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981 So.2d 1179 (2006)
SARAH CHRISTENSEN
v.
GARY W. CAMPBELL AND DEBRA CAMPBELL.
No. 2040897.
Supreme Court of Alabama.
March 24, 2006.
Decision of the Alabama Court of Civil Appeal without Opinion. Affirmed.
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United States Court of Appeals,
Eleventh Circuit.
No. 94-6117.
Garshasb Hamid FARSIAN, Plaintiff-Respondent,
v.
PFIZER, INC., Shiley, Inc., Defendants-Petitioners.
Oct. 16, 1996.
Appeal from the United States District Court for the Northern
District of Alabama (No. CV 92-G-2646-S); J. Foy Guin, Jr., Judge.
Before HATCHETT, Chief Judge, COX, Circuit Judge, and JOHNSON*,
Senior Circuit Judge.
PER CURIAM:
We permitted an interlocutory appeal in this case pursuant to
28 U.S.C. § 1292(b) to review the propriety of the district court's
denial of the defendants' motion for summary judgment. We
concluded that the appeal involved a question of Alabama law that
was determinative and unanswered by controlling precedent in
Alabama. Farsian v. Pfizer, Inc., 52 F.3d 932 (11th Cir.1995). We
certified the following question to the Supreme Court of Alabama:
DOES A HEART VALVE IMPLANTEE HAVE A VALID CAUSE OF ACTION
FOR FRAUD UNDER ALABAMA LAW IF HE ASSERTS THAT THE VALVE'S
MANUFACTURER FRAUDULENTLY INDUCED HIM TO HAVE THE VALVE
IMPLANTED WHEN THE DAMAGES THAT HE ASSERTS DO NOT INCLUDE AN
INJURY-PRODUCING MALFUNCTION OF THE PRODUCT BECAUSE THE VALVE
HAS BEEN AND IS WORKING PROPERLY?
Id. at 934. The Supreme Court of Alabama has now answered the
question in the negative. Pfizer, Inc. v. Farsian, No. 1941153, --
- So.2d ---- (Ala. Aug. 30, 1996). The judgment of the district
*
Judge Johnson was a member of the panel that heard oral
argument in this case, but did not participate in this decision.
This decision is rendered by quorum. 28 U.S.C. § 46(d).
court is therefore REVERSED and this action is DISMISSED for
failure to state a claim.
REVERSED and RENDERED.
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638 F.2d 1061
1980-81 Trade Cases 63,714, 8 Fed. R. Evid. Serv. 74
CONTRACTOR UTILITY SALES CO., INC., an Illinois corporation,Plaintiff Counterdefendant-Appellant,v.CERTAIN-TEED PRODUCTS CORPORATION, a Maryland corporation,Defendant Counterplaintiff-Appellee.CONTRACTOR UTILITY SALES CO., INC., an Illinois corporation,Plaintiff Counterdefendant-Appellee,v.CERTAIN-TEED PRODUCTS CORPORATION, a Maryland corporation,Defendant Counterplaintiff-Appellant.
Nos. 80-1128, 80-1245.
United States Court of Appeals,Seventh Circuit.
Argued Sept. 16, 1980.Decided Jan. 14, 1981.Rehearing and Rehearing In Banc Denied Feb. 17, 1981.
Thomas F. Londrigan, Springfield, Ill., for plaintiff-counterdefendant appellant, plaintiff-counterdefendant appellee.
Geoffrey G. Gilbert, Chicago, Ill., for defendant-counterplaintiff appellee, defendant-counterplaintiff appellant.
Before CUMMINGS, SPRECHER and BAUER, Circuit Judges.
SPRECHER, Circuit Judge.
1
Plaintiff, Contractor Utility Sales Co., Inc. ("Cusco"), brought suit against Certain-teed Products Corporation ("Certain-teed"),1 for alleged violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and for common law fraud and breach of contract. A ten day jury trial was held before Judge Harold A. Baker in the United States District Court for the Central District of Illinois. At the close of plaintiff's case, Judge Baker granted Certain-teed's motion for a directed verdict on the antitrust counts. The breach of contract and fraud counts remained and were submitted to the jury, which returned a general verdict for Cusco awarding $2,400,000 in compensatory damages and $7,383,000 in punitive damages. Cusco appeals the district court's directed verdict on the antitrust counts and the court's refusal to grant a new trial on the issue of compensatory damages. Certain-teed appeals several rulings of the court concerning liability and damages on the common law counts. We affirm the district court's directed verdict on the antitrust counts, but reverse and remand for a new trial the issues of liability and damages on the common law breach of contract and fraud counts.
2
* Cusco is a closely held Illinois corporation based in Springfield, Illinois which sells and distributes polyvinylchloride ("pvc") pipe, asbestos cement ("a/c") pipe, and related accessory supply items to contractors involved in what is known as the federally funded rural water market. Ron Lance is Cusco's majority shareholder and key operating officer. Cusco has been a major force in the sale and distribution of pvc and a/c pipe in the Midwest, primarily in Illinois, Indiana, Missouri, Kentucky, Tennessee, Iowa, Nebraska, and Kansas.
3
Certain-teed, a Maryland corporation, manufactures, among other things, pvc and a/c pipe for use in the rural water market. Its corporate headquarters are in Valley Forge, Pennsylvania.
4
The rural water market consists of federally funded projects designed to supply drinking water to rural areas. Independent contractors compete in public bidding for construction of the projects. Pipe manufacturers and distributors generally submit price quotations to independent contractors for the contractors' use in preparing competitive bids. Actual purchases of pipe, either directly from the manufacturer or from independent distributors, occur only after a contractor has been awarded the project. Often, a successful contractor purchases pipe at prices lower than those originally quoted and from suppliers other than the one who provided the lowest quote in the bidding process. In other words, there is price competition among suppliers at the bidding stage and again at the purchase stage. Cusco and Certain-teed concede that the rural water market has been a very competitive market.
5
From 1965 to 1972, Cusco was a distributor/sales agent for Certain-teed's pvc and a/c pipe in the rural water market in parts of Illinois and Indiana. As an adjunct of its pipe business Cusco supplied contractors with a full line of pipe accessories and supplies manufactured by companies other than Certain-teed. During these years Cusco, primarily through the efforts of Lance, developed a lucrative business based upon a loyal clientele of independent contractors who consistently turned to Cusco as their supplier of competitive quotations and, ultimately, of pipe and accessories.
6
In 1972, Cusco terminated its status as sales agent for Certain-teed's pvc pipe and switched to a competing manufacturer, Robintech Inc., who offered Cusco a larger territory (eight states) and a higher commission rate (81/2%). Since Robintech did not manufacture a/c pipe, Cusco continued to sell and distribute Certain-teed's a/c pipe. Although the parties disagree as to Cusco's exact market share during its years with Robintech, Cusco apparently sold between 25% and 35% of all pvc pipe used in the rural water market in Cusco's market area.
7
Beginning in 1969, and finally terminating unsuccessfully in June, 1975, Certain-teed negotiated with Lance in hopes of purchasing Cusco as a company-owned supply house. The final offer of over $3,000,000 in cash and Certain-teed stock was rejected by Lance in June of 1975.
8
By the summer of 1975, Cusco, for a number of reasons,2 had decided to terminate its relationship with Robintech and to once again handle Certain-teed's pvc pipe, as well as continuing to handle Certain-teed's a/c pipe. Shortly after negotiations for the purchase of Cusco by Certain-teed terminated, the parties began negotiations for a new "Sales Agents Agreement." Lance met with Certain-teed representatives on July 7 and 8, 1975, at Certain-teed's corporate headquarters in Valley Forge. During the course of these negotiations, which produced a draft Sales Agents Agreement, Lance met with Bill Krivsky, head of the Utility Supply Group, Ray Blankenship, head of marketing, George Haufler, President of Certain-teed, and Fred Timpe, financial officer. According to Lance, during these negotiations, Krivsky and others repeatedly assured Lance that Certain-teed would keep Cusco "competitive" in the rural water market.3
9
The proposed Sales Agents Agreement was reviewed by James Potter, Cusco's legal counsel; minor changes satisfactory to both parties were made. Lance, on behalf of Cusco, signed the Sales Agents Agreement in Potter's office during the last week of August, 1975. The contract was executed by Certain-teed officials in Valley Forge on September 2, 1975.
10
The Sales Agents Agreement was to begin November 1, 1975, and run through December 31, 1978. It was terminable only upon the mutual consent of the parties or upon the occurrence of certain specified events, such as the insolvency of Cusco or the departure of Lance from active participation in Cusco. Except for sales through existing agents or distributors of Certain-teed, Cusco was designated the exclusive Certain-teed agent for the eight state area Cusco originally had with Robintech. Certain-teed promised to supply Cusco with up to 50,000,000 pounds of pvc pipe per year and to pay Cusco a sales commission of 10% of the invoice price on pvc pipe and 81/2% on a/c pipe. Under the contract, Cusco was to submit to Certain-teed all information regarding projects prior to submitting any quotations or bids to contractors competing for the project contract. Cusco was to quote prices only as established and authorized by Certain-teed. Cusco was not to sell pipe of competing manufacturers without first submitting the bid or order to Certain-teed for its acceptance or rejection. The contract also contained an integration clause specifically stating that:
11
This Agreement contains the entire agreement of CPC (Certain-teed) and Sales Agent (Cusco). Any and all representations, inducements, promises or agreements, oral or otherwise, of CPC and Sales Agent which are not set forth herein, or in a written amendment hereof executed by CPC and Sales Agent, shall not be of any force or effect, and shall not be binding on either CPC or Sales Agent.
12
Shortly after the contract was executed, Certain-teed officials met in St. Louis with Lance, Cusco sales people, Certain-teed field representatives, and Certain-teed corporate officials to explain the contract and to begin the new business association. According to the testimony of Lance and several others, during the course of this meeting Krivsky and other Certain-teed officials again assured the Cusco representatives that Certain-teed intended to keep Cusco "competitive" in the rural water market.
13
The Sales Agents Agreement took effect November 1, 1975. Also during November, 1975, Krivsky, who had negotiated the Cusco agreement for Certain-teed, left the Utility Supply Group and became head of Certain-teed's Pipe Division. On December 31, 1975, Certain-teed announced incremental price increases, commencing January 1, 1976, totalling 25% on its pvc pipe. The immediate impact of this price increase was to price Certain-teed's pipe out of the highly competitive rural water market and to reduce significantly the sale of pipe by Cusco and Certain-teed.
14
To understand the possible reasons for Certain-teed's price increase, a brief analysis of the conditions in the rural water market in 1974, 1975, and 1976 is necessary. 1974 was a boom year in the rural water market for manufacturers, agents, and distributors. The Arab oil embargo had created shortages of pvc pipe, an oil-based product, and had pushed prices and profits to new highs. By 1975, however, the market had reversed and sellers/distributors found themselves with an abundance of pipe at extremely low prices and profits. Lance testified that during June, 1975, pvc prices were as depressed as he had ever seen them. Dr. Roger Kormendi, Cusco's expert on damages, testified that by the end of 1975 prices were so depressed that Certain-teed had earned, what he called, a "negative profit" in its pipe division. The December 31, 1975, price increase, according to Certain-teed, was an attempt by Certain-teed to act as a price leader and to force prices upward to profitable levels.4 Certain-teed's price leadership proved only partially successful. Although by June, 1976, prevailing market prices had increased by about 25% over the 1975 lows, Certain-teed sales had suffered during the interim.
15
In late 1976, Certain-teed terminated its agency relationships with all existing agents, except Cusco, and entered into new distributorship agreements with the former agents. The new agreements offered commissions to the distributors which were lower than those offered in the terminated agency agreements. Certain-teed offered such a distributorship contract to Cusco, but Cusco steadfastly refused to abandon the apparently more lucrative Sales Agents Agreement. These distribution changes, according to Certain-teed, were part of Certain-teed's efforts to abandon its sales agent force and move towards a much more active direct company sales force. Indeed, during 1976 Certain-teed undertook a number of steps to prepare and enlarge its direct sales force.
16
Cusco now alleges that Certain-teed conspired with competing manufacturers and distributors to eliminate Cusco as an independent sales force in the rural water market, that Certain-teed improperly refused to quote competitive prices to Cusco, that Certain-teed endorsed or permitted dual pricing on numerous bids submitted by Cusco, and that Certain-teed used the Sales Agents Agreement to eliminate Cusco as a competitive market force.
17
The rough and tumble of the parties' business relations finally spilled into the federal courts on June 1, 1977, when Cusco filed the instant action. Cusco's complaint was in two counts. Count I claimed $3,500,000 in compensatory damages for Certain-teed's breach of the Sales Agents Agreement. Count II claimed $3,500,000 compensatory and $3,500,000 punitive damages because Certain-teed allegedly:
18
(I)nduced plaintiff to enter into (the) Sales Agency Agreement ... by fraudulently misrepresenting to the Plaintiff that the Defendant would grant to the Plaintiff an exclusive sales territory and maintain the Plaintiff on the same status as other agents and distributors of the Defendant regarding price, availability of materials, etc.
19
The diversity of the parties was alleged to establish jurisdiction in the district court under 28 U.S.C. § 1332.
20
One year later, on June 16, 1978, Cusco filed its first Amended Complaint, dropping the original common-law counts and asserting three counts for violations of the federal antitrust laws. Count I alleged that Certain-teed unilaterally attempted to monopolize the Midwest rural water market in violation of § 2 of the Sherman Act, 15 U.S.C. § 2. Count II claimed that the Sales Agents Agreement was a contract in restraint of trade prohibited by § 1 of the Sherman Act, 15 U.S.C. § 1. Count III alleged that Certain-teed's dual pricing policy violated the Robinson-Patman Act, 15 U.S.C. § 13.
21
On March 26, 1979, Cusco filed a Second Amended Complaint in six counts. This complaint dropped the Robinson-Patman Act claim (which previously had been dismissed by agreement of the parties) and the unilateral § 2 attempt to monopolize claim, and asserted five new antitrust counts based on alleged violations of Sections 1 and 2 of the Sherman Act. The complaint, in a less than artful fashion, essentially alleged a conspiracy among Certain-teed, Hayes Pipe and Supply Company, and other distributors to eliminate Cusco and to monopolize the distribution market for pvc pipe. The complaint further alleged that Certain-teed had conspired with Cusco to eliminate Robintech, Certain-teed's competitor/manufacturer, and that the Sales Agents Agreement was an illegal resale price maintenance and market allocation scheme. The restraint of trade count was continued. Count VI again asserted that Certain-teed had induced Cusco to execute the Sales Agents Agreement on the basis of a fraudulent misrepresentation, but the alleged misrepresentation now was described as:
22
(a) The Defendant, Certain-Teed, would grant to the Plaintiff, CUSCO, an exclusive sales territory;
23
(b) That the Defendant, Certain-Teed, would supply to the Plaintiff, CUSCO, 50 million pounds of PVC pipe per year;
24
(c) That the Defendant, Certain-Teed, would keep the Plaintiff, CUSCO, competitive with his contractor-customers in the rural water market.
25
Certain-teed moved on April 10, 1979, to dismiss Cusco's Second Amended Complaint pursuant to Rules 12(b)(6), 15, and 56 of the Federal Rules of Civil Procedure. After a hearing, Judge Ackerman denied this motion. Certain-teed's Petition for a Writ of Mandamus to force Judge Ackerman to dismiss the complaint was denied by this court on June 28, 1979.
26
On September 21, 1979, yet another pleading was filed by Cusco an Amendment to Second Amended Complaint. This pleading modified slightly the fraudulent misrepresentation count and reasserted Cusco's original breach of contract claim.5 Finally, during the course of the jury trial, Cusco filed a Second Amendment to Second Amended Complaint in order to add certain factual allegations to its existing counts.
27
Several weeks before the November 5, 1979, trial date, Judge Ackerman announced that he was recusing himself from the trial and that Judge Baker would try the case. But, before officially transferring the case to Judge Baker, Judge Ackerman heard and denied Certain-teed's motions for summary judgment or, in the alternative, for a trial continuance. Subsequent motions to Judge Baker requesting his reconsideration of Judge Ackerman's actions were denied.6
28
A jury trial was held before Judge Baker from November 5 to November 16, 1979. During the course of Cusco's case, Judge Baker excluded a portion of the damages testimony of Dr. Roger Kormendi, Cusco's expert witness on damages, and instructed the jury accordingly. At the close of Cusco's evidence, Judge Baker granted Certain-teed's motion for a directed verdict on the five antitrust counts and denied a similar motion with respect to the common law counts. The jury returned a general verdict awarding Cusco compensatory damages of $2,400,000 and punitive damages of $7,383,000. Certain-teed's post-trial motions for judgment n. o. v. or, in the alternative, for a new trial were denied. Similarly, Cusco's motion for a new trial on the antitrust counts was denied. Both parties appealed to this court, claiming errors below.
II
29
Cusco appeals from the district court's directed verdict in favor of Certain-teed on the antitrust counts. Cusco argues that sufficient evidence was introduced to raise a jury question as to (a) whether Certain-teed had violated Section 1 of the Sherman Act by conspiring with others to destroy Cusco's business, and (b) whether the Sales Agents Agreement was an illegal contract in restraint of trade, also prohibited by Section 1 of the Sherman Act.7
30
On review of a directed verdict, we are "bound to view the evidence in the light most favorable to (the resisting party) and to give it the benefit of all inferences which the evidence fairly supports, even though contrary inferences might reasonably be drawn." Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 696, 82 S.Ct. 1404, 1409, 8 L.Ed.2d 777 (1962) (footnote omitted). A directed verdict is proper only where the trial court, viewing the evidence and all reasonable inferences arising therefrom in the light most favorable to the resisting party, and without weighing the credibility of witnesses, concludes that no reasonable jury in a fair and impartial exercise of their judgment may arrive at a different conclusion. Hohmann v. Packard Instrument Co., Inc., 471 F.2d 815, 819 (7th Cir. 1973). Having viewed the record in the required manner, we conclude that Cusco failed to establish a prima facie case of any violations of Section 1 of the Sherman Act. Thus, the district court properly granted Certain-teed's motion for a directed verdict.8
31
The clearest characterization of Cusco's claims before this Court is the defendant's, namely that Cusco alleges:
32
A) a concerted refusal to sell pipe to Cusco as a result of an agreement reached between Certain-teed and other independent distributors with the purpose of eliminating price competition;
33
B) a conspiracy between Certain-teed, Hayes Pipe and Supply Company, and other distributors to destroy Cusco's business;
34
C) a conspiracy between Certain-teed and other manufacturers of pvc pipe to destroy Cusco's business; and,
35
D) that the Cusco Sales Agents Agreement is a contract in restraint of trade.
36
We deal with each of these allegations seriatim.A
37
Cusco's first antitrust theory relies on this court's recent decision in Alloy International Co. v. Hoover-NSK Bearing Co., 635 F.2d 1222, 1980-1 Trade Cases (CCH), P 63,148 (7th Cir. 1980). There we stated that a Sherman Act § 1 violation could be established if the jury determined that "the defendant manufacturer refused to sell to the plaintiff distributor as a result of an agreement with the latter's competitor aimed at eliminating price competition between the distributors." 635 F.2d at 1224, 1980-1 Trade Cases, P 63,148, at 77,707.9
38
Cusco argues that its proof raised a jury question whether Certain-teed had taken action to eliminate Cusco as an independent distributor of its pvc pipe upon the request of one or more competing distributors and motivated by a desire to eliminate Cusco's price competition. But, Cusco misunderstands the requirements of the per se refusal-to-deal theory expressed in Alloy International. Furthermore, its evidence at trial fell far short of establishing either a refusal-to-deal or the existence of any agreement or conspiracy between Certain-teed and its distributors aimed at eliminating Cusco's price competition.
39
Manufacturers generally have broad discretion regarding with whom or through whom they deal. But, Alloy International and Cernuto recognize that this discretion is overstepped when: 1) a manufacturer terminates a dealer upon the request of another dealer and, 2) that termination is motivated by a desire to reduce or eliminate price competition. The reason for this limitation on a manufacturer's discretion is that such conduct contains elements of non-unilateral activity and resembles either a concerted refusal to deal or a price fixing scheme, either of which are per se illegal.
40
Cusco failed to establish that its rocky relations with Certain-teed fit within this theory. Certain-teed terminated Cusco as an agent only after relations had so deteriorated that Cusco withheld approximately $1,000,000 owed to Certain-teed in 1977. Cusco does not allege that this 1977 termination was wrongful. Rather, Cusco argues that Certain-teed improperly recruited Cusco as a Certain-teed agent. But, proof of such improper recruitment, without more, does not constitute sufficient evidence of termination. Indeed, such actions tend to show the opposite: that the agent relationship was not terminated. Certain-teed recruited Cusco to sell its pipe, and Cusco did make sales of Certain-teed pipe. In 1976, Cusco sold a quantity of Certain-teed pvc pipe roughly equivalent to the volume of pipe it sold in 1975 for Robintech.
41
Cusco's theory, although not clearly articulated, must be that Certain-teed's actions towards Cusco during the life of the Sales Agents Agreement are similar, in terms of anticompetitive effects, to the termination of an existing dealer. While individual actions of Certain-teed during the contract period, such as the alleged dual pricing and covert use of Hayes Pipe & Supply Company, may have reduced Cusco's sales volume and produced unacceptable anticompetitive effects, the per se ruling of Alloy International is inapplicable. This case does not involve a complete termination. Cusco continued to sell significant quantities of pvc pipe for Certain-teed during the contract period. Since there is no complete termination appropriate for a per se analysis, Cusco would have to provide a more complex analysis under the rule of reason. But, Cusco has not presented the facts or analysis necessary for such a rule of reason holding and we will not embark upon it sua sponte. Thus, the district court properly rejected Cusco's first antitrust claim premised on Alloy International's theory of wrongful termination.
B
42
Cusco's second antitrust claim alleges a conspiracy in restraint of trade between Certain-teed, Hayes Pipe & Supply Company ("Hayes"), and other distributors to eliminate Cusco as a competitor in the rural water market. This count fails for lack of evidence of any unlawful conspiracy or combination.
43
Cusco argues forcefully that the business relations between Certain-teed and Hayes during the term of the Sales Agents Agreement demonstrate an unlawful conspiracy. The facts, viewed in the light most favorable to Cusco, establish that Hayes was an independent distributor of Certain-teed pvc pipe in Tennessee. During 1975, the year the Sales Agents Agreement was executed, Hayes marketed approximately 170,000 pounds of Certain-teed pvc pipe in Tennessee. During 1976 and 1977, Hayes' sales increased dramatically to 1.6 million and 5.3 million pounds, respectively. During 1978, the year the Cusco agency agreement was terminated, Hayes' sales in Tennessee dropped to 3.2 million pounds of Certain-teed pvc pipe. During this same period, Cusco's sales in Tennessee dropped substantially. This drop can be seen in comparison to sales of Robintech pipe. In 1975, while Cusco sold Robintech products, Cusco sold approximately 3.4 million pounds of pvc pipe in the Tennessee rural water market. But, under the Certain-teed agreement, Cusco's total sales in 1976 and 1977 in Tennessee were 900,000 and 500,000 pounds, respectively.
44
Cusco argues that this dramatic drop in Cusco's sales in 1976 and 1977, coupled with a simultaneous surge in Hayes' Tennessee sales, is more than mere coincidence. Specifically, Cusco argues that Certain-teed's sales through Hayes were unlawful under the Cusco Sales Agents Agreement. That agreement granted Cusco an exclusive sales agency in Tennessee, and other states, except for "(s)ales through existing agents or distributors of CPC (including those owned by CPC)." Cusco argues that Hayes was not an existing agent or distributor of Certain-teed because it had no written agreement with Certain-teed when the Sales Agents Agreement was executed. Consequently, Cusco argues that the large sales through Hayes evidence Certain-teed's intent to avoid its obligations under the Cusco agreement and its intent to place Cusco in an anticompetitive position in the Tennessee rural water market. Cusco argues that the anticompetitive effects of these unlawful sales are further exacerbated by the preferential prices and delivery terms Certain-teed granted to Hayes, but denied to Cusco.10
45
Cusco also puts great weight on a memorandum written by Vic Birch of Certain-teed's Credit Department, dated April 6, 1977. In that memorandum, Birch stated that Hayes had "co-operated" with Certain-teed regarding customer information and "has gone along with my decisions as to what contractor to sell and those to stay away from."
46
Finally, Cusco claims that Certain-teed engaged in a concerted practice of dual pricing aimed at eliminating Cusco as a competitor in the rural water market. According to Cusco, on several occasions Certain-teed authorized Cusco to quote a certain price to a contractor preparing a bid, while at the same time Certain-teed, or agents authorized by Certain-teed, quoted lower prices to the same contractor or to other contractors bidding for that same project.11
47
Certain-teed denies that the evidence established that it intended to damage Cusco. Certain-teed argues that Hayes had marketed Certain-teed pipe in Tennessee prior to the Cusco Sales Agents Agreement, that the absence of a written agent/distributor contract did not prohibit continued sales through Hayes, and that one reason Hayes made substantial sales was because Cusco failed to make any serious selling efforts in Tennessee. Although admitting that infrequent instances of discriminatory pricing may have occurred because of inadvertent or unauthorized acts,12 Certain-teed denies that it ever engaged in purposeful dual pricing aimed at eliminating Cusco as a competitive force. Furthermore, Certain-teed argues that the pricing practices cited by Cusco as examples of dual pricing were not discriminatory, but were the results of competitive bidding in the second stage, or actual purchase point, of the pipe business.13 Finally, Certain-teed argues that Cusco failed to establish any evidence of an unlawful conspiracy aimed at eliminating Cusco. Certain-teed contends that the conduct Cusco relies upon to establish a Section 1 claim is purely unilateral and, thus, cannot constitute a Section 1 violation.
48
We agree, and find that Cusco failed to establish a prima facie case of an unlawful conspiracy to eliminate Cusco as a competitor. The evidence establishes, at most, unilateral actions by Certain-teed.
49
Section 1 of the Sherman Act prohibits contracts, combinations, or conspiracies unreasonably restraining trade or commerce. The fundamental prerequisite is unlawful conduct by two or more parties pursuant to an agreement, explicit or implied. Solely unilateral conduct, regardless of its anti-competitive effects, is not prohibited by Section 1. Rather, to establish an unlawful combination or conspiracy, there must be evidence that two or more parties have knowingly participated in a common scheme or design to accomplish an anti-competitive purpose. Albrecht v. Herald Co., 390 U.S. 145, 149, 88 S.Ct. 869, 871, 19 L.Ed.2d 998 (1968). Wisconsin Liquor Co. v. Park & Tilford Distillers Corp., 267 F.2d 928, 931 (7th Cir. 1959).
50
An agreement to engage in anti-competitive conduct need not, and generally will not, be established by direct evidence of a combination or conspiracy. The requisite concerted action may be inferred from a course of dealing or from other circumstantial evidence. American Tobacco Co. v. United States, 328 U.S. 781, 809-10, 66 S.Ct. 1125, 1138, 90 L.Ed. 1575 (1946); Interstate Circuit, Inc. v. United States, 306 U.S. 208, 221, 59 S.Ct. 467, 472, 83 L.Ed. 610 (1939). United States v. Consolidated Packaging Corp., 575 F.2d 117, 126-27 (7th Cir. 1978).
51
Although Section 1 does not require production of a smoking gun in order to establish an unlawful conspiracy, we certainly cannot fault the district court for granting a directed verdict where the plaintiff fails to produce even a puff of smoke indicating that such a gun existed and was used. Cusco's evidence established only that Certain-teed unilaterally performed a number of activities and that those activities may have had anti-competitive effects.14
52
First, Certain-teed's reliance on Hayes to sell pvc pipe in Tennessee does not evidence the requisite elements of an unlawful conspiracy. John Selleck, Certain-teed's district manager for Tennessee, testified for Cusco that Hayes had sold Certain-teed pipe prior to September, 1975, and that, although Hayes did not have a written distributor/agent agreement, Certain-teed continued to negotiate with Hayes in hopes of securing such an agreement. The Cusco Sales Agents Agreement's exception for existing agents and distributors did not specify that "existing agents" was limited to those with written agreements. Thus, we cannot conclude that Certain-teed's sales through Hayes constituted a breach of the agreement. Since we cannot conclude that Certain-teed breached the agreement, we cannot conclude that the sale through Hayes necessarily is evidence of an unlawful conspiracy.
53
Second, since the sales through Hayes were lawful, the fact that Hayes' sales increased while Cusco's decreased does not establish that Certain-teed unlawfully conspired with Hayes to damage Cusco. Certain-teed was free to deal either through Cusco or through its pre-existing agents such as Hayes. Even proof that Certain-teed chose to market through Hayes because Certain-teed held anti-competitive motives towards Cusco would be insufficient to prove a conspiracy. Cusco must further prove that Hayes encouraged or participated in this decision for anti-competitive reasons. Otherwise, the sales through Hayes evidence nothing more than unilateral action by Certain-teed. That Hayes benefitted from Certain-teed's decision does not, without some evidence of participation, establish an unlawful conspiracy. Fuchs Sugar & Syrups, Inc. v. Amstar Corp., 602 F.2d 1025, 1031 (2d Cir.), cert. denied, 444 U.S. 917, 100 S.Ct. 232, 62 L.Ed.2d 172 (1979). Moreover, Cusco failed to show any improper motive or participation by Hayes or Certain-teed. The testimony of Selleck indicated that Certain-teed's decision to market primarily through Hayes was a legitimate business decision taken in light of Cusco's disappointing sales efforts in Tennessee and the advantages offered by a local agent such as Hayes.15
54
Third, the Birch memorandum, standing by itself, certainly does not evidence an unlawful conspiracy. It simply recounts the normal cooperation between a manufacturer and an agent dealing with sometimes shaky contractors on large volume credit transactions. Certain-teed's selling arrangement resulted in the extension of credit to contractors. There is nothing insidious about a memo recounting the cooperation between a manufacturer and his legitimate agent distributor.
55
Finally, Cusco's reliance on the alleged preferential terms granted to Hayes and the alleged dual pricing engaged in by Certain-teed similarly falls short of establishing an unlawful conspiracy to restrain trade. Even assuming arguendo that the allegations are true, there is nothing to indicate that the actions are anything more than the unilateral business decisions of Certain-teed. That Hayes benefitted from the preferential business terms does not establish it as a co-conspirator. There is no evidence that Hayes acted with knowledge of any unlawful actions taken by Certain-teed with regard to Cusco.16
56
Cusco also argues that Certain-teed conspired with agents and distributors other than Hayes to eliminate Cusco. Cusco relies primarily upon the testimony of Eugene Grose, the owner of a Kansas City distributorship handling Certain-teed pvc pipe during 1976, who testified: that he believed that the Cusco Sales Agents Agreement was a better arrangement that he and other Certain-teed distributors and agents had; that because of Cusco's preferred agent status, Cusco could be more competitive in the rural water market than he could be; that he spoke with numerous other Certain-teed distributors and agents regarding the unfairness and competitive threat of the Cusco arrangement; that, in the spring of 1976, he spoke about the Cusco arrangement with Ralph Gray, Certain-teed's St. Louis district manager, who expressed his reservations about the Cusco agreement; and, that at the American Water Works Association (AWWA) convention in 1976, he and other Certain-teed distributors complained to Krivsky and other Certain-teed officials about the unfairness of the Cusco arrangement.
57
But, this evidence again falls short of establishing an unlawful conspiracy. Indeed, the unequivocal testimony of Grose on cross-examination destroys any possibility that these conversations were a part of a conspiracy against Cusco. During cross-examination, Grose explicitly denied that he or other distributors ever requested Certain-teed to terminate Cusco or to take any other action that would harm Cusco. He only asked Certain-teed that he too be given an agents agreement as lucrative and competitive as the Cusco Sales Agents Agreement. He further stated that the conversations at the AWWA convention were similar pleas by distributors for treatment comparable to Cusco's, and that Certain-teed never stated that any action would be taken into injure or terminate Cusco.17 Such unequivocal denials of conspiracy by the plaintiff's best witness, and the absence of any other evidence indicating the presence of a Certain-teed distributor conspiracy, supports the district court's conclusion that there was no jury question regarding whether any of Cusco's competitors had requested Certain-teed to terminate or injure Cusco.18C
58
Cusco's third antitrust theory alleges an unlawful conspiracy between Certain-teed and other manufacturer/distributors of pvc pipe aimed at eliminating Cusco from the rural water market. Cusco presents two strands of evidence to establish this claim. First, Cusco relies primarily upon the testimony of Clayton Walker, President of Vinylplex, a competitor-manufacturer, regarding a conversation with Certain-teed's Bill Krivsky about distribution techniques. Second, Cusco asserts that the testimony of Ron Lance regarding his difficulties in securing an alternative supply of pipe buttresses this claim.
59
Walker testified19 that he preferred direct sales, that Krivsky agreed there was a need for direct marketing, and that Walker was reluctant to sell pipe through Cusco. This testimony hardly established that Certain-teed conspired with Vinylplex or others to eliminate Cusco. There is no evidence that Krivsky and Walker agreed to any course of action that would violate the Sherman Act. The conversation merely reveals Vinylplex's reasons for its direct sales force and Krivsky's agreement that the competitive rural water market required direct sales. No unified course of action was agreed upon or contemplated.20 The manufacturers were acting for their own independent self-interests in turning to direct sales to the exclusion of middlemen such as Cusco.
60
The second strand of Cusco's industry-wide conspiracy theory is even weaker than the first. Cusco tries to establish such a conspiracy by the self-serving testimony of Lance that other manufacturers "hated" him because of his aggressive competition in the past, and that their subsequent refusal to sell him pipe on a regular basis (after the Certain-teed agreement collapsed) is evidence of their concerted action against him. We fail to see how this, without more, is any evidence of an industry-wide conspiracy. Even assuming the other manufacturers, individually, do despise him and did refuse to sell regularly through him, those actions do not establish a conspiracy. We have, at most, unilateral business judgments regarding distribution techniques taken by individual competitors. A concerted refusal to deal would be actionable, but evidence of the requisite element of concerted action clearly is missing in Cusco's case.21 Thus, the directed verdict on this count was proper.D
61
Cusco's final antitrust theory is that the Cusco Sales Agents Agreement constitutes an unreasonable restraint of trade under Section 1 of the Sherman Act. But, Cusco's argument consists solely of a number of allegations, often conclusory and inconsistent, offered repeatedly without supporting legal analysis. The ensuing discussion, consequently, deals only briefly with what we believe is Cusco's major argument.
62
Cusco apparently claims the Sales Agents Agreement constituted an unreasonable restraint of trade because it imposed certain vertical restraints on Cusco to the detriment of Cusco and competing pvc pipe manufacturers. Cusco does not focus on any one element of the contract but alleges that the combination of the three year term, Certain-teed's right of first refusal for quotations submitted to contractors, and Certain-teed's authority to approve prices for bids submitted through Cusco, resulted in substantially reduced competition in the Midwest rural water market.
63
We begin our analysis by recognizing that the propriety of these alleged vertical restraints under the Sherman Act must be determined according to a "rule of reason" analysis. Continental T. V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 49, 97 S.Ct. 2549, 2557, 53 L.Ed.2d 568 (1977).22 With this test in mind, we agree with the district court that Cusco failed to demonstrate that the Sales Agents Agreement unreasonably foreclosed competition from a substantial portion of the relevant market.
64
We begin with a brief look at the rural water market. According to Cusco's own admissions, the rural water market was, and still is, a highly competitive market consisting of several major manufacturers, numerous smaller pipe producers, numerous independent and manufacturer-controlled sales agents, and countless contractor customers. Cusco's role, prior to 1975, was that of a relatively successful middleman: it acted as a distributor or agent for the distribution of Robintech's pvc pipe and Certain-teed's a/c pipe. After the effective date of the Sales Agents Agreement, Cusco became an agent primarily for Certain-teed. Cusco, for several years, had sold about 25% of the pvc pipe used in the rural water market.
65
Cusco's arguments about foreclosure of this 25% market share are confusing. On the one hand, Cusco claims that as a result of the Sales Agents Agreement, Certain-teed's competitor-manufacturers were foreclosed from this 25% of the market allegedly held by Cusco. This apparently was so because Cusco had a number of loyal customers who relied solely on Cusco to provide competitive quotations and, ultimately, pipe. Thus, Cusco argues, the shift by Cusco to Certain-teed foreclosed these customer contacts. We cannot agree with Cusco's logic.
66
First, prior to the Certain-teed Sales Agents Agreement, Cusco distributed only Robintech pvc pipe. The Sales Agents Agreement merely was a shift by Cusco from one manufacturer to another. Accepting for the moment Cusco's argument about foreclosure, other manufacturers were foreclosed from Cusco's loyal customer contacts under either agreement. And, more importantly, we do not see that the agreement itself foreclosed any competition in the rural water market. All pipe manufacturers and contractors were free to deal with one another. Any "foreclosure" with respect to contractors loyal to Cusco resulted from Cusco's sales ability, not from the Sales Agents Agreement with Certain-teed.
67
Second, Cusco's evidence regarding diminished sales of pipe following Certain-teed's price increase undermines any argument claiming that the Sales Agents Agreement effectively foreclosed other manufacturers from a substantial portion of the market. We assume Cusco's and Certain-teed's diminished market shares following the price increases were the result of increased sales by other manufacturers. Thus, we conclude that the Agreement did not unreasonably foreclose any competing manufacturers of pipe.
68
On the other hand, Cusco apparently asserts that under the Sales Agents Agreement it was unreasonably foreclosed from a substantial portion of the market. We cannot agree. The Sales Agents Agreement established Cusco as the agent for Certain-teed. Certain-teed's retention of pricing authority is a reasonable requirement of an agency distribution system. The relative exclusivity of the agreement Cusco was free to quote competing manufacturers' prices only after Certain-teed refused to act is not unreasonable. We conclude that Cusco failed to prove any substantial foreclosure resulting from the Sales Agents Agreement.
69
In our opinion, Cusco's real problem was not the Sales Agents Agreement, but was the shifting nature of the pipe business in the rural water market. The 1973 oil shortage caused a shake-up in the pipe business. Depressed profits forced pipe manufacturers to streamline their distribution techniques in order to maintain acceptable profit levels. Certain-teed sought to survive by altering its agency relationship and by allying itself with Cusco and its sales strength. Unfortunately, market forces did not allow this marriage to thrive. By the time the Cusco Certain-teed relation had ended, other manufacturers had shifted their distribution systems into direct sales. Consequently, there was little need for Cusco's middleman capabilities. Thus, the problems Cusco encountered were more a matter of economic reality than of antitrust violations.
70
For all of the foregoing reasons, we hold that Cusco failed to establish a prima facie case for violation of Section 1 of the Sherman Act. Consequently, the district court's directed verdict as to the antitrust counts was proper.
III
71
The breach of contract count and fraud count were submitted to the jury with a general verdict form. That form required the jury to set forth, 1) the amount of compensatory damages due to Cusco if the jury found that Certain-teed had committed either violation alleged, and 2) the amount of punitive damages, if any, if the jury found that Certain-teed had committed fraud. Since the jury awarded punitive damages, we assume they concluded that Certain-teed had committed fraud. Although we have no way of knowing for sure, we assume, for purposes of this opinion, that the jury found for Cusco on the breach of contract count as well.
72
Both parties appeal from the jury verdict awarding Cusco damages totalling approximately $9.7 million dollars on the fraud and breach of contract claims. Cusco argues that the damages award is insufficient. Certain-teed argues that any finding of liability is erroneous as a matter of law, or, in the alternative, that prejudicial errors of the trial court require a new trial. Surprisingly, both parties present meritorious arguments which require us to vacate the judgment and remand the controversy for a new trial.A
73
Cusco's breach of contract claim, as submitted to the jury, is twofold: 1) that Certain-teed breached the oral condition of the Sales Agents Agreement that Certain-teed would keep Cusco "competitive" in the rural water market, and 2) that Certain-teed breached the implied obligation to deal fairly and in good faith with Cusco.
74
Certain-teed argued below, and renews that argument here, that the Pennsylvania parol evidence rule23 precludes admission of any testimony aimed at varying, modifying, or adding to the written, integrated Sales Agents Agreement freely negotiated and executed by the parties. The district court initially agreed with Certain-teed's position and instructed the jury that the testimony of Lance and others regarding the alleged oral representations by Certain-teed officials during negotiations which culminated in the Sales Agents Agreement were to be disregarded for purposes of the breach of contract action. The court instructed the jury to consider the testimony only for purposes of the fraud and antitrust counts. But, when submitting the case to the jury, the district court reversed its position. It ruled that such oral representations could be considered by the jury for the contract claim. We believe the district court incorrectly applied the complex and confusing Pennsylvania parol evidence rule with respect to the breach of contract count.
75
Although the Pennsylvania parol evidence rule is somewhat unclear, Pennsylvania courts consistently have applied the rule in breach of contract actions to preclude admission of testimony aimed at altering integrated written contracts freely negotiated by the parties. In Bardwell v. Willis Co., Inc., 375 Pa. 503, 100 A.2d 102, 104 (1953), the Pennsylvania Supreme Court explained the role of the parol evidence rule as follows:
76
Where the alleged prior or contemporaneous oral representations or agreements concern a subject which is specifically dealt with in the written contract, and the written contract covers or purports to cover the entire agreement of the parties, the law is now clearly and well settled that in the absence of fraud, accident or mistake the alleged oral representations or agreements are merged in or superseded by the subsequent written contract, and parol evidence to vary, modify or supersede the written contract is inadmissible in evidence.
77
(footnote omitted)
78
The Court emphasized that the rule could not be avoided by a mere allegation that the prior oral representation was fraudulently made. Rather, the Court held that "(f)raudulent misrepresentations may be proved to modify or avoid a written contract if it is averred and proved that they were omitted from the (complete) written contract by fraud, accident or mistake." Id. (emphasis in original).
79
The Pennsylvania Supreme Court consistently has followed the rule announced in Bardwell. See Nicolella v. Palmer, 432 Pa. 502, 248 A.2d 20, 22-23 (1968); McWilliams v. McCabe, 406 Pa. 644, 179 A.2d 222, 228-29 (1962); Sokoloff v. Strich, 404 Pa. 343, 172 A.2d 302, 305-06 (1961); Penn-Allen Broadcasting Co. v. Traylor, 389 Pa. 490, 133 A.2d 528, 532-33 (1957); see also, National Cash Register Co. v. Modern Transfer Co., Inc., 224 Pa.Super. 138, 302 A.2d 486, 488 (Super.Ct.1973).24
80
Cusco does not allege,25 and the evidence certainly does not support, indeed, it contradicts, any finding that Certain-teed's alleged oral representation to quote Cusco competitive prices within one or two percentage points of the prevailing market price was excluded from the Sales Agents Agreement as a result of fraud, accident, or mistake. At the outset, we are confronted by the explicit provision of the written agreement stating that the agreement represents the entire agreement of the parties and that all other representations, inducements, promises, or agreements not contained therein are of no force or effect. Furthermore, the provisions of the agreement granting Certain-teed exclusive control over pricing, with no reference to market prices, clearly are contrary to the alleged oral representation limiting Certain-teed to competitive prices determined by market forces.
81
Finally, the Cusco Sales Agents Agreement was not a form contract forced upon Cusco. It was carefully negotiated between Lance, the president of Cusco, and various key Certain-teed officials over the course of two months in 1975. Drafts of the agreement were reviewed by Lance and by Potter, Cusco's attorney. Certain amendments suggested by Cusco were incorporated into the final agreement, but Cusco took no exception to the pricing provisions. These provisions clearly do not limit Certain-teed to the pricing restrictions contained in the alleged oral representations.
82
Cusco argues in its Reply Brief that testimony regarding the alleged prior oral representations is admissible under an exception to the Pennsylvania parol evidence rule for testimony necessary to explain the terms of a written agreement. Cusco relies on Consolidated Tile and Slating Co. v. Fox, 410 Pa. 336, 189 A.2d 228, 230 (1963), which held that "if the language of a contract is ambiguous, parol testimony is admissible to aid in its construction." But the other cases Cusco cites in support of its argument are the very cases that compel us to reject its argument. Both Dunn v. Orloff, 420 Pa. 492, 218 A.2d 314 (1966), and United Refining Co. v. Jenkins, 410 Pa. 126, 189 A.2d 574, 578-79 (1963), held that parol evidence of prior representations is admissible to explain or modify a written agreement only in limited situations. Such testimony is admissible 1) where it is clearly demonstrated that the agreement "was not intended to and did not properly state the entire agreement between the parties," Dunn, 218 A.2d at 316, or 2) where the prior oral representation was excluded from the written agreement because of fraud, accident, or mistake.
83
In the present case, the Sales Agents Agreement, on its face, is clear and complete. Cusco cannot, under the guise of interpreting the pricing provisions, seek to alter drastically the written contract.26 Second, there is no evidence that the Sales Agents Agreement was not intended to or does not represent the complete agreement of the parties.
84
For the above reasons, we hold that the district court erroneously admitted testimony aimed at establishing the alleged oral representation as a part of the written, integrated contract freely and fairly negotiated and executed by the parties. Our holding requires us to vacate the judgment below with respect to the contract count. But, we hold that the breach of contract claim, on remand, may be submitted to the jury solely on the issue of Certain-teed's possible breach of its implied obligation to deal with Cusco fairly and in good faith.
B
85
Certain-teed attacks on several grounds the jury finding of fraud. Cusco's fraud count, as submitted to the jury, alleged that Certain-teed had falsely and fraudulently misrepresented that it would quote competitive prices to Cusco. Certain-teed argues, first, that as a matter of Pennsylvania law, fraud cannot be premised on, what it characterizes as, a mere broken promise of future conduct.27
86
We agree that Pennsylvania law does not recognize a cause of action for fraud stemming from a misrepresentation of future intentions. Pennsylvania law requires that fraud consist of a misrepresentation of a past or existing fact. See Sokoloff v. Strich, 404 Pa. 343, 172 A.2d 302, 304 (1961); Neale v. American Motorists Fire Ins. Co., 185 Pa.Super. 60, 138 A.2d 290, 291 (1958); American Empire Ins. Co. v. Hanover Nat'l Bank of Wilkes Barre, 409 F.Supp. 459, 465 (M.D.Pa.), affd without op., 556 F.2d 564 (3d Cir. 1976). But, we do not read Pennsylvania law as an absolute bar to Cusco's fraud claim. Recent Pennsylvania decisions have held that a misrepresentation of future conduct or intention, if false when made, is a misrepresentation of an existing fact. Brentwater Homes, Inc. v. Weibley, 471 Pa. 17, 369 A.2d 1172, 1175 (Pa.1977); College Watercolor Group, Inc. v. William H. Newbauer, Inc., 468 Pa. 103, 360 A.2d 200, 206 (1976).
87
Cusco alleges that at the time Certain-teed made the oral representation to provide Cusco with competitive prices, Certain-teed had no intention of doing so. The testimony of Krivsky, and implications drawn from various Certain-teed internal planning documents, indicates that at the time Certain-teed was negotiating, the Sales Agents Agreement, Certain-teed intended to pursue a policy of higher prices and shifting distribution patterns, with a potentially damaging effect on Cusco and other agents. In light of this evidence we cannot rule that, as a matter of law, Cusco is precluded from asserting a cause of action for fraudulent misrepresentation.
88
Certain-teed contends, as its second argument, that the Pennsylvania parol evidence rule precludes admission of testimony regarding the alleged oral representation since that representation is explicitly denied force and effect under the integration clause of the Sales Agents Agreement. Although the Pennsylvania law is less than clear,28 our research indicates that Pennsylvania courts do not hold the parol evidence rule to bar introduction of evidence that a contract was fraudulently induced. See Rempel v. Nationwide Life Ins. Co., Inc., 471 Pa. 404, 370 A.2d 366, 370 (1977); Nat'l Bldg. Leasing, Inc. v. Byler, 252 Pa.Super. 370, 381 A.2d 963, 965 (Pa.Super.1977). See also Miller v. Bare, 457 F.Supp. 1359, 1365 (W.D.Pa.1978). The district court correctly admitted Lance's testimony regarding the alleged oral representations, but the testimony should be limited solely to the fraud action.
89
Certain-teed next argues that, even if this testimony is not barred by the parol evidence rule and is a misrepresentation upon which a fraud claim may rest, Cusco failed to carry its burden of proof. Pennsylvania law requires that one asserting fraud present evidence of the fraud that is "clear, precise and convincing." Brentwater Homes, Inc. v. Weibley, 471 Pa. 17, 369 A.2d 1172 (1977). It is also true that the determination of whether the evidence satisfies this threshold test is a question of law for the court. Highmont Music Corp. v. J. M. Hoffmann Co., 397 Pa. 345, 155 A.2d 363, 366 (1959); Greenwood v. Kadoich, 239 Pa.Super. 372, 357 A.2d 604, 606 (Pa.Super.1976).
90
We are satisfied that Cusco met the "clear, precise, and convincing" threshold burden, thus justifying submission of the fraud claim to the jury. Lance testified that during negotiations leading to the execution of the Sales Agents Agreement, and immediately thereafter, Certain-teed officials repeatedly assured him that Certain-teed would provide Cusco with competitive prices for pvc pipe. Cusco also introduced Certain-teed's internal documents concerning the acquisition of Cusco. These documents indicate that, at the time the Cusco contract was negotiated, Certain-teed contemplated a major shift in marketing strategy that would result in a transition to direct sales, obviously at the expense of Cusco and other agents. Krivsky testified that during 1975, Certain-teed contemplated a major program of price increases. He also claimed that he discussed this possibility with Lance during their negotiations. We believe the evidence indicating possible fraud is sufficiently specific to raise a jury question as to the true nature of Certain-teed's representations and motives. There was sufficient proof indicating fraud that submission of the controversy to the jury for their resolution of the conflicting claims and testimony was appropriate.
91
Finally, Certain-teed argues that the jury finding of fraud must be reversed because Cusco failed to establish that a person of ordinary prudence would have relied upon the alleged fraudulent oral representation. Certain-teed urges us to hold that, as a matter of law, it is unreasonable for any party to rely upon a prior oral representation when that party subsequently executes a negotiated written contract containing different representations and an integration clause disavowing any prior representation not incorporated in the written agreement. But, we believe that the reasonableness of Cusco's reliance is best decided by the jury which can weigh the various relevant factors such as: the prior relations of the parties, the frequency and nature of the representations, the conflict between the representations and the contract provisions, and the custom within the trade.
C
92
The final argument we must confront is Certain-teed's contention that the district court improperly excluded from evidence portions of Cusco's original complaint which are relevant to both the breach of contract and fraud claims. Certain-teed attempted, at three points during the trial, to introduce into evidence a portion of Cusco's original complaint which stated that:
93
(T)he Defendant, in order to establish a market with the sales territory dominated by Plaintiff, induced Plaintiff to enter into an exclusive Sales Agency Agreement with the Defendant by fraudulently misrepresenting to the Plaintiff that the Defendant would grant to the Plaintiff an exclusive sales territory and maintain the plaintiff on the same status as other agents and distributors of the Defendant regarding price availability of materials, etc.
94
(emphasis added)
95
Certain-teed claims that this portion of the original, but superseded, complaint should have been admitted as relevant evidence. Certain-teed argues that, if admitted, this evidence would have enabled Certain-teed to refute Cusco's claim, stated in its final complaint, that Certain-teed induced Cusco to execute the Sales Agents Agreement by fraudulently representing that Certain-teed would keep Cusco "competitive with his contractor-customers in the rural water market." Certain-teed also contends that this evidence is relevant to contest Lance's interpretation of the alleged "keep competitive" representation.29
96
Cusco claims that no evidence was admitted at trial to dispute Lance's testimony, and, therefore, "even if the first pleading was inconsistent with the latter amended pleadings and did constitute an admission, any error in its refusal was harmless." Cusco Reply Brief at 55. Cusco further claims that only material admissions of fact from superseded pleadings are admissible. Cusco argues that here we have only an omission of the "keep competitive" language in the original complaint and not an inconsistent statement. The district court, however, apparently found some inconsistency:
97
Now a representation that he would be treated the same as other agents is different and inconsistent with evidence or testimony that he would be kept competitive.
98
Tr. IX at 13-14. Yet the court concluded that "the prior pleading is not an admission and the exhibit is refused admission into evidence." Tr. IX at 14. Thus, it appears the district court concluded that, despite the inconsistencies between the pleadings, superseded pleadings are inadmissible. This is incorrect as a matter of law, and, for the reasons explained below, constitutes reversible error.
99
Although prior pleadings cease to be conclusive judicial admissions, they are admissible in a civil action as evidentiary admissions. McCormick, Handbook of the Law of Evidence 633-34 (2d ed. 1974). As noted in Raulie v. United States, 400 F.2d 487, 526 (10th Cir. 1968), quoting Kunglig Jarnvagsstyrelsen v. Dexter & Carpenter, 32 F.2d 195, 198 (2d Cir.), cert. denied, 280 U.S. 579, 50 S.Ct. 32, 74 L.Ed. 629 (1929):
100
When a pleading is amended or withdrawn, the superseded portion ceases to be a conclusive judicial admission; but it still remains as a statement once seriously made by an authorized agent, and as such it is competent evidence of the facts stated, though controvertible, like any other extrajudicial admission made by a party or his agent.
101
This court recently held that it was not error for a trial court to allow introduction of portions of the plaintiff's original complaint. Davis v. Freels, 583 F.2d 337, 342 (7th Cir. 1978) ("for the purpose of impeaching Davis' credibility, Freels could properly rely on material admissions by Davis in this original complaint"). The rule of admissibility of a prior pleading was explained more fully by this court in Nisbet v. Van Tuyl, 224 F.2d 66 (7th Cir. 1955). The Nisbet court ruled that, although a prior complaint was not to be considered upon a motion for summary judgment, it would have been admissible at trial had there been a trial.30
102
Cusco argues on the basis of Davis and Nisbet that only "material" admissions of fact in superseded pleadings are admissible in evidence. Cusco argues that here we have only an admission by omission in an unverified complaint, and, therefore, not a material admission. We agree, however, with the district court. There happens to be an inconsistency between the affirmative representation in the original complaint, that Certain-teed promised to treat Cusco the same as other Certain-teed agents, and the claim in the final complaint, that Certain-teed promised to keep Cusco "competitive" in the rural water market. Perhaps Cusco can explain away the inconsistency; but that is a matter for trial, not a reason to exclude the evidence. Similarly, the fact that the original complaint is unverified goes to the weight rather than the admissibility of the original complaint.31
103
Next, Cusco argues that admissions contained in prior pleadings cannot be considered "material" unless supported by other factual evidence. According to Cusco, there is no other evidence that conflicts with Lance's trial testimony and the Second Amended Complaint characterization. But, we conclude that there is a genuine evidentiary dispute over the content and meaning of the representations allegedly made by Certain-teed. And, we find that whether Certain-teed promised to keep Cusco "competitive" in the rural water market or only promised to treat Cusco the same as other agents was critical to Cusco's fraud claim.
104
Introduction of the prior complaint is an understandable and legitimate means of impeaching Lance's testimony. Cusco cannot claim that the admission in the original complaint is not material in light of Cusco's heavy reliance on the alleged "keep competitive" promise. Cusco may well be able to explain why the alleged representations were characterized in such different terms. But, Certain-teed should be permitted to introduce this portion of the prior pleading and put Cusco to the task of explaining the inconsistency.
105
The district court's refusal to allow introduction of this portion of the original complaint cannot be characterized as harmless error under Rule 103 of the Federal Rules of Evidence. The true characterization of Certain-teed's representations was critical to Cusco's fraud claim. The apparent conflict in Cusco's complaints is material and significant. The exclusion was prejudicial and reversible error.
IV
106
The parties present several additional issues for review32 that, in light of our disposition of this case, we need not reach. Consequently, we affirm the district court's directed verdict as to the antitrust counts; we vacate the judgment on the contract and fraud claims; and we remand this case for proceedings consistent with this opinion.
107
Affirmed In Part; Reversed And Remanded In Part.
1
During the course of the litigation Certain-teed Products Corporation changed its name to Certain-teed Corporation
2
Shortly before Cusco entered negotiations with Certain-teed, Robintech secretly hired one of Cusco's best sales people and reduced Cusco's sales area from eight states to five states. Lance was to receive a reduced commission from Robintech on sales by his former salesperson within the three states lost. Other reasons for leaving Robintech apparently included Robintech's failure to provide an adequate field support staff and Cusco's and its customers' continued concerns about the quality of Robintech's pvc pipe
3
The meaning and significance of this "keep competitive" representation is hotly disputed by the parties and constitutes the primary issue in this case. It is dealt with in more detail in subsequent portions of this opinion
4
Cusco ascribes a very different and sinister motive to Certain-teed's price increase. Cusco alleges that it was a deliberate act aimed at eliminating Cusco from the rural water market
5
During the preliminary stages of this lawsuit the parties agreed to dismiss Certain-teed's counterclaims alleging Cusco's improper withholding of monies due Certain-teed and Cusco's tortious interference with Certain-teed's contractual and business relations with its customers
6
Certain-teed asserts in this appeal that the jury verdict of 9.7 million dollars somehow is tainted by the failures of Judge Ackerman and Judge Baker to grant Certain-teed's pre-trial motions for summary judgment on the antitrust counts. Certain-teed claims that the confusion created by Cusco's myriad antitrust claims and the testimony of Dr. Kormendi concerning antitrust damages (an estimate of approximately 9.7 million dollars) which subsequently was excluded, taints the jury award
This court, in Lupia v. Stella D'Oro Biscuit Co., Inc., 586 F.2d 1163, 1166-67 (7th Cir. 1978), cert. denied, 440 U.S. 982, 99 S.Ct. 1791, 60 L.Ed.2d 242 (1979), stated that summary judgment in antitrust cases is permissible and sometimes desirable in order to minimize the possibility of vexatious litigation leading to costly and timeconsuming discovery and trial or to coercive settlements. Lupia, however, did not involve a claim that the presence of questionable antitrust claims unfairly prejudiced the defense of remaining claims. In light of our disposition of other matters justifying a new trial on the contract and fraud claims, we decline this opportunity to expand upon our comments in Lupia.
7
Cusco states that this is a case involving Sections 1 and 2 of the Sherman Act. Cusco's Second Amended Complaint, as amended, can be read in Counts III and IV as alleging conspiracies to monopolize in violation of Section 2. But, Cusco's arguments on appeal present issues limited solely to the sufficiency of the evidence to establish a jury question as to possible Section 1 violations, specifically a contract in restraint of trade and a conspiracy to restrain trade. Moreover, Cusco's pleadings, proof, and argument fall far short of establishing the prerequisites of a Section 2 violation. Consequently, we address only the Section 1 claim and consider all other possible antitrust claims to be resolved by the district court's directed verdict
8
Cusco has gone to great lengths detailing the course of conduct between the parties, but has experienced great difficulty in fitting that conduct into the structure of a Section 1 violation. Cusco's prime failure in its argument seeking to overturn Judge Baker's directed verdict is its inability, even before this Court, to put forth any consistent and coherent theory of the antitrust laws that, supported by the record we have before us, entitles it to relief
9
The court's conclusion that such conduct constitutes a per se violation of § 1 was not the ultimate holding of the case, since the court affirmed the jury verdict for the defendant on the ground that even if such conduct could constitute a per se violation, the jury had been adequately instructed to that effect and its verdict for the defendant would not be upset. But, although a decision as to the validity of the antitrust theory advanced in Alloy International was not essential to the court's holding, the court forcefully stated its acceptance of the theory. Alloy International Co. v. Hoover-NSK Bearing Co., 635 F.2d at 1225, 1980-1 Trade Cases P 63,148 at 77,708 n.5 (7th Cir. 1980)
The Alloy International court relied primarily upon the Third Circuit's opinion in Cernuto, Inc. v. United Cabinet Corp., 595 F.2d 164 (3d Cir. 1979), which held that:
If Cernuto (the terminated distributor) can prove at trial that United (the manufacturer), Lappin (United's sales representative) and Famous (Cernuto's competitor) conspired to protect Famous from price competition by Cernuto, and that United and Lappin terminated Cernuto at Famous's request and in pursuit of a price related end, then it can prevail on a price-fixing theory notwithstanding its failure to show any impact on competition ....
595 F.2d at 170.
Because we find that Cusco has failed to show any unlawful agreement or termination, we again need not reach the merits of the alleged per se theory. But, once again, we accept the theory as more fully articulated in Alloy International, and Cernuto, and hold that a per se violation of § 1 may be established upon proof that a manufacturer terminates its relationship with an existing dealer/distributor/agent if: (1) the termination is at the request of a competing dealer/distributor/agent and, (2) the termination is motivated by a desire to reduce or eliminate price competition for its products.
10
In early 1977, Lance learned that Hayes was purchasing pvc pipe from Certain-teed on terms and conditions previously unavailable to Cusco. Evidently, rather than using Hayes as a normal agent for distribution of pipe, Certain-teed had agreed to sell a large quantity of pipe directly to Hayes at prices below those quoted to Cusco, and with the provision that Hayes take delivery of the pipe at a nearby Certain-teed plant. Upon learning of this arrangement, Lance asked Certain-teed to sell pipe to Cusco at similar prices and conditions. Certain-teed refused to do so, claiming the Hayes prices were too low and were unauthorized
11
Cusco claims that the higher quotations provided to it were due to Certain-teed's covert decision to add 10% to all market quotations provided Cusco in order to compensate for the 10% commission Cusco was entitled to under the Sales Agents Agreement
12
Certain-teed concedes that on 7 of over 200 jobs bid by Cusco discriminatory pricing did occur
13
After carefully reviewing the records concerning the alleged dual pricing incidents, we find that the evidence did not establish a pattern or practice of discriminatory pricing
14
Cusco's failure to establish the requisite concerted action negates any need for this Court to determine whether the actions Cusco challenges are indeed unlawfully anti-competitive
15
Cusco claims that Certain-teed's reliance on Hayes in Tennessee became improper because Certain-teed was contemplating a switch in marketing strategies to direct manufacturer sales. Without concluding that Certain-teed was so motivated, we note that a manufacturer's decision to change a distribution system is not, by itself, prohibited by the Sherman Act. Fuchs Sugars & Syrups, Inc. v. Amstar Corp., 602 F.2d 1025, 1030 (2d Cir.), cert. denied, 444 U.S. 917, 100 S.Ct. 232, 62 L.Ed.2d 172 (1979)
16
Cusco argues that the district court improperly excluded testimony by Lloyd Kizzire, a Cusco salesperson in Tennessee, that would have revealed the conspiratorial connection between Hayes and Certain-teed. In an offer of proof without the jury present, Kizzire testified that at a bid letting in Tennessee during May, 1976, Jinx Hayes of Hayes stated, in response to an inquiry about pipe prices, that Hayes already knew what Cusco's prices were
The district court ruled that the proffered testimony was inadmissible hearsay and that Cusco failed to satisfy the co-conspirator exception of Rule 801(d)(2) (E) of the Federal Rules of Evidence. We agree with the district court's ruling. In order for hearsay statements to be admissible under Rule 801(d)(2) (E), there must be independent evidence of the existence of a conspiracy. United States v. Santiago, 582 F.2d 1128 (7th Cir. 1978). Cusco argues that the Birch memorandum and the testimony regarding preferential prices were sufficient evidence of an ongoing relationship with anti-competitive aims. But, as the foregoing discussion in the text above holds, Cusco's alleged proof of a conspiracy is simply inadequate, even for purposes of admitting this testimony under Rule 801(d)(2)(E).
17
Cusco relies heavily upon the conversation between Eugene Grose and Ralph Gray, where, according to Grose, Gray stated that, "I want to tell you one thing for sure, that it's my goal in life to make sure that he (Lance) doesn't sell any jobs in this area .... We're going to keep him out of this market." Tr. II, at 70. But, Grose's own testimony states that at that time he did not believe Gray
18
Cusco's alleged conspiracy between Certain-teed and its distributors is further undermined by the testimony of Grose that he too found that he could not operate profitably and effectively under a distributorship agreement with Certain-teed. We are hard-pressed to discover an alleged conspiracy between independent distributors and Certain-teed where the purpose and effect of the alleged co-conspirators is to destroy the independent distributors
19
Walker's testimony concerns a Valley Forge meeting with Krivsky in the spring of 1976, arranged by Lance in order to discuss a purchase of resin by Vinylplex from Certain-teed:
We discussed general conditions of the pipe business. We discussed overall general economic conditions. We discussed the growth of the market in pipe. One conversation that I recall specifically was that Mr. Krivsky asked me that since Ron and I were such good friends why I didn't sell more pipe to Mr. Lance or hadn't in the past and I pointed out to him that our marketing approach was different than Certain-teed's, that we tried to market because of my experience in the contracting business I tried to market my pipe direct to the contractor in as many cases as we could. And that we did sell some pipe to distributors but it was generally where the distributor stocked the pipe rather than acted as an agent. And that I didn't feel like we could afford to pay being a small company, pay the commissions that the large pipe producers such as Certain-teed and J-M were paying to distributors and agents and that was primarily why we took another marketing approach. And I recall that Mr. Krivsky told me at the time that this was one of the things that he felt like they had to change in their business and that Mr. Lance, although he was an agent and a distributor for Certain-teed, was not good for the business because he dominated the market in terms of customers and that Certain-Teed was forced to pay him a commission that they felt like they could not afford and Mr. Krivsky informed me that it was his intention to eliminate Contractor Utility Sales from the pipe business and that they would go direct.
Trans. Vol. V, at 109-10.
20
The possibility that the Walker-Krivsky conversation is a conspiratorial meeting is seriously diminished when one considers that Walker and Lance were very good friends and that Lance personally arranged this meeting
21
An additional difficulty with Cusco's argument is that the refusals by competing pipe manufacturers to sell through Cusco on a regular basis occurred only after the Certain-teed arrangement collapsed. Thus, the subsequent refusals to deal are only remotely relevant to the alleged actions by Certain-teed. Furthermore, we find the subsequent refusals to deal with Cusco were independent business decisions of manufacturers seeking to reduce their selling costs by shifting to direct sales in, what the plaintiff concedes is, a highly competitive market. A volatile and competitive market such as the rural water market inevitably engenders changes, with winners and losers. The losers must prove more than just their loss in order to secure relief under the antitrust laws. See Fuchs Sugars, 602 F.2d at 1030
22
The scope of our inquiry is best described in the words of Justice Brandeis in Chicago Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 244, 62 L.Ed. 683 (1918):
The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. To determine that question the court must ordinarily consider the facts peculiar to the business to which the restraint is applied; its condition before and after the restraint was imposed; the nature of the restraint and its effect, actual or probable. The history of the restraint, the evil believed to exist, the reason for adopting the particular remedy, the purpose or end sought to be attained, are all relevant facts. This is not because a good intention will save an otherwise objectionable regulation or the reverse; but because knowledge of intent may help the court to interpret facts and to predict consequences.
23
The parties agree, and the court below found, that Pennsylvania's law controls the contract and fraud claims
24
Federal courts applying Pennsylvania law similarly have refused admission of testimony to modify integrated written contracts in the absence of proof that the prior oral representation was omitted from the written contract by fraud, accident, or mistake. See e. g., Levin v. Garfinkle, 492 F.Supp. 781 (E.D.Pa.1980); American Empire Ins. Co. v. Hanover Nat'l Bank of Wilkes Barre, 409 F.Supp. 459, 465 (M.D.Pa.), affd. without op., 556 F.2d 564 (3d Cir. 1976)
25
We note that any such allegation that the oral representation was fraudulently excluded from the subsequent written contract must be proven by clear, precise, and convincing evidence. Brentwater Homes, Inc. v. Weibley, 471 Pa. 17, 369 A.2d 1172 (1977)
26
We agree with Cusco that under Atlantic Richfield Co. v. Razumic, 480 Pa. 366, 390 A.2d 736, 740-41 (1978), evidence of the parties' course of performance is admissible to assist the trier of fact in interpreting a written agreement. But, the testimony concerning the prior oral representations is not comparable to testimony regarding a course of performance and is not admissible on that ground either
27
The elements of a claim of fraud are: 1) the defendant made a false representation of a material past or existing fact, 2) the defendant knew the representation was false, 3) the plaintiff justifiably relied on the misrepresentation, and 4) the plaintiff suffered injury as a result of this reliance on the misrepresentation. Thomas v. Seaman, 451 Pa. 347, 304 A.2d 134, 137 (1973); Glanski v. Ervine, --- Pa.Super. ---, 409 A.2d 425, 430 (1979)
28
The confusing and evolving nature of the Pennsylvania parol evidence rule is analyzed carefully and intelligently in several recent opinions of the Superior Court of Pennsylvania. See Glanski v. Ervine, 409 A.2d 425 (Pa.Super.1979); LeDonne v. Kessler, 256 Pa.Super. 280, 389 A.2d 1123 (Pa.Super.1978); and Nat'l Bldg. Leasing, Inc. v. Byler, 252 Pa.Super. 370, 381 A.2d 963 (Pa.Super.1977)
29
Lance testified that his understanding of the Certain-teed representation was that Certain-teed would quote Cusco prices that were within one or two percent of the market price, regardless of the consequences to Certain-teed or prices quoted to other Certain-teed agents. Certain-teed claims that this is inconsistent with the claim in the original complaint that Cusco would be treated the same as all other Certain-teed agents. In addition, Certain-teed claims that it is relevant that Cusco omitted any mention of the alleged "keep competitive with the market" representation in its original complaint
30
Upon a trial of the issues raised by the pleadings, including the amended complaint, a complaint superseded thereby might well be offered in evidence by the defense if it contains material admissions by the plaintiffs named in the amended complaint. Such evidence would be admissible in order to enable the court to determine the facts upon the issues being tried
Nisbet v. Van Tuyl, 224 F.2d 66, 71 (7th Cir. 1955). See also Loren Specialty Mfg. Co. v. Clark Mfg. Co., 241 F.Supp. 493, 500 (N.D.Ill.1965), aff'd, 360 F.2d 913 (7th Cir.), cert. denied, 385 U.S. 957, 87 S.Ct. 392, 17 L.Ed.2d 303 (1966); Wiseman v. Reposa, 463 F.2d 226, 227 (1st Cir. 1972) ("As a matter of pleading the original complaint had disappeared. As an admission against interest, it had not.").
31
Although the complaint is unverified, there is testimony that Potter prepared the complaint after speaking with Lance, and that Lance personally reviewed the complaint
As stated in Nisbet, 224 F.2d at 71:
Conversely, upon the trial, plaintiffs would be permitted to show by evidence the explanation, if any there be, as to why the facts relied on by defendants as admissions were stated in the amended complaint differently than the way in which they were stated in the original complaint.
32
Cusco argues that the district court improperly excluded the damage projections of plaintiff's expert witness, Dr. Roger Kormendi. On remand, Cusco is free to present expert testimony on damages, and the trial court is obligated to judge the admissibility of that testimony in light of Rules 702-705 of the Federal Rules of Evidence, governing expert testimony. Although the court must decide questions of admissibility, the weight and credibility to be accorded expert testimony is properly left to the jury
Cusco also argues that the trial court improperly failed to instruct the jury to award prejudgment interest on any damages awarded to or adjust past losses to current dollars. Cusco is free to present these arguments to the trial court on remand.
Certain-teed also raises questions regarding proper jury instructions. Certain-teed's argument regarding the burden of proof for establishing an oral condition modifying the written contract is moot in light of our conclusion that the Pennsylvania parol evidence rule precludes admission of any testimony aimed at altering the integrated Sales Agents Agreement.
Certain-teed's remaining argument regarding the correct standard for awarding punitive damages is properly addressed to the trial court on remand.
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391 N.W.2d 519 (1986)
ILLINOIS FARMERS INSURANCE CO., Respondent,
v.
Oliver V. WRIGHT, Appellant.
No. C7-85-872.
Supreme Court of Minnesota.
August 8, 1986.
Rehearing Denied September 11, 1986.
Marlene R. Tschida, James T. Martin, Edina, for appellant.
Eric J. Magnuson, Lewis A. Remele, Jr., Mary C. Cade, Minneapolis, for respondent.
Heard, considered and decided by the court en banc.
WAHL, Justice.
Oliver Wright appeals from an order for partial summary judgment entered in a subrogation action brought by Illinois Farmers Insurance Company to recover $50,000 in uninsured motorist benefits paid to its insured who was injured in a motor vehicle accident with Wright. The trial court granted partial summary judgment, establishing the amount of damages in the subrogation claim at $50,000, on the basis of our decision in State Farm Insurance Companies v. Galajda, 316 N.W.2d 564 (Minn.1982). The court of appeals reversed, distinguishing Galajda and holding *520 that Wright could not be precluded from litigating the damages issue. Illinois Farmers Insurance Co. v. Wright, 377 N.W.2d 41 (Minn.Ct.App.1985). We reverse the decision of the court of appeals and reinstate the order for partial summary judgment of the trial court.
On April 18, 1980, Delores Jean Williams was stopped in a line of traffic on the entrance ramp leading from Highway 494 to Highway 35W southbound. Oliver Wright exited from Highway 35W southbound onto Highway 494 and attempted to merge, but struck the car in line behind Williams, pushing it into the back end of Williams' car. In a deposition taken when Williams began a personal injury action against Wright, Wright claimed a van had cut across two freeway lanes and into his lane, preventing his merger onto Highway 494 and causing the accident. The van did not stop and has not been identified.
Williams claimed uninsured motorist benefits from her insurer, Illinois Farmers, after learning of the unidentified van. Farmers denied coverage and the claim was arbitrated. Wright did not participate in the arbitration hearing, but his attorney had been advised of the proceeding and permitted Farmers to use an adverse medical examination Wright had obtained in preparing to defend against Williams' personal injury action. Farmers disputed the existence of the van and the extent of Williams' claim of injury and damages at the arbitration hearing. The arbitration panel found that Williams had been injured in the accident and awarded her $60,000 in damages. Negligence in the accident was apportioned in the following percentages: Oliver Wright 99 percent; the unidentified van 1 percent.
Farmers paid Williams $50,000 in benefits, the limit of her uninsured motorist coverage, pursuant to the arbitration award. In return, Williams signed a release and trust agreement in which she agreed to pursue an action against Wright and to hold in trust for Farmers any monies recovered as a result of judgment or settlement. Farmers joined Williams' personal injury action against Wright to pursue its subrogation claim. Shortly thereafter, Williams settled her liability claim with Wright for $7,500. Farmers then moved to have the amount of damages in the subrogation claim that remained established as a matter of law at $50,000. The trial court granted the motion and ordered partial summary judgment entered on the issue of damages.
The issue directly presented in this appeal is whether an insurer must prove the total amount of its insured's damages in a subrogation action against the alleged tortfeasor where, following payment of uninsured motorist benefits, the insured separately settles the liability claim with the alleged tortfeasor and the alleged tortfeasor relied in negotiating the settlement with the insured upon the amount of benefits that had already been paid. The trial court, relying on our decision in State Farm Insurance Companies v. Galajda, 316 N.W.2d 564 (Minn.1982), did not require proof of the total amount of the insured's damages. Does Galadja control, as the trial court held, or is it distinguishable, as the court of appeals held? Marian Galajda collected $50,000 in uninsured motorist benefits from her insurer, State Farm Insurance Companies, after her husband was killed in a hit-and-run automobile accident. In return, she signed a release and trust agreement that required her to assign the proceeds of any settlement to State Farm and not to make any settlement without the company's consent. Id. at 565. When the police identified the driver of the hit-and-run vehicle, Mrs. Galajda brought a wrongful death action against the driver and the owner of the car on behalf of herself and her four minor children. Before trial, Mrs. Galajda settled her liability claim against the driver for $67,500 and signed a settlement agreement that specifically preserved State Farm's subrogation rights. State Farm subsequently brought an action against Mrs. Galajda to recover the $50,000 in uninsured motorist benefits it had paid, arguing that its subrogation interest had been wrongfully excluded from the settlement. Id. at 566.
*521 The issue directly presented in Galajda was whether a recipient of uninsured motorist benefits could settle a liability claim separately from the subrogation claim of the insurer where the settlement preserved the insurer's subrogation claim, even though the insured had agreed not to enter any settlements not consented to by the insurer. In upholding the settlement, we recognized that subrogation rights are to be permitted "to the extent necessary to avoid a double recovery by . . . a policy-holder." Id. at 568, quoting Milbank Mutual Insurance Co. v. Kluver, 302 Minn. 310, 315-16, 225 N.W.2d 230, 233 (1974). We did not find that Mrs. Galajda had been fully compensated by the $50,000 paid in uninsured motorist benefits, nor that she and her children had been overcompensated for their loss even with the additional $67,000. Id. When it came to the subrogation claim, however, we indicated that State Farm need not prove the total wrongful death damages:
In its wrongful death subrogation claim appellant State Farm will attempt to prove * * * [the identity of the] negligent driver of the hit-and-run vehicle. Must State Farm also prove the total wrongful death damages? We think this unnecessary. If [the alleged driver] is found to be the negligent driver, then Vasil Galajda was not fatally injured by an uninsured motorist, and State Farm has paid $50,000 that should have been paid by [the alleged driver's insurer]. Mrs. Galajda has, in fact, accepted $117,500 as full compensation for her claim; both Mrs. Galajda and [the driver's insurer] have relied on State Farm's $50,000 to make this complete settlement; and both Mrs. Galajda and [the driver's insurer] acknowledge that State Farm has a subrogation claim * * * * In this context, we believe that in the trial of the subrogation claim the amount of the claim, namely $50,000, is established and need not be litigated; the only issues remaining for trial are those of liability. If [the alleged driver] is found to be the negligent driver of the hit-and-run vehicle then State Farm is entitled to reimbursement from [the alleged driver's insurer] in the amount of $50,000.
Id.
The trial court reasoned that fairness in Wright's case dictated, as fairness in Galajda had dictated, that the insurer not be required to relitigate the damages issue at trial. The court of appeals disagreed and held that Wright could not be denied his right to litigate the amount of damages in the subrogation action. Wright, 377 N.W.2d at 44. The effect of the trial court decision, in the opinion of the court of appeals, would be to bind Wright to the award of damages as determined in the arbitration proceeding between Farmers and its insured. To preclude Wright from litigating damages would violate due process, they stated, and could not be justified by any existing principle of collateral estoppel. Id. "In evaluating the parties' due process rights and the fundamental fairness of their positions, we strike a different balance than did the trial court," the court of appeals concluded. Id. at 45.
While the results reached by the trial court and the court of appeals differ, the analyses of both courts recognize that the issue raised by this appeal must be resolved on principles of equity and fairness. One such principle, underlying our decision in Galajda, is that where a tortfeasor, in negotiating a settlement of a liability claim, relies upon the amount the plaintiff's uninsured motorist insurer has already paid in insurance benefits, the tortfeasor should not be allowed to question the reasonableness of damages in a later subrogation action. It is unfair that a tortfeasor should use the amount paid by the insurer to his or her benefit in settling with the plaintiff, and then refuse to accept that amount as a reasonable damages amount in the subsequent subrogation action. Moreover, the insured has a single, indivisible cause of action for damages for personal injury and those damages are measurable by a single standard regardless whether they are payable by one or more tortfeasors or an insured tortfeasor and an insurer required by its contract with the claimant to pay the *522 portion otherwise payable by an uninsured tortfeasor. Therefore, a settlement between a claimant and a tortfeasor of the claimant's damages other than those already compensated by the insurer necessarily is based on a recognition that the parties are settling the damages in excess of those already compensated.
The question then becomes whether Wright relied on Farmers' earlier payment of $50,000 when he settled his liability claim with Williams for $7,500. In Galajda, we found that both Mrs. Galajda and the tortfeasor's insurer, in settling for $67,000, relied on State Farm's $50,000 payment to Mrs. Galajda to make the full, or at least minimally adequate compensation for the wrongful death claim of a surviving spouse and four minor children. Under the facts of the case now before us, we conclude similar reliance has been shown. The arbitration panel found Williams entitled to $60,000 in general damages, an amount very close to the $57,500 for which she eventually settled with Wright. Farmers vigorously contested Williams' claims at the arbitration proceeding, relying in part on evidence Wright had developed in preparing his own anticipated defense against her claims. The close parallel between the amount of the arbitration award and the settlement, recognizing that the arbitration panel was presented with essentially the same evidence Wright would have presented had Williams' claim gone to trial, clearly indicates that Wright relied in negotiating a settlement of the liability claims upon the $50,000 Farmers had already paid Williams in uninsured motorist benefits. Having so relied, our decision in Galajda indicates Wright should not now be allowed to question $50,000 as a reasonable measure of damages in Farmer's subrogation action. Wright's reliance on the arbitration award in negotiating the settlement was a voluntary acknowledgement of the reasonableness of the award, negating any claim now that he was deprived of procedural due process by the trial court decision.[1]
Wright's efforts to distinguish the facts of Galajda from the facts of his case fails. It is true that Galajda involved a single insured tortfeasor, whereas here it is alleged an unidentified van was involved, raising the possibility of muiltiple responsible drivers. This factual distinction is not meaningful, however, because, under the principle of joint and several liability, even if the van would be found partially responsible for the accident, Wright is liable for the whole of Williams' damages. See Maday v. Yellow Taxi Company, 311 N.W.2d 849 (Minn.1981) (joint and several liability applies to an uninsured motorist subrogation action.)[2]
Applying our reasoning in Galajda, we hold that an insurer need not prove the total amount of its insured's damages in a subrogation action against an alleged tortfeasor where, following payment of uninsured motorist benefits, the insured separately settles the liability claim with the alleged tortfeasor and the alleged tortfeasor relies in negotiating the settlement with the insured upon the amount of benefits that has already been paid. The decision of the court of appeals is reversed and the order of the trial court for partial summary judgment is reinstated.
Reversed; decision of the trial court reinstated.
SIMONETT, J., took no part in the consideration or decision of this case.
NOTES
[1] We do not conclude Wright is bound by the arbitrators' decision on a theory of collateral estoppel. Rather, we find the close parallel between the amount of the arbitration award and the settlement to be evidence from which we may infer reliance.
[2] The single-multiple tortfeasor distinction would be meaningful only if it were possible that the uninsured driver, in this case the van would be found 100 percent responsible for the accident. Given the facts of this case, that seems unlikely.
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425 F.Supp. 22 (1977)
SID BERK, INC., Plaintiff,
v.
UNIROYAL, INC., Defendant.
No. 76-1674-(AAH).
United States District Court, C. D. California.
January 3, 1977.
*23 Loeb & Loeb by Robert A. Holtzman (Fulton Brylawsky, J. Michael Cleary, Washington, D.C. and Gerald A. Weinstein, Encino, Cal., on the briefs), having appeared for plaintiff and Harvey E. Bumgardner, Jr., New York City.
Rutan & Tucker by Bruce R. Corbett, Santa Ana, Cal. (Garvin F. Shallenberger, Santa Ana, Cal., and Arthur, Dry & Kalish, New York City, on the briefs), having appeared for defendant.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER ON MOTION FOR A PRELIMINARY INJUNCTION DENYING PRELIMINARY INJUNCTION
HAUK, District Judge.
Plaintiff's motion for a preliminary injunction is denied in its entirety.
Pursuant to Rule 52(a), F.R.Civ.Proc. and Rule 7(a) of the Rules of the United States District Court for the Central District of California, this Court makes the following findings of fact and conclusions of law.
FINDINGS OF FACT
The Parties To The Action
1. Plaintiff, Sid Berk, Inc. ("Berk" hereinafter), a corporation of the State of California having its principal place of business in Los Angeles, California, adopted its present corporate name in or about 1967 and embarked upon the objective of selling dress quality women's high fashion shoes *24 exclusively to leading department stores throughout the nation.
2. According to Berk, it has sold about 500,000 pairs, or approximately 55,000 pairs per year, on the average, of the shoes in question here since this effort was begun. Berk states that the pertinent women's high fashion shoes have been sold through certain department stores and have been advertised in every one of the fifty states of this country. It has never sold golf or other athletic shoes.
3. Berk states that, except for its first year of pertinent sales, its sales have always exceeded $1,000,000 per annum, but admits that the projected retail proceeds of its sales during this era only approximated $12,000,000.
4. The officers of Berk are Sid Berk, president, Seymour Fabrick, vice-president and William Gibson, secretary-treasurer. The sole stockholders of Berk are Sid Berk and Seymour Fabrick.
5. Defendant, Uniroyal, Inc. ("Uniroyal" hereinafter) is a major American corporation (incorporated in New Jersey and having its principal place of business in Middlebury, Connecticut) which is engaged in the manufacture and sale of a wide range of diversified products including a complete line of golf products for golfers, male and female.
6. Over the years, Uniroyal has established a widely recognized position in Royal ® golf products and states that it has expended approximately $20,000,000 in the promotion of the Royal ® line of golf products.
7. Uniroyal's well-known Royal ® line of golf products (including its Royal ® Daisy women's golf shoes) has always been sold exclusively to golf pro-shops and not to department stores.
Berk's Pertinent Trade Practices
8. On July 3, 1967, Berk adopted as a trademark a device consisting of the word "DAISY" in block capital letters with a seven petal fanciful flower design superimposed on the "A" (sometimes hereinafter "the shoe device").
9. Since 1967 and up to the present time the shoe device has appeared stamped in gold on the sock liners of approximately seventy percent of the high fashion shoes sold by Berk. The other shoes sold by Berk have borne diverse trademarks usually related to the customer involved (e. g. "MISS BERGDORF").
10. Berk's shoes bearing the shoe device are packaged in orange boxes having black lids and bearing on the lid the word "DAISY" in white block capital letters with an eight petal white and orange fanciful flower design superimposed on the "A" (hereinafter "the box device"). An eight petal white and black fanciful flower design appears on one end of the Berk box.
11. None of the shoes sold by Berk have ever borne fanciful flower designs except as part of the shoe device on the sockliner.
12. In September, 1967, Berk applied to the Patent Office for registration of the shoe device on the Principal Register.
13. In October, 1967, the Patent Office rejected Berk's application on the ground that the shoe device as applied to ladies' shoes so resembled a prior registered trademark for women's shorts, pants, blouses, skirts, coats and suits as to be likely to cause confusion, mistake or deception. The cited prior mark was a device consisting of the words "Daisy's Originals of Miami" in varying letter form with a fanciful flower design superimposed on the "D".
14. In order to persuade the Patent Office to grant registration Berk argued that:
a. the fanciful flower design of the cited prior mark had a different appearance from the fanciful flower design of Berk's shoe device;
b. the "word DAISY has been registered as a trademark for many classes of goods and has, therefore, acquired no significance in the public mind identifying it with any particular product";
c. the respective devices were used on non-competing goods;
*25 d. the respective marks differed significantly in appearance and sound; and that
e. the respective goods of Berk and the prior registrant were sold in different stores or, at least, in different departments of the same store.
15. Apparently persuaded by these arguments, the Patent Office granted registration to Berk's shoe device (sometimes hereinafter the "registered mark") on February 27, 1968, as Registration No. 845,069. Thereafter, Berk's sock liners bore the ® symbol next to the shoe device. Evidence proffered by Berk indicates that it has continuously used the registered mark on ladies shoes in the United States since 1967. The box device having the eight petal flower design continued to be printed without an ® symbol.
16. On July 20, 1973, Berk's registered mark was accorded incontestability status by the Patent Office.
17. Berk estimates that it has spent in excess of $350,000 over the years to advertise its shoes bearing the registered mark. Virtually all of this advertising has been "cooperative advertising" wherein a customer of Berk independently prepares and runs the advertisement in local newspapers and bills Berk for a percentage of the cost (usually one-half). Provided that the advertisement makes some reference to Berk or uses the word "daisy" somewhere in its copy, Berk pays its share of the cost. For this reason, Berk asserts that the total amount spent on advertising shoes bearing the registered trademark by Berk and its customers has been about $700,000. The only media advertising other than the said newspaper advertising done by Berk has been in trade magazines directed solely to those persons connected with the shoe business.
18. The vast majority of the advertisements presented to this Court by Berk to support its position on this motion prominently identify the illustrated footwear with the name of the store and make reference to the word "daisy" in a comparatively de-emphasized manner.
Uniroyal's Pertinent Trade Practices
19. For many years, and beginning many years prior to plaintiff's obtaining its registered mark, Uniroyal has sold complete lines of golfing equipment for men and for women. Uniroyal's golf equipment lines have included balls, clubs, bags, shoes, rainwear and umbrellas.
20. Uniroyal first registered the trademark "ROYAL" for golf products in 1921 and has used this trademark for golf products continuously ever since. The mark "ROYAL" had been identified with Uniroyal (formerly U.S. Rubber) on other lines of goods at much earlier dates.
21. To golfers, the mark "ROYAL" has always been associated with Uniroyal.
22. As in most of the industry, Uniroyal's women's line of golf equipment until recently was treated as an adjunct to the larger selling men's line. It was scattered throughout Uniroyal's golfing catalog, women's clubs being shown on the last page of men's clubs, women's shoes being shown on the last page of men's shoes, and so on with other items in the women's golf line.
23. In approximately 19701971, a California company called Axaline was selling a brightly colored putter called the "daisy" which was especially designed (in several different colors) to appeal to the woman golfer. Despite sales of some 25,000 putters per year, Axaline had financial difficulties and asked Uniroyal to incorporate the daisy putter into Uniroyal's women's golf line. Uniroyal agreed.
24. In the first year of selling the now ROYAL DAISY putter Uniroyal sold more women's putters than it ever had in any prior year.
25. In 1973 Uniroyal adopted a new merchandising approach with respect to its women's golf line. All Uniroyal women's golf equipment was to be color coordinated in several attractive colors intended to have feminine appeal, the entire women's golf line was gathered together in a separate part of Uniroyal's catalog, an eight petal fanciful flower design was added to each *26 item of the line and the entire line was named ROYAL DAISY after the commercially successful putter.
26. For its newly redesigned and repackaged women's golf line Uniroyal deliberately chose to add the word "daisy" to its famous ROYAL golf trademark because daisy, like the bright feminine colors simultaneously adopted, is a meaningful word in common use which is connotative or suggestive of femininity, lightness, freshness and delicacy. The same approach had worked well in the preceding pilot year for the ROYAL DAISY putter.
27. Uniroyal first presented its complete Royal Daisy women's golf line in its 1974 catalog which was published in September, 1973. The ROYAL DAISY golf line now includes golf balls, golf clubs, putters, golf bags, golf shoes, golf gloves, rainwear, umbrellas and jackets.
28. Uniroyal's ROYAL DAISY golf shoes each feature one or more eight petal fanciful flower design(s) on one or both shoes of a pair. On one model of ROYAL DAISY golf shoes the words "Royal ® Daisy" are stamped in gold on the sock liner of the shoe. On all other models the words "Royal ® Plus" appear instead. All models of ROYAL DAISY golf shoes are sold with tags attached on which the words "Royal ® Daisy" appear.
29. Neither the word "daisy" alone nor the word "daisy" with a fanciful flower design superimposed on any part thereof appears on any ROYAL DAISY golf shoe or any tag attached thereto.
30. The boxes for the entire ROYAL DAISY line of golf equipment all have the same decorative motif and trade identification. The box for ROYAL DAISY golf shoes is typical. It is light green in color with dark green lettering. On the top of the box there are seven white and yellow eight petal fanciful flower designs and the words "Royal ® Daisy". On one end of the box there are five white and yellow eight petal fanciful flower designs, the words "Royal ® Daisy Golf Shoes" and the "UNIROYAL" trademark.
31. Neither the word "daisy" alone nor the word "daisy" in contact with a fanciful flower design appears on the ROYAL DAISY golf shoe boxes.
32. Uniroyal estimates that it has spent approximately $20,000,000 in advertising ROYAL ® golf products of which, the records reflect, in excess of $5,000,000 was spent in the five most recent years. Uniroyal states that it has spent approximately $800,000 in the three most recent years specifically for advertising its ROYAL DAISY line of women's golf products.
33. Uniroyal's advertising for its ROYAL DAISY golf line appears primarily in vertical sports magazines having nationwide circulation (e. g. "Golf Digest"). Although some minor usages of the word daisy alone may appear in the copy of some advertisements, all of the advertisements are quite clearly and prominently directed to the promotion of ROYAL ® DAISY as a trademark for Uniroyal's women's golf line. ROYAL DAISY golf shoes have not been advertised separately. They have always been advertised together with other items of the Royal golf line.
The Controversy Between The Parties
34. In early 1976 Berk first learned of the existence of Uniroyal's ROYAL DAISY golf line (including women's golf shoes). The discovery was made by Mr. Gibson, Berk's secretary-treasurer who is a golfer. Mr. Gibson had received a gift subscription to a golf magazine for Christmas and noticed a ROYAL DAISY advertisement in an early 1976 issue of the magazine. Prior to this lucky accident, Berk had heard nothing of ROYAL DAISY golf shoes through its normal business activities and trade channels.
35. Berk, through its attorneys, wrote to Uniroyal demanding inter alia, that Uniroyal desist from use of the mark ROYAL DAISY on its women's golf shoes and from using eight petal fanciful flower designs on its women's golf shoes and shoe boxes. Uniroyal, by its attorneys, refused to comply. Further correspondence having proved *27 ineffective to resolve the dispute, plaintiff brought this suit on May 25, 1976.
36. The complaint herein charges Uniroyal with infringement of Berk's registered mark, seeks declaratory relief to the effect that Berk has common law trademark rights to the word "daisy" alone and to fanciful flower designs having any number of petals alone, charges Uniroyal with infringement of such common law marks and contains additional counts for false representation of quality of goods, for state unfair competition and for state trademark dilution. The complaint seeks damages and an injunction. The answer denied the material allegations of the complaint and raised numerous affirmative defenses. Uniroyal's counterclaim against Berk seeks declaratory relief, damages and an injunction. Berk has denied the material allegations of the counterclaim.
37. On July 12, 1976, Berk brought this motion for a preliminary injunction against use by Uniroyal of Berk's registered mark, the word "daisy" either alone or in combination with other words or symbols (e.g. "ROYAL DAISY"), or a fanciful multipetaled flower design either alone or in combination with other words or symbols. The use sought to be enjoined included any use connected with the advertising, promotion or sale of women's golf shoes.
38. The moving papers contend that Berk has adequately demonstrated that:
a. Berk will probably succeed on the merits of the action;
b. Berk will suffer irreparable harm pendente lite if the preliminary injunction does not issue; and
c. the balance of the equities between the parties favors issuance of the injunction.
Uniroyal, in its answering papers on the motion, disputes each of Berk's aforementioned contentions and contends additionally that the drastic remedy of a preliminary injunction should be granted only in extraordinary circumstances not present here and that the intended effect of the relief sought by the motion is not to preserve the status quo but rather to fundamentally alter the positions of the parties.
The Effect of The Preliminary Injunction Sought by Berk Would Be To Alter The Status of The Parties
39. Granting the relief requested by Berk would seriously disrupt an established line of goods on which defendant has spent hundreds of thousands of dollars in advertising and three years of effort developing good will. Essentially the Court would have to require Uniroyal to stop selling women's golf shoes until the names could be changed, to withdraw catalogs and advertising already in existence and to create a gap in an otherwise unified line of goods.
Berk Has Not Established A Likelihood Of Success On The Merits
40. There is no evidence that defendant has ever used plaintiff's exact registered mark in any manner.
41. The style of writing and usage of plaintiff's registered mark and defendant's marks are entirely different; the only similarity between the two marks is that they both use the word "daisy." Defendant's trade mark includes a name for which extensive secondary meaning has been built in the golf field and which clearly identifies Uniroyal as the source of the goods.
42. The word "daisy" is a meaningful word in common usage. It is connotative and suggestive of lightness, freshness and femininity when used with products designed for women. The word "daisy" has already been diluted by its common usage. There is a Daisy Footwear, Inc. in Patterson, New Jersey. It was in business several years before plaintiff began business. Numerous other companies selling or manufacturing shoes are either named "Daisy" or sell products named "Daisy". Further, the word "daisy" has been registered numerous times for other items of women's apparel and for unrelated items. A review of business names across the country show "daisy" has been used innumerable times in all varieties of businesses, a great many of which are directed to a feminine clientele. Defendant *28 itself made women's rainboots called Rainy Daisies in the late 1950s.
43. Plaintiff has not shown sufficiently that the word "daisy" has actually acquired secondary meaning in the minds of the consuming public in plaintiff's favor.
44. Fanciful flowers alone are commonly used decorations on all manner goods. They have a high frequency of usage for feminine goods because they are connotative and suggestive of femininity.
45. Plaintiff has not shown sufficiently that a fanciful flower of any nature has acquired any actual secondary meaning in the minds of the consumers in plaintiff's favor.
46. The ROYAL DAISY golf shoes of defendant do not compete with plaintiff's shoes. The usage and physical appearance of plaintiff's product and defendant's ROYAL DAISY golf shoes are extremely dissimilar. The only thing in common between plaintiff's products and defendant's ROYAL DAISY golf shoes is the fact that they are both aimed at the feet of approximately half of the adult population of the United States.
47. There is no evidence of actual confusion whatsoever between plaintiff's products and defendant's ROYAL DAISY golf shoes.
48. "Royal ®", "ROYAL DAISY" and "Royal ® Daisy" have acquired secondary meaning to consumers of golf equipment denoting defendant as the source of the respective golf products.
49. There is no evidence of bad faith of defendant in adopting ROYAL DAISY as a name for its women's golf shoes. Defendant has presented evidence, which would negate any inference of bad faith, that the name for the shoes was adopted as the extension of an existing trade usage and as part of a unified line of women's golfing equipment.
There Has Been No Showing Of Irreparable Injury
50. There is no evidence that defendant's usage has had any effect whatsoever on plaintiff's registered mark or on its products or on its reputation whatsoever. In spite of defendant's continued usage for over three years, plaintiff learned of it entirely by accident. There has been no showing that the denial of the preliminary injunction and the continuance of the defendant's complained of practices would cause any injury to plaintiff whatsoever, much less an irreparable injury.
51. Plaintiff has suffered no monetary damages to date whatsoever.
52. Plaintiff and defendant manufacture different types of products. Plaintiff's product is a leather high fashion shoe, usually not meant for heavy usage. Defendant's product is a synthetic golf shoe specially designed to be waterproof and yet lightweight and flexible for heavy usage. The products cannot be compared in terms of quality because of their difference design and function but there has been no evidence presented which demonstrates that defendant's golf shoe is not as good quality for its purpose as plaintiff's high fashion shoe is for its purpose.
The Balance Of Equities Favors Defendant
53. Granting plaintiff's requested relief would effectively disrupt defendant's established golfing business, require recall of substantial amounts of advertising material and products and probably put defendant out of the business of selling women's golf shoes. It would destroy a major selling point of defendant's Royal Daisy women's golf line, to wit, color coordination and common identification of the products. It would change the status quo existing for over three years. Denying plaintiff's requested relief will have no effect on plaintiff or defendant whatsoever and will preserve the existing status quo.
CONCLUSIONS OF LAW
1. A preliminary injunction is an extraordinary and drastic remedy to be granted as an exception rather than as the rule. State of Texas v. Seatrain International, *29 S.A., 518 F.2d 175, 179 (5th Cir. 1975); Asher v. Laird, 154 U.S.App.D.C. 249, 475 F.2d 360, 362 (1973). It is the discretionary exercise by the court of a very far-reaching power, "never to be indulged in except in a case clearly demanding it." Warner Bros. Pictures v. Gittone, 110 F.2d 292, 293 (3rd Cir. 1940).
2. The existence of any debate or doubts on the record as to the merits of the claim or the power of the court to act will ordinarily bar the granting of a preliminary injunction. Fowler v. United States, 258 F.Supp. 638, 644 (C.D.Cal.1966).
3. The function of a preliminary injunction is to preserve the status quo pending a determination of the action on the merits, King v. Saddleback Junior College District, 425 F.2d 426, 427 (9th Cir. 1970), and not to alter the pre-existing status of the parties fundamentally. Warner Bros. Pictures v. Gittone, 110 F.2d 292, 293 (3rd Cir. 1940). The "status quo" is the last uncontested status which preceded the pending controversy. Westinghouse Electric Corp. v. Free Sewing Mach. Co., 256 F.2d 806, 808 (7th Cir. 1958); Warner Bros., supra, at 293.
4. Because the declaratory relief sought by the motion, if granted, would fundamentally alter the status of the parties and because the injunction sought would enjoin status quo practices which have been peacefully pursued for more than three years, the provisional remedy of preliminary injunction is not appropriate in this case regardless of the movant's showing on the other factors affecting the grant of the remedy.
5. Even where a preliminary injunction, if granted, will serve the appropriate purpose of maintaining the status quo of the parties pendente lite, this drastic remedy should not be granted unless the movant has clearly carried the burden of persuasion concerning the existence and application of the four prerequisites to such relief. These are: (1) a substantial likelihood that the movant will eventually prevail on the merits; (2) a showing that the movant will suffer irreparable injury unless the injunction issues; (3) proof that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the party opposed; and, where a public interest is involved, (4) a showing that the injunction, if issued, would not be adverse to the public interest. Friends of the Earth, Inc. v. Coleman, 518 F.2d 323, 327 (9th Cir. 1975); State of Texas v. Seatrain International, S.A., 518 F.2d 175, 179 (5th Cir. 1975); Asher v. Laird, 154 U.S. App.D.C. 249, 475 F.2d 360, 362 (1973); Charlie's Girls, Inc. v. Revlon, Inc., 483 F.2d 953, 954 (2d Cir. 1973).
6. In view of the facts that there has been no clear showing on the record presently before this Court that Uniroyal has infringed or will infringe the only trademark for which the movant, Berk, has shown a clear right to protection, it cannot be said that Berk has met its burden of proving its likelihood of ultimate success on the merits.
7. Infringement and unfair competition in this area both turn on whether there is a likelihood of confusion between the defendant's mark and plaintiff's mark. Paul Sachs Originals Co. v. Sachs, 325 F.2d 212, 214 (9th Cir. 1963).
8. In determining whether there is a likelihood of confusion the court should consider the following factors: "`the area of concurrent sale; the extent to which the goods are related; the extent of which the mark and the alleged infringing name are similar; the "strength" or novelty of the plaintiff's mark; evidence of bad faith or intention of the defendant in selecting and using the alleged infringing name; and, evidence of actual confusion.'" Paul Sachs Originals Co. v. Sachs, supra, at p. 214.
9. Since plaintiff sells exclusively to department stores and defendant sells exclusively to golf "pro" shops, there is no area of concurrent sale within the meaning of Sachs, supra.
10. The extent to which the relevant goods of plaintiff and defendant are related is extremely slight.
*30 11. The similarity between the plaintiff's and defendant's marks is extremely slight.
12. Although the precise registered mark of plaintiff may be strong, there is no evidence whatsoever that defendant ever used plaintiff's registered mark. If plaintiff had any rights in the word "daisy" alone, it would be a weak mark because it is a meaningful word in common usage and plaintiff's manner of usage would be so as to take advantage of the positive connotative or suggestive aspects of the word applicable to women's goods, such as lightness, freshness and femininity. J. B. Williams Company, Inc. v. Le Conté Cosmetics, Inc., 523 F.2d 187, 192. (9th Cir. 1975). In the words of Esquire, Inc. v. Esquire Slipper Manufacturing Co., 243 F.2d 540, 543 (1st Cir. 1957), "daisy" as applied to women's goods is "an already diluted name."
13. There is no evidence of bad faith or intent of the defendant in selecting and using the alleged infringing name.
14. There is no evidence of actual confusion.
15. There is no likelihood of confusion between plaintiff's usage of its registered mark and defendant's usage of ROYAL DAISY, the word daisy, and fanciful flower designs.
16. Plaintiff has not sustained its burden of showing that it will suffer irreparable injury if the preliminary injunction is not granted.
17. Plaintiff has not sustained its burden of showing that the equities balance in favor of granting a preliminary injunction.
18. Plaintiff's registered mark being incontestable is irrelevant because there is no evidence that the registered mark was infringed and because incontestability can be used only defensively to protect a registered mark against attack and cannot be used offensively to attack an allegedly infringing mark and obtain relief in favor of the allegedly infringed mark. Tillamook County Creamery Assn. v. Tillamook Cheese and Dairy Assn., 345 F.2d 158, 163 (9th Cir. 1965); John Morrell & Co. v. Reliable Packing Co., 295 F.2d 314 (7th Cir. 1961).
19. For a person to obtain common law rights to protect a trade name it is necessary to show that the name has acquired a secondary meaning in the minds of the purchasers in favor of that person, associating the trade name with that person. Stork Restaurant v. Sahati, 166 F.2d 348, 352 (9th Cir. 1948). Plaintiff has not established that it has rights of protection of the word "daisy" alone or a fanciful flower alone.
20. Even if plaintiff had rights in the word "daisy" alone or the fanciful flower alone the marks and rights to protect them would be weak because "daisy" is a meaningful word in common usage and the fanciful flower is a common decoration. Further, plaintiff's manner of usage would be so as to take advantage of the positive connotative or suggestive aspects of the word "daisy" applicable to women's goods, such as lightness, freshness and femininity and the fanciful flower having similar connotations. J. B. Williams Company, Inc. v. Le Conté Cosmetics, Inc., 523 F.2d 187, 192. (9th Cir. 1975). In the words of Esquire, Inc. v. Esquire Slipper Manufacturing Co., 243 F.2d 540, 543 (1st Cir. 1957), "daisy" as applied to women's goods is "an already diluted name." Such a weak mark would be entitled to much less protection than would a strong mark. J. B. Williams Company, Inc., supra, at p. 192; Esquire, Inc., supra, at p. 543. Thus, even if plaintiff had any rights in the word "daisy" or the fanciful flower decoration alone, its protectability would be limited to "high fashion" shoes sold to department stores.
21. Plaintiff is not entitled to a preliminary injunction. However, all of the aforesaid findings of fact, conclusions of law and order are made without prejudice to any of the parties in finally determining the issues herein on the merits.
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NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT NOV 20 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
THAVIN OM, No. 11-17618
Plaintiff - Appellant, D.C. No. 3:10-cv-03874-EDL
v.
MEMORANDUM*
CAROLYN W. COLVIN, Commissioner
of Social Security,
Defendant - Appellee.
Appeal from the United States District Court
for the Northern District of California
Elizabeth D. Laporte, Magistrate Judge, Presiding
Argued and Submitted November 7, 2013
San Francisco, California
Before: REINHARDT and WATFORD, Circuit Judges, and LYNN, District
Judge.**
The administrative law judge (ALJ) erred in denying Thavin Om disability
benefits. The ALJ’s denial of benefits turned on his finding that Om was not
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Barbara M. G. Lynn, District Judge for the U.S.
District Court for the Northern District of Texas, sitting by designation.
Page 2 of 5
credible and his related rejection of Dr. Gracer’s and Dr. D’Souza’s medical
opinions. The ALJ failed to provide clear and convincing reasons for finding Om
not credible, see Lingenfelter v. Astrue, 504 F.3d 1028, 1035–36 (9th Cir. 2007),
and thus, the ALJ lacked a permissible basis for rejecting the opinions of her
treating and examining sources.
The ALJ provided five main reasons for his adverse credibility finding:
(1) perceived inconsistencies regarding Om’s English proficiency; (2) Om’s ability
to perform some housework and interact with others; (3) the CDIU’s observations;
(4) Dr. McGee’s opinion that Om gave inconsistent effort during a consultative
examination; and (5) Om’s failure to seek ongoing mental-health treatment after
2006.
We agree with the district court that the first two reasons are not clear and
convincing. Om’s limited English proficiency was consistent with the functional
report she filed, and her ability to read a single pill bottle, at best, marginally
conflicts with her stated inability to read English. Similarly, and as the district
court observed, Om’s ability to perform some chores and interact with others is not
inconsistent with her disability. Disability claimants “should not be penalized for
attempting to lead normal lives in the face of their limitations.” Reddick v. Chater,
157 F.3d 715, 722 (9th Cir. 1998).
Page 3 of 5
The remaining three reasons the ALJ gave for his adverse credibility finding
also are not clear and convincing. First, the CDIU’s observations were generally
consistent with Om’s description of her limitations, and Om’s seeming lack of
emotional or physical problems during her brief interview does not conflict with
her claimed disability. See Orn v. Astrue, 495 F.3d 625, 639 (9th Cir. 2007).
Indeed, Om readily admitted during her testimony that her energy level and mood
fluctuate throughout the day. And the ability to remain composed for a mere
twenty-five minutes does not indicate Om could navigate “the more grueling
environment of the workplace.” Fair v. Bowen, 885 F.2d 597, 603 (9th Cir. 1989);
cf. Gallant v. Heckler, 753 F.2d 1450, 1455 (9th Cir. 1984).
Second, Dr. McGee’s observation that Om gave inconsistent effort during a
consultative examination was not sufficient to discount Om’s credibility. It is true
that Dr. McGee “[did] not feel comfortable making any definitive statements about
[Om’s] cognitive ability to work.” But Dr. McGee did not directly question Om’s
credibility or find that she was malingering, and Dr. McGee diagnosed Om with a
depressive disorder. Moreover, Om, herself, and her treating and examining
sources acknowledge she has difficulty concentrating, potentially explaining her
inconsistent testing performance. Discounting Om’s credibility based on Dr.
McGee’s equivocal evaluation is particularly unconvincing because two other
Page 4 of 5
medical sources agreed that Om exhibited symptoms of depression and PTSD. See
Reddick, 157 F.3d at 723.
Third, Om’s failure to seek ongoing mental-health treatment after 2006 does
not serve to discredit her testimony. As a threshold matter, “it is a questionable
practice to chastise one with a mental impairment for the exercise of poor
judgment in seeking rehabilitation.” Nguyen v. Chater, 100 F.3d 1462, 1465 (9th
Cir. 1996) (internal quotation marks omitted). Further, Om remained on
psychotropic drugs through at least mid-2008. Even when she was in treatment,
Dr. Gracer noted that she struggled to remember appointments, potentially
explaining her failure to continue treatment.
In short, considered together, the ALJ’s reasons for finding Om not credible
do not rise to the level of clear and convincing. As such, his adverse credibility
finding was not supported by substantial evidence.
Given that Om should have been found credible, it follows that the ALJ also
erred by rejecting Dr. Gracer’s and Dr. D’Souza’s opinions. The ALJ rejected
their opinions because they were based primarily on Om’s statements, which the
ALJ found not credible, rather than on a rigorous analysis of her symptoms. But
Om’s statements were credible, and both Dr. Gracer and Dr. D’Souza discussed
Page 5 of 5
Om’s specific symptoms and cited the relevant sections of the DSM-IV in making
their diagnoses.
In light of our rulings above, it is clear from the record that the ALJ would
be required to find Om disabled at step 5 on remand, notwithstanding her failure to
attend two consultative examinations on the advice of counsel. Once her testimony
and her medical sources’ opinions are properly credited, the record makes clear
that Om cannot engage in substantial gainful activity that exists in “significant
numbers” in the national economy. Reddick, 157 F.3d at 728–29; see Ryan v.
Comm’r of Soc. Sec., 528 F.3d 1194, 1202 (9th Cir. 2008). Thus, we reverse the
decision of the district court and remand with instructions to remand to the
Commissioner for a calculation of benefits. See Orn, 495 F.3d at 640.
REVERSED and REMANDED.
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NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued May 17, 2018
Decided May 30, 2018
Before
WILLIAM J. BAUER, Circuit Judge
FRANK H. EASTERBROOK, Circuit Judge
DANIEL A. MANION, Circuit Judge
No. 17-2176
United States of America, Appeal from the United States District
Plaintiff-Appellee, Court for the Northern District of
Illinois, Western Division.
v.
No. 3:15-cr-50016-1
Zachary Rodriguez,
Defendant-Appellant. Philip G. Reinhard,
Judge.
ORDER
Zachary Rodriguez solicited explicit photographs from several teenage girls via
Snapchat. He pleaded guilty to one count of production of child pornography in
violation of 18 U.S.C. § 2251(a). The district court applied several enhancements at
sentencing, including for the four additional victims not charged in the indictment,
resulting in a Guidelines range of 210–262 months, with a statutory minimum of 15
years. The court sentenced him to 210 months’ imprisonment.
Rodriguez now argues that his low-end sentence is so excessive that it violates
the Eighth Amendment. Yet he failed to discuss or even cite the Supreme Court’s Eighth
Amendment sentencing cases in his brief or at oral argument; he relied instead on a
No. 17-2176 Page 2
mishmash of policy arguments. Perhaps that was for good reason. In affirming a 182-
month sentence for possession and receipt of child pornography, we recently observed
“that the Supreme Court had rejected Eighth Amendment challenges to much longer
sentences for lesser crimes.” United States v. Niggemann, 881 F.3d 976, 981–82 (7th Cir.
2018). Indeed, the Court once upheld a sentence of 25 years to life imprisonment for the
theft of three golf clubs. Ewing v. California, 538 U.S. 11, 28–31 (2003). Against this
background, anyone challenging a sentence on Eighth Amendment grounds faces a
steep uphill climb.
In short, “Eighth Amendment challenges to sentences that are both prescribed by
the guidelines, and within the statutory maximums established by Congress, are looked
on with disfavor.” United States v. Syms, 846 F.3d 230, 236 (7th Cir. 2017) (quoting United
States v. Saunders, 973 F.2d 1354, 1365 (7th Cir. 1992)). We also owe considerable
deference to Congress’s judgment regarding statutory minimum sentences. United
States v. Jones, 950 F.2d 1309, 1317 (7th Cir. 1991). Rodriguez’s sentence was at the low
end of the Guidelines range and just two and a half years above the statutory minimum.
It does not violate the Eighth Amendment.
The judgment of the district court is AFFIRMED.
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-40530
(Summary Calendar)
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JESUS GONZALEZ-TORRES,
Defendant-Appellant.
- - - - - - - - - -
Appeal from the United States District Court
for the Southern District of Texas
(97-CR-278-2)
- - - - - - - - - -
February 15, 1999
Before JOLLY, SMITH, and WIENER, Circuit Judges.
PER CURIAM:*
Defendant-Appellant Jesus Gonzalez-Torres was convicted by a
jury of (1) conspiracy to possess with intent to distribute more
than 500 grams of cocaine, in violation of 21 U.S.C. § 846, and,
(2) aiding and abetting in the possession with intent to distribute
more than 3.4 kilograms of cocaine, in violation of 21 U.S.C. §§
841(a)(1), 960(a)(1), (b)(2). He was sentenced after judgment was
entered consistent with the jury’s verdict. Gonzalez requests that
the judgment be reversed and a new trial ordered, arguing on appeal
that the verdict went against the great weight of evidence and that
*
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.
the jury ignored the court’s instructions when it rendered a
verdict of guilty.
A jury verdict will be upheld on appeal if a rational trier of
fact could have found the essential elements of the crime beyond a
reasonable doubt. United States v. Payne, 99 F.3d 1273, 1278 (5th
Cir. 1996). Gonzalez relies on the testimony of three co-
defendants, all of whom testified that Gonzalez was not involved in
the conspiracy. Thus, to reach a guilty verdict, the jury had to
have found the co-defendants’ testimony not credible. As the jury
is the final arbiter of witness credibility, United States v.
Restrepo, 994 F.2d 173, 182 (5th Cir. 1993), we resolve credibility
determinations in favor of the verdict. United States v. Resio-
Trejo, 45 F.3d 907, 911 (5th Cir. 1995).
Although there was testimony at trial supporting a conclusion
that Gonzalez was not guilty, there is also substantial evidence in
the record supporting the jury’s guilty verdict. See United States
v. Espinoza-Seanez, 862 F.2d 526, 536 (5th Cir. 1988)(holding that
there must be substantial evidence to uphold the verdict of the
jury). Specifically, (1) during post-arrest interviews, two of the
co-defendants implicated Gonzalez as the source of the cocaine, (2)
Gonzalez’s car was parked at the house where the drug transaction
was scheduled to be consummated, and (3) two kilograms of cocaine
were found in that car shortly after the transaction was
negotiated, at about the time the transaction was to take place.
As there is an evidentiary basis on which the verdict can be
supported, the judgment must be, and therefore is,
2
AFFIRMED.
3
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113 N.J. 239 (1988)
550 A.2d 117
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
MARIE MOORE, DEFENDANT-APPELLANT.
The Supreme Court of New Jersey.
Argued March 1, 1988.
Decided October 26, 1988.
*242 Arnold I. Budin and Roy B. Greenman, Designated Counsel, argued the cause for appellant (Alfred A. Slocum, Public Defender, attorney).
Gary H. Schlyen, Acting Senior Assistant Prosecutor, argued the cause for respondent (John P. Goceljak, Acting Passaic County Prosecutor, attorney).
Lisa Sarnoff Gochman, Deputy Attorney General, argued the cause for amicus curiae, Attorney General of New Jersey (W. Cary Edwards, Attorney General, attorney; Arthur S. Safir, Deputy Attorney General, of counsel and on the briefs).
The opinion of the Court was delivered by GARIBALDI, J.
In November 1984, a Passaic County jury convicted Marie Moore of the capital murder of Theresa Feury and sentenced her to death. She appeals directly to this Court as of right. See R. 2:2-1(a)(3). We reverse both defendant's murder conviction and sentence of death. We reverse defendant's capital murder conviction because the trial court failed to charge the jury regarding diminished capacity and the lesser-included offenses of manslaughter and aggravated manslaughter. We reverse the sentence of death because (1) the trial court failed *243 to instruct the jury properly regarding the weighing of mitigating and aggravating factors in accordance with our decision in State v. Biegenwald, 106 N.J. 13, 62 (1987); and (2) the evidence does not support the jury's finding that defendant committed the homicidal act "by her own conduct" as required by N.J.S.A. 2C:11-3c. We remand the matter to the Law Division for a new trial.
I.
Facts
On December 22, 1983, the police searched an apartment that the defendant formerly occupied, and discovered in a crawl space behind the bedroom wall the partially mummified body of Theresa Feury. The investigation into the young girl's death revealed the bizarre pattern of conduct that occurred in defendant's household for a period of time commencing in September 1981 and ending in December 1983. Defendant's conduct during this two-year period formed the basis for the thirty-three count indictment that charged defendant with the murder of Theresa Feury, as well as numerous crimes committed against other victims. To simplify this complex factual scenario, we will subdivide our recitation of the facts into three distinct time periods. Each time period corresponds to the presence in the Moore household of different persons who were victimized at the defendant's direction.
A. First Time Period: September 1981-November 1981
In September 1981, the Moore household was located at 1031 Madison Avenue, Paterson, New Jersey. Living in the household at that time were (1) the defendant, Marie Moore (Marie), age thirty-five; (2) Tammy Moore, defendant's daughter, age twelve; (3) Harriet Bayne, a friend's daughter left in defendant's care, age twelve; and (4) Mary Gardullo, defendant's friend of several years, age fifty. Sometime in July or August 1981, three other children began to visit the Moore household *244 on a regular basis. These other children were Ricky Flores, age fourteen, Theresa Feury, the murder victim, age twelve, and Luis Mantalvo, age thirteen. The summer of 1981 was a funfilled one for the children. Defendant Moore took them to beaches, amusement parks, and bowling alleys. The children enjoyed spending time in the Moore household, and developed great affection for defendant during the course of the summer. Such was their affection for defendant that they began to call her "Ma."
On or about September 13, 1981, changes began to occur in the Moore household. At that time, defendant informed the children that her ex-husband was the famous singer and songwriter, Billy Joel. This, of course, was untrue. Moore in fact never had been married. Nevertheless, Moore told the children that Billy Joel had returned to establish some order in the household and for his daughter Tammy's engagement to Ricky Flores, who had been Tammy's boyfriend throughout the summer. Defendant told the children that things had gotten too wild in the house, and that Billy would see to it that matters were straightened out. Naturally, the children were puzzled by defendant's story. Moments later, defendant answered the phone in the living room, and asked the children to gather there. She then informed Tammy, who was convinced that Billy Joel was her father, and Mary Gardullo that Billy wanted them to stay out of the living room.
Once assembled in the living room, Marie began to relate to the children the instructions that she was allegedly receiving from Billy Joel over the phone. She described to them that Billy Joel was a member of the mafia, that he would be assigning household chores to each child, and that he would have a bomb go off in the house if the children were to disobey his orders or tell anyone outside the household what was going on at 1031 Madison Avenue. Marie also told the children that Billy Joel or other members of the mafia would harm the children's family members if they disobeyed. According to Marie, Billy wanted to put Ricky Flores in charge of the *245 household in order to see if he could be an effective head of household once he married Tammy. Marie then instructed the children to return to the house on a daily basis.
Throughout this first time period, Marie would give the children a list of rules and chores that she said she received from Billy over the phone. Their chores would change on a weekly basis on orders from Billy. After school, the children arrived at the Moore household as requested. Shortly thereafter, the phone rang. It was Billy. While ostensibly speaking to Billy, Marie instructed the children to recite the list of rules she had given them earlier that morning. If one of the children did not recite the rules correctly, Marie informed Ricky that Billy wanted him to discipline that child so that the child would remember the rules in the future. Thus began the cycle of punishments in the Moore household.
After enduring their punishments, the three children then performed their assigned chores. At a pre-arranged time, Marie made a call to Billy. Marie told Ricky that Billy wanted him to inspect the children's work. Ricky conducted his inspection and reported to Marie that the others had done an adequate job. Marie replied that Billy said that the cleaning was not done properly because he knew that there was dirt under the kitchen table. Ricky then found dirt under the table and told Marie that Billy was right. Marie then related Billy's instruction that the children be beaten with the bat again. Ricky would beat the children for these "failures," and Marie would direct Ricky while talking on the phone with Billy.
All of the children and Mary Gardullo believed that Billy existed and that Marie was speaking with him on the phone. Defendant provided proof of his existence in a number of ways. First, she received phone calls, instead of just making them to Billy, thus showing that he was in touch with her. The children did not know that Moore could make these phone calls herself, using techniques that she learned when working for the phone company as a telephone operator. Second, Mary Gardullo had *246 been exposed to the Billy character in 1978 when she accompanied Moore to California, and because of the experience she had in California, and because she trusted and liked Moore, she believed in Billy's existence and feared him. When she heard about the first phone call, she became very upset, and her reactions helped to further convince the others that Billy existed. Third, the phone inspections showed that Billy knew what was going on in the household. These instances reinforced the children's belief that Billy existed, and thus their fear that as a member of the mafia he could hurt them and their families if they did not keep coming back to the Moore household.
Harriet, who finally escaped the household in late November, bore the brunt of the "punishments" during the first time period because she lived in Moore's apartment. Luis Montalvo, who left at the end of October, endured physical abuse for less than two months. His punishments, however, took a heavy physical toll on him. Mary Gardullo was not beaten at the start, but punishments did start in October because she was butting in and being "nosey." Theresa, who came to the household every morning and afternoon, was beaten regularly during this first time period.
Luis visited the household only during the first time period. The beatings and torture that he had to endure were lessened somewhat because his family lived close by and he had to meet his parents' curfew. At the end of October, Marie, fearful that Luis' family would intrude, summoned Luis into the living room where she and Ricky were sitting. Moore told Luis that Billy had said that he could go home and would not have to return to the Moore household. Moore then told Luis that Ricky would "give him something to remind him not to say anything." Ricky took Luis to Mary Gardullo's room, where he instructed Luis to raise his hands over his head. Ricky then beat him with his fists, bloodying his nose. After this beating, Luis left the Moore household for good.
*247 Shortly before Luis left the household, on or about October 25, 1981, two important events occurred: Ricky Flores became a permanent resident, and Billy began to speak and issue instructions through the body of Marie Moore. Because defendant now "became" Billy, the phone calls ceased. The first time that Moore "became" Billy occurred soon after Flores moved in as a permanent resident. Moore came back to the apartment and told Mary, Harriet, Theresa, Tammy, Luis, and Flores that Billy's men pulled her over and gave her an injection that would allow Billy to come into her body and speak through her. Moore asked them to keep giving her coffee because of the drug that had been injected. They were sitting in the kitchen drinking coffee and then Marie put her hands over her face, removed them and said, "I'm not Marie, I'm Billy".
The children and Mary Gardullo believed that Billy was in Moore's body because she sounded different. Her voice was "really cold", and she began "talking like a man [and] her voice got deeper." In addition, she sounded more demanding, had a "meaner voice" and "she swore a lot," which was something that Moore had not done before. After this initial occasion, Moore began to change into Billy regularly, and would give Flores orders in the masculine voice.
The week immediately preceding his move to the Moore household, Ricky's parents grounded him after discovering that he had not been attending school. Ricky's mother became suspicious when Moore called her on Friday, October 16th, to tell her falsely that her son was working at the shore for the weekend. Mrs. Flores had explicitly told Ricky to be home that night. Ricky's mother then called the school. She discovered that he had not been going to school, and that a woman posing as Ricky's mother had told the school that her son had injured his back and could not attend school. This woman was Marie Moore.
When Flores returned home on Sunday night, October 18th, his mother told him that he would be grounded and that she or *248 his father would take him to school and bring him home each afternoon. That Monday morning and the other times that she went to and from school that week with her son, Mrs. Flores noticed Marie Moore following her in the Ford Pinto that Moore drove.
On Saturday morning, Flores left his parent's home for good. On leaving his parent's home, Flores ran to Moore's car, which was waiting on the corner. Moore told him that he would have to stay in the house for four weeks so that he could get her off the drugs that Billy said she was taking. Earlier, Moore had told him that Billy wanted him to help her, and Flores had taken Moore's keys and pills home, supposedly so that she could not go out or take drugs. Thus, Moore's statement that "Billy" wanted him to stay with her for four weeks to get her off drugs seemed reasonable to Flores.
Moore and Flores were not sexually intimate during this first time period. However, during this time period, Flores and Tammy discontinued their relationship. The break-up occurred because Billy told them that they could not see each other anymore. Moore and Flores were physical in other ways. Moore hit Flores for failing to keep the other children in line, or for supposedly lying to Billy on one occasion, and she would tell him that Billy had ordered the punishment. Flores would hit Moore approximately twice a day with either the bat, his hands, or a book. At times, Moore seemed to enjoy the punishment, teasing Flores that he did not hit hard enough.
After Flores moved in permanently, he continued to keep in touch with his mother, phoning her two to three times a day. Flores asked Moore if he could go back home but was told that he had to stay permanently. When Flores called home he would tell his mother that he was happy living away from home and that he did not want to move back. He would tell her this in an angry tone because Moore told him to be distant with his mother and not to tell her that he was at her house. Moore told Flores that his mother had filed a complaint against him at the *249 end of October and that this showed that she did not care about him.
After Mrs. Flores filed the complaint, in which Mrs. Flores charged her son with being wayward and incorrigible, the police conducted an investigation. Mrs. Flores regularly called Moore to ask her where her son was, and Moore denied knowing where Flores was staying. Moore even told Mrs. Flores that she could search her house and that she would not find her son, an offer that Mrs. Flores declined. The police and DYFS workers came to look for Flores during this one-month period before Harriet escaped, but Moore would hide him in a crawl space in the middle bedroom.
Throughout this period, Ricky continued to administer beatings and other punishments to Harriet and Theresa at Moore's direction. Ricky continued to beat Harriet and Theresa with the whiffle ball bat a number of times each day. Ricky also beat Harriet, Theresa, and Mary with medical books, instead of the bat. Flores began to use the books in early October because Moore said that Billy, who was on the phone, had told her that the bat was not hurting them enough.
Ricky did not beat Mary Gardullo initially, but began to do so during the latter part of this time period when she tried to keep Ricky from beating Harriet. Billy, who was still on the phone at this time, supposedly told Moore that Mary should do chores and be punished because she was too nosey and was butting in. Ricky then began to punish Mary as he did the children.
After two failed attempts, Harriet finally escaped from the Moore household on November 27, 1981, ending the punishments and beatings for her. On the day of her escape, Harriet left the Moore household and ran towards her brother's house in Lodi, but because she was unsure of the exact route, she stopped often to ask directions. One person, noting that she was not wearing shoes or a jacket, called the police. When Harriet saw the police car she ran, but the policemen caught up with her and took her to the station.
*250 At the police station, Harriet gave a long statement in which she told the police what happened. She did not, however, mention Flores or Moore by name nor did she give her address, fearing that she would be sent back to Moore's house. She did tell the police that someone named Sir or Boss was beating her at the direction of someone on the phone. Afterwards, the police took her to a hospital for an examination, which revealed the extensive beatings she had received.
Harriet stayed in the hospital for a week and during that time talked to two DYFS caseworkers and gave them Flores' name and Moore's address. DYFS started an investigation based on Harriet's story and the evidence of physical abuse. The DYFS caseworkers went to talk to Moore, who denied that Flores lived there or that any beatings had taken place, and suggested that Harriet might be fantasizing. Moore said this in a very calm and credible manner, presenting the two caseworkers with a dilemma because Harriet's story was quite incredible, yet she had been beaten, and at the same time Moore's denials seemed believable. The DYFS caseworkers recommended that Harriet not return to Moore's household and they sent Harriet to a ninety-day program at a Diagnostic Center.
B. Second Time Period: November 27, 1981 May 31, 1982
Harriet's escape and the subsequent DYFS investigation caused some turmoil in the house at the start of the second time period, which begins with Harriet's escape on November 27, 1981, and ends with Mary Gardullo's escape on Memorial Day, May 31, 1982. During the first few weeks after Harriet's escape, investigators went to the apartment in search of Flores and to question Moore. Moore hid Flores, and continued to hide him during this second period, as well as much of the third time period. About two weeks after Harriet's escape, Moore told Flores that Billy ran Harriet over in his car. Flores believed Moore, and this instance further demonstrated to him *251 the power that Billy wielded and the consequences of disobeying him.
During this second time period, there were only two victims left in the house, Mary Gardullo and Theresa Feury. The punishments during this six month period became increasingly severe. The household relocated from 1031 Madison to the second floor of 989 Madison, a home owned by Ferdinando Ragusa. Ragusa was close to Moore, and she said that he was Tammy's grandfather.
In January 1982, shortly before moving to 989 Madison Avenue, Ricky and Marie became sexually involved. One morning in January 1982, Moore, as Billy, and Flores were talking in the kitchen. Billy told Flores that Marie loved him and wanted to go to bed with him. Billy then asked Flores whether he wanted to be Marie's boyfriend or her son. Flores responded that he perceived Marie as a mother. Billy told Ricky that he should decide which he wanted to be. Billy added, however, that Ricky should not hurt Marie's feelings, and that he had beaten up other guys who mistreated Marie in the past. Ricky then decided to have sexual relations with Marie. When they moved to 989 Madison, the sexual relationship continued.
Moore continued to encourage and direct Flores to punish Mary and Theresa, setting up punishments for the day and showing him different and more sexually deviant forms of torture. Billy encouraged Flores by telling him that he had to compete against other children who were administering punishments in similar households. Flores and Moore, as Billy, would also talk and set up the punishments for the day before Mary and Theresa returned to the house.
The punishments that Flores inflicted on Mary and Theresa were more severe than those he meted out in the first time period, and they increased in severity over time. During the first two weeks after Harriet's escape, Flores and Moore introduced the use of thumbcuffing, which was a very painful procedure in which one thumb would be cuffed to one big toe *252 while the victim was lying on her stomach. Flores would thumbcuff Mary and Theresa in the nude and force them to remain in that position for close to an hour at a time. Ricky would supplement the thumbcuffing with variety of other punishments, including kicking, blows with a bat or book, and cigarette burns.
Mary left the home on Memorial Day, May 31, 1982. Mary escaped by telling Moore the night before that she wanted to work on Memorial Day so that she could make extra money (time-and-a-half) for the household, and Moore, who wanted the money, told Flores that he should let her go that next morning. Mary went to work that day, but only used the phone to contact her brothers and sisters who took her to the shore, where her family had her talk with a detective from the Toms River Police Department. The Toms River detective, Tom Kerwin, spoke with her for about three hours and she eventually allowed him to look at her body to see the extent of the beatings. Kerwin said that Mary was, "very distraught and emotionally destroyed" and that she was in, "very, very poor physical condition." Detective Kerwin convinced Mary to go to the hospital for medical attention. She later gave a statement to the police, describing the beatings and tortures she endured at Flores' hand. She did not name Billy, but did name Marie Moore as someone who knew what was being done and gave the address, as well as alerting the authorities to the punishments that Theresa was suffering.
C. Third Time Period: May 31, 1982 December 28, 1983
The third time period encompasses the events that occurred after Mary Gardullo's escape, leading up to Moore's arrest in December 1983. The allegations that Mary made against Flores and the fact that these events were said to occur at Moore's home in Paterson against Theresa, a juvenile, led the police to refer the matter to Passaic County DYFS and to the Juvenile Division of the Paterson Police Department. DYFS assigned the matter to one of its social workers, Ms. Cathy *253 Della Pesca, on June 7th. That same day, Della Pesca spoke to Theresa and Tammy at school about the alleged beatings. Both denied the allegations, but told Della Pesca that they had seen Flores recently at the Moore household. Della Pesca then went to see Marie Moore who denied any knowledge of the beatings, stating that "Theresa Feury was her godchild and that she would not allow harm to come to her." Moore also initially denied having seen Flores after January 1982, but changed her story when confronted with Theresa and Tammy's statements that Flores had recently been in the household, and thus admitted that she had last seen him three weeks earlier when he visited briefly.
On the basis of these conversations, Della Pesca spoke to Grace Opresnick, a fellow DYFS worker who had been assigned to the Harriet Bayne investigation. She then contacted the Paterson Police Department to request an escort to Moore's house. On this same day, June 7, Della Pesca returned to 989 Madison with her supervisor, Detective Dolores Most of the Paterson Police Department's Juvenile Division, and Detectives Stell and Dowling. Detectives Stell and Dowling covered the rear of the building, while Most, Della Pesca, and the DYFS supervisor went to the front door and were admitted by Moore.
Theresa tried to escape by the rear door but was stopped by Stell and Dowling who sent her back in. Inside the home, Della Pesca and Most questioned Moore about the alleged beatings and sexual abuse, which she continued to deny. Della Pesca then asked Theresa to undress. When Theresa undressed, Della Pesca saw numerous bruises on her body. Theresa and Moore said they were surprised and that she must have fallen at school.
Della Pesca then made an appointment with a doctor, Mercedes Lecesne, who then examined Theresa two days later, on June 9th. Della Pesca also took photographs of Theresa's body in order to document her injuries. Dr. Lecesne found that the bruising was not consistent with a fall and that it was consistent *254 with beatings, cigarette burns, and other repeated serious physical abuses.
The day after this examination Della Pesca took Harriet and Theresa to the police to solicit statements from them. Harriet told Detective Most that Flores and Billy, who came through Marie Moore, were responsible for the beatings and abuse that she had suffered. Theresa gave a statement after Harriet, but only after Most assured her that the police were interested in apprehending only Flores, not Moore. Prior to this date, Mary Gardullo visited the station and gave a statement concerning the beatings and abuse to Detectives Stell and Dowling, which Most reviewed prior to calling Moore in for questioning on June 10th.
During her June 10th interview with Detective Most, Moore started to deny the allegations of beatings and abuse. However, when confronted with Mary Gardullo's prior statement to police, Moore admitted that the beatings and abuse had occurred, but claimed that she was also a victim. In the formal statement that followed, Moore claimed that Flores would come to the house on the weekend, that she rejected his sexual advances, and that he would abuse her and Mary Gardullo, who tried to stop Flores from hurting Moore. She claimed that she never saw Flores abuse Theresa and that he never hurt Tammy, but that he did threaten to do so if Moore told on him, which was the reason for her earlier denials.
On June 11, 1982, Della Pesca contacted Moore, who continued to deny that she knew where Flores was at the time. On this same day, Detective Most talked to Luis Montalvo who denied any allegations of abuse. Unknown to Most, Moore had found Luis that morning and had warned him that Billy would get him and his family if he said anything to the police about Flores. Detective Most then contacted Moore and told her that she should call the police if she saw Flores. Moore agreed.
During this third time period, Theresa was the only victim left in the house. The punishments she suffered increased in *255 severity. During the time between May 31 and September 1, 1982, Theresa visited the house and was abused on a daily basis. Her physical condition on June 9, 1982, when Dr. Lecesne examined her at Della Pesca's request, showed evidence of the severe abuse she was suffering.
Theresa finally became a permanent resident of the household on September 22, 1982. Theresa came to stay permanently because of a phone conversation that same day between her grandmother and Moore. Theresa's grandmother told Moore that DYFS workers and detectives were interested in speaking to Theresa. Marie became fearful that Theresa would disclose what was going on in the household. One week later, Billy told Theresa that she was a permanent resident of the Moore household.
Theresa, Moore, Tammy, and Flores continued to live on the second floor of 989 Madison Avenue until late October. At that time, the four moved to the third floor of 989 Madison Avenue. Although Theresa stopped doing chores once they moved to the third floor, she continued to suffer terrible abuses. During the day, Flores kept Theresa cuffed to a hook on the kitchen wall. At night, Flores would transfer her to the bathroom, where he would cuff her to the bathtub. Flores also sexually abused her, and for some period of time Moore would take Theresa down to the elderly Ragusa, who would pay Moore to have Theresa perform oral sex. Moore and Flores also stopped feeding Theresa once they moved to the third floor and no longer allowed Theresa to use the bathroom. At first, they gave her a pot, and Moore later purchased disposable diapers. The Pampers were the only things that they permitted Theresa to wear.
One morning before her death, this continued treatment caused Theresa to lose consciousness. Moore helped Theresa to come out of this condition, and for this short time Moore released her from the cuffs, even though Flores insisted Theresa was faking. However, after bringing Theresa out of this "seizure," Moore put Theresa back into the thumb cuffs.
*256 On the eve of her death, Theresa slept cuffed to the bathtub, as usual. On the morning of her death, Moore told Flores to get Theresa out of the bathroom so that Tammy could wash up for school. Flores would do this every morning by releasing Theresa from her cuffs, permitting Theresa to walk on her own to the kitchen, where he would then recuff her. Following his customary procedure, Flores uncuffed Theresa, who had been lying facedown. Noting that she was not getting up on her own, Flores lifted her up by her shoulders, bringing Theresa to her knees. He let go of her and instead of getting up, Theresa fell, striking her head on the bathtub and then the floor. Flores then picked Theresa up and took her into the hallway, where he checked Theresa's breathing and noted that she was moaning. When she ceased moaning, he pushed down on her stomach, producing a sound "like the sound of someone going to the bathroom." Marie interpreted that to mean that Theresa was dead.
When Tammy left for school, Moore instructed Ricky to place the body in a bathroom crawl space while she went to the store to purchase some items. Flores put the body in the crawl space at Moore's direction, and Moore went out. Moore returned with a yellow garment bag, helped Flores put Theresa's body into the garment bag, and then told Flores to bring the body out from the crawl space. After Flores brought Theresa's body out of the crawl space, Moore and Flores hid the body in the attic. After leaving the body in the attic on a beam, Flores came down into the hallway again, and Moore told him she had to go out again. Moore returned with eight rolls of duct tape. Moore gave Flores the duct tape and two plastic garbage bags. She told him to put one bag over the head, one over the legs, and then to wrap Theresa's body with the eight rolls of duct tape. Flores went up into the attic and wrapped the body, which was in the garment bag, while Moore stood on the cabinet in the hallway looking into the attic to see how he was doing. While Flores was taping Theresa's body, the bulb in the lamp that had been taken to the attic blew out and Flores put *257 the blown bulb down on the body, where the medical examiner would find it almost one year later. Flores then placed Theresa's bagged and taped body in the part of the attic where the slanted roof met the third floor ceiling, and covered it with insulation. When Tammy came home later in the day, Moore told her that they sent the body to her father, Billy Joel, in New York City.
In May or June 1983, Moore and Flores moved the body from the attic to the wall space in the bedroom because they were moving from 989 Madison, and Billy said that if they had electrical problems, the "electrical man would go up there and see the body up there." Moore opened the hole in the ceiling to get to the attic, went up to the attic, wrapped the body in a quilt and tied it, and then lowered the body down to Flores in the third floor hallway. Moore then came down to the third floor, put the body through a hole in the bedroom wall and into a crawl space behind the wall. Moore and Flores covered the hole leading to the crawl space with wood, which they nailed into the wall before concealing the hole with wallpaper. The body remained in this location until the police discovered it in December 1983.
During the time period between Theresa's death and the discovery of her body, Moore spoke with Theresa's grandmother on numerous occasions. The last time was in September 1983 when Moore asked Mrs. Gioia if she had heard from Theresa. These efforts to conceal her own involvement in Theresa's kidnapping and subsequent death were complemented by Moore's efforts to hide Flores from the authorities.
Prior to moving from 989 Madison Avenue, Moore told Flores that he had to get a job, and she helped him get one as a maintenance helper at Haband. Moore went into Haband with Flores, told them that she was his mother, a widow, and that she needed him to get a job. Moore also told the personnel manager that she would pick up Flores at lunch and after work, *258 and asked her to "make sure no one else but her picked him up."
Flores worked at Haband for about six weeks, until the first week of July when he left permanently. During this time, Flores, Moore, and Tammy moved within Paterson from 989 Madison to 101 Martin Street. Flores left Haband permanently because he was spotted at the factory by his brother Philip, who was there on a service call, repairing typewriters. Philip, who was not quite sure if it was his brother, asked a supervisor, who confirmed that it was Richard Flores. Philip then picked up his mother and returned to the factory.
When the two returned, they had Flores paged to the front office. Flores came out from behind a counter, saw his mother and brother standing there and said, "Oh my God, mom," and then ran away. Philip ran after him, but could not catch his brother. Mrs. Flores and he then went back to the house because she knew Flores would call her, which he did. Flores and his mother spoke on the phone. She then asked Philip to deliver certain items to the mailbox at 989 Madison, including a copy of the charges she had filed against Ricky.
The next time that Mrs. Flores saw her son in person was at the police station on July 12, 1983, following his arrest on that same day at Moore's apartment on 101 Martin Street. This arrest came about because Mrs. Flores had contacted the police after she saw Flores at Haband. Detective Most, who handled this part of the investigation, contacted Haband and reviewed their records concerning Flores. On the morning of July 12, Most obtained a juvenile warrant for Flores at the 101 Martin Street address, and gave a copy of that warrant to Officers Washington and DeOld. The two officers entered the premises and found Flores under the sink, whereupon they arrested him and took Flores and Moore to the station for questioning.
Detective Most questioned Flores, who denied everything. He was then placed in a holding room. Mrs. Flores then came to the police station, and asked the court to release her son and *259 place him in her custody pending his appearance the following day for further investigation. The court agreed and released Flores, whereupon Detectives Most and Stell began to talk to Marie Moore. Moore agreed to talk to them after being advised of her rights. Moore explained to them that she kept Flores in her apartment only because Flores and his mafia boss, Don DeMarco, threatened Moore and her daughter. Detective Most challenged this story, telling Moore she did not believe it. Most also told Moore that she believed Moore and Flores were sexually intimate, contrary to defendant's contention that they had a mother-son relationship.
At 4:30 p.m., after Flores' release, Detectives Stell and Dowling told Moore that she could go, but asked her to return in the morning to take a polygraph exam. Moore agreed and left with Detective Stell. She returned within minutes, however, stating that she wanted to tell them the whole truth. Moore then gave the detectives a formal statement.
Moore repudiated her earlier statements made in June 1982, after Mary's escape, in which she claimed Flores had beaten and assaulted her. She admitted that the DeMarco statements were lies, that she had a sexual relationship with Flores, and that Flores had beaten Mary because she would not "stop interfering in our lives." Moore insisted that Flores had changed since Mary's departure, that he was now a "sweet loving boy," and that he had never hit Theresa or Harriet. Moore also insisted that she did not know where Theresa was, and that she had not seen her since September 1982.
Theresa was still only a missing person at this time, and Flores denied any contact with her. Moore's story again succeeded in deflecting the investigation against her. Charges were filed against Moore in July 1983 for having sex with a minor (Flores), endangering child welfare (Flores), giving a false statement in June 1982, and interfering with Flores' custody. A grand jury returned an indictment in December *260 1983, but Moore remained free until her arrest on December 28, 1983, six days after she led police to Theresa's body.
Moore made constant efforts to contact Flores after he was arrested, and later to do him in because she was afraid that Flores would talk to the police. In the months following September 1983, Moore tried unsuccessfully to speak with Flores in order to intimidate him so that he would not go to the police. Flores was free at the time, and was living at home. Moore enlisted new people in these efforts, people who moved in with her in September 1983.
Some time after the July 12th statement, Moore and Tammy moved from 101 Martin Street to 356 Park Avenue. In September 1983, a new group came to live with them at the new address. This new group consisted of Jorge Oyola, age twenty, Lydia Santiago, age seventeen, and their two children Jessica, age two, and Jennifer, age one.
Oyola, Santiago, and their two children met Moore through Lydia Santiago's fifteen-year-old sister, Elizabeth, who was a friend of Tammy Moore. They moved into 356 Park Avenue on September 17, 1983, at Moore's suggestion, after a party that Moore hosted for Tammy and Elizabeth. Jorge worked every day, while Lydia and her sister Elizabeth, who visited daily, would stay at the house with Moore. They went out shopping, to movies, got high at the apartment, had men over and "fooled around" with them, having what they considered to be a very good time with Moore. Moore was kind to them and the two children, and in return both Santiagos felt close to her and called her Ma.
This pattern resembles that of the summer of 1981, but none of the abuses that occurred following that summer were to be repeated. Moore told Oyola and the two Santiagos about her relationship with Flores. She would follow him in her car with one or more of them. Moore also introduced Billy Joel to them, telling them how the famous rock star had fathered Tammy. *261 She also told them that he was in the mafia, and that Billy and Flores had worked together.
Moore then, as she had in September of 1981, began to receive phone calls that she said were from Billy Joel. Although they never talked to this Billy, Lydia and Elizabeth believed he existed as a result of these phone calls, in which Moore would supposedly talk to Billy about Tammy or ask him for money. Also, just as Moore had done in September 1981, she told Lydia that Billy might have microphones or cameras in the apartment. When Lydia started searching for these items, Marie got a phone call. She said Billy wanted Lydia to stop looking for his microphones and cameras. On another occasion, Moore returned to the house and told them that Billy's Mafia boys injected her with a drug that would permit Billy to enter her. Moore then turned into Billy for the first time. Elizabeth and Lydia believed this transformation, while Jorge did not.
Moore was very concerned with Flores, and in addition to looking for Flores and following him, Moore had the Santiagos deliver messages to him personally. These messages varied from Moore's expressions of love for Flores to threats to report him to the police.
Moore tried to establish that Flores had committed the crimes by instructing Lydia to tell the police, if questioned, that Flores had threatened Moore and Tammy by phone. Moore told Lydia that Billy "was going to get" anyone who testified against Moore. Moore prepared Tammy to tell the police that Flores raped her. She also instructed Tammy to tell the police that Flores had beaten Theresa to death. Moore wrote this story down, and had Tammy rehearse it numbers of times. Lydia and Jorge heard Moore preparing Tammy. Moore told Tammy to be "calm" and "cool" when she spoke with the police.
On December 17, Moore began her plan to prove that Flores committed the murder. She contacted the police to tell them that her daughter Tammy had just told her that Flores had sexually abused her. Moore also told the police that based on *262 what Tammy told her, she believed that Flores had murdered Theresa Feury, whose body might be hidden at 989 Madison. The police spoke with Tammy who gave them a statement concerning Flores. On that same day, Moore accompanied the police to 989 Madison, where they searched for potential burial sites. None was found.
On December 20, Tammy gave Detective Stell two formal statements, in which she alleged that Flores raped her and that she witnessed Flores killing Theresa Feury. After speaking with Tammy, Detectives Stell and Greenwood went to 989 Madison, met Moore and Ragusa, the owner of the property, and looked at a depression in the ground that Moore claimed was a possible burial site. Moore and Ragusa took Detectives Stell and Greenwood to the third floor apartment, where Moore pointed to a spot in the ceiling and to a paneled area in the bedroom as possible burial sites.
Detectives Stell and Greenwood removed a piece of wood that covered a hole in the ceiling. Greenwood went into the attic crawlspace, found a roll of duct tape, white powder that he recognized as lime, and a tray with candle wax on it, but no body. When Detective Greenwood came out of the crawlspace, Stell noted a "strong foul smell." The detectives left after this, and returned on December 21st with a Public Works crew, which dug up the patch of ground in the back but found nothing.
On the following day, December 22, Ragusa called Stell at 9:00 a.m. to ask him if he was coming with a crew to search the attic. Stell told him that he did not think he would, and stated that he might close the investigation. In fifteen minutes, Moore called to ask Stell if he was really going to close the investigation, and Stell, who had no such intention, answered affirmatively just to see what would happen next. Moore responded within an hour by taking a piece of blood-stained insulation to the police station, which the police then took to a lab for examination.
*263 The detectives told Moore they would come to 989 in the early afternoon with a Public Works crew. It was during this search of the apartment that Ragusa and Moore finally uncovered an opening in the wall that led to the crawl space, where the police discovered Theresa's body. After photographing the scene and the wrapped body, the police sent the body to the medical examiner, thus commencing the investigation that would lead to Moore's arrest and indictment.
On December 22, 1983, the medical examiner, Gertha Natarajun, performed an autopsy on Theresa Feury. Her autopsy revealed that the blow to her head and face had killed her, but that she had been alive for a number of hours after it, albeit in a coma. The blow to the head was consistent with falling on a bathtub or hard floor, while the injury to the face could have been caused by falling against a bathtub or by a direct blow, such as a hard kick. The blood that had gathered around the blow to the face and head indicated that Theresa had been alive when wrapped and taped. The extent of the hemorrhaging suggested that she lived as long as four to eight hours after the injuries. There was not enough soft tissue remaining to determine whether Theresa had suffocated as a result of the taping and wrapping. The examiner did testify, however, that this kind of wrapping could suffocate a living person.
On December 23rd, Moore returned to the police station with Detective Stell. After being advised of her rights, Moore agreed to waive them, and expressed her desire to cooperate in the investigation. Moore initially denied having witnessed the homicide, but after Stell confronted her, she admitted to witnessing it. In this statement, Moore claimed that Flores killed Theresa by slamming her head against the bathtub, that he alone disposed of the body, and that she tried to help Theresa.
Moore next spoke to the police on December 28th. Detective Stell and John Laky of the Prosecutor's Office, which had become involved in the case on December 22, spoke with Moore at the Prosecutor's Office on December 28th. They read Moore *264 her rights and advised her that she was a suspect in the kidnapping and death of Theresa Feury. She agreed to speak with Laky and Detective Stell.
In this interview, Moore admitted that Billy was not a real person, that he was in her head, and that Flores would bring him out. Detective Stell tried unsuccessfully to bring Billy out. Moore then told them that she would not remember what happened when she was Billy and that she wanted to rid herself of that personality. She mentioned, however, that she did not want to go to the crazy house. Moore stated that Billy played no part in Theresa's death. Moore also claimed that she had not become Billy since Flores left. Moore also repeated her December 23rd claim that Flores had killed Theresa, and maintained that Billy had not been present.
After giving this statement, Moore was arrested on the same day, December 28, and charged with Theresa Feury's death. After reviewing statements from the victims and other witnesses, the prosecutor decided not to charge Flores as an adult, and entered a plea agreement instead, whereby he would charge Flores as a juvenile with a maximum custodial term of three years. In return, Flores agreed to testify against Moore, which he did, and his testimony, along with that of the other victims and witnesses, led to Moore's conviction.
D. Indictment & Pretrial Motions
On April 16, 1984, the Passaic County Grand Jury returned a thirty-three count indictment against Marie Moore. The indictment charged Moore with the following crimes committed against various victims between September 1981 and December 1983: purposeful and knowing murder by her own conduct, contrary to N.J.S.A. 2C:11-3a(1)-(2); felony murder, contrary to N.J.S.A. 2C:11-3a(3); attempted murder, contrary to N.J.S.A. 2C:5-1c and 2C:11-3; two counts of aggravated sexual assault, contrary to N.J.S.A. 2C:14-2a(3)-(4)-(5)(a)-(6); two counts of aggravated criminal sexual contact, contrary to N.J.S.A. 2C:14-3a; *265 one count of sexual assault, contrary to N.J.S.A. 2C:14-2c(5); four counts of aggravated assault, contrary to N.J.S.A. 2C:12-1b(1); five counts of kidnapping, contrary to N.J.S.A. 2C:13-1b(2); four counts of terroristic threats, contrary to N.J.S.A. 2C:12-3a; one count of burglary, contrary to N.J.S.A. 2C:18-2; one count of theft by unlawful taking or disposition, contrary to N.J.S.A. 2C:20-3; one count of theft by deception, contrary to N.J.S.A. 2C:20-4; one count of theft by extortion, contrary to N.J.S.A. 2C:20-5a; two counts of endangering the welfare of a child, contrary to N.J.S.A. 2C:24-4a; one count of interference with custody, contrary to N.J.S.A. 2C:13-4a; three counts of tampering with a witness, contrary to N.J.S.A. 2C:28-5a(1)-(2); one count of hindering apprehension or prosecution, contrary to N.J.S.A. 2C:29-3a(1); and one count of false swearing, contrary to N.J.S.A. 2C:28-2. In nineteen of the thirty-three counts, defendant's liability was based on a complicity theory pursuant to N.J.S.A. 2C:2-6. The counts in which the State charged accomplice liability included felony murder, attempted murder, the various kidnapping and assault charges, as well as those counts involving terroristic threats and theft by extortion.
On June 23, 1984, the trial court entertained several pretrial motions: (1) a motion to preclude the State from seeking the death penalty; (2) a motion for change of venue; and (3) a motion to sever the indictment. The court denied each of defendant's motions. On appeal, defendant challenges only the trial court's denial of the severance motion. Infra at 272-76.
Defendant also claimed that the various statements she gave to police were obtained in violation of the rights granted to her under Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). The trial court conducted a Miranda hearing and concluded that the statements were admissible. On appeal, defendant challenges only the trial court's decision to admit portions of her statement of December 28, 1983. Infra at 277-81.
*266 E. The State's Case
The prosecution's case against Marie Moore was based principally on the testimony of Ricky Flores, as well as that of the surviving victims, namely, Luis Montalvo, Harriet Bayne, and Mary Gardullo. The prosecution used the testimony of the victims to bolster Flores' credibility because their versions of the events in the first two time periods were consistent, for the most part, with Flores' testimony. This bolstering was necessary because Flores was the only witness to the killing of Theresa Feury other than Marie Moore, and it was his testimony that provided the basis for the murder charge. The testimony from Flores and the victims was supported by Moore's four contradictory statements in which she substantially altered her story in an attempt to mislead the authorities. In addition, the testimony of Mrs. Gioia, Theresa's grandmother, as well as that of the DYFS investigators, served to show that Moore deceived these people in an effort to conceal the criminal acts in the household.
The State attempted to show that Moore was the principal who directed Flores and controlled events in the household. In this connection, the State presented a great deal of testimony showing that Billy was a guise that Moore used in order to control her victims and to exercise power over them. The testimony of Flores, Luis Montalvo, Harriet Bayne, and Mary Gardullo was consistent with respect to the phone calls that brought Billy into the house and the first appearance of Billy through Moore. The testimony showed that Moore would separate herself from Billy so that the victims would continue to care for her, while at the same time remain fearful of Billy. The State therefore argued in its case-in-chief that Moore enjoyed controlling her victims, obtained gratification from her power over them, and used them for monetary gain.
F. Defense's Case
The defense presented expert testimony and attempted to elicit testimony from the State's witnesses to support defendant's *267 contention that she was legally insane. Alternatively, defendant sought to establish on cross-examination of the surviving victims and Flores that it was Flores, not Moore, who controlled and directed the household.
In cross-examining Flores, defense counsel sought to establish that Flores controlled the events in the household. Defense counsel tried to elicit an admission from Flores that he designed the punishments, and that he enjoyed abusing his victims. In addition, defense counsel focused on Flores' beatings and abuse of Marie Moore to substantiate the claim that Moore was in fact a victim. Defense counsel also vigorously cross-examined Flores concerning Theresa's final days, particularly the day of her death, in an effort to demonstrate that he, not Moore, murdered the victim.
In support of her insanity defense, defendant called three expert witnesses whose testimony the State countered in rebuttal. The defense experts testified that defendant suffered from a multiple personality disorder that rendered her legally insane. One of the experts testified that the multiple personality disorder was the result of defendant's history of sexual abuse. The experts also concurred in their observation that defendant suffered from brain damage, namely, frontal lobe atrophy. The defense supplemented the experts' testimony with evidence of a history of seizures, as well as evidence of defendant's general psychological history. A more detailed account of the insanity defense testimony will accompany our disposition of the diminished capacity issue. Infra at 281-88.
In addition to rigorously cross-examining defendant's expert witnesses, the State called three expert rebuttal witnesses. These witnesses concluded that defendant did not suffer from a multiple personality disorder, that she was in fact malingering, and that she was therefore not legally insane. They did, however, conclude that defendant suffered from a personality *268 disorder of some type, one of the witnesses characterizing it as an antisocial personality disorder. The State also called defendant's parents to counter the defense's claim that defendant's father had sexually abused her, resulting in the supposed multiple personality disorder. Mr. Moore denied the allegations of abuse. The summations that followed have not given rise to any issues on appeal.
G. Jury Charges & Deliberations
The trial court granted defendant's motion for a lesser-included-offense instruction of criminal restraint for the kidnapping charge, but refused the defense's motion for a lesser-included-offense charge of manslaughter for the capital murder charge. Infra at 288-93. In addition to the challenges concerning the lesser-included offense charge for capital murder, defendant argues that the charge on "by your own conduct" constitutes reversible error, and for the first time on appeal argues that the charge should have included a diminished capacity instruction. Infra at 296-303.
After charging the jury on each of the thirty-three counts, the court charged the jury on the insanity defense, stating first that it could be offered for each of the offenses. The court then stated that if the jury found the defendant not guilty of an offense, it was not to consider the insanity defense with respect to that count. The court further instructed that if the jury found her guilty of an offense, it must then consider whether she was legally insane at the time. The trial court gave the model charge on insanity. On November 15, the jury returned its verdict, rejecting the insanity defense for all counts. The jury found defendant Moore guilty on all counts, except aggravated assault of Luis Montalvo, burglary, and attempted murder. The jury was deadlocked with regard to the aggravated assault and burglary charges, and unanimously acquitted defendant of attempted murder. The jury found the defendant *269 guilty on all other charges, including murder by her own conduct, and the penalty phase followed.
H. Penalty Phase and Sentencing
Prior to the start of the penalty phase proceeding, one of the jurors, Mr. Sessler, gave the trial court a doctor's note that indicated that his blood pressure was out of control, that he might be having angina attacks, and that he was very nervous and upset. The court conferred with counsel, who expressed no opposition to the trial court's decision to remove Mr. Sessler and draw the name of an alternate to serve as a juror for the penalty phase. The defendant now challenges that ruling on appeal, claiming that the trial court committed reversible error by failing to instruct the jury that it had to deliberate anew on the guilt phase charges with the alternate juror. Infra at 304-07.
After choosing and seating the alternate juror, the trial court instructed the jury concerning the aggravating and mitigating factors, as well as other law affecting the penalty determination. The prosecutor relied on the evidence and testimony produced during the guilt phase. The defense also relied on guilt phase evidence and testimony, but in addition introduced the testimony of Tammy Moore, Betty Borressen (Tammy Moore's social worker), Maggie Cooper of the Hawthorne Bible House, and Gladys Mirabal of the Passaic County Jail. Their testimony was intended to show that Moore was involved in helping her daughter Tammy adjust, and that she cared for her fellow inmates.
Based on the guilt-phase evidence, the prosecution presented the following aggravating factors:
(1) the murder of Theresa Feury was outrageously or wantonly vile, horrible or inhuman in that it involved torture, depravity of mind, or an aggravated battery to Theresa Feury, 2C:11-3c(4)(c);
(2) the murder of Theresa Feury was committed for the purpose of escaping detection, apprehension, trial, punishment or confinement for another offense or offenses committed by the defendant or another, 2C:11-3c(4)(f); and
*270 (3) the murder of Theresa Feury was committed while the defendant was engaged in the commission of aggravated sexual assault, or kidnapping, or both, on Theresa Feury, 2C:11-3c(4)(g).
Defense counsel, who conceded in his opening that the evidence supported the foregoing aggravating factors, presented five mitigating factors to the jury:
(1) the defendant was under the influence of extreme mental or emotional disturbance insufficient to constitute a defense to prosecution, 2C:11-3c(5)(a);
(2) the age of the defendant at the time of the murder, 2C:11-3c(5)(c);
(3) the defendant's capacity to appreciate the wrongfulness of her conduct or to conform her conduct to the requirements of the law was significantly impaired as the result of mental disease or defect, but not to a degree sufficient to constitute a defense to prosecution, 2C:11-3c(5)(d);
(4) the defendant has no significant history of prior criminal activity, 2C:11-3c(5)(f); and
(5) any other factor which is relevant to the defendant's character or record or to the circumstances of the offense, 2C:11-3c(5)(h).
Defense counsel argued that the mitigating factors outweighed the aggravating factors. In a brief summation, the prosecutor confined his argument to the law and did not seek to inflame the jury. Defendant does not challenge the State's summation on appeal.
The trial court's penalty phase instructions were defective in several important respects, warranting reversal of the death penalty. These defects and the relevant portions of the charge will be discussed in more detail below. Infra at 303-04.
The jury deliberated for seven hours on November 19, 1984, before returning a sentence of death. The jury unanimously found beyond a reasonable doubt that each of the three aggravating factors existed. At least one member of the jury found that four of the five mitigating factors existed, rejecting only (5)(f), "no significant history of prior criminal activity." In accord with the verdict sheet and instructions, the jury then weighed each of the three aggravating factors separately against "the mitigating factor or factors." The jury found that the "mitigating factor or factors" did not outweigh any of the three aggravating factors, thus resulting in a death verdict.
*271 On January 3, 1985, the trial court denied defendant's motions for acquittal and a new trial. The trial court then vacated the conviction for felony murder, count twenty-one, "because it merges with the conviction under Count 20 for murder for which the defendant has already been sentenced to death." The court thus dismissed count twenty-one. The court then imposed lengthy sentences for the remaining counts, most to run consecutively, so that the aggregate is a term of 224 1/2 years, with an 87 1/2 year parole ineligibility.
II.
Constitutionality of Death Penalty Statute
Defendant challenges the constitutionality of our State's death penalty statute[1] on two grounds, both of which we have rejected in an earlier case. The defendant attacks this State's capital punishment statute, N.J.S.A. 2C:11-3, on both federal and state grounds claiming it to be violative of the prohibition against cruel and unusual punishment. U.S. Const. amends. VIII, XIV; N.J. Const. of 1947 art. I, para. 12. We addressed this issue in State v. Ramseur, 106 N.J. 123, 166-82 (1987), and now reaffirm our holding in Ramseur that our State's capital punishment statute is not violative of either the federal or the state constitution's ban on cruel and unusual punishment. Next, defendant contends that aggravating factor c(4)(c) is so inherently vague as to violate the due process requirements of the United States and New Jersey constitutions. For the reasons expressed in State v. Ramseur, id. at 197-211, we reject that contention again today.
*272 III.
Pretrial Issues
A. Death Qualification of Jurors
Defendant relies on the defendant's brief in State v. Ramseur to support her claim that New Jersey's process of death qualification of jurors deprives capital defendants of the right to an impartial jury under the federal and state constitutions. In State v. Ramseur, supra, 106 N.J. at 248-54, we held that the death qualification of jurors prior to the guilt phase of a capital trial was constitutional under both the federal and state constitutions and did not offend notions of fundamental fairness. We find no reason to depart from that holding.
B. Severance of Indictment
Defendant claims that it was reversible error for the trial court to deny her pretrial motion for severance of the indictment. Defendant contends that the court should have severed the pre-murder (including the murder) counts of the indictment, counts one through twenty-one, from the post-murder counts, counts twenty-two through thirty-three. As the State correctly points out, the distinction between counts one through twenty-one and twenty-two through thirty-three is artificial, because three of the twelve so-called post-murder counts occurred before the murder, and six of these counts alleged conduct that occurred both before and after the murder. Counts twenty-seven, false swearing by Moore to police in June 1982, and counts thirty-one and thirty-two, the burglary and theft of Mrs. Gioia, Theresa's grandmother, were committed prior to the murder. Counts twenty-two through twenty-five, charging Moore with sexual assault on, debauching the morals of, interfering with the custody of, and hindering apprehension of Richard Flores, as well as count thirty, endangering the welfare of Tammy Moore, and count thirty-three, theft by deception from Mrs. Gioia, were committed both before and after the murder. Only three of these twelve so-called post-murder *273 counts, attempted murder of Flores (count twenty-six) and tampering with witnesses Tammy Moore and Lydia Santiago (counts twenty-eight and twenty-nine), were committed exclusively after the murder.
In determining whether separate crimes should be joined and charged in one indictment, Rule 3:7-6 states:
Two or more offenses may be charged in the same indictment or accusation in a separate count for each offense if the offenses charged are of the same or similar character or are based on the same act or transaction or on 2 or more acts or transactions connected together or constituting parts of a common scheme or plan. Relief from prejudicial joinder shall be afforded as provided by R.3:15-2.
Defendant argues that the "post-murder" counts are "too separate and too distinct from one another in their elements" and so should not have been joined. Moore argues that the instant case is similar to Drew v. United States, 331 F.2d 85 (D.C. Cir.1964), in which the court held that separate and distinct criminal acts "`not arising out of the same transaction or dependent upon the same proof,'" should not be joined. Id. at 89 (quoting Kidwell v. United States, 38 App.D.C. 566, 570 (1912)). The State counters by arguing that severance was not required in this case where the various counts formed part of a common scheme or plan.[2]
New Jersey courts have consistently held that where the evidence establishes that multiple offenses are linked as part of the same transaction or series of transactions, a court should grant a motion for severance only when defendant has satisfied the court that prejudice would result. State v. Briley, 53 N.J. 498, 503 (1969); State v. Begyn, 34 N.J. 35, 56-57 (1961); State v. Manney, 26 N.J. 362, 368 (1958); State v. Kent, 173 N.J. Super. 215, 220 (App.Div. 1980); State v. Whipple, 156 N.J. Super. 46, 51 (App. Div. 1978); State v. Cole, 154 N.J. Super. 138, 142-43 (App. Div. 1977), certif. den., 78 N.J. 415 (1978). The appellate courts have also consistently held that the trial court's *274 decision on whether prejudice exists is entitled to "a wide range of discretion." State v. Manney, supra, 26 N.J. at 368. Moreover, courts have held that "the mere claim that prejudice will attach" is not sufficient to support a motion for severance, and require some showing that the joinder of offenses would prejudice the defendant. State v. Kent, supra, 173 N.J. Super. at 220; see also State v. Manney, supra, 26 N.J. at 368 ("mere possibility of such harm is not enough to bar joinder or consolidation; if it were, nothing would remain of the rule").
In the instant case, the thirty-three counts of the indictment are related parts of the same common scheme or plan. Defendant must therefore show that even though the acts can be joined in one indictment, the joinder is nonetheless prejudicial under Rule 3:15-2(b), which states:
(b) Motion by Defendant and State. If for any other reason it appears that a defendant or the State is prejudiced by a permissible or mandatory joinder of offenses or of defendants in an indictment or accusation the court may order an election or separate trial of counts, grant a severance of defendants, or direct other appropriate relief.
The trial court denied Moore's pretrial motion for severance. In denying the motion, the trial court stated:
I have reviewed the Indictment itself and its allegations. I have reviewed the position of the State as set forth in its brief as to its contentions as to what would be established at trial and I find that there other than the murder counts which are covered by counts twenty and twenty-one, all of the other counts in the Indictment would be admissible under Rule 55, and I find that under these circumstances the motion to sever should and will be denied at this particular point in time. But I want it noted that my decision on severance is restricted at this point in time solely as to the guilt or non guilt at trial.
The trial court properly noted that a key factor in determining whether prejudice exists from joinder of multiple offenses is whether the evidence of these other acts would be admissible in separate trials under Evid.R. 55. See State v. Kent, supra, 173 N.J. Super. at 220; State v. Maddox, 153 N.J. Super. 201, 207 (App. Div. 1977).
Evid.R. 55 states:
Subject to Rule 47, evidence that a person committed a crime or civil wrong on a specific occasion, is inadmissible to prove his disposition to commit crime or civil *275 wrong as the basis for an inference that he committed a crime or civil wrong on another specific occasion but, subject to Rule 48, such evidence is admissible to prove some other fact in issue including motive, intent, plan, knowledge, identity, or absence of mistake or accident.
The danger that Evidence Rules 55 and 47 seek to prevent is that a defendant will be prejudiced by evidence of other acts such that a jury will convict because he or she is a bad person disposed to commit crime. State v. Garfole, 76 N.J. 445, 450-51 (1978).
The evidence in the instant case of other crimes was not offered to show a propensity to commit crime or that the defendant should be convicted because of her bad character. The evidence was offered to explain the circumstances surrounding the death of Theresa Feury and to show that her death was the result of a plan orchestrated and controlled by the defendant. The evidence of the other crimes was relevant to Moore's motives because it helped establish the prosecution's contention that she controlled the events in the house, that one motive was Moore's desire to extort money from victims in the household, and that she rather than Flores controlled what was happening in the household.
The trial court's decision to deny the motion for severance is further supported by two recent Appellate Division opinions, cited by the trial court in making its decision. In State v. Coruzzi, 189 N.J. Super. 273 (App. Div. 1983), the court held:
It is clear that where there is a course of conduct on the part of a defendant such as to make evidence of one transaction relevant to any other transaction for the purpose of establishing motive, intent or common scheme or plan, then the trial judges may properly deny severance. This is because a defendant will not suffer any more prejudice in a joint trial than he would in separate trials, because the evidence of the other alleged crimes would be admissible in any event under Evid.R. 55.
[Id. at 299 (citing State v. Kent, supra, 173 N.J. Super. at 220).]
The careful consideration that the trial court gave to the motion further undercuts defendant's contention that the denial was an abuse of discretion. The defendant's position, however, is even further weakened by the jury's verdict acquitting Moore of count twenty-six, attempted murder of Flores, one of the *276 three pure "post-murder" counts. In State v. Manney, the court held that the question with respect to joinder or consolidation was "whether a jury is likely to be unable to comply with the trial court's instruction." 26 N.J. at 368. In the instant case, the trial court instructed the jurors that they had to establish the elements to each count separately, and the jury clearly was able to comply as evidenced by the acquittal on count twenty-six and failure to reach a verdict on count two (aggravated assault upon Luis Montalvo) and count thirty-one (burglary of Mrs. Gioia's apartment). In State v. Hines, 109 N.J. Super. 298 (App. Div.), certif. den., 56 N.J. 248 (1970), cert. den., 400 U.S. 867, 91 S.Ct. 108, 27 L.Ed.2d 106 (1970), the Appellate Division rejected defendant's claim that three charges should have been severed, noting that prejudice was not suffered because the jury convicted on one but refused to convict on the remaining two charges. Id. at 306; see also State v. Scioscia, 200 N.J. Super. 28, 43 (App. Div. 1985) ("the jury's ultimate verdict, convicting four defendants while failing to resolve the question of guilt or innocence of the others, convincingly demonstrates that they were able to comply with the court's charge").
The absence of prejudice to defendant, Moore, is evidenced by the jury's verdict, and more importantly by the fact that the evidence of these other crimes would have been admissible under Evid.R. 55. We are thus persuaded that the trial court's denial of the severance motion was proper. Finally, we note that severing the counts would have entailed a separate trial or trials on these other counts, in which the same witnesses would have had to testify. Thus, interests of judicial economy and efficiency also support joinder of all counts in one trial. Courts may consider such factors when deciding motions for severance, and coupled with defendant's failure to show prejudice, they lend further support to the trial court's decision. See State v. Manney, supra, 26 N.J. at 366; State v. Scioscia, supra, 200 N.J. Super. at 42-43. We caution, however, that in a capital murder case the trial court must be careful that the *277 jury is properly instructed at the outset of the penalty phase that the other counts are not aggravating factors and are not to be considered as evidence of aggravating factors. See State v. Monturi, 195 N.J. Super. 317, 327 (Law Div. 1984). If the trial court believes that proper limiting instructions are not sufficient to protect the defendant from prejudice that would result from the joinder of the offenses, then the trial court must either grant defendant's motion for severance of the indictment or impanel a new jury for the penalty phase.
C. Miranda Issue
Defendant contends that the trial court committed reversible error by admitting into evidence portions of her December 28th statement to police. She claims that portions of that statement were taken in violation of her fifth amendment rights. According to defendant, the Assistant Prosecutor who interviewed her continued to question her despite her request to speak to an attorney. Defendant argues that the statements obtained after this request, in which Moore admitted lying to Theresa's grandmother about Theresa's whereabouts, and claimed Flores made her lie, should have been suppressed, and that their admission was "sufficiently prejudicial to warrant a new trial." The State counters by arguing that Moore withdrew her initial request for counsel, that she re-initiated the conversation, that the Assistant Prosecutor did not coerce her subsequent testimony, and that Moore, after being readvised of her Miranda rights, voluntarily, intelligently, and knowingly waived her rights with respect to the statement at issue.
At the Miranda hearing, John Laky, Assistant Prosecutor in the Passaic County Prosecutor's Office, was the only witness to testify about the December 28th interview. Laky testified that Detective Stell brought Moore into his office at approximately 3:25 p.m. Detective Stell advised Moore of her rights. Moore stated that she understood her rights, and then signed the forms indicating that she understood and waived her rights.
*278 Assistant Prosecutor Laky then advised Moore again that she was a suspect in Theresa Feury's kidnapping and murder and that he wanted to question her. In response to questions, Moore, after admittedly lying about Billy, stated that Billy was in her mind, that Flores could bring him out, that she did not remember what happened when she became Billy, and that Billy and Flores were close. When Moore admitted that she had been lying and that Billy was in her mind and could be brought out, Laky switched on a tape recorder. At this time, Laky did not tell anyone that he was taping, but when the tape ran out as Moore was describing what Flores did to Theresa Feury, Laky brought the tape recorder out. Moore said she had no objection to being taped. Laky's testimony was based on his review of these tapes, which, though they were somewhat garbled, were understandable after repeated listenings.
After the second tape ran out at 5:25 p.m., Moore asked how she was doing, and in response Laky told her that she was still a suspect and would probably be charged in the murder and kidnapping. Moore was upset by this, stating that she "didn't do it." What follows is the basis for her claim on appeal. Moore then was permitted to go to the bathroom, and on returning stated, "For my own protection, I think I should see an attorney." Laky responded, "Absolutely, you have the absolute right to do that. I will turn the tape off and that will be the end of the conversation." Moore then stated in response, "Okay, I didn't necessarily mean that."
During the ensuing conversation between Moore and Laky, the Assistant Prosecutor repeatedly reminded defendant that she had requested to speak to an attorney and was therefore entitled to discontinue the conversation at that time. When Moore asked Laky what would happen to her if she ended the conversation at that time, Laky responded that whether she continued to speak or not, she would in all likelihood be charged with the murder and kidnapping of Theresa Feury. When Moore insisted that she had done nothing, Laky explained to her that she could be liable for the crimes as an accomplice. *279 Laky then reminded Moore again that she had an absolute right to remain silent, to which Moore responded that she wished to continue.
Defendant having expressed a desire to continue, Laky informed her that he would need to have Detective Stell advise her of her rights again. Laky also told defendant at that time that he was prepared to honor her request for an attorney, and informed her that an attorney could be provided for her if she did not have one already. In response to defendant's question, Laky told Moore that she would be held in the County Jail while she awaited counsel, adding that she could receive psychiatric treatment there. At that point, Laky turned off the tape recorder, signalling the end of the conversation. Moore immediately expressed her desire to continue the conversation. Laky again reminded defendant that she had an absolute right to remain silent and await counsel. Laky then turned the recorder back on and asked defendant yet again whether she understood her rights and whether she wanted to continue the conversation. After she responded affirmatively, Detective Stell re-advised Moore of her Miranda rights, and defendant expressed her willingness to cooperate.
After agreeing to waive her rights again, Moore told Laky more about Theresa's mistreatment, Theresa's death, and how she had tried to help Theresa. These statements were consistent with what she said on December 23rd and are not challenged. Moore also admitted to lying to Theresa's grandmother but blamed Flores for this. Moore claims that the court should have suppressed these statements and that its failure to do so was prejudicial error, requiring reversal of the convictions.
After hearing argument from Moore's counsel and the State regarding Moore's request for an attorney, the trial court rejected defendant's suppression motion. The trial court found that the statement she made before her request for counsel was admissible because it was pursuant to a knowing and voluntary *280 waiver. With respect to the statements following Moore's request for an attorney, the trial court relied on the cases of Edwards v. Arizona, 451 U.S. 477, 484-85, 101 S.Ct. 1880, 1885, 68 L.Ed.2d 378, 386 (1981) (interrogation of defendant after request for counsel improper "unless accused himself initiates further communication, exchanges, or conversations with the police"), and State v. Wright, 97 N.J. 113, 126 (1984) (no valid waiver of right to counsel where "[d]efendant did not initiate further communication with the investigators he made no inquiry or overture that would demonstrate a desire to discuss the pending charge"). Noting that defendant here initiated the conversation with Laky, the trial court concluded that "the State has established by the totality of the circumstances and beyond a reasonable doubt that she, again, freely and knowingly waived her Miranda rights and voluntarily continued to speak to Mr. Laky."
We agree with the trial court's conclusion that it was defendant who initiated the conversation with Laky following her invocation of her right to counsel. Prior to the resumption of that conversation, the police properly reissued Miranda warnings to the defendant. See State v. Hartley, 103 N.J. 252, 267 (1986). We likewise concur with the trial court's further conclusion that she knowingly and intelligently waived her right to counsel. As we stated in State v. Kennedy, 97 N.J. 278, 286 (1984),
[i]n making this relevant inquiry, the emphasis has focused upon whether, as an individual, case-by-case matter, a waiver of the right to counsel has been knowing, voluntary and intelligent. See Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 1023, 82 L.Ed. 1461, 1466 (1938). As stated in North Carolina v. Butler, supra, 441 U.S. [369], at 374-75, 99 S.Ct. [1755], at 1757-58, 60 L.Ed.2d [286], at 293 [(1979)], "[e]ven when a right so fundamental as that to counsel at trial is involved, the question of waiver must be determined on the particular facts and circumstances surrounding that case, including the background, experience and conduct of the accused.
We are persuaded, as was the trial court, that the totality of the circumstances in the instant case support the conclusion that Moore knowingly and intelligently waived her right to *281 counsel. Consequently, the court properly admitted the challenged statement into evidence.
IV.
Alleged Trial Errors
A. Charge of Diminished Capacity and Lesser-Included Offenses
The defendant argues that evidence submitted as part of her insanity defense supported the alternative defense of diminished mental capacity, namely, that a disease of the mind prevented her from "knowingly" or "purposefully" murdering Theresa Feury. Defendant claims that the trial court committed reversible error by failing to instruct the jury that diminished capacity could mitigate murder to aggravated manslaughter. The defendant supplemented this argument following this Court's decision in State v. Ramseur, supra, 106 N.J. 123 claiming that because the Ramseur jury received an instruction on aggravated manslaughter, the jury below should have received a similar instruction. In Ramseur, we rejected the claim that diminished capacity mitigates murder to manslaughter. Instead, we concluded that "diminished capacity does not operate to transform an offense, it can only negate it." Id. at 270. In that connection, we observed that "diminished capacity either negates the state of mind required for a particular offense, if successful, or it does not. It either provides a complete defense, if successful, or it does not." Id. at 269.
In the recent case of State v. Breakiron, 108 N.J. 591 (1987), we had occasion to consider in depth the defense of diminished capacity. There, defendant was convicted of murdering a young woman, as well as other related offenses. He presented an insanity defense to all charges and argued that if insanity were not established, the evidence of mental disease or defect still showed that the killing was not "knowing" or "purposeful." Id. at 593. The trial court instructed the jury on insanity but refused to instruct that the evidence of mental disease or *282 defect could be used to negate the required "knowing" or "purposeful" element for murder. Id. at 594. In reversing the Appellate Division's split decision affirming the conviction, we held that defendant was entitled to a jury charge that the evidence of mental disease or defect could negate the required elements of purposeful or knowing conduct with respect to the murder charge. Id. at 617-18. We thus reversed defendant's murder conviction because the charge to the jury did not allow it to consider whether the evidence presented in the insanity defense negated the elements of murder.
In reversing defendant's conviction in State v. Breakiron, we noted that "the diminished capacity defense was designed by the Legislature not as a justification or an excuse, nor as a matter of diminished or partial responsibility, but as a factor bearing on the presence or absence of an essential element of the crime as designated by the Code." 108 N.J. at 608. Breakiron had argued that by characterizing the diminished capacity defense as an affirmative one, N.J.S.A. 2C:4-2 impermissibly shifted to him the burden of disproving an essential element of the crime. We rejected defendant's argument, noting that "when the Code says that mental disease or defect is an affirmative defense that must be proven by a preponderance of the evidence, it does not mean that the defendant must disprove that the act was knowing or purposeful." Id. at 611. In our view, the defendant's burden is simply to "show that he or she suffered from a mental disease or defect that is relevant to the mental state of the offense." Ibid. Moreover, we concluded that it was not impermissibly unfair to impose that burden on a defendant wishing to avail him or herself of the diminished capacity defense. Id. at 612-14. We found support for that conclusion in the fact that "[w]hether or not mental disease or defect is established the State always bears the burden of proving beyond a reasonable doubt the essential mental elements of the crime charged." Id. at 613. The defense's "sole function is to establish the absence of an essential element of the crime...." Id. at 612.
*283 Breakiron also afforded this Court an opportunity to discuss the quality of evidence that would support a charge of diminished capacity: "the only evidence of mental defect or disease that should be admitted on the defense is that relevant to the question of whether the defendant had the requisite mental state to commit the crime." 108 N.J. at 618. We also advised trial courts as follows:
Because we agree with the view that diminished capacity as it exists under the Code is "evidence which merely denies the existence of facts which the State must prove to establish [the essential elements of first degree murder]," State v. DiPaolo, supra, 34 N.J. [279] at 294, we believe that the allocation of responsibility between judge and jury requires that competent reliable evidence be submitted to the jury and that a diminished capacity charge be given to the jury when competent reliable evidence has been offered. [Id. at 617.]
In discussing the admissibility of evidence of diminished capacity, we noted in Breakiron that "[i]n some cases the evidence clearly will be admissible as part of an insanity defense." 108 N.J. at 619. In cases where there is no insanity defense, we advised trial courts to conduct a Rule 8 hearing in order to determine the admissibility of proofs. Where an insanity defense has in fact been presented, we advised the trial court to formulate its diminished capacity charge by referring to the standards that we suggested a trial court employ when evaluating defendant's proffer: (1) that the condition defendant purports to establish is relevant to his or her ability to have formed the requisite criminal mental state; (2) that the medical theory underlying the effect of the condition is generally accepted within the scientific community; and (3) that the evidence is relevant to show the existence of the condition. Id. at 619. "Whether the defendant's evidence establishes the condition, and whether the condition diminished defendant's capacity to form the requisite criminal mental state, are issues left to the jury as part of its ultimate determination of criminal guilt or innocence." Id. at 620.
In the instant case, where defendant did in fact present an insanity defense, the record persuades us that sufficient competent evidence was adduced at trial to support a charge of *284 diminished capacity. As part of her insanity defense, defendant offered evidence that would permit a jury to decide whether she suffered from a condition that diminished her capacity to form the "knowing" or "purposeful" mental state required to convict her of murder. The trial court, however, instructed the jury only on the insanity defense and did not instruct the jury that the evidence presented as part of that defense could be used to negate the elements of count twenty, the purposeful or knowing murder.
As in State v. Breakiron, Moore was charged with both purposeful and knowing murder. In Breakiron, we noted that "[t]he former state of mind evidences a conscious object and desire, the latter, that the defendant be practically certain that death would result." 108 N.J. at 615. Moore's insanity defense testimony presented evidence that her diminished mental capacity, though perhaps not full legal insanity, negated the "purposeful" and "knowing" elements of the murder charge.
While the main thrust of Moore's insanity defense involved the issue of multiple personality, the defense also introduced evidence of defendant's psychological history in an effort to demonstrate that her mental illness was not a recent fabrication. Defendant introduced a letter that Moore's aunt sent to a neurologist/psychiatrist whom defendant consulted on only one occasion in 1968. Defendant's aunt observes in that letter to the psychiatrist that defendant exhibited characteristics of "split personality." Although not a trained psychologist, defendant's aunt attributed defendant's radically changing disposition to some form of psychological disorder. Defendant also produced the testimony of a psychologist whom she consulted briefly in 1978, Margaret Judge Corny. After finding little physical cause for defendant's seizure ailment, a colleague referred defendant to Ms. Corny in order to determine whether the seizures defendant complained of had a psychological basis. During their consultation, defendant informed Ms. Corny that she had been raped by Mr. Ragusa, a friend's father, that she *285 had had a bad relationship with her mother, and that she was anxious and unable to work. Moreover, a representative of Caldwell College, where defendant completed one year of study, testified that defendant's teachers had noted in her records that she appeared to have personal problems.
In a further attempt to demonstrate a general background of mental illness, defendant relied on the testimony of Mary Gardullo regarding the latter's stay with defendant in California in 1978. Mary Gardullo testified that she went to California with Moore and Tammy, where they lived in an apartment next door to a woman named Helen, whom Moore befriended. Mary, who by this time knew about and believed that Moore was involved with Billy, learned that Helen was one of Billy's associates. Mary testified that Moore stayed downstairs with Helen while Helen recovered from an operation. Mary heard what sounded like Helen beating and abusing Moore. Mary would try to help Moore but was told to mind her own business, "if you know what's good for you." Mary was also very scared of Helen because Helen was supposedly tearing out Moore's hair, and starving her to satisfy Billy's request that Moore lose weight.
Mary finally left California despite Moore's threats that Billy would bomb her plane if she tried to leave Moore behind. When Mary and Moore met again in New Jersey, Moore told Mary that she had saved her life by convincing Billy not to bomb the plane, and Mary believed her and shortly thereafter moved back in with her. Mary said that Moore came back much thinner, had lost a lot of hair, and had a cast on her leg, which Moore claimed had been fractured. Mary also said that after she moved back in with Moore, the two were close and that she would care for Moore when she blacked out.
Roberta Bayne, Harriet's mother, supported Mary's testimony concerning California. She testified that Moore changed tremendously after coming back from California. Mrs. Bayne testified that she was friendly with Moore in 1976 and that in *286 1979, after she met Moore again, she told Moore that she felt that Moore had become a "hard, cold woman." Moore replied that this was due to her experiences in California. Roberta Bayne also supported Mary's testimony concerning black-out spells, stating that in 1976 Moore had to have a person with her in case she passed out. This history was used by the defense to counter the charge that Moore was faking and to support the defense experts' testimony that Moore was legally insane.
In addition to evidence of blackouts, defendant introduced evidence of a seizure disorder. In this connection, defendant relied on the testimony of Dr. Dibsie, the physician who had been treating her for seizures since 1978. Dr. Dibsie testified that the medication he regularly prescribed for defendant was used in the treatment of epilepsy. In order to substantiate that claim defendant produced testimony of others who witnessed defendant's seizures. Defendant also produced evidence indicating that she had suffered brain damage, perhaps as the result of a car crash. The defense produced the results of a CAT scan in order to demonstrate that defendant did have brain damage in the form of frontal lobe atrophy. On cross-examination of a State expert, defense counsel established that psychosis could result from head injury.
The defense produced three expert witnesses in support of its contention that Marie Moore suffered from a multiple personality disorder. Dr. Charles Opsahl, a clinical psychologist and faculty member of the Yale University School of Medicine, conducted intelligence quotient, personality, and neuro-psychological tests of defendant. During his interview with defendant, the personality of Billy also appeared. He conducted similar tests of the Billy personality, and observed that those test results differed from the results obtained when he tested Marie. Based on this observation, as well as other observations concerning differences in behavior between Marie and Billy, Dr. Opsahl believed that defendant suffered from a multiple-personality disorder. He was also persuaded that defendant had some brain damage. Opsahl's professional opinion was that *287 defendant was thus legally insane because she did not know right from wrong when she was Billy.
Dr. Dorothy Lewis, a board certified psychiatrist from New York University, administered similar tests. She also spoke with Billy who informed her that defendant's father raped her during childhood, that her father drank heavily and beat defendant's mother, and that a Mr. Ragusa had also raped defendant. Dr. Lewis concluded that Billy was psychotic, delusional, and was filled with very violent fantasies. After observing that the Billy personality exhibited traits of paranoid schizophrenia, Dr. Lewis explained that this meant that defendant also had such traits in her own personality. Dr. Lewis' expert conclusion was that defendant suffered from a multiple-personality disorder brought on by her history of sexual abuse.
Dr. James Merikangas, also on the faculty of the Yale University School of Medicine, was the final defense expert. He, too, was board certified in neurology and psychiatry. Dr. Merikangas conducted neurological tests of defendant, and interpreted CAT scan results to show that defendant had "significant" atrophy of frontal lobe brain tissue. Dr. Merikangas observed that defendant had hallucinations, grandiose delusions, and was frequently out of touch with reality. Based on his tests and observations, he concluded that defendant was psychotic and suffered from a multiple-personality disorder. He thus determined that she was legally insane.
Given the nature and extent of the testimony elicited with regard to the insanity defense, we are persuaded that ample evidence existed to support a charge to the jury that a finding of diminished capacity could negate the "knowing" and "purposeful" elements of murder. We believe there was sufficient evidence to warrant a diminished capacity charge, particularly when we "`view[] the evidence and legitimate inferences to be drawn therefrom in the light most favorable to defendant....'" Breakiron, supra, 108 N.J. at 617. Accordingly, we find that the trial court committed reversible error by *288 failing to charge the jury that diminished capacity could negate the knowing or purposeful elements of the murder count. We so find despite the fact that defendant did not request such an instruction. As we made clear in Ramseur, "the trial court has a duty `to charge the applicable law to the jury based upon facts regardless of what requests counsel may make....'" 106 N.J. at 270-71 n. 62. Defendant had presented sufficient evidence at trial to warrant a diminished capacity instruction, an instruction that would have permitted the jury to determine whether the State had proved the "knowing" and "purposeful" elements of murder beyond a reasonable doubt. This is particularly relevant in this case where the defendant sought and was denied a charge on manslaughter and aggravated manslaughter.
We also find reversible error in the trial court's failure to charge the jury with respect to aggravated manslaughter and manslaughter, as defendant had requested. Our review of the record persuades us that the evidence at trial would have warranted the jury's consideration of an aggravated manslaughter charge, particularly if the jury had believed that defendant's diminished capacity negated the knowing and purposeful elements of murder. Because the trial court failed to charge the jury with respect to diminished capacity and the lesser-included offense of manslaughter, we reverse defendant's murder conviction.
It is clear that "[a] charge on a lesser-included offense cannot be automatically given to a jury when the defense of diminished capacity is raised by a defendant." Ramseur, supra, 106 N.J. at 269. However, "negating the mental state for murder by producing evidence of mental disease or defect does not prohibit a conviction for manslaughter provided the essential elements of that crime are present." Breakiron, supra, 108 N.J. at 610. As we noted in Ramseur, "the `included offense' statute, N.J.S.A. 2C:1-8(e), specifically states as to lesser-included offenses that the court shall not charge the jury with respect to an *289 included offense unless there is a rational basis for a verdict convicting the defendant of the included offense." 106 N.J. at 269.
Our characterization of the interplay between the diminished-capacity and lesser-included offense instructions in Ramseur is relevant to our disposition of the instant case. There we found:
The trial court charged on aggravated manslaughter in this case not because diminished capacity could reduce the offense from murder to aggravated manslaughter, but because evidence warranted consideration of aggravated manslaughter by the jury in the event it was unpersuaded that defendant had acted "purposely" or "knowingly." The trial court determined, and we agree, that if the jurors did not find knowing and purposeful conduct, they should then appraise the evidence to determine whether defendant acted with a "conscious disregard of a substantial and unjustifiable risk," N.J.S.A. 2C:2-2, "under circumstances manifesting extreme indifference for human life," N.J.S.A. 2C:11-4 the constituent elements of manslaughter.
[106 N.J. at 269-70.]
In the instant case, the trial court should have instructed the jury that if it did not find knowing or purposeful conduct, it should then appraise the evidence to determine whether defendant was guilty of manslaughter.
Our review of the record persuades us that there was sufficient evidence to establish the essential elements of manslaughter certainly enough to warrant a charge under our law. In State v. Crisantos, 102 N.J. 265, 275 (1986), we noted that the decision to charge a lesser-included offense was governed by N.J.S.A. 2C:1-8(e):
The court shall not charge the jury with respect to an included offense unless there is a rational basis for a verdict convicting the defendant of the included offense.
As we noted in Crisantos, "the rational-basis test of the Code imposes a low threshold ... for permitting a charge on a lesser-included offense." Id. at 278. We thus held that "[w]hen the lesser-included offense charge is requested by a defendant, as in this case, the trial court is obligated, in view of defendant's interest, to examine the record thoroughly to determine if the rational basis standard has been satisfied." Ibid. (citations omitted). Here, defendant asked the trial court to *290 charge the jury with respect to the lesser-included offenses of manslaughter and aggravated manslaughter. We find that there was evidence in this case that would have afforded the jury a rational basis for convicting defendant of manslaughter.
The two potential lesser-included offenses for the murder count are manslaughter and aggravated manslaughter, and are defined statutorily by N.J.S.A. 2C:11-4:
a. Criminal homicide constitutes aggravated manslaughter when the actor recklessly causes death under circumstances manifesting extreme indifference to human life.
b. Criminal homicide constitutes manslaughter when:
(1) It is committed recklessly, or
(2) A homicide which would otherwise be murder under section 2C:11-3 is committed in the heat of passion resulting from a reasonable provocation.
Because we find no evidence that would give rise to a rational basis to convict defendant of passion/provocation manslaughter, we will limit our discussion to the aggravated and reckless forms of manslaughter, for which we do find evidence in the record.
The Code defines reckless conduct as follows:
A person acts recklessly with respect to a material element of an offense when he consciously disregards a substantial and unjustifiable risk that the material element exists or will result from his conduct. The risk must be of such a nature and degree that, considering the nature and purpose of the actor's conduct and the circumstances known to him, its disregard involves a gross deviation from the standard conduct that a reasonable person would observe in the actor's situation. "Recklessness," "with recklessness" or equivalent terms have the same meaning.
[N.J.S.A. 2C:2-2(b)(3).]
The State argues that the evidence supports only the verdict of knowing and purposeful murder because Moore told Theresa that she would never leave, because Theresa was starved over her last month, because each day physical violence was knowingly and purposefully inflicted on Theresa, and because defendant presented only evidence of insanity as a defense. Defendant argues that there is sufficient evidence to raise a legitimate question of whether Moore ever intended to kill Theresa. Admittedly, Theresa Feury, starved and continually punished, was in a seriously deteriorated medical condition on *291 the day of her death. Nonetheless, she died not from these causes but rather from injuries she sustained as a result of being accidentally dropped by Ricky. Moreover, defendant alleges that Moore's encouragement and orders to Ricky to inflict punishment on and withhold food from Theresa manifested an "extreme indifference to human life," rather than an intent to kill.
We find that a jury could have reasonably concluded that defendant acted recklessly in bringing about Theresa's death. Furthermore, the record below provided a rational basis on which a jury could have found that Moore caused Theresa's death by consciously disregarding a substantial and unjustifiable risk that the girl's death, the material element, would result from her pattern of conduct. One incident that could have persuaded the jury that defendant behaved recklessly, rather than knowingly or purposely, occurred several weeks before the girl's death. After weeks of confinement, continued abuse, and starvation, Theresa lost consciousness while cuffed in the kitchen. The evidence shows that Moore became alarmed and tried to bring Theresa out of her seizure. After ensuring that Theresa regained consciousness, defendant recuffed the victim in the kitchen. Evidence of this type might have persuaded a jury of two things: (1) that defendant did not intend that Theresa die; and (2) that by recuffing the victim once she regained consciousness, defendant resumed the pattern of conduct that she feared had caused the girl's death, thus supporting the view that defendant consciously disregarded a substantial and unjustifiable risk that the pattern of conduct would result in Theresa's death. It is also likely that a jury could have reasonably concluded that the pattern of conduct leading to Theresa's death manifested extreme indifference to human life.
The immediate cause of the victim's death lends further support to our conclusion that a rational basis existed for a jury to convict defendant of manslaughter. According to the medical examiner, the victim died as a result of blows to her head *292 and face. The evidence indicates that the victim received those deadly blows when Flores attempted to pick the victim off of the bathroom floor and then released her, causing her head to strike the bathtub. On the morning that this incident occurred, defendant had instructed Flores to remove Theresa from the bathroom in order to allow her daughter Tammy to ready herself for school. Flores testified that ordinarily he would uncuff Theresa from the bathroom floor and she would walk to the kitchen on her own, where she would be recuffed for the remainder of the day. Flores testified that on the morning of her death, however, Theresa did not get up on her own. Consequently, he lifted her to her knees by her shoulders and released her, expecting that she would then walk to the kitchen as usual. Instead, she fell forward and hit her head on the tub.
Given these facts, a jury could have reasonably concluded that defendant did not "knowingly" or "purposefully" cause the victim's death in this manner, but rather that defendant recklessly engaged in a pattern of conduct that manifested extreme indifference to human life and resulted in death. As this court stated in Ramseur, the trial court should charge the jury regarding "`all of the possible offenses that might reasonably be found from such facts.'" 106 N.J. at 270-71 n. 62 (quoting State v. Choice, 98 N.J. 295, 298-99 (1985)). The trial court's failure to follow that directive in the instant case by refusing to charge the jury on manslaughter and aggravated manslaughter requires us to reverse defendant's murder conviction.
The juvenile court's decision to accept Flores' manslaughter plea provides further support for defendant's claim that there was a rational basis on which a jury could have found manslaughter or aggravated manslaughter. The defendant argues that Flores inflicted the punishments on Theresa Feury and "caused her death by his own conduct," and was thus as culpable as Moore. By agreeing to accept his plea, defendant argues, the State conceded that "manslaughter is a possible crime to be found in the case sub judice."
*293 The juvenile court's decision on whether or not to accept a plea is governed by Rule 3:9-2, made applicable to the Family Court by Rule 5:1-1. State in the Interest of G.W., 206 N.J. Super. 50, 54 (App.Div. 1985); Pressler, Current N.J. Court Rules, Comment R. 5:1-1. Rule 3:9-2 provides in relevant part:
A defendant may plead only guilty or not guilty to an offense. The court, in its discretion, may refuse to accept a plea of guilty and shall not accept such plea without first addressing the defendant personally and determining by inquiry of the defendant and others, in the court's discretion, that there is a factual basis for the plea and that the plea is made voluntarily, not as the result of any threats or of any promises or inducements not disclosed on the record, and with an understanding of the nature of the charge and the consequences of the plea. When the defendant is charged with a crime punishable by death, no factual basis shall be required from the defendant before entry of a plea of guilty to a capital offense or to a lesser included offense, provided the court is satisfied from the proofs presented that there is a factual basis for the plea.
Under this Rule, the Family Court had to find that there was a factual basis for Flores' manslaughter plea. Flores, however, is not similar to Moore in that he did not direct or control the household, was a juvenile at the time, and acted at Moore's direction. Nonetheless, Flores meted out almost all of the punishments, exercised discretion in how many times he would hit the victims, and designed some of the punishment on his own, albeit to please Moore and Billy. Moreover, prior to the plea agreement the prosecutor was prepared to seek a waiver from Family Court and try him as an adult for Theresa Feury's murder. Thus, the fact that the Family Court would accept Flores' plea of guilty to manslaughter shows that a factual basis for his plea existed and offers some support to Moore's argument that the jury should have been given the option to find her guilty of a lesser-included offense.
B. Admission of Victim's Photographs
Moore argues that the trial court's decision to admit three photographs of Theresa Feury, one from a school yearbook, and two photos of the wrapped corpse as it was discovered by police constitutes reversible error. Defendant argues that the photographs *294 were highly prejudicial and had no probative value, so that under Evidence Rule 4 they should not have been admitted. Moreover, defendant argues that the prejudicial nature of the photographs of the corpse was exacerbated when juxtaposed with the school photograph, which showed Theresa Feury as a healthy school girl.
The State argues that the photographs were relevant and probative in that they supported and confirmed the testimonial evidence of Flores and Detective Stell. The State argues further that the photographs of the corpse, which showed only the form of a body wrapped in tape and bags, were not gruesome. The State also points out that the prosecutor did not use the photographs in summation, thus lessening the potential for prejudice. Finally, the State argues that the trial court's decision to admit the photographs was well within its discretion.
After initially failing to object to the admission of the school photograph, the defense withdrew its approval and argued instead that the photograph was irrelevant, highly prejudicial, and served only to invoke sympathy. The trial court admitted the photograph, finding that it was relevant and not prejudicial to the defendant.
The trial court on the following day considered the admissibility of the two photographs of the wrapped corpse. These photographs were small, color Polaroid shots of what is best described as the form of a body wrapped in tape and plastic. One of the photographs depicted an object wrapped in a quilt that was lightly stained and secured with rope. At the bottom of the object, plastic bags could be seen protruding from beneath the quilt, with duct tape wrapped around some of the plastic bags. The object depicted was situated on a wood floor with a couple of photographs, a pack of matches, and a piece of rope on the floor behind it. In the background of the photograph, one could see that a section of the wall panelling had been removed, uncovering an empty and dark space behind it. *295 The second photograph of the wrapped corpse depicted a similar background. This photograph, however, showed the object in plain view, the quilt having been removed. One could see in this photograph that the quilt was replete with dark red or brown stains. The second photograph also depicted a dark stain near the bottom of the object that was not shown in the first photograph. This photograph made clear that the image depicted was in fact a human body wrapped from head to foot with silver duct tape. Although the photograph did not reveal any body parts, one could see a good deal of white powder surrounding the head area of the body.
After hearing argument from counsel, the trial court ruled as follows:
I reviewed 35 and 36. I find that neither photograph is gruesome. I find that they are both relevant. There has been testimony in the case concerning the manner in which Theresa Feury's body was wrapped. And both will be admitted in evidence.
Evidence Rule 4 governs the admissibility of such evidence and states as follows:
The judge may in his discretion exclude evidence if he finds that its probative value is substantially outweighed by the risk that its admission will either (a) necessitate undue consumption of time or (b) create substantial danger of undue prejudice or of confusing the issues or of misleading the jury.
The trial court's decision to admit the photographs under Evidence Rule 4 is entitled to deference and should be reversed only on a finding that the court abused its discretion, thus resulting in a manifest denial of justice. See State v. Carter, 91 N.J. 86, 106 (1982).
We have held that photographs of victims are admissible unless defendant can show that the trial court palpably abused its discretion. See State v. Carter, supra, 91 N.J. at 106; State v. Thompson, 59 N.J. 396 (1971); State v. Royster, 57 N.J. 472, 485, cert. den. 404 U.S. 910, 92 S.Ct. 235, 30 L.Ed.2d 182 (1971); State v. Conklin, 54 N.J. 540, 545-46 (1969). A review of those cases shows that wide discretion is given to the trial court's determination.
*296 In State v. Thompson, supra, 59 N.J. at 419-20, we upheld the trial court's admission of a photograph of the victim lying on her back with sizable bloodstains close by and a can of mace, with which she had supposedly tried to stop her attacker, just inches from her right hand. In State v. Royster, supra, 57 N.J. at 485, the Court held that the admission of a photograph that depicted the victim "bare from the groin up and showed the point of entrance of two of the bullets which struck her," was not an abuse of discretion because the photograph had probative value and was not unduly inflammatory. Similarly, in State v. Conklin, supra, 54 N.J. at 545 the black and white photographs of the two victims showing the husband bound and blindfolded clad only in undergarments, and the nude bloodied body of his wife with a severely lacerated ear were admissible because they were relevant and within the trial court's discretion. See also State v. Vujosevic, 198 N.J. Super. 435, 448 (App.Div.) (color photographs of decedent's brutally beaten body probative on defendant's conduct), certif. den., 101 N.J. 247 (1985); State v. Hardison, 204 N.J. Super. 1, 12 (App. Div. 1983) (photograph showing extent of injuries to victim properly admitted), aff'd, 99 N.J. 379 (1985); cf. State v. Jasuilewicz, 205 N.J. Super. 558, 575 (App.Div. 1985) (color photo of victim's nude body inadmissible where wounds already in evidence), certif. den., 103 N.J. 467 (1986).
We find that the trial court did not abuse its discretion by admitting the photographs of the wrapped corpse into evidence. The two photographs of the wrapped corpse clearly had probative value because they corroborated Flores' testimony regarding the disposal of the body, as well as the testimony of Detective Stell regarding its discovery. The photographs were neither gruesome nor inflammatory. Moreover, given the overall evidence of brutality put before the jury, these photographs hardly could have prejudiced the jury.
While the admissibility of the school picture is more questionable, that photograph alone, or in conjunction with the *297 two photographs of the corpse, could not prejudice a jury that had already heard testimony exhaustively detailing the torture and other abuses that Moore and Flores inflicted on Theresa and the other victims. Moreover, the prosecutor did not refer to the photographs in summation, nor did he use them to inflame the jury during the trial. Hence, the potential for any prejudice is further lessened.
In sum, given the context in which these photographs were admitted, the non-prejudicial nature of the photographs of the corpse, and the balance of the evidence in the case, we find that the trial court's decision to admit the photographs did not constitute an abuse of discretion.
C. "Own Conduct" Requirement of N.J.S.A. 2C:11-3c
At the close of the State's case-in-chief, defendant moved for judgment of acquittal on various grounds. As part of that motion, defendant urged the court to dismiss the murder count and preclude the State from continuing to seek the death penalty. With regard to preclusion of the death penalty, defendant argued that the State had failed to prove that she committed the homicidal act "by her own conduct" in accordance with N.J.S.A. 2C:11-3c. Defendant's argument with respect to the "own conduct" requirement consisted of two principal points: (1) it was Ricky Flores, not defendant, who inflicted the various punishments, including the death blow; and (2) the Legislature, in formulating the "own conduct" requirement, expressed its intent to narrow the death-eligible class to those persons who wielded the instrumentality of death or who struck the death blow. According to defendant, the Legislature intended to exclude from the death-eligible class defendants whose culpability was premised on a theory of accomplice liability.
The State argued that defendant's reading of the legislative history was too narrow. If the Legislature had wanted to limit the death-eligible class to those who strike the fatal blow, the *298 State argued, it would have required that the murder be committed by one's "own hand," rather than by one's "own conduct." According to the State, then, the "own conduct" requirement encompassed the defendant's actions over a period of time in bringing about Theresa's death, namely, defendant's conduct in directing Ricky Flores to inflict the punishments that ultimately resulted in the victim's death.
In denying defendant's motion to preclude the State from seeking the death penalty, the trial court relied on its interpretation of the legislative history, as well as the Code's definition of "conduct" under N.J.S.A. 2C:1-14. The trial court also concluded that if the jury were to find defendant guilty of murder, it could reasonably conclude that she had committed the homicidal act "by her own conduct."
During pre-charge proceedings, defense counsel urged the trial court to instruct the jury that it could find that defendant had committed the homicidal act "by her own conduct" only if persuaded that her conduct was the "immediate, clear, and present cause of death." The trial court denied that request, and charged the jury as follows:
If you find the defendant guilty of murder, you must then determine whether the State has proved beyond a reasonable doubt whether the defendant committed the homicidal act by her own conduct. The State must prove the following beyond a reasonable doubt: One, that the defendant participated in an act or series of acts which caused the death of Theresa Feury. Two, without the defendant's participation in that act or series of acts, Theresa Feury would not have died. Three, the defendant intended to cause the death of Theresa Feury or to cause serious bodily injury to Theresa Feury which resulted in her death.
In keeping with the trial court's instructions, the jury returned separate verdicts with respect to the murder count: (1) that defendant was guilty of knowing and purposeful murder; and (2) that she committed the homicidal act by her own conduct.
On appeal, defendant continues to argue that the evidence failed to establish that she committed the homicidal act "by her own conduct." In addition, she argues that the trial court's charge with regard to that requirement was improper.
*299 N.J.S.A. 2C:11-3c provides, in pertinent part, that "[a]ny person convicted under [N.J.S.A. 2C:11-3(a)(1) or (2)] who committed the homicidal act by his own conduct or who as an accomplice procured the commission of the offense by payment or promise of payment, of anything of pecuniary value shall be sentenced" in accordance with the Act's capital punishment provisions. (Emphasis added). In State v. Gerald, 113 N.J. 40 (1988), we for the first time interpreted the meaning of the "own conduct" requirement. The victim in Gerald died as a result of multiple beatings administered by more than one person during the course of a burglary. Because the medical testimony failed to establish whose blows resulted in the victim's death, Gerald argued that he was not death-eligible. He contended that the death penalty was proper only for an actor who "`directly causes death by his own conduct, without reference to the acts of co-defendant.'" Id. at 92. We agreed that a defendant must be the direct and immediate cause of death in order to satisfy the "own conduct" requirement but rejected defendant's contention that the "single relevant concern [was] whether the defendant's conduct, standing alone, caused the victim's death." Id. at 92 (emphasis added). Instead, we concluded that the "relevant inquiry is whether or not the defendant actively and directly participated in the homicidal act, i.e., in the infliction of the injuries from which the victim died. The critical elements are that defendant in fact acted, and the immediacy of his conduct to the victim's demise." Id. at 97.
Although this case is unlike Gerald in that it does not involve death by multiple beatings, our interpretation in that case of the "own conduct" requirement is relevant here. In Gerald, we held that in order to satisfy the "own conduct" requirement, the State had to prove beyond a reasonable doubt that defendant's conduct was the direct and immediate cause of death. Our decision to limit the death-eligible class in this manner was based on our interpretation of the legislative history of the Act. Gerald, supra, 113 N.J. at 93-96. As we noted in Gerald, *300 Senator John Russo, chief sponsor of the bill, intended that only two class of murderers be subjected to the death penalty: "`[(1)] the actual perpetrator of the murder, the one who wields the gun or the knife * * * that results in death * * * [and (2)] the one who hires one to commit murder....'" Id. at 94 [(quoting Capital Punishment Act: Hearings on S. 112 Before the Senate Judiciary Committee (1982) at 2 (hereinafter Committee Hearing)].
Although the Code and the common law have abolished the distinction between principal and accomplice, we noted in Gerald that by adopting the "own conduct" requirement the Legislature reinstated the distinction for purposes of capital punishment. 113 N.J. at 96. We were persuaded that it was the Legislature's intent to preclude death-eligibility where a defendant's murder conviction was based on a felony murder charge or a theory of accomplice liability, unless, as N.J.S.A. 2C:11-3 expressly provides, defendant hired another to commit the murder. Other than that very narrow "murder for hire" exception, only the principal, i.e., the "triggerman," shall be death-eligible. Consequently, we concluded that "[a]n accomplice who neither takes part in the infliction of the fatal wounds nor hires another to commit the murder may properly be convicted of murder, but may not be sentenced to death for his or her conduct." Id. at 93. However, the Legislature made clear its intention that "[b]ecause the triggerman `is the fellow that ended somebody's life,' he alone should face a possible death sentence." Id. at 95 (quoting Committee Hearing at 18). In Gerald we concluded that although "the imputation of liability for the conduct of another suffices for a murder conviction, the defendant's `own conduct' in the commission of the murder is a prerequisite to imposition of the death penalty." Id. at 96.
It must be pointed out that the "own conduct" requirement is a triggering device used to determine whether a defendant will be death-eligible. Failure to satisfy the own conduct requirement *301 does not render a murder conviction invalid. Moreover, we recognize that the federal constitution does not require us to conclude that an accomplice cannot be death-eligible. In Tison v. Arizona, 481 U.S. 137, 107 S.Ct. 1676, 95 L.Ed.2d 127 (1987), the Supreme Court recently limited the application of the rule announced in Enmund v. Florida, 458 U.S. 782, 102 S.Ct. 3368, 73 L.Ed.2d 1140 (1982), where the Court had held that it was disproportionate to impose the death penalty on a person convicted of felony murder without finding an intent to kill. In Tison, the Supreme Court distinguished Enmund on the grounds that the defendant in the latter case had been a minor participant, while the defendants in Tison were major participants in the events leading to the murders. The Court noted that the Tison brothers helped their father and his cellmate escape (these two shot the victims), knew of the danger involved, supplied guns, and flagged down the victims' car. Consequently, the Court concluded that the Tison brothers had been more than minor participants in the killings. The Court held in Tison that the defendants, who had been convicted under Arizona's felony-murder law and accomplice liability statutes, were properly deemed death-eligible, and thus affirmed their death sentences.
As noted earlier, our death penalty scheme disallows the result reached in Tison, unless a defendant has hired another to commit murder. It is well-established that states are free to provide greater protection in their criminal justice system than the federal constitution requires. See California v. Ramos, 463 U.S. 992, 1013-14, 103 S.Ct. 3446, 3459-60, 77 L.Ed.2d 1171, 1188-89 (1983); Ramseur, supra, 106 N.J. at 167. Under our statute, the Tison brothers would not be subject to the death penalty.
In light of our interpretation of the "own conduct" requirement, we must examine the evidence in this case to determine whether it is sufficient to establish that Moore actively and directly participated in the homicidal act, i.e., in the *302 infliction of the injuries that caused the victim's death. We are compelled to conclude that the facts in evidence do not support the jury's findings that Moore committed the homicidal act "by her own conduct."
The State recognizes that Moore did not inflict the fatal blows that resulted in the victim's death. Nonetheless, the State argues that Moore was the architect behind the death of Theresa Feury, a death whose cause cannot be properly limited to the moment the victim fell and hit her head on the bathtub. Rather, the State urges the Court to view Moore's participation in causing the death of Theresa Feury in light of her entire conduct over a period of time:
The homicidal act need not be, as clearly demonstrated by this case, a single act of stabbing or shooting but may equally occur by a series of acts and omissions. The one responsible for that series of acts and omissions, as was Marie Moore so found to be by the jury's verdict, is to be justly deemed the "perpetrator" of that murder, the one who committed it "by her own conduct" regardless that the last physical act culminating in death (i.e. the lifting up of Theresa Feury on her knees to then fall and strike her head and the subsequent wrapping of Feury) was not by defendant's own hand.
If the medical evidence established that Theresa Feury's death was caused by starvation or her weakened medical condition, or by asphyxiation resulting from her being wrapped and stuffed in a crawl space while alive, we would agree with the State that a jury could find that Moore "by her own conduct" caused Theresa's death. Under those facts, a jury could find that Moore "actively and directly participated in the infliction of the injuries from which the victim died."
The medical evidence presented in this record, however, does not support that finding. According to the medical examiner, the victim died as a result of blows to the head and face caused by striking the tub. Marie Moore did not deal the victim those fatal blows. Even the prosecutor conceded that point during legal argument: "There is no question about the fact that when Theresa Feury died it wasn't ... at her hand. There is no question about that fact." That Moore solicited and then directed Flores' participation does not alter the result we reach *303 today. By limiting death-eligibility to the actual "triggerman," the Legislature expressly rejected the notion that one who solicits another to kill without payment or promise of payment should be death eligible. See Gerald, supra, 113 N.J. at 92-97.
Given our disposition of the "own conduct" issue in the instant case, we find it unnecessary to address at length defendant's claims with regard to the trial court's "own conduct" jury charge. We find however that the jury charge given in this case was improper. It made the defendant eligible for the death penalty by virtue of her role as an accomplice. Supra at 97-98. Accordingly, in this case, we find that the trial court erred by denying defendant's motion to preclude imposition of the death penalty based on the State's failure to prove that she had committed the homicidal act by her own conduct.
V.
Penalty Phase & Sentencing Challenges
Defendant raises two penalty-phase arguments that we have rejected elsewhere and that we reject here again. These include (1) that fundamental fairness requires that defendant make the initial opening statement and trial summation at the penalty phase, State v. Ramseur, supra, 106 N.J. at 318 n. 81; and (2) that a defendant's constitutional rights are violated by the lack of any finding that death was the appropriate punishment. Id. at 316-17 n. 80.
A. Weighing of Aggravating and Mitigating Factors
The State concedes that the charge on the weighing of aggravating and mitigating factors did not conform with the standards defined in State v. Biegenwald, supra, 106 N.J. at 53. The charge in the instant case did not require the jury to find that the aggravating factors outweighed the mitigating factors beyond a reasonable doubt. Were we not reversing *304 defendant's murder conviction, this shortcoming would provide independent grounds to vacate the death sentence. Consequently, we find it unnecessary to address defendant's claims with regard to the court's instructions on aggravating factors c(4)(c) and c(4)(f). We likewise find it unnecessary to address defendant's contention that a second jury should have been impanelled for the penalty phase trial pursuant to N.J.S.A. 2C:11-3c(1).
B. Seating of Alternate Penalty Phase Juror & Instruction to Deliberate Anew
Just prior to the start of the penalty phase, the trial court received a doctor's note indicating that one juror, Mr. Sessler, was very nervous and had health problems that might worsen if he continued to serve on the jury. Without objection from counsel, the trial court discharged the juror. The court convened the jury to start the penalty phase, and told the remaining fourteen jurors (one had already been excused during the guilt phase when he recognized that an expert witness was a family doctor) that Mr. Sessler had been released and that at the close of the penalty phase one of the three alternates would join the eleven remaining guilt phase jurors in penalty phase deliberations.
As part of her motion for a new trial on January 3, 1985, defendant argued that the trial court committed reversible error by failing to instruct the jury that it had a duty to deliberate anew on the guilt phase charges with the alternate juror. The trial court rejected this argument, finding no evidence of prejudice to defendant. On appeal, defendant raises the same argument, claiming that the trial court's failure to instruct the jury to deliberate anew constitutes plain error. Defendant reads State v. Trent, 79 N.J. 251 (1979), to require the trial court to give such an instruction whenever a juror is substituted during deliberations. Moore claims that the alternate was substituted during deliberations because the guilt phase and penalty phase deliberations were linked, given the *305 recognized impact of lingering doubt concerning a defendant's guilt in penalty phase deliberations, see Ramseur, 106 N.J. at 254, and the fact that guilt phase evidence was used in the penalty phase.
The State argues that defendant's claim fails because no objection was made by trial counsel, and that prejudice, if any resulted, was sustained by the prosecution because the alternate juror selected might have had reasonable doubt concerning murder, unlike the twelve who voted to convict, and so could have brought that doubt in as a new juror and voted for a life verdict. This argument was adopted by the trial court in rejecting the motion. The State argues further that penalty-phase deliberations are separate from the guilt phase, thus distinguishing Trent. Further, the State points out that a 1985 amendment to N.J.S.A. 2C:11-3c(1), which was not in place at the time of trial, expressly authorizes this kind of substitution without requiring any instructions. The Attorney General as amicus argues the same points, but adds that the court must find the failure to instruct to be plain error because it was not objected to at trial.
We find no error, plain or otherwise, in the trial court's "failure" to instruct the jury to deliberate anew upon seating an alternate juror for the penalty phase proceeding. We are not persuaded that State v. Trent is dispositive in the instant case. In fact, we find that that case is readily distinguishable. There, an alternate juror replaced a juror who fell ill during the jury's deliberations. We held, per Justice Clifford, that the trial court's failure to instruct the jury to begin deliberating again and to disregard prior deliberations constituted reversible error. This Court reasoned "`that a defendant may not be convicted except by 12 jurors who have heard all the evidence and argument and who together have deliberated to unanimity.'" 79 N.J. at 256 (quoting People v. Collins, 17 Cal.3d 687, 689, 131 Cal. Rptr. 782, 786, 552 P.2d 742, 746 (1976), cert. den., 429 U.S. 1077, 97 S.Ct. 820, 50 L.Ed.2d 796 (1977)); see also *306 State v. Corsaro, 107 N.J. 339 (1987) (juror substitution after partial verdict returned constituted plain error requiring reversal of convictions on "open charges" arrived at after substitution of juror). In the instant case, Mr. Sessler was not replaced until after the jury had considered and reached a determination regarding all the various charges brought against defendant.
Defendant's argument that the guilt and penalty phases are linked such that a final verdict in the guilt phase should be disregarded if a juror takes ill is not persuasive in light of the statute's bifurcation of guilt and penalty phases. Prior to the 1985 amendment, N.J.S.A. 2C:11-3c(1) provided that there would be a separate sentencing procedure conducted by the jury that determined guilt or innocence, "except that, for good cause, the court may discharge that jury and conduct the proceeding before a jury empaneled for the purpose of the proceeding." This provision shows that a divided process was intended by the Legislature, in which even separate juries could, for good cause, try the guilt and penalty phases. This legislative purpose is not consistent with defendant's argument that the substitution occurred during deliberations, because the split between guilt and penalty phase determinations shows the two were and are separate. Thus, there is no need to instruct the jury to begin deliberations anew under Trent or under the statute.
The 1985 amendment to N.J.S.A. 2C:11-3c(1) offers further support for the State's position because it explicitly authorizes the type of substitution made in the instant case without even mentioning that deliberations should begin again. The amendment adds to this subsection the following provision:
Nothing in this subsection shall be construed to prevent the participation of an alternate juror in the sentencing proceeding if one of the jurors who rendered the guilty verdict becomes ill or is otherwise unable to proceed before or during the sentencing proceeding.
The defendant's claim that the guilt phase and penalty phase deliberations are not distinctive is weakened further by this court's decision in Biegenwald. There, we held that re-sentencing *307 was proper using a newly selected jury, and distinguished precedent under the prior capital murder statute, particularly State v. Laws, 51 N.J. 494, cert. den., 393 U.S. 971, 89 S.Ct. 408, 21 L.Ed.2d 384 (1968), which had rejected re-sentencing on penalty alone, stating:
Because Laws was decided under a unitary trial statute and because the Laws Court's major misgiving about a separate trial on the issue of penalty the foreignness of bifurcation has been removed, Laws is not controlling precedent for the present case. [106 N.J. at 69-70.]
Thus, the Biegenwald court, as well as the Ramseur court, recognized that the capital murder statute set up a bifurcated system in which guilt and penalty phases are separate. Because neither the relevant case law nor the capital murder statute itself supports defendant's position, we find no error in the trial court's failure to instruct the jury to deliberate anew.
C. Proportionality of Defendant's Sentence vis-a-vis that of Richard Flores
Today we reverse defendant's murder conviction, and agree that the trial court's erroneous penalty-phase instructions would have provided independent grounds to vacate the death sentence. Despite that disposition, we will nonetheless briefly address defendant's proportionality argument. Defendant argued repeatedly to the jury that Flores was the more culpable party, and that his "deal" with the prosecutor was unfair, especially in light of the penalties she was to face. On appeal, Moore argues that her death sentence must be vacated because it is disproportionate to the sentence imposed on her co-perpetrator, Ricky Flores. According to defendant, the prosecutor was unauthorized to enter into a plea agreement with Flores that would permit him to escape prosecution for capital murder.
To support her argument that the prosecutor's plea bargain with Flores was impermissible, defendant relies on our interpretation of the Act in Ramseur. We noted there that "[t]he Act prevents potential capital defendants from avoiding a capital sentencing proceeding by pleading guilty to the murder charge." 106 N.J. at 195. That statement assumes, of course, *308 that the defendant who would otherwise plead guilty to capital murder is in fact death-eligible. In State v. Bey (I), 112 N.J. 45, 93-94 (1988) we held that "[i]t is patently clear to us that the Legislature never had intended to subject juvenile offenders to capital punishment, and did intend that its ameliorative amendment would apply retroactively to defendant's case." See N.J.S.A. 2C:11-3g. We thus reversed defendant Bey's capital murder conviction in order to comply with the legislative intent. Because Flores was a juvenile at the time of the murder, he is not within the death-eligible class of murderers who would be considered in a proportionality review of Moore's sentence. Consequently, defendant's proportionality claim is without merit.
We likewise reject defendant's contention that the prosecutor's plea agreement with Flores was unauthorized under the Act, namely, N.J.S.A. 2C:11-3d. That section provides that "[t]he sentencing proceeding set forth in subsection c. of this section shall not be waived by the prosecuting attorney." This section obviously requires a death-penalty proceeding where a person pleads guilty to capital murder. Here, however, Flores was not even eligible to plead guilty to capital murder, and instead pleaded guilty to a lesser offense. Our concern in Ramseur and the concern of the Legislature as reflected in N.J.S.A. 2C:11-3d was not to prevent persons from pleading guilty to lesser offenses, but rather to prevent prosecutors from coercing defendants into pleading guilty to capital murder in order to avoid a possible death sentence. As we noted in Ramseur, in 1972 "this Court invalidated the death penalty precisely because it allowed (and thereby tended to compel) defendants to forgo a trial on guilt and plead non vult in order to avoid death." 106 N.J. at 195.
D. Propriety of Custodial Sentence
Because he found that it merged with defendant's capital murder conviction, the trial court dismissed the felony *309 murder conviction at the sentencing hearing. On the remaining counts, the court imposed a custodial sentence of 224 years with 87 1/2 years of parole ineligibility. Defendant does not challenge the validity of those convictions but claims only that the sentence is excessive and manifestly illegal. We disagree.
In sentencing defendant, the trial court identified and weighed the aggravating and mitigating factors as required by N.J.S.A. 2C:44-1a & b. The court found four aggravating factors: (1) the heinous, cruel, or depraved nature of the crimes; (2) the gravity and seriousness of harm inflicted; (3) the risk that defendant will commit another offense; and (4) the need to deter. The court found only one mitigating factor, namely, that defendant had no history of prior criminal activity. Based on its finding that the aggravating factors outweighed the mitigating, the court concluded that consecutive sentences and sentences with parole stipulations were warranted. The court recognized that it had "imposed a substantial sentence calling for consecutive sentences and periods of parole eligibility because the Court finds that they are warranted by the horror of the case and the damage done to the victims who suffered over substantial periods of time."
Defendant suggests that in the event we were to reverse her murder conviction, she would have to be resentenced in accordance with the guidelines contained in State v. Yarbough, 100 N.J. 627, 643-44 (1985), particularly those guidelines governing the overall outer limit on the cumulation of consecutive sentences. Although we reverse defendant's murder conviction, we refuse to order adjustment of her custodial sentences on remand, so as to have them comply with Yarbough's consecutive sentencing guideline. As we recognized in Yarbough, "even within the general parameters that we have announced there are cases so extreme and so extraordinary that deviation from the guidelines may be called for." 100 N.J. at 647 (emphasis added). No one can doubt that defendant's brutal pattern of conduct involving the various victims fits the exception we envisioned in Yarbough. Nonetheless, we have serious *310 reservations about the length of the custodial term imposed and believe that a more realistic sentence would be one that ensured that Moore would be ineligible for parole for the remainder of her life. We thus defer to the trial court with respect to the custodial sentences it imposed and leave to its discretion any reconsideration following disposition of the murder count.
Accordingly, we reverse the judgment entered on the murder conviction and imposition of the death sentence, and remand the matter for further proceedings consistent with this opinion.
HANDLER, Justice, concurring.
This is a shocking capital-murder case. The Court, in a comprehensive, thorough and soundly reasoned opinion, reverses the defendant's murder conviction and death sentence. I concur.
The majority concludes that defendant is not death eligible because the evidence is insufficient to enable a jury to determine beyond a reasonable doubt that the death of the victim was the result of any homicidal act of the defendant committed "by her own conduct" as required under N.J.S.A. 2C:11-3c. See ante at 301-03. The Court reiterates the interpretation of this statutory requirement adopted in our recent decision of State v. Gerald, 113 N.J. 40, 93-100 (1988), where we ruled that in order to satisfy the "own conduct" requirement of N.J.S.A. 2C:11-3c, the State had to prove beyond a reasonable doubt that defendant's conduct was the direct and immediate cause of death. Ante at 299.
In this case, the Court has examined the record to determine whether the evidence "is sufficient to establish that Moore actively and directly participated in the homicidal act, i.e., in the infliction of the injuries that caused the victim's death." Ante at 301-02. The Court concludes, as noted, that the evidence is insufficient to meet this requirement. I agree, although I do not subscribe to the Court's characterization of this requirement as "`merely a triggering device for the death *311 penalty phase at the trial,'" ante at 300 (quoting State v. Gerald, supra, 113 N.J. at 99). Rather, I believe this requirement is most appropriately regarded as an "element" of the crime of capital murder that serves both to define capital murder and to differentiate it from a murder conviction thus narrowing the class of murders that are death-eligible. The element of murder entailing the actor's "own conduct" is one that separates murder from capital murder. It must be established by the State by proof beyond a reasonable doubt and should be determined by the jury in the guilt phase of the trial. See State v. Gerald, supra, 113 N.J. at 146-47. (Handler, J., concurring in part and dissenting in part). I am satisfied that for this reason, the defendant's capital murder conviction must be reversed.
I also concur in the reasons advanced by the Court for reversing the defendant's murder conviction. In particular, I agree with the Court's assessment of trial error with respect to the failure to properly and clearly instruct the jury on "diminished capacity" as an affirmative defense negating the culpable state of mind necessary to charge purposeful or knowing murder. As noted by the Court, the trial court here limited the evidence of defendant's mental disease or defect solely to the defense of insanity. Ante at 283-88.
The Court also correctly rules that the evidence was sufficient to require the charge of aggravated manslaughter and manslaughter, N.J.S.A. 2C:11-4a, b, and that the trial court erred in failing to give such an instruction. Ante at 288-89. The Court recognizes the relevance of diminished capacity evidence to the manslaughter offense. It states that "the trial court should have instructed the jury that if they did not find knowing or purposeful conduct, they should then appraise the evidence to determine whether defendant was guilty of manslaughter." Id. at 289. I would add that while the evidence of diminished capacity itself might not justify an instruction to the jury that it could, if believed, reduce murder to aggravated or ordinary manslaughter, it was nonetheless relevant evidence *312 as bearing on the manslaughter charge. It should thus have been the subject of an instruction to the jury that would clarify the difference between its consideration of diminished capacity as an affirmative defense to murder and its consideration as generally probative evidence relating to the manslaughter charge. See State v. Zola, 112 N.J. 384, 443 (1988) (Handler, J., concurring in part, and dissenting in part).
The Court determines correctly that there was reversible error in the penalty phase of the trial. The major irremediable error, conceded by the State, relates to the improper instruction on the weighing of aggravating and mitigating factors. Ante at 303. I express, however, serious reservations concerning the Court's conclusion that the substitution of an alternate juror on the penalty phase was not cognizable as error, or in any event, was not plain error warranting a reversal. Ante at 305-07. In my opinion, we should not weigh or distinguish the gravity of an error in terms of whether the error is initially noted on appeal as plain error or initially noted by defense counsel at the trial level. State v. Bey I, 112 N.J. 45, 118 (1988) (Handler, J., concurring). Such a distinction would distract and encumber the Court in exercising its constitutional and statutory responsibility in determining capital causes on direct appeal pursuant to an enhanced standard of review.
I hesitate, however, to stigmatize the substitution of the alternate juror in this case as reversible error. I am cognizant of the 1985 amendment of the death penalty statute, N.J.S.A. 2C:11-3c(1), cited by the Court, ante at 306, which authorizes such substitution. Nevertheless, I think it is unrealistic, and potentially unfair and prejudicial, to consider the penalty phase of the trial as truly bifurcated and separate from the guilt phase. There surely is no such division; rather, the entire capital murder prosecution is a continuum, with the evidence adduced at the guilt phase routinely admitted at the penalty phase. The substitution of a new juror raises the spectre of *313 "mixed" deliberations that may not capture the essence of the kind of jury deliberations that result in unanimous verdicts. See State v. Trent, 79 N.J. 251, 256 (1979); State v. Corsaro, 107 N.J. 339 (1987). If, therefore, such substitution occurs in the penalty phase, the Court should carefully instruct both the substitute juror and the original jurors concerning the need to reconsider and reassess the evidence bearing on guilt, accepting the fact that defendant has been found guilty of intentional murder. See State v. Ingenito, 87 N.J. 204 (1981). Consequently, the substitution in this case poses a genuine concern that should be carefully addressed.
Finally, I am constrained to state that I continue to adhere to my belief, expressed in State v. Bey II, 112 N.J. 123, 188-90 (1988) (Handler, J., dissenting); State v. Koedatich, 112 N.J. 225, 383 (1988) (Handler, J., dissenting); State v. Ramseur, 106 N.J. 123, 343 (1987) (Handler, J., dissenting), that the death penalty statute as enacted and applied in New Jersey violates constitutional and fundamental fairness standards. Therefore, I would also vote to reverse the death penalty on these grounds.
For reversal and remandment Chief Justice WILENTZ and Justices CLIFFORD, POLLOCK, O'HERN, GARIBALDI and STEIN 6.
Concurring in result Justice HANDLER 1.
NOTES
[1] N.J.S.A. 2C:11-3, the State's capital punishment act (L. 1982, c. 111), consisted of five subsections, (a) to (e), at the time of these crimes and their trials. The death penalty provisions are found in subsections (c) to (e). For convenience, in referring to these provisions we shall, for instance, use Sec. c(4)(a) to designate N.J.S.A. 2C:11-3c(4)(a). When cited in its totality, N.J.S.A. 2C:11-3 will hereinafter be referred to as "the Act."
[2] The Attorney General of the State of New Jersey participated as amicus curiae.
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762 F.2d 1022
*Knightv.U.S.
84-8780
United States Court of Appeals,Eleventh Circuit.
5/6/85
M.D.Ga., 596 F.Supp. 540, 596 F.Supp. 543
AFFIRMED
1
---------------
* Fed.R.App.P. 34(a); 11th Cir.R. 23.
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. PD-0396-11
DELDRICK DEVON THOMAS, Appellant
v.
THE STATE OF TEXAS
ON APPELLANT'S PETITION FOR DISCRETIONARY REVIEW
FROM THE SIXTH COURT OF APPEALS NACOGDOCHES COUNTY
Per curiam. Keasler and Hervey, JJ., dissent.
ORDER
The petition for discretionary review violates Rules of Appellate Procedure 9.3(b)
and 68.4(i), because the petition is not accompanied by 11 copies and it does not contain a
copy of the opinion of the court of appeals.
The petition is struck. See Rule of Appellate Procedure 68.6.
The petitioner may redraw the petition. The redrawn petition and copies must be
filed in the COURT OF CRIMINAL APPEALS within thirty days after the date of this
order.
Filed: April 6, 2011
Do Not Publish
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COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-11-00209-CV
In the Interest of A.B. and H.B., § From the 322nd District Court
Children
§ of Tarrant County (322-437743-08)
§ August 8, 2013
§ Per Curiam
§ Dissent by Justice Walker
§ (en banc)
JUDGMENT ON APPELLEE’S MOTION FOR REHEARING AND
MOTION FOR EN BANC CONSIDERATION
After reviewing appellee’s motion for rehearing and motion for en banc
consideration, we granted the motions on December 21, 2012. We withdraw our
September 13, 2012 opinion and judgment and substitute the following.
This court has considered the record on appeal in this case and holds that
there was no error in the trial court’s judgment. It is ordered that the judgment of the
trial court is affirmed.
SECOND DISTRICT COURT OF APPEALS
PER CURIAM
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391 Pa. 187 (1958)
Bonfitto, Appellant,
v.
Bonfitto.
Supreme Court of Pennsylvania.
Argued November 12, 1957.
January 6, 1958.
Before JONES, C.J., BELL, CHIDSEY, MUSMANNO, ARNOLD, JONES and COHEN, JJ.
*188 George J. Joseph, for appellant.
Edward J. Danser, with him Fackenthal, Teel, McGiffert & Danser, for appellees.
OPINION PER CURIAM, January 6, 1958:
Judgment affirmed on the opinion of Judge WOODRING, 10 Pa. D. & C. 2d 598.
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213 A.2d 835 (1965)
Raymond R. COLLINS
v.
STATE of Maine et al.
Supreme Judicial Court of Maine.
October 27, 1965.
*836 William Cohen, Lewiston, for plaintiff.
John W. Benoit, Asst. Atty. Gen., Augusta, for defendants.
MARDEN, Justice.
On appeal from denial of relief under post-conviction habeas corpus proceeding.
On January 12, 1961 petitioner was sentenced to serve a term of from two and one-half to five years in the State Prison. On June 22, 1964 he was released to parole.
On June 25, 1964 an incident occurred in Lewiston, Maine, which incident became the basis of a criminal complaint heard by the Lewiston Municipal Court on June 30, 1964. However, on June 25, 1964, upon evidence classified as "satisfactory" that he had violated the terms and conditions of his parole, the State Probation and Parole Board (Board) authorized the Director of that Board to issue a warrant for his arrest and return to the institution from which he was released. By instrument of the same date, the Director issued such a warrant.
The record does not reveal whether petitioner was arrested on June 25, 1964 by the parole officer and held by virtue of the parole warrant pending action by the Lewiston authorities on June 30, 1964 or whether he was arrested on June 25, 1964 by the Lewiston police and held until action by the Lewiston Municipal Court on June 30, 1964. Petitioner implies that the former statement reflects the facts. Because the June 25, 1964 incident involved an assault upon an officer it is highly improbable that he was not forthwith arrested and thereafter held by the Lewiston officers until Court action on June 30, 1964.
On June 30, 1964 a complaint was filed with the Lewiston Municipal Court against the petitioner alleging an offense of assault on June 25, 1964. He was arraigned on the same date, entered a plea of guilty and was sentenced to serve 60 days in the County Jail. On August 21, 1964 the Board resumed physical custody of petitioner and he was returned to the State Prison to continue, in confinement, execution of his original sentence. On September 10, 1964 petitioner appeared before the Board, meeting at the Prison, to be heard as to the alleged violation of his parole. Violation of parole was found and on the date of the hearing, the Board issued an order revoking the parole "as of ___ day of ___ 19___ and further orders that he be REMANDED to confinement in Maine State Prison for a period of ___."
*837 By petition dated January 1, 1965 Mr. Collins seeks relief under the post-conviction habeas corpus act alleging:
(1) That his release by the Parole Officer to the Lewiston Municipal Court to answer to the charge there against him was a waiver by the State of its jurisdiction over him to require resumption of execution in confinement of the original sentence, and
(2) That the revocation and remand order issued by the Board on September 10, 1964 is invalid in that (a) no date of the revocation of parole is recorded therein, (b) that no statement of the remaining term of confinement is entered therein, and (c) that no statement fixing the time at which he would again be eligible for consideration for parole was entered therein.
Petitioner urges that by virtue of his surrender to the Lewiston authorities, and the errors charged in the revocation and remand order, he is entitled to release.
Indigency of the petitioner was established and counsel was appointed for the prosecution of both the petition and subsequent appeal to this court.
Because the record does not establish the order in which the respective "arrests" were made we shall consider them in alternate terms.
If the Lewiston police made an arrest at the time of the assault, and before execution of the parole warrant, they assumed lawful and primary custody of the accused. This custody could be retained in the face of a subsequent parole warrant and the parole warrant would serve only as a detainer to be executed when the primary custody of the Lewiston authority was relinquished. See Stewart v. United States, 267 F.2d 378 (CA 10, Utah 1959) cert. den. Merriman v. Stewart, 361 U.S. 844, 80 S.Ct. 97, 4 L.Ed.2d 83.
If the parole officer made an arrest upon the parole warrant and before execution of the assault warrant, petitioner's contention that the act of the Parole Officer in permitting the Lewiston Municipal Court to assume physical custody and require him to answer to the charge there pending against him was a waiver by the State of its right to retain or thereafter resume his physical custody under the subsisting felony sentence, was reviewed and decided in Libby v. State of Maine et al., Me., 211 A.2d 586, upon pertinently identical facts. There was no loss of state control.
The legal attack made by petitioner to force a conclusion of waiver by the State in the present case raises one issue not argued in Libby and founded upon 34 M.R.S.A. § 1675 which reads:
"When a parolee violates a condition of his parole or violates the law, a member of the board may authorize the director in writing to issue a warrant for his arrest. A probation-parole officer, * * * may arrest the parolee on the warrant and return him to the institution from which he was paroled. * * *."
The normal interpretation of this statute would conform to the rule that:
"In general, the word `may,' used in statutes, will be given ordinary meaning, unless it would manifestly defeat the object of the statute, and when used in a statute is permissive, discretionary, and not mandatory." Roy v. Bladen School District No. R-31 of Webster County, 165 Neb. 170, 84 N.W.2d 119,
[4] 124 (1957).
See also Bradley et al. v. Cleaver et al., 150 Kan. 699, 95 P.2d 295, [1] 297 (1939).
It is urged that under this statute, legal principles require that the word "may" be read as "must". The principle of statutory construction to which reference is made is expressed briefly in Low v. Dunham, 61 Me. 566, 569, where the court said:
"The word `may' in a statute is to be construed `must' or `shall,' where the *838 public interest or rights are concerned, and the public or third persons have a claim de jure that the power shall be exercised."
Expressed more fully:
"The word `may' in a statute will be construed to mean `shall' or `must' whenever the rights of the public or of third persons depend upon the exercise of the power to perform the duty to which it refers; and such is its meaning in all cases where the public interests and rights are concerned, or where a public duty is imposed upon public officers, and the public or third persons have a claim de jure that the power shall be exercised. Or, as the rule is sometimes expressed, whenever a statute directs the doing of a thing for the sake of justice or the public good, the word `may' will be read `shall.'" Pierson v. People ex rel. Walter, 204 Ill. 456, 68 N.E. 383, 386 (1903).
As expressed in Anthony A. Bianco, Inc. v. Hess, et al., 86 Ariz. 14, 339 P.2d 1038, [10, 11] 1045 (1959):
"`It is a general principle of statutory construction that, when the word `may' is used in conferring power upon any officer, court, or tribunal, and the public or a third person has an interest in the exercise of the power, then the exercise of the power becomes imperative, * * *'"
See also Harless v. Carter, 42 Cal.2d 352, 267 P.2d 4, [3] 7 (1954).
It is urged here that not only has the public an unquestionable interest in the efficient administration of the parole system, and in prompt action upon violation of parole, but a duty is imposed upon the parole officer whereby prompt arrest and return of the parolee upon violation is mandatory.
Our statute so read would require, it is argued, that upon violation of parole the Board must authorize the Director to issue a warrant for his arrest and that the violator must be arrested on the warrant and be forthwith returned to the institution from which he is paroled. Under this mandate, and assuming that other law enforcement authorities had not previously taken the violator into physical custody to answer to a current offense, the Board would be obliged to assume custody of the violator and forthwith return him to the institution from which he was paroled. Under such procedure, in our current situation, petitioner urges that the Board was chargeable with reducing the petitioner to custody before June 30, 1964, and would not be permitted to surrender the violator to face the current charge and by such surrender the right to later resume his custody was lost.
In conflict with this principle of statutory construction is the overriding principle that a statute is to be construed as intended by the legislature. For this principle no authority need be cited, and a resolution of the conflict must be in favor of legislative intent. People v. Smith, 253 Ill. 283, 97 N.E. 649, 650 (1912); Bradley, supra, in [1] 95 P.2d 297; In re Estate of Cartmell, 120 Vt. 228, 138 A.2d 588, [6] 591 (1958); Harvey v. Board of Chosen Freeholders of Essex County et al., 30 N.J. 381, 153 A.2d 10, [10-12] 16 (1959) and City of Wauwatosa v. County of Milwaukee, 22 Wis.2d 184, 125 N.W.2d 386, [4] 389 (1963).
The purpose of releasing an inmate of a penal institution to parole is to give him an opportunity to make good on the outside. The release to parole is a discretionary matter with the Board in the light of the inmate's conduct while confined and the considered probability of his complying, out of confinement, with the conditions of parole fixed by the Board. He remains under the custody of the institution from which he is released, and while on parole is executing the unexpired portion of his sentence. 34 M.R.S.A. § 1671. The parole officer to whom the inmate is assigned is charged with supervising "* * * *839 the conduct and condition of each person placed under his supervision and to use suitable methods to encourage him to improve his conduct and condition; * * *." 34 M.R.S.A. § 1502.
The legislature's delegation to the Board of power to act upon violations of parole is intentionally permissive, by prescribing that the Board may authorize an arrest. Only as discretion is imposed in the Board in this matter can the Board treat each parolee as an individual and, if the personality involved warrants it, it may be decided to continue the parole in spite of minor violation.
Were the statutory word "may" read as "must" no parolee would be entitled to a second chance. The statute in this respect is to be read as written.
Once the Board orders a warrant for parole violation to issue, other considerations arise,not by reason of the parole statute, but by reason of the law governing the execution of criminal process.
In general terms an arrest warrant must be executed "with reasonable diligence and without unnecessary delay". 5 Am.Jur.2d Arrest § 77. We have reduced the leeway allowed in the general rule by stating "that ministerial officers assuming to execute a * * * process upon the * * * person of a citizen shall execute it promptly, fully, and precisely." State v. Guthrie, 90 Me. 448, 450, 38 A. 368, 369; Hefler v. Hunt, 120 Me. 10, 14, 112 A. 675; and State v. Couture, 156 Me. 231, 240, 163 A.2d 646.
The process issued by the Board read:
"IT IS ORDERED, that you execute this warrant by taking said RAYMOND COLLINS wherever found in your jurisdiction and, in accordance with P.L. of 1959 Ch. 312 Sec. 15, return him safely to the institution from which he was paroled therein to be detained until the State Probation and Parole Board, at the meeting next held at said institution, shall have an opportunity to determine if the parole of said Raymond Collins shall be revoked or otherwise dealt with as to law and justice."
It was the duty of the officer holding that process to execute it as "promptly, fully and precisely" as the situation permitted, which situation may have involved primary custody by the Lewiston police as discussed earlier in this opinion. If the parole officer were the first to arrest, his custody was primary and the mandate of his warrant applied.
The law dealing with the execution of criminal process requires that the word "may" in the second sentence of 34 M.R. S.A. § 1675 be interpreted "must."
Assuming, without finding, that the arrest for violation of parole resulted in primary custody, as we have used the term, it does not follow, however, that petitioner has remedy in this post-conviction proceeding. His incarceration is lawful.
It is obvious that the grievance which petitioner seeks to express is that the imposition and execution of sentence imposed while on parole extends pro tanto his original sentence. Upon the facts of this case such concern is groundless. While on parole the individual is executing, out of confinement, his original sentence. A sentence imposed without qualifying statement and executed while on parole is served concurrently with the subsisting sentence (15 M.R.S.A. § 1702) except in cases specifically covered by statute such as those involving parolees from the Men's Reformatory and from the State Prison newly sentenced to the State Prison. 34 M.R.S.A. §§ 1675, 1676.
If the prosecuting authorities feel justified in asking that a new sentence, other than to the State Prison, imposable upon a parolee be served after the execution of the subsisting sentence, they may, after conviction for the new offense move the court to *840 "state in the judgment" that the new sentence be executed at the expiration of the subsisting sentence. 15 M.R.S.A. § 1702 and see State v. Jenness, 116 Me. 196, 100 A. 933.
Petitioner's criticism of the unexecuted portions of the Revocation and Remand Order are without merit.
34 M.R.S.A. § 1675, part of which has been quoted, goes on to provide:
"If the board, after hearing, finds that the parolee has violated his parole or the law, it shall revoke his parole, set the length of time he shall serve of the unexpired portion of his sentence before he can again be eligible for hearing by the board, and remand him to the institution from which he was released; * * *."
The statutory requirements have been met.
The statute does not require that the determination of the Board be recorded in the Order. The findings are recorded in the minutes of the Board Meeting and the inmate is entitled to be seasonably informed of the decisions affecting his confinement. The form of the order and its use is a matter of administration and if there were no such order, no statute or inherent rights of petitioner would be violated
We must comment, however, that if the Board has found it administratively desirable to promulgate such form for the purpose of apprising the officials involved, it is equally desirable to execute it in conformity with the Board action. The date which the Board determines as the date of parole revocation, significant in the computation of the time allowed for good behavior (34 M.R.S.A. § 1675, subd. 1.), the term of confinement remaining as affected by the time allowed for good behavior and the time fixed by the Board before the inmate can again be eligible for hearing for parole are properly matters of concern to him. The form in use when this petitioner appeared before the Board did not, in any event, contemplate the supply of the last item of information.
If the Order is to serve its ostensible purpose, it should bear pertinent information both for the efficient administration of the custodial institution and the enlightenment of the inmate.
There are here no legal errors to result in petitioner's release.
Appeal denied.
Petition dismissed.
WEBBER, J., did not sit.
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670 F.Supp.2d 958 (2009)
Terry HARRINGTON, Plaintiff,
v.
Matthew D. WILBER and Pottawattamie County, Iowa, Defendants.
No. 4:03-cv-90616 RP-TJS.
United States District Court, S.D. Iowa, Central Division.
November 9, 2009.
*960 Stephen Dillard Davis, William H. Jones, Canel, Davis & King, Chicago, IL, Thomas P. Frerichs, Frerichs Law Office PC, Waterloo, IA, Larissa A. McCalla, J. Douglas McCalla, Mel C. Orchard, Gerry L. Spence, Spence Shockey & McCalla, Jackson, WY, Alan O. Olson, Olson Law Office PC, Des Moines, IA, for Plaintiff.
Michael A. Sciortino, City of Council Bluffs Legal Dept., Margaret J. Reyes, Pottawattamie County Attorneys Office, Kristopher K. Madsen, Stuart Tinley Law Firm LLP, Council Bluffs, IA, Lori E. Lightfoot, Vincent J. Connelly, Zaldwaynaka Scott, Mayer Brown LLP, Chicago, IL, for Defendants.
Anne F. Danaher, Kansas City, IA, pro se.
ORDER
ROBERT W. PRATT, Chief Judge.
Before the Court is Defendants', Matthew Wilber ("Wilber") and Pottawattamie County, Iowa ("Pottawattamie County"), Motion for Summary Judgment on Harrington's Defamation Claim, filed August 10, 2009. Clerk's No. 128. Terry Harrington ("Plaintiff" or "Harrington") filed a Resistance to the Motion on September 25, 2009. Clerk's No. 129. Defendants filed a Reply on October 26, 2009.[1] Clerk's No. 131. In his resistance, Plaintiff requests oral argument. Clerk's No. 129. The Court, however, does not believe that oral argument will substantially aid it in resolving the present motion. Accordingly, Plaintiff's request for oral argument is denied and the matter is fully submitted.
*961 I. PROCEDURAL BACKGROUND
This case has an extensive procedural background that has been articulated repeatedly by the Court in past orders. In short summary, the present case is one of numerous cases pending in this Court that all arise from the investigation, prosecution, and conviction of Harrington and Curtis McGhee ("McGhee") for the 1977 murder of John Schweer. In 2003, the Iowa Supreme Court vacated Harrington's first degree murder conviction for the failure of the prosecution to turn over exculpatory evidence. Shortly thereafter, Wilber, the Pottawattamie County Attorney, launched a renewed investigation into Schweer's murder. After reviewing all the evidence, Wilber held a press conference and issued both oral and print statements indicating, amongst other things, that while he believed Harrington had murdered Schweer, there was not sufficient evidence to obtain another conviction of him.[2]
On November 13, 2003, Harrington filed an Amended Complaint in the present action against Wilber and Pottawattamie County, asserting that Wilber's statements at the press conference defamed him.[3] On March 25, 2005 and on May 4, 2005, respectively, Harrington and McGhee filed lawsuits against law enforcement officers, prosecutors, and city and county entities, alleging various state law and civil rights violations. Case Nos. 4:05-cv-178 (Harrington v. County of Pottawattamie, et al.); 4:05-cv-255 (McGhee v. Pottawattamie County, et al.). McGhee's May 4, 2005 Complaint asserted a claim for defamation against Wilber nearly identical to that filed by Harrington in 2003, i.e., McGhee claimed that Wilber's oral and print statements at the press conference defamed him.
In late 2004, Wilber moved for summary judgment on Harrington's claim of defamation, claiming, amongst other things, that as County Attorney, he was entitled to immunity from liability under the Iowa Municipal Tort Claims Act ("IMTCA"), which provides that municipalities are statutorily immune from liability for claims based on "the exercise or performance or the failure to exercise or perform a discretionary function or duty ... whether or not the discretion is abused." Iowa Code § 670.4(3). In an order dated January 27, 2005, 353 F.Supp.2d 1033 (S.D.Iowa.2005), the Court denied Wilber's motion for summary judgment, concluding that while he had adequately shown that issuing statements about the Harrington and McGhee cases was a discretionary function, he had failed to demonstrate that such conduct was of the type intended to be shielded from liability by the IMTCA. See Clerk's No. 29. Specifically, the Court found that Wilber had failed to demonstrate that his "decision [to comment on the guilt or innocence of Plaintiff] was a judgment call driven by social, economic, or political concerns." Id. at 21. The Court reiterated and incorporated these findings in its February 23, 2007 ruling denying Wilber's assertion that he was entitled to a qualified privilege on McGhee's defamation claim. See Case No. 4:05-cv-178, Clerk's No. 174; Case No. 4:05-cv-255, Clerk's No. 183.
In its February 23, 2007 ruling, the Court also addressed an argument by David Richter ("Richter") and Joseph *962 Hrvol ("Hrvol"), the prosecutors in 1977-78, that they were entitled to immunity from Harrington's and McGhee's state law claims under the Iowa Tort Claims Act ("ITCA"), Iowa Code § 669.1 et seq. See id. at 97-98. Harrington and McGhee both urged that the ITCA was inapplicable to protect any of the prosecutors in the actions, given that Wilber had previously argued he was entitled to immunity under the IMTCA. The Court rejected Harrington's and McGhee's argument in this regard, finding that "it is entirely possible that Defendants' prosecutorial duties are covered by the ITCA, but other duties and functions of the Defendants are covered instead by the IMTCA." See Case No. 4:05-cv-178, Clerk's No. 174 at 97-98.
An interlocutory appeal quickly followed the Court's February 23, 2007 Order. While the Eighth Circuit Court of Appeals recognized that Wilber had only claimed immunity under the IMTCA before the district court, it nonetheless found that "Wilber is entitled to sovereign immunity under the ITCA." McGhee v. Pottawattamie County, Iowa, 547 F.3d 922, 932 (8th Cir.2008). Specifically, the Eighth Circuit found as follows:
Wilber appeals the denial of his summary judgment motion on McGhee's defamation claim based on Wilber's sovereign immunity and qualified immunity defenses under the ITCA, an argument Wilber did not make to the district court where he relied instead upon the protections afforded by the IMTCA. The district court held the IMTCA's protection only applied if Wilber's comments were "a judgment call driven by social, economic, or political concerns" and found they were not.
The ITCA defines a state employee, for purposes of the act, as including any "persons acting on behalf of the state... in any official capacity, temporarily or permanently in the service of the state of Iowa." Iowa Code § 669.2(4). Thus, for purposes of the ITCA, Wilber is a state employee when acting in his official capacity as County Attorney. We find no language within the ITCA which would restrict Wilber's immunity under the ITCA solely to prosecutorial acts. Instead, the only restriction is for acts taken in an official capacity. See id. Clearly, when Wilber held his press conference and issued his written press release he was acting in his official capacity as County Attorney discussing prosecutions by the state.
McGhee's defamation claim is governed by the ITCA which explicitly bars a claim for defamation arising out of libel or slander. See Iowa Code § 669.14(4). Therefore, the district court erred as a matter of law in denying Wilber's motion for summary judgment as to McGhee's defamation claim. This claim must be dismissed.
Id. The Eighth Circuit explicitly noted that it was not reviewing the district court's denial of Wilber's summary judgment motion on Harrington's defamation claim because "Wilber did not appeal this decision." Id. at 928 n. 5.
On May 20, 2009, Chief United States Magistrate Judge Shields entered a scheduling order with regard to the filing of dispositive motions in the present case. Clerk's No. 118. After the Plaintiff was permitted to conduct limited additional discovery on the matter now raised in Defendants' Motion for Summary Judgment, the parties adhered to Judge Shields' scheduling order in filing the pleadings now at issue. In essence, Defendants' Motion for Summary contends that, in light of the Eighth Circuit's conclusion that Wilber is protected from McGhee's defamation claim by the ITCA, this Court must find that the ITCA also protects Wilber and, by extension, Pottawattamie County, from Harrington's defamation claim.
*963 II. STANDARD OF REVIEW
Summary judgment has a special place in civil litigation. The device "has proven its usefulness as a means of avoiding full-dress trials in unwinnable cases, thereby freeing courts to utilize scarce judicial resources in more beneficial ways." Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir.1991). In operation, the role of summary judgment is to pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required. See id.; see also Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir.1990). "[S]ummary judgment is an extreme remedy, and one which is not to be granted unless the movant has established his right to a judgment with such clarity as to leave no room for controversy and that the other party is not entitled to recover under any discernible circumstances." Robert Johnson Grain Co. v. Chem. Interchange Co., 541 F.2d 207, 209 (8th Cir.1976) (citing Windsor v. Bethesda Gen. Hosp., 523 F.2d 891, 893 n. 5 (8th Cir.1975)). The purpose of the rule is not "`to cut litigants off from their right of trial by jury if they really have issues to try,'" Poller v. Columbia Broad. Sys., Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962) (quoting Sartor v. Ark. Natural Gas Corp., 321 U.S. 620, 627, 64 S.Ct. 724, 88 L.Ed. 967 (1944)), but to avoid "useless, expensive and time-consuming trials where there is actually no genuine, factual issue remaining to be tried." Anderson v. Viking Pump Div., Houdaille Indus., Inc., 545 F.2d 1127, 1129 (8th Cir.1976) (citing Lyons v. Bd. of Educ., 523 F.2d 340, 347 (8th Cir.1975)).
The plain language of Federal Rule of Civil Procedure 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The precise standard for granting summary judgment is well-established and oft-repeated: summary judgment is properly granted when the record, viewed in the light most favorable to the nonmoving party and giving that party the benefit of all reasonable inferences, shows that there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Harlston v. McDonnell Douglas Corp., 37 F.3d 379, 382 (8th Cir.1994). The Court does not weigh the evidence nor make credibility determinations, rather it only determines whether there are any disputed issues and, if so, whether those issues are both genuine and material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Wilson v. Myers, 823 F.2d 253, 256 (8th Cir.1987) ("Summary judgment is not designed to weed out dubious claims, but to eliminate those claims with no basis in material fact.").
It is the unusual case where the party shouldering the burden of proof prevails on a summary judgment motion. See Turner v. Ferguson, 149 F.3d 821, 824 (8th Cir.1998) ("Summary judgments in favor of parties who have the burden of proof are rare, and rightly so.").
The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact based on the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Once the moving party has carried its burden, the nonmoving party must go beyond the pleadings and, by affidavits or by the depositions, answers to *964 interrogatories, and admissions on file, designate specific facts showing that there is genuine issue for trial. See Fed. R.Civ.P. 56(c), (e); Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548; Anderson, 477 U.S. at 257, 106 S.Ct. 2505. "[T]he mere existence of some alleged factual dispute between the parties will not defeat a motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505. An issue is "genuine," if the evidence is sufficient to persuade a reasonable jury to return a verdict for the nonmoving party. See id. at 248, 106 S.Ct. 2505. "As to materiality, the substantive law will identify which facts are material.... Factual disputes that are irrelevant or unnecessary will not be counted." Id.
III. LAW AND ANALYSIS
Defendants correctly point out that Harrington's defamation claim against Wilber "is based on the very same press conference and release" that formed the basis of McGhee's defamation claim against Wilber. Accordingly, Defendants contend that the Eighth Circuit's ruling in the McGhee case "is both the law of [the Harrington] case and binding precedent requiring that the court grant summary judgment in favor of Wilber." Defs.' Mot. at 2. Plaintiff makes numerous arguments in resistance and urges the Court to deny Defendants' request for summary judgment.
A. Wilber's Status as the Pottawattamie County Attorney
Plaintiff first argues that the Court should decline to apply the Eighth Circuit's holding in the McGhee defamation case to Harrington's defamation claim because "it is a conclusively established fact that Wilber was in the course of his employment for Pottawattamie County when he libeled and slandered Harrington."[4] Pl.'s Br. at 6. Plaintiff contends that this "conclusively established" fact differentiates Harrington's case from McGhee's, because "an issue based on such fact was never raised, addressed, considered, or ruled on in McGhee v. Pottawattamie County." Id. at 9. The Court finds Plaintiff's attempt to distinguish Harrington's case from McGhee's unpersuasive. The Eighth Circuit was clearly cognizant of the fact that Wilber was the Pottawattamie County Attorney, in the employ of Pottawattamie County, when it nonetheless found that Wilber was "a state employee when acting in his official capacity as *965 County Attorney." McGhee, 547 F.3d at 932. Indeed, the Circuit explicitly recognized that "[Wilber] relied ... upon the protections afforded by the IMTCA" in the proceedings before the district court. McGhee, 547 F.3d at 932; see also Case No. 4:05-cv-178, Clerk's No. 174 at 102 ("The Court finds no reason to sway from its holding [on Harrington's defamation claim], and incorporates the reasoning contained therein by reference in denying Wilber's claim for summary judgment on McGhee's defamation claim."), rev'd by McGhee, 547 F.3d at 932. Since the IMTCA embraces county employees and officers, the Court does not doubt that the Eighth Circuit did, in fact, consider the fact that Wilber was a Pottawattamie County employee at the time of the asserted defamation.
Plaintiff's argument is further undermined by this Court's prior rejection of a contention by both Harrington and McGhee that the IMTCA and the ITCA are mutually exclusive:
[Harrington and McGhee] argue that Defendants "have talked out of both sides of their mouth" on the issue of whether Hrvol and Richter are protected by the ITCA or the IMTCA, by virtue of the fact that this Court previously analyzed Wilber's liability for defamation against Harrington under the IMTCA. They point out that it is "established as the law of this case ... that when analyzing whether sovereign immunity precludes any of the Plaintiff's claims, we look to the statutory language of the Iowa Municipal Tort Claims Act, not the Iowa Tort Claims Act." Harrington's Resistance at 105. The question of whether a state law claim against a government agent is protected by the IMTCA or the ITCA is one of state law, however, and Plaintiffs offer no authority whatsoever for the proposition that because this Court previously evaluated Wilber's liability under the IMTCA, notably because that is the issue that the parties submitted to the Court, that the Court is somehow forever barred from considering the applicability of other provisions of state law. Indeed, though the issue has not been argued, it is entirely possible that Defendants' prosecutorial duties are covered by the ITCA, but other duties and functions of the Defendants are covered instead by the IMTCA.
Case No. 4:05-cv-178, Clerk's No. 174 at 97-98. In fact, Harrington "acknowledges that a person under certain circumstances could be in the joint employment of the state and a county." Pl.'s Br. at 9. Harrington urges, however, that there is no case law supporting a conclusion that,
where one status of joint employment makes the person and his governmental employer statutorily immune from suit for the person's torts and the other status of joint employment makes the person and his governmental employer liable for the same torts committed by the same person, the person and governmental entity who are statutorily subject to liability somehow absorb the immunity of the employee's other joint employer.
Pl.'s Br. at 9. While the Court agrees with Harrington that there is no case law directly addressing this point, the fact remains that the Eighth Circuit was well aware that this Court had determined that Wilber was subject to suit for McGhee's defamation claim under the IMTCA when it made its own determination that Wilber was not subject to suit for McGhee's defamation claim under the ITCA. Since the Eighth Circuit did not reverse this Court's conclusion that Wilber was liable for defamation under the IMTCA, yet still ordered McGhee's defamation claim dismissed under the ITCA, the Court is hard pressed to reach a different result in this case.
*966 B. Immunity under Iowa Law
Plaintiff next argues that Defendants are incorrect in their assertion that the Eighth Circuit's sovereign immunity determination in McGhee is "the law of the case" with regard to Harrington's defamation claim. Pl.'s Br. at 11. Plaintiff urges that the Court must find all factors of the issue preclusion doctrine have been satisfied before it can find that the ruling in McGhee constitutes the law of Harrington's case. Defendants counter that the issue preclusion doctrine and the law of the case doctrine are not the same, and that it is only the law of the case doctrine that is applicable.
The doctrine of issue preclusion "bars `successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment,' even if the issue recurs in the context of a different claim." Taylor v. Sturgell, 553 U.S. 880, 128 S.Ct. 2161, 2171, 171 L.Ed.2d 155 (2008) (quoting New Hampshire v. Maine, 532 U.S. 742, 748-49, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001)). The law of the case doctrine provides that "when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983). "The doctrine prevents the relitigation of settled issues in a case, thus protecting the settled expectations of the parties, ensuring uniformity of decisions, and promoting judicial efficiency." Little Earth of the United Tribes, Inc. v. Dept. of Hous. & Urban Dev., 807 F.2d 1433, 1441 (8th Cir.1986). "Law of the case is a doctrine of discretion, not a command to the courts." Id. at 1440. While the Court has some concerns about the applicability of either the issue preclusion doctrine or the law of the case doctrine, given the somewhat unique procedural posture of this case,[5] it need not *967 reach the issue because it finds that the McGhee decision is, in any event, binding precedent on the Court in resolving Harrington's defamation claim.
This Court is obligated to abide by the decisions of the Eighth Circuit Court of Appeals, because such decisions are "controlling until overruled by [the Eighth Circuit] en banc, by the Supreme Court, or by Congress." M.M. ex rel. L.R. v. Special Sch. Dist. No. 1, 512 F.3d 455, 459 (8th Cir.2008); see also Payne v. Tennessee, 501 U.S. 808, 827, 111 S.Ct. 2597, 115 L.Ed.2d 720 (1991) ("Stare decisis is the preferred course because it promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process."). To determine whether a prior decision has stare decisis effect, the Court must find the following factors: 1) "The decision must constitute a holding of the majority of the court"; 2) the decision must involve an issue of law; 3) similar factual situations must be involved; 4) an issue was actually determined by the decision; and 5) the decision must be from the same court or from a court which the court applying stare decisis owes obedience. See 3-30 Moore's ManualFederal Practice and Procedure § 30.11 (2007).
In this case, all of the elements for stare decisis are fulfilled. First, McGhee was unanimously decided by a three judge panel of the Eighth Circuit. Second, the panel determined, as a matter of law, that "for purposes of the ITCA, Wilber is a state employee when acting in his official capacity"; that, at the time of the press conference and written press release, Wilber "was acting in his official capacity as County Attorney discussing prosecutions by the state"; and that summary judgment was proper in favor of Wilber on McGhee's defamation claim because it "is governed by the ITCA which explicitly bars a claim for defamation arising out of libel or slander." McGhee, 547 F.3d at 932. Third, the factual situation at issue in McGhee is virtually identical to the factual situation at issue in Harrington's defamation claim. The allegedly defamatory statements in both cases were made by the same individual in the same press release and during the same news conference. Fourth, the question of Wilber's liability for defamation for statements made in the news conference and press release was actually determined in McGhee. Finally, this Court owes obedience to the determinations of the Eighth Circuit.
Despite the well-established principles of the stare decisis doctrine, Harrington maintains that, because this case arises under the Court's diversity jurisdiction, the Court need not follow the Eighth Circuit's rulings "[t]o the extent any statement of purported Iowa law made by the McGhee Court differs with the statutory or common law of Iowa." Pl.'s Br. at 13. Specifically, Plaintiff argues that the Court need not follow the Eighth Circuit's McGhee ruling because, "[c]ontrary to the McGhee Court's statement of purported Iowa law that Wilber as a `state employee' had sovereign immunity[6] barring McGhee's ... claims against him, under Iowa law, state employees do not have, and never have had, sovereign immunity barring lawsuits against them for tortious conduct." Pl.'s Br. at 13. Plaintiff offers no support for the contention that this Court is less bound by principles of stare decisis merely because the Eighth Circuit, sitting in diversity with regard to McGhee's defamation *968 claim, applied Iowa law in a way with which Plaintiff disagrees. Moreover, the only case law that Plaintiff cites in support of the proposition that the Eighth Circuit's decision is in conflict with Iowa law is a string of cases that all predate the enactment of § 669.23 of the ITCA.[7]See id. at 14-15 (citing Anderson v. Calamus Comm. Sch. Dist., 174 N.W.2d 643, 644 (Iowa 1970), Johnson v. Baker, 254 Iowa 1077, 120 N.W.2d 502, 505-07 (1963), and Rhoads v. Perdue, 239 Iowa 1030, 33 N.W.2d 371, 373 (1948), amongst others). Accordingly, the Court finds Plaintiff's arguments in this regard without merit. See Dickerson v. Mertz, 547 N.W.2d 208, 213 (Iowa 1996) (finding that a lower court erred in refusing to extend immunity to a state employee for claims of abuse of process and malicious prosecution on the basis of law that predated the enactment of § 669.23).
Plaintiff next attempts to avoid the application of the stare decisis doctrine to his defamation claim by attacking the reasoning underlying the Eighth Circuit's ruling. In particular, Plaintiff contends that the Court of Appeals improperly relied on Doe v. Nebraska, 345 F.3d 593 (8th Cir.2003), in reaching its conclusion that Wilber was entitled to immunity from McGhee's defamation claim and that the Eighth Circuit improperly interpreted Iowa law and the ITCA in concluding that Wilber was immune thereunder. Plaintiff's arguments are unpersuasive. Even if this Court agreed with Plaintiff's strained attempts to discredit the substantive analysis of the Court of Appeals, it would nonetheless be obligated to adhere to the appellate court's determinations. See, e.g., Crowley v. United States, 398 F.3d 1329, 1335 (Fed.Cir. 2005) ("Trial courts are not free to make the law anew simply because they disagree with the precedential and authoritative analysis of a reviewing appellate court."); Hart v. Massanari, 266 F.3d 1155, 1170 (9th Cir.2001) ("A district judge may not respectfully (or disrespectfully) disagree with his learned colleagues on his own court of appeals who have ruled on a controlling legal issue.... Binding authority... cannot be considered and cast aside; it is not merely evidence of what the law is. Rather, case law on point is the law. If a court must decide an issue governed by a prior opinion that constitutes binding authority, the later court is bound to reach the same result, even if considers the rule unwise or incorrect.").
C. Is the ITCA Unconstitutional?
Plaintiff finally argues that applying the ITCA to immunize Wilber is patently unconstitutional. Specifically, Plaintiff contends that state employees have never had sovereign immunity such that § 669.23 of the ITCA is a grant of "statutory immunity to state employees and not a retention of state employees' sovereign immunity." Pl.'s Br. at 20. Thus, Plaintiff argues, § 669.23 violates the Equal Protection Clause of the United States Constitution and Article I, § 6 of the Iowa Constitution[8] in that it denies to victims of state employees the "fundamental right" of access to the courts for the redress of certain torts, including defamation. Id. at 19-28. For purposes of addressing Plaintiff's Equal Protection arguments only, the *969 Court will accept as true Plaintiff's contention that the ITCA creates a statutory immunity for certain torts by state employees, rather than a sovereign immunity.[9]
The Equal Protection Clauses of both the Iowa and the federal constitution generally require the government to treat similarly situated people alike. See City of Cleburne v. Cleburne Living Ctr., Inc., 473 U.S. 432, 439, 105 S.Ct. 3249, 87 L.Ed.2d 313 (1985); Varnum v. Brien, 763 N.W.2d 862, 878 (Iowa 2009) ("Like the Federal Equal Protection Clause found in the Fourteenth Amendment to the United States Constitution, Iowa's constitutional promise of equal protection is essentially a direction that all persons similarly situated should be treated alike." (citations and quotations omitted)). If a classification does not burden a fundamental right or target a suspect class, it will be upheld if it bears a rational relationship to a legitimate end. See Weiler v. Purkett, 137 F.3d 1047, 1051 (8th Cir.1998) (en banc).
In FCC v. Beach Communications, Inc., 508 U.S. 307, 313, 113 S.Ct. 2096, 124 L.Ed.2d 211 (1993), the Supreme Court held that "a statutory classification that neither proceeds along suspect lines nor infringes fundamental constitutional rights must be upheld against equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification." Thus, as long as a plausible reason exists for the classification, the Court's scrutiny must end. See id. at 313-14, 113 S.Ct. 2096. Additionally, under a rational basis standard of review, the statute at issue carries with it a "strong presumption of validity." Id. at 314, 113 S.Ct. 2096; see also City of Waterloo v. Selden, 251 N.W.2d 506, 508 (Iowa 1977).
Knapp v. Hanson, 183 F.3d 786, 789 (8th Cir.1999).
In this case, Plaintiff argues that the Court should apply the more stringent "strict scrutiny" standard to assess § 669.23 because, according to Plaintiff, it burdens the fundamental right of "access to the courts." Pl.'s Br. at 23. The Court rejects Plaintiff's contention that if Wilber is granted immunity under the ITCA, it amounts to Plaintiff being deprived "access to the courts." There is a distinct difference between access to the Courts and the ability to hold someone liable for damages. Plaintiff has had and continues to have meaningful access to the Court. See Lewis v. Casey, 518 U.S. 343, 351, 116 S.Ct. *970 2174, 135 L.Ed.2d 606 (1996) (stating that the "touchstone" of the right to access the courts articulated in Bounds v. Smith, 430 U.S. 817, 823, 97 S.Ct. 1491, 52 L.Ed.2d 72 (1977), is "meaningful access to the courts"); Gavin v. Branstad, 122 F.3d 1081, 1090 (8th Cir.1997) (stating that the inability to pursue certain substantive relief is not "equivalent to the right to bring constitutional grievances to the attention of the courts"); cf. Suckow v. NEOWA FS, Inc., 445 N.W.2d 776, 778 (Iowa 1989) ("Suckow incorrectly assumed that access to the courts is itself a fundamental right...."). He filed a Complaint and, indeed, has repeatedly had the opportunity to litigate various aspects of his claim. What Plaintiff is deprived of by virtue of Wilber's immunity under the ITCA is the ability to hold Wilber liable, not the ability to access the courts.
Plaintiff makes no argument as to how a fundamental right is implicated by an inability to hold a particular individual liable, and both Iowa and Eighth Circuit law indicate that such a right, if it can be said to exist, is not fundamental. See Gavin, 122 F.3d at 1090 (finding a distinction between "the right of access to the courts," which is fundamental, and "the scope of the available substantive relief,") which is not (quoting Plyler v. Moore, 100 F.3d 365, 373 (4th Cir.1996)); Gilleland v. Armstrong Rubber Co., 524 N.W.2d 404, 407 (Iowa 1994) ("The right to sue for damages is not itself a fundamental right."). Accordingly, the Court finds that the rational relationship standard is applicable to Plaintiff's equal protection claim.
Plaintiff urges that "[n]o `legitimate government interests' exists in immunizing state employees from liability for ... libel [or] slander ... if the act was not `per se' governmental in nature." Pl.'s Br. at 24-25. The primary difficulty inherent in Plaintiff's argument is that it presumes at the outset that Wilber's actions were not "per se governmental in nature," a premise which runs counter to both the Eighth Circuit's conclusion that "when Wilber held his press conference and issued his written press release he was acting in his official capacity as County Attorney discussing prosecutions by the state" and its conclusion that "Wilber is a state employee [under the ITCA] when acting in his official capacity as County Attorney." McGhee, 547 F.3d at 932. Hence, for the Court to determine that Plaintiff's equal protection rights are violated by the application of § 669.23 to his case, it would necessarily have to agree with Plaintiff's apparent proposition that Wilber was granted immunity under the ITCA as against McGhee's defamation claim for acts that were not "governmental per se in nature." For the Court to do, it would have to conclude that the Eighth Circuit's interpretation of Wilber's "state employee" status under Iowa law is incorrect and that the Court of Appeals improperly extended immunity to Wilber under the ITCA. Such a conclusion is one this Court is not empowered to make under the doctrine of stare decisis.
Moreover, the Court is confident that § 669.23 bears a rational relationship to a legitimate governmental interest. Namely, the State of Iowa maintains a legitimate and reasonable interest in protecting persons working under its auspices or on its behalf from being subjected to liability for certain torts that may occur in the performance of service to the state. Such immunity, as Defendants point out, promotes a variety of state interests. For example, protecting persons working as state employees from liability for certain torts increases the likelihood that the state will be able to attract talented workers and increases the chances that employees will perform their duties more efficiently because *971 they will not be constrained by a fear of personal liability.
Plaintiff recognizes these legitimate governmental interests when he states that "[t]he purpose of any immunity set forth in the ITCA is to protect the State of Iowa from liability against certain torts and to protect the state's employees from such liability when they perform acts which are essential to the functioning of the state government." Pl.'s Br. at 26-27. Plaintiff argues, however, that this rationale is not reasonably related to providing immunity to state employees for certain torts because, in this case, the State of Iowa is not a party, has not been requested to provide indemnity and, thus, "has no interest in this case." Id. Plaintiff's argument ignores the second clause of his own stated purpose for the ITCA, "to protect the state's employees from such liability when they perform acts which are essential to the functioning of the state government." Indeed, there can be little doubt that, whether or not it is subject to financial liability for a claim against a state employee, the State of Iowa nonetheless has a legitimate interest in ensuring that its employees can freely perform tasks essential to its functioning without fear of personal liability. Since County Attorneys act as the public voice of the State for criminal prosecutions brought in its name, the State's legitimate interest is furthered by providing immunity to them for certain torts that may arise in the performance of their duties for the State.
D. Pottawattamie County's Liability
Pottawattamie County argues that, if Harrington's defamation claim against Wilber is dismissed, then the defamation claim against Pottawattamie County must also be dismissed. Plaintiff counters that this Court "ruled adversely to [] Pottawattamie County's claim for Summary Judgment against McGhee's defamation claim" and that the Court of Appeals "affirmed this Court in that respect." Pl.'s Br. at 9-10. Plaintiff further contends that, even if Wilber was acting as a State employee at the time of his allegedly defamatory statements, it is also "conclusively established" that Wilber was also acting as a County employee. Thus, Plaintiff argues, Pottawattamie County is still liable even though Wilber is immune from liability under the ITCA.
Plaintiff's contention that the Eighth Circuit "affirmed" this Court's denial of summary judgment to Pottawattamie County on McGhee's defamation claim is patently incorrect. In Count 23 of McGhee's Complaint, he asserted a claim for defamation against Wilber. Case No. 4:05-cv-255, Clerk's No. 1 at 66-67. In Count 30, McGhee claimed, not that Pottawattamie County was independently liable for Wilber's asserted defamation, but that Pottawattamie County was obligated to provide indemnity for all claims against Wilber. Id. at 73. Accordingly, neither this Court nor the Court of Appeals ever addressed the question of Pottawattamie County's liability for defamation against McGhee because McGhee never asserted such liability.
In its February 23, 2007 Order, this Court did, however, address the issue now presented in a slightly different factual context. The Court found that Wilber's 1977 counterparts, Richter and Hrvol, were immune for liability under the ITCA for certain acts taken during their prosecution of McGhee. See Case No. 4:05-cv-255, Clerk's No. 183 at 90 ("[T]he Court is convinced that Iowa courts would find a prosecutor acting to uphold the state's criminal laws to be protected by the ITCA. In upholding the State of Iowa's prohibition against murder, it is clear that a county attorney represents first and foremost the interests of the state, such that they could be deemed actors under the *972 ITCA."). The Court went on to find that Pottawattamie County could not be held independently liable for acts taken by Richter and Hrvol that were "clearly within the scope of their duties as prosecutors for the State." Id. at 104-05 ("[T]he Court cannot harmonize the lack of liability of Richter and Hrvol with a decision that the County could be liable for such acts."). The Court finds its prior analysis equally determinative on the issue in this case and incorporates the reasoning and analysis from the February 23, 2007 Order by reference.
IV. CONCLUSION
For the reasons stated herein, Defendants' Motion to File Overlength Brief (Clerk's No. 130) and Defendants' Motion for Summary Judgment (Clerk's No. 128) are GRANTED. Plaintiff's defamation claim is hereby DISMISSED as against both Wilber and Pottawattamie County.
IT IS SO ORDERED.
NOTES
[1] Defendants contemporaneously filed a Motion to File Overlength Brief in Support of Their Motion for Summary Judgment. Clerk's No. 130. The Court hereby grants the Defendants' request to file the overlength brief, which appears in the docket as an attachment to the Motion.
[2] Wilber's statement addressed McGhee's case as well. McGhee made an agreement whereby he entered an Alford plea in exchange for a sentence of twenty-five years. Because McGhee had already served more than twenty-five years in prison, he was released from custody.
[3] Because Harrington's defamation claim names both Wilber and Pottawattamie County as defendants, references to Wilber throughout this order are, where appropriate, deemed references to the County defendant as well.
[4] In support of this proposition, Plaintiff points to the following "admissions" by Defendants: 1) Defendants' Interrogatory responses, wherein they "admit[ted] that defendant Matthew Wilber was in the course of his employment for defendant Pottawattamie County, Iowa, at the time of the acts complained of in plaintiff's complaint" (Pl.'s App. at 4, 6); 2) Wilber's deposition testimony, wherein Wilber stated that he issued the press release "acting as the county attorney for Pottawattamie County" (id. at 2); and 3) Defendants' statement, made in support of their request for immunity under the IMTCA, that "[t]he allegedly defamatory comments were made by Mr. Wilber in his official capacity and in the performance of his duties as an elected official, the Pottawattamie County Attorney" (Clerk's No. 15 ¶ 20).
Plaintiff asserts that Rule 36(b) prevents Defendants from denying or amending the asserted "admissions." Federal Rule of Civil Procedure 36, however, is wholly inapplicable to the statements cited by Plaintiff. Rule 36(a) provides that one party may request that another party make admissions about facts, the application of law to facts, or opinions about either, by "serv[ing] ... a written request to admit" Rule 36(b) provides: "A matter admitted under this rule is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended." (emphasis added). Not one of the statements proffered by Plaintiff was made pursuant to a proper request for admission under Rule 36(a), meaning that the statements are not subject to Rule 36(b) because they were not "admitted under [Rule 36]."
[5] Harrington's civil rights case (Case No. 4:05-cv-178) was consolidated with McGhee's civil rights case (Case No. 4:05-cv-255) for purposes of discovery only on July 27, 2005. See Case No. 4:05-cv-178, Clerk's No. 31. Since McGhee's defamation claim was made in the same Complaint as his civil rights claims, McGhee's defamation case was necessarily consolidated for purposes of discovery with both of the civil rights cases. See id. On October 10, 2006, the two civil rights cases were consolidated for trial, and Harrington's defamation case (Case No. 4:03-cv-90616) was consolidated with McGhee's defamation claim for purposes of trial. See Case No. 4:05-cv-255, Clerk's No. 103. On January 1, 2009, all three cases were consolidated for purposes of docketing. See Case No. 4:03-cv-90616, Clerk's No. 104.
For a claim to be precluded under the doctrine of issue preclusion, the following five elements must be satisfied: 1) the party in the suit sought to be precluded must be the same party as in the first suit, or in privity with that party; 2) the issue sought to be precluded must be the same in both actions; 3) the issue must have actually been litigated in the first action; 4) the issue was determined by a valid and final judgment in the first action; and 5) the determination must have been essential to the prior judgment. See Tyus v. Schoemehl, 93 F.3d 449, 453 (8th Cir.1996), abrogated on other grounds by Taylor, 128 S.Ct. at 2161. The law of the case doctrine contains an element similar to the first issue preclusion requirement, i.e., it operates to bar the relitigation of decided issues in "the same case." Arizona, 460 U.S. at 618, 103 S.Ct. 1382.
While these cases are partially consolidated, Harrington and McGhee are unquestionably distinct and separate parties and their cases, while arising from the same factual underpinnings, are not the "same case," in the traditional sense of that phrase. Arguably, however, the cases are so closely related and so factually similar, that it would not be blatantly unreasonable to find either that some level of privity might exist for purposes of issue preclusion, or alternatively, that the cases should be treated as being the "same case" for purposes of employing the law of the case doctrine. As noted, however, the Court need not reach these questions in light of its conclusion that the Eighth Circuit's McGhee decision is controlling precedent.
[6] In the "conclusion" portion of the McGhee ruling, the Court of Appeals stated, "We reverse the decision of the district court as to McGhee's defamation claim against Wilber, because Wilber is entitled to sovereign immunity under the ITCA for those alleged actions." McGhee, 547 F.3d at 933.
[7] Most of the decisions also predate the enactment of the ITCA as a whole, which was codified in 1965. See Dickerson v. Mertz, 547 N.W.2d 208, 213 (Iowa 1996). Section 669.23, which provides that "[e]mployees of the state are not personally liable for any claim which is exempted under section 669.14," was enacted in 1984. Id.
[8] Article I, § 6 of the Iowa Constitution provides: "All laws of a general nature shall have a uniform operation; the General Assembly shall not grant to any citizen, or class of citizens, privileges or immunities, which, upon the same terms shall not equally belong to all citizens."
[9] The Court is far from convinced that Plaintiff's argument in this regard has any merit. Prior to enactment of the ITCA, "the doctrine of governmental immunity was held [by the Iowa Supreme Court] to be applicable to the state and all of its political subdivisions." Graham v. Worthington, 259 Iowa 845, 146 N.W.2d 626, 630 (1966). Contrary to Plaintiff's stated position, that immunity did, in fact, extend to employees of the state. See id. ("And since the state is known to function only by and through its officers, agents or employees, their inclusion within the body of the Act is certainly germane to and not incongruous with the general subject expressed in the title.").
The ITCA was designed, in part, to waive portions of that traditional immunity and "permit [] the state to be sued" to the extent provided in the ITCA's limited waiver. Id. at 632 ("It is to us evident the subject Act expressly waives the common law governmental immunity of the State of Iowa as to certain claims for the torts of officers, agents, or employees of the state or of any department, agency, board, bureau or commission of the state, together with certain governmental corporations as defined by the Act."). Thus, the Iowa Supreme Court has explicitly held that the ITCA "does not create a new cause of action. It actually gives recognition to and a remedy for a cause of action already existing by reason of a wrong done but for which redress could not previously be had because of the common law doctrine of governmental immunity." Id. at 637.
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543 U.S. 1169
PARDUEv.UNITED STATES.
No. 04-7920.
Supreme Court of United States.
February 22, 2005.
1
C. A. 1st Cir. Certiorari denied. Reported below: 385 F. 3d 101.
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294 B.R. 718 (2003)
In re Donald P. LASICA, Debtor.
Bankruptcy No. 02 B 09026.
United States Bankruptcy Court, N.D. Illinois, Eastern Division.
May 19, 2003.
*719 Robert J. Benjamin, Benjamin, Berneman and Brom, LLC, Chicago, IL, for Movant.
Carolyn A. Suzzi, Office of Chapter 13 Standing Trustee, Glenn Stearns, Lisle, IL, for Respondent.
Glenn Stearns, Lisle, IL, Chapter 13 Standing Trustee.
MEMORANDUM OPINION
JOHN H. SQUIRES, Bankruptcy Judge.
This matter comes before the Court on the application of Robert R. Benjamin of the Law Firm of Benjamin, Berneman & Brom, LLC. (the "Attorney") for fees in the sum of $12,232.50 and reimbursement of expenses totaling $477.81, and on the objection thereto filed by Glenn B. Stearns, the Chapter 13 Standing Trustee (the "Trustee"). For the reasons set forth herein, the Court sustains, in part, the objection of the Trustee and disallows the requested fees and expenses of the Attorney.
I. JURISDICTION AND PROCEDURE
The Court has jurisdiction to entertain this matter pursuant to 28 U.S.C. § 1334 and Internal Operating Procedure 15(a) of the United States District Court for the Northern District of Illinois. This matter is a core proceeding under 28 U.S.C. § 157(b)(2)(A)and (O).
II. FACTS AND BACKGROUND
On March 7, 2002, the Debtor filed a Chapter 13 bankruptcy petition. The Debtor is a practicing attorney. Apparently, the Debtor retained the Attorney when he faced incarceration as a result of a contempt finding by a state court. The instant petition aided in avoiding the Debtor's incarceration. From time to time, various amendments to the Debtor's plan was made. The modified plan dated December 30, 2002, was confirmed on January 7, 2003. The plan provided for payments by the Debtor to the Trustee of *720 $771.00 for 58 months for a total of $44,718.00. The plan further estimated the Trustee's fees at $2,683.00. When the Trustee's fees are added to the estimated non-attorney priority claims of $32,500.00, this amount totals $35,183.00, which leaves $9,535.00 potentially available to pay dividends to unsecured creditors. From the plan payments made, dividends on allowed claims are paid with the Trustee's fees and priority claims paid before allowed unsecured claims. The Attorney utilized the Chapter 13 Model Plan format promulgated by the bankruptcy judges in this district.[1]
Most pertinent for purposes of this matter is Section E.2 of the plan, which in all versions thereof, provided for zero payments for priority claims of the Debtor's Attorney. Thus, the Court inferred at the time of confirmation of the plan, that the Attorney was not charging the Debtor for his services and was in fact representing the Debtor as a professional courtesy, pro bono publico. Further, Section E.8 of the plan provided that non-priority unsecured claims would be paid pro rata to the extent possible from the payments set out under the plan, but not less than 11.4% of their allowed amount. (emphasis supplied).
On January 31, 2003 the Attorney filed his application for the award of compensation in the sum of $12,232.50 with time summaries for the services rendered from March 6, 2002 through January 30, 2003. The Application disclosed that the Attorney and other members of the firm expended 46 hours of attorney time at the hourly rates ranging from $225.00 for associate time to $300.00 for partner time, plus $125.00 for travel time. In addition, the Attorney seeks reimbursement of expenses in the amount of $477.81. On February 21, 2003, the Trustee filed an objection to the application. The Attorney filed a reply thereto. Both the Attorney and the Trustee waived any evidentiary hearing and requested that the Court rule on the papers submitted.
The Trustee makes many arguments in the objection. Most pertinent is the Trustee's argument that all versions of the plan provided zero payments for the Debtor's Attorney's fees. In addition, the Trustee argues that the plan is not feasible given the amount of timely filed claims. Thus, the Trustee contends that the award of any attorney's fees payable through the plan should be denied.
In the Attorney's response, he advises that he is willing to offer the Debtor a professional courtesy discount and not seek fees through the Chapter 13 plan, but merely seeks an order of Court determining that the legal services and fees incurred were necessary and reasonable.
III. DISCUSSION
11 U.S.C. § 329(b) authorizes the bankruptcy court to assess the reasonable value of the services provided to the debtor *721 by his attorney and to compare that value with the amount the debtor paid or agreed to pay for the attorney's services. If the court determines that the fees charged by the attorney are excessive i.e., that they exceed the reasonable value of the services provided then it may cancel any compensation agreement between the attorney and the client, or it may order the return of the excessive portion of the fee to the debtor's estate or to the entity making the payment. In re Geraci, 138 F.3d 314, 318 (7th Cir.1998). In making the reasonable value determination, the bankruptcy court is guided by the factors enumerated in 11 U.S.C. § 330. Id. Once a question has been raised about the reasonableness of the attorney's fees under § 329, it is the attorney who bears the burden of establishing that the fees are reasonable. Id.
Pursuant to 11 U.S.C. § 330 professionals applying for fees payable out of the bankruptcy estate must demonstrate that their services were actual, necessary and reasonable. Specifically, § 330(a)(4)(B) provides in relevant part:
In a . . . chapter 13 case in which the debtor is an individual, the court may allow reasonable compensation to the debtor's attorney for representing the interests of the debtor in connection with the bankruptcy case based on a consideration of the benefit and necessity of such services to the debtor and the other factors set forth in this section.
11 U.S.C. § 330(a)(4)(B) (emphasis supplied). Those other factors referred to are set forth as follows:
(3)(A) In determining the amount of reasonable compensation to be awarded, the court shall consider the nature, the extent, and the value of such services, taking into account all relevant factors, including
(A) the time spent on such services;
(B) the rates charged for such services;
(C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title;
(D) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance and nature of the problem, issue, or task addressed; and
(E) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title.
4(A) Except as provided in subparagraph (b), the court shall not allow compensation for
(i) unnecessary duplication of services; or
(ii) services that were not
(I) reasonably likely to benefit the debtor's estate; or
(II) necessary to the administration of the case.
11 U.S.C. § 330(a)(3) and (4)(A). The Court has previously cited the applicable standards pertinent to the award of attorney's fees and the reimbursement of expenses. See In re Copack, No. 01 B 09341, 2001 WL 1346063 (Bankr.N.D.Ill. Oct.29, 2001).
Orders confirming bankruptcy reorganization plans are binding on both debtors and creditors, and the Seventh Circuit has long recognized the sanctity of confirmation orders. See 11 U.S.C. § 1327; Adair, 230 F.3d at 894; In re Greenig, 152 F.3d 631, 635 (7th Cir.1998); In re UNR Indus., Inc., 20 F.3d 766, 769 (7th Cir.1994); Holstein v. Brill, 987 F.2d 1268, 1270 (7th Cir.1993); *722 In re Pence, 905 F.2d 1107, 1110 (7th Cir.1990). This principal applies to post-petition administrative creditor-claimants as well, like the Attorney.
The logic of the Adair decision regarding the sanctity of confirmation orders is equally compelling here to bar the Attorney's post-confirmation fee request, especially when all creditors received notice of the plan, which made no provision for any attorney's fees. Therefore, the Court holds that this post-confirmation application for attorney's fees cannot properly be allowed when the creditors were advised of a lesser amount, here zero, especially if the effect of allowing such fees would virtually eliminate the promised dividend to general unsecured creditors. It is undisputed that all versions of the Debtor's plan provided no payment for allowed priority attorney's fees. Thus, the Debtor, the Attorney and all creditors are bound by the confirmed plan.
Although the Court has no reason to doubt that the Attorney rendered the services requested, the Trustee's objection must be sustained, inasmuch as allowance of the requested fees as an administrative priority claim would eviscerate the promised dividend to the unsecured creditors. The result obtained in drafting, negotiating and filing several versions of the plan and ultimately obtaining confirmation of a plan was good. However, the fees sought by the Attorney are simply too high and would virtually eliminate payment of the promised 11.4% dividend for unsecured creditors. See, e.g., In re Black, 116 B.R. 818 (Bankr.W.D.Okla.1990) (post-confirmation request for compensation and expenses was denied in uncomplicated Chapter 13 case where the order of confirmation allotted $750.00 for attorney's fees, noting that counsel is bound by the confirmation order under § 1327).
An experienced bankruptcy practitioner, like the Attorney, should have known that the Model Plan format, which contains an express provision for estimating and computing the amount of allowed priority claims of a debtor's attorney, must be accurately completed prior to confirmation. It is too little, too late, to seek such fees as an allowed administrative priority at this point in the case. In sum, the Court concludes that many of the points raised by the Trustee are well founded and thus, sustains, in substantial part, the objection to the Attorney's application.
In addition, the Court sustains the Trustee's argument with respect to the plan not being feasible because of the amount of the timely filed claims. Under 11 U.S.C. § 502(a), a proof of claim filed by a creditor is deemed allowed unless a party in interest objects. See also In re Greenig, 152 F.3d at 633; Adair, 230 F.3d at 894. "A proof of claim executed and filed in accordance with [the Bankruptcy Rules] shall constitute prima facie evidence of the validity and amount of the claim." Fed. R. Bankr.P. 3001(f). Eight proofs of claim were filed in this case. Three of them involve secured claims and are not material under the terms of the confirmed plan relative to the dividend payment to unsecured creditors, and need not be further discussed. The remaining timely filed claims, which are deemed allowed, are: the Illinois Student Assistant Commission $4,153.42; Gardner Carton & Douglas $10,682.67; Resurgent Capital Services $967.13; Hinsdale Management Corporation $6,363.37; and the United States of America, Internal Revenue Service total claim $74,360.56 ($48,421.25 was filed as unsecured priority tax claim under 11 U.S.C. § 507(a)(8) and $25,939.31 was filed as a pre-petition general unsecured tax claim). Thus, the general unsecured and allowed proofs of claim total $48,105.90. Under the confirmed plan, a *723 minimum 11.4% dividend or $5,484.07 was promised to the unsecured creditors. Payment of the Internal Revenue Service's $48,421.25 unsecured priority tax claim alone leaves no funds available to service the allowed unsecured claims and the promised 11.4% dividend. Thus, the plan is not feasible based on the allowed filed claims.
As the leading authority in Chapter 13 practice notes:
Allowance of attorneys' fees as administrative expenses is important to unsecured claim holders in the calculation of disposable income for confirmation purposes. . . . Attorneys' fees that are administrative expenses will be paid from projected income, typically in advance of payments to unsecured claim holders and reducing the money available to prepetition creditors.
See 4 K. Lundin, Chapter 13 Bankruptcy § 294.1 at pp. XXX-XX-XX (3d ed. and 2002 supp.) (citing In re Stromberg, 161 B.R. 510, 517 (Bankr.D.Col.1993) ("Because attorneys' fees in Chapter 13 cases directly reduce the amount to be paid to creditors, without changing the amount that the debtor ultimately has to pay into the plan, it is especially important for the bankruptcy court to scrutinize fee applications, even in the absence of an objection by a creditor or a trustee.")). Lundin further notes that the allowance of attorney's fees as administrative expenses can imperil confirmation. Id. (citing Jensen v. Dunivent (In re Dewey), 237 B.R. 783 (10th Cir. BAP 1999)). In the Dewey case, the bankruptcy court disallowed the debtor's attorney's request for nearly $4,000.00 in post-petition fees because the plan would fail the best interest of creditors' test in 11 U.S.C. § 1325(a)(4). Like the situation in Dewey, if the fees here were allowed, they would exhaust the promised dividend to be paid to unsecured claim holders. Thus, the plan at bar also fails the best interest of creditors' test in § 1325(a)(4).
In defense of his requested fees, the Attorney cites In re Taxman Clothing Co., No. 82 B 2112, 1992 WL 55687 (Bankr.N.D.Ill. March 11, 1992) for the proposition that notions of economy of the estate in fixing fees are considered outdated and have no place in the Bankruptcy Code. While that point is true, the research should have been carried a bit further to the ultimate decision of the Seventh Circuit in In re Taxman Clothing Co., 49 F.3d 310 (7th Cir.1995) where in notable dicta, which is equally applicable here, the court stated:
The result is harsh. But being a creditor and seeing your claim get eaten by a lawyer is a harsh fate as well. Even after the passage of 11 U.S.C. § 330(a)(1), bankruptcy is not intended to be a feast for lawyers. As we read in In re Toney, 171 B.R. 414, 415 (Bankr.S.D.Fla.1994), "absent extraordinary circumstances, bankruptcy estates should not be consumed by the fees and expenses of court-appointed professionals."
Id. at 316. The Court takes no pleasure in rendering the instant decision. Unfortunately, the result is dictated by the applicable law.
For the same reasons articulated with respect to the Attorney's requested compensation, the Court will not authorize reimbursement of the Attorney's incurred expenses. Because the confirmed plan made no provision for payment of any expenses incurred by the Attorney, the Court will not authorize the reimbursement of expenses out of plan payments made to the Trustee. If the Debtor's spouse or the law firm who paid the Attorney's retainers are willing to pay the requested fees and expenses, they are free to do so, but those fees and expenses cannot be properly paid out of the post-confirmation *724 estate at the expense of the other creditors.
IV. CONCLUSION
For the foregoing reasons, the Court sustains, in part, the Trustee's objection and disallows the Attorney's requested fees and expenses.
This Opinion constitutes the Court's findings of fact and conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052. A separate order shall be entered pursuant to Federal Rule of Bankruptcy Procedure 9021.
NOTES
[1] The judges of this Court adopted the Model Plan format to meet the articulated concerns of the Seventh Circuit in Adair v. Sherman, 230 F.3d 890 (7th Cir.2000). The Adair case held that the res judicata effect of the confirmation order precludes a postconfirmation objection to a pre-confirmation filed proof of claim, which is deemed allowed under 11 U.S.C. § 502. The court pointedly noted that the failure to raise an objection at the confirmation hearing or to appeal from the order of confirmation precludes collateral attack on the plan or any provision therein in a subsequent proceeding. Id. at 894 (citing In re Chappell, 984 F.2d 775, 782 (7th Cir.1993)). The Adair court noted that to allow postconfirmation collateral attacks on claims filed before confirmation would give debtors an incentive to refrain from objecting and would destroy the finality that confirmation is intended to provide. Thus, the Adair decision made it crystal clear that once a plan is confirmed, its terms are not subject to collateral attack.
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419 B.R. 109 (2009)
In re Marcia L. CALLAHAN, Debtor.
Marcia L. Callahan, Plaintiff,
v.
United States of America, Defendant.
Bankruptcy No. 06-13513-WCH. Adversary No. 07-1141.
United States Bankruptcy Court, D. Massachusetts, Eastern Division.
November 2, 2009.
*113 L. Jed Berliner, Berliner Law Firm, Springfield, MA, Vincent J. DiMento, Di-Mento & Sullivan, Boston, MA, for Plaintiff.
Julie C. Avetta, U.S. Dept. of Justice-Tax Division, Lisa Bellamy, Wendy J. Kisch, U.S. Department of Justice, Tax Division, Civil Trial, Washington, DC, for Defendant.
MEMORANDUM OF DECISION
WILLIAM C. HILLMAN, Bankruptcy Judge.
I. INTRODUCTION
The matter before the Court is the Complaint filed by Marcia L. Callahan (the "Debtor") against the United States of America (the "United States") seeking a declaration that certain federal tax liens for taxes assessed against James C. Callahan ("Callahan"), the non-debtor spouse of the Debtor, and recorded against property solely owned by the Debtor as the purported nominee and/or transferee of Callahan are invalid. The United States asserts that the Debtor, the 121 Westwood Road Realty Trust, and the A.J. Financial Trust held title to certain real property prior to a *114 Court approved sale as the nominee and/or alter ego of Callahan, and as such, the United States is entitled to the sale proceeds currently held in escrow. Alternatively, the United States contends that the down payment used to purchase the property, which was purported funded by Callahan, constituted a fraudulent transfer with respect to taxes due and owing to the United States, and/or that funds used to make the mortgage payments by Callahan were encumbered by federal tax liens, enabling it to trace the funds to those held in escrow. For the reasons set forth below, I will enter judgment in favor of the Debtor.
II. BACKGROUND
In their Joint Pre-Trial Statement, the parties stipulated to only fifteen facts.[1] Nonetheless, it appears that the facts are not largely in dispute.[2] Instead, the inferences which may be drawn from the factual circumstances and their legal significance are the focus of this adversary proceeding.
The Debtor is the wife of taxpayer Callahan.[3] The Debtor and Callahan were married on February 26, 1979 and have continuously lived together in a marital state ever since.[4] They have two children, Andrew and Jill, born on June 26, 1980 and October 19, 1984, respectively.[5]
At the time the Debtor and Callahan were married, Callahan had a net worth of approximately $1,500,000, consisting of a fifty percent interest in the Red Boot, Inc., a restaurant company in Canton, Massachusetts, and a twenty-five percent interest in Rocky Point Amusements, Inc., a company which, among other things, operated an amusement park in Rhode Island called Rocky Point Park.[6] In contrast, the Debtor entered the marriage with only a few thousand dollars.[7] Prior to the marriage, Callahan asked the Debtor to sign a prenuptial agreement, to which she did not object so long as there was some provision for her; namely, a $100,000 life insurance policy.[8] Despite the prenuptial agreement, Callahan testified that it was always their intention that the Debtor would acquire assets "as soon as reasonably possible, meaning houses and real estate."[9]
After the Debtor and Callahan were married, they lived in a rented apartment in Quincy, Massachusetts.[10] On November 16, 1981, they purchased their first home on 6 Wildewood Drive in Canton, Massachusetts (the "Wildewood Drive Property") for $89,900.[11] The deed reflects that they *115 took title to the property as joint tenants.[12] Callahan testified that they paid an initial down payment of $9,900 and financed the remaining $80,000 of the purchase price.[13] The Debtor testified that they both contributed to the initial down payment.[14]
On December 24, 1982, Callahan deeded his interest in the Wildewood Drive Property to the Debtor for the stated consideration of $1.00.[15] During the trial, Callahan testified that he transferred his interest because he wanted his wife to own the Wildewood Drive Property for the security of her and her son.[16] This sentiment was later echoed by the Debtor.[17] While Callahan conceded liquor service liabilities and amusement park liabilities arising from his business ventures were always in the back of his mind, he credibly stated that the Debtor's security was the primary reason for the conveyance.[18]
Four years later, the Debtor purchased a new home on 269 Chapman Street in Canton, Massachusetts (the "Chapman Street Property") for $350,000.[19] Callahan testified that he was consulted about the purchase, but that it was the Debtor's decision.[20] The deed, dated August 20, 1986, reflects that the Debtor was the sole owner of the Chapman Street Property.[21] The full amount of the purchase price was financed by two mortgages, with the second satisfied several months later from the $150,000 in sale proceeds of the Wildewood Drive Property.[22] Although only the Debtor signed the mortgages on the Chapman Street Property, both the Debtor and Callahan signed the note to Rhode Island Hospital Trust National Bank as obligors for $200,000.[23] Both the Debtor and Callahan testified that Callahan signed the note simply because it was a requirement of the bank.[24] Since the purchase in 1986, the Debtor and Callahan have lived at the Chapman Street Property as their primary residence.[25]
On January 22, 1988, Callahan established the 279 Chapman Realty Trust, naming himself as trustee and his children the beneficiaries for the purpose of acquiring the vacant lot adjacent to the Chapman Street Property, namely 279 Chapman Street.[26] After acquiring 279 Chapman Street, Callahan, as trustee, delivered a mortgage to Wollaston Credit Union to secure a loan in the amount of $157,500, the proceeds of which went to the Debtor.[27] Notably, the mortgage describes both 279 Chapman Street and the Chapman *116 Street Property as the collateral.[28] Ultimately, 279 Chapman Street was sold for $266,000, which Callahan paid to the Debtor.[29] Callahan testified that once the trust property was sold, he believed the trust was "no more."[30] Nonetheless, Callahan maintained that the children ultimately received the benefit of the proceeds through payment of school tuition and other child related expenses.[31]
In 1989, the Debtor proposed the purchase of yet another property on 121 Westwood Road in Falmouth, Massachusetts (the "Falmouth Property") for $500,000 as a second residence for her family.[32] Again, Callahan was consulted, but the Debtor made the decision to purchase the Falmouth Property.[33] On June 20, 1989, the Debtor settled the 121 Westwood Road Realty Trust to take title to the Falmouth Property and named herself as trustee.[34] The trust instrument was drafted by Callahan's business partner's attorney. Callahan testified that he could not recall the exact circumstances leading to the selection of this attorney, but explained that he had prior dealings with this attorney and that he and the Debtor were comfortable with him.[35] Moreover, he could not recall whose idea it was to place the Falmouth Property in a trust, but the Debtor testified unequivocally that it was her idea in consultation with an attorney.[36] Although the trust instrument references a schedule of beneficiaries executed on the same date, no such schedule was ever prepared or executed.[37] On the same date, the Debtor took title to the Falmouth Property as trustee of the 121 Westwood Road Realty Trust.[38]
After an initial down payment of $50,000, the remainder of the $500,000 purchase price of the Falmouth Property was financed with two mortgages. The $50,000 down payment came from the sale of stock of a company doing business as Strawberries Records.[39] Although the initial investment in that company was approximately $20,000, neither Callahan nor the Debtor could recall in whose name the stock was owned or who contributed to the initial *117 investment.[40] The Debtor, as trustee of the 121 Westwood Road Realty Trust, granted a first mortgage on the Falmouth Property in favor of Bay State Federal Savings Bank ("Bay State") in the amount of $250,000.[41] Both Callahan and the Debtor, individually and in her capacity as trustee, signed the note as borrowers.[42] Again, Callahan testified that he signed the note simply because the bank required it.[43] He went on to dispute the United States' contention that he had to sign the note because the Debtor's income was insufficient, stating that the substantial value of the Falmouth Property in relation to the mortgage amount rendered the bank adequately protected.[44] On the same date, the Debtor also executed a note and second mortgage in the amount of $200,000 in favor of the Crowleys, the sellers of the Falmouth Property.[45] Only the Debtor signed that note.
As a result of the Strawberries Records stock sale, Callahan was assessed substantial tax liabilities, including penalties for failure to make estimated tax payments during the quarter prior to the purchase of the Falmouth Property.[46] Despite the IRS's determination, the assessment was the result of an error in Callahan's tax return made by his accountant.[47] Ultimately, the error was discovered and years later much of the tax was abated and Callahan received a refund for substantial overpayments arising from assets which the IRS had forcibly collected. Nonetheless, Callahan testified that he considered himself solvent in June, 1989, based upon his ability to pay his bills as they became due and the fact that his assets exceeded his liabilities.[48]
The Debtor testified that she worked full time up until 1980, when she gave birth to her son.[49] Throughout the 1980s the Debtor worked part-time at the Red Boot with no fixed job description.[50] The Debtor earned no salary from 1990 through 2000.[51] During this period, approximately 1989 to 2001, Callahan made all mortgage payments on both the Chapman Street Property and the Falmouth Property and paid other various bills.[52] The Debtor testified that the monthly mortgage payments for both properties exceeded $4,500 from 1989 to 1996, and later exceeded $5,900 from 1996 to 2001.[53] At trial, Callahan explained that he was happy to pay the mortgages from "monies we had" for the benefit of the Debtor and their children.[54] Similarly, in 1992, when the Crowleys brought suit against the 121 Westwood Road Realty Trust for failure to *118 make a balloon payment under the terms of the note, Callahan testified that he paid off the remaining balance of the note for the benefit of the Debtor.[55] The Debtor later testified that despite all these payments, there was never any understanding or agreement that Callahan would own any interest in either the Chapman Street Property or the Falmouth Property.[56]
In January, 1993, a balloon payment of approximately $150,000 became due under the terms of the Chapman Street Property note. Neither the Debtor nor Callahan were able to pay at that time and subsequently executed a loan modification with Rhode Island Hospital Trust National Bank agreement extending the term of the loan for an additional year.[57] The loan modification agreement, dated January 12, 1993, identifies both the Debtor and Callahan as borrowers.[58]
The Debtor and Callahan filed a joint voluntary petition under Chapter 11 on November 2, 1994.[59] Very little information about the 1994 bankruptcy was offered at trial. Generally, the United States focused its questioning on the Debtors' Schedule A Real Property ("Schedule A") filed in that case. Although not introduced as an exhibit, the testimony elicited from Callahan reflects that they disclosed a fee simple interest in the Chapman Street Property, a one hundred percent beneficial interest in the 279 Chapman Street Realty Trust which owned the adjacent vacant lot, and a one hundred percent beneficial interest in the 121 Westwood Road Realty Trust which owned the Falmouth Property.[60] Thus, Schedule A reflected both the real estate and trusts were owned by Callahan and the Debtor.[61] Though conceding the import of the document and that he signed it, Callahan expressed confusion as to the ownership interests reflect in Schedule A.[62]
Callahan experienced additional tax problems throughout the 1990s. Although the testimony on this point was vague, Callahan was assessed substantial forgiveness of debt income in the early 1990s when a third mortgage in the amount of $322,000 on Rocky Point Park was forgiven due to the failure of Massachusetts Bank & Trust.[63] Ultimately, the amounts due as a result of this were abated in 1992 and 1993.[64] Later, as an officer of Rocky Point Amusements, Inc., Callahan became personally liable for unpaid employment taxes not paid by the business.[65] Pursuant to 26 U.S.C. § 6672, the IRS assessed liabilities against him in the amounts of $153,867.92 and $6,019.86 for the quarterly tax periods ending on December 31, 1994 and 1995, respectively.[66] The assessments for these periods are dated January 1, 1996 and August 11, 1997, respectively.[67] Callahan also testified that he personally borrowed money for Rocky Point Amusements, *119 Inc. and guaranteed some of its loans.[68] Aside from the National Loan Investors lawsuit discussed below, no further information was offered about those guarantees. Ultimately, Rocky Point Amusements, Inc. closed and filed for bankruptcy in 1995.[69]
In 1995, Callahan sold his interest in the Red Boot, Inc. and paid the proceeds towards outstanding Massachusetts state tax obligations.[70] The following year, Callahan opened another restaurant known as T.K.O. Shea's, which was incorporated under an entity known as WalCal, Inc.[71] Ultimately, Callahan obtained a one hundred percent interest in WalCal, Inc. through a buy-out of the other shareholder.[72] As before, however, when WalCal, Inc. failed to pay employment taxes for three quarters of 1998 and all four quarters of 1999, 2000 and 2001, the IRS assessed approximately $247,541.90 against him as the responsible person of WalCal, Inc on September 6, 2004.[73] Callahan also failed to pay his federal income taxes for the tax year 1998 and was assessed an additional $12,755.23 on March 3, 2003.[74]
In 1996, the Debtor and Callahan were again in default under the terms of the Chapman Street Property note for failure to pay the required balloon payment. On December 12, 1996, they entered into a loan forbearance agreement with Ocwen Federal Bank, FSB ("Ocwen"), the then holder of the note.[75] This mortgage was not paid off until November 5, 2001, when the Debtor refinanced the Falmouth Property.[76]
On August 30, 2001, the Debtor, as trustee of the 121 Westwood Road Realty Trust, deeded the Falmouth Property to herself individually for the stated consideration of $1.00 for the purpose of refinancing the Falmouth Property.[77] The Debtor testified that she did so on her own authority and did not consult the beneficiaries of the trust.[78] She further explained that she transferred the Falmouth Property out of the trust because she understood that, in anticipation of the refinancing, banks to preferred owners to be individuals rather than trustees.[79] On the same date, the Debtor executed a note in the amount of $500,000 and granted a mortgage on the Falmouth Property to Astoria Federal Mortgage Corporation ("Astoria").[80] The Settlement Statement from this refinancing indicates that after the payment of the Bay State mortgage, the Debtor received cash in the amount of $238,806.81.[81] At trial, she testified that she paid approximately $186,716.63 to pay off Ocwen's mortgage on the Chapman Street Property.[82]*120 The Debtor used the remaining $52,090.18 for school tuition for her children, mortgage payments, and property maintenance costs.[83]
On June 28, 2002, Andrew Callahan settled the A.J. Financial Trust naming himself trustee.[84] Less than two months later, the Debtor transferred the Falmouth Property to Andrew Callahan, as trustee of the A.J. Financial Trust, by deed dated August 8, 2002. The Debtor testified that the purpose of this transfer was to give her son the house to share with his sister in the event that the Debtor died.[85] At trial, Andrew Callahan admitted that although he knew has was both the trustee and a beneficiary of the A.J. Financial Trust, he did not know the difference.[86]
Although the details are not entirely clear, at some point prior to 2001, Callahan guaranteed a loan made to Rocky Point Amusements, Inc. from Massachusetts Bank & Trust.[87] The Debtor also signed the promissory note for this guarantee.[88] After the failure of Massachusetts Bank & Trust, the claim was sold to National Loan Investors.[89] When Rocky Point Amusements, Inc. failed to meet its obligations under the loan, National Loan Investors brought suit against Callahan and the Debtor as guarantors on October 26, 2000.[90] In anticipation of a judgment in the case, which National Loan Investors ultimately received in May, 2001,[91] Callahan recorded a Declaration of Homestead on the Chapman Street Property on January 12, 2001.[92] Although Callahan signed the Declaration of Homestead stating that he "owned, possessed, and occupied" the Chapman Street Property, he testified that he mistakenly believed that he could record it on the Debtor's behalf to offer her some layer of protection.[93] Ultimately, the Debtor and Callahan settled the National Loan Investors matter for $145,000 with funds borrowed from one Gerald Goulston ("Goulston").[94]
In 2002, the Blue Hill Sports Grille, Inc. was organized with Andrew Callahan, the Debtor's son, as the sole shareholder for the purpose of operating a restaurant known as the Blue Hill Sports Grille ("Blue Hill") in Canton, Massachusetts.[95] At trial, Callahan denied that Andrew Callahan was the sole owner of Blue Hill because he could not obtain the necessary credit to develop the venture in his own name.[96] Although both Callahan and the Debtor indicated that Andrew had some role in Blue Hill, he testified that his only involvement was bartending there a few days a week from August, 2005, to June, 2006.[97] Ultimately, it is undisputed that Callahan played the primary role in the development and operation of Blue Hill, *121 having overseen construction, negotiated the lease, and kept the books.[98] Callahan also had access to Blue Hill's bank accounts and had check signing authority.[99] For all intents and purposes, he was the only manager of Blue Hill.
The Debtor became aware of the Blue Hill venture and had discussed it, presumably with Callahan, for a number of years before it got off the ground.[100] She testified that she believed in the business and had hoped that it would one day provide employment for all four members of her family.[101] The Debtor further testified that she studied the demographics for Blue Hill, was familiar with its location, and wanted to be a part of the venture.[102] In the years that followed, the Debtor's primary role in Blue Hill was that of an investor, periodically refinancing her properties and loaning the proceeds to Blue Hill. The Debtor testified, however, that during the development stages she also worked with the decorator and hired talent.[103]
On September 16, 2003, the Debtor executed a note in the amount of $422,400 and granted a mortgage on the Chapman Street Property to Astoria.[104] The Settlement Statement from this refinancing reflects that after repayment of the Goulston loan and costs, the Debtor received cash in the amount of $259,337.60.[105] Of that amount, the Debtor testified that approximately $9,000 was deposited in the Debtor's and Callahan's joint account at Abington Bank and used for household expenses and tuition.[106] The remaining $250,000 was deposited in a special account called the JMA Management Account, standing for "Just Marcia and Andrew."[107] Only the Debtor and Andrew Callahan were signatories on the JMA Management Account.[108] In December, 2003, the Debtor loaned Blue Hill approximately $50,000 from the JMA Management Account.[109] The Debtor further testified that the remaining balance of the proceeds from the September, 2003 refinancing of the Chapman Street Property were spent on her daughter's tuition, maintenance and improvements to the Falmouth Property, and mortgage payments.[110]
On April 1, 2004, Andrew Callahan, as trustee of the A.J. Financial Trust, once again reconveyed the Falmouth Property to the Debtor for the stated consideration of $1.00.[111] The Debtor then executed a note in the amount of $750,000 and granted a mortgage in the Falmouth Property to Option One Mortgage Corporation ("Option One").[112] According to the Settlement Statement, after the payment of the Astoria mortgage and costs, the Debtor received *122 $243,925.16 from the refinancing.[113] The Debtor testified that she loaned the full amount to Blue Hill by endorsing the check to it directly.[114] A mere fifteen days later, the Debtor conveyed the Falmouth Property to the A.J. Financial Trust.[115]
The Debtor made one final loan to Blue Hill in October, 2004. On October 8, 2004, the Debtor borrowed $85,000 from Goulston and granted him a mortgage on the Chapman Street Property. The Debtor testified that the purpose of this loan was to complete the final stages necessary to open Blue Hill's doors to the public.[116] This time, rather than endorsing the cash disbursement check over to Blue Hill, the Debtor testified that, at her direction, Goulston issued a check for $84,324.50 directly payable to Callahan.[117] At trial, the Debtor explained that she knew that the money was going to be used for the restaurant and saw no need for it to pass through her first.[118] Nonetheless, the Debtor testified unequivocally that the funds were "absolutely" loaned voluntarily.[119]
During the development of Blue Hill, the Debtor returned to work part-time first at T.K.O. Shea's and later at Blue Hill. The Debtor testified that she had no fixed job description or hours at T.K.O. Shea's, and instead did what was needed, including waiting and busing tables and acting as hostess. From 2001 to 2006, WalCal, Inc. paid the Debtor was paid $116,050.[120] In 2004, the Debtor also began drawing a salary from Blue Hill.[121] Similar to her arrangement with WalCal, Inc., the Debtor had no title, fixed hours or job description.[122] Prior to Blue Hill filing its own Chapter 11 case on February 17, 2006,[123] it paid the Debtor a total of $9,100 between 2004 and 2006.[124]
Based upon Callahan's unpaid tax obligations from 1991 to 2001, Notice of Federal Tax Liens were recorded on October 7, 2005 against "A.J. Financial Trust, and/ or, Nominee of Transferee of James C. Callahan" and "Marcia Callahan Nominee and/or, Nominee of Transferee James C. Callahan" on both the Chapman Street Property and the Falmouth Property.[125] The Debtor filed a voluntary petition under Chapter 11 on October 5, 2006. On March 21, 2007, she filed the present adversary proceeding seeking a determination that those tax liens were invalid. While the parties were engaging in lengthy discovery, the Debtor filed a motion to sell the Falmouth Property after receiving an unsolicited offer of $1,329,000. *123 The United States objected, but I granted the motion to sell over the objection and ordered the proceeds of the sale be held in escrow after payment of the first mortgage pending resolution of this adversary proceeding.[126]
I held a trial on June 30, 2009 at which time four witness testified and forty-four exhibits were introduced into evidence. At the conclusion of trial, I took the matter under advisement, and the parties filed post-trial briefs.
III. POSITIONS OF THE PARTIES
The Debtor
The Debtor argues that, consistent with the intent of the parties, she has been the owner and in full control of the Falmouth Property since it was acquired and that she is not the nominee of Callahan. She contends that even if federal law governs the case, the Court must look to state law to determine property rights. Factually, the Debtor contends that there is no evidence in the record that the down payment used to purchase the Falmouth Property came solely from Callahan, as neither could recall how the Strawberries stock was held. Moreover, citing Feinman v. Lombardo, she asserts that when property is paid for by one spouse and title is taken by the other spouse, it is presumed that the non-paying spouse takes title by way of gift.[127] The Debtor further argues that this presumption applies to the Falmouth Property because a schedule of beneficiaries was never prepared for the 121 Westwood Road Realty Trust, causing it to fail under Massachusetts law.[128] Alternatively, the Debtor argues that even if the gift presumption does not apply, the United States has not shown that Callahan either paid the full purchase price for the property or that the parties intended that he take a specific and definite interest in the Falmouth Property as a result of his contribution.
To the extent that the United States asserts that the down payment constituted a fraudulent transfer by Callahan, the Debtor notes that no outstanding taxes were assessed against him until 1996, which was seven years after the purchase of the Falmouth Property. Moreover, she argues that the United States failed to show that Callahan, as a prerequisite to a fraudulent transfer, was insolvent or rendered insolvent at the time of the transfer. Finally, relying on Phelps v. United States, the Debtor contends that the United States has not "distinctly traced" any mortgage payments made by Callahan on the Falmouth Property with funds encumbered by federal tax liens.[129]
The United States
In summary, the United States contends that the Debtor, the 121 Westwood Road Realty Trust, and the A.J. Financial Trust were nominees and/or alter egos of Callahan, allowing its federal tax liens to attach to the Falmouth Property sale proceeds held in escrow. The United States argues at length that federal law should govern the determination of the nominee and alter ego theories in this case, asserting that they serve as equitable remedies in situations where taxpayers deliberately arrange their affairs in a manner to prevent property rights from arising under state law. *124 Moreover, while conceding that courts have split on the subject, the United States argues that cases that rely on state law ignore the Supreme Court's decision in United States v. Kimbell Foods, Inc., which held that when dealing with controversies effecting federal programs courts should consider whether there is a need for a nationally uniform body of law, whether application of state law would frustrate specific objectives of federal programs, and the extent to which federal law would disrupt commercial relationships predicated on state law.[130]
Applying federal law to the facts of this case, the United States contends that Callahan was a sophisticated businessman and an experienced investor who used the Debtor, and later various trust entities, to put the Chapman Street Property and Falmouth Property beyond the reach of his creditors. The United States asserts that Callahan, who was in fact the true owner of Blue Hill, directed the Debtor to repeatedly leverage these properties to fund his business ventures while otherwise enjoying unfettered access to a home in a desirable summer location. The United States notes that the Debtor entered the marriage with few assets, did not work for over a decade, and when she did work only did so part time, leaving her income insufficient to pay the mortgages on the properties she purported to own. As such, all mortgage payments must have been made by Callahan with funds encumbered by the personal tax liens arising from the assessments. For this reason, the United States contends that it can trace those mortgage payments to the funds held in escrow, and requests additional discovery and, if the parties are unable to arrive at a good faith computation of the payments, an evidentiary hearing.
IV. DISCUSSION
A. The Proper Standard
Pursuant to section 6321 of the Internal Revenue Code, the government may impose a lien on property in the hands of a nominee or alter ego of the taxpayer.[131] It is the burden of the United States as the party seeking to apply this section to prove a person or entity is in fact the nominee or alter ego of the taxpayer.
The United States spills much ink advancing its argument that federal common law should be the applicable standard under which its nominee and alter ego theories are determined. It is well established that "[t]he threshold question in ... all cases where the Federal Government asserts its tax lien[ ] is whether and to what extent the taxpayer had `property' or `rights to property' to which the tax lien could attach."[132] "In answering that question, both federal and state courts must look to state law ...."[133] The Supreme Court of the United States has explained that:
We look initially to state law to determine what rights the taxpayer has in the *125 property the Government seeks to reach, then to federal law to determine whether the taxpayer's state-delineated rights qualify as "property" or "rights to property" within the compass of the federal tax lien legislation.[134]
Put another way:
A common idiom describes property as a "bundle of sticks"-a collection of individual rights which, in certain combinations, constitute property. See B. Cardozo, Paradoxes of Legal Science 129 (1928) (reprint 2000); see also Dickman v. Commissioner, 465 U.S. 330, 336, 104 S.Ct. 1086, 79 L.Ed.2d 343 (1984). State law determines only which sticks are in a person's bundle. Whether those sticks qualify as "property" for purposes of the federal tax lien statute is a question of federal law.[135]
When looking to state law, however, courts must "consider the substance of the rights state law provides, not merely the labels the State gives these rights or the conclusions it draws from them."[136] Essentially, where state law creates a legal fiction that allows an otherwise cognizable property interest arising under state law to be dispelled, federal law will look past the fiction and consider the reality of the property interest.[137] To illustrate, in Drye v. United States, the Supreme Court unanimously held that despite a state law created legal fiction that allowed an heir to disclaim an inheritance as if he or she had predeceased the decedent, the heir possessed a "right to property" consisting of the right to accept the inheritance or pass it along.[138] Similarly, in United States v. Craft, the Supreme Court looked past Michigan law which provided that a tenant by the entirety has no separate property interest and concluded that Michigan law grants a tenant by the entirety some of the most essential property rights, including the rights to use, exclude others, and receive income from it, which could be attached.[139]
With these instructions in mind and for the reasons set forth in the following section, I conclude that an application of a federal standard to the United States' nominee and alter ego theories would not alter the result in this case.[140]
B. Nominee and Alter Ego Theories
The United States alleges:
(1) that the 121 Westwood Road Realty Trust was the nominee and/or alter ego of Callahan;
(2) that the Debtor was the nominee of Callahan; and
(3) that the A.J. Financial Trust was the nominee and/or alter ego of Callahan.[141]*126 Because my findings with respect to one entity will impact the others, I will address each separately in the order set forth above.
In simple terms, a nominee is one who holds bare legal title to property for the benefit of another.[142] "The nominee theory focuses upon the taxpayer's relationship to a particular piece of property. The ultimate inquiry is whether the taxpayer has engaged in a legal fiction by placing legal title to property in the hands of a third party while actually retaining some or all of the benefits of true ownership."[143]
Massachusetts law does not recognize a nominee theory or any other analogous remedy with respect to taxpayer liability. Because it will not effect the result of my decision, I will assume, arguendo, that federal law applies to the nominee analysis. To determine whether an existing interest in property is reachable to satisfy a federal tax lien, courts have considered the following factors:
(1) Whether no consideration or inadequate consideration was paid by the nominee for the property and/or whether the taxpayer expended personal funds for the nominee's acquisition;
(2) whether property was placed in the nominee's name in anticipation of a suit or the occurrence of liabilities;
(3) whether a close personal or family relationship existed between the taxpayer and the nominee;
(4) whether the conveyance of the property was recorded;
(5) whether the taxpayer retained possession of, continued to enjoy the benefits of, and/or otherwise treated as his or her own the transferred property;
(6) whether the taxpayer after the transfer paid costs related to maintenance of the property (such as insurance, tax, or mortgage payments);
(7) whether, in the case of a trust, there were sufficient internal controls in place with respect to the management of the trust; and
(8) whether, in the case of a trust, trust assets were used to pay the taxpayer's personal expenses.[144]
Consideration of these factors, however, is the second part of the inquiry.[145] First, I must determine whether under Massachusetts law Callahan held an existing interest or right in the Falmouth Property.
Under Massachusetts law, "[g]enerally speaking, it is presumed that when one party pays the purchase price of property, but title is placed in the name of another, the latter holds the property in a resulting trust for the payor. That is, the payor intended the benefit of the property to inure to him or her, not the title holder."[146] "In contrast, when the transfer is *127 between spouses, the presumption is that the payor intended the title holder to take the property by way of a gift, rather than holding it in a resulting trust."[147] This is often referred to as the marital presumption.[148] Either presumption is rebuttable by a showing of clear and convincing evidence of a contrary intent.[149]
The United States argues that the marital presumption is inapplicable in the present case because the Debtor took title to the Falmouth Property as trustee of the 121 Westwood Road Realty Trust and not in her individual capacity. That would be true but for her failure to prepare a schedule of beneficiaries. In Arlington Trust Co. v. Caimi, the Supreme Judicial Court of Massachusetts held that where a settlor deeds property to himself as trustee and fails to designate a list of beneficiaries in the manner described in the trust instrument, the conveyance is a nullity and the trust never comes into existence.[150] "Where the owner of property declares himself trustee for persons to be selected by him, the selection to be wholly within his control, no trust is created and the settlor continues to hold the property for his own benefit."[151]
Article II of the Declaration of 121 Westwood Road Realty Trust required the Debtor, as trustee, to execute a schedule of beneficiaries.[152] It is irrelevant that she may have intended her children to be the beneficiaries because she failed to do what the declaration of trust required. Therefore, the 121 Westwood Road Realty Trust failed for want of a beneficiary, rendering it a nullity.
When the 121 Westwood Road Realty Trust failed, under Massachusetts law, the Debtor took title to the Falmouth Property in her individual capacity. As such, the marital presumption applies. To establish Callahan holds a beneficial interest in the Falmouth Property in a resulting trust, the United States must prove that at the time of the conveyance, Callahan provided either the entire purchase price for the Falmouth Property or that he paid a specific and definite amount toward the purchase price which entitles him to an exact or definite interest in the Falmouth Property which the parties intended him to take in return for his contribution.[153] "[P]ost-conveyance payments are relevant only if the parties intended these payments to act as the `contemplated consideration for the conveyance.'"[154]
Here, the United States has not carried its burden. First, although the *128 down payment for the Falmouth Property came from the Strawberries Records stock sale, neither the Debtor nor Callahan could recall in whose name it was held or who contributed to the initial investment. As such, it is impossible to determine the definite amount Callahan contributed. Second, even if the Strawberries Records stock was held in Callahan's name solely, he did not pay the entire purchase price. Under the terms of the Bay State note, both Callahan and the Debtor were jointly and severally obligated to repay the mortgage to the same extent as the other. I further note, however, that Callahan's liability on the Bay State note was discharged when the Debtor refinanced the Falmouth Property in 2001. Third, while Callahan paid off the balance of the Crowley mortgage in 1992, the payment was not made at the time of the conveyance nor was there any evidence that the parties intended that he take an interest in the Falmouth Property as a result. To the contrary, Callahan testified that he paid the mortgage for the Debtor's benefit and she repeatedly testified that the Falmouth Property was always intended to be solely hers. Lastly, any mortgage payments paid by Callahan fail for the same reason.
Having concluded that the marital presumption applies and that the United States has not rebutted that presumption, I find that Callahan does not have a legal right or interest in the Falmouth Property under Massachusetts law. To be clear, the marital presumption does not create any legal fiction which federal law would disregard in the same manner as the cases discussed above. In both Drye v. United States and United States v. Craft, the Supreme Court found a property right arising under state law that was otherwise re-characterized by state law. In contrast, the right at issue here does not arise until after application of the Massachusetts resulting trust presumptions dictating who holds the right, as there is no other way to construe the transaction. Therefore, in the absence of a right or interest in the Falmouth Property under state law, the nominee inquiry ends here with respect to the Debtor.
Admittedly, the marital presumption would not apply to mortgage payments Callahan made while the Falmouth Property was held by the A.J. Financial Trust because a trust is not a spouse. The United States contends that the A.J. Financial Trust is the nominee or alter ego of Callahan because there were a "flurry of transfers" between the Debtor and the A.J. Financial Trust for the purpose of refinancing the Falmouth Property to the ultimate benefit of Callahan, the beneficiaries of the A.J. Financial Trust were his close relatives, he had unlimited use and enjoyment of the trust property, he repeatedly availed himself of the equity in the Falmouth Property for his business ventures, and there was no evidence that the trustee ever exercised control over the property by limiting the scope of Callahan's use or enjoyment of the property. I note that this theory, and much of the United States' case, is largely bootstrapped to the premise that the Debtor is the nominee of Callahan. While I have already found otherwise, a brief discussion of the merits of that claim in conjunction with my analysis of A.J. Financial Trust's alleged nominal and/or alter ego status is warranted.
To set the stage, alter ego theory is similar in some respects to a nominee theory. The United States explains that the principal difference between the two is that rather than simply looking to nominally held property, alter ego theory "imposes liability on the premise than [sic] an entity and an individual or two entities should be treated as one and the same for purpose of *129 liability for a debt."[155] In many jurisdictions, alter ego theory is more commonly referred to as piercing the corporate veil.
"In Massachusetts, corporations and their shareholders are generally deemed to be distinct legal entities ... [but] under unusual circumstances, a court may disregard the corporate form, particularly to defeat fraud or remedy an injury."[156] In My Bread Baking Co. v. Cumberland Farms, Inc., the Supreme Judicial Court of Massachusetts described two circumstances where piercing the corporate veil is appropriate:
(a) when there is active and direct participation by the representatives of one corporation, apparently exercising some form of pervasive control, in the activities of another and there is some fraudulent or injurious consequence of the intercorporate relationship, or (b) when there is a confused intermingling of activity of two or more corporations engaged in a common enterprise with substantial disregard of the separate nature of the corporate entities, or serious ambiguity about the manner and capacity in which the various corporations and their respective representatives are acting.[157]
Adopting this standard, the United States Court of Appeals for the First Circuit in Pepsi-Cola Metro. Bottling Co., Inc. v. Checkers, Inc. set forth twelve factors to consider when deciding whether to pierce the corporate veil:
(1) common ownership;
(2) pervasive control;
(3) confused intermingling of business activity, assets, or management;
(4) thin capitalization;
(5) nonobservance of corporate formalities;
(6) absence of corporate records;
(7) no payment of dividends;
(8) insolvency at the time of the litigated transaction;
(9) siphoning away of corporate assets by the dominant shareholders;
(10) nonfunctioning of officers and directors;
(11) use of the corporation for transactions of the dominant shareholders; and
(12) use of the corporation in promoting fraud.[158]
These factors are a non-exclusive list to be considered when applying the Supreme Judicial Court's My Bread standard.[159]
The United States proposes I use a different set of twelve non-exclusive factors developed by federal case law in performing the alter ego analysis. These factors are:
(1) whether the taxpayer treats the entity's property as his own;
(2) consideration paid by the entity for the property if a transfer was involved;
(3) the taxpayer's express intent to shelter assets by a trust;
(4) the taxpayer's control over operations and decisions of the property;
(5) the lack of control by the trust or trustees, or corporate officers or directors;
*130 (6) the relationship between taxpayer and the trustees or corporate officers;
(7) whether the taxpayer capitalized the corporation or settled the trust in anticipation of a lawsuit or liability;
(8) whether the taxpayer continues to enjoy unfettered use of the trust property;
(9) retention of possession by the taxpayer of the trust property;
(10) whether the trust fails to interfere with the taxpayer's use of trust property;
(11) failure to record conveyance (where one is involved); and
(12) expenditure of personal funds by the transferor to purchase and maintain the property.[160]
I note that several of these factors arise in federal nominee cases rather than alter ego cases.[161] While that does not, by itself, render those factors necessarily inconsistent with a finding under an alter ego theory, it is important to remember that piercing the corporate veil is a higher standard than a nominee determination because veil piercing results in the individual or entity being treated as another for purposes of all liabilities. Nonetheless, because the Pepsi-Cola factors are nonexclusive, I will consider the factors advocated by the United States and, if necessary, will weigh them appropriately.
The United States asserts that Callahan directed the Debtor and the various entities under her allegedly nominal control to refinance the Chapman Street Property and the Falmouth Property repeatedly so that he could avail himself of the proceeds for his own uses while simultaneously protecting the properties from his creditors. I find, however, that this assertion is inconsistent with the evidence adduced at trial. First, the record is devoid of any evidence that Callahan asked, let alone directed, his wife to take any action with respect to the Chapman Street Property, the Falmouth Property, any trust, or Blue Hill. In contrast, the record is replete with examples of the Debtor acting in a manner consistent with her stated intentions and interests. Regardless of whether Blue Hill was really Callahan's business and Andrew Callahan was just his straw, the uncontradicted testimony of both the Debtor and Callahan is that she made her own decision to become involved with Blue Hill and loan it money. The Debtor credibly testified that she evaluated the investment and was motivated by her belief that it would be successful and provide work for her entire family. Moreover, while she may not have been a co-owner or manager, her testimony reveals that she was certainly more involved in Blue Hill than simply acting as an ATM card for Callahan.
*131 The Debtor is not wholly unsophisticated. Viewed in total, the Debtor's testimony reflects that she is a bright and motivated woman who has spent considerable time around others engaged in various business ventures. The failure of the 121 Westwood Road Realty Trust suggests that she lacks a certain level of understanding with respect to the transactions in which she engaged, but it still demonstrates that the Debtor had her own goals and a basic understanding of how to accomplish them.
I am equally unpersuaded by the United States' contention that Callahan had unlimited and unfettered enjoyment of the Falmouth Property (and the Chapman Street Property). Although he and the Debtor are separate economic beings, the reality is that they are married and that the Falmouth Property, at least in colloquial sense, was still their home. The fact that Callahan occupied and enjoyed the property with his family as his home, without more, does not rise to unlimited and unfettered use simply because his interests align with that of his wife's more often than not.
In order to rise to the level of use that would warrant a finding of nominal control, Callahan would have had to act in a manner inconsistent with the Debtor's sole ownership rights and truly treat the property as if it was his own. As has been discussed at length, that was simply not the case here.[162] The Debtor, not Callahan, repeatedly leveraged the Falmouth Property. She credibly testified that she did so for her own reasons and used the proceeds to pay her children's tuition, her mortgage payments and maintenance costs on her properties, and to fund an investment in which she was involved.
The United States also makes much of the fact that Callahan conceded that when he transferred the Chapman Street Property to the Debtor and when she purchased the Falmouth Property, he had the possibility of liabilities arising from his various business ventures in the back of his mind. Nonetheless, he credibly testified, repeatedly, that he transferred his interest in the Chapman Street Property and supported her purchase of the Falmouth Property because he wanted her to have security and assets of her own. Moreover, although doom could have struck at any time, the United States never proved that Callahan was insolvent or otherwise incapable of paying such liabilities out of his other assets.[163] In fact, the notion that the Debtor owned the properties on Callahan's behalf to keep them away from his business creditors is undercut by the United States' concurrent theory that the properties were repeatedly leveraged for Callahan's personal uses. On the one hand, the properties were safe from tort liabilities, but, other hand, were ultimately exposed to and used to fund increasing contractual liabilities. In any event, I find that the Debtor's ownership of the Falmouth Property was not simply an effort by Callahan to put it beyond the reach of his creditors.
Returning now to the A.J. Financial Trust, there is more evidence in the record to suggest that it was the nominee and *132 alter ego of the Debtor than Callahan.[164] The uncontradicted testimony is that the Debtor was in control of the Falmouth Property at all times. The Debtor, and not Callahan, attempted to place the Falmouth Property in trust. There is no evidence that she did so at his direction. The Debtor then directed the trustee to deed it to her even though she was neither a trustee nor a beneficiary. After leveraging the Falmouth Property, she returned it to the A.J. Financial Trust where it sat nominally until she required use of it again. Beyond living in the Falmouth Property with his family, there is no evidence that Callahan exercised any kind of control over the A.J. Financial Trust. As such, I find that it was neither his nominee nor his alter ego.
C. Lien Tracing Theory
As previously stated, 26 U.S.C. § 6321 provides that "[i]f any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person."[165] Moreover, "[u]nless another date is specifically fixed by law, the lien imposed by section 6321 shall arise at the time the assessment is made and shall continue until the liability for the amount so assessed ... is satisfied...."[166] Once a lien attaches "'[t]he lien reattaches to the thing and to whatever is substituted for it. ... The owner and the lien holder, whose claims have been wrongfully displaced, may follow the proceeds wherever they can distinctly trace them.'"[167]
In the present case, the earliest tax lien arose on January 1, 1996, when Callahan was assessed $153,867.92 for tax liabilities that arose in 1994. The United States argues that Callahan admitted that he made the mortgage payments on the Falmouth Property until 2001. The subsequent mortgage payments were funded in large part by loans against the equity in the Falmouth Property, none of which it claims, can be traced to funds contributed by the Debtor. Therefore, it asserts that it is entitled to trace its liens from those payments to the funds held in escrow.
The United States, however, failed in its burden to distinctly trace any funds from Callahan to the Falmouth Property. Indeed, they essentially concede as much in their post-trial brief, and request an additional opportunity to do so.[168] Instead, the United States has focused on the premise that Callahan was the only person who could have been making mortgage payments on the Falmouth Property, and to the extent that payments were made, it had to be with funds encumbered by a tax lien that they could trace if given the opportunity. Not only did the Debtor dispute that premise by stating that she made mortgage payments from funds taken from the equity of the Falmouth Property and Chapman Street Property, the United States was given that opportunity on June 20, 2009 and failed to show that Callahan made a single payment with encumbered *133 funds. Evidence is now closed and the United States must stand on their proof, which in this case, is insufficient.
V. CONCLUSION
In light of the foregoing, I will enter judgment in favor of the Debtor against the United States.
NOTES
[1] Joint Pre-Trial Statement, Docket No. 104, ("JPTS") at ¶¶ II.3-17. The parties also stipulated to the authenticity of all exhibits and the admissibility of all bank records. JPTS at ¶¶ II.1-2.
[2] Four witnesses testified at trial: the Debtor, Callahan, the Debtor's son Andrew Callahan, and Paul Crowley, a representative of the Internal Revenue Service ("IRS"). Generally, these witnesses testified credibly. In particular, both the Debtor and Callahan were calm and forthright. Any minor discrepancies in their testimony were attributable to simple memory lapses caused by the passage of time. I further note that the United States provided no witnesses to contradict or rebut either the Debtor's or Callahan's testimony.
[3] JPTS at ¶¶ II.3, 7.
[4] JPTS at ¶ II.4.
[5] JPTS at ¶¶ II.5-6.
[6] Trans. June 30, 2009 at 15, ¶¶ 9-18.
[7] Id. at 113, ¶¶ 8-14.
[8] Id. at 112, ¶ 25; 113, ¶¶ 1-7. See also Exhibit 1.
[9] Trans. June 30, 2009 at 61, ¶¶ 2-10.
[10] Id. at 16, ¶¶ 15-17.
[11] Exhibit 2.
[12] Id.
[13] Trans. June 30, 2009 at 20, ¶¶ 9-19.
[14] Id. at 116, ¶¶ 1-2.
[15] Exhibit 3.
[16] Trans. June 30, 2009 at 18, ¶¶ 6-25.
[17] Id. at 116, ¶¶ 3-19.
[18] Id. at 19, ¶¶ 1-25; 20, ¶¶ 1-8; 53-56.
[19] Exhibit 4.
[20] Trans. June 30, 2009 at 19, ¶¶ 17-25; 57, ¶¶ 1-9.
[21] Exhibit 4.
[22] Trans. June 30, 2009 at 21, ¶¶ 9-25.
[23] Exhibits 6, 7.
[24] Trans. June 30, 2009 at 23, ¶¶ 3-16; 61, ¶¶ 14-25; 62, ¶¶ 1-15; 118, ¶¶ 2-6.
[25] Trans. June 30, 2009 at 64, ¶¶ 7-14.
[26] Id. at 64, ¶¶ 24-25; 65, ¶ 1-9; 68, ¶ 25; 69, ¶¶ 1-2.
[27] Id. at 65, ¶¶ 13-16. Neither the note or mortgage were introduced into evidence, so it is unclear whether the funds were borrowed by the Debtor or simply paid to the Debtor by Callahan.
[28] Id. at 67-68. While Callahan testified that he signed the note and mortgage, it is unclear whether the Debtor signed either document.
[29] Id. at 68, ¶¶ 24-25. On page 68 of the transcript, it states that 279 Chapman Street was sold in October, 2007, but on page 70, it states the sale occurred in 2000. In any event, I find that this discrepancy is immaterial to the issues now before me.
[30] Id. at 71, ¶ 10.
[31] Id. at 70-71. It is undisputed that Callahan and the Debtor paid private school tuition for their two children from sixth grade until they graduated from high school. JPTS at ¶ II. 13.
[32] Id. at 30, ¶¶ 23-25; 31, ¶¶ 1-4; 132, ¶¶ 21-25; 133, ¶¶ 1-15.
[33] Id. at 31, ¶¶ 3-4.
[34] Exhibit 17.
[35] Trans. June 30, 2009 at 74, ¶¶ 13-25; 75, ¶¶ 1-24.
[36] Id. at 75, ¶¶ 2-5; 139, ¶¶ 1-14; 176, ¶¶ 5-25; 177, ¶¶ 1-9. The Debtor stated that her intention was that the house would ultimately go to her children, then aged five and nine, and conceded that she needed legal advice in order to facilitate that end ultimately by means of a trust.
[37] Id. at 137, ¶¶ 2-25; 138, ¶¶ 1-4. The Debtor testified that she intended that her children would be the beneficiaries of the 121 Westwood Road Realty Trust, but simply never got around to preparing the schedule of beneficiaries.
[38] Exhibit 16.
[39] Trans. June 30, 2009 at 32, ¶¶ 18-25; 33, ¶¶ 1-9.
[40] Id. at 33, ¶¶ 12-25; 34, ¶¶ 1-9; 78, ¶¶ 22-25; 79-82, ¶¶ 1-5; 134, ¶¶ 7-23.
[41] Exhibit 18.
[42] Exhibit 19.
[43] Trans. June 30, 2009 at 31, ¶¶ 1-25; 32, ¶¶ 1-4.
[44] Id. at 76, ¶¶ 8-22.
[45] Exhibit 22; Trans. June 30, 2009 at 32, ¶¶ 5-15; 133, ¶¶ 19-25.
[46] Trans. June 30, 2009 at 102, ¶¶ 23-25; 103, ¶¶ 1-8. Exhibit 44.
[47] Id. at 38, ¶¶ 21-25; 29, ¶¶ 1-11. Based upon Callahan's tax return, the IRS determined that he owned the stock.
[48] Id. at 35, ¶¶ 8-24.
[49] Id. at 115, ¶¶ 14-16.
[50] Id. at 62, ¶¶ 21-25; 63, ¶¶ 4-9; 164, ¶¶ 16-25; 165, ¶¶ 1-5.
[51] JPTS at ¶ II. 11.
[52] Id. at 72, ¶¶ 7-25; 73, ¶¶ 1-2;77, ¶ 20.
[53] Id. at 184, ¶¶ 20-22; 187, ¶ 25; 188, ¶¶ 1-2.
[54] Id. at 82, ¶¶ 19-22.
[55] Id. at 82, ¶¶ 7-18.
[56] Id. at 135, ¶¶ 5-25; 136, ¶¶ 1-2.
[57] Exhibit 8; Trans. June 30, 2009 at 24, ¶¶ 2-12.
[58] Exhibit 8. Curiously, on the second page of the loan modification agreement just above the signature lines both the Debtor and Callahan are identified as "Mortgagors."
[59] Case No. 94-44862.
[60] Trans. June 30, 2009 at 84-85.
[61] Id. at 85, ¶¶ 13-25; 86, ¶¶ 1-15.
[62] Id.
[63] Id. at 40, ¶¶ 18-25; 41, ¶¶ 1-2.
[64] Id. at 41, ¶¶ 9-19.
[65] Id. at 87, ¶¶ 5-9.
[66] JPTS at ¶¶ II.9-10.
[67] Id. at ¶ II.10
[68] Trans. June 30, 2009 at 45.
[69] Id. at 88, ¶¶ 22-24.
[70] Id. at 88, ¶¶ 24-25; 89, ¶¶ 3-5.
[71] Id. at 10, ¶¶ 9-10; 12, ¶¶ 20-25.
[72] Id. at 88, ¶¶ 20-22. Callahan further testified that he never paid the former shareholder in full and ultimately had a judgment enter against him. The record is unclear, however, when this occurred and the amount of the judgment.
[73] JPTS at ¶¶ II.9-10.
[74] Id. at ¶¶ 7, 10.
[75] Exhibit 9.
[76] Exhibit 27.
[77] Exhibit 23.
[78] Trans. June 30, 2009 at 140, ¶¶ 20-22.
[79] Id. at 141, ¶¶ 1-6.
[80] Exhibits 24, 25.
[81] Exhibit 26.
[82] Trans. June 30, 2009 at 144, ¶¶ 1-20.
[83] Id. at 144, ¶¶ 21-25; 145, ¶¶ 1-11.
[84] Exhibit 29.
[85] Trans. June 30, 2009 at 145, ¶¶ 22-25; 146, ¶¶ 1-10.
[86] Id. at 220, ¶¶ 1-10.
[87] Id. at 48-49.
[88] Id.
[89] Id. at 28-29.
[90] Id. at 90, ¶¶ 4-10.
[91] Id. at 90, ¶¶ 11-13.
[92] Exhibit 10.
[93] Trans. June 30, 2009 at 30, ¶¶ 2-11.
[94] Id. at 90, ¶¶ 14-23.
[95] Trans. June 30, 2009 at 94, ¶¶ 7-15.
[96] Id. at 94, ¶¶ 16-19.
[97] Id. at 96, ¶¶ 16-19; 171, ¶¶ 23-25; 172, ¶ 1; 218, ¶¶ 24-25; 219.
[98] Id. at 95, ¶¶ 16-25; 96, ¶¶ 1-4; 170, ¶¶ 2-8.
[99] Id. at 99, ¶ 2.
[100] Id. at 128, ¶ 25; 129, ¶¶ 1-3.
[101] Id. at 128, ¶¶ 17-25; 129, ¶¶ 19-25.
[102] Id. at 129, ¶¶ 4-12.
[103] Id. at 170, ¶ 14; 171, ¶ 4.
[104] Exhibit 11.
[105] Exhibit 12.
[106] Trans. June 30, 2009 at 124, ¶¶ 1-21. Though not relevant to the discussion, Abington Bank subsequently became Santander.
[107] Id. at 123, ¶¶ 6-14.
[108] Id. at 123, ¶¶ 15-17.
[109] Id. at 125, ¶¶ 1-16; 127, ¶¶ 2-4.
[110] Id. at 128, ¶¶ 3-16.
[111] Exhibit 30.
[112] Exhibit 33, 34.
[113] Exhibit 31.
[114] Trans. June 30, 2009 at 147, ¶¶ 3-11; Exhibit 32.
[115] Exhibit 35.
[116] Trans. June 30, 2009 at 130, ¶¶ 1-10.
[117] Id. at 130, ¶¶ 17-25; 131, ¶¶ 1-14; Exhibit 15.
[118] Id. at 131, ¶¶ 15-22.
[119] Id. 131, ¶ 25; 132, ¶¶ 1-2.
[120] JPTS at ¶ II. 11. WalCal, Inc. filed its own bankruptcy proceeding in September 6, 2005. See Case No. 05-18028-FJB.
[121] Id.
[122] Trans. June 30, 2009 at 174, ¶¶ 8-17.
[123] Case No. 06-10359-RS.
[124] JPTS at ¶ II. 11. Though not relevant to the disposition of this case, the parties stipulated that the Debtor also received $5,820 in unemployment compensation from the Massachusetts Division of Unemployment Assistance in 2006.
[125] Id. At ¶ II. 10.
[126] JPTS at ¶¶ 14-15.
[127] Feinman v. Lombardo, 214 B.R. 260, 267 (D.Mass.1997).
[128] See Arlington Trust Co. v. Caimi, 414 Mass. 839, 848, 610 N.E.2d 948 (1993).
[129] Phelps v. United States, 421 U.S. 330, 334-335, 95 S.Ct. 1728, 44 L.Ed.2d 201 (1975).
[130] United States v. Kimbell Foods, Inc., 440 U.S. 715, 728-729, 99 S.Ct. 1448, 59 L.Ed.2d 711 (1979).
[131] 26 U.S.C. § 6321.
[132] Aquilino v. United States, 363 U.S. 509, 512, 80 S.Ct. 1277, 4 L.Ed.2d 1365 (1960). See United States v. Craft, 535 U.S. 274, 278, 122 S.Ct. 1414, 152 L.Ed.2d 437 (2002) ("Whether the interest of respondent's husband in the property he held as a tenant by the entirety constitutes `property and rights to property' for the purposes of the federal tax lien statute ... is ultimately a question of federal law. The answer to this federal question, however, depends largely upon state law.").
[133] Aquilino v. United States, 363 U.S. at 512-513, 80 S.Ct. 1277 (emphasis added).
[134] Drye v. United States, 528 U.S. 49, 58, 120 S.Ct. 474, 145 L.Ed.2d 466 (1999).
[135] United States v. Craft, 535 U.S. at 278-279, 122 S.Ct. 1414.
[136] Id. at 279, 122 S.Ct. 1414 (emphasis added).
[137] Id.
[138] Drye v. United States, 528 U.S. at 59-61, 120 S.Ct. 474.
[139] United States v. Craft, 535 U.S. at 283, 122 S.Ct. 1414.
[140] As I base my reasoning on two Supreme Court cases which post-date United States v. Kimbell Foods, 440 U.S. 715, 99 S.Ct. 1448, 59 L.Ed.2d 711 (1979), I reject the United States' contention that it mandates the application of a federal standard to tax collection cases.
[141] JPTS at ¶ IV. 1-3. The United States argues for the first time in its Post-Trial Brief that Blue Hill and JMA Management Trust are also the alter egos of Callahan. Neither of these issues were raised in the Joint Pre-Trial Statement and are waived. JPTS at ¶ IV ("The following issues of law, and no others, remain to be litigated.").
[142] Scoville v. United States, 250 F.3d 1198, 1202 (8th Cir.2001) (citing Black's Law Dictionary (7th ed. 1999)).
[143] Holman v. United States, 505 F.3d 1060, 1065 (10th Cir.2007) (citing Spotts v. United States, 429 F.3d 248, 251 (6th Cir.2005) and Oxford Capital Corp. v. United States, 211 F.3d 280, 284 (5th Cir.2000)) (internal citation omitted).
[144] Dalton v. Commissioner of Internal Revenue, No. 23510-06L, 2008 WL 2651424 *4 (U.S.Tax Ct. July 7, 2008). See also Spotts v. United States, 429 F.3d 248 (6th Cir.2005); Shades Ridge Holding Co. v. United States, 888 F.2d 725, 729 (11th Cir.1989); United States v. Marsh, 114 F.Supp.2d 1036, 1043 (D.Hawai'i 2000).
[145] Dalton v. Commissioner of Internal Revenue, 2008 WL 2651424 *4.
[146] Feinman v. Lombardo, 214 B.R. 260, 267 (D.Mass.1997) (citing Robinson v. Robinson, 366 Mass. 582, 585, 321 N.E.2d 637, 639 (1974); Frank v. Frank, 335 Mass. 130, 135, 138 N.E.2d 586, 588 (1956); Ross v. Ross, 2 Mass.App.Ct. 502, 508, 314 N.E.2d 888, 893 (1974); Restatement (Second) of Trusts § 440 (1976); 76 Am.Jur.2d Trusts § 169 (1992)).
[147] Id.
[148] Id.
[149] Ross v. Ross, 2 Mass.App.Ct. 502, 508, 314 N.E.2d 888 (1974).
[150] Arlington Trust Co. v. Caimi, 414 Mass. 839, 848, 610 N.E.2d 948 (1993).
[151] Id. (quoting 2A Scott, Trusts § 112, at 157 (4th ed. 1987)).
[152] Exhibit 17.
[153] Feinman v. Lombardo, 214 B.R. at 267-268 (citing MacNeil v. MacNeil, 312 Mass. 183, 187, 43 N.E.2d 667, 670 (1942); Druker v. Druker, 308 Mass. 229, 230-31, 31 N.E.2d 524, 525 (1941); Karas v. Karas, 288 Mass. 460, 462-63, 193 N.E. 18, 19 (1934); Dwyer v. Dwyer, 275 Mass. 490, 494, 176 N.E. 619, 620 (1931); O'Brien v. O'Brien, 256 Mass. 308, 309, 310, 152 N.E. 80, 80, 81 (1926); Bailey v. Hemenway, 147 Mass. 326, 328, 17 N.E. 645, 646-47 (1888)).
[154] Id. at 268 (quoting Goldman v. Finkel, 341 Mass. 492, 494, 170 N.E.2d 474, 475 (1960); Saulnier v. Saulnier, 328 Mass. 238, 240, 103 N.E.2d 225, 226 (1952)).
[155] Docket No. 115 at 4.
[156] Aoki v. Atto Corp. (In re Aoki), 323 B.R. 803 (1st Cir. BAP 2005).
[157] My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 614, 233 N.E.2d 748, 752 (1968).
[158] Pepsi-Cola Metro. Bottling Co., Inc. v. Checkers, Inc., 754 F.2d 10, 16 (1st Cir. 1985).
[159] Birbara v. Locke, 99 F.3d 1233, 1238 (1st Cir. 1996).
[160] Docket No. 115 at 11. (citing Shades Ridge Holding Co. v. United States, 888 F.2d 725, 729 (11th Cir.1989); Labadie Coal Co. v. Black, 672 F.2d 92, 98-99 (D.C.Cir.1982); United States v. Marsh, 114 F.Supp.2d 1036, 1043 (D.Hawai'i 2000); City View Trust v. Hutton, 1998 WL 1031525 *10 (D.Wyo. Nov.2, 1998); United States v. Stonier, 73 A.F.T.R.2d 94-2084 (D.Colo. 1994); In re Richards, 231 B.R. 571, 578 (E.D.Pa.1999)).
[161] See, e.g., United States v. Marsh, 114 F.Supp.2d at 1043 ("The following factors have been considered by courts in making the nominee determination: (1) whether the taxpayer exercises dominion and control over the property while the property is in the nominee's name; (2) whether the nominee paid little or no consideration for the property; (3) whether the taxpayer placed the property in the trust's name in anticipation of a lawsuit or liability; (4) whether there is a close relationship between the nominee and the taxpayer; (5) whether the nominee fails to interfere with the taxpayer's use of the property; and similarly (6) whether the taxpayer continued to enjoy the benefits of the property after it transferred the assets to the nominee.").
[162] The only evidence in the record that Callahan treated either property as more than his home in the colloquial sense is that he recorded a declaration of homestead on the Chapman Street Property declaring that he was the owner. Exhibit 10. Even then, he testified credibly that he did so in anticipation of National Loan Investors obtaining a judgment against both him and the Debtor, believing he could file the homestead on her behalf to offer some protection.
[163] I note that the only testimony regarding Callahan's financial condition was that his net worth in 1978 was approximately $1,500,000.
[164] I suspect that the United States would agree with this, provided I had already found that the Debtor was the nominee of Callahan.
[165] 26 U.S.C. § 6321.
[166] 26 U.S.C. § 6322.
[167] Phelps v. United States, 421 U.S. at 334-335, 95 S.Ct. 1728 (quoting Sheppard v. Taylor, 30 U.S. 675, 710, 5 Pet. 675, 8 L.Ed. 269 (1831)). See Markham v. Fay, 74 F.3d 1347 (1st Cir. 1996).
[168] Docket No. 115 at 25.
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IN THE SUPREME COURT OF MISSISSIPPI
NO. 2001-CA-00021-SCT
MICHAEL SALTS, ALICE MARIE SALTS AND SALTS FUNERAL HOME, INC.
v.
GULF NATIONAL LIFE INSURANCE COMPANY, SELECTED FUNERAL INSURANCE
COMPANY, JEREMIAH O'KEEFE, ESTATE OF JAMES C. MAXEY, BOONEVILLE
FUNERAL HOME, PHILLIP DUNCAN, STAN HOWELL AND WILLIAM McDONALD
DATE OF JUDGMENT: 12/1/2000
TRIAL JUDGE: HON. L. BRELAND HILBURN
COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANTS: K. DAVID SAWYER
SCOTT WATSON WEATHERLY, JR.
ATTORNEYS FOR APPELLEES: MICHAEL A. HEILMAN
MARC A. BIGGERS
NATURE OF THE CASE: CIVIL - CONTRACT
DISPOSITION: APPEAL DISMISSED - 08/08/2002
MOTION FOR REHEARING FILED:
MANDATE ISSUED: 8/29/2002
BEFORE PITTMAN, C.J., COBB AND CARLSON, JJ.
COBB, JUSTICE, FOR THE COURT:
¶1. On January 30, 1990, Michael Salts, Alice Marie Salts, and Salts Funeral Home, Inc. ("the Salts") and
Gulf National Life Insurance Company ("Gulf National") entered into an exclusive written agreement
whereby the Salts agreed to sell Gulf National life and burial insurance policies in the Tupelo trade area,
particularly in Prentiss County, Mississippi. On June 28, 1996, the Salts filed a complaint in the Hinds
County Circuit Court, First Judicial District, alleging that Gulf National, d/b/a Selected Funeral Insurance
Company, had denied the exclusivity of their agreement and entered into conflicting contracts with others.
Ultimately seven defendants were named and, after two and a half years of discovery disputes and an
interlocutory appeal to this Court on the question of venue,(1) the Hinds County Circuit Court granted Gulf
National's motion to dismiss on the grounds that the Salts had willfully failed to comply with the court's
order to submit to depositions on February 2-3, 2000. Aggrieved by that order, the Salts appealed,
asserting as their sole assignment of error that it was an abuse of discretion for the trial court to grant Gulf
National's motion to dismiss.
¶2. Because the order of dismissal neither explicitly dismissed all of the defendants in the action, nor was it
certified as a final judgment under M.R.C.P. 54(b), the appeal is not properly before the Court and must be
dismissed.
FACTS
¶3. On July 17, 2000, after four years of procedural turmoil punctuated by innumerable examples of failure
to communicate, with each side blaming the other, this case came before the Hinds County Circuit Court for
hearing on Gulf National's motion to dismiss which alleged that the Salts repeatedly attempted to thwart
discovery and failed to comply with court orders. Argument was heard from attorneys representing the
Salts, as well as attorneys representing defendants Gulf National, Jeremiah O'Keefe, Booneville Funeral
Home, Phillip Duncan and "a couple of more individuals named as defendants."
¶4. On December 4, 2000, the Hinds County Circuit Court entered an order of dismissal on the motion, the
text of which is reproduced here verbatim:
THIS CAUSE came on to be heard on Defendant, Gulf National Life Insurance Company's Motion
to Dismiss. This Court, having heard and considered the motion, the Memorandum Brief in Support
of the motion, the Plaintiff's Response in Opposition to said motion, the Plaintiff's Supplemental
Response in Opposition to said motion, the Defendant's Rebuttal in support of said motion, and the
arguments of counsel for the parties, and being fully advised is of the opinion that the motion [is] well
taken and should be GRANTED. The Court finds that the motion should be granted for the reasons
and arguments set forth by the Defendant, Gulf National Life Insurance Company in its Motion to
Dismiss, the Memorandum Brief in support of the motion, the Rebuttal in support of said motion, and
the arguments of counsel at the hearing on July 17, 2000.
IT IS, THEREFORE, ORDERED AND ADJUDGED that the Defendant, Gulf National Life
Insurance Company's Motion to Dismiss, should be and the same is hereby GRANTED.
SO ORDERED AND ADJUDGED on this the 1st day of December, 2000.
¶5. Gulf National filed its motion to dismiss on February 11, 2000. On February 28, 2000, defendants
Prentiss Funeral Home Directors, Inc., Philip Duncan, William McDonald, and Stan Howell filed their
joinder in Gulf National's motion to dismiss. Named defendants not participating in the joinder included
Jerry O'Keefe, the CEO of Gulf National, and the Estate of James C. Maxey (the President of Gulf
National, who died during the proceedings).
¶6. The appellate record shows no filings by defendants other than Gulf National between February 28,
2000, and December 4, 2000, when the motion to dismiss was granted. As is apparent, the order of
dismissal mentioned no other defendants. Nothing in the record before the Court indicates a Rule 54(b)
certification of the order of dismissal. And none of the parties raised this omission as an issue on appeal.
DISCUSSION
¶7. When faced with the same procedural situation in Gilchrist v. Veach, 754 So. 2d 1172 (Miss. 2000),
this Court, speaking through Presiding Justice Sullivan, clearly and succinctly stated the course of action
required of the Court, as follows:
Because this case is not properly before this Court, it must be dismissed for lack of jurisdiction.
Though none of the parties have raised the issue of whether the order of the circuit court...is
appealable, this Court will address the issue on its own initiative.
Id. at 1173 (sua sponte dismissing appeal for lack of Rule 54(b) certification). Rule 54(b) of the Mississippi
Rules of Civil Procedure provides as follows:
(b) Judgment Upon Multiple Claims or Involving Multiple Parties. When more than one claim
for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim,
or when multiple parties are involved, the court may direct the entry of a final judgment as to one or
more but fewer than all of the claims or parties only upon an expressed determination that there
is no just reason for delay and upon an expressed direction for the entry of the judgment. In
the absence of such determination and direction, any order or other form of decision, however
designated which adjudicates fewer than all of the claims or the rights and liabilities of fewer than all
the parties shall not terminate the action as to any of the claims or parties and the order or
other form of decision is subject to revision at any time before the entry of judgment adjudicating all
the claims and the rights and liabilities of all the parties.
(emphasis added).
¶8. In its order, the trial court mentioned only Gulf National's motion and did not mention any of the other
defendants. No Rule 54(b) certificate having been entered by the trial court, the order is purely
interlocutory and is not an appealable final judgment. Owens v. Nasco Int'l, Inc., 744 So. 2d 772, 774
(Miss. 1999). Because this case is not properly before the Court, it must be dismissed for lack of
jurisdiction.
CONCLUSION
¶9. For the reasons stated above, this appeal is dismissed, and Gulf National's motion to strike the
appellants' brief is dismissed as moot.
¶10. APPEAL DISMISSED.
PITTMAN, C.J., McRAE AND SMITH, P.JJ., WALLER, DIAZ, EASLEY, CARLSON
AND GRAVES, JJ., CONCUR.
1. See Salts v. Gulf Nat'l Life Ins. Co., 743 So. 2d 371 (Miss. 1999), in which this Court reversed and
remanded the trial court's August 11, 1997, order which changed venue to the Prentiss County Circuit
Court.
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In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 05-2603 & 05-2604
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
DOUGLAS L. NITCH and
CURTIS PATTERSON,
Defendants-Appellants.
____________
Appeals from the United States District Court
for the Southern District of Illinois.
No. 02-CR-40078-JPG—J. Phil Gilbert, Judge.
____________
ARGUED MAY 5, 2006—DECIDED FEBRUARY 21, 2007
____________
Before KANNE, WOOD, and SYKES, Circuit Judges.
WOOD, Circuit Judge. Douglas Nitch and Curtis Pat-
terson were convicted by a jury of conspiracy to man-
ufacture with intent to distribute 500 grams or more of
methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1)
and 846 and 18 U.S.C. § 2. Nitch was sentenced to a term
of 168 months in prison, and Patterson was sentenced to
120 months. Nitch appeals both his conviction and his
sentence, claiming that there was an impermissible
variance between the single conspiracy charged in the
indictment and the multiple conspiracies proven at the
trial, and that his sentence is unreasonable. Patterson
challenges only his conviction, arguing that certain
2 Nos. 05-2603 & 05-2604
physical evidence introduced at trial was the fruit of an
unlawful search and should have been suppressed. For
the reasons explained below, we affirm the convictions of
both men, as well as Nitch’s sentence.
I
This case involves a conspiracy to manufacture and
distribute methamphetamine in the town of McLeansboro,
Illinois. According to the testimony presented at trial, in
1999, while he was still a high school student, Nitch
learned to manufacture methamphetamine. At the time,
he was apparently one of only a few people in the town
with this skill. Over the course of the next year or so,
Nitch “cooked” methamphetamine for various people in
town and instructed several others in the manufacturing
process. As things developed, certain people were respon-
sible for obtaining the raw ingredients necessary to
produce the drug; they gave the ingredients to the cooks
(such as Nitch) in exchange for a share of the finished
product.
In either late 2000 or early 2001, Nitch left town for
Missouri. His departure, however, did not disturb the
methamphetamine business in McLeansboro, which con-
tinued without him. Later in 2001, Patterson joined
the McLeansboro meth group. His home became a central
location for the sale and use of the drugs they produced.
In May 2003, a federal grand jury indicted Nitch and 13
others on charges of conspiracy to manufacture metham-
phetamine and to possess it with intent to distribute. A
fourth (and final) superceding indictment charged Nitch,
Patterson, and two others with involvement in the con-
spiracy. Prior to trial, Patterson unsuccessfully moved
to suppress methamphetamine and drug paraphernalia
that was seized from a car in which he was a passenger.
Nos. 05-2603 & 05-2604 3
At trial, in addition to the physical evidence against
Patterson, prosecutors presented testimony from nine
members of the conspiracy who earlier had reached plea
agreements with the government. The jury convicted
both men, and both now appeal.
II
A
We begin with Nitch’s challenge to his conviction. Since
Nitch did not raise his variance argument at trial, we
review the jury’s verdict only for plain error. Under this
standard, Nitch must show that “(1) an error has occurred,
(2) it was ‘plain,’ (3) it affected a substantial right of the
defendant, and (4) it seriously affected the fairness,
integrity, or public reputation of the judicial proceed-
ings.” United States v. Duran, 407 F.3d 828, 834 (7th Cir.
2005) (internal quotation marks and citations omitted);
see generally United States v. Olano, 507 U.S. 725, 732-37
(1993) (discussing plain error review in detail).
A conspiracy variance claim is nothing more than “a
challenge to the sufficiency of the evidence supporting
the jury’s finding that each defendant was a member of
the same conspiracy.” United States v. Townsend, 924
F.2d 1385, 1389 (7th Cir. 1991); see also United States v.
Williams, 272 F.3d 845, 862 (7th Cir. 2001) (citing to
Townsend’s explanation of a conspiracy variance claim). As
a result, “[e]ven if the evidence arguably established
multiple conspiracies, there is no material variance from
an indictment charging a single conspiracy if a reasonable
trier of fact could have found beyond a reasonable doubt
the existence of the single conspiracy charged in the
indictment.” Williams, 272 F.3d at 862.
The thrust of Nitch’s argument is there must have
been more than one conspiracy in this case because he left
4 Nos. 05-2603 & 05-2604
McLeansboro before Patterson became involved in drug
activities there. Although Nitch acknowledges that num-
erous witnesses described their involvement in his meth-
amphetamine operation as well as their work with
Patterson individually, he emphasizes that no witness
testified to seeing the two defendants in the same place
at the same time. Nitch argues that this compels a finding
that there were, at the very least, two separate conspira-
cies, one involving Patterson and another involving
himself.
The government takes the position that no such con-
clusion is inevitable. It describes the conspiracy as con-
sisting of “a large number of methamphetamine addicts
in McLeansboro . . . [who] taught each other how to
produce methamphetamine and helped each other get
the supplies needed to make the drug” in order to accom-
plish the “shared goal” of “produc[ing] a steady supply
of methamphetamine so as to feed their shared addic-
tions.” The government emphasizes that the evidence
showed that Nitch was an early and important part of this
conspiracy. The fact that Nitch and Patterson joined and
participated in the conspiracy at different times, it con-
cludes, is legally irrelevant.
We agree with the government that the evidence sup-
ported the jury’s finding of the single conspiracy charged
in the indictment. The testimony of the first government
witness, Christopher Campbell, served to bridge the
temporal and geographical gap between the participa-
tion of Nitch and that of Patterson. Campbell testified
that he manufactured methamphetamine with Nitch in
McLeansboro until Nitch left for Missouri. After Nitch’s
departure, Campbell moved to Missouri and lived with
Nitch. Still later, Campbell returned to McLeansboro, met
Patterson, and began supplying him with ingredients to
manufacture the drug. Campbell testified that when he
returned from Missouri, several of the same people who
Nos. 05-2603 & 05-2604 5
were involved with the manufacture and distribution of
methamphetamine when Nitch was in McLeansboro had
continued their activities with Patterson.
“To join a conspiracy . . . is to join an agreement, rather
than a group.” Townsend, 924 F.2d at 1390. Thus, the
government was not required to show that Nitch and
Patterson met with one another or even were acquainted
with each other; rather, the government needed only to
prove that Nitch joined the agreement alleged. Id. at 1389.
Based on our review of the evidence, we have little trouble
concluding that a reasonable juror could have found
beyond a reasonable doubt that there was a single multi-
year conspiracy to manufacture methamphetamine in
McLeansboro, in which both Nitch and Patterson partici-
pated.
B
Nitch next challenges his sentence, contending that the
district court did not adequately explain its sentencing
decision and, in particular, failed properly to address
the sentencing factors listed in 18 U.S.C. § 3553(a).
At sentencing, Nitch’s counsel urged the court “to
sentence the defendant to the minimum sentence which
it can find,” emphasizing that in the five years since he
committed the crime Nitch had held down a job and
started a family. Nitch’s lawyer did not, however, specifi-
cally refer to any of the factors set forth in § 3553(a). The
government argued for a sentence at the top of the advi-
sory Guidelines range, pointing out, among other things,
that Nitch had twice tested positive for marijuana use
while out on bail.
In explaining its decision to sentence Nitch to 168
months, the district court stated only:
6 Nos. 05-2603 & 05-2604
Mr. Nitch, I sentenced you to 14 years. It was not the
top of the guideline, not at the bottom. You messed up
when you were out on bond and that affected you. The
jury found you guilty beyond a reasonable doubt, and
the jury believed, based upon the testimony, that you
were involved in more than you believed you were
involved in. And I know you got started at an early
age, young age in this, and I know you tried to get out,
but the law is the law. And you knew better.
Nitch contends that this explanation of his sentence
was inadequate and renders his sentence unreasonable.
Under the law of this circuit, a sentence that is properly
calculated under the Guidelines is entitled to a rebuttable
presumption of reasonableness. United States v. Gama-
Gonzalez, 469 F.3d 1109, 1110-11 (7th Cir. 2006); United
States v. Mykytiuk, 415 F.3d 606, 608 (7th Cir. 2005). “The
defendant can rebut this presumption only by demon-
strating that his or her sentence is unreasonable when
measured against the factors set forth in § 3553(a).”
Mykytiuk, 415 F.3d at 608. A sentencing judge is not
required to “discuss the application of the statutory
factors to the defendant [ ] in checklist fashion,” but rather
must only provide “an adequate statement of the judge’s
reasons, consistent with section 3553(a), for thinking the
sentence that he has selected is indeed appropriate for
the particular defendant.” United States v. Dean, 414
F.3d 725, 729 (7th Cir. 2005).
Although Nitch makes passing reference to several of
the factors listed in § 3553(a), the only argument he
develops is that the district court did not give sufficient
consideration to his “history and characteristics,” in
particular, the fact that he became involved with metham-
phetamine at a young age and that he left McLeansboro
to escape involvement with methamphetamine. But the
record shows otherwise. It is apparent from the district
Nos. 05-2603 & 05-2604 7
court’s statement that “I know you got started at an
early age, young age in this, and I know you tried to get
out,” that the court did consider Nitch’s history and
characteristics, including his youth. The court obviously
was not persuaded, however, that when weighed against
other evidence—such as Nitch’s continued drug use—this
factor alone merited a lower sentence.
We recognize that the Supreme Court has issued a
writ of certiorari to determine whether presumptions like
the one adopted in Mykytiuk are consistent with United
States v. Booker, 543 U.S. 220 (2005). United States v.
Rita, No. 05-4674, 2006 WL 1144508 (4th Cir. May 1,
2006), cert. granted, 75 U.S.L.W. 3246 (U.S. Nov. 3, 2006)
(No. 06-5754). We have therefore also assessed the rea-
sonableness of Nitch’s sentence without applying any
presumptions. Even from that perspective, we cannot say
that the district court’s choice was unreasonable. As the
district court noted, Nitch continued to use drugs while
he was out on bond, and he was involved in a relatively
large conspiracy. A significant sentence (as 168 months
certainly is) cannot be called unreasonable, even taking
into account Nitch’s age at the time of his criminal activi-
ties.
III
Patterson’s conviction was based in part on evidence
that was seized from a car in which he was a passenger.
Patterson moved unsuccessfully to suppress this evidence,
which he claimed was the fruit of an unlawful search—
unlawful because the police officer who made the stop
lacked reasonable suspicion. He now renews his challenge
to the suppression ruling.
On April 5, 2003, a police officer in Morganfield, Ken-
tucky, was flagged down in a Wal-Mart parking lot by a
8 Nos. 05-2603 & 05-2604
store employee. The employee informed the officer that
two individuals had just purchased four boxes of Sudafed,
an over-the-counter nasal decongestant whose active
ingredient, pseudoephedrine, is used to make metham-
phetamine. After the employee identified the car, which
was still in the lot, the officer stopped the vehicle. A
subsequent search turned up several bags of metham-
phetamine as well as drug paraphernalia.
After Patterson and the driver of the car were indicted
in Kentucky state court on drug charges, they successfully
moved to suppress the evidence seized from the car as
the fruit of an unlawful search. They were not so lucky
in this federal case. Here, based on the same facts, the
district court refused to suppress, reasoning that Pat-
terson lacked standing to challenge the evidence because
he was only a passenger in the car and therefore lacked
any reasonable expectation of privacy with regards to the
vehicle’s contents. See Rakas v. Illinois, 439 U.S. 128, 134
(1978); United States v. Washburn, 383 F.3d 638, 643 (7th
Cir. 2004). Patterson argues that this was error.
Although Patterson obviously suffered enough injury
in fact from the search to permit him to challenge the
action of the police, see Minnesota v. Carter, 525 U.S. 83,
887-88 (1998); Rakas, 439 U.S. at 140, and his injury is
redressable, we nevertheless find it unnecessary to
consider whether his Fourth Amendment rights were
violated. If there was any error in the admission of this
evidence, it was harmless. The record contains ample
testimonial evidence connecting Patterson to the charged
conspiracy. This evidence alone was sufficient to con-
vict Nitch. We thus have no doubt that the jury would
have reached the same conclusion regarding Patterson’s
participation in the conspiracy even without physical
evidence of his possession of drugs.
Nos. 05-2603 & 05-2604 9
IV
We AFFIRM the judgments of the district court in both
Nitch’s and Patterson’s cases.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—2-21-07
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
WR-41,274-02 & WR-41,274-04
EX PARTE ANTHONY SHAWN MEDINA
ON APPLICATION FOR WRIT OF HABEAS CORPUS
CAUSE NO. 726088 IN THE 228TH JUDICIAL DISTRICT COURT
HARRIS COUNTY
Per Curiam.
O R D E R
This is a post-conviction application for writ of habeas corpus filed pursuant to the
provisions of Texas Code of Criminal Procedure Article 11.071.
In August 1996, Applicant was convicted of the offense of capital murder. The jury
answered the special issues submitted under Article 37.071 of the Texas Code of Criminal
Procedure, and the trial court, accordingly, set punishment at death. This Court affirmed
Applicant's conviction and sentence on direct appeal. Medina v. State, 7 S.W.3d 633 (Tex.
Crim. App. 1999). This Court dismissed Applicant's initial post-conviction application for
writ of habeas corpus because it was untimely filed. Ex parte Medina, WR-41,274-01 (Tex.
Crim. App. April 28, 1999). This Court dismissed Applicant's third post-conviction
application for writ of habeas corpus as an abuse of the writ. Ex parte Medina, WR-41,274-03 (Tex. Crim. App. November 23, 2005). Applicant's instant post-conviction application
for writ of habeas corpus was received in this Court on June 17, 2009.
Applicant presents fourteen allegations in his application in which he challenges the
validity of his conviction and resulting sentence. The trial court did not hold an evidentiary
hearing. The trial court adopted the State's proposed findings of fact and conclusions of law
recommending that the relief sought be denied.
This Court has reviewed the record with respect to the allegations made by Applicant.
We adopt the trial court's findings and conclusions. Based upon the trial court's findings and
conclusions and our own review, the relief sought is denied.
This Court has also reviewed a document entitled "Additional Claim for Relief by a
Person Sentenced to Death." Because this document was filed in the trial court after the
deadline provided for the filing of an initial application for habeas corpus, we find it to be
a subsequent application. See Art. 11.071. We further find that this subsequent application
fails to meet any of the exceptions provided for in Article 11.071, § 5. Therefore,
Applicant's subsequent application is dismissed as an abuse of the writ.
IT IS SO ORDERED THIS THE 16TH DAY OF SEPTEMBER, 2009.
Do Not Publish
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198 F.2d 39
WHELAN et al.v.PLACID OIL CO. et al.
No. 13687.
United States Court of Appeals Fifth Circuit.
July 24, 1952.
Morton Taylor, Tyler, Tex., John E. Taylor, Marshall, Tex., for appellant.
Ralph B. Shank, Dallas, Tex., James K. Smith, Fort Worth, Tex., B. B. Barber, Shreveport, La., Walter C. Clemons, Houston, Tex., for appellee.
Before BORAH, RUSSELL, and RIVES, Circuit Judges.
BORAH, Circuit Judge.
1
Appellees, Placid Oil Company, Gulf Oil Corporation, and Stanolind Oil & Gas Company, brought this suit in trespass to try title against appellants, D. E. Whelan and R. J. Whelan, to establish their alleged title to an undivided one-half interest in and to the seven-eighths oil, gas and mineral leasehold estate in and under a tract of 146 acres of land situated in the Betty Humphries Survey, Harrison County, Texas, and for an accounting for one-half of all of the oil and gas produced and marketed by appellants from the mineral leasehold estate. Appellants answered with a plea of not guilty and further pleaded that they were the owners of the oil, gas and mineral leasehold estate described in the complaint. After answering, appellants filed a motion to dismiss for want of jurisdiction on the ground that certain persons were interested who were not made parties, who would, if named parties, destroy the diversity of citizenship on which federal jurisdiction was invoked. The district judge carried the motion along with the merits and after hearing the evidence and argument of counsel upheld jurisdiction; found that appellees' lease was senior and superior to appellants' lease and that appellees were entitled to an accounting for one-half of the proceeds from the sales of production from the well located on the 146 acre tract; and rendered judgment in favor of appellees and against the appellants and each of them in the sum of $22,912.31 together with interest thereon at the rate of 6% from the date of judgment until paid. This appeal followed.
2
The material facts were found by the trial court to be substantially as follows: On August 18, 1937 the fee simple title to the 146 acre tract here involved was owned by W. N. Peal, a widower, and his four children, Dean Davidson, A. H. Peal, Vee Tittle and Hallie Peal. On the day aforementioned W. N. Peal and his four children executed an oil, gas and mineral lease to W. W. Blocker, lessee. The lease covered the 146 acre tract and was for a primary term of ten years from July 29, 1937, and for so long thereafter as oil, gas or other mineral was produced from said land. This lease passed by assignment to Gulf Oil Corporation and Placid Oil Company and was extended annually throughout the primary term by the timely payment of delay rentals. W. N. Peal, one of the lessors in the Blocker lease, died interstate on September 12, 1937, and his four children, above named, inherited his one-half interest and became the owners of the entire interest in the minerals in and under the 146 acre tract, subject to the terms and conditions of the Blocker lease. On April 12, 1945, the four Peal children conveyed to Harry Crawford a one-half undivided interest in the minerals in and under the 146 acre tract, subject to the terms and conditions of the outstanding Blocker lease.
3
On the 4th day of March 1947, and within the primary term of the Blocker lease, Placid Oil Company and the four heirs of W. N. Peal executed an amendment to the Blocker lease which authorized the pooling of their interests with other lands and interests. Harry Crawford, under whom appellees assert no title, refused to join in this amendment. Subsequently, by written instrument dated March 12, 1947, Placid Oil Company and others, including the Peal heirs, established a unit consisting of 696.82 acres of land designated as Placid Oil Company — Dee Knox Unit No. 1. The 146 acres here involved was included within the description of said unit. The unit agreement, according to its terms, was established for the purpose of drilling for and producing gas condensate, distillate and other liquid hydrocarbons except oil. All of the owners of the minerals under the 146 acre tract except Harry Crawford joined in the execution of the unitization agreement. In executing this instrument the parties expressly ratified, adopted and confirmed the act of Placid Oil Company in pooling and unitizing the lands within the unit area and also agreed, "That the commencement, drilling, completion of or production from a well on any portion of said unit shall have the same effect upon the terms of each lease covering the lands in the unit as if a well were commenced, drilled, completed or produced on the land embraced by each lease in the unit; and for royalty paying and all other purposes, it is mutually agreed that said unit contains 696.82 acres * * *." Under the terms of this agreement and as a consideration therefor Placid Oil Company was obligated to commence operations for the drilling of a well in search of oil or gas at a location on the unit area within forty-five days from March 12, 1947. This well was drilled on the unit area within the time and in the manner prescribed and was completed as a gas well in June of 1947 and has been continuously producing gas in paying quantities. Since its completion Placid Oil Company has tendered Dean Davidson, A. H. Peal, Vee Tittle and Hallie Peal checks in payment of their royalties on production continuously from month to month.
4
On June 23, 1947, for the purpose of obtaining an allowable for its unit well No. 1 located on its Dee Knox Unit No. 1 Placid Oil Company filed an affidavit with the Railroad Commission of Texas in which it represented to the commission that of the 696.82 acres within the unit area, 623.82 acres of the unit area were unitized by consent of the owners of the royalty and leasehold estates but that, as to the remaining 73 acres, Harry Crawford had refused to join in the unitization agreement and unitize his interest.
5
By written instrument dated February 16, 1948, by and between Placid Oil Company and the numerous parties who own or claim to own interests in the Dee Knox Unit, it was mutually agreed that Placid should process or cause to be processed the gas produced from the well on said unit for the purpose of extracting gasoline or other liquid products therefrom. This processing agreement expressly recognizes that the Dee Knox Unit is in full force and effect and that all of the parties owning minerals in the 146 acres of land subject to the Blocker lease, save Harry Crawford, ratified and adopted it.
6
By gas well allowable supplement, dated September 7, 1948, the Commission provided for a gas allowable for Dee Knox Unit Well No. 1 by using an acreage factor of 550.82 acres, which was 146 acres less than the acreage within the original unit area.
7
On February 12, 1949, Harry Crawford, Dean Davidson, A. H. Peal, Vee Tittle and Hallie Peal executed an oil, gas and mineral lease to the appellant, R. J. Whelan, covering the 146 acres of land here involved. The appellants, D. E. Whelan and R. J. Whelan, drilled a well in search of oil or gas on the 146 acre tract and this well was completed on February 2, 1950 as a producer of gas and gas distillate and it was still producing at the time of trial.
8
On the basis of these findings, none of which are challenged on this appeal, the trial court stated its conclusions of law as follows:
9
"The Blocker lease dated August 18, 1937, * * * insofar as this lease covers a one-half undivided interest in and to the 146 acre tract of land is valid, alive and subsisting, and plaintiffs are entitled to recover of and from the defendants and each of them title to and possession of a one-half undivided interest in and to the oil, gas and mineral leasehold estate in, on and under the 146 acre tract of land. In addition, plaintiffs are entitled to an accounting for one-half of the proceeds from the sales of production from the well located on the 146 acre tract, and plaintiffs are required to pay to the defendants for one-half of the cost of drilling, completing, equipping and operating the well located on the 146 acres, and plaintiffs in turn are entitled to one-half interest in the well and the personal property and equipment used in connection therewith.
10
"The Whelan lease dated February 12, 1949, * * * in so far as this lease covers the undivided one-half interest of Harry Crawford in and to the oil, gas and other minerals under the 146 acres involved in this action, is valid, alive and subsisting, and said lease is owned by the defendant, R. J. Whelan."
11
Appellant's principal contention is that the trial court erred in overruling the motion to dismiss. Appellant contends that the various owners of royalty interest1 under appellees Dee Knox Unit, who were not made parties, are indispensable parties whose interest in the subject matter of this suit would compel their alignment as parties plaintiff and the joinder of said parties, all of whom are citizens of the state of Texas, would deprive the court of jurisdiction based upon diversity of citizenship.
12
As we have shown, this is a suit between adverse lessee claimants for title to and possession of an undivided one-half interest in a mineral leasehold estate. Such being the nature of the present controversy, it follows that Placid must either establish its title against the Whelans or lose it. Placid does not challenge the trial court's finding that the primary term of its lease from the Peal heirs expired without any production from the 146 acre tract covered by the lease. Consequently, it can claim a leasehold in the Peal heirs' one-half of the minerals only by virtue of the unitization agreement and the production from acreage elsewhere in the unit. Since this must be and is the basis of Placid's claim, it follows that all of the other mineral owners who have joined in the unitization agreement have an interest in the Peal Heirs' one-half of the minerals. Veal v. Thomason, 138 Tex. 341, 159 S.W.2d 472. This is true for the reason that the unitization agreement vests all the lessors of land in the unitized block with joint ownership in all the unitized reserves in place in the unit — the ownership being in the proportion which the acreage each member contributed to the pool bears to the total acreage in the unitized block. Hudson v. Newell, 5 Cir., 172 F.2d 848.
13
It is clear and we hold that the parties named in the motion to dismiss are necessary and indispensable parties.
14
The judgment of the trial court will be reversed with directions to dismiss the action for want of indispensable parties.
Notes:
1
These are either overriding royalty owners of royalty owners in the Dee Knox Unit
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278 F.2d 586
Leif M. HANSON et al., Appellants,v.FORD MOTOR COMPANY, a corporation, Appellee.
No. 16236.
United States Court of Appeals Eighth Circuit.
May 17, 1960.
Joe A. Walters, Minneapolis, Minn., and Floyd V. Nichols, Albert Lea, Minn., for appellants.
Robert J. Sheran, Mankato, Minn., for appellee.
Before JOHNSEN, Chief Judge, and VAN OOSTERHOUT and BLACKMUN, Circuit judges.
BLACKMUN, Circuit Judge.
1
Leif M. Hanson, then of Enderlin, North Dakota, in April or May, 1954, accepted from Ford Motor Company, a Delaware corporation, an exclusive Lincoln-Mercury agency at Albert Lea, a county seat community with a population of about 13,500 in southern Minnesota. His territory embraced Freeborn County of that State and the east half of Faribault County adjoining to the west. Hanson started business in June 1954 and had his 'grand opening' in July of that year. Sixteen months later, in November, 1955, he was adjudged bankrupt on an involuntary petition.
2
This diversity action by Hanson against the Ford Motor Company emerges from this unsuccessful venture. It is based on fraud and, specifically, on representations made to Hanson by defendant and alleged to have been false and to have induced him to invest in this enterprise to his injury. The trustee in bankruptcy of Hanson, individually, and d/b/a Hanson Motors, is also a party plaintiff representing the unpaid creditors in the bankruptcy proceeding.
3
The case was tried to a jury and a verdict was returned for the plaintiffs. The defendant made the usual motions for a directed verdict at the close of the plaintiffs' case and again at the close of all the evidence. After the receipt of the verdict, and in compliance with Rule 50(b), F.R.Civ.P., 28 U.S.C.A., defendant moved for judgment in accordance with its previous motion for a directed verdict. This motion was granted and judgment for the defendant was entered. This appeal by the plaintiffs is from that judgment.
4
It is not necessary, in the posture in which this case comes us, to review in detail the evidence contained in the extensive record. It will suffice to note only certain of the primary facts for background purposes. At the time of the trial Hanson was a person 57 years of age who had received some schooling beyond the 8th grade. He had begun to work for a Ford dealer at the age of 18. He later was employed briefly with an automobile agency in Minneapolis. In 1925 he began a 22-year period of employment, interrupted once for only a few months, with the defendant and served in various capacities in the Fargo, North Dakota, territory. In 1947, he purchased a Ford agency at Enderlin, near the southeast corner of North Dakota. He was there for 5 years and apparently prospered. He sold the dealership in 1952 and went searching for a larger Ford agency which would be capable of supporting not only his own family but that of his son whom he wished to have in business with him.
5
This search resulted in a contact in early 1954 with Twin City representatives of the Lincoln-Mercury Division of the Ford Motor Company. Lincoln-Mercury at that time had no exclusive dealer in Albert Lea and had declared the town an 'open point' available for an exclusive agency. Albert Lea was regarded as a growing community with some industry; it was located in good farming country, and had other established automobile dealers selling cars in the competitive price field with Lincoln and Mercury. Conferences between Hanson, occasionally accompanied by his son or his wife, and defendant's representatives, principally Ben W. Mischke and John F. Cooney, took place in Minneapolis and at Albert Lea at various times during the succeeding weeks. There is evidence tending to show that the defendant was enthusiastic about the prospects at Albert Lea and, particularly through Mischke, represented to Hanson that he could make profits and that other Lincoln-Mercury dealers in southern Minnesota 'were making proper returns on their investment' and were making money; that Hanson advised Mischke, at the latter's request, of the extent of his own available assets; that Hanson insisted on seeing actual operating statements of other exclusive Lincoln-Mercury dealers in southern Minnesota; that Mischke told him this was not possible because of company policy; that he, Mischke, however, said he would prepare a statement evidencing those figures; that in March 1954 Mischke gave Hanson a paper purporting to show sales and earnings of exclusive Lincoln-Mercury dealers in New Ulm (population 10,000 and 80 miles sway), Mankato (population 18,000 and 60 miles away), and Winona (population 25,000 and 100 miles away); that this statement indicated a net annual income of $22,400 plus a $6,000 dealer's salary which equated with about $190 per new car on indicated sales of 11 Lincolns and 108 Mercurys; that Hanson then signed the Albert Lea franchise agreement and undertook its obligations; that he leased a building there and started business in June 1954; that he invested over $37,000 in the enterprise; and that after the inception of the bankruptcy proceedings Hanson discovered that the representations as to the earnings of the exclusive Lincoln-Mercury dealers at Winona, Mankato and New Ulm were not true.
6
The principal question before us is whether there is in the record sufficient evidence to justify the jury's conclusion that all the elements of actionable fraud were present. This raises the initial and provocative question whether the state or the federal test of the sufficiency of evidence to support a jury verdict should govern in a diversity action in federal court. The Supreme Court has recently observed that it has not finally decided that question and that the lower federal courts are not in agreement upon it. Dick v. New York Life Ins. Co., 1959, 359 U.S. 437, 444-445, 79 S.Ct. 921, 3 L.Ed.2d 935, and cases cited. See also 5 Moore's Federal Practice (2 Ed. 1951) 38.10. Although this court, prior to Dick, apparently held, in seeming opposition to some other circuits, that the state standard of sufficiency of the evidence is to be applied,1 in 3 recent cases, where the state and federal standards were regarded as substantially alike and the parties assumed the state standard was applicable, this basic question, in line with Dick's example, specifically has been left undecided.2 So here, because the parties have not raised the point, and because the Minnesota standard that a jury verdict 'will not be set aside unless it is manifestly and palpably contrary to the evidence as a whole', Haugen v. Dick Thayer Motor Co., 253 Minn. 199, 214, 91 N.W.2d 585, 594; Barnes v. Northwest Airlines, Inc., 233 Minn. 410, 433, 47 N.W.2d 180, 193, and that it will be sustained 'if it is possible to do so on any reasonable theory of the evidence,' Bush v. Havir, 253 Minn. 318, 320, 91 N.W.2d 784, 786, or 'if the evidence reasonably or fairly tends to sustain it,' Delyea v. Goossen,226 Minn. 91, 99, 32 N.W.2d 179, 184, or if 'there is any competent evidence reasonably tending to sustain the verdict,' Solosky v. J. A. Johnson Co.,223 Minn. 390, 392, 27 N.W.2d 282, 283, does not appear to us to be unlike the federal standard that there be 'substantial evidence,' Terminal R. Ass'n of St. Louis v. Howell, 8 Cir., 165 F.2d 135, 138; Smails v. O'Malley, 8 Cir.,127 F.2d 410, 412; Love v. United States, 8 Cir., 141 F.2d 891, 982; Noble v. United States, 8 Cir., 98 F.2d 441, 442; Gunning v. Cooley, 281 U.S. 90, 50 S.Ct. 231, 74 L.Ed. 720; Brady v. Southern Ry. Co., 320 U.S. 476, 479, 64 S.Ct. 232, 88 L.Ed. 239, or a 'reasonable basis in fact' for the jury's conclusion, Terminal R. Ass'n of St. Louis v. Fitzjohn, 8 Cir., 165 F.2d 473, 478, 1 A.L.R.2d 290, and that the verdict will not be set aside unless 'there is utterly no basis on which it can reasonably rest under the evidence,' Samuelson v. Central Nebraska Public Power & Irrigation Dist., 8 Cir., 125 F.2d 838, 839, we regard the state standard, for purposes of this appeal, as applicable.3
7
The Minnesota Supreme Court has pointed out, however, that in Minnesota 'the entire evidence' or 'the evidence as a whole' is to be the measure for action on such a motion and not merely that part of the evidence which is favorable to a contrary verdict. Hanson v. Homeland Ins. Co. of America, 232 Minn. 403, 404-405, 45 N.W.2d 637, 638; Hanrahan v. Safway Steel Scaffold Co. of Minnesota, 233 Minn. 171, 176-177, 46 N.W.2d 243, 247; Francis v. Anderson, 254 Minn. 341, 343-344, 95 N.W.2d 79, 81. Thus in Minnesota a mere 'scintilla of evidence' is not sufficient to create a question for the jury. The Minnesota court has also said that the granting of the motion 'is a right to be cautiously and sparingly exercised,' Kolatz v. Kelly, 244 Minn. 163, 166, 69 N.W.2d 649, 652; Caron v. Farmers Insurance Exchange, 252 Minn. 247, 255, 90 N.W.2d 86, 92; Hall v. City of Anoka,256 Minn. 134, 97 N.W.2d 380, 382.
8
These, then, are the applicable Minnesota standards which, following the Dick suggestion, we necessarily apply in this case to test the sufficiency of the evidence.
9
The components of actionable fraud are, of course, a matter of substantive law and therefore, since Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, are to be determined for this case by the law of Minnesota where the wrong, if any, took place. Iasigi v. Brown, 17 How. 183, 194, 15 L.Ed. 208; Smyth Sales, Inc. v. Petroleum Heat & Power Co., 3 Cir., 128 F.2d 697; Western Newspaper Union v. Woodward, D.C.W.D.Mo., 133 F.Supp. 17, 23-24; Restatement of the Law, Conflict of Laws, p. 457 and 378. The Supreme Court of that state has described the basic elements of a damage action for fraud as follows:
10
'1. The rule we follow in this state in establishing a fraudulent representation is stated in 8 Dunnell, Dig. (3 ed.) 3818, as follows:
11
"A person is liable for fraud if he makes a false representation of a past or existing material fact susceptible of knowledge, knowing it to be false, or as of his own knowledge without knowing whether it is true or false, with intention to induce the person to whom it is made to act in reliance upon it, or under such circumstances that such person is justified in acting in reliance upon it, and such person is thereby deceived and induced to act in reliance upon it, to his pecuniary damage.'
12
'2. An unqualified affirmation amounts to an affirmation of one's own knowledge.
13
'3. It is immaterial whether a statement made as of one's own knowledge is made innocently or knowingly. An intent to deceive no longer is necessary. Nor is it necessary to prove that defendants knew the representations were false.
14
'4. Fraudulent intent may be proved by showing that the party knew his statements to be false; or that, having no knowledge of their truth or falsity, he did not believe them to be true; or that, having no knowledge of their truth or falsity, he yet represented them to be true of his own knowledge.' Swanson v. Domning, 251 Minn. 110, 114, 86 N.W.2d 716, 720, and cases cited.
15
To the same effect are Spiess v. Brandt, 230 Minn. 246, 250, 41 N.W.2d 561, 565, 27 A.L.R.2d 1; L'Evesque v. Rognrud, 254 Minn. 55, 57, 93 N.W.2d 672, 675; Hafner v. Ritzinger, 256 Minn. 196, 97 N.W.2d 839, 842. If we list these factors numerically, we have:
16
1. There must be a representation;
17
2. That representation must be false;
18
3. It must have to do with a past or present fact;
19
4. That fact must be material;
20
5. It must be susceptible of knowledge;
21
6. The representer must know it to be false, or in the alternative, must assert it as of his own knowledge without knowing whether it is true or false;
22
7. The representer must intend to have the other person induced to act, or justified in acting upon it;
23
8. That person must be so induced to act or so justified in acting;
24
9. That person's action must be in reliance upon the representation;
25
10. That person must suffer damage;
26
11. That damage must be attributable to the misrepresentation, that is, the statement must be the proximate cause of the injury.
27
These elements must be affirmatively proved; they are not to be presumed. 8 Dunnell, Minnesota Digest (3 ed.) Fraud, 3837; Lehman v. Hansord Pontiac Co., 246 Minn. 1, 10, 74 N.W.2d 305, 311-312; Parrish v. Peoples, 214 Minn. 589, 591, 9 N.W.2d 225, 227.
28
In its order granting the motion for judgment, the trial court said:
29
'In determining this motion, the Court has considered all the evidence in the most favorable light to plaintiff. Consequently, the Court must recognize that there is sufficient evidence to sustain a finding of false representations; that is, that the representatives of the defendant company stated on several occasions early in 1954 to Hanson to the effect that the Lincoln-Mercury dealers in New Ulm, Mankato and Winona were then making money in the operation of such dealerships, substantially $22,000 per annum, reflecting a net profit of $190 and $195 per car, together with a dealer's salary of some $500 per month, and that such representations were not true. The evidence must be considered as sustaining a finding that Hanson relied upon these representations and was induced thereby to invest some $39,485 in the establishment and conduct of a Lincoln-Mercury dealership at Albert Lea from about July 15, 1954, to about August 15, 1955, when he became insolvent and had to close his dealership. The jury's verdict likewise must be sustained as to the sufficiency of the evidence in support of a finding that the representations of the defendant were knowingly false or made as of its own knowledge without knowing whether such statements were true or false. Moreover, to the extent of the damages returned, the jury must have found that Hanson's losses were not due to his own derelictions or shortcomings as an automobile dealer.'
30
From this quotation it is evident that most of the essential elements described above for a damage action for fraud were specifically found by the trial court to have sufficient evidentiary basis in the record here. These factors are those listed above as Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10. The correctness of the trial court's determination that these 9 factors have adequate support in the record is not now before us, for the present appeal is by the plaintiffs and not by the defendant. For purposes of this appeal we accept these factors as present and need not re-examine the district court's conclusions with respect to them. This leads us, then, to the narrow question whether the 2 remaining factors, Nos. 4 and 11, having to do, respectively, with materiality and proximate cause, find support in the evidence.
31
At this point, however, we are confronted by the defendant's argument that, in determining the satisfaction here of the necessary element of proximate cause, any responsibility for the effect (the damage) which flows from the cause (the misrepresentation) is to be further limited to what is reasonably foreseeable by the misrepresenter (or by a reasonable person) or, in other words, to those results of his acts which lie within his contemplation at the time of the misrepresentation. Defendant urges this narrowing concept of proximate cause apparently on 2 grounds: (1) that the proposition has already become 'the law of the case', and (2) that the Minnesota decisions require it. We examine these contentions in turn.
32
(1) The claim is made that the element of foreseeability was injected into the case in the court's instructions to the jury, that the plaintiffs took no exception to the use of the 'foreseeable' language by the court in those instructions, that counsel in fact agreed that any damages had to be reasonably foreseeable by the defendant, and thus that the element of foreseeability has become 'the law of the case.'
33
A review of the instructions does disclose multiple references to the concept that any damages must be 'reasonably foreseeable.' Use of the word 'foreseeable' or one of its forms appears no less than 14 times in the charge and supplemental charge. It was also carried forth into the court's order granting the motion for judgment where it was said:
34
'At the time of trial, all counsel agreed that the causal connection between the fraud and the damages must be such that the damages not only had to be the proximate result of the fraud, but to be recoverable the damages must be such as should have been reasonably foreseeable by the defendant at the time the fraud was practiced. The jury was instructed accordingly. No exception was taken to this portion of the charge; consequently, the principle of the foreseeability of the damages must be accepted as the law of the case.'
35
The plaintiffs seek to explain their absence of objection to the instructions on the ground that the use by the court of language of foreseeability in the instructions was obviously and properly directed toward elimination of elements of speculation in determining damages and that it was only upon the issuance of the order granting the motion for judgment that the trial court's specification of foreseeability as a separate and additional factor in actionable fraud appears in the case.
36
The plaintiffs on this appeal are not questioning the instructions as such and, not having noted an exception, they are not now, in any event, in a position to complain about the 'foreseeable' language of those instructions in whatever mold it may have been cast. Rule 51, F.R.Civ.P.; Coca Cola Bottling Co. of Black Hills v. Hubbard, 8 Cir., 203 F.2d 859, 862. Thus, we need not now concern ourselves with the question whether the trial court in its instructions to the jury used its language of foreseeability merely in an effort to exclude damages of a remote character, or whether it felt foreseeability to be an essential element in actionable fraud.
37
This leaves, however, the further and important question whether this court may determine whether the trial court regarded foreseeability as an essential element in passing upon the motion for judgment and, if so, the propriety thereof, or whether the concept of 'the law of the case' prevents such action by this court.
38
We feel that review is open to us. This court's unwelcome reception of the use of the phrase 'the law of the case' and the limited extent of its proper application is evident from the following language of the Coca Cola case, supra, at page 862 of 203 F.2d:
39
'It is true, of course, that an appellant may not challenge on review the correctness of instructions to which he took no exceptions or only a general exception. * * * In that sense, and in that sense only, it may be said that the instructions to which no exceptions are taken become the law of the case for determining whether the instructions are subject to review on appeal. * * * But in determining whether a trial court has erred in denying a motion for a directed verdict made at the close of the evidence, it is the applicable law which is controlling, and not what the trial court announced the law to be in his instructions. This Court must ascertain for itself what the applicable law is, whether the instructions were excepted to or not.' The fact that in the Coca Cola case there were involved a motion for a directed verdict and its denial and the question was one of negligence and the sufficiency of the evidence to submit the case to the jury, whereas in the present litigation there are involved a motion for judgment notwithstanding and its allowance and the question concerns the components of actionable fraud and the sufficiency of the proof thereof, of course affords no valid distinction between that case and this and the language quoted is fully pertinent here. A proper motion for judgment under Rule 50(b) and its allowance will, to paraphrase the language employed in the Coca Cola case, preserve for review the question whether, in granting that motion, correct legal principles were applied by the trial court. We therefore hold that, irrespective of and apart from the instructions to the jury and the lack of an exception thereto by the plaintiffs, this court may review and satisfy itself as to the substantive Minnesota law of the composition of actionable fraud. No theory of 'the law of the case' prevents this.
40
Furthermore, any agreement of counsel as to the composition of actionable fraud has no binding legal effect '* * * since the court cannot be controlled by agreement of counsel on a subsidiary question of law.' Swift & Co. v. Hocking Valley Ry. Co., 243 U.S. 281, 289, 37 S.Ct. 287, 289, 290, 61 L.Ed. 722.4
41
( 2) This takes us then to the defendant's further contention that under Minnesota law only those damages which are foreseeable or are in the contemplation of the wrongdoer or of a reasonable person fall within the concept of proximate cause. It must be conceded that there are expressions in some Minnesota cases cited by the defendant and in certain others which at first reading might be capable of this interpretation. Thus in Walsh v. Paine, 123 Minn. 185, 189, 143 N.W. 718, 719, it was said:
42
'In cases of fraud or deceit, the defendant is responsible for those results which must be presumed to have been within his contemplation at the time of the commission of the fraud, * * *'
43
In Sargent v. Mason, 101 Minn. 319, 323, 112 N.W. 255, 257, and in Tarnowski v. Resop, 236 Minn. 33, 39, 51 N.W.2d 801, 804, the following language from 1 Sutherland on Damages (3rd Ed.) 45 is quoted:
44
'The wrong-doer is answerable for all the injurious consequences of his tortious act, which according to the usual course of events and the general experience were likely to ensue, and which, therefore, when the act was committed, he may reasonably be supposed to have foreseen and anticipated.'
45
And in Smith v. Bolles, 132 U.S. 125, 130, 10 S.Ct. 39, 40, 33 L.Ed. 279, the following quotation from Greenleaf was employed:
46
"The damage to be recovered must always be the natural and proximate consequence of the act complained of,' says Mr. Greenleaf, Vol. 2, 256; and 'the test is,' adds Chief Justice Beasley, in Crater v. Binninger, 33 N.J.Law (4 Vroom) 513, 518, 'that those results are proximate which the wrong-doer, from his position, must have contemplated as the probable consequence of his fraud or breach of contract."5
47
A careful reading of these cases discloses, however, that the phrase either was employed in connection with concern about the remoteness of injury, as in Walsh v. Paine, or with the enunciation of the 'out-of-pocket' measure of damage referred to below, as in Smith v. Bolles, or as another way of saying that the damage must be the natural and probable consequence of the misrepresentation, as in the Sargent, Tarnowski and Boatmen's cases. It is to be noted also that any significance which Sargent v. Mason might have had in this respect is greatly weakened by the later case of Bergquist v. Kreidler, 158 Minn. 127, 131-132, 196 N.W. 964, 965-966, where the author of the opinion said:
48
'Personally I have never been able to see any basis for the reference, in discussing measures of damage, to what the parties may have contemplated or to what they may be supposed to have contemplated. My own idea is that whatever a wrongdoer and his adversary may or may not have contemplated, as the result either of breach of contract or a tort, has nothing to say in answer to the question whether a given element of resulting loss should be considered legal damage. The rule of causation furnishes a better formula for the solution of such a problem.
49
'Where the standard of contemplation has been used at all, the courts have consulted their own notions, rather than any that might have been attributed to the parties. In other words, they have in fact determined, not what was contemplated, but whether a given event is the direct result of the wrongful act. This finds apt illustration in the terse statement of Mr. Justice Collins, speaking for this court in Schumaker v. St. Paul & Duluth Ry. Co., 46 Minn. 39, 42, 48 N.W. 559, 12 L.R.A. 257:
50
"He who commits a trespass must be held to contemplate all the damages which may legitimately flow from his illegal act, whether he may have foreseen them or not; and so far as it is plainly traceable, he must make compensation for the wrong. The damages cannot be considered too remote if, according to the usual experience of mankind, injurious results ought to have been apprehended. It is not necessary that the injury, in the precise form in which it in fact resulted, should have been foreseen. It is enough that it now appears to have been a natural and probable consequence."
51
As the Minnesota court has noted in Wallace v. Hallowell, 56 Minn. 501, 506, 58 N.W. 292, 293:
52
'* * * the rule is, and always has been, that in actions of deceit, or for fraudulent representations, the damages recoverable are all those which naturally and proximately result from the fraud. Courts may have sometimes failed to use strictly accurate terms in stating the rule, and may have sometimes failed to apply it correctly to particular facts, but no court has ever questioned the rule itself.'
53
In any event, the annihilation of 'contemplation' as a limiting factor to the usual concept of proximate cause in Minnesota fraud cases is convincingly clear from the recent case of Lowrey v. Dingmann, 1957, 251 Minn. 124, 127, 86 N.W.2d 499, 502:
54
'The party guilty of the fraud is liable for all out-of-pocket-loss damages proximately caused by the fraud, even though such damages were not within the contemplation of the wrongdoer or his adversary.'
55
This establishes without room for argument that the long announced general concept of proximate cause, in the sense of 'natural and probable consequence', still prevails in Minnesota.6
56
In this connection we should note that although the Minnesota Court has said, 'In this state the rule which permits a recovery in case of fraud is liberal', Woodward v. Western Canada Colonization Co., 134 Minn. 8, 11, 158 N.W. 706, 707, L.R.A.1917C, 270, damages for deceit are governed by the so-called 'out-of-pocket' minority rule, rather than the 'benefit-of-the-bargain' majority rule. Lehman v. Hansord Pontiac Co., supra, at page 10 of 246 Minn., at page 311 of 74 N.W.2d, and cases cited; Lowrey v. Dingmann, supra, at page 127 of 251 Minn., at page 502 of 86 N.W.2d. The measure of damages, as was said in the Lehman case, is then the 'loss naturally and proximately resulting from the fraud, and it will usually be the difference between what the plaintiff parted with and what he got', not what he 'might have gained through the transaction but what he lost, by reason of defendant's deception', plus, as was said in the Lowrey case, 'such other or special damages as were naturally and proximately caused by the fraud prior to its discovery. * * *'
57
We therefore conclude that the usual concept of proximate cause in actionable fraud cannot be narrowed, under the applicable Minnesota decisions, by the engraftation of a separate and additional element of foreseeability. We feel, furthermore, that the trial court's granting of the defendant's motion was based upon this mistaken concept of the need of such an additional element. This is evident from the following excerpts from that order:
58
'* * * the principle of the foreseeability of the damages must be accepted as the law of the case. Obviously, in determining whether the damages Hanson seeks to recover were foreseeable as the result of defendant's fraud, the profits * * * However, the query that is directly presented by this motion is: Should the Ford Motor Company * * * have foreseen that false representations as to * * *
59
'It may seem reasonable to conclude that * * * it should have foreseen that Hanson's operations in a Lincoln-Mercury agency at Albert Lea would fall below * * * Certainly, unless the defendant was aided by a crystal ball, it would seem that there is no possible basis for concluding that it should have foreseen from its experience * * * there is no sound or rational basis for a finding that such misrepresentations were the proximate and foreseeable cause of the losses which Hanson experienced. * * *
60
'The question of proximate cause and foreseeability of the damages sought herein troubled the Court when the case was submitted to the jury. However, after further reflection and consideration, I am clear that plaintiff has failed to sustain the burden of proof that the damage which he seeks to recover was the proximate and foreseeable result of any wrong perpetrated by the defendant. The attempt to translate any misrepresentations of the defendant into the causal and foreseeable damages sustained by Hanson cannot be upheld as a matter of law.'
61
We return, then, to the narrow question whether there is sufficient evidence of materiality and proximate cause to support the jury's verdict for the plaintiffs. At this juncture we find pertinent (a) the Minnesota Supreme Court's definitions of the factor of materiality in fraud,
62
'Misrepresentations, in order to constitute actionable fraud, must be as to material facts of a nature to affect the conduct of others, * * *' Griffin v. Farrier, 32 Minn. 474, 21 N.W. 553-554.
63
'Not every representation is material. A representation is not material unless it prejudices the party or is germane to the fraud alleged.' Rien v. Cooper, 211 Minn. 517, 523, 1 N.W.2d 847, 851.
64
'Here we have a false representation as to a material fact; that is, a fact or facts material to the purchaser with reference to the question whether for certain reasons stated the purchase will be for his advantage.' Lehman v. Hansord Pontiac Co., supra, at page 9 of 246 Minn., at page 311 of 74 N.W.2d.
65
(b) that Court's definition of the factor of proximate cause in fraud,
66
'* * * plaintiff may recover for any injury which is the direct and natural consequence of his acting on the faith of defendant's representations. It must appear that the fraud and damage sustain to each other the relation of cause and effect, or at least that the damage might have resulted directly from the fraud. * * * While the sequence need not be so close as in actions of contract, it still must appear in an appreciable sense that the damage flowed from the fraud as the proximate and not the remote cause.' Walsh v. Paine, supra, at pages 189, 190 of 123 Minn., at page 719 of 143 N.W.,
67
and (c) the established rule that in passing upon the motion for judgment, the trial court and this court are (1) to consider the evidence in the light most favorable to the plaintiffs as the parties prevailing with the jury; (2) to assume that all conflicts in the evidence were resolved by the jury in favor of the plaintiffs; (3) to assume as proved all facts which plaintiffs' evidence tends to prove; (4) to give the plaintiffs the benefit of all favorable inferences which may reasonably be drawn from the facts proved; and (5) to deny the motion if, reviewing the evidence in this light, reasonable men could differ as to the conclusions to be drawn from it.7
68
The representations concerned earnings of other exclusive Lincoln-Mercury dealers in 3 cities in southern Minnesota and were, as the trial court said,
69
'* * * that the representatives of the defendant company stated on several occasions early in 1954 to Hanson to the effect that the Lincoln-Mercury dealers in New Ulm, Mankato and Winona were then making money in the operation of such dealerships, substantially $22,000 per annum, reflecting a net profit of $190 and $195 per car, together with a dealer's salary of some $500 per month, and that such representations were not true.'
70
These were misrepresentations of fact. We also feel that, within the definitions above, they were misrepresentations of material fact. We recognize that statements as to net profits per car can be elusive, for an automobile dealer's activities embrace more than the selling of new cars. Profits or losses flow from these other endeavors and necessarily affect total income. Net per car can be no more than a measure of profits just as is the expression of net as a percentage of gross, but the fundamental fact represented here was that corresponding dealers in the 3 localities were then making money in the area of $22,000 annually plus a dealer's salary. In fact, as the defendant knew, they were then producing no such profits. New Ulm showed a loss with no salary for the last 4 months of 1953, a profit for the firse 4 months of that year (no dealer was operating in the intervening months), before salary, of less than $8,000, and a loss of more than $3,500 with no salary for the first 4 months of 1954. Mankato for 1953 showed a loss before salary of over $5,000 and a loss of more than $10,000 with no salary for the first 4 months of 1954. Winona returned a profit of less than $11,000 before salary for 1953 and one of less than $5,000 before salary for 1954's first 4 months. As the defendant has attempted to explain, there may well have been mitigating circumstances for the poor showing of the Mankato and New Ulm outlets at the time but that does not cure the misrepresentation. The evidence does show that dealers in the 3 cities and perhaps generally throughout the Minneapolis-St. Paul district were making money in 1950, 1951 and 1952 at or beyond, with some exceptions, the $22,000 rate after salary; but the returns were noticeably declining year by year and, most important, the particular representations supported by the evidence, as the court has found, were made to Hanson in early 1954 and were to the effect that the 3 dealers were then making money at the stated rate.
71
Information about these earnings was of vital concern to Hanson. He had endeavored for some time to obtain it. When he did receive it, he, as the court again found, relied upon it and was induced to act by way of investing his funds in the Albert Lea enterprise. Misrepresentations as to past or present income and net profits have been held material in Minnesota fraud actions, Spiess v. Brandt, supra, at pages 250-252 of 230 Minn., at page 565 of 41 N.W.2d; Perkins v. Meyerton, supra; O'Neil v. Davidson, 149 Minn. 457, 184 N.W. 194. Here certainly the representation was of a nature which affected Hanson's conduct, which was germane to the fraud alleged and which was of concern to him in determining whether to engage in the Albert Lea venture.
72
A like result follows with respect to the factor of proximate cause. The problem is simplified by the court's finding that the jury was justified in concluding that Hanson was induced by the misrepresentation to make his investment of over $37,000, by the elimination of the troublesome element of foreseeability and by the jury's obvious conclusion that Hanson's losses-- to the extent of the verdict at least-- were not due to his own derelictions or shortcomings as an automobile dealer. There are, of course, Minnesota cases where the injury claimed has been held not to have been occasioned by the representation or to be too remote.8 But there are also Minnesota cases where the court has found the necessary cause and effect relationship.9 We feel that the record here warrants the finding that Hanson's injuries, in the amount the jury determined, were 'the direct and natural consequences of his acting on the faith of defendant's representations' and that we have here the cause and effect and the damage resulting directly from the fraud required by the standard of Walsh v. Paine, supra.
73
We are fully aware that responsibility, even for fraud, has its limitations; that Hanson was an experienced automobile dealer; that the representer is not a guarantor; that the victim may not irresponsibly accumulate his losses to the detriment of the misrepresenter; and that an automobile manufacturer, such as the defendant here, does not gain by any dealer's collapse. Conversely, however, misrepresentation with damage entails its penalty and cannot always hide behind the facade of mere puffing.
74
We find no merit in the defendant's alternate contention that the action of the court below is to be sustained on the theory that Hanson or his trustee waived the fraud.
75
The defendant made no alternative motion for a new trial. The judgment, therefore, is reversed with directions to reinstate the original judgment for the plaintiffs based upon the jury's verdict.
1
Clay County Cotton Co. v. Home Life Ins. Co., 8 Cir., 113 F.2d 856, 861; Stofer v. Montgomery Ward & Co., 8 Cir., 249 F.2d 285, 289; Continental Can Co. v. Horton, 8 Cir., 250 F.2d 637, 640
2
Ford Motor Co. v. Mondragon, 8 Cir., 1959, 271 F.2d 342, 345; Bennett v. Wood, 8 Cir., 1959, 271 F.2d 349, 351; Lewis v. Nelson, 8 Cir., 1960, 277 F.2d 207
3
It is interesting to observe that the Minnesota Supreme Court has regarded the question of sufficiency of the evidence to present a jury question as a matter of procedural rather than of substantive law and hence it has concluded that the law of the forum governs. Stotzheim v. Djos, 256 Minn. 316, 98 N.W.2d 129, 131 (Footnote 2); Franklin v. Minneapolis, St. P. & S.S.M. Ry. Co., 179 Minn. 480, 487, 229 N.W. 797, 800
4
To the same effect are Estate of Sanford v. Commissioner, 308 U.S. 39, 51, 60 S.Ct. 51, 84 L.Ed. 20; Case v. Los Angeles Lumber Products Co., 308 U.S. 106, 115, 60 S.Ct. 1, 84 L.Ed. 110; Pettibone v. Cook County, Minnesota, 8 Cir., 120 F.2d 850, 856; Andrews v. St. Louis Joint Stock Land Bank, 8 Cir., 107 F.2d 462, 470, certiorari denied sub. nomine Cantley v. Andrews, 309 U.S. 667, 60 S.Ct. 592, 84 L.Ed. 1014; Tynan v. KSTP Incorporated, 247 Minn. 168, 176, 77 N.W.2d 200, 205; Yellow Mfg. Acceptance Corp. v. Handler, 249 Minn. 539, 542, 83 N.W.2d 103, 106; Kobler v. Heins, 189 Minn. 213, 216, 248 N.W. 698, 700
5
This language has been quoted by this court in Boatmen's National Co. v. M. W. Elkins & Co., 63 F.2d 214, 217, a case arising out of Arkansas and decided before Erie R. Co. v. Tompkins, supra
6
Reynolds v. Franklin, 44 Minn. 30, 31, 46 N.W. 139; Wallace v. Hallowell, supra, at pages 506 and 508 of 56 Minn., at pages 293-294 of 58 N.W.; Townsend v. Jahr, 147 Minn. 30, 32-33, 179 N.W. 486, 487; Sampson v. Penney, 151 Minn. 411, 413, 187 N.W. 135; Perkins v. Meyerton, 190 Minn. 542, 545, 251 N.W. 559, 560; Rosenquist v. Baker, 227 Minn. 217, 224, 35 N.W.2d 346, 350
7
Thieman v. Johnson, 8 Cir., 257 F.2d 129, 130; Chicago Great Western R. Co. v. Scovel, 8 Cir., 232 F.2d 952, 955, certiorari denied 352 U.S. 835, 77 S.Ct. 53, 1 L.Ed.2d 54; Coca Cola Bottling Co. of Black Hills v. Hubbard, 8 Cir., at page 860 of 203 F.2d, supra; Gunning v. Cooley, supra, at page 94 of 281 U.S., at page 233 of 50 S.Ct.; Ryan v. Griffin, 241 Minn. 91, 97, 62 N.W.2d 504, 508-509; Caron v. Farmers Insurance Exchange, change, 252 Minn. 247, 255, 90 N.W.2d 86, 92; Lee v. Smith, 253 Minn. 401, 415-416, 92 N.W.2d 117, 127-128; Minder v. Peterson, 254 Minn. 82, 86, 93 N.W.2d 699, 703; Hall v. City of Anoka, 256 Minn. 134, 97 N.W.2d 380, 382
8
Huffman v. Long, 40 Minn. 473, 42 N.W. 355; Winston v. Young, 52 Minn. 1, 53 N.W. 1015; Sampson v. Penney, supra; Dear a. Remington, 176 Minn. 559, 223 N.W. 925; Rehg v. Vermilion Boat & Outing Co., 181 Minn. 92, 231 N.W. 611; Edward Thompson Co. v. Peterson, 190 Minn. 566, 252 N.W. 438; Rien v. Cooper, supra
9
Bergquist v. Kreidler, supra; Perkins v. Meyerton, supra; Lowrey v. Dingmann, supra; Walsh v. Paine, supra
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69 B.R. 552 (1987)
In re John R. BARCLAY and Kim M. Barclay, Debtors.
Bankruptcy No. 86-82185.
United States Bankruptcy Court, C.D. Illinois.
January 28, 1987.
Barry M. Barash, Barash, Stoerzbach & Henson, Galesburg, Ill., for debtors.
Brett A. Kepley, Reno, O'Byrne & Kepley, P.C., Champaign, Ill., for Connecticut General Life Insurance Company.
DECISION AND ORDER
WILLIAM V. ALTENBERGER, Bankruptcy Judge.
This matter came on to be heard on the Debtors' motion to convert their pending *553 Chapter 11 to a Chapter 12. The Chapter 11 was filed on August 26, 1986.
This motion presents the issue of whether farm debtors who had filed a bankruptcy proceeding under Chapter 11 of the Bankruptcy Code prior to the effective date of the Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986, (the "Act"), may convert to a Chapter 12 proceeding. At the hearing it was agreed that the Court must first determine whether conversion is prohibited as a matter of law. If the Court determines that it is not, it must then determine whether it would be equitable, under the particular facts of the case, to permit the Debtors to convert to a Chapter 12 case.
Section 256 of the Act is entitled "Conversion from Chapter 11 to Chapter 12" and amends Section 1112(d) of the Bankruptcy Code, so that it now reads as follows:[1]
"(d) The court may convert a case under this chapter to a case under chapter 12 or 13 of this title only if
(1) the debtor requests such conversion;
(2) the debtor has not been discharged under section 1141(d) of this title; and
(3) if the debtor requests conversion to chapter 12 of this title, such conversion is equitable."
Section 302 of the Act is entitled "Effective Dates; Application of Amendments" and subsection (c) provides as follows:
"(c) Amendments Relating to Family Farmers. (1) The amendments made by subtitle B of title II shall not apply with respect to cases commenced under title 11 of the United States Code before the effective date of this Act."
However, the joint explanatory statement of the committee of conference states as follows:
"It is not intended that there be routine conversion of Chapter 11 and 13 cases, pending at the time of enactment, to Chapter 12. Instead, it is expected that courts will exercise their sound discretion in each case, in allowing conversions only where it is equitable to do so.
Chief among the factors the court should consider is whether there is a substantial likelihood of successful reorganization under Chapter 12.
Courts should also carefully scrutinize the actions already taken in pending cases in deciding whether, in their equitable discretion, to allow conversion. For example, the court may consider whether the petition was recently filed in another chapter with no further action taken. Such a case may warrant conversion to the new chapter. On the other hand, there may be cases where a reorganization plan has already been filed or confirmed. In cases where the parties have substantially relied on current law, availability to convert to the new chapter should be limited."
Section 302(c) of the Act provides that Chapter 12 is not to apply to the cases pending prior to the Act's effective date. The debtors argue that Section 256, by amending Section 1112, specifically authorizes the conversion of their case to a Chapter 12. In support of their interpretation of Section 256, they rely on the above cited legislative history.
At first reading, it might appear that there is a conflict between Sections 302(c) and 256 of the Act. However, in construing a statute, courts attempt to interpret language in one section of the statute consistently with the language of other sections of the statute as a whole. Norfolk & Western Ry. Co. v. United States, 768 F.2d 373 (D.C.1985); Atchison, T. & S.F. Ry. Co. v. United States, 617 F.2d 485 (7th Cir.1980). This court believes that it is possible to interpret Sections 302 and 256 so as to give meaning to both sections in an unambiguous manner. This court believes that Section 302(c) was intended to prohibit *554 the conversion of any bankruptcy matters pending prior to the effective date of the Act to a Chapter 12 proceeding.
Section 256 was intended to amend Section 1112 to provide a method for conversion of cases filed after the effective date of the Act as other than a Chapter 12. Prior to the amendment of Section 1112, that section provided for the conversion of an 11 to a 13, and all the amendment did was to permit an 11 to be converted to a 12 or a 13. Such an interpretation gives meaning to both Sections 302 and 256. If a contrary interpretation was reached, meaning would be given to Section 256 but there could be no meaning given to Section 302(c).
There is also a principle of statutory interpretation that courts do not look to legislative history if the statutory language is clear and unambiguous. United States v. Oregon, 366 U.S. 643, 81 S.Ct. 1278, 6 L.Ed.2d 575 (1961); Glenn v. United States, 571 F.2d 270 (5th Cir.1978); Doski v. M. Goldseker Co., 539 F.2d 1326 (4th Cir.1976). As this Court has indicated, it believes the statutory language is clear and unambiguous. Therefore, there is no need to refer to the legislative history.
In support of this result, this Court would refer to two other principles of statutory interpretation. The first is that a later section of a statute controls over an earlier section of the statute. Lodge 1858, Am. Fed. of Gov't. Emp. v. Webb, 580 F.2d 496 (D.C.Cir.1978) and cases cited therein. In this particular case, the later provision was found in Section 302(c) of the Act and would prohibit a conversion. The final principle is that a specific action of Congress controls over a general action. Estate of Flanigan v. Com'r. Internal Revenue, 743 F.2d 1526 (11th Cir.1984); Aeron Marine Shipping Co. v. United States, 695 F.2d 567 (D.C.Cir.1982). Section 302(c) is specifically directed to the question of conversion and is quite clear in prohibiting it, while Section 256 can be considered more of a general amendment to Section 1112. Lastly, this Court notes that its decision is in accord with the majority of bankruptcy courts which have ruled on the issue. In re Waetjen, Case No. BKY X-XX-XXXX, Nov. 26, 1986 (Bkrtcy.D.Minn.) (unreported decision); In re Groth, 69 B.R. 90 (Bkrtcy. D.Minn.1987); In re B.A.V., Inc., 68 B.R. 411 (D.Colo.).
In conclusion, it is the opinion of this Court that a farm debtor whose Chapter 11 case was pending on the effective date of the Act may not convert to a Chapter 12 proceeding, as a matter of law. Because of that determination, this Court need not determine whether it would be equitable to permit the Debtors to convert their case.
Accordingly, IT IS ORDERED that the motion to convert is DENIED.
NOTES
[1] This section was amended (1) by inserting "12 or" before "13"; (2) in paragraph (1) by striking out "and" at the end thereof; (3) in paragraph (2) by striking out the period at the end thereof and inserting "; and"; and (4) by inserting after paragraph (2) the following: "(3) if the debtor requests conversion to chapter 12 of this title, such conversion is equitable."
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
________________________________________________
)
DEANNA CHANG, )
)
Plaintiff, )
)
v. ) Civil Action No. 08-0871 (PLF)
)
DISTRICT OF COLUMBIA DEPARTMENT OF )
REGULATORY AND CONSUMER AFFAIRS, et al., )
)
Defendants. )
________________________________________________)
OPINION
This matter is before the Court on defendants’ motion to dismiss or, in the
alternative, for summary judgment. After careful consideration of the parties’ papers and the
entire record in the case, the Court will grant defendants’ motion to dismiss as to all counts.1
I. BACKGROUND
Plaintiff Deanna J. Change alleges violations of her procedural and substantive
due process rights, as well as violations of Section 6-1405.01 of the District of Columbia Code,
arising from the issuance of a stop work order on renovations done to her home. See Compl.
¶¶ 1-2. According to the allegations in the complaint, plaintiff received Building Permit No.
B472074 from the District of Columbia Department of Consumer and Regulatory Affairs
1
The Court considered the following papers: the Complaint (“Compl.”);
Defendants’ Motion to Dismiss or in the Alternative for Summary Judgment (“Mot.”); Plaintiff’s
Opposition to Defendants’ Motion to Dismiss or in the Alternative for Summary Judgment
(“Opp.”); and Defendants’ Reply in Support of their Motion to Dismiss or in the Alternative for
Summary Judgment (“Rep.”).
(“DCRA”) to renovate her residence at 1315 Irving St., N.W. on April 28, 2005. See Compl.
¶ 10. The renovations were still ongoing on March 19, 2008 when the DCRA issued a stop work
order. See Compl. ¶¶ 10-11. The Order alleged four separate violations of the District of
Columbia’s Construction Codes: (1) working without a building permit; (2) working without a
demolition permit; (3) failure to post a building permit; (4) failure to post a demolition permit.
See Compl. ¶ 15.
On March 21, 2008, plaintiff went to the DCRA to inquire about the stop work
order. See Compl. ¶ 16. A DCRA employee, Tomeka Jones, informed plaintiff that the proper
method for removing the stop work order was to file a Notice of Appeal with the Chief Building
Inspector, Don Masoero, at DCRA. See Compl. ¶ 18. Plaintiff filed her appeal that same day.
See Compl. ¶ 18. The issue was not resolved, and plaintiff subsequently filed a Notice of Appeal
with defendant Linda Argo, the Director of DCRA. See Compl. ¶¶ 19, 21. On April 4, 2008,
plaintiff met with Mr. Masoero, who agreed that three of the violations — failure to post a
building permit, working without a demolition permit, and failure to post a demolition permit —
were invalid. See Compl. ¶¶ 23, 24. At the same meeting, Mr. Masoero informed plaintiff that
her building permit had expired, putting her in violation of the Construction Codes. See Compl.
¶ 25. Plaintiff believed that Mr. Masoero was incorrect in stating that her permit had expired.
See Compl. ¶ 26. Plaintiff requested a hearing before the Office of Administrative Hearings on
her challenge to Mr. Masoero’s determination, and was waiting for that hearing to be scheduled
when she filed a complaint and a motion for preliminary injunction in this Court. See Compl.
¶ 30. Plaintiff named as defendants the DCRA, Mayor Adrian Fenty in his official capacity, and
Linda Argo and Don Masoero in their individual and official capacities. The Court heard
2
argument on June 20, 2008, but in light of representations made in a joint report filed by the
parties stating that the stop work order had been lifted, the Court denied the motion for
preliminary injunction as moot. See July 21, 2008 Minute Order; see also Joint Report
Concerning Preliminary Injunction.
II. DISCUSSION
Defendants move to dismiss the complaint for failure to state a claim pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure or, in the alternative, for summary
judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Defendants argue that
plaintiff does not plead a cause of action for procedural or substantive due process, that Section
6-1405.01(a) of the District of Columbia Code does not confer a private right of action on
plaintiff, and that in the absence of any viable federal claim the Court should decline to exercise
supplemental jurisdiction and should dismiss the remaining claims. They also argue that
defendants Linda K. Argo and Don Masoero enjoy qualified immunity for the claims asserted
against them. The Court will grant defendants’ motion to dismiss in its entirety.
A. Rule 12(b)(6)
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows dismissal of a
complaint if a plaintiff fails “to state a claim upon which relief can be granted.” FED . R. CIV . P.
12(b)(6). In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court clarified
the standard of pleading that a plaintiff must meet in order to survive a motion to dismiss under
Rule 12(b)(6). The Court noted that “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a
short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to
3
‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests[.]’”
Bell Atlantic Corp. v. Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47
(1957)); see also Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007); Aktieselskabet AF 21 v.
Fame Jeans Inc., 525 F.3d 8, 15 (D.C. Cir. 2008). Although “detailed factual allegations” are not
necessary to withstand a Rule 12(b)(6) motion, a plaintiff must furnish “more than labels and
conclusions” or “a formulaic recitation of the elements of a cause of action” to provide the
“grounds” of “entitle[ment] to relief.” Bell Atlantic Corp. v. Twombly, 550 U.S. 555; see also
Papasan v. Allain, 478 U.S. 265, 286 (1986). While there is no “probability requirement at the
pleading stage,” Bell Atlantic Corp. v. Twombly, 550 U.S. at 556, “something beyond . . . mere
possibility . . . must be alleged[.]” Id. at 557-58. The facts alleged in the complaint “must be
enough to raise a right to relief above the speculative level,” id. at 555, or must be sufficient “to
state a claim to relief that is plausible on its face.” Id. at 570. The Court referred to this newly
clarified standard as “the plausibility standard.” Id. at 560 (abandoning the “no set of facts”
language from Conley v. Gibson).
On a motion to dismiss under Rule 12(b)(6), the Court “must accept as true all of
the factual allegations contained in the complaint.” Erickson v. Pardus, 127 S. Ct. at 2200; see
also Bell Atlantic Corp. v. Twombly, 550 U.S. at 555; Summit Health, Ltd. v. Pinhas, 500 U.S.
322, 325 (1991); Aktieselskabet AF 21 v. Fame Jeans Inc., 525 F.3d at 15. It must construe the
complaint “liberally in the plaintiff[’s] favor, and grant plaintiff[] the benefit of all inferences that
can be derived from the facts alleged.” Kowal v. MCI Communications Corp., 16 F.3d 1271,
1276 (D.C. Cir. 1994); see also Aktieselskabet AF 21 v. Fame Jeans Inc., 525 F.3d at 15. The
Court, however, need not accept inferences drawn by a plaintiff if those inferences are
4
unsupported by facts alleged in the complaint; nor must it accept plaintiff’s legal conclusions.
See Kowal v. MCI Communications Corp., 16 F.3d at 1276; Browning v. Clinton, 292 F.3d 235,
242 (D.C. Cir. 2002).
B. Procedural Due Process Claim
For her procedural due process claim, plaintiff asserts that she had a
constitutionally protected property right in her building permit and that defendants issued the
stop work order without basis and without prior notice and the opportunity for a hearing. The
Court will assume, for the purposes of this discussion, that plaintiff had a valid property interest
in Building Permit B472074, a point defendants do not contest in their motion. See 3883
Connecticut LLC v. District of Columbia, 336 F.3d 1068, 1072 (D.C. Cir. 2003) (finding a
property interest in the possession of a building permit). At issue is whether plaintiff received
adequate process in conjunction with issuance of the stop work order.
The provisions of the D.C. Construction Codes in force at the time provided for
the following appeals process:
112.1 Appeals within the Department. The owner of a building or
structure or any person suffering a legal wrong, or adversely
affected or aggrieved, may initiate an appeal, within the
Department from a stop work order . . . .
112.1.1 Official Notice of Action. The official inspector, or other
person whose action or decision is being appealed shall provide the
claimant written notice of the action or decision, which shall state
as a minimum the name of the claimant, address of the property in
question, nature of violation or non-compliance, section of the
construction codes providing the basis for the action or decision
taken, and the reviewing official within the Department to whom
the appeal should be taken.
5
112.1.2 Action on Appeal. Within three (3) working days of receipt
of the appeals form, the reviewing official shall affirm, modify, or
reverse the previous action or decision. If the reviewing official
affirms or modifies the previous action or decision, the claimant
may request a review of the matter by the Director. Further, if the
reviewing official does not act upon the appeal within the three
working day period, the decision will be deemed affirmed and the
claimant may proceed to request review by the Director. The
Director will act on the request within an additional three (3)
working days. The decision of the Director shall be the final
decision of the Department. If the Director does not act within the
three working day period, or denies the appeal, the claimant may
appeal the matter directly to the Board of Appeals and Review.
112.2 Appeal to Board of Appeals and Review. The owner of a
building or structure any person suffering a legal wrong or
adversely affected or aggrieved by a final decision of the code
official, as set forth above in § 112.1 may appeal to the D.C. Board
of Appeals and Review.
D.C. MUN . REGS. tit. 12A § 112 (2008).2
In 3883 Connecticut LLC v. District of Columbia, 336 F.3d at 1073, the D.C.
Circuit considered an earlier iteration of these same appeal provisions under the standard
established by the Supreme Court in Mathews v. Eldridge, 424 U.S. 319 (1976). It concluded
that these procedures afford a permit holder adequate process to challenge a stop work order,
explaining:
[T]he permit holder has a substantial interest in the continued
effect of the permit and in proceeding with a project without delay.
. . . At the same time, we recognize the District’s significant
interest in maintaining its capability to act swiftly to bring an
immediate halt to construction work that poses a threat to public
health and safety or to the environment. . . . Moreover, the
regulations provide for expedited post-deprivation review before
two District officials and then immediate appeal to the District
2
The Construction Codes have since been amended slightly. See D.C. MUN . REGS.
tit. 12A §§ 112A-114A (2009).
6
Board of Appeals and Review — a procedure that reduces the risk
of protracted harm from a wrongly issued permit. . . . We therefore
conclude that these protections meet the requirements of due
process.
3883 Connecticut LLC v. District of Columbia, 336 F.3d at 1074 (citations omitted). This Court
finds that the D.C. Circuit’s decision in 3883 Connecticut is controlling here; plaintiff has
alleged no basis for distinguishing the process that she received from that found adequate in 3883
Connecticut.
More specifically, plaintiff alleges that the stop work order was issued by Michael
Pearson, acting on behalf of DCRA, and that it alleged four violations of the Construction Codes.
See Compl. ¶ 15, Ex. 3 (Stop Work Order).3 The stop work order met the requirements of
Section 112.1.1: It provided written notice of the action (issuance of a stop work order); and it
stated the address of the property in question, the nature of the violation (failure to obtain a
permit), the specific sections of the Construction Codes at issue, and the process for review,
including the name of the reviewing official (Don Masoero). See D.C. MUN . REGS. tit. 12A
§ 112.1.1 (2008). Although the notice did not state plaintiff’s name, as required, plaintiff’s
allegations that she acted immediately following receipt of the stop work order, see Compl. ¶ 16,
make plain that she was in no way hampered in the appeals process by the failure to include her
name on the notice.
3
In assessing the legal sufficiency of the complaint, the Court may consider the
facts as alleged in the complaint, as well as documents incorporated into the complaint by
reference. See Wagener v. SBC Pension Benefit Plan, 407 F.3d 395, 397 (D.C. Cir. 2005) (noting
that in reviewing district court’s grant of motion to dismiss for failure to state a claim, the court
could refer to “exhibits attached to, and the documents incorporated by reference in, the
complaint.”)
7
Plaintiff then filed a Notice of Appeal of the stop work order with Mr. Masoero,
the first step in the appeals process conceived of by the Construction Codes. See Compl. ¶ 18;
D.C. MUN . REGS. tit. 12A § 112.1 (2008). At that point, Mr. Masoero was obliged to affirm,
modify, or reverse the action within three working days. See D.C. MUN . REGS. tit. 12A § 112.1.2
(2008). Plaintiff alleges that Mr. Masoero’s office called her within three days, but that the
office representative stated that they did not have a record of the stop work order and could not
proceed until they located it. See Compl. ¶ 20. On the fourth working day after plaintiff filed her
Notice of Appeal, Mr. Masoero’s office still had not resolved the matter. See id. ¶ 21. If the
reviewing official does not act upon an appeal within three working days, it “will be deemed
affirmed and the claimant may proceed to request review by the Director.” D.C. MUN . REGS. tit.
12A § 112.1.2 (2008). Plaintiff proceeded to this next step by filing her Notice of Appeal with
Ms. Argo (the Director of DCRA). See Compl. ¶ 21.
The regulations next provide that the Director must act upon the request within
three additional working days, but “[i]f the Director does not act within the three working day
period, or denies the appeal, the claimant may appeal the matter directly to the Board of Appeals
and Review [now the Office of Administrative Hearings].” D.C. MUN . REGS. tit. 12A § 112.1.2
(2008). Ms. Argo did not act on the appeal within the three day window, see Compl. ¶ 22, but
plaintiff did not immediately follow the next step provided for by the regulations and appeal the
matter directly to the Office of Administrative Hearings. See Compl. ¶ 23 (alleging that the next
event was a meeting scheduled with Mr. Masoero’s office). Plaintiff did appeal the Notice of
Infraction that Mr. Masoero issued on April 2, 2008 (which she received on or before the April 8,
2008 meeting with him) to the Office of Administrative Hearings. She had been waiting for the
8
hearing to be scheduled when she filed suit approximately six weeks later. See Compl. ¶¶ 23, 24,
30, Ex. 6 (Notice of Infraction).
The allegations in plaintiff’s complaint show that she received notice of the
infraction and the opportunity to be heard through a multi-level appeals process. She received
notice of the available procedures for appeal, because the Stop Work Order Appeal Form
identifies the provision of the Construction Codes that provides for the appeals process and
summarizes the process for appeal. See Compl., Ex. 4. Plaintiff complains of the initial inaction
by Mr. Masoero and Ms. Argo, but the Construction Codes provide that in the event of inaction,
after three working days an appealing party can bypass the inactive official and proceed to the
next step in the review process. See 3883 Connecticut LLC v. District of Columbia, 336 F.3d at
1074 (concluding that the District’s procedures provided adequate due process in part because
they provided for “post-deprivation review before two District officials and then immediate
appeal to the District Board of Appeals and Review”). The Construction Codes do not provide a
time frame within which the Office of Administrative Hearings must act, but the D.C. Circuit in
3883 Connecticut considered the appeals process in its entirety and concluded that the procedures
were adequate, even though they lacked such a deadline. See id.; see also Eastern Trans-Waste
of Maryland v. District of Columbia, Civil Action No. 05-0032, 2007 U.S. Dist. LEXIS 21790 at
*12 (D.D.C. March 27, 2007) (“[N]owhere did the court of appeals in 3883 Connecticut base its
decision or reasoning on the expeditiousness of the review process.”). The claim for procedural
due process violations will be dismissed.4
4
Plaintiff also complains that Mr. Masoero’s decision in the Notice of Infraction
was incorrect, but this allegation does not state a claim for a procedural due process violation. If
an individual receives adequate notice and the opportunity to be heard in a meaningful manner,
9
C. Substantive Due Process
Plaintiff alleges that defendants violated her substantive due process rights
through issuance of the stop work order, which deprived her of the use and value of a substantial
portion of her home. In order to maintain an action for a substantive due process violation a
plaintiff must allege (1) the existence of a legally cognizable property interest, and (2) egregious
governmental misconduct in depriving plaintiff of that interest. See George Wash. Univ. v.
District of Columbia, 318 F.3d 203, 206-09 (D.C. Cir. 2003).
“[I]n a due process challenge to executive action, the threshold
question is whether the behavior of the governmental officer is so
egregious, so outrageous, that it may fairly be said to shock the
contemporary conscience.” County of Sacramento v. Lewis, 523
U.S. 833, 847 n. 8 (1998). Most likely to rise to that level is
“conduct intended to injure in some way unjustifiable by any
government interest.” Id. at 849.
Feirson v. District of Columbia, 506 F.3d 1063, 1066-67 (D.C. Cir. 2007). Nothing in the
allegations in plaintiff’s complaint amount to this level of violation, and it is established that
“[i]nadvertent errors, honest mistakes, agency confusion, even negligence in the performance of
official duties, do not warrant redress.” Eastern Trans-Waste of Md., Inc. v. District of
Columbia, 2007 U.S. Dist. LEXIS 21790 at *14 (quoting Silverman v. Barry, 845 F.2d 1072,
1080 (D.C. Cir. 1988)).
While Mr. Masoero may have been incorrect in his interpretation of the
Construction Codes, plaintiff has not alleged any motivation on the part of defendants that would
make such an allegation amount to stating a claim for a substantive due process violation. In
her procedural due process rights have not been violated, even though she believes the decision
that results from that opportunity to be heard to be incorrect. See American Towers, Inc. v.
Williams, 146 F. Supp. 2d 27, 33 (D.D.C. 2001).
10
Eastern Trans-Waste, for example, the plaintiff asserted a substantive due process claim against
the District of Columbia for delay in issuing a building permit. Id. at *7. Judge Oberdorfer
granted judgment in favor of the defendants in that case because the plaintiff had not presented
any evidence that the District had deliberately delayed the permitting process in order “to
artificially depress the value of [plaintiff’s] property,” or “to hamper [plaintiff] from competing
with the District in the solid waste business;” rather, the delays were caused by the District’s
concern about the scope and extent of the plaintiff’s planned construction. Id. at *15, 20-21.
Similarly, plaintiff in this case has alleged no motive on the part of any of the defendants that
would make their alleged behavior amount to a substantive due process violation. This claim
also will be dismissed.
D. Violation of District of Columbia Code § 6-1405.01
Defendants seek dismissal of plaintiff’s claim under District of Columbia Code
§ 6-1405.01 on the ground that the statute does not create a private right of action. The relevant
statutory language is as follows:
The Director shall seek to administer all building permits,
certificates of occupancy and other provisions of this chapter, and
all regulations issued hereunder, in a manner that is fair, efficient,
predictable, readily adaptable to new technologies,
consumer-oriented, devoid of unnecessary time delays and other
administrative burdens, cost-effective, and directed at enhancing
the protection of the public health, welfare, safety and quality of
life.
D.C. Code § 6-1405.01(a). Nothing in the statute explicitly creates a private right of action, nor,
based upon the Court’s research, has the statute ever been interpreted to provide for one. While
it is sometimes possible to imply a private right of action when a statute does not expressly
11
provide for it, “in recent decades the Supreme Court has ‘retreated from [its] previous
willingness to imply a cause of action where Congress has not provided one.’” Prunte v.
Universal Music Group, 484 F. Supp. 2d 32, 42 (D.D.C. 2007) (quoting Corr. Serv. Corp. v.
Malesko, 534 U.S. 61, 67 n.3 (2001)); see also National Trust for Historic Preservation v.
Blanck, 938 F. Supp. 908, 914 (D.D.C. 1996) (“[i]n order to establish an implied private right of
action under a federal statute, a plaintiff bears a relatively heavy burden”).
The District of Columbia Court of Appeals uses a three part test to determine
whether District of Columbia statutes create an implied private right of action:
First, is the plaintiff ‘one of the class for whose especial benefit the
statute was enacted’ . . . ? Second, is there any indication of
legislative intent, explicit or implicit, either to create such a remedy
or to deny one? . . . Third, is it consistent with the underlying
purposes of the legislative scheme to imply such a remedy for the
plaintiff?
Coates v. Elzie, 768 A.2d 997, 1001 (D.C. 2001) (quoting In re D.G., 583 A.2d 160, 166 (D.C.
1990)). As to the first factor, plaintiff was a permit holder, and therefore is likely part of the
class for whose benefit the statute was created. Second, as already noted, there is no indication
of any legislative intent to create a private right of action. The statute does not, for example,
provide any sanctions for noncompliance by the Director. Rather, through the language “shall
seek,” the statute creates general standards for the method by which the Director administers
building permits rather than a binding, enforceable duty. These standards are described in broad
language — “fair, efficient, predictable” — which does not lend itself to adjudication by the
courts. See D.C. Code § 6-1405.01(a).
12
Neither does the third factor in the test suggest that the statute provides — or was
intended to provide — for a private right of action. The statute is part of the D.C. Construction
Codes, which
shall be construed to secure their expressed intent, which is to
ensure public safety, health, and welfare by building construction,
through structured strength, energy and water conservation,
accessibility to persons with disabilities, adequate egress facilities,
sanitary equipment, light, ventilation, and fire safety; and, in
general, to secure safety to life and property from all hazards
incident to the design, erection, repair, removal, demolition, or use
and occupancy of buildings, structures, or premises.
D.C. Code § 6-1404. The underlying purpose of the legislative scheme is to ensure that the
construction occur in a manner than promotes the “public safety, health, and welfare,” not to
ensure that individuals involved in construction projects be afforded particular substantive rights.
Id.
The Court will not imply a private right of action where, as here, it is doubtful that
such a remedy was intended to accompany the statute or conceived of as part of the legislative
scheme. See Prunte v. Universal Music Group, 484 F. Supp. 2d at 42 (“The Supreme Court has
‘responded cautiously to suggestions that [implied private rights of action] be extended into new
contexts,’ even when declining to do so means that injuries would go unredressed.”) (quoting
Schweiker v. Chilicky, 487 U.S. 412, 425 (1988)). Because D.C. Code § 6-1405.01 does not
provide plaintiff with a private right of action, plaintiff’s claim under the statute will be
dismissed.
13
III. CONCLUSION
For the foregoing reasons, the Court will grant defendants’ motion to dismiss in
its entirety.5 The case will be dismissed. An Order consistent with this Opinion will be issued
this same day.
/s/________________________
PAUL L. FRIEDMAN
United States District Judge
DATE: March 30, 2009
5
Since the Court is dismissing all claims, it need not reach the arguments that
defendants raise about qualified immunity or whether it should decline to exercise supplemental
jurisdiction over plaintiff’s state law claim.
14
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DHX, INC.,
Petitioner,
v.
No. 05-74592
SURFACE TRANSPORTATION BOARD;
UNITED STATES OF AMERICA, STB No. WCC-105
Respondents, OPINION
MATSON NAVIGATION COMPANY,
INC.; HORIZON LINES,
Respondent-Intervenor.
On Petition for Review of an Order of the
Surface Transportation Board
Argued and Submitted
June 4, 2007—Pasadena, California
Filed August 30, 2007
Before: Sidney R. Thomas, Raymond C. Fisher, and
Ronald M. Gould, Circuit Judges.
Opinion by Judge Gould
10967
10970 DHX, INC. v. STB
COUNSEL
Rick A. Rude (argued and on the brief), Falls Church, Vir-
ginia, and David E.R. Woolley (on the brief), Los Angeles,
California, for petitioner DHX, Inc.
Craig M. Keats, Deputy General Counsel, Surface Transporta-
tion Board, Washington, D.C., (argued and on the brief);
DHX, INC. v. STB 10971
Ellen D. Hanson, General Counsel, Surface Transportation
Board, Jamie P. Rennert, Attorney, Surface Transportation
Board, Thomas O. Barnett, Acting Assistant Attorney Gen-
eral, Department of Justice, Gerald F. Masoudi, Deputy Assis-
tant Attorney General, Department of Justice, John J. Powers,
III, Attorney, Department of Justice and Robert J. Wiggers,
Attorney, Department of Justice, Washington, D.C., (on the
brief) for respondents Surface Transportation Board and
United States of America.
C. Jonathan Benner and Leonard L. Fleisig, Troutman Sand-
ers LLP, Washington, D.C., (argued and on the brief); Chris-
tine J. Sommer, Troutman Sanders LLP, Washington, D.C.,
(on the brief) for intervenor-respondent Horizon Lines, LLC.
Richard A. Allen and Scott M. Zimmerman, Zuckert, Scoutt
& Rasenberger, LLP, Washington, D.C., (on the brief) for
intervenor-respondent Matson Navigation Co., Inc.
OPINION
GOULD, Circuit Judge:
DHX, Inc., a freight forwarder, petitions for review of a
decision by the Surface Transportation Board (“STB”) deny-
ing its complaint challenging the reasonableness of certain
rates and practices of Matson Navigation Co., Inc.
(“Matson”), and Sea-Land Service, Inc., now Horizon Lines,
LLC (“Horizon”), two water carriers operating in the noncon-
tiguous domestic trade between Hawaii and ports in the conti-
nental United States. We have jurisdiction pursuant to 28
U.S.C. §§ 2321 and 2342(5), and we deny the petition for
review.
I. A
The STB is a successor to the Interstate Commerce Com-
mission (“ICC”). In the ICC Termination Act of 1995
10972 DHX, INC. v. STB
(“ICCTA”), Pub. L. No. 104-88, 109 Stat. 803, Congress
abolished the ICC, revised the Interstate Commerce Act, and
transferred regulatory functions under that Act to the STB.
See Redmond-Issaquah R.R. Pres. Ass’n v. STB, 223 F.3d
1057, 1059 n.1 (9th Cir. 2000). In 1976, Congress began par-
tially deregulating the industries that the ICC supervised, with
a view toward promoting competition. See H.R. Rep. No.
104-311, at 90-93 (1995), as reprinted in 1995 U.S.C.C.A.N.
793, 802-05 (“ICCTA House Report”); S. Rep. No. 104-176,
at 2-4 (1995) (“ICCTA Senate Report”). The ICCTA contin-
ued this general deregulatory trend and “significantly
reduce[d] regulation of surface transportation industries in
this country.” ICCTA Senate Report at 2.
Prior to the enactment of the ICCTA, the ICC had regula-
tory authority over water carriers who operated along the
coasts of the continental United States or on inland water-
ways. Water carriers who operated outside of the continental
United States, however, were regulated by the Federal Mari-
time Commission. The Federal Maritime Commission had
regulatory authority over all “port-to-port” operations of carri-
ers serving the “noncontiguous domestic trade” (or the “do-
mestic offshore” trade), i.e. operations between ports in
Alaska, Hawaii, or United States territories or possessions on
the one hand, and other United States ports, including main-
land ports, on the other hand. The ICCTA centralized all regu-
latory authority relating to the noncontiguous domestic trade
with the STB. See 49 U.S.C. § 13521.
In doing so, Congress reenacted some, but not all, of the
pre-ICCTA regulatory provisions regarding the noncontigu-
ous domestic trade. In keeping with its trend toward reducing
unnecessary regulation, Congress removed some of the regu-
latory restraints previously imposed upon water carriers.
Moreover, Congress affirmatively authorized the water carri-
ers to undertake some market-driven activities that motor and
rail carriers had already been allowed to pursue after the
enactment of earlier legislation. Thus, under the ICCTA,
DHX, INC. v. STB 10973
water carriers in the noncontiguous domestic trade remain
subject to three main regulatory requirements: (1) like all
common carriers, they must “provide [ ] transportation or ser-
vice on reasonable request,” see 49 U.S.C. § 14101(a); (2)
they are required to file tariffs, see 49 U.S.C. § 13702(a) and
(b); and (3) they are required to maintain “reasonable” rates
and practices, see 49 U.S.C. § 13701(a).
Despite these regulatory requirements, the ICCTA also
codifies a number of rate freedoms. 49 U.S.C. § 13701(d) is
a safe harbor provision, which specifies that any given rate is
deemed reasonable if it falls within a “zone of reasonable-
ness,” i.e. if it is not more than 7.5% higher or 10% lower
than what the rate was one year earlier. The ICCTA allows
carriers explicitly to offer rates that vary with the volume of
cargo offered over a specified period of time, see 49 U.S.C.
§ 13702(b)(4), and it allows carriers to enter into contracts in
which the parties can waive any or all of the rights or reme-
dies available under the Interstate Commerce Act, see 49
U.S.C. § 14101(b). Most importantly, with regard to DHX’s
petition for review, Congress repealed the statutory provisions
that had prohibited unreasonable discrimination in the non-
contiguous domestic water carrier trade when it enacted the
ICCTA. See 46 U.S.C. app. § 815 (repealed 1995).
I. B
While some shipments via water carrier are arranged
between the carrier and the shipper directly, others are han-
dled through a third-party intermediary such as a freight for-
warder. DHX is a freight forwarder, an entity that holds itself
out to the general public to provide transportation of property
for compensation, usually by assembling and consolidating
shipments to take advantage of volume rates offered by the
carrier actually hauling the goods. See 49 U.S.C. § 13102(8).
A freight forwarder “maintains the dual status of both carrier
(vis-à-vis its shippers) and shipper (vis-à-vis the underlying
carrier that it uses).” Exem. of Freight Forwarders From Tar-
10974 DHX, INC. v. STB
iff Filing Requir., 2 S.T.B. 48, 50 (1997). Therefore, DHX is
both a user and a competitor of water carriers such as Matson
and Horizon to which it tenders traffic.
In the water trade, freight forwarders aggregate smaller
shipments at the point of origin, buy space on a vessel, and
then provide distribution services at the destination. Freight
forwarders earn a profit when the rates they charge to individ-
ual shippers are lower than the water carrier’s rates for small
shipments, but higher than the water carrier’s rates for the
consolidated containerloads that the forwarders assemble. See
Chi., Milwaukee, St. Paul & Pac. R.R. v. Acme Fast Freight,
Inc., 336 U.S. 465, 467 (1949); N. Y. Foreign Freight For-
warders & Brokers Ass’n v. ICC, 589 F.2d 696, 699-700
(D.C. Cir. 1979). The use of a freight forwarder can benefit
the shipper by allowing it to pay rates lower than it could
obtain on its own for shipments in small lots, while also bene-
fitting the carrier, who is then free to focus its business on the
high-volume containerload traffic that is most efficient for it
to handle while the freight forwarder consolidates smaller
shipments.
The dispute underlying this appeal is between freight for-
warder DHX and the two major water carriers currently serv-
ing the Hawaiian water trade market, Matson and Horizon.
The noncontiguous domestic trade between Hawaii and the
mainland is experiencing a relatively low volume of traffic,
resulting in excess capacity, which in turn, has exerted down-
ward pressure on rates. See generally U.S. Dep’t of Transp.,
A Report to Congress: Competition in the Noncontiguous
Domestic Maritime Trades, at III-8-14 (1997) (“DOT Report”).1
This downward pressure led to rates in 1995 that were sub-
1
Although the fact that there are only two major water carriers currently
operating in the Hawaiian market reflects “some concentration in trade,”
the United States Department of Transportation’s 1997 Report explains
that there has been entry into and exit from the Hawaiian water carrier
market over the years. DOT Report at III-8-14.
DHX, INC. v. STB 10975
stantially below the inflation-adjusted rate levels in 1985. See
id. To address these market constraints and to maximize prof-
itable traffic, Matson and Horizon tailored their rates to attract
profitable traffic away from freight forwarders as well as to
draw traffic away from each other. To attract and keep larger
shippers like Home Depot that can provide a steady flow of
full containerload (“FCL”) traffic, the water carriers began
offering volume rates with “overflow provisions.”
Overflow occurs when a particular shipper’s traffic for a
given shipment does not completely fill all the containers
used for that shipment. For example, Home Depot’s traffic for
a particular shipment might fill more than one full container,
but less than two. When such overflow occurs, the water car-
riers charge Home Depot a rate on the second, partially-filled
container that is lower than the rate that would apply to a
partially-filled container that is not part of a larger shipment
by using their overflow provisions. According to the carriers,
the purpose of overflow provisions is “to accommodate the
needs of those regular, high-volume shippers,” who are the
water carriers’ best customers.
As the STB explained in its June 2005 decision, once DHX
recognized that lower rates were being charged for partially
filled containers that were part of a larger shipment under
Matson and Horizon’s overflow provisions, DHX “began to
go beyond the traditional role of a freight forwarder . . . and
to instead target the water carriers’ larger customers that
already tendered volume traffic to the carriers [directly].”
Specifically, DHX would take the same containerload traffic
of large shippers such as Home Depot, unpack the full con-
tainers, redistribute their contents, and repack them in order
to create more overflow containers than the shippers them-
selves would have tendered had they dealt directly with the
water carriers, thereby resulting in a larger number of contain-
ers subject to the lesser overflow rates. According to Matson,
at one point upwards of 98% of its revenues for overflow traf-
fic was coming from freight forwarders rather than from the
10976 DHX, INC. v. STB
regular direct shippers that the overflow provisions were
designed to accommodate. As the STB explained in its
December 2004 decision:
When defendants [Matson and Horizon] realized
they were losing some of the profits from their FCL
traffic to competitors such as DHX . . . they began
taking specific actions designed to induce their FCL
shippers to begin dealing directly with them again.
Such actions included adopting tariffs setting up
more favorable rates with specific limitations such as
shipper name, street address, and zip code; and
entering into agreements—typically with large ship-
pers that own the merchandise and have their own
logistics departments that manage the transportation
and control the routing of their cargo—providing
particular rates for specified periods of time.
Despite these actions, Horizon and Matson still continued to
offer substantial discounted rates to DHX and other freight
forwarders in order to attract traffic away from each other.
I. C
DHX filed a complaint with the STB in October 1999
against Matson and Horizon challenging the reasonableness
of their rates and practices. The complaint largely focused on
the increases Matson and Horizon had made to their overflow
rates, arguing that the increases should be declared unreason-
able because they exceeded the safe-harbor zone of reason-
ableness contained in 49 U.S.C. § 13701(d)(1). Matson and
Horizon promptly filed motions to dismiss. On December 21,
2001, the Board issued a decision denying the motions to dis-
miss, but agreeing with the defendants that there were “sub-
stantial shortcomings in DHX’s complaint.” The decision
further stated that DHX would “have to flesh out the specific
rates for specific shipments that it asserts are unreasonable,
DHX, INC. v. STB 10977
and it will have to support with particularity its general claim
that the carriers’ practices are unlawful.”
DHX filed an amended complaint on April 29, 2002, which
in essence argued that any rate charged to DHX was unrea-
sonable if it exceeded the rate charged to another customer.
DHX also alleged that Matson and Horizon’s tariffs did not
comport with statutory and regulatory requirements. In addi-
tion to seeking more than $19 million in damages, DHX
requested an order requiring the defendants to stop commit-
ting these allegedly unreasonable practices and to more
openly embrace DHX’s competition. All parties filed lengthy
submissions before the STB with regard to DHX’s conten-
tions. On May 14, 2003, the STB issued a decision granting
Horizon’s motion for partial dismissal of the amended com-
plaint. The STB rejected DHX’s claim that any rate charged
to DHX was per se unreasonable if it was higher than the rate
charged to another customer. The Board explained:
DHX’s approach appears to be no more than a
broad-ranging allegation that all of defendants’ rates
are discriminatory. But the discrimination remedy
was repealed as to this trade in ICCTA. Thus, DHX
cannot possibly prevail in its argument that the
assailed rates are unreasonable even if it did show
that different shippers pay different rates for argu-
ably similar services.
While DHX’s complaint was pending before the STB,
DHX filed a civil complaint against Horizon in federal district
court in August 2002, asserting a claim for rate discrimina-
tion. In January 2003, the district court dismissed DHX’s
complaint for failure to state a claim, holding that there is no
“common law cause of action for rate discrimination against
an ocean carrier.” The district court further concluded that
because the STB has primary jurisdiction to determine the
lawfulness of a water carrier’s conduct, particularly with
regard to the reasonableness of its rates and practices, the only
10978 DHX, INC. v. STB
relief available to DHX was whatever relief might be avail-
able under the Interstate Commerce Act as determined by the
STB.
On December 15, 2004, the STB issued a decision denying
the remaining claims against Matson and Horizon raised in
DHX’s amended complaint. Despite the “lengthy” nature of
the amended complaint “with diffuse allegations ranging from
discrimination and improper tariff format to deceit and fraud,”
the Board explained that the “principal substantive issue that
remains to be resolved in this case is whether the actions that
defendants took to recapture traffic and profits that they had
lost to DHX constitute unreasonable practices.” The STB con-
cluded that DHX had not demonstrated that the water carriers
had engaged in unreasonable practices in violation of 49
U.S.C. § 13701(a)(1). Instead, the Board concluded that:
[I]t is not an unreasonable practice for a carrier to act
in a manner, as here, designed to protect its profits
and its market share from diversion to its competi-
tors, and the Board will not interfere with actions
that have not been shown to be anything more than
prudent responses to competitive threats.
In reaching its decision, the STB noted that the Matson and
Horizon had given DHX favorable treatment where it made
business sense to do so; that DHX “is itself the beneficiary of
many of the tariff provisions about which it complains”; and
“that DHX’s business [in the Hawaiian trade] has grown since
the original complaint was filed.” In addition, the STB stated
that the anti-discrimination provisions of the Interstate Com-
merce Act had been repealed for water carriers by the ICCTA,
and rejected DHX’s argument that a discrimination claim
could instead be based upon the general statement of transpor-
tation policy contained in 49 U.S.C. § 13101.
In a motion for reconsideration, DHX argued that either the
STB had erred in finding that there was no remedy under the
DHX, INC. v. STB 10979
Interstate Commerce Act for discriminatory pricing, or that
there had to be a remedy under common law for such a claim.
On June 13, 2005, the Board issued a decision denying
DHX’s petition, stating that there was no inconsistency
between its decision and the district court’s ruling concluding
there was no remedy under common law. The Board also
found no merit to DHX’s other claims of error, including its
assertions that certain of the water carriers’ tariffs were defi-
cient. This timely petition for review followed.
II
We review decisions by the STB under the Administrative
Procedure Act, 5 U.S.C. § 706(2). The agency’s decision
should be affirmed unless it is “arbitrary, capricious, an abuse
of discretion,” “otherwise not in accordance with law,” or
“unsupported by substantial evidence.” 5 U.S.C.
§§ 706(2)(A), (E). “Th[is] standard is a narrow one, and the
reviewing court may not substitute its judgment for that of the
agency.” Public Util. Dist. No. 1 v. FEMA, 371 F.3d 701, 706
(9th Cir. 2004) (citing Envtl. Def. Ctr., Inc. v. EPA, 344 F.3d
832, 858 n.36 (9th Cir. 2003)); see also In re Transcon Lines,
89 F.3d 559, 563-64 (9th Cir. 1996).
Where there is a challenge to the agency’s interpretation of
the statute that it administers, we apply the analytical frame-
work set forth in Chevron, U.S.A., Inc. v. Natural Resources
Defense Counsel, Inc., 467 U.S. 837, 842-45 (1984). See
Redmond-Issaquah R.R. Pres. Ass’n, 223 F.3d at 1061. “If the
intent of Congress is clear . . . [we] must give effect to the
unambiguously expressed intent of Congress.” Chevron, 467
U.S. at 842-43. If however, the meaning of the statute is
ambiguous, “the question for the court is whether the agen-
cy’s answer is based on a permissible construction of the stat-
ute.” Id. at 843. “[T]he court does not simply impose its own
construction on the statute. . . .” Id.
10980 DHX, INC. v. STB
III
[1] The core of DHX’s claims is that Matson and Horizon
unlawfully discriminated by not giving DHX identical rates to
those offered to direct FCL shippers such as Home Deport or
Sears. Contrary to DHX’s assertion, we conclude that Con-
gress did not intend to retain a private cause of action against
water carriers for discrimination when it enacted the ICCTA.
Prior to the ICCTA, joint rail/water and motor/water rates for
the noncontiguous domestic trade were subject to the rail and
motor anti-discrimination provisions in former 49 U.S.C.
§ 10741 (repealed 1995). Port-to-port rates were governed by
the anti-discrimination provisions of the Shipping Act of
1916, codified at former 46 U.S.C. app. § 815 (repealed
1995). When Congress enacted the ICCTA in 1995, it explic-
itly repealed the relevant Shipping Act provisions. See Pub. L.
No. 104-88, § 335(b)(4), 109 Stat. 953-54 (repealing former
46 U.S.C. app. § 815). Moreover, while Congress specifically
retained an anti-discrimination provision for rail carriers in 49
U.S.C. § 10741, it did not retain or add comparable provisions
for either water carriers or motor carriers. See ICCTA House
Report at 128, as reprinted in 1995 U.S.C.C.A.N. at 839-40
(containing a chart with the “disposition of existing provi-
sions” which shows the retention of the anti-discrimination
provision for rail carriers in 49 U.S.C. subtitle IV, part A, but
not retaining the comparable anti-discrimination provisions
for motor or water carriers in 49 U.S.C. subtitle IV, part B).
[2] Despite this legislative history, DHX contends that an
express statutory prohibition is not necessary to support its
discrimination claims. While a cause of action may be
inferred in some situations when a statute is silent, we decline
to infer one here where there was a prior explicit provision
that Congress knowingly removed. See Fox v. Citicorp Credit
Servs., Inc., 15 F.3d 1507, 1512-13 (9th Cir. 1994) (refusing
to assume that Congress acted contrary to its intentions when
it repealed a statutory provision and enacted no substitute);
see also Union Pac. R.R. Co. v. ICC, 867 F.2d 646, 649 (D.C.
DHX, INC. v. STB 10981
Cir. 1989) (holding that the agency could not use its authority
to address an unreasonable railroad practice in order to sub-
vert the statutory restriction against the agency examining the
reasonableness of a rail rate where the railroad does not have
“market dominance” over the transportation at issue).
[3] To support its position, DHX, in part, relies on language
in the ICCTA House Report stating that carriers would be
required to file tariffs in order to “ensure that similarly situ-
ated shippers are treated the same by carriers based on the
type and volume of cargo.” ICCTA House Report at 113.
However, this language cannot support such a claim since
Congress’s clear intent in ICCTA, as well as prior legislation,2
was to move away from a regime of strict rate equalization.
See id. Indeed, on the same page of the House Report, Con-
gress discusses its desire to ensure that “price watching” not
result in other carriers “follow[ing] the rates of the highest
priced carrier,” i.e., resulting in higher rates than would other-
wise be charged so that no shipper gets the benefit of dis-
counted rates. See id. Regardless, DHX cannot rely on general
report language to create a cause of action that is not provided
for in the ICCTA. See Fox, 15 F.3d at 1512-13 (“[I]solated
statements” within legislative history “cannot reintroduce
what the Congress has eliminated.”); United States v. Rone,
598 F.2d 564, 569 (9th Cir. 1979) (“The proper function of
legislative history is to solve, and not create, an ambiguity.”).
Moreover, even if we were to view ICCTA as ambiguous, the
2
See, e.g., Staggers Rail Act of 1980, Pub. L. No. 96-448, § 2, 94 Stat.
1895-96. Congress made it clear that the rail anti-discrimination provision
in the Staggers Act was not to be used to preserve a regulatory regime of
strict rate equalization. See H.R. Rep. No. 96-1430, at 104 (1980) (Conf.
Rep.), as reprinted in 1980 U.S.C.C.A.N. 4110, 4136 (“[C]laims of unjust
discrimination may not be used to hamper the development of sound eco-
nomic rate and service relationships.”); see also H.R. Rep. No. 96-1035,
at 59-60 (1980), as reprinted in 1980 U.S.C.C.A.N. 3978, 4004-05 (stating
that the anti-discrimination provision “is intended to recognize any differ-
ences that would normally be recognized in unregulated service industries
as constituting a basis for price differences” that are not anticompetitive.).
10982 DHX, INC. v. STB
STB’s conclusion that Congress repealed the prohibition
against discrimination by water carriers is entitled to defer-
ence under Chevron. Such a conclusion is also buttressed by
the Department of Transportation’s own interpretation of the
ICCTA. DOT Report at II-12 (stating that ICCTA “did not
specifically prohibit discriminatory rates [by water carriers],
as had the previous statute”).3
[4] Nor is there any other basis, statutory or otherwise, on
which to sustain DHX’s claim of alleged discrimination. As
it did before the STB, DHX argues that it may bring an action
against Matson and Horizon for discriminatory rates and prac-
tices based on the general policy objectives set forth in 49
U.S.C. § 13101. Specifically, DHX cites to the language in
subsection (a)(1)(D) which speaks of “reasonable rates . . .
without unreasonable discrimination” and language in subsec-
tion (a)(4) that encourages “service and price competition in
the noncontiguous domestic trade.”4 As the STB stated at the
outset of its December 2004 analysis, the Transportation Pol-
icy articulated at 49 U.S.C. § 13101(a) “simply sets forth a
variety of (sometimes conflicting) policy objectives for the
agency to consider in regulating the industry.” See, e.g., Balt.
Gas & Elec. Co. v. United States, 817 F.2d 108, 112, 115
(D.C. Cir. 1987) (addressing various rail transportation poli-
cies); Global Van Lines, Inc. v. ICC, 714 F.2d 1290, 1295-96
(5th Cir. 1983) (stating that the Transportation Policy is for
general guidance and is not an independent source of rule-
making power in motor carrier cases); accord Central For-
warding, Inc. v. ICC, 698 F.2d 1266, 1283-84 (5th Cir. 1983).
The STB correctly concluded that “a claim under the general
3
We do not address DHX’s argument for a discrimination-based cause
of action on the basis of pre-ICCTA case law because Congress’s repeal
of the prohibition of discrimination by water carriers renders those prece-
dents inconsistent with the current statutory provisions.
4
While subsection (a)(4) was added in the ICCTA and is addressed spe-
cifically to water carriers, subsection (a)(1)(D) is not specific to water car-
riers, and was carried over from the Transportation Act of 1940, Pub. L.
No. 76-785, 54 Stat. 898-99.
DHX, INC. v. STB 10983
Transportation Policy alone does not provide a right of action.”5
See also Trailer Bridge, Inc. v. Sea Star Lines, LLC, STB
Docket No. WCC-104, slip op. at 3 (STB served Dec. 10,
1999).
[5] DHX’s suggestion that 49 U.S.C. § 14101(a), which
sets forth the common carrier obligation, supports a cause of
action for discrimination is similarly unavailing. Section
14101(a) simply directs all common carriers to handle the
traffic that is tendered to them. See Decatur County Comm’rs
v. STB, 308 F.3d 710, 715 (7th Cir. 2002) (“The statutory
common carrier obligation imposes a duty upon [carriers] to
‘provide transportation . . . on reasonable request.’ ”). It does
not say that they must charge every shipper the exact same
rates. Indeed, providing different customers with different
rates and services is not inconsistent with a water carrier’s
common carrier duty to provide service to each customer
upon reasonable request, if the rates charged are reasonable.
See, e.g., Am. Trucking Ass’ns, Inc. v. Atchison, Topeka &
Santa Fe Ry., 387 U.S. 397, 406 (1967) (discussing common
carrier obligations and stating “[r]ates were required to be rea-
sonable, but discrimination in the form of unequal rates as
among shippers was not forbidden” at common law).
[6] The STB’s May 14, 2003, holding that “DHX cannot
possibly prevail in its argument that the assailed rates are
unreasonable even if it did show that different shippers pay
different rates for arguably similar services” because “the dis-
crimination remedy was repealed as to this trade in the
5
Moreover, as respondents point out, the language in section 13101 does
not necessarily support DHX’s argument. “Service and price competition
in the noncontiguous domestic trade,” for example, is entirely compatible
with — and indeed may require — a degree of price discrimination.
§ 1301(a)(4). Similarly, some of the policies articulated in subsection
(a)(1) — such as “sound economic conditions among carriers” and “fair
wages . . . in the transportation industry” — suggest that Horizon and Mat-
son should be allowed to take all reasonable measures to maximize their
profits.
10984 DHX, INC. v. STB
ICCTA” is not arbitrary, capricious, or an abuse of its discre-
tion. Rather, it is supported by substantial evidence and is in
accordance with law as expressed in ICCTA and congressio-
nal intent.
IV
[7] Congress’s removal of any anti-discrimination provi-
sions applicable to the water trade through its enactment of
the ICCTA does not, however, mean that the STB is without
authority to review for antitrust considerations as part of its
statutory responsibilities. To the contrary, if the STB believed
that the oligopolist shippers’ pricing was aimed at eliminating
competition in a manner harmful to consumers, the STB is
empowered to step in and regulate any such anticompetitive
behavior as part of its statutory responsibilities. See generally
Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 US.
585 (1985) (recognizing that under certain circumstances a
refusal to cooperate with rivals can constitute anticompetitive
conduct, thereby violating section 2 of the Sherman Act); see
also MetroNet Servs. Corp. v. Qwest Corp., 383 F.3d 1124,
1132 (9th Cir. 2004) (“An offer to deal with a competitor only
on unreasonable terms and conditions can amount to a practi-
cal refusal to deal.”).
[8] Here however, the conduct DHX complains of does not
appear to have been prompted by “anticompetitive malice,”
but rather “competitive zeal.” See Verizon Commc’ns Inc. v.
Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 409
(2004). Indeed, Matson and Horizon have not engaged in
price discrimination because the rates they charge freight for-
warders like DHX do not result in pricing which is “at an
unprofitable level in the short run merely to exclude competi-
tion in the long run.” MetroNet, 383 F.3d at 1133. We do not,
however, address this issue further because DHX did not raise
any specific antitrust claims below. Instead, we simply note
that the STB possesses ample statutory authority to address
and remedy any oligopolist pricing concerns arising out of the
DHX, INC. v. STB 10985
water carriers’ conduct under traditional antitrust principles.
Cf. 49 U.S.C. §§ 10706(a)(2)(A), 11321(a), 11324; James F.
Rill, The Evolution of Modern Antitrust Among Federal Agen-
cies, 11 Geo. Mason L. Rev. 135, 142 (2002) (noting that the
STB, while not one of the “primary federal antitrust review
agencies,” “ha[s] jurisdiction over [a] particular sector[ ]”).
V
[9] It was also not arbitrary, capricious, an abuse of discre-
tion or contrary to law for the STB to conclude that DHX had
not shown that it was subjected to unreasonable rates or prac-
tices. DHX has mistakenly equated discriminatory pricing
with unreasonableness. Rates can be discriminatory without
being unreasonable, or unreasonable without being discrimi-
natory. Reasonableness denotes a range, rather than a single
fixed point. See Montana-Dakota Utils. Co. v. Nw. Pub. Serv.
Co., 341 U.S. 246, 251 (1951); accord FPC v. Conway Corp.,
426 U.S. 271, 278 (1976) (addressing price squeeze and find-
ing that a reasonable rate can be discriminatory); ICC v.
Inland Waterways Corp., 319 U.S. 671, 685 (1943). As
respondents argue, “DHX’s theory would turn all rate dis-
crimination automatically into unreasonable rates, and upset
the longstanding distinctions.” See, e.g., Davis v. Portland
Seed Co., 264 U.S. 403, 424-25 (1924) (holding that a shipper
claiming discrimination was not entitled to reparations based
on the difference between the rate it was charged and the
lower rate given to someone else, unless it could show conse-
quential damages, i.e., lost sales); see also Pennsylvania R.R.
v. Int’l Coal Mining Co., 230 U.S. 184, 199-201 (1913).
DHX contends that the rates it was charged by Horizon and
Matson were unreasonable and that it is entitled to damages
whenever the rates it was charged were higher than the rates
paid by another shipper. DHX claims that such a calculation
constitutes “the traditional method of determining rate reason-
ableness and calculation of damages,” and that because the
STB has not replaced this traditional method with any other
10986 DHX, INC. v. STB
rate reasonableness standards, this method along with the per-
tinent case law continues to apply. These rate reasonableness
standards, however, are from the 1930s, prior to Congress’s
significant shift toward deregulation. See, e.g., United States
v. N. Pac. Ry. Co., 288 U.S. 490, 500 (1933) (stating that rate
comparisons can be used as one test of rate reasonableness,
but cautioning that such a test should not be controlling). As
respondents persuasively argue and the history of deregula-
tion since then demonstrates, the notion that Congress has
retained an outdated, 1930s approach to rate regulation — an
approach it has labeled as “Kafkaesque,” see ICCTA House
Report at 91 — is without merit, as is the idea that the agency
has not modernized its rate criteria since the 1930s.
[10] The bulk of the case law relied upon by DHX pertains
to railroad rates from decades earlier. Since those decisions,
the ICC and now the STB have developed a Constrained Mar-
ket Pricing (“CMP”) approach for assessing whether rail rates
are reasonable. See Coal Rate Guidelines, Nationwide, 1
I.C.C. 2d 520 (1985). Under CMP, the agency’s goal is to
determine how much a carrier would need to charge the
aggrieved shipper for its service after removing any costs
associated with inefficiencies and removing cross-subsidies
between different shippers. Under either of the approaches
used under CMP to make this determination, the STB does
not compare the challenged rate to rates charged to other ship-
pers, because railroads are expected to engage in “differential
pricing” by charging different rates to different shippers. See
Coal Rate Guidelines, 1 I.C.C.2d at 526-27.6 The Federal
Maritime Commission has used a public utility-type approach
in rate cases that assesses the carriers’ total revenues to deter-
6
The STB has also devised “Simplified Guidelines” that it uses in rail
rate cases for which the CMP approach is not practicable. See Rate Guide-
lines — Non-Coal Proceedings, 1 S.T.B. 1004, 1020 (1996). Under these
simplified guidelines, the STB does not directly look at the rates charged
to other shippers, but instead looks at rate markups over costs as well as
the carrier’s overall revenue needs in order to determine reasonableness.
This method also differs from the approach advocated by DHX.
DHX, INC. v. STB 10987
mine whether the carrier is earning enough overall. See Gov’t
of the Territory of Guam v. Sea-Land Serv., Inc., STB Docket
No. WCC-101, at 2 (STB served Nov. 15, 2001), 2001 WL
1436500 (S.T.B.).
When Congress transferred regulation of water carriers
engaged in the noncontiguous domestic trade to the STB with
the 1995 enactment of the ICCTA, it did not specify whether
the STB should apply the CMP approach to water carriers,
follow the approach that had been used by the Federal Mari-
time Commission, or adopt some other approach for assessing
the reasonableness of water carrier rates. The STB has
advised us that it is currently examining the issue of which
rate reasonableness analysis to employ with respect to water
carriers in the ongoing proceedings in Gov’t of the Territory
of Guam v. Sea-Land Serv., Inc., but neither of those parties
has, like DHX, “suggested that Congress intended for the
Board to revive outdated policies from the 1930s that Con-
gress has itself criticized.”
[11] To buttress its argument, DHX points to the ICC’s use
of a rate comparison approach to assess maximum rate rea-
sonableness in motor carrier cases as late as the 1990s. The
STB, in its May 2003 decision explained why these cases and
the market cluster analysis they used were not applicable to
the noncontiguous domestic water trade:
DHX states . . . [in its] amended complaint . . . that
it intends to pursue its unreasonable rate claims
based on the type of market cluster analysis set forth
in Georgia-Pacific [Georgia-Pac. Corp.—Petition
for Declaratory Order—Certain Rates & Practices
of Oneida Motor Freight, Inc., 9 I.C.C. 2d 103
(1992)]. However, the Georgia-Pacific standard was
developed solely to determine the reasonableness of
motor carrier rates for past shipments by defunct car-
riers by looking at the rates of several other carriers
in the market. Here, DHX wants to compare rates
10988 DHX, INC. v. STB
that one shipper pays to a carrier with those paid by
another shipper to the same carrier. Thus, even if
Georgia-Pacific were applicable in the noncontigu-
ous domestic trade, DHX’s approach appears to be
no more than a broad-ranging allegation that all of
defendants’ rates are discriminatory. But the dis-
crimination remedy was repealed as to this trade in
ICCTA. Thus, DHX cannot possibly prevail in its
argument that the assailed rates are unreasonable
even if it did show that different shippers pay differ-
ent rates for arguably similar services.
Moreover, as the STB explained, “in the Georgia-Pacific pro-
ceeding, the Caribbean Shippers Association, Inc. (CSA),
expressed concern that the cluster approach should not be
used to determine the reasonableness of joint motor-water
rates filed by steamship lines in the domestic offshore trade
because the water portion of this trade is not highly competi-
tive.” In response to the CSA’s concerns the ICC stated that
“the market-rate comparison approach was not an all-purpose
measure of rate reasonableness and clearly was not intended
for use in a market that is not effectively competitive.” See
Georgia-Pacific, 9 I.C.C. 2d at 806, 828. DHX’s argument
that the Georgia-Pacific market cluster analysis should be
used to determine rate reasonableness in this case is incorrect
under current case law.
[12] DHX also contends that Matson and Horizon commit-
ted unreasonable practices by (1) targeting discounts to partic-
ular shippers, (2) following each other’s actions, and (3)
publishing incomplete or improper tariffs. The STB however,
properly concluded that DHX’s remaining unreasonable prac-
tice claims lacked merit, because it held that the actions taken
by Matson and Horizon were reasonable and prudent business
practices in dealing with a freight forwarder that is both a cus-
tomer and a competitor. As the STB stated in its December
2004 decision, “it is not a unreasonable practice for a carrier
to act in a manner, as here, designed to protect its profits and
DHX, INC. v. STB 10989
its market share from diversion to its competitors, and the
Board will not interfere with actions that have not been shown
to be anything more than prudent responses to competitive
threats.”
[13] DHX contends that it was unreasonable for Matson
and Horizon to restrict certain discounts to their direct ship-
pers by offering targeted discount rates. But that conclusion
is not compelled by the record. DHX is itself a beneficiary of
certain targeted discount rates from both water carriers
because each one is attempting to capture traffic and lure
away freight forwarder business from the other through such
discounted rates. Moreover, adopting DHX’s position would
be inconsistent with the history and purposes behind the
enactment of the ICCTA and the trend toward deregulation
which it represents. To preclude price discrimination on ship-
ping rates might deter shippers from reducing rates in
attempts to get new customers or to keep old ones, and such
a ban on discriminatory rates would be harmful to competi-
tion and contrary to the interests of consumers. To assess such
impacts requires a discriminating judgment on the industry’s
practices and economics. Congress has entrusted that respon-
sibility to the STB in the first instance, and our review of the
responsible agency’s action is necessarily limited to assessing
whether the agency has acted in a manner that is arbitrary,
capricious, an abuse of discretion, not supported by substan-
tial evidence, or contrary to law.
Moreover, as the STB explained in its December 2004
decision, even “when motor carriers were more heavily regu-
lated the ICC explicitly rejected claims that trucking tariffs
containing rates applicable only to named shippers and receiv-
ers or to specific addresses [i.e. the same type of rates DHX
complains of] were unlawfully discriminatory.” If such carrier
practices were explicitly found to be lawful during the period
of heavier regulation proceeding the enactment of ICCTA, we
need not conclude that such practices are unlawful in the cur-
rent, less restrictive regulatory climate.
10990 DHX, INC. v. STB
[14] DHX next contends that Horizon and Matson engaged
in improper, anticompetitive behavior by watching and mir-
roring each other’s actions. All businesses, however, monitor
their competitors’ pricing to see whether and how they should
match or beat the discounts they are offering. Moreover, price
watching is inherent in a tariff system that statutorily requires
carriers to publish their common carrier rates. DHX itself
monitors Matson and Horizon’s tariffs to compete with them
and manipulate the water carriers’ tariffs to its own advan-
tage. As DHX acknowledges, the water carriers have used
such competitive information to reduce their rates in order to
match or undercut each other’s prices. Under such circum-
stances DHX has made no showing of anticompetitive con-
duct.
[15] Finally, DHX argues “that even if the discounted rates
to large-volume direct shippers were not otherwise unlawful,
the manner in which they were reflected in the water carriers’
tariffs made them improper” by containing discounted rates
that are limited to a certain shipper location or zip code, for
example. However, in Rates For a Named Shipper or
Receiver, 367 I.C.C. 959 (1984), the STB’s predecessor
allowed motor carriers to express rates in that precise manner
in their tariffs. This policy was cited by Congress with
approval in the ICCTA House Report. See ICCTA House
Report at 91-92, as reprinted in 1995 U.S.C.C.A.N. at 803-04
(“The Motor Carrier Act encouraged a more competitive envi-
ronment and led the ICC to change tariff filing regulations to
permit tariff rate reductions and to allow carriers to establish
rates for named shippers.”). We reject DHX’s other argu-
ments regarding the water carriers’ tariffs, concluding that
they were properly rejected by the STB.
We also reject DHX’s suggestion that an additional hearing
is needed before the STB to address all of its claims. The
record, developed over the course of five years, contains
extensive written evidence and argument submitted by both
parties, as demonstrated by the 2700-page, 9-volume excerpts
DHX, INC. v. STB 10991
of record. We have previously held that the STB’s standard
procedures provide due process, see Lodi Truck Serv., Inc. v.
United States, 706 F.2d 898, 901 & n.5 (9th Cir. 1983), and
DHX has not shown that the STB failed to provide due pro-
cess here. See also Amador Stage Lines, Inc. v. United States,
685 F.2d 333, 335 (9th Cir. 1982).
VI
[16] For the above reasons this challenge to the STB’s deci-
sions on rates of water carriers is not within the narrow cate-
gory of cases in which we are empowered to override the
agency’s knowledgeable exercise of its authority over the rea-
sonableness of rates and related practices in a regulated indus-
try. We hold that the STB’s decisions denying DHX’s
complaint challenging the reasonableness of certain rates and
practices of Matson and Horizon were not arbitrary, capri-
cious, an abuse of discretion, or unsupported by substantial
evidence. We also conclude that the STB’s decisions are in
accordance with law.
PETITION FOR REVIEW DENIED.
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COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-15-00267-CV
LUREA HORNBUCKLE APPELLANT
V.
FRANK KENT CADILLAC OWNER APPELLEES
WILLIAM P. CHURCHILL
PRESIDENT CEO
------------
FROM COUNTY COURT AT LAW NO. 3 OF TARRANT COUNTY
TRIAL COURT NO. 2015-002539-3
----------
MEMORANDUM OPINION1
----------
Appellant Lurea Hornbuckle, proceeding pro se, perfected this appeal from
the trial court’s summary judgment in favor of Appellees Frank Kent Cadillac
L.L.C. and William P. Churchill. Hornbuckle initially filed suit against Appellees in
justice court, seeking $10,000 for “loss of free car potential.” After the justice
1
See Tex. R. App. P. 47.4.
court granted summary judgment for Appellees, Hornbuckle sought de novo
review before the county court at law.
In the county court at law, Appellees moved for a traditional summary
judgment on the ground that Hornbuckle had failed to allege any viable cause of
action and had also failed to allege facts sufficient to satisfy the elements of any
viable cause of action:
Plaintiff’s Petition makes no substantive legal claims against
Defendants, but instead nonsensically and incoherently rambles on
various subjects. Plaintiff’s only connection to Defendants is an
attempted vehicle test-drive. Plaintiff paid Defendants no money.
Plaintiff bought nothing from Defendants. There is no purchase
agreement between Plaintiff and Defendants. Plaintiff’s claims are
pure fiction.
In support of their motion for summary judgment, Appellees attached summary-
judgment evidence establishing that on July 3, 2014, Hornbuckle had visited
Frank Kent Cadillac, had expressed an interest in purchasing a new vehicle and
had requested that she be allowed to test-drive the vehicle for several days, had
completed Frank Kent’s standard Vehicle Loan Form to facilitate the extended
test-drive and that––after credit checks––Frank Kent had elected not to provide
the vehicle to Hornbuckle for an extended test-drive. Hornbuckle left the
dealership without making a purchase. Hornbuckle failed to file a response to
Appellees’ motion for summary judgment.
2
In her second amended brief,2 Hornbuckle purports to raise seven issues;3
however, none of her issues set forth grounds challenging the summary
judgment granted by the trial court.4 Instead, her brief makes general allegations
expressing her dissatisfaction with Appellees. For example, under her breach-of-
contract issue, Hornbuckle’s brief alleges that Appellees have “the responsibility
to honor all materials given to consumer.” Under her violation of right-to-privacy
issue, Hornbuckle seems to complain because Appellees performed a credit
check before making a decision on whether to authorize her request for an
extended test-drive. Under her third issue, Hornbuckle fails to present a
coherent sentence from which we can discern her complaint. Under her fourth
2
The clerk of our court sent letters to Hornbuckle after she tendered her
initial brief and her first amended brief for filing with this court notifying her of the
deficiencies in her brief and requesting that she file an amended brief.
Hornbuckle’s stated issues are as follows: (1) breach of contract
3
agreement; (2) violation of right to privacy; (3) Appellee motion for summary
judgment; (4) libel & slander, defamation; (5) affirmative defenses; (6) affidavit of
Preston R. Mundt; (7) potentials for success.
4
Hornbuckle’s brief is, for the most part, incoherent; our interpretation of
her contentions is extremely liberal. See Tex. R. App. P. 38.1(f). As an example
of the tone and style of Hornbuckle’s brief, we set forth the following excerpt from
pages 9 and 10 of her brief concerning her third issue:
Do not know if Fifth Circuit of Appeals has Abused Power and
Abused “power of Process to gain advantage and injury to plaintiff,”
of NO,” due process of law under Constitution of the U.S.A. Appellee
has no Preponderance of Evidence of all Elements and Abuse
Power by Imposed Monetary Sanction to prevent the First
Administration of laws is Justice , and Fifth Circuit Mort Threats of
Additional more server sanctions , is in violation of The Constitution
of the U.S.A. allowing a Trial By Jury , Due Process of Law.
3
issue, Hornbuckle appears to complain that Appellees committed libel or slander
because “APPELLEE Counsel wrote a letter to court for others to Read.” Under
her fifth issue concerning affirmative defenses, Hornbuckle appears to list
affirmative defenses that she contends Appellees do not possess. 5 Under her
sixth issue, Hornbuckle apparently complains of Mr. Mundt’s attorney’s fees
affidavit; Mr. Mundt, however, waived his request for attorney’s fees, and the trial
court’s summary judgment does not award any. Under her seventh issue,
Hornbuckle fails to make any cogent statement from which we are able to discern
an argument or complaint. She cites no case law in support of any of her issues
and sets forth no analysis of any issue in her brief.6
Although we liberally construe pro se briefs, litigants who represent
themselves are held to the same standards as litigants represented by counsel.
5
Hornbuckle lists, in part:
1. Appellee has no preponderance of Evidence for Frivolous
material facts of Nonsenical [sic] evidence according to Texas law
2. Failure to give any evidence and cannot say Appellant Failure of
Consideration , Hearsay, only GOD CAN JUDGE HEART AND
MIND OF A PERSON , not the Attorney
3. Appellee Attorney have not explained the material facts of law
pre- by contractual waiver , what law have not explained facts.
6
Appellees contend that Hornbuckle has waived all issues on appeal by
failing to “identify a legitimate issue for review, provide substantive analysis of
legal issues, and cite to relevant legal authority.”
4
See Mansfield State Bank v. Cohn, 573 S.W.2d 181, 184–85 (Tex. 1978). To
hold otherwise would give pro se litigants an unfair advantage over litigants with
an attorney. Id. The Texas Rules of Appellate Procedure require that a brief
“contain a clear and concise argument for the contentions made, with appropriate
citations to authorities and to the record.” Tex. R. App. P. 38.1(i); ERI Consulting
Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867, 880 (Tex. 2010) (recognizing that “[t]he
Texas Rules of Appellate Procedure require adequate briefing.”). The appellate
court has no duty to brief issues for an appellant. Mullendore v. Muehlstein, 441
S.W.3d 426, 429 (Tex. App.––El Paso 2014, pet. abated); Huey v. Huey, 200
S.W.3d 851, 854 (Tex. App.––Dallas 2006, no pet.). In the absence of
appropriate record citations or a substantive analysis, a brief does not present an
adequate appellate issue. Magana v. Citibank, N.A., 454 S.W.3d 667, 680–81
(Tex. App.––Houston [14th Dist.] 2014, pet. denied) (deeming issue waived due
to inadequate briefing); WorldPeace v. Comm’n for Lawyer Discipline, 183
S.W.3d 451, 460 (Tex. App.––Houston [14th Dist.] 2005, pet. denied) (holding
failure of appellant’s brief to offer argument, citations to record, or citations to
authority waived issue on appeal); Devine v. Dallas Cty., 130 S.W.3d 512, 513–
14 (Tex. App.––Dallas 2004, no pet.) (holding party failing to adequately brief
complaint waived issue on appeal); see also Fredonia State Bank v. Gen. Am.
Life Ins. Co., 881 S.W.2d 279, 284–85 (Tex. 1994) (recognizing long-standing
rule that error may be waived due to inadequate briefing). An appellant must
discuss the facts and the authorities relied upon as may be requisite to maintain
5
the point at issue. Tesoro Petroleum Corp. v. Nabors Drilling USA, Inc., 106
S.W.3d 118, 128 (Tex. App.––Houston [1st Dist.] 2002, pet. denied). “This is not
done by merely uttering brief conclusory statements, unsupported by legal
citations.” Id.
Because Hornbuckle has failed to adequately brief any issue for review by
this court, even after being notified of the deficiencies in her appellate brief, we
hold that the issues she purports to raise have been waived, and we overrule
them. Accordingly, we affirm the trial court’s judgment.
PER CURIAM
PANEL: WALKER, MEIER, and SUDDERTH, JJ.
DELIVERED: June 2, 2016
6
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 09-1800
___________
Dexter Lee Nash, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Arkansas.
- Cobbs, Mrs., Parole Officer, East *
Arkansas Regional Unit, ADC; Greg * [UNPUBLISHED]
Harmon, Warden, East Arkansas *
Regional Unit, ADC; Wheatly, Mrs., *
Assistant Warden, East Arkansas *
Regional Unit, ADC; Outlaw, *
Assistant Warden, East Arkansas *
Regional Unit, ADC; Winfrey, Mr., *
Parole Officer, East Arkansas Regional *
Unit, ADC, *
*
Appellees. *
___________
Submitted: October 12, 2009
Filed: November 4, 2009
___________
Before MURPHY, COLLOTON, and SHEPHERD, Circuit Judges.
___________
PER CURIAM.
Dexter Lee Nash appeals the district court’s1 dismissal without prejudice of his
42 U.S.C. § 1983 action. Upon de novo review, see Cooper v. Schriro, 189 F.3d 781,
783 (8th Cir. 1999) (per curiam), we agree with the district court that dismissal was
proper because Nash failed to state a section 1983 claim. Accordingly, we affirm.
See 8th Cir. R. 47B.
______________________________
1
The Honorable Brian S. Miller, United States District Judge for the Eastern
District of Arkansas, adopting the report and recommendations of the Honorable
Henry L. Jones, Jr., United States Magistrate Judge for the Eastern District of
Arkansas.
-2-
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23 B.R. 28 (1982)
In re ROYAL CROWN BOTTLERS OF NORTH ALABAMA, INC., Debtor.
Milton G. GARRETT, as Trustee of the Royal Crown Bottlers of North Alabama, Inc., Plaintiff,
v.
Freddie M. FALKNER, Defendant.
Bankruptcy No. 80-02431, Adv. No. 81-0765.
United States Bankruptcy Court, N.D. Alabama.
August 10, 1982.
Milton G. Garrett, Birmingham, Ala., as trustee.
Robert W. Hanson, Albertville, Ala., for defendant.
INTRODUCTION, FINDINGS OF FACT, CONCLUSION AND ORDER
L. CHANDLER WATSON, Jr., Bankruptcy Judge.
This is a case begun by a voluntary petition filed on May 7, 1980, under Chapter 7, Title 11, United States Code, and the case continues to be pending before the court under said chapter. The above-styled adversary proceeding was commenced by the trustee of the bankrupt estate in an effort to recover the proceeds of $35,000 from a bank check in that amount which was issued by the debtor to the defendant. The trustee alleged that this was a transfer for *29 "less than a reasonably equivalent value," that it was made "within one year next preceding the filing of the bankruptcy petition herein," and that it was made at a time when the debtor was insolvent or that the debtor was rendered insolvent by the transfer. There were other allegations not necessary to a recovery by the trustee or which constitute alternate claims not supported by any substantial evidence. The debtor responded to the complaint with a general denial. This proceeding was tried before the court, without intervention of a jury, and the proceeding has been submitted to the court for entry of a judgment. A judgment in favor of the defendant, dismissing the complaint and this proceeding will be entered.
Findings of Fact
From the pleadings and proof, the bankruptcy judge finds the following facts:
1. In early December, 1979, Royal Crown Bottling Company of Boaz, Inc. (hereinafter referred to as R-C Boaz) was experiencing financial difficulties and had sought financial help from Royal Crown Cola Company in Chicago. Such help was promised on the condition that R-C Boaz effect a reorganization and a change in management. The condition was met and substantial financial aid was given, but that did not prevent the bankruptcy of R-C Boaz, which occurred on the same day as that of the debtor.
2. The reorganization and change in management included the following:
(a) Lynn F. Hoffman became president, replacing William D. Hildebrand, who became vice president and treasurer, and Michael Little was elected assistant secretary-treasurer; (b) The defendant sold to R-C Boaz his capital stock in that corporation, being 450 shares, and any interest which he might have in capital stock of KA, Inc., cancelled a contract (dated April 3, 1978) which called for defendant to be employed by KA, Inc., as its operations manager and vice president, from May 1, 1978, to April 30, 1983, at an annual salary of $25,000, and released R-C Boaz from any liability to pay his salary, which had increased to $30,000. By some arrangement under this employment contract, defendant's principal duties were as operations manager of R-C Boaz, of which he also was a director and vice president. He relinquished all of these positions.
3. The purchase price of defendant's stock was fixed at $115,200, with $35,000 to be paid by R-C Boaz at the closing of the transaction and with the balance to be evidenced by a promissory note for $80,200.
4. The agreement between defendant and R-C Boaz was embodied in a written contract executed by them on January 23, 1980. Among other things, this agreement gave R-C Boaz an option to purchase a certain piece of real estate from defendant and agreed to hold defendant harmless from debts owed by it, the debtor, KA, Inc., Royal Crown Bottlers of Gadsden, Inc., and Royal Crown Bottlers of Cullman, Inc.
5. The debtor, KA, Inc., and Royal Crown Bottlers of Gadsden, Inc., apparently were wholly-owned subsidiaries of R-C Boaz, which also had at least some investment in Royal Crown Bottling Company of Cullman, Inc., and all were corporations.
6. R-C Boaz was a bottler of soft drinks under an arrangement with Royal Crown Cola Company, and the debtor maintained a warehouse for such drinks at Birmingham, Alabama, and distributed them to retail vendors. The funds and bookkeeping records of parent corporation and this subsidiary corporation were intermingled.
7. The debtor issued its bank check in the sum of $35,000, dated January 21 [?], 1980, to the defendant, who collected the proceeds of the check in that sum. This check was issued by the debtor to pay the downpayment by R-C Boaz for its purchase of its own stock from the defendant, as part of the agreement dated January 23, 1980. On May 7, 1980, the debtor filed its bankruptcy case, and it is this $35,000 which the trustee in bankruptcy seeks to recover from the defendant.
*30 8. At the time of issuance of this check and at all times subsequent, the debtor and R-C Boaz were insolvent.
Conclusions By the Court
The trustee recited in his complaint that recovery of the $35,000 was sought under the provisions of 11 U.S.C. § 548, which is titled "Fraudulent transfers ...." Along with other provisions, this section permits a trustee to recover a transfer (within one year of bankruptcy) of property by an insolvent debtor, if made for "less than a reasonably equivalent value." The trustee urges the obvious point here that the debtor paid the defendant $35,000 on an obligation owed by a separate corporation (R-C Boaz) for the latter's purchase of its own stock from the defendant. From this premise, the trustee concludes that all the consideration from the defendant in this transaction (the stock, the removal of the defendant from the ownership and management of R-C Boaz and the management of KA, Inc., the land-purchase option) passed to R-C Boaz, none passed to the debtor, and, therefore, the transfer of the $35,000 by the debtor to the defendant could not have been for a "reasonably equivalent value," received by the debtor.
This conclusion omits any consideration of the fact that to some extent these two corporations shared an "identity of interests"[1] and ignores its effect upon the matter before the court. It may be said that, as a general rule, an insolvent debtor receives "less than a reasonably equivalent value" where it transfers its property in exchange for a consideration which passes to a third party. In such case, it ordinarily receives little or no value.
A clear distinction from this rule exists, however, if the debtor and the third party are so related or situated that they share an "identity of interests," because what benefits one will, in such case, benefit the other to some degree.[2] The ultimate question then becomes one of determining the value of this vicarious benefit and testing it by the measure of "reasonably equivalent" for the property transferred by the insolvent debtor.
When the consideration for a transfer passes to the parent corporation of a debtor-subsidiary making the transfer, as in the case here, the benefit to the debtor may be presumed to be nominal, in the absence of proof of a specific benefit to it. On the other hand, the passing to a subsidiary of the consideration for a transfer by a debtor-parent may be presumed to be substantial, because the subsidiary corporation is an asset of the parent corporation, and what benefits the asset will ordinarily accrue to the benefit of its owner.
In the present case, the removal of the defendant from the ownership and management of R-C Boaz brought to both it and the debtor substantial financial aid from the franchisor, Royal Crown Cola Co., even though the financial blood transfusion was shortly to prove futile. There was no evidence of how much aid was given to the debtor, except "substantial." It is unlikely that financial aid was available to either the debtor or R-C Boaz (both being insolvent) from any other source; so, whatever financial aid went to either was of considerable benefit to it, in contrast to the value of a loan of money to a financially sound corporation. In addition, R-C Boaz appears to have been the bottler of the soft drinks and the debtor to have been the distributor of at least a substantial part of the bottled drinks. Thus, the evidence supports a conclusion of a special and significant financial benefit to the debtor from financial aid to its insolvent parent, R-C Boaz, in contrast to the presumption that a consideration passing to a parent corporation is usually of nominal benefit to its subsidiary corporation.
*31 In the present case, however, the court cannot determine the question of whether the consideration passing to the debtor was of "less than a reasonably equivalent value" in relation to the $35,000 paid out by the debtor. The lack of proof of the amount of financial aid given to the debtor and to R-C Boaz, upon the departure of the defendant, and of how it affected the operations of each corporation, leaves a void in the evidence.
Was it the responsibility of the trustee, having the general burden of proof or of ultimate persuasion (as the moving party) to supply this evidence; or, having proved that the primary elements of the consideration passed to a third party, for the debtor's transfer of its property, did the burden of going forward with the evidence shift to the defendant who received the $35,000 from an insolvent debtor? The United States Court of Appeals for the Second Circuit seems to have said that the trustee retains the burden of proving the value of this benefit to the debtor, to the extent of showing that it was "less than" a reasonably equivalent value for the property transferred.[3]
Whoever has the burden of establishing the value or lack of value received by the debtor in exchange for the transfer may ordinarily be faced with a task fatal to that party's case. It usually will be the task of establishing the value or lack of value of an intangible benefit a difficult assignment. Perhaps this particular burden should not be upon the trustee, once it has been established that the direct consideration for the debtor's transfer did not go to it, but to a third party. It is not unreasonable to find that the insolvent debtor's transferee should have the burden of demonstrating that the debtor's estate was not harmed by the transfer of the insolvent debtor's property to the transferee, even though all or substantially all of the primary consideration for the transfer went not to the debtor but to another party.
Rather than for this court to undertake to establish the latter rule, it appears that this case should be decided against the trustee's contention on a different evidentiary factor of a more fundamental nature. The statute provides, if its conditions are met, that the trustee "may avoid any transfer of an interest of the debtor in property." Because the funds of the debtor and of R-C Boaz were commingled and their records were not separately maintained, it was necessary to a recovery by the trustee that evidence be presented to the court of the source of the $35,000 transferred by the debtor to the defendant. No such evidence was presented to the court. As the moving party, it was clearly up to the trustee to prove to the satisfaction of the court that the debtor had an "interest" in the property transferred and the extent of such interest. The entire $35,000 may have been generated by R-C Boaz, and the debtor may have had no interest in that sum or it may be impossible to determine whose money it was or in what proportions it was owned. In any of those events, no judgment could be entered for the plaintiff. Having failed to satisfy these basic questions, the trustee cannot recover, even if the defendant is held to have the burden of going forward with evidence to show lack of harm to the debtor's estate in circumstances such as are found in this case. The court concludes that the plaintiff's complaint is not sustained and is due to be dismissed.
Judgment and Order
In view of the foregoing, it is the judgment of the court that the relief sought by the plaintiff is denied, and it is ORDERED by the court that the plaintiff's complaint and this adversary proceeding are dismissed out of court and that a copy hereof shall be sent through the United States mails to each of the following (which shall be sufficient service and notice of this judgment and order): the trustee's attorney, the defendant, his attorney, the United States trustee, and the debtor's attorneys.
NOTES
[1] See 9A Am.Jur.2d Bankruptcy § 564, at 193 (1980).
[2] Id. See, Rubin v. Manufacturers Hanover Trust Co., 661 F.2d 979 (2d Cir. 1981); In the Matter of Winslow Plumbing, Heating and Contracting Co., 424 F.Supp. 910 (D.Ct.1976).
[3] Rubin v. Manufacturers Hanover Trust Co., 661 F.2d 979 (2nd Cir. 1981).
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601 F.3d 1241 (2010)
UNITED STATES of America, Plaintiff-Appellant,
v.
Euladio SANTIAGO, Jr., Defendant-Appellee.
No. 09-10466.
United States Court of Appeals, Eleventh Circuit.
April 2, 2010.
*1242 J. Ryan Love, Panama City, FL, E. Bryan Wilson, Tallahassee, FL, for Plaintiff-Appellant.
Gwendolyn L. Spivey, Randolph P. Murrell, Charles William Lammers, Fed. Pub. Defenders, Tallahassee, FL, for Defendant-Appellee.
Before CARNES, HULL and ANDERSON, Circuit Judges.
ANDERSON, Circuit Judge:
This case presents the question of whether a guilty plea followed by a sentence of probation and a withholding of adjudication qualifies under Florida law as a predicate conviction for the purpose of enhancing a defendant's sentence under the Armed Career Criminal Act ("ACCA"), 18 U.S.C. § 924(e). Defendant Euladio Santiago, Jr. pleaded guilty to possession of a firearm by a convicted felon, in violation of 18 U.S.C. § 922(g)(1). The government argued that Santiago had three prior felony convictions, mandating an enhanced sentence under the ACCA. At sentencing, the district court found that one of Santiago's prior offenses was not a predicate conviction for enhancing his sentence under the ACCA because Santiago pleaded guilty to the offense, adjudication was withheld, and Santiago successfully completed his sentence of probation before committing the instant offense.
We hold that a guilty plea followed by a sentence of probation and a withholding of adjudication qualifies under Florida law as a predicate conviction for the purpose of enhancing a defendant's sentence under the ACCA. Thus, the district court erred in finding that Santiago did not have three qualifying convictions under the ACCA.
I.
On October 6, 2008, Defendant Euladio Santiago, Jr. ("Santiago") pleaded guilty to possession with intent to distribute less than fifty kilograms of marijuana, in violation of 21 U.S.C. § 841(b)(1)(D), and to possession of a firearm by a convicted felon, in violation of 18 U.S.C. § 922(g). His Presentence Investigation Report ("PSR") listed three prior felony drug offenses. On October 22, 2001, Santiago was sentenced in the Orange County Circuit Court, Orlando, Florida, for possession of cocaine with intent to sell or deliver. Santiago pleaded guilty to the charge. The court withheld adjudication and sentenced Santiago to one day in jail, with credit for one day of time served, and one year of probation, which Santiago successfully completed. On August 29, 2005, Santiago was sentenced in the Orange County Circuit Court, Orlando, Florida, for delivery of cocaine. Santiago pleaded guilty to the charge, and the court adjudicated him guilty. On May 4, 2006, Santiago was sentenced in the Seminole County Circuit Court, Sanford, Florida, for possession of cocaine with intent to sell or deliver. Santiago pleaded guilty to the charge, and the court adjudicated him guilty.
Based on those offenses, the PSR recommended that he be sentenced as an armed career criminal, which carries a mandatory fifteen year minimum sentence, pursuant to 18 U.S.C. § 924(e). Santiago objected, contending that the 2001 offense did not qualify as a prior conviction under the ACCA because he completed his probation and was not adjudicated guilty by the sentencing court.[1] The government countered that in light of this Court's decisions in United States v. Orellanes, 809 F.2d 1526 (11th Cir.1987), United States v. *1243 Grinkiewicz, 873 F.2d 253 (11th Cir.1989) (per curiam), and United States v. Chubbuck, 252 F.3d 1300 (11th Cir.2001), Santiago's guilty plea to the 2001 offense constituted a qualifying conviction for ACCA purposes, even if he was never adjudicated guilty. The district court found those cases were not controlling and held that the 2001 offense did not constitute a qualifying conviction because adjudication was withheld and Santiago completed his probation before he committed the instant offenses. Therefore, the district court declined to sentence Santiago as an armed career criminal, and instead imposed a sentence of 94 months' imprisonment. The government timely appealed.
II.
Questions of statutory interpretation are subject to de novo review. United States v. Cobia, 41 F.3d 1473, 1475 (11th Cir. 1995).
Ordinarily, a defendant convicted of being a felon in possession of a firearm under 18 U.S.C. § 922(g)(1)[2] is subject to a ten year maximum sentence. 18 U.S.C. § 924(a)(2). When such a defendant also "has three previous convictions ... for a violent felony or a serious drug offense ... committed on occasions different from one another," the ACCA imposes a mandatory fifteen year minimum sentence. 18 U.S.C. § 924(e)(1) (2000). Whether an offense constitutes a violent felony or a serious drug offense is a question of federal law.[3]United States v. James, 430 F.3d 1150, 1154 (11th Cir.2005). Federal law, however, does not control what constitutes a conviction for purposes of the ACCA. Instead, "[w]hat constitutes a conviction of such a crime shall be determined in accordance with the law of the jurisdiction in which the proceedings were held." 18 U.S.C. § 921(a)(20).
In prior cases, we have addressed the question of whether a guilty plea and a withholding of adjudication constitutes a predicate conviction for a violation of 18 U.S.C. § 922(g). In United States v. Orellanes, 809 F.2d 1526, 1527 (11th Cir.1987), the defendant Orellanes was charged with receipt of a firearm by a convicted felon after purchasing firearms and ammunition on several occasions between January 1982 and September 1985. His status as a convicted felon was based on a negotiated guilty plea to two felonies in Florida state court in July 1981. Id. Orellanes argued that because adjudication was withheld following his plea, he was not a convicted felon for the purpose of the felon-in-possession charge. Id. at 1528. After consulting Florida law, we held that "`the term "conviction" means determination of guilty by verdict of the jury or by plea of guilty, and does not require adjudication by the court.'" Id. (quoting State v. Gazda, 257 So.2d 242, 243-44 (Fla.1971)). In United States v. Grinkiewicz, 873 F.2d 253, 254 (11th Cir.1989) (per curiam), the defendant also argued that because adjudication was withheld on his prior felony offense in a Florida state court, he was not a convicted felon for the purpose of a felon-in-possession charge under 18 U.S.C. § 922(g)(1). In response to that argument, we reaffirmed our holding from Orellanes that under Florida law a person is considered a convicted felon after a guilty plea and withheld adjudication. Id. at 255. *1244 The question of whether a guilty plea and withheld adjudication is a conviction for purposes of a felon-in-possession charge came before us yet once more in United States v. Chubbuck, 252 F.3d 1300 (11th Cir.2001). There, we recognized the holdings of Orellanes and Grinkiewicz, id. at 1303; however, we also noted that our analysis in Orellanes may not have fully accounted for the context specific nature of the term "conviction" under Florida law, id. at 1304. Thus, we turned to Florida law surrounding Florida's unlawful possession of a firearm by a felon statute, Fla. Stat. Ann. § 790.23. Although the case law raised some concern that "perhaps our interpretation of Florida law was either in error or has since changed," we found no definitive authority from the Florida Supreme Court contradicting Orellanes or Grinkiewicz. Id. at 1305. Operating under plain error review, we held that the district court did not plainly err when it accepted Chubbuck's guilty plea to the felon-in-possession charge. Id. at 1306.
This case, however, does not present the question of whether Santiago was "convicted" of the 2001 offense for the purpose of supporting a charge under 18 U.S.C. § 922(g)(1) i.e., for the purpose of determining whether Santiago is a convicted felon. Santiago concedes that his 2005 and 2006 convictions are predicate convictions for a § 922(g)(1) violation, amply establishing Santiago's status as a convicted felon. Indeed, Santiago pleaded guilty to the instant charge that he possessed a firearm in violation of 18 U.S.C. § 922(g), the felon-in-possession statute. The question in this case is instead whether Santiago was "convicted" of the 2001 offense such that his sentence must be enhanced under 18 U.S.C. § 924(e). Because Orellanes, Grinkiewicz, and Chubbuck did not address the question of what constitutes a conviction for the purpose of enhancing a sentence under the ACCA, those holdings do not control the question before us.[4] Following the directive of § 921(a)(20), we therefore turn anew to Florida law.
As we noted in Chubbuck, the definition of "conviction" under Florida law is fluid and context specific. Chubbuck, 252 F.3d at 1304. See Raulerson v. State, 763 So.2d 285, 291 (Fla.2000) (per curiam) ("[T]he term `conviction' as used in Florida law has been a `chameleon-like' term that has drawn its meaning from the particular statutory context in which the term is used." (quoting State v. Keirn, 720 So.2d 1085, 1086 (Fla. 4th DCA 1998))). Given that the definition of the term "conviction" is context specific, we must initially determine the appropriate Florida law context for this case. Because 18 U.S.C. § 924(e) is a sentence enhancement provision, United States v. Sweeting, 933 F.2d 962, 967 (11th Cir.1991), we believe the appropriate source of law in this situation is Florida law concerning sentencing enhancements for habitual felony offenders, Fla. Stat. Ann. § 775.084. See United States v. Jefferson, 88 F.3d 240, 243-45 (3d Cir.1996) (relying on Pennsylvania and New Jersey law concerning sentencing enhancements when determining definition of "conviction" for purpose of enhancing defendant's sentence under 18 U.S.C. § 924(e)); cf. Chubbuck, 252 F.3d at 1304 (suggesting that law concerning Florida's unlawful possession of a firearm by a felon statute is appropriate source for definition of "conviction" for purpose of a violation of the *1245 federal felon-in-possession statute, 18 U.S.C. § 922(g)(1)).
Accordingly, we turn to Florida law concerning sentencing enhancements for habitual felony offenders. The Florida law in this regard is clear.
For the purposes of this section,[5] the placing of a person on probation or community control without an adjudication of guilty shall be treated as a prior conviction.
Fla. Stat. Ann. § 775.084(2) (West 2005 & Supp.2010). Thus, it is clear that, in the appropriate context of Florida's treatment of prior convictions for purposes of enhancing the sentence of a violent career criminal or habitual felony offender, Florida law would treat a prior guilty plea followed by a sentence of probation as a prior conviction without regard to whether or not adjudication was withheld.
In Franklin v. State, 887 So.2d 1063, 1068 (Fla.2004), the Florida Supreme Court distinguished the current version of Fla. Stat. § 775.084 from the previous version under which "an offense for which adjudication of guilt had been withheld would not have qualified as a predicate for habitual offender sentencing unless the subsequent offenses [sic] pending for sentencing was committed while the offender was on probation or community control after the withhold of adjudication." The comparison drawn by the Florida Supreme Court reinforces the plain meaning drawn from the text of the statute. The statute recognizes no exception for the completion of probation before the commission of the offense for which the defendant is to be sentenced as an habitual felony offender. Indeed, Santiago concedes that the 2001 offense would be counted as a conviction for enhancement purposes under Florida law. Therefore, we now hold that a guilty plea followed by a sentence of probation and a withholding of adjudication constitutes a conviction under Florida law for the purpose of enhancing a defendant's sentence pursuant to 18 U.S.C. § 924(e), and that successful completion of probation on the Florida offense for which adjudication was withheld is immaterial to whether that offense can be used to enhance a defendant's sentence under the ACCA.
Santiago makes an interesting, and superficially appealing, argument against the foregoing interpretation. Santiago notes that 18 U.S.C. § 924(e)(1) provides: "In the case of a person who violates § 922(g) of this title and has three previous convictions by any court referred to in § 922(g)(1) for a violent felony or a serious drug offense," such person shall receive an enhanced sentence including a mandatory minimum sentence of fifteen years. Santiago argues that the reference to "convictions ... referred to in § 922(g)(1)" incorporates the context of a § 922(g)(1) conviction namely, a conviction that disqualifies a person from possessing a firearm, and thereby makes it unlawful under § 922(g)(1) for such a person to possess a firearm. We reject Santiago's interpretation.[6]
We conclude that Santiago's interpretation is strained. Section 924(e) clearly constitutes an enhancement context. When § 924(e) uses the phrase "previous *1246 convictions ... referred to in § 922(g)(1)," we do not believe Congress intended to incorporate peculiar state law in an entirely different context (i.e., the different context of whether a prior conviction renders a person a felon for a felon-in-possession offense). A more natural and reasonable reading of the statute would interpret the phrase "convictions ... referred to in § 922(g)(1)" as incorporating merely the language of § 922(g)(1) "convicted in any court, of a crime punishable by imprisonment for a term exceeding one year" which language in turn incorporates the definition of those precise words as set out in § 921(a)(20). And, as noted above, § 921(a)(20) looks to the relevant state law to determinate what constitutes a conviction, which state law, in the case of Florida, varies with the context. Not only is this construction of § 924(e) more natural grammatically, it comports with the common sense notion that the context of the state law to which we look to ascertain the meaning of the "three previous convictions" in § 924(e) should match the context of § 924(e) itself i.e., an enhancement context. Accordingly, we reject Santiago's preferred interpretation, and hold that the relevant state law to which we should look for guidance in determining what constitutes a conviction with respect to the 2001 prior Florida guilty plea in this case is the Florida law in the enhancement context i.e., the Florida law concerning enhancement for habitual felony offenders. As noted above, the Florida habitual felony offender laws clearly provide that placing a person on probation without an adjudication of guilt shall be treated as a prior conviction for purposes of enhancing the sentence of a habitual felony offender.
Not only does our holding in this regard comport with common sense, it is consistent with the only federal circuit court opinion to have addressed the issue. In United States v. Jefferson, 88 F.3d 240 (3d Cir.1996), the Third Circuit construed 18 U.S.C. § 924(e) as we do today. The issue before the court was whether a previous Pennsylvania guilty plea and a previous New Jersey guilty plea constituted "convictions" for purposes of § 924(e) even though the charged offense the sentence for which was being enhanced occurred before sentencing in the two previous offenses. Although the determination of whether the prior offense constituted a conviction differed depending upon the context, the Third Circuit looked to the state law in the enhancement context to determine whether the previous guilty pleas constituted convictions for purposes of § 924(e). Id. at 243-44. With respect to both previous convictions, the state law in an enhancement context would treat the guilty pleas as a conviction even though sentencing had not yet occurred. Accordingly, the Third Circuit counted those previous convictions and enhanced the sentence for the instant offense pursuant to § 924(e).[7]Id. at 245.
*1247 III.
Looking to Florida law in the appropriate enhancement context, Santiago's guilty plea followed by a sentence of probation and a withholding of adjudication on the 2001 Florida offense constitutes a conviction for the purpose of enhancing his sentence under the ACCA. Therefore, it was error for the district court not to count Santiago's 2001 offense as a qualifying conviction for the purpose of enhancing his sentence pursuant to 18 U.S.C. § 924(e). The sentence imposed by the district court is vacated, and the case remanded for sentencing consistent with this opinion.
VACATED AND REMANDED.
NOTES
[1] Santiago concedes that the 2005 and 2006 offenses qualify as prior convictions for purposes of the ACCA.
[2] Section 922(g)(1) prohibits the possession of a firearm by anyone "who has been convicted in any court of, a crime punishable by imprisonment for a term exceeding one year." 18 U.S.C. § 922(g)(1) (2000).
[3] We note that Santiago does not dispute that the 2001 offense constitutes a "serious drug offense" for purposes of the ACCA. Thus, the only question before us is whether his guilty plea followed by a sentence of probation and a withholding of adjudication counts as a "conviction."
[4] Because in this case we do not face the issue in Orellanes, Grinkiewicz, and Chubbuck, we need not address Santiago's argument that more recent Florida cases have eroded the holding of our cases concerning the precise contours of Florida law as to what constitutes a conviction for purposes of establishing a person's status as a convicted felon in the felon-in-possession statute.
[5] Section 775.084 is titled: "Violent career criminals; habitual felony offenders and habitual violent felony offenders; three-time violent felony offenders; definitions; procedure; enhanced penalties or mandatory minimum prison terms."
[6] Santiago assumes that the phrase "referred to in § 922(g)(1)" refers to "convictions" rather than to the immediately preceding term "by any court." We need not decide that issue. If the phrase modified "by any court," Santiago's argument could be rejected summarily. Thus, we assume arguendo, only for discussion of Santiago's argument, that the phrase "referred to in § 922(g)(1)" modifies the word "convictions."
[7] We do not think United States v. Drayton, 113 F.3d 1191 (11th Cir.1997) (per curiam), indicates a different result. It is true that Drayton did involve the enhancement context i.e., the determination of whether a prior conviction qualified as a conviction for purposes of § 924(e). It is also true that the opinion discussed United States v. Willis, 106 F.3d 966 (11th Cir.1997). In the context of determining whether Willis was a felon for purposes of § 922(g) (the federal felon-in-possession statute), Willis held that a previous Florida plea of nolo contendere followed by a withholding of adjudication was not a prior conviction rendering Willis a felon. Id. at 970. In Drayton, the panel was addressing the defendant's argument that Willis meant that Drayton's prior Florida nolo contendere pleas could not be counted as prior convictions. Drayton, 113 F.3d at 1192. The panel distinguished Willis because Drayton's nolo pleas had been followed by adjudications of guilt. Id. at 1193. Thus "Willis [was] of no benefit to [Drayton]." Id. We conclude that the panel in Drayton merely rejected Drayton's argument based on Willis. The panel did not discuss the fact that Willis was decided in the context of determining whether Willis was a felon at all, and not in the different enhancement context of the Drayton case. Apparently, no argument was made to the Drayton panel that the context might be significant, or that the Florida law might vary with the context. We are satisfied that Drayton made no holding that § 924(e) determinations should be guided by the Florida law as to what constitutes a conviction for purposes of rendering a person a felon, rather than the more appropriate enhancement context matching the enhancement context of § 924(e).
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\\5\
FILED
UN1TED STATES DISTRICT CoURT JUL 2 9 2009
FoR THE DISTRICT oF CoLUMBIA dark u_$ District and
Bankruptcy Courts
James B. crawford,
Petirioner, .
v. civilAcrionNo. 09
D.B. Drew, warden, er ai. z
Respondents.
FINAL ORDER
For the reasons stated in the accompanying memorandum opinion, it is hereby
ORDERED that this case is DISMISSED for lack of jurisdiction. This is a final
appealable Order. See Rule 4(a), Fed. R. App. P.
¢. ,{ia¢¢¢m
Un` d States l)istrict Judge
Date: 7/,_7!0€
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Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
04/19/2019 09:07 AM CDT
- 110 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
STATE v. THALMANN
Cite as 302 Neb. 110
State of Nebraska, appellee, v.
Donald R. Thalmann, appellant.
___ N.W.2d ___
Filed January 25, 2019. No. S-18-111.
1. Judgments: Jurisdiction: Appeal and Error. A jurisdictional question
that does not involve a factual dispute is determined by an appellate
court as a matter of law, which requires the appellate court to reach a
conclusion independent of the lower court’s decision.
2. Jurisdiction: Appeal and Error. Before reaching the legal issues
presented for review, it is the duty of an appellate court to determine
whether it has jurisdiction over the matter before it, irrespective of
whether the issue is raised by the parties.
3. Final Orders: Appeal and Error. Numerous factors have been set
forth defining when an order affects a substantial right. Broadly, these
factors relate to the importance of the right and the importance of the
effect on the right by the order at issue. It is not enough that the right
itself be substantial; the effect of the order on that right must also
be substantial.
4. Words and Phrases. A substantial right is an essential legal right, not
merely a technical right.
5. Final Orders: Appeal and Error. An order affects a substantial right if
it affects the subject matter of the litigation, such as diminishing a claim
or defense that was available to the appellant prior to the order from
which he or she is appealing.
Appeal from the District Court for Lancaster County: Jodi L.
Nelson, Judge. Appeal dismissed.
Joseph D. Nigro, Lancaster County Public Defender, and
Matthew F. Meyerle for appellant.
- 111 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
STATE v. THALMANN
Cite as 302 Neb. 110
Douglas J. Peterson, Attorney General, and Nathan A. Liss
for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Heavican, C.J.
INTRODUCTION
Donald R. Thalmann was serving a sentence of probation
following a conviction for possession of a controlled sub-
stance. After several positive drug and alcohol screens, his
probation officer sought the imposition of a custodial sanc-
tion. The district court imposed a 15-day custodial sanction.
Thalmann appeals. We dismiss Thalmann’s appeal.
BACKGROUND
Thalmann was convicted of possession of a controlled sub-
stance, a Class IV felony, and sentenced to a term of 3
years’ probation. Just 2 months into that term of probation,
Thalmann’s probation officer sought the imposition of a cus-
todial sanction. A hearing was held on the motion for a custo-
dial sanction.
At that hearing, the State offered the testimony of Thalmann’s
probation officer and various exhibits in support of the request
for a custodial sanction. The district court granted the motion
and imposed a custodial sanction of 15 days’ imprisonment.
ASSIGNMENTS OF ERROR
On appeal, Thalmann assigns that the district court erred in
(1) considering exhibits 2 and 7 through 9, because receipt of
those exhibits violated Thalmann’s due process rights, and (2)
finding there was sufficient evidence to support a finding that
Thalmann violated the terms of his probation.
STANDARD OF REVIEW
[1] A jurisdictional question that does not involve a factual
dispute is determined by an appellate court as a matter of law,
- 112 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
STATE v. THALMANN
Cite as 302 Neb. 110
which requires the appellate court to reach a conclusion inde-
pendent of the lower court’s decision.1
ANALYSIS
[2] Before reaching the legal issues presented for review,
it is the duty of an appellate court to determine whether
it has jurisdiction over the matter before it, irrespective of
whether the issue is raised by the parties.2 After reviewing the
record, we conclude that we lack appellate jurisdiction because
Thalmann has not appealed from a final order.
Neb. Rev. Stat. § 25-1911 (Reissue 2016) gives appellate
courts jurisdiction to review “[a] judgment rendered or final
order made by the district court . . . for errors appearing on
the record.” For purposes of appellate jurisdiction, “[a] judg-
ment is the final determination of the rights of the parties in
an action.”3 “Any proceeding in a court by which a party pros-
ecutes another for enforcement, protection, or determination
of a right or the redress or prevention of a wrong involving
and requiring the pleadings, process, and procedure provided
by the code and ending in a final judgment is an action.”4 In
a criminal case, the judgment from which the appellant may
appeal is the sentence.5 Here, the sentence was the placement
of Thalmann on probation.
Because the order from which Thalmann attempts to appeal
was not a judgment, we must consider whether it was a final
order. Under Neb. Rev. Stat. § 25-1902 (Reissue 2016), the
three types of final orders which may be reviewed on appeal
are (1) an order affecting a substantial right in an action that,
1
Simms v. Friel, ante p. 1, ___ N.W.2d ___ (2019).
2
Last Pass Aviation v. Western Co-op Co., 296 Neb. 165, 892 N.W.2d 108
(2017).
3
Neb. Rev. Stat. § 25-1301(1) (Reissue 2016).
4
Rehn v. Bingaman, 157 Neb. 467, 479, 59 N.W.2d 614, 620 (1953).
5
State v. Ratumaimuri, 299 Neb. 887, 911 N.W.2d 270 (2018).
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
STATE v. THALMANN
Cite as 302 Neb. 110
in effect, determines the action and prevents a judgment; (2)
an order affecting a substantial right made during a special
proceeding; and (3) an order affecting a substantial right
made on summary application in an action after a judgment
is rendered. We have not previously opined on the finality of
an order imposing a custodial sanction. Because such a sanc-
tion is common to all three categories of a final order under
§ 25-1902, we turn first to whether this order affects a sub-
stantial right.
[3] Numerous factors have been set forth defining when an
order affects a substantial right. Broadly, these factors relate
to the importance of the right and the importance of the effect
on the right by the order at issue.6 It is not enough that the
right itself be substantial; the effect of the order on that right
must also be substantial.7
[4,5] Regarding the importance of the right affected, we
often state that a substantial right is an essential legal right,
not merely a technical right.8 It is a right of “‘substance.’”9
We have elaborated further that an order affects a substantial
right if it “‘affects the subject matter of the litigation, such as
diminishing a claim or defense that was available to the appel-
lant prior to the order from which he or she is appealing.’”10
Whether the effect of an order is substantial depends on
“‘whether it affects with finality the rights of the parties in
the subject matter.’”11 This aspect of “‘affecting a substan-
tial right’” also depends on whether the right could other-
wise be effectively vindicated.12 An order affects a substantial
6
State v. Jackson, 291 Neb. 908, 870 N.W.2d 133 (2015).
7
Id.
8
Id.
9
Id. at 913, 870 N.W.2d at 138.
10
Id. at 914, 870 N.W.2d at 138.
11
Id.
12
Id.
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
STATE v. THALMANN
Cite as 302 Neb. 110
right when the right would be “‘significantly undermined’”
or “‘irrevocably lost’” by postponing appellate review.13 The
duration of the order is relevant to whether its effect on the
substantial right is substantial.14
This case presents two distinct rights that are affected by
the order imposing a custodial sanction of 15 days’ imprison-
ment. The first is Thalmann’s liberty interest. The second is
Thalmann’s right to not have his probation revoked, a pos-
sible consequence because, under Neb. Rev. Stat. § 29-2267(3)
(Reissue 2016), revocation proceedings may be instituted
against him “in response to a substance abuse or noncriminal
violation if the probationer has served ninety days of cumula-
tive custodial sanctions during the current probation term.”
The second right—the possibility of the revocation of his
probation—is not a substantial right. The imposition of 15
days toward the 90 days after which Thalmann’s revocation
proceeding might be instituted is speculative. Thalmann might
not have further days of custodial sanction imposed, the State
might not choose to institute revocation proceedings, or the
court might deny any request to revoke probation. This right is
not an essential right, but is a mere technical right.
Moreover, this right would not be significantly undermined
or irrevocably lost if it is not reviewed at this time, because
that right is not at risk as a result of this order. Should proceed-
ings to revoke Thalmann’s probation be instituted at a later
date, the merits of this custodial sanction could be addressed in
an appeal from those proceedings.
Having concluded that the second right is not substantial, we
turn to the first right—Thalmann’s liberty interest. We likewise
conclude that on these facts, such is not a substantial right.
First, this order does not affect Thalmann’s custodial sta-
tus under Nebraska law. When Thalmann was sentenced to
13
Id.
14
State v. Jackson, supra note 6.
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302 Nebraska R eports
STATE v. THALMANN
Cite as 302 Neb. 110
probation, he was in custody for purposes of Nebraska law.15
Even after the entry of the district court’s order, Thalmann
remains on probation. The imposition of the custodial sanction
does not change his status as being in custody—it simply mod-
ifies the nature of that custody. During his postrelease supervi-
sion, Thalmann was always subject to a custodial sanction.
Moreover, the custodial sanction imposed in this case was
just 15 days—a relatively brief modification in the nature of
his custody. Orders of a temporary nature are often not final,
because the temporary nature of the order prevents it from sub-
stantially affecting an individual’s rights.16
Because we conclude that the order imposing a custodial
sanction did not affect a substantial right, Thalmann does not
appeal from a final order. Accordingly, we must dismiss his
appeal for lack of jurisdiction.
CONCLUSION
The order imposing a custodial sanction does not affect
a substantial right and is not final. Accordingly, Thalmann’s
appeal is dismissed.
A ppeal dismissed.
15
Cf. State v. Styskal, 242 Neb. 26, 493 N.W.2d 313 (1992).
16
See, e.g., In re Interest of Zachary B., 299 Neb. 187, 907 N.W.2d 311
(2018); State v. Jackson, supra note 6; In re Interest of Danaisha W. et al.,
287 Neb. 27, 840 N.W.2d 533 (2013); In re Guardianship of Sophia M.,
271 Neb. 133, 710 N.W.2d 312 (2006); In re Interest of T.T., 18 Neb. App.
176, 779 N.W.2d 602 (2009).
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16 S.W.3d 192 (2000)
The STATE of Texas, Appellant,
v.
David Ray ATWOOD, Appellee.
No. 09-99-186 CR.
Court of Appeals of Texas, Beaumont.
Submitted November 18, 1999.
Decided April 19, 2000.
*193 Michael R. Little, Dist. Atty., Michael A. Mark, Asst. Dist. Atty., Liberty, for State.
Ragis Fontenot, Jr., Liberty, for appellee.
Before WALKER, C.J., BURGESS and STOVER, JJ.
OPINION
EARL B. STOVER, Justice.
A jury convicted appellee David Ray Atwood of the offense of felony evading arrest.[1] Based on prior offenses charged in the indictment and found by the jury, the trial court sentenced him to twenty years' confinement in the Texas Department of Criminal JusticeInstitutional Division and assessed a $1,000 fine.[2] After Atwood appealed his conviction and sentence, the case transferred from the Ninth District Court of Appeals in Beaumont to the Sixth District Court of Appeals in Texarkana. The Texarkana court affirmed his conviction for the Class A misdemeanor offense of evading arrest, but reversed and remanded the cause to the trial court for a new trial on punishment. See Atwood v. State, 972 S.W.2d 880, 882 (Tex.App-Texarkana 1998, pet.ref'd).[3] Following the appellate court's reversal on punishment, the state then filed a petition for discretionary review, which was subsequently refused by the Texas Court of Criminal Appeals. Upon retrial of the punishment phase, the trial court sentenced Atwood as a misdemeanor to a term of one year in the Liberty County jail.
On appeal, the State contends the trial court's punishment is an illegal sentence. See Tex.Code Crim. Proc. Ann. art. 44.01(b) (Vernon Supp.2000). (An illegal sentence may be appealed by the State.). Specifically, the State claims the trial court erred on remand by assessing a one year sentence for an offense "which [in reality] is a state jail felony enhanced up to a second degree felony...." Under the State's *194 theory, rather than a one year sentence, the trial court on remand should have sentenced Atwood to a second degree felony of not less than two and not more than twenty years.
In support of its theory, the State relies upon the language of the evading arrest statute which provides that a person commits an offense if he intentionally flees from a person he knows is a peace officer attempting to lawfully arrest or detain him. See Tex. Pen.Code Ann. § 38.04(a) (Vernon Supp.2000). The statute further provides that an offense under this section is a Class B misdemeanor, except that the offense is a state jail felony if the actor uses a vehicle while the actor is in flight and the actor has previously been convicted under this section. Id. § 38.04(b)(2). It is the State's position that the misdemeanor evading arrest is enhanced to a state jail felony upon proof of a prior conviction for evading arrest. Thus, in the State's view, section 38.04(b)(2) does not contain language denoting an element of the offense, but instead contains language pertaining merely to punishment enhancement.
In contrast, Atwood argues that the trial court on remand was correct in sentencing him as a misdemeanant rather than a felon. From his perspective, a "prior evading arrest conviction that elevates a misdemeanor to a felony is a jurisdictional element of the charged felony offense," which must be proved at the guilt/innocence phase of the trial. Acknowledging it failed to prove the prior evading arrest offense during guilt/innocence, the State instead contends such proof is actually part of the punishment phase of the trial. Only after the case was appealed by Atwood and remanded by the Texarkana court for a new punishment hearing, did the State put on its proof concerning the prior evading arrest conviction.
The State directs us to Monge v. California, 524 U.S. 721, 118 S.Ct. 2246, 141 L.Ed.2d 615 (1998), where the United States Supreme Court held that the Double Jeopardy Clause does not preclude a retrial on a prior conviction allegation in a non-capital sentencing context. Id. at 734, 118 S.Ct. at 2253, 141 L.Ed.2d at 628. Any support from the Monge opinion, however, depends upon the punishment issue's being a legitimate enhancement issue rather than an actual element of the offense.
On appeal, Atwood argues his sentence cannot be enhanced by the prior evading arrest conviction, because the prior conviction, rather than a punishment factor, is actually an element of the offense. According to Atwood, the State has the burden of proving the prior evading arrest conviction during the guilt/innocence phase of the trial. To allow proof to be made at the retrial on punishment would constitute, in Atwood's view, a violation of the Double Jeopardy Clause of the Fifth Amendment to the United States Constitution.
In support of his position, Atwood contends that the felony evading arrest offense is similar to the offense of felony DWI. In Tamez v. State, 11 S.W.3d 198 (Tex.Crim.App.2000), the Court of Criminal Appeals addressed the issue of whether the State is required to actually prove two previous DWI convictions in order to prosecute a defendant for felony DWI or whether a defendant's stipulation admitting those two previous convictions is sufficient. The Court held:
Regarding the former issue, this Court held that when prior convictions are used to elevate what would otherwise be a misdemeanor offense to the level of a felony, they must be pled in the indictment for the trial court to gain jurisdiction. See Turner v. State, 636 S.W.2d 189, 196 (Tex.Crim.App.1980); Gant v. State, 606 S.W.2d 867, 871 (Tex. Crim.App. [Panel Op.] 1980). Nevertheless, it is not the reading of the indictment that vests the trial court with jurisdiction. Rather jurisdiction vests when the pleadings are submitted to the trial court and contain the requisite number of previous convictions. Therefore, this rule guides us as to what the *195 State should present to the trial court, not necessarily what the State should tell and prove to the jury.
Id. at 201. The Court went on to hold that the State is not required to read an indictment containing the jurisdictional prior convictions to the jury; the pleading of two prior DWI convictions in the indictment is sufficient to confer jurisdiction. The holding, however, prohibits the reading of prior convictions that are for enhancement purposes only when the defendant stipulates to two prior DWI convictions.
In Tamez, the Court of Criminal Appeals continued to treat two prior DWI convictions as essential elements of felony DWI. See also Renshaw v. State, 981 S.W.2d 464, 466 (Tex.App.-Texarkana 1998, pet. ref'd) (Prior DWI's are elements of the offense and part of the proof at the guilt/innocence stage for a felony DWI prosecution.). The Court also referenced two prior cases that had earlier applied the same principle to theft convictions. Just as two prior DWI's are essential elements of the offense of the felony DWI, prior theft offenses are also jurisdictional elements when they are used to elevate what would be a misdemeanor theft offense to a felony theft. See Turner v. State, 636 S.W.2d 189, 196 (Tex.Crim.App.1980); Gant v. State, 606 S.W.2d 867, 871 (Tex. Crim.App.1980).
In Almendarez-Torres v. United States, 523 U.S. 224, 226, 118 S.Ct. 1219, 1222, 140 L.Ed.2d 350, 357 (1998), the United States Supreme Court considered the question of whether a provision in a particular statute defined a separate crime or simply authorized an enhanced penalty. That, in effect, is the preliminary question before us as well. Is section 38.04(b)(2) a penalty provision or is it a separate crime, the elements of which must be proved at the guilt/innocence phase of trial? As noted by the United States Supreme Court in Jones v. United States, 526 U.S. 227, 232, 119 S.Ct. 1215, 1219, 143 L.Ed.2d 311, 319 (1999), "much turns on the determination that a fact is an element of an offense rather than a sentencing consideration, given that elements must be charged in the indictment, submitted to a jury, and proven by the Government beyond a reasonable doubt." In making the determination of whether the portion of the statute in question is an element of the offense or a sentencing factor, we look, as did the United States Supreme Court in Almendarez-Torres, to the statute's language, structure, subject matter, context, and history. Almendarez-Torres at 228-29, 118 S.Ct. at 1223, 140 L.Ed.2d at 358. We note first that the title of section 38.04 does not mention the word "penalty," as did the pertinent statute in Almendarez-Torres. Nor is the subject matter of section 38.04 recidivism, as was the case with the statute in Almendarez-Torres. Instead, the subject matter of section 38.04 is the actual offense of evading arrest and its aggravating elements. See generally Jones, 526 U.S. 227, 119 S.Ct. 1215, 143 L.Ed.2d 311 (Court interpreted 18 U.S.C. 2119 as setting out separate and aggravated offenses rather than a single offense with various sentencing factors.). As in Jones, the structural pattern of the statute, both now and prior to its amendment in 1993, supports the conclusion that the subsections of section 38.04 are elements of the offense.[4]
In addition to the fact that section 38.04 sets out the actual offense, subsection (b)(2) sets out two requirements for making the offense a state jail felony: the actor must have used a vehicle while in flight and must have been previously convicted of an offense under section 38.04. One of those requirementsthe use of a *196 vehicle while in flighthas nothing to do with recidivism, and it is joined with the requirement of a prior conviction of evading arrest. With the joinder of the two requirements in subsection (b)(2), one of which clearly has nothing to do with recidivism, we conclude they both are elements of the felony offense of evading arrest.
It is also instructive to note that the remaining subsections in section 38.04 follow the same pattern. The evading arrest offense is a Class A misdemeanor if the actor uses a vehicle while the actor is in flight and the actor has not been previously convicted under this section; the offense is a third degree felony if another suffers serious bodily injury as a direct result of an attempt by the officer from whom the actor is fleeing to apprehend the actor while the actor is in flight; the offense is a second degree felony if another suffers death as a direct result of an attempt by the officer from whom the actor is fleeing to apprehend the actor while the actor is in flight. See § 38.04(b)(1)-(4). The structure is consistent with other statutes in the Texas Penal Code which treat such matters as aggravating elements of the offense. See Tex. Pen.Code Ann. §§ 22.01, (assault), 22.041 (abandoning or endangering a child), 31.03 (theft), 49.09(DWI) (Vernon Supp.2000).
In the instant case, the State attempted to elevate a misdemeanor evading arrest offense to a state jail felony based, in part, on a prior conviction for evading arrest. We conclude, that, as is the case with prior offenses in DWI and theft cases, a prior offense of evading arrest is an element of the offense of felony evading arrest and must not only be included in the indictment, but must also be proved at trial. The State has acknowledged it did not prove the prior conviction at trial. Having failed to prove an element of the offense during the guilt/innocence phase of the trial, the State cannot, in effect, retry Atwood for the same crime and thereby violate the Double Jeopardy Clause of the United States Constitution.
"The Double Jeopardy Clause ... embodies three protections: (1) it protects against a second prosecution for the same offense after acquittal; (2) it protects against a second prosecution for the same offense after conviction; and (3) it protects against multiple punishments for the same offense." Ex parte Broxton, 888 S.W.2d 23, 25 (Tex.Crim.App.1994). In Atwood's original appeal, the Texarkana court found the evidence was insufficient to prove the prior evading arrest offense; thus, he was, in effect, acquitted of the felony offense of evading arrest and convicted only of a Class A misdemeanor evading arrest. See Monroe v. State, 871 S.W.2d 801, 803 (Tex. App.-Houston [14th Dist.] 1994, no pet.) (A defendant convicted of a lesser included offense is impliedly acquitted of the greater offense.). To give the State a "second bite at the apple" in attempting to prove up the prior evading arrest would be to subject Atwood to double jeopardy.
Citing Tex. Const.art. V, § 12(b), the State urges that proof of the prior evading arrest offense is not necessary to confer jurisdiction on the trial court. According to the State, the filing of the indictment confers jurisdiction on the district court. Here, the indictment alleged felony evading arrest, an offense over which the district court had jurisdiction. We agree with the State that the indictment alleged a felony, and the district court had jurisdiction to hear the case. What the State failed to do, however, was prove all of the elements of the offense at the guilt/innocence phase of the trial. As the Texarkana court held, all the State proved at trial was a Class A misdemeanor punishable by a maximum fine of $4,000 and a confinement in jail of one year or less. Tex. Pen.Code Ann. § 12.21 (Vernon 1994). On remand for punishment, the trial court meted out punishment within the appropriate statutory range. We hold the trial court was correct in sentencing Atwood as a misdemeanant, rather than a *197 felon, and the sentence is not illegal. The State's issue is overruled.
The judgment is affirmed.
NOTES
[1] The evading arrest statute is quoted below:
§ 38.04. Evading Arrest or Detention
(a) A person commits an offense if he intentionally flees from a person he knows is a peace officer attempting lawfully to arrest or detain him.
(b) An offense under this section is a Class B misdemeanor, except that the offense is:
(1) a Class A misdemeanor if the actor uses a vehicle while the actor is in flight and the actor has not been previously convicted under this section;
(2) a state jail felony if the actor uses a vehicle while the actor is in flight and the actor has been previously convicted under this section;
(3) a felony of the third degree if another suffers serious bodily injury as a direct result of an attempt by the officer from whom the actor is fleeing to apprehend the actor while the actor is in flight; or
(4) a felony of the second degree if another suffers death as a direct result of an attempt by the officer from whom the actor is fleeing to apprehend the actor while the actor is in flight.
(c) In this section, "vehicle" has the meaning assigned by Section 541.201, Transportation Code.
(d) A person who is subject to prosecution under both this section and another law may be prosecuted under either or both this section and the other law.
Tex. Pen.Code Ann. § 38.04 (Vernon Supp. 2000).
[2] The sentence was to run concurrently with Atwood's twenty year sentence for theft of property.
[3] The Texarkana court's reversal on punishment was based, in pertinent part, on Atwood's claim of insufficient evidence to prove the prior conviction pleaded by the State in the indictment. Atwood, 972 S.W.2d at 881. There being no evidence of the prior conviction, the Sixth Court of Appeals affirmed the conviction of the Class A misdemeanor offense of evading arrest, rather than felony evading arrest. Id. at 882. The issue before us is distinct from that before the Texarkana court of appeals. Their issue was insufficiency of the evidence to support the prior conviction; our issue is the question of the legality of the one year sentence handed down by the trial court after remand.
[4] In Almendarez-Torres, the United States Supreme Court concluded the federal statute in question had to do with recidivism and was not a separate offense. Almendarez-Torres at 247, 118 S.Ct. at 1233, 140 L.Ed.2d at 371. In Jones, the court considered another federal statute and found the subsections in question each constituted a separate offense and were not sentencing factors. See Jones, 526 U.S. 227, 119 S.Ct. 1215, 143 L.Ed.2d 311.
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983 F.2d 1062
U.S.v.Thomas*
NO. 92-4699
United States Court of Appeals,Fifth Circuit.
Jan 19, 1993
Appeal From: E.D.Tex., 787 F.Supp. 663
1
AFFIRMED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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16 F.3d 409
65 Fair Empl.Prac.Cas. (BNA) 1888
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Evelyn M. FRANCIS, Plaintiff-Appellant,v.AMERICAN TELEPHONE & TELEGRAPH COMPANY, Defendant-Appellee.
No. 93-2148.
United States Court of Appeals, Fourth Circuit.
Submitted Dec. 30, 1993.Decided Jan. 19, 1994.
Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Hiram H. Ward, Senior District Judge. (CA-92-293-2)
Romallus O. Murphy, Greensboro, NC, for appellant.
M. Daniel McGinn, William P. H. Cary, Brooks, Pierce, Mclendon, Humphrey & Leonard, L.L.P., Greensboro, NC, for appellee.
M.D.N.C.
AFFIRMED.
Before WILKINS, LUTTIG, and WILLIAMS, Circuit Judges.
OPINION
PER CURIAM:
1
Evelyn M. Francis appeals from the district court's dismissal, pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6), of her Title VII, 42 U.S.C. Sec. 2000e-3 (1988), complaint. Finding no error, we affirm.
2
Upon finding reasonable cause to support Francis' allegations of retaliatory demotion and poor performance appraisals by her employer, American Telephone & Telegraph Company ("AT & T"), the Equal Employment Opportunity Commission ("EEOC") brought suit against AT & T on behalf of Francis. The EEOC and AT & T eventually reached a settlement, and the case was dismissed with prejudice by consent decree. Francis refused to participate in the settlement negotiations and never sought to intervene in those proceedings. Her subsequent attempt to pursue these same claims in a separate lawsuit resulted in the dismissal appealed herein.
3
Francis concedes that this case is controlled by an earlier in banc decision of this Court: "We read Sec. 706(f)(1) [of Title VII, 42 U.S.C. Sec. 2000e-5(f)(1) (1988),] in these circumstances to preclude suits by individuals who are charging parties, but who have not intervened in the pending EEOC action in their behalf, once the EEOC action has been concluded by a consent decree." Adams v. Proctor & Gamble Mfg. Co., 697 F.2d 582, 583 (4th Cir.1983) (in banc), cert. denied, 465 U.S. 1041 (1984). However, Francis requests reversal of that decision.
4
Because this panel cannot overrule the decision of a prior panel in this Circuit, Brubaker v. Richmond, 943 F.2d 1363, 1381-82 (4th Cir.1991), or an in banc rehearing by this Court, see Ross v. Reed, 704 F.2d 705, 707 (4th Cir.1983), aff'd, 468 U.S. 1 (1984), we must refuse Francis' request. Moreover, contrary to Francis' contention, the Eleventh Circuit's decision in Riddle v. Cerro Wire & Cable Group, Inc., 902 F.2d 918 (11th Cir.1990), neither repudiates nor warrants reversal of Adams. Hence, we find the district court properly relied on Adams as grounds for dismissing Francisn' action, and affirm that result. 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.
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STATE OF MICHIGAN
COURT OF APPEALS
PEOPLE OF THE STATE OF MICHIGAN, UNPUBLISHED
July 19, 2018
Plaintiff-Appellant,
v No. 339688
Wayne Circuit Court
LIDIA ELENA TALABA, also known as LIDIA LC No. 17-002654-01-FH
ELENA TALBA,
Defendant-Appellee.
Before: BORRELLO, P.J., and M. J. KELLY and BOONSTRA, JJ.
PER CURIAM.
The prosecution appeals by right the circuit court’s order granting defendant’s motion to
dismiss the charges of conspiracy to commit a legal act in an illegal manner, MCL 750.157a,1
and fraudulent access to a computer (less than $200), MCL 752.794. We affirm in part, reverse
in part, and remand for further proceedings.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
Police were called to a Secretary of State (SOS) office in Brownstown, Michigan after
receiving a report that a man had changed his clothes in the parking lot and appeared to have
secreted on his person a device from which wires protruded. Defendant was found inside her
parked vehicle, which contained audio and video transmitting equipment; the subject of the
report, Artan Sherifi, was found inside the SOS office with a camera under his shirt and a
wireless earpiece. Sherifi (whose primary language is Albanian) told police that he had paid
defendant to help him cheat on an examination that was required by the SOS to obtain a
1
MCL 750.157a applies both to conspiracies “to commit an offense prohibited by law” and to
conspiracies “to commit a legal act in an illegal manner.” Although the information does not list
the specific subsection of MCL 750.157a under which defendant was charged, the information
describes the charge as “LEGAL ACT/ILLEGAL MANNER” and asserts that offense is a felony
punishable by up to 5 years imprisonment and a fine of not more than $10,000, which comports
with the proscribed conduct and punishment listed in MCL 750.157a(d) (which applies to “[a]ny
person convicted of conspiring to commit a legal act in an illegal manner”).
-1-
commercial driver’s license (CDL). Defendant was charged with (1) conspiracy to commit a
legal act in an illegal manner and (2) fraudulent access to a computer. Defendant waived her
right to a preliminary examination, and was bound over to the circuit court. Defendant filed a
motion with the circuit court to dismiss the charges, asserting that she had not done anything
illegal and that no computer was involved. The trial court agreed, granted defendant’s motion,
and entered an order dismissing the case without prejudice, holding that the prosecution’s theory
for the conspiracy charge was legally insufficient, and holding with respect to the fraudulent
access charge that a computer was not involved in defendant and Sherifi’s scheme. This appeal
followed. On appeal, the prosecution solely argues that the trial court abused its discretion when
it granted defendant’s motion to dismiss without holding an evidentiary hearing.
II. STANDARD OF REVIEW
The prosecution did not request an evidentiary hearing before the trial court, and did not
object to the trial court rendering a decision on defendant’s motion to dismiss without holding an
evidentiary hearing. The issue is therefore unpreserved; we review unpreserved issues for plain
error. See People v Carines, 460 Mich 750, 763; 597 NW2d 130 (1999). “To avoid forfeiture
under the plain error rule, three requirements must be met: 1) error must have occurred, 2) the
error was plain, i.e., clear or obvious, 3) and the plain error affected substantial rights.” Id. The
last requirement mandates a showing of prejudice, meaning that the error must have affected the
outcome of the proceedings. Id.
III. ANALYSIS
The prosecution does not specifically challenge the trial court’s dismissal of the charges
against defendant, but argues instead that the trial court should not have dismissed the charges
without first holding an evidentiary hearing. The prosecution points out that, as a result of the
procedure employed by the trial court, its ruling was made in the absence of any evidentiary
record and was instead based only on hearsay statements offered by the parties. We disagree
with the prosecution’s challenge with respect to the trial court’s dismissal of the conspiracy
charge, but agree with respect to the dismissal of the fraudulent access to a computer charge.
The trial court may dismiss criminal charges over an objection by the prosecution only if
it is permitted by statute, or where the evidence is insufficient to support the charges. People v
Williamson, 138 Mich App 397, 399; 360 NW2d 199 (1984). In considering a motion to
dismiss, the trial court must decide whether the evidence introduced at the time the motion was
made, viewed in the light most favorable to the prosecution, is sufficient for a reasonable person
to conclude that all of the elements of the charged crimes were established beyond a reasonable
doubt. People v Wright, 99 Mich App 801, 818; 298 NW2d 857 (1980).
Relying on People v Kenan, 144 Mich App 201; 375 NW2d 389 (1985), the prosecution
argues that the trial court abused its discretion when it granted defendant’s motion to dismiss
without holding an evidentiary hearing. In Kenan, the prosecution appealed the trial court’s
order dismissing two drug charges against the defendant. Id. at 202. The defendant was bound
over as charged after two preliminary examinations were held. Id. At a pretrial conference, the
defendant moved to dismiss the charges because he had valid prescriptions for the drugs he
possessed. Id. Defense counsel indicated that he had spoken to the defendant’s physician, and
-2-
that he had a letter from the physician stating that the defendant had chronic illnesses and had a
prescription for the drugs. Id. at 203. After reviewing the letter, the trial court dismissed the
charges. Id. The prosecution objected, arguing that the validity of the prescriptions was a
question for the trier of fact, moved for reconsideration, and requested an evidentiary hearing.
Id. The trial court denied the motion for reconsideration, and the prosecution appealed. Id.
On appeal, this Court agreed with the prosecution that the trial court had used an
improper procedure. Id. We noted that two preliminary examinations had been held, after which
the magistrate had found probable cause to bind the defendant over for trial. Id. The defendant
did not argue that the magistrate had abused her discretion in finding probable cause, and the
trial court made no such finding. Id. Rather, the trial court effectively held an unnoticed bench
trial at which defense counsel “testified” to hearsay “evidence,” and presented written hearsay
“evidence” in the form of the physician’s letter. Id. at 203-204. The prosecution had no
opportunity to cross-examine any witnesses. Id. at 204. This Court determined that “[i]f a
magistrate must only consider evidence which is legally admissible before making a finding of
probable cause, . . . it makes no sense to allow a lesser evidentiary standard on a motion to
dismiss.” Id. The “proper procedure” would have been for the trial court to hold an evidentiary
hearing at which the physician could testify and copies of the defendant’s prescriptions could be
admitted. Id. Or, the trial court could have denied defendant’s motion to dismiss, and the
physician could have testified at trial. Id. This Court reversed the trial court’s dismissal of the
charges in Kenan, ordered the reinstatement of the charges, and remanded the case to the trial
court. Id.
The facts of Kenan differ in some respects from the facts at hand; most notably, the
prosecution in Kenan objected to the use of hearsay evidence before the trial court and requested
an evidentiary hearing. Id. at 203. Preliminary examinations also had been held. Id. However,
Kenan does state that a trial court should only consider legally admissible evidence before ruling
on a motion to dismiss. Id.
We conclude that the trial court did not plainly err by dismissing the conspiracy charge
against defendant. The information and the prosecution’s filings in the trial court indicate that
the conspiracy charge was premised on defendant and Sherifi’s conspiracy to cheat on the CDL
examination, with the goal of circumventing certain federal regulations concerning the issuance
of a CDL, most notably the requirement that a licensee must understand the English language.2
The prosecution’s theory was not that defendant and Sherifi conspired to commit “an offense
prohibited by law.”3 See MCL 750.157a. Rather, the prosecution repeatedly characterized the
2
See 49 CFR 391.11; MCL 257.303(e).
3
We note that, had the basis for the conspiracy charge been that defendant and Sherifi had
conspired to commit the offense of fraudulent use of a computer (less than $200), MCL 752.794,
then it could not have sought (as it did in this case) a felony conspiracy conviction punishable by
up to five years imprisonment or a fine of not more than $10,000, because the fraudulent use of a
computer offense was punishable by imprisonment for not more than 93 days or a fine of not
more than $600, MCL 752.797(1)(a), and MCL 750.157a(c) provides that “[i]f commission of
-3-
alleged conspiracy as a conspiracy to “commit a legal act in an illegal manner,” MCL
750.157a(d), stating more than once its belief that the violation of MCL 750.157a was completed
when defendant and Sherifi agreed to the scheme to cheat on the examination and that the
alleged “illegal manner” was the contravention of federal regulations concerning a commercial
driver’s license holder’s English proficiency. Indeed, in response to defendant’s motion to
dismiss, the prosecution explicitly stated that “[t]he unlawful [manner] 4 was the circumvention
of 49 CFR 391.11 and MCL 257.303(e).” That circumvention was accomplished by the effort to
cheat on the licensing test.5
the offense prohibited by law is punishable by imprisonment for less than 1 year, except [for
situations involving illegal gambling or wagering], the person convicted under this section shall
be imprisoned for not more than 1 year nor fined more than $1,000.00, or both such fine and
imprisonment.” See People v Seewald, 499 Mich 111, 118; 879 NW2d 237 (2016) (noting that
the penalties for conspiring to commit an illegal act “roughly track” the penalties for the offense
itself, while a conspiracy to commit a legal act in an illegal manner is a five-year felony
“regardless of whether the ‘illegal manner’ would constitute a felony or misdemeanor if charged
as a substantive offense.”)
4
Specifically, the prosecution stated, “[D]efendant is charged with Conspiracy to commit a
lawful act in an unlawful manner. . . . The lawful act ultimately to be accomplished was the
receipt of a Commercial Driver’s License. The unlawful act was the circumvention of 49 CFR
391.11 and MCL 257.303(e).” In context, it is clear that the prosecution meant “unlawful
manner” rather than “unlawful act.”
5
It is important to note that, prior to oral argument, the prosecution at no time contended to the
trial court or this Court that the “illegal manner” was the alleged fraudulent access to a computer,
MCL 752.794, that was the subject of Count II of the information. Indeed, defendant anticipated
that the prosecution might take such a position, arguing in her motion to dismiss that “If the State
relies on Count 2 as the basis for the illegal manner, then this argument fails . . . as no computer
was ever used prior to or during the alleged crime.” In response, the prosecution stated in full,
“The Second argument that count two fails as a basis for illegal manner as no computer was used
is in part valid. The information contains the wrong charging language. The correct charge
should be Attempt to Access a Computer system with the Intent to Defraud. Contrary to MCL
752.794; 752.979(1) and 750.92. The People would so move to amend Count 2.” However,
whether the correct charge was that of an attempt or a completed act is wholly irrelevant to
whether the alleged violation of (or attempt to violate) MCL 752.794 constituted the “illegal
manner” proscribed by MCL 750.157a. At no time did the prosecution posit that it did. To the
contrary, the prosecution argued that “[u]nlawful does not necessarily equate to criminal” and
that “[t]he unlawful act was the circumvention of 49 CFR 391.11 and MCL 257.303(e),” which
require “that an applicant must be able to read and speak the English Language sufficiently to
converse with the general public, to understand highway traffic signs and signals in the English
language, to respond to official inquiries, and to make entries on reports and records.” The
prosecution’s position is perhaps explained by the fact that any charging of an alleged violation
of (or attempt to violate) MCL 752.794 (less than $200) as the “illegal manner” proscribed by
-4-
The trial court determined that the prosecution’s theory of the case could not have legally
supported a conviction for such a conspiracy because “cheating on an examination by receiving
help from another is not ‘illegal,’ only immoral,” and because the act of cheating on the licensing
test (or of assisting Sherifi in cheating) was not, in itself, a violation of the federal regulations (or
state law) relating to the necessary qualifications for commercial drivers. The trial court noted
that, in describing the qualifications of a commercial motor vehicle driver (one of which is the
holding of a valid commercial motor vehicle operator’s license issued by a State, which in
Michigan may be accomplished under MCL 257.303 by successfully completing a licensing
test), 49 CFR 391.11 “describes a status or a state of being, not an ‘act’.” Consequently, the act
of cheating (or assisting Sherifi in cheating) was not illegal even though it could have assisted
Sherifi in obtaining a CDL for which he may not have been qualified, and even though it could
have facilitated consequences with respect to Sherifi’s licensure and potential future violation of
MCL 480.12d (“A person shall not operate a commercial motor vehicle unless he or she is
qualified to operate that vehicle.”). See also MCL 480.17(1) (“any person . . . who violates this
act . . . is responsible for a state civil infraction and may be ordered to pay a fine of not more
than $250.00 for each violation”).
In making its determination, the trial court did not resolve any disputed factual questions
or rely on legally inadmissible evidence; rather, it determined that, even if proven, the
prosecution’s allegations would not support the charge. Therefore, no rational juror could
conclude that the elements of conspiracy were met. Wright, 99 Mich App 818. The prosecution
does not explain how an evidentiary hearing would have altered this determination, and does not
provide a challenge to the trial court’s legal analysis. We therefore affirm the trial court’s
dismissal of the conspiracy charge as not plainly erroneous. See Carines, 460 Mich at 763.
However, we agree with the prosecution that the trial court committed plain error when it
dismissed the fraudulent access to a computer charge. The trial court, in dismissing that charge,
determined that none of the equipment used by defendant qualified as a “computer” under
MCL 752.792. That determination was a factual one, and was not based on admissible evidence;
in fact, in making its determination the trial court expressly adopted defense counsel’s
characterization of the device as a “high tech version of two cans and a string.” The trial court
also noted that MCL 752.94 provides that “a person shall not intentionally access or cause access
to be made to a computer program, computer, computer system, or computer network” for
certain proscribed purposes, and that MCL 752.792 defines each of those terms. However, the
MCL 750.157a would have converted a 93-day misdemeanor, see MCL 752.797(1)(a), into a 5-
year felony, see MCL 750.157a. See also Seewald, 499 Mich at 118. Nonetheless, at oral
argument, the prosecution abruptly shifted gears and argued that the “illegal manner” underlying
the conspiracy charge was the fraudulent use of a computer charge. The prosecution failed to
raise that issue on appeal, however, and we decline to consider this eleventh-hour alteration to
the prosecution’s argument. See MCR 7.212(C)(5); see also People v Anderson, 284 Mich App
11, 16; 772 NW2d 792 (2009) and People v King, 297 Mich App 465, 474; 824 NW2d 258
(2012).
-5-
trial court engaged in no analysis of the statutory definitions, or of how the “evidence”
comported with (or failed to comport with) those definitions.
As we noted in Kenan, 114 Mich App at 204, the proper procedure would have been for
the trial court to hold an evidentiary hearing, or alternatively to allow the charge to proceed to a
trial at which the parties could present evidence. Therefore, the trial court erred when it granted
defendant’s motion to dismiss the fraudulent access to a computer charge.6 This was a plain
error that affected the outcome of the proceedings. See Carines, 460 Mich at 763. Accordingly,
we reverse the portion of the trial court’s order dismissing the fraudulent access to a computer
charge and reinstate that charge.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
/s/ Stephen L. Borrello
/s/ Michael J. Kelly
/s/ Mark T. Boonstra
6
As noted, the prosecution expressed its desire to amend the information to reflect a charge of
attempted fraudulent access to a computer. Because the trial court dismissed the case, it does not
appear that the information was ever amended. We therefore reinstate Count II of the
information as filed; the prosecution may seek to amend the information before the trial court in
the usual manner if it still desires to do so.
-6-
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796 F.2d 1475
Medrano-Gillv.White
86-7543
United States Court of Appeals,Fourth Circuit.
7/29/86
1
E.D.Va.
AFFIRMED
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777 N.W.2d 423 (2010)
PEOPLE of the State of Michigan, Plaintiff-Appellee,
v.
Hugh Thomas DIXON, Defendant-Appellant.
Docket No. 139866. COA No. 293166.
Supreme Court of Michigan.
January 29, 2010.
Order
On order of the Court, the application for leave to appeal the September 2, 2009 order of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court.
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505 S.E.2d 611 (1997)
202 W.Va. 548
Thomas E. KERNS, an individual, Plaintiff Below, Appellant,
v.
SLIDER AUGERING & WELDING, INC., a West Virginia Corporation; The Salem Tool Company, an Ohio Corporation; Salem Tool, Inc., a Kentucky Corporation; 92 Coal Corp., a West Virginia Corporation; and S & M Glass, Inc., a West Virginia Corporation, Defendants Below, Appellees.
SLIDER AUGERING & WELDING, INC., Third-Party Plaintiff Below, Appellee,
v.
STEAR AUGER MINING, INC., a Corporation; General Electric Company, a Corporation; and Boyer Equipment Co., a Corporation, Third-Party Defendants Below, Appellees.
S & M GLASS, INC., Third-Party Plaintiff Below, Appellee,
v.
GENERAL ELECTRIC COMPANY, a Corporation, Third-Party Defendant Below, Appellee.
No. 24017.
Supreme Court of Appeals of West Virginia.
Submitted October 14, 1997.
Decided December 16, 1997.
*613 E. William Harvit, Shinaberry & Meade, Charleston, Bradley Oldaker, Wilson & Bailey, Weston, for the Appellant.
James A. Liotta, Tharp, Liotta, Janes & Yokum, Fairmont, for Appellee Slider Augering & Welding, Inc.
David K. Schwirian, Pauley, Curry, Sturgeon & Vanderford, Charleston, for Appellee 92 Coal Corp.
Harold K. Sklar, McNeer, Highland, McMunn & Varner, Clarksburg, for Appellee S & M Glass, Inc.
*614 Carol Marunich, Furbee, Amos, Webb & Critchfield, Fairmont, for Appellee Stear Auger Mining, Inc.
Steven R. Hardman, Bowles Rice McDavid Graff & Love, Parkersburg, for Appellee General Electric Company.
M. Claire Winterholler, Meyer, Darragh, Buckler, Bebenek & Eck, Charleston, for Appellee Boyer Equipment Co.
*612 PER CURIAM:[1]
This action is before this Court upon an appeal of the final orders of the Circuit Court of Marion County entered on July 9, 1996, and November 12, 1996. The appellant, Thomas Kerns, an employee of appellee, Slider Augering and Welding, Inc. (hereinafter "Slider"), was injured in a mining accident while he was performing auger mining operations for appellee, 92 Coal Corporation (hereinafter "92 Coal"). Pursuant to the final orders, the circuit court granted summary judgment in favor of the appellees.
This Court has before it the petition for appeal, the designated record, and the briefs and argument of counsel. For the reasons stated below, this Court is of the opinion that appellant has failed to make a showing that factual evidence exists to support the requirements of W. Va.Code, 23-4-2(c)(2)(ii)(B) and (D) [1991]. This Court is also of the opinion that appellant has failed to making a showing that factual evidence exists to prove the theories of failure to provide a reasonably safe place to work, general negligence, joint venture, and negligent hiring. Accordingly, we affirm the decisions of the circuit court.
I.
This case arises out of an explosion that occurred on September 10, 1991, during auger mining operations at the Coontz No. 1 Mine in Barbour County. As a result of this explosion, the appellant was seriously and permanently injured. The auger mining operations were being performed by Slider as an independent contractor hired by 92 Coal, the corporation which owned and operated the mine. Slider was formed in 1988 by its sole shareholder, Thomas Slider, for the purpose of conducting auger mining operations as a contract miner. The appellant was hired by Mr. Slider as the auger operator.[2]
The September incident was actually the second explosion to occur at the mine.[3] The first explosion occurred on July 23, 1991, also during auger mining operations. Both explosions were investigated by the United States Department of Labor, Mine Safety and Health Administration (hereinafter MSHA). After the first explosion, MSHA issued a report which concluded that "the auger operator and auger helper were burned because they were in direct line with the flames and force which came out of the auger hole." MSHA issued a citation to Slider stating it was in violation of 30 C.F.R. 77.1504(c) by having workers in direct line with the auger hole while coal was being cut. In order to abate the citation, appellant, on behalf of Slider, consulted with both MSHA and the State Department of Labor to construct a guard/shield on the auger machine to protect the operator in the event of future ignition. Thereafter, auger mining operations resumed at the mine until the second explosion.
The second explosion happened in the Red Stone seam near where the first explosion occurred. When Slider resumed operations *615 after the first explosion, it began augering in the Pittsburgh seam. However, sometime prior to the second explosion, Slider began augering again in the Red Stone seam. According to the MSHA investigative report, on the morning of the second explosion, 92 Coal's mine foreman completed an examination of the auger site around 6:30 a.m. and found no hazards. At 7:00 a.m., Slider began its day shift, but a rainstorm postponed augering operations until approximately 8:00 a.m. Operations then proceeded normally until around 10:30 a.m., when 92 Coal's foreman returned to the site to perform the on-shift examination of conditions. The foreman left the area finding no percentage of methane and no hazards. Operations resumed and continued until around 12:30 p.m., when the auger machine hit something hard and stalled. Fire, smoke, and coal dust exploded immediately from the hole.
MSHA concluded that the second explosion was caused in the same manner as the previous explosion. Both explosions resulted from the ignition of flammable methane and/or dust. However, no citations were issued after the second explosion.
Appellant filed suit after the second explosion claiming that Slider acted with "deliberate intention" as set forth in the provisions of W. Va.Code, 23-4-2(c)(2)(ii). Appellant also alleged that 92 Coal was liable under theories of failure to provide a reasonably safe place to work, general negligence, joint venture, and negligent hiring of an incompetent contractor.[4] Both Slider and 92 Coal filed motions for summary judgment. The circuit court concluded that with respect to Slider, appellant was unable to make a showing that factual evidence existed to support all of the requirements to establish "deliberate intention" under W. Va.Code, 23-4-2(c)(2)(ii). Specifically, the court found that appellant was unable to show subjective realization on the part of Slider of the existence of an unsafe working condition and that Slider intentionally exposed appellant to an unsafe working condition. With regard to 92 Coal, the court concluded that appellant was unable to show that factual evidence existed to support the elements necessary to prove failure to provide a reasonably safe place to work, general negligence, joint venture, or negligent hiring of an incompetent contractor. Therefore, 92 was also granted summary judgment as reflected in the final orders.
II.
SLIDER AUGERING & WELDING, INC.
As previously mentioned, appellant seeks to hold Slider liable for his injuries on the basis of "deliberate intention" pursuant to W. Va.Code, 23-4-2(c)(2)(ii). In syllabus point 2 of Mayles v. Shoney's Inc., 185 W.Va. 88, 405 S.E.2d 15 (1990), this Court observed that: "A plaintiff may establish `deliberate intention' in a civil action against an employer for a work-related injury by offering evidence to prove the five specific requirements provided in W. Va.Code, 23-4-2(c)(2)(ii) (1983)." See also syl. pt. 2, Sias v. W-P Coal Co., 185 W.Va. 569, 408 S.E.2d 321 (1991); syl. pt. 2, Blevins v. Beckley Magnetite, Inc., 185 W.Va. 633, 408 S.E.2d 385 (1991). Specifically, the plaintiff must show:
(A) That a specific unsafe working condition existed in the workplace which presented *616 a high degree of risk and a strong probability of serious injury or death;
(B) That the employer had a subjective realization and an appreciation of the existence of such specific unsafe working condition and of the high degree of risk and the strong probability of serious injury or death presented by such specific unsafe working condition;
(C) That such specific unsafe working condition was a violation of a state or federal safety statute, rule or regulation, whether cited or not, or of a commonly accepted and well-known safety standard within the industry or business of such employer, which statute, rule, regulation or standard was specifically applicable to the particular work and working condition involved, as contrasted with a statute, rule, regulation or standard generally requiring safe workplaces, equipment or working conditions;
(D) That notwithstanding the existence of the facts set forth in subparagraphs (A) through (C) hereof, such employer nevertheless thereafter exposed an employee to such specific unsafe working condition intentionally; and
(E) That such employee so exposed suffered serious injury or death as a direct and proximate result of such specific unsafe working condition.
W. Va.Code, 23-4-2(c)(2)(ii) [1991].[5]
Following extensive discovery in this case, Slider moved for summary judgment contending that appellant had not presented sufficient evidence to establish "deliberate intention" under the five elements listed above. After conducting a hearing on the motion, the circuit court concluded that appellant had failed to make a showing that factual evidence exists to support the elements of subjective realization and intentional exposure found in subparagraphs (B) and (D), respectively, of W. Va.Code, 23-4-2(c)(2)(ii). Accordingly, the circuit court granted summary judgment in favor of Slider.[6]
Pursuant to Rule 56 of the West Virginia Rules of Civil Procedure, summary judgment is required when the record shows 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." In syllabus point 3 of Aetna Casualty & Surety Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963), this Court held: "A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." See also syl. pt. 3, Evans v. Mutual Mining, 199 W.Va. 526, 485 S.E.2d 695 (1997); syl. pt. 1, McClung Investments, Inc. v. Green Valley Community Public Service Dist., 199 W.Va. 490, 485 S.E.2d 434 (1997). More recently, we have observed that:
Summary judgment is appropriate if, from the totality of the evidence presented, the record could not lead a rational trier of fact to find for the nonmoving party, such as where the nonmoving party has failed to make a sufficient showing on an essential element of the case that it has the burden to prove.
Syl. pt. 2, Williams v. Precision Coil, Inc., 194 W.Va. 52, 459 S.E.2d 329 (1995). See also syl. pt. 2, Cottrill v. Ranson, 200 W.Va. 691, 490 S.E.2d 778 (1997); syl. pt. 2, McGraw v. St. Joseph's Hospital, 200 W.Va. 114, 488 S.E.2d 389 (1997). In syllabus point 1 of Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994), this Court stated that: "A circuit court's entry of summary judgment is reviewed de novo." See also syl. pt. 4, Dieter Engineering Services, Inc. v. Parkland Development, Inc., 199 W.Va. 48, 483 S.E.2d 48 (1996); syl. pt. 1, Smith v. Stacy, 198 W.Va. 498, 482 S.E.2d 115 (1996).
Appellant asserts that summary judgment was not appropriate because the evidence *617 shows that Slider had knowledge that both the location where the mining was occurring and the equipment were unsafe[7] thereby satisfying the subjective realization requirement. Appellant further asserts that the intentional exposure requirement has been met because Mr. Slider harassed him to go back to work and told him to make repairs to the auger machine as cheaply as possible.
In syllabus point 3 of Blevins, we held:
Given the statutory framework of W.Va. Code §§ 23-4-2(c)(2)(i) and (ii), (1983, 1991) which equates proof of the five requirements listed in W. Va.Code § 23-4-2(c)(ii) with deliberate intention, a plaintiff attempting to impose liability on the employer must present sufficient evidence, especially with regard to the requirement that the employer had a subjective realization and an appreciation of the existence of such specific unsafe working condition and the strong probability of serious injury or death presented by such specific unsafe working condition. This requirement is not satisfied merely by evidence that the employer reasonably should have known of the specific unsafe working condition and of the strong probability of serious injury or death presented by that condition. Instead, it must be shown that the employer actually possessed such knowledge.
In this case, we find that no genuine issue of material fact exists as to whether Slider subjectively realized and appreciated the existence of an unsafe working condition. As set forth above, the record shows that Slider was only issued one citation following the first explosion. Once appellant, on behalf of Slider, designed and constructed a guard on the auger machine to protect the operator in the event of a future explosion, MSHA permitted operations to resume. Obviously, if MSHA and its experts had been aware of an unsafe condition, Slider would not have been allowed to return to work. The deposition testimony in the record indicates that everyone involved including the investigators and the appellant thought that the first explosion was a "freakish accident." The record also reveals that Mr. Slider's mining experience prior to the date of the first explosion was minimal. Mr. Slider relied upon MSHA's experts as well as the appellant regarding safety matters following the first explosion. In fact, appellant was authorized to shut down the job if he deemed it necessary for safety reasons. It is apparent that MSHA had no subjective realization as evidenced by its actions. Consequently, it would be virtually impossible for appellant to prove subjective realization on the part of Slider.
Appellant is also unable to prove intentional exposure. According to appellant's own deposition testimony, it was his choice to return to work and resume augering operations in the Red Stone seam. Appellant testified that Mr. Slider told him it was his decision as to whether to return to the same job site or look for a new job where Slider could auger coal. Appellant also testified that Mr. Slider did not participate in the decision to return to the Red Stone seam because he was out of the country at that time. Thus, the evidence disproves intentional exposure as well as subjective realization. Accordingly, the circuit court did not err in granting summary judgment in favor of Slider.
92 COAL CORP.
As previously noted, appellant also filed his cause of action against 92 Coal alleging that it failed to provide a reasonably safe place for appellant to work. This Court has recognized that: "The owner or occupier of premises owes to an invitee such as a non-employee workman or an independent contractor *618 the duty of providing him with a reasonably safe place in which to work and has the further duty to exercise ordinary care for the safety of such persons." Syl. pt. 2, Sanders v. Georgia-Pacific Corp., 159 W.Va. 621, 225 S.E.2d 218 (1976). See also syl. pt. 2, Taylor v. Sears, Roebuck & Co., 190 W.Va. 160, 437 S.E.2d 733 (1993); syl. pt. 6, Pasquale v. Ohio Power Co., 187 W.Va. 292, 418 S.E.2d 738 (1992). However, we have also generally recognized that the owner who provides a reasonably safe place to work cannot be held liable unless the owner continues to exercise control over the workplace. In syllabus point 2 of Henderson v. Meredith Lumber Co., 190 W.Va. 292, 438 S.E.2d 324 (1993), we explained:
The goal of W.Va.Code 21-3-1 [1937] et seq. is to assure workers a reasonably safe workplace. The legislature placed such a responsibility on the employer and the owner. The employer's duty is directly related to the employment activity that is controlled by the employer and the owner's duty is limited to providing a reasonably safe workplace, unless the owner continues to exercise control of the place of employment.
In syllabus point 3 of Henderson, we further advised: "When the owner of a place of employment provides a reasonably safe workplace and exercises no control thereafter, the owner has complied with the responsibilities imposed under W.Va.Code, 21-3-1 [1937]."[8] In syllabus point 3 of Taylor we held that: "The `reasonably safe place to work' theory may not be used against the owner of a place of employment when the owner exercises no control over the equipment provided by the contractor for use by the contractor's employees."
92 Coal claims that it exercised no control over any equipment used by Slider in its auger operations. We agree. Slider purchased its auger mining equipment before it began working at the Coontz mine. 92 Coal was not involved in Slider's daily operations and it did not participate in constructing the guard that was placed on the auger machine following the first explosion.
The record shows that the actions of 92 Coal were limited to merely indicating to Slider where to auger the coal. Appellant contends that this is evidence that 92 Coal exercised control over Slider's work. In response, 92 Coal asserts that a natural part of hiring someone to do a job is directing where it is to be performed. In Taylor, the plaintiff, a carpenter employed by Mellon-Stuart Company, the contractor constructing a Sears Automotive Center building, was injured when he fell from scaffolding. Id. at 161, 437 S.E.2d at 734. Although the plaintiff argued that Sears maintained sufficient supervision over the work to have prevented the independent contractor from violating safety regulations, the evidence indicated that Sears' control over the construction was "negligible." Id. at 163, 437 S.E.2d at 736. In the case before this Court, the trial judge found that the evidence was not sufficient to show that 92 Coal failed to provide a reasonably safe workplace. We conclude that the circuit court did not err in granting summary judgment in favor of 92 Coal as to the issue of whether 92 Coal failed to provide a reasonably safe work place.[9]
*619 Appellant next contends that 92 Coal is liable because it was involved in a joint venture with Slider to mine coal. In syllabus point 2 of Price v. Halstead, 177 W.Va. 592, 355 S.E.2d 380 (1987), this Court held:
A joint venture or, as it is sometimes referred to, a joint adventure, is an association of two or more persons to carry out a single business enterprise for profit, for which purpose they combine their property, money, effects, skill, and knowledge. It arises out of a contractual relationship between the parties. The contract may be oral or written, express or implied.
See also syl. pt. 2, Johnson v. State Farm Mut. Auto. Ins. Co., 190 W.Va. 526, 438 S.E.2d 869 (1993). The record in this case indicates that the relationship between Slider and 92 Coal was that of an independent contractor. Although it is unclear whether a written contract existed, it appears that there was an agreement whereby 92 Coal agreed to pay Slider $8.50 per ton of coal produced plus fuel. There is no evidence that Slider and 92 Coal agreed to share profits and losses. Furthermore, appellant's own liability expert testified that in his opinion there was no joint ventureship between Slider and 92 Coal. Accordingly, we find no merit to this assignment of error.
Appellant also contends that 92 Coal is liable because it hired a contractor that was not qualified to perform the augering operations. Appellant asserts that if 92 Coal had simply inquired, it would have learned that Mr. Slider had no augering experience and that appellant had little experience. The record shows that appellant approached the president of 92 Coal and negotiated the contract on behalf of Slider. After inducing 92 Coal to hire Slider, appellant cannot now assert a negligent hiring claim against it. Accordingly, we find no merit to this assignment of error.
Based upon all of the above, this Court is of the opinion that the circuit court committed no error in concluding that the appellant failed to present sufficient evidence under requirement (B) concerning subjective realization and requirement (D) concerning intentional exposure of W.Va.Code, 23-4-2(c)(2)(ii). This Court is also of the opinion that the circuit court committed no error in concluding that appellant failed to show that evidence exists to prove that 92 Coal exercised control over appellant's work at the mine. Finally, this Court is of the opinion that the circuit court correctly concluded that appellant cannot prove general negligence, joint venture, or negligent hiring. Accordingly, the orders of the Circuit Court of Marion County entered on July 9, 1996, and November 12, 1996, are affirmed.
Affirmed.
STARCHER, J., dissents and would reverse the trial judge's granting of summary judgment.
NOTES
[1] We point out that a per curiam opinion is not legal precedent. See Lieving v. Hadley, 188 W.Va. 197, 201 n. 4, 423 S.E.2d 600, 604 n. 4 (1992) ("Per curiam opinions ... are used to decide only the specific case before the Court; everything in a per curiam opinion beyond the syllabus point is merely obiter dicta .... Other courts, such as many of the United States Circuit Courts of Appeals, have gone to non-published (not-to-be-cited) opinions to deal with similar cases. We do not have such a specific practice, but instead use published per curiam opinions. However, if rules of law or accepted ways of doing things are to be changed, then this Court will do so in a signed opinion, not a per curiam opinion.").
[2] The record indicates that the appellant was also the job foreman. He negotiated the contract with 92 Coal to perform its augering operations and generally ran the day to day operations of Slider.
[3] Appellant was also injured in the first explosion. He received burns to his stomach and arms.
[4] Appellant also filed suit against Salem Tool Company, an Ohio corporation, Salem Tool, Inc., a Kentucky corporation, and S & M Glass, Inc., a West Virginia corporation. Stear Auger Mining, Inc., General Electric Company, and Boyer Equipment Company were later named as third party defendants. At the hearing on Slider and 92 Coal's motions for summary judgment, the Court also considered a motion for summary judgment filed by Boyer Equipment Company; a motion for partial summary judgment or a separate trial filed by Stear Auger Mining, Inc.; a motion for declaratory judgment filed by TIG Insurance Company; and a motion to dismiss claims for contribution to third party complaints filed by General Electric Company. Because Slider and 92 Coal's motions were granted, the court found that the motions filed by Boyer Equipment Company and Stear Auger Mining, Inc., were moot and the third-party claims against them were dismissed. The motion filed by TIG Insurance Company was denied. The Court concluded that General Electric's motion to dismiss claims for contribution was moot as to the third party complaint of Slider; however, the same motion with respect to the third party complaint of S & M Glass, Inc. was denied. In his petition for appeal, appellant does not assign as error the court's rulings with respect to these additional parties.
[5] W.Va.Code, 23-4-2 was amended in 1994. However, those amendments are not relevant to this case. Moreover, the specific language of W.Va.Code, 23-4-2(c)(2)(ii), as set forth above, has remained unchanged.
[6] We note that the circuit court made no findings with respect to the requirements of subparagraphs (A), (C), and (E) of W.Va.Code, 23-2(c)(2)(ii). Accordingly, those issues are not before this Court.
[7] We note that with regard to W.Va.Code, 23-4-2(c)(2)(ii)(A), appellant claims that two unsafe working conditions existed which presented a high degree of risk and strong probability of serious injury or death. First, he asserts that the location of the mining operation was unsafe as a result of the prior explosion. The record indicates that the second explosion occurred in close proximity to the first explosion. Secondly, appellant asserts that the equipment, i.e. the auger machine, created an unsafe working condition because he was still in direct line with the bore hole as he operated the machine even though a guard/shield had been installed. Appellant testified during his deposition that he thought the guard/shield was a "joke," and he never believed it would protect him in the event of another explosion.
[8] W.Va.Code, 21-3-1 [1937] provides, in pertinent part:
Every employer shall furnish employment which shall be reasonably safe for the employees therein engaged and shall furnish and use safety devices and safeguards, and shall adopt and use methods and processes reasonably adequate to render employment and the place of employment safe, and shall do every other thing reasonably necessary to protect the life, health, safety, and welfare of such employees[.]
Every employer and every owner of a place of employment ... shall so construct, repair and maintain the same as to render it reasonably safe.
[9] It appears from the record that appellant asserted a general negligence claim incorporating all prior allegations in the complaint and alleging that the negligence of all of the defendants acting singularly, concurrently, and/or in combination caused or contributed to appellant's injury. In granting summary judgment to 92 Coal on this issue, the circuit court found that 92 Coal's "advice" as to where and how to conduct the augering operations could not constitute actionable negligence. It is difficult to determine from the record whether the trial judge treated appellant's negligence claim separately from his claim of failure to provide a reasonably safe place to work. In any event, both claims are based on appellant's allegation that 92 Coal advised Slider regarding its augering operations. Inasmuch as we affirm the circuit court's decision concerning failure to provide a reasonably safe place to work, it follows that we affirm the circuit court's decision regarding appellant's general negligence claim.
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705 S.E.2d 344 (2010)
RAYMOND
v.
NC POLICE BENEVOLENT ASS'N, INC., et al.
No. 230PA10.
Supreme Court of North Carolina.
November 5, 2010.
Kenneth R. Hunt, Asheville, for N.C. Police Benevolent Ass'n et al.
Frank J. Contrivo, Asheville, for Langdon B. Raymond.
*345 Katherine Lewis Parker, for North Carolina Advocates for Justice et al.
Joseph M. McGuinness, William J. Johnson, General Counsel, for National Association of Police Organizations.
The following order has been entered on the motion filed on the 3rd of November 2010 by Plaintiff for Extension of Time to File Brief:
"Motion Allowed by order of the Court in conference this the 5th of November 2010."
Plaintiff shall have up to and including the 24th day of November 2010 to file and serve his/her brief with this Court.
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610 F.Supp.2d 66 (2009)
William H. ARMSTRONG, Plaintiff,
v.
Timothy GEITHNER, et al., Defendants.
Civil Action No. 07-1963 (JR).
United States District Court, District of Columbia.
April 27, 2009.
*68 Kevin E. Byrnes, Grad, Logan & Klewans, P.C., Falls Church, VA, for Plaintiff.
Gerald Alan Role, Carmen M. Banerjee, U.S. Department of Justice, Washington, DC, for Defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
JAMES ROBERTSON, District Judge.
William Armstrong is a former special agent for the Treasury Inspector General for Tax Administration (TIGTA). After a troubled period of his employment there, he applied for a new position in the Department of Agriculture. That application was torpedoed by anonymous letters that revealed to USDA that Armstrong had been under investigation within TIGTA. Armstrong sued the Secretary of the Treasury, his former supervisor Rodney Davis, and unnamed TIGTA employees, alleging that the letters and their revelations violated his rights under the Privacy Act, 5 U.S.C. § 522(a), and asserting various common law torts. These allegations were tried to the Court in two phases, on August 26, 2008, and on December 4, 2008. In that bench trial, Armstrong failed to establish that the information contained in the anonymous letters had been retrieved from a record held in a system of recordsthe necessary predicate of his Privacy Act claim. None of Armstrong's tort claims against Treasury or persons in their capacity as Treasury employees is cognizable under the Federal Tort Claims act. Judgment will accordingly be entered in favor of the defendants.
Background
In October 2006, when Armstrong was still employed at TIGTA, someone sent an anonymous letter to the Inspector General's Office accusing him of unlawfully accessing various records and computer databases. Dkt. # 31-5. That accusation triggered an internal TIGTA investigation, led by Rodney Davis.[1] Dkt. # 34-2 (16:3-24); Pl. Aff. ¶ 23. Armstrong's badge and credentials were taken, his use of a government-owned car was revoked, Pl. Aff. ¶ 25, he was escorted from the building, Dec. Tr. (34:9-13), and he was temporarily reassigned to the Technical Services and Firearms Division, Pl. Aff. at ¶ 25.[2]
Armstrong was not officially told of the reason for the investigation at first, but within the month a friend unaffiliated with the investigation advised him that it was for unauthorized access. Pl. Aff. ¶ 28. The record suggests that this information had become part of the gossip mill within TIGTA. Pl. Depo. 16:5-12; 19:16-24, 21:4-8; 22:12-23:23.[3]
On February 7, 2007, the U.S. Attorney's Office declined to prosecute Armstrong, Pl. MJ at 9, but TIGTA continued *69 its investigation. A few days later, Armstrong was interviewed by investigators and admitted to accessing the databases. Pl. Aff. ¶ 32. TIGTA did not immediately act on his admission because its investigation of the plaintiff was "lumped" together with other investigations. Pl. Aff. ¶ 40. In March 2007, the plaintiff began looking for another job, id. at ¶ 33, and on August 15, 2007, he was offered employment within USDA, id. ¶ 41. His new job was scheduled to begin on September 2, 2007. Id.
From around August 23 to August 27, 2007, six anonymous letters were sent to various individuals at USDA, all of them disclosing information about TIGTA's investigation of Armstrong. Compl. Exs. 1-6. After receiving them, USDA apparently "stayed," and thus effectively terminated, the employment offer it had made to Armstrong. Pl. MJ p. 13. On September 4, 2007 a TIGTA official informed Armstrong that a proposed recommendation had been made regarding the internal investigation. Pl. Aff. ¶ 49. The plaintiff agreed to a thirty day suspension and ultimately resigned from the agency. Id.
Armstrong then filed this action. His theory, until the first day of trial, was that a person or persons who had been involved in TIGTA's internal investigation must have written and sent the anonymous letters that unraveled his new job at USDA, and that, perforce, or perhaps res ipsa loquitur, the information must have come from a system of records within TIGTA. See, Compl. counts I-VI. It was revealed on the very eve of the trial, however, and confirmed by the perpetrator herself, who was called as the first witness at trial, that the sender of all the anonymous letters the first, accusatory letter to the TIGTA Inspector General and the six letters sent to hiring officials at USDAwas in fact Armstrong's fellow TIGTA investigator Karen Thompson. Aug. Tr. (20:6-7; 22:11-22). On the witness stand, Thompson categorically denied accessing any records and explained that she assembled the information in the letters from observation and surmise. Dec. Tr. (117:20:-25). I found her testimony to be generally "evasive, dissembling, and not credible," Aug. Tr. 120:4-8, suspended the trial, and allowed the plaintiff limited discovery to explore this new lead.
After three months, however, Armstrong had found no evidence that Thompson obtained her information from protected records. When the trial re-commenced, on December 4, 2008, he adduced the testimony of several subpoenaed witnesses, all TIGTA investigators, including Davis, Kelly Sopko, Davis' supervisor Michael Delgado, and Thompson's husband (and TIGTA agent) David Sutkus. Sutkus and Sopko, neither of whom were affiliated with the investigation of Armstrong, denied having accessed the files of TIGTA's internal investigation. Davis and Delgado denied divulging information about the investigation to Thompson or unauthorized third parties. The evidence also established that, because Armstrong was a supervisor, the records of his investigation, in order to protect them from unauthorized access, were not logged into the agency's database. Dec. Tr. (91:15-92:3). Thus, there was no trail or record of who, if anyone, may have accessed them.
Analysis
Counts 1-6 of Armstrong's complaint deal with the six letters sent to USDA, alleging that each of them was a violation of § 552a of the Privacy Act.[4] Count 7 is a *70 claim of libel, against Davis. Counts 8-12 allege that TIGTA is responsible under the Federal Tort Claims Act for the acts of its employees for intentional infliction of emotional distress, negligent infliction of emotional distress, false light, invasion of privacy, and intentional interference with prospective contractual relationships.
1. The Privacy Act Claims
Subject to exceptions that are not implicated here, under 5 U.S.C. § 552a(b) "[n]o agency shall disclose any record which is contained in a system of records by any means of communication to any person, or to another agency, except pursuant to a written request by, or with the prior written consent of, the individual to whom the record pertains." To succeed on a damages suit for unlawful disclosure a plaintiff must therefore show that: "(1) the information in question is a `record' contained within `a system of records;' (2) the agency improperly `disclosed' the information; (3) an adverse impact resulted from the disclosure; and (4) the agency's disclosure was willful or intentional." Krieger v. U.S. Dept. of Justice, 529 F.Supp.2d 29, 41 (D.D.C.2008). In general, "liability for nonconsensual disclosures is limited by the `rule of retrieval,' which requires that the information disclosed be `directly or indirectly retrieved from a system of records.'" Id. at 47 (quoting Fisher v. Nat'l Inst, of Health, et al., 934 F.Supp. 464, 473 (D.D.C.1996), aff'd without opinion, 107 F.3d 922, 1996 WL 734079 (D.C.Cir.1996)). "`[I]nformation derived solely from independent sources is not prohibited by the statute even though identical information may be contained in an agency system of records.'" Id. (quoting Fisher, 934 F.Supp. at 473 (quoting Thomas v. United States Dep't of Energy, 719 F.2d 342, 345 (10th Cir.1983)).
Armstrong adduced no evidence that the information in the letters came directly from records contained within a system of records. As a result, the theory of the plaintiff's case is essentially: (1) that Thompson's written anonymous complaint to TIGTA became a protected record once she sent it, so that she herself was prohibited from revealing its contents; and, (2) that the information in the letters was so detailed and specific that Thompson must have obtained itperforce, res ipsa loquiturfrom protected records.
In some instances, circumstantial evidence alone can support a finding that a disclosure came from a record. For example, in Doe v. U.S. Postal Service, 317 F.3d 339, 342-43 (D.C.Cir.2003), the panel found enough evidence to survive summary judgment in plaintiff's showing (I) that highly personal information included on a FLMA form was spread around shortly after the plaintiff submitted the form, and (ii) that the alleged disclosing party routinely reviewed such forms. The D.C. Circuit has also treated the retrieval rule more flexibly when the record in question was created by the party who disclosed it. Thus, the Privacy Act can be violated in the "peculiar" circumstance of "disclosure by an agency official of his official determination made on the basis of an investigation which generated a protected personnel record" even when it was unclear whether the disclosed "information [was] directly retrieved from a tangible recording." Bartel v. Federal Aviation Administration, et al., 725 F.2d 1403, 1408-09 (D.C.Cir.1984),
*71 The Bartel panel, however, carefully limited its holding to the facts of that case, Bartel, 725 F.2d at 1409, and the facts of the instant case are easily distinguished: Thompson's complaint initiated the investigation but was not the product of it; Thompson was never a member of the investigatory team; and her complaint was not a "determination" by a supervising official. Bartel does not render Thompson's disclosure of information in her complaint a Privacy Act violation (if, indeed, that is what she did).
The record of this case establishes nothing more than that Thompson collated what she knew from her own complaint, from her own observations and speculation and those of others, from the rumor-mill that apparently goes virtually unchecked at TIGTA, and from other non-covered sources. Thompson denies having accessed or viewed any of the plaintiff's personnel documents or records connected to his investigation documents and claims to have gleaned the information in her letters from observation and surmise. See generally, Aug. Tr. Her general evasiveness and unreliability as a witness does not operate as proof of the propositions that she denies, in the absence of any evidence that Thompson accessed relevant protected records, that it was a part of her duties to do so, or that anyone who did have access disclosed information to her from those records.
Even the most troubling and specific reference in Thompson's letterthat Armstrong had made an admission to investigatorsmore likely came from an unprotected source than from a record contained in a system of records. The individuals who investigated Armstrong may have inadvertently disclosed this information, or been overheard discussing the matter. Thompson, as she claimed, may have guessed that the plaintiff would admit improper access when confronted with the evidence against him, such as access logs. Or this could be a situation "where information was inadvertently leaked from a record, became part of general office knowledge, and some time later was disclosed purportedly as a matter within the discloser's personal knowledge." Bartel, 725 F.2d at 1410. The circumstantial evidence is simply too tenuous to provide the preponderance necessary to prove a Privacy Act violation.
2. The Tort Claims
Armstrong's libel claim became moot with Davis's dismissal. His other tort claimseven assuming that they are procedurally in order and that Thompson and others were acting within the scope of their employment (the defendant has not meaningfully contested those propositions)are either barred by 28 U.S.C. § 2680(h) or unsupported by the evidence.
The negligent infliction of emotional distress count was correctly withdrawn by the plaintiff as unsupported by the facts. False light claims have been generally recognized as "barred by the libel and slander exception" of § 2680(h). Edmonds v. U.S., 436 F.Supp.2d 28, 35 (D.D.C.2006) (citing Johnson v. Sawyer, 47 F.3d 716, 732 n. 34 (5th Cir.1995); Metz v. United States, 788 F.2d 1528, 1535 (11th Cir.1986)). The plaintiff rightly concedes that the prospective interference with a contractual relationship claim is also barred. Art Metal-U.S.A., Inc. v. U.S., 753 F.2d 1151 (D.C.Cir.1985). Although intentional infliction of emotional distress is not explicitly excluded from the FTCA, the IIED claim stemming from Thompson's acts cannot be sustained because it arises out of libel and interference with prospective contractual relationship claims. 28 U.S.C. § 2680 (barring "[a]ny claim arising out of ... libel, slander, ... or *72 interference with contract rights."); Kugel v. U.S., 947 F.2d 1504 (D.C.Cir.1991) ("In assessing the nature of [a] claim ... we must scrutinize the alleged cause of his injury."); see, Majano v. U.S., 545 F.Supp.2d 136, 147 (D.D.C.2008). To the extent that the plaintiff still alleges IIED based on a theory that TIGTA's investigation into the letters was designed to harm him through the dissemination of information, I find there is insufficient evidence to support either the requisite level of intent or extreme conduct, regardless of whether the relevant acts were employment related. See, Kassem v. Washington Hosp. Center, 513 F.3d 251, 255-57 (D.C.Cir. 2008). Last, the plaintiff has not articulated a coherent legal theory of liability for invasion of his seclusion that is supported by the evidence or case law and that isn't barred by § 2608(h).
* * *
By an order separate from these findings and conclusions, the Clerk will be directed to enter judgment for the defendant.
NOTES
[1] In 2003 the plaintiff conducted an internal investigation on Davis in connection with an incident where Davis lost his official credentials. Pl. Aff. ¶ 3. When Davis later became his supervisor, the plaintiff complained about Davis's managerial style and accused him of sleeping on duty. Dec. Tr. (95:14-16). Given this and other history between the two, the decision to assign Davis to investigate the plaintiff was odd.
[2] Although the assignment was ostensibly temporary, because of the events described in this memorandum, the plaintiff did not return to work as a supervisor at TIGTA. Dec. Tr. (89:25-902).
[3] There are numerous other references in the record about the existence of such a rumor mill, and about TIGTA employees, and others, possessing knowledge about the investigation derived from unknown sources. See, e.g., Dec. Tr. 8:23-9:23; 39:17-41:5; Compl. ¶ 34; Silvis Dep. (125:6-126:2).
[4] In his brief, Armstrong advances a number of arguments under the Privacy Act that go well beyond the allegations of his complaint, among them that the manner in which TIGTA stored the record of his investigation violated § 552a(g)(1)(D) of the Privacy Act and that, after Thompson sent her six letters to USDA, Delgado made prohibited disclosures when he spoke with a Ms. Horsley at the USDA and later sent a letter to her. These arguments are not germane to the matters before me and are not addressed in this memorandum.
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978 F.2d 1264
NOTICE: Eighth Circuit Rule 28A(k) governs citation of unpublished opinions and provides that they are not precedent and generally should not be cited unless relevant to establishing the doctrines of res judicata, collateral estoppel, the law of the case, or if the opinion has persuasive value on a material issue and no published opinion would serve as well.Deanna PRIDGEN, Appellant,v.Winston BURTON, Principal; Joel Denny, AssistantSuperintendent Elementary Education; The SchoolDistrict of Springfield, Appellees.
No. 91-3735.
United States Court of Appeals,Eighth Circuit.
Submitted: August 30, 1992.Filed: November 4, 1992.
Before JOHN R. GIBSON, BEAM, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
PER CURIAM.
1
Deanna Pridgen appeals from the district court's1 judgment in favor of defendants in her Title VII action alleging sex-based discrimination in employment. We affirm.
2
The Springfield R-12 School District (District) hired Pridgen as a probationary teacher in 1985. During the 1985-86 school year, Pridgen taught one kindergarten class at each of two schools, Cherokee and Mark Twain (Twain). Dr. Sandra Gray, the principal of Cherokee, and Sharon Hardecke, the principal of Twain, evaluated Pridgen's performance as less than satisfactory. The District renewed Pridgen's contract for the 1986-87 school year. Pridgen was assigned to teach second grade at Ed V. Williams elementary school (Williams). Winston Burton, the principal of Williams, conducted three evaluations of Pridgen-two formative and one summative. In preparation for the first formative evaluation, Pridgen submitted a lesson plan to Burton on a form provided by the District. Burton hand-copied her lesson plan onto a larger, more current form and discarded the original.
3
Burton observed Pridgen's social studies class in November 1986 and prepared the first formative evaluation. Burton had some concerns about her performance and suggested they conduct another formative evaluation on another subject at a later date. Pridgen agreed. In February 1987, Burton observed Pridgen's reading class and prepared a second formative evaluation. Burton again had a number of concerns and noted that, as a result of the evaluation, either an assistance team might be assigned to help Pridgen improve or her contract might not be renewed.
4
In March 1987, Burton prepared a summative evaluation based in part on the formative evaluations, classroom walk-throughs, substitute-teacher input, and parent input. Burton found that Pridgen met District standards in only five areas; she was rated "needs improvement" in nine areas, and in the remaining area she was rated "does not meet" standards. Although Pridgen refused to sign the evaluation, she did not file a rebuttal or grievance as was permitted. Burton recommended to his superiors that Pridgen's contract not be renewed; they concurred and made the same recommendation to the Springfield Board of Education. The Board voted not to renew Pridgen's contract.
5
Pridgen filed the instant action in May 1989. She claimed that her non-renewal was a result of sex-based discrimination, as evidenced by inaccurate and inconsistent performance evaluations and by sexist comments. At the three-day bench trial, Pridgen testified that Burton set out to "get rid of" her because she was a young single female who wore high-heeled shoes, drove a sports car, and preferred to use the title "Ms." instead of "Miss."
6
Pridgen testified that Burton made a number of comments to her, and to others about her, which she perceived to be sexist. Among other things, Burton: asked her if she were married and if she had any children; falsely told parents that she was divorced; commented on her high heels; saw a picture of her niece on her desk and remarked that he thought she had said she did not have any children; asked her if the flowers she received on her birthday were from her boyfriend; asked her if she were getting married over Christmas break; did not allow her to use the title "Ms." and required her to use "Miss" instead; referred to her car, a Camaro Z-28, as "racy"; told her that, as one of the few men in the building, it was his duty to scrape the ice off the windows of the female teachers' cars; and corrected one of the students that Pridgen should be referred to as "Miss," not "Ms."
7
Pridgen testified that two male teachers were evaluated differently during the following school year (1987-88), because they were allowed to teach the same subject at each evaluation whereas she had been required to teach different subjects.2 Pridgen also testified that other teachers received more feedback on their evaluations than she did. Pridgen devoted substantial portions of her trial testimony to disputing the evaluations she received from Gray, Hardecke, and Burton; in every instance when the principals had marked her as less than satisfactory, she gave reasons as to why those ratings were unfair or inaccurate. She also alleged that Burton had missed numerous deadlines mandated by the District in preparing her evaluations and in meeting with her to discuss them. Pridgen claimed that Burton had "frauded" her lesson plan by copying it to the second form.
8
Burton denied making the majority of the purportedly sexist comments Pridgen had ascribed to him. Burton admitted referring to Pridgen's high heels, but testified he had suggested only that-for safety reasons-she keep another pair of shoes for use on the playground. He testified that the sex or marital status of his teachers made no difference to him. He also testified that another teacher had had her class picture taken in his presence with a sign that read "Ms. Collins," and that the yearbook (which he supervised) referred to Pridgen as "Ms. Pridgen." Burton denied requiring Pridgen to use "Miss" on the sign for her class photograph. Burton testified that he was trying to be helpful when he copied Pridgen's lesson plan to the more current form, and that he had done the same thing for another teacher.
9
The district court granted judgment to Burton and the District. The court found that while Burton "failed to strictly adhere to the time deadlines prescribed therein, these evaluations were generally conducted in accordance with the Teacher Performance Evaluation Handbook produced by Springfield Public Schools." The district court also found that Burton did not act with a sex-based discriminatory intent when he transcribed Pridgen's lesson plan from the short form to the longer form. The court found that there was insufficient evidence to support a finding that Burton conducted evaluations of male teachers in a manner that displayed a predisposition towards them and a willingness to treat them more favorably; the court noted that there were no evaluations of female teachers from the 1987-88 school year to compare with those of the male teachers, and it was unclear whether Burton intentionally conducted more thorough evaluations for male teachers or whether he had improved the manner in which he conducted the evaluations as he worked with the new method.
10
The district court held that Pridgen had failed to meet her burden of proving a prima facie case of discrimination. The court held that "[t]here was little evidence which would support a finding that defendant Burton's low evaluations of plaintiff were the result of sex-based discrimination. A preponderance of evidence, on the other hand, supports a finding that defendant Burton was called upon to exercise his personal, subjective judgment about plaintiff's job skills and did so on the basis of legitimate, non-discriminatory considerations alone."
11
The district court did not err in finding that Pridgen had failed to demonstrate a prima facie case, and by a preponderance of the evidence the evaluations were based on legitimate and non-discriminatory considerations alone. We have carefully reviewed the transcript and record in this case and cannot conclude that these findings of fact of the district court were clearly erroneous.
12
Pridgen's remaining arguments lack merit. A Title VII litigant has no right to a jury trial. Headley v. Bacon, 828 F.2d 1272, 1277 (8th Cir. 1987). We conclude that the district court did not abuse its discretion in denying Pridgen's attempt to amend the complaint well after discovery had been completed. See Brown v. Wallace, 957 F.2d 564, 566 (8th Cir. 1992) (per curiam) (leave to amend may be denied to avoid undue prejudice to nonmoving party). The Civil Rights Act of 1991 may not be applied retroactively. Fray v. Omaha World Herald Co., 960 F.2d 1370, 1377-78 (8th Cir. 1992). Finally, Pridgen's argument that she was prejudiced when she was deposed without benefit of counsel is unpersuasive.
13
Accordingly, we affirm.
1
The Honorable Russell G. Clark, Senior United States District Judge for the Western District of Missouri
2
There was only one male teacher at Williams during the school year that Pridgen taught there, and he was not evaluated that year
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Case: 14-50948 Document: 00513061422 Page: 1 Date Filed: 06/01/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 14-50948 FILED
Summary Calendar June 1, 2015
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
JAVIER LEOPOLDO MARTINEZ-CRUZ,
Defendant - Appellant
Appeal from the United States District Court
for the Western District of Texas
USDC No. 2:13-CR-524
Before SMITH, BARKSDALE, and PRADO, Circuit Judges.
PER CURIAM: *
Javier Leopoldo Martinez-Cruz pleaded guilty to a single count of illegal
reentry after removal, in violation of 8 U.S.C. § 1326. The district court
imposed a sentence of 66 months’ imprisonment, which was within the
applicable advisory sentencing range under the Sentencing Guidelines.
Martinez challenges the substantive reasonableness of his sentence, asserting
it is greater than necessary to achieve the sentencing goals of 18 U.S.C.
* Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
Case: 14-50948 Document: 00513061422 Page: 2 Date Filed: 06/01/2015
No. 14-50948
§ 3553(a). (Martinez twice objected in district court to the court’s application of
the 16-level enhancement for being previously deported following a conviction
for a crime of violence, U.S.S.G. § 2L1.2(b)(1)(A)(ii); but, he does not raise this
issue here. He has, therefore, abandoned it.)
Although post-Booker, the Sentencing Guidelines are advisory only, and
a properly preserved objection to an ultimate sentence is reviewed for
reasonableness under an abuse-of-discretion standard, the district court must
still properly calculate the advisory Guidelines-sentencing range for use in
deciding on the sentence to impose. Gall v. United States, 552 U.S. 38, 51
(2007). In that respect, for issues preserved in district court, its application of
the Guidelines is reviewed de novo; its factual findings, only for clear error.
E.g., United States v. Cisneros-Gutierrez, 517 F.3d 751, 764 (5th Cir. 2008).
Martinez does not claim procedural error.
A within-Guidelines-sentencing range sentence is entitled to a
presumption of reasonableness. United States v. Alonzo, 435 F.3d 551, 554
(5th Cir. 2006). “The presumption is rebutted only upon a showing that the
sentence does not account for a factor that should receive significant weight, it
gives significant weight to an irrelevant or improper factor, or it represents a
clear error of judgment in balancing sentencing factors.” United States v.
Cooks, 589 F.3d 173, 186 (5th Cir. 2009).
As Martinez concedes, his claim that the presumption should not apply
because Guideline § 2L1.2 is not empirically based is foreclosed. E.g., United
States v. Mondragon-Santiago, 564 F.3d 357, 366–67 (5th Cir. 2009). (He
raises the issue only to preserve it for possible review in the future.) Likewise,
our court has rejected similar contentions to those made by Martinez that the
Guideline provisions are not based on “empirical data” because they “double
count” prior offenses, and because illegal reentry offenses are at most only
2
Case: 14-50948 Document: 00513061422 Page: 3 Date Filed: 06/01/2015
No. 14-50948
nonviolent international trespasses. See, e.g., United States v. Duarte, 569
F.3d 528, 529-31 (5th Cir. 2009); United States v. Juarez-Duarte, 513 F.3d 204,
212 (5th Cir. 2008).
The court heard and considered Martinez’ allocution, which included his
new understanding of the penalties for illegal reentry, his long-term residence
in the United States, and his desire to see his children. During sentencing, the
court noted Martinez’ criminal history, the violent nature of some of his
convictions (as referenced supra), and his disregard of warnings regarding
reentry. Martinez’ claims amount to a disagreement over the court’s weighing
of the § 3553(a) factors and are insufficient to rebut the presumption of
reasonableness that attaches to his sentence. E.g., Cooks, 589 F.3d at 186.
AFFIRMED.
3
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NUMBER 13-02-169-CR
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
WILLIAM RAY GEARHART, Appellant,
v.
THE STATE OF TEXAS, Appellee.
On appeal from the 105th District Court
of Kleberg County, Texas.
OPINION ON TRIAL COURT'S REQUEST TO RECONSIDER ABATEMENT ORDER
Before Chief Justice Valdez and Justices Rodriguez and Castillo
Opinion Per Curiam
On March 8, 2002, appellant William Ray Gearhart invoked our jurisdiction by
filing a timely notice of appeal, generally asserting his desire to appeal. See Bayless
v. State, 91 S.W.3d 801, 805-06 (Tex. Crim. App. 2002). While his appeal was
pending, the rules of appellate procedure applicable to criminal appeals were amended
effective January 1, 2003. (1) This Court has determined that the current rules apply to
all criminal cases on appeal as of the effective date of the amendments. Accordingly,
we abated all pending criminal appeals, including Gearhart's, and ordered the trial court
to prepare and supplement the record within fourteen days with certifications of each
defendant's right of appeal as required by current rule 25.2(a)(2). See Tex. R. App.
P. 25.2(a)(2).
The trial court has filed a request for us to reconsider our abatement order or,
alternatively, to provide additional time for the preparation and filing of the
certification. The trial court points out that: (1) the court of criminal appeals has not
ordered retroactive application of the amended rules; (2) the former rules applicable to
criminal appeals effectively preserved a defendant's rights; (3) the trial court's duties
in providing a certification of the right of appeal require review and examination of
each case; and (4) the form promulgated by the court of criminal appeals for use by
trial courts in preparing certifications of the right of appeal provide for signature by
prosecuting and defense counsel as well as by the defendant personally. Eloquently
describing scant resources and logistical impediments to its compliance with our order,
the trial court requests that we either rescind our decision to apply the current rules
to all pending criminal appeals because of the burden it imposes or provide additional
time for the trial court to review the cases subject to our abatement orders, prepare
the certifications, and obtain the necessary signatures.
In deciding to apply the current rules retroactively, we considered our pooled
experience as lawyers, trial judges, and appellate justices in addressing the continuing
and vexing problem of how a criminal appeal proceeds in Texas. We reviewed our
criminal docket. We analyzed the approaches taken by our sister intermediate
appellate courts to application of the current rules. We considered the administrative
burden that retroactive application of the current rules to pre-2003 cases would
impose on trial courts. After careful consideration, we decided that the current rules
of appellate procedure governing criminal appeals apply to all criminal cases pending
before this Court on January 1, 2003. We respectfully deny the trial court's request
to reconsider our abatement order. We grant its request for additional time to comply
as ordered below.
The trial court's reasoned request concerns us, however, and we note that the
abbreviated form promulgated by the court of criminal appeals for use by the bench
and bar in preparing certifications of the right of appeal does not contemplate certain
rights of appeal even "plea bargain" defendants enjoy in the State of Texas.
Accordingly, we take this opportunity to discuss, for the benefit of bench and bar in
preparing certifications of the right of appeal, the current boundaries of the shifting
landscape of criminal appeals in Texas.
I. THE RIGHT OF APPEAL IN CRIMINAL CASES
Texas law provides the defendant in a criminal case a statutorily created right
of appeal. Tex. Code Crim. Proc. Ann. art. 44.02 (Vernon 1979 & Supp. 2003). (2) Procedural rules govern when and how an appeal may proceed but may not enlarge,
abridge, or modify a legislatively granted right of appeal. Tex. Gov't Code
Ann. § 22.108 (Vernon Supp. 2003); Johnson v. State, 84 S.W.3d 658, 661 (Tex.
Crim. App. 2002).
II. WHEN APPELLATE COURT JURISDICTION IS INVOKED IN CRIMINAL CASES
A. The Necessity of a Timely Notice of Appeal
Both before and after January 1, 2003, the absence of a timely, written notice
of appeal prevents us from acquiring jurisdiction over a criminal appeal. See Tex. R.
App. P. 26.2 (Vernon Supp. 1997 & 2003) (imposing deadline for filing notice of
appeal in criminal cases); see also Tex. R. App. P. 26.3 (Vernon Supp. 1997 & 2003)
(imposing deadline and requirements for filing motion for extension of time to file
notice of appeal in criminal cases); see also Olivo v. State,
918 S.W.2d 519, 522 (Tex. Crim. App. 1996). An untimely notice of appeal cannot
be amended to invoke our jurisdiction. Pickens v. State, 105 S.W.3d 746, at *5 (Tex.
App.-Austin 2003, no pet. h.).
B. Amendment of Timely But Defective Notices of Appeal
Former rule 25.2(d) permitted a defendant to file an amended notice of appeal
to cure any defects in a timely, earlier filed notice. Tex. R. App. P. 25.2(d) (Vernon
Supp. 1997, amended effective January 1, 2003) (3); Bayless, 91 S.W.3d at 805-06.
Amendment of a timely notice of appeal is permitted any time before the defendant's
brief is filed. Bayless, 91 S.W.3d at 803 n.2.
Until Bayless, the Texas Court of Criminal Appeals addressed as a jurisdictional
issue the question presented by a general notice of appeal following a negotiated guilty
plea in a felony case. (4) In conforming with the directives of the court of criminal
appeals, as we must, in the past we have addressed as a jurisdictional issue the
question presented by a general notice of appeal following a negotiated plea in a felony
case. See, e.g., Ramirez v. State, 89 S.W.3d 222, 225 (Tex. App.-Corpus
Christi 2002, no pet.).
However, the court of criminal appeals now has directed that defects in timely
notices of appeal that do not affect whether the filed instrument is actually a notice
of appeal do not prevent us from acquiring jurisdiction. Bayless, 91 S.W.3d
at 803 n.2. Rather, defects in a timely notice of appeal limit only our review of the
issues the appellant raised on appeal, not our jurisdiction. Id. In other words, if a
defendant filed a general notice of appeal, "amendments to the notice can be made
any time prior to the filing of the defendant's brief." Id. at 806; see Sipple v. State,
98 S.W.3d 225, 226 (Tex. Crim. App. 2003) (per curiam) (reversing and remanding
for reconsideration in light of Bayless court of appeals' dismissal of appeal for want
of jurisdiction); see also Dawson v. State, 106 S.W.3d 388, at *2-*3 (Tex.
App.-Houston [1st Dist.] 2003, no pet. h.) (reaching merits of appeal after remand for
reconsideration in light of Bayless).
Thus, the question presented by a general notice of appeal that remained
unamended after the appellant's brief was filed was not whether we had jurisdiction
over the appeal, but whether we had the power to address the merits of the
appellant's claims. Rauscher v. State, 97 S.W.3d 148, 149 (Tex. Crim. App. 2003)
(per curiam); Bayless, 91 S.W.3d at 803 n.2. (5) Accordingly, once a criminal defendant
invokes our jurisdiction by filing a general notice of appeal, we then must determine
how the appeal may proceed. Since January 1, 2003, we turn to the certification of
the right to appeal, not the notice of appeal, to make that determination.
III. HOW A CRIMINAL APPEAL PROCEEDS
A. Applicable Appellate Rules
This case was pending before this Court on January 1, 2003, the effective date
of the 2003 amendments to the rules of appellate procedure applicable to criminal
appeals. The threshold question to address in a criminal appeal pending on the
effective date of amendments to the rules of appellate procedure is what version of
the applicable rules controls. We first must decide whether we apply the current rules
retroactively or prospectively from the effective date of the amendments. If
retroactively, we apply the amendments to all criminal appeals pending on the effective
date of the amendments. Also required is a decision about which event provides the
controlling date: entry of judgment or other appealable order, filing of a notice of
appeal, filing of appellant's brief, or some other event.
1. Application of the 2003 TRAP Amendments to Pending Criminal Appeals
Generally, rules altering procedure do not fall within the prohibition in the Texas
Constitution against retroactive application of laws that disturb vested, substantive
rights. Tex. Const. art. I, § 16; Ibarra v. State, 11 S.W.3d 189, 192 (Tex. Crim.
App. 1999). We note that former rule 25.2(b)(3), which replaced former
rule 40(b)(1) in 1997, applied to all appeals pending on the effective date of the
amendment unless "application would not be feasible or would work injustice."
Villanueva v. State, 977 S.W.2d 693, 694 (Tex. App.-Fort Worth 1998, no pet.) (per
curiam) (quoting Court of Criminal Appeals Final Approval, 60 Tex. B.J. 876 (Tex.
Crim. App. Aug. 1997)). As the trial court observed in its request for reconsideration
of our abatement order, the court of criminal appeals' order adopting the 2003
amendments provides no such direction.
Current rule 25.2(a)(2) mandates that "[t]he trial court shall enter a certification
of the defendant's right of appeal in every case in which it enters a judgment of guilt
or other appealable order." Tex. R. App. P. 25.2(a)(2) (Vernon Supp. 2003). Further,
current rule 25.2(d) mandates that an appeal "must be dismissed if a certification that
shows the defendant has the right of appeal has not been made part of the record
under these rules." Tex. R. App. P. 25.2(d) (Vernon Supp. 2003). (6) No certification of
the defendant's right of appeal in a criminal case was required by the former rules of
appellate procedure before January 1, 2003. Tex. R. App. P. 25.2(a)(2) (Vernon
Supp. 1997, amended effective January 1, 2003). (7) Therefore, trial courts have not
provided, nor have defendants requested preparation of, certifications of the right of
appeal in cases disposed of before the effective date of the amendment.
Nonetheless, after careful consideration, we have decided to apply the current
rules of appellate procedure governing how criminal appeals proceed to all criminal
cases pending before this Court on January 1, 2003. The next question we address
is what event commences an appeal for purposes of application of the 2003
amendments to the rules of appellate procedure.
2. Triggering Event
We already have noted that a timely general notice of appeal confers jurisdiction
on this Court. Bayless, 91 S.W.3d at 803 n.2. Therefore, we have decided that the
date of filing of the defendant's notice of appeal determines whether we apply the
2003 amendments to the rules of appellate procedure applicable to criminal cases.
Having determined which appellate rules apply, we now address, for the benefit of
bench and bar in preparing certifications of the right of appeal under the current rules,
the power we have to review issues raised by a criminal appeal. (8)
B. Limitations Imposed on Criminal Appeals before January 1, 2003
by Former Rule 40(b)(1) and Former Rule 25.2(b)(3)
For appeals commenced before January 1, 2003, Texas law limited a
defendant's right of appellate review following a plea entered in a felony case pursuant
to an agreed punishment recommendation if "the punishment assessed did not exceed
the punishment recommended by the prosecutor and agreed to by the defendant."
Tex. R. App. P. 25.2(b)(3) (Vernon Supp. 1997, amended effective January 1, 2003) (9);
Ramirez, 89 S.W.3d at 225. In that event, to comply with the extra-notice
requirements of former rule 25.2(b)(3), the notice of appeal must have: (1) specified
that the appeal was for a jurisdictional defect; (2) specified that the substance of the
appeal was raised by written motion and ruled on before trial; or (3) stated that the
trial court granted permission to appeal. Tex. R. App. P. 25.2(b)(3) (Vernon
Supp. 1997, amended effective January 1, 2003) (10); Ramirez, 89 S.W.3d at 225. This
provision of former rule 25.2(b)(3) was incorporated in part into the current rules
regarding preparation of certifications of the right of appeal. An "agreed punishment
recommendation" is still required before limitations on our review power apply.
1. What Constitutes an "Agreed Punishment Recommendation"
An agreement between the State and a defendant may be a plea bargain without
having as one of its terms an agreed punishment recommendation that is followed by
the trial court. Ramirez, 89 S.W.3d at 225 n.4. Any concession by the State in
exchange for the defendant's guilty plea creates a plea bargain. Id. Only a plea
bargain that incorporates an agreed recommendation as to punishment and is accepted
by the court, however, triggers restrictions on our review power. Id. We note that the
form promulgated by the court of criminal appeals for use by the bench and bar in
preparing certifications of the right of appeal does not differentiate between "plea
bargain" and "agreed punishment recommendation that the trial court followed." 2. Limitations on Review of Issues Not Enumerated in Former Rule 25.2(b)(3)
a. Limitation on Appellate Review of Voluntariness Issue
We have no power to review an appeal by a criminal defendant of issues
associated with the voluntariness of a felony plea entered pursuant to an agreed
punishment recommendation that the trial court followed. Cooper v. State,
45 S.W.3d 77, 81 (Tex. Crim. App. 2001). The court of criminal appeals reasoned:
Experience has shown us that most cases of involuntary pleas result from
circumstances that existed outside the record, such as
misunderstandings, erroneous information, impaired judgment, ineffective
assistance of counsel, and plea-bargains that were not followed or turn
out to be impossible of performance. The legislature reasonably
determined to eliminate a small number of meritorious appeals to prevent
a much larger number of meritless appeals.
This decision may be seen as even more reasonable when it is
remembered that meritorious claims of involuntary pleas may be raised
by other procedures: motion for new trial and habeas corpus. These
procedures are not only adequate to resolve claims of involuntary pleas,
but they are superior to appeal in that the claim may be supported by
information from sources broader than the appellate record.
Id. (footnote omitted).
b. Limitation on Appellate Review of Ineffective-Assistance-of-Counsel Issues
"The plain import of [former rule 25.2(b)(3)] is that appeals from plea-bargain
cases are limited to the situations set forth in the rule." Woods v. State,
108 S.W.3d 314, at *4-*5 (Tex. Crim. App. 2003). As with voluntariness issues, we
have no power to review an appeal by a criminal defendant of ineffective-assistance-of-counsel claims arising out of a felony plea entered pursuant to an agreed
punishment recommendation that the trial court followed. Id.
3. Compliance in Substance as Well as Form
It was not enough that the form of a notice of appeal filed before January 1,
2003 comply with the extra-notice requirements of former rule 25.2(b)(3). Flores v.
State, 43 S.W.3d 628, 629 (Tex. App.-Houston [1st Dist.] 2001, no pet.); Sherman
v. State, 12 S.W.3d 489, 492 (Tex. App.-Dallas 1999, no pet.). The record must
have substantiated the specific allegations in the notice of appeal. Woods,
108 S.W.3d 314, at *5; Flores, 43 S.W.3d at 629; Betz v. State,
36 S.W.3d 227, 228 (Tex. App.-Houston [14th Dist.] 2001, no pet.). Thus, the
record must have substantiated a lack of jurisdiction in the trial court if an appellant
specified in the notice of appeal pursuant to former rule 25.2(b)(3) that the appeal was
for jurisdictional defects. Woods, 108 S.W.3d 314, at *5; Betz, 36 S.W.3d at 228.
Similarly, the record must have contained written motions ruled on before trial if an
appellant specified in the notice of appeal that the appeal was pursuant to former
rule 25.2(b)(3)(B) or reflected the trial court's permission to appeal pursuant to former
rule 25.2(b)(3)(C). Betz, 36 S.W.3d at 228.
4. Exception for Errors Unrelated to Conviction
A defendant was not required to comply with the extra-notice provisions of
former rule 25.2(b)(3) to challenge issues unrelated to the conviction, including
asserted errors in the process by which the defendant was punished. Vidaurri v.
State, 49 S.W.3d 880, 883 (Tex. Crim. App. 2001); see May v. State,
106 S.W.3d 375, at *2 n.4 (Tex. App.-Corpus Christi 2003, no pet. h.) (applying
Vidaurri to appeal commenced after January 1, 2003 to hold requirements of current
rule 25.2(a)(2) inapplicable to claim of error in misapplication of mandatory sentencing
statute). We note that the form promulgated by the court of criminal appeals for use
by the bench and bar in preparing certifications of the right of appeal does not include
the exception for errors unrelated to the conviction.
5. Application to Appeals Following Imposition of Community Supervision
There are two kinds of community supervision. "Regular" community
supervision means placing a defendant under a continuum of programs and sanctions
for a specified period after conviction and sentencing, during which period imposition
of sentence is suspended in whole or in part. "Deferred adjudication" community
supervision means placing a defendant under a continuum of programs and sanctions
for a specified period before adjudicating guilt and, consequently, before sentencing.
Tex. Code Crim. Proc. Ann. art. 42.12, § 2(2) (Vernon Supp. 2003). Imposition and
revocation of both regular and deferred adjudication community supervision proceed
in the same way through imposition of terms and conditions, notice of revocation, and
revocation hearing. Tex. Code Crim. Proc. Ann. art. 42.12, §§ 3, 5(b), 21, 23
(Vernon Supp. 2003).
a. Application to Imposition of Community Supervision
An appeal from imposition of regular community supervision must be taken at
the time the trial court imposes the terms and conditions. Corley v. State,
782 S.W.2d 859, 860 (Tex. Crim. App. 1989). A felony defendant whose appeal
from the trial court's imposition of regular community supervision pursuant to an
agreed punishment recommendation that the trial court followed was concluded before
January 1, 2003 was required to file the particularized notice of appeal mandated by
former rule 25.2(b)(3). See Tex. R. App. P. 25.2(b)(3) (Vernon Supp. 1997, amended
effective January 1, 2003) (11); Manuel v. State, 994 S.W.2d 658, 661 (Tex. Crim.
App. 1991) (and cited cases).
Similarly, a defendant also must appeal the trial court's imposition of deferred
adjudication community supervision at the time it is ordered. Tex. Code Crim. Proc.
Ann. art. 44.01(j) (Vernon Supp. 2003); Nix v. State, 65 S.W.3d 664, 667 (Tex.
Crim. App. 2001); Manuel, 994 S.W.2d at 661-62. As with an appeal from
imposition of regular community supervision, a felony defendant who appealed from
the imposition of deferred adjudication community supervision pursuant to an agreed
punishment recommendation that the trial court followed also was required to file the
particularized notice of appeal required by former rule 25.2(b)(3). Woods v. State,
68 S.W.3d 667, 669 (Tex. Crim. App. 2002) (and cited cases).
b. Application to Community Supervision Revocation Proceedings
(1) Revocation of Regular Community Supervision
Section 23(b) of article 42.12 of the code of criminal procedure affords a
defendant an unrestricted right to appeal from an order revoking regular community
supervision, even if that community supervision was the result of an agreed
punishment recommendation. Tex. Code Crim. Proc. Ann. art. 42.12, § 23(b) (Vernon
Supp. 2003); Feagin v. State, 967 S.W.2d 417, 419 (Tex. Crim. App. 1998); Mitich
v. State, 47 S.W.3d 137, 140 (Tex. App.-Corpus Christi 2001, no pet.). The
restrictive proviso of former rule 25.2(b)(3) did not apply to a pre-January 1, 2003
appeal "attacking the propriety of orders revoking probation." See Feagin,
967 S.W.2d at 419 (interpreting former rule 40(b)(1), which was amended and
replaced in 1997 by former rule 25.2(b)(3)). A defendant appealing from revocation
of regular community supervision did not appeal from a judgment rendered on a plea
of guilty or nolo contendere under article 1.15 of the code of criminal procedure. See
Tex. R. App. P. 25.2(b) (Vernon Supp. 1997, amended effective January 1, 2003). (12)
A plea of true is not "a plea of guilty or nolo contendere under article 1.15 of the code
of criminal procedure." See id. In such circumstances, the agreed punishment
recommendation that the defendant and the State entered into was complete when the
trial judge originally placed the defendant on community supervision, and section 23(b)
of article 42.12 governs appeals from revocation of regular community supervision,
not former rule 25.2(b)(3). See Feagin, 967 S.W.2d at 419. Thus, an appeal
concluded before January 1, 2003 proceeded without limitation on our power to
review any errors raised by the appellant with regard to a regular community
supervision revocation proceeding, even revocations pursuant to an agreed punishment
recommendation. (13) See id.; see also Mitich, 47 S.W.3d at 140. As with the right to
appeal errors unrelated to conviction, the form promulgated by the court of criminal
appeals for use by the bench and bar in preparing certifications of the right of appeal
does not include the right to appeal from revocation of regular community supervision.
(2) Revocation of Deferred Adjudication Community Supervision
The process for revoking deferred adjudication community supervision is the
same as revocation proceedings in regular community supervision cases. See Tex.
Code Crim. Proc. Ann. art. 42.12, §§ 5(b), 21, 23(a) (Vernon Supp. 2003). However,
the resemblance between deferred adjudication and regular community supervision
revocation proceedings ends there. The distinction arises from the trial court's deferral
of a finding of guilt when imposing deferred adjudication community supervision. See
Tex. Code Crim. Proc. Ann. art. 42.12 § 5(b) (Vernon Supp. 2003). Appeal from the
revocation of deferred adjudication community supervision is strictly limited by
statute. Id.
(a) The Adjudication Decision
The code of criminal procedure expressly denies a defendant the right to appeal
a trial court's adjudication decision:
On violation of a condition of community supervision imposed under
Subsection (a) of this section, the defendant may be arrested and
detained as provided in Section 21 of this article. The defendant is
entitled to a hearing limited to the determination by the court of whether
it proceeds with an adjudication of guilt on the original charge. No appeal
may be taken from this determination. After an adjudication of guilt, all
proceedings, including assessment of punishment, pronouncement of
sentence, granting of community supervision, and defendant's appeal
continue as if the adjudication of guilt had not been deferred.
Id. (emphasis added). Thus, revocation of deferred adjudication community
supervision involves a component that proceedings revoking regular community
supervision do not: the adjudication decision. Issa v. State,
826 S.W.2d 159, 161 (Tex. Crim. App. 1992) (per curiam). Section 5(b) of
article 42.12 prohibits a defendant who has been adjudicated guilty of the original
charge from raising on appeal contentions of error in the adjudication decision.
Connolly v. State, 983 S.W.2d 738, 741 (Tex. Crim. App. 1999). The court of
criminal appeals has made it clear, "given the plain meaning" of section 5(b) of
article 42.12, that an appellant whose deferred adjudication probation has been
revoked and who has been adjudicated guilty of the original charge may not raise on
appeal contentions of error in the adjudication-of-guilt process. Id. Included within the
term "adjudication-of-guilt process" are challenges to sufficiency of the notice
contained in the terms and conditions of deferred adjudication probation, adequacy of
the State's notice of violation, and sufficiency of the evidence to support the trial
court's revocation decision. See id. (and cited cases).
Applying Bayless to limit our review power and not our jurisdiction, we conclude
that we do not dismiss for want of jurisdiction appeals to the trial court's adjudication
determination. See Bayless, 91 S.W.3d at 805-06. Rather, pursuant to the
prohibition in section 5(b) of article 42.12, we overrule any issue challenging the trial
court's adjudication determination, just as we would any other issue that the appellant
has procedurally waived. Tex. Code Crim. Proc. Ann. art. 42.12, § 5(b) (Vernon
Supp. 2003); see Allen v. State, 84 S.W.3d 413, 418 (Tex. App.-Fort Worth 2002,
no pet.) (Dauphinot, J., dissenting).
(b) The Assessment of Punishment and Pronouncement of Sentence
For the purpose of applying former rule 25.2(b)(3), when a prosecutor
recommended deferred adjudication in exchange for a defendant's plea of guilty or nolo
contendere, the trial court did not exceed that recommendation if, on proceeding to
an adjudication of guilt, the court later assessed any punishment within the range
allowed by law. Vidaurri, 49 S.W.3d at 885 (citing Watson v. State,
924 S.W.2d 711, 714 (Tex. Crim. App. 1996)). (16) Thus, former rule 25.2(b)(3)
controlled our review power over an appeal brought after an adjudication of guilt by
a defendant placed on deferred adjudication community supervision pursuant to an
agreed punishment recommendation. Tex. R. App. P. 25.2(b)(3) (Vernon Supp. 1997,
amended effective January 1, 2003); Tex. Code Crim. Proc. Ann. art. 42.12 § 5(b)
(Vernon Supp. 2003); Tex. Code Crim. Proc. Ann. art. 44.01(j) (Vernon Supp. 2003);
Woods, 68 S.W.3d at 669 (and cited cases). However, the extra-notice requirements
of former rule 25.2(b)(3) did not apply to an appeal from a judgment adjudicating guilt
when the issues raised by the appeal related to the punishment phase. See Kirtley v.
State, 56 S.W.3d 48, 51-52 (Tex. Crim. App. 2001) (citing Vidaurri, 49 S.W.3d
at 884).
Once the trial court adjudicates the guilt of a defendant on deferred adjudication
community supervision, the assessment of punishment, pronouncement of sentence,
and the defendant's appeal continue as if the adjudication of guilt had not been
deferred. Tex. Code Crim. Proc. Ann. art. 42.12, § 5(b) (Vernon Supp. 2003). Thus,
a defendant may appeal from a judgment adjudicating guilt when the issues raised by
the appeal relate not to the adjudication decision but to the punishment phase. See
id.; see also Kirtley, 56 S.W.3d at 51-52 (addressing claim of ineffective assistance
of counsel at punishment phase following adjudication of guilt). As with the right to
appeal errors unrelated to conviction and from revocation of regular community
supervision, the form promulgated by the court of criminal appeals for use by the
bench and bar in preparing certifications of the right of appeal does not include the
right to appeal issues related to the punishment phase following an adjudication of
guilt.
IV. CONCLUSION
We grant the trial court's request for additional time to prepare a certification
of Gearhart's right of appeal. Accordingly, pursuant to current rule 34.5(c)(1), this
Court requests supplementation of the record in this case within thirty days of the date
of this order to include a certification of Gearhart's right to appeal issues associated
with the assessment of his punishment and pronouncement of sentence following his
adjudication of guilt. Tex. R. App. P. 34.5(c)(1), 34.5(c)(2). We extend the original
period of abatement for an additional thirty days from the date of this opinion.
PER CURIAM
Publish.
Tex. R. App. P. 47.2(b).
Opinion delivered and filed
this 20th day of August, 2003.
1. For ease of reference throughout this order in referring to former and current rules of appellate
procedure, we refer to rules effective before January 1, 2003 as "former" and rules effective January 1,
2003 as "current."
2. As adopted in 1977, article 44.02 then read:
A defendant in any criminal action has the right of appeal under the rules
hereinafter prescribed, provided, however, before the defendant who has been convicted
upon either his plea of guilty or plea of nolo contendere before the court and the court,
upon the election of the defendant, assesses punishment and the punishment does not
exceed the punishment recommended by the prosecutor and agreed to by the defendant
and his attorney may prosecute his appeal, he must have permission of the trial court,
except on those matters which have been raised by written motion filed prior to trial.
This article in no way affects appeals pursuant to Article 44.17 of this chapter.
Tex. Code Crim. Proc. Ann. art. 44.02 (Vernon 1977), as amended by repeal of "proviso only" pursuant
to Acts 985, 69th Leg., ch. 685, § 4 by orders of the Texas Court of Criminal Appeals dated
December 18, 1985, 707-708 S.W.2d XXX-XXXI (Tex. Cases 1986), and April 10, 1986,
713-714 S.W.2d XXXIX-XXX (Tex. Cases 1986), adopting rule 40(b)(1) of the Texas Rules of Appellate
Procedure (effective September 1, 1986). Rule 40(b)(1) then read:
Appeal is perfected in a criminal case by giving timely notice of appeal; except,
it is unnecessary to give notice of appeal in death penalty cases. Notice of appeal shall
be given in writing filed with the clerk of the trial court. Such notice shall be sufficient
if it shows the desire of the defendant to appeal from the judgment or other appealable
order; but if the judgment was rendered upon his plea of guilty or nolo contendere
pursuant to Article 1.15, Code of Criminal Procedure, and the punishment assessed does
not exceed the punishment recommended by the prosecutor and agreed to by the
defendant and his attorney, in order to prosecute an appeal for a nonjurisdictional defect
or error that occurred prior to entry of the plea the notice shall state that the trial court
granted permission to appeal or shall specify that those matters were raised by written
motion and ruled on before trial. The clerk of the trial court shall note on copies of the
notice of appeal the number of the cause and the day that notice was filed, and shall
immediately send one copy to the clerk of the appropriate court of appeals and one copy
to the attorney for the State.
Tex. R. App. P. 40(b)(1) (Vernon Supp. 1986) as amended by Tex. R. App. P. 25.2(b), 948-949 S.W.2d
XCVI (Tex. Cases 1997) (effective September 1, 1997, amended 2003). Former rule 25.2(b) provided:
(b) Form and sufficiency of notice.
(1) Notice must be given in writing and filed with the trial court clerk.
(2) Notice is sufficient if it shows the party's desire to appeal from the
judgment or other appealable order, and, if the State is the appellant, the notice
complies with Code of Criminal Procedure article 44.01.
(3) But if the appeal is from a judgment rendered on the defendant's plea of guilty or nolo
contendere under Code of Criminal Procedure article 1.15, and the punishment assessed did not exceed
the punishment recommended by the prosecutor and agreed to by the defendant, the notice must:
(A) specify that the appeal is for a jurisdictional defect;
(B) specify that the substance of the appeal was raised by written
motion and ruled on before trial; or
(C) state that the trial court granted permission to appeal.
Tex. R. App. P. 25.2(b) (Vernon Supp. 1997) as amended by Tex. R. App. P. 25.2(a)(2), 90-91 S.W.3d
XXII (Tex. Cases 2003) (effective January 1, 2003). Current rule 25.2(a)(2) provides:
A defendant in a criminal case has the right of appeal under Code of Criminal Procedure
article 44.02 and these rules. The trial court shall enter a certification of the
defendant's right of appeal in every case in which it enters a judgment of guilt or other
appealable order. In a plea bargain case - that is, a case in which a defendant's plea
was guilty or nolo contendere and the punishment did not exceed the punishment
recommended by the prosecutor and agreed to by the defendant - a defendant may
appeal only:
(A) those matters that were raised by written motion filed and ruled
on before trial; or
(B) after getting the trial court's permission to appeal.
Tex. R. App. P. 25.2(a)(2) (Vernon Supp. 2003). Because we prefer simplicity, we cite throughout this
order to the text of each rule printed in Vernon's supplement published in the first year of the rule's
effective date.
3. Former rule 25.2(d) provided:
(d) Amending the Notice. An amended notice of appeal correcting a defect
or omission in an earlier filed notice may be filed in the appellate court at any time
before the appellate brief is filed. The amended notice is subject to being struck for
cause on the motion of any party affected by the amended notice. After the appellant's
brief is filed, the notice may be amended only on leave of the appellate court and on
such terms as the court may prescribe.
Tex. R. App. P. 25.2(d), 948-949 S.W.2d XCVI (Tex. Cases 1997) (effective September 1, 1997,
amended 2003). Current rule 25.2(f) provides:
(f) Amending the Notice. An amended notice of appeal or trial court's
certification of the defendant's right of appeal correcting a defect or omission in an
earlier filed notice or certification may be filed in the appellate court in accordance with
Rule 37.1, or at any time before the appealing party's brief is filed if the court of appeals
has not used Rule 37.1. The amended notice or certification is subject to being struck
for cause on the motion of any party affected by the amended notice or certification.
After the appealing party's brief is filed, the notice or certification may be amended only
on leave of the appellate court and on such terms as the court may prescribe.
Tex. R. App. P. 25.2(f) (Vernon Supp. 2003), 90-91 S.W.3d XXIII (Tex. Cases 2003) (effective
January 1, 2003). Current rule 37.1 provides:
If the appellate clerk determines that the notice of appeal or certification of
defendant's right of appeal in a criminal case is defective, the clerk must notify the
parties of the defect so that it can be remedied, if possible. If a proper notice of appeal
or certification of a criminal defendant's right of appeal is not filed in the trial court
within 30 days of the date of the clerk's notice, the clerk must refer the matter to the
appellate court, which will make an appropriate order under this rule or Rule 34.5(c)(2).
Tex. R. App. P. 37.1 (Vernon Supp. 2003), 90-91 S.W.3d XXVII (Tex. Cases 2003) (effective
January 1, 2003). Current rule 34.5(c) provides:
(c) Supplementation.
(1) If a relevant item has been omitted from the clerk's record, the
trial court, the appellate court, or any party may by letter direct the trial court
clerk to prepare, certify, and file in the appellate court a supplement containing
the omitted item.
(2) If the appellate court in a criminal case orders the trial court to
prepare and file findings of fact and conclusions of law as required by law, or
certification of the defendant's right of appeal as required by these rules, the
trial court clerk must prepare, certify, and file in the appellate court a
supplemental clerk's record containing those findings and conclusions.
(3) Any supplemental clerk's record will be part of the appellate
record.
Tex. R. App. P. 34.5(c) (Vernon Supp. 2003), 90-91 S.W.3d XXVI (Tex. Cases 2003) (effective
January 1, 2003). Again because we prefer simplicity, we cite throughout this order to the text of each
rule printed in Vernon's supplement published in the first year of the rule's effective date.
4. See, e.g., Johnson v. State, 84 S.W.3d 658, 659 (Tex. Crim. App. 2002) ("In this case we
reaffirm the rule that a defendant's 'general' notice of appeal from a plea-bargained conviction does not
invoke the jurisdiction of the Court of Appeals."); Woods v. State, 68 S.W.3d 667, 669 (Tex. Crim.
App. 2002) (holding that failure of appellant to follow former rule 25.2(b)(3) deprives appellate court
of jurisdiction over appeal); White v. State, 61 S.W.3d 424, 428-29 (Tex. Crim. App. 2001) (holding
that general notice of appeal does not invoke appellate jurisdiction over issues related to conviction);
Gearhart v. State, 870 S.W.2d 43, 46 (Tex. Crim. App. 1994) (holding that general notice of appeal
did not confer jurisdiction on court of appeals under former rule 40(b)(1)).
5. We conclude that an unamended general notice of appeal filed by a defendant before
January 1, 2003 after a felony plea pursuant to an agreed punishment recommendation presented a
waiver issue, not a question of jurisdiction. We note that treatment of compliance with the particularized
notice requirements of former rule 25.2(b)(3) as waiver rather than a jurisdictional issue is consistent
with the review of errors asserted by a defendant who pleaded guilty without the benefit of a negotiated
plea. See Ramirez v. State, 89 S.W.3d 222, 228 (Tex. App.-Corpus Christi 2002, no pet.) (quoting
Young v. State, 8 S.W.3d 656, 666-67 (Tex. Crim. App. 2000)) (holding that waiver by non-negotiated
guilty plea occurs "when the judgment of guilt was rendered independent of, and is not supported by,
the error.").
6. See note 3.
7. See note 2.
8. We assume, until directed otherwise by the court of criminal appeals, that the body of case
law interpreting appellate rules governing how criminal appeals proceed applies to the current rules.
9. See note 2.
10. See note 2.
11. See note 2.
12. See note 2.
13. Similarly, neither former rule 40(b)(1) nor former rule 25.2(b)(3) imposed limitations on notices
of appeal following misdemeanor pleas entered pursuant to an agreed punishment recommendation. See
Tex. R. App. P. 40(b)(1) (Vernon Supp. 1986) (repealed) (14)
14. Former rule 40(b)(1) provided:
(1) Appeal is perfected in a criminal case by giving timely notice of appeal;
except, it is unnecessary to give notice of appeal in death penalty cases. Notice of
appeal shall be given in writing filed with the clerk of the trial court. Such notice shall
be sufficient if it shows the desire of the defendant to appeal from the judgment or other
appealable order; but if the judgment was rendered upon his plea of guilty or nolo
contendere pursuant to Article 1.15, Code of Criminal Procedure, and the punishment
assessed does not exceed the punishment recommended by the prosecutor and agreed
to by the defendant and his attorney, in order to prosecute an appeal for a
nonjurisdictional defect or error that occurred prior to entry of the plea the notice shall
state that the trial court granted permission to appeal or shall specify that those matters
were raised by written motion and ruled on before trial. The clerk of the trial court shall
note on copies of the notice of appeal the number of the cause and the day that notice
was filed, and shall immediately send one copy to the clerk of the appropriate court of
appeals and one copy to the attorney for the State.
Tex. R. App. P. 40(b)(1), 707-708 S.W.2d LII-LIII (Tex. Cases 1986) (effective September 1, 1986,
amended effective September 1, 1997, amended effective January 1, 2003).
-
-
(15)
15. Former rule 25.2(b) provided:
(b) Form and Sufficiency of Notice.
(1) Notice must be given in writing and filed with the trial
court clerk.
(2) Notice is sufficient if it shows the party's desire to
appeal from the judgment or other appealable order, and, if the State is
the appellant, the notice complies with Code of Criminal Procedure
article 44.01.
(3) But if the appeal is from a judgment rendered on the
defendant's plea of guilty or nolo contendere under Code of Criminal
Procedure article 1.15, and the punishment assessed did not exceed the
punishment recommended by the prosecutor and agreed to by the
defendant, the notice must:
(A) specify that the appeal is for a jurisdictional
defect;
(B) specify that the substance of the appeal was
raised by written motion and ruled on before trial; or
(C) state that the trial court granted permission to
appeal.
Tex. R. App. P. 25.2(b), 948-949 S.W.2d (Tex. Cases) XCVI (effective September 1, 1997, amended
2003). Current rule 25.2 includes the followinging provisions:
(a) Rights to Appeal.
(1) Of the State. The State is entitled to appeal a court's
order in a criminal case as provided by Code of Criminal Procedure
article 44.01.
(2) Of the Defendant. A defendant in a criminal case has
the right of appeal under Code of Criminal Procedure article 44.02 and
these rules. The trial court shall enter a certification of the defendant's
right of appeal in every case in which it enters a judgment of guilt or
other appealable order. In a plea bargain case-that is, a case in which
defendant's plea is guilty or nolo contendere and the punishment did not
exceed the punishment recommended by the prosecutor and agreed to
by the defendant-a defendant may appeal only:
(A) those matters that were raised by written
motion filed and ruled on before trial; or
(B) after getting the trial court's permission to
appeal.
(b) Perfection of Appeal. In a criminal case, appeal is perfected by
timely filing a sufficient notice of appeal. In a death-penalty case,
however, it is unnecessary to file a notice of appeal.
(c) Form and Sufficiency of Notice.
(1) Notice must be given in writing and filed with the trial
court clerk.
(2) Notice is sufficient if it shows the party's desire to
appeal from the judgment or other appealable order, and, if the State is
the appellant, the notice complies with Code of Criminal Procedure
article 44.01.
(d) Certification of Defendant's Right of Appeal. If the defendant is the
appellant, the record must include the trial court's certification of the defendant's right
of appeal under Rule 25.2(a)(2). The certification should be part of the record when
notice is filed, but may be added by timely amendment or supplementation under this
rule or Rule 34.5(c)(1) or Rule 37.1 or by order of the appellate court under
Rule 34.5(c)(2). The appeal must be dismissed if a certification that shows the
defendant has the right of appeal has not been made part of the record under these
rules.
Tex. R. App. P. 25.2(a),(b),(c), and (d) (West 2003), 90-91 S.W.3d (Tex. Cases) XXII-XXIII (effective
January 1, 2003). For the text of current rules 34.5(c)(1) and 37.1, see supra note 2. Again, we apply
the rules in effect when appellant timely filed notice of appeal on ________________.
16. The court of criminal appeals limited Watson to this proposition in Vidaurri v. State,
49 S.W.3d 880, 884-85 (Tex. Crim. App. 2001) and Feagin v. State, 967 S.W.2d 417, 418 (Tex.
Crim. App. 1998).
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553 F.3d 27 (2009)
UNITED STATES of America, Appellee,
v.
Miguel ALMENAS, Defendant, Appellant.
No. 06-2513.
United States Court of Appeals, First Circuit.
Heard October 4, 2007.
Decided January 12, 2009.
*29 Claudia Leis Bolgen, with whom Bolgen & Bolgen, was on brief, for appellant.
Timothy Q. Feeley, Assistant United States Attorney, with whom Michael J. Sullivan, United States Attorney, was on brief, for appellee.
Before TORRUELLA, LIPEZ and HOWARD, Circuit Judges.
*30 HOWARD, Circuit Judge.
After pleading guilty to selling crack cocaine, Miguel Almenas was sentenced pursuant to a downward departure to 192 months' imprisonment, 43 months below the bottom of the guideline sentencing range ("GSR"). Almenas appeals his sentence. He argues primarily that the district court erroneously relied on his prior conviction for resisting arrest when sentencing him as a career offender. He also challenges both the reasonableness of his sentence and the court's use of prior convictions that he alleges had not been sufficiently proven. We reject all of Almenas's challenges and affirm his sentence.
I. Background
We provide the bulk of the facts here but include more where necessary for our discussion.
On three separate occasions in January of 2005, Miguel Almenas sold crack cocaine to an undercover DEA agent. The total amount sold was 136 grams. That April, he pled guilty to federal narcotics offenses in violation of 21 U.S.C. § 841(a)(1).
The pre-sentence report recommended that the career offender provision of the federal sentencing guidelines, U.S.S.G. § 4B1.1, govern Almenas's sentencing. The report determined that Almenas qualified as a career offender because he had two prior felony convictions each of which was either a crime of violence or a controlled substance offense: (1) a 1991 Massachusetts conviction for possession of cocaine with intent to distribute and (2) a 2000 Massachusetts conviction for resisting arrest.
Over Almenas's protest that the latter was not a crime of violence, the district court accepted the probation office's recommendation and categorized Almenas as a career offender. The court determined that Massachusetts's statutory definition of resisting arrest qualified the offense categorically as a "crime of violence" under the guidelines.
After arriving at the relevant GSR under the career offender provision 262 to 327 months the district court departed downward based on its conclusion that Almenas's criminal history category substantially over-represented the seriousness of his criminal history.[1] The new GSR had a low end of 235 months. The mandatory minimum was 120 months. The court then requested argument regarding whether either a further downward departure under U.S.S.G. § 5K2.0 based on Almenas's physical, mental and emotional conditions or a non-guideline sentence was in order.
After hearing these arguments, the court elected to depart downward under § 5K2.0 and imposed a sentence of 192 months' imprisonment. In brief (we will return to the details), the court stressed that a departure under § 5K2.0 was justified given Almenas's chronic neck pain and his mental and emotional condition, but that imposing only the mandatory minimum of 120 months, as Almenas requested, would fail to promote appropriate respect for the law. The court noted that it would impose the same sentence as a non-guideline sentence. This appeal followed.
II. Discussion
Almenas raises three challenges to his sentence. His first and primary challenge relates to the court's use of his prior resisting-arrest conviction to categorize him as a career offender for sentencing purposes.[2] This challenge has two parts. *31 He argues that his resisting-arrest conviction does not qualify him as a career offender because it is neither (1) a "prior felony conviction" nor (2) a "crime of violence." Almenas's second and third challenges regard the reasonableness of his sentence and the district court's use of his prior convictions to enhance his sentence where those convictions had not been proved to a jury or admitted by Almenas. Aside from his third argument, which we may summarily dispatch up front, we address his arguments sequentially.[3]
A. Use of resisting-arrest conviction for sentencing purposes
Whether a prior conviction qualifies as a predicate offense under U.S.S.G. § 4B1.1 is a question of law that we review de novo. United States v. Santos, 363 F.3d 19, 22 (1st Cir.2004).[4]
A defendant is categorized as a career offender if three criteria are met: (1) the court is sentencing the defendant for a felony that is either a crime of violence or a controlled substance offense; (2) the defendant was at least eighteen when he committed the felony; and (3) the defendant has been previously convicted of two unrelated felonies each of which was either a crime of violence or a controlled substance offense. U.S.S.G. § 4B1.1(a).
The focus in this case is on the third criterion. We conclude that the district court correctly determined that Almenas's prior resisting-arrest conviction qualified both as a "prior felony conviction" and as a "crime of violence." We address both determinations, and Almenas's challenges to them, in order.
1. Prior felony conviction
The Guideline commentary defines "prior felony conviction" as: "[A] prior adult federal or state conviction for an offense punishable by death or imprisonment for a term exceeding one year, regardless of whether such offense is specifically designated as a felony and regardless of the actual sentence imposed." U.S.S.G. § 4B1.2, cmt. n. 1.
Here, the district court properly determined that Almenas's resting arrest conviction was a "prior felony conviction" because under Massachusetts law, resisting arrest, a misdemeanor offense, carries a punishment of up to two and one-half years in a jail or the house of correction. See Mass. Gen. Laws ch. 268, § 32B (d).
Neither the fact that Massachusetts law categorizes resisting arrest as a misdemeanor, nor the fact that Almenas was not *32 actually imprisoned for a term exceeding one year, affects our analysis. A crime "punishable" by imprisonment for a term exceeding one year is a felony for purposes of the career offender provision, "regardless of whether such offense is specifically designated as a felony and regardless of the actual sentence imposed." See U.S.S.G. § 4B1.2, cmt. n. 1.
Almenas argues that a different section of the guidelines, § 4A1.2(c), suggests that resisting arrest is not a felony for purposes of the career offender provision. Section 4A1.2(c) details which prior sentences must be counted and which must be excluded for purposes of computing criminal history. It also cites "resisting arrest" as an example of a misdemeanor or petty offense and further notes that such offenses cannot be counted for purposes of computing criminal history if the sentence actually imposed was less than one year probation or thirty days in prison. Consequently, Almenas argues that because § 4A1.2(c) is made applicable to the career offender provision through § 4B1.2(c),[5] and because he received only a fine for his resisting-arrest conviction, his conviction cannot qualify as a "prior felony conviction." At the least, he contends, § 4A1.2(c)'s reference to resisting arrest as a misdemeanor or petty offense creates an ambiguity triggering the rule of lenity. Accordingly, he argues, we must resolve the ambiguity in his favor.
We disagree. Section 4A1.2(c)'s own language, when read in conjunction with another guideline section § 4A1.2(o) makes evident that Almenas's resisting-arrest conviction qualifies as a prior felony conviction. Section 4A1.2(c)'s first sentence reads, "Sentences for all felony offenses are counted," before going on to list "misdemeanor and petty offenses" such as resisting arrest. U.S.S.G. § 4A1.2(c) (emphasis added). When this language is read with reference to § 4A1.2(o), which provides that "for the purposes of [section] 4A1.2(c), a `felony offense' means any federal, state, or local offense punishable by death or a term of imprisonment exceeding one year, regardless of the actual sentenced imposed,"[6] any ambiguity is resolved. Resisting arrest qualifies as a "prior felony conviction" according to the career offender provision's guideline commentary and as a "felony offense" for purposes of § 4A1.2(c). In order for a resisting-arrest offense to qualify as a misdemeanor or petty offense for purposes of § 4A1.2(c), it would have to be punishable by imprisonment for a term under one year. Or, put differently, the offense would have to fall outside of the guideline definition of a felony. That is not the case here.
2. Crime of violence
Under the guidelines, an offense will qualify as a crime of violence if it is punishable by imprisonment for a term exceeding one year and either: (1) has as an element the "use, attempted use, or threatened use of physical force against the person of another" or (2) "is burglary of a dwelling, arson, or extortion, involves use *33 of explosives, or otherwise involves conduct that presents a serious potential risk of physical injury to another." U.S.S.G. § 4B1.2(a)(1), (2) (emphasis added). The underscored statutory language is referred to as either the "otherwise clause" or the "residual clause." United States v. Giggey, 551 F.3d 27, ___, 2008 WL 5274834 at * 5 (1st Cir.2008); United States v. Williams, 529 F.3d 1, 4 (1st Cir.2008).
To determine whether a defendant's prior offense falls within the guideline definition of a "crime of violence" we take a formal, categorical approach. Giggey, 551 F.3d at * ___, 2008 WL 5274834 at * 10; United States v. Winn, 364 F.3d 7, 9 (1st Cir.2004). This approach, depending on the offense at issue, has either one or two steps. The first step is always the same. We compare the legislature's definition of the relevant offense with the guideline definition of a "crime of violence." Id. This comparison "is restricted to the statutory definition . . . of the prior offense . . ., without regard to the particular facts underlying the conviction." United States v. Meader, 118 F.3d 876, 882 (1st Cir.1997); see also Giggey, 551 F.3d at * ___, 2008 WL 5274834 * 10. "If [we determine] that a violation of the statute in question necessarily involves each and every element of a violent crime, then the offense is deemed a crime of violence and [our] inquiry is at an end." Williams, 529 F.3d at 4. If, however, "the statute's text is broad enough to criminalize both violent and non-violent conduct," we must take another step to determine whether the defendant engaged in the crime's violent variety. Id.; United States v. Winter, 22 F.3d 15, 18 (1st Cir.1994). In so doing, we may "[examine] documents such as charging papers or jury instructions in order to flesh out a predicate offense inquiry." Winn, 364 F.3d at 9 (citation omitted); see also Shepard v. United States, 544 U.S. 13, 26, 125 S.Ct. 1254, 161 L.Ed.2d 205 (2005) (identifying documents to which a court may refer in such instances). The district court in this case concluded that the resisting-arrest statute criminalized only violent conduct and thus did not take the second step.
We start by considering the Massachusetts statutory definition of resisting arrest. The crime is defined as follows:
A person [resists arrest] if he knowingly prevents or attempts to prevent a police officer, acting under color of his official authority, from effecting an arrest of the actor or another by:
(1) using or threatening to use physical force or violence against the police officer or another; or
(2) using any other means which creates a substantial risk of causing bodily injury to such police officer or another.
Mass. Gen. Laws, ch. 268, § 32B.
The first method of resisting arrest fits squarely within the definition of a crime of violence. Under this method, a person resists arrest by "using or threatening to use physical force or violence." Id.; see U.S.S.G. § 4B1.2(a)(1).
The second method of resisting arrest does not explicitly involve the "use, attempted use, or threatened use of physical force" and therefore our focus turns to the residual clause. We must decide whether this method of resisting arrest, "involves conduct that presents a serious potential risk of physical injury to another." See U.S.S.G. § 4B1.2(a)(2).
Facially, the second method of resisting arrest falls safely within the residual clause. It invariably creates a "serious potential risk of physical injury to another" because, by its very definition, it creates a "substantial risk of causing bodily injury to a police officer or someone else." *34 See United States v. Hollis, 447 F.3d 1053, 1054-1055 (8th Cir.2006). But, after the Supreme Court's decision in Begay v. United States, ___ U.S. ___, 128 S.Ct. 1581, 170 L.Ed.2d 490 (2008), more analysis is needed. See Williams, 529 F.3d at 6.[7] After Begay, to fall within the residual clause, the offense at issue must both: (i) pose a degree of risk that is similar to the degree of risk posed by the enumerated offenses namely arson, burglary, extortion, and offenses involving the use of explosives and (ii) be similar "in kind" to those offenses. 128 S.Ct. at 1585; see also United States v. Herrick, 545 F.3d 53, 58 (1st Cir.2008). An offense will be similar "in kind" to the enumerated offenses if it "typically involve[s] purposeful, `violent,' and `aggressive' conduct." Id. at 1586 (citation omitted); Williams, 529 F.3d at 7 (citation omitted).
Even after Begay, the second method of resisting arrest still qualifies as a crime of violence under the residual clause. First, the crime poses a degree of risk roughly similar to the risk posed by the enumerated offenses. In fact, the degree of risk posed by both methods of resisting arrest is arguably greater than the risk posed by the enumerated offenses. Unlike the enumerated offenses, resisting arrest necessarily involves resisting the authority of a police officer, an official charged with defending the public. Because the police officer is duty-bound to effectuate the arrest, the offense engenders a significant risk of conflict and, concomitantly, a significant risk of injury. See United States v. Fernandez, 121 F.3d 777, 780 (1st Cir. 1997) (crime of simple assault and battery on a police officer presents a serious potential risk of injury in part because of likelihood officer will react and attempt to subdue offender).
Second, resisting arrest by this method involves purposeful, "violent," and "aggressive" conduct. The purposefulness requirement is easily met. Both methods of resisting arrest require the offender to act knowingly. See Begay, 128 S.Ct. at 1586 (crimes involving use of explosives are purposeful because "the word use . . . most naturally suggests a higher degree of intent than negligent or merely accidental conduct") (quoting Leocal v. Ashcroft, 543 U.S. 1, 9, 125 S.Ct. 377, 160 L.Ed.2d 271 (2004)) (some internal quotations omitted). And this method of resisting arrest is by its nature both "aggressive" and "violent" it involves a refusal to yield to a public official's exercise of authority and creates a substantial risk of injury. To cinch matters, we can say confidently that the nonpassive resisting arrest envisioned by the statute is at least as "aggressive" and "violent" as burglary. See Williams, 529 F.3d at 7 n. 7 ("Burglary, for instance, can be described as purposeful but not, at least in most instances, as purposefully violent or necessarily aggressive."). After all, when resisting arrest the offender is knowingly engaging in conflict with another.
Almenas, for his part, advances two arguments. First, he says that the district court should have at least proceeded to the second step of the categorical approach because the Massachusetts resisting-arrest statute effectively criminalizes both violent and non-violent conduct. The statute does so, he contends, because an "insubstantial use of force" is enough to convict a person under the statute. In support of this argument, *35 Almenas cites Commonwealth v. Maylott, 65 Mass.App.Ct. 466, 841 N.E.2d 717 (Mass.App.2006). In that case, a Massachusetts appeals court determined that a defendant's stiffening of his arm to avoid being handcuffed was sufficient to convict him for resisting arrest under either definition of the Massachusetts statute. Id. at 469-470, 841 N.E.2d 717.[8]
In light of our discussion above, we do not believe stiffening one's arm to avoid being handcuffed can be characterized as "non-violent," or, for that matter, "non-aggressive." Moreover, two Massachusetts cases, including Maylott itself, have concluded that such conduct was sufficient to create a substantial risk of injury to a police officer or someone else. See Maylott, 65 Mass.App.Ct. at 469-70, 841 N.E.2d 717 ("While the defendant's [stiffening of his arm] may not have overcome the police officers, the circumstances . . . present[ed] a substantial risk of injury to them."); see also Commonwealth v. Grandison, 433 Mass. 135, 741 N.E.2d 25 (2001) (holding that defendant's stiffening of his arm to avoid arrest was sufficient to convict him for resisting arrest because it created a "`substantial risk of bodily injury' to the police officers"). We agree with the analysis set forth in those cases and conclude that the force Almenas describes is sufficient to create a serious potential risk of injury to another.[9]
Almenas's second argument relies on Begay, and specifically, on Begay's requirement that the offense at issue be similar in kind to § 4B1.2(a)(2)'s enumerated offenses. He argues that resisting arrest is not similar "in kind" to those offenses because those offenses are all "property crime viewed as likely to result in collateral injury to persons." Resisting arrest, he notes, has nothing to do with property.
The distinction Almenas draws is immaterial. An offense will be similar "in kind" to the enumerated offenses if it "typically involves[s] purposeful, `violent,' and `aggressive' conduct" regardless of whether property is involved. See Begay, 128 S.Ct. at 1586. In fact, in Williams we concluded that even though the offense at issue had nothing to do with property it concerned the transport of a minor across state lines for prostitution it nonetheless was similar in kind to the enumerated offenses. 529 F.3d at 2, 7 (citation omitted).
*36 B. Reasonableness of Almenas's sentence
Almenas argues that even if the district court correctly categorized him as a career offender, his 192-month sentence is unreasonable. He contends that the court did not adequately explain the chosen sentence. In particular, he argues that the court's explanation suggests that it insufficiently considered factor (1) of § 3553(a) relating to the "history and characteristics of the defendant." Because Almenas failed to raise an objection to the sentencing procedure below, his challenge is governed by the plain error standard.[10]United States v. Gilman, 478 F.3d 440, 445 (1st Cir.2007).
Our review of sentences has two components. We must satisfy ourselves that the sentence imposed is both (i) procedurally sound[11] and (ii) substantively reasonable. Id. at 597; see also United States v. Martin, 520 F.3d 87, 92 (1st Cir.2008). Our focus in this case is on the procedural component. See Gall, 128 S.Ct. at 597 (noting that a court's failure to adequately explain the chosen sentence is a procedural error).
A district court's explanation for a chosen sentence must be "reasoned and case-specific." Gilman, 478 F.3d at 446. Though it must reflect that the court considered the § 3553(a) factors,[12]id. at 445, the court need not address these factors "one by one, in some sort of rote incantation when explicating its sentencing decision." United States v. Dixon, 449 F.3d 194, 205 (1st Cir.2006); see also United States v. Turbides-Leonardo, 468 F.3d 34, 40 (1st Cir.2006) (noting court should ordinarily identify the main factors upon which it relies) (citation omitted).[13]
*37 The district court's explanation is procedurally adequate. It reflects a thoughtful consideration of the relevant § 3553(a) factors including the first factor concerning the defendant's "history and characteristics." The court addressed Almenas's personal history, noting that he had "unfortunate circumstances," and extensively discussed his personal characteristics remarking, that Almenas "seem[ed] to have a combination of physical and mental disabilities" including "chronic neck pain," "chronic low back pain" and "[severe] depression and psychosis." In fact, the court referred to Almenas's personal history and characteristics as the motivating force behind its grant of a substantial downward departure under U.S.S.G. § 5K2.0. Additionally, the court touched on other § 3553(a) factors during its explanation. It noted that a lower sentence would fail to promote appropriate respect for the law, see § 3553(a)(2)(A), and that it was taking into account the guidelines' severe penalties for crack cocaine offenses. See § 3553(a)(4). In summarizing its decision, the court stated that: (1) it "would impose[ ] the same sentence[ ] as a non-Guideline sentence under Section 3553(a)"; (2) it imposed a sentence "necessary to achieve the purposes of sentencing under Section 3553(a)"; and (3) it had "considered the sentencing factors set forth at 18 U.S.C. Section 3553(a)." In sum, the court gave an adequate explanation for the 192-month sentence which honored the competing concerns of mercy and punishment.[14]
For the reasons discussed above, the sentence is affirmed.
AFFIRMED.
NOTES
[1] As provided for under U.S.S.G. § 4A1.3(b).
[2] Almenas acknowledges that his 1991 drug conviction may be counted as a predicate offense.
[3] Almenas's third argument is that his Sixth Amendment rights were violated because the court used his two prior convictions to enhance his sentence where the facts of both prior convictions underlying that determination were not charged by the indictment, found beyond a reasonable doubt, or admitted by Almenas. This argument cannot succeed. The Supreme Court has not abandoned its holding in Almendarez-Torres v. United States, 523 U.S. 224, 118 S.Ct. 1219, 140 L.Ed.2d 350 (1998). For purposes of enhancing the defendant's sentence, the Constitution does not require the "fact" of a prior conviction to be charged in the indictment and either proven to a jury beyond a reasonable doubt or admitted by the defendant. Id.; see also James v. United States, 550 U.S. 192, 127 S.Ct. 1586, 1600 n. 8, 167 L.Ed.2d 532 (2007). Accordingly, we are bound to follow this precedent unless the landscape changes. See United States v. Jimenez-Beltre, 440 F.3d 514, 520 (1st Cir.2006) (citing United States v. Ivery, 427 F.3d 69, 75 (1st Cir.2005)).
[4] We disagree with the government's contention that the plain error standard governs Almenas's argument concerning the court's treatment of his resisting-arrest conviction as a crime of violence. Almenas sufficiently presented and preserved the issue below, and the district court acknowledged as much during the sentencing hearing.
[5] Almenas argues that it is applicable as follows: U.S.S.G. § 4B1.2 is the definition section for terms used in § 4B1.1. Subsection (c) provides in relevant part:
The term `two prior felony convictions' means . . . (2) the sentences for at least two aforementioned felony convictions are counted separately under the provisions of. . . § 4A1.1(a), (b), or (c). Id.
U.S.S.G. § 4A1.1, in turn, is read together with § 4A1.2. See Commentary to U.S.S.G. § 4A1.1
[6] This definition of a "felony offense" mirrors the definition of "prior felony conviction" in § 4B1.2's guideline commentary.
[7] Even though the Court in Begay was interpreting the violent felony definition of the Armed Career Criminal Act (ACCA), 18 U.S.C. § 924(e)(2)(B), and though much of its analysis appeared specific to that statute, "for both prudential and precedential reasons, we have read that statute and the almost parallel guideline language at issue [in the guidelines definition of crime of violence] as being in pari passu." Williams, 529 F.3d at 6.
[8] "Passive resistance," characteristic of non-violent protestors, does not qualify as resisting arrest under this statute. The Commonwealth of Massachusetts has conceded as much. See Maylott, 65 Mass.App.Ct. at 469, 841 N.E.2d 717.
[9] Although Almenas, in arguing that the statute criminalizes non-violent conduct, latches onto the arm-stiffening example, a marginally more persuasive argument is available to him. Under Massachusetts law, certain types of flight from arrest will likely qualify as resisting arrest. See Commonwealth v. Grant, 71 Mass.App.Ct. 205, 210 n. 2, 880 N.E.2d 820 (Mass.App.2008) ("There is uncertainty in the case law and commentary regarding the circumstances in which flight on foot may constitute resisting arrest."). One could argue that, in at least some cases, a defendant's flight from arrest is neither aggressive nor violent. This, however, fails to alter our conclusion. In determining whether an offense will categorically qualify as a crime of violence, the focus must be on the "mine-run of conduct that falls within the heartland of the statute." United States v. De Jesus, 984 F.2d 21, 24 (1st Cir.1993); see also Giggey, 551 F.3d at * ___, 2008 WL 5274834 at *11. Resisting arrest is typically both violent and aggressive. See Begay, 128 S.Ct. at 1586 (noting that enumerated crimes all "typically" involve purposeful, violent and aggressive conduct). And, moreover, if a defendant's flight from arrest is to qualify as resisting arrest under Massachusetts law, it must either involve the use or threatened use of force or create a substantial risk of injury to a police officer or another. See Mass. Gen. Laws, ch. 268, § 34B.
[10] Under this standard Almenas bears the burden of showing: "(1) that an error occurred, (2) which was clear or obvious and which not only (3) affected [his] substantial rights, but also (4) seriously impaired the fairness, integrity, or public reputation of judicial proceedings." United States v. Duarte, 246 F.3d 56, 60 (1st Cir.2001).
[11] A sentence is procedurally sound so long as the district court did not commit a procedural error in arriving at the sentence. Examples of procedural errors include: "failing to calculate (or improperly calculating) the Guidelines range, treating the Guidelines as mandatory, failing to consider the section 3553(a) factors, selecting a sentence based on clearly erroneous facts, or failing to adequately explain the chosen sentence-including an explanation for any deviation from the Guidelines range." Gall, 128 S.Ct. at 597.
[12] Generally, § 3553(a) directs a sentencing court to consider:
(1) the nature and circumstances of the offense and the history and characteristics of the defendant;
(2) the need for the sentence imposed
(A) to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense;
(B) to afford adequate deterrence to criminal conduct;
(C) to protect the public from further crimes of the defendant; and
(D) to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner.
(3) the kinds of sentences available;
(4) the kinds of sentence and the sentencing range established for
(A) the applicable category of offense committed by the applicable category of defendant as set forth in the guidelines . . .
(5) any pertinent policy statement [in the guidelines]
(6) the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and
(7) the need to provide restitution to any victims of the offense.
18 U.S.C. § 3553(a).
[13] Almenas appears to suggest that the court erred because it neglected to read all seven of the § 3553(a) factors during sentencing. This argument is fatally flawed. We have never required a district court to march out each § 3553(a) factor one by one in the process of imposing a sentence. Dixon, 449 F.3d at 205.
[14] Almenas filed a letter under Fed. R.App. P. 28(j) calling our attention to the Supreme Court's decision in Kimbrough v. United States, ___ U.S. ___, 128 S.Ct. 558, 169 L.Ed.2d 481 (2007) which issued after this case was submitted. In Kimbrough, the Court held that a district court may deviate from a properly calculated guideline sentencing range based on its disagreement with the crack/powder sentencing ratio disparity. Id. at 570. Although Almenas was sentenced for selling crack, he neither raised the crack/powder disparity issue below nor initially in this court. "A party cannot normally raise a new issue in a Rule 28(j) filing." United States v. Barbour, 393 F.3d 82, 93 (1st Cir.2004) (citation omitted). However, where a party raises such an issue "in response to a potentially crucial Supreme Court decision that issued only after briefing and oral argument were completed," and no waiver has occurred, plain error review is appropriate. See United States v. Morgan, 384 F.3d 1, 8 (1st Cir.2004).
To satisfy the plain error standard in this context, Almenas must "demonstrate a reasonable probability that he would have received a more lenient sentence had the district court considered the crack cocaine disparity when sentencing [him]." United States v. Matos, 531 F.3d 121, 122 (1st Cir. 2008). He has failed to do so here. And, we note further, that when sentencing Almenas the district court made manifest that it would have imposed the same sentence as a non-guideline sentence.
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640 F.Supp. 719 (1986)
Doris PETERSEN, Plaintiff,
v.
John PETERSEN, Defendant.
No. 85 Civ. 2123(PNL)
United States District Court, S.D. New York.
July 2, 1986.
*720 Max Markus Katz, New York City, for plaintiff.
Bernard M. Eiber, Great Neck, N.Y., for defendant.
LEVAL, District Judge.
This is a suit in diversity for breach of a separation agreement. Defendant, John Petersen moves for summary judgment dismissing the complaint for lack of subject matter jurisdiction. Plaintiff, Doris Petersen, cross-moves for summary judgment. The motion to dismiss the complaint is granted.
Background
Doris and John Petersen were divorced in 1981. In anticipation of the divorce, they executed a separation agreement which detailed alimony payments and a property settlement. The agreement was incorporated by reference in the divorce decree issued by the New York Supreme Court. Beginning in 1982, John failed to make alimony payments. Doris brought a collection action in state court in 1983. Doris acquired a judgment, but it was later vacated for lack of valid process, and the state suit has since been discontinued. In 1984 John sued to set aside the alimony provision, claiming fraudulent inducement. This suit was dismissed for failure to state a cause of action. John, however, secured an ex parte order requiring Doris to post security for court costs. Doris now seeks enforcement of the separation agreement in this court.
Discussion
Plaintiff invokes the diversity jurisdiction of this court. Although the parties are apparently diverse[1] and the amount in controversy exceeds $10,000, matrimonial actions are a traditional exception to diversity jurisdiction. See Barber v. Barber, 62 U.S. (21 How.) 582, 16 L.Ed. 226 (1859) (dicta); Ex Parte Burrus, 136 U.S. 586, 10 S.Ct. 850, 34 L.Ed. 500 (1890); Phillips, Nizer, Benjamin, Krim & Ballon v. Rosenstiel, 490 F.2d 509, 513 (2d Cir.1973) (Freindly, J.). While the scope of this exception has not been consistently defined, several recent cases in this district have held that disputes arising out of separation agreements fall within the exception and thus outside federal jurisdiction. In Casaburro v. Daher, 569 F.Supp. 835 (S.D.N.Y. 1983), Judge Lasker held that there was no federal jurisdiction over a former husband's visiting rights claim predicated on a separation agreement. Judge Lasker explained that "federal courts have little experience with the state policies and precedents that govern construction of such agreements...." Id. at 836. Similarly, Judge Knapp held that a dispute over child support provisions of a separation agreement was outside federal jurisdiction. Brenhouse v. Bloch, 418 F.Supp. 412 (S.D. N.Y.1976). In Rosenstiel v. Rosenstiel, 278 F.Supp. 794 (S.D.N.Y.1967), the court held that there must be a nonfrivolous constitutional claim in order to invoke federal jurisdiction in matrimonial disputes.
One decision of a judge of this district held that a breach of contract action *721 based on a separation agreement was properly cognizable in diversity. The court in Graning v. Graning, 411 F.Supp. 1028 (S.D.N.Y.1976), held that a suit to recover on a pre-divorce property settlement was essentially a breach of contract action, rather than a matrimonial dispute. Graning is distinguishable, however, on several important grounds. The Granings' divorce was granted by the Dominican Republic rather than New York State. Thus, the state court had no particular interest or expertise in the subject; it was not a peculiarly local matter. Moreover, the Graning case involved a simple question of enforcement; the agreement was not questioned on the merits. Here, by contrast, the divorce decree was issued by a New York court which has been involved in the present controversy, and the dispute goes to the very validity of the separation agreement incorporated into the divorce. Accordingly, the policies justifying deference to state court resolution of matrimonial actions are directly implicated in the instant action. See Note, Application of Federal Abstention Doctrines to the Domestic Relations Exception to Federal Diversity Jurisdiction 1983 Duke L.J. 1095, 1099 (state expertise and competence, problem of continuing supervision of divorce and alimony decrees, and possibility of incompatible state and federal decrees make deference appropriate).
Even if there were jurisdiction, this case presents a particularly appropriate instance for federal abstention. The Court of Appeals has held that "[i]n a case not coming within the exception relating to matrimonial actions, a federal court may still decline jurisdiction if the action is `on the verge' of the exception...." Bossom v. Bossom, 551 F.2d 474 (2d Cir.1976) (per curiam). Where federal adjudication would interfere with state policy in an important matter of local concern, the Supreme Court has long found abstention appropriate. Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed.2d 1424 (1943). Matrimony and divorce are subject to extensive and intricate regulation by the various states, and state courts have developed particular competence in the adjudication of these issues. Federal court intervention in this case would not only infringe on core state concerns and risk inconsistent state and federal adjudications, but would require "exploration of a difficult field of New York law with which, because of its proximity to the exception for matrimonial actions, federal judges are more than ordinarily unfamiliar." Phillips Nizer, supra, at 515.
Finally, the state court has explicitly retained jurisdiction in this matter. Litigants must not be permitted to avoid unfavorable state court decisions by transferring their state law dispute to federal court. See Texaco v. Pennzoil, 784 F.2d 1133, 1142-43 (2d Cir.1986). The New York courts provide a superior forum for the resolution of these matters. It would be inappropriate for this court, even if it had jurisdiction, to involve itself in what is essentially an ongoing matrimonial dispute, however clothed.
The complaint is dismissed.
NOTES
[1] Defendant asserts that the plaintiff fails to meet the citizenship requirement, but has offered no proofs to support this suggestion. Given the resolution of the jurisdiction question, it is, in any event, unnecessary to reach this issue.
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USCA1 Opinion
UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT _________________________ No. 94-1498 FOSTER-MILLER, INC., Plaintiff, Appellant, v. BABCOCK & WILCOX CANADA, Defendant, Appellee. _________________________ APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Richard G. Stearns, U.S. District Judge]
___________________ _________________________ Before Selya, Circuit Judge,
_____________ Aldrich, Senior Circuit Judge,
____________________ and Boudin, Circuit Judge.
_____________ _________________________ James J. Foster, with whom Michael A. Diener and Wolf,
________________ ___________________ _____ Greenfield & Sacks, P.C. were on brief, for appellant.
________________________ Peter L. Resnik, with whom Cherie L. Krigsman and McDermott,
_______________ __________________ __________ Will & Emery were on brief, for appellee.
____________ _________________________ February 9, 1995 _________________________
SELYA, Circuit Judge. In Boit v. Gar-Tec Prods., Inc.,
SELYA, Circuit Judge.
_____________ ____ ____________________ 967 F.2d 671 (1st Cir. 1992), we urged district courts to take a flexible approach in handling motions to dismiss for lack of in
__ personam jurisdiction, and, concomitantly, to tailor procedures
________ for use in those purlieus. Turning from the general to the particular, we recommended that district courts employ varying levels of scrutiny in connection with such motions, adapting the level of scrutiny to the exigencies of the individual case. See
___ id. at 674-78. Among other possibilities, we suggested using a
___ special intermediate standard when "factual issues are common to both the jurisdictional question and the claim on the merits . . . ." Id. at 677.
___ The case before us today an appeal by Foster-Miller, Inc. (FMI) from an order dismissing its commercial tort action against Babcock & Wilcox Canada (BWC) illustrates vividly that Boit's flexible approach demands circumspection in its
____ application. In this case, the district court applied Boit's
____ intermediate standard too rashly when, eager to test whether a legally sufficient showing of jurisdiction had been made, it neither gave the parties adequate notice that it intended to use this special standard nor ensured that FMI had a fair opportunity to gather and present the evidence necessary for such a showing. While we are not without sympathy for the district judge he inherited this case midstream, and Boit, in retrospect, should
____ have emphasized the need to forewarn litigants of a trial court's intention to go beyond the prima facie standard typically 2
associated with motions to dismiss under Fed. R. Civ. P. 12(b)(2) we cannot permit the dismissal order to stand. I. THE FACTS
I. THE FACTS We sketch the operative facts, drawing liberally from the lower court's opinion. See Foster-Miller, Inc. v. Babcock &
___ ___________________ _________ Wilcox Can., 848 F. Supp. 271 (D. Mass. 1994).
___________ The parties to this appeal are quondam competitors: FMI is a Massachusetts corporation engaged in furnishing sludge and particle removal services for nuclear steam generators; BWC is a Canadian firm that, among other things, services such generators. At its core, the litigation concerns a virtual meltdown of the parties' relationship, which in turn detonated a lawsuit. The tale follows. As early as 1988, FMI and BWC entertained the prospect of a joint venture to furnish sludge removal services to Ontario Hydro, a Canadian utility. Although the joint venture idea stalled and the principals went their separate ways, Canada remained an alluring target. But the road to prosperity had a large pothole. FMI's then-extant technology, known by the acronym "CECIL," featured flexible lances that directed powerful bursts of water at pockets of sludge found within the hard-to- reach crannies of nuclear steam boilers. While this system had distinct competitive advantages over BWC's rival rigid lance system, neither system performed satisfactorily in the cleansing of Canadian boilers (known in the trade as Candu boilers). Determined to detour around the "can't do Candu" 3
pothole and penetrate the Canadian market, BWC set out to design a lance of unprecedented flexibility. In 1989, while BWC's development efforts were underway, Ontario Hydro (acting on behalf of a consortium of Canadian utilities) retained FMI to study the feasibility of adapting FMI's flexible lance technology for use in Candu boilers. As part of this endeavor, FMI contracted with a well-known supplier, U.S. Composites (CompCo), to create a new type of hose. In March 1990, Robert A.S. Lee, an FMI employee who had been instrumental in perfecting CECIL, attended an industry conference in Tennessee. Daniel St. Louis, a BWC engineer involved in that company's push to fashion a flexible lance, attended the same session. During a previous encounter, the men had casually discussed high pressure hoses. On this occasion, their conversation became more detailed and focused on the possibility of reinforcing high pressure hoses with certain fibers. The discussion proved prophetic: a few weeks thereafter, CompCo delivered the special hose that FMI had asked it to design. The hose was thought in certain quarters to represent a technological breakthrough. One of its more revolutionary features was a double-layered Kevlar sheath that supplied desired reinforcement. On May 11, 1990, an Ontario Hydro representative, James Malaugh, traveled to FMI's plant in Waltham, Massachusetts, to assess FMI's progress. Seeking expertise and insight, Malaugh invited St. Louis to join him. Nonplussed, FMI allowed St. Louis 4
to attend only after BWC signed a confidentiality agreement. The agreement, duly executed by a ranking official of BWC and transmitted via facsimile machine from Canada, acknowledged that FMI "anticipate[d] disclosing . . . certain information of a novel, proprietary, or confidential nature," and memorialized BWC's promise "not to use [the] information for any purpose unless specifically authorized in writing by FMI." The agreement also stipulated that FMI would be entitled to relief for any breach. William Leary, the FMI engineer in charge of the Ontario Hydro project, hosted the Waltham session. The participants debated various aspects of flexible lance technology, including the preferred characteristics of the hose and possible methods of reinforcement. At one point Leary, responding to a direct question by St. Louis, identified CompCo as FMI's supplier. Not long after the Waltham meeting, St. Louis contacted CompCo and inquired about the possibility of that company fabricating a similar hose for BWC. St. Louis' suggestion that FMI would not object proved overly sanguine; after consulting with FMI, CompCo rebuffed BWC's overtures.1 Undaunted, BWC forged ahead in its research effort. It eventually succeeded in manufacturing its own flexible lance, suitable for Candu boilers. Thereafter, Ontario Hydro awarded BWC a lucrative contract.
____________________ 1Nonetheless, BWC managed to obtain a sample of the special hose. The parties dispute whether this occurred before or after the May 11 meeting. 5
II. THE LITIGATION
II. THE LITIGATION On November 12, 1993, FMI, claiming to have gotten hosed, commenced suit against BWC in the United States District Court for the District of Massachusetts. Invoking diversity jurisdiction, 28 U.S.C. 1332 (1988), FMI charged breach of the confidentiality agreement, misappropriation of trade secrets, and unfair competition. BWC moved to dismiss for lack of in personam
__ ________ jurisdiction or, in the alternative, on the basis of forum non
_____ ___ conveniens.
__________ Judge Keeton drew the case. Concerns about the parties' trade secrets slowed discovery to a crawl. At a conference held on December 16, 1993, Judge Keeton scheduled a hearing on the motion for January 4, 1994, restricted discovery for the time being to matters "bear[ing] upon the jurisdictional issue," and advised counsel that, absent an agreement dissolving the discovery deadlock, he would use the traditional prima facie standard, not the special intermediate standard, in evaluating the motion to dismiss. At that point, fate intervened. In a routine shuffling of cases ancillary to the appointment of several new judicial officers, this case was plucked from Judge Keeton and reassigned to Judge Stearns. The January 4 hearing never materialized. Instead, Judge Stearns heard the motion to dismiss on February 1 and 2, 1994. Though the discovery dispute had not been resolved, Judge Stearns, to FMI's obvious chagrin, undertook not only to probe the existence of the basic facts on which jurisdiction 6
might be premised but also to adjudicate certain ultimate facts (e.g., whether the participants actually disclosed any
____ confidential information at the Waltham meeting).2 And he applied the special intermediate level of scrutiny rather than the more easily satisfied prima facie standard. The district court granted the motion to dismiss. After stressing the importance of the Waltham meeting to the jurisdictional issue BWC, after all, had no other significant contacts with the forum Judge Stearns articulated two bases for refusing to exercise jurisdiction. First, he found it unlikely either that proprietary information had been disclosed at the meeting or that such information came into BWC's possession as a result of the meeting; therefore, FMI's cause of action did not arise from BWC's participation in the meeting as required by the Massachusetts long-arm statute. See Foster-Miller, 848 F. Supp.
___ _____________ at 276-77. Second, and alternatively, the judge concluded that, even if FMI's claims did arise from BWC's participation in the Waltham meeting, it would be unreasonable for a Massachusetts- based court to exercise jurisdiction over BWC, in part because the court might not be able to grant effective injunctive relief. See id. at 277.
___ ___ FMI moved for reconsideration, specifically withdrawing
____________________ 2Because the scope of this inquiry caught FMI off guard, it tendered a series of post-hearing offers of proof in an effort to make up lost ground. We do not comment on the timing of FMI's proffers. Further proceedings in the district court are obligatory, see infra Parts IV(C) & V, at which time new
___ _____ evidentiary submissions can be assembled. 7
its prayer for an injunction. Judge Stearns denied the motion without comment. This appeal ensued. III. SPECIFIC PERSONAL JURISDICTION
III. SPECIFIC PERSONAL JURISDICTION Prior to reexamining the Boit framework, we rehearse
____ certain general principles of law relating to specific in
__ personam jurisdiction.
________ Personal jurisdiction implicates the power of a court over a defendant. In a federal court, both its source and its outer limits are defined exclusively by the Constitution. See
___ Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee,
___________________________ _________________________________ 456 U.S. 694, 702 (1982). There are two different avenues by which a court may arrive at personal jurisdiction. One frequently traveled route leads to general jurisdiction. "General jurisdiction exists when the litigation is not directly founded on the defendant's forum- based contacts, but the defendant has nevertheless engaged in continuous and systematic activity, unrelated to the suit, in the forum state." United Elec. Workers v. 163 Pleasant St. Corp.,
_____________________ _______________________ 960 F.2d 1080, 1088 (1st Cir. 1992) (Pleasant St. I). Here,
_______________ BWC's forum-related contacts are far too scanty to justify the invocation of general jurisdiction. See Foster-Miller, 848 F.
___ _____________ Supp. at 273 (marshalling certain undisputed facts). When general jurisdiction is lacking, the lens of judicial inquiry narrows to focus on specific jurisdiction. As the label implies, this focus requires weighing the legal 8
sufficiency of a specific set of interactions as a basis for personal jurisdiction. See Helicopteros Nacionales de Colombia,
___ ____________________________________ S.A. v. Hall, 466 U.S. 408, 414-15 & nn.8-9 (1984) (recognizing
____ ____ "general" and "specific" jurisdiction and distinguishing between them); Pleasant St. I, 960 F.2d at 1088 (similar); Donatelli v.
______________ _________ National Hockey League, 893 F.2d 459, 462-63 (1st Cir. 1990)
_______________________ (similar). In that exercise, the applicable constitutional limits assume critical importance. We explain briefly. The existence of specific personal jurisdiction depends upon the plaintiff's ability to satisfy two cornerstone conditions: "first, that the forum in which the federal district court sits has a long-arm statute that purports to grant jurisdiction over the defendant; and second, that the exercise of jurisdiction pursuant to that statute comports with the strictures of the Constitution." Pritzker v. Yari, ___ F.3d ___,
________ ____ ___ (1st Cir. 1994) [No. 93-2374, slip op. at 9]; see also
___ ____ Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 204 (1st Cir.
___________________________ ______ 1994); Hahn v. Vermont Law Sch., 698 F.2d 48, 51 (1st Cir.
____ __________________ 1983). Although we deem the first of the cornerstone conditions to be self-explanatory, the second condition requires amplification. This condition implicates three distinct components, namely, relatedness, purposeful availment (sometimes called "minimum contacts"), and reasonableness:3
____________________ 3This trilogy forms an interesting contrast with the jurisprudence of the branch of the Massachusetts long-arm statute that applies in many business disputes. See Mass. Gen. L. ch.
___ 9
First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities. Second, the defendant's in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable. Pleasant St. I, 960 F.2d at 1089; accord Pritzker, ___ F.3d at
______________ ______ ________ ___ [slip op. at 10-11]; Ticketmaster, 26 F.3d at 206.
____________ IV. APPLYING THE JURISDICTIONAL RULES
IV. APPLYING THE JURISDICTIONAL RULES A long-arm statute is plainly available for FMI's use. See Mass. Gen. L. ch. 223A, 3(a) (1992). Section 3(a), quoted
___ supra note 3, is not modest in its reach. Its language is
_____ expansive, and its words are to be generously applied in order to determine whether a given defendant fairly can be said to have participated in the forum's economic life. See Pleasant St. I,
___ _______________ 960 F.2d at 1087 (collecting cases). Since section 3(a) applies here, we turn directly to the second of the two cornerstone
____________________ 223A, 3(a) (1992) (providing in relevant part for the exercise of "personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's . . . transacting any business" in Massachusetts). The Massachusetts Supreme Judicial Court has held that, to animate the statute, the facts must show both that the defendant transacted business in Massachusetts, and that the plaintiff's claim arises out of the transaction of that business. See Tatro
___ _____ v. Manor Care, Inc., 625 N.E.2d 549, 551 (Mass. 1994); Good Hope
_________________ _________ Indus., Inc. v. Ryder Scott Co., 389 N.E.2d 76 (Mass. 1979).
_____________ ________________ From our coign of vantage, these two requirements appear to correspond, in reverse order, to the first two of the three constitutional components, i.e., the "transacting any business"
____ requirement corresponds to "minimum contacts," while the "arising from" requirement corresponds to relatedness. 10
conditions that constitute the foundation for a finding of specific in personam jurisdiction.
__ ________ As we have said, the condition comprises three components. The first minimum contacts is not legitimately in issue. The seminal jurisdictional fact that BWC voluntarily dispatched a representative to Massachusetts for commercial advantage pursuant to a written contract with a Massachusetts firm cannot be gainsaid. In taking this action, BWC purposefully conducted activities in the forum state, thereby making a suit foreseeable. See id. at 1089. Hence, we endorse
___ ___ the district court's conclusion that BWC transacted business in Massachusetts to such an extent, and in such a manner, as to satisfy the minimum contacts requirement. See Foster-Miller, 848
___ _____________ F. Supp. at 276; compare Pritzker, ___ F.3d at ___ [slip op. at
_______ ________ 14] (finding jurisdiction in part because the nonresident defendant, by contract, had "knowingly acquir[ed] an economically beneficial interest" in a forum-based commercial venture). Setting the matter of minimum contacts to rest, we come face to face with the next component: relatedness. In this case, evaluating that requirement reduces to whether FMI's claim arises from BWC's minimum contacts. To place this issue into proper perspective, we first limn the options that are available to a district court in handling a motion to dismiss for want of jurisdiction over the person. We then refine that framework and scrutinize the decision below in light of our handiwork. A. Establishing and Testing Personal Jurisdiction.
A. Establishing and Testing Personal Jurisdiction.
______________________________________________ 11
It is apodictic that the plaintiff, who bears the burden of proving the existence of in personam jurisdiction, must
__ ________ carry the devoir of persuasion on the elements of relatedness and minimum contacts. See Ticketmaster, 26 F.3d at 207 n.9; Martel
___ ____________ ______ v. Stafford, 992 F.2d 1244, 1247 n.5 (1st Cir. 1993); Donatelli,
________ _________ 893 F.2d at 468. But this is merely one step along the path; to allocate the burden is neither to define the evidentiary showing necessary to meet it nor to explain whether that showing varies from context to context. We addressed these important issues in Boit. There, we
____ tried to formulate a procedural matrix that would serve to endow the decisional process with appropriate degrees of economy and manageability. That endeavor produced a trio of standards, each corresponding to a level of analysis, that might usefully be employed when a trial court comes to grips with a motion to dismiss for want of personal jurisdiction. The most conventional of these methods permits the district court "to consider only whether the plaintiff has proffered evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction." Boit,
____ 967 F.2d at 675. To make a prima facie showing of this calibre, the plaintiff ordinarily cannot rest upon the pleadings, but is obliged to adduce evidence of specific facts. See id. Withal,
___ ___ the district court acts not as a factfinder, but as a data collector. That is to say, the court, in a manner reminiscent of its role when a motion for summary judgment is on the table, see
___ 12
Fed. R. Civ. P. 56(c), must accept the plaintiff's (properly documented) evidentiary proffers as true for the purpose of determining the adequacy of the prima facie jurisdictional showing. Despite the lack of differential factfinding, this device is a useful means of screening out cases in which personal jurisdiction is obviously lacking, and those in which the jurisdictional challenge is patently bogus. However, the approach offers little assistance in closer, harder-to-call cases, particularly those that feature conflicting versions of the facts. See, e.g., General Contracting & Trading Co. v.
___ ____ ____________________________________ Interpole, Inc., 899 F.2d 109 (1st Cir. 1990).
_______________ A second option open to the court is to embark on a factfinding mission in the traditional way, taking evidence and measuring the plaintiff's jurisdictional showing against a preponderance-of-the-evidence standard. In Boit, we stated that
____ this standard may appropriately be invoked when a court determine[s] that in the circumstances of a particular case it is unfair to force an out- of-state defendant to incur the expense and burden of a trial on the merits in the local forum without first requiring more of the plaintiff than a prima facie showing of facts
___________ essential to in personam jurisdiction. A
__ ________ court may so determine, for example, when the proffered evidence is conflicting and the record is rife with contradictions, or when a plaintiff's affidavits are "patently incredible . . . ." Boit, 967 F.2d at 676 (offering examples). Virtually by
____ definition, the preponderance standard necessitates a full-blown evidentiary hearing at which the court will adjudicate the 13
jurisdictional issue definitively before the case reaches trial.4 In that mode, the court will "consider[] all relevant evidence proffered by the parties and mak[e] all factual findings essential to disposition of the motion." Id. But this method
___ must be used discreetly. For one thing, pretrial evidentiary hearings are relatively cumbersome creatures, and, if used routinely, can squander judicial resources. For another thing, since this method contemplates a binding adjudication, the court's factual determinations ordinarily will have preclusive effect, and, thus, at least in situations in which the facts pertinent to jurisdiction and the facts pertinent to the merits are identical, or nearly so, profligate use of the preponderance method can all too easily verge on a deprivation of the right to trial by jury. In Boit, we recognized these difficulties. We also
____ recognized that the prima facie and preponderance-of-the-evidence standards are merely two of several possible models, and that trial courts need not confine themselves to choosing between these two levels of evidentiary scrutiny. See id. at 677. In
___ ___ the special circumstance in which the assertion of jurisdiction is bound up with the claim on the merits, the possibility of preclusion renders use of the preponderance standard troubling,
____________________ 4Such hearings frequently are convened under the aegis of Fed. R. Civ. P. 12(d), which provides in pertinent part that certain defenses, including the defense of lack of in personam
__ ________ jurisdiction, "shall be heard and determined before trial on application of any party," unless the court orders a deferral until time of trial. 14
while the possibility of permitting a dubious case to proceed beyond the pleading stage, and even to trial, though the court eventually will be found to lack jurisdiction, renders use of the prima facie standard undesirable. The Boit panel anticipated that, when this special
____ circumstance arose, trial courts might steer a middle course by engaging in some differential factfinding, limited to probable outcomes as opposed to definitive findings of fact, thereby skirting potential preclusionary problems while at the same time enhancing the courts' ability to weed out unfounded claims of jurisdiction. Utilizing this intermediate standard, a district court, "even though allowing an evidentiary hearing and weighing evidence to make findings . . . may merely find whether the plaintiff has shown a likelihood of the existence of each fact necessary to support personal jurisdiction." Id. This showing
___ constitutes an assurance that the circumstances justify imposing on a foreign defendant the burdens of trial in a strange forum, but leaves to the time of trial a binding resolution of the factual disputes common to both the jurisdictional issue and the merits of the claim. See id. at 678.
___ ___ Unlike the prima facie standard, and like the preponderance standard, this third method, which we sometimes call the "likelihood standard," involves factfinding rather than merely making a ruling of law regarding sufficiency of the evidence to present a fact question. Like the first and unlike the second method, however, the third method avoids potentially troubling issues of "issue preclusion" or 15
"law of the case" (at least when the court denies the motion) because a determination by such an intermediate standard . . . does not purport to be a finding by the same standard on the same issue as will be decided at trial. Id.
___ We acknowledge that having an array of standards at the ready may be thought too much of a good thing. However, even though an intermediate standard will not be used with great frequency, the need for one is manifest. We can postulate a variety of "common facts" scenarios in which the facts necessary to sustain personal jurisdiction are intimately bound up with facts necessary to establish the merits of the underlying claim. See, e.g., Ann Althouse, The Use of Conspiracy Theory to
___ ____ ____________________________________ Establish In Personam Jurisdiction: A Due Process Analysis, 52
___________________________________ _______________________ Fordham L. Rev. 234, 247-51 (1983) (noting, though not adequately resolving, the problem created in situations where proving the facts "upon which jurisdiction depends is viewed as inextricably tied to the substantive merits of the case"). It is precisely because of the incidence of these situations situations in which the issue of jurisdiction is factually enmeshed with the merits of the suit that we recognized in Boit the need for an
____ intermediate standard of proof and, correspondingly, an intermediate standard of judicial analysis. B. Standards of Review.
B. Standards of Review.
___________________ We are reluctant to end our discussion of the methods available to district courts for testing jurisdictional waters without mentioning appellate review. As a practical matter, the 16
standard of review will depend in the first instance on whether the court of appeals is reviewing the district court's choice of an analytic method or its application of such a method. As for the court's initial choice from among the three standards we have discussed prima facie, likelihood, or preponderance appellate review is de novo. This accords with the general principle that a trial court's determinations as to the legal rules that govern a party's proof, including those that dictate what quantum of proof the law requires, are subject to plenary review. See,
___ e.g., Putnam Resources v. Pateman, 958 F.2d 448, 471 (1st Cir.
____ ________________ _______ 1992); see also Soto v. United States, 11 F.3d 15, 17 (1st Cir.
___ ____ ____ _____________ 1993) (holding that "if a district court applie[s] an erroneous legal standard to the facts," de novo review obtains). As for the district court's subsequent application of the method that it chooses, the standard of review will vary from method to method. If the district court employs the prima facie standard, then appellate review is de novo. See United Elec.
___ _____________ Workers v. 163 Pleasant St. Corp., 987 F.2d 39, 44 (1st Cir.
_______ _______________________ 1993) (Pleasant St. II); Boit, 967 F.2d at 675; see also Garita
________________ ____ ___ ____ ______ Hotel Ltd. Partnership v. Ponce Fed. Bank, 958 F.2d 15, 17 (1st
_______________________ _______________ Cir. 1992) (explaining that appellate courts traditionally review rulings on motions to dismiss de novo, "applying the same criteria that obtained in the court below"). If the district court departs from the conventional method of adjudicating motions to dismiss and relies upon the preponderance-of-the- evidence standard to determine the existence vel non of personal
___ ___ 17
jurisdiction, then appellate review is for clear error. See
___ CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 364-65 (2d Cir.
__________________ ________ 1986); see also Fed. R. Civ. P. 52(a).
___ ____ If the district court employs the intermediate standard, then appellate review is for abuse of discretion. Cf.
___ Boit, 967 F.2d at 678 (suggesting a deferential standard of
____ appellate review). Two considerations point to the applicability of this deferential mode of review in this situation. First, the nature of a likelihood analysis is such that it falls naturally within the realm of discretionary decisionmaking. Second, from a practical standpoint, a likelihood analysis simply does not seem amenable to either of the other standards. Unlike the classic motion to dismiss, in which the plaintiff's assertions are accepted as true, a likelihood analysis requires the judge to pass upon the accuracy and integrity of the plaintiff's assertions. Yet, in contrast to a preponderance-of-the-evidence analysis, these determinations are not true findings of fact, for they lack definiteness to some degree, and they also lack the preclusive quality that would otherwise normally attach. Consequently, we believe that abuse of discretion is the proper standard of review. In practical terms, this means that we will set aside the challenged ruling only if we descry "a meaningful error in judgment." Anderson v. Cryovac, Inc., 862 F.2d 910, 923
________ _____________ (1st Cir. 1988); accord Rosario-Torres v. Hernandez-Colon, 889
______ ______________ _______________ F.2d 314, 323 (1st Cir. 1989) (en banc). Of course, whatever method is chosen and however it may 18
be applied, appellate review of the trial court's legal conclusions about whether its findings do or do not support the exercise of in personam jurisdiction is always nondeferential
__ ________ and plenary. See Boit, 967 F.2d at 678.
___ ____ C. Applying the Likelihood Standard.
C. Applying the Likelihood Standard.
________________________________ After convening an evidentiary hearing and bringing the likelihood standard to bear, Judge Stearns found it unlikely either that FMI disclosed legally protected information at the Waltham meeting or that BWC obtained confidences as a consequence of the meeting. See Foster-Miller, 848 F. Supp. at 276-77. FMI
___ _____________ assigns error. Its appeal raises potentially difficult questions about the application of Boit's likelihood standard in certain
____ types of cases. We hasten to note that the paradigm case involving the use of Boit's intermediate standard as a basis for exercising
____ __________ jurisdiction, i.e., as a basis for denying a motion to dismiss
____ _______ hardly seems problematic. In such a scenario, the plaintiff is permitted to proceed in its forum of choice, yet the defendant has the consolation of having been afforded a detailed demonstration, beyond a mere prima facie showing, of why the court deems it fair to exercise jurisdiction, at least provisionally. It is only when Boit's intermediate standard is
____ used as a basis for declining the exercise of jurisdiction, i.e.,
_________ ____ as a basis for granting a motion to dismiss, that the prospect of
________ mischief looms. One can easily imagine cases in which the likelihood standard might be applied to adjudicate facts that are 19
only marginally related to jurisdiction, or are very closely related to the merits of the plaintiff's substantive claims, thus prematurely extinguishing a plaintiff's ability to present its case in a full and fair manner.5 The short of it is that, whatever its merits in the abstract, Boit's intermediate standard requires caution in its
____ application, especially when it appears that a dismissal may result. Indeed, although Boit does, in dictum, 967 F.2d at 677-
____ 78, propose to authorize such dismissals, it is noteworthy that, apart from the opinion of the court below, there is no other reported case, Boit included, that has sanctioned a dismissal
____ pursuant to a district court's use of the likelihood standard. In general, this is as it should be. To the limited extent that dismissals under Boit's intermediate standard are
____ justified at all, they will happen only rarely. Even then, the exact bounds of permissible application may not always be evident. Nonetheless, we believe it is better to tolerate the inconvenience of mild doctrinal uncertainty rather than to forgo altogether the utility of an intermediate standard and method of analysis. See generally Stephen L. Carter, Constitutional
___ _________ ______________ Adjudication and the Indeterminate Text: A Preliminary Defense
_________________________________________________________________
____________________ 5Conceivably, such an adjudication may also serve to thrust the judge into a role that, depending upon the circumstances, more appropriately belongs to the jury. See, e.g., Jacob v. City
___ ____ _____ ____ of New York, 315 U.S. 752, 756 (1942) (noting basic principle
___________ that merely because a "case is close and a jury might find either way . . . is no reason for a court to usurp the function of the jury"); Nunes v. Farrell Lines, Inc., 227 F.2d 619, 621-22 (1st
_____ ____________________ Cir. 1955) (applying principle of Jacob and vacating directed
_____ verdict). 20
of an Imperfect Muddle, 94 Yale L.J. 821 (1985) (recognizing the
_______________________ impossibility of removing all uncertainty from legal doctrine); Oliver Wendell Holmes, Jr., The Path of the Law, 10 Harv. L. Rev.
___________________ 457, 465 (1897) (warning that, in respect to judicial decisions, "certainty generally is illusion, and repose is not the destiny of man"). The bottom line, clearly, is that judges employing Boit's intermediate standard should proceed with great care.
____ In any event, these potential difficulties are peripheral to the instant appeal. In this instance, the flaw is less Judge Stearns' initial decision to switch the signals previously given by Judge Keeton and instead apply the intermediate standard, but more his failure to apprise FMI squarely of this change of plan a failure that was aggravated by FMI's inability to engage in appropriate discovery and then to present the totality of its evidence within the context of a likelihood analysis. When judges elect on their own initiative to use innovative methods in an effort to accelerate the progress of a case, they must take pains to ensure that parties are given satisfactory notice, reasonable access to discovery, and a meaningful opportunity to present evidence. See, e.g., Stella v.
___ ____ ______ Town of Tewksbury, 4 F.3d 53, 55-56 (1st Cir. 1993) (stating
__________________ these principles in the context of sua sponte summary judgment);
___ ______ Jardines Bacata, Ltd. v. Diaz-Marquez, 878 F.2d 1555, 1560-61
______________________ ____________ (1st Cir. 1989) (similar). While the likelihood standard has value, the latent risks associated with its use are not 21
insignificant, and they should be ameliorated to the extent practicable. Here, the lower court did not afford FMI the process that was due. To be sure, Judge Stearns advised counsel at a status conference on January 20, 1994, that he was pondering the use of the likelihood standard, but he neither eased the existing restriction on discovery nor superseded Judge Keeton's prior directives. The prima facie standard remained the default setting, and Judge Stearns' intentions remained open to conjecture until the day of the hearing. Indeed, while the court transmitted mixed signals to some degree, it closed the January 20 conference by specifically announcing that the question of misappropriation would not be subject to anything more rigorous
___ than scrutiny under a prima facie standard. On this point, Judge Stearns' intention could not have been more explicit. He told the lawyers: "I am going to, for purposes of this hearing, . . . basically accept whatever [FMI] allege[s] to be true in terms of the misappropriation." Following this pronouncement, the court never gave the litigants suitable forewarning of a change of heart, or of the extent to which it would apply the likelihood standard. To understand the gravity of this omission, it is important to understand the restriction imposed on discovery by Judge Keeton, and how that restriction arose. On December 15, 1993, FMI moved "to examine the documents and other materials maintained by BWC which would be relevant to statements in the affidavits of Mr. 22
St. Louis and others concerning contacts with, statements made by, and other information received from Foster-Miller . . . ." BWC objected. The next day Judge Keeton, ruling ore tenus,
___ _____ restricted FMI's discovery to matters "bear[ing] upon the jurisdictional issue." All other discovery, he ruled, was "out of bounds" for the time being. We think that this limitation, coupled with the judge's simultaneous indication that he would evaluate the motion to dismiss under the prima facie standard, effectively prevented FMI from engaging in merits-related discovery. And when Judge Stearns then shifted abruptly from the forecasted prima facie standard to the more intrusive likelihood standard, the preexisting restriction which remained intact on Judge Stearns' watch hamstrung FMI.6 Since this imperfect communication obviously prejudiced FMI's ability fairly to meet the rigors that an across-the-board use of the likelihood standard imposed in the circumstances of this case, we must set aside the court's conclusion that FMI's suit did not "arise from" BWC's activities in the forum state. To that extent, then, the dismissal order
____________________ 6This is because the two standards involve markedly different quanta of proof. So long as a prima facie standard obtained, FMI had neither a right nor a reason, in the course of "jurisdictional discovery," to ferret out all the supporting evidence regarding the confidential nature of what had been discussed in Waltham. By the same token, it had neither a right nor a reason to document fully the allegedly improper uses of such confidences by BWC. But once the court shifted to a likelihood standard, the scope, tenor and degree of the prospective inquiry changed, and FMI was caught, like a fawn in the headlights of a speeding van, without the discovery it needed to prove its point. 23
succumbs. V. ASSESSING REASONABLENESS
V. ASSESSING REASONABLENESS Our odyssey is not yet at an end. In addition to holding that FMI's claim did not arise from BWC's in-forum contacts, the district court held, alternatively, that it would be unreasonable to exercise jurisdiction over BWC. See Foster-
___ _______ Miller, 848 F. Supp. at 277; see generally Asahi Metal Indus. Co.
______ ___ _________ ______________________ v. Superior Court, 480 U.S. 102, 113-16 (1987) (undertaking
_______________ reasonableness inquiry); Burger King Corp. v. Rudzewicz, 471 U.S.
_________________ _________ 462, 476-78, 482-85 (1985) (similar). Since the rapid-fire shift of standards probably tainted this conclusion as well, we could simply vacate the alternative holding. We choose instead to dissect it for three reasons: the district court's rationale is troubling, it has been reported in a published opinion, and the underlying issue may arise on remand. The hallmark of reasonableness in the context of personal jurisdiction is "fair play and substantial justice." International Shoe Co. v. State of Washington, 326 U.S. 310, 320
_______________________ ___________________ (1945). We have tended to channel the quest for that imperative through a template that highlights five factors. The factors include: (1) the defendant's burden of appearing, (2) the forum state's interest in adjudicating the dispute, (3) the plaintiff's interest in obtaining convenient and effective relief, (4) the judicial system's interest in obtaining the most effective resolution of the controversy, and (5) the common interests of all sovereigns in promoting substantive social policies. 24
Pleasant St. I, 960 F.2d at 1088. We have called the points that
______________ compose this template "the gestalt factors" because, in any given case, they may neither be amenable to mechanical application nor be capable of producing an open-and-shut result. Their primary function is simply to illuminate the equitable dimensions of a specific situation, thereby "put[ting] into sharper perspective the reasonableness and fundamental fairness of exercising jurisdiction" in that situation. Pritzker, ___ F.3d at ___ [slip
________ op. at 19]. In the case at bar, the trial court found that the first, fourth, and fifth factors did not favor one outcome over the other, but that the remaining two factors discouraged the exercise of jurisdiction. See Foster-Miller, 848 F. Supp. at
___ _____________ 277. The court then invoked a sixth factor the ability of a Canadian court to apply Massachusetts law competently and impartially and concluded that even if "some harm had flowed to Foster-Miller from the Waltham meeting," the suit should be dismissed based on "considerations of due process." Id.
___ The district court's analysis is flawed. First and foremost, the court's added consideration the absence of any reason to believe that a Canadian court would display bias or prove incapable of applying Massachusetts law has no place in the minimum contacts calculus. Though the five gestalt factors should not necessarily be deemed collectively exhaustive, see,
___ e.g., FDIC v. British-American Ins. Co., 828 F.2d 1439, 1442 (9th
____ ____ _________________________ Cir. 1987) (recognizing additional factors), the element seized 25
upon by the court below is of no relevance here. Moreover, it is already committed to the doctrine of forum non conveniens. See
_____ ___ __________ ___ Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 509 (1947); see also
_______________ _______ ___ ____ Burger King, 471 U.S. at 477 & n.20 (specifically distinguishing
___________ between the primary role of the enumerated gestalt factors and the secondary role of considerations relevant to forum non
_____ ___ conveniens). The doctrines of personal jurisdiction and forum
__________ _____ non conveniens share certain similarities, but they embody
___ __________ distinct concepts and should not casually be conflated. Compare
_______ Allan R. Stein, Forum Non Conveniens and the Redundancy of Court-
_________________________________________________ Access Doctrine, 133 U. Pa. L. Rev. 781, 788-89 (1985)
________________ (distinguishing the doctrines) with Margaret G. Stewart, Forum
____ _____ Non Conveniens: A Doctrine in Search of a Role, 74 Cal. L. Rev.
______________ _______________________________ 1259 (1986) (arguing that certain factors currently considered under forum non conveniens doctrine should be subsumed under
_____________________ personal jurisdiction analysis). Consequently, the district court's self-proclaimed sixth factor adds nothing useful to the jurisdictional mix.7 The court also adopted several other questionable
____________________ 7To drive this conclusion home, we note two related points. First, the very case on which the district court relied in assigning weight to the added factor, Howe v. Goldcorp Invs.,
____ ________________ Ltd., 946 F.2d 944 (1st Cir. 1991), cert. denied, 112 S. Ct. 1172
____ _____ ______ (1992), is a forum non conveniens case, not a personal
_____ ___ __________ jurisdiction case. Second, we are unable to discern a link between the judge's hosannas to the Canadian court system and his conclusion that a federal district court sitting in Massachusetts lacks jurisdiction. Assuming that neither of two courts poses an undue risk of biased or incompetent adjudication, there is nothing to be counted against either of them in working the jurisdictional calculus. 26
positions, likely influenced by its mistaken blending of the theories of personal jurisdiction and forum non conveniens, in
_____ ___ __________ the course of ascertaining that the second and third gestalt factors militated against the exercise of jurisdiction. For example, the court deviated from the thrust of the second factor by centering much of its discussion on "the implications of this litigation for a Canadian industry upon whom [sic] an entire population depends for electric power" and on the extent to which Canada's interests "dwarf" those of Massachusetts. Foster-
_______ Miller, 848 F. Supp. at 277. This emphasis distorts the
______ directive that a court pondering the second factor must mull "the forum state's interest in adjudicating the dispute," Pleasant St.
____________ I, 960 F.2d at 1088. The purpose of the inquiry is not to
_ compare the forum's interest to that of some other jurisdiction,
_______ but to determine the extent to which the forum has an interest.
___ See, e.g., Burger King, 471 U.S. at 483 & n.26 (flatly rejecting
___ ____ ___________ the notion that a non-forum state's "acknowledged interest might possibly render jurisdiction in [the forum] unconstitutional" and
________________ observing that "minimum-contacts analysis presupposes that two or more States may be interested in the outcome of a dispute"). The district court's analysis is equally awry in its treatment of the third gestalt factor (which requires an assessment of "the plaintiff's interest in obtaining convenient and effective relief," Pleasant St. I, 960 F.2d at 1088).
________________ Although finding that "it is more convenient for the plaintiff to litigate this matter in domestic comfort," Foster-Miller, 848 F.
_____________ 27
Supp. at 277, the court offset this finding by invoking, inter
_____ alia, a presumed inability "to award plaintiff the full measure
____ of relief that it seeks" because of doubts concerning both the propriety and the efficacy of enjoining a foreign national whose presence in Massachusetts had been fleeting. Id. This concern
___ is beside any relevant point where a plaintiff's inability to obtain certain kinds of relief is wholly a product of her own choice of forum. At any rate, the plaintiff here explicitly informed the court of its willingness to forgo injunctive relief if necessary to salvage jurisdiction. We have another problem with the district court's assessment of the third gestalt factor. The court downplayed FMI's convenience because the company "does business in Canada and is represented by presumably capable Canadian attorneys." Id. Putting this spin on the matter emphasizing that the
___ plaintiff could just as easily litigate in a Canadian court effectively nullifies the plaintiff's choice to litigate its suit not in Canada but in Massachusetts. Though such judicial second-
___ guessing may be proper in deciding transfer-of-venue motions or when the plaintiff's supposed convenience "seems to be . . . a makeweight," contrived purely for strategic advantage, courts considering jurisdictional issues generally should "accord plaintiff's choice of forum a degree of deference in respect to the issue of its own convenience . . . ." Ticketmaster, 26 F.3d
____________ at 211. So it is here. We will not comment on the lower court's assessment of 28
the first, fourth, and fifth gestalt factors. It is evident from what we have written to this point that the order of dismissal cannot plausibly rest on the existing assessment of reasonableness. VI. CONCLUSION
VI. CONCLUSION We have come full circle, back to our beginnings. The Boit framework is an expression of pragmatism an authoritative
____ recognition, informed both by experience and by the demands placed on the federal bench, that it is desirable for trial judges, when feasible, to give meaningful, yet not unduly burdensome, scrutiny to the question of jurisdiction at the early stages of particular types of cases. The pragmatic nature of the framework requires courts to proceed with caution, mindful of the risks of overapplication and of the need to give parties ample notice and opportunity to demonstrate that jurisdiction is, or is not, proper. In the case at hand, the district court failed to provide these latter necessities to FMI. The court then compounded its error by weighing extraneous elements in attempting to strike a balance on reasonableness. Thus, we find merit in FMI's appeal. We need go no further. We vacate the order of dismissal. On remand, the district court should alert the parties in advance to the level of scrutiny that it will apply to the pending motion and the factual questions to which the standard will pertain. The court should also allow such further discovery, if any, as may be desirable in light of its 29
intentions. At the appropriate juncture, the court may accept submissions in such form as it deems proper and make its determination on relatedness. If the court deems the basic jurisdictional tests satisfied, it should then undertake a reasonableness analysis that comports with our precedents.8 We take no view on the ultimate resolution of the issues to be addressed on remand, or on the proper weighing of the gestalt factors. Our concern at this stage is primarily with the court's methodology. Vacated and remanded. Costs in favor of appellant.
Vacated and remanded. Costs in favor of appellant.
____________________ ___________________________
____________________ 8We note that BWC's Rule 12(b) motion raised the matter of forum non conveniens as an independent basis for dismissal. The
_____ ___ __________ district court declined to reach that issue. See Foster-Miller,
___ _____________ 848 F. Supp. at 277 n.4. On remand, this issue may be raised again. 30
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898 F.2d 153
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Juan BOSCAN, Petitioner-Appellant,v.UNITED STATES of America, Respondent-Appellee.
No. 89-3642.
United States Court of Appeals, Sixth Circuit.
March 14, 1990.
Before WELLFORD and RYAN, Circuit Judges, and LIVELY, Senior Circuit Judge.
ORDER
1
Juan Boscan, a pro se federal prisoner, appeals the district court's dismissal of his motion to vacate his sentence filed pursuant to 28 U.S.C. Sec. 2255. This case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of the briefs and record, this panel unanimously agrees that oral agrument is not needed. Fed.R.App.P. 34(a).
2
Boscan was indicted in a multi-count indictment charging him with various drug related offenses. Pursuant to a plea agreement, Boscan pleaded guilty to conspiracy to possess with intent to distribute cocaine in violation of 21 U.S.C. Sec. 846; he was sentenced to twenty years imprisonment. Boscan did not pursue a direct appeal of his conviction. The district court denied his motion for a reduction of sentence filed pursuant to Fed.R.Crim.P. 35(b).
3
Thereafter, petitioner filed the instant motion alleging that his guilty plea was involuntary because the district court did not comply with the requirements of Fed.R.Crim.P. 11, because the United States Attorney used his girlfriend as a "chip" to influence his plea, and because he received ineffective assistance of counsel. Allegedly, the court did not: 1) address him personally about the case; 2) inquire whether defense counsel had made any promises to petitioner; 3) advise him about parole; 4) advise him that he could be deported if convicted; and 5) develop a legal or factual basis for the guilty plea. In addition, counsel advised him that he would only receive five years incarceration if he pleaded guilty and that he would be paroled after service of forty-four months; and counsel allegedly had a conflict of interest because counsel wanted final disposition of the matter.
4
The district court denied the motion finding that Boscan's guilty plea was voluntarily entered with a full understanding of the direct consequences of the plea. The court also found that defense counsel had not rendered deficient performance.
5
On appeal, Boscan requests the appointment of counsel, and reasserts his claims regarding the voluntariness of his guilty plea. Boscan, however, has abandoned his ineffective assistance of counsel claims because the issues were not reasserted on appeal. See McMurphy v. City of Flushing, 802 F.2d 191, 198-99 (6th Cir.1986).
6
Upon review, we deny the request for appointment of counsel and affirm the district court's judgment as a review of the plea colloquy indicates that Boscan's plea was voluntarily entered with a full understanding of the direct consequences of the plea. See Brady v. United States, 397 U.S. 742, 755 (1970); Boykin v. Alabama, 395 U.S. 238, 242 (1969). Boscan was informed of his right to a jury trial and of his right to confront and cross-examine witnesses. Boscan was also advised of his privilege against self-incrimination and that the prosecution was required to prove guilt beyond a reasonable doubt. Moreover, the plea agreement was read, and the court informed Boscan of the maximum possible penalty the court could impose. Boscan stated that he was satisfied with counsel's performance and that he was pleading guilty of his own free will. Thus, the record clearly establishes that Boscan's plea was voluntary.
7
Nor do we find any merit to Boscan's individual claims. The district court addressed Boscan throughout the plea proceeding, and asked him if anyone had promised him anything in return for his plea. Moreover, the court was not required to advise Boscan about parole or of the possibility of his being deported. See United States v. Campbell, 778 F.2d 764, 767 (11th Cir.1985); Brown v. Perini, 718 F.2d 784, 788 (6th Cir.1983). But contrast Sparks v. Sowders, 852 F.2d 882, 885 (6th Cir.1988) (gross misinformation regarding parole may affect voluntariness of the plea). The court also established both a legal and factual basis for the plea. The FBI agent in charge of the investigation testified that from the end of February 1986 through June 1986, Boscan supplied kilograms of cocaine to various individuals. Boscan stated that the agent's statements were correct and that he was pleading guilty because he was in fact guilty of conspiracy to distribute cocaine. The court even explained what the term "conspiracy" meant.
8
Finally, we find no merit to Boscan's contention that his girlfriend was used as a "chip" to influence his plea. Boscan's plea agreement provided that the government would dismiss the remaining counts against her if his girlfriend, Zapata, a co-defendant who was a fugitive at the time of Boscan's plea, voluntarily appeared and entered a plea to one count of the indictment. This provision regarding Zapata could not have unduly influenced Boscan's plea because the government was obligated to honor its agreement with Boscan even if Zapata did not appear. Thus, the Zapata provision was in no way detrimental to Boscan.
9
Accordingly, the request for counsel is denied, and the district court's judgment is hereby affirmed pursuant to Rule 9(b)(5), Rules of the Sixth Circuit.
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NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
In Re the Marriage of:
ROBERT W. JORGENSEN,
Petitioner/Appellant,
v.
KATE E. SANDOZ,
Respondent/Appellee.
No. 1 CA-CV 15-0205 FC
FILED 2-9-2016
Appeal from the Superior Court in Maricopa County
No. FC2014-001468 and FC2014-090990 (Consolidated)
The Honorable Timothy J. Thomason, Judge
AFFIRMED
COUNSEL
Morley Mason, PLC, Mesa
By Benjamin K. Mason
Counsel for Petitioner/Appellant
Rowley Chapman Barney & Buntrock, LTD, Mesa
By Scott R. Rowley
Counsel for Respondent/Appellee
JORGENSEN v. SANDOZ
Decision of the Court
MEMORANDUM DECISION
Judge Patricia A. Orozco delivered the decision of the Court, in which
Presiding Judge Margaret H. Downie and Judge Maurice Portley joined.
O R O Z C O, Judge:
¶1 Wayne Jorgensen (Father) appeals from the order setting his
parenting time with his daughter, H.J., on Tuesday and Thursday evenings
and alternate weekends. For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
¶2 Father and Katie Sandoz (Mother) have one child, H.J., who
was born in October 2009. Father and Mother each filed a petition for
dissolution of marriage in February 2014, and the cases were consolidated.
The family court conducted a one-day trial to determine a parenting plan
and the parties were the only witnesses.
¶3
¶4 At trial, Father testified that the existing parenting
arrangement, which had been in place for approximately one year, granted
him custody of H.J. on Tuesday and Thursday evenings and every other
weekend. However, he preferred to have custody of H.J. every other week.
Father also testified regarding his work schedule, salary, home, his
relationship with H.J., the relationship between H.J. and Father’s fiancée
and her children, and his involvement with H.J.’s daily care and medical
care.
¶5 Mother similarly testified about her work, work schedule,
salary, concerns regarding Father’s fiancée caring for H.J., H.J.’s best
interests and H.J.’s daycare arrangements with maternal grandmother.
Mother favored maintaining the existing parenting arrangement.
¶6 Following the parties’ testimony, the court made limited
findings on the record, stating “both parents . . . are good parents, well-
intentioned people and they will do what’s in the child’s best interest.” The
court ultimately found that “the schedule that the parties have been abiding
by is in [H.J.’s] best interest and that . . . schedule should continue.”
2
JORGENSEN v. SANDOZ
Decision of the Court
¶7 After trial, the court made the following findings in a minute
entry that considered the eleven factors set forth in Arizona Revised
Statutes (A.R.S.) section 25-403.A:
1. . . . The relationship of [H.J.] with both parents is excellent.
2. . . . The interaction and interrelationship of [H.J.] with both
parents is good. [H.J.] has a good relationship with Father’s
fiancé and her children. [H.J.] also has a good relationship
with Mother’s Mother, who has spent a large amount of time
with [H.J.].
3. . . . [H.J.] has been spending the majority of time with
Mother. She is in fact well-adjusted to home, school, and
community at Mother’s home. [H.J.] also has spent significant
time with Father and is well-adjusted to home and
community while with Father. Mother claims that she is
better able to provide for [H.J.] since she works less than 40
hours per week. Mother, however, does work a significant
amount of time. [H.J.] is well cared for when Father is
working by Father’s fiancé. [H.J.] has been spending
alternating weekends and Tuesday and Thursday evening
with Father for the last year. Moving to 50/50 parenting time
would be disruptive to [H.J.].
4. . . . [H.J.] would like to spend time with both parents.
5. . . . The physical and mental health of all parties is good.
6. . . . Both parents will provide [H.J.] with frequent,
meaningful and continuing contact with the other parent.
7. . . . There is no evidence [regarding parents’ bad faith].
8. . . . There is no evidence [regarding domestic violence].
9. . . . There is no evidence of coercion in the parties’
agreement on joint legal decision making.
10. . . . Both parties have complied [with the Arizona
Revised Statutes].
11. . . . There is no evidence [regarding false reporting of
child abuse].
3
JORGENSEN v. SANDOZ
Decision of the Court
The court’s findings were also incorporated in the divorce decree.
¶8 Father filed a motion to alter or amend the decree, which the
court denied as to the parenting time arrangement in an unsigned minute
entry. Father filed a notice of appeal from the unsigned minute entry. This
court then stayed the appeal to allow Father to obtain a signed final order.
The family court signed the minute entry, and the appeal was reinstated.
We have jurisdiction pursuant to Article 6, Section 9, of the Arizona
Constitution, and A.R.S. §§ 12-120.21.A.1 and -2101.A (West 2015).1
DISCUSSION
¶9 When physical custody of a child is contested, the family
court must comply with A.R.S. § 25-403 and make specific findings as to
why its decision is in the child’s best interests. Nold v. Nold, 232 Ariz. 270,
273, ¶ 11 (App. 2013). We will not disturb the family court’s parenting time
order absent an abuse of discretion. Id. “An abuse of discretion exists when
the record, viewed in the light most favorable to upholding the trial court’s
decision, is ‘devoid of competent evidence to support’ the decision.” Little
v. Little, 193 Ariz. 518, 520, ¶ 5 (1999).
¶10 Father argues that he “has scoured the record and there is no
testimony offered by any party, nor any other evidence in the record, which
would support [the] conclusion” that moving to a 50/50 parenting time
arrangement would be disruptive for H.J. and not in her best interests.
However, sufficient evidence supports the family court’s conclusion. See
Mary Lou C. v. Ariz. Dep’t. of Econ. Sec., 207 Ariz. 43, 47, ¶ 8 (App. 2004)
(“[T]his court will not reweigh evidence but will look only to determine if
there is evidence to sustain the court’s ruling.”).
¶11 Pursuant to A.R.S. § 25-403, the family court made factual
findings regarding parenting time in accordance with H.J.’s best interests.
Cf. In re Marriage of Diezsi, 201 Ariz. 524, 526, ¶ 5 (App. 2002) (holding that
the trial court abused its discretion where the court’s order and record did
not contain requisite findings under A.R.S. § 25-403). The family court
found that “[m]oving to a 50/50 parenting time would be disruptive to
[H.J.],” which is supported by the record. For example, Mother testified
that she is home in the mornings, is able to make H.J. breakfast, get her
ready and take her to school. In contrast, Father leaves for work “between
6:00 and 7 o’clock,” before H.J. wakes up. Mother also gave unrefuted
1 We cite the current version of applicable statutes when no revisions
material to this decision have since occurred.
4
JORGENSEN v. SANDOZ
Decision of the Court
testimony that H.J. had never been away from her for more than five days
and she believed a week-on week-off schedule “would be very traumatic”
and “hard on [H.J.]. I think she’ll have terrible ups and downs, mood
swings, confusion of where she should be living. There’s no home base.”
¶12 Father next contends that the family court erred by continuing
the existing parenting plan because it does not maximize his parenting time
as required by A.R.S. § 25-403.02.B. Under A.R.S. § 25-403.02.B, “the court
shall adopt a parenting plan . . . that maximizes [each parent’s] respective
parenting time,” but the parenting plan must be “[c]onsistent with the child’s
best interests.” (Emphasis added). As explained above, sufficient evidence
supported the family court’s conclusion that a 50/50 parenting time
arrangement would be disruptive for H.J. and therefore would not be in
H.J.’s best interests. Accordingly, the family court did not abuse its
discretion by continuing the existing parenting plan.
¶13 Father also argues that the parenting plan restricts his
parenting time in violation of A.R.S. § 25-411.J, because the family court did
not find that his “parenting time would endanger seriously [H.J.’s]
physical, mental, moral or emotional health.” See A.R.S. § 25-411.J. This
statute is not applicable for two reasons. First, Father’s parenting time was
not restricted, because the family court’s ruling continued the same
parenting plan that had been in place for approximately a year. Second,
A.R.S. § 25-411 governs motions to modify parenting time when there has
been a material change in circumstances or endangerment of the child’s
welfare. See A.R.S. § 25-411.A. Because this case does not involve a change
in circumstances or endangerment of H.J.’s welfare, the statute does not
apply.
¶14 Finally, Mother requests attorney fees under A.R.S. § 25-324.
In our discretion we deny Mother’s request for attorney fees, because Father
did not take an unreasonable position on appeal, and there is no significant
disparity of income between the parties. See A.R.S. § 25-324.A. However,
as the prevailing party, Mother is entitled to her costs on appeal, upon
compliance with Rule 21, Arizona Rules of Civil Appellate Procedure.
5
JORGENSEN v. SANDOZ
Decision of the Court
CONCLUSION
¶15 For the foregoing reasons, we affirm the family court’s ruling.
:ama
6
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 18-6836
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
CHARLES D. IZAC,
Defendant - Appellant.
Appeal from the United States District Court for the Northern District of West Virginia,
at Martinsburg. John Preston Bailey, District Judge. (3:02-cr-00058-JPB-MJA-1)
Submitted: November 15, 2018 Decided: November 20, 2018
Before MOTZ and HARRIS, Circuit Judges, and HAMILTON, Senior Circuit Judge.
Affirmed by unpublished per curiam opinion.
Charles D. Izac, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Charles D. Izac appeals the district court’s orders denying his motion for
resentencing and his renewed motion for resentencing. We have reviewed the record and
find no reversible error. Accordingly, we affirm for the reasons stated by the district
court. United States v. Izac, No. 3:02-cr-00058-JPB-MJA-1 (N.D.W. Va. May 22, 2018
& June 6, 2018). 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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[Cite as State v. Gooden, 2012-Ohio-2042.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
STATE OF OHIO C.A. No. 26028
Appellee
v. APPEAL FROM JUDGMENT
ENTERED IN THE
JOE MELVIN GOODEN COURT OF COMMON PLEAS
COUNTY OF SUMMIT, OHIO
Appellant CASE No. CR 09 04 1082
DECISION AND JOURNAL ENTRY
Dated: May 9, 2012
MOORE, Judge.
{¶1} Appellant, Joe M. Gooden, appeals the judgment of the Summit County Court of
Common Pleas. This Court affirms.
I.
{¶2} In 2007, Gooden pleaded guilty to five charges, including intimidation of a crime
victim or witness, a felony of the third degree. As part of his sentence, the trial court imposed
three years of postrelease control. Gooden did not appeal from this sentencing order. In 2009,
Gooden pleaded guilty to charges of domestic violence and disrupting public services. The trial
court sentenced Gooden to three years of incarceration on the domestic violence charge and one
year of incarceration on the disrupting public services charge, to be served concurrently. The
court further ordered that Gooden serve an additional one-year sentence as a postrelease control
sanction, consecutive to his domestic violence and disrupting public services sentences. Gooden
did not appeal the 2009 sentencing order.
2
{¶3} In 2010, Gooden filed a motion to correct his 2009 sentence because he argued
that his 2007 sentence was void due to a purportedly improper imposition of the three-year
period of postrelease control. From this premise, Gooden argued that his 2009 conviction
imposing a sanction for violating postrelease control was also void. We dismissed the appeal
due to Gooden’s failure to timely file a merit brief.
{¶4} Gooden then petitioned this court for a writ of procedendo to compel the trial
court judge to issue “a final, appealable order in his criminal case,” contending that neither the
2007 nor the 2009 sentencing entry was a final, appealable order. We dismissed this petition,
and the Supreme Court affirmed the dismissal.
{¶5} Gooden subsequently filed a motion in the trial court to correct his 2009 sentence.
The trial court denied this motion on June 16, 2011. Gooden filed a timely notice of appeal from
the trial court’s order and presents one assignment of error for our review.
II.
ASSIGNMENT OF ERROR
THE TRIAL COURT ERRED WHEN IT DENIED GOODEN’S MOTION TO
CORRECT HIS UNLAWFUL SENTENCE.
{¶6} In his sole assignment of error, Gooden argues that his 2007 conviction
improperly imposed postrelease control, causing that portion of his 2007 sentence to be void.
Therefore, Gooden argues that the trial court could not sentence him to a postrelease control
violation sanction of one year in 2009, and that portion of his 2009 sentence imposing the one-
year sanction must be vacated.
{¶7} Pursuant to R.C. 2929.141, “Upon the conviction of or plea of guilty to a felony
by a person on post-release control at the time of the commission of the felony, the court may
terminate the term of post-release control,” and the court may then either “impose a prison term
3
for the post-release control violation” or “impose a sanction under sections 2929.14 to 2929.18
of the Revised Code[.]” Here, the trial court, having determined that Gooden was on postrelease
control at the time of his 2009 conviction, imposed upon him a one-year prison term for the
postrelease control violation pursuant to R.C. 2929.141.
{¶8} In reviewing this Court’s dismissal of Gooden’s petition for a writ of procedendo,
the Ohio Supreme Court held that “[a]lthough Gooden’s original sentence in 2007 may have
been defective in the imposition of postrelease control, his 2009 sentence included the correct
terms of postrelease control.” State ex rel. Gooden v. Teodosio, 128 Ohio St.3d 538 (2011).
Further, the Court determined that “[i]nsofar as Gooden claims that [the trial court] improperly
enhanced his 2009 sentence based on Gooden’s violation of his 2007 postrelease control, he had
an adequate remedy by way of appeal from the 2009 sentence to raise that issue.” Id.
{¶9} However, as noted above, Gooden did not directly appeal from his 2009 sentence.
It is long-standing precedent in Ohio that res judicata bars the consideration of issues that could
have been raised on direct appeal. (Citations omitted.) State v. Saxon, 109 Ohio St.3d 176, 2006-
Ohio-1245, ¶ 16-17. However, principles of res judicata do not apply to review of void
sentences. State v. Fischer, 128 Ohio St.3d 92, 2010-Ohio-6238, paragraph two of the syllabus.
Gooden cites Fischer for the proposition that his 2007 sentencing entry was void to the extent
that it improperly imposed postrelease control. See Fischer at ¶ 26 (“when a judge fails to
impose statutorily mandated postrelease control as part of a defendant's sentence, that part of the
sentence is void and must be set aside”). Gooden argues that, to the extent that the court’s 2007
sentencing entry imposed postrelease control, it is void because the trial court failed to set forth
that his third degree felony conviction included physical violence or a threat of physical violence
and because the entry did not set forth possible consequences resulting from a violation of
4
postrelease control. Gooden then cites the Fifth District’s holding in State v. Henderson, 5th
Dist. No. 10-COA-012, 2011-Ohio-1791, to support his contention that res judicata does not
preclude review of a postrelease control sanction where the underlying term of postrelease
control was improperly imposed.
{¶10} In Henderson, the defendant was convicted of a felony in 2007 while he was
subject to postrelease control resulting from his previous convictions from 2002. Id. at ¶ 3, 18-
21. The trial court ordered the defendant to serve an additional 659 days in prison as a sanction
for the postrelease control violation. Id. at ¶ 22. The defendant appealed from his 2007
sentencing entry, and the Fifth District affirmed his conviction. Id. at ¶ 4. In 2009, the defendant
filed a motion to correct his sentence, arguing that the underlying postrelease control
notifications were void, and thus the trial court could not sentence him to a postrelease control
violation sanction in 2007. Id. at ¶ 5. The trial court denied his motion, but the Fifth District
reversed, noting deficiencies in each of the underlying postrelease control notifications, and
determining that the defendant’s previous sentencing entries were void insofar as these entries
incorrectly imposed postrelease control. Id. at ¶ 22. Therefore, the Fifth District determined
that the trial court erred in failing to correct his 2007 sentence, because the court lacked authority
to therein impose a postrelease control sanction. Id. at ¶ 23.
{¶11} However, in State v. Walker, 5th Dist. No. 11-COA-046, 2012-Ohio-1513, the
Fifth District recently noted a significant limitation to its holding in Henderson. In Walker, the
postrelease control sentence at issue was imposed after the effective date of R.C. 2967.28. Id. at
¶ 21. Therefore, the court noted that the case fell “within the purview of R.C. 2967.28(B), which
states a trial court’s failure to properly impose postrelease control for sentences imposed on or
after July 11, 2006 does not negate, limit or otherwise affect the mandatory period of postrelease
5
control for a felony of the third degree in the commission of which the offender caused or
threatened physical harm to a person.” Id. See also R.C. 2967.28(B). Thus, the Fifth District
itself has specifically limited its holding in Henderson to those cases where the underlying period
of postrelease control was imposed prior to July 11, 2006. Walker at ¶ 21. Here, Gooden was
sentenced to three years of post-release control in 2007, and thus, any reliance on Henderson is
misplaced.
{¶12} Therefore, pursuant to R.C. 2967.28(B), the errors alleged by Gooden as to the
imposition of the mandatory three years of postrelease control do not affect the validity of the
postrelease control so imposed. As there is no other basis on which Gooden challenges his 2009
conviction as void, his challenges to the postrelease control sanction could have been raised on
direct appeal, and our review is barred by res judicata. Accordingly, Gooden’s assignment of
error is overruled, and the judgment of the trial court is affirmed.
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
6
Costs taxed to Appellant.
CARLA MOORE
FOR THE COURT
WHITMORE, P. J.
CARR, J.
CONCUR.
APPEARANCES:
JOE M. GOODEN, pro se, Appellant.
SHERRI BEVAN WALSH, Prosecuting Attorney, and RICHARD S. KASAY, Assistant
Prosecuting Attorney, for Appellee.
| {
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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0180n.06
No. 10-6433
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
IBEW PACIFIC COAST PENSION FUND, Feb 13, 2012
Plaintiff-Appellee, LEONARD GREEN, Clerk
v.
ON APPEAL FROM THE UNITED
CLETA M. LEE, STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF TENNESSEE
Defendant-Appellant,
v.
LOIS A. LEE,
Defendant-Appellee.
/
BEFORE: BATCHELDER, Chief Judge, CLAY, and GILMAN, Circuit Judges.
CLAY, Circuit Judge. Defendant Cleta M. Lee appeals the district court’s award of benefits
to Defendant Lois A. Lee in this interpleader action brought by the International Brotherhood of
Electrical Workers Pacific Coast Pension Fund’s (“the Pension Fund”). Because the district court
incorrectly decided that there were no material factual disputes and that Defendant Lois A. Lee was
entitled to prevail as a matter of law, we REVERSE the district court’s judgment and REMAND
for further proceedings consistent with this opinion.
No. 10-6433
STATEMENT OF FACTS
From November 1978 through December 1991, Wayne Lee was a member of the
International Brotherhood of Electrical Workers and contributed to the Pension Fund. Wayne Lee
married Cleta M. Lee in the state of Washington in February 1979, and the couple appear to have
never divorced.
In 1992 or 1993, Wayne moved to Mississippi from Washington without Cleta in order to
find a job.1 He married Lois in that state in 1995. In February 1997, Wayne retired and applied for
benefits from the Pension Fund. On his pension application, Wayne identified himself as married
and named Lois as his spouse. He elected a “50% Husband-and-Wife” pension plan, under which
he deferred half of his accrued pension to be paid monthly to his “spouse” after he died. Wayne and
Lois both signed a statement agreeing to the date on which the annuity would commence. Wayne
also attached his Mississippi marriage certificate memorializing his marriage to Lois. On his
“Retired Employee’s Signature and Beneficiary Form,” Wayne listed Lois as the beneficiary of “any
benefits which may be payable from the IBEW Pacific Coast Pension Fund as the result of [his]
death.”
Wayne passed away in January 2007. The Pension Fund began paying Lois a monthly
pension on February 1, 2007. Cleta applied for survivor benefits from the Pension Fund later in
February 2007, attaching her 1979 marriage certificate and explaining that she and Wayne had never
1
We refer to Wayne, Cleta, and Lois Lee by their first names in order to avoid confusion
arising from their shared last name.
-2-
No. 10-6433
divorced. The Pension Fund subsequently filed this interpleader action in the United States District
Court for the Eastern District of Tennessee, the district in which Lois currently resides. See 28
U.S.C. § 1391(b). The Pension Fund impleaded both claimants to the disputed Pension Fund
proceeds so that both would be bound by the district court’s ruling, after which the district court
concluded that Lois was the proper beneficiary of Wayne’s pension benefits. Reasoning that the
employee’s pension plan documents supply the exclusive basis for settling a beneficiary dispute, the
court concluded that Lois was entitled to benefits because Wayne identified Lois as both his spouse
and his beneficiary in his pension application. Cleta’s timely appeal followed.
DISCUSSION
We have subject matter jurisdiction over an interpleader action initiated to determine the
proper beneficiary of an employee pension benefit plan. 29 U.S.C. § 1132(a)(3)(B)(ii); Cent. States,
Se. & Sw. Areas Pension Fund v. Howell, 227 F.3d 672, 674 n.2 (6th Cir. 2000). We review the
district court’s grant of summary judgment de novo. Wimbush v. Wyeth, 619 F.3d 632, 636 (6th Cir.
2010). A party is entitled to summary judgment if the record “taken as a whole could not lead a
rational trier of fact to find for the non-moving party.” Fed. R. Civ. P. 56(a); Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
When faced with a dispute over the proper beneficiary for benefits under the Employee
Retirement Income Security Act of 1974 (“ERISA”), ERISA “supplies the rule of law” for making
that determination. Metro. Life Ins. Co. v. Pressley, 82 F.3d 126, 129–30 (6th Cir. 1996); see 29
U.S.C. § 1001 et seq. That rule requires, first and foremost, that an ERISA plan administrator pay
-3-
No. 10-6433
benefits “in accordance with the documents and instruments governing the plan.” 29 U.S.C. §
1104(a)(1)(D). We have read § 1104(a)(1)(D) to lay down a “clear mandate” that a plan
administrator must “follow plan documents to determine the designated beneficiary.” Metro. Life
Ins. Co. v. Marsh, 119 F.3d 415, 420 (6th Cir. 1997); see Union Sec. Ins. Co. v. Blakeley, 636 F.3d
275, 276 (6th Cir. 2011) (“ERISA directs that the plan documents determine the beneficiaries . . .
and repeatedly underscores the primacy of the written plan.”). Thus, we settle any question regarding
the proper beneficiary of a pension plan according to the plan documents, so long as the documents
provide “a workable means” of settling the dispute. Id.
Application of these rules to Wayne’s survivor benefits requires the Pension Plan to pay
benefits to Wayne’s legal spouse. According to the plan documents, Wayne’s selection of a “50%
Husband-and-Wife” pension guaranteed Wayne’s wife a lifetime pension starting after his death.
The plan documents define a “spouse” as “a person to whom a Participant is legally married.”
Consistent with 29 U.S.C. § 1055(c)(2)(A), the documents permit the participant and his spouse to
waive joint and survivor benefits only if the spouse consents to the waiver in writing.2 Hence, the
2
Section 1055(c)(2)(A) allows a participant to waive the joint and survivor annuity form of
benefit only if:
(i) the spouse of the participant consents in writing to such election,
(ii) such election designates a beneficiary (or a form of benefits)
which may not be changed without spousal consent (or the consent of
the spouse expressly permits designations by the participant without
any requirement of further consent by the spouse), and (iii) the
spouse’s consent acknowledges the effect of such election and is
witnessed by a plan representative or a notary public.
-4-
No. 10-6433
Pension Plan must pay spousal benefits to Wayne’s legal spouse in order to comply with ERISA’s
“clear mandate that plan administrators follow plan documents to determine the designated
beneficiary.” Marsh, 119 F.3d at 420.
Wayne identified Lois as his spouse, but the validity of that designation appears to be
incorrect. Mississippi, the state in which Wayne and Lois married, observes a presumption in favor
of the validity of a successive marriage, but that presumption may be overcome with evidence that
the first marriage was not dissolved by divorce or annulment. Dale Polk Const. Co. v. White, 287
So.2d 278, 279 (Miss. 1973); United Timber & Lumber Co. v. Alleged Dependents of Hill, 84 So.2d
921, 924 (Miss. 1956). Washington and Tennessee maintain the same rule.3 Wash. Rev. Code §
26.04.020(1)(a); Seizer v. Sessions, 915 P.2d 553, 559 n.22 (Wash. Ct. App. 1996), rev’d on other
grounds, 940 P.2d 261 (Wash. 1997); Guzman v. Alvares, 205 S.W.3d 375, 381 (Tenn. 2006).
Relying on Wayne’s designation of Lois as his spousal beneficiary, the district court did not
determine whether the marriage between Wayne and Cleta was dissolved by divorce. From the
record it appears likely that their marriage was not, though we leave that question for the district
court to answer after appropriate inquiry. If it was not dissolved by divorce or annulment, then Cleta
3
In DaimlerChrysler Corp. HealthCare Benefits Plan v. Durden, 448 F.3d 918 (6th Cir.
2006), we explained that a federal court looks to § 283 of the Restatement (Second) of Conflict of
Laws to decide “the law applicable to determining the validity of a marriage,” where a dispute over
spousal benefits turns on the validity of a marriage. Id. at 925. Section 283 calls for the
determination of the validity of a marriage under the law of the state that “has the most significant
relationship to the spouses and the marriage.” Id. (quoting Rest.2d Conflict of Laws § 283(1)). We
leave it to the district court to determine which state has the most significant relationship to the
marriage between Wayne and Cleta, though that determination is likely inconsequential since all
three states observe the same governing rule.
-5-
No. 10-6433
would be Wayne’s surviving spouse. And Cleta’s status as Wayne’s surviving spouse would take
precedence over Wayne’s express selection of Lois as his spouse and beneficiary, because Cleta has
not waived receipt of the benefits as required by 29 U.S.C. § 1055(c)(2)(A). Moore v. Phillip Morris
Companies, Inc., 8 F.3d 335, 340 (6th Cir. 1993).
Reliance on state law for determining Wayne’s marital status does not run afoul of ERISA’s
preemptive effect on state laws that “relate to” an ERISA plan. 29 U.S.C. § 1144(a). Plan
administrators and federal courts routinely rely on state law to identify a participant’s spouse in
determining the proper recipient of spousal benefits. See DaimlerChrysler Corp. HealthCare
Benefits Plan v. Durden, 448 F.3d 918, 928 (6th Cir. 2006); see also Robinson v. New Orleans
Employers ILA AFL-CIO Pension Welfare Vacation & Holiday Funds, 269 F. App’x 516, 518–19
(5th Cir. 2008); Crosby v. Crosby, 986 F.2d 79, 82 (4th Cir. 1993); Malhiot v. So. Cal. Retail Clerks
Union, 735 F.2d 1133, 1135–36 (9th Cir. 1984). In fact, the failure to rely on the state-law
determination of the identity of Wayne’s lawful spouse would conflict with the plan documents’
definition of spouse, which in turn would represent a failure to honor “the primacy of the written
plan” governing Wayne’s benefits. Blakely, 636 F.3d at 276. And if Cleta is Wayne’s surviving
spouse, then both § 1055(c)(2)(A) and the implementing provision of Wayne’s plan documents
prohibited him from naming a beneficiary other than Cleta without her permission by notarized
writing.
The terms of § 1055(c)(2)(A) have been appropriately described as “clear and unambiguous,”
and the courts have applied it as such. Moore, 8 F.3d at 340. In Moore, for example, the participant
-6-
No. 10-6433
designated her children as beneficiaries of her stake in the employer’s deferred profit-sharing plan,
attempting to bypass her adulterous husband. Id. at 338–39. Based on the “clear and unambiguous”
terms of § 1055(c)(2)(A), we concluded that the husband was entitled to the participant’s benefits
and that § 1055(c)(2)(A) preempted a state law that required an adulterous spouse to forfeit his right
to proceeds of the decedent’s estate. Id. at 340–41; see also Hagwood v. Newton, 282 F.3d 285, 290
(4th Cir. 2002) (“[T]he formalities required in § 1055(c) are included to protect against the risks of
a spouse’s unwitting waiver of [the spousal rights conferred by § 1055(a)].”). The provision’s
application to this case appears “clear and unambiguous” as well: simply selecting Lois as his
beneficiary could not overcome the stringent requirements of § 1055(c)(2)(A), which condition
Wayne’s selection of Lois on Cleta’s permission. Moore, 8 F.3d at 340.
The district court misread our cases in awarding Lois benefits. The court relied upon
McMillan v. Parrott, 913 F.2d 310 (6th Cir. 1990), in which we awarded benefits to an ERISA
participant’s ex-wife, even though the ex-wife signed a divorce settlement releasing all claims
against the participant. The participant, Dr. Parrott, created two pension plans in which he named
his then-wife, Barbara, as beneficiary. Id. at 310–11. When Dr. Parrott and Barbara divorced, they
entered into a joint settlement dividing their property and relinquishing “any and all” claims against
one another. Id. at 311. Dr. Parrott did not, however, name another pension beneficiary. Id. Dr.
Parrott married Claudia four years after divorcing Barbara, and he died shortly thereafter. Id. at 310.
Claudia sought benefits as Dr. Parrott’s wife, but the court rejected her request. Id. at 311.
-7-
No. 10-6433
We concluded that the release agreement between Barbara and Dr. Parrott did not waive
Barbara’s entitlement to Dr. Parrott’s pension benefits, reasoning that ERISA preempted the state
law governing the release agreement. Id. As we explained, ERISA’s preemptive effect required that
Dr. Parrott’s beneficiary designation trumped any possible effect of the release agreement: “Simply
put, it was Dr. Parrott’s designation which controls, not Barbara’s intent [by signing the release
agreement]. Under the plans, we determine his intent by the designation on file at the time of his
death.” Id. at 312.
The district court read McMillan to support the conclusion that Wayne could name Lois as
his beneficiary regardless of the validity of the couple’s marriage. That reading is insufficiently
tailored to a key distinction between that case and this one. McMillan, along with other cases from
this circuit pitting an ex-spouse against a surviving spouse in connection with a benefits
determination, assumed that the participant validly married the first spouse, validly ended that
marriage, and then validly married the second spouse. See Howell, 227 F.3d at 676–77 (listing cases
and explaining that “[w]e have explicitly and repeatedly held that . . . the beneficiary card controls
whom the plan administrator must pay [even if] the surviving spouse had waived the right to receive
benefits . . . as part of a divorce settlement”). Under this line of cases, when a participant enters into
a valid second marriage after validly dissolving the first, the beneficiary designation of his ex-spouse
retains effect unless the participant changes the designation or obtains a “qualified domestic relations
order” altering the designation. See 29 U.S.C. §§ 1056(d)(3), 1144(b)(7); Howell, 227 F.3d at 677.
-8-
No. 10-6433
In this case, by contrast, it would appear that Wayne had only one valid marriage. It seems
he had no validly wed second spouse to name as a beneficiary, and he did not obtain a qualified
domestic relations order altering his designation. Cleta was likely his wife, and, if so, her permission
was required for Wayne’s designation of Lois as his beneficiary. See § 1005(c)(2)(B).
The peculiar facts of this case also explain why the district court erred in concluding it was
not bound by Durden. 448 F.3d 918 (6th Cir. 2006). In Durden, we were required to make a
pension benefits determination where—just as in this case—the participant married a second wife
without first divorcing his first and—unlike this case—the participant failed to designate a
beneficiary. Id. at 919–21. Applying the Restatement (Second) of Conflicts of Law to determine
the validity of a choice-of-law provision in the participant’s plan documents, we concluded that the
participant’s second marriage was invalid and that the participant’s first wife was his surviving
spouse entitled to pension benefits. Id. at 928. In dicta, we noted that the participant failed to
designate a beneficiary. See id. at 921 (“[The participant] did not designate a beneficiary for the life
insurance, and when no beneficiary is named, the surviving spouse is first in line of succession to
receive the proceeds.”). The district court read this language to imply that a participant’s express
selection of a beneficiary other than the lawful spouse overrides the claim of the true spousal
beneficiary.
The district court read too much into the Durden dicta. If the Durden participant had chosen
someone other than his legal spouse as a beneficiary, § 1055(c)(2)(A) would have required either an
award of benefits to the participant’s legal spouse or her consent to a waiver of those benefits. The
-9-
No. 10-6433
object of our inquiry in Durden was to determine which of two claimants was the participant’s
spouse, who was either entitled to benefits or charged with the option to consent to a waiver. Since
no beneficiary was named, we proceeded to rely upon the state law governing the identification of
the proper spousal beneficiary. We referred to the possibility of a non-spousal beneficiary on the
assumption that such a beneficiary might be selected according to the requirements of §
1055(c)(2)(A). Had a non-spousal beneficiary been named, § 1055(c)(2)(A) still would have
required us to determine a participant’s legal spouse, as this case demonstrates.
CONCLUSION
Although it appears to us that Cleta is Wayne’s surviving spouse, the district court made no
express finding on that point. The district court is in the best position to determine whether Cleta
and Wayne were divorced before Wayne married Lois. It should determine which woman was
Wayne’s spouse at the time of his death and then determine the proper beneficiary of Wayne’s
pension benefits. For the reasons stated above, we REVERSE the district court’s judgment and
REMAND for further proceedings in accordance with this opinion.
-10-
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Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
7-10-2007
Bucknor v. Atty Gen USA
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-1624
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 06-1624
DEVON A. BUCKNOR,
Petitioner
v.
ATTORNEY GENERAL OF THE UNITED STATES,
Respondent
On Petition for Review of an Order of the
United States Department of Justice
Board of Immigration Appeals
BIA No. A72-784-868
(Honorable Eugene Pugliese, Immigration Judge)
Submitted Pursuant to Third Circuit LAR 34.1(a)
March 13, 2007
Before: FUENTES, VAN ANTWERPEN, and SILER,* Circuit Judges.
(Filed July 10, 2007)
OPINION OF THE COURT
_____________
* The Honorable Eugene E. Siler, Jr., Senior United States Circuit Judge for the Sixth
Circuit, sitting by designation.
SILER, Circuit Judge.
Petitioner Devon A. Bucknor, a native and citizen of Jamaica, seeks review of the
January 26, 2006, Order of the Board of Immigration Appeals (“BIA”) that affirmed the
Immigration Judge’s (“IJ”) denial of Bucknor’s request for waiver of removal. We have
jurisdiction to review the petition pursuant to 8 U.S.C. § 1252(a), and for the reasons set
forth below, we will deny the petition.
I.
Because we write solely for the benefit of the parties, we will set forth only those
facts necessary to our analysis.
Bucknor entered the United States at an unknown place and time. On April 25,
2005, the government commenced removal proceedings against Bucknor on two grounds:
1) as an alien present in the United States without being admitted or paroled, 8 U.S.C. §
1182(a)(6)(A)(i); and 2) as an alien convicted of a crime involving moral turpitude, 8
U.S.C. § 1182(a)(2)(A)(i)(I).1 Bucknor admitted alienage, contested removal and sought
a waiver of removal under 8 U.S.C. § 1182(h).2
1
On January 15, 2003, Bucknor was convicted of embezzling things of value of the
United States worth $165,286.63, 18 U.S.C. § 641. Bucknor does not contest the
conviction or that it constitutes a crime of “moral turpitude.”
2
Section 1182(h) provides, in relevant part:
The Attorney General may, in his discretion, waive the application of
subparagraphs . . . (a)(2) of this section . . . if . . . in the case of an
immigrant who is the spouse, parent, son, or daughter of a citizen of the
United States or an alien lawfully admitted for permanent residence, if it is
established to the satisfaction of the Attorney General that the alien’s denial
2
During the 2005 hearing, the IJ questioned whether Bucknor’s immigration status
could be adjusted even if Bucknor were granted a waiver of removal for the
embezzlement conviction. The IJ pointed out that Bucknor was still removable under §
1182(a)(6)(A)(i), which could not be waived under 8 U.S.C. § 1182(h). Bucknor
thereafter indicated that he had previously filed an application for adjustment of his
illegal status under the Legal Immigration Fairness and Equity (“LIFE”) Act, Pub. L. 106-
553, 114 Stat 2762 (2000), which was pending before United States Citizenship and
Immigration Services (“CIS”), in the Department of Homeland Security (“DHS”), at the
time of the hearing.3 Therefore, Bucknor averred that the IJ need only address the waiver
of removal issue. Although the status of Bucknor’s LIFE Act application before CIS was
uncertain at the time of the hearing, the IJ proceeded to address the merits of Bucknor’s
claim.
The IJ ruled that Bucknor’s application for adjustment of status under the LIFE
of admission would result in extreme hardship to the United States citizen
or lawfully resident spouse, parent, son, or daughter of such alien.
8 U.S.C. § 1182(h).
3
Under the LIFE Act, an eligible alien may adjust status to become a lawful
permanent resident if the following conditions have been met: 1) an application was filed
between June 1, 2001 and June 4, 2003; 2) the alien entered the United States before
January 1, 1982 and resided here continuously through May 4, 1988; 3) the alien was
continuously physically present in the United States between November 6, 1986 and May
4, 1988; and 4) the alien is not inadmissable under any of the provisions of the INA §
212(a), including not having been convicted of a felony. See 8 C.F.R. § 245a.11. An
alien who is prima facie qualified for adjustment of status under the LIFE Act may
request that any deportation or removal proceeding before the Immigration Court or BIA
be administratively closed or continued in order to allow the alien to pursue the LIFE Act
application. 8 C.F.R. § 245.a12(b)(1).
3
Act was of no utility to his § 1182(h) waiver application. This was because Bucknor’s
felony conviction for embezzlement rendered him ineligible for LIFE Act relief. See 8
U.S.C. § 1101(a)(43)(M)(i) (classifying fraud or deceit in which loss to the victim
exceeds $10,000 as an aggravated felony under the INA). Therefore, the IJ did not
consider Bucknor’s § 1182(h) waiver application and ordered Bucknor removed.
In 2006, the BIA dismissed Bucknor’s appeal. It stated that it would not consider
Bucknor’s request for remand as “a waiver will generally only be granted where the grant
would effect a complete disposition of the case.” Bucknor remained removable under §
1182(a)(6)(A)(i) even if the § 1182(h) waiver were granted for removal based on his
embezzlement conviction. Further, the BIA noted that Bucknor’s only possible relief for
removal based upon the § 1182(a)(6)(A)(i) ground was the LIFE Act, for which he was
ineligible. As a final matter, the BIA noted that to the extent the IJ exceeded his authority
by preterminating Bucknor’s LIFE Act application, any error was harmless as DHS was
not bound by the IJ’s decision on this matter.
II.
We review the BIA’s legal conclusions de novo, giving appropriate deference to
the agency’s interpretation of the underlying statute. Zheng v. Gonzales, 422 F.3d 98,
108 (3d Cir. 2005). Because the BIA adopted the IJ’s findings and discussed some of the
bases for the IJ’s decision, both the BIA’s and the IJ’s decisions are before us for review.
He Chun Chen v. Ashcroft, 376 F.3d 215, 222 (3d Cir. 2004).
4
III.
Bucknor contends that the IJ erred by not considering his § 1182(h) request for
waiver on the merits. However, as previously determined by the IJ and the BIA, §
1182(h) was of no use to Bucknor because even if removal for the embezzlement
conviction had been waived, Bucknor remained removable under § 1182(a)(6)(A)(i).
Therefore, the BIA’s decision not to remand the waiver issue to the IJ was correct
because Bucknor would have been removed regardless of the waiver. See, e.g., Matter of
Luis-Rodriguez, 22 I. & N. Dec. 747, 753 (BIA 1999) (“[T]his Board has reserved the
discretion to dismiss appeals and deny motions as moot as a discretionary matter of
prudence. . . . where a controversy has become so attenuated or where . . . an action by
one of the parties has deprived an appeal or motion of practical significance.”).
Bucknor also contends that the BIA’s prejudgment of the LIFE Act claim created
an inappropriate legal standard because adjustment of status under the LIFE Act is left to
the exclusive realm of DHS. However, where a petitioner cannot establish prima facie
eligibility for adjustment of status under the LIFE Act, the IJ is under no duty to grant a
continuance of removal proceedings pending resolution of the LIFE Act application. See
Khan v. Attorney General, 448 F.3d 226, 234-35 (3d Cir. 2006). Bucknor’s
embezzlement conviction clearly rendered him unable to make out a prima facie case for
LIFE Act relief. See 8 C.F.R. § 245a.18 (providing that felony convictions for crimes
involving moral turpitude render an applicant ineligible under the LIFE Act and may not
5
be waived). Accordingly, the BIA did not apply an incorrect legal standard in finding
Bucknor ineligible for adjustment of status.
Bucknor finally contends that had the IJ adjudicated his waiver request, his felony
embezzlement conviction would have no longer rendered him ineligible for adjustment of
status under the LIFE Act. However, waiver for purposes of § 1182 “does not preclude
the INS or courts from relying on the underlying offense to bar other forms of
immigration relief or benefits.” Chan v. Ganter, 464 F.3d 289, 295 (3d Cir. 2006).
Therefore, Bucknor’s contention does not persuade us that the BIA’s decision was
erroneous.
III.
We have considered all other arguments made by the parties on appeal and find
that no further discussion is necessary. For the foregoing reasons, we conclude that the
BIA did not apply an improper legal standard, and we will deny the petition for review.
6
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T.C. Memo. 1998-385
UNITED STATES TAX COURT
THERESA SALOPEK, ET AL.,1 Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 14160-97, 14161-97, Filed October 26, 1998.
14162-97, 14163-97.
David P. Leeper, for petitioners.
David B. Mora, for respondent.
MEMORANDUM OPINION
1
Cases of the following petitioners are consolidated
herewith: Mark and Marcie M. Salopek, docket No. 14161-97;
Benjamin G. and Mary K. Salopek, docket No. 14162-97; and James
A. and Georgia J. Salopek, docket No. 14163-97.
- 2 -
FOLEY, Judge: This matter is before the Court on
petitioners' Motion for Award of Reasonable Litigation Costs
pursuant to section 7430 and Rule 231. Unless otherwise
indicated, all section references are to the Internal Revenue
Code in effect for the years in issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
Background
Petitioners (i.e., Theresa, Mark, Marcie, Benjamin, Mary,
James, and Georgia Salopek) resided in Dona Ana County, New
Mexico, at the time their petitions were filed. Some of the
facts have been stipulated and are so found.
Petitioners own and operate Salopek 6U Farms, Inc.
(Salopek), a pecan farm and cattle ranch. Salopek is an S
corporation with a fiscal year (FY) ending January 31. The
petitioners are calendar year taxpayers. Mark, Ben, and James,
who are Theresa's sons, filed joint income tax returns for 1993,
1994, and 1995, with their respective wives, Marcie, Mary, and
Georgia. On or about February 1, 1996, respondent began an
examination of petitioners' 1993 Federal individual income tax
returns and Salopek's FY 1993 S corporation tax return.
Respondent assigned Agent Christopher Parker to the examination.
Petitioners filed powers of attorney authorizing David Leeper, an
attorney, to represent Salopek, and Arthur Valdez II, an
accountant, to represent the individual petitioners. In June
1996, respondent broadened the scope of his examination to
- 3 -
include petitioners' 1994 and 1995 tax returns and Salopek's FY
1994 and FY 1995 tax returns.
Salopek's FY 1993 tax return included a $600,000 charitable
deduction relating to a contribution of cattle and a $173,338
depreciation deduction. Salopek's FY 1994 and FY 1995 tax
returns included depreciation deductions of $211,438 and
$239,813, respectively. As shareholders of Salopek, petitioners
included their allocable share of Salopek's ordinary income and
charitable contribution on their 1993, 1994, and 1995 individual
tax returns. In addition, each petitioner deducted a $100,000
charitable contribution of cash in 1995 (i.e., the cash
contributions totaled $400,000). During the examination, Agent
Parker requested Salopek's depreciation schedules and
substantiation for the charitable contributions of cash and
cattle. Petitioners did not provide substantiation for the
cattle contribution but did provide the depreciation schedules
and substantiation for the cash contributions. After reviewing
the depreciation schedules, Agent Parker requested, but did not
receive, substantiation for the depreciable bases of certain
pecan trees.
On April 8, 1997, respondent mailed to petitioners notices
of deficiency relating to 1993, 1994, and 1995. Respondent
disallowed, for lack of substantiation, each petitioner's: (1)
Allocable share of Salopek's depreciation deductions for FY 1993,
FY 1994, and FY 1995; (2) allocable share of Salopek's $600,000
- 4 -
cattle contribution for FY 1993; and (3) $100,000 cash
contribution claimed on their respective 1995 tax returns.
In petitions filed on July 3, 1997, petitioners challenged
respondent's determinations. In answers filed on August 21,
1997, respondent reiterated the contentions set forth in the
notices of deficiency. The cases were assigned to Appeals
Officer Robert Chirich. On September 19, 1997, Officer Chirich
requested that petitioners provide substantiation for the
deductions relating to depreciation and contributions of cash and
cattle. On October 20, 1997, petitioners provided partial
substantiation for the depreciation deductions. On November 18,
1997, Officer Chirich informed petitioners' counsel that Agent
Parker would continue his examination.
On December 12, 1997, the Court granted petitioners leave to
amend their petitions. In the amendments, petitioners contended
that Salopek erroneously capitalized pecan tree pruning costs
and, in calculating its charitable contribution, undervalued the
cattle. Petitioners further contended that they were entitled to
refunds. On January 15, 1998, respondent filed answers to the
amendments, denying petitioners' contentions.
In early December 1997, Agent Parker requested
substantiation for the deductions relating to the cattle
contribution and the depreciable bases of the pecan trees. In
January 1998, he requested substantiation for the pruning costs
deduction. Between December 1997 and January 1998, petitioners
- 5 -
provided the requested substantiation. Respondent then conceded
the depreciation and pruning costs deductions and settled the
cattle contribution issue. On February 23, 1998, the parties
filed a stipulation of settled issues, and on June 1, 1998,
petitioners filed a Motion for Award of Reasonable Litigation
Costs.
Discussion
We may award litigation costs to petitioners if they meet
the requirements of section 7430. Respondent concedes that
petitioners have substantially prevailed, met the net worth
requirements, and exhausted all administrative remedies. See
sec. 7430(a), (b)(1), (c)(4)(A). Thus, the remaining issues for
decision are whether: (1) Respondent's position was
substantially justified; (2) petitioners unreasonably protracted
the court proceedings; and (3) the litigation costs claimed by
petitioners are reasonable. See sec. 7430(a), (b)(3), (c)(1),
(c)(4)(B).
I. Substantial Justification
On August 21, 1997, and January 15, 1998, respondent filed
his answers and took the position that petitioners had not
substantiated and, thus, were not allowed the deductions for
depreciation, pecan tree pruning costs, and contributions of cash
and cattle. Respondent must prove that this position was
substantially justified. Sec. 7430(c)(4)(B). Respondent's
position was substantially justified if it had a reasonable basis
- 6 -
in both law and fact. Pierce v. Underwood, 487 U.S. 552, 563-565
(1988). This Court will determine the reasonableness of
respondent's position as to each issue independently and
apportion the requested award between those issues for which
respondent was, and those issues for which respondent was not,
substantially justified. See, e.g., Swanson v. Commissioner, 106
T.C. 76, 87-92 (1996). Respondent concedes that his position
with respect to the cash contributions was not substantially
justified.
A. Depreciation Deductions
Respondent contends that he was substantially justified in
disallowing Salopek's depreciation deductions because petitioners
failed to provide the necessary substantiation. During the
examination, petitioners provided Agent Parker with Salopek's FY
1993, FY 1994, and FY 1995 depreciation schedules, each of which
delineated more than 100 assets. After reviewing the schedules,
Agent Parker requested that petitioners substantiate the
depreciable bases of only three assets--certain pecan trees
placed in service during 1988, 1991, and 1992. Petitioners did
not provide Agent Parker with the requisite substantiation.
Respondent then disallowed all of Salopek's depreciation
deductions. When respondent ultimately received the
substantiation for the pecan trees, however, he conceded the
issue. Respondent's position with respect to the pecan trees was
substantially justified. Respondent's position with respect to
- 7 -
the other assets, however, was not substantially justified
because respondent did not request substantiation for these
assets.
B. Pruning Costs
In December 1997, petitioners amended their petitions to
contend that Salopek incorrectly capitalized pecan tree pruning
costs it should have expensed. Respondent disagreed because he
had no information that substantiated petitioners' contentions.
When the appropriate substantiation was submitted, respondent
conceded the issue. Therefore, respondent's position was
substantially justified.
C. Cattle Contribution
Respondent contends that he was substantially justified in
disallowing Salopek's FY 1993 cattle contribution deduction
because petitioners failed to provide the necessary
substantiation. The Commissioner may deny a taxpayer a deduction
for the charitable contribution of property if the taxpayer fails
to maintain certain documentation (e.g., the value of the
property and the date of the contribution). See sec. 1.170A-
13(b), Income Tax Regs. During the examination, Agent Parker
requested that petitioners substantiate the cattle contribution
deduction. Upon receiving the substantiation, respondent
proposed to settle this issue. Therefore, respondent's position
was substantially justified.
- 8 -
II. Unreasonable Protraction of Proceeding
Petitioners are not eligible for an award of litigation
costs for any portion of the proceeding that they unreasonably
protracted. Sec. 7430(b)(3). Petitioners did not protract the
proceeding. Petitioners did file numerous motions, but none were
meritless and two were necessitated by respondent's multiple
requests for documentation already in his possession.
III. Reasonable Litigation Costs
Petitioners request an award of $95,513 in litigation costs.
Section 7430 allows petitioners to recover attorney's fees and
court costs if such fees and costs are reasonable. Although
petitioners' attorney's billing statements do not delineate the
precise number of hours related to each of the various issues,
they provide sufficient detail to determine an appropriate award.
Where petitioners' attorney did not allocate his hours and
costs to specific issues, we use an "apportionment percentage" to
determine the number of hours and costs for which petitioners are
entitled to an award. The apportionment percentage is a
fraction: The numerator is the total adjustments relating to the
issues for which respondent was not substantially justified
(i.e., cash contributions of $400,000 and depreciation deductions
of $468,589), and the denominator is the total adjustments
relating to all issues (i.e., $1,624,589). Accordingly,
petitioners are entitled to reimbursement for 53 percent of the
- 9 -
hours and costs that the attorney did not allocate to specific
issues.
Petitioners' attorney billed a total of 387.6 hours (i.e.,
206.3 hours relating to the cattle contribution, pecan tree
basis, and pruning cost issues; 13.7 hours in 1997 relating to
the cash contributions; 127.6 hours in 1997 relating to all
issues; and 40 hours in 1998 relating to all issues). An award
relating to attorney's fees incurred in 1997 and 1998 is limited
to the statutory rate of $110 and $120 per hour, respectively.
Sec. 7430(c); Rev. Proc. 97-57, 1997-52 I.R.B. 20; Rev. Proc. 96-
59, 1996-2 C.B. 392. Accordingly, we award attorney's fees of
$11,490 (i.e., 1997: (13.7 + (127.6 x 53 percent)) x $110 =
$8,946; 1998: (40 x 53 percent) x $120 = $2,544; total: $8,946 +
2,544 = $11,490).
Petitioners incurred $1,816 of reimbursable litigation costs
(i.e., filing fees of $240 and fax, copy, supply, telephone, and
travel expenses totaling $1,576). We award petitioners $1,075
(i.e., $240 + ($1,576 x 53 percent)).
To reflect the foregoing,
Appropriate orders and
decisions will be entered.
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980 F.Supp. 322 (1997)
Winfield COPLEY, Plaintiff,
v.
Ted HENDERSON, etc., Defendants.
No. 4:97CV-3296.
United States District Court, D. Nebraska.
November 6, 1997.
Winfield Copley, Pro Se.
MEMORANDUM AND ORDER
KOPF, District Judge.
A magistrate judge granted Mr. Copley leave to proceed in forma pauperis on September 18, 1997. (Filing 3.) Mr. Copley is subject to the fee payment provisions of the Prison Litigation Reform Act (PLRA) because he is a prisoner. See 28 U.S.C. § 1915(b)(2). Besides granting leave to proceed in forma pauperis, the judge ordered Mr. Copley to pay an initial partial filing fee and he ordered the institution having custody of Mr. Copley to collect the balance of the fee. (Filing 3.)
The judge further suggested in a footnote that Mr. Copley could dismiss his case without prejudice and stop the collection of funds *323 from his trust account. (Filing 3, at 1 n. 1.)[1] Apparently following this advice, Mr. Copley moved to dismiss his case pursuant to Fed. R.Civ.P. 41(a)(1)(i). (Filing 4.) On October 7, 1997, judgment was entered dismissing the case without prejudice. (Filing 5.)
On November 4, 1997, Mr. Copley moved to stop the collection of the partial filing fee noting that we had dismissed his case. (Filing 6.) The matter is now before me for resolution.
Once we have granted a prisoner leave to proceed in forma pauperis, the "prisoner shall be required to pay the full amount of a filing fee." 28 U.S.C. § 1915(b)(1). The statute further requires that "the court shall assess and, when funds exist, collect" a partial filing fee for those prisoners who cannot pay the entire fee at one time. Id.
As I read the PLRA, nothing allows the court to stop the collection of the filing fee once we authorize a prisoner to proceed in forma pauperis. In fact, the statute directs that the "agency having custody of the prisoner shall forward payments from the prisoner's account to the clerk of the court each time the amount in the account exceeds $10 until the filing fees are paid." 28 U.S.C. § 1915(b)(2) (emphasis added). Thus, prisoners should understand that from the moment we allow them to proceed in forma pauperis, they owe the United States of America the full filing fee, and this is true even if they voluntarily dismiss their cases. Accordingly, I must deny Mr. Copley's motion.
Nevertheless, because of the incorrect advice given to Mr. Copley, I will construe Mr. Copley's motion as an alternative motion for relief from judgment under Federal Rule of Civil Procedure 60(b)(6) and reinstate this case. After that, Mr. Copley must decide whether he wishes to pursue this case with the understanding that he owes the full filing fee even if he voluntarily dismisses it.
Accordingly,
IT IS ORDERED that:
1. The motion (filing 6), to the extent that it requests an order stopping the collection of the filing fee, is denied.
2. The motion (filing 6), construed as a Rule 60(b)(6) motion, is granted, the judgment of dismissal (filing 5) is vacated, and this case is reinstated.
3. On or before December 1, 1997, Mr. Copley shall advise the magistrate judge, by a motion filed in the court file, whether he wishes to pursue this case or whether he wishes to dismiss this case.
4. This case is referred to the magistrate judge for further proceedings consistent with this order.
NOTES
[1] Prior to the PLRA, the court collected filing fees from prisoners on an installment basis. As a matter of practice, the court would stop the collection of fees upon dismissal of the case. Of course, this practice was not governed by the PLRA since the Act had not yet been passed by Congress.
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ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
Optimum Services, Inc. ) ASBCA No. 59952
)
Under Contract No. W912EP-09-C-0033 )
APPEARANCE FOR THE APPELLANT: Joseph W. Lawrence, II, Esq.
Vezina, Lawrence & Piscitelli, P.A.
Fort Lauderdale, FL
APPEARANCES FOR THE GOVERNMENT: Thomas H. Gourlay, Jr., Esq.
Engineer Chief Trial Attorney
Carolyn J. Fox, Esq.
Assistant District Counsel
U.S. Army Engineer District,
Jacksonville
OPINION BY ADMINISTRATIVE JUDGE TING
Optimum Services, Inc. (OSI) entered into a contract with the Jacksonville
District Corps of Engineers (the Corps) to reconstruct an existing Disposal Area, and
to dredge Rose Bay in Volusia County, Florida, to restore its ecosystem. OSI
subcontracted the dredging part of its contract to Ryan Incorporated Southern (Ryan).
In our entitlement decision, we found that Ryan encountered a Type I differing site
condition (DSC) in dredging eight out of the nine Acceptance Sections, and we
remanded the case to the parties for negotiation of the quantum of equitable
adjustment and the extent of the delay in contract completion caused by the DSC.
Optimum Services, Inc., ASBCA No. 58755, 15-1BCAi\35,939.
We resumed proceedings when the parties were unable to settle their quantum
differences. To determine equitable adjustment, we use the Measured Mile Method
comparing what Ryan would have spent without encountering the DSC and what it did
spend with the DSC. The parties' disputes centered on what adjustments should be
made to the Measured Mile formula. We conclude that OSI/Ryan is entitled to an
equitable adjustment of $1,267, 124.51 and a time extension of 66 calendar days.
FINDINGS OF FACT
Background
1. Rose Bay is located along the Intracoastal Waterway in east central Volusia
County, Florida. As a part of the Rose Bay Task Force's multi-phase project to restore
Rose Bay's ecosystem, the Corps entered into a contract with OSI in June 2009 to
reconstruct an existing Disposal Area at Lost Creek Island (Disposal Area) 1 and to
remove by dredging unconsolidated sediments from the bay. In July 2009, OSI
subcontracted the dredging work to Ryan. Dredging was to be performed by Acceptance
Sections. There were nine Acceptance Sections (AS): AS#l through AS#9. Upon the
start of dredging in May 2010, Ryan ran into what it believed to be hard bottom at a
much higher elevation in AS#8. 2 The Corps determined what Ryan encountered was not
hard bottom and required Ryan to continue to dredge through the firm layers of crust
encountered. The crust consisted of whole oyster shells, sand, and shell fragments
interlocked with mud and sand. Optimum, 15-1BCAii35,939 at 175,653.
2. Except in AS#7, Ryan continued to run into and dredge firm layers of crust
in AS#l, AS#2, AS#3, and AS#4. By the end of October 2010, five months after
Ryan began dredging, the Corps confirmed that the crusts "on top of the silt layer" and
"dredged material with heavy shell content" were found "in patches scattered around
the acceptance sections." In December 2010, the Corps deleted certain areas in AS#5
and AS#6 from dredging. In areas not deleted, Ryan continued to run into crusts and
high concentrations of shell. The Corps acknowledged in areas not deleted, "we made
them dredge it." Ryan completed its dredging in February 2011, three months longer
than planned. Optimum, 15-1BCAii35,939 at 175,653.
3. Ryan's Request for Equitable Adjustment (REA), dated 31 July 2012,
sought $1,192,828 for dredging shells and sand, $55,104 in consultant cost for a total
of $1,247,932, and a time extension of 93 calendar days (ASBCA No. 58755 (58755),
ex. 200, tab D at 4, 4 7-48). Ryan contended that it incurred extra costs as a result of a
constructive change and a differing site condition because it was "required to dredge
oyster beds although oyster bed dredging was specifically excluded under the terms of
the contract." It contended that it "worked an additional 93 calendar days to complete
the dredging at Rose Bay." (Id.) On 30 August 2012, OSI submitted to the Corps
administrative contracting officer (ACO) Ryan's REA (58755, R4, tab 3 at 36). With
field and home office overhead plus profit, OSI's REA sought $1,877,057.79:
1
The construction of the Lost Creek Island Disposal Area was the subject of another
appeal decided in 2013. Optimum Services, Inc., ASBCA No. 57575, 13 BCA
ii 35,412, aff'd, Optimum Services, Inc. v. McHugh, 582 F. App'x 879 (Fed. Cir.
2014).
2
OSI's project manager Matthew Conneen testified in the entitlement hearing that
AS#9 was the first Acceptance Section dredged (ASBCA No. 58755, tr. 3/133),
the record shows, however, that AS#8 was the first Acceptance Section dredged
(ex. G-2, tab 9).
2
Cost Elements Amount
RIS-REA Cost $1,247,932.00
Field Office Overhead (iiJ 22.4% $279,536.77[31
Home Office Overhead (iiJ 16.26% $248,366.42[41
Profit (iiJ 5. 7% $101,222.60[5]
Total $1,877,057.79
OSI's REA stated "We are available to answer any questions however we feel that a
meeting with all firms involved will provide the best forum to discuss any details or
negotiations." (58755, R4, tab 3 at 36)
4. In addition to its request for DSC costs and 93 days of time extension, Ryan's
REA included invoices from Construction Consulting Associates, Inc., in the amount of
$42,972.65, for providing consulting and REA preparation services for Ryan (58755,
ex. 200, tab D-37 at 296-316). Adding Ryan's home office overhead at 16.24% and 10%
profit to $42,972.65, Ryan claimed $55, 104.19 as a part of $1,247,932 (58755, ex. 200,
tab D-47; app. supp. R4, tab 3 at 30).
5. Ryan's 14 December 2012 letter to OSI said "as a result of the apparent lack
of progress," it was in Ryan's best interest to convert its REA into a certified claim
(58755, R4, tab 3 at 33). Ryan submitted a certification signed by its president,
William H. Ryan (id. at 35). OSI then submitted its certified claim to the contracting
officer (CO) by letter dated 20 December 2012 seeking an equitable adjustment of
$1,877,057.79 and an "additional duration of 93 calendar days" (id. at 32, 36).
6. The CO's 3 April 2013 decision denied the claim (58755, R4, tab 2). OSI
for itself and its subcontractor Ryan timely appealed the CO decision by notice dated
27 June 2013. The Board docketed the appeal as ASBCA No. 58755, and held a
hearing on entitlement in May 2014. Ryan's entitlement to a 93-day time extension
was deferred as a quantum issue.
7. In our entitlement decision issued on 25 March 2015, we found the
following with respect to AS#7:
55. In mid-August 2010, Ryan mobilized to the
west side of the US- I Bridge where AS#7 and AS# 1 were
located. AS#7 was on the north side of AS# I and was in a
3
Field Office Overhead was applied to the REA cost.
4
Home Office Overhead was applied to (1) the REA cost and (2) the Field Office
Overhead cost.
5
Profit was applied to (1) the REA cost, (2) the Field Overhead cost and (3) the
Home Overhead cost.
3
"deeper area" near some private residences. Unlike AS#8
and AS#9, which took from May to mid-August 2010 to
dredge, AS#7 had "very little shell[s]," and Ryan had "no
problems dredging AS7 and ... they finished it in the time
they expected to" (tr. 4/24).
56. We note Boring CB-RB-7 was drilled within
AS#7 (Drawing CN 107 and R4, tab 5 at 212). Boring
CB-RB-7 described the material to be encountered as
WOR material consisting of "SILT, some fine quartz sand,
trace coarse sand-size shell fragments, gray (ML)" (see
finding 19). With minor shell fragment size differences
(medium versus coarse), this description was similar to
those of the other borings except CB-RB-9 which
contained WOH material. We find the material in AS#7
representative of what OSI/Ryan should encounter absent
the firm layers of crust it encountered in all of the other
acceptance sections. When Ryan reached AS#2 west of
AS#7, it ran into crusts again which hindered its dredging
efforts (tr. 3/92-93).
Optimum, 15-1 BCA ~ 35,939 at 175,645.
8. Based upon findings 55 and 56 above, we concluded: "There was no
differing site condition in AS#7. AS#7 thus exemplifies what OSI/Ryan should have
encountered based on the representations in the Corps' contract documents
(findings 55 and 56)." Optimum, 15-1BCA~35,939 at 175,656.
9. As for the rest of the Acceptance Sections, our decision held that Ryan has
proven, by a preponderance of the evidence, all of the elements of a Type I differing
site condition, that the materials Ryan actually encountered (firm layers of crust in
patches and high concentrations of broken and whole shells at various locations) in
Rose Bay differed materially from those the contract documents indicated (zero blow
count unconsolidated sediment with little to some sand, and trace to little sand-size
shell fragments). Optimum, 15-1 BCA ~ 35,939 at 175,656.
10. Having decided entitlement in favor of OSI/Ryan, we remanded the case to
the parties for determination of the quantum of equitable adjustment and the extent of
delay experienced by Ryan. 6 Based on the record before us, we summarized our
conclusions as follows:
6
Since this appeal involves subcontractor Ryan's performance exclusively, we will
refer to Ryan unless context requires us to refer to OSI or OSI/Ryan.
4
We do not wish to leave the impression that all nine
acceptance sections were totally engulfed by firm layers of
shell crusts or contained high concentrations of large
broken or whole shell[s] (as opposed to sand size shell
fragments). As QAR R. Wilson observed, crusts were
found in "patches scattered around the acceptance
sections," and "newly developed mounds of sand and
shell" were found in specific locations but "most of the
time the average discharge has been a sandy silt material
with an occasional shell" (finding 69). There was no
differing site condition in AS#7 (findings 55, 56). And,
not all equipment failure was the Corps' responsibility
(finding 52 n.10).
Optimum, 15-1 BCA ii 35,939 at 175,658.
OSI/Ryan's Quantum Appeal -ASBCA No. 59952
11. The parties were unable to reach agreement on remand. Ryan's 23 April
2015 email to the Board indicated it wished to proceed with its quantum case. The
Board docketed the quantum case as ASBCA No. 59952 and directed the parties to file
pleadings in accordance with an enclosed Order on Proof of Costs. That Order
required Ryan, among other things, to summarize the basis or theory of recovery;
provide the computation showing how each cost item and its components are
computed; and to make the books and records upon which the claimed costs are based
available to the Corps for examination. If the Corps challenges a cost, the Order
required the Corps to specify each document supporting the challenge, and to
summarize the basis or theory of its challenge.
12. In response to the Order, Ryan submitted on 29 May 2015, Appellant's
Complaint for Costs Due Appellant with Statement of Costs (compl.). The complaint
advanced three alternate methods or theories of recovery: ( 1) the Factor Method;
(2) the Modified Total Cost Method; and (3) the Measured Mile Method (compl.
at 9-10, ii 31, at 14-15, iiii 41-44).
13. The three methods Ryan proposed produced slightly different but close results:
Using the Factor Method, Ryan calculated it would be due $1,192,828.00 (compl. at 19).
Using the Modified Total Cost Method, Ryan calculated it would be due $1,292,334
(compl., ex. A at 3). Ryan proposed two alternative Measured Mile Method calculations.
The first alternative calculated $985,837 as the amount due (compl., ex.Bat 2). The
second alternative calculated $1, 121,805 as the amount due (id. at 3). The amounts above
5
did not include $55,104.19 in outside consultant and REA preparation costs and OSI's
markups for Field Office Overhead, Home Office Overhead and Profit (compl. at 19).
The Factor Method
14. Ryan's quantum complaint proffered that the Factor Method would be the
most appropriate way to determine DSC damages. It explained that separating the
actual costs incurred due to the differing site conditions on an hour-by-hour or
day-by-day basis was not feasible because the differing site conditions were spread
throughout the project site and were encountered intermittently at times and more
continuously at other times. (Compl. at 9-10, iii! 30, 31)
15. Ryan's Factor Method for calculating its DSC damages used the "Material
Factor" for different materials such as mud and silt, loose sand, composite sand, stiff
clay or composite shell. The Material Factors were derived from Dr. John B. Herbich's
Handbook ofDredging Engineering (2d ed.), Appendix 9. Dr. Herbich is a professor at
Texas A&M University, and the Director of Center for Dredging Studies (compl. at 10,
if 32). As explained in the handbook: "The sediment type is a very significant factor in
the determination of the production rate. A fine-grained silt material is easier to pump
than larger-grained sediments or clay." The handbook listed 10 sediment types:
Material SQ[ 7J Factor
mud & silt 1.2 3
mud & silt 1.3 2.5
mud & silt 1.4 2
loose sand 1.7 1.1
loose sand 1.9 1
compacted sand 2 0.9
stiff clay 2 0.6
composite shell 2.3 0.5
soft rock 2.4 0.4
blasted rock 2 0.25
(58755, ex. 200, tab 36 at 295)
16. Use of Material Factors, according to Ryan, is based on the concept that
composite shell, for example, with a Material Factor of 0.5 would be twice as difficult and
therefore expensive to dredge than loose sand with a Material Factor of 1; and sand with a
Material Factor of 1 would be three times as difficult and therefore expensive to dredge
than silt and mud with a Material Factor of 3 (compl. at 10, if 33; 58755, ex. 200, tab 36
7
"SG" means "specific gravity."
6
at 295). Material Factors were developed from averages of many dissimilar projects
(tr. 2/114). Ryan adjusted its bid unit price of $8.06 per cubic yard (c.y.) for dredging
mud and silt by the Material Factors for dredging for sand and shell (comp I. at 10, ~ 34 ).
The additional cost of dredging sand and shell was then calculated by multiplying the
adjusted unit cost per c.y. for sand and for shell by the volumes dredged. Using the Factor
Method, Ryan calculated its additional cost for dredging sand and shell to be $1, 192,828.
(Compl. at 19)
17. Mr. William S. Humphreys, Ryan's consultant who prepared its REA,
acknowledged it is always best to use "discrete cost[ s]" to determine equitable
adjustment, if the costs relating to the DSC can be tracked. He testified he "went down
[a] list of the options" and determined the Factor Method was "by far the preferable one
to use." He explained tracking discrete costs was "not an option" because dredging did
not separate the DSC materials from the non-DSC materials. (Tr. 1129)
18. Mr. Humphreys argued that the use of the Factor method would be "ideal"
(tr. 1129) because ( 1) the entire issue of extra cost was tied to material - the
"consolidated heavy material versus light unconsolidated material"; (2) "there are a set
of numbers that go directly to the increased cost by type of materials" known as
"Material Factor"; (3) the damages in the appeal "are really all about the material";
and (4) there would be no need to address "any arguments about inefficienc[ies] or
extra costs on the job" (tr. 1129-30).
19. On the last point, Mr. Humphreys explained the Factor Method would "[get]
rid of all [the Government's] argument. .. about inefficiencies" (tr. 3/87), and "cleans up
all [of the Corps'] issues that have surfaced in this trial" (tr. 2/63). He acknowledged that
the inefficiencies that were not the Corps', or Ryan's, responsibility would not be a part
of the Factor Method of damage calculations (tr. 1137).
20. Mr. Humphreys testified the Factor Method "is used every day by heavy
civil contractors" such as road and site development projects and it is often used to
price changes (tr. 1132, 232). He observed that the Corps itself used Dr. Herbich's
Material Factors in preparing its Independent Government Estimate (IGE) for the Rose
Bay ecosystem restoration project (tr. 1135, 48-49; app. wit. book, 8 tab 17 at 457).
8
The record in this quantum appeal is voluminous. Each party submitted 10 volumes
of Rule 4 files. To proceed more efficiently at the hearing, both parties
prepared witness books containing the hearing exhibits as well as Rule 4
documents they used at the hearing. We refer to the documents in the witness
books as "Gov't wit. book" or "App. wit. book," as appropriate.
7
The Modified Total Cost Method
21. Ryan's alternate Modified Total Cost Method calculated the difference
between what Ryan actually incurred in dredging Rose Bay and the cost it bid to dredge
the final pay quantity of materials specified in the contract documents plus the cost which
was not the Corps' responsibility (compl. at 14, ~ 42). According to Ryan, it booked
$1,778,474 in direct dredging costs. With G&A (19.92%) and profit (10%), that amount
added up to $2,346,021. (Id., ex. A at 1) Based upon its original bid price of$8.06/c.y.
and the pay volume of 127,199 c.y. dredged as measured by the Corps, Ryan calculated
that it should have been able to complete the dredging anticipated for $1,025,224 ($8.06
x 127,199 c.y.). Based upon its average daily dredging cost of$8,625 per day, and based
upon its assessment that the Corps was not responsible for 3.3 calendar days of
downtime 9 at $28,463 ($8,625 x 3 .3 days), Ryan calculated that it would be due
$1,292,334 ($2,346,021 - $1,025,224 - $28,463) plus OSI markups. (Id. at 3)
The Measured Mile Method
22. Ryan's third alternative method for determining DSC damages was the
Measured Mile Method. This method compares the productivity achieved at an
un-impacted section with the productivity achieved at an impacted section of a project.
Equitable adjustment can then be calculated by multiplying the average per hour by the
additional hours required to complete the project. (Compl. at 15, ~ 44, ex. B)
23. Ryan contends that the use of AS#7 as an un-impacted section "without
some adjustment" would be incorrect (compl. at 15, ~ 46). It contends that (1) "some
shell and consolidated material was dredged in A.S. No. 7, in sufficient quantities to
have some productivity impacts"; (2) to avoid clogging its equipment with large shells
and consolidated materials when dredging AS#7, bars were welded across the suction
mouthpiece of the dredge which reduced productivity; and (3) "to ensure complete
dredging of A.S. No. 7, adjoining areas of A.S. Nos. 1 and 2 were dredged along with
A.S. No. 7." (Compl., ex.Bat 1)
24. With these adjustments in mind, Ryan made two Measured Mile calculations.
The first calculation assumed there were not enough areas of consolidated sand and shell
(crust) in AS#7 to have any meaningful impact on dredging production, but made a 10%
adjustment to account for the bars welded across the suction mouthpiece, and accounted
7.5 hours for dredging the boundaries between AS#7 and AS#l and AS#2. These
adjustments resulted in an equitable adjustment for dredging in the amount of $985,837.
9
Ryan took responsibility for 3.3 calendar days of downtime due to (1) booster pump
problems on 7 to 9 August 201 O; (2) workboat and booster pump problems on
23-25 August 2010; and (3) its second shift dredge operator did not show up for
work on 15 January 2011 (app. br., app'x Cat 2-3).
8
(Compl., ex. B, calculation A at 1-3) The second calculation assumed a 10% adjustment
"due to beds of consolidated sand and shell ('crust' areas)" in AS#7. This additional
adjustment resulted in an equitable adjustment for dredging in the amount of $1,121,805.
(Id., calculation B at 3)
Time Extension Claimed
25. Ryan summarized its time extension claim as follows:
Ryan Incorporated Southern planned to complete
the dredging in 6 months or less, working one shift
(daylight hours only) per day. As a result of the increased
difficulty caused by the differing site condition, the
dredging lasted nine months, and for over half of these
months Ryan worked double shifts. Nine months at an
average of more than one shift per day minus six months at
one shift per day translates to a time extension of greater
than 3 months.
(Compl. at 26)
26. More specifically, Ryan's 93-day time extension claim is based on the
difference between what it believed to be the actual dredging duration of 272 calendar
days from 10 May 2010 to 7 February 2011 10 and the 179 calendar days it originally
projected would be required to dredge zero blow count materials (58755, ex. 200,
tab D at 48).
The Corps' Measured Mile Calculations
27. The Corps filed its response to Ryan's Order on Proof of Cost submission
on 31July2015. The Corps took the position that "the best method of calculating
damages is not to base it on the quantities of shell and sand dredged, especially given
that the quantities cannot be proven." It maintained that "[t]he best method of
determining damages is to calculate the effect on productivity that was caused by the
differing site condition" by using the Measured Mile Method. (Answer at 28 11 ) The
Corps' answer stated that "[t]he Measured Mile method has a history in construction
claim case law related to differing site conditions extending back to at least 1975 as
being an acceptable method for proving and quantifying production impacts due to the
differing site conditions being claimed" (answer at 31 ).
10
There are actually 273 calendar days from 10 May 2010 through 7 February 2011.
11
The Corps' 43-page answer is not numbered. For reference purposes, we manually
numbered the pages consecutively from 1 to 43.
9
28. The Corps argued that (1) "The shell material below the crust is described
in the contract and is not part of the DSC" (answer at 25); (2) "the presence of shell up
to gravel-sized in the dredging prism is anticipated by the contract and must not be
included in the DSC" (id.); and (3) "all the sand dredged in the pay prism" should not
be a part of the DSC (id. at 27). Since the Factor Method depends upon the volume of
the DSC-related sand and shells dredged, and there is no way to distinguish between
the DSC-related shell and sand dredged and the non DSC-related sand and shell
dredged, the Corps contended that calculating damages using the Factor Method would
not be "accurate or acceptable" (id. at 18, 21 ).
29. The Corps proposed two alternative ways of calculating DSC damages. The
first alternative proposed an adjustment to the impacted side of the Measured Mile
equation by removing AS#8 and AS#9 from determining the gross production rate
achieved in the impacted areas. It explained "[w ]hile the production problems in AS-8
and 9 may have been partially due to the DSC, the poor production was more strongly
influenced by the contractor's 'learning curve."' (Answer at 33) With this adjustment,
and using the Measured Mile Method, the Corps calculated an equitable adjustment for
the cost of dredging DSC materials, without markups, at $358,995.34 (id. at 36).
30. Unlike Ryan, the Corps argued that no adjustments should be made to the
productivity of AS#7 where no differing site condition was found. It contended that
the daily Quality Control Reports (QC Reports) for AS#7 showed no sand and shell,
only mud and silt. It emphasized Boring CB-RB-7 described the materials that the
contractor would encountered as "SILT, some fine quartz sand, trace coarse sand-size
shell fragments, gray (ML)." The Corps contended that dredging beyond the limits of
AS#7 into AS# 1 and AS#2 was not unique to AS#7 but occurred in all Acceptance
Sections. It questioned the 10% adjustment for the bars installed on the dredge suction
mouthpiece for lack of supporting data and documentation showing that the bars were
installed while dredging AS#7. (Answer at 34-35)
31. The Corps also presented an alternate Measured Mile Method calculation
using what it referred to as the Cost Engineering Dredge Estimating Program for Pipeline
Dredges (CEDEP) Unit Costs (answer at 38). This method calculated the direct costs
attributable to the DSCs at $276,671.31 (id.). The CEDEP is a proprietary program, and
only the Corps' estimators are allowed to see the program codes (tr. 2/43). With other,
better equitable adjustment methods available, we see no reason to resort to this method
especially since the codes are not available.
32. With the disagreements outlined above, the parties went to a quantum
hearing on 4-6 November 2015 in Jacksonville, Florida. Ryan urged us to determine
its DSC damages employing the Factor Method. It did not object to the Measured
Mile Method but urged us to make adjustments to AS#7. The Corps argued that the
10
Factor Method would "grossly exaggerate the impact of the DSC" (answer at 18), and
urged us to determine damages based upon the Measured Mile·Method without
considering production rates achieved in AS#8 and AS#9 in calculating the average
production rate of the impacted areas (id. at 33).
Dredging Sequence
33. Contract 0033 gave OSI 324 calendar days after receiving the notice to
proceed to complete the contract work. Optimum, 15-1 BCA ii 35,939 at 175,637, ii 5.
As planned, OSI was to complete the reconstruction of the Disposal Area in four
months or by October 2009. The Disposal Area "took a lot longer"; OSI did not finish
it until April or May 2010. Optimum, 15-1 BCA ii 35,939 at 175,643, ii 42.
34. Ryan began dredging Rose Bay on 10 May 2010 and completed dredging
on 7 February 2011 (gov't wit. book, ex. G-2, tab 9). Of the nine Acceptance Sections
to be dredged, AS#8 and AS#9 were located on the east side of the U.S. 1 Bridge and
the rest of the Acceptance Sections (AS# 1 - AS#7) were located on the west side of
the bridge. Ryan dredged AS#8 first, then AS#9. It then moved to the west side of the
bridge and dredged AS#7 (Wilson dep., 12 ex. G-4 at 58). The sequence and the
periods during which dredging took place are summarized in the table below:
Acceptance Sections Date began Date Completed No. of Days
AS#8 05/10/10 07/24/10 76 days
AS#9 07/26/10 08/19/10 25 days
AS#7 08/25/10 09/17110 24 days
AS#l 09/18/10 10/06/10 19 days
AS#2 10/07/10 10/21/10 15 days
AS#3 10/22/10 11/09/10 19 days
AS#4 11/10/10 12/06/10 27 days
AS#5 12/08/10 01/18/11 42 days
AS#6 01/19111 02/07/11 20 days
(Gov't wit. book, ex. G-2, tab 9)
35. Ryan originally planned to work 1 shift of 10 hours a day, 5 days a week,
and 8 hours on Saturday (tr. 11133). Less than 2 weeks after it started, Ryan increased
its shift to 13Yi hours a day (tr. 1/133-34, 138). On or about 12 July 2010, after it
12
Ronald L. Wilson was scheduled to deploy overseas just before the quantum
hearing was to begin. Corps counsel took his deposition which was admitted
into evidence as exhibit G-4. Ryan's counsel cross-examined Mr. Wilson at the
conclusion of direct examination (ex. G-4 at 46-61 ).
11
overhauled the dredge, Ryan went to "round the clock operations 6 days a week" or
two 12-hour shifts a day (R4, tab 529; tr. 1/133-35).
Leaming Curve, Inefficiency, Equipment Downtime Issues
36. Ronald L. Wilson was the Corps' quality assurance representative (QAR)
on the Rose Bay project' He was at the project site three or four days a week. (Wilson
dep., ex. G-4 at 14) He was the Corps' eyes and ears on the project.
37. QAR Wilson testified "It was pretty obvious [Ryan was] going through a
learning curve. You can see that through the duration of the job." He testified Ryan was
going through a learning curve "[e]specially in the beginning of it." (Wilson dep., ex. G-4
at 49)
38. In response, Mr. Ryan testified "you're always going to have some
adjustments you make when you start pumping. You make little adjustments here and
there." (Tr. 2/79) He testified Ryan expected to dredge silt but due to the DSC, it had to
add flotation, move its booster pump several times, and make a number of other
adjustments (id.). He acknowledged Ryan's performance was not perfect and "could
have been more efficient at times." He testified Ryan was "substantially efficient" and
had factored non-DSC-related problems into its bid, and the problems Ryan encountered
were "primarily the differing site condition." (Tr. 2/63) Without more specific proof, we
are unable to determine what, if any, amount Ryan factored into its bid to cover learning
curve issues.
39. Ryan's dredging consultant, Mr. Humphreys, testified the Corps had
brought up "a lot of different" learning curves and inefficiency issues and he looked
into them and did not find "most of them or any of them are really valid" (tr. 1/97).
He testified there is a learning curve in any project and the learning curve should be a
part of the bid price (tr. 1/97, 224). He testified that, in the case of AS#8 and AS#9,
especially AS#8, the learning curve was "learning to deal with the different
material[s]" from what the contractor "came to the job prepared to dredge" (tr. 1/97).
Mr. Humphreys did not know if Ryan included any inefficiencies in its bid (tr. 11243).
He testified even if inefficiencies took place, the Corps "never quantified all these
alleged inefficiencies" (tr. 11224).
Downtime Installing a Global Positioning System (GPS)
40. QAR Wilson's log of Friday, 7 May 2010 indicated that the Corps
approved the as-built cross-sections of the Disposal Area and gave OSI permission to
commence dredging and disposal operations (app. supp. R4, tab 54 at 5420). His log
of Tuesday, 11May2010, indicated that Ryan started dredging on Monday, IO May
2010, but only dredged about an hour and spent the rest of the day installing a GPS on
12
the dredge. On 11 May 2010, Ryan continued dredging AS#8 in the morning, and
worked on the GPS again in the afternoon. (Id. at 5422)
41. Ryan contends "[t]he Corps offered no analysis to demonstrate that the
installation of the GPS system while dredge was running affected productivity" (app. br.
at 44). We find Ryan should have installed the GPS before it began dredging. We find to
the extent installing the GPS resulted in downtime, the downtime delayed project
completion but does not affect the Measured Mile calculation which uses dredge running
time not dredge downtime. We find to the extent installing the GPS delayed Ryan, it
made up for the loss time by later extending its shift hours and ultimately going to two
12-hour shifts.
Downtime Due to Low Tide
42. QAR Wilson's log of 14 May 2010 indicated Ryan continued to dredge
AS#8 on that day "until extreme low tide, then they had to shut down" (app. supp. R4,
tab 54 at 5424). This problem related to the draft of the dredge. The draft is the depth
of the dredge which could be two to three feet when it sits in water. Because Rose
Bay was shallow, Ryan "couldn't dredge through the low tide cycles" and had to stop.
(Wilson dep., ex. G-4 at 17). According to QAR Wilson, this affected Ryan's
productivity because the dredge was "sitting there not doing anything, waiting on the
tide to come back in" (id. at 19).
43. When Ryan realized what was occurring, it decided to add pontoons to the
dredge. It built the pontoons in its yard in Deerfield, Florida. (Tr. 11257)
Sonny Buchanan, Ryan's vice president of operations, who was in charge of all
operations at Rose Bay (tr. 1/250) testified it took "[a] couple [of] weeks" from the
time Ryan started work to have the pontoons attached (tr. 11258). Mr. Ryan testified
that "the flotation was added within two weeks of the job" (tr. 21101). After Ryan
installed the pontoons, it was able to dredge through the low tide cycles (Wilson dep.,
ex. G-4 at 19). According to Mr. Humphreys, low tide "created down time" for the
first 51 hours at the start of the job (tr. 11198).
44. Section 00 33 50 of Contract 0033 entitled "Weather, Water Stages and
Tide Data" provided elevations of tidal datums in the vicinity of the project area. The
datums provided were based upon values established by the National Oceanic and
Atmospheric Administration from a tide station located on a pier along the Halifax
River, approximately four miles from the project area. In addition, Section 00 33 50
referred bidders to a publication and a website for daily tidal predictions at locations
along the coastline of North and South America. (58755, R4, tab 5 at 312-14) Ryan
has not shown that the low tides experienced deviated from the norm.
13
45. We find Ryan should have anticipated encountering low tide which would
hamper its dredging efforts. We find that it should have installed the pontoons before
it began dredging. Dredge downtime caused by low tide, however, does not affect the
Measured Mile Method of damage calculation because that method uses running time
hours not downtime hours (tr. 11101). We find to the extent dredge downtime delayed
Ryan's dredging, it made up some of the downtime by later extending its shift hours
and by ultimately working double shifts.
Loss of Efficiency Dredging in a Swing Ladder versus in a Swing Anchor
Configuration
46. Ryan's dredge was capable of working in a swing ladder configuration or in a
swing anchor configuration (tr. 11220). According to the Corps, working in a swing
ladder configuration, the dredge had a 20-foot radius but it had a 70-foot radius working in
a swing anchor configuration. Because the cutter-head of the dredge had to stop and
reverse direction at the end of each swing, dredging in a swing anchor configuration with
a longer radius would result in fewer stops and thus at a higher production rate. The
Corps faulted Ryan in initially dredging in a swing ladder configuration and switching
later to a swing anchor configuration. (Answer at 33; gov't br., app'x A at 5)
47. QAR Wilson testified Ryan began its dredging in AS#8 and AS#9 in a
swing ladder configuration and did not change to a swing anchor configuration until it
reached AS#7. Ryan stayed with the swing anchor configuration for the rest of the
Acceptance Sections. According to QAR Wilson, dredging in a swing anchor
configuration "increased ... production quite a bit" because Ryan "was able to make a
wider cut." (Wilson dep., ex. G-4 at 25-26)
48. Mr. Buchanan testified that Ryan began dredging on the north and east
sides of AS#8 near the mouth of the canal where it was "very confined." He explained
there was a restaurant at one end and "houses and docks all the way down that north
side." He testified "[i]t would be extremely difficult in some of those areas to put
anchors down and use a winch." He testified had Ryan used the dredge in a swing
anchor configuration in that area, it would have been inefficient because "[ w]e
wouldn't have been able to make our cuts." (Tr. 1/267)
49. The evidence is by no means clear that dredging in a swing ladder
configuration is less efficient than dredging in a swing anchor configuration.
Dr. Luis A. Prieto-Portar, who teaches the Corps' engineers throughout the country
"dredging fundamentals," and who appeared as Ryan's geotechnical expert witness,
testified that the dredge Ryan used had the "same" or "equal" efficiency factor
according to the Corps' CEDEP formula. (Tr. 2/24-27) We find Ryan's operating its
dredge in the swing ladder configuration in AS#8 and AS#9 was not due to its lack of
proficiency but was dictated by the confined environment in which Ryan was
14
dredging. We find Ryan switched to operating its dredge in a swing anchor
configuration as soon as the areas in which it was dredging allowed it to do so. We
find switching from one dredge operating configuration to the other was a part of
Ryan's on-site learning process.
Single Versus Double Shifts
50. The Corps argues that AS#8 and AS#9 "should be removed from the
Measured Mile Calculation" because Ryan "worked only one shift per day for over
2 months." According to the Corps, this has "a significant impact on production as
slightly over 4 months was spent dredging these 2 areas so this period covers over half
the time the Appellant required to finish them." (Gov't br., app'x A at 6)
51. To be accurate, Ryan began dredging AS#8 on I 0 May and finished on
24 July 20 I 0, a period of 76 days. It began dredging AS#9 on 26 July 20 I 0 and
finished on 19 August 20 I 0, a period of 25 days. Thus, AS#8 and AS#9 took slightly
over 3 months to finish not "slightly over 4 months." Ryan went to a longer shift and
double shifts because "it became obvious that it was going to take a lot longer to
dredge the job with all the shells," and Ryan was trying to mitigate damages by
shortening the overall duration of the project (tr. 1/134).
52. Under the Measured Mile Method of calculating damages, the rate of
production in an impacted area depended upon the makeup of the materials dredged,
not upon the number of shifts worked. We find working longer shifts and double
shifts should be a part of the project's delay analysis, not a part of the Measured Mile
productivity comparison analysis.
Downtime due to Dredge Overhaul
53. The Corps cites the "major overhaul" of the dredge while working in AS#8 and
AS#9 in late June and early July 2010 as "not attributable to the DSC," and as one reason
AS#8 and AS#9 should be removed in calculating DSC damages using the Measured Mile
Method (gov't br., app'x A at 6). Ryan rented the dredge it used at Rose Bay (tr. 1/280).
Mr. Marc Barnell, Ryan's equipment and maintenance division manager (tr. 11293), looked
at several potential dredges to rent, and provided the dredging supply company the
parameters of what Ryan was "going to dig." The dredging supply company "put together
hydraulic datas [sic] and pump curves" and recommended a dredge that would be sufficient
to pump the materials expected. (Tr. 1/296)
54. Ryan rented the dredge known as "Snyder 4" from Snyder Industries, Inc.
(Snyder) on or about I December 2009 (tr. 1/297; gov't wit. book, ex. G-2, tab 15).
Before it rented the dredge, Mr. Barnell and Ryan's first mechanic conducted a "visual
inspection," "[ s]tarted the engine, checked the oil compartments," and "gave it an overall
15
look to make sure .. .it was in the shape to ... do this job" (tr. 11297). In addition, Ryan had
a third-party marine surveyor inspect the dredge to ensure it was operational (tr. 1/298).
55. A month-and-a-half after Ryan began dredging AS#8, the dredge had to be
overhauled due to a cracked head (tr. 1/299). Dredging was shut down for eight or
nine days, from 25 June to 2 July 2010, while it was being overhauled (tr. 11120,
31123; gov't wit. book, ex. G-2, tab 9).
56. The head of an engine sits atop of the engine. When the engine works hard,
"the firing pressure and everything goes way up," and the head "gets so hot it cracks"
(tr. 1/122). Pumping silt would not crack the head of an engine but dredging shells and
sand could (tr. 11121-22). Mr. Humphreys, who had extensive experience in dredging
(tr. 1115), testified he "absolutely" would not expect a properly running dredge at the time
it was brought to the site would need an overhaul in the course of dredging 250,000 c.y.
of zero blow count materials described in the specifications (tr. 11122-23).
57. Mr. Barnell explained that the dredge engine became overheated for two
reasons: (1) pumping consolidated materials such as shell placed more demand on the
engine than pumping silt; and (2) the consolidated crusts or "the layer of shell. .. would not
allow that dredge to dissipate the heat" (tr. 11300). He testified when the engine of a dredge
overheated "[s]everal times," that could finally crack the head of the engine (tr. 1/302).
58. QAR Wilson opined at his deposition that "when the dredge was brought
on the job it needed an overhaul" (Wilson dep., ex. G-4 at 23). Mr. Barnell countered
"there's no life expectancy at the 11,000 hours" for a well maintained engine, and the
factors that contributed to the life of an engine included "[h]ow well it was
maintained ... how well it was run; the conditions, the environment it [ran] in"
(tr. 11298). He testified he visually checked the dredge for leaks and discoloration; he
checked the oil compartments for cleanliness; and he started the engine and listened
before renting the dredge from Snyder (tr. 11299).
59. In determining what could potentially cause overheating the dredge engine,
we examine OSI's daily QC Reports. We find the reports credible because they were
contemporaneously prepared by OSI's quality control representative (QCR), Matt Hart,
who was an eye-witness to the dredging conditions encountered on a daily basis, and
whose job it was to file the QC Reports with the Corps (tr. 3/80). We also find these
reports credible because the Corps had its own QAR at the job site, and the Corps had
never complained that the QC Reports over or under stated the materials dredged.
60. We recognize the percentages of the various materials reported were
estimates. We believe, however, they provide reliable information on a day-to-day
basis, the nature and order of magnitude of the various materials dredged. To us, a day
on which Ryan dredged 50% mud and 50% silt was far different from a day on which
16
Ryan dredged 25% sand, 25% mud, 25% silt and 25% shell because sand and shell
were far more difficult to dredge than mud and silt, especially when they existed in a
consolidated crust-like state. Moreover, if Ryan was dredging 25% sand and 25%
shell for four or five days straight, the difficult dredging condition would more likely
put far more stress on Ryan's equipment (engine, booster pump, etc.) than dredging
25% sand and 25% shell once a week or once every 10 days.
61. We noted previously that AS#8 was dredged over a 76-day period from
10 May to 24 July 2010. In our entitlement decision, we found that OSI first notified
the Corps on 19 May 2010 that on 13 May 2010 Ryan encountered hard bottom sooner
than expected. Optimum, 15-1BCAii35,939 at 175,643, ii 43. We found what the
parties believed to be hard bottom turned out to be crusts consisting of whole oyster
shells, sand, shell fragments, and at some locations clusters of oysters interlocked with
mud and sand. We found that the Corps directed OSI to continue to dredge through
the firm layers of crust above the hard bottom. (Id., ii 4 7)
62. The daily QC Reports show that Ryan encountered significant amounts of
sand and shell the week preceding the dredge overhaul:
Date Sand Mud Silt Shell
6/18/2010 0% 50% 50% 0%
6/19/2010 10% 30% 40% 20%
6/20/1010 0% 0% 0% 0%
6/21/2010 35% 20% 25% 20%
6/22/2010 20% 30% 25% 25%
6/23/2010 0% 50% 50% 0%
6/24/2010 0% 50% 50% 0%
(Gov't wit. book, ex. G-2, tab 4 13 )
63. Based on the testimonial evidence, we find Ryan carefully selected a
suitable and operational dredge for dredging what it expected to be unconsolidated
zero-blow count material. Other than unsupported belief, we find no evidence to
support the Corps' contention that the rented dredge was "past its useful life." Based
upon what OSI QCR's daily QC Reports, we find the most probable cause of engine
overheating that ultimately cracked the engine head was the fact that Ryan
encountered significant quantities of sand and shell from 19 to 22 June 2010. In any
event, dredge downtime would not affect the Measured Mile calculations because that
method uses running time hours, not downtime hours.
13
This exhibit is a summary prepared from the daily QC Reports contained in app.
supp. R4, tab 52 at 2469 to 5616.
17
Dredging into High Spots and Clogging the Dredge Discharge Pipeline
64. The Corps argues that another reason for excluding AS#8 and AS#9 from
the Measured Mile calculation was Ryan's failure to use pre-dredge surveys to plan
the job. It argues this failure "was detrimental to the production on the project [which]
did not result from the DSC." (Gov't br., app'x A at 6)
65. The Corps refers to two incidents. The first occurred on 22 September
2010. QAR Wilson's log reflected that in the late afternoon that day Ryan
encountered "some shell material" which "plugged up the dredge discharge pipe
between [the] dredge and booster #2 pump," and Ryan's crew was observed "working
to unblock the dredge discharge pipe" (app. supp. R4, tab 54 at 5512).
66. QAR Wilson's log stated after probing the area, he found a high spot or mound
where the dredge had been dredging before the blockage occurred, and he subsequently
confirmed that the high spot was indicated on the pre-dredge survey. He opined:
It appears that Ryan's crew and management are not
reviewing the pre-dredge surveys very closely. Because
the leverman was unaware of the high spot/mound and cut
right into it plugging the discharge pipe.
(App. supp. R4, tab 54 at 5513) His log went on to say "It was obvious the leverman
was unaware of this condition; therefore, caused pipe blockage!" (id.).
67. QAR Wilson testified after he brought up the pre-dredge survey, Ryan "had
the leverman review the predredge surveys and [kept] a close eye on him." Ryan's
dredging superintendent also "went out and started marking the high spots."
According to QAR Wilson, after this incident, Ryan did not experience more plugged
dredge lines. (Wilson dep., ex. G-4 at 32)
68. Having to un-clog the dredge discharge pipe resulted in downtime. We
find the clogging on 22 September 2010 could have been avoided had Ryan's
leverman consulted the pre-dredge survey. Because the Measured Mile Method of
calculating damages uses dredge running time hours not downtime hours, the
22 September 2010 incident would not affect the Measured Mile damage calculations.
Moreover, the incident occurred in AS# 1 and not AS#8 or AS#9 (see finding 30), and
should not have any bearing in considering whether AS#8 and AS#9 should be
removed from the Measured Mile calculations. We find to the extent the
22 September 2010 clogging of the dredge pipeline caused downtime, Ryan made up
some of the downtime by working double shifts.
18
69. The second incident of clogging occurred on 13 October 2010: Referring to
QAR Wilson's log of 15 October 20 I 0, the Corps' post-hearing brief noted "only one
more clogged line" "associated with a mechanical breakdown of the dredge" took place
(gov't br., app'x A at 6). QAR Wilson's log of 15 October 2010 indicated that Ryan
"stopped dredging on Wednesday [ 13 October 201 O] about 1700 hrs because dredge
engine went down with a cracked head. It had overheated prior to that after dredging thru
some sand [and] shell material." (App. supp. R4, tab 54 at 5530) OSI's daily QC
Reports show Ryan was dredging the following materials just before 13 October 2010:
Date Sand Mud Silt Shell
10/09/2010 30% 0% 30% 40%
10/1112010 25% 25% 25% 25%
10/12/2010 25% 25% 25% 25%
10/13/2010 50% 0% 10% 40%
(Gov't wit. book, ex. G-2 at tab 4)
70. We find the 13 October 2010 clogging incident was caused by the high
concentration of sand and shell materials encountered in AS#2.
Use of 12-Inch Dredge Pipe
71. The Corps contends that by using a 12-inch dredge pipe on a 10-inch dredge
affected Ryan's productivity. For dredging purposes, Ryan purchased 11,000 feet of plastic
dredge pipe to run from the dredge, through a booster pump, to the Disposal Area (tr. 11304).
At the hearing, the Corps called as its witness a leverman (dredge operator) with 30 years of
dredging experience (tr. 3/17). This witness opined that Ryan's use of a 12-inch dredge pipe
behind a 10-inch dredge caused a 20% drop in pumping velocity (gov't wit. book, ex. G-3,
tab 20). Being a field person, the witness was unable to explain how he derived the 20%
drop in pumping velocity. He testified the information was provided to him by contracting
officer's representative (COR) Michael A. Presley (tr. 3/27; gov't wit. book, ex. G-3, tab 22).
COR Presley is a civil engineer who has worked in the contract administration section of the
Corps' north Florida area office for 12 years since 2003 (tr. 3/69).
72. Documentary evidence shows a 12-inch dredge pipe actually has an outside
diameter (O.D.) of 12.750" and an inside diameter (1.D.) of 11.160" (gov't wit. book,
ex. G-3, tab 22). Ryan's Mr. Barnell testified that even though Ryan could have
purchased a IO-inch discharge pipe (with O.D. of 10.750" and l.D. of9.409") (id.), it
chose a slightly larger pipe to "reduce the friction loss" pumping "silt or light sand"
(tr. 11306-07, 309-10). He testified that with silt, it "would've made no
difference ... whether it was an inch smaller or an inch larger" (tr. 11259).
19
73. Based upon unrebutted testimony, we find the use of a 12-inch dredge pipe
would have made little productivity difference if Ryan had been dredging zero-blow count
unconsolidated sediment with little to some sand, and trace to little sand-sized shell
fragments, as described in the contract documents. We find to the extent there was loss in
productivity, it was caused by the firm layers of crust in patches and high concentration of
broken and whole shells at various locations that Ryan actually encountered. Since Ryan
used the same 12-inch dredge pipe in dredging all of the Acceptance Sections, its use
would have affected the dredging productivity of all impacted areas to the same degree,
and no adjustment needs to be made for comparing the productivity of the impacted
dredging areas and the un-impacted dredging area under the Measured Mile Method.
Implementing Dredging Advice
74. Concerned that production was not as expected, Ryan turned to
Mr. Humphreys for advice. 14 Mr. Humphreys is a professional civil engineer. He first
worked on a dredge in 1962 when he was 19. After graduation from college, he
worked in the estimating department and was assigned as a project manager of a
dredging company. He was the chief engineer of the dredging division of a large
company in Louisiana. He later returned to the dredging company he worked for as its
vice president of operations. Since 2001, he has worked as a consultant for dredging
and construction companies. (Tr. 1114-18) Mr. Humphreys prepared Ryan's expert
report for the entitlement case (58755, ex. 201). He prepared Ryan's REA which
ultimately became OSI's certified claim (tr. 1/18). He also developed and testified to
Ryan's various methods of calculating DSC damages (tr. 1/18-249).
75. The Corps contends that Ryan did not follow many of the recommendations
Mr. Humphreys made (tr. 11246). Mr. Humphreys visited Rose Bay on 14 July 2010 when
Ryan was dredging AS#8 (tr. 1/241; finding 30). As a result of his visit, Mr. Humphreys
wrote two letters, both dated 18 July 2010: The first letter provided his "suggestions about
production" (R4, tab 549 at 5157-61 ); the second letter contained his observations and
comments of the plans and specifications he reviewed (id. at 5162-68).
76. Mr. Humphrey's first letter observed that Ryan had "very long pipelines" and
"material to be dredged that can vary from silt to sand with shell fragments to occasional
oyster shells" (R4, tab 549 at 5157). His letter advised that "depending upon how you
operate you will have very wide swings in production rates." He advised that other than
daily running time and a good leverman, "the most important factor will be the flow rate
of the slurry through the pipeline." (Id. at 5157) Since the area inside the pipeline was
constant, Mr. Humphreys' letter said "flow rate comes down to velocity of the slurry."
14
As his firm's letterhead indicated, Construction Consulting Associates, Inc.
provides consultations for "THE HEAVY CIVIL, DREDGING, AND
MARINE CONSTRUCTION INDUSTRIES" (see 58755, ex. 200, tab D-37).
20
He recommended that Ryan should (1) operate at a "velocity in the 14 - 16 feet/sec.
range," and (2) "never have less than a full pipe when dredging anything but the lightest
silt or organic material." In order to keep track of the flow rate, Mr. Humphreys
recommended that Ryan invest in a velocity meter, and suggested "[a] combination
velocity and density meter would be great if not cost prohibitive." (Id.)
77. As far as the "booster or boosters" were concerned, Mr. Humphreys' letter
said he would "set the controls to run each booster unit at the highest speed that is safe
all of the time that the dredge is digging" with certain exceptions. The letter said that
he would "try to place the booster(s) so that under normal operating conditions ... at
least 25-30 psi [is] coming in." (R4, tab 549 at 5160) He advised:
Whether operating with one booster or two it is very
important to have accurate data every day. There are so
many things that can affect production when you have long
lines, material that varies, and multiple pumping units that
if you do not have consistent and dependable information
every day you will have a lot of trouble trying to determine
what is going on when production varies, or trying to
determine what you need to do to increase production.
(Id.)
78. Mr. Humphreys' letter also said "given the fact that your pipeline lengths
are going to vary, the material may vary, and given the fact that you have two pumps
in the system (and probably will have three at some point)" it would be important to
maintain certain data (R4, tab 549 at 515 8). He also stated "Whether operating with
one booster or two, it is very important to have accurate data every day" (id. at 5160).
Contrary to the Corps' argument (gov't hr. at 17), Mr. Humphreys did not say that
Ryan must operate with two booster pumps where one was sufficient. Nor did he say
that operating with two booster pumps would necessarily improve productivity.
79. Mr. Humphreys' second letter of the same date summarized what he found
the borings showed: Nine of the ten borings were in the dredging area, with Borings 2
through 8 west of the U.S. 1 Bridge and Borings 9 and 10 east of the bridge. The letter
said west of the bridge, the boring logs showed all of the materials within the dredging
template were WOR (Weight of Rods); and east of the bridge, one boring (CB-RB-9)
was WOH (Weight of Hammer) and one boring (CB-RB-10) was WOR.
Mr. Humphreys summarized the nature and character of the materials Ryan should
have encountered in these words:
The fact that the boring logs indicate that all of your
material should be WOR or WOH agrees with the Corps
21
general description of material (" ... as indicated by the
absence of blow count").... This indicates soft material.
The letter advised that in order to have a claim for the tide level, Ryan would have to
demonstrate that the low tides it was experiencing were lower than what it could
reasonably have expected based upon the best information available at the time of bid.
(R4, tab 549 at 5164)
80. Mr. Humphreys explained that his letters were "more of a general, industry
suggestions about dredging on a job like that," and did not address "the difference in
what was expected and what was encountered" (tr. 11233).
81. The Corps contends that the "flow" in Ryan's pipeline was less than
optimum. The "flow" has to do with the velocity of the materials going through a
pipeline; the greater the velocity, the greater the production. The flow in the pipeline
would be greater with silt and water than with sand, shell and water. (Tr. 11136-37)
82. Mr. Charles Hartsfield, the Corps' expert leverman, testified Ryan was
dredging at a velocity of as high as 8 fps and as low as 0.52 fps (tr. 3/39-40). It is not
clear when and where Ryan was dredging at the time. No record evidence or analysis
of the actual flow rate or velocity of the slurry was presented. Mr. Buchanan testified
that given what Ryan encountered, there was nothing Ryan could do to increase the
flow (tr. 11264) and the flow would "slow down slightly .. .if you got into ... heavy
shell" (tr. 11263).
83. A velocity or flow meter is used to provide velocity information in the
pipeline (tr. 11237). A velocity meter is "just a gauge" that could be used with normal
gauges, vacuum and pressure gauges on a dredge to provide information (tr. 1/308). It
does not make pumping more or less efficient. An experienced leverman could gauge
the velocity of materials going through a pipeline. (Tr. 1/264, 308) It is common for
dredging to be done without a velocity meter. The dredge Ryan rented did not come
with a velocity meter. (Tr. 11308) There was no contract requirement for Ryan to
have a velocity meter (tr. 11238).
84. At Mr. Humphreys' recommendation, Ryan did obtain a velocity meter.
Ryan's dredge operators, however, chose not to use the velocity meter but to rely on the
vacuum gauges instead (tr. 11307) Mr. Buchanan explained that his experienced dredge
operators would rather use vacuum gauges and go by "the feel" of the dredge (tr. 1/262).
85. Since Ryan did encounter a DSC in all but one of the Acceptance Sections,
we find that Mr. Humphreys recommendations, based upon dredging "material. .. that
can vary from silt to sand with shell fragments to occasional oyster shells" (finding 76)
and "soft material" as indicated by "the absence of blow count" (finding 79) cannot be
22
used as a criteria for measuring the flow rate or pumping velocity Ryan could or
should have achieved.
Booster Pump Placement
86. The Corps contends that Ryan "experienced numerous issues with the
booster pumps installed on the project." It alleges that "[a]fter over 2 months of
dredging, the Appellant moved the booster 2000 feet closer to the dredge in an effort
to improve production." (Gov't hr., app'x A at 5)
87. Because the materials dredged had to be moved from Rose Bay to the
Disposal Area, some distance away, a booster pump was needed to maintain the flow
rate or velocity of the dredged materials from the dredge to the Disposal Area (Wilson
dep., ex. G-4 at 26). As Mr. Humphreys explained, a booster is essentially "a dredge
without all the winches and spuds. It's an engine and a pump," and its purpose is to
add "head" "to push the slurry from the dredge to the disposal area" (tr. 11114).
88. To dredge Rose Bay, Ryan rented two boosters (tr. 11280). Ryan brought one
booster to the site initially (tr. 1/281 ). It then rented the second booster as a spare in the
event the first booster failed. Using both boosters at the same time would not have
increased the efficiency of dredging. (Tr. 1/286) As the distance between the dredge and
the Disposal Area increased, the pressure of the booster could start to drop. In that case, the
booster would have to be moved. Mr. Ryan testified "depending [on] how far from the
dump we were we'd have to put in the second booster. We never had to do that." (Tr. 2/90)
89. QAR Wilson testified that when Ryan initially set up its dredging
operations, it positioned the booster pump "about halfway between the dredge and the
disposal area" (Wilson dep., ex. G-4 at 27). According to QAR Wilson, during
dredging of AS# 8 and AS#9, Ryan "moved the booster right up behind the dredge at
one time" and then moved the booster "back to the original position" (id. at 28-29)
suggesting that Ryan did not know what it was doing.
90. Opinions varied as to where the booster should be placed. According to
QAR Wilson, typically, a booster should be placed halfway or "somewhere close to
halfway" between the dredge and the Disposal Area. He acknowledged, however, it
was up to Ryan to place the booster pump where it believed was most efficient.
(Wilson dep., ex. G-4 at 60-61). The Corps' expert leverman report stated "The
booster should have been no more than 500' behind the dredge, and remain 500' the
entire job in order to maintain proper vacuum, discharge pressure and velocity. All
discharge pipe should have been added behind the booster. By maintaining 500' from
the booster working pressure would be the same from start to finish." (Gov't wit.
book, ex. G-3, tab 20) At the hearing, he testified if the materials to be dredged had
23
been primarily silt with some sand and shell, the best location for the booster would
still be 500' behind the dredge (tr. 3/20).
91. After his consultation trip to Rose Bay in July 2010, Mr. Humphreys
recommended moving the booster closer to the dredge (R4, tab 549 at 5158). He explained
at the hearing where the booster was placed made no difference "up to the point. .. where
you have less than zero pressure coming in and then it makes a difference" (tr. 1/178). He
testified he recommended moving the booster closer to the dredge because "the incoming
pressure to the booster was getting very low," although still positive (tr. 11118, 177). He
suggested moving the booster closer to the dredge "to avoid taking a chance," and Ryan
eventually "moved it back out again" (tr. 11118). On 16 July 2010, Ryan moved the
booster pump to within 2,000 feet of the dredge (app. supp. R4, tab 54 at 5464).
92. Mr. Buchanan testified "[t]he problem wasn't the booster. It was the
materials difference that prompted us to try to move the booster to another location."
(Tr. 11260) He testified changing the booster placement was "[j]ust to try something
different" with the idea that "maybe if [the booster] got close to the back end of the
dredge that. .. might help ... with the oversized material" (tr. 11261). After the booster
was moved closer to the dredge, it could be operated at a higher and more efficient
rpm. This, however, created too much pressure from the dredge discharge and created
air inside the impellers causing cavitation and overheating in the pump. (Tr. 1/283)
Ryan then moved the booster back out to between 4,000 to 4,500 feet from the
Disposal Area. According to Mr. Buchanan, the dredge "worked pretty well the rest of
the job in that same location," and Ryan "never moved it again." (Tr. 11283)
93. Based on the evidence in the record, we find where the booster pump
should be placed depended upon the particular circumstances of dredging. Given the
DSC encountered in AS#8 and AS#9, we cannot conclude that moving the booster
pump back and forth to address the crusts it was directed to dredge reflected a lack of
proficiency in Ryan's dredging operations. We find moving the booster pump was a
part of the learning Ryan went through to address the DSC it encountered as it dredged
further and further away from the Disposal Area.
Booster Pump Replacement
94. When the booster overheated and broke down and had to be replaced while
dredging AS#9, the Corps contends the breakdown was not the result of encountering
a DSC but the result of Ryan's "inefficiencies" and "incompetencies" (tr. 11112).
Ryan dredged AS#9 between 26 July and 19 August 2010 (see finding 34).
QAR Wilson's log of 6 August 2010 noted "Ryan has mobilized another booster
pump" (app. supp. R4, tab 54 at 5472).
24
95. OSI's daily QC Reports immediately preceding the booster pump
breakdown show Ryan encountered an area of heavy sand and shell concentration:
Date Sand Mud Silt Shell
8/2/2010 25% 25% 25% 25%
8/3/2010 25% 25% 25% 25%
8/4/2010 25% 25% 25% 25%
8/5/2010 25% 25% 25% 25%
8/6/2010 25% 25% 25% 25%
(Gov't wit. book, ex. G-2, tab 4 at 2)
96. We find from 2 to 6 August 2010, immediately preceding the booster pump
breakdown, Ryan was dredging 25% sand and 25% shell every day for an entire week.
We find the most probable cause of the booster pump breakdown and the downtime
experienced was the high content of sand and shell encountered prior to the
breakdown. Ryan has acknowledged that it was responsible for the booster problems
that occurred on 7 to 9 August 2010 (see finding 21 n.6)
Treatment of AS#8 and AS#9 in the Corps' Measured Mile Calculation
97. The Corps contends that Ryan "had a huge learning curve due to the
shallow bay and long pipeline" (gov't br. at 32). It argues that "[w]hile the production
problems in AS-8 and 9 may have been partially due to the DSC, the poor production
was more strongly influenced by the contractor's 'learn curve."' The Corps argues
that "AS-8 and AS-9 must be removed during the determination of the gross
production achieved for comparison to the control period" (gov't br., app'x A at 5).
98. The Corps' post-hearing brief attached as Appendix Ba 12-page list
entitled "RYAN SOUTHERN DREDGING ISSUES" (gov't br., app'x B). The list
purports to show examples that "Appellant had a huge learning curve due to shallow
bay and a long pipeline" (gov't br. at 32-33). The Corps did not provide this list
before or during the hearing. While some of the events were addressed by
QAR Wilson at his deposition and Ryan was able to provide a rebuttal at the hearing,
most of the events were cryptically written and incomprehensible absent proper
context. We do not find the list helpful in distinguishing events which were differing
site condition-caused versus those caused by Ryan's learning curve.
Ryan's Proposed Adjustment in Using the Measured Mile Method
99. For purposes of determining damages using the Measured Mile Method, the
production rate of AS#7 is used to establish what Ryan could have achieved absent the
differing site conditions encountered. If the Measured Mile Method is to be used, Ryan
25
proposed three adjustments: (a) a 10% adjustment for encountering some shell and
consolidated material in AS#7 in sufficient quantities to have some impact; (b) a 10%
adjustment for installing rebars across the suction mouthpiece of the dredge in AS#7; and
(c) an adjustment taking into account running time reported in AS#7 that was actually
running time dredging in AS#l and AS#2. (Compl., ex. B, calculations A and B)
(a) Ryan's Proposed Adjustment for Encountering Some Shells and
Consolidated Materials in AS#7
100. Based upon a question from Ryan's counsel, Mr. Humphreys testified he
knew shells were in AS#7 because he saw them there and he heard "other testimony
about it." He also testified he saw the Corps' cross-sections. (Tr. 3/90) He
acknowledged, however, that cross-sections horizontally and vertically could be
exaggerated for depiction purposes by "a factor of five" (tr. 11217).
101. AS#7 was dredged during a 24-day period between 25 August and
17 September 2010 (finding 34). The daily QC Reports during this period reported
0% sand and 0% shell were encountered:
Date Sand Mud Silt Shell
8/25/2010 0% 50% 50% 0%
8/26/2010 0% 50% 50% 0%
8/27/2010 0% 50% 50% 0%
8/28/2010 0% 50% 50% 0%
8/29/2010 0% 0% 0% 0%
8/30/2010 0% 50% 50% 0%
8/3112010 0% 50% 50% 0%
911/2010 0% 50% 50% 0%
9/2/2010 0% 50% 50% 0%
9/3/2010 0% 50% 50% 0%
9/4/2010 0% 50% 50% 0%
9/5/2010 0% 0% 0% 0%
9/6/2010 0% 0% 0% 0%
9/7/2010 0% 50% 50% 0%
9/8/2010 0% 50% 50% 0%
9/9/2010 0% 50% 50% 0%
9/10/2010 0% 50% 50% 0%
911112010 0% 50% 50% 0%
9/12/2010 0% 0% 0% 0%
9/13/2010 0% 50% 50% 0%
9/14/2010 0% 50% 50% 0%
9/15/2010 0% 50% 50% 0%
26
9/16/2010 0% 50% 50% 0%
9/17/2010 0% 50% 50% 0%
(Gov't wit. book, ex. G-2, tab 4)
102. Weighing the evidence, Mr. Humphreys' testimony is too weak to overcome
OSI's contemporaneously prepared daily QC Reports. Ryan never notified OSI or the
Corps that it encountered a DSC in AS#7 as it did in other Acceptance Sections. Also,
based on the Geotechnical Data Report's definition, we have found that "a prospective
contractor should expect to dredge whole or broken shells up to three inches in diameter."
Optimum, 15-1 BCA at 175,638, if 13. Thus, encountering some shells should be
expected. We find there were not enough areas of consolidated sand and shell ("crust"),
if they existed at all in AS#7, to have any meaningful adverse impact on dredging
production to warrant a 10% adjustment to AS#7's production rate that Ryan advocated.
(b) Ryan's Proposed Adjustment to AS#7 as a Result of Welding Rebars to the
Suction Mouthpiece
103. In calculating damages using the Measured Mile Method, Mr. Humphreys
proposed a 10% adjustment to the average gross production per hour in AS#7 to
account for the adverse impact to production from welding rebars over the suction
mouthpiece of the dredge (compl., ex. B, calculation A.). This adjustment has the
effect of raising Ryan's productivity in the un-impacted AS#7 thus widening the
productivity difference between AS#7 and the impacted areas.
104. The Corps objected to this adjustment because ( 1) "it is not supported by
any data and purely opinion"; (2) "there is no documentation of a screen being
installed for the work in AS-7"; and (3) "the screen was installed October 9, several
weeks after the dredging in AS-7 was complete" (answer at 35).
105. Mr. Buchanan testified that the dredge it rented "came with [a] partial screen"
on the suction inlet (tr. 11268, 278, 288). As a result of its experience dredging AS#8 and
AS#9, Ryan welded rebars to the original screen when it reached AS#7 "to try to cut down
on some of the larger shells" which were clogging up the pump (tr. 11278). After Ryan
finished dredging AS#7, it purchased a "commercially-manufactured ... Gatling" which
was mounted to the back of the cutter head to "further help to reduce the oversized
material getting through" (tr. 11269). We find the Gatling was the screen QAR Wilson
referred to as having been installed "may be 8 or 9 October [201 O]" (Wilson dep., ex. G-4
at 29-30). The rebars Ryan welded over the suction intake was not the same as the
Gatling Ryan installed in October 2010. The adjustment Ryan proposed pertained to the
rebars it installed when it reached AS#7.
27
106. The Corps questioned Ryan's 10% adjustment for lack of support. At the
hearing, Mr. Humphreys explained that his calculation was based on an equation used in a
thesis on the subject of"MEASURING THE EFFECTS OF CUTTER SUCTION
DREDGE OPERATING PARAMETERS ON MINOR LOSSES DUE TO FIXED
SCREENS INSTALLED AT SUCTION INLET" submitted by a Master of Science Ocean
Engineering student to the Office of Graduate and Professional Studies of Texas A&M
University (app. wit. book, tab 22 at 1722). Using the equation, Mr. Humphreys
calculated a 12.61 % reduction in production on account of the rebars. In comparing the
screens shown in the thesis (see id. at 1770, figure 11) and the sketch of the bars
Mr. Humphreys drew for his calculation (id. at 5745), we find they look totally dissimilar.
107. Mr. Buchanan described the rebars Ryan added as "something that sticks
out on the sides and goes around so that it stops the material from getting through"
(tr. 11276) which fits Mr. Humphrey's sketch. At the hearing, he volunteered "(t]he
rebar screen that we put on there had no impact at all on the flow, nothing" (id.), and
did not restrict the flow of dredged materials (tr. 11277). He later changed his
testimony based upon a question from counsel:
Q. Okay. Now, that second screen that was put on
there with the rebar is going to necessarily affect the flow
of material in- it's going to restrict it somehow into the
pipe. Correct? Because you've got rebar, you've got now
things covering the opening to a certain degree.
A. If you're over the direct intake on the pipe it will
affect it.
(Tr. 11288) Weighing the evidence, we find Mr. Buchanan's initial testimony more
credible. We find the rebars Ryan welded to the dredge's suction mouthpiece made too
little difference, if at all, to warrant a 10% upward adjustment to Ryan's AS#7 production
rate.
108. AS#7 was the third Acceptance Section dredged. After AS#7, Ryan went
on to dredge six more Acceptance Sections (AS#l through AS#6) (finding 34). Thus,
ifthe welded bars affected the production rate of AS#7, they would have the same
effect dredging AS# 1 through AS#6. The Measured Mile Method compares the
difference in production rates between an impacted and an un-impacted area assuming
all other conditions, including the equipment used, remains the same. Here, the same
equipment - a 10-inch dredge with bars welded across the suction intake - was used in
AS#7 and AS# 1 through AS#6. Making an adjustment to account for the effect of the
welded bars for AS#7 without making the same adjustment for AS# 1 through AS#6
would introduce a variable for no reason into the Measured Mile calculations. We
recognize AS#8 and AS#9 were dredged without the welded bars. In averaging the
28
production rates of all eight impacted Acceptance Sections, as we will do in our
Measured Mile calculations, the effect of the welded rebars will, to whatever extent
existed, be included in the average production rate achieved in the impacted areas.
109. The Corps posits that "it was not the material that was impacting production,
but rather other factors which were the responsibility of the Appellant" (gov't reply br. at
50). As support, the Corps points out that in AS#6, an Acceptance Section that was 2,500
feet further away from the Disposal Area than AS#7, where 25% shell was dredged for
the entire duration it was dredged (19 January to 7 February 2011) (see gov't wit. book,
ex. G-2, tab 4), had a comparable production rate as AS#7 (195 gross c.y./hr. for AS#6
compare to 210 gross c.y./hr. for AS#7) 15 (id.). After the Gatling was installed in
October 2010 when Ryan finished dredging AS#7, there was a noticeable production
improvement in dredging AS# 1 through AS#6 (see finding 117). We find installation of
the Gatling made the difference as Ryan learned to dredge DSC materials.
(c) Ryan's Adjustment to AS#7's Running Time for Dredging into AS#l and AS#2
110. AS#7 shared common borders with AS#l and AS#2. To ensure that AS#7
was dredged to the required depth at the boundaries, Ryan dredged slightly into AS# 1
and AS#2 while dredging AS#7. Estimating that it dredged 10 feet into AS# 1 and AS#2,
and based upon 1,5 55 feet of common sides between AS#7 and AS# 1 and AS#2, Ryan
estimated it dredged 15,500 square feet into AS#l and AS#2. Estimating that it was
dredging approximately 2,060 square feet per running hour in AS#7, Ryan calculated that
7 .5 hours of dredge running time in AS#7 was actually dredging AS# 1 and AS#2.
According to Ryan, the daily reports logged 196.5 hours of total running time dredging
AS#7. Deducting the 7 .5 running hours dredging AS# 1 and AS#2, Ryan arrived at 189
hours of dredge running time in AS#7. (Comp I., ex. B, calculation A, note 1) In its
post-hearing brief, Ryan changed the 7.5 hours to 4.6 hours to arrive at 191.9 hours as the
AS#7 dredging running time (app. br., app'x Bat 1, 3). Reducing the dredge running
hours in AS#7 has the effect of increasing the productivity rate for AS#7 which, in tum,
would increase Ryan's recovery under the Measured Mile calculations.
111. The Corps objected to this adjustment because the extent to which AS# 1 and
AS#2 was dredged was, in its words, "speculation." The Corps argued that this
adjustment was unnecessary because "a proportional amount of dredging 'beyond the
lines' would be required to clear all of the other sections." (Answer at 34) The Corps
used 39,548 c.y. (see finding 116) as the amount of materials dredged in AS#7. The
Corps used 199.25 hours as the actual AS#7 running time (see finding 116). For purposes
of the Measured Mile calculation, we will use 199 .25 hours as the AS#7 dredge running
time.
15
We computed 197.74 c.y./hr. as the production rate of AS#6 and 198.48 c.y./hr. as
the production rate for AS#7 (see finding 116).
29
112. We find cross border dredging occurred in every Acceptance Section (see
58755, ex. 200, tab D-2, schematic at 107-08). We find the adjustment Ryan proposed
would treat AS#7 differently when the same cross border dredging occurred in every
Acceptance Section, contrary to the Measured Mile Method of calculation in keeping
the same conditions constant.
Key Numbers in Calculating Damages Using the Measured Mile Method
113. After dredging was completed in each Acceptance Section, the Corps had
ARC Surveying & Mapping, Inc. (ARC) survey the volume of materials dredged. The
ARC surveys reported:
AS No. Report Date Volume Dredged (c.y.)
AS#l 12 October 2010 19,434
AS#2 16 November 2010 21,875
AS#3 14 December 2010 31,963
AS#4 14 December 2010 34,822
AS#5 19 January 2011 30,963
AS#6 9 February 2011 24,767
AS#7 12 October 2011 39,548
AS#8 20 August 2011 28, 161
AS#9 20 August 2011 19,024
Total 250,557
(Gov't wit. book, ex. G-2, tab 10) The volume of materials dredged in each
Acceptance Section as shown in the table above has not been disputed by Ryan.
114. Based upon ARC's post-dredge survey, we accept 39,548 c.y. as the
volume dredged in AS#7. We will use 39,548 c.y. in our Measured Mile calculation.
115. Based upon ARC's post-dredge survey, we accept 250,557 c.y. as the total
volume dredged from all nine Acceptance Sections.
116. The pumping hours in the rest of the Acceptance Sections are not in dispute
(gov't wit. book, ex. G-2, tab 9 at 2). By dividing the volume dredged in each Acceptance
Section by the corresponding pumping hours logged in that Acceptance Section, the
production rate (in c.y. per hour) in each Acceptance Section can be calculated:
30
AS No. Pumping Time Volume Dredge (c.y.) Production Rate (c.y./hr.)
AS#l 113.13 19,434 171.78
AS#2 148.00 21,875 147.80
AS#3 211.00 31,963 151.48
AS#4 200.63 34,822 173.56
AS#5 267.75 30,963 115.64
AS#6 125.25 24,767 197.74
AS#7 199.25 39,548 198.48
AS#8 432.75 28,161 65.07
AS#9 189.25 19,024 100.52
Total 1,887 250,557
117. Based upon the sequence of dredging, we find there was a steady
improvement and leveling off in production rates as Ryan proceeded from one
Acceptance Section to another. We find this improvement was due partly to learning
and implementing the lessons learned:
Order Dredged AS No. Production Rate (c.y./hr.)
1 AS#8 65.07
2 AS#9 100.52
3 AS#7 No DSC
4 AS#l 171.79
5 AS#2 147.80
6 AS#3 151.48
7 AS#4 173.57
8 AS#5 115.64
9 AS#6 197.74
118. Excluding the un-impacted AS#7, we calculate the average production rate of
all impacted Acceptance Sections (AS#l -AS#6, AS#8 and AS#9) to be 125.02 c.y./hr.:
31
AS No. Pumping Time Volume Dredge (c.y.) Production Rate (c.y./hr.)
AS#l 113.13 19,434 171.78
AS#2 148.00 21,875 147.80
AS#3 211.00 31,963 151.48
AS#4 200.63 34,822 173.56
AS#5 267.75 30,963 115.64
AS#6 125.25 24,767 197.74
AS#7
AS#8 432.75 28, 161 65.07
AS#9 189.25 19,024 100.52
Total 1,687.76 211,009 125.02 (average)
We will use 125.02 c.y./hr. as the average production rate achieved in the impacted areas
for comparison with the 198.48 c.y./hr. production rate achieved in the un-impacted AS#7
(see finding 116) in our Measured Mile calculations.
119. Ryan booked a total of$2,381,385.48 on the Rose Bay project (app. wit.
book, tab 5). Removing mobilization/demobilization, consulting, legal, and other
disallowed costs, Ryan's actual dredging cost was $1,778,473.54 (id., tab 6). Adding
19.92% G&A ($354,272) and 10% profit ($213,275) to $1,778,473.54, Ryan
calculates its actual direct job cost for dredging work only to be $2,346,021 (app. br.,
app'x Bat 4, note 2). Ryan calculates its average dredging running cost per hour to be
$1,242.86 ($2,346,02111,887.6 hrs. 16) (id. at 3). At the hearing, the Corps sought to
reduce Ryan's per hour running rate (gov't wit. book, ex. G-2, tab 19; tr. 2/193-95).
The Corps' post-hearing brief argues "[t]he 'hourly pumping rate' should only include
costs directly related to the excavation operation" such as "labor, equipment and
gasoline." It concedes that "without better information the Government is unable to
calculate a different rate. (Gov't br. at 47) In calculating Ryan's DSC damages, we
will use $1,242.86 ($2,346,021/1,887.6 hrs.) as the dredge running cost per hour. 17
120. In 2010, Mr. Humphreys sent Ryan one invoice dated 26 October 2010 in the
amount of $3,348.46. This invoice was for (1) traveling to the Rose Bay job site on
27 September 2010 to discuss dredging progress and what was believed to be a differing
16 Ryan's actual pumping hours of 1,887.6 hours varies slightly with our pumping
hours of 1,887 (see finding 116). We accept 1,887.6 hours because the
variation is insignificant and the Corps used $1,242.86, calculated from using
1,887.6 pumping hours in its Measured Mile calculations (finding 119 n.12).
17
The Corps did not challenge Ryan's $1,242.86 dredge running rate per hour in
response to Ryan's Proof of Cost submission (see compl., ex. B, calculation A
at 2, calculation Bat 3). The Corps actually used the $1,242.86 rate in its own
calculations of what it believed was Ryan's entitlement (see answer at 36). The
Corps could have audited Ryan's costs but did not do so.
32
site condition; (2) drafting a recommended response to the ACO on what was believed to
be a differing site condition; and (3) traveling to the job site on 13-14 October 2010 to
view the materials in AS#3, AS#4, AS#5 and AS#6 and at the Disposal Area. (58755,
ex. 200, tab D-37 at 297-98)
121. In 2011, Mr. Humphreys sent Ryan five invoices totaling $22,749.19:
(1) 30 April 2011 invoice for $5,419.61 for discussing the DSC and reviewing daily
dredge reports; (2) 31August2011 invoice for $2,463.75 for preparing an REA;
(3) 30 September 2011 invoice for $7,298.06 for preparing the REA; (4) 30 November
2011 invoice for $1,998.77 for preparing the REA; and (5) 31 December 2011 invoice for
$5,569.00 for meeting with OSI to discuss the DSC (58755, ex. 200, tab D-37 at 299-308).
122. In 2012, Mr. Humphreys sent Ryan four invoices totaling $16,875.00:
(1) 31January2012 invoice for $4,725.00; (2) 30 April 2012 invoice for $7,256.25;
(3) 22 June 2012 invoice for $2,025.00; and (4) 20 July 2012 invoice for $2,868.75.
All four invoices were for continued preparation of the REA (58755, ex. 200, tab D-37
at 309-16).
123. As a part of its 31 July 2012 REA submitted to OSI, Ryan sought
$55,104.19 for outside consultant assistance and in preparing its REA (58755, ex. 200
tab D at 47). The REA included the 10 invoices Mr. Humphreys submitted to Ryan
through his firm Construction Consulting Associates, Inc., up through 20 July 2012, a
month prior to submission of Ryan's REA (id., tab D-37) to OSI. The REA provided
the breakdown for the costs requested:
Cost Elements Amount
Direct cost, outside consultant, 2010 $3,348.46
Home office overhead @2 20.52% (2010 rate) $687.10
Direct cost, outside consultant, 2011 $22,749.19
Home office overhead (ciJ, 16.24% (2011 rate) $3,694.47
Direct cost, outside consultant, 2012 (through 7/20/2012) $16,875.00
Home office overhead (ci), 16.24% (2011 rate) $2,740.50
Subtotal $50,094.72
Profit at 10% $5,009.47
Total amount requested $55,104.19
(58755, ex. 200, tab D at 47)
124. We find all of the invoices totaling $42,972.65 ($3,348.46 + $22,749.19 +
$16,875.00) were for Mr. Humphreys' consulting services and for preparing Ryan's
REA in connection with what we ultimately found to be a differing site condition. At
$135.00 per hour, we find Mr. Humphreys' fees, on the bases of his expertise (see
finding 74) and the comprehensive nature of the REA in the record (see 58755,
33
ex. 200) reasonable and allocable to the additional DSC costs Ryan incurred. One
month after Mr. Humphreys submitted his 20 July 2012 invoice to Ryan, OSI
submitted its REA to the Corps. As OSI's 30 August 2012 REA cover letter stated, it
sought an administrative resolution through a meeting, discussion and negotiation
(finding 3). We find what Ryan incurred was not in connection with the prosecution
of claims or appeals against the federal government. The Corps has not disputed the
professional and consultant service costs nor their associated overhead and the profit
claimed.
125. The Corps agrees that OSI is entitled to apply the following markups to
the amount found due:
Markup Elements Percentages
Field Office Overhead (FOOH) 22.40%
Home Office Overhead (HOOH) 20.40%
Profit 5.66%
Bond 1%
(App. wit. book, tab 26 at 301)
Time Extension and Liquidated Damages
126. Contract 0033 includes FAR 52.211-2, LIQUIDATED DAMAGES -
CONSTRUCTION (SEP 2000) which provides that the contractor shall pay the
government $1,329.37 in liquidated damages for each calendar day of delay until the
work is completed and accepted (R4, tab 505 at 455).
127. FAR 52.211-10, COMMENCEMENT, PROSECUTION, AND COMPLETION OF WORK
(APR 1984) required OSI to begin work within 30 calendar days and to complete the work
within 324 calendar days after receiving notice to proceed (NTP) 18 (R4, tab 505 at 455).
128. In our decision on the construction of the Disposal Area, we found that
"OSI acknowledged receipt of the NTP on 5 August 2009, thus establishing 25 June
2010 as the contract completion date." Optimum Services, Inc., ASBCA No. 57575,
13 BCA i! 35,412 at 173,716, i1 14. QAR Wilson's log of Tuesday, 11 May 2010
18
The 324-day contract performance period included (1) 30 calendar days for
mobilization and demobilization, (2) 116 calendar days for the base item,
(3) 130 calendar days for Option A, (4) 20 calendar days for Option B, and
(5) 28 calendar days for Option C. The "Base bid" refers to the "Disposal Area
Dike Construction & Other Disposal Area Related Tasks." Option A refers to
AS#l through AS#6; Option B refers to AS#7; and Option C to AS#8 and
AS#9. (R4, tab 505 at 455)
34
indicated that Ryan started dredging on Monday, 10 May 2010 (app. supp. R4, tab 54
at 5422). His log of 10 February 2011 indicated Ryan finished dredging AS#6 and
cleaned up AS#5 on Monday, 7 February 2011 (id. at 5588). The parties do not
dispute and we find that Ryan began dredging on 10 May 2010 and finished on 7
February 2011, a period of 272 calendar days.
129. OSI' s president, Daniel Eastman, testified that the Corps had withheld 225
calendar days of liquidated damages from his firm (tr. 2/52). At $1,329.37 per day, the
Corps had thus withheld $299,108.25 ($1,329.37 x 225) in liquidated damages. Since the
contract completion date was 25 June 2010, the Corps considered OSI/Ryan's delay to
Saturday, 5 February 2011 (25 June 2010 + 225 calendar days) inexcusable. At the
hearing, Mr. Eastman agreed to absorb all but 93 calendar days of liquidated damages or
132 calendar days (225 c.d. - 93 c.d.). 19 (Tr. 2/49-50)
130. While the Corps has withheld liquidated damages, it has not formally
assessed them (tr. 1/68-69). Nor has Ryan, through OSI, claimed the return of any
liquidated damages.
131. In contending that it is entitled to 93 days of time extension, Ryan did not
provide any schedule analysis. Ryan argues that since dredging was the only thing left
to do "other than maintaining the seeding and mulching at the disposal area," all
dredging work was critical (tr. 1/167, 2/51).
132. When Ryan bid the project, it estimated it could finish dredging Rose Bay in
six months or 179 calendar days working one shift a day (tr. 1/67). We find that based on
its original plan, Ryan expected to finish by, Saturday, 6 November 2010 (10 May 2010
+ 179 days). Ryan contends that due to the DSC, dredging took "a lot longer than
anticipated" (tr. 1/66). Its claim for 93 days of extension is based on the difference from
6 November 2010 to 7 February 2011. This simple analysis reached the same result as its
more elaborate calculations first advanced in its REA (58755, ex. 200, tab D-48), and
subsequently used in its post-hearing brief with minor revisions (app. br., app'x A at 5-6).
133. In its brief, Ryan first calculates the average dredge running time per
calendar day of 6.94 hours by dividing 1,887.49 hours of total dredge running time by
272 calendar days of dredging duration. It then deducted 16,916 c.y. of sand dredged as
what it should have expected and thus not claimed, from the 250,558 c.y. of total
materials dredged to arrive at 233,642 c.y. of expected silt material dredged. Based on its
estimated production rate of 222 c.y./hr. dredging silt, Ryan calculates it should have
taken 151.6 calendar days to dredge 233,642 c.y. of silt (233,642 c.y./222 c.y./hr. x 6.94
19
We denied OSI's DSC claim on the construction of the Disposal Area. Optimum,
13 BCA i! 35,412, ajf'd, Optimum Services, Inc. v. McHugh, 582 F. App'x 879
(Fed. Cir. 2014).
35
hrs./day). Ryan calculates that it should have taken an additional 27.4 calendar days to
dredge 16,916 c.y. of sand at a production rate of 89 c.y./hr. (16,916 c.y./89 c.y./hr. x
6.94 hrs./day). Adding 151.6 calendar days to dredge silt and 27.4 calendar days to
dredge sand, Ryan contends it should have taken 179 calendar days to finish Dredging
Rose Bay (151.6 c.d. + 27.4 c.d.). Since actual dredging took 272 calendar days-from
10 May 2010 to 7 February 2011-Ryan contends it is due a time extension of93
calendar days (272 c.d. - 179 c.d.). This calculation uses volumes of sand calculated for
the Factor Method. Ryan did not have a different calculation for the Measured Mile
Method. (App. hr., app'x A at 5-6)
134. The Corps acknowledged that Ryan is entitled to a time extension as a
result of the Board's entitlement decision. It calculated the time extension by dividing
the additional chargeable dredging time by the number of working hours per day
(assumed to be 24 hours per day) (DSC Pumping Time/EWT). 20 Using this formula,
which depends on its Measured Mile Method calculation, the Corps reached the result
that Ryan is entitled to a time extension of 25 days:
Impact of DSC (Pumping Time) 289 hrs.
Days= EWT 0.486 = 25 days
Working hours per day 24 hrs./day
(Gov't hr., app'x A at 9)
135. As explained at the hearing, Ryan performed preparatory work in order to
be able to pump or dredge every day. In order to compensate Ryan for this
preparatory work, a ratio referred to as the Effective Working Time (EWT) was
developed. (Tr. 2/150) Ryan used an EWT of 43 .2% (compl., ex. D); the Corps used
48.6%. Neither party has explained how its EWT was derived. Since the parties are
relatively close, we use 45% as the EWT for determining the time extension Ryan is
due on account of the differing site conditions encountered. Although skewed in its
own favor, we find the time extension formula the Corps proposed reasonable because
it takes into consideration: ( 1) the additional dredging time caused by the DSC in the
impacted Acceptance Sections used in the Measured Mile calculations; (2) an EWT
ratio in recognition of the prepartory work Ryan had to do to be able to dredge
everyday; and (3) Ryan's working hours per day.
20
Effective Working Time, which the Corps defines as the ratio of time specifically
spent pumping to the total dredging time chargeable to the cost of work (gov't
hr., appx. A at 3).
36
DECISION
In our entitlement decision, we concluded that OSI/Ryan has proven, by a
preponderance of the evidence, all of the elements of a Type I differing site condition,
and is entitled to an equitable adjustment of its contract price. We remanded the case
to the parties for determination of the quantum of adjustment and the extent of the
delay experienced by OSI/Ryan. Optimum, 15-1BCAii35,939 at 175,659. The
parties were unable to resolve their differences. Consequently, a hearing to address
quantum and project delay issues was held.
Ryan advances three alternate methods or theories of recovery: (1) the Factor
Method; (2) the Modified Total Cost Method; and (3) the Measured Mile Method
(finding 12). Ryan argues that the Factor Method would be the most appropriate way to
determine its DSC damages (finding 14). The Corps contends that calculating damages
using the Factor Method would not be "accurate or acceptable" because there is no way
to distinguish between the differing site condition-related and the non-differing site
condition-related sand and shells dredged (finding 28). The Corps maintains that "[t]he
best method of determining damages is to calculate the effect on productivity that was
caused by the differing site condition" by using the Measured Mile Method with certain
adjustments to the impacted areas (finding 27). Although not its first choice, Ryan does
not object to the Measured Mile Method but urges us to make certain adjustments to the
productivity of the un-impacted area -AS#7 (finding 32).
Ryan's Factor Method
Ryan's proposed Factor Method is based upon the "Material Factors" in
Dr. John B. Herbich's Handbook ofDredging Engineering. "Material Factors" were
developed for different sediment types. (Finding 15) For example, composite shell,
with a Material Factor of 0.5 would be twice as difficult and therefore more expensive to
dredge than loose sand with a Material Factor of 1; and sand with a Material Factor of
1 would be three times as difficult and therefore more expensive to dredge than silt and
mud with a Material Factor of 3. Using the Material Factors for sand and shell, Ryan
adjusts its bid unit price of $8.06 per c.y. based upon dredging mud and silt. To arrive at
the additional cost it claims it is entitled, Ryan multiplies the adjusted bid unit price for
sand and shell by the volumes of sand and shell it calculates it dredged. (Finding 16)
While the Factor Method has been used for pre-performance estimating
purposes, such as forward-pricing a change or estimating the cost of a project for bid
evaluation purposes (finding 20), the principal problem we have with the method is
that it does not take into account a contractor's execution of the work, from planning,
to using the right equipment, to having qualified personnel on the job. It is one thing if
the Corps ultimately fails to prove Ryan may itself be responsible for a part of the
costs it claims, the Factor Method makes no provision for any adjustments due to the
37
fault of the contractor. Indeed, Mr. Humphreys acknowledged that the inefficiencies
that were not the Corps' responsibility would not be a part of the Factor Method of
damage calculations. And, the principal reasons Ryan chose the Factor Method was
that it would "[get] rid of all [the Government's] argument ... about inefficiencies," and
"clean[] up all [of the Corps'] issues that have surfaced in this trial." (Finding 19)
In its post-hearing brief, Ryan argues that Holloway Construction Company and
Holloway Sand and Gravel Co., ENG BCA No. 4805, 89-2 BCA ~ 21,713, "discussed
quantum of recovery in a manner consistent with the Appellant's [Factor Method]
approach to calculating damages" (app. hr. at 5). The specific language in the decision
that Ryan relied upon stated:
We consider that the adjustment should be measured by the
difference in production costs and related reasonable
expenses in dredging the "hard clay" (or glacial till layer)
with substantial quantities of C&Bs [cobbles and boulders]
throughout and dredging that layer without, or, at most,
with nominal quantities of, C&Bs, as reasonably indicated
in the contract, excluding problems attributable to non-pay
dredging.
Holloway, 89-2 BCA ~ 21,713 at 109,191.
As Ryan's brief acknowledged: "The decision did not reach the issue of the
specific damages calculation methodology to use for purposes of calculating the
difference in productivity for the differing material" (app. br. at 6 n.2).
Ryan also relied on D. W Sandau Dredging, ENG BCA No. 5812, 96-1 BCA
~ 28,064, aff'd, 96-2 BCA ~ 28,300, where the Board held that a dredging contractor
that encountered sand instead of muck in a particular area was entitled to
compensation for a Category I differing site condition. In that case, the Board found
"As median grain size increases, dredge production decreases." (Id. at 140, 156)
While Ryan argues that "the general analysis of declining dredge production rates as
the grain size of the dredged material increases .. .is consistent with the Appellant's
approach here," Ryan nonetheless acknowledges that the decision "did not reach the
issue of the finite calculation of the quantum of damages" (app. br. at 6).
We do not read the Engineers Board's general instructions in these decisions as
mandating the use of the Factor Method or precluding the use of another method based
upon project records. 21 Due to the lack of precedent in using the Factor Method in a
21
Nor are that Board's decisions binding on this Board.
38
post-performance dispute scenario, we are not persuaded that the method is
appropriate in this case.
The Modified Total Cost Method
The Modified Total Cost Method was derived from the Total Cost Method
which the Court described as a method of "last resort" to be used in "extraordinary
circumstances where no other way to compute damages was feasible." Servidone
Constr. Corp. v. United States, 931 F .2d 860, 861-62 (Fed. Cir. 1991 ). The theory was
developed to "prevent the government from obtaining a windfall stemming from the
plaintiffs inability to satisfy all of the elements of the total cost method." Youngdale
& Sons Constr. Co. v. United States, 27 Fed. Cl. 516, 541 (1993). The Total Cost
method requires the contractor to prove: (i) the impracticability of proving actual
losses directly; (ii) the reasonableness of its bid; (iii) the reasonableness of its actual
costs; and (iv) the lack of responsibility for the added costs. Servidone, 931 F .2d at
861. To use the Modified Total Cost Method, we are to use the four elements
identified in Servidone as "the starting point" from which to adjust a contractor's
recovery to reflect its inability to prove any of the four elements. See Boyajian v.
United States, 423 F.2d 1231 (Ct. Cl. 1970); MacDougald Constr. Co. v. United
States, 122 Ct. Cl. 210 (1952). Because we can use the widely accepted Measured
Mile Method in this case, we need not resort to the Modified Total Cost Method.
The Measured Mile Method
The Measured Mile method compares the productivity achieved by a contractor in
an un-impacted area of work with the contractor's productivity on the same work in an
impacted area. Rather than basing damage calculation upon estimates and theoretical
adjustments as in the Factor Method, the Measured Mile Method has the advantage of
using actual data from the project to determine the cost difference between work
performed under normal conditions and work performed under changed conditions.
In contrast to the Factor Method, the Measured Mile Method had been accepted by
the courts and this Board as an appropriate method for calculating loss of productivity
costs. US. Industries, Inc. v. Blake Construction Co., 671F.2d539, 547 (D.C. Cir. 1982)
("comparison of the cost of performing work in different periods is a well-established
method of proving damages, which frequently has been used in breach of contract cases")
(citing Anvil Mining Co. v. Humble, 153 U.S. 540 (1894); Abbett Electrical Corp. v.
United States, 142 Ct. Cl. 609 (1958)); States Roofing Corporation, ASBCA No. 54860
et al., 10-1 BCA if 34,356 at 169,667 ("We have accepted the measured mile approach as
an appropriate method of determining impact to productivity."); Bay West, Inc., ASBCA
No. 54166, 07-1BCAif33,569 at 166,302-03 (Board accepted the measured mile
approach in determining damages for encountering stiff clay during dredging operations);
WG. Yates & Sons Construction Company, ASBCA Nos. 49398, 49399, 01-2 BCA
39
~ 31,428 at 155,210 ("[W]e accept Yates' use of[the Measured Mile] methodology as an
acceptable vehicle for determining incurred labor inefficiency costs due to the
Government's defective specification."); DANAC, Inc., ASBCA No. 33394, 97-2 BCA
~ 29,184 at 145,152, ajf'd on recon., 98-1BCA~29,454 (use of the "good period vs. bad
period" method of analysis in comparing the contractor's cost performing work during
periods affected and unaffected by government-caused disruption); International
Terminal Operating Company, ASBCA No. 18118, 75-2 BCA ~ 11,470 (ASBCA
adopted method of computing excess costs in a terminal services contract by comparing
the tons handled per direct labor hour during the period affected by the change with the
tons handled per direct labor hour during a period unaffected by the change).
Use of the Measured Mile Method, however, is not without some limitations.
As the D.C. Circuit observed in US. Industries, Inc.:
Unlike the delay claim, the disruption claim is
intended not to redress USI's loss from being unable to
work, but to compensate USI for the damages it suffered
from Blake's actions that made its work more difficult and
expensive than USI anticipated ....
671 F .2d at 546. Thus, the Measured Mile Method is intended to compensate Ryan for
encountering a consolidated material of a "sandy sandbar shelly bar nature" (see 15-1
BCA ~ 35,939 at 175,643, ~ 44), and patches of crust, newly formed oyster beds, and
dredged materials with heavy shell content, on the surface of the sea floor and on top of
the silt layer that scattered around eight of the nine Acceptance Sections (see 15-1 BCA
~ 35,939 at 175,647, ~ 69) which made Ryan's dredging work more.difficult and
expensive than anticipated. To the extent overcoming learning curve and equipment
failure resulted in downtime and delays, such delays are not compensated as a part of
productivity. Such delays and downtime can be redressed separately as time extensions.
As both parties recognized, separating differing site condition-related shells and
sand from non-differing site condition-related shells and sand with precision is
impossible (findings 14, 17, 28). In choosing the Measured Mile Method, we believe
we are within the well-established principle that the determination of equitable
adjustment is not an exact science; where responsibility for damage is clear it is not
essential that the damage amount be ascertainable with absolute or mathematical
precision. Electronic & Missile Facilities, Inc. v. United States, 416 F.2d 1345, 1358
(Ct. Cl. 1969); see also Wunderlich Contracting Co. v. United States, 351F.2d956,
968 (Ct. Cl. 1965) ("A claimant need not prove his damages with absolute certainty or
mathematical exactitude. It is sufficient if he furnishes the court with a reasonable
basis for computation, even though the result is only approximate.") (citations
omitted); Specialty Assembling & Packaging Co. v. United States, 355 F.2d 554, 572
40
(Ct. CL 1966) ("It is enough if the evidence adduced is sufficient to enable a court or
jury to make a fair and reasonable approximation.").
The Parties' Proposed Adjustments
The Corps argues that in using the Measured Mile Method, AS#8 and AS#9
must be excluded from determining the gross production rate achieved in the impacted
areas. It explained "[w]hile the production problems in AS-8 and AS-9 may have been
partially due to the DSC, the poor production was more strongly influenced by the
contractor's 'learning curve."' (Finding 29) By excluding the low production rates of
AS#8 and AS#9, the Corps seeks to increase the average production rate of the other
impacted areas which, in tum, would lower Ryan's recovery in an un-impacted versus
impacted productivity comparison.
Ryan, on the other hand, wants the Measured Mile calculations to be adjusted to
account for (1) encountering some shell and consolidated materials in AS#7; (2) the
re bars Ryan welded over the dredge's suction mouthpiece to minimize clogging of the
dredge pipeline when it began dredging AS#7; and (3) the few hours when Ryan
dredged into AS#l and AS#2 when it was dredging AS#7 (findings 23-24). In
adjusting AS#7's production rate downward due to the occurrence of these events,
Ryan seeks to increase its production rate absent these events which, in turn, would
increase its recovery in an un-impacted versus impacted productivity comparison.
The Corps ' Proposed Adjustments
In arguing for removing AS#8 and AS#9 from calculating the production rate of
the impacted areas, the Corps identified a number of incidents relating to (a) equipment
downtime as a result of ( 1) stopping dredging to install a GPS (findings 40-41 );
(2) stopping dredging during low tide at Rose Bay (findings 42-45); (3) overhauling its
dredge while dredging AS#9 (findings 53-63); (4) clogging of its dredge pipeline
(findings 64-70); and (5) stopping dredging during booster pump breakdown (findings
94-96).
The Corps also identified several events relating to Ryan "undergoing a significant
'learning curve'" (gov't br., app'x A at 5) in (1) failing to use the most efficient dredge
configuration when dredging AS#8 and AS#9 (findings 46-49); and (2) experimenting with
placing its booster pump at a proper distance from the dredge (findings 86-93).
In further support of its argument that AS#8 and AS#9 should be excluded from
calculating the production rate of the impacted areas, the Corps attached to its
post-hearing brief a 12-page list of events purporting to show that Ryan was responsible
for much of the low productivity achieved in the impacted areas (gov't br., app'x B).
41
Equipment Downtime Issues
We found installing its GPS on 10 and 11 May 2010 resulted in dredge downtime.
We found Ryan should have installed the GPS before it began dredging. (Findings 40,
41) We found Ryan could not dredge when Rose Bay was experiencing low tide cycles
resulting in dredging downtime (findings 42-43). Based on the information provided in
the contract (finding 44 ), we found Ryan should have anticipated encountering low tide
which would hamper its dredging efforts and installed the pontoons before it began
dredging (finding 45). We found that the most probable cause for the eight or nine-day
shut down from 25 June to 2 July 2010 to overhaul the dredge was that Ryan encountered
significant quantities of sand and shell from 19 to 22 June 2010 (findings 55, 62-63). Of
the two incidents of dredge pipe clogging incidents resulting in downtime, we found
Ryan could have avoided the clogging on 22 September 2010 had its leverman consulted
the pre-dredge survey (finding 68). We found the 13 October 2010 clogging incident was
caused by the high concentration of sand and shell materials encountered in AS#2
(findings 69-70). Ryan had to replace its booster pump on or about 6 August 2010
resulting in downtime (finding 94). We found from 2 to 6 August 2010, immediately
preceding the booster pump breakdown, Ryan had been dredging 25% sand and 25%
shell every day for an entire week. We found the most probable cause of the booster
pump breakdown and downtime experienced was the high content of sand and shell
encountered just before the breakdown. (Findings 94-96)
Because all of the occurrences above resulted in dredge downtime as opposed
to dredge running time used in the Measured Mile calculation, we will consider their
impacts as a part of the project delay analysis. We found working longer shifts and
double shifts should also be a part of the project's delay analysis (finding 52).
Learning Curve Issues
We found operating its dredge in a swing ladder configuration in AS#8 and
AS#9 was not due to Ryan's lack of proficiency but was dictated by the confined areas
in which it was dredging. We found that Ryan switched to operating its dredge in a
swing anchor configuration as soon as the areas in which it was dredging allowed it to
do so. We found switching from one dredge operating configuration to the other was a
part of Ryan's on-site learning process. (Finding 49) Given the DSC encountered in
AS#8 and AS#9, we cannot conclude that moving the booster pump back and forth to
address the crusts it was directed to dredge reflected a lack of proficiency on Ryan's
dredging operations. We found that moving the booster pump was a part of the
learning process Ryan went through to address the DSC it encountered as it dredged
further and further away from the Disposal Area. (Finding 93)
In its further attempt to support its argument that AS#8 and AS#9 should be
excluded from calculating the production rate of the impacted areas on the basis that
42
Ryan was "undergoing a significant 'learning curve"' (gov't br., app'x A at 5) and that
Ryan had "a huge learning curve due to the shallow bay and long pipeline" (finding 97),
the Corps attached a 12-page list of events purporting to show that Ryan was responsible
for much of the production issues. The Corps did not provide this list before or during
the hearing. As demonstrated in the Corps' downtime and learning curve arguments, the
context in which events occurred is important in assigning responsibility. Providing
cryptic excerpts without context requires us to make assumptions we are unwilling to
make. See States Roofing, 10-1BCAii34,356 at 169,667 (Board rejected the
government's citation to selected excerpts from the Daily Reports for failing to "come
forward with credible evidence providing either context for the comments it selected
from the Daily Reports or their significance.").
In United Technologies Corporation, ASBCA No. 25501, 86-3 BCA ii 19,171,
we refused to accept modified versions of spreadsheets the government submitted with
its post-hearing brief. We said the government "has not laid the necessary foundation
to enable us to reach a finding that the contents and results reflected in its spreadsheets
are what it claims." We also rejected the spreadsheets on the basis of due process
because receiving them without permitting appellant to test the validity of the evidence
"would be tantamount to receiving evidence ex parte." Id. at 96,923 (citing Wright v.
Southwest Bank, 554 F.2d 661, 663 (5th Cir. 1977)) (held "it is error to accept evidence
ex parte because it is inherently unfair to allow one party to put evidence before the
court without allowing his opponent the opportunity to test its validity"). Here, the
12-page list the Corps attached to its post-hearing brief was unauthenticated and Ryan
had no opportunity to test the validity of many of the allegations made in the list. 22
Ryan's Proposed Adjustments
Ryan urges us to consider three alternative adjustments to the production rate of
AS#7. Any one or more of the adjustments, if allowed, would increase the productivity
difference between AS#7, the un-impacted Acceptance Section and the impacted
Acceptance Sections, resulting in greater recovery under the Measured Mile Method.
Adjustment 1: Crust Areas in AS#7
Despite our conclusion in our entitlement decision that "[t]here was no differing
site condition in AS#7" (15-1 BCA ii 35,939 at 175,656), Ryan contends there were
"beds of consolidated sand and shell ('crust') areas" in AS#7 (compl., ex. B at 3,
calculation B). Ryan claim is based on what Mr. Humphreys testified he saw and
22
Some of the events covered by the 12-page list appear to be those QAR Wilson
testified to at his deposition. As to those events, Ryan had the opportunity to
address them at the hearing through its witnesses and we have considered and
weighed the evidence and made findings accordingly.
43
heard from another witness and his interpretation of the cross sections which he
acknowledged could be exaggerated as much as five times (finding 100).
We found there were not enough areas of consolidated sand and shell
("crusts"), if they existed at all, in AS#7 to have a meaningful adverse impact on
dredging to warrant a 10% adjustment to AS#7's production rate: OSI's daily QC
reports during the 24-day period in which AS#7 was dredged reported 0% sand and
0% shell were encountered (finding 101). We found Ryan never notified OSI or the
Corps that it encountered a DSC in AS#7. Moreover, the Geotechnical Report in the
specifications warned prospective contractors to "expect to dredge whole or broken
shells up to three inches in diameter." Thus, Ryan should have expected to encounter
some shells in dredging AS#7. (Finding 102)
Adjustment 2: Welding Re bars to the Dredge's Suction Mouthpiece
As a result of its experience dredging AS#8 and AS#9, Ryan welded rebars to the
original screen when it reached AS#7 "to try to cut down on some of the larger shells"
which were clogging up the pump (finding 105). Ryan proposed a 10% adjustment to the
average gross production per hour in AS#7 to account for the adverse impact to
production from welding rebars over the suction mouthpiece of the dredge (finding 103).
At the hearing, Mr. Buchanan, Ryan's vice president of operations in charge of all
operations at Rose Bay, testified "[t]he rebar screen that we put on there had no impact at
all on the flow, nothing" and did not restrict the flow of dredged materials (finding 107).
In support of the 10% adjustment, Mr. Humphreys relied on an equation used in
a thesis submitted by a Master of Science student at Texas A&M University. Using
the equation, Mr. Humphreys calculated a 12.61 % reduction in production on account
of the re bars. In comparing the screens shown in the thesis and the sketch of the re bars
Mr. Humphreys drew for his calculation, we found they looked totally dissimilar
(finding 106). Mr. Buchanan described the welded rebars as "something that sticks
out on the sides and goes around" which fits Mr. Humphrey's sketch (finding 107).
Weighing the evidence, we found Mr. Buchanan's testimony more credible. We found
the rebars Ryan welded to the dredge's suction mouthpiece made little, if any,
difference to warrant a 10% upward adjustment to Ryan's AS#7 production rate. (Id.)
Adjustment 3: Cross Border Dredging Time Adjustment
Because AS#7 shared common borders with AS# 1 and AS#2, Ryan dredged
slightly into AS# 1 and AS#2 when dredging AS#7. In its Measured Mile calculations,
Ryan sought to reduce the dredge running time in AS#7 by 4.6 hours for the time it was
dredging into AS#l and AS#2. This would increase the dredge running time in AS#7
which, in tum, would increase Ryan's recovery. We found cross border dredging
44
occurred in every Acceptance Section. (Finding 110) We reject Ryan's proposed
adjustment because it would treat the production rate of AS#7 differently when the same
cross border dredging also occurred in every Acceptance Section, contrary to the Measure
Mile Method of calculation in keeping the same conditions constant (finding 112). 23
Application of the Measured Mile Method
After dredging was completed in each Acceptance Section, the Corps had a
surveying company, ARC, survey the volume of the material dredged. The volume of
the materials dredged in each Acceptance Section is not in dispute. (Finding 113) The
pumping hours in each Acceptance Section is also not in dispute. Thus, by dividing
the volume dredged by the pumping hours logged, the production rate (in c.y. per
hour) of each Acceptance can be determined. (Finding 116)
As demonstrated by the production rates of the impacted Acceptance Sections,
they improved as dredging progressed: The production rate of AS#8, the first
Acceptance Section dredged, was 65.07 c.y. per hour. When Ryan dredged AS#9, the
second Acceptance Section dredged, its production rate improved to 100.52 c.y. per
hour. When Ryan dredged AS#l and AS#2, after it encountered no DSC in AS#7, its
production rates continued to improved but leveled off to some degree. (Finding 116)
We conclude that improvement in its production rate was the result of Ryan
overcoming its learning curve: We found Ryan switched from operating its dredge
from a swing ladder to a swing anchor configuration was a part of its on-site learning
process (finding 49). We found moving its booster pump was a part of the learning
process Ryan went through to address the differing site condition it encountered at
various locations in Rose Bay (finding 93). We found installation of the Gatling
improved Ryan's production rate as it learned to minimize clogging of its dredge
pipeline (finding 109).
Based upon what the Corps has shown, we are not persuaded that the
production rates of AS#8 and AS#9 should be excluded as "outliers" (see gov't br. at
42) from calculating the production rate of the impacted areas. We believe the better
approach would be to consider all of the impacted Acceptance Sections -AS#8, AS#9,
AS#l, AS#2, AS#3, AS#4, AS#5 and AS#6- as one impacted area. From the
production rates of all eight impacted Acceptance Sections, an average production rate
for the impacted area can be derived. (Finding 118) This average production rate
23
In the same vein, the Corps contends Ryan's use of a 12-inch dredge pipe was
inefficient. We found the same 12-inch pipe was used in dredging all
Acceptance Sections, and to the extent there was productivity loss, that would
affect all Acceptance Sections to the same degree. (Findings 71-73) Such
productivity loss would be included in calculating the production rates of all
Acceptance Sections in the Measured Mile calculations.
45
would have taken into consideration the learning and improvements Ryan experienced
throughout the dredging period.
Having rejected the adjustments each party proposed, we set out the mathematical
steps we will employ to determine Ryan's equitable adjustment using the Measured Mile
Method: (1) We calculate first the production rate in c.y. per hour Ryan achieved in
dredging the un-impacted AS#7; (2) Based upon the un-impacted production rate, we
calculate the number of hours Ryan would have required to dredge the eight impacted
Acceptance Sections had it not encountered the differing site condition in those
Acceptance Sections; (3) We then calculate the average production rate, in c.y. per hour,
Ryan actually took to dredge the eight impacted Acceptance Sections; (4) Calculating the
difference in hours between what Ryan took to dredge the eight impacted Acceptance
Sections and the hours it would have taken to dredge the same eight Acceptance Sections
had no differing site condition was encountered yields the additional hours Ryan is
entitled to as a result of dredging differing site condition materials in the eight impacted
Acceptance Sections; and (5) The equitable adjustment due Ryan is determined by
multiplying the additional hours Ryan was required to dredge the eight additional
Acceptance Sections by Ryan's average dredge running cost per hour.
Inserting numbers into the Measured Mile formula, we conclude that Ryan is entitled
to an equitable adjustment on account of the DSC encountered in the amount of $776,389.78:
Step 1: The total volume dredged in AS#7 was 39,548
c.y. (finding 113). The total dredge running time in
AS#7 was 199 .25 hours (finding 111 ). Therefore, the
production rate at the un-impacted AS#7 is 198.48 c.y.
(39,548 c.y./199.25 hrs.). 198.48 c.y.
Step 2: The total volume dredged in the eight impacted
Acceptance Sections was 211,009 c.y. (finding 118). If
all eight impacted Acceptance Sections were not
affected by the differing site condition, Ryan should
have been able to dredge the eight Acceptance Sections
in 1,063.12 hours (211,009 c.y./198.48 c.y./hr.). 1,063.12 hrs.
Step 3: The average production rate of the eight
impacted Acceptance Sections was 125.02 c.y./hr.
(211,009 c.y./1,687.76 hrs.) (finding 118). At this
average production rate, Ryan required 1,687.80 hrs.
(211,009 c.y./125.02 c.y./hr.) to finish dredging all
eight impacted Acceptance Sections. 1,687.80 hrs.
Step 4: It took Ryan 624.68 additional hours to dredge
the eight impacted Acceptance Sections
(1,687.80 hrs. - 1,063.12 hrs.). 624.68 hrs.
46
Step 5: Ryan's average dredge running cost was
$1,242.86 per hour (finding 119). At this cost, 624.68
additional dredging hours would cost Ryan an
additional $776,389.78 ($1,242.86 x 624.68 hrs.)
to dredge. $776,389.78
Professional and Consultant Services Costs
Ryan seeks $55,104.19 in professional and consultant services costs paid to
Construction Consulting Associates, Inc., for Mr. Humphreys' services (finding 123).
Under FAR 31.205-33, Professional and consultant service costs, 24 "Costs of
professional and consultant services are allowable subject to this paragraph and
paragraphs (c) through (f) of this subsection when reasonable in relation to the services
rendered and when not contingent upon recovery of the costs from the Government (but
see 31.205-30 and 31.205.47)." FAR 31.205-47, Costs related to legal and other
proceedings, provides at subsection (f)(l) that "Costs ... are unallowable if incurred in
connection with": "prosecution of claims or appeals against the Federal Government."
Interpreting an earlier version of FAR 31.205-33 (1987) with similar language,
the Federal Circuit said in Bill Strong Enterprises, Inc. v. Shannon, 49 F .3d 1541, 15 50
(Fed. Cir. 1995), overruled on other grounds by Rejlectone, Inc. v. Dalton, 60 F.3d
1572, 1579, n.10 (en bane) that "[i]n classifying a particular cost as either a contract
administration cost or a cost incidental to the prosecution of a claim, contracting
officers, the Board, and courts should examine the objective reason why the contractor
incurred the cost." The Court went on to say:
If a contractor incurred the cost for the genuine purpose of
materially furthering the negotiation process, such cost
should normally be a contract administration cost
allowable under FAR 31.205-33, even if negotiation
eventually fails and a CDA claim is submitted. See
Armada, 84-3 BCA ~ 17,694 at 88,242-43. On the other
hand, if a contractor's underlying purpose for incurring a
cost is to promote the prosecution of a CDA claim against
the Government, then such cost is unallowable under
FAR 31.205-33.
See also Advanced Engineering & Planning Corporation, ASBCA Nos. 53366,
54044, 03-1BCA~32,157, aff'd, Johnson v. Advanced Engineering & Planning
Corp., 292 F. Supp. 2d 846 (E.D. Va. 2003) (cost to prepare REA were incurred for
24
The Corps awarded Contract 0033 in June 2009. Optimum, 13 BCA ~ 35,412
at 173, 714. The FAR as of 1 July 2008 is therefore applicable.
47
the purpose of accomplishing a comprehensive resolution of the entire job order held
allowable under FAR 31.205-33 as professional and consultant services costs).
We found the 10 invoices totaling $42,972.65 Mr. Humphreys submitted to Ryan
were for consulting services and for preparing Ryan's REA in connection with what we
ultimately found to be a differing site condition. At $135.00 an hour, we found
Mr. Humphreys' rate, on the basis of his expertise (see finding 74) and the
comprehensive and well documented REA (58755, ex. 200) he prepared reasonable and
allocable to the additional differing site condition costs Ryan incurred. We found the
consultant costs incurred was for the purpose of seeking an administrative resolution
through a meeting, discussion and negotiation and not for the purpose of prosecuting a
claim or appeal against the Corps. The Corps has not disputed the professional and
consultant services costs nor the associated overhead and profit claimed. (Finding 124)
Accordingly, we conclude Ryan is entitled to the $55,104.19 claimed.
Time Extension
When Ryan bid the project, it estimated it could finish dredging Rose Bay in
about six months or 179 calendar days. We found that having started work late
because of OSI's delay, Ryan expected to finish by 6 November 2010. (Finding 132)
Having begun dredging on 10 May 2010, Ryan finished on 7 February 2011, 93
calendar days later than expected (findings 26, 128). In seeking a 93-calendar day
extension, Ryan did not provide any delay or schedule analysis except to say that since
dredging was the only work left to do "other than maintaining the seeding and
mulching at the disposal area," all dredging work was critical (finding 131).
On a calendar-day basis, Ryan originally planned to work 1 shift of 10 hours a day,
5 days a week, and 8 hours on Saturday. When it began to fall behind, it increased its shift
to 131/z hours a day. Then, on 12 July 2010, after it overhauled its dredge, Ryan went to
"round the clock operations 6 days a week" or two 12-hour shifts a day. (Finding 35)
We found Ryan's self-imposed acceleration absorbed some of the equipment
downtime (due to installation of the GPS (finding 41); low tide (finding 45); and
dredge pipeline clogging (finding 68)) due to its fault and reduced the overall dredging
time. Had Ryan not accelerated on its own, the delay in contract completion would
have extended beyond 7 February 2011.
Although skewed in its own favor, the Corps proposes a reasonable formula for
computing the time extension. The Corps' formula takes into consideration (1) the
additional dredging time caused by the DSC in the impacted Acceptance Sections used in
the Measured Mile calculation; (2) of an EWT ratio in recognition of the preparatory
work Ryan had to do to be able to dredge every day; and (3) Ryan's working hours per
day. (Findings 134-35)
48
We make the following adjustments to the numbers the Corps used: The Corps'
assumption that Ryan worked 24 hours a day for the entire dredging period overstates the
hours actually Ryan worked. Ryan worked 1 shift per day for 10 to 13 Yi hours from
10 May to 11 July 2010, or 62 out of the 272 calendar day dredging period. Ryan worked
two 12-hour shifts a day from 12 July 2010 to 7 February 2011, or 210 out of the 272
calendar day dredging period. For the first 62 days, Ryan worked an average of 11.75
((10 hours+ 13.50 hours)/2) hours a day. For the last 210 days, Ryan worked 24 hours a
day. Thus, Ryan worked an average of 21.21 hours (( 11. 75 hours x 62 days + 24 hours x
210 days)/272 days) a day over the course of 272 calendar days. The parties have not
disputed that application of an EWT ratio is appropriate for computing dredging duration.
Ryan used a ratio of 43.2% (compl., ex. D); the Corps used 48.6% (finding 134). Neither
party has explained how its EWT ratio was derived. Since the parties are relatively close,
we use 45% as the EWT ratio (finding 135).
Based upon the formula the Corps proposed, and based upon (1) 624.68 hours
of additional dredging hours on account of the differing site condition; (2) an EWT
ratio of 45%; and (3) an average of 21.21 hours of work per day over the 272 calendar
days when dredging took place, we calculate that Ryan is entitled to a time extension
of 65.45, say 66 calendar days:
Impact of DSC (Pumping Time) 624.68 hrs.
Days= EWT 0.45 = 65.45 days
Working hours per day 21.21 hrs./day
Liquidated Damages
The Corps has withheld 225 calendar days of liquidated damages totaling
$299,108.25 ($1,329.37 x 225 days). OSI has agreed to absorb all but 93 calendar
days of liquidated damages or for 132 calendar days (225 c.d. - 93 c.d.). (Finding
129) Thus, at $1,329.37 per day, OSI has agreed that the Corps is entitled to withhold
$175,476.84 ($1,329.37 x 132 c.d.) for its part delaying completion of the project.
Of the 93 calendar days of delay Ryan claims, we have found it is entitled to a time
extension of 66 calendar days. This means 27 of the 93 calendar days (93 c.d. - 66 c.d.)
were not excusable delay days. Had Ryan chosen not to accelerate on its own volition and
worked double shifts beginning on 12 July 2010, it would not have finished dredging Rose
Bay by 7 February 2011. By accelerating, Ryan made up some of the delays caused by
the differing site condition as well as some of the downtime for which it was responsible.
49
We summarize OSI's recovery in this appeal in the table below:
Additional dredging cost $776,389.78
Outside consultant cost $55, 104.19
Subtotal $831,493.97
OSI Field Office Overhead~ 22.40% (finding 125) $186,254.65
OSI Home Office Overhead~ 20.40% (finding 125) $169,624.77
Subtotal $1,187,373.39
Profit (a), 5.66% (finding 125) $67,205.33
Subtotal $1,254,578.72
Bond (ii), 1% (finding 125) $12,545.79
Total Recovery $1,267,124.51
Other than withholding $299,108.25 (225 days) ofliquidated damages, the
Corps had not formally assessed any liquidated damages. While OSI, on behalf of
Ryan, claimed 93 days of time extension, no claim was submitted for return of
liquidated damages. Thus, the remission of liquidated damages is not before us.
Nevertheless, in light of our decision that Ryan is entitled to an extension of 66 out of
the 93 calendar days claimed, we leave it to the parties to compute and remit the
proper amount of liquidated damages.
CONCLUSION
Because Ryan encountered a differing site condition dredging eight of the nine
Acceptance Sections at Rose Bay, because we considered the Measured Mile Method
the most appropriate approach in determining the equitable adjustment to which Ryan
is entitled, OSI is entitled to recover $1,267,124.51. Interest pursuant to 41 U.S.C.
§ 7109 on this amount is to run from 24 December 2012, the putative date on which
the CO should have received OSI' s certified claim, until paid. In addition, OSI/Ryan
is entitled to a time extension of 66 calendar days.
Dated: 6 September 2016
...
...
PETER D. TING
Administrative Judge
Armed Services Board
of Contract Appeals
(Signatures continued)
50
I concur I concur
7 MARK N. STEMPLER /
Administrative Judge
~ RI~CKLEFORD
Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 59952, Appeal of
Optimum Services, Inc., rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
51
| {
"pile_set_name": "FreeLaw"
} |
375 S.C. 535 (2007)
654 S.E.2d 538
In the Matter of William Glenn ROGERS, Jr., Respondent.
No. 26403.
Supreme Court of South Carolina.
Submitted November 6, 2007.
Decided December 10, 2007.
*536 Lesley M. Coggiola, Disciplinary Counsel, and Joseph P. Turner, Jr., Assistant Disciplinary Counsel, both of Columbia, for Office of Disciplinary Counsel.
Douglas J. Robinson, of Camden, for Respondent.
PER CURIAM:
In this attorney disciplinary matter, respondent and the Office of Disciplinary Counsel have entered into an Agreement for Discipline by Consent pursuant to Rule 21, RLDE, Rule 413, SCACR. In the Agreement, respondent admits misconduct and consents to the imposition of a range of sanctions from a confidential admonition to a sixty day suspension pursuant to Rule 7(b), RLDE, Rule 413, SCACR. Respondent requests any suspension be made retroactive to the date *537 of his interim suspension.[1] We accept the agreement and suspend respondent from the practice of law in this state for sixty days, retroactive to the date of his interim suspension.
FACTS
Respondent, who was a public defender at the time, failed to appear for a case and another public defender picked the jury on his behalf. Respondent appeared for trial the following day, but asked for a continuance on the grounds that he had been ill and was unprepared. While respondent maintains he informed the solicitor he was ill, he failed to notify his client of the trial in the belief the case would be continued. The trial judge found respondent in contempt and ordered respondent to pay the cost of the jury and write a written apology to the jurors. Respondent fully complied with the order. Respondent contends he did not notify the Office of Disciplinary Counsel of the finding of contempt because the sanctioning judge found respondent's conduct did not amount to an ethical violation, a contention the Office of Disciplinary Counsel states it has no reason to doubt since the matter was not reported by the sanctioning judge.
In this matter and three other matters, respondent failed to respond to the Office of Disciplinary Counsel's initial inquiries, Treacy letters,[2] and notices of full investigation. Respondent maintains he failed to respond to the Office of Disciplinary Counsel because he was suffering from depression. Respondent, who has been diagnosed as suffering from depression, has sought help from Lawyers Helping Lawyers, has signed a monitoring agreement with them and has been seeing a psychiatrist recommended by them as well. In addition, respondent has since met with the Office of Disciplinary Counsel and provided information regarding the complaints against him, including the three additional complaints, which the Office of Disciplinary Counsel states it would have recommended dismissing if it had received the requested information from respondent. Finally, respondent has fully cooperated with the *538 Office of Disciplinary Counsel since being placed on interim suspension.
Law
Respondent admits that by his conduct he has violated the following provisions of the Rules of Professional Conduct, Rule 407, SCACR: Rule 1.1 (a lawyer shall provide competent representation to a client); Rule 1.3 (a lawyer shall act with reasonable diligence and promptness in representing a client); Rule 1.4 (a lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation, keep the client reasonably informed about the status of the matter, and promptly comply with reasonable requests for information); and Rule 8.1(b) (a lawyer in connection with a disciplinary matter shall not knowingly fail to respond to a lawful demand for information from a disciplinary authority).
Respondent also admits that he has violated the following provisions of the Rules for Lawyer Disciplinary Enforcement, Rule 413, SCACR: Rule 7(a)(1) (it shall be a ground for discipline for a lawyer to violate the Rules of Professional Conduct); Rule 7(a)(3) (it shall be a ground for discipline for a lawyer to fail to respond to a lawful demand from a disciplinary authority including a request for a response); and Rule 7(a)(6) (it shall be a ground for discipline for a lawyer to violate the oath of office taken upon admission to practice law in this state).
Conclusion
We find a sixty day suspension is the appropriate sanction for respondent's misconduct. Accordingly, we accept the Agreement for Discipline by Consent and suspend respondent from the practice of law for sixty days, retroactive to the date of his interim suspension. Within fifteen days of the date of this opinion, respondent shall file an affidavit with the Clerk of Court showing that he has complied with Rule 30, RLDE, Rule 413, SCACR.
DEFINITE SUSPENSION.
TOAL, C.J., MOORE, WALLER, PLEICONES and BEATTY, JJ., concur.
NOTES
[1] Respondent was placed on interim suspension by order of this Court dated August 17, 2007. In the Matter of Rogers, 375 S.C. 58, 650 S.E.2d 463 (2007).
[2] In the Matter of Treacy, 277 S.C. 514, 290 S.E.2d 240 (1982).
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147 Conn. 267 (1960)
CLARENCE D. FARNHAM, JR.
v.
CHARLES LABUTIS ET AL.
Supreme Court of Connecticut.
Argued January 5, 1960.
Decided April 5, 1960.
BALDWIN, C. J., KING, MURPHY, MELLITZ and SHEA, JS.
*268 Edward S. Pomeranz and Donald P. Chernoff, for the appellants (defendants).
Marshall S. Feingold, with whom, on the brief,. were Charles Alfano and William J. Bumster, Jr., for the appellee (plaintiff).
SHEA, J.
The Superior Court dismissed the defendants' appeal from a finding and award of the workmen's compensation commissioner in favor of the plaintiff, and the defendants have appealed to this court. The question presented is whether the plaintiff's injury arose out of and in the course of his employment.
The finding, as corrected by the Superior Court and with such further corrections as are warranted, may be summarized as follows: For some time prior to February 21, 1958, the date of the plaintiff's injuries, his employer, the named defendant, had been accustomed to repair equipment at a gasoline service station in Scitico. Kertanis Brothers also repaired equipment at the station. The employees of these two employers became friendly, exchanged labor and tools on their jobs when it was necessary, and mutually assisted one another in work about the station. The plaintiff owned a paint spraying machine which had never been used. He brought the machine to the service station to paint one of his employer's trucks. When the owner of the station objected, it was decided to paint the truck by hand. The plaintiff, however, left his paint sprayer at the station. Later, on February 20, 1958, Kertanis Brothers were about to paint one of their trucks and received permission from the plaintiff's brother to use the plaintiff's sprayer. After working hours, the plaintiff went to *269 the station to look over the paint job which was being done. He tried his spraying machine, using a one-quart can of paint, and was not satisfied. He then suggested using a three-gallon can hooked up with compressed air. Nothing was done at that time to connect up the equipment. On the following day, the plaintiff, working for his employer outside the service station, was sent inside to get a tool. He knew that the work of his employer would remain at a standstill until the tool was procured. When the plaintiff entered the station, he came upon the paint spraying equipment and observed that the three-gallon can was not being used. He looked over the can and started to make some adjustment on the pressure gauge at the top. He plugged in the compressed air hose. The pressure was too great for the can and it blew up in his face, causing him serious injuries. His employer did not know that the plaintiff was trying to assist the Kertanis men in their use of his personal equipment in painting their truck. The commissioner concluded that the plaintiff's injury arose out of and in the course of his employment.
An injury arises in the course of the employment when it takes place (a) within the period of the employment, (b) at a place where the employee may reasonably be, and (c) while he is reasonably fulfilling the duties of the employment or doing something incidental to it. An injury is said to arise out of the employment when it (a) occurs in the course of the employment and (b) is the result of a risk involved in the employment or incident to it or to the conditions under which it is required to be performed. Ryerson v. A. E. Bounty Co., 107 Conn. 370, 372, 373, 140 A. 728; Iliff v. Norwalk Tire & Rubber Co., 127 Conn. 248, 249, 16 A.2d 481.
*270 An injury which occurs in the course of the employment will ordinarily arise out of the employment, but not necessarily so; the injury may arise out of an act or omission for the exclusive benefit of the employee or someone other than the employer while the employee is engaged in the course of his employment. If the injured party was engaged in doing an act which had no direct or incidental relation to his employment, the injury resulting from it is not compensable. Vitas v. Grace Hospital Society, 107 Conn. 512, 516, 141 A. 649. In ascertaining the scope of the employment, we consider what duties were required of the employee and the conditions surrounding the performance of his work, together with whatever else he actually did with the knowledge and assent of the employer. Even though the activity of an employee is outside the obligations of his employment, an injury connected with the activity is compensable if the activity was permitted by the employer for the mutual benefit and convenience of both the employee and the employer. Mann v. Glastonbury Knitting Co., 90 Conn. 116, 120, 96 A. 368. Whatever has been customarily done in the execution of a contract of employment by the parties to it may be regarded as having been adopted by them as one of its terms. Saba v. Pioneer Contracting Co., 103 Conn. 559, 563, 131 A. 394; Merlino v. Connecticut Quarries Co., 93 Conn. 57, 59, 104 A. 396; Mann v. Glastonbury Knitting Co., supra, 122. Knowledge of, and acquiescence in, a continuing practice may make it an incident of the employment, particularly where it is beneficial to the employer in furtherance of the employment. Taylor v. M. A. Gammino Construction Co., 127 Conn. 528, 531, 18 A.2d 400; McCormick v. Southern New England Ice Co., 118 Conn. 295, 298, 171 A. *271 838; Stakonis v. United Advertising Corporation, 110 Conn. 384, 388, 148 A. 334; Guiliano v. Daniel O'Connell's Sons, 105 Conn. 695, 702, 136 A. 677.
To reach the conclusion he did, the commissioner must have found that the act which the plaintiff was performing at the time of his injuries was incidental to the employment. This conclusion does not find support in the subordinate facts, for it does not appear that the cause of injury was a risk annexed as an incident to the employment by the conduct of the parties. The employer must have shown his acquiescence by permitting such a course of activity without objection after apparent full knowledge of it. Katz v. Katz, 137 Conn. 134, 138, 75 A.2d 57; Puffin v. General Electric Co., 132 Conn. 279, 282, 43 A.2d 746; Drouin v. Chelsea Silk Co., 122 Conn. 129, 134, 187 A. 904. While it appears that the employees of the named defendant and Kertanis Brothers had rendered mutual assistance to each other in work about the service station, the character and extent of their acts of assistance, however great or small they may have been, have not been shown, and there is nothing to indicate that the plaintiff's employer had any knowledge of them; nor is there anything to indicate how long the practice had been followed or that it was so frequent as to have charged him with knowledge of it. The finding is silent as to whether the assistance, when rendered, was of mutual benefit or advantage to the employer and the employee or whether it became incidental to the employment or a term or a condition attached to it by the express or implied consent of the employer. From the facts in the finding, it is impossible to draw inferences on these points as a matter of law. Vitas v. Grace Hospital Society, 107 Conn. 512, 517, 141 A. 649.
*272 It follows that the conclusions reached by the commissioner are not supported by the subordinate facts which now appear in the finding and award. Facts sufficient for the rendition of a proper judgment have not been found. This omission may be the result of mistake or oversight on the part of the commissioner. Or it may be the result of a lack of testimony which can be remedied if the plaintiff is granted a further hearing. Under the circumstances, the case should be returned to the commissioner for further proceedings. Glodenis v. American Brass Co., 118 Conn. 29, 36, 170 A. 146; Callahan v. William Schollhorn Co., 106 Conn. 211, 215, 137 A. 642; Cormican v. McMahon, 102 Conn. 234, 238, 128 A. 709.
There is error, the judgment is set aside and the case is remanded to the Superior Court with direction to sustain the appeal and return the case to the commissioner for further action in accordance with this opinion.
In this opinion the other judges concurred.
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146 B.R. 570 (1992)
In re Burt G. POHRMAN, Debtor.
Bankruptcy No. 691-63643-R7.
United States Bankruptcy Court, D. Oregon.
October 16, 1992.
William D. Koontz, Cottage Grove, Or., for Debtor.
Ronald A. Walro, Eugene, Or., for Viking Ins. Co.
Ronald R. Sticka, Eugene, Or., Trustee.
MEMORANDUM OPINION
ALBERT E. RADCLIFFE, Bankruptcy Judge.
This matter comes before the court upon the objection of Viking Insurance Company *571 to the debtor's claim of exemption in the proceeds of a personal injury insurance settlement.
BACKGROUND
A review of the court's file in this matter, including the pleadings, the parties' memoranda and the evidence adduced at the hearing held April 7, 1992 reveals the following undisputed facts.
On February 4, 1990, the debtor was seriously injured in an automobile accident. The responsible party in the accident was Michael Schilling who had an automobile insurance policy with Viking Insurance Company ("Viking"). The policy provided for $25,000.00 of liability coverage including $10,000.00 in personal injury protection (PIP). The debtor was treated for the injuries he sustained at Sacred Heart General Hospital ("the hospital").
Pursuant to O.R.S. 87.555(1), the hospital filed three liens on February 20, 1990, April 3, 1990 and May 4, 1990 for the medical services rendered to debtor on the proceeds of the insurance policy in amounts totalling $19,159.32 (collectively the lien). Under the PIP provisions of Schilling's insurance policy, Viking paid the hospital $10,000.00 in partial satisfaction of the medical services claims.
Viking and the debtor subsequently settled the personal injury claim against Mr. Schilling for the balance of the policy, $15,000. The debtor executed a release of Viking and Mr. Schilling from further liability because of the automobile accident. The debtor and his attorney (William Koontz) also executed a "Hold Harmless Agreement" with Viking which provided as follows:
I, Burt G. Pohrman (hereinafter Pohrman) and William P. Koontz, attorney for Pohrman (hereinafter Attorney) hereby agree to hold harmless Viking Insurance Company and its insured, Michael Shelling [sic], from the claims of any and all lienholders against the proceeds of the policy held by Michael Shelling [sic] with Viking Insurance Company.
In return, Viking Insurance Company will disburse the proceeds of said policy, less PIP to Pohrman and attorney Koontz. Said proceeds of the policy are compensation to Pohrman for personal bodily injury suffered by Pohrman in an automobile accident on February 4, 1990. Said proceeds are also compensation for Pohrman's loss of future earning capacity, in light of Pohrman's limited education and the fact that he will be permanently physically impaired.
When the debtor did not pay the hospital, the hospital sued Viking for payment pursuant to O.R.S. 87.580[1]. Viking settled this suit by payment to the hospital in the sum of $6,204.07 plus filing and service fees of $138. Viking received from the hospital an assignment of its liens on the insurance proceeds. Viking then filed a third-party complaint against the debtor to foreclose the liens.
On August 12, 1991 the debtor filed his chapter 7 petition herein, which stayed the third-party foreclosure proceeding. Debtor claims the insurance proceeds exempt under O.R.S. 23.160(j)(1)(B) and (C)[2]. Viking *572 has timely objected to the claim of exemption.
A hearing was held on Viking's objection to the debtor's claim of exemption on April 7, 1992, at which the parties agreed as follows: 1) Absent any application or impact of the lien, the debtor may claim the insurance proceeds exempt; 2) the debt owing to the hospital for medical services is valid and reasonable, and 3) the lien was properly perfected as required by Oregon law.
The Court took the matter under advisement and provided for a post-hearing briefing schedule. The briefs have now all been submitted and the matter is ripe for decision.
ISSUE
The sole issue for this Court to determine is the relative priority of the medical services lien under O.R.S. Chapter 87 vis-a-vis the debtor's personal injury exemption claim pursuant to O.R.S. 23.160(j)(1)(B) and (C).
DISCUSSION
All statutory references are to the Bankruptcy Code, Title 11 U.S.C. unless otherwise indicated.
Debtor argues that the lien may be avoided pursuant to the bankruptcy code. In the alternative, if the lien may not be avoided, the debtor urges that under Oregon State law, the exemption takes priority over the hospital's lien.
Lien Avoidance
Exempt property is not protected from the enforcement of valid liens. Here, the parties have stipulated that the hospital's lien is valid and was properly perfected and that but for the possible impact of the lien, the insurance proceeds which the debtor received would have been exempt under O.R.S. 23.160.
Section 522(c) provides in pertinent part:
(c) Unless the case is dismissed, property exempted under this section is not liable during or after the case for any debt of the debtor that arose, or that is determined under section 502 of this title as if such debt had arisen, before the commencement of the case, except . . .
(2) a debt secured by a lien that is
(A)(i) not avoided under subsection (f) or (g) of this section or under section 544, 545, 547, 548, 549, or 724(a) of this title; and
(ii) not void under section 506(d) of this title; or . . .
The debtor asserts that the lien may be avoided because it impairs his exemption. Section 522(f) provides in part as follows:
(f) Notwithstanding any waiver of exemptions, the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is
(1) a judicial lien; or
(2) a nonpossessory, nonpurchase-money security interest in any. . . .
A "lien" is defined by the Code as a "charge against or interest in property to secure payment of a debt or performance of an obligation." § 101(37). "Statutory" and "judicial" liens are defined, respectively, as follows:
§ 101(53) "statutory lien" means lien arising solely by force of a statute on specified circumstances or conditions, or lien of distress for rent, whether or not statutory, but does not include security interest or judicial lien, whether or not such interest or lien is provided by or is dependent on a statute and whether or not such interest or lien is made fully effective by statute;
§ 101(36) "judicial lien" means lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding;
*573 A "security interest" means lien created by an agreement. § 101(51).
The hospital's lien arises solely by force of a statute, O.R.S. 87.555 et seq., which grants a hospital a lien on the funds a person receives for injuries suffered in an accident and for which the hospital rendered care, without need of further process. There is no need to resort to "judgment, levy, sequestration, or other legal or equitable process", nor is there any security agreement.
Thus, it is clear that the hospital's lien is a statutory lien; it is neither a judicial lien nor a "non-possessory, non-purchase money security interest . . .". The debtor may not avoid the hospital's lien by utilizing § 522(f).
§ 522(h) provides in pertinent part:
The debtor may avoid a transfer of property of the debtor . . . to the extent that the debtor could have exempted such property under § (g)(1) of this section . . . if (1) such transfer is avoidable by the trustee under § . . . 545 . . . of this title . . . and (2) the trustee does not attempt to avoid such transfer.
§ 545 allows the debtor to avoid certain statutory liens to the extent that the liens impair an exemption and the trustee does not seek to set aside the liens, i.e. the debtor may use his avoiding powers under § 522(h). In this case, however, § 545 has no application.[3]
The debtor may not avoid the hospital's lien by resort to the code.
State law priority
In the alternative, the debtor argues, that under Oregon law, the exemption provided for in O.R.S. 23.160 enjoys priority over the hospital's lien provided for in O.R.S. 87.555 et seq.
These two statutory provisions present two apparently conflicting legislative policies. One is that of providing some assurance to medical care-providers that if an injured party receives compensation for the injuries he suffers in an accident the funds thus received will be first used to reimburse the caregivers. The second is that the payments a debtor receives because of personal bodily injury (up to $7,500) and in compensation of loss of future earnings will not be subject to the claims of creditors.
There are three specific statutory exceptions to the coverage of the hospital lien.[4] The statute provides: . . . "no such lien shall be valid against anyone coming under the Worker's Compensation Act." O.R.S. 87.555(1). In addition, no lien is provided for medical services rendered after a settlement of the debtor's personal injury claim and no lien is allowed against any sum for necessary attorney fees, costs and expenses incurred by the injured party in securing a settlement, compromise or judgment. O.R.S. 87.560.
Here, the Court must look to the law of the State of Oregon for guidance. The parties have not provided the Court with guidance as to what the legislature intended nor any authority from Oregon courts which would resolve this matter. Absent any such guidance, this Court must attempt to give full meaning to both statutes without doing violence to either.
The debtor argues that since the Oregon Legislature provided for three exceptions to the lien law, recited above, that the legislature must have intended that the exemptions be given priority due to the *574 phrase "except as provided by law" appearing at the beginning of the statute (O.R.S. 87.555(1)).
This Court, however, is persuaded to the contrary, namely, that since the Oregon Legislature did provide for three exceptions to the lien law, it certainly could have provided for an exception for the personal injury exemption contained in O.R.S. 23.160(j)(1)(B) and/or (C), had it so desired. Under the normal rules of statutory construction, the failure to provide for such an exception would lead this Court to conclude that the legislature did not intend that the exemption provided for in O.R.S. 23.160 take priority over the hospital lien.
This result is true in spite of the debtor's appeal to the "equities" of this matter. The obvious purpose of the hospital lien law is to give medical care providers a source of compensation for their services from the proceeds of a personal injury settlement. If the debtor's interpretation were to prevail, the hospital lien law would be almost completely useless since, in most cases, a personal injury settlement can be claimed as exempt under O.R.S. 23.160(j)(1)(B) and (C) for bodily injury and loss of future earnings. In short, there would be very few instances when there would be any proceeds for the hospital lien to attach to.
It is noteworthy that most of the other bankruptcy courts to have considered similar hospital liens reach the same result that this Court reaches herein, following the same reasoning. See In re Thorogood, 22 B.R. 725 (Bankr.E.D.N.Y.1982); In re Howard, 43 B.R. 135 (Bankr.Md.1983); In re Jannsen, 42 B.R. 294 (Bankr.E.D.Va.1984); and In re Smith, 119 B.R. 714 (Bankr.N.D. 1990).[5]
CONCLUSION
Due to the foregoing, Viking's objection to the debtor's claim of exemption in the insurance proceeds should be sustained to the extent that Viking's claim to the proceeds has priority under the hospital liens assigned to it by the hospital. An order consistent herewith shall be entered.
NOTES
[1] O.R.S. 87.580 provides: "Any person or insurer who, after the receipt of a certified copy of notice of lien in compliance with O.R.S. 87.565, shall make any payment to the injured person, the heirs, personal representatives of the injured person or the attorney for any of them, as compensation for the injury suffered, without paying the hospital or physician the reasonable value of hospitalization and treatment rendered such injured person and claimed in its notice of lien or so much thereof as can be satisfied out of the moneys due under any judgment, settlement or compromise, after paying the attorney fees, costs and expenses incurred in connection therewith and any prior liens, shall, for a period of 180 days after the date of such payment, be liable to the hospital or physician for the amount which the hospital or physician was entitled to receive. The hospital or physician shall, within such period, have a cause of action against the person making any such payment, which may be prosecuted in any county wherein notice of lien has been filed."
[2] This statute provides for the exemption of:
"(j) The debtor's right to receive, or property that is traceable to:
* * * * * *
(B) A payment, not to exceed $7,500, on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent; or
(C) A payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor."
[3] § 545(1)(A-F) allow the trustee to avoid the fixing of a statutory lien only if the lien becomes effective upon the debtor's insolvency or other financial distress. The hospital lien provided for in this case becomes effective regardless of the debtor's financial condition. It is obvious that the hospital lien in this case is not for rent or distress for rent as provided for in § 545(3) or (4). Finally, since the parties have agreed that the lien was properly perfected, § 545(2) has no application.
[4] O.R.S. 87.555(1) commences "Except as otherwise provided by law" . . . The debtor contends that the phrase "except as otherwise provided by law" has no meaning unless there are exceptions to the application of the hospital's lien in addition to those already spelled out and described above. He maintains that the exemption provided for in O.R.S. 23.160 should be included in the "except as otherwise provided by law". The debtor also contends that his interpretation is correct given the equities of this case.
[5] This Court acknowledges that Connecticut v. Leach, 15 B.R. 1005 (Bankr.Conn.1981) appears to be contrary to the cases cited above, reaching the opposite result where the state claimed a lien on a personal injury settlement against a debtor who had received child support payments under Aid To Families with Dependent Children pursuant to Connecticut law. To the extent that this case has any application on the question before this Court, this case appears to be a minority view and is rejected by this Court in favor of the apparent majority view set forth above.
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Matter of McLaughlin v Hankin (2015 NY Slip Op 07272)
Matter of McLaughlin v Hankin
2015 NY Slip Op 07272
Decided on October 7, 2015
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on October 7, 2015
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department
MARK C. DILLON, J.P.
THOMAS A. DICKERSON
JEFFREY A. COHEN
COLLEEN D. DUFFY, JJ.
2014-00512
(Index No. 3449/12)
[*1]In the Matter of Catherine McLaughlin, respondent,
vJoseph N. Hankin, etc., et al., appellants.
Robert F. Meehan, County Attorney, Westchester, N.Y. (Justin R. Adin of counsel), for appellants.
Jonathon Lovett, White Plains, N.Y., for respondent.
DECISION & ORDER
In a proceeding pursuant to CPLR article 78 to review a determination of Westchester Community College dated March 27, 2012, terminating the petitioner's employment as an instructor/counselor, the appeal is from a judgment of the Supreme Court, Westchester County (Neary, J.), entered October 30, 2013, which granted the petition and annulled the determination.
ORDERED that the judgment is reversed, on the law, with costs, the petition is denied, and the proceeding is dismissed on the merits.
The petitioner commenced this CPLR article 78 proceeding to review a determination of the president of Westchester Community College, Westchester Community College, and the County of Westchester (hereinafter collectively the college) to terminate her employment. In its answer, the college raised as an affirmative defense the petitioner's failure to exhaust her administrative remedies under the collective bargaining agreement (hereinafter the CBA) between the college and the Westchester Community College Federation of Teachers, American Federation of Teachers Local #2431 (hereinafter the union). The Supreme Court granted the petition upon finding that the petitioner was prevented from availing herself of the remedial provisions of the CBA by the union's decision not to press her claim. We reverse.
Contrary to the petitioner's contention, the issue of whether the union breached its duty of fair representation is preserved for appellate review. Generally, an employee covered by a collective bargaining agreement which provides for a grievance procedure must exhaust administrative remedies prior to seeking judicial remedies (see Matter of Plummer v Klepak, 48 NY2d 486, 489-490; Spano v Kings Park Cent. School Dist., 61 AD3d 666, 670-671; Matter of Amorosano-LePore v Grant, 56 AD3d 663, 664; Matter of Murray v Downey, 48 AD3d 817, 818; Matter of Hammond v Village of Elmsford, 8 AD3d 484). However, the failure to exhaust administrative remedies may be excused where the employee can prove that the union breached its duty of fair representation in the handling of the employee's grievance (see Buff v Village of Manlius, 115 AD3d 1156; Matter of Reese v Board of Trustees of Mohawk Val. Community Coll., 28 AD3d 1240; Jackson v Regional Tr. Serv., 54 AD2d 305). Breach of the duty of fair [*2]representation occurs only when a union's conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith (see Matter of Civil Service Bar Assn., Local 237, Intl. Bhd. of Teamsters v City of New York, 64 NY2d 188, 196; Hickey v Hempstead Union Free School Dist., 36 AD3d 760, 761; Matter of Grassel v Public Empl. Relations Bd., 301 AD2d 522, 523). Here, the petitioner did not allege that the union's conduct was arbitrary, discriminatory, or made in bad faith, and the record does not support such a conclusion (see Ponticello v County of Suffolk, 225 AD2d 751; Matter of Garvin v New York State Pub. Empl. Relations Bd., 168 AD2d 446; cf. Spano v Kings Park Cent. School Dist., 61 AD3d 666, 671). Accordingly, as the petitioner failed to establish that an exception to the exhaustion doctrine was applicable, the Supreme Court should have denied the petition and dismissed the proceeding on the merits.
DILLON, J.P., DICKERSON, COHEN and DUFFY, JJ., concur.
ENTER:
Aprilanne Agostino
Clerk of the Court
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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 05a0538n.06
Filed: June 22, 2005
No. 04-5414
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
)
Plaintiff-Appellee, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE WESTERN
) DISTRICT OF TENNESSEE
CHRISTOPHER CLEMENTS )
)
Defendant-Appellant. )
BEFORE: DAUGHTREY and CLAY, Circuit Judges, and GRAHAM,1 District
Judge.
GRAHAM, District Judge. Defendant-Appellant Christopher
Clements was indicted on January 16, 2003, in the Western District
of Tennessee for one count of conspiracy to manufacture
methamphetamine and one count of attempt to manufacture
methamphetamine in violation of 21 U.S.C. § 846, and one count of
aiding and abetting the possession of equipment, chemicals,
products and materials used to manufacture methamphetamine in
violation of 21 U.S.C. § 843(a)(6) and 18 U.S.C. § 2. Defendant
was arrested on January 29, 2003. Defendant was arraigned on
February 5, 2003, and an order of detention pending trial was
entered. On November 18, 2003, defendant entered a plea of guilty
to the conspiracy charge, Count 1 of the indictment.
During the preparation of the presentence report, defendant
objected to the probation officer’s determination of the quantity
1
The Honorable James L. Graham, United States District Judge for the
Southern District of Ohio, sitting by designation.
of drugs used as relevant conduct to establish the defendant’s
offense level. In a sentencing memorandum filed on March 17, 2004,
the defendant withdrew his objection to the amount of drugs
utilized to calculate his base offense level. At the sentencing
hearing held on March 18, 2004, defense counsel reaffirmed that the
objection to the calculation of the quantity of drugs being used to
determine the base offense level was being withdrawn. Accepting
the probation officer’s findings in the presentence report, the
district court determined that the defendant’s relevant conduct in
the conspiracy was at least five hundred grams but not more than
1.5 kilograms of methamphetamine, yielding a base offense level 32.
Defendant made objections to the probation officer’s
conclusions that two levels should be added for obstruction of
justice under § 3C1.1 of the United States Sentencing Guidelines
(“U.S.S.G.”), and that defendant was not entitled to a reduction
for acceptance of responsibility pursuant to U.S.S.G. § 3E1.1. The
court granted defendant’s objection to the enhancement for
obstruction of justice.
The probation officer’s conclusion that defendant was not
entitled to a reduction for acceptance of responsibility was based
on information that on February 24, 2003, subsequent to his
indictment and arrest for the offense in this case, defendant was
involved in the transmission of a recipe for manufacturing
narcotics. A recipe for the manufacture of LSD was found in the
apartment of Scott Pecukonis. The letter containing the recipe was
found with an envelope which indicated that it had been mailed by
the defendant from the West Tennessee Detention Facility, Mason,
Tennessee, on February 24, 2003. Defendant’s wife, Tonya Clements,
2
confirmed that defendant had sent the letter. The probation
officer also relied on information that on March 19, 2003,
defendant was involved in a scheme to smuggle marijuana into the
detention facility. The probation officer received a summary of
phone calls pertaining to the scheme, and defendant’s wife admitted
that defendant had asked her to smuggle marijuana to him.
At the sentencing hearing, defense counsel stated that
defendant did not dispute the above information. He also conceded
that the defendant’s actions indicated that defendant had not
accepted responsibility at that point, and that his actions were
contrary to a finding of acceptance of responsibility. However,
counsel noted that an entire year had passed since these incidents,
during which the defendant had not engaged in any similar conduct.
Counsel further argued that the defendant had admitted his
responsibility for the offense of conviction when he pleaded
guilty, and that he had done everything he could to cooperate with
the government. The government argued that defendant’s behavior
was inconsistent with acceptance of responsibility, and further
noted that defendant’s lack of involvement in any further drug
activity could be explained by the fact that after these incidents,
defendant was transferred to a more secure federal facility.
The district court agreed with the government’s position and
concluded that defendant was not entitled to a reduction for
acceptance of responsibility in light of his involvement with drug
activity on two occasions following his arrest. Defendant was
sentenced to a term of imprisonment of one hundred and thirty-five
months. Defendant now pursues the instant appeal.
3
Acceptance of Responsibility
In his first assignment of error, defendant argues that the
district court erred in not granting him a three-level reduction
for acceptance of responsibility under U.S.S.G. § 3E1.1. We first
note that during the pendency of this appeal, the United States
Supreme Court rendered a decision in United States v. Booker, 543
U.S. , 125 S.Ct. 738 (2005), holding that the Sentencing
Guidelines are no longer mandatory. However, under 18 U.S.C. §
3553(a)(4)(A), the sentencing range calculated under the Sentencing
Guidelines is still a factor which must be considered by the
district court in imposing sentence. Therefore, whether the
district court correctly declined to grant a reduction for
acceptance of responsibility under the Guidelines is a matter we
must address as part of this court’s review of the sentence for
reasonableness as required under Booker.
The determination of the sentencing judge on the issue of
acceptance of responsibility “is entitled to great deference on
review.” U.S.S.G. § 3E1.1, app. note 5. While the district
court’s factual findings for purposes of sentencing under the
Guidelines are reviewed for clear error, a deferential standard of
review is applied to the district court’s application of the
guidelines to the facts. United States v. Webb, 335 F.3d 534, 536-
38 (6th Cir. 2003)(noting that the de novo review standard for the
application of the acceptance of responsibility adjustment to
uncontested facts used in United States v. Jeter, 191 F.3d 637, 638
(6th Cir. 1999) was no longer valid in light of Buford v. United
States, 532 U.S. 59 (2001)).
Section 3E1.1(a) of the Guidelines provides that a defendant’s
4
offense level should be decreased by two levels if he “clearly
demonstrates acceptance of responsibility for his offense.”
U.S.S.G. § 3E1.1(a). The defendant has the burden of proving by a
preponderance of the evidence that he merits a reduction for
acceptance of responsibility. United States v. Hughes, 369 F.3d
941, 945 (6th Cir. 2004); United States v. Benjamin, 138 F.3d 1069,
1075 (6th Cir. 1998). Factors which the court may consider in
determining whether a defendant is entitled to a reduction under
that section include: whether the defendant truthfully admitted the
conduct comprising the offenses of conviction, and truthfully
admitted, or did not falsely deny any additional relevant conduct
for which the defendant is accountable; the voluntary termination
or withdrawal of the defendant from criminal conduct or
associations; and the timeliness of the defendant’s conduct in
manifesting the acceptance of responsibility. U.S.S.G. § 3E1.1,
app. note 1(a), (b), and (h).
The entry of a guilty plea combined with truthfully admitting
the conduct comprising the offense of conviction constitutes
significant evidence of acceptance of responsibility under
U.S.S.G. § 3E1.1, app. note 3. However, a defendant is not
entitled to this reduction as a matter of right, and the fact that
the defendant entered a guilty plea may be outweighed “by conduct
of the defendant that is inconsistent with such acceptance of
responsibility.” Id.; Webb, 335 F.3d at 538; United States v.
Tilford, 224 F.3d 865, 867 (6th Cir. 2000).
Under § 3E1.1(b), a defendant whose offense level is level
sixteen or greater prior to the adjustment for acceptance of
responsibility may qualify for an additional one-level decrease if
5
he has timely notified authorities of his intention to enter a plea
of guilty, thereby permitting the government to avoid preparing for
trial and permitting the court to allocate its resources
efficiently. U.S.S.G. § 3E1.1(b). In order to qualify for the
additional reduction under § 3E1.1(b), the defendant must also
qualify for a decrease under § 3E1.1(a). U.S.S.G. § 3E1.1, app.
note 6.
The district court declined to grant defendant a reduction for
acceptance of responsibility on the ground that defendant’s drug
activities after his indictment and arrest but prior to his guilty
plea were inconsistent with a finding of acceptance of
responsibility. Defendant argues that his plea of guilty in this
case entitles him to the reduction. He contends that since the
incidents involving the LSD recipe and the attempt to smuggle
marijuana occurred prior to the entry of his guilty plea, they
cannot be considered in determining whether he is entitled to the
reduction.
Defendant relies on United States v. Jeter, 191 F.3d at 640,
where we noted that, although district courts have discretion in
determining the time period for acceptance of responsibility, that
discretion is not unbridled. In Jeter, we held that the district
court could not use Jeter’s preindictment state crimes as a basis
for denying him a reduction for acceptance of responsibility,
stating that “the defendant must be on notice that the federal
government has an interest in his or her affairs before § 3E1.1
comes into play.” Id. at 639-40.
Defendant also cites United States v. Tilford, in which this
court concluded that, despite the fact that Tilford was alerted to
6
the IRS agents’ interest in his affairs in 1993 when he was
informed of the IRS investigation, the relevant time period for
measuring Tilford’s acceptance of responsibility began with the
entry of Tilford’s guilty plea in 1998. Tilford, 224 F.3d at 868.
Tilford pleaded guilty on the same day he was indicted.
However, in United States v. Harper, 246 F.3d 520, 527 (6th
Cir. 2001), overruled on other grounds, United States v. Leachman,
309 F.3d 377, 385 (6th Cir. 2002), we concluded that the district
court properly evaluated the defendants’ conduct for purposes of
the acceptance of responsibility adjustment as of the date of the
indictment. In Harper, the defendant wrote an obstructive letter
after he was indicted, but three-and-a-half months prior to signing
a plea agreement. This court noted that the district court could
consider the defendant’s behavior following his indictment in
federal court in determining acceptance of responsibility “because
the defendant is certainly ‘on notice that the federal government
has an interest in his ... affairs’ at the time of indictment.”
Id. at 526-27 (quoting Jeter, 191 F.3d at 639-40). We stated that
the defendant knew of the government’s interest in his criminal
activity, at the latest, when he was first indicted, and held that
“the district court did not err by considering all post-indictment
behavior when assessing whether to grant a downward adjustment
under § 3E1.1.” Id. at 527. Subsequently, in United States v.
Webb, this court upheld the district court’s denial of a reduction
for acceptance of responsibility where the defendant continued to
engage in drug trafficking after the execution of search warrants
but prior to the defendant’s arrest. Webb, 335 F.3d at 538.
Defendant relies on United States v. Hakley, No. 01-2423
7
(unreported), 2004 WL 1367481 (6th Cir. June 15, 2004). In Hakley
a panel of this court held that the district court should only have
considered the defendant’s post-plea conduct. However, in Hakley,
the other criminal activity in question occurred prior to the
defendant’s being charged by way of information. Thus, we do not
believe that Hakley can be read as placing an absolute ban on the
consideration of conduct which occurs prior to the entry of a
guilty plea. Even if Hakley is so construed, it is an unreported
decision, and to the extent that it conflicts with the previously
published opinions in Harper and Webb, we are bound to follow
Harper and Webb. See 6th Cir. R. 206(c).
The district court did not err in considering the defendant’s
post-indictment conduct in deciding whether the defendant was
entitled to a reduction for acceptance of responsibility. The
district court reasonably concluded that defendant’s admitted
continuing drug activities, which indicated the defendant’s failure
to voluntarily terminate or withdraw from criminal conduct or
associations, was inconsistent with a finding of acceptance of
responsibility. U.S.S.G. § 3E1.1, app. notes 1(b) and 3. The
district court’s denial of the reduction was reasonable. Since the
court properly denied the reduction for acceptance of
responsibility under § 3E1.1(a), defendant was not entitled to a
further one-level reduction under § 3E1.1(b). Defendant’s first
assignment of error is DENIED.
Quantity of Controlled Substance
In his second assignment of error, defendant, citing Blakely
v. Washington, 542 U.S. , 124 S.Ct. 2531 (2004), argues that his
8
rights under the Sixth Amendment of the United States Constitution
were violated when the district court sentenced him based on a
quantity of drugs which was not found by a jury to have been proved
beyond a reasonable doubt and not admitted by him. Defendant does
not attack the factual accuracy of the district court’s drug
quantity findings. Rather, defendant contends that the sentencing
procedures employed by the district court violated Blakely and
Booker.
In Blakely, the Supreme Court held that the determinate
sentencing system in effect in the state of Washington was invalid
on Sixth Amendment grounds. During the pendency of this appeal,
the United States Supreme Court issued a decision in United States
v. Booker, in which the Supreme Court extended the reasoning in
Blakely to the federal Guidelines. The Court in Booker held: “Any
fact (other than a prior conviction) which is necessary to support
a sentence exceeding the maximum authorized by the facts
established by a plea of guilty or a jury verdict must be admitted
by the defendant or proved to a jury beyond a reasonable doubt.”
Booker, 125 S.Ct. at 756. The holding in Booker applies to all
cases pending on direct appeal at the time of the decision. Id.,
125 S.Ct. at 769.
Defendant did not make an argument under Blakely or Booker
before the district court, as neither of those cases had been
decided at the time of the defendant’s sentencing. Typically,
where a defendant fails to assert an argument before the district
court, that argument is deemed to be forfeited and is reviewed on
appeal for plain error. United States v. Milan, 398 F.3d 445, 450-
51 (6th Cir. 2005). However, in this case, the government argues
9
that the defendant’s withdrawal of his objection to the probation
officer’s conclusions concerning the amount of drugs to be
considered as relevant conduct operated as an admission of that
drug quantity. The government’s position is that defendant’s
withdrawal of his objections to drug quantity constituted a waiver
by the defendant of any objection to that quantity, foreclosing any
claim of error under Booker.
Waiver is distinguishable from forfeiture. Forfeiture is the
failure to make a timely objection or assertion of a right, whereas
waiver is the intentional relinquishment or abandonment of a known
right. United States v. Olano, 507 U.S. 725, 733 (1993). Plain
error review does not apply to cases of waiver, but may be invoked
in the court’s discretion to review rights that were forfeited
below. Id. at 733-34.
In United States v. Stafford, 258 F.3d 465, 476 (6th Cir.
2001), we held that the defendant’s failure to challenge the drug
quantity findings made by the probation officer operated as an
admission to the drug types and quantities contained in the report,
and provided the requisite factual basis to sustain the defendant’s
enhanced sentence. See also United States v. Roper, 266 F.3d 526,
531-32 (6th Cir. 2001)(defendant’s withdrawal of objection and
stipulation to drug quantity in presentence report provided
requisite factual basis for enhanced sentence); United States v.
Pruitt, 156 F.3d 638, 648 (6th Cir. 1998)(defendant’s statement that
he had no objections to the presentence report constitutes an
express admission of the amount and type of drugs attributed to the
defendant in the report).
Although the above decisions stand for the proposition that
10
the failure to object to the probation officer’s calculations of
drug quantity constitutes an admission of that quantity, they do
not specifically address whether that failure to object constitutes
a waiver precluding plain error review of the district court’s
quantity determinations on appeal. In United States v. Treadway,
328 F.3d 878, 883 (6th Cir. 2003), we applied a plain error analysis
to defendant’s drug quantity challenge on appeal even though
defendant did not object at sentencing to the drug quantity
specified in the PSI. Thus, there may be a hypothetical case where
a defendant could argue for a plain error analysis of a Stafford
admission, such as where the parties learn after sentencing that
the quantity finding was based on clearly erroneous information, or
where the defendant at sentencing was unaware of or mistaken as to
material facts.
However, such an issue is not before us here. Regardless of
whether a Stafford admission results in a waiver or a forfeiture of
any objection to the accuracy of the probation officer’s drug
quantity findings, that is not the nature of defendant’s claim in
this appeal. Rather, the defendant’s argument is that his Sixth
Amendment rights as defined under Blakely and Booker were violated
by the sentencing procedure employed by the district court.
In Stafford and Roper, this court employed a plain error
analysis in addressing an analogous argument that the sentences in
those cases were invalid under Apprendi v. New Jersey, 530 U.S. 466
(2000). Stafford, 258 F.3d at 476-79; Roper, 266 F.3d at 531. In
United States v. Stines, 313 F.3d 912 (6th Cir. 2002), this court
reviewed the defendants’ Apprendi claim for plain error even though
one defendant withdrew his objection to the drug quantity in the
11
report and another defendant stipulated to a base offense level.
We commented, “The subsequent withdrawal by Stines and stipulation
by Ford could lead one to believe that defendants waived their
claims challenging the drug quantity determination.” Id. at 917.
However, noting the distinction between waiver and forfeiture, this
court went on to state that it “would have been impossible for the
defendants to have intentionally relinquished or abandoned their
Apprendi based claims considering Apprendi was decided after they
were sentenced.” Id. We concluded that the withdrawal of Stine’s
objection and Ford’s stipulation resulted in a forfeiture rather
than a waiver of their right to challenge the drug quantity
determination on appeal, requiring review of their Apprendi claim
under the plain error analysis. Id. at 917-18.
As in Stines, the defendant here could not have intentionally
relinquished or abandoned his Blakely and Booker claims, since
those cases were decided after he was sentenced. Therefore, we
will address the defendant’s claim under Blakely and Booker using
a plain error analysis.
Under the plain error test, “before an appellate court can
correct an error not raised at trial, there must be (1) ‘error,’
(2) that is ‘plain,’ and (3) that ‘affect[s] substantial rights.’”
Johnson v. United States, 520 U.S. 461, 466-67 (1997)(quoting
Olano, 507 U.S. at 731). If these three criteria are met, then we
may exercise our discretion to notice a forfeited error which
seriously affects the fairness, integrity, or public reputation of
judicial proceedings. Milan, 398 F.3d at 451.
First, we must consider whether there was error under current
law. United States v. Rogers, 118 F.3d 466, 471-72 (6th Cir. 1997).
12
In Booker, the Supreme Court held that any fact (other than a prior
conviction) which is necessary to support a sentence exceeding the
maximum authorized by the facts established by the plea of guilty
or a jury verdict must be admitted by the defendant or proved to a
jury beyond a reasonable doubt. Booker, 125 S.Ct. at 756. Here,
Count 1 of the indictment alleged a conspiracy involving a
“detectable amount of methamphetamine” and no particular quantity
was specified in the plea agreement. However, under Stafford, the
defendant effectively admitted the quantity of drugs used to
calculate his sentence by withdrawing his objection to the drug
calculations in the presentence report. Defendant’s admission of
drug quantity under Stafford constituted an admission of facts
under Booker. Therefore, the district court’s reliance on the
amount of drugs attributed to the defendant in the presentence
report did not violate the defendant’s Sixth Amendment rights. See
Stafford, 258 F.3d at 476 (rejecting defendant’s Apprendi argument,
and noting that “Defendant’s factual admissions in this case
obviate any possible concerns about the proper standard of
proof.”).2
However, the extent of defendant’s rights under Booker does
not end there. Defendant was sentenced under the pre-Booker
2
Judge Clay states in his concurring opinion that it is inconsistent to
hold that plain error review of defendant’s Booker claim is available when
defendant’s Stafford admission forecloses any argument that his Sixth Amendment
rights were violated. However, the starting point for determining the
availability of plain error review is not whether the claim has merit. Stines
indicates that where the defendant could not have intentionally relinquished or
abandoned a constitutional claim first recognized after sentencing, a forfeiture,
rather than a waiver, results, even if the plain error analysis ultimately
reveals that the district court committed no error. See Stines, 313 F.3d at 917;
United States v. Harris, No. 04-1589, 2005 WL 894581 at *2 (6th Cir. Apr. 19,
2005)(finding no Sixth Amendment error in light of Stafford admission after
applying plain error analysis).
13
mandatory Sentencing Guidelines. Because 18 U.S.C. §3553(b)(1) has
been excised and severed under Booker, the district court erred by
treating the Guidelines as mandatory when it sentenced defendant.
United States v. Barnett, 398 F.3d 516, 525 (6th Cir. 2005). Thus,
in this respect, the first branch of the plain error test is
satisfied in this case.
The second issue is whether the error was “plain.” A “plain”
error is one that is “clear” or “obvious.” Olano, 507 U.S. at 733-
34. Where the law at the time of trial was settled and clearly
contrary to the law at the time of appeal, it is sufficient that an
error be plain at the time of appellate consideration. Johnson,
520 U.S. at 468. In this case, the Sentencing Guidelines were
mandatory when the defendant was sentenced, but Booker effectuated
a “clear” and “obvious” change in law by making the Sentencing
Guidelines advisory. Thus, it was plain error for defendant to be
sentenced under a mandatory Guidelines scheme that has now become
advisory. See Barnett, 398 F.3d at 525-26.
The third prong is whether the error affects the defendant’s
substantial rights. Generally, for an error to affect a
defendant’s substantial rights, the error must have been
prejudicial, such as error that caused the defendant to receive a
more severe sentence. Olano, 507 U.S. at 734; United States v.
Swanberg, 370 F.3d 622, 629 (6th Cir. 2004). However, in Barnett,
a panel of this court held that a presumption of prejudice arises
in cases where a defendant is sentenced under mandatory, rather
than advisory, Guidelines, and where the district court could have
imposed a lower sentence had it known that the Guidelines were
merely advisory. Barnett, 398 F.3d at 528 (prejudice presumed
14
because it would be exceedingly difficult for a defendant to show
that his sentence would have be different under an advisory
framework).
The Barnett court noted that the presumption of prejudice
could be rebutted in a rare case where “the trial record contains
clear and specific evidence that the district court would not have,
in any event, sentenced the defendant to a lower sentence under an
advisory Guidelines regime.” Id. at 529. However, no such
evidence exists in the instant case. Defendant was sentenced prior
to the decisions in Blakely and Booker, and the district court did
not indicate what sentence would be imposed if the Guidelines were
regarded as advisory rather than mandatory. The case for remand is
particularly strong where, as here, the district court sentenced
defendant at the low end of the Guidelines range. See United
States v. Hamm, 400 F.3d 336, 340 (6th Cir. 2005).
Because defendant was sentenced under the Sentencing
Guidelines as a mandatory, rather than advisory, sentencing scheme,
defendant’s substantial rights have been affected, and the third
prong of the plain error test has been satisfied.
Finally, we must determine whether this case warrants the
exercise of our discretion. Rogers, 118 F.3d at 473. In
accordance with Barnett, “[w]e conclude that an exercise of our
discretion [to remedy plain error] is appropriate in the present
case.” Barnett, 398 F.3d at 530. This is a case where the error
may be regarded as seriously affecting the fairness, integrity, or
public reputation of judicial proceedings. Milan, 398 F.3d at 451.
As we noted in United States v. Oliver, 397 F.3d 369, 381 n. 3 (6th
Cir. 2005), we ought not assume that a defendant’s sentence under
15
the new discretionary sentencing regime would be the same and
therefore that a remand is superfluous.
Conclusion
For the foregoing reasons, we AFFIRM the district court’s
denial of a reduction for acceptance of responsibility under the
Guidelines. In addition, we VACATE defendant’s sentence and REMAND
for resentencing consistent with this opinion and with the Supreme
Court’s decision in Booker.
16
CLAY, J., concurring in the judgment only. I fully agree that
Clements’ sentence must be remanded to the district court in light
of our holding in United States v. Barnett, 398 F.3d 516, 525 (6th
Cir. 2005). I also agree that the district court did not err in
denying a downward departure in Clements’ sentence for acceptance
of responsibility. I decline to join the majority opinion because
I believe that it inappropriately relies on pre-Booker
jurisprudence to analyze Clements’ claim that he was sentenced in
violation of the Sixth Amendment. Furthermore, because Clements’
sentence must be remanded in light of Barnett, the majority’s
extended Sixth Amendment discussion amounts to wholly unnecessary
dicta. However, since the majority does address the issue, I am
compelled to note my disagreement with its analysis.
In United States v. Stafford, 258 F.3d 465, 476 (6th Cir.
2001), this Court held, pre-Booker, that the failure to object to
the type and/or quantity of drugs set forth in the presentence
investigation report (“PSIR”) constitutes an admission of the type
and/or quantity therein. The majority in the instant case applies
Stafford, and concludes that by failing to object Clements
effectively admitted the amount of methamphetamine set forth in the
PSIR. This is undoubtedly a correct application of Stafford’s
holding. However, the majority also concludes that Defendant’s
failure to object to the PSIR constituted a forfeiture, and not a
waiver, of his right to raise a Booker-based Sixth Amendment
17
argument on appeal. The conclusion that Clements’ failure to
object was both an admission and a forfeiture is illogical. It
does not make sense to state that Clements admitted the amount of
drugs used to calculate his sentence, but then also state that he
forfeited a Booker argument that we may review for plain error.
Booker specifically holds that “any fact . . . which is necessary
to support a sentence exceeding the maximum authorized by the facts
established by a plea of guilty or a jury verdict must be admitted
by the defendant . . .” United States v. Booker, 125 S. Ct. 738,
756 (2005) (emphasis added). Where the defendant has admitted the
facts used to calculate his sentence, there is no Booker problem,
thus there is nothing to review for plain error. This conclusion
is consistent with Stafford, which, although purporting to apply
plain error review, recognized that the district court did not
“commit[] any sort of error, plain or otherwise.” Stafford, 258
F.3d at 471. In my opinion, if the majority wishes to apply
Stafford, it makes much more sense to simply conclude that
Clements’ admission to the amount of drugs under Stafford
forecloses any argument that his sentence violated the Sixth
Amendment. See United States v. Harris, No. 04-1589, 2005 WL
894581 at *2 (6th Cir. Apr. 19, 2005) (citing Stafford and
concluding that the defendant’s failure to object to the PSIR means
that “there is no Sixth Amendment error in the present case”).
Furthermore, in addition to disagreeing with the way in which
18
the majority applies Stafford, I am not at all convinced that
Stafford and the other cases cited by the majority actually survive
Booker. Once again, because Barnett conclusively resolves
Clements’ sentencing claim, I believe it is entirely unnecessary to
rely on pre-Booker precedent such as Stafford and its progeny.
Because the majority’s conclusion that Clements’ failure to
raise a Sixth Amendment argument before the district court
constitutes a forfeiture that may be reviewed for plain error is
illogical in light of the conclusion that Clements’ failure to
object to the PSIR constituted an admission under Stafford, and is
superfluous dicta, I respectfully decline to join the majority’s
opinion.
19
| {
"pile_set_name": "FreeLaw"
} |
300 A.2d 8 (1972)
MARYLAND NATIONAL BANK, a corporation of the United States of America, Petitioner Below Appellant,
v.
PORTER-WAY HARVESTER MANUFACTURING COMPANY, a corporation, Plaintiff Below Appellee,
Warren Callaway, Defendant Below Appellee.
Supreme Court of Delaware.
November 24, 1972.
John E. Messick, of Tunnell & Raysor, Georgetown, for appellant.
Roy S. Shiels, of Brown, Shiels & Barros, Dover, for appellee.
CAREY, and HERRMANN, JJ., and BIFFERATO, J., sitting.
*9 BIFFERATO, Judge:
This is an appeal from denial by the Superior Court of the petition of Maryland National Bank (Bank) to set aside an execution sale of certain farm equipment sold by Porter-Way Harvester Manufacturing Company (Porter-Way) to Warren Callaway.
The issues raised in this appeal concern the Superior Court's interpretation of Article 9, Secured Transactions, Uniform Commercial Code. The specific issues are: (1) Does the financing statement filed by the Bank meet the requirements of 5A Del.C. § 9-402(1); and (2) Is a prior creditor's security interest affected by an execution sale?
In 1971, Callaway purchased from Porter-Way cultivators, mobile viners, motor vehicles, and other farm equipment. As a condition of the contract of sale, Callaway arranged financing through the Bank. The Bank thereafter perfected a purchase money security interest by complying with the Delaware recording statutes. 21 Del.C. § 2335; 5A Del.C. § 9-402. The financing statements included the following phrase as the description of the types (or items) of property that were to be considered collateral:
"Equipment of all kinds, including equipment now owned by Debtor and equipment hereafter acquired by Debtor."
Subsequently, Porter-Way perfected a security interest on the same equipment covered under the Maryland National Bank's recorded lien.
On February 24, 1970, after obtaining a judgment against Callaway, Porter-Way caused the farm equipment secured by its lien to be sold by the Sheriff at execution sale. On March 4, 1970, the Bank petitioned the Superior Court to set aside the sale, contending that the attachment of the perfected security interest which they held continued in the goods, notwithstanding the disposition thereof by the sheriff's sale. Porter-Way denied this and claimed that the Bank was not a senior lien holder because the description of the goods in the recorded financing statement was too general.
The Superior Court held that the financing statement was adequate and that its description of the goods therein met the requisites of 5A Del.C. § 9-402(1). The Court also found that the involuntary sale of Callaway's collateral resulted in the extinguishment of the previously perfected liens, leaving the Bank as senior lien holder, however, with the recourse of first priority in the distribution of the proceeds. Both parties have appealed.
I
5A Del.C. § 9-402(1) provides that:
"A financing statement is sufficient if it is signed by the debtor and the secured *10 party, gives an address of the secured party from which information concerning the security interest may be obtained, gives a mailing address of the debtor and contains a statement indicating the types, or describing the items, of collateral."
Porter-Way points out that in some jurisdictions it has been held that the words "consumer goods" and "all farm equipment" in financing statements are deemed so vague as not to be in substantial compliance with § 9-402(1). In Re Lehner, 303 F.Supp. 317 (D.Ct.Colo.1969) affirmed; Household Finance Corp. v. Kopel, 427 F. 2d 357 (C.A.10, 1970); Mammoth Cave Production Credit Assn. v. T. S. York, 429 S.W.2d 26 (Ky.Ct.App.1968). On this basis, it is asserted by Porter-Way that the description, "equipment of all kinds", as contained in the Bank financing statement, is not in accord with the prevailing rule and is consequently ineffective under § 9-402.
We think Porter-Way's position is not the proper interpretation of 5A Del.C. § 9-402. This, in our opinion, is a "notice" type statute rather than the "document" type statute exemplified by our former Chattel Mortgage Act, (25 Del.C. Ch. 23) and the Uniform Conditional Sales Act (6 Del.C. Ch. 9). The Delaware Uniform Commercial Code's financing statement is designed to give public notice of the existence of a security agreement and to give enough information as to permit interested persons to make inquiries to the parties of the secured transaction to ascertain details regarding the debtor's encumbered assets. 5A Del.C. § 9-402. The necessary description of collateral in such a financial statement is discussed in the Delaware Study Comment upon 5A Del.C. § 9-402 as follows:
"Any description of personal property or real estate in a financing statement or security agreement is sufficient, irrespective of whether or not it is specific, if it is reasonably identified or described."
The provisions of § 9-110 also shed light upon an adequate description under Article 9. That Section provides that for the purposes of Article 9, "any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described."
The financing statement filed by the Bank describes the collateral as "equipment of all kinds. . . ." In Article 9, there are four recognized classifications of goods. The word "equipment" is one such classification if it is "used or bought for use primarily in business" including farming. See 5A Del.C. § 9-109. Since the financing statement here set forth a lien on "equipment" and because Callaway bought the equipment for the business of farming, the description of the collateral in the financing statement was sufficiently informative as to constitute notice as required by 5A Del.C. § 9-402(1). Then, too, in the Delaware Study Comment upon 5A Del.C. § 9-109, "equipment" is defined as one of the "basic types of collateral".
Thus, the descriptions set out in the financing statement of this case meet the requirements of 5A Del.C. § 9-402 in that they indicate the "types" of collateral by which the security agreement is secured. The financing statement is not incomplete or inadequate merely because it does not follow the alternate, offered by 5A Del.C. § 9-402, of describing the "item".
Porter-Way infers that a description of goods in a financing statement must be less ambiguous than that given here by the Bank, otherwise there is no means available to ascertain the identification of the collateral described notwithstanding the burdensome task of investigating the character of undescribed goods. A specific procedure does exist under the Code wherein a prospective lender may request a debtor to forward a document to the secured party who in turn must return such *11 listing the secured collateral. 54A Del.C. § 9-208. If such had been requested by Porter-Way, the collateral covered by the Bank's lien could have been ascertained.
Furthermore, in the present case, Porter-Way, the junior lienholder, knew or had reason to know that Callaway was in the farming business and therefore the notice of "equipment of all kinds . . ." should have alerted him to ascertain the nature of this term through implementation of 5A Del.C. § 9-208.
Taking into consideration the broad purposes of the Uniform Commercial Code, a restrictive construction should not be given to this section setting forth the requisites of a sufficient financing statement. See National Cash Register Co. v. Firestone & Co., Inc., 1962, 346 Mass. 255, 191 N.E.2d 471. American National Bank & Trust Co. of Sapulpa v. National Cash Register Co., Okl.1970, 473 P.2d 234.
II
The second issue raised on this appeal is whether a prior creditor's security interest remains in effect after an execution sale?
The alienability of the debtor's rights is dealt with in Section 5A Del.C. § 9-311 which provides:
"The debtor's rights in collateral may be voluntarily or involuntarily transferred (by way of sale, creation of a security interest, attachment, levy, garnishment or other judicial process) notwithstanding a provision in the security agreement prohibiting any transfer or making the transfer constitute a default."
It is the position of the Bank that only the debtor's rights may be alienated in an involuntary disposition of goods; and that the security interest of a lienholder continues in the property even after a sheriff's sale. The Bank relies upon Altec Lansing v. Friedman Sound, Inc., 204 So.2d 740 (Dist.Ct.App.Fla.1967); First National Bank of Glendale v. Sheriff of Milwaukee County, 34 Wis.2d 535, 149 N.W.2d 548 (1967).
We find unpersuasive the contention that an execution sale does not extinguish a previous security interest in collateral.
The official Uniform Commercial Comment upon § 9-311 [Comment 2 to § 9-311, A.L.I.], which deals with alienability of debtor's rights explains that:
"in all security interests the debtor's interest in the collateral remains subject to claims of creditors who take appropriate action. It is left to the law of each state to determine the form of `appropriate process'." (Emphasis added)
There is no statutory provision in Delaware for the "appropriate process" to be followed by a creditor intending to limit the interest in secured property acquired by a purchaser at a sale.
It has long been settled by case law in this State that a creditor may levy against a secured property in the hands of a debtor with the resultant proceeds being distributed on the basis of priority of liens. In turn, under the established case law of this State, the title acquired by the purchaser at the sale is free and clear of all liens theretofore existing. In 2 Woolley on Delaware Practice § 1072(d), p. 736, the author states:
"When goods and chattels levied upon and sold under either fi fa or vend. exp. are covered by a chattel mortgage placed upon them either before or after levy, they are sold free and discharged from the lien of the mortgage, and the proceeds are applied first, to the costs of the sale, and the balance distributed according to the priority of the respective liens."
See Isaacs v. Messick, 1 Marv. 259, 40 A. 1109 (1894); Associated Realty Corporation v. Caldwell, 6 W.W.Harr. 196, 172 A. 842 (1934).
*12 It appears, therefore, that it was the intent of the Legislature to forbear concerning the enactment of any statutory provision for the "appropriate process" contemplated by § 9-311, in order that our case law remain determinative of the issue of alienability of debtor's rights. The silence of the commentators as to any change made by § 9-311 to existing Delaware law contributes to the conclusion that § 9-311 made no change in Delaware's long-standing policy in the matter. Certainly, if a reversal of law was sought the Act itself or the commentators would have made mention of such an important change.
We agree with the policy of the law thus established. Chattels sold at an execution sale should be sold free and clear of all encumbrances in order to ensure the highest price and to stimulate bidding. The creditor with the highest priority is not prejudiced in his reliance on the value of the chattel to secure the debt since he is satisfied first from the proceeds.
We find that Altec Lansing v. Friedman Sound, Inc., supra, and First National Bank of Glendale v. Sheriff of Milwaukee County, supra, are clearly distinguishable. In Florida and Wisconsin, at the time these cases were decided, the legislatures of both states had enacted statutes to supplement § 9-311 of the Uniform Commercial Code. Their legislatures sanctioned the continuance of the security interest for the lienholder in collateral purchased at an execution sale. As we have seen, such legislation has not been enacted in Delaware.
Moreover, the Florida and Wisconsin rules interfere with the general policy of the Code to eliminate stumbling blocks in commercial transactions. Certainly, prospective bidders at a sheriff sale would be discouraged from bidding on property with an encumbered title.
We conclude, therefore, that the Superior Court correctly held that the sale extinguished the Bank's lien under § 9-311, according it, however, a priority position as to the proceeds. The contrary rule would discourage prospective bidders by requiring them, in effect, to make lien searches before bidding.
For the forgoing reasons, the judgment below is affirmed.
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 02-40386
Conference Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
TROY ANTHONY WILTURNER,
Defendant-Appellant.
--------------------
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 1:98-CR-179-ALL
--------------------
December 12, 2002
Before JOLLY, JONES, and CLEMENT, Circuit Judges.
PER CURIAM:*
The Federal Public Defender has moved for leave to withdraw
and has filed a brief pursuant to Anders v. California, 386 U.S.
738 (1967). Troy Anthony Wilturner received a copy of counsel’s
motion and brief but has not filed a response. Wilturner’s
sentence was not in violation of law nor plainly unreasonable.
See United States v. Giddings, 37 F.3d 1091, 1093 (5th Cir.
1994).
*
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. 02-40386
-2-
Our review of the brief filed by counsel and of the record
discloses no other nonfrivolous issue for appeal. Accordingly,
the motion for leave to withdraw is GRANTED, counsel is excused
from further responsibilities, and the APPEAL IS DISMISSED.
See 5TH CIR. R. 42.2.
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7 F.Supp.2d 1030 (1997)
Amy SPECKMAN, Plaintiff,
v.
MINNESOTA MINING AND MANUFACTURING CO., a Delaware Corporation, d/b/a 3M, Defendant.
No. 4:96CV3292.
United States District Court, D. Nebraska.
October 14, 1997.
*1031 Charles H. Wagner, Becky J. Dias, Edstrom, Bromm Law Firm, Wahoo, NE, Kathleen M. Neary, Lincoln, NE, for Plaintiff.
Daniel E. Klaus, Rembolt, Ludtke Law Firm, Lincoln, NE, Larry M. Schumaker, Joseph P. Leon, Shook, Hardy Law Firm, Kansas City, MO, for Defendant.
MEMORANDUM AND ORDER
PIESTER, United States Magistrate Judge.
There are a number of pending matters in this case, but because of my disposition of the first, I do not address the remaining motions at this time.
A motion has been filed by defendant for sanctions and a protective order, arising from an incident that occurred on June 18, 1997. The defendant's motion was accompanied by documentary evidence. Plaintiff has responded to the motion by brief, and additional documentary evidence. Neither side has requested an evidentiary hearing. See NELR 7.1(f).
From the documents filed with the motion, I find the following to be true. On June 18, 1997 at the conclusion of several depositions taken over two days by plaintiff's counsel at defendant's Valley, Nebraska plant,[1] the plaintiff and plaintiff's attorney removed, without authorization or permission, a document posted on a bulletin board. They had been escorted to the exit area of the facility, but after the escort re-entered the work area, leaving them unaccompanied in the foyer area, they took a job announcement from the bulletin board before exiting the plant. The incident was captured on the defendant's security camera in the area. When plaintiff's counsel was asked the following day whether he had taken anything from the defendant's plant, he admitted taking the announcement and said that he had copied it and "dropped it back in the mail" to defendant's counsel to be returned. However, the letter from him to defendant's counsel enclosing the document is dated June 20, 1997, the day following the confrontation by defense counsel, and there is a stamped date of June 23, 1997 on the upper right corner of the letter, which I infer is the date the letter was received at the office of defense counsel in Kansas City.
The document taken, a copy of which has been filed, is not privileged, work product, or even critical to the lawsuit. It is an announcement which reads: "3M Job Applications will be available on Monday June 2nd at the NE Job Service Offices in Fremont and Omaha." At most, it may be cumulative evidence relevant to this dispute. The manner of its taking, however, is most disturbing.
This was not the first confrontation between counsel in this case, but those had not resulted in sanction motions. Although this action also preceded other unnecessarily contentious actions taken by plaintiff's counsel in this case, (See filings 70, 80, 81), it is just now being considered because of delays granted plaintiff in responding to the motion.
DISCUSSION
Misappropriating documents from an opponent or its lawyers violates the Federal Rules of Civil Procedure, which require that requests for the production of documents "shall" be made by serving a request *1032 on opposing counsel. F.R.Civ.P. 34(b). Circumventing the discovery process is not to be taken lightly; in fact, such actions have resulted in serious sanctions in other circumstances. See Fayemi v. Hambrecht and Quist, Inc., 174 F.R.D. 319, 74 Fair Empl. Prac.Cas. 1133 (S.D.N.Y.1997) (preclusion of stolen documents); Peerless Indus. Paint Coatings Co. v. Canam Steel Corp., 979 F.2d 685 (8th Cir.1992) ($30,000 sanction upheld for attorney's compliance with client's false response to discovery requests); Kearns v. Ford Motor Co., 114 F.R.D. 57 (E.D.Mich. 1987) (plaintiff fined $10,000 for surreptitiously purloining confidential documents from defendant's lawyers).
Not only is it a violation of the rules, but it is also a violation of this court and its process. It must be remembered that the only reason that plaintiff and her attorney were on the defendant's property at all was because it was specifically allowed by this court, over defendant's objection. Their presence there was for a specific, limited purpose: to take depositions. They had no carte blanch authorization to rifle among defendant's documents or to conduct an inspection of the plant. As addressed in circumstances similar to these:
The actual content of the documents whether privileged, non-privileged, relevant or irrelevant is not the crux of this dispute. It is the general abuse of the discovery process being conducted under the authority of this court and the ability to punish the perpetration of fraud upon the court that must be sanctioned. One can never be sure what Mr. Perna saw or copied, or what, if anything, he retained in his memory. It is not necessary to demonstrate that the purloined documents were relevant to this lawsuit. Rather it is the conduct that must be recognized as an interference with the judicial process and the orderly and fair administration of justice.
Perna v. Electronic Data Sys., Corp., 916 F.Supp. 388, 401 (D.N.J.1995). Thus, no matter how insignificant or harmless plaintiff's counsel may wish to paint the incident, it is indeed serious.
Nor do I accept the argument of plaintiff's counsel that during the depositions defendant's counsel would not permit the copying of documents. The deposition testimony cited for that argument (Deposition of Paul B. Holley, Filing 121, Exhibit 1, 14:17-22), was not in reference to this particular document at all, but rather respecting other documents that were improperly subpoenaed for production at the deposition, as the context of the deposition record clearly discloses. See (Filing 121, Exhibit 1, 12:1-15:6, and Filing 70). There is no evidence submitted that this document was ever properly sought through the discovery process.
It is now clear that a federal court has the inherent power to sanction for conduct which abuses the judicial process. See Chambers v. NASCO, Inc., 501 U.S. 32, 44-45, 111 S.Ct. 2123, 2132-33, 115 L.Ed.2d 27 (1991). This power is "governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases." Link v. Wabash R.R. Co., 370 U.S. 626, 630-31, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962). Moreover, pursuant to this power, a court may impose the severe sanction of dismissal with prejudice (or its equivalent, judgment) if the circumstances so warrant. See Roadway Express, Inc. v. Piper, 447 U.S. 752, 765, 100 S.Ct. 2455, 65 L.Ed.2d 488, (1980).
Defendant has not sought dismissal as a sanction in this instance, and that is appropriate. As stated, the document was not critical, privileged, or work product. (Deposition testimony of Diane K. Agnitsch, Filing 121, Exhibit 2, 39:24 - 41:2). It would have been subject to production if plaintiff had sought it, assuming it is even relevant. There was no prejudice visited upon the defendant by this incident, and dismissal would be much too severe a penalty.
Rather, the defendant seeks an order imposing upon plaintiff a $1,000 expense to be paid to defendant for bringing the motion; an order of preclusion; a protective order from any further discovery being conducted on 3M premises; and an order directing plaintiff and her counsel to account for any other documents purloined from defendant or *1033 third-party witnesses during other discovery depositions. These requested sanctions are warranted insofar as the defendant is concerned, for they will redress the harm done to it.
They do not redress the harm done to the court and the discovery process, however. It is important that the court have confidence in the representations placed before it by plaintiff's counsel to ensure that consideration of plaintiff's claims is not tainted by the behavior of her lawyer. Both the original taking of the document and the subsequent misrepresentation to defendant's counsel about having already mailed it back, erode considerably any such confidence.
This kind of incident also undermines public confidence in our justice system. When litigating a dispute, parties are entitled to confidence that the dispute will be decided fairly, on its merits, without the gamesmanship or arbitrariness of some other forms of dispute resolution through the ages. When a party's lawyer calls her back into a building in order to steal a document in circumvention of the discovery process, such action cannot but erode the confidence held in the court system by even that party, not to mention the opponent and its counsel. Although certainly more egregious circumstances have occurred, the underlying action nevertheless represents a blatant affront to the notion of fairness, dignity, and orderly dispute resolution. An appropriate sanction should be restorative of these interests.
It is also important that others be deterred from such conduct. The sanctions ordered below are designed to serve that end, as well. The payment of money is less significant to the other interests outlined above, for mere payment of money cannot excuse the behavior.
Because the actions appear from the evidence to have been instigated by counsel, rather than by plaintiff herself, I shall impose sanctions only on counsel. However, I shall also require that an additional lawyer be hired to represent plaintiff in this case, so as to restore confidence that the personalities of counsel have not tainted presentations to this court to the detriment of either plaintiff or defendant. Finally, I shall delay the further consideration of pending matters pending this transition, in the hopes that new counsel may be able to reduce the level of contentiousness now unnecessarily embroiling this case.
IT THEREFORE HEREBY IS ORDERED:
1. The defendant's motion for sanctions and protective order, filing 78, is granted, and
a. Plaintiff is precluded at trial from using as evidence in any way the document misappropriated;
b. Plaintiff's counsel shall within thirty days associate with other counsel from a different law office to act as co-counsel in further representing the plaintiff in this case; such association shall not in any way be used to charge the plaintiff a larger attorney fee;
c. No further discovery in this case shall take place at the Valley, Nebraska plant of the defendant;
d. In the event plaintiff or her counsel have taken without authorization any other documents or things from the premises of the defendant or any third-party witness in this case, such items shall be delivered to the court forthwith, together with appropriate affidavits explaining the circumstances.
e. Plaintiff's counsel is admonished that any further violations of professional standards in this court will result in harsh sanctions and/or disciplinary proceedings;
f. The clerk shall send a copy of this memorandum and order to the Nebraska State Bar Association Counsel for Discipline.
2. On the court's own motion, consideration of all other pending motions in this case is deferred until such time as plaintiff's new co-counsel has appeared and certifies in accordance with the provisions of NELR 7.1(I) that he or she has conferred with defendant's counsel in an attempt to resolve all disputed matters and that despite sincere efforts toward same, counsel have been unable to reach an accord, stating therein the matters that remain in dispute.
*1034 3. On the court's own motion, this case is removed from the active trial calendar until further order, following the appearance of additional counsel for the plaintiff and resolution of pending discovery motions. The pretrial conference scheduled for October 22, 1997 is accordingly canceled.
4. Defendant is awarded its reasonable expenses, including attorney fees, in bringing this motion before the court. Counsel shall confer regarding an appropriate amount to be awarded. In the event counsel are able to agree to an amount, a stipulation reciting their agreement shall be filed within 15 days. In the event counsel are unable to agree, defendant's application for fees may be filed within 15 days, properly supported in accordance with the local rules. Plaintiff's response shall be due 15 days thereafter. If either side desires a hearing on the matter of fees, request therefor shall be included in the application or the response, as applicable. In the absence of either a stipulation or an application being filed, the amount of $1,000.00 shall be awarded to defendant taxed against plaintiff's counsel only and shall be made a part of the judgment eventually entered in this case.
NOTES
[1] The depositions were taken at defendant's plant over defendant's objection only when this court denied defendant's motion for a protective order regarding the location. See filing 63.
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604 F.Supp. 1214 (1985)
RICHARDS & ASSOCIATES, INC., a Kentucky Corporation, Plaintiff,
v.
Leslie N. BONEY, D.R. Allen & Son, Inc., Leslie N. Boney, Architect, William J. Boney, Charles H. Boney, Leslie N. Boney, Architect, Inc., Defendants.
No. 83-89-Civ-7.
United States District Court, E.D. North Carolina, Wilmington Division.
March 28, 1985.
*1215 Charles B. Robson, Jr., Raleigh, N.C., Karl W. Leo, Greensboro, N.C., for plaintiff.
F. Stuart Clarke, Fayetteville, N.C., Joseph C. Moore, Jr., Raleigh, N.C., for defendants.
MEMORANDUM AND ORDER
TERRENCE WILLIAM BOYLE, District Judge.
This cause comes on before the undersigned United States District Judge on the defendants' motions pursuant to Rule 56 of the Federal Rules of Civil Procedure. The court has conducted a hearing on these motions at which time argument was received and after considering the entire record and the parties' briefs, the court makes the following order.
*1216 CLAIMS BARRED BY THE STATUTE OF LIMITATIONS
In May, 1976, the plaintiff Richards & Associates, Inc., contracted with the Board of Commissioners of New Hanover County, North Carolina, to install the plumbing for the additions and renovations to the New Hanover Memorial Hospital in Wilmington, North Carolina. The defendant Leslie N. Boney and his corporation was the architect for the project, and the defendant D.R. Allen & Son, Inc., was the general contractor. The plaintiff contracted with the county to provide all of the plumbing services.
In this action the plaintiff claims damage as a third party beneficiary resulting from the alleged breach by the defendants Boney and Allen of their contracts with New Hanover County. The plaintiff also alleges professional malpractice against Boney for its architectural services to New Hanover County, and against Allen for negligently performing its duties during the construction project. Summary judgment is proper and will be allowed as to all of the defendants on all of the pending claims.
North Carolina law requires that actions in contract and professional malpractice be brought within three years of the discovery of injury. NCGS 1-52(1), (15) and 1-15(c). Statutes of limitations require that the litigation be initiated within the prescribed time or not at all. Congleton v. The City of Ashboro, 8 N.C.App. 571, 174 S.E.2d 870 (1970); Bolick v. Barmag Corp., 306 N.C. 364, 293 S.E.2d 415 (1982). When this court is sitting based on its diversity jurisdiction, the court must apply the statutes of limitations of the appropriate state, in this case, North Carolina. Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945).
The plaintiff filed its first complaint on October 21, 1983. Since the defendants have pled the statutes of limitations, the plaintiff has the burden to show some act of the defendants occurring after October 21, 1980, which caused the plaintiff's damage under the causes of action alleged in the complaint. Parker v. Harden, 121 N.C. 57, 28 S.E. 20 (1897). In an affidavit dated May 27, 1980, Thomas K. Garland, Assistant Vice President of Richards & Associates, Inc., said that the plaintiff had completed its duties under the contract and that there were no liens or other obligations outstanding. The acts of the defendants, if any, causing the plaintiff's damage were therefore done prior to May 27, 1980, by the plaintiff's own statement. Therefore any claims arising out of the negligent management and operation of the construction project are barred by the statute of limitations.
CLAIM FROM BONEY'S ADVICE
The plaintiff claimed damages of $519,000 against the County Commissioners for delays in the construction project. The defendant Boney advised the Commissioners not to pay the final $37,000 due to the plaintiff on the contract until they had settled the $519,000 claim. The Commissioners acted on the advice and settled the dispute with the plaintiff for $50,000 and also paid the $37,000. Richards now alleges that the architect's advice to the Commissioners was malpractice and it claims damages against the architect Boney. The architect's advice to the Commissioners, given after October 21, 1980, the relevant date for the statute of limitations, did not give Richards an independent cause of action against the architect.
First, assuming that the architect had some professional duty to the plaintiff during the course of the construction, that professional duty as an architect must have concluded by the time the plaintiff submitted a certificate of completion. The architect may have had continuing duties to contractors still on the job when the plaintiff had finished, but he had no duty to the plaintiff. The plaintiff has failed to show a duty.
Second, assuming that the architect had a duty to the plaintiff after the plaintiff had completed his work, the advice was not architectural and did not breach an architectural duty.
*1217 Third, the architect's advice to the commissioners did not proximately cause the plaintiff any damage. Richards failed to show that it relied on Boney's advice to the Commissioners when it settled its $519,000 claim against them. He failed to allege that Boney made any assurances or recommendations to him about the settlement. Therefore, the architect's advice did not proximately cause any damage.
Fourth, the plaintiff had no new damages as a result of the alleged malpractice involving the settlement. Any damages to the plaintiff came from delay in the construction project, and those damages had fully ripened by the time the plaintiff had completed the work.
Having failed to show a duty, breach, causation and damages, the plaintiff has no cause of action against the architect arising out of the settlement of its claim against the commissioners.
RULE 8(a)(2) OF THE STATE RULES OF PROCEDURE
The court is convinced that the running of the statutes of limitations warrants the granting of defendants' motion for summary judgment. A question arises as to whether a basis exists for dismissing the complaint alleging professional malpractice because of the plaintiffs' request for $600,000 in damages. North Carolina law prohibits prayers for relief in professional malpractice actions which ask for a sum certain in excess of $10,000. Rule 8(a)(2) North Carolina Rules of Civil Procedure.
Under Erie R. Co. v. Thompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) and Hanna v. Plumer, 380 U.S. 460, 467, 85 S.Ct. 1136, 1141, 14 L.Ed.2d 8 (1965), this court must strive for consistent results between the state and federal courts, provided it can do so without violating a federal rule. A federal court in a diversity action must apply the substantive law of the state in which it sits. The Erie rule prevents forum shopping and prevents the unfairness of differing results depending on where the case was filed.
In Szantay v. Beech Aircraft Corporation, 349 F.2d 60 (1965), the Fourth Circuit developed a three-part analysis for use when applying Erie to cases in this circuit.
1. If the state provision, whether legislatively adopted or judicially declared, is the substantive right or obligation at issue, it is constitutionally controlling.
2. If the state provision is a procedure intimately bound up with the state right or obligation, it is likewise constitutionally controlling. (footnote omitted)
3. If the state procedural provision is not intimately bound up with the right being enforced but its application would substantially affect the outcome of the litigation, the federal diversity court must still apply it unless there are affirmative countervailing federal considerations. This is not deemed a constitutional requirement but one dictated by comity.
Id., 63, 64.
South Carolina had a door-closing statute which provided that an action against a corporation created under the law of another state could be brought in South Carolina by a nonresident only when the cause of action or the subject of the action was situated in South Carolina. Residents of Illinois sued a Delaware corporation for negligent manufacture of an airplane that was serviced in South Carolina and crashed in Tennessee.
As to the first prong, the parties in Szantay agreed that the statute was procedural. On the second prong, the court found that because the right arose under Tennessee law, the South Carolina door closing statute was not intimately bound up with the right. On the third prong of the analysis the court found that the state's policies would not be greatly harmed by refusing to apply the door closing statute. The court said the principles of Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965) were "intended to prevent `inequitable administration of the laws' working unfair discrimination against citizens of the forum state." The court found that refusing to apply the door-closing *1218 statute would not hurt the citizens of South Carolina.
The court found federal countervailing considerations in the policy of avoiding discrimination against non-residents and in the full faith and credit clause. Further, had the plaintiffs merely qualified as administrators of the decedents' estates, they could have sued in South Carolina courts. On the basis of this analysis, the Fourth Circuit refused to apply South Carolina's door-closing statute to the federal courts in that state.
The Fourth Circuit addressed this issue in a different context in DiAntonio v. Northampton-Accomack Memorial Hospital, 628 F.2d 287 (4th Cir.1980). The Virginia Malpractice Act requires a plaintiff to give prior notice of his intention to file a medical malpractice action and provides for medication and decision by a panel of physicians and lawyers appointed by the Chief Justice of the Commonwealth. The District Court dismissed the plaintiff's case for failure to give the prefiling notice. He appealed arguing the Virginia statute should not be applied to him because he was a citizen of New Jersey and the action was in federal court.
The Fourth Circuit ruled, "The Act's notice requirement and provision for panel review at the instance of either party were so `intimately bound up' with the rights and obligations being asserted as to require their application in federal courts under the doctrine of Erie, supra." Id. at 290. The court further found, "The contention that the jury may be influenced by the admission of the panel opinion is simply not an `affirmative countervailing federal consideration' within the meaning of Byrd [v. Blue Ridge Cooperative, 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958)]." Id.
The court concluded,
The provision for admission of the panel opinion is intimately related to Virginia's alteration of the substantive cause of action. It is intimately related to Virginia's strong policy of encouraging and promoting pretrial mediation. Because it enforces and implements those interests, the admission provision is applicable in this diversity case.
Id. at 291.
In Sandhill Motors, Inc. v. American Motors Sales Corp., 667 F.2d 1112 (4th Cir.1981), the court applied the North Carolina Motor Vehicle Dealers and Manufacturers Licensing Law, which required exhaustion of administrative remedies before filing suit, to diversity actions in federal court.
This court, in applying the Szantay analysis to the case at bar, finds that North Carolina Rule 8(a)(2) is procedural, but it is "intimately bound up" with a substantive state policy. The North Carolina General Assembly enacted the rule to respond to "a national medical malpractice crisis" and the adverse publicity which sometimes accompanies frivolous or exorbitant claims. See Harris v. Maready, 311 N.C. 536, 319 S.E.2d 912 (1984).
Under the third prong of the Szantay analysis, even if it were determined that the provision was not "intimately bound up" in the right to bring the suit, comity dictates that this court apply the rule because there are no countervailing federal considerations. There is no conflict between Federal Rule 8 and Rule 8(a)(2) of the North Carolina Rules of Civil Procedure. Federal Rule 8 does not purport to address professional malpractice actions or limit the monetary relief requested. Neither does the federal rule purport to displace the North Carolina rule.
Since there is no conflict between the two rules, an Erie analysis indicates that the state law should govern, and improper pleading would be a separate basis upon which this court could dismiss the complaint.
Summary
Because any actions by the defendants, which would give the plaintiff a cause of action, took place more than three years before the plaintiff filed this action, all defendants' motions for summary judgment are ALLOWED.
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Filed 3/28/13 P. v. Lim CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
THE PEOPLE, D061834
Plaintiff and Respondent,
v. (Super. Ct. No. SCD212846)
MARK D. LIM,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of San Diego County, Robert F.
O'Neill, Judge. Affirmed.
In November 2011, Mark D. Lim entered a negotiated guilty plea to second degree
murder (Pen. Code,1 §§ 187, subd. (a)), 190, subd. (a)) (count 1), attempted murder
(§§ 187, subd. (a), 664) with personal infliction of great bodily injury (§ 12022.7, subd.
(a)) and personal use of a deadly or dangerous weapon (a knife) (§ 12022, subd. (b)(1))
(count 2), making a criminal threat (§ 422) (count 5) and two counts of attempting to
1 All further statutory references are to the Penal Code unless otherwise specified.
dissuade a witness (counts 12 and 18) (§ 136.1, subd. (a)(2)). In April 2012, the court
sentenced Lim to a stipulated term of 15 years to life plus 15 years in prison: 15 years to
life for second degree murder, the nine-year upper term for attempted murder, eight-
month terms (one-third the middle term) for making a criminal threat and the two counts
of attempting to dissuade a witness, three years for personal infliction of great bodily
injury and one year for personal knife use. Lim appeals, contending the court abused its
discretion by denying his request for an evidentiary hearing to determine whether he is a
veteran suffering from mental health problems as a result of his military service
(§ 1170.9); substantial evidence does not support a finding he had the ability to pay the
$154 booking fee (also called a criminal justice administration fee) (Gov. Code,
§ 29550.1); and the court erred in ordering a penalty assessment on the section 1202.4,
subdivision (b), restitution fine. Lim also contends that if his first two contentions were
not preserved for appeal, trial counsel was ineffective. We affirm.
BACKGROUND
Lim threatened to kill his ex-girlfriend. Lim killed his ex-girlfriend's grandfather
and attempted to kill her mother. Lim sent letters to his ex-girlfriend's new boyfriend
threatening to have them both tortured and killed.
SECTION 1170.9
Section 1170.9 provides: "(a) In the case of any person convicted of a criminal
offense who could otherwise be sentenced to county jail or state prison and who alleges
that he or she committed the offense as a result of sexual trauma, traumatic brain injury,
post-traumatic stress disorder, substance abuse, or mental health problems stemming
2
from service in the United States military, the court shall, prior to sentencing, make a
determination as to whether the defendant was, or currently is, a member of the United
States military and whether the defendant may be suffering from sexual trauma, traumatic
brain injury, posttraumatic stress disorder, substance abuse, or mental health problems as
a result of that service. The court may request, through existing resources, an assessment
to aid in that determination. [¶] (b) If the court concludes that a defendant convicted of a
criminal offense is a person described in subdivision (a), and if the defendant is otherwise
eligible for probation and the court places the defendant on probation, the court may
order the defendant into a local, state, federal, or private nonprofit treatment program for
a period not to exceed that which the defendant would have served in state prison or
county jail, provided the defendant agrees to participate in the program and the court
determines that an appropriate treatment program exists."
Before sentencing, Lim personally requested an evidentiary hearing to determine
his eligibility for a section 1170.9 treatment program. The court denied the request
"without prejudice." Lim contends this deprived him of due process and caused him
prejudice. He argues a finding that he met the criteria of section 1170.9, subdivision (a),
might have reduced the restitution fine,2 would have assisted the Department of
Corrections and Rehabilitation in making treatment choices, might have resulted in future
benefits if governmental resources became available and would have served as
recognition of Lim's sacrifices as a member of the military.
2 The court imposed the $10,000 maximum restitution fine. (§ 1202.4, subd. (b).)
3
To be eligible for treatment under section 1170.9, a defendant must be eligible for
probation. (§ 1170.9, subd. (b).) Lim's plea bargain called for a stipulated prison
sentence.3 He was not eligible for probation and waived his right to appeal the stipulated
sentence. Furthermore, before Lim's sentencing, the language in section 1170.9
providing for a hearing was deleted by the Legislature. For these reasons, we reject Lim's
contentions.4
THE BOOKING FEE
To support his argument that substantial evidence does not support a finding he
had the ability to pay the $154 booking fee, Lim relies on Government Code
section 29550.2. Government Code section 29550.2 expressly requires an ability to pay
on the part of defendants arrested "by any governmental entity not specified in Section
29550 or 29550.1." Government Code section 29550.1, which does not contain an ability
to pay requirement, applies to defendants arrested by "[a]ny city, special district, school
district, community college district, college, university, or other local arresting
agency . . . ." (Gov. Code, § 29550.1, subd. (a).) Lim was arrested by the San Diego
3 Lim asserts the plea bargain did not specify that the stipulated term of 15 years to
life plus 15 years was to be served in prison. Prison is the only place a sentence for Lim's
crimes can be served; he was not eligible for imprisonment in county jail. (§§ 1170,
subd. (h)(3), 667.5, subd. (c)(1), (8), (12), 1192.7, subd. (c)(1), (8), (9), (23), (37), (38).)
4 The People ask us to augment the record with a Certification of Mental
Competence (§ 1372) and an attached report, filed in the trial court in May 2010. The
People contend the Certification is relevant to Lim's contention regarding section 1170.9.
Lim opposes the motion, asserting a violation of his statutory and constitutional rights to
privacy. Lim also notes that, contrary to the People's assertion, the sentencing court did
not rely on the Certification and report in ruling on Lim's section 1170.9 motion. We
deny the motion.
4
Police Department. Thus, Government Code section 29550.1 applies in this case, and the
court was not required to find Lim had the ability to pay the fee.
THE PENALTY ASSESSMENT
The court orally stated there would be a penalty assessment applied to the section
1202.4, subdivision (b), restitution fine. Lim correctly notes this was improper.
(§ 1202.4, subd. (e).) As the abstract of judgment does not reflect the penalty assessment,
however, there is nothing for us to correct.
EFFECTIVENESS OF TRIAL COUNSEL
Because we reject on the merits Lim's contentions regarding section 1170.9 and
the booking fee, we need not address his contention that trial counsel was ineffective if
those contentions were not preserved for appeal.
DISPOSITION
The judgment is affirmed.
McDONALD, J.
WE CONCUR:
HUFFMAN, Acting P. J.
McINTYRE, J.
5
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918 F.2d 958
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.UNITED STATES of America, Plaintiff-Appellee,v.Andre T. FLYNT, also known as Terry Flynt, Defendant-Appellant.
No. 90-3074.
United States Court of Appeals, Sixth Circuit.
Nov. 27, 1990.
Before KRUPANSKY, RALPH B. GUY, Jr. and SUHRHEINRICH, Circuit Judges.
ORDER
1
The case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of the record and briefs, this panel unanimously agrees that oral argument is not needed. Fed.R.App.P. 34(a).
2
Andre T. Flynt entered a guilty plea to a charge of conspiracy to distribute cocaine and received a 33 month sentence of imprisonment. He then filed with the District Court for the Northern District of Ohio a "Motion for Jail Credit," in effect a request for reduction of his federal sentence, alleging that he was entitled to 162 days credit towards his sentence for the time he was released on supervised bond prior to being sentenced. The district court denied the motion, finding that, since the record failed to indicate that Flynt had pursued and exhausted his administrative remedies with the Bureau of Prisons, the court lacked jurisdiction to entertain Flynt's claim. This appeal followed.
3
Upon consideration, we affirm the denial of Flynt's motion but for reasons other than those stated by the district court. See Russ' Kwik Car Wash, Inc. v. Marathon Petroleum Co., 772 F.2d 214, 216 (6th Cir.1985) (per curiam).
4
Flynt is not required to exhaust his administrative remedies with the Attorney General before seeking judicial review. A federal district court has the initial authority and duty to credit a prison term with time spent in presentence custodial detention. See United States v. Wilson, No. 89-6583, slip op. at 5-6 (6th Cir. Oct. 23, 1990).
5
In any event, the law on the merits is squarely against Flynt. For purposes of calculating credit for time served under 18 U.S.C. Sec. 3585, "official detention" as set forth in that statute has been interpreted as "imprisonment in a place of confinement, not stipulations or conditions imposed upon a person not subject to full physical incarceration." See United States v. Woods, 888 F.2d 653, 655 (10th Cir.1989), cert. denied, 110 S.Ct. 1301 (1990). Inasmuch as the trial court required, as a condition of release, that Flynt's travel and place of residence be restricted to the Northern District of Ohio, these restrictions do not equal the deprivation of liberty experienced by a person incarcerated in a jail facility. Woods, 888 F.2d at 656. As such, Flynt is not entitled to credit under Section 3585.
6
Accordingly, the request to proceed in forma pauperis is granted, and the district court's order is affirmed. Rule 9(b)(5), Rules of the Sixth Circuit.
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487 F.Supp. 779 (1979)
AUDIO TECHNICAL SERVICES LTD., Plaintiff,
v.
DEPARTMENT OF THE ARMY et al., Defendants.
Civ. A. No. 78-2260.
United States District Court, District of Columbia.
October 25, 1979.
Motion to Vacate Judgment Denied March 20, 1980.
*780 John B. Tieder, Jr., McLean, Va., for plaintiff.
William S. Liebman, Sp. Asst. U. S. Atty., Washington, D.C., for defendants.
*781 ORDER AND JUDGMENT
BARRINGTON D. PARKER, District Judge.
Pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, plaintiff Audio Technical Services Ltd. (Audio), a disappointed bidder for a government contract, has requested from the Department of Army its evaluations of the respective bids and certain detailed aspects of the successful bidder's proposal. Recording Consultants, Inc. (RC) was the successful bidder. The Department has released substantial portions of the requested documents and withheld others. It has refused to release portions of the requested documents claiming that they are exempt from disclosure.
The matter is presented for determination on cross-motions for summary judgment. After a consideration of the parties' points and authorities and the submitted affidavits, the Court grants summary judgment for the Army.
I.
There are no disputed material facts. The Department of Army issued a Request for Proposal for the design and installation of an audio recording system. Bid proposals were submitted by Audio, RC and a third company. The bid proposals were submitted with protective markings and other indications of their confidentiality. Designated Army personnel, an evaluation and selection team, analyzed and reviewed the proposals. The team then submitted recommendations to the contracting officer along with its technical evaluations and scores determined on the basis of cost and quality. Thereafter, the contracting officer made the final decision and awarded the contract to RC.
Plaintiff Audio was the low bidder and because it did not secure the contract, immediately filed a bid protest with the General Accounting Office (GAO). Later, Audio filed a FOIA request with the Army for the documents which are the subject of this suit. The Army sent all of the relevant documents to the GAO for consideration in connection with plaintiff's bid protest. The GAO has not issued a final ruling.
The Army released a substantial portion of the requested documents but withheld significant portions of the information sought by Audio. Specifically withheld are (1) details of the successful bidder's proposal and (2) the basic ingredients of the bid evaluations prepared by the Army technical evaluation and selection team. In denying access, the Army asserts that exemption four of FOIA protects the details of the bid proposal from disclosure and that the evaluations and recommendations of its personnel are predecisional and intra-agency material within exemption five.
II.
The fourth exemption of FOIA, § 552(b)(4), provides that the Act's disclosure provisions do not apply to matters which are "trade secrets and commercial or financial information obtained from a person and privileged or confidential." Under the fifth exemption, § 552(b)(5), an agency need not disclose inter- or intra-agency memoranda which would not be available to a private party in litigation with the agency.
A.
In determining the applicability of the fourth exemption the Court must look to the private and governmental interests involved. National Parks and Conservation Ass'n v. Morton, 498 F.2d 765 (D.C.Cir. 1974). The exemption is intended to encourage individuals to provide confidential information to the government and "[a]part from encouraging cooperation with the Government by persons having information useful to officials, section 552(b)(4) serves another distinct but equally important purpose. It protects persons who submit financial or commercial data to government agencies from the competitive disadvantages which would result from its publication." Id. at 768.
In justification of its partial compliance with the request for the full details of *782 RC's bid proposal the government submitted affidavits which described fully and plainly each deletion from the requested documents. The government maintains that "[t]he deleted information was based on both the Government's need to protect such information so as to not impair our ability to obtain such information in the future and the contractor's continuing desire [expressed in numerous letters to the government] to maintain confidentiality over trade secrets and proprietary data to avoid substantial harm to its competitive position."[1] Furthermore, the President of RC asserts, in conjunction with detailed explanation of the basis for each request for confidentiality, that release of the information "would cause substantial competitive [sic] harm to RCI. . . . Information of this specific detail is not customarily released to the general public."[2]See National Parks and Conservation Ass'n, 498 F.2d at 766, quoting S.Rep.No. 813, 89th Cong., 1st Sess. 9 (1965): "This exception is necessary to protect the confidentiality of information ... which would customarily not be released to the public by the person from whom it was obtained."
Withheld from the plaintiff were the following categories of RC's bid proposal: (1) customer list; (2) RC's design recommendations and identification of prospective problem areas; (3) RC's design concepts including methods and procedures; and (4) biographical data on key RC employees. The Court agrees that disclosure of this type of information would threaten the competitive position of the submitter and clearly thwart the government's interest in obtaining such information in the future. See National Parks and Conservation Ass'n v. Morton, supra; see also Soucie v. David, 448 F.2d 1067 (D.C.Cir.1971).
Audio urges a different result and argues that the exemption does not apply to the withheld portions of the bid proposal. In so urging, Audio relies upon a district court holding that cost proposals should be released after the award of a contract because the "need for secrecy is no longer present .... Neither the successful bidder nor the protester can gain any competitive edge if the information is released." Shermco Industries v. Secretary of the U. S. Air Force, 452 F.Supp. 306, 324 (N.D.Tex. 1978). Unlike a cost proposal, however, the omitted customer list and data on personnel include information important to RC's competitive position. Further, the withheld materials contain technical information with application well beyond the instant bid proposal and reflecting years of technological development by RC. The weight of case authority is not reflected in Shermco Industries. The fourth exemption was properly invoked as to the nondisclosed portions of the successful bidder's proposal.
B.
Under the fifth exemption an agency need not disclose predecisional deliberative materials that are part of the decisionmaking process. NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 95 S.Ct. 1504, 44 L.E.2d 29 (1975). Such materials are exempt from disclosure as long as the final opinion, in this case the contract award, does not expressly adopt or incorporate the intra- or inter-agency memorandum reflecting the predecisional deliberations. Id. at 161, 95 S.Ct. at 1521; Montrose Chemical Corp. of California v. Train, 491 F.2d 63, 68-71 (D.C. Cir.1974).
The exemption is based upon the presumption that disclosure of predecisional materials will inhibit the decisionmaking process; "[h]uman experience teaches that those who expect public dissemination of their remarks may well temper candor with a concern for appearances ... to the detriment of the decisionmaking process." NLRB v. Sears, 421 U.S. at 150, 95 S.Ct. at 1516, quoting U. S. v. Nixon, 418 U.S. 683, 705, 94 S.Ct. 3090, 3106, 41 L.Ed.2d 1039 (1974). The Army asserts and this Court *783 agrees that such considerations are paramount in order to encourage frank discussion among personnel of the evaluation and selection teams and that such a course is in the best interests of the Government. To release such data has the clear potential of inhibiting candid comments of the evaluation and selection team members.[3] "If government employees expected that every written recommendation, cost analysis, or feasibility opinion as well as the criteria used in reaching the same would be the object of intense scrutiny by the party adversely affected thereby, they would be likely only to communicate orally and/or conclusionally. The cost of such an eventuality in terms of efficiency and quality of decisionmaking could be great indeed." Mead Data Central, Inc. v. U. S. Department of the Air Force, 575 F.2d 932, 936 (D.C.Cir.1978).
Plaintiff argues that the submission of the predecisional materials to the GAO for consideration in the bid protest affords one basis for its allegation that exemption five does not apply and relies upon Shermco Industries, 452 F.Supp. at 322, for support. The Department of Army prepared a report specifically for use by the GAO in its determination on the plaintiff's bid protest and included the documents in issue in this case. This material falls within the exemption; the evaluative documents do not lose their predecisional nature when submitted to another agency. See Renegotiation Board v. Grumman Aircraft Engineering Corp., 421 U.S. 168, 188, 95 S.Ct. 1491, 1502, 44 L.Ed.2d 57 (1975). When submitted as support for a final decision of another agency, even a final opinion may become predecisional. NLRB v. Sears, 421 U.S. at 152 n. 19, 95 S.Ct. at 1517. The final decision in this case was made by the Army contracting officer. The withheld documents, technical evaluations and recommendations, as the government points out, "are not final ... and are only part of the criteria which a contracting officer must use in deciding whether or not to award a particular contract. Other criteria, including the evaluation of each proposed contractor's responsibility, are committed to the contracting officer's sole discretion."[4]
The Court finds that the evaluations and recommendations submitted to the Army contracting officer are policy-deliberative and exempt from disclosure under FOIA; the Department of Army appropriately withheld those documents.
On the basis of the foregoing it is this 25th day of October, 1979,
ORDERED that plaintiff's motion for summary judgment is denied; and defendant's motion for summary judgment is granted; and it is
FURTHER ORDERED that the complaint is dismissed with prejudice.
ORDER
On Motion to Vacate Judgment.
This action is before the Court on plaintiff's motion to vacate the Court's Judgment and Order of October 25, 1979, which granted summary judgment to the defendant and dismissed a complaint seeking certain documents under the Freedom of Information Act (FOIA), 5 U.S.C. § 552. The plaintiff contends the judgment should be set aside on the grounds of newly discovered evidence. Rule 60(b), Fed.R.Civ.P. The government opposes the motion. After a consideration of the parties' points and authorities the Court determines that plaintiff's motion should be denied.
A.
After unsuccessfully competing for a government contract, plaintiff brought this action under FOIA to obtain the successful bidder's proposals.[5] Plaintiff was denied access to the contract documents on the grounds that they were exempt from disclosure *784 under § 552(b)(4). Two weeks after the Court entered its judgment, the government released a list of the components installed pursuant to the original contract award. The contract in question was originally awarded by the Army in June 1978 to a person other than the plaintiff. The list released was part of a request for bids by the Army for the maintenance of the system previously installed in 1978 by the successful bidder. The list revealed much of the information to which plaintiff had sought access. Plaintiff's present motion alleges that the subsequent release constitutes newly discovered evidence, suggesting that it was in some manner wrongfully withheld from him and the Court.
B.
The subsequent release of the components by the Army does not affect the Court's earlier ruling. The issue before the Court was whether the government properly withheld the information at the time of the plaintiff's requests at the agency level in 1978 before the complaint was filed. The fact that circumstances have changed necessitating a limited disclosure at a later time presents an entirely different situation and does not afford grounds for the relief sought by the plaintiff. Exemption from the reach of FOIA cannot be extended to mandate perpetual confidentiality of the documents in the hands of the government. Defendant need preserve the confidentiality only so long as the nature of the information is deserving of protection and certainly not when the preeminent and legitimate needs of the government in obtaining a subsequent bid for maintenance contracts requires disclosure.
Accordingly, it is this 20th day of March, 1980,
ORDERED that plaintiff's motion to vacate this Court's October 25, 1979 Judgment and Order is denied.
NOTES
[1] Affidavit of Jane M. McIntyre, Acting Assistant Chief Counsel for Litigation, Office of Chief of Engineers, at 3.
[2] Affidavit of Jay W. Kingery, President of RC, at 2.
[3] Affidavit of Jane M. McIntyre at 8.
[4] Affidavit of Jane M. McIntyre at 8.
[5] Plaintiff also sought evaluative documents generated by the Department of the Army evaluation team. The Court's denial of plaintiff's motion for access to those documents is not in dispute.
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IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
AT NASHVILLE
Assigned on Briefs February 19, 2015 at Knoxville
JOE CLARK MITCHELL v. STATE OF TENNESSEE
Appeal from the Circuit Court for Maury County
Nos. 2311-12, 2314, 2316-18, 2320-22 Robert L. Holloway, Jr., Judge
No. M2014-00754-CCA-R3-CD – Filed May 20, 2015
The appellant, Joe Clark Mitchell, filed in the Maury County Circuit Court a motion to
correct an illegal sentence pursuant to Tennessee Rule of Criminal Procedure 36.1. The
motion was summarily denied, and the appellant timely appealed the ruling. Upon
review, we affirm the judgment of the trial court.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court is Affirmed.
NORMA MCGEE OGLE, J., delivered the opinion of the court, in which D. KELLY
THOMAS, JR., and ROBERT H. MONTGOMERY, JR., JJ., joined.
Joe Clark Mitchell, Only, Tennessee, Pro Se.
Herbert H. Slatery III, Attorney General and Reporter; Clark B. Thornton, Senior
Counsel; and Brent A. Cooper, District Attorney General, for the appellee, State of
Tennessee.
OPINION
I. Factual Background
In 1986, the appellant was charged with offenses in Giles County; after a change
of venue was granted, he was tried in Maury County and convicted of two counts of
aggravated assault, two counts of armed robbery, two counts of aggravated kidnapping,
one count of arson, one count of first degree burglary, and two counts of aggravated rape.
State v. Joe Clark Mitchell, No. 87-152-III, 1988 WL 32362, at *1 (Tenn. Crim. App. at
Nashville, Apr. 7, 1988). The trial court imposed four consecutive life sentences for the
aggravated kidnapping and the aggravated rape convictions; the remaining sentences
were to be served concurrently with the four consecutive life sentences. Id. On direct
appeal, this court modified one of the aggravated rape convictions to rape, and the
sentence was reduced to thirteen years. Id.
Since his convictions, the appellant has repeatedly pursued relief from his
convictions and sentences. His most recent attempt, which is the subject of the instant
appeal, is a motion to correct an illegal sentence pursuant to Tennessee Rule of Criminal
Procedure 36.1. In the motion, the appellant alleged that “the trial court in this case was
without jurisdiction to indict/convict and/or enter[] sentence . . . thus rendering the
judgments of conviction illegal and void.” The appellant argued that because the
Twenty-second Judicial District encompassed Giles, Lawrence, Maury, and Wayne
Counties, the trial court was required to select members of the grand jury and the petit
jury from all four counties. The appellant also alleged that the trial court erred by finding
the appellant to be both an especially aggravated offender and a persistent offender and
by failing to include the release eligibility percentage on the judgment as required by
Tennessee Code Annotated section 40-35-501.1 Finally, the appellant alleged that the
trial court erroneously sentenced him as a persistent offender in contravention of
Tennessee Code Annotated section 40-35-106(a)(1) (1982).2
The trial court entered an order summarily dismissing the motion, holding that the
appellant‟s claims regarding the trial court‟s jurisdiction and sentencing were without
merit. On appeal, the appellant challenges this ruling.
II. Analysis
1
Tennessee Code Annotated section 40-35-501 (1982) provided the release eligibility percentages for
especially mitigated, standard, multiple, and persistent offenders. Additionally, the statute provided that
“[t]he release eligibility date provided for herein shall be separately calculated for each offense for which
a defendant is convicted.” Tenn. Code Ann. ' 40-35-501(g) (1982).
2
At the time of the appellant‟s convictions, Tennessee Code Annotated section 40-35-106 (1982)
provided that for determination of sentencing ranges:
(a) A “persistent offender” is a defendant who has received:
(1) Two (2) or more prior felony convictions for offenses committed
within five (5) years immediately preceding the commission of the
instant offense; or
(2) Four (4) or more prior felony convictions for offenses committed
within ten (10) years immediately preceding the commission of the
instant offense.
-2-
First, the appellant contends that the grand jury that indicted him was chosen
solely from citizens of Giles County, not from all of the counties comprising the Twenty-
second Judicial District. He maintains that selecting a jury from a single county within a
judicial district, instead of from the district as a whole, violates Tennessee Code
Annotated sections 16-2-506 and 16-2-510(c) and thereby deprives the trial court of
jurisdiction and renders the indictment and resulting convictions and sentences void.
Tennessee Code Annotated section 16-2-501(a), which was enacted in 1984,
explained that the purpose of the legislation was “to reorganize the existing trial court
system of this state in such a way that its growth occurs in a logical and orderly manner.”
Within Part 5, the legislature created thirty-one judicial districts. Tenn. Code Ann. ' 16-
2-506. The Twenty-second Judicial District was comprised of Giles, Lawrence, Maury,
and Wayne Counties. Tenn. Code Ann. ' 16-2-506(19)(A)(1)(i).
The appellant contends the establishment of judicial districts “stripped original
jurisdiction from the County courts [and] in the same stroke abolished and outlawed the
operation of County juries, (grand or petit) and replaced them with „District juries and
District Criminal/Circuit Courts . . . .‟”
Historically, “two distinct procedural avenues [were] available to collaterally
attack a final judgment in a criminal case - habeas corpus and post-conviction petitions.”
Hickman v. State, 153 S.W.3d 16, 19 (Tenn. 2004); see also State v. Donald Terrell, No.
W2014-00340-CCA-R3-CO, 2014 WL 6883706, at *2 (Tenn. Crim. App. at Jackson,
Dec. 8, 2014). However, effective July 1, 2013, the Tennessee Rules of Criminal
Procedure were amended by the addition of Rule 36.1, which provides, in part:
Either the appellant or the state may, at any time, seek the
correction of an illegal sentence by filing a motion to correct
an illegal sentence in the trial court in which the judgment of
conviction was entered. For purposes of this rule, an illegal
sentence is one that is not authorized by the applicable
statutes or that directly contravenes an applicable statute.
Tenn. R. Crim. P. 36(a); see Secdrick L. Booker v. State, No. M2014-00846-CCA-R3-
CD, 2014 WL 7191041, at *2 (Tenn. Crim. App. at Nashville, Dec. 18, 2014). If the
motion states a “colorable claim that the sentence is illegal,” the trial court shall appoint
counsel and hold a hearing on the motion. See Tenn. R. Crim. P. 36.1(b). “A sentence is
not illegal when it is „statutorily available but ordinarily inapplicable to a given
defendant‟; rather, an illegal sentence is one that is „simply unavailable under the
Sentencing Act.‟” State v. Adrian R. Brown, No. E2014-00673-CCA-R3-CD, 2014 WL
-3-
5483011, at *3 (Tenn. Crim. App. at Knoxville, Oct. 29, 2014) (quoting Cantrell v.
Easterling, 346 S.W.3d 445, 454 (Tenn. 2011)), application for perm. to appeal filed,
(Mar. 16, 2015).
Although Rule 36.1 does not define what constitutes a “colorable claim,” this
court has adopted the following definition: “[a] colorable claim is a claim . . . that, if
taken as true, in the light most favorable to the [appellant], would entitle [the appellant]
to relief.” State v. David Morrow, No. W2014-00338-CCA-R3-CO, 2014 WL 3954071,
at *2 (Tenn. Crim. App. at Jackson, Aug. 13, 2014) (internal quotation marks and citation
omitted). The requirements for a Rule 36.1 motion are more lenient than for a habeas
corpus petition; notably, in a Rule 36.1 motion, a defendant is required only to state a
colorable claim in his motion but is not required to attach supporting documents in order
to survive summary dismissal, and the motion may be filed “at any time.” See State v.
Sean Blake, No. W2014-00856-CCA-R3-CO, 2015 WL 112801, at *2 (Tenn. Crim. App.
at Jackson, Jan. 8, 2015); State v. John Talley, No. E2014-01313-CCA-R3-CD, 2014 WL
7366257, at *2 (Tenn. Crim. App. at Knoxville, Dec. 26, 2014).
The appellant‟s complaints, however, do not constitute a colorable claim for relief
under Rule 36.1. This court has explained that
Rule 36.1 provides an avenue for pursuing the correction of
illegal sentences, defined by the Rule as a sentence „not
authorized by the applicable statutes‟ or a sentence „that
directly contravenes an applicable statute.‟ Thus, the Rule is
directed at the sentence finally imposed, not the methodology
by which it is imposed.
State v. Jonathan T. Deal, No. E2013-02623-CCA-R3-CD, 2014 WL 2802910, at *2
(Tenn. Crim. App. at Knoxville, June 17, 2014) (citations omitted). In other words, Rule
36.1 provides “an avenue for correcting allegedly illegal sentences. The Rule does not
provide an avenue for seeking the reversal of convictions.” State v. Jimmy Wayne
Wilson, No. E2013-02354-CCA-R3-CD, 2014 WL 1285622, at *2 (Tenn. Crim. App. at
Knoxville, Mar. 31, 2014) (citing Cantrell v. Easterling, 346 S.W.3d 445, 455-56 (Tenn.
2011)), perm. to appeal denied, (Tenn. Nov. 19, 2014). The appellant‟s challenge to the
process of choosing members of grand juries or petit juries, even if taken as true, would
affect his convictions, not his sentences. Accordingly, the appellant is not entitled to
relief on this basis.
Next, the appellant alleges that the trial court erred by finding that the appellant
was subject to sentencing ranges for both an especially aggravated offender and a
persistent offender and by failing to “pronounce judgment on the percentage” as required
-4-
by Tennessee Code Annotated section 40-35-501. The appellant also alleges that the trial
court‟s finding that he was a persistent offender for the purpose of sentencing ranges was
based upon an incorrect interpretation of Tennessee Code Annotated section 40-35-
106(a)(1).
The record belies the appellant‟s contentions. The trial court determined the
appellant‟s sentencing range based upon the finding that the appellant was a Range II,
especially aggravated offender, and the judgments of conviction clearly reflect the
appellant‟s designation as an especially aggravated offender. The trial court‟s finding
that the appellant was a persistent offender was for the purpose of consecutive
sentencing, not for the purpose of determining his sentencing range. Further, the failure
to pronounce judgment on release eligibility percentages does not entitle the appellant to
relief; the appellant‟s release eligibility was determined by statute. Tenn. Code Ann. '
40-35-501(e) (1982). Regardless, the appellant‟s claim is not one that falls under the
auspices of Rule 36.1. State v. Robert B. Ledford, No. E2014-01010-CCA-R3-CD, 2015
WL 757807, at *2 (Tenn. Crim. App. at Knoxville, Feb. 23, 2015) (stating that a trial
court‟s error in offender classification will generally not render the sentence illegal).
Accordingly, the appellant is not entitled to relief in this regard.
III. Conclusion
Finding no error, we conclude that the trial court did not err by dismissing the
appellant‟s motion to correct an illegal sentence.
_________________________________
NORMA McGEE OGLE, JUDGE
-5-
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622 F.Supp. 877 (1985)
Joseph P. CONNORS, Sr., et al., Plaintiffs,
v.
CALVERT DEVELOPMENT COMPANY, et al., Defendants.
Civ. A. No. 84-986.
United States District Court, District of Columbia.
November 25, 1985.
*878 Rodney F. Page, David T. Dekker, Washington, D.C., for plaintiffs.
William H. Howe, Richard A. Steyer, Richard B. Fellows, Jr., Washington, D.C., for defendants.
OPINION
JUNE L. GREEN, District Judge.
This is an action to collect withdrawal liability under the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. § 1001 et seq. (1982). Presently before the Court is a motion by plaintiffs to compel interim payment of withdrawal liability. For the reasons stated herein, the Court grants plaintiffs' motion.[1]
I. Statement of Facts
Plaintiffs are the Trustees of the United Mine Workers of America ("UMWA") 1950 Pension Plan and the UMWA 1974 Pension Plan ("Plans"). The plaintiffs allege that the defendants, two West Virginia corporations, a partnership, and the former individual members in the partnership, are liable to the Plans for withdrawal liability assessed against one of the corporations.
The defendant corporations are Calvert Development Company ("Calvert") and C.C. & L. Coal Company ("C.C. & L."), both of which were engaged in the contract mining business. Calvert contributed to the Plans as a signatory to the National Bituminous Coal Wage Agreement of 1978 and 1981 ("Agreements"). Defendant C.A.M. Associates ("C.A.M.") was a West Virginia partnership of Retha Calvert, Vincent M. Calvert, Jr., Daniel K. Calvert, John Morgan, Thomas Canterbury, and Kermit Alley ("individual defendants"). Defendant Pauline Alley is the Executrix of the Estate of Kermit Alley. Neither C.C. & L. nor C.A.M. was signatory to the National Bituminous Coal Wage Agreements.
The individual defendants were the officers and controlling shareholders of Calvert and C.C. & L. Affidavit of Daniel K. Calvert ¶¶ 15(a), 16(a). "The individual defendants are all former partners in C.A.M., ... which was part of a commonly controlled group of businesses which included Calvert Development." Defendants' Opposition to Plaintiffs' Motion to Compel Interim Payment of Withdrawal Liability ("Defendants' Opposition") at 4-5.
Pursuant to its obligations under the terms of the Agreements, Calvert was a participating employer in the Plans and was obligated to and did make contributions to the Plans on behalf of its employees covered under the Agreements. Calvert ceased to be a participating employer in the Plans on or about December 23, 1981. As a result, Calvert withdrew from the Plans in a complete withdrawal as that *879 term is defined in section 4203(a) of ERISA, 29 U.S.C. § 1383(a).[2]
Pursuant to Sections 1382(2) and 1399(b)(1), the Trustees notified Calvert of the amount of its withdrawal liability. By letter dated June 16, 1983, the Trustees determined that Calvert incurred withdrawal liability to the 1950 Plan in the amount of $101,647.16. Similarly, on June 20, 1983, the Trustees wrote to Calvert notifying it of withdrawal liability to the 1974 Plan in the amount of $52,096.80. Both letters included schedules determined by the Trustees according to which Calvert was to discharge its liability payments.
Calvert has failed to make any withdrawal payments to the 1950 Plan or the 1974 Plan. In addition, Calvert never requested review of the Trustees' withdrawal liability assessments within the time period required by Section 1399(b)(2)(A), and failed to initiate arbitration within the time period required by Section 1401(a)(1). The Trustees then made a second demand for payment on September 19, 1983, to which Calvert did not respond.
On March 29, 1984, the Trustees filed suit against Calvert and other defendants, seeking enforcement of their assessment of withdrawal liability against Calvert, alleging that Calvert is in default under Section 1399(c)(5). On July 9, 1985, the Trustees were granted leave by the Court to file an amended complaint which named as a defendant Pauline Alley as the Executrix of the Estate of Kermit Alley. The Trustees now move to compel defendants to make interim payments under Sections 1399(c)(2), (c)(3), (c)(5), and 1401(b)(1). The Trustees seek to have the defendants pay $153,743.96 in withdrawal liability, plus $36,126.29 in accrued interest as of September 24, 1985, continuing at $42.13 per day until payment is made.
It appears that Calvert and C.C. & L. are without assets and unable to pay any withdrawal liability. Affidavits of Vince and Daniel K. Calvert at ¶¶ 13, 14(f). The issue in this case, then, is whether the individual partners in C.A.M., which was part of a common control group that included a withdrawing employer, may be held responsible in default for the withdrawal liability of the withdrawing employer.
II. Conclusions of Law
Section 1399(c)(2) provides:
Withdrawal liability shall be payable in accordance with the schedule set forth by the plan sponsor under subsection (b)(1) beginning no later than 60 days after the date of the demand notwithstanding any request for review or appeal of determinations of the amount of such liability or of the schedule.
Where an employer initiates arbitration of the decision on review, Section 1401(d) provides that:
Payments shall be made by an employer in accordance with the determinations made under this part until the arbitrator issues a final decision with respect to the determination submitted for arbitration, with any necessary adjustments in subsequent payments or overpayments or underpayments arising out of the decision of the arbitrator with respect to the determination.
The law is clear that withdrawal liability payments must be made by an employer according to the plan's schedule even if the employer disputes the liability. The importance of providing plan trustees with an efficient procedure to insure continued funding upon an employer's withdrawal is noted clearly at Section 1399(c)(2). A dispute over withdrawal liability does not suspend the obligation to pay, but, rather, such payment is due "notwithstanding any request for review or appeal of determinations of such liability or of the schedule." The courts have supported unequivocally this interpretation of the employer's obligation to make withdrawal liability payments. Combs v. Miss-Ala Electrical Contractors, Inc., No. 85-604, slip op. (D.D.C. Apr. 18, 1985); Thomas v. Southland Corp., 603 F.Supp. 1088 (N.D.Ill.1985); *880 Trustees of the Retirement Fund of the Fur Mfg. Industry v. Lazar-Wisotsky, 550 F.Supp. 35 (S.D.N.Y.1982), aff'd 738 F.2d 419 (2d Cir.1984).
In order to collect withdrawal liability, a plan must notify an employer of the amount of withdrawal liability, supply the employer with a schedule of payments, and demand payment. Section 1399(b)(1). Once the demand is made, the employer is to begin paying withdrawal liability. Although any dispute concerning the amount of withdrawal liability does not obviate the obligation to make interim payments, the language of Section 1399 is clear that no such obligation exists until sixty days after demand for payment. Section 1399(c)(2).
A plan may demand full payment of all withdrawal liability if the employer is in "default." Section 1399(c)(5). A "default" occurs when the employer does not make withdrawal liability payments to the plan and does not respond to "written notification" from the plan that the payments are due. Section 1399(c)(5)(A).
Defendants argue that under these provisions, the only defendant that could be in default is Calvert because only Calvert had an obligation to make interim payments, and only Calvert received notice of default from the Trustees. Defendants' Opposition at 8-9. Since separate notice and demand for payment of withdrawal liability was not made on all the members of the control group (i.e., defendants C.C. & L., C.A.M., and individual defendants), defendants maintain that C.C. & L., C.A.M., and the individual defendants cannot be in default nor under any obligation to make interim payments.
Defendants contend that Section 1399 should be read to require that each entity, or company, of a group of businesses in common control with the employer must be afforded the statutory rights concerning notice, collection, and resolution of disputes. In other words, one entity of a commonly controlled group should not be held liable for the withdrawal payments owed by a sister entity unless the procedural rights of Section 1399 are afforded both entities.
Specifically, defendants argue that the term "employer," as it is used in Section 1399, should be read to require notice to all entities which a plan intends to hold responsible for payment of withdrawal liability. This interpretation, so defendants contend, would be "[i]n keeping with the intended purpose of the review procedures to assure all parties a fair interpretation...." Defendants' Opposition at 10.
The Court is well aware of Congress's concern that all parties be afforded a fair determination in withdrawal liability cases. See 1980 U.S.Code Cong. & Ad.News 2952-53. Yet, Congress also endeavored to define carefully the term "employer" as that term appears throughout ERISA and MPPAA. For purposes of ERISA, an "employer" means "any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan; and includes a group or association of employers acting for an employer in such capacity." Section 1002(5). That definition is supplemented by Section 1301(b)(1), which provides:
For purposes of this subchapter [subchapter III], under regulations prescribed by the corporation [Pension Benefit Guarantee Corporation (PBGC)], all employees of the trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer and all such trades and businesses as a single employer. The regulations prescribed under the preceding sentence shall be consistent and co-extensive with regulations prescribed for similar purposes by the Secretary of the Treasury under § 414(c) of Title 26.
The PBGC regulation promulgated pursuant to this section, 29 C.F.R. § 2612, incorporates by reference the provisions of section 414(c) of the Internal Revenue Code of 1954 and the regulations issued thereunder. Section 414(c) states, in relevant part, "[A]ll employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer."
*881 The Treasury Regulation issued under 26 U.S.C. § 414(c) provides a detailed characterization of the "control group" concept:
The term "brother-sister group of trades or businesses under common control" means two or more organizations [the term "organization" means, inter alia, a partnership or a corporation] conducting trades or businesses, if (i) the same five or fewer persons who are individuals ... own ... singly or in combination, a controlling interest of each organization, and (ii) taking into account the ownership of each such person only to the extent such ownership is identical with respect to each such organization, such persons are in effective control of each organization.
Temp.Treas.Reg. § 11.414(c)-2(c). "Controlling interest" for purposes of the regulation is defined to mean ownership of at least 80 percent of the stock of a corporation or profits or capital interest of a partnership. Temp.Treas.Reg. § 11.414(c)-2(b)(2). Persons are in "effective control" of an organization if
(i) In the case of ... a corporation, such persons own stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to vote ... or more than 50 percent of the total value of shares of all classes of stock....
(iii) In the case of ... a partnership, such persons own an aggregate of more than 50 percent of the profits interest or capital interest....
Temp.Treas.Reg. § 11-414(c)-2(c)(2).
Calvert, C.C. & L., and C.A.M. were owned as set forth below:
NAME CALVERT C.A.M. C. C. & L.
Retha Calvert 21.74% 21.74% 20%
Vince Calvert, Jr. 21.74% 21.74% 20%
John Morgan 21.74% 21.74% 20%
Kermit Alley 21.74% 21.74% 20%
Daniel Calvert 8.70% 8.70% 10%
Tom Canterbury, Esq. 4.34% 4.34% 10%
________ _______ ____
Total 100% 100% 100%
Affidavits of Retha Calvert, Vince Calvert, Jr., Daniel Calvert, John Morgan, and Tom Canterbury, Esq. Thus it is clear that C.C. & L., Calvert, and C.A.M. were under common control for purposes of ERISA. All members of a commonly controlled group are treated as one employer and, accordingly, each member is jointly and severally liable for payment of withdrawal liability. Section 1301(b)(1); Pension Benefit Guaranty Corporation v. Ouimet Corporation, 630 F.2d 4, 11 (1st Cir.1980).
The requirement that members of a controlled group, such as defendants, be treated as a single employer means that plan trustees can operate as if defendants were one entity. In this respect, the preamble to the regulation, entitled "Notice and Collection of Withdrawal Liability," 49 Fed.Reg. 22,642, 22,644 (May 31, 1984) (codified at 29 C.F.R. § 2644), states:
[U]nder ERISA there is a unity of interest in the case of a controlled group of corporations, since the entire group is considered to be a single employer for withdrawal liability and other purposes. Therefore, PBGC believes that a notice of default sent to the contributing entity which is a member of a controlled group of corporations, within the meaning of Section 4001(b)(1) [29 U.S.C. § 1301(b)(1)], constitutes constructive notice to the other members of the same controlled group. Thus, PBGC finds that Section 4219(c)(5)(A) [29 U.S.C. 1399(c)(5)(A)] does not require notice to the other members of a controlled group.
The Court finds this reasoning consistent with the legislative history of the MPPAA. Senator Williams, one of the principal sponsors of both ERISA and MPPAA stated:
Under current law, a group of trades or businesses under common control, whether or not incorporated, is treated as a single employer for purposes of employer liability under Title IV. Thus, if a terminating single employer plan is maintained by one or more members of a controlled group, the entire group is the "employer" and is responsible for any employer liability.
126 Cong.Rec. S11672 (daily ed. Aug. 26, 1980).
It is clear that notice and demand to one is notice and demand to all. Defendants' position that Section 1301(b)(1) should read to mean that all entities of the common control group be afforded the same procedural rights as the withdrawn employer *882 must fail. Indeed, such an interpretation would void that section of any significance. The notice and demand of withdrawal liability served upon Calvert by the Trustees also was sufficient as to C.A.M., C.C. & L., and the individual defendants. It is immaterial that at the time notice and demand was made, Calvert was without assets and unable to pay withdrawal liability. Affidavit of Vincent M. Calvert, Jr. ¶ 14(f). In enacting Section 1301(b)(1), Congress intended to prevent such evasion of ERISA through the abuse of the structural formalities of overlapping business organizations. See, e.g., Pension Benefit Guaranty Corporation v. Anthony Co., 537 F.Supp. 1048, 1052 n. 6 (N.D.Ill.1982) (Sections 1301(b)(1) and 1362 reflect "congressional concern that the realities of business organizations should prevail over the formalities of corporate structure in imposing liability....")
The defendants are in default pursuant to Section 1399(c)(5)(A), and, therefore, must make "immediate payment of the outstanding amount of [the] employer's liability. ..." Section 1399(c)(5).
NOTES
[1] Pursuant to United States District Court Rules District of Columbia, Rule 1-9(g) (1984), an oral hearing in this matter was not granted.
[2] This opinion will cite to Title 29 (in the form "Section ____"), rather than to ERISA's internal numbering.
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410 F.2d 1143
Thelma MKWANAZI, Francesca Madera, Beatrice Downey, Nestor Towsett, Elena Velasquez, Cosmo Musolino, Joseph Piegari, Salvatore Tremoto, Margaret Cambareri, Robert Gaus, J. Frank Lucas and John Urgo, Plaintiffs-Appellants,v.KENRAY ASSOCIATES, INC., Defendant and Third-Party Plaintiff-Appellee,v.The CITY OF NEW YORK, and Jason R. Nathan, Administrator City of New York, Housing and Development Administration and Frederic S. Berman, Commissioner Department of Rent and Housing Maintenance, City of New York, Third-Party Defendants.
No. 570.
Docket 33151.
United States Court of Appeals Second Circuit.
Argued March 28, 1969.
Decided May 16, 1969.
Martin A. Schwartz, Jonathan Weiss, Harold J. Rothwax, Lester Evens, New York City, for appellants.
Joseph Gaier, Martin A. Luster, Luster, Gaier & Luster, New York City, for appellee.
Before WATERMAN, MOORE and FRIENDLY, Circuit Judges.
PER CURIAM:
1
While the within appeal was sub judice the court has been informed that the subject matter before the court for adjudication has been disposed of within the administrative process inasmuch as after full consideration the Rent and Rehabilitation Administration of the City of New York has issued binding findings on rent levels and so any need for injunctive relief against the landlord's attempts to evict plaintiffs has become moot. Under these circumstances no costs shall be awarded against appellants.
2
Appeal dismissed as moot.
FRIENDLY, Circuit Judge (concurring):
3
What happened here was that the district office of the New York City Rent Administration had issued orders greatly increasing the rents of appellants. They filed a protest with the main office under § Y51-8.0 of the Rent & Rehabilitation Law. Because such a protest does not work a stay, Rent & Eviction Regulations § 101a, the tenants brought this action under the Civil Rights Act, 42 U.S.C. § 1983, to enjoin the institution of summary proceedings looking to their eviction for failure to pay the increased rents on the ground that the procedure followed by the district office had not accorded them due process. While this appeal from a dismissal of the complaint was sub judice, the main office of the City Rent Agency decided the protest. The decision was largely favorable to the tenants; in any event they have never claimed that the protest procedure, as distinguished from that in the district offices, failed to accord due process. The appeal is thus properly dismissed as moot.
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442 U.S. 95 (1979)
GREEN
v.
GEORGIA.
No. 78-5944.
Supreme Court of United States.
Decided May 29, 1979.
ON PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF GEORGIA.
PER CURIAM.
Petitioner and Carzell Moore were indicted together for the rape and murder of Teresa Carol Allen. Moore was tried separately, was convicted of both crimes, and has been sentenced to death. See Moore v. State, 240 Ga. 807, 243 S. E. 2d 1, cert. denied, 439 U. S. 903 (1978). Petitioner subsequently was convicted of murder, and also received a capital sentence. The Supreme Court of Georgia upheld the conviction and sentence, 242 Ga. 261, 249 S. E. 2d 1 (1978), and *96 petitioner has sought review of so much of the judgment as affirmed the capital sentence. We grant the motion for leave to proceed in forma pauperis and the petition for certiorari and vacate the sentence.
The evidence at trial tended to show that petitioner and Moore abducted Allen from the store where she was working alone and, acting either in concert or separately, raped and murdered her. After the jury determined that petitioner was guilty of murder, a second trial was held to decide whether capital punishment would be imposed. See Ga. Code § 27-2503 (1978). At this second proceeding, petitioner sought to prove he was not present when Allen was killed and had not participated in her death. He attempted to introduce the testimony of Thomas Pasby, who had testified for the State at Moore's trial. According to Pasby, Moore had confided to him that he had killed Allen, shooting her twice after ordering petitioner to run an errand. The trial court refused to allow introduction of this evidence, ruling that Pasby's testimony constituted hearsay that was inadmissible under Ga. Code § 38-301 (1978).[1] The State then argued to the jury that in the absence of direct evidence as to the circumstances of the crime, it could infer that petitioner participated directly in Allen's murder from the fact that more than one bullet was fired into her body.[2]
*97 Regardless of whether the proffered testimony comes within Georgia's hearsay rule, under the facts of this case its exclusion constituted a violation of the Due Process Clause of the Fourteenth Amendment. The excluded testimony was highly relevant to a critical issue in the punishment phase of the trial, see Lockett v. Ohio, 438 U. S. 586, 604-605 (1978) (plurality opinion); id., at 613-616 (opinion of BLACKMUN, J.), and substantial reasons existed to assume its reliability. Moore made his statement spontaneously to a close friend. The evidence corroborating the confession was ample, and indeed sufficient to procure a conviction of Moore and a capital sentence. The statement was against interest, and there was no reason to believe that Moore had any ulterior motive in making it. Perhaps most important, the State considered the testimony sufficiently reliable to use it against Moore, and to base a sentence of death upon it.[3] In these unique circumstances, "the hearsay rule may not be applied mechanistically to defeat the ends of justice." Chambers v. Mississippi, 410 U. S. 284, 302 (1973).[4] Because the exclusion of Pasby's testimony denied petitioner a fair trial on the issue of punishment, the sentence is vacated and the case is remanded for further proceedings not inconsistent with this opinion.
Reversed and remanded.
MR. JUSTICE BRENNAN and MR. JUSTICE MARSHALL, adhering to their view that the death penalty is in all circumstances *98 cruel and unusual punishment prohibited by the Eighth and Fourteenth Amendments, Gregg v. Georgia, 428 U. S. 153, 227, 231 (1976), would vacate the death sentence without remanding for further proceedings.
MR. JUSTICE REHNQUIST, dissenting.
The Court today takes another step toward embalming the law of evidence in the Due Process Clause of the Fourteenth Amendment to the United States Constitution. I think it impossible to find any justification in the Constitution for today's ruling, and take comfort only from the fact that since this is a capital case, it is perhaps an example of the maxim that "hard cases make bad law."
The Georgia trial court refused to allow in evidence certain testimony at petitioner's sentencing trial on the ground that it constituted inadmissible hearsay under Ga. Code § 38-301 (1978). This Court does not, and could not, dispute the propriety of that ruling. Instead, it marshals a number of ad hoc reasons why Georgia should adopt a code of evidence that would allow this particular testimony to be admitted, and concludes that "[i]n these unique circumstances, `the hearsay rule may not be applied mechanistically to defeat the ends of justice.'" Ante, at 97.
Nothing in the United States Constitution gives this Court any authority to supersede a State's code of evidence because its application in a particular situation would defeat what this Court conceives to be "the ends of justice." The Court does not disagree that the testimony at issue is hearsay or that it fails to come within any of the exceptions to the hearsay rule provided by Georgia's rules of evidence. The Court obviously is troubled by the fact that the same testimony was admissible at the separate trial of petitioner's codefendant at the behest of the State. But this fact by no means demonstrates that the Georgia courts have not evenhandedly applied their code of evidence, with its various hearsay exceptions, so as to deny *99 petitioner a fair trial. No practicing lawyer can have failed to note that Georgia's evidentiary rules, like those of every other State and of the United States, are such that certain items of evidence may be introduced by one party, but not by another. This is a fact of trial life, embodied throughout the hearsay rule and its exceptions. This being the case, the United States Constitution must be strained to or beyond the breaking point to conclude that all capital defendants who are unable to introduce all of the evidence which they seek to admit are denied a fair trial. I therefore dissent from the vacation of petitioner's sentence.
NOTES
[1] Georgia recognizes an exception to the hearsay rule for declarations against pecuniary interest, but not for declarations against penal interest. See 242 Ga. 261, 269-272, 249 S. E. 2d 1, 8-9 (1978), quoting Little v. Stynchcombe, 227 Ga. 311, 180 S. E. 2d 541 (1971).
[2] The District Attorney stated to the jury:
"We couldn't possibly bring any evidence other than the circumstantial evidence and the direct evidence that we had pointing to who did it, and I think it's especially significant for you to remember what Dr. Dawson said in this case. When the first shot, in his medical opinion, he stated that Miss Allen had positive blood pressure when both shots were fired but I don't know whether Carzell Moore fired the first shot and handed the gun to Roosevelt Green and he fired the second shot or whether it was vice versa or whether Roosevelt Green had the gun and fired the shot or Carzell Moore had the gun and fired the first shot or the second, but I think it can be reasonably stated that you Ladies and Gentlemen can believe that each one of them fired the shots so that they would be as equally involved and one did not exceed the other's part in the commission of this crime." Pet. for Cert. 10.
[3] A confession to a crime is not considered hearsay under Georgia law when admitted against a declarant. Ga. Code § 38-414 (1978); Green v. State, 115 Ga. App. 685, 155 S. E. 2d 655 (1967).
[4] See Westen, Confrontation and Compulsory Process: A Unified Theory of Evidence for Criminal Cases, 91 Harv. L. Rev. 567, 592-593 (1978).
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513 F.2d 626
Vitco, Inc.v.Government of Virgin Islands
74-1970
UNITED STATES COURT OF APPEALS Third Circuit
4/30/75
1
D.V.I.
AFFIRMED
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Electronically Filed
Supreme Court
SCAD-11-0000162
08-FEB-2012
SCAD-11-0000162
03:52 PM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
OFFICE OF DISCIPLINARY COUNSEL, Petitioner,
vs.
EARLE A. PARTINGTON, Respondent.
ORIGINAL PROCEEDING
(ODC 10-079-8913)
ORDER DENYING REINSTATEMENT
(By: Recktenwald, C.J., Nakayama, Duffy, and McKenna, JJ.,
and Intermediate Court of Appeals Chief Judge Nakamura,
in place of Acoba, J., recused)
Upon consideration of Respondent Earle A. Partington’s
January 31, 2012 affidavit and the record, it appears that
Respondent Partington’s affidavit does not comply with Rule
2.17(b) of the Rules of the Supreme Court of the State of Hawai#i
(RSCH) (to wit, that an attorney suspended for one year or less
aver, for the period of suspension, that he “has complied with
the suspension order . . . .”). Therefore,
IT IS HEREBY ORDERED that Respondent Partington’s
reinstatement is denied, without prejudice to the filing of an
affidavit complying with RSCH Rule 2.17(b).
DATED: Honolulu, Hawai#i, February 8, 2012.
/s/ Mark E. Recktenwald
/s/ Paula A. Nakayama
/s/ James E. Duffy, Jr.
/s/ Sabrina S. McKenna
/S/ Craig H. Nakamura
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17-994-ag
Hamer v. Sessions
BIA
Videla, IJ
A036 358 692
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT
ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
25th day of May, two thousand eighteen.
PRESENT:
BARRINGTON D. PARKER,
DEBRA ANN LIVINGSTON,
DENNY CHIN,
Circuit Judges.
_____________________________________
ORRIN S. HAMER, AKA ORIN HAMER, AKA ORIN S.
HAMER,
Petitioner,
v. 17-994-ag
JEFFERSON B. SESSIONS III,
UNITED STATES ATTORNEY GENERAL,
Respondent.
_____________________________________
For Petitioner: CRAIG RELLES, Law Office of Craig Relles, White
Plains, New York.
For Respondent: KATHARINE E. CLARK (Nancy K. Canter, on the brief),
for Shelley R. Goad, Assistant Director, Office of
Immigration Litigation, Chad A. Readler, Acting
Assistant Attorney General, United States Department
of Justice, Washington, District of Columbia.
Petition for review of a March 9, 2017 Board of Immigration Appeals (“BIA”) decision
dismissing Petitioner’s appeal of a December 11, 2015 decision of an Immigration Judge (“IJ”)
denying Petitioner’s motion to terminate removal proceedings and ordering his removal.
UPON DUE CONSIDERATION of this petition for review of a BIA decision, it is hereby
ORDERED, ADJUDGED, AND DECREED that the petition for review is DENIED.
Petitioner Orrin S. Hamer, a native and citizen of Guyana, seeks review of a March 9, 2017
decision of the BIA dismissing Hamer’s appeal of a December 11, 2015 decision of an IJ denying
Hamer’s motion to terminate removal proceedings and ordering his removal. In re Orrin S.
Hamer, No. A 036 358 692 (B.I.A. Mar. 9, 2017), aff’g No. A 036 358 692 (Immig. Ct. N.Y. City
Dec. 11, 2015). We assume the parties’ familiarity with the underlying facts, the procedural
history of the case, and the issues on appeal.
We have reviewed the decisions of both the IJ and BIA “for the sake of completeness.”
Wangchuck v. Dep’t of Homeland Sec., 448 F.3d 524, 528 (2d Cir. 2006). We review de novo
Hamer’s legal challenge to the agency’s denial of his motion to terminate removal proceedings.
See Perriello v. Napolitano, 579 F.3d 135, 138 (2d Cir. 2009). Hamer’s petition is denied because
his arguments are foreclosed by our decision in Perriello. Hamer relies on 8 C.F.R. § 1239.2(f),
which provides:
An immigration judge may terminate removal proceedings to permit the alien to
proceed to a final hearing on a pending application or petition for naturalization
when the alien has established prima facie eligibility for naturalization and the
matter involves exceptionally appealing or humanitarian factors; in every other
case, the removal hearing shall be completed as promptly as possible
notwithstanding the pendency of an application for naturalization during any state
of the proceedings.
But Perriello is explicit that changes made in 1990 to the statutory framework governing removal
2
and naturalization proceedings abrogated this regulation, at least in part, and preclude an alien
from doing what Hamer has done here: “apply for naturalization after removal proceedings have
commenced and then move for termination of removal proceedings.” 579 F.3d at 141; see also 8
U.S.C. § 1429 (providing that “no application for naturalization shall be considered by the
Attorney General if there is pending against the applicant a removal proceeding”). Because 8
U.S.C. § 1429 prohibits the agency from considering an alien’s naturalization application during
the pendency of a removal proceeding, it is “impossible for an alien to establish prima facie
eligibility for naturalization” by applying for naturalization during removal proceedings.
Perriello, 579 F.3d at 141. In sum, the agency cannot terminate removal proceedings for an alien,
such as Hamer, on the basis of the alien’s application for naturalization when that application was
made after the commencement of such removal proceedings. See id. at 141–42.
We have considered all of Hamer’s remaining arguments and find them to be without merit.
For the foregoing reasons, Hamer’s petition for review is DENIED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
3
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1 Opinions of the Colorado Supreme Court are available to the
2 public and can be accessed through the Judicial Branch’s homepage at
3 http://www.courts.state.co.us. Opinions are also posted on the
4 Colorado Bar Association’s homepage at http://www.cobar.org.
5
6 ADVANCE SHEET HEADNOTE
7 June 5, 2017
8
9 2017 CO 65
0
1 No. 17SA28, People v. Shoen—Fourth Amendment—Consensual Encounters.
2
3 In this case, the supreme court considers whether the defendant’s encounter with
4 police, during which he confessed to possessing a controlled substance, was consensual
5 or whether it constituted an impermissible seizure under the Fourth Amendment. We
6 conclude that under the totality of the circumstances the encounter was consensual.
7 Accordingly, we reverse the trial court’s order suppressing evidence from the
8 encounter, and we remand to that court for further proceedings consistent with this
9 opinion.
1
2
3 The Supreme Court of the State of Colorado
4 2 East 14th Avenue • Denver, Colorado 80203
5 2017 CO 65
6 Supreme Court Case No. 17SA28
7 Interlocutory Appeal from the District Court
8 Montrose County District Court Case No. 15CR351
9 Honorable Mary E. Deganhart, Judge
0 Plaintiff–Appellant:
1 The People of the State of Colorado,
2 v.
3 Defendant–Appellee:
4 Bernard James Shoen.
5 Order Reversed
6 en banc
7 June 5, 2017
8
9
0 Attorneys for Plaintiff–Appellant:
1 Dan Hotsenpiller, District Attorney, Seventh Judicial District
2 Kurt Beckenhauer, Deputy District Attorney
3 Montrose, Colorado
4
5 Attorneys for Defendant–Appellee:
6 Douglas K. Wilson, Public Defender
7 Zachary Martin, Deputy Public Defender
8 Montrose, Colorado
9
0
1
2
3
4 JUSTICE BOATRIGHT delivered the Opinion of the Court.
¶1 In this interlocutory appeal, the People ask us to consider whether the trial court
erred in suppressing evidence. Specifically, we must decide whether defendant
Bernard James Shoen’s encounter with police, during which he confessed to possessing
a controlled substance, was consensual or whether it constituted an impermissible
seizure under the Fourth Amendment. We conclude that the encounter was
consensual. Accordingly, we reverse the trial court’s order suppressing Shoen’s
statements and the evidence seized from his truck, and we remand to that court for
further proceedings consistent with this opinion.
I. Facts and Procedural History
¶2 Just after 1 a.m. on December 5, 2015, Sergeant Witte and Officer Trimble of the
Montrose Police Department were on patrol near a self-storage center. The officers saw
an open storage unit with a pickup truck parked in front, and they stopped to
investigate because there had recently been break-ins in the area. The officers parked
their patrol car a few units down from the open unit, shined a light on the truck, and
walked toward the open unit on foot.
¶3 Sergeant Witte then saw Shoen in the open storage unit, and asked whether he
and Officer Trimble could speak with him. Sergeant Witte informed Shoen that they
were the police and that he was not in trouble, but they had decided to stop and talk
after seeing the open storage unit because of the recent break-ins. Shoen agreed to talk
to the officers and said that the storage unit was his. The officers noticed that the
license plates on Shoen’s tuck were expired and ran Shoen’s plates and driver’s license.
They talked with Shoen while they waited, and the tone of the officers’ voices was
2
casual. The officers told Shoen that the license plates on his truck were expired, his
driver’s license was revoked, and his truck was not insured. They advised him that he
should not drive and should call someone to pick him up. Further, they told him that
they would impound his truck if he were to drive it.
¶4 Sergeant Witte then asked Shoen whether anything in his truck was stolen and
Shoen responded, “No, not as far as I know.” Sergeant Witte asked Shoen whether he
would mind pulling the tarp back that was covering his truck bed but clarified that
“you don’t have to.” Shoen immediately responded that he wouldn’t mind, stood up,
and pulled the tarp off the bed of his truck. After briefly examining the contents of the
truck bed, Sergeant Witte asked Shoen whether there were any drugs in the truck, and
Shoen responded that he had found a “rig” in the truck “the other day.” Sergeant Witte
then asked Shoen to stop wasting their time, do the right thing, and tell them what type
of drug was in the truck. The Sergeant asked if it was “dope” or methamphetamine and
asked how much methamphetamine was in the truck. Shoen then told the officers that
there was a “little bit” of methamphetamine in his truck. In response, the officers began
searching the cab of Shoen’s truck.1 Sergeant Witte asked where the methamphetamine
was, and Shoen directed the officers’ search of the cab to a box containing
methamphetamine. The officers found the methamphetamine approximately twenty-
1 The People do not contend that the officers had probable cause or reasonable
suspicion before Shoen’s admission. Shoen does not dispute that once he admitted to
possessing methamphetamine the officers had probable cause to conduct an
investigatory search of his truck.
3
five minutes after first approaching Shoen. They never touched Shoen nor directed his
movements in any way.
¶5 The People charged Shoen with possession of a controlled substance. In
response, Shoen sought to suppress both his admission and the evidence that the
officers discovered during their search of his truck. He argued that both were obtained
“from an illegal investigatory stop” in violation of his Fourth Amendment rights. The
People responded that the evidence was admissible because the officers’ encounter with
Shoen was consensual, Shoen’s statements were voluntary, and their search was
supported by probable cause arising from Shoen’s admission that he had drugs in the
truck.
¶6 The trial court granted Shoen’s motion, concluding that although the initial
encounter was consensual, Sergeant Witte’s continued questioning after he advised
Shoen not to drive became increasingly coercive and converted the consensual
encounter into an impermissible seizure. The court reasoned that the circumstances
surrounding Shoen’s confession indicated that a reasonable person would have
believed that he was not free to leave if he did not respond to the officers’ questions,
and thus, the encounter was no longer voluntary after the officers advised Shoen not to
drive. Therefore, the court concluded that all evidence obtained after the officers
continued to question Shoen after advising him not to drive was fruit of the poisonous
4
tree and had to be suppressed. Hence, the trial court suppressed both Shoen’s
statements about possessing the drugs and the drugs themselves.2
¶7 We now consider the People’s interlocutory appeal challenging the trial court’s
suppression order.
II. Standard of Review and Applicable Law
¶8 Our review of a trial court’s ruling on a motion to suppress presents a mixed
question of fact and law. People v. Gothard, 185 P.3d 180, 183 (Colo. 2008). We defer to
the trial court’s factual findings if those findings are supported by competent evidence
in the record; however, we review the trial court’s legal conclusions de novo. Id.
¶9 The Fourth Amendment to the United States Constitution protects persons
against unreasonable searches and seizures. U.S. Const. amends. IV, XIV. The Fourth
Amendment does not prohibit all contact between police and citizens but is instead
designed “to prevent arbitrary and oppressive interference . . . with the privacy and
personal security of individuals.” I.N.S. v. Delgado, 466 U.S. 210, 215 (1984) (quoting
United States v. Martinez–Fuerte, 428 U.S. 543, 554 (1976)). “Only when [an] officer, by
means of physical force or show of authority, has restrained the liberty of a citizen may
we conclude that a ‘seizure’ has occurred.” Id. (quoting Terry v. Ohio, 392 U.S. 1, 19
n.16 (1968)). A seizure implicates constitutional protections and, therefore, must be
justified by either probable cause (if the seizure is an arrest) or reasonable articulable
2Pursuant to C.A.R. 4.1, the People certified that this appeal was not taken for the
purposes of delay and that the suppressed statements and evidence are material to
proving the charges against Shoen.
5
suspicion of criminal activity (if the seizure is an investigatory stop). People v. Paynter,
955 P.2d 68, 72 (Colo. 1998).
¶10 But when police use non-coercive tactics to elicit the cooperation of a citizen, the
encounter is consensual so long as a reasonable person in that citizen’s position would
feel free to leave. See id. at 73. Consensual encounters between police and citizens do
not implicate Fourth Amendment protections because if a reasonable person would feel
free to leave, there has been no intrusion on liberty or privacy. See United States v.
Mendenhall, 446 U.S. 544, 554 (1980); People v. Marujo, 192 P.3d 1003, 1006–07 (Colo.
2008); People v. Thomas, 839 P.2d 1174, 1177–78 (Colo. 1992). However, a consensual
encounter can be transformed into a seizure within the meaning of the Fourth
Amendment if, in view of all the surrounding circumstances, a reasonable person
would have believed that he was not free to leave or decline the officer’s requests.
Delgado, 466 U.S. at 215; Marujo, 192 P.3d at 1007.
¶11 “[A] court must consider the totality of the circumstances to determine whether
the police exercised force or authority to effect a stop, or whether the police merely
sought the voluntary cooperation of a citizen through a consensual encounter.”
Paynter, 955 P.2d at 73. As the Supreme Court explained in Mendenhall, circumstances
such as “the threatening presence of several officers, the display of a weapon by an
officer, some physical touching of the person of the citizen, or the use of language or
tone of voice indicating that compliance with the officer’s request might be compelled”
can indicate a seizure as opposed to a consensual encounter. 446 U.S. at 554. If there
are no circumstances indicating that a reasonable person would be so intimidated by
6
the police contact that he would not feel free to leave, then otherwise inoffensive contact
between a person and the police cannot, as a matter of law, amount to a seizure. Id. at
555.
III. Application
¶12 The trial court concluded that Shoen was impermissibly seized for Fourth
Amendment purposes once the officers continued to question him after advising him
not to drive. We disagree. We conclude that that the officers’ encounter with Shoen
was consensual up to and including the moment Shoen admitted to having
methamphetamine in his truck.
¶13 Before the officers contacted Shoen, they parked their patrol car several storage
units behind Shoen’s truck. They did not use the police car’s emergency lights or siren,
and they left the exit paths in the storage complex open. They explained why they were
there and used a conversational tone throughout the encounter. Neither of the officers
touched Shoen nor directed him where to stand or sit. The officers did not display any
weapons or threaten Shoen at any point in their conversation. They asked Shoen
whether they could speak with him and notified him at the beginning of their
conversation that he was not in any trouble; Shoen agreed to talk to them. Although
Sergeant Witte advised Shoen not to drive because he had a revoked license and his
truck’s registration was expired, the officers never instructed Shoen to remain in the
area or restrained him. In fact, they told him that he should call someone to come and
pick him up so he could leave. They asked Shoen’s permission to search the bed of his
truck and told him that he did not have to let them look. Once Shoen admitted that
7
there had been a “rig” in his truck—which the officers understood to mean drug
paraphernalia used to consume drugs—Sergeant Witte asked Shoen to stop wasting
their time and tell them what type of drug was in the truck. When Sergeant Witte asked
how much methamphetamine was in the truck, Shoen responded “a little bit” without
additional questioning from the officers.
¶14 Moreover, the officers did not attempt to intimidate Shoen into remaining at the
storage unit. In fact, their advice was just the opposite: They recommended that he call
someone to pick him up so he could leave. Shoen agreed to speak with the officers and
appeared comfortable throughout the encounter; he willingly answered the officers’
questions and allowed them to look in his truck bed. See Paynter, 955 P.2d at 73
(deeming an encounter consensual because the defendant’s liberty was not restrained
and his voluntary cooperation was elicited through non-coercive questioning); Thomas,
839 P.2d at 1178 (holding that an encounter was consensual where the defendant was
comfortable during the encounter, chose not to leave, and acquiesced to the officer’s
request to answer questions); Marujo, 192 P.3d at 1006 (noting that a request for consent
to search does not transform a consensual encounter into a seizure so long as the officer
does not convey a message that compliance is required). Therefore, under the totality of
the circumstances, a reasonable person in Shoen’s position would have known that he
was free to leave or decline the officers’ requests. See Thomas, 839 P.2d at 1177–78
(“The test for determining if the encounter is a consensual one is whether a reasonable
person under the circumstances would believe he or she was free to leave and/or to
disregard the official’s request for information.”). Simply put, Shoen chose to stay and
8
talk with the police officers. Thus, we conclude that the officers’ encounter with Shoen
was consensual.
IV. Conclusion
¶15 Accordingly, we reverse the trial court’s order suppressing Shoen’s statements
and the evidence seized from the truck, and we remand to that court for further
proceedings consistent with this opinion.
9
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
WALTERJ. THOMAS, )
)
Plaintiff, )
)
v. ) Civil Case No. 05-1784 (RJL)
)
NAT WAR M. GANDHI, Chief )
Financial Officer of the District of )
C~mhl~ )
)
DekndanL )
Y4
MEMORANDUM OPINION
(September "3 ,2009) [# 35]
The plaintiff, Walter J. Thomas ("Thomas"), filed this suit in September 2005,
when he was sixty-four years old, claiming the Chief Financial Officer of the District of
Columbia (the "defendant") discriminated against him based on race, sex, disability, and
age. In November 2007, this Court granted the defendant's Motion for Partial Summary
Judgment, Thomas v. Gandhi, 525 F. Supp. 2d 103, 106 (D.D.C. 2007), and now
considers the defendant's Motion for Summary Judgment as to Thomas' remaining age
discrimination claim. The defendant asserts summary judgment is appropriate because
Thomas has not provided sufficient evidence to establish that the defendant failed to hire
him because of his age. The Court agrees and will GRANT the defendant's motion.
BACKGROUND l
In December 2002, Thomas learned that the Office of the Chief Financial Officer
was abolishing his position and all other support positions. Id. As a result, however,
Thomas would be eligible to apply for positions within the newly formed Office of
Management and Administration. Id. Thereafter he applied for a Lead Support Specialist
("LSS") position, but the hiring panel instead selected a forty-one-year-old male. During
the same round of interviews, the same interview panel offered a position to a 62-year-old
female. (See Pl.'s Statement of Genuine Issues in Support ofPl.'s Opp'n [Dkt. #5] ~ 5;
Pl.'s Ex. 2 (Affidavit of Shirley Gaddy) [Dkt. #40-3] ~ 6.) Because Thomas was not
selected, his employment with the Office of the Chief Financial Officer was terminated in
March 2003. Thomas, 525 F. Supp. 2d at 106.
Thomas alleges, based on his own testimony, that after his interview for the LSS
position, he approached a member of the hiring committee, Alphonso Lister ("Lister"),
who told him there were "rumors" that unspecified "people" discussed Thomas' age.
(Pl.'s Opp'n to Def.'s Mot. for Summ. J. [Dkt. #40] ~ 6.) Thomas also points to a
statement made by another hiring committee member, Jo Ann Smoak ("Smoak"), who
stated in her deposition that she "did not see value in Thomas' work and that he had
retired in place." (ld. ~ 11.) Later in her deposition Smoak explained that she used
"retired in place" to describe Thomas' attitude or work ethic, not his age, and that young
lPor additional background, see generally Thomas v. Gandhi. 525 P. Supp. 2d 103.
2
people are also capable of exhibiting such an attitude. (See Def.'s Amend. Mem. of Law
in Support of Mot. for Summ. J. [Dkt. #39-2] at 5 n.2.)
After receiving a right to sue letter from the Equal Employment Opportunity
Commission, Thomas filed age, racial, and gender discrimination claims in this Court.
(See Compi. at 2-3.) In November 2007, this Court granted summary judgment on all but
the age discrimination claim, Thomas, 525 F. Supp. 2d at 109, because the defendant had
explicitly declined to move for summary judgment on that basis, id. at 106 n.1. The
defendant declined to do so because he believed "[a] dispute of fact exists with respect to
asserted direct evidence of age bias which prevents an award of summary judgment under
Rule 56." (Def.'s Mot. for Part. Summ. J. [Dkt. #12] at 2 n.1.) Specifically, the
defendant was referring to Lister's alleged statement regarding rumors that the committee
does not want people of retirement age. (Memo. in SUpp. of Mot. for Part. Summ. J.
[Dkt. #13] at 2 n.1.)
In granting the defendant's earlier motion for summary judgment with respect to
Thomas' race, gender, and disability discrimination claims, this Court found that Thomas
failed to establish he was significantly more qualified than Barry Edmonds, the forty-one-
year-old male who was hired for the LSS position. Thomas, 525 F. SUpp. 2d at 108 &
108 nA. Specifically, the Court noted Edmonds had extensive relevant experience and
that the selection panel unanimously concluded Edmonds outperformed Thomas in the
interview, which was the primary factor in the selection decision. Id. at 108-09. Indeed,
3
out of a possible interview score of 85, Thomas scored only 57, while Edmonds scored
68. Id. at 109 n.5.
Thomas then moved for this Court to amend and clarify its order granting partial
summary judgment, arguing that the Court's decision prevented him from asserting
evidence in support of his age discrimination claim based on his non-selection for the
LSS position. (Pl.'s Mot. to Amend [Dkt. #29]; Mem. in Support [Dkt. #29-3] at 4.) I
denied Thomas' motion. (Minute Order, 01109/08.)
ANALYSIS
Summary judgment is granted "if the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ.
P.56(c). In deciding whether there are disputed issues of material fact, the Court draws
all justifiable inferences in favor of the non-moving party. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986).
In opposing the defendant's current summary judgment motion, Thomas argues
that judicial estoppel precludes the defendant from moving for summary judgment in light
of the defendant's previous concession that there is a disputed issue of material fact as to
his claim. However, considering this Court's previous detennination that Thomas failed
to establish he was significantly better qualified than Edwards and Thomas' failure since
4
then to provide sufficient evidence that he was not hired because of his age, the Court, for
the following reasons, GRANTS the defendant's summary judgment motion.
A. Judicial Estoppel Does Not Apply to Bar Defendant From Alleging An
Absence of Disputed Material Facts.
Pursuant to the doctrine of judicial estoppel, a party who "assumes a certain
position in a legal proceeding, and succeeds in maintaining that position, ... may not
thereafter, simply because his interests have changed, assume a contrary position,
especially if it is to be to the prejudice of the party who has acquiesced in the position
formerly taken by him." New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (internal
quotation omitted). The rule exists "to protect the integrity of the judicial process by
prohibiting parties from deliberately changing positions according to the exigencies of the
moment." Id. at 749-50 (internal quotation and citation omitted).
Courts are more likely to apply judicial estoppel: (1) when the party's position is
"clearly inconsistent with its earlier position," (2) when "the party has succeeded in
persuading a court to accept that party's earlier position, so that judicial acceptance of an
inconsistent position in a later proceeding would create the perception that either the first
or the second court was misled," and (3) when "the party seeking to assert an inconsistent
position would derive an unfair advantage or impose an unfair detriment on the opposing
party ifnot estopped." Id. (internal quotation and citations omitted).
Applying these factors to the facts in this case, the Court finds that judicial
estoppel does not apply here. First, the defendant has not adopted a position that is
5
"clearly inconsistent" to its previous position. The defendant maintains that Lister's
statement results in a factual dispute, but asserts that Lister's statement is inadmissible
under the Rules of Evidence. (Def.' s Amend. Mem. in Support of Mot. for Summ. J.
[Dkt. #29-2] at 4.) Second, the defendant did not "succeed" in its earlier position. This
Court only noted the defendant's position in a footnote and did not further address or rely
on the defendant's concession. There is thus no risk of "the perception that ... the ...
[C]ourt was misled." New Hampshire, 532 U.S. at 750 (internal quotation omitted).
Finally, there is no indication that allowing the defendant to move for summary judgment
would now cause prejudice. This is not a situation where a party is "deliberately
changing positions according to the exigencies of the moment" or where the "the integrity
of the judicial process" is at risk. Id. at 749-50 (internal quotations omitted). Thus,
judicial estoppel is an inappropriate defense here. The law of the case doctrine, however,
is another matter.
B. The Law of the Case Doctrine Applies.
The law of the case doctrine provides, in part, that "the same issue presented a
second time in the same case in the same court should lead to the same result." LaShawn
A. v. Barry, 87 F.3d 1389, 1393 (D.C. Cir. 1996). Thomas argues the law of the case
doctrine does not apply because this Court's earlier finding that Thomas was not
significantly better qualified for the LSS position than Edmonds was not a final
6
appealable order? Unfortunately, Thomas misunderstands the law of the case doctrine,
which does not require a final, appealable judgment. United States v. Eilberg, 553 F.
Supp. 1,4 (D.D.C. 1981). This Court thus accepts as the law of the case that Thomas did
not establish he is significantly better qualified than Edmonds.
c. Insufficient Evidence of Age Discrimination.
Having failed to establish that he was '''significantly' or 'markedly' more qualified
for the job," see Hendricks v. Geithner, 568 F.3d 1008, 1012 (D.C. Cir. 2009), Thomas
faces a heavy burden to prove that his age was the "but-for" cause of his non-selection,
Gross v. FBL Fin. Serv., Inc., 129 S.Ct. 2345, 2350 (2009). In attempting to establish age
discrimination, he merely relies on certain age- and retirement-related statements made by
hiring-committee members Lister and Smoak. It is not enough!
i. Lister's Statement Does Not Evince Age Discrimination.
First, Thomas points to Lister's alleged statement that he heard rumors that "these
people" allegedly referenced Lister's age. (Pl.'s Ex. 1 (Thomas Dep.) [Dkt. #40-2] at
319-21 Y Curiously, Thomas now relies on this statement as a basis to oppose summary
2Thomas also argues that the law of the case doctrine does not apply to prior findings of fact.
That argument is equally erroneous. See Laffey v. Northwest Airlines, Inc., 740 F.2d 1071, 1082
(D.C. Cir. 1984) (applying the law of the case doctrine to a factual issue in an employment
discrimination case).
3Although Defendant avoided judicial estoppel, in part, by arguing Lister's statements constitute
inadmissible hearsay, this Court did not accept Defendant's previous assertions that Lister's
statements resulted in a factual dispute as to Thomas' age claim. Thus, nothing precludes the
Court from finding there is no factual dispute even considering Lister's statements. In light of
the Court's conclusions, the Court declines to address the admissibility of Lister's statement.
7
judgment, even though he never mentioned it in either his detailed complaint before this
Court or in his extensive EEOC filings. (See Def.'s Statement of Undisputed Material
Facts [Dkt. #35-2] ~ 7.) In fact, there is no record of Thomas mentioning Lister's
statement until/our years after it was allegedly made. (Def.'s Errata of Def.'s Memo. of
Law in Supp. of Mot. for Summ. J. [Dkt. #39-2] at 8.) In any event, Thomas wants this
Court, in essence, to find evidence of discrimination in a third party statement alleging the
existence of "rumors" that other people had stated Thomas was not selected because he
had reached "retirement age." Thomas not only offers no support for his assertions, but
fails to explain why the agency would have selected a sixty-two-year-old woman if it did
not want to hire people nearing retirement age. Thus, even assuming Lister's statement
would be admissible, Thomas cannot overcome his heavy burden with such vague, self-
serving, and uncorroborated testimony. See Kline v. Springer, 602 F. Supp. 2d 234,240
(D.D.C. 2009) (noting the plaintiffs "self-serving" assertions about her own performance
will not give rise to an inference of an impermissible motive); Porter v. Fulgham, 601 F.
Supp. 2d 205,223 (D.D.C. 2009) (noting "unsupported self-serving allegations alone are
insufficient" for a plaintiff to establish discrimination).
ii. Smoak's Statement Does Not Evince Age Discrimination.
Finally Thomas also relies on hiring committee member Smoak's statement that
Thomas had already "had retired in place." (Pl.'s Opp'n to Def.'s Mot. for Summ. 1.
[Dkt. #40] ~ 11.) While this statement, in isolation, could be a reference to Thomas' age,
8
courts do not look at such statements in insolation, but rather in light of the context in
which they were made. See Waterhouse v. District o/Columbia, 124 F. Supp. 2d 1,
11-12 (D.D.C. 2000) (noting an allegedly discriminatory statement "was made in the
context" of other statements and thus did not evince discrimination); Lutes v. Goldin, 62
F. Supp. 2d 118, 129 (D.D.C. 1999) ("What Plaintiff fails to consider, however, is the
context of the quoted passage."). When viewed in light of the context of Smoak's
statement that she did not see any real value in Thomas' work, it becomes clear Smoak's
"retired in place" statement was, as she explained later in the same deposition, a reference
to Thomas' poor work ethic, not his age. (See Def.'s Amend. Mem. of Law in Support of
Mot. for Summ. J. [Dkt. #39-2] at 5 n.2.) Thus, in light of the law of the case, the Court
finds Smoak's and Lister's statements, even if believed, do not provide sufficient
evidence for Thomas to establish that the decision to not hire him was due to his age.
CONCLUSION
Thus, for all of the foregoing reasons, the Court GRANTS the defendant's motion
for summary judgment. An order consistent with this decision accompanies this
Memorandum Opinion.
United States District Judge
9
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Order issued March 25, 2015
In The
Court of Appeals
For The
First District of Texas
NO. 01-15-00180-CV
MEDSTAR FUNDING, L.C. AND BEACON LEGAL FUNDING, L.L.C.,
Appellants
V.
MYCHELE REED, AS NEXT FRIEND OF T. R., A MINOR, JERRY
WAYNE SQUIER AND STRIKE, LLC F/K/A STRIKE CONSTRUCTION,
L.L.C., Appellee
On Appeal from 55th District Court
Harris County, Texas
Trial Court Cause No. 2013-44914
MEMORANDUM ORDER
OF REFERRAL TO MEDIATION
The Court determines that it is appropriate to refer this appeal for resolution
by mediation. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 154.021, 154.022(a),
154.023 (Vernon 2005). Accordingly, the Court orders that this appeal be referred
to mediation unless any party to the appeal files an objection with the Clerk of this
Court within ten days after receiving this order. See id. § 154.022(b).
The parties shall choose a qualified mediator and agree on a reasonable fee
for the mediator’s services. 1 See id. §§ 154.052, 154.054(a) (Vernon 2005). When
the parties notify the Clerk of this Court of the name of the mediator, that person
shall be deemed appointed by the Court. See id. § 154.051 (Vernon 2005). The
parties should provide the mediator with a completed “Notification to Mediator”
and the “Appointment and Fee Report—Mediation” form. These documents can
be downloaded from the forms page of the Court’s website at
http://www.1stcoa.courts.state.tx.us.
The Court sets the following deadlines:
• No later than 15 days from the date that this order is issued, the
parties shall file with the Clerk of this Court a completed “Parties’
Notification to Court of Mediator.” This document can be
downloaded from the forms page of the Court’s website at
http://www.1stcoa.courts.state.tx.us.
11
The Court does not recommend mediators. Mediation information is
available from the Dispute Resolution Center of Harris County ((713) 755-
8274 and http://www.co.harris.tx.us/DRC), the Fort Bend Dispute
Resolution Center ((281) 342-5000), the Alternate Dispute Resolution
Section of the State Bar of Texas (http://www.texasadr.org/), and other
groups. The parties are not required to use a mediator recommended or
listed by these groups.
• No later than 45 days from the date that this order is issued, the
parties shall conduct the mediation.
• No later than two days from the conclusion of the mediation,
the parties and the mediator shall advise the Clerk of this Court in
writing whether the parties did or did not settle the underlying dispute,
and the mediator shall file with the Clerk of this Court a completed
“Appointment and Fee Report—Mediation” form. This document can
be downloaded from the forms page of the Court’s website at
http://www.1stcoa.courts.state.tx.us.
All parties, or their representative with full settlement authority, shall attend
the mediation with their counsel. The mediator shall encourage and assist the
parties in reaching a settlement of their dispute, but may not compel or coerce the
parties to enter into a settlement agreement. See id. § 154.053(a) (Vernon 2005).
All communications relating to the mediation are confidential and not subject to
disclosure, except as set forth by law. See id. § 154.073 (Vernon 2005). The Clerk
of this Court, however, will file this order, any objection to this order, and the
completed “Parties’ Notification to Court of Mediator” and “Appointment and Fee
Report—Mediation” forms with the other documents filed in this appeal that are
available for public inspection.
Unless expressly authorized by the disclosing party, the mediator may not
disclose to either party information given in confidence by the other and shall at all
times maintain confidentiality with respect to communications relating to the
subject matter of the dispute. See id. § 154.053(b). Unless the parties agree
otherwise, all matters, including the conduct and demeanor of the parties and their
counsel during the settlement process, are confidential and may never be disclosed
to anyone, including this Court. See id. § 154.053(c).
The Court will consider the agreed fee for the mediator’s services to be
reasonable and tax that fee as a cost of the appeal unless the parties agree to
another method of payment. See id. § 154.054.
Nothing in this order modifies the timetables in the Texas Rules of Appellate
Procedure regarding the appellate record and briefs.
/s/ Russell Lloyd
Justice Russell Lloyd
Acting Individually
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 3, 2008
No. 07-20347 Charles R. Fulbruge III
Summary Calendar Clerk
JEFFREY COURTNEY
Plaintiff - Appellant
v.
ARTHUR ANDERSEN LLP; RODNEY R PROTO; EARL E DEFRATES; WASTE
MANAGEMENT INC
Defendants - Appellees
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:05-CV-1031
Before KING, DAVIS and CLEMENT, Circuit Judges.
PER CURIAM:*
This case arises out of the settlement agreement from the Waste
Management, Inc. (“WMI”) securities class action. In re Waste Management, Inc.
Securities Litigation, 177 F. Supp. 2d 1373 (J.P.M.L. 2001). After receiving and
cashing his settlement check, class member Jeffrey Courtney sued WMI, WMI’s
auditor, Arthur Andersen, LLP, and WMI officers Rodney Proto and Earl
*
Pursuant to 5TH CIR. R. 47.5, this Court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 07-20347
Defrates (collectively, the “WMI defendants”) alleging that he was not
compensated for a block of 37,902 WMI shares which were not included in the
settlement agreement. The district court found that Courtney released his
claims when he signed the settlement agreement and cashed the settlement
check. For the reasons stated below, we affirm.
I. FACTS AND PROCEEDINGS
Courtney acquired 37,902 shares of stock in USA Waste in May 1998. USA
Waste merged with the old Waste Management, Inc. in July 1998 to form the
new WMI. Following the July 1998 merger, Courtney’s USA Waste stock
changed names from USA Waste to WMI. In July 1999, WMI announced that it
would miss its projected earnings for the second quarter of the year. WMI’s stock
price declined dramatically, and a large number of shareholder derivative suits
followed. The Judicial Panel on Multidistrict Litigation (“JPML”) consolidated
all of the securities actions against WMI in the Southern District of Texas in
November 2001. The district court approved a class action settlement in May
2002.
The WMI Notice of Settlement defined the class as all of those who
“purchased or otherwise acquired” WMI stocks during the class period,
“including but not limited to, individuals . . . who purchased or otherwise
acquired USA Waste securities . . . on or after June 11, 1998.” The class period
extended from June 11, 1998 until November 8, 1999.
Courtney received the Notice of Settlement, which included a release of all
claims against WMI (“the Release”). Courtney did not opt out of the class, and
he identified two blocks of WMI stock on his proof-of-claim form. The first block
consisted of 37,902 shares of USA Waste stock, which Courtney acquired in May
1998, prior to the beginning of the class period (“Block 1”). The second block
consisted of 9,842 WMI stocks which Courtney acquired in December 1999,
during the class period (“Block 2”). Courtney called the office of the claims
2
No. 07-20347
administrator in July 2003 and was informed that Block 1 was not included in
his claim because he acquired the stock before the class period. In March 2004,
Courtney received and cashed a settlement check for $6,569.32. In June 2006,
the claims administrator sent Courtney a letter informing him that his Block 1
shares were not included in the settlement because they “were not exchanged for
shares or assets during the Class Period as USA Waste (the acquiring company)
and its securities simply underwent a name change.”
Courtney filed suit against the WMI defendants in Louisiana state court
in April 2004, alleging securities fraud and negligence for WMI’s conduct during
and following the July 1998 merger. The WMI defendants removed the case to
federal court in Louisiana and the JPML ordered the case transferred to the
Southern District of Texas.1 The WMI defendants then moved to dismiss for
failure to state a claim. The district court denied their motion and ordered the
WMI defendants to file a motion for summary judgment on whether “the Release
prevent[s] Courtney from pursuing claims for the value that his block of 37,902
shares lost, even though the Settlement compensated Courtney only for the
value that the block of 9,842 shares lost.” The WMI defendants filed the
requested motion for summary judgment, which the district court granted.
Courtney appealed.
II. STANDARD OF REVIEW
This Court reviews a grant of summary judgment de novo and applies the
same criteria as the district court. Fed. Deposit Ins. Corp. v. Laguarta, 939 F.2d
1231, 1236 (5th Cir. 1991). Summary judgment is appropriate if the record
discloses “that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(c).
This Court looks to the pleadings, depositions, answers to interrogatories, and
1
Courtney’s case was assigned to the district court judge who presided over the WMI
class action settlement.
3
No. 07-20347
affidavits to determine whether any genuine issue of material fact remains. Fed.
Deposit Ins. Corp., 939 F.2d at 1236. “Accordingly, we review the evidence and
inferences to be drawn therefrom in the light most favorable to the non-moving
party.” Id. (internal quotations omitted).
“Once the moving party presents the district court with a properly
supported summary judgment motion, the burden shifts to the nonmoving party
to show that summary judgment is inappropriate.” Morris v. Covan World Wide
Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). To defeat summary judgment,
“the nonmoving party may not rest upon the mere allegations or denials of its
pleadings, and unsubstantiated or conclusory assertions that a fact issue exists
will not suffice.” Id.
III. DISCUSSION
Courtney argues that the Release was ambiguous, and that he reasonably,
but mistakenly, believed that he had not released his claims with regard to any
uncompensated stock when he filed his proof of loss and later accepted the
settlement check. We affirm the district court’s finding that the Release is not
ambiguous and that it bars Courtney’s claims.
“Whether a written agreement is ambiguous or whether it clearly
demonstrates the intent of the parties is a question of law. Likewise, . . . the
interpretation of an unambiguous instrument is a question of law.” Shelton v.
Exxon Corp., 921 F.2d 595, 602–03 (5th Cir. 1991). Public policy “favors and
encourages” the settlement of claims between parties and permits them to
release future damages as part of a settlement agreement. W. J. Perryman & Co.
v. Penn Mut. Fire Ins. Co., 324 F.2d 791, 793 (5th Cir. 1963). “In the context of
contract interpretation, only when there is a choice of reasonable interpretations
of the contract is there a material fact issue concerning the parties’ intent that
would preclude summary judgment.” Amoco Prod. Co. v. Tex. Meridian Res.
Exploration, Inc., 180 F.3d 664, 669 (5th Cir. 1999).
4
No. 07-20347
Courtney argues that “resolution of [whether he reasonably interpreted
the Release] will determine whether [he] can establish a defense of mistake
under Federal common law (or vice of consent under Louisiana law).” Without
deciding which law is applicable to this case—an issue which Courtney fails to
brief—we hold that Courtney has failed to allege a claim under either Federal
or Louisiana law.
Federal cases have recognized that under the common law doctrine of
unilateral mistake, a contract can be voided only “where there was a mistake,
as to a basic assumption on which a contract was made, that has a material
effect . . . adverse to the mistaken party and enforcement of the contract would
be unconscionable or the other party had reason to know of the mistake.” Info.
Int'l Assocs. v. United States, 74 Fed. Cl. 192, 193 (Ct. Cl. 2006). Under
Louisiana law, “[e]rror vitiates consent only when it concerns a cause without
which the obligation would not have been incurred and that cause was known
or should have been known to the other party,” LA. CIV. CODE ANN. art. 1949
(2007), and “unilateral error does not vitiate consent if the cause of the error was
the complaining party's inexcusable neglect in discovering the error,” Smith v.
Remodeling Serv., Inc., 648 So. 2d 995, 999 (La. Ct. App. 1994).
The Release, which is part of the settlement agreement, states that class
members who accept the settlement release all claims “arising out of or related,
directly or indirectly, to the purchase, acquisition, exchange, retention, transfer
or sale of, or investment decision involving, any Waste Management security
during the class period.” The district court found that the Release is not
ambiguous. The district court also found that although the Block 1 stock was
acquired prior to the class period (and therefore not covered by the settlement),
it was stock retained during the class period and covered by the broad terms of
the Release. We agree.
5
No. 07-20347
Courtney does not argue that his Block 1 stocks are not WMI stocks which
he retained during the class period; he only argues that the meaning of
“retained” is ambiguous in the Release and that he did not understand that he
was releasing his claims with regard to his Block 1 stocks when he ratified the
Release. Courtney does not make the argument that the settlement agreement
was unconscionable, so in order to recover for unilateral mistake under Federal
common law he must show that his mistake was known or should have been
known to WMI. Info. Int'l Assocs., 74 Fed. Cl. at 193. Louisiana law requires the
same showing. LA. CIV. CODE ANN. art. 1949. Courtney has not introduced any
evidence to show that WMI knew or had any reason to know of his mistaken
interpretation of the Release. Summary judgment against Courtney was proper
because WMI had no reason to know that Courtney unilaterally misinterpreted
the unambiguous terms of the Release.
Courtney also argues that summary judgment is improper because he
attempted to rescind the settlement agreement by tendering the settlement
proceeds to WMI in November 2006, nearly two years after he filed this lawsuit
and more than three years after the claims administrator informed him, in July
2003, that his Block 1 stocks would not be compensated under the settlement.
The district court found that Courtney’s “offer to give back the consideration,
years later and in the course of litigation, does not negate the manifestation of
his assent to be bound by the settlement agreement through knowingly receiving
and retaining consideration for his claims.” Courtney cites the Restatement
(Second) of Contracts § 381 in support of his position. The Restatement states
that “[t]he power of a party to avoid a contract for misrepresentation or mistake
is lost if after he . . . has reason to know of a non-fraudulent misrepresentation
or mistake he does not within a reasonable time manifest to the other party his
intention to avoid it.” RESTATEMENT (SECOND) OF CONTRACTS § 381(2). Courtney
argues that the question of whether he rescinded the contract in a “reasonable
6
No. 07-20347
time” is for the jury. As discussed above, however, the settlement agreement is
not a contract that Courtney can “avoid for . . . mistake.” Therefore, his
argument for recission must fail.
IV. CONCLUSION
The judgment of the district court is AFFIRMED.
7
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United States Court of Appeals
For the First Circuit
No. 04-1606
UNITED STATES,
Appellee,
v.
KHARY JONES,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Richard G. Stearns, U.S. District Judge]
Before
Lynch, Circuit Judge,
Campbell and Stahl, Senior Circuit Judges.
Mark W. Shea, with whom Shea, LaRocque & Wood LLP was on
brief, for appellant.
Cynthia A. Young, Assistant U.S. Attorney, with whom Michael
J. Sullivan, United States Attorney, was on brief, for appellee.
December 19, 2005
CAMPBELL, Senior Circuit Judge. Appellant-defendant
Khary Jones appeals from his conviction and sentence in the United
States District Court for the District of Massachusetts. Jones
entered a conditional guilty plea to one count of carjacking, in
violation of 18 U.S.C. § 2119, and one count of using a firearm
during and in relation to a crime of violence, in violation of 18
U.S.C. § 924(c). On appeal, Jones makes two arguments: first,
that the district court erred in denying his motion to suppress
certain evidence, and second, that his case should be remanded for
resentencing in the district court pursuant to United States v.
Booker, 125 S. Ct. 738 (2005). We now affirm the district court's
judgment and sentence.
I. Background
The facts of the case, largely undisputed, are set out in
United States v. Jones, 261 F. Supp. 2d 40 (D. Mass. 2003). The
most relevant facts are as follows:
On the cold and rainy night of March 19, 2002, at about
4:00 a.m., Boston Police Officers Christopher Broderick and Richard
Moriarty were patrolling in their cruiser in Boston's South End.
In the weeks prior to this night, there had been an abnormally
large number of armed robberies and car break-ins in the area. The
two officers had not received any reports of a specific crime that
evening. As they drove toward Appleton Street, they saw on their
left two men running nearly side-by-side along Appleton and across
-2-
Clarendon. The men were wearing sweatshirts with hoods drawn
tightly around their heads and what initially appeared to the
officers to be white cotton gloves. The officers were unsure of
what the men were doing but considered it to be of an "unlawful
design." They sped up the cruiser and turned right onto Appleton
Street, where Moriarty got out of the car and approached one of the
hooded men. Moriarty told the man, later identified as the
defendant, to stop, which Jones did immediately, throwing his hands
up in the air. At that point, Moriarty observed that Jones' gloves
were of white latex. Asked why he wore them, Jones said his hands
were cold. Asked if he had any weapons on him, Jones said that he
had a knife, which Moriarty confiscated.
Meanwhile, Broderick drove further down Appleton Street,
parked, and got out of the cruiser. The second hooded man, later
identified as Samuel Whiteside, had continued to run down the
sidewalk. He turned left between two cars, right onto the
sidewalk, and ran until he was under a lit lamppost, where he bent
down so that Broderick could see only the top of his head.
Whiteside then straightened into full view and continued to run
down the sidewalk as Broderick chased him and asked him several
times to stop. At this point, Broderick saw a third man, later
identified as Darrell Weaver, walking on the sidewalk in the same
direction that Jones and Whiteside had been running. While this
was Broderick's first view of Weaver, Broderick testified that his
-3-
partner, Moriarty, had told him he saw Weaver when the cruiser
first turned onto Appleton Street. Moriarty was unable to testify
at the suppression hearing because he was serving in Iraq. The
district judge found that Moriarty saw Weaver before the officers
got out of the cruiser and that Whiteside and Jones appeared to be
chasing Weaver.
After Broderick saw Weaver walking ahead on the sidewalk,
Whiteside ran towards Weaver but slowed to a walk as he approached
him. Broderick caught up to the two men, who sat down on the steps
of 84 Appleton Street. When Broderick asked what they were doing,
Whiteside replied that he was "just walking with my boy." Weaver
looked back and forth between Whiteside and Broderick and appeared
confused. Broderick took both men back to the cruiser and
questioned them individually while Moriarty talked to Jones.
The officers concluded that Weaver was not with Whiteside
and Jones and let him go. Broderick asked Whiteside why he was
wearing a latex glove, and Whiteside responded that he was wearing
one glove because a cut on his hand had become infected. Moriarty
then walked back in the direction in which he had seen Whiteside
run and found, where Broderick had seen Whiteside pause and bend
down earlier, a .32 caliber semi-automatic handgun with a chambered
live round and a one-dollar bill sitting on top of a large white
trash bag on the sidewalk. The gun was still warm and dry.
Moriarty then signaled to Broderick that Jones and Whiteside should
-4-
be handcuffed. The officers asked the two men if they had a
license to carry a firearm, and neither man indicated he did.
The officers then arrested Jones and Whiteside and took
them to the jail. A booking officer booked the two men, filled out
a prisoner booking form which listed Jones' property, including a
set of keys, and took booking photos. The arrest booking form
indicated that the two men were arrested for "intent to rob while
armed." Later, the state initially charged Jones with possession
of a firearm without a license, attempted armed robbery, and a
moving violation.
The evening before Jones was arrested, on March 18, 2002
at about 12:15 a.m., a seemingly unrelated incident had occurred.
Toni Harrison and Ramona Powell were forced out of a car at
gunpoint by a young African-American man with braided hair. The
two women yelled for the driver of the car, Thomas Edwards, who was
across the street, and he ran towards the car as it drove away,
getting a side view of the suspect.
On March 23, 2002, Harrison, Edwards, and Edwards' mother
Hilda, the owner of the car, went to the police station to review
photographs with Boston Police Detective Paul MacIsaac. MacIsaac
first spoke to Harrison and gathered a description of the suspect
in order to narrow the pool of suspects displayed on the police
department's computerized identification imaging system. The
result was seventy-eight young African-American men with braided
-5-
hair. Harrison viewed all the photos and rejected all of them.
MacIsaac then changed the search criteria to search for "afro"
instead of "braids." There were ninety-one matches, and Harrison
rejected the first seventy-nine. At the sight of the eightieth
photo, however, she jumped back and said, "I think that's him. I
think that's him," and began to cry. She told MacIsaac that she
was eighty-five percent sure it was the suspect.
On March 25, 2002, MacIsaac printed out the photo
Harrison had identified, a 1998 booking photo of Khary Jones. A
criminal records check revealed a more recent photo of Jones from
his March 19, 2002 arrest. Using the computer system, MacIsaac
then created a nine-photo array, including the March 19 photo.
Harrison quickly identified Jones in the new photo array. Edwards,
who had had a side view of the suspect, was unable to identify
Jones and instead picked another photo. Powell "went right to"
Jones' picture and said "that's him."
Based on the identifications by Harrison and Powell,
MacIsaac obtained and executed a search warrant for Jones relative
to the carjacking. He told Moriarty to look in the area of Jones'
March 19 arrest for the stolen car. The car was found a couple of
blocks away from Appleton and Clarendon Streets. MacIsaac examined
Jones' booking sheet, which listed "a key" among his property.
MacIsaac obtained a search warrant, executed it, and seized a set
of keys, including Edwards' car key.
-6-
Indicted on one count of carjacking and one count of
possessing a firearm during and in relation to a crime of violence
in connection with the March 18, 2002 carjacking, Jones moved to
suppress any and all evidence seized from him and/or his possession
as a result of the warrantless stop and arrest on March 19, 2002
and the subsequent warrant-based search of his property in jail on
April 6, 2002. Jones argued that the officers had not had
reasonable suspicion to stop him and Whiteside, nor had they had
probable cause to arrest Jones after the discovery of the gun on
top of the garbage bag. The district court denied the motion to
suppress, finding that the officers had had reasonable suspicion to
stop Jones, but assuming arguendo that the stop was illegal, the
discovery of the evidence was sufficiently attenuated from the stop
to dissipate the taint. Alternatively, the court observed, the
independent source doctrine provided a separate basis for the
seizure of the keys because MacIsaac, separate from Broderick and
Moriarty, had learned the potential significance of the keys during
his own investigation.
After the denial of the motion to suppress, Jones entered
a conditional guilty plea and was sentenced on April 20, 2004. The
district court sentenced Jones to consecutive terms of 30 months'
imprisonment on Count 1 and 84 months' imprisonment, the mandatory
minimum, on Count 2. This appeal followed.
-7-
II. Discussion
A. The Motion to Suppress
On appeal, Jones argues that on March 19, 2002, the
police officers had neither reasonable suspicion to stop him and
Whiteside nor probable cause to arrest them. Further, he argues,
MacIsaac's discovery of the keys was not sufficiently removed from
the illegal arrest to dissipate the taint, nor was it an
independent discovery. Because we find that the initial stop and
subsequent arrest were both legal, we do not reach the issues of
dissipation of the taint or independent discovery. As Jones
himself recognized in his brief, if the arrest was legal, the
search of his possessions at the jail was constitutional. We
affirm the defendant's conviction.
In reviewing a denial of a motion to suppress, we review
questions of law de novo and factual findings for clear error.
United States v. Khounsavanh, 113 F.3d 279, 282 (1st Cir. 1997).
1. Disputed Finding of Fact
The only factual finding by the district court that Jones
seems to contest is that Moriarty had seen from his cruiser the two
men chasing Weaver down the street. "A clear error exists only if,
after considering all of the evidence, we are left with a definite
and firm conviction that a mistake has been made." United States
v. McCarthy, 77 F.3d 522, 529 (1st Cir.), cert. denied, 519 U.S.
991 (1996). "'[W]here there is more than one plausible view of the
-8-
circumstances, the...court's choice among supportable alternatives
cannot be clearly erroneous.'" United States v. Tejada-Beltran, 50
F.3d 105, 110 (1st Cir. 1995) (quoting United States v. Ruiz, 905
F.2d 499, 508 (1st Cir. 1990)). The district court's finding that
Moriarty, while still in the car, saw Weaver being chased by Jones
and Whiteside is supported by Broderick's hearsay testimony that
Moriarty had told him he had seen Weaver ahead of the two men in
the direction in which they were running when the cruiser first
turned onto Appleton Street. Because that testimony had been given
at a suppression hearing, where the Federal Rules of Evidence do
not apply in all their rigor, the court overruled the defendant's
hearsay objection, and no appeal is specifically made from that
ruling, although Jones insists that Weaver was seen only later, by
Broderick, after the cruiser stopped and the officers split up.
United States v. Schaefer, 87 F.3d 562, 570 (1st Cir. 1996); see
also United States v. Bunnell, 280 F.3d 46, 49 (1st Cir. 2002). In
any event, the court's finding based on Broderick's testimony of
what Moriarty told him is not clearly erroneous.
2. Reasonable Suspicion
Police officers may conduct a brief investigatory stop of
a suspect if they have reasonable suspicion, based on articulable
facts, that a crime is about to be or has been committed. Terry v.
Ohio, 392 U.S. 1, 30 (1968); United States v. Golab, 325 F.3d 63,
66 (1st Cir. 2003). Determining whether a reasonable suspicion
-9-
exists requires an objective inquiry. Bolton v. Taylor, 367 F.3d
5, 7 (1st Cir. 2004). An "inchoate and unparticularized suspicion
or 'hunch'" of criminal activity is insufficient. Terry, 392 U.S.
at 27. Reasonable suspicion is evaluated in the context of the
totality of the circumstances and demands a "practical, commonsense
approach." United States v. Sowers, 136 F.3d 24, 28 (1st Cir.
1998).
We must determine whether the officers' actions in
stopping Jones, after seeing him and his companion running down the
street, were justified at their inception and whether the actions
taken were "reasonably responsive to the circumstances justifying
the stop in the first place as augmented by information gleaned by
the officers during the stop." United States v. Maguire, 359 F.3d
71, 76 (1st Cir. 2004) (internal quotation omitted). An officer
may draw on his "own experience and specialized training to make
inferences from and deductions about the cumulative information .
. . that might well elude an untrained person." United States v.
Arvizu, 534 U.S. 266, 273 (2002) (citations and internal quotation
omitted).
We hold the stop was justified. Broderick and Moriarty
saw two men sprinting down Appleton Street on a dark, rainy night
at 4:00 a.m. wearing hooded sweatshirts tightly wound around their
heads and wearing light, white gloves of a type that would seem
-10-
inappropriate as protection against the cold weather.1 There had
been an abnormal number of robberies and break-ins around the
neighborhood. Moriarty spied from the cruiser a third man, Weaver,
walking ahead of the two men in the same direction in which they
were sprinting. Jones argues that it was natural for the two men,
on a rainy night, to be wearing hoods and to be sprinting in order
to escape the rain. He further notes that "While [reports of crime
in the area] may put officers on their guard, they cannot alone
justify a stop. Were the law otherwise, any person who happened to
wander into a high-crime area late at night, in the immediate
aftermath of a serious crime, could be detained." United States v.
Woodrum, 202 F.3d 1, 7 (1st Cir. 2000) (citation omitted). But
reports of crime in the area was not the sole fact here warranting
suspicion of criminal activity. There were other facts that, taken
in context, were suspicious. The wearing of hooded sweatshirts
tightly wrapped around their heads, while conceivably protecting
against the weather, also suggested an intent to disguise the two
men's identities. That they wore gloves of a type less suited to
keeping out the cold than concealing fingerprints pointed towards
1
Officer Broderick described the gloves as follows when
questioned by the government: "Q: Now these particular gloves--and
were they unusual at all to you? A: Yes. Q: Why were they
unusual? A: To me winter gloves are, they're big, puffy gloves
that keep your hands warm. They're not form-fitting, tight gloves
that don't look like they provide warmth. Q: And what did these
gloves look like? A: The tight, form-fitting gloves that wouldn't
provide warmth. Like I said, that we use for funeral details."
-11-
a criminal design. The men were sprinting, and given the third
person walking ahead, might have been planning to catch up to and
rob him. It was dark; the time and conditions favored the
commission without detection of crimes like street robbery, car
theft, burglary and the like. Taking these factors all together,
the totality of the circumstances created an articulable,
reasonable suspicion of criminal activity, and thus the stopping of
Jones and his companion was within the officers' authority.
3. Probable Cause to Arrest
Even if a brief investigatory stop were legitimate, Jones
argues that the officers lacked probable cause to arrest him after
Moriarty had discovered the gun on top of the trash bag. "Probable
cause exists when police officers, relying on reasonably
trustworthy facts and circumstances, have information upon which a
reasonably prudent person would believe the suspect had committed
or was committing a crime." United States v. Young, 105 F.3d 1, 6
(1st Cir. 1997). The inquiry into probable cause focuses on what
the officer knew at the time of the arrest, United States v. Brown,
169 F.3d 89, 91 (1st Cir. 1999), and should evaluate the totality
of the circumstances. United States v. Reyes, 225 F.3d 71, 75 (1st
Cir. 2000). As the Supreme Court has recently reiterated, however,
the probable cause inquiry is not necessarily based upon the
offense actually invoked by the arresting officer but upon whether
the facts known at the time of the arrest objectively provided
-12-
probable cause to arrest. Devenpeck v. Alford, 125 S.Ct. 588, 594
(2004). Thus it is irrelevant that the booking officer cited Jones
for "intent to rob while armed." If, on the facts known to the
arresting officers, there was probable cause to believe he was
committing another crime, the arrest was valid.
The government argues that the police officers had enough
information at the time of the arrest to have probable cause to
believe that Jones as well as Whiteside knowingly possessed a
firearm without a license, in violation of state law, to wit M.G.L.
c. 269, § 10. Jones responds, however, that it was his companion,
Whiteside, who possessed the gun. Officer Moriarty found the
discarded weapon in the vicinity where Broderick had earlier seen
Whiteside stop and bend down. Jones himself had had no firearm
when earlier stopped, nor did he advance down the street to the
place where the gun was eventually recovered. Without evidence he
actively possessed the gun after the officers arrived on the scene,
Jones contends the police lacked probable cause to arrest him for
possessing it without a license.
But while Jones did not actually possess the gun at the
time the officers apprehended him, the surrounding circumstances
afforded probable cause to believe he had constructive possession
of it. This was enough to violate the Massachusetts illegal
possession statute. See, e.g., Commonwealth v. Sann Than, 59 Mass.
App. Ct. 410, 413, 796 N.E.2d 419, 422 (2003) (instructions on
-13-
constructive possession in a charge under M.G.L. c. 269, § 10).
Cf. Commonwealth v. Moore, 54 Mass. App. Ct. 334, 343, 765 N.E.2d
268, 275 (2002) (related statute, M.G.L. c. 269, § 11C, makes no
distinction between constructive and actual possession for purposes
of presumption that possession of firearm with obliterated serial
number is prima facie evidence of violation of the section). Under
Massachusetts law, constructive possession implies "knowledge
coupled with the ability and intention to exercise dominion and
control." Commonwealth v. Garcia, 409 Mass. 675, 686, 569 N.E. 2d
385, 392 (1991) (internal quotations omitted). Mere presence at
the scene of criminal activity is not sufficient. United States v.
Pardo, 636 F.2d 535, 549 (D.C. Cir. 1980). Close proximity to the
firearm, however, so as to be able "to pick it up at any time,"
suffices to establish the power (or "ability") component. United
States v. McLean, 409 F.3d 492, 504 (1st Cir. 2003).
In the present case, Whiteside's possession of a live
gun, together with the many other facts implying that Jones and
Whiteside when stopped were engaged together in joint criminal
activity, provided probable cause to infer Jones' constructive
ownership of the live weapon. The two men were seen by the
officers in one another's company racing down the street, under
circumstances suggesting an intent to rob a man seen walking ahead.
Both were muffled in their hooded sweatshirts; Jones was found to
be wearing latex gloves, while Whiteside wore one latex glove.
-14-
Latex gloves offer little if any protection against the weather.
They most obviously would serve the function of preventing
fingerprints from being left on items like the gun itself or other
objects encountered while engaged in criminal activity. Wearing
such gloves was thus a gesture suggesting an intention to exercise
dominion and control over the gun as well as to engage in other
prospective criminal conduct. The fact that Jones wore two gloves
and Whiteside only one suggests that if the gun were to be used, it
would be passed to Jones to handle it. When the police cruiser
stopped and apprehended Jones, Whiteside kept running and attempted
to dispose of the gun for which neither man had a license. The
totality of these circumstances gave rise to a reasonable inference
that the two men were partners in crime, and that the firearm, with
its chambered round, was integral to their joint venture.2
We do not imply that the above evidence would necessarily
suffice to sustain a finding that Jones was guilty beyond a
reasonable doubt of the gun possession charge. Probable cause,
however, does not require "evidence sufficient to convict the
individual, but merely enough to warrant a reasonable belief that
2
Objectively viewed, these same facts might have also provided
probable cause to arrest the two men for attempted armed assault
with intent to rob, i.e., the "intent to rob while armed" offense
for which they were booked following arrest. While later
investigation appears to have led to a decision not to prosecute
Jones for attempting to rob Weaver, the facts at the time of the
arrest were not inconsistent with this hypothesis. We do not
decide this question as the government did not pursue this theory
on appeal.
-15-
he was engaging in criminal activity." United States v. Link, 238
F.3d 106, 110 (1st Cir. 2001) (citation omitted). Here, the gun,
with a live round in the chamber, was actively possessed by one of
the two closely associated men; there was compelling evidence, most
notably the latex gloves, as well as the firearm itself, that both
men had the intention to use the weapon in their joint criminal
enterprise; and both men acknowledged to the officers that they
were without licenses to carry a gun. In the circumstances, we
think it was objectively reasonable to infer that both men knew
about the gun. It was also reasonable to infer -- the two men
being nearly side-by-side when first seen running down the street
-- that the gun was readily transferable from one to the other,
providing Jones with the ability to possess it, and that each
intended to be able to use the weapon as needed. That Whiteside
may have been carrying the weapon at the time the officers
intervened does not rule out Jones' constructive possession:
"possession can be joint." See McLean, 409 F.3d at 504. While
Whiteside appears to have had actual possession when the officers
came on the scene, the surrounding circumstances reasonably implied
probable cause to attribute constructive possession to his
companion, Jones.
4. Attenuation and Independent Means
As noted above, because we find that the police officers
had reasonable suspicion to stop Jones and probable cause to arrest
-16-
him, we do not reach the alternate ground of the district court
that, even if the stop and arrest had been illegal, the discovery
of the evidence was legitimate because of dissipation of the taint
or the independent discovery doctrine.
B. Booker Claim
Prior to his sentencing hearing, Jones moved for a
downward departure on the grounds of diminished mental capacity
pursuant to U.S.S.G. § 5K2.13 and extraordinary mental and
emotional condition pursuant to U.S.S.G. § 5H1.3.
To support his claim of diminished mental capacity, Jones
submitted a brief family history and the expert testimony of a
forensic psychologist, Dr. Eric Mart, who concluded that Jones was
mildly retarded and had "problems with attention and executive
functioning...which are areas of deficiency above and beyond his
generally low IQ."
Section 5H1.3 provides that "[m]ental and emotional
conditions are not ordinarily relevant in determining whether a
sentence should be outside the applicable guideline range, except
as provided in [§ 5K2.13]." § 5K2.13 provides that:
A downward departure may be warranted if (1) the
defendant committed the offense while suffering from a
significantly reduced mental capacity and (2) the
significantly reduced mental capacity contributed
substantially to the commission of the offense.
Similarly, if a departure is warranted under this policy
statement, the extent of the departure should reflect the
extent to which the reduced mental capacity contributed
to the commission of the offense.
-17-
However, the court may not depart below the applicable
guideline range if (1) the significantly reduced mental
capacity was caused by the voluntary use of drugs or
other intoxicants; (2) the facts and circumstances of the
defendant's offense indicate a need to protect the public
because the offense involved actual violence or a serious
threat of violence; (3) the defendant's criminal history
indicates a need to incarcerate the defendant to protect
the public; or (4) the defendant has been convicted of an
offense under chapter 71, 109A, 110 or 117, of Title 18,
United States Code.
Noting the limitation "ordinarily" in § 5H1.3, Jones argued that
his was an extraordinary case warranting departure even if it did
not fit the § 5K2.13 exception because of his "significant
intellectual and information processing deficiencies" and because
his mental condition was "outside the norm." The government
opposed the motion on the grounds that a § 5K2.13 departure was
unavailable since Jones had committed a crime of violence.
Moreover, the government argued, Jones' case was not so
extraordinary as to warrant the departure even if the "ordinarily"
language could be deemed to provide some degree of "wiggle room."
See United States v. Pullen, 89 F.3d 368, 370 (7th Cir. 1996).
The district court concluded that a departure under §
5K2.13 was not available because of the crime of violence.
Further, the court observed that while there is room for
disagreement over whether the "ordinarily" language in § 5H1.3
provides some latitude for departure, any deficits of the defendant
"would have to be of an order so exceptional or extraordinary as to
take the defendant out of the pool of defendants similarly situated
-18-
who have equally compelling life stories and have faced equally
compelling difficulties. I just do not think that that is this
case." The court encouraged Jones to raise the issue on appeal.
Also at sentencing, Jones sought to have the court
disregard the two juvenile convictions in his record because the
sometimes unreliable criminal record-keeping CORI system was the
only basis for their inclusion. The court agreed and did not take
the juvenile convictions into account at sentencing, thus lowering
Jones' Criminal History Category from II to I.
On appeal, Jones concedes that he did not preserve in the
district court his potential Booker claim that the district court
would have given him a lower sentence had the Guidelines not been
mandatory. Therefore, this court reviews the sentencing decision
for (1) error that is (2) plain and that (3) affects substantial
rights and (4) seriously affects the fairness, integrity, or public
reputation of judicial proceedings. United States v. Gonzalez-
Mercado, 402 F.3d 294, 302 (1st Cir. 2005); United States v.
Antonakopoulos, 399 F.3d 68, 76 (1st Cir. 2005). "The Booker error
is that the defendant's Guidelines sentence was imposed under a
mandatory system." Id. at 75. The first two elements of the plain
error standard are satisfied where, as here, a defendant's sentence
was imposed by reference to a mandatory system of federal
sentencing guidelines. Id. at 77.
-19-
To meet the third requirement of the plain error test,
"ordinarily the defendant must point to circumstances creating a
reasonable probability that the district court would impose a
different sentence more favorable to the defendant under the new
'advisory Guidelines' Booker regime." Id. at 75. A defendant
cannot satisfy the third element by a "mere assertion that the
court might have given [him] a more favorable sentence." Id. at
80. Likewise, the fact that the district court sentenced Jones to
the low end of the applicable Guidelines range does not, by itself,
show a reasonable probability of a lesser sentence under the
advisory system. United States v. Kornegay, 410 F.3d 89, 99-100
(1st Cir. 2005).
A defendant must show, "either in the existing record or
by plausible proffer," that "there is reasonable indication that
the district judge might well have reached a different result under
advisory guidelines." United States v. Heldeman, 402 F.3d 220, 224
(1st Cir. 2005). If a district court made statements suggesting
that it would have been inclined to impose a lesser sentence but
was prevented from doing so by the mandatory nature of the
Guidelines, that indicates that there is a reasonable probability
that the defendant's sentence was affected by a Booker error.
Heldeman, 402 F.3d at 224; Antonakopoulos, 399 F.3d at 81.
Jones argues that the comments by the district court
judge at the sentencing hearing show that there is a reasonable
-20-
probability that the district court would impose a different
sentence more favorable to the defendant. The government
disagrees. As both parties quote selectively from the district
court's remarks at the sentencing hearing, we set forth in toto the
court's comments regarding its decision not to depart downward:
Of course we are, in a sense, confined somewhat to the
margins of the case, given the fact that there is a
seven-year mandatory consecutive sentence which we all
agree simply has to be imposed under operation of law.
I think it is a difficult issue. As I read 5H1.3, the
intent of the Guidelines is to exclude consideration of
mental and emotional state unless by cross-reference it
is relevant to the consideration of another ground for
departure set out in Subpart 2 of k. And I think
everyone instantly went to exactly the right Policy
Statement in the Subpart, which is 5K2.13, which would be
the Guideline that one would look to for a departure, but
for the fact of actual violence and threat of violence in
the underlying crime.
Whether the general Policy Statement in H itself
establishes an independent ground for departure, I think
is one that reasonable jurists could disagree over,
although I defer to Judge Posner's reading of the word
"ordinarily" [Pullen, 89 F.3d at 370] as operating
independently of the cross-reference to K Subpart 2.
But if it is a basis for independent departure, while I
agree that Dr. Mart is an excellent witness, and I have
no reason to doubt anything he said in his assessment of
the defendant, and while I think the defendant has
genuine deficits, if H is a ground for a departure, they
would have to be of an order so exceptional or
extraordinary as to take the defendant out of the pool of
defendants similarly situated who have equally compelling
life stories and have faced equally compelling
difficulties.
I just do not think that that is this case. So I will
decline to depart under either 5K2.13 or 5H1.3.
The district judge then advised defense counsel that he
-21-
might on the appeal raise this 5H1.3 issue. I, during
the break, was looking desperately for any case in the
First Circuit, and I did not find one that discusses it
specifically, and opposed to mental health problems
generally. There are those cases that use the
extraordinary and exceptional language, but I did not see
any that address the precise issue that you were raising.
We interpret the above remarks as indicating the district
court's belief that even if it had had the discretion under § 5H1.3
to depart downward in an extraordinary case, it did not consider
Jones' case to be out of the ordinary, hence not rising to the
level of extraordinary cases for which departure would be
warranted. While the court's language cannot be said to foreclose
the possibility of a lesser sentence under advisory guidelines, it
in no way indicates there is a reasonable probability that it would
impose a lower sentence under advisory guidelines. The judge
showed commendable concern and thoughtfulness while pondering the
sentence, but we see little to suggest anything else. Jones argues
that § 5K1.2's prohibition against a departure prevented him from
having the judge consider mitigating evidence at this sentencing,
but the judge did consider the mitigating evidence presented by
defense counsel and heard the testimony of the psychologist. We
conclude that Jones has failed to demonstrate a reasonable
probability of a different sentence and thus decline to remand.
The defendant's conviction and sentence are affirmed.
-22-
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 05-16002
July 21, 2006
Non-Argument Calendar THOMAS K. KAHN
________________________ CLERK
BIA Nos. A95-218-180 & A95-218-181
VICTOR HUGO PENARANDA PLATA,
MERY VERGEL DE PENARANDA,
ANGELA CECILIA ACUNA CARDENAS,
CARLOS ADOLFO PENARANDA VERGEL,
Petitioners,
versus
U.S. ATTORNEY GENERAL,
Respondent.
________________________
Petition for Review of a Decision of the
Board of Immigration Appeals
_________________________
(July 21, 2006)
Before TJOFLAT, MARCUS and PRYOR, Circuit Judges.
PER CURIAM:
Victor Hugo Penaranda-Plata and Mery Vergel de Penaranda and their son,
Carlos Adolfo Penaranda-Vergel, and his wife, Angela Cecilia Acuna Cardenas, all
natives and citizens of Colombia, petition for review of the order of the Board of
Immigration (BIA) denying Penaranda-Plata’s motion to reconsider the BIA’s
affirmance of the immigration judge’s (IJ) removal order. On appeal, Petitioners
do not raise any arguments pertaining to the denial of the motion to reconsider,
instead challenging only the underlying removal order. As we conclude we lack
jurisdiction to review the removal order, we dismiss the petition in part and deny it
in part.
On April 3, 2002, the IJ denied Penaranda-Plata’s application for asylum,
withholding of removal, and CAT protection. Almost two years later, on February
25, 2004, Penaranda-Plata filed an appeal in the BIA. On July 7, 2005, the BIA
affirmed the IJ’s decision in a written opinion. Notably, Penaranda-Plata did not
immediately appeal this ruling. Instead, on August 18, 2005, he filed with the BIA
a motion to reconsider its July 7, 2005 decision. On October 7, 2005, the BIA
denied the motion to reconsider on the basis that it was untimely.
Penaranda-Plata then filed his petition for review in this Court. In his
petition, filed on October 31, 2005, he specified that he was appealing both the
BIA’s July 7, 2005 order affirming the IJ’s removal order and the BIA’s October 7,
2005 order denying reconsideration. In his initial brief, Plata argues only that the
IJ erred by denying his application for asylum and raises no argument as to the
2
denial of his motion for reconsideration.
As an initial matter, we consider the scope of our jurisdiction, an issue we
review de novo. Resendiz-Alcaraz v. U.S. Att’y Gen., 383 F.3d 1262, 1266 (11th
Cir. 2004). An alien seeking review of a BIA decision must file a petition for
review within 30 days of the BIA’s final order of removal. See INA § 242(b)(1), 8
U.S.C. § 1252(b)(1) (2000). A petition for review is considered to be filed when it
is received by the clerk of the Court. Fed. R. App. P. 25(a)(2)(A).
“[T]he filing of a motion to reopen or a motion to reconsider shall not stay
the execution of any decision made in the case.” 8 C.F.R. § 1003.2(f). The
Supreme Court has ruled that the filing of a motion with the BIA does not affect
the finality of the order and “does not toll the time to petition for review.” Stone v.
INS, 514 U.S. 386, 394-95 (1995).
Here, in order for us to have jurisdiction to review the BIA’s July 7, 2005
decision, Plata was required to file his petition for review by August 8, 2005, or 30
days after the July 7, 2005, decision.1 See INA § 242(b)(1), 8 U.S.C. § 1252(b)(1)
(2000). He filed no such timely petition for review. And his filing of a motion for
reconsideration did not toll his time to seek review in this Court. Stone, 514 U.S.
at 394-95. Despite the fact that the October 31, 2005 petition for review specified
1
Because the 30th day fell on August 6, 2005, a Saturday, the filing was due the
following Monday, August 8, 2005. See 11th Cir. R. 26(a)(3).
3
both the July 7, 2005 order and the October 7, 2005 order, it was untimely as to the
former such that we lack jurisdiction to review the merits of that decision.
See Stone, 514 U.S. at 394-95; INA § 242(b)(1), 8 U.S.C. § 1252(b)(1) (2000).
We, therefore, dismiss the petition to the extent that the arguments presented relate
to the July 7, 2005, decision.
As for the BIA’s order denying reconsideration, which was enumerated in
the petition for review filed in this Court, Petitioners raise no arguments
concerning that order in their appellate brief before this Court. Accordingly, they
are deemed to have abandoned any argument concerning the one order over which
we could assert jurisdiction. Sepulveda v. U.S. Att’y Gen., 401 F.3d 1226, 1228 n.
2 (11th Cir. 2005) (holding that where an appellant fails to raise arguments
regarding an issue on appeal, that issue is deemed abandoned).
We lack jurisdiction to review the removal order challenged in the initial
brief. Accordingly, we dismiss the petition for review.
PETITION DISMISSED IN PART AND DENIED IN PART.
4
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374 F.3d 1015
Rochelle PHILLIPS, Kalford C. Fadem, Pond Equities, Peter Kaltman, Harris Holdings, LLC, et al., Plaintiffs-Appellees,v.SCIENTIFIC-ATLANTA, INC., Wallace G. Haislip, James F. McDonald, Defendants-Appellants.
No. 03-13008.
United States Court of Appeals, Eleventh Circuit.
June 22, 2004.
Oscar N. Persons, Susan Elaine Hurd, Kathleen D. Zylan, Alston & Bird, Atlanta, GA, for Defendants-Appellants.
Elizabeth Ann Leland, Lynn L. Sarko, Juli Farris Desper, Seattle, WA, David A. Bain, Craig Gordon Harley, Meryl W. Edelstein, Chitwood & Harley, Atlanta, GA, Sherrie Raiken Savett, Berger & Montague, P.A., Philadelphia, PA, for Plaintiffs-Appellees.
Kathryn S. Zecca, Robbins, Russell, Englert, Orseck & Untereiner, LLP, Washington, DC, for Amicus Curiae Chamber of Commerce of U.S.
Appeal from the United States District Court for the Northern District of Georgia.
Before ANDERSON and BLACK, Circuit Judges, and NANGLE*, District Judge.
ANDERSON, Circuit Judge:
1
This appeal concerns one aspect of the pleading standard of the Private Securities Litigation Reform Act ("PSLRA" or "Reform Act"). Plaintiffs contend that factual allegations may be aggregated to give rise to a strong inference of scienter under the PSLRA. Defendants argue that factual allegations may not be aggregated to infer scienter, and that scienter must be inferred for each defendant and with respect to each alleged violation of the statute. We conclude that factual allegations may be aggregated to infer scienter and must be inferred for each defendant with respect to each violation.
I. INTRODUCTION
2
This appeal arises from a securities fraud class action against Scientific-Atlanta, Inc. ("S-A") and James F. McDonald and Wallace G. Haislip, the company's CEO and CFO (the "individual defendants"). Plaintiffs allege that Defendants falsely portrayed S-A's financial performance and exaggerated demand for its products to the detriment of investors and in violation of § 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. § 78j(b), and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5. They also allege that the individual defendants are liable for S-A's violations as "controlling persons" of S-A under § 20(a) of the Exchange Act. 15 U.S.C. § 78t(a). Defendants moved to dismiss the action for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and failure to plead fraud with particularity under Rule 9(b) and the PSLRA. 15 U.S.C. § 78u-4(b). The district court denied the motion, finding that the complaint stated a claim and pled fraud with particularity. In re Sci.-Atlanta, 239 F.Supp.2d 1351, 1362-63, 1364-65 (N.D.Ga.2002). The district court noted that although individual allegations in the complaint, considered in isolation, may not have given rise to a strong inference of scienter, the allegations created such an inference when viewed collectively. Id. at 1366. Defendants petitioned for interlocutory appeal under 28 U.S.C. § 1292(b), and the district court certified the narrow question of whether "allegations that standing alone do not give rise to a `strong inference' of scienter under the [PSLRA] may nevertheless be aggregated to create such a finding." We granted the petition, and we now affirm.
II. DISCUSSION
3
We note at the outset that Defendants have largely conceded the narrow, certified question and have attempted to parlay the appeal into a much broader review of the district court. Defendants seem to concede that facts which individually do not give rise to a strong inference of scienter may be aggregated to rise to the necessary showing, but they go on to argue that such aggregated facts must be applied to each defendant with respect to each alleged violation of the statute. We address each issue in turn.
A. Aggregating Pleadings to Infer Scienter
4
Under the PSLRA, a securities fraud complaint must plead fraud with particularity and allege facts giving rise to a strong inference of scienter.1 The statute states that the complaint "shall specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed," 15 U.S.C. § 78u-4(b)(1), and "shall, with respect to each act or omission alleged to violate this chapter, state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind," 15 U.S.C. § 78u-4(b)(2). Nothing in this language suggests that scienter may only be inferred from individual facts, each of which alone gives rise to a strong inference of scienter, rather than from an aggregation of particularized facts. We readily join the courts that have interpreted the PSLRA to permit the aggregation of facts to infer scienter. See Broudo v. Dura Pharms., Inc., 339 F.3d 933, 940 (9th Cir.2003) ("This court has made clear that allegations of scienter must be collectively considered."); In Re Cabletron Sys., 311 F.3d 11, 39 (1st Cir.2002) ("`The plaintiff may combine various facts and circumstances indicating fraudulent intent' ... to satisfy the scienter requirement.") (quoting Aldridge v. A.T. Cross Corp., 284 F.3d 72, 82 (1st Cir.2002)); Abrams v. Baker Hughes, Inc., 292 F.3d 424, 431 (5th Cir.2002) ("The appropriate analysis... is to consider whether all facts and circumstances `taken together' are sufficient to support the necessary strong inference of scienter on the part of the plaintiffs."); Fla. State Bd. of Admin. v. Green Tree Fin. Corp., 270 F.3d 645, 660 (8th Cir.2001) ("[U]nder the Reform Act, a securities fraud case cannot survive unless its allegations collectively add up to a strong inference of the required state of mind."); Rothman v. Gregor, 220 F.3d 81, 92 (2nd Cir.2000) ("Taken together with the allegations of poor sales and the pleadings in various lawsuits filed by GT, the Appellants have alleged sufficient facts to support a strong inference of recklessness."); see also Bourjaily v. United States, 483 U.S. 171, 179-80, 107 S.Ct. 2775, 97 L.Ed.2d 144 (1987) ("[I]ndividual pieces of evidence, insufficient in themselves to prove a point, may in cumulation prove it. The sum of an evidentiary presentation may well be greater than its constituent parts.").2 As noted above, Defendants appear to have conceded this point but then seek to raise other arguments as well. Below we address only one of their additional arguments.
5
B. Showing Scienter for Each Defendant with Respect to Each Alleged Violation
6
Notwithstanding that the above issue was the only one certified for appeal, Defendants also argue that a strong inference of scienter must be found with respect to each defendant and with respect to each act or omission alleged to violate the statute. We exercise our discretion3 to address that issue because it is closely related to the certified question. We hold that scienter must be found with respect to each defendant and with respect to each alleged violation of the statute. The text of the PSLRA requires that plaintiffs, "with respect to each act or omission alleged to violate this chapter, state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind." 15 U.S.C. § 78u-4(b)(2) (emphasis added). We believe that the plain meaning of the statutory language compels the conclusion that scienter must be alleged with respect to each alleged violation of the statute.4 Although the plain language is less compelling with respect to alleging the scienter of each defendant, the statute does use the singular term "the defendant," and we believe that the most plausible reading in light of congressional intent5 is that a plaintiff, to proceed beyond the pleading stage, must allege facts sufficiently demonstrating each defendant's state of mind regarding his or her alleged violations. Nor do we perceive that requirement as posing unrealistic burdens on plaintiffs.6 Cf. Southland Secs. Corp. v. Inspire Ins. Solutions, 365 F.3d 353, 364-65 (5th Cir.2004) ("These PSLRA references to `the defendant' may only reasonably be understood to mean `each defendant' in multiple defendant cases[.]").
7
Despite our agreement with Defendants on this point, our holding does not aid them because Plaintiffs' complaint sufficiently alleges facts giving rise to a strong inference of scienter on the part of each defendant alleged to have committed each violation of the statute.7 Finding no error, we affirm the district court.
8
Defendants frame this issue as the viability of the "group pleading doctrine" in the wake of the PSLRA, a question the courts are now debating. See, e.g., Cabletron, 311 F.3d at 40 (identifying the issue without deciding it); Southland, 365 F.3d at 363-65 (holding that group pleading did not survive the PSLRA). The group pleading doctrine in securities litigation varies somewhat among the circuits, but it can be broadly characterized as a presumption of group responsibility for statements and omissions in order to satisfy the particularity requirements for pleading fraud under Federal Rule of Civil Procedure 9(b). See, e.g., Cabletron, 311 F.3d at 40 (1st Cir.2002) (identifying one form of "the group pleading presumption" as an approach in which "the court need not consider the liability of each individual defendant, but may attribute all the statements to all the defendants as `collective actions'").8 In the case that spawned the group pleading doctrine, Wool v. Tandem Computers, Inc., 818 F.2d 1433 (9th Cir.1987), plaintiffs needed a group pleading theory to save their complaint from dismissal because they had "fail[ed] to attribute particular fraudulent statements or acts to each individual defendant." Id. at 1440. Rather, plaintiffs had attributed fraudulent conduct to "all defendants." Id. The Ninth Circuit determined that such pleading satisfied Rule 9(b)'s particularity requirement because
9
In cases of corporate fraud where the false or misleading information is conveyed in prospectuses, registration statements, annual reports, press releases, or other "group-published information," it is reasonable to presume that these are the collective actions of the officers. Under such circumstances, a plaintiff fulfills the particularity requirement of Rule 9(b) by pleading the misrepresentations with particularity and where possible the roles of the individual defendants in the misrepresentations.
10
Id., at 1440 (citations omitted). Some courts have applied the group pleading doctrine to impute the actions or knowledge of some defendants to other defendants, or to presume action or knowledge solely from a defendant's title or position. See, e.g., In re Solv-Ex Corp. Sec. Litig., 210 F.Supp.2d 276, 283 (S.D.N.Y.2000) ("Under the group pleading doctrine, Plaintiffs may rely on a presumption that statements in prospectuses, registration statements, annual reports, press releases, or other group-published information, are the collective work of those individuals with direct involvement in the everyday business of the company.") (quotation marks omitted); In re Livent, Inc. Sec. Litig., 78 F.Supp.2d 194, 219 (S.D.N.Y.1999) ("[G]roup pleading doctrine ... permits a plaintiff to allege that misstatements contained in company documents may be presumed to be the work of the company's officers and directors.") (quotation marks omitted).
11
It is not necessary to address the group pleading doctrine for the disposition of this appeal. Unlike in Tandem Computers, Plaintiffs here have attributed allegedly fraudulent statements and omissions to specific defendants. We have reviewed9 the complaint and we conclude that it contains factual allegations amply linking each defendant to his alleged violations of the statute and attributing the required scienter to each defendant with respect thereto. Accordingly, for purposes of this appeal, Plaintiffs need not rely upon the group pleading doctrine.10
III. CONCLUSION
12
For the foregoing reasons, the district court is affirmed.
13
AFFIRMED.
Notes:
*
Honorable John F. Nangle, United States District Judge for the Eastern District of Missouri, sitting by designation
1
The instant appeal does not implicate the standard a plaintiff must meet in pleading scienter. For a full discussion of that standard, seeBryant v. Avado Brands, Inc., 187 F.3d 1271 (11th Cir.1999). We use the term "scienter" in the opinion to refer to the required state of mind according to the law of this Circuit.
2
We do not readIn re Rockefeller Ctr. Props. Secs. Litig., 311 F.3d 198, 224-25 (3d Cir.2002), as inconsistent with the forgoing cases. Although it held that each allegation should be analyzed individually for particularity, and although it would permit only a limited totality of the circumstances approach in that context, the Third Circuit said nothing about aggregation of several factual allegations contributing to scienter.
3
Although we have discretion to address issues other than those certified, we also have discretion not to do soSee Moore v. Liberty Nat'l Life Ins. Co., 267 F.3d 1209, 1219 (11th Cir.2001). In this case, we exercise our discretion to go beyond the certified question only in the very limited respect noted in the text. In exercising our discretion only to this very limited extent, we note that the question actually certified was not raised in a timely and clear fashion in the district court until after the district court's dispositive opinion. Then, on appeal, defendants largely concede the question actually certified, and spend the bulk of their time and effort on other issues, with respect to which the district court expressly denied certification. Under these circumstances, we decline to permit defendants to parlay a discrete certified question, now largely conceded, into a wide-ranging relitigation on appeal of the district court litigation.
4
AlthoughTheoharous v. Fong, 256 F.3d 1219 (11th Cir.2001), does not expressly so hold, it suggests that a plaintiff must show scienter with respect to each alleged violation.
5
Congress contemplated that plaintiffs ordinarily would be required to conduct a thorough investigation before filing suit to ensure that the suit has a basis in factSee, e.g., In re Theragenics Corp. Sec. Litig., 105 F.Supp.2d 1342, 1351 (N.D.Ga.2000) ("Prior to the Reform Act, [Federal Rule of Civil Procedure] 11 required that an attorney in every case must investigate claims before filing a complaint. Congress, rightly or wrongly, decided that the protection of Rule 11 against frivolous lawsuits was not enough.").
6
For example, we have held that all relevant facts and reasonable inferences therefrom may be aggregated to establish the necessary "strong inference that the defendant acted with the required state of mind."See supra § II.A. (citing 15 U.S.C. § 78u-4(b)(2)).
7
We have specifically examined only the allegations comprising the three categories of violations which the district court identified and discussed. We expressly decline to exercise our discretion to go further beyond the certified question to scrutinize any other alleged violations for the reasons indicatedsupra in note 3. Moreover, we note the Defendants have not in this appeal pointed to any errors relating specifically to alleged violations other than those identified and discussed by the district court.
8
Rule 9(b) states, "In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally." Fed.R.Civ.P. 9(b)
9
See supra note 7.
10
For example, even the Fifth Circuit, which has rejected the group pleading doctrine, recognizes that "corporate documents that have no stated author or statements within documents not attributed to any individual may be charged to one or more corporate officers provided specific factual allegations link the individual to that statement at issue."Southland, 365 F.3d at 365. The allegations in the instant case amply satisfy the Fifth Circuit standard.
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64 F.3d 658
NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Warren MELVIN, Plaintiff-Appellant,v.NORTH CAROLINA DEPARTMENT OF CORRECTIONS; C.M. Creecy;Charles E. Hill; Lieutenant McNorwood; OfficerPowell; Sergeant Creecy, Defendants-Appellees.
No. 95-6538.
United States Court of Appeals, Fourth Circuit.
Submitted July 25, 1995.Decided Aug. 21, 1995.
Warren Melvin, Appellant Pro Se.
Before HALL, HAMILTON, and WILLIAMS, Circuit Judges.
OPINION
PER CURIAM:
1
Warren Melvin appeals from a district court order dismissing his 42 U.S.C. Sec. 1983 (1988) complaint as frivolous. We affirm in part, vacate in part, and remand.
2
Melvin alleged that he was injured to the extent of cuts and abrasions during an altercation with state prison officers as they attempted to take his radio from him. Melvin conceded that he was playing the radio at full volume to annoy the guards so that they would attend to his complaints regarding his segregative custody status. After the guards obtained control of the radio, Melvin made a racial slur directed at one of them. Melvin alleged that the guard, Creecy, responded by punching him about the face and neck while another guard, Powell, held Melvin's already handcuffed hands so that Melvin could not defend himself while another guard watched the beating. The district court found that the de minimis injuries alleged by Melvin were insufficient to state any Eighth Amendment claim. The district court also held that Melvin's claim regarding an allegedly improper custody status did not state a cognizable due process issue.
3
We find that the injuries resulting from the taking of the radio were, in fact, de minimis, and that the guards acted with no excessive force in their valid attempt to gain control of Melvin's radio. Thus, the district court properly found that this claim was frivolous. Hudson v. McMillian, 503 U.S. 1, 7 (1992) (no excessive force if amount of force commensurate with need therefor). The officers' actions in struggling with Melvin over the radio and thereby damaging it would be, at most, negligence. Thus, any damage to the radio provides no basis for a due process deprivation of property claim. Daniels v. Williams, 474 U.S. 327 (1986). And the district court properly found that Melvin could not state a due process claim with regard to his custody status. Sandin v. Conner, 63 U.S.L.W. 4601, 4604-05 (U.S.1995); see also Berrier v. Allen, 951 F.2d 622, 624-25 (4th Cir.1991) (no liberty interest in North Carolina in not being placed in segregation).
4
However, we find that Melvin survives the Sec. 1915(d) dismissal standard regarding the two officers' conduct in response to his racial slur. If the situation was as Melvin stated it in his complaint, the officers may have used force "of a sort 'repugnant to the conscience of mankind,' " Norman v. Taylor, 25 F.3d 1259, 1263 n. 4 (4th Cir.1994) (en banc), quoting Hudson v. McMillian, 112 S.Ct. 995, 999 (1992), in the described attack of a handcuffed prisoner for his mere use of a racial slur. Cf. Miller v. Leathers, 913 F.2d 1085, 1088-89 (4th Cir.1990) (en banc), cert. denied, 498 U.S. 1109 (1991). This is true even though the injuries Melvin suffered were not significant. Hudson, 503 U.S. at 7-9. Accordingly, we vacate and remand the district court's order only with regard to the two officers allegedly directly involved in the altercation, because Melvin's claims of supervisory liability are insufficient to withstand a frivolity inquiry, and the district court properly found there was no possibility of recovery against other officers in their supervisory nature. We stress, however, that we take no position as to whether the complaint, when more fully developed, will support such a claim.
5
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.
6
AFFIRMED IN PART, VACATED IN PART, AND REMANDED
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765 N.W.2d 331 (2009)
Dionne WEATHERS-TAYLOR, Personal Representative of the Estate of Melvin Goodman, Deceased, Plaintiff-Appellee,
v.
H. Rex RUETTINGER, D.O., and H. Rex Ruettinger, D.O., P.C., Defendants-Appellants, and
Botsford General Hospital, Defendant.
Docket No. 138069. COA No. 265511.
Supreme Court of Michigan.
May 27, 2009.
Order
On order of the Court, the application for leave to appeal the December 2, 2008 judgment of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the question presented should be reviewed by this Court.
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79 F.3d 940
96 Cal. Daily Op. Serv. 2038, 96 Daily JournalD.A.R. 3464Leonard DAVE; Bill Giersch; Mary Giersch; Louise Mattson;Stan Crocker; Noreen Crocker; B.J. Kessinger;Hank Dane; Kay Harrigan; SamHumphries; Bud Tucker,Plaintiffs-Appellants,v.RAILS-TO-TRAILS CONSERVANCY, a non-profit District ofColumbia Corporation; Cleve Pinnix, Director, WashingtonState Parks and Recreation Commission, in his individualcapacity; Queenie Allado; Robert Petersen; MelvinWortman, Commissioners, Washington State Parks andRecreation Commission, in their individual capacity, et al.,Defendants-Appellees.
No. 94-36071.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted Dec. 8, 1995.Decided March 27, 1996.
Michael E. Haglund, Shay S. Scott, Haglund & Kirtley, Portland, Oregon, for plaintiffs-appellants.
Matthew Cohen, Carole Rafferty, Heller, Ehrman, White & McAuliffe, Seattle, Washington; Joseph Earl Shorin, Assistant Attorney General, Olympia, Washington; Andrea C. Ferster, Washington, D.C., for defendants-appellees.
Appeal from the United States District Court for the Eastern District of Washington, No. CV-94-03050-AAM; Alan A. McDonald, District Judge, Presiding
Before: D.W. NELSON and JOHN T. NOONAN, Jr., Circuit Judges, TANNER, District Judge.*
NOONAN, Circuit Judge:
1
Leonard Dave and other alleged owners of reversionary interests in railroad easements (the Plaintiffs) brought suit against the Rails-To-Trails Conservancy (RTC) and the director and commissioners of the Washington State Parks and Recreation Commission (the Commission) alleging violation of their civil rights under 42 U.S.C. § 1983 and of the National Trails System Act, 16 U.S.C. § 1247(d). The district court dismissed the action for lack of jurisdiction. We affirm the dismissal.BACKGROUND
2
The National Trails System Act was enacted in 1983. The history and purpose of the legislation are amply set out in Preseault v. ICC, 494 U.S. 1, 5-9, 110 S.Ct. 914, 918-20, 108 L.Ed.2d 1 (1990). The legislation permitted the Interstate Commerce Commission to authorize the use of easements granted by private property owners to railroads to be converted for use as recreational trails without resulting in an abandonment of the right of way by the railroad--a banking of lines available for rail use coupled with a contemporary use of the land for hiking and other recreation. The conversion for the time being of the property to a use other than rail service created the possibility that reversioners of the easements might have a claim for compensation for the taking of their reversionary interest. It has proved to be a teasing and frustrating path for the reversioners, or alleged reversioners, to find a way to establish a claim. The present case is a not implausible but ultimately unsuccessful effort by a group of alleged reversioners to find a way.
FACTS
3
For purposes of this appeal, we assume these facts alleged in the complaint to be true:
4
The Plaintiffs consist of Leonard Dave, a member of the Klickitat tribe who owns historical Indian land; Bill and Mary Giersch, who own the OK Ranch in Glenwood, Washington, which has been operated for over a century as a beef cattle and native grass hay farm; Louise Mattson, owner of the Mattson Ranch on which cattle wheat and alfalfa have been raised since the 1930s; Stan and Noreen Crocker, owners of Canyon Pasture, which is used for the feeding and watering of cattle; B.J. Kessinger, owner of two parcels of land in Klickitat county; Hank Dane and his wife Kay Harrigan, owners of property purchased for privacy; Sam Humphries, owner of grassy meadow wetlands; and Bud Tucker who lives in a rustic cabin without electricity or running water. All these persons own land on which easements have been granted to the Burlington and Northern Railroad (BN) for railroad purposes only. The Defendants are the RTC, a nonprofit corporation of the District of Columbia, and the director and members of the Commission which is responsible for acquiring and developing the state park system for the State of Washington.
5
The following facts are undisputed matters of public record:
6
In 1991 BN petitioned the Interstate Commerce Commission (ICC) for leave to abandon 28 miles of right of way between Klickitat and Goldendale, Washington on grounds that the lines no longer supported commercial freight traffic. The City of Goldendale filed a request for interim trail use and rail banking. On April 3, 1992 the ICC issued a Notice of Interim Trail Use or Abandonment (NITU), declaring that if an agreement was reached for such use 180 days after service of the decision "interim trail use may be implemented." In 1992 BN petitioned the ICC to abandon another 14 miles of the same line. RTC filed a request for interim trail use/rail banking. The ICC issued a NITU authorizing the use.
7
In August 1993 RTC and BN entered into an agreement by which RTC purchased seven rail corridors in Washington, including 30 miles of the 42 miles covered by the two NITUs. RTC assumed certain liabilities in accordance with this agreement. In April 1994 RTC donated its interests to the Commission.
PROCEEDINGS
8
On April 26, 1994 the Plaintiffs brought this action against RTC and the Commission. They allege that their reversionary interests had become possessory when the railroad line was abandoned and that RTC and the Commission violated their right to possess and use the railroad right of way. They also allege that the National Trails System Act, 16 U.S.C. § 1247(d), authorized the interim use of a railroad right of way as a recreational trail where the transferee was "prepared to assume full responsibility for management of such rights-of-way and for any legal liability arising out of such transfer or use." They also assert state claims against RTC of conversion, trespass and nuisance, alleging total damages of $9,000.
9
On September 29, 1994 the district court dismissed the action. It held that both of the federal claims sought a review of the NITU orders of the ICC and that the only jurisdiction to review an ICC order lay in a court of appeals. 28 U.S.C. § 2342, Add.24. The district court dismissed the state claims as not meeting the jurisdictional amount required in a diversity action.
10
The Plaintiffs appeal.
ANALYSIS
11
The Plaintiffs' attempt to hold the transferees of the railroad right of way liable for compensation for a taking of their property is a monkey wrench thrown into the intended operation of the Rails-to-Trails Act. It is a monkey wrench that impacts the orders of the ICC granting the NITUs. Although not in form a request for review of an ICC order, the practical effect is to seek such a review. Consequently, the district court lacked jurisdiction. Assure Competitive Transportation, Inc. v. United States, 629 F.2d 467, 472 (7th Cir.1980), cert. denied, 449 U.S. 1124, 101 S.Ct. 941, 67 L.Ed.2d 110 (1981). As the district court had no jurisdiction, we have no alternative but to affirm its dismissal. Only the United States Court of Federal Claims has jurisdiction for the takings allegedly effected by the transfer of the railroad easements. Preseault v. ICC, 494 U.S. at 17, 110 S.Ct. at 924-25.
12
The Plaintiffs earnestly contend that the Rails-to-Trails Act, § 1247(d), created a third-party right entitling them to sue the transferees for the compensation allegedly owed them by the United States for taking their property. Since we have no jurisdiction we cannot pass upon this argument except by dictum to say that we would be unconvinced by it if we had jurisdiction and that it is contrary to the ICC's understanding of the statute.
13
There is no dispute that the state claims did not meet the $50,000 amount required for diversity jurisdiction under 28 U.S. § 1332(a)(1). Since the district court had no jurisdiction over the federal question claims, it could not exercise jurisdiction over the remaining common law claims and properly declined to do so.
14
Accordingly, the judgment of dismissal is AFFIRMED.
*
The Honorable Jack E. Tanner, United States District Judge for the Western District of Washington, sitting by designation
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657 F.Supp.2d 1378 (2009)
In re APPLE IPHONE 3G AND 3GS "MMS" MARKETING AND SALES PRACTICES LITIGATION.
MDL No. 2116.
United States Judicial Panel on Multidistrict Litigation.
December 3, 2009.
Before ROBERT L. MILLER, JR., Acting Chairman, JOHN G. HEYBURN II, Chairman[*], KATHRYN H. VRATIL, DAVID R. HANSEN, W. ROYAL FURGESON, JR., FRANK C. DAMRELL, JR.[*] and DAVID G. TRAGER, Judges of the Panel.
TRANSFER ORDER
ROBERT L. MILLER, JR., Acting Chairman.
Before the entire Panel[*]: Before the Panel are two motions that collectively encompass twelve actions: three actions in the Northern District of Ohio, two actions each in the Central District of California and the Northern District of California, and one action each in the Southern District of California, Southern District of Illinois, Eastern District of Louisiana, District of Minnesota, and Eastern District of Missouri as listed on Schedule A.[1]
Common defendant AT & T Mobility LLC (AT & T) moves, pursuant to 28 U.S.C. § 1407, for coordinated or consolidated pretrial proceedings of certain of these actions in the Northern District of Ohio or, in the alternative, the Eastern District of Louisiana. Similarly, plaintiffs in the two Northern District of California actions and the Southern District of California action move, pursuant to Section 1407, for coordinated or consolidated pretrial proceedings of the actions in the Northern District of California.
Plaintiffs in the remaining nine actions responded in support of centralization in the Eastern District of Louisiana; however, at oral argument, plaintiff in one Northern District of Ohio action argued in support of centralization in the Northern District of Ohio and represented that other plaintiffs supported centralization in that district as well. Common defendant Apple Inc. (Apple) likewise supports centralization in the Northern District of Ohio.
On the basis of the papers filed and hearing session held, we find that these twelve actions involve common questions of fact, and that centralization under Section 1407 in the Eastern District of Louisiana will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. All actions share factual questions arising from the advertising and marketing of multimedia message service (MMS) functionality of Apple's iPhone 3G and 3GS supported by AT & T's 3G network. Plaintiffs in all actions allege that Apple and AT & T have engaged in deceptive marketing with respect to the availability of MMS functionality on the iPhone 3G and 3GS. Centralization under Section 1407 will eliminate duplicative discovery; prevent inconsistent pretrial rulings, particularly with respect to class certification issues; and conserve the resources of the parties, their counsel and the judiciary.
We are persuaded that the Eastern District of Louisiana is an appropriate transferee district for this litigation. Most plaintiffs and the moving defendant, in the *1379 alternative, support centralization in this district. Centralization in the Eastern District of Louisiana, where an action is pending, also permits the Panel to effect the Section 1407 assignment to an experienced transferee judge who is not currently presiding over another multidistrict litigation docket.
IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C. § 1407, the actions listed on Schedule A and pending outside the Eastern District of Louisiana are transferred to the Eastern District of Louisiana and, with the consent of that court, assigned to the Honorable Carl J. Barbier for coordinated or consolidated pretrial proceedings with the action listed on Schedule A and pending in that district.
SCHEDULE A
MDL No. 2116 IN RE: APPLE IPHONE 3G AND 3GS "MMS" MARKETING AND SALES PRACTICES LITIGATION
Central District of California
Aida Kamarian v. Apple, Inc., et al., C.A. No. 2:09-6590
Tim Williams, et al. v. Apple, Inc., et al., C.A. No. 2:09-6914
Northern District of California
Philip Sterker v. Apple, Inc., et al., C.A. No. 4:09-4242
Kevin Khoi Duy Tran v. Apple, Inc., et al., C.A. No. 5:09-4048
Southern District of California
Arturo Molina v. Apple, Inc., et al., C.A. No. 3:09-2032
Southern District of Illinois
Tim Meeker v. Apple, Inc., et al., C.A. No. 3:09-607
Eastern District of Louisiana
Christopher Carbine, et al. v. Apple, Inc., et al., C.A. No. 2:09-5470
District of Minnesota
Kyle Irving v. Apple, Inc., et al., C.A. No. 0:09-2613
Eastern District of Missouri
Meredith Goette, et al. v. Apple, Inc., et al., C.A. No. 4:09-1480
Northern District of Ohio
Michael Pietrangelo v. Apple, Inc., et al., C.A. No. 1:09-1992
Matthew Sullivan v. Apple, Inc., et al., C.A. No. 1:09-1993
Deborah Carr v. Apple, Inc., et al., C.A. No. 1:09-1996
NOTES
[*] Judges Heyburn and Damrell took no part in the decision of this matter.
[1] The parties have notified the Panel of three related actions pending, respectively, in the Southern District of Alabama, Eastern District of Michigan, and the Southern District of New York. These actions and any other related actions are potential tag-along actions. See Rules 7.4 and 7.5, R.P.J.P.M.L., 199 F.R.D. 425, 435-36 (2001).
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142 F.2d 227 (1944)
ROTH et al.
v.
HYER et al. HYER et al.
v.
ROTH et al.
No. 10932.
Circuit Court of Appeals, Fifth Circuit.
April 22, 1944.
*228 Lloyd B. Kanter, of Brooklyn, N. Y., and H. N. Roth and Clark W. Jennings, both of Orlando, Fla., for appellants.
J. Thomas Gurney and Hugh Akerman, both of Orlando, Fla., for appellees.
Before SIBLEY, McCORD, and WALLER, Circuit Judges.
SIBLEY, Circuit Judge.
The suit is one at law for breach of a contract allegedly made by defendants, R. L. Hyer and W. M. Davis and Son Company, to sell to plaintiffs, Benjamin H. Roth, Jerome Roth, and Milton C. Zaidenberg, a landlord's claim against United Cigar Stores Co., which was in reorganization proceedings under Section 77B of the Bankruptcy Act, 11 U.S.C.A. § 207. The claim had been allowed for $68,629.77, and it was alleged that defendants agreed to sell it for seventy-five cents on the dollar, but on April 6, 1937, refused to deliver and transfer it. There was an alternative count against Charles P. Dickinson, but it has been taken out of the case. A demand for jury trial was made, but not in due time. So the case was tried by the judge, who gave judgment for the defendants. On appeal this judgment was "reversed for further and not inconsistent proceedings." Roth v. Hyer, 5 Cir., 133 F.2d 5, 9.
The plaintiffs thereafter moved in the District Court for a summary judgment, except as to the amount of damages. The defendants offered an amendment of their answer, it being principally a denial of authority in the attorneys who purported to sell the claim, and of any actual meeting of minds; and they filed a demand for a jury trial. The judge held that the decision of the appellate court foreclosed trial of anything but the amount of damages, refused to allow the amendment of the answer, refused a jury trial, and tried the issue of damages. He rejected the measure of damages contended for by the plaintiffs based on the value of the cash, stocks and bonds which were to be issued for the claim on reorganization if a proposed plan should be approved, as it afterwards was, and held that the damages were measured by the excess of value of the claim at the time of the breach over the contract price. Both plaintiffs and defendants appeal.
1. Plaintiffs deny that defendants' appeal brings up any orders or judgments except those named in the notice of appeal. We think otherwise. The final judgment, (or such interlocutory one as may be appealed from), is the judgment to be designated under Rule of Civil Procedure 73(b), 28 U.S.C.A. following section 723c; but the appeal draws in question all rulings of the court that produced that judgment. These prior rulings and judgments under the new practice are made part of the record on appeal, as provided in Rule 75; and Rule 24(2) (b) of this Court requires that the appellant in his brief shall specify separately and particularly each error asserted and intended to be urged. It is not necessary to list them in the notice of appeal.
2. We accordingly may review the refusal of a jury trial. By Rule 38(b) and (d) the right of jury trial of an issue is waived unless a demand for it is made not later than ten days after the service of the last pleading directed to such issue. We do not think the right to make the demand is revived by the reversal of a case for a new trial, nor by a belated amendment of pleadings touching the same general issues. We accordingly hold that there was no error here on the retrial in refusing the demand for a jury trial. But it may happen that a judge on a retrial may think best to have a jury, and by Rule 39(b) in such a case the Court in its discretion upon motion may order a trial by jury, though there is no longer a right to demand one. A motion to the court under Rule 39 rather than service of a demand under Rule 38 is the proper course in such a situation. It was still open to either side.
3. The judge erred in ruling that no issue was for trial except the amount of the damages. The judgment on the first trial was simply one in favor of the defendants and for costs. It adjudicated in general terms that the plaintiffs could not recover. The appellate court, one judge dissenting, thought that judgment was erroneous and reversed and set it aside, ordering "further and not inconsistent proceedings". The appellate court could probably have entered a final judgment since no jury verdict was involved (3 Am.Jur., Appeal and Error, § 1208), and the successful *229 appellants moved it to do this, but the motion was denied. The court could have made a final adjudication of the issue of liability on the record before it, and ordered that only the amount of damages be tried. It did not do that, but reversed and annulled the only judgment there was and ordered further consistent proceedings. The question is, what proceedings will be consistent? "Generally, when a case is reversed and remanded for further proceedings, it goes back to the trial court and there stands on the issues as if the former trial had not taken place. In the absence of any direction limiting the new trial to particular issues the whole case is tried anew, in pursuance of the principles of law disclosed in the opinion of the appellate court, which must be regarded as the law of the case on the second trial". 3 Am. Jur., Appeal and Error, § 1240. On the issue of the agent's authority the appellate court said: "It is undisputed that Dickinson was their agent and authorized to bind the defendants and would have bound them if he instead of Schalker had signed the memorandum. It is undisputed too that Dickinson authorized Schalker to close the deal with a binding acceptance." A letter of Dickinson was also mentioned as binding the defendants. If Dickinson's authority continued to be undisputed, it would of course be inconsistent with this opinion to hold the defendants not bound; but on the motion for summary judgment, pleadings were offered elaborating Dickinson's want of authority to sell the claim, and affidavits were produced both from Dickinson and the defendant Davis, neither of whom testified in the first trial, disputing any authority to sell in Dickinson, as well as what Dickinson had said and done. We think a substantial issue about Dickinson's authority was tendered, supported by sufficient evidence to require its trial, and that there is no inconsistency with the opinion of the appellate court in trying it. It is plain the opinion would have been otherwise had a want of authority in Dickinson then appeared. As to the allowance of further pertinent pleadings, see 3 Am.Jur., Appeal and Error, § 1241.
4. The proper measure of damages, if liability is established, is, as the judge held, the difference between the price plaintiffs agreed to pay for the claim and the value on the market of such claims at the date of the breach. This does not mean that plaintiffs were bound to buy other claims in order to minimize damages. They were, as they argue, free to buy all the claims they desired for their own account and profit, and not for the account of the defendants. We are holding that under the peculiar facts of this case there was a market for such claims, they were a commodity for sale, and the usual rule of damages for failure to deliver a marketable commodity applies. See 46 Am.Jur., Sales § 616; 55 C.J., Sales, § 1151. The United Cigar Stores owed hundreds of similar landlords' claims, aggregating millions of dollars. People at the time of the breach were buying and selling them freely. Plaintiff bought at that very time other such claims at 75 and 76 cents on the dollar. An outside witness was buying them around 80, and had during the reorganization bought up more than $2,000,000 face value of such claims. He said they could readily be purchased at 85. Plaintiffs, however, claim a greater value because the bonds and the stocks which the pending plan contemplated were also being traded in "as, if and when issued", and their trading value was even higher. The difficulty with this as a measure of value is the speculative contingency whether the plan which had been proposed would be adopted and confirmed, and the stocks and bonds would be issued and when that would be. But for this contingency, people would have paid for the claims the full value of the cash, stocks and bonds for which they might be exchanged. In view of it, they were paying considerably less. In view of the possibility of a jury trial and of more evidence on this issue also, we reverse and set aside the judgment, and leave all issues open for further trial.
The cause is accordingly remanded to the District Court for further proceedings not inconsistent with this opinion.
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408 F.3d 1349
CHARLES H. WESLEY EDUCATION FOUNDATION, INC., Jaru Ruley, et al., Plaintiffs-Appellees,v.Cathy COX, individually and in her official capacity as Secretary of State of Georgia, and Linda W. Beazley, individually, Kathy A. Rogers, in her official capacity as Director of the Elections Division, Office of the Secretary of State of Georgia, Defendants-Appellants.
No. 04-13435.
United States Court of Appeals, Eleventh Circuit.
May 12, 2005.
COPYRIGHT MATERIAL OMITTED Stefan Ernst Ritter, Dennis R. Dunn, Penny L. Hannah, GA, GA Dept. of Law, Atlanta, GA, for Defendants-Appellants.
Bradley Erik Heard, Molden Holley Fergusson Thompson & Heard, LLC, Atlanta, GA, for Plaintiffs-Appellees.
Neil Bradley, ACLU Foundation, Inc., Atlanta, GA, Derek W. Black, Lawyers' Committee for Civil Rights Under Law, Washington, DC, for Amici Curiae.
Appeal from the United States District Court for the Northern District of Georgia.
Before BARKETT, KRAVITCH and FARRIS*, Circuit Judges.
FARRIS, Circuit Judge:
1
Plaintiffs were granted a preliminary injunction from the district court enjoining Defendant Georgia state officials from rejecting voter registration forms submitted to the state in a single mailed package. Defendants appealed, and we affirm.
2
* The Wesley Foundation is a charitable and educational organization affiliated with the predominantly African-American Alpha Phi Alpha fraternity. In June 2004 the Foundation conducted a voter registration drive at a shopping mall in DeKalb County, Georgia, at which they provided and collected voter registration forms for submission by mail. Among the forms they collected was one from Plaintiff Earline Crawford, who was already registered to vote, but gave the Foundation her form so as to notify the state of her changed address. The Foundation collected sixty-four forms and mailed them in a single package to the Secretary of State's office for processing.
3
Shortly thereafter, the Secretary's office rejected the forms because, in its view, Georgia law prohibited anyone but registrars, deputy registrars or otherwise authorized persons from accepting or collecting voter registration forms. Because no authorized person participated in the voter registration drive, it would not accept the applications. The package was postmarked before the state— and federally-imposed deadlines (though the individual forms were not postmarked), and it is undisputed that had each of the forms been sent individually, the Secretary would have accepted them.
4
In their amended complaint, Plaintiffs allege violations of their rights under the National Voter Registration Act of 1993, 42 U.S.C. §§ 1973gg et seq. (2004), the Voting Rights Act of 1965, 42 U.S.C.1973 et seq. (2004) and the First, Fourteenth, and Fifteenth Amendments to the United States Constitution.1 They also filed a motion for preliminary injunction, which the district court granted. Defendants now appeal, arguing that the Plaintiffs lack standing to bring their claims and that the district court erred in granting the injunction.
II
A. Standing
5
We review the legal question of standing de novo. See London v. WalMart Stores, Inc., 340 F.3d 1246, 1251 (11th Cir.2003). In doing so, we review factual determinations made at the trial level as part of consideration of motions for preliminary injunctions for clear error. This That and The Other Gift and Tobacco, Inc. v. Cobb County, 285 F.3d 1319, 1321 (11th Cir.2002).
6
To have standing, and therefore a justiciable "case or controversy," the plaintiffs must satisfy three constitutional requirements. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). They must establish that: (1) they have suffered a particularized, concrete injury to a legally protected interest (injury in fact); (2) the injury is fairly traceable to the challenged action (causation); and (3) it is likely that the injury may be redressed by judicial action (redressability). Region 8 Forest Serv. Timber Purchasers Council v. Alcock, 993 F.2d 800, 805 (11th Cir.1993). Defendants argue that Plaintiffs fail to satisfy these requirements.
1. Ms. Crawford
7
Defendants claim first that Ms. Crawford did not allege in the Complaint the now-argued specific injury of being unable to vote in her new home precinct. We disagree. The Complaint alleges that the state rejected her form in violation of Ms. Crawford's rights under the NVRA, which specifically protects her right to use the federal registration form to notify the state of a change of her address. See 42 U.S.C. §§ 1973gg-4(a)(3), gg-6(a)(1)(B). Such allegations are sufficient to satisfy the requirements of notice pleading. See United States v. Baxter Intern., Inc., 345 F.3d 866, 881 (11th Cir.2003) ("Because the Federal Rules embody the concept of liberalized `notice pleading,' a complaint need contain only a statement calculated to give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.") (internal citations omitted).
8
Defendants also claim that Ms. Crawford lacks standing because as an already registered voter, she suffered no injury that can be traced to the state. We reject the argument. Ms. Crawford's alleged injuries are sufficient to show injury-in-fact for standing purposes. A plaintiff need not have the franchise wholly denied to suffer injury. Any concrete, particularized, non-hypothetical injury to a legally protected interest is sufficient. See Parker v. Scrap Metal Processors, Inc., 386 F.3d 993, 1003 (11th Cir.2004). Moreover, where an alleged injury is to a statutory right, standing exists "even where the plaintiff would have suffered no judicially cognizable injury in the absence of statute." Warth v. Seldin, 422 U.S. 490, 514, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975).2
9
Ms. Crawford's alleged injuries are also "fairly traceable" to Defendants' actions. Defendants' causation argument, that the root of Crawford's attempted address change's inadequacy was her own lack of compliance with Georgia's requirements, conflates standing with the merits of the case. Causation in the standing context is a question of fact unrelated to an action's propriety as a matter of law. To establish causation a plaintiff need only demonstrate, as a matter of fact, "a fairly traceable connection between the plaintiff's injury and the complained-of conduct of the defendant." Parker, 386 F.3d at 1003. Ms. Crawford's alleged injuries flow directly from the denial of her registration form.3
2. Wesley Foundation Plaintiffs
10
Defendants claim that the Wesley Foundation Plaintiffs also lack standing. To this end, they argue that these Plaintiffs had no "right" to conduct voter registration drives, and therefore they cannot allege injury in their inability to conduct one as they wish. In other words, Defendants claim that whatever injury Plaintiffs suffered, it was not an injury to a "legally protected" interest that can be traced to their actions. We disagree.
11
Defendants' argument is based on the flawed notion that because the NVRA does not provide for private registration drives as one of the modes of registration it mandates, it prohibits them. The NVRA requires the states to accept voter registration forms in three ways beyond those through which the states voluntarily elect to accept them: registration by mail, registration in person at various official locations (so-called "registration places"), and registration in conjunction with driver licensing. See 42 U.S.C. § 1973gg. In the first instance, these methods are not intended to be exclusive; rather, the Act seeks to encourage voter registration by setting a floor on registration acceptance methods. See id. at § 1973gg-1(b); gg-2(a). More importantly, the use of a private registration drive is not a mode of registration at all. Rather, it is a method by which private parties may facilitate the use of the mode of registration by mail, for which the Act does provide.
12
Nowhere does the NVRA prohibit or regulate voter registration drives; rather, it impliedly encourages them. See id. at § 1973gg-4(b) (directing the secretaries of state to make the federal forms provided for in the Act available, "with particular emphasis on making them available for organized voter registration programs").4 The only provisions regulating mailed forms are unrelated to the legitimacy of voter drives such as the Foundation's; instead, these provisions regulate the states by ensuring that voters delivering valid forms in a timely fashion by mail are registered. Id. at §§ 1973gg-2(a)(2), gg-6(a)(1)(D). In other words, they regulate the forms' final content and method of delivery, but do not regulate their dissemination or collection. Thus the Act does not prohibit registration drives, but, because it limits the states' ability to reject forms meeting its standards (which privately collected, mailed forms would do), it does protect them. See § 1973gg-6(a)(1)(D) (stating that the states "shall... ensure" that voters delivering timely, valid forms are registered); § 1973gg-2(a)(2) (states "shall accept" the federal mail-in form). For these reasons, it is clear that the Foundation's right to conduct voter registration drives is a legally protected interest.
13
As with Defendants' causation arguments regarding Ms. Crawford, we reject the claim that because the Foundation engaged in actions Defendants consider prohibited, the Plaintiffs are the "cause" of any injuries suffered. Whether such a denial was appropriate, and whether Plaintiffs acted within their rights in conducting their drive as they did, are questions relevant not to standing, but to the dispute on the merits (so long as Plaintiffs' asserted interests are legally protected). For standing purposes, it is clear that Plaintiffs' alleged injuries are traceable to the Defendants' rejection of their mailed bundle of registration forms.
14
The NVRA protects Plaintiffs' rights to conduct registration drives and submit voter registration forms by mail, and Defendants' denial of the sixty-four forms here was a clear invasion of that interest, traceable to Defendants' actions, and redressable by injunctive relief.5 As such, Plaintiffs have standing to sue.
B. Preliminary Injunction
15
Having determined that the Plaintiffs have standing, we turn to the district court's decision to grant Plaintiffs' motion for preliminary injunction. Preliminary injunction decisions, "about the viability of a plaintiff's claims and the balancing of equities and the public interest, are the district court's to make and [this Court] will not set them aside unless the district court has abused its discretion in making them." Cumulus Media, Inc. v. Clear Channel Communications, Inc., 304 F.3d 1167, 1171 (11th Cir.2002). Only if the Court finds that error in the "apprehension or application of the law will [it] subject the entirety of a preliminary injunction order to plenary review." Id.
16
To grant a motion for a preliminary injunction, the trial judge must determine that the moving party has shown that "(1) it has a substantial likelihood of success on the merits; (2) irreparable injury will be suffered unless the injunction issues; (3) the threatened injury to the movant outweighs whatever damage the proposed injunction may cause to the moving party; and (4) if issued, the injunction would not be adverse to the public interest." Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir.2000) (en banc).
1. Substantial Likelihood of Success
17
Defendants contend primarily that the suit does not carry the requisite "substantial likelihood of success on the merits." They argue first that the Plaintiffs' NVRA claims are basically preemption claims, and that there is no conflict between Georgia and federal law regarding the acceptance of voter registration forms. In essence, their claim is that the NVRA only requires that mailed registration forms be accepted when delivered both in a timely fashion and pursuant to additional state requirements. See 42 U.S.C. § 1973gg-6(a)(1)(B),(D). Because the Act only regulates the content of the form itself and the timing of its delivery, they argue, the Act allows the state to regulate the method of delivery.
18
This argument is unpersuasive. By requiring the states to accept mail-in forms, the Act does regulate the method of delivery, and by so doing overrides state law inconsistent with its mandates. The Act simply requires that valid registration forms delivered by mail and postmarked in time be processed. Id. at §§ 1973gg-2(a)(2), gg-6(a)(1)(D). The forms here appear to have satisfied these requirements. The postmark on the package applied to all its contents, thereby rendering each form postmarked, and no party disputes the forms' timeliness.
19
This case is unlike Association of Community Organizations for Reform Now v. Miller, 912 F.Supp. 976, 986-88 (W.D.Mich.1995), aff'd, 129 F.3d 833 (6th Cir.1997), on which Defendants rely to argue that their anti-"bundling" policy is a legitimate protection against voter fraud. That case upheld a Michigan statute providing that when voter cards sent to registrants were returned as undeliverable, those persons were deemed unregistered. This is not the kind of rule at issue here. First, the Michigan rule did not implicate the clear directives of the mail-in registration processes protected by the NVRA. It dealt with the evaluation of registrations after submission and initial registration. Second, unlike the Michigan statute, the Georgia policy does little, if anything, to prevent fraud or assist in the assessment of voter eligibility. Defendants assert that their practices protect confidential voter information and prevent fraudulent submission, but the risk of exposure and fraud is equal whether forms are sent in bulk or individually, so long as third-party handling of any kind is allowed (and Defendants admit the NVRA does not prohibit third-party submission of individual forms).
20
Defendants also claim that because the NVRA provides for registrars to serve various functions for the state—most significantly assisting with and receiving registration forms—citizens may not serve similar roles in private voter registration drives. See 42 U.S.C. § 1973gg-5(a)(4),(5). As noted, though, the Act does not regulate private voter organization; it only imposes duties on the states. The Act does not dictate that only state actors may perform the simple function of assisting citizens with voter registration forms, and Plaintiffs do not claim authority to receive such forms on behalf of the state. Similarly, Defendants are not helped by their citation to a Georgia statute providing for the creation of official "registration places" where applications for registration are "received." See Ga. Comp. R. & Regs. § 183-1-6-.03(3)(c),(k)(1). That statute is simply not implicated either by pre-submission third-party handling of forms or by registration by mail. In any case, even were that statute implicated by Plaintiffs' actions here, it would have to give way to the clear mandates of the NVRA, which Plaintiffs appear to have satisfied.6
21
2. Irreparable Injury, Balancing Harms, and the Public Interest
22
None of the remaining factors for consideration of a motion for preliminary injunction is favorable to the Defendants. The associational and franchise-related rights asserted by the Plaintiffs were threatened with significant, irreparable harm, and the injunction's cautious protection of the Plaintiffs' franchise-related rights is without question in the public interest. In contrast, the harm and costs threatened to the state by these registration forms were minimal, if they existed at all. The administrative burden of opening bundled forms instead of individual forms is negligible, and the public interest in protecting against electoral fraud does not appear to be compromised by the temporary loss of Georgia's anti-bundling rule.
23
AFFIRMED.
Notes:
*
Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit, sitting by designation
1
Plaintiffs include Ms. Crawford, four individual volunteers for the Foundation, and the Foundation itself
2
Defendants abandon on appeal the argument advanced before the district court that they cured Ms. Crawford's injuries by sending her an additional form to fill out a few days before the registration deadline
3
Though Defendants do not pursue the question, Ms. Crawford's injuries are also redressable: the injunctive relief provided by a favorable decision in this case would redress Ms. Crawford's injuries by permanently withdrawing the additional registration requirements Defendants seek to impose upon her. The fact that the issuance of the preliminary injunction forced the state to accept the sixty-four forms for purposes of elections occurring during this suit's pendency does not affect our analysis. Standing is to be "determined as of the time ... the plaintiff's complaint is filed," and is not altered by events unfolding during litigationFocus on the Family v. Pinellas Suncoast Transit Auth., 344 F.3d 1263, 1275 (11th Cir.2003).
4
The Act mandates that the states accept a particularly defined federal registration form (hereinafter "federal form") for purposes of registration for federal electionsSee id. at § 1973gg-7(a)(2). This was the form used by the Plaintiffs.
5
As with Ms. Crawford, redressability is both conceded and satisfied as to the Foundation Plaintiffs
6
That Plaintiffs' actions here do not implicate § 183-1-6-.03(3) eviscerates Defendants' argument that the preclearance provisions of the Voting Rights Act, 42 U.S.C. § 1971et seq., which were allegedly followed in adopting that provision (but not the anti-bundling rule), support the legitimacy of the state's actions. In any case, as the Plaintiffs and amici have noted, preclearance has no bearing on the legitimacy of a given rule, procedure or action with regard to other federal electoral laws. See Reno v. Bossier Parish, 528 U.S. 320, 335, 120 S.Ct. 866, 145 L.Ed.2d 845 (2000) ("[P]reclearance under § 5 affirms nothing but the absence of backsliding"). Defendants' related claim that the private voter registration drive (which was not "precleared") was invalid falls short because the preclearance provisions of the Act simply do not apply to private actors. 42 U.S.C. § 1973c.
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40 F.3d 385
U.S.v.Lewis*
NO. 94-60103
United States Court of Appeals,Fifth Circuit.
Nov 03, 1994
Appeal From: S.D.Tex., No. CR-M-93-118-01
1
AFFIRMED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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483 S.W.2d 161 (1972)
Charles Robert OTIS, Petitioner,
v.
N. Mitchell MEADE, Judge, Fayette Circuit Court, Respondent.
Court of Appeals of Kentucky.
June 9, 1972.
James D. Elam, Lexington, for petitioner.
George E. Barker, Commonwealth Atty., Lexington, for respondent.
GARDNER, Commissioner.
Charles Robert Otis was held in contempt of court for failing to appear as a witness in the case of Commonwealth of Kentucky v. Ollie Craycraft and Jack Shirley Jaggers and his punishment was fixed at six months in jail and a $500 fine. His bond for appearance as a witness in the second trial of the same case was fixed at $50,000.[1] He now seeks a writ of prohibition to prevent the enforcement of the contempt order.
Otis asserts that he was not served with a subpoena nor was he recognized to appear. The record discloses that Otis had been jointly indicted with Craycraft and Jaggers as accessories before the fact of selling heroin. Before the trial the case against Otis was dismissed on motion of the Commonwealth. Thereupon Otis was *162 served with a subpoena as a witness in the case. He remained in the courtroom during the day he was subpoenaed. That was Wednesday, February 16. Upon adjournment of the court for the day, Otis was called to the bench and respondent notified him that because one of the attorneys could not be present the next day court would reconvene on Friday, February 18. Respondent specifically instructed Otis to return on Friday morning at 9 o'clock.
Otis failed to appear on Friday and the trial was concluded without his testimony. Otis was later arrested, brought before respondent and was asked to show cause why he should not be held in contempt of court for failure to answer when called as a witness. Otis admitted the happenings as outlined above. His excuse appears in the following colloquy of him and respondent:
"THE COURT: Well, why didn't you come back on Friday like I told you on Wednesday evening before you left?
CHARLES ROBERT OTIS: I couldn't afford to put my family in jeopardy, you know.
THE COURT: Somebody was threatening you?
CHARLES ROBERT OTIS: Yes, sir.
THE COURT: Who was that?
CHARLES ROBERT OTIS: Well, that would be the same as being a witness, you know.
THE COURT: Who? Sir?
CHARLES ROBERT OTIS: I can't say, Your Honor."
As noted, Otis was served with a subpoena on Wednesday. It is our opinion that the subpoena created a continuing obligation on his part to be available as a witness until the case was concluded or until he was dismissed by the court. It is stated in State v. Goff, 228 S.C. 17, 88 S. E.2d 788, 792, 52 A.L.R.2d 1292 (1955):
"As the trial Judge held in the instant case, the witness, Dutch Mishoe, was under subpoena and although he had testified in the case and argument of counsel had been completed, the Court had not dismissed him and he remained attendant upon the Court subject to possible recall. The fact that he was not actually recalled does not alter the situation. He retained his status as a witness until the completion of the case in which he was subpoenaed."
Cf. Brannon v. Commonwealth, 162 Ky. 350, 172 S.W. 703 (1915).
In the recent opinion of Miller v. Vettiner, Ky., ____ S.W.2d ____ (decided May 12, 1972), we pointed out that where a factual issue is presented, a hearing either by the court or by the jury is required. In the instant case, however, there was no factual issue. Otis acknowledged that he was served with a subpoena, that in addition the judge orally directed him to appear as a witness at a certain time and that he did not appear. His excuse was that he was fearful for the safety of his family if he testified. Respondent considered the excuse untenable, and we cannot say he was clearly erroneous.
It must be conceded that disobedience of a subpoena is a contemptuous act. KRS 421.110. Otis argues that the punishment exceeded that provided by KRS 432.230, which limits the punishment to a fine not exceeding $30. In Arnett v. Meade, Ky., 462 S.W.2d 940 (1971), we had occasion to look at KRS 421.140, a statute similar to KRS 432.230 (on which Otis relies) as it relates to punishment meted for contempt. We there held that the statute unreasonably restricted the courts in the administration of justice and, therefore, was unconstitutional. We reaffirmed the holding in the Vettiner case, supra. For the same reasons expressed in Arnett we hold that KRS 432.230, limiting the fine to $30, is unconstitutional.
*163 Otis contends that the amount of punishment (six months in jail and a fine of $500) placed the case in the category of a serious offense as described in Cheff v. Schnackenberg, 384 U.S. 373, 86 S.Ct. 1523, 16 L.Ed.2d 629 (1966), and therefore the punishment could not be exacted without a jury trial. By Cheff v. Schnackenberg the court upheld the lower court's contempt order placing Cheff in jail for a period of six months without a jury hearing. The court justified its ruling on the ground that historically it has been permissible to try persons for petty offenses without a jury. The court added: "* * * we rule further that sentences exceeding six months for criminal contempt may not be imposed by federal courts[2] absent a jury trial or waiver thereof."
We accede to the rule announced in Schnackenberg that a sentence of more than six months constitutes a serious offense requiring the intervention of a jury, but we do not agree with petitioner that the tacking on of a $500 fine to the six-months' jail sentence creates a serious offense in the context of Schnackenberg. It goes without saying that a fine partakes of a different nature of punishment from that of personal confinement. When it set the sentence at not to exceed six months for contempt without a jury trial, we believe the Supreme Court said, in effect, that incarceration should not exceed six months. The court made no expression relative to a fine.
It is argued that an excessive fine is also onerous and there should be a limit beyond which an assessment should not be made without a jury's verdict. We quite agree. We do not believe, however, that the $500 fine passes that point. It is noted that under federal law a misdemeanor, the penalty of which does not exceed imprisonment for more than six months and a fine of not more than $500, is classified as a petty offense. 18 U.S.C. § 1. That appears to be a reasonable classification.
The writ of prohibition is denied.
STEINFELD, C. J., and MILLIKEN, NEIKIRK, OSBORNE, PALMORE and REED, JJ., concur.
EDWARD P. HILL, Jr., J., dissents.
EDWARD P. HILL, Jr., Judge (dissenting).
I do not concur in the result reached by the majority opinion in the instant case for the same reason which impelled me to decline to concur in Arnett v. Meade, Ky., 462 S.W.2d 940.
I do not concur for the further reason that I am firmly of the opinion that conduct justifying a punishment of six months in jail and a $500 fine cannot in reason be classified as a petty offense as found by the august Supreme Court of the United States in Cheff v. Schnackenberg, 385 U.S. 373, 86 S.Ct. 1523, 16 L.Ed.2d 629. I may not have any business blasting at a majority opinion of the Supreme Court of the United States, but blast I must even though it may reverberate as a pop gun. It seems to me that the declaration that any punishment not over six months in prison or a fine of $500 must be categorized as a petty offense is arbitrary and unrealistic.
It is upon these propositions that I not only decline to concur, but I dissent from the majority opinion.
NOTES
[1] The case of Commonwealth v. Craycraft and Jaggers has been disposed of since the filing of the petition for a writ of prohibition so the question of excessive appearance bond is moot.
[2] In Duncan v. Louisiana, 391 U.S. 145, 88 S.Ct. 1444, 20 L.Ed.2d 491 (1968), the court held that the right to trial by jury in criminal cases was extended to the states.
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153 F.2d 200 (1946)
THE VICTOR.
J. F. CAMPBELL CO.
v.
DICK.
No. 11328.
Circuit Court of Appeals, Fifth Circuit.
January 23, 1946.
R. A. Dowling, of New Orleans, La., for appellants.
M. A. Grace and Edwin H. Grace, both of New Orleans, La., for appellee.
Before HOLMES, McCORD, and LEE, Circuit Judges.
McCORD, Circuit Judge.
J. F. Campbell Company, a partnership, owner of the motor boat Timberline, brought this libel proceeding against C. J. Dick, claimant of the tug Victor, for damages sustained by the Timberline as a result of a collision. The tug Victor came in contact with the lugger Timberline while it was moored to and against the left or east bank of the Intercoastal Canal looking toward Bayou Lafourche. At the time of the collision the tug Victor was towing two barges and was proceeding toward Bayou Lafourche along the canal but was not directly in the main channel, but was moving "more on the left hand side than the other," and on which side the lugger Timberline was moored. One of the barges being towed by the Victor struck or slapped against the Timberline and crushed and broke into its side, and as a result it was injured and almost immediately it sank and became virtually a total loss.
Only two witnesses who saw the collision appear of record, one for the libelant and one for the owner of the tug Victor. The important facts are these: On March 13, 1940, the lugger Timberline was securely moored against the bank of the Intercoastal Canal, being tied both fore and aft against the bank; about the hour of 5 or 5:30 in the afternoon, the day being clear and vision unobstructed, the tug Victor with two steel barges in tow, was proceeding along and in the Intercoastal Canal in the direction of Bayou Lafourche, and as the tug passed the lugger Timberline, she so maneuvered her tow as to cause the last barge to swing over to port and collide with and crush the Timberline, causing it to sink at the point where it was moored.
The lugger Timberline, about nine feet wide and thirty-six feet long, was at the time engaged in supplying draglines with equipment, transporting the men who were at work to and from the work site, and performing any and all duties in the way of supplying material and aid to the employees of J. F. Campbell Company, who were engaged in digging and constructing a drainage canal, the work site being situated *201 several miles from where the lugger Timberline was moored. The Timberline was moored from time to time in front of the house of its captain, who used this place from which to load and unload equipment and land workmen going to and from the work site. At the time of the collision a strong wind was blowing on the canal which caused the barges being towed to drag the bank of the side of the canal on which the lugger was moored. The evidence is without dispute that these barges had been and were dragging the banks for a distance of nearly a mile as it approached a pontoon bridge which crossed the canal. Just prior to the collision another tug towing three barges, and some thirty minutes before the Victor reached the point of the collision, traversed the canal and passed where the lugger Timberline was moored, and when it appeared that it would come in contact with the Timberline, the captain of the lugger shouted to the captain on the tug with the three barges and he so maneuvered his three barges until they passed safely without coming in contact with the lugger.
The captain of the Timberline was the only one that worked on the motor lugger Timberline, and his evidence informs:
"Q. Now as to the tow? Was the tug pushing the tow or carrying the tow? A. It was towing.
"Q. Were the barges behind one another, or how were they? A. It was a square barge, you know, no point to it. Them barges is even square.
"Q. In which direction was the tug Victor and tow proceeding? A. It was going to Bayou Lafourche.
"Q. On which side of the canal was it proceeding? A. Do you mean the tug
"Q. On which side of the canal? A. Well, it was more on the left hand side than the other side going to the Bayou Lafourche.
"How far away was the tug Victor and tow from the Timberline when you saw it? A. They was right even.
"Q. Where were the barges in the tow when you saw it? Were they out in the canal or where? A. They just happened to hit the bank a little behind, and then when I saw them there was a man on the last barge, and he was running behind on the barge, but it was too late to holler; I seen that barge was going to hit.
"Q. Were the barges in tow of the tug Victor dragging the left bank of the canal? A. Not to say drag; they hit once in a while, they would hit and go back out and hit again. That's the way they was coming, them barges.
"Q. Did a collision take place between one of those barges and the Timberline? A. Just a large barge that strike, when the barge hit about 100 feet on the bank behind and then came back. The first barge didn't hit him, but the last barge come back and hit him and smashed him. * * *
"Q. On which side of the Timberline did it hit? A. It hit on the right hand side.
"Q. Did you see this? A. Yes, I was coming to the boat.
"Q. What did you do then? A. Then I run to the boat. I see that I couldn't stop the boat. I holler, but the feller keep passing and I passed a rope to keep the Timberline from turning over in the canal.
"Q. What time of day was this, Mr. Cheramie? A. That's around 5 o'clock in the evening.
"Q. Was it daylight at that time? A. Yes, sir.
"Q. How far could you see? A. Oh. you could see just as far as your eye could reach.
"Q. Now, when you ran down to the Timberline, what happened then? A. At that time, I see everything was smashed, I see the water and everything was busted on the side, and I called back to the guy that run the tug, and we went and seen the tug Victor to be sure to get the right name of the tug.
"Q. Did you see any damage that was done to the Timberline? * * * A. I seen all the ribs was broken on the side, I seen the water just poured in.
"Q. On which side were the ribs broken? A. Well, the mould rib was broke on the right hand side. Of course, the both sides was broke, because the other one smashed against the end of the bank, too, but the worse damage was on the outside.
"Q. Did the Timberline sink? A. Well, it didn't stay five minutes up after the barge strike it. * * *
"Q. Did the tug Victor and tow stop after it hit the Timberline? A. No, they kept going.
*202 "Q. Did you do anything to try to make the tug Victor stop? A. Well, I just run, and the fellow that was on the boat, I hollered at him, but he kept passing the bridge, and he just turned and kept on. There was no chance to stop it then.
"Q. I believe you testified that you went after the boat and saw the name of the boat? A. Yes.
"Q. And what was the name of the tug? A. It was the tug Victor. * * *
"Q. How far is that pontoon bridge from the point where the Timberline was tied up when it sank? A. Well, I imagine it was about 900 to 1000 feet."
On cross examination the witness further testified:
"Q. In other words, you know that it wouldn't be proper to tie a boat up in the Intercoastal Canal in front of your house, don't you? A. Not to leave it there, no.
"Q. You know you shouldn't leave it there? A. Yes, I know if I leave it there, I wouldn't have no boat. * * *
"Q. Now on account of the tows and things, you wouldn't leave the Timberline there either, would you? A. No, if I would leave it there all the time, it would be found to be broken. It just happened when I got back, I happened to come to the landing.
"Q. And it is a fact, isn't it, that even before the tug Victor came by that on other days for instance, there are tugs and tows that would pass by and rub against the Timberline which would be stopped there to take on men or leave them off? A. I know that when the wind was blowing on the other side, but right before that I hollered at them fellows, come captain. They can take care of that if you land there, so they just let the barge drag into it, but if you just make your barge hit, you bound to break everything that you hit on it."
No notice was ever received from the Engineer's office warning libelant or his employes not to moor his vessel at the place where it was injured until after the collision.
We are unable to agree with the opinion of the learned trial judge wherein he makes the case of The Pennsylvania 86 U.S. 125, 22 L.Ed. 148, the law of the case. That was a case where one of the ships in the collision was sounding a bell instead of blowing a fog horn, as the law directed. Moreover, the decision finally divided the damages equally between the two vessels.
We are of opinion that the law more nearly applicable to this case is that:
"* * * if a ship at anchor and one in motion come into collision, the presumption is that it is the fault of the ship in motion, unless the anchored vessel was where she should not have been. * * * Undoubtedly if a vessel anchors in an improper place she must take the consequences of her own improper act. * * * But whether she is in a proper place or not and whether properly or improperly anchored, the other vessel must avoid her if it be reasonably practicable and consistent with her own safety." The Clara (The Clarita) 90 U.S. 1, 14, 23 L.Ed. 146, 148, 150.
The captain of the lugger Timberline admitted frankly that it was improper and dangerous to moor a vessel where it was injured. However, he did not keep it so moored for any great length of time, and when so anchored where it was stricken it was always securely fastened close to the bank of the canal.
Let us here concede that the lugger Timberline was moored at an improper place, and while the law seems to be well settled that the coming into collision of a moving vessel with an anchored vessel makes out a prima facie case of negligence against the moving vessel, let us further assume and concede that the burden here rests upon the libelant from the beginning to the end of the suit. This must not and cannot exculpate the tug Victor of any contributory negligence, if any there was on her part, in causing the collision.
It was a clear day, nothing obstructed the vision of the mate who was in charge of the Victor. According to his own evidence he could see the Timberline, and he knew his two barges were so loosely tied and so lengthened behind his tug until they fell down against the bank of the canal and they were bumping and slapping the side on which the lugger was moored for nearly a mile before the collision. He further testified:
"Q. Is it a practice to anchor motor vessels in the canal where the Timberline was anchored? In your trips past there before have you seen any anchored there? A. Yes, sir, there have been boats tied there for the last two or three years in the same spot."
*203 The tug which had just preceded the Victor was towing three steel barges, the same size and exactly like the two barges being towed by the Victor, and each of the barges was empty, carrying no load. The important fact is that this tug with the three barges was able in the same wind, at exactly the same place to so maneuver his tug as to pass the Timberline without injuring it. The captain of the Timberline testified:
"Q. When this tug with the three barges in tow drifted alongside the Timberline, did you hear any scraping noise? A. No, sir, he didn't do no damage; he didn't scrape; he just drifted along. Maybe by hollering at the captain, he kicked back and pulled his barge out a little and drifted along."
The mate of the Victor in his evidence made this explanation of the collision:
"Q. How long had the deck hand been out on the barges before you slowed down? A. Well, I had just sent him out there before I got to the half mile sign. He had only been out there about twenty minutes.
"Q. You sent him out there because you knew you were going to pass the motor vessel? A. Yes, sir.
"Q. Was it good daylight at the time this accident happened? A. Yes, sir.
"Q. Did you make any effort to get fenders between the barge and the motor vessel as you passed? A. Well, I really don't know whether he did or not. I sent him back there to watch the barges when they rubbed by. * * *
"Q. Which barge actually came into contact with the motor vessel? A. I really do not know which one it was. We have two new steel barges.
"Q. You don't know which one you had astern? A. No, sir, I really do not know."
The captain of the Timberline had worked as a deck hand in and along this canal all the way from Texas and for a long time. He was familiar with the canal. He testified,
"Q. Was it possible for the tug Victor and tow to have proceeded out in the channel and not come into contact with the Timberline? A. Yes, sir."
When we measure the evidence to the applicable law, it preponderates to show that the mate of the tug Victor was not only guilty of negligence in such sort as proximately contributed to the injury and destruction of the lugger Timberline, but such negligence was almost wholly the cause of the collision. The J. L. Miner, 6 Cir., 260 F. 901; The Europe, D.C., 175 F. 596; The Waterford, 2 Cir., 6 F.2d 980; The Oregon, 158 U.S. 186, 15 S.Ct. 804, 39 L.Ed. 943; Lie v. San Francisco, 243 U.S. 291, 37 S.Ct. 270, 61 L.Ed. 726, 727; The Clara (The Clarita), 90 U.S. 1, 23 L.Ed. 146, 148.
From what we have said it results that the decree of the lower court is reversed and the cause is remanded with direction that upon another trial the damages suffered by the Timberline shall be divided equally between the libelant and C. J. Dick, claimant of the tug Victor.
Reversed and remanded with directions.
HOLMES, Circuit Judge (dissenting).
I agree with the court below; see The Victor, D.C., 58 F.Supp. 928. The burden was upon the libellants to prove the alleged negligence of the Victor by a preponderance of the evidence. When it appeared that the Timberline, while moored to the bank, was struck by a moving barge, which was being towed by the Victor, a presumption of negligence arose against the tug. This created a prima facie case in favor of the libellants, which rested upon a rebuttable presumption.
It thereupon became the duty of the respondent (appellee here) to go forward with the evidence, which it did by proving that the launch was moored in an unsafe place in violation of rules and regulations having the force and effect of law. Thus the presumption against the tug disappeared altogether from the case, and the burden of proof remained upon the libellants to prove their allegations of negligence.
The owners of the Timberline did not have a permit to use a portion of the fairway as a mooring place. How dangerous was that place clearly appears from the testimony of the witness Cheramie, who said that if he had left the boat there all the time, "it would be bound to be broken." This witness, who was in charge of the launch, would not even remain on it when the tugs and tows were passing.
"Q. And you would tie that boat up in front of your house whenever you were not using it, wouldn't you? A. Well, I come there when I want to land, but I *204 don't leave it there, because you can't leave that boat there with all them tows. If I would leave it there, I would have no boat a long time ago. I have to put them in the canal outside of the Intercoastal Canal. * * * A. Yes, I know if I leave it there, I wouldn't have no boat."
In The Oregon, 158 U.S. 186, 197, 15 S. Ct. 804, 39 L.Ed. 943, the court speaks of shifting the burden of proof; but, as the court was dealing with disputable presumptions, it is clear that only the burden of going forward with the evidence was meant. It is never the function of a rebuttable presumption to shift the burden of proof. Mobile J. & K. C. R. Co. v. Turnipseed, 219 U.S. 35, 43, 31 S.Ct. 136, 55 L.Ed. 78, 32 L.R.A.,N.S., 226, Ann.Cas. 1912A, 463. For the difference between a disputable presumption, which creates a mere prima facie case, and a presumption that is given the effect of evidence after testimony rebutting it has been introduced, see Western & A. R. R. Co. v. Henderson, 279 U.S. 639, 49 S.Ct. 445, 73 L.Ed. 884.
The law as to the burden of proof is a matter of substance,[1] and the substantive law of a case does not change as the trial proceeds. A rule of evidence may supply an inference of fact, but if that inference is rebutted, it disappears entirely from the case.
The same state of facts may give rise to two conflicting presumptions, the weaker of which must give way.[2] The Pennsylvania case[3] announces a practical presumption, which is often spoken of as the statutory-fault presumption.[4] This is a rule of reasoning by the courts as to causation.[5] Under it, if there was a violation of some statute that the courts deem to be a safety statute which might be causally connected with the collision, the courts will presume that such violation was the cause of the collision, unless the offender proves not only that it was not but that it could not have been.
This doctrine emphasizes the fact that the burden of proof on the trial below was not shifted to the appellee, and that the burden rested upon the Timberline of showing, not merely that her fault probably was not one of the causes, but that it could not have been. It is strengthened by The City of New York, 147 U.S. 72, 85, 13 S.Ct. 211, 37 L.Ed. 84, which holds that it is not enough for the injured vessel to raise a doubt with regard to the management of the other vessel, and that any reasonable doubt on the subject should be resolved in its favor.[6]
Finally, let us run the gamut of this case. At its inception the burden of proof was upon the appellants. This was temporarily met by evidence that the collision was between a moving vessel and one tied to the bank; but the presumption thereby created was quickly dissipated. It died almost at birth when the statutory fault of the Timberline appeared. Thereupon a practical presumption arose that enhanced the latter's burden, beyond a mere preponderance of evidence, so that it was required to prove that its fault could not have caused the injury.
With nine acts of negligence specifically alleged against the Victor, not one of them was proven by competent evidence. The favorite in the brief and argument seems to be that the barges were loosely tied and "swinging in the breeze." No witness testified to this, and not even the length of the hawsers was shown. The deckhand, who probably saw exactly what happened, was not called as a witness. That it was possible for the Victor to avoid a collision is inferred by the success of the preceding tug, but the possibility of the feat was not the measure of its duty. The canal was built for navigation, and tugs are not required to navigate it at their peril. Moreover, the wind may have been different. The absence of evidence on this subject favors the party who does not bear the burden of proof.
NOTES
[1] Central Vermont R. v. White, 238 U. S. 507, 35 S.Ct. 865, 59 L.Ed. 1433, Ann. Cas.1916B, 252; New Orleans & N. E. R. Co. v. Harris, 247 U.S. 367, 38 S.Ct. 535, 62 L.Ed. 1167.
[2] 20 Am.Jur., Sec. 163.
[3] 86 U.S. 125, 19 Wall. 125, 22 L.Ed. 148.
[4] This should not be confused with a statutory presumption, contrary to which no proofs may be received. Benedict on Admiralty, Vol. 4, Sec. 620, p. 264 (6th Edition).
[5] Benedict on Admiralty, Vol. 4, p. 267 (6th Edition).
[6] General Seafoods Corporation v. J. S. Packard Dredging Co., 1 Cir., 120 F.2d 117.
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159 F.Supp.2d 1374 (2001)
Richard C. MAROTTE, Sr. and Olympla Marotte, Plaintiffs,
v.
AMERICAN AIRLINES, INC. and Madeline Barrett, Defendants.
No. 00-3425-CIV-JORDAN.
United States District Court, S.D. Florida, Miami Division.
August 29, 2001.
*1375 Richard J. Reisch, Carle Place, NY, Donna M. Balman, Donna M. Balman, P.A., Ft. Lauderdale, FL, for plaintiffs.
Emmet J. Schwartzman, Nancy H. Henry, Carlton Fields, P.A., Miami, FL, for defendants.
*1376 ORDER GRANTING MOTION FOR SUMMARY JUDGMENT
JORDAN, District Judge.
Richard C. Marotte, Sr. and Olympia Marotte allege that Madeline Barrett, an American Airlines employee, punched or pushed Mr. Marotte while they were trying to enter a jetway at Miami International Airport for a flight to New York, and that Mr. Marotte had to be hospitalized as a result of the assault. The Marottes sue American Airlines, Inc. for negligent hiring (Count IV), negligent supervision (Count V), negligent retention (Count VI), assault and battery (Count VII), intentional infliction of emotional distress (Count VIII), defamation (Count IX), breach of contract (Count X), and loss of consortium (Count XI). They also sue Ms. Barrett for assault and battery (Count I), intentional infliction of emotional distress (Count II), defamation (Count III) and loss of consortium (Count XI). Federal jurisdiction exists pursuant to 28 U.S.C. § 1332.
American moves for summary judgment on all of the Marottes' claims arguing that the claims are governed by the Warsaw Convention, 49 Stat. 3000, T.S. 876 (1934), reprinted in note following 49 U.S.C. § 40105, and barred due to its two-year statute of limitations. For the following reasons, the motion for summary judgment [D.E. 2] is GRANTED.
I. THE SUMMARY JUDGMENT STANDARD
Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A material fact is one that might affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Where the non-moving party fails to prove an essential element of its case for which it has the burden of proof at trial, summary judgment is warranted. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Hilburn v. Murata Electronics North Am., Inc., 181 F.3d 1220, 1225 (11th Cir.1999). Thus, the task is to determine whether, considering the evidence in the light most favorable to the Marottes, the non-moving parties, there is evidence on which a jury could reasonably return a verdict in their favor. See Liberty Lobby, 477 U.S. at 251, 106 S.Ct. 2505; Hilburn, 181 F.3d at 1225; Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997).
I. THE WARSAW CONVENTION
Article 17 of the Warsaw Convention holds airlines strictly liable for personal injuries resulting from "accidents" on certain international flights. Specifically, an injured party can recover damages from a carrier subject to certain monetary limits if the accident causing the injuries took place on board the aircraft or occurred "in the course of any of the operations of embarking or disembarking." As some federal courts have concluded, "intentional misconduct can be an accident under Article 17" of the Convention. See, e.g., Carey v. United Airlines, 255 F.3d 1044, 1048-49 (9th Cir.2001).
The Supreme Court has held that recovery for personal injuries suffered on board an aircraft or in the course of any of the operations of embarking or disembarking, if not allowed under Article 17 of the Convention, are not allowed at all. See El Al *1377 Israel Airlines Ltd. v. Tsui Yuan Tseng, 525 U.S. 155, 161, 119 S.Ct. 662, 142 L.Ed.2d 576 (1999). In other words, the Convention provides the exclusive remedy for injuries within its scope, and an injured party cannot resort to state law remedies where Article 17 bars relief or does not provide any relief.
American contends that the claims by the Marottes are governed by Article 17 because Mr. Marotte's alleged injuries took place as the Marotte party was embarking i.e., trying to get on the aircraft. Because Article 29 of the Convention contains a two-year statute of limitations, American argues that the claims in this case are time-barred. The Marottes dispute the applicability of the Convention, and maintain that they were in fact prevented from boarding their flight.
"Construction of the Warsaw Convention is a question of law." Blake v. American Airlines, Inc., 245 F.3d 1213, 1215 (11th Cir.2001). Although the Marottes do not dispute that their flight was an international flight under the Convention, they take issue with American's argument that they were embarking when Mr. Marotte was injured. "Whether a passenger is embarking or disembarking is a question of federal law to be decided on the facts of each case," Schmidkunz v. Scandinavian Airlines System, 628 F.2d 1205, 1207 (9th Cir.1980), and it is to those facts that I turn.
III. THE RELEVANT UNDISPUTED FACTS
The complaint and affidavits filed by the parties establish the following undisputed material facts for summary judgment purposes.
On August 20, 1996 Mr. Marotte, Mrs. Marotte, their son Richard Marotte Jr., and his girlfriend attempted to get on their intended flight from Miami to New York. See Affidavit of Richard Marotte ¶ 3 [D.E. 11, Exh. A] (Dec. 11, 2000). This flight was the final leg of their round-trip travel from New York, New York, to the Bahamas. See Affidavit of Margaret Martin ¶ 3 [D.E. 2, Exh. A] (Sep. 21, 2000). Mrs. Marotte was unable to find the tickets and boarding passes, so Mr. Marotte asked the desk attendant at the gate if they could board the plane anyway because the computer records showed that the tickets had been paid for and that seat assignments had been given. Mr. Marotte explained that he wanted to board the plane as soon as possible because he recently had heart bypass surgery, was a diabetic, and was not feeling well. See Affidavit of Richard Marotte ¶ 5. The gate attendant called her supervisor, Ms. Barrett, who informed Mr. Marotte that he would have to buy new tickets because the tickets previously purchased were like cash. See id. ¶ 6. Despite Mr. Marotte's repeated requests to board the plane due to his condition, Ms. Barrett refused to permit the party to board without buying new tickets. See id. ¶ 7.
While Mr. Marotte called American Express, through whom he had initially purchased the tickets, Mrs. Marotte found all the tickets and boarding passes in her pocketbook. Mrs. Barrett began to berate her saying that if she had not been so lazy in searching for, and negligent in not finding the tickets to begin with, she (Ms. Barrett) would not have had to go through so much trouble. See id. ¶ 9. Mr. Marotte complained about Ms. Barrett's behavior, and Mrs. Marotte took down Ms. Barrett's name to report her conduct. See id. ¶ 10.
Still in possession of their tickets and boarding passes, the Marotte group started walking toward the glass door that *1378 leads to the gate. See id. Before they could pass through, the glass door was suddenly closed at Ms. Barrett's direction. Ms. Barrett began yelling, got off the chair behind the counter where she had been sitting, and approached Mr. Marotte. Ms. Barrett punched or pushed Mr. Marotte in the chest so hard that he was propelled against the door and fell to the ground. Ms. Barrett then kneeled on top of Mr. Marotte, grabbed all of their tickets and passes, tore them up, called security, told them to call the police, and directed other personnel not to let the Marotte group board the plane. See id. ¶ 11; Affidavit of Olympia Marotte ¶ 4 [D.E. 11, Exh. B] (Dec. 5, 2000); Affidavit of Richard Marotte, Jr. ¶ 3 [D.E. 11, Exh. C] (Dec. 5, 2000).
Mr. Marotte was eventually taken by ambulance to a hospital, where he remained for a number of days. Mrs. Marotte stayed in Miami with him until he was released from the hospital. See Affidavit of Richard Marotte ¶ 13. Richard Marotte, Jr., and his girlfriend returned to New York the next day.
IV. ANALYSIS
American's position is that its liability is governed by the Warsaw Convention and that the Marottes are barred from any recovery because they failed to file suit within the Convention's two-year statute of limitations. The Marottes, on the other hand, contend that the Convention does not apply and maintain that they seek damages under state tort law. The sole issue for my determination is whether Mr. Marotte was "in the course of embarking" the aircraft within the meaning of the Convention at the time of Ms. Barrett's assault. If he was, then the Marottes' claims are time-barred.
Article 17 of the Convention provides as follows:
the carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.
49 U.S.C.App. § 1502. The terms "embarking" and "disembarking" are not defined by the Convention. Thus, in determining whether a passenger was "in the course of any of the operations of embarking" courts consider the following factors: (1) the passenger's activity at the time of the accident; (2) the passenger's whereabouts at the time of the accident; and (3) the amount of control exercised by the carrier at the moment of the injury. See, e.g., McCarthy v. Northwest Airlines, 56 F.3d 313, 317 (1st Cir.1995); Schroeder v. Lufthansa German Airlines, 875 F.2d 613, 617 (7th Cir.1989); Evangelinos v. Trans World Airlines, Inc., 550 F.2d 152, 155 (3d Cir.1977) (en banc); Maugnie v. Compagnie Nationale Air France, 549 F.2d 1256, 1261-62 (9th Cir.1977); Day v. Trans World Airlines, Inc., 528 F.2d 31, 33 (2d Cir.1975). No single inquiry is dispositive, and the three factors form a "single unitary [analytical] base." McCarthy, 56 F.3d at 317. Because the "terms `embarking' and `disembarking' ... connote a close temporal and spatial relationship with the flight itself," there "must be tight tie between an accident and the physical act of entering an aircraft." Id. at 316, 317.
The undisputed facts are that Ms. Barrett ordered the glass door leading to the gate to be closed when the members of the Marotte party boarding passes in *1379 hand were about to enter so that they could board the flight. Ms. Barrett then assaulted Mr. Marotte, knocked him down, took the Marotte party's passes and tickets from Mr. Marotte, and instructed security not to let the party board the flight. These facts, it seems to me, bring the Marottes' claims within the ambit of the Convention, as they demonstrate that the Marottes were in the process of embarking at the time of the incident. First, Mr. Marotte and his party had their boarding passes in hand and were about to board the airplane. Second, Mr. Marotte and his party were at the glass door leading to the gate and were about to enter the door when it was closed at Ms. Barrett's direction. They were no longer in the common passenger area of the airport. Third, American was exerting control over the Marotte party at the time of the incident. The glass door was the only means of reaching the plane, so the Marotte party was required to use it to board their flight. No one on American's behalf gave the Marotte party permission to go through the glass door and to the airplane, and in fact Ms. Barrett who had earlier prohibited the party from boarding without their tickets physically prevented the party from boarding the flight by ordering the glass door to be closed, assaulting Mr. Marotte, and taking the tickets and passes from Mr. Marotte. See Rajcooar v. Air India Ltd., 89 F.Supp.2d 324, 327-28 (E.D.N.Y.2000) (passenger in process of embarking when he suffered heart attack even though not acting under specific control of airline passenger was proceeding to departure gate, had completed virtually all steps required to board, and was in part of airport accessible only to passengers on international flights).
The fact that the Marotte party had not actually reached the airplane at the time of Ms. Barrett's assault does not change this result. In Evangelinos, the Third Circuit correctly rejected a hard and fast rule based strictly on location:
[W]e cannot concede to the notion that a line can be drawn at a particular point, such as the exit door of an air terminal which leads to the airfield. This is because a test that relies on location alone is both too arbitrary and too specific to have broad application, since almost every situation and every airport is different.
550 F.2d at 155. See also Maugnie, 549 F.2d at 1261 (holding that a "rule based solely on location of passengers is not in keeping with modern air transportation technology" and that "determining whether passengers were inside or outside the airport terminal at the time of injury should not end the analysis").
Mr. Marotte contends that his case is analogous to Rullman v. Pan American World Airways, Inc., 122 Misc.2d 445, 471 N.Y.S.2d 478 (N.Y.Sup.1983), and thus does not fall within the Warsaw Convention, but that decision is distinguishable. In Rullman, the plaintiff was scheduled to fly from Rome, Italy, to New York, New York, with a one-hour stopover in Ireland. She presented her ticket at the check-in counter at the airport in Rome, was checked in, and checked her baggage. She became ill in the airport terminal waiting room during an eight-hour delay, and argued that she became ill because of the inadequate terminal facilities. After the first leg of her flight, the plaintiff disembarked for her layover and sat in the terminal by a window. During her wait she tried to get medical treatment at an infirmary. After an additional three-hour delay the passengers were informed that their plane would not continue its flight to *1380 New York until the following morning. The passengers were instructed to retrieve their personal belongings from the airplane, after which they would be taken to a hotel for the night. While reboarding the plane to collect her belongings, the plaintiff fainted and fell approximately ten feet from the door of the aircraft, on the jetway connecting the terminal and the plane. See id. at 479. The plaintiff, who suffered injury to her knee as a result of the fall, alleged that the airline breached its duties to her by failing to provide her with food, drink, or adequate rest or medical facilities during her eight-hour and three-hour delays.
The Rullman court first held that the plaintiff's injury was not an "accident" within the meaning of the Warsaw Convention. The court also held that the airline's breach of its duty to the plaintiff did not occur during operations of embarking or disembarking. See id. at 481. The court found that "the gravamen of the complaint [was] that Pan Am's negligent operation of the terminal waiting rooms at Ciompino and Shannon Airports caused the plaintiff to faint and fall on the jetway." Id. at 479. The court, however, specifically distinguished this situation from one in which the plaintiff had fallen in the terminal. The court explained that "had plaintiff simply tripped on a carpet in the jetway and injured herself and that constituted the gravamen of the complaint, [Pan Am's] claim that she was injured while embarking might be meritorious." Id. at 481.
During the delays in question, the plaintiff in Rullman was not at any of the gates leading to the respective jetway, but rather was waiting in the appropriate terminal waiting room. She was free to move about those terminals and was not under the direction of the airline personnel. Her purpose at each of the times the airline supposedly breached its duties toward her was to wait for her flight, and not to board any plane.
It goes without saying that waiting for a plane and trying to board one are two different things, and that difference is important under Article 17 of the Warsaw Convention. In contrast to the plaintiff in Rullman, the Marottes were not lounging in a terminal waiting room at the time of Ms. Barrett's alleged assault. They were instead preparing to board the plane imminently to continue with their flight. They only had to present their boarding passes or tickets and walk through the glass door to the gate, which led to the jetway.
The Marottes' argument that the Convention is inapplicable because Ms. Barrett actually prevented their party from getting on the flight is not persuasive. The applicability of the Convention is not dependent on the success of embarkation, but rather on whether the accident in question took place during the process of embarking. See Evangelinos, 550 F.2d at 155-56; Day, 528 F.2d at 33-35. Cf. Schmidkunz v. Scandinavian Airlines System, 628 F.2d 1205, 1206-07 (9th Cir. 1980) (passenger injured on moving walkway not embarking within meaning of Convention because she was in common passenger area of airport and about 500 yards from boarding gate, had not received boarding pass from airline, was not under direction of airline's personnel, and was not imminently preparing to board flight).
Thach v. China Airlines Ltd., No. 95 Civ. 8468(JSR), 1997 WL 282254 (S.D.N.Y. May 27, 1997), presents an analogous set of facts. The plaintiff in Thach was flying home to New York from Vietnam. He was *1381 traveling home earlier than scheduled because his fiancé was experiencing difficulties with her pregnancy. At an intermediate stop in Taiwan, all passengers bound for New York were required to change planes. Before boarding the new plane, China Airlines officials reinspected each passenger's travel documents. See id. at *1. The plaintiff held a valid, newly issued U.S. passport, but the employee at the CAL transit counter became suspicious because of its new appearance and because the plaintiff looked Vietnamese. The employee took the passport to the Taiwan Aviation Police Bureau where a police official inspected it. The police official was also suspicious of the passport, but was unable to confirm his suspicions and thus returned the passport to the plaintiff. A short while later, the police official went to the CAL transit counter with a U.S. passport belonging to another passenger and told the CAL employee that he believed the plaintiff's passport was fake because the three red stars on the side had a different tint than the stars on the passport he was examining. The police official and the CAL employee went to the boarding gate where they located the plaintiff, who was waiting to board his flight, and reinspected his passport. Based on a comparison of the two passports, the police official mistakenly concluded that the plaintiff's passport was fraudulent and so advised the CAL employee. The CAL employee advised the plaintiff that he would not be permitted to travel on CAL to New York. The plaintiff was detained at the airport by the police for about ten to twelve hours, and was ultimately forced to board the next available flight to Vietnam. See id. at *1-*2. Only after considerable further delay was the plaintiff able to return from Vietnam to his home in New York. The district court held, with little analysis, that it was "clear that the accident occurred during the operations of embarking or disembarking." See id. at *3.
V. CONCLUSION
Based on the undisputed facts, I conclude that the Marottes' claims are within the scope of the Warsaw Convention. The Marottes' imminent boarding and their proximity to the gate and the airplane, together with the control exerted by American's employee, Ms. Barrett, demonstrate that the Marotte party was "in the course of any of the operations of embarking" at the time of the alleged incident. Because the Marottes' claims are time-barred by the Convention's two-year statute of limitations, American's motion for summary judgment [D.E. 9] is GRANTED. I decline to exercise supplemental jurisdiction over the Marottes' claims against Ms. Barrett, who apparently still has not been served. See 28 U.S.C. § 1367(c)(3).
A final judgment will issue by separate order.
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
LTC RICHARD A. VARGUS,
Plaintiff,
v. Civil Action No. 14-924 (GK)
JOHN M. MCHUGH, SEC'Y
OF THE ARMY,
Defendant.
MEMORANDUM OPINION
Plaintiff Lieutenant Colonel Richard A. Vargus ("Plaintiff"
or "LTC Vargus") brings this action against Defendant Secretary of
the Army John M. McHugh ("Defendant" or "the Government") to
challenge decisions of the Army Board for Correction of Military
Records ( "ABCMR" or "the Army Correction Board") as arbitrary,
capricious, unsupported by substantial evidence, or contrary to
applicable law or regulation under the Administrative Procedure
Act ("APA"), 5 u.s.c. § 706.
This matter is presently before the Court on Plaintiff's
Motion to Compel Production of the Administrative Record [Dkt. No.
10]. Upon consideration of the Motion, Opposition ("Gov't's
Opp'n") [Dkt. No. 12], and Reply [Dkt. No. 16], the entire record
herein, and for the reasons stated below, Plaintiff's Motion to
Compel Production of the Administrative Record is granted.
I . BACKGROUND
On May 30, 2014, Plaintiff filed his Complaint seeking review
under the APA, 5 U.S.C. § 706, of two decisions by the Army Board
for Correction of Military Records. The Army Correction Board first
denied the relief Plaintiff sought on February 24, 2009, and denied
his request for reconsideration on September 24, 2009.
The precise factual details of Plaintiff's claims before the
Army Correction Board are complex, but the essential thrust is
that the United States Army failed to properly classify LTC
Vargus' s area of specialization. That improper classification,
according to LTC Vargus, deprived him of the opportunity for
promotion to the rank of colonel.
On October 30, 2014, the Government filed a Motion to Dismiss
("Gov' t' s Mot. to Dismiss") , contending that this Court lacks
jurisdiction to hear Plaintiff's challenge, see Fed. R. Civ. P.
12(b) (1), and that Plaintiff has failed to state a claim upon which
relief can be granted, see Fed. R. Civ. P. 12(b) (6). The Government
contends, among other things, that Plaintiff's request for
reclassification presents a non-justiciable political question,
that Plaintiff failed to exhaust available administrative
remedies, that Plaintiff's claim is moot, and that Plaintiff is
not entitled to the particular relief he has requested. In support
of its Motion to Dismiss, the Government attached several exhibits,
-2-
many of which were drawn from or rely on the Administrative Record
underlying the ABCMR's proceedings.
On November 17, 2014, Plaintiff filed a Consent Motion for an
Extension of Time to File an Opposition to Defendant's Motion to
Dismiss [Dkt. No. 8], which the Court granted the next day.
On December 12, 2014, Plaintiff filed his Second Consent
Motion to Extend Time to File [Dkt. No. 9]. In this Second Consent
Motion, Plaintiff stated that "a dispute ha[d] arisen over the
time to produce and file the [A]dministrative [R] ecord. "
Accordingly, Plaintiff would "shortly file a motion to compel
production of the [A] dministrati ve [R] ecord [,]" which Defendant
would oppose. Id. Plaintiff suggested that "the Court hold
[Plaintiff's Opposition] to [Defendant's] Motion to Dismiss in
abeyance until 30 days after the administrative record is filed,
if the Court so rules." Id. A copy of the Second Consent Motion
was served upon counsel for Defendant. Id.
The Second Consent Motion (as its title suggests) was made
with Defendant's consent, and the Government did not indicate any
objection to Plaintiff's proposal. Accordingly, the Court granted
the Motion by Minute Order on December 15, 2015. By that Order,
the Court held in abeyance Plaintiff's obligation to file his
Opposition to Defendant's Motion to Dismiss "until 30 days after
the Administrative Record is filed," in the event the Court orders
-3-
its production. Defendant has never asked this Court to reconsider
its Order regarding the briefing schedule for the Motion to
Dismiss.
On December 31, 2014, Plaintiff filed his Motion to Compel
Production of the Administrative Record which is presently before
the Court. Following requests for extensions of time to file from
both Parties, the Government filed its Opposition on February 3,
2015, and Plaintiff filed his Reply on March 12, 2015.
II. STANDARD OF REVIEW
The Administrative Procedure Act requires reviewing courts to
"set aside agency action, findings, and conclusions found to be
arbitrary, capricious, abuse of discretion, or otherwise not
in accordance with law [.]" 5 U.S. C. § 706. In doing so, the APA
requires courts to "review the whole record or those parts of it
cited by a party [.]" Id.
Some matters, like "interpreting the extent to which [a]
regulation is consistent with [a] statute [,]" may be "resolved
with nothing more than the statute and its legislative history."
Am. Bankers Ass'n v. Nat'l Credit Union Admin., 271 F.3d 262, 266
(D.C. Cir. 2001). Often, jurisdictional questions may be decided
-4-
without recourse to the record. See Swedish American Hosp. v.
Sebelius, 691 F. Supp. 2d 80, 85 (D.C.C. 2010) . 1
However, when courts must determine whether the "adjudicatory
process was reasonable and whether the decision was consistent
with Congressional intent[,]" they must look to the administrative
record. Swedish American, 691 F. Supp. 2d at 89. When recourse to
the record is necessary, a court "should have before it neither
more nor less information than did the agency when it made its
decision." See Boswell Memorial Hosp. v. Heckler, 749 F.2d 788,
792 (D.C. Cir. 1984). "To review less than the full administrative
record might allow a party to withhold evidence unfavorable to its
case and so the APA requires review of 'the whole record.'" Id.
III. ANALYSIS
The Government argues that the Court should deny Plaintiff's
Motion to Compel Production of the Administrative Record because
resolution of its Motion to Dismiss does not require inquiry into
the full Record. In the Government's words,
the administrative record is not needed to decide whether the
Court may direct an officer's assignment to a particular
position in the Army; whether Plaintiff has exhausted his
administrative remedies; whether Plaintiff's claims are moot
because the requested amendments to his Official Military
Personnel Record ("OMPF") have been made; or whether
1 Of course, the Court may always look beyond the pleadings to
determine whether it has subject matter jurisdiction. Jerome
Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253-
54 (D.C. Cir. 2005).
-5-
Plaintiff states a claim for inclusion of civilian records in
his OMPF.
Gov't's Opp'n at 2 (internal citations omitted).
In order to advance these particular arguments in its Motion
to Dismiss, however, the Government itself relies on "a miscellany
of documents, many of which might properly appear in an
administrative record." Boswell Mem'l Hosp., 749 F.2d at 792. For
instance, the Government relies on two affidavits to support its
argument that Plaintiff's claim is moot because all ABCMR-ordered
changes to LTC Vargus's record have been implemented. See Gov't's
Mot. to Dismiss at 15 (citing [Dkt. Nos. 7-5, 7-6]). Whether such
changes have occurred can only be assessed with reference to the
Record itself.
The Government goes on to cite affidavits for the proposition
that it does not possess and cannot alter LTC Vargus's National
Guard records and that an explanation for the absence of various
documents has been placed into Plaintiff's personnel file. See
Gov't's Mot. to Dismiss at 16, 18. The Government contends that
these facts demonstrate that Plaintiff has failed to state a claim
upon which relief can be granted. Whether or not these points are
dispositive of Plaintiff's claims, the Court cannot fully evaluate
them without the Administrative Record.
-6-
Finally, the Government argues that Plaintiff failed to
request particular relief from the ABCMR and has therefore failed
to exhaust his administrative remedies. Gov't's Mot. to Dismiss at
7. Again, the whether the Government is correct is a question best
answered by the Administrative Record.
Our Court of Appeals has made clear that "[f]or review to go
forward on a partial record, [the Court] would have to be convinced
that the selection of particular portions of the record was the
result of mutual agreement between the parties after both sides
had fully reviewed the complete record. In that situation, [the
Court] might naturally assume that the omitted portions did not
materially affect either party's case and, for [the Court's] own
convenience, review the case on that portion of the record cited
by the parties." Boswell Mem'l Hosp., 749 F.2d at 793. However,
where one party might be unaware of some parts of the record,
failure to produce the Record in its entirety would produce
"asymmetry in information [that] undermines the reliability of a
court's review upon those portions of the record cited by one party
or the other." Id. (remanding case to the District Court for
reconsideration with the benefit of the entire record) .
The arguments Defendant raises in its Motion to Dismiss rely,
at least in part, upon the Administrative Record. Accordingly, the
Government must produce the Record in order to allow Plaintiff to
-7-
rely upon it as well as to enable the Court to evaluate the strength
of both Parties' arguments.
The Government responds that because a court "may consider
documents outside the pleadings to assure itself that it has
jurisdiction[,]" Al-Owahali v. Ashcroft, 279 F. Supp. 2d 13, 21
(D.D.C. 2003), the documents it cites are attached merely to
demonstrate that this Court lacks jurisdiction to hear Plaintiff's
claims. Moreover, as the Government notes, "Courts are not required
to consider the administrative record pertaining to a challenged
action when deciding whether [they] ha [ve] subject matter
jurisdiction." Fund for Animals v. Williams, 391 F. Supp. 2d 132,
135 n.3 (D.D.C. 2005) (emphasis added) (noting also that courts
may consider materials outside the pleadings) .
The Government's Motion to Dismiss, however, raises both
jurisdictional questions under Fed. R. Civ. P. 12(b) (1) and the
merits under Fed. R. Civ. P. 12 (b) (6). Defendant may very well
prevail on one of the jurisdictional arguments in its Motion, which
this Court must resolve before considering the merits. Swedish
American, 691 F. Supp. 2d at 85 (citing United States ex rel.
Settlemire v. District of Columbia, 198 F.3d 913, 920 (D.C. Cir.
1999)). However, this Court cannot, at this stage, determine the
Government's likelihood of success.
-8-
The Government consented (or at the very least failed to
object) to a briefing schedule that postponed filing of Plaintiff's
Opposition until after resolution of Plaintiff's Motion to Compel.
Without full briefing, the Court lacks sufficient evidence to
assess the strength of the Government's arguments that do not rely
on the Administrative Record. 2
IV. CONCLUSION
For the foregoing reasons, Plaintiff's Motion to Compel
Production of the Administrative Record is granted. An Order shall
accompany this Memorandum Opinion.
April 9, 2015 Glfi/trd:er' /~
United States District Judge
Copies to: attorneys on record via ECF
2
In Swedish American, 691 F. Supp. 2d 80, the Court confronted a
situation similar to the case at hand, and now each party claims
that the case supports its position. In Swedish American, the Court
simultaneously granted a motion to compel production of the
administrative record and dismissed several claims for lack of
jurisdiction. Id. at 85, 87. Despite the Government's objections,
the Court held that the record was necessary to decide whether
claims brought under the APA should be dismissed. Id. at 87. The
Court was able to dismiss some claims on jurisdictional grounds
because it had the benefit of full briefing on the motion to
dismiss. Id. Rather than requesting a stay of briefing, the Swedish
American plaintiff had gone ahead and filed an opposition to the
defendant's 12(b) motion without waiting for the Court to rule on
the motion to compel production. Id. at 88 n.6. Like the Swedish
American Court, this Court cannot reach the merits of Defendant's
Motion to Dismiss without the Administrative Record, but unlike
Swedish American, this Court cannot even reach Defendant's
jurisdictional arguments because it lacks full briefing.
-9-
| {
"pile_set_name": "FreeLaw"
} |
538 F.Supp. 343 (1982)
Ovis Ray BAXTER, Plaintiff,
v.
Richard S. SCHWEIKER, Secretary of Health and Human Services, Defendant.
Civ. A. No. C80-35A.
United States District Court, N. D. Georgia, Atlanta Division.
May 7, 1982.
*344 *345 Ovis Ray Baxter, pro se.
Lawrence E. Gill, Asst. U. S. Atty., Atlanta, Ga., for defendant.
ORDER
ROBERT H. HALL, District Judge.
I. INTRODUCTION
The plaintiff, Ovis Ray Baxter, brought this action to obtain judicial review of a final decision of the Secretary of Health and Human Services ("the Secretary") which denied the plaintiff's claim for a period of disability and disability insurance benefits ("the Title II claims") and supplemental security income ("SSI" or "the Title XVI claim") under sections 216(i), 223, and 1614(a)(3) of the Social Security Act ("the Act"), 42 U.S.C.A. §§ 416(i), 423, and 1382c(a)(3) (West 1974 & Supp. 1975-1980). The decision at issue was made by the Appeals Council on November 12, 1980, when it adopted a recommended decision of Administrative Law Judge ("ALJ") Rothbloom, denying the plaintiff benefits under both Titles II and XVI.
The plaintiff is 54 years old, and completed the sixth grade. (Tr. 12). He last worked in 1972. (Tr. 88). His work experience includes loading tractor-trailers, servicing appliances, and curing hams. The plaintiff alleges that he suffers from numerous disabling problems, including arthritis of the shoulders, legs and hands; shortness of breath even when engaged in only light exercise; difficulty lifting; and difficulty standing or sitting in excess of thirty minutes. The plaintiff also alleges that he has undergone throat surgery on two occasions and had a portion of his vocal chords removed, resulting in difficult speaking; that he has had ulcer and stomach problems; and that he has been taking medication for a nervous condition since 1974.
*346 The plaintiff argues that the ALJ's decision denying him benefits is not supported by substantial evidence.
II. JURISDICTION AND STANDARD OF REVIEW
As a preliminary matter, the court notes that the plaintiff's complaint predicates jurisdiction on section 205(g) of the Social Security Act, 42 U.S.C.A. 405(g) (West 1974 & Supp. 1981) and section 10 of the Administrative Procedure Act, 5 U.S.C. 706 (1976). The Supreme Court has ruled that the Administrative Procedure Act does not provide an independent grant of subject matter jurisdiction to review claims under the Social Security Act, Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977). Thus, the court agrees with the defendant that the court's jurisdiction over claims such as those here must be based solely on the provisions of the Social Security Act, 42 U.S.C.A. 405(g) (West 1974 & Supp. 1981) and 42 U.S.C.A. 1383(c)(3) (West 1974 & Supp. 1975-1980). See Ellis v. Schweiker, 662 F.2d 419 (5th Cir. 1981).
The court's function in reviewing the final decision of the Secretary is not to try the case de novo or to reweigh the evidence, but rather to determine whether there is substantial evidence in the record considered as a whole to support the Secretary's findings, and whether the proper legal standards were applied to the fact-finding process. The Secretary's findings must be sustained if supported by substantial evidence and proper legal standards were applied. 42 U.S.C.A. § 405(g) (West 1974 & Supp. 1981); Gaultney v. Weinberger, 505 F.2d 943 (5th Cir. 1974); Rivas v. Weinberger, 475 F.2d 255 (5th Cir. 1973). Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion and must be enough to justify a refusal to direct a verdict were the case before a jury. Richardson v. Perales, 402 U.S. 389, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971); Breaux v. Finch, 421 F.2d 687 (5th Cir. 1970).
In order to qualify for disability and SSI payments based upon disability, a plaintiff has the burden of producing sufficient evidence, medical or otherwise, to show that he was under a "disability" within the meaning of the Social Security Act. Kirkland v. Weinberger, 480 F.2d 46 (5th Cir. 1973); Hart v. Finch, 440 F.2d 1340 (5th Cir. 1971). An individual is considered to be disabled if he is unable to "engage in substantial gainful activity by reason of any medically determinable physical or mental impairment which could be expected to last for a continuous period of not less than twelve months." 42 U.S.C. § 423(d)(1) (1976). Moreover, the impairment must result from anatomical, physiological abnormalities which are demonstrable by medically acceptable clinical and laboratory diagnostic techniques and must be of such severity that claimant is not only unable to do his previous work but cannot, considering his age, education, and work experience engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether a specific job vacancy exists for him, or whether he would be hired if he applied for work. 42 U.S.C. §§ 423(d)(2), (3), 1382c(a)(3)(B), (C) (1976).
Because the plaintiff's Title II and Title XVI claims are based on separate periods of eligibility, and therefore on separate evidence, they will be individually reviewed.
III. DISABILITY CLAIMS UNDER TITLE II
Section 205(g) of the Social Security Act authorizes federal judicial review of "any final decision of the Secretary made after a hearing to which [the claimant] was a party...." The history of the plaintiff's benefits claims, revealed on the face of the record, indicates that the plaintiff has received not one, but two hearings[1] and two "final decisions" on his Title II claims. The 1980 decision now before the court is the second of these decisions. The Secretary does not contend that the decision on the first hearing raises any bar to a review of the decision on the second hearing, and he *347 has confined himself, as did the ALJ, to the inquiry of whether there was substantial evidence for the ALJ's findings of fact.
However, even though the parties have not addressed the issue, there is an important question as to the proper scope of the court's review of the most recent hearing and decision in light of the res judicata effects of the findings of fact established in the prior hearing and "final decision." More particularly, this record presents the issue of how courts should treat a claimant who receives an adverse ruling on a claim, but fails either to exhaust his administrative remedies and seek court review, or to petition to reopen his case pursuant to 20 C.F.R. § 404.987 (1981), and instead, refiles a similar, perhaps identical claim, pursuing it through a second hearing to judicial review without a challenge by the Secretary on res judicata grounds.
Section 205(h) of the Social Security Act, 42 U.S.C.A. § 405(h) (West Supp. 1981), states in pertinent part that:
"The findings and decisions of the Secretary after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided...."
The review referred to in § 205(h) as "herein provided" is that described in section 205(g) of the Act, authorizing judicial review only if a claimant commences an action in a district court within sixty days, or such further time as the Secretary may allow, after exhaustion of administrative remedies and mailing of the notice of the Secretary's final decision to the claimant. The Secretary has established a sequential procedure providing for several levels of determinations and review of each claim. A determination becomes the Secretary's "final decision" when the claimant either exhausts or abandons the administrative process. See 20 C.F.R. § 404.900 et seq. (1981).[2]
Under ordinary circumstances, the Secretary has retained the sixty day period after mailing of a final decision notice as the period during which a claimant may seek judicial review. 20 C.F.R. §§ 404.981, 404.982 (1981). Nonetheless, even if a claimant does not seek judicial review, or the review is adverse, the Secretary allows a claimant the opportunity to reopen his claim. 20 C.F.R. § 404.987 (1981). A claim may be reopened: (a) within twelve months of the notice of determination for any reason; (b) within four years of the date of notice for good cause; and (c) at any time if any of nine special circumstances, such as fraud or clerical error, affected the original determination.
Despite, or perhaps because of, the many levels of review prior to a final decision, and the opportunities to reopen a case after a final decision, the finality principles of section 205(h) are especially important. These principles are incorporated, in part, in a regulation of the Secretary, 20 C.F.R. § 404.957(c)(1) (1981), which empowers an ALJ to dismiss a request for a hearing on the basis of res judicata. Regulation 404.957 does not, however, command dismissal of a second hearing when res judicata principles could apply. It merely states that "[a]n administrative law judge may dismiss a request for hearing ... [on res judicata grounds]...." The discretion given to an ALJ in determining whether to grant a requested hearing is appropriate because the record may not clearly reveal whether a claimant's second application for Title II benefits is identical to his first claim in all regards, for example, whether both claims are based on the same eligibility period.
If a hearing request is granted, however, and the existence of a prior decision and the identity of claims is established, there is considerable doubt as to the power of the ALJ, the Appeals Council, or a reviewing court to modify the decision in the prior hearing absent the grant of a petition to reopen. See Wilson v. Califano, 580 F.2d *348 208, 210 (6th Cir. 1978) (once decision becomes final, even if not reviewed by district court, it may not be reviewed by a district court as part of its review of a subsequent decision), citing Domozik v. Cohen, 413 F.2d 5 (3d Cir. 1969); Leviner v. Richardson, 443 F.2d 1338 (4th Cir. 1971). See also Myers v. Gardner, 361 F.2d 343 (9th Cir. 1966).
While under Rule 8(c), the Federal Rules of Civil Procedure, res judicata is an affirmative defense which is waived if not asserted, in the context of Social Security Act proceedings, this rule does not automatically apply. The res judicata of the federal rules is based on judge-made, equitable principles, and waiver is therefore appropriate if the parties to a dispute do not raise the issue in a timely fashion. Under the Social Security Act, however, the principle of res judicata is an important, statutory element in the Congressionally mandated scheme of Social Security administration.
The Supreme Court has stated that "Congress' determination so to limit judicial review to the original decision denying benefits is a policy choice obviously designed to forestall repetitive or belated litigation of stale eligibility claims. Our duty, of course, is to respect that choice." Califano v. Sanders, supra, 430 U.S. at 108, 97 S.Ct. at 985 (emphasis added). As the Supreme Court pointed out, the opportunity to reopen final decisions is afforded by the Secretary's regulations and not by the Social Security Act itself. If a claimant follows the appropriate regulations, see 20 C.F.R. 404.987 (1981), and has an original decision reopened, judicial review can follow. But barring this, the Social Security Act clearly prohibits a second de novo determination by the Secretary, or the courts, of a matter already "finally decided." See Califano v. Sanders, supra at 110, 97 S.Ct. at 987 (Stewart, J., concurring).
The fact that an ALJ did not invoke res judicata to bar a second de novo hearing cannot affect section 205(h)'s command to a court if the hearing record reveals a prior decision on an identical claim and no petition to reopen. Accordingly, res judicata can be invoked by the district court to put an end to litigation even though the ALJ did not rely on res judicata, but considered and denied a claimant's repetitive application on the merits. Domozik, supra, cited in Wilson, supra at 211.
Despite the opportunity to end repetitive litigation on res judicata grounds, some reviewing courts have adopted the practice of deeming repetitive applications to be petitions to reopen pursuant to 20 C.F.R. § 404.987 (1981), see, e.g., Ellis v. Schweiker, 662 F.2d 419 (5th Cir. 1981), and then considering the merits of the petition. Grose v. Cohen, 406 F.2d 823 (4th Cir. 1969). Other courts have proceeded to review a repetitive application on the merits, notwithstanding the res judicata issue. See, e.g., Newborn v. Harris, 602 F.2d 105, 106, n.1 (5th Cir. 1979). However, these practices began before the decision in Califano v. Sanders, supra, holding that the denial of a petition to reopen is not appealable unless it involves questions of constitutional dimension. After Califano v. Sanders, the vitality of these practices is subject to question.
In light of Califano v. Sanders, the administration of justice would be best served if the ALJ routinely inquired into the existence of prior decisions on identical claims. If any were discovered, the ALJ could allow the parties to submit evidence on a petition to reopen, and the ALJ could then decide the petition. If the decision were adverse to the claimant, courts would be relieved from the burden of handling cases Congress never intended courts to consider. Califano v. Sanders, supra.
In the absence of this inquiry by the ALJ, if the record plainly reveals a prior hearing and decision, a reviewing court would either have to fulfill the ALJ's role and address the issue of reopening the case, or remand to the ALJ.
The advantage of having the reviewing court address the issue of reopening the case is that a claimant would thereby receive speedy adjudication of his claim. The disadvantages of this option are first, that the court's decision would presumably be subject to appeal, a situation at odds with *349 the teaching of Califano v. Sanders; and second, that the parties should be provided an opportunity to present evidence and file briefs on the issue of reopening the original case, a process best undertaken before an ALJ in the first instance. While remand to an ALJ delays resolution of a particular case, adherence to the requirement that ALJs explicitly decide petitions to reopen by nonappealable orders increases the efficiency of the entire Social Security appeals process.[3]
The court now turns to the facts of the instant case, and the application to those facts of the res judicata principles discussed above.
The plaintiff first sought Title II benefits in February 1974. His insured status expired March 31, 1974. Accordingly, he had to establish a disability which existed by March 31, 1974. The plaintiff's claim was administratively denied, reconsidered, and denied again. The plaintiff then requested a hearing, and one was subsequently held before ALJ Windels. In a decision dated May 29, 1975, the ALJ found that the plaintiff was not disabled for purposes of his Title II claims, (Tr. 252-256). The plaintiff delayed filing his request for an Appeals Council review until March, 1976, over seven months after the sixty day period for filing a notice of appeal had run. The appeals council did not find good cause for the delay, and dismissed the request for review as untimely. (Tr. 261-2). No further appeal was taken.
On September 30, 1977, the plaintiff refiled a claim for Title II benefits based on the same eligibility date as his first application. (Tr. 263). As before, the claim was administratively denied, reconsidered, and denied. Once again, the plaintiff sought a hearing. A hearing was held in September 1978, before ALJ Knox. The plaintiff's Title II claims were denied, the Appeals Council affirmed the ALJ's decision, and a complaint was filed January 8, 1980 in this court.
Because of a poor tape recording from the hearing before ALJ Knox, a hearing transcript could not be prepared. Accordingly, the case was remanded, and a third de novo hearing was held, August 28, 1980, this time before ALJ Rothbloom.[4] In a recommended decision adopted by the Appeals Council, the plaintiff's Title II claims were denied once again. The case was returned to this court in March, 1981.
The record on this case shows on its face that the Title II claim now before the court was "finally decided" without appeal in 1975. (Tr. 261-2). No evidence that a petition to reopen was filed. The court notes that the claim now before the court was filed in September 1977, more than one year, but less than four years, after the final decision on the original claim. Accordingly, even if the plaintiff's current claim is deemed a petition to reopen, the plaintiff must show special circumstances or good cause in order to prevail on the petition. 20 C.F.R. §§ 404.988, 404.989 (1981). The court also notes that only one new piece of evidence on the plaintiff's condition prior to April 1, 1974, not available at the original hearing, was submitted at the subsequent hearings. (Tr. 364). This evidence dealt solely with dental work which was not in any way connected with the plaintiff's alleged disability.
In light of the requirements of section 205(h) of the Act and the holding of Califano v. Sanders, supra, and because neither the parties nor the ALJ addressed the res judicata issues present on the face of the record, the Title II claim should be remanded for clarification of the res judicata effect of the 1975 hearing. If, as it *350 appears, the 1975 claim is found to be identical to the 1977 claim, so the 1975 decision is binding, the ALJ should then decide whether the 1977 claim should be treated as a petition to reopen, and whether as such, it should be granted.
IV. DISABILITY CLAIMS UNDER TITLE XVI
The plaintiff applied for SSI benefits under Title XVI in 1974 and 1977, at the same time he applied for disability benefits under Title II. The SSI applications, which have the same procedural history as their Title II counterparts, were denied at each stage of determination or review. However, the res judicata issues raised in connection with the plaintiff's Title II claims are not as critical here, since Title XVI benefits are not tied to the attainment of a particular period of insurance eligibility, and de novo applications may always be filed, effective from the date of application to the date of final decision, or the date of court review, whichever is later. 20 C.F.R. § 416.330 (1981). Accordingly, the court must consider whether there was substantial evidence for the ALJ's conclusion that plaintiff was not disabled at any point from September 30, 1977 forward.
It is evident that many of the plaintiff's medical and psychological problems developed or worsened after May 29, 1975, the date the plaintiff's prior SSI claim was finally decided. Citing his changed condition, the plaintiff maintains that even if he was not disabled by May 29, 1975, the ALJ lacked substantial evidence to conclude that he was also not disabled by September 30, 1977, the date of reapplication, or August, 1980, the date of his most recent hearing.
The plaintiff asserts that in reaching his decision the ALJ failed to consider all of the medical evidence and erred in according greater weight to the report of Dr. Hudgins, (Tr. 332), a consultative physician, than he did to the reports of the plaintiff's treating physicians, Dr. Hamilton, (Tr. 230), and Dr. Abellera, (Tr. 241). Specifically, plaintiff objects that the ALJ erred in concluding that the treating physicians' opinions were not supported by sufficient clinical findings, and by failing to refer at all to the reports of Drs. Hamilton and Abellera.
A. Review of the Physicians' Reports
The opinion, diagnoses, and medical evidence of the treating physician should be accorded considerable weight. Perez v. Schweiker, 653 F.2d 997 (5th Cir. 1981). However, a physician's conclusory statement on the ultimate issue of disability is not binding on the ALJ. The weight to be given a physician's statement depends on the extent to which it is supported by specific and complete clinical findings and is consistent with other evidence about the severity and probable duration of the individual's impairment. Oldham v. Schweiker, 660 F.2d 1078 (5th Cir. 1981); Ware v. Schweiker, 651 F.2d 408 (5th Cir. 1981).
The reports of Drs. Hamilton and Abellera were both considered by ALJ Windels in his 1975 decision. Since these reports date from October, 1973 and February 1975 they are not probative of any change in the plaintiff's condition after May 1975, which is the period relevant to this review. Several of the reports of Dr. Murray (Tr. 237, 244) were also made prior to May 1975. The report of Ms. Wilson, a physician's assistant, is of minimal probative value, since she is not qualified to give medical opinions, and does not refer to any specific doctors' opinions, but merely states that in "our medical opinion" the plaintiff is unable to maintain gainful employment. Dr. Lee's report states that "since 1973 [the claimant's] condition has remained stable." (Tr. 344).
While the treating physicians refer to chronic bronchitis, chronic obstructive pulmonary disease, chronic gastritis or dyspepsia, aerophagia, chronic osteoarthritis, and anxiety (Tr. 344, 359-62), there is substantial evidence that these conditions, though undoubtedly present at various times, were not disabling, either singly or in combination (Tr. 324, 325, 328/345-6, 363-4). The reports of Drs. Hudgins and Prince (Tr. 332-8, 365-9) confirm various medical and psychological problems, but give further evidence that these problems are not so severe *351 as to prevent all substantial gainful activity. Furthermore, the reports of Drs. Hudgins and Prince were made after most of the treating physician's reports relied on by the plaintiff.
The mere presence of medical problems does not constitute disability; there must also be disabling effects. The plaintiff has not directed the court to any clinical evidence establishing disabling effects from his medical problems.
The ALJ made a detailed review of the medical evidence (Tr. 11-24); his conclusions meet the substantial evidence test and must stand.
B. Pain
Plaintiff's allegations of pain, like all matters of fact, are not to be accepted blindly and must be evaluated against the other evidence. Laffoon v. Califano, 558 F.2d 253 (5th Cir. 1977). The question whether the applicant is able to work despite some resulting pain is within the province of the administrative agency and is to be upheld if supported by substantial evidence. Newborn v. Harris, 602 F.2d 105 (5th Cir. 1979). The ALJ may properly challenge credibility of pain testimony. Allen v. Schweiker, 642 F.2d 799 (5th Cir. 1981). The plaintiff has not shown where in the record it is established by recognized diagnostic techniques that he suffers severe pain from a medically recognized impairment. See Aubeuf v. Schweiker, 649 F.2d 107, 112 (2d Cir. 1981). He relies primarily on his own testimony of pain, and while this evidence must be considered, see Rodriguez v. Schweiker, 640 F.2d 682, 685 (5th Cir. 1981), it is not sufficient to establish a disability in light of the medical evidence to the contrary. See Aubeuf, supra. The medical evidence indicates that plaintiff was not in such severe pain that it would impair his capacity to perform basic work related functions. (Tr. 335, 360, 362-3). To the extent there was any conflicting evidence, the determination of credibility is to be made by the ALJ.[5]
C. Effect of Medication
The plaintiff's final objection to the ALJ's report is that ALJ Rothbloom did not accept the plaintiff's testimony that the prescribed medication, Vistaril, which the plaintiff took for his nervousness, produced drowsiness (Tr. 117). The plaintiff only began taking Vistaril in May, 1980, less than four months before the hearing before ALJ Rothbloom. Thus, the available evidence on the plaintiff's reaction to Vistaril was more limited than the evidence on some of the plaintiff's longer standing complaints. The ALJ explained the basis for his conclusion as follows:
At the hearing when the claimant was asked by the Administrative Law Judge why he could not work, he did not allude to any side effects from his "nerve" medication. And, in describing his daily activities he did not indicate that his medication interfered with his daily functioning. Subsequently, however, he stated that the "nerve" medicine which he takes three times a day causes him to become drowsy in about 15 minutes and then he sleeps for 30 minutes to one hour. Nowhere in the claimant's medical records is there any indication that the claimant's medication is causing the condition described by the claimant. The claimant produced a medication bottle which indicated that it contained Vistaril. A warning notice on the bottle contained the *352 usual advice against operating automotive equipment or "dangerous machinery." In June and July 1980 the claimant reported that he was "doing well" on Vistaril.
(Tr. 22).
The ALJ made a credibility judgment that he did not believe the plaintiff's testimony that Vistaril was producing pronounced drowsiness. The only scientific evidence presented by the plaintiff was the pharmacist's warning that Vistaril might cause drowsiness. The ALJ's decision did not amount to a medical conclusion that Vistaril could not cause drowsiness. It simply resolved conflicting evidence and inferences, a task within the ALJ's province. The burden was on the plaintiff. The court cannot reverse the ALJ's determination simply because it is possible to draw logical inferences that support a contrary conclusion.[6]
If the plaintiff reapplies for SSI benefits at a future date, there is certainly room for him to develop the record as to Vistaril's effects. In developing the record the plaintiff may introduce medical or scientific evidence beyond that of a conditional prescription warning. Further, the plaintiff might call his brother or nephew to corroborate his testimony about falling asleep. However, it is not the court's role at this juncture to question the plaintiff's decision not to develop the record in a particular way, especially where the plaintiff was represented by an attorney. Based on the record, the ALJ's determination had a rational, articulated basis and meets the substantial evidence test.
The plaintiff's objections to the opinion of Dr. Hecker, the vocational rehabilitation expert, are without merit. The ALJ's hypothetical, which reflected conclusions based on substantial evidence, assumed that the plaintiff's residual functional capacity permitted sustained work, despite his combination of impairments. (Tr. 142, 147-157).
V. CONCLUSION
The case is remanded solely for a determination of the res judicata effects of the 1975 decision on the plaintiff's Title II claims. If the ALJ does not grant a petition to reopen the 1975 hearing decision, the case is concluded. If a petition to reopen is granted, or the 1975 decision is somehow found to be nonbinding, this court will consider whether there was substantial evidence to deny the plaintiff's Title II claims.
NOTES
[1] In fact, the plaintiff had three hearings, but one, before ALJ Knox, is a nullity because of a tape recording failure and the consequent lack of a transcript.
[2] It is possible to abandon a claim before requesting a hearing under 42 U.S.C.A. 405(b) (West Supp. 1981). If administrative appeals are not exhausted there can be no judicial review even though there is a final decision. 42 U.S.C.A. 405(g) (West 1974 & Supp.1981).
[3] Of course, res judicata in the administrative process is not encrusted with the rigid finality that characterizes the precept in judicial proceedings. Grose v. Cohen, 406 F.2d 823, 824 (4th Cir. 1969). There will be occasions when courts can and should decide a petition to reopen, for example, if the petition is filed within twelve months of the original decision. Ordinarily, however, courts should not undertake to adjudicate a petition to reopen, or allow claimants a second review of their case, when Congress did not intend to make these tasks part of the courts' responsibilities under the Act.
[4] See note 1, supra.
[5] In making his determination an ALJ can rely on impressions derived from a claimant's testimony and demeanor. Good v. Weinberger, 389 F.Supp. 350, 356 (W.D.Pa.1975). An ALJ's conclusion, however, must be rationally related to his observations. See Vitek v. Finch, 438 F.2d 1157 (4th Cir. 1971). An ALJ may not make medical conclusions he is not qualified to make, or discredit a claimant's credibility because of the claimant's failure to exhibit what the ALJ considered observable manifestations usually expected from those in severe pain. Based on this standard, the ALJ's observation of the plaintiff's manifestations of pain at his hearing is of little, if any, probative value. The hearing process should not be structured to encourage claimants to a display of histonics. See Aubeuf v. Schweiker, 649 F.2d 107, 113 & n.7 (2d Cir. 1981). The court's finding that the ALJ's conclusion is supported by substantial evidence is based solely on a review of the medical evidence.
[6] The ALJ's statement that the plaintiff did not appear drowsy at the hearing (Tr. 14, 25) has no probative value since the plaintiff did not take Vistaril the day of the hearing (Tr. 14). Once again the court must point out that an ALJ should not undertake to make adverse conclusions about a claimant's medical condition based on his observations of the claimant's behavior at the hearing. See note 5, supra. In this instance, despite the unnecessary reference to the plaintiff's non-drowsy behavior at the hearing, the ALJ's determination was rationally related to other observations and evidence, such as the absence of any complaints of drowsiness by the claimant to his doctors. In any event, the plaintiffs medical evidence was not sufficient to carry his burden.
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Case: 14-40925 Document: 00512999820 Page: 1 Date Filed: 04/09/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 14-40925 April 9, 2015
Summary Calendar
Lyle W. Cayce
Clerk
JIMMY LEE SHARBUTT,
Petitioner-Appellant
v.
N. VASQUEZ, Warden,
Respondent-Appellee
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 1:13-CV-514
Before SMITH, WIENER, and ELROD, Circuit Judges.
PER CURIAM: *
Petitioner-Appellant Jimmy Lee Sharbutt, federal prisoner # 09112-062,
appeals the district court’s denial and dismissal of his 28 U.S.C. § 2241 petition
for habeas corpus relief. Sharbutt challenged the enhancement to his sentence
pursuant to the Armed Career Criminal Act, following his conviction of being
a felon in possession of a firearm. The district court denied relief, concluding
that such allegations should be presented in a 28 U.S.C. § 2255 motion and
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 14-40925 Document: 00512999820 Page: 2 Date Filed: 04/09/2015
No. 14-40925
that Sharbutt had not established that he was entitled to proceed under the
savings clause of § 2255(e), which allows a federal prisoner to challenge his
conviction under § 2241 if the remedies provided under § 2255 are “inadequate
or ineffective to test the legality of his detention.”
A petitioner seeking to establish that his § 2255 remedy was inadequate
or ineffective must make a claim (i) “based on a retroactively applicable
Supreme Court decision which establishes that the petitioner may have been
convicted of a nonexistent offense” and that (ii) “was foreclosed by circuit law
at the time when the claim should have been raised in the petitioner’s trial,
appeal, or first § 2255 motion.” Reyes-Requena v. United States, 243 F.3d 893,
904 (5th Cir. 2001).
Because Sharbutt essentially claims that he is innocent of his sentence
under the Armed Career Criminal Act, rather than his offense of conviction,
he has failed to make the showing required by Reyes-Requena. Sharbutt’s
contention that Persaud v. United States, 134 S. Ct. 1023 (2014), stands for the
proposition that sentencing enhancements based on ineligible prior convictions
are errors amenable to § 2241 relief is unavailing as Persaud is not a
substantive decision.
The decision of the district court is AFFIRMED.
2
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203 F.3d 519 (7th Cir. 2000)
THOMAS KELLY and JONATHAN PRISK, Plaintiffs-Appellants,v.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Defendant-Appellee.
No. 99-2496
In the United States Court of Appeals For the Seventh Circuit
Argued January 7, 2000Decided February 10, 2000
Appeal from the United States District Court for the Western District of Wisconsin. No. 98 C 655-S--John C. Shabaz, Chief Judge.
Before POSNER, Chief Judge, and ROVNER and EVANS, Circuit Judges.
EVANS, Circuit Judge.
1
A man's home may be his castle, but our society has come to realize that just how an individual property owner uses shared resources such as water, air, and soil affects the rest of the community. Several laws protecting these resources have been enacted, and one of them, the Clean Water Act, is designed to protect this country's dwindling wetlands, a vital part of the ecosystem that purifies the water, helps control flooding, produces food, and provides habitat for birds, fish, animals, and plants. The appellants attempt to trivialize this natural resource and the law that safeguardsit, but they offer no coherent rationale why they should get out from under a small sanction imposed upon them for violating the Clean Water Act.
2
Thomas Kelly owns property adjacent to Lake Koshkonong in Jefferson County, Wisconsin. Lake Koshkonong is part of the Rock River, which eventually empties into the Mississippi River. Kelly's property includes a 3.5-acre "swale," or low-lying marsh. The marshy area performs several ecological functions: absorbing nutrients and purifying the water; allowing a variety of trees and plants to grow; and providing food and shelter for herons, kingfishers, muskrats, pheasants, rabbits, squirrels, red foxes, snipes, ducks, geese and their goslings.
3
Kelly, though, was more interested in making a buck than saving a duck. He bought the property with the aim of turning it into a subdivision. He built a road, extended utilities, cut down trees, cleaned up garbage, obtained a permit from the county to riprap the shoreline and fill in part of the property, and began filling in the swale. Dale Pfeiffle of the Army Corps of Engineers visited the property in August 1990, observed fill in about 30 percent of the swale, and took note of the land's wetland characteristics. Pfeiffle told Kelly that, in addition to the county permit, he needed a federal permit to discharge fill material into the swale. Later, an application for a permit was mailed to Kelly. Kelly consulted an attorney, who told him he didn't need permission from the feds to continue his development of the land. This was bad advice. Kelly continued filling in the swale without bothering to get a permit. By the time Pfeiffle returned to the property in September 1990, almost 90 percent of the swale contained fill material. Finding that Kelly violated the Clean Water Act by filling in a wetland without a permit, the EPA ordered him to remove the fill and restore the swale to its prior condition. No fine was ordered, and Kelly complied. A friend of his, Jonathan Prisk, did some of the restoration work.
4
Flooding in the summer of 1993 left brush and root stumps on Kelly's land. He burned what he could and decided to bury the rest. He hired Prisk to dig pits in the swale, bury the debris, and level things off. Prisk asked if a permit was required and suggested burying the debris upland away from the swale, but Kelly told him, in effect, "Don't worry; be happy." This, too, was bad advice. On January 28 and February 1, 1994, Prisk used a backhoe to dig eight pits in the swale, deposit brush, and then cover the pits. William Meyer of the Army Corps of Engineers visited the property on February 1 and saw what Prisk was doing. Meyer and the EPA's Gregory Carlson visited the property again a few days later and observed eight covered pits, large ruts in the soil resembling tire tracks, and clots of earth bereft of vegetation. Carlson estimated that the fill activities had disturbed two of the swale's 3.5 acres and that 800 cubic yards of fill had been dumped in the swale.
5
The EPA sought a $6,000 administrative penalty against Prisk and a $4,000 administrative penalty against Kelly for violating the Clean Water Act by filling in a wetland. An administrative hearing was held in 1996 at which Pfeiffle, Meyer, Carlson, Kelly, and a local sportsman named Richard Persson testified. (Prisk did not attend but was represented by his lawyer, who also was representing Kelly.) In August 1998 David A. Ullrich, EPA's acting regional administrator at the time, assessed the requested $4,000 penalty against Kelly and lowered Prisk's penalty to $3,000 because he was viewed as the least culpable of the two. Kelly and Prisk appealed to the district court, but the EPA's decision was upheld.
6
We review de novo a district court's decision to affirm the decision of the EPA's regional administrator. See Mahler v. U.S. Forest Service, 128 F.3d 578, 582 (7th Cir. 1997). No court will set aside civil penalties assessed by an agency "unless there is not substantial evidence in the record, taken as a whole, to supportthe finding of a violation." 33 U.S.C. sec. 1319(g)(8). Evidence is substantial if a reasonable mind might accept it as adequate to support a conclusion. Hoffman Homes, Inc. v. EPA, 999 F.2d 256, 261 (7th Cir. 1993).
7
Congress enacted the Clean Water Act "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. sec. 1251(a). The Act prohibits discharging pollutants into navigable waters without a permit from the Army Corps of Engineers. 33 U.S.C. sec.sec. 1311(a), 1344, 1362(6), (7) and (12). Pollutants include dredged spoil, biological materials, rock, and sand. 33 U.S.C. sec. 1362(6). Navigable waters include wetlands, 33 C.F.R. sec. 328 (see also United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 132-35 (1985); Solid Waste Agency of N. Cook Co. v. U.S. Army Corps of Eng'rs, 191 F.3d 845, 851 (7th Cir. 1999); Village of Oconomowoc Lake v. Dayton Hudson Corp., 24 F.3d 962, 964 (7th Cir. 1994)), which are "those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions." 33 C.F.R. sec. 328.3(b).
8
Kelly and Prisk argue that because they did not knowingly violate the law they did not violate the law. This argument fails for at least three reasons.
9
First, although Kelly and Prisk's brief makes scattered references to not knowingly violating the statute, it fails to explain their argument that knowledge is required for a violation. Undeveloped arguments are waived. See JTC Petroleum Co. v. Piasa Motor Fuels, Inc., 190 F.3d 775, 780-81 (7th Cir. 1999); United States v. Watson, 189 F.3d 496, 500 (7th Cir. 1999).
10
Second, nothing in the statute makes good faith or a lack of knowledge a defense. Negligence or knowledge is expressly required to trigger the statute's criminal penalties, 33 U.S.C. sec. 1319(c), but no such requirement exists for civil or administrative penalties, 33 U.S.C. sec. 1319(d) and (g). Civil liability under the Clean Water Act, therefore, is strict. See United States v. Winchester Mun. Util., 944 F.2d 301, 304 & n.1 (6th Cir. 1991); United States v. Texas Pipe Line Co., 611 F.2d 345, 347 (10th Cir. 1979); United States v. Earth Sciences, Inc., 599 F.2d 368, 374 (10th Cir. 1979); Minnehaha Creek Watershed Dist. v. Hoffman, 597 F.2d 617, 627 (8th Cir. 1979).
11
Third, even if knowledge was required for a violation, the run-in with the feds in 1990 made Kelly (who was ordered to undo the damage) and Prisk (who did some of the actual work of undoing the damage) aware that putting material in the swale was a no-no. Their sob story about being ignorant of the federal regulations might have been credible the first time, but they obviously chose with, at best, their eyes wide shut, to disregard the law the second time around.
12
Kelly and Prisk also suggest that they did not violate the law because stuffing dead vegetation in the swale caused no environmental harm. Again, there is evidence that their actions caused some damage. But, again, they miss the larger point: The Clean Water Act does not forbid all filling of wetlands--it forbids the filling of wetlands without a permit. "The permit process is the cornerstone of the . . . scheme for cleaning up the nation's waters." United States v. Huebner, 752 F.2d 1235, 1239 (7th Cir. 1985) (internal quotations omitted). The purpose of requiring federal approval beforehand is to prevent or minimize aquatic damage. Kelly's actions might well have received federal approval. (In fiscal year 1994, for example, less than 1 percent of permit applications were denied. See U.S. Environmental Protection Agency, Facts about Wetlands, (revised May 25, 1999),<http:// www.epa.gov/owow/wetlands/fact/facts5.html>.) The problem is that Kelly never allowed the process to work. Driving a car without a license is not necessarily dangerous, but it is illegal. Likewise, digging eight pits in a marsh might not cause massive environmental trauma, but doing so without a permit violates the Clean Water Act.
13
There is substantial evidence in the record that the fill placed in the swale was a pollutant, that the swale was a wetland, that Kelly and Prisk did not have a permit, and therefore that the two men violated the Clean Water Act.
14
Kelly and Prisk also contend that the amount of the civil assessments were too high and retaliatory. But we will not set aside civil penalties assessed by the Agency unless they constitute an abuse of discretion. 33 U.S.C. sec. 1319(g)(8). An abuse of discretion by an agency involves a decision made without a rational explanation, a decision that departs from established policies, or a decision that rests on an impermissible basis. See Osuch v. INS, 970 F.2d 394, 396 (7th Cir. 1992).
15
Factors that influence the amount of the penalty include the nature of the violation, circumstances of the violation, extent of the violation, gravity of the violation, the violator's ability to pay, any prior history of such violations, the degree of culpability, economic benefits resulting from the violation, and such other matters as justice may require. 33 U.S.C. sec. 1319(g)(3). The EPA took these considerations into account, noting that protecting wetlands is important, that violating the Clean Water Act is serious, that Kelly and Prisk knew about the law because of the 1990 incident, and that Kelly was more culpable than Prisk because he owned the land and directed the violations. The EPA also said deterrence was appropriate in this case because 100 of Kelly's neighbors had signed a petition saying they supported what he had done. Civil penalties under the Clean Water Act are intended to punish culpable individuals and deter future violations, not just to extract compensation or restore the status quo. Tull v. United States, 481 U.S. 412, 422-23 (1987).
16
Kelly and Prisk suggest that the fines were out of proportion to the environmental damage caused. They are wrong, for the fines actually were quite modest. The EPA could have sought civil penalties up to $25,000 per day of violation. 33 U.S.C. sec. 1319(d). Instead, the EPA chose to assess administrative penalties, where the maximum fine was $10,000 each. 33 U.S.C. sec. 1319(g)(2)(A). The $4,000 civil assessment against Kelly and the $3,000 assessment against Prisk were well within the statute's monetary range.
17
Kelly and Prisk complain that the lack of discovery allowed in these proceedings precluded them from showing that the EPA was retaliating against them. But there is no constitutional right to pretrial discovery in administrative proceedings. Silverman v. Commodity Futures Trading Comm'n, 549 F.2d 28 (7th Cir. 1977). The Administrative Procedure Act contains no provision for pretrial discovery in the administrative process and the Federal Rules of Civil Procedure do not apply to administrative proceedings. Id. However, Kelly and Prisk could have investigated the government's motives by cross-examining witnesses during the administrative hearing, by requesting government documents under the Freedom of Information Act, or by filing suit against the government.
18
What Kelly and Prisk hoped to uncover is a mystery, though, because their accusations of retaliation make no sense. They say there is something sinister about the fact that the EPA's enforcement actions did not begin until September 1994, shortly after Kelly called the Army Corps of Engineers about getting a permit and 7 months after the violations occurred. Kelly could be fined for what he did in February regardless of whether he got a permit in September. Seeking modest fines against individuals who twice defied the law sounds to us not like retaliation, but like an agency that was--if anything, cautiously- -carrying out its responsibilities.
19
Kelly and Prisk's last-gasp argument is that the $7,000 in fines violated the "excessive fines" clause of the Eighth Amendment. But we can't say the fine is grossly disproportionate to the gravity of the offense when Congress has made a judgment about the appropriate punishment. See United States v. Bajakajian, 118 S. Ct. 2028, 2037-38 (1998). The inherently imprecise decision to fine Kelly and Prisk a total of $7,000 was not grossly disproportionate to the violation of an important environmental safeguard that could have drawn a total fine of $100,000 ($25,000 civil penalty multiplied by 2 days multiplied by 2 offenders).
20
Disliking a law may be the basis for a letter to the editor, but it does not give one a license to break the law nor does it create grounds for an appeal. Kelly and Prisk might have argued that the stumps and other rotting vegetation they were burying in the wetland do not qualify as pollutants. They might have argued that the land was not a wetland in the first place. They might have argued that finalizing the fine 4 years after the violation was too late. They might have argued that the agencies' expansive definition of "waters of the United States" that are subject to regulation is too broad. See United States v. Wilson, 133 F.3d 251 (4th Cir. 1997). They might have argued that the vegetation was somehow incidental fallback from material they were trying to remove from the area and thus not subject to the regulation. See National Mining Ass'n v. U.S. Army Corps of Eng'rs, 145 F.3d 1399, 1405 (D.C. Cir. 1998). We do not mean to suggest that any of these arguments would have been successful, but they surely would have stood a better chance than the approach Kelly and Prisk took on appeal. Their brief cited only three cases and blithely declined to repeat issues it claimed were contained in the record. Their argument is essentially nothing more than a diatribe against federal power under the Clean Water Act. It has been unpersuasive. The judgment of the district court upholding the penalties assessed by the EPA is
21
AFFIRMED.
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548 F.Supp. 1349 (1982)
Wanda P. CHOCALLO
v.
BUREAU OF HEARINGS AND APPEALS, SSA, et al.
Civ. A. No. 77-2310.
United States District Court, E.D. Pennsylvania.
October 8, 1982.
*1350 *1351 *1352 *1353 *1354 Wanda P. Chocallo, pro se.
Peter Vaira, Jr., U.S. Atty., Alexander Ewing, Jr., Asst. U.S. Atty., Philadelphia, Pa., Brook Hedge, Judith S. Scolnick and Stanley E. Alderson, Dept. of Justice, Washington, D.C., for defendants.
MEMORANDUM AND ORDER
GILES, District Judge.
INTRODUCTION
This is an action by a former Administrative Law Judge ("ALJ") Wanda P. Chocallo ("Chocallo"), which, in the main, challenges on constitutional and statutory grounds certain federal agency actions which she claims prevented her from discharging her duties as an ALJ, interfered with her judicial independence and integrity and disqualified her from hearing certain social security cases assigned to her.
Chocallo sues all named defendants, private and governmental, as members of a conspiracy allegedly cognizable under 42 U.S.C. § 1985. She also asserts violations of the Fifth Amendment, the Privacy Act of 1974, 5 U.S.C. § 552a(g)(1), et. seq. and the Administrative Procedure Act, 5 U.S.C. § 551 et seq. Jurisdiction is properly asserted under 28 U.S.C. §§ 1331 and 1343 (1976).
Each defendant has moved either to dismiss the complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6), or alternatively, for summary judgment under Fed. R.Civ.P. 56. For the reasons which follow, the motions shall be granted and judgment shall be entered in favor of all defendants and against plaintiff.
I. BACKGROUND
When bringing this action in July of 1977, plaintiff held the position of temporary ALJ assigned to the Bureau of Hearings and Appeals of the Social Security Administration, Department of Health, Education and Welfare ("DHEW"). In this capacity, she heard claimants' appeals from initial adverse determinations of social security insurance benefit eligibility, and rendered decisions. Her ALJ decisions were reviewable on the merits by the Appeals Council of the Social Security Administration. If affirmed at that level, the ALJ's opinion became the final decision of the Secretary of the Department.
Based on allegations of conduct unbecoming her office, arising largely from the incidents underlying the complaint in this court, Chocallo was subsequently removed from her temporary position as ALJ. The decision to remove her was made by the Merits Protection Board and affirmed by the United States District Court for the District of Columbia in Chocallo v. Prokof, No. 80-1053, (D.D.C., October 10, 1980). The incidents giving rise to Chocallo's complaint basically cover a one and one half year period between December, 1975 through June, 1977, and are best described as four separate series of events.
A. The Pearl Taylor Case
Commencement of this action coincided with plaintiff's refusal to cooperate in the reassignment to another ALJ of the social security claim file of one Pearl Taylor, a claimant who sought disability status by reason of a mental condition. At all times material to this proceeding Taylor was represented by defendant Community Legal Services, Inc. ("CLS") through its employee Jonathan Stein, Esquire, and Edwin Montes, a paralegal to Stein. Prior to a February, 1977 hearing before plaintiff on the Taylor claim, Stein had filed a request with plaintiff, supported by affidavits, asking that she recuse herself as the ALJ in the matter because of alleged bias against all social security claimants who had mental problems and who were represented by CLS. The recusal motion also alleged general bias and prejudice against CLS representatives. Plaintiff refused to recuse herself at the February 15, 1977 hearing. At that time, plaintiff also interrogated the claimant over the objections of counsel, about various aspects of her attorney/client relationship, as well as claimant's involvement in the recusal motion, out of the presence of her attorney (Complaint, Exh. D. p. *1355 9), (Complaint ¶¶ 13, 14, 15). Chocallo terminated the hearing without decision because of Stein's vigorous objections to plaintiff's actions.
Following the hearing, Stein filed a written complaint to the Appeals Council, demanding reassignment of the case for bias demonstrated at the hearing and inviting its review of the hearing transcript. (Complaint, ¶ 15, Brown Affidavit, ¶ 8). Defendant, Philip T. Brown, Chief Administrative Law Judge, received Stein's letter complaint dated February 15, 1977. He addressed an internal communication to Chocallo on March 10, 1977 advising her of his concern over the possibility that claimants were becoming victims of an obviously poor relationship between CLS and plaintiff. (Brown Affidavit ¶ 8). Speaking on behalf of the Appeals Council, Brown stated that no action would be taken until it had reviewed the transcript and tape recording of the February 1977 hearing. (Complaint, ¶ 17). On March 15, 1977, Chocallo wrote to claimant Taylor, ex parte, informing her that on February 17, 1977 an attempt had been made by "the Administrative Officer of this Office" to secure Taylor's files. (Complaint ¶ 16, Exhibit B).
On May 10, 1977, before the Appeals Council could act, Chocallo entered a decision and order barring both Stein and Montes from further participation in the proceedings on behalf of Taylor. (Complaint, ¶ 18, Exhibit D). In the opinion, plaintiff expressed the belief that Stein had breached his professional responsibility to the claimant by failing to disclose the recusal motion to his client.[1] Chocallo's opinion incorporated a newspaper article critical of CLS, and particularly Stein, on a subject totally unrelated to either the claimant, the merits of claim or the field of social security benefits. Id. Prior to rendering her decision, she had mailed a copy of the same newspaper article, ex parte, to Taylor. (Brown Affidavit, ¶ 9). Plaintiff's barring order required claimant to obtain substitute counsel within 30 days.
The order was issued without notice or a hearing, in the face of a statutory provision and implementing regulations which require prior notice and a hearing before a duly designated or appointed representative can be dismissed from practicing before the Social Security Administration. 42 U.S.C. § 1383(d)(2); 20 C.F.R. §§ 416.1503, 416.1540-.1565. The barring order came to the attention of the Chief Administrative Law Judge Brown, who determined that it was contrary to law. (Brown Affidavit, ¶ 11). On his motion, the Appeals Council issued an order dated June 9, 1977 removing the Taylor case to the Council pursuant to 20 C.F.R. § 416.1459. The case was then remanded to the Regional Chief Administrative Law Judge for reassignment to another ALJ.
A copy of the Appeals Council order was served on plaintiff on June 10, 1977 by defendant Sol Gitman, Assistant Regional Chief Judge. Defendant James C. Lightfoot, Administrative Law Judge in charge of the Philadelphia Office of the Bureau of Hearings and Appeals, and defendant John Ennis, another ALJ, were also present. Gitman made an oral demand upon plaintiff to return the file but she responded that she did not have it in her office and even if she did, she would not surrender it to him (Gitman Affidavit, ¶ 15). Later, a written demand was made on the same day, to which plaintiff made no response. (Gitman Affidavit, ¶ 16). Her refusal was then reported to Chief ALJ Brown.
Plaintiff ignored the statutory and regulatory authority for the case reassignment action, contending that it was violative of her rights as a presiding judge and as protector of the interests of the claimant Taylor and the public. (Complaint, ¶¶ 26, 27, 28). Following receipt of the Appeals Council Order, plaintiff contacted Taylor by telephone. The claimant had already been informed of the removal action and was under directive to obtain another representative. *1356 During the telephone conversation, Taylor told Chocallo that she did not want another ALJ. Plaintiff retained control of the file and scheduled a further hearing on June 13, 1977. Pursuant to a June 9, 1977 order issued by Chocallo, claimant appeared without her CLS representatives. They had advised her not to appear since the case had been taken from Chocallo and was being reassigned. Taylor appeared with her sister and minister. One of plaintiff's allegations is that CLS failed or refused to represent claimant at this unauthorized hearing. (Complaint ¶¶ 19-24).
On June 21, 1977, defendants Jack H. Roseman and John W. Ennis, both ALJ's, and defendant Claire R. Kuriger, entered Chocallo's locked office in her absence and made a visual inspection for purposes of locating and obtaining the Taylor files. They were unsuccessful. Chocallo retained the files and proceeded to "decide" the claimant's case in her favor, thus mooting a mandamus suit filed in this court by the government to compel her to return the files. (United States of America v. Wanda P. Chocallo, No. 77-2437, dismissed as moot). In keeping with the routine practice of relinquishing files in decided cases, she turned the Taylor file over after making the decision. See United States of America v. Wanda P. Chocallo, E.D.Pa., Civil Action No. 77-2437.
These actions were the primary basis for initiation by the agency of removal charges against plaintiff on June 20, 1977 (Trachtenberg Affidavit ¶ 7).
B. The Coleman Case
Plaintiff's second group of allegations arise out of the December, 1975 social security disability hearing of defendant John C. Coleman, a 74 year old blind man whose case was assigned to Chocallo. Chocallo failed to appear at the Coleman hearing allegedly due to illness. His counsel, defendant Linda Bernstein, Esquire, wrote to Chocallo expressing her concern at Chocallo's non-appearance, particularly in light of the resulting inconvenience to Coleman. At the next scheduled hearing, Chocallo accused Coleman of dishonesty and Bernstein of unethical and unprofessional conduct. On December 31, 1975, Bernstein complained in writing to the Chief ALJ of what she regarded as vituperative conduct by Chocallo. As a result of these complaints, Chocallo was counselled by Lightfoot, in his capacity as Regional Chief ALJ, to avoid such confrontations with counsel, which might result in claims of partiality. Lightfoot suggested that plaintiff consider voluntarily recusing herself from the Coleman case. Plaintiff refused to withdraw. The Coleman case was not reassigned, despite the complaints from Bernstein, on the stated presumption that plaintiff could conduct a fair, impartial hearing and render a just decision. (Complaint, ¶¶ 33 A-Q, X-2).
In late January, May, and July, of 1976, Chocallo attempted to schedule supplementary hearings in the Coleman matter. Neither Bernstein nor Coleman appeared, believing that the matter had been concluded on the merits at the December, 1976 hearing.[2]
In September, 1976 nearly nine months after the hearing on the merits, Coleman's attorney Bernstein complained in writing to Chief ALJ Brown about what she considered an inordinate delay in the issuance of a decision. (Brown Affidavit, ¶ 5). Brown gave plaintiff a copy of the Bernstein letter and asked her when the decision would be rendered, advising her that if a date were not given, the Appeals Council would have to review the case and make a decision. Plaintiff promised a decision by the first week in October, 1976. As of November 1, 1976, no decision had been made and Brown requested the Appeals *1357 Council to remove and consider the case because of the delay. On November 2, 1976, the Appeals Council informed Brown that a decision adverse to Coleman had been rendered on October 29, 1976. On June 15, 1977, the Appeals Council reversed and remanded because of demonstrated hostility against the claimant and attorney through the hearing process and the decision itself. The case was then reassigned to another ALJ for decision.
In September, 1977, ostensibly acting as a self-appointed private attorney general endeavoring to attack the validity of the Appeals Council's order of June 15, 1977, Chocallo filed a first amended complaint in this court to add as defendants the Secretary of DHEW and the claimant Coleman.
C. Denial of Promotion and Lack of Productivity
On February 29, 1976, Chocallo communicated with David Matthews of DHEW requesting a full investigation into defendants' conduct in the Coleman case. By letter dated April 9, 1976, defendant Robert L. Trachtenberg, Director of the Bureau of Hearings and Appeals, advised Chocallo that he planned to recommend instituting an adverse action against her, and that he felt it improper to reply to her letter which had been referred to him by Matthews. Because of the contemplated adverse action, Trachtenberg decided to withhold Chocallo's promotion which would ordinarily have been effective by operation of law on April 11, 1976. (Trachtenberg Affidavit, ¶ 4). On May 25, 1976, Chocallo reported Trachtenberg's actions to the Civil Service Commission which ultimately directed Trachtenberg to initiate retroactive corrective action. The action was taken and Chocallo received a retroactive promotion and backpay. Subsequently, on April 29, 1977, Chocallo was informed by Brown that her production was unacceptably low, and was instructed to increase her output within sixty days. Apparently, the "productivity" issue had been raised previously in January, 1976 by Gitman due to a "multitude of complaints" which were filed by persons who had appeared before Chocallo and who complained of delayed decisions. (Gitman Affidavit, ¶ 10, 11). Ultimately, on May 31, 1977, Gitman addressed a letter to Chocallo requesting her to inform him on a weekly basis of the number of case dispositions. (Complaint ¶ 37). Chocallo asserts that if her productivity was low, it was because she was denied an adequate support staff. (Complaint, ¶ 34).
D. Denial of Access to Personnel File
Finally, plaintiff alleges that her rights under the Privacy Act were violated by defendants Trachtenberg, Gitman and Lightfoot who delayed and/or refused to furnish her copies of all records and data concerning her which were in the Bureau's possession. Further, she claims that her Privacy Act rights were violated since defendants collected irrelevant and damaging information, in particular, complaints filed by attorneys and claimants concerning her performance which were disseminated without her knowledge. Based on the above events, plaintiff sues the following group of defendants.
II. THE COMMUNITY LEGAL SERVICES ("CLS") DEFENDANTS
Chocallo claims that various attorneys affiliated with CLS, who represented claimants appearing before her, conspired with the federal defendants to violate her constitutional and statutory rights. The CLS defendants include Linda Bernstein, Esquire, Marjorie Janoski, Esquire, Bartholomew Poindexter, Esquire, Richard Weishaupt, Esquire, and Deborah Kooperman, Eileen Wood and Marilyn Davis Weiler, CLS paralegals.[3] It is unclear what constitutional *1358 rights were allegedly violated by the CLS defendants. Chocallo appears to claim that she had a constitutional right to be an "independent judge," to continue to hold office (Complaint ¶ 40, 48), and not to be "unlawfully deprived of her liberty to use the powers of her mind, judgment and experience..." (Complaint ¶ 48). In addition, Chocallo claims that the public's rights and the rights of claimants in Social Security appeals were violated. (Complaint, ¶ 41, 43). Based on these allegations, the CLS defendants have moved to dismiss the complaint for failure to state a claim upon which relief can be granted under Fed.R. Civ.P. 12(b)(6). Even accepting all of the well-pleaded facts in plaintiff's complaint as true, I find that the CLS defendants' motion must be granted. Chocallo claims relief under all three sections of 42 U.S.C. § 1985 (1976).[4]
I address these claims in reverse order.
A. 42 U.S.C. § 1985(3)
To state a cause of action under § 1985(3), the plaintiff must show (1) that a federally secured right has been invaded by the defendants, (2) that the defendants conspired to deprive the plaintiff of her rights, and (3) that the defendants' actions were motivated by a "class-based, invidiously discriminatory animus...." Griffin v. Breckenridge, 403 U.S. 88, 102, 91 S.Ct. 1790, 1798, 29 L.Ed.2d 338 (1971). Waits v. McGowan, 516 F.2d 203, 208-09 (3d Cir. 1975); See also Robinson v. McCorkle, 462 F.2d 111, 113 (3d Cir.), cert. denied, 409 U.S. 1042, 93 S.Ct. 529, 34 L.Ed.2d 492 (1972); Local No. 1 (ACA) v. I.B.T., C., W. & H., 419 F.Supp. 263, 275-77 (E.D.Pa.1976). "`Section [1985(3)] provides no substantive right itself; it merely provides a remedy for violation of rights it designates.'" Marino v. Bowers, 657 F.2d 1363, 1371 (3d Cir. 1981), (quoting Great American Federal Savings & Loan Ass'n v. Novotny, 442 U.S. 366, 372, 99 S.Ct. 2345, 2349, 60 L.Ed.2d 957 (1979).
With respect to the claim of constitutional violations, plaintiff alleges only that her rights to due process and equal protection under the Fifth Amendment *1359 were infringed by the actions of the CLS defendants. However, plaintiff alleges no facts that would establish that the CLS defendants violated these rights. Although she alleges that the CLS defendants were obstructive, rude and offensive, that they sought to disqualify her from sitting in certain cases, and that they failed to properly represent certain clients in cases before her, none of these allegations implicates plaintiff's constitutional rights. As a judge, she has no constitutional right to be free from criticism, disqualification, or even ridicule. Cf. In re Dellinger, 461 F.2d 389, 400 (7th Cir. 1972). (Attorneys given latitude as vigorous advocates and mere disrespect or insult not necessarily punishable as contempt.) Quite to the contrary, the actions complained of are themselves protected by the First and Sixth Amendments. The CLS defendants are entitled under the Constitution and federal law to criticize plaintiff as a judge and federal official. See, e.g., Wood v. Georgia, 370 U.S. 375, 388-91, 82 S.Ct. 1364, 1371-1373, 8 L.Ed.2d 569 (1962); In re Sawyer, 360 U.S. 622, 632-33, 79 S.Ct. 1376, 1381, 3 L.Ed.2d 1473 (1959); In re Oliver, 452 F.2d 111, 114-15 (7th Cir. 1971). See also Canon 7, ABA Code of Professional Responsibility.
Moreover, in particular cases, where the assigned judge may be biased, prejudiced, or predisposed as to the outcome, the attorney may have an obligation to file a motion for disqualification. Indeed, the regulations which control the hearing procedures involving administrative law judges specifically provide for disqualification of presiding officers. 20 C.F.R. § 416.1430. Plaintiff has no constitutional right to be exempted from this provision.
Finally, in the course of representing their clients, CLS attorneys are entitled to make a wide range of tactical and legal decisions, and only the client, and not a third party such as any administrative law judge, has standing to complain that these decisions and actions violate the constitutional rights of the client. See, e.g., O'Malley v. Brierley, 477 F.2d 785, 789 (3d Cir. 1973) (litigant may assert only his own constitutional rights or immunities).
The Supreme Court has repeatedly emphasized the importance of protecting the independence of attorneys and ensuring zealous advocacy on behalf of clients under our adversary system of justice. See, e.g., In re Sawyer, 360 U.S. 622, 635-36, 79 S.Ct. 1376, 1382-1383, 3 L.Ed.2d 1473 (1959). See also In re Dellinger, 461 F.2d at 400. These principles must be followed with special care with respect to legal service organizations where, because of funding and other considerations, there is a high risk of interference and control by the government or the courts. Fairly read, plaintiff's requests for relief, if granted, would seriously encroach upon the protected activities of the CLS defendants.
It is also clear that plaintiff's complaint fails to satisfy the requirement that defendants' actions be motivated by a class-based, discriminatory animus. Such allegations must allege discrimination against a well defined class, and discrimination that "(1) affects a traditionally disadvantaged group (e.g., `suspect' classification); (2) is irrational; or (3) unnecessarily burdens plaintiff's exercise of a `fundamental' right." Santiago v. City of Philadelphia, 435 F.Supp. 136, 156 (E.D.Pa.1977). Plaintiff fails to satisfy any of these standards.
Plaintiff does not allege discrimination based on race, sex, alienage, or any other suspect classification. Nor does she claim discrimination against administrative law judges as a class. Thus, she fails to state a claim under § 1985(3).
B. 42 U.S.C. § 1985(2)
The Third Circuit construes section 1985(2) as subdivided into two parts one part preceding and the other following the semi-colon. Brawer v. Horowitz, 535 F.2d 830, 840 (3d Cir. 1976). The second half of section 1985(2), proscribing obstructions of justice having as their object the denial of equal protection of the laws, Haefner v. County of Lancaster, 520 F.Supp. 131, 134 (E.D.Pa.1981), has been construed to require the same class-based, invidiously discriminatory animus as that which has been required *1360 under § 1985(3). Brawer, 535 F.2d at 840. Accordingly, for the reasons stated above, plaintiff's claim under this section must also be dismissed.
The first clause of subsection (2) is aimed at conspiracies to intimidate or pressure witnesses, parties and jurors in the performance of their duties in any court of the United States. Brawer, 535 F.2d at 840. This section does not provide judges or others involved in the judicial process, who are not specified in the statute, with any protection. Plaintiff, as a judge, does not have standing under this statute to raise the constitutional claims of litigants who appear before her. O'Malley v. Brierley, 477 F.2d at 789 (one cannot sue for deprivation of another's civil rights.)
C. Section 1985(1)
Section 1985(1) has not been definitively construed by the Third Circuit. However, in a carefully considered opinion, with which I am in agreement, the Seventh Circuit has construed it to consist of four component parts. Stern v. United States Gypsum, Inc., 547 F.2d 1329, 1336 (7th Cir.), cert. denied, 434 U.S. 975, 98 S.Ct. 533, 54 L.Ed.2d 467 (1977). Parts one and two proscribe conspiracies to prevent federal officers, by the use of "force, intimidation, or threat" from holding office or discharging their duties. Also proscribed are conspiracies to induce federal officers to leave a place where their duties must be performed. Stern, 547 F.2d at 1336. Here, plaintiff alleges no facts whatsoever to establish conduct by CLS defendants which rises to the level of force, intimidation or threats. The CLS defendants have, as outlined above, merely exercised their statutory and constitutional responsibilities as attorneys and paralegals. Thus, these portions of section 1985(1) are not implicated by the alleged conduct. Parts three and four, however, proscribe conduct which falls short of force, intimidation or threats. Conspiracies to injure a federal officer in his person or property on account of, or during the lawful discharge of his duties are not permitted. Also forbidden are conspiracies to injure his property in order to impede him in the discharge of his duties. Plaintiff presumably claims that the alleged conduct falls within these proscriptions. However, as in Stern, the gravamen of plaintiff's complaint against the CLS defendants is that they interferred with the discharge of plaintiff's duties by overzealous advocacy and by filing complaints with her supervisors about the manner in which she performed her duties. I find, as did the court in Stern, that section 1985(1) must be read narrowly so as not to implicate these constitutionally protected activities. In Stern, the court found that plaintiff, an IRS agent who had sued a corporation and its officers for filing complaints with plaintiff's superiors concerning the performance of duties during an audit, did not state a claim under § 1985(1). It found such activity to be protected by the First Amendment since "public criticism of governmental policy and those responsible for government operations is at the very core of the constitutionally protected free speech area," Stern, 547 F.2d at 1342, and "presenting complaints to responsible government officials about the conduct of their subordinates with whom the complainer has had official dealings is analogously central to the protections of the right to petition." Id. at 1342-43. The court found it irrelevant that the exercise of this right may cause professional injury to the official in question. Nor was it relevant that the complainant may be aware of, and desire, such injury to occur, at least when the complaints are lodged through the proper and established channels. Id. at 1343. Likewise, in this case, the CLS defendants have merely exercised their statutory and constitutional responsibilities as attorneys and paralegals, as outlined above. They have not, as a result, deprived plaintiff of any federally secured right under section 1985(1).
D. The Fifth Amendment
It appears that any authority for a direct cause of action under the Fifth Amendment derives from Bivens v. Six Unknown Agents, 403 U.S. 388, 91 S.Ct. 1999, *1361 29 L.Ed.2d 619 (1971). However, two fundamental requirements must be satisfied before a Bivens cause of action can be stated. First, the plaintiff must be deprived of a constitutionally protected right under the specific Amendment; second, the defendants' actions must have been taken under color of law. Bivens, 403 U.S. at 392-397, 91 S.Ct. at 2002-2005. As indicated, there is no showing that the CLS defendants did anything illegal to plaintiff. Consequently, they have deprived her of no constitutionally protected right and her claim directly under the Fifth Amendment must also fail.
III. DEFENDANT JOHN C. COLEMAN, SOCIAL SECURITY CLAIMANT
Plaintiff filed an amended complaint on August 15, 1977 (Docket Entry # 5) wherein John C. Coleman is named as a defendant. In that complaint, plaintiff protests an Order of the Appeals Council removing Coleman's case from her and reassigning it to another administrative law judge. Coleman moved to dismiss, asserting that the complaint fails to state a claim against him. I agree. A review of the amended complaint fails to disclose any allegation as to any actions taken by Coleman, acting independently of his attorney, that were directed against plaintiff. To the extent that Coleman is involved, it is only through his attorney against whom the action has been dismissed for failure to state a claim. Thus, the action against Coleman, the client, must be dismissed for the same reasons.
IV. DEFENDANT, JOSEPH CALIFANO, FORMER SECRETARY OF DHEW
In the same August 15, 1977 amended complaint, plaintiff sued the Secretary of DHEW complaining that the Appeals Council's removal and remand order in the Coleman case was contrary to the applicable provisions of the Administrative Procedure Act, and in violation of rights guaranteed under the Fifth Amendment. Although not stated, it is apparent that Califano was sued in his official capacity. Plaintiff requested this court to direct the Secretary to overrule the Appeals Council and to adopt, as his own, her decision denying Coleman benefits. Califano moved to dismiss plaintiff's complaint for failure to state a claim against him. I agree that dismissal is proper because plaintiff lacks standing to challenge the action taken by the Appeals Council. To have standing, plaintiff must demonstrate both that (1) "the challenged action has caused [her] injury in fact, economic or otherwise," and (2) that the interest sought to be protected is "arguably within the zone of interests to be protected by or regulated by the statute or constitutional guarantee in question." Association of Data Processing Service Organization, Inc. v. Camp, 397 U.S. 150, 152-53, 90 S.Ct. 827, 829-831, 25 L.Ed.2d 184 (1970). Plaintiff completely fails to establish either element.
Plaintiff cannot show that she was deprived of any legally protected interest by the Appeals Council Order of June 9, 1977, according Coleman a new hearing before another administrative law judge. As a presiding officer assigned to determine the eligibility of a claimant for supplemental social security benefits, the plaintiff had a statutory obligation to decide, without prejudice, the merits of the case before her. 5 U.S.C. § 556(a). Any partiality on the part of the presiding officer in a pending matter requires disqualification. Social Security Administration regulations, 20 C.F.R. § 416.1430 provide in pertinent part:
§ 416.1430 Disqualification of pending officer.
No presiding officer shall conduct a hearing in a case in which he is prejudiced or partial with respect to any party, or where he has any interest in the matter pending for decision before him.
(Emphasis added).
Plaintiff, therefore, could not properly have any interest in the claim before her. Consequently, as a matter of law, plaintiff has no interest in the outcome of Coleman's claim.
Even if she did have standing, plaintiff has no basis upon which to challenge the *1362 propriety of the Appeals Council's action in the Coleman case. Her complaint is that Califano, through the Appeals Council, lacked authority to vacate her decision in the Coleman case and remand it to another ALJ because (1) it is illegally constituted as a review body, and (2) it was not authorized by statute or regulation to remove the case from her or to reassign it to another ALJ. The former argument was raised in plaintiff's removal proceedings held before Judge McCarthy. After conducting a full evidentiary hearing, Judge McCarthy concluded that this argument was meritless.[5]
Judge McCarthy's findings were affirmed by the Merit System Protections Board (MSPB), In re Wanda Chocallo, MSPB Memorandum Opinion and Order dated March 20, 1980, which was in turn affirmed by the United States District Court. Chocallo v. Prokop, C.A. No. 80-1053 (D.D.C. October 10, 1980).
Collateral estoppel, thus, applies to bar plaintiff's relitigation of this issue. "Once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive on subsequent suits based on a different cause of action involving a party to the prior litigation." Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 973, 59 L.Ed.2d 210 (1979). In addition, the party to be precluded from relitigating the issue must have had a full and fair opportunity to contest the issue. Id. Collateral estoppel also applies to administrative proceedings where an administrative agency acts in a judicial capacity to resolve disputed issues of fact which the parties have had a full opportunity to litigate. United States v. Utah Construction & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966). Since a full evidentiary hearing was held before Judge McCarthy on the issue of whether the Appeals Council is a legally constituted review board, it is appropriate to apply collateral estoppel to this issue.[6]
Plaintiff's second argument that Califano, through the Appeals Council, was not authorized by statute or regulation to remove the Coleman case, is without merit. Under 20 C.F.R. 416.1461 a party to a hearing may request review by the Appeals Council of a decision issued by an ALJ. After review, the Appeals Council may affirm, modify, reverse or remand the case to a presiding officer. 20 C.F.R. § 416.1467-68. These regulations were strictly followed in Coleman's case. On November 19, 1977 he requested review, which was granted. The Council found that he had been denied a fair hearing and it accordingly vacated and remanded the case to another ALJ. Thus, the Council's order in the Coleman case was consistent with the applicable regulations.
For these reasons, plaintiff's complaint against former Secretary Califano must be dismissed.
V. FEDERAL DEFENDANTS, JOHN W. ENNIS, JACK ROSEMAN AND CLAIRE KURIGER
In a second amended complaint filed in September, 1977, plaintiff named as *1363 additional defendants ALJ's John W. Ennis and Jack Roseman, the Bureau of Hearing and Appeals, SSA, and Claire Kuriger, secretary to original defendant James C. Lightfoot, who was the ALJ in charge of the Philadelphia office through which plaintiff received her case assignments. These three defendants have been sued in both their official and individual capacities. Chocallo charges violations of her Fourth Amendment rights by virtue of their search of her office during her absence on June 21, 1977 to secure the Taylor files and tapes. All three defendants move to dismiss. In view of the affidavits submitted by both sides, the court shall treat defendants' motion to dismiss as a motion for summary judgment. Federal Rule of Civil Procedure 56(c) provides that summary judgment may be granted when there are no genuine issues of material fact and judgment as a matter of law is appropriate. Applying these standards to the undisputed facts as set forth below, I find that summary judgment must be granted in favor of defendants Kuriger, Ennis and Roseman.
Pursuant to the Appeals Council order of June 9, 1977, the Taylor matter was remanded to the Philadelphia Regional Office with direction to reassign the case to another ALJ. Acting on instructions from his superiors, the Assistant Regional Chief ALJ for Region III (Philadelphia), Sol Gitman, served on plaintiff copies of the order and made an oral demand for the Taylor file. (Gitman Affidavit, ¶ 15). Plaintiff does not deny that she told Gitman, and defendants Lightfoot and Ennis who were also present, that she did not have the file and that even if she did, she would not surrender it. (Id.; Plaintiff's Reply to Gitman's Affidavit, ¶ 15). Plaintiff admits that later on the same morning Gitman served her with a written memorandum directing her to surrender the Taylor file pursuant to the order of the Appeals Council and that she did not comply.
On June 21, 1977, eleven days later, the Taylor file still had not been turned over by plaintiff nor had its whereabouts been made known. In the absence of Lightfoot, who was then on vacation, Ennis was Acting Administrative Law Judge in charge of the Philadelphia office. On that day he had been instructed orally by Gitman to obtain the Taylor file from the locked office of plaintiff. (Ennis Affidavit, ¶ 5). Plaintiff had been out of the Philadelphia office since June 14, 1977, and her whereabouts were not known to Gitman. She remained absent through June 23, 1977. Acting on Gitman's directive, Ennis proceeded to plaintiff's office to obtain the file. He was accompanied by defendant Roseman, ALJ Morris Chernock, and defendant Kuriger. Also present outside the office was Nancy Parkinson, plaintiff's hearing assistant. (Ennis Affidavit, ¶ 6).
According to Ennis, he obtained the key to the office from Kuriger, the Regional Chief ALJ's secretary, who kept office keys, then unlocked and opened the door in the presence of the above named witnesses. Ennis gave Kuriger instructions to enter the office and to make a visual inspection of plaintiff's desk and table for the Taylor file, but not to open any drawers or file cabinets. While the witnesses remained outside the open door and observed, Kuriger entered and made a visual inspection. According to Ennis, she followed these directions to the letter, spending two or three minutes looking but not locating the file, and then exiting the office without touching, disturbing, or removing any item from the office. Ennis then closed and locked the door in the presence of the same witnesses.
Plaintiff alleges in her reply that her secretary Parkinson told her that her office was broken into while plaintiff was out of the office and that a new lockset had been installed. Plaintiff's Reply Affidavit, ¶ 6. The statement attributed to Parkinson is hearsay, inadmissible under any exception to that rule and must, therefore, be disregarded. Notably, there is no affidavit from Parkinson. Plaintiff's assertion that her office was in a privately owned building is not material since her office space was government owned or leased. Neither do I find it material that she may have installed her own lock on the government door. *1364 There is a strong argument that once installed, it became the property of the government as lessee. In any event, these allegations obscure the central inquiry which is whether plaintiff had a "reasonable expectation of privacy," which was violated by defendants' conduct. While there are clearly circumstances under which an individual may have a reasonable expectation of privacy in her office and its contents, Gillard v. Schmidt, 579 F.2d 825, 829 fn. 1 (3d Cir. 1978), such circumstances are not present here. Under the exceptional facts of this case, plaintiff could have no reasonable expectation of freedom from a perusal of government office space to ascertain the whereabouts of a file which she admittedly possessed but persistently refused to relinquish. (See Plaintiff's Reply Affidavit ¶ 6). United States v. Nasser, 476 F.2d 1111, 1123 (7th Cir. 1973) (work related warrantless search upheld).[7] Without question, the sole purpose of the search here was work related and reasonably foreseeable by plaintiff who had refused the active efforts of her supervisors to locate and recover the Taylor file, which was government property.[8] By the June 9, 1977 order of the Appeals Council, the Taylor case had been remanded with instructions to reassign it. Chocallo admittedly refused to turn over the file and at the time of the search had improperly retained the file for eleven days. Under these circumstances, I do not find that defendants' actions in entering and searching her office to obtain the Taylor file amounted to a violation of plaintiff's Fourth Amendment rights. Accordingly, the actions against defendants Ennis, Roseman and Kuriger must be dismissed for failure to state a claim.
VI. DEFENDANT BUREAU OF HEARING AND APPEALS
To the extent that plaintiff sues the Bureau of Hearing and Appeals claiming damage liability, the doctrine of sovereign immunity applies to bar her claim. Such a suit constitutes an action against the United States as to which it has not waived its immunity. See City of Whittier v. United States Department of Justice, 598 F.2d 561, 562 (9th Cir. 1979); Midwest Growers Co-op Corp. v. Kirkemo, 533 F.2d 455, 465 (9th Cir. 1976) (quoting Blackmar v. Guerre, 342 U.S. 512, 515, 72 S.Ct. 410, 411, 96 L.Ed. 534 (1952).)
VII. FEDERAL DEFENDANTS, TRACHTENBERG, GITMAN, LIGHTFOOT, BROWN
Chocallo sues Robert L. Trachtenberg, Director of the Bureau of Hearings and Appeals, Philip T. Brown, Chief ALJ, Sol R. Gitman, Regional Chief ALJ, James C. Lightfoot, ALJ in charge of the Philadelphia office and James B. Cardwell, Commissioner of the Social Security Administration, alleging violations of 42 U.S.C. § 1985, the Fifth Amendment, Administrative Procedure Act (5 U.S.C. § 551 et seq.); the Social Security Act, as amended, 42 U.S.C. § 405(g) and (h), and the Privacy Act of 1974, 5 U.S.C. § 552A(g)(1). As against these defendants, Chocallo claims a conspiracy inter se and with the CLS defendants to destroy her integrity, efficacy and independence as an ALJ. Because matters outside the pleadings have been submitted by both parties, the motions to dismiss will be *1365 treated as motions for summary judgment. The various claims as to these defendants are set forth separately.
A. 42 U.S.C. § 1985 and Fifth Amendment
Basically, plaintiff asserts that defendants Gitman, Brown, Trachtenberg and Lightfoot violated her rights under 42 U.S.C. § 1985 and the Fifth Amendment by contributing to and participating in the events leading to the removal and remand of the Taylor and Coleman cases. Defendant Brown allegedly: (1) received and acted upon Stein's letter requesting removal in the Taylor case; (2) received and acted upon Bernstein's letter complaining of Chocallo's conduct of the Coleman case; (3) wrote to Chocallo on March 10, 1977 asking her to resolve her differences with Stein and petitioned the Appeals Council to vacate the Taylor order and remand the case for reassignment; (4) wrote to Chocallo informing her of his intention to have her decision in Coleman reviewed and ultimately petitioned the Appeals Council to remand the Coleman decision; and (5) wrote to Chocallo asking her to increase her production.
As to defendant Gitman, the complaint alleges that he (1) received Stein's letter in the Taylor case; (2) participated in obtaining the Taylor files from Chocallo; (3) solicited complaints about plaintiff from CLS attorneys; (4) met with Chocallo to discuss her productivity and her conduct of the Coleman case; and (5) asked Chocallo to inform him of her case dispositions on a weekly basis.
Defendant Lightfoot allegedly: (1) participated in obtaining the Taylor files; (2) solicited complaints from CLS attorneys; (3) received and acted upon Bernstein's letters regarding plaintiff's conduct of the Coleman case; and (4) did not assign her cases from January, 1976 to October, 1976 and from February, 1977 on, due to her low productivity.
Defendant Trachtenberg allegedly: (1) received Gitman's letter requesting her removal in the Taylor case; (2) ordered Gitman and Lightfoot to obtain the Taylor file; (3) received her complaints in the Coleman case; (4) attached her low productivity; (5) instituted the adverse action seeking her removal; and (6) improperly denied her a promotion.
Assuming arguendo that the conduct alleged against each defendant violates a cognizable interest under either 42 U.S.C. § 1985 or the Fifth Amendment, each of these defendants is entitled to immunity.
1. Absolute Immunity
All of the claims asserted against defendants Gitman, Brown and Lightfoot pursuant to § 1985 and the Fifth Amendment arise from actions undertaken in their capacity as Administrative Law Judges. These defendants properly assert that they are immune from suit for monetary damages under the Fifth Amendment. Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978). In Butz, the Supreme Court held that persons performing adjudicatory functions within a federal agency are entitled to absolute immunity from damage liability for their judicial acts. Id. at 514, 98 S.Ct. at 2914. This immunity applies as well to suits brought under the Civil Rights Act, here section 1985. See Ross v. Meagan, 638 F.2d 646, 649 n. 2 (3d Cir. 1980). In the parallel context of absolute immunity for judges, the Supreme Court has stated that the essential inquiry in determining whether such immunity attaches is whether, at the time the judge took the challenged judicial action, he had jurisdiction over the subject matter before him. Stump v. Sparkman, 435 U.S. 349, 356-57, 98 S.Ct. 1099, 1104-1105, 55 L.Ed.2d 331 (1978). "A judge will not be deprived of immunity because the action he took was in error, was done maliciously or was in excess of his authority, rather, he will be subject to liability only when he acted in the `clear absence of all jurisdiction.'" Id. at 356-57, 98 S.Ct. at 1104-1105 (quoting Bradley v. Fisher, 80 U.S. (13 Wall.) 335, 351, 20 L.Ed. 646 (1872)).
It is clear that none of the judicial acts complained of were done "in the clear absence of all jurisdiction." Plaintiff's *1366 averments relate solely to actions regarding case assignments, the removal and remand of cases, and the supervision of plaintiff. All of these actions are encompassed within the description of defendants' responsibilities and duties, as set forth in their affidavits. A second pertinent inquiry is whether defendants' acts were "judicial acts," so that they fall within the zone of protected activity. Whether an act is a judicial act depends upon (1) whether it is a function normally performed by a judge and (2) whether the parties dealt with the judge in their judicial capacity. Sparkman, 435 U.S. at 361-62, 98 S.Ct. at 1107. The actions alleged here are all functions normally performed by the Chief Administrative Law Judge, the Regional Administrative Law Judge and the Administrative Law Judge in charge of the Philadelphia office, as evidenced by their respective position descriptions. Further, it is clear that plaintiff dealt with these defendants at all times in their judicial capacities. Under the controlling cases, they are immune from liability for damages under § 1985 and the Fifth Amendment.[9]
2. Qualified Immunity
As to defendant Trachtenberg, the Director of the Bureau of Hearings and Appeals, a defense of qualified immunity applies to bar plaintiff's claims for damages arising out of the performance of his duties. At all relevant times, Trachtenberg was acting within the scope of his authorized duties as Director. In that capacity, he was a public official who was charged with the performance of duties involving the exercise of discretion. As such, he is entitled to a qualified immunity from liability in a suit for damages arising from unconstitutional action. See Harlow v. Fitzgerald, ___ U.S. ___, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982); Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978). The Supreme Court has recently held that to be entitled to this immunity, a government official must establish that he acted in good faith. Harlow v. Fitzgerald, ___ U.S. at ___, 102 S.Ct. at 2735. That is, his conduct must not violate clearly established statutory or constitutional rights of which a reasonable person would have known. Id. at ___, 102 S.Ct. at 2735. In Harlow v. Fitzgerald, the court specifically found that "reliance on the objective reasonableness of an official's conduct, as measured by reference to clearly established law, should avoid excessive disruption of government and permit the resolution of many insubstantial claims on summary judgment." Id. at ___, 102 S.Ct. at 2738. Thus, if the affidavit of Trachtenberg establishes that he acted in good faith, in accordance with the above definition, he is entitled to assert the defense of qualified immunity.
One of plaintiff's principal allegations against Trachtenberg is that he recommended removal action be undertaken against her. Plaintiff contends this action was initiated by Trachtenberg in bad faith. While it is true that Trachtenberg did recommend adverse action, in view of the final judicial decision affirming the removal action, it cannot be said that the recommendation was without some legitimate foundation or justification. Nor can it be said that Trachtenberg acted in violation of plaintiff's clearly established statutory or constitutional rights.
Plaintiff's other major contention is that Trachtenberg deliberately and intentionally deprived her of a promotion for a period of approximately five months. Plaintiff had been appointed as an Attorney Examiner or Hearing Examiner SSI GS-905, and not an administrative law judge under 5 U.S.C. § 3105. An Act of Congress, P.L. 94-202 approved January 2, 1976, authorized the Secretary of DHEW to treat hearing examiners as temporary administrative law judges until December 31, 1978. Under this *1367 Act, the examiners could hear social security claims under Titles II, XVI and XVIII of the Social Security Act as though they were qualified and appointed under 5 U.S.C. § 3105. On March 3, 1976, the Secretary of DHEW delegated to Trachtenberg, as Director of Hearings and Appeals, the task of implementing P.L. 94-202. Immediately, plaintiff and other persons holding appointments as hearing examiners became Temporary Administrative Law Judges. On April 6, 1976, Trachtenberg advised plaintiff of his intention to recommend that adverse action be taken against her. Although plaintiff had been designated for a promotion effective April 11, 1976, the papers were not processed because of the adverse charges pending against her. On May 26, 1976, defendant advised plaintiff that an increase to a higher grade was not appropriate because an adverse action against her had been recommended. Plaintiff was informed that a promotion would not only be inconsistent with the adverse charges stemming from her refusal to turn over the Coleman file in February, 1976, but would also jeopardize the integrity of the adverse action. Plaintiff complained to the Civil Service Commission on May 25, 1976, which ruled on July 8, 1976, that the denial or suspension of the promotion to a higher grade was contrary to pertinent regulation 5 C.F.R. 930.204. Plaintiff then promptly received the grade increase and a retroactive lump sum payment.
The Civil Service Commission ruled that since the classifications of all ALJ's were being upgraded, incumbents were entitled to the grade increase without regard to merit. In effect, the Commission ruled that the increase was not intended to reflect a "promotion" in the commonly understood sense but rather an "across the board" increase for all such positions. Plaintiff lost no pay as the result of her successful grievance filed with the Civil Service Commission.
Plaintiff's allegation against Trachtenberg with respect to the promotion issue is that he acted maliciously, willfully and intentionally (Complaint, ¶ 44); not that he acted in violation of a limitation placed upon his conduct by the Constitution or by statute. There is no doubt that Trachtenberg had authority to recommend adverse action for actions of a subordinate which were deliberate impediments to the execution of his delegated authority. Although he erred in not processing plaintiff's promotion or grade increase because of the pendency of adverse action, believing a promotion to be inconsistent with the proposed discipline, it cannot be said that by so doing he acted in violation of plaintiff's clearly established statutory or constitutional rights. A review of the uncontested portions of the record shows that the object of Trachtenberg's action was to recommend effective disciplinary action. It was not to construe the application of wage increases for all Temporary Administrative Law Judges. He communicated to plaintiff through the Personnel Department that the basis for her non-promotion was discipline related. The final administrative decision on the question as to whether plaintiff was entitled to a promotional increase did not rest with Trachtenberg but rather with the Civil Service Commission. Very simply, I find that Trachtenberg's actions with regard to plaintiff's promotion were taken in "good faith." He reasonably believed that where an adverse action was to be instituted, it was improper to grant plaintiff a promotion. The Commission later determined that he erred. However, under the circumstances, it cannot be said that plaintiff's statutory right to a promotion was so clear that Trachtenberg's withholding of it rose to the level of "bad faith."
Finally, plaintiff contends that Trachtenberg's recommendation for the adverse action initiated in June, 1977 was violative of her constitutional rights in that she was harassed and retaliated against for exercising quasi-judicial independence. This argument fails. Plaintiff's contention is premised upon the wholly erroneous assumption that she could resist lawful directives of the Appeals Council in the Taylor and Coleman cases. Plaintiff defied this directive at her own risk, including the risk *1368 of adverse action for deliberate insubordination. That being the case, plaintiff cannot be heard to argue that Trachtenberg violated her constitutional rights by the institution of removal proceedings.
B. Social Security Act
As to the federal defendants, plaintiff also asserts that they acted in violation of sections 205(g) and (h) of the Social Security Act, 42 U.S.C. § 405(g) and (h) (1976). She asserts, in essence: (1) her social security decisions are not reviewable by any entity other than the federal district court (Amended complaint, ¶ 56); (2) the Appeals Council was without authority under the statute and regulations to review her decision in the Taylor case and (3) the Appeals Council was without authority to remand the Coleman case. Plaintiff is barred by principles of collateral estoppel from relitigating the first issue here, since it was fully and fairly litigated before Judge McCarthy in plaintiff's removal proceedings. See text accompanying notes 5-6, supra. Collateral estoppel also bars relitigation of the second issue. Judge McCarthy fully addressed the issue of whether the Appeals Council had statutory authority to review and remand her Taylor order and concluded that it had such authority. Plaintiff's final contention, that the Council lacked authority to review and remand the Coleman case, is without merit, as discussed supra. See 20 C.F.R. § 416.1467-68. Accordingly, summary judgment is granted in favor of the federal defendants on these claims.
VIII. PRIVACY ACT CLAIMS
Plaintiff complains that the Bureau and individual officials including James B. Cardwell, Commissioner of the Social Security Administration, violated the Privacy Act of 1974, 5 U.S.C. § 552a(e), by secretly collecting information about her that was not relevant and necessary to carry out lawful operations and functions and by disseminating this information without her knowledge or consent and to her detriment. (Complaint, ¶-45-48). The gravamen of the complaint is that the Social Security and Bureau defendants solicited, received and retained in the Bureau's records, the complaints of "attorneys and other individuals" about plaintiff and that these complaints may be exposed to potential employers.
Plaintiff has not specifically alleged what "complaints" she is referring to, even though these records were made available for her inspection. (Declaration of Peter James Kurapka, ¶ 5, Exhibit F). These vague and unsupported allegations do not give defendants fair notice of the wrongs with which they are charged. Plaintiff has not indicated what documents, if any, were improperly collected and disseminated. Nor has she indicated the manner in which defendants collected such data. This alone, provides a basis for dismissal of these complaints. See, e.g., Harper v. United States, 423 F.Supp. 192, 196 (D.S.C.1976). However, even assuming that plaintiff charges defendants with receiving and retaining complaints made by CLS attorneys on behalf of their clients, I do not find from the undisputed facts that there was any violation of Privacy Act, 5 U.S.C. § 552a(e). The statute proscribes the collection of irrelevant information which is not necessary to accomplish a purpose of the agency. Clearly, letters written by attorneys appearing before Chocallo, which criticized her conduct are "relevant and necessary" within the meaning of the statute. They certainly are relevant to a determination of whether plaintiff was adequately and properly performing her duties as an ALJ. Thus, I find no violation of this section of the Privacy Act.
Plaintiff also complains that her rights under the Privacy Act were violated when defendants failed to respond to her request for all records pertaining to her maintained by the Bureau. I find no violation of the Act because her request was answered specifically. By letter dated May 25, 1977, plaintiff was advised by the Bureau that there existed and were available for her inspection, an official personnel file and a correspondence file. She was informed that these contained correspondence between *1369 her and various Bureau officials, production records, pay, leave and attendance records and an employee record extension file. (Declaration of Peter James Kurapka, ¶ 5, Exhibit F thereto). Not satisfied with that response, plaintiff filed an appeal to the Secretary through Cardwell. The appeal was denied because not only had plaintiff been given the records, but she did not then complain that access to the records was denied. Thereafter on November 16, 1977, plaintiff made a request for information pertaining to the work activities of other ALJ's. On January 3, 1978, the Bureau made a specific reply identifying documents in response to the request and notifying her of their availability for copying and inspection. (Declaration of Kurapka ¶ 10Exhibit K thereto).
Plaintiff seeks damages against the individual defendants for "willful and intentional withholding of the requested data in plaintiff's files...." Complaint, ¶ 15, p. 26. Any liability for a violation of the Privacy Act rests solely upon the agency and not the individuals. Bruce v. United States, 621 F.2d 914, 916, n. 2 (8th Cir. 1980). Therefore, plaintiff's actions against them must be dismissed. Defendants argue that in cases such as this, the only remedy available to plaintiff would be injunctive relief. 5 U.S.C. § 552a(g)(1), (3)(A). Clearly, there is no basis for injunctive relief here since plaintiff does not contend that the agency has withheld the requested information. She claims merely that defendants engaged in dilatory tactics. Even if plaintiff is entitled to a claim for statutory damages, 5 U.S.C. § 552a(g)(1), (4), she does not meet the statutory requirement that she prove "intentional and willful" conduct by the agency. There is simply no evidence of record that the agency acted in such a manner. The correspondence between the parties demonstrates that the agency attempted to comply promptly with plaintiff's request. Within two (2) weeks of plaintiff's request, the agency informed her of its need for more specific identifying information in order to comply with her request. Her subsequent letter to Trachtenberg on May 5, 1977 was referred to the agency for action and within three weeks she was informed of the records regarding her which were maintained by the Bureau. These facts, very simply, do not demonstrate the "intentional and willful" conduct which is required by the Act before liability for statutory damages attaches. Thus, summary judgment is granted in favor of the Bureau on plaintiff's Privacy Act claims against it.
IX. PRODUCTIVITY REQUIREMENT, CASE ASSIGNMENTS AND PEER REVIEW PROGRAM
Plaintiff asserts that defendants imposed upon her certain requirements in violation of the Administrative Procedure Act. While the APA may confer a qualified right of decisional independence upon ALJ's, Nash v. Califano, 613 F.2d 10, 15 (2d Cir. 1980), I do not find this right to have been violated by the practices of which plaintiff complains. The gravamen of her complaint is that defendants, in particular Brown, Gitman, Trachtenberg and Lightfoot complained at various intervals about plaintiff's productivity. For example, on February 17, 1976, the Chief Administrative Law Judge, Phillip Brown, "earnestly" requested plaintiff to take steps to increase her productivity. (Complaint, Exh. H-88). Then, on April 6, 1976, he asked her, as he had asked other ALJ's, to report the disposition of cases and the number of hearings held on a weekly basis. (Brown Affidavit, ¶ 14). Plaintiff, in her reply to Brown's affidavit, does not state that there was a production requirement, but rather a reporting requirement. No penalty was attached to her failing to reach a quota. Therefore, there was no quota system imposed on plaintiff. Merely requesting ALJ's to account administratively to the Chief ALJ for the fulfillment of their assignments cannot constitute a constitutional violation nor a violation of the APA, to the extent that it recognizes a qualified right of decisional independence of ALJ's.
Plaintiff also asserts that she was not assigned cases on a rotational basis during certain periods. Presumably, plaintiff *1370 alleges that this violates the APA, 5 U.S.C. § 3105 which provides that "Hearing examiners shall be assigned to cases in rotation so far as practicable ...." The statute expressly limits any "right" to be assigned cases on a rotational basis by providing the qualifying language "so far as practicable." Here, the affidavit of James C. Lightfoot sets forth circumstances which indicate that in plaintiff's case, assignment on that basis was not practicable. He explained that Chocallo was appointed as a temporary judge and thus was not authorized to hear and dispose of the full range of cases. In addition, as a result of the tremendous backlog of cases, individual judge's dockets are examined to attain equitable caseloads, so that a judge will not be overloaded. Care is also taken to assure that judges are not given an inordinate number of out-of-city assignments. Lightfoot asserts that Chocallo was assigned cases according to these guidelines, and Chocallo has not come forward with evidence to suggest otherwise.
Finally, she asserts that the imposition of a "Peer Review Program" upon all ALJ's, including her, violated her right to decisional independence under the SSA, APA, and violated unspecified constitutional rights. She seeks an injunction against the continued implementation of this program by defendants. Her claim of constitutional violation is without merit. Any right to decisional independence on the part of an ALJ is a matter of statutory right. As to the claim of statutory violations, she attacks the Peer Review Program only in an abstract manner. Such a system is not necessarily violative of the APA and SSA. However, plaintiff does not allege that this Review System actually infringed upon her decisional independence. Thus, she has failed to even state a claim. In any event, her individual claim for injunctive relief vis a vis the Peer Review Program has been rendered moot by her removal from office, which the United States District Court for the District of Columbia found was supported by substantial evidence in Chocallo v. Prokop, Civil Action No. 80-1053 (D.D.C. October 10, 1980). See DeFunis v. Odegaard, 416 U.S. 312, 94 S.Ct. 1704, 40 L.Ed.2d 164 (1974).
For the foregoing reasons, plaintiff's claims against all federal defendants are dismissed.
NOTES
[1] The Code of Professional Responsibility, adopted by the American Bar Association, Ethical Considerations EC 7-9 and EC 7-11 support the use of discretion by an attorney not to disclose to a client information such as a recusal motion.
[2] In early February, 1976, for the purpose of defending a federal class action brought against the Secretary of DHEW, a request was made for the Coleman file by the Office of General Counsel of DHEW through the Assistant Commissioner of the Bureau of Supplemental Security Income. (Gitman Affidavit, ¶¶ 6, 8, Attachment # 2). All case files involved in that lawsuit had been obtained except the Coleman file which was in the possession of, or under the control of, plaintiff. Despite the stated need of the General Counsel's Office for the file, she refused to surrender it. Id.
[3] Each CLS defendant is charged with: (1) making "ex parte" complaints to Chocallo's superiors concerning her conduct as a hearing examiner, (Complaint ¶ 24, 27, 30, 31); (2) conspiring to prevent her from discharging her duties as a judge (Complaint, ¶ 12) and (3) being "unruly" and "offensive" at hearing before Chocallo (Complaint, ¶ 14). Based on these factual representations, Chocallo claims that her rights under the due process clause of the Fifth Amendment and under 42 U.S.C. § 1985 were violated by the CLS defendants. Chocallo also alleges causes of action under the Administrative Procedure Act, 5 U.S.C. § 551, et seq.; the Social Security Act, 42 U.S.C. § 301, et seq. and the Privacy Act, 5 U.S.C. § 552a. Fairly read, however, the complaint does not allege that the CLS defendants violated any of these provisions.
[4] 42 U.S.C. § 1985 provides:
(1) If two or more persons in any State or Territory conspire to prevent, by force, intimidation, or threat, any person from accepting or holding any office, trust, or place of confidence under the United States, or from discharging any duties thereof; or to induce by like means any officer of the United States to leave any State, district, or place, where his duties as an officer are required to be performed, or to injure him in his person or property on account of his lawful discharge of the duties of his office, or while engaged in the lawful discharge thereof, or to injure his property so as to molest, interrupt, hinder or impede him in the discharge of his official duties;
(2) If two or more persons in any State or Territory conspire to deter, by force, intimidation, or threat, any party or witness in any court of the United States from attending such court, or from testifying to any matter pending therein, freely, fully, and truthfully, or to injure such party or witness in his person or property on account of his having so attended or testified, ...; or if two or more persons conspire for the purpose of impeding, hindering, obstructing, or defeating, in any manner, the due course of justice in any State or Territory, with intent to deny to any citizen the equal protection of the laws, or to injure him or his property for lawfully enforcing, or attempting to enforce, the right of any person, or class of persons, to the equal protection of the laws;
(3) If two or more persons in any State or Territory conspire ... for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws; or for the purpose of preventing or hindering the constituted authorities of any State or Territory from giving or securing to all persons within such State or Territory the equal protection of the laws; ... in any case of conspiracy set forth in this section, if one or more persons engaged therein do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any right or privilege of a citizen of the United States, the party so injured or deprived may have an action for the recovery of damages occasioned by such injury or deprivation, against any one or more of the conspirators.
[5] Judge McCarthy found unpersuasive Chocallo's argument that sections 205(g) and (h) of the SSA, 42 U.S.C. 405(g) and (h), prohibit review of a "presiding judges'" decision by any person, agency or tribunal except the federal district court. To the contrary, he found that these sections refer only to the decisions of the "Secretary" and contain no mention of a "presiding judges" decision. He found that plaintiff's assumption that she is "the Secretary" since an ALJ has delegated authority to render decisions, ignores the fact that the Appeals Council also has delegated authority to review these decisions. See 20 C.F.R. § 416.1459-61 (regulation assigning review functions to Council). He found that section 205 of the SSA, 42 U.S.C. § 405, does not preclude a delegation of authority to an ALJ to make findings and a decision, subject to review by an appeals council before these decisions become final and binding.
[6] Plaintiff argues that the defense of collateral estoppel was waived since it was not raised until the federal defendants filed renewed motions to dismiss raising the collateral estoppel issue. The collateral estoppel issue was briefed pursuant to my order. I do not find the waiver argument persuasive. Plaintiff's argument that all defenses must be asserted initially or be deemed waived misconstrues Fed.R.Civ.P. 12(b) which provides that certain enumerated defenses, not including collateral estoppel, must be raised in the responsive pleading.
[7] The Third Circuit's decision in Gillard v. Schmidt, 579 F.2d 825 (3d Cir. 1978) is not contrary to the rule set forth in Nasser that a public employer may search an employee's office when the search is "work-related." In Gillard, a Fourth Amendment violation was held to be alleged where a school board member made a search of guidance counselor's desk containing sensitive student records, since the counselor had a reasonable expectation of privacy. Id. at 828. However, the court specifically declined to consider the force of precedents such as Nasser, since there was no evidence that the employer in Gillard was seeking to recover government property. Id. at 829 n. 1. Here, by contrast, defendants sought merely to obtain a file which was being improperly retained by Chocallo for official use.
[8] Plaintiff's refusal to relinquish the file led to a mandamus action against her. United States v. Wanda P. Chocallo, E.D.Pa. Civil Action No. 77-2437. It is obvious why plaintiff refused to give up the file on June 10 and thereafter. She had scheduled and was intent on holding an unauthorized hearing in the Taylor case.
[9] While the absolute immunity doctrine may not extend to suits for injunctive relief, without deciding this issue, I find that plaintiff's claims for injunctive relief have been rendered moot by her removal from office, which the United States District Court for the District of Columbia affirmed in Chocallo v. Prokop, Civil Action No. 80-1053 (D.D.C. October 10, 1980). See DeFunis v. Odegaard, 416 U.S. 312, 94 S.Ct. 1704, 40 L.Ed.2d 164 (1974).
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510 U.S. 1047
Murphyv.United States.
No. 93-821.
Supreme Court of United States.
January 10, 1994.
1
Appeal from the Ct. Mil. App.
2
Certiorari denied. Reported below: 38 M. J. 468.
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782 F.2d 1053
Romerov.MacDougall
85-1843
United States Court of Appeals,Ninth Circuit.
1/21/86
1
D.Ariz.
AFFIRMED
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578 F.2d 351
97 L.R.R.M. (BNA) 2669, 188 U.S.App.D.C. 109,83 Lab.Cas. P 10,369
BAYLOR UNIVERSITY MEDICAL CENTER, Petitioner,v.NATIONAL LABOR RELATIONS BOARD.
No. 76-1940.
United States Court of Appeals,District of Columbia Circuit.
Argued Oct. 27, 1977.Decided Feb. 14, 1978.
Robert W. Smith, with whom Bowen L. Florsheim, Dallas, Tex., was on the brief, for petitioner.
Paul J. Spielberg, Deputy Asst. General Counsel, National Labor Relations Board, Washington, D. C., with whom John S. Irving, General Counsel, Carl L. Taylor, Associate General Counsel, National Labor Relations Board, Washington, D. C., were on the brief, for respondent.
Before LEVENTHAL, MacKINNON and WILKEY, Circuit Judges.
MacKINNON, Circuit Judge:
1
The Baylor University Medical Center ("Baylor") petitions for review of an order of the National Labor Relations Board ("Board") and the Board makes a cross-application for enforcement of its order. Our jurisdiction is conferred by section 10(f) of the National Labor Relations Act, 29 U.S.C. § 160(e), (f). The Hearing Examiner conducted an extensive hearing on a complaint issued by the Board1 charging, inter alia,2 that Baylor's no-solicitation and no-distribution rule ("the no-solicitation rule")3 was overly broad and an "unfair labor practice" in violation of section 8(a)(1) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1). The gravamen of the Board's complaint was that this rule prohibited solicitation by employees during their non-working time and barred all forms of solicitation and distribution in any areas of the hospital complex where services were administered to patients or where visitors might be disturbed, thereby effectively eliminating solicitation and distribution in all parts of the hospital buildings except for a small employees' locker room.4 The full rule provided:
2
Solicitation of patients or visitors by anyone on Baylor University Medical Center property is strictly prohibited. Solicitation of employees of Baylor University Medical Center by non-employees or the distribution of literature, pamphlets, or other material, by non-employees on Baylor University Medical Center property is prohibited.
3
Solicitation of employees of Baylor University Medical Center by other employees or distribution of literature between employees is prohibited during work time and/or in work areas. The term "work areas" includes patient care floors, hallways, elevators or any other area such as laboratories, surgery or treatment centers, where any type of service is being administered to or on behalf of patients and also includes any area where persons visiting patients are likely to be disturbed. Service to our patients and their visitors includes not only primary and acute medical care, but, as you all know, food service and psychological support.
4
Unauthorized sales and solicitation of orders for any type of product or service to anyone on Baylor University Center premises are prohibited.5
5
The Board's order, which fully adopted the recommended decision of the Hearing Examiner,6 required the hospital to cease and desist from enforcing this rule and to rescind any restriction on employees' solicitation other than in "immediate patient care areas."7 In light of the general rule that solicitation cannot be proscribed during non-working time nor distribution during non-working time in non-working areas,8 the Board while it recognized the special circumstances presented by a hospital environment to the extent of conceding that Baylor could prohibit solicitation at all times within "immediate patient care areas"9 invalidated any ban on solicitation insofar as it applied to most of (1) the corridors, (2) to the cafeteria and (3) vending machine areas. The exclusion of these parts of the hospital from the permissible scope of the hospital's no-solicitation rule is the main point of contention between the parties.
6
We find that the record evidence compels the conclusion that the situation in Baylor involves unique circumstances which justify a broad proscription on solicitation and distribution. In its resolution of this case the NLRB has not adequately discharged its responsibility to effectuate congressional policy,10 which unquestionably has been concerned to avoid disruptions in hospitals. We adopt petitioner's contention that it is not an unfair labor practice to bar solicitation in Baylor's corridors. Furthermore, we feel that a strong line of authority arising in contexts other than that of health care facilities establishes the validity of the no-solicitation rule in the cafeteria and vending area.
7
The Hearing Examiner evidently felt compelled to limit Baylor's proscriptions on solicitation as he did because of the Board's recent decision in St. John's Hospital and School of Nursing, Inc., 222 NLRB No. 182, 91 L.R.R.M. 1333 (1976), enforced in part and denied in part, 557 F.2d 1368 (10th Cir. 1977).11 However, this decision subsequently was denied enforcement by the Tenth Circuit after the NLRB order in this case was issued, St. John's Hospital and School of Nursing v. NLRB, 557 F.2d 1368 (10th Cir. 1977). We agree with the Tenth Circuit that even were it possible which it manifestly is not to determine with any confidence and rationality which areas in a hospital are and which are not "immediately" involved in patient care,12 the Board's overly restrictive position on the valid extent of no-solicitation rules in medical facilities must nevertheless be overturned as insensitive both to the unique conditions found in an acute general hospital and to the declared intent of Congress.
8
In reviewing an order by the NLRB, courts must accept its determinations if they are supported by "substantial evidence"13 and give considerable deference to the Board's interpretation of the terms of the NLRA.14 In this case, however, we find that the Board's decision is both contrary to congressional purpose and outside the Board's area of expertise,15 and accordingly entitled to little of the deference traditionally accorded to NLRB actions.16 While we are not at liberty to deny enforcement to an order of the Board merely because we would have favored a different result,17 we feel no hesitation in denying enforcement to the instant order.
9
* The Corridors
10
The legislative history of the NLRA as it applies to voluntary, non-profit hospitals18 reveals an unmistakable solicitude for the peaceful functioning of these institutions, even at some expense to employees' right to organize.19 It was not until 1974 that such institutions which employ some 55% of all hospital workers were included within the NLRA, and in the course of amending the scope of the Act's coverage Congress clearly evinced its belief that these facilities presented special problems which mandated a different approach to the application of the NLRA than that taken in other fields.20
11
Many of the witnesses before the Committee, including both employee and employer witnesses, stressed the uniqueness of health care institutions. There was a recognized concern for the need to avoid disruption of patient care wherever possible.
12
It was this sensitivity to the need for continuity of patient care that led the Committee to adopt amendments with regard to notice requirements and other procedures related to potential strikes and picketing.
13
S.Rep.No. 93-766, 93d Cong., 2d Sess. reprinted in 1974 U.S.Code Cong. & Admin.News, vol. 2, 3946, 3951 (emphasis added).
14
The Board suggested elsewhere that Congress was only concerned to prevent the disruptions that would be caused by actual strikes or picketing,21 but we find no support for such a narrow reading of the congressional purpose.22 On the other hand, the clear expressions of congressional concern for avoiding disruptions in the hospital environment that we do find in the legislative history encourages us to give special weight to the needs of patients in striking a balance between preventing possible sources of disruptions in hospitals and protecting employees' right to organize.23 Moreover, it seems clearly preferable in resolving any doubts as to how best to accommodate these conflicting interests to err on the side of protecting the patients to whom irreparable injury might be done rather than on that of a labor organization which can at worst suffer a brief, albeit unjustified delay.24
15
The interested parties should be particularly inclined to avoid possible sources of disruption in the case of a hospital as large and congested as Baylor. In total admissions, Baylor is the seventh largest hospital of the nation's 5,000 "acute care" private and charitable hospitals, fourth largest in surgical procedures, and second in bed capacity. It employs over 3,700 individuals to maintain its 1,125 beds and care for the 44,000 in-patients who are admitted there each year. There was testimony before the Hearing Examiner that some 15,000-20,000 persons entered the hospital each day25 and that the passageways and corridors were "as crowded as the main streets of downtown Dallas."26 It is remarkable that conditions at Baylor are not more chaotic than they are; certainly the imposition of any additional sources of potential disruption should only be required reluctantly and after a far more detailed analysis than the NLRB devoted to this particular case.27
16
Although respondents make much of Baylor's history of alleged anti-union bias,28 there is no indication that its no-solicitation rule was in any way discriminatory or directed against efforts at unionization.29 The hospital takes a variety of other precautions against excess noise and crowding. For example, all employees are required to leave their work areas when they take their breaks from work,30 and the hospital has maintained a ban on all forms of solicitation for some fifteen years31 long before there was any movement to unionize at Baylor.
17
The importance of preventing crowding and disruption in the hospital corridors cannot be seriously debated. Experienced witnesses testified of the extent to which congestion in the corridors impedes the operation of the medical staff and annoys patients and visitors.32 Quick and unimpeded passage through the hallways was shown to be imperative to the efficient operation of the hospital and to the success of certain of its emergency services, such as the cardiac arrest unit.33 The hallways serve not only as passageways for patients, visitors, doctors, and medicine,34 but also as viewing rooms for the nursery35 and storerooms for a variety of hospital equipment which must be available at a moment's notice.36 There was also testimony that a great deal of the physical therapy undertaken at Baylor actually took place in the corridors,37 and that for many departments the corridors served as the only available waiting room.38 It is in large measure true, as petitioner insists,39 that virtually every functioning part of an acute general hospital is involved in patient care,40 and that at Baylor the corridors seem to serve as much as additional all-purpose rooms than merely as hallways.41 On the record before us, it is patently unreasonable that the Board would require that solicitation be permitted in the corridors in view of the additional congestion and disruption which it would involve.
18
Baylor could, as respondent suggests,42 impose a general, "evenhanded" proscription on noise and loitering in the corridors rather than specifically banning solicitation. To suggest this alternative, however, would only exalt form over substance, as there are very few activities besides solicitation and distribution that could plausibly take place in hospital corridors and result in greater crowding and noise. Moreover, if the NLRB is willing to concede that such a broad rule might be justified by the special characteristics of a hospital (thereby preempting the question of the no-solicitation rule), it is hard to see why it insists that a no-solicitation rule also would not be justified. By rule Baylor prohibits solicitation because it is the most probable potential recurrent cause of disruption in the corridors. Furthermore, solicitation has a disruptive force quite apart from its contribution to noise level and overcrowding. There was evidence at the hearing that witnessing solicitation tends to undermine both patients' and visitors' confidence in the hospital.43 Having to confront the worry that employees might reduce their standards of service as part of a labor dispute seems an unnecessary and undesirable additional source of anxiety for persons already hard-taxed emotionally.44 And the thought that matters affecting one's life and death are perceived in terms of wage increases and coffee breaks by those responsible for one's well-being fully justifies the very upsetting concern that patients and those close to them were shown to have about such activities.45 It is not only the likelihood that congestion and commotion would result from such solicitation, but also the inherently disturbing effect of interjecting undertones of labor disputes into a situation where sick persons are totally dependent on the unflagging assistance of others that are major factors contributing to the disruptive effect of solicitation. Wherever in the hospital an emotionally vulnerable group of patients and their visitors may be present, we feel that unique considerations come into play which justify an otherwise overly broad no-solicitation rule.
19
(I)t must be remembered that Respondents facility is not a manufacturing plant, it is a hospital. And it is in the nature of hospitals that certain of the working areas (hallways, elevators, stairs, patient's rooms, gift shops, etc.) are necessarily open to the use of patients and visitors. . . . Further, the hospital services ill individuals who, in their weakened condition may readily be upset if they overhear anti-union/pro-union arguments . . . .
20
Guyan Valley Hospital, 198 NLRB 107, 111 (1972).
21
It is surprising that the NLRB changed its own established viewpoint on this matter so utterly, and we find its now repudiated analysis more appropriate than its present position in the instant case.
II
The Cafeteria and Vending Areas
22
The cafeteria and vending areas of Baylor present a considerably different problem from that of the corridors. With regard to the Board's determination that solicitation must be allowed in the hospital's cafeteria and vending area the other main point of disagreement between the parties we also overturn the Board's ruling, but do so for a reason virtually the inverse of that which led us to deny enforcement of its invalidation of Baylor's no-solicitation rule as it applied to the corridors. While we held that Baylor's ban on soliciting in the hospital's corridors was justified due to the "special circumstances" of a hospital environment, we hold that a similar proscription covering its cafeteria and vending area is justified because these areas are not materially "special" or different from other restaurants and shops. We find the reasoning of the Tenth Circuit in St. John's Hospital and School of Nursing v. NLRB, supra, to be persuasive:
23
As to "other patient access areas such as cafeterias, gift shops, and the like," we conclude that even if it is conceded these areas are not directly related to the Hospital's primary function of providing patient care, the Hospital nevertheless maintains the same commercial interests in these facilities as are held by the management of retail stores and restaurants located in other types of establishments. Since there is no question that the Hospital would be entitled to prohibit solicitation and distribution in all public access areas of its cafeteria and gift shop were they located anywhere outside the Hospital premises, Marriott Corp. (Children's Inn), 223 NLRB No. 141; McDonald's Corp., 205 NLRB No. 78, we conclude that the Hospital does not lose that right simply because its public cafeteria and gift shop are part of a hospital complex rather than a shopping mall or drive-in restaurant.
24
557 F.2d at 1375.
25
Of course, there is not as much medical importance in maintaining the quietness or non-congestion of areas ordinarily as far removed from direct patient care as a public cafeteria or vending area,46 but such areas in a hospital are not totally devoid of medical significance. Respondent is correct in pointing out that these places are likely to be emotionally disturbing even if solicitation is prohibited. Such arguments, despite the attention paid to them in the parties' briefs,47 are, however, irrelevant to our analysis. The same exigencies of good medical care that require allowing the prohibition of solicitation in hospital corridors may or may not justify the same proscription in a particular hospital cafeteria, but we hold that whether or not a restaurant or shop is in a hospital, its proprietor can bar solicitation on the premises.
26
The line of precedent in both court and NLRB decisions permitting blanket no-solicitation rules in restaurants and shops is long and unequivocal.48 The essential rationale of these cases has been that as the success of such enterprises depends on attracting customers and thus on the congeniality of the atmosphere in their premises,49 it is reasonable to prohibit practices which tend to disturb or annoy.50
27
Respondents suggest that the precedents involving commercial establishments are inapposite here because unlike such institutions hospitals do not risk losing their "customers" due to the irritation of solicitation.51 While the principal business of retail establishments is attracting customers, a hospital's main concern it is argued is patient care, and its shops and cafeterias are no more than peripheral to its main operation. To the extent that this argument has any force whatsoever, it is wholly misplaced in this context. Whether or not patients and their visitors have choice about whether or not to use the hospital, they certainly have a choice about whether or not to use its cafeteria and vending machines. The cafeteria and vending area must still compete to attract the business of the hospital's patients. That a hospital is not "principally" in the restaurant business does not mean that it is not concerned that the restaurants which it does operate should be as attractive and profitable as possible. Public cafeterias in hospitals are operated as a convenience to its patients and their visitors and there is no justification for saddling them with restrictions, not applicable to cafeterias generally, that might from time to time compel them to operate at a loss. Assuming arguendo that a disturbance in the cafeteria would not significantly impede the hospital's health care, Baylor still has an independently valid interest in the profitable and orderly operation of its commercial food services which justifies barring solicitation in its restaurants.
28
It does not appear from the record, but it may be the case, that Baylor operates its cafeteria and vending machines as a non-profit service, so that in this respect it differs somewhat in its objectives from those of the usual restauranteur. Nevertheless, in providing its services, it has much the same interest, albeit non-financial, that any owner does in making his facilities as pleasant as possible. Whether the motive is monetary enrichment or enriching the overall quality of the hospital environment, employers who operate establishments whose raison d'etre is their pleasantness are justified in imposing otherwise overbroad no-solicitation rules. It is not the goal of making money, but of running a facility whose primary goal is to be attractive that supports the special treatment accorded to restaurants in this regard.
III
Conclusion
29
We recognize that the instant appeal in some ways presents a harder case than did the facts of the St. John's decision by the Tenth Circuit, in that Baylor has significantly fewer "employees only facilities" than did St. John's Hospital and Nursing School.52 Consequently, the extent to which the opportunity for union organization may be reduced by restricting solicitation to areas to which neither patients nor visitors have access may be greater than that sanctioned by the Tenth Circuit. We are, however, by no means confronted here with a situation in which there are no alternative channels through which the employees can communicate for purposes of organization. Where no such channels are available, an employer may be forced to permit solicitation where he otherwise could legitimately ban it.53 Perhaps in different circumstances a hospital would be compelled to allow solicitation in its cafeteria or even in some of its corridors. As regards the situation at Baylor, however, petitioner has testified that its rule does not apply to any area outside the hospital buildings,54 and it is apparent that the hospital's parking lots, lawns and gardens supply an excellent forum for solicitation. These areas are heavily used by employees, many of whom eat their meals and take their breaks there.55 Thus, despite the paucity of indoor areas available for solicitation, it is by no means the case particularly in light of the mild climate in Dallas, which makes the outside areas available virtually all year56 that the process of labor organizing would be crucially disadvantaged by limiting solicitation, for the most part, to the out-of-doors.
30
The mere fact that there are alternative channels available would not, of course, alone justify an otherwise illegal no-solicitation order, but at least when such channels are open, an employer need not modify an otherwise justifiable no-solicitation rule.57 The instant case may be somewhat harder than St. John's, but not so much so that the principle developed there must be abandoned because the employees are "uniquely handicapped in the matter of self-organization and concerted activity."58 We do not find that the minor added inconvenience of having to solicit in outdoor areas outweighs our congressionally directed solicitude to avoid disruptions in hospitals.
31
In conclusion, we note that before its St. John's ruling, the NLRB and the courts both agreed that the special circumstances presented by health care facilities demanded that they be treated differently from other industries under the NLRA.59 An agency is, of course, free to alter its policies,60 but the remarkably meager evidence available to the NLRB in the St. John's decision61 suggests that in reversing its earlier policies the Board in this instance may have had inadequate exposure to the special considerations involved in assessing the proper scope of labor solicitation in health facilities. It is true that one recent case has upheld the rule announced in St. John's NLRB order, NLRB v. Beth Israel Hospital, 554 F.2d 477 (1st Cir. 1977) cert. granted, 434 U.S. 1033, 98 S.Ct. 764, 54 L.Ed.2d 780 (1978), but even there the court was highly critical of applying this rule in broad terms62 and insisted on a case by case balancing test weighing the particular circumstances in individual hospitals as they came before the Board. The First Circuit emphasized that hospitals present "unique considerations that do not apply in industrial settings" and that "the Board should stand ready to revise its rulings if future experience demonstrates that the well-being of patients is in fact jeopardized."63 In this case we feel that petitioner has adequately demonstrated that the well-being of patients and visitors and the operation of the hospital would be jeopardized by allowing solicitation in the corridors and wherever else patients or visitors have access.
32
There is no need for further examination of the conditions at Baylor. Accordingly, we do not exercise our option to remand to the NLRB. Instead, we grant enforcement of its order only insofar as it covers those provisions unrelated to petitioner's no-solicitation rule and deny enforcement as to the remainder.
33
So ordered.
34
LEVENTHAL, Circuit Judge, concurring in part and dissenting in part:
35
The majority denies enforcement of a Board order invalidating the hospital's ban against solicitation and distribution of literature in the hospital corridors, cafeteria and vending areas. I concur in the majority opinion insofar as it applies to the hospital corridors. I cannot agree, however, that a rule barring these activities in the cafeteria and vending areas has been shown to be equally defensible. Since the Supreme Court will soon address this issue in another case,1 I will confine myself to a few brief remarks.
36
The general principle, established in Republic Aviation2 and other cases posits that rules prohibiting union solicitation on the employer's property during nonworking time are presumptively unreasonable and discriminatory. That rule is subject to an exception relied on by the majority, which develops the legality of no-solicitation rules in ordinary restaurants and shops.3 The rationale of these cases, as the majority notes, is the crucial importance of a congenial atmosphere to the success of the business. That is the justification of the exception.
37
The case at bar hospital cafeterias and vending machines does not present the same considerations as warranted the exception wrought for ordinary commercial restaurants. Their role and context is not the main business of a hospital but an ancillary convenience making refreshment available to staff and visitors (and to patients free to leave their rooms). The hospital cafeteria and vending areas are not in direct competition with ordinary restaurants for this trade. The time and place utility of a hospital cafeteria gives it advantages for custom not bestowed by the food and ambience.
38
To be sure, the hospital has a legitimate interest in a congenial atmosphere in its cafeteria but it is not the kind of live-or-die imperative that must be given recognition even though it undercuts the rights of employees protected by the general Republic principle.
39
The distinction I have delineated is reinforced, I think, when it is viewed in conjunction with the hospital's ban on solicitation in direct patient care areas and closely related locations, including corridors that are likely to be used for or involved in patient care, the central purpose of the hospital. I join the majority in upholding this aspect of the hospital's rule. But if, out of necessity, the law permits curtailment of employee rights (union activities) in certain sensitive areas, is there not a fairly correlative expectation of a certain receptivity to those rights and activities in other hospital locations?
40
In my view the statute does not fairly contemplate that a hospital can confine its employees to the closets, and deny them protection in the places most natural for talk that is not patient-related, by leaning on the exception wrought for commercial enterprises to ensure survival.
41
The Board acted reasonably and with sufficient basis in the record when it concluded that solicitation in such locations as cafeterias and vending machines would not significantly undercut the therapeutic functioning of the hospital. It is only in the most general and non-critical sense that "patient care" is rendered in these areas. They are basically retreats, where patients, staff, and visitors may withdraw from immediate contact with patient care areas. They are natural places for employees to talk about matters of mutual concern such as unions.
42
I respectfully dissent from that portion of the majority opinion which holds that the Board was not authorized to protect such talk in these cafeteria and vending areas.
1
The hearings in the consolidated cases No. 16-CA-5888, 16-CA-6050, and 16-CA-6206 were held on November 4, 5, 6, 1975
2
Baylor has complied with the NLRB order in every respect except for the portion relating to the no-solicitation and no-distribution rule
3
The no-distribution aspect of Baylor's rule will not be discussed per se. If solicitation can be banned, so a fortiori may distribution, raising as it does the additional problems of litter and general cluttering, see Stoddard-Quirk Mfg. Co., 138 NLRB 615, 620-621 (1962)
4
This locker room contains no more than 350 lockers, whereas there are some 3,700 employees at Baylor
5
This rule was "clarified" on June 21, 1975 by the posting of the following rule:
Solicitation of patients or visitors by anyone for any purpose on Baylor University Medical Center property is strictly prohibited. Solicitation of employees of Baylor University Medical Center by non-employees or the distribution of literature, pamphlets or other material, by non-employees on Baylor University Medical Center property is prohibited.
Unauthorized sales and solicitation of orders for any type of product or service to anyone on Medical Center Premises are prohibited.
Solicitation of employees at Baylor University Medical Center by other employees or distribution of literature between employees is prohibited during work time or in work areas. The term "work area" includes patient care floors, hallways, elevators, conference rooms and places where employees confer on business, or any other area such as laboratories, surgery or treatment centers, where any type of service is being administered to or on behalf of patients and also includes any areas where persons visiting patients may be disturbed. Service to our patients and their visitors includes not only primary and acute medical care, but also food service and psychological support.
The Hearing Examiner had both rules before him in considering the case.
6
The NLRB Fanning, Penello and Walther members said nothing in their decision except that "the Board has considered the record and the attached decision in light of the exceptions and briefs and has decided to affirm the rulings, finding and conclusions of the (Hearing Examiner) and to adopt his recommended order." J.A. at 27
7
J.A. 27-28
8
See Republic Aviation Corp. v. NLRB, 324 U.S. 793, 65 S.Ct. 982, 89 L.Ed. 1372 (1945); D'Yourville Manor, Lowell, Mass. v. NLRB, 526 F.2d 3 (1st Cir. 1975)
9
The Hearing Examiner adopted the language of the NLRB in its St. John's Hospital and School of Nursing, Inc., 22 NLRB No. 182, 91 LRRM 1333 (1976):
We recognize that the primary function of a hospital is patient care and that a tranquil atmosphere is essential to the carrying out of that function. In order to provide this atmosphere, hospitals may be justified in imposing somewhat more stringent prohibitions on solicitation then (sic ) are generally permitted.
J.A. at 21.
10
Cf. NLRB v. Truck Drivers Local Union # 449, 353 U.S. 81, 97, 77 S.Ct. 643, 11 L.Ed.2d 676 (1957); Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 61 S.Ct. 845, 85 L.Ed. 1271 (1941)
11
The Hearing Examiner commented: "The Board's decision in the St. John's case is controlling here." J.A. at 22
12
See, e. g., St. John's Hospital and School of Nursing v. NLRB, 557 F.2d 1368, 1372-73 (10th Cir. 1977) ("This distinction between strictly patient care areas and other patient access areas based on the relative conditions of the patients frequenting those areas finds no support in the record. . . . Moreover, this distinction is difficult of application at best and indeed has been rejected by the Board in a similar context as 'specious.' ")
13
NLRB v. Pipefitters, 429 U.S. 507, 97 S.Ct. 891, 51 L.Ed.2d 891 (1977); S. H. Camp & Co. v. NLRB, 160 F.2d 519 (6th Cir. 1947); 29 U.S.C. § 160(e), (f) (1970)
14
NLRB v. J. Weingarten, Inc., 420 U.S. 251, 266, 95 S.Ct. 959, 43 L.Ed.2d 171, quoting NLRB v. Erie Resistor Corp., 373 U.S. 221, 236, 83 S.Ct. 1139, 10 L.Ed.2d 308 (1963); Phelps Dodge Corp. v. NLRB, supra note 10
15
St. John's Hospital and School of Nursing v. NLRB, supra note 12, 557 F.2d at 1373 (". . . the Board's own perceptions of modern hospital care and the physical, mental, and emotional conditions of hospital patients areas outside the Board's acknowledged field of expertise in labor/management relations.")
16
Cf. NLRB v. Universal Camera Corp., 190 F.2d 429, 432 (2d Cir. 1951) (Frank, J., concurring); Winter, Judicial Review of Agency Decisions: The Labor Board and the Court, 1968 Sup.Ct.Rev. 53-69
17
Brooks v. NLRB, 538 F.2d 260, 261 (9th Cir. 1976); NLRB v. Walton Mfg. Co., 369 U.S. 404, 405, 82 S.Ct. 853, 7 L.Ed.2d 829 (1962)
18
The amendments to the NLRA which brought voluntary non-profit hospitals under the scope of the NLRA are contained in Public Law 93-360, 88 Stat. 395 (July 26, 1974)
19
See generally, Vernon, Labor Relations in the Health Care Field Under the 1974 Amendment to the NLRA: An Overview and Analysis, 70 Nw.U.L.Rev. 202, 202 (1975)
20
The 1974 Amendments included a series of provisions seeking to discourage strikes and requiring advanced notice of them, July 26, 1974, Pub.L. 93-360, § 1(b)-(e), 88 Stat. 395, 396 (codified at 29 U.S.C. § 158(d), (g) (Supp. V 1975))
21
See, e. g., St. John's Hospital and School of Nursing, supra note 12, 557 F.2d at 1374
22
See generally, id
23
No-solicitation rules have long been analyzed in terms of balancing the property rights of the employer and the organizational rights of the employees, see, e. g., NLRB v. United Steelworkers of America, 357 U.S. 357, 78 S.Ct. 1268, 2 L.Ed.2d 1383 (1957); NLRB v. The Babcock and Wilcox Co., 351 U.S. 105, 76 S.Ct. 679, 100 L.Ed. 975 (1956). In this case, it is not the non-profit employer but rather its patients whose interests are in conflict with those of the employees
24
See St. John's Hospital and School of Nursing, supra note 12, 557 F.2d at 1371 ("A cautious judgment in such regard must note that error in such judgment may cause irreparable damage to patients, and thus to the public, while error in the other direction can be salvaged by the Board under proper use of its overall expertise in labor matters.")
25
Petitioner's Brief at 10-11
26
Testimony of Mr. Howard M. Chase, Associate Executive Director of Baylor, J.A. at 161
27
See NLRB v. Beth Israel Hospital, 554 F.2d 477, 482 (1st Cir. 1977), cert. granted, --- U.S. ---, 98 S.Ct. 764, 54 L.Ed.2d 780 (1978)
28
Respondent's Brief at 4-6
29
Compare NLRB v. Stowe Spinning Co., 336 U.S. 226, 69 S.Ct. 541, 93 L.Ed. 638 (1949); Bonwit Teller, Inc. v. NLRB, 197 F.2d 640 (2d Cir. 1952), cert. denied, 345 U.S. 905, 73 S.Ct. 644, 97 L.Ed. 1342 (1953). Respondent points out that Baylor does allow solicitation for the United Fund and the American Cancer Society, as well as holding an occasional bake sale and benefit fair (a program designed to acquaint the employees with the benefits available to them). Respondent's Brief at 20-21; J.A. 173-181. The fact that Baylor permits such activities while banning other forms of solicitation does not, however, indicate illicit discrimination on the part of petitioner, as the solicitations which are permitted are manifestly non-disruptive and carefully controlled (the Cancer Society solicitation, for example, consisted only of a note included in each employee's paycheck) J.A. at 174, Testimony of Mr. Howard Chase. These solicitations are part of a normal hospital operation and all lack the emotionally disturbing aspect of union solicitation in that they could not conceivably raise fears in patients or visitors that they might not receive the best possible health care
30
J.A. at 312, testimony of Linda Hiatt, Director of Nurses in Truett Hospital (one of Baylor's wings)
31
J.A. at 155, Testimony of Mr. Howard Chase
32
J.A. at 169-170, Testimony of Mr. Jack Hays, Administrator of the Department of Physical Medicine, J.A. 293; Testimony of Linda Hiatt, J.A. at 313
33
J.A. at 182, Testimony of John Hicks, Administrator of Jonsson Hospital (one of Baylor's wings); J.A. 217, Testimony of William Rohloff
34
J.A. 193-194, Testimony of John Hicks; J.A. 159-160, Testimony of Howard Chase
35
J.A. 161, Testimony of Howard Chase
36
J.A. 310, Testimony of Linda Hiatt
37
J.A. 285-286, Testimony of Jack Hays
38
J.A. 265, Testimony of Dr. A. D. Sears, M.D. at Baylor
39
Petitioner's Brief at 10-18
40
See generally, NLRB v. Beth Israel Hospital, supra note 27, 554 F.2d at 482-83 n. 6 ("We would add that a phrase like 'immediate patient-care areas' is far from self-defining given the complexity of a major metropolitan hospital. Would a waiting area by the nurse's desk on a floor where patients reside be a 'patient-care area?' Would the waiting room in the emergency ward?")
41
J.A. 159-160, Testimony of Mr. Howard Chase
42
Respondent's Brief at 20 n. 15
43
J.A. 343, Testimony of Dr. A. D. Sears; J.A. at 209, Testimony of Dr. John Goodson, M.D. at Baylor
44
J.A. at 209, Testimony of Dr. John Goodson; J.A. at 255-256, Testimony of Joseph Gross, Director of Department of Pastoral Care at Baylor
45
J.A. 255, Testimony of Joseph Gross
46
There is no significant issue of impeding passage through the cafeteria or vending area though this might vary depending upon its location within a hospital. Those patients who venture to these places cannot legitimately expect that the same artificially restorative atmosphere created for them in the rest of the hospital will be sustained, though they can expect that some consideration will be given to such needs and that such areas will have the same protection against commotion and disturbance as similar areas outside hospitals
47
See Respondent's Brief at 22-24; Petitioner's Brief at 26-28
48
See, e. g., Marshall Field & Co. v. NLRB, 200 F.2d 375 (7th Cir. 1952, amended 1953); NLRB v. May Department Store Co., 154 F.2d 533 (8th Cir.), cert. denied, 329 U.S. 725, 67 S.Ct. 72, 91 L.Ed. 627 (1946); Marriott Corporation, 223 NLRB No. 141, 92 LRRM 1028 (1976); McDonalds of Palolo, 205 NLRB 404, 84 LRRM 1316 (1973)
49
See Marshall Field & Co. v. NLRB, supra note 48; May Department Store, supra note 48; Goldblatt Bros., Inc., 77 NLRB 1262, 1263-64 (1948)
50
The cases in general assume that solicitation will be disruptive and approach no-solicitation rules from the perspective of whether or not employees' right to organize requires that the attendant disruption be tolerated, see, e. g., Marshall Field & Co. v. NLRB, supra note 48
51
Respondent's Brief at 22-24
52
St. John's Hospital had an employees-only cafeteria in which it was estimated that 80% of the employees ate. There were also "numerous" other employees only areas such as lounges and locker rooms, 557 F.2d at 1375
53
See, e. g., Republic Aviation Corp. v. NLRB, supra note 8, 324 U.S. at 799, 65 S.Ct. 982, 89 L.Ed. 1372; NLRB v. Lake Superior Lumber Corp., 167 F.2d 147 (6th Cir. 1948)
54
J.A. at 129-130, Testimony of Howard Chase. Non-employee solicitors were barred from all Baylor property under its rule
55
J.A. at 324-325, Testimony of Mr. Howard Chase
56
J.A. at 324, Testimony of Mr. Howard Chase
57
The Board insists that the availability of alternative avenues of employee communication are irrelevant until the hospital has rebutted the presumptive illegality of its no-solicitation rule, see Respondent's Brief at 24-28; NLRB v. Magnavox Co. of Tennessee, 415 U.S. 322, 326-27, 94 S.Ct. 1099, 39 L.Ed.2d 358 (1974). This is a correct reading of the law, but as we find that "special circumstances" of the hospital environment have more than rebutted any such presumption, the Board's argument is without force in this particular case
58
Marshall Field & Co. v. NLRB, supra note 48, 200 F.2d at 381
59
See, e. g., Summit Nursing and Convalescent Home, 472 F.2d 1380 (6th Cir. 1973); Shorewood Manor Nursing Home, 217 N.L.R.B. No. 35, 89 L.R.R.M. 1037 (1975) (Penello, dissenting); Guyan Valley Hospital, 198 NLRB 107 (1972)
60
NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 347-52, 73 S.Ct. 287, 97 L.Ed. 377 (1953)
61
The St. John's case was submitted to the NLRB on six stipulations and no evidence was presented on the question of how distribution or solicitation would affect patients. Petitioner's Brief at 20
62
Petitioner aptly suggests that the First Circuit in relying on the NLRB ruling in St. John's Hospital could not have realized how scant the evidence on which that decision was based had been. Petitioner's Supplemental Reply Brief at 6
63
554 F.2d at 481
1
NLRB v. Beth Israel Hospital, 554 F.2d 477 (1st Cir. 1977), cert. granted sub nom. Beth Israel Hospital v. NLRB, 434 U.S. 1033, 98 S.Ct. 764, 54 L.Ed.2d 780 (1978). In Beth Israel, the First Circuit granted enforcement to that part of a Board order requiring the hospital to rescind its rule against distribution and solicitation in the hospital cafeteria and coffee shop
2
Republic Aviation Corp. v. NLRB, 324 U.S. 793, 65 S.Ct. 982, 89 L.Ed. 1372 (1945)
3
See majority opinion at --- - --- of 188 U.S.App.D.C., at 357-358 of 578 F.2d supra
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Subsets and Splits