Sugar Beets.
"The occupation of farming in general, and my operations in particular, are subject to extensive regulation by the government of the United States and especially by the Secretary of Agriculture and many subordinate officers, agencies and instrumentalities of the Department of Agriculture, including among others the following:
"My wheat acreage allotment is fixed and determined by the Grain Division of the Agricultural Stabilization and Conservation Committee.
"My sugar beet acreage allotment is fixed and determined by the Sugar Division of the Agricultural Stabilization and Conservation Committee.
"My soil conservation allowances and payments are fixed and determined by the Agricultural Stabilization and Conservation Committee and the Soil Conservation Service.
"My Soil Bank Rental is fixed and determined by the Agricultural Stabilization and Conservation Committee.
"My potatoes are inspected and graded by Federal Inspectors of the *443 Fruit and Vegetable Division of the Department of Agriculture.
"My shipments in Interstate Commerce are subject to inspection and condemnation by the Food and Drug Administration.
"Penalties for over-planting, whether innocent or intentional, may be imposed by the State and County Committees of the Agricultural Stabilization and Conservation Division.
"My farm labor is investigated by and I am subject to penalties imposed upon prosecution by the Child Labor Division of the Department of Labor.
"As an income earner and as the employer of employees, I am subject to the Income Tax Laws and Regulations, including the requirements of withholding from and paying for my employees Social Security taxes.
"In all, or nearly all, of these matters, there is necessity for frequent contacts, negotiations, agreements with and orders and instructions from Federal agents and representatives at various levels. In many of these matters the Federal representatives are vested with extensive discretionary powers."
In Talley, supra, the Supreme Court discussed the reasons for its decisions in Bates v. City of Little Rock, 361 U.S. 516, 80 S.Ct. 412, 4 L.Ed.2d 480, and N. A. A. C. P. v. State of Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488, stating, 362 U.S. 60, 65, 80 S.Ct. 536, 539: "The reason for those holdings was that identification and fear of reprisal might deter perfectly peaceful discussions of public matters of importance." And continues: "This broad Los Angeles ordinance is subject to the same infirmity. We hold that it, like the Griffin,[2] Georgia, ordinance, is void on its face."
In enacting § 612, supra, the Congress among other things, made it a criminal offense to wilfully publish and distribute or cause to be published and distributed pamphlets concerning any person who was a candidate for the Senate without disclosing the names of the person or persons or groups responsible for its publication and distribution.
The Defendant conceded on oral argument that the principle is well established by prior court decisions that the courts will examine in each individual case the effect of challenged legislation.
Trial courts are well advised to weigh the circumstances and appraise the substantiality of the reasons advanced in support of the enactment of legislation when its constitutionality is under attack.
The Congress determined that in certain specified instances the writers of pamphlets must disclose their identity. And why was this done? So that the electorate would be informed and make its own appraisal of the reason or reasons why a particular candidate was being supported or opposed by an individual or groups. Is there anything sinister in requiring disclosure of identity to the end that voters may use their ballots intelligently? Is it not perfectly apparent what havoc could be wrought by anonymous publications concerning candidates enumerated under § 612?
The Defendant's theory of fear of reprisal is highly speculative and conjectural, and it may be added, any citizen of the country could urge the same argument in like circumstances and compel the courts to attempt to forecast the danger of reprisal. The mere possibility of reprisal is not enough.
There may always be men who might think in terms of reprisal, but there will always be courts to protect the intimidated from the intimidators.
In a very recent case the Supreme Court of the United States in Communist Party of the United States of America v. Subversive Activities Control Board, *444 1961), 367 U.S. 1, 81 S.Ct. 1357, 1407, 6 L.Ed.2d 625, said:
"* * * To state that individual liberties may be affected is to establish the condition for, not to arrive at the conclusion of, constitutional decision. Against the impediments which particular governmental regulation causes to entire freedom of individual action, there must be weighed the value to the public of the ends which the regulation may achieve. (Emphasis supplied). Schenck v. United States, 249 U.S. 47 [39 S.Ct. 247, 63 L.Ed. 470]; Dennis v. United States, 341 U.S. 494 [71 S.Ct. 857, 95 L.Ed. 1137]; American Communications Ass'n v. Douds, 339 U.S. 382 [70 S.Ct. 674, 94 L.Ed. 925]."
The decision of this Court on the motion before it is based squarely upon the rationale of this most recent pronouncement of the Supreme Court of the United States.
The value to the public of the statute here under attack far outweighs the supposed infringement of the rights of the Defendant here.
Members of the Senate and the House of Representatives comprise the greatest deliberative bodies in the nation. Legislation such as this that regulates practices incident to their candidacies and elections has a salutary effect upon the country as a whole. Surreptitious publications by unknown authors are an evil which the Congress has seen fit to proscribe within the ambit of § 612. It is a valid exercise of the legislative power in the national interest.
The Information states facts sufficient to constitute an offense against the United States and § 612 of Title 18, U.S.C., is not violative of the First Amendment to the Constitution of the United States.
The motion of the Defendant to dismiss the Information must be, and is hereby denied.
NOTES
[1] Defendant inadvertently used the word "Indictment." I treat the word as "Information" which was obviously intended.
[2] Lovell v. City of Griffin, 303 U.S. 444, 58 S.Ct. 666, 82 L.Ed. 949.
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585 F.2d 745
UNITED STATES of America, Plaintiff-Appellee,v.Irene Yvonne PHILLIPS, Defendant-Appellant.
No. 78-5116
Summary Calendar.*
United States Court of Appeals,Fifth Circuit.
Dec. 4, 1978.
Thomas A. Larkin, Jacksonville, Fla., for defendant-appellant.
John L. Briggs, U. S. Atty., Thomas E. Morris, Asst. U. S. Atty., Jacksonville, Fla., for plaintiff-appellee.
Appeal from the United States District Court for the Middle District of Florida.
Before GOLDBERG, AINSWORTH and HILL, Circuit Judges.
JAMES C. HILL, Circuit Judge:
1
Appellant was convicted, after jury trial in the Middle District of Florida, on six counts of an original seven-count indictment, the government having obtained a dismissal of one count. The entire indictment dealt with the illegal possession, forging and uttering of stolen United States Treasury checks. Appellant asserts error arising out of counts four and five of the indictment,1 charging him with possession of stolen mail in violation of 18 U.S.C.A. § 1708 and uttering a forged check in violation of 18 U.S.C.A. § 495. One check, made payable to Marilyn M. Bishop, was involved in both of those counts.
2
At trial, during the cross-examination of the government's handwriting expert, Ronald N. Morris, defense counsel first learned that another handwriting examiner, a Mr. Choate, had made a prior examination of the same check.
3
Mr. Choate did not appear as a witness. The government had a copy of his report, as well as the report of witness Morris. Prior to the trial, it had furnished to appellant's counsel the Morris report but had not disclosed the existence of the Choate report. The latter report was furnished to appellant's counsel after the trial at the direction of the district judge. In the report Choate concluded that appellant had "very probably written" the third endorsement on the Marilyn M. Bishop check involved in counts four and five, but he found no basis for identifying or eliminating appellant as having written the reported signature of Marilyn Bishop as first endorser of the check.
4
Appellant contends that the failure of the government to supply a copy of the Choate report to appellant prior to trial constitutes error on two grounds. First, appellant asserts that the report was information favorable to the accused under the Brady doctrine.2 We have carefully examined the report and the record in this case. The Choate report linked the defendant's handwriting with an endorsement on a check which appellant was charged with having possessed and cashed. The contention that such evidence would have been exculpatory evidence under Brady is without merit.
5
The second contention made by appellant requires some further investigation. In the Middle District of Florida, as in other districts, the court has adopted a far-reaching and constructive "Omnibus Hearing Project." Participation in the program is voluntary. If a defendant declines to participate, he is entitled to such discovery of government evidence and information as the law provides, and nothing more. Further, by refusing to participate, the defendant declines to agree to furnish information to the government not ordinarily discoverable of a defendant by legal processes. On the other hand, if the government and the defendant elect to participate in the omnibus hearing program, each agrees to furnish to the other more information than either would be entitled to receive or required to furnish under the law. Thus, on a "quid pro quo" basis, the defendant may undertake to make available to the government reports, statements, affidavits or interviews of witnesses to be used by the defendant in defendant's case-in-chief. Participation in the project does not limit the government's obligation to make discovery as otherwise required by law. Thus, Brady material must be provided. However, participation in the project often requires the prosecutor to furnish additional information as its part of the bargain.
6
The omnibus order entered in this case contained the following paragraph:
7
4. The government does have reports of experts in its file. The government will call expert witnesses to testify. The name of each expert witness, his qualifications, the subject of his testimony being Handwriting and fingerprints and his reports will be supplied to defendant.
8
Pursuant to this paragraph of the order, the government furnished appellant with a copy of the report of witness Morris, the only expert witness to testify. However, the government furnished nothing in response to its undertaking in the next paragraph of the omnibus order to supply appellant with "reports of scientific . . . comparisons and other reports of experts pertaining to this case." It is clear that the second paragraph quoted above dealt with reports of experts other than prospective expert witnesses and that it obligated the government to supply such reports of scientific comparison regardless of their exculpatory nature. Having obtained discovery from the defendant through the omnibus procedure, there appears to be no excuse for the prosecutor to have withheld the Choate report from the defendant in breach of its obligation to furnish it.
9
In our view, the agreement of the government to engage in pretrial discovery under the omnibus project makes the information referred to therein discoverable to the same extent as it would be if it were discoverable under the rules of law generally applicable. Thus, we conclude that the Choate report was discoverable and that the prosecution failed in its duty to furnish it to the defense. United States v. Scanland, 495 F.2d 1104, 1106 (5th Cir. 1974). Cf. United States v. Urdiales, 523 F.2d 1245, 1247 (5th Cir. 1975), Cert. denied, 426 U.S. 920, 96 S.Ct. 2625, 49 L.Ed.2d 373 (1976).
10
Nonetheless, after a careful review of appellant's brief and the record on appeal, we are firmly of the conviction that no prejudice resulted to appellant due to the prosecutor's having wrongfully withheld this report. Rather than tending to be exculpatory, the exposure of the substance of Choate's report would have been harmful to the appellant's case.
11
Thus, although we strongly condemn the failure of the government to abide by its obligations under the omnibus proceeding, we cannot reverse appellant's conviction in the absence of a showing of prejudice. See United States v. James, 495 F.2d 434 (5th Cir.), Cert. denied, 419 U.S. 899, 95 S.Ct. 181, 42 L.Ed.2d 144 (1974); United States v. Saitta, 443 F.2d 830, 831 (5th Cir.), Cert. denied, 404 U.S. 938, 92 S.Ct. 269, 30 L.Ed.2d 250 (1971).
Accordingly, the judgment appealed from is
12
AFFIRMED.
*
Rule 18, 5 Cir.; See Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I
1
The government asks us to refuse to review the convictions under counts four and five because the defendant's sentence under those counts is concurrent with the sentence imposed on counts one through three. We decline to exercise our discretion to apply the concurrent sentence doctrine here, nor do we address the difficult question of whether the concurrent sentence doctrine remains viable. See United States v. Evans, 572 F.2d 455, 476 n. 21 (5th Cir. 1978)
2
Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963)
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 5, 2007
No. 07-50849
Conference Calendar Charles R. Fulbruge III
Clerk
UNITED STATES OF AMERICA
Plaintiff-Appellee
v.
ERNEST JAIR GONZALEZ-ORTIZ
Defendant-Appellant
Appeal from the United States District Court
for the Western District of Texas
USDC No. 3:07-CR-204-ALL
Before JOLLY, HIGGINBOTHAM, and PRADO, Circuit Judges.
PER CURIAM:*
Appealing the Judgment in a Criminal Case, Ernest Jair Gonzalez-Ortiz
raises arguments that are foreclosed by Almendarez-Torres v. United States,
523 U.S. 224, 235 (1998), which held that 8 U.S.C. § 1326(b)(2) is a penalty
provision and not a separate criminal offense. United States v.
Pineda-Arrellano, 492 F.3d 624, 625 (5th Cir. 2007), petition for cert. filed (Aug.
28, 2007) (No. 07-6202). The Government’s motion for summary affirmance is
GRANTED, and the judgment of the district court is AFFIRMED.
*
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.
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