text
stringlengths 1
1.21M
| meta
dict |
|---|---|
507 P.2d 365 (1973)
29 Utah 2d 189
N. D. THATCHER, Jr., et al., Plaintiffs and Respondents,
v.
WASATCH CHEMICAL COMPANY, a corporation, Defendant and Appellant.
No. 12933.
Supreme Court of Utah.
March 7, 1973.
Richard M. Mollinet, of Crawford, Hatch, Kirsch, Mollinet & Bates, Salt Lake City, for appellant.
Frank J. Allen, of Clyde, Mecham & Pratt, Salt Lake City, for respondents.
TUCKETT, Justice:
This action was filed by the plaintiffs to recover bonuses claimed to be due by them from the defendant. Other issues of law and fact raised by the pleadings were disposed of by stipulation prior to trial. After a trial was had on the remaining issues, the court found in favor of the plaintiffs and from that decision the defendant has brought the case here.
The defendant, Wasatch Chemical Company, is a Utah corporation and has been doing business in the state of Utah for a long period of time. The corporation was closely held and all of its stock was owned by the Thatcher family and the Bradshaw family with approximately 50 per cent of the shares owned by each of the families. For a number of years it had been the practice of the defendant corporation to award annual bonuses to deserving employees. The annual bonuses were awarded by the directors to the directors, officers and employees at the close of each of the company's fiscal years. It appears from the evidence that the company policy was to fix salaries on a conservative basis and to supplement the salaries by the giving of annual bonuses the amounts to be determined by the amount of income and profits earned by the corporation during the year. The plaintiffs were employed in the management of the corporation and had continued their employment from year to year with the understanding and expectation that their salaries would be augmented by an annual bonus.
*366 The net income and profits from business operations during the year 1966 were the highest in at least ten years. On April 20, 1967, the board of directors of the defendant unanimously adopted a resolution that the plaintiff Lawrence E. Thatcher be paid a bonus of $4,000, and the plaintiff Winston L. Thatcher a bonus of $2,000. The directors who approved the bonuses, together with their wives, represented a majority of the outstanding shares of capital stock of the defendant corporation. At a meeting of the board of directors held on July 7, 1967, a resolution was adopted which rescinded the prior action of the board in approving the bonuses. The court below found that the bonuses had been earned by the plaintiffs and that payment of the same was unlawfully withheld by the defendant.
It appears from the record that the plaintiffs rendered valuable services to the defendant with the understanding that they would receive proper compensation therefor.[1] We are of the opinion that the action of the trial court is amply supported by the record and the decision of that court is affirmed. Respondents are entitled to costs.
CALLISTER, C.J., and CROCKETT, J., concur.
HENRIOD, Justice (concurring):
I concur because it appears that over an extended period of time, the stockholders had approved and ratified, by silence or otherwise, the action pursued. Otherwise I would have some reservations, since generally the directors have no authority, without stockholder consent, to set either their salaries or any kind of fringe emoluments, including bonuses for themselves at Yuletide. On the other hand, the stockholders, particularly in a sort of family hassle as appears to be the case here, silently cannot consent to a practice that invites a procedural sense of security, only suddenly, without warning, effectively to rebel without some kind of notice.
ELLETT, Justice (dissenting):
I dissent.
The Thatcher family owned 50 per cent of the stock of the defendant. The other 50 per cent was owned by the Bradshaw family and J. Vernon Monson. Lawrence E. Thatcher was vice president and general manager of the defendant corporation, and Winston L. Thatcher was the secretary and manager of operations.
At a directors' meeting held April 20, 1967, Lawrence E. Thatcher moved that bonuses of $3,000 be awarded to himself and to Winston L. Thatcher and that $300 be awarded to each of the other directors who were not on the payroll. The motion was amended to give Lawrence E. Thatcher $4,000 and Winston L. Thatcher $2,000, and as amended it was unanimously adopted. Immediately thereafter Lawrence E. Thatcher and Winston L. Thatcher resigned from their respective offices in the defendant corporation. Before payment was made, the stockholders rescinded the purported bonuses by a vote of 2851.50 to 1110.50.
The minutes of the defendant show that small bonuses were given for the years 1947 through 1958. The minutes for the years 1959 through 1964 are silent on the matter, and presumably no bonuses were given for those years. Bonuses were given again in 1965 in the amount of not exceeding $300, and in 1966 bonuses of $1,000 were given to Lawrence E. Thatcher and Winston L. Thatcher. These bonuses were all given for past services and were nothing more than an attempted gratuity.
When a corporation adopts bylaws providing for regular bonuses or some form of profit sharing which is reasonably related to services to be rendered, it is binding when accepted by continued service.[1] The instant matter is not such a case. The granting of bonuses to themselves by the *367 directors of the appellant corporation was an attempt to give themselves extra pay for past services. There was no offer to be accepted. In fact, the immediate resignation of the respondents shows clearly that it was a mere gratuity. While the stockholders rescinded the bonus resolution before payments were made, there really was no need to do so. The better law is stated in 19 Am.Jur.2d, Corporations, § 1414, as follows:
There is authority that bonuses cannot be granted to officers or directors at least, as against the protest of stockholders by way of compensation for services already rendered gratuitously or by way of increased compensation for services already rendered for a prescribed compensation. Certainly, the directors cannot, in the absence of special authorization, vote themselves "back-pay" as compensation for services theretofore rendered or vote themselves retroactive increases of salary....
With regard to corporate employees, as distinguished from directors or officers, there is some authority that bonuses for past services paid to the employees, in addition to their fixed salaries, are unauthorized. However, according to other cases, the granting of a bonus to employees for services rendered in the past is not ultra vires where properly awarded. [Emphasis added.]
While our statute provides that the board of directors can fix the salary of directors,[2] giving a bonus is something else. An individual director, however, is disqualified from voting when he has a pecuniary interest in a resolution. The law on that point is stated in 19 C.J.S. Corporations § 805:
... Directors are precluded from fixing, increasing, or voting compensation to themselves for either past or future services by them as directors or officers, unless they are expressly authorized to do so by the charter or by the stockholders, ... The director who claims compensation for his services, being disqualified from voting on the question, if he is necessary to make up a quorum of the board, or if his vote is necessary to the result, the resolution will be void or voidable; ... Also where the interested director or officer presides at the meeting and in this manner controls its deliberations, the resolution is invalid. Where the directors vote themselves salaries by means of different resolutions, or by voting on the same resolution in parts, the fact that each director refrained from voting on the resolution fixing his own salary will not validate the transaction... .
See Angelus Securities Corporation v. Ball, 20 Cal. App.2d 423, 67 P.2d 152 (Cal. App. 1937); Adams v. Mid-West Chevrolet Corporation, 198 Okl. 461, 179 P.2d 147 (Okl. 1946); and Polychronis v. Palace Meat & Grocery Company, 102 Utah 201, 129 P.2d 879 (1942).
In the case of Wonderful Group Mining Co. v. Rand[3] it was held that a resolution of the trustees (directors) of the plaintiff corporation granting compensation to themselves was void, and plaintiff corporation was permitted to recover judgment for the amount of money which had been paid pursuant to the void resolution. The trustees attempted to evade the law by severing the motions and having each member refrain from voting on his particular matter. In holding the scheme void, the court said:
Granting that the board of trustees might compensate officers, but not trustees, for past services, it is the rule that where concerted action of this kind is taken the passing of a resolution awarding such pay must be had without the vote of any one pecuniarily interested in the resolution. The board of trustees consisting of five members, it was necessary for three disinterested members to vote for the passage of each resolution. The record shows that of the four voting *368 for each resolution three were pecuniarily interested in the general scheme, although the scheme was divided into three resolutions... .
In the instant matter the resolution in question gave to each director not on the payroll a bonus of not less than $300. Each such director was disqualified from voting on the resolution and, therefore, it was void absent a showing that a majority of the directors were on the payroll. Besides, the resolution was rescinded by the stockholders before payment was made.
I would reverse the case and award costs to the appellant.
NOTES
[1] Church v. Harnit, 6 Cir., 35 F.2d 499.
[1] Zwolanek v. Baker Mfg. Co., 150 Wis. 517, 137 N.W. 769 (1912).
[2] Sec. 16-10-33, U.C.A. 1953 (Replacement Vol. 2).
[3] 111 Wash. 557, 191 P. 631, 633 (1920).
| {
"pile_set_name": "FreeLaw"
} |
125 Cal.App.2d 450 (1954)
JOHN FOWLER, Appellant,
v.
SHELBY C. BROWN et al., Respondents.
Civ. No. 19763.
California Court of Appeals. Second Dist., Div. One.
May 24, 1954.
Desmond & Desmond for Appellant.
Demler & Eckert, Edison J. Demler and Charles E. Samuel for Respondents.
DRAPEAU, J.
Plaintiff and the defendant Gladys M. Brown were owners of real property in Long Beach. On May 3, 1949, they entered into an escrow agreement by the terms of which it was agreed that defendant Brown would exchange her 10-unit apartment building having a value of $59,500, subject to an encumbrance of $32,500, for two parcels of property of plaintiff: (1) a duplex worth $10,000; and (2) a single family dwelling valued at $10,000 subject to an encumbrance of $2,000; plaintiff to execute a promissory note for $9,000 to equalize the values of the properties.
Defendant Burcaw, a licensed real estate broker, represented both parties to the transaction.
Plaintiff's Parcel 1 was subject to rent control; Parcel 2 was not. Defendants Burcaw and Mrs. Brown told plaintiff that the apartment building was free from rent control and that it produced a net income of $220 per month.
The complaint alleges that these representations were false, were known to defendants to be false and were made with the intent that plaintiff should rely upon them; that he did so rely and entered into the instant transaction with no knowledge of their falsity, all to his damage. An amended complaint was filed which alleges as a second cause of action that such representations were made "under a misapprehension *452 of the rent control laws by plaintiff and the said defendants."
In the meanwhile, the exchange of properties was completed, plaintiff paid certain fees and expenses, and early in December of 1949 he discovered that with the exception of one apartment (owner occupied) the apartment building was subject to rent control, and had a maximum total net income of $103.50 per month.
Subsequently, plaintiff was compelled to refund to tenants certain amounts as overcharges made during the period from the close of escrow on July 22, to December 6, 1949.
On January 9, 1950, plaintiff gave notice of rescission, tendering to defendants the return of the apartment building and demanding return of his two parcels of land and the cancellation of the $9,000 promissory note.
As above noted, the instant action in rescission, or in the alternative for damages, is grounded on fraud and mistake of law.
From an adverse judgment, plaintiff prosecutes this appeal. It is here contended that there is no substantial evidence in the record to support the trial court's findings:
(1) That there was no fraud on the part of respondent, and
(2) That there was no mistake of law in the transaction between the parties.
The record herein discloses that when Mrs. Brown listed her apartment building with him in January of 1949, respondent Burcaw checked with the O.P.A. and was told that the place was not registered. He therefore assumed it was not controlled, and the escrow for the exchange was opened with that understanding. Apartment 5 was owner-occupied prior to the exchange and was free of control.
On May 11 of that year, Mrs. Brown at the request of the rental authorities conferred with Mr. Elmore Wilcox of O.P.A. He told her that the property should have been registered and gave her forms to fill out. Upon learning that Apartment 6 had been rented in January of 1947, he told Mrs. Brown that it was subject to rent control. Mr. Wilcox testified that Mrs. Brown then told him that all accommodations, except Apartment 6, were rented after February 1, 1947. She executed and filed registration statements that all the other apartments were rented for the first time on February 9, 1947.
However, Mrs. Brown testified that she did not rent all of *453 these eight apartments: 1, 2, 3, 4, 7, 8, 9, 10, on the same day; that "Maybe one would be one day before or after. Some people took the apartment and didn't move in for a month." Mrs. Brown further testified that she did not believe the building was completed before February 1st because "We had the statements from the workmen that they worked in there after February the first. There were affidavits signed by the workmen and we didn't feel that it was (completed)."
At this point, O.P.A. terminated its inquiry for the time being.
It was stipulated between the parties hereto that "the rent laws and regulations then in effect provided that construction which was completed after February 1, 1947 was not subject to rent control."
After the May 11 conference, Mrs. Brown told Mr. Burcaw that Apartment 6 had been frozen by O.P.A. Mr. Burcaw called plaintiff's friend, Mr. Gibbon, a real estate agent who was associated in the exchange, and told him "he had better come over as I thought the deal was gone." He then met plaintiff and Mr. Gibbon and discussed the threat of control over the other apartments. Next Mr. Burcaw went to the Long Beach office of O.P.A. where he was told by Assistant Director Jolly that the whole matter hinged on the date of completion of the building. The notice of completion had been filed before February 1, 1947. Burcaw discussed this with Jolly. Neither was able to determine what constituted completion under O.P.A. regulations. As a result, Mr. Burcaw went to San Francisco on May 13 to see if he could find out. At that time, he did not know when the utilities were turned on or when the apartments other than 5 and 6 were first occupied. However, he informed the O.P.A. that affidavits could be obtained from contractors to the effect that certain work in the building had not been completed on February 1, 1947.
With this information at hand, the legal department of the O.P.A. in San Francisco gave Mr. Burcaw its oral opinion that the building was not controlled. He telephoned this information to Mrs. Brown, who in turn relayed it to plaintiff.
The escrow which was opened on May 3rd was not closed until July 22, 1949. Meanwhile, in June, 1949, Mrs. Brown was again called by Mr. Wilcox to his office for further discussion. Prior to this, she had submitted the affidavits of the contractors heretofore referred to. Because of conflicting *454 statements received by his office as to the date of completion of the building, Mr. Wilcox had continued his investigation. As a result it was determined by O.P.A. that the building had been completed before February 1, 1947, and was therefore subject to rent control. At this conference in June, Mr. Wilcox so informed Mrs. Brown. He also recommended the institution of suit against her to recover treble damages for overcharges of rentals to tenants. At a much later date this suit was settled by consent judgment for the actual amount of rent overpaid.
In reply to the question of plaintiff's counsel, whether she had told Mr. Fowler, or Mr. Burcaw had told Mr. Fowler during pendency of the escrow regarding determination of O.P.A. that all of the apartments were controlled except Apartment 5, Mrs. Brown stated:
"No, I never told Mr. Fowler. I was with Mr. Burcaw in his place of business and we discussed it. Mr. Burcaw discussed the O.P.A. trial, or the trouble, with Mr. Fowler, and Mr. Fowler said, 'Well, you go right down and fight them, I am right behind you.' He said, 'I beat them once.' ... Mr. Desmond: Do you remember if this was before the escrow closed, or after? A. Long before."
Mr. Burcaw went to San Francisco on May 13, 1949. Both Mrs. Brown and Mr. Fowler knew about this trip and what it was for. With respect to this, Mr. Fowler testified: "Yes, I knew at the time Mr. Burcaw went to San Francisco that the O.P.A. was claiming there was control on this whole building. I am speaking of 1929 Magnolia Avenue, the property of Mrs. Brown. That is what the O.P.A. wanted to make out and then the affidavits were to overcome that. ... The O.P.A. wanted to claim they were all frozen and the affidavits were to overcome that. Q. You knew of all that? A. I knew that. Q. You further knew, that being the case, the O.P.A. claimed that the place was under control and that Mr. Burcaw went to San Francisco to try to overcome that claim, you knew that, didn't you? A. Yes. Q. Did you ever go down to the O.P.A., Mr. Fowler. and ask them what the facts were on the case? A. No. I never went to the O.P.A. because Mr. Burcaw said, 'Now, we have put the affidavits in and everything is in the clear.' ... As I recall it, it was a question of whether or not the one apartment being frozen would automatically freeze all of them, that was the point that I know was discussed with Mr. Burcaw and myself. ... Q. And in taking the trip to San *455 Francisco, he was to see if the affidavits would keep the rest of them from being controlled? A. Yes. ... Q. Did you make any effort to find out what the O.P.A. claimed? A. No, I took Mr. Burcaw's word for it."
On July 7, 1949, the parties discussed the possibility of the O.P.A. coming in at some future time and imposing rent control, or decreasing the rent by some form of governmental action. On that day the following instrument was executed and made a part of the escrow agreement:
"It is understood between the parties hereto that one of the apartments at 1929 Magnolia Avenue, Long Beach, California, is O.P.A. controlled and that all other apartments are at this time decontrolled. It is agreed that should at any time the O.P.A. step in and lower the rentals, thereby decreasing the present income of the property, the seller, Gladys May Brown, shall be relieved of any and all responsibility therewith. However, should these decreased rents be retroactive, the seller of said property herein agrees to make all rebates up to the close of escrow."
On July 22, the day the escrow was closed, another escrow supplement provided that Mrs. Brown should pay Mr. Fowler $15 per month until July 30, 1950, or the end of rent control, to make up for the loss of rent on Apartment 6, which was then controlled.
On December 5, 1949, Mr. Fowler discovered that the entire property was controlled, and on December 7th he made a refund of all charges over the rent ceilings during his period of ownership, to wit: the sum of $384.50.
It was stipulated at the trial that, "As a result of a rent ceiling being established on the premises up to the end of rent control, Mr. Fowler sustained a loss of $212"; this being the difference between what he was charging and what he was thereafter permitted to charge.
Appellant's position is that respondent Brown was under obligation to avoid an act of fraudulent concealment by a full disclosure to him of the factual developments of her conferences with Mr. Wilcox of the O.P.A. In support of this, appellant cites Dyke v. Zaiser, 80 Cal.App.2d 639, 653 [182 P.2d 344], where it is said:
"Many cases have been cited where it has been held that a man is not necessarily required to state everything he knows about the property involved. The present tendency, however, is to class concealment as actual fraud in those cases where the seller knows of facts which materially affect the *456 desirability of the property which he knows are unknown to the buyer."
Based upon the evidence, of which the above is a brief resume, the trial court made the following findings which appellant urges are unsupported by the evidence:
"It is not true that defendants falsely or fraudulently represented to plaintiff that Parcel 3 was free from control under the Federal Housing or Rent Acts; that instead it is true (1) that at all times during the negotiations between the parties defendants earnestly were of the belief that said parcel was free from such control (2) that such belief ... was reasonably founded, and (3) that when the dispute arose between the defendants and the officials of the Office of Price Administration defendants fully disclosed to plaintiff the nature and all aspects of such dispute and plaintiff was thereby as fully apprised of such dispute and of the reasons for the view of said officials as were the defendants. ..."
"It is true that plaintiff and defendants understood the provisions of said rent control laws applicable to said parcel and were aware of the provision that said laws applied to apartment houses completed prior to February 1, 1947, but they were mistaken as to some of the incidents which the officials of the O.P.A. might take into account when determining whether an apartment house was or was not completed prior to February 1, 1947. It is true (1) that at the time said properties were exchanged and the escrow closed the officials of the O.P.A. had not ruled that said apartment house was subject to control and defendants were then earnestly and reasonably of the belief that said apartment house was free from control; (2) that after the said exchange of properties and the close of said escrow the officials of O.P.A. obtained additional information and thereupon ruled that said apartment house was subject to control; and (3) that defendants in all their discussions with the officials of O.P.A. fully and truthfully answered all queries of said officials and in addition thereto fully and truthfully disclosed to said officials such further and additional information as defendants earnestly and reasonably believed might be pertinent to the consideration as to whether said apartment was or was not subject to control."
[1] As recently stated by this court in Morand v. Seaside Memorial Hospital, 121 Cal.App.2d 745, 746 [264 P.2d 96]:
"The trial court's findings are conclusive on appeal if there is substantial evidence to support them. [2] An appellate *457 court will view the evidence in the light most favorable to the respondent; will not weigh the evidence, and will indulge all intendments and reasonable inferences which favor sustaining the finding of the trier of fact."
[3] While it is true that respondent Brown, when interrogated during the trial was unable to remember many details of the exchange transaction, that in and of itself is insufficient to charge her with bad faith.
[4] "Misstatement or suppression of facts is not fraudulent unless motivated by an intent to deceive or to induce another to enter into a contract (Civ. Code, 1572), or unless it amounts to a breach of duty ( 1573). The question of actual fraud is always one of fact. (Civ. Code, 1574.)" Mesmer v. White, 121 Cal.App.2d 665, 671 [264 P.2d 60].
[5] It is clearly shown by the record that a bona fide dispute existed between respondent and the O.P.A., and that appellant was well aware of it. The trial court found that both parties "understood the provisions of said rent control laws." The dispute involved a factual issue, i.e., whether the law applied to a certain set of facts.
This court is of the opinion that the evidence amply supports the findings complained of.
The judgment is affirmed.
White, P. J., and Doran, J., concurred.
| {
"pile_set_name": "FreeLaw"
} |
COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Elder and Annunziata
Argued at Richmond, Virginia
WENDY COLLINS (ALEXANDER)
v. Record No. 0168-95-2 MEMORANDUM OPINION * BY
JUDGE ROSEMARIE ANNUNZIATA
CHARLES ALEXANDER, IV OCTOBER 24, 1995
FROM THE CIRCUIT COURT OF ALBEMARLE COUNTY
Paul M. Peatross, Judge
Joan C. McKenna (Rae H. Ely; Rae H. Ely and
Associates, on briefs), for appellant.
John K. Taggart, III (Patricia D. McGraw;
Tremblay & Smith, on brief), for appellee.
This matter arises as a result of this Court's reversal and
remand in the case of Alexander v. Alexander, 12 Va. App. 691,
406 S.E.2d 666 (1991). The original case was initiated by Wendy
Collins (Alexander) (mother) who, in April 1989, filed a Motion
to Show Cause for Failure to Pay Child Support as ordered in the
final decree of divorce entered on May 2, 1986. Charles
Alexander, IV (father) in turn filed a Motion to Terminate
Support. On remand for further proceedings on the issue of child
support, the trial court was to determine the presumptive amount
of support and enter written findings explaining any deviation
made from the guidelines amount. Accordingly, a hearing ore
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
- 1 -
tenus on the issue of the 1989 child support obligation was held
in August 1994. By final order entered on September 12, 1994,
the court modified support, retroactive to July 1, 1989. Under
that order, neither party was obligated to pay child support to
the other. The mother subsequently filed a Motion to Rehear
alleging that the father had fraudulently misrepresented his
income for 1989; the motion was denied. Finding no error in the
proceedings, the trial court's decision as reflected in its order
of September 12, 1994 is affirmed.
The mother contends that the trial court erred in ordering a
modification of support retroactive to July 1, 1989. This claim
is without merit. The effect of this Court's reversal and remand
was to restore the parties to their original position. Nassif v.
The Board of Supervisors, 231 Va. 472, 480, 345 S.E.2d 520, 525
(1986). Under Code § 20-108, support "may be modified with
respect to any period during which there is a pending petition
for modification, but only from the date that notice of such
petition has been given to the responding party." "[W]hether to
make modification of a support order effective during a period
when a petition is pending is entirely within the discretion of
the trial court." O'Brien v. Rose, 14 Va. App. 960, 965, 420
S.E.2d 246, 249 (1992).
The record reveals that the husband filed his motion to
terminate child support on June 6, 1989 and served a copy on the
mother. She was provided with notice of the father's motion to
- 2 -
terminate support as of July 1, 1989. Thus, the trial court did
not abuse its discretion in deciding to terminate support as of
the filing date of the father's petition. Id.
Moreover, the termination of support retroactive to July 1,
1989 is not barred by the doctrine of laches as the mother
asserts. "'Laches is such neglect or omission to do what one
should do as warrants the presumption that he has abandoned his
claim, and declines to assert his right.'" Pittman v. Pittman,
208 Va. 476, 479, 158 S.E.2d 746, 749 (1968) (citation omitted).
The father was under no obligation to reinstate the case on
remand within a specified time period. Indeed, either party
could have initiated the proceeding. Furthermore, the evidence
fails to show any material change which would justify the
application of the doctrine. See Pretlow v. Pretlow, 177 Va.
535, 552, 14 S.E.2d 381, 387 (1941).
The mother further assigns as grounds for reversal the
father's failure to produce evidence of his 1989 income to
support the trial court's determination of the presumptive amount
of support. She contends that the court therefore erred in
denying her motion to strike and in entering an order terminating
support. There is no merit in either position. It is clear that
the father produced evidence at both the October 1989 and August
1994 hearings that his 1989 income was approximately $5,200 a
month.
The mother next contends that the father's evidence of
- 3 -
income was fraudulent and that the trial court erred in refusing
to conduct an additional hearing based on these allegations.
"After a court has concluded an evidentiary hearing 'during which
each party had ample opportunity to present evidence, it [is]
within the court's discretion to refuse to take further evidence
on this subject.' In order to demonstrate an entitlement to a
rehearing, a petitioner must show either an 'error on the face of
the record, or . . . some legal excuse for his failure to present
his full defense at or before the time of entry of the decree.'"
Holmes v. Holmes, 7 Va. App. 472, 480, 375 S.E.2d 387, 392
(1988) (citations omitted). Moreover, fraud must be established
"'not by doubtful and inconclusive evidence, but clearly and
conclusively.'" Aviles v. Aviles, 14 Va. App. 360, 366, 416
S.E.2d 716, 719 (1992) (citation omitted).
The record discloses that, while counsel for mother alleged
surprise at father's testimony concerning his income, she
cross-examined him using the 1989 income tax returns which she
had in her possession. When the father hesitated to verify one
of the unsigned tax returns, counsel failed to produce her copy
of the certification of authenticity signed by father's
accountant in response. Counsel also subpoenaed the father's
accountant as a witness for the August 1994 hearing, presumably
to testify to the father's income, but then released him without
calling him. On these facts, we cannot find that the trial court
abused its discretion in refusing to conduct the requested
- 4 -
hearing.
The mother's last contention that the trial court failed to
justify its decision to deviate from the child support guidelines
and erroneously refused to enforce the parties' agreement as
incorporated into the divorce decree is likewise not supported in
the record.
It is well established that while parties may contract to
provide child support in a manner other than that provided by the
statutory guidelines, the trial court must determine "whether the
agreed provisions for the child would better serve the interest
or 'equities' for the parents and children." Watkinson v.
Henley, 13 Va. App. 151, 158, 409 S.E.2d 470, 474 (1991). A
court cannot be precluded by the parents' agreement from
exercising its power to decree child support. Kelley v. Kelley,
248 Va. 295, 298, 440 S.E.2d 55, 56 (1994).
It is also clear that because "there exists a rebuttable
presumption that the amount of the award as determined by the
application of the statutory child support guidelines is the
correct amount . . . [i]n [a] . . . proceeding [to determine
child support] . . . a trial court must first determine the
presumptive amount of child support before considering any other
factors." Alexander v. Alexander, 12 Va. App. 691, 695, 406
S.E.2d 666, 667 (1991).
Whenever a child support award varies from
the guidelines, Code § 20-108.2(A) requires
the trial court to make written findings of
fact "as determined by relevant evidence
pertaining to the factors set out in
- 5 -
§§ 20-107.2 and 20-108.1" explaining why one
or more of these factors would make it
"unjust or inappropriate" to apply the
guidelines to the case.
Richardson v. Richardson, 12 Va. App. 18, 21-22, 401 S.E.2d 894,
896 (1991).
In accordance with these mandates and based upon the
parties' 1989 income, the trial court determined that the mother
was obligated under the guidelines to pay the father $242.83 a
month in child support. The trial court found it appropriate to
deviate from the guidelines and gave specific reasons for its
decision. He found that under the agreement the father paid
mother $1,000 a month as support so that she could maintain
housing and visit the children. However, the court also found
that the mother did not use the support for those purposes. The
court further found that, while the guidelines required the
mother to pay child support to the father for the last remaining
infant daughter, a deviation was justified to provide the mother
with funds to be used in her attempt to repair the relationship
with that child. The trial court is not required by law to
simply adopt the parties' agreement to provide child support;
such an agreement is but one factor, among many, for the court to
consider in making its award. See Richardson, 12 Va. App. at 20,
401 S.E.2d at 895.
As the justification for deviating from the guidelines and
child support amount is clearly set forth in the trial court's
ruling, the statutory requirements of Code § 20-108.1(B) were
- 6 -
satisfied.
In accordance with the reasons set forth by this Court, the
decision of the trial court is affirmed.
Affirmed.
- 7 -
| {
"pile_set_name": "FreeLaw"
} |
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
__________________
No. 96-40143
Conference Calendar
__________________
KEVIN G. OWENS,
Plaintiff-Appellant,
versus
R. STANLEY ET AL.,
Defendants-Appellees.
- - - - - - - - - -
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 6:95-CV-611
- - - - - - - - - -
June 27, 1996
Before HIGGINBOTHAM, BARKSDALE, and BENAVIDES, Circuit Judges.
PER CURIAM:*
The dismissal of the civil rights complaint filed by Texas
prisoner Kevin G. Owens, # 584509, is AFFIRMED. Owens's
disagreement with the medical treatment he received does not
establish a violation of his constitutional rights. Varnado v.
Lynaugh, 920 F.2d 320, 321 (5th Cir. 1991).
*
Pursuant to Local Rule 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 Local Rule
47.5.4.
No. 96-40143
-2-
Owens has filed in this court a "Motion to Amend Original
Complaint" which we DISMISS FOR LACK OF JURISDICTION. See FED.
R. CIV. P. 15.
AFFIRMED.
| {
"pile_set_name": "FreeLaw"
} |
614 F.Supp. 548 (1985)
CONTINENTAL STEEL CORP., et al., Plaintiffs,
v.
UNITED STATES, Defendant.
AMAX CHEMICAL, INC. and Kerr-McGee Chemical Corp., Plaintiffs,
v.
UNITED STATES, Defendant.
Court No. 84-05-00728.
United States Court of International Trade.
July 30, 1985.
*549 Wiley & Rein, Washington, D.C. (Charles Owen Verrill, Jr., James M. Johnstone, Robert E. Nielsen and William B. Baker, Washington, D.C.), for plaintiffs Continental Steel Corp., Georgetown Steel Corp. and Raritan River Steel Co.
Fried, Frank, Harris, Shriver & Kampelman, Washington, D.C. (David E. Birenbaum and Alan G. Kashdan, Washington, D.C.), for plaintiff Atlantic Steel Co.
Drinker, Biddle & Reath, Washington, D.C. (W.N. Harrell Smith, Washington, D.C., and James S. Gkonos) for plaintiffs Amax Chemical, Inc. and Kerr-McGee Chemical Corp.
Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Washington, D.C. (Kevin C. Kennedy, Washington, D.C.), for defendant.
Wilmer, Cutler & Pickering, Washington, D.C., (C. Loring Jetton, Jr., John D. Greenwald, Deborah M. Levy, and Stephen J. Schnably, Washington, D.C.), for amicus curiae, American Textile Manufacturers Institute.
Opinion and Order
WATSON, Judge:
These consolidated actions were brought to challenge the conclusion of the International Trade Administration of the Department of Commerce (Commerce) that, as a matter of law, subsidies cannot be found in countries which have nonmarket economies.
In two countervailing duty investigations the challenged conclusion led Commerce to reach final determinations that manufacturers, producers, or exporters of carbon steel wire rod in Czechoslovakia and Poland were not receiving subsidies.[1] The same reasoning led Commerce to rescind the investigations into whether potassium chloride (potash) from the Soviet Union and the German Democratic Republic was being subsidized on the ground that the petitions did not allege the elements necessary for the imposition of countervailing duties.[2]
The Commerce Department defines a nonmarket economy as one which operates on principles of nonmarket cost or pricing structures so that sales or offers for sale of merchandise in that country, or to other countries, do not reflect the market value of the merchandise. In short, a nonmarket economy is said to be one in which the price of merchandise does not normally reflect its market value.
In the determinations in dispute the existence of nonmarket economies was found to be evidenced by central government control of prices, central government control of the allocation of resources and, in the case of the Soviet Union and the German Democratic Republic, extremely limited convertibility of the national currency.
The Commerce Department reasoning had four parts: First, it said that government activity in a nonmarket economy cannot confer a subsidy because a subsidy, by definition, means an act which distorts the operation of a market. In other words, for a subsidy to exist there must be a free market to provide an independent, essential reference point or benchmark for measuring whatever is allegedly a "subsidy" to a particular enterprise. Without the uncontrolled market there can be no subsidization.
Second, Commerce said that Congress has never confronted the question of whether the countervailing duty law applies to countries with nonmarket economies. Further, that this "silence," combined *550 with Congressional refinement and development of legal remedies other than the countervailing duty law for use with products from nonmarket economies, leaves the agency in the position of trying to determine what Congress would have done in this situation.
Third, the agency stated that the consensus of opinion in academic literature was that the countervailing duty law cannot be applied to countries with nonmarket economies.
Finally, the agency asserted a broad discretion to determine the existence or nonexistence of subsidies.
The plaintiffs have attacked the Commerce Department determinations as contrary to the plain meaning of the law, inconsistent with judicial interpretation and without support in legislative history.
The Court is of the opinion that the Commerce Department has made a basic error in its interpretation and administration of this law. The fundamental error of the Commerce Department is its premise that a subsidy can only exist in a market economy. Stated differently, it is completely at variance with the law to find that the acts at which the countervailing duty law was aimed, do not include the acts of a government of a country with a nonmarket economy.
It should be noted that these proceedings were governed by the countervailing duty law contained in 19 U.S.C. § 1303 because the countries producing the products which were the subject of these petitions were not countries "under the Agreement" within the meaning of 19 U.S.C. § 1671(b). This meant only that the assessment of countervailing duties would not require an injury determination if a "bounty" or "grant" was found to exist. In all other respects the language of both countervailing duty laws forms a seamless web and the terminology is used interchangeably.
The position taken by Commerce is at odds with the plain meaning and purpose of the law. It contradicts judicial interpretations of the law. It is inconsistent with past administration of the law. It also appears to be self-contradictory from its inception.
Taking the last point first, it appears that the Commerce Department recognizes that the countervailing duty law covers "any country," and does not allow per se exemptions from the law for any political entity. Nevertheless, Commerce goes on to posit what it calls an "additional jurisdictional question," namely, whether government activities in a nonmarket economy can confer a "bounty or grant" within the meaning of the law. If this was truly a "jurisdictional" question, a failure to meet the jurisdictional criteria of the law would indeed deprive the agency of authority to enforce the law beyond the determination of that point. That would amount to a per se exemption from the law (which Commerce claims it is not making) and would be in conflict with the plain statement that the law covers any country.
It should be obvious that the question of whether any country is bestowing a bounty or grant or a subsidy is the ultimate question on the merits of a petition. It is not a question which must first be answered in order to decide whether to initiate an investigation. Nor is it a question which can be answered in advance and in the abstract for countries with certain types of economies.
The simple fact is that the countervailing duty law makes no distinctions based on the form of any country's economy. Its language and purpose allow no such distinctions to be made.
The language of the law is so abundantly clear and its purpose so obvious that there is a danger of moving on too quickly to the complicated theoretical underpinnings of the determinations and, by sheer length of discussion, give them a weight which they do not deserve. Consequently, it is important to follow the basic principle, repeatedly stressed by the Supreme Court, that "in determining the scope of a statute, one is to look first at its language." North Dakota v. United States, 460 U.S. 300, 312, 103 S.Ct. 1095, 1102, 75 L.Ed.2d 77 (1983).
*551 The relevant language of the countervailing duty law, in 19 U.S.C. § 1303, reads as follows:
... Whenever any country, dependency, colony, province, or other political subdivision of government, person, partnership, association, cartel, or corporation, shall pay or bestow, directly or indirectly, any bounty or grant upon the manufacture or production or export of any article of merchandise manufactured or produced in such country, dependency, colony, province, or other political subdivision of government, then upon the importation of such article or merchandise into the United States, whether the same shall be imported directly from the country of production or otherwise, and whether such article or merchandise is imported in the same condition as when exported from the country of production or has been changed in condition by remanufacture or otherwise, there shall be levied and paid, in all such cases, in addition to any duties otherwise imposed, a duty equal to the net amount of such bounty or grant, however the same be paid or bestowed.
The Supreme Court has also said that, absent a clearly expressed legislative intention to the contrary, the language of a statute "must ordinarily be regarded as conclusive." Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980).
It would be difficult to conceive of statutory language which would be more comprehensive than the language of the countervailing duty law. It would be hard to write a law which would be more antagonistic to the making of artificial distinctions. On its face, the law shows a meticulous inclusiveness and an unswerving intention to cover all possible variations of the acts sought to be counterbalanced.
In the opinion of the Court the language of this law is perfectly indifferent to forms of economy. The language plainly shows the strongest possible desire to prevent evasion either by means of technicalities of status, or by technicalities of form, or by technicalities of relationship.
We have a law which uses ten exhaustive alternatives to describe the possible conveyor of the subsidy. As an alternative to "pay," which conceivably might be avoided by some other form of conveyance, it uses the general term "bestow." It specifically seeks out benefits given "directly or indirectly." The law takes pains to cover manufacture, production or export lest artificial distinctions be developed between levels of commercial activity. It goes on to specify that it controls in all conceivable methods of importation, whether the article in question is imported into the United States directly or otherwise and whether or not the article is changed in condition by re-manufacture or otherwise.
In the midst of this formidable demonstration of careful draftsmanship the law describes the fundamental thing which is paid or bestowed as "any bounty or grant."
The Supreme Court has stated that "a word of broader significance than `grant' could not have been used." Nicholas & Co. v. United States, 249 U.S. 34, 39, 39 S.Ct. 218, 220, 63 L.Ed. 461 (1919).
The use of the broadest possible language clearly demonstrates an intent to cover as many beneficial acts as possible. Justice Frankfurter has stated that the purpose of a law is often imbedded in the statute even if specific manifestations are not thought of, and that is "often the very reason for casting a statute in very general terms." F. Frankfurter, Some Reflections on the Reading of Statutes, reprinted in Sutherland Statutory Construction, Vol. 3, p. 423 (4th ed., 1972).
It should be noted at this point that the term "subsidy," which is now used in the law, has been explicitly stated by Congress to have "the same meaning as the term `bounty or grant' as that term is used in section 303 of this Act [19 U.S.C. § 1303]...." This means that the broadness of language and spirit has been carried forward without being diminished. The terms can be used interchangeably *552 with no difference in meaning, and are so used in this opinion.
Here we have a law written with great care to apply to all countries, using words of the broadest possible significance to describe the conduct whose effect it seeks to neutralize.
We have petitions which allege the existence of government programs in the countries involved which, in the abstract, would normally encourage the exportation of merchandise. These include providing a beneficial rate of currency exchange to the exporter, allowing exporting companies to keep a portion of the hard currency earned from their exports and providing tax exemptions based on export performance.
Against this formidable background the Court is asked to approve a monumental exception to the law, an exception which is based on nothing more than certain general economic characteristics attributed to the countries whose products are the subject of petitions.
In this context common sense is offended by a preemptive conclusion that subsidization is not possible because of some general economic characteristics of the exporting country. To avoid the overwhelming indications that the law be applied to all countries in all cases there would have to be some definitive exception for countries with nonmarket economies. This would be a major exemption from a remedial law and it should not be recognized unless it has been unequivocally made. Abbott Labs v. Portland Retail Druggists, 425 U.S. 1, 11, 12, 96 S.Ct. 1305, 1313, 1313, 47 L.Ed.2d 537 (1976).
With this in mind, the shortcomings of the administrative determinations are evident.
To be blunt, the Commerce Department determination attempts to amend the countervailing duty law. It passes over the plain meaning and manifest purpose of the law to institute, by administrative fiat, a major exception for countries with nonmarket economies. It does so by means of a redefinition of the term "subsidy". The redefinition is not in accordance with the language of the law and it is irrational and arbitrary.
The Commerce Department defines a subsidy as a distortion of the operation of a market economy. This is a novel definition. It depends on the premise that only in a market economy can a "distortion" exist because only in such an economy can the alleged subsidy be measured against what the normal or benchmark level of that particular element would be. This in turn presumes that there is no normality or "measurability" in a nonmarket economy, i.e., that central control makes any given economic decision unpredictable or atypical or irrational, so that one act cannot be characterized as more beneficial than another. Into this picture of economic irrationality the Commerce Department adds the additional fillip that even if "incentives" to production do exist in a nonmarket economy they are not beneficial in our sense of the word. They are assertedly some sort of ineffectual attempt to exercise control. They do not actually result in subsidization because the firms, lacking a profit motive and subject to centralized export controls, cannot respond to the incentives.
The determinations state that "even those incentives tied to export, some of which might be considered export subsidies in a market economy, do not, in our opinion, operate as export subsidies in an NME."[3]
This line of analytical legerdemain is developed as follows:
That the Czech government has introduced "economic mechanisms," for rewarding overfulfillment of targets, for rationalizing the use of imports, for promoting exports does not mean that Czech enterprises can respond to those incentives like a competitive firm in a market economy. These mechanisms are imposed upon a system that is not economically rational. Nor are the reforms *553 designed to lead to a rational, market system. Central planning remains the basis for defining the goals and operating conditions for the enterprises.
In this situation, "incentives" have a different meaning than in a market economy system. They are not distortions of market generated signals to competitive firms. They are imposed on a system to generate results: results that the nonmarket economy inherently cannot produce.[4]
The quoted passages are amalgams of economic jargon, semantic arbitrariness and unlawful irrationality. Decisions which depend on a premise that economic conduct is irrational or inherently ineffectual cannot be allowed. Economic behavior may be one of the few areas in which rationality and effectiveness can still be presumed in world affairs. Laws cannot be enforced if conduct to which they are directed is not taken at face value. The enforcement of laws requires the investigation of reality, not the formulation of theoretical obstacles.
Subsidization in one of its purest forms is the encouragement of exportation by means of some type of special preference.
The Commerce Department cannot say that such a preference is impossible in a nonmarket economy. It can only say that distortions of a "market" are not possible. This may be true but it does not eliminate the possibility of subsidization.
The Commerce Department reasoning suggests the absurd result that the more completely a government becomes involved in production and the more thoroughly it eliminates the possibility of internal reference to "market;" in short, the more perfectly it insulates production from normal economic reality the less likely it is to be "subsidizing."
Furthermore, there is no reason why this logic must be limited to nonmarket economies. A market economy government can conceivably eliminate the market context for the resources used by an industry it chooses to aid by totally controlling the production and sale of some important raw materials. Does it thereby eliminate the possibility of subsidization?
The Commerce Department's definition of subsidy includes language stating that a subsidy "results in a misallocation of resources, encouraging inefficient production and lessening world wealth."[5]
There is not the slightest indication in the law or the legislative history to show that the allocation of resources, the efficiency of production or the diminution of world wealth is a concern of the countervailing duty law.
The Commerce Department's definition sounds as if the countervailing duty law is being viewed as a means for influencing the way the wealth of the world is developed or the way other countries choose to allocate resources or organize production. This would be totally improper, and would be a dangerous distortion of the law. The countervailing duty law is not a tool of foreign policy.
The only purpose of the countervailing duty law is to extract the subsidies contained in merchandise entering the commerce of the United States in order to protect domestic industry from their effect. In this domestic purpose, its effectiveness is clearly intended to be complete and without exception.
The great irony of the Commerce Department's approach is that while it gives the countervailing duty law a grandiose, theoretical objective, it destroys a significant part of its practical domestic purpose.
The practical domestic purpose of the law is what must control. That purpose is plain. The Supreme Court has stated that this law "has no uncertainty of purpose." Nicholas & Co. v. United States, 249 U.S. 34, 39, 39 S.Ct. 218, 220, 63 L.Ed. 461 (1919). Congress has characterized the purpose as "assuring effective protection of domestic interests from foreign subsidies *554 ..." S.Rep. No. 93-1298, 93d Cong., 2d Sess. 183 (1974), U.S.Code Cong. & Admin.News 1974, pp. 7186, 7318. In conformity with this purpose the Courts have refused to allow narrow or restricted administrative interpretations to weaken the terms "bounty" or "grant." ASG Industries, Inc. v. United States, 67 C.C.P.A. 11, 18, C.A.D. 1237, 610 F.2d 770, 776 (1979). See also ASG Industries, Inc. v. United States, 82 Cust.Ct. 101, C.D. 4794, 467 F.Supp. 1200 (1979) (appeal dismissed). The purpose of the law does not allow distinctions or general exceptions based on the form of a country's economy. It requires enforcement of the law to the full extent of the agency's authority and ability.
The administrative determinations under review here also suggest that the concept of subsidy can have no meaning in a non-market economy because everything would become "subsidized." The Commerce department says that "to impose that concept where it has no meaning would force us to identify every government action as a subsidy. ..."[6]
The term "subsidy" as it applies in the export activity of a nonmarket economy does not present any real difficulties of "meaning." The subsidies alleged to exist here are not acts which are peculiar to nonmarket economies. If there are any difficulties here, they are not difficulties of meaning, but problems of measurement, which are precisely within the expertise of the agency.
Even if we anticipate problems of meaning in the event that more problematic domestic conduct of these countries becomes subject to scrutiny, it cannot be accepted that this arises from a congenital subsidizing character of all government acts in a nonmarket economy. In other words, it cannot be assumed that central economic control is synonymous with subsidization. This goes back to the fundamental misconception that it takes distortion of a "market" to make a subsidy.
The concept of subsidization is really much broader than that. If it has to be stated in terms of distortion then it is a distortion of a pattern of regularity or even a pattern of reasonably expected fairness. But these subtleties can be left for the future. For the moment, it is sufficient to say that the Commerce Department has the authority and ability to detect patterns of regularity and investigate beneficial deviations from those patterns and it must do so regardless of the form of the economy.
These administrative determinations display the attitude that historically has presumed a lack of differentiation in all undeveloped or unexplored areas of human knowledge. The countervailing duty law does not allow countries with nonmarket economies to remain terra incognita, blank areas which have no discernable details.
It must be said that all ongoing systems, be they molecular, biological, galactic, or economic, eventually reveal an organized pattern of activity or structure to the human mind. Pattern or structure is inherent in the continuation in existence of a stable or comprehensible unit. That is why, no matter what the environment, a reasonable understanding of its rules of normal operation will lead to recognition of the exceptional or "unfair" event.
All that will be needed in these cases is the ability to distinguish between the normal operation of central control and the exceptional or disproportionate or unfair event. It would be wrong for the Court to be more specific at this time about the method of detecting subsidies within a nonmarket economy. It is sufficient to state that it is not a meaningless effort. Its potential difficulties certainly do not justify the exception to the law sought to be made in this case.
Not all the dons of economic academia can persuade this Court that the government of a country with a nonmarket economy cannot show what amounts to favoritism towards the manufacture, production, *555 or export of particular merchandise. The idea violates common sense and conflicts with a rational construction of the law.
It is important to remember that the antidumping law presented an apparent difficulty in dealing with nonmarket economies because its plain language lacked a fundamental reference point needed to measure whether or not sales were being made at less than fair market value. The nonmarket economy did not have the fair home market value against which to measure the price to the United States. This did not deter the enforcing agency from developing that "fair" home market value by reference to surrogate countries with market economies, an administrative practice that was later expressly confirmed by incorporation into the Trade Act of 1974. See S.Rep. 93-1298, 93rd Cong.2d Sess. 174 (1974).
It is ironical to see that particular legislation cited by the government as evidence that Congress wanted the antidumping law, and not the countervailing duty law, to be the instrument for dealing with merchandise from nonmarket economies. The language of the antidumping law posed a far greater problem of application to nonmarket economies than the countervailing duty law. The language of the countervailing duty law, on the other hand, presented no such problem of application and the simplest implication of leaving it alone is that it needed no clarification to allow it to apply to all forms of economies.
It is even more ironical to see that the term "fair market value" whose "absence," in a literal sense, was overcome rather easily when it came to enforcing the antidumping law with respect to nonmarket economies, now turns up as the key term defining a nonmarket economy and obstructing the application of the countervailing duty law. The agency says that a subsidy needs a "market" and a market does not exist where there is no fair market value. But if the "absence" of a fair market value did not impede the enforcement of the antidumping law, in which it was a literal requirement, why is its absence an impediment to the enforcement of a law in which it is not even a named factor, but merely one of the possible guides to the detection or measurement of subsidies? In short, if a "perfect" fair market value is not needed to find dumping it is certainly not needed to find or measure subsidies.
The government has also argued that the passage of section 406 of the Trade Act of 1974 (19 U.S.C. § 2436) to protect U.S. industries from injurious market disruption due to sudden increases in imports from Communist countries represented a repudiation of the use of the countervailing duty law. This contention simply has no support in the language of the law or the legislative history. Section 406 is a separate remedy for separate circumstances. The potent specialized nature of the countervailing duty law is not affected by the existence of possible alternative remedies.
The history of the administration of the countervailing duty law does not show the development of any exceptions based on the degree of centralized control exercised by the government of the country of production. In fact, the law has been enforced in the past in circumstances in which central governments exercised a high degress of central control. Although the proceedings may not have involved nonmarket economies as the term is being currently used, the government of Csarist Russia exercised complete control over the sugar industry and the government of Nazi Germany controlled that economy to a very large extent. This did not prevent the imposition of countervailing duties on sugar from Russia[7] or on numerous products from Germany during the 1930's.[8]
*556 From this historical background we can conclude, at the very least, that variation in the extent of control exercised by the foreign government over the economy was not a factor impeding the enforcement of the law. These latest determinations are new developments by the administrative agency. In short, they have no weight of historical administrative practice behind them. If anything, the spirit of past administration goes the other way, as well it should, in the face of the all-inclusive power of the language of the law.
The plain meaning of the law is also not diminished by the government's attempt to patch together a contrary legislative expression from bits and pieces of other laws and later proposed legislation. The true meaning of the amendment to the antidumping duty law and the passage of section 406 of the Trade Act of 1974 has already been discussed.
The parties have also engaged in argument using recent statements by legislators, made in connection with the Trade and Tariff Act of 1984, or proposed trade legislation.
The short answer to the assertion that these shed light, one way or the other, on the question of the application of the countervailing duty law, is that Congress has explicitly stated only one certain opinion on this subject in the Conference Report on the Trade and Tariff Act of 1984 namely: that the issue is under judicial review.[9] This is the plainest possible indication that Congress is waiting to hear the opinion of the Court.
It should also be said that despite the intensity of Congressional interest, it is not correct to interpret a law by means of what legislators say about it in later years. Southeastern Community College v. Davis, 442 U.S. 397, 411, 99 S.Ct. 2361, 2369, 60 L.Ed.2d 980 (1979).
In this case, the strength and clarity of the language of the law do not really require examination of legislative history. Moreover, the variety and ambiguity of much of the later legislative material would make it particularly unreliable to use.
The government has made an argument, difficult to follow, that Congressional approval of the Subsidies Code[10] in the Trade Agreements Act of 1979, somehow indicated a choice of antidumping law rather than countervailing duty law for use with products from nonmarket economies. This argument evidently takes the continuation of special provision for nonmarket economies in the antidumping law (previously shown here to be nothing more than a ratification of past administrative practice) as a sign that Congress had rejected the countervailing duty law for use with nonmarket economies. Into this argument the government injects the novel idea that had Congress not rejected the countervailing duty law it would have given petitioners a way to avoid the injury test of the antidumping law as if the governments of countries' with nonmarket economies had a vested interest in getting the procedure of an injury determination before their products could be assessed with special duties.
This argument is hardly worthy of repetition except as a contrast to the simple and far more persuasive view of the implications of the Trade Agreements Act of 1979. The Act approved the Subsidies Code. Article 15 of the Code clearly gives a country the choice of using subsidy law or antidumping law for imports from a country with a state-controlled economy. Moreover, Congress was informed that countries with nonmarket economies had participated *557 in the preparation of the Code[11] and that it had been signed, subject to subsequent ratification, by two such countries.[12]
In the opinion of the Court this constitutes overwhelming evidence that the 1979 Act shows a definite understanding by Congress that the countervailing duty law covers countries with nonmarket economies.
All these considerations lead the Court to conclude that the Commerce Department's determinations were contrary to law. To allow it to develop such an extraordinary exception to the law would go beyond deference to an administrative agency. It would be an abdication of judicial responsibility.
For the reasons explained in this opinion the determinations under review are found to be arbitrary and not in accordance with the law.
The final determinations with respect to carbon steel wire rod from Czechoslovakia and Poland are reversed and the matters are remanded for determinations consistent with this opinion.
The recission of the investigations into potassium chloride from the Soviet Union and the German Democratic Republic is set aside and the investigations shall resume in a manner consistent with this opinion.
The parties shall have thirty days from the date of entry of this opinion to agree on a schedule for these remanded matters and to report that schedule to the Court. If they cannot agree they shall report their request for scheduling and the Court will set a schedule.
NOTES
[1] Carbon Steel Wire Rod from Czechoslovakia, Final Negative Countervailing Duty Determination, 49 Fed.Reg. 19,370 (May 7, 1984); Carbon Steel Wire Rod from Poland; Final Negative Countervailing Duty Determination, 49 Fed.Reg. 19,374 (May 7, 1984).
[2] 49 Fed.Reg. 23428-23429 (June 6, 1984).
[3] 49 Fed.Reg. 19373, 19374; 49 Fed.Reg. 19377.
[4] 49 Fed.Reg. 19373.
[5] 49 Fed.Reg. 19372, 19375.
[6] Fed.Reg. 19372, 19376.
[7] See, Downs v. United States, 187 U.S. 496, 23 S.Ct. 222, 47 L.Ed. 275 (1903).
[8] See, e.g., Countervailing duties Imports from Germany, T.D. 49878, 74 Tres.Dec. 475 (1939); Countervailing duties on imports from Germany, T.D. 49821, 74 Treas.Dec. 389 (1939), T.D. 49849, 74 Treas.Dec. 438 (1939), T.D. 49958, 75 Treas.Dec. 82 (1939), T.D. 49998, 75 Treas.Dec. 139 (1939); Countervailing duties on etheyline dibromide from Germany, T.D. 49719, 74 Treas. Dec. 192 (1938); Countervailing Duties on certain German products, T.D. 48360, 69 Treas.Dec. 1008 (1936), T.D. 48463, 70 Treas.Dec. 172 (1936), T.D. 48444, 70 Treas.Dec. 134 (1936), T.D. 48479, 70 Treas.Dec. 201 (1936); Countervailing duties Aluminum foil and manufacturers thereof, T.D. 47312, 66 Treas.Dec. 362 (1034); T.D. 47501, 67 Treas. Dec. 187 (1935).
[9] H.Rep. No. 1156, 98th Cong., 2d Sess. 191-92 (1984), U.S.Code Cong. & Admin.News 1984, p. 4910.
[10] Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade.
[11] Message from the President of the United States transmitting the Texts of the Trade Agreements Negotiated in the Tokyo Round of the Multilateral Trade Negotiations, Pursuant to Section 102 of the Trade Act of 1974, H.R.Doc. No. 153, 96th Cong., 1st Sess. 259 (1979).
[12] Report of the International Trade Commission to the Subcommittee on International Trade, Senate Finance Committee, Analysis of Nontariff Agreements, U.S.I.T.C. Inv. No. 332-101, 96th Cong., 1st Sess. i-iv (1979).
| {
"pile_set_name": "FreeLaw"
} |
975 F.2d 361
Bernard E. WALDEN, Plaintiff-Appellant,v.ILLINOIS CENTRAL GULF RAILROAD, a corporation, Defendant-Appellee.
No. 91-2364.
United States Court of Appeals,Seventh Circuit.
Argued April 28, 1992.Decided Sept. 16, 1992.
Anthony G. Argeros (argued), Roger C. Elliott, Elliott & McClure, Momence, Ill., Robert Barewin, Metnick, Barewin & Wise, Springfield, Ill., for plaintiff-appellant.
Matthew J. Maddox (argued), William Hardy, Robert E. Gillespie, Hinshaw & Culbertson, Springfield, Ill., for defendant-appellee.
Before MANION, Circuit Judge, and FAIRCHILD and WOOD, Jr., Senior Circuit Judges.
FAIRCHILD, Senior Circuit Judge.
1
Bernard Walden sustained injuries while acting in the scope of his employment as a brakeman for Illinois Central Gulf Railroad. Walden filed an action for personal injuries under the Federal Employers' Liability Act (FELA), 45 U.S.C. §§ 51-60. Prior to trial Walden moved for summary judgment on the issues of the railroad's negligence per se, liability and Walden's contributory negligence. The district court found that the railroad had violated Section 220.49 of the Federal Railroad Administration Radio Standards and Procedures, 49 C.F.R. § 220.49, and held that the violation constituted negligence per se. The case went to trial on the remaining issues, and a jury rendered a verdict for the railroad. Walden moved for judgment notwithstanding the verdict (JNOV) and for a new trial. The district court denied both motions, and Walden now appeals.
I. BACKGROUND
2
On June 23, 1986, Walden was working as a brakeman for the defendant railroad. He was working together with engineer Marion Wagner, flagman James Tice, fireman James Andrews, and conductor Billy Tice to couple certain engines with several boxcars. Walden initiated the coupling process by throwing a track switch located between the rear of the engines and the boxcars. He then instructed the engineer by radio to begin backing the engines toward the boxcars. As the engines began backing toward the boxcars, Walden walked toward the rear of the moving engine and boarded, a procedure he testified was normally followed by brakemen. Tice then took over the radio communications with the engineer. Tice attempted to signal by radio that the engines had traveled one-half of the distance to the boxcars. The radio communication was garbled and the engineer so informed him. Tice, therefore, stepped out to where he could be seen by the engineer and gave hand signals to effect the coupling.
3
Meanwhile, Walden proceeded up a series of steps and walked toward the door to the cabin where his assigned seat was located. He testified, however, that he was not required to be in his assigned seat until after the coupling was completed and the train's journey began. (Tr. at 40-41.) Walden testified that he intended to be seated or braced by the time of coupling and that he knew that it was preferable to be braced during a coupling. (Tr. 43-44.) He further testified that the area between the cabin door and his assigned seat was a "bad spot" to be in during a coupling because there was nothing to hold on to. (Tr. at 44.) He, however, was not aware that a coupling was imminent because he did not feel or hear the engine's brakes being applied. (Tr. at 47.) At the moment Walden opened the cabin door and started to step inside, the engines coupled with the boxcars, and he was thrown over his assigned seat and injured.
4
The engineer estimated that at the time of impact the engines were traveling at less than one mile per hour, and he testified that the coupling was a normal coupling. (Tr. at 85, 93.) Tice estimated from his vantage point on the tracks that the engines were traveling at two to three miles per hour at impact, and that the coupling appeared to be normal. (Tr. at 67, 69.) Andrews testified that the impact was noticeable but not severe. (R. at 91.) Walden estimated that the engines were traveling at four miles per hour at impact. (Tr. at 48.)
5
As stated above, based upon the undisputed fact that the engines did not stop after radio communications were interrupted, the district court held, on pre-trial motion for summary judgment, that Section 220.49 of the Federal Railroad Administration Radio Standards and Procedures had been violated constituting negligence per se as a matter of law. Section 220.49 provides,
6
If the instructions are not understood or continuous radio contact is not maintained, the movement shall be stopped immediately and may not be resumed until the misunderstanding has been resolved, radio contact has been restored, or communication has been achieved by hand signals or other procedures in accordance with the operating rules of the railroad.
7
49 C.F.R. § 220.49 (1977). The issue of causation was submitted to the jury, and it was asked to answer the following special verdict question:
8
Did the defendant's violation of Section 220.49 of the Federal Railroad Administration Radio Standards and Procedures [49 C.F.R. § 220.49] cause or contribute to some injury or damage sustained by the plaintiff?
9
The jury answered "no" and returned a verdict in favor of the defendant railroad.
II. DISCUSSION
A. Motion for JNOV
10
We review denial of a motion for JNOV de novo. Siddiqi v. Leak, 880 F.2d 904, 908 (7th Cir.1989). "We must determine whether there is sufficient evidence, when combined with all inferences reasonably drawn, to support the jury's verdict when the evidence is viewed in the light most favorable to the nonmoving party. This court will not reweigh or reevaluate the evidence--that task is reserved to the jury as factfinder." Id. (citations omitted).
11
In an FELA action, the violation of a statute or regulation, such as Section 220.49, automatically constitutes breach of the employer's duty and negligence per se and will result in liability if the violation contributed in fact to the plaintiff's injury. See, Kernan v. Am. Dredging Co., 355 U.S. 426, 432-33, 78 S.Ct. 394, 398, 2 L.Ed.2d 382 (1958). The FELA is not a workmen's compensation act; causation must still be proved. See, Simpson v. Texas & New Orleans R.R. Co., 297 F.2d 660, 662 (5th Cir.1962). The railroad is liable for any injury to an employee "resulting in whole or in part" from the railroad's negligence. 45 U.S.C. § 51 (1986). Proof that the employee's own negligence was the sole cause of his or her injury is a valid defense because it eliminates the possibility that the regulatory violation contributed in whole or part to the injury. See, Beimert v. Burlington Northern, Inc., 726 F.2d 412, 414 (8th Cir.), cert. denied, 467 U.S. 1216, 104 S.Ct. 2659, 81 L.Ed.2d 365 (1984).
12
Walden argues that the district court should have found causation established as a matter of law and, thus, granted his motion for JNOV. "The Supreme Court standard is that a district court is justified in withdrawing such issues from the jury's consideration 'only in those extremely rare instances when there is a zero probability either of employer negligence or that any such negligence contributed to the injury of an employee.' " Eckert v. Aliquippa & Southern R.R. Co., 828 F.2d 183, 187 (3d Cir.1987) (quoting Pehowic v. Erie Lackawanna R.R. Co., 430 F.2d 697, 699 (3d Cir.1970)). "The decisions of [the Supreme] Court after the 1939 amendments teach that the Congress vested the power of decision in these actions exclusively in the jury in all but the infrequent cases where fair-minded jurors cannot honestly differ whether fault of the employer played any part in the employee's injury." Rogers v. Missouri Pacific R.R. Co., 352 U.S. 500, 510, 77 S.Ct. 443, 451, 1 L.Ed.2d 493 (1957). See also, Coray v. Southern Pacific Co., 335 U.S. 520, 69 S.Ct. 275, 93 L.Ed. 208 (1949).
13
In Coray, a train was traveling in an easterly direction followed within several hundred feet by a motorcar. The train's brakes unexpectedly locked up due to the railroad's violation of a statutory obligation, and the train suddenly stopped. The motorcar was equipped with brakes that could have stopped it within a distance of about one hundred feet. However, the motorcar operator was not aware that the train had stopped because he was looking backward at a block signal. He did not apply the brakes and was killed in the collision with the train. The Utah Supreme Court held as a matter of law that the defective equipment did not contribute to the employee's death. The Supreme Court reversed, stating "[t]he jury could have found that decedent's death resulted from any or all of the foregoing circumstances" which the Court noted were "inseparably related in time or space." Coray, 335 U.S. at 524, 69 S.Ct. at 277. In other words, the Court left the determination of causation to the jury.
14
Similarly, in this case there was sufficient evidence from which a reasonable jury could have found that the regulatory violation did not contribute in whole or part to Walden's injury. When the facts reasonably support a conclusion for either party, the decision is exclusively for the jury to make. Rogers, 352 U.S. at 504, 77 S.Ct. at 447. The jury could have found the following: Walden boarded the engines during the coupling process although he was not required to do so; he knew that he should be braced during a coupling; Walden continued through the cabin door where he knew there was nothing to hold on to even though he was not required to be in his assigned seat until the train began its journey; and a normal coupling was effected. From these circumstances a reasonable jury could have found that Walden's own actions were the sole cause of his injuries and that the failure to stop the train when radio communications were interrupted did not contribute to his injury. The railroad's negligence consisted of its failure to make an immediate stop. The jury could have believed that because of Walden's unbraced position, not only that his injury upon coupling was caused by his unbraced position, but that the same injury would have occurred if the engine had been unexpectedly stopped, as the regulations required. The district court appropriately declined to withdraw the causation issue from the jury.
15
Walden cites Southern Ry. Co. v. Youngblood, 286 U.S. 313, 52 S.Ct. 518, 76 L.Ed. 1124 (1932) and Unadilla Valley Ry. Co. v. Caldine, 278 U.S. 139, 49 S.Ct. 91, 73 L.Ed. 224 (1928), in support of his argument that the district court should have decided causation as a matter of law. Initially, we note that both of these cases were decided prior to the 1939 amendments to the FELA in which Congress expressed its intention to leave causation determinations to the jury. See, Rogers, 352 U.S. at 509, 77 S.Ct. at 450. Moreover, in both Caldine and Youngblood the injured employee disobeyed direct orders and then attempted to argue that the railroad could have prevented such disobedience by following certain regulations and, thus, the railroad's violation of those regulations contributed to his injury. The Court rejected this argument and held that the employee had not proved that his injuries were caused in whole or part by the railroad's negligence and that the injury was instead caused entirely by the plaintiff's own actions.
16
At most, these two cases stand for the proposition that it is possible for causation to be decided as a matter of law. However, both cases involved similar and equally extraordinary facts not present here. In this case, there was no analogous argument that the railroad was negligent in failing to prevent Walden's failure to care for his own safety. Moreover, had such an argument been made it would not be favorable to Walden, but would strengthen the argument that his own negligence was the sole cause of his injuries. Caldine and Youngblood are inapposite.
B. Motion for New Trial
17
"The test to be applied in determining whether a motion for a new trial should be granted is whether 'the verdict is against the weight of the evidence, that the damages are excessive, or that, for other reasons, the trial was not fair to the party moving.' " Gen. Foam Fabricators, Inc. v. Tenneco Chem., Inc., 695 F.2d 281, 288 (7th Cir.1982) (quoting Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251, 61 S.Ct. 189, 194, 85 L.Ed. 147 (1940). "The grant or denial of a motion for a new trial 'is not subject to review by this court, except upon exceptional circumstances showing a clear abuse of discretion.' " Id. (quoting Stinebower v. Scala, 331 F.2d 366, 367 (7th Cir.1964).
18
Walden argues that several trial errors warrant a new trial. First, he argues that it was an abuse of discretion for the district court to prohibit him from arguing in closing arguments that radio signals are more precise than hand signals in effecting a coupling. He contends that this argument was relevant as responsive to the railroad's argument that hand signals and radio communication are equally effective and safe methods for effecting a coupling.1 We agree. However, closing arguments are limited to the facts in evidence and reasonable inferences therefrom. United States v. Doyle, 771 F.2d 250, 258 (7th Cir.1985). Walden presented no direct evidence to support the argument that radio signals are more precise than hand signals, but argues that it could reasonably be inferred from James Andrews' deposition which was read to the jury. We have examined the deposition. We do not think that the district court clearly abused its discretion in determining that the proposed argument was not supported by a reasonable inference from the facts in evidence.
19
Second, Walden argues that the district court erred in precluding him from arguing that the use of hand signals was a continuing violation of the regulations. The use of hand signals, however, is not a violation of the regulations. In fact, Section 220.49 states that movement may be resumed once communication has been achieved by hand signals. The failure to stop immediately when radio contact was lost was the violation of the regulation, and Walden was permitted to and did so argue to the jury. In addition, the violation of the regulations had been previously determined on summary judgment and was not before the jury. The jury was to determine only whether the railroad's violation in failing to stop contributed to Walden's injury. Thus, the district court's decision to preclude such an argument did not result in a trial that was unfair and was not a clear abuse of discretion.
20
Last, Walden argues that the railroad improperly referred in its closing argument to Walden's assumption of the risk, a defense that is not recognized in FELA actions, see 45 U.S.C. § 54 (1986). Walden did not object to the argument until after the jury had been discharged for deliberations. The district court ruled that the objection was waived as untimely. Walden argues that the timing of his objection was irrelevant because the railroad's argument constituted plain error. "A ground for reversal may be raised for the first time on appeal 'when the issue presented goes to the district court's subject-matter jurisdiction, if the district court's decision is 'plain error' ... or if there are exceptional circumstances where justice demands more flexibility.' " Walsh v. Mellas, 837 F.2d 789, 800 (7th Cir.), cert. denied, 486 U.S. 1061, 108 S.Ct. 2832, 100 L.Ed.2d 933 (1988). We have examined the transcript and are not even convinced that the railroad argued an assumption of the risk theory. Moreover, Walden's objection neither went to the district court's subject matter jurisdiction nor does it present such exceptional circumstances in which justice would demand our attention.
21
Although Walden was entitled to postpone his objection until the end of the closing arguments in order to avoid highlighting the objectionable argument to the jury. See, Joseph v. Brierton, 739 F.2d 1244, 1247 (7th Cir.1984), he was not entitled to further postpone his objection until after the jury was discharged for deliberations. We agree with the Eighth Circuit that objections to closing argument must be made prior to the submission of the case to the jury in order to enable the judge to make a curative instruction if necessary. Lange v. Schultz, 627 F.2d 122, 127 (8th Cir.1980). Walden's objections to the content of the railroad's closing argument were, therefore, waived.
III. CONCLUSION
22
The judgment of the district court is AFFIRMED.
1
Evidence on the relative safety of hand signals and radio communications was relevant to show that the coupling was normal and that the violation by failure to stop did not contribute to Walden's injury
| {
"pile_set_name": "FreeLaw"
} |
48 B.R. 1 (1984)
In re SOUND EMPORIUM, INC., Debtor.
Bankruptcy No. 6-81-00186-T-7.
United States Bankruptcy Court, W.D. Texas, Waco Division.
November 9, 1984.
John Guinn, Copperas Cove, Tex., for Sound Emporium.
Adrian Overstreet, of Kammerman, Overstreet & Huren, Austin, Tex., for Texas Bank and Trust.
Grover Hartt, III, Asst. U.S. Atty., Dallas, Tex., for U.S.
MEMORANDUM OPINION AND ORDER
BERT W. THOMPSON, Chief Judge.
On this date came on to be considered in the above styled and numbered cause, the Motion of the United States to Modify Automatic Stay and the Intervention In Motion to Modify Automatic Stay filed by Texas Bank and Trust of Temple, Texas. The Court, having reviewed the pleadings in this cause and examined the evidence, and having heard the arguments of and authorities cited by counsel for both parties, hereby renders the following Memorandum Opinion and Order in support of the Judgment declaring that the Internal Revenue Service has the right to setoff the taxes owing from the debtor by the amount owing from the United States Army to the debtor. All Findings of Fact, made herein, may be considered Conclusions of Law, if appropriate. All Conclusions of Law not specifically made herein are deemed made in support of this Memorandum Opinion and Order.
The facts relevant to this proceeding can be summarized as follows:
On October 8, 1981, Sound Emporium, Inc., filed a Petition under Chapter 7 of Title 11 of the United States Code. A *2 timely Proof of Claim was filed by the Internal Revenue Service (hereinafter "IRS") on October 12, 1982. This Proof of Claim asserted a claim for unpaid withholding FICA and FUTA taxes in the amount of $9,900.25. The original Proof of Claim failed to assert a right of setoff.
On January 31, 1983, the United States Army's Finance and Accounting Center in Indianapolis, Indiana sent a letter to the IRS advising that it was holding $4,890.20 owing to Sound Emporium. The Army's letter to the IRS was addressed to the District Director in Dallas, Texas and did not reach the proper District and personnel until June 3, 1983.
Upon learning of the army debt, the IRS amended its Proof of Claim to assert a setoff of the Army debt for partial satisfaction of the tax liability owed by Sound Emporium. The amended Proof of Claim was filed on August 2, 1983. The debt from which the claim for setoff arose accrued on October 1, 1981, when Sound Emporium delivered two (2) computer printers to Fort Hood Army Base.
The issues presented for determination by this Court are: (1) whether the United States waived its right to setoff by failing to claim that right in its original Proof of Claim, and (2) whether the setoff should be permitted even if the claim of the United States is subordinate to other claims filed.
It is a well settled principle that amendments to proofs of claim are permitted where the amendment is the result of a party's lack of knowledge or mistake of fact. Amendments to proofs of claim may also be made after the expiration of the statutory period for the filing of claims so long as the parties did not rely to their detriment on the original proof of claim. Chassen v. United States, 207 F.2d 83 (2d Cir.1953), cert. denied 346 U.S. 923, 74 S.Ct. 309, 98 L.Ed. 416 (1954). The Fifth Circuit in In Re Diplomat Electric, Inc., 499 F.2d 342 (5th Cir.1974) adopted the ruling espoused in Chassen holding that an amendment after the running of the statutory period was permissible where there had been no detrimental reliance on the omission by other creditors. Id. at 347.
In the case at bar the IRS duly filed its Proof of Claim within the allotted time period. Not until several months after its original filing did the IRS learn that a disparate component of the United States Government, the Army, held funds which were available for setoff against the debt owed by Sound Emporium. Upon learning of the Army debt, though after the expiration of the statutory period for filing claims, the IRS amended its Proof of Claim to reflect a setoff.
It is apparent from the record that the statement in the original Proof of Claim that no offsets were available was the result of a good faith mistake in that the IRS promptly amended its Proof of Claim. Furthermore, it is evident that Texas Bank and Trust did not detrimentally rely on the original Proof of Claim filed by the Internal Revenue Service in that the Motion in Intervention filed by the bank is devoid of any such claim.
In turning to the question of whether the IRS may exercise its right to setoff, we must determine whether the subordinate nature of this claim precludes the use of Section 553 to offset the Army debt against the federal tax lien.
Section 553 permits setoff of claims between the bankrupt and a third party. "It applies both where the third party's claim is the larger and he seeks to be allowed a share of the estate, and where the bankrupt's claim is the larger and the bankrupt seeks to be paid on his claim against the third party." Rochelle v. United States, 521 F.2d 844, 855 (5th Cir.1975), modified on other grounds, 526 F.2d 405 (1976), cert. denied, 426 U.S. 948, 96 S.Ct. 3168, 49 L.Ed.2d 1185 (1976). Therefore, a claim may be setoff under Section 553 as long as it arises from a mutual obligation and it is not disallowed under any section of the Code. See, 4 Collier on Bankruptcy § 553.01[4].
Section 507(a)(6) allows the payment of unsecured claims of governmental units in *3 the nature of taxes. The claim asserted by the IRS is for withholding, FICA and FUTA taxes. This tax claim is clearly within the purview of Section 507(a)(6).
Under Section 553 it is not mandatory that the debt and claim be of an identical character. The only requirement is that the debt and claim be mutualthat something is owed by both sides. See, Ivanhoe Bldg. & Loan Association v. Orr, 295 U.S. 243, 55 S.Ct. 685, 79 L.Ed. 1419 (1935). In the case at bar there are mutual obligations between the United States and the debtor.
The Fifth Circuit in Rochelle v. United States, supra, specifically addressed the issue of whether Section 553 could be employed to offset a subordinated claim. The Rochelle Court held that a "subordinated claim can be used to setoff a claim by the bankrupt estate against the creditor even though the subordinated claim could not itself share in the dividends." Rochelle, at 855.
In keeping with the Fifth Circuit's ruling in Rochelle, the claim of the Internal Revenue Service for withholding, FICA and FUTA taxes, though subordinate to the claim of Texas Bank and Trust, may be offset by the amount due the debtor by the United States Army for goods delivered.
Therefore, an order shall be entered declaring that the debt owed the Internal Revenue Service by the debtor in the amount of $9,900.25 shall be offset by the debt due the debtor, Sound Emporium, Inc., by the United States Army in the amount of $4,890.20 thereby leaving a net total due the Internal Revenue Service of $5,010.05.
ORDER
In accordance with the facts and law fully set out in the Court's Memorandum Opinion on the Motion of the United States to Modify Automatic Stay and the Intervention in Motion to Modify Automatic Stay filed by Texas Bank & Trust, this Court is of the opinion that the automatic stay should be modified, it is therefore
ORDERED, ADJUDGED, and DECREED that the debt owed the Internal Revenue Service by Sound Emporium, Inc., in the principal amount of $9,900.25 shall be offset by the debt owing to Sound Emporium, Inc. by the United States Army in the principal sum of $4,890.20 thereby leaving a balance owed by the debtor to the Internal Revenue Service of $5,010.05. The remaining balance due it to be paid in due order as a priority claim under Section 507(a)(6).
All other relief sought by the parties which is not specifically granted herein is denied.
| {
"pile_set_name": "FreeLaw"
} |
574 So.2d 1085 (1991)
Donald GUNSBY, Appellant,
v.
STATE of Florida, Appellee.
No. 73616.
Supreme Court of Florida.
January 15, 1991.
Rehearing Denied March 4, 1991.
*1086 James B. Gibson, Public Defender and Christopher S. Quarles, Asst. Public Defender, Chief, Capital Appeals, Seventh Judicial Circuit, Daytona Beach, for appellant.
Robert A. Butterworth, Atty. Gen., and Belle B. Turner, Asst. Atty. Gen., Daytona Beach, for appellee.
PER CURIAM.
Donald Gunsby appeals his first-degree murder conviction and his death sentence, imposed by the trial judge in accordance with the jury's recommendation. We have jurisdiction.[1] For the reasons expressed, we affirm Gunsby's conviction for first-degree murder and his sentence of death.
The relevant facts established at trial are as follows. On April 20, 1988, Donald Gunsby was attending a party in Ocala where he was told that a friend had been in an altercation with one of the proprietors of a nearby grocery store. Gunsby and *1087 others went to the store, and they learned that the man who had supposedly fought with their friend was no longer at the store. Gunsby threatened to hurt the man if he returned to the store. After a visit to the hospital to see their friend, Gunsby and the others returned to the party. While there, according to one witness, Gunsby stated that he was "tired of those damn Iranians[2] messing with the black." Gunsby then left the party again, and when he returned he was wearing a camouflage suit. According to one witness, Gunsby had a gun.
The evidence at trial established that at 9:30 p.m. Donald Gunsby entered the grocery store wearing camouflage clothing. Without saying anything, he fired one shot from a shotgun at the victim, who was the brother of the man who had supposedly fought with Gunsby's friend earlier that day. Gunsby immediately ran from the store, followed unsuccessfully by the victim's brother, who fired three shots from a pistol at Gunsby as he fled. Gunsby returned to the party briefly and, according to one witness, said that he had taken care of the problem. He was later identified from a photo lineup and at trial by the cashier of the convenience store and by the victim's brother, both of whom were eyewitnesses to the shooting.
The medical examiner testified that the victim died of a shotgun wound to the right side of the chest. The wound was one and three-quarter inches in diameter and caused massive hemorrhaging and injury to the right lung, liver, and heart. The victim's body contained dozens of shotgun pellets, and the doctor rendered an opinion that the victim had been conscious for up to a minute and had died within two to three minutes after being shot.
Gunsby presented several alibi witnesses who testified that he was away from the scene on the evening of the offense. He also presented a police officer who testified that he had overheard the victim's father identify another man as the murderer, and Gunsby presented a man who had been in jail with him who testified that Gunsby had told him that one of the state's witnesses was lying to protect her boyfriend, whom Gunsby believed was the killer. The jury found Gunsby guilty of first-degree murder, as charged in the indictment.
In the penalty phase, the state presented documentary evidence concerning Gunsby's prior offenses involving violence, specifically, an aggravated assault committed in 1967, for which he was sentenced to three and one-half years in the state prison system, and an armed robbery committed in 1971, for which he was sentenced to ten years in the state prison system. In addition, the state presented evidence that Gunsby had been convicted in March, 1988, of possession of a firearm by a felon, carrying a concealed firearm, and having an improper license tag. For the two felony offenses, Gunsby was to have served eighteen months in prison, followed by two years of community control. However, he failed to report to jail on March 9, 1988, as ordered, so a warrant for his arrest was issued. That warrant was outstanding at the time of the murder.
The state also presented a witness who was an acquaintance of Gunsby and who testified that he saw Gunsby at the party on the day of the murder and that Gunsby was behaving normally. In addition, the state presented a court-appointed psychiatrist who testified that Gunsby did not suffer from mental illness, was competent to stand trial, and was able to distinguish right from wrong on the day of the murder.
Gunsby presented two witnesses in the penalty phase who testified that he was a good neighbor who liked children. He also presented two mental health experts. The first testified that Gunsby was mildly retarded, with spelling skills at a third-grade level, reading skills at a fourth-grade level, and an IQ of less than fifty-nine. However, he also testified that Gunsby was not schizophrenic or otherwise mentally ill. The other mental health expert testified that Gunsby was, indeed, schizophrenic, incompetent to stand trial, insane at the time *1088 of the offense, and a candidate for involuntary hospitalization. This psychologist also testified that Gunsby's reading comprehension was at a third-grade level and his verbal skills were at an eighth-grade level. The state extensively cross-examined this witness, in light of the obvious conflict with the other mental health experts.
The jury recommended the death penalty by a nine-to-three vote. The trial judge, in agreeing with the jury, found three aggravating circumstances: (1) that the murder was committed in a cold, calculated, and premeditated manner; (2) that Gunsby had been previously convicted of felonies involving the use or threat of violence; and (3) that Gunsby was under sentence of imprisonment when he committed the murder. The judge found one nonstatutory mitigating factor, that Gunsby is mildly retarded and intellectually functions on a third or fourth grade level. The judge concluded that "[v]iewed in the light of the defendant's past history of violence and the circumstances of this case, defendant's mental condition carries little weight." Consequently, the judge found that the aggravating factors outweighed the mitigating factors, and he imposed the death sentence.
Guilt Phase
Gunsby claims that during the guilt phase of his trial, the trial court erred by: (1) dismissing prospective jurors who stated that they could not discharge their duties as jurors because of their strong feelings concerning the death penalty; (2) allowing one witness to testify that others at the party saw the outline of a gun under Gunsby's clothing; (3) excluding evidence of drugs in the victim's system; (4) instructing the jury concerning felony murder; and (5) committing numerous errors which had the cumulative effect of denying Gunsby a fair trial.
With regard to the first claim, the trial judge preliminarily questioned the venire concerning, among other things, whether their strong feelings for or against the death penalty would render them unable to fairly decide the case. He excused members of the venire who affirmatively stated that they would be unable to discharge their duty as jurors. Gunsby did not object to the procedure used by the trial judge, nor did he ask to make inquiries of the proposed jurors. We find that under these circumstances he has waived the right to challenge the excusal of these potential jurors. See Hoffman v. State, 474 So.2d 1178 (Fla. 1985); Bundy v. State, 471 So.2d 9 (Fla. 1985), cert. denied, 479 U.S. 894, 107 S.Ct. 295, 93 L.Ed.2d 269 (1986); Maxwell v. State, 443 So.2d 967 (Fla. 1983); Maggard v. State, 399 So.2d 973 (Fla.), cert. denied, 454 U.S. 1059, 102 S.Ct. 610, 70 L.Ed.2d 598, (1981).
In his second claim, Gunsby argues that the trial court erroneously admitted the following testimony on examination by the prosecutor:
BY MR. MOORE:
Q Ms. Brown, what do you mean by the "print of a gun?" Can you explain to us what you mean?
A The handle of the gun was on his right side. It was more than me seen it. It was at least
[DEFENSE COUNSEL]: Objection, your Honor; hearsay.
THE COURT: Objection overruled.
BY MR. MOORE:
Q Go ahead.
A It was at least 50 people there and I am quite sure at least ten people seen it.
The answer to the question was speculative, not hearsay. Although the answer produced by the question should not have been admitted, we find the error harmless beyond a reasonable doubt.
In his next claim, Gunsby asserts that it was error for the trial judge to deny him the opportunity to cross-examine the medical witness concerning any drugs detected during the autopsy of the victim. Given the total circumstances of this case, we find that the trial judge did not abuse his discretion in determining that this subject was not a proper subject of cross-examination. Consequently, there was no trial court error.
*1089 In his fourth claim of error, Gunsby asserts that the trial court improperly instructed the jury on felony murder. We note that a charge of possession of a firearm by a convicted felon was severed prior to Gunsby's trial. However, the trial judge, at the conclusion of the trial, instructed the jury on felony murder. Gunsby now argues that since the state produced no evidence supporting the underlying felony of possession of a firearm by a convicted felon, the instruction on felony murder was error. Counsel for Gunsby not only did not object to the instruction given by the trial judge, he expressly approved the instructions given. Even if there was error in how these instructions were given, under Florida Rule of Criminal Procedure 3.390(d), Gunsby may not now raise this issue. See, Walton v. State, 547 So.2d 622 (Fla. 1989), cert. denied, ___ U.S. ___, 110 S.Ct. 759, 107 L.Ed.2d 775 (1990); Bottoson v. State, 443 So.2d 962 (Fla. 1983), cert. denied, 469 U.S. 873, 105 S.Ct. 223, 83 L.Ed.2d 153 (1984); Harris v. State, 438 So.2d 787 (Fla. 1983), cert. denied, 466 U.S. 963, 104 S.Ct. 2181, 80 L.Ed.2d 563 (1984); Foster v. State, 436 So.2d 56 (Fla. 1983), cert. denied, 464 U.S. 1052, 104 S.Ct. 734, 79 L.Ed.2d 193 (1984). Further, given the testimony, the error, if any, was clearly harmless beyond a reasonable doubt. We note that this case was tried on the theory of premeditated murder.
Finally, we find that Gunsby's claim that the cumulative effect of errors during the course of this trial denied him a fair trial is without merit.
Penalty Phase
Gunsby challenges his death sentence on the following grounds: (1) the trial court allowed improper Williams[3] rule evidence over Gunsby's objection; (2) the trial court erred in its finding of aggravating factors and in its consideration of mitigating evidence; (3) the death sentence in this case is disproportionate; (4) the trial court and the state improperly diminished the importance of the jury's role in the sentencing process; and (5) Florida's capital sentencing statute is unconstitutional on its face and as applied.
With regard to the first claim, the alleged Williams rule evidence was admitted during the testimony of the woman who reared Gunsby. Gunsby called the woman as a witness during the penalty phase, and the state, in its cross-examination, asked her whether Gunsby had a habit of carrying guns. Gunsby objected on the grounds that the question called for speculation. The trial court overruled the objection and allowed the woman to testify concerning an incident where police took two guns from Gunsby which he had been carrying while cleaning yards. Gunsby now claims that the testimony was irrelevant and prejudicial, and that it violated the Williams rule. He also complains that documentary evidence concerning prior firearm convictions was given to the jury.
The state points out that the objection raised by Gunsby to this testimony was that the witness's answer called for speculation, not that it was inadmissible under the Williams rule. Further, trial counsel did not request a curative instruction or a mistrial. We find the testimony was not improper in the context in which it was presented. Given the fact that this was impeachment of a defense character witness, examining the witness about a specific act of misconduct by Gunsby that was known by the witness was proper cross-examination and was not a violation of the Williams rule.
In his second point in the penalty phase, Gunsby claims that the trial judge erred in finding that the murder was committed in a cold, calculated, and premeditated manner without any pretense of moral or legal justification. Gunsby asserts that his delusion that he was a protector of the black community helped form a pretense of justification which renders this aggravating factor inapplicable. We disagree. The record is clear that Gunsby himself was never harassed or threatened in any way *1090 by the victim or by the victim's brother. In fact, the evidence reflects that Gunsby's delusion seemed to be directed toward ridding his neighborhood of drug dealers. However, this murder was not predicated upon the fact that the victim was a drug dealer. We find that there exists no reasonable pretense of moral or legal justification under the circumstances of this case. Further, we find that this record clearly supports the heightened premeditation necessary to support this aggravating circumstance.
The other two aggravating circumstances are also fully supported by the record. Gunsby had previously been convicted of aggravated assault and sentenced to three and one-half years in the state prison in 1967. He also had been convicted of armed robbery and sentenced to ten years in the state prison in 1971. There is no question that the second aggravating circumstance, that he had been previously convicted of crimes of violence, was properly applied in this case.
Further, the record clearly establishes that Gunsby had been sentenced to incarceration but had not reported to jail as ordered and that a warrant had been issued for his arrest. These circumstances justify a finding that Gunsby was under a sentence of imprisonment at the time of this offense. We reject the contention that there must be an escape for this aggravating circumstance to apply, and we conclude that this aggravating circumstance was properly found. See Songer v. State, 544 So.2d 1010 (Fla. 1989).
Gunsby next argues that the trial court did not give proper consideration to the mitigating evidence which he presented. He also argues that the application of the death penalty is disproportionate in this case. The record reflects that the trial judge considered the conflicting testimony of the mental health professionals, along with the other testimony and evidence. He resolved the conflicts among the mental health experts and, to a large extent, rejected the testimony of the expert who concluded that Gunsby had a severe mental condition. The resolution of factual conflicts is solely the responsibility and duty of the trial judge, and, as the appellate court, we have no authority to reweigh that evidence. See Lopez v. State, 536 So.2d 226 (Fla. 1988); Stano v. State, 460 So.2d 890 (Fla. 1984), cert. denied, 471 U.S. 1111, 105 S.Ct. 2347, 85 L.Ed.2d 863 (1985); Martin v. State, 420 So.2d 583 (Fla. 1982), cert. denied, 460 U.S. 1056, 103 S.Ct. 1508, 75 L.Ed.2d 937 (1983). The trial judge found that Gunsby's diminished mental capacity was a nonstatutory mitigating factor, but he also found that "the aggravating circumstances far outweigh the mitigating circumstance and the only appropriate sentence is death."
We also conclude that his sentence is proportionately correct. We reject Gunsby's argument that a life sentence is dictated by our previous decisions in Livingston v. State, 565 So.2d 1288 (Fla. 1988); Fitzpatrick v. State, 527 So.2d 809 (Fla. 1988); and Wilson v. State, 493 So.2d 1019 (Fla. 1986). We find a number of dissimilarities between the instant case and those cases. First, Wilson involved a heated domestic confrontation, so it was completely unlike the murder in the instant case. In addition, in Livingston and Fitzpatrick, there were no disputes among experts considering the extent of the mental disabilities of the defendants. After a review of the records in Livingston, Fitzpatrick, and the instant case, we find the sentence of death in this case is proportionately correct.
Gunsby's fourth claim is that the trial court and the jury instructions diminished the importance of the jury's role in the sentencing process, in violation of Caldwell v. Mississippi, 472 U.S. 320, 105 S.Ct. 2633, 86 L.Ed.2d 231 (1985). As Gunsby admits, this claim was not preserved by any objection to any of the instructions of which he now complains. We find that this claim is procedurally barred. Further, we find that the statements and instructions of which he now complains are correct statements of Florida law.
Finally, we reject Gunsby's claim that Florida's death penalty statute is unconstitutional on its face and as applied in this case.
*1091 Accordingly, we affirm Donald Gunsby's conviction for first-degree murder and the sentence of death imposed by the trial court.
It is so ordered.
OVERTON, McDONALD and GRIMES, JJ., and EHRLICH, Senior Justice, concur.
KOGAN, J., concurs in part and dissents in part with an opinion, in which BARKETT, J., concurs.
SHAW, C.J., concurs with conviction, but dissents from sentence.
KOGAN, Justice, concurring in part, dissenting in part.
While I concur in the conviction, I dissent as to the sentence. I do not agree with the majority that the testimony of the mental health experts conflicted so greatly as to require a different result from that reached in Fitzpatrick v. State, 527 So.2d 809 (Fla. 1988). The general thrust of the expert testimony was that Gunsby's mind operates at the level of a child. As in Fitzpatrick, Gunsby was delusional and his "actions were those of a seriously emotionally disturbed man-child." Id. at 812. Accordingly, I would find the death penalty disproportionate and would reduce the penalty to life in prison without possibility of parole for twenty-five years. See id.
BARKETT, J., concurs.
NOTES
[1] Art. V, § 3(b)(1), Fla. Const.
[2] The proprietors of the grocery store were Iranian.
[3] Williams v. State, 110 So.2d 654 (Fla.), cert. denied, 361 U.S. 847, 80 S.Ct. 102, 4 L.Ed.2d 86 (1959).
| {
"pile_set_name": "FreeLaw"
} |
851 N.E.2d 954 (2006)
John CANGELOSI, Plaintiff-Appellee,
v.
Patrizio CAPASSO, Rockford Radiology Associates, P.C., Todd D. Alexander, Individually, Todd D. Alexander, S.C., Thomas Dahlberg, and Rockford Memorial Hospital, d/b/a Positive Reflections, NFP, Defendants. (Richard D. Gaines, Contemnor-Appellant).
No. 2-05-0643.
Appellate Court of Illinois, Second District.
June 30, 2006.
*955 Richard D. Gaines, Eugene G. Doherty, Angela C. Bresnahan, Holmstrom & Kennedy, P.C., Rockford, for Richard D. Gaines.
Michael P. Schostok, Salvi, Schostok & Pritchard, P.C., Waukegan, Robert G. Black, Law Offices of Robert G. Black, Naperville, for John Cangelosi.
Justice HUTCHINSON delivered the opinion of the court:
Attorney Richard D. Gaines appeals from an order finding him in direct civil contempt of court and imposing a $50 fine for noncompliance with an order directing that he turn over notes authored by Lisa Bruening, a respondent in discovery. The issue is whether Bruening's notes, which contain her recollection of relevant events, which were authored within a day of the events, prior to any litigation, and which were not turned over to an attorney for 22 months, are protected by either the attorney-client privilege or the work product privilege. For the reasons that follow, we conclude that neither privilege protects the notes. With respect to the trial court's order finding respondent in direct civil contempt, we affirm the trial court's order and sanction, and we remand.
On October 14, 2003, plaintiff, John Cangelosi, filed a medical malpractice complaint against various defendants. According to the complaint, following a skydiving accident on April 12, 2003, plaintiff was admitted to Rockford Memorial Hospital (the Hospital) with several fractures, and he remained there until April 23, 2003. Plaintiff alleged that, as a result of the negligence of the Hospital and other defendants, he suffered severe, permanent damage to his spine and was permanently disabled. On April 7, 2005, plaintiff filed an amended complaint adding Bruening as a respondent in discovery.
On January 16, 2004, plaintiff served written interrogatories upon the Hospital, requesting information about "statements from any witness other than yourself or, if a corporation, of anyone other than an officer, director, managing agent, or foreman." On February 15, 2005, the Hospital *956 responded that it had "notes prepared by Lisa Bruening, R.N., on the evening of April 15, 2003, in contemplation of litigation. Nurse Bruening was involved in the patient's care from approximately 7:00 p.m. on April 14 until approximately 8:00 a.m. on April 15, 2003, and her conduct is placed in issue by Plaintiff's Complaint." However, the Hospital objected to production of the notes, based on the attorney-client and work product privileges.
On March 24, 2005, plaintiff filed a motion to compel production of Bruening's notes. The Hospital responded on April 29, 2005. Attached to the response was a transcript of Bruening's court-ordered deposition and a copy of Bruening's affidavit.
In her affidavit, Bruening disclosed that on April 14 and 15, 2003, she was a registered nurse at the Hospital and attended to plaintiff. During the course of Bruening's 12½-hour shift, plaintiff experienced a change in his condition and could no longer move his extremities. Bruening was concerned that "the change in the patient's condition, if permanent, would be a bad outcome" and that "this is the kind of situation which may very well develop into a lawsuit." Bruening believed that because she was one of the persons who was attending to plaintiff when his condition changed, her care "might be put at issue in a subsequent lawsuit." Bruening "wanted to preserve [her] own recollections of the events of the evening of April 14-15, 2003, so that in the event of a lawsuit [she] and/or [her] attorney would be in a better position to defend [her] conduct." Therefore, during the evening of April 15, 2003, Bruening "made approximately 2½ pages of notes about [her] recollection of the events of the evening." Bruening did not share her notes with anyone until giving them to Gaines when she met with him on February 9, 2005.
At her deposition, Bruening testified that her notes memorialized factual things that she saw, factual things that she did, and factual things that she saw other people do. The notes include things that the doctors may have said during her shift regarding plaintiff's care. After completing her notes, Bruening placed them in a folder in her kitchen cabinet.
On May 13, 2005, the trial court ruled that Bruening's notes were not protected by the attorney-client or work product privilege and ordered Gaines to turn over the notes. On June 9, 2005, Gaines advised the trial court that he would not be turning over the notes, and the trial court found Gaines in direct civil contempt of court. Gaines indicated that he intended to appeal the trial court's order but asked that the order contain a provision allowing the contempt to be purged by turning over the notes. The trial court's June 9 order reflected the imposition of a $50 fine and provided that Gaines could purge himself of contempt by producing a copy of the notes to all parties. Gaines timely appeals.
When an individual appeals a finding of direct civil contempt arising from noncompliance with a discovery order, we must necessarily review the propriety of the discovery order. In re Marriage of Bonneau, 294 Ill.App.3d 720, 723, 229 Ill.Dec. 187, 691 N.E.2d 123 (1998). If the discovery order is improper, the finding of contempt must be reversed. Bonneau, 294 Ill.App.3d at 723, 229 Ill.Dec. 187, 691 N.E.2d 123. Generally, discovery rulings are reviewed for abuse of discretion, but the applicability of a privilege is reviewed de novo. Sterling Finance Management, L.P. v. UBS PaineWebber, Inc., 336 Ill.App.3d 442, 446, 270 Ill.Dec. 336, 782 N.E.2d 895 (2002).
Supreme Court Rule 201(b)(2) provides, in pertinent part:
*957 "All matters that are privileged against disclosure on the trial, including privileged communications between a party or his agent and the attorney for the party, are privileged against disclosure through any discovery procedure. Material prepared by or for a party in preparation for trial is subject to discovery only if it does not contain or disclose the theories, mental impressions, or litigation plans of the party's attorney." 166 Ill.2d R. 201(b)(2).
To be entitled to the protection of the attorney-client privilege, a claimant must show that (1) a statement originated in confidence that it would not be disclosed; (2) it was made to an attorney acting in his legal capacity for the purpose of securing legal advice or services; and (3) it remained confidential. Rounds v. Jackson Park Hospital & Medical Center, 319 Ill. App.3d 280, 285-86, 253 Ill.Dec. 438, 745 N.E.2d 561 (2001). "The work product doctrine provides a broader protection than the attorney-client privilege and is designed to protect the right of an attorney to thoroughly prepare his case and to preclude a less diligent adversary attorney from taking undue advantage of the former's efforts." Fischel & Kahn, Ltd. v. van Straaten Gallery, Inc., 189 Ill.2d 579, 591, 244 Ill.Dec. 941, 727 N.E.2d 240 (2000), citing Hickman v. Taylor, 329 U.S. 495, 510-11, 67 S.Ct. 385, 393-94, 91 L.Ed. 451, 462 (1947).
Gaines argues that "[t]he evidence unequivocally demonstrates that Bruening drafted the [n]otes to assist her attorney in defending possible future litigation, and further that she held the [n]otes in strict confidence until she provided them to her attorney. Thus, they are protected by the attorney-client privilege." Gaines also argues that, "because the [n]otes also reflect Bruening's own writings made in reasonable anticipation of future litigation, they are also protected by the work product privilege." We conclude that neither privilege applies.
Turning first to the claim of attorney-client privilege, the critical issue is whether Bruening's notes were a communication made to an attorney for the purpose of securing legal advice. Rounds is instructive on this issue. In Rounds, a medical malpractice action, the plaintiff sought to discover a nurse's written statement and other nurses' incident reports, which detailed the sequence of events that transpired at the hospital. The nurse who prepared the statement provided an affidavit in which she averred that she prepared it because she "`believed that this matter would likely result in litigation'" and she wanted to "`be able to provide [the] document as a communication to those attorneys assigned to represent [her].'" Rounds, 319 Ill.App.3d at 286, 253 Ill.Dec. 438, 745 N.E.2d 561. The hospital asserted that the documents were made in anticipation of litigation and claimed the attorney-client privilege. After the hospital refused to turn over the documents, the trial court found the hospital in contempt of court, and the hospital appealed.
On appeal, the First District determined that the attorney-client privilege did not apply. Rounds, 319 Ill.App.3d at 284-88, 253 Ill.Dec. 438, 745 N.E.2d 561. The reviewing court first ruled that, despite the affidavit, the hospital "has not presented any facts that would indicate to this court that the [nurse's statement] was anything more than the result of a mere prediction by [the] nurse." Rounds, 319 Ill. App.3d at 286, 253 Ill.Dec. 438, 745 N.E.2d 561. As to all the documents, the reviewing court noted that there was "no indication from the record that the documents were created subsequent to the lawsuit or at the direction of an attorney. * * * *958 There had not been an attorney-client relationship created prior to the creation of the reports." Rounds, 319 Ill.App.3d at 287, 253 Ill.Dec. 438, 745 N.E.2d 561. The reviewing court rejected the hospital's argument that the documents had "`the intent of attorney-client communications,'" noting that "[t]he documents contain primarily factual statements relating to [the plaintiff's] medical condition * * * and the events surrounding her treatment while at [the hospital]." Rounds, 319 Ill.App.3d at 288, 253 Ill.Dec. 438, 745 N.E.2d 561; see also Chicago Trust Co. v. Cook County Hospital, 298 Ill.App.3d 396, 408-09, 232 Ill.Dec. 550, 698 N.E.2d 641 (1998) (finding the attorney-client privilege inapplicable because the documents at issue were not addressed to the attorney and did not seek legal advice); Sakosko v. Memorial Hospital, 167 Ill.App.3d 842, 847, 118 Ill.Dec. 818, 522 N.E.2d 273 (1988) (finding the attorney-client privilege inapplicable because the documents at issue were not addressed to the client's attorney and "contain[ed] primarily factual statements relating to plaintiffs' medical conditions and prognoses").
Here, like the nurse in Rounds, Bruening authored the notes because she believed "this is the kind of situation which may very well develop into a lawsuit." Bruening wrote the notes upon her return home after her shift and, at that time, no lawsuit had been filed. Bruening testified that the primary focus of the notes was to memorialize what had happened during her shift. Like the documents in Rounds, Bruening's notes contain primarily factual statements relating to what she had observed and heard. And, as in Rounds, Bruening did not have an attorney when she authored the notes, nor were the notes directed to an attorney. All of the above factors taken together lead us to conclude that Bruening's notes were not a communication with an attorney for the purpose of securing legal advice. Turning the notes over to an attorney 22 months later did not change the nature of the notes.
Gaines argues that "the `essence' of the privilege is the confidentiality of the communication." That may be so; however, that presumes the existence of a communication. As already stated, Bruening's notes simply do not constitute a communication with an attorney. Gaines also argues that the absence of an attorney-client relationship when the notes were authored is of no moment. He asserts that "a communication has been held to be protected even when made well before the attorney-client relationship is formed if the communication is created in the context of obtaining legal representation." Again, this assertion presumes the notes were a communication with an attorney. Had Bruening met with Gaines on the evening of April 15, 2003, and told him what had happened during her shift at the hospital, that communication might have been privileged even though Gaines had not been retained at the time. However, that is not the factual scenario with which we are presented.
Turning next to the issue of whether Bruening's notes were protected by the work product doctrine, it is clear that they are subject to discovery because they do not "contain or disclose the theories, mental impressions, or litigation plans of the party's attorney." 166 Ill.2d R. 201(b)(2); Shapo v. Tires 'N Tracks, Inc., 336 Ill. App.3d 387, 393, 270 Ill.Dec. 254, 782 N.E.2d 813 (2002) (noting that Rule 201(b)(2) "sets the parameters for the scope of discovery of work-product materials"). As noted, Bruening's notes contained her own factual recollection of events.
Because Bruening's notes were not protected by either the attorney-client *959 privilege or the work product privilege, the trial court properly ordered Gaines to turn over the notes. Hence, we must consider the trial court's order finding Gaines in direct civil contempt. Where a party's refusal to comply with a trial court's order constitutes a good-faith effort to secure an interpretation of the two privileges in question, it is appropriate to vacate a contempt citation on appeal. Sakosko, 167 Ill.App.3d at 848, 118 Ill.Dec. 818, 522 N.E.2d 273. In this case, the record indicates that Gaines asked to be held in contempt because he planned to seek appellate review of the trial court's order compelling him to turn over Bruening's notes. However, in his appellate brief, Gaines "wishes to make clear that he does not seek [to have the contempt citation vacated], as it may cause the issue to become moot for purposes of seeking further review." In light of this request, we affirm the trial court's order finding Gaines in direct civil contempt.
For the foregoing reasons, we affirm the order of the circuit court of Winnebago County, and we remand this case for further proceedings.
Affirmed and remanded.
GROMETER, P.J., and BYRNE, J., concur.
| {
"pile_set_name": "FreeLaw"
} |
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
JILL M. ACKLIN GREGORY F. ZOELLER
Acklin Law Office, LLC Attorney General of Indiana
Westfield, Indiana
MICHAEL GENE WORDEN
Deputy Attorney General
Indianapolis, Indiana
Mar 22 2013, 8:47 am
IN THE
COURT OF APPEALS OF INDIANA
ROUDY JOE BEASLEY, )
)
Appellant-Defendant, )
)
vs. ) No. 84A05-1209-CR-461
)
STATE OF INDIANA, )
)
Appellee-Plaintiff. )
APPEAL FROM THE VIGO SUPERIOR COURT
The Honorable Michael R. Rader, Judge
Cause Nos. 84D05-1108-FD-2490 and 84D05-1005-FD-1593
March 22, 2013
MEMORANDUM DECISION - NOT FOR PUBLICATION
CRONE, Judge
Case Summary
Roudy Joe Beasley was convicted of drug-related offenses possession and sentenced
to home detention followed by probation. Two months later, the State filed a petition to
revoke his home detention placement, alleging that he had tested positive for drugs, diluted
his urine sample, and unlawfully left his home. The trial court found that Beasley had
violated his home detention conditions and revoked his placement, remanding him to the
department of correction for the balance of his term.
Beasley now appeals, claiming that the evidence is insufficient to support the court’s
finding of a violation. Finding the evidence sufficient, we affirm.
Facts and Procedural History
In December 2010, Beasley was convicted of class D felony methamphetamine
possession and class D felony marijuana possession. The trial court sentenced him to
concurrent three-year terms, suspending 1087 days to probation. In April 2012, Beasley was
convicted of class D felony marijuana possession and was sentenced to serve 180 days of his
three-year sentence in home detention, with the remainder suspended to probation. Because
he was still on probation when he committed the latter offense, the trial court terminated his
probation in the prior cause and remanded him to serve one year in home detention,
concurrent to the 180-day home detention placement.
Two months later, the State filed a petition to revoke Beasley’s home detention
placement and/or revoke his probation, alleging that he tested positive at least twice for
marijuana, diluted his urine in at least one drug screen, tampered with his home detention
2
device, and left his residence without authority. The trial court conducted an evidentiary
hearing, at which the defense sought to make a deal with the State, whereby Beasley would
admit to the violations in exchange for a return to probation. The trial court opted to
establish a factual basis by hearing testimony from community corrections field coordinator
Jason Neese concerning Beasley’s alleged violations. Following Neese’s testimony, the trial
court found that Beasley was in violation of his home detention placement conditions,
revoked Beasley’s placement, and remanded him to the department of correction for the
balance of his term. Beasley now appeals. Additional facts will be provided as necessary.
Discussion and Decision
Beasley challenges the sufficiency of evidence supporting the revocation of his home
detention placement.1 On review, we treat a hearing on a petition to revoke a community
corrections placement the same as a hearing on petition to revoke probation. Holmes v. State,
923 N.E.2d 479, 482 (Ind. Ct. App. 2010). Placement on probation or in community
corrections is not a right; rather, it is a matter of grace, a conditional liberty, and a favor. Id.
Such placements are made at the sole discretion of the trial court. Id. Revocation
proceedings are civil in nature, and the State need only prove violations of a person’s
1
At the outset, we note that the defense never withdrew Beasley’s offer to cut a deal with the State by
admitting to the violations in exchange for favorable sentencing treatment. At the end of the hearing, Beasley
pleaded for one more chance at probation and assured the trial court that “I will do everything that you ask me
to do and I will make sure I won’t fail no drug screens and I will go to the Matrix program and attend my AA
meetings”. Tr. at 8. The State argues that this is tantamount to uncontested hearing wherein the defendant
admits to violating his placement terms. However, Beasley never directly admitted to violating his terms, and
his statements could be construed merely as requests that the court choose the most lenient statutory sanction
available after having made a finding that a violation occurred. Ind. Code § 35-38-2-3(g). Thus, we address
the merits of his insufficiency arguments pertaining to the finding of violations.
3
placement conditions by a preponderance of the evidence. Id. at 483. The proceedings are
more flexible procedurally and are not subject to the Rules of Evidence or rules against
hearsay. Id. at 482-83. Instead, the trial court may consider any relevant evidence bearing
some substantial indicia of reliability. Id. at 482. In reviewing a sufficiency of evidence
challenge to a revocation determination, we consider the evidence and reasonable inferences
most favorable to the trial court’s judgment without reweighing evidence or judging witness
credibility. Id. at 483. If substantial evidence of probative value exists to support the trial
court’s determination that a defendant has violated any terms of his placement, we will affirm
the court’s decision to revoke that placement. Id.
Beasley first asserts that the evidence is insufficient because a copy of the conditions
of his home detention was not offered as evidence. Nevertheless, he concedes that the
prohibition of illegal drug use while on home detention would be “an inherent, if not explicit,
requirement in any community corrections program.” Appellant’s Br. at 10. “The
commission of a crime while serving time in the community corrections program is always
grounds for revocation, even if the sentencing court fails to notify the person of such
condition.” Decker v. State, 704 N.E.2d 1101, 1103 (Ind. Ct. App. 1999), trans. dismissed.
Beasley was convicted of drug-related offenses. He tested positive for illegal drugs twice
while in home detention. This conduct alone constitutes a violation of his placement and
grounds for revocation. See id. (where trial court failed to notify defendant of placement
conditions, this Court concluded, “persons in [a community corrections] program should
know that they are not to commit additional crimes during their placement.”). Thus, the trial
4
court’s finding that he violated a condition of his placement was not dependent on the
introduction of a copy of his home detention conditions into the record.
Beasley also contends that the testimony of the State’s sole witness did not bear
substantial indicia of reliability. We disagree. Neese testified that he was familiar with
Beasley’s case and that Beasley violated the rules of community corrections by having
multiple positive drug screens, by diluting his urine, and by engaging in “unauthorized
leave.” Tr. at 4. With respect to the unauthorized leave, Neese specified that Beasley “left
his residence without us knowing where or anything about what he was doing and he
returned approximately an hour and twenty minutes later and then it happened again, later on
that evening. He didn’t return for another three hours and forty-five minutes or so.” Id. at 4-
5. Neese also testified that Beasley had tampered with his home detention strap by removing
it, placing it on his bed, and leaving the residence. Id. at 5. He verified that Beasley had
twice tested positive for marijuana during his home detention and that on at least one
occasion, Beasley had diluted his urine for a drug screen. He also verified that illegal drug
use, strap tampering, and unauthorized leave from the residence were violations of
community corrections rules. To the extent that Beasley challenges Neese’s level of
familiarity with his specific case, his argument amounts to an invitation to reweigh evidence
and judge witness credibility.
5
In sum, Neese’s testimony was sufficient to establish the violations by a
preponderance of the evidence, and we decline Beasley’s invitation to reweigh it. Based on
the foregoing, we affirm the trial court’s decision to revoke Beasley’s home detention and
remand him to the department of correction.
Affirmed.
KIRSCH, J., and MATHIAS, J., concur.
6
| {
"pile_set_name": "FreeLaw"
} |
793 F.2d 832
Adib ZAKY, M.D., Plaintiff-Appellantv.UNITED STATES VETERANS ADMINISTRATION, James Woytassek, andSun J. Guo, M.D., Defendants-Appellees.
No. 85-1741.
United States Court of Appeals,Seventh Circuit.
Argued Dec. 12, 1985.Decided June 12, 1986.
Adib Zaky, M.D., Ft. Wayne, Ind., for plaintiff-appellant.
David H. Miller, U.S. Atty. Office, Ft. Wayne, Ind., R. Lawrence Steele, Jr., U.S. Atty., for defendants-appellees.
Before COFFEY, FLAUM, and RIPPLE, Circuit Judges.
COFFEY, Circuit Judge.
1
The plaintiff appeals the district court's grant of summary judgment to the defendant in his suit alleging that the Veteran's Administration discharged him in retaliation for the exercise of his First Amendment rights; violated his Fifth Amendment liberty interests; and effected the discharge in violation of his procedural rights guaranteed him by 38 U.S.C. Sec. 4106(b), 605 F.Supp. 449. We affirm.
I.
2
On February 22, 1981, the plaintiff, Dr. Adib Zaky, was employed as a cardiologist at the Veteran's Administration Medical Center at Fort Wayne, Indiana, pursuant to 38 U.S.C. Secs. 4104 and 4106. Dr. Zaky was appointed for a two year probationary period, as provided in Sec. 4106. Dr. Zaky's work was to be reviewed by a Professional Standards Board ("PSB") during the probationary period and Dr. Zaky was subject to separation if the Board found that he was "not fully qualified and satisfactory."
3
On November 30, 1981, during Dr. Zaky's first year of probationary employment, a patient was admitted to the Intensive Care Unit ("ICU") as an emergency with severe bradycardia (slow heart beat). Although Dr. Zaky successfully "paced" the patient's heart by inserting a temporary pacing electrode, the patient remained unresponsive. Dr. Zaky concluded that the bradycardia was symptomatic of another serious medical problem and instructed the nurses to ask the internist to whom the patient was assigned to see the patient without delay and left the ICU. According to Zaky, "the Chief of Service [Dr. Venkatachala] accused me of abandoning this patient during a meeting at the Medical Service on December 1, 1981."
4
On December 3, 1981, some two days later, Dr. Zaky wrote a memorandum to Dr. Haan, the Chief of Medical Service and Dr. Venkatachala's supervisor, pointing out deficiencies in the resuscitation procedures in the ICU and suggesting that the Medical Center: (1) "start a regular, ongoing in-service drills involving simulated, cardiac emergencies, in particular, potentially fatal arrythmias;" and (2) "discuss and review each real live resuscitation procedure in CPR committee meetings." Zaky alleged in the memorandum that he had made these suggestions on numerous occasions, but neither suggestion had been implemented.
5
The record reveals that following the incident with the bradycardia patient and Dr. Zaky's letter to Dr. Haan, Dr. Zaky experienced difficulty in his relations with the Medical Center staff. Dr. Zaky failed to attend ICU rounds from January 11, 1982, to March 17, 1982 because, in his opinion, the rounds had "degenerate[d] into personal criticisms that serve no beneficial medical purpose." Dr. Zaky specifically complained that "on January 8, 1982, ... I was personally insulted, and my medical education was questioned." When he resumed attending rounds in March, he stood at a distance from the other physicians and seemed to be unable to hear their discussion. If asked a question, he would ask that the question be repeated and would then request that the treating physicians repeat their earlier discussions concerning the patient's condition and problems before replying. The other physicians responded to this treatment by walking out of the room when Dr. Zaky presented his patients.
6
Furthermore, Dr. Zaky experienced difficulty in cooperating with other physicians and surgeons in his operation of the cardiac lab. In early 1981, Dr. Zaky learned that the hospital was considering the appointment of an internist with expertise in the field of cardiology to the facility and accused Dr. Haan of "making plans to replace him." He objected to the hospital's granting cardiac privileges to another physician, a Dr. Krishnamoorthy, without consulting Dr. Zaky. When informed that Dr. Krishnamoorthy would receive privileges despite his protest, Dr. Zaky wrote a memorandum suggesting as a "solution" that Dr. Krishnamoorthy "understand ... he cannot exercise these privileges in defiance to the legitimate cardiologist or with disregard to his expressed opinion." On another occasion, Dr. Zaky allegedly exclaimed to a patient, "who is the damn doctor asking for a stress test on you? He must be a nut."
7
Official charges concerning Dr. Zaky's work at the Center, such as the incident involving the patient with bradycardia and his failure to attend rounds, were filed on December 1, 1981; March 15, 1982; April 9, 1982; and July 13, 1982. Dr. Zaky responded on each occasion with either a memorandum or an attempt to initiate a grievance proceeding. Dr. Zaky rejected the Veteran's Administration's attempt to have Zaky's supervisor counsel him by either walking out of the counseling meetings or insisting that all communications with him be in writing.
8
Dr. Zaky's first performance evaluation was conducted by Dr. Venkatachala on December 18, 1981, and his work was rated satisfactory. Dr. Venkatachala commented, however, that "in the area of interpersonal relationships with staff members and nursing personnel, he leaves much to be desired. If Dr. Zaky could be more flexible, considerate, and develop good lines of communication, everyone can derive more benefit from his expertise." Before Dr. Zaky received the report, it was reviewed by the Chief of Staff, Dr. Haan who, pursuant to his authority, lowered both Dr. Zaky's "Personal Qualities" rating to unsatisfactory and his "Overall Evaluation" rating to low satisfactory. Dr. Haan explained that he lowered the ratings because, in his opinion, "Dr. Zaky does not demonstrate good emotional stability." In addition to noting Dr. Zaky's objections to the Center's hiring an internist with cardiology training as "making plans to replace him," Dr. Haan stressed Dr. Zaky's poor staff relations:
9
"In regard to dependability, Dr. Zaky has been critical of our Intensive Care Unit and the nurses on ICU. He has also been critical of the CPR Program here. When invited by the Chief, Nursing Service, and by the Head Nurse, and the Intensive Care Unit to provide such training, Dr. Zaky's usual reply was that 'I am too busy' or 'Go ahead and schedule it, and I'll be there.' When the sessions were scheduled, Dr. Zaky seldom appeared.
10
His relations with the staff have deteriorated to the point that recently, I was requested by five members of the medical staff to listen to their pleas in regard to their relationship with Dr. Zaky. The gist of that conversation was that they are so unhappy that they are considering departing from the hospital unless some adjustment can be made in regard to their relationship with Dr. Zaky.
11
As a consequence of this, he is able to elicit little cooperation with other members of the medical staff and is unable to secure what I would consider effective cooperation from the nursing staff, since they are also somewhat uncomfortable with him by reason of his remarks to them at inappropriate times."
12
On March 15, 1982, a Professional Standards Board composed of Drs. Haan and Venkatachala, Dr. Sun Guo, Chief of Surgical Service, and Patrick McKinney of the Personnel Service, convened to conduct Dr. Zaky's first year review and concluded that "there was sufficient evidence [Dr. Zaky's] performance has been less than satisfactory." Following the review, the Professional Standards Board listed five specific deficiencies in Dr. Zaky's performance and suitability and recommended that a Summary Review Board be convened to determine whether Dr. Zaky should continue as a member of the V.A. medical staff. Dr. Guo, as Chairman of the Professional Standards Board, informed Dr. Zaky of the five deficiencies in his performance and suitability by letter dated April 9, 1982:
13
"1. You have consistently failed to attend ICU rounds as requested.
14
2. You failed to communicate the condition of your patient to Dr. Gerding on February 25, 1982 (patient Navigato).
15
3. You failed to communicate with the primary physician concerning a severe bradycardia. (Incident occurred approximately November 30, 1981).
16
4. You have created difficulties with fellow physicians by your failure to accept valid criticism. You have made accusations that the Chief Medical Service is attempting to manipulate physicians. You have made rude and sarcastic remarks to Nursing Service Personnel resulting in their request to not be assigned to the Cardiac Laboratory.
17
5. You made derogatory comments about Dr. Smithivas to patient Marlin to the effect ... 'Who is the damn doctor asking for a stress test on you? He must be a nut.' "
18
On June 15, 1982, Dr. Guo informed Dr. Zaky that a Summary Review PSB previously scheduled to meet on April 15, 1982, would meet on July 14, 1982. The letter listed four new charges:
19
"5. On April 30, 1982, you were instructed to initiate, coordinate, present, and evaluate at least one educational program of mutual benefit to you and the Nursing ICU staff within 30 days. You failed to do so.
20
6. You were insubordinate to your Service Chief on April 30, 1982. Your Service Chief attempted to discuss with you your performance, you demanded it be given to you in writing saying 'I'm not a child, I don't need lecturing.' You then left the office refusing to allow your Service Chief to complete the counseling meeting.
21
7. You were insubordinate to your Service Chief on June 8, 1982. Your Service Chief attempted to have a counseling meeting with you on June 8, 1982. You interrupted saying, 'Anything you want to say, please give it in writing.' You were told it would be confirmed in writing, but your Service Chief wanted to discuss certain aspects with you. You again stated you wanted everything in writing and didn't want any discussion and left the office.
22
8. You were insubordinate to your Service Chief on June 10, 1982. You were at a meeting called by your Service Chief to discuss an incident involving you, Dr. Moorthy, Dr. Salomon, and Mr. Zimmerman. You stated you felt there was no problem, but you wanted it recorded. Your Service Chief agreed to have his secretary record it. You stated you wanted it tape recorded. You were told it was not possible and to stay for the meeting. You refused and left the office."
23
Dr. Zaky was also informed that he would have the opportunity to "appear in person before the Board to present your side of the case and/or submit a written statement in your behalf."
24
On July 14, 1982, the Summary Review PSB composed of Dr. Guo, Dr. Palileo, Chief of Laboratory, and Dr. Dorothy Weiner, Chief of Radiology Services, interviewed 11 witnesses and examined written statements submitted by Dr. Zaky. Dr. Zaky declined the opportunity to make an oral statement to the Board because there was no "verbatim recording of the procedure." The Summary Review PSB determined that all eight deficiencies were sustained by the evidence and recommended that Dr. Zaky be discharged. Dr. Zaky's file was transferred to the Veteran's Administration's Central Office along with letters from Dr. Haan and Mr. Woytassek, the Medical Center Director, counseling approval of the Summary Review PSB's recommendation of Dr. Zaky's separation. On August 25, 1982, while Dr. Zaky's case was pending in the Central Office, the Medical Center Director of the Fort Wayne facility suspended Dr. Zaky for insubordination. According to the "Notification of Personnel Action" included in the record, Dr. Zaky
25
"intentionally disobey[ed] a direct, proper order three times. On August 19, 1982, you were given a direct order by your Service Chief to complete a supervisory appraisal on an employee you supervise. You refused to do the appraisal. The order was repeated two more times, and you were informed by the Service Chief that this was a direct order, and your refusal would result in disciplinary action. After that warning, you again refused to complete the supervisory appraisal."
26
The Chief Medical Director informed the Fort Wayne Medical Center of his approval of Dr. Zaky's separation on September 16, 1982.
27
Zaky filed suit in the United States District Court for the Northern District of Indiana alleging, inter alia, that the Veteran's Administration discharged him in retaliation for his exercise of his First Amendment rights; violated his Fifth Amendment liberty interests; and effected the discharge in violation of his procedural rights guaranteed by 38 U.S.C. Sec. 4106(b).1
28
The parties filed motions for summary judgment and the district court ruled that the First Amendment claim must fail because the plaintiff's statements "appear to have been made in the context of an employee protecting his job, a matter of personal interest. These are precisely the kinds of statements which the [Supreme Court in Connick v. Myers, 461 U.S. 138, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983) ] held are not matters of public concern, and thus not entitled to protection in a federal court." As to the liberty interest claim, the district court "agree[d] with Dr. Zaky that a liberty interest is involved in a situation where the accusations against a probationary physician are potentially available to future employers." However, the court rejected the liberty interest claim, ruling that Dr. Zaky received all the process that was due with the "opportunity to make his side of the story part of his permanent record." Finally, the court divided the Sec. 4106 claim into two parts: allegations of procedural irregularities and an argument that the proceedings were not "fair and impartial" as required by the regulations. The court rejected the various arguments of procedural irregularities because: (1) alleged "irregularities," in fact, were authorized by the regulations; (2) Dr. Zaky claimed procedural rights that were not granted to him by the regulations; and (3) Dr. Zaky's charges were not supported by the evidence. Dr. Zaky's principal argument that the proceedings were not "fair and impartial" was that the presence of Drs. Venkatachala and Haan on the March 15, 1982, Periodic Review PSB undermined the fairness of the entire review process because of the alleged bias and prejudice both doctors felt toward the plaintiff. Noting that there are "three tiers of review for probationary employees" and that "each tier is procedurally independent of the other," the court rejected the plaintiff's argument because "a lack of impartiality on the part of a periodic review board would not affect the Summary Review PSB because the latter must independently find the deficiencies to exist." Moreover, the court pointed out that the presence of Drs. Haan and Venkatachala could not have biased the entire review process because the findings of the Summary Review PSB are reviewed by the Veteran's Administration's Central Office in Washington, D.C., before the Chief Medical Director approves or disapproves of the Summary Review PSB's recommendation. Dr. Zaky's second principal argument attacking the impartiality of the Board merely contended that the postponement of the Summary Review from April 15 to July 14, 1982 raised an issue as to the validity of the charges and the motives of those who made them. The court found that the delay did not undermine the fairness of the review proceedings because it gave Dr. Zaky additional time to "iron out his differences with his superiors."
II.
A. First Amendment
29
As an initial matter, we address Dr. Zaky's argument that "the trial court erred by avoiding consideration of plaintiff's claim that his request for a grievance hearing played a substantial and motivating role in the decision to discharge him." An examination of the record reveals that the plaintiff moved for partial summary judgment on his Fifth Amendment and Sec. 4106 claims and that the defendant's motion for summary judgment focused on Zaky's statements concerning patient care rather than the request for a grievance hearing.
30
"As we have recently emphasized, 'the district court need not investigate the evidence for arguments that might possibly support the plaintiff's claim; it was the plaintiff's responsibility to raise the arguments that it seeks to use now on appeal.' 'In our view, the trial judge may properly depend upon counsel to appraise him of the issues for decision. He is not obligated to conduct a search for other issues which may lurk in the pleadings.' "
31
Erff v. MarkHon Industries, Inc., 781 F.2d 613, 618 (7th Cir.1986) quoting Libertyville Datson Sales, Inc. v. Nissan Motor Corp., 776 F.2d 735 (7th Cir.1985) and Desert Place, Inc. v. Salisbury, 401 F.2d 320, 324 (7th Cir.1968). Since Zaky failed to present to the district court arguments and evidence supporting his theory that the defendants retaliated against him for requesting a grievance hearing, we hold that the district court did not err in failing to address this issue. Our review is confined to the plaintiff's argument that in finding that his statements were made as "part of an internal process of policy determination within the Medical Center," the court "excluded privately-expressed statements on medical issues from First Amendment protection." Additionally, we address Dr. Zaky's contentions that the court erred in finding that his statements did not address a matter of public concern.
32
"[A] state cannot condition public employment on a basis that infringes the employee's constitutionally-protected interest in freedom of expression." Connick v. Myers, 461 U.S. 138, 142, 103 S.Ct. 1684, 1687, 75 L.Ed.2d 708 (1983). When public employees press claims alleging that their First Amendment rights were denied by a public employer, the court must strike "a balance between the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees." Pickering v. Board of Education, 391 U.S. 563, 568, 88 S.Ct. 1731, 1734-35, 20 L.Ed.2d 811 (1968). The courts' concern with protecting the First Amendment rights of public employees rests on the First Amendment goal of "assur[ing] unfettered interchange of ideas for the bringing about of political and social changes desired by the people. Speech concerning public affairs is more than self-expression; it is the essence of self-government." Connick, 461 U.S. at 145, 103 S.Ct. at 1689 (citations omitted).
33
Judicial oversight, however, is limited to protecting employee speech on matters of public concern.
34
"[W]hen a public employee speaks not as a citizen upon matters of public concern, but instead as an employee upon matters only of personal interest, absent the most unusual circumstances, a federal court is not the appropriate forum in which to review the wisdom of a personnel decision taken by a public agency allegedly in reaction to the employee's behavior. Our responsibility is to ensure that citizens are not deprived of fundamental rights by virtue of working for the government; this does not require a grant of immunity for employee grievances not afforded by the First Amendment to those who do not work for the State.
35
* * *
36
* * *While as a matter of good judgment, public officials should be receptive to constructive criticism offered by their employees, the First Amendment does not require a public office to be run as a roundtable for employee complaints over internal office affairs."
37
Connick, 461 U.S. at 147, 149, 103 S.Ct. at 1690, 1691. Indeed, courts addressing First Amendment claims by public employees must heed "the common-sense realization that government offices could not function if every employment decision became a constitutional matter." Id., at 143, 103 S.Ct. at 1688. In Egger v. Phillips, 710 F.2d 292 (7th Cir.1983), our court noted:
38
"[W]hile the employer has a general interest in maintaining a work environment conducive to effectuating the agency mission, under the Pickering calculus, certain aspects of the particular employment milieu are especially germain....:
39
(1) The need to maintain discipline or harmony among co-workers; (2) the need for confidentiality; (3) the need to curtail conduct which impedes the [employee's] proper and competent performance of his daily duties; and (4) the need to encourage a close and personal relationship between the employee and his superiors, where that relationship calls for loyalty and confidence."
40
Egger, 710 F.2d at 319. See also, Linhart v. Glatfelter, 771 F.2d 1004, 1009 (7th Cir.1985) ("The state or municipality may not punish an employee for speaking out on a matter of public concern provided that the government's interest in efficient operation does not outweigh the importance of the right to speak in the individual case."); O'Brien v. Town of Caledonia, 748 F.2d 403, 407 (7th Cir.1984) ("In Connick the court emphasized the government's legitimate interest in controlling employee's communications which are disruptive of internal operations. Furthermore, the public's interest in the subject matter of the communication was deemed to be of limited weight when the topic was primarily a private concern of the employee").
41
Thus, the focus of the court's inquiry is "whether the personnel action was based on legitimate personnel concerns or rather was based on a naked desire to punish an individual for expressing a certain point of view." Egger, 710 F.2d at 320.
42
"[T]he Connick test does not consist in looking at what might incidently be conveyed by the fact that an employee spoke in a certain way. The test requires us to look at the point of the speech in question: Was it the employee's point to bring wrongdoing to light? Or to raise other issues of public concern, because they are of public concern? Or was the point to further some purely private interest?"
43
Linhart, 771 F.2d at 1010 (emphasis in original). To determine whether an employee's speech addressed a matter of public concern, the court must consider "the content, form, and context of the given statement, as revealed by the whole record." Connick, 461 U.S. at 147-48, 103 S.Ct. at 1690. "The reasons behind an employment decision will not be scrutinized unless a speech or other conduct can be 'fairly characterized as constituting speech on a matter of public concern.' " Patkus v. Sangamon-Cass Consortium, 769 F.2d 1251, 1257 (7th Cir.1985), quoting Connick, 461 U.S. at 146, 103 S.Ct. at 1689.
44
Initially, we addressed the plaintiff's argument that the district court "excluded privately-expressed statements on medical issues from First Amendment protection." An examination of the district court's analysis of the First Amendment claim reveals that the court in fact rejected an argument that quality of patient care is, per se, a matter inherently of public concern and held that the context of the statement must be considered in addition to the content, i.e., quality of patient care. The court determined that "Dr. Zaky's statements were made in the course of internal hospital business involving the determination of which procedures would be used at the Medical Center." The court concluded that because Dr. Zaky's comments were made as part of an internal process of policy determination, they were not "a matter of public concern for precisely that reason, even though similar statements in a different context may have appealed to the public's general interest." Our review of this portion of the opinion reveals that the district court judge performed the analysis mandated by Connick: determining whether the point of the speech in question was to bring wrongdoing to light or merely to address internal office affairs. We discern no intent on the part of the district court judge to "exclude privately-expressed statements on medical issues from First Amendment protection."
45
Zaky attacks the district court's holding, that his speech was made during the course of an internal process of policy determination and that the majority of the statements were made in defense of the numerous complaints lodged against him, by arguing that the content of the speech, quality of patient care, outweighed the employer's interest in the efficient delivery of public services. Additionally, Dr. Zaky contends that he did not disrupt the functioning of the Medical Center when he presented his views. Initially, we note that Dr. Zaky, in effect, seems to be arguing that the importance of patient care is so great that his First Amendment interest in statements concerning quality of the patient care can never be outweighed by the employer's interest in efficiently delivering medical services. Dr. Zaky has not cited, and our research has failed to reveal, any legal authority for his proposition that speech concerning the quality of patient care always outweighs the employer's interests in a court's analysis of whether the speech is a matter of public concern. Moreover, an examination of the record reveals ample support for the district court's conclusion that the statements concerning quality of care were made in defense of numerous complaints against Zaky and were "statements ... made in the context of an employee protecting his job, a matter of personal interest." The memorandum to the Chief of Staff, Dr. Haan (who was Dr. Venkatachala's superior) was written two days after Dr. Venkatachala charged Zaky with abandoning the patient with severe bradycardia. Indeed, the record is replete with complaints about Zaky's inability to communicate or cooperate with other members of the Medical Center staff. Further, Dr. Zaky's contention that he did not disrupt the functioning of the Center is negated by Dr. Haan's comment on his Proficiency Evaluation that "five members of the medical staff ... are so unhappy that they are considering departing from the hospital unless some adjustment can be made in regard to their relationship with Dr. Zaky." Based upon the numerous complaints about Dr. Zaky, evidence that his comments and behavior disrupted the functioning of the Medical Center and the fact that the resuscitation memorandum was written two days after Dr. Venkatachala charged Dr. Zaky with abandoning a seriously-ill patient, we hold that the district court correctly determined that Dr. Zaky's statements about the quality of patient care did not address a matter of public concern.
B. Fifth Amendment Liberty Interest
46
Zaky argues that his "liberty was injured by separation and by allegations which harmed his good name, reputation, honor, and integrity." According to Zaky, the defendants' description of him as "emotionally unstable, undependable, unethical, insubordinate, unable to get along with all categories of personnel, nurses and doctors alike, to the extent that he caused disruption of the medical service in the cardiac lab," damaged his standing and associations in the medical community, branded him with a "badge of infamy" and "foreclosed his chances for federal and non-federal employment." The Supreme Court has held:
47
"The requirements of procedural due process apply only to the deprivation of interests encompassed by the Fourteenth Amendment's protection of liberty and property. When protected interests are implicated, the right to some kind of prior hearing is paramount, but the range of interests protected by procedural due process is not infinite."
48
Board of Regents v. Roth, 408 U.S. 564, 569-70, 92 S.Ct. 2701, 2705, 33 L.Ed.2d 548 (1972). We reviewed liberty interest claims in the context of federal employment in Perry v. Federal Bureau of Investigation, 781 F.2d 1294 (7th Cir.1986).
49
"In the ... situation of a firing or failure to rehire a government employee, a liberty interest is implicated if 'either (1) the individual's good name, reputation, honor or integrity are at stake by such charges as immorality, dishonesty, alcoholism, disloyalty, communism or subversive acts or (2) the state imposes a stigma or other disability on the individual which forecloses other opportunities."
50
Id. at 1300 quoting Munson v. Friske, 754 F.2d 683, 693 (7th Cir.1985); see also Hadley v. County of DuPage, 715 F.2d 1238, 1244 (7th Cir.1983).
51
Initially, we note that the district court failed to analyze the statements about Dr. Zaky to determine whether they impugned his moral character or diminished his future employment opportunities so significantly that his liberty interest in future employment was implicated. The court, instead of engaging in careful analysis, merely "agree[d] with Dr. Zaky that a liberty interest is involved in a situation where the accusations against a probationary physician are potentially available to future employers." According to the district court, Dr. Zaky's Fifth Amendment due process rights were satisfied by his opportunity to respond to stigmatizing statements in his personnel file. "The inclusion of Dr. Zaky's written statement to the Summary Review Professional Standards Board in the record guarantees Dr. Zaky that any future employer will have both sides of the story so that ... his opportunities for future employment will not be unconstitutionally limited." We cannot approve of the district court's assumption that a liberty interest is involved in a situation where "the accusations against a probationary physician are potentially available to future employers;" alleged violations of asserted infringements of a liberty interest of a discharged employee must be analyzed to determine whether statements concerning the employee, made during the discharge, either impugned the employee's moral character or diminished his future employment opportunities so significantly that his liberty interest in future employment was implicated. Hadley v. County of DuPage, 715 F.2d 1238 (7th Cir.1983). Indeed, the district court ignored numerous cases holding that "a liberty interest is not implicated merely by a reduction in an individual's attractiveness to potential employers." Perry, 781 F.2d 1302; Roth, 408 U.S. at 575 ("It stretches the concept of liberty too far to suggest that a person is deprived of 'liberty' when he simply is not rehired in one job but remains as free as before to seek another"); Schware v. Board of Bar Examiners, 353 U.S. 232, 238, 77 S.Ct. 752, 756, 1 L.Ed.2d 796 (1957) ("not every negative effect upon one's attractiveness to future employers violates due process if it results without a hearing.") However, we need not reverse the district court because of its failure to analyze the magnitude of the effect of the remarks on the employee's chances of obtaining future employment in view of the fact that the district court correctly held that Zaky received all the process that was due. " '[W]hat procedures due process may require under any given set of circumstances' varies with a 'determination of the precise nature of the government function involved as well as the private interest that has been affected by governmental action.' " Greene v. Finley, 749 F.2d 467, 470 (7th Cir.1984) (quoting Larry v. Lawler, 605 F.2d 954, 959 (7th Cir.1978)). "The function of a due process hearing is 'to provide the person an opportunity to clear his name.' " Perry, 781 F.2d at 1303 quoting Roth, 408 U.S. at 573 n. 12, 92 S.Ct. at 2707 n. 12. The inclusion of the employee's denials and explanations in the memorandum containing the employer's allegedly objectionable statements may satisfy the employee's due process rights in that it "provides the person an opportunity to clear his name." See Perry, 781 F.2d at 1303. We agree with the district court's conclusion that the inclusion of Dr. Zaky's statement in the record protected his interests in preserving his reputation. Accordingly, even if we were to assume that the statements made during Dr. Zaky's discharge implicated his liberty interests in obtaining future employment, we hold that he received all the due process protection he was entitled to under the circumstances.
C. Section 4106
52
Dr. Zaky raises numerous arguments in support of his position that he did not receive the fair and impartial proceeding mandated by 38 U.S.C. Sec. 4106. A review of the district court's thorough and well-reasoned analysis of the Sec. 4106 claim reveals that several of the plaintiff's arguments were not raised in the district court. Accordingly, we limit our discussion to those arguments that were presented to the trial court and renewed in this court: (1) whether the charges in the June 18, 1982 notice letter were vague, frivolous, and arbitrary; (2) whether the presence of Drs. Venkatachala and Haan on the March 15, 1982 periodic review PSB "undermined the fairness of the entire review process" because of their alleged bias and prejudice toward the plaintiff; (3) whether the delay of the Summary Review PSB from April 15, 1982 to July 14, 1982 undermined the fairness of the review process; and (4) whether the July 14, 1982 Summary Review PSB was impartial.
53
The district court reviewed the June 18, 1982 letter giving notice of the charges and found that the "letter specified both the date of the alleged deficient action by Dr. Zaky and a description of the specific acts which Dr. Zaky did. Thus, the allegations were not vague." The district court judge concluded that the charges were neither frivolous nor arbitrary because the Summary Review PSB had found all of the allegations sustained by the evidence. As to the argument that the presence of Drs. Haan and Venkatachala on the March 15, 1982 periodic review PSB "undermined" the fairness of the review process, the district court noted that their presence could not undermine the entire review process because the regulations provided for three independent tiers of review and that the Summary Review PSB's recommendation must be approved by the Chief Medical Director in the Veteran's Administration's Central Office. Furthermore, the court rejected Zaky's argument that the postponement of the Summary Review PSB undermined the fairness of the review process, concluding that "it is clear that the postponement was effectuated for Dr. Zaky's benefit. It gave him additional time to iron out his differences with his superiors, and promised that the postponed review would consider his record up to the date of the review, so that if he exhibited improvement in his attitude and actions, the PSB would be able to review those facts." Finally, the court dismissed Zaky's allegation that the July 14, 1982 Summary Review PSB was not impartial, finding that "the members of the July 14, 1982 Summary Review PSB which actually began the separation process were not people who Dr. Zaky alleged harbored any potential prejudice against him. Thus, the court finds that no lack of fairness or impartiality influenced the decision to separate Dr. Zaky."
54
On appeal, Zaky failed to advance arguments demonstrating either factual or legal error in the court's analysis of these issues. Accordingly, we affirm the district court's conclusion that: (1) the charges in the June 18, 1982 notice letter were neither vague, frivolous, nor arbitrary; (2) the presence of Drs. Venkatachala and Haan on the March 15, 1982 periodic review PSB did not "undermine the fairness of the entire review process;" (3) the delay of the Summary Review PSB from April 15, 1982 to July 14, 1982 did not undermine the fairness of the review process; and (4) the July 14, 1982 Summary Review PSB was impartial.
55
The decision of the district court is AFFIRMED.
1
Zaky failed to appeal the district court's rejection of his claims that his discharge was unlawful under the Age Discrimination in Employment Act, 29 U.S.C. Sec. 621 et seq; Title VII of the Civil Rights Act, 42 U.S.C. Sec. 2000e, et seq; and his claim that the decision to terminate his employment was arbitrary and capricious in violation of the Administrative Procedure Act, 5 U.S.C. Sec. 706
| {
"pile_set_name": "FreeLaw"
} |
FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
_____________________________
Nos. 1D18-4886
1D19-87
_____________________________
ERVIN J. LEWIS,
Appellant,
v.
OFFICE OF THE PUBLIC
DEFENDER,
Appellee.
_____________________________
On appeal from the Circuit Court for Leon County.
John C. Cooper, Judge.
August 23, 2019
PER CURIAM.
We reverse the trial court’s order dismissing Appellant’s
petition for writ of mandamus and remand for an evidentiary
hearing on the contested issue of whether Appellee had the
requested public records in its possession. See Ferrier v. Pub. Def.’s
Office, 2d Jud. Cir. of Fla., 171 So. 3d 744 (Fla. 1st DCA 2015). We
also reverse the trial court’s order denying Appellant’s request for
costs and remand for reconsideration after further proceedings on
Appellant’s mandamus petition.
REVERSED and REMANDED.
MAKAR, KELSEY, and JAY, JJ., concur.
_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
_____________________________
Ervin J. Lewis, pro se, Appellant.
Andy Thomas, Public Defender, and Steven L. Seliger, Assistant
Public Defender, Tallahassee, for Appellee.
2
| {
"pile_set_name": "FreeLaw"
} |
430 F.Supp. 1299 (1975)
ATLANTIC RICHFIELD COMPANY, Plaintiff,
v.
CRA, INC., Defendant.
Civ. A. No. CA-6-74-10.
United States District Court, N. D. Texas, San Angelo Division.
September 19, 1975.
*1300 W. B. Browder, Jr., Stubbeman, McRae, Sealy, Laughlin & Browder, Harrell Feldt, Midland, Tex., for plaintiff.
Bryan W. Scott, Urban, Coolidge, Pennington & Scott, Houston, Tex., Ralph E. Hoke, Kansas City, Mo., Michael D. Stewart, Thomas J. Sims, Houston, Tex., for defendant.
MEMORANDUM OPINION
WOODWARD, District Judge.
This action was filed originally in the 51st Judicial District of Texas in and for Irion County. Defendant, CRA, Inc. (CRA) subsequently removed the case to this court. The parties to this suit are citizens of different states, the amount in controversy exceeds $10,000.00, and this court has jurisdiction under 28 U.S.C. § 1332.
The above case was tried before the court without a jury on the 26th and 27th days of August, 1975, with representatives of all parties and their attorneys present at such time. After hearing and considering the evidence, the briefs and arguments of counsel, the court files this memorandum which shall constitute the court's findings of fact and conclusions of law in support of the judgment hereinafter ordered to be entered. In addition, all of the stipulations and agreements of the parties as to the facts in this case are incorporated herein as a part of the court's findings of fact.
In 1958 and 1959, two contracts, Plaintiff's Exhibits 1 and 2, were consummated between plaintiff Atlantic Richfield Company's (ARCO) predecessor in interest as the seller or producer, and the defendant CRA's predecessor in interest as the purchaser or processor under said contracts. The subject matter of the contracts was the production and processing of casinghead gas from oil wells on certain leases belonging to ARCO in Irion County, Texas.
The casinghead gas, by the terms of these contracts, was to be delivered into the gathering system of CRA and then processed in the Mertzon plant so as to remove the natural gasoline, propane and butane, known collectively as "plant products." In the 1958 contract, Plaintiff's Exhibit 1, the then owner conveyed and assigned to CRA a 60% interest in all of the liquid hydrocarbons recovered from the casinghead gas. In the 1959 contract, Plaintiff's Exhibit 2, title to 100% of the casinghead gas produced from said wells was transferred by the owner to the processor. For the purpose of payment, each contract provided that a test would be run on the gas stream at the point of delivery *1301 in order to determine the amount of natural gasoline contained in the casinghead gas on a thousand cubic feet basis. Two alternative methods of testing were specifically named in the contract the charcoal test or the field compression test. Once the amount of natural gasoline was determined, 40% of this natural gasoline was to have been allocated and paid to ARCO at a specified rate. The 1958 contract contained a formula to be used in determining the amount of processed natural gasoline for which ARCO was to be paid. Even though the 1959 contract contained no such formula for the allocation of natural gasoline, the natural gasoline under both contracts was allocated on the basis of the 1958 contract formula. An identical method of payment for butane and propane was provided, with one significant exception. Because neither the charcoal nor field compression test would indicate the exact amount of butane and propane in the casinghead gas, the contract set forth a formula for determination of the amount of such butane and propane to be allocated to ARCO by the processor. This formula was a ratio which was based upon the measurable product natural gasoline. The formula had as its numerator the total quantity of ARCO's test gallons of gasoline contained in the casinghead gas as measured by either the charcoal or field compression test at the delivery point. The denominator consisted of the total quantity of test gallons of gasoline contained in the casinghead gas delivered from all delivery points connected to the plant, from ARCO's leases and wells as well as oil wells owned by others. Thus, the ratio was nothing more than a proportion of natural gasoline produced by ARCO to the natural gasoline produced by all other producers in the Mertzon gathering system. This fraction then would be multiplied by the total quantity of each separate product processed by the plant, and ARCO would be paid for 40% of this figure.
The allocation of butane and propane by a ratio based on natural gasoline content was done because no test at that time accurately measured the butane and propane content. At some later time, in the early 1960's, the chromatograph test, one which could measure the butane and propane content, came into use. Nevertheless, at the time of the consummation of the contracts, the charcoal and field compression tests were the accepted methods for such tests used in the industry.
The tests provided for in the contract were to be run semiannually by an independent testing company, the Petroleum Analytical Laboratories Services (PALS). The evidence shows that during the period of time that CRA has been operating the Mertzon plant, from August 1968 to the present, PALS performed both field compression tests and chromatograph tests. At least some of the PALS reports showing the results of these semiannual tests were mailed to ARCO and ultimately were given to their accounting department. These particular reports of the semiannual tests are contained in Plaintiff's Exhibit 3 and they show the fractional analysis resulting from chromatograph tests that were made of natural gasoline, butane and propane. Additionally, monthly statements showing the net amount due to ARCO each month were mailed by CRA to ARCO; these are shown by Plaintiff's Exhibits 3 through 9.
The court finds that the chromatograph test is more accurate of the three tests involved in this trial but that the chromatograph test was not provided for in the contracts. Furthermore, it has been proven that the use of the contract formula for allocation of butane and propane in some cases could result in an allocation to ARCO by CRA of an amount that would be in excess of 40% of the butane and propane contained in ARCO's casinghead gas as indicated by the chromatograph test. This could result in an obvious hardship to CRA, for it would be allocating more than 40% of the butane and propane as shown by chromatograph and CRA would be retaining less than 60% of the butane and propane as shown by chromatograph.
The evidence is clear and the court finds that CRA did not use the formula set forth in the contracts in order to determine the *1302 amount of payment to ARCO for butane and propane. Rather, CRA used the chromatograph test to allocate butane and propane to ARCO for the purpose of payment. The allocation based on the chromatograph normally was less than an allocation based on the contract formula.
ARCO has brought this suit against CRA and has alleged that if the contract formula had been used to compute the payment due to ARCO for its 40% interest in plant products then ARCO would have received an additional $131,402.10. The proof in this case supports the finding of this court that had the contract formula strictly been applied that ARCO indeed would have been paid an additional $131,402.10 over the period in question. ARCO also has complained that CRA further violated the contract by using the chromatograph test rather than the charcoal or field compression test. The use of chromatograph test to measure the natural gasoline content for use in the contract formula, however, would make no actual difference in the amount of payment to ARCO. Although the chromatograph test shows approximately 20% higher natural gasoline content than either the charcoal or field compression test, the ratio in the contract formula would remain the same because both the numerator and the denominator would be increased by 20%. So the actual financial loss resulted to ARCO not because of the use of the chromatograph test, although technically this was a violation of the contract, but because CRA used the chromatograph tests results to allocate butane and propane rather than using the contract formula as a method of allocation. Accordingly, ARCO claims that these amounts should be recomputed in strict accordance with the contract formula and the difference between the recomputed amounts and the amounts actually paid should be paid to it as its damages plus pre-judgment interest.
CRA readily admits that it did not allocate the propane and butane by the contract formula but rather on the basis of the results of the chromatograph test. Justification for what amounts to a departure from the terms of the contract is founded upon two contentions: first, contradictory clauses in the contracts should permit an interpretation thereof which would allow allocation by chromatograph; and, second, ARCO should be estopped from claiming a breach of contract.
CRA maintains that the conveyance clause and the settlement clause in each contract are repugnant. The conveyance clauses convey 60% of the plant products in one contract and 100% in the other while the settlement clauses provide a method of settlement for propane and butane based upon the natural gasoline content. The contradiction contended is that through the application of the settlement formula ARCO would receive more than its 40% of the proceeds of the sale of the product. Measurement by chromatograph, which admittedly is the most accurate test, shows the "actual" content of propane and butane; the contract formula doesn't measure propane and butane actually contained in the gas stream, but is used to allocate and is based on natural gasoline content. Consequently, the amount of butane and propane allocated by formula often exceeds the amount of propane and butane contained as indicated by chromatograph. Thus, because ARCO often would be allocated more than 40% if the formula was applied, CRA contends that the clauses are in conflict and the contract should be interpreted to effectuate the intent of the parties that ARCO was to receive not more than 40% of the products. Because the chromatograph test is the most accurate, CRA feels that its use is justified.
The court, however, does not construe these provisions of the contracts to be in conflict. The provision that CRA would own 60% and that ARCO would own 40% is not repugnant to a provision that ARCO would be paid for its 40% on the basis of the formula set forth. The formula given is nothing more than the method of arriving at the amount of payment to ARCO for its retained interest. CRA contracted to pay for this retained interest on the basis of a certain test and a certain formula, both of *1303 which are set forth clearly in the contract. CRA cannot be relieved of its burden of compliance with the contract simply because a new, more accurate test has been developed. Although the chromatograph is more accurate than the field compression or charcoal tests, and it would allocate the products more accurately than does the contract formula, it was not the method of testing or the method of allocation provided for in the contracts.
As its second justification for noncompliance with the contracts, CRA claims that ARCO should be equitably estopped from insisting upon the application of the contract formula. For the doctrine of equitable estoppel to apply, there are certain elements which must be present. The person against whom the estoppel is to apply must have actual or constructive knowledge of the facts and must have induced, through his words or conduct, another to rely upon the purported representation. The party seeking to assert estoppel must have had neither knowledge nor a reasonable means or opportunity of obtaining knowledge of the facts and must have relied upon the other party's representations to his detriment. See Barfield v. Howard M. Smith Company, 426 S.W.2d 834, 838 (Tex.1968); Champlin Oil & Refining Co. v. Chastain, 403 S.W.2d 376, 385-86 (Tex. 1965). The party seeking to assert estoppel has the burden of proving each and every element thereof. Barfield v. Howard M. Smith Company, supra.
CRA has attempted to satisfy its burden in the following manner. ARCO supposedly knew or should have known that CRA was using the chromatograph test and that this test and not the formula was being used to allocate propane and butane. In support thereof, CRA relied upon the semiannual reports submitted to ARCO. These PALS reports show a fractional analysis of the gas products, a breakdown that can only be provided through the use of the chromatograph test. Therefore, when ARCO received these reports, it should have known that the chromatograph test was being used.
Although the PALS reports were structured in this manner, other evidence tends to overshadow this fact. First, Plaintiff's Exhibits 16 and 17 show that the contractually proper compression test by PALS was used and formed the basis of some reports as late as June 1, 1970. Next, in contrast to the frequency of the semiannual reports, ARCO was receiving monthly settlement statements from CRA. No witness was able to state that there was anything on the monthly settlement statements to indicate what type of test had been used. Furthermore, witnesses for the defendant stated that in order to ascertain what allocation method was being used to compile the monthly settlement statements, ARCO would have had to have had the PALS reports, the monthly settlement statements, and either the work papers of CRA or a statement of total production of such products from the plant. ARCO had neither of these last two items.
In connection with the nonconclusive nature of the monthly settlement statements, the court would point out that these statements indicate thereon the percentage of natural gasoline that was used in reaching the settlement. These statements contain nothing about a percentage allocated for settlement purposes for butane and propane, even though the use of the chromatograph test would so indicate. If these statements are not outright deceptive, they are certainly such as to lead an ordinary, reasonable producer of gas to believe that the contract formula was being used, for it is that formula that had as its basis the natural gasoline percentage. Consequently, the court finds that ARCO did not have in its possession and CRA never furnished to ARCO sufficient facts, reports, or information that would enable ARCO to determine whether or not the contract formula was being employed by CRA in its monthly payments.
CRA has attempted to saddle ARCO with constructive knowledge of the failure of the processor to use the contract formula. An audit of CRA's predecessor in interest was conducted by ARCO in 1964; the *1304 contention is that by virtue of this audit ARCO, had it utilized a reasonable inquiry, should have learned that the contract formula was not being used in the monthly settlement statements. CRA's contention once again is not supported by the facts. The purpose of the audit was not to check compliance with the contract formula, but to determine whether or not a three year pay out period had expired or had been extended by a force majeure clause. Also, the audit was shortened in part by the uncooperative attitude of the processor. The fact that ARCO could have demanded additional documents to lead into an investigation of compliance with the contract formula is not sufficient within itself to shoulder ARCO with constructive knowledge of noncompliance. At the time of the audit, there was no reason for ARCO to suspect noncompliance by the processor, the scope of the audit did not encompass noncompliance, and the duration of the audit was inadequate to afford such an investigation. ARCO cannot be held to be in constructive knowledge of the processor's noncompliance with the contract formula by virtue of the fact of the 1964 audit.
CRA finally has shown that on certain occasions some ARCO employees witnessed PALS conduct chromatograph tests. CRA asserts that this constitutes knowledge by ARCO of noncompliance with the contract formula, but this assertion also must fail. First, the ARCO employees also witnessed PALS conduct field compression tests, as provided for in the contract. Second, the use of the chromatograph test by itself doesn't mean that the contract formula was not being used. The chromatograph test could be used to determine the natural gas content, and the allocation method provided in the contract could be used at that point. The mere witnessing of a chromatograph test, in addition to the field compression test, does not permit a finding or inference that ARCO had knowledge that the formula called for in the contract was being ignored.
It thus can be seen that CRA has failed to uphold its burden of proof of the elements of estoppel, for it has failed to provide sufficient evidence to show that ARCO either knew or should have known of the allocation by chromatograph test rather than by the contract formula. In this connection, the court would point out the factual distinction between this case and Champlin Oil & Refining Co. v. Chastain, supra, upon which the defendant relied heavily. In Champlin the processor sent a letter which notified the producers of a discrepancy between the contract allocation method and the allocation method utilized by the processor, and which asked for objections or questions concerning the procedure. Thus, by virtue of this letter, the producer could be reasonably expected to know of the discrepancy. In the present case, however, there is nothing that would allow the court to find that ARCO had sufficient knowledge or could reasonably have been expected to have knowledge after due diligence and inquiry of the allocation method used by CRA.
CRA next has pled the application of the four year statute of limitations. Tex. Rev.Civ.Stat.Ann. art. 5527. The plea is futile however, for the court finds that the statute is tolled. CRA has committed certain acts and filed certain reports, that would in fact mislead ARCO into believing that the contract formula was being used. Again the court refers to the monthly settlement reports which indicate that the natural gasoline content was being used to allocate propane and butane. Also, ARCO's employees witnessed the taking of field compression tests. The information given on the monthly settlement statements, the witnessing of the field compression test on at least two occasions, and the failure of CRA to give sufficient reports and data which would enable ARCO to determine whether or not the contract formula was being used all compel the court to find and conclude that ARCO was misled through fraudulent concealment and the statute was tolled. Hickok Producing & Development Co. v. Texas Co., 128 F.2d 183 (5th Cir. 1942); Phillips Petroleum Co. v. Johnson, 155 F.2d 185 (5th Cir. 1946); Tex.Rev.Civ. Stat.Ann. art. 5527.
*1305 CRA has claimed further that if ARCO should prevail, then the contract should be construed strictly and the payments should be based on the charcoal or field compression test. Since the chromatograph test usually results in figures about 20% higher than those obtained in the other tests, CRA contends that it is entitled to an offset in the amount of the excess payments. Even though the chromatograph test results are 20% higher, however, the allocation to ARCO based upon the contract formula should not be reduced, for a fraction with a numerator increased by 20% and a denominator increased by 20% remains the same fraction. Had the defendant paid the plaintiff for natural gasoline on the basis of the chromatograph results, without applying any formula, the plaintiff would have been overpaid for natural gasoline since a field compression test or charcoal test, as called for in the contract, would have provided for lesser payments to the plaintiff. But defendant is not entitled to an offset because the evidence shows that, although the 1959 contract did not call for the application of the formula, this was the method actually used in computing the amount of natural gasoline in both the 1958 and 1959 contracts. As heretofore indicated, the use of a formula on the basis of the chromatograph test or on the basis of the test provided for in the contract will result in the same payment to plaintiff for natural gasoline because by the application of this formula the numerator and denominator are proportionately increased and result in the same fraction. Therefore, the defendant's claim for offset based solely upon the use of the charcoal or field compression test is not a valid basis for any offset. Consequently, there has been no overpayment that would entitle CRA to an offset.
ARCO has claimed that it is entitled to pre-judgment interest, and this court concludes that it is so entitled in the amount of $25,206.08, which is the amount of interest at the regular rate computed from the date of payment each month during the period in contest in this case. The monthly sums due to ARCO were liquidated, readily ascertainable by the contract, and interest on such sums is proper. Tex. Rev.Civ.Stat.Ann. art. 5069-1.03.
The court finally concludes that the contract in question is a "special contract" and attorneys fees are not allowable. Tex. Rev.Civ.Stat.Ann. art. 2226.
All costs will be taxed against the defendant.
A judgment will be entered accordingly.
| {
"pile_set_name": "FreeLaw"
} |
414 F.Supp. 354 (1976)
DANBURY BOWLARAMA CORP., Plaintiff,
v.
RCA CORPORATION et al., Defendants.
No. 76 CIV. 625 (MP).
United States District Court, S. D. New York.
May 13, 1976.
Milberg & Weiss, New York City, for plaintiff; by David J. Bershad, Sharon Levine Mirsky, and Paul L. Tullman, New York City.
Cahill, Gordon & Reindel, New York City, for defendant (RCA Corp.); by Lawrence J. McKay, Robert T. Quinn and Joel E. Davidson, New York City.
MEMORANDUM
POLLACK, District Judge.
Defendant RCA Corporation in this contract action asserting non-federal claims moves for dismissal of the complaint for lack of subject matter jurisdiction on the ground that the requisite diversity of citizenship is lacking.[1] On the facts adduced as shown hereafter, the motion must be granted.
Plaintiff sues for rescission of a sale of an automatic bowling scorer installed in a Danbury, Connecticut bowling center. Defendants, *355 the seller under the contract (Rapid Score, Inc.), the seller's parent (Conbow Corp.), and the assignee of the contract (RCA Corp.), are three corporations either incorporated or doing their principal business in New York. RCA contends that, while plaintiff, the purchaser of the bowling equipment, is incorporated in Connecticut, its principal place of business is New York.
Diversity jurisdiction is conferred on the federal courts when a suit involves citizens of different states and involves the requisite amount in controversy, and "[a] corporation [party] shall be deemed a citizen . . . of the State where it has its principal place of business . . .." 28 U.S.C. § 1332(c).
The burden of establishing jurisdiction is on the party who seeks the exercise of that jurisdiction, namely the plaintiff herein. Thomson v. Gaskill, 315 U.S. 442, 446, 62 S.Ct. 673, 675, 86 L.Ed. 951, 955 (1942); Quaker State Dyeing & Finish Co. v. ITT Terryphone Corp., 461 F.2d 1140 (3d Cir. 1972).
On this motion the issue is whether the plaintiff corporation has its principal place of business at its president's Port Chester, New York office, as indicated by all the corporate documents, or at the bowling center in Danbury, Connecticut, where its vice-president has a desk and he and the corporation's only other employee spend a third of their week.
The contract of sale involved in the suit lists the plaintiff corporation at a Port Chester, New York address. It was executed by Andrew Benerofe, Danbury Bowlarama Corporation's president and one of its directors, and a representative of Rapid Score in New York on January 17, 1974. In June of that year the equipment sold under the contract, a scorer, was installed in the Danbury bowling center and, according to the allegations of the complaint, began to malfunction shortly thereafter.
Defendant RCA, the assignee of the contract, claims to have serviced the scorer as required under the contract's warranty provisions, but such services were not apparently to plaintiff's satisfaction. Counsel for plaintiff sent a letter to all the defendants herein on December 29, 1975 purporting to revoke acceptance of and to tender back the scorer. This action for rescission, return of the contract price and consequential damages was filed in this Court in January of 1976.
Danbury Bowlarama Corporation leases a bowling and billiard center in Danbury, Connecticut. The only business of this corporation is to collect fees under a sub-lease or franchise agreement with Louis Spano and Ed Loughlin, the center's operators. The arrangement between plaintiff and Spano and Loughlin (who are doing business under the name "Danbury Bowlarama" but are not parties in this action) is that in addition to the sub-lease the plaintiff provides promotional and general business guidance through its vice-president, Bernard O'Kane, and provides a master mechanic, Joseph DiPasquale, in return for a fee or a rental based on the number of lines that are bowled.
O'Kane and DiPasquale, Danbury's only salaried employees, split their working week between the Danbury bowling center and three other centers run by three different corporations. Benerofe estimates that each visits the Danbury center at least three times a week and spends roughly a third of their working time there. O'Kane keeps a desk in an office at the Danbury bowling center which he shares with Spano and one of Spano's employees. However, he travels to Benerofe's New York office for at least two-thirds of the weekly meetings between these two officers. The remainder of these weekly meetings are held either in Danbury or at one of the other three bowling centers for which O'Kane is responsible.
Benerofe is the chief officer of the corporation and his office in New York is listed in the corporate by-laws as the principal office. It is from that office that Benerofe directs the activities of O'Kane and DiPasquale, both by telephone to O'Kane and in *356 most of the face-to-face meetings with O'Kane. While Benerofe asserts that he spends only two hours a week on Danbury Bowlarama Corporation matters, it is clear that his office is the focal point of the corporation's business affairs. The address of that office is listed on the corporation's federal and Connecticut corporate tax returns and the corporation's federal return was sent to the Internal Revenue Service office that handles Westchester County, New York, returns. The corporate records are all kept in New York and the corporation's accountants and lawyers do their business with that office. There have been no formal corporate minutes since 1966 when a meeting was recorded as held in New York for the election of officers.
It is from the New York office that Benerofe controls the plaintiff corporation's finances. He signs about 75% of the corporation's checks (leaving the remainder to be signed by O'Kane generally as a matter of Benerofe's convenience) and the bank statements from the corporation's two bank accounts, in Port Chester and Danbury, are directed to him at Port Chester. The bookkeeping for the corporation is done by a bookkeeper employed by Benerofe Construction who works in the New York office. (The plaintiff corporation pays Benerofe Construction for the use of its bookkeeper.) The address on the contract at issue here is that of the New York office and the letters concerning that contract that have been submitted to the Court, with only one exception, bear either the New York address or the address of plaintiff's New York counsel.[2]
In addition, three of the four directors and three of the four officers of the plaintiff corporation are residents of New York.
Shortly after the passage of the amendment to 28 U.S.C. § 1332(c) that provided that a corporation is to be deemed a citizen of the state in which it has its principal place of business, Judge Weinfeld of this District declared that
[t]he issue [regarding the location of its principal place of business] must be resolved on an over-all basis. It is governed by the totality of corporate activity at a given place, which, to borrow a phrase from another area of law, may be said to represent the `center of gravity' of corporate function. . . .
Where a corporation is engaged in far-flung and varied activities which are carried on in different states, its principal place of business is the nerve center from which it radiates out to its constituent parts and from which its officers direct, control and coordinate all activities without regard to locale, in the furtherance of the corporate objective. Scot Typewriter Co. v. Underwood Corp., 170 F.Supp. 862, 865 (S.D.N.Y.1959) [emphasis added].
While it is true that this corporation is not "far-flung" and that it boasts but one "constituent part" (namely, the bowling center itself), there is no doubt that its nerve center is the New York office. This conclusion is not undermined by the fact that Benerofe and O'Kane conduct occasional *357 meetings in Connecticut, or by a comparison of the relative amounts of time spent on the corporation's business. The fact remains that, while O'Kane is advising Spano and Loughlin, Benerofe is overseeing and directing O'Kane and the plaintiff corporation's finances from New York.
However, plaintiff contends that the Court should look to the locus of the corporation's physical operations rather than its nerve center in deciding this motion: i. e., it should determine which "state contains a substantial predominance of corporate operations, including personnel . . .." Inland Rubber Corp. v. Triple A Tire Service, Inc., 220 F.Supp. 490, 496 (S.D.N.Y.1963); see Kelly v. United States Steel Corp., 284 F.2d 850 (3d Cir. 1960) (where the Court held that the center of a corporation's production or service activities, rather than its policymaking, determines its principal place of business); Leve v. General Motors Corp., 246 F.Supp. 761, 764 (S.D.N.Y.1965).
In Egan v. American Airlines, Inc., 324 F.2d 565, 566 (2d Cir. 1963), a case that was decided after Inland, supra, and that distinguished Kelly, supra, on the grounds that "in that case over-all management control was split between New York and Pennsylvania," the Court of Appeals for this Circuit declared that there is no conflict between the decisions in Scot, supra, and Kelly, supra. It opted for a consolidated test, holding that the principal place of a corporation's business is that state in which it formulates its "`general over-all management and business policy'" and in which it "conducts a substantial [but not necessarily the majority of its] business." Egan, supra, at 565-6.[3]
More recently, when faced with a choice between the so-called nerve center and physical operations tests, Judge Lasker of this Court pronounced the former test the favored one in this District and distinguished Leve, supra, as a case in which the Court "found that only `occasional high level policy decisions' were made in New York with the bulk of policy functions, as well as manufacturing operations, concentrated in Michigan." Philip Morris, Inc. v. Sun Leasing Co., 371 F.Supp. 1233, 1234 (S.D.N.Y. 1974).
Whether the nerve center test is to be favored in all cases, that test, as it is explained in Egan, is the test most appropriate to the facts of this case. The physical operations or locus of services test is simply not an accurate measure of corporate activity when the actual physical or service-oriented operations of the corporation are as limited as those of the plaintiff. The usual corporate managerial tasks make up a far greater percentage of plaintiff's operations than is the case with a corporation that makes a product or provides a service as its main function. The main function of this corporation is to sub-lease a bowling center to another company, and management of plaintiff's own affairs is itself a substantial part of plaintiff's operations. The management and operation of the bowling center, on the other hand, is left to Spano and Loughlin, who receive only advice, consultation and some maintenance help from plaintiff.
Applying the test articulated in Egan, supra, the Court finds that New York is both the locus of the corporation's management and policy-making and the locus of a substantial portion of the plaintiff corporation's operations. Whatever the test applied, it is clear that the principal part of the corporation's overall functions is performed in New York.
Accordingly, since the principal place of the corporate plaintiff's business is New York and the defendants are likewise citizens of New York, the requisite diversity jurisdiction is lacking in this case.
Complaint dismissed, without prejudice to the merits.
SO ORDERED.
NOTES
[1] Defendant RCA also moves for dismissal of several counts of the complaint for failure to state a claim under state contract law. However, consideration of this challenge has been deferred in light of the resolution of the question as to subject matter jurisdiction.
[2] Defendant points particularly to a letter from Benerofe to the Credit Manager of Rapid Score dated September 19, 1975 which addressed the problem of how to handle the sales tax on the contract at issue in this case. In that letter Benerofe stated "The interpretation of the sales tax requirement that we now have is that since the equipment was purchased in the State of New York by a company whose principal place of business is in New York, it is within the jurisdiction of the New York State Sales Tax Law."
Though Danbury Bowlarama was named as the purchaser in the contract, Benerofe now claims that the actual purchaser, the company referred to in the letter, was a joint venture made up of New York residents and called Scoring Equipment Danbury. Plaintiff alleges that it was and is simply acting as the nominee for this joint venture.
It is clear under Rules 17(a) and 19, Fed.R. Civ.P., and 28 U.S.C. § 1332 that a court may not ordinarily disregard the citizenship of the "real party in interest" or an "indispensable" party. See Wright, Miller, Cooper, Federal Practice and Procedure, § 3606 at 624-8 (1975). While the Court cannot say on the basis of the record presently before it that this joint venture fits either description, the involvement of this New York entity in the contract does present another New York contact to support the Court's conclusion that, at the very least, the plaintiff will not be prejudiced by being obliged to resort to its state court remedies.
[3] The Court in Egan, supra, at 566, also observed that "the act [amending 28 U.S.C. § 1332(c) to include the principal place of business standard] was intended to reduce substantially the caseload of the federal District Courts based on diversity."
| {
"pile_set_name": "FreeLaw"
} |
722 F.Supp.2d 535 (2010)
STATE OF DELAWARE DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL, Plaintiff,
v.
UNITED STATES ARMY CORP OF ENGINEERS (USACOE), the Honorable John McHugh, Secretary of the Army, in his official capacity, the Honorable Jo-Ellen Darcy, Assistant Secretary of the Army, in her official capacity, Lt. Gen. Robert L. Van Antwerp, Jr., Commander, USACOE, in his official capacity and Lt. Col. Thomas Tickner, Commander, USACOE, in his official capacity, Defendants.
Civ. No. 09-821-SLR.
United States District Court, D. Delaware.
July 15, 2010.
*538 Joseph R. Biden, III, Attorney General, Jennifer D. Olivia, Deputy Attorney General, Kevin P. Maloney, Deputy Attorney General, Delaware Department of Justice, Wilmington, DE, for Plaintiff.
Ignacia S. Moreno, Environment and Natural Resources Division, Kent E. Hanson, Environmental Defense Section, and Kristofor R. Swanson, Natural Resources Section, United States Department of Justice, Washington, DC, for Defendants.
*539 MEMORANDUM OPINION
SUE L. ROBINSON, District Judge.
I. INTRODUCTION
This action follows the decision of the United States Army Corps of Engineers ("the Corps") to proceed with the deepening of the Delaware River pursuant to its Delaware River Main Stem and Channel Deepening Project ("the Deepening Project"). According to the Deepening Project, the Corps will dredge a portion of the Delaware River to deepen the channel from its established depth of forty feet to a depth of forty-five feet from the mouth of the Delaware Bay to the ports of Philadelphia and Camden. In its complaint, the Delaware Department of Natural Resources and Environmental Control ("DNREC") seeks injunctive and declaratory relief, alleging that the Corps' decision to proceed without obtaining the requisite federal and state approval violates numerous provisions of the federal and state regulatory process governing such activities. DNREC seeks to enjoin the Deepening Project until the Corps demonstrates its compliance with all applicable state and federal requirements. (Id.)
Currently pending before the court is DNREC's motion to expand the administrative record lodged by the Corps in support of its decision to proceed with the Deepening Project. (D.I. 74) The court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 1346 and 2201. Venue is proper pursuant to 28 U.S.C. § 1391. For the following reasons, the court denies DNREC's motion to expand the administrative record.
II. BACKGROUND
A. The Impairment Finding
The court incorporates by reference its previous memorandum opinions (D.I. 61; D.I. 63), which include a detailed recitation of the facts giving rise to the over-arching dispute. For brevity's sake, the court recounts by way of summary those facts relevant to the motion at bar. The Corps has, until recently, maintained the Delaware River's main navigation channel ("the channel") at a depth of forty feet. In 1983, Congress directed the Corps to evaluate the marked shift towards vessels with deeper drafts, as well as any effects this trend might bear upon the channel's continued viability as a shipping conduit to its ports. Pursuant to this directive, the Corps conducted various studies, finding that contemporary vessel design mandated a channel depth of forty-five feet. (See D.I. 4, ex. A) In response to these findings, Congress authorized the Deepening Project, which would entail the deepening of a 102 mile stretch of the channel to the Corps' recommended depth. See Water Res. Dev. Act of 1992, Pub.L. No. 102-580, § 101(6), 106 Stat. 4797, 4802.
In January 2001, consistent with its obligations under the Clean Water Act ("CWA"),[1] the Corps applied to DNREC for a subaqueous lands and wetlands permit in connection with the Deepening Project *540 ("the application"). (D.I. 33, Decl. of Pasquale at ¶ 8) DNREC hired an independent environmental consultant to conduct a public hearing on December 4 and 5, 2001 regarding the application. (Id.) The consultant subsequently found that the Corps' application suffered from several deficiencies. (Id.) DNREC received the consultant's recommendation to deny the application in December 2003.[2] (Id.)
On December 17, 2008, despite DNREC's failure to render a decision regarding the application, the Corps sought to address the concerns raised by the consultant in an Environmental Assessment ("the EA"). (D.I. 4, ex. I) The EA disclosed the Corps' review of environmental information generated since a previous report it made in 1997. (Id.) DNREC declined to comment on the EA, citing the short 1 month time frame allotted by the Corps for commentary, and instead proposed that the Corps submit a new application. (Id., ex. J)
On April 30, 2009, the Assistant Secretary of the Army issued a Memorandum of Record finding that "the State of Delaware's refusal to provide the subject State permit in a timely and responsible manner would interfere with navigation for the `upstream states,'" and "has impaired the Secretary of the Army's authority to maintain navigation as specifically directed by Congress in Public Law 102-580, section 101(6)" ("the impairment finding").[3] (D.I. 33, Decl. of Depasquale, ex. 5) The Corps understood the impairment finding to trigger the "navigation exception" found in CWA section 404(t), which exempts the Corps from regulation under the CWA and affiliated state programs. Accordingly, the Corps began soliciting contracts for the labor associated with the Deepening Project notwithstanding the absence of a subaqueous lands and wetlands permit. Three months later, on July 23, 2009, more than five years after the consultant's recommendation, DNREC denied the Corps' 2001 application for Delaware subaqueous lands and wetlands permits. (D.I. 34, ex. I)
B. Relevant Procedural History
On October 30, 2009, DNREC brought this action to enjoin the Corps from proceeding with the Deepening Project.[4] (D.I. 1) In its complaint, DNREC seeks declaratory and injunctive relief pursuant to, inter alia, the Administrative Procedure Act ("the APA") and alleges that the Corps' decision to proceed violates numerous regulatory provisions governing the Corps' activity including the CWA, the Clean Air Act ("CAA"), the Coastal Zone Management Act ("CZMA"), as well as Title 7, Chapters 72 (Wetlands), 66 (Water Quality) and 60 (Subaqueous Lands) of the Delaware Code. (D.I. 1) On January 27, *541 2010, the court granted in part and denied in part DNREC's motion for a preliminary injunction, allowing the first phase of the Deepening Project in Reach C to proceed, but enjoining the subsequent phases pending a full examination on the merits of DNREC's case. (D.I. 60; D.I. 61; D.I. 63) In preparation for judicial review on the substantive merits of DNREC's claims, the Corps lodged with the court an administrative record containing 48,000 pages of documents that purportedly form the basis for its decision to proceed with the Deepening Project. (D.I. 68) As the basis for its present motion to expand such, DNREC objects to the administrative record to the extent that it allegedly fails to include all of the information relied upon by the Corps in making the impairment finding.
III. STANDARD OF REVIEW
The APA defines the permissibility and scope of judicial review of agency actions challenged pursuant to its statutory confines. See FCC v. Fox TV Stations, Inc., ___ U.S. ___, 129 S.Ct. 1800, 1810, 173 L.Ed.2d 738 (2009). One of a limited few enumerated standards regarding such review provides that
[t]he reviewing court shall
(2) hold unlawful and set aside agency action, findings, and conclusions found to be
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law....
5 U.S.C. § 706(2)(A).
The Supreme Court has consistently maintained that an agency action challenged as arbitrary and capricious is subject to a "narrow" standard of review. See Fox TV, 129 S.Ct. at 1810; see also Motor Vehicle Mfrs. Ass'n of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). In this regard, "a court is not to substitute its judgment for that of the agency...." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (U.S.1971). Instead, the "reviewing court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285, 95 S.Ct. 438, 42 L.Ed.2d 447 (U.S.1974) (internal citations omitted).
Judicial review under the APA turns on a consideration of "the whole record or those parts of it cited by a party...." 5 U.S.C. § 706. The "whole record" consists of the full record that was "before the agency" at the time of the decision at issue. Overton Park, 401 U.S. at 420, 91 S.Ct. 814. The District Court for the District of Columbia has held that the record "before the agency" includes all documents and materials "directly or indirectly" considered by agency decision-makers. See Pac. Shores Subdivision Cal. Water Dist. v. United States Army Corps of Eng'rs, 448 F.Supp.2d 1, 4 (D.D.C.2006). Defining the available universe of review in this manner ensures the propriety of the court's inquiry. Compare Fund for Animals v. Williams, 245 F.Supp.2d 49, 57 n. 7 (D.D.C.2003) (noting that "interpreting the word `before' so broadly as to encompass any potentially relevant document existing within the agency or in the hands of a third party would render judicial review meaningless."), with Walter O. Boswell Memorial Hospital 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 ...").
It is the province of the agency to compile and submit the administrative *542 record for review by the court. Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743-44, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985). Indeed, "[c]ommon sense dictates that the agency determines what constitutes the `whole' administrative record because it is the agency that did the considering, and that therefore is in a position to indicate initially which of the materials were before itnamely, were directly or indirectly considered." Pac. Shores, 448 F.Supp.2d at 5 (citations and quotations omitted).
Because courts presume that, "[i]n the absence of clear evidence to the contrary, ... [public officers] have properly discharged their official duties," Overton Park, 401 U.S. at 415, 91 S.Ct. 814, an agency's designation of the administrative record is generally afforded a presumption of regularity. McCrary v. Gutierrez, 495 F.Supp.2d 1038, 1041 (N.D.Cal.2007) (citing Bar MK Ranches v. Yuetter, 994 F.2d 735, 740 (10th Cir.1993)). It is for these reasons that supplementation of the administrative record is an exceptional request. See NVE, Inc. v. Dep't of Health and Human Servs., 436 F.3d 182, 189 (3d Cir.2006); see also Pac. Shores, 448 F.Supp.2d at 5 ("[s]upplementation of administrative record is the exception, not the rule.").
IV. DISCUSSION
DNREC requests that the court add to the administrative record seventeen documents that it contends the Corps relied upon to make the impairment finding. (D.I. 74) Additionally, DNREC seeks both a declaration that the Corps has not provided a complete administrative record, as well as civil discovery from the Corps beyond the administrative record to ensure its completeness for the purposes of this litigation. (Id.) The court addresses each of DNREC's requests in turn.
A. Identified Documents
DNREC has identified seventeen documents that the Corps allegedly improperly excluded from the administrative record, (D.I. 75, ex. A) According to DNREC, each of these documents is "highly relevant" to the Corps' impairment finding. (D.I. 75 at 12) The Corps concedes that one of these documents is appropriately included in the record. (D.I. 77, ex. A at Tab 3) For ease of analysis, the court partitions the remainder of the documents based on whether the Corps created the document before or after the April 30, 2009 impairment finding.
1. Post-decisional documents
Several of the documents that DNREC seeks to add to the administrative record were created over a span of months after the Corps rendered the impairment finding. (See D.I. 77, ex. A at Tabs 9-16) DNREC first argues that these documents are properly included insofar as the commencement of dredging work in Reach C, which began on March 1, 2010, defines the proper cut-off date of the administrative record. The focus of the APA review is, of course, the administrative record that existed at the time of the challenged agency action. See Overton Park, 401 U.S. at 420, 91 S.Ct. 814. Accordingly, the legally relevant date for the purposes of this motion is that of the impairment finding. After April 30, 2009, the Corps began to commit resources to its decided course of action. Each subsequently consistent act, including the commencement of dredging work in Reach C, is simply the physical manifestation of the Corps' previously made decision to proceed, to wit, it is post-decisional activity.
Next, DNREC argues that the court may consider post-decisional evidence due to the nature of the relief *543 sought by the complaint in this action. DNREC cites to Salazar v. Buono, ___ U.S. ___, 130 S.Ct. 1803, 1816, 176 L.Ed.2d 634 (2010), for the proposition that the court must review "current information affecting the propriety of the agency" in connection with a request for injunctive relief. Salazar, in which plaintiffs alleged a violation of the Establishment Clause and sought an injunction against the Department of the Interior, did not involve the challenge of an agency action under the APA. See id. Accordingly the nature of the requested relief alone does not provide a basis to expand the record in an action brought pursuant to the APA.
Alternatively, DNREC cites to Esch v. Yeutter, 876 F.2d 976 (D.C.Cir.1989), which describes a list of eight exceptions[5] to the general prohibition against extra-record evidence. As an initial matter, the Third Circuit has not adopted these exceptions. Moreover, courts in the D.C. Circuit sparingly deviate from the general prohibition, refusing to do so when there are no alleged procedural irregularities regarding the challenged agency action. See Esch, 876 F.2d at 991; see also Beverly Enters. v. Herman, 130 F.Supp.2d 1, 8 n. 2 (D.D.C.2000). These exceptions do not apply to the situation at bar, which alleges no procedural deficiencies and concerns the substantive merits of the agency's determination. Esch, 876 F.2d at 991 ("the familiar rule that judicial review of agency action is normally to be confined to the administrative record ... exerts its maximum force when the substantive soundness of the agency's decision is under scrutiny").
2. Pre-decisional documents
It is undisputed that the Corps created the remainder of the documents at issue prior to the date of the impairment finding. The Corps maintains that it properly withheld these documents, which concern internal communications and meeting notes, on grounds of the deliberative process privilege.
a. Deliberative process privilege
The deliberative process privilege is derived from the accepted impropriety of delving into an agency's mental process.[6]See, e.g., United States v. Morgan, 313 U.S. 409, 422, 61 S.Ct. 999, 85 L.Ed. 1429 (1941); Norris & Hirshberg, Inc. v. S.E.C., 163 F.2d 689, 693 (D.C.Cir. 1947). Allowing judicial review of an agency's deliberative proceedings distorts the inquiry under the APA, which should be focused "upon an agency's stated justifications, not the predecisional process that led up to the final, articulated decision." Ad Hoc Metals Coalition v. Whitman, 227 F.Supp.2d 134, 143 (D.D.C.2002) (internal citations omitted). Additionally, introducing these materials into the record would contravene the ability of an agency to engage in uninhibited and frank discussions of agency matters. See NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 151, 95 S.Ct. 1504, 44 L.Ed.2d 29 (U.S.1975).
DNREC advances several arguments as to why the court should not allow the Corps to invoke the deliberative process privilege to shield documents at issue. As a general matter, DNREC alleges that the Corps has failed to carry its burden of demonstrating that the documents are both predecisional and deliberative. *544 See Coastal States Gas Corp. v. Dep't of Energy, 617 F.2d 854, 866 (D.C.Cir.1980). Predecisional documents are those existing "antecedent to the adoption of an agency policy." Jordan v. United States Dep't of Justice, 591 F.2d 753, 774 (D.C.Cir.1978). Insofar as the identified documents were created prior to the impairment finding, there can be no serious challenge to their predecisional nature. Courts have interpreted the deliberative prong to require that the communication forms "a direct part of the deliberative process in that it makes recommendations or expresses opinions on legal or policy matters." Vaughn v. Rosen, 523 F.2d 1136, 1143-44 (D.C.Cir.1975). In other words, purely factual matters remain unprivileged. See EPA v. Mink, 410 U.S. 73, 91, 93 S.Ct. 827, 35 L.Ed.2d 119 (1973). The Corps' appendix describes the privileged materials as internal communications, meeting notes and non-final drafts of memoranda. (D.I. 77, ex. A) Each of these categories falls within the ambit of traditionally privileged materials. See, e.g. Center for Auto Safety v. Federal Highway Admin., 956 F.2d 309, 314 (D.C.Cir. 1992). Additionally, DNREC concedes the deliberative and non-factual nature of the materials at issue by claiming that the documents are "probative of [the Corps'] mindset culminating in the [impairment finding]," and "provide a frank evaluation of [the Corps'] obligation to obtain the Delaware permits in question." (D.I. 75 at 7; D.I. 79 at 6)
b. Waiver
All of the documents at issue were voluntarily produced by the Corps pursuant to a Freedom of Information Act ("FOIA") request made by NJDEP and other public interest groups. Because these documents now exist in the public domain, DNREC argues that the Corps has waived any claim for deliberative process privilege. In support of this argument, DNREC cites to several cases which purportedly hold that waiver of privilege occurs as a result of public disclosure. Fireman's Fund Indem. Co. v. United States, 103 F.Supp. 915, 916 (D.Fla.1952) (denying Secretary of Navy's assertion of a general privilege with respect to previously disclosed documents which contained all of the evidence pertaining to the accident at issue); Peck v. United States, 514 F.Supp. 210, 213 (S.D.N.Y.1981) (concluding that voluntary disclosure waives qualified official information privilege and requires such documents to be produced); O'Keefe v. Boeing Co., 38 F.R.D. 329, 334 (S.D.N.Y.1965) (holding that considerations of fairness play into the question of waiver).
At most, these cases demonstrate that agencies cannot, irrespective of any claims of privilege, avoid the production of previously disclosed documents; however, the court remains unconvinced that any such waiver necessarily mandates the addition of such documents to the administrative record. A FOIA production request is an entirely discrete legal concept that bears no relation to the administrative record compiled for a court's review under the APA. Moreover, requiring the addition of voluntarily disclosed deliberative materials to the administrative record runs afoul of an important policy underlying the deliberative process privilege, to wit, that "officials should be judged by what they decided[,] not for matters they considered before making up their minds." Jordan, 591 F.2d at 772-73; see also Ad Hoc Metals, 227 F.Supp.2d at 143 (judicial review under APA is concerned with "an agency's stated justifications, not the predecisional process that led up to the final, articulated decision."). Accordingly, the FOIA production of the documents at issue did not result in a waiver of privilege transforming *545 these deliberative materials into proper constituents of the administrative record.
c. Evidentiary need for privileged material
Despite the applicability of the privilege, DNREC asserts that its evidentiary need outweighs any harm that would occur should the deliberative materials become part of the administrative record. See Redland Soccer Club v. Department of the Army, 55 F.3d 827 (3d Cir.Pa.1995). Redland involved a class action suit in which plaintiffs brought claims under the Federal Tort Claims Act and the Comprehensive Environmental Response, Compensation, and Liability Act against the United States Army. The United States Army refused to produce multiple documents upon grounds of deliberative process privilege. Id. at 853. In balancing the parties' respective interests regarding the documents, the Third Circuit adopted a test enunciated by the D.C. Circuit, which considers:
(i) the relevance of the evidence sought to be protected; (ii) the availability of other evidence; (iii) the seriousness of the litigation and the issues involved; (iv) the role of the government in the litigation; [and] (v) the possibility of future timidity by government employees who will be forced to recognize that their secrets are violable.
Id. at 854.
Notwithstanding that Redland involved a request for production and not for an expansion of the administrative record, the court finds that DNREC has failed to demonstrate the relevance of the deliberative materials at issue. As previously mentioned, DNREC brought its claims under the APA alleging, inter alia, that the Corps' impairment finding was arbitrary and capricious. Under this "narrow" standard of review, the Corps must demonstrate a "rational connection between the facts found and the choice made." Motor Vehicle, 463 U.S. at 43, 103 S.Ct. 2856. Documents tending to show the Corps' "mindset" or its understanding of the permitting obligations with respect to the Deepening Project do not facilitate this inquiry, which is unconcerned with the actual subjective motivation of the agency. See New York v. Salazar, 701 F.Supp.2d 224, 236-37 (N.D.N.Y.2010). As the deliberative materials bear no relevance to the court's role in reviewing the merits of this case under the APA, the court finds no reason to abrogate the Corps' privilege.
B. Integrity of the Administrative Record
Alternatively, DNREC seeks a declaration that the Corps submitted an incomplete administrative record. The Corps' administrative record, as submitted, is entitled to a strong presumption of regularity. See, e.g., Bar MK, 994 F.2d at 740. The Third Circuit allows supplementation in only two scenarios: (1) where the record does not demonstrate the factors considered by the agency; or (2) where a showing of bad faith in agency decision-making is made. Horizons Int'l, Inc. v. Baldrige, 811 F.2d 154, 162 (3d Cir.1987); NVE, Inc., 436 F.3d at 195.
DNREC does not allege that the record does not demonstrate the factors considered by the Assistant Secretary in making the impairment finding. With respect to the second exception, DNREC alleges that the missing documents "highlight the process the Corps undertook to formulate its legal justifications for avoiding a Delaware permit" and that "the Corps held this position in reserve and only asserted it after `increasing its efforts... to persuade the State to issue the [permit],' and after DNREC denied the permit in July 2009." (D.I. 75 (citing ex. *546 A, Tab 13)) That the Corps developed a contingency position after waiting indefinitely for action on its permit application is hardly indicative of bad faith. Having failed to create a prima facie case for either of the exceptions described supra, the court concludes that DNREC has not overcome the presumption of regularity associated with the administrative record.
C. Availability of Discovery
The Third Circuit observes a strong presumption against discovery in APA cases, allowing it only upon a showing of agency bias. NVE, Inc., 436 F.3d at 195. DNREC has not asserted, nor can the court discern, any instance of bias on the part of the Corps. Moreover, the size of the submitted record is relevant to whether discovery is appropriate. Id. at 196. The Corps has submitted an extensive administrative record containing approximately 48,000 pages. Finally, DNREC's assertion that the Corps created the record in bad faith is belied by the Corps' willing production of its entire file on the Deepening Project in response to the FOIA request. DNREC has not demonstrated the propriety of discovery in this case.
V. CONCLUSION
In view of the foregoing, DNREC's motion to expand the administrative record is denied. An appropriate order will follow.
ORDER
At Wilmington this 15th day of July, 2010, consistent with the memorandum opinion issued this same date;
IT IS ORDERED that plaintiff's motion for a declaration on the administrative record and to expand the administrative record (D.I. 74), is denied.
NOTES
[1] Section 313(a) of the CWA provides that any federal agency
engaged in any activity resulting, or which may result, in the discharge or runoff of pollutants ... shall be subject to, and comply with, all Federal, State, interstate, and local requirements, administrative authority, and process and sanctions respecting the control and abatement of water pollution in the same manner, and to the same extent as any nongovernmental entity including the payment of reasonable service charges. The preceding sentence shall apply ... to any requirement whether substantive or procedural (including any recordkeeping or reporting requirement, any requirement respecting permits and other requirement, whatsoever)....
33 U.S.C. § 1323(a) (emphasis added).
[2] The Corps sought an interim suspension of the application process due to economic concerns expressed by the General Accounting Office ("GAO") in its audit of the Corps' proposed scheme of achieving Deepening Project. U.S. GEN. ACCOUNTING OFFICE, DELAWARE RIVER DEEPENING PROJECT: COMPREHENSIVE REANALYSIS NEEDED, available at http://www.gao.gov/ products/GAO-02-604 (last accessed July 9, 2010). This suspension lasted until December 20, 2002, when the Corps submitted an economic reanalysis to DNREC. (D.I. 33, Decl. of Pasquale at ¶ 8)
[3] This finding sought to invoke the "navigation exception" found in CWA section 404(t), which exempts the Corps from regulation under the CWA and affiliated state programs. See In re Operation of the Mo. River Sys., Litig., 418 F.3d 915, 918 (8th Cir.2005).
[4] Concurrent actions in the United States District Court for the District of New Jersey, brought by the State of New Jersey Department of Environmental Protection ("NJDEP") and various public interest groups, seek similar relief. N.J. Civ. No. 09-5591-JAP; N.J. Civ. No. 09-5889-JAP.
[5] The exceptions to the general prohibition include "cases where evidence arising after the agency action shows whether the decision was correct or not," and "cases where agencies are sued for failure to take action," and "cases where relief is at issue." Id. at 991.
[6] The deliberative process privilege is codified in 5 U.S.C. § 552(b)(5) as exemption five of FOIA.
| {
"pile_set_name": "FreeLaw"
} |
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SAMMY L. PAGE, No. 17-16364
Petitioner-Appellant,
D.C. No.
v. 1:16-cv-00522-AWI-JLT
AUDREY KING,
Respondent-Appellee. OPINION
Appeal from the United States District Court
for the Eastern District of California
Anthony W. Ishii, District Judge, Presiding
Argued and Submitted February 8, 2019
San Francisco, California
Filed August 2, 2019
Before: Richard A. Paez and Marsha S. Berzon, Circuit
Judges, and Gary Feinerman, * District Judge
Opinion by Judge Feinerman
*
The Honorable Gary Feinerman, United States District Judge for
the Northern District of Illinois, sitting by designation.
2 PAGE V. KING
SUMMARY **
Habeas Corpus / Younger Abstention
The panel vacated the district court’s judgment
dismissing based on Younger abstention a habeas corpus
petition in which Sammy Page, who has been detained for
thirteen years awaiting trial for recommitment under the
California Sexually Violent Predator Act (SVPA), alleges
that the State of California is violating his due process rights
by continuing to detain him pretrial based on an outdated and
scientifically invalid probable cause finding.
The panel rejected as irreconcilable with this court’s
precedents Page’s contention that his SVPA case has been
stalled for so long that it is no longer “ongoing” for purposes
of Younger v. Harris, 401 U.S. 37 (1971). The panel
explained that the state court proceeding is “plainly
ongoing” for Younger purposes where, as here, no final
judgment has been entered.
The panel held that the delay in bringing Page’s SVPA
case to trial is not an extraordinary circumstance under
Younger, as the delay is primarily attributable to defense
counsel’s litigation efforts, not the state court’s
ineffectiveness.
The panel held that Page’s claim fits squarely within the
“irreparable harm” exception to Younger abstention set forth
in Arevalo v. Hennessy, 882 F.3d 763 (9th Cir. 2018),
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
PAGE V. KING 3
because (1) regardless of the outcome at trial, a post-trial
adjudication will not fully vindicate his right to a current and
proper pretrial probable cause determination, and (2) his
claim, which could not be raised in defense of the criminal
prosecution, could not prejudice the conduct of the trial on
the merits.
The panel wrote that the merits of Page’s due process
claim are reserved for the district court on remand, and that
the district court should consider anew Page’s request for
appointment of counsel.
COUNSEL
Andrea Renee St. Julian (argued), San Diego, California, for
Petitioner-Appellant.
Max Feinstat (argued), Deputy Attorney General; Tami M.
Krenzin, Supervising Deputy Attorney General; Michael P.
Farrell, Senior Assistant Attorney General; Xavier Becerra,
Attorney General; Office of the Attorney General,
Sacramento, California; for Respondent-Appellee.
4 PAGE V. KING
OPINION
FEINERMAN, District Judge:
Sammy Page, who has been detained for the last thirteen
years awaiting trial for recommitment under the California
Sexually Violent Predator Act (“SVPA”), Cal. Welf. & Inst.
Code § 6600 et seq., filed a petition for habeas corpus,
alleging that the state is violating his Fourteenth Amendment
due process rights by continuing to detain him pretrial based
on an outdated and scientifically invalid probable cause
finding. The district court dismissed the petition under
Younger v. Harris, 401 U.S. 37 (1971). We vacate and
remand for further proceedings. (Page raised three
uncertified issues, which we decline to address. Ninth Cir.
R. 22-1(e). If relevant on remand, Page may raise them in
the district court.)
Factual and Procedural History
A. Page’s State SVPA Proceedings
From 1971 to 1987, Page committed three brutal rapes
during home invasion robberies. See People v. Page, 2005
WL 1492388, at *3–5 (Cal. Ct. App. June 24, 2005). In
2004, he was adjudicated a Sexually Violent Predator
(“SVP”) under the SVPA and civilly committed for two
years. Id. at *1–3.
In February 2006, the state filed a petition to recommit
Page as an SVP. The state supported its petition with two
psychiatric evaluations diagnosing Page with Paraphilia Not
Otherwise Specified (“NOS”) based on his affinity for
nonconsensual sex and concluding that he qualified as an
SVP. In May 2006, the state court found probable cause to
detain Page pretrial. Page has been detained awaiting trial
PAGE V. KING 5
ever since. The state court minute orders and the July 21,
2015 declaration of David C. Cook, an SVPA prosecutor, set
forth the relevant timeline. (Page argues that we should
disregard the declaration because Cook cannot act as both
witness and attorney in the same case. See Cal. Rules of
Professional Conduct 3.7 (2018). This argument fails
because Cook does not represent the state in this federal
case.)
On March 16, 2006, a public defender was appointed to
represent Page. The case was continued until December 15,
2006 to permit the parties to prepare for trial. On December
15, the state filed a motion based on a recent amendment to
the SVPA. The court granted the motion and continued the
case to March 2, 2007.
The case was repeatedly delayed over the next two years.
Defense counsel requested one continuance, but no
explanation for the other continuances appears in the record.
The case then was continued throughout 2009 to permit the
parties to litigate defense motions, including Page’s motion
for substitute counsel. On March 12, 2010, Cook “informed
the court and Page’s counsel that [the state] was ready for
the case to be set for trial.” The case nonetheless was
continued to May 2012 so that two additional defense
motions could be briefed and decided.
One of the defense motions sought a new probable cause
hearing, new mental health evaluations, and new mental
health evaluators. In a supporting declaration, Dr. Allen
Francis opined that “Paraphilia NOS, nonconsent” is an
“incompetent” and “psychiatrically unjustified” diagnosis
upon which the psychiatric community had recently cast
doubt, most notably by rejecting proposals to include it in
the American Psychiatric Association’s Diagnostic and
Statistical Manual of Mental Disorders, Fifth Edition, or
6 PAGE V. KING
“DSM-V.” The court granted the motion for new
evaluations and a new probable cause hearing, and continued
the case to November 2012 to allow the new evaluations to
take place.
Four mental health professionals were retained to
perform the new evaluations. The first two evaluators
disagreed as to whether Page met SVP criteria, necessitating
two additional evaluators, who also disagreed. In the end,
two evaluators, including one that had recommended
recommitment in 2006, concluded that Page no longer met
SVP criteria. They based their determinations in part on
Page’s lengthy pretrial detention, reasoning that he had aged
and had not committed any further sexual or violent acts.
The two other evaluators came to the opposite conclusion,
finding that Page continued to meet SVP criteria. One of
those evaluators diagnosed Page with Paraphilia NOS.
The case was continued from November 2012 to May
2013 so that defense motions related to the new evaluations
could be filed, briefed, and decided. On July 26, 2013, the
state requested a continuance to file a motion based on Reilly
v. Superior Court, 304 P.3d 1071 (Cal. 2013), which called
into question Page’s entitlement to a new probable cause
hearing. Defense counsel then sought several continuances
to respond to the state’s Reilly motion. The court granted the
Reilly motion on April 18, 2014 and rescinded its prior order
calling for a new probable cause determination.
The case was repeatedly continued until June 2, 2017 to
allow defense counsel to litigate additional motions. The
minute orders from July 28, 2017 through November 3, 2017
reference a “motion” but provide no further detail. The case
was continued on January 5, 2018 “[b]y agreement of
counsel” and again on May 4, 2018 for unknown reasons.
PAGE V. KING 7
Cook averred in his declaration that he “remain[s] ready
to set this matter for trial” and that, to his knowledge,
“neither Page nor his trial counsel has ever requested that
Page’s case be set for trial.” Cook further averred that he
requested only one continuance after calling ready for trial
on March 12, 2010.
B. Page’s Federal Habeas Proceedings
Page filed the present federal habeas petition in the
Northern District of California on July 16, 2012. He alleged
that his due process rights were violated by the state court
when it based its pretrial detention probable cause finding on
pseudoscience; by the prosecution when it introduced
pseudoscientific evidence at the probable cause hearing; and
by the state when it continued to detain him based on the
2006 probable cause finding even though the 2012
evaluations suggested that the 2006 evaluations had become
outdated. The district court abstained under Younger v.
Harris, 401 U.S. 37 (1971). See Page v. King, 2015 WL
5569434 (N.D. Cal. Sept. 21, 2015). We vacated and
remanded, instructing the district court to consider whether
it had jurisdiction to decide the petition.
On remand, the district court transferred the case to the
Eastern District of California, which again abstained under
Younger, dismissed Page’s petition, and declined to issue a
certificate of appealability. See Page v. California, 2008
WL 3889563 (E.D. Cal. Aug. 19, 2008), report and
recommendation adopted, 2009 WL 260704 (E.D. Cal. Feb.
4, 2009). Page appealed. We granted a certificate of
appealability on the issue whether the district court properly
abstained under Younger.
8 PAGE V. KING
Discussion
Absent extraordinary circumstances, “interests of comity
and federalism instruct [federal courts] to abstain from
exercising our jurisdiction in certain circumstances when . . .
asked to enjoin ongoing state enforcement proceedings.”
Nationwide Biweekly Admin., Inc. v. Owen, 873 F.3d 716,
727 (9th Cir. 2017). “Younger abstention is appropriate
when: (1) there is an ongoing state judicial proceeding;
(2) the proceeding implicates important state interests;
(3) there is an adequate opportunity in the state proceedings
to raise constitutional challenges; and (4) the requested relief
seeks to enjoin or has the practical effect of enjoining the
ongoing state judicial proceeding.” Arevalo v. Hennessy,
882 F.3d 763, 765 (9th Cir. 2018) (alterations and internal
quotation marks omitted). But “even if Younger abstention
is appropriate, federal courts do not invoke it if there is a
‘showing of bad faith, harassment, or some other
extraordinary circumstance that would make abstention
inappropriate.’” Id. at 765–66 (quoting Middlesex Cnty.
Ethics Comm. v. Garden State Bar Ass’n, 457 U.S. 423, 435
(1982)).
Page does not dispute that Younger abstention can apply
to ongoing SVPA proceedings, but he offers two grounds for
why the district court nevertheless erred in abstaining under
Younger given the facts and circumstances of this case. We
consider those grounds in turn.
I. Whether Page’s State SVPA Proceedings Are
Ongoing
Page first contends that his SVPA case has been stalled
for so long that it is no longer “ongoing” for purposes of
Younger. This contention cannot be reconciled with our
precedents, which establish that “[t]here is no principled
PAGE V. KING 9
distinction between finality of judgments for purposes of
appellate review and finality of state-initiated proceedings
for purposes of Younger abstention.” San Jose Silicon
Valley Chamber of Commerce Political Action Committee v.
City of San Jose, 546 F.3d 1087, 1093 (9th Cir. 2008).
Where, as here, “no final judgment has been entered” in state
court, the state court proceeding is “plainly ongoing” for
purposes of Younger. Id. While recognizing the possibility
that a state court could intentionally delay proceedings to
stave off federal habeas review or for other improper
purposes, we have determined that Younger’s exceptions for
bad faith, harassment, or other extraordinary circumstances
provide sufficient protection from such state court abuse. Id.
We therefore turn to the question whether Page can establish
one of those exceptions.
II. Whether Extraordinary Circumstances Make
Younger Abstention Inappropriate
Federal courts will not abstain under Younger in
“extraordinary circumstances where irreparable injury can
be shown.” Brown v. Ahern, 676 F.3d 899, 903 (9th Cir.
2012). Page argues that this exception applies here, either
because of the state court’s extraordinary delay in bringing
him to trial or because he will be irreparably harmed if he is
unable to seek federal review prior to trial.
The delay in bringing Page’s SVPA case to trial is not an
extraordinary circumstance under Younger. True, we have
in rare cases declined to abstain where the state court delay
was extreme and there was “no end in sight” to the state court
proceedings. See Phillips v. Vasquez, 56 F.3d 1030, 1035,
1038 (9th Cir. 1995) (“We have consistently recognized that
unusual delay in the state courts may justify a decision to
protect a prisoner’s right to a fair and prompt resolution of
his constitutional claims despite the jurisprudential concerns
10 PAGE V. KING
that have led us to decline to review a claim or to require full
exhaustion in other cases in which a proceeding related to
the federal petition is pending in state court.”). But Younger
abstention is appropriate even in cases of extreme delay
where there is “no indication that the state court has been
ineffective,” Edelbacher v. Calderon, 160 F.3d 582, 586 (9th
Cir. 1998), and where the delay is instead “attributable to the
petitioner’s quite legitimate efforts in state court to escape
guilt” through litigation, id. at 585.
As the Cook declaration and the state court record show,
the delay in bringing Page’s SVPA case to trial is primarily
attributable to defense counsel’s litigation efforts, not the
state court’s ineffectiveness. Additionally, an end to the
state court proceedings is in sight. The state informed the
court that it was ready for trial nine years ago and has
remained ready at least as of 2015. Thus, it appears that Page
could go to trial if he only demanded it.
Page’s reliance on speedy trial cases like Doggett v.
United States, 505 U.S. 647, 652 (1992), which describes an
eight-and-a-half-year delay as “extraordinary,” is misplaced.
Page does not explain how or why speedy trial principles
apply to the very different question of what constitutes
extraordinary circumstances under Younger. Moreover, we
have repeatedly rejected the argument that “violation of the
Speedy Trial Clause [is] sui generis such that it suffice[s] in
and of itself as an independent ‘extraordinary circumstance’
necessitating pre-trial habeas consideration.” Brown,
676 F.3d at 901 (quoting Carden v Montana, 626 F.2d 82,
84 (9th Cir. 1980)). Thus, even if Page could establish that
the delay in bringing him to trial would support a speedy trial
defense if the state court proceedings were criminal in
nature, it does not follow that the delay is an extraordinary
circumstance in the meaning of Younger.
PAGE V. KING 11
Page argues in the alternative that abstention is
inappropriate for the reasons given in Arevalo v. Hennessy,
supra, which we decided after the district court here issued
its ruling. In that case, Erick Arevalo filed a federal habeas
petition alleging that he had been jailed for six months
without a constitutionally adequate bail hearing. Arevalo,
882 F.3d at 764–65. We held that Younger does not
“require[ ] a district court to abstain from hearing a petition
for a writ of habeas corpus challenging the conditions of
pretrial detention in state court” where (1) the procedure
challenged in the petition is distinct from the underlying
criminal prosecution and the challenge would not interfere
with the prosecution, or (2) full vindication of the
petitioner’s pretrial rights requires intervention before trial.
Id. at 764, 766–67. We determined that Arevalo’s claims
satisfied both grounds for overcoming Younger abstention.
As to the first, we relied on Gerstein v. Pugh, 420 U.S.
103 (1975), which held that a criminal defendant’s right to
“a judicial determination of probable cause for pretrial
restraint of liberty” can be enforced in federal court before
state court proceedings conclude. Id. at 105, 108 n.9.
Gerstein reasoned that because claims regarding the right to
a probable cause determination are not “directed at the state
prosecutions as such, but only at the legality of pretrial
detention without a judicial hearing, an issue that could not
be raised in defense of the criminal prosecution,” federal
court review “could not prejudice the conduct of the trial on
the merits.” Id. at 108 n.9. Applying Gerstein, we
concluded that Arevalo’s bail-related federal habeas claims
were “distinct from the underlying criminal prosecution and
would not interfere with it.” Arevalo, 882 F.3d at 766.
As to the second ground for overcoming Younger
abstention in Arevalo, we relied on Mannes v. Gillespie,
12 PAGE V. KING
967 F.2d 1310 (9th Cir. 1992), which declined to abstain
from hearing a habeas petitioner’s double jeopardy claim on
the ground that “[t]he Fifth Amendment’s protection against
double jeopardy … is not against being twice punished, but
against being twice put in jeopardy,” that is, against facing
two trials. 967 F.2d at 1312 (internal quotation marks
omitted). Given the nature of the double jeopardy right, we
reasoned in Mannes that a post-trial ruling that the state
violated the Double Jeopardy Clause would come too late,
as the petitioner already would have been irreparably
deprived of his rights. Id. Likewise, the bail hearing that
Arevalo sought was intended to protect him against
unconstitutional pretrial detention, a right that could not be
vindicated post-trial. Arevalo, 882 F.3d at 767. We
therefore held that Arevalo had established extraordinary
circumstances that threatened irreparable harm and justified
proceeding with his habeas petition. Id.
Here, Page alleges that the state is violating his due
process right not to be detained pretrial based on a stale and
scientifically invalid probable cause determination and that
his complete loss of liberty for the time of pretrial detention
is “irretrievable” regardless of the outcome at trial. If Page
is right, then regardless of the outcome at trial, a post-trial
adjudication of his claim will not fully vindicate his right to
a current and proper pretrial probable cause determination.
His claim therefore “fits squarely within the irreparable harm
exception” to Younger that we applied in Arevalo. Id. at 766.
Additionally, as in Arevalo, Page’s claim is closely
analogous to the claim in Gerstein: The defendant in
Gerstein challenged the state’s refusal to hold a probable
cause hearing, while Page challenges the state’s alleged
failure to hold a constitutionally adequate probable cause
hearing. Page’s claim likewise is not “directed at the state
PAGE V. KING 13
prosecution[ ] as such, but only at the legality of pretrial
detention without a [constitutionally-adequate] judicial
hearing, an issue that could not be raised in defense of the
criminal prosecution,” and thus our review “could not
prejudice the conduct of the trial on the merits.” 420 U.S.
at 108 n.9. Page’s claim therefore satisfies both of the
grounds set forth in Arevalo for overcoming Younger
abstention.
The state argues that Arevalo is inapposite because Page
failed to show that he was unable to raise his due process
claim in the state court proceedings. We considered and
rejected the same argument in Arevalo, and are bound to
follow suit here. 882 F.3d at 767 n.3 (noting that the
opportunity to present a claim in state court “involve[s] the
third Younger factor—adequacy of the state proceedings to
address the issue,” and does not categorically bar the
“irreparable harm” exception).
Nor is our treatment of Page’s claim inconsistent with
our speedy trial jurisprudence. True, we have declined to
apply the irreparable harm exception to Younger abstention
where a federal habeas petitioner seeks to vindicate a speedy
trial affirmative defense. See Carden, 626 F.2d at 84; see
also Brown, 676 F.3d at 901 (reaffirming Carden). But
unlike the protection against double jeopardy or the pretrial
rights at issue in Arevalo and Gerstein, the speedy trial
defense primarily protects the integrity of the trial itself. See
United States v. MacDonald, 435 U.S. 850, 858 (1978)
(holding that the “most serious” interest that “the speedy trial
right was designed to protect” is “to limit the possibility that
the defense will be impaired”); Carden, 626 F.2d at 84
(citing MacDonald to support its holding that Younger
abstention was appropriate). Like other rights designed to
ensure a fair trial, the speedy trial right asserted as a defense
14 PAGE V. KING
can be vindicated through reversal of the improperly-
obtained conviction. See Carden, 626 F.2d at 84; Brown,
676 F.3d at 901. By contrast, the right asserted by Page
implicates the integrity of pretrial probable cause
procedures. Arevalo shows that such a right is not a trial
right and therefore cannot be vindicated post-trial.
Finally, we recognize that in Drury v. Cox, 457 F.2d 764
(9th Cir. 1972) (per curiam), we abstained under Younger
from hearing a challenge to a pretrial probable cause
determination. Our two-paragraph, per curiam opinion in
Drury did not consider or decide whether the petitioner’s
claim fell within the irreparable harm exception to Younger,
so it does not govern that issue. See R.A.V. v. City of St.
Paul, 505 U.S. 377, 386 n.5 (1992) (“It is contrary to all
traditions of our jurisprudence to consider the law on this
point conclusively resolved by broad language in cases …
where the issue was not presented or even envisioned.”).
Additionally, we issued Drury prior to the Supreme Court’s
decision in Gerstein, which, as noted, expressly held that
Younger abstention was not appropriate where the petitioner
claims that the state has not provided appropriate pretrial
probable cause procedures. To the extent that Drury stands
for the opposite proposition, it has been overruled. See
Miranda v. Selig, 860 F.3d 1237, 1243 (9th Cir. 2017)
(“[W]e are bound by decisions of prior panels[ ] unless [a]
… Supreme Court decision … undermines those
decisions.”); Miller v. Gammie, 335 F.3d 889, 900 (9th Cir.
2003) (“[I]ssues decided by the [Supreme] [C]ourt need not
be identical in order to be controlling. Rather, the [Court]
must have undercut the theory or reasoning underlying the
prior circuit precedent in such a way that the cases are clearly
irreconcilable.”).
PAGE V. KING 15
We therefore hold that the district court erred in
abstaining under Younger from hearing Page’s claim that the
state is violating his pretrial due process rights. In so
holding, we do not speak to the merits of Page’s due process
claim. Indeed, the Supreme Court’s recent opinion in
Manuel v. City of Joliet, 137 S. Ct. 911 (2017)—which held
that “[i]f the complaint is that a form of legal process resulted
in pretrial detention unsupported by probable cause, then the
right allegedly infringed lies in the Fourth Amendment,” not
the Due Process Clause, id. at 919—may doom Page’s
petition unless he is permitted to amend to allege a Fourth
Amendment violation. Those merits questions are reserved
for the district court on remand.
Before concluding, we note that Page requests that, in the
event of a remand, we direct the district court to appoint
counsel pursuant to 18 U.S.C. § 3006A(a)(2)(B). The
district court denied his requests for appointed counsel
because it found that the interests of justice did not require
appointment of counsel at the time. On remand, given the
complexity of the issues involved in his petition, the district
court should consider anew Page’s request for appointment
of counsel. See 18 U.S.C. § 3006A(A)(2)(B).
VACATED and REMANDED.
| {
"pile_set_name": "FreeLaw"
} |
NO.
12-05-00310-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
§
IN RE: TENET HEALTHCARE, LTD.,
D/B/A NACOGDOCHES
MEDICAL § ORIGINAL PROCEEDING
CENTER AND LIFEMARK
HOSPITALS,
INC., RELATOR
§
MEMORANDUM OPINION
In this original proceeding, Tenet
Healthcare, Ltd., d/b/a Nacogdoches Medical Center and Lifemark Hospitals, Inc.
(Tenet) complain that the Honorable Clay Gossett, Judge of the 4th Judicial
District Court, Rusk County, Texas abused his discretion by ordering the
production of privileged information. We
conditionally grant the requested relief.
Background
The
underlying action is a medical malpractice action brought by Al Boren, acting
individually, on behalf of the Estate of Lucy Boren, and as next friend of
Allie Boren, and Shea Sadler (collectively Boren) against Tenet and other
health care providers not parties to this proceeding. Boren sent requests for production to Tenet
seeking, in part, operative reports and discharge summaries for certain
nonparty patients who underwent laproscopic hernia repair or laproscopic
incisional hernia repair following January 1, 2000. The request stated that the documents should
be “de-identified,” meaning that patient identifying information should be
removed to prevent disclosure of any patient identifiable data consistent with
HIPAA1
requirements. Tenet objected to the
requests asserting physician-patient privilege, HIPAA privilege, and the
nonparty patients’ individual right to privacy.
Boren filed a motion to compel production. Respondent overruled Tenet’s
objections, granted Boren’s motion, and on September 7, 2005 signed an order
compelling production. This original
proceeding followed. We requested a
response from Boren, but none was filed.
Availability
of Mandamus
Mandamus issues only to correct a
clear abuse of discretion or the violation of a duty imposed by law when there
is no adequate remedy by appeal. Walker
v. Packer, 827 S.W.2d 833, 839-42 (Tex. 1992). A trial court clearly abuses its discretion
if “it reaches a decision so arbitrary and unreasonable as to amount to a clear
and prejudicial error of law.” Id. at 839. Generally, privileged matters are not
discoverable. West v. Solito,
563 S.W.2d 240, 243 (Tex 1978). If a
trial court errs in ordering that privileged material must be disclosed, there
is no adequate remedy at law. Walker,
827 S.W.2d at 843. Remedy by appeal in
that case is inadequate because, once revealed, the documents cannot be
protected. Id. Because Respondent’s sole contention in this
proceeding is that the requested documents are privileged, we need only address
whether Respondent abused his discretion in ordering disclosure.
Abuse of
Discretion
Rule 509 of
the Texas Rules of Evidence prohibits the disclosure of (1) confidential
communications between a physician and a patient relating to any professional
services rendered by a physician to the patient and (2) records of the
identity, diagnosis, evaluation, or treatment of a patient by a physician that
are created or maintained by a physician.
Tex. R. Evid. 509(c). A similar provision is found in the Texas
Occupations Code. Tex. Occ. Code Ann. § 159.002 (Vernon
2004). The records Boren seeks are the
type of records protected by Rule 509 and Section 159.002.
The
redaction of identifying information does not address the concerns regarding
portions of nonparty medical records relating to diagnosis, evaluation, or
treatment. In re Columbia Valley
Regional Medical Center, 41 S.W.3d 797, 800 (Tex. App.–Corpus Christi
2001, orig. proceeding). Therefore, redaction of identifying information from
nonparty medical records does not defeat the medical records privilege. Id. Consequently, the records Boren seeks are
privileged in their entirety. Id.
at 800-01. Therefore, we hold that
Respondent abused his discretion by granting Boren’s motion to compel
production of these documents.
Accordingly, we conditionally grant the writ of mandamus.
We are
confident that within ten days from the date of this opinion and corresponding
order, Respondent will (1) vacate his September 7, 2005 order insofar as it
relates to Tenet’s objections to Boren’s requests for production 2, 3, and 43
and (2) enter an order denying Boren’s motion to compel production of the
nonparty medical records requested in requests for production 2, 3, and
43. The writ of mandamus will issue only
if he does not.
SAM GRIFFITH
Justice
Opinion delivered March 31,
2006.
Panel consisted of Worthen, C.J., Griffith, J., and
DeVasto, J.
(PUBLISH)
1
Health Insurance Portability and Accountability Act of 1996.
| {
"pile_set_name": "FreeLaw"
} |
722 F.2d 1415
11 O.S.H. Cas.(BNA) 1737, 1984 O.S.H.D. (CCH)P 26,747
Raymond J. DONOVAN, Secretary of Labor, Petitioner,v.INTERNATIONAL UNION, ALLIED INDUSTRIAL WORKERS OF AMERICAAND ITS LOCAL 370, Respondent.
No. 82-2265.
United States Court of Appeals,Eighth Circuit.
Submitted Sept. 13, 1983.Decided Dec. 13, 1983.
Matthew R. Robbins, Goldberg, Previant, Uelmen, Gratz, Miller & Brueggeman, S.C., Milwaukee, Wis., for the Intern. Union, Allied Industrial Workers of America and its Local 370.
T. Timothy Ryan, Jr., Sol. of Labor, Karen I. Ward, Associate Sol. for Special Appellate and Supreme Court Litigation, Allen H. Feldman for Appellate Litigation, Charles I. Hadden, U.S. Dept. of Labor, Washington, D.C., for Raymond J. Donovan, Secretary of Labor.
Before BRIGHT, ARNOLD, and FAGG, Circuit Judges.
BRIGHT, Circuit Judge.
1
The Secretary of Labor appeals from an order of the Occupational Safety and Health Review Commission (Commission) reversing an administrative law judge's (ALJ's) approval of the Secretary's settlement of an occupational safety and health citation and remanding the case to an ALJ for consideration of objections by the respondent Union to the settlement. Following precedent in two other circuits, Donovan v. OSHRC, 713 F.2d 918 (2d Cir.1983); and Marshall v. Sun Petroleum Products Co., 622 F.2d 1176 (3d Cir.), cert. denied, 449 U.S. 1061, 101 S.Ct. 784, 66 L.Ed.2d 604 (1980), we vacate the Commission's order and reinstate the settlement.
2
I. Background.
3
Whirlpool Corporation manufactures home appliances at a plant in Fort Smith, Arkansas. In July 1978, a compliance officer of the Occupational Safety and Health Administration (OSHA) conducted an inspection of the Fort Smith plant. The inspection led to the Secretary's issuance of a citation against Whirlpool, on August 2, 1978, for violations of 29 U.S.C. Sec. 654(a)(2).1 The citation alleged that Whirlpool had exposed employees at the Fort Smith plant to impermissibly high levels of carbon monoxide. The citation characterized the violation as "serious," proposed a penalty of $800, and required abatement of the violation by August 30.
4
Whirlpool gave the Secretary timely notice of its intent to contest the citations and the proposed penalty.2 Ordinarily, such notice would trigger a hearing before a Commission ALJ, but in this case the Secretary and Whirlpool agreed to a settlement before any hearing was held. The settlement provided that the Secretary would change the characterization of the violation from "serious" to "other" than serious, and reduce the proposed penalty from $800 to $0. Whirlpool, for its part, agreed to abate the carbon monoxide hazard by installing, within 60 days of approval of the settlement, catalytic converters on 23 forklift trucks and plexiglass wind deflectors on 15 forklift trucks, and to notify affected employees of the settlement by posting a copy of the settlement agreement. A Commission ALJ approved the settlement on June 11, 1979.
5
On July 10, 1979, the International Union and Local 370 of the Allied Industrial Workers of America (the "Union") petitioned the Commission for discretionary review of the ALJ's order approving the settlement. The Union, which represents employees at the Fort Smith plant, objected only to the change in the characterization of the violation from "serious" to "other," and to the concomitant reduction of the penalty. Commissioner Cottine granted review.
6
On September 29, 1982, the Commission, by a 2-1 vote, disapproved the settlement and remanded the case with instructions to the ALJ to consider the Union's objections to the recharacterization of the violation and the reduction of the penalty. The Commission gave two reasons for rejecting the settlement: (1) the posting of the agreement did not, under Commission rules, constitute notice to the Union of the settlement; and (2) the record did not show that the Union had received notice of an amendment to the settlement agreement reducing from 15 to 14 the number of forklift trucks on which plexiglass wind deflectors were to be installed. Because the Union did not receive formal notice of the terms of the settlement and the amendment, the Commission said, it had been deprived of its rightful opportunity to raise objections to the settlement. Commission Chairman Rowland dissented, arguing that the Union had actual notice of the settlement terms, and that, in any event, it had no right under the statute to object to any provision of the settlement other than the reasonableness of the abatement time.
7
The Secretary appeals from the Commission's September 29 order. He urges us to adopt Commissioner Rowland's position that, regardless of any inadequacies of notice to the Union, the Union has no right to object to, nor the Commission to review, any aspect of a settlement between the Secretary and an employer where, as here, no objection has been raised to the reasonableness of the abatement time.
8
II. Discussion.
9
A. Appealability of the Commission's Order.
10
The Union contends that this court lacks jurisdiction to review the Commission's order, because the order, in remanding the case to the ALJ, does not finally determine the merits of the case.3 We believe, however, that the Commission's order falls within the class of "collateral" orders reviewable under the doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).
11
In Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 2458, 57 L.Ed.2d 351 (1978), the Supreme Court defined the scope of the collateral order exception:
12
To come within the "small class" of decisions excepted from the final-judgment rule by Cohen, the order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment.
13
We think the Commission's order meets the three Coopers & Lybrand criteria. First, the order "conclusively determines" the issue before us--whether a union has a right to present objections, on issues other than the reasonableness of the abatement time, to a settlement entered into by the Secretary and an employer. Second, the issue of the Union's right to be heard, which presents an important question of statutory construction and of the respective powers of the Secretary and the Commission, is completely separate from the merits of the underlying dispute over whether the violation was "serious" and whether it warrants a civil penalty. Finally, the question of the Union's right to object to settlement will likely not be reviewable on appeal of a final judgment. If the ALJ, after hearing the Union's objections, again upholds the settlement, the Secretary will not stand aggrieved and so will not have grounds to appeal. If the ALJ disapproves the settlement, and the case goes to the Commission for a full hearing on the merits of the original citation, the Secretary will have to await a decision on the merits to appeal. But if the Secretary wins on the merits of the original citation (that is, if the violation is adjudicated "serious" and a penalty assessed), he will not be in a position to argue that Whirlpool should have the benefit of the more favorable terms of the rejected settlement. On the other hand, if the Secretary decides the case is not worth prosecuting on the merits--perhaps a reason why he was willing to settle in the first place--he will never get a final order of any kind and will never have the opportunity to raise the issue which is before the court now.
14
Therefore, we conclude that the Commission's remand order is reviewable here, notwithstanding that it does not finally adjudicate the merits of the Whirlpool citation. Our failure to reach the question of the Union's right to object to an OSHA settlement in these circumstances would likely leave an important issue in the administration of the Act undecided. We follow the Second, Third, and Sixth Circuits, then, and hold the remand order reviewable. See Donovan v. OSHRC, supra, 713 F.2d at 922-25; Marshall v. OCAW, 647 F.2d 383, 386-87 (3d Cir.1981); Marshall v. OSHRC, 635 F.2d 544 (6th Cir.1980).4
15
B. Union Participation Under Sec. 659(c).
16
Under 29 U.S.C. Sec. 659(a), an employer has fifteen days after receipt of notice of citation or proposed penalty assessment from the Secretary to notify the Secretary of its intention to contest the citation or penalty. If the employer files no such notice, and no employee or employee representative files a section 659(c) notice, "the citation and the assessment, as proposed, shall be deemed a final order of the Commission and not subject to review by any court or agency." Thus in the absence of employer objection (and of employee filing under section 659(c)), the Secretary's citation and penalty take effect without the matter ever coming before the Commission or any of its ALJs at all. That is, barring employer objection to the citation or penalty or employee objection to the reasonableness of the abatement time, the Commission lacks jurisdiction to review the Secretary's action.
17
The question this appeal presents concerns what happens when the employer initially does object, but later settles its dispute with the Secretary before the matter ever actually reaches the Commission. Does the Commission still have jurisdiction to review the Secretary's action (as it clearly would had the employer not withdrawn its contest by settling), and, if so, how far does its review power extend? The answer to these questions rests largely on the interpretation of section 659(c), which provides,If an employer notifies the Secretary that he intends to contest a citation issued under section 658(a) of this title or notification issued under subsection (a) * * * of this section, or if, within fifteen working days of the issuance of a citation under section 658(a) of this title, any employee or representative of employees files a notice with the Secretary alleging that the period of time fixed in the citation for the abatement of the violation is unreasonable, the Secretary shall immediately advise the Commission of such notification, and the Commission shall afford an opportunity for a hearing (in accordance with section 554 of Title 5 but without regard to subsection (a)(3) of such section). The Commission shall thereafter issue an order, based on findings of fact, affirming, modifying, or vacating the Secretary's citation or proposed penalty, or directing other appropriate relief, and such order shall become final thirty days after its issuance. * * * The rules of procedure prescribed by the Commission shall provide affected employees or representatives of affected employees an opportunity to participate as parties to hearings under this subsection.
18
Under section 659(c), Commission jurisdiction over the Secretary's action can arise in either of two ways--(1) the employer can object to the citation or penalty, or (2) an employee or employee representative can object to the reasonableness of the abatement time. Where jurisdiction is employer-invoked, the Commission may consider any objections the employer raises, and affected employees or their representatives (ordinarily the union) may "participate as parties" to the hearing. In such employer-invoked hearings, employee participation is not limited solely to objecting to the reasonableness of the abatement time, OCAW v. OSHRC, 671 F.2d 643, 647 (D.C.Cir.), cert. denied, --- U.S. ----, 103 S.Ct. 206, 74 L.Ed.2d 165 (1982), though it is so limited when the employer does not file notice of contest and the matter comes before the Commission only at the instance of an employee or union. Thus, before a union has any right at all to be heard by the Commission on any issue other than the reasonableness of the abatement time, two conditions must be met--the Secretary must issue a citation, and the employer must invoke Commission jurisdiction by filing a notice of contest. Commission jurisdiction thus depends, initially at least, on the willingness of the Secretary to prosecute a citation and of the employer to contest it.
19
In this case, though, neither the Secretary nor the employer manifests any such continuing willingness. The Secretary does not wish to prosecute the citation further, and the employer has withdrawn its objection. In the circumstances, we do not think the Union is entitled to a hearing before the Commission on the merits of the settlement, aside from the reasonableness of the period of abatement, an issue that the Union has chosen not to raise. We draw this conclusion from the structure and purposes of the Act.
20
The Act vests in the Secretary the exclusive responsibility for both promulgating and enforcing occupational safety and health standards. The Commission's sole function is to adjudicate employer contests to citations the Secretary issues, and employee contests to the reasonableness of proposed abatement times. Indeed, Congress created the Commission because some members of the Senate feared that giving the Secretary both prosecutorial and adjudicatory responsibility could lead to overzealous enforcement of the Act against employers. See S.Rep. No. 1282, 91st Cong., 2d Sess., reprinted in 1970 U.S.Code Cong. & Ad.News 5177, 5218-5221, 5224-5227; Donovan v. OSHRC, supra, 713 F.2d at 930 n. 21.
21
The Commission differs from such other agencies as the National Labor Relations Board and the Federal Trade Commission in that its functions are solely adjudicatory. It has neither prosecutorial nor enforcement powers, nor any policymaking role to play. Donovan v. OSHRC, supra, 713 F.2d at 930; Marshall v. OSHRC, supra, 635 F.2d at 547; Marshall v. Sun Petroleum Products Co., supra, 622 F.2d at 1183-84; UAW v. OSHRC, 557 F.2d 607, 610 (7th Cir.1977); Dale M. Madden Construction, Inc. v. Hodgson, 502 F.2d 278, 280-81 (9th Cir.1974). But see Brennan v. Gilles & Cotting, Inc., 504 F.2d 1255, 1262 (4th Cir.1974). The Secretary alone sets the policies and enforces them. Donovan v. OSHRC, supra, 713 F.2d at 927; OCAW V. OSHRC, supra, 671 F.2d at 649-50; Marshall v. OSHRC, supra, 635 F.2d at 550; Marshall v. Sun Petroleum Products Co., supra, 622 F.2d at 1187; Dale M. Madden Construction, Inc. v. Hodgson, supra, 502 F.2d at 280-81. Thus several courts of appeals have held that, unlike, for example, the NLRB, the Commission is not a real party in interest to appeals taken from its orders, and is not entitled to defend them in court any more than a trial judge is entitled to appear in court to defend his decisions on appeal. See OCAW V. OSHRC, supra, 671 F.2d at 651-53; Marshall v. OSHRC, supra, 635 F.2d at 547; Marshall v. Sun Petroleum Products Co., supra, 622 F.2d at 1180-84. But see Brennan v. Gilles & Cotting, Inc., supra, 504 F.2d at 1266-67; Diamond Roofing v. OSHRC, 528 F.2d 645, 648 n. 8 (5th Cir.1976).
22
As sole prosecutor of OSHA violations, the Secretary has, as a natural incident to his enforcement powers, the discretion to withdraw or settle citations and to compromise penalties. Donovan v. OSHRC, supra, 713 F.2d at 927; OCAW v. OSHRC, supra, 671 F.2d at 650; Marshall v. OSHRC, supra, 635 F.2d at 550; Marshall v. Sun Petroleum Products Co., supra, 622 F.2d at 1187; Dale M. Madden Construction Co. v. Hodgson, supra, 502 F.2d at 280. Though the Act does not expressly grant settlement powers to the Secretary, he has them by implication under section 655(e), which provides:
23
Whenever the Secretary * * * grants any exemption or extension of time, or compromises, mitigates, or settles any penalty assessed under this chapter, he shall include a statement of the reasons for such action, which shall be published in the Federal Register. [emphasis added]
24
The Secretary's power to settle claims advances the central purpose of the Act, which is to "reduce safety hazards and improve working conditions." Dale M. Madden Construction, Inc. v. Hodgson, supra, 502 F.2d at 280. See also Donovan v. OSHRC, supra, 713 F.2d at 927. When the Secretary succeeds at getting a hazard abated as part of a settlement, he both advances the purposes of the Act and conserves administrative resources that, in the absence of settlement, would have to be devoted to protracted litigation. If the validity of the settlement (apart from the reasonableness of the abatement period) were subject to review by the Commission on protest from the Union, the prospect of continued litigation over the merits would likely discourage prompt settlement between employers and the Secretary.
25
We conclude, then, that it was within the Secretary's power to settle the Whirlpool citation. Just as neither the Commission nor the Union could force him to bring the citation in the first place, or to prosecute it if he decided it was not worth pursuing, neither can the Commission or the Union undo a settlement the Secretary has concluded.5
26
We fully understand the Union's concern over workplace hazards that affect the employees it represents. That concern is especially understandable in this case, where the Union alleges that it repeatedly brought the carbon monoxide hazard to Whirlpool's attention before OSHA investigated the Fort Smith plant, and that Whirlpool failed to do anything about it. Congress has, however, given employees and unions a very precisely defined and limited role in the occupational health and safety enforcement scheme.6 The Secretary alone has the authority to set health and safety standards, and to prosecute violations of them. Once the Secretary cites an employer for a violation, only the employer can invoke Commission review of any aspect of the citation other than the reasonableness of the abatement time. Employees and unions can compel a Commission hearing only on the reasonableness of the abatement time, unless the employer chooses to put other issues before the Commission. The Commission's power extends only to adjudicating matters the parties put in issue. In this case, neither the Secretary nor the employer wishes to contest anything before the Commission, and the Union has chosen not to raise the only issue on which it could, on its sole instance, obtain a Commission hearing--the reasonableness of the abatement time.
27
However much the Union might like to object to the Secretary's decision to recharacterize the violation and to reduce the penalty, that decision was, under the Act, the Secretary's, and the Secretary's alone, to make. The Secretary has elicited from Whirlpool a definite, specific commitment to abate the carbon monoxide hazard. The Union does not challenge the effectiveness of the proposed abatement plan, or the reasonableness of the abatement time. It objects only to the characterization of the violation as other than serious, and to the elimination of the civil penalty. But the Act aims principally at eliminating hazards in the workplace, and only incidentally at censuring or punishing violators. Here, the Secretary has obtained abatement on the employer's part. The central concern of the Act is thus satisfied. The Secretary, who has exclusive responsibility for enforcement, regards the matter as satisfactorily resolved. It is not for the Commission to say that the matter must be reopened.
28
Several adverse consequences would follow were we to adopt the Commission's and the Union's view. First, abatement will be delayed if the Commission can set aside a settlement until the Union can be heard on non-abatement-related issues. (The employer's duty to abate does not attach until the issuance of a final Commission order.) Second, the Secretary's discretion to allocate administrative enforcement resources would be impaired, if the Commission could order a hearing where the Secretary and the employer have already resolved their dispute. Third, both the Secretary and employers would have less incentive to settle, if employees and the Commission could undo any settlement they conclude. None of these results would serve the Act's principal purpose. Within the Act's scheme, the Commission functions only as a neutral arbiter of disputes between the Secretary and employers, or between the Secretary and employees or unions on the narrow question of the reasonableness of the proposed abatement time.
29
The Union argues that once an employer notifies the Secretary of its intention to contest a citation or penalty, the Commission retains jurisdiction of the matter and can go ahead with a full hearing on the merits, on its own or the Union's motion, even if the Secretary and the employer have resolved the matter to their mutual satisfaction. But this argument flies in the face of the statutory conception, under which the Commission is solely an adjudicator, not an enforcer, prosecutor, or policymaker, and under which, in the absence of dispute between the Secretary and the employer, the Union is entitled to contest and the Commission to review only the reasonableness of the abatement time. We reject the Union's contention that the initial filing of an employer contest gives the Union and the Commission the right to go ahead with the case on their own, even if the Secretary has settled the matter. The Act gives the employer only fifteen days to file a contest before the citation becomes absolutely unreviewable. Therefore an employer who disputes the Secretary's findings or proposed penalty will almost always file a contest, merely to preserve its rights, even where both the employer and the Secretary know the matter likely does not merit the expense and trouble of actual litigation before the Commission. That is, employers will file contests, simply because the fifteen-day rule practically forces them to do so, even in cases where they fully intend to settle. To say that in such cases the employer intentionally invoked Commission jurisdiction, and therefore must go through a full adjudication at the instance of the Union, even after the Secretary--the Act's sole enforcer--has secured a commitment from the employer to abate the hazard, would interfere needlessly with the efficient attainment of the Act's purposes.
30
We hold, therefore, that the withdrawal of an employer's contest to an OSHA citation or penalty ousts the Commission of jurisdiction to review the citation, the penalty, or the Secretary's settlement of them, except as to the reasonableness of the abatement time where an employee or a union has duly raised that issue. This holding is consistent with those of the Second and Third Circuits, Donovan v. OSHRC, supra, 713 F.2d at 931; Marshall v. Sun Petroleum Products Co., supra, 622 F.2d at 1185, and is supported by language in the District of Columbia Circuit's opinion in OCAW v. OSHRC, supra, 671 F.2d at 650 n. 7.
31
Accordingly, we vacate for want of jurisdiction the order of the Commission which disapproved the settlement and remanded the controversy for further proceedings.
32
ARNOLD, Circuit Judge, concurring in part and dissenting in part.
33
For the reasons so well stated by the Court, I agree that we have jurisdiction. But as to the merits, I respectfully dissent. If this were a case where the hearing process had been invoked by the employees or their representatives, the Union could not contest the settlement except on the ground that the abatement period was unreasonably long. In this case, however, the hearing process was triggered by a contest filed by the employer. In this situation, I do not believe that the statute, 29 U.S.C. Sec. 659(c), limits the Union so strictly. The employees have a vital interest in the subject matter of this case, an interest that goes beyond the issue of how long the employer should be given to abate the dangerous condition. They seem to believe, and understandably so, that labelling this violation as other than serious, and relieving the employer of any penalty whatever, will not be a sufficient deterrent to the repetition of similar events in the future. No one wants to work in a plant with high levels of carbon monoxide, and the employees are naturally interested in doing everything possible to see that such a hazard does not again occur.
34
The Court agrees that "[i]n such employer-invoked hearings, employee participation is not limited solely to objecting to the reasonableness of the abatement time ...." Ante, p. 1419. If this case had gone to hearing, then, and no settlement had been agreed upon between the Secretary of Labor and the employer, the Union could have participated fully in the hearing, and could have argued that the citation as originally filed properly characterized the violation as "serious" and properly sought a monetary payment. Here, as the Court points out, the case has been settled. I cannot agree that this circumstance limits the issues that the employees are entitled to raise, when the only provision in the statute indicating that the issues should be so limited applies in terms only to proceedings initiated by the employees or their representatives. It is also significant that the statute specifically authorizes the Commission to adopt rules of procedure giving affected employees or their representatives an opportunity "to participate as parties to hearings under this subsection." The right to participate as a party, I should think, includes the right to raise all issues in which a party has an interest, except those issues specifically placed off limits by the express words of the statute.
35
I forego a fuller statement and refer simply to the dissenting opinion of Judge Pollak in Marshall v. Sun Petroleum Products Co., 622 F.2d 1176, 1188-91 (3d Cir.), cert. denied, 449 U.S. 1061, 101 S.Ct. 784, 66 L.Ed.2d 604 (1980). I cannot improve on his reasoning, and I therefore respectfully dissent in this case.
1
Section 654(a)(2) requires employers to meet the occupational safety and health standards promulgated under the Occupational Safety and Health Act, 29 U.S.C. Secs. 651-678
2
Under 29 U.S.C. Sec. 659(a), a citation and penalty assessment issued by the Secretary automatically becomes a final order of the Occupational Safety and Health Review Commission, unless the employer within fifteen working days of receiving notice of the citation informs the Secretary of its intent to contest the citation or penalty, or unless an employee or employee representative within the same fifteen days files a notice alleging that the period of time fixed in the citation for the abatement of the violation is unreasonable
3
29 U.S.C. Sec. 660(b) provides for review or enforcement, at the Secretary's petition, of "any final order of the Commission."
4
The Third Circuit's recent decision in Engelhard Ind. v. OSHRC, 713 F.2d 45 (1983) is not to the contrary, as that court made clear by expressly distinguishing Engelhard from its earlier decision in Marshall v. OCAW, supra. See Engelhard, supra, 713 F.2d at 48, n. 4. In Marshall the Commission's remand order was reviewable, because the Secretary there, as here, sought review to vindicate his claim of statutory authority to conclude a settlement free from Commission-ordered union participation. In Engelhard, by contrast, it was the employer, not the Secretary, who sought review of a remand order disapproving a settlement to which the union objected. The Engelhard court reasoned that whereas the Secretary's objection to Commission disapproval of a settlement sought to advance important governmental interests in the administration of the Act (and thus merited review of the remand order), an employer has no right under the Act to be free from litigation, and so cannot object to the undoing of a settlement if the Secretary does not so object. The court therefore concluded that its refusal to review the remand order at the employer's sole request did not threaten to have important rights or interests unvindicated. We express no view on the question the Engelhard court decided; we merely take note of the distinction it drew between Engelhard and its earlier Marshall decision, which decision squares precisely with our holding of reviewability in the case before us now
5
Of course, had the Union objected to the reasonableness of the abatement time, that aspect of the settlement would have been open to Commission review. But the Union made no such objection in this case
6
Among other things, and in addition to the right to invoke Commission review of the reasonableness of proposed abatement times, the Act gives employees and their representatives a role in rulemaking proceedings, Sec. 655(b); the right to request the Secretary to conduct a workplace inspection, Sec. 657(f)(1); and the right to participate in hearings on employer applications for variances from applicable OSHA standards, Sec. 655(d)
| {
"pile_set_name": "FreeLaw"
} |
780 N.W.2d 821 (2010)
PEOPLE of the State of Michigan, Plaintiff-Appellee,
v.
Kajuan D. HALE, Defendant-Appellant.
Docket No. 139761. COA No. 290829.
Supreme Court of Michigan.
April 27, 2010.
Order
On order of the Court, the application for leave to appeal the August 26, 2009 order of the Court of Appeals is considered, and it is DENIED, because the defendant has failed to meet the burden of *822 establishing entitlement to relief under MCR 6.508(D).
| {
"pile_set_name": "FreeLaw"
} |
801 F.2d 1436
255 U.S.App.D.C. 397
U.S.v.Shaifer
86-3001
United States Court of Appeals,District of Columbia Circuit.
10/10/86
1
D.C.D.C.
AFFIRMED
| {
"pile_set_name": "FreeLaw"
} |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
AMERICAN CIVIL LIBERTIES UNION )
OF SOUTHERN CALIFORNIA, )
)
Plaintiff, )
)
v. ) Civil Action No. 13-cv-861 (TSC)
)
UNITED STATES CITIZENSHIP AND )
IMMIGRATION SERVICES, )
)
Defendant. )
)
MEMORANDUM OPINION
Before the court are the parties’ cross-motions for summary judgment. Upon
consideration of the motions, the responses and replies thereto, and for the following reasons, the
Court grants in part and denies in part both motions.
I. BACKGROUND
The American Civil Liberties Union of Southern California (“ACLU”) brought this
action under the Freedom of Information Act (“FOIA”), 5 U.S.C. §§ 552 et seq., challenging
United States Citizenship and Immigration Services’ (“USCIS”) search and withholdings in
response to ACLU’s May 17, 2012 FOIA request. That request broadly sought two categories of
information: records relating to or concerning “policies for the identification, vetting and
adjudication of immigration benefits applications with national security concerns,” and statistical
information related to the processing of benefits applications. (Pl. Cross Mot. Summ. J. at 2-3).
Underlying ACLU’s request was a concern “that certain immigrants—including Muslim, Arab,
Middle Eastern and South Asian immigrants—are treated differently than other applicants in
their efforts to obtain naturalization and other important immigration benefits.” (Eggleston Decl.
1
Ex. A). This differential treatment is apparently institutionalized through the Controlled
Application Review and Resolution Program, or CARPP.
In response to ACLU’s request, USCIS originally identified 389 responsive pages,
releasing some in whole or in part, and withholding others. (Eggleston Decl. ¶ 16). After ACLU
appealed the decision, the agency remanded the request for further processing. Having not
received a timely response, ACLU then filed this lawsuit. Judge Ketanji Brown Jackson, who
was then assigned to the case, ordered USCIS to complete its processing of the request by a date
certain, which resulted in numerous rolling productions over the course of a year. (Id. at ¶ 26).
A total of 1,503 have now been processed and reprocessed, with varying levels of redactions.
(Def. Mot. S.J. at 2). Four issues are currently before the court: the application of Exemption
7(E),1 the adequacy of the agency’s search, the scope of the agency’s search, and whether the
agency has released all segregable portions of the records.
II. LEGAL STANDARD
a. Motion for Summary Judgment
Summary judgment may be granted if “the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986); Holcomb v.
Powell, 433 F.3d 889, 895 (D.C. Cir. 2006). Summary judgment may be rendered on a “claim or
defense . . . or [a] part of each claim or defense.” Fed. R. Civ. P. 56(a). “A party asserting that a
fact cannot be or is genuinely disputed must support the assertion by citing to particular parts of
materials in the record.” Fed. R. Civ. P. 56(c)(1)(A). “A fact is ‘material’ if a dispute over it
might affect the outcome of a suit under the governing law; factual disputes that are ‘irrelevant or
1
ACLU does not challenge USCIS’ withholdings based on Exemptions 5, 6, or 7(C).
2
unnecessary’ do not affect the summary judgment determination.” Holcomb, 433 F.3d at 895
(quoting Liberty Lobby, 477 U.S. at 248). An issue is “genuine” if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party. See id. The party seeking
summary judgment “bears the heavy burden of establishing that the merits of his case are so
clear that expedited action is justified.” Taxpayers Watchdog, Inc., v. Stanley, 819 F.2d 294, 297
(D.C. Cir. 1987).
In considering a motion for summary judgment, “the evidence of the nonmovant[s] is to
be believed, and all justifiable inferences are to be drawn in [their] favor.” Liberty Lobby, 477
U.S. at 255; see also Mastro v. Potomac Elec. Power Co., 447 F.3d 843, 850 (D.C. Cir. 2006).
The nonmoving party’s opposition, however, must consist of more than mere unsupported
allegations or denials, and must be supported by affidavits, declarations, or other competent
evidence, setting forth specific facts showing that there is a genuine issue for trial. Fed. R. Civ.
P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). The nonmovant is required to
provide evidence that would permit a reasonable jury to find in his favor. Laningham v. U.S.
Navy, 813 F.2d 1236, 1242 (D.C. Cir. 1987).
b. FOIA
“FOIA provides a ‘statutory right of public access to documents and records’ held by
federal government agencies.” Citizens for Responsibility & Ethics in Washington v. DOJ, 602
F. Supp. 2d 121, 123 (D.D.C. 2009) (quoting Pratt v. Webster, 673 F.2d 408, 413 (D.C. Cir.
1982)). FOIA requires that federal agencies comply with requests to make their records
available to the public, unless such “information is exempted under clearly delineated statutory
language.” Id. (internal quotation marks omitted); see also 5 U.S.C. § 552(a), (b).
3
“‘FOIA cases typically and appropriately are decided on motions for summary
judgment.’” Georgacarakos v. FBI, 908 F. Supp. 2d 176, 180 (D.D.C. 2012) (quoting Defenders
of Wildlife v. U.S. Border Patrol, 623 F. Supp. 2d 83, 87 (D.D.C. 2009)). The district court
conducts a de novo review of the government’s decision to withhold requested documents under
any of FOIA’s specific statutory exemptions. 5 U.S.C. § 552(a)(4)(B). Thus, the agency bears
the burden of showing that nondisclosed, requested material falls within a stated exemption.
Petroleum Info. Corp. v. U.S. Dep’t of the Interior, 976 F.2d 1429, 1433 (D.C. Cir. 1992) (citing
5 U.S.C. § 552(a)(4)(B)); Liberty Lobby, 477 U.S. at 254. In cases concerning the applicability
of exemptions and the adequacy of an agency’s search efforts, summary judgment may be based
solely on information provided in the agency’s supporting declarations. See, e.g., ACLU v. U.S.
Dept. of Def., 628 F.3d 612, 619 (D.C. Cir. 2011); Students Against Genocide v. Dept. of State,
257 F.3d 828, 838 (D.C. Cir. 2001). “If an agency’s affidavit describes the justifications for
withholding the information with specific detail, demonstrates that the information withheld
logically falls within the claimed exemption,” and “is not contradicted by contrary evidence in
the record or by evidence of the agency’s bad faith, then summary judgment is warranted on the
basis of the affidavit alone.” ACLU, 628 F.3d at 619. “Ultimately, an agency’s justification for
invoking a FOIA exemption is sufficient if it appears ‘logical’ or ‘plausible.’” Id. (internal
quotation marks omitted) (quoting Larson v. Dep’t of State, 565 F.3d 857, 862 (D.C. Cir. 2009)).
However, a motion for summary judgment should be granted in favor of the FOIA requester
“[w]hen an agency seeks to protect material which, even on the agency’s version of the facts,
falls outside the proffered exemption”. Coldiron v. DOJ, 310 F. Supp. 2d 44, 48 (D.D.C. 2004)
(quoting Petroleum Info. Corp., 976 F.2d at 1433).
4
The FOIA requires that “[a]ny reasonably segregable portion of a record shall be
provided to any person requesting such record after deletion of the portions which are exempt.”
5 U.S.C. § 552(b). More specifically, “[i]t has long been a rule in this Circuit that non-exempt
portions of a document must be disclosed unless they are inextricably intertwined with exempt
portions.” Mead Data Central, Inc. v. U.S. Dep’t of the Air Force, 566 F.2d 242, 260 (D.C. Cir.
1977). In order to withhold a file or portion thereof under a FOIA exemption, “the Government
must make that showing in its Vaughn index and in such affidavits as it may submit therewith.”
Kimberlin v. DOJ, 139 F.3d 944, 950 (D.C. Cir. 1998). “The index required by Vaughn is
designed to permit adequate adversary testing of the agency's claimed right to an exemption.”
Nat'l Treasury Employees Union v. U.S. Customs Serv., 802 F.2d 525, 527 (D.C. Cir. 1986).
III. ANALYSIS
a. USCIS’s Withholding of Records Pursuant to Exemption 7(E)
The FOIA contains nine exemptions on which agencies may rely to withhold documents.
Under Exemption 7, the Act “does not apply” to “records or information compiled for law
enforcement purposes” if they fall into one of six enumerated categories. 5 U.S.C. § 552(b)(7).
The only category at issue here is subsection (E), which allows an agency to withhold records if
they “would disclose techniques and procedures for law enforcement investigations or
prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if
such disclosure could reasonably be expected to risk circumvention of the law.” Id. §
552(b)(7)(E).
The parties raise two threshold issues. The first involves the proper construction of
Exemption 7(E), which states that an agency may withhold information that “would disclose
techniques and procedures for law enforcement investigations or prosecutions, or would disclose
5
guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably
be expected to risk circumvention of the law.” 5 U.S.C § 552(b)(7)(E). The parties originally
disputed whether the phrase “if such disclosure could reasonably be expected to risk
circumvention of the law” modifies only “would disclose guidelines for law enforcement
investigations or prosecutions” or also modifies “would disclose techniques and procedures for
law enforcement investigations or prosecutions.” Some courts have held that circumvention of
the law is only required for guidelines for investigations, making techniques and procedures
categorically exempt under 7(E). See, e.g., McRae v. U.S. Dep’t of Justice, 869 F. Supp. 2d 151,
168-69 (D.D.C. 2012). Other courts have held that a showing of risk of circumvention of the law
is required for both types of records. See, e.g., Muslim Advocates v. U.S. Dep’t of Justice, 833 F.
Supp. 2d 106, 108-09 (D.D.C. 2012). The D.C. Circuit has not resolved this discrepancy. See
Citizens for Responsibility & Ethics in Washington v. U.S. Dep’t of Justice, 746 F.3d 1082, 1102
(D.C. Cir. 2014). However, this court does not need to decide the issue, because at oral
argument, counsel for USCIS conceded that risk of circumvention of the law is a necessary
showing for both categories of Exemption 7(E) records. (Transcript of July 28, 2015 Motions
Hearing at 14). Therefore, the court will assume that USCIS must show a risk of circumvention
of the law for all its Exemption 7(E) withholdings.
The parties also dispute whether USCIS is subject to a heightened standard of review for
Exemption 7 purposes because it is not a traditional law enforcement agency. Plaintiff cites a
line of cases which hold that courts should use “more exacting scrutiny of Exemption 7 claims
by agencies whose principal function is not law enforcement.” Pratt v. Webster, 673 F.2d 408,
416 (D.C. Cir. 1982). Defendant responds that it is the purpose of the records, not the role of the
agency, that is determinative, because Exemption 7(E) “mak[es] no reference to, distinction
6
between, or limitation on the sort of agency currently in custody of the document.” Mezerhane
de Schnapp v. United States Citizenship & Immigration Servs., 67 F. Supp. 3d 95, 101 (D.D.C.
2014). The court will not dwell on these distinctions, because both parties are correct—while
USCIS is right that the analysis is grounded in the purpose of the document at issue, not the
nature of the agency, ACLU is also correct that, as the D.C. Circuit explained in Pratt, for
mixed-function agencies—i.e., agencies whose functions include some law enforcement and
some non-law enforcement duties— “a court must scrutinize with some skepticism the particular
purpose claimed for disputed documents redacted under FOIA Exemption 7.” Pratt, 673 F.2d at
418.
ACLU argues that as a mixed-function agency, USCIS has failed to meet its burden
because it has not shown that it compiled the withheld documents for law enforcement purposes.
It further asserts that the CARPP is an administrative program concerned with the processing and
dispensation of immigration benefits, and is unrelated to the enforcement of law for Exemption 7
purposes.
While USCIS as a whole may primarily engage in civil administration and not law
enforcement, based on the agency’s declarations, it appears that in this particular context national
security concerns play an important role in the agency’s policies and procedures. This Circuit
has held that national security is within the realm of law enforcement purposes sufficient to
justify withholding based on Exemption 7. See Strang v. U.S. Arms Control & Disarmament
Agency, 864 F.2d 859, 862 (D.C. Cir. 1989) (“we do not interpret ‘law enforcement’ as limited to
criminal law enforcement, as Strang would have us do; rather, we read the term as encompassing
the enforcement of national security laws as well.”); Pratt v. Webster, 673 F.2d 408, 420 (D.C.
Cir. 1982) (“the agency’s investigatory activities that give rise to the documents sought must be
7
related to the enforcement of federal laws or to the maintenance of national security”). This is
not to say that USCIS has shown that all the withheld documents were compiled for law
enforcement purposes (it has not), but that USCIS can invoke Exemption 7(E) even if it does not
engage in traditional “law enforcement” activities.
ACLU also argues that Pratt requires that a record must be related to a specific law
enforcement investigation to qualify for withholding under Exemption 7(E), and USCIS has not
tied any of the withheld documents to a law enforcement investigation of a particular incident or
individual. This argument is misplaced. In Pratt, the D.C. Circuit set forth a two-part test for
establishing that documents were compiled for law enforcement purposes. The first step requires
the agency to “identify a particular individual or a particular incident as the object of its
investigation and the connection between that individual or incident and a possible security risk
or violation of federal law.” Pratt v. Webster, 673 F.2d 408, 420 (D.C. Cir. 1982); see also
Jefferson v. Dep’t of Justice, Office of Prof’l Responsibility, 284 F.3d 172, 176-77 (D.C. Cir.
2002). However, the D.C. Circuit later explained that an amendment to the language of
Exemption 7 expanded its scope beyond investigatory records. Where Exemption 7 originally
read “investigatory records compiled for law enforcement purposes”, it now reads “records or
information compiled for law enforcement purposes.” 5 U.S.C. § 552(b)(7). “It is clear that,
under the amended threshold of Exemption 7, an agency may seek to block the disclosure of
internal agency materials relating to guidelines, techniques, sources, and procedures for law
enforcement investigations and prosecutions, even when the materials have not been compiled in
the course of a specific investigation . . . The amended threshold to Exemption 7 ‘resolve[s] any
doubt that law enforcement manuals and other non-investigatory materials can be withheld under
(b)(7) if they were compiled for law enforcement purposes and their disclosure would result in
8
one of the six recognized harms to law enforcement interests set forth in the subparagraphs of the
exemption.’” Tax Analysts v. I.R.S., 294 F.3d 71, 79 (D.C. Cir. 2002) (citations omitted). In Tax
Analysts, the court explained that Pratt is still applicable in cases where the records are tied to a
particular investigation, but that is no longer a threshold requirement for Exemption 7.
Therefore, the fact that some or all of USCIS’s withholdings are not tied to a particular
investigation is not dispositive here.
The court now considers the actual substance of the agency’s Exemption 7(E)
withholdings. ACLU faults the agency on two main grounds: that it has not provided enough
information to show that the records were created for law enforcement purposes, and that it has
not provided enough information to show that release of the records would risk circumvention of
the law. As explained above, USCIS can satisfy the law enforcement purposes test by invoking
national security concerns, but the court (as is required for mixed-function agencies) analyzes
those claims with some skepticism. As for risk of circumvention of the law, the D.C. Circuit has
explained that “the exemption looks not just for circumvention of the law, but for a risk of
circumvention; not just for an actual or certain risk of circumvention, but for an expected risk;
not just for an undeniably or universally expected risk, but for a reasonably expected risk; and
not just for certitude of a reasonably expected risk, but for the chance of a reasonably expected
risk . . . Rather than requiring a highly specific burden of showing how the law will be
circumvented, exemption 7(E) only requires that the [agency] demonstrate logically how the
release of the requested information might create a risk of circumvention of the law.” Mayer
Brown LLP v. IRS, 562 F.3d 1190, 1193-94 (D.C. Cir. 2009) (internal quotation marks and
alterations omitted).
9
USCIS’s amended Vaughn index is exemplary in some respects, and utterly lacking in
others. To the agency’s credit, it is clear, based on the Vaughn index, that it completed a
thorough review of the records. It has provided the court in most instances with ample detail
regarding the nature of the techniques, procedures, and guidelines withheld. This is therefore not
like the case in Dent v. EOUSA, 926 F. Supp. 2d 257 (D.D.C. 2013), where the court faulted the
agency for not providing enough information about the substance of the records withheld. See
id. at 272-73 (“FBI cannot rely upon the vaguely worded categorical description it has provided,
and must instead provide evidence from which the Court can deduce something of the nature of
the techniques in question.”).
However, while USCIS has adequately described the substance of the records in question,
it has offered in many instances, vague and conclusory explanations why those records should be
withheld pursuant to Exemption 7(E). For most of its Vaughn index entries, USCIS engages in a
lengthy discussion of the nature of the records, but merely states without explanation that that the
records were “complied for law enforcement purposes related to processing cases involving
potential [national security] concerns” and then states in conclusory fashion that “[i]f released,
this information would disclose techniques and procedures for law enforcement investigations
and could reasonably be expected to risk circumvention of the law by future applicants.” (See,
e.g., amended Vaughn Index p. 1). There is no explanation of how the information, if released,
could risk circumvention of the law, no explanation of what laws would purportedly be
circumvented, and little detail regarding what law enforcement purpose is involved (other than
vague references to “national security concerns”). This is not enough to justify withholding
records under the FOIA. See Strunk v. U.S. Dep’t of State, 845 F. Supp. 2d 38, 47 (D.D.C. 2012)
(“FOIA demands ‘a relatively detailed justification, specifically identifying the reasons why a
10
particular exemption is relevant and correlating those claims with the particular part of a
withheld document to which they apply.’ CBP’s submissions offer too little detail to allow this
Court to undertake a meaningful assessment of the redacted material.”) (citation omitted). For
some entries, USCIS does not even recite the statutory language, and instead merely invokes
Exemption 7(E) without explanation.2 Oher entries appear to have no explanation at all. (See
Amended Vaughn Index at pp. 30-33) (no references to Bates pages 603, 652-59, 726, 768-771,
774, 800-804, 831, 834-58).
This lack of explanation is particularly puzzling given that some entries in the Vaughn
index do provide sufficient information to justify USCIS’s withholdings. For example, USCIS
provided the following explanation for withheld pages 315-17:
Exemption (b)(7)(E): The memorandum was compiled for law enforcement purposes and
contains information and procedures related to processing cases involving potential
national security concerns. Specifically, the memorandum reveals the points in the
process that immigration officers try to identify a national security concern, and the
methods used to identify the concern, including the background check databases searched
and other sources used to obtain information. Further, the memorandum provides
guidance on who to contact for further vetting and security checks once they have
identified a national security concern. If disclosed, this information would disclose
techniques and procedures for law enforcement investigations that could reasonably be
expected to risk circumvention of the law, by providing enough information to allow an
applicant to ascertain the type of national security concern that the officer has identified,
and how to avoid certain words or behaviors that assist USCIS officers in identifying a
potential national security concern.
(Amended Vaughn Index p. 12). Unlike many of its entries, here USCIS adequately explains
what national security purposes were involved in the creation of the record, and how its release
could risk circumvention of the law. This entry (and the others like it) are adequate for
2
See, e.g., Amended Vaughn Index at p. 10, entry 2 (“This interoffice memorandum dated May 24, 2007, is titled
‘Processing the Discretionary Exemption to the Inadmissibility Ground for Providing Material Support to Certain
Terrorist Organizations.’ This memorandum was issued to USCIS’s Associate Directors, Chief Counsel and the
Chief of Administrative Appeals by USCIS’s Deputy Director, and outlines instructions for adjudicating those
applications for immigration benefits filed with USCIS where an applicant is found to be inadmissible or otherwise
barred from an immigration benefit for having provided material support to a terrorist organization. The
memorandum was partially withheld pursuant to Exemption (b)(7)(E).”)
11
Exemption 7(E) purposes. See Blackwell v. F.B.I., 646 F.3d 37, 41-42 (D.C. Cir. 2011) (finding
explanations adequate where declarant explained that “[t]he release of specifics of these
investigative techniques would risk circumvention of the law by individuals who seek to utilize
computers in violation of laws. By releasing that information, the FBI would be exposing
computer forensic vulnerabilities to potential criminals,” and disclosure of reports “could enable
criminals to employ countermeasures to avoid detection, thus jeopardizing the FBI’s
investigatory missions.”) (internal quotation marks and citations omitted).
Based on its review of the amended Vaughn index, the court grants summary judgment to
USCIS with respect to the following withheld pages, which it finds adequately describe both the
law enforcement purpose at issue and the risk of circumvention of the law: pages 241-242, 315-
17, 319-30, 526-27, 544-547, 548-549, 550-556, 562, 564, 567-574, 582, 584-589, 881, 891,
919, 932, 951-952, 965-966, 979-980, 984-987, 989-998, 1000-1024, 1060-1066, and 1294. The
court will also grant summary judgment to USCIS with respect to pages 228, 331-332, 334, 350-
352, 366, 369-370, 373-373, 376-379, 382-387, 389, 392, 395-397, 402, 404-405, 406-407, 408,
410, 415-422, 435-438, 441-445, 449-457, 460-462, 464, 466-467, 470-484, 486-494, 496-501,
504, 509, 511, 513, 519-520, 535-543, 590-593, 604, 610-611, 613, 614-624, 650, 663, 1051-
1054, 1068-1084, 1138, 1163-1165, and 1167-1170, which describe law enforcement databases,
because such information may be routinely withheld. See Isiwele v. United States Dep't of Health
& Human Servs., 85 F. Supp. 3d 337, 360 (D.D.C. 2015) (“ICE properly redacted . . . database
codes, case numbers, and numeric references, specifically from TECS, under FOIA 7(E).”)
(internal quotations omitted); Gosen v. United States Citizenship & Immigration Servs., 75 F.
Supp. 3d 279, 290 (D.D.C. 2014) (“Indeed, many courts have upheld the government's
withholding of the same sort of information from the same databases that are at issue in this
12
case.”). The remaining pages are either lacking specificity with respect to the law enforcement
purpose at issue (see, e.g., entry for page 1294), the risk of circumvention of the law (see, e.g.,
entry for page 1145), or both. Summary judgment is denied with respect to those withholdings.
The court does not mean to suggest that it will take an overly formalistic view of
USCIS’s explanations for its withholdings if and when USCIS submits revised declarations and a
revised Vaughn index. Indeed, the D.C. Circuit has explained that in some circumstances – such
as the law enforcement databases described above -- the basis for an Exemption 7(E)
withholding can be self-evident even where the agency does not mirror the statutory language.
See Morley v. C.I.A., 508 F.3d 1108, 1129 (D.C. Cir. 2007) (“It is self-evident that information
revealing security clearance procedures could render those procedures vulnerable and weaken
their effectiveness at uncovering background information on potential candidates. Agencies
must apply the correct standards when claiming FOIA exemptions, but they need not parrot the
statutory language in doing so.”). In Morley, however, the CIA withheld documents related to
background investigations of prospective employees, which the court held “inherently relate to
law enforcement” and were well within Exemption 7(E)’s purview. Morley v. C.I.A., 508 F.3d
1108, 1129 (D.C. Cir. 2007). Given the fact that USCIS is a mixed-function agency (requiring
this court to view its withholdings with some skepticism), and the documents relate primarily to
immigration benefits processing, not law enforcement in the traditional sense, the court is less
willing to give USCIS the same benefit of the doubt as the court gave the CIA in Morley. USCIS
is not required to adhere to a rigid formula to satisfy its burden, but for the withholdings that
remain outstanding, it must provide the court with additional explanation justifying its invocation
of Exemption 7(E).3
3
At oral argument, counsel for USCIS intimated that providing additional information in the Vaughn index might be
untenable because it would reveal the very information USCIS sought to withhold. While the court is somewhat
13
b. Adequacy of the Search
ACLU originally challenged the adequacy of USCIS’s search in light of its failure to
produce a “CARPP Manual” and certain monthly reports. USCIS explained that it had produced
the CARPP Manual, but because it had a different name, ACLU did not know that it had been
produced. This issue is therefore moot. As for the monthly reports, ACLU argues that some of
the reports are still missing, and that the number of times USCIS has had to conduct
supplemental searches is evidence that its search was inadequate.
In ruling on the adequacy of an agency’s search in response to a FOIA request, “[t]he
question is not whether there might exist any other documents possibly responsive to the request,
but rather whether the search for those documents was adequate. The adequacy of the search, in
turn, is judged by a standard of reasonableness and depends, not surprisingly, upon the facts of
each case. In demonstrating the adequacy of the search, the agency may rely upon reasonably
detailed, nonconclusory affidavits submitted in good faith.” Steinberg v. DOJ, 23 F.3d 548, 551
(D.C. Cir. 1994) (internal quotation marks and citations omitted). An agency may prove the
reasonableness of its search via the declaration of a responsible agency official, so long as the
declaration is reasonably detailed and not controverted by contrary evidence or evidence of bad
faith. Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C. Cir. 1981). There is no
requirement that an agency search every record system, but the agency must conduct a good
faith, reasonable search of those records systems likely to possess the requested information.
Oglesby v. Dep’t of Army, 920 F.2d 57, 68 (D.C. Cir. 1990). The agency declaration can
puzzled by this explanation given USCIS’s ability to provide adequate descriptions for some of the withheld
documents, if upon further review USCIS believes it can only provide additional information in camera, it may
move the court for leave to file an in camera Vaughn index, but must show that it has met its burden in making such
a request. See, e.g., Wolfe v. Dep't of Health & Human Servs., 839 F.2d 768, 771 n.3 (D.C. Cir. 1988); Yeager v.
Drug Enforcement Admin., 678 F.2d 315, 325 (D.C. Cir. 1982).
14
demonstrate reasonableness by “setting forth the search terms and the type of search performed,
and averring that all files likely to contain responsive materials (if such records exist) were
searched.” Sanders v. Obama, 729 F. Supp. 2d 148, 155 (D.D.C. 2010), aff’d sub nom. Sanders
v. DOJ, 10-5273, 2011 WL 1769099 (D.C. Cir. Apr. 21, 2011) (citation omitted). Once an
agency has provided adequate affidavits, the burden reverts to the plaintiff to demonstrate the
lack of a good faith search. Id. The presumption of good faith “cannot be rebutted by purely
speculative claims about the existence and discoverability of other documents.” SafeCard Servs.
v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991) (internal quotation marks omitted).
USCIS’s declarations here include enough information about the search for the court to
find that it was adequate. (See Eggleston Decl. ¶¶ 37-39, Kendall Decl.). ACLU requested the
number of immigration benefit applications involving known or suspected terrorists for the years
2008-2012, and it appears that USCIS produced this information for each year during that time
period. (Kendall Decl. ¶ 17(c)). Given that ACLU did not ask for monthly statistics, it is not
clear why USCIS’s failure to provide such statistics is relevant, since USCIS otherwise
adequately responded to the request. In any event, USCIS explained in its submissions and at
oral argument that the monthly reports at issue were not always generated systematically.
USCIS officials chose to generate reports from an underlying data set, sometimes monthly,
sometimes quarterly, and perhaps sometimes not at all. There was not a consistent method to
generating the reports from 2008-2012, and no central database where USCIS officials
necessarily saved the reports they generated. (Kendall Decl. ¶ 19; Def. Opp’n. at 4-6.)
Therefore, USCIS explained that it searched for whatever reports existed, and to the extent a
particular month or quarter is not represented, a report may not have ever been made for that
time period or USCIS may no longer have a copy of it. This is enough to demonstrate the
15
reasonableness of USCIS’s search, and ACLU’s assertion that some reports remain missing is
not enough to overcome the good faith presumption afforded to USCIS. See Iturralde v.
Comptroller of Currency, 315 F.3d 311, 315 (D.C. Cir. 2003) (“it is long settled that the failure
of an agency to turn up one specific document in its search does not alone render a search
inadequate . . . After all, particular documents may have been accidentally lost or destroyed, or a
reasonable and thorough search may have missed them.”). Because the court is satisfied that
USCIS has provided the court with an explanation of the reports’ whereabouts (or lack thereof),
it grants summary judgment to USCIS on the adequacy of the search.
c. Scope of the Search
ACLU challenges the scope of USCIS’s search with respect to two groups of documents:
page 550 and pages 565-66, 575, and 584. For both, ACLU argues that USCIS impermissibly
deemed certain parts of the records “out of scope,” and therefore redacted the records without
processing them and relying on an exemption.
Page 550 is part of a training manual. USCIS claims that the portions it deemed out of
scope have nothing to do with national security. ACLU argues that USCIS has not offered any
explanation as to how it determined that some parts of the training manual related to national
security and others did not. USCIS explains that the training manual “covers a variety of issues
related to the adjudication of asylum applications, some of which relate to CARRP and national
security matters, and some that do not . . . The information that was determined to be out of
scope related solely to the adjudication of asylum applications. Here, on Bates Page 550, the out
of scope information related to potential bars to asylum that do not relate to CARRP or national
security concerns, and as such, was not processed.” (Def. Opp’n 10). This explanation is borne
16
out by the document itself.4 The top of the page is redacted as out-of-scope. Underneath that
redaction there is a heading titled “Indicators of Possible National Security Risk.” It is logical to
assume that whatever may have been above that heading did not relate to indicators of possible
national security risk, which is the subject of ACLU’s FOIA request. The court therefore accepts
the agency’s explanation for why the information on page 550 was out of scope.
USCIS’s explanation for the other pages does not fare as well. USCIS explains that
“[t]hese pages were part of a large training module . . . While the title of the module relates to
National Security, portions of the material pertains solely to the adjudication of asylum and
refugee applications, and is not related to national security or the CARRP process . . . [USCIS]
determined that some of the materials related to Terrorist-Related Inadmissibility Grounds
(TRIG) may potentially relate to national security issues, and in those cases, USCIS processed
the materials. However, USCIS did not process any information regarding the TRIG process that
was unrelated to the subject of Plaintiff’s requests and instead related solely to general
adjudication information or processing guidance.” (Def. Opp’n 11). For pages 565-66, USCIS
claims that “portions of a table of contents were determined to be out of scope because they
consisted of asylum and refugee adjudication information relating to USCIS’s Terrorist-Related
Inadmissibility Grounds (TRIG) process, which is a separate process from the CARRP process.”
(Id.) And for pages 575 and 584, USCIS claims that they include “information related to the
TRIG process in the context of general processing guidance, and did not relate to the CARRP
process or national security concerns.” (Id.).
USCIS’s arguments with respect to these pages are contradicted on numerous levels.
First, it strains credulity to assert that “Terrorism-Related Inadmissibility Grounds” are unrelated
4
The parties provided the court with copies of the “out of scope” pages at oral argument.
17
to national security concerns. Second, ACLU’s request was not solely limited to the CARRP
process, but also sought records related to national security indicators more generally. (See, e.g.,
Eggleston Decl. Ex. A p. 3 at ¶ 3). Lastly, USCIS appears to have processed other records
relating to TRIG that contain no reference to CARRP without deeming them out of scope. (See
Amended Vaughn Index at pp. 5-6 (processing “TRIG Instructor Guide”)). Because USCIS has
not adequately explained why these pages related to TRIG are “clearly and without any doubt
unrelated to the subject of the request,” it must process them as responsive to ACLU’s FOIA
request and either release them or claim an appropriate exemption. Am. Immigration Lawyers
Ass’n v. Executive Office for Immigration Review, No. 13-840, 2015 WL 3875801, at *1 (D.D.C.
June 23, 2015) (internal citation and quotations omitted).
d. Segregability
FOIA requires an agency to produce “any reasonably segregable portion” of a record that
is not exempt from disclosure, 5 U.S.C. § 552(b), and the court must affirmatively determine
whether the agency has done so. ACLU alleges that USCIS’s segregability determinations do
not explain with reasonable specificity why documents withheld pursuant to Exemption 7(E)
cannot be further segregated. ACLU argues that USCIS has offered only conclusory statements
as to segregability, and therefore has not provided ACLU and the court with enough information
to reasonably determine whether USCIS adequately segregated the exempt and non-exempt
portions of the records.
The court will withhold ruling on the agency’s segregability determinations with respect
to the entries it found lacking under Exemption 7(E). Because the court denies summary
judgment with respect to those entries (meaning the agency will have to either reconsider those
18
entries or release them), it would serve no purpose to rule on segregability where the
determinations may change.
With respect to the entries the court found sufficient under Exemption 7(E), ACLU
challenges two of the three entries (pages 319-30 and 526-27) as lacking specificity. For both,
USCIS certified that it released all segregable, non-exempt material, and provides examples of
how it differentiated between exempt and non-exempt information. See Amended Vaughn Index
p. 14 (“Examples of this non-exempt and released material include a partial summary of the
memorandum, a listing of some of the background check requirements and implementation
instructions); p. 23 (“All information on the first page, p. 525, was released. Non-exempt and
released material on pp. 526-527 included the headers and footers, as it was deemed non-
exempt”). It appears that the agency carefully reviewed each page and separated exempt and
non-exempt material, and the court does not find its explanations lacking in specificity.
Therefore, summary judgment for USCIS is granted with respect to these two entries.
IV. CONCLUSION
For the foregoing reasons, USCIS’s motion for summary judgment is granted with
respect to the adequacy of the search, granted in part and denied in part with respect to the scope
of the search, granted in part with respect to segregability, and granted in part and denied in part
with respect to withholdings under Exemption 7(E) as described above. ACLU’s motion for
summary judgment is similarly granted in part and denied in part. An appropriate Order
accompanies this Memorandum Opinion.
19
Date: September 30, 2015
Tanya S. Chutkan
TANYA S. CHUTKAN
United States District Judge
20
| {
"pile_set_name": "FreeLaw"
} |
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-00-00725-CV
Lockie Sailor, Appellant
v.
Daisy V. Phillips, Appellee
FROM THE DISTRICT COURT OF TOM GREEN COUNTY, 51ST JUDICIAL DISTRICT
NO. 121-J, HONORABLE BARBARA L. WALTHER, JUDGE PRESIDING
Lockie Sailor, a divorced mother of two children, appeals the district court’s order
requiring her to let Daisy V. Phillips (“Phillips”), the children’s paternal grandmother, visit the
children after the termination of the parental rights of the children’s father, Dudley Phillips
(“Doug”)—Phillips’s son and Sailor’s ex-husband. Sailor contends that the statute permitting court-
ordered visitation by grandparents is unconstitutional, that the order violates her constitutional right
to autonomy in child-rearing decisions, and that the ordered visitation is not in the best interest of the
children. See Tex. Fam. Code Ann. § 153.433 (West Supp. 2001) (governing orders for grandparent
visitation). We will affirm the visitation order.
The parties largely agree on the facts underlying the judgment. While married, Sailor
and Doug had two sons, one born in July 1985 and another born in May 1987. After Sailor and Doug
divorced in 1989, he failed to pay child support. Sailor married her current husband in 1990. Phillips
petitioned for and received temporary grandparent access while Doug resided in a chemical
dependency treatment facility; the order expired upon his release in 1992. After Doug failed to pay
child support and visited the boys sporadically, his parental rights were terminated in 1996. Phillips
testified that she last had face-to-face contact with the boys in November 1996, shortly after the
termination, and last spoke with them on the telephone in December 1996. Sailor testified that the
last contacts were in 1997. In 1998, Sailor’s current husband adopted the boys, who took his last
name.
In 2000, Phillips filed her petition for grandparent access to the boys. Sailor stated
in her answer that Phillips’s request was not in the children’s best interest. After a non-jury trial, the
court found that contact with Phillips was in the children’s best interest. The trial court ordered at
least monthly contact on the telephone, one week of possession each summer if Phillips gave written
notice to Sailor by May 1 of each year specifying the requested week, and three days at Christmas
if Phillips provided thirty days’ notice each year of the requested days. The court ordered that Doug
not be present when Phillips had possession of the boys.
Sailor contends by her first issue that the visitation order and the statute authorizing
it, Family Code section 153.433, violate her due process right to autonomy in child-rearing decisions.
Considering a similar argument shortly after Sailor filed her brief, this Court held that neither section
153.433 nor an order requiring grandparent visitation violated the parents’ due-process rights under
the Fourteenth Amendment. Lilley v. Lilley, 43 S.W.3d 703, 710-713 (Tex. App.—Austin 2001, no
pet.). We find no reason to alter our decision regarding the facial constitutionality of the statute. We
2
will examine the constitutionality of the statute as it was applied to Sailor after a review of the
testimony.
By her second issue, Sailor contends that the district court abused its discretion by
ordering visitation with Phillips. The only element of Family Code section 153.433 in dispute is
whether the visitation is in the children’s best interest.1
A trial court has broad discretion in determining the best interest of a child in visitation
decisions. Gillespie v. Gillespie, 644 S.W.2d 449, 451 (Tex.1982); G.K. v. K.A., 936 S.W.2d 70,
72 (Tex. App.—Austin 1996, writ denied); see Dennis v. Smith, 962 S.W.2d 67, 68 (Tex.
App.—Houston [1st Dist.] 1997, pet. denied). We will reverse a trial court’s order only if the trial
court abused its discretion—i.e., acted unreasonably, arbitrarily, or without reference to any guiding
principles. G.K., 936 S.W.2d at 72. There is no abuse of discretion if the decision is supported by
sufficient, competent evidence. Gillespie, 644 S.W.2d at 451; Dennis, 962 S.W.2d at 68. A trial
court does not necessarily abuse its discretion by deciding an issue differently than an appellate court
1
The statute provides as follows:
The court shall order reasonable access to a grandchild by a grandparent if:
(1) at the time the relief is requested, at least one biological or adoptive parent of the
child has not had that parent’s parental rights terminated; and
(2) access is in the best interest of the child, and at least one of the following facts is
present:
....
(E) the grandparent requesting access to the child is the parent of a person whose
parent-child relationship with the child has been terminated by court order . . . .
Tex. Fam. Code Ann. § 153.433 (West Supp. 2001).
3
would. Wright v. Wright, 867 S.W.2d 807, 816 (Tex. App.—El Paso 1993, writ denied). The trial
court, as fact finder, resolves conflicts in the evidence and determines the weight and credibility to
give to witness testimony. Schneider v. Schneider, 5 S.W.3d 925, 931 (Tex. App.—Austin 1999,
no pet.). A fact finder’s decision on conflicts in the evidence is generally conclusive. Id. These
standards apply to orders for grandparent visitation. Lilley, 43 S.W.3d at 705-06. In applying these
principles to grandparent access, the trial court must accord some special weight to the parent’s
determination of what access is reasonable. See Troxel v. Granville, 530 U.S. 57, 70 (2000) (4-2-3
decision, O’Connor, J. writing for the four-member plurality). However, when the parent denies all
grandparent access in circumstances governed by section 153.433, the trial court must determine
what access is reasonable. See Lilley, 43 S.W.3d at 712-713; see also Troxel, 530 U.S. at 71.
Phillips testified that she had a loving relationship with the boys before Sailor severed
contact; the boys were ages ten and twelve in November 1997. Phillips said that, shortly after the
birth of the younger child, she essentially raised the boys for a month or more while their parents
worked in another town. Phillips testified that she thought the boys should know that “the family they
were born into still loves them and still wants to see them.” She said she would offer them love and
knowledge of their father’s family. Phillips testified that their father did not live with her and came
to see her only when he wanted something—every two months or so; she said Doug used her address
as his permanent address because he moved a lot to work in construction. She testified that Doug
had no rights to see the boys and had promised not to interfere with her rights. Phillips testified that,
when her husband was diagnosed with a terminal illness, she contacted Sailor so that the boys could
visit their grandfather before his death. Sailor did not allow the boys to visit him, call him, or attend
his funeral in April 2000. Phillips also testified that she had been a licensed day-care provider for
4
twenty-eight years and was, at time of trial, caring for twelve children. She has a 3000-square-foot
home that she shares with her teenaged granddaughter. She said she was willing to do whatever the
court required to effectuate visitation with her grandsons.
Virginia Lewis, executive director for the Women’s Shelter of East Texas and a retired
director of volunteer services for the Texas Youth Commission, testified that Phillips is a fine,
beloved person. Lewis testified that, when the children were younger and visited Phillips, she
demonstrated concern, compassion, and love for them. Lewis testified that she believed visitation
was in the children’s best interest to perpetuate the bond with Phillips to maintain a sense of
belonging and security. Lewis said the children would benefit by being in contact with this good,
wholesome, caring, loving person.
Paul Guest testified that Phillips was his day-care provider when he was growing up;
he also testified that he was taking his children to her for day care. He said his children had gone to
someone else, but that he decided to take them to Phillips because he trusted her. He testified that
Phillips’s granddaughter was living with her, but Doug was not. He said there was nothing in her
home that would be harmful for the grandchildren during their visit.
Sailor testified that visitation with Phillips would not be in the children’s best interest.
She said she divorced Doug because she did not want her children exposed to Doug’s drug abuse and
consequent problems. She said that, after the divorce, the children had behavioral problems after
visitation with Doug, not because of drug use, but because of different expectations and boundaries;
she said the children would return defiant, back-talking, and lying. Sailor testified that there was no
improvement when the visitation with Phillips continued during Doug’s incarceration because Phillips
had been the primary caregiver during the boys’ visits with Doug. Sailor said she disagreed with
5
Phillips about movies the boys watched when they stayed with her. Sailor said that, after the visits,
the younger child resisted authority at school, spoke of death in the classroom, was aggressive with
other students, and spoke of watching movies with adult themes and violence;2 she said that the
problems stopped when the visits stopped. Sailor said she also did not like that Phillips took the boys
to visit Doug in jail or the rehabilitation center (before termination); she did not know whether the
visits to rehab continued after she expressed her displeasure because “I wasn’t advised and I didn’t
ask.”
Sailor testified that she voluntarily participated in her boys’ visitation with Doug’s
parents until 1997. Sailor testified that she took the boys to see Phillips twice in 1997 in conjunction
with visits to Sailor’s mother’s home. Sailor did not in 1997, as she had done the previous year, take
the boys at Thanksgiving to visit Sailor’s mother and Phillips. Sailor testified that Phillips called
Sailor’s mother asking where the boys were and accused Sailor’s mother of lying when Sailor’s
mother denied that the boys were at her house. When Sailor’s mother told Sailor of Phillips’s
accusation, Sailor deemed Phillips’s accusation to be harassing and told Phillips not to call her or her
mother again. The boys had no contact with Phillips after November 1997. Sailor testified that her
boys’ behavior and grades stabilized in January 1998; this date corresponds with their move to Robert
Lee, the last of four moves in four or five years. She said that, although her younger child’s
behavioral improvements might be due to maturation, she believes that the improvement is due to the
absence of the instability and influences encountered at Phillips’s house. She testified that her boys
2
Sailor listed “Nightmare on Elm Street” and “Speed” as movies she did not approve of her boys
watching while under Phillips’s care; Sailor did not know if Phillips was aware that the boys were
watching these movies.
6
treat her husband as their father and are accepted as his children by his extended family. Sailor
testified that she believed that Doug would have contact with the boys during their visits with Phillips;
she believed that visits with Doug would not be in their best interest because of his persistent
problems with drugs and arrests on other offenses. She felt that renewing visits with Phillips would
not be in the boys’ best interest because it might destabilize their lives.
The boys, ages thirteen and fifteen at time of trial and currently fourteen and sixteen,
did not testify at trial.
We find no abuse of discretion in the district court’s conclusion that visitation with
Phillips is in the best interest of the children. The evidence is that Phillips had a relationship with the
boys for their entire lives until November 1997—a period of more than ten and twelve years,
respectively. There was evidence that she was a caring, loving grandmother. There was evidence
that Phillips was a good person and a trusted child-care provider. Although Sailor feared the boys’
father would contact them during the boys’ visits, Phillips testified unequivocally that her son would
have no contact with the boys. Although Sailor testified that previous visits had disrupted the boys’
behavior, there was evidence that the disturbances might have been due to other factors. Although
there was evidence that, while visiting Phillips, the boys had watched movies Sailor deemed
inappropriate for their age, there was no evidence that Phillips showed the boys the movies, knew in
advance that Sailor disapproved of those movies, or even that Phillips knew the boys were watching
the movies. We cannot say that the district court abused its discretion by deciding that visitation with
Phillips is in the children’s best interest.
Nor do we conclude that the district court’s decision violated Sailor’s constitutional
rights. The Supreme Court plurality in Troxel recognized and reaffirmed the “fundamental right of
7
parents to make decisions concerning the care, custody, and control of their children.” Troxel, 530
U.S. at 66. The Court described this right as a fundamental liberty interest protected from
infringement by the states. See U.S. Const. amend. XIV; Troxel, 530 U.S. at 65. Besides finding the
Washington statute facially unconstitutional for its “sweeping breadth,” the Court concluded that the
application of the statute violated the mother’s constitutional rights by ordering visitation by the
child’s paternal grandparents. Id. at 68-72. The Court disapproved of the trial court’s apparent
presumption that grandparent visitation is always in the children’s best interest and its requirement
that the mother overcome that presumption; the Court held that the trial court must instead accord
“special weight” to the mother’s judgment of her children’s best interest. Id. at 69-70. The Court
also noted that the mother agreed that visitation with the grandparents was in the children’s best
interest, but disagreed with the frequency and duration of visits that the grandparents demanded. Id.
at 71. “While the [grandparents] requested two weekends per month and two full weeks in the
summer, [the mother] asked the Superior Court to order only one day of visitation per month (with
no overnight stay) and participation in the [mother’s] family’s holiday celebrations.” Id. The
Supreme Court held that the trial court’s imposition of a visitation order in these circumstances
infringed on the mother’s right to determine what was in her children’s best interest. Id. at 72-73.
Here, the Family Code defines certain circumstances when grandparent may be ordered if it is in the
children’s best interest.
Sailor’s decision to sever her boys’ contact with Phillips critically distinguishes this
case from Troxel. Rather than offer some visitation as the mother in Troxel did, Sailor prohibited all
contact between the boys and their grandmother for more than two years before Phillips filed this suit.
Sailor blocked a final visit or even telephone contact with the boys’ terminally ill grandfather when
8
they were ages twelve and fourteen. This is not a situation in which the boys did not know their
grandparents; they visited their grandmother and grandfather for the first ten and twelve years of their
lives. Nor is it a situation where there is any indication that the boys were in physical danger at their
grandmother’s home; the only evidence is that they were safe and cared for. Although Sailor and
Phillips apparently have different expectations and boundaries for the boys, there is evidence that
Phillips is a trusted child-care provider, that she genuinely cares for the boys, and that the boys can
benefit from contact with her. We conclude that the district court did not, by determining that the
boys’ best interest was served by letting their grandmother speak with them on the telephone monthly
and host them for ten days annually, impermissibly strip their mother of her constitutional rights.
We affirm the visitation order.
Mack Kidd, Justice
Before Justices Kidd, B. A. Smith and Puryear
Affirmed
Filed: November 8, 2001
Do Not Publish
9
| {
"pile_set_name": "FreeLaw"
} |
L.J. v Jimenez (2019 NY Slip Op 02696)
L.J. v Jimenez
2019 NY Slip Op 02696
Decided on April 10, 2019
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on April 10, 2019
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department
JOHN M. LEVENTHAL, J.P.
COLLEEN D. DUFFY
FRANCESCA E. CONNOLLY
LINDA CHRISTOPHER, JJ.
2018-04590
(Index No. 711994/15)
[*1]L.J., etc., et al., plaintiffs-respondents,
vOlga Jimenez, et al., defendants-respondents, 35-38 Commercial, LLC, appellant, et al., defendants.
Cruser, Mitchell, Novitz, Sanchez, Gaston & Zimet, LLP, Farmingdale, NY (Scott I. Gurtman of counsel), for appellant.
Ginarte Gallardo Gonzalez Winograd LLP, New York, NY (Timothy Norton of counsel), for plaintiffs-respondents.
Law Offices of Brian J. McGovern, LLC, New City, NY, for defendants-respondents.
DECISION & ORDER
In an action to recover damages for personal injuries, etc., the defendant 35-38 Commercial, LLC, appeals from an order of the Supreme Court, Queens County (Janice A. Taylor, J.), entered April 3, 2018. The order denied that defendant's motion for summary judgment dismissing the complaint and all cross claims insofar as asserted against it.
ORDERED that the order is affirmed, with one bill of costs payable to the respondents appearing separately and filing separate briefs.
The infant plaintiff allegedly was struck by a vehicle driven by the defendant Olga Jimenez and owned by the defendant Ilsi Caceres. The accident occurred in a driveway at premises located in Queens. The infant plaintiff and his mother (hereinafter together the plaintiffs) commenced this action against, among others, Jimenez, Caceres, and the defendant 35-38 Commercial, LLC (hereinafter 35-38 Commercial), the alleged owner of the ground floor of the subject premises. Prior to discovery, 35-38 Commercial moved for summary judgment dismissing the complaint and all cross claims insofar as asserted against it. The Supreme Court denied the motion, and 35-38 Commercial appeals.
35-38 Commercial established, prima facie, that its tenant's alleged placement of certain clothing racks adjacent to the driveway where the accident occurred was not a proximate cause of the accident (see Cagliostro v McCarthy, 102 AD3d 823, 824). However, in opposition, the plaintiffs, Jimenez, and Caceres raised a triable issue of fact. Accordingly, we agree with the Supreme Court's denial of 35-38 Commercial's motion for summary judgment dismissing the complaint and all cross claims insofar as asserted against it.
LEVENTHAL, J.P., DUFFY, CONNOLLY and CHRISTOPHER, JJ., concur.
ENTER:
Aprilanne Agostino
Clerk of the Court
| {
"pile_set_name": "FreeLaw"
} |
769 F.2d 314
54 USLW 2102
William L. CAMPBELL, III, Petitioner-Appellant,v.R.C. MARSHALL; the Attorney General of Ohio, Respondents-Appellees.
No. 84-3404.
United States Court of Appeals,Sixth Circuit.
Argued Oct. 12, 1984.Decided and Filed July 23, 1985.
J. Dean Carro, Appellate Review Office, Akron, Ohio, for petitioner-appellant.
William J. Steele (argued), Richard David Drake, Anthony Celebrezze, Columbus, Ohio, for respondents-appellees.
Before ENGEL and WELLFORD, Circuit Judges, and DeMASCIO,* District Judge.
ENGEL, Circuit Judge.
1
The principal issue in this habeas corpus appeal is whether the failure of the state to disclose potentially exculpatory evidence in its possession renders involuntary an otherwise voluntary, counseled plea of guilty. We assume without deciding that under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), the state's conduct here in suppressing information favorable to the petitioner would have violated his Fourteenth Amendment due process rights if he had been convicted after a trial without the benefit of that information. Nonetheless, we conclude that under Tollett v. Henderson, 411 U.S. 258, 93 S.Ct. 1602, 36 L.Ed.2d 235 (1973), and related Supreme Court decisions, the question presented in the instant case is not so much whether the particular conduct complained of violated Brady, but instead, whether under such circumstances petitioner's guilty plea was intelligently and voluntarily made with the advice of competent counsel. Put another way, did the prior withholding of the Brady information so taint the plea-taking as to render the guilty plea involuntary or unintelligent? We hold that petitioner's guilty plea here was valid and that his Fourteenth Amendment right to due process was not violated.
2
The relevant facts in this case are largely undisputed. While there was no trial, the evidence is fully laid out upon the record of the state and federal proceedings in which petitioner first pleaded guilty and then attempted to extricate himself from that plea.
3
On June 3, 1978, appellant William L. Campbell, III, used his key to enter the apartment of his former wife, Sheila Campbell. Campbell had been living in the apartment with Sheila and their children until about two weeks earlier. In his statement to the police, Campbell said that he went to the apartment to remove some of his personal property, including a .22 caliber automatic pistol and approximately 300 rounds of ammunition. He alleges that he was drunk and fell asleep at the kitchen table after placing the gun and ammunition on a divider between the table and the apartment's front door. Sometime after midnight Sheila Campbell, their children, and a male companion entered the apartment. Campbell told the police that he asked the man who he was, and the man replied, "Franket." Campbell further stated that several months earlier a friend had warned him that Ronald Franket had a gun and was "looking for him." Campbell claimed that although he saw no gun, he saw Franket reach into his pocket, and Campbell, therefore, shot Ronald Franket five times. He also shot Sheila Campbell three times. Both died.
4
Campbell turned himself in the following day and was subsequently indicted by a Columbiana County, Ohio grand jury on two counts of aggravated murder with specifications and one count of aggravated burglary. The specifications alleged that Campbell committed each murder as a part of the killing of two or more persons and that each was committed during the course of an aggravated burglary. Under Ohio law, Campbell could have received the death penalty if convicted of aggravated murder and at least one of the specifications. Ohio Rev.Code Secs. 2929.03(B), 2929.04(A)(5), (7). If convicted of aggravated murder but neither of the specifications, Campbell's maximum possible sentence was life imprisonment for each count. Ohio Rev.Code Secs. 2929.02-.03. The aggravated burglary count carried a possible sentence of 4 to 25 years. Ohio Rev.Code Secs. 2911.11, 2929.11.
5
As part of Campbell's plea bargain, the prosecutor moved both to strike the specifications from the aggravated murder portion of the indictment and to enter a nolle prosequi as to the aggravated burglary charge. In return, Campbell entered a plea of guilty to the two aggravated murder counts.
6
Before his plea hearing, Campbell was given a document entitled "Judicial Advice to Defendant." That document contained a discussion of each of the constitutional rights Campbell would waive by pleading guilty, the elements of the crime to which he intended to plead, and the maximum penalties he could receive. Campbell completed a written "Defendant's Response to Court" indicating that he had read and understood the information in the "Judicial Advice to Defendant." In his "Response" he also answered specific questions to establish that his guilty plea was knowing, intelligent, and voluntary. At the plea hearing the state court judge determined that Campbell had read and understood these documents. He also questioned Campbell as to his knowledge of the consequences of his guilty plea and discussed some of the rights Campbell was waiving. The court did not specifically inform Campbell in court that the plea would waive his right to be free from self-incrimination, his right of confrontation, and his right to compulsory process, although a discussion of the waiver of each of these rights was included in the "Judicial Advice to Defendant." When asked by the court why he shot Ronald Franket and Sheila Campbell, Campbell replied, "Because he was with my wife," and "Because she was with him." The court accepted Campbell's guilty plea and sentenced him to two consecutive life sentences.
7
Before Campbell decided to plead guilty, his counsel made a specific written request for discovery from the prosecution. He requested any evidence material to Campbell's guilt or punishment as well as a list of the tangible objects which the prosecution intended to use at trial. Campbell subsequently learned that the police had found a .25 caliber semi-automatic pistol on Franket's body and had taken that gun into their possession. The palm-sized weapon was found in the left, rear, hip pocket of Franket's pants. Although they were aware of the gun's existence and had the gun in their possession, the prosecution did not disclose the gun to Campbell or his counsel.
8
Campbell subsequently challenged his conviction in the Ohio courts and lost those challenges. He then brought a petition for a writ of habeas corpus in the United States District Court for the Northern District of Ohio. The district judge referred Campbell's habeas petition to a magistrate who recommended a denial of the writ. In a written opinion, the district judge adopted the magistrate's report and recommendation and denied Campbell's petition.
9
In his habeas petition and on appeal, Campbell argues that his plea bargain was invalid on two grounds. First, Campbell argues that the prosecution's failure to disclose the existence of Franket's handgun violated his Fourteenth Amendment due process rights as set forth in Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). The lower court held that the suppression of the evidence concerning the gun did not amount to a constitutional violation. Campbell contended that he pleaded guilty only because he had no believable self-defense claim and that he would have gone to a jury with that defense had he known of the gun. The district court rejected this argument, finding that
10
To establish the defense of self-defense, an accused must demonstrate that at the time of the killing he reasonably believed that he was in danger of loss of life or serious bodily harm.... That petitioner later learned that the male victim was carrying a gun would not have any effect on the reasonableness of his belief that his life was in danger at the time of the shooting. Consequently, the suppression of this evidence did not materially prejudice petitioner's ability to assert self-defense.... The prosecution's failure to disclose the existence of the handgun did not amount to a violation of petitioner's constitutional rights.
11
Campbell v. Marshall, No. C 83-3004 Y, slip op. at 3-4 (N.D.Ohio March 26, 1984).
12
Second, Campbell states that because he was not specifically informed by the trial judge in open court that his guilty plea would waive his right to be free from self-incrimination, his right of confrontation, and his right to compulsory process, his Fourteenth Amendment due process rights were violated under the principles expressed by the Supreme Court in Boykin v. Alabama, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969). The district court found that Campbell's constitutional rights as enunciated in Boykin v. Alabama were not violated, relying on the Sixth Circuit's decisions in Roddy v. Black, 516 F.2d 1380 (6th Cir.), cert. denied, 423 U.S. 917, 96 S.Ct. 226, 46 L.Ed.2d 147 (1975), and Fontaine v. United States, 526 F.2d 514 (6th Cir.1975), cert. denied, 424 U.S. 973, 96 S.Ct. 1476, 47 L.Ed.2d 743 (1976).
I.
13
Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 1196, 10 L.Ed.2d 215 (1963), stands for the proposition that "the suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution." Brady v. Maryland concerned the state's suppression of exculpatory evidence until after trial, thereby making that information unavailable to the defense for use at trial. Justice Douglas, the author of Brady v. Maryland, wrote that the Brady ruling was an extension of the Court's previous decision in Mooney v. Holohan, 294 U.S. 103, 55 S.Ct. 340, 79 L.Ed. 791 (1935). In Mooney, the Court had held that the state violated due process when it deliberately deceived the trial court and deprived a defendant of his liberty by presenting testimony it knew was perjured. 294 U.S. at 112, 55 S.Ct. at 341. As Justice Douglas stated in Brady,
14
Society wins not only when the guilty are convicted but when criminal trials are fair; our system of the administration of justice suffers when any accused is treated unfairly. An inscription on the walls of the Department of Justice states the proposition candidly for the federal domain: "The United States wins its point whenever justice is done its citizens in the courts." A prosecution that withholds evidence on demand of an accused which, if made available, would tend to exculpate him or reduce the penalty helps shape a trial that bears heavily on the defendant. That casts the prosecutor in the role of an architect of a proceeding that does not comport with standards of justice, even though, as in the present case, his action is not "the result of guile," to use the words of the [Maryland] Court of Appeals. 226 Md., at 427, 174 A.2d, at 169.
15
Brady v. Maryland, 373 U.S. at 87-88, 83 S.Ct. at 1196-1197 (footnote omitted).
16
We assume for the purposes of this opinion that under Brady v. Maryland if Campbell had gone to trial and been convicted without the suppressed evidence having come to light, a violation of his Fourteenth Amendment due process rights would have been established. Campbell's attorney requested disclosure of both tangible evidence the prosecution intended to introduce at trial and all evidence material to the accused. The government may be able to excuse its failure to disclose the presence of the gun in response to the tangible evidence request on the basis that it did not intend to introduce the pistol at trial. However, in our judgment, it cannot validly justify its failure to disclose that evidence on the basis that it was not material to the accused. The government had to be well aware from Campbell's statements that he claimed to have heard that Franket was carrying a gun and was out to get him, and that he saw Franket reach for his pocket. To the extent that Campbell might have presented a self-defense case to a jury, the presence of the gun in Franket's pocket certainly would have been relevant, at least to Campbell's credibility. That evidence could have corroborated his expressed concern that Franket was armed.
17
In Jones v. Jago, 575 F.2d 1164 (6th Cir.), cert. denied, 439 U.S. 883, 99 S.Ct. 223, 58 L.Ed.2d 196 (1978), (a case which also originated in the Northern District of Ohio) we held that a state prosecutor may not avoid his disclosure obligation under Brady v. Maryland and United States v. Agurs, 427 U.S. 97, 96 S.Ct. 2392, 49 L.Ed.2d 342 (1976), merely by claiming that in his view the suppressed evidence was neutral and not exculpatory. Instead, we decided that where information has been specifically requested by the defense, the subjective evaluation of that information's evidentiary value is not for the prosecutor to make. This is especially true where "the request is timely and specific [and] the prosecutor had to be aware of all of the attendant circumstances and of the [potential] importance of the testimony." Jones v. Jago, 575 F.2d at 1168. In those circumstances the prosecutor should at least submit the disclosure problem to the trial judge for resolution. Id.
18
Here the prosecutor's decision not to disclose can be described, at best, as "cute"; at worst, it is reprehensible. In any case, we need go no further in evaluating the likelihood of success of the defense to conclude that this evidence was very probably material and might have tended to exculpate Campbell. This evidence was also important to Campbell's attorney, both because it was requested and because it certainly could have borne upon the defense counsel's negotiating power in arriving at a plea.
19
The question then becomes whether this non-disclosure renders involuntary Campbell's otherwise voluntary plea, given without knowledge of this evidence.
20
We believe it is fully established by Tollett v. Henderson, 411 U.S. 258, 93 S.Ct. 1602, 36 L.Ed.2d 235 (1973), and the Court's earlier decision in Brady v. United States,1 397 U.S. 742, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970) that "a guilty plea represents a break in the chain of events which has preceded it in the criminal process," Tollett, 411 U.S. at 267, 93 S.Ct. at 1608:
21
When a criminal defendant has solemnly admitted in open court that he is in fact guilty of the offense with which he is charged, he may not thereafter raise independent claims relating to the deprivation of constitutional rights that occurred prior to the entry of the guilty plea. He may only attack the voluntary and intelligent character of the guilty plea by showing that the advice he received from counsel was not within the standards set forth in McMann [v. Richardson, 397 U.S. 759, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1970) ].
22
A guilty plea, voluntarily and intelligently entered, may not be vacated because the defendant [may be able to] show that if counsel had pursued a certain factual inquiry such a pursuit would have uncovered a possible constitutional infirmity in the proceedings.
23
Id.
24
In the so-called Brady Trilogy, Brady v. United States, 397 U.S. 742, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970); McMann v. Richardson, 397 U.S. 759, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1970); and Parker v. North Carolina, 397 U.S. 790, 90 S.Ct. 1458, 25 L.Ed.2d 785 (1970), the Supreme Court held that where a guilty plea is otherwise voluntarily and intelligently made with the advice of competent counsel and where the factual basis for the plea fully establishes guilt, the plea is not rendered involuntary merely because the defendant may have been motivated by a statute or state conduct later found to be unconstitutional. These three decisions, all authored by Justice White, presented variations on a single theme: each concerned a post-conviction attack by a petitioner upon his earlier counseled plea of guilty, a plea he claimed was involuntary because it was induced in part by some impermissible cause amounting to a constitutional violation.
25
In Brady v. United States, 397 U.S. 742, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970), for example, the Supreme Court found the petitioner's guilty plea voluntary even though he claimed the plea had been induced by his fear of receiving the death penalty if he stood trial on kidnapping charges. The Court held the plea was voluntary even though the advice of Brady's counsel that he might be risking the death penalty by going to trial was later shown to have been overly pessimistic. Indeed, in United States v. Jackson, 390 U.S. 570, 88 S.Ct. 1209, 20 L.Ed.2d 138 (1968), the Supreme Court overturned the death penalty statute in question. Yet, Justice White concluded that the unconstitutionality of the death penalty provision did not invalidate Brady's plea:
26
The fact that Brady did not anticipate United States v. Jackson, supra, does not impugn the truth or reliability of his plea. We find no requirement in the Constitution that a defendant must be permitted to disown his solemn admissions in open court that he committed the act with which he is charged simply because it later develops that the State would have had a weaker case than the defendant had thought or that the maximum penalty then assumed applicable has been held inapplicable in subsequent judicial decisions.
27
Brady v. United States, 397 U.S. at 757, 90 S.Ct. at 1473.
28
McMann v. Richardson, 397 U.S. 759, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1970), the second case in the Brady Trilogy, consolidated three appeals from the Second Circuit. In each appeal the respondent asserted that his counseled plea of guilty to a felony under New York law was involuntary because it had been motivated by a prior coerced confession. The respondents contended that if their confessions were found to be involuntary, and hence inadmissible, their pleas must also be set aside. The Second Circuit agreed, ordering evidentiary hearings on the voluntariness of the confessions. As Justice White wrote,
29
It was the Court of Appeals' view that a plea of guilty is an effective waiver of pretrial irregularities only if the plea is voluntary and that a plea is not voluntary if it is the consequence of an involuntary confession. That the petitioner was represented by counsel and denied the existence of coercion or promises when tendering his plea does not foreclose a hearing on his petition for habeas corpus alleging matters outside the state court record.
30
McMann, 397 U.S. at 764-65, 90 S.Ct. at 1445-46. The Supreme Court reversed, finding itself in "substantial disagreement with the Court of Appeals." Id. at 760, 90 S.Ct. at 1443. Speaking for a majority of the Court, Justice White observed:
31
The issue on which we differ with the Court of Appeals arises in those situations involving the counseled defendant who allegedly would put the State to its proof if there was a substantial enough chance of acquittal, who would do so except for a prior confession that might be offered against him, and who because of the confession decides to plead guilty to save himself the expense and agony of a trial and perhaps also to minimize the penalty that might be imposed. After conviction on such a plea, is a defendant entitled to a hearing, and to relief if his factual claims are accepted, when his petition for habeas corpus alleges that his confession was in fact coerced and that it motivated his plea? We think not if he alleges and proves no more than this.
32
Id. at 767-68, 90 S.Ct. at 1446-48.
33
Application of this rule in the three individual appeals consolidated in McMann is particularly illuminating. Respondent Dash, facing first-degree robbery charges carrying a maximum potential sentence of 60 years, pleaded guilty to robbery in the second degree and received an 8 to 12 year sentence. Dash later claimed that he had been "beaten, refused counsel, and threatened with false charges prior to his confession," but that his attorney nonetheless advised him to plead guilty because he "did not 'stand a chance due to the alleged confession signed' by him." Id. at 761-62, 90 S.Ct. at 1443-44.
34
The second respondent, Richardson, was originally indicted for murder in the first degree. He withdrew his initial plea of not guilty upon the advice of the two attorneys assigned to represent him and pleaded guilty to murder in the second degree. During the plea proceeding he admitted that he had struck the victim with a knife. After Richardson was sentenced to a term of 30 years to life, he sought habeas relief, claiming that his guilty plea was induced by a coerced confession. Richardson also claimed
35
that he was beaten into confessing the crime, that his assigned attorney conferred with him only 10 minutes prior to the day the plea of guilty was taken, that he advised his attorney that he did not want to plead guilty to something he did not do, and that his attorney advised him to plead guilty to avoid the electric chair, saying that "this was not the proper time to bring up the confession" and that Richardson "could later explain by a writ of habeas corpus how my confession had been beaten out of me."
36
Id. at 762-63, 90 S.Ct. at 1444-45.
37
The third McMann respondent, Williams, was indicted for five felonies, including rape and robbery. He pleaded guilty to robbery in the second degree and was sentenced to 7 1/2 to 15 years. In his habeas petition, he, too, asserted that his plea was the consequence of a coerced confession and was made without an understanding of the nature of the charge and the consequences of the plea. Williams alleged that while he was being interrogated, he was handcuffed to a desk, threatened with a pistol, and physically abused. He further asserted that "his attorney, in advising him to plead guilty, ignored his alibi defense and represented that his plea would be to a misdemeanor charge rather than to a felony charge." Id. at 763-64, 90 S.Ct. at 1444-45.
38
In each of these individual cases, the Supreme Court did not disturb the Second Circuit's decision to require evidentiary hearings on the other factual disputes as to the alleged involuntariness of the guilty pleas, but the Court nevertheless clearly held that "a defendant who alleges that he pleaded guilty because of a prior coerced confession is not, without more, entitled to a hearing on his petition for habeas corpus." Id. at 771, 90 S.Ct. at 1449.
39
Finally, in Parker v. North Carolina, 397 U.S. 790, 90 S.Ct. 1458, 25 L.Ed.2d 785 (1970), the third decision in the Brady Trilogy, a black youth, who was 15 years old at the time of the alleged offense, had entered a plea of guilty to first degree burglary and received the mandatory sentence of life imprisonment. Under North Carolina law as then on the books, the youth would have risked the death penalty had he gone to trial on the charge. Id. at 792, 90 S.Ct. at 1460. Parker claimed that his guilty plea was the result of a coerced confession.2 In its decision the Court noted that at least a month had passed between the alleged coercive interrogation and Parker's confession, that Parker had the advice of both counsel and parents before his plea, and that he had at the time of the plea-taking disavowed any threats, misrepresentations, promises or improper acts. Id. at 795-96, 90 S.Ct. at 1461-62. The Supreme Court then held that even assuming the confession had been coerced and, therefore, might have been held inadmissible at trial, "the guilty plea was Parker's free and voluntary act, the product of his own choice, just as he affirmed it was when the plea was entered in open court." Id. at 796, 90 S.Ct. at 1462. In addition, the Court found that the apparent miscalculation of Parker's counsel as to the admissibility of Parker's confession did not invalidate the guilty plea. As Justice White wrote,
40
As we understand it, Parker's position necessarily implies that his decision to plead rested on the strength of the case against him: absent the confession, his chances of acquittal were good and he would have chosen to stand trial; but given the confession, the evidence was too strong and it was to his advantage to plead guilty and limit the possible penalty to life imprisonment. On this assumption, had Parker and his counsel thought the confession inadmissible, there would have been a plea of not guilty and a trial to a jury. But counsel apparently deemed the confession admissible and his advice to plead guilty was followed by his client. Parker now considers his confession involuntary and inadmissible. The import of this claim is that he suffered from bad advice and that had he been correctly counseled he would have gone to trial rather than enter a guilty plea. He suggests that he is entitled to plead again, a suggestion that we reject.
41
For the reasons set out in McMann v. Richardson, [397 U.S. at] 759 [90 S.Ct. at 1441], even if Parker's counsel was wrong in his assessment of Parker's confession, it does not follow that his error was sufficient to render the plea unintelligent and entitle Parker to disavow his admission in open court that he committed the offense with which he was charged. Based on the facts of record relating to Parker's confession and guilty plea, which we have previously detailed, we think the advice he received was well within the range of competence required of attorneys representing defendants in criminal cases. Parker's plea of guilty was an intelligent plea not open to attack on the grounds that counsel misjudged the admissibility of Parker's confession.
42
Parker, 397 U.S. at 796-98, 90 S.Ct. at 1462-63 (footnotes omitted).
43
We believe that in Tollett and the Brady Trilogy the Supreme Court did not intend to insulate all misconduct of constitutional proportions from judicial scrutiny solely because that misconduct was followed by a plea which otherwise passes constitutional muster as knowing and intelligent. However, we believe those authorities provide a fully adequate basis for affirming the district court's denial of habeas relief here.
44
First, as in those cases, the plea-taking here included the establishment of a factual basis for Campbell's plea and complied with Boykin v. Alabama, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969) (as discussed post). The record of the plea-taking in this case is as fully convincing in showing the plea's voluntary and intelligent nature as the accounts of the pleas reported in the cited Supreme Court decisions. We believe that the belated discovery of the information concerning Franket's gun does not in any way detract from the credible factual basis for Campbell's plea admitted in his own statements at the plea proceeding. Those statements fully established his factual guilt: according to Campbell, he shot and killed Franket "Because he was with [his] wife," and he shot and killed his former wife "Because she was with him." As in Tollett and Brady v. United States, these admissions of factual guilt in open court are entitled to great weight.
45
Moreover, we perceive in the state's misconduct here no likelihood of greater prejudice to the defendant's ability to plead knowingly and voluntarily than any prejudice brought about by the misconduct that was the subject of the Brady Trilogy. While the prosecution's non-disclosure of the pistol was certainly objectionable, it was no more reprehensible than the beatings alleged in McMann, for example.
46
In addition, as in Tollett and the Brady Trilogy, Campbell's plea was made with the advice of competent counsel. Indeed, the record shows that the conduct and advice of Campbell's defense counsel was even less blameworthy than that of counsel in Parker and McMann. There the attorneys' advice that the coercive confessions might be used against their clients and that this use would guarantee certain convictions was very possibly incorrect. The record does not show that Campbell's counsel was guilty of any such probable misadvice.
47
Finally, the certainty of a constitutional violation is much less clearly established here than in the Brady Trilogy. We first note that there is no authority within our knowledge holding that suppression of Brady material prior to trial amounts to a deprivation of due process. Here error is claimed in non-disclosure of the evidence concerning the pistol before trial. Moreover, it is unclear what prejudicial effect this non-disclosure would have had at a trial; that is, even if this evidence had been disclosed and introduced at a trial, the weight a jury would have given it is subject to some question. Construed in the light most favorable to Campbell, disclosure of the fact of the gun's presence in Franket's pocket when he was killed could have added some credibility to Campbell's statement that he had heard and believed that Franket was armed and out to get him. Yet, we must remember that Campbell had armed himself and that he remained in his former wife's apartment long after any need to do so had passed. It has also been established that Campbell did not in fact see Franket's weapon and that he put three bullets into his former wife, against whom, he concedes, no self-defense claim could be asserted. His conduct, therefore, strongly negated any self-defense theory and strongly supported the inference that he remained on the premises specifically to carry out a preconceived design to kill. Thus, while we have assumed the existence of a Brady violation for the purposes of this opinion, it is uncertain whether Campbell could have shown the prejudice necessary to prove such a violation.
48
Our decision is also supported by the only reported federal court of appeals case which is directly on point and discusses the relevant issues.3 In Fambo v. Smith, 433 F.Supp. 590 (W.D.N.Y.), aff'd, 565 F.2d 233 (2d Cir.1977), Fambo petitioned for a writ of habeas corpus, claiming that his state court conviction was unconstitutional because the prosecution had not disclosed exculpatory facts before the court accepted his guilty plea. The indictment had charged Fambo with two violations of N.Y.Penal Law Sec. 265.04, a class B felony prohibiting possession of an explosive substance with the intent to use it against another person or that person's property. The indictment alleged that Fambo had possessed a tube of dynamite on or about November 29, 1970 and December 1, 1970. Fambo pleaded guilty to one count of a violation of N.Y.Penal Law Sec. 265.02(2), a class D felony concerning possession of an explosive or incendiary device. 433 F.Supp. at 591.
49
At a subsequent, unrelated trial, Fambo learned that a deputy sheriff had made the tube of dynamite in question harmless on November 29, 1970, by removing the tube's explosive contents and repacking it with sawdust. The tube was then returned to where it had been hidden. Therefore, on December 1, 1970, when Fambo apparently retrieved the tube from its hiding place, he was not in possession of an explosive substance even though he believed he was. The prosecution did not inform Fambo or his counsel that the tube contained only sawdust on December 1. Fambo argued that without knowledge of this exculpatory evidence, his guilty plea was not voluntary, intelligent, and knowing. Id. at 592.
50
It is interesting to note that in Fambo, the defendant may not have been technically guilty of the particular charge to which he pleaded as a part of his plea bargain. The district court observed that Fambo could not have been convicted of possession of dynamite on December 1 because the police had previously removed the explosive from the tube in question. Nevertheless, the court observed that under all accounts, Fambo was guilty of possession on November 29 before the dynamite was removed. Id. at 599. Further, according to the district court, he could still have been convicted of attempting to possess an explosive on December 1; under New York law proof of that offense would constitute a class C felony. Id.
51
After a lengthy discussion of plea bargaining practices, the trial judge in Fambo finally concluded that
52
The record before me indicates that there was thus sufficient mutuality of advantage to support this bargain as being reasonable and fair, after the fact, even though the Assistant District Attorney's failure to disclose potentially exculpatory evidence was an omission of constitutional proportions and is subject to censure as a bargaining tactic. In retrospect, petitioner's decision to plead guilty to a D felony, with assurances that a maximum term of five years' imprisonment would be imposed, was still a voluntary and intelligent, if not properly informed, choice among the alternative courses of action open to him at the time the plea was entered. See North Carolina v. Alford, supra, 400 U.S. at 31, 91 S.Ct. 160 [at 164, 27 L.Ed.2d 162 (1970) ].
53
433 F.Supp. at 600.
54
The Second Circuit affirmed in a brief per curiam opinion. Fambo v. Smith, 565 F.2d 233 (2d Cir.1977). Noting that the indictment and dates therein were couched in "on or about" language, the court concluded that the difference in the two dates in the two counts alleged in the indictment would not have been a fatal imperfection in the proof at the trial; the court found that the imperfection "could not possibly have made any difference in the treatment of the defendant." Id. at 235. As to the misconduct of the government in failing to apprise Fambo or his attorney of the substitution of the sawdust, the Second Circuit concluded:
55
While we agree with Judge Curtin's conclusion that it was reprehensible for the district attorney not to disclose the substitution of sawdust for dynamite, we cannot see, in view of Fambo's undisputed possession [of] dynamite a mere two days prior to the "on or about" date specified in the indictment, how any dereliction of duty on the part of the local law enforcement officers could possibly have so prejudiced the petitioner as to render his conviction unconstitutional.
56
Id.
57
We find ourselves examining the government's misconduct here in the manner of the Supreme Court in the Brady Trilogy and Tollett and the Second Circuit in Fambo. While each of those cases certainly contained instances of state conduct which was at least reprehensible, if not clearly unconstitutional, each court still evaluated the validity of the challenged plea in light of all the attendant circumstances. Here, as in those cases, the record shows the assistance of counsel, a plea-taking procedure compliant with Boykin v. Alabama, and a factual basis for the plea. These circumstances must go a long way toward protecting the plea-taking event from later collateral attack.
58
Finally, it is clear that the undisclosed information's greatest value to Campbell and his counsel was as an aid in their evaluation of the possibilities of success on trial and that the suppressed information was unavailable for that purpose. Yet, a plea decision is not made with any perfect knowledge of the results were a trial to be held. Both Campbell and his attorney had to know that if they had proceeded to trial, any number of events might have intervened to affect the final outcome. Favorable or unfavorable rulings on the evidence might have been rendered; witnesses favorable to the defense or to the prosecution may have died awaiting trial or have become otherwise unavailable. New witnesses might have come forward; known witnesses might have recanted. The evidence of the prosecution may have taken entirely unpredicted turns to the favor or prejudice of the government's case. These are trial's unknown risks and dangers which the plea bargaining process seeks to remove. By entering the plea Campbell was foregoing the possibility that any such events would have resulted in a not guilty verdict. Certainly the knowledge of the gun's presence was important to Campbell and his attorney, but we cannot say it would have been controlling in the decision whether to plead. Especially given Campbell's own statements at the time of the plea, the constitutional wrong, if such it was, did not compromise either the truth or the voluntary and knowing nature of the plea.
59
We hold that Campbell's Fourteenth Amendment due process rights were not violated.
II.
60
Campbell's claim that Boykin v. Alabama, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969), was violated by the plea-taking procedure involved here is without merit.
61
Contrary to the assertion of appellant, the plea-taking procedures employed fully complied with the requirements of Boykin v. Alabama, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969), as interpreted by our decisions in Roddy v. Black, 516 F.2d 1380 (6th Cir.), cert. denied, 423 U.S. 917, 96 S.Ct. 226, 46 L.Ed.2d 147 (1975), and Fontaine v. United States, 526 F.2d 514 (6th Cir.), cert. denied, 424 U.S. 973, 96 S.Ct. 1476, 47 L.Ed.2d 743 (1976). We decline the petitioner's invitation to reexamine those decisions, and in words of Armstrong v. Egeler, 563 F.2d 796 (6th Cir.1977), we "are unwilling to hold, as a constitutional requirement applicable in habeas cases to state prosecutions, that a guilty plea requires any precise litany for its accomplishment." Id. at 799 (footnote omitted).
62
AFFIRMED.
*
Honorable Robert E. DeMascio, United States District Judge for the Eastern District of Michigan, sitting by designation
1
Brady v. United States should not be confused with Brady v. Maryland, discussed earlier
2
Parker further claimed that blacks were unconstitutionally excluded from the grand jury which indicted him. However, the Court did not reach that issue because it was not preserved by timely objection under the state's rules of practice. Those rules, thus, provided an adequate and independent state ground precluding habeas review. Parker, 397 U.S. at 798-99, 90 S.Ct. at 1462-63
3
A district court case, United States v. Wolczik, 480 F.Supp. 1205 (W.D.Pa.1979), is not directly on point because it is not a habeas corpus case. However, the issues there are closely related and the opinion is well-reasoned. A third case is clearly on point but does not discuss the relevant issues. In Clements v. Coiner, 299 F.Supp. 752 (S.D.W.Va.1969), a district court granted a habeas corpus petition filed by a state prisoner who had pleaded guilty to murder. The court found that the defendant's constitutional rights had been violated under the doctrine of Brady v. Maryland because two documents suggesting defendant's impaired mental capacity were not disclosed to defendant's counsel before he pleaded. The Clements opinion pre-dates the Supreme Court cases dealing with guilty pleas and waiver and contains no discussion of the propriety of applying Brady v. Maryland in a guilty plea context
| {
"pile_set_name": "FreeLaw"
} |
NO. 12-04-00246-CR
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
JAMES E. BUTLER, § APPEAL FROM THE 114TH
APPELLANT
V. § JUDICIAL DISTRICT COURT OF
THE STATE OF TEXAS,
APPELLEE § SMITH COUNTY, TEXAS
MEMORANDUM OPINION
PER CURIAM
Appellant pleaded guilty to the offense of aggravated assault. The trial court assessed
punishment at imprisonment for ten years and a five thousand dollar fine. We have received the trial
court’s certification showing that Appellant waived his right to appeal. See Tex. R. App. P.
25.2(c)(3)(B). Accordingly, the appeal is dismissed for want of jurisdiction.
Opinion delivered August 25, 2004.
Panel consisted of Worthen, C.J., Griffith, J., and DeVasto, J.
(DO NOT PUBLISH)
| {
"pile_set_name": "FreeLaw"
} |
983 F.2d 253
299 U.S.App.D.C. 228
James CAMERON, Appellant,v.Richard THORNBURGH, Attorney General, et al.
No. 91-5055.
United States Court of Appeals,District of Columbia Circuit.
Argued Sept. 24, 1992.Decided Jan. 22, 1993.
[299 U.S.App.D.C. 229] Appeal from the United States District Court for the District of Columbia (89cv1404).
Wendy L. Trugman, with whom Brian Hufford was on the brief, for appellant.
Richard N. Reback, Asst. U.S. Atty., with whom Jay B. Stephens, U.S. Atty., John D. Bates and R. Craig Lawrence, Asst. U.S. Attys., were on the brief, for appellees.
Before: WALD, SILBERMAN, and RANDOLPH, Circuit Judges.
Opinion for the Court filed by Circuit Judge SILBERMAN.
SILBERMAN, Circuit Judge:
1
James Cameron appeals from the dismissal, on qualified immunity grounds, of his Bivens action against federal prison officials. While he was an inmate at the United States Penitentiary in Terre Haute, Indiana, Cameron filed a complaint in the United States District Court for the District of Columbia claiming that the warden at Terre Haute and other federal officials, including then Attorney General Richard Thornburgh, had violated his Eighth Amendment rights by failing to provide him the low-sodium diet that had been prescribed as treatment for his heart disease. Applying the test outlined in Harlow v. Fitzgerald, 457 U.S. 800, 815-19, 102 S.Ct. 2727, 2736-39, 73 L.Ed.2d 396 (1982), the district court determined that a right under the Eighth Amendment to a medically prescribed diet was not clearly established and that the defendants therefore had qualified immunity from suit. We do not address the qualified immunity question because we dispose of the case on analytically antecedent grounds. We hold that venue was improper in the District of Columbia and that, as to appellees Thornburgh and Quinlan, Cameron did not state a claim. We affirm the dismissal in part and transfer the remainder of the case to the Southern District of Indiana.
I.
2
In 1988, James Cameron was an inmate at the United States Penitentiary in Terre Haute, Indiana (Terre Haute). In October of that year, Cameron, who had a history of heart disease, suffered a massive heart attack that required his hospitalization and permanently damaged his heart. On December 23, 1988, shortly after Cameron returned to Terre Haute from the hospital, the prison physician, Dr. Paul Rauwolf, sent a memorandum to a prison official requesting that Cameron be reassigned to the federal penitentiary at Leavenworth "since his severe cardiac disease requires a low-salt diet and this is not available in this institution."1 Dr. Rauwolf, only five days [299 U.S.App.D.C. 230] later, sent another memorandum, again urging that Cameron be transferred because Terre Haute could not provide him a low-salt diet. Although the warden at Terre Haute did request a transfer, the Regional Director of the Bureau of Prisons denied the request and recommended instead that Cameron be given counseling on self-selecting a low-sodium diet. Cameron subsequently did receive such counseling from a dietician at Terre Haute.
3
On March 21, 1989, Dr. Rauwolf upped the ante by ordering that Cameron be put on a one gram low-sodium diet. Because that diet was not available at Terre Haute, the Health Service Unit sent a memorandum to Cameron's prison unit manager saying that Cameron would have to be transferred to receive the diet Dr. Rauwolf required.
4
After Cameron made several administrative requests for a transfer, he filed a pro se complaint on May 17, 1989 in the United States District Court for the District of Columbia. Cameron claimed that prison officials were violating his Eighth Amendment rights, as declared in Estelle v. Gamble, 429 U.S. 97, 103-06, 97 S.Ct. 285, 290-92, 50 L.Ed.2d 251 (1976), by refusing to provide him with a medically prescribed low-sodium diet. He named as defendants the new warden of Terre Haute, Thomas Kindt; the Director of the North Central Regional Office of the Bureau of Prisons, Larry Dubois; the Director of the Federal Bureau of Prisons, J. Michael Quinlan; and the Attorney General of the United States, Richard Thornburgh. Construed liberally, Cameron's complaint included an action against the defendants in their official capacities for injunctive relief, a Bivens action against the defendants in their individual capacities for damages, see Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), and an action for damages against the appellees in their official capacities.
5
On June 10, 1989, officials at Terre Haute transferred appellant to the United States Medical Center for Federal Prisoners in Springfield, Missouri. There he received a complete examination by several physicians, including a cardiologist. The physicians at Springfield determined that Cameron should be returned to Terre Haute, although there is some dispute concerning whether they actually determined that he would be able to self-select an appropriate diet there.
6
In August 1989 appellees moved to dismiss Cameron's complaint on the grounds that venue was improper in the District of Columbia, that the court lacked personal jurisdiction over all appellees except Attorney General Thornburgh, that appellant had failed to state a claim, and that appellees were entitled to qualified immunity. These motions were pending for over a year. In December 1990, without conceding that Cameron was unable to self-select an appropriate diet at Terre Haute, prison officials decided to transfer Cameron to the penitentiary at Leavenworth where a special three gram low-sodium diet could be provided. Appellant thereupon moved to stay the trial date and to stay any decision on the motion to dismiss to allow him to move for leave to amend his complaint to add new defendants.
7
The district court denied appellant's motions to stay and dismissed the complaint on January 9, 1991. The court dismissed as moot Cameron's claim for injunctive relief because the Bureau of Prisons had already determined to transfer Cameron to Leavenworth. Cameron v. Thornburgh, No. 89-1404, Mem.Op. at 3 (D.D.C. Jan. 9, 1991). To the extent that the pro se complaint stated claims for money damages against appellees in their official capacities, the court dismissed the claims for lack of jurisdiction because Cameron had not exhausted his remedies under the Federal Tort Claims Act, 28 U.S.C. § 1346(b), §§ 2671-2680 (1988). Deciding that Cameron had had ample time to amend his complaint in the 10 months since he had obtained counsel, the court denied Cameron's motion to stay to allow him to amend his complaint. Finally, the court concluded that appellees were entitled to qualified immunity and dismissed Cameron's claim against them in their individual capacities. Applying the analysis outlined in Harlow v. [299 U.S.App.D.C. 231] Fitzgerald, 457 U.S. 800, 815-19, 102 S.Ct. 2727, 2736-39, 73 L.Ed.2d 396 (1982), the district judge determined that the right to a medically prescribed diet was not clearly established and thus that appellees were protected by qualified immunity.
8
Cameron asserts that the district court erred in determining that the appellees were protected by qualified immunity. The right of a prisoner under the Eighth Amendment to be provided a medically prescribed diet, he contends, was clearly established in 1989. Cameron also claims that the district court abused its discretion by denying his motion to stay to allow him to amend his complaint and add new defendants. Appellees, of course, defend the district court's conclusion, but they also renew their claims of improper venue and lack of personal jurisdiction and argue that the district court's decision to dismiss could and should be affirmed on those alternate grounds.
II.
9
Courts in this circuit must examine challenges to personal jurisdiction and venue carefully to guard against the danger that a plaintiff might manufacture venue in the District of Columbia. By naming high government officials as defendants, a plaintiff could bring a suit here that properly should be pursued elsewhere. As our recitation of the facts above should make clear, this was an unusual case to bring in the District of Columbia. As far as it appears from the appellant's original complaint and his brief on appeal, all acts and omissions related to his complaint occurred in Indiana or at the prison medical center in Springfield, Missouri. Similarly, the two appellees most directly connected to Cameron's case, Kindt and Dubois, were in Indiana and Kansas, respectively. Only the inclusion of appellees Quinlan and Thornburgh gives this case any connection to the District of Columbia at all.
10
Although the district court did address appellees' challenges to venue and personal jurisdiction before proceeding to the question of qualified immunity, we think the court erred in finding venue proper in the District of Columbia. Focusing on appellant's claim for an injunction, the court concluded that venue was proper under 28 U.S.C. § 1391(e) and that the court had personal jurisdiction under the nationwide service of process provision of the same section and "case law interpreting the statute to provide for personal jurisdiction over suits for injunctive relief against defendants in their official capacities." Mem. Op. at 3. See Briggs v. Goodwin, 569 F.2d 1, 7-10 (D.C.Cir.1977), rev'd on other grounds sub nom. Stafford v. Briggs, 444 U.S. 527, 100 S.Ct. 774, 63 L.Ed.2d 1 (1980); see also Driver v. Helms, 577 F.2d 147, 155 (1st Cir.1978), rev'd on other grounds sub nom. Stafford v. Briggs, 444 U.S. 527, 100 S.Ct. 774, 63 L.Ed.2d 1 (1980).2 Under the Supreme Court's holding in Stafford v. Briggs, 444 U.S. 527, 100 S.Ct. 774, 63 L.Ed.2d 1 (1980), however, § 1391(e) applies only to suits against government officers in their official capacities, not to Bivens actions. See id. at 542-43, 100 S.Ct. at 783-84. The Stafford Court determined that in enacting the section, Congress intended primarily to allow plaintiffs to bring actions against government officers for injunctions in districts other than the District for the District of Columbia. The statute made it easier for plaintiffs to sue the federal government locally without having to go to Washington; it was not intended to make a government officer subject to suit in his individual capacity "in any one of the 95 federal districts covering the 50 states and other areas within federal jurisdiction." Id. at 544, 100 S.Ct. at 784. Although the district court did not explicitly acknowledge it, by analyzing venue and personal jurisdiction only for the action for an injunction, the court was essentially assuming that it could rely on the concepts of pendent venue, [299 U.S.App.D.C. 232] see Beattie v. United States, 756 F.2d 91, 101-02 (D.C.Cir.1984); Laffey v. Northwest Airlines, Inc., 321 F.Supp. 1041, 1042 (D.D.C.1971), and pendent personal jurisdiction, see Oetiker v. Jurid Werke G.m.b.H., 556 F.2d 1, 4-5 (D.C.Cir.1977); see also Robinson v. Penn Cent. Co., 484 F.2d 553, 554-56 (3d Cir.1973), to hear the action for damages against appellees in their individual capacities.
11
But as the district court found, Cameron's impending transfer to Leavenworth made the claim for an injunction moot. And without the claim for injunctive relief, venue was improper in the District of Columbia.3 Pendent venue could hardly be used to allow the Bivens action to hang from a cause of action that had become moot, and appellant could not fit his claim under the general venue provisions for federal question cases set out in 28 U.S.C. § 1391(b). Appellant's contention that his suit meets § 1391(b)'s requirement that the complaint be brought in a district "in which a substantial part of the events or omissions giving rise to the claim occurred," id. § 1391(b)(2), depends on a wholly unsubstantiated assumption that policy decisions made in Washington ultimately affected Cameron's treatment at Terre Haute. Appellant's complaint did not allege a single rule or policy emanating from Washington that had affected his case. It seems abundantly clear that the "events and omissions" relevant to this case took place predominantly at Terre Haute, and that the proper venue for this case under § 1391(b) was the Southern District of Indiana where the prison is located. The reasoning we have outlined essentially tracks the decision of the court in Pollack v. Meese, 737 F.Supp. 663 (D.D.C.1990). There the district court faced a quite similar sequence of events that mooted another federal prisoner's claim for injunctive relief. The Pollack court simply applied the general venue provision, § 1391(b), to the plaintiff's Bivens action considered alone, determined that venue was improper, and, after noting that § 1391(e) did not apply to a Bivens action, transferred the case under 28 U.S.C. § 1406. A similar transfer was appropriate in this case--at least with respect to two of the appellees.
12
We think it is in the interest of justice to transfer the claims against appellees Kindt and DuBois to a district where venue is proper. See 28 U.S.C. § 1406 (1988). We need not remand to the district court for it to enter the order to transfer, see Cox Enters., Inc. v. Holt, 691 F.2d 989, 990 (11th Cir.1982); Dr. John T. MacDonald Found., Inc. v. Califano, 571 F.2d 328, 332 (5th Cir.) (en banc), cert. denied, 439 U.S. 893, 99 S.Ct. 250, 58 L.Ed.2d 238 (1978), and we may transfer the case even though it is likely that we do not have personal jurisdiction over appellees Kindt and DuBois, see Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466, 82 S.Ct. 913, 915, 8 L.Ed.2d 39 (1962).
13
We dismiss appellant's complaint against appellees Thornburgh and Quinlan,4 however, for failure to state a claim.5 [299 U.S.App.D.C. 233] The district court did not even need to apply the heightened pleading standard we require in Bivens actions, see, e.g., Hunter v. District of Columbia, 943 F.2d 69 (D.C.Cir.1991), to see that Cameron provided no factual allegations whatsoever to support his claim against these appellees. The complaint itself did not even allege that Thornburgh and Quinlan had participated in any decision or approved any policy that related to the case. As we have noted, the claims against Thornburgh and Quinlan seem to have been based essentially on the bare assumption that policy decisions made in Washington might have affected Cameron's treatment in Terre Haute. In the absence of any allegations specifying the involvement of Thornburgh or Quinlan in this case, the claims against them are based on nothing more than a theory of respondeat superior, which of course cannot be used in a Bivens action. See Monell v. Department of Soc. Servs., 436 U.S. 658, 691, 98 S.Ct. 2018, 2036, 56 L.Ed.2d 611 (1978). Because we conclude that appellant has not even stated a claim against appellees Thornburgh and Quinlan, we affirm the district court's dismissal of the Bivens action against these appellees on that ground, and we do not reach the question whether the constitutional right asserted by Cameron was clearly established.
14
We turn then to the district court's refusal to stay decision on the motions to dismiss. Because we transfer the case against two appellees, the denial of stay is now relevant only to the extent that an opportunity to amend the complaint might have enabled Cameron to avoid dismissal of his claim against appellees Thornburgh and Quinlan. The trial court did not abuse its discretion in denying the motion for a stay. We think the court reasonably concluded that appellant had delayed too long before requesting the stay to amend, see Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962) (stating that "undue delay" can justify denying a motion to amend a complaint), particularly in light of the purposes of qualified immunity "expeditiously to weed out" insubstantial Bivens claims, Siegert v. Gilley, --- U.S. ----, ----, 111 S.Ct. 1789, 1793, 114 L.Ed.2d 277 (1991), and to protect public officials from the burdens of litigation, Mitchell v. Forsyth, 472 U.S. 511, 527, 105 S.Ct. 2806, 2816, 86 L.Ed.2d 411 (1985). Appellant did not file the motion to stay until 15 months after the motions to dismiss had been filed and 10 months after he had obtained representation by counsel.
15
* * * * * *
16
For the reasons stated above, we vacate the judgment of the district court dismissing appellant's claim for damages against appellees Kindt and DuBois and transfer the case to the Southern District of Indiana.
17
It is so ordered.
1
Terre Haute's cafeteria had provided a special low-salt diet until 1983 when the special diet line was discontinued
2
Section 1391(e) makes venue proper for a suit against government officials in any district in which one defendant resides. Because Attorney General Thornburgh lived in the District of Columbia, the court correctly concluded that venue would have been proper in this district for the injunctive claim
3
We focus primarily on the venue question because it provides an easier resolution of the case. Although the Supreme Court did note in Leroy v. Great Western United Corp., 443 U.S. 173, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979), that questions of personal jurisdiction should generally be decided before questions of venue, see id. at 180, 99 S.Ct. at 2714, the Court went on to say that in some circumstances, if a "sound prudential justification" appeared for doing so, a court could reject a case for improper venue without deciding the question of personal jurisdiction, see id
4
Although the district court in Pollack v. Meese, 737 F.Supp. 663 (D.D.C.1990), determined that under the laws of the District of Columbia it did not have personal jurisdiction over Michael Quinlan, see id. at 665, we conclude that D.C. CODE ANNOTATED § 13-422, which provides for general personal jurisdiction over any person who "maintain[s] his or its principal place of business" in the District, D.C. CODE ANN. § 13-422 (Michie 1989), does give this court personal jurisdiction over Quinlan, whose office was located in the District
5
The Second Circuit has suggested in dicta that a court should not consider a motion to dismiss for failure to state a claim if venue is improper for the cause of action. See Arrowsmith v. United Press Int'l, 320 F.2d 219, 221 (2d Cir.1963) (en banc) (Friendly, J.); cf. Madara v. Hall, 916 F.2d 1510, 1513-14 (11th Cir.1990). In the context of this Bivens action, however, we think it more in keeping with the policy declared by the Supreme Court in Harlow v. Fitzgerald, 457 U.S. 800, 814-16, 102 S.Ct. 2727, 2735-37, 73 L.Ed.2d 396 (1982) (that insubstantial claims should not proceed to trial) to dismiss the action against Thornburgh and Quinlan. Although we normally would be inclined to transfer the entire case, we see no need to follow that path when briefing and argument in this court have convinced us that appellant has stated no claim against Thornburgh and Quinlan. We would frustrate the Supreme Court's intentions in developing the whole doctrine of qualified immunity (which is intended to enable lower courts "expeditiously to weed out" insubstantial Bivens actions, Siegert v. Gilley, --- U.S. ----, ----, 111 S.Ct. 1789, 1793, 114 L.Ed.2d 277 (1991)) were we to transfer these frivolous claims. Moreover, § 1406 directs us to transfer a case to another district only if we determine it will be in the interests of justice to do so. We think it plainly is not in the interests of justice to further prolong the exposure of Quinlan and Attorney General Thornburgh to personal liability in this litigation
| {
"pile_set_name": "FreeLaw"
} |
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
MELVIN BO NEWMAN,
Petitioner-Appellant,
v.
ROBERT H. MAUNEY, Warden;
No. 95-7579
T. TRAVIS MEDLOCK, Attorney
General of the State of South
Carolina,
Respondents-Appellees.
Appeal from the United States District Court
for the District of South Carolina, at Rock Hill.
Matthew J. Perry, Jr., Senior District Judge.
(CA-94-2230-0-OBD)
Submitted: February 27, 1996
Decided: April 3, 1996
Before WILKINS and MICHAEL, Circuit Judges, and PHILLIPS,
Senior Circuit Judge.
_________________________________________________________________
Dismissed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Melvin Bo Newman, Appellant Pro Se. Donald John Zelenka, Chief
Deputy Attorney General, Columbia, South Carolina, for Appellees.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Appellant seeks to appeal the district court's order denying relief
on his 28 U.S.C. § 2254 (1988) petition. Appellant raised five claims
in his petition: (1) his guilty plea was neither knowing nor voluntary
because he was under the influence of narcotics; (2) his attorney was
ineffective because (a) his attorney knew Appellant was under the
influence of drugs and therefore unable to understand either the
charges or his plea; (b) his attorney failed to investigate a possible
Fourth Amendment violation; (3) the sentencing judge did not inform
him that he could be required to make restitution; (4) the sentencing
judge never stated that he accepted Appellant's guilty plea; and (5)
the search of a locked bag in Appellant's car violation his Fourth
Amendment rights.
After reviewing of the district court's opinion accepting the recom-
mendation of the magistrate judge and finding no reversible error, we
deny a certificate of probable cause to appeal and dismiss the appeal
on the reasoning of the district court as to claims (1), (2)(a), (4), and
(5). Newman v. Mauney, No. CA-94-2230-0-OBD (D.S.C. Sept. 12,
1995).
Addressing Appellant's remaining claims, we find that he has not
established ineffective assistance of counsel for failure to investigate
the possible Fourth Amendment violation. At Appellant's post-
conviction relief hearing before the state court, the state court found
that Appellant's attorney did in fact investigate this possible violation,
but determined that it would not provide a viable defense. Because
Appellant has not demonstrated one of the eight factors enumerated
in 28 U.S.C. § 2254(d), we presume this finding to be correct. Fur-
ther, neither Appellant nor his post-conviction relief attorney demon-
strated that a Fourth Amendment violation ever occurred. Given these
facts, we find that Appellant has not met his burden of showing that
2
his attorney's performance fell below the objective standard of rea-
sonableness, causing him to make a plea he would otherwise forgo.
See Hill v. Lockhart, 474 U.S. 52, 57-59 (1985) (providing ineffective
assistance of counsel test for guilty pleas).
Addressing Appellant's remaining claim--that the sentencing
judge failed to inform him that he might be subject to an order of
restitution--we find that Appellant did not present this issue to the
state court in his post-conviction relief application. Were he to present
it now, it would be barred by § 17-27-90 of the South Carolina Code.
Land v. State, 274 S.C. 243, 246, 262 S.E.2d 735, 737 (1980). Since
Appellant has shown no cause for lifting this bar, we dismiss this
claim. Accordingly, we deny a certificate of probable cause to appeal
and dismiss the appeal. We dispense with oral argument because the
facts and legal contentions are adequately presented in the materials
before the court and argument would not aid the decisional process.
DISMISSED
3
| {
"pile_set_name": "FreeLaw"
} |
132 S.W.3d 770 (2003)
BOARD OF TRUSTEES OF THE JUDICIAL FORM RETIREMENT SYSTEM, Appellant,
v.
ATTORNEY GENERAL OF THE COMMONWEALTH OF KENTUCKY, Appellee. and
Board Of Trustees Of The Kentucky Retirement System, Appellant,
v.
Attorney General Of The Commonwealth Of Kentucky, Appellee.
No. 2002-SC-0699-DG, 2002-SC-0700-DG.
Supreme Court of Kentucky.
October 23, 2003.
Rehearing Denied May 20, 2004.
*771 James T. Gilbert, Coy, Gilbert & Gilbert, Richmond, Counsel for Appellant Board of Trustees of the Judicial Form Retirement System (2002-SC-0699-DG).
William P. Hanes, J. Eric Wampler, James Dodrill, Kentucky Retirement Systems, Perimeter Park West, Frankfort, Counsel for Appellant Board of Trustees of *772 the Kentucky Retirement System (2002-SC-0700-DG).
A.B. Chandler, III, Atty. Gen., State Capitol, D. Brent Irvin, Asst. Atty. Gen., Civil & Environmental Law Division, Office of the Attorney General, Jennifer L. Carrico, Asst. Atty. Gen., Criminal Appellate Division, Office of the Attorney General, Frankfort, Counsel for Appellee Attorney General of the Commonwealth of Kentucky (2002-SC-0699-DG and 2002-SC-0700-DG).
COOPER, Justice.
This appeal involves the validity of House Bill (HB) 389(4) which amended a provision of the Judicial Retirement Act, KRS 21.450(3). It presents three questions: (1) whether the amendment fails because of the legislature's failure to obtain an actuarial analysis to accompany the amendment in accordance with KRS 6.350; (2) whether the amendment is unintelligible and thus void for vagueness; and (3) whether by virtue of its vagueness, the amendment constitutes an unconstitutional delegation of legislative power to the executive branch. While not in violation of KRS 6.350, the amendment's vagueness is fatal under the latter two questions.
As amended, KRS 21.450 now reads (amendatory language emphasized):
(1) The benefits provided by KRS 21.350 to 21.510 to be paid shall be funded through contract with a reputable life insurance company authorized to do business in this state, or through investment and reinvestment of funds in securities which, at the time of making the investment, are by law permitted for the investment of funds by fiduciaries in this state, or through a combination of such methods. To the extent that funding is provided through insurance contract, no contributions, payments or premiums shall be subject to any tax on insurance premiums or annuity considerations. The investment committee for the judicial retirement fund shall be trustee of any and all funds contributed or appropriated to the retirement system, and shall have sole authority to make insurance contracts or investments.
(2) The board members or any investment adviser shall discharge their duties with respect to the funds of the retirement system solely in the interest of the members and beneficiaries and:
(a) For the exclusive purposes of providing benefits to members and their beneficiaries and defraying reasonable expenses of administering the plan;
(b) With the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; and
(c) In accordance with the laws, regulations and other instruments governing funds.
(3) Any accrual of benefits provided under this or any other applicable statute shall be no less than the benefit adjustment provided for in KRS 21.405(4) from the date of the last establishment of that benefit.
The "benefit adjustment provided for in KRS 21.405(4)" is an annual cost-of-living increase of judicial retirement benefits based on the Consumer Price Index (CPI), not to exceed five percent. Since KRS 21.450 does not contain an "accrual of benefits" provision, the "benefit adjustment" must refer to benefits awarded under "any other applicable statute." That "applicable *773 statute" could not be a statute similar to KRS 21.450 because there is no statute pertaining to the funding of retirement benefits or the duties of a retirement board of trustees or investment adviser that contains an "accrual of benefits" provision. See KRS 21.440; KRS 21.530; KRS 21.540; KRS 21.550; KRS 21.560; KRS 61.570; KRS 61.645; KRS 61.650; KRS 61.660.
The Board of Trustees of the Judicial Form Retirement System (JFRS) administers both the Judicial Retirement Plan described in KRS 21.345, et. seq., and the Legislators' Retirement Plan, KRS 6.500, et seq. KRS 21.530 provides:
For administrative purposes only, as hereinafter provided, the Legislators' Retirement Plan and the Judicial Retirement Plan shall be coordinated under the name, Judicial Form Retirement System, but each of the plans shall maintain its separate identity.
(Emphasis added.)
However, "any other applicable statute" providing an "accrual of benefits" could not refer to a statute pertaining to actual judicial or legislative retirement benefits because KRS 21.405(4) and KRS 6.521(2) already apply annual CPI increases to those benefits. Instead, Appellant asserts that the "other applicable statute" is KRS 61.510(13), a section of the Kentucky Employees Retirement System (KERS) which does not purport to provide for an "accrual of benefits" but only defines "creditable compensation" of KERS members as "salary, tips ... and fees" for purposes of calculating their retirement benefits under KRS 61.595, et seq., and "for members of the General Assembly, it [creditable compensation] shall mean an assumed salary of twenty-seven thousand-five hundred dollars ($27,500) per annum ...." Appellant claims this "assumed salary" is the "accrual of benefits" to which the CPI increases in HB 389(4) applyretroactively to 1982, "the date of the last establishment of" the assumed salary and prospectively after July 14, 2000, the effective date of HB 389(4). Retroactive application of CPI increases from 1982 through 1999 would increase the "assumed salary" by 72% from $27,500.00 to $47,308.00.
The significance of KRS 61.510(13) is that KRS 6.520(1) calculates a legislator's initial retirement benefit by multiplying 3.5% of the legislator's "final compensation" times the legislator's years of service and defines "final compensation" as the "creditable compensation" defined in KRS 61.510(13). A 72% increase in the "assumed salary" would, therefore, translate into a concomitant 72% increase in a legislator's retirement benefits. For example, a legislator earning $27,500.00 and retiring after twenty years of service would be entitled to an annual retirement benefit of $19,250.00 before HB 389(4) (3.5% × $27,500.00 × 20 years) but an annual retirement benefit of $33,115.60 after HB 389(4) (3.5% × $47,308.00 × 20 years) even though the legislator never earned a salary in excess of $27,500.00.
This theory that the amendment of KRS 21.450 actually amended KRS 61.510(13) has three immediately apparent flaws. First, HB 389(4) refers to an "accrual of benefits provided under ... any ... applicable statute." (Emphasis added.) However, no "accrual of benefits" is "provided under" KRS 61.510(13); it merely identifies a legislator's "creditable compensation," which is but one factor used in calculating that legislator's initial retirement benefit. Second, the theory misapplies accrual of benefits to creditable compensation. "Accrual of benefits" means, in a *774 defined benefit plan,[1] "the process of accumulating pension credits for years of credited service, expressed in the form of an annual benefit to begin payment at normal retirement age." Employment Benefit Plans: A Glossary of Terms, supra note 1, at 1. Applying that definition, "accrual of benefits" pertains not to the retiree's "creditable compensation" but to the retiree's "service credits," i.e., the retiree's years of creditable service, KRS 6.515, yet another factor used in calculating the initial retirement benefit. Clearly, annual CPI increases do not apply to allow the accumulation of additional "service credits." A third flaw in the theory is that HB 389(4) refers to the "last establishment of that benefit," and "creditable compensation," in the case of a legislator, is an assumed "salary," not a benefit.
I. LEGISLATIVE HISTORY OF KRS 21.450(3).
Senate Bill 349.
On March 13, 2000, Senate Bill (SB) 349 was introduced and read on the Senate floor. 2000 Sen. J. 1544. As written, Section 1(13) of SB 349 would have read as follows:
[F]or members of the General Assembly who retire under Section 12 of this Act, or who die in office, "final compensation" shall be forty-five thousand dollars ($45,000). The assumed salary for legislators in this subsection shall be adjusted annually ... to reflect changes in the current purchasing power of the dollar. The maximum possible compensation for legislators under this subsection shall be based precisely upon the consumer price index formula approved in Matthews v. Allen, Ky., 360 S.W.2d [135], 139 (1962).
Thus, its sponsor clearly intended for SB 349 to increase the "assumed salary" of legislators from $27,500.00 to $45,000.00 and to provide for CPI increases of the assumed salary on an annual basis thereafter. An actuarial analysis dated March 10, 2000, presumably obtained in compliance with KRS 6.350, indicates that the increase of the "assumed salary" to $45,000.00 would have required $725,000.00 per year of additional funding for the JFRS. Letter from Gagel to Early of 3/10/00, at 3. When the tenor of the floor debate indicated that the proposed increases would fail, SB 349 was withdrawn and replaced by a committee substitute that retained the $27,500.00 "assumed salary" and did not provide for future annual CPI increases. 2000 Sen. J. 1590. The committee substitute then passed the Senate and was sent to the House where it was reported and received its first reading on March 24, 2000. 2000 House J. 4622. On March 27, 2000, a House floor amendment to SB 349 (committee substitute) was introduced that would have reinstated the amendments deleted by the Senate, i.e., immediate increase of "assumed salary" to $45,000.00 with annual CPI increases thereafter. 2000 House J. 4909. The bill was never called to a vote and was recommitted to the appropriations committee from which it did not re-emerge. Id. at 5297.
House Bill 389.
Meanwhile, on March 13, 2000, the same day the original version of SB 349 was *775 debated and withdrawn, HB 389 was passed by the House and sent to the Senate. This bill, as passed by the House, would have amended various unrelated provisions of the Legislators' and Judicial Retirement Plans, but not KRS 21.450. 2000 House J. 3359. It was first referred to the Senate Appropriations Committee, 2000 Sen. J. 2090, then to the State and Local Government Committee. Id. at 2926. On March 23, 2000, the latter committee adopted and added to the consent calendar by voice vote a committee substitute for HB 389 that deleted several sections and added a new section (4). Minutes, Sen. Comm. on State & Local Gov't (15th meeting, March 23, 2000). The Legislative Research Commission then requested that the executive director of the JFRS provide an actuarial analysis of all four sections of HB 389 (committee substitute). On March 27, 2000, the executive director responded that the impact of Sections 1 and 2 would be "zero," the impact of Section 3 would be "negligible," and "I am unable to determine the fiscal impact, if any, of Section 4." Letter from Early to Dutton of 3/27/00.
On March 29, 2000, HB 389 (committee substitute) passed the Senate without debate as part of the consent calendar. 2000 Sen. J. 3366. Later that same day, the House concurred with the Senate's committee substitute for HB 389 with only this comment by the House sponsor:
Section 4 was added ... and I have a report here ... from the retirement system ... that says ... "I am unable to determine the fiscal impact, if any, of Section 4."
Videotape: House Floor Debate (3/29/2000); 2000 House J. 5229.
II. PROCEDURAL BACKGROUND.
Unable to decipher what effect, if any, HB 389(4) might have on the JFRS, the executive director of the JFRS requested a formal opinion from the Attorney General, pursuant to KRS 15.025(1) as to the bill's proper interpretation and effect with respect to the following potential issues:
1. Does the amendment to KRS 21.450 require that the assumed salary in the Legislat[ors'] Retirement Plan be annually increased by the CPI?
2. If the amendment to KRS 21.450 provides that the assumed salary under the Legislat[ors'] Retirement Plan is to be annually increased by the CPI, is the increase retroactive?
3. If the amendment to KRS 21.450 provides that the assumed salary under the Legislat[ors'] Retirement Plan is to be annually increased by the CPI, at what date is the increase to be first applied?
4. Does the amendment to KRS 21.450 provide that in a year in which a judicial salary increase falls below the CPI, will the salary be adjusted by the CPI? If the amendment requires that a judicial salary be adjusted by the CPI, is the increase retroactive? If the amendment requires that a judicial salary be adjusted by the CPI, at what date is the increase to be first applied?
5. Is the legislator or judge required to make personal contributions on the additional assumed salary or salary on which the benefits ultimately will be calculated?
6. To whom does the amendment applymembers, retirees, or both?
OAG 00-5, at 2 (quoting the questions posed by the executive director of the JFRS).
In the course of drafting his response, the Attorney General requested that Senator Robinson, chair of the Senate State and Local Government Committee, provide any research or documentation utilized *776 in drafting the committee substitute for HB 389(4). Letter from Sen. Robinson to Carrico, 5/18/00, at 1 (referring to Attorney General's information request). By letter dated May 18, 2000, Senator Robinson responded that no such documents existed and gratuitously added that the intent of the bill was to increase legislators' retirement benefits by applying annual CPI increases to the "assumed salary" of legislators retroactive to 1982. He further explained:
Since it was our intent to not make the provision of the amendment so visible; and based on staff's proposal, we decided to place the substance of our proposal on one of the judicial statutes that are identified with KRS 6.525. Therefore, we chose to peg our proposal to KRS 21.450.
Id. On June 13, 2000, the Attorney General rendered his opinion that HB 389(4) was void because it (1) was enacted without obtaining the actuarial analysis required by KRS 6.350; (2) is so vague as to be unintelligible; and (3) violates the "nondelegation doctrine" by delegating legislative authority to an administrative agency. OAG 00-5.
The Board of Trustees of the JFRS filed this action in the Franklin Circuit Court for a declaratory judgment pursuant to KRS 418.040, requesting that the court declare HB 389(4) valid and judicially construe its meaning. The Franklin Circuit Court accepted the theory that the amendment of KRS 21.450 actually amended KRS 61.510(13) and that its effect was to increase the "assumed salary" of legislators to $47,308.00 as of July 14, 2000, and to apply CPI increases to the assumed salary on an annual basis thereafter. The circuit court further concluded that HB 389(4) was unintelligible only to laypersons but understandable to pension law specialists (despite the fact that the executive director of the JFRS was unable to comprehend its meaning). The circuit court did not address the nondelegation doctrine despite conceding that only an expert could decipher the bill's meaning. Finally, the circuit court found substantial compliance with KRS 6.350 because the General Assembly had made an unsuccessful attempt to obtain an actuarial analysis from the executive director of the JFRS. KRS 6.350 provides, inter alia:
A bill which would increase the benefits ... of any public retirement system ... shall not be reported from a legislative committee of either house of the General Assembly ... unless the bill is accompanied by an actuarial analysis... show[ing] the economic effect of the bill on the public retirement system, including a projection of the annual cost to the system of implementing the legislation for at least ten (10) years ... prepared by an actuary who is a fellow of the Society of Actuaries, a member of the American Academy of Actuaries, or an enrolled actuary under the Employees' Retirement Income Security Act of 1974.
The Court of Appeals reversed the Franklin Circuit Court without addressing the vagueness and nondelegation issues, deeming KRS 6.350 mandatory and, thus, the failure to obtain the actuarial analysis fatal. Having granted discretionary review, we disagree with the Court of Appeals that the General Assembly's noncompliance with KRS 6.350 invalidates HB 389(4). However, we also disagree with the Franklin Circuit Court and find HB 389(4) unconstitutional because it is void for vagueness in that it is unintelligible and because it violates the nondelegation doctrine.
III. ACTUARIAL ANALYSIS.
The Court of Appeals declared HB 389(4) invalid because the General Assembly *777 failed to comply with KRS 6.350. However, that statute is procedural in nature and has no constitutional implications. Section 39 of our Constitution authorizes the General Assembly to establish rules governing its own proceedings. So long as those rules do not violate some other provision of the Constitution, it is not within our prerogative to approve, disapprove, or enforce them. Cf. Philpot v. Patton, Ky., 837 S.W.2d 491, 494 (1992) ("While it would be a violation of the separation of powers doctrine in the Kentucky Constitution, Sections 27 and 28, for our Court to tell the General Assembly what to do, i.e., what system or rules to enact, it is our constitutional responsibility to tell them whether the system in place complies with or violates a constitutional mandate, and, if it violates the constitutional mandate, to tell them what is the constitutional `minimum.'"). While we have not previously addressed the issue, other courts that have done so have uniformly held that a statute enacted in contravention of a legislative procedural rule is not invalid per se.
It is entirely the prerogative of the legislature, however, to make, interpret, and enforce its own procedural rules, and the judiciary cannot compel the legislature to act in accordance with its own procedural rules so long as constitutional questions are not implicated. Furthermore, the legislature has complete control and discretion whether it shall observe, enforce, waive, suspend, or disregard its own rules of procedure, and violations of such rules are not grounds for the voiding of legislation.
Des Moines Register & Tribune Co. v. Dwyer, 542 N.W.2d 491, 496 (Iowa 1996) (citations omitted). See also Abood v. League of Women Voters, 743 P.2d 333, 336-37 (Alaska 1987) (review of the legislature's adherence to its own procedural rules constitutes a nonjusticiable political question solely within the legislature's province, and non-adherence to rules does not implicate constitutional rights); State v. Gray, 221 La. 868, 60 So.2d 466, 468 (1952) (legislature's failure to observe procedural rules does not invalidate legislation). The result is the same even when the procedural rule is, as here, codified in a statute. Moffitt v. Willis, 459 So.2d 1018, 1021-22 (Fla.1984).
In State ex. rel. La Follette v. Stitt, 114 Wis.2d 358, 338 N.W.2d 684 (1983), the Wisconsin legislature enacted debt legislation in contravention of Wis. Stat. § 13.49(5) which required referral of such proposed legislation to a joint survey committee on debt management before passage. Id. at 686-87. The statute further provided that "[t]he proposal shall not be considered further by either house until the committee has submitted a report, in writing, setting forth an opinion on the fiscal effect upon the state or local government ...." Id. at 686 (quoting Wis. Stat. § 13.49(5)). This language, of course, closely resembles the mandatory language in KRS 6.350. In upholding the debt legislation, the Wisconsin Supreme Court noted:
Courts are reluctant to inquire into whether the legislature has complied with legislatively prescribed formalities in enacting a statute. This reluctance stems from separation of power and comity concepts, plus the need for finality and certainty regarding the status of a statute. Baker v. Carr, 369 U.S. 186, 215, 82 S.Ct. 691, 709, 7 L.Ed.2d 663 (1962). Although since Marbury v. Madison, 5 U.S. (1 Cranch) 137, 2 L.Ed. 60 (1803) courts have had the authority to review acts of the legislature for any conflict with the constitution, courts generally consider that the legislature's adherence to the rules or statutes prescribing procedure is a matter entirely within legislative control and discretion, *778 not subject to judicial review unless the legislative procedure is mandated by the constitution. 73 Am.Jur.2d Statutes, sec. 49, p. 296. If the legislature fails to follow self-adopted procedural rules in enacting legislation, and such rules are not mandated by the constitution, courts will not intervene to declare the legislation invalid. The rationale is that the failure to follow such procedural rules amounts to an implied ad hoc repeal of such rules.
Id. at 687. Furthermore, since the asserted interpretation of HB 389(4) so closely adheres to the language of failed SB 349, the actuarial analysis obtained with respect to SB 349 supports the Franklin Circuit Court's finding of substantial compliance with KRS 6.350 with respect to HB 389.
IV. UNINTELLIGIBILITY.
The void-for-vagueness doctrine is most often applied in the context of the First Amendment, the criminal law, and punitive civil laws. See, e.g. Martin v. Commonwealth, Ky., 96 S.W.3d 38, 59-60 (2003) (First Amendment); Jones v. Commonwealth, Ky., 830 S.W.2d 877, 880 (1992) (criminal law); Vill. of Hoffman Estates v. Flipside, 455 U.S. 489, 499-500, 102 S.Ct. 1186, 1193-94, 71 L.Ed.2d 362 (1982) (civil penalties). However, while statutes affecting those areas should receive the most rigorous review and are most commonly held void for vagueness, non-punitive civil, regulatory, or spending statutes are also invalid if they are so unintelligible as to be incapable of judicial interpretation. In that circumstance, the statute often is declared void for "unintelligibility" or "uncertainty" as opposed to "vagueness."
The most oft-cited expression of this doctrine in Kentucky is Folks v. Barren County, 313 Ky. 515, 232 S.W.2d 1010 (1950), in which our predecessor court was asked to interpret a statute allowing boards of education to finance new school buildings through direct appeals to voters. The Court noted the following proposition of law:
It is not for us to say the Legislature does not have the right to be indirect where it could be direct, or to be obscure and confusing where it could be clear and simple. But where the law-making body, in framing the law, has not expressed its intent intelligibly, or in language that the people upon whom it is designed to operate or whom it affects can understand, or from which the courts can deduce the legislative will, the statute will be declared to be inoperative and void.
Id. at 1013 (emphasis added). The United States Court of Appeals for the Sixth Circuit, citing Folks, noted that "Kentucky's highest court has clearly and unwaiveringly [sic]" held that unintelligible statutes will be declared invalid. Bostic v. E. Constr. Co., 497 F.2d 712, 715 (6th Cir.1974). The Sixth Circuit held in Bostic, a tort case for damages caused by fire, that a safety regulation promulgated pursuant to KRS 227,300 was "so vague and confusing as to be unenforceable and invalid." Id. at 714. It "simply [did] not possess that degree of clarity necessary for validity ...." Id. at 716.
Folks recognized but did not create this rule. Our predecessor court had previously applied the rule to hold "void for uncertainty" a statute that allowed the local board of trustees of a pension plan to award a pension to a firefighter with twenty years of experience "if his [retirement] application is granted." Schmid v. Bd. of Trustees, 146 Ky. 335, 142 S.W. 688, 689 (1912). Even earlier, the Court voided a statute pertaining to the terms of court for the twenty-fourth judicial district, noting *779 that "[t]he bill is so carelessly drawn that it is impossible to determine just what its author intended ...." Litteral v. Blair, 139 Ky. 196, 129 S.W. 573, 575 (1910). The Court found that the statute was "inoperative and void" "because its provisions were indefinite and uncertain...." Id. See also Sullivan v. Brawner, 237 Ky. 730, 36 S.W.2d 364, 367 (1931) (void-for-vagueness doctrine only applies "with greater emphasis" to criminal statutes); cf. Moore v. N. Ky. Indep. Food Dealers, 286 Ky. 24, 149 S.W.2d 755, 758 (1941) (statute should not be invalidated "unless the intention, object and purpose of the legislature was so vaguely presented as to be incapable of intelligent interpretation and correct application").
Many other examples of our adherence to the Folks rule exist. Our predecessor court invalidated former KRS 119.070(4), applicable to the nomination of judicial candidates, because "the intent of the subsection in question is so obscure that any effort to ascribe some rational meaning to it would be based solely on conjecture." Burke v. Stephenson, Ky., 305 S.W.2d 926, 929 (1957). The Court also invalidated a statute providing that the "prevailing wage" should be paid in public works projects, citing Folks and noting "the rule that where the intention of the legislature is so obscure as to defy a rational meaning, the law cannot be given effect." Kerth v. Hopkins County Bd. of Ed., Ky., 346 S.W.2d 737, 741 (1961). The Court applied the rule later to invalidate a law that purported to tell a sheriff when a prisoner convicted of a misdemeanor was eligible for parole. Murphy v. Cranfill, Ky., 416 S.W.2d 363 (1967). Although this statute obviously related to criminal law, the Court did not invalidate it for failure to fairly notify potential offenders of punishable conduct or even the type of punishment for such conduct, but because it was unintelligible.
All parties have assumed this to be a valid law unless it violates some specific provision of the Kentucky Constitution, but there is another ground upon which we may declare this enactment ineffective as a law. That is the lack of intelligibility. In other words, if the language of the law is so ambiguous as to completely obscure the legislative intent and to defy rational meaning, it is simply inoperative as a law.
Id. at 364. Citing Kerth and Folks, the Court found that the relevant words in the statute were "meaningless;" thus, it deemed the statute "an abortive effort" and "a nullity." Id. at 366.
Kentucky is not alone in requiring that statutes be facially intelligible. In Spinelli v. Immanuel Lutheran Evangelical Congregation, Inc., 118 Ill.2d 389, 113 Ill.Dec. 915, 515 N.E.2d 1222 (1987), the Supreme Court of Illinois invalidated a statute permitting teachers to inspect some, but not all, of the documents in their personnel files because that statute was so vague that it was impossible for school districts to discern which documents were subject to disclosure. Id. at 1228. It noted the rule that:
While it is the duty of the courts to ascertain the meaning of and to give effect to every valid act of the legislature, yet they cannot supply omissions or remedy defects in matters committed to the legislature. A legislative act which is so vague, indefinite and uncertain that the courts are unable, by accepted rules of construction, to determine, with any reasonable degree of certainty, what the legislature intended, or which is so incomplete or conflicting and inconsistent in its provisions that it cannot be executed, will be declared to be inoperative and void.
Id. at 1228 (emphasis added, internal quotations and citations omitted). (Thus, as *780 also suggested in Folks, supra, at 1013, it is insufficient that a pension plan expert might be able to interpret HB 389(4) if a Court could not interpret it by the application of accepted rules of construction.). See also Opinion by the Justices, 249 Ala. 88, 30 So.2d 14, 17-18 (1947) (invalidating statute authorizing state to contribute to life insurance premiums for state officers and employees because statute "lacks in reasonable precision, and is so uncertain and indefinite as to render it inoperative"); Mo. Pac. R.R. Co. v. Morris, 345 S.W.2d 52, 57, 59 (Mo.1961) (en banc) (invalidating excise tax law where words were "vague, indefinite and uncertain," and noting the rules that "where the statutory terms are of such uncertain meaning, or so confused, that the courts cannot discern with reasonable certainty what is intended, they will pronounce the enactment void," and "a mere collection of words can not constitute a law; otherwise the dictionary can be transformed into a statute by the proper legislative formula.").
Section 4 of HB 389 is worse than all of the invalidated laws described supra because it is intentionally incomprehensible as stated by Senator Robinson in his May 18, 2000, letter to the Attorney General:
Since it was our intent to not make the provision of the amendment so visible ....
Letter from Sen. Robinson to Carrico, supra, at 1.
The Framers of the present Kentucky Constitution were so concerned about surreptitious legislation that they enacted Section 51. See Martinez v. Commonwealth, Ky., 72 S.W.3d 581, 584 (2002) (the purpose of Section 51 "is to prevent surreptitious legislation, and to prevent surprise and fraud upon the members of the General Assembly and other interested parties"). While Section 51 is not at issue here, it provides structural support for the fundamental common-law proscription against intentionally obscure statutes. One commentator has addressed the perniciousness of this kind of legislative strategy in the context of tax legislation:
Certain [tax] provisions meant to favor a powerful special interest are intentionally written in obscure styles. The obscurity not only limits the benefit of such provisions to the narrow interest group, it also makes it less likely that the public at large will discover, understand and criticize the favor.
Edward J. McCaffery, The Holy Grail of Tax Simplification, 1990 Wis. L.Rev. 1267, 1284-85 (1990). That concern is magnified when the special interest group favored by the disguised benefit is the legislature, itself. Our Constitution is clearly wary of self-serving legislation, providing in Section 57 that "[a] member who has a personal or private interest in any measure or bill ... shall disclose the fact ...," and in Section 235 that "[t]he salaries of public officers shall not be changed during the terms for which they were elected." Again, the Attorney General does not allege a violation of either Section 57 or Section 235, but it would contradict the constitutional rationale behind those Sections to validate a deliberately surreptitious attempt by the General Assembly to increase its own retirement benefits.
Appellants correctly assert that only constitutional infirmities can void legislation. Ky. Const. § 27 (providing for separation of powers among the three branches of government); Ky. Const. § 28 (forbidding any department from "exercis[ing] any power properly belonging to either of the others, except in the instances hereinafter expressly directed or permitted"); Ky. Const. § 29 (vesting legislative power in the General Assembly). In the context of laws that constrain speech, *781 the constitutional foundation of the void-for-vagueness doctrine is the First Amendment. In the context of criminal law, the constitutional foundation is the Due Process Clause of the Fifth and Fourteenth Amendments. So where is the constitutional foundation for the Folks unintelligibility rule? Despite language in Murphy v. Cranfill, supra, at 364, suggesting that no constitutional foundation is required, the unintelligibility rule has its foundation in the constitutional requirement of separation of powers. Miller v. Covington Dev. Auth., Ky., 539 S.W.2d 1, 4-5 (1976) (invalidating a statute because it so "lacked legislative criteria" as to impermissibly delegate lawmaking power to the executive). In that respect, the unintelligibility rule intersects with the nondelegation doctrine discussed infra. If the legislature empowers the executive branch with authority to implement a statute without sufficient guidelines, it effectively delegates lawmaking to the executive branch. Without guidelines contained in the statute, itself, the executive branch must guess at the intent of the legislature and is thereby transformed from implementer of the law into maker of the law.
The same is true when the judicial branch is asked to interpret an unintelligible statute. Sullivan v. Brawner, supra, suggested that separation of powers is the reason the Court must invalidate unintelligible statutes. When faced with unintelligibility, "the court can do nothing but conjecture, and in doing so it would allocate to itself legislative functions, but which is everywhere conceded it has no right to do." 36 S.W.2d at 368. Stated differently, it is impossible to interpret language that is unintelligible. Thus, when faced with such language, the court has only two options. It may legislate by saying, "this unintelligible language means X," or, it may declare the law invalid and give the General Assembly an opportunity to write an intelligible statute. In fact, if the General Assembly did intend for HB 389(4) to amend KRS 61.510(13), the withdrawn version of SB 349 exemplified how it could draft such an amendment in an intelligible fashion.
Section 29 of the Kentucky Constitution provides another constitutional foundation for the Folks rule:
The legislative power shall be vested in ... the "General Assembly of the Commonwealth of Kentucky."
Obviously, an attempted exercise of legislative power is simply ineffective if the legislative product is unintelligible. In that event, no legislative power has been exercised. See Murphy v. Cranfill, supra, at 366 (unintelligible statute was an "abortive effort" and a "nullity").
V. NONDELEGATION DOCTRINE.
The United States Supreme Court has expressed concern with respect to improper delegation of legislative authority. In short, the nondelegation doctrine recognizes that the Constitution vests the legislative power exclusively in Congress, U.S. Const. art. I, § 1, and under the doctrine of separation of powers, Congress must exercise that power rather than delegate it to the executive or judicial branches. Nevertheless, given the realities of modern rule-making, Congress has neither the time nor the expertise to do it all; it must have help. Mistretta v. United States, 488 U.S. 361, 372, 109 S.Ct. 647, 655, 102 L.Ed.2d 714 (1989) ("[O]ur jurisprudence has been driven by a practical understanding that in our increasingly complex society, replete with ever changing and more technical problems, Congress simply cannot do its job absent an ability to delegate power under broad general directives.").
The compromise developed by the Court is that Congress must "lay down by *782 legislative act an intelligible principle to which the person or body authorized to [act] is directed to conform." J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409, 48 S.Ct. 348, 352, 72 L.Ed. 624 (1928) (emphasis added).
The intelligible-principle rule seeks to enforce the understanding that Congress may not delegate the power to make laws and so may delegate no more than the authority to make policies and rules that implement its statutes.
Loving v. United States, 517 U.S. 748, 771, 116 S.Ct. 1737, 1750, 135 L.Ed.2d 36 (1996). Nevertheless, the Court has been notoriously lax in reviewing delegations unaccompanied by intelligible principles. Indeed, the Court conceded in a recent opinion:
In the history of the Court we have found the requisite "intelligible principle" lacking in only two statutes, one of which provided literally no guidance for the exercise of discretion, and the other of which conferred authority to regulate the entire economy on the basis of no more precise a standard than stimulating the economy by assuring "fair competition." See Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446 (1935); A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570 (1935).
Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 474, 121 S.Ct. 903, 913, 149 L.Ed.2d 1 (2001).
Kentucky holds to a higher standard. Our predecessor court noted that Kentucky is more "restrictive of powers granted" than the federal Constitution because the federal Constitution does not have a "provision expressly forbidding the Congress to delegate its legislative powers," as do Sections 27, 28, 29, and 60 of the Kentucky Constitution. Bloemer v. Turner, 281 Ky. 832, 137 S.W.2d 387, 390-91 (1939). Thus, federal decisions do not have "the usual persuasive force" when it comes to delegation issues. Id. at 391. Indeed, in the area of nondelegation, Kentucky may be unsurpassed by any state in the Union.
Perhaps no state forming a part of the national government of the United States has a Constitution whose language more emphatically separates and perpetuates what might be termed the American tripod form of government than does our Constitution ....
Sibert v. Garrett, 197 Ky. 17, 246 S.W. 455, 457 (1922). See also Diemer v. Commonwealth, Ky., 786 S.W.2d 861, 864 (1990) ("Kentucky is a strict adherent to the separation of powers doctrine.").
Like the federal "intelligible-principle rule" articulated in J.W. Hampton, supra, Kentucky law mandates that "the legislature must lay down policies and establish standards." Bloemer, supra, at 391. However, our rule has not been as toothless as the "intelligible-principle rule." In Miller v. Covington Development Authority, supra, we declared unconstitutional the former Local Development Authority Act, KRS 99.610-.680, which created and delegated to a local agency broad power to preserve and restore historically or economically "significant local areas." 539 S.W.2d at 2. These powers were granted without "legislative criteria," thus, we held that the statute was an impermissible delegation. Id. at 4-5.
In Fawbush v. Bond, Ky., 613 S.W.2d 414 (1981), we invalidated former KRS 67.045, which delegated to the district court the responsibility to evaluate proposed redistricting plans and to establish new boundaries in the event such proposals were disapproved. We held that while the General Assembly could delegate the power to review a redistricting proposal with statutory guidelines, KRS 67.045 *783 "provide[d] no criteria whatever for such a review." Id. at 415.
In Legislative Research Commission v. Brown, Ky., 664 S.W.2d 907 (1984), we invalidated a statute delegating legislative power to the Legislative Research Commission during periods of legislative adjournment because, inter alia, the delegation lacked "standards controlling the exercise of administrative discretion." Id. at 915. Most recently, we held that KRS 177.863, which charged the Transportation Cabinet with limiting the proliferation of moving or flashing lighted signs, violated the nondelegation doctrine because it gave "no guidance" to the Cabinet in interpreting crucial provisions of the statute. Flying J Travel Plaza v. Commonwealth, Ky., 928 S.W.2d 344, 350 (1996). Cf. Preston v. Clements, 313 Ky. 479, 232 S.W.2d 85, 89 (1950) (upholding delegation for purposes of building new Capitol Annex when it provided "an adequate standard" to govern the State Property and Buildings Commission); Young v. Willis, 305 Ky. 201, 203 S.W.2d 5, 8 (1947) (upholding statute that stated "the subject, nature and extent" of the delegation, "declar[ing] its policy and prescrib[ing] standards for the guidance of the administrative agency").
Three cases applying the nondelegation doctrine illustrate the possible confluence of that doctrine with the Folks unintelligibility rule discussed supra. That confluence was explicitly recognized in Kerth v. Hopkins County Board of Education, supra, wherein the Court wrote that it did not need to reach the nondelegation question because the statute was so obscure that it was invalid under the Folks rule alone. 346 S.W.2d at 742. However, Kerth observed in dicta that the statute's vagueness also necessarily meant that it would fail to pass muster under the nondelegation doctrine. Id. Recognizing the rule that "it is fundamental that the legislature must prescribe some standard governing the scope of administrative action," id. at 741, Kerth noted that in the delegation to the Wage Board:
There is simply nothing in this legislation which offers any clue to what the legislature intended should guide and control the Board's determination of proper "prevailing wage" rates. Not only is the Board left completely adrift... but no one, including this court, is furnished any criteria by which to determine whether the Board is carrying out the assumed legislative policy as the legislature intended ....
Id. Thus, while Kerth could have invoked the nondelegation doctrine to void the statute, the fundamental obscurity of the law provided sufficient grounds for invalidation, making the nondelegation approach "unnecessary." Id. (The above-quoted passage from Kerth applies equally to HB 389(4).)
The second example of the confluence between the unintelligibility rule and the nondelegation doctrine appears in Diemer v. Commonwealth, supra, in which the Kentucky Billboard Act, former KRS 177.830-.890, was challenged as being void for vagueness and an unconstitutional delegation to the Secretary of Transportation. We addressed both issues, finding first that the Billboard Act, which regulated billboard signs more than 660 feet from an "urban area," 786 S.W.2d at 864, was "confusing to the point of being unintelligible" so that it "fail[ed] to put a particular property owner on notice as to whether his property is or is not within an urban area." Id. at 865.[2] Second, we found that the *784 delegation to the Transportation Secretary did not cure the confusion because the statute did not contain "sufficient standards controlling the exercise of that discretion ...." Id. (quotation omitted). Thus, we deemed the statute an unconstitutional delegation. Id. at 866.
Finally, our predecessor court voided the pension law in Schmid v. Board of Trustees, supra, because that law gave the local Board of Trustees virtually unfettered discretion to decide when a firefighter's retirement application would be granted for purposes of collecting his pension. 142 S.W. at 690. Recall that, as discussed supra, the statute allowed a firefighter with twenty years' experience to collect his pension "if his application is granted." Id. at 689. The Court found this statute "void for uncertainty" precisely because "the whole matter seems to have been intentionally left to the discretion of the board without any standard to guide it." Id. at 690. Thus, in an early articulation of the nondelegation doctrine, Schmid held:
The Legislature cannot confer upon its creature [the Board of Trustees] arbitrary power to use this fund as it may see proper. In authorizing the board to grant a pension, the Legislature must define the persons who are to receive the pension, so that the board will have a standard to guide it. It cannot leave the board to grant or refuse a pension at its whim or pleasure.
Id. As in Schmid, HB 389(4) left its purpose to the conjecture of the Board of Trustees. If the legislative intent in amending KRS 21.450 was, instead, to amend KRS 61.510(13), that fact is certainly not apparent, or even vaguely discernible, from the language of the bill. The bill contains no clue as to where to look for an "applicable statute" that provides an "accrual of benefits." Certainly, one would not expect to look to KRS 61.510(13), which defines "creditable compensation" and does not provide an "accrual of benefits."
Kentucky's strong stance against vague delegations also protects the rights of Kentucky voters. Professor John Hart Ely argues that the worst delegations often occur because "our representatives quite shrewdly prefer not to have to stand up and be counted but rather to let some executive branch bureaucrat ... take the inevitable political heat." John Hart Ely, Democracy & Distrust: A Theory of Judicial Review, 132 (Harvard University Press 1980) (quotation omitted). The "intelligible principle" requirement of the nondelegation doctrine is designed to prevent legislators from deliberately passing vaguely worded special interest (or self-interested) legislation and acting surprised when the true nature of the legislation comes to light. Professor Ely quotes Congressman Flowers's remarks about this tactic:
"[T]hen we stand back and say when our constituents are aggrieved or oppressed by various rules and regulations, `Hey, it's not me. We didn't mean that. We passed this well-meaning legislation, and we intended for those people out there ... to do exactly what we meant, and they didn't do it."'
Id. Ely argues that the feeble enforcement of the intelligible principle rule by the United States Supreme Court has allowed "legislators [to] escap[e] the sort of accountability that is crucial to the intelligible functioning of a democratic republic." Id. Not so in Kentucky.
*785 Under our precedents, HB 389(4) is clearly an unconstitutional delegation. Put simply, this unintelligible statute has neither "an intelligible principle," J.W. Hampton, supra, at 409, 48 S.Ct. 348, nor "standards controlling the exercise of administrative discretion." Legislative Research Comm'n v. Brown, supra, at 915. A review of the questions posed to the Attorney General by the executive director of the JFRS exemplifies the confusion generated by a statute so unintelligible as to defy comprehension by those charged with its implementation. In fact, this statute is so unintelligible that we, unlike the Franklin Circuit Court, are unconvinced that even an expert in the field of pension benefits could, absent Senator Robinson's proffered advice of his legislative intent, discern that the intent of this statute was to amend KRS 61.510(13) and thereby effectuate a 72% increase in legislative pensions. Regardless, the citizens of this Commonwealth are entitled to legislation that is "written in nontechnical language and in a clear and coherent manner using words with common and everyday meanings," KRS 446.015, so that it can be reasonably understood by those charged with its implementation (and those charged with its judicial construction) without resort to "expert" opinion. HB 389(4) simply does not give sufficient guidance of its meaning and intent to its "creature," the Board of Trustees, Schmid, supra, at 690, and thus fails to pass muster under both the unintelligibility rule and the nondelegation doctrine.
VI. PAROL EVIDENCE AND STATUTORY CONSTRUCTION.
For the reasons discussed supra, we conclude that HB 389(4) is facially unintelligible and incapable of interpretation by application of normal rules of construction.
[A]ny effort to ascribe some rational meaning to it would be based solely on conjecture.
Burke v. Stephenson, 305 S.W.2d at 929. While we have a duty to, "if possible, sustain the validity of the act and expound it," perhaps by "judicial construction," Folks, 232 S.W.2d at 1013, that duty does not permit us to become legislators and assign meaning where none is apparent. Sullivan, 36 S.W.2d at 368 ("Under such conditions [of unintelligibility] the court can do nothing but conjecture, and in doing so it would allocate to itself legislative functions, but which is everywhere conceded it has no right to do.").
The only legislative history of relevance is that the original version of SB 349, which stated with clarity an intent to increase the "assumed salary" in KRS 61.510(13), was withdrawn when it became obvious that it would not pass. 2000 Sen. J. 1959 From that fact, one would logically assume that KRS 389(4) was not intended to increase the "assumed salary" in KRS 61.510(13). Certainly, no debate occurred with respect to HB 389(4) as it had with respect to SB 349. Of course, if HB 389(4) was intended to accomplish precisely what had caused the withdrawal from consideration of original SB 349, any such debate would have foiled the drafter's expressed intent to disguise the true nature of the bill.
Thus, we are left with Senator Robinson's own ex post interpretation of HB 389(4) and the opinion letter of William P. Hanes, deputy commissioner of the Kentucky Retirement Systems. The interpretations submitted by Senator Robinson and Hanes are contained in separate letters mailed to the Attorney General on the same date, May 18, 2000. Hanes's letter appears to have been written after consultation with Senator Robinson and to simply *786 defer to his interpretation (which is apparently joined by two House members):
Although the language used in the amendment is less than clear, the objectives stated by Senator Robinson and Representatives Arnold and Gray certainly appear to be a reasonable construction of the language used in the provision.
Letter from Hanes to Carrico of 5/18/00, at 4 (emphasis added).
It is a basic principle of statutory construction that legislative intent may not be garnered from parol evidence, especially parol evidence furnished by a member of the legislature, itself.
The sources from which such intention and purpose are to be gathered are primarily the words employed, and, if they are ambiguous, or even apparently contradictory, resort may be had to the title of the statute, which is an index to the subject-matter to be dealt with, and, in case of a constitutional provision, the subject-matter under consideration by the convention that framed it may likewise be taken into consideration. Also in both constitutional provisions and statutes the intention and purpose of the body creating them may in such doubtful contingencies be arrived at by consulting the journals of their proceedings and thereby ascertain the thoughts and expressed intention of the numbers [sic] of the body when the involved matter was under consideration. Of course, the purpose and intention above referred to may not be established by parol testimony or other evidence de hors the journals containing the proceedings of the body that brought into existence the particular law under consideration.
Wheeler v. Bd. of Comm'rs, 245 Ky. 388, 53 S.W.2d 740, 742 (1932) (emphasis added). See also Decker v. Russell, Ky., 357 S.W.2d 886, 888 (1962) (rejecting testimony of two members of the enacting General Assembly as to the intent of the act); 2A Norman J. Singer, Sutherland Statutory Construction § 48.16, at 478-79 (6th ed. 2000) ("In construing a statute the courts refuse to consider testimony about the intent of the legislature by members of the legislature which enacted it."). Compare the United States Court of Appeals for the Third Circuit's treatment of a similar attempt by the sponsor to explain ex post an amendment to the Civil Rights Act:
As the amendment's sponsor, Senator Bennett's understanding of the amendment might have been entitled to some weight if it had been expressed contemporaneously with the passage of the legislation. Coming one year after the Bennett Amendment was enacted, however, the statement at best reflects what was on Senator Bennett's mind when he introduced the amendment and is entitled to no weight .... If Senator Bennett's "clarifying" statement has any significance it must be as evidence that the amendment was ambiguous on its face and that its contemporaneous legislative history was not enlightening.
Int'l Union of Elec., Radio & Mach. Workers v. Westinghouse Elec. Corp., 631 F.2d 1094, 1104 (3d Cir.1980) (emphasis added). The rule against accepting after-the-enactment interpretations by individual legislators has more urgency when the legislation is self-serving and the legislator in question admits to having deliberately obscured the bill's meaning. Cf. Brown v. Thompson, 252 F.Supp.2d 312, 316 (E.D.Va.2003) ("Resort to legislative history ... must be undertaken with caution in those instances where lawmakers deliberately insert an ambiguity to mask a political disagreement and then paper the legislative history record with advocacy statements.").
Nor is Hanes's opinion letter entitled to the type of deference afforded an administrative *787 agency's construction of a statute that it is charged with implementing. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 844-45, 104 S.Ct. 2778, 2782-83, 81 L.Ed.2d 694 (1984). In the first place, Hanes is not charged with implementing the JFRS. See KRS 61.645(1) (Board of Trustees of Kentucky Retirement Systems administers County Employees Retirement System, Kentucky Employees Retirement System, and State Police Retirement System). That function is vested in the Board of Trustees of the JFRS. KRS 21.540. Secondly, Chevron-style deference is normally granted only when the agency interpretation is in the form of an adopted regulation or formal adjudication. Christensen v. Harris County, 529 U.S. 576, 587, 120 S.Ct. 1655, 1662, 146 L.Ed.2d 621 (2000) ("Interpretations such as those in opinion letterslike interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of lawdo not warrant Chevron-style deference."); Mid-America Care Found. v. N.L.R.B., 148 F.3d 638, 642 (6th Cir.1998) ("Chevron deference is limited in application to those situations in which the administrative agency has formally adopted a particular interpretation of a statute."); Johnson City Med. Ctr. v. United States, 999 F.2d 973, 976 (6th Cir.1993) ("[A] revenue ruling, as opposed to a legislative regulation, is not entitled to the deference accorded a statute.") (quotation omitted). For the same reason, we decline to defer to the interpretation advanced in the Appellant's brief filed on behalf of the JFRS.
Rather than accept at face value the lengthy and somewhat convoluted attempts by Senator Robinson and Mr. Hanes to explain how an amendment of KRS 21.450 actually amended KRS 61.510(13), we conclude, as did the Third Circuit in International Union of Elec., Radio & Mach. Workers v. Westinghouse Elec. Corp., supra, that if their attempted explanations have any significance, "it must be as evidence that the amendment was ambiguous on its face and that its contemporaneous legislative history was not enlightening." Id. at 1104. In fact, Hanes's five-page, single-spaced opinion letter attempting to interpret the one sentence (34 words) contained in HB 389(4) merely exemplifies how this statute violates the nondelegation doctrine.
We conclude that HB 389(4), subsequently codified at KRS 21.450(3), is unconstitutional because it is unintelligible and violates the nondelegation doctrine embodied in Sections 27, 28, 29 and 60 of our Constitution. Accordingly, the decision of the Court of Appeals is affirmed, though on different grounds than expressed in its opinion.
GRAVES, JOHNSTONE, KELLER and STUMBO, JJ., concur.
WINTERSHEIMER, J., concurs by separate opinion.
LAMBERT, C.J., not sitting.
WINTERSHEIMER, Justice, Concurring.
I concur with the result achieved by the majority opinion, but I do not agree with much of its reasoning. As correctly determined by the Court of Appeals, KRS 6.350 requires an actuarial analysis for any legislation which would increase the benefits or change the financial liability of any public retirement system before the legislation leaves committee for consideration by the full legislative body and that the actuarial analysis must accompany the legislation. The statute clearly states that an analysis must be prepared by an actuary who is a fellow of the Society of Actuaries, a member of the American Academy of Actuaries or an enrolled actuary under the Employees' *788 Retirement Income Security Act of 1974. The analysis must indicate the economic effect of the bill on a public retirement system, project the cost of increased benefits and describe assumptions and methods of computation.
It is beyond question that KRS 6.350 relates to an important benefit in connection with the provisions of KRS 21.450. It is a matter of significant public interest. In these days of financial flexibility and dramatic shifts in economic status, it cannot be said that an increase in benefits to one segment of the retirement community could not ultimately impact vested pension benefits of retired employees in other classifications. In this case, it appears that the only information that the members of the General Assembly had in regard to the amendment of KRS 21.450 was to the effect that there was a report from the executive director of the retirement system that says, "I am unable to determine the fiscal impact, if any, of Section 4."
The argument made by the Board and accepted by the majority opinion that the statute only requires that a request be made to constitute sufficient compliance is totally without merit. As previously noted, KRS 6.350 mandates that the study be set out in detail and attached to the legislation for consideration before it can be enacted. Although the circuit court properly found that this was not accomplished, it nevertheless improperly concluded that the only requirement was that the request be made and that there was substantial compliance with the statute.
The Court of Appeals correctly found that the failure to comply with the clear requirements of the statute render the amendment to KRS 21.450 void with respect to HB 389. The analysis by the Court of Appeals regarding the plain language of the statute is beyond question. KRS 6.350(1) provides that a pension bill "shall not be reported from a legislative committee of either house of the General Assembly for consideration by the full membership of that house unless the bill is accompanied by an actuarial analysis." The word "shall" is mandatory and not permissive. See KRS 446.010(29).
My greatest difficulty with the rationale presented by the majority is the reference to what it considers merely procedural matters as distinguished from substantive law. Substantive law is that part of the law which creates, defines and regulates rights and duties. Procedural law is an apparatus provided by statute or rule which prescribes a method of legislative operation in enacting substantive provisions. The distinction between substantive and procedural law is that substantive law relates to the rights and duties giving rise to a cause of action while procedural law is the mechanism used for carrying out a practical method of operation. Here, KRS 6.350 defines the responsibility of the General Assembly when amending the pension statutes. The legislature cannot simply ignore the existing statute.
The statute here is not procedural but gives a clear direction as to how the particular law is to be adopted and what conditions must be satisfied. This is not a matter of parliamentary procedure which would be clearly within the realm of the General Assembly, but something that applies to people outside of the legislative body in that it may affect the vested pension benefits of other retired employees.
There is no question that Section 39 of the Kentucky Constitution vests the General Assembly with authority to determine the rules of its own proceedings. See Philpot v. Haviland, Ky., 880 S.W.2d 550 (1994). As noted in my dissent in Philpot v. Patton, Ky., 837 S.W.2d 491 (1992), I firmly believe that this Court cannot tell either house of the General Assembly what *789 system or rules it can enact. In other words, the legislature is free to enact its own legislative and procedural rules and that such action cannot be challenged because of their propriety and wisdom. However, because this is a departure from procedural practice and clearly a substantive provision of the law, the failure to comply with KRS 6.350 is fatal.
It has been held, except that in legislation involving contract rights, that each legislature is entirely independent of its predecessor and is vested with complete authority to amend or repeal existing laws at its pleasure. City of Mt. Sterling v. King, 126 Ky. 526, 104 S.W. 322 (1907). Here, the retirement plan in question is a legal contract. KRS 6.525 relates to the governance of such plan and expressly adopts KRS 21.480, which in pertinent part refers to the pension system as an inviolate contract in which the rights and benefits provided therein shall not be subject to reduction or impairment by alteration, amendment or repeal. The constitution of Kentucky in Section 19, protects state pensioners from the General Assembly unilaterally amending statutes that impact the pension system. The constitution provides that no law impairing the obligation of contracts shall be enacted. See also 16B. Am.Jur.2d Constitutional Law § 721 (1998).
When the interpretation of a statute affects persons other than current members of the General Assembly, the question presented is of necessity a judicial one. See United States v. Smith, 286 U.S. 6, 52 S.Ct. 475, 76 L.Ed. 954 (1932). Here, it is entirely possible that the increase in the pension benefits, although totally justified, could potentially jeopardize pension benefits for retired legislators or other state employees. Cf. Valdes v. Cory, 139 Cal.App.3d 773, 189 Cal.Rptr. 212 (Cal.Ct.App.1983), which indicates that the California legislature was not free to randomly and unilaterally act without actuarial input from the board overseeing the public retirement system. Many other state courts agree. See Dadisman v. Moore, 181 W.Va. 779, 384 S.E.2d 816 (1989), citing cases. The action of the legislature here, which ignores the statute largely without debate or an informed vote by the entire General Assembly, violates many sections of the Kentucky Constitution, including Section Two, which states absolute and arbitrary power does not exist anywhere in the Republic, not even in the largest majority. See also Kentucky Constitution §§ 19 and 25.
This Court declined to extend or apply the holding of Valdes, supra, in Jones v. Bd. of Trustees, Ky. Retirement Systems, Ky., 910 S.W.2d 710 (1995). However, Jones, supra, is distinguishable because here, the General Assembly chose to ignore statutes requiring the actuarial analysis before increasing benefits. In Jones, it was argued that the system had independence to set contribution rates.
I doubt if anyone would seriously challenge the proposition that the General Assembly is not above the law. The law as commonly defined includes statutes as well as constitutional provisions. It is the responsibility of this Court to decide in a proper case, whether the actions of the General Assembly comply with the Constitution of Kentucky, or the laws of this Commonwealth. Certainly, there is a procedure for changing statutes and it is well known and regularly and routinely used by the General Assembly in reaching a different conclusion from the effect of a statute originally enacted. Simply stated, it is repeal by direct action of previous legislative pronouncements.
Moreover, there is the opportunity to permit the people of Kentucky to amend the constitution if the General Assembly so *790 chooses. Respectfully, I do not believe that the General Assembly can repeal an existing statute by implication. "Repeal by implication finds no favor within the courts." See Caterpillar, Inc. v. Brock, Ky., 915 S.W.2d 751, 753 (1996).
I do concur with the view expressed by the majority that the amendment of KRS 21.450 by Section 4 of the House Bill is unconstitutionally vague and impermissibly delegates the legislative authority to an administrative agency without sufficient guidance. See Folks v. Barren County, 313 Ky. 515, 232 S.W.2d 1010 (1950), and many other cases as cited by the majority.
There is a vast difference between substantial compliance and no compliance. Here, the legislature failed to follow the clear and unambiguous language of the statute. The statute is mandatory and not directory. The legislature simply made a mistake in approaching the pressing problem of pension modification. The problem is easily corrected by an appropriate legislative enactment.
NOTES
[1] The Legislators' Retirement Plan is a defined benefit plan because retired legislators are entitled to receive benefits based on a formula from a general retirement fund with no ownership right to an individually maintained retirement account. See KRS 6.520(1) (setting forth the formula for calculation of benefits incorporating years of service). See also Employment Benefit Plans: A Glossary of Terms (Int'l Found. of Employment Benefit Plans 2000) 1 (describing "defined benefit plan" as involving "a definite formula by which the employees' benefits will be measured").
[2] Diemer, unlike the other cited cases, arguably involved the First Amendment because it prohibited the erection of billboards in certain circumstances. Thus, it is distinguishable from those cases that apply the void-for-vagueness doctrine (or some version thereof) outside the context of the First Amendment, the criminal law, and those civil laws with punitive provisions. It is cited here only for its precedential value to the nondelegation question and the light it sheds on the confluence between the two doctrines.
| {
"pile_set_name": "FreeLaw"
} |
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JUNE 13, 2006
No. 05-17168 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 05-20606-CR-ASG
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
RONICTOR JOSEPH,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(June 13, 2006)
Before TJOFLAT, DUBINA and HULL, Circuit Judges.
PER CURIAM:
Ronictor Joseph appeals his 46-month total sentence imposed after his plea
of guilty to illegally reentering the United States after deportation, in violation of 8
U.S.C. § 1326(a) and (b)(2); forgery or false use of a passport, in violation of 18
U.S.C. § 1543; and falsely claiming United States citizenship, in violation of 18
U.S.C. § 911. The sentence was composed of concurrent terms of 46 months’
imprisonment as to Counts One and Two, and 36 months’ imprisonment as to
Count Three.
Joseph was deported to Haiti based on his cocaine conviction. He was
arrested attempting to reenter the United States illegally with a fraudulent passport.
Joseph argues on appeal that his sentence is unreasonable in light of United States
v. Booker, 543 U.S. 220, 125 S.Ct. 738 (2005). His argument is based largely
upon his claim that his case involved “unique circumstances” in that he attempted
to enter the United States because he was receiving threats in Haiti.1 After review,
we affirm.
Sentences imposed under an advisory Guidelines system are reviewed for
unreasonableness. Booker, 543 U.S. at 261, 125 S. Ct. at 765. Following the
1
Joseph also states briefly that removal following his sentence will cause hardship to his
wife and children because realistically they will not be able to join him in Haiti. He does not,
however, expressly challenge the requirement that he surrender for removal following his
incarceration, or cite any authority to show that this was reversible error. Accordingly, this
argument is deemed waived. See United States v. Nealy, 232 F.3d 825, 830-831
(11th Cir. 2000).
2
Booker decision, we have stated that the district court must first correctly calculate
the defendant’s Guidelines range, and then, using the 18 U.S.C. § 3553(a)
sentencing factors, the court can impose a more severe or more lenient sentence as
long as it is reasonable. United States v. Crawford, 407 F.3d 1174, 1179 (11th Cir.
2005).2 “[N]othing in Booker or elsewhere requires the district court to state on the
record that it has explicitly considered each of the § 3553(a) facts or to discuss
each of the § 3553(a) factors.” United States v. Scott, 426 F.3d 1324, 1329 (11th
Cir. 2005). A district court’s statement that it considered the § 3553(a) factors is
sufficient in post-Booker sentences to indicate that it considered the factors. See
id. at 1330. “Review for reasonableness is deferential.” United States v. Talley,
431 F.3d 784, 788 (11th Cir. 2005). “[T]he party who challenges the sentence
bears the burden of establishing that the sentence is unreasonable in the light of
both [the] record and the factors in section 3553(a).” Id.
Joseph acknowledged below that the district court properly calculated the
applicable advisory range under the Guidelines, and does not dispute the
2
The § 3553(a) factors include the available sentences, the applicable Guidelines range
and policy statements, the nature and circumstances of the offense, and the need for the sentence
to (1) reflect the seriousness of the offense, promote respect for the law, and provide just
punishment for the offense, (2) afford adequate deterrence to criminal conduct, (3) protect the
public from further crimes of the defendant, and (4) provide the defendant with needed
correctional treatment. 18 U.S.C. § 3553(a); United States v. Winingear, 422 F.3d 1241, 1246
(11th Cir. 2005).
3
calculation on appeal. See Crawford, 407 F.3d at 1179. Joseph’s advisory
Guidelines range was 46 to 57 months’ imprisonment.
At Joseph’s sentencing hearing, which occurred after the Supreme Court’s
ruling in Booker, the district court heard mitigating factors as to his crime, criminal
and personal history, and family situation. The court stated that it reached the 46-
month total sentence after calculating the Guidelines range and applying it in an
advisory manner. It specified that it reached the sentence after considering, among
other things, the unique circumstances of the case, including the reasons Joseph
committed the crimes, his criminal history, and the nature and seriousness of the
crimes. In fact, Joseph attempted to reenter the United States illegally shortly after
deportation while still on supervised release for his prior cocaine offense.
The district court accepted as true Joseph’s representations as to his situation
in Haiti and acknowledged that “[i]t’s a difficult time in that country.” The court
also stated that it understood that he “want[ed] to be back here with [his] family
and live in some relative safety.” However, it found that Joseph had previously
committed “a serious crime,” specifically, importing cocaine, and was aware that
he was not to return to the United States. The district court found that the 16-level
increase under U.S.S.G. § 2L1.2(b)(1)(A)(i), in particular, was warranted in light
of the recent nature of Joseph’s deportation. It stated that the instant offenses were
4
“major violations of the law,” and that he could have pursued other options even
though that “might have been difficult.”
Accordingly, the district court considered the § 3553(a) factors and
conducted a proper reasonableness inquiry. See Winingear, 422 F.3d at 1246;
Booker, 125 S.Ct. at 766; 18 U.S.C. § 3553(a).
Furthermore, the total term of imprisonment imposed, 46 months, is at the
low end of the advisory Guidelines range and is far lower that the aggregate
statutory maximum sentence available to the district court. See 8 U.S.C. § 1326
(b)(2); 18 U.S.C. § 1543.3 Accordingly, we cannot say the sentence is
unreasonable. See Winingear, 422 F.3d at 1246; 18 U.S.C. § 3553(a). Thus, we
affirm Joseph’s 46-month sentence.
AFFIRMED.
3
We recognize that the statutory maximum sentence for falsely claiming United States
citizenship, in violation of 18 U.S.C. § 911, is 3 years’ imprisonment or 36 months
imprisonment. 18 U.S.C. § 911. However, the statutory maximum sentence for illegally
reentering the United States after deportation, in violation of 8 U.S.C. §§ 1326(a) and (b)(2), is
20 years’ imprisonment, and the statutory maximum sentence for forgery or false use of a
passport, in violation of 18 U.S.C. § 1543, is 10 years’ imprisonment. 8 U.S.C. § 1326 (b)(2); 18
U.S.C. § 1543.
5
| {
"pile_set_name": "FreeLaw"
} |
144 Cal.App.2d 255 (1956)
WILBUR S. LUMMIS, Respondent,
v.
LYNETTE C. LUMMIS, Appellant.
Civ. No. 5432.
California Court of Appeals. Fourth Dist.
Aug. 30, 1956.
Peter T. Rice for Appellant.
Kimball & Smith for Respondent.
BARNARD, P. J.
The plaintiff brought this action for divorce on February 7, 1956, alleging in his complaint that he *256 is and for more than one year last past has been a resident of this state, and for more than three months a resident of the county of San Diego. The defendant filed a demurrer and moved for a change of venue, alleging that at the time of the commencement of the action she was and still is a resident of the county of Los Angeles. Her affidavit in support of the motion alleged that she is a permanent resident of Los Angeles County; that she has adopted that location as her permanent residence; and that she did not reside in San Diego County at the time the action was filed. Nothing is alleged as to how long she had been a resident of Los Angeles County.
[1] The plaintiff filed an affidavit in opposition to the motion alleging that he is a medical doctor, with the rank of captain in the United States Navy and stationed at the United States Naval Hospital at San Diego; that in his capacity as a medical doctor he has a strict schedule to fulfill and is under orders at such establishment; that he is unable to be away from the hospital for any extensive periods of time; and that several of the witnesses necessary to the presentation of his case are also members of the United States Navy, under orders, and unable to be away from their duties for any extensive periods of time.
After a hearing, the court entered an order denying the defendant's motion for change of venue. The defendant has appealed from that order contending that since it was undisputed that her residence was in Los Angeles County at the time this action was filed, the order denying a change of venue is erroneous. She cites a number of older cases supporting that contention, including Bybee v. Fairchild, 75 Cal.App.2d 35 [170 P.2d 54], where it is said "It is also well settled that the normal right of the defendant is to have the action tried in the county of his residence. For the cause to be triable elsewhere the plaintiff must bring himself clearly within the terms of some statutory exception."
Such a statutory exception appears in the 1955 amendments to sections 395 and 397 of the Code of Civil Procedure. The preceding sections of that code name the proper county for trial in numerous actions. Section 395 states the proper county for trial "in all other cases, except as in this section otherwise provided," and subject to the power of the court to transfer actions under certain circumstances. Section 395 was amended in 1955 by inserting therein the following provision: "In an action for divorce, the county in which the plaintiff has been a resident for three months next preceding the commencement *257 of the action is the proper county for the trial of the action." Section 397, stating the cases in which a court may change the place of trial, was also amended in 1955 by adding subdivision 5, which provides that when an action for divorce has been filed in the county in which the plaintiff has resided for three months next preceding the bringing of the action the court may change the place of trial "when the ends of justice would be promoted by the change."
The changes thus made in these two sections in 1955 were proposed to the Legislature by the State Bar as a part of its legislative program. In its report of March, 1955, to the Senate Interim Judiciary Committee, the State Bar pointed out that under existing law in most cases a divorce action was required to be tried in the county of the defendant's residence; that "Generally this removed the action from the locality where the parties maintained their matrimonial domicile and where witnesses and persons have a knowledge of facts bearing upon various issues are apt to be found ..."; that the proposed change in section 395 would remove the defendant's absolute right to have the venue changed to his county of residence in such a case; and that the proposed change in section 397 was sufficiently flexible to permit the court to order a change of venue where the ends of justice would be promoted by such a change.
Apparently, these statutes were changed for the specific purpose of making the county where the action is filed the proper county for trial, in such a case as this, except where the ends of justice would be promoted by a change. Whether the ends of justice would be promoted by a change of venue must necessarily rest largely in the discretion of the trial court, to be determined upon the facts which are there made to appear. No abuse of discretion here appears, and there is nothing in the record before us which would compel a different conclusion. Under these statutes as amended the appellant did not have an absolute right to a change of venue and, under the showing made, the order denying her motion may not be disturbed.
The order appealed from is affirmed.
Mussell, J., and Burch, J. pro tem., [fn. *] concurred.
NOTES
[fn. *] *. Assigned by Chairman of Judicial Council.
| {
"pile_set_name": "FreeLaw"
} |
FILED
NOT FOR PUBLICATION NOV 30 2009
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T O F AP PE ALS
FOR THE NINTH CIRCUIT
MARCOS PINEDA-OREANA, No. 07-73334
Petitioner, Agency No. A028-572-929
v.
MEMORANDUM *
ERIC H. HOLDER Jr., Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted November 17, 2009 **
Before: ALARCÓN, TROTT, and TASHIMA, Circuit Judges.
Marcos Pineda-Oreana, a native and citizen of El Salvador, petitions for
review of the Board of Immigration Appeals’ (“BIA”) order denying his motion to
reopen deportation proceedings based on ineffective assistance of counsel. We
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
RB/Research
have jurisdiction pursuant to 8 U.S.C. § 1252. We review for abuse of discretion
the denial of a motion to reopen. Mohammed v. Gonzales, 400 F.3d 785, 791 (9th
Cir. 2005). We deny the petition for review.
The BIA did not abuse its discretion in denying Pineda-Oreana’s motion to
reopen as untimely because it was filed more than 16 years after the BIA’s April
23, 1990, order dismissing his appeal, and more than ten years after the September
30, 1996, statutory motions deadline. See 8 C.F.R. § 1003.2(c)(2) (motion to
reopen deportation proceedings must be filed within 90 days of the final
administrative order, or September 30, 1996, whichever is later). The BIA acted
within its discretion in concluding that the evidence submitted with the motion to
reopen failed to establish the due diligence required to warrant tolling of the
motions deadline. See Iturribarria v. INS, 321 F.3d 889, 897 (9th Cir. 2003)
(equitable tolling is available to a petitioner who is prevented from filing due to
deception, fraud or error, and exercises due diligence in discovering such
circumstances).
PETITION FOR REVIEW DENIED.
RB/Research 2 07-73334
| {
"pile_set_name": "FreeLaw"
} |
602 S.W.2d 530 (1980)
Ex parte Henry A. MOSER.
No. 63811.
Court of Criminal Appeals of Texas, En Banc.
March 5, 1980.
*532 Joseph A. Calamia, El Paso, for appellant.
Steve W. Simmons, Dist. Atty. and James Thomas Carter, Asst. Dist. Atty., El Paso, Robert Huttash, State's Atty. and Alfred W. Walker, Asst. State's Atty., Austin, for the State.
Before the court en banc.
OPINION
ROBERTS, Judge.
This petition for habeas corpus relief attacks subsection 3f(b) of the Adult Probation, Parole, and Mandatory Supervision Law (V.A.C.C.P., Article 42.12), which provides:
If there is an affirmative finding that the defendant convicted of a felony of the second degree or higher used or exhibited a firearm during the commission or flight from commission of the offense and the defendant is granted probation, the court may order the defendant confined in the Texas Department of Corrections for not less than 60 and not more than 120 days. At any time after the defendant has served 60 days in the custody of the Department of Corrections, the sentencing judge, on his own motion or on motion of the defendant, may order the defendant released to probation. The Department of Corrections shall release the defendant to probation after he has served 120 days.
The applicant was indicted for intentionally and knowingly causing the death of a named individual by shooting him with a pistol on or about May 19, 1979. A jury found the applicant "guilty of murder, as charged in the indictment." The jury assessed a punishment of ten years' confinement, and it recommended that the applicant be placed on probation. The trial court included in the judgment the following paragraph:
The jury verdict in this case being an affirmative finding that the defendant is convicted of a felony of the first degree and that he used a firearm during the commission of the offense and the court further also affirmatively finding that the defendant is convicted of a felony of the first degree and that he used a firearm in the commission of the offense, and the defendant having been granted probation, the Court accordingly, under the provisions of Art. 42.12.3f(b) of the Code of Criminal Procedure, orders that the defendant be confined in the Texas Department of Corrections for not less than sixty (60) nor more than one hundred twenty (120) days.
By the authority of that order, the applicant is now in the custody of the Texas Department of Corrections.
We first take up the applicant's claim that subsection 3f(b) is unconstitutional on its face because it gives the trial court "unbridled" and standardless discretion to order confinement. This claim cannot be read literally, for the trial court is bridled by the requirements that the defendant have been convicted of a felony of the second (or a higher) degree and that there be an affirmative finding that he used or exhibited a firearm during the commission or flight from the commission of the offense. Also, general standards are set out in the Penal Code.[*] We construe *533 the claim to be that other standards are required by the Constitution. They are not. See Kemner v. State, 589 S.W.2d 403, 409 (Tex.Cr.App.1979). No more discretion is given here than in all other sentencing decisions. The statute is valid on its face.
The applicant advances several claims that the application of the statute to him was unconstitutional. The first of these is that the procedure infringed on the right to trial by jury which is guarantied by Article I, Section 15, of the Texas Constitution. We have held frequently that that right does not include any right to have a jury assess punishment. E. g., Emerson v. State, 476 S.W.2d 686 (Tex.Cr.App.1972); Jones v. State, 416 S.W.2d 412 (Tex.Cr.App. 1967). There is even less merit in the applicant's claim that the procedure violates a statutory "right" to have a jury assess punishment under the procedure created by V.A.C.C.P., Article 37.07. The Legislature having statutorily created assessment of punishment by the jury, the Legislature may alter or abolish that procedure (within the bounds of due process and other constitutional strictures). The enactment of subsection 3f(b) to give the trial court a power it did not previously possess did not infringe on the applicant's right to jury trial.
The applicant next claims that he has been denied due process by being "incarcerat[ed] for an uncharged crime." We find no merit in this argument. There was but one crime. The indictment correctly charged the commission of murder; that murder is a felony of the first degree is a matter of law, not a fact that must be pleaded and proved. The indictment also alleged that the applicant caused the death "by shooting . . . with a pistol." That was a sufficient allegation that the applicant used a firearm during the commission of the offense. Everything was alleged that was required to be proved to subject the applicant to confinement under subsection 3f(b).
Also alleged to be a denial of due process is the fact that the court's charge did not include an instruction or a special issue concerning the use of a firearm. The first premise of the applicant's argument is that there was no "affirmative finding" of use of a firearm, which the statute requires. We cannot agree. The applicant was indicted for intentionally and knowingly causing the death of a named individual by shooting him with a pistol. The only theory of guilt submitted in the court's charge was that the applicant intentionally or knowingly caused the death of the individual by shooting him with a pistol. The jury found the applicant "guilty of murder as charged in the indictment." In these circumstances, the verdict necessarily included a finding that the applicant committed murder by shooting the individual with a pistol. Therefore this verdict must amount to an affirmative finding that the applicant used a firearm in the commission of the offense. We should not be understood to hold that this method was the only, or even the better, way to make such a finding. Different indictments, instructions, or forms of verdict obviously might make such a method inadequate to comply with the statute. Nor should we be understood to say that instructions or special issues would be improper or unnecessary in a given case; these questions are not presented today. Our holding is that in this case there was not a violation of the statutory requirement of an affirmative finding, much less a denial of due process.
*534 The final claim is not of constitutional dimension. The applicant would have us hold that incarceration under subsection 3f(b) is illegal because of the last sentence in Section 3a of the same Law: "If probation is granted by the jury the court may impose only those conditions which are set forth in Section 6 hereof." (Incarceration is not among the conditions set forth in Section 6.) The most obvious flaw in this claim is that the incarceration authorized by subsection 3f(b) is not a condition of probation. There is no conflict between section 3a and subsection 3f(b) of the Law.
The relief requested is denied.
NOTES
[*] "[T]he provisions of this code are intended. . . to achieve the following objectives:
"(1) to insure the public safety through;
(A) the deterrent influence of the penalties hereinafter provided;
(B) the rehabilitation of those convicted of violations of this code; and
(C) such punishment as may be necessary to prevent likely recurrence of criminal behavior;
* * * * * *
"(3) to prescribe penalties that are proportionate to the seriousness of offenses and that permit recognition of differences in rehabilitation possibilities among individual offenders;
* * * * * *
"(5) to guide and limit the exercise of official discretion in law enforcement to prevent arbitrary or oppressive treatment of persons accused or convicted of offenses . . . ." V.T.C.A., Penal Code, Sec. 1.02.
| {
"pile_set_name": "FreeLaw"
} |
749 F.Supp. 128 (1990)
In the Matter of the Complaint of McDONOUGH MARINE SERVICE, A DIVISION OF MARMAC CORPORATION and Newpark Environmental Services, Inc., (formerly, Newpark Waste Treatment Systems), as Owner and Charterers of Barge ABC-701, for Exoneration from or Limitation of Liability.
Civ. A. No. 89-2167.
United States District Court, E.D. Louisiana.
October 22, 1990.
*129 Delos E. Flint, Jr., George J. Fowler, III, Rice, Fowler, Kingsmill, Vance, Flint & Booth, New Orleans, La., for McDonough Marine Service.
David S. Bland, Henry A. King, Nesser, King & LeBlanc, New Orleans, La., for Newpark Environmental Services, Inc.
Thomas Keasler Foutz, Gauthier & Murphy, Metairie, La., Robert Burke Keaty, Keaty & Keaty, Michael Joseph Breaux, Law Office of David M. Kaufman, Lafayette, La., for Unidentified Parties, for all persons who have claims as a result of death of Ernest A. Stein, Jr. and Michael J. Bruno.
Robert Burke Keaty, Michel P. Wilty, Thomas Vincent Alonzo, Michael Joseph Breaux, Law Office of David M. Kaufman, Lafayette, La., for Carrie W. Stein.
Jeanmarie Lococo, Donald Ogden Collins, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, La., for movant Dravo Corp.
David Joseph Bourgeois, Duplass, Witman & Zwain, Metairie, La., for claimant Aetna Cas. & Sur. Co.
Thomas Keasler Foutz, Wendell H. Gauthier, Gauthier & Murphy, Metairie, La., for Heidi Bruno.
Michael John Maginnis, Timothy Patrick Hurley, McGlinchey, Stafford, Cellini & Lang, New Orleans, La., for claimant Donovan Marine Inc.
MEMORANDUM AND ORDER
ARCENEAUX, District Judge.
The court has received a motion to enjoin state court proceedings filed by claimant, Dravo Corporation ("Dravo"), in the above-captioned matter. Having considered claimant Dravo's memoranda, the opposition memoranda filed by representatives of two deceased employees of Southern Shipbuilding Corporation ("Southern") and Aetna Casualty & Surety Company ("Aetna"), and the applicable law, the court finds the motion to be without merit.
I. BACKGROUND
This case arises out of the deaths of Michael Bruno and Ernest Stein, employees of Southern at its yard in Slidell, Louisiana. On November 14, 1988, Southern allegedly assigned the decedents to remove the manhole covers of Barge ABC-701 for venting and aerating the barge's compartments. While allegedly checking for leaks in the compartments, the two men apparently became unconscious and died of asphyxiation.
Plaintiffs, McDonough Marine Service ("McDonough"), as owner of Barge ABC-701, and Newpark Environmental Services, Inc. ("Newpark"), as bareboat charterer and/or owner pro hac vice of Barge ABC-701, filed a complaint in this court for exoneration from and/or limitation of liability on May 13, 1989. Plaintiffs filed this complaint pursuant to the Limitation of Vessel Owner's Liability Act, 46 U.S.C. App. §§ 181-189 (1988) (the "Limitation Act" or the "Act"), Rule 9(h) of the Federal Rules of Civil Procedure, and Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims (the "Supplemental Admiralty Rules"). In conjunction with this complaint, the plaintiffs have certified the vessel's value to be $121,000. Furthermore, pursuant to plaintiffs' complaint, the court issued an order on October 17, 1989, restraining any and all other actions or proceedings against McDonough and Newpark.
The personal representatives of the deceased individuals filed answers to the plaintiffs' complaint. The decedents' representatives also filed actions in the Civil District Court for the Parish of Orleans.[1]*130 In addition, Aetna filed an answer in this court and instituted litigation in the Civil District Court for the Parish of Orleans to recover workers' compensation benefits allegedly paid as a result of these deaths.[2] Dravo Corporation, as the manufacturer of Barge ABC-701, was named a defendant in all three state court proceedings and joined this limitation action as a claimant.
Dravo now brings a motion to enjoin further proceedings in the state court actions. Dravo argues that the exclusive jurisdiction of the federal district court sitting in admiralty to hear limitation proceedings requires all other actions and proceedings to cease. In its memoranda, Dravo recognizes that at least two exceptions to this rule apply where (1) the parties stipulate that the claims against the shipowner do not exceed the value of the limitation fund, and (2) where only a single claim has been made against the vessel owner and the claimant stipulates to limit the vessel owner's liability. Dravo, however, urges the court to find that these exceptions do not apply in the present action.[3] The opposition maintains that Dravo, as manufacturer of Barge ABC-701, cannot seek the Act's protections and, in the alternative, that the stipulations adequately protect the plaintiffs in the limitation proceeding from excess liability. The court now turns to the merits of the arguments.
II. ANALYSIS
A. The Limitation of Liability Act
Dravo first argues that this court must retain exclusive jurisdiction and maintain a concursus, or a concourse of the parties,[4] to prevent duplicity of litigation. Memorandum in Response to Opposition to Motion to Enjoin State Court Actions at 5-6. The court finds it necessary to address Dravo's arguments in support of its motion to enjoin by examining the purposes for which Congress enacted the Limitation Act in the context of this case. In so doing, the court first addresses the issue of whether Dravo, as manufacturer of the vessel in question, may object to further proceedings in the state court where neither the vessel owner, the owner pro hac vice, nor their insurers have been named as parties and no evidence exists that any such party may be subject to liability exceeding the value of the limitation fund.
This court, in commenting on the purposes of the Limitation Act, has noted that:
The Limitation Act serves the obvious purpose of limiting the liability of shipowners, and also protecting the shipowner from the risk of inconsistent judgments arising from a multiplicity of actions, and enabling the admiralty court to equitably distribute a limited fund among a number of claimants.... [T]he Act was also designed to foster the growth of the shipping industry.
Ray v. Lykes Bros. S.S. Co., 626 F.Supp. 120, 124 (E.D.La.1985) (citations omitted), vacated on other grounds, 805 F.2d 552 (5th Cir.1986). A shipowner invokes the Act's provisions by filing a complaint for exoneration from or limitation of liability. 46 U.S.C.App. § 185 (1988). Upon compliance with the statute's requirements, the Limitation Act provides that "all claims and *131 proceedings against the owner with respect to the matter in question shall cease." Id. (emphasis added). In addition, a bareboat charterer such as Newpark may be deemed an owner pro hac vice and seek protection under the Act. See id. § 186. The Act, therefore, clearly provides the federal court sitting in admiralty with the power necessary to protect shipowners and, in some cases, charterers, who face multiple claims arising from a single marine disaster.
Rule F of the Supplemental Admiralty Rules further defines the procedural requirements to invoke the Act's protections. This rule provides that "[o]n application of the plaintiff the court shall enjoin the further prosecution of any action or proceeding against the plaintiff or plaintiff's property with respect to any claim subject to limitation in the action." Supplemental Admiralty Rule F(3). Hence, a shipowner clearly possesses both the right to protection from suits outside the limitation proceeding and the right to seek the intervention of the federal court to enjoin any such suits.
The court recognizes, however, that not even the vessel owner may use the Act's provisions "as an offensive weapon by which the shipowner could deprive suitors of their common-law rights." Lake Tankers Corp. v. Henn, 354 U.S. 147, 152, 77 S.Ct. 1269, 1272, 1 L.Ed.2d 1246 (1957). This action presents a situation in which the manufacturer of the barge, Dravo, has moved to enjoin state court actions that do not include the shipowner, the owner pro hac vice, or their insurers as parties. The court notes that "[t]he owner who may limit is usually the person with legal title to the vessel.... The term owner is defined to include the charterer who actually `mans, victuals, and navigates the vessel,' which is interpreted to mean demise and bareboat charterers." T. Schoenbaum, Admiralty and Maritime Law § 14-2 (Prac. ed.1987) (footnotes omitted). Plaintiffs, McDonough and Newpark, fall under the Limitation Act's protections because they respectively were the owner and bareboat charterer of Barge ABC-701 at the time of the incident in question. Conversely, Dravo cannot seek the Act's protections through a stay of state court proceedings against it because as the manufacturer of Barge ABC-701, it has no right to do so.
No claimant in this limitation proceeding has filed claims in the state court proceedings against McDonough, Newpark, or their insurers. Moreover, the parties who filed the limitation of liability of complaint have not objected to the prosecution of the suits in the state court. This court, therefore, holds that Dravo, as manufacturer of Barge ABC-701, may not invoke the provisions of the Limitation Act to enjoin the state court actions filed against it.
B. The Necessity of a Concursus
Dravo specifically argues that this court must retain exclusive jurisdiction because no exception to the necessity of a concursus applies and/or the stipulations filed by the decedents' representatives do not sufficiently protect McDonough and/or Newpark from claims that exceed the limitations fund's value. Memorandum in Response to Opposition to Motion to Enjoin State Court Actions at 5-6. In light of the above discussion, the court doubts whether Dravo may raise such objections. However, in an abundance of caution, the court will consider the necessity of a concursus under the facts present.
This court, in addressing the effect of the limitation proceeding on other actions, has noted that:
The plain language of 46 U.S.C. § 185 appears to give the shipowner an absolute right to localize proceedings in admiralty by petition for limitation. Notwithstanding this, the original, exclusive jurisdiction of the district court is modified by 28 U.S.C. § 1333 which grants jurisdiction, but also provides for the "saving to suitors in all cases all other remedies to which they are otherwise entitled."
Ray, 626 F.Supp. at 124. The savings to suitors clause, therefore, permits federal courts to deviate from the Limitation Act's statutory scheme and allows a party to pursue claims in state courts. For some time, the exceptions to the Act's provisions have consisted of two types of situations. See generally 3 A. Jenner, E. Flynn & J. Loo, Benedict on Admiralty §§ 51-52 (7th ed.1989 & Supp.1989) (explaining situations *132 allowing modifications to Act's stay of other proceedings). In permitting these exceptions, the courts have attempted to achieve a balance between the necessity of a concursus in the limitation proceeding and the right of a plaintiff to a jury and to state court remedies under the savings clause.
First, the courts have permitted actions to proceed in state court where a single claimant in a limitation proceeding stipulates to the federal court's jurisdiction over the limitation of liability issues. Langnes v. Green, 282 U.S. 531, 541, 51 S.Ct. 243, 247, 75 L.Ed. 520 (1931); see In re Complaint of Midland Enters., Inc., 886 F.2d 812, 814 (6th Cir.1989); In re Complaint of Dammers & Vanderheide & Scheepvaart Maats Christina B.V. ("Dammers & Vanderheide"), 836 F.2d 750, 755 (2d Cir.1988); In re Mister Wayne, 729 F.Supp. 1124, 1126 (E.D.La.1989). In this case, multiple claimants have filed in the limitation proceeding seeking damages as a result of two deaths and, hence, the first exception does not apply.
The second situation involves multiple claimants where the aggregate claims do not exceed the limitation fund. Lake Tankers Corp. v. Henn, 354 U.S. 147, 77 S.Ct. 1269, 1 L.Ed.2d 1246 (1957); In re Mister Wayne, 729 F.Supp. at 1126; Ray, 626 F.Supp. at 124. McDonough and Newpark have certified the value of the barge to be $121,000. The court finds, and no party has raised as a contested issue, that one of the wrongful death claims on its own could exceed the value of the limitation fund.[5] This case, therefore, does not fall under the second exception because multiple claimants have asserted claims in excess of the fund's value.
The U.S. Court of Appeals for the Fifth Circuit addressed the multiple claimant, inadequate fund scenario on appeal in Pershing Auto Rentals, Inc. v. Gaffney, 279 F.2d 546 (5th Cir.1960), and found that the district court had erred in modifying its injunction to allow two out of four claimants to proceed in state court actions against the shipowner. Id. at 550-51. In contrast to the instant case, the two claimants in Gaffney, however, instituted actions directly against the vessel owner in state courts during the pendency of the limitation proceeding. Id. at 548-49. As stated previously, this case involves state court actions in which neither the vessel owner, the owner pro hac vice, nor their insurers have been named as parties in any manner. Thus, the claimants have not violated the injunction issued in these proceedings on July 17, 1989. Further, unlike the vessel owner in Gaffney, neither McDonough nor Newpark have objected to the state court proceedings.
The court, therefore, agrees with claimant Dravo's contention that the two exceptions discussed above do not apply in this case but finds concursus to be unnecessary. The parties, in addressing the merits of Dravo's motion, have discussed this second exception in detail under the analysis applied in Judge Feldman's order and reasons in Kattelman v. Otis Engineering Corp., 701 F.Supp. 560 (E.D.La.1988), and Kattelman v. Otis Engineering Corp., 696 F.Supp. 1111 (E.D.La.1988). In the court's view, the focus that the parties have placed on the Kattelman decisions is misplaced.
Judge Feldman, in the Kattelman case, conducted an analysis of the adequacy of *133 the stipulations filed by claimants to that multiple claim, inadequate fund suit arising out of a single death. Kattelman, 701 F.Supp. at 562-65. Dravo urges this court to find that Kattelman does not apply because the instant action involves two deaths and the actions arising out of these deaths requiring the court to address all issues arising out of this incident. Memorandum in Response to Opposition to Motion to Enjoin State Court Proceedings at 3-6. In the alternative, Dravo argues that the stipulations do not adequately protect the plaintiffs in this limitation proceeding. Id. at 6. The court agrees in part with Dravo's contentions but finds it unnecessary to retain exclusive jurisdiction over suits against non-vessel owners or to determine the adequacy of the stipulations filed by the parties in this proceeding where the state court actions have not been instituted against the shipowner, the owner pro hac vice, or the insurer of either party.
The parties to the Louisiana state court actions did not need and did not seek this court's permission to proceed against the party defendants in the state actions. In support of this proposition, the court in In re Brent Towing Co., 414 F.Supp. 131 (N.D.Fla.1975), confronted the issue of whether the insurer of a vessel owner may be joined in a separate action. Id. at 132-33. While the court held that such an action could not be maintained because the shipowner would be an indispensable party to such suit, the Act's provisions did not preclude a separate remedy that any party to the limitation proceeding would have against other parties not protected by the statute. Id. at 133; see Annotation, Effect on Other Proceedings of Shipowner's Petition in Admiralty for Limitation of Liability Under 46 USCS §§ 183 et seq., 47 A.L.R.Fed. 490, 514 (1980). Thus, under the present circumstances, this court also finds that it cannot enjoin proceedings in which claimants seek remedies against parties not subject to the Limitation Act's protections.
CONCLUSION
In light of the direct conflict between the savings to suitors clause and the Limitation Act, this court "must strive whenever possible to promote the policies underlying both provisions." Dammers & Vanderheide, 836 F.2d at 760. Furthermore, in the Henn case, the U.S. Supreme Court stated that where "[t]he state court proceeding could have no possible effect on the petitioner's claim for limited liability in the admiralty court ... the provisions of the Act ... do not control." Henn, 354 U.S. at 153, 77 S.Ct. at 1273. This court, therefore, will not enjoin state court proceedings where a possibility does not exist at this time that a judgment or award may be rendered in state court to deprive McDonough, Newpark, or their insurers of the Limitation Act's protections or this court of its exclusive jurisdiction over the limitation proceeding.
The Limitation Act's clearly defined purposes do not permit a vessel manufacturer seeking indemnification arising out of a marine disaster to invoke its statutory protections. The court, therefore, will not enjoin the state court actions in question but retains exclusive jurisdiction over all matters and issues pertaining to the limitation proceedings at hand and the rights of McDonough and Newpark to seek limitation and/or exoneration from liability.
NOTES
[1] Heidi Bruno, the widow of Michael Bruno, filed a petition for damages on behalf of herself and her minor children against Dravo Corporation, Nashville Bridge Company a/k/a Nabrico, American Shipbuilding Company, and Donovan Marine, Inc. on November 14, 1989, in Civil Action No. 89-24746. Carrie Stein, the widow of Ernest Stein, filed a petition for damages on behalf of herself and her minor children against Dravo Corporation, Donovan Marine, Inc., Nashville Bridge Company, Nabrico, Nabrico Korea, and The American Ship Building Company in Civil Action No. 89-24222.
[2] Aetna filed a petition for damages against Dravo Corporation, Donovan Marine, Inc., Nashville Bridge Company, Nabrico, Nabrico Korea, and The American Shipbuilding Company.
[3] The court notes that neither McDonough, Newpark, nor their insurers have been named as defendants in the state court proceedings. Furthermore, neither McDonough nor Newpark, the plaintiffs in this limitation proceeding, have filed any supporting or opposition memoranda with regard to Dravo's motion to enjoin.
[4] The Act specifically authorizes the shipowner to bring all claims instituted against him together, or into concourse, before the federal court sitting in admiralty. Maryland Casualty Co. v. Cushing, 347 U.S. 409, 414, 74 S.Ct. 608, 610, 98 L.Ed. 806 (1954). In Cushing, the U.S. Supreme Court noted that "the heart of this system is a concursus of all claims to ensure the prompt and economical disposition of controversies in which there are often a multitude of claimants." Id. at 415, 74 S.Ct. at 611 (emphasis in original). The Limitation Act bestows the benefits of a concursus on the plaintiff in a limitation proceeding.
[5] The court notes that all three plaintiffs in the state court proceedings have submitted a stipulation to this court. In this stipulation, the decedents' representatives and Aetna, the compensation carrier, have recognized the right of McDonough and Newpark to seek limitation and this court's exclusive jurisdiction over all issues pertaining to the limitation proceeding. Further, the parties stipulate that they will not seek to enforce a judgment or recovery obtained in any state court action or proceeding in excess of the limitation fund's value, until such time as this court adjudicates the complaint for limitation of liability. The parties to the stipulation also waive any right to claim res judicata or issue preclusion based on a judgment or ruling in any state court. Finally, the decedents' representatives and Aetna stipulate to the priority of reimbursement of or indemnification for attorneys' fees or costs over any of their claims.
The court will not address whether these stipulations provide sufficient protection to McDonough and Newpark because Dravo does not possess a right to invoke the Act's injunction provision. The court, therefore, finds the parties arguments over the adequacy of the stipulations to be irrelevant.
| {
"pile_set_name": "FreeLaw"
} |
50 Wn. App. 481 (1988)
749 P.2d 181
THE STATE OF WASHINGTON, Respondent,
v.
ANTHONY WILLIAM TAYLOR, Appellant.
No. 18110-6-I.
The Court of Appeals of Washington, Division One.
February 1, 1988.
Edward E. Gibson, for appellant.
Norm Maleng, Prosecuting Attorney, and Linda Jacke, Deputy, for respondent.
MUNSON, J.
Anthony W. Taylor appeals his convictions for first degree burglary and first degree assault, contending the trial court erred in (1) admitting evidence of a pretrial photographic identification by the victim and (2) excluding the proposed testimony of his expert witness as to factors affecting the reliability of eyewitness identification. We reverse and remand for a new trial.
Facts pertinent to this appeal are as follows: Late in the evening of June 4, 1985, Frank Price, a 79-year-old widower, was awakened by a noise and his dog's barking. He got up, looked around the house, and went back to bed. When he was reawakened by his dog's growling, he got up, turned on the light above his bed, went to the foot of the bed, and was confronted by a man pointing a gun at him. Mr. Price was standing 6 to 8 feet away from the man. He could not see the man's face because he was holding the gun directly in front of his face. The man fired the gun twice, but it misfired. He then asked Mr. Price where he kept his money; he told him it was in the lower drawer in *483 the front bedroom. The man turned away and said something to another person, but kept the gun pointed at Mr. Price. He then walked over to Mr. Price and shot him between the eyes. Mr. Price was looking down when he was shot; the bullet lodged in his neck. Later, $680 was found missing from the front bedroom.
Mr. Price was able to crawl to his next-door neighbor's for help at approximately 11:30 p.m. The neighbors called 911; the police and an aid car arrived shortly thereafter. Mr. Price described his assailant to a police officer as a white male, 35 years of age, 5 feet 8 inches tall, and with long hair. He told the officer he did not know the assailant.
Detective Glen Gilbert compiled 29 arrest photographs to show Mr. Price. Although he usually uses only 6 photos, he chose 29 because he had no idea of the intruder's identity and was seeking identification factors. He did not contemplate that "the suspect" was within those photographs. He admitted in all probability none of those pictured was 35 and they were probably considerably younger. Two of the photos were of Mr. Taylor; one other man also appeared twice. The detective included Mr. Taylor's photos because he was told by another detective, who had had contact with Mr. Taylor, that he was a good suspect. One of the photos of Mr. Taylor was taken in 1981 and the other about a week before this incident.
Detective Gilbert visited Mr. Price in the hospital on June 7. He testified Mr. Price's face and nose were swollen, one eye was completely shut, the other eye barely open, he had an I.V. in his arm, a mask on his face, and his speech was slow and garbled. The hospital listed his condition as critical. Mr. Price carefully looked at the photographs and set four aside. He studied the four he had set aside and picked Mr. Taylor's photo, taken a week before this incident, and commented, "that's him, but I don't remember the mustache." Mr. Taylor was arrested later that day.
In an effort to confirm this identification and to satisfy himself of Mr. Price's selection, Detective Gilbert returned to the hospital 3 days later and again showed Mr. Price the *484 same 29 photographs. The detective testified Mr. Price was feeling better, the swelling had gone down, and both eyes were open. Also at that time, the detective took a taped statement from Mr. Price advising him that he had been here the previous Friday and showed him the photographs; in response to the detective's question as to how many of the photographs he had originally removed from the "stack," Mr. Price replied six. After the detective told him he had selected only four, Mr. Price identified Mr. Taylor's photograph, but again stated he could not recall the mustache. Detective Gilbert testified Mr. Price was certain he had correctly identified his assailant.
At trial, Mr. Price testified that the shooting had affected his eyesight, his senses of smell and taste, and left one side of his face paralyzed. He also had double vision in his left eye. He remembered having been shown the photographs one time, not two, and stated he was "fairly sure" he had chosen the photo of the man who had shot him. The prosecutor brought Mr. Taylor forward to stand in front of Mr. Price. When asked if this was the man who had shot him, Mr. Price replied: "His eyes look a little like the man who shot me, but I don't know if he had a mustache. It looks a lot like him. I'm not positive this is the man." When asked how sure he was, Mr. Price said "80 percent."
There is other testimony that Mr. Taylor worked at several fast food restaurants sometimes frequented by Mr. Price; that Mr. Price lived within a few blocks of Mr. Taylor's residence; that experts were unable to identify any screwdriver marks on Mr. Price's window with the screwdrivers found in Mr. Taylor's possession and did not find any paint chips or other materials from Mr. Price's house on Mr. Taylor's clothing. The police had found some cigarette butts on Mr. Price's lawn which were of the same generic brand as a cigarette package found in Mr. Taylor's car. However, there was no evidence of a saliva test or any other type of test that would connect the cigarette butts from Mr. Price's curtilage to Mr. Taylor.
*485 Mr. Taylor's defense largely consisted of an alibi, supported by his wife and her mother, that he had been home on the night of the shooting. There is also testimony Mr. Taylor had gone to a service station where he worked to investigate a robbery. There was some confusion as to whether this occurred on June 3 or June 4. However, it must be conceded the crux of the case is the identification of Mr. Taylor by Mr. Price.
[1] Mr. Taylor first contends the trial court erred in admitting evidence of the pretrial photographic identification by Mr. Price. Such a procedure may violate due process if the procedure, under the totality of circumstances, is "so impermissibly suggestive as to give rise to a very substantial likelihood of irreparable misidentification." State v. Hilliard, 89 Wn.2d 430, 438, 573 P.2d 22 (1977) (quoting Simmons v. United States, 390 U.S. 377, 384, 19 L.Ed.2d 1247, 88 S.Ct. 967 (1968)). Although the findings of the trial court are of great significance, this court must independently evaluate the evidence. State v. Rogers, 44 Wn. App. 510, 515, 722 P.2d 1349 (1986). Reliability is the linchpin in determining the admissibility of pretrial identifications. Manson v. Brathwaite, 432 U.S. 98, 114, 53 L.Ed.2d 140, 97 S.Ct. 2243 (1977); State v. Hanson, 46 Wn. App. 656, 664, 731 P.2d 1140 (1987). We must first determine whether the procedure was impermissibly suggestive; if so found, then we must review the totality of the circumstances to determine whether that suggestiveness created a substantial likelihood of irreparable misidentification. State v. Traweek, 43 Wn. App. 99, 103, 715 P.2d 1148, review denied, 106 Wn.2d 1007 (1986); State v. McDonald, 40 Wn. App. 743, 746, 700 P.2d 327 (1985).
We do not find the photographic procedure to have been impermissibly suggestive. First, although the photographs displayed probably did not match the initial description given by Mr. Price, the purpose of the display was not to identify a suspect, but was an effort to compare facial characteristics and perhaps obtain a composite description that would ultimately identify the assailant. Thus, the number *486 29 was arbitrarily selected, compared to the usual 6 used in a photographic montage. The persons pictured, though all Caucasians, had varying facial features and lengths of hair; some had facial hair, others did not. There was nothing to distinguish this defendant's photograph from any of the others. Although they all contained the date they were taken (the dates were covered when the photographs were introduced as exhibits at trial), that does not cause the display to be impermissibly suggestive.
Given the light color of Mr. Taylor's mustache, it is understandable why Mr. Price might not have observed it while confronting an intruder pointing a gun at him in his bedroom shortly after 11 p.m. While there is a difference in the age description given and Mr. Taylor's true age, we find nothing unusual about that. Last, although Mr. Price claimed his assailant had long hair, a 79-year-old may have his own interpretation of what is long hair and what is not.
Second, the fact that two of the photographs included in the stack were of Mr. Taylor is not significant. The two photographs were taken 4 years apart and Mr. Taylor's appearance had changed considerably. Furthermore, the fact that these were 2 of 29, not 2 of 4 or 6, reduces the chance that the repetition is suggestive. Thus, under these circumstances, the fact Mr. Taylor was pictured twice would not make Mr. Price more likely to choose him.
Third, the fact the second identification involved the same 29 photographs, in and of itself, is not impermissibly suggestive. Although we recognize that recurrent photographic identification procedures may be suggestive in that they increase the risk of misidentification,[1] that is not always true. Considering Mr. Price's poor condition the first time the photos were shown to him and the fact the officers had very little other than Mr. Price's identification, it was *487 reasonable for the detective to attempt to verify the identification when Mr. Price's condition improved. Furthermore, Mr. Price only remembers one visit by Detective Gilbert. Under these circumstances, we do not find the second visit to have been impermissibly suggestive. Having so found, we need not determine whether it created a substantial likelihood of irreparable misidentification. We find no error.
Mr. Taylor next contends the trial court erred in excluding the proposed testimony of Dr. Geoffrey Loftus, a psychologist, as to factors affecting the reliability of eyewitness testimony. His offer of proof indicated Dr. Loftus would testify as to the effects of stress (including violence and fear), age, and weapon focus on human memory and perception. Also, he would explain the doctrine of unconscious transference whereby a witness may recognize a person because he saw him elsewhere around the time of the crime and now mistakenly identifies that person as having committed the crime. There was nothing in the offer of proof relating to Mr. Price's individual characteristics since Dr. Loftus neither had interviewed Mr. Price nor was overly cognizant of the facts of this crime.
ER 702 provides:
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.
First, the admissibility of expert testimony is always within the sound discretion of the trial court and its admissibility or denial will be reversed only on an abuse of that discretion. Group Health Coop. of Puget Sound, Inc. v. Department of Rev., 106 Wn.2d 391, 397, 722 P.2d 787 (1986). "`If the reasons for admitting or excluding the opinion evidence are "fairly debatable", the trial court's exercise of discretion will not be reversed on appeal.'" Group Health, at 398 (quoting Walker v. Bangs, 92 Wn.2d 854, 858, 601 P.2d 1279 (1979)).
*488 For this testimony to be admissible under ER 702, (1) the witness must qualify as an expert, (2) the opinion must be based upon an explanatory theory generally accepted in the scientific community, and (3) the testimony must be helpful to the trier of fact. Here, the State does not challenge factors (1) and (2).[2] It did challenge factor (3) and the trial court excluded Dr. Loftus' testimony finding it would not assist the jury because the weaknesses in the witness' identification could be brought out in cross examination. This view of expert testimony on the unreliability of eyewitness identification is in accord with the view of the Ninth Circuit. See United States v. Langford, 802 F.2d 1176, 1179-80 (9th Cir.1986); United States v. Poole, 794 F.2d 462, 468 (9th Cir.1986); United States v. Brewer, 783 F.2d 841, 843 (9th Cir.1986).
[2] Recently, however, this court in State v. Moon, 45 Wn. App. 692, 697, 726 P.2d 1263 (1986) recognized a growing trend in other jurisdictions that the exclusion of such testimony is an abuse of discretion in a very narrow range of cases: "(1) where the identification of the defendant is the principle issue at trial; (2) the defendant presents an alibi defense; and (3) there is little or no other evidence linking the defendant to the crime." See United States v. Moore, 786 F.2d 1308 (5th Cir.1986); United States v. Downing, 753 F.2d 1224 (3d Cir.1985); United States v. Smith, 736 F.2d 1103 (6th Cir.1984); State v. Chapple, 135 Ariz. 281, 660 P.2d 1208 (1983); People v. Brown, 40 Cal.3d 512, 726 P.2d 516, 230 Cal. Rptr. 834 (1985); People v. McDonald, 37 Cal.3d 351, 690 P.2d 709, 208 Cal. Rptr. 236 (1984); Bloodsworth v. State, 307 Md. 164, 512 A.2d 1056 *489 (1986); People v. Brooks, 128 Misc.2d 608, 490 N.Y.S.2d 692 (1985); State v. Buell, 22 Ohio St.3d 124, 489 N.E.2d 795 (1986); see also State v. Hanson, 46 Wn. App. 656, 671, 731 P.2d 1140 (1987). The exhaustive analysis provided by the above cases persuades us that expert testimony on the unreliability of eyewitness identification can provide significant assistance to the jury beyond that obtained through cross examination and common sense. See United States v. Langford, supra at 1181-84 (Ferguson, J., dissenting). We stress, however, that to find the trial court abused its discretion in excluding such testimony, the three elements of Moon must be satisfied. We find they are met here.
First, there is no dispute the identification of Mr. Taylor as Mr. Price's assailant was the principle issue at trial. Second, Mr. Taylor presented an alibi defense supported by his wife and his mother-in-law. Third, as explained previously, there was little other evidence linking Mr. Taylor to the shooting of Mr. Price. The difference in the description given by Mr. Price and Mr. Taylor's actual appearance his degree of certainty in his identification and the fact that most of this time the weapon was in his face further supports our conclusion the testimony of Dr. Loftus was critical to Mr. Taylor's case. See Moon, at 698-99. Mr. Price's identification of Mr. Taylor, who lived in the same neighborhood as Mr. Price, may be plausibly explained by the doctrine of unconscious transference.
State v. Johnson, 49 Wn. App. 432, 439, 743 P.2d 290 (1987) has added one criterion to Moon, namely, "they will involve fact patterns which are close and confusing, and which `cry out' for an explanation". (Footnotes omitted.) In those instances, expert testimony may be of assistance to the jury. While in Johnson, the court had exercised its discretion in allowing some of this testimony and excluding other, here, the court excluded all of Dr. Loftus' testimony. Further, in Johnson there were four separate victims of four separate crimes, each of whom identified the defendant. We find, on this record, that the testimony regarding *490 stress and weapon focus may have been of assistance to the jury.
Recognizing that neither Moon nor Johnson had been decided when this case was tried, we are constrained to find an abuse of discretion in not allowing Dr. Loftus' testimony.
We reverse and remand for new trial.
WEBSTER, J., concurs.
PEKELIS, J.
I dissent. The trial court's exclusion of the expert testimony on eyewitness identification was proper, and I would affirm.
The offer of proof by Dr. Geoffrey Loftus was, for the most part, an extremely general discourse on memory. Specifically, Dr. Loftus only opined in conclusory fashion that (1) stress can impair mental functioning, (2) older individuals are substantially less able to carry out any task involving cognitive abilities, (3) the term "weapon focus" means that one will "tend to pay attention to the weapon at the expense of other objects ... such as the face," and (4) "unconscious transference" refers to a phenomenon in which "you remember you recognize information, let's say a face that you have seen before ... but you place it at the wrong place in time."[3]
The trial court noted that the testimony
doesn't add anything to what has already happened here. I might feel differently if he had more information about this particular case, if he had in fact talked to the victim ... because the issue isn't so much whether or not what he had to say is true but whether or not the concerns of memory would apply to this case.
The court concluded that the testimony would not assist the trier of fact.
*491 As we said in State v. Johnson, 49 Wn. App. 432, 743 P.2d 290 (1987), where, as here, the trial court's express reason for excluding the proffered testimony was that it would not be helpful to the trier of fact, we will, in the great majority of cases, find this a proper exercise of discretion. Johnson, 49 Wn. App. at 439 (citing State v. Chapple, 135 Ariz. 281, 660 P.2d 1208, 1220 (1983)). To determine whether the case falls outside "the great majority,' the appellate court must do more than mechanistically apply the three numbered criteria in State v. Moon, 45 Wn. App. 692, 697, 726 P.2d 1263 (1986). As we explained in Johnson, exclusion of proper eyewitness testimony will be error when the three Moon factors are present and the case is a close and confusing one which cries out for an explanation which the proffered testimony would provide. Moon, 45 Wn. App. at 698. In other words, there must be serious factual discrepancies and a proper "fit" between those discrepancies and the expert testimony. In Moon, for example, the witness' initial description of the suspect did not match the defendant at all. Expert testimony on "post event" information purported to explain this discrepancy. Moon, at 699.
Turning to the case before us, I see no serious discrepancies requiring explanation. The victim described his assailant as about 35 years old and 5 feet 9 inches to 5 feet 10 inches. Taylor is 24 years old and 5 feet 8 inches. The physical differences between a man in his mid-twenties and mid-thirties are frequently subtle, and may seem particularly so to a 79-year-old. This is hardly the sort of "discrepancy" which requires expert explanation.[4] Furthermore, Dr. Loftus did not address any particular phenomenon of memory that would help to explain this discrepancy.
*492 The distinctive feature of this case is simply the victim's lack of certainty in his identification of Taylor. When asked at trial if the defendant Taylor was his assailant, he stated, "His eyes look a little like the man who shot me, but I don't know if he had a mustache." His other testimony on identification consisted of, "[i]t looks a lot like him" and "I'm not positive this is the man." When asked "how positive," he replied, "80 percent". In addition, the victim conceded that it was difficult to see the person during the robbery because when the two were face to face, the assailant's face was obscured by the gun he pointed at the victim's face obscuring his own face.
While this may be a weak case, it is not confusing. Furthermore, Dr. Loftus' proffered testimony would still have to be of assistance to the trier of fact in order to compel the admission of the expert testimony. Here, the jury could easily conclude that being robbed and shot in one's own bedroom is a stressful event which could affect memory. Likewise, the prominence of the weapon was acknowledged by the victim's own testimony, making any further testimony on "weapon-focus" superfluous. The victim's physical impairments, advanced age, and the generally tentative nature of his testimony also established in themselves the possibility[5] that he had problems with "cognitive functioning."
Finally, there was an insufficient factual foundation for admission of testimony on the doctrine of "unconscious transfer." Defense counsel elicited from the victim only the fact that he had, at some unspecified time, gone to Denny's, Wendy's, and Chicago Red Hots in the Lake City area. The record is totally silent on how often, when, and which ones. The defendant then testified only that he had, at one time *493 or another, been employed in each of those places.[6] Again, there was no reference to where, when, or for how long. This evidence is not sufficient to demonstrate a significant probability that the two had ever seen each other before. Thus, the exclusion of expert testimony on the subject was proper.
In summary, this case does not fall within the narrow range of cases where exclusion of the testimony was error. I would affirm.
NOTES
[1] See, e.g., State v. Boucino, ___ Conn. ___, 506 A.2d 125, 133 (1986); People v. Kubat, 94 Ill.2d 437, 447 N.E.2d 247, 262 (1983); State v. Dillard, 355 N.W.2d 167, 174 (Minn. Ct. App. 1984); State v. Maher, 72 Or. App. 543, 696 P.2d 573, 575 (1985).
[2] Neither party raises the applicability of Frye v. United States, 293 F. 1013 (D.C. Cir.1923), although the standard for determining the admissibility of scientific evidence has been adopted in Washington. See State v. Martin, 101 Wn.2d 713, 719, 684 P.2d 651 (1984) (hypnotically aided testimony); State v. Canaday, 90 Wn.2d 808, 812-13, 585 P.2d 1185 (1978) (retesting of Breathalyzer ampules); State v. Woo, 84 Wn.2d 472, 473, 527 P.2d 271 (1974) (polygraph examination). The applicability of Frye is discussed in some of the cases cited in this opinion, but because that standard is not raised here, we need not discuss it.
[3] Dr. Loftus also discussed a number of other influences on memory, such as the use of drugs, the effect of amnesia, and the effect of bias in questions or tests, none of which bore any apparent connection to the facts in this case.
[4] The confusion over the mustache is not a "discrepancy" of the sort discussed in Moon. Here, it was the victim himself who spontaneously noted, while making his initial identification of Taylor, that he didn't remember the mustache. Thus, no unconscious forces appeared to be at work which required explanation.
[5] Dr. Loftus' testimony would have added little more, since Dr. Loftus had never interviewed the victim or obtained any specific information about his cognitive functioning. Thus, nothing connected these generalities about older persons with the particular person in this case.
[6] The record is replete with evidence that Taylor's work record was one of employment for very brief periods.
| {
"pile_set_name": "FreeLaw"
} |
411 So.2d 109 (1982)
ESTES HEALTH CARE CENTERS, INC., and Jackson Hospital and Clinic
v.
Bessie Ruth Cowan BANNERMAN and Barbara Cowan Hudgins, as Joint Administratrices of the Estate of Ronnie Joe Cowan, Deceased.
80-157.
Supreme Court of Alabama.
February 19, 1982.
Rehearing Denied March 19, 1982.
*110 McCoy Davidson of Roberts & Davidson, Tuscaloosa, Jasper P. Juliano and W. J. McDaniel, Birmingham, William J. Donald, Tuscaloosa, for appellant Estes Health Care Centers, Inc.
Perry Hubbard, W. Ryan deGraffenried, Jr., and Jay Guin of Hubbard, Waldrop, Tanner & deGraffenried, Tuscaloosa, for appellees.
JONES, Justice.
This is an appeal from a judgment upholding the plaintiffs' jury verdict in a wrongful death action.
Ronnie Cowan (age 26 at the time of his death) was born severely retarded (both physically and mentally), blind, mute, and virtually deaf, and remained all of his life totally dependent upon others. Upon the death of his parents, Ronnie's sisters (Plaintiffs) had him placed, as a ward of the state, in a state adjustment center. He was later transferred to a nursing home in Montgomery, and from there he was transferred to the Estes Health Care Center, where he resided at the time of the incident in question.
On approximately December 22, 1978 (there are no records to pinpoint the exact date), an Estes nursing aide left Ronnie in an empty bathtub in the presence of another retarded patient. The aide left the room to gather some necessary articles to complete Ronnie's bath and his clothing and bed change, and to take a younger patient to the day room. Upon her return to the bathroom the aide found the tub in which Ronnie was sitting partially filled with hot water and the hot water still running into the tub.
The aide promptly removed Ronnie from the tub, but it was not discovered for several hours that Ronnie had been burned badly enough to cause blisters over a portion of his lower body.
*111 The attending nursing home physician ordered that, in addition to medicinal treatments, Ronnie be given a great deal of nutrition and that he be forced to take fluids. When Ronnie failed to take in sufficient amounts of fluid to improve his condition, he was transferred to Jackson Hospital and Clinic on December 28, where he died on December 30.
Plaintiffs, as joint administratrices of Ronnie's estate, instituted a wrongful death action against Estes. Subsequently, Jackson and two individual physicians (one associated with Estes and the other associated with Jackson) were added by amendment as parties defendant. Plaintiffs dismissed the nursing home doctor and the trial proceeded against the other three Defendants.
At the close of Plaintiffs' case, Defendants' respective motions for directed verdict were argued and granted as to the issue of wantonness but were denied with respect to the issue of negligence. A jury verdict was returned against Estes and Jackson with an award of $500,000. From the order denying their respective motions for new trial or, in the alternative, J.N.O.V., both Defendants appeal.
Of the multiple issues raised, two are sufficiently preserved and presented by both Defendants to merit our consideration:
1. The failure of prospective jurors to respond to certain questions on voir dire; and
2. The propriety of certain portions of Plaintiffs' counsel's closing argument.
Defendant Estes raises one additional issue: The admissibility of certain evidence relating to the condition of its premises. Defendant Jackson also raises one additional issue: The failure of the trial judge to give Jackson's requested written jury instruction No. 5.
VOIR DIRE EXAMINATION OF JURORS
This issue is properly raised in the context of an adverse ruling of the trial court following an ore tenus hearing on Defendants' motions for new trial.
Two points are raised: 1) relating to Juror Diggins; and 2) relating to Jurors Diggins and Weekly.
Mr. Diggins did not respond to the question: "Has any member of the jury panel ever been a defendant in a law suit?" During the hearing on Defendants' motions for new trial, Mr. Diggins testified that a suit had been filed against him by a hospital, that his wages had been garnisheed, and that he had ended up in bankruptcy. He testified further that he was named as a defendant in a law suit arising out of an automobile accident which he settled with a cash payment to the plaintiff.
By way of explanation for his failure to respond to the voir dire inquiry, Juror Diggins stated: "My idea of a law suit was just like what I sat here and looked at.... [W]hat I thought it was, was go into court and defending myself; that was my idea of a law suit. That is the reason I said that."
The standard against which the trial court tests alleged improper responses to voir dire inquiries is set out in Freeman v. Hall, 286 Ala. 161, 238 So.2d 330 (1970):
"We hold that the proper inquiry for the trial court on motion for new trial, grounded on allegedly improper responses or lack of responses by prospective jurors on voir dire, is whether this has resulted in probable prejudice to the movant." Freeman, at 286 Ala. 166.
Furthermore, on appeal the trial judge's decision whether the juror's answers constituted probable prejudice "is subject to review only for abuse of discretion." Freeman, 286 Ala. at 166.
The Freeman decision goes on to hold:
"This rule comports with logic and common sense. The trial judge heard the questions posed on voir dire and answers thereto. He is in the best position to make findings on the question of probable prejudice after the testimony is developed orally, or by affidavit, on new trial motion. His conclusions are then subject to our review for abuse of discretion." Freeman, 286 Ala. at 167.
*112 Here, the trial court's decision is questionable only in the context of Juror Diggins's response to the "defendant in a law suit" question. The trial judge, in exercising his discretion not to grant a new trial, correctly considered the use and definition of the term "law suit." While taking into consideration that "law suit" is clearly understood by members of the legal profession, the court was well within the bounds of its discretion to take into account that this term is subject to other interpretations by the lay person and to accept what Juror Diggins maintained was his understanding of a "law suit."
The second point raised under this issue relates to the failure of Jurors Diggins and Weekly to respond to the inquiry: "Does any member of the jury panel have a close relativeby that, a parent, brother, sister, childwho is at this time or has been in a nursing home or an institution of that kind?"
The testimony of both Jurors Diggins and Weekly, at the hearing on Defendants' motions for new trial, revealed that each juror did have a relative in a nursing home at the time of the trial. We note that in both cases the relative institutionalized was a grandmother. The lawyer's voir dire inquiry, however (to which both men gave an original negative response), was qualified by the definition of "close relative" as a "parent, brother, sister, child." In view of the narrowed scope of the question as posed, we can find no reversible error in the trial court's acceptance of the answers given by Jurors Diggins and Weekly.
Moreover, the trial judge was justified in concluding that neither of these negative responses, in the context given, resulted in probable prejudice to the Defendants. Cf., Ex parte Ledbetter, 404 So.2d 731 (Ala. 1981).
PROPRIETY OF CLOSING ARGUMENTS
Defendants further urge our reversal of the trial court's decision because of the allegedly improper and prejudicial nature of Plaintiffs' counsel's closing argument. Specifically, Defendants objected to that portion of the argument wherein Plaintiffs' counsel stated:
"How valuable and how precious is human life? Ladies and gentlemen, how valuable and how precious are the hostages over in Iran? How much would this country pay to have those individuals back?
". . .
"Would any amount of money suffice for those lives? How much are the lives of all the Cuban refugees that our tax dollars are going to support, how much are they worth? They are human beings, also."
"... [A]nd I submit to you that the life that Ronnie Joe Cowan had during his lifetime was worth as much to him as mine is to me and any other individual in the world is to them. And he had the right to live his life in the fullest and best way that he would. And, but for the fact that they burned him, and but for the fact that the treatment in Jackson Hospital, and the fact that that boy was dehydrated, I submit to you that he would be here today."
These statements, Defendants claim, amounted to an argument for an award of damages compensatory in nature rather than punitive.
It is settled that under Alabama law (Code 1975, § 6-5-410) the only damages recoverable in a wrongful death action are punitive in nature, determined by the gravity of the wrong done, the propriety of punishing the wrongdoer, and the need for deterring others from committing the same or similar wrongful conduct. Merrell v. Alabama Power Company, 382 So.2d 494 (Ala.1980); Airheart v. Green, 267 Ala. 689, 104 So.2d 687 (1958).
Furthermore, argument of counsel appealing to the jury for an award of compensation for an individual's death as measured by the material worth of his or her life is improper. Hardin v. Sellers, 270 Ala. 156, 117 So.2d 383 (1960).
*113 The very purpose of punitive damages, then, in a wrongful death context, rests upon the Divine concept that all human life is precious. The language of § 6-5-410 is that recovery may be had for "such damages as the jury may assess." The judicial interpretations of our wrongful death statute have developed this principle: While human life is incapable of translation into a compensatory measurement, the amount of an award of punitive damages may be measured by the gravity of the wrong done, the punishment called for by the act of the wrongdoer, and the need to deter similar wrongs in order to preserve human life. The wisdom of this principle is all too dramatically exemplified by the station in life of Ronnie Joe Cowan. See Geohagan v. General Motors Corporation, 291 Ala. 167, 279 So.2d 436 (1973).
We hold, then, that the trial court correctly ruled that compensation was not the measure of damages sought by Plaintiffs' counsel when he referred to the value of human life in his closing argumentit is indeed the value of life itself upon which punitive damages are premised. This must be the rule in view of the extremely difficult responsibility resting upon a jury in a wrongful death action: to equate the wrong donethe wrongful taking of human lifewith a monetary award.
In the instant case, we find no evidence that the jury retired with the attitude of awarding compensatory rather than punitive damages. On the contrary, the trial judge, in his oral charge, was careful to exclude any indication of compensation in the event the jury should make an assessment of damages. This was clearly evidenced by the posture of a question asked of the trial judge by the foreman of the jury, indicating the jury's understanding that the nature of the allowable damages was punitive:
"In the case that we find guilty or not guilty, the amount that you have down for Mrs. Bannerman, or whatever, is the amount supposed to be the punishment that we put if we render an innocent or guiltyis that what this is the purpose of? Is it a punishment?
"THE COURT: `Yes, sir, it is in the form of a suitable fine, penal in nature.'"
ADMISSIBILITY OF EVIDENCE
Defendant Estes maintains that the trial court committed reversible error in admitting evidence of the temperature of the nursing home's hot water as taken on January 2 or 3, 1978approximately one week after the incident occurred. The error, says Estes, lies in the admission of the results of a water temperature test which was not direct evidence of the water temperature on the day Ronnie was found in the bathtub. Citing S. H. Kress & Co. v. Barratt, 226 Ala. 455, 147 So. 386 (1933), Estes reminds us that evidence of this sort "is competent only upon its first being made to appear that the conditions were substantially the same on the two occasions." Barratt, 226 Ala. at 459.
"Substantially the same," however, does not require total identity of circumstances; it requires, instead, a "similarity of conditions to give an experiment sufficient probative value to warrant its admission, and if the conditions were dissimilar in an essential particular, the evidence should be rejected." Louisville & Nashville R. Co. v. Sullivan, 244 Ala. 485, 490, 13 So.2d 877 (1943). Neither is direct proof a requisite to the admissibility of the results of tests such as these (Southern R. Co. v. Lefan, 195 Ala. 295, 70 So. 249 (1915)); and "the lack of exact identity affects only the weight and not the competency of the evidence." Sullivan, 244 Ala. at 490. Furthermore, the decision whether the "sufficiently similar" criterion for this evidence has been met rests largely within the sound discretion of the trial court. Sullivan, supra.
Testimony concerning the hot water temperature came from both Mr. Triplett, administrator of Estes, and Mr. Clark, the maintenance man for Estes. That testimony, heard by the trial judge, indicated the temperature of Estes's hot water was checked upon the direction of Mr. Triplett, in the presence of a City of Montgomery inspector and in the same bathtub in which *114 Ronnie had been placed by the aide. Mr. Clark, who is in charge of the management of the entire Estes facility and the necessary maintenance personnel, testified that, to his knowledge, the water temperature had been neither checked nor adjusted since Ronnie's injury occurred.
Taking all these circumstances into consideration, we hold that the trial judge, upon hearing the evidence concerning the hot water temperature at the nursing home, did not abuse his discretion in admitting this evidence.
FAILURE TO GIVE REQUESTED JURY CHARGE
Defendant Jackson claims that the trial judge committed reversible error in refusing to give Jackson's written requested jury charge No. 5. That charge, alleges Jackson, stated a correct principle of law which was applicable to the instant case and which was not covered by the judge's oral charge.
The refused written charge stated:
"I charge you the fact that Ronnie Joe Cowan died while under the care and treatment of the Defendant, Jackson Hospital and Clinic, Inc., does not in and of itself mean that the Plaintiffs are entitled to recover a judgment against the Defendant Jackson Hospital and Clinic, Inc. The Plaintiffs have the burden of proof in this case to reasonably satisfy you from the evidence that Jackson Hospital and Clinic, Inc., did not use the care, skill and diligence that the ordinarily skilled hospital in the same general neighborhood uses under like or similar circumstances and that this failure to exercise such care, skill and diligence on the part of Jackson Hospital and Clinic, Inc., was the direct cause of the death of Ronnie Joe Cowan. If the Plaintiffs have not reasonably satisfied you of these facts, from the evidence, then they have failed to meet the burden of proof required by law and are not entitled to a verdict against the Defendant Jackson Hospital and Clinic, Inc."
The trial court's oral charge, however, when viewed in its entirety, sufficiently covered all principles of law which govern the correct disposition of the issues of this case.
Specifically, the trial judge's oral charge included the following statements:
"The complaint alleges against the defendant Jackson Hospital, that the defendant undertook to provide hospital and nursing care to the deceased, and that the defendant negligently failed to provide proper hospital and nursing care to the plaintiff's intestate.
"The defendants, in response to these allegations ... have each separately entered pleas of the general issue or general denial. Under the law, a plea of the general issue has the effect of placing the burden of proof on the plaintiffs to reasonably satisfy you from the evidence, the truth of those things claimed by them in the bill of complaint. The defendants carry no burden of proof.
". . .
"As to the defendant Jackson Hospital, the duty arises in that in rendering services to a patient, a hospital must use that degree of care, skill, and diligence used by hospitals generally in the community under similar circumstances.
". . .
"Negligence is not actionable unless the negligence is the proximate cause of the injury. The law defines proximate cause as that cause which in the natural and probable sequence of events and without the intervention of any new or independent cause, produces the injury, and without which such injury would not have occurred. For an act to constitute actionable negligence, there must not only be some causal connection between the negligent act complained of and the injury suffered, but connection must be by natural and unbroken sequence, without intervening deficient causes, so that but for the negligence of the defendant, the injury would not have occurred.
"If one is guilty of negligence which concurs or combines with the negligence *115 of another, and the two combine to produce injury, each negligent person is liable for the resulting injury. And the negligence of each will be deemed the proximate cause of the injury. Concurrent causes may be defined as two or more causes which run together and act contemporaneously to produce a given result or to inflict an injury. This does not mean that the causes of the acts producing the injury must necessarily occur simultaneously, but they must be active simultaneously to efficiently and proximately produce a result.
"In an action against two or more defendants for injury allegedly caused by combined or concurring negligence of the defendants, it is not necessary to show negligence of all the defendants in order for recovery to be had against one or more shown to be negligent. If you are reasonably satisfied from the evidence in this case that all of the defendants are negligent and that their negligence concurred and combined to proximately cause the injury complained by the plaintiffs, then each defendant is liable to the plaintiffs."
Moreover, the language of Jackson's requested charge No. 5"the direct cause" does not contemplate joint tortfeasors. To be sufficient the charge need only have been enlarged to state that the hospital's conduct must have been one of the direct causes that combined to result in death or must have been the direct cause of death. Because Jackson's requested charge was insufficient in this respect, it could properly have been refused.
Other alleged errors were either not sufficiently preserved or were not so prejudicial as to warrant reversal. Therefore, we affirm.
AFFIRMED.
TORBERT, C. J., and MADDOX, SHORES and BEATTY, JJ., concur.
| {
"pile_set_name": "FreeLaw"
} |
971 So.2d 836 (2007)
Steven YOUNG, Appellant,
v.
The STATE of Florida, Appellee.
No. 3D07-2004.
District Court of Appeal of Florida, Third District.
October 24, 2007.
Steven Young, in proper person.
Bill McCollum, Attorney General, for appellee.
Before RAMIREZ, SHEPHERD, and CORTIÑAS, JJ.
PER CURIAM.
Affirmed. See Whitfield v. Singletary, 730 So.2d 314 (Fla. 3d DCA 1999).
| {
"pile_set_name": "FreeLaw"
} |
275 S.W.3d 22 (2008)
Marvin WEBB, Appellant,
v.
The STATE of Texas, Appellee.
No. 04-07-00220-CR.
Court of Appeals of Texas, San Antonio.
June 4, 2008.
*23 Brock Huffman, Law Office of Brock Huffman, Edward F. Shaughnessy, III, San Antonio, TX, for Appellant.
Rene M. Pena, Criminal District Attorney, Marc S. Ledet, Assistant District Attorney, Floresville, TX, for Appellee.
Sitting: ALMA L. LÓPEZ, Chief Justice, PHYLIS J. SPEEDLIN, Justice, STEVEN C. HILBIG, Justice.
OPINION
Opinion by PHYLIS J. SPEEDLIN, Justice.
Marvin Webb was charged by way of a two-count indictment with the offenses of *24 manufacturing of a controlled substance and possession of precursor materials with intent to manufacture a controlled substance. Webb waived his right to a jury trial and the trial court found him guilty on both counts. On appeal, Webb argues that: 1) the trial court erred by proceeding to trial on the second count without first securing a plea from him; 2) he received multiple punishments for the same conduct in violation of the Double Jeopardy Clause; and 3) the evidence is factually insufficient to support his conviction for the offense of manufacturing a controlled substance. We overrule Webb's issues and affirm the judgment of the trial court.
1. The indictment charged Webb with knowingly manufacturing methamphetamine in an amount of four grams or more but less than 200 grams (Count I), and possessing an immediate precursor, namely ephedrine or pseudoephedrine, iodine, acetone, lye, and charcoal lighter fluid, with intent to manufacture methamphetamine (Count II). Webb first argues that the trial court erred in proceeding to trial on Count II of the indictmentand subsequently entering a finding of guilty on that countbecause he never entered a plea on Count II, and hence the issue of his guilt on Count II was never joined. The following exchange occurred after Webb waived his right to a jury trial:
Trial court: Calling Cause No. 04-11-00215, State of Texas v. Marvin Webb. Is the State ready?
Prosecution: The State is ready.
Trial court: Defense ready?
Defense: Ready, Your Honor.
Trial court: [Defense counsel], does Mr. Webb wish to have the indictment read or is he willing to waive the reading of the indictment?
Defense: We'll waive the reading of the indictment, Your Honor. We've reviewed it and waive the reading.
Trial court: All right. Mr. Webb, please stand. To the offense as alleged in the indictment, manufacture of a controlled substance[,] methamphetamine, how do you plead?
Webb: Not guilty.
Trial court: You may be seated.
Without objection by Webb, the trial then proceeded through the evidentiary phase and concluded with the trial court finding that the evidence supported Webb's guilt as to the offense of "manufacture of a controlled substance, methamphetamine." At the conclusion of the punishment phase, the trial court found Webb guilty of both counts as alleged in the indictment and sentenced him to 30 years' confinement on Count I and 20 years' confinement on Count II, the sentences to run concurrently.
For the first time, Webb now argues on appeal that the absence of a plea to Count II constitutes a violation of articles 27.02[1] and 27.16[2] of the Texas Code of Criminal Procedure. See TEX.CODE CRIM. PROC. ANN. art. 27.02(4) (Vernon 2006); art 27.16(a) (Vernon 2006). Webb relies on Peltier v. State, 626 S.W.2d 30, 31 (Tex.Crim.App.1981), to support his position that "[u]ntil the indictment is read and a plea is entered the issue is not joined between the State and the accused before the jury." However, in Peltier, the defendant's *25 conviction was reversed because at the guilt/innocence phase, the indictment was not read and the defendant did not enter his plea in the presence of the jury, in violation of article 36.01, and the defendant brought the error to the trial court's attention in a motion for new trial. Peltier, 626 S.W.2d at 30-31; TEX.CODE CRIM. PROC. ANN. art. 36.01(a)(1), (2) (Vernon 2007) (requiring that indictment be read and plea entered in jury's presence). The rationale for the rule requiring the reading of the indictment and entry of a plea before the jury is to inform the defendant and the jury of the charges at issue, and to allow the jury to hear the defendant admit or refute the charges. See Martinez v. State, 155 S.W.3d 491, 495 (Tex.App.-San Antonio 2004, no pet.) ("Without the reading of the indictment and the entering of a plea, no issue is joined upon which to try."). A timely objection to afford the trial court an opportunity to cure the defect is required to preserve error. Id.; Cantu v. State, 939 S.W.2d 627, 646 (Tex. Crim.App.1997). When the error is discovered after trial, error may be preserved through a motion for new trial, bill of exception, or motion to arrest judgment. Warren v. State, 693 S.W.2d 414, 416 (Tex. Crim.App.1985); Martinez, 155 S.W.3d at 495. Here, Webb did not object during trial to the trial court's failure to secure his plea to Count II, and did not raise the issue in a post-trial motion; therefore, error was not preserved. See Lee v. State, 239 S.W.3d 873, 876 (Tex.App.-Waco 2007, pet. ref'd) (holding that an objection is required to preserve an article 36.01 complaint). Accordingly, Webb's first issue is overruled.
2. Next, Webb contends he was assessed multiple punishments for the same offense in violation of the Double Jeopardy Clause of the Fifth Amendment. See North Carolina v. Pearce, 395 U.S. 711, 717, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969) (the Fifth Amendment guarantee against double jeopardy protects against multiple punishments for the "same offense"). The indictment charged Webb with two counts as follows:
Count I
Knowingly manufacture, by the production, preparation, propagation, compounding, conversion, or processing of a controlled substance, directly or indirectly by extraction from substances of natural origin, independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, a controlled substance, namely methamphetamine, in an amount of four grams or more but less than 200 grams;
Count II
With intent to unlawfully manufacture a controlled substance, namely methamphetamine, possess an immediate precursor, to wit: ephedrine or pseudoephedrine, iodine, acetone, lye, and charcoal lighter fluid; . . .
Webb argues that the precursor chemicals that formed the basis for his conviction under Count II were possessed as part of a course of action engaged in to manufacture methamphetamine, which resulted in his conviction under Count I; thus, the conviction under Count II was a second conviction for the same conduct. In support, Webb relies on Lopez v. State, in which the court held that double jeopardy barred the defendant's convictions for both delivery of cocaine and possession of the same quantity of cocaine with intent to deliver. See Lopez v. State, 108 S.W.3d 293, 299 (Tex.Crim.App.2003).
We find Lopez distinguishable and disagree that Webb received multiple punishments for the same offense in violation of double jeopardy. In Lopez, the defendant *26 was punished for distinct steps in a single drug transaction that flowed from one "original impulse." Id. at 297-301 (holding that defendant charged with violation of section 481.112 of the Health and Safety Code cannot be punished more than once for manufacturing, possessing, and delivering the same single cache of drugs) (emphasis ours). Here, however, two different "impulses" were involved. Offense one, manufacturing of methamphetamine, was completed when methamphetamine was manufactured on the premises controlled by Webb, as evidenced by the cache of drugs seized during the search of Webb's shop. Offense two, possession of precursor materials with intent to manufacture methamphetamine, was completed when precursor materials were seized at Webb's shop, indicating Webb's ability to subsequently manufacture a separate batch of methamphetamine. See United States v. Anderson, 987 F.2d 251, 255 (5th Cir.), cert. denied, 510 U.S. 853, 114 S.Ct. 157, 126 L.Ed.2d 118 (1993) (affirming separate convictions for the offenses of manufacturing methamphetamine and attempting to manufacture methamphetamine where evidence showed offenses were factually distinct because they were based on different batches of methamphetamine); see also Toro v. State, 780 S.W.2d 510, 512 (Tex. App.-San Antonio 1989, no pet.) (holding double jeopardy does not bar prosecution for distinct possession and delivery offenses where separate drug quantities are identified for each offense). Because possession of the precursor materials gave Webb the ability to manufacture a new batch of methamphetamine, a "new bargain" existed for which he could be punished. See Lopez, 108 S.W.3d at 301. We conclude that Webb engaged in two individual, separate acts that the Legislature has made subject to separate prosecutions and separate punishments. Accordingly, Webb did not receive multiple punishments for the same offense and his second issue is overruled.
3. Finally, Webb maintains the evidence is factually insufficient to support his conviction for the offense of manufacturing methamphetamine under Count I of the indictment. In evaluating factual sufficiency, we review all of the evidence in a neutral light, and set aside the jury's verdict only if (1) the evidence is so weak that the verdict is clearly wrong and manifestly unjust, or (2) the verdict is against the great weight and preponderance of the evidence. Johnson v. State, 23 S.W.3d 1, 11 (Tex.Crim.App.2000); Cain v. State, 958 S.W.2d 404, 408 (Tex.Crim.App.1997). We must remain mindful that the jury is the sole judge of the credibility of the witnesses, and may choose to believe all, some, or none of a witness's testimony. Cain, 958 S.W.2d at 407 n. 5. Under the first prong, we may not conclude the verdict is "clearly wrong" or "manifestly unjust" simply because, based on the quantum of evidence admitted, we would have rendered a different verdict. Watson v. State, 204 S.W.3d 404, 417 (Tex.Crim.App. 2006). Similarly, under the second prong, we may not conclude that a conflict in the evidence requires a new trial simply because we disagree with the jury's resolution of the conflictthe great weight and preponderance of the evidence must contradict the jury's verdict before we may reverse on that basis. Id. When addressing factual sufficiency, we must include a discussion of the most important and relevant evidence that supports the appellant's complaint on appeal. Sims v. State, 99 S.W.3d 600, 603 (Tex.Crim.App.2003); Mullins v. State, 173 S.W.3d 167, 173-74 (Tex.App.-Fort Worth 2005, no pet.).
To obtain a conviction on Count I, the State was required to prove that Webb knowingly manufactured methamphetamine *27 in an amount of four grams or more but less than 200 grams. See TEX. HEALTH & SAFETY CODE ANN. § 481.112(a), (d) (Vernon 2003). To obtain a conviction for the manufacture of a controlled substance, the State must link the defendant either to an interest in the place where the manufacturing was taking place or to the actual act of manufacturing. Brown v. State, No. 07-06-0087-CR, 2007 WL 1245842, at *3 (Tex.App.-Amarillo Apr. 30, 2007, pet. ref'd) (mem. op.) (not designated for publication); East v. State, 722 S.W.2d 170, 172 (Tex.App.-Fort Worth 1986, pet. ref'd).
Manufacturing can be established through circumstantial evidence. See McGoldrick v. State, 682 S.W.2d 573, 578 (Tex.Crim.App.1985). Although mere presence at a drug laboratory is insufficient to support a conviction for manufacturing, it is a circumstance tending to prove guilt that, when combined with other facts, shows that the accused was a participant in the manufacturing. See Green v. State, 930 S.W.2d 655, 657 (Tex.App.-Fort Worth 1996, pet. ref'd). A link to manufacturing exists when there is "evidence of possession of a drug lab on one's premises combined with evidence that the lab has been used on the premises to manufacture the drug alleged, and in circumstances where the presence of the lab, because of its open location or odor or both, is shown to have been known to the defendant." East, 722 S.W.2d at 171-72.
At trial, two witnesses testified on behalf of the State and four witnesses, including Webb, testified for the defense. Sandra Noll, a narcotics investigator, testified that an anonymous tip that "somebody had been cooking meth all night at a motorcycle shop" led her to Webb's business in Wilson County. Upon arriving at the shop on a Sunday morning, Noll encountered Webb, Robert Bishop, David Kozekwa, and Valerie Egert. Webb was at the back of the shop in an enclosed room. Webb, the owner of the motorcycle shop, signed a consent to search form. During the search of the premises, the following drug and non-drug evidence was photographed and collected from the back of the shop: a bottle of Red Devil Lye; a coffee pot; coffee filters containing large white pills; a Pyrex dish with white powder residue; razor blades; a metal screen filter; a light bulb converted into a smoking pipe; a syringe; a metal pan containing matchsticks and coffee filters; and a coffee pot containing sludge. Noll stated the coffee pot sludge was common when making methamphetamine.
In a Ford Bronco parked at the shop, Noll found a box containing a coffee pot, coffee filters, hydrogen peroxide, Red Devil Lye, razor blades, a funnel, acetone, charcoal lighter fluid, a postal scale, a glass skillet, and duct tape. In the work area of the shop, Noll seized a syringe and a beer can that looked like it had been used to heat methamphetamine. In the grassy area about fifteen feet from the back of the shop, Noll uncovered a digital scale and modified water hosessegments of rubber hose modified with tape and bottle topswhich Noll stated was commonly used to manufacture methamphetamine. In a pickup truck located at the rear of the shop, Noll recovered a bottle of Red Devil Lye and coffee filters. In the bedroom area, she recovered two bottles of Red Devil Lye, a bottle of acetone, a 55-gallon barrel containing hundreds of matchbooks, a microwave with a large amount of white residue splattered on the inside, and a hotplate. Prior to the search, Bishop was arrested for possession of methamphetamine. After the search, Webb, Kozekwa, and Egert were also arrested. Fingerprint evidence was not collected at the shop.
*28 Joel Budge, a drug analyst for the Texas Department of Public Safety, testified that the evidence taken from Webb's shop indicated a methamphetamine manufacturing process called the "red phosphorus iodine method." Budge elaborated on the process used to manufacture methamphetamine from ephedrine or pseudoephedrine, and noted that certain products are routinely used in the process, including iodine, lye, segmented water hoses, razor blades, acetone, coffee filters, hydrogen peroxide, charcoal lighter fluid, and red phosphorus from matchbooks. In relation to the evidence seized at Webb's shop, Budge stated that his tests revealed varying amounts of methamphetamine on several items. Budge testified that in his expert opinion, the exhibits he analyzed pertinent to this case were evidence of manufacturing methamphetamine. Budge further opined that it was reasonably probable for a person working alone to complete the entire processing and manufacturing of the amount of methamphetamine found at Webb's shop in four to eight hours.
Webb testified that he began repairing motorcycles as a hobby, which then progressed to a full-time repair job, along with fixing lawnmowers, building fences, and other odd jobs. He lived with his sister, Scarlet Carpenter, who grew tired of the junk pile he had accumulated and stored at her home. Carpenter found an old building down a back country road for Webb to rent and he used it as a shop out of which to operate his repair business. Webb leased the shop for about a year before he was arrested.
Webb testified that he met Robert Bishop a long time ago, but had been out of touch until Bishop contacted him after Bishop was released from jail. Webb testified that he attempted to help Bishop, who drank a lot, by allowing him to stay at the shop in a make-shift bedroom, rent-free. There was not a bathroom or running water in the shop. Bishop avoided Webb during the day, and Webb suspected that Bishop had parties at the shop during the night because the neighbors told him that Bishop was loud and left behind messes. Webb stated that the day before the arrest, he had decided that Bishop could no longer stay at the shop and had locked up the shop so that Bishop could not enter. Just as Webb was about to leave with his sister, however, Bishop arrived, drunk, and demanded his clothes. Webb decided to give Bishop one more chance and allowed him to enter to get his clothing, but told him to stay no longer than five minutes. The next morning, Webb arrived at the shop to find Bishop was still there, and it appeared that he had been drinking all night.
Webb testified that the lye seized during the search came from Bishop's Bronco, which he had assumed Bishop used to clean drains when working with his father on plumbing systems. Webb stated that the acetone was used to clean motorcycles and that the charcoal lighter fluid was used to light fires in the fireplace. Webb stated that he had no knowledge that methamphetamine was manufactured at his business and that Bishop must have done it the day before the search while he was gone.
David Kozekwa worked on motorcycles in the shop with Webb. Kozekwa testified that on the day of the search, Bishop was at the shop before either he or Webb arrived, and he believed that Bishop had been at the shop the entire night before the search. He stated that acetone was commonly used in motorcycle repairs, and that he had not noticed any lye around the shop. Kozekwa stated that he did not like the things Bishop was involved in, and that people often came to the shop looking for Bishop. Amica Jo Chapa, custodian of *29 records at the Wilson County jail, testified that Webb had seventy cents on his person when processed into the jail on the day he was arrested. Chapa testified that Bishop had $309.58 in cash on him the day he was arrested. Finally, Carpenter testified regarding her dislike and distrust of Bishop.
Webb contends that the evidence does not prove that he manufactured methamphetamine; rather, he posits that the evidence shows "the possibility of manufacturing by someone" at the shop, "in all likelihood, Bishop." We disagree and hold that the evidence is factually sufficient to support Webb's conviction under Count I of the indictment. The record contains sufficient evidence to affirmatively link Webb to the manufacturing of methamphetamine inside his business. Webb controlled the premises where the methamphetamine lab was discovered. See East, 722 S.W.2d at 171-72. He was the owner of the motorcycle shop and the lessee of the building. At the time of the officers' arrival, Webb was in the enclosed back room, where the methamphetamine lab was located. The trial court, as fact finder, could have chosen to disbelieve Webb's testimony that he was unaware of the lab.
Moreover, the testimony regarding Bishop's unsavory character does not mitigate Webb's guilt. The trial court could have discounted Webb's theory that Bishop was the only participant in the manufacturing, and instead relied on the testimony regarding the open location of the lab and readily apparent materials in the shop to reach its verdict. Although there was no direct evidence showing Webb was present during the manufacturing or that he knew there was methamphetamine in his shop, we conclude that the trial court, as the trier of fact, could rationally infer and find beyond a reasonable doubt that Webb manufactured methamphetamine. The verdict is not so against the great weight and preponderance of the evidence as to be clearly wrong and manifestly unjust. Webb's third issue is overruled.
The judgment of the trial court is affirmed.
NOTES
[1] "The pleadings and motions of the defendant shall be: (4) a plea of not guilty." TEX. CODE CRIM. PROC. ANN. art. 27.02(4) (Vernon 2006).
[2] "The plea of not guilty may be made orally by the defendant or by his counsel in open court. If the defendant refuses to plead, the plea of not guilty shall be entered for him by the court." TEX.CODE CRIM. PROC. ANN. art 27.16(a) (Vernon 2006).
| {
"pile_set_name": "FreeLaw"
} |
COURT OF APPEALS
SECOND
DISTRICT OF TEXAS
FORT
WORTH
NO.
2-09-273-CR
DANIEL
EUGENE EDWARDS, JR. APPELLANT
V.
THE
STATE OF TEXAS STATE
------------
FROM THE 30TH
DISTRICT COURT OF WICHITA COUNTY
------------
MEMORANDUM OPINION[1]
------------
I.
Introduction
A jury found Appellant Daniel Eugene
Edwards, Jr. guilty of possessing or transporting anhydrous ammonia with the
intent to manufacture a controlled substance.
The trial court assessed Edwards=s punishment and sentenced him to fifteen years= confinement. In two issues, Edwards claims that the
evidence is legally and factually insufficient to establish that he possessed
or transported anhydrous ammonia.
II. Factual
and Procedural Background
Wichita Falls police officer Sergeant
James Jackson and his canine partner, Ward, were dispatched to respond to a
theft or a burglary that had occurred at a known Anarcotics house.@ Dispatch referenced a
suspect wearing black clothing and carrying a duffel bag and indicated that a
red pickup truck with a damaged front end had just departed the location.
While en route to the location, less
than ten minutes after receiving the dispatch, Sergeant Jackson spotted a red
pickup matching the description provided by dispatch. Sergeant Jackson stopped the pickup. Three individuals were in the pickup. Edwards was driving, Russell Beggs occupied
the passenger seat, and Rhonda Thelen sat in the middle. Sergeant Jackson asked the pickup=s occupants to exit the pickup.
Ward alerted near the open driver=s side window, and Sergeant Jackson
searched the pickup.[2] He found a coffee grinder and a can of rust
remover under the driver=s seat. The coffee grinder contained a white powdery
residue with small red flakes in it.
Inside a duffel bag on the front passenger side floorboard, Sergeant
Jackson found a metal tank wrapped in plastic.
The tank=s valve was corroded and
blueish-green. The tank was designed to
hold compressed air, not anhydrous ammonia.
In the center console, inside a lidded drink cup, Sergeant Jackson found
a plastic baggie containing powder. In
the bed of the pickup, Sergeant Jackson found a can of Coleman camp fuel, a
plastic water jug, and a small gas can.
Sergeant Jackson testified that he
did not smell ammonia when he approached the pickup and that BeggsCnot EdwardsCmatched the description of the
suspect seen departing the burglary location with a duffel bag. Sergeant Jackson agreed that manufacturing
methamphetamine could be carried out by one person. Officer Karl King, who assisted Sergeant
Jackson at the scene, testified that he took a sample of the liquid in the
tank. He said that he had never
encountered a Ameth lab@ run by a single person. Officer Gerald Schulte, who was also at the
scene of Edwards=s arrest, testified that the tank=s corroded, blueish-green valve
indicated that it contained anhydrous ammonia. Officer Schulte said that the
tank was not designed to hold ammonia and that the manufacture of
methamphetamine was commonly performed by multiple individuals. Officer Joseph Anderson, who was certified as
a methamphetamine lab investigator, testified that the blue color of the tank=s valve indicated that it contained
anhydrous ammonia and that the tank was not designed to hold anhydrous
ammonia. Officer Anderson testified that
the coffee grinder, the can of rust remover, the plastic bucket, the Coleman
fuel, the gas can, and the plastic bottle were all items commonly used in the
manufacture of methamphetamine.
Testing revealed no fingerprints on
the coffee grinder or can of rust remover.
The tank was not tested for fingerprints because police policy forbids
the fingerprint examination of items suspected of containing anhydrous ammonia
due to the danger involved. The sample
from the tank taken by Officer King tested positive for ammonia.
A jury heard the above evidence. The trial court charged the jury on the law
of parties, and the jury returned a verdict of guilty. Edwards perfected this appeal.
III. Standards of Review
A. Legal Sufficiency
In reviewing the legal sufficiency of
the evidence to support a conviction, we view all of the evidence in the light
most favorable to the prosecution in order to determine whether any rational
trier of fact could have found the essential elements of the crime beyond a
reasonable doubt. Jackson v. Virginia,
443 U.S. 307, 319, 99 S. Ct. 2781, 2789 (1979); Clayton v. State, 235
S.W.3d 772, 778 (Tex. Crim. App. 2007).
This standard gives full play to the
responsibility of the trier of fact to resolve conflicts in the testimony, to
weigh the evidence, and to draw reasonable inferences from basic facts to
ultimate facts. Jackson, 443 U.S.
at 319, 99 S. Ct. at 2789; Clayton, 235 S.W.3d at 778. The trier of fact is the sole judge of the
weight and credibility of the evidence. See Tex. Code Crim. Proc. Ann. art. 38.04
(Vernon 1979); Brown v. State, 270 S.W.3d 564, 568 (Tex. Crim. App.
2008), cert. denied, 129 S. Ct. 2075 (2009). Thus, when performing a legal sufficiency
review, we may not re-evaluate the weight and credibility of the evidence and
substitute our judgment for that of the factfinder. Dewberry v. State, 4 S.W.3d 735, 740
(Tex. Crim. App. 1999), cert. denied, 529 U.S. 1131 (2000). Instead, we Adetermine whether the necessary inferences are reasonable
based upon the combined and cumulative force of all the evidence when viewed in
the light most favorable to the verdict.@ Hooper v. State,
214 S.W.3d 9, 16B17 (Tex. Crim. App. 2007). We must presume that the factfinder resolved
any conflicting inferences in favor of the prosecution and defer to that
resolution. Jackson, 443 U.S. at
326, 99 S. Ct. at 2793; Clayton, 235 S.W.3d at 778.
B. Factual Sufficiency
When reviewing the factual
sufficiency of the evidence to support a conviction, we view all the evidence
in a neutral light, favoring neither party.
Steadman v. State, 280 S.W.3d 242, 246 (Tex. Crim. App. 2009);
Watson v. State, 204 S.W.3d 404, 414 (Tex. Crim. App. 2006). We then ask whether the evidence supporting
the conviction, although legally sufficient, is nevertheless so weak that the
factfinder=s determination is clearly wrong and
manifestly unjust or whether conflicting evidence so greatly outweighs the
evidence supporting the conviction that the factfinder=s determination is manifestly unjust.
Steadman, 280 S.W.3d at 246; Watson,
204 S.W.3d at 414B15, 417. To reverse under the second ground, we must
determine, with some objective basis in the record, that the great weight and
preponderance of all the evidence, although legally sufficient, contradicts the
verdict. Watson, 204 S.W.3d at
417.
Unless we conclude that it is
necessary to correct manifest injustice, we must give due deference to the
factfinder=s determinations, Aparticularly those determinations
concerning the weight and credibility of the evidence.@
Johnson v. State, 23 S.W.3d 1, 9 (Tex. Crim. App. 2000); see
Steadman, 280 S.W.3d at 246.
Evidence is always factually sufficient when it preponderates in favor
of the conviction. Steadman, 280
S.W.3d at 247; see Watson, 204 S.W.3d at 417.
In determining whether the evidence
is factually insufficient to support a conviction that is nevertheless
supported by legally sufficient evidence, it is not enough that this court Aharbor a subjective level of
reasonable doubt to overturn [the] conviction.@ Watson, 204
S.W.3d at 417. We cannot conclude that
a conviction is clearly wrong or manifestly unjust simply because we would have
decided differently than the jury or because we disagree with the jury=s resolution of a conflict in the
evidence. Id. We may not simply substitute our judgment for
the factfinder=s. Johnson, 23 S.W.3d at 12; Cain v.
State, 958 S.W.2d 404, 407 (Tex. Crim. App. 1997). Unless the record clearly reveals that a
different result is appropriate, we must defer to the jury=s determination of the weight to be
given contradictory testimonial evidence because resolution of the conflict Aoften turns on an evaluation of
credibility and demeanor, and those jurors were in attendance when the
testimony was delivered.@
Johnson, 23 S.W.3d at 8.
Our deference in this regard safeguards the defendant=s right to a trial by jury. Lancon v. State, 253 S.W.3d 699, 704
(Tex. Crim. App. 2008). An opinion addressing
factual sufficiency must include a discussion of the most important and
relevant evidence that supports the appellant=s complaint on appeal.
Sims v. State, 99 S.W.3d 600, 603 (Tex. Crim. App. 2003).
IV. The Evidence
is Sufficient
A. The Elements of the Offense; The Law of
Possession
The elements of the offense of
possessing or transporting anhydrous ammonia with the intent to manufacture a
controlled substance are that (1) the defendant (2) with the intent to
unlawfully manufacture a controlled substance (methamphetamine) (3) intentionally
or knowingly possessed or transported (4) anhydrous ammonia. See Tex. Health & Safety Code ' 481.124(a)(1) (Vernon Supp.
2009). APossession@ means actual care, custody, control,
or management. Id. ' 481.002(38). Circumstantial evidence may be used to prove
the elements of the offense, including the culpable mental state. McGoldrick
v. State, 682 S.W.2d 573, 578 (Tex. Crim. App. 1985). Edwards specifically challenges the
sufficiency of the evidence to show that he intentionally or knowingly
possessed or transported the anhydrous ammonia. When the accused is not in exclusive possession of the place where
the substance is found, it cannot be concluded that he had knowledge of and
control over the contraband unless there are additional independent facts and
circumstances that link him to the contraband.
Poindexter v. State, 153 S.W.3d 402, 405B06 (Tex. Crim. App. 2005). Evidence that links an accused to the
substance suffices for proof that he possessed it knowingly. Brown v. State, 911 S.W.2d 744, 747
(Tex. Crim. App. 1995). An accused=s links to contraband may be shown by
direct or circumstantial evidence, but in either event the evidence must
establish, to the requisite level of confidence, that the accused=s connection with the drug was more
than just fortuitous. Poindexter,
153 S.W.3d at 405B06.
Mere presence at the location where the
contraband is found is thus insufficient, by itself, to establish actual care,
custody, or control of the contraband. Evans
v. State, 202 S.W.3d 158, 162 (Tex. Crim. App. 2006). However, presence or
proximity, when combined with other links, may well be sufficient to establish
that element beyond a reasonable doubt. Id.
It is not the number of links that
is dispositive but, rather, the logical force of all of the evidence. Id.
Factors that may circumstantially establish legally sufficient evidence
of Aknowing@ possession include:
(1) the defendant=s presence when a search is conducted; (2) whether the
contraband was in plain view; (3) the defendant=s proximity to and the accessibility of the narcotic; (4)
whether the defendant was under the influence of narcotics when arrested; (5)
whether the defendant possessed other contraband or narcotics when arrested;
(6) whether the defendant made incriminating statements when arrested; (7)
whether the defendant attempted to flee; (8) whether the defendant made furtive
gestures; (9) whether there was an odor of contraband; (10) whether other
contraband or drug paraphernalia were present; (11) whether the defendant owned
or had the right to possess the place where the drugs were found; (12) whether
the place where the drugs were found was enclosed; (13) whether the defendant
was found with a large amount of cash; and (14) whether the conduct of the
defendant indicated a consciousness of guilt.
Id.
at 162 n.12. The absence of various of
these listed links does not constitute evidence of innocence to be weighed
against the links that do exist. Hernandez v. State, 538 S.W.2d 127, 131
(Tex. Crim. App. 1976). Moreover, it is
not the number of links that is dispositive, but rather the logical force of
all of the evidence, direct and circumstantial.
Evans, 202 S.W.3d at 162.
B. Legal Sufficiency of the Evidence
Here, Edwards was driving the car in
which the ammonia and related items were found.
At least some of the items were in plain view in the bed of the
pickup. The coffee grinder was under
Edwards=s seat and contained a powder residue
with red flakes in it, which Officer Anderson testified was ground-up
pseudoephedrine, a key component in the manufacture of methamphetamine. More of what appeared to be the same
substance was found in a baggie inside a lidded cup in a cupholder in the
center console, which was within Edwards=s reach. Additionally,
the rust remover was under the driver=s side seat in which Edwards was sitting. The rust remover can stated that it contained
hydrochloric acid, which Officer Anderson testified is used in manufacturing
methamphetamine.
Viewing the evidence in the light
most favorable to the verdict, we conclude that these facts, in combination,
provide sufficient logical force to establish that Edwards exercised control
over the tank of anhydrous ammonia found in the passenger-side floorboard of
the pickup and that his relationship to it was more than fortuitous. See Jackson, 443 U.S. at 319, 99 S.
Ct. at 2789; Clayton, 235 S.W.3d at 778; Robinson v. State, 174
S.W.3d 320, 326 (Tex. App.CHouston [1st Dist.] 2005, pet. ref=d) (affirming possession conviction
of front‑seat passenger in truck where cocaine was located in factory
compartment in back wall of truck, and noting that cocaine was within vicinity
and easily accessible to passenger). We
overrule Edwards=s first issue.
C. Factual Sufficiency of the Evidence
Edwards claims that the evidence is
factually insufficient to show that he possessed the tank of anhydrous ammonia
because Beggs was observed leaving the burglary scene with the duffle bag
containing the tank of anhydrous ammonia and the duffle bag was found at Beggs=s feet on the floorboard in front of
the passenger seat. But the jury was
charged on the law of parties and the fact that Beggs was in the pickup and
that the tank of anhydrous ammonia was located at Beggs=s feet does not render the links
discussed above factually insufficient to prove that Edwards (1) exercised
control over the substance by transporting it in his pickup and (2) knew, based
on the other items and substances in the pickup, that the tank contained
anhydrous ammonia. See Evans, 202
S.W.3d at 166 (concluding that Athe circumstantial evidence, when
viewed in combination and its sum total, constituted amply sufficient evidence
connecting appellant to the actual care, custody, control, or management of the
cocaine in front of him@); Poindexter, 153 S.W.3d at
412 (explaining that A[t]he mere fact that a person other
than the accused might have joint possession of the premises does not require
the State to prove that the defendant had sole possession of the
contraband, only that there are affirmative links between the defendant and the
drugs such that he, too, knew of the drugs and constructively possessed them@).
Viewing the evidence neutrally, we
recognize that Edwards was not under the influence of the narcotics, did not
possess other contraband on his person,
did not make any incriminating statements, and did not attempt to flee.
Sergeant Jackson testified that he did not notice the smell of anhydrous
ammonia when he approached the pickup but that the tank was wrapped in plastic
and placed inside a duffle bag. Edwards
also was not in possession of a large amount of cash. Possible links that do not exist, however, do
not negate the links that are present. Evans,
202 S.W.3d at 164 (rejecting court of appeals= determination of legal insufficiency that was based in part
on recitation of links that Adid not exist in this case@).
Edwards was driving the pickup and had allowed Beggs to enter the pickup
with the duffle bag, and the pickup contained many other items used in the
manufacture of methamphetamine, as set forth in detail above. See Wootton v. State, 132 S.W.3d 80,
89B90 (Tex. App.CHouston [14th Dist.] 2004, pet. ref=d) (holding factually sufficient
evidence existed that appellant knew tanks contained anhydrous ammonia when
appellant=s truck, where the tanks were found,
also contained many other ingredients used to manufacture
methamphetamine).
In light of the evidence supporting
the jury=s verdict, we conclude that the
evidence is not so obviously weak that the verdict is clearly wrong and
manifestly unjust or that the proof of guilt is against the great weight and
preponderance of the evidence. See
Steadman, 280 S.W.3d at 246; Watson, 204 S.W.3d at 414B15, 417. Accordingly, we hold that
the evidence is factually sufficient to support Edwards=s conviction. We overrule Edwards=s second issue.
V. Conclusion
Having overruled both of Edwards=s issues, we affirm the trial court=s judgment.
SUE
WALKER
JUSTICE
PANEL: DAUPHINOT,
GARDNER, and WALKER, JJ.
DO NOT PUBLISH
Tex. R. App. P.
47.2(b)
DELIVERED: May 20,
2010
[1]See Tex. R.
App. P. 47.4.
[2]Ward alerts only to narcotics, not to anhydrous
ammonia.
| {
"pile_set_name": "FreeLaw"
} |
709 F.2d 1511
U. S.v.Whitbread
82-1195, 82-1200
UNITED STATES COURT OF APPEALS Sixth Circuit
3/22/83
1
E.D.Mich.
AFFIRMED
| {
"pile_set_name": "FreeLaw"
} |
460 F.Supp. 1282 (1978)
UNITED STATES
v.
Beth Koehler DIEHL.
Civ. A. No. 73-H-1017.
United States District Court, S. D. Texas, Houston Division.
August 6, 1978.
*1283 *1284 *1285 *1286 J. A. "Tony" Canales, U. S. Atty., Houston, Tex., Paul D. Barker, Tax Div., Dept. of Justice, Washington, D. C., for plaintiff.
Dougal C. Pope, Pope & Waits, Houston, Tex., for defendant.
MEMORANDUM AND OPINION
CARL O. BUE, Jr., District Judge.
I. INTRODUCTION
This action was commenced pursuant to the provisions of the Int.Rev.Code of 1954, § 7401,[1] to reduce to judgment an assessment of income tax liability. The defendant taxpayer in this case, Beth Koehler Diehl (hereinafter defendant), and Kent B. Diehl (hereinafter Mr. Diehl), now deceased, were married during the entire calendar year 1957, and they filed a joint income tax return for that year in July of 1958. The government's assessment, which was made on July 21, 1967, concerned four different transactions. The taxpayer concedes that one of the transactions resulted in income which should have been reported. She maintains, however, that the remaining three transactions did not result in taxable income. The facts of these three more complicated transactions are set out in detail under the Findings of Fact. For purposes of introduction, each of the four transactions are briefly described as follows:
a. During the calendar year 1957, Mr. Diehl received a check from one Kennedy Van Sauns in the amount of $9,000.00. This amount was paid to Mr. Diehl for services rendered. On their joint income tax return for 1957 defendant and Mr. Diehl reported the receipt of only $4,500.00 from Kennedy Van Sauns. Defendant concedes that the entire $9,000.00 should have been reported.
b. In January of 1957, the board of directors of the Texas Portland Cement Company (hereinafter Texas Portland) voted to issue 110,491 fully paid shares of capital stock to Mr. Diehl for services he rendered to the company in his capacity as engineer and president. Mr. Diehl received those shares in March of 1957. On the same day that Mr. Diehl took possession of the certificate representing these 110,491 shares, Mr. Diehl pledged the shares as collateral for a $200,000.00 line of credit to be made directly to Texas Portland. The parties dispute whether the circumstances surrounding the issuance of the 110,491 shares render the receipt of these shares taxable income under § 61.
c. In February of 1957 Mr. Diehl entered into a contract with A. N. Morgan and others wherein Mr. Diehl pledged 50,005 shares of Mississippi Portland Cement Company (hereinafter MVPC) capital stock in return for a loan of $35,000.00. The contract provided that the loan was to be repaid within three months, and further, that the lender was granted an option to purchase 25,000 shares for $25,000.00 any time within that three-month period. Repayment was not timely made, and the lender never exercised his option. However, on June 14, 1957, while the loan was in default, Mr. Diehl exchanged 25,000 shares for the forgiveness of $25,000.00 of his debt. The parties do not dispute that this constituted a sale of the stock and should have been reported. The dispute centers on *1287 whether the transaction resulted in an unreported interest deduction which offsets any income generated by the transaction.
d. On June 14, 1957, Mr. Diehl entered into a contract with Bankers Life and Casualty Company (hereinafter Bankers Life). Mr. Diehl transferred title to the 25,005 shares of MVPC stock in exchange for $40,000.00. The contract required Mr. Diehl to repurchase 23,672 of the shares for $75,015.00 within one year. Again, the parties do not dispute that this resulted in a taxable sale which the Diehls should have reported. Again, the dispute centers on whether any unreported income is offset by unreported interest deductions.
This case was tried before Senior Judge Ben C. Connally, in November of 1975, and the parties agreed that the case should be submitted to the jury solely on the issue of fraud, reserving all questions of law for the Court's determination. The Court submitted the case to the jury in four interrogatories on the issue of fraud as to each transaction, and the jury found that the failure to report the $4,500.00 commissions received, as well as the receipt of the 110,491 shares of Texas Portland capital stock constituted fraud. After trial and prior to determining these legal questions, Judge Connally died, and this cause was transferred to the docket of Judge Carl O. Bue, Jr. Shortly after this transfer, the parties filed a joint stipulation agreeing to submit all issues of fact not submitted to the jury as well as all issues of law to this Court for determination based on the record. Pursuant to Rule 63, F.R.Civ.P., this Court therefore had authority to determine all unresolved questions of fact and law, and entertain any motions related thereto. See Miller v. Pennsylvania R. Co., 161 F.Supp. 633 (D.C.D.C.1958).
The Court concluded, however, that the complications of this lawsuit required a hearing by this Court, notwithstanding the duplication of efforts which would be necessitated by a de novo determination of the questions of fraud. Accordingly, this action was retried by this Court beginning on June 1, 1976, and lasting three days.
The Court has concluded that all of the aforementioned transactions resulted in taxable income not reported in the Diehls' 1957 joint income tax return. The Court has also concluded that the evidence presented at this second hearing was sufficient to establish clearly and convincingly that the income generated by (a) the receipt of the $9,000.00 commissions, and (b) the issuance to Mr. Diehl of the 110,491 shares of Texas Portland stock was fraudulently omitted from the joint income tax return filed by Mr. and Mrs. Diehl for tax year 1957.
II. THE "PROOF OF FRAUD" REQUIREMENT
To avoid the three year statute of limitations imposed by § 6501(a), it was the government's burden to prove by clear and convincing evidence that the failure to report income generated by at least one of the four transactions discussed above constituted fraud. Proof of fraud as to any one of the alleged deficiencies permits a general reaudit of the return in its entirety, and the statute of limitations is tolled as to all deficiencies. Lowy v. Commissioner of Internal Revenue, 288 F.2d 517 (2d Cir. 1961) (L. Hand, J.), cert. denied, 368 U.S. 984, 82 S.Ct. 596, 7 L.Ed.2d 523 (1961). See also Bahoric v. Commissioner of Internal Revenue, 363 F.2d 151, 153 (9th Cir. 1966); Worcester v. Commissioner of Internal Revenue, 370 F.2d 713, 717 (1st Cir. 1966).
It is important to note that the government's purpose in seeking to prove fraud in this case is limited solely to avoidance of the three year statute of limitations. Although the fifty percent fraud penalty assessed in this case constitutes some part of the government's total assessment, under the provisions of § 6653(b), it cannot be collected from Mrs. Diehl because the evidence in the record is insufficient to establish her participation in any of the four transactions found by this Court to be fraudulent. However, the Court has concluded that the evidence of fraud on the part of Mr. Diehl is amply supported by the record, and Mrs. Diehl is jointly and severally *1288 liable for any tax liability due to omissions from the Diehl's joint return. E. g., Hicks Co. v. Commissioner, 56 T.C. 982, 1030 (1971), aff'd, 470 F.2d 87 (1st Cir. 1972).
III. INAPPLICABILITY OF THE "INNOCENT SPOUSE" PROVISION: SECTION 6013(e)
There is insufficient evidence in the record to establish that defendant is entitled to be relieved from all tax deficiencies here at issue as an "innocent spouse" under § 6013(e). In the first trial of this cause before Judge Connally defendant made no attempt to assert this provision. Due to the peculiar nature of this action this Court considered it appropriate to direct counsel in a minute entry to brief the possible applicability of this provision. To qualify under § 6013(e) as an innocent spouse, a party has the burden of proving, among other things, that "in signing the return he or she did not know of, and had no reason to know of, such omission . . ." 26 U.S.C. § 6013(e)(1)(B). See Allen v. Commissioner of Internal Revenue, 514 F.2d 908, 912 (5th Cir. 1975).
In the second trial before this Court, defendant again made no effort to assume her burden of establishing the applicability of § 6013(e). Accordingly, the Court has concluded that statutory relief for defendant due to her nonparticipating role in the fraudulent transactions must be limited to relief under § 6653(b) from that part of the total assessment attributable to fraud penalties.
IV. LEGAL SUFFICIENCY OF AMOUNT FRAUDULENTLY EVADED
With respect to the unreported $4,500.00, defendant has cited four criminal tax fraud cases for the proposition that the government must prove that the income fraudulently omitted was a "substantial" amount. In all four cases cited the court affirmed the conviction of a taxpayer in a criminal tax fraud case who argued that the government had not proved the amount alleged in the indictment. In each case the court ruled that the government in a criminal tax fraud case need only show that a "substantial" amount of tax liability alleged was willfully evaded. See United States v. Beasley, 519 F.2d 233, 245 (5th Cir. 1975); Harris v. United States, 356 F.2d 582, 585 (5th Cir. 1966); United States v. Burdick, 221 F.2d 932, 934 (3d Cir. 1955), cert. denied, 350 U.S. 831, 76 S.Ct. 65, 100 L.Ed. 742 (1955); Sasser v. United States, 208 F.2d 535, 539 (5th Cir. 1953). The Court is of the opinion that the taxes attributable to the $4,500.00 omitted from defendant's return are sufficiently substantial to support the Court's finding of fraud with respect to this term of income. It should be noted that the omitted $4,500.00 is only one of the four items of fraudulent deficiency alleged by the government. Certainly it is not necessary that each item alleged by the government be substantial in amount. Moreover, any requirement of substantiality necessary to warrant a conviction for criminal evasion of taxes under § 7201 would have no application in a civil suit to recover tax deficiencies, where the fraud is proved for no other purpose than to toll the statute of limitations and permit a reaudit for any taxes due and owing for the tax year in question.
V. EVIDENTIARY OBJECTIONS RAISED DURING AND AFTER TRIAL
In bringing this action the government was required at trial to produce evidence in three general areas. Because of the statute of limitations problem mentioned earlier, it was necessary for the government first to establish that at least one of the deficiencies assessed was fraudulently omitted from the 1957 income tax return filed by the Diehls. It was also necessary to produce evidence establishing the fair market value of the Texas Portland shares received, and the MVPC shares disposed of during 1957. Finally, but to a lesser extent, it was necessary for the government to prove certain facts germane to legal questions of taxability.
During the course of trial, the government offered the testimony of Mr. Diehl, now deceased, which was taken during or pursuant to various proceedings involving *1289 Texas Portland. See Government Exhibits 25, 26 and 27. The Court also permitted a government agent to read a memorandum prepared subsequent to an interview of the Diehls in August of 1960. Defendant has objected to the admission of Government Exhibits 25-27 on general grounds of hearsay and the Texas Dead Man's Statute. She has also objected to the reading of the memorandum of interview with the revenue agents. The Court has determined that Government Exhibits 25-27 were properly admitted into evidence, and that defendant's post-trial motion to strike the reading by Agent Naiser of the memorandum of interview must be denied.
A. Transcripts of Mr. Diehl's Testimony in Other Lawsuits
Rule 402, Fed.R.Evid., provides:
"All relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, by Act of Congress, by these rules, or by other rules prescribed by the Supreme Court pursuant to statutory authority. Evidence which is not relevant is not admissible."
In order for the government to prevail in this action, it was required to establish by clear and convincing evidence that Mr. Diehl intentionally omitted one of the four items charged herein. Therefore, any evidence which establishes or tends circumstantially to establish Mr. Diehl's state of mind, or his knowledge of the laws of taxation, is germane to this Court's threshold determination of the question of fraud. Thus, the testimony of Mr. Diehl is admissible unless otherwise objectionable by virtue of a constitutional, statutory, or regulatory provision.
1. The Texas Dead Man's Statute
Defendant first contends that the evidence is inadmissible as violative of the Texas Dead Man's Statute, Tex.Rev.Civ. Stat.Ann. art. 3716 (1925). This contention is wholly without merit. First, it is apparent from the language of Article 3716 that it applies only to "actions by or against executors, administrators, or guardians." Second, Dead Man Acts, which are remnants of common law disqualification of parties and interested persons, now fall within the dictates of Rule 601, Fed.R.Evid., which provides that:
"[e]very person is competent to be a witness except as otherwise provided in these rules. However, in civil actions and proceedings, with respect to an element of a claim or defense as to which State law supplies the rule of decision, the competency of a witness shall be determined in accordance with State law."
It is therefore clear that the applicability of state Dead Man Acts in federal court is limited to diversity actions. Cf. Van Pendley v. Fidelity and Casualty Co. of New York, 459 F.2d 251, 254-255 (5th Cir. 1972). See also 3 Weinstein, Federal Rules of Evidence ¶ 601.4 (1975).
2. Defendant's Hearsay Objections
a. Admissibility as a Vicarious Admission
In response to defendant's general hearsay objection which was made throughout trial as to any and all statements made by Mr. Diehl, the government first contended that such statements are no longer considered hearsay under the new Federal Rules of Evidence. Rule 801(d)(2)(D) in pertinent part provides that:
"A statement is not hearsay if . . . the statement is offered against a party and is . . . a statement by his agent or servant concerning a matter within the scope of his agency or employment . . ."
Citing 4 Wigmore, Evidence §§ 1077-1080 (Chadbourn rev. 1972), the government argued that the joint income tax liability of Mr. and Mrs. Diehl renders any statement by Mr. Diehl a vicarious admission under Rule 801(d)(2)(D). The Court disagrees. While a husband or wife may become the agent of his spouse, Wigmore, supra, § 1078, it is apparent from the testimony of Mrs. Diehl at trial that the Diehl's divorce in October of 1959 antedated the transcript and interview testimony here sought to be excluded. It would be therefore wholly incongruous for this Court to premise the admissibility of this testimony on a relationship which had been extinguished at the time that the testimony was given.
*1290 b. Admissibility as Statements Against Interest
The government alternatively argued that Mr. Diehl's prior testimony as well as statements in the August of 1960 interview with revenue agents Naiser and McKnight constituted statements against interest which were
"so far contrary to [his] pecuniary or proprietary interest, or so far tended to subject him to civil or criminal liability, or to render invalid a claim by him against another, that a reasonable man in his position would not have made the statement unless he believed it to be true."
Rule 804(b)(3), Fed.R.Evid.
The Court has concluded, however, that the transcribed testimony of Mr. Diehl sought to be admitted for this Court's consideration had self-serving as well as disserving aspects. From a standpoint of federal income tax liability, the statements were against the pecuniary interests of Mr. Diehl, and they subjected him to civil and criminal liability. However, in the context in which this testimony was given, many of the statements made by Mr. Diehl and considered here by this Court were made to establish Mr. Diehl's proprietary interest in the 110,491 Texas Portland shares. Thus, as to these statements, the usual guarantee of trustworthiness justifying the "statements against interest" exception to the hearsay rule is not applicable. C. McCormick, Evidence § 279 (2d ed. 1972).
To the limited extent that this Court has admitted and considered testimony by Mr. Diehl for the truth of the matters asserted, the Court has concluded that the requirements of Rule 804(b)(5), Fed.R.Evid., have been amply satisfied.
c. Testimony Establishing State of Mind
This Court's exhaustive consideration of statements made by Mr. Diehl, as well as statements made to him by others was necessitated not by an attempt to resolve the questions of taxability, but rather, to determine the state of Mr. Diehl's mind at the time that the Diehl's joint income tax return was filed in July of 1958. The advice rendered to Mr. Diehl by various accountants and others throughout 1956, 1957 and 1958 as to the taxability of the receipt of the 110,491 shares in no way influences this Court's conclusions of law. Evidence of this repeated advice does, however, bear on Mr. Diehl's state of mind at the time that his tax return was filed. Likewise, the Court's finding that the $4,500.00 commissions and the 110,491 Texas Portland shares received by Mr. Diehl were fraudulently omitted from the Diehl's 1957 joint income tax return is predicated to a great extent by Mr. Diehl's testimony concerning these transactions. Since the proof in this instance does not rest its value upon the veracity of Mr. Diehl, it cannot be characterized as hearsay. Rule 801(c), Fed.R. Evid. See also C. McCormick, Evidence § 249 (2d ed. 1972).
3. Defendant's Motion to Strike Agent Naiser's Reading of a Memorandum of Interview
Rule 803(5), Fed.R.Evid., provides that a memorandum can be read into evidence by a witness if (a) the witness once had accurate knowledge of events which he no longer enjoys, and (b) the memorandum was made while the matter was fresh in the witness' memory. Defendant maintains that he was unable effectively to cross-examine Agent Naiser's recollection of this interview. This objection, however, must go to the weight rather than the admissibility of Agent Naiser's reading; otherwise, this objection would always preclude the reading of past recollections which have been recorded. The Court has concluded that the requirements of Rule 803(5) were properly met; defendant's motion to strike this testimony is therefore denied.
VI. FINDINGS OF FACT
The following Findings of Fact set out the basis for this Court's conclusions that the four items of income described in Section I, supra, (1) constituted taxable income to the Diehls in 1957, and further, (2) that the failure to report the receipt of (a) the 110,491 Texas Portland shares and (b) *1291 $4,500.00 of the $9,000.00 commissions received from Kennedy Van Sauns constituted fraud on the part of Mr. Diehl.
Also included in this amalgam of facts is the basis of this Court's opinion as to the valuation properly attributable to the Texas Portland shares received and the MVPC shares disposed of by Mr. Diehl in 1957.
A. General Findings
1. During each of the years 1956, 1957 and 1958, Mr. Diehl and defendant were husband and wife residing in Orange, Texas.
2. The joint income tax return signed by defendant and her husband for tax year 1957 was filed on July 21, 1958.
3. Mr. Diehl fraudulently omitted, or caused to be omitted from the Diehls' joint return taxable income generated by the 110,491 Texas Portland shares and the $4,500.00 Kennedy Van Sauns commissions received by Mr. Diehl in 1957.
4. In October of 1959 defendant and Mr. Diehl were divorced in Mexico.
5. Mr. Diehl died in 1966 in California.
6. On July 21, 1967, the Commissioner made an assessment against defendant for unpaid personal income taxes for the tax year 1957 in the amount of $499,337.95, together with fraud penalties in the amount of $249,668.97, and interest in the amount of $277,625.06. Presently in dispute before this Court is the sum of these amounts, $1,026,631.98, together with the interest which has accrued thereon to the present date.
7. Pursuant to § 6653(b), defendant is entitled to relief from the portion of the total assessment attributable to fraud; evidence in the record is insufficient to establish her participation in any of the four transactions found by this Court to be fraudulent.
8. During the tax year 1957, defendant was a licensed securities dealer. At some point during 1956 or 1957, she sold shares of Texas Portland stock for $5.00 a share.
9. Evidence in the record is insufficient to satisfy defendant's burden under § 6013(e)(1)(B), of establishing that she did not know of and had no reason to know of any or all of the four fraud items set out herein. Defendant therefore is not entitled to relief from any tax liability as an innocent spouse under this provision.
B. The $9,000.00 Commissions Paid to Mr. Diehl by Kennedy Van Sauns
10. On August 28, 1957, Mr. Diehl received $9,000.00 commissions from one Kennedy Van Sauns. Of this $9,000.00, Mrs. Diehl and her husband reported only $4,500.00 on their 1957 income tax return filed in July of 1958.
11. In August of 1960 in an interview before internal revenue agents Naiser and McKnight, Mr. Diehl stated that the failure to report $4,500.00 of the $9,000.00 received was due to an oversight caused by the fact that the $9,000.00 was received in two checks of $4,500.00 each. Agents Naiser and McKnight, and Mr. and Mrs. Diehl were present at that August of 1960 interview. With the exception of Mr. Diehl, all of the other parties to that interview testified in this cause. There is no evidence that any other explanation for the $4,500.00 was given at that interview.
12. The $9,000.00 commissions paid to Mr. Diehl and deposited in his bank account was received in the form of one check in the amount of $9,000.00.
13. Defendant does not dispute that the $4,500.00 omitted should have been reported on her 1957 income tax return. It is defendant's contention that Mr. Diehl had some sort of an oral agreement with a Mr. Calvin Huffman, as president of Industrial Management Corporation, to split fifty-fifty any unpaid commissions which Huffman succeeded in collecting from Kennedy Van Sauns on behalf of Mr. Diehl. Defendant argues that the omitted $4,500.00 was shrouded in the confusion of this oral agreement.
14. This agreement did not purport to reach monies received by Mr. Diehl from Kennedy Van Sauns which neither Huffman nor his corporation had any part in collecting.
*1292 15. Neither Huffman nor his corporation was at any time instrumental in any manner in the $9,000.00 payment to Mr. Diehl here in question. Neither Huffman nor his corporation at any time received any money in connection with the receipt of this $9,000.00 from Kennedy Van Sauns. Neither Huffman nor his corporation was successful at any time in collecting any unpaid commissions from Kennedy Van Sauns on behalf of Mr. Diehl.
C. Issuance of the 110,491 Shares of Texas Portland Cement Company Stock
1. Findings Relating to Taxability and Fraud
16. In 1955, Mr. Diehl, along with other promoters of Texas Portland entered into a preincorporation agreement whereby, in return for services rendered to the corporation, Mr. Diehl was to receive 110,491 shares of stock in the company. In May of 1955 he received a certificate for 110,491 shares. This certificate was destroyed by Mr. Diehl in 1955 when it was learned that the Texas Securities Commission would refuse to permit the public sale of Texas Portland shares so long as the 110,491 shares were outstanding in Mr. Diehl's name. Mr. Diehl consulted with several tax specialists during the years of 1956 and 1957 regarding the tax aspects of receiving these shares.
17. On January 14, 1957, a special meeting of the board of directors of Texas Portland was held. A resolution was passed at that meeting awarding Mr. Diehl the issuance of 110,491 shares of fully paid capital stock in consideration for services he had rendered to the corporation as an engineer and as president. This issuance was subject to the condition that the shares be reserved until 90 days following commencement of operation.
18. Although full production did not commence until April of 1957, the 110,491 shares of stock were issued to Mr. Diehl on March 19, 1957. These shares were pledged to the American National Bank of Beaumont in exchange for a $200,000.00 line of credit running to Texas Portland.
19. The chairman of the board of Texas Portland, a Mr. Cullen F. McDougal, also pledged 70,000 shares to the bank in order to secure the $200,000.00 line of credit, making a total of 180,491 shares pledged. On either March 19 or March 20, 1957, Mr. McDougal, Mr. Diehl and a Mr. James Knott went to the American National Bank to the office of a Mr. Brooks Hollyfield, executive vice president of the bank. At this meeting papers necessary to establish the line of credit were executed.
20. In Mr. Diehl's written pledge to the bank, the following paragraph was included:
"11. Pledgor hereby covenants with the Bank that Pledgor is the legal and equitable owner of the securities hereby pledged, and that they are subject to no liens or encumbrances whatever . .."
21. Mr. Diehl, Mr. McDougal and Texas Portland were each individually liable for the $200,000.00 line of credit.
22. As an added assurance the American National Bank also entered into an agreement with a wealthy businessman named Mr. S. Perry Brown whereby Mr. Brown would purchase the 180,491 shares of stock for $200,000.00 if called upon to do so. Mr. Brown was engaged in certain construction work with Texas Portland, and he had previously established a line of credit with the American National Bank.
23. A special meeting of the board of directors of Texas Portland met again on June 14, 1957; the original minutes of that meeting reflect that
"the Company was in need of funds for operations on March 20, 1957; and the American National Bank required that Mr. Diehl's stock be pledged as collateral thereto, the Chairman of the Board, Cullen F. McDougal, wired each Board member that the stock was being issued and received affirmative replies, said stock was issued and pledged to the bank."
24. The American National Bank held the 110,491 share certificate throughout the year of 1957, and was still holding it on October 13, 1958, when Mr. Diehl filed a sworn affidavit of sole ownership of these shares in the United States District Court, *1293 Eastern District of Texas, Beaumont Division, in reorganization proceedings for Texas Portland.
25. Prior to the March, 1957, issuance of the 110,491 Texas Portland shares Mr. Diehl supplied certain personal financial information to a Mr. James Knott, an accountant hired by Texas Portland in November of 1956. The purpose for supplying this information was to aid Knott in preparing a financial statement for Mr. Diehl to be given to the American National Bank. Both the information supplied by Mr. Diehl and the statement prepared by Knott represented that Mr. Diehl owned the 110,491 Texas Portland shares and further, that the shares were each worth $5.00.
26. On at least two occasions prior to 1957, Mr. Diehl had received stock for services rendered in constructing cement plants.
27. On numerous occasions throughout 1956, 1957 and 1958 prior to the time when the Diehls' joint return was filed, Mr. Diehl solicited tax advice from experts and others concerning the receipt of the 110,491 Texas Portland shares. The record is replete with testimony of advice given prior to the March issuance of these shares. This advice received by Mr. Diehl consistently apprised him that the receipt of the 110,491 shares would constitute ordinary income.
This advice received by Mr. Diehl before the March issuance of the 110,491 shares was based upon the 1955 preincorporation agreement and the resolution passed in the special meeting of January 14, 1957, both of which contemplated issuance of the shares to Mr. Diehl for services rendered to the corporation in his capacity as engineer and president. The actual issuance of the 110,491 shares received by Mr. Diehl and delivered to the American National Bank occurred in a context not dictated or anticipated by either of these earlier agreements.
28. In April of 1958 Mr. Diehl met a certified public accountant named Martin Davis. Davis, presently a college professor, was named as a trustee of Texas Portland in July of 1958. At some time in 1958 prior to the Diehls' July deadline for filing their return, Davis advised Mr. Diehl that the receipt of the 110,491 shares in March of 1957 was taxable as ordinary income. Davis further advised Mr. Diehl that the immediate pledge of these shares to the American National Bank of Beaumont did not in any way alter the taxability of this issuance as ordinary income.
29. In the August of 1960 interview of the Diehls by revenue agents Naiser and McKnight, Mr. Diehl claimed that he never saw or signed the 110,491 share certificate pledged to the bank. The record as well as the deposition testimony of Mr. Diehl reflects that this statement was false. See Government Exhibit 26, p. 121.
30. In this same interview Mr. Diehl stated without naming the solicited sources that he had sought advice concerning the taxability of the 110,491 shares and no one had ever advised him that the receipt of these shares was taxable.
31. The Diehls hired a Mr. Walter Ebanks to prepare their joint return for tax year 1957. To facilitate this preparation, Mr. Diehl supplied somewhat detailed working papers to Ebanks. Government Exhibit 23. At no time either in the working papers or in any other manner did either of the Diehls discuss with or otherwise apprise Ebanks of any of the four fraud items alleged herein.
32. A certified public accountant named Wilbur Swenson, who was aware that Mr. Diehl had pledged his 110,491 Texas Portland shares as collateral for a $200,000 line of credit to Texas Portland, notified Mr. Diehl that the receipt of these shares posed complicated tax problems; he further advised Mr. Diehl to seek out competent legal advice as to the tax consequences of this transaction.
33. On several occasions between December of 1957 and April of 1958, Mr. Albert Marey, a former internal revenue agent who kept the books for Texas Portland during this period, was sought out by Mr. Diehl for advice as to the tax consequences of the 110,491 collateralized Texas Portland shares. The advice given by Marey was that the receipt of those shares constituted ordinary income, since the shares were in Mr. Diehl's name on the *1294 company's ledgers and available to Mr. Diehl as collateral.
34. Some time in 1958 prior to the filing of the joint return on July 21, 1958, page 6 of the June 26, 1957, directors' meeting minutes was altered at the direction of Mr. Diehl. See original minutes, Finding of Fact 23, supra. Specifically, at the direction of Mr. Diehl, his secretary, a Mrs. Dawson, altered the minutes to read:
"Whereupon Kent B. Diehl, Sr. stated that upon advice of his accountants he would be unable to accept the 110,491 shares of stock issued for his services in engineering, designing, completing financing and supervising construction of the Texas Portland Cement Company plant. Resolution was then made that the Board of Directors issue to Kent B. Diehl, Sr., an option to purchase up to 110,491 shares of stock at five cents per share at any time during the life of the Texas Portland Cement Company . .. [A]ctual purchase of the stock could be effected in whatever amounts desired by Mr. Diehl; however, the total exercise of the option could not exceed 110,491 shares. It was further agreed by the Board of Directors that the stock certificate issued to Mr. Diehl and held by the American National Bank was in error due to the refusal of Mr. Diehl to accept certificate # 6881, and that such stock certificate should be cancelled and reissued to the American National Bank of Beaumont, Texas as Treasury stock from the Texas Portland Cement Company.
"NOW THEREFORE BE IT RESOLVED that the action of the Board in issuing the stock to Mr. Kent B. Diehl, Sr. as evidenced by stock certificate # 6881 for 110,491 shares be nullified due to the refusal of Mr. Diehl to accept same, and that such 110,491 shares of stock be reissued to the American National Bank in Beaumont, Texas as Treasury stock; and that Kent B. Diehl, Sr. be issued a stock option for the purchase of 110,491 shares of stock at 5¢ per share at any time during the life of the Texas Portland Cement Company . . . such option to be exercised in amounts desired by Mr. Diehl but not exceeding 110,491 shares . . .."
This alteration in the June 26, 1957, minutes of the Texas Portland directors' meeting reflects a resolution which did not occur on June 26, 1957. The orchestration of this alteration constituted an attempt by Mr. Diehl to alter the tax consequences of the receipt of the 110,491 shares.
2. Findings Relating to the Fair Market Value of the 110,491 Texas Portland Shares
35. Texas Portland shares were registered for public issue by the Securities Exchange Commission at five dollars a share in 1956.
36. It was Mr. Diehl's belief that shares of Texas Portland stock were worth about $5.00 each in March of 1957. This belief was manifested by Mr. Diehl on several occasions in the record, including the financial information supplied by Mr. Diehl to one of his accountants, Mr. Knott, who prepared a financial statement of the Diehls for the American National Bank.
37. H. K. Maxey Company, which was licensed by the State Securities Board to sell securities, sold shares of Texas Portland stock in some 350 different transactions between September of 1956 and December of 1957. Government Exhibit 20. The approximate price per share in these transactions was $5.00. The average number of shares sold per transaction was less than 150. Nine of the 350 transactions involved sales of over 650 shares, and two of these nine transactions exceeded 1000 shares.
38. Pursuant to final judgment entered in State of Texas v. Kent B. Diehl, Civil No. 111863-B, Dist. Ct. of Travis County, 126th Judicial Dist. of Texas, May 3, 1960, Mr. Diehl's holding of 110,491 shares was reduced to 32,500 shares; 10,000 of this 32,500 were awarded to Calvin Huffman pursuant to a purported preincorporation agreement between Huffman and Diehl. The court based its ruling upon a finding that the 110,491 shares when issued constituted watered stock, since the services rendered by Mr. Diehl were not worth the full 110,491 shares claimed.
*1295 39. The American National Bank of Beaumont, as security for extending a $200,000.00 line of credit to Texas Portland, exacted the following assurances: (a) the pledge of 180,491 shares of Texas Portland, (b) guaranties from Texas Portland, Mr. McDougal and Mr. Diehl in their individual capacities, and (c) an agreement by Mr. S. Perry Brown to purchase the 180,491 shares from the bank whenever called upon to do so.
40. On May 3, 1957, Mr. Diehl purchased 1000 shares of Texas Portland for $1,580.00. In its Notice of Deficiency the government characterized this acquisition as a "compensatory bargain purchase" and assessed an additional $3,420.00 as unreported income for 1957.
41. From a standpoint of cash flow, Texas Portland was in critical condition when the 110,491 shares were issued to Mr. Diehl in March of 1957. Two months later on May 31, 1957, a certified audit of Texas Portland indicated that the company would make money.
D. Disposition of the 50,005 MVPC Shares
42. The government in this action assesses as fraud items (a) the unreported sale of 25,000 shares of MVPC stock to the A. N. Morgan group for $25,000.00, and (b) the unreported sale of 25,005 shares of MVPC stock to Bankers Life for $40,000.00.
43. Prior to tax year 1957, Mr. Diehl purchased 8,572 shares of capital stock in Vicksburg Properties, Inc., for $2,000.00.
44. Thereafter, Mr. Diehl and others formed the Mississippi Valley Portland Cement Company.
45. On May 15, 1956, stockholders of Vicksburg transferred their assets in exchange for capital stock in MVPC. Mr. Diehl transferred his 8,572 shares of Vicksburg and received a certificate for 42,860 shares of MVPC. He received a second certificate for 7,145 shares of MVPC in payment for services rendered to Vicksburg. The two certificates representing the 50,005 shares of MVPC capital stock bore the following legend:
"This certificate cannot be transferred before one year from its date or unless public stock subscription has been completed prior to one year from date."
MVPC qualified its stock before the Securities and Exchange Commission prior to June 14, 1957.
46. The value that Vicksburg placed on the 7,145 shares received by Mr. Diehl for services rendered was $17,148.00, or $2.40 per share; Mr. Diehl assessed the value of his services at $46,410.00. In its Notice of Deficiency the government assessed the value of these shares at $3.00 per share, or $21,435.00.
47. On February 6, 1957, Mr. Diehl entered into a written loan agreement with a Mr. A. N. Morgan and other officers of MVPC. The A. N. Morgan group advanced $35,000.00 to Mr. Diehl, which he deposited in his bank account. Mr. Diehl executed a promissory note for this $35,000.00, and he secured the loan with the aforementioned 50,005 shares of MVPC capital stock. The contract required that the $35,000.00 plus eight percent interest be repaid by May 7, 1957. The contract also granted the A. N. Morgan group an option to purchase 25,000 of the 50,005 shares for $1.00 per share, provided the option was exercised by May 7, 1957.
48. In the August of 1960 interview with revenue agents Naiser and McKnight, defendant and Mr. Diehl each told the agents that the $35,000.00 received from the A. N. Morgan group was used to operate a company called Plateau Uranium Consolidated, Inc. Defendant was president of Plateau Uranium Consolidated.
49. Mr. Diehl defaulted on the loan, and the A. N. Morgan group failed to exercise their 91-day option.
50. Subsequent to the default on the loan some members of the A. N. Morgan group favored the retention of the entire 50,005 MVPC shares held. On June 14, 1957, while the loan was still unpaid, the A. N. Morgan group agreed to retain 25,000 of the 50,005 shares held as collateral in lieu of payment of the $25,000.00 remaining to be paid on the loan.
*1296 51. The second transaction relating to Mr. Diehl's MVPC shares concerned a contract between Mr. Diehl and Bankers Life. Pursuant to this agreement, which was also entered into on June 14, 1957, Mr. Diehl transferred 25,005 shares of MVPC capital stock previously held by A. N. Morgan, for which he received $40,000.00. Of this amount Mr. Diehl deposited $29,027.78 in his bank account. The remaining $10,972.22 was paid to the A. N. Morgan group to cover the $10,000.00 balance on the $35,000.00 loan, and the 8 percent interest expense in the amount of $972.22. The contract required Mr. Diehl to repurchase 23,672 of the 25,005 shares transferred within one year for $75,015.00.
52. Mr. Diehl never repurchased the shares.
53. The 25,005 shares of MVPC transferred to Bankers Life was carried on the books of Bankers Life as an asset subsequent to the purchase of these shares by Bankers Life on June 14, 1957.
54. On July 14, 1958, a demand letter was sent to Mr. Diehl for payment of $75,015.00 in exchange for 23,672 of the 25,005 MVPC shares which Mr. Diehl had previously sold to Bankers Life. The 25,005 shares were ultimately sold by Bankers Life in 1959 to a Mr. Reed for the sum of $60,012.00.
55. In April of 1957 MVPC stock was registered by the Securities Exchange Commission for sale at $3.00 per share. During 1956 and 1957 MVPC shares ranged in selling price from $2.40 to $4.00 each.
56. In the August of 1960 interview with agents Naiser and McKnight, Mr. Diehl explained that the reason he took so much less than $3.00 per share for his MVPC stock was that actual production had not yet begun, and it was normal in the business for the value of the shares to go down during the organizational phase of a corporation.
VII. CONCLUSIONS OF LAW
1. Jurisdiction of this action is conferred upon this Court by virtue of 28 U.S.C. § 1340, 28 U.S.C. § 1345, and 26 U.S.C. § 7402(a).
A. Legal Sufficiency of Evidence Necessary in a Civil Tax Fraud Case
2. Defendant contends that there was no evidence of fraud as to the failure to report $4,500.00 of the $9,000.00 commissions received from Kennedy Van Sauns. She supports this contention with the rule that mere failure to report income is insufficient to establish fraud, citing Bryan v. Commissioner of Internal Revenue, 209 F.2d 822 (5th Cir. 1944). Failure to report income, standing alone, would indeed be insufficient evidence to satisfy the "clear and convincing" evidence standard required to prove fraud. Adame's Estate v. Commissioner of Internal Revenue, 320 F.2d 811, 812 (5th Cir. 1963). It is nevertheless some evidence of fraud and, depending on the circumstances surrounding taxpayer's omission, it may be properly considered as such. This rule, however, does impose the task on this Court of determining whether the record divulges sufficient additional evidence to support a finding of fraud.
The requisite specific intent necessary to prove the existence of fraud is rarely susceptible of direct proof. Hicks Co. v. Commissioner of Internal Revenue, 56 T.C. 982 (1971), aff'd, 470 F.2d 87 (1st Cir. 1972). It is invariably proved by circumstantial evidence. In deciding the qualitative and quantitative proof required to establish fraud in a civil tax fraud case, this Court is guided by the recent Fifth Circuit Court of Appeals opinion of McGee v. Commissioner of Internal Revenue, 519 F.2d 1121 (5th Cir. 1975). The Court in McGee held that the test was essentially the same as that required to prove willfulness in a criminal prosecution. 519 F.2d at 1125. The taxpayer in McGee had failed to report illegal kickbacks received during the years of 1958 through 1963. The Commissioner assessed deficiencies and offered evidence that taxpayer's omissions were fraudulent. The Tax Court found that the omissions were fraudulent and expressly set out the evidence upon which it based its finding. The Fifth Circuit affirmed this finding, and noted that "[i]t is the combination of . . . indicia [that] warranted the inference of fraud." 519 F.2d at 1126.
*1297 1. The $9,000.00 Commissions Received from Kennedy Van Sauns
3. Although the indicia of fraud relating to the $9,000.00 commissions Mr. Diehl received from Kennedy Van Sauns in 1957 cannot be as numerously capsulated as it was by the Tax Court in McGee, this Court has concluded that the circumstances surrounding this receipt, and Mr. Diehl's inconsistent explanations therefor satisfy the strict test augured by the Fifth Circuit. See Findings of Fact 10-15.
4. As to Mr. Diehl's explanation that the $9,000.00 had been received in two separate checks of $4,500.00 each, false statements made by an accused person to explain or defend his actions may be regarded by the factfinder as tending to establish consciousness of guilt and hence guilt itself. Wilson v. United States, 162 U.S. 613, 618, 16 S.Ct. 895, 40 L.Ed. 1090 (1896) (false explanation of incriminating circumstances in murder case); McGee v. Commissioner of Internal Revenue, supra at 1126; cf. United States v. Garza, 426 F.2d 949, 953 (5th Cir. 1970). See also C. McCORMICK, EVIDENCE § 273, at 660 (2d ed. 1972).
5. Defendant's joint income tax return for 1957 was prepared by a Mr. Walter Ebanks some time in June or July of 1958. Mr. Ebanks testified in deposition that Mr. Diehl had given him a rather detailed worksheet to aid in preparing the return. Finding of Fact 31. The worksheet consisted of a meticulous list of deductions, including several items of less than a dollar. It also listed the receipt of $4,500.00 from Kennedy Van Sauns. At the time that this worksheet was given to Mr. Ebanks, Mr. Diehl knew that he had deposited the $9,000.00 check from Kennedy Van Sauns in his bank account. He also knew at that time that he had not paid Mr. Huffman or the Industrial Management Corporation any amount relating to either this $9,000.00 or any other agreement concerning Kennedy Van Sauns. This Court has weighed defendant's explanation of carelessness in light of the painstaking care with which Mr. Diehl prepared his deductions, and has concluded that it is not credible.
2. Receipt of the 110,491 Shares of Texas Portland Capital Stock
6. For her contention that the evidence was legally insufficient to establish that the failure to report the receipt of the 110,491 shares of Texas Portland stock was fraudulent, defendant relies primarily on the argument that the shares were not taxable as a matter of law. If she prevailed with this argument, the government's power to avoid the three-year statute of limitations and reaudit her 1957 tax return would hinge entirely on this Court's finding that the omitted $4,500.00 commissions constituted fraud.[2] However, for reasons stated hereinafter, the Court has concluded that the receipt of the 110,491 shares was taxable income and should have been reported as such by the Diehls.
It is difficult to imagine how fraud could have been more compellingly established than was done in this case with regard to the receipt of the 110,491 shares. On two different occasions, both arising subsequent to the issuance and pledge of the 110,491 shares, Mr. Diehl by sworn statement asserted his ownership of these shares. Findings of Fact 20 & 24. It is uncontested that the basis for these claims was a board of directors' resolution awarding the shares in exchange for services rendered. Finding of Fact 17. On at least two occasions prior to 1957 Mr. Diehl had received capital stock in exchange for services rendered, Finding of Fact 26, and he had on numerous occasions been advised by experts as to the tax consequences of such receipts. Finding of Fact 27. After the actual issuance and pledge of the shares to American National Bank Mr. Diehl continued to receive expert advice as to the taxability of the receipt of these 110,491 shares. Findings of Fact 28, 32 & 33. Notwithstanding this advice, Mr. Diehl *1298 never once mentioned or otherwise notified his accountant, Mr. Ebanks, who prepared his 1957 return, of the receipt of these shares. Finding of Fact 31. Within a few months of the time that the Diehl's joint return for 1957 was filed, Mr. Diehl, in an effort to alter the tax consequences of the receipt of the 110,491 shares, succeeded in having the minutes of the June 14, 1957, directors' meeting falsified to reflect that the shares were never in fact issued to him, but rather, that he had been awarded an option to purchase the shares at five cents per share. Finding of Fact 34. Finally, in August of 1960, Mr. Diehl lied in an interview with revenue agents Naiser and McKnight in an attempt to conceal his knowledge or state of mind with regard to the receipt of the 110,491 shares. He averred at one point during the interview that he had never seen or signed the certificate issued by the corporation. Finding of Fact 29. He also claimed that no one had ever advised him as to the taxability of the receipt of these shares. Finding of Fact 30.
In summary, the circumstantial proof in this case of Mr. Diehl's bad faith in failing to report the receipt of the 110,491 Texas Portland shares is overwhelming. The expert advice he received both before and after the issuance of these shares, Findings of Fact 26, 27, 28, 32 & 33, and his various efforts to conceal the circumstances of this issuance, Findings of Fact 29, 30, 31 & 34, amply satisfy the rigid burden enunciated by the Fifth Circuit Court of Appeals in McGee v. Commissioner of Internal Revenue, supra, whenever the government seeks to prove fraudulent evasion of income taxes.
B. Receipt of the 110,491 Shares of Texas Portland Capital Stock
1. Taxability of Receipt Under § 61(a)
7. Defendant relies almost exclusively on the authority of James v. United States, 366 U.S. 313, 81 S.Ct. 1052, 6 L.Ed.2d 246 (1961), and Rev.Rul. 68-86 Cum.Bull. 184, for her position that the "conditional" issuance of the shares in question did not result in taxable income under § 61(a). "All income from whatever source derived," § 61(a), has been construed by the Supreme Court to encompass all "accessions to wealth, clearly realized, and over which the taxpayers have complete dominion." Commissioner of Internal Revenue v. Glenshaw Glass Co., 348 U.S. 426, 431, 75 S.Ct. 473, 477, 99 L.Ed. 483 (1955). A gain "constitutes taxable income when its recipient has such control over it that, as a practical matter, he derives readily realizable economic value from it." Rutkin v. United States, 343 U.S. 130, 137, 72 S.Ct. 571, 575, 96 L.Ed. 833 (1951). Citing the portion of the Supreme Court's decision in James, supra, which quotes with approval these earlier interpretations of taxable income under § 61(a), defendant argues that her husband never had complete dominion over the stock certificate, and hence never derived readily realizable economic value from it. The Court is of the opinion that neither the record nor the legal authorities cited support this contention.
The shares were actually issued on March 19, 1957. The original minutes of the June 26 special meeting of the board of directors reflect that pursuant to a
"need of funds on March 20, 1957, . . Mr. Diehl's stock [was] pledged as collateral [for the $200,000 line of credit] and "the Chairman of the Board . . . wired each Board member that the stock was being issued and received affirmative replies, said stock was issued and pledged to the bank."
Mr. Diehl, as a member of that board, president and principal architect of the corporation, corporate intermediary for the loan, and personal transferor of the 110,491 shares, exercised sufficient control to satisfy beyond cavil the "complete dominion" requirement of James v. United States, supra, and Commissioner v. Glenshaw Glass Co., supra. The corporation needed financing in order to complete preparations for operation. The January 14, 1957, resolution provided for compensating Mr. Diehl with 110,491 shares of capital stock on demand any time 90 days after commencement of operations. When Mr. Diehl committed his shares as collateral for the line of credit to the corporation, he had taken the last step *1299 towards obtaining the fruition of economic gain as owner of these shares. See Commissioner of Internal Revenue v. First State Bank of Stratford, 168 F.2d 1004 (5th Cir. 1948), cert. denied, 335 U.S. 867, 69 S.Ct. 137, 93 L.Ed. 412 (1948). In choosing to receive his shares in March rather than waiting to receive them pursuant to the January resolution, Mr. Diehl, as president and substantial shareholder of the company, personally orchestrated an accommodation to the company. This accommodation was culminated by pledging the 110,491 shares of stock received by him for services rendered.
8. Mr. Diehl at all times treated the January resolution and the March issuance of the 110,491 shares as satisfaction of his claim to the 110,491 shares of stock. His testimony in the reorganization proceedings, his filing of claims therein as owner of the stock, and his sworn assertions of ownership of the stock to the American National Bank, all support the conclusion that the 110,491 shares received in March of 1957 constituted taxable compensation over which Mr. Diehl exercised complete dominion and control.
9. Citing Rev.Rul. 68-86 Cum.Bull. 184, defendant maintains that the issuance in question here is tantamount to the issuance of restricted stock involved in that ruling. The Court does not agree. The taxpayer employee in Rev.Rul. 68-86 Cum.Bull. 184, elected to receive his salary bonus in stock subject to a restriction printed on the face of the shares which prevented the shares from being sold, assigned, transferred, discounted or pledged as collateral for a loan without the prior written consent of the salary committee of the employer's board of directors. These restrictions applied for the duration of employment and a number of years thereafter, and could not be modified without the approval of the corporation's salary committee. The Internal Revenue Service held that the receipt of shares under these circumstances did not constitute income as long as the restrictions were in effect.
Several controlling differences distinguish the stock restrictions considered in Rev.Rul. 68-86 Cum.Bull. 184, from the 110,491 shares received by Mr. Diehl in the present case.
10. First, the restrictions described in the ruling were printed on the certificate, and any potential buyer was therefore forewarned of the limitations on transferability. In the present case there were no restrictions on the face of the certificate. Indeed, pursuant to an agreement between the American National Banks and a Mr. S. Perry Brown, the shares were transferable to Mr. Brown for $200,000.00 at any time the bank so required. See Finding of Fact 10. Moreover, under Texas law to be effective any restriction on transferability must be conspicuously printed somewhere on the certificate. Ling & Company v. Trinity Savings & Loan Ass'n, 482 S.W.2d 841 (Tex. 1972). See also Tex.Laws 1943, ch. 397, § 15. In Morgan v. Commissioner of Internal Revenue, 309 U.S. 78, 80-81, 60 S.Ct. 424, 426, 84 L.Ed. 585 (1940), the Supreme Court held:
"State law creates legal interests and rights. The federal revenue acts designate what interests or rights, so created, shall be taxed."
The legal interest created in the present case was a valid and transferable certificate for 110,491 shares of a Texas corporation. Local law in the sense of local statutes and controlling precedents governs the rights of assignability and transfer of interests. Blair v. Commissioner, 300 U.S. 5 (1937).
11. Second, and more importantly, defendant's husband in the present case bore a different relationship to his employer than did the taxpayer described in Rev.Rul. 68-86 Cum.Bull. 184. Mr. Diehl was not merely an employee of the corporation, but rather, its president and principal architect. His personal participation and control in influencing both the loan transaction with the American National Bank and the issuance of his stock distinguish the nature of the restrictions he faced from the restrictions involved in Rev.Rul. 68-86 Cum.Bull. 184. Any restrictions on the 110,491 shares in this case were self-imposed.
For these reasons the Court has concluded that the 110,491 shares of Texas Portland *1300 stock should have been reported as ordinary income by the Diehls in their 1957 joint income tax return.
2. Valuation of the 110,491 Texas Portland Shares
a. Blockage
12. In an effort to more accurately assess the value of the 110,491 Texas Portland shares issued to Mr. Diehl on March 19, 1957, this Court directed the parties to brief the possible effect that blockage might have had on Mr. Diehl's ability to dispose of these shares. See Champion v. Commissioner of Internal Revenue, 303 F.2d 887 (5th Cir. 1962).
On the basis of Rushton v. Commissioner of Internal Revenue, 498 F.2d 88 (5th Cir. 1974), United States v. Rexach, 482 F.2d 10 (1st Cir. 1973), and Bryan v. Commissioner of Internal Revenue, 209 F.2d 822 (5th Cir. 1954), this Court entered a pretrial ruling that the burden of production and persuasion as to the applicability and extent to which blockage affected the fair market value of the 110,491 shares should be borne by the defendant. No evidence was produced at the second trial with regard to the possible effect of blockage. The Court is therefore without any basis for considering whether and to what extent, if any, the size of the block of shares issued to Mr. Diehl affected its fair market value.
b.
13. Assessments made by the Internal Revenue Service are presumptively correct. E. g., Cummings v. Commissioner of Internal Revenue, 410 F.2d 635 (5th Cir. 1969). In order to overcome this presumption, a taxpayer defending a collection suit must establish that the government's assessment was arbitrary before the burden shifts to the government to establish the amount of deficiency owed. Bar L Ranch v. Phinney, 426 F.2d 995 (5th Cir. 1970); United States v. Lease, 346 F.2d 696 (2d Cir. 1965). In this case the government's assessment of the taxable income relating to the 110,491 Texas Portland shares issued to Mr. Diehl was based upon a fair market value of $5.00 per share.
14. Fair market value of an asset is measured by what a willing buyer would pay a willing seller when neither is under any compulsion and both are reasonably informed as to all relevant facts. E. g., Bar L Ranch v. Phinney, supra at 996, 999; Willow Terrace Development Co. v. Commissioner of Internal Revenue, 345 F.2d 933 (5th Cir. 1965), cert. denied, 382 U.S. 938, 86 S.Ct. 389, 15 L.Ed.2d 349 (1965).
15. The evidence produced at trial unequivocally demonstrates that the fair market value of the Texas Portland stock during the latter part of 1956 and most of 1957 was as the government contends approximately $5.00 per share. Findings of Fact 8, 35, 36 & 37. In the absence of exceptional circumstances the price at which shares are bought and sold in an open market is by far the best evidence of their value. 10 Mertens, Federal Income Taxation § 59.13 (1976).
16. It is the government's position that the appropriate date for fixing the taxable event resulting from the receipt of the 110,491 shares is either the date of issuance on March 19, 1957, or the date on which Mr. Diehl would have been entitled to the shares pursuant to the January 14 "90 days after operations" resolution of the board of directors, which would have occurred some time in July of 1957. The Court rejects this latter, hypothetical date of receipt or issuance. The Court has concluded in Section VII.B.1. supra, that Mr. Diehl's personal control and participation in the early issuance of these shares on March 19, 1957, constituted sufficient dominion and control to result in a taxable event on that date. The Court is therefore of the opinion that it was as of that date that beneficial ownership commenced for the Diehls, and it is as of that date that valuation of the shares should be determined. See Bankers Trust Co. v. United States, 518 F.2d 1210, 1216, 207 Ct.Cl. 422 (1975).
17. A basic principle of federal income taxation is that items are taken into income at their "then" current value. Id. This principle applies even if the receipt of property is complex in that the current value of the item received may not be self-evident. *1301 Id. at 1217. Moreover, this valuation should be determined without regard to subsequent illuminating events. Grill v. United States, 303 F.2d 922, 927, 157 Ct.Cl. 804 (1962). This precludes the Court from considering the fact that Mr. Diehl in 1960 ultimately received only 32,500 of these 110,491 shares, pursuant to a state court ruling that the 110,491 shares issued to Mr. Diehl constituted watered stock, Finding of Fact 38.
18. Although the basis for defendant's contention as it related to the question of taxability might well have influenced the value of the 110,491 block of shares issued to Mr. Diehl, this Court is confronted with the uncontroverted fair market value of $5.00 coupled with the presumption of correctness of assessment which is enjoyed by the government. Bar L Ranch v. Phinney, supra. The defendant has given this Court no foundation upon which to dispute this assessment. Her position quite simply is that the shares were worth nothing. This Court disagrees; there is no evidence to support the contention that the self-imposed condition to pledge the issued shares was so restrictive as to completely destroy their value to the Diehls. Thus, while the conditional issuance may well have reduced the value of the 110,491 shares, this Court is in no position to hazard a guess as to how to compute the degree, if any, to which this value was diminished.
Defendant has failed to overcome the presumption of correctness of the government's assessment at $5.00 per share, which is amply supported by the evidence.
C. Defendant's Claim for Offsetting Interest Deductions, Generally
19. The principles that control the tax consequences of both the A. N. Morgan and the Bankers Life transactions are similar; although the facts of these transactions differ somewhat, neither party has argued that these transactions are distinguishable from a standpoint of capital gains. It is not disputed that by virtue of these two business arrangements, Mr. Diehl parlayed 50,005 MVPC shares having a cost basis of $23,435.00[3] into $64,027.78,[4] which he deposited in his bank account. Evaluating the substance of these two transactions, the Court agrees with the parties to this action that each resulted in capital gains which should have been reported on defendant's 1957 income tax return.
20. Defendant does not dispute that these two transactions resulted in the taxable disposition of appreciated assets which should have been reported on her 1957 joint income tax return. Her position is that she should now be permitted to offset the unreported capital gains with interest deductions to which she was entitled in 1957. This argument finds support in an opinion wherein a taxpayer in a civil suit for fraudulent failure to report income was permitted to avoid tax liability by establishing that understated deductions exceeded the income not reported. Arctic Ice Cream v. Commissioner of Internal Revenue, 43 T.C. 68, 73-74 (1964).
Defendant does not argue that there ever existed any oral or written contractual agreement providing for the payments of interest now sought to be deducted. Nor does she argue that it was ever the intention of the parties to designate these hypothetical amounts as interest. She argues simply that interest under § 163(a) is compensation which is paid for the use of money, regardless of whether it is exorbitant or even usurious, citing Wiggin Terminals, Inc. v. U. S., 36 F.2d 893 (1st Cir. 1929); and *1302 Arthur R. Jones Syndicate v. Commissioner of Internal Revenue, 23 F.2d 833 (7th Cir. 1927). She submits that she should now be permitted to deduct the amount by which the fair market value of the shares transferred exceeded the sums received from the two lenders.
21. In support of this argument defendant urges this Court to apply the "as if" variation of the rule that the substance of a transaction should prevail over its form. She argues that both transactions should be treated "as if" Mr. Diehl had first sold shares at their fair market value and then paid the entire proceeds to the lender. Defendant cites no cases wherein the "as if" theory has prevailed in favor of a taxpayer. Indeed, the only case cited by defendant as authority for this theory was Henry T. Simonson, 34 T.C.M. 47 (1975), wherein the court, in ruling against the taxpayer held that the transfer of stock in payment of an obligation constituted a sale.
22. To the extent that neither items of income nor items of deduction need be in the form of cash so long as they can be valued in terms of cash, the application of this "substance over form" rule is appropriate. See 2 Mertens § 11.30 at 161 (1976). To this extent treating property "as if" it were the equivalent of cash illuminates the actual substance of a transaction. And to this extent, the Court recognizes the cash equivalent of each of the 50,005 Mississippi Portland shares in the present case as approximately $3.00 per share. Findings of Fact 55 & 56.
23. A deduction, however, is a matter of legislative grace, P. G. Lake v. Commissioner of Internal Revenue, 4 T.C. 1 (1944), aff'd 148 F.2d 898 (5th Cir. 1945), cert. denied, 326 U.S. 732, 66 S.Ct. 41, 90 L.Ed. 436 (1945), and may be taken only when permitted by statute. Quinn v. Commissioner of Internal Revenue, 524 F.2d 617, 625 (7th Cir. 1975). In order for defendant to prevail, she must first establish that the deductions for interest which she now asserts come within the purview of § 163.[5]National Farmers Union Service Corp. v. United States, 400 F.2d 483 (10th Cir. 1968). Defendant has pointed to no realistic way in which the Court can ignore what actually transpired in this case. See W. L. Moody Cotton Co. v. Commissioner of Internal Revenue, 143 F.2d 712, 714 (5th Cir. 1944).
This Court is unable to discern how any interest deduction would result for defendant in either transaction, regardless of the fiction employed. For this reason alone defendant's claim for offsetting interest deductions is without merit.
Defendant argues, and it appears from the evidence, Findings of Fact 55 & 56, that the fair market value of the MVPC shares in June of 1957 approximated $3.00 per share. However, since the "as if" computations supplied by defendant would result in increased capital gains based on imaginary sales at the "as if" price, and since the Court here determines that the accompanying "as if" interest deductions sought are without merit, the Court concludes that computations of unreported capital gains should be based upon the amounts of money actually received from A. N. Morgan and Banker's Life in these two transactions. This conclusion comports with the government's computations of deficiency reflected in its Notice of Deficiency. Government Exhibit 18.
1. The A. N. Morgan "Secured Loan" Transaction
24. Defendant concedes that the transfer of 25,000 shares of MVPC capital stock to A. N. Morgan on June 14, 1957, in exchange for the release of $25,000.00 of her debt resulted in a sale, and it is well established that a debt secured by stock which is later permitted to be kept by the lender constitutes a sale. E. g., Peninsula Properties Co. v. Commissioner, 47 B.T.A. 84 (1942). Urging the previously discussed "as if" theory defendant asks this Court to treat the A. N. Morgan transaction "as if" Mr. Diehl had sold 25,000 of his MVPC *1303 shares for $3.00 per share, and had applied the entire $75,000.00 proceeds to the payment of $25,000.00 of his $35,000.00 debt. She argues that the $50,000.00 difference between the value of the stock and the $25,000.00 received should be characterized as interest.
25. However, before the taxpayer is entitled to a deduction for interest expense under § 163(a), she must first demonstrate that there was an obligation on her part to pay the interest contended. Pounds v. United States, 372 F.2d 342 (5th Cir. 1967). Defendant has failed to so demonstrate in this case. On June 14, 1957, when Mr. Diehl was in default on his loan from the A. N. Morgan group, the 25,000 MVPC shares held as collateral were not retained pursuant to the option agreement since the option had lapsed. Hence, the Court is not confronted with the question of whether the loan agreement itself created an obligation to pay interest at some later date, since repayment of the loan was consummated pursuant to a subsequent and independent agreement. The record reflects no evidence of any obligation owed to the A. N. Morgan group on Mr. Diehl's part as of June 14, 1957, other than to repay the $35,000.00 borrowed plus eight percent interest. Moreover, the provision in the loan agreement for eight percent interest, coupled with the absence of any express provision for the interest defendant seeks here to deduct, further illustrates that there was in fact no obligation to pay the latter. See D. Loveman & Son Export Corp. v. Commissioner, 34 T.C. 776, 805 (1960).
2. The Bankers Life Transaction
26. The transfer of 25,005 shares of MVPC shares to Bankers Life on June 14, 1957, unlike the secured loan agreement with the A. N. Morgan group, resulted in a complete divestiture of 25,005 shares to Bankers Life pursuant to the June 14, 1957, repurchase agreement. Findings of Fact 51, 52, 53 & 54. Defendant does not dispute that a sale occurred on that date.
As in the A. N. Morgan transaction, defendant urges the Court to treat the Bankers Life transaction "as if" Mr. Diehl had first sold the 25,005 shares of MVPC stock at its fair market value of $3.00 per share and then paid the proceeds to the lender in consideration for the $40,000.00 loan. A similarly unrealistic transaction resulted from applying the "as if" notion to the A. N. Morgan loan. However, unlike the contract with A. N. Morgan, defendant can point to the Bankers Life contract and establish that Mr. Diehl's obligation to transfer shares worth $75,015.00 to Bankers Life was an integral part of the agreement. This would seemingly satisfy the "obligation to pay" requirement pronounced in Pounds v. United States, supra, 372 F.2d at 352.
27. However, proof of an obligation to pay, without more, is not sufficient to entitle the taxpayer to an interest deduction. See Kraft Foods Co. v. Commissioner of Internal Revenue, 232 F.2d 118, 123 (2d Cir. 1956). Although "indebtedness" falls within the broad definition of "obligation," not all "obligations" constitute "indebtedness". Deputy v. Dupont, 308 U.S. 488, 497, 60 S.Ct. 363, 84 L.Ed. 416 (1940). The taxpayer must show that what he has characterized as "interest" constitutes an amount payable or owing on an obligation of indebtedness. Tomlinson v. 1661 Corp., 377 F.2d 291 (5th Cir. 1967).
Mr. Diehl incurred a twofold obligation in his agreement with Bankers Life. First, he was obligated to transfer his 25,005 shares to Bankers Life; again, defendant does not dispute that this transfer constituted a sale not reported in her 1957 joint income tax return. And she again characterizes the value of the transferred shares in excess of $40,000.00 as interest. But, this value could not have created a deductible interest expense because it was not an obligation on indebtedness. Rather, it was an obligation arising out of a sales contract to sell 25,005 shares of MVPC capital stock, and it was no different from any other transaction wherein a capital asset is sold for less than its undisputed market value. Defendant is now arguing that she is entitled to an interest deduction measured by the extent of her husband's bad bargain.
Mr. Diehl's second obligation arising out of his contract with Bankers *1304 Life was his promise to repurchase 23,672 of the 25,005 shares of MVPC stock within one year of June 14, 1957. But it is now and was in 1957 clearly settled that an interest deduction was not deductible by a cash basis taxpayer until actual payment of the interest was made.[6]See, e. g., Bennett Properties Co. v. Commissioner of Internal Revenue, 45 B.T.A. 696 (1941); Leadbetter v. Commissioner of Internal Revenue, 39 B.T.A. 629 (1939). See also Quinn v. Commissioner of Internal Revenue, 524 F.2d 617 (7th Cir. 1975). In this case actual payment on the repurchase was never made. But even if Mr. Diehl had repurchased the 23,672 shares pursuant to agreement, and even if the Court ruled that the interest deduction contended here was a permissible one under § 163(a), it nevertheless would not be deductible against income in 1957, unless the repurchase occurred in 1957. Quinn v. Commissioner of Internal Revenue, supra.
The Court concludes that neither of the two obligations running from Mr. Diehl to Bankers Life resulted in deductible obligations of indebtedness.
VIII. CONCLUSION
28. The government succeeded in proving by clear and convincing evidence that Mr. Diehl fraudulently omitted from his 1957 joint income tax return $4,500.00 of $9,000.00 received from Kennedy Van Sauns. The government also proved by clear and convincing evidence that Mr. Diehl fraudulently avoided the tax consequences of the receipt of the 110,491 Texas Portland shares. Although he never knew precisely the extent of his liability as to the issuance of these shares, he knew that he had incurred a substantial tax liability.
Proof by clear and convincing evidence of fraud as to these items of income avoids the three year statute of limitations imposed by § 6501(a), and permits a reaudit of the Diehls' 1957 joint return in its entirety. Lowy v. Commissioner of Internal Revenue, supra.
29. Although defendant is not liable for the fifty percent fraud penalty assessed against her under § 6653(b), she did not sustain her burden of proving that she qualifies as an "innocent spouse" under § 6013(e), and is hence liable for all other assessments against her.
30. The disposition by Mr. Diehl of the 50,005 shares of MVPC resulted in unreported capital gains which should have been reported in the Diehls' 1957 joint return in the amount, as adjusted, of $19,894.17, as reflected in the government's Notice of Deficiency. Government Exhibit 18.
31. In the event that any of the foregoing Findings of Fact also constitute Conclusions of Law, they are also adopted as Conclusions of Law. In the event that any of the foregoing Conclusions of Law also constitute Findings of Fact, they are also adopted as Findings of Fact.
Counsel for the government will prepare and submit an appropriate judgment for entry within sixty (60) days, incorporating by reference these Findings of Fact and Conclusions of Law and setting out the monetary consequences as well as making appropriate provision for allocation of costs.[7]
NOTES
[1] Hereinafter, all statutory references not otherwise designated refer to the Internal Revenue Code of 1954, as amended (Title 26, U.S.C.).
[2] If the receipt of the 110,491 Texas Portland shares was not taxable as a matter of law, regardless of this Court's finding of fraud, Mr. Diehl could not have intended to do any act recognized as a violation of the revenue laws. Cf. G. Hughes, One Further Footnote on Attempting the Impossible, 42 N.Y.U.L.Rev. 1105, 1022 (1967).
[3] The 50,005 shares are represented by a certificate for 7,145 shares, and a certificate for 42,860 shares. Finding of Fact 45. The government valued the 7,145 shares received in payment for services rendered to MVPC at $3.00 each for a total of $21,435.00; defendant does not dispute this figure. The 42,860 Mississippi Portland shares acquired in exchange for 8,572 shares of capital stock of Vicksburg Properties, Inc., had a cost basis of $2,000.00.
[4] Mr. Diehl received $35,000.00 from the A. N. Morgan group and $40,000.00 from Bankers Life. Findings of Fact 42 & 47. The total consideration exchanged for these amounts consisted of (1) 50,005 shares of MVPC capital stock, and (2) $10,972.22 paid to the A. N. Morgan group.
[5] "(a) General rule.There shall be allowed as a deduction all interest paid or accrued within the taxable year on indebtedness."
[6] Although it has not been stipulated, it is clear from the taxpayer's tax return for the year 1957, the balance sheet prepared by Mr. Diehl's accountant as of February, 1957, and the lack of any books or records in evidence which would indicate otherwise, that Mr. Diehl used the cash receipts and disbursements method of accounting.
[7] In the interlude between the second trial of this action and this opinion, defendant has filed a Post Trial Brief and a First Motion for Sanctions. The government has responded in opposition to both. Defendant has moved to have this Court dismiss her First Motion for Sanctions.
The Court, having read and considered defendant's Post Trial Brief, has concluded that the material contained therein has no bearing on the resolution of this action. Moreover, the evidence set out therein refers to a document which was not offered into evidence. Accordingly, the government's Motion to Strike Defendant's First Post Trial Brief is granted.
In her First Motion for Sanctions, defendant, inter alia, charges the government's attorney in this case, Mr. Barker, and the special agent of the Internal Revenue Service who investigated this case, Mr. Naiser, with deliberately and deceitfully withholding from defendant's counsel, Mr. Pope, Mr. Naiser's report dated March 17, 1961. Having reviewed that portion of the transcript which demonstrates this allegation to be wholly without any factual basis, the Court hereby grants defendant's Motion to Dismiss Defendant's First Motion for Sanctions.
| {
"pile_set_name": "FreeLaw"
} |
984 F.2d 1112
UNITED STATES of America, Plaintiff-Appellee,v.Timothy Tyrone ROCKWELL, Defendant-Appellant.
No. 92-6121.
United States Court of Appeals,Tenth Circuit.
Jan. 29, 1993.
William P. Earley, Asst. Federal Public Defender, Oklahoma City, OK, for defendant-appellant.
Teresa Black, Asst. U.S. Atty. (Timothy D. Leonard, U.S. Atty., with her on the briefs), Oklahoma City, OK, for plaintiff-appellee.
Before ANDERSON and EBEL, Circuit Judges, and LUNGSTRUM,* District Judge.
STEPHEN H. ANDERSON, Circuit Judge.
1
Timothy Tyrone Rockwell's supervised release was revoked for possession of an unprescribed controlled substance. He appeals the district court's ensuing order for incarceration and further supervised release. The questions which we must decide are: (a) whether the presence of a controlled substance in the body of a person on supervised release constitutes "possession" of that substance for the purposes of 18 U.S.C. § 3583(g), assuming the requisite mens rea; and (b) whether a district court can impose both incarceration and further supervised release upon revocation of the originally-imposed supervised release for unlawful possession of a controlled substance pursuant to 18 U.S.C. § 3583(g). For the reasons set forth below, we answer the first question in the affirmative and the second in the negative. Accordingly, we affirm in part but vacate that part of the district court's order imposing incarceration and supervised release and remand the case for reconsideration and imposition of a term of incarceration.
BACKGROUND
2
After conviction for bank robbery, Rockwell was sentenced to thirty months in prison, to be followed by three years of supervised release. He completed his prison sentence and began supervised release, which included the standard condition of supervision number 8: "the defendant ... shall not ... possess [or] use ... any narcotic or other controlled substance ... except as prescribed by a physician." R. Vol. I tab 17 at 4.
3
On December 27, 1991, Rockwell tested positive for marijuana use in a random urinalysis. He admitted that he had used marijuana a few days prior to that test. On January 8, 1992, he again tested positive for marijuana, although he denied additional marijuana use on or just prior to this date, claiming that the positive results were due to a residue of marijuana still in his body from the previous use. On February 19, 1992, he tested positive for cocaine use, which he attempted to excuse by recounting that a friend had given him a "tablet" to ease the pain of a toothache. He stated that although the substance was apparently cocaine, he did not know it was, and thus he could not have willfully and knowingly violated the condition of his supervised release prohibiting the use of drugs on this occasion.
4
After these three positive urinalyses, Rockwell was taken into custody, and the district court held a supervised release revocation hearing. At this hearing, the court was not persuaded by Rockwell's testimony explaining the results of the second and third urinalyses.1 The court concluded that Rockwell had knowingly and wrongfully used marijuana and that he had knowingly and willfully used cocaine as indicated by the urinalysis test results, noting that Rockwell admitted the knowing use of marijuana a few days prior to December 27, 1991. R. Vol. II at 45. The court also stated that knowing, willful use of a controlled substance necessarily implies possession of that substance. Id. at 48-49.
5
The court held that Rockwell had violated the terms of his supervised release and that the violation was governed by 18 U.S.C. § 3583(g). See R. Vol. II at 46, 48-49. Section 3583(g) provides:
6
If the defendant is found by the court to be in the possession of a controlled substance, the court shall terminate the term of supervised release and require the defendant to serve in prison not less than one-third of the term of supervised release.
7
The court ordered that Rockwell serve twelve months of incarceration, to be followed by twenty-five months and twenty-eight days of further supervised release. R. Vol. II at 49; United States v. Rockwell, No. CR 89-61-A, Order (W.D.Okla. Mar. 13, 1992). Rockwell appeals both the determination that he violated 18 U.S.C. § 3583(g), and the sanction of supervised release in addition to a term of incarceration.
8
While we review orders revoking supervised release for abuse of discretion, United States v. Stephenson, 928 F.2d 728, 731-32 (6th Cir.1991); United States v. Dillard, 910 F.2d 461, 464 (7th Cir.1990), we review de novo the legal questions relating to the applicability of § 3583(g) and the imposition of both incarceration and additional supervised release following termination of supervised release for unlawful possession of a controlled substance. See United States v. Blackston, 940 F.2d 877, 882 (3d Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 611, 116 L.Ed.2d 634 (1991).
DISCUSSION
I.
9
Rockwell contends that the district court erred in applying § 3583(g) to terminate his supervised release because that statute requires a finding of possession of drugs, and, at most, the evidence only proves that he was using drugs.2 In other words, Rockwell argues that use does not constitute possession.
10
The district court was correct. There can be no more intimate form of possession than use. We hold that a controlled substance in a person's body is in the possession of that person for purposes of 18 U.S.C. § 3583(g), assuming the required mens rea. "Use" in this context is synonymous with possession. See United States v. Courtney, 979 F.2d 45, 49 (5th Cir.1992) ("[U]nder the present statutory scheme for criminal offenses, use is subsumed within possession."); United States v. Smith, 978 F.2d 181, 182 (5th Cir.1992) (admitted use of contraband substance can be evidence of possession for purposes of § 3583(g)); United States v. Baclaan, 948 F.2d 628, 630 (9th Cir.1991) ("possession," within the meaning of § 3583(g), was properly determined based on positive urine tests for methamphetamines) (citing Blackston, 940 F.2d at 891; United States v. Oliver, 931 F.2d 463, 464-65 (8th Cir.1991) (affirming revocation of supervised release on the basis of positive urinalysis for various controlled substances); United States v. Ramos-Santiago, 925 F.2d 15, 17 (1st Cir.) (same), cert. denied, --- U.S. ----, 112 S.Ct. 129, 116 L.Ed.2d 96 (1991); United States v. Kindred, 918 F.2d 485, 487 [ & ] n. 3 (5th Cir.1990) (same; "Knowing use of drugs is akin to possession.")); Blackston, 940 F.2d at 883 ("evidence of drug use is undoubtedly probative of possession"); cf. United States v. Thompson, 976 F.2d 1380, 1381 (11th Cir.1992) (§ 3583(e) and (g) applied without comment after offender tested positive for cocaine use); United States v. Graves, 914 F.2d 159, 161 (8th Cir.1990) (dictum equating use and possession); United States v. Granderson, 969 F.2d 980, 981-82 (11th Cir.1992) (equating use and possession in the probation revocation context); United States v. Gordon, 961 F.2d 426, 429 (3d Cir.1992) (same).3
11
We agree with the district court's statement that "it's just errant sophistry ... that somebody has knowingly and willfully used a controlled substance and simultaneously claim[s] that that does not necessarily imply possession." R. Vol. II at 48. Accordingly, we affirm that part of the district court's disposition in which the court applied 18 U.S.C. § 3583(g) to terminate Rockwell's supervised release for possession of a controlled substance.4
II.
12
Rockwell next contends that the district court erred in imposing both incarceration and additional supervised release as a sanction following revocation of his original term of supervised release. Section 3583(g) does not resolve the issue. It requires a sanction of incarceration and fixes a minimum term. It does not address the maximum term, or whether and to what extent an additional term of supervised release may also be imposed. For answers to those questions the district court, reading section 3583 as a whole, must look to a preceding subsection of the statute, 18 U.S.C. § 3583(e).5 See Thompson, 976 F.2d at 1381 (imprisonment for maximum term allowed by § 3583(e)(3), imposed for infraction covered by § 3583(g), rather than shorter term allowed by U.S.S.G. § 7B1.4, p.s., was not an abuse of discretion); United States v. Headrick, 963 F.2d 777, 782-83 (5th Cir.1992) (maximum sentence provided by § 3583(e)(3), imposed for infraction covered by § 3583(g), was not plainly unreasonable); United States v. Montez, 952 F.2d 854, 859-60 & n. 2 (5th Cir.1992) (approved use of the maximum term of imprisonment from § 3583(e)(3) in a § 3583(g) case; applied the preponderance of the evidence standard from § 3583(e)(3)); Oliver, 931 F.2d at 465 (imprisonment for a term greater than the minimum required by § 3583(g) but less than the maximum allowed by § 3583(e)(3) "was reasonable and well within the statutory limits").
13
Rockwell concedes that under our decision in United States v. Boling, 947 F.2d 1461 (10th Cir.1991), the sanctions imposed upon him are permissible under § 3583(e).6 Boling, rejecting an opposite view by the Ninth Circuit in United States v. Behnezhad, 907 F.2d 896 (9th Cir.1990), holds that upon revocation of supervised release, § 3583(e) allows courts to order incarceration and a further period of supervised release.
14
Three developments have occurred with respect to this issue subsequent to Boling. First, four circuits which have addressed the issue have agreed with the Ninth Circuit's result in Behnezhad and held that § 3583(e) does not allow both incarceration and the imposition of further supervised release. See United States v. McGee, 981 F.2d 271 (7th Cir.1992); United States v. Koehler, 973 F.2d 132, 134-36 (2d Cir.1992), cited in United States v. Bermudez, 974 F.2d 12, 13 (2d Cir.1992) (per curiam); United States v. Cooper, 962 F.2d 339, 340-42 (4th Cir.1992), cited in United States v. Copley, 978 F.2d 829, 832 (4th Cir.1992); United States v. Holmes, 954 F.2d 270, 271-73 (5th Cir.1992), cited in United States v. Courtney, 979 F.2d at 51. In dictum, the Third Circuit has agreed with the majority position, and the Eleventh Circuit has recognized the split in the circuits created by the Boling decision and hinted its agreement with the Ninth Circuit as well. See United States v. Gozlon-Peretz, 894 F.2d 1402, 1405 n. 5 (3d Cir.), amended, 910 F.2d 1152 (3d Cir.1990), aff'd on other grounds, 498 U.S. 395, 111 S.Ct. 840, 112 L.Ed.2d 919 (1991) ("[A]fter revocation of a supervised release term, there is no provision for additional post-release supervision."); United States v. Williams, 958 F.2d 337, 339 n. 1 (11th Cir.1992) ("Revocation of the original term is, at the very least, linguistically inconsistent with the simultaneous extension or modification of that same term.... [I]t may be that the sentencing judge has the power to revoke the original term of supervised release or to modify that original term, but not both.").
15
Thus, seven circuits in all have either held directly contrary to Boling or made it clear that they agreed with the majority position. Only one circuit has reached a result which would allow both incarceration and further supervised release under § 3583(e); but did so on grounds different from those upon which Boling relied. See United States v. Schrader, 973 F.2d 623, 624-25 (8th Cir.1992) (inferring powers from the statutory language of § 3583(e)(3)).
16
Second, the proposed legislation noted in U.S.S.G. § 7B1.3, comment. (n. 3), and relied on by the majority in the Boling decision, the Biden-Thurmond Violent Crime Control Act of 1991, S. 1241, 102nd Cong., 1st Sess., § 3404(h) (1991), 137 Cong.Rec. S10021 (daily ed. July 15, 1991), was not enacted into law. See 1 Cong. Index (CCH) 21,022 (1991-92) (Senate indefinitely postponed S. 1241; H.R. 3371 passed in lieu of S. 1241 on Nov. 21, 1991); 1 Cong. Index (CCH) 35,045 (1991-92) (Senate rejected conference report on H.R. 3371, which contained S. 1241, on Nov. 27, 1991); 1 Cong. Index (CCH) 34,513 (cloture failed on conference report for H.R. 3371, on March 19, 1992). It is impossible to tell whether this particular part of the legislation played any role in the failure of this very massive bill, but the fact remains that no further legislation on the subject has been enacted.
17
Third, the Boling decision emphasized the importance of the Sentencing Commission's interpretation of § 3583, as enunciated in U.S.S.G. § 7B1.3(g)(2) & comment. (n. 3).7 However, this rationale was undercut recently when, in United States v. Lee, 957 F.2d 770, 772-74 (10th Cir.1992), we held that while the policy statements in U.S.S.G. Chapter 7 must be considered by the district court, they are not mandatory. Accord United States v. Brooks, 976 F.2d 1358, 1360 (10th Cir.1992).
18
These developments warrant this court's serious reconsideration of Boling. Of course, a three-judge panel of this court cannot overrule an earlier decision of the circuit. United States v. Walling, 936 F.2d 469, 472 (10th Cir.1991). Consequently, we have sua sponte presented this issue to all the active judges of the court, see United States v. Taylor, 828 F.2d 630, 633 (10th Cir.1987), and we have now been authorized by those judges to announce that this circuit's prior decision in United States v. Boling, 947 F.2d 1461 (10th Cir.1991), is hereby overruled.
19
We have also been authorized to hold, as the law of this circuit governing pending and future cases, that upon breach of a condition of supervised release, the district court may revoke supervised release and order the defendant to serve a term in prison pursuant to 18 U.S.C. § 3583(e)(3), or may extend the defendant's term of supervised release pursuant to § 3583(e)(2), but not both. This holding serves the language of the statute. It would not be accurate to say, however, that the statute is any less subject to differing interpretation now than when we decided Boling.8
20
Our holding on this issue compels the conclusion that Rockwell cannot be ordered to serve an additional term of supervised release. Since § 3583(g) requires incarceration, the options presented in §§ 3583(e)(2) and (e)(4) are not available to the court, and § 3583(e)(3) is available only to the extent of fixing the maximum term of incarceration which may be imposed.9
21
However, we vacate and remand rather than partially reverse that portion of the district court's order imposing both incarceration and supervised release upon Rockwell. We do so because the record does not reveal whether or not the district court's decision to sentence Rockwell to the statutory minimum of twelve months in prison was affected by the imposition of further supervised release. The district court must be allowed to reconsider sanctions in light of and consistent with this opinion.
CONCLUSION
22
For the reasons stated above, we AFFIRM the district court's termination of Rockwell's supervised release pursuant to 18 U.S.C. § 3583(g), for unlawful possession of a controlled substance. We VACATE that part of the district court's order imposing incarceration and supervised release, and REMAND the case to the district court for reconsideration of the term of incarceration to be imposed.
*
The Honorable John W. Lungstrum, United States District Court for the District of Kansas, sitting by designation
1
The district court found that the urinalysis test results were "entirely regular in all respects." Rockwell does not contest that finding
2
According to Rockwell, if § 3583(g) does not apply, but revocation of supervised release was still justified due to violation of release condition Number 8, then the court was required to look to the sentencing guideline recommendations of U.S.S.G. § 7B1.4, p.s. (a table listing the terms of imprisonment following revocation of supervised release, arranged by category of the defendant's original crime rather than according to the conduct for which the supervised release was revoked)
Counsel for Rockwell conceded at oral argument that if § 3583(g) does apply, the statute supersedes the guideline provision. Cf. U.S.S.G. § 5G1.1; United States v. Berlier, 948 F.2d 1093, 1095 (9th Cir.1991) ("[A] statute controls over the Guidelines when the two conflict."); accord United States v. Boyd, 961 F.2d 434, 439 (3d Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 233, 121 L.Ed.2d 168 (1992); United States v. Larotonda, 927 F.2d 697, 698 (2d Cir.1991).
3
The Guidelines Commission explicitly "[left] to the court the determination of whether evidence of drug usage established solely by laboratory analysis constitutes 'possession of a controlled substance' as set forth in 18 U.S.C. [s] 3583(g)." U.S.S.G. § 7B1.4, comment (n. 5)
4
Because Rockwell admitted one episode of marijuana use, we do not need to resolve Rockwell's challenges to the second positive urinalysis test for marijuana and the positive urinalysis test for cocaine
5
18 U.S.C. § 3583(e) provides, in pertinent part, that in the face of violation of conditions of supervised release and under certain enumerated conditions, the court may
(2) extend a term of supervised release ... and may modify, reduce, or enlarge the conditions of supervised release, at any time prior to the expiration or termination of the term of supervised release, ...
(3) revoke a term of supervised release, and require the person to serve in prison all or part of the term of supervised release without credit for time previously served on postrelease supervision, ...; or
(4) order the person to remain at his place of residence during nonworking hours and, if the court so directs, to have compliance monitored by telephone or electronic signaling devices, except that an order under this paragraph may be imposed only as an alternative to incarceration.
(emphasis added).
6
At the revocation hearing, Rockwell urged the court to apply the more lenient imprisonment range for violation of conditions of supervised release found in U.S.S.G. § 7B1.4, p.s. (three to nine months). The court correctly rejected that request. See note 2, supra (statutory provisions supersede guideline provisions)
7 U.S.S.G. § 7B1.3(g)(2) provides: "Where supervised release is revoked and the term of imprisonment imposed is less than the maximum term of imprisonment imposable upon revocation, the defendant may, to the extent permitted by law, be ordered to recommence supervised release upon release from imprisonment."
Application note 3 following § 7B1.3 provides:
Subsection (c) provides for the use of certain alternatives to imprisonment upon revocation. It is to be noted, however, that a court may decide that not every alternative is authorized by statute in every circumstance. For example, in United States v. Behnezhad, 907 F.2d 896 (9th Cir.1990), the Ninth Circuit held that where a term of supervised release was revoked there was no statutory authority to impose a further term of supervised release. Under this decision, in the case of a revocation of a term of supervised release, an alternative that is contingent upon imposition of a further term of supervised release (e.g., a period of imprisonment followed by a period of community confinement or detention as a condition of supervised release) cannot be implemented. The Commission has transmitted to the Congress a proposal for a statutory amendment to address this issue.
U.S.S.G. § 7B1.3, comment. (n. 3).
8
For example, in addition to the separate analysis and differing result adopted by the Eighth Circuit, two different interpretations are employed by circuits in arriving at the conclusion, which we adopt in this case, that further supervised release may not be imposed when there is a revocation under § 3583(e)(3). One interpretation relies on the disjunctive "or" in § 3583(e). See Cooper, 962 F.2d at 341; Behnezhad, 907 F.2d at 898-99. Another interpretation relies on the effect of the word "revoke" in § 3583(e)(3). See McGee, 981 F.2d at 274; Koehler, 973 F.2d at 134-35; Holmes, 954 F.2d at 272. Our holding does not depend on which analysis is employed, and we leave that issue for another day
9
Under present law, U.S.S.G. § 7B1.3(g)(2), see n. 7, supra, is nonfunctional, at least where a termination under 18 U.S.C. § 3583(g) is concerned. Section 7B1.3(g)(2) operates only by reference to law fixing "the maximum term of imprisonment imposable upon revocation," which is § 3583(e)(3) here; and the section is limited to "the extent permitted by law." Furthermore, as we have noted, see n. 2, supra, statutory provisions prevail if the Guidelines conflict. Our view that § 7B1.3(g)(2) is nonfunctional in a termination under § 3583(g) is reinforced by the fact that several courts have relied on the authority provided by § 3583(e) while specifically discounting the provisions of § 7B1.3(g)(2), see, e.g., Koehler, 973 F.2d at 135-36; Cooper, 962 F.2d at 342; Holmes, 954 F.2d at 271-73, and our research discloses no decision which relies on the Guideline for authority to impose incarceration and further supervised release
| {
"pile_set_name": "FreeLaw"
} |
FOR PUBLICATION
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEES:
ROBERT A. HICKS GREGORY F. ZOELLER
Macey Swanson and Allman Attorney General of Indiana
Indianapolis, Indiana
STEPHANIE ROTHENBERG
Deputy Attorney General
Indianapolis, Indiana
Apr 08 2013, 9:51 am
IN THE
COURT OF APPEALS OF INDIANA
KEVIN PERRY, )
)
Appellant, )
)
vs. ) No. 93A02-1208-EX-649
)
UNEMPLOYMENT INSURANCE )
REVIEW BOARD OF THE INDIANA )
DEPARTMENT OF WORKFORCE )
DEVELOPMENT and )
)
INDIANA DEPARTMENT OF WORKFORCE )
DEVELOPMENT UI CLAIMS )
ADJUDICATION CENTER, )
)
Appellees. )
APPEAL FROM REVIEW BOARD OF THE
INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT
Case No. 12-R-02226 (12-03692)
April 8, 2013
OPINION - FOR PUBLICATION
NAJAM, Judge
STATEMENT OF THE CASE
Kevin Perry1 appeals the order of the Review Board (“Review Board”) of the
Indiana Department of Workforce Development, affirming the findings and conclusions
of the Administrative Law Judge (“ALJ”) and terminating Perry from the Trade
Adjustment Assistance (“TAA”) training program. Perry presents three issues for
review, which we consolidate into a single issue, namely, whether the Review Board’s
decision affirming the termination of Perry’s participation in the TAA training program is
erroneous.
We affirm.
FACTS AND PROCEDURAL HISTORY
The relevant facts as found by the ALJ and adopted by the Review Board are as
follows:
FINDINGS OF FACT: The Administrative Law Judge makes the
following findings of fact: The Claimant worked for Columbus
Components. The Claimant separated from the job on June 30, 2009. On
September 1, 2009, the Department of Labor certified workers for federal
benefits in the form of Trade Adjustment Assistance (TAA) and Trade
Readjustment Allowance (TRA) in certification #70779. Workers were
potentially eligible for job search allowance, relocation allowance, training
benefits, and an income support in the form of TRA.
The Claimant submitted an application and the Dislocated Worker Unit[2]
subsequently approved [Perry]’s application to participate in the TAA
program. The training program [that Perry] participated in was the
Accounting program within the Accounting and Business Administration
Department at Ivy Tech Community College. [Perry] attended courses at
1
Although the parties used Perry’s initials in their briefs, the parties used full names in the
administrative proceedings below. And there is no evidence in the record that any party to this appeal
made an “affirmative request pursuant to Administrative Rule 9(G)(1.2)” to exclude from public access
the identities and information confidential under Indiana Code Section 22-4-19-6 and the rule. Recker v.
Review Board, 958 N.E.2d 1136, 1138 n.4 (Ind. 2011). Thus, we use the parties’ names.
2
The Dislocated Worker Unit is the state agency administering the TAA program.
the Columbus, IN campus that is nineteen (19) miles from [Perry]’s home.
The start date of the training was May 24, 2010[,] and scheduled to end on
December 21, 2012. The approved training application makes no mention
of [Perry]’s ability to take online courses. [Perry] also signed a Participant
Agreement. Part five (5) of the agreement obligates [Perry] not to deviate
from the program or curriculum without the written consent of any
WorkOne representative.
On November 7, 2011, [Perry] requested, through his assigned Case
Worker, Nancy Steinkamp, a modification in the training program. [Perry]
requested to attend all courses online during the Spring 2012, Summer
2012, and Fall 2012 semesters. The Dislocated Worker Unit handles
modification requests on a case-by-case basis. In making its decision, the
Dislocated Worker Unit defers [to] and considers the University’s opinion
on whether a claimant who applies for such modification will be successful
in completing the program.
Marian Canada chairs the Accounting and Business Administration
department. On November 9, 2011, Ms. Steinkamp emailed Ms. Canada to
obtain Ms. Canada’s opinion on whether [Perry] could be successful with
online class attendance. Ms. Canada did not feel comfortable agreeing to
allow [Perry] to take classes online.
Prior to [Perry] and Ms. Steinkamp submitting the modification request,
[Perry] registered for the spring 2012 semester with all online courses. Ms.
Steinkamp informed [Perry] on October 25, 2011[,] that [he] could not
register for online classes until the Dislocated Worker Unit made a final
decision on the request. However, [Perry] did not change the courses. On
January 25, 2012, the Department issued a warning letter informing [Perry]
that his TAA benefits were at risk and under review. The letter informed
[Perry] that [he] modified the training plan without authorization and that
any non-approved deviation from the original plan may place Trade-related
benefits at risk. By this time, the class offerings for the Spring Semester
2012 were filling up at the Columbus campus. Course offerings were
available at the locations greater than fifty (50) miles from [Perry]’s home.
[Perry] could have enrolled in those courses at other campuses and apply
for travel assistance to cover associated costs to travel to various campuses.
However, [he] remained enrolled in the online courses.
The Department issued a Request for TAA Exit on February 21, 2012. The
Department exited [Perry] from the TAA program for deviating from the
approved training plan in violation of the criteria set forth in 20 CFR 617.
CONLCUSIONS OF LAW: This case is not about whether the Department
and the Dislocated Worker Unit allows funding for [a] TAA participant
3
who choose[s] to complete the training program through online education.
The Dept. of Labor Training and Employment Guidance Letter (TEGL) 09-
05 provides:
Under the TAA program, the Department [of Labor] has
determined that distance learning may be considered
“classroom training” when the degree of certificate received
is equivalent to what would have been received if the training
had been conducted on campus. This interpretation expands
the types of approvable classroom training to include distance
learning, where a participant completes all or part of an
educational or vocational program in a location far away from
the institution hosting the training program. For distance
learning, the final degree or certificate conferred must be
equivalent in the content and standard of achievement to the
same program completed on campus or at an institutional
training location. When the above condition is met, the
Department will recognize that the training is of the type that
normally takes place in an interactive classroom setting;
therefore, it satisfies the requirement of the regulations and
statutes. This is a new standard that replaces the four
conditions in TEGL 7-00.
In addition, in order for distance learning to be approved, all
criteria for training approval found at 20 DFR 617.22 must be
met in the same way as in any other training program.
(Emphasis added). TEGL 0905, December 12, 2005.
The issue in this case is whether [Perry] is eligible to continue to participate
in the TAA program after a modification request was submitted and
subsequently denied by the Dislocated Worker Unit, and [Perry] deviated
from the approved training plan.
Eligibility for Federal Trade Adjustment Assistance (TAA) funding is
governed by 20 C.F.R. § 617.22. 20 C.F.R. § 617.22 confers discretion to
the state agency to determine how the program will be administered.
[Perry] signed a Participant Agreement form issued by the Department
agreeing to not deviate from the program or curriculum without the written
consent of any WorkOne representative. The participant agreement is clear
that failure to fully participate as outlined in the participant agreement
might result in the loss of benefits or repayment of the benefits received.
[Perry] did not receive permission to take all online courses. Further, Ms.
Steinkamp specifically informed [Perry that] he was to wait to register for
online courses until after the Dislocated Worker Unit approved [Perry]’s
4
modification request. In fact, the Department denied the request, and
[Perry] failed to make the necessary changes to stay in compliance with the
original training plan.
Accordingly, the Department properly exited [Perry] from the training
program due to [his] unauthorized modification to the training program and
failing to meet the criteria contained in 20 CFR § 617.22.
Appellant’s App. at 1-3 (some emphasis in original, citations omitted). Perry now
appeals.
DISCUSSION AND DECISION
“Reviews of trade adjustment assistance determinations are ‘subject to review in
the same manner and to the same extent as determinations and redeterminations under the
applicable State law, and only in that manner and to that extent.’” R.D. v. Review Bd. of
Ind. Dep’t of Workforce Dev., 941 N.E.2d 1063, 1067 (Ind. 2010) (quoting 20 C.F.R. §
617.51(a)). “In other words, a denial of training benefits is reviewable in state court as if
it had been a denial of conventional unemployment benefits.” Id. (citing 19 U.S.C. §
2311(d) (1988)). Our supreme court has explained the standard of review in conventional
unemployment benefit cases:
The Indiana Unemployment Compensation Act provides that “[a]ny
decision of the review board shall be conclusive and binding as to all
questions of fact.” However, the statute also includes explicit provision for
judicial review in language virtually identical to that found in provisions for
review of other administrative agency actions. Indiana Code § 22-4-17-
12(f) provides that when the Board’s decision is challenged as contrary to
law, the reviewing court is limited to a two part inquiry into: (1) “the
sufficiency of the facts found to sustain the decision”; and (2) “the
sufficiency of the evidence to sustain the findings of facts.” Under this
standard courts are called upon to review (1) determinations of specific or
“basic” underlying facts, (2) conclusions or inferences from those facts,
sometimes called “ultimate facts,” and (3) conclusions of law. Courts
uniformly recognize that propositions of law, such as the construction of
the statute, are for the court to determine. . . .
5
Review of the Board’s findings of basic fact are subject to a
“substantial evidence” standard of review. In this analysis the appellate
court neither reweighs the evidence nor assesses the credibility of witnesses
and considers only the evidence most favorable to the Board’s findings.
The Board’s conclusions as to ultimate facts involve an inference or
deduction based on the findings of basic fact. These questions of ultimate
fact are sometimes described as “questions of law.” They are, however,
more appropriately characterized as mixed questions of law and fact. As
such, they are typically reviewed to ensure that the Board’s inference is
“reasonable” or “reasonable in light of [the Board’s] findings.”
Tiller v. Review Bd. of the Ind. Dep’t of Workforce Dev., 974 N.E.2d 478, 481 (Ind. Ct.
App. 2012) (quoting McClain v. Review Bd. of the Ind. Dep’t of Workforce Dev., 693
N.E.2d 1314, 1316-17 (Ind. 1998) (citations omitted; alterations original)).
Perry contends that the Review Board erred when it affirmed the ALJ’s findings
and conclusions regarding his termination from the TAA training program. The facts are
not in dispute. Perry was approved for the TAA training program and executed a
participant agreement. The TAA program was administered through the Indiana
Department of Workforce Development (“DWD”) and the Columbus WorkOne office.
Perry was approved to obtain an “Associate of Applied Science” degree from Ivy Tech,
specifically in “Accounting.” Exhibits at 41A. The Participant Agreement provides, in
relevant part:
The above training program [of “31 weeks + WP week”] has been
approved, and a contract is being executed on your behalf with the training
provider. As the beneficiary of this agreement and contract, you agree to
the following:
1. I agree to undertake this program in good faith with the intention of
successfully completing the specified training program.
***
4. I agree to meet with my local WorkOne Staff monthly during school to
report progress and/or difficulties. I agree to provide a schedule during the
6
first week of each semester and a grade report within two weeks of the
completion of each semester.
5. I agree not to deviate from the program or curriculum without the written
consent of any WorkOne representative. I am not permitted to drop classes.
I must be enrolled as a full[-]time student.
***
8. I have received a copy of the student handbook and [Trade Readjustment
Allowance] benefit rights overview and agree to comply with all program
rules as outlined.
Exh. at 42. Perry was also given a TAA Student Handbook (“Handbook”). The
Handbook distinguished classroom training from employer-based training. With regard
to Classroom training, which “may include Remedial Training[,]” Exh. at 89, the
Handbook provides, in relevant part:
Classroom Training
Classroom training is instructor[-]led training. Approved Classroom
training includes the costs of tuition, course fees, required books and
supplies, and other items/services mandated/itemized by the training
institution for all/any student (not just your instructor). . . .
Distance (Learning) Training
The U.S. Department of Labor (USDOL) permits distance learning
(e.g. on-line) when the degree or certificate received is equivalent to
traditional classroom training.
When considering Distance (Learning) Training, as an option, keep
in mind your responsibility to coordinate with your distance learning
providers and your WorkOne Counselor to ensure that all parties
understand the specific requirements or milestones of the distance learning
program with respect to “attendance” and grading—including maintaining
full-time status (when mandated), monthly reporting and validation of
plan’s completion date. Failure to do so may place all related benefits at
risk.
Exh. at 89-90.
7
The ALJ found that Perry’s WorkOne Case Manager, Steinkamp, had informed
him on October 25, 2012, that he could not register for online courses until after he had
filed a request to modify his training plan and he had received approval for that
modification request. However, at that time, Perry had already registered for online
courses for the Spring semester of 2012. And he did not change his registration to
classroom courses after talking with Steinkamp in October. On January 25, 2012, the
Department sent a letter to Perry, notifying him that his TAA benefits were “at-risk and
under review” because, as he had been informed by telephone, he had, “without
authorization, . . . modified [his] training plan.” Exh. at 45. Classroom courses on
campuses greater than fifty miles from Perry’s home were still available, and Perry could
have applied for travel assistance to cover travel costs, but he remained enrolled in the
online courses. On February 21, 2012, the Department issued a Request for TAA Exit on
the ground that Perry had “[m]odified [his] program without authorization” by enrolling
in online courses without prior authorization. Exh. at 76. The evidence in the record
supports these findings, and the findings support the determination that Perry modified
his training program without prior authorization and that such was a proper basis for
termination from the TAA program.
Perry disputes the conclusion that his enrollment in online training courses
constituted a modification of his training plan so as to require prior authorization. In
8
support he cites Training and Employment Guidance Letter (“TEGL”) 9-05.3 That
directive, issued in 2005 by the Department of Labor, provides in part:
Under the TAA program, the Department [of Labor] has
determined that distance learning may be considered
“classroom training” when the degree of certificate received
is equivalent to what would have been received if the training
had been conducted on campus. This interpretation expands
the types of approvable classroom training to include distance
learning, where a participant completes all or part of an
educational or vocational program in a location far away from
the institution hosting the training program. For distance
learning, the final degree or certificate conferred must be
equivalent in the content and standard of achievement to the
same program completed on campus or at an institutional
training location. When the above condition is met, the
Department will recognize that the training is of the type that
normally takes place in an interactive classroom setting;
therefore, it satisfies the requirement of the regulations and
statutes. This is a new standard that replaces the four
conditions in TEGL 7-00.
In addition, in order for distance learning to be approved, all
criteria for training approval found at 20 CFR 617.22 must be
met in the same way as in any other training program.
Appellant’s App. at 2 (citing TEGL 9-05) (emphasis in original); see also
http://wdr.doleta.gov/directives/attach/TEGL09-05.pdf (last visited March 19, 2013).
The directive issued by the Department of Labor in TEGL 09-05 provides that
online instruction may be considered classroom training. However, the language in
TEGL 09-05 is in terms of “distance learning, where a participant completes all or part of
an educational or vocational program in a location far away from the institution hosting
the training program.” Appellant’s App. at 2 (citing TEGL 9-05) (emphasis in original);
3
In its brief, the Review Board bases its argument in part on TEGL 07-00. That directive was
rescinded and replaced by TEGL 09-05. See http://wdr.doleta.gov/directives/attach/TEGL09-05.pdf (last
visited March 19, 2013).
9
see also http://wdr.doleta.gov/directives/attach/TEGL09-05.pdf (last visited March 19,
2013). Here, there is evidence that Perry could have participated in interactive classroom
training within an easy distance from his home had he timely registered for such classes.
And even after he had been notified that his TAA benefits were at risk, classroom courses
were still available within a reasonable distance from his home, but Perry maintained his
enrollment in the online courses. As noted by the ALJ and affirmed by the Review
Board, the issue presented is not whether online coursework is permissible under certain
circumstances in the TAA program. Rather, the issue is “whether Perry was eligible to
continue to participate in the TAA program after a modification request was submitted
and subsequently denied by the Dislocated Worker Unit and [Perry had] deviated from
the approved training plan.” Appellant’s App. at 2. Here, the evidence supports the
findings, and the findings support the conclusion, that Perry deviated from his approved
training program without prior authorization. Thus, we cannot say that the Review Board
erred when it affirmed his termination from the TAA program.
Perry also contends that the DWD erred when it denied his request to deviate from
his approved TAA training program. But, as explained above, Perry modified his
training plan without prior authorization and made no attempt to revise his registration to
be in compliance with the approved plan even after Steinkamp advised him to do so well
before the semester started. On these facts, and as explained above, we cannot say that
the Department of Workforce Development erred when it denied his modification
request.
Affirmed.
FRIEDLANDER, J., and BRADFORD, J., concur.
10
| {
"pile_set_name": "FreeLaw"
} |
661 P.2d 1301 (1983)
AMERICAN INTERNATIONAL VACATIONS, Appellant,
v.
Donald L. MacBRIDE, Respondent.
No. 13713.
Supreme Court of Nevada.
April 29, 1983.
*1302 Reid & Alverson, Claude E. Zobell, and A. Bryce Dixon, Las Vegas, for appellant.
Marvin S. Gross, State Indus. Atty., Las Vegas, for respondent.
OPINION
PER CURIAM:
Appellant, American International Vacations (American International), appeals from a judgment of the district court reversing a Department of Administration Appeals Officer's decision that an injury was not compensable. Because we agree respondent was involved in an "accident" which resulted in a compensable injury within the statutory definition of those terms, we affirm the decision of the district court.
Respondent Donald L. MacBride was employed by American International as a salesman of vacation "packages." While on the job directing a tour, MacBride had occasion to walk down a flight of stairs. While so engaged, he heard a supervisor call him by name, and turned to his left to respond. When he did so, MacBride's right knee allegedly "gave way" two or three inches, causing a twisting motion and pain and discomfort in his lower back. MacBride neither stumbled nor fell as a result of this incident, and apparently continued his duties.
At approximately 4:00 a.m. the next morning, MacBride was admitted to a hospital emergency room complaining of back pain. Surgery was subsequently performed, which established that MacBride had suffered a rupture of an intervertebral disc. Physicians indicated this back condition was causally related to the twisting incident at work.
MacBride filed a compensation claim under the Nevada Industrial Insurance Act (NIIA),[1] and a hearing officer found that he had sustained a compensable injury. American International subsequently appealed to the Appeals Officer. The Appeals Officer held MacBride's injury was not compensable, because circumstances surrounding the incident did not meet the statutory definitions of an "accident" or "injury" set forth in the NIIA. MacBride then filed a petition for judicial review; the district court ordered the appeals Officer's decision reversed on the grounds that MacBride had suffered a compensable "injury" as a result of an "accident." American International now appeals the decision of the district court.
We initially note that a reviewing court may undertake independent review of the administrative construction of a statute. See NRS 233B.140(5)(d); accord, Niekro v. Brick Tavern, 66 Mich. App. 53, 238 N.W.2d 537, 539 (Mich. 1976); McKay Dee Hospital v. Industrial Commission, 598 P.2d 375, 376 (Utah 1979); Loggins v. Wetumka General Hospital, 587 P.2d 455, 457 (Okl. 1978). The Appeals Officer's decision was predicated on his construction of the accident and injury definitions contained in the NIIA. The *1303 district court reviewed the statutes and concluded that the Appeals Officer's construction was incorrect. We believe the district court's construction of the statutes in question was correct.
Under the NIIA, "accident" is defined as "an unexpected or unforeseen event happening suddenly and violently, with or without human fault, and producing at the time objective symptoms of an injury." NRS 616.020. Thus, in order for an incident to qualify as an "accident," three elements must be present: (1) an unexpected or unforeseen event; (2) happening suddenly and violently; and (3) producing at the time objective symptoms of injury.
The district court correctly concluded that all three elements were present in the instant case. American International maintains that the incident in which MacBride was involved did not happen "suddenly and violently," and did not produce "at the time objective symptoms of injury." Other jurisdictions, however, have construed similar statutory requirements that compensable accidents occur "violently" as properly descriptive of any cause efficient in producing a harmful result. See Raef v. Stock-Hartis, Inc., 416 S.W.2d 201, 205 (Mo. App. 1967). Cases involving construction of insurance policy provisions have reached a similar result. See Hanna v. Rio Grande Nat. Life Ins. Co., 181 S.W.2d 908, 911 (Tex.Civ.App. 1944); Jensma v. Sun Life Assur. Co., 64 F.2d 457, 459 (Ninth Cir.1933).
It also appears that the incident did produce "at the time, objective symptoms of injury." Although American International argues this requirement was not met because MacBride did not seek medical attention until some time after the incident, we do not believe that the statute requires the instantaneous manifestation of symptoms. It appears that the correct interpretation of the statutory requirement is that the symptoms must manifest themselves within a reasonable time. Accord, Central Surety & Insurance Corp. v. Industrial Comm'n (Colo.), 84 Colo. 481, 271 P. 617, 622 (Colo. 1928) (24-hour delay in appearance of hernia satisfies statutory requirement of "immediate appearance"); Consolidated Vultee Aircraft Corporation v. Smith, 63 Ariz. 331, 162 P.2d 425, 426 (Ariz. 1945) (two-day delay in appearance of hernia satisfies statutory requirement of "immediate appearance"). See also Schoenrock v. School District of Nebraska City, 179 Neb. 621, 139 N.W.2d 547, 551 (Neb. 1966) (symptoms appearing "according to the natural course in such matters without any independent intervening cause being shown" met statutory requirement of "producing at the time").
Given the remedial nature of workmen's compensation statutes, and the expressed policy favoring liberal construction of such statutes, we do not believe the district court erred in determining that MacBride suffered an "accident" within the meaning of the NIIA. See Spencer v. Harrah's Inc., 98 Nev. 99, 641 P.2d 481 (1982); Industrial Commission v. Peck, 69 Nev. 1, 10-11, 239 P.2d 244 (1952); Industrial Commission v. Adair, 67 Nev. 259, 269, 217 P.2d 348 (1950); Costley v. Nevada Ind. Ins. Com., 53 Nev. 219, 225, 296 P. 1011 (1931); Virden v. Smith, 46 Nev. 208, 211, 210 P. 129 (1922).
American International additionally challenges the district court's conclusion that the incident in which MacBride was involved met the statutory requirements of an "injury." At the time of the incident in question, "injury" and "personal injury" were defined as "a sudden and tangible happening of a traumatic nature, producing an immediate or prompt result, and resulting from external force ..."[2]See 1981 Nev. Stat. 1196. Thus, the statutory elements of an "injury" were: (1) a sudden and tangible happening; (2) traumatic in nature; (3) producing an immediate or prompt result; and (4) resulting from external force. American International argues MacBride could not have suffered an "injury," as there was no "external force" involved and the event was not "traumatic."
*1304 In the instant case, the district court impliedly concluded that there was sufficient "external force" involved to meet the statutory requirement. We will not disturb that determination on appeal. We note that MacBride turned and exerted a twisting strain on his back in response to a supervisor's summons, and felt pain and discomfort in his lower back when his knee gave way. Other courts have held that a statutory requirement similar to that in the instant case is "satisfied by a sudden strain, originating outside the body in answer to the demands of the job, which, when applied internally, proximately caused the bodily failure." See Boeing Company v. Fine, 65 Wash.2d 169, 396 P.2d 145 (Wash. 1964) (overruled on other grounds in Longview Fibre Co. v. Weimer, 95 Wash.2d 583, 628 P.2d 456 (Wash. 1981)). We believe that the record in the instant case evidences that respondent was subjected to a sudden strain which proximately caused his injury. Therefore, we will not disturb the district court's implied determination that an external force produced the injury in question.
American International's final argument, that the injury in question did not involve a "traumatic event," is also without merit. American International's argument is based on a prior decision of this court, in which this court arguably equated the "trauma" requirement with "violence." See Smith v. Garside, 76 Nev. 377, 382, 355 P.2d 849 (1960). As previously noted, however, the incident in which MacBride was involved occurred "suddenly and violently" within the meaning of the definitional sections of the NIIA. Thus, to accept American International's own linkage, the events in question happened "traumatically."
The district court correctly determined that MacBride was involved in an "accident" which resulted in a compensable "injury." Accordingly, we affirm the decision of the district court.
NOTES
[1] The NIC is now known as the State Industrial Insurance System. See NRS 616.116 (effective July 1, 1982).
[2] We note that this section has been amended to eliminate the requirement relating to "external force." See NRS 616.110.
| {
"pile_set_name": "FreeLaw"
} |
69 F.3d 550
76 A.F.T.R.2d 95-6809, 95-2 USTC P 50,558
Central Bank of Tampav.U.S.**
NO. 94-2569
United States Court of Appeals,Eleventh Circuit.
Oct 06, 1995
1
Appeal From: M.D.Fla.,No. 92-01389-CIV-T-17B, 845 F.Supp. 860
2
AFFIRMED.
**
Local Rule 36 case
| {
"pile_set_name": "FreeLaw"
} |
265 N.J. Super. 148 (1993)
625 A.2d 601
RELIANCE INSURANCE COMPANY, PLAINTIFF,
v.
ARMSTRONG WORLD INDUSTRIES, DEFENDANT.
Superior Court of New Jersey, Law Division.
Decided April 12, 1993.
*149 Eisenstat, Gabage & Berman, attorneys for plaintiff (Charles W. Gabage, counsel).
*150 Hangley, Connolly, Epstein, Chicco, Foxman & Ewing, attorneys for plaintiff (Steven R. Fischer, counsel; Regina A. Vogel and Deborah Weinstein, on the brief).
Cohen, Shapiro, Polisher, Sheikman and Cohen, attorneys for defendant (Judah I. Labovitz, counsel; Mark S. Herr, on the brief).
Covington & Burling, attorneys for defendant (Robert N. Sayler, counsel; Philip D. Gorlick, on the brief).
OPINION
KLEINER, J.S.C.
This opinion is necessitated by a series of motions which were filed and orally argued subsequent to the initial interlocutory decision of this court, dated July 7, 1992. 259 N.J. Super. 538, 614 A.2d 642 (Law Div. 1992). That decision, which fully reviewed the factual background of this litigation, and therefore need not be repeated, focused upon (1) the identification of insurance agreements between Reliance Insurance Company (hereafter Reliance), and Armstrong World Industries (hereafter Armstrong); (2) the interpretation of insurance policy terminology pertinent to the nature and extent of the insurance coverage afforded by the identified policies.[1]
*151 On September 23, 1992 our Supreme Court rendered its opinion in State v. Signo Trading International, Inc., 130 N.J. 51, 612 A.2d 932 (1992). That decision specifically overruled portions of Broadwell Realty Services, Inc. v. Fidelity and Cas. Co., 218 N.J. Super. 516, 528 A.2d 76 (App.Div. 1987). As this court had substantially relied on Broadwell, Id. in its interpretation of the applicability of the "owned-property exclusion" clause of the Reliance policies, Reliance filed a motion for a modification of this court's interlocutory ruling.[2]
In the original opinion of this court, the "owned-property exclusion" within the Reliance comprehensive general liability insurance policies was construed.
The specific language of that particular exclusion provides:
This policy does not apply ... to injury to or destruction of (1) property owned, occupied by or used by or rented to the insured, or (2) except with respect to liability under sidetrack agreements and the use of elevators or escalators, property in the care, custody or control of the insured, or (3) any goods or products manufactured, sold, handled or distributed or premises alienated by the named insured or work completed by or for the named insured, out of which the accident arises.[3]
Liability insurance affords coverage for losses or liabilities on account of property damage sustained by parties other than the insured itself. CPS Chemical Co. v. Continental Ins. Co., 222 N.J. Super. 175, 186, 536 A.2d 311 (App.Div. 1988); McNeilab Inc. v. North River Ins. Co., 645 F. Supp. 525, 537-39 (D.N.J. 1986), aff'd 831 F.2d 287 (3rd Cir.1987).
The distinction between the purpose of general liability insurance, and insurance policies providing the insured first party coverage for losses sustained on its own property, is clearly *152 observable by an exclusionary provision within the liability policy commonly known as the "owned-property exclusion." As noted in Broadwell Realty v. Fidelity & Cas. Co., supra, 218 N.J. Super. at 518, 528 A.2d 76,
The obvious purpose of this language is to exclude from the insurer's indemnification obligation claims by the insured based upon damage or loss to its own property ... the [general liability] policy is not designed to afford first party coverage.
The inclusion within a policy of liability insurance of an exclusion for "premises alienated by the named insured" is designed to extend the exclusion to claims by subsequent owners of property previously owned by an insured.
In Hatco Corp. v. W.R. Grace & Co., 801 F. Supp. 1334 (D.N.J. 1992), the court was called upon to resolve several motions between a predecessor and successor in title to an industrial site affected by substantial pollution and their respective insurers. Many of the issues originally addressed by this court in its initial opinion were also addressed in Hatco Corp., Id. Of significance, however, is a discussion by the court as to the effect of an "owned-property exclusion" clause. On that particular point, the court stated:
On August 21, 1978, Grace sold the Fords facility to Hatco's corporate predecessors. Grace contends that any damage that occurred after that date did not occur to property owned by Grace, but to property previously alienated by Grace. It therefore contends that the owned-property exclusion does not apply to such damage. Grace contends that the unambiguous language of the owned-property exclusion does not preclude damage for property formerly owned [by] Grace, and that if the insurers intended to exclude such property from coverage they could easily have done so with an "alienated premises" exclusion.
That argument was accepted by the District Court. Of course, in this case, the Reliance policy does make reference in subparagraph (3) of the exclusion clause to non-coverage for "alienated premises," and thus a result contra to the decision by the Hatco Corp., Id. court would be appropriate.
A similar analysis and conclusion as to the specific affect of the words "alienated premises" was reached in Rieder v. Cherokee Ins. Co., 635 F. Supp. 699, 702 (E.D.Pa. 1986), aff'd 813 F.2d 398 (3rd Cir.), cert. denied, 484 U.S. 823, 108 S.Ct. 86, 98 L.Ed.2d 47 *153 (1987); see also Taylor-Morley-Simon, Inc. v. Michigan Mut. Ins. Co., 645 F. Supp. 596 (E.D.Mo. 1986), aff'd 822 F.2d 1093 (8th Cir.1987).
Property excluded from liability insurance coverage cannot become insured property as a result of its alienation, where an alienated premises exclusion is contained within the "owned-property exclusion" of an insurance policy. Hatco Corp. v. W.R. Grace & Co., supra.
In order to avoid the clear and unambiguous language contained in the exclusionary clause, Armstrong's position, both within its brief and at oral argument, was that the "owned-property exclusion" (subsection 1), will not bar the recovery of cleanup costs incurred at the insured site if those costs are incurred upon the insured site but are designed to prevent actual and threatened harm to third-party property. Armstrong also asserted that an identical analysis was applicable to the exclusionary language (subsection 3) referable to "premises alienated."
This court adopted the argument offered by Armstrong and relied upon Broadwell Realty v. Fidelity & Cas., supra, 218 N.J. Super. at 525-529, 528 A.2d 76 to the effect that, 218 N.J. Super. at 529, 528 A.2d 76
We hold that the costs of preventive measures taken by Broadwell on its own property in response to the DEP directive which were designed to abate the continued flow of contaminants on to adjacent lands are recoverable under the policy.
........
To the extent that all or a portion of the response expenses pertain solely to damage to the Broadwell site itself and not to prevent off-site contamination, the owned-property exclusion clearly applies, and such damage is not within the coverage. (Emphasis added).
Based upon the Broadwell analyses, this court specifically concluded, 259 N.J. Super. 538, 566, 614 A.2d 642:
[T]he expenses which are reimbursable [are] those expenses separately incurred or to be incurred as a direct result of governmental action designed to prevent future anticipated damage claims. [E]xpenses incurred solely on the Kerr Glass site itself which were not incurred to prevent off-site contamination are not reimbursable as *154 they fall within the ambit of the unambiguous property exclusion provisions of the insurance. (Citations omitted).
Our Supreme Court in State v. Signo Trading International, Inc., 130 N.J. 51, 612 A.2d 932 (1992) construed a comprehensive liability insurance policy containing an "owned-property exclusion" provision similar to the clause in the case sub judice. The court specifically declared the insuring contractual language to be clear and unambiguous and it specifically overruled the interpretation and import enunciated in Broadwell Realty v. Fidelity & Cas. Co., supra. Accordingly, this court's prior ruling must be modified. The expenses incurred as cleanup measures by any transferee of property formerly owned by Armstrong, even if incurred as a direct result of governmental action designed to prevent future anticipated damage to adjacent property owners are not recoverable from Reliance by virtue of the exclusionary language in subsections (1) and/or (3) of the Reliance policies.
In response to the motion for modification, Armstrong has asserted that Reliance must be estopped from asserting any exclusion from coverage by virtue of the judicial mandate delineated in Griggs v. Bertram, 88 N.J. 347, 443 A.2d 163 (1982).
Estoppel of an insurance carrier's assertion of exclusionary language affecting coverage as provided within an insurance policy was first fully articulated in Merchants v. Indem. Corp. v. Eggleston, 37 N.J. 114, 179 A.2d 505 (1962) and was later expanded to encompass the facts delineated in Griggs v. Bertram, supra. The theoretical reasons of both precedents are fully analyzed in American Handling Equip. v. T.C. Moffatt & Co., 184 N.J. Super. 131, at 139-141, 445 A.2d 428 (App.Div. 1982).
An insurance carrier will be estopped from invoking exclusions from coverage where by its affirmative action it has controlled the defense in a lawsuit (Eggleston), or where it assumes the control of a claim asserted against its insured prior to the filing of a lawsuit (Griggs). In each instance our Supreme Court found that the affirmative action of the insurer prejudiced the position of the insured. The existence of prejudice, whether *155 actual or constructive, served as the predicate for invoking the doctrine of estoppel. Merchants Indem. Corp. v. Eggleston, supra, 37 N.J. at 129, 179 A.2d 505; Griggs v. Bertram, supra, 88 N.J. at 356, 443 A.2d 163; American Handling Equip. v. T.C. Moffatt & Co., supra. 184 N.J. Super. at 139-140, 445 A.2d 428 see also, 184 N.J. Super. at p. 139 fn. 1, 445 A.2d 428.
For the reasons expressed below, this court concludes that Reliance will not be estopped from asserting the exclusionary provisions of the insurance policies applicable to this litigation. The facts supporting this conclusion are uncontradicted.
On April 3, 1989, Armstrong was served with a third-party summons and complaint by Kerr in the litigation instituted by ANCC. There is no evidence that prior to April 3, 1989 Kerr asserted any claim against Armstrong or that Kerr had even informed Armstrong of any potential lawsuit to be filed against Kerr by ANCC. There is no evidence that Reliance had any prelitigation knowledge of any claims affecting its insured.
On April 13, 1989, Armstrong forwarded the third-party complaint, served upon it by Kerr, to Reliance and requested that Reliance provide Armstrong with a defense. Armstrong specifically reminded Reliance of the necessity of filing an answer to the third-party complaint by April 23, 1989. Armstrong also advised Reliance that it had preliminarily contacted private counsel respecting its future defense of the litigation instituted by Kerr.
On April 27, 1989, Armstrong specifically informed Reliance that private counsel had in fact been retained to defend the "ANCC-Kerr" litigation.
On June 28, 1989, Reliance responded to Armstrong by acknowledging receipt of the third-party complaint, at which time it advised Armstrong, "We are presently reviewing our obligation to Armstrong World Industries, Inc. We will notify you within a reasonable time of our decision in this matter."
It is clear that Reliance never thereafter specifically, in writing or orally, disclaimed coverage, refused to provide a defense to *156 Armstrong, or alternatively, offered to provide a defense pursuant to a reservation of rights. Merchants Indem. Corp. v. Eggleston, supra, 37 N.J. at 126, 179 A.2d 505.
This factual scenario is clearly distinguishable from Griggs and Eggleston. Reliance did not act prior to the actual commencement of legal action so as to cause Armstrong to believe insurance coverage was existent, as in Griggs, thus precluding it from investigating the Kerr Glass allegations, nor did it actually assume the defense of Armstrong and thereafter attempt to disavow its insurance coverage and its responsibility, as in Eggleston. Simply stated, Reliance took no affirmative action resulting in prejudice, either actual or constructive, to Armstrong's position. Additionally, Reliance's failure to act, through non-response to Armstrong's communications, did not in reality prejudice Armstrong as Armstrong had, prior to April 27, 1989, engaged the services of counsel to provide it with a defense to the third-party complaint.
It is not uncommon for this court to observe an insured file an answer to a complaint and to simultaneously file a third-party complaint for declaratory judgment against its insurance carrier seeking a declaration of coverage and requiring the insurance carrier to provide a defense. Alternatively, insureds regularly file separate declaratory judgment actions seeking the identical relief. Such action was not pursued by Armstrong in the "ANCC v. Kerr v. Armstrong" litigation nor was a separate declaratory action filed by Armstrong in reaction to the failure to further respond by Reliance after June 28, 1989.
In American Handling Equip. v. T.C. Moffatt & Co., supra, 184 N.J. Super. at 141 and 142, 445 A.2d 428 the court stated:
The imputation of prejudice is not an absolute rule. The conduct of the carrier giving rise to estoppel must constitute a material encroachment upon the rights of an insured to protect itself by handing the claim [or suit] directly and independently of the "insurer" before the presumption of prejudice can arise. Griggs, supra, 88 N.J. 359, 443 A.2d 163 (Emphasis supplied).
In Griggs, supra, the investigation of the putative claim, without disavowing insurance coverage due to the insurance exclusion, was sufficient to allow the court to presume prejudice to the insured *157 and to estop the insurer from invoking the exclusion to coverage. Armstrong cannot cite any judicial precedent where estoppel has been invoked against an insurer based upon inaction and where there is an absence of particularized prejudice to the insured proximately caused by the inaction.
It is clear that Armstrong could have pursued several remedies. Without intending to be exhaustive, Armstrong might have supplemented its communication of April 13, 1989, and April 23, 1989, with additional inquiries respecting Reliance's intent or with a specific supplemental inquiry as to the failure of Reliance to delineate its position within a reasonable time after it received, from Reliance, an acknowledgment of the claim on June 28, 1989. The possible dereliction of Reliance in failing to offer a defense might have been litigated as a fourth-party complaint in the "ANCC v. Kerr v. Armstrong" litigation, as in Bonnet v. Stewart, 68 N.J. 287, 344 A.2d 321 (1975), or a separate declaratory judgment action might have been filed, as was done in Sussex Mut. Ins. Co. v. Hala Cleaners, Inc., 75 N.J. 117, 380 A.2d 693 (1977).[4]
Although Armstrong cites Griggs v. Bertram, supra, 88 N.J. at 357, 443 A.2d 163, for the general proposition that:
Upon the receipt from its insured of a claim or notification of an incident that many give rise to a claim, an insurer is entitled to a reasonable period of time in which to investigate whether the particular incident involves a risk covered by the terms of the policy.... But once an insurer has had a reasonable opportunity to investigate, or has learned grounds for questioning coverage, it then is under a duty promptly to inform its insured of its intention to disclaim coverage or of the possibility that coverage will be denied or questioned. (Citation omitted).
As the basis of its assertion that estoppel should be invoked against Reliance, this court specifically finds, that such a result can only result when there is a demonstrative prejudice to the insured. In this case there is no prejudice, as Armstrong retained *158 counsel to defend it within 14 days of service of the third-party complaint. Armstrong at all times was represented by counsel of its own selection and fully participated in its own defense. Prejudice is an essential ingredient of estoppel, Merchants Indem. Corp. v. Eggleston, supra, 37 N.J. at 129, 179 A.2d 505, and in its absence, said doctrine cannot be invoked.
Although it might be argued that the continual accrual of counsel fees by Armstrong resulting from its retainer of private counsel in the defense of the ANCC litigation, constitutes prejudice, any such prejudice could have been mitigated through affirmative litigation procedures available to Armstrong but which were not utilized by it. Additionally, it must be noted that the incurrence of counsel fees, a finite calculable sum, is vastly different from the infinite immeasurable and incalculable prejudice which the court presumed was suffered by the insured as in Griggs v. Bertram, supra.[5]
Reliance has also presented an additional alternative argument contending that through procedural deficiencies, Armstrong is barred from asserting that Reliance is estopped from seeking enforcement of the insurance exclusion clauses.
As correctly argued, R. 4:5-4 Affirmative Defenses specifically mandates that estoppel be asserted as a responsive pleading. Armstrong failed to assert this concept in its answer, even though Reliance, in its complaint, specifically invoked the exclusion insurance clauses as its basis for a declaratory judgment. Armstrong also omitted any reference to the concept of estoppel in its counterclaim which might have served as a basis to overcome the *159 procedural deficiency of its answer. R. 4:5-4; Pressler Current N.J. Court Rules, Comment R. 4:5-4.
At oral argument[6] Armstrong's counsel made reference to Griggs v. Bertram, supra, in conjunction with another unrelated legal argument. In response, Reliance, through counsel, orally asserted that Griggs had no relevancy to these proceedings. Obviously Armstrong was aware of Griggs and the concept of estoppel, yet, Armstrong did not seek leave, pursuant to R. 4:9-1 to amend its answer or counterclaim.
Although the thrust of Armstrong's position in this stage of these proceedings is premised upon the Griggs v. Bertram, supra, decision, it still has not formally moved for leave to amend its prior pleadings to assert the theory of estoppel.[7]
Armstrong should not be permitted to argue the inapplicability of the exclusion clause in the Reliance policies based upon the distinctions and interpretation outlined in Broadwell Realty v. Fidelity & Cas. Co., supra, and then, after that interpretation is rendered non-viable by our Supreme Court, as in Signo Trading, ask that this court permit it to assert estoppel to bar the entire applicability of the exclusionary clause. The assertion of the concept of estoppel initially, if sustained, would have avoided much of the proceedings conducted to date. The court cannot countenance the maneuvering of pleadings. Even though alternative, and even inconsistent pleadings are permitted by our practice and procedure, inconsistent theories should not be bifurcated at different stages of litigation. Amendment to pleadings, R. 4:9-1 are liberally granted, yet permission to amend is within the sound *160 discretion of the court. Pressler, Current N.J. Court Rules, Comment R.4:9-1.
In the absence of any particularized articulated and demonstrable prejudice arising from Reliance's failure to affirmatively deny coverage after April 13, 1989, and by virtue of procedural deficiencies, R. 4:5-4, estoppel shall not be applicable to bar the assertion by Reliance of the exclusion clause set forth within its insurance policies.
As indicated, ante, Armstrong initially argued that the exclusion clause subparagraph (1) and the exclusion language in subparagraph (3) should be construed identically, but neither subsection would bar recovery of cleanup costs due to the exception articulated in the Broadwell analysis.
Armstrong has now argued that the exclusion clause, even if assertable, is of no significance due to the existence of groundwater pollution claims set forth in the "ANCC v. Kerr v. Armstrong" litigation. In essence, Armstrong asserts that groundwater is not the property of Armstrong nor any party in its chain of title. It contends groundwater is owned by the State of New Jersey, and thus, the cleanup costs incurred to eliminate groundwater contamination is an existent claim of a third party, here the State of New Jersey, and as such, it is an insurable claim not barred by the exclusion clause.
This court specifically notes that although the record presented to date demonstrates that groundwater pollution was part of the claims originally asserted against Armstrong's transferee, by the D.E.P., there is no evidence presented that groundwater pollution has affected any actual third party adjacent property claimant.[8] At best, groundwater pollution on the ANCC property, in this case, is a threat to adjacent property owners. As enunciated in *161 Signo Trading, Id., 130 N.J. at 65, 612 A.2d 932, "the ... policy at issue indemnifies the insured only for damage to the property of a third party and not for the threat of such damage." Any contrary ruling would transform this liability insurance policy insuring for tort liability to others into a policy of insurance insuring against the losses of the insured itself. State, DEP v. Signo Trading Inter., 235 N.J. Super. 321, at 336, 562 A.2d 251 aff'd 130 N.J. 51, 65, 612 A.2d 932 (1972), Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 237-240, 405 A.2d 788, (1979).
Our Supreme Court in Signo Trading, Id. 130 N.J. at 64-65, 612 A.2d 932, specifically referred to Intel Corp. v. Hartford Acc. & Ind. Co., 952 F.2d 1551 (9th Cir.1991) and State v. New York Central Mutual Fire Ins. Co., 147 A.D.2d 77, 542 N.Y.S.2d 402 (1989) which might support the argument advanced by Armstrong. However, the Court distinguished Intel Corp., Id. due to the uniqueness of California law, and it found it unnecessary to conclude whether New York Central Mutual, Id. was correctly decided. This conclusion specifically states, 130 N.J. at 65, 612 A.2d 932:
Whether or not that case [New York Central Mutual] was correctly decided, its reasoning is not applicable here. First, the trial court in this case found no evidence that "There was migration of the chemical pollutants off the Morton Springer property... into any of the waters of the state." Signo Trading, supra, 235 N.J. Super. at 328-29 [562 A.2d 251]. Second, to the extent that the court in New York Central Mutual invoked coverage because of a "threat" that the oil would enter the ground water, its reasoning is unpersuasive. [.] . . the CGL policy at issue indemnifies the insured only for damage to the property of a third party and not for the threat of such damage.
Armstrong contends that the parens patriae interest of the State of New Jersey in the groundwater of this State is a sufficient interest in property so as to constitute existent damage to a third party, to wit: the State of New Jersey, thus creating a significant differentiating factor to remove this case from the general rule enunciated in Signo Trading, Id.
Armstrong relies upon the decision in State v. New York Central Mutual Fire Ins. Co., Id. to support its theory.
*162 New York Central Mutual, Id., was an action brought by the State of New York pursuant to Navigation Law § 190, to recover money expended by the New York Environmental Protection and Spill Compensation Fund for clean up costs expended to eliminate the environmental damage resulting from a home heating oil spill.
Navigation Law Article 12, imposes strict liability upon anyone responsible for a discharge of petroleum which threatens the State's navigable waters. The New York Court noted, "the Legislature has seen fit to allow plaintiff, if it be so inclined, to bring a claim for these costs directly against the homeowner's insurer. (Navigation Law § 190)." New York Central Mutual, Id., 542 N.Y.S.2d at 430.
Based upon the facts of that case, and pursuant to specific legislature authority, the New York Court concluded:
There is no question but that the fuel oil entered the groundwater, or at the very least threatened to (see, Merrill Transp. Co. v. State of New York, 94 A.D.2d 39, 42-43, 464 N.Y.S.2d 249), and since groundwater is a natural resource (Navigation Law § 172[12], [18] protected by plaintiff as trustee for its people (Navigation Law § 170), the oil spill caused damage to property other than that of the insured, thereby triggering defendant's obligation under its policy (see, Broadwell Realty Servs. v. Fidelity & Cas. Co. of N.Y., 218 N.J. Super. 516, 528 A.2d 76) and plaintiff's entitlement to summary judgment.
Unlike the facts presented in the case sub judice, the New York statutory scheme specifically creates a trustee status between the State of New York, as a fiduciary, and its citizenry as beneficiaries of a trust. The trust res includes the groundwater of the State of New York. This special status is a creature of the New York legislature. There is no specific New Jersey legislative counterpart to the New York legislation, to support Armstrong's argument.
Armstrong also ignores the fact that groundwater, if damaged by a third party, may serve as the basis for a damage claim by the property owner of the ground surface. Jackson Twp. v. Hartford, 186 N.J. Super. 156, 451 A.2d 990, (Law Div. 1982). The "property interest" in groundwater is clearly an interest held by the owner of the recorded title of the surface land.
*163 In Broadwell Realty v. Fidelity & Cas. Co., supra, 218 N.J. Super. at 528, 528 A.2d 76, the court, in its discussion of the parens patriae concept equates the authority of the State of New Jersey as a "colorable claim for damage." It is this court's opinion that a "colorable claim for damage" is not synonymous with a "property interest" in real property.[9]
Traditionally, a property owner seeking damages from a tortfeasor may recover the costs required to restore damaged property to its status prior to damage and/or the difference in the value of the property before and after the damage. Huber v. Serpico, 71 N.J. Super. 329, 176 A.2d 805 (App.Div. 1962) Restatement, Tort, § 929 Comment(b). The tort claimant property owner, however, is not compelled to reinstate its property to its pre-damage status. The State, however, seeks, under the aegis of parens patriae authority to abate pollution and to assure pollutant removal so as to return the property to its pre-pollution status. This distinction differentiates a "concern" with the condition of property attributable to the State, from a "property interest" attributable to the owner of realty.
Similarly, an owner of property has an insurable interest and can insure itself, through first party insurance coverage, for damages it sustains, which might include damages to the groundwater below the surface of its real property boundaries. This court can find no authority which would permit the State to insure itself against damages to the groundwater existent in this State, *164 irrespective of its substantial and legitimate concern for the purity of groundwater.
As a trial court, this court is reluctant to create a new theory of insurance indemnification as argued by Armstrong.
For the reasons expressed, the motion for summary judgment filed by Reliance, which encompassed its motion for modification of the prior order of this court, is granted. Accordingly, the cross-motion for summary judgment filed by Armstrong is denied.[10]
NOTES
[1] A synopsis of the factual history will assist the reader. ANCC, the owner of an industrial tract, intending to sell to Triangle, was required, pursuant to a consent order with the N.J.D.E.P., to incur substantial environmental clean up expenses upon its property. ANCC sued Kerr, its grantor, to recoup those expenses. Kerr named its own grantor, Armstrong, as a third-party defendant and ANCC then named Armstrong a direct defendant. When Armstrong owned the property, it was insured by Reliance under comprehensive general liability policies containing an "owned-property exclusion." Reliance filed a declaratory judgment action seeking a judicial declaration of non-coverage. Armstrong filed a counterclaim seeking a declaration of coverage, indemnification for sums paid in settling the "ANCC v. Kerr v. Armstrong" litigation and for other relief not specifically applicable to the pending motions.
[2] This motion for modification was subsequently expanded to a motion for summary judgment by Reliance and in response to a cross-motion for summary judgment by Armstrong.
[3] Since this court did not specifically refer to the phrase, "premises alienated" within its opinion, upon the filing of the motion for modification by Reliance, this court invited counsel to file new briefs on the entire exclusionary clause.
[4] Although Sussex Mut. Ins. Co. v. Hala Cleaners, Inc. was a declaratory judgment action instituted by the insurance carrier, similar relief could have been sought by Armstrong accompanied by a separate motion to stay the underlying ANCC v. Kerr v. Armstrong action.
[5] This opinion has not addressed issues respecting counsel fee reimbursement and the ramifications, if any, of the decisions enunciated in Hartford Acc. & Indem. Co. v. Aetna Life & Cas. Co., 98 N.J. 18, 483 A.2d 402 (1984), Burd v. Sussex Mutual Ins. Co., 56 N.J. 383, 267 A.2d 7 (1970), Hartford Group v. Marson Constr. Corp., 186 N.J. Super. 253, 452 A.2d 473 (App.Div. 1982), certif. denied, 93 N.J. 247, 460 A.2d 656 (1983), West v. MacDonald, 103 N.J. Super. 201, 247 A.2d 20 (1967), aff'd o.b. 52 N.J. 536, 247 A.2d 129 (1968). It is anticipated the issue of counsel fees will be addressed in a future motion.
[6] Oral argument occurred on February 28, 1992, prior to this court opinion on July 7, 1992.
[7] Armstrong justified its failure to assert estoppel as an affirmative defense at oral argument on December 16, 1992, as an avoidance of counter allegations by Reliance that such a pleading might be deemed frivolous and might subject Armstrong to the imposition of sanctions. This court finds that excuse unpersuasive.
[8] An analysis of all pleadings filed in the ANCC litigation fails to demonstrate any threat of pollution by any adjacent property owner. Thus the only claim of groundwater pollution are complaints asserted by the D.E.P. as to pollution on the ANCC parcel which was to be conveyed by it to Triangle.
[9] The Armstrong argument raises several issues of judicial concern, particularly the issue of apportionment of damages where property insurance contains an "owned-property exclusion." For example, if the State of New Jersey sues a property owner for the clean up expenses the State incurs resulting from pollution to the surface which also has permeated the groundwater, are the costs to be recouped, recoverable from the surface owner individually, with a corresponding right of indemnification by the surface owner against its general liability insurance carrier based upon apportionment as to the portion of costs attributable to clean up of the groundwater? In another context, our Supreme Court has discussed the possible judicial burdens which are envisioned in apportionment litigation. SL Industries v. American Motorists, 128 N.J. 188, 607 A.2d 1266 (1992).
[10] Reliance also filed a separate motion pursuant to R. 4:42-2, for a reconsideration of this court's original opinion pertaining to the contractual liability exclusion clause of the Reliance insurance policies. 259 N.J. Super. 538, 567-69, 614 A.2d 642. By virtue of this court's ruling respecting the "owned property exclusion," the issues raised by the motion for reconsideration are deemed moot, without prejudice, at this time.
| {
"pile_set_name": "FreeLaw"
} |
NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 12 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 17-50402
Plaintiff-Appellee, D.C. No. 2:17-cr-00261-RGK
v.
MEMORANDUM*
MIGUEL MAGANA, a.k.a. Face, a.k.a.
Michael Magana, a.k.a. Tun Tun, a.k.a. W,
a.k.a. Wicked,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
R. Gary Klausner, District Judge, Presiding
Submitted July 10, 2018**
Before: CANBY, W. FLETCHER, and CALLAHAN, Circuit Judges.
Miguel Magana appeals from the district court’s judgment and challenges
the aggregate 144-month sentence imposed following his guilty-plea convictions
for conspiracy to possess with intent to distribute and to distribute
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
methamphetamine, in violation of 21 U.S.C. § 846; distribution of
methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(A)(viii); and two
counts of being a felon in possession of a firearm, in violation of 18 U.S.C.
§ 922(g)(1). Pursuant to Anders v. California, 386 U.S. 738 (1967), Magana’s
counsel has filed a brief stating that there are no grounds for relief, along with a
motion to withdraw as counsel of record. We have provided Magana the
opportunity to file a pro se supplemental brief. No pro se supplemental brief or
answering brief has been filed.
Magana waived his right to appeal most aspects of his sentence. Our
independent review of the record pursuant to Penson v. Ohio, 488 U.S. 75, 80
(1988), discloses no arguable issue as to the validity of the waiver. See United
States v. Watson, 582 F.3d 974, 986-88 (9th Cir. 2009). We accordingly dismiss
Magana’s appeal as to those aspects of his sentence that are covered by the waiver
and affirm as to all other issues except as to the three supervised release conditions,
standard conditions five, six, and fourteen, which are unconstitutionally vague.
See United States v. Evans, 883 F.3d 1154, 1162-64 (9th Cir. 2018); see also
Watson, 582 F.3d at 977 (an appeal waiver does not bar a constitutional challenge
to a supervised release condition). We remand for the district court to modify
these conditions consistent with our opinion in Evans.
2 17-50402
Counsel’s motion to withdraw is GRANTED.
AFFIRMED in part; DISMISSED in part; REMANDED with
instructions.
3 17-50402
| {
"pile_set_name": "FreeLaw"
} |
34 Wis.2d 317 (1967)
SCHIMKE, Respondent,
v.
MILWAUKEE & SUBURBAN TRANSPORT CORPORATION and another, Appellants.
Supreme Court of Wisconsin.
February 27, 1967.
April 11, 1967.
*319 For the appellants there was a brief by Kivett & Kasdorf, attorneys, and John J. Romann of counsel, all of Milwaukee, and oral argument by Mr. Romann.
*320 For the respondent there was a brief and oral argument by Irving W. Zirbel of Milwaukee.
BEILFUSS, J.
The sole issue is whether the trial court abused its discretion in refusing to order a new trial in the interests of justice because of the physical condition of the jurors.
While it is true as the defendants contend, "[a] juror should, of course, be free from such physical infirmities and mental defects as will interfere with or preclude the proper discharge of his duties"[2] from the record before us, it cannot be said with any degree of certainty that illness affected the deliberations of any of the jurors.
The trial judge in the memorandum opinion on motions after verdict stated:
"The illness occurred after a verdict had been reached. I see nothing, and have no evidence, nor have I even a suspicion that the illness in any way befell any of these jurors prior to arriving at a verdict, or affected their verdict in any way. Therefore, I feel that the verdict in no way reflects any incapacity on the part of the jurors, either individually or collectively. There are no dissents to the verdict. Two of the sick jurors were in attendance at the time that the verdict was received, and capable of discussing matters with the Court. The interests of justice, in the Court's opinion, require no concern with that matter in respect to this verdict."
The record before this court contains no transcript of the proceedings, nor any indication that any notes, minutes or record of any kind were taken concerning the facts involving the sick jurors. There is, therefore, no basis upon which this court can review the ruling of the trial court. The rule is well established that the review of the supreme court is limited to the record; we are powerless to review a question of fact which is based upon testimony or other acceptable information not preserved on appeal. Stelloh v. Liban (1963), 21 Wis. (2d) *321 119, 122, 124 N. W. (2d) 101; Gray v. Wisconsin Telephone Co. (1966), 30 Wis. (2d) 237, 242, 243, 140 N. W. (2d) 203.
Since we have no basis for review other than the trial court's memorandum, we cannot say the trial court abused its discretion in not granting the motion for a new trial in the interests of justice.
Even if this court were to assume that one or more of the jurors were ill during deliberations, only conjecture can serve to determine the effect, if any, and the direction, if any, of that effect upon the verdict. The record does not reveal any attempt by the defendants to poll the jury, nor a motion for mistrial,[3] nor any permissible post examination of any of the jurors to determine the character of illness nor its effect on any of the jurors. There just is no reliable basis in the record upon which the validity of this verdict can be attacked.
The cases cited by the defendants, in the main, involve outside influences which could have or did exert a partisan influence upon the jury before or during their deliberations. There is not even a suggestion of partisan influence in the record before us.
By the Court.Judgment affirmed.
HANSEN, J., took no part.
NOTES
[2] 31 Am. Jur., Jury, p. 145, sec. 166.
[3] Kink v. Combs (1965), 28 Wis. (2d) 65, 78, 135 N. W. (2d) 789; Ford Motor Credit Co. v. Amodt (1966), 29 Wis. (2d) 441, 447, 139 N. W. (2d) 6.
| {
"pile_set_name": "FreeLaw"
} |
997 F.2d 882
Exantusv.INS
NO. 92-4700
United States Court of Appeals,Fifth Circuit.
July 09, 1993
1
Appeal From: I.N.S.
2
AFFIRMED.
| {
"pile_set_name": "FreeLaw"
} |
634 So.2d 565 (1994)
Samantha R. FITZHUGH
v.
John Troy FITZHUGH.
AV92000830.
Court of Civil Appeals of Alabama.
January 14, 1994.
*566 Windell C. Owens and Jack B. Weaver of Owens, Weaver & Associates, P.C., Monroeville, for appellant.
George K. Elbrecht and Robert C. King, Monroeville, for appellee.
RICHARD L. HOLMES, Retired Appellate Judge.
This is a child custody modification case.
After an ore tenus hearing, the trial court awarded custody of the parties' three-year-old son to the father.
The mother appeals. The dispositive issue on appeal is whether the trial court abused its discretion in awarding "full" custody to the father. We find no such abuse of discretion as to require reversal and affirm.
When we view the record with the attendant presumptions accorded the actions of the trial court, the following is revealed:
The parties were divorced in January 1992. By agreement, which was incorporated into the divorce decree, joint care, custody, and control of the child was awarded to each parent. Specifically, the mother and father were to share actual physical custody.
In March 1993, the father petitioned the trial court, seeking full custody. The mother countered with a petition, wherein she also sought full custody.
As indicated, after an ore tenus hearing, the trial court awarded full custody to the father, and the mother was awarded visitation rights.
At the outset, we note that the standard of review to be applied in child custody cases is well settled. When the evidence has been presented ore tenus, the judgment of the trial court is entitled to a presumption of correctness, and such judgment will not be disturbed on appeal unless it is so unsupported by the evidence that it appears that there was clearly an abuse of the discretion of the trial court. Jenkins v. Jenkins, 541 So.2d 19 (Ala.Civ.App.1989).
In custody cases, such as the instant case, where the parents shared joint legal and physical custody of the child and where no judicial determination had been made which vested physical custody in either parent, our supreme court has determined that the standard for review is the "best interest of the child," which places both parents on equal ground to gain "full" custody of the child. Ex parte Couch, 521 So.2d 987 (Ala. 1988).
With the above standard in mind, we do not deem it necessary to set out in detail the operative facts. However, the following is pertinent to the father's allegations in his petition to modify that there was a substantial change of circumstances: Since the divorce in January 1992, the mother has moved five or six times. She has been married two times since the divorce. She lived with her second husband only about three months.
At the time of the hearing, the mother was pregnant, and the father of the unborn child was not her current husband. In fact, the mother and her current husband had been married less than two weeks at the time of the hearing. The father of the unborn child was a man with whom she had lived while she was separated from her second husband.
The father testified that the child appeared to be affected by all of this because every time the mother would change residences or boyfriends/husbands, the child would, once again, begin wetting his pants and wetting the bed at night.
Also, since the divorce from the father, the mother has been charged with criminal conduct and has pleaded guilty to issuing eight worthless checks. Further, she has been investigated by the Department of Human Resources for child abuse. The mother was discharged from one job for fighting on company property, and she has quit two other jobs.
*567 On the other hand, the father has been employed steadily as a truck driver and has remarried. He and his current wife reside in the house which the father was awarded in the divorce decree. His current wife works outside the home, and her five-year-old daughter attends the same day care that the child does. The testimony revealed that the father has a very stable home environment and that the child has a good relationship with the father's current wife.
Clearly, with the above evidence before the trial court, there was no error in granting the father's petition for full custody, with visitation rights vested in the mother. While perhaps no one incident would warrant a change in custody, clearly the totality of the circumstances dictates that the actions of the trial court were not in error. Ex parte P.G.B., 600 So.2d 259 (Ala.1992); Burnette v. Burnette, 511 So.2d 214 (Ala.Civ.App.1987).
In addition to the above, the mother contends that the trial court should have applied the "clean hands doctrine" in that the father was in arrears in his child support payments. The application of this doctrine in this type of case is discretionary. Lowe v. Lowe, 466 So.2d 969 (Ala.Civ.App.1985).
Clearly, as seen from the above, the failure of the trial court to apply the doctrine in this instance would not be reversible error. Furthermore, the record is not clear as to whether the father was, in fact, in arrears.
This case is due to be affirmed.
The father's request for attorney's fees on appeal is, in view of all the circumstances, denied.
The foregoing opinion was prepared by Retired Appellate Judge RICHARD L. HOLMES while serving on active duty status as a judge of this court under the provisions of § 12-18-10(e), Code 1975, and this opinion is hereby adopted as that of the court.
AFFIRMED.
All the Judges concur.
| {
"pile_set_name": "FreeLaw"
} |
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
A Special Touch, :
Petitioner :
:
v. : No. 1181 C.D. 2016
: Submitted: February 17, 2017
Department of Labor and Industry, :
Office of Unemployment :
Compensation Tax Services, :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION
BY PRESIDENT JUDGE LEAVITT1 FILED: August 23, 2018
A Special Touch, a beauty salon, petitions for review of an adjudication
of the Department of Labor and Industry (Department) that imposed an
unemployment compensation tax on it for five persons who worked at the salon in a
variety of positions. In its adjudication, the Department classified these five workers
as employees, but it classified five other workers who worked there in similar
positions as independent contractors. Because all ten workers were “customarily
engaged in an independently established trade, occupation, profession or business”
under Section 4(l)(2)(B) of the Unemployment Compensation Law (Law),2 we
reverse the Department’s holding in that respect.
Background
A Special Touch (Salon) is a sole proprietorship owned by Colleen
Dorsey (Owner) that offers nail, skin, massage and cosmetic services. On August
1
This matter was assigned to the authoring judge on March 12, 2018.
2
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §753(l)(2)(B).
26, 2014, the Department’s Office of Unemployment Compensation Tax Services
(Tax Services Office) notified Salon that it owed $10,647.93 in unemployment
compensation taxes, with interest, for the period 2010 through the second quarter of
2014.3 The assessment notice asserted that ten persons who worked at Salon during
that period of time were employees and subject to the unemployment payroll tax.
Salon petitioned for a reassessment, on which the Department conducted a hearing
on January 12, 2015.
In the course of the reassessment proceeding, the Tax Services Office
conceded that three of the workers had been incorrectly classified as employees. The
three included one licensed cosmetologist and two others who did occasional
cleaning and babysitting services. This left the status of the seven remaining workers
in contest. Two worked as massage therapists; two worked as nail technicians; one
did cleaning and maintenance work; one did babysitting, cleaning and laundry work;
and one did babysitting and cleaning work. In its adjudication, the Department
3
Section 304(a)(1)-(2) of the Law provides, in pertinent part:
Each employer shall file with the department such reports, at such times, and
containing such information, as the department shall require, for the purpose of
ascertaining and paying the contributions required by this act.
(a)(1) If any employer fails within the time prescribed by the
department to file any report necessary to enable the department to
determine the amount of any contribution owing by such employer,
the department may make an assessment of contributions against
such employer of such amount of contributions for which the
department believes such employer to be liable, together with
interest thereon as provided in this act.
(2) Within fifteen days after making such assessment the department
shall give notice thereof to such employer as provided in paragraph
(3). If such employer is dissatisfied with the assessment so made he
may petition the department for a re-assessment in the manner
herein prescribed.
43 P.S. §784(a)(1)-(2).
2
concluded that the massage therapists were independent contractors and,
accordingly, granted Salon’s reassessment as to them. With respect to the five
remaining workers, the Department acknowledged it was a “close case.”
Department Adjudication at 33; Reproduced Record at 36a (R.R. ___). In the end,
it concluded that the two nail technicians and the three who did occasional
babysitting, cleaning and laundry work at the Salon were employees, not
independent contractors.
In reaching its conclusion, the Department made extensive findings of
fact, and they are not disputed by Salon. In 1999, Owner bought the building with
an operating salon on the first floor. She lives upstairs. Before Owner bought the
operating salon business, it employed 10 to 15 persons, who were treated as
employees for purposes of the unemployment payroll tax. Owner continued this
business model until approximately 2005, when she closed down Salon. In
approximately 2007, Owner reopened Salon under a “lease the space out”
arrangement, by which the professional workers split their client payments with
Salon. Sixty percent went to the professional worker, and forty percent went to
Salon “to cover items such as electric, water, credit card fees and other overhead[.]”
Department Adjudication at 3-4, Finding of Fact No. 10; R.R. 7a. Salon did not have
written independent contractor agreements with any of the ten individuals whose
work at Salon prompted the Department’s audit.
None of the ten workers who were the subject of the audit had their
names listed on the exterior of the salon. Only one worker, one of the massage
therapists, had business cards. All were responsible for maintaining professional
licenses, where applicable, and Salon did not provide any job training. All ten
3
workers were free to work for others; had keys to the salon; and maintained their
own schedules.
Clients scheduled their appointments for professional services at Salon
by directly calling the service providers, who had given their personal phone
numbers to their clients, or by calling Salon. All appointments were maintained on
Salon’s computer, regardless of how they were scheduled. Approximately 80% of
Salon’s clients had “arrange[d] standing or regular appointments[.]” Department
Adjudication at 5, Finding of Fact No. 19; R.R. 8a. The prices for Salon services
were agreed upon by both Salon and the professional workers. Salon collected the
client’s payments, but the professional workers maintained a record of each
transaction to ensure an accurate split. Salon paid the professional workers “by
business check weekly, biweekly, or semimonthly[,]” without any withholdings for
income or other payroll taxes. Department Adjudication at 5, Finding of Fact No.
23; R.R. 8a. Clients paid tips directly to the professional worker except where the
client used a credit card to pay for the service and the tip. The professional workers
provided their own supplies and equipment.
Prior to the period covered by the assessment, Owner “let one person
go” because she “did not feel that person was ‘a fit for this,’ and did not think ‘this
is the space’ for that person.” Department Adjudication at 6, Finding of Fact No.
25; R.R. 9a. Owner indicated to the Tax Services Office that she controlled who
provided their services at Salon and could dismiss persons by ending their so-called
lease arrangement.
4
The two nail technicians, S.M. and V.D.,4 have their own stations at
Salon. Both appear on Salon’s website as members of “Our Team” and “Our trained
and friendly staff[.]” Department Adjudication at 12, Finding of Fact Nos. 76, 79;
R.R. 15a.
One nail technician, S.M., is Owner’s sister and had worked at Salon as
an employee before it closed. When it reopened, S.M. agreed to work under the new
lease arrangement. S.M. works on Wednesdays, when she may see two to four
clients, and sometimes on Tuesdays; she averages $200 per week in earnings. She
described her work at Salon as “a side activity – something she does [ ] to get out of
the house[.]” Department Adjudication at 12, Finding of Fact No. 74; R.R. 15a. She
provides her own equipment and collects her 60% share on a semi-monthly basis.
The other nail technician, V.D., began working at the Salon in 2011
while also working at two other locations. Over time, she brought all her clients to
Salon, which is now the only place where she performs her services. She sets her
own hours and provides her own equipment.
The three “cleaning personnel” are G.S., C.S. and B.G. Their names
do not appear on Salon’s website. G.S. works at an M&M factory and began doing
part-time janitorial work at Salon in 2013 for a couple hours a week. He sets his
own hours and hourly wage, and he bills Salon for his work. C.S. is a college student
and works at Red Robin; he does babysitting for Owner’s children as well as
cleaning and laundry duties for Salon. He works one to four days a week. He sets
his hours and hourly wage, and he bills Salon for his work. B.G. worked at Salon
during the third quarter of 2012 during which time she also worked at a “temp
4
In its decision dated June 16, 2016, the Department identified the individual workers at issue by
their initials. R.R. 45a. The same method is used in this opinion.
5
agency[.]” Department Adjudication at 10, Finding of Fact No. 57; R.R. 13a. She
babysat Owner’s children and did janitorial work. B.G. set her own hours and hourly
wage, working one or two days a week, depending on need, and billed Salon for her
work.
The Department reviewed Salon’s reassessment petition under Section
4(l)(2)(B) of the Law, which indirectly defines self-employed persons as those who
are (1) free from control or direction over the performance of their services and are
(2) customarily engaged in an independently established trade or business. 43 P.S.
§753(l)(2)(B).5 The Department found that all seven workers worked free from
Salon’s control or direction, which satisfied the first prong. However, the
Department concluded that under the second prong, two workers were independent
contractors and five were employees of Salon.
With respect to the massage therapists, L.M. and C.B., the Department
concluded that they were independent contractors because they provided services in
other places, i.e., in their clients’ homes. Further, L.M. had her own business cards.
Because the massage therapists worked in more than one location, the Department
concluded that they were engaged in an independent trade or business.
With respect to the nail technicians and cleaning personnel, the
Department found otherwise. Because none provided nail or cleaning-type services
at other places, they were found not to be engaged in an independent trade. The
Department also reasoned that a person is not “customarily” engaged in a trade or
business when he performs “isolated or sporadic jobs.” Department Adjudication at
5
The full text of Section 4(l)(2)(B) appears in the opinion, infra. In actuality, Section 4(l)(2)(B)
defines the meaning of “employment” under the Law and provides exceptions. It is these
exceptions that indirectly define “self-employment,” a term that does not appear in Section
4(l)(2)(B) of the Law.
6
17 (citing Minelli v. Unemployment Compensation Board of Review, 39 A.3d 593
(Pa. Cmwlth. 2012)); R.R. 20a.6
Accordingly, the Department granted Salon’s reassessment petition
with respect to the two massage therapists, but it denied the petition with respect to
the nail technicians and cleaning personnel. Salon then petitioned for this Court’s
review.
Appeal
On appeal,7 Salon argues that the Department erred in concluding that
any of the five workers were its employees simply because they did not perform their
services in locations other than Salon. Salon asserts that the Department erred in its
reliance upon Minelli, 39 A.3d 593, because that case concerned whether a claimant,
who is receiving unemployment benefits, becomes ineligible by doing occasional,
short-term jobs. Minelli has application only in that circumstance. Salon argues that
the true test of self-employment is whether the worker is able to work for others, not
whether he actually does so.
We begin with a review of the law. A putative employer challenging
the assessment of unemployment compensation tax must satisfy the two-prong
exception to employment set forth in Section 4(l)(2)(B) of the Law. Cameron v.
Department of Labor and Industry, Bureau of Employer Tax Operations, 699 A.2d
6
In its adjudication, the Department stated that in Minelli, “Commonwealth Court has added to
the Danielle Viktor test by requiring proof that the individual or claimant be ‘customarily engaged
in such trade or business in order to be self-employed,’ as opposed to being engaged in isolated or
sporadic jobs.” Department Adjudication at 17; R.R. 20a. The case referred to is Danielle Viktor,
Ltd. v. Department of Labor and Industry, Bureau of Employer Tax Operations, 892 A.2d 781 (Pa.
2006).
7
This Court’s scope of review determines “whether the necessary findings of fact are supported
by substantial evidence, whether the Department committed an error of law, or whether the
petitioner’s constitutional rights were violated.” Victor v. Department of Labor and Industry, 647
A.2d 289, 291 n.1 (Pa. Cmwlth. 1994).
7
843, 845 (Pa. Cmwlth. 1997). Section 4(l)(2)(B) provides, in relevant part, as
follows:
Services performed by an individual for wages shall be deemed
to be employment subject to this act, unless and until it is shown
to the satisfaction of the department that--(a) such individual has
been and will continue to be free from control or direction over
the performance of such services both under his contract of
service and in fact; and (b) as to such services such individual is
customarily engaged in an independently established trade,
occupation, profession or business.
43 P.S. §753(l)(2)(B) (emphasis added).
Our Supreme Court has established a three-part test for determining
whether the putative employee is engaged in “an independently established trade,
occupation or business,” i.e., the second prong. Danielle Viktor, Ltd. v. Department
of Labor and Industry, Bureau of Employer Tax Operations, 892 A.2d 781, 792 (Pa.
2006). In determining the independent trade, it must be determined (1) whether the
individuals are able to work for more than one entity; (2) whether the individuals
depend on the existence of the presumed employer for ongoing work; and (3)
whether the individuals were hired on a job-to-job basis and could refuse any
assignment.
Here, the Department conceded the first prong, so it need not be further
addressed. On the second prong, the Department found that all five workers were
allowed to provide services to anyone and that their work for Salon did not impede
their ability to do so. However, because none of the five actually worked for others
8
at other locations, the Department concluded that they were not “customarily”
engaged in an independently established trade or business.8
In so holding, the Department relied principally on Minelli, 39 A.3d
593, which considered whether a claimant receiving unemployment benefits became
ineligible under Section 402(h) of the Law,9 43 P.S. §802(h), because she accepted
a brief independent consulting position, which lasted about 22 hours over a three-
day period. The Unemployment Compensation Board of Review (Board) held that
this work rendered her ineligible by reason of self-employment. We reversed. We
explained that a claimant’s occasional work was “not enough to demonstrate that
[said individual] is customarily engaged in an independently established trade,
occupation, profession or business.” Minelli, 39 A.3d at 598 (quoting Silver v.
Unemployment Compensation Board of Review, 34 A.3d 893, 898 (Pa. Cmwlth.
2011)). This Court further explained that the Minelli decision “in no way depart[ed]
from the three part test described by our Supreme Court in Viktor … to determine
whether one is engaged in an ‘independently established trade, occupation,
profession or business.’” Minelli, 39 A.3d at 598.
Here, the Department reasoned that Minelli “added to the Danielle
Viktor test[.]” Department Adjudication at 17; R.R. 20a. This is an incorrect
understanding of Minelli, which did not revise the Viktor test; indeed, we specifically
so stated. Minelli, 39 A.3d at 598. Further, Minelli did not hold that an individual
8
The concept of “work for others” differs for the two types of workers. The nail technicians
provided professional services to clients, not to Salon, a sole proprietorship without a need for
these services. The nail technicians performed their services only at Salon. The cleaning personnel
all had other occupations or jobs, but they only did cleaning services for Salon. Stated otherwise,
Salon was their sole customer.
9
Section 402(h) provides in pertinent part: “[a]n employe shall be ineligible for compensation for
any week … [i]n which he is engaged in self-employment….” 43 P.S. §802(h).
9
must actually work for multiple clients in order to be self-employed. Nor did it hold
that one who works only on occasion is necessarily an employee. That an individual
may be unsuccessful in obtaining other clients or is simply satisfied working for a
single client or at a single location does not transform an independent contractor
relationship into that of employer/employee. See C E Credits OnLine v.
Unemployment Compensation Board of Review, 946 A.2d 1162 (Pa. Cmwlth. 2008).
Minelli arose under Section 402(h) of the Law, which renders a
claimant receiving benefits ineligible if she sets up a business. It has nothing to do
with the nature of the claimant’s employment relationship with her separating
employer. By contrast, Section 4(l)(2)(B) of the Law considers the nature of the
employment relationship between claimant and his separating employer. Ironically,
the Law does not define “self-employment.” It is by the two-part exception to the
definition of “employment” in Section 4(l)(2)(B) that the meaning of “self-
employment” has been explicated. Here, none of the workers at Salon is receiving
unemployment benefits as a result of a separation from prior employment. This is
not a Minelli case. The question is whether they are employees of Salon and subject
to the unemployment compensation tax.
Pasour v. Unemployment Compensation Board of Review, 54 A.3d 134
(Pa. Cmwlth. 2012), is instructive. In Pasour, the claimant provided legal services
to clients through an attorney referral company, known as Abelson. When his legal
services were completed for a client to whom he had been referred, the claimant
sought unemployment compensation, asserting that Abelson was his employer. The
Board held that because he could do legal services for anyone and was free to refuse
referrals from Abelson, he was customarily engaged in an independently established
10
trade or business. On appeal, the claimant asserted that the holding in Minelli
required a different result. We rejected that argument, explaining:
Minelli is distinguishable. In Minelli, we held, based on Silver,
that a claimant, who is already receiving [unemployment
compensation] benefits, is not disqualified as an independent
contractor because the claimant subsequently accepts an
occasional work offer on an as-needed basis. We stated, in
Silver, “the fact that an unemployed person agrees to accept, and
thereafter does accept, an occasional offer of work is simply not
enough to demonstrate that said individual is customarily
engaged in an independently established trade, occupation,
profession or business.” Silver, 34 A.3d at 898…. Claimant,
unlike the claimants in Minelli and Silver, was not already
receiving [unemployment compensation] benefits as a result of
his separation from his prior employment. Thus, the question is
not, as it was in Minelli and Silver, whether the position with
Abelson disqualified Claimant from receiving benefits for which
he was already qualified and receiving, but whether the work
Claimant performed for Client, via Abelson, is sufficient to grant
[unemployment compensation] benefits in the first instance.
Pasour, 54 A.3d at 139 (emphasis added).10
More recently, in Lowman v. Unemployment Compensation Board of
Review, 178 A.3d 896 (Pa. Cmwlth. 2018), the Court considered whether a claimant,
who was otherwise eligible for unemployment benefits, became ineligible by reason
of his becoming an Uber driver. Consistent with Minelli, we held that the central
question in a Section 402(h) case is whether an otherwise eligible claimant has taken
“a positive step to embark on an independent trade or business, thereby disqualifying
himself for benefits.” Lowman, 178 A.3d at 902.
10
Pasour supports the conclusion, here, that the licensed service providers, including the
cosmetologist, the nail technicians and massage therapists, “work” for their clients, as opposed to
working for Salon. As did Abelson, Salon provides space and makes referrals. It is not, however,
a client of those services.
11
In sum, the Minelli analysis is used where the Department disqualifies
a claimant receiving benefits from further compensation under Section 402(h) of the
Law. Minelli is not instructive where, as here, the issue is an audit by the Tax
Services Office of a putative employer’s business operations.
The Department’s reliance on Peidong Jia v. Unemployment
Compensation Board of Review, 55 A.3d 545 (Pa. Cmwlth. 2012), is likewise
misplaced. In that case, the claimant, a software programmer, worked under a
consultant agreement. When his services were no longer needed, he applied for
unemployment benefits and argued that he was eligible because he had no other
business. This Court agreed that the claimant was eligible because he did not do
programming services for any other customer and could not do so because his time
was fully consumed by a single employer.
This distinction was clarified one year later in Stauffer v.
Unemployment Compensation Board of Review, 74 A.3d 398 (Pa. Cmwlth. 2013).
There, a mother of three children petitioned for review of an adjudication of the
Board, which held that she was an employer of an unemployment compensation
claimant who babysat for her children. The claimant did not provide child care for
others, although she was not restricted from doing so. This Court reversed the Board,
stating:
In Jia, this Court reversed a Board decision that the claimant was
an independent contractor because the record showed that the
claimant was required to report to the employer’s office, had an
eight-hour work day schedule prescribed by the employer and
needed to obtain the employer’s permission for any deviation
from the time or place of work set by the employer, and this fixed
schedule effectively precluded freedom to work for others….
Here, in contrast, the record showed that Petitioner did not
control the time, place or manner of Claimant’s work and that
Claimant was free to provide child care for others.
12
Id. at 408 (emphasis added). We explained that the pertinent inquiry is whether the
putative employer directly, or by the hours of work assigned, prohibits the putative
employee from performing services for others. Neither applied in Stauffer.
Accordingly, the “fact that Claimant did not happen to do any babysitting for others
during the period in question is immaterial.” Id. at 407.
Here, as in Stauffer, the five workers did their work for Salon at the
times of their choosing. They were free to work for others and at different locations.
Their hours were not such that they were precluded from doing nail and cleaning
services for others. The Department specifically found as follows:
There appears to be little dispute that the individuals in question
would have been able to perform services for more than one
entity. Significantly, [Salon] did not use written contracts with
these individuals [ ], and therefore, there was no evidence of any
type of restrictive covenants limiting their ability in this regard.
There was also nothing to suggest that the hours worked at
[Salon] effectively precluded them from offering their services to
others. [Salon] did not set their hours of work…. The nail
technicians have their own stations at [Salon], and set their own
appointments and schedule[.] Many of them, including the
cleaning personnel, had other employment.
Department Adjudication at 27; R.R. 30a (internal citations omitted) (emphasis
added). Accordingly, the Department’s findings support the legal conclusion that
the five individuals were independent contractors under Stauffer.
In sum, the totality of the circumstances weigh in favor of finding that
from 2010 to 2014 the five workers at issue in this appeal were customarily engaged
in an independently established trade or business under the second prong of Section
4(l)(2)(B) of the Law. They were able to work for more than one entity; were not
limited by the nature of their work for Salon, or hours, to a single employer; and
13
were not dependent upon Salon’s existence for ongoing work.11 Viktor, 892 A.2d
781. The Department found that the “licensed providers were not hired by the job.”
Department Adjudication at 30; R.R. 33a.12 However, all five individuals were able
to refuse an assignment, which suggests an independent contractor relationship.
Viktor, 892 A.2d at 797 (“It is difficult to fathom a situation where someone other
than an individual engaged in his or her own business would possess the unmitigated
prerogative to accept or reject assignments at will, to work only when he or she chose
to, to substitute other workers of his or her choice when he or she chose not to
complete an assignment, and to perform the services however he or she saw fit to do
so.”).
Conclusion
For the foregoing reasons, we conclude that Salon has satisfied each of
the factors identified in Viktor and the two prongs of Section 4(l)(2)(B) of the Law.
Accordingly, we hold that the Department erred in denying Salon’s petition for
reassessment. The order of the Department is reversed insofar as it denied Salon’s
reassessment petition with respect to the nail technicians (S.M. and V.D.) and
cleaning personnel (G.S., C.S., and B.G.). The order of the Department is otherwise
affirmed insofar as it granted Salon’s reassessment petition with respect to the
massage therapists (L.M. and C.B.), as well as the three workers whom the Tax
Services Office conceded are independent contractors.
_____________________________________
MARY HANNAH LEAVITT, President Judge
11
To the extent the cleaning personnel were limited in their ability to accept more cleaning jobs,
this was because of their hours of employment with other entities, not their hours with Salon.
12
This finding is confusing because the licensed providers were hired by their clients “by the job.”
14
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
A Special Touch, :
Petitioner :
:
v. : No. 1181 C.D. 2016
:
Department of Labor and Industry, :
Office of Unemployment :
Compensation Tax Services, :
Respondent :
ORDER
AND NOW, this 23rd day of August, 2018, the Final Decision and Order
of the Department of Labor and Industry, dated June 16, 2016, in the above-
captioned matter, is hereby AFFIRMED in part and REVERSED in part consistent
with the attached opinion.
______________________________________
MARY HANNAH LEAVITT, President Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
A Special Touch, :
Petitioner :
: No. 1181 C.D. 2016
v. :
: Submitted: February 17, 2017
Department of Labor and Industry, :
Office of Unemployment :
Compensation Tax Services, :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
DISSENTING OPINION
BY JUDGE McCULLOUGH FILED: August 23, 2018
Because the three individuals (G.S., C.S. and B.G.) who performed
occasional babysitting, cleaning/janitorial and laundry work for A Special Touch
(Petitioner) and/or its owner were not “customarily” engaged in an independently
established trade, occupation, business or profession, I respectfully dissent from the
Majority’s determination that they are independent contractors. To so hold
disregards the statutory requirement and runs afoul of the Supreme Court’s directive
that the Unemployment Compensation Law (Law)1 “requires the term ‘employment’
to be broadly construed to provide for the largest possible coverage of employees.”
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended.
Danielle Viktor, Ltd., v. Department of Labor and Industry, 892 A.2d 781, 795 (Pa.
2006).
“An individual receiving wages for his services is presumed to be an
employee, and the employer bears a heavy burden to overcome that presumption.”
Jia v. Unemployment Compensation Board of Review, 55 A.3d 545, 548 (Pa.
Cmwlth. 2012). Petitioner failed to overcome this presumption or to establish that
G.S., C.S., and B.G. were independent contractors. Our Supreme Court recognized
that “a worker can be considered an independent contractor only if he or she is in
business for himself or herself.” Danielle Viktor, Ltd., 892 A.2d at 798 (emphasis
added). Section 4(l)(2)(B) of the Unemployment Compensation Law (Law)2
provides the following two-prong test to determine if an individual is an employee
or independent contractor,
(B) Services performed by an individual for wages shall
be deemed to be employment subject to this act, unless
and until it is shown to the satisfaction of the department
that—(a) such individual has been and will continue to
be free from control or direction over the performance
of such services both under his contract of service and
in fact; and (b) as to such services such individual is
customarily engaged in an independently established
trade, occupation, profession or business.[3]
43 P.S. §753(l)(2)(B) (emphasis added). Section 4(l)(2)(B) of the Law creates a
presumption that an individual working for wages is an employee (Resource
Staffing, Inc. v. Unemployment Compensation Board of Review, 995 A.2d 887, 890
(Pa. Cmwlth. 2010) and clearly requires that the individual must be “customarily
2
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended.
3
As the Majority notes, the term “self-employment” is not defined in the Law. Hence, we
look to the two-part exception to employment set forth in section 4(l)(2)(B) for guidance.
PAM - 2
engaged” in an independently established trade, occupation, profession or business
to be an independent contractor.
In Minelli v. Unemployment Compensation Board of Review, 39 A.3d
593 (Pa. Cmwlth. 2012), we underscored the necessity of meeting this requirement
while also recognizing the Supreme Court’s three-part test developed in Danielle
Viktor, Ltd.4 As we held in Minelli, the Law requires that to be an independent
contractor, the individual must be “customarily” engaged in a trade or business.
The fact that an unemployed person agrees to accept, and thereafter does accept, an
occasional offer of work is simply not enough to demonstrate that the individual is
engaged in an independently established trade, occupation, profession or business.
As such, an individual who performed a consulting job for approximately 22 hours
over a period of 3 days was not self-employed, and therefore not eligible to receive
unemployment compensation benefits, because she was not customarily engaged in
an independently established trade, occupation, profession or business. Minelli.
In concluding that Minelli has no application in this case, the Majority
overlooks the Law’s clear requirement that the individual must be customarily
engaged in an independently established trade or business. Minelli relied on our
earlier decision in Silver v. Unemployment Compensation Board of Review, 34 A.3d
893 (Pa. Cmwlth. 2011), which also addressed section 4(l)(2)(B) of the Law, albeit
another case involving a disqualification under section 402(h) of the Law. In Silver,
4
Our Supreme Court in Danielle Viktor, Ltd., established a three-part test for determining
whether a putative employee is engaged in “an independently established trade, occupation,
profession or business” under this second prong. Specifically, under Danielle Viktor, Ltd., we look
at the following factors: (1) whether the individuals are able to work for more than one entity; (2)
whether the individuals depended on the existence of the presumed employer for ongoing work;
and (3) whether the individuals were hired on a job-to-job basis and could refuse any assignment.
Id., 892 A.2d at 801-02.
PAM - 3
we stated, “This Court has consistently held that, before a claimant will be declared
to be self-employed, both elements of section 4(l)(2)(B) must be satisfied.” Id. at
896. We noted that in Buchanan v. Unemployment Compensation Board of Review,
581 A.2d 1005 (Pa. Cmwlth. 1990), this Court held that “the claimant’s conduct
[selling jewelry at a flea market] did not reflect positive steps in embarking on an
independent trade or business venture,” that such conduct was never intended to be
on a permanent basis, and that it was merely an activity on the side to make extra
money. Silver, 34 A.3d at 898.
Ultimately, in Silver, we held that an individual who was receiving
unemployment compensation benefits and providing telephone consultations on an
intermittent, as-needed basis for a third party was eligible for benefits as she was not
self-employed, i.e., she was not “customarily engaged in an independently
established trade, occupation, profession or business.” Acceptance of “an occasional
offer of work is simply not enough” to satisfy the second prong of section 4(l)(2)(B)
of the Law. Silver, 34 A.3d at 898. The Majority holds that these cases are limited
to disqualifying determinations under section 402(h) of the Law and do not apply in
the analysis of whether an individual is engaged in an independently established
trade, occupation, profession, or business. However, because both Minelli and Silver
form the basis of our precedent regarding application of the “customarily” engaged
standard, I must strongly disagree. To hold otherwise is to ignore the statutory
language and, furthermore, creates two different tests to determine whether an
individual is an independent contractor.
PAM - 4
Further, Minelli recognized that the three-part test developed by our
Supreme Court in Danielle Viktor, Ltd., did not address the customarily engaged
element of the second prong.5 In fact, we expressly pointed out in Minelli that,
this Court, in holding that the second element of Section
4(l)(2)(B) has not been met under the facts of this case, is
in no way departing from the three part test described by
our Supreme Court in [Danielle Viktor, Ltd.] to determine
whether one is engaged in an ‘independently established
trade, occupation, profession or business.’ Rather, we are
simply recognizing that the Law requires an additional
element, that the claimant be customarily engaged in
such trade or business in order to be considered self-
employed. This element was not discussed in [Danielle
Viktor, Ltd.], or other cases which followed, because the
persons found to be independent contractors in those cases
were clearly engaged in ongoing business activities rather
than an isolated or sporadic job(s).
Id., 39 A.3d at 598 (emphasis added). Indeed, the persons found to be independent
contractors in Danielle Viktor, Ltd., were already recognized as being established
limousine drivers who were engaged in ongoing business activities rather than
isolated or sporadic jobs and there was no question as to whether they were
customarily engaged in the same. Although Minelli involved a different procedural
posture,6 the facts therein clearly necessitated a review of section 4(l)(2)(B) of the
Law and the three-part independent contractor test approved by our Supreme Court
in Danielle Viktor, Ltd.
5
I agree with the Majority to the extent it stated that the Department’s decision incorrectly
characterized Minelli as adding to the test in Danielle Viktor, Ltd. Minelli did not add to this test.
It merely clarified the same.
6
Namely, a question of whether an individual was disqualified from receiving
unemployment compensation benefits under section 402(h) of the Law, 43 P.S. §802(h), as a result
of that individual performing occasional work for a third party. Section 402(h) of the Law states
that an employee shall be ineligible for compensation for any week “[i]n which he is engaged in
self-employment.” 43 P.S. §802(h).
PAM - 5
Here, the Department found that G.S. performed part-time
cleaning/janitorial and maintenance work for Petitioner, did not have his own
business, worked a regular job at the M&M factory, and picked up odds and ends
jobs when he could. (Department’s Final Decision and Order at 8.) Clearly, the fact
that G.S. does not have his own business and the work in question was classified as
“odds and ends” precludes a finding that he is an independent contractor. Regarding
C.S., the Department found that he was a college student who helped
Petitioner/Petitioner’s owner with her children and with cleaning duties, and also
worked at the local Red Robin restaurant. Id. Regarding B.G., the Department
found that she assisted Petitioner/Petitioner’s owner with babysitting and janitorial
duties approximately one or two days a week and also worked for a temp agency.
Id. at 9-10.
There were no findings by the Department as to whether these
individuals were customarily engaged in any of these services or whether G.S., C.S.,
or B.G. depended on the existence of Petitioner for ongoing work. However, the
Majority makes its own finding as to whether they depended on Petitioner for
ongoing work in the negative. Nonetheless, this finding alone would not qualify
G.S., C.S., or B.G. as independent contractors because there was no evidence they
were customarily engaged in offering such services as part of an independently
established trade, occupation, profession, or business.
As noted above, with regard to the second prong of the Danielle Viktor,
Ltd. test, our Supreme Court has explained that “a worker can be considered an
independent contractor only if he or she is in business for himself or herself.” 892
A.2d at 798. Here, the Department recognized as much, stating that “the relevant
inquiry seems to be whether [G.S., C.S., and B.G.] performed the same services
as part of an independent business or for other businesses.” (Department’s Final
PAM - 6
Decision and Order at 27-28.) The Department went on to conclude that such a
“showing clearly was not made with respect to the three cleaning personnel in
dispute: GS, CS, and BG.” (Id. at 28.) Moreover, the record indicates that these
individuals occasionally worked for Petitioner as needed under a non-fixed schedule,
and while each of these individuals worked other jobs, the other jobs were unrelated
to the services they performed for Petitioner and, hence, do not show that they had
independent businesses providing such services.
With respect to the final prong of this test, the record establishes that G.S.,
C.S., and B.G. could refuse any assignment, but only C.S. and B.G. were hired on a
job-to-job basis. The nature of G.S.’s hiring was, at best, ambiguous in the record,
which merely indicated that he performed janitorial work a couple of hours per week
for Petitioner since 2013. The record is not clear if this work was steady each week
or merely on an as-needed basis.
Based on this record, the Department correctly found there was
insufficient evidence to conclude that G.S., C.S., or B.G. were in business for
themselves offering babysitting, cleaning/janitorial, and/or laundry services to
demonstrate that they were customarily engaged in an independently established
trade, occupation, profession or business. Section 4(l)(2)(B) of the Law; Minelli. In
reversing the Department’s order concluding that they were employees, the Majority
focuses only on the three-part test in Danielle Viktor, Ltd., to the exclusion of the
“customarily” engaged statutory requirement and this Court’s precedent, and as such
I must respectfully dissent
________________________________
PATRICIA A. McCULLOUGH, Judge
PAM - 7
| {
"pile_set_name": "FreeLaw"
} |
22 F.Supp.2d 1169 (1998)
CHART DEVELOPMENT CORPORATION, an Oregon corporation, Plaintiff,
v.
WEST SLOPE WATER DISTRICT, a Water Service District, Defendant.
No. Civ. 98-904-JO.
United States District Court, D. Oregon.
October 15, 1998.
Charles E. Corrigan, O'Donnell Ramis Crew Corrigan & Bachrach, Portland, OR, E. Andrew Jordan, Jr., John H. Chambers, Tarlow Jordan & Schrader, Portland, OR, for defendant.
OPINION AND ORDER
ROBERT E. JONES, District Judge.
On June 5, 1998, Chart Development Corporation brought suit in Washington County Circuit Court with claims of nuisance, unjust enrichment, intentional interference with economic relations, negligence, and substantive due process under the Fourteenth Amendment and 42 U.S.C. § 1988. On June 24, defendant West Slope Water District formally accepted service and on July 22, defendant filed for removal to this court.
Plaintiff now seeks an order to remand this case to state court because defendant failed to file notice of removal within the required 30-day period. The key dispute is whether the removal period is tolled from the date the complaint is received ("receipt rule") or the date service is completed ("service rule"). Pursuant to the receipt rule, which this court previously has adopted, defendant did not file for removal within the 30-day period and therefore plaintiff's motion for *1170 remand is GRANTED. In addition, plaintiff's request for costs and attorney fees incurred as a result of defendant's removal request is DENIED.
FACTS
Both parties agree on the facts germane to this motion. On June 5, 1998, plaintiff filed this lawsuit in Washington County Circuit Court. On June 12, plaintiff sent the complaint and an acceptance of service form to defendant's counsel. On June 24, defendant signed the acceptance of service form and on July 22, defendant filed notice of removal.
ANALYSIS
1. Motion to Remand
Removal jurisdiction is derived from 28 U.S.C. § 1446(b), which is construed strictly against removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992).
The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based ***.
28 U.S.C. § 1446(b). The time limit contained in § 1446(b), though not jurisdictional, is mandatory. Fristoe v. Reynolds Metals Co., 615 F.2d 1209, 1212 (9th Cir.1980). The defendant bears the burden of establishing that removal is proper. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir.1996).
The statute does not clarify what begins the tolling of the 30-day period: the date when defendant receives a copy of the complaint ("receipt rule") or the date when service is completed ("service rule"). Both parties correctly indicate that district courts are split on this issue. See William W. Schwarzer, A. Wallace Tashima, & James M. Wagstaffe, Federal Civil Procedure Before Trial, § 2:899 (Rutter Group, 1998). The District of Oregon, however, has held that the receipt rule applies. In Younce v. Bolbenbeck, Judge Marsh stated, "contrary to the district court cases relied upon by defendant, every circuit court to address this issue has held that the thirty-day removal period begins to run when a defendant actually receives a copy of a filed initial pleading by any means." Civil No. CV97-1379-MA (citations omitted). Accordingly, Judge Marsh held that "the relevant issue is when defendant received a copy of the complaint not whether it was properly served." Id. Moreover, this court has adopted the receipt rule. Ray's Food Service v. Dallas Systems Corp., Civil No. 96-1688-JO (Jones, Judge) (following Judge Haggerty's decision that the correct interpretation of the removal statute in this district is the receipt rule, Kudron v. Tektronix, Inc., Civil No. CV94-1320-AS, 1995 U.S. Dist. LEXIS 12863 (D.Or. April 20, 1995)).
In this case, plaintiff filed the complaint on June 5, 1998, and sent the complaint and an acceptance of service form to defendant's counsel on June 12. Defendant filed notice of removal on July 22. In opposing plaintiff's motion to remand, defendant agreed that "defendant and defendant's counsel received a copy of the Complaint more than 30 days prior to filing its Notice of Removal." Pursuant to the receipt rule, the notice of removal was not filed within the statutory limit of 30 days; therefore, plaintiff's motion for an order remanding this case to state court is GRANTED.
2. Motion for Costs and Attorney Fees
"An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." 28 U.S.C. § 1447(c). A showing of bad faith is not necessary for an award of costs and fees under this statute. Moore v. Permanente Medical Group, Inc., 981 F.2d 443, 446 (9th Cir.1992). Nonetheless, this statute provides the court with wide discretion. Id. at 447.
Both parties correctly recognize that district courts are split in applying the receipt rule or the service rule. Moreover, the parties do not have a published opinion in this district upon which they can rely. These factors, combined with the fact that defendant's removal would have been proper under the service rule, weigh in favor of not granting costs or attorney fees. Accordingly, *1171 plaintiff's motion for award of costs and attorney fees is DENIED.
CONCLUSION
This case is REMANDED to state court pursuant to plaintiff's motion(5) for remand. Plaintiff's motion for costs and attorney fees is DENIED.
JUDGMENT
Based upon the record,
IT IS ORDERED AND ADJUDGED this case is remanded to state court for further proceedings and this case is dismissed. Any pending motions are denied as moot.
| {
"pile_set_name": "FreeLaw"
} |
273 F.Supp. 840 (1967)
Sisrow BRINSON, Petitioner,
v.
STATE OF FLORIDA, COUNTY OF DADE, and E. Wilson Purdy, Sheriff of Dade County, Respondents.
Civ. No. 67-807.
United States District Court S. D. Florida.
September 20, 1967.
*841 Henry A. Edgar, Jr., Miami, Fla., for petitioner.
Roy Wood, Asst. State Atty., Miami, Fla., for respondents.
OPINION SUPPLEMENTING ORDER
MEHRTENS, District Judge.
Sisrow Brinson filed a petition for writ of habeas corpus with this Court seeking release from his confinement in the Dade County Jail, Miami, Florida.
The petitioner attacks sentences imposed by the Metropolitan Court of Dade County, Florida. After pleas of not guilty, the petitioner was convicted of seven traffic offenses, as follows:
1. Careless driving, Code of Metropolitan Dade County, Florida, § 30-17(a). (Hereinafter, "Code")
2. Leaving the scene of an accident involving personal injuries, Code § 30-154(1).
3. Careless driving, Code § 30-17(a).
4. Leaving the scene of an accident involving personal injuries, Code § 30-154(1).
5. Careless driving, Code § 30-17(a).
*842 6. Leaving the scene of an accident involving personal injuries, Code § 30-154(1).
7. Driving while under the influence of intoxicating liquor, Code § 30-15(b) or (c).
The Code provides penalties for the above-named offenses, as follows:
1. Careless driving: fine not to exceed three hundred dollars or imprisonment in the county jail not to exceed sixty days, or both. Code § 30-17(b).
2. Driving while under the influence of intoxicating liquor: for the first conviction, imprisonment for not less than forty-eight hours nor more than sixty days or by fine of not less than one hundred dollars nor more than five hundred dollars, or both; for the second conviction hereunder within three years of the first, imprisonment of not less than ten days nor more than six months, and, in the court's discretion, a fine of not more than five hundred dollars; and for the third conviction within five years of the first conviction, imprisonment of not less than thirty days nor more than twelve months, and, in the court's discretion, a fine of not more than five hundred dollars.
In addition, if violation of this section results in personal injuries, the minimum fine rises to two hundred fifty dollars, and the minimum imprisonment rises to ten days. This provision of necessity applies to the first offense. Code §§ 30-15(b) and (c).
3. Leaving the scene of an accident involving personal injuries: for the first conviction, imprisonment for not more than sixty days or by fine of not more than five hundred dollars, or both. On a second or any subsequent conviction, imprisonment of not more than one year or by a fine of not more than one thousand dollars, or by both.
The petitioner received sentences upon his convictions below the maximum allowable penalties. For each of the careless driving convictions, he was sentenced to pay a fine of $50.00 or serve five days in the county jail. For each of the convictions for leaving the scene of an accident where personal injuries are involved, he was sentenced to a term of 20 days in the county jail and a fine of $200.00, and in default of payment, an additional term of 20 days. A sentence of 10 days in jail and a fine of $250.00 or an additional term of 25 days was levied on Brinson for driving under the influence of intoxicating liquor. Thus, petitioner was to serve a minimum jail term of 70 days, plus a total of 100 more days if he failed to pay the fines. He began serving his time on April 17, 1967, and, having failed to pay any of the fines, he remained there until this Court ordered his release on September 7, 1967.
On May 24, 1967, petitioner first sought habeas corpus relief in the United States District Court. In his petition Brinson attacked the validity of his sentence on the ground that he was denied the right to appointed counsel at his trial, in violation of the United States Constitution. On June 15, 1967, that petition was denied because the petitioner had failed to exhaust state remedies.
In his second petition, Brinson alleges that he has exhausted his state remedies since the denial of the first federal habeas corpus petition and reasserts that he was denied a constitutional right to appointed counsel. The threshold question is whether state remedies have been exhausted. Petitioner has undisputedly attempted to obtain a state determination regarding his right to counsel. His ultimate effort, a petition for writ of habeas corpus to the Supreme Court of Florida, was denied July 17, 1967. The respondent does not dispute that petitioner's efforts constitute a sufficient exhaustion of state remedies. This Court finds that the comity requirement imposed by Title 28 U.S.C. § 2254 has been satisfied. See McGarrah v. *843 Dutton, 381 F.2d 161 (5th Cir. July 26, 1967); McDonald v. Moore, 353 F.2d 106 (5th Cir. 1965).
Petitioner was not advised of a right to counsel at any time during the state prosecution or that an attorney would be appointed to represent him if he could not afford one. The Supreme Court of the United States has determined that indigent defendants in state criminal prosecutions have the right to appointed counsel, unless that right is competently and intelligently waived. Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963). However, that court has not decided whether the Constitution requires the assistance of counsel in a prosecution upon a misdemeanor charge or upon traffic offenses. See, DeJospeh v. Connecticut, 385 U.S. 982, 87 S.Ct. 526, 17 L.Ed.2d 443 (1966); Winters v. Beck, 385 U.S. 907, 87 S.Ct. 207, 17 L.Ed.2d 137 (1966).
The Florida Supreme Court has held that an accused is not entitled as a matter of right to state appointed counsel in misdemeanor cases. Watkins v. Morris, 179 So.2d 348 (Fla.1965); Fish v. State of Florida, 159 So.2d 866 (Fla.1964).
It is my opinion that the right to assistance of counsel applies to state court prosecutions for serious offenses, whether they be labeled felonies or misdemeanors. The concept of due process embodied in the Fourteenth Amendment requires counsel for all persons charged with serious crimes. See, opinion of Reed, J., in Uveges v. Commonwealth of Pennsylvania, 335 U.S. 437, 69 S.Ct. 184, 93 L.Ed. 127 (1948). The right to assistance of counsel is determined by the seriousness of the offense, measured by the gravity of the penalty to which the defendant is exposed on any given violation. Such a rule, in my opinion, fully complies with common and fundamental ideas of fairness and constitutional requirements.
In the present case, the petitioner's conviction upon the second offense of leaving the scene of an accident involving personal injuries exposed him to a maximum sentence of imprisonment for one year. The third conviction of the same offense exposed him to the possibility of confinement for an additional year. When a defendant is exposed to possible imprisonment for one year, he is charged with a serious offense. Accordingly, I hold that petitioner was entitled to assistance of counsel in the Metropolitan Court to defend against the two charges aforementioned. The fact that the offense charged was a violation of the Metropolitan Dade County Code, and not termed a felony, is of no consequence. A man who is charged with an offense for which he can spend a year in jail is entitled to assistance of counsel regardless of whether the offense be labeled a felony or a misdemeanor.
Since Gideon v. Wainwright overruled the "special circumstances" test of Betts v. Brady, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595 (1942), regarding right to counsel, the Supreme Court has not explicitly recognized that the existance of the right depends on the seriousness of the penalty in misdemeanor and traffic cases. The concept, however, was utilized by the Supreme Court in the case of In re Gault, 387 U.S. 1, 87 S.Ct. 1428, 18 L.Ed.2d 527 (1967). The case involved a juvenile delinquency proceeding in which Gault was determined to be a "delinquent," with the consequence that he was committed to a state institution. [387 U.S. at 7, 87 S.Ct. 1428] Gault claimed denial of right to counsel in a habeas corpus petition. The Supreme Court held that due process required that Gault receive assistance of counsel because "the issue * * * whether the child [would] be found to be `delinquent' and subjected to the loss of his liberty for years [was] comparable in seriousness to a felony prosecution." [Emphasis added] 387 U.S. at 36, 87 S.Ct. at 1448. The "serious offense" rule, in other words, has been expressly used by the Supreme Court to determine the right to counsel.
In Gault, the court cited the recommendations of the President's Crime Commission that counsel in juvenile cases was necessary to orderly justice. That *844 same Commission, whose members include some of America's most distinguished legal scholars and practitioners, has also studied the problem of right to counsel in misdemeanor and traffic cases. Their recommendation is explicit: "as quickly as possible, * * * counsel [should be provided] to every criminal defendant who faces a significant penalty, if he cannot afford to provide counsel for himself." [Emphasis added] The Challenge of Crime in a Free Society: A report by the President's Commission on law enforcement and administration of justice, page 150 (U.S. Government Printing Office, Washington: 1967). The meaning of the recommendation clearly is that all persons charged with a crime, measured by the magnitude of the penalty, should be entitled to counsel. On the other hand, the Commission recommends that "petty charges" should be excluded from coverage. Id. at viii. In federal practice, the distinction between petty offenses and all other crimes, as applied to right to counsel, is well established. The federal standard is found in the Criminal Justice Act of 1964, 78 Stat. 552 (1964), as amended, 18 U.S.C. § 3006A (1964). The 1964 Act divides public offenses into three categories: (1) felonies, (2) misdemeanors, and (3) petty offenses. The Act provides for the appointment of counsel in all cases other than petty offenses. A petty offense is defined as "[a]ny misdemeanor, the penalty for which does not exceed imprisonment for a period of six months or a fine of not more than $500, or both * * *." Title 18 U.S.C. § 1 (1958). Not only are funds not provided for court-appointed attorneys, but no duty is placed upon the United States Commissioner or the court to advise the defendant that he has the right to be represented by counsel. A substantially similar practice would obtain under the proposed Federal Magistrates Act, now under consideration by Congress. Persons charged with crimes other than petty offenses are entitled to assistance of counsel, and in the discretion of the Commissioner, counsel could possibly be appointed for petty offenses. See, Hearings before the Subcommittee on Improvements in Judicial Machinery of the Committee on the Judiciary, United States Senate, page 357, note 183 (U.S. Government Printing Office, Washington: 1967). As applicable to the right to counsel, then, the distinction between petty offenses and other misdemeanors is clearly recognized.
The Fifth Circuit Court of Appeals, however, has held that the constitutional right to counsel extends to even a petty offense. In Harvey v. State of Mississippi, 340 F.2d 263 (5th Cir. 1965), defendant was charged with possession of whiskey. On his plea of guilty, which was taken in a rather non-judicial proceeding one night at the home of a Justice of the Peace, Harvey received the maximum sentence of 90 days and $500. In reversing the conviction, the court said that although the right to counsel had not been expressly extended to misdemeanor charges in state tribunals, nevertheless the failure of notice to Harvey of his right to the assistance of counsel invalidated the guilty plea and his detention thereunder was unconstitutional. The court cited Evans v. Rives, 75 U.S. App.D.C. 242, 126 F.2d 633 (1942), which held that a one-year sentence on a federal charge was invalid because the defendant was not properly advised of his right to assistance of counsel. The court in Evans rejected the contention that Sixth Amendment rights apply only to "serious offenses." It is important to note that Evans concerned a purely federal matter. Thus, Evans would not be authority for rejection of a "serious offense" rule regarding right to counsel in non-felony state cases. As to the merits of the "serious offense" rule, the rejection by Gideon of the Betts v. Brady rule, which required "special circumstances" to merit assistance of counsel in non-capital felonies, does not revitalize Evans when non-felony state charges are involved.
In Betts v. Brady, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595 (1942), the Supreme Court held that the appointment of counsel at state trials for noncapital *845 crimes was necessary under Fourteenth Amendment due process only if the failure to appoint counsel "tested by an appraisal of the totality of the facts in a given case [results in a trial which lacks] fundamental fairness shocking to the universal sense of justice." Id. at 462, 62 S.Ct. at 1256.
The Supreme Court, in Gideon v. Wainwright, has explicitly receded from the view that right to counsel depends upon the particular circumstances of any case. The facts of the Gideon case, however, as noted by Mr. Justice Harlan, 372 U.S. at 351, 83 S.Ct. 792, 9 L.Ed.2d 799, did not require determination of whether the rule should extend to all criminal cases. Therefore, it is doubtful whether Evans v. Rives compelled the Fifth Circuit in Harvey to hold that a "serious offense" distinction could not be applied after Gideon to state charges not denominated felonies. Harvey may be limited because of the particularly flagrant circumstances involved in the case. A literal reading of the opinion, however, would indicate that the possibility of even a ninety-day jail sentence is a sufficient deprivation of liberty to run afoul of due process unless defendant is given assistance of counsel.
In a very similar case involving a Florida misdemeanor charge, McDonald v. Moore, 353 F.2d 106 (5th Cir. 1965), Judge Jones speaking for the court stated that "this Court has, we think, rejected the `serious offense' rule. We also think that Gideon has repudiated the Betts v. Brady ad hoc special circumstances rule * * *." Id. at 110. Being of the opinion that Harvey controlled the decision due to the similarity of the facts, the McDonald case was decided purely on the basis of stare decisis. The court, however, did not have the benefit of the Supreme Court's decision in the Gault case. It is now evident from Gault that the seriousness of the offense charged has direct bearing on the constitutional right to counsel.
Accordingly, this Court holds that the constitutional right to counsel in non-felony cases depends upon the maximum possible penalty under the offense charged, this being the test whether or not a "serious offense" is involved. In order that rights of constitutional stature be uniformly applied, I hold that the minimum offense for which counsel must be provided is one which carries a possible penalty of more than six months imprisonment, which is the line of demarcation drawn in federal practice. In this case, Brinson's second and third conviction of leaving the scene of an accident involving personal injuries must be invalidated since the court failed to notify the defendant of his right to the assistance of counsel.
This Court has not overlooked the contention that if the right to counsel is extended beyond the holding of Gideon to any misdemeanor, that a fortiori the right must be extended to all misdemeanors. The right to counsel should not be treated as an abstract theorem, but rather as a means for achieving the most perfect justice possible in a given situation. The essence of the right is to protect those charged with crimes from wrongful conviction. However, that right is qualified by practical exigencies.
If Gideon is extended to all misdemeanors, its effect would be profound and create a tremendous economic and administrative burden since only a small minority of states now require appointment of counsel for indigents in misdemeanor cases. The demands upon the bench and bar would be staggering and well-nigh impossible. Such a construction could lead to the appointment of counsel for misdemeanors not normally considered criminal, such as overparking and other petty traffic offenses, jaywalking, dropping trash upon the sidewalk, and like offenses. Further, to hold that the right to court-appointed counsel exists in all misdemeanor cases would in effect also be to hold that the portion of the Criminal Justice Act relating to petty offenses is unconstitutional, since surely the federal courts must be held to the same standards they impose upon the state courts under the Sixth and Fourteenth Amendments.
*846 As state actions are concerned, crimes are generally classified only as felonies or as misdemeanors. A definitional problem exists from one state to another state in the labeling of the same offense. What is termed a felony in one state is called a misdemeanor in another. Thus, in some states such as Florida (798.01 F.S.A.) and Arizona, adultery is classed as a felony, but as a misdemeanor in other states such as Kansas. In the instant case the identical charge of leaving the scene of an accident involving personal injuries is classed as a misdemeanor under the Metro Code and as a felony under the Florida Statutes. 317.071 F.S.A.; Watkins v. Morris, 179 So.2d 348 (Fla.1965). Further illustrating the problem created by an arbitrary felony-misdemeanor classification is that even though a crime be classed as a felony or as a misdemeanor in all states, the possible punishment varies greatly from state to state. Now Jersey designates most crimes as misdemeanors or high misdemeanors, for example, kidnapping punishable by life imprisonment; forcible rape punishable by 30 years imprisonment; robbery punishable by 15 years imprisonment, are all called high misdemeanors. In Delaware there are in excess of 35 statutory misdemeanors punishable by more than one year's imprisonment. Thus, narcotic violations are classified as misdemeanors but are punishable by 10 years imprisonment. In Massachusetts the statutes have been changed at least four times changing crimes from felonies to misdemeanors for purely administrative reasons. Michigan in 1947 designated negligent homicide, until then a felony, a misdemeanor punishable by two years imprisonment and/or $2,000 fine. Under modern legislation many so-called misdemeanors are more dangerous to life and limb than some felonies. Compare felonies such as distilling alcohol in violation of revenue laws with misdemeanors such as reckless driving, leaving the scene of an accident involving personal injuries and driving under the influence of drugs or intoxicating liquor. It therefore appears that the state's characterization of its criminal offenses cannot serve as a valid cut-off point when the right to assigned counsel under the Fourteenth Amendment is equated with the same right under the Sixth Amendment. The line must be drawn somewhere, and taking into consideration procedures that are fair and feasible in the light of present capabilities, I am of the opinion that the "serious offense" or "significant penalty" category is where the line should and must be drawn.
The right to counsel guaranteed by the Sixth and Fourteenth Amendments is not an absolute right, nor are any of the rights guaranteed by the Constitution "absolute." See, Creighton v. State of North Carolina, 257 F.Supp. 806 (E.D.N.C.1966). As stated in that case, the Constitution was not written to provide an exercise in abstract idealism but as a practical guide for the management of the affairs of this country and the protection of the rights of its citizens. In today's complex society there can be no truly "absolute" rights. Thus, the right to free exercise of the religion of one's choice is on its face absolute, but in application is limited since a religion requiring illegal activities would not be constitutionally protected. One cannot refuse to pay taxes because of religious scruples, nor can one engage in polygamy or any other practice directly harmful to the safety, morals, health or general welfare. West Va. State Board of Education v. Barnette, 319 U.S. 624, 63 S.Ct. 1178, 87 L.Ed. 1628 (1942); Late Corporation of the Church of Jesus Christ of Latter Day Saints v. United States, 136 U.S. 1, 10 S.Ct. 792, 34 L. Ed. 478 (1889); Reynolds v. United States, 98 U.S. 145, 25 L.Ed. 244 (1878). The "absolute right" to free speech has been qualified and curtailed by libel and slander laws. Such right, on occasion, must be subordinated to other values and considerations. Dennis v. United States, 341 U.S. 494, 71 S.Ct. 857, 95 L.Ed. 1137 (1950). It does not confer the right to persuade others to violate the law. Bullock v. United States, 265 F.2d 683 (6th *847 Cir. 1959); cert. den., 360 U.S. 909, 79 S.Ct. 1294, 3 L.Ed. 1260. Neither does such right preclude Congress from excluding obscene matter from the mails or from punishing persons advocating overthrow of the government by force. United States v. Bryan, 83 U.S.App.D.C. 127, 167 F.2d 241; cert. den. 334 U.S. 843, 68 S.Ct. 1511, 92 L.Ed. 1767. Likewise, the "absolute right" to counsel in all criminal prosecutions must be qualified by practical exigencies and, unless this is done, the necessities of sound judicial administration would be disregarded and the administration of justice thrown into senseless chaos.
Even should this Court be in error in basing its holding upon the seriousness of several of the offenses charged, nevertheless the petition for writ of habeas corpus must be granted based on the similarity of the facts herein with those in Harvey and McDonald. Until these cases are modified by the Fifth Circuit Court of Appeals, they stand as binding authority.
In addition to raising the question of unconstitutional denial of counsel, the petitioner also contends that federal relief should be granted on the grounds that: (1) he was tried and committed without the services of a public defender, such services being required under the Public Defender Section of the Metropolitan Code of Dade County; and (2) his confinement upon failure to pay the $1,000 in fines constituted cruel or unusual punishment and subjected him to involuntary servitude.
Since this Court is of the opinion that the petitioner is entitled to release due to an unconstitutional denial of counsel, it is unnecessary to consider the several other grounds alleged.
For the foregoing reasons, this Court entered its order of September 7, 1967, directing that the petitioner be released and vacating the second and third convictions for leaving the scene of an accident involving personal injuries.
| {
"pile_set_name": "FreeLaw"
} |
Case: 12-13213 Date Filed: 04/30/2013 Page: 1 of 11
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-13213
Non-Argument Calendar
________________________
D.C. Docket No. 4:11-cr-00245-WTM-GRS-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
SUSANNE BUNTON,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Georgia
________________________
(April 30, 2013)
Before TJOFLAT, MARCUS and PRYOR, Circuit Judges.
PER CURIAM:
Susanne Bunton (“Susanne”) appeals her 21-month sentence for bank fraud.
Susanne, along with her husband and codefendant, Lamont Timothy Bunton
Case: 12-13213 Date Filed: 04/30/2013 Page: 2 of 11
(“Timothy”), withdrew $44,900 from the bank accounts of an 82-year-old widow
over a period of months by forging the victim’s signature on checks, moving
money from her money market account to another of her accounts, and using her
debit card and password to withdraw money and purchase items at various stores.
The defendants had gained the victim’s trust by helping her with errands and
appointments, and although the victim offered to pay them for their services, they
refused and said they were helping her because they loved her. The defendants
concealed their theft by replacing the victim’s actual bank statements with
forgeries, and created a fraudulent contract, purportedly between themselves and
the victim, alleging that she had lent them large sums of money and they had
begun to repay her. The defendants also created fraudulent receipts, purportedly
with the victim’s signature, showing repayment. When interviewed by law
enforcement, Susanne responded with the fraudulent contract and receipts.
On appeal, Susanne argues that: (1) the district court made insufficient
findings to consider Timothy’s actions and the loss resulting from his actions as
relevant conduct under U.S.S.G. § 1B1.3, for purposes of sentencing her; (2) she
should have received credit for the value of the services rendered to the victim for
purposes of calculating the loss amount; (3) the district court clearly erred in
applying enhancements for sophisticated means and obstruction of justice,
2
Case: 12-13213 Date Filed: 04/30/2013 Page: 3 of 11
U.S.S.G. §§ 2B1.1(b)(10)(C) and 3C1.1, respectively; and (4) her 21-month prison
sentence was substantively unreasonable. After thorough review, we affirm.
We review the district court’s findings of fact and loss calculations for clear
error, and the district court’s application of U.S.S.G. § 1B1.3 de novo. United
States v. Barrington, 648 F.3d 1178, 1197 (11th Cir. 2011), cert. denied, 132 S.Ct.
1066 (2012); United States v. McCrimmon, 362 F.3d 725, 728 (11th Cir. 2004).
Review for clear error is deferential, and we will not disturb the district court’s
finding unless left with a definite and firm conviction that a mistake was made.
United States v. Ghertler, 605 F.3d 1256, 1267 (11th Cir. 2010). We review for
clear error the district court’s finding that the defendant used sophisticated means,
id., as well as the district court’s application of a two level obstruction-of-justice
enhancement where the application required the district court to make a
particularized assessment of the defendant’s credibility or demeanor. United States
v. Banks, 347 F.3d 1266, 1269 (11th Cir. 2003). Where the defendant’s credibility
or demeanor is not at issue, however, and the defendant’s conduct is clearly set
forth in detailed, non-conclusory findings, we review de novo the district court’s
application of the enhancement to those facts. Id. Finally, we review the sentence
a district court imposes for “reasonableness,” which “merely asks whether the trial
court abused its discretion.” United States v. Pugh, 515 F.3d 1179, 1189 (11th Cir.
2008) (quoting Rita v. United States, 551 U.S. 338, 351 (2007)).
3
Case: 12-13213 Date Filed: 04/30/2013 Page: 4 of 11
First, we are unpersuaded by Susanne’s claim that the district court failed to
make specific factual findings as to when she became criminally involved, which,
she says, was at the end of the scheme. However, in a case involving jointly
undertaken criminal activity, the defendant is responsible for all reasonably
foreseeable acts of others in furtherance of the activity that occurred during the
offense’s commission, in preparation for the offense, and in the course of
attempting to avoid detection. U.S.S.G. § 1B1.3(a)(1)(B). A jointly undertaken
criminal activity is a criminal plan or scheme undertaken by the defendant together
with others, even if not charged as a conspiracy. Id. § 1B1.3, comment. (n.2). To
determine a defendant’s accountability for others in a criminal scheme, the district
court first determines the scope of the criminal activity that the defendant agreed to
undertake. Id.; see also United States v. Hunter, 323 F.3d 1314, 1319-22 (11th Cir.
2003) (vacating and remanding where district court made findings regarding
reasonable foreseeability without first determining scope of criminal activity that
defendants jointly agreed to undertake). Whether the defendant assisted in
designing and executing the scheme is a relevant factor in determining if an
activity is jointly undertaken. Hunter, 323 F.3d at 1321. The district court may
consider any implicit agreement fairly inferred from the conduct of the defendant
and others in determining the scope of the criminal activity that the defendant
agreed jointly to undertake. U.S.S.G. § 1B1.3, comment. (n.2). Therefore, a
4
Case: 12-13213 Date Filed: 04/30/2013 Page: 5 of 11
defendant may be held accountable for losses resulting from the reasonably
foreseeable acts of other participants. Hunter, 323 F.3d at 1319 (conspiracy
context). Nevertheless, a defendant’s relevant conduct does not include conduct of
members of a conspiracy prior to the defendant’s joining of the conspiracy, even if
the defendant knows of that conduct. U.S.S.G. § 1B1.3, comment. (n.2).
To the extent Susanne argues that the district court clearly erred in
determining that she was involved from the outset of the scheme, that argument is
unpersuasive. In addition to the bank fraud to which she pled guilty and to
pawning the victim’s ring, Susanne helped Timothy execute the scheme by (1)
helping to draft the contract that the victim signed and was later fraudulently
altered and (2) signing the fraudulent receipts. See Hunter, 323 F.3d at 1321.
Together, Susanne and Timothy gained the victim’s trust by helping her with her
errands and appointments -- which was crucial, since it allowed the defendants
access to the victim’s personal and financial information, and to later exploit that
trust. Indeed, Timothy stated during his plea colloquy that Susanne knew of all of
his illicit acts. From these facts, the district court could reasonably have inferred
that, from the outset, Timothy and Susanne jointly undertook a scheme to defraud
the victim. See id. This remains true despite Timothy’s testimony that he himself
took the victim’s debit card, deposited the checks, and withdrew the money. See
U.S.S.G. § 1B1.3(a)(1)(B) & comment. (n.2).
5
Case: 12-13213 Date Filed: 04/30/2013 Page: 6 of 11
To the extent that Susanne argues that the district court failed to make any
particularized findings as to the point at which Susanne became involved in the
scheme, that argument is also without merit. As the record shows, the district court
heard and considered Susanne’s argument that the government had not proven the
point in time at which she joined the criminal scheme and the government’s
response. However, the district court adopted the portion of the Presentence
Investigation Report (“PSI”) Addendum in which the probation officer determined
that she had joined the scheme from the outset, as we’ve described above.
Moreover, because the criminal scheme here involved defrauding the victim, it was
reasonably foreseeable that Timothy would use the victim’s bank account
information to take money from the victim’s account. See Hunter, 323 F.3d at
1319. Accordingly, the district court did not err in holding Susanne accountable
for the total losses resulting from Timothy’s acts -- as well as those from Susanne’s
attempt to cash a fraudulent check. See id.
We also reject Susanne’s suggestion that she should receive a credit for the
services she and Timothy rendered to the victim for purposes of calculating the
total loss amount. In her brief, Susanne mentioned this argument in her section
addressing relevant conduct broadly by copying and pasting a lengthy quotation
from the PSI Addendum, and, in conclusory fashion, she said that the district court
did not adequately address the issues mentioned in the quotation. Because Susanne
6
Case: 12-13213 Date Filed: 04/30/2013 Page: 7 of 11
did not plainly and unambiguously demarcate this issue, she has abandoned it on
appeal. See United States v. Jernigan, 341 F.3d 1273, 1283 n.8 (11th Cir. 2003).
Next, we find no merit to Susanne’s argument that the district court erred in
applying a sophisticated means enhancement because the scheme involved only
depositing checks into an account that the victim did not use, typing up a two-page
document that only somewhat resembled a bank statement, and moving money
from one account to another, and none of those acts was particularly complex. The
Sentencing Guidelines provide for a two-level enhancement if the offense involved
“sophisticated means.” U.S.S.G. § 2B1.1(b)(10)(C). The commentary defines
“sophisticated means” as “especially complex or especially intricate offense
conduct” that pertains to executing or concealing the offense. Id. § 2B1.1,
comment. (n.8(B)). Each of a defendant’s individual actions need not be
sophisticated to impose the § 2B1.1(b)(10)(C) enhancement, provided that the
totality of the scheme was sophisticated. Ghertler, 605 F.3d at 1267.
As the record shows, Timothy and Susanne worked together to gain the
victim’s trust and then took concerted steps to avoid detection, which involved
creating fraudulent bank statements and a fraudulent contract, among other things.
See U.S.S.G. § 2B1.1, comment. (n.8(B)). Under the circumstances, the district
court did not clearly err in concluding that the totality of Timothy’s and Susanne’s
scheme was sophisticated. Ghertler, 605 F.3d at 1267.
7
Case: 12-13213 Date Filed: 04/30/2013 Page: 8 of 11
Nor do we find merit to Susanne’s argument that the district court erred in
applying an obstruction-of-justice enhancement because the term “official
investigation,” as used in the Guidelines commentary, should exclude interviews
like hers, which occurred pre-indictment and were non-custodial, and because her
act of presenting investigators with the fraudulent contract and receipts did not
actually obstruct the investigation. The Guidelines provide for a two-level
enhancement if “the defendant willfully obstructed or impeded, or attempted to
instruct or impede, the administration of justice with respect to the investigation . .
. of the . . . offense of conviction” and if the conduct related to “the defendant’s
offense of conviction and any relevant conduct” or to “a closely related offense.”
U.S.S.G. § 3C1.1. The enhancement may apply if the obstructive conduct related
to the case of a codefendant. Id., comment. (n.1). The relevant commentary sets
out “a non-exhaustive list of examples” to which the enhancement applies,
including where a defendant “produc[es] or attempt[s] to produce a false, altered,
or counterfeit document or record during an official investigation or judicial
proceeding.” Id., comment. (n.4(C)). The commentary also sets out a non-
exhaustive list of examples of conduct that ordinarily does not warrant an
enhancement, including giving a false name or identification document at arrest --
except where giving the false information actually results in a significant hindrance
to the investigation. See id., comment. (n.5(A)).
8
Case: 12-13213 Date Filed: 04/30/2013 Page: 9 of 11
Here, Susanne has cited no authority to support her contention that § 3C1.1
should not apply in a pre-indictment, non-custodial setting. Moreover, by its own
terms, § 3C1.1 applies to attempted obstruction, not only to actual obstruction. See
U.S.S.G. § 3C1.1. Accordingly, the district court did not err in applying an
obstruction of justice enhancement.
Finally, we disagree with Susanne that her sentence was substantively
unreasonable. Our review of sentences for substantive reasonableness is based on
the “‘totality of the circumstances.’” Pugh, 515 F.3d at 1190 (quoting Gall, 552
U.S. at 51). This review is “deferential,” requiring us to determine “whether the
sentence imposed by the district court fails to achieve the purposes of sentencing as
stated in section 3553(a).” United States v. Talley, 431 F.3d 784, 788 (11th Cir.
2005). We will “vacate the sentence if, but only if, we are left with the definite
and firm conviction that the district court committed a clear error of judgment in
weighing the § 3553(a) factors by arriving at a sentence that lies outside the range
of reasonable sentences dictated by the facts of the case.” United States v. Irey,
612 F.3d 1160, 1190 (11th Cir. 2010) (en banc) (quotation omitted), cert. denied,
131 S. Ct. 1813 (2011). While a district court must consider all the factors listed in
§ 3553 and explain the sentence imposed, the court need not discuss each factor
explicitly. United States v. Gonzalez, 550 F.3d 1319, 1324 (11th Cir. 2008).
9
Case: 12-13213 Date Filed: 04/30/2013 Page: 10 of 11
The party challenging the sentence bears the burden to show it is
unreasonable. United States v. Tome, 611 F.3d 1371, 1378 (11th Cir.), cert.
denied, 131 S.Ct. 674 (2010). While we do not automatically presume a sentence
falling within the guideline range to be reasonable, we ordinarily expect that
sentence to be reasonable. Talley, 431 F.3d at 788. A sentence imposed well
below the statutory maximum penalty is another indicator of a reasonable sentence.
See Gonzalez, 550 F.3d at 1324.
Here, Susanne has not shown that her 21-month sentence was unreasonable.
For starters, her sentence was the lowest sentence in her guideline range and was
well below the statutory maximum of 30 years. See Talley, 431 F.3d at 788;
Gonzalez, 550 F.3d at 1324. Further, the district court listened to Susanne’s
argument regarding the § 3553(a) factors, including argument concerning her
minimal criminal history and background, and said that it had listened to Susanne
directly and through counsel, reviewed the PSI and PSI Addendum, and reviewed
Susanne’s sentencing memorandum. The court also said that it had considered the
§ 3553(a) factors, which is more than sufficient. See Gonzalez, 550 F.3d at 1324.
Moreover, simply because the district court considered and disagreed with
Susanne’s position about the problem of sentence disparities does not show the
district court did not sufficiently consider that factor or that her sentence is
unreasonable. See Tome, 611 F.3d at 1378; Gonzalez, 550 F.3d at 1324. Under
10
Case: 12-13213 Date Filed: 04/30/2013 Page: 11 of 11
these circumstances, Susanne has not shown that her sentence of 21 months’
imprisonment was unreasonable. See Tome, 611 F.3d at 1378.
AFFIRMED.
11
| {
"pile_set_name": "FreeLaw"
} |
108 F.3d 86
37 Fed.R.Serv.3d 184
Alan WEINER, D.P.M., Plaintiff-Appellant,v.KLAIS AND COMPANY, INC., Defendant-Appellee.
No. 96-3135.
United States Court of Appeals,Sixth Circuit.
Argued and Submitted Feb. 6, 1997.Decided Feb. 26, 1997.
Paul W. Flowers (briefed), Gary B. Garson Company, Cleveland, OH, for Plaintiff-Appellant.
John C. Weisensell (argued and briefed), Amer, Cunningham & Brennan, Akron, OH, for Defendant-Appellee.
Before: KENNEDY, NELSON, and VAN GRAAFEILAND*, Circuit Judges.
KENNEDY, Circuit Judge.
1
Plaintiff appeals the District Court's dismissal of his complaint alleging violations of the Employee Retirement Income Security Act (ERISA) of 1974, 29 U.S.C. §§ 1001-1461. The District Court found that defendant was not a proper party to the lawsuit. We AFFIRM the dismissal, although on different grounds than the District Court.
I. Facts
2
Plaintiff, Dr. Alan Weiner, is a podiatrist who rendered medical services to six participants and/or beneficiaries of five different group health plans sponsored by their respective employers: Malco Products, Inc. Health Benefit Plan, Akron Porcelain and Plastics Company Health Benefit Plan, Portage County Health Benefit Plan, Fairlawn Country Club Health Benefit Plan, and City of Barberton Health Benefit Plan. According to the plan documents, each of the plans is self-funded and administered directly by a Plan Administrator, who is an official of the respective employer. Defendant Klais and Company, Inc. is the Claims Administrator for all of the plans.
3
The plan participants assigned their rights to benefits under their respective plans to plaintiff. Plaintiff submitted to defendant claims for payments relating to the services rendered. Defendant denied the claims, either partially or completely. On August 10, 1995, plaintiff filed a complaint against defendant only. In Count I, plaintiff asserts that defendant denied benefits in violation of the terms of "the Plan".1 As relief, plaintiff seeks both to recover benefits pursuant to 29 U.S.C. § 1132(a)(1)(B) and to have a permanent injunction issued against defendant pursuant to 29 U.S.C. § 1132(a)(3). In Count II, plaintiff alleges that defendant breached its fiduciary duties and that plaintiff is entitled under 29 U.S.C. § 1109 to recover the benefits due under the plan and "to such other equitable or remedial relief deemed appropriate." In Count III, plaintiff claims that defendant has been unjustly enriched to the detriment of plaintiff and seeks payment for the rendered medical services. Finally, in a fourth count, plaintiff seeks a declaration that he is entitled to the benefits claimed under the plans. Plaintiff appears to concede that he never invoked the appeals procedures provided under any of the applicable plans, but he claims that such action would have been futile. Plaintiff asserts that the unpaid benefits amount to approximately $97,000.00.
4
After filing its Answer, defendant filed in a single document a Motion to Dismiss, a Motion for Judgment on the Pleadings, and a Motion for Summary Judgment. Attached as exhibits to defendant's motion were copies of the relevant plan documents and summary plan descriptions (SPDs), as well as the services agreements between defendant and each employer/plan sponsor. In a November 20, 1995 order, the District Court decided that it would not consider the motion for summary judgment before discovery had been completed and, accordingly, it denied that motion without prejudice. On November 21, 1995, plaintiff submitted a Motion for Leave to File First Amended Complaint, seeking to add each of the plans and their respective plan sponsors as defendants.
5
On December 22, 1995, defendant's Motion to Dismiss/Motion for Judgment on the Pleadings was granted. The court found that defendant was not a fiduciary, and it concluded that defendant was not a proper party to the lawsuit. The court dismissed the case without prejudice to its being refiled against the proper parties. The court also denied plaintiff's motion for leave to amend, stating that an amendment would add ten entirely new parties who had not been part of the proceedings thus far and, consequently, would be a "disaster" from a case management standpoint. This timely appeal followed.
II. Discussion
A. Standard of Review
6
We review de novo a district court's dismissal of a complaint under FED.R.CIV.P. 12(b)(6). Taxpayers United for Assessment Cuts v. Austin, 994 F.2d 291, 296 (6th Cir.1993). We must read all well-pleaded allegations of the complaint as true. Bower v. Federal Express Corp., 96 F.3d 200, 203 (6th Cir.1996). "Our review is essentially the same as the district court's; we 'take the plaintiff's factual allegations as true and if it appears beyond doubt that the plaintiff can prove no set of facts in support of its claims that would entitle it to relief, then ... dismissal is proper.' " Forest v. United States Postal Serv., 97 F.3d 137, 139 (6th Cir.1996) (quoting American Eagle Credit Corp. v. Gaskins, 920 F.2d 352, 353 (6th Cir.1990)). A complaint must contain either direct or inferential allegations with respect to all material elements necessary to sustain a recovery under some viable legal theory. Allard v. Weitzman (In re DeLorean Motor Co.), 991 F.2d 1236, 1240 (6th Cir.1993).
B. Defendant's Exhibits
7
We first address plaintiff's argument that the District Court inappropriately considered affidavits and exhibits submitted by defendant, because we must determine what materials we may properly consider in our de novo review. Matters outside of the pleadings are not to be considered by a court in ruling on a 12(b)(6) motion to dismiss. See Hammond v. Baldwin, 866 F.2d 172, 175 (6th Cir.1989). Defendant attached to its motion to dismiss the plan documents, SPDs, and Benefit Management Services Agreements.2 In denying defendant's motion for summary judgment, the court held that, in considering defendant's motion for dismissal or for judgment on the pleadings, it would consider "only those exhibits submitted by the defendant which can properly be considered incorporated by reference into the complaint and, thus, a part of the pleadings."
8
FED.R.CIV.P. 10(c) provides that "[a] copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes." Rule 10(c) is permissive, and a plaintiff is under no obligation to attach to his complaint documents upon which his action is based. See 5 CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1327, at 762 (2d ed.1990). However, a defendant may introduce certain pertinent documents if the plaintiff fails to do so. See Pension Benefit Guaranty Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993); Cortec Indus., Inc. v. Sum Holding, L.P., 949 F.2d 42, 48 (2d Cir.1991); Romani v. Shearson Lehman Hutton, 929 F.2d 875, 879 n. 3 (1st Cir.1991); see also 5 WRIGHT & MILLER, supra, § 1327, at 762-63. Otherwise, a plaintiff with a legally deficient claim could survive a motion to dismiss simply by failing to attach a dispositive document upon which it relied. See White Consol. Indus., 998 F.2d at 1196. Hence, the Seventh Circuit has held that "[d]ocuments that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim." Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1993). We believe that this approach is appropriate.
9
Plaintiff references the "plan" numerous times in his complaint. Although plaintiff maintains that the complaint referred only to the "plan" as an entity and not to the "plan documents," his claims are based on rights under the plans which are controlled by the plans' provisions as described in the plan documents. Thus, we will consider the plan documents along with the complaint, because they were incorporated through reference to the plaintiff's rights under the plans, and they are central to plaintiff's claims. We need not decide whether the SPDs should be viewed as part of the complaint since they do not differ from the plans. The services agreements, however, were not mentioned directly or indirectly in the complaint. Even if the District Court relied improperly upon the services agreements, we may affirm on any valid ground, see Russ' Kwik Car Wash, Inc. v. Marathon Petroleum Co., 772 F.2d 214, 216 (6th Cir.1985), and we will consider only the plan documents in making our determination.
C. Subject Matter Jurisdiction
10
Defendant claims that we do not have jurisdiction to hear this case with regard to claims under the Portage County Health Benefit Plan and the City of Barberton Health Benefit Plan, because these plans are "governmental plans." Federal subject matter jurisdiction is granted to cases arising under ERISA pursuant to 29 U.S.C. § 1132(e). Section 4(b) of ERISA excludes application of the Act's provisions to governmental plans. See 29 U.S.C. § 1003(b)(1). Section 3(32) defines "governmental plan" as a plan "established or maintained for its employees ... by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the forgoing." Id. at § 1002(32).
11
The plan documents disclose that the Portage County and City of Barberton plans are not governed by ERISA. According to the plan documents, Portage County established the Portage County Health Benefit Plan for its employees, and the City of Barberton established the City of Barberton Health Benefit Plan for its employees. Portage County and the City of Barberton are political subdivisions of the State within the meaning of section 3(32) of ERISA, 29 U.S.C. § 1002(32). Therefore, we do not have jurisdiction over causes of action pertaining to these plans.3
D. Settled Claims
12
Per this Court's request after oral argument, plaintiff informed us in writing that after the District Court dismissed this action, he brought separate suits against the individual plans for recovery of benefits. He tells us that he has settled all claims against the Fairlawn Country Club Health Benefit Plan and the Akron Porcelain and Plastics Company Health Benefit Plan. Moreover, defendant has been released of all liability in connection with these two settlements. We therefore dismiss this appeal as moot in so far as it relates to these two plans. Plaintiff is apparently in the process of settling all claims against the Malco Products, Inc. Health Benefit Plan; it has not agreed to release defendant of all liability with respect to this plan. Therefore, plaintiff's appeal is not entirely moot, and we shall consider his claims as they relate to the Malco Plan.
E. Breach of ERISA Plan
13
In Count I of his complaint, plaintiff claims that he is entitled to recover benefits from defendant.4 Section 502(a)(1) of ERISA permits suits to recover benefits. See 29 U.S.C. § 1132(a)(1)(B).5 However, we have explained that "[t]he administrative scheme of ERISA requires a participant to exhaust his or her administrative remedies prior to commencing suit in federal court." Miller v. Metropolitan Life Ins. Co., 925 F.2d 979, 986 (6th Cir.1991); see also Baxter v. C.A. Muer Corp., 941 F.2d 451, 453 (6th Cir.1991). Although ERISA does not explicitly require exhaustion, the statute does require benefit plans to provide internal dispute resolution procedures. See 29 U.S.C. § 1133(2).6 "[T]he exhaustion requirement enables plan fiduciaries to 'efficiently manage their funds; correct their errors; interpret plan provisions; and assemble a factual record which will assist a court in reviewing the fiduciaries' actions.' " Baxter, 941 F.2d at 453 (quoting Makar v. Health Care Corp. of Mid-Atlantic, 872 F.2d 80, 83 (4th Cir.1989)).
14
The Malco Plan provides for an appeals process. According to the plan document, a claimant must first file a claim for benefits with the Claims Administrator, namely defendant. If the claim is denied, a claimant may seek review by the Plan Administrator, namely the employer/plan sponsor. "The Plan Administrator shall render a full and fair review of the claim and its denial, and shall make a final decision."
15
Plaintiff appears to concede that he has not exhausted his administrative remedies under the plan. In his complaint, he states that he "has not been advised whether the Plan contains an internal appeal procedure which, in any event, would be futile under the circumstances." Traditional exhaustion principles do include an exception for instances "when resort to the administrative route is futile or the remedy inadequate." Costantino v. TRW, Inc., 13 F.3d 969, 974 (6th Cir.1994).
16
Here, the District Court did not dismiss plaintiff's complaint for failure to exhaust remedies nor did it even consider the issue, although defendant raised the defense in its motion. However, our review is de novo, and a decision of a district court must be affirmed if correct for any reason, including a reason not considered by the district court. See Russ' Kwik Car Wash, 772 F.2d at 216. We conclude that plaintiff should have exhausted the administrative remedies provided under the plans and, because he did not, dismissal of his action for recovery of benefits is proper. Although he contends that such exhaustion would be futile, he has not alleged any factual basis for this claim. Additionally, he has not alleged a cause of action pursuant to 29 U.S.C. § 1132(c), which permits suits against any plan administrator who fails or refuses to comply with a request for information.
17
Count I also states a claim for an injunction and "other appropriate equitable relief" under section 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3), which provides a cause of action for statutory violations.7 Although not expressly alleged in the complaint, plaintiff suggests in his brief that this relief is sought for violations of ERISA section 406, 29 U.S.C. § 1106, which prohibits specific transactions between a plan and its parties in interest. Some circuits have held that the exhaustion requirement does not apply to alleged violations of the statute. See, e.g., Graphic Communications Union v. GCIU-Employer Retirement Benefit Plan, 917 F.2d 1184, 1187 (9th Cir.1990). We need not address that question here, however, because plaintiff alleges no facts suggesting that defendant engaged in any prohibited transactions. Indeed, plaintiff does not even mention section 406 in his complaint. Thus, we affirm the dismissal of Count I of plaintiff's complaint.
F. Breach of Fiduciary Duty
18
Plaintiff also alleges that defendant has violated its fiduciary duties in failing to act in accordance with ERISA section 404, 29 U.S.C. § 1104, and that he "is entitled to recover the benefits due under the plan" under ERISA section 409, 29 U.S.C. § 1109.8 Plaintiff also seeks "other equitable or remedial relief" for the alleged violation.
19
As previously suggested, some courts have held that the exhaustion requirement does not apply to a claim for breach of fiduciary duty, because such a claim involves an alleged violation of the statute, not the plan. See Graphic Communications Union, 917 F.2d at 1187. Regardless of whether exhaustion is required for such claims, however, plaintiff here is essentially claiming that defendant breached its fiduciary duty by denying him payments which he was entitled to under the plan. In other words, the basis of this claim is the denial of benefits, which plaintiff had an obligation to appeal before he sued in federal court. Plaintiff cannot get around the exhaustion requirement by simply disguising his claim as a breach of fiduciary duty. See Drinkwater v. Metropolitan Life Ins., 846 F.2d 821, 826 (1st Cir.1988) ("If we were to allow claimants to play this characterization game, then the exhaustion requirement would be rendered meaningless.").
20
Moreover, plaintiff cannot recover in his individual capacity under ERISA section 409. In Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134, 140-44, 105 S.Ct. 3085, 3089-91, 87 L.Ed.2d 96 (1985), the Supreme Court held that section 409 and its companion remedial provision, section 502(a)(2), 29 U.S.C. § 1132(a)(2),9 provide relief only for a plan and not for individual participants. Thus, a fiduciary who breaches its duties must reimburse the plan, not the individual participants. See id. at 140, 105 S.Ct. at 3089. This court has repeatedly held that although an individual may bring a section 409 claim, ERISA does not permit recovery by an individual who claims a breach of fiduciary duty. See, e.g., Tregoning v. American Community Mut. Ins. Co., 12 F.3d 79, 83 (6th Cir.1993); see also Kuper v. Iovenko, 66 F.3d 1447, 1452-53 (6th Cir.1995).10
G. Unjust Enrichment & Declaratory Judgment
21
Finally, plaintiff argues that even if he has not alleged viable claims under ERISA, he has properly alleged claims against defendant for unjust enrichment and declaratory relief. First, he asserts that Count III sets forth a federal common law claim for unjust enrichment, presumably in order to avoid ERISA's broad preemption of state law claims. See 29 U.S.C. § 1144(a) ("[T]he provisions of [ERISA] shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan...."). Courts have recognized that Congress intended for the judiciary to develop and apply a federal common law to actions premised on the contractual obligations created by ERISA plans. See Whitworth Bros. Storage Co. v. Central States, Southeast and Southwest Areas Pension Fund, 794 F.2d 221, 235-36 & n. 23 (6th Cir.1986). However, federal common law is developed under ERISA only in those instances in which ERISA is silent or ambiguous. See Muse v. International Bus. Machs. Corp., 103 F.3d 490, 495 (6th Cir.1996), petition for cert. filed, 65 U.S.L.W. 3666 (U.S. Mar. 25, 1997). Here, creation of a federal common law of unjust enrichment for plan beneficiaries seeking to recover benefits under a plan would be inconsistent with ERISA's terms and policies. See Morales v. Pan Am. Life Ins. Co., 914 F.2d 83, 87 (5th Cir.1990). Plaintiff essentially seeks the same relief in Count III as he seeks in Counts I and II, namely the benefits to which he believes he is entitled under the plans. ERISA provides him with a cause of action in § 1132(a)(1)(B).
22
With regard to Count IV, in which plaintiff seeks declaratory relief, plaintiff has merely asserted a form of relief, not a cause of action. Plaintiff is not entitled to this relief in the absence of a viable claim.
III. Conclusion
23
For the foregoing reasons, we AFFIRM.
*
The Honorable Ellsworth A. Van Graafeiland, Circuit Judge of the United States Court of Appeals for the Second Circuit, sitting by designation
1
Apparently, at the time the complaint was filed, plaintiff believed that only one plan was involved
2
Defendant also submitted an affidavit of its Director of Claims. Plaintiff suggests in his reply brief that defendant is claiming that the court could consider this affidavit in ruling on the 12(b)(6) motion. However, the record shows that defendant submitted this affidavit in support of its motion for summary judgment only. Since the District Court denied the summary judgment motion as premature, we assume that the court did not consider the affidavit in granting the motion to dismiss. Regardless, we will not consider this affidavit in our de novo review
3
Plaintiff contends that we cannot find that the Portage County and City of Barberton plans are governmental plans, because defendant alleged in its counterclaim that both were "employee benefit plan[s] as defined under ERISA." However, a plan may be an "employee benefit plan" and thus fall within the scope of ERISA, but then be excluded from ERISA coverage because it is a governmental plan. Defendant therefore did not concede ERISA coverage and, in any event, we find that the plans are governmental plans
4
We will assume, as the District Court apparently did, that plaintiff received valid assignments of each of his patients' rights under their respective plans
5
Section 502(a)(1) of ERISA provides that
A civil action may be brought--
(1) by a participant or beneficiary--
...
(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan[.]
29 U.S.C. § 1132(a)(1)(B).
6
Specifically, ERISA requires that employee benefit plans "afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim." 29 U.S.C. § 1133(2)
7
Section 502(a)(3) of ERISA provides that a civil action may be brought
(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan[.]
29 U.S.C. § 1132(a)(3).
8
Section 409 provides that a fiduciary who breaches his or her responsibilities
shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary.
29 U.S.C. § 1109(a).
9
Section 502(a)(2) provides that a civil action may be brought "by the Secretary, or by a participant, beneficiary, or fiduciary for appropriate relief under section 1109 of this title." 29 U.S.C. § 1132(a)(2)
10
In Varity Corp. v. Howe, --- U.S. ----, ---- - ----, 116 S.Ct. 1065, 1076-78, 134 L.Ed.2d 130 (1996), the Supreme Court held that ERISA plan beneficiaries harmed by a breach of fiduciary duty by their plan administrator may seek equitable relief against the administrator under 29 U.S.C. § 1132(a)(3). However, even though plaintiff could state a claim for equitable relief against defendant, if defendant is in fact a fiduciary, we find that the alleged breach in this case is essentially a denial of benefits and should be dismissed for failure to exhaust administrative remedies
| {
"pile_set_name": "FreeLaw"
} |
836 F.2d 546Unpublished Disposition
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.William JEFFERSON, Plaintiff-Appellant,v.James E. JOHNSON, C.T. Barksdale, Sgt. Staton, Officer Test,Officer Hudson, Defendants-Appellees.
No. 87-7329.
United States Court of Appeals, Fourth Circuit.
Submitted Oct. 27, 1987.Decided Dec. 17, 1987.
William Jefferson, appellant pro se.
Mary Sue Terry, Attorney General, for appellees.
Appeal from the United States District Court for the Western District of Virginia, at Lynchburg. James C. Turk, Chief District Judge. (C/A No. 87-144-L).
Before SPROUSE, WILKINSON, and WILKINS, Circuit Judges.
PER CURIAM:
1
A review of the record and the district court's opinion discloses that this appeal from its order denying relief under 42 U.S.C. Sec. 1983 is without merit. Because the dispositive issues recently have been decided authoritatively, we dispense with oral argument and affirm the judgment below on the reasoning of the district court. Jefferson v. Johnson, C/A No. 87-144-L (W.D.Va. Sept. 9, 1987).
2
AFFIRMED.
| {
"pile_set_name": "FreeLaw"
} |
694 N.E.2d 1102 (1998)
296 Ill. App.3d 550
230 Ill.Dec. 824
Gary STAHL and Carol Stahl, James J. Faust, Harvey Silverberg and Susan Silverberg, Plaintiffs-Appellants,
v.
The VILLAGE OF HOFFMAN ESTATES, an Illinois Municipal Corporation and Douglas Ellsworth, Finance Director of the Village of Hoffman Estates, Defendants-Appellees.
No. 1-97-3145.
Appellate Court of Illinois, First District, Fourth Division.
May 14, 1998.
*1103 Michael Kalland, Law Offices of Josette Skelnik, Elgin, Mark Schuster, Meyers, Schuster, Flowers & Solano, Elgin, for Plaintiffs-Appellants.
Richard N. Williams, Corp. Counsel, Village of Hoffman Estates, Hoffman Estates, for Defendants-Appellees.
Justice WOLFSON delivered the opinion of the court:
People who transfer title to real estate in the Village of Hoffman Estates are required to pay a transfer tax. But, since September 21, 1987, a grantor who lives on the property *1104 for a year is exempted from paying the tax if he or she buys another residence in the Village within a certain period of time.
The plaintiffs in this caseGary and Carol Stahl, Harvey and Susan Silverberg, and James Fausthave launched a wide variety of constitutional attacks on the transfer tax and its exemption. They claim violations of the United States Constitution: the Commerce Clause, the Privileges and Immunities Clause, the Due Process Clause, the Equal Protection Clause, and the right to travel. They also contend the tax violates the Illinois Constitution's uniformity of taxation and due process clauses.
The trial court dismissed the plaintiffs' lawsuit against the Village, finding no violations of the Federal or State Constitutions. We agree with the trial court. We affirm. FACTS
On September 21, 1987, the Village of Hoffman Estates adopted ordinance 1884-1987:
"A tax is imposed on the privilege of transferring title to real estate located within the corporate limits of the Village as evidenced by the recordation of a deed by any person and a tax is imposed on the privilege of transferring the beneficial interest in real estate located within the corporate limits of the Village at the rate of One Dollar per One Thousand Dollars of value for each transfer."
Under the ordinance, the grantor of a deed conveying Village property would incur transfer tax liability. In 1990, the Village raised this tax to $3 for every $1,000 valuation.
The ordinance also provided an exemption for:
"Transactions wherein one of the grantors has continuously resided upon the property for the past one year and has evidence of a contract for sale as a purchaser for a residence within the Village, such contract having closed within three months of the exempt transaction or to close by contract within three months after the exempt transaction."
The Village amended this exemption in 1993 to include contracts closing six months before and after the exempt transaction.
On June 5, 1992, Faust sold his home, moved to Hanover Park, Illinois, and incurred a transfer tax liability of $606. On December 20, 1993, the Stahls sold their home, moved to Crystal Lake, Illinois, and incurred a transfer tax liability of $423. On September 25, 1996, the Silverbergs sold their home, moved to Collegeville, Pennsylvania, and incurred a transfer tax liability of $444. Because they moved out of the Village after transferring their property, none of the appellants received resident exemptions, and all made their transfer tax payments.
On March 20, 1995, Faust filed this lawsuit against the Village of Hoffman Estates to recover his allegedly unconstitutional tax payments. On April 9, 1995, the Stahls joined Faust's complaint; on November 19, 1995, the Silverbergs joined Faust's complaint. The appellants' third amended complaint requested legal and equitable relief from the Village's "enforcement and collection of an unconstitutional real estate transfer tax * * *."
Specifically, this complaint alleged:
"* * * [T]he Defendant Village of Hoffman Estates' real estate transfer tax (i) violates the Commerce Clause, the Privileges and Immunities Clause, and the Equal Protection Clause of the United States Constitution; (ii) violates Plaintiffs' due process rights under the United States Constitution and Article I, Section II of the Constitution of the State of Illinois; and (iii) deprives Plaintiffs of their right to travel under the United States Constitution. Through these violations of Plaintiffs' civil rights under color of law, Defendants have violated 42 U.S.C. § 1983. Finally, Defendant Village of Hoffman Estates' real estate transfer tax does not uniformly tax the subjects and objects of the tax in violation of Article IX, Section 2 of the Illinois Constitution."
Under the heading "COMMERCE CLAUSE," the complaint also alleged: "The Village of Hoffman Estates Municipal Code, Article 13-5, discriminates against interstate and intrastate commerce in violation of Article I, § 8 of the United States Constitution." (Emphasis added.)
*1105 On October 16, 1995, the Village of Hoffman Estates adopted ordinance 2768-1995, which said the exemption "shall be and is hereby repealed." Both sides in this case believe the repeal would not take effect unless the exemption were held invalid on the final order of a court of competent jurisdiction. We do not necessarily share that view, given the clear and specific words of repeal, but there is no need to decide the question because the answer would not affect the rights of the parties to this appeal.
On April 16, 1997, the Village of Hoffman Estates filed a motion to dismiss under section 2-615 of the Civil Practice Act. See 735 ILCS 5/2-615(a) (West 1992). The trial court granted this motion on July 19, 1997. The court found the appellants' due process, equal protection, right to travel, and tax uniformity claims foreclosed by Ball v. Village of Streamwood, 281 Ill.App.3d 679, 216 Ill. Dec. 251, 665 N.E.2d 311 (1996). The court also found the transfer tax had only an incidental effect on interstate commerce and the tax did not deny the privileges or immunities of Illinois residents to the appellants, who were Illinois residents when they transferred their real estate. This appeal followed.
DECISION
A motion to dismiss under section 2-615(a) of the Civil Practice Act "tests the legal sufficiency of a pleading and a court must accept all well-pleaded facts as true." Doe v. Calumet City, 161 Ill.2d 374, 381, 204 Ill.Dec. 274, 641 N.E.2d 498 (1994). On appeal, the standard of review for a section 2-615 dismissal is de novo. Hough v. Kalousek, 279 Ill.App.3d 855, 216 Ill.Dec. 373, 665 N.E.2d 433 (1996).
The parties do not dispute the facts. The appellants transferred property within the Village and moved out of the Village. The appellants received no exemptions and paid their transfer taxes under the ordinance. The question becomes: do these undisputed facts give rise to the constitutional violations alleged by the appellants?
Home rule municipalities retain the right to levy taxes. Ill. Const.1970, art. VII, § 6(a). Home rule municipalities have broad taxation powers and may exercise these powers unless restricted by a constitutional provision or appropriate legislation. Mulligan v. Dunne, 61 Ill.2d 544, 338 N.E.2d 6 (1975). Home rule municipalities have authority to enact tax ordinances for taxable events occurring within their territorial limits. Forsberg v. City of Chicago, 151 Ill.App.3d 354, 361, 104 Ill.Dec. 20, 502 N.E.2d 283 (1986). The Village of Hoffman Estates is a home rule unit.
The appellants apparently attack both the transfer tax and its resident exemption. But the transfer tax itself could not offend any constitutional provisions: State and local governments may impose real property taxes. A closer examination of the appellants' contentions reveals they dispute only the resident exemption. The appellants contend the transfer tax violates assorted constitutional provisions because they sold their property, relocated outside the Village, and thus did not receive the resident exemption.
1. Commerce Clause
The Commerce Clause provides plenary power to Congress "[t]o regulate Commerce among the several States" (U.S. Const., art. I, § 8, cl.3), and by implication imposes a limitation on State and local regulation of interstate commerce (Oklahoma Tax Commission v. Jefferson Lines, Inc., 514 U.S. 175, 179-80, 115 S.Ct. 1331, 1335, 131 L.Ed.2d 261, 268 (1995)). See Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 6 L.Ed. 23 (1824)(per Marshall, C.J.).
In its "negative aspect" (Fulton Corp. v. Faulkner, 516 U.S. 325, 330,116 S.Ct. 848, 853, 133 L.Ed.2d 796, 804 (1996)), the Commerce Clause prevents State or local governments from engaging in economic isolationism by discriminating against out-of-state business through regulation or taxation. C & A Carbone, Inc. v. Clarkstown, 511 U.S. 383, 390, 114 S.Ct. 1677, 1682, 128 L.Ed.2d 399, 407 (1994)(citing The Federalist No. 22 (A.Hamilton) at 143-45 (C. Rossiter ed.1961)).
Because the Commerce Clause presumes a national market for Congress to regulate, a State or local government violates the so-called dormant Commerce Clause by depriving out-of-state business access to free trade in a local market. See Freeman v. *1106 Hewit, 329 U.S. 249, 252, 67 S.Ct. 274, 276, 91 L.Ed. 265, 272 (1946).
The United States Supreme Court has formulated a two-stage test for analyzing putative commerce clause violations.
First, the court must determine whether the State or local regulation per se discriminates against interstate commerce. See Fulton Corp., 516 U.S. at 331, 116 S.Ct. at 853-854; C & A Carbone, 511 U.S. at 390, 114 S.Ct. at 1682. "Discrimination" simply means differential treatment. Oregon Waste Systems, Inc. v. Department of Environmental Quality, 511 U.S. 93, 99, 114 S.Ct. 1345, 1350, 128 L.Ed.2d 13, 21 (1994). "Once a state tax is found to discriminate against out-of-state commerce, it is typically struck without further inquiry." Chemical Waste Management, Inc. v. Hunt, 504 U.S. 334, 342,112 S.Ct. 2009, 2014,119 L.Ed.2d 121,132 (1992); National Paint & Coatings, Ass'n v. City of Chicago, 45 F.3d 1124, 1131 (7th Cir.1995); DeHart v. Town of Austin, 39 F.3d 718, 723 (7th Cir.1994). In other words, if the regulation fails the first stage, our inquiry ends: the regulation violates the Constitution.
However, even if the regulation is not per se discriminatory, it still faces the second stage. The court must determine whether the State or local regulation imposes a burden on interstate commerce which clearly outweighs its potential benefits. See C & A Carbone, 511 U.S. at 390, 114 S.Ct. at 1682.
"If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved and on whether it could be promoted as well with a lesser impact on interstate activities." Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847, 25 L.Ed.2d 174, 178 (1970).
The appellants concede the exemption does not substantially burden interstate commerce. Instead, they rely on their claim that the exemption facially, or per se, discriminates against interstate commerce. Thus, we do not address the second stage of the commerce clause test.
To support their per se discrimination argument, the appellants rely on Oregon Waste and Chemical Waste. In Oregon Waste and Chemical Waste, the Court invalidated state fees imposed disproportionately on out-of-state solid waste. Here, the Village's property tax exemption does not disproportionately burden nonresidents. In fact, the exemption does not distinguish between residents of Hoffman Estates, Illinois and residents of another State. Instead, it segregates Hoffman Estates residents who sell their homes and choose to repurchase a home in the Village from Hoffman Estates residents who choose to sell their homes and then purchase homes anywhere else.
Oregon Waste and Chemical Waste do not address property taxes, although "[a] tax on real estate * * * may impermissibly burden interstate commerce." Camps Newfound/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564,___, 117 S.Ct. 1590, 1597, 137 L.Ed.2d 852, 864 (1997). In Camps Newfound, Maine's property tax exemptions did not apply to charitable organizations primarily serving out-of-state patrons. A summer camp provided its services to mostly out-of-state campers, and thus did not receive the exemption.
In invalidating these exemptions, the Court held a State could not impose property taxes, or provide property tax exemptions, in a manner that discriminated against interstate commerce. Camps Newfound, 520 U.S. at117 S.Ct. at 1597, 137 L.Ed.2d at 864,. The Court found the exemptions benefited in-state charities catering to in-state patrons and burdened in-state charities catering to out-of-state persons. 520 U.S. at ___, 117 S.Ct. at 1598, 137 L.Ed.2d at 864.
However, in Camps Newfound, the Court did not say real estate was an article of interstate commerce. Instead, the Court focused on the interstate commerce "product"the service provided by the summer campregardless of the mechanism for burdening it. Camps Newfound, 520 U.S. at ___, 117 S.Ct. at 1598,137 L.Ed.2d at 865. In our case, the product___real estate itself___ cannot travel in interstate commerce.
"It is now well established * * * that a State [or municipality] may tax the owner of property `having a situs within its limits, whether [the property is] employed in interstate commerce or not * * *' [citation], and whether the owner is a resident or *1107 not." Philco Corp. v. Department of Revenue, 40 Ill.2d 312, 322, 239 N.E.2d 805 (1968)(citing Helson v. Kentucky, 279 U.S. 245, 49 S.Ct. 279, 73 L.Ed. 683 (1929); Pullman's Palace Car Co. v. Pennsylvania, 141 U.S. 18,11 S.Ct. 876, 35 L.Ed. 613 (1891)).
See also 15 C.J.S. Commerce § 103 ("The commerce clause * * * does not preclude the imposition by a state or municipality thereof of property taxes on property of persons or corporations engaged in interstate * * * commerce, where such property has a taxable situs within the borders of the taxing state.")
This court has held:
"[A] tax on an event occurring within the taxing body is not a prohibited tax on interstate commerce. [Citation.] A tax is valid upon things which are at rest within the taxing body, notwithstanding the fact that they might have been involved in interstate transit before or after that time." Forsberg, 151 Ill.App.3d at 366,104 Ill.Dec. 20, 502 N.E.2d 283.
In enacting the transfer tax, the Village merely exercised its sovereign power to assess taxes against real property within its jurisdiction. Here, the taxable eventthe transfer of real propertyoccurred entirely within the Village, and the transfer tax itself applies only to residents. Unlike the in-state businesses in Camps Newfound, the appellants do not complain that some interstate commerce activity increased their tax burden.
The appellants also rely on C & A Carbone. In C & A Carbone, an in-state solid waste processing company attempted to move waste out of state for processing. A municipality blocked this transfer under an ordinance which required any solid waste, whether generated in-state or out-of-state, to be processed at a local facility. The company challenged the ordinance, and the Court invalidated it as per se discriminatory. C & A Carbone, 511 U.S. at 394,114 S.Ct. at 1684.
The "local processing" cases like C & A Carbone stand for the proposition that local governments cannot burden interstate commerce by regulations which geographically funnel in-state and out-of-state demand for goods and services toward an in-state supply. But our case differs from C & A Carbone and its predecessors in an important respect.
Unlike the company in C & A Carbone, the appellants here were not engaged in interstate commerce. Instead, the appellants sold real estate with a taxable situs in the Village and incurred the Village's property tax while they were Village residents. The appellants simply cannot raise the Commerce Clause as a constitutional ground for relief. See Ball, 281 Ill.App.3d at 687, 216 Ill.Dec. 251, 665 N.E.2d 311 ("In order to have standing to raise a constitutional issue, a plaintiff must bring himself within the class of persons to whom the law is objectionable.")
Additionally, "the class protected by the commerce clause is competitors, not consumers." (Emphasis in original.) Geja's Cafe v. Metropolitan Pier & Exposition Authority, 153 Ill.2d 239, 256, 180 Ill.Dec. 135, 606 N.E.2d 1212 (1992). "[T]he rationale of the commerce clause was to create and foster the development of a common market among the states, eradicating internal trade barriers, and prohibiting the economic Balkanization of the Union." 2 R. Rotunda & J. Nowak, Treatise on Constitutional Law § 11.1, at 4 (2d ed.1992).
In other words, the so-called dormant Commerce Clause seeks to tear down State and local regulations which "discriminate against" nonresidents. Terry v. Metropolitan Pier & Exposition Authority. (Emphasis added.) 271 Ill.App.3d 446, 455, 208 Ill.Dec. 125, 648 N.E.2d 1047 (1995). The Commerce Clause was not intended to provide benefits to people or businesses who choose to move from state to state.
The ordinance, with its exemption, does not impose a tax on people who leave the Village. It rewards the people who stay. In that way the Village promotes stability and continuity. That is a legitimate local purpose. People make decisions about where they want to live. We do not see how the decision to leave Hoffman Estates, foregoing a tax exemption, can be said to offend the Commerce Clause.
The Hoffman Estates' property tax exemption is not per se discriminatory. The Hoffman Estates real estate transfer tax, as applied to the appellants, does not violate the Commerce Clause.
*1108 2. Privileges and Immunities Clause
The Privileges and Immunities Clause provides that "the Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States." U.S. Const., art. IV, § 2. The Privileges and Immunities Clause bars:
" * * * discrimination against citizens of other States where there is no substantial reason for the discrimination beyond the mere fact that they are citizens of other states." Toomer v. Witsell, 334 U.S. 385, 396, 68 S.Ct. 1156, 1162, 92 L.Ed. 1460, 1471 (1948).
This constitutional protection extends to the right of nonresidents "to carry on business in another [State] without being subjected in property or person to taxes more onerous" than residents. Shaffer v. Carter, 252 U.S. 37, 56, 40 S.Ct. 221, 227, 64 L.Ed. 445, 458 (1920). But it does not preclude taxes which burden residents and nonresidents equally. Lunding v. N.Y. Tax Appeals Tribunal, ___ U.S. ___,___, 118 S.Ct. 766, 774, 139 L.Ed.2d 717, 729 (1998).
Here, the transfer tax operates equally on nonresidents and residents who chose to move out of the Village after selling their property. Additionally, all of the appellants were Village (and therefore Illinois) residents when they transferred their property and incurred the tax. The Hoffman Estates transfer tax does not violate the Privileges and Immunities Clause.
3. Plaintiffs' Other Constitutional Challenges
The appellants have brought a section 1983 claim for an alleged violation of the uniformity and due process clauses of the Illinois constitution. However, section 1983 provides a vehicle for vindicating Federal constitutional and statutory rights, not State rights, deprived under color of State law.
More importantly, the trial court correctly dismissed the appellants' other constitutional claims pursuant to the recent First District decision in Ball, 281 Ill.App.3d 679, 216 Ill. Dec. 251, 665 N.E.2d 311.
In Ball, this court addressed multiple constitutional challenges to an ordinance identical to the transfer tax ordinance here. The taxpayers challenged the ordinance as violative of the right to travel and the rights to uniformity, equal protection, and due process. This court soundly rejected these constitutional arguments, noting Streamwood's transfer tax bore a reasonable relationship to the legitimate interest in local neighborhood preservation, continuity, and stability. Ball, 281 Ill.App.3d at 684-85, 216 Ill.Dec. 251, 665 N.E.2d 311.
The appellants have presented no convincing arguments why our decision on an identical ordinance should differ two years after Ball. The Hoffman Estates transfer tax does not violate the right to travel and the rights to uniformity, equal protection, and due process.
CONCLUSION
The Hoffman Estates real estate transfer tax and the exemption, as applied to the appellants, comports with Federal and State constitutional provisions.
AFFIRMED.
McNAMARA and SOUTH, JJ., concur.
| {
"pile_set_name": "FreeLaw"
} |
658 F.3d 1038 (2011)
Mariam MARONYAN, Plaintiff-Appellant,
v.
TOYOTA MOTOR SALES, U.S.A., INC., Defendant-Appellee.
No. 09-56949.
United States Court of Appeals, Ninth Circuit.
Submitted February 7, 2011.[*]
Filed September 20, 2011.
*1039 Martin W. Anderson, Anderson Law Firm, Santa Ana, CA, for plaintiff-appellant Mariam Maronyan.
Peder K. Batalden, Horvitz & Levy LLP, Encino, CA, for defendant-appellee Toyota Motor Sales, U.S.A., Inc.
Before: D.W. NELSON, STEPHEN REINHARDT, and N. RANDY SMITH, Circuit Judges.
Opinion by Judge REINHARDT; Dissent by Judge N.R. SMITH.
OPINION
REINHARDT, Circuit Judge:
Mariam Maronyan brought suit against Toyota Motor Sales, U.S.A. Inc. when the new car that she leased developed mechanical problems during the warranty period and Toyota failed to repair them to her satisfaction. In addition to several California state law claims, she alleged breach of warranty under the Magnuson-Moss Warranty Act ("MMWA"). The district court granted Toyota's motion to dismiss for lack of subject matter jurisdiction on the ground that Maronyan did not before filing suit in civil court pursue her claims through the California Dispute Settlement Program ("CDSP") that Toyota maintained and specified in its warranty.
Maronyan appeals. She argues that her failure initially to resort to the CDSP provides Toyota an affirmative defense to her warranty claims under the MMWA, but does not defeat subject matter jurisdiction. We review de novo whether the district court properly dismissed for lack of subject matter jurisdiction. BNSF Ry. Co. v. O'Dea, 572 F.3d 785, 787 (9th Cir.2009). Neither party disputes that § 2310(a) of the MMWA imposes a prior-resort requirement on prospective consumer claimants seeking recovery in court. The MMWA provides that if
(A) a warrantor establishes [a dispute settlement procedure],
(B) such procedure, and its implementation meets the requirements of [the FTC's rules under paragraph (2)], and
(C) he incorporates in a written warranty a requirement that the consumer resort to such procedure before pursuing any legal remedy under this section respecting such warranty,
then . . . the consumer may not commence a civil action (other than a class action) under subsection (d) of this section unless he initially resorts to such procedure. . . .
15 U.S.C. § 2310(a)(3) (2007). The only question before us is whether Maronyan's failure to comply with the MMWA's requirement that a consumer resort to an *1040 informal dispute settlement procedure before filing a civil action deprives the court of subject matter jurisdiction. We hold that it does not.
Most exhaustion requirements established by Congress do not result in a loss of subject matter jurisdiction. See I.A.M. Nat'l Pension Fund Benefit Plan C. v. Stockton TRI Indus., 727 F.2d 1204, 1208 (D.C.Cir.1984) ("Only when Congress states in clear, unequivocal terms that the judiciary is barred from hearing an action until the administrative agency has come to a decision . . . has the Supreme Court held that exhaustion is a jurisdictional prerequisite"). Rather, statutorily created exhaustion requirements ordinarily constitute prudential affirmative defenses that may be defeated by compelling reasons for failure to exhaust. See Weinberger v. Salfi, 422 U.S. 749, 757, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975) (distinguishing prudential exhaustion, "a codified requirement of administrative exhaustion," from jurisdictional exhaustion which requires "sweeping and direct language which states that no action shall be brought under [the statute at issue], not merely that only those actions shall be brought in which administrative remedies have been exhausted").
A consumer's failure to exhaust an administrative or other pre-filing remedy deprives federal courts of subject matter jurisdiction only in those cases in which Congress makes plain the jurisdictional character of the exhaustion requirement in question. "Consistent with the Supreme Court's guidance in Weinberger, we have rarely found exhaustion statutes to be a jurisdictional bar." McBride Cotton and Cattle Corp. v. Veneman, 290 F.3d 973, 978 (9th Cir.2002). "[F]ailure to exhaust does not deprive a federal court of jurisdiction when the exhaustion statute is merely a codification of the exhaustion requirement," unless Congress uses "`sweeping and direct' language that goes beyond a requirement that only exhausted claims be brought." Id. at 979 (quoting Weinberger, 422 U.S. at 757, 95 S.Ct. 2457).
That a failure to satisfy a statutory prerequisite to filing suit deprives a court of subject matter jurisdiction only when Congress provides a sweeping and direct jurisdictional mandate helps to explain why none of the cases on which Toyota relies concludes that the statutory provision at issue operates as a jurisdictional bar. See Reed Elsevier v. Muchnick, ___ U.S. ___, 130 S.Ct. 1237, 176 L.Ed.2d 18 (2010) (holding that a copyright holder's failure to comply with § 411(a)'s registration requirement does not restrict a federal court's subject-matter jurisdiction over copyright infringement claims involving unregistered works); Arbaugh v. Y & H Corp., 546 U.S. 500, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) (holding that Title VII's "employee-numerosity requirement," which requires potential defendants to maintain at least fifteen employees, does not limit a court's jurisdiction); Kontrick v. Ryan, 540 U.S. 443, 454-55, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) (holding that a bankruptcy rule that allows a creditor sixty days to object to a debtor's discharge was not a jurisdictional bar to considering an untimely objection); McBride, 290 F.3d at 979 (holding that the exhaustion requirement of 7 U.S.C. § 6912(e) is not jurisdictional).
Most recently, the Supreme Court in Henderson v. Shinseki, ___ U.S. ___, 131 S.Ct. 1197, 179 L.Ed.2d 159 (2011), unanimously held that the deadline for filing a notice of appeal with the Veterans Court was not jurisdictional because Congress, in enacting the statute, did not "mandate[]" that it was. Id. at 1203. The Court explained:
Because the consequences that attach to the jurisdictional label may be so drastic, we have tried in recent cases to bring some discipline to the use of this *1041 term. . . . Other rules, even if important and mandatory, we have said, should not be given the jurisdictional brand. . . . Under Arbaugh, we look to see if there is any "clear" indication that Congress wanted the rule to be "jurisdictional."
Id. at 1202-03 (citations omitted). Arbaugh emphasized that filing requirements restrict a court's subject matter jurisdiction only "[i]f the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional." 546 U.S. at 515, 126 S.Ct. 1235 (emphasis added). In an explanatory footnote immediately following this passage, the Court noted that "Congress has exercised its prerogative to restrict the subject-matter jurisdiction of federal district courts based on a wide variety of factors," and lists a number of previously-recognized jurisdictional criteria, such as restrictions on the classes of plaintiffs empowered to bring a civil action or defendants potentially subject to liability. None of these considerations resembles the MMWA's requirement that a plaintiff exhaust pre-filing remedies before bringing an action. Id. at 515 n. 11, 126 S.Ct. 1235.
The Court has chastised lower courts for their overly zealous application of the term "jurisdictional" to what are accurately understood as claims-processing rules or elements of a plaintiff's claim. Reed Elsevier, 130 S.Ct. at 1243-44. A unanimous court in Arbaugh restated the necessity of a clear Congressional mandate to elevate a statutory requirement to a jurisdictional prerequisite, emphasizing that "[i]f the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue." 546 U.S. at 515-16, 126 S.Ct. 1235. Although the Court has acknowledged that "Congress is free to attach . . . the jurisdictional label to a rule that [the courts] would prefer to call a claims-processing rule," Henderson, 131 S.Ct. at 1203, it has cautioned lower courts to refrain from capriciously assigning the jurisdictional label when Congress has failed to clearly provide the requisite mandate, see Reed Elsevier, 130 S.Ct. at 1244 (cautioning courts against engaging in "drive-by jurisdictional rulings").
The MMWA's requirement that a "consumer may not commence a civil action. . . unless he initially resorts to [an informal dispute settlement procedure]," 15 U.S.C. § 2310(a), is similar in all material respects to the requirements in two other statutes that we have examined previously.[1] In both cases, we held that the exhaustion requirements do not deprive the district court of subject matter jurisdiction. First, in Rumbles v. Hill, 182 F.3d 1064 (9th Cir.1999), we reviewed the exhaustion requirement of 42 U.S.C. § 1997e(a):
No action shall be brought with respect to prison conditions under section 1983 of this title, or any other Federal law, by a prisoner confined in any jail, prison, or other correctional facility until such administrative remedies as are available are exhausted.
We held that the exhaustion of remedies under § 1997e(a) was not a jurisdictional prerequisite to suit under 42 U.S.C. § 1983. See Rumbles, 182 F.3d at 1067-68.[2] Second, in McBride, we held that a *1042 failure to comply with 7 U.S.C. § 6912(e)'s requirement that "a person shall exhaust all administrative appeal procedures established by the Secretary or required by law before the person may bring an action in a court of competent jurisdiction," did not result in loss of subject matter jurisdiction. We held, rather, that the provision constituted "merely a codification of the exhaustion requirement." 290 F.3d at 980.[3] For the same reason that we held in McBride and Rumbles that the virtually identical exhaustion requirements of § 6912(e) and § 1997e(a) were not jurisdictional in character, we hold that § 2310(a) does not strip the district court of subject matter jurisdiction in the case before us.
Toyota urges us to conclude that Congress has clearly "mandated" that the MMWA exhaustion requirement is jurisdictional based on its aggregation of three scattered pieces of ambiguous and indirect statutory language. Toyota apparently perceives a clear mandate in: (1) a later subsection of the MMWA whose provisions are made "subject to subsection[](a)(3)" and includes "jurisdiction" as one among several other subheading labels; (2) the same later subsection, which merely refers to and by no means incorporates the exhaustion requirement in § 2310(a)(3), and states that "any court of competent jurisdiction" may hear MMWA claims; and (3) that same subsection which identifies the class of cases that fall within courts' adjudicatory authority under the MMWA. No serious analysis is required to explain why such obscure references to jurisdiction elsewhere in the statute do not constitute the kind of "sweeping and direct" language necessary, Weinberger, 422 U.S. at 757, 95 S.Ct. 2457, to demonstrate that Congress "clearly state[d]," Arbaugh, 546 U.S. at 515, 126 S.Ct. 1235, its intention to "mandate[]" that a consumer's failure to comply with § 2310(a)(3)'s exhaustion requirement deprives the district court of subject matter jurisdiction to hear his warranty claims. Henderson, 131 S.Ct. at 1203.
To the contrary, the statute's plain language reflects that its provision for the use of dispute settlement procedures before filing suit is not a jurisdictional bar but rather a prudential exhaustion requirement. Neither § 2310(a)(3) nor § 2310(a)(4) even mentions subject matter jurisdiction. Elsewhere, the statute prompts warrantors to include "[i]nformation respecting the availability of any informal dispute settlement procedure" and a recital "that the purchaser may be required to resort to such procedure before pursuing any legal remedies in the courts." § 2302(a)(8). Moreover, the agency to which Congress expressly delegated authority to interpret the MMWA explained shortly after its enactment that it seeks "to ensure that the consumer is not deceived into believing that prior resort to the Mechanism is required in all instances." FTC Rules, Regulations, Statements, *1043 Interpretations Under Magnuson-Moss Warranty Act, 40 Fed.Reg. 60,168, 60,194-95 (Dec. 31, 1975) (codified at 16 C.F.R. 701). None of these subsections mention subject-matter jurisdiction or otherwise "speak in jurisdictional terms." Arbaugh, 546 U.S. at 515, 126 S.Ct. 1235 (quoting Zipes v. Trans World Airlines, 455 U.S. 385, 394, 102 S.Ct. 1127, 71 L.Ed.2d 234 (1982)). While they do employ mandatory language, the Court has repeatedly held that "a statutory condition that requires a party to take some action before filing a lawsuit is not automatically `a jurisdictional prerequisite to suit.'" Reed Elsevier, 130 S.Ct. at 1246 (quoting Zipes, 455 U.S. at 393, 102 S.Ct. 1127). See also Henderson, 131 S.Ct. at 1205; Arbaugh, 546 U.S. at 510, 126 S.Ct. 1235. In light of the Supreme Court's current and continuing precedent, we cannot accept Toyota's argument that the statutory language used to establish MMWA's exhaustion requirement evinces a clear Congressional mandate to bestow jurisdictional status on a prerequisite that is properly deemed an affirmative defense.
To summarize, the MMWA's exhaustion requirement does not use sweeping and direct language demonstrating clear congressional intent to mandate loss of subject matter jurisdiction. Nor does Toyota rely on a single case in which a court dismissed an action for lack of subject matter jurisdiction on the basis of a plaintiff's failure to exhaust a statutory prerequisite to filing suit. In the only two cases in which we have considered statutory provisions similar to the MMWA's exhaustion requirement, we held that a failure to exhaust pre-filing requirements does not strip a district court of its subject matter jurisdiction, a conclusion almost unanimously approved by the other circuits. Supra at 1041-42 & nn. 2-3.
For the reasons explained above, we hold that § 2310(a)'s prerequisite that a "consumer may not commence a civil action. . . unless he initially resorts to[an informal dispute settlement procedure]" is merely a codification of the MMWA's exhaustion requirement and does not operate as a jurisdictional bar. Accordingly, we reverse and remand so that the district court may consider, in light of this opinion, how to proceed with the instant action, including the failure-to-exhaust issues.[4]
REVERSED and REMANDED for further proceedings in light of this Opinion.
N.R. SMITH, Circuit Judge, dissenting:
The Supreme Court recently explained in Henderson ex. rel. Henderson v. Shinseki that "Congress is free to attach the conditions that go with the jurisdictional label to a[n exhaustion] rule that we would prefer to call a claim-processing rule." ___ U.S. ___, 131 S.Ct. 1197, 1203, 179 L.Ed.2d 159 (2011) (emphasis added). Because Congress incorporated the exhaustion requirement of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. ("MMWA") into the statute's jurisdiction-granting provisions, we must defer to Congress's treatment of this provision as jurisdictional. See Henderson, 131 S.Ct. at 1203. Therefore, I must dissent from the majority's conclusion that the MMWA's exhaustion provision is merely procedural.
*1044 Additionally, the majority errs in declining to address a critical question of law properly raised on appealwhether courts (rather than the Federal Trade Commission) should decide challenges to a "Mechanism's"[1] compliance with federal regulations. Under the MMWA, courts no longer have authority to decide compliance issues, because Congress vested authority to decide those issues in the first instance with the FTC. On the other hand, even if the judiciary retained authority to address these issues, courts should defer to the FTC's unique expertise in Mechanism compliance under the primary jurisdiction doctrine.
I. Mechanism exhaustion under the MMWA is a jurisdictional prerequisite to filing suit
Judicial interpretation of the MMWA "begins with the plain language of the statute. If the text of the statute is clear, this court looks no further in determining the statute's meaning." K & N Eng'g, Inc. v. Bulat, 510 F.3d 1079, 1081 (9th Cir.2007) (citation omitted). The key question in this case is "whether Congress mandated that the [exhaustion provision] be `jurisdictional.'" Henderson, 131 S.Ct. at 1203. (emphasis added). The Henderson Court reiterated the "readily administrable bright line" test from Arbaugh v. Y & H Corp. for deciding such questions: "we look to see if there is any `clear' indication that Congress wanted the rule to be `jurisdictional.'" 131 S.Ct. at 1203 (quoting Arbaugh v. Y & H Corp., 546 U.S. 500, 515-16, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006)). To indicate such a preference, Congress can "[1] speak in jurisdictional terms or [2] refer in any way to the jurisdiction of the [district court]." Id. at 1204 (quoting Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 394, 102 S.Ct. 1127, 71 L.Ed.2d 234 (1982)); accord Arbaugh, 546 U.S. at 516, 126 S.Ct. 1235. "Congress, of course, need not use magic words in order to speak clearly on this point." Henderson, 131 S. Ct. at 1203. The analysis might also turn on "the `legal character' of the requirement, which we discern[ ] by looking to the condition's text, context, and relevant historical treatment." Reed Elsevier, Inc. v. Muchnick, ___ U.S. ___, 130 S.Ct. 1237, 1246, 176 L.Ed.2d 18 (2010) (citations omitted); see Kontrick v. Ryan, 540 U.S. 443, 455, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) ("[L]itigants [should use] the label `jurisdictional' not for claim-processing rules, but only for prescriptions delineating the classes of cases (subject-matter jurisdiction) and the persons (personal jurisdiction) falling within a court's adjudicatory authority." (emphasis added)).
Section 2310(d)(1) of the MMWA ties Mechanism exhaustion to the jurisdiction of the courts by expressly incorporating § 2310(a)(3):
(d) Civil action by consumer for damages, etc.; jurisdiction; recovery of costs and expenses; cognizable claims
(1) Subject to [the exhaustion requirement in] sub-section[](a)(3) . . . of this section, a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief
(A) in any court of competent jurisdiction in any State or the District of Columbia; or
*1045 (B) in an appropriate district court of the United States, subject to paragraph (3) of this subsection.
15 U.S.C. § 2310(d)(1) (emphasis added). There is no doubt that § 2310(d)(1) is a jurisdiction-granting provision, because: (1) the subsection heading includes the label "jurisdiction," § 2310(d); (2) it speaks in jurisdictional terms by specifying which courts may hear MMWA claims, Arbaugh, 546 U.S. at 515, 126 S.Ct. 1235; and (3) it identifies the classes of cases that fall within courts' adjudicatory authority under the MMWA, see Kontrick, 540 U.S. at 455, 124 S.Ct. 906. Therefore, because Congress incorporated § 2310(a)(3)'s exhaustion requirement into the jurisdictional provisions of § 2310(d)(1), the exhaustion provision must be treated as jurisdictional.[2]
The majority correctly notes that the MMWA's exhaustion provisionproviding that a "consumer may not commence a civil action . . . unless he initially resorts to [an informal dispute settlement procedure]," § 2310(a)(3)is not, standing alone, "jurisdictional in character." Maj. Op. at 1041-42. However, the majority ignores the fact that Toyota never made this argument, and the district court, therefore, did not address it. Instead, Toyota argued that Congress imbued § 2310(a) with jurisdictional character by incorporating the exhaustion provision into a clearly jurisdiction-granting sub-section of the statute. The majority dismisses this argument as requiring "[n]o serious analysis," because the incorporation is not sufficiently "sweeping and direct" to convey an intent to tie exhaustion to jurisdiction. Maj. Op. at 1042. One can reach this conclusion only by ignoring the Supreme Court's most recently elucidated indicia of Congressional intent: (1) "speak[ing] in jurisdictional terms," or (2) "refer[ring] in any way to the jurisdiction of the courts." Henderson, 131 S.Ct. at 1204 (quoting Zipes, 455 U.S. at 394, 102 S.Ct. 1127). Nowhere in its opinion does the majority employ this "readily administrable bright line" rule.[3]Id. at 1203 (quoting Arbaugh, 546 U.S. at 515-16, 126 S.Ct. 1235). When this standard is applied, it becomes clear that incorporating the exhaustion requirement into a subsection that both "speaks in jurisdictional terms" and "refer[s] in [some] way to the jurisdiction of the [courts]," id., conveys an intent to tie exhaustion to jurisdiction.
In sum, Congress is "free to attach the conditions that go with the jurisdictional label" at its discretion, even in cases where *1046 "we would prefer to call [the provision] a claim-processing rule." Id. This attachment need not be consistent with other statutes. Our inquiry simply turns on whether Congress has tied jurisdiction to the exhaustion requirement; in this case, it clearly has. I would therefore affirm on this issue and hold that the district court lacks jurisdiction to consider Maronyan's claims until she exhausts Toyota's Mechanism.
II. The Federal Trade Commission must decide challenges to a Mechanism's regulatory compliance
Regardless whether Toyota's dispute settlement program is a jurisdictional or procedural prerequisite to filing suit, Maronyan contends she was not required to exhaust the program. She argued to the district court that (1) Toyota's program does not qualify as a Mechanism pursuant to certain MMWA and FTC regulations; and (2) courts, rather than the FTC, should determine a Mechanism's regulatory compliance before making exhaustion a prerequisite to filing suit. Toyota argued to the district court that state and federal agencies have authority to assess Mechanism compliance, agency decisions should be conclusive, and litigating Mechanism compliance in every instance will produce inconsistent results. The district court granted Toyota summary judgment on the assumption that (1) courts have authority to review a Mechanism's compliance with federal regulations and (2) Toyota's program was, in fact, sufficiently compliant to require exhaustion. Although the issues of a court's authority to decide Mechanism compliance and the propriety of making such decisions were properly raised on appeal, the majority's opinion curiously declined to address them. Because I believe these questions of law should have been answered by our court, I address each in turn below.
A. Courts no longer have authority under the MMWA to review Mechanism compliance
The text and structure of the MMWA reveal that the FTC should determine a Mechanism's compliance with federal law in the first instance. The statute assigns several clear responsibilities to the FTC: (1) establish the minimum requirements for Mechanisms, id. § 2310(a)(2); (2) on its own initiative, it may review Mechanism operations for compliance, id. § 2310(a)(4); (3) upon written complaint, it must review Mechanism operations for compliance, id.; and (4) it may take appropriate remedial action against non-compliant programs, id.[4] The role of the courts (apparent from the text of the statute) is simply to invalidate *1047 any procedure that is "unfair" until the FTC adopts its own certification regulations. § 2310(a)(5). Maronyan argues that, because Mechanisms operate as "prerequisite[s] to pursuing a legal remedy" under § 2310(a)(3)(B), the MMWA impliedly authorizes courts to determine whether Mechanisms comply with FTC regulations when consumers bring claims under the statute. She supports this argument with an excerpt from a 1974 Senate Conference Report stating:
This is not intended to exclude the courts from reviewing the fairness, and compliance with FTC rules, of such procedures even where the FTC has not acted to disapprove them. In this connection the conferees recognize the limited resources of the Commission and the fact that its other responsibilities may preclude it from acting in some cases where private dispute settlement procedures may not comply with the legislation or the Commission's rules thereunder. Accordingly, the courts would be free to determine that a given dispute settlement procedure need not be exhausted because it was not fair, had no provision for governmental or consumer participation, or did not comply with FTC rules.
S.Rep. No. 93-1408, at 5 (1974) (Conf. Rep.), reprinted in 1974 U.S.C.C.A.N. 7755, 7759.
This legislative history is not persuasive. As the Supreme Court observed in Puerto Rico Department of Consumer Affairs v. Isla Petroleum Corp., courts "never [search for] congressional intent in a vacuum, unrelated to the giving of meaning to an enacted statutory text. . . . [U]nenacted approvals, beliefs, and desires are not laws." 485 U.S. 495, 501, 108 S.Ct. 1350, 99 L.Ed.2d 582 (1988). A legislative report may simply be "precatory" where the actual text of the statute does not support the language of the report. Sec'y of the Interior v. California, 464 U.S. 312, 322 n. 9, 104 S.Ct. 656, 78 L.Ed.2d 496 (1984). Thus, legislative history is only persuasive to the extent it finds textual support in the statute. Shannon v. United States, 512 U.S. 573, 583, 114 S.Ct. 2419, 129 L.Ed.2d 459 (1994) (the Court will not give "authoritative weight to a single passage of legislative history that is in no way anchored in the text of the statute"); Isla Petroleum, 485 U.S. at 501, 108 S.Ct. 1350.
Here, the statute identifies one instance in which courts should play a role in the Mechanism qualification process: "invalidat[ing] any such procedure if it finds that such procedure is unfair," but only "until [FTC rules] take effect." § 2310(a)(5) (emphasis added). Because the FTC adopted rules in 1975, see Promulgation of Rule, 40 Fed.Reg. 60190-01 (Dec. 31, 1975), courts no longer have statutory authority to decide a procedure's fairness or compliance with FTC rules. If Congress intended courts to continue playing this role, it should have (1) omitted the limiting qualification "until [FTC rules] take effect," or (2) included similar authorizing language elsewhere in the statute, such as § 2310(a)(3) or (4). Thus, the intent of the Senate report authors (that courts continue playing a role in the review of Mechanism compliance) did not bear out in the statutory language ultimately approved by Congress.
Instead, Congress vested the FTC with authority to promulgate rules, monitor Mechanism compliance, and take remedial action against non-compliant programs. Id. § 2310(a)(2), (4). Significantly, Congress also established the process by which consumers should challenge the compliance of a Mechanism: "The Commission. . . upon written complaint filed by any interested person shall[] review the bona fide operation of any [Mechanism]" for compliance with FTC rules. Id. § 2310(a)(4). As this provision suggests, *1048 the proper way to challenge a Mechanism's compliance with federal regulations is to lodge a written complaint with the FTC. See Wolf v. Ford Motor Co., 829 F.2d 1277, 1279 (4th Cir.1987) ("[T]he [MMWA]'s . . . mandate that the [FTC] prescribe minimum requirements for such mechanisms, evince a congressional intent to reserve to the federal regulatory body the authority to supervise whether the mechanisms are created and operated fairly."); id. at 1279 n. 3 ("[A]ny attack on the fairness or legitimacy of a dispute settlement mechanism must be through administrative channels."); see also Harrison v. Nissan Motor Corp., 111 F.3d 343, 346 n.3 (3d Cir.1997) (stating in dicta that whether the "BBB Auto Line [Mechanism] is in compliance with the FTC regulations. . . . is for the FTC, and not this Court, to decide").
Maronyan also claims the FTC renounced this role in an Action statement, suggesting Mechanism compliance is an "issue for litigation." See Interpretations of Magnuson-Moss Warranty Act, 64 Fed. Reg. 19,700, 19,708 (Fed. Trade Comm'n Apr. 22, 1999). This is inaccurate. In that Action, the FTC declined auto manufacturers' request to establish a national "prior approval" certification program that would determine Mechanism compliance with Rule 703 before mechanisms became effective and preempt certain state certification standards. Id. at 19,707-08. The manufacturers suggested a federal certification program would (1) eliminate the uncertainty of conflicting state certification standards; (2) diminish the risk of litigation over a mechanism's compliance with federal rules; and (3) encourage more warrantors to establish Mechanisms by diminishing the cost of compliance with unified standards for mechanism certification. Id. at 19,708. The Commission "recognize[d] that a uniform certification program could possibly diminish uncertainty," but declined the recommendation because, among other things, "FTC certification would not eliminate a [Mechanism]'s alleged non-compliance with Rule 703 as an issue for litigation." Id. Thus, the FTC did not disavow compliance over-sight as an "issue for litigation." It merely disputed one of the purported benefits of a national certification program by explaining that federal certification might create more litigation from auto manufacturers challenging the FTC's denial of certification and consumers challenging the FTC's approval of certification. Id. at 19,708 n. 65.
If there is any doubt, the FTC acknowledges its continuing role in the compliance verification process under Rule 703. Id. at 19,707; see 16 C.F.R. §§ 703.6, 703.7. The FTC's existing regulations require Mechanisms to (1) maintain detailed records on each dispute referred to it, organize the records in categorical indices, generate semi-annual aggregated statistics based on the result of arbitration, and maintain such records for four years, id. § 703.6; (2) make these records available to independent auditors for evaluation based on criteria determined by the FTC, id. § 703.7(a), (b), (d); and (3) submit audits to the FTC on an annual basis, id. § 703.7(c). Thus, under both the statute and relevant FTC regulations, the FTC exclusively oversees warrantors' Mechanism compliance.
B. Courts should defer to the FTC on issues of Mechanism compliance
Even if courts had authority under the MMWA to address Mechanism compliance with federal regulations, courts should defer to the FTC under the primary jurisdiction doctrine. The primary jurisdiction doctrine prescribes deference to an administrative agency where (1) the issue is not "within the conventional experiences of judges," (2) the issue "involves technical or policy considerations within the agency's *1049 particular field of expertise," (3) the issue "is particularly within the agency's discretion," or (4) "there exists a substantial danger of inconsistent rulings." Brown v. MCI WorldCom Network Servs., Inc., 277 F.3d 1166, 1172-73 (9th Cir.2002) (citations omitted); accord Nat'l Commc'ns Ass'n, Inc. v. AT&T Co., 46 F.3d 220, 222-23 (2d Cir.1995). The issue of Mechanism compliance falls within each of these categories.
First, Mechanism compliance involves "technical [and] policy considerations within the [FTC]'s field of expertise," which considerations fall outside the conventional experience of judges. The FTC has exclusive authority to promulgate minimum standards for Mechanisms, see § 2310(a)(2), and it alone monitors IDSM compliance nationally, see id. § 2310(a)(4). Thus, the FTC is in a unique position to determine the national implications of compliance orders determining, among other things, how strict compliance must be with certain provisions and whether the substantial compliance doctrine applies to the overall operation of the Mechanism. For example, the FTC declined to establish a national "prior approval" certification program in part because it might "exert a chilling effect on competition and on experimentation by Mechanisms, warrantors, and state governments in setting up and administering these programs." 64 Fed. Reg. at 19,708. This was a policy judgment informed by the FTC's expertise as the national overseer of Mechanism operations. The FTC processes data from annual audits submitted by every Mechanism in the country to evaluate Mechanisms' overall performance in a broad range of categories. See 16 C.F.R. § 703.7. Because a court (utilizing the narrow facts in a single case) cannot evaluate the many policy considerations hanging in the balance of a compliance order, the FTC is better suited to decide compliance issues under the national Mechanism regulatory regime.
Second, Mechanism compliance is "particularly within the agency's discretion." Congress gave the FTC substantial leeway in reviewing Mechanism compliance and taking "appropriate remedial action" against non-compliant Mechanisms. See § 2310(a)(4). The FTC is in the best position to determine whether strict compliance with some provisions in Rule 703 (e.g., the four-year record keeping requirement, 16 C.F.R. § 703.6(f)) may be less important than strict compliance with other provisions (e.g., the requirement that manufacturers act in good faith in deciding whether to accept the outcome proposed by a Mechanism arbitrator, id. § 703.5(j)). Similarly, the FTC can better assess when the volume of a Mechanism's irregularities rise to the level of non-compliance such that consumers need not exhaust the Mechanism before filing suit. The FTC has also expressed its desire to encourage "competition" and "experimentation" by warrantors in setting up and administering Mechanisms, and "would be loathe to take regulatory action likely to exert a chilling effect" on this process. 64 Fed.Reg. at 19,708. Strict enforcement by a court of any particular regulation could have the same chilling effect on warrantors' Mechanism experimentation or even warrantors' willingness to create Mechanisms. Thus, Mechanism compliance falls "particularly within the [FTC's] discretion," because the FTC is in the best position to balance consumers' needs with Congress's desire to encourage fair and expeditious settlement of consumer disputes. See § 2310(a)(1).
Finally, "there [is] a substantial danger of inconsistent rulings" that could compromise Congressional objectives underlying the MMWA. If warrantors must prove a Mechanism's compliance to trial courts *1050 anytime a consumer brings a claim under the MMWA, inconsistent rulings are virtually inevitable. Courts would create a national patchwork of Mechanism compliance decisions that companies would have to monitor and adapt to to ensure their own Mechanisms are deemed compliant when they assert § 2310(a)(3) exhaustion as a jurisdictional bar. This would raise the cost of compliance for warrantors and likely discourage companies from using Mechanisms to resolve consumer complaints. The FTC, by contrast, operates as the national clearinghouse for compliance standards. If all compliance decisions are rendered by the same agency, the standards will be more consistent and easy to identify. Congress explicitly declared its "policy to encourage warrantors to establish procedures whereby consumer disputes are fairly and expeditiously settled through informal dispute settlement Mechanisms." § 2310(a)(1). Because creating an inconsistent regulatory patchwork through the courts could compromise this policy, the FTC should remain the primary judge of a Mechanism's compliance with federal regulations.
In sum, given the statutory framework establishing the FTC as the principal authority on Mechanism compliance, the FTC is best suited to address challenges to Mechanism compliance in the first instance. Therefore, the FTC's compliance decisions deserve judicial deference under the primary jurisdiction doctrine. Maronyan's challenge to Toyota's Mechanism compliance status should have been directed to the FTC rather than the courts. See § 2310(a)(3). Because Maronyan has not demonstrated that the FTC regards Toyota's CDSP Mechanism as non-compliant with Rule 703 or applicable provisions of the MMWA, she must exhaust her warranty claims through Toyota's Mechanism before filing suit. Her failure to do so deprives the federal courts of jurisdiction over her claims arising under the MMWA.
NOTES
[*] The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R.App. P. 34(a)(2).
[1] We are aware of no other statutory pre-filing requirement similar to § 2310(a) of the MMWA that has been held to deprive a district court of subject matter jurisdiction.
[2] All nine other circuits to have considered § 1997e(a) also held that failure to exhaust did not deprive the district court of jurisdiction. See Anderson v. XYZ Correct'l Health Services, Inc., 407 F.3d 674, 677 (4th Cir. 2005); Richardson v. Goord, 347 F.3d 431, 433-34 (2d Cir.2003); Steele v. Fed. Bureau of Prisons, 355 F.3d 1204, 1206 (10th Cir.2003); Ali v. Dist. of Columbia, 278 F.3d 1, 5-6 (D.C.Cir.2002); Casanova v. Dubois, 289 F.3d 142, 147 (1st Cir.2002); Wright v. Hollingsworth, 260 F.3d 357, 358 n. 2 (5th Cir.2001); Curry v. Scott, 249 F.3d 493, 501 n. 2 (6th Cir.2001); Nyhuis v. Reno, 204 F.3d 65, 69 n. 4 (3d Cir.2000); Massey v. Helman, 196 F.3d 727, 732 (7th Cir.1999).
[3] Two of the three other circuits to have considered § 6912(e) held that it was not jurisdictional. See Dawson Farms, LLC v. Farm Serv. Agency, 504 F.3d 592, 606 (5th Cir.2007); Ace Prop. & Cas. Ins. Co. v. Fed. Crop Ins. Corp., 440 F.3d 992, 999 (8th Cir.2006). The only circuit to hold that it was jurisdictional is the Second. See Bastek v. Fed. Crop Ins. Corp., 145 F.3d 90, 94-95 (2d Cir.1998). The Fifth, Eighth, and Ninth Circuits soundly rejected the Second Circuit's erroneous presumption that statutory exhaustion requirements deprive district courts of subject matter jurisdiction. See Dawson Farms, 504 F.3d at 603; Ace Prop., 440 F.3d at 999; McBride, 290 F.3d at 980.
[4] The district court did not recognize that it had subject matter jurisdiction over Maronyan's claim and therefore could not address the validity of Toyota's failure to exhaust argument as an affirmative defense. The only issue properly before this court on appeal is thus the question of subject-matter jurisdiction. We remand to the district court to allow it to address any issues related to the assertion of the exhaustion defense in the first instance. See Cutter v. Wilkinson, 544 U.S. 709, 125 S.Ct. 2113, 2120 n. 7, 161 L.Ed.2d 1020 (2005) ("Because these defensive pleas were not addressed by the[court below], and mindful that we are a court of review, not first view, we do not consider them here.").
[1] The FTC refers to "informal dispute settlement procedures" authorized by the MMWA as "Informal Dispute Settlement Mechanisms" (IDSMs) or simply "Mechanisms." See 16 C.F.R. § 703.1(e); 64 Fed.Reg. 19700, 19701 (Apr. 22, 1999).
[2] The majority points out that the Court warned lower courts not to find jurisdictional limits unless the "Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional. . . ." Reed Elsevier, 130 S.Ct. at 1244 (quoting Arbaugh, 546 U.S. at 515-16, 126 S.Ct. 1235). However, Reed Elsevier concluded that the numerosity provision at issue in Arbaugh, after examining the text of the provision, is not jurisdictional because "the employee numerosity provision is located in a provision `separate' from" the jurisdiction section. Id. "Accordingly, the numerosity requirement could not fairly be read to `speak in jurisdictional terms or in any way refer to the jurisdiction of the district courts.'" Id. (quoting Arbaugh, 546 U.S. at 515, 126 S.Ct. 1235.). Here, unlike Arbaugh, the Mechanism exhaustion provision is incorporated into the jurisdictional provisions of the statute.
[3] The majority simply applies the "sweeping and direct language" standard from Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975). This is not the standard employed by the Supreme Court in Henderson, Arbaugh, or Zipes. To the extent "sweeping and direct language" is still the applicable standard, it has been refined to encompass (1) "speak[ing] in jurisdictional terms," (2) "refer[ing] in any way to the jurisdiction of the [courts]," or (3) conveying jurisdictional intent in the "context" of the statute. Henderson, 131 S.Ct. at 1204; Arbaugh, 546 U.S. at 516, 126 S.Ct. 1235; Zipes, 455 U.S. at 394, 102 S.Ct. 1127.
[4] The statute provides, in relevant part:
(2) The [FTC] shall prescribe rules setting forth minimum requirements for any informal dispute settlement procedure which is incorporated into the terms of a written warranty to which any provision of this chapter applies. . . .
(4) The Commission on its own initiative may, or upon written complaint filed by any interested person shall, review the bona fide operation of any dispute settlement procedure resort to which is stated in a written warranty to be a prerequisite to pursuing a legal remedy under this section. If the Commission finds that such procedure or its implementation fails to comply with the requirements of the rules under paragraph (2), the Commission may take appropriate remedial action under any authority it may have under this chapter or any other provision of law.
(5) Until rules under paragraph (2) take effect, this subsection shall not affect the validity of any informal dispute settlement procedure respecting consumer warranties, but in any action under subsection (d) of this section, the court may invalidate any such procedure if it finds that such procedure is unfair.
§ 2310(a) (emphasis added).
| {
"pile_set_name": "FreeLaw"
} |
95 Ill. App.2d 89 (1968)
238 N.E.2d 67
People of the State of Illinois, Plaintiff-Appellee,
v.
Charles Moore, Defendant-Appellant.
Gen. No. 51,983.
Illinois Appellate Court First District, Third Division.
April 18, 1968.
*90 *91 Gerald W. Getty, Public Defender of Cook County, of Chicago (Norman W. Fishman and James J. Doherty, Assistant Public Defenders, of counsel), for appellant.
John J. Stamos, State's Attorney of Cook County, of Chicago (Elmer C. Kissane and Alan S. Gersh, Assistant State's Attorneys, of counsel), for appellee.
MR. JUSTICE SCHWARTZ delivered the opinion of the court.
In a nonjury case the defendant was found guilty of attempted robbery, attempted murder and aggravated battery. He was sentenced to serve a term in the penitentiary of five to ten years on each count, the sentences to run concurrently.
On appeal the defendant raises three contentions which merit consideration: (1) that he was denied his right to a speedy trial pursuant to statute; (2) that he was not proven guilty beyond a reasonable doubt; and (3) that hearsay evidence tending to corroborate the testimony of a witness for the prosecution was improperly admitted. *92 We have decided to reverse and remand on the third point, but will first state our reasons for not reversing on Points One and Two.
On August 10, 1965, at 1:50 a.m., McDay Whitaker, a cabdriver, picked up two passengers, a man and woman, at the corner of 39th Street and Michigan Avenue, in Chicago. At the end of the trip the driver was robbed and shot by the man passenger. He was taken to a hospital by two police officers, and gave the policemen a description of his assailant as follows: male Negro, 140-145 lbs., 5' 8" or 9", wearing a black trench coat and hat. The description fitted the defendant.
On September 8, 1965, Jacqueline Young went to the police station and told Officer James Branick that she was the woman passenger who had accompanied the defendant on August 10, 1965, when he shot and robbed the cabdriver. Miss Young did not testify at the trial, but Officer Branick, for a reason which will be later considered, was permitted to testify as to what she had told him. On September 9, 1965, the cabdriver was called to police headquarters, where he identified the defendant as his assailant from a group of five or six photographs submitted to him by the police. On October 14, 1965, the defendant was arrested and has since been in custody.
We will first consider defendant's contention that he was denied a right to a speedy trial, as provided by statute. Ill Rev Stats, c 38, § 103-5 (1965). On May 31, 1966, the day preceding the four-term expiration date, a motion for extension of time was timely made by the State. The motion was allowed. On July 1, 1966, a motion for discharge was made by the defendant. The motion was denied and trial was had on July 5, 1966. Defendant contends that the court abused its discretion in granting the State's motion for continuance because the State had not exercised due diligence in locating the witness, although it had been given many continuances to enable it to do so.
*93 [1-3] The granting of continuances in and of itself is not an abuse of discretion. People v. Taylor, 82 Ill. App.2d 5, 226 NE2d 693. The fact that the witness for whose appearance the continuance was sought was not ultimately produced is not relevant. Whether the granting of a continuance was reasonable must be determined as of the time the motion was considered. People v. Canada, 81 Ill. App.2d 220, 225 NE2d 639. The State in its petition properly alleged the exercise of due diligence in its effort to procure the attendance of the witness. The testimony of Officer Branick at the trial substantiated this, and there was reasonable ground to believe that such evidence would be obtained in time for trial. The court's denial of the motion for discharge was not erroneous.
[4] We proceed to consider whether the defendant was proven guilty beyond a reasonable doubt. Whitaker the cabdriver identified the defendant as his assailant. At the time of the commission of the crime and shortly before, he was within a few inches of the defendant and in a well-lighted area. Defendant entered the cab from the left while it was at a gas station which was amply lighted. At the time of the shooting and while the driver was facing the robber, three lights were on in the cab one on the dashboard, one on the meter and one in the center of the cab. Whitaker not only gave a general description of the defendant, but was able to identify him positively out of five or six photographs submitted to him. He also identified him in open court. Jerome Wexler, one of the attorneys for defendant, who interviewed Whitaker and questioned him as to his identification of the defendant, testified that Whitaker said he could not say positively, "100%," that the defendant was the person. The credibility of witnesses is for the trier of fact to decide.
[5, 6] A conviction can be sustained on the testimony of a witness who has ample opportunity for observation and positively identifies the defendant. People v. Lamphear, *94 6 Ill.2d 346, 128 NE2d 892; People v. Martin, 62 Ill. App.2d 203, 210 NE2d 798. The testimony of Wexler is not of sufficient consequence to alter our conclusion that the evidence was adequate to sustain a finding of guilty beyond a reasonable doubt.
[7, 8] We proceed to consider the third point. Defendant contends that the court erroneously admitted the testimony of Officer Branick to a conversation he had with Miss Young, the woman passenger in the taxicab. The State acknowledges that the testimony was hearsay but contends that it was properly admitted in order to explain "certain procedures rather than for its truth or veracity." It appears that Officer Branick on cross-examination by the attorney for defendant was asked whether the reason he showed the photographs before mentioned to the driver was based on the police report or on the fact that a warrant had been issued for the defendant's arrest. Both questions were answered in the negative, and defense counsel went no further on this line of questioning. On redirect examination the State, over objection by defendant, questioned Branick as to conversations he had with Miss Young and elicited the following answer:
"On the 8th day of September I received information from Jacqueline Young, Charles Moore's ex-girl friend, that she was with Charles Moore the night of this occurrence and that he was the one that shot McDay Whitaker in a robbery attempt."
The only reasonable conclusion to be drawn from this questioning of Officer Branick by the State is that the testimony so elicited corroborated the testimony of the cabdriver, the one witness who had testified to the robbery. It was clearly prejudicial hearsay evidence. It is true that an exception to the admission of hearsay evidence applies when a line of questioning is opened up by *95 the adverse party. Testimony on behalf of the other party is then admissible to clarify the points touched upon. Such testimony will be limited to that which has a direct tendency to contradict or explain that which has been received. People v. Baker, 290 Ill. 349, 125 NE 263.
In examining Officer Branick about the basis for exhibiting the photographs to Whitaker, the only inquiry by the defendant was whether a police report or a warrant was the basis for Branick's action. There was no inquiry into the general procedures of the Police Department or the motivation of Officer Branick. The State could not use this as a basis for the introduction of hearsay evidence which did not contradict nor explain the testimony of the witness nor the inferences which might be drawn therefrom.
[9] The State argues that the case having been tried by the court without a jury, it will be presumed that the trial judge considered only competent evidence in arriving at his judgment. People v. Smith, 55 Ill. App.2d 480, 204 NE2d 577. It appears affirmatively however that the court did consider the evidence in question. The court said that he would not "deprive counsel of an opportunity to give the court some insight as to Jacqueline." This was reversible error as it bears directly on the vital issue of fact.
Other errors are charged, but they are not likely to recur on a new trial and need not be here considered.
The judgment is reversed and the cause is remanded for new trial, and for such other and further proceedings as are not inconsistent with the views herein expressed.
Judgment reversed and cause remanded with directions.
DEMPSEY, P.J. and SULLIVAN, J., concur.
| {
"pile_set_name": "FreeLaw"
} |
Case: 13-31199 Document: 00512564817 Page: 1 Date Filed: 03/18/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 13-31199 FILED
Summary Calendar March 18, 2014
Lyle W. Cayce
Clerk
Brian Simmons
Plaintiff-Appellant
v.
Honeywell International Inc.
Defendant-Appellee
Appeal from the United States District Court
for the Middle District of Louisiana
USDC No. 3:12-CV-674
Before BENAVIDES, CLEMENT, and OWEN, Circuit Judges.
PER CURIAM:*
Plaintiff Brian Simmons appeals summary judgment in favor of
Honeywell International Inc. (“Honeywell”) on tort claims arising out of
injuries incurred when Simmons was exposed to toxic fumes while upgrading
the air compression system at a Honeywell facility. Summary judgment is
proper if there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law. FED. R. CIV. P. 56(a). We review
* 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: 13-31199 Document: 00512564817 Page: 2 Date Filed: 03/18/2014
No. 13-31199
summary judgment de novo. Swope v. Columbian Chems. Co., 281 F.3d 185,
190 (5th Cir. 2002).
Simmons is a repair technician employed by Ingersoll-Rand, which was
contracted to provide certain services to Honeywell facilities. It is undisputed
that the relevant contract conferred upon Honeywell an employer status with
respect to Ingersoll-Rand employees performing any contracted services. The
existence of such a contract establishes a rebuttable presumption that
Honeywell was the statutory principal of Simmons for the purposes of the
Louisiana Workers’ Compensation Act. See LA. REV. STAT. ANN. § 23:1061.
Consequently, because no one disputes that Simmons was providing services
pursuant to the contract, he is presumptively limited to the remedies provided
by the state workers’ compensation system.
A plaintiff may rebut the statutory presumption of principal status by
showing that the work performed was not “an integral part of or essential to
the ability of the principal to generate that individual principal’s goods,
products, or services.” Id. § 23:1061(A)(1). Simmons argues that the
uninstalled air receiver he was servicing could not be “essential” to the facility’s
operation because the “plant was producing their [sic] products before, during,
and after” the work performed. This reasoning has already been rejected by
the Louisiana courts. See Everett v. Rubicon, Inc., 2004-1988 (La. App. 1 Cir.
6/14/06); 938 So. 2d 1032, 1041–43 (collecting cases and rejecting similar
reasoning offered by a cement contractor). Moreover, the unrebutted
testimony of the project manager indicates that, although the receiver
Simmons was servicing was not operating, that unit was part of a larger
system that was functioning and essential to the safe operation of Honeywell’s
production facility. Simmons has offered no evidence to the contrary. Given
the “expansive” and “liberal” reach of the statutory provision, the district court
correctly concluded that Simmons has provided no evidence that the system
2
Case: 13-31199 Document: 00512564817 Page: 3 Date Filed: 03/18/2014
No. 13-31199
and associated work were not integral and essential to the facility’s operation.
See Jackson v. St. Paul Ins. Co., 2004-0026 (La. App. 1 Cir. 12/17/04); 897 So.
2d 684, 689. Accordingly, Simmons has not overcome the presumption of
employer status.
Before the district court, Simmons also argued that the Louisiana
Workers’ Compensation Act does not apply because the alleged injury
“result[ed] from an intentional act.” See LA. REV. STAT. ANN. § 23:1032(B). Yet
Simmons did not plead this exception in his complaint, nor is there any
indication that Simmons has moved to amend. We further find the record
devoid of any facts sufficient to allege an intentional tort. Cf. Swope, 281 F.3d
at 194 (reversing summary judgment after finding that employer knew
employee was repeatedly being exposed to chemicals and might have known
“to a substantial certainty” that such exposure would result in physical harm).
Regardless, Simmons did not brief this court on the issue and has thus waived
the argument. FED. R. APP. P. 28(a)(9), (b).
Accordingly, for the reasons stated herein and in further detail by the
district court, summary judgment is AFFIRMED.
3
| {
"pile_set_name": "FreeLaw"
} |
United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT October 5, 2004
Charles R. Fulbruge III
Clerk
No. 03-41577
Summary Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
STANLEY NEELY,
Defendant-Appellant.
--------------------
Appeal from the United States District Court
for the Southern District of Texas
USDC No. C-02-CR-343-1
--------------------
Before GARZA, DeMOSS, and CLEMENT, Circuit Judges.
PER CURIAM:*
Following the denial of his motion to suppress and ensuing
bench trial, Stanley Neely was convicted of being a felon in
possession of a firearm and possession of an unregistered
firearm. Neely has appealed. He contends that evidence seized
after a protective sweep of the house at which he was arrested
should have been suppressed.
“In reviewing a ruling on a motion to suppress, this court
reviews questions of law de novo and factual findings for clear
*
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. 03-41577
-2-
error.” United States v. Jordan, 232 F.3d 447, 448 (5th Cir.
2000). We view the evidence in the light most favorable to the
prevailing party. Id. Where a police officer acts without a
warrant, the Government bears the burden of proving that the
search was valid. United States v. Castro, 166 F.3d 728, 733 n.6
(5th Cir. 1999) (en banc).
“A ‘protective sweep’ is a quick and limited search of
premises, incident to an arrest and conducted to protect the
safety of police officers or others. It is narrowly confined to
a cursory visual inspection of those places in which a person
might be hiding.” Maryland v. Buie, 494 U.S. 325, 327 (1990).
A “protective sweep may extend to areas of the home where the
police otherwise (i.e., apart from the protective sweep doctrine)
then have no right to go.” United States v. Gould, 364 F.3d 578,
587 (5th Cir. 2004) (en banc). “[T]he protective sweep must be
supported ‘by a reasonable, articulable suspicion’ . . . ‘that
the area to be swept harbors an individual posing a danger to’
those on the scene.” Id. at 587 (quoting Buie, 494 U.S. at
336–37; internal citation omitted).
Neely argues that the officers could not lawfully enter the
house because he was arrested outside of the house. “A
protective sweep of a suspect’s house may be made ‘even if the
arrest is made near the door but outside the lodging’ if the
arresting officers ‘have reasonable grounds to believe that there
are other persons present inside who might present a security
No. 03-41577
-3-
risk.’” United States v. Watson, 273 F.3d 599, 603 (5th Cir.
2001)(quoting United States v. Merritt,882 F.2d 916, 921 (5th
Cir. 1989)). The district court’s finding that Smith articulated
a reasonable basis for conducting a protective sweep of the house
was not clearly erroneous. See id.; see also United States v.
Wilson, 306 F.3d 231, 234, 237–39 (5th Cir. 2002).
Neely contends also that the scope of the search was too
broad and that it was not reasonable to search the entire house.
The arresting officer’s testimony reflects that the scope of the
search was limited to “places in which a person might be hiding.”
Buie, 494 U.S. at 327. The judgment is
AFFIRMED.
| {
"pile_set_name": "FreeLaw"
} |
In the
United States Court of Appeals
For the Seventh Circuit
No. 11-2224
M ICHAEL A. W ILLIS, et al.,
Plaintiffs-Appellants,
v.
W ILLIAM J. L EPINE, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 09 CV 4208—Joan Humphrey Lefkow, Judge.
A RGUED A PRIL 12, 2012—D ECIDED JULY 23, 2012
Before E ASTERBROOK, Chief Judge, and M ANION and
S YKES, Circuit Judges.
M ANION, Circuit Judge. Plaintiffs Michael Willis and
Kendrick Owens, 14 and 16 years old, respectively, were
arrested outside of Willis’s home for allegedly dealing
drugs. After being transported to the police station, Willis
and Owens claim that they were subjected to a strip
search before being confined for several hours. Willis
and Owens were released to their families after being
2 No. 11-2224
charged with conspiracy to deliver a controlled sub-
stance and were ordered to appear at juvenile court a
few weeks later. The charges, however, were eventually
dropped. Willis and Owens then filed this suit in
federal court against the two arresting officers, alleging
false arrest and an illegal search under 42 U.S.C. § 1983,
and malicious prosecution under Illinois state law. The
case went to trial, and a jury returned a verdict for
the defendant officers on all claims. The district court
denied the plaintiffs’ post-trial motions for relief from
judgment and for a new trial. Willis and Owens
appealed, asserting that the district court wrongly
denied their post-trial motions and that defense
counsel’s alleged violation of a motion-in-limine ruling
constitutes reversible error. We affirm.
I.
Michael Willis and Kendrick Owens, two teenaged
black males, were arrested in the evening hours of Febru-
ary 26, 2006, outside of Willis’s home located at 5531
West Congress Parkway in Chicago. Owens was a friend
of Willis’s who lived on the same block. The arresting
officers were William Lepine and Derek Glowacki; they
are the defendants in this case. At trial, the two sides
gave accounts that were, at many points, directly contra-
dictory. We begin with the plaintiffs’ account.
A. Plaintiffs’ Account
Willis was 14 years old when the incident occurred. He
lived in his grandmother’s home with several members
No. 11-2224 3
of his immediate and extended family. On the day of this
incident, Willis left his house a few minutes before
7:00 p.m. to retrieve a CD from his sister, who was
waiting for him in a car outside on the street. At the
same time that Willis was obtaining the CD, his distant
cousin, Brandon Thompson, a 22-year-old black male, ap-
proached the house. Thompson purportedly stopped by
to ask another cousin (who did not live at the house) to
trade basketball jerseys. After Willis retrieved the CD
from his sister, he and Thompson began chatting on the
front porch. A few minutes later, Owens, a 16-year-old
neighbor and friend of Willis’s, came strolling down
the street and joined in the conversation.
As the three young men talked on the porch, Owens saw
an unmarked police car drive by carrying the defendant
police officers dressed in plain-clothes attire. Owens
noted that one of the officers gestured like he was asking
for marijuana. Willis did not see the unmarked police car
drive by. Owens stated that the officers then returned
ten to fifteen minutes later, exited their vehicle, and
ordered the three young men off of the porch. Willis
estimated that the total time that the young men spent
talking before being interrupted by the officers was
somewhere between five and fifteen minutes.
When the young men reached the sidewalk outside of
Willis’s home, the officers handcuffed them to one
another and searched them. Officer Glowacki then ushered
Willis, Owens, and Thompson into the back of the police
car and ran their names through the computer system to
check for outstanding warrants. While Glowacki stayed
4 No. 11-2224
in the police car, Officer Lepine scoured the block with a
flashlight for approximately thirty minutes to an hour.
After Lepine returned, the two officers spoke outside of
the car. Owens heard one of the officers quietly say, “We
still got to take it in.” The two officers then got in the
car and drove the young men to the police station.
When they arrived at the station, the officers placed
the young men in a holding area. Ten to fifteen minutes
later, Officer Lepine walked in holding two plastic bags
containing pink or purple tablets. Lepine asked the
young men, “Which one of these do you all want?” All
three men said that they did not want either bag and,
moreover, that they had never possessed the bags.
Officers Lepine and Glowacki then donned rubber gloves
and ordered the young men to undress down to their
underwear. The officers allegedly searched through all
of their clothing and then instructed the young men
to remove their underwear, lift their testicles, spread
their buttocks, and cough. After the search revealed no
contraband, the officers confined the young men. Willis
and Owens, as minors, were placed in one holding cell
while Thompson was placed in another. Willis and
Owens were then released to their families around mid-
night. It was at that time that they first learned that
they were being charged with conspiracy to deliver a
controlled substance. They were also ordered to report
to juvenile court in three weeks on March 20, 2006.
B. Defendants’ Account
Officers Lepine and Glowacki told a much different
story. They testified that they were on patrol when they
No. 11-2224 5
received a dispatch at 6:49 p.m., stating that a citizen
had reported that a black male was selling drugs at
5528 West Congress Parkway (an address just a few
houses down from Willis’s residence at 5531 West Con-
gress), and that the drugs were hidden in a nearby
vacant lot. In addition to giving the seller’s race and sex,
the report described the seller as approximately 5'7",
165 pounds, wearing a black hat, black coat, blue jeans,
and black gym shoes with a white stripe. The officers
did not respond immediately, estimating that they
arrived at the 5500 block of West Congress at 7:35 p.m.
Importantly, this estimated arrival time was based on
a police report that the officers submitted after the fact.
At trial, Lepine testified that he and Glowacki recorded
the approximate time that they arrived on the scene
only after they had returned to the police station.
After their arrival, the officers drove down the block,
noting that Willis, Owens, and Thompson were standing
in the street and further observing that Thompson
had a white stripe on his shoes as described by the dis-
patch report. The officers also noticed a vacant lot
just a few lots removed from where the three men were
standing. Given these similarities to the report’s descrip-
tions, the officers decided to park on a street north of
West Congress and then head back on foot to survey
the scene. The officers’ presence went unnoticed by the
young men because they confined their movements to
the narrow gangways that separated the buildings on
the north side of West Congress (the gangways they
used were between 5530 and 5534 West Congress). From
their surveillance positions, the officers testified that
6 No. 11-2224
they saw Thompson twice take money from individuals,
walk to the vacant lot, and return with items that the
officers believed to be drugs. Additionally, the officers
claim that they heard Willis and Owens each yell “X”
(slang for the drug Ecstasy) to passing cars and “police”
when a marked police car drove down the block.
After observing the second alleged drug transaction,
the officers returned to their car and drove back to the
5500 block of West Congress. The officers arrested the
three young men for conspiracy to sell narcotics, and
Lepine immediately searched the vacant lot for the drug
stash. He testified that he returned less than five
minutes later having found one plastic bag containing
nineteen Ecstasy pills. Lepine asserted that he did not
search the block any further.
The officers radioed dispatch at 7:41 p.m. to report that
they had arrested and were transporting Willis, Owens,
and Thompson. The officers testified that after they
arrived at the police station, they conducted a custodial
search of the three young men—notably finding $114 in
cash on Thompson—and then placed Thompson in one
holding cell and the two minors, Willis and Owens, in
another. The officers denied strip-searching the young
men or holding up two bags of pills and asking them
which bag they wanted. The officers then wrote up the
arrest report and received approval for the charges
of conspiracy to manufacture or distribute a controlled
substance. The officers also contacted Willis’s and
Owens’s families, and, after fingerprinting and photo-
graphing the three young men, the officers released
No. 11-2224 7
Willis and Owens into their families’ custody at approxi-
mately 11:30 p.m.
C. Procedural Background
As ordered, Willis and Owens, along with their mothers,
went to juvenile court on March 20, 2006. Maintaining
their innocence, Willis and Owens rejected a deal that
would have dismissed the charges after they had com-
pleted 300 hours of community service. Nevertheless,
the charges were eventually dismissed. Thompson, who
was charged with delivery of a controlled substance,
pleaded guilty.
Willis and Owens then filed this suit in federal district
court against officers Lepine and Glowacki, alleging
false arrest and illegal search claims under 42 U.S.C. § 1983,
and a malicious prosecution claim under Illinois state
law. The case went to trial on January 11, 2011. Before
trial, however, the plaintiffs filed two motions in limine:
(1) to bar evidence that made reference to the 5500 block
of West Congress Parkway as a “high-crime area”; and
(2) to bar evidence of Thompson’s prior arrests and
convictions (including his latest guilty plea in the under-
lying criminal case). The district court judge granted
both of the plaintiffs’ motions.
At trial, plaintiffs’ counsel went to great lengths to
establish Willis and Owens as young men of impeccable
character. Indeed, the plaintiffs assert in their appellate
brief that “[t]he whole thrust of plaintiffs’ case at trial was
the credibility of the plaintiffs.” To that end, the plain-
8 No. 11-2224
tiffs put on evidence of their exemplary community
service, strong family ties, abstinence from illicit drug
sales and use, and general law-abiding behavior.
Following a three-day trial the jury returned a verdict
for the defendants on all counts.
The plaintiffs then filed two post-trial motions: one
under Federal Rule of Civil Procedure 60(b)(3) for relief
from judgment; and one under Rule 59(a) for a new trial.
In their Rule 60(b)(3) motion, the plaintiffs argued that
the trial was unfair because defense counsel had made
an improper speaking objection during the plaintiffs’
rebuttal argument in summation, and because defense
counsel had allegedly violated the motion-in-limine
ruling that prohibited any mention of Thompson’s
arrests and convictions. The plaintiffs’ Rule 59(a) mo-
tion was skeletal: the two-page brief incorporated by
reference the arguments set forth in the Rule 60(b)(3)
motion memorandum and then, in a rather perfunctory
manner, recited the Rule 59(a) standard for determining
when a new trial is warranted. The district court denied
both motions, and the plaintiffs appealed.
II.
The plaintiffs’ appeal focuses primarily on the district
court’s denial of their post-trial motions; however, they
also contend that the district court erred by repeatedly
allowing defense counsel to violate the motion-in-
limine order not to reference the 5500 block of West
Congress as a “high-crime area.” We will address each
in turn.
No. 11-2224 9
A. Rule 60(b)(3) Motion for Relief from Judgment
We review a district court’s decision to deny a Rule 60(b)
motion for relief from judgment for an abuse of discre-
tion. Wickens v. Shell Oil Co., 620 F.3d 747, 758 (7th Cir.
2010) (citing Musch v. Domtar Indus., Inc., 587 F.3d 857, 861
(7th Cir. 2009)). We are mindful of the fact that “ ‘[a]buse of
discretion’ in cases under Rule 60(b) is restricted review
indeed. It limits review to cases in which no reasonable
person could agree with the district court’s decision.”
Tolliver v. Northrop Corp., 786 F.2d 316, 318 (7th Cir. 1986)
(citation omitted). Accordingly, “ ‘[i]t is well-established
that Rule 60(b) relief is an extraordinary remedy and is
only granted in exceptional circumstances.’ ” Wickens, 620
F.3d at 759 (quoting Dickerson v. Bd. of Educ., 32 F.3d 1114,
1116 (7th Cir. 1994)).
Rule 60(b) lists several reasons for which a court may
grant relief from a final judgment, order, or proceeding.
Fed. R. Civ. P. 60(b). Subsection (3), the provision on
which the plaintiffs rely, allows for relief in the case of
“fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party.”
Fed. R. Civ. P. 60(b)(3). “To obtain relief under Rule
60(b)(3), a party must show that she has a meritorious
claim that she was prevented from ‘fully and fairly pre-
senting’ at trial as a result of the adverse party’s fraud,
misrepresentation, or misconduct.” Wickens, 620 F.3d at
758-59 (citations omitted). Here, the plaintiffs’ motion
focused on alleged incidents of misrepresentation and
misconduct by defense counsel at trial.
The plaintiffs first complain that defense counsel
made an improper speaking objection during plaintiffs’
10 No. 11-2224
counsel’s rebuttal argument at summation. The exchange,
in relevant part, went as follows:
Plaintiffs’ Counsel: Each one of these plaintiffs’
witnesses, including the plaintiffs, got on the stand
and told you who they are. They’re working people.
They’re honest people. You didn’t hear anything
about anyone having a criminal record or back-
ground or anything negative about anybody. They
came and told you the truth. And that’s all we can
do in our system. That’s all we can do. We have this
building, we have a judge, we have a jury so we can
come and tell you what happened. And the ridicule
that [defense counsel] gives about this neighborhood.
If these kids were bad kids, you’d know. He would
have wanted you to know that they were doing
drugs and were gangbangers and they were doing
drugs and—
Defense Counsel: Objection, your Honor. We’re not
allowed to introduce that, and counsel knows that.
She threw that in the opening close, and she threw it
in again. We can’t bring that to the jury.
Plaintiffs’ Counsel: Your Honor, I object to that
statement. There is nothing here.
The Court: All right. I overrule the objection. Go
ahead.
Plaintiffs’ Counsel: Thank you. If there were negative
things, you would have heard about them. We have
got positive things. Good family, church, jobs, and
he’s complaining about that. He said this is embel-
lishing.
No. 11-2224 11
The plaintiffs contend on appeal that defense counsel’s
objection was a knowing and deliberate attempt to
suggest to the jury that there was evidence—which had
not been produced during the trial—that Willis and
Owens were either drug dealers or “gangbangers.” This
improper suggestion, the plaintiffs argue, prevented
them from receiving a full and fair opportunity to
present their case.
As the district court noted, defense counsel’s objection
implied that there was evidence, which had been barred
from trial, that the plaintiffs were drug dealers or
gangbangers. But the court had not excluded any
evidence of the sort; defense counsel’s suggestion to the
contrary was, as the district court correctly observed,
“highly improper.”
Yet we hasten to note that this objection occurred
at closing—after the plaintiffs had put forth their
evidence during the trial. “A new trial is warranted only
if allegedly improper closing remarks depart from the
evidence presented at trial and result in substantial
prejudice to the opposing party.” Jones v. Lincoln Elec. Co.,
188 F.3d 709, 731 (7th Cir. 1999) (citing Marshall v. Porter
Cnty. Plan Comm’n, 32 F.3d 1215, 1221 (7th Cir. 1994)).
Accordingly, as “ ‘[t]his court has repeatedly explained[,]
improper comments during closing argument rarely rise
to the level of reversible error.’ ” Soltys v. Costello, 520
F.3d 737, 745 (7th Cir. 2008) (quoting Miksis v. Howard,
106 F.3d 754, 764 (7th Cir. 1997)). We believe that this
axiom applies with equal force to improper speaking
objections made at closing argument. This is especially
12 No. 11-2224
true where, as here, any prejudicial effect that the
improper remarks may have had on the jury is quickly
cured. In this case, the plaintiffs’ counsel immediately
replied to the objection, “there’s nothing here,” the judge
agreed, and the plaintiffs’ counsel was able to continue
making her argument. Moreover, the judge’s instruction
to the jury that statements made by the attorneys are
not evidence was sufficient to remedy any harm that
may have been caused by defense counsel’s objections.
These instructions were given both before and after
closing arguments. Because we presume that the jury
follows the court’s instructions, id. (citing Chlopek v. Fed.
Ins. Co., 499 F.3d 692, 702 (7th Cir. 2007)), such “curative
instructions to the jury mitigate harm that may other-
wise have resulted from improper [objections].” Id. (citing
Jones, 188 F.3d at 732). Defense counsel’s objection
during summation did not prevent the plaintiffs from
fully and fairly presenting their case.
The plaintiffs next argue that defense counsel asked
numerous questions at trial that violated the
court’s motion-in-limine ruling that barred all evidence
of Thompson’s prior arrests and convictions. Specifically,
defense counsel asked the plaintiffs whether Thompson
was a plaintiff in this case or whether Thompson had filed
his own lawsuit. Defense counsel also asked the plaintiffs
about why Thompson was in the neighborhood at the
time of the arrest and why Thompson was not called as
a witness. The plaintiffs argue that defense counsel’s
violation of the court’s ruling prevented them from
fully and fairly presenting their case.
No. 11-2224 13
As the district court noted, defense counsel’s inquiries
about Thompson’s absence from this case were arguably
improper because the answers to such questions could
have alerted the jury to Thompson’s arrest and subse-
quent confession to dealing drugs (which was, of course,
the precise thing that was precluded by the motion
in limine). But we are not convinced that those ques-
tions prevented the plaintiffs from fully and fairly pre-
senting their case. As the district court noted, it was the
plaintiffs’ own trial strategy that led to Thompson’s
absence from the case. This left the jury to wonder why
such a key figure—the plaintiffs’ fellow arrestee, no
less—was conspicuously absent from the case. In light of
the officers’ testimony, it would not have been a stretch
for the jury to conclude that it was Thompson whom
the officers had observed selling drugs. Thus, defense
counsel’s questions simply highlighted (albeit improp-
erly) an already obvious gap in the plaintiffs’ case.1 Those
1
The plaintiffs point to a juror’s note, discovered by plaintiffs’
counsel after the trial, as evidence that defense counsel’s
questions about Thompson prevented the plaintiffs from fully
presenting their case. The note asked, “Can we find out what
was the disposition of the Brandon Thompson case?” As we just
noted, however, this is a reasonable question that a diligent juror
might ask when a main person from the case’s narrative is
absent from the case. It does not suggest that the jury’s thoughts
were tainted due to defense counsel’s inquiries about Thomp-
son. And aside from that, with exceptions not relevant here
Federal Rule of Evidence 606(b) clearly prohibits the court
from introducing any material that evinces how the jury arrived
(continued...)
14 No. 11-2224
questions did not deny the plaintiffs an opportunity to
fully and fairly present their case.
Questions about Thompson’s activities on the block
were not improper at all; indeed, they were inevitable
because Thompson’s participation was a key part of the
story. The plaintiffs admit that Thompson was with
them in front of Willis’s home and that all three of them
were arrested and transported to the police station to-
gether. Plaintiffs’ counsel obviously recognized the need
to explain Thompson’s presence, and so she elicited
testimony from Willis that Thompson was on the 5500
block of West Congress Parkway for the sole purpose
of trading a basketball jersey. What is more, on di-
rect examination plaintiffs’ counsel pointedly asked
Willis whether he “was involved in a drug transaction on
February 26, 2006,” and asked Owens whether he was
“helping Brandon Thompson sell drugs on your block.”
The plaintiffs each denied any involvement in drug
sales. This testimony directly contradicted the defen-
dants’ version of events, which was highlighted by the
officers’ observation of Thompson’s drug transactions
as well as by Willis’s and Owens’s alleged participation
in soliciting those transactions. It was thus appropriate
for defense counsel to cross-examine the plaintiffs
with questions concerning Thompson’s activities on the
block, and therefore the district court’s decision to
1
(...continued)
at its verdict. See United States v. Berry, 92 F.3d 597, 601 (7th
Cir. 1996).
No. 11-2224 15
allow such questioning cannot provide the basis for
relief from judgment.
In sum, the district court did not abuse its discretion
in denying the plaintiffs’ Rule 60(b)(3) motion for relief
from judgment because defense counsel’s speaking ob-
jection at summation did not prevent the plaintiffs
from fully and fairly presenting their case at trial. And
defense counsel’s questions about Thompson’s involve-
ment in this or any other lawsuit did not affect the plain-
tiffs’ ability to fully and fairly present their case. More-
over, questions about Thompson’s activities on the block
were reasonable given plaintiffs’ counsel’s own line of
questioning. Accordingly, the plaintiffs are not entitled
to the extraordinary remedy of relief from judgment.
B. Rule 59(a) Motion for New Trial
As we noted above, the plaintiffs’ motion for a new
trial was quite barren. The plaintiffs recited the standard
set forth in Rule 59(a), and then merely incorporated
by reference the same attorney-misconduct arguments
made in their motion for relief from judgment. After
again reciting the Rule 59(a) standard, the plaintiffs
requested that the court order a new trial as an alterna-
tive to setting aside the judgment. The district court
examined the plaintiffs’ Rule 60(b)(3) and Rule 59(a)
motions together because they contained identical argu-
ments and because “the applicable legal standards
are substantially the same.”
The plaintiffs now contend that the district court erred
in two respects. First, they argue, the district court mis-
16 No. 11-2224
takenly held that the two legal standards were
sufficiently similar such that the motions could be con-
strued together. Second, as a result of the court’s alleged
failure to apply the correct standard, the plaintiffs argue
that the district court failed to address whether the
jury’s verdict went against the manifest weight of the
evidence.
We review de novo the issue of whether the district
court applied the proper legal standard in analyzing a
Rule 59(a) motion for a new trial. Baptist v. City of
Kankakee, 481 F.3d 485, 490 (7th Cir. 2007). A court may
only order a new trial if the jury’s “ ‘verdict is against the
manifest weight of the evidence, . . . or if for other
reasons the trial was not fair to the moving party.’ ” Marcus
& Millichap Inv. Servs. v. Sekulovski, 639 F.3d 301, 313
(7th Cir. 2011) (quoting Pickett v. Sheridan Health Care
Ctr., 610 F.3d 434, 440 (7th Cir. 2010)). Here, the plaintiffs’
threadbare Rule 59(a) motion did not develop any argu-
ments about how the jury’s verdict went against the
manifest weight of the evidence. Instead, the plaintiffs
relied exclusively on the attorney-misconduct arguments
from their Rule 60(b)(3) motion. So the only argument
that the district court had to consider on the plaintiffs’
Rule 59(a) motion is that defense counsel’s misconduct
resulted in an unfair trial. As we have held before,
“ ‘[t]he misconduct of counsel justifies a new trial where
that misconduct prejudiced the adverse party.’ ” Davis v.
FMC Corp., 771 F.2d 224, 233 (7th Cir. 1985) (quoting
Wiedemann v. Galiano, 722 F.2d 335, 337 (7th Cir.
1983)). This standard is indeed substantially similar to
Rule 60(b)(3)’s “fully-and-fairly” standard; therefore, the
No. 11-2224 17
district court did not err in examining the two motions
together. And for the reasons set forth in the previous
section, the court did not err in refusing to grant a
new trial.
But the plaintiffs maintain that the district court
should have also considered whether the jury’s verdict
was against the manifest weight of the evidence. Yet as
we noted above, the plaintiffs failed to develop any
arguments before the district court that the jury’s verdict
was against the manifest weight of the evidence. Merely
reciting the Rule 59(a) standard and then tossing the
motion into the court’s lap is not enough. “Failure to
adequately present an issue to the district court waives
the issue on appeal.” Kunz v. DeFelice, 538 F.3d 667, 681
(7th Cir. 2008) (citing Belom v. Nat’l Futures Ass’n, 284
F.3d 795, 799 (7th Cir. 2002)). Thus, the plaintiffs have
waived any argument that the jury’s verdict went
against the manifest weight of the evidence.
Even if the plaintiffs had not waived that argument,
however, the jury’s verdict was not against the manifest
weight of the evidence. When considering whether
the jury’s verdict goes against the manifest weight of the
evidence, a court analyzes the “general sense of the
evidence, assessing the credibility of the witnesses and
the comparative strength of the facts put forth at trial.”
Mejia v. Cook Cnty., 650 F.3d 631, 633 (7th Cir. 2011) (cita-
tions omitted). But “[a] verdict will be set aside as
contrary to the manifest weight of the evidence only if
‘no rational jury’ could have rendered the verdict.” Moore
ex rel. Estate of Grady v. Tuelja, 546 F.3d 423, 427 (7th
18 No. 11-2224
Cir. 2008) (quoting King v. Harrington, 447 F.3d 531, 534
(7th Cir. 2006)). Moreover, “[j]ury verdicts deserve par-
ticular deference in cases with ‘simple issues but
highly disputed facts.’ ” Id. (quoting Latino v. Kaizer, 58
F.3d 310, 314 (7th Cir. 1995)).
Here, the plaintiffs argue that the timeline offered by
the defendants regarding the surveillance, arrest, and
transportation of Willis, Owens, and Thompson was
physically impossible and therefore that no rational jury
could have believed the defendants’ story. Further, the
plaintiffs assert that Thompson’s appearance was so
dissimilar to the description of the alleged drug dealer
provided to the defendants by the dispatcher—specifi-
cally, that the only matching characteristic was the
white stripe on his shoes—that no rational jury could
believe that the officers had a legitimate basis for
arresting Thompson, Willis, and Owens. Finally, the
plaintiffs dispute the defendants’ contention that the
defendants conducted surveillance from a gangway
between 5530 and 5534 West Congress Parkway
because two Rottweilers often patrolled that area and
would have alerted bystanders had the officers actually
accessed that gangway.
The jury’s construction of this evidence was rational.
The plaintiffs had ample opportunity to cross-examine
the defendants on their timeline—the defendants ex-
plained that the times listed on their police reports were
estimates and that actual events may have taken longer
to unfold. This is a reasonable explanation that the
jury obviously credited over the plaintiffs’ version of
No. 11-2224 19
events. The plaintiffs’ argument that the defendants
unreasonably relied on the white stripe on Thompson’s
shoe as the sole basis for arresting both him and the
plaintiffs is also unavailing. The officers’ observation of
the white stripe on Thompson’s shoe was not a sole
basis for arrest—rather, it was a factor that they used
in their decision to conduct surveillance. When
conducting that surveillance, the defendants testified
that they observed Thompson engage in two drug trans-
actions (with the alleged assistance of Willis and
Owens). Only then did the officers arrest Thompson,
Willis, and Owens. The jury evidently gave this account
credence—which it was entitled to do—and thus reason-
ably concluded that the officers had probable cause to
arrest the plaintiffs. And finally, no witness at trial could
confirm that the two Rottweilers were actually in the
gangway on the evening of February 26, 2006, so the
plaintiffs never established that the defendants had to
contend with the two aggressive dogs while conducting
their surveillance. At bottom, the defendants’ explana-
tions for these possible deficiencies in their story are
reasonable. The plaintiffs tell a contradictory story that
certainly made this a case with “ ‘simple issues but highly
disputed facts.’ ” Tuelja, 546 F.3d at 427 (quoting Latino,
58 F.3d at 314). The jury reasonably sorted out the con-
flicting testimony.
The district court properly construed the plaintiffs’
Rule 60(b)(3) and Rule 59(a) motions together and
rightly concluded that a new trial was not warranted. And
because the plaintiffs failed to advance any argument
20 No. 11-2224
that the jury’s verdict was against the manifest weight
of the evidence, the district court did not err in refusing
to consider the trial evidence under that standard.
Finally, even if the plaintiffs had properly presented that
argument to the district court, the jury’s verdict was
nevertheless based on a rational construction of the
evidence.
C. Motion in Limine Barring Mention of
“High-Crime Area”
The plaintiffs contend that it was error for the district
court to allow defense counsel to continually violate
the motion-in-limine ruling that prohibited any reference
to the 5500 block of West Congress Parkway as a “high-
crime area.” Although the plaintiffs concede that
defense counsel did not use the phrase “high-crime area,”
the plaintiffs argue that defense counsel repeatedly
referred to the block as a high-drug area and otherwise
insinuated that the block was infected with criminal
behavior. Although the plaintiffs highlight several in-
stances during the trial during which they believe that
defense counsel violated the motion-in-limine ruling,
the plaintiffs objected to just two of those instances. We
review the district court’s ruling in those two instances
for an abuse of discretion. Bogan v. City of Chicago, 644
F.3d 563, 571 (7th Cir. 2011) (citation omitted). Besides
those two instances, the plaintiffs also contest three
other occasions where defense counsel allegedly violated
the court’s motion-in-limine ruling. But the plaintiffs
did not object to these three other alleged violations, so
No. 11-2224 21
the plaintiffs have not preserved this argument for
appeal. Bankcard Am., Inc. v. Universal Bancard Sys., Inc.,
203 F.3d 477, 482 (7th Cir. 2000).
We begin with the two instances where the plaintiffs
objected at trial and thus preserved their argument for
appeal. The first alleged violation of the motion-in-limine
ruling occurred when defense counsel was questioning
Willis:
Defense Counsel: You have seen people waving down
cars on your block, haven’t you?
Willis: Yes, I have, but I don’t know what they are
doing.
Defense Counsel: You have seen them, but you
don’t know what they are doing.
Willis: No.
Defense Counsel: And you have seen them more
than once, haven’t you?
Willis: I don’t know.
Defense Counsel: And your mother has told you
that if you see them on the corner, you just cross the
street, right?
Willis: Yes.
Defense Counsel: Would it be fair to say that you
know that they are up to no good with what they are
doing?
Willis: Yeah. I don’t know what they are doing, but
they got to be if you told me that.
22 No. 11-2224
Defense Counsel: Well do you believe that the
people that you are seeing wave down cars and doing
these things on your block are up to no good? Do
you believe that?
Plaintiffs’ Counsel: I’m going to object. Could we
have a sidebar?
The Court: All right. I’ll sustain the objection. It is not
consistent with his testimony.
Defense Counsel: These things that you see, these
are going on right around your house, aren’t they?
Willis: Yes.
Defense Counsel: That’s all I have, Judge.
Although it is not entirely clear from the transcript, plain-
tiffs’ counsel was presumably objecting to defense coun-
sel’s continued inquiry into the depth of Willis’s knowl-
edge of suspicious behavior in the neighborhood.
The district court sustained plaintiffs’ counsel’s objec-
tion—although not on motion-in-limine grounds—and
defense counsel finished his examination of Willis
after asking a question about the proximity of the suspi-
cious behavior to his house.
It was appropriate for the district court to allow
defense counsel to probe the depth of Willis’s knowledge
of drug sales and drug-selling techniques on the block.
After all, the plaintiffs’ defense was based on their igno-
rance of such matters. Once defense counsel had
pursued this line of questioning to its limit, the district
court sustained an objection to further inquiry and the
examination promptly concluded. This line of ques-
No. 11-2224 23
tioning did not violate the motion-in-limine ruling, and
therefore district court did not abuse its discretion.
The second alleged violation of the motion-in-
limine ruling occurred when defense counsel questioned
Michael Willis’s mother, Janice Jones-Willis. Specifically,
on cross-examination, defense counsel asked Jones-Willis
about her knowledge of drug activity on the block and
about how many times she had contacted police while
exercising her role as a community representative. Plain-
tiffs’ counsel objected to this line of questioning, but
the district court overruled that objection. We note that,
on direct examination, Jones-Willis had testified that
she was a community representative who knew the
neighborhood well—“[w]ell enough to know if something
was going on in front of my house, [the neighbors]
would know to call me, either on my cell or on my
home phone.” Given this testimony, it was proper for
the district court to allow defense counsel to test Jones-
Willis’s knowledge of drug activity on her block. And
when defense counsel pressed Jones-Willis to give an
estimate of the number of times that she had called
police concerning drug activity on her block, the district
court instructed counsel to “[m]ove on.” This line of
questioning did not violate the motion-in-limine
ruling and, therefore, the district court did not abuse
its discretion.
The plaintiffs also point to three other instances at trial
in which they assert that defense counsel violated the
court’s motion-in-limine ruling. But as we noted above,
the plaintiffs failed to object to these instances and thus
24 No. 11-2224
have not preserved this argument for review. If this
were a criminal case, we would readily analyze the plain-
tiffs’ arguments under the plain error standard of review.
But the plain-error doctrine “is rarely applied in civil
cases.” Tuelja, 546 F.3d at 430 (citing Stringel v. Methodist
Hosp. of Ind., Inc., 89 F.3d 415, 421 (7th Cir. 1996)). Indeed,
“[p]lain error is only available in civil cases if a party can
demonstrate that: (1) exceptional circumstances exists;
(2) substantial rights are affected; and (3) a miscarriage
of justice will occur if plain error review is not applied.”
Id. (citations omitted). The plaintiffs are not able to
show any error at all, let alone satisfy any of these ele-
ments.
The three alleged violations of the motion-in-limine
ruling to which the plaintiffs point all involve defense
counsel’s inquiries into drug activity on the block. The
plaintiffs essentially ask us to conclude that questions
about drug activity on the block are synonymous with
painting the block as a “high-crime area.” But this is
not what the motion-in-limine ruling prohibited. Rather,
the court’s ruling “bar[red] references to the 5500 block
of West Congress Parkway as a high-crime area.” In
keeping with the district court’s ruling, defense counsel
never referred to the block as a “high-crime area.” And
counsel was certainly entitled to elicit testimony about
the block’s characteristics. Indeed, establishing the fre-
quency of drug activity on the block was relevant
because the underlying charges were drug-related and
the plaintiffs denied any knowledge of drug activity on
their block. If the defense was able establish frequent
drug activity (or, much more, the plaintiffs’ knowledge
No. 11-2224 25
of drug activity), that evidence would tend to discredit
the plaintiffs’ testimony—a necessary tactic in a case
where the parties gave disparate accounts of the events.
Accordingly, the district court did not err in allowing
defense counsel to question witnesses about drug
activity on the block and we need not conduct a review
for plain error.
The district court did not abuse its discretion by
allowing defense counsel to question Willis and Jones-
Willis about their knowledge of drug activity on the
5500 block of West Congress Parkway. The plaintiffs
failed to preserve their argument that other instances
in which defense counsel questioned witnesses about
drug activity on the block violated the district court’s
motion-in-limine ruling. And because such questioning
was proper, we will not employ the plain-error doctrine.
III.
The district court did not abuse its discretion in
denying the plaintiffs’ Rule 60(b)(3) motion for relief
from judgment because defense counsel’s speaking ob-
jection at summation did not prevent the plaintiffs from
fully and fairly presenting their case at trial. Further,
defense counsel’s questions about Thompson’s involve-
ment in this or any other lawsuit did not affect the plain-
tiffs’ ability to fully and fairly present their case, and
questions about Thompson’s activities on the block
were reasonable given plaintiffs’ counsel’s own line of
questioning. The district court thus properly denied the
plaintiffs’ Rule 60(b)(3) motion.
26 No. 11-2224
The district court also did not err in construing the
plaintiffs’ Rule 60(b)(3) motion and Rule 59(a) motion
together because the plaintiffs made identical attorney-
misconduct arguments in each motion. And because
the plaintiffs did not argue that the jury’s verdict went
against the manifest weight of the evidence in their
Rule 59(a) motion, they have waived that argument on
appeal. Further, even if the district court had considered
the plaintiffs’ argument, the jury’s verdict was based on
a reasonable construction of the evidence and thus did
not go against the manifest weight of the evidence.
Finally, the district court did not abuse its discretion
by allowing defense counsel to question Willis and Jones-
Willis about their knowledge of drug activity on the
5500 block of West Congress Parkway. The plaintiffs also
failed to preserve their argument that other instances
in which defense counsel questioned witnesses about
drug activity on the block violated the district court’s
motion-in-limine ruling. Such questioning was proper
in any event, so we will not review the plaintiffs’ argu-
ment under the plain-error doctrine. For these reasons,
we A FFIRM .
7-23-12
| {
"pile_set_name": "FreeLaw"
} |
United States Court of Appeals
For the Eighth Circuit
___________________________
No. 14-2220
___________________________
David Zink,
lllllllllllllllllllll Plaintiff - Appellant,
Michael S. Worthington; John E. Winfield,
lllllllllllllllllllll Plaintiffs
Leon Taylor; Walter T. Storey; Earl Ringo; Roderick Nunley,
lllllllllllllllllllll Plaintiffs - Appellants,
John C. Middleton,
lllllllllllllllllllll Plaintiff,
Paul T. Goodwin; Andre Cole; Reginald Clemons; Cecil Clayton; Mark
Christeson; Russell Bucklew; David Barnett,
lllllllllllllllllllll Plaintiffs - Appellants,
Richard Strong; Marcellus S. Williams,
lllllllllllllllllllllIntervenors,
v.
George A. Lombardi; David R. Dormire; Terry Russell; John Does, 2-40,
lllllllllllllllllllll Defendants - Appellees.
____________
Appeal from United States District Court
for the Western District of Missouri - Jefferson City
____________
Submitted: September 9, 2014
Filed: March 6, 2015
[Published]
____________
Before RILEY, Chief Judge, WOLLMAN, LOKEN, MURPHY, BYE, SMITH,
COLLOTON, GRUENDER, SHEPHERD, and KELLY, Circuit Judges, En Banc.
____________
PER CURIAM.1
Several prisoners sentenced to death in Missouri appeal the district court’s2
dismissal of their complaint challenging the lethal-injection protocol of the Missouri
Department of Corrections. The prisoners sued state officials who are charged with
planning, supervising, and carrying out executions, and two independent contractors
who allegedly have prescribed, produced, or tested the compounded pentobarbital
used in the State’s current lethal-injection protocol. They sought a declaratory
judgment that the lethal-injection protocol violates the Constitution of the United
States, the Missouri Constitution, several provisions of state law, and Missouri
common law, and an injunction that prevents the defendants from executing them in
accordance with the protocol.
1
Chief Judge Riley and Judges Wollman, Loken, Smith, and Gruender join this
opinion. Judge Colloton joins all but Part II.A of this opinion. Judge Shepherd joins
all but Part II.B of this opinion.
2
The Honorable Beth Phillips, United States District Judge for the Western
District of Missouri.
-2-
I.
This litigation commenced in 2012 when the prisoners challenged what was
then a new lethal-injection protocol. In prior years, Missouri’s lethal-injection
protocol involved the administration of three drugs: “[S]odium thiopental to
anesthetize the prisoner and render him unconscious, pancuronium bromide to
paralyze him and stop his breathing, and potassium chloride to stop the prisoner’s
heart.” Ringo v. Lombardi, 677 F.3d 793, 795 (8th Cir. 2012). In May 2012, after
sodium thiopental became unavailable, the State revised its protocol to use a single
drug—propofol—as the lethal agent.
In June 2012, the prisoners sued in state court to challenge the new protocol.
State officials removed the case to federal court and promptly moved to dismiss the
petition for failure to state a claim. The district court denied the motion in part and
granted it in part, ruling as relevant here that the plaintiffs had adequately pleaded that
the protocol presented a risk of harm that violated the Eighth Amendment and that the
prisoners were not required to plead a reasonable alternative method of execution to
the use of propofol. The court also ruled that the allegedly higher risk of pain posed
by the protocol, compared to the State’s prior methods of execution, sufficed to state
a claim of unconstitutional ex post facto punishment.
In October 2013, the State informed the district court that it had revised its
protocol to use pentobarbital, rather than propofol, as the lethal agent. In late 2013,
after a discovery dispute, the district court ordered the State to disclose to counsel for
the prisoners the identities of the physician who prescribes the pentobarbital used in
Missouri executions, the pharmacist who compounds it, and the laboratory that tests
the compounded drug. In re Lombardi, 741 F.3d 888, 892 (8th Cir.) (en banc), reh’g
denied, 741 F.3d 903 (8th Cir.), cert. denied, 134 S. Ct. 1790 (2014). This court
issued a writ of mandamus vacating the district court’s order requiring disclosure. Id.
-3-
at 897. We determined that the complaint then pending failed to state any claim to
which the identities of those parties was relevant. Id. at 895-97.
In February 2014, the plaintiffs filed a second amended complaint. That
complaint alleges ten separate claims, seven of which are at issue in this appeal: (1)
that the State’s use of compounded pentobarbital constitutes cruel and unusual
punishment, in violation of the United States Constitution; (2) that the defendants are
deliberately indifferent to the plaintiffs’ medical need for their executions not to inflict
gratuitous pain; (3) that the State’s use of compounded pentobarbital creates a
significant risk of increased punishment over previous methods and accordingly
amounts to ex post facto punishment, in violation of the United States Constitution;
(4) that the defendants have deprived them of due process under the United States
Constitution by not providing timely and adequate notice of the lethal injection
methods; (5) that the defendants have deprived them of equal protection under the
United States Constitution by deviating from the execution protocol in certain
instances; (6) that the defendants have violated their First Amendment rights under the
United States Constitution by refusing to disclose the identities of the pharmacy that
compounds the pentobarbital and its suppliers; and (7) that the defendants have
violated a number of federal laws by soliciting and using the compounded
pentobarbital in executions, all allegedly reviewable under Missouri’s Administrative
Procedure Act, Mo. Rev. Stat. § 536.150.
In May 2014, the district court granted the State’s motion to dismiss the
complaint. The court dismissed all claims except for that alleging “cruel and unusual
punishment” in violation of the Eighth Amendment and its Missouri constitutional
analog. As for the remaining claim, the court ruled that the prisoners’ concession that
“other methods of lethal injection . . . would be constitutional” did not suffice to state
a claim under the Eighth Amendment. But the court allowed the prisoners seven days
to amend the claim and address that deficiency by presenting “factual allegations
permitting the Court to determine whether the alleged alternative method [of
-4-
execution] is reasonably available and less likely to create a substantial risk of harm.”
The prisoners responded that they did not intend to plead an alternative method of
execution, because they believed the law did not require them to do so. In light of that
response, the district court dismissed the remaining claim and entered a final
judgment. This appeal followed.
II.
The prisoners’ lead argument on appeal is that they stated a claim under the
Eighth Amendment that Missouri’s lethal-injection protocol violates the prohibition
on cruel and unusual punishment.3 As in Lombardi, our analysis must begin with a
basic proposition: “[C]apital punishment is constitutional. It necessarily follows that
there must be a means of carrying it out.” Baze v. Rees, 553 U.S. 35, 47 (2008)
(plurality opinion) (internal citation omitted). Any allegation that all methods of
execution are unconstitutional, therefore, does not state a plausible claim under the
Eighth Amendment. Lombardi, 741 F.3d at 895.
Baze addressed an Eighth Amendment challenge to a lethal-injection protocol,
and our opinion in Lombardi summarized the rule of Baze as follows:
Where, as here, there is no assertion that the State acts purposefully to
inflict unnecessary pain in the execution process, the Supreme Court
recognized only a limited right under the Eighth Amendment to require
a State to change from one feasible method of execution to another. The
controlling opinion of the Chief Justice in Baze provides that if a State
refuses to adopt a readily available alternative method of execution that
would significantly reduce a substantial risk of severe pain, then “a
State’s refusal to change its method can be viewed as ‘cruel and unusual’
under the Eighth Amendment.” 553 U.S. at 52 (plurality opinion)
3
The prisoners do not develop an argument on appeal concerning the dismissal
of their claim alleging cruel and unusual punishment under the Missouri Constitution.
-5-
(emphasis added). In sum: “A stay of execution may not be granted on
grounds such as those asserted here unless the condemned prisoner
establishes that the State’s lethal injection protocol creates a
demonstrated risk of severe pain. He must show that the risk is
substantial when compared to the known and available alternatives.” Id.
at 61 (emphasis added).
741 F.3d at 895-96.
The district court, relying on Lombardi, concluded that the second amended
complaint adequately alleged that the protocol creates a substantial risk of severe pain.
The court ruled, however, that the prisoners failed to allege sufficiently the second
essential element of an Eighth Amendment claim—i.e., that there exists a feasible
alternative method of execution that would substantially reduce the risk of harm.
Although the prisoners conceded in the second amended complaint that “other
methods of lethal injection the Department could choose would be constitutional,” the
court reasoned that this “naked assertion” was insufficient to allege that an alternative
method is reasonably available and less likely to create a substantial risk of harm.
To state a claim under the Federal Rules of Civil Procedure, a complaint must
contain “a short and plain statement of the claim showing that the pleader is entitled
to relief.” Fed. R. Civ. P. 8(a)(2). “To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A pleading need not include “detailed
factual allegations,” but it is not sufficient to tender “naked assertion[s]” that are
“devoid of further factual enhancement.” Id. (internal quotation marks omitted). A
complaint must do more than allege “labels and conclusions” or “a formulaic
recitation of the elements of a cause of action.” Id.
-6-
A.
We first address whether the second amended complaint adequately alleges that
Missouri’s lethal-injection protocol creates a substantial risk of severe pain. We
review a district court’s grant of a motion to dismiss for failure to state a claim under
Rule 12(b)(6) de novo. United States ex rel. Raynor v. Nat’l Rural Utils. Coop. Fin.,
Corp., 690 F.3d 951, 955 (8th Cir. 2012). We assume all facts in the complaint to be
true, and draw all reasonable inferences in favor of the non-moving party. Id.
“[L]egal conclusions” and “threadbare recitations of the elements of a cause of
action supported by mere conclusory statements” are not entitled to a presumption of
truth when considering the sufficiency of a complaint. Iqbal, 556 U.S. at 678. A
complaint must be plausible on its face and “‘[a] claim has facial plausibility when the
pleaded factual content allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.’” Magee v. Trustees of Hamline Univ.,
Minn., 747 F.3d 532, 535 (8th Cir. 2014) (quoting Iqbal, 556 U.S. at 678). Making
a plausibility determination is a “‘context-specific task that requires the reviewing
court to draw on its judicial experience and common sense.’” Id. (quoting Iqbal, 556
U.S. at 679).
Stating a plausible Eighth Amendment claim in the context of the prisoners’
attack upon Missouri’s execution protocol first requires the prisoners to plead
sufficient facts indicating that the protocol creates a “substantial risk of serious harm.”
See Baze, 553 U.S. at 50 (“We have explained that to prevail on such a claim there
must be a ‘substantial risk of serious harm,’ an ‘objectively intolerable risk of harm’
that prevents prison officials from pleading that they were ‘subjectively blameless for
purposes of the Eighth Amendment.’” (quoting Farmer v. Brennan, 511 U.S. 825,
842, 846 & n.9 (1994))). Indeed, the prisoners allege the lethal-injection protocol
creates a substantial risk of serious harm in that it inflicts a “substantial risk of severe
pain.” See id. at 52. However, successfully pleading facts to demonstrate a
-7-
substantial risk of severe pain requires the prisoners to plead more than just a
hypothetical possibility that an execution could go wrong, resulting in severe pain to
a prisoner. The Eighth Amendment prohibits an “‘objectively intolerable risk’” of
pain, rather than “simply the possibility of pain.” Id. at 61-62 (quoting Farmer, 511
U.S. at 846). The plurality opinion in Baze acknowledged that the nature of
executions necessarily involves the risk of pain: “Some risk of pain is inherent in any
method of execution—no matter how humane—if only from the prospect of error in
following the required procedure.” Id. at 47. But “the Constitution does not demand
the avoidance of all risk of pain in carrying out executions.” Id. Instead, the Eighth
Amendment requires that the prisoners show the intended protocol is “‘sure or very
likely to cause serious illness and needless suffering.’” Id. at 50 (quoting Helling v.
McKinney, 509 U.S. 25, 33 (1993)).
Relying on this court’s decision in Lombardi, the district court found the
prisoners’ second amended complaint adequately alleged that the protocol created a
substantial risk of severe pain:
The Eighth Circuit specifically referenced the language used in
Plaintiffs’ previous complaints regarding the risk and level of pain
necessary to plead an Eighth Amendment violation, and gave no
indication such language was insufficient. Based on that fact and
the case law cited by Plaintiffs, the Court concludes Plaintiffs
sufficiently plead an Eighth Amendment claim regarding the risk
and level of pain that the current execution protocol carries.
R. Doc. 437, at 8. Our decision in Lombardi addressed the pleading requirement of
a feasible alternative to the current lethal-injection protocol. It did not address the
sufficiency of the complaint regarding the allegation of a substantial risk of severe
pain. Because the district court relied upon our decision in Lombardi as the basis for
finding the prisoners had satisfied this pleading burden, a determination of the
sufficiency of the prisoners’ complaint regarding the allegation of a substantial risk
of severe pain now requires a more thorough analysis.
-8-
When reviewing the sufficiency of a complaint, we review the complaint itself
and any exhibits attached to the complaint. Meehan v. United Consumers Club
Franchising Corp., 312 F.3d 909, 913 (8th Cir. 2002) (“‘[M]aterials attached to the
complaint as exhibits may be considered in construing the sufficiency of the
complaint.’” (quoting Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986))). The
prisoners filed a second amended complaint with 32 exhibits attached, including
declarations and affidavits from medical professionals.
1.
In the second amended complaint the prisoners rely on analysis from a
pharmacology expert and an anesthesiologist in alleging that the use of a
compounding pharmacy to produce the execution drug creates an “objectively
intolerable risk of pain.” It is alleged that “[c]ompounding pharmacy products do not
meet the requirements for identity, purity, efficacy, and safety that pharmaceuticals
produced under FDA regulations must meet.” R. Doc. 338, at 44. The prisoners
identify four distinct potential risks which they believe could result from the State’s
use of compounded pentobarbital. First, they allege that the compounded
pentobarbital could be sub- or super-potent. According to the second amended
complaint, sub-potent pentobarbital could fail to cause the death of the prisoner,
leaving him unconscious with a lower rate of respiration, causing irreversible brain
damage. R. Doc. 338, at Ex. 5. Super-potent pentobarbital could result in suffocation
and difficulty breathing before losing consciousness. R. Doc. 338, at Ex. 5. Second,
the prisoners allege that the pentobarbital could easily be contaminated with allergens,
toxins, bacteria, or fungus. The prisoners allege that the injection of pentobarbital so
contaminated could cause a painful allergic reaction in the blood. R. Doc. 338, at 45.
Third, the prisoners allege that foreign particles could contaminate the compounded
pentobarbital, creating the risk that a prisoner could experience serious pain upon
injection or could suffer from a pulmonary embolism. R. Doc. 338, at 45. Finally, the
-9-
prisoners allege that the drug may not maintain the proper pH,4 potentially resulting
in numerous complications, most notably severe burning upon injection or a
pulmonary embolism. R. Doc. 338, at 45. The prisoners also allege that improper
storage of the pentobarbital and use beyond its expiration date could exacerbate the
potential for these harms. R. Doc. 338, at 49-51.
Asserting that compounding pharmacies commonly lack oversight and
regulation, it is alleged that the use of compounding pharmacies “often results in drugs
which are contaminated, sub-potent or super-potent, or which do not have the
strength, quality or purity” of FDA-regulated drugs. R. Doc. 338, at. Ex. 6. These
compounding pharmacies are alleged to be an “emerging, substandard drug industry”
that are responsible for the creation of “large quantities of unregulated, unpredictable
and potentially unsafe drugs.” R. Doc. 338, at Ex. 6. Noting that the lack of
regulation allows compounding pharmacies to obtain ingredients from countries with
little pharmaceutical oversight, it is alleged that it is impossible to trace the origin of
the drugs, resulting in no guarantee that the drugs are what they purport to be. It is
alleged that Missouri’s current compounded pentobarbital lethal-injection protocol is
“replete with flaws that present a substantial risk of causing severe and unacceptable
levels of pain and suffering during the execution.” R. Doc. 338, at Ex. 5.
The prisoners also allege that the State might administer the execution drugs via
central venous access rather than peripheral venous access.5 R. Doc. 338, at 30. The
4
pH is a measure of the acidity or basicity of a solution. See Taber’s Cyclopedic
Medical Dictionary 1377 (Clayton L. Thomas ed., 16th ed. 1989). According to the
affidavits attached to the prisoners’ second amended complaint, maintaining a proper
pH is an important aspect of a properly produced drug. If a drug is too acidic or too
basic, it may be incompatible with human blood, causing various unintended
reactions. See R. Doc. 338, at Ex. 6.
5
Central venous access involves the insertion of a catheter into a large vein in
a person’s neck, chest, or groin. Peripheral venous access involves the placement of
-10-
prisoners allege that the use of a central line carries a higher risk of complication in
following the lethal-injection protocol, increases the length of the execution, and is
more invasive and painful than peripheral venous access. R. Doc. 338, at 32.
Notably, the prisoners make no mention of the central vein issues in their briefing
before this court, instead focusing on alleged issues relating to the use of compounded
pentobarbital. Because the prisoners have failed to brief this issue before our court,
we decline to consider it here. See Neb. State Legislative Bd., United Transp. Union
v. Slater, 245 F.3d 656, 658 n.3 (8th Cir. 2001) (explaining that claims not raised in
an initial brief are waived).
2.
None of the alleged potentialities the prisoners identify in the second amended
complaint relating to compounded pentobarbital rises to the level of “sure or very
likely” to cause serious harm or severe pain. The prisoners’ allegations are limited to
descriptions of hypothetical situations in which a potential flaw in the production of
the pentobarbital or in the lethal-injection protocol could cause pain. This speculation
is insufficient to state an Eighth Amendment claim. See Brewer v. Landrigan, 131
S.Ct. 445, 445 (2010) (“[S]peculation cannot substitute for evidence that the use of
the drug is ‘sure or very likely to cause serious illness and needless suffering.’”
(quoting Baze, 553 U.S. at 50)). By noting that the use of compounding pharmacies
“often results” in “potentially unsafe drugs,” the experts whose views have been
incorporated into the second amended complaint underscore that the harms they have
identified are hypothetical and not “sure or very likely” to occur. R. Doc. 338, at Ex.
6. The prisoners rely on allegations of generalized harms resulting from the use of a
compounding pharmacy to produce the pentobarbital and have failed to provide
a catheter in a peripheral vein, most commonly in the hand or arm. See 6 The Gale
Encyclopedia of Medicine 4571-72 (Laurie J. Fundukian ed., 4th ed. 2011).
-11-
anything more than speculation that the current protocol carries a substantial risk of
severe pain.
Even if one of the harms the prisoners identify were to occur, the prisoners offer
nothing in their pleading to support the allegation that it would be more than an
isolated incident. The prospect of an isolated incident does not satisfy the requirement
that prisoners adequately plead a substantial risk of severe pain to survive a motion
to dismiss their Eighth Amendment claim. See Baze, 553 U.S. at 50 (“[A]n isolated
mishap alone does not give rise to an Eighth Amendment violation, precisely because
such an event, while regrettable, does not suggest cruelty, or that the procedure at
issue gives rise to a ‘substantial risk of serious harm.’” (quoting Farmer, 511 U.S. at
842)). Accepting as true the factual matter alleged in the second amended complaint,
if any of the hypothetical situations the prisoners identify came to pass, it would
amount to an “isolated mishap” that, “while regrettable,” would not result in an Eighth
Amendment violation.
3.
Case law from other circuits also supports our conclusion that the prisoners’
allegation of a substantial risk of severe pain is inadequate. At least one court has
found that an Eighth Amendment challenge to an execution protocol was properly
dismissed after the plaintiff-prisoner failed to sufficiently plead a plausible claim that
the lethal-injection protocol was sure or very likely to create a substantial risk of
severe pain. See Cook v. Brewer, 637 F.3d 1002, 1008 (9th Cir. 2011). In Cook, the
Ninth Circuit considered a challenge to Arizona’s lethal-injection protocol, a three
drug protocol involving the use of sodium thiopental. Id. The court found that the
prisoner’s “reliance on speculative and conclusory allegations [was] insufficient to
state a facially plausible claim” when he alleged that the use of non-FDA approved
sodium thiopental created a substantial risk of severe pain. Id. The prisoner alleged
that the unregulated drug could be ineffective, contaminated, and could differ greatly
-12-
in potency, quality, and formation from other FDA regulated drugs. Id. at 1006. The
court rejected these claims as “speculative and overly generalized,” finding that the
prisoner failed to make any specific factual allegations regarding the alleged harms
arising from the use of an unregulated drug. Id. Instead, he only identified
hypothetical harms that would be “applicable to every drug produced outside the
United States.” Id. The court thus held that the bare allegations that the sodium
thiopental was imported and non-FDA approved did not plausibly show that the drug
was “sure or very likely to cause serious illness and needless suffering,” and the
district court had properly dismissed the prisoner’s Eighth Amendment claim. Id. at
1007.
The same prisoner mounted a second challenge to Arizona’s use of sodium
thiopental in its three drug lethal-injection protocol, alleging that the drug created a
substantial risk of severe pain because there had been 12 adverse drug reaction
reports, the drug had been manufactured for use on animals, it had caused problems
in three executions in the United States, and the State obtained it unlawfully. Cook
v. Brewer, 649 F.3d 915, 917 (9th Cir. 2011). The Ninth Circuit again upheld the
dismissal of the prisoner’s complaint, finding that he had failed to satisfy the pleading
requirements to state an Eighth Amendment claim. Id. at 918-19. “Because Cook’s
four new allegations do not support the drawing of any non-speculative conclusions,
Cook has failed to state a facially plausible claim that Arizona’s planned execution is
‘sure or very likely to cause . . . needless suffering.’” Id. (quoting Baze, 553 U.S. at
50).
Other circuits have also denied prisoners relief when challenging a compounded
pentobarbital lethal-injection protocol. See Whitaker v. Livingston, 732 F.3d 465, 468
(5th Cir.), cert. denied, 134 S.Ct. 417 (2013) (affirming denial of motion for
preliminary injunction when plaintiff-prisoners failed to show state’s execution
protocol of compounded pentobarbital caused a substantial risk of severe pain when
they had “pointed to only hypothetical possibilities” and were unable to “point to
-13-
some hypothetical situation, based on science and fact, showing a likelihood of severe
pain”); Wellons v. Comm’r Ga. Dep’t of Corr., 754 F.3d 1260, 1265 (11th Cir. 2014)
(affirming the denial of injunctive relief and declaratory judgment and denying a stay
of execution when prisoner did not sufficiently allege that the use of compounded
pentobarbital in the state’s execution protocol amounted to an Eighth Amendment
violation because “speculation that a drug that has not been approved will lead to
severe pain or suffering ‘cannot substitute for evidence that the use of the drug is sure
or very likely to cause serious illness and needless suffering’” (quoting Mann v.
Palmer, 713 F.3d 1306, 1315 (11th Cir. 2013)).
4.
The prisoners have failed to include factual allegations in the second amended
complaint which permit the reasonable inference that Missouri’s lethal-injection
protocol is “sure or very likely” to create a substantial risk of severe pain. Accepting
the factual allegations in the complaint as true, the prisoners fail to satisfy their burden
under the Eighth Amendment because they rely entirely on hypothetical and
speculative harms that, if they were to occur, would only result from isolated mishaps.
Like the prisoner in Cook, the prisoners here fail to make any specific factual
allegations regarding the production of the pentobarbital that would lead to its
contamination, potency problems, or improper pH, and instead rely on general risks
associated with compounding pharmacies. Without such specific allegations, the
prisoners’ complaint contains no more than speculative and hypothetical generalized
assertions about the nature of compounding pharmacies. Likewise, the prisoners’
allegation describing concerns arising from the method of venous access selected by
the State amounts to no more than speculation. In sum, the prisoners have failed to
plead sufficient factual matter, consistent with Twombly and Iqbal, necessary to state
a plausible claim for relief. We conclude, therefore, that their claim regarding the
substantial risk of severe pain allegedly imposed by Missouri’s execution protocol is
inadequately pled as a matter of law.
-14-
B.
Prisoners challenging a method of execution must do more than allege a
substantial risk of serious harm to state a claim under the Eighth Amendment. As we
explained in Lombardi, 741 F.3d at 895-96, to establish a constitutional violation, an
inmate ultimately must prove that another execution procedure exists that is feasible
and readily implemented, and that the alternative method will significantly reduce a
substantial risk of severe pain. Lombardi, 741 F.3d at 895-96; see Baze, 553 U.S. at
52 (plurality opinion); id. at 63 (Alito, J., concurring); Raby v. Livingston, 600 F.3d
552, 560-61 (5th Cir. 2010); Cooey v. Strickland, 589 F.3d 210, 220 (6th Cir. 2009).
The existence of such an alternative method of execution, therefore, is a necessary
element of an Eighth Amendment claim, and this element—like any element of a
claim—must be pleaded adequately.
To address this point, the prisoners’ second amended complaint merely
“concede[s] that other methods of lethal injection the Department could choose to use
would be constitutional.” R. Doc. 338, at 148. In our view, this “concession” is
insufficient to allege the second element of an Eighth Amendment claim that
challenges a method of lethal injection. The complaint does not assert that the “other
methods of lethal injection” it references are feasible and readily implemented, or that
they would significantly reduce a substantial risk of severe pain allegedly caused by
the present method. Even a barebones allegation to that effect, moreover, would not
be adequate: a “formulaic recitation of the elements of a cause of action” is
insufficient to state a claim under Rule 8(a)(2). Iqbal, 556 U.S. at 678. The pleading
must include “sufficient factual matter, accepted as true, to state a claim to relief that
is plausible on its face.” Id. (internal quotation marks omitted). The second amended
complaint includes no factual matter that even hints at how the State—drawing on
feasible and readily implemented alternatives—could modify its lethal-injection
protocol to reduce significantly the alleged substantial risk of severe pain. We
therefore agree with the district court that the prisoners’ “naked assertion” that other
-15-
methods would be constitutional, devoid of further factual enhancement, fails to state
a claim under the Eighth Amendment.
The prisoners respond that the Supreme Court’s decision in Hill v. McDonough,
547 U.S. 573 (2006), illustrates the sufficiency of their complaint. The issue in Hill
was whether a prisoner’s challenge to the constitutionality of Florida’s lethal-injection
protocol could proceed as an action for relief under 42 U.S.C. § 1983, or whether it
must be brought as an action for a writ of habeas corpus under 28 U.S.C. § 2254. Id.
at 576. Hill’s complaint conceded that “other methods of lethal injection the
Department could choose to use would be constitutional,” and the State had not
argued that enjoining the present method “would leave the State without any other
practicable, legal method of executing Hill by lethal injection.” Id. at 580. The Court
held under those circumstances that the action could proceed under § 1983, because
“Hill’s action if successful would not necessarily prevent the State from executing him
by lethal injection.” Id. at 580.
In reaching that conclusion, the Hill Court rejected a suggestion from the
United States that a prisoner seeking to proceed under § 1983 rather than through
habeas corpus must identify an alternative, authorized method of execution. Id. at
582. The Court explained that it would not impose a “heightened pleading
requirement[]” as a prerequisite to the prisoner proceeding under § 1983, because
“[s]pecific pleading requirements are mandated by the Federal Rules of Civil
Procedure, and not, as a general rule, through case-by-case determinations of the
federal courts.” Id. at 582 (citing Fed. R. Civ. P. 8, 9; Swierkiewicz v. Sorema N.A.,
534 U.S. 506, 512-14 (2002)).
The Hill opinion’s references to Rule 8 and Swierkiewicz, and a later citation
of Hill in Jones v. Bock, 549 U.S. 199, 213 (2007), have prompted our careful
consideration. We think the better reading, however, is that Hill did not address the
elements of a successful claim under the Eighth Amendment or establish that Hill’s
-16-
complaint stated a claim that would survive a motion to dismiss. The question
decided in Hill concerned only the cognizability of a complaint under § 1983, as
opposed to habeas corpus. The Court said specifically that “the merits of Hill’s
underlying action are . . . not before us.” Hill, 547 U.S. at 585. Whether Hill’s
complaint stated a claim for relief under Rule 8 and the Eighth Amendment is a
question that “goes to the merits” of the underlying action. Bond v. United States, 131
S. Ct. 2355, 2362 (2011). It was not until two years after Hill, in Baze, when the
Court eventually addressed the substance of the Eighth Amendment and the elements
of a claim challenging a lethal-injection protocol. Jones, also decided before Baze,
simply reaffirmed a proposition with which we do not quarrel—i.e., that specific
pleading requirements are mandated by the federal rules and generally not through
case-by-case determinations of the courts. 549 U.S. at 213. We disagree with Judge
Shepherd, post, at 44, and the dissenting judges, post, at 38-40, that requiring a
plaintiff to plead the elements of an Eighth Amendment claim as defined in Baze is
a “heightened pleading requirement” that exceeds the requirements of Rule 8 as
explained in Iqbal and Twombly.6
The inference that Hill did not address the sufficiency of Hill’s complaint is
strengthened by the opinions in Baze, where two Justices opined that “a method of
execution violates the Eighth Amendment only if it is deliberately designed to inflict
6
Judge Bye, post, at 40-41, suggests incorrectly that this court’s order denying
rehearing in Lombardi established that a prisoner could state an Eighth Amendment
claim without identifying a feasible alternative if he merely conceded that other
methods of lethal injection the State could choose to use would be constitutional. The
Lombardi order simply recited the concession made by the plaintiffs in Hill, and
observed that the plaintiffs in Lombardi did not make such an allegation. In re
Lombardi, 741 F.3d 903, 905 (8th Cir. 2014). The order declared that “[w]e were not
required to address whether alleging that the current method of execution creates a
substantial risk of harm when compared to known and available alternatives, without
specifying an alternative, would be sufficient to state a claim in light of Hill and
Baze.” Id. (emphasis added).
-17-
pain.” Baze, 553 U.S. at 94 (Thomas, J., concurring). Hill alleged only that Florida’s
method of execution created a risk of severe pain and that other unspecified methods
of execution would be constitutional; there is no indication in the opinion that he
alleged a deliberate design by the State of Florida to inflict pain during an execution.
That Hill was a unanimous opinion—joined by the concurring Justices in
Baze—fortifies our view that the decision addressed only cognizability under § 1983,
not the plausibility of the prisoner’s claim under Rule 8 and the Eighth Amendment.
The prisoners contend alternatively that the rule announced in Baze applies only
where—as in Baze itself—a prisoner alleges that a lethal-injection protocol is
unconstitutional because the State easily could change to an alternative method of
execution that is likely to reduce a significant risk of pain. We think that is an
implausible reading of the Baze plurality opinion. On the prisoners’ view, a plaintiff
who alleges a significant risk of severe pain and an alternative that would reduce the
risk must satisfy the Baze standard for an alternative method of execution, but a
prisoner who alleges only a significant risk of severe pain need not propose an
alternative method. The suggested rule would render the Baze plurality’s extensive
discussion of alternative methods superfluous, and we are loathe to assume that the
plurality engaged in such a meaningless exercise. See Baze, 553 U.S. at 56-61.
The prisoners also urge that the Supreme Court’s grant of a stay of execution
in Bucklew v. Lombardi, 134 S. Ct. 2333 (2014), “repudiates the rule of Lombardi,”
and shows that a prisoner need not allege an alternative method of execution to state
a claim under the Eighth Amendment. In May 2014, the Court granted a stay of
Russell Bucklew’s execution pending appeal in an order that stated as follows:
Application for stay of execution of sentence of death presented to
Justice ALITO and by him referred to the Court treated as an application
for stay pending appeal in the United States Court of Appeals for the
Eighth Circuit. Application granted pending disposition of petitioner’s
-18-
appeal. We leave for further consideration in the lower courts whether
an evidentiary hearing is necessary.
Id.
The Court’s brief order does not address the substance of Bucklew’s appeal or
the basis for possible success on the merits. Although Bucklew urged that the district
court erred in requiring him to allege a feasible and more humane method of
execution, he also asserted that “[t]o the extent that this Court, or any lower court,
believes that pleading an ‘alternative method’ is necessary, Mr. Bucklew has indeed
proposed an ‘alternative.’” App. 821-22. The unexplained order in Bucklew thus does
not resolve whether the prisoners must plead the existence of an alternative method
of execution that meets the criteria of Baze.
The prisoners further contend that they cannot propose a reasonably available
alternative method of execution without discovery of information about the State’s
present suppliers of lethal drugs, so the Lombardi rule is unworkable in practice. We
doubt the rule is as “unworkable” as the prisoners suggest. Their complaint is
accompanied by affidavits from experts who criticize the use of compounded
pentobarbital as a lethal drug. These or similar experts presumably are in a position
to know and to inform the prisoners whether some other lethal drug exists that would
significantly reduce the alleged risk of pain arising from the current method. In any
event, the Supreme Court has rejected the notion that discovery must be available to
a plaintiff who cannot allege sufficient factual matter to suggest plausibly an
entitlement to relief. See Twombly, 550 U.S. at 556-57. “Rule 8 marks a notable and
generous departure from the hyper-technical, code-pleading regime of a prior era, but
it does not unlock the doors of discovery for a plaintiff armed with nothing more than
conclusions.” Iqbal, 556 U.S. at 678-79.
-19-
Although policy reasons do not justify imposing a heightened pleading
requirement, see Swierkiewicz, 534 U.S. at 513, “the practical significance of the Rule
8 entitlement requirement” should not be ignored. Twombly, 550 U.S. at 557-58. In
Twombly, the Court illustrated the practical significance of the Rule 8 requirement by
adverting to the high cost of discovery in antitrust cases and the modest success of
judicial supervision in checking discovery abuse. Id. at 558-59. In this capital
litigation, it should be remembered that one stated objective of the prisoners’ lawsuit
is to pressure the State’s suppliers and agents to discontinue providing the drugs and
other assistance necessary to carry out lawful capital sentences. The second amended
complaint alleges that confidentiality of the States’ drug manufacturers and suppliers
“prevents the . . . suppliers’ associations, customers, and prescribing or referring
physicians from censuring or boycotting them,” and that protecting the identity of the
State’s health care professionals unreasonably restricts their “associations and
colleagues from de-certifying or otherwise censuring them or boycotting them.” R.
Doc. 338, at 140-41.
In this very case, after the State’s former drug supplier was identified through
information in the public domain, a Missouri prisoner sued the supplier in Oklahoma.
The supplier then elected to discontinue providing drugs to the State rather than
endure the expense and burdens of litigation. R. Doc. 353, at 1-2, 10-13, 190-93. As
for the possibility of protecting the confidentiality of sensitive identities after
discovery in litigation, counsel for the prisoners expressed concern that it could be
very difficult to investigate the physician, pharmacist, and laboratory without
disclosing their roles in the execution process, and suggested there were “many ways
in which investigating the pharmacy might place the pharmacy’s identity, status, and
role at issue before whoever we would be talking to.” R. Doc. 224, at 12-16. The
district court acknowledged that “it may be that there’s just no way given the
circumstances to keep it confidential because of the central nature of these people to
the current dispute.” Id. at 16.
-20-
The real potential that unwarranted discovery would serve as a back-door means
to frustrate the State’s ability to carry out executions by lethal injection counsels in
favor of careful adherence to the requirements of Rule 8, as explicated in Iqbal and
Twombly. A groundless Eighth Amendment claim should not be permitted to achieve
indirectly a de facto injunction against a lawful method of execution.
For these reasons, we adhere to our conclusion in Lombardi that without a
plausible allegation of a feasible alternative method of execution that would
significantly reduce a substantial risk of serious pain, or a purposeful design by the
State to inflict unnecessary pain, the prisoners have not stated an Eighth Amendment
claim based on the State’s use of compounded pentobarbital in executions. We further
conclude that the allegation in the second amended complaint that “other methods of
lethal injection the Department could choose would be constitutional” does not
contain sufficient factual matter to state a claim to relief that is plausible on its face.
The district court thus properly dismissed the prisoners’ Eighth Amendment claim.7
7
Judge Shepherd, while voting to affirm, also files a “dissenting” opinion on the
ground that Part II.B is unnecessary to the decision. It is not uncommon for courts to
decide cases on alternative grounds, e.g., United States v. Farlee, 757 F.3d 810, 820
(8th Cir. 2014), and the Supreme Court recently noted the “unremarkable proposition”
that a court’s decision to rely on one of two possible alternative grounds does not strip
it of power to decide the second question, particularly when the court’s decree is
subject to review by the Supreme Court. Already, LLC v. Nike, Inc., 133 S. Ct. 721,
729 (2013). Given our conclusion in Part II.B, moreover, it could just as well be said
that Part II.A concerning the complaint’s allegations of a substantial risk of severe
pain is unnecessary. Indeed, this court in Lombardi (joined by Judge Shepherd)
concluded that a previous complaint filed by the prisoners failed to state a claim solely
because the prisoners did not make a sufficient allegation about an alternative method
of execution. 741 F.3d at 895-96.
-21-
III.
The prisoners next argue that they have a serious medical need to be free from
gratuitous pain during their executions, and that the state officials act with deliberate
indifference to their need by using compounded pentobarbital as the lethal drug in the
State’s execution procedure. The district court rejected this claim on two grounds: (1)
that the officials are not addressing medical needs of the prisoners in carrying out
executions, and (2) that the prisoners have not pleaded adequately that the State’s
lethal-injection protocol inflicts unnecessary pain in violation of the Eighth
Amendment.
Assuming without deciding that an Eighth Amendment deliberate-indifference
claim based on medical needs is not limited to cases involving medical procedures,
see Nelson v. Campbell, 541 U.S. 637, 644-45 (2004); Helling, 509 U.S. at 29-30, we
agree with the district court that the prisoners have not stated a claim. The Eighth
Amendment protects against the “unnecessary and wanton infliction of pain.” Estelle
v. Gamble, 429 U.S. 97, 104 (1976). A prisoner must allege both that a deprivation
of rights is “objectively, sufficiently serious,” and that a state official is deliberately
indifferent to inmate health or safety. Farmer, 511 U.S. at 834 (internal quotation
omitted). For reasons discussed in Part II, the prisoners have not pleaded that the use
of compounded pentobarbital will result in the unnecessary and wanton infliction of
pain.
IV.
The prisoners contend that the state officials violated the Ex Post Facto Clause
of the federal Constitution when they changed the execution protocol to provide for
the use of compounded pentobarbital, because the change allegedly increased the risk
of a painful execution. The Ex Post Facto Clause forbids enactment of a “law that
changes the punishment, and inflicts a greater punishment, than the law annexed to
-22-
the crime, when committed.” Cal. Dep’t of Corr. v. Morales, 514 U.S. 499, 516
(1995) (quoting Calder v. Bull, 3 U.S. 386, 390 (1798)). The prisoners’ claim fails
in light of Lombardi, where this court held that an identical ex post facto claim
asserted in an earlier complaint failed to state a claim. 741 F.3d at 896-97. We
reasoned that “[t]he manner of punishment for capital murder in Missouri at all
relevant times . . . has been death by lethal injection or lethal gas.” Lombardi, 741
F.3d at 896 (citing Mo. Rev. Stat. § 546.720.1). Where, as here, “only the mode of
producing death has changed, with no allegation of superadded punishment or
superior alternatives, the Ex Post Facto Clause[ is] not implicated.” Id. at 897
(internal quotation mark omitted).
The prisoners also complain that they did not have fair notice that Director
Lombardi could change the method of execution to include compounded
pentobarbital, because that method allegedly violates the federal Food, Drug, and
Cosmetics Act and the Controlled Substances Act. The prisoners note Lombardi’s
statement that when the prisoners committed their crime, they “had fair notice” that
death was the prescribed punishment, and fair notice “of the Director’s discretion to
determine the method of execution.” 741 F.3d at 897. The Ex Post Facto Clause,
however, is concerned with “lack of fair notice and governmental restraint when the
legislature increases punishment beyond what was prescribed when the crime was
consummated.” Weaver v. Graham, 450 U.S. 24, 30 (1981). Whether the prisoners
had specific notice that the Director might select a particular lethal drug is not
dispositive, so long as the State has not increased the punishment for the offenses of
conviction. We therefore adhere to our conclusion in Lombardi that the prisoners fail
to state a plausible ex post facto claim because the punishment—death—has remained
the same; “only the mode of producing death has changed,” and the prisoners have not
alleged “superadded punishment or superior alternatives.” 741 F.3d at 897 (internal
quotation mark omitted).
-23-
V.
The prisoners next contend that the Missouri state officials violated their right
of access to the courts under the Due Process Clause by failing to provide them with
the timely and adequate notice of the proposed execution method needed to litigate
the lawfulness of the execution protocol. We agree with the district court that the
prisoners failed to state a claim based on alleged infringement of their right to access
the courts. State prisoners have a constitutional “right of access to the courts,” Lewis
v. Casey, 518 U.S. 343, 350 (1996) (emphasis omitted), but this right does not
guarantee the ability “to discover grievances, and to litigate effectively once in court.”
Id. at 354. The right of access to the courts is satisfied if the prisoner has “the
capability of bringing contemplated challenges to sentences or conditions of
confinement before the courts.” Lewis, 518 U.S. at 356. The prisoners’ claim that
they are unable to discover information regarding the execution protocol is thus
insufficient as a matter of law to state a due process claim. Lewis, 518 U.S. at 354;
Williams v. Hobbs, 658 F.3d 842, 851-52 (8th Cir. 2011); Giarratano v. Johnson, 521
F.3d 298, 306 (4th Cir. 2008). “The prisoners do not assert that they are physically
unable to file an Eighth Amendment claim, only that they are unable to obtain the
information needed to discover a potential Eighth Amendment violation.” Williams,
658 F.3d at 852.
On appeal, the prisoners present a new argument—that their “life interest
entitles them to notice of material information about the lethal drug with which they
will be executed.” They rely on the procedural due process decision of Mathews v.
Eldridge, 424 U.S. 319 (1976), and urge that the private interests served by disclosure
and the risk of an erroneous deprivation of rights without disclosure outweigh the
State’s interest in avoiding disclosure of details about the lethal drug and its
provenance.
-24-
The prisoners did not develop an argument based on Mathews in the district
court, and it is too late to raise it for the first time on appeal. In any event, the analogy
to Mathews is inapt. Mathews involved an undisputed deprivation of a property
interest (denial of social security benefits), and the question was whether the claimant
was entitled by the Due Process Clause to a pre-deprivation hearing as opposed to
merely a post-deprivation hearing. Id. at 332-33. The prisoners in this case already
have received due process for the deprivation of their life interests: They were
convicted and sentenced to death after a trial in Missouri court, and their convictions
and sentences were upheld on appeal.
At this point, the prisoners seek to discover information about the State’s lethal-
injection protocol in order to determine whether the protocol violates the Eighth
Amendment. The prisoners, however, have not pleaded a deprivation of rights under
the Eighth Amendment. This is not a case like Mathews, therefore, where there was
an undisputed deprivation of an interest protected by the Due Process Clause, and the
question was what process is due before the State may accomplish the deprivation.
Id. Rather, the prisoners here—like the plaintiffs in Wellons, 754 F.3d at 1267, and
Sepulvado v. Jindal, 729 F.3d 413, 419-20 (5th Cir. 2013)—claim a freestanding right
to detailed disclosure about Missouri’s execution protocol. We agree with the
Eleventh and Fifth Circuits that the Constitution does not require such disclosure.
Wellons, 754 F.3d at 1267; Sepulvado, 729 F.3d at 419-20. A prisoner’s “assertion
of necessity—that [the State] must disclose its protocol so he can challenge its
conformity with the Eighth Amendment—does not substitute for the identification of
a cognizable liberty interest.” Sepulvado, 729 F.3d at 419.
VI.
The prisoners next press a claim that the Missouri officials violate the Equal
Protection Clause by executing prisoners while legal activity seeking to stay their
executions is pending, because the practice contravenes the State’s written
-25-
Chronological Sequence of Execution policy. They cite the executions of Joseph
Franklin, Alan Nicklasson, and Herbert Smulls, which were carried out while a
pleading was pending in the district court, the court of appeals, or the Supreme Court.
The prisoners’ theory is that forestalling executions until all litigation is finished is a
“core” provision of the execution protocol, and that deviating from a “core” provision
violates their rights to equal protection of the laws.
The relevant portion of the execution policy provides that at 11:15 p.m. on the
eve of an execution:
Director of the Department of Corrections/designee advises (ERDCC
Warden) that (Inmate Name) may be escorted to the execution room if
no stay is in place and no legal activity is in progress to prevent the
execution.
If there is pending legal activity to halt the execution process, (Inmate
Name) will remain in his holding cell and there will be no IV or line
established until authority is granted to do so by the Director of the
Department of Corrections/designee.
App. 335-36.
The prisoners contend that the policy permits the Director to grant the Warden
authority to escort a prisoner from his cell to the execution chamber only if there is no
legal activity in progress designed to halt the execution. They reason that if the
second paragraph of the policy allowed the Director to initiate an execution procedure
even while legal proceedings were pending, then the first paragraph concerning
actions taken when “no legal activity is in progress” would be superfluous.
The prisoners’ reading of the policy is unlikely: It would allow an inmate to
thwart the State’s ability to carry out a lawful sentence simply by making repeated
court filings designed to prevent an execution during the 24-hour period designated
-26-
by the Supreme Court of Missouri for carrying out the sentence. One can imagine
counsel for a prisoner even asserting an ethical obligation to ensure that some legal
activity remains in progress for a full twenty-four hours. We are skeptical of an
interpretation of the State’s policy that could effectively foreclose the State’s ability
to carry out lawful sentences.
The policy is not a model of clarity, but it should not be understood to forbid
an execution whenever there is pending legal activity designed to stop the execution.
The policy does not expressly require the Director to refrain from carrying out a
sentence until legal activity has ceased. To the contrary, the second paragraph quoted
above contemplates that the Director may grant the Warden authority to begin
preparations for an execution even when legal activity is ongoing. The first quoted
provision—that the Director may advise the Warden to escort the inmate to the
execution room if no legal activity is in progress—applies by its terms only at 11:15
p.m. on the eve of a date of execution. The chronology does not address a
circumstance in which legal activity delays an execution until later in the 24-hour
period. The second quoted paragraph implies that the Director retains authority to
begin preparations for an execution at a later time despite ongoing legal activity. The
prisoners do not allege that the officials have escorted inmates to the execution room
on the eve of the execution while legal activity is pending: In the cases of Franklin,
Nicklasson, and Smulls, a district court or a panel of this court entered a stay of
execution that was later vacated, and the State eventually proceeded later in the 24-
hour period authorized for the execution. We therefore conclude that the prisoners
have not stated a claim under the Equal Protection Clause based on alleged violations
of the Department’s execution policy.
Assuming for the sake of analysis, however, that the state officials deviate from
the execution protocol by carrying out sentences while legal activity is pending, the
practice does not violate the Constitution. “The Equal Protection Clause of the
Fourteenth Amendment commands that no State shall ‘deny to any person within its
-27-
jurisdiction the equal protection of the laws,’ which is essentially a direction that all
persons similarly situated should be treated alike.” City of Cleburne v. Cleburne
Living Ctr., 473 U.S. 432, 439 (1985). “If a legislative classification or distinction
neither burdens a fundamental right nor targets a suspect class, we will uphold it so
long as it bears a rational relation to some legitimate end.” Vacco v. Quill, 521 U.S.
793, 799 (1997) (internal quotation marks and brackets omitted).
The prisoners apparently invoke the “fundamental right” strand of equal
protection analysis. They argue that it is unconstitutional for the State to disregard a
“core provision” of its execution protocol, and that a prohibition on executions before
legal activity has ceased is a “core provision.” The prisoners draw the term “core
provision” from two decisions of a district court concerning Ohio’s execution
protocol. See Cooey v. Kasich, 801 F. Supp. 2d 623 (S.D. Ohio 2011); In re Ohio
Execution Protocol Litig., 840 F. Supp. 2d 1044 (S.D. Ohio), aff’d, 671 F.3d 601 (6th
Cir. 2012). The Ohio district court reasoned that because certain “core” provisions
of the State’s execution protocol were the “precise procedural safeguards” that had
been “heralded in prior discussions of Eighth Amendment claims” in the same
litigation, “core deviations” from the protocol burdened a prisoner’s “fundamental
right” for purposes of equal protection analysis. Cooey, 801 F. Supp. 2d at 652-53.
The court thought certain “core deviations . . . subverted the key constitutional
principles that control the execution process.” In re Ohio Execution Protocol Litig.,
840 F. Supp. 2d at 1049. See also Arthur v. Thomas, 674 F.3d 1257, 1263 (11th Cir.
2012) (concluding that an inmate stated an equal protection claim by alleging that the
State of Alabama substantially deviated from an execution protocol, because
“[s]ignificant deviations from a protocol that protects inmates from cruel and unusual
punishment can violate the Eighth Amendment”).
Whatever the merits of the Ohio district court’s analysis with regard to the
execution protocol at issue in those decisions, the prisoners here have not stated a
claim that Missouri’s alleged deviations from its protocol burden a fundamental right.
-28-
There is no “fundamental right” to avoid execution while no judicial stay is in effect
but legal activity is pending. E.g., Hamilton v. Texas, 497 U.S. 1016 (1990) (denying
stay of execution despite four votes to grant writ of certiorari). Fundamental rights
consist of only those rights that are “explicitly or implicitly guaranteed by the
Constitution.” San Antonio Indep. Sch. Dist. v. Rodriguez, 411 U.S. 1, 32-34 (1973).
The State’s decision to carry out a lawful sentence when there is no judicial stay in
place does not burden a prisoner’s rights under the Eighth Amendment or other
constitutional provision. If a prisoner advances an eleventh-hour challenge to an
execution, the courts have authority to enter temporary administrative stays of
execution when necessary and appropriate to allow consideration of constitutional
claims. The State may deem it prudent to delay an execution while litigation is
pending, especially when final resolution is likely to occur before time expires for
carrying out the sentence on the appointed date. But the Constitution does not require
the State to implement a self-imposed stay when a state or federal court has declined
to act.
VII.
The prisoners also argue that they stated a claim that the First Amendment
entitles them to information regarding the source of the drug to be used in their
executions. A Missouri statute, Mo. Rev. Stat. § 546.720.2, provides that “[t]he
identities of members of the execution team, as defined in the execution protocol of
the department of corrections, shall be kept confidential.” The prisoners contend that
the statute violates their First Amendment rights insofar as it permits Missouri to
conceal the identity of the compounding pharmacy that provides the pentobarbital and
the identities of the pharmacy’s suppliers of ingredients for the compounding process.
The prisoners argue that concealing this information violates their right of access to
records associated with governmental execution proceedings and constitutes an
impermissible content-based restriction on access to information.
-29-
A divided panel of the Ninth Circuit, considering a comparable First
Amendment claim, recently enjoined the execution of an Arizona inmate until the
State provided him with the name and provenance of drugs to be used in his
execution. The Supreme Court promptly vacated the injunction without dissent.
Wood v. Ryan, 759 F.3d 1076, 1088 (9th Cir.), vacated, 135 S. Ct. 21 (2014). The
Eleventh Circuit has ruled that the First Amendment does not grant a prisoner a right
“to know where, how, and by whom the lethal injection drugs will be manufactured.”
Wellons, 754 F.3d at 1266-67. See also Owens v. Hill, 758 S.E.2d 794, 805-06 (Ga.
2014). We agree with the Eleventh Circuit and the dissenting opinion in the Ninth
Circuit and conclude that the prisoners failed to state a claim under the First
Amendment.
The Supreme Court held in Press-Enterprise Co. v. Superior Court, 478 U.S.
1, 8-13 (1986), that the public enjoys a qualified right of access to certain criminal
proceedings. The Court has recognized this right of access in preliminary hearings,
id. at 10, criminal trials, Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 579-80
(1980), and voir dire, Press-Enterprise Co. v. Superior Court, 464 U.S. 501, 505-11
(1984). This court has held that the First Amendment right of access applies to some
records filed in criminal proceedings—specifically, documents filed in support of
search warrant applications—see In re Search Warrant for Secretarial Area Outside
Office of Gunn, 855 F.2d 569, 572-73 (8th Cir. 1988), but unlike the Ninth Circuit, we
have not ruled that an execution constitutes the kind of criminal proceeding to which
the public enjoys a qualified right of access under the First Amendment. Cf. Cal. First
Amendment Coal. v. Woodford, 299 F.3d 868, 877 (9th Cir. 2002).
Assuming for the sake of analysis, however, that the Press-Enterprise analysis
applies to executions, and even to information regarding the source of drugs to be
used in lethal injections, the prisoners fail to state a claim for a qualified right of
public access. To determine whether a First Amendment public right of access
attaches to a particular proceeding, courts consider “whether the place and process
-30-
have historically been open to the press and general public” and “whether public
access plays a significant positive role in the functioning of the particular process in
question.” Press-Enterprise, 478 U.S. at 8. In Press-Enterprise, the Court evaluated
whether the preliminary hearings at issue had a “tradition of accessibility” under the
first prong of the analysis, and concluded that from the early nineteenth century “until
the present day, the near uniform practice of state and federal courts has been to
conduct preliminary hearings in open court.” 478 U.S. at 10.
The prisoners assert that they have a similar right to know the identities of the
pharmacy that compounds the pentobarbital and of its suppliers of chemicals, yet they
fail to allege a “tradition of accessibility” to that information. We have reserved
judgment about whether even an execution itself must be made public, Rice v.
Kempker, 374 F.3d 675, 678 n.2 (8th Cir. 2004), and the prisoners have not alleged
facts or cited authority establishing that the particulars of execution methods have
“historically been open to the press and general public.” Press-Enterprise, 478 U.S.
at 8. The prisoners have alleged only that Missouri did not include the suppliers of
drugs for lethal injections as members of the confidential execution team before
October 2013. That the identities of the drug suppliers were not made confidential by
statute or regulation before October 2013 falls well short of the required “tradition of
accessibility” that might give rise to a right of access. Indeed, the prisoners do not
even allege that the information was accessible to the public before October 2013.
Even if the prisoners can show, moreover, that Missouri “at one time voluntarily
disclosed such information, it does not a tradition make.” Wood, 759 F.3d at 1095
(Bybee, J., dissenting). In sum, the prisoners fail to state a claim of a qualified right
of public access to information regarding the source of the compounded pentobarbital
to be used in their executions because they do not plausibly allege a history of
openness to the general public. The complaint likewise provides no basis to conclude
that public access to detailed information about execution protocols plays a significant
positive role in the functioning of the process in question, given that the practical
-31-
effect of public disclosure would likely be frustration of the State’s ability to carry out
lawful sentences.
The prisoners also argue that the confidentiality requirements of § 546.720.2
constitute a content-based restriction on access to information that merits strict
scrutiny. They rely on Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (2011), where the
Court held that a Vermont law prohibiting the sale and use of pharmaceutical
prescriber-identifying information was a restriction on “speech with a particular
content,” because sale of that information was permitted in certain exceptional
situations “based in large part on the content of a purchaser’s speech,” and subsequent
use of the information was limited to non-marketing purposes. Id. at 2662-63. The
Missouri statute challenged by the prisoners is different. The statute does not limit the
dissemination of identities of execution team members based on the identity of the
individual seeking that information and the likely content of that individual’s speech,
and the law does not limit the use of any such information to certain types of speech.
The prisoners thus fail to state a claim that § 546.720.2 is a content-based restriction
on access to information that merits strict scrutiny.
VIII.
The prisoners complain that the use of compounded pentobarbital as a lethal
drug in executions violates the federal Food, Drug, and Cosmetic Act, 21 U.S.C.
§§ 301, et seq., and the Controlled Substances Act. 21 U.S.C. §§ 801, et seq. They
acknowledge, however, that there is no private right of action under federal law to
enforce these alleged violations. 23 U.S.C. § 337(a); Buckman Co. v. Plaintiffs’ Legal
Comm., 531 U.S. 341, 349 n.4 (2001); Durr v. Strickland, No. 2:10-cv-288, 2010 WL
1610592, at *2-3 (S.D. Ohio), aff’d, 602 F.3d 788, 789 (6th Cir. 2010) (affirming
district court’s holding that no private right of action exists under the Controlled
Substances Act). Instead, they assert that the Missouri Administrative Procedure Act
-32-
gives them a private right of action to sue for alleged violations of the federal statutes.
The district court ruled that the prisoners failed to state a claim.
Under the Missouri APA, where there is no formal hearing before a state
agency in a contested case, a court may review a decision of an administrative officer
or body that “determin[es] the legal rights, duties or privileges of any person.” Mo.
Rev. Stat. § 536.150.1; see City of Valley Park v. Armstrong, 273 S.W.3d 504, 506-07
(Mo. 2009) (en banc); State ex rel. Yarber v. McHenry, 915 S.W.2d 325, 327-28 (Mo.
1995) (en banc). The court may determine whether the decision is “unconstitutional,
unlawful, unreasonable, arbitrary, or capricious or involves an abuse of discretion.”
Mo. Rev. Stat. § 536.150.1.
The prisoners fail to state a claim under the Missouri APA because they have
not alleged that the decision of corrections officials to adopt the execution protocol
determines their “legal rights, duties or privileges.” “Section 536.150 pertains only
to review of decisions affecting private rights and interests.” St. Louis Cnty v. State
Tax Comm’n, 608 S.W.2d 413, 414 (Mo. 1980) (en banc). “[T]o make a prima facie
case under Section 536.150, an individual must plead facts that, if true, would show
that he has been denied some legal right or entitlement to a privilege.” McIntosh v.
LaBundy, 161 S.W.3d 413, 416 (Mo. Ct. App. 2005). The plaintiff must thus identify
a “rule, statute, or other authority creating a legal right or entitlement.” Id. at 417.
The prisoners allege a right not to “be executed in a manner that violates federal
laws protecting the end-users of regulated pharmaceuticals.” They fail, however, to
identify a statute or other authority that creates a private legal right or entitlement.
The federal statutes cited in the complaint do not create private rights of action. The
prisoners cannot employ the Missouri APA to allege the denial of a private legal right
under the federal statutes when the federal statutes themselves do not create such a
private legal right.
-33-
* * *
The judgment of the district court is affirmed.
BYE, Circuit Judge, with whom MURPHY and KELLY, Circuit Judges, join,
dissenting.
The constitutionality of the death penalty itself is not before us in this case, and
we proceed on the assumption the death penalty is constitutional. While it follows
there must be a constitutional means of carrying out a death sentence, it has not been
determined that Missouri's current execution protocol is constitutional. The district
court erred in dismissing the death-row inmates' suit, and the death-row inmates
should have the opportunity to conduct discovery and fully litigate their claims. I
therefore respectfully dissent.
I
I disagree with the entirety of Part II of the majority's opinion, which dismisses
the death-row inmates' Eighth Amendment claim. The majority provides two
alternative reasons for dismissing the suit: (1) as a matter of law, the death-row
inmates' claim regarding the substantial risk of severe pain imposed by Missouri's
execution protocol is inadequately pled; and (2) the death-row inmates have failed to
adequately plead a readily-available alternative method of execution.
A
The majority first holds the death-row inmates have failed to plead sufficient
factual matter on the risk of harm to state a plausible claim of relief. 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." To withstand the State's Rule 12(b)(6)
-34-
motion, the complaint must contain sufficient factual allegations to "state a claim to
relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547
(2007). "Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citing Twombly, 550 U.S. at 555).
"[T]aking all facts alleged in the complaint as true, and making reasonable
inferences in favor of the nonmoving party," the death-row inmates have sufficiently
pled their Eighth Amendment claim. Smithrud v. City of St. Paul, 746 F.3d 391, 397
(8th Cir.) cert. denied, 135 S. Ct. 361 (2014). The death-row inmates' complaint
alleges the compounded pentobarbital used by Missouri creates a substantial risk of
harm and inflicts a substantial risk of severe pain. The death-row inmates have also
shown the risk of pain is objectively intolerable.
The death-row inmates' second amended complaint includes thirty-two attached
exhibits, including declarations and affidavits from medical professionals. The
pleadings demonstrate substantial concerns with compounded pentobarbital, including
potency levels, contamination, pH levels, and shelf-life. Despite such pleadings, the
majority concludes these potentialities are hypothetical and do not "rise[] to the level
of 'sure or very likely' to cause serious harm or severe pain." The majority takes
offense at the death-row inmates' "allegations of generalized harms" from
compounded pentobarbital, but such allegations are exactly what must be pled to
survive a Rule 12(b)(6) motion to dismiss. Rule 8 only requires "a short and plain
statement" showing the death-row inmates are entitled to relief. No higher pleading
standard is applicable to this suit. Cf. Fed. R. Civ. P. 9(b) (establishing heightened
pleading standards in certain cases, such as fraud or mistake). The death-row inmates
could not possibly include allegations more specific to the compounding done for or
by Missouri without the benefit of discovery. To know about Missouri's particular
compounding procedure and the particular dangers of such a procedure, the death-row
inmates need discovery about the various sources of the drugs, how the drugs are
-35-
compounded, whether the compounded drugs are tested for potency, contamination,
or pH levels, and how and for how long the compounded drugs are stored. Missouri
has steadfastly refused to disclose any information related to the compounded
pentobarbital. See e.g., In re Lombardi, 741 F.3d 888, 889 (8th Cir.), reh'g denied,
741 F.3d 903 (8th Cir.) and cert. denied sub nom. Zink v. Lombardi, 134 S. Ct. 1790
(2014) (ruling in favor of Missouri in an appeal "to prohibit the district court from
enforcing orders that [the State] must disclose in civil discovery, for use by opposing
counsel, the identities of (1) the physician who prescribes the chemical used in
Missouri executions, (2) the pharmacist who compounds the chemical, and (3) the
laboratory that tests the chemical for potency, purity, and sterility"). It is not the
death-row inmates' burden at the pleading stage to show their claims are "sure or very
likely;" the death-row inmates must merely show they have stated a claim for relief.
The majority is unconcerned with expert opinions and a host of other evidence
which shows improperly compounded pentobarbital would "sure or very likely" cause
unconstitutionally painful deaths. The majority acknowledges this evidence exists but
focuses on the one thing the death-row inmates cannot know at this stage: "specific
factual allegations regarding the production of the pentobarbital" to be used in their
executions. Because the death-row inmates have adequately pled that improperly
compounded pentobarbital is sure or very likely to cause pain and suffering at an
unconstitutional level, the death-row inmates have pled enough to survive a motion
to dismiss under Rule 12(b)(6). Thus, the death-row inmates should be allowed to
utilize discovery in the normal course of litigation to determine the actual process used
by Missouri's current compounding pharmacies.
B
In an alternative holding on the death-row inmates' Eighth Amendment claim,
the majority finds the death-row inmates failed to plead a specific readily-available
alternative method of execution and finds such a failure fatal to this suit. I disagree.
-36-
In Hill v. McDonough, 547 U.S. 573, 576 (2006), the Supreme Court examined
whether a death-row inmate challenging Florida's execution protocol had a cognizable
suit under 42 U.S.C. § 1983, or whether such a claim needed to be brought under 28
U.S.C. § 2254. The Supreme Court clarified that a challenge to a state's execution
procedure may proceed under § 1983, particularly when a "[c]omplaint does not
challenge the lethal injection sentence as a general matter but seeks instead only to
enjoin [the State] from executing [the plaintiff] in the manner they currently intend."
Hill, 547 U.S. at 580 (internal quotation marks omitted). In explaining the
requirements for a § 1983 challenge to execution protocols, the Supreme Court
considered and rejected the proposition that "a capital litigant's § 1983 action can
proceed [only] if . . . the prisoner identified an alternative, authorized method of
execution." Id. at 582. In rejecting that proposition, the Supreme Court explained
"[i]f the relief sought would foreclose execution, recharacterizing a complaint as an
action for habeas corpus might be proper." Id. "Imposition of heightened pleading
requirements, however, is quite a different matter. Specific pleading requirements are
mandated by the Federal Rules of Civil Procedure, and not, as a general rule, through
case-by-case determinations of the federal courts." Id. (citing Fed. R. Civ. P. 8 and
9; Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512-14 (2002)).
A year later, the Supreme Court addressed the pleading requirements of
exhaustion under the Prison Litigation Reform Act in Jones v. Bock, 549 U.S. 199
(2007). The Supreme Court, relying on the Federal Rules of Civil Procedure and
rejecting a heightened pleading requirement, found the usual practice under the
Federal Rules should be followed in § 1983 suits. The Supreme Court thereafter
reaffirmed the pleading requirements for death-row inmates: "And just last Term, in
Hill . . . , we unanimously rejected a proposal that § 1983 suits challenging a method
of execution must identify an acceptable alternative." Id. at 212. In addressing the
pleading requirements for death-row inmates challenging a method of execution, the
Supreme Court has been clear: there is no heightened pleading rule requiring inmates
to identify any alternative method of execution.
-37-
The majority dismisses these clear statements by the Supreme Court, and
instead relies on Baze v. Rees, 553 U.S. 35 (2008), to justify the imposition of a
heightened pleading standard. The Baze challenge to Kentucky's three-drug execution
protocol came to the Supreme Court in a declaratory judgment action after "[t]he trial
court held extensive hearings and entered detailed findings of fact and conclusions of
law." Id. at 41. The death-row inmates in Baze, challenging Kentucky's execution
protocol, alleged a readily-available alternative. The Supreme Court held "a
condemned prisoner cannot successfully challenge a State's method of execution
merely by showing a slightly or marginally safer alternative." Id. at 51. Rather, the
Supreme Court established that when an alternative method of execution is proposed,
"the proffered alternatives must effectively address a substantial risk of serious harm."
Id. at 52 (internal quotation marks omitted). And, if a death-row inmate puts forward
such a proposed alternative, it must be "feasible, readily implemented, and . . .
significantly reduce a substantial risk of severe pain." Id.
Baze does not establish the standard for all execution-protocol challenges.
Instead, Baze establishes that when death-row inmates can show a readily-available
alternative with sufficient documented advantages, "a State's refusal to change its
method can be viewed as 'cruel and unusual' under the Eighth Amendment." 553 U.S.
at 52. Baze reaches no further than this holding. Baze did not purport to limit Eighth
Amendment challenges of execution protocols to only those cases where death-row
inmates propose an alternative method, and Baze did not change the pleading
requirements for Eighth Amendment cases.
Despite the limited nature of Baze, the majority relies on Baze to establish that
death-row inmates must plead a feasible and readily-available alternative method of
execution. It is troubling the majority relies on Baze when Baze does not mention
pleading requirements or the Federal Rules of Civil Procedure. Webster v. Fall, 266
U.S. 507, 511 (1925) ("Questions which merely lurk in the record, neither brought to
the attention of the court nor ruled upon, are not to be considered as having been so
-38-
decided as to constitute precedents."). But perhaps most troubling is the majority's
reliance on Baze when Baze does not even mention Hill or Jones. Shalala v. Ill.
Council on Long Term Care, Inc., 529 U.S. 1, 18 (2000) ("Th[e Supreme Court] does
not normally overturn . . . earlier authority sub silentio . . . .").
The Supreme Court warns "that courts should generally not depart from the
usual practice under the Federal Rules on the basis of perceived policy concerns."
Jones, 549 U.S. at 212. Despite this rule, the majority bases its decision on policy
considerations: whether discovery and litigation would pressure Missouri's suppliers
and agents to discontinue providing the drugs for executions. The question of whether
discovery is appropriate or necessary is not currently before this court. Neither is the
question of an injunction about the potential harm the State might suffer from
disclosure of drug providers. The majority appears to impose a heightened pleading
standard for fear that this suit would otherwise eventually require the disclosure of
information which it fears would hamper Missouri's ability to carry out executions.
This is not a reason to impose a heightened pleading standard in opposition to
Supreme Court precedent and the Federal Rules of Civil Procedure.
If policy concerns were relevant to the establishment of case-by-case pleading
standards, policy concerns would weigh in favor of allowing this suit to proceed. It
is troubling that under the majority's rule, the constitutionality of an execution method
is determined not by the pain and suffering caused by that method, but rather by what
resources a death-row inmate can garner to show an available alternative. If the
manufacturers of safer drugs were willing to provide Missouri with execution drugs,
Missouri's current execution protocol would likely be held unconstitutional. See
Baze, 553 U.S. at 52 (discussing requirements for a § 1983 suit when an alternative
method of execution is readily available). In no other area do the private acts of third-
parties so influence the determination of whether a government act is unconstitutional.
Making it even more difficult for death-row inmates, they now must surpass these
-39-
barriers at the pleading stage, rather than at the summary judgment stage after the
completion of discovery.
Simply put, neither the Constitution nor the Federal Rules of Civil Procedure
require a plaintiff challenging the constitutionality of government actions to
simultaneously suggest a remedy–a remedy which cannot be to simply stop the
unconstitutional activity. Such a heightened pleading standard has not been required
in other constitutional cases, and should not be required here. Based on the foregoing
reasons, I dissent from the imposition of any heightened pleading standards when
death-row inmates challenge a state's method of execution.
C
Although I believe the pleading requirement imposed by the majority is an
incorrect application of the law, I recognize my position in the minority and therefore
find it prudent to comment on the resolution of this case. Even if the majority is
correct in imposing this additional pleading requirement, it is improper to dismiss the
death-row inmates' suit at this juncture. Rather, the matter should be remanded for the
death-row inmates to amend their complaint because the death-row inmates' second
amended complaint does, in fact, satisfy the pleading requirements previously
suggested by the Eighth Circuit.
In my view, in denying rehearing in the case of In re Lombardi the Eighth
Circuit clarified that death-row inmates alleging an Eighth Amendment violation
based on the method of execution must, in their pleadings, (1) "concede[] that 'other
methods of lethal injection the Department could choose to use would be
constitutional,'" In re Lombardi, 741 F.3d 903, 905 (8th Cir. 2014) (en banc) (quoting
Hill, 547 U.S. at 580); and (2) "allege[] 'that the challenged procedure presents a risk
of pain the State can avoid while still being able to enforce the sentence ordering a
lethal injection,'" id. (quoting Hill, 547 U.S. at 581). In their second amended
-40-
complaint, the death-row inmates "concede that other methods of lethal injection the
Department could choose to use would be constitutional." Zink v. Lombardi, No. 12-
4209, Doc. 338 at 202 (W.D. Mo. Feb. 2, 2014). Thus, the death-row inmates pleaded
exactly what In re Lombardi required of them: a concession "that other methods of
lethal injection the Department could choose to use would be constitutional." 741
F.3d at 905 (internal quotation marks omitted).
The Eighth Circuit now changes, once again, the pleading requirements for an
Eighth Amendment claim. Because the death-row inmates complied with In re
Lombardi, and because the Eighth Circuit is for the first time imposing a stricter
pleading requirement, a remand is proper. The death-row inmates should have the
opportunity to plead a named alternative method before the complaint is dismissed.
However, in light of today's ruling dismissing the complaint, the death-row inmates,
if they choose to do so, will have to settle for initiating new litigation in the district
court and filing a complaint which complies with the newly-established pleading
standards. For example, if the death-row inmates desire, the death-row inmates could
propose as an available alternative an execution protocol using pentobarbital which
was properly compounded at an FDA-approved compounding pharmacy, and has
thereafter been tested for identity, potency, purity, and contamination.
D
The majority also extends the imposition of a heightened pleading requirement
beyond the death-row inmates' Eighth Amendment claims. Without an explanation
of this extension, the majority resolves the death-row inmates' medical needs claim
"[f]or reasons discussed in Part II." The majority also dismisses the death-row
inmates' due process claim at least in part based on the death-row inmates' failure to
"plead[] a deprivation of rights under the Eighth Amendment." I disagree with any
extension of the heightened pleading requirement, and dissent from these portions of
the majority's opinion.
-41-
III
The majority opinion establishes heightened pleading requirements for death-
row inmates challenging a state's method of execution under the Eighth Amendment.
This imposition is in opposition to governing Supreme Court precedent and the
Federal Rules of Civil Procedure. In other words, the Eighth Circuit now prevents
death-row inmates from truly accessing the federal courts: a death-row inmate cannot
benefit from discovery and is prohibited from challenging even a truly unconscionable
method of execution if no other methods are readily available and obvious at the
pleading stage.
The death-row inmates have established the risk of using alleged compounded
pentobarbital to carry out an execution, and have conceded other forms of execution
are constitutional. Therefore, I would reverse the district court, stay the executions
of the death-row inmates pending resolution of the suit, and remand for the district
court to conduct discovery in its usual and normal course of business.
SHEPHERD, Circuit Judge, dissenting in part.
In Lombardi, because the prisoners had not conceded that other methods of
lethal injection which the state of Missouri could choose would be constitutional,
“[w]e were not required to address whether alleging that the current method of
execution creates a substantial risk of harm when compared to known and available
alternatives, without specifying an alternative, would be sufficient to state a claim in
light of Hill and Baze.” In re Lombardi, 741 F.3d. 903, 905 (8th Cir. 2014). The
court now holds, in Part II.B. of this opinion, that even with such a concession the
prisoners must indeed identify an alternative method of execution that is feasible, can
be readily implemented, and will significantly reduce a substantial risk of severe pain
in order to state an Eighth Amendment claim. I cannot agree with this conclusion.
-42-
First, it is not necessary for the court to reach this issue. In Part II.A. of this
opinion we explain that the second amended complaint’s Eighth Amendment
challenge to Missouri’s method of execution by lethal injection fails to state a claim
because it does not include the requisite plausible allegations that the lethal execution
protocol creates a substantial risk of severe pain. So holding, we need not reach the
issue of the sufficiency of the second amended complaint’s allegation of an alternative
method of execution. See Raby v. Livingston, 600 F.3d 552, 560-61 (5th Cir. 2010)
(“Because we find that Raby has failed to establish that the Texas lethal injection
protocol creates a demonstrated risk of severe pain, we do not reach the second step
of the Baze test, whether the risk created by the current protocol is substantial when
compared to the known and available alternatives.”).
Second, if in fact the issue is be addressed, I disagree substantively with the
court’s holding. In Hill v. McDonough, the Supreme Court considered whether a
prisoner’s Eighth Amendment challenge to Florida’s lethal-injection protocol could
proceed as a § 1983 action or must proceed as a habeas action. 547 U.S. 573, 576
(2006). In finding that the action could proceed under § 1983, the Court rejected the
government’s contention that the prisoner must plead an alternative means of
execution to state a § 1983 claim. Id. at 582. The Hill Court noted that “[s]pecific
pleading requirements are mandated by the Federal Rules of Civil Procedure, and not,
as a general rule, through case-by-case determinations of the federal court.” Id. (citing
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512-14 (2002)).
Lest there be any confusion about underpinnings of the holding, in its very next
term, in Jones v. Bock, the Supreme Court explained, “[J]ust last Term, in Hill v.
McDonough, we unanimously rejected a proposal that § 1983 suits challenging a
method of execution must identify an acceptable alternative.” 519 U.S. 199, 213
(2007) (internal citation omitted).
-43-
Reading Hill and Jones together, I cannot conclude that the Supreme Court has
mandated a heightened pleading standard requiring identification of an alternative
method of execution in this § 1983 action asserting an Eighth Amendment claim. The
Supreme Court explicitly rejected such a requirement in Jones, and I take the Court
to mean what it says. In Part II.B., this court attempts to confine Hill to its holding
that an Eighth Amendment challenge to a lethal injection protocol may proceed under
§ 1983 action rather than a decision relating to the sufficiency of a complaint under
the Federal Rules. In Jones, however, the Supreme Court addresses the adequacy of
a complaint under Rule 8 and rejects court devised heightened pleading requirements.
Finally, in Part II.B., the court identifies the risk that allowing protracted
discovery could have the practical effect of thwarting the State’s ability to carry out
any executions. Although I am cognizant of such a possibility, the Federal Rules of
Civil Procedure govern the sufficiency of the second amended complaint rather than
policy considerations. See Jones, 549 U.S. at 212 (“[C]ourts should generally not
depart from the usual practice under the Federal Rules on the basis of perceived policy
concerns.”).
For the reasons set forth in Part II.A. of the court’s opinion, the second
amended complaint’s Eighth Amendment challenge to Missouri’s lethal injection
protocol must be dismissed because it does not include the requisite plausible
allegations that the protocol creates the substantial risk of severe pain. However, I
cannot agree with the court’s conclusion that the prisoners must also identify an
alternative method of execution in the complaint.
Accordingly, I join in all but Part II.B. of this opinion.
______________________________
-44-
| {
"pile_set_name": "FreeLaw"
} |
17-0127-cv
U.S. Bank Nat’l Ass’n v. Dexia Holdings, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 13th day of December, two thousand seventeen.
PRESENT: JOSÉ A. CABRANES,
DEBRA A. LIVINGSTON,
SUSAN L. CARNEY,
Circuit Judges.
U.S. BANK NATIONAL ASSOCIATION, as Trustee for
the Registered Holders of Wachovia Bank
Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series
2006-C28, acting by and through its Special
Servicer CWCapital Asset Management LLC,
Plaintiff-Appellant, 17-0127-cv
v.
1
DEXIA HOLDINGS, INC., successor in interest to
Dexia Real Estate Capital Markets, f/k/a Artesia
Mortgage Capital Corporation,
Defendant-Appellee.
FOR PLAINTIFF-APPELLANT: GREGORY A. CROSS (Colleen M. Mallon
on the brief), Venable LLP, Baltimore, MD.
FOR DEFENDANT-APPELLEE: KENNETH I. SCHACTER (Dina R.
Kaufman on the brief), Morgan, Lewis &
Bockius LLP, New York, NY.
Appeal from a judgment of December 19, 2016 of the United States District Court for the
Southern District of New York (Paul A. Engelmayer, Judge).
UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the District Court’s judgment be and hereby is
AFFIRMED.
Plaintiff-Appellant U.S. Bank National Association, as Trustee for the Registered Holders of
Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 2006-C28, acting by and through its Special Servicer CWCapital Asset Management LLC
(“Trust”) appeals the District Court’s judgment awarding attorney’s fees to Defendant-Appellee
Dexia Holdings, Inc., successor in interest to Dexia Real Estate Capital Markets, formerly known as
Artesia Mortgage Capital Corporation (“Dexia”) in the litigation between them.
To resolve this appeal, we need reach only four of the Trust’s arguments. These arguments
are that the District Court erred in: (1) declining to adhere to what the Trust asserts was the law of
the case; (2) interpreting the plain language of the applicable contracts to require the Trust to pay
Dexia’s attorney’s fees; (3) declining to reduce the award of fees against the Trust to avoid an
inequitable result; and (4) refusing to offset Dexia’s recovery in a separate proceeding against the
attorney’s fee award in the instant case. Upon due consideration, we conclude—for substantially the
same reasons given by the District Court—that these arguments are without merit.1 See U.S. Bank
Nat’l Ass’n v. Dexia Real Estate Capital Mkts., No. 12 Civ. 9412, 2016 WL 4368377, at *7 (S.D.N.Y.
1
In light of our resolution of these four issues, we do not decide, for example, whether the
District Court “erred in interpreting the obligation to pay attorneys’ fees as a ‘remedy.’” Pl.-
Appellant Br. 35.
2
Aug. 12, 2016) (law of the case); id. at *4 (plain text of contracts); id. at *8 (equity); U.S. Bank Nat’l
Ass’n v. Dexia Real Estate Capital Mkts., No. 12 Civ. 9412, 2016 WL 6996176, at *4-7 (S.D.N.Y. Nov.
30, 2016) (offset).
CONCLUSION
We therefore AFFIRM the District Court’s judgment of December 19, 2016.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
3
| {
"pile_set_name": "FreeLaw"
} |
197 So.2d 69 (1967)
250 La. 509
STATE of Louisiana
v.
Henry BARBAR and Norman Ruth.
No. 48380.
Supreme Court of Louisiana.
March 27, 1967.
*70 Michael S. Ingram, William H. Brown, Baton Rouge, for appellants.
Jack P. F. Gremillion, Atty. Gen., William P. Schuler, Asst. Atty. Gen., Sargent Pitcher, Jr., Dist. Atty., Ralph L. Roy, Asst. Dist. Atty., for appellee.
HAMITER, Justice.
The defendants, Henry Barbar and Norman Ruth, were convicted of theft of property (a number of bottles of whiskey) of the value of $200, and each was sentenced to serve ten years at hard labor in the state penitentiary. They are appealing.
In order to obtain a reversal of the convictions and sentences defendants rely primarily on two perfected bills of exceptions, one taken to the overruling of certain objections made during the trial and the other to the denial of their motion for a new trial.
The bills were reserved under the following circumstances: The state produced as a witness one Joseph D. White, in whose possession the stolen property was ultimately found, who testified that he had purchased the whiskey from a Walker Ferguson for $60. The state then called Ferguson who, when questioned by the assistant district attorney, denied that he had delivered any whiskey to White or received any money from him. Whereupon, such attorney informed Ferguson that the state intended to impeach his testimony with a written statement made by him to police officers on a date prior to the trial and out of the presence of the defendants.
Defense counsel objected to the impeachment for the reason the state had not shown that it was actually surprised by the responses of its witness. But after a discussion among all counsel and the court, during which the jury was retired, the court ruled that the assistant district attorney, because he was surprised, could impeach the witness by questioning him about the prior written statement. The jury was then returned, and defense counsel reserved a bill upon the overruling of their objection.
Thereupon, the statement was read in its entirety to Ferguson in the presence of the jury. In it he had purportedly stated, in effect, that on the night following the alleged theft, at the request of the defendants, he had found a purchaser for whiskey which they said they wanted to get rid of; that they put the whiskey in his car and he delivered it to White; that White paid him $80 which he delivered to the defendants; and that they had given him $10. Defense counsel again objected urging that the statement "is rank hearsay." The objection was overruled and a bill reserved.
Following the reading of the written statement to Ferguson, in the presence of the jury, the assistant district attorney asked him if he had made it and if the signature thereon was his. He attempted to plead the Fifth Amendment, but was ordered by the court to answer the question. Whereupon, *71 he unequivocally admitted having made the statement. The state then offered it in evidence unrestrictedly as the state's Exhibit 1. Defense counsel objected to its introduction; however, the objection was overruled and the statement admitted. Again, a bill of exceptions was reserved.
All of the above recited objections and exceptions are embodied in the first perfected bill; and the mentioned evidence, as well as the remarks of the court and counsel made in connection with the objections, is attached to the bill.
In the motion for a new trial it was urged (among other things) that it was reversible error for the judge to permit the statement to go to the jury without any instruction or caution by him as to its effect, that is, that it was solely for the purpose of impeaching Ferguson's testimony and that it could not be used as substantive evidence on which to base a verdict of guilty. Defendants also reiterated therein their objection to the state's impeaching its own witness because of a failure to show surprise. The motion was overruled and the second perfected bill reserved.
We shall pretermit the question of whether the state established its surprise at Ferguson's testimony sufficiently to permit it to impeach him. This is done because we are of the opinion that, even if such surprise existed, it was reversible error for the judge to permit the statement to go before the jury without cautioning the latter in any way as to its limited use.
State v. Reed, 49 La.Ann. 704, 21 So. 732, contains the following pronouncement: "When the state proposes to impeach or attack the credibility of one of defendant's witnesses by proof of statements made by him out of court conflicting with those given on the stand, it is the duty of the district attorney to state to the witness what those prior statements were, and when and where made, and inquire of him whether or not he made the same. If the witness acknowledges to have done so, the prior statements so admitted by him to have been made should not be permitted to go to the jury as criminative evidence against the accused. This admission should not carry the prior statements to the jury as `substantive evidence' against the prisoner, but on the contrary the court should specially and expressly caution the jury from giving to it that effect. * * *"
In State v. Blassengame, 132 La. 250, 61 So. 219, we said: "* * * so far as we can discover from the record, the hearsay testimony of Roscoe, to the effect that Winston had made the statements to him, as indicated in the question propounded to Winston, was permitted to go to the jury as substantive testimony against defendant, with no warning that it was admitted merely for the purpose of impeaching the credibility of Winston.
"* * *
"* * * because of its materiality, it ought not to have been allowed to go to the jury as the hearsay testimony of Roscoe without instructions from the judge that it was admitted merely to prove that Winston had made the statements, but not that they were true, and that they were not to be taken as substantive evidence against defendant. State v. Reed et al., 49 La.Ann. 704, 709, 21 So. 732; State v. Robinson et al., 52 La.Ann. 616, 626, 27 So. 124."
Again relying on State v. Reed, supra, we reversed a conviction in State v. Paul, 203 La. 1033, 14 So.2d 826, observing: "* * * the conviction and sentence would have to be set aside, even if the evidence were admissible, for the reason that the trial court did not specially and expressly caution the jury that the impeaching evidence could not be considered as proof of the defendant's guilt. * * * In fact, the record indicates that the trial court did not instruct the jury at the time that this evidence was admitted as to what effect should be given it."
In the instant case we find that not only did the judge fail to caution the jury, specially and expressly, that the impeaching *72 evidence should not be considered as proof of defendants' guilt but, rather, he virtually told such body that it should so consider it. Thus, when the assistant district attorney asked the witness, after he admitted making the prior statement, "Were you lying then or now", the judge stated: "Well, it is up to the jury". This was almost identically what occurred in State v. Reed, supra, which conduct we found to constitute reversible error.
There is no doubt in this case but that the court's permitting the unsworn, hearsay statement to be read before the jury, as well as its subsequent introduction as criminative evidence against the accuseds, was highly prejudicial to them. Absent its consideration, there was no evidence to connect the defendants with the commission of the alleged offense. In this situation the inference is compelling that the jury (because it had not been instructed otherwise) improperly considered the statement as substantive evidence of the defendants' guilt. Tending to substantiate this conclusion is the following comment contained in the state's supplemental brief filed here: "* * * Thus, the jury had before it all of the circumstances for evaluation and the State submits correctly gave credence to the witness' [Ferguson's] testimony as contained in the written statement." (Italics and brackets ours.)
The state calls attention to the fact that defense counsel did not request the judge to give the proper instruction when the statement was introduced. We have carefully examined the records of the cases cited above and we find that in none of them was such a request made. Evidently, this court has aligned itself with those jurisdictions which declare that when such evidence is introduced it is incumbent on the judge, and is his duty, to especially and expressly instruct the jury as to its limited purpose.
We recognize that there are some jurisdictions which require that counsel request the proper instruction. However, even in some of them it has been said that the better procedure is for the court on its own motion to advise the jury of the restricted use of the evidence and that it should not be considered for any other purpose.
We believe that, in the absence of specific statutory authority to the contrary, this court should continue to follow the precedent already set down by its previous decisions. When an attempt is made to impeach a witness by the introduction of prior inconsistent statements the judge knows at once the limited purpose for which such evidence can be accepted. And it should be incumbent on him, and his duty, to so advise the jury without leaving it to the probability that, being laymen and not informed as to the niceties of the law, the members thereof will give it improper application.
The danger of such a probability is clearly recognized by this court in State v. Willis, 241 La. 796, 131 So.2d. 792, wherein we observed that the judge should instruct the jury as to the limited effect of impeachment evidence at the time it is admitted, and should not wait to include it later in his general instructions when such body would have to apply the instruction in retrospection. Moreover, we also said therein: "It is a legal principle, well recognized in our jurisprudence, that, when impeaching evidence is received, it becomes the duty of the judge to caution the jury that such evidence should not be considered as proof of defendant's guilt. State v. Reed, 49 La.Ann. 704, 21 So. 732; State v. Paul, 203 La. 1033, 14 So.2d 826 and State v. Rocco, 222 La. 177, 62 So.2d 265." (It so happened that in the Willis case there was a request of the judge for the special instruction. But the matter of its necessity was not an issue.)
For the reasons assigned the convictions and sentences herein are reversed and set aside and the case is remanded for a new trial.
| {
"pile_set_name": "FreeLaw"
} |
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 97-4354
___________
United States of America, *
*
Appellee *
* Appeal from the United States
v. * District Court for the
* District of Nebraska.
Luis J. Garcia-Florido, *
* [UNPUBLISHED]
Appellant. *
___________
Submitted: May 13, 1998
Filed: September 1, 1998
___________
Before BEAM, HANSEN, and MURPHY, Circuit Judges.
___________
PER CURIAM.
Luis Garcia-Florido appeals his sentence following a plea of guilty to drug
offenses. He contends that the district court erred in refusing to grant him relief under
the safety valve provisions of the Mandatory Minimum Sentencing Reform Act, 18
U.S.C. § 3553(f) and U.S. Sentencing Guidelines Manual § 5C1.2(5). We affirm.
Under the safety-valve exception to statutory minimum sentences, a defendant
may be given a more lenient sentence within the otherwise applicable guideline range
if, among other things, the defendant "truthfully provide[s] to the Government all
information and evidence the defendant has concerning the offense or offenses that
were part of the same course of conduct or of a common scheme or plan." U.S.S.G.
§ 5C1.2(5); see also United States v. Weekly, 118 F.3d 576, 581 (8th Cir. 1996),
dissent modified, 128 F.3d 1198 (8th Cir. 1997), cert. denied, 118 S. Ct. 611 (1997).
A defendant has the burden to show, through affirmative conduct, that he has given the
government truthful information and evidence about the relevant crimes before
sentencing. See id. We review for clear error the district court's finding that Garcia-
Florido did not satisfy that burden. See id.
The district court found that Garcia-Florido had not truthfully provided the
government with such information. That finding was based on Garcia-Florido's
testimony at the trial of his co-conspirator, Raul Ramirez. In our view, Garcia-
Florido's testimony in the Ramirez trial strains credulity. The district judge had
presided over the Ramirez trial and had an opportunity to observe Garcia-Florido's
testimony and demeanor. We find no clear error in the district court's failure to credit
Garcia-Florido's testimony.
Accordingly, Garcia-Florido's sentence is affirmed.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-2-
| {
"pile_set_name": "FreeLaw"
} |
110 F.Supp.2d 1144 (2000)
Scott D. NEUENDORF, Petitioner,
v.
Leonard GRAVES, Warden, Respondent.
No. C 99-2083-MWB.
United States District Court, N.D. Iowa, Eastern Division.
August 4, 2000.
*1145 *1146 David N. Nadler, Cedar Rapids, IA, for Petitioner.
Thomas W. Andrews, Asst. Iowa Atty. Gen., Des Moines, IA, for Respondent.
WITHDRAWAL OF REFERRAL TO MAGISTRATE JUDGE AND MEMORANDUM OPINION AND ORDER REGARDING RESPONDENT'S MOTION TO DISMISS
BENNETT, Chief Judge.
TABLE OF CONTENTS
I. WITHDRAWAL OF REFERRAL ........................................................ 1147
II. ORDER REGARDING MOTION TO DISMISS ............................................. 1147
A. Background ................................................................. 1147
B. Legal Analysis ............................................................. 1150
1. Claims asserted ......................................................... 1150
2. Timeliness of federal habeas corpus petitions ........................... 1152
a. Applicability of the § 2244(d)(1)(B) starting point ............. 1153
b. Applicability of the § 2244(d)(1)(D) starting point ............. 1154
c. Does "actual innocence" avoid § 2244(d)(1) time limitations? .... 1155
3. Sufficiency of Neuendorf's claim of "actual innocence" .................. 1157
a. Requirements of an "actual innocence" claim .......................... 1157
b. Neuendorf's allegations of "actual innocence" ........................ 1160
*1147
III. CONCLUSION .................................................................... 1162
Seeking a gateway to federal habeas corpus review, despite the respondent's contention that the present petition is untimely and procedurally barred, the petitioner asserts that he is "actually innocent" of the crime of second-degree sexual abuse of which he was convicted in 1992. No Circuit Court of Appeals has expressly held that the "actual innocence" gateway to federal habeas corpus review of defaulted claims remains open after codification of statutory time limitations and exceptions in the Anti-Terrorism and Effective Death Penalty Act (AEDPA) in 1996, although some courts have suggested that it does. Even if the gateway remains open, the court must determine whether this petitioner's allegations of "actual innocence" permit him to walk through it to obtain federal habeas corpus review.
I. WITHDRAWAL OF REFERRAL
Before considering the respondent's motion to dismiss the petitioner's petition for a writ of habeas corpus, however, this court must first address its prior referral of this matter to a magistrate judge. By order dated November 22, 1999, the undersigned referred this petition for habeas corpus relief pursuant to 28 U.S.C. § 2254, in its entirety, to United States Magistrate Judge Paul A. Zoss pursuant to 28 U.S.C. § 636(b)(1)(B). However, the court finds that it is now appropriate to withdraw that referral. Therefore, the November 22, 1999, referral of this matter to the magistrate judge will be withdrawn and the undersigned will rule upon the respondent's pending motion to dismiss.
II. ORDER REGARDING MOTION TO DISMISS
A. Background
Petitioner Scott D. Neuendorf filed the present action for habeas corpus relief on or before August 24, 1999,[1] seeking relief from his conviction for second-degree sexual abuse on March 7, 1992, after a jury trial. Neuendorf was sentenced to twenty-five years imprisonment on his conviction. Neuendorf's conviction was reversed on appeal to the Iowa Court of Appeals, but was ultimately reinstated by the Iowa Supreme Court. See State v. Neuendorf, 509 N.W.2d 743 (Iowa 1993). Neuendorf thereafter filed a state application for post-conviction relief, which was denied by the Iowa district court and the Iowa Court of Appeals in unpublished decisions. The Iowa Supreme Court denied further review, and procedendo from the Iowa Court of Appeals issued on August 26, 1997. Neuendorf filed a second state post-conviction relief application on December 1, 1998, but the Iowa district court dismissed that application as time-barred under IOWA CODE § 822.3 on April 1, 1999. Neuendorf did not appeal the denial of his second post-conviction relief application.
Instead, on or before August 24, 1999, Neuendorf filed the present petition for federal habeas corpus relief. In his federal petition, Neuendorf asserts, as "Ground One," that he received ineffective assistance of counsel amounting to a total failure of counsel to provide representation during his prosecution for second-degree sexual abuse, making his conviction fundamentally flawed, and, as "Ground Two," *1148 that other evidence not originally introduced at his trial can now be produced to demonstrate that he is actually innocent of the crime of which he was convicted. Although Neuendorf does not specifically identify in his petition the form or source of the "new evidence" on which he relies, he does contend that it is "actual proof beyond trial testimony that substantiates [Barbara McKinney's] presence," that is, presence of a defense witness at the time Neuendorf contends the victim, Maria Spates, agreed to have sex with Neuendorf and his companions for money, "and [the witness's] 20-year acquaintance with Maria Spates," which Spates denied at trial. Petition, ¶ 11.B.1. Neuendorf has always contended that no sexual abuse occurred, because Spates had engaged in consensual sex for money, and he now contends that this new evidence establishes his actual innocence, because "[i]t is not, for example, second degree sexual abuse to engage in consensual intercourse with a prostitute." Id.
On October 22, 1999, the respondent answered Neuendorf's petition and moved to dismiss it on the grounds that the petition was time-barred, that it failed to comply with Rule 2(c) of the Rules Governing Section 2254 Cases, and that Neuendorf's "actual innocence" claim is improperly exhausted, procedurally defaulted, fails to state a claim on its face, and fails on its merits.[2] Following the filing of respondent's motion to dismiss, a magistrate judge of this court sua sponte directed the Clerk of Court to appoint counsel to represent Neuendorf on December 2, 1999.
Notwithstanding appointment of counsel, Neuendorf initially filed a pro se resistance to the respondent's motion to dismiss on December 10, 1999,[3] in which he contended that he had not yet been afforded the opportunity to present his evidence of "actual innocence," but that the evidence is strong enough to overcome the court's confidence in the outcome of his state trial. He contends that his "actual innocence" opens a gateway to review, even if his claims might otherwise be timebarred. As to the nature of his evidence of "actual innocence," Neuendorf contends that "[r]ecanted testimony of the government's star witness is the quality of evidence Petitioner refers to here" and that "evidence pertaining to the government's subornation of perjury is the quality of formerly unavailable facts at the time of the Petitioner's trial." [Petitioner's Pro se] Response to Motion to Dismiss and Brief in Support at ii. However, Neuendorf did not immediately identify the source of any "new evidence," instead attacking the credibility of Spates's testimony as inconsistent with other evidence at trial and varying so greatly in the degree of detail on various matters that Neuendorf contends Spates's testimony showed it had been "coached" and that the prosecution had suborned "perjury." The only indication of the source of any "new evidence" appears in the penultimate paragraph of Neuendorf's pro se resistance, in which Neuendorf asserts, "There was talk about Maria [Spates] recanting her trial testimony, to which Barbara McKinney can testify to in an evidentiary hearing." Id. at 5.
*1149 Neuendorf then filed a pro se "Supplemental Resistance to State's Motion to Dismiss Petition" on December 27, 1999, in which he argued, in support of the viability of "Ground One" of his petition, that the prosecutor had engaged in misconduct, consisting of subornation of perjury by Maria Spates concerning testimony about her acquaintance with McKinney, whether McKinney was present at the time Spates entered the car with Neuendorf and his companion, and the extent of Spates's injuries received during the sexual abuse incident. Neuendorf contends that the prosecutor's misconduct was so egregious that it caused a fundamental miscarriage of justice, and that trial counsel was ineffective, because she let the perjured testimony go unchallenged, which also tarnished the constitutionality of his conviction. Neuendorf asserted that, "After the trial and conviction of Scott Neuendorf, McKinney came forward with further information (given to her by Spates and others) that Spates had lied about Scott's involv[e]ment and other key portions of her trial testimony." [Petitioner's Pro Se] Supplemental Resistance to State's Motion to Dismiss Petition at ¶ 4. Neuendorf does not explain when and how this information came to McKinney or when and how it was discovered by Neuendorf.
In a supplement to his motion to dismiss, filed on December 29, 1999, the respondent challenged what he described as Neuendorf's "newly minted" claim of prosecutorial subornation of perjury. Supplement to Respondent's Motion to Dismiss at 1. Treating the subornation of perjury allegations as an elaboration of Neuendorf's contention that there is "new evidence" of his actual innocence, the respondent contends that the evidence is insufficiently identified to amount to more than a bald assertion of its existence and effect. Treating the allegations of subornation of perjury as a separate claim which the respondent contends has not in fact been pleaded in the present petition the respondent asserts that any subornation of perjury claim is "unexhausted," and would therefore make Neuendorf's present petition a "mixed petition," which should be dismissed. The respondent contends that no prosecutorial misconduct claim has ever been presented to any state court.
After extensions of time to do so, Neuendorf's court-appointed counsel filed a resistance to the respondent's motion to dismiss and a brief in support of that resistance on April 7, 2000. Counsel characterized Neuendorf's pro se petition, filed on or before August 24, 1999, as asserting three grounds for relief: (1) ineffective assistance of counsel amounting to a total lack of counsel; (2) newly discovered evidence of actual innocence including evidence of subornation of perjury by the prosecutor; and (3) prosecutorial subornation of perjury showing actual innocence. Neuendorf's counsel contends that the present action is not time-barred under 28 U.S.C. § 2244(d)(1), as the respondent contends, because it was timely with respect to the deadlines found in § 2244(d)(1)(B) and/or (D). Counsel contends that § 2244(d)(1)(B) is applicable, because the state failed to disclose information that the prosecutor coerced Spates into giving perjured testimony and Neuendorf did not learn of that information until Leighten Manning, another prisoner, recently revealed to Neuendorf that Spates had told him she was coerced into implicating Neuendorf as a perpetrator of the crime against her. With regard to § 2244(d)(1)(D), counsel contends that Neuendorf did not discover his "new evidence" sooner, because his incarceration, including several months of prison-wide "lockdown," and his indigency prevented him from locating the evidence, and that Mr. Manning's information only recently came to light. Even if statutory grounds for delaying the beginning of the limitation period for the present action do not exist, counsel contends that "equitable tolling" is still available and is applicable here, because Neuendorf was prevented by the prosecution from discovering exculpatory evidence from Spates, the "lockdown" at *1150 his prison prevented him from working on his case or going to the law library, and his counsel on direct appeal and in his first post-conviction relief proceedings failed timely to respond to his requests for records of his case. Moreover, counsel contends that Neuendorf's claims of actual innocence open a gateway to review of otherwise untimely claims for habeas corpus relief. Counsel contends further that Neuendorf's pro se petition substantially complied with the requirements of Rule 2(c), so that the portion of the respondent's motion to dismiss grounded on non-compliance with that Rule should be denied. Counsel also contends that Neuendorf has adequately stated his claim of actual innocence and that such a claim does not require "exhaustion," or if it does, that exhaustion is excused, because there is no presently available means to obtain state review for the claim, and that this court has the discretion to entertain a "mixed petition." Counsel also submitted affidavits of Leighten Manning, the fellow inmate whose information purportedly provides some of the basis for Neuendorf's claim of newly discovered evidence of "actual innocence," as well as affidavits from Neuendorf's parents.
The respondent filed a reply brief and documents in support of his motion to dismiss on April 17, 2000. The respondent contends that the judge-made doctrine of "actual innocence" as a gateway to review of unexhausted claims cannot "trump" the limitations of the Anti-Terrorism and Effective Death Penalty Act (AEDPA). The respondent also contends that Neuendorf has not identified any federal constitutional right that is implicated by his claim of "actual innocence." Additionally, the respondent contends that the "actual innocence" claim here remains nothing more than unsupported assertions of innocence, that an "actual innocence" claim premised on supposed subornation of perjury has never been asserted in a verified petition, so that the claim is not properly before the court, and that such a claim is not properly exhausted. In any event, the respondent also challenges the adequacy of the evidence if it exists to meet the requirements of a claim of "actual innocence" to open a gateway to federal habeas corpus review. Although the respondent moved to strike Neuendorf's affidavits accompanying the resistance by counsel, the respondent also moved to expand the record to submit affidavits refuting Neuendorf's claim of subornation of perjury. By order dated May 23, 2000, a magistrate judge of this court permitted both parties to submit their competing affidavits.
B. Legal Analysis
1. Claims asserted
The first question the court must resolve to rule on the respondent's motion to dismiss is just what claims are actually asserted in Neuendorf's present federal habeas corpus action. As noted above, Neuendorf's pro se petition, filed on or before August 24, 1999, identified only two grounds for federal habeas relief: (1) a claim, asserted as "Ground One," that Neuendorf received ineffective assistance of counsel during his prosecution for second-degree sexual abuse, and (2) a claim, asserted as "Ground Two," that other evidence not originally introduced at Neuendorf's trial can now be produced to demonstrate that he is actually innocent of the crime of which he was convicted. Although Neuendorf does not specifically identify in his petition the form or source of the "new evidence" on which he relies, he does contend that it is "actual proof beyond trial testimony that substantiates [Barbara McKinney's] presence" that is, presence of this defense witness at the time the victim, Maria Spates, purportedly agreed to have sex with Neuendorf and his companions for money, as Neuendorf contends, or was forced into a vehicle at gunpoint, as the victim testified "and [McKinney's] 20-year acquaintance with Maria Spates" where Spates denied at trial that she knew McKinney. Petition, ¶ 11.B.1. In the petition, Neuendorf contends that this "new evidence" establishes *1151 his "actual innocence," because "[i]t is not, for example, second degree sexual abuse to engage in consensual intercourse with a prostitute." Id. See Petition at ¶ 11.A & B.
Although Neuendorf did not identify the form or source of the new evidence or when and how it was discovered, there is no inference in the petition that the "new evidence" consisted of evidence that Spates's testimony included perjury suborned by the prosecutor. Instead, the content and effect of the "new evidence," as alleged, was that it "substantiates" the testimony of defense witness Barbara McKinney and thus establishes that any sexual intercourse with the victim was consensual. Specific allegations that the "new evidence" demonstrates that Spates perjured herself, that the prosecutor suborned that perjury, and that Neuendorf's trial counsel was ineffective for failing to discover and demonstrate the perjury appear only in Neuendorf's pro se resistance and supplemental resistance to the motion to dismiss and in counsel's much later resistance. No amendment to the petition has ever been offered to assert either a "recantation" or "subornation of perjury" claim in the several months since the respondent's motion to dismiss was filed, even though Neuendorf's court-appointed counsel entered an appearance on Neuendorf's behalf and filed an additional resistance to the motion to dismiss.
Although this court must "liberally construe a pro se habeas petition, [the Eighth Circuit Court of Appeals] do[es] not require a district court to recognize an unarticulated argument." Miller v. Kemna, 207 F.3d 1096, 1097 (8th Cir.2000) (citing Frey v. Schuetzle, 78 F.3d 359, 361 (8th Cir.1996), for the liberal construction requirement, and Mack v. Caspari, 92 F.3d 637, 640 (8th Cir.1996), cert. denied, 520 U.S. 1109, 117 S.Ct. 1117, 137 L.Ed.2d 317 (1997), for the limitation on such construction). Thus, where a habeas petition contained no mention of appellate counsel, the Eighth Circuit Court of Appeals concluded that the ineffective assistance of appellate counsel was not adequately raised in the petition, and the appellate court declined to consider that claim. Id.; but see Petty v. Card, 195 F.3d 399, 399-400 (8th Cir.1999) ("liberal construction" of a pro se petitioner's habeas petition included claims presented in the petition and "supplemental pleadings"), petition for cert. filed, (Feb. 15, 2000) (No. 99-8243). Here, the court declines to treat a ground not specifically stated or reasonably implied in the petition as part of the present action, where the respondent promptly challenged the adequacy of the claims as actually asserted in the petition by filing a motion to dismiss, the petitioner was represented by counsel during the several months he was allowed to formulate a resistance to the motion to dismiss, no verified pleading asserting additional grounds for relief was ever filed, and no request for leave to amend the petition to assert additional or clarified claims was ever made, either by the petitioner pro se or by his counsel.
Therefore, the court will consider Neuendorf to be asserting only those claims actually asserted in his petition, and will rule on the respondent's motion to dismiss as it pertains to those claims; the court will not consider those claims as they may have been subsequently elaborated by allegations in various briefs, nor will the court consider such additional claims as appear to be asserted only in briefs.[4] The *1152 claims properly before the court are therefore (1) a claim of ineffective assistance of trial counsel, amounting to a complete failure to represent Neuendorf, and (2) a claim of newly discovered evidence of "actual innocence" in the form of evidence that "substantiates" the testimony of defense witness Barbara McKinney as to her acquaintance with the victim, Maria Spates, and her presence at the time Spates entered the vehicle with Neuendorf and his companions.
2. Timeliness of federal habeas corpus petitions
The respondent challenges the timeliness of the claims actually asserted in Neuendorf's petition. Under the Anti-Terrorism and Effective Death Penalty Act (AEDPA), petitions for habeas corpus relief are subject to a one-year statute of limitations as provided in 28 U.S.C. § 2244(d)(1). "By the terms of § 2244(d)(1), the one-year limitation period begins to run on one of several possible dates, including the date on which the state court judgment against the petitioner became final." Ford v. Bowersox, 178 F.3d 522, 523 (8th Cir.1999).[5] Where the petitioner's judgment became final before the effective date of the AEDPA on April 24, 1996, the Eighth Circuit Court of Appeals has adopted a one-year "grace" period, which ended on April 24, 1997, for the filing of habeas petitions. See Peterson v. Gammon, 200 F.3d 1202, 1204 (8th Cir. 2000); Mills v. Norris, 187 F.3d 881, 882 (8th Cir.1999); Ford, 178 F.3d at 523; Moore v. United States, 173 F.3d 1131, 1135-36 (8th Cir.1999); Nichols v. Bowersox, 172 F.3d 1068, 1073 (8th Cir.1999) (en banc). Moreover,
In Nichols v. Bowersox, 172 F.3d 1068, 1073 (8th Cir.1999) (en banc), [the Eighth Circuit Court of Appeals] held that time before the effective date of AEDPA, April 24, 1996, is not counted in computing the one-year period of limitation. Prisoners whose judgments of conviction became final before the effective date of AEDPA are given a one-year period after that date, or until April 24, 1997, plus any additional periods during which the statute is tolled.
Peterson, 200 F.3d at 1204.
Here, Neuendorf's conviction became "final" either on December 22, 1993, when, on direct appeal, the Iowa Supreme Court vacated the judgment of the Iowa Court of Appeals and affirmed the judgment of the Iowa district court, or possibly as late as January 20, 1994, the date on which the Iowa Supreme Court denied Neuendorf's request for rehearing. See 28 U.S.C. § 2244(d)(1)(A) (the limitation period runs from the date the state judgment becomes final upon conclusion of direct review). Either date is well before the effective date of the AEDPA, April 24, 1996. Thus, Neuendorf could have filed a timely habeas petition within the one-year "grace" limitation *1153 period, from the effective date of the AEDPA until April 24, 1997. See Peterson, 200 F.3d at 1204; Mills, 187 F.3d at 882; Ford, 178 F.3d at 523; Moore, 173 F.3d at 1135-36; Nichols, 172 F.3d at 1073. This he did not do.
Consequently, Neuendorf's petition for habeas corpus relief is only timely if the limitation period in § 2244(d)(1)(A) was tolled for all but a period of less than one year between April 24, 1996, and August 24, 1999, the date on which the petition in this action was filed by application of the "prison mailbox" rule to this habeas action, See Nichols, 172 F.3d at 1077; note 1, supra, or the limitation period began to run from a date other than the date on which Neuendorf's conviction became final. See 28 U.S.C. § 2244(d)(1)(B)-(D); Ford, 178 F.3d at 523 ("By the terms of § 2244(d)(1), the one-year limitation period begins to run on one of several possible dates, including the date on which the state court judgment against the petitioner became final."). Neuendorf contends that § 2244(d)(1)(A) does not provide the limitation period in this case. Rather, he contends that his petition is timely under either § 2244(d)(1)(B) or § 2244(d)(1)(D). The court will consider these contentions in turn.
a. Applicability of the § 2244(d)(1)(B) starting point
Neuendorf contends that the time for his federal habeas petition did not begin to run until less than a year before his petition was filed, because the starting point for the limitation period on his petition is defined by § 2244(d)(1)(B). Section 2244(d)(1)(B) provides that "[t]he limitation period shall run from ... the date on which the impediment to filing an application created by State action in violation of the Constitution or laws of the United States is removed, if the applicant was prevented from filing by such State action." 28 U.S.C. § 2244(d)(1)(B). A petitioner relying on this provision for the limitation period for a federal habeas action must "allege facts that establish that he [or she] was so inhibited by the State's action that he was unable to file and state a legal cause of action before the limitation period expired." Whalem/Hunt v. Early, 204 F.3d 907, 909 (9th Cir.2000) (action in which a habeas petitioner asserted that inadequacies of the prison library prevented him from learning of the AEDPA's limitation period), petition for reh'g en banc granted, 218 F.3d 1078 (9th Cir.2000) (NO. 99-55627). Also, the petitioner's filing of a petition for habeas relief before the alleged impediment was lifted suggests that the state action did not prevent the petitioner from timely filing the action. Felder v. Johnson, 204 F.3d 168, 171 n. 9 (5th Cir.2000), petition for cert. filed, (May 8, 2000) (No. 99-10243). Similarly, where the petitioner was able to present his constitutional claims in state court before expiration of the AEDPA deadline, despite the state's action, he was necessarily able to formulate and present such claims in compliance with the AEDPA's deadline for filing a federal habeas petition despite the state's action. Whalem/Hunt, 204 F.3d at 909.
Neuendorf contends that § 2244(d)(1)(B) establishes the limitation period applicable to his petition, because the state failed to disclose information that Spates was coerced by the prosecutor into implicating Neuendorf in the crime against her, and that impediment to his "actual innocence" claim was not lifted until Leighten Manning revealed to Neuendorf that Spates claimed she was coerced. This argument fails, because Neuendorf has not "allege[d] facts that establish that he was so inhibited by the [state's action] that he was unable to file and state a legal cause of action before the limitation period expired." Whalem/Hunt, 204 F.3d at 909; Felder, 204 F.3d at 171 n. 9.
First, none of Neuendorf's arguments for the timeliness of his petition under § 2244(d)(1)(B) relates to the claims Neuendorf actually asserted in his petition as filed on August 24, 1999. Instead, Neuendorf asserts the timeliness of the action under § 2244(d)(1)(B) on the basis *1154 of when impediments to his "recantation" and "subornation of perjury" claims were lifted.[6] Second, as to the claims properly presented, where McKinney testified at trial, and Neuendorf contested the sufficiency of the evidence of non-consensual sex in light of McKinney's testimony, see Neuendorf, 509 N.W.2d at 747-48 (affirming Neuendorf's conviction on direct appeal after considering his claim that "the victim was a prostitute and that the sex acts in question were for hire and thus consensual"), and, further, where Neuendorf now contends that the "new evidence" would only "substantiate" McKinney's prior testimony, Neuendorf has not "allege[d] facts that establish that he was so inhibited by the [state's action]," whatever that state action was, "that he was unable to file and state a legal cause of action" premised on the argument that McKinney's testimony established the consensual nature of sex with the victim "before the limitation period expired." Whalem/Hunt, 204 F.3d at 909. Moreover, Neuendorf does not identify the form of the "new evidence," when he discovered it, or what state action inhibited his ability to discover it or otherwise impeded his ability to assert a claim premised on it, such that his assertion that § 2244(d)(1)(B) provides the applicable deadline is unsupported and conclusory. Therefore, § 2244(d)(1)(B) does not provide the limitation period for the present habeas petition.
b. Applicability of the § 2244(d)(1)(D) starting point
Next, Neuendorf contends that the limitation period applicable to his claim is that stated in § 2244(d)(1)(D). Section 2244(d)(1)(D) provides that "[t]he limitation period shall run from ... the date on which the factual predicate of the claim or claims presented could have been discovered through the exercise of due diligence." 28 U.S.C. § 2244(d)(1)(D).
The Tenth Circuit Court of Appeals recently decided that the "due diligence" requirement in this provision should be considered in light of a habeas petitioner's confinement in prison and any special restrictions that incarceration might impose on such a person. See Easterwood v. Champion, 213 F.3d 1321, 1323 (10th Cir. 2000). In Easterwood, the factual predicate at issue was the mental instability of the state's expert witness in the petitioner's case, which factual predicate was not apparent until it was mentioned in another decision of the Tenth Circuit Court of Appeals. Id. The court noted that, "[u]nlike the general population which has greater access to court opinions, prisoners must rely exclusively upon the prison law library to discover information contained in new cases." Id. The court concluded that "[h]olding that a prisoner could with `due diligence' discover information related in a case before the prison law library has access to a copy of the opinion simply ignores the reality of the prison system." Id. However, the Fifth Circuit Court of Appeals has rejected the proposition that the "factual predicate" for a federal habeas action is the denial of the petitioner's *1155 claims in state post-conviction relief proceedings. See Ybanez v. Johnson, 204 F.3d 645, 646 (5th Cir.2000), petition for cert. filed, (June 29, 2000) (No. 00-5012). The court concluded that such an interpretation would accept an "extraordinary proposition: the factual predicate for their claims consists neither of evidence nor events at trial but in the state court's rulings on [the petitioner's] constitutional claims." Id. The court also noted that the habeas limitations statute already excluded from the limitation period time during which a petitioner's state claim was pending in a state court. Id. The Fifth Circuit Court of Appeals has also suggested that § 2244(d)(1)(D) applies to those who could not discover the factual predicate for their claims, not those who "sleep on their rights." Fisher v. Johnson, 174 F.3d 710, 715 & n. 14 (5th Cir.1999). The Fifth Circuit Court of Appeals has also held that § 2244(d)(1)(D) does not "convey a statutory right to an extended delay ... while a habeas petitioner gathers every possible scrap of evidence that might, by negative implication, support his claim." Flanagan v. Johnson, 154 F.3d 196, 199 (5th Cir. 1998).
In this case, Neuendorf contends that he did not discover his "new evidence" sooner, because his incarceration, including several months of prison-wide "lockdown," and his indigency prevented him from locating the evidence. He also contends that Mr. Manning's information only recently came to light. Again, Mr. Manning's information is irrelevant to the claims actually asserted in the petition filed in this action. Although incarceration, and especially a prison-wide "lockdown" that further limits a prisoner's access to information, might impose practical impediments to discovery of predicate facts beyond those experienced by members of the general public, see Easterwood, 213 F.3d at 1323, the court is not convinced that Neuendorf could not have discovered the predicate facts on which the claims he actually asserted in his petition rely in time to file a timely petition for federal habeas relief. Fisher, 174 F.3d at 715 & n. 14. Neuendorf has certainly contested the effectiveness of his trial counsel throughout his direct appeals and state post-conviction relief proceedings, just as he has challenged the sufficiency of the evidence of non-consensual sex in light of McKinney's testimony. See Neuendorf, 509 N.W.2d at 747-48. As the Fifth Circuit Court of Appeals explained, § 2244(d)(1)(D) does not "convey a statutory right to an extended delay ... while a habeas petitioner gathers every possible scrap of evidence that might, by negative implication, support his claim." Flanagan, 154 F.3d at 199. Moreover, since Neuendorf neither identifies the form of his "new evidence" or when and how it was discovered, his contentions that it was only just discovered and could not have been discovered sooner with due diligence are, again, unsupported and conclusory. Therefore, § 2244(d)(1)(D) does not provide the applicable limitation period in this case.
c. Does "actual innocence" avoid § 2244(d)(1) time limitations?
Thus, the timeliness of the present action depends on whether "actual innocence" avoids the time limitations imposed by Congress in § 2244(d)(1) and, of course, the further question of whether Neuendorf's "new evidence" is sufficient to open such a gateway around the time limitations. The Eighth Circuit Court of Appeals has not expressly ruled on the first of these questions. However, the Eighth Circuit Court of Appeals has repeatedly recognized that "actual innocence" can, at least theoretically, overcome other procedural defaults, allowing review in habeas actions. See Holt v. Bowersox, 191 F.3d 970, 974 (8th Cir.1999) ("[P]rocedural default may be excused and the petition reviewed if a petitioner can prove ... that a constitutional error led to his or her conviction despite his or her actual innocence."); accord Lee v. Kemna, 213 F.3d 1037, 1038 (8th Cir.2000); Mansfield v. Dormire, 202 F.3d 1018, 1024 (8th Cir. 2000); Johnson v. Norris, 170 F.3d 816, *1156 817 (8th Cir.1999). The reasonable conclusion from these decisions is that "actual innocence" can overcome the procedural default of timeliness requirements, even as timeliness is now codified under the AEDPA in 28 U.S.C. § 2244(d)(1).
As the Second Circuit Courts of Appeals explained in Lucidore v. New York State Div. of Parole, 209 F.3d 107 (2d Cir.2000), petition for cert. filed, (July 5, 2000) (No. 00-40), several Circuit Courts of Appeals have specifically suggested that the "actual innocence" gateway must remain open, notwithstanding the AEDPA's express time limitations, to avoid raising serious constitutional questions:
Here, the issues involved in Lucidore's habeas petition i.e., whether AEDPA's statute of limitations violates the Suspension Clause and whether, in order to survive a constitutional challenge, AEDPA must be read to include an "actual innocence" exception are "debatable among jurists of reason" as well as "adequate to deserve encouragement to proceed further." Notably, in Triestman v. United States, 124 F.3d 361, 378-79 (2d Cir.1997), we observed, without deciding the issue, that denial under AEDPA of collateral review to a party claiming actual innocence could raise serious Eighth Amendment and due process questions. Similarly, in Miller v. Marr, 141 F.3d 976, 978 (10th Cir.1998) [, cert. denied, 525 U.S. 891, 119 S.Ct. 210, 142 L.Ed.2d 173 (1998)], the Tenth Circuit suggested that where a constitutional violation results in the conviction of someone who is actually innocent, AEDPA's limitations period might raise serious constitutional questions. In In re Dorsainvil, 119 F.3d 245, 248 (3d Cir. 1997), moreover, the Third Circuit noted that "[w]ere no other avenue of judicial review available for a party who claims that s/he is factually or legally innocent as a result of a previously unavailable statutory interpretation, we would be faced with a thorny constitutional issue." In citing these cases, we do not suggest, in any way, that a specter of unconstitutionality necessarily is haunting AEDPA's statute of limitations merely that this is an important question that the courts have not yet addressed, much less resolved, and that given the unsettled nature of these issues, the certificate of appealability issued in this case was justified.
Lucidore, 209 F.3d at 112-13; but see Felder, 204 F.3d at 171 (decision of the Fifth Circuit Court of Appeals holding that the petitioner's "actual innocence claim also does not constitute a `rare and exceptional' circumstance, given that many prisoners maintain they are innocent," and thus did not provide a basis for equitable tolling of the AEDPA's time limitations). However, in Lucidore, the Second Circuit Court of Appeals, like the majority of its predecessors to recognize the importance of the constitutionality question, found that it could avoid passing on that question, because the petitioner had failed to demonstrate that he was actually innocent, so that the petitioner could not obtain review via this gateway, even if it was available. Id. at 113-14; see also Miller, 141 F.3d at 978 (although "actual innocence" might constitute a circumstance in which the limitations period under § 2244(d) for an action pursuant to § 2254 should be equitably tolled, the petitioner had not alleged his actual innocence); Triestman, 124 F.3d at 372 n. 15 (concluding that the petitioner's "actual innocence" claim "suffer[ed] from [a] lack of `newness'"); and compare United States v. Lloyd, 188 F.3d 184, 187-89 (3d Cir.1999) (concluding that the comparable timeliness provisions for a § 2255 action should be liberally construed to avoid constitutionality problems and that the petitioner had therefore filed a timely petition sufficiently alleging actual innocence of the offense of which he had been convicted); In re Dorsainvil, 119 F.3d at 248 (although the lack of habeas review for a person claiming "actual innocence" in light of the AEDPA's time limitations would present a "thorny constitutional issue," *1157 the petitioner in that case had recourse to 28 U.S.C. § 2241).
Similarly, several federal district courts have assumed that "actual innocence" would excuse non-compliance with the AEDPA's statute of limitations. See Rockwell v. Jones, 2000 WL 973675, *4-*5 (E.D.Mich. June 30, 2000) (assuming, without deciding, that "actual innocence" provided a gateway for review of habeas claims that are untimely under § 2244(d)(1), but finding no adequate showing of "actual innocence"); Silvestre v. United States, 55 F.Supp.2d 266, 268 (S.D.N.Y.1999) (concluding that, even if a claim of "actual innocence" permitted habeas review for a federal prisoner pursuant to § 2241, where an action pursuant to § 2255 was time-barred, the petitioner could not establish his "actual innocence," owing to the overwhelming level of proof presented by the government); Eisermann v. Penarosa, 33 F.Supp.2d 1269, 1273 (D.Haw.1999) (reading Schlup v. Delo, 513 U.S. 298, 329, 115 S.Ct. 851, 130 L.Ed.2d 808 (1995), to require equitable tolling of the AEDPA's statute of limitations upon a showing of "actual innocence," but noting that the petitioner had not asserted his "actual innocence"); Cromwell v. Keane, 33 F.Supp.2d 282, 287-88 (S.D.N.Y.1999) (agreeing with the conclusion in Alexander v. Keane, 991 F.Supp. 329, 338 (S.D.N.Y.1998), that the court should not consider whether constitutionality concerns required recognition of an "actual innocence" exception to the AEDPA's timeliness requirements, if there was no adequate showing of "actual innocence," and finding, as in Alexander, that the petitioner had not made a sufficient showing of "actual innocence"); United States v. Zuno-Arce, 25 F.Supp.2d 1087, 1101-02 (C.D.Cal.1998) (concluding in a § 2255 action that, under Schlup v. Delo, 513 U.S. 298, 115 S.Ct. 851, 130 L.Ed.2d 808 (1995), the AEDPA's one-year statute of limitations would not apply to a defendant's claims if the defendant could avail himself of the "miscarriage of justice gateway" by making a "colorable showing of factual innocence," but finding no sufficient showing of "actual innocence"), aff'd on other grounds, 209 F.3d 1095 (9th Cir.2000); Thomas v. Straub, 10 F.Supp.2d 834, 836 (E.D.Mich.1998) (even if "actual innocence" excuses an otherwise untimely petition, the petitioner had failed to show "actual innocence"); Alexander, 991 F.Supp. at 339 (finding no sufficient showing of "actual innocence," even if "actual innocence" would avoid the AEDPA's time limitations).
This court will therefore assume for now, without deciding, that a sufficient showing of "actual innocence" would open the gateway to federal habeas corpus review, even if the petition in which the claim is asserted is otherwise untimely under the AEDPA. The court will turn instead to the question of whether Neuendorf has sufficiently alleged his "actual innocence" to open this gateway, if it exists. Only if Neuendorf's allegations are sufficient will it be necessary for the court to return to the question of the availability of the gateway.
3. Sufficiency of Neuendorf's claim of "actual innocence"
a. Requirements of an "actual innocence" claim
"[A] claim of `actual innocence' is not itself a constitutional claim, but instead a gateway through which a habeas petitioner must pass to have his otherwise barred constitutional claim considered on the merits." Mansfield v. Dormire, 202 F.3d 1018, 1024 (8th Cir.2000) (citing Herrera v. Collins, 506 U.S. 390, 404, 113 S.Ct. 853, 122 L.Ed.2d 203 (1993));[7]Holt v. *1158 *1159 Bowersox, 191 F.3d 970, 974 (8th Cir.1999); Johnson v. Norris, 170 F.3d 816, 817 (8th Cir.1999). "Claims of `actual innocence' are extremely rare and are based on `factual innocence not mere legal insufficiency.'" United States v. Lurie, 207 F.3d 1075, 1077 n. 4 (quoting Bousley v. United States, 523 U.S. 614, 118 S.Ct. 1604, 140 L.Ed.2d 828 (1998)). Such a claim fails where the petitioner's "actual innocence" claim consists of nothing more than an unsupported allegation. Lurie, 207 F.3d at 1077 n. 4 (declining to consider whether "actual innocence" provides a gateway to bypass § 2255 requirements and proceed with a § 2241 habeas action where only unsupported allegations of "actual innocence" were presented). Rather, as the Eighth Circuit Court of Appeals recently explained, the claim requires satisfaction of two requirements: "An actual innocence claim requires [the petitioner] to show [1] `"new reliable evidence ... not presented at trial"' establishing [2] `"that it is more likely than not that no reasonable juror would have convicted [the petitioner] in the light of the new evidence."'" Lee v. Kemna, 213 F.3d 1037, 1039 (8th Cir.2000) (per curiam) (quoting Wyldes v. Hundley, 69 F.3d 247, 253-54 (8th Cir.1995), cert. denied, 517 U.S. 1172, 116 S.Ct. 1578, 134 L.Ed.2d 676 (1996), with citations in Wyldes omitted); Roberts v. Bowersox, 170 F.3d 815, 815 (8th Cir.1999) (per curiam); Johnson, 170 F.3d at 817-18; Malone v. Vasquez, 138 F.3d 711, 719 (8th Cir.), cert. denied, 525 U.S. 953, 119 S.Ct. 384, 142 L.Ed.2d 317 (1998).
As to the "new evidence" requirement, "`[t]he evidence is new only if it was not available at trial and could not have been discovered earlier through the exercise of due diligence.'" Johnson, 170 F.3d at 818 (quoting Amrine v. Bowersox, 128 F.3d 1222, 1230 (8th Cir.1997) (en banc), cert. denied, 523 U.S. 1123, 118 S.Ct. 1807, 140 L.Ed.2d 946 (1998)). Thus, the petitioner cannot make the required "new evidence" showing where for example, "the factual basis for the affidavits he relies on as new evidence existed at the time of trial and could have been presented earlier," Lee, 213 F.3d at 1039 (citing Meadows v. Delo, 99 F.3d 280, 282 (8th Cir.1996)), where "[t]here is no showing that [the witness] would not have testified at trial the same way that he did at the habeas hearing had he been asked the right questions," Johnson, 170 F.3d at 818, or where the allegation consists of no more than an assertion that trial counsel's failure to investigate the circumstances of the crime "probably caused" the petitioner's death sentence. Malone, 138 F.3d at 720 (noting that this allegation was insufficient to establish either a "gateway" claim under Schlup, 513 U.S. at 317, 115 S.Ct. 851, or to meet "the more exacting standard for a *1160 substantive claim of actual innocence"). The evidence must not only be "new," but "reliable," so that "a petitioner must support his claim of innocence with reliable new evidence, whether exculpatory scientific evidence, trustworthy eyewitness accounts, or critical physical evidence that was not presented at trial." Amrine, 128 F.3d at 1228 (citing Schlup, 513 U.S. at 322-24, 115 S.Ct. 851).
Courts from time to time reach the second requirement of an "actual innocence" claim, the impact-on-trial element, assuming, for the sake of argument, that the evidence is indeed "new." See Lee, 213 F.3d at 1039; Johnson, 170 F.3d at 818. However, even if the evidence is, or is assumed to be, "new," the petitioner must also show "with the required likelihood that reasonable jurors would not have convicted based on [that evidence]." Lee, 213 F.3d at 1039. In Lee, the court explained that the required likelihood is "that it is more likely than not" that no reasonable juror would have found the petitioner guilty. Id.; see also Malone, 138 F.3d at 719 (to obtain review, the petitioner must show that the new evidence is "sufficiently likely to warrant consideration of his procedurally defaulted claims") (emphasis added).[8] More specifically, "[i]n deciding whether a petitioner has made the necessary showing of innocence, a federal court must make its own determination of whether the `probative force of the newly presented evidence in connection with the evidence of guilt adduced at trial' is sufficient to warrant consideration of the otherwise barred claims." Amrine, 128 F.3d at 1227 (quoting Schlup, 513 U.S. at 330-32, 115 S.Ct. 851).
An actual innocence inquiry is necessarily fact intensive and the district court may be the most appropriate forum to consider whether the new evidence is reliable and what "reasonable triers of fact are likely to do." Schlup, [513 U.S.] at 330, 115 S.Ct. at 868. A petitioner can meet the standard even if "the trial record contained sufficient evidence to support the jury's verdict" because the district court must consider "the probative force" of the new evidence together with what was produced at trial.
Amrine, 128 F.3d at 1228. The question is, has Neuendorf alleged such evidence in this case?
b. Neuendorf's allegations of "actual innocence"
The court concludes that the answer to that question is no, either as to a "gateway" claim of "actual innocence," which would open a gateway to review of procedurally defaulted constitutional errors, or as to a "substantive" claim of "actual innocence." See Schlup, 513 U.S. at 313-17, 115 S.Ct. 851; see also supra n. 7. First, and sufficient in itself to close the gateway, Neuendorf's "actual innocence" claim consists of nothing more than an unsupported allegation that some "new evidence," in unknown form, exists that shows his "actual innocence." See Lurie, 207 F.3d at 1077 n. 4 (unsupported allegations are insufficient to demonstrate "actual innocence"). Neuendorf's petition gives no indication of the source or form of the "new evidence" on which he relies, beyond a bald assertion that it is "actual proof beyond trial testimony that substantiates [Barbara McKinney's] presence," that is, *1161 presence of a defense witness at the time Neuendorf contends the victim, Maria Spates, agreed to have sex with Neuendorf and his companions for money, "and [the witness's] 20-year acquaintance with Maria Spates," which Spates denied at trial. Petition, ¶ 11.B.1. From this unsupported assertion of the content of the evidence, Neuendorf asserts that its effect would be to establish his actual innocence, because "[i]t is not, for example, second degree sexual abuse to engage in consensual intercourse with a prostitute." Id. These conclusory, unsupported allegations simply are not enough to place an "actual innocence" claim before the court. Lurie, 207 F.3d at 1077 n. 4.
Furthermore, from Neuendorf's characterization, the evidence is neither entirely "new" nor "reliable." Certainly, as to evidence that McKinney had a long acquaintance with the victim, Maria Spates, such evidence could have been discovered earlier through the exercise of due diligence, not least because McKinney testified that the two had known each other for twenty years. See Johnson, 170 F.3d at 818 (defining "new" evidence as evidence that "was not available at trial and could not have been discovered through the exercise of due diligence"); see also Lee, 213 F.3d at 1039 (evidence is not "new" where the factual basis existed at the time of trial and could have been presented earlier). Thus, evidence substantiating McKinney's longstanding acquaintance with Spates is not "new." Nor is the evidence of McKinney's "presence" and "acquaintance" sufficiently "reliable" to support an "actual innocence" gateway claim. Neuendorf has not supported his claim with any affidavit outlining "a trustworthy eyewitness account." See Amrine, 128 F.3d at 1228. There is virtually no way to test the reliability of the evidence upon which Neuendorf relies, when he has not identified the form or source of the evidence. Compare Amrine, 128 F.3d at 1228 (the petitioner's claim was based on an affidavit of the only unchallenged witness at trial in which the witness recanted his trial testimony).
However, even supposing the evidence is "new," and "reliable," and that it "substantiates [Barbara McKinney's] presence and her 20-year acquaintance with Maria Spates," Petition, ¶ 11.B.1, the court concludes that it does not satisfy the second requirement for an "actual innocence" gateway claim. See Lee, 213 F.3d at 1039 (assuming, for the sake of argument, that the evidence was "new," and passing on to the second requirement); Johnson, 170 F.3d at 818 (same). Although an "actual innocence" inquiry may ordinarily be a fact-intensive inquiry, see Amrine, 128 F.3d at 1228, it need not be so here, because the court will assume that the evidence shows what Neuendorf alleges that it does. Even assuming the evidence is entirely credible a question that would ordinarily require an evidentiary hearing it still would not show "that it is more likely than not that no reasonable juror would have convicted [the petitioner] in the light of the new evidence." Lee, 213 F.3d at 1039 (citations omitted); Malone, 138 F.3d at 719. This is so, because the "probative force" of evidence that merely "substantiates" McKinney's acquaintance with Spates and her presence at the time Spates entered the vehicle with Neuendorf and his companions is inconsequential in light of evidence presented at trial that Spates was sexually abused far beyond the scope of any consent she might have given in an agreement to provide sex for money. See Amrine, 128 F.3d at 1228 ("a federal court must make its own determination of whether the `probative force of the newly presented evidence in connection with the evidence of guilt adduced at trial' is sufficient to warrant consideration of the otherwise barred claims") (quoting Schlup, 513 U.S. at 330-32, 115 S.Ct. 851). Although it may not be "second degree sexual abuse to engage in consensual intercourse with a prostitute," as Neuendorf contends, see Petition, ¶ 11.B.1, evidence at trial established that Spates was subjected to something far different from "consensual intercourse." Id. at 1228 (the court *1162 must consider "what `reasonable triers of fact are likely to do'" in light of the "probative force" of the "new" evidence as opposed to the evidence presented at trial) (quoting Schlup, 513 U.S. at 330, 115 S.Ct. 851).
In short, even assuming the evidence on which Neuendorf relies in his petition is "new," and "reliable" both of which the court doubts and that it shows what Neuendorf contends it shows, i.e., that it "substantiates" McKinney's acquaintance with Spates and her presence at the time Spates entered the vehicle with Neuendorf and his companions, nothing about this evidence establishes "that it is more likely than not that no reasonable juror would have convicted him in the light of the new evidence." Lee, 213 F.3d at 1039 (internal quotation marks and citations omitted). As such, it is insufficient to open the gateway to federal habeas review of procedurally defaulted claims, let alone to meet the more stringent showing of "actual innocence" that would be required to establish a "substantive" claim of "actual innocence." See Schlup, 513 U.S. at 316-17, 115 S.Ct. 851 (distinguishing between "gateway" and "substantive" claims of "actual innocence" in part on the basis that the former requires less burdensome proof than the latter); Malone, 138 F.3d at 720 (the "new evidence" presented was "insufficient to make out a gateway claim of actual innocence under Schlup, let alone the more exacting standard for a substantive claim of actual innocence," citing Schlup, 513 U.S. at 317, 115 S.Ct. 851).
III. CONCLUSION
The November 22, 1999, referral of this matter to the magistrate judge is hereby withdrawn. The respondent's October 22, 1999, motion to dismiss is granted. Neuendorf's August 24, 1999, petition for habeas corpus relief is dismissed as untimely and procedurally barred under 28 U.S.C. § 2244(d)(1), because Neuendorf has failed to allege sufficiently a claim of "actual innocence," either as a "substantive" claim, or as a gateway to review of his procedurally defaulted claims.
IT IS SO ORDERED.
NOTES
[1] Although Neuendorf's petition does not indicate when it was executed and placed in the prison mail system, see Nichols v. Bowersox, 172 F.3d 1068, 1077 (8th Cir.1999) (en banc) (holding that "for purposes of applying 28 U.S.C. § 2244(d), a pro se prisoner's petition for a writ of habeas corpus is filed on the date it is delivered to prison authorities for mailing to the clerk of the court"), his petition, filing fee, and application to proceed in forma pauperis were received and docketed by the Clerk of Court on August 24, 1999. In an initial review order dated September 16, 1999, the court denied the application to proceed in forma pauperis, on the ground that it was "moot," because Neuendorf had submitted the statutory filing fee, but directed the respondent to file an answer to the petition in accordance with the RULES GOVERNING SECTION 2254 CASES.
[2] The respondent filed a supplement to his motion to dismiss on November 12, 1999, consisting of the procedendo issued on August 26, 1997, by the Iowa Court of Appeals in Neuendorf's first post-conviction relief proceeding.
[3] On the same day Neuendorf filed his pro se resistance to the motion to dismiss, the respondent filed a motion to reconsider and vacate the order appointing counsel. Neuendorf filed an "Application for Appointment of Counsel and Resistance to Respondent's Motion To Reconsider and Vacate" on December 27, 1999, and an identical application and resistance on December 29, 1999. On December 28, 1999, the respondent notified the court by telephone that he was withdrawing his motion to reconsider and vacate, and the court therefore denied that motion as moot. The respondent did in fact file a withdrawal of his motion to vacate the order appointing counsel on December 29, 1999.
[4] Moreover, declining to construe the claims in the present action so broadly as to include unpleaded claims of recantation by the victim and subornation of perjury by the prosecutor will permit consideration of those claims in a separate petition, on adequate, verified allegations, and the timeliness of such a petition can then be considered in light of the timing of discovery of new evidence pertinent to those claims. The court recognizes that various procedural bars to such a separate petition, including timeliness, see 28 U.S.C. § 2244(d), and the bar on second or successive petitions unless authorized, see 28 U.S.C. § 2244(b), might be encountered, but a second or successive petition that is based on a "factual predicate [that] could not have been discovered previously through the exercise of due diligence" provides an exception to the bar on abuse of the writ. See id. at § 2244(b)(2)(B).
[5] The limitations provision provides as follows:
(d)(1) A 1-year period of limitation shall apply to an application for a writ of habeas corpus by a person in custody pursuant to the judgment of a State court. The limitation period shall run from the latest of
(A) the date on which the judgment became final by the conclusion of direct review or the expiration of the time for seeking such review;
(B) the date on which the impediment to filing an application created by State action in violation of the Constitution or laws of the United States is removed, if the applicant was prevented from filing by such State action;
(C) the date on which the constitutional right asserted was initially recognized by the Supreme Court, if the right has been newly recognized by the Supreme Court and made retroactively applicable to cases on collateral review; or
(D) the date on which the factual predicate of the claim or claims presented could have been discovered through the exercise of due diligence.
28 U.S.C. § 2244(d)(1) & (2).
[6] The court is not persuaded that Neuendorf's arguments would establish the timeliness of his unpleaded claims of "recantation" and "subornation of perjury," either. Neuendorf filed the present petition on or before August 24, 1999, despite the fact that Manning's affidavit indicates that he did not provide the information on which Neuendorf contends he relied until April 3, 2000. Thus, Neuendorf apparently filed the present petition before the state impediment of which he complains was lifted by revelations from Manning, making § 2244(d)(1)(B) inapplicable. See Felder, 204 F.3d at 171 n. 9. Moreover, Neuendorf filed his second state post-conviction relief application on December 1, 1998, asserting, inter alia, that Spates had recanted her trial testimony, but the Iowa district court found that Neuendorf could have asserted this claim within three years of his conviction, as required by IOWA CODE § 822.8. Thus, it appears that Neuendorf was already aware of a factual basis for his "new evidence" claim of victim recantation long before any impediment from state action was lifted by Manning's revelations. See Whalem/Hunt, 204 F.3d at 909. However, the court need not decide the timeliness of these unpleaded claims, because they are not properly before the court.
[7] For this reason, "`[t]he traditional remedy for claims of innocence based on new evidence, discovered too late in the day to file a new trial motion, has been executive clemency.'" Mansfield, 202 F.3d at 1024 (quoting Herrera, 506 U.S. at 417, 113 S.Ct. 853). In Schlup v. Delo, 513 U.S. 298, 115 S.Ct. 851, 130 L.Ed.2d 808 (1995), the Supreme Court distinguished between a "gateway" claim of "actual innocence" and a "substantive" claim of actual innocence as follows:
As a preliminary matter, it is important to explain the difference between Schlup's claim of actual innocence and the claim of actual innocence asserted in Herrera v. Collins, 506 U.S. 390, 113 S.Ct. 853, 122 L.Ed.2d 203 (1993). In Herrera, the petitioner advanced his claim of innocence to support a novel substantive constitutional claim, namely, that the execution of an innocent person would violate the Eighth Amendment. Under petitioner's theory in Herrera, even if the proceedings that had resulted in his conviction and sentence were entirely fair and error free, his innocence would render his execution a "constitutionally intolerable event." Id., at 419, 113 S.Ct., at 870 (O'CONNOR, J., concurring).
Schlup's claim of innocence, on the other hand, is procedural, rather than substantive. His constitutional claims are based not on his innocence, but rather on his contention that the ineffectiveness of his counsel, see Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984), and the withholding of evidence by the prosecution, see Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), denied him the full panoply of protections afforded to criminal defendants by the Constitution. Schlup, however, faces procedural obstacles that he must overcome before a federal court may address the merits of those constitutional claims. Because Schlup has been unable to establish "cause and prejudice" sufficient to excuse his failure to present his evidence in support of his first federal petition, see McCleskey v. Zant, 499 U.S. 467, 493-494, 111 S.Ct. 1454, 1469-1470, 113 L.Ed.2d 517 (1991), Schlup may obtain review of his constitutional claims only if he falls within the "narrow class of cases ... implicating a fundamental miscarriage of justice," id., at 494, 111 S.Ct., at 1470. Schlup's claim of innocence is offered only to bring him within this "narrow class of cases."
Schlup's claim thus differs in at least two important ways from that presented in Herrera. First, Schlup's claim of innocence does not by itself provide a basis for relief. Instead, his claim for relief depends critically on the validity of his Strickland and Brady claims. Schlup's claim of innocence is thus "not itself a constitutional claim, but instead a gateway through which a habeas petitioner must pass to have his otherwise barred constitutional claim considered on the merits." Herrera, 506 U.S., at 404, 113 S.Ct., at 862; see also 11 F.3d, at 740.
More importantly, a court's assumptions about the validity of the proceedings that resulted in conviction are fundamentally different in Schlup's case than in Herrera's. In Herrera, petitioner's claim was evaluated on the assumption that the trial that resulted in his conviction had been error free. In such a case, when a petitioner has been "tried before a jury of his peers, with the full panoply of protections that our Constitution affords criminal defendants," 506 U.S., at 419, 113 S.Ct., at 870 (O'CONNOR, J., concurring), it is appropriate to apply an "`extraordinarily high'" standard of review, id., at 426, 113 S.Ct., at 874 (O'CONNOR, J., concurring).
Schlup, in contrast, accompanies his claim of innocence with an assertion of constitutional error at trial. For that reason, Schlup's conviction may not be entitled to the same degree of respect as one, such as Herrera's, that is the product of an error free trial. Without any new evidence of innocence, even the existence of a concededly meritorious constitutional violation is not in itself sufficient to establish a miscarriage of justice that would allow a habeas court to reach the merits of a barred claim. However, if a petitioner such as Schlup presents evidence of innocence so strong that a court cannot have confidence in the outcome of the trial unless the court is also satisfied that the trial was free of nonharmless constitutional error, the petitioner should be allowed to pass through the gateway and argue the merits of his underlying claims.
Consequently, Schlup's evidence of innocence need carry less of a burden. In Herrera (on the assumption that petitioner's claim was, in principle, legally well founded), the evidence of innocence would have had to be strong enough to make his execution "constitutionally intolerable" even if his conviction was the product of a fair trial. For Schlup, the evidence must establish sufficient doubt about his guilt to justify the conclusion that his execution would be a miscarriage of justice unless his conviction was the product of a fair trial.
Our rather full statement of the facts illustrates the foregoing distinction between a substantive Herrera claim and Schlup's procedural claim. Three items of evidence are particularly relevant: the affidavit of black inmates attesting to the innocence of a white defendant in a racially motivated killing; the affidavit of Green describing his prompt call for assistance; and the affidavit of Lieutenant Faherty describing Schlup's unhurried walk to the dining room. If there were no question about the fairness of the criminal trial, a Herrera-type claim would have to fail unless the federal habeas court is itself convinced that those new facts unquestionably establish Schlup's innocence. On the other hand, if the habeas court were merely convinced that those new facts raised sufficient doubt about Schlup's guilt to undermine confidence in the result of the trial without the assurance that that trial was untainted by constitutional error, Schlup's threshold showing of innocence would justify a review of the merits of the constitutional claims.
Schlup, 513 U.S. at 313-317, 115 S.Ct. 851 (footnotes omitted) (emphasis in the original). Here, although Neuendorf asserts his "actual innocence" as "Ground Two" for relief in his petition, the court concludes that Neuendorf is asserting a "gateway" claim to review of other constitutional violations, because, like the petitioner in Schlup, he "accompanies his claim of innocence with an assertion of constitutional error at trial," id. at 316, 115 S.Ct. 851, ineffective assistance of counsel amounting to no representation at all. Petition at ¶ 11.A. Thus, "[Neuendorf's] conviction may not be entitled to the same degree of respect as one ... that is the product of an error free trial." Schlup, 513 U.S. at 316, 115 S.Ct. 851. Therefore, "if [Neuendorf] presents evidence of innocence so strong that a court cannot have confidence in the outcome of the trial unless the court is also satisfied that the trial was free of nonharmless constitutional error, [Neuendorf] should be allowed to pass through the gateway and argue the merits of his underlying claims," albeit "carry[ing] less of a burden" than a petitioner whose trial was otherwise error free: "For [Neuendorf], the evidence must establish sufficient doubt about his guilt to justify the conclusion that his [punishment] would be a miscarriage of justice unless his conviction was the product of a fair trial." Id.
[8] In Roberts v. Bowersox, 170 F.3d 815 (8th Cir.1999) (per curiam), the court required that the petitioner's application show the required likelihood "by clear and convincing evidence." Roberts, 170 F.3d at 816. However, it is not entirely clear whether the court was applying this standard to a "gateway" claim of "actual innocence" in order to obtain review for a constitutional claim, or a "substantive" claim of "actual innocence" in the absence of any other constitutional error. See id. (considering, first, whether the petitioner had met the requirements of 28 U.S.C. § 44(b)(1) for a second or successive habeas petition, and concluding that, "[t]o the extent Roberts may not have raised his claim of actual innocence before, he cannot satisfy the requirements of § 2244(b)(2), and does not attempt to do so," where § 2244(b)(2) permits consideration on habeas review of claims "not presented in a prior application" only where certain requirements are met).
| {
"pile_set_name": "FreeLaw"
} |
762 F.Supp.2d 217 (2010)
SANTANDER CONSUMER USA INC. and Drive Trademark Holdings, LP, Plaintiffs,
v.
Mark WALSH, Inofin, Inc, Drive USA 1, Inc. Drive USA 2, Inc. Drive USA 3, Inc. and Drive USA 4, Inc., Defendants.
Civil Action No. 08-11778-MBB.
United States District Court, D. Massachusetts.
November 30, 2010.
*222 Frank Alvarez, Hermes Sargent Bates, LLP, John F. Martin, John L. Turner, Jr., Gruber Hurst Johansen Hail LLP, Dallas, TX, Brian P. Voke, John A.K. Grunert, Campbell, Campbell, Edwards & Conroy, Boston, MA, for Plaintiffs.
Thomas P. O'Connell, Arlington, MA, for Defendants.
MEMORANDUM AND ORDER RE: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (DOCKET ENTRY # 37); AND PLAINTIFFS' MOTION FOR JUDGMENT ON THE PLEADINGS UNDER FRCP 12(C) AND MOTION TO STRIKE DEFENDANTS' COUNTERCLAIMS (DOCKET ENTRY # 34)
BOWLER, United States Magistrate Judge.
Pending before this court is a motion for summary judgment filed by defendants Drive USA 1, Inc., Drive USA 2, Inc., Drive USA 3, Inc. and Drive USA 4, Inc. ("Drive USA defendants" or "the Drive USA companies"),[1] Mark Walsh ("Walsh"), President of Drive USA, and Inofin, Inc. ("Inofin"), a Massachusetts corporation with a principal place of business in Rockland, Massachusetts (collectively: "defendants"). (Docket Entry # 37). Defendants seek summary judgment in this trademark infringement action on all counts in the complaint as well as on Count II of a counterclaim for declaratory relief. Plaintiffs Santander Consumer USA Inc. ("Santander"), formerly known as Drive Financial Services, LP, and Drive Trademark Holdings LP ("DTH") (collectively: "plaintiffs"), both having principal places of business in Texas, move for judgment on the pleadings under Rule 12(c), Fed.R.Civ.P. ("Rule 12(c)"), on counts I, III and IV in the counterclaim. They also *223 move to strike the declaratory judgment count in the counterclaim under Rule 12(f), Fed.R.Civ.P. ("Rule 12(f)"). (Docket Entry # 34). After conducting a hearing, this court took the motions (Docket Entry ## 34 & 37) under advisement.
PROCEDURAL BACKGROUND
Plaintiffs filed this action in October 2008. The five count complaint sets out trademark infringement, false designation of origin, unfair competition and trademark dilution claims under the Lanham Act, 15 U.S.C. §§ 1051 et seq. ("the Lanham Act"), in counts II and III and V. Count IV consists of claims for trademark infringement and unfair competition under Massachusetts statutory and common law.[2] In addition to the Lanham Act claims under sections 43(a) and 32, Count V includes a claim that defendants violated Massachusetts General Laws chapter 93A, section 11 ("chapter 93A"). The count also contains claims for trademark dilution under the Texas Anti-Dilution Statute codified in section 16.29 of the Texas Business and Commerce Code ("section 16.29") and section 13 of Massachusetts General Laws chapter 110H ("chapter 110H").[3] Finally, Count I seeks declaratory relief under the Lanham Act.
In February 2009, defendants filed a four count counterclaim. Count I is a fraudulent procurement claim under the Lanham Act, 15 U.S.C. § 1120 ("section 1120"). Count II seeks declaratory relief under the Lanham Act. In Count III, defendants allege federal antitrust violations under the Sherman Antitrust Act, 15 U.S.C. §§ 1-7 ("the Sherman Act"), on the basis of plaintiffs' monopolistic and anticompetitive trademarks. Count IV alleges a chapter 93A violation.
THE TRADEMARKS
Plaintiffs' trademarks, all registered, consist of the following: (1) registration number 2,503,943 ("registration 943"), which issued on November 6, 2001, for the mark DRIVE with a stylized D above the letter "V" for "financial services, namely, purchasing loans from automobile dealerships"; (2) registration number 2,503,946 ("registration 946"), which issued on November 6, 2001, for the mark D in a stylized format in relation to "financial services, namely, purchasing loans from automobile dealerships"; (3) registration number 2,514,867 ("registration 867"), which issued on December 4, 2001, for the mark DRIVE FINANCIAL SERVICES with financial services appearing underneath drive in a smaller typeset and a different font coupled with a stylized D appearing above the letter "V" in drive all in relation to "financial services, namely, purchasing loans from automobile dealerships"; (4) registration number 3,081,414 ("registration 414"), which issued on April 16, 2006, for the mark DRIVE FINANCIAL SERVICES in plain text for "financial services, namely, originating loans, purchasing loans and servicing auto loans"; and (5) registration number 3,081,262 ("registration 262"), which issued on April 18, 2006, for the mark DRIVE in plain text for "financial services, namely, originating loans, purchasing loans and servicing auto loans" (collectively: "the Drive Marks") (Docket Entry *224 ## 16 & 21, ¶¶ 4; Docket Entry # 1, Ex. 1).
Registrations 414 and 262 designate first use in 1999 whereas the remaining three registrations designate first use in 2000. The filing dates of registrations 414 and 262 are respectively March 10, 2005, and August 26, 2004. The applications leading to registration numbers 414 and 262 include declarations by DTH that, to the best of its knowledge and belief, no other person or corporation had the right to use the service marks in commerce in relation to automobile financial services. Registration 414 disclaims exclusive rights to the phrase financial services apart from the mark itself, i.e., DRIVE FINANCIAL SERVICES.
On July 2, 2004, Inofin filed application serial number 78445657 ("application 657") in the PTO directed to the mark DriveUSA for financing services, auto loans, vehicle loans and related services relative to international class 036, the same class as the Drive Marks. The application sought registration in additional classes for automobile related services.[4] An amendment to the application identifies the first use of the mark as July 27, 2004. Inofin subsequently executed and recorded with the PTO an assignment of application 657 to Walsh.
The July 2004 filing date for application 657 precedes the March 2005 filing date of the application that led to registration 414 for the DRIVE FINANCIAL SERVICES mark. The July 2004 filing date for application 657 also precedes the August 2004 filing date of the application that led to registration 262 for the DRIVE mark.
Litigation ensued in the Trial and Trademark Appeal Board of the United States Patent and Trademark Office ("TTAB") when DTH opposed application 657 for international class 036. Plaintiffs also instituted suit against defendants in the United States District Court for the Northern District of Texas ("the Texas court"). (Docket Entry # 46, Ex. 3, ¶ 4).
I. DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (DOCKET ENTRY # 37)
In seeking summary judgment, defendants submit there is an absence of a likelihood of confusion between the DriveUSA mark and the Drive Marks. According to defendants, the absence forecloses relief on the federal and common law trademark infringement claims in counts II and IV, the federal, state and common law unfair competition claims in counts IV and V, the assertion of willful infringement and the false designation of origin claim in Count III.
In addition to dismissing the declaratory relief sought in Count I, defendants move for summary judgment on Count II of the counterclaim and seek a declaration that registrations 414 and 262 are invalid because the term drive is descriptive which, coupled with the disclaimed rights for financial services, is not entitled to trademark protection. They further maintain that the descriptive Drive Marks in these registrations lack secondary meaning. Accordingly, they are not subject to trademark protection.
As a final argument, defendants contend that the Drive Marks are neither famous nor distinctive and there is no likelihood of dilution. Accordingly, defendants move for summary judgment on the trademark dilution claims under Texas and Massachusetts law in Count V.
*225 STANDARD OF REVIEW
Summary judgment is designed "`to pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required.'" Davila v. Corporacion De Puerto Rico Para La Difusion Publica, 498 F.3d 9, 12 (1st Cir.2007). It is appropriate when the summary judgment record shows "there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law." Rule 56(c), Fed.R.Civ.P. "A dispute is genuine if the evidence about the fact is such that a reasonable jury could resolve the point in the favor of the non-moving party." American Steel Erectors, Inc. v. Local Union No. 7, International Association of Bridge, Structural, Ornamental & Reinforcing Iron Workers, 536 F.3d 68, 75 (1st Cir.2008). "A fact is material if it carries with it the potential to affect the outcome of the suit under the applicable law." Id.
DISCUSSION
A. Likelihood of Confusion
Defendants devote the majority of their arguments to the absence of a likelihood of confusion. Likelihood of confusion is an essential element of a trademark infringement claim under the Lanham Act. See Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d 1, 12 (1st Cir.2008) ("[t]o succeed on a claim of trademark infringement, a plaintiff must establish . . . that the allegedly infringing use is likely to cause consumer confusion"). The same likelihood of confusion standard applies to the unfair competition and false designation of origin claims. See Venture Tape Corp. v. McGills Glass Warehouse, 540 F.3d 56, 61 n. 6 (1st Cir.2008) ("Venture's unfair competition claim (Count 2) and false designation claim (Count 3) are subject to the same legal standard-namely, `likelihood of confusion'as its Count 1 infringement claim"). To survive summary judgment, plaintiffs must show "a substantial likelihood of confusion." Beacon Mut. Ins. Co. v. OneBeacon Ins. Group, 376 F.3d 8, 18 (1st Cir.2004) ("Beacon Mutual acknowledges that it must demonstrate a substantial likelihood of confusion to survive summary judgment"). The summary judgment inquiry therefore turns upon whether a "reasonable factfinder could find a substantial likelihood of confusion." Id. at 18.
The confusion must "`exist in the mind of a relevant person.'" Id. at 10. The relevant person is not only the actual or the potential buyer of the product. Id. at 16 ("likelihood of confusion inquiry is not limited to actual or potential purchasers, but also includes others whose confusion threatens the trademark owner's commercial interest in its mark"). Rather, it includes "the minds of persons in a position to influence the purchasing decision or persons whose confusion presents a significant risk to the sales, goodwill, or reputation of the trademark owner." Id. at 10. As such, the relevant persons include the individuals at the dealerships suggesting or initiating the financing as well as the automobile purchasers at the dealerships purchasing the financing.
The non-exclusive list of factors to assess likelihood of confusion under section 43(a) of the Lanham Act is:
(1) the similarity of the marks; (2) the similarity of the goods (or, in a service mark case, the services); (3) the relationship between the parties' channels of trade; (4) the juxtaposition of their advertising; (5) the classes of prospective purchasers; (6) the evidence of actual confusion; (7) the defendant's intent in adopting its allegedly infringing mark; and (8) the strength of the plaintiff's mark.
*226 The Shell Co. (Puerto Rico) Ltd. v. Los Frailes Service Station, Inc., 605 F.3d 10, 22 & n. 9 (1st Cir.2010); accord Venture Tape Corp. v. McGills Glass Warehouse, 540 F.3d at 60 (citing these factors). The inquiry is "highly fact-intensive." The Shell Co. (Puerto Rico) Ltd. v. Los Frailes Service Station, Inc., 605 F.3d at 22 ("application of those factors to the record is a highly fact-intensive inquiry").
"[S]imilarity is determined on the basis of the designation's total effect." International Ass'n of Machinists and Aerospace Workers, AFL-CIO v. Winship Green Nursing Center, 103 F.3d 196, 203 (1st Cir.1996); accord Beacon Mut. Ins. Co. v. OneBeacon Ins. Group, 376 F.3d at 18 (similarity "factor is evaluated based on the `the designation's total effect'"). More specifically, the inquiry turns upon the total effect examining the similarity "in sound, appearance, and meaning." Volkswagenwerk Aktiengesellschaft v. Wheeler, 814 F.2d 812, 817 (1st Cir.1987); accord Recot, Inc. v. Becton, 214 F.3d 1322, 1329 (Fed.Cir.2000) ("similarity or dissimilarity of the marks in their entirety is to be considered with respect to appearance, sound, and connotation").
In the case at bar, the overall appearances of the marks are somewhat similar. With the exception of the marks in registrations 946 and 414, the Drive Marks and the DriveUSA mark use larger and smaller fonts to emphasize the prominent portions which also overlap. Although the overall impressions both conjure strong and emphatic statements, the sight, sound and appearance of the more succinct "D" and the drive in the Drive Marks convey a stronger, more emphatic sound, sight and appearance than the DriveUSA mark. While this court recognizes that the ultimate determination is the total effect, a jury could readily find that the common portion of the marks, to wit, drive, is weak. See 4 Thomas McCarthy, McCarthy on Trademarks and Unfair Competition §§ 23.48 & 23.39 (4th ed.2008) (if "common element of conflicting marks is a word that is `weak' then this reduces the likelihood of confusion" and portion of "mark may be `weak' in the sense that such portion is descriptive, highly suggestive, or is in common use by many other sellers in the market"); see also Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d at 24. On balance, a reasonable jury could find the total effect of the DriveUSA mark similar to the Drive Marks in registrations 414, 262, 867 and 943.[5]
Examining the relevant factors and viewing the record in plaintiffs' favor, both parties provide services for dealer originated subprime financing for automobiles.[6] On the other hand, defendants also sell, repair and maintain automobiles and operate automobile dealerships. The services are by no means identical but there is sufficient overlap and relatedness of the parties' services to generate confusion. See Volkswagenwerk Aktiengesellschaft v. Wheeler, 814 F.2d at 818; see also Beacon Mut. Ins. Co. v. OneBeacon Ins. Group, 376 F.3d at 19 (paraphrasing Wheeler in parenthetical as "finding similarity of goods and services between a shop specializing in Volkswagen repair and distributors that both sold and repaired Volkswagens").
The channels of trade, advertising and classes of prospective purchasers similarly *227 allow a reasonable jury to find in plaintiffs' favor. The factual evidence, however, weighs in defendants' favor on these factors but nonetheless provides some evidence indicative of a likelihood of confusion. Walsh, the owner of the Drive USA companies since September 2005, had automobile dealerships in Springfield and Raynham, Massachusetts and one in Providence, Rhode Island, at the time of a February 2008 deposition.[7] The dealerships sell new and used automobiles and initiate loans which Inofin, a subprime automobile finance company, may then purchase. Defendants undeniably provide significant other services and goods beyond dealer originated subprime automobile financing.
Plaintiffs are a leading provider of automobile finance programs and, beginning in 1999 and 2000, began using the Drive Marks in connection with subprime financing services. Automobile dealers enter into dealer retail agreements ("dealer partners") with Santander and then communicate plaintiffs' financing services to consumers, including those located in Massachusetts and Rhode Island. A reasonable jury could find that the amount of care used by the relevant person purchasing subprime financing for an automobile is far less than the care used by the same person in deciding which automobile to purchase. Both plaintiffs and defendant advertise their respective marks on the internet. Using their marks, plaintiffs and defendants participate in the market of dealer generated subprime financing of automobile purchases. For example, defendants' internet advertisements include hyperlinks to complete an application for financing and note, "We are experts in the subprime market and really can help you purchase and finance a quality vehicle regardless of your credit." (Docket Entry # 46, Ex. 1-12b). Defendants also use the DriveUSA mark in print, radio, television and other advertising media. The classes of prospective purchasers as well as the channels of trade overlap albeit not to the degree or lack of degree asserted by either party.
The evidence of actual confusion, including the affidavit of Scott Joscelyn, strongly favors defendants. Furthermore, evidence of actual confusion is oftentimes "considered the most persuasive evidence of likelihood of confusion because past confusion is frequently a strong indicator of future confusion." Beacon Mut. Ins. Co. v. OneBeacon Ins. Group, 376 F.3d at 18. "[A]ctual confusion is not a prerequisite to a finding of likelihood of confusion," Visible Systems Corp. v. Unisys Corp., 551 F.3d 65, 74 (1st Cir.2008), however, and a consideration of all of the factors and the factual record as a whole record leads to a denial of summary judgment. As to the seventh factor, there is little, if any, evidence of bad faith in adopting the Drive USA mark.
The eighth factor of the strength of plaintiffs' marks entails assessing "`the length of time the mark has been used, its renown in the plaintiff's field of business, and the plaintiff's actions to promote the mark.'" Beacon Mut. Ins. Co. v. OneBeacon Ins. Group, 376 F.3d at 19. The Drive Marks are reasonably strong. In use since as early as 1999, plaintiffs have invested significant funds to promote the Drive Marks although there is little to indicate that the investment is targeted *228 towards the Massachusetts and Rhode Island markets. The Drive Marks are widespread in the field of dealer originated subprime automobile financing. Plaintiffs promote the marks through internet websites, newsletters to dealerships, presence at trade shows, sponsorships of a nationally televised golf tournament and sponsorships of charity events. Plaintiffs also employ sales manager throughout the United States. Plaintiffs therefore engage in significant efforts to promote the Drive Marks.
In conclusion, assessing and weighing all of the relevant factors, summary judgment in defendants' favor on likelihood of confusion is not appropriate.[8]
B. Trademark Protection
Defendants next maintain that the term drive is merely a descriptive term that lacks secondary meaning and therefore trademark protection. "Descriptive marks are those that convey an immediate idea of the ingredients, qualities or characteristics of the goods or services to which they are attached." Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d at 13 (internal quotation marks and brackets omitted). Descriptive marks receive trademark protection only with secondary meaning. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768-769, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992); Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d at 13; Boston Beer Co. Ltd. Partnership v. Slesar Bros. Brewing Co., Inc., 9 F.3d 175, 180 (1st Cir.1993).
For purposes of summary judgment only, this court assumes that the Drive Marks are descriptive. There is nonetheless sufficient evidence of secondary meaning to allow a reasonable jury to find in plaintiffs' favor.[9]
"A mark is entitled to trademark protection if it is capable of functioning as a source-identifier of goods." Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d at 12. For purposes of summary judgment, this court assumes that the Drive Marks convey an immediate idea of the ingredients, qualities or characteristics of the service, see id. at 13, in this instance dealer originated subprime automobile financing.[10] To avoid summary judgment therefore requires plaintiffs to make a sufficient showing of secondary meaning. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. at 768-769, 112 S.Ct. 2753; Borinquen Biscuit v. M.V. Trading Corp., 443 F.3d 112, 116-118 (1st Cir.2006); 2 J. Thomas McCarthy McCarthy on Trademarks and Unfair Competition § 1533 (4th ed.2008). In order to find secondary meaning, the public must not only associate the marks with automobile financing "but also with a single commercial source." Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d at 13.
The plaintiff bears "the burden of proving that secondary meaning has attached *229 within the relevant class of consumers." Flynn v. AK Peters, Ltd., 377 F.3d 13, 19 (1st Cir.2004) (establishing "`secondary meaning in a word is an issue of fact'" and the party "seeking protection for a mark bears the burden of proving that secondary meaning has attached within the relevant class of consumers"); see generally Peoples Federal Savings Bank v. People's United Bank, 750 F.Supp.2d 217, 223-24 (D.Mass.2010) (quoting Boston Beer Co. Ltd. Partnership v. Slesar Bros. Brewing Co., Inc., 9 F.3d at 181). In discharging this burden, the plaintiff may use "direct evidence, such as consumer surveys or testimony from consumers, or" circumstantial evidence. Id. at 20.
Secondary meaning customarily entails "weigh[ing] a number of factors." I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27, 42 (1st Cir.1998). In addition to direct evidence of customer copying, factors include "(1) the length or exclusivity of use of a mark; (2) the size or prominence of the plaintiff's enterprise; (3) the existence of substantial advertising by plaintiff; (4) the products established place in the market; and (5) proof of intentional copying." Bay State Sav. Bank v. Baystate Financial Services, LLC, 484 F.Supp.2d 205, 214 (D.Mass.2007) (citing I.P. Lund Trading v. Kohler Co., 163 F.3d at 42).
Examining the factors in the case at bar and viewing the facts in plaintiffs' favor, plaintiffs have used the marks in registrations 414 and 262 since 1999 as a means to distinguish their automobile financing services in the dealer originated subprime market. Plaintiffs have used the other marks since 2000. Indeed, plaintiffs use the Drive Marks in virtually all marketing efforts aimed at automobile dealerships, consumers who purchase automobiles using plaintiffs' financing services and consumers visiting industry trade shows.
Plaintiffs have a prominent enterprise. Approximately 10,500 dealer partners in 49 states, including Massachusetts and Rhode Island, actively communicate plaintiffs' financial services to consumers with materials that contain the Drive Marks. Plaintiffs have 25 dealer partners in Rhode Island, where defendants have a dealership. In Raynham, Massachusetts, where defendants formerly had a dealership, eight dealers partner with plaintiffs. Plaintiffs have ten dealer partners in the Springfield area and four dealer partners in Worcester where defendants anticipate opening a dealership in the fall 2010. In addition, "many dealers select the subprime automobile finance company that will originate the auto loans . . . based primarily on the dealer's profitability on the proposed sale" and plaintiffs are a leading provider of subprime automobile financing programs. (Docket Entry # 46, Ex. 1).
Plaintiffs continue to market themselves using the Drive Marks in statement stuffers in consumer billing statements. These inserts prominently feature a Drive Mark and identify plaintiffs as the single source.
From 2000 to 2004, plaintiffs expended at least $3.6 million, albeit not broken down geographically, to market and advertise their brand, which includes the Drive Marks. Plaintiffs publish two quarterly newsletters to dealer partners and employ sale managers in Massachusetts and Rhode Island. Santander's Communications Director details additional efforts which, along with the foregoing, provide circumstantial evidence that the Drive Marks have acquired secondary meaning.
On the other hand, there is little if any showing of intentional copying. Although consumer surveys and other direct evidence is lacking, the record is sufficient to *230 avoid summary judgment on secondary meaning. See O.C. White Co. v. Scientific Technology Electronic Products, Inc., 2005 WL 3242358, *5 (D.Mass. Nov. 10, 2005) ("so long as `facts are at issue that could cause a reasonable jury to decide the mark is a descriptive mark with secondary meaning or a suggestive mark, then the mark would be protected by trademark law and summary judgment for Defendant. . . would be improper'"); see generally Borinquen Biscuit v. M.V. Trading Corp., 443 F.3d at 118 n. 4 (noting that direct evidence, such as consumers surveys, is not "an absolute prerequisite" to establish trademark protection).
The summary judgment motion also seeks a declaration to disclaim the term drive from registrations 943 and 867 as requested in Count II of the counterclaim. "[T]he PTO requires disclaimers only for generic and other unregisterable elements in a composite mark." Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d at 24 (citing 15 U.S.C. § 1056(a)). Thus, if the drive component of registrations 867 or 943 is merely descriptive without a secondary meaning, it is the proper subject of a disclaimer. As explained above, there is sufficient evidence of secondary meaning to allow a reasonable jury to find in plaintiffs' favor.
Defendants' argument that the absence of likelihood of confusion warrants summary judgment on the willful infringement claim (Docket Entry # 1, ¶¶ 82-83) is also unavailing for previously stated reasons. Moreover, defendants only reference willful infringement in the conclusion of the supporting memorandum. See L.R. 7.1.; see also Higgins v. New Balance Athletic Shoe, Inc., 194 F.3d 252, 260 (1st Cir.1999) ("district court is free to disregard arguments that are not adequately developed").
C. Dilution Claims
As a final argument, defendants maintain that the Drive Marks are neither famous nor distinctive. Defendants further submit that plaintiffs fail to show a likelihood of dilution. Accordingly, defendants seek summary judgment on the trademark dilution claims under Texas and Massachusetts law in Count V.[11]
In order to succeed on a dilution claim under the Texas statute, section 16.29, the plaintiff "must show that it owns a distinctive mark and that there is a likelihood of dilution."[12]E. & J. Gallo Winery v. Spider Webs Ltd., 286 F.3d 270, 278 (5th Cir.2002); see generally Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d 477, 489 (5th Cir.2004) (trademark dilution consists of a "weakening of the ability of a mark to clearly and unmistakably distinguish the source of a product"). Unlike the FTDA, section 16.29 "explicitly requires only distinctiveness, not fame." Advantage Rent-A-Car, Inc. v. Enter. Rent-A-Car Co., 238 F.3d 378, 381 (5th Cir.2001); cf. I.P. Lund Trading ApS v. Kohler Co., 163 F.3d at 46 ("FTDA grants protection only to famous marks").
In order to determine whether a mark is distinctive under section 16.29:
the court considers factors much like those used in the FTDA fame analysis: whether the mark is arbitrary, the length of time the user has employed the mark, the scope of the user's advertising *231 and promotions, the nature and extent of the first user's business, and the scope of the first user's reputation. . . A somewhat stricter standard is to be applied in determining "strength" in dilution analysis than in likelihood of confusion analysis.
Advantage Rent-A-Car, Inc. v. Enter. Rent-A-Car Co., 238 F.3d at 381 (internal citations, quotation marks and brackets omitted). Viewing the summary judgment record in plaintiffs' favor, a reasonable jury could find that the Drive Marks are distinctive. In particular, a jury could find that the Drive Marks are strong. Plaintiffs have used the Drive Marks for at least ten years. They advertise nationwide including in the Rhode Island and Massachusetts area using a variety of media. Plaintiffs also have numerous dealer partners in these states that promote the Drive Marks. A jury could also find that plaintiffs' reputation is widespread. Plaintiffs' long and extensive use of the Drive Marks together with their advertising and promotional efforts and reputation provide sufficient support to classify the marks as distinctive under section 16.29. See, e.g., Pebble Beach Co. v. Tour 18 I, Ltd., 942 F.Supp. 1513, 1565 (S.D.Tex.1996) ("plaintiff's long and extensive use of the marks, their national reputations, and their advertising and promotional efforts" provided basis for court to find the marks distinctive).
Turning to the dilution inquiry, section 16.29 does not require a showing of actual dilution. Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d at 490 n. 9 ("district court erroneously held that [section 16.29] requires a showing of actual dilution"). Rather, it requires the plaintiff to "establish `an act likely to injure a business reputation or to dilute the distinctive quality of a mark.'" Id.
"Dilution may occur through blurring or tarnishing." Id., 381 F.3d at 489; accord Express One Intern., Inc. v. Steinbeck, 53 S.W.3d 895, 899 (Tex.App.Ct. 2001) (same). Blurring is "`a diminution in the uniqueness or individuality of the mark.'"[13]E. & J. Gallo Winery v. Spider Webs Ltd., 286 F.3d at 279; accord BDO Seidman LLP v. Alliantgroup, L.P., 2009 WL 1322555, *10 (S.D.Tex. May 11, 2009) (same). Tarnishing is "`an injury resulting from another's use of the mark in a manner that tarnishes or appropriates the goodwill and reputation associated with the plaintiff's mark.'" E. & J. Gallo Winery v. Spider Webs Ltd., 286 F.3d at 279; accord BDO Seidman LLP v. Alliantgroup, L.P., 2009 WL 1322555, *10 (S.D.Tex. May 11, 2009) (same). In the event "the plaintiff holds a distinctive mark, `it is enough for dilution that the defendant has made significant use of a very similar mark.'" Horseshoe Bay Resort Sales Co. v. Lake Lyndon B. Johnson Imp. Corp., 53 S.W.3d 799, 812 (Tex.App. Ct.2001).
A reasonable jury could find that the DriveUSA mark is very similar to the Drive Marks depicted in registrations 262, 943 and 867. The summary judgment record also supports a finding that defendants' use of the similar Drive USA mark in internet advertising and elsewhere in Rhode Island and Massachusetts is significant. Accordingly, defendants' arguments do not warrant summary judgment on the section 16.29 claim in Count V.
Turning to the Massachusetts anti-dilution statute, it requires the plaintiff to "show (1) that its mark is distinctive, and (2) that the defendant's use of a similar *232 mark has created a likelihood of dilution." Astra Pharmaceutical Products, Inc. v. Beckman Instruments, Inc., 718 F.2d 1201, 1209 (1st Cir.1983) (examining predecessor statute, Massachusetts General laws chapter 110B, section 12);[14]accord Hasbro, Inc. v. Clue Computing, Inc., 66 F.Supp.2d 117, 137 (D.Mass.1999) (stating same elements); Black Dog Tavern Company, Inc. v. Hall, 823 F.Supp. 48, 59 (D.Mass.1993) (same). As to the first prong, distinctive marks are synonymous with very strong marks. See S.S. Kresge Co. v. United Factory Outlet, Inc., 598 F.2d 694, 697 (1st Cir.1979) (noting, in context of chapter 110B, section 12, that "courts have been reluctant to grant exclusive rights, as sought here by appellants, to all but the `strongest' trade names"). Viewing the evidence in plaintiffs' favor, there is sufficient support for a jury to find that the Drive Marks are very strong and indeed distinctive under chapter 110H, section 13.[15]See generally Pignons S.A. de Mecanique de Precision v. Polaroid Corp., 657 F.2d 482, 494 (1st Cir.1981) (rejecting lower court's finding and noting that "Pignons has raised a genuine issue of fact as to whether the mark `Alpa' is sufficiently distinctive to warrant protection under Mass. Gen. Laws Ann. c. 110B, § 12"); Hasbro, Inc. v. Clue Computing, Inc., 66 F.Supp.2d at 137 (to find distinctiveness under chapter 110B, section 12, the court "must find that the mark has acquired secondary meaning or is a strong mark" and the mark was distinctive for purposes of state dilution statute because court found "the mark has secondary meaning"); see, e.g., Monteiro Elec., Inc. v. Monteiro Indus. Elec., Inc., 2008 WL 4926496, *3 (Mass.Super. Oct. 17, 2008).
Turning to the likelihood of dilution, it "can result from any one of three situations: (1) reduction of the value of the mark caused by actual or potential confusion; (2) injury resulting from a use of the mark that tarnishes the reputation associated with the plaintiff's mark; or (3) `diminution in the uniqueness and individuality of the mark.'" Hasbro, Inc. v. Clue Computing, Inc., 66 F.Supp.2d at 137. As similarly articulated by the First Circuit in Astra:
In order to raise a fact issue on likelihood of dilution, Astra must produce sufficient evidence to support a finding of either (a) injury to the value of the mark caused by actual or potential customer confusion, (b) injury resulting from use of the mark in a way that detracts from, draws on, or otherwise appropriates the goodwill and reputation associated with plaintiff's mark, or (3) diminution in the uniqueness and individuality of plaintiff's mark.
Astra Pharmaceutical Products, Inc. v. Beckman Instruments, Inc., 718 F.2d at 1209. The summary judgment record provides sufficient evidence to support a finding of potential confusion.[16] Although the issue is close, there is also sufficient evidence for a jury to find a diminution in the uniqueness and individuality of the Drive Marks. See generally Hasbro, Inc. v. Clue Computing, Inc., 66 F.Supp.2d at 137 (courts "have looked at factors such as the similarity of the marks and products, the *233 renown of the marks, intent, and the relevant consumers" to assess a diminution in the uniqueness and individuality of the plaintiff's mark). Defendants are therefore not entitled to summary judgment on the chapter 110H claim in Count V.
II. PLAINTIFFS' RULE 12(C) MOTION (DOCKET ENTRY # 34)
Plaintiffs move for judgment on the pleadings under Rule 12(c) on Count I (fraud in the procurement), Count III (Sherman Act) and Count IV (unfair competition) in the counterclaim. They also move to strike Count II (declaratory relief) in the counterclaim under Rule 12(f). (Docket Entry # 34). The district judge previously denied the motion to dismiss (Docket Entry # 13) the above counts filed under Rule 9(b), Fed.R.Civ.P. ("Rule 9(b)"), Rule 12(b)(6), Fed.R.Civ.P. ("Rule 12(b)(6)"), and Rule 12(f). (Docket Entry # 20). At the same time, he allowed defendants' motion to amend the counterclaim. (Docket Entry # 20).
STANDARD OF REVIEW
A Rule 12(c) motion "is treated much like a Rule 12(b)(6) motion to dismiss." Perez-Acevedo v. Rivero-Cubano, 520 F.3d 26, 29 (1st Cir.2008) (citing Curran v. Cousins, 509 F.3d 36, 43-44 (1st Cir.2007)). Because a Rule 12(c) "motion calls for an assessment of the merits of the case at an embryonic stage, the court must view the facts contained in the pleadings in the light most favorable to the nonmovant and draw all reasonable inferences therefrom" in the nonmovant's behalf. R.G. Financial Corp. v. Vergara-Nunez, 446 F.3d 178, 182 (1st Cir.2006). In order to survive a Rule 12(c) motion, a complaint must contain factual allegations that "raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true." Perez-Acevedo v. Rivero-Cubano, 520 F.3d at 29 (citing Bell Atlantic v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), as stating standard applicable to Rule 12(b)(6) and "by extension, a Rule 12(c) motion"). As explained by the Court in Bell, a complaint must show "a plausible entitlement to relief." Bell Atlantic v. Twombly, 550 U.S. at 559, 127 S.Ct. 1955; accord Rodriguez-Ortiz v. Margo Caribe, Inc., 490 F.3d 92, 95 (1st Cir.2007) (quoting Bell in context of discussing Rule 12(b)(6) standard of review).
A Rule 12(c) motion, unlike a Rule 12(b)(6) motion, "implicates the pleadings as a whole." Aponte-Torres v. University of Puerto Rico, 445 F.3d 50, 55 (1st Cir. 2006). In evaluating a Rule 12(c) motion, a court may "consider `documents the authenticity of which are not disputed by the parties'" as well as "`documents central to plaintiffs' claim'" and "`documents sufficiently referred to in the [counterclaim].'" Curran v. Cousins, 509 F.3d at 44 (internal brackets omitted). The registrations attached to the complaint therefore form part of the Rule 12(c) record. See, e.g., Id. at 45 n. 5.
DISCUSSION
A. Fraud in the Procurement
Count I sets out a fraudulent procurement claim under the Lanham Act. Plaintiffs assert that the claim fails to set out the necessary elements of causation and damages.
Count I alleges that plaintiffs fraudulently obtained registrations 414 and 262 because the applications stated that "services under the mark[s] included `originating loans'" and that DTH "believed that to the best of its knowledge and belief, no other person, firm, corporation, or association has the right to use the marks in commerce." (Docket Entry # 16, Ex. 1, *234 ¶¶ 36-37). "As a result of" such fraudulent activity, defendants have been damaged. (Docket Entry # 16, Ex. 1, ¶ 40). The count identifies damages "[w]ithout limitation" as including not only attorneys' fees and costs associated with the TTAB and Texas proceedings but also harm to defendants' reputations and the loss of investors. (Docket Entry # 16, Ex. 1, ¶ 40).
Section 1120 prescribes that, "Any person who shall procure registration in the Patent and Trademark Office of a mark by a false or fraudulent declaration or representation, oral or in writing, or by any false means, shall be liable in a civil action by any person injured thereby for any damages sustained in consequence thereof." 15 U.S.C. § 1120. In order to prevail on the section 1120 claim, defendants must prove inter alia "damages proximately resulting from" reliance on the misrepresentation. Stanfield v. Osborne Indus., Inc., 52 F.3d 867, 874 (10th Cir.1995); see also 6 Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 31.86 (4th ed.2008) ("[a]ny damage must be proximately caused by assertion or use of the fraudulently procured registration, not solely from the false declaration"); Hodgdon Powder Co., Inc. v. Alliant Techsystems, Inc., 497 F.Supp.2d 1221, 1234 (D.Kan.2007).
Plaintiffs argue that attorneys' fees and litigation costs are not recoverable damages under section 1120. (Docket Entry # 35, ¶ III(A)). Entitlement to attorneys' fees or other litigation costs as an element of recoverable damages under section 1120 is an issue of first impression in this circuit. Other circuits addressing the issue uniformly deny litigation costs and attorneys' fees as recoverable damages under section 1120. See Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d 863, 876 (8th Cir.1994) ("fees are not included within damages awarded under Section 38"); Gilbert/Robinson, Inc. v. Carrie Beverage-Missouri, Inc., 989 F.2d 985, 991 n. 5 (8th Cir.1993) ("§ 1120 damage claim may not supplant the court's carefully circumscribed discretion to award fees under § 1117"); Exxon Corp. v. Exxene Corp., 696 F.2d 544, 550 (7th Cir.1982); see also United Phosphorus, Ltd. v. Midland Fumigant, Inc., 205 F.3d 1219, 1232 (10th Cir.2000) (noting, in context of discussing award of fees under 15 U.S.C. § 1117, that section "1120 does not allow for the award of attorney fees"); Ritz Hotel, Ltd. v. Shen Mfg. Co., Inc., 2009 WL 1119496, *2 (E.D.Pa. April 27, 2009) ("[l]itigation costs and attorneys' fees are not available as damages under § 38"); Zobmondo Entertainment LLC v. Falls Media LLC, 89 U.S.P.Q.2d 1048 (C.D.Cal.2008) (section 1120 plaintiffs cannot prove damages element "by alleging that they have been forced to expend attorneys' fees in defending against [the] defendants' trademark claims, since attorneys' fees are not properly part of damages under Section 38, and attorneys' fees alone thus cannot satisfy damages requirement"); United Phosphorus, Ltd. v. Midland Fumigant, Inc., 21 F.Supp.2d 1255, n. 5 1259 (D.Kan.1998) ("attorney fees are not recoverable for violations of [section 1120]"), aff'd in part and rev'd in part on other grounds, 205 F.3d 1219 (10th Cir.2000). Accordingly, defendants are not entitled to recover attorneys' fees or defense costs directly under section 1120.[17]
Plaintiffs' remaining arguments do not provide a basis for dismissal under Rule 12(c) inasmuch as the count adequately pleads causation and damages. The temporal connection with the fraudulent registrations and the resulting damage *235 to defendants' reputations and loss of investors is not speculative.[18] Defendants adequately allege an actual injury to their reputations and, drawing reasonable inferences in defendants' favor, their good will. The allegations that defendants' damages are the result of the fraudulent registration in Count I together with the factual allegations and the attached exhibits to the answer and counterclaim are sufficient to avoid a Rule 12(c) dismissal.
B. Declaratory Relief
Plaintiffs next move to strike the declaratory judgment count under Rule 12(f). They submit that the declaratory judgment count "does not serve a useful purpose" and is simply a "mirror image" of the complaint and duplicates defendants' affirmative defenses asserting the invalidity and unenforceability of the Drive Marks. (Docket Entry # 35).
Plaintiffs, however, previously raised this exact same argument as a means to dismiss the declaratory judgment count in the counterclaim under Rule 12(f). (Docket Entry # 14, § IV). In fact, the supporting memorandum used the same language quoted above as well as a majority of the same cases to present the argument. By denying the motion in its entirety and allowing the motion to amend the answer and to bring the present counterclaim, the district judge necessarily determined the sufficiency of Count II under the same Rule 12(f) standard.
Defendants point out that the present motion "parallels in many respects their [prior] motion" (Docket Entry # 47) although they do not expressly request a denial of the motion based on the law of the case. Generally speaking, the law of the case constrains "but does not altogether prohibit[] reconsideration of orders within a single proceeding by a successor judge." Ellis v. United States, 313 F.3d 636, 646 (1st Cir.2002) (also explaining policies behind prohibition against reconsideration); accord Flibotte v. Pennsylvania Truck Lines, Inc., 131 F.3d 21, 25 (1st Cir.1997). With limited exceptions, once legal issues are decided expressly or inferentially, the law of the case precludes relitigation in subsequent stages of the action. See Cohen v. Brown University, 101 F.3d 155, 167-168 (1st Cir.1996); see also DeWeerth v. Baldinger, 38 F.3d 1266, 1271 (2nd Cir.1994) (recognizing that law of case doctrine applies to issues decided expressly or by necessary implication); Knotts v. United States, 893 F.2d 758, 761 (5th Cir.1990) (same).
Because the parties have not had the opportunity to address the law of the case issue as it applies to Count II of the counterclaim, this court refrains from denying the Rule 12(f) motion on this basis with prejudice or on the merits. Rather, this court will deny the motion without prejudice. Plaintiffs may renew the motion as long as they address the law of the case doctrine and provide a basis to overlook the district judge's denial of the same argument under the same standard of review.[19]
*236 C. Sherman Act
Count III of the counterclaim sets out a violation of the Sherman Act. In seeking dismissal, plaintiffs contend that the claim fails to overcome the Noerr-Pennington bar and fails to allege the possession of monopoly power. Plaintiffs also argue that trademark misuse is not an independent cause of action.
1. Noerr-Pennington Doctrine
The Noerr-Pennington doctrine shields from antitrust liability entities who petition governmental bodies including the courts for redress. See Davric Maine Corp. v. Rancourt, 216 F.3d 143, 147 (1st Cir.2000) (citing United Mine Workers v. Pennington, 381 U.S. 657, 670, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965), and Eastern R.R. Conference v. Noerr Motor Freight, 365 U.S. 127, 135-138, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961)); Amgen, Inc. v. F. Hoffman-La Roche, Ltd, 480 F.Supp.2d 462, 469 (D.Mass.2007) (Noerr-Pennington doctrine "protects the right to petition to governmental bodies"). As one means to avoid Noerr-Pennington immunity, defendants rely on the sham litigation exception.
The sham litigation exception to the Noerr-Pennington doctrine requires:
(1) facts sufficient to show that the challenged petitioning activity is "objectively baseless" in the sense that "no reasonable litigant could realistically expect success on the merits"; and (2) facts showing that the petitioner was subjectively motivated by an intent to use the act of petitioningas opposed to the legislative or adjudicated outcome of the petitioning processto interfere directly with the business relationships of a competitor.
Amgen, Inc. v. F. Hoffmann-La Roche Ltd., 480 F.Supp.2d at 469; see Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49, 60, 113 S.Ct. 1920, 123 L.Ed.2d 611 (1993) ("outlin[ing] a two-part definition of `sham' litigation"). Plaintiffs contend that both prongs are lacking.
Under the objective prong, "If an objective litigant could conclude that the suit is reasonably calculated to elicit a favorable outcome, the suit is immunized under Noerr, and an antitrust claim premised on the sham exception must fail." Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. at 60, 113 S.Ct. 1920. The objective prong incorporates "the notion of probable cause, as understood and applied in the common law tort of wrongful civil proceedings." Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. at 50 & 60, 113 S.Ct. 1920; In re Relafen Antitrust Litigation, 346 F.Supp.2d 349, 359 (D.Mass.2004). Put another way, "The existence of probable cause to institute legal proceedings precludes a finding that an antitrust defendant has engaged in sham litigation." Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. at 62, 113 S.Ct. 1920. Consequently, when a court finds that a Sherman Act defendant "claiming Noerr immunity had probable cause to sue, that finding compels the conclusion that a reasonable litigant in the defendant's position could realistically expect success on the merits of the challenged lawsuit." Id. at 63, 113 S.Ct. 1920. Probable cause amounts to "no more than `reasonable belief that there is a chance that a claim may be held valid upon adjudication.'" Id. at 62-63, 113 S.Ct. 1920 (internal brackets omitted).
The second prong is subjective. It focuses "on whether the baseless lawsuit conceals `an attempt to interfere directly with the business relationships of a competitor.'" Professional Real Estate Investors, *237 Inc. v. Columbia Pictures Industries, Inc., 508 U.S. at 60-61, 113 S.Ct. 1920. This prong prescribes the "use of the governmental processas opposed to the outcome of that processas an anticompetitive weapon." Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. at 61, 113 S.Ct. 1920 (internal brackets omitted).
As set out in the counterclaim, DTH knew or should have known about the rightful use of the term drive by others in commerce. (Docket Entry # 16, Ex. 1(B)). More significantly, plaintiffs instituted suit in the Texas court where jurisdiction against Walsh and the Drive USA defendants was obviously lacking on May 20, 2008. They resorted to the Texas court after litigating in the TTAB proceeding opposing the application for the DriveUSA mark for two years and then voluntarily dismissed the action "on the day of trial."[20] (Docket Entry # 16, Ex. 1, ¶¶ 31-33).
In addition, at the time DTH filed the March 2005 application that led to registration 414 and the August 2004 application that led to registration 262 "multiple other persons, firms, corporations, or associations had the right to use the term DRIVE as a trademark in commerce, including in relation to automobile financial services." (Docket Entry # 16, Ex. 1, ¶ 7). Moreover, plaintiffs have initiated "other proceedings seeking unfairly and illegally to oppress other rightful trademark users and to expand whatever rights they might have in their marks with full knowledge of rightful and prior uses of the term DRIVE by others in relation to automobile services." (Docket Entry # 16, Ex. 1, ¶ 16). Although the showing is not overwhelming, the foregoing facts as well as other facts in the record and reasonable inferences in the pleadings and attached documents provide a plausible entitlement to avoid the Noerr-Pennington bar.[21]See, e.g., Alternative Electrodes, LLC v. Empi, Inc., 597 F.Supp.2d 322, 326 & 330-331 (E.D.N.Y. 2009) (denying motion to dismiss given sufficient facts alleged to show sham litigation including using lawsuits to threaten competitors encompassing the plaintiff, initiation of objectively unreasonable infringement lawsuit against the plaintiff and dismissal without payment); In re Gabapentin Patent Litigation, 649 F.Supp.2d 340, 364 (D.N.J.2009) (denying motion to dismiss because "adequately alleged facts, which, if proven, will show that Warner-Lambert's Capsule and Tablet Lawsuits are not entitled to Noerr-Pennington immunity under the sham litigation exception").
2. Monopoly Power
Plaintiffs also attack the Sherman Act count as failing to set out a section two Sherman Act claim because defendants do not define the relevant market. If the market is automobile financing services, they further contend that defendants fail to allege the possession of monopoly power.
Section two proscribes monopolization and attempts to monopolize. 15 U.S.C. § 2. A plaintiff asserting a section two monopolization claim must show "(1) the possession of monopoly power in the *238 relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." The Hertz Corp. v. Enterprise Rent-A-Car Co., 557 F.Supp.2d 185, 193 (D.Mass.2008); United States v. Grinnell Corp., 384 U.S. 563, 571, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966). A monopolization claim therefore requires the plaintiff to show "that the defendant has monopoly power in the relevant market." Boston Scientific Corp. v. Schneider (Europe) AG, 983 F.Supp. 245, 268 (D.Mass.1997).
An attempted monopolization claim requires the plaintiff to "prove (1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability of achieving monopoly power." Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456, 113 S.Ct. 884, 122 L.Ed.2d 247 (1993). In an attempted monopolization claim, the plaintiff must therefore show inter alia "that the defendant had the specific intent to monopolize the relevant market." CVD, Inc. v. Raytheon Co., 769 F.2d 842, 851 (1st Cir.1985); see Boston Scientific Corp. v. Schneider (Europe) AG, 983 F.Supp. at 268.
In short, "`Defining the market is a necessary step in any analysis of market power and thus an indispensable element in the consideration of any monopolization or attempt case arising under section 2.'" Pacamor Bearings, Inc. v. Minebea Co., Ltd., 892 F.Supp. 347, 354 (D.N.H.1995) (quoting U.S. Anchor Mfg., Inc. v. Rule Industries, Inc., 7 F.3d 986, 994 (11th Cir. 1993), in parenthetical); see George R. Whitten, Jr., Inc. v. Paddock Pool Builders, Inc., 508 F.2d 547, 550 (1st Cir.1974) ("a section 2 attempt case, like a monopolization case, requires a definition of the relevant market"). The relevant market "is composed of (1) the product market and (2) the geographic area involved." Curtis Mfg. Co., Inc. v. Plasti-Clip Corp., 888 F.Supp. 1212, 1231 (D.N.H.1994); see Ticket Center, Inc. v. Banco Popular de Puerto Rico, 613 F.Supp.2d 162, 178 (D.P.R.2008) (the plaintiff has "burden to define the relevant geographic market and product market"). In order to withstand a motion to dismiss, the defendant must allege that the plaintiff "possesses an illegally acquired monopoly power in some relevant geographic and product market." DJ Mfg. Corp. v. Tex-Shield, Inc., 275 F.Supp.2d 109, 118 (D.P.R.2002).
"The relevant product market generally consists of products that have reasonable interchangeability for the purposes for which they are produced, taking into consideration price, use and quality." Eastern Food Services, Inc. v. Pontifical Catholic University of Puerto Rico Service Ass'n, Inc., 222 F.Supp.2d 131, 135 (D.P.R. 2002) (internal quotation marks omitted); see Sterling Merchandising, Inc. v. Nestle, S.A., 724 F.Supp.2d 245, 257 (D.P.R.2010) ("Supreme Court case law establishes that "[t]he outer boundaries of a product market are determined by the reasonable interchangeability of use or the cross-elasticity of demand between the product itself and substitutes for it""); see generally 6 Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 31.97 (4th ed.2008) (recognizing that the "trademark does not define its own relevant economic market"). Indulging reasonable inferences of fact in defendants' favor, a fair reading of the counterclaim depicts the relevant market as "automobile financial services." (Docket Entry # 16, Ex. 1, ¶¶ 8, 9, 16, 17, 18, 27 & 49). Defendants' answers to interrogatories may further refine the market to dealer originated automobile financing services but, for present purposes, the counterclaim adequately sets *239 out the product market to withstand a Rule 12(c) dismissal. See generally Todd v. Exxon Corp., 275 F.3d 191, 200 (2nd Cir.2001) ("courts hesitate to grant motions to dismiss" given that "market definition is a deeply fact-intensive inquiry").
The relevant geographic market is "`the geographic area in which the defendant faces competition and to which consumers can practically turn for alternative sources of the product.'" Coastal Fuels of Puerto Rico, Inc. v. Caribbean Petroleum Corp., 79 F.3d 182, 196 (1st Cir.1996); see U.S. v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 404, 76 S.Ct. 994, 100 L.Ed. 1264 (1956); Eastern Food Services, Inc. v. Pontifical Catholic University of Puerto Rico Service Ass'n, Inc., 222 F.Supp.2d at 135. Except for describing plaintiffs as having a "`$4 billion non-prime auto portfolio'" (Docket Entry # 16, Ex. 1, ¶ 16), there is little to indicate the relevant geographic market in the counterclaim.
In lieu of dismissing Count III on this basis, however, this court will afford defendants 30 days to file a motion for leave to amend the counterclaim to allege the relevant geographic market. See generally Rodi v. Southern New England School of Law, 389 F.3d 5, 20 (1st Cir.2004) (setting out appropriate circumstances to allow leave to amend in the course of allowing a motion to dismiss); Eastern Food Services, Inc. v. Pontifical Catholic University Services Ass'n, Inc., 357 F.3d 1, 8 (1st Cir.2004) (same). Because the court previously allowed defendants leave to amend, defendants shall confine the amendment to adding a paragraph[s] relative only to the geographic market and, if necessary, a further refinement of the product market. Defendants shall not use this as an opportunity to amend or alter allegations relative to any other claim.
3. Trademark Misuse
Plaintiffs also move to dismiss Count III insofar as it sets out a cause of action of trademark misuse. Defendants submit that a cause of action for trademark misuse is proper.
It is well settled that "trademark misuse is purely an affirmative defense and does not form the basis for an affirmative claim for recovery." 6 Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 31.44 (4th ed.2008) (comma omitted). Caselaw allows trademark misuse as an affirmative defense but not as an independent cause of action. See Dunn Computer Corp. v. Loudcloud, Inc., 133 F.Supp.2d 823, 831 (E.D.Va. 2001) ("[a]uthority is uniform in allowing trademark misuse only as an affirmative defense to a trademark infringement action"); see also Whitney Information Network, Inc. v. Gagnon, 353 F.Supp.2d 1208, 1212 (M.D.Fla.2005) ("courts uniformly allow trademark misuse only as an affirmative defense to a trademark infringement action"); Ford Motor Co. v. Obsolete Ford Parts, Inc., 318 F.Supp.2d 516, 521 (E.D.Mich.2004) (declining "to announce or create an independent cause of action for trademark misuse and find[ing] that [the] Defendant's claim is more appropriately cast as a potential affirmative defense" while also questioning the viability as an affirmative defense).
In addition, the Lanham Act provides that "conclusive evidence of the right to use the registered mark shall be subject to the following defenses or defects . . . (7) That the mark has been or is being used to violate the antitrust laws of the United States." 15 U.S.C. § 1115(b)(7) ("section 1115(b)(7)").[22] The silence of the Lanham *240 Act as creating a trademark misuse independent cause of action when a registered mark is being used to violate the antitrust laws is telling.
Count III of the counterclaim is therefore dismissed to the extent it states a trademark misuse cause of action.
D. Unfair Competition
With respect to Count IV, plaintiffs seek dismissal of the section 11 chapter 93A claim. They argue that the alleged "fraud in the procurement of trademark registration does not involve a commercial transaction between the parties." (Docket Entry # 35, § VI). Citing Milliken & Co. v. Duro Textiles, LLC, 451 Mass. 547, 887 N.E.2d 244 (2008), they also maintain that litigation itself does not "constitute `trade or commerce'" within the purview of chapter 93A. (Docket Entry # 35, § VI).
Whether liability under section 11 of chapter "93A applies to an `interaction between two parties'" requires a threshold, "`dual inquiry.'" States Resources Corp. v. The Architectural Team, Inc., 433 F.3d 73, 84 (1st Cir.2005) (quoting Linkage Corp. v. Trustees of Boston University, 425 Mass. 1, 679 N.E.2d 191, 206-207 (1997)); accord Linkage Corp. v. Trustees of Boston University, 679 N.E.2d at 206-207 ("applicability of G.L. c. 93A, §§ 2(a) and 11, to interaction between two parties requires a dual inquiry"). "`[F]irst, the court assesses whether the interaction is "commercial" in nature, and second, it evaluates whether the parties were both engaged in "trade or commerce," and therefore acting in a "business context."'" States Resources Corp. v. The Architectural Team, Inc., 433 F.3d 73, 84 (quoting Linkage Corp. v. Trustees of Boston University, 679 N.E.2d at 206-207); see Milliken & Co. v. Duro Textiles, LLC, 887 N.E.2d at 259 (section 11 requires "dual inquiry whether there was a commercial transaction between a person engaged in trade or commerce and another person engaged in trade or commerce, such that they were acting in a `business context'").
Although plaintiffs argue that the lack of a commercial transaction directly "between them" is fatal to the section 11 claim, the First Circuit in a post-Milliken case disagreed where, as here, the claim is a fraud suit under section 11. See In re Pharmaceutical Industry Average Wholesale Price Litigation, 582 F.3d 156, 192-193 (1st Cir.2009). Defendant AstraZeneca Pharmaceuticals LP ("AstraZeneca") argued that it did not have privity with third party payors ("TTPs") in a Medicare fraud suit because it did not directly interact with TTPs, a group that included insurance plans such as plaintiff Blue Cross Blue Shield of Massachusetts ("BCBS") which reimbursed Medicare beneficiaries for co-payments based on a drug's average wholesale price ("AWP"), a price that AstraZeneca purportedly inflated by not including kickbacks offered to physician providers. See In re Pharmaceutical Industry Average Wholesale Price Litigation, 582 F.3d at 161-162 & n.4 & 5. Examining Massachusetts appellate court cases, the Pharmaceutical court explained "that, in a fraud suit under § 11 where `the parties are engaged in more than a minor or insignificant business relationship,' such privity is not required." In re Pharmaceutical Industry Average Wholesale Price Litigation, 582 F.3d at 193. *241 The Pharmaceutical court thereby affirmed section 11 liability because of AstraZeneca's manipulation of the inflated AWP pricing scheme with misrepresentations about the cost of its drug, Zoladex, in a manner that it knew or should have known would increase BCBS's payments and AstraZeneca's orchestration of a fraudulent scheme at the cost of TTPs. Id. at 193-194. The fact "[t]hat the fraud passed through third parties along the way does not reduce or undo the influence AstraZeneca wielded over the plaintiffs' transactions, an influence so great as to make AstraZeneca and the plaintiffs a kind of functional counterparties." Id. In short, the lack of privity was not an obstacle because the parties engaged in more than a minor or insignificant relationship.
Here too, defendants allege a fraudulent scheme under which plaintiffs engaged in misrepresentations, particularly with regard to the applications that led to registrations 414 and 262, before the PTO that they knew or should have known would restrict defendants' rightful use of the drive term and/or the rightful use by others of the term in relation to automobile financing services thereby unfairly harming defendants and others. The amended complaint also reasonably infers that the fraud by plaintiffs before the PTO significantly influenced the ability of defendants to capitalize on their drive term and to engage in the transactions between defendants and its dealer partners and/or the automobile financing purchasers at such dealerships. (Docket Entry # 16, Ex. 1). A Rule 12(c) dismissal based on the argument of a lack of commercial transaction between plaintiffs and defendants is not warranted.
Turning to the litigation argument, it is true, as plaintiffs point out, that the Milliken court states that, "[W]e have held that `the mere filing of litigation does not of itself constitute "trade or commerce."'" Milliken & Co. v. Duro Textiles, LLC, 887 N.E.2d at 260 (quoting First Enters., Ltd. v. Cooper, 425 Mass. 344, 680 N.E.2d 1163 (1997), citing Arthur D. Little, Inc. v. East Cambridge Sav. Bank, 35 Mass.App.Ct. 734, 625 N.E.2d 1383 (1994)). This aspect of the dual inquiry addresses the second part, to wit, whether the parties engaged in "trade or commerce" and were therefore acting in a business context. Id. at 260; see also Stop & Shop Supermarket Co. v. Loomer, 65 Mass.App.Ct. 169, 837 N.E.2d 712, 717-718 (2005). It takes place "only after it has been established that a `commercial transaction' exists." See also Stop & Shop Supermarket Co. v. Loomer, 837 N.E.2d at 717. Plaintiffs and defendants, however, were undeniably acting in a business context in the course of registering and asserting their marks. See generally Milliken & Co. v. Duro Textiles, LLC, 887 N.E.2d at 260 (discussing and applying the business context test discussed in Begelfer v. Najarian, 381 Mass. 177, 409 N.E.2d 167, 175-176 (1980)).
In any event, the fraud extends beyond the litigation between the parties. Cf. Arthur D. Little, Inc. v. East Cambridge Sav. Bank, 625 N.E.2d at 1389 ("allowing summary judgment because "[n]o commercial relationship ever existed between the parties; their only contact occurred in the context of this litigation""). The misconduct at issue involves the commercial interactions between the parties as competitors and as users of the drive term in providing automobile financing services. Accordingly, the filing of litigation argument does not provide a basis for a Rule 12(c) dismissal of Count IV.
Finally, in opposing dismissal of the section 11 claim, defendants address an argument not raised by plaintiffs in the present filing, i.e., that the misconduct did not take place "primarily and substantially" in Massachusetts. *242 (Docket Entry # 47). Plaintiffs raised the argument in the previous Rule 12(b)(6) motion (Docket Entry # 14, § VI), which the district judge summarily denied (Docket Entry # 20), but they do not raise it in the current Rule 12(c) motion. Accordingly, it is not necessary to address the argument. As an aside, however, this court points out that the Pharmaceutical court addressed and rejected an argument that the misconduct of AstraZeneca, which had a principal place of business in Delaware and a business "directed nationwide" with "none of the pricing compendia" located in Massachusetts, did not occur "primarily and substantially within" Massachusetts. In re Pharmaceutical Industry Average Wholesale Price Litigation, 582 F.3d at 194.
CONCLUSION
Accordingly, the motion for summary judgment (Docket Entry # 37) is DENIED. The motion to dismiss (Docket Entry # 34) is DENIED except: (1) it is denied without prejudice as to setting forth the relevant geographic market in Count III of the counterclaim; (2) attorneys' fees as an element of recoverable damages under Count I of the counterclaim are DENIED; and (3) ALLOWED to the extent that any trademark misuse cause of action in Count III is dismissed. Defendants may seek leave to amend Count III of the counterclaim to set forth the relevant geographic market within 30 days. The parties shall appear for a status conference on December 10, 2010, at 2:30 p.m.
NOTES
[1] The Drive USA companies are Massachusetts corporations with principal places of business in Massachusetts except for Drive USA 3, a Rhode Island corporation with a principal place of business in Providence.
[2] The caption of the count reflects only "common law" claims whereas the body of the count refers to a "violation of the common and statutory law of Massachusetts" without identifying the applicable statute.
[3] Count V does not cite the Federal Trademark Dilution Act of 1995, 15 U.S.C. § 1125(c) ("section 1125(c)" or "the FTDA"). It only cites to the Lanham Act, 15 U.S.C. § 1125(a). Hence, the dilution claims in Count V are based on state law.
[4] In allowing a later motion to divide filed by Inofin, the PTO divided out the additional classes from the application for international class 036.
[5] The total effect of the singular stylized "D" mark in registration 946 is not similar to the DriveUSA mark.
[6] Whether defendants engage in subprime automobile financing is a genuine issue of material fact. Although defendants dispute their involvement, the record provides sufficient evidence for a jury to find in plaintiffs' favor.
[7] Walsh was thinking about adding a fourth dealership in Worcester, Massachusetts at the time of the deposition. In or around January 2010, a screenshot from the DriveUSA website evidences dealerships in Springfield and Providence and the move of the Raynham dealership to the Providence location. The screenshot also notes the opening of the Worcester dealership in the fall of 2010.
[8] This conclusion remains the same even considering the third party registrations of marks with the term drive.
[9] In order to deny summary judgment, it is likewise not necessary to find that the Drive Marks are either suggestive or arbitrary even though such a finding would inevitably lead to a rejection of defendants' argument. As long as sufficient evidence exists to allow a jury to find secondary meaning, the presence or absence of a finding that the marks are suggestive or arbitrary would not change the result.
[10] This finding, made solely to resolve the summary judgment motion, does not foreclose a later argument that the marks are suggestive as requiring imagination and thought to identify the source as plaintiffs' dealer originated subprime automobile financing.
[11] Although defendants cite to section 1125(c)(3) of the FTDA, the complaint does not cite section 1125(c). See fn. 3.
[12] The statute expressly allows a person with a registered mark to bring a dilution claim "regardless of whether there is competition between the parties or confusion as to source of goods or services." Tex. Bus. & Commerce Code Ann. 16.29.
[13] The complaint alleges the defendants' use of the DriveUSA mark "dilutes the distinctive quality of one or more of the Drive Marks by blurring." (Docket Entry # 1, ¶ 55).
[14] The language of chapter 110H, section 13, is strikingly similar to the language of the predecessor statute, chapter 110B, section 12.
[15] Significantly less evidence is needed to make this finding than to make a finding that plaintiffs will prevail under chapter 110H, section 13, and obtain injunctive relief.
[16] The parties do not address preemption and it is therefore waived for purposes of resolving the pending motion. See Higgins v. New Balance Athletic Shoe, Inc., 194 F.3d 252, 260 (1st Cir.1999).
[17] It is premature to discuss entitlement to fees under 15 U.S.C. § 1117.
[18] Plaintiffs do not argue that these damages are not cognizable under section 1120.
[19] This court declines to deny the entire motion without prejudice on the basis of the law of the case. First, defendants do not seek to deny the motion on the basis of the law of the case. Second, the present motion as it applies to Count II is more strikingly similar to the prior Rule 12(f) motion and, in the face of the same argument, the district judge allowed the motion to amend to include the same Count II in the attached counterclaim. Third, the prior Rule 12(b)(6) standard is similar but not identical to the Rule 12(c) standard in the present motion.
[20] "A winning lawsuit is by definition a reasonable effort at petitioning for redress and therefore not a sham." Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. at 61 n. 5, 113 S.Ct. 1920. An unsuccessful lawsuit, however, is not necessarily a sham unless the action was "`unreasonable or without foundation.'" Id.
[21] Accordingly, it is not necessary to address the fraud exception to Noerr-Pennington immunity.
[22] The language and "legislative history reveal that the effect of this section is merely to make the defense of antitrust misuse available to defeat the conclusive evidentiary force that would otherwise attach to a federal registration." 6 Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 31.92 (4th ed.2008); see Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena, 298 F.Supp. 1309, 1312 (D.C.N.Y.1969) (detailing legislative history of section 1115(b)).
| {
"pile_set_name": "FreeLaw"
} |
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 92-7417
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
FRANCISCO LOZANO VALENCIA,
Defendant-Appellant.
Appeal from the United States District Court
For the Southern District of Texas
(Februaryh 24, 1993)
Before REAVLEY, SMITH, and DeMOSS, Circuit Judges.
DEMOSS, Circuit Judge:
I.
On February 27, 1991, Francisco Lonzano Valencia pleaded
guilty, pursuant to a plea agreement, to aiding and abetting the
possession, with intent to distribute, in excess of five kilograms
of cocaine. In exchange for Valencia's plea, the government
agreed, among other things, to stipulate that Valencia accepted
responsibility for his conduct in accordance with USSG § 3E1.1.
This would entitle Valencia to a two-level reduction in offense
level.
The Presentence Report (PSR) ordered by the Trial Court
concluded that Valencia was not entitled to the two-level reduction
in the offense level for acceptance of responsibility for the
offense because Valencia did not accept responsibility for his
relevant conduct. Valencia objected to the PSR, among other
things, specifically on the ground that he was not entitled to that
reduction.
At the initial sentencing hearing on May 15, 1991, the
district court granted Valencia a one-level reduction for
cooperation with the government and a one-level reduction for
acceptance of responsibility, resulting in a sentence of 120 months
plus five years of supervised release and a $50 special assessment.
Valencia appealed, challenging the propriety of his sentence.
On March 18, 1992, this Court vacated that sentence and
remanded for resentencing, finding that a district court may not
award a one-level reduction for partial acceptance of
responsibility. We held that the Trial Court must either give a
two-point reduction or it may not reduce the sentence at all.
United States v. Valencia, 957 F.2d 153 (5th Cir. 1992).
Valencia was resentenced on May 22, 1992. The district court
denied Valencia any credit for acceptance of responsibility at that
proceeding but did grant him a two-point reduction for substantial
assistance, resulting in a sentence of 108 months incarceration, a
five-year term of supervised release, and a $50 special assessment.
The government argued at the resentencing that despite its
stipulation to the contrary, Valencia "clearly . . . should not be
entitled to any credit for acceptance of responsibility."
2
Valencia again appeals, claiming that the government breached
the plea agreement when it stated that Valencia did not deserve a
two-level reduction for acceptance of responsibility.
We VACATE the sentence and REMAND for resentencing by a
different judge.
II. DISCUSSION
At the initial sentencing on May 15, 1991, the probation
officer submitted the PSR that concluded that Valencia had denied
any involvement in the offense to which he pleaded guilty.
Valencia's original counsel filed objections to the PSR in an
attempt to clarify Valencia's apparent non-acceptance of
responsibility. Counsel explained that no attorney was present
when Valencia, a Colombian National who did not speak English, was
debriefed by the probation officer responsible for compiling the
PSR and that Valencia had been told to refrain from speaking to
anyone without his counsel present, and thus, did not talk openly
with the probation officer.
The court noted Valencia's objection to the PSR and stated
that he was "about halfway convinced" as to Valencia's partici-
pation in accepting responsibility. He thus gave him a one-level
reduction for that category.
At resentencing on May 22, 1992, Valencia's attorney claimed
that his client was remorseful for his conduct, fully accepted
responsibility, and had he been familiar with the debriefing, would
3
have been more forthcoming in his statements.1 Following defense
counsel's argument, the following exchange took place in relevant
part between the trial judge and the prosecutor, Mr. Dies:
THE COURT: What is the Government's thoughts in that
regard?
MR. DIES: Your Honor, what kind of frightens me a little
bit is counsel's assertion that today the defendant is
more remorseful and accepts more his responsibility than
he did at the initial plea of guilty. Is that to say,
then, your Honor, logically extending the argument, that
if we somehow mess up today and it gets reversed or
remanded, then we come back four months later, if the
defendant is even more remorseful in four months from
now, he gets more credit?
My position is, Your Honor, that although we may
have at the outset agreed by a plea bargaining that this
defendant accepted responsibility for his conduct, he
failed to demonstrate that to you on the record with his
debriefing and with the written statement, and clearly,
Your Honor, he should not be entitled to any credit for
acceptance of responsibility. It was incumbent upon the
defendant, not the lawyers and their skills, to show the
Court acceptance of responsibility. I am of the opinion,
Your Honor, from the facts today and the facts at the
entry of the plea of guilty, that the defendant by his
assistance to authorities, by his debriefs, played a
substantial role in the resolution of the case over all
and is entitled to a reduction that you see fit for
substantial assistance, but nothing because he hasn't
demonstrated to you, Your Honor, a true acceptance of
responsibility. (emphasis added).
Defense counsel immediately objected that the government had
breached the plea agreement with this statement and demanded
specific performance of the plea agreement.
The district court ruled on the objection and stated:
"Specifically, the court notes for the record its perception that
1
Valencia's retained attorney withdrew as his counsel after
the initial sentencing and the Federal Public Defender was
appointed to perfect Valencia's appeal.
4
it respectfully requested a response from Mr. Dies earlier with
regard to this issue. Mr. Dies was therefore duty bound to make
some offering to the court. The court does not characterize that
as a breach of the agreement that induced this defendant to plead
guilty in this case for any purpose."
The government relies upon United States v. Hand, 913 F.2d 854
(10th Cir. 1990) to support its contention that the government need
not stand mute in the face of incorrect or misleading testimony.
It points out that the Hand court held that the prosecutor, who had
agreed to recommend that the defendant receive a reduction in
sentence for having a minor role in the offense, had a right to
cross examine the defendant in light of incorrect or misleading
testimony offered to the trial court.
Noting the court's ruling on Valencia's objection to the
prosecutor's comments in question, the government now argues that
no breach occurred because the prosecutor was merely correcting
inaccurate factual representations and responding to an inquiry by
the court. The government also argues that because the district
court found that the government did not breach the plea agreement
the finding must be reviewed under the clearly erroneous standard.
Even if a breach occurred, the government contends the breach
constituted harmless error because the prosecutor's argument did
not influence the judge's decision and therefore Valencia would end
up in the same position.
Whether the government's conduct violates the terms of the
plea agreement is a question of law. United States v. Badaracco,
5
954 F.2d 928 (3rd Cir. 1992). A breach of a plea agreement
constitutes plain error and our review is de novo. United States
v. Goldfaden, 959 F.2d 1324, 1328 (5th Cir. 1992).
The principles governing the government's obligation to honor
the terms of a plea agreement are well-settled. If a guilty plea
is entered as part of a plea agreement, the government must
strictly adhere to the terms and conditions of its promises.
United States v. Kerdachi, 756 F.2d 349, 351-52 (5th Cir. 1985).
United States v. Badaracco, 954 F.2d 928. Furthermore, when a
guilty plea "rests in any significant degree on a promise or
agreement of the prosecutor, so that it can be said to be part of
the inducement or consideration, such promise must be fulfilled."
Santobello v. New York, 404 U.S. 257, 262, 92 S. Ct. 495, 30 L. Ed.
2d 427 (1971). In determining whether the terms of a plea
agreement have been violated, the court must determine whether the
government's conduct is consistent with the defendant's reasonable
understanding of the agreement. United States v. Huddleston, 929
F.2d 1030, 1032 (5th Cir. 1991). Furthermore, if it is determined
that a plea agreement has been breached, "specific performance [of
the agreement] is called for, [and] Appellant must be sentenced by
a different judge." United States v. Goldfaden, 959 F.2d 1324 at
1329 (citing Santobello, 404 U.S. at 263); see also, United States
v. Badaracco, 954 F.2d 928 at 938-39, 941.
None of the government's arguments are persuasive.
We observe first that the government mischaracterizes its
obligation under the plea agreement, which plainly provides that
6
the parties stipulated that Valencia accepted responsibility for
his offense in the following words:
The United States stipulates that I have accepted
responsibility for my actions (§ 3E1.1 Sentencing
Guidelines).
Plea Agreement, 13(c).
While the government correctly argues that it may correct
factual inaccuracies in the record, United States v. Goldfaden,
959 F.2d at 1328; and that post-sentencing remorse should not be
considered by the judge in determining whether to credit the
defendant for acceptance of responsibility, it can not argue that
the other evidence in the case establishes that Valencia was not
entitled to a reduction for acceptance of responsibility.
"If the stipulation bargained for by [defendant]--and for
which he `surrender[ed] . . . certain constitutional rights
including a meaningful restriction of his liberty'--is to mean
anything, it must preclude remarks like the government made here."
United States v. Badaracco, 954 F.2d 928 at 941.
Furthermore, the government cannot rely on United States v.
Hand, 915 F.2d 854 to justify its behavior at resentencing. The
Hand court distinguished that case from cases such as this one
where a prosecutor promised a recommendation and then proceeded to
argue the opposite position. The prosecutor in Hand presented no
direct evidence that the defendant played more than a minor role
nor did he characterize the evidence elicited on cross-examination,
nor argue the effect of the evidence to the sentencing judge.
Here, the prosecutor did characterize the evidence and did
argue the effect of the evidence to the judge. Here, the
7
prosecutor argued the opposite position in plain violation of the
language of the plea agreement.
Finally, the government's argument that harmless error
analysis should be applied here because the judge did not base its
holding upon the government's recommendation fails.
The interest of justice and standards of good faith in
negotiating plea bargains require reversal where a plea bargain is
breached. Santobello v. New York, 404 U.S. at 262-63. A lesser
standard would permit the government to make a plea bargain
attractive to a defendant, subsequently violate the agreement and
then argue harmless error, thereby defrauding the defendant.
Here we find that the comments made by the prosecutor to the
court in support of the denial of credit for acceptance of
responsibility by Valencia breached the plea agreement between the
parties and therefore constitutes reversible error.
III. CONCLUSION
On appeal, Valencia has elected specific performance rather
than withdrawal of his plea as his remedy.
We VACATE Valencia's sentence and REMAND to the district court
with instruction that it transfer this matter to another judge who
will resentence Valencia in accordance with the requirements of
this opinion. See Santobello v. New York, 404 U.S. at 263 and
United States v. Goldfaden, 959 F.2d at 1329. We intimate no view
as to what determination should be made, on remand, on the issue of
acceptance of responsibility.
c:br:opin:92-7417:jm 8
| {
"pile_set_name": "FreeLaw"
} |
~o\l·em.ber z., 2ot s . RECEIVED IN
COURT OF CRIMINAL APPEALS
WU~\ oF CJ(1Mt#.\J4-L APfJE.-I~LS NOV 05 2015
~. Q,, 8ol-l Q_ ~8
CA.ptto\ ~on "'bet Acosta, Clerk
ltus-hn 1 Tx.-1871 t
Rc.'. 6u\lJ4d..~cn f0o,·~-t5-ro-rt6- D /Jbuse of tJWei-t~
~f' Cwrf- cl d-llvllrtaJ ~J; ._ · .
See £xJJ.hf .4, wh.®J is l1o/ f!OI-tce of fhe. "J~e' lllx.rse 6F
Qi~-/-1o-(} J.n CiuJ stit-1Jo.D~-t5-00'7/6-D, I f6runrdru +/;us rtof,ce /o
i}le Lour+ of Appe.:1.h, s~ D'i>f:1 and rl- !A)a_S durned f<Xtd.__ to ;ne, 71tz
0u~e of.·~ ~5rfl ~udtCl-aj L.nurf-, In Ms CoonJ-v, /e)(aS lS 1-c~U~
C9At:><r11'19 fN( ~O~'S ek. Thi~ dud,ze sd- CL_ lrt"df Dde f6r !live.k
1b 2o1s .li..nD\.Dt\1\~ ·fu~ J: tt.JY\ \Atavt{'rer~ LY'l \I:,~..:s, ~ :r. hwe ·
1
fVreo..~<;. o~ my o\DY1 1 +c:. +rc.mspcw\-t'Y\YselP -1-o O&s, tnu~. I
VlO
DM +oWU;. tr&~ t>JV>6 ttAV\ Vll:ll-- o.:Word ·+o fW! rcr 'fYU/ o\.DVl
{mY\sp:){+c&ton.~ere~re, L tU'Y\ res~~ l'e~u~-hn 9 M
+k~ &u.P+ Df Cr1tnt'r\.a.l flpptt:.tl~ ·+o q& z.nuo1v8d, ~ orzo~ -tJ,e
-f-rt~ 'j"~ +o_ q<nn:l-IYI'l1 fito~oYl -f6f' BerJcbJ. ~ec_e r:H71 X: liMe fde4
f}ll M L\.07 ~lf'l:j: of~ ~tus an lid !esh'-/,2u.ndurl) dctled
1 1
;Jove~ 2.,201~· tutft1 the- Dts-l-tiGL cl~k. ~-s f'ot lflli' i1me a11J
& ~ ~se ~he qf't'41\y o.~.
Bef\~L-,l"'l..t1NdllJ-tl~
"""~- 30 ?1\\e
-Ae abJe M~eJ COJL~I This document contains some
pages that are of poor quality
~'D~ 1 c....v -J, · at the t'1me of Imaging.
·
t.~ 1\\0S; rlO-o\l'b~
~lD-Dl\ 6l.f
SEI\)R}~ ~\I..K€R~
\"\Jc:.::s- ~a. \<c<e5llfb 1 ,
REL.A-m'R
v.
t>A-LU4CS {J.')U\\)\V ()\S\R\CT tL.t.J<J(:
FE.Ltc\A P1TRE
TN H-U DFFI C..I14L £~J\Pf\-c~JTY,
R.t:.~fONDtfJT
\JLF\-1"-\TI FF 1S O'ltiGti\JAL. ltPPLICJtTI()J RJR tJY<.ly
bF MA-N\J\401U~
'G· \of·~-
~A\.lS£ oo. Flt).. D \. \£>3
F' tt1- ou B Lf
s~i'l..\cl<-.. \10\~
\\J~ ~. \ffiSl%,
R~LA-t~
v.
~f\-LJJi-~ twrv-ty D1SII(Jc__T CleRK;
FELl~\ A PITRE... .
· T:l0 HER. DFFlC.JAL CJ!\.PAC1TY1
RBPDf\)D£NT
OP--\J~
~,_, c~ ('AI'I\e- 0\1\. ~ ke ~ ~ ~teq'Dl'n9 f<~ ~
(A J
/1-wtL~ Por- LON4- o~ !1Actt1da/Ylus ~ 'if~ ~ the ta:nki-hJ- ~
~s~~ be--~
- GAAfU-rt:n
"IT J:"=> -r!+EY<.E.ThRE.. OR~PE.o -n-H'\1 \ttQ..Ot~,J- cJep/(9JJI
if~'~ .. -\-ffU!l.Shl it -k, -\he. R~ cwJ -J-h~ IW.l'{ cf (j ,lnln<J 11-pp&J.s .
~ . . QJ:>py tP-
e. ~~l'l tJun~. .-P~ ?'nC..1 ~ ilPre::.+ ~~do/ afl5/lM
~eA~~ a..Cff'Mlmk .eci\-tl"l1 '\\t\Q...~ ~ U)\ucln ~d-
\--rQV\~Mt*cJ wCLs Mode
CSt~E1J ovv\\lis i+te _dcJ.Jf ct ----; 20 _ 8P
UNSWORN DECLARATION
..
Under both Federal law (28 U.S.C. § 1746) and State law (V.T.C.A. Civil Practice &
Remedies Code,§ 132.001 - 132.003), offenders incarcerated in Texas may use an
unsworn declaration under penalty of pe1jury in place of a written declaration,
verification, certification, oath, or affidavit sworn before a Notary Public.
I, ~\\)~\~ \.Ul~f\0 , being presently
incarcerated in TDCJ Ramsey Unit, in Brazoria County, Texas, declare
under penalty of perjury that the foregoing is true and correct.
-~-------:______Exe_c_uted__on__this._th~ _ md day of f\)lJUe~€f , 20 IS.
---1
~~\q,z.ots
- ReCEIVED IN
COURT OF APPEALS, 5th DIST.
ocr 21 201s
LISA MATZ
CLERK, 5th DISTRICT
-
<~~\CK Ld~U<t~ ;OOsLlfb
"ct""'-~ ·r Urut -
l(DO.FOiJL bSS 7£-2..-177
RoshlLV'oVJ 11J'- r 7 583
E.~UH~tl
A.
~NR.\c\(_ t.Dll!((_R.~~ :rAJ TltL 3UOtCJAL OV&TRi c.1
\}~ q STH '"JUD ldtlL COOt.\'
TH-E. CJ.'LV C>F 1)\A-LJ-Jt<; E..T AL Di4li.~S -~uf\Jly1 TE.x~
MDI\Dt0 FOlA,. ::t:55UANCE OF 8E.NC}I WARM-1\JT
'TD \1-\-E... 1\~ND~\(\.-~ ~OG-L~ 'SJ4.IO c:..£Ut-T:
(SXML~ ~~, SE.tu~\d~ w~E:..R~ ,:n the, olt:rue cwu:\ t'U..unlered
PLfl-INTifF
~ W\0 'MCiJes 4-hls 1-\cn\)f'~le ~\xr+~ k isc.)~ eu1 ·Ordif dtr~f\9 ~:e
sh~~F aP t\3.s ~~,1_€x~cs ·+c ~llJJe fJtcu~'fP bro2Jh} 1V\k 4-he ~ll~+r~
'OaJ.
~-+he q54-h 0~,~ Ots-4\c.+ ~u.'f't o·P o~ &u 7-ey:__cl.S ro" lhe ·
.pt,l:~~ of a rut zwd oll h&U'1hqs ,<Wd if>f' +he JrlaJ +h '-h16 be'evt -d-·ly
+hJ.& ~+I Otll ru~uevvtlae.r IhI '2.0\ s 6 ~cunds Vhe.K'e{bre_ pre'5~ -~e_ ~u~
I J.{L A '
Wot£Jln9: 1'1Vl..-
. fli)Jj~~;fP,_ Se.c"~c.kJJ\~, Is p~A, rtleqJ}~tlic.a.~t£Jr~ ,n+he
f2A"f<\S~ L u.N.} of ~€... ~e)(_Q.'::> Depa.rrfm~:bF- Cri"MuvJ "J"i,L~+tte. m f<c~htrrnVJ1
le'tJLS U.S tL ~esu\.\- of.~\<; it\eqa): LoYIVI~.OYt'S.
1
.ThJ_<, sU& (!0-.~ be ~rl~ IY\00.~ w~ PlOJ.nkf?P ~n? a:\- dru; ~
o..l\ hen.."~-~ +est\fy 1h l.us ot.Urt 'oeha.lf, +o s~~kjul"v 1to preskJd- .;
e\\lc:\enc:e ,ucss -e.y_Clfl/lltle Wti-lle.<i>5e5 1 CJJYd qerB"o.lly Je{tnd h.t'<, t n+eres+ 1Yl
~~wt
---rr.tcl hu.-"" \rem~ ~t- t-l~~l'rlhe..r ,J!;.z.ols, by the. . &u.rt.
\ P~A\j£fZ
t.VI-I-~t,Pr<£.M\SC.S ~tD£R.£_Q I Pltl.l~fP pra.J{'> ttJ. CUt\ ~ Le
~~sued. 0\.'t~Y\q 4\e. ~~t' ot- Otilla_s_ewrJy, (eM:J.S tcwse -pf~ithf.P,
&rll'l'e...k_I.Uit~ tre::r f\b.lffi~ll/f, lWt 11\~--at ~e f<ttJn~ I utUJ '[j(!
I
I*'
-\-he'\e;ctt.s Dern"+w\.~of- C..l'ilnlnuJ 0"u.-s-\-ic.e tn ~slno.rcn 1T ~?fro ~
brou.'ihl- bdti~ ~ l-Ion tn'~ \e. Cou.r+ o1 s~ h\-ne. oP- the f-r,~ or ahlj'
/ttetlf', n9 ~n the af'ore~on~ proteedlrq s. _ ", ,'7 ,
' ~~ s 1\titWJ
t_,Dpy eA~J cdcter 30 eDlS1
~~\le~Q){' 2, 2D\S
COuR..-r oF LJ\HV\rl\Jvrl APPEA-Ls
P. 01 &~12.308
Cnptto\ SkttDrn
14-uSf-tn ,,~7'Blfl
R.c! t,vil ~wJ-
beo.f ~~\- o \' C ~~ tAtt~uk; _
.L \V\\t\~ ~ fut\ <;~ oqc.Uhs-f I<aM f llJ Wwrd
!ltef§bJ-"'1~1 amd fhe.. \I~e ~~Ff'€- Lfi1.:11-J o~M erov+ is ~~~P.
M- MJj C.Wtl Co.<£ \JJCLS a. s~Jet'.T +o be~n~ by ai'J l/,o7 {;jl'·i}
c£ {-/o.);;eas C1rru:-s. See E.xJ.J;tf- A-. M.J; Whl ~u}± #W- T fded ,n
B04.zr,r;c.. ~u'#l L<; ~ 'OV\ atf~OVI f.o/ ~~~J CIYIV!~. vud~ tdwln
D-e¥\ ~'\'\AN\ 1s ulm cl~:Urn< rq thcJ- he~ r1ot iltQtqt::. ;nf·e 111 +h~ CLJ;<Je huJ
1
he.!llas cht.trytJd mre., 7 Rkd 0- +wa'\4; ~~oM' i\JC6. chsrw-:,:>eJ. T
am rCl{les~fq- fhJ; ~ ~v.t'\ Df tc-~md flrruh ~ +h'€2~~
&-lf I ~ ~ ()'s t-r-~& ~"{- of 8f'trzo~l a. l~ouJy, 1-o ilo\- VI olok fYV.j
·®~ ~ro~ess, .
~~S£N~\CJ~lUlU(:E.fZ'&u"J I ~i"SIYb
Brazoria County Courthouse Houston 281-756-1915
Ill East Locust DISTRICT JUDGE Brazosport 979-388-1915
2"d Floor, Suite 201 412th Judicial District Angleton 979-864-1915
Angleton, Texas 77515 Facsimile 979-864-1918
July 2, 2015
Mr. Senrick Wilkerson # 1885146
Ramsey 1 Unit
1100FM655 7E-12-17T
Rosharon, TX 77583
RE: Cause No. 82326-I; Wilkerson v. Ramsey 1 Unit Warden Mossburger; in the
District Court, Brazoria County, Texas, 412th Judicial District
Dear Mr. Wilkerson:
I have enclosed a copy of the Order I signed today dismissing your most recent suit.
Although I do find the causes asserted as having no basis in law and being similar to your
previously filed cases, I did not assess Court Costs in this case even though, under the facts, I
could have.
I realize that it is frustrating for you, but in the Court's opinion the relief that you seek is
subject to and governed by an 11.07 Writ, and this is substantially the same matters that you
alleged in Cause Number 78470-1. Certainly, you have the right to appeal this decision to the
Court of Appeals, and if I am incorrect, they willl~t me know.
W. EDWIN DENMAN
Judge, 412th District Court
WED:lmk
Enclosure
823261- Wilkerson ltr from Judge 7.2.15
SEl\.JTU~ C::,, \..(J\LI<Be_SON l88Stt.fl::,
Y<.o...W\csey :c. UvU}
\\D() t==IVL 6SS -r£.-2.-1"17
R_o5h_~t79--r-,s~~
CALl"*-- ~OS. Ac-D\\93 &.1 FtO-o\\S\.f
-:z::N Tttl:.. CRtt'V111\JAL DtSlRICT
SE.f..jR\U' ~\~.SON CoUR:r N0 ...3
vs ~A-L_LI'I-5 toUtvTY 1l"t:)(_ft-;)
-rt\E_ s~ o"<= ~~
~~~Ck. GJ\L.l(Ef<..~~ l'b~l%
(.{aJ'v\.SeJ{ i Qru}
\ llJO FM 655 1£-2-liT
IZt>~ho..rOV\ 1 T'j._175Cf53
["~;
1 ,, ''\if~~\ .JJ llll) l:.t..-Ullll Ul ;~~q.ltJCCUll
~ .1~;' ···--·lf'
.> .. •k''·;··· 600 Commerce Street. Suite 200
\~~! Dallas. Texas 75202
.'QC;)
:\~E.SPO.s~
~
f
::l
(~ 1/' .::-~tj'Bbi02:"20 15
~-PITNEY BOWES
. '\'"n_~ 02 1 p $ 000.340
RE: Case No. 05-15-01202-CR -~~ 0000856274 OCT o2 2015
....._.......,.g,.n.;·oU:II~· MAILED FROM ZIP CODE 75201
Style: Scnrick Wilkefson Y
?~
v. The ::;rate of Texas '1;V. (1.. { .
Tho::: Court today filed arpellant's notice of arpeal in (he above referenced cause, The ::;"'
CoL~:·t
of Appe<~ls follows the Standards of Conduct adllpted LJy ·:·exas Supreme Court and Com1 of
Criminal Appecls order.
Trii:ll Court Cas.:: No. F-! 00 I J:B · l~isa Matz. Clerk
- - - - - - - - - - - ·-------------
SENRICK SHERf\1 WILKERSON ,
#1885146
RAMSEY I UNIT
rJt \t~rr
K. 1.-fi-A· · . ,..._~··
·..
II 00 f.M. 655 7 E-2-17T •.·· ;;;,
. ·t~
ROSHARON, TX 77583 ·.: \.
JJ 1J11/l' 'Jill 1111111111 •J/illllaiJI/IJ!JJIJsJ i rl Jl ,j '/ •Jiil jpJ•
/
Order entered October 21, 2015
In The
<!Court of ~peal~
jf iftb JlJ~tritt of mexaJJ at mana~
No. 05-15-01202-CR
No. 05-15-01203-CR
SENRICK WILKERSON, Appellant .
v.
THE STATE OF TEXAS, Appellee
On Appeal from the Criminal District Court No.3
Dallas County, Texas
Trial Court Cause Nos Fl0-01 183-J, Fl0-01184-J
~•'·
ORDER
The Court has before it appellant's October 19, 2015 "request for assignment of counsel."
The Court has dismissed the appeals for want of jurisdiction. Accordingly, we DENY the
motion.
/s/ CAROLYN WRIGHT
CHIEF JUSTICE
| {
"pile_set_name": "FreeLaw"
} |
32 B.R. 672 (1983)
In the Matter of AMERICAN FEDERATION OF TELEVISION AND RADIO ARTISTS, et al., Debtors.
Bankruptcy Nos. 82 B 12107-82 B 12110.
United States Bankruptcy Court, S.D. New York.
September 6, 1983.
Grutman, Miller, Greenspoon & Hendler, New York City, for debtors.
Rogers & Wells, New York City, for Tuesday Productions, Inc.
Skadden, Arps, Slate, Meagher & Flom, New York City, for Creditors Committee.
Luce, Forward, Hamilton & Scripps, San Diego, Cal., In Pro. Per.
*673 MOTION TO REDUCE TREBLE DAMAGES PORTION OF AN ANTITRUST JUDGMENT WHICH CONSTITUTES THE CLAIM
EDWARD J. RYAN, Bankruptcy Judge.
On November 1, 1982, the American Federation of Television and Radio Artists and its local affiliates in Los Angeles, San Diego and New York (hereinafter referred to as AFTRA or the debtor) filed separate petitions for reorganization pursuant to 11 U.S.C. §§ 1101-46 (1976). Each has continued in the management and operation of its business as a debtor in possession pursuant to 11 U.S.C. § 1107 (1976).
This proceeding arose as a result of an antitrust verdict rendered in the United States District Court for the Southern District of California against AFTRA in favor of Tuesday Productions, Inc. (Tuesday).[1] Damages were assessed in the amount of $3,117,270. This was increased by the district court to $9,351,810 through the application of the treble damages provision of 15 U.S.C. § 15 (1976). Costs and legal fees were added and the amended final judgment recited an aggregate award of $10,564,784.91 plus interest. AFTRA subsequently filed an appeal.
The district court denied a motion for a judgment stay pending appeal and shortly thereafter, petitions as previously described were filed in this court. Schedules of debts and assets were filed on February 17, 1983, including, inter alia, a disputed claim by Tuesday in the amount of $10,564,777.91. No proof of claim, however, has been filed by Tuesday.[2]
The issue is whether the antitrust treble damages portion of the judgment rendered by the district court is a penalty and therefore an unenforceable claim. We hold that it is allowable.
Debtor argues that treble damages are punitive and so, ipso facto, are a penalty. The debtor reasons that a bankruptcy court is essentially a court of equity and will not enforce a penalty. It argues further that where innocent third parties would suffer, punitive damages may not be collected from an estate.
Tuesday contends that: (1) the treble damage provision is not punitive in nature; (2) the treble damage provision, even if punitive, is not a penalty of the type which is unenforceable and, (3) no "innocent" creditors will be harmed by the allowance of the claim.[3]
Preliminarily, we assume that statutory antitrust treble damages are punitive in nature. This still leaves unanswered the question whether the statutory multiple damages portions of valid judgments are unenforceable claims under Chapter 11 of the Bankruptcy Code (the Code). We are aware of no cases that directly address this point.[4]
*674 We are likewise aware of no statutory provision which mandates one or the other result under Chapter 11 of the Code.[5] However, from what can be gleaned of the evolution from the Bankruptcy Act to the Bankruptcy Code, the debtor's argument must be rejected.
Under the Bankruptcy Act, claims punitive in nature may have been denied effect via two avenues. First, if the claim was made in a Chapter IV liquidation and was for a penalty or forfeiture to a governmental entity, it was only allowed to the extent that it was compensation for "pecuniary loss sustained by the act, transaction, or proceeding out of which the penalty or forfeiture arose. . . ." 11 U.S.C. § 93; (1976) (repealed 1978). Second, if the claim in a case under any chapter was based on a contract debt, the bankruptcy court might use its equitable powers to set aside that portion of a liquidated damages claim not proportionate to the damage reasonably to be anticipated at the date of the signing of the contract. See, e.g., Drive Black Ranches, 362 F.2d 8 (8th Cir.) cert. denied 385 U.S. 990, 87 S.Ct. 595, 17 L.Ed.2d 450 (1966); In re Tastyeast, 126 F.2d 879 (3d Cir.) cert. denied 316 U.S. 696, 62 S.Ct. 1292, 86 L.Ed. 1766 (1942).
The Bankruptcy Reform Act of 1978 significantly cut back on the first of these criteria for disallowing a penalty. Now in a Chapter 7 liquidation, all claims punitive in nature, including multiple damages, are allowed.
Specifically, section 726(a)(4) provides:
(a) Except as provided in section 510 of this title, property of the estate shall be
(4) fourth, in payment of any allowed claim, whether secured or unsecured, for any fine, penalty, or forfeiture or for multiple exemplary, or punitive damages, arising before the earlier of the order for relief or the appointment of a trustee, to the extent that such fine, penalty, forfeiture or damages are not compensation for actual pecuniary loss suffered by the holder of such claim.
Collier points out that:
the effect of section 726(a)(4) in combination with section 726(a)(1), (2) and (3) is to require that claims for fines, penalties, and damages be divided into the portion that is in compensation for actual pecuniary loss and the portion that is not. Distribution under the four paragraphs would then be made accordingly.
4 Collier on Bankruptcy ¶ 726.02[4] at 726-7.
As an example cited in Collier, is "treble damage antitrust claims. The damage is payable under section 726(a)(2), while the remainder (twice the damage claim) is payable under 726(a)(4)." Id.
In gleaning Congress' intent as to the enforceability of punitive and multiple damages in Chapter 7 proceedings, this court is persuaded that statutory treble damages in a valid judgment are not penalties of a sort that Congress intended the bankruptcy courts not to enforce in a Chapter 11 proceeding.
The court is not unmindful of the force of the policy considerations urged by the debtor, that when a claim which is not compensation for pecuniary loss harms "innocent" creditors, it should not be given effect. Tuesday contends, however, and the debtor concedes, that all creditors except Tuesday would be paid in full, and a fund would be created to pay Tuesday under a concept of potential plan provisions for creditors, which the parties have agreed to. In light of this agreement, it cannot be said that allowance of a claim for the entire antitrust judgment would prejudice "innocent" creditors.
For the foregoing reasons, the motion is denied.
NOTES
[1] Tuesday Prods. v. Am. Fed'n of Television and Radio Artists, No. 78-0644 K(I) (S.D.Cal. Aug. 2, 1982).
Luce, Forward, Hamilton & Scripps, counsel to Tuesday in the California antitrust suit, has been adjudged by this court not to be a proper party to this case. In re Am. Fed'n of Television and Radio Artists, 30 B.R. 772 (Bkrtcy.S.D. N.Y.1983). However, the firm participated in propria persona at oral argument and submitted papers in support of the instant motion with the leave of the court, and Tuesday's counsel has adopted its arguments with their full force and effect. Also the determination that the firm is not a proper party to this suit was made after oral argument and submission of papers. For these reasons, the arguments of Luce Forward will be considered herein.
[2] At oral argument on April 18, 1983, the parties agreed on the record to treat the instant motion as an objection to a filed proof of claim to expedite resolution of the issue.
[3] Claimants also argue that res judicata precludes a decision in the debtor's favor. However, we are asked to decide the enforceability of a claim in bankruptcy, an issue which was not, indeed could not have been, litigated in the prior antitrust suit. We therefore find against the claimant on this issue.
Claimants also argue against the propriety of that part of the debtor's motion which seeks to enjoin the filing of a claim over $4,330,244.91. In light of the disposition of this case, we need not address this argument.
[4] Debtor relies heavily on In re G.A.C., 681 F.2d 1295 (11th Cir.1982). The court finds the case so factually unique as to be inapposite.
[5] Claimants urge that provisions of Section 502 (setting out the grounds for disallowance of claims) is exclusive and dispositive of debtor's motion. We need not go farther in assessment of this argument than section 502(b)(1) providing as a ground for disallowance unenforceability under applicable law.
| {
"pile_set_name": "FreeLaw"
} |
274 F.3d 230 (5th Cir. 2001)
UNITED STATES OF AMERICA, Plaintiff-Appellee,v.JALTHEUS COOPER, also known as Tweet Cooper, Defendant-Appellant,UNITED STATES OF AMERICA, Plaintiff-Appellee,v.EDWARD FAULK, also known as Lite Bread Faulk, Defendant-Appellant,UNITED STATES OF AMERICA, Plaintiff-Appellee,v.ERNEST GREEN, also known as Serv-it Green, Defendant-Appellant,UNITED STATES OF AMERICA, Plaintiff-Appellee,v.JAMES ALEXANDER, also known as Coco Alexander, Defendant-Appellant.
Nos. 00-30208, 00-30209, 00-30210 and 00-30450
UNITED STATES COURT OF APPEALSFIFTH CIRCUIT
November 26, 2001
[Copyrighted Material Omitted][Copyrighted Material Omitted][Copyrighted Material Omitted]
Appeals from the United States District Court for the Eastern District of Louisiana
Before KING, Chief Judge, and DUHE and BENAVIDES, Circuit Judges.
BENAVIDES, Circuit Judge:
1
This direct criminal appeal involves four appellants who pleaded guilty to distribution of an unspecified quantity of heroin and conspiracy to possess with intent to distribute an unspecified quantity of heroin in violation of 21 U.S.C. §§ 841(a)(1) & 846. One appellant, Edward Faulk, also pleaded guilty to being a felon in possession of a firearm in violation of 18 U.S.C. §§ 922(g)(1) and 924(a)(2). The appellants raise various sentencing errors. We conclude that the district court erroneously enhanced Edward Faulk's sentence for possession of a firearm under U.S.S.G. § 2D1.1(b)(1) and committed plain error as to Faulk's term of supervised release. Thus, we VACATE and REMAND Faulk's sentence. We AFFIRM the sentences of Jaltheus Cooper, Ernest Green, and James Alexander.
I. BACKGROUND
2
This consolidated appeal arises from heroin trafficking that occurred in the St. Thomas housing project in New Orleans. Appellants Jaltheus Cooper, Edward Faulk, Ernest Green, and James Alexander, along with codefendant Jacqueline Thompson (not party to this appeal), were charged in a five-count indictment with distribution of unspecified quantities of heroin in violation of 21 U.S.C. § 841(a)(1) and with conspiracy to possess with intent to distribute an unspecified quantity of heroin in violation of 21 U.S.C. §§ 841 (a)(1) and 846. In addition, Faulk was charged with possession of a firearm by a felon.
3
Cooper, Faulk, and Green, as well as Thompson, pleaded guilty and agreed to cooperate with the government in the case against Alexander. After his codefendants agreed to plead guilty, Alexander changed his plea to guilty on the day of his scheduled trial. Cooper, Faulk, and Green agreed to a factual basis which contained the following information. Thompson distributed 2.5 grams of heroin to an undercover agent and a cooperating witness. Green similarly distributed 4.2 grams. Faulk and Cooper distributed 6.9 grams to an undercover agent and a cooperating witness. Faulk possessed a firearm while previously having been convicted of a felony. The firearm was seized from a vehicle occupied by Faulk, and Faulk personally placed it inside a motor vehicle. Cooper, Faulk, and Green also agreed that they conspired with each other and Thompson "to possess with the intent to distribute not more than one (1) kilogram of heroin." Alexander agreed in a separate factual basis that he distributed 4.2 grams of heroin to an undercover cooperating witness. Alexander further agreed to the conspiracy to distribute "a quantity of heroin;" but he disputed the assertion that the amount of heroin involved was at least one kilogram.
4
The government submitted a notice with an accompanying affidavit from the case agent to establish that the quantity of heroin attributable to each of the co-conspirators was at least one kilogram over the course of the conspiracy. The presentence reports (PSR's) for each defendant calculated the base offense level as 32 based on one kilogram of heroin attributable to the defendants. One kilogram is the minimum amount necessary for a base offense level of 32 under U.S.S.G. § 2D1.1(c)(4).
5
Prior to the sentencing hearing for Cooper, Faulk, and Green on February 16, 2000, all defendants joined in objecting to the PSR's attributing one kilogram of heroin to them. The district court conducted an evidentiary hearing for the purpose of determining the drug quantity. ATF Agent Michael Eberhardt testified at the hearing, further elaborating on his affidavit.
6
Eberhardt testified that the investigation of this matter was conducted by agents and officers of the Bureau of Alcohol, Tobacco, and Firearms, and the New Orleans Police Department over the course of 18 to 24 months beginning in March 1997, and that the quantity of heroin involved in the conspiracy was "more than 850 grams." He further testified that his investigation began when a reliable confidential informant identified Cooper, Faulk, Green, Alexander, and Thompson as individuals distributing heroin in the St. Thomas housing project. Eberhardt determined the total amount of heroin involved in the conspiracy by adding various quantities discovered from source information to estimated quantities from personal observation of heroin transactions.
7
Eberhardt first learned that in November 1996 the Jefferson Parish Sheriff's Office seized from the mail a package sent from New York addressed to Claude Robinson in Marrero, Louisiana. The package contained approximately 59 "bundles" of heroin. Robinson told Eberhardt that the package had been arranged for and belonged to Faulk and Cooper. He further said that he had received a total of nine similar packages of heroin. Eberhardt used a conservative estimate of 0.5 grams of heroin contained in each bundle. The total amount of heroin received by Robinson on behalf of Faulk and Cooper was estimated to be 265.5 grams. Eberhardt testified that the seized heroin was unique in the way it was packaged in wax papers with the number "911" or the word "Amazing" stamped in red on the wax paper.
8
During the course of the investigation Eberhardt also interviewed a person named Darryl Fisher, who identified himself as a "runner" for Green, meaning that he made hand-to-hand sales of heroin for Green. According to Fisher, he distributed approximately one bundle of heroin per day for ten months, or a total of 140 grams of heroin. Fisher also related to Eberhardt that Cooper, Faulk, Green, and Alexander were distributing heroin in St. Thomas.
9
Codefendant Thompson told Eberhardt that she sold heroin for Cooper and Faulk for approximately ten months. She also had knowledge that Green and Alexander were selling for Cooper and Faulk. Thompson sold approximately two bundles per day for ten months, or a total of approximately 300 grams of heroin.
10
Another source of information was a New York heroin supplier named Victor Castro. Castro told Eberhardt that on two separate occasions Cooper and Faulk had met with him in New York and purchased a total of $20,000 worth of heroin. Using the street value of the heroin in New Orleans, which is conservative compared to heroin in New York, Eberhardt estimated that Cooper and Faulk had purchased 40 grams of heroin from Castro.
11
Eberhardt further discovered that the U.S. Postal Service had seized a package originating from a "target return address" in New York containing 65 bundles of heroin. This package was sent to Lionel Greer, who Eberhardt knew to be involved with the conspiracy. During an interview with Eberhardt, Greer admitted that the heroin was for people in the St. Thomas project, but he did not give any names. The heroin was packaged in wax paper with "911" or "Amazing" stamped on it, which Eberhardt testified was unique to the Cooper and Faulk group. The total amount of heroin was approximately 32.5 grams.
12
The last specific source of information was Warren Woody, who Eberhardt had determined was Cooper and Faulk's main supplier in New York. Woody was arrested by New York police in late 1997 while in possession of 200 bundles of heroin, each packaged in wax paper and stamped with "911" or "Amazing." Woody also possessed a bus ticket to New Orleans at the time of his arrest, and Woody's girlfriend told police that he had planned to meet friends in New Orleans. The amount of heroin attributed to the Cooper and Faulk organization from Woody was estimated to be 100 grams. The total amount of heroin derived from Robinson, Fisher, Castro, Cooper, and Woody was 878 grams.
13
Eberhardt also testified that beginning in March 1997, he spent approximately 700 hours doing surveillance at the St. Thomas housing project and participating in traffic stops. He personally witnessed numerous heroin transactions involving Green. He also stated that during the traffic stops people would be found with small amounts of heroin, such as two or three bundles, that they had just purchased. Based on the 878 grams of heroin identified from other sources and the quantities from his own personal observation during surveillance and traffic stops, Eberhardt testified that one kilogram was a conservative estimate of the amount of heroin involved in the conspiracy from November 1996 through May 1999.
14
Based on Eberhardt's affidavit and testimony and the factual basis stating that "not more than one (1) kilogram" of heroin was involved, the district court overruled the defendants' objections to the amount of heroin. The district court found that the evidence showed enough activity in the conspiracy that the defendants could have reasonably foreseen the amount of drugs distributed to be at least one kilogram.
15
The government filed a motion for downward departure with respect to Cooper, Faulk, and Green based on their substantial assistance, recommending a downward departure of ten percent of their respective sentences. The district court granted the motion. The court sentenced: (1) Cooper to 151 months and 5 years supervised release; (2) Faulk to 211 months and 5 years supervised release; (3) Green to 136 months and 5 years supervised release; and (4) Alexander to 140 months and 4 years supervised release.
16
Cooper, Faulk, and Green each filed a timely notice of appeal. Alexander filed a notice of appeal that was later deemed untimely. Ultimately, on remand, the district court found excusable neglect, and thus we now have jurisdiction over his appeal.
17
Meanwhile, after Faulk had been sentenced, the U.S. Probation Office issued a revised PSR, deleting two criminal history points that had been erroneously attributed to Faulk, which resulted in a lower guideline range. Faulk then filed a motion to enforce the downward departure recommendation that the government had made with respect to his first sentencing so that he would again receive a ten percent downward departure from the revised guideline range for his substantial assistance. The government objected, and the district court imposed the original sentence of 211 months at resentencing. Faulk timely filed a supplemental notice of appeal to include the district court's denial of his motion to enforce departure.
II. ANALYSIS
18
A. Amount of Heroin Attributable to the Appellants
19
All four appellants argue that the district court erred in finding that one kilogram of heroin was involved in the conspiracy. Under the sentencing guidelines, the base offense level for a defendant convicted of a drug offense is determined based on the amount of drugs involved. See U.S.S.G. § 2D1.1(a)(3). The quantity includes the drugs for which the defendant is directly responsible and the drugs that can be attributed to him in a conspiracy as relevant conduct. See § 1B1.3(a)(1). A district court's factual determination of a defendant's relevant conduct for sentencing purposes is reviewed for clear error. See United States v. Schorovsky, 202 F.3d 727, 729 (5th Cir. 2000); United States v. Puig-Infante, 19 F.3d 929, 942 (5th Cir. 1994). A factual finding is clearly erroneous "'when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'" United States v. Hill, 42 F.3d 914, 918 (5th Cir. 1995)(citation omitted). A factual finding is not clearly erroneous if it is plausible in light of the record read as a whole. Puig-Infante, 19 F.3d at 943.
1. Cooper
20
Cooper's only argument on appeal is that the district court was clearly erroneous in its finding that one kilogram of heroin was involved in the conspiracy. Cooper concedes that Eberhardt's testimony was well-founded as to 745.5 grams of heroin. He asserts that the testimony was dubious and/or speculative as to the remaining amounts up to one kilogram. Cooper contests the 32.5 grams that were seized from the package addressed to Lionel Greer, arguing that although Greer said the heroin was intended for the St. Thomas housing project, he could not provide any names. Cooper further argues that the 100 grams seized from Warren Woody in New York was unreasonably linked to the conspiracy based only on the fact that Woody possessed a bus ticket to New Orleans when he was arrested. He further challenges the remaining 192 grams of heroin on the basis that Eberhardt's testimony was unverifiable conjecture. Finally, Cooper argues that nothing in the record supports Eberhardt's testimony concerning the packaging of the heroin that shows such packaging was unique to this conspiracy.
21
Ordinarily, a PSR bears sufficient indicia of reliability to be considered as evidence by the sentencing judge when making factual determinations. See United States v. Narviz-Guerra, 148 F.3d 530, 537 (5th Cir. 1998). The district court may adopt the facts contained in the PSR without further inquiry if the facts have an adequate evidentiary basis and the defendant does not present rebuttal evidence. See United States v. Alford, 142 F.3d 825, 832 (5th Cir. 1998). Although he cross-examined Eberhardt, Cooper presented no rebuttal evidence to the PSR's calculation based on one kilogram of heroin. In addition to the PSR, however, the district court had the benefit of an affidavit and live testimony from Eberhardt concerning the investigation into the Faulk and Cooper organization.
22
The evidence was sufficient to link the 32.5 grams of heroin addressed to Lionel Greer to this conspiracy. First, Greer admitted to Eberhardt that the heroin was meant to be distributed in St. Thomas. Despite Cooper's assertion that Greer "could not provide any names," Eberhardt's testimony was that Greer "did not" specifically name anyone. Eberhardt testified, however, that the package was sent from a New York address that had been targeted as part of the investigation into the present conspiracy. He also testified that he knew Greer "to be involved in the conspiracy to an extent." Finally, the heroin was packaged in wax paper with the telltale "911" and "Amazing" stamped on it, which Eberhardt testified was unique to this conspiracy. Eberhardt testified that heroin sold in other parts of the city was packaged in foil, rather than wax paper, and that the packaging helps identify the group to which it belongs.
23
As for the 100 grams of heroin seized from Woody, Eberhardt testified that he had identified Woody as Cooper and Faulk's main New York supplier. Woody was on his way to New Orleans "to meet friends" when he was arrested with the heroin, as evidenced by his possession of the bus ticket. The heroin also was in the same unique wax paper packaging as the heroin sold by Cooper and Faulk.
24
It is true, as intimated by Cooper, that heroin packaged in wax paper conceivably could have been destined for others in New Orleans. Cooper's argument would be stronger if the packaging was the only link between the heroin and this conspiracy. However, when the heroin also originates from people who are identified as Cooper and Faulk's main supplier (Woody) and as being involved in the conspiracy (Greer), it is not implausible that the heroin was meant for Cooper and Faulk. Puig-Infante, 19 F.3d at 942. There is no clear error in the district court's finding.
25
As for the remaining amounts of heroin, Eberhardt testified that he spent numerous hours of surveillance observing the members of the conspiracy engaged in heroin transactions. He received daily reports from confidential informants concerning the drug activity of the defendants. He arranged for a confidential informant to make purchases directly from each of the defendants, which totaled approximately 13.6 grams. He further participated in numerous traffic stops of individuals who had just purchased between two and three bundles of heroin from the defendants. Eberhardt testified that the traffic stops would "easily" bring the total amount of heroin "to near 1,000 [grams], if not over." Finally, Eberhardt testified that his calculation of the amounts seized from the various sources used a "very, very conservative estimate" of .5 grams per bundle and that one kilogram was "a conservative estimate" of the total amount for the conspiracy from November 1996 to May 1999.
26
A district court may consider "'estimates of the quantity of drugs for sentencing purposes.'" Alford, 142 F.3d at 832 (quoting United States v. Sherrod, 964 F.2d 1501, 1508 (5th Cir. 1992)). Eberhardt made clear that his numbers were estimates and that they were on the conservative side. The district judge stated that she "believe[d] the agent's estimate." See also Puig-Infante, 19 F.3d at 943 (upholding drug quantity finding where district court explicitly stated that it relied not only on the PSR but also the testimony from the witness stand). As such, Cooper has not shown clear error in the district court's finding that one kilogram of heroin was attributable to the conspiracy.
2. Faulk
27
Faulk asserts that the district court erroneously used one kilogram as the amount of drugs involved rather than the 13.6 grams of heroin admitted in the factual basis. Faulk argues that Eberhardt's testimony that Faulk and Cooper were the main suppliers was based on uncorroborated hearsay by informants. He contends that Eberhardt's testimony concerning the quantity of heroin is therefore speculative.
28
A district court has wide discretion in determining which evidence to consider and to credit for sentencing purposes. See United States v. Davis, 76 F.3d 82, 84 (5th Cir. 1996). The defendant bears the burden of showing that the information relied upon by the district court is materially untrue. Id. As outlined above with respect to Cooper, the district court did not err in determining the amount heroin to be one kilogram.
3. Green
29
Green also argues that the district court erred in determining that one kilogram of heroin was attributable to the defendants. Green asserts that Eberhardt failed to testify directly that the amount of heroin was one kilogram and merely agreed with a leading question from the prosecutor. Green's argument is unavailing. As noted in detail above with respect to Cooper, Eberhardt's testimony was extensive concerning the amounts of heroin involved. The district court also had the benefit of Eberhardt's affidavit, which likewise stated that the amount involved was "at least one kilogram."
4. Alexander
30
Alexander argues that the district court erred in attributing one kilogram of heroin to him because: (1) the evidence was insufficient to prove the amount was one kilogram, as the PSR's calculation was founded on a factual basis agreed to by the other defendants who were more culpable and more involved in the conspiracy;1 (2) his role in the conspiracy was limited in that he was incarcerated on unrelated charges prior to October 30, 1996 and reincarcerated in1998, and thus could not be held responsible for amounts of heroin involved while he was in prison; (3) the government's evidence showed he was involved in only one transaction involving 4.2 grams of heroin; and (4) he presented evidence showing that he had withdrawn from the conspiracy. In the district court, Alexander challenged the amount of drugs involved in the conspiracy and presented evidence at an evidentiary hearing in an attempt to rebut the PSR's findings with respect to the amount of drugs attributable specifically to him.
31
It is well established that relevant conduct under the sentencing guidelines includes all reasonably foreseeable acts of coconspirators in furtherance of the conspiracy. See § 1B1.3(a)(1)(B). Nonetheless, "the reasonable foreseeability of all drug sales does not automatically follow from membership in the conspiracy." United States v. Wilson,116 F.3d 1066, 1077 (5th Cir. 1997), vacated in part sub. nom. United States v. Brown, 123 F.3d 213 (5th Cir.1997) (en banc).2 To determine a defendant's sentence for participation in a drug conspiracy, the district court must make the following findings: (1) when the defendant joined the conspiracy; (2) the quantities of drugs that were within the scope of the agreement; and (3) the quantities the defendant could reasonably foresee being distributed by the conspiracy. Id. at 1076.
32
The conspiracy count (to which Alexander pleaded guilty) alleged that the conspiracy began "at a time unknown, but prior to in or about November 1996, and continuing through the filing of this indictment," which occurred on May 21, 1999. It is undisputed that Alexander was released from prison in October of 1996. He was reincarcerated sometime in 1998.3 At the evidentiary hearing, Eberhardt testified that the first time he was able to corroborate Alexander's involvement in the conspiracy through his confidential informant was on April 24, 1997. On cross examination, Agent Eberhardt admitted that he could "only prove that [Alexander] distributed heroin on one occasion." Eberhardt was referring to the 4.2 grams of heroin he witnessed Alexander sell on May 7, 1997. That conduct formed the basis of the distribution count in the indictment to which Alexander pleaded guilty. Eberhardt further testified that, as compared to codefendant Ernest Green, Alexander was not a "regular" selling drugs on the corner.
33
Additionally, in an affidavit, Eberhardt provided that during his investigation he interviewed codefendant Thompson, who stated that she had personal knowledge of Alexander selling heroin for Faulk and Cooper. Eberhardt's affidavit further provided that he interviewed Daryl Fisher, a heroin dealer who worked for Green, and Fisher stated that he had personal knowledge that Faulk, Cooper, Green, and Alexander were all involved in the distribution of heroin.
34
In rebuttal, Alexander called as a witness Richard Krumm, who had been the general manager of a New Orleans restaurant called Metro Bistro. Krumm testified that Alexander worked as a dishwasher at the Metro Bistro "at least 30 to 40 hours a week" from October of 1997 until May of 1998. Business records were also introduced that corroborated this testimony. In contrast, the evidence at the hearing and in the PSR indicates that the other defendants were not gainfully employed.
35
Alexander also called as a witness Reverend Torin Sanders, who was a pastor at the Sixth Baptist Church in New Orleans. Reverend Sanders testified that Alexander became an active member in late 1996 after being released from prison. Alexander was involved in the drug ministry and attended meetings on Monday nights and also attended Reverend Sanders' monthly service at the parish prison. Alexander stopped attending in March or April of 1997 and became active again in the ministry in the summer of 1998.
36
After hearing this evidence, the district court issued a statement of reasons for imposing sentence, which provided in part as follows:
37
Defendant objects to the finding that the readily provable amount attributable to the conspiracy for sentencing purposes is one kilogram. Defendant has objected to the quantity of heroin attributed to him. Defendant asserts that the amount of one kilogram was a negotiated weight for sentencing purposes for other defendants who played greater roles in the conspiracy and were members of the conspiracy for longer periods of time. Defendant states that his role was limited in time and activity, as shown by the fact that he was incarcerated until October 26, 1996, and further, that the government's evidence reveals that he was observed during only a single transaction on May 7, 1997.
38
Pursuant to the evidence adduced at the defendant's evidentiary hearing and the affidavit of Special Agent Eberhardt, the Court finds that defendant Alexander could foresee the sale of at least one kilogram of heroin by the conspiracy. The Court finds sufficient evidence in support of Alexander's participation in the drug conspiracy, to which Alexander plead guilty, for the period between his release from custody in October 1996, and his reincarceration in May, 1998, such that Alexander could reasonably foresee the sale of at least one kilogram of heroin in connection with the joint criminal activities of the Faulk conspiracy. In addition, the Court finds that defendant's involvement in drug ministry and/or full-time employment does not preclude his involvement in the Faulk drug conspiracy.
39
In short, the district court expressly considered Alexander's arguments and evidence but nevertheless concluded that he participated in the conspiracy from October of 1996 through May of 1998 and based on that participation, could have reasonably foreseen the sale of at least one kilogram.
40
Our review of the evidence indicates that Alexander certainly was not as involved in the conspiracy as Faulk, Cooper, or even Green. The evidence indicates that Faulk and Cooper received a greater share of the profits and were in charge of the organization. Also, Alexander's evidence regarding his employment and drug ministry participation tends to limit his role in the conspiracy and the scope of his agreement. The district court, however, considered that evidence and expressly found that Alexander's involvement in the drug ministry and his full time employment did not preclude his involvement in the conspiracy.
41
Additionally, we are mindful that a district court should consider whether a defendant's incarceration limited the foreseeability of any of the transactions that occurred after the defendant is incarcerated. Puig-Infante, 19 F.3d at 945. Again, however, the district court expressly took into consideration the time period in which Alexander was incarcerated.
42
Under the above described circumstances, the district court's finding is plausible in light of the record as a whole. Therefore, we do not believe that the district court's finding is clearly erroneous.
43
B. Apprendi challenge to prison sentences.
44
Relying on Apprendi v. New Jersey, 530 U.S. 466, 120 S. Ct. 2348 (2000), Alexander, Faulk, and Green argue that their sentences must be vacated and remanded for resentencing.4 The Supreme Court held last year that "[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt." Apprendi, 120 S. Ct. at 2362-63. This Court has applied Apprendi's holding to the sentencing scheme for drug convictions under 21 U.S.C. § 841(b). See United States v. Doggett, 230 F.3d 160, 164-65 (5th Cir. 2000). In Doggett, we held "that if the government seeks enhanced penalties based on the amount of drugs under 21 U.S.C. § 841(b)(1)(A) or (B), the quantity must be stated in the indictment and submitted to a jury for a finding of proof beyond a reasonable doubt." Id.
45
In the present case, the amount of heroin involved in the conspiracy count was not stated in the indictment.5 Error under Apprendi requires reversal only if a defendant's sentence exceeds the statutory maximum. See United States v. Keith, 230 F.3d 784, 787 (5th Cir. 2000); Doggett, 230 F.3d at 165 (stating that even if a drug amount is not alleged in the indictment, Apprendi does not apply where the sentence is less than the statutory maximum provided by 21 U.S.C. § 841(b)(1)(C)). Section 841(b)(1)(C) sets the statutory maximum for an offense involving an unspecified amount of a Schedule I substance at 20 years in prison. Heroin is a Schedule I substance. See United States v. Hernandez-Avalos, 251 F.3d 505, 508 (5th Cir. 2001); § 812(c), Schedule I(b)(10). The appellants' sentences of imprisonment do not exceed the statutory maximum: 211 months (Faulk) 140 months (Alexander); and 136 months (Green). Apprendi therefore offers no succor with respect to the sentences of imprisonment.
46
C. Apprendi challenge to supervised terms of release.
47
In Faulk's supplemental brief, he sets forth his Apprendi argument and concludes by generally challenging the length of the term of supervised release imposed under the charging statute, 21 U.S.C. § 841. And, as previously noted, Green adopted all applicable arguments made by the other appellants. Faulk and Green thus have adequately challenged their terms of supervised release.
48
Faulk and Green pleaded guilty to distribution of heroin and conspiracy to possess with intent to distribute heroin in violation of 21 U.S.C. §§ 841(a)(1) and 846. Because the indictment did not set forth the quantity of heroin, the appellants are guilty of a Class C felony. Title 18 § 3583(b)(2) provides that "[e]xcept as otherwise provided, the authorized terms of supervised release are . . . for a class C or D felony, not more than three years . . . ." (emphasis added). This Court has recognized that § 3583(b) is a default supervised release statute. United States v. Meshack, 225 F.3d 556, 578 (5th Cir. 2000). In the case at bar, the appellants were convicted under 21 U.S.C. § 841(a)(1). The corresponding penalty section, § 841(b)(1)(C), provides that in the case of a controlled substance in schedule I (here, heroin), a defendant with no prior felony drug conviction shall receive a term of supervised release of "at least three years." This Court has recognized the differing language in the two statutes, § 3583(b)(2) and § 841(b)(1)(C), and determined that a defendant with no prior felony drug conviction is "required to receive a supervised release term of not less than nor more than three years." United States v. Kelly, 974 F.2d 22, 24 (5th Cir.1992). However, if a defendant does have a prior felony drug conviction that has become final, § 841(b)(1)(C) provides that the court must "impose a term of supervised release of at least 6 years in addition to such term of imprisonment."
49
The record indicates that Faulk does not have a prior felony drug conviction but that Green does have such a prior conviction. Under these circumstances, Green is not entitled to relief; Faulk, however, should have received a three-year term of supervised release. Faulk did not object. Nevertheless, "[u]nder plain error review, we correct overlong terms of supervised release." Meshack, 225 F.3d at 578 (citing Kelly, 974 F.2d at 24-25).6 This Court has modified terms of supervised release that exceeded the statutory maximum without remanding for resentencing. See Doggett, 230 F.3d at 165 n.2. However, as set forth below, because we are vacating Faulk's sentence on another ground, the district court will have the opportunity on remand to correct the term of supervised release to the statutorily mandated three-year term.
50
D. Faulk's Enhancement for Possession of a Firearm under § 2D1.1(b)(1).
51
Faulk argues that the district court erroneously enhanced his sentence based on possession of a firearm under U.S.S.G. § 2D1.1(b)(1),7 which provides that "[i]f a dangerous weapon (including a firearm) was possessed, increase by 2 levels." Although in the instant case he pleaded guilty to the offense of being a felon in possession of a gun in violation of 18 U.S.C. § 922(g)(1), he argues that the gun he illegally possessed had no connection to the heroin offenses. Faulk states that when he was arrested and the gun was seized from the vehicle there was no heroin found in the vehicle and there was no evidence linking the car to the heroin trafficking. Without such a nexus, Faulk argues, the enhancement was unwarranted.
52
As indicated, the sentencing guidelines provide that the defendant's sentence should be increased by two levels whenever, in a crime involving the manufacture, import, export, trafficking, or possession of drugs, the defendant possessed a dangerous weapon. See § 2D1.1(b)(1); United States v. Gaytan, 74 F.3d 545, 559 (5th Cir. 1996). "The government has the burden of proof under § 2D1.1 of showing by a preponderance of the evidence 'that a temporal and spatial relation existed between the weapon, the drug trafficking activity, and the defendant.'" United States v. Vasquez, 161 F.3d 909, 912 (5th Cir. 1998) (quoting United States v. Eastland, 989 F.2d 760, 770 (5th Cir. 1993)). Under this standard, the government must show that "the weapon was found in the same location where drugs or drug paraphernalia are stored or where part of the transaction occurred." Eastland, 989 F.2d at 770 (internal quotation marks and citation omitted). This is a factual finding and thus reviewed for clear error. United States v. Jacquinot, 258 F.3d 423, 430 (5th Cir. 2001).
53
Faulk correctly asserts that in cases dealing with an enhancement for possession of a firearm there has been evidence affirmatively linking the drug trafficking activity to the weapon or the place where the weapon was found. In United States v. Brown, this Court upheld the two-level enhancement pursuant to § 2D1.1(b)(1) where police found a shotgun in the trunk of the defendant's car during the course of their investigation. 217 F.3d 247, 261 (5th Cir. 2000), remanded on other grounds, Randle v. United States,531 U.S. 1136, 121 S.Ct. 1072 (2001). Witnesses provided the necessary link between the gun and the drug trafficking by testifying that the defendant used the vehicle to transport crack cocaine. Similarly, in Vasquez, guns kept at the defendant's place of business were used to enhance the sentence because the district court found that the defendant used the business as a location to store drugs and the proceeds of drug sales. Vasquez, 161 F.3d at 912; United States v. Flucas, 99 F.3d 177, 178-79 (5th Cir. 1996) (enhancement applied where gun and cocaine both found under defendant's car seat); United States v. Myers, 150 F.3d 459, 465 (5th Cir. 1998) (gun found in apartment where transactions related to drug conspiracy took place).
54
In contrast to the facts of Brown and Vasquez, no heroin or paraphernalia was found in the vehicle when the firearm was seized, and there is nothing in the record showing that Faulk used that vehicle to transport heroin or to conduct any other activities associated with the conspiracy. Although a codefendant's affidavit provides that Faulk would "usually" deliver heroin to her while driving a black "Trans Am," the record on appeal does not indicate that Faulk was in that Trans Am on February 2, 1997, when the firearm was seized. Likewise, the codefendant's affidavit does not indicate that Faulk ever possessed a firearm in the Trans Am. It is undisputed that Faulk did not own the vehicle in which he was a passenger at the time the gun was seized. It thus appears unlikely that the Trans Am in which he usually delivered the heroin was the vehicle from which the gun was seized. In any event, it was not proven by a preponderance of the evidence.
55
The government responds that when Faulk was arrested on February 2, 1997, he was in possession of the firearm during the time line of the charged conspiracy, which ran from "prior to in or about November 1996" to May 1999. It is true that Faulk possessed the gun at a point in time during which the government charged that the conspiracy was still in progress. However, our research has revealed no cases in which the enhancement was applied without drugs being found with the weapon or evidence presented that the location of the weapon was used in connection with drug trafficking activities. As a practical matter, the government's argument would result in an enhancement any time a drug offender is found with a gun regardless of whether drugs are also found or otherwise connected to the gun's location as long as the government alleges that the defendant is involved in an ongoing conspiracy. Of course, such a holding would relieve the government of its burden of proving that a temporal and spatial relation existed between the weapon, the drug trafficking activity, and the defendant.
56
Our decision in United States v. Siebe, 58 F.3d 161 (5th Cir. 1995), is instructive on this issue. In that case, the appellant asserted that the district court erred in assessing two points under § 2D1.1(b)(1) based solely on the presumption that he possessed a firearm because he was a police officer. We explained that absent the presumption there was no evidence that Siebe possessed a firearm during the commission of the offense. While we acknowledged that the FBI had discovered 90 guns in Siebe's residence, there was no evidence of drug trafficking activities at the residence. As such, we concluded that the government had not shouldered its burden of proving the requisite connection between the firearm and the drug trafficking. Thus, we remanded for resentencing without the two point enhancement.
57
We have recognized that firearms are "tools of the trade" in drug conspiracies. United States v. Mergerson, 4 F.3d 337, 350 (5th Cir. 1993). Nonetheless, in the instant case, the government failed to demonstrate that a temporal and spatial relation existed between the weapon, the drug trafficking activity, and the defendant. Under these circumstances, the district court clearly erred in finding the enhancement under § 2D1.1(b)(1) applies.8 We therefore vacate Faulk's sentence and remand for resentencing without the enhancement.
58
E. Faulk's Enhancement as an Organizer or Leader.
59
Faulk argues that the district court erred by finding that he was the organizer or leader of a criminal enterprise and by enhancing his sentence four levels. He argues that rather than being a leader or organizer of criminal activity he was merely a co-supplier of heroin along with Cooper. According to Faulk, he merely distributed the drugs to the codefendants, who could then resell it to anyone they wished. He contends that there was no evidence that he controlled any of the other defendants or claimed a greater percentage of the profit from the drug sales.
60
"If the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive" a four-level increase is warranted. See § 3B1.1(a). In determining whether a defendant is a leader, a court should consider the following factors: "the exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others." § 3B1.1, comment. (n.4). We review such a factual finding for clear error. United States v. Thomas, 120 F.3d 564, 574 (5th Cir. 1997).
61
Contrary to Faulk's arguments, the evidence showed that both Faulk and Cooper were the leaders and organizers of the heroin distribution. At least five participants in the criminal activity are found by looking at the codefendants: Cooper, Faulk, Green, Alexander, and Thompson. See United States v. Wilder, 15 F.3d 1292, 1299 (5th Cir. 1994) (defendant may be included among the five participants). Eberhardt testified that Claude Robinson told him the heroin bundles he received had been arranged for, purchased by, and belonged to Faulk and Cooper. Faulk and Cooper further traveled to New York to obtain heroin from Victor Castro, one of their New York suppliers. Faulk and Cooper in turn supplied Green, Alexander, and Thompson. Eberhardt testified that Thompson told him that she sold heroin on behalf of Faulk and Cooper. Thompson also signed an affidavit stating that Faulk had asked her if she wanted to sell heroin herself since she had been referring customers to him. This affidavit provides that Faulk recruited Thompson to sell for him. Moreover, Thompson's affidavit states that she received 5 packs of heroin at a time from Faulk and Green, which she then sold for approximately $1,250. Faulk allowed her to keep $150 of the sale. This arrangement shows that Faulk received a greater share of the profits.
62
Proof that the defendant supervised only one other culpable participant is sufficient to make the defendant eligible for the enhancement. See United States v. Washington, 44 F.3d 1271, 1281 (5th Cir. 1995); United States v. Okoli, 20 F.3d 615, 616 (5th Cir. 1994). There can also be more than one person who qualifies as a leader or organizer of a criminal association or conspiracy. See § 3B1.1, comment. (n.4). Given Faulk and Cooper's arrangement for the heroin deliveries, their supplying of the other defendants, Faulk's recruitment and control of Thompson, and his claim to a greater portion of profit from Thompson's sales, the district court did not err in finding that Faulk was a leader or organizer. See § 3B1.1, comment. (n.4); United States v. Ocana, 204 F.3d 585, 592 (5th Cir. 2000).9
F. Downward Departure
63
Faulk argues that the district court erred by failing to actually depart from his applicable guideline range after granting the government's § 5K1.1 motion based on substantial assistance.10 Specifically, he argues that although the district court initially granted the government's §5K1.1 motion to allow a ten percent reduction in sentence, after an error in the PSR was corrected at resentencing, the court erroneously refused to provide the reduction.
64
A district court has almost complete discretion to determine the extent of a departure under § 5K1.1. United States v. Alvarez, 51 F.3d 36, 41 (5th Cir. 1995). The district court also has almost complete discretion to deny the government's § 5K1.1 motion. Myers, 150 F.3d at 463. This Court has jurisdiction to review a challenge to a sentence only if it was (1) imposed in violation of law, (2) imposed as a result of an incorrect application of the guidelines, (3) resulted from an upward departure, or (4) was unreasonably imposed for an offense not covered by the guidelines. United States v. Yanez-Huerta, 207 F.3d 746, 748 (5th Cir. 2000). We lack jurisdiction to review the district court's refusal to depart downward, unless the district court's refusal was based on a mistaken belief that it lacked the power to depart downward. Id. "A refusal to grant a downward departure is a violation of law only if the court mistakenly assumes that it lacks authority to depart." Id.
65
Based on the initial PSR, Faulk's guideline range was 235 to 293 months. After granting the government's § 5K1.1 motion for a ten percent departure, the court sentenced Faulk to 211 months. Subsequently, the probation office revised Faulk's criminal history category in the PSR, resulting in an applicable guideline range of 210 to 262 months. Faulk asserts that after the revision he was entitled to a sentence of 189 months with the § 5K1.1 departure (ten percent). However, the government did not reurge its § 5K1.1 motion at resentencing. Instead, it filed a supplemental motion and memorandum urging the district court "to maintain the current sentence [of 211 months] in light of the very serious nature of this offense along with considerations of the defendant's cooperation." In the court's revised statement of reasons for imposing sentence, it agreed with the government and "decline[d] to modify defendant's sentence." The court resentenced Faulk to the original sentence, 211 months.
66
Faulk, relying on the following language also contained in the court's revised statement of reasons for imposing sentence, argues that the court in fact granted the government's motion: "The Court finds that the nature, extent, significance, and timeliness of the assistance rendered by the defendant warrant a downward departure." It is unclear but it appears this language may have been inadvertently left in the document from the original sentencing.
67
Our interpretation of these events is that the government rescinded its § 5K1.1 motion at Faulk's resentencing and thus, the district court did not have the authority to depart downward. "Absent a motion for downward departure made by the [g]overnment, a sentencing court is without authority to grant a downward departure on the basis of substantial assistance under § 5K1.1." United States v. Price, 95 F.3d 364, 367 (5th Cir. 1996); see also Wade v. United States, 504 U.S. 181, 112 S.Ct. 1840, 1843, 118 L.Ed.2d 524 (1992) (stating that "upon motion of the government" is a condition limiting the court's authority to depart under § 5K1.1).11 Because the district court did not have authority to grant the departure, it could not have erred in refusing to do so.
68
Even assuming the government's § 5K1.1 motion was not rescinded, another interpretation of the events would be that the district court denied the motion and simply refused to depart downward. Under that scenario, we have no jurisdiction to review the decision unless the district court was mistaken about its authority to do so, and there is no indication of that in the instant case. Yanez-Huerta, 207 F.3d at 748.
69
Another alternative scenario, again assuming a properly filed § 5K1.1 motion, would be that the district court granted the motion, but failed to depart downward. If so, this scenario would be controlled by United States v. Hashimoto, 193 F.3d 840, 843 (5th Cir. 1999). In Hashimoto, the government filed a § 5K1.1 motion at the defendant's resentencing after appeal and remand. The district court granted the motion, expressly stated that it was granting the departure, and yet imposed a sentence within the guideline range. Id. at 843. The defendant appealed, contending that his sentence must be vacated because although the district court granted the §5K1.1 motion it did not depart downward. This Court held that because the defendant was not challenging the extent of an actual downward departure or the denial of a § 5K1.1 motion, "our rule that we will not review the denial of a § 5K1.1 motion does not apply." Id. The question was whether, after granting that motion, the district court was required to depart downward. This Court held that although the district court erred in not departing after granting the § 5K1.1 motion, the error was harmless because the sentence imposed was authorized. Likewise, here any error is harmless because the district court was authorized to impose the sentence Faulk received. Accordingly, our precedent precludes Faulk from obtaining relief on this claim.
III. CONCLUSION
70
For the above reasons, we VACATE and REMAND Faulk's sentence. We AFFIRM the sentences of Cooper, Green and Alexander.
71
AFFIRMED in part, VACATED in part, and REMANDED.
Notes:
1
The factual basis signed by Alexander provided that the amount of heroin was in dispute. The factual basis with respect to the other appellants provided that "not more than one (1) kilogram of heroin" was involved in the drug offenses.
2
The relevant portion of the panel opinion "remain[ed] unaffected." United States v. Brown, 161 F.3d 256, 257 n.1 (5th Cir. 1998) (en banc).
3
In its statement of reasons for imposing sentence, the district court indicated that Alexander was reincarcerated in May of 1998. The PSR indicates that Alexander was arrested on October 21, 1998 on a state charge of possession of heroin.
4
Alexander raised this issue in his initial brief. This Court allowed Faulk to file a supplemental brief in which he raised this issue. In a letter to this Court filed on December 26, 2000, Green adopted the arguments of his codefendants on appeal.
5
We note that the factual basis agreed to by Cooper, Faulk, and Green stated that the amount of heroin involved was "not more than one (1) kilogram."
6
Although Alexander raised an Apprendi challenge, he did not specifically challenge his term of supervised release. Cooper did not raise any Apprendi challenge. Nevertheless, we have raised sua sponte Apprendi issues in other cases. See United States v. Gonzalez, 259 F.3d 355, vacated for rehearing en banc, 2001 WL 946413 (Aug. 15, 2001); United States v. Vasquez-Zamora, 253 F.3d 211, 214 (5th Cir. 2001); United States v. Garcia, 242 F.3d 593, 599 (5th Cir. 2001). We decline to review on our own motion an Apprendi challenge to Cooper and Alexander's terms of supervised release. We note that even if we exercised our discretion to do so in this case, the record indicates there was no plain error.
7
Section 2D1.1 is entitled "Unlawful Manufacturing, Importing, Exporting, or Trafficking (Including Possession with Intent to Commit These Offenses); Attempt or Conspiracy."
8
Paraphrasing § 2D1.1, comment. (n.3), the district court stated that "[b]ecause the weapon was present, and it is not clearly improbable that the weapon was connected with the offense, the enhancement is warranted." As set forth above, however, the government did not establish that Faulk possessed the weapon within this Court's interpretation of § 2D1.1, i.e. a temporal and spatial relation must exist between the weapon, the drug trafficking activity, and the defendant. Thus, the burden had not yet shifted to Faulk to prove that it was clearly improbable that the weapon was connected with the offense. Cf. United States v. Marmolejo, 106 F.3d 1213, 1216 (5th Cir. 1997) (explaining that the firearm was possessed during the commission of a drug offense and the defendant had failed to bear his burden of proving that it was "clearly improbable" that the gun was connected to the offense).
9
Faulk also argues that one point was erroneously added to his criminal history pursuant to U.S.S.G. § 4A1.1(e) for committing the offense less than two years after being released from imprisonment. He contends that because the indictment states the offense commenced on or about November 1996 and he was released from prison on October 28, 1994, he committed the offense more than two years after his release. The indictment actually states that the conspiracy began "at a time unknown, but prior to in or about November 1996." (emphasis added). In any event, Faulk concedes in his brief that even if the one point added to his criminal history were removed his sentence would not change. Accordingly, any error is harmless.
10
In pertinent part, U.S.S.G. § 5K1.1 provides that "[u]pon motion of the government stating that the defendant has provided substantial assistance in the investigation or prosecution of another person who has committed an offense, the court may depart from the guidelines."
11
"[A] district court may review the Government's refusal to move for a downward departure if the refusal is based on an unconstitutional motive." United States v. Solis, 169 F.3d 224, 226 (5th Cir. 1999). There has been no assertion that the government's refusal to move for a downward departure at resentencing was based on an unconstitutional motive.
| {
"pile_set_name": "FreeLaw"
} |
195 Cal.App.3d 1201 (1987)
241 Cal. Rptr. 248
MARGARET VAN LUVEN, Plaintiff and Respondent,
v.
ROONEY PACE, INC., Defendant and Appellant.
Docket No. G004537.
Court of Appeals of California, Fourth District, Division Three.
October 30, 1987.
*1202 COUNSEL
Hughes, Hubbard & Reed, William T. Bisset and Charles Avrith for Defendant and Appellant.
Coulombe & Spiszman and Ronald B. Coulombe for Plaintiff and Respondent.
OPINION
CROSBY, J.
This is yet another in a seemingly endless stream of cases involving brokerage houses and arbitration agreements. (1a) On the record presented here, we hold the successor of a nonsignatory to a contract containing an arbitration provision cannot require a signatory to arbitrate.
I
A
Margaret Van Luven's complaint recounts the following: Account executive Steven Sullivan, employed by the Newport Beach office of now defunct J. David Securities, commenced supervision of her securities trading accounts in 1980. When Van Luven, then age 76, entered Hemet Valley Hospital in March 1983, she telephoned Sullivan and requested him to hold all her securities for "safekeeping."
In February 1984, shortly after J. David's demise, Sullivan joined Rooney Pace and transferred Van Luven's accounts to that firm. Before and after *1203 Sullivan's change of employment, he frequently sold blocks of Van Luven's stock and redeemed bonds and bond interest coupons, placing the proceeds in the account of a dummy corporation appropriately yclept "Liberty Street Securities." Sullivan forged Van Luven's signature on a general power of attorney and several other documents to facilitate these schemes and even pledged her assets as collateral to secure his own personal loans.
Van Luven occasionally received small payments from Sullivan on an "as needed" basis, along with monthly computerized statements misrepresenting the actual value of her stock portfolio. Suspicious of Sullivan's conduct, Van Luven demanded the return of her securities on several occasions in late 1985. Sullivan refused, sending Van Luven a rambling letter protesting his legal and spiritual innocence.
B
Unconvinced, Van Luven sued Rooney Pace for damages incurred as a result of the unauthorized securities transactions, alleging the facts recounted above. Rooney Pace sought an order compelling arbitration of the action. Its petition was based on an arbitration agreement purportedly signed by Van Luven in February 1983, when her account was still with J. David, who functioned as an "introducing broker." The only parties to the agreement, however, were Van Luven and Bear Stearns & Co., the "clearing broker" for her account and not a party to this action. In industry parlance, an introducing broker is the firm whose account executives deal with customers, i.e., solicit orders and offer recommendations. A clearing broker, on the other hand, has no client contact, but places and executes orders with the exchange at the direction of the introducing broker.
In support of the petition, Rooney Pace's general counsel, Arnold Weinberg, provided a declaration which expanded on the dual broker concept and included the following details: "Since Bear Stearns is the broker which actually executes or `clears' a client's trades, when a client opens an account with Rooney Pace, a Rooney Pace representative will request that the client execute a Bear Stearn's standard Customer's Agreement for Cash And/Or Margin Accounts (the `Customer's Agreement'). The client does not execute any further written agreement with Rooney Pace as introducing broker, and the terms of the Customer's Agreement governs [sic] the relationship between Rooney Pace and the client. Rooney Pace has the contact with the client, and Bear Stearns relies on Rooney Pace to supervise the client's account and to ensure compliance with the Customer's Agreement.
".... .... .... .... ....
*1204 "[] Since Bear Stearns was Rooney Pace's clearing broker, it was not necessary for her to execute a new Customer's Agreement when she transferred her account to Rooney Pace. Rooney Pace's records indicate that all transactions in her account at Rooney Pace were cleared by Bear Stearns pursuant to her Customer's Agreement."
Taking a somewhat inconsistent position, Sullivan, the defendant broker, also submitted a declaration in which he was at pains to establish that Van Luven orally agreed the Bear Stearns agreement would "govern" her relationship with Rooney Pace: "I explained to [Van Luven] that Rooney Pace used the same clearing broker (Bear Stearns) as J. David and that accordingly the Bear Stearns' Customer's Agreement that she had signed when her account was with J. David would continue to govern her account with Rooney Pace. She told me that this was acceptable to her."
Van Luven disputed the authenticity of this agreement in the trial court: By the time Rooney Pace petitioned to compel arbitration, however, the original had been destroyed; and only the first and last pages were retained on microfilm. A copy of what Rooney Pace alleged was the balance of the agreement was attached to its moving papers.
Nevertheless, in the trial court Van Luven conceded for the sake of argument that she did sign a standard Bear Stearns agreement in 1983 and attacked the petition on its merits: She had no contract with Rooney Pace to arbitrate; and that entity could not, she countered, avail itself of her agreement with Bear Stearns. Van Luven relied on the agreement itself to support her position and submitted no declaration concerning her understanding of its terms.
The Bear Stearns contract is straightforward, as far as agreements of this sort go; and it is fairly colloquial in form, i.e., the legalese has been kept to a minimum. It begins, "I agree to the following with respect to my account(s) with Bear, Stearns & Co., its successors or assigns for the purchase and sale of securities and commodities." It is apparent from the language in paragraph 6 that a significant purpose of the agreement is to protect the clearing broker from liability for the acts or omissions of the introducing broker: "If you[, i.e., Bear Stearns] are carrying the account of the undersigned as clearing broker by arrangement with another broker through whose courtesy the account of the undersigned has been introduced, then until receipt from the undersigned of written notice to the contrary, you may accept from such other broker, without inquiry or investigation by you, (i) orders for the purchase or sale [] of securities.... It is understood that you shall not be responsible or liable to the undersigned for any acts or omissions of such other broker or its employees." (Italics added.)
*1205 The arbitration clause follows in paragraph 9: "Any controversy arising out of or relating to my cash and/or margin accounts to [sic] transactions with you for me or this agreement or the breach thereof shall be settled by arbitration.... It is understood that this agreement to arbitrate does not constitute a waiver of the right to a judicial forum where such waiver would be void under the securities laws and specifically does not prohibit me from pursuing any claim or claims arising under the federal securities laws in any court of competent jurisdiction."
Finding no "mutual assent to arbitrate as between plaintiff and defendant Rooney, Pace Inc.," the superior court denied the petition. In the statement of decision, the court added, "The agreement itself contains no language from which it could be concluded that plaintiff agreed to arbitrate with anyone other than Bear Stearns...." Finally, citing Ahn v. Rooney, Pace Inc. (S.D.N.Y 1985) 624 F. Supp. 368, the court specifically rejected Rooney Pace's claim that it was a third party beneficiary of the agreement with Bear Stearns.
II
The issue before us is simply stated: May the successor to the introducing broker enforce this particular arbitration agreement between its customer and a clearing broker? Rooney Pace claims federal law so requires. We are not persuaded.
(2) The Federal Arbitration Act (9 U.S.C. § 1 et seq.) applies to all written contracts which contain arbitration provisions and involve interstate commerce. (Cf. Code Civ. Proc., § 1281.2.) The act reflects a liberal federal policy favoring arbitration and, where applicable, preempts California law governing the validity of an arbitration clause. (Perry v. Thomas (1987) 482 U.S. 483 [96 L.Ed.2d 426, 107 S.Ct. 2520]; Tonetti v. Shirley (1985) 173 Cal. App.3d 1144, 1147 [219 Cal. Rptr. 616].)
(1b) With respect to introducing brokers seeking to piggy-back onto clearing brokers' customer agreements, two lines of federal authority have developed. One line is represented by the case the trial court cited, Ahn v. Rooney, Pace Inc., supra, 624 F. Supp. 368. Under facts very similar to ours, the district court rejected the introducing broker's claims that it was either an agent of the clearing broker or a third party beneficiary of the contract between the clearing broker and customer.
On the first point, the judge in Ahn observed, "There has been no evidence that Bear Stearns and defendant Rooney, Pace are anything other than entirely independent entities. Indeed, Bear Stearns has underscored its *1206 separateness from Rooney, Pace by expressly disavowing in its customer agreement any responsibility or liability for the acts of the introducing broker. Because, therefore, the requisite elements both of consent by the principal that the other party act on its behalf, and of retained control by the principal are missing from the Bear Stearns/Rooney, Pace relationship, clearly [] it may not be understood as one of agent and principal." (Id., at p. 371.)
While acknowledging that "small broker[s]" like Rooney Pace "[o]bviously" benefit from the clearing broker arrangement, the court determined there was no evidence that the customer and clearing broker intended, by the act of signing the agreement, to confer a benefit on the introducing broker. (Ibid.) Thus, concluded the court, with no more than an incidental relationship to the bargain, the introducing broker simply had no standing to enforce the arbitration clause. (See also Mowbray v. Moseley, Hallgarten, Estabrook & Weeden. (1st Cir.1986) 795 F.2d 1111.)
Several other courts have permitted introducing brokers to enforce arbitration agreements between customers and clearing brokers, either on the theory that the introducing broker was a disclosed agent of the clearing broker (Okcuoglu v. Hess, Grant & Co. (E.D.Pa. 1984) 580 F. Supp. 749) or a third party beneficiary of the clearing broker's contract (Nesslage v. York Securities, Inc. (8th Cir.1987) 823 F.2d 231). But these cases are distinguishable.[1]
The plaintiff in Okcuoglu was an active margin account customer whose stock was liquidated to meet a margin call. Both the clearing and introducing brokers were involved in the liquidation decision; and the court noted the clearing broker, who the parties conceded had the right to enforce arbitration of the dispute, might yet be brought into the fray as a necessary party. (Okcuoglu v. Hess, Grant & Co., Inc., supra, 580 F. Supp. at p. 751.) Moreover, based on the parties' conduct over a five-year period of option trading, the court determined the introducing broker was an agent of both the customer and the clearing broker.
In Nesslage, the court concluded without any discussion that the introducing brokerage firm "was the disclosed agent of" the clearing broker *1207 whose agreement with the customer included an arbitration provision; and, consequently, the firm and its broker were third party beneficiaries of the clearing house contract. (Nesslage v. York Securities, Inc., supra, 823 F.2d at p. 233.) The court relied on Okcuoglu, although that decision was not grounded on a third party beneficiary theory.
Nesslage also cited Cauble v. Mabon Nugent & Co. (S.D.N.Y. 1984) 594 F. Supp. 985, but Cauble did not even involve a petition to arbitrate. Cauble was a sophisticated commodities and futures investor. In a detailed letter, the introducing broker explained it was not a "clearing member" on the Chicago Board of Trade and all transactions would be executed by a clearing broker who would confirm all trades directly with Cauble. The only customer agreement signed by Cauble was furnished by the clearing broker, and it authorized the broker to liquidate without notice a customer's account in order to satisfy a margin deficit. Over the next several months Cauble communicated every day with the introducing broker and received daily statements of his transactions from the clearing broker. When Cauble failed to timely satisfy a shortfall in his margin account, the introducing broker ordered the sale of all his property in its possession.
Cauble sued; and the introducing broker moved for summary judgment, claiming to be a third party beneficiary of the liquidation provision in the clearing broker's agreement. Based on the undisputed understanding of the parties when the account was opened and the manner in which the parties dealt with one another, the federal district court agreed the introducing broker was intended by the parties to be a beneficiary of the clearing broker's agreement and was thus entitled to enforce the liquidation agreement.
These facts stand in stark contrast to Van Luven's situation; and, in our view, the results in Nesslage, Okcuoglu, and Cauble were never intended to apply to cases like this one. Van Luven has not been characterized as a sophisticated investor and did not operate a margin or option account. There is no evidence she ever had any contact with Bear Stearns. She merely had a cash account where the introducing broker was given the authority to make transactions without her approval.
Moreover, the literal language of the present agreement amply demonstrates it was only intended to govern the relationship between Bear Stearns and Van Luven; it hardly could have alerted Van Luven to anticipate otherwise. And there was no evidence that the relationship between Bear Stearns and Rooney Pace was other than one between two completely independent entities. Accordingly, under these circumstances, we conclude that an introducing broker who fails to obtain its own written customer agreement cannot enforce that of a broker operating in a completely *1208 different capacity who does especially where, as here, the introducing broker's relationship with the plaintiff did not even exist at the time the agreement was executed.[2]
Judgment affirmed. Respondent is entitled to costs on appeal.
Wallin, Acting P.J., and Taylor, J.,[*] concurred.
NOTES
[1] This matter does contain one additional feature not present in any case we have examined: Here the introducing broker seeking to enforce the clearing broker's arbitration agreement is the successor to the broker who actually handled the account when the customer signed the contract. Thus, Rooney Pace is twice removed from this agreement and arguably for that reason alone could not prevail under the second line of authority, Van Luven's alleged oral acquiescence to keep the same agreement in effect notwithstanding. The Federal Arbitration Act does not apply to oral agreements to arbitrate. (9 U.S.C. § 2.)
[2] Upon a showing of third party beneficiary status, agency relationship, broader language in the arbitration clause, or some other appropriate evidence, an introducing broker might be able to enforce an arbitration agreement between a customer and clearing broker, we suppose. None of these features is present here.
[*] Assigned by the Chairperson of the Judicial Council.
| {
"pile_set_name": "FreeLaw"
} |
404 F.Supp. 450 (1975)
Bulah (Oliver) HARLEY, Individually, and Bobby Allen Oliver, a minor, by Bulah (Oliver) Harley, his guardian, custodial parent and next friend, Plaintiffs,
v.
Thomas Edward OLIVER et al., Defendants.
No. FS-72-22-C.
United States District Court, W. D. Arkansas, Fort Smith Division.
October 29, 1975.
*451 Willard Crane Smith, Jr., Ft. Smith, Ark., Kenneth S. Jacobs, Villa Park, Ill., Billy E. Moore, Columbus, Ga., George H. Hartman, New York City, Thomas B. Taylor, Jr., Conroe, Tex., for plaintiffs.
Robert T. Dawson, J. H. Evans, Ft. Smith, Ark., for defendants.
OPINION
JOHN E. MILLER, Senior District Judge.
Plaintiffs' complaint was filed February 15, 1975, in which they prayed:
"(a) For a temporary Writ of Injunction to restrain the defendants, Thomas Edward Oliver, Van B. Taylor, Judge, and Jeptha A. Evans, and each of them jointly and severally from furtherance of the acts hereinabove complained of and mandating their restoration of Bobby Allen Oliver to the custody and medical care and supervision of his mother, Bulah (Oliver) Harley;
"(b) That upon full and final hearing, said Writ of Injunction be made permanent;
"(c) For actual and compensatory damages in the sum of One Million and No/100ths ($1,000,000.00) dollars;
"(d) For punitive damages in the amount of Five Million and No/100ths ($5,000,000.00) dollars."
Hearing on the motion of plaintiffs was held February 19, 1975. Plaintiffs appeared in person and by attorneys, Willard Crane Smith, Jr., of Fort Smith, Arkansas, Kenneth S. Jacobs, Villa Park, Illinois, Billy E. Moore, Columbus, Georgia, and George H. Hartman, New York, N. Y. Defendants appeared by Robert T. Dawson, Bradley D. Jesson, and J. H. Evans, all of Fort Smith, Arkansas. On February 20, 1975, the court entered an order in which it stated:
"Upon a consideration of all the evidence that was introduced and the pleadings before this court, the court was and is of the opinion that a temporary injunction should not be granted and that the parties should appear before the Probate Court for further consideration by that court as to any provision relative to the selection of a physician to perform a proposed operation upon the ward, Bobby Allen Oliver, before proceeding to a trial upon the merits; that further hearing upon the complaint of plaintiffs should be postponed; and the hearing on the complaint be continued until the further orders of the court.
"IT IS THEREFORE ORDERED AND ADJUDGED that the motion and prayer of plaintiffs for issuance of a temporary injunction is denied, and the case is continued for hearing upon the allegations of the complaint."
Notice of appeal was filed by plaintiffs on the same day the order was entered.
On September 24, 1975, the Court of Appeals for the Eighth Circuit in a per *452 curiam opinion (not published) dismissed the appeal as moot. In its opinion the court said:
"On February 20, 1975, the federal district court denied the temporary injunction after a hearing, and ordered the parties to reappear before the State Probate Court for further `consideration by that court as to any provision relative to the selection of a physician to perform a proposed operation' on the child. The same day, the State Probate Court entered a consent decree directing the parties to take the child to Carl Nelson, M. D., `to undergo necessary surgery for removal of a cyst....' Thereafter the plaintiff appealed the federal district court's denial of the temporary injunction. Defendants have moved to dismiss this appeal on the ground of mootness.
"It appears from the record that the child was returned to its mother and lawful guardian on February 19, 1975, the date of the hearing in the district court. There no longer exists any medical emergency. It is well settled when a court's order cannot provide any further relief to the parties, the case is moot. There is no showing here that the conduct complained of is likely to be repeated. Furthermore, it would be highly improper for us to assume that similar circumstances would develop again without adequate consideration by the State Probate Court.
"The appeal is ordered dismissed as moot."
The mandate dismissing the appeal was filed October 17, 1975.
The defendants were of the opinion that the appeal would not be perfected and proceeded to file motions to dismiss the complaint.
Because of the filing of the notice of appeal, the court delayed the consideration of the motions of defendants to dismiss.[1]
On March 21, 1975, defendant Van B. Taylor filed and duly served his motion to dismiss and brief in support thereof. On April 21, 1975, plaintiffs filed and duly served their brief in opposition to the motion. The movant is a Judge of the 14th Chancery Circuit of Arkansas. He lives at Dardanelle, the County seat of Yell County. The District comprises the Counties of Logan, Perry, Scott and Yell.
Under the law of Arkansas the Chancellor is also the Probate Judge in each county in his circuit, and operates independently. Lewis v. Smith, 198 Ark. 244, 129 S.W.2d 229; Davie v. Smoot, 202 Ark. 294, 150 S.W.2d 50; Constitutional Amendment 24.
Ark.Stat.Ann., § 57-604 (1971 Repl.), provides:
"The jurisdiction of the Probate Court over all matters of guardianship, other than guardianships ad litem in other courts, shall be exclusive, subject to the right of appeal."
On March 24, 1975, defendants Thomas Edward Oliver and Jeptha A. Evans filed and duly served their motion to dismiss and brief in support thereof. On April 25, 1975, Patrick J. Leston, one of the attorneys for plaintiffs, served brief in opposition to the motion.
Thomas Edward Oliver is a citizen and resident of Arkansas and resides in the City of Booneville, Logan County, Arkansas. He is the former husband of the plaintiff Bulah (Oliver) Harley and the father of Bobby Allen Oliver.
Jeptha A. Evans is a citizen and resident of Arkansas and resides in the City *453 of Booneville where he is engaged in the practice of law.
On May 15, 1975, while the appeal was pending, the plaintiffs filed their motion for change of venue and for the disqualification of the present judge. On May 20, 1975, the court filed its opinion overruling and denying the motion, 400 F. Supp. 105.
JURISDICTION
The Court of Appeals in its consideration of the plaintiffs' appeal said:
"We need not pass on whether the district court had jurisdiction of the subject matter in view of our holding that the case is moot."
In paragraph 1 of the complaint the plaintiffs alleged that this is a suit "for a temporary writ of injunction, a permanent writ of injunction, and damages authorized by U.S.C. Title 42, Sec. 1983, to restrain and prevent and to provide redress for the deprivation under color of state law of the rights secured to the plaintiffs by the First, Fifth and Fourteenth Amendments to the Constitution of the United States."
In Section 3 of the complaint it is alleged that jurisdiction is conferred upon this court by 28 U.S.C.A., § 1343(3, 4) and 42 U.S.C.A, § 1988.
In Williams v. Yellow Cab Co. of Pittsburg, Pa. (3 Cir. 1952), 200 F.2d 302 at page 307, the court said:
"The second basis upon which jurisdiction is claimed is Section 1343 of Title 28, United States Code, commonly known as the Civil Rights Act, the relevant portion of which is set out in a note. The Civil Rights Act was originally enacted to enforce the Fourteenth Amendment. It has long been settled that the Fourteenth Amendment is directed only to state action and that the invasion by individuals of the rights of other individuals is not within its purview. It necessarily follows that the jurisdiction conferred upon the federal district courts by Section 1343 is similarly limited and that redress for the invasion by an individual of the civil rights of another must be sought in the state courts, unless, of course, diversity of citizenship is present."
See, also, Love v. Chandler (8 Cir. 1942), 124 F.2d 785; United States v. Williams (1951), 341 U.S. 70, 71 S.Ct. 581, 95 L.Ed. 758.
As to the contention that 42 U.S.C.A. § 1988 conferred jurisdiction, the court in Moor v. County of Alameda (1972), 411 U.S. 693, 93 S.Ct. 1785, 36 L.Ed.2d 596, said:
"Section 1988, as is clear from its legislative history, does not independently create a federal cause of action for the violation of federal civil rights."
The Civil Rights Acts do not in themselves confer complete and full jurisdiction upon the district courts. In order to maintain a suit in the district courts under the Civil Rights Acts there must be alleged and proven an invasion by an individual of the civil rights of another as defined and provided by the various statutes claimed to have been violated.
All of the parties, plaintiffs and defendants, are now and were at time suit was commenced citizens of the United States and reside in the State of Arkansas.
The court is of the opinion that it is without jurisdiction of the allegations contained in the complaint. In view of this conclusion it appears unnecessary to further consider the case or to act upon the motions of defendants to dismiss heretofore mentioned, and an order dismissing the case for lack of jurisdiction would ordinarily be entered. However, if it should be held on another appeal that the judgment of the Court of Appeals of September 24, 1975, did not dispose of the claims of plaintiffs for damages, it would be necessary to consider the motions of defendants to dismiss, along with other reasons for dismissal, and the court now proceeds to determine such matters.
*454 MOTIONS TO DISMISS
In paragraph 25 of the complaint the plaintiffs allege that the defendants "maliciously conspired to remove the minor from the custody and supervision of Bulah (Oliver) Harley and from the medical treatment to be scheduled for performance by Dr. Carl L. Nelson, Little Rock, Arkansas, for the purpose of treating the minor child by means of surgery with attendant blood transfusions which the conspiring parties knew violated the religious beliefs of the plaintiffs."
The Probate Court of Logan County presided over by Judge Van B. Taylor had subject-matter jurisdiction over all matters pertaining to guardianship. Ark.Stat.Ann., § 57-604 (1971 Repl.). The law is well settled that the rule of judicial immunity from liability for determinations and acts in a judicial capacity may not be avoided by pleading that the acts complained of resulted from a conspiracy previously entered into. 46 Am.Jur.2d, Judges, § 80, p. 150; Pierson v. Ray (1967), 386 U.S. 547, 553-54, 87 S.Ct. 1213, 18 L.Ed.2d 288; Hoope v. Klapperich (1947), 224 Minn. 224, 28 N.W.2d 780, 173 A.L.R. 819; Meyer v. Navelle (E.D.Pa.1975), 389 F.Supp. 972; Classic Distributors, Inc. v. Zimmerman (M.D.Pa.1974), 387 F.Supp. 829.
In Guedry v. Ford (5 Cir. 1970), 431 F.2d 660, the court said:
"At common law, judges are protected from civil liability for judicial actions done under color of office if they have jurisdiction, even if the acts are done under authority of unconstitutional statutes. This immunity applies in actions for damages brought under Title 42 U.S.C. § 1983, as in this case.
"Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967)
Beard v. Stephens, 372 F.2d 685 (5th CCA 1967)
Franklin v. Meredith, 386 F.2d 958 (10th CCA 1967)
Carmack v. Gibson, 363 F.2d 862 (5th CCA 1966)
"A prosecuting attorney when acting in his official capacity is protected by the same immunity in civil cases that is applicable to judges, provided that his acts are within the scope of his jurisdiction and by authorization of law.
"Madison v. Purdy, 410 F.2d 99 (5th CCA 1969)
Carmack v. Gibson, supra
Lewis v. Brautigam, 227 F.2d 124 (5th CCA 1955)
Peek v. Mitchell, 419 F.2d 575 (6th CCA 1970)
Bauers v. Heisel, 361 F.2d 581 (3rd CCA 1966), Cert. den. 386 U.S. 1021, 87 S.Ct. 1367, 18 L.Ed.2d 457 (1967)
Friedman v. Younger, 282 F.Supp. 710 (C.D.Cal.1968)
Cf. Peterson v. Stanczak, 48 F.R.D. 426 (N.D.Ill.1969)
"At no time did the defendants Ford and Dufreche act other than in their capacity as City Judge and Assistant District Attorney, respectively. Accordingly, both are entitled to the protection of judicial immunity that is afforded judicial officers acting in the scope of their jurisdiction.
"A private person cannot be held liable under Title 42 U.S.C. § 1983 unless his wrongful action was done under color of state law or state authority. Further, a private person alleged to have conspired with a state judge and prosecuting attorney who are entitled to immunity, cannot be held liable, since he is not conspiring with persons acting under color of law `against whom [plaintiff] could state a valid claim' under 42 U.S.C. § 1983.
"Haldane v. Chagnon, 345 F.2d 601, 604 (9th CCA 1965)
Shakespeare v. Wilson, 40 F.R.D. 500, 505 (S.D.Cal.1966)
Stambler v. Dillon, 302 F.Supp. 1250 (S.D.N.Y.1969)
*455 Jemzura v. Belden, 281 F.Supp. 200, 206 (N.D.N.Y.1968)
Cf. Hall v. Garson (5 CCA 1970) 430 F.2d 430, at 439 [1970]
"Assuming all the well pleaded facts in the complaint to be true and viewing the allegations of the complaint in the light most favorable to the plaintiff, it appears beyond doubt that he can prove no set of facts in support of his claim upon which relief can be granted. Plaintiff's allegations that a conspiracy existed between all the captioned defendants is conclusionary in nature and unsupported by any pleaded facts and hence insufficient to constitute a basis for relief.
"Accordingly, the court finds that there is no genuine issue of material fact and that the defendants are entitled to a judgment as a matter of law, dismissing the plaintiff's complaint against them."
There are two important areas, domestic relations cases and probate matters, where, by a judge-made exception to the statute, the federal courts will not act though diversity is present. The exceptions are rationally justified on the ground that these are two areas of the law in which the states have an especially strong interest and a well-developed competence for dealing with them. In other words, the federal courts refuse to hear child custody cases, in line with the sweeping statement of the Supreme Court that, "The whole subject to the domestic relations of husband and wife, parent and child, belongs to the laws of the state and not to the laws of the United States. Ex parte Burrus, 1890, 10 S.Ct. 850, 853, 136 U.S. 586, 593-94, 34 L.Ed. 500." Wright, Law of Federal Courts, 2d Ed., § 25, p. 83; Bassler v. Arrowood (8 Cir. 1974), 500 F.2d 138.
In Magaziner v. Montemuro (3 Cir. 1972), 468 F.2d 782 the court said:
"Tradionally, it has been the policy of federal courts to avoid assumption of jurisdiction in this species of litigation. `The whole subject of the domestic relations of husband and wife, parent and child, belongs to the laws of the states and not to the laws of the United States.'
* * * * * *
"`As a matter of policy and comity, [child support cases are] local problems [which] should be decided in state courts. Domestic relations is a field peculiarly suited to state regulation and control, and peculiarly unsuited to control by federal courts.' Buechold v. Ortiz, 401 F.2d 371, 373 (9th Cir. 1968)."
As to the motion of Thomas Edward Oliver and Jeptha A. Evans, the court is of the opinion that both are immune from liability. Certainly the only thing that Evans did was to represent Mr. Thomas Edward Oliver, and there is nothing to show that he, Oliver, the father of the boy, did anything to impose liability upon him. He was merely trying to see that his son received proper medical attention. Rhodes v. Meyer (D.Neb.1963), 225 F.Supp. 80, aff'd (8 Cir.), 334 F.2d 709; Rhodes v. Van Steenberg (D.Neb.1963), 225 F. Supp. 113; Rhodes v. Houston (D.Neb. 1962), 202 F.Supp. 624, aff'd by per curiam opinion (8 Cir.), 309 F.2d 959; Timson v. Weiner (S.D.Ohio 1975), 395 F.Supp. 1344; Hazo v. Geltz (W.D.Pa. 1975), 395 F.Supp. 1331; Smith v. Petersen (8 Cir. 1975), 521 F.2d 1404; Dear v. Rathje (N.D.Ill.1975), 391 F. Supp. 1; State of Louisiana v. Ciolino (E.D.La.1975), 393 F.Supp. 102.
In Watts v. McGowan (3 Cir. 1975), 516 F.2d 203, at page 205, the court said:
"In Hill v. McClellan, 490 F.2d 859, 860 (5th Cir. 1974), the court pointed out that `a private person alleged to have conspired with a state judge and attorney who are entitled to immunity cannot be held liable, since he is not conspiring with persons acting under color of law against whom a valid claim could be stated. [Citing cases.]' See also French v. Corrigan, 432 *456 F.2d 1211, 1214 (7th Cir. 1970); McIntosh v. Garofalo, 367 F.Supp. 501, 504-05 (W.D.Pa.1973)."
None of the defendants acted "under color of any statute" or deprived plaintiffs "of any rights, privileges, or immunities secured by the constitution and laws."
There are many other reasons why plaintiffs cannot recover damages from any of the defendants. They alleged in section 13 of the complaint that they "are of the religious faith of Jehovah's Witnesses and are opposed to the administration of blood transfusions on both religious and medical grounds."
A parent or guardian of a minor has no legal right to deny proper medical treatment or treatment recommended by the medical profession for any disease of a minor, even though such treatment is contrary to a religious belief of the parent or guardian. Jehovah's Witnesses in State of Washington v. King County Hospital No. 1 (N.D.Wash. 1967), 278 F.Supp. 488; Winters v. Miller, M. D. (E.D.N.Y.1969), 306 F. Supp. 1158; In re Application of President and Directors of Georgetown College, Inc., (1964) 118 U.S.App.D.C. 80, 331 F.2d 1000.
The Jehovah's Witnesses case, 278 F. Supp. 488, was affirmed by the Supreme Court of the United States in 1968, 390 U.S. 598, 88 S.Ct. 1260, 20 L.Ed.2d 158; see, also, Prince v. Massachusetts, 321 U.S. 158, 64 S.Ct. 438, 88 L.Ed. 645.
In Cude v. State (1964), 237 Ark. 927, at pages 932-933, 377 S.W.2d 816 at page 819, the court said:
"The U. S. Supreme Court said in Prince v. Commonwealth of Massachusetts, 321 U.S. 158, 64 S.Ct. 438, 88 L.Ed. 645: `The right to practice religion freely does not include liberty to expose the community or the child to communicable disease or the latter to ill health or death. * * * Parents may be free to become martyrs themselves. But it does not follow they are free, in identical circumstances to make martyrs of their children before they have reached the age of full and legal discretion when they can make that choice for themselves.'
* * * * * *
"In cases too numerous to mention, it has been held, in effect, that a person's right to exhibit religious freedom ceases where it overlaps and transgresses the rights of others. We cite a few cases upholding the validity of statutes requiring vaccination, and affirming orders of courts authorizing blood transfusions, etc. In Re Whitmore, Dom.Rel.Ct., 47 N.Y.S.2d 143; vaccination of school child. Sadlock v. Board of Education, 137 N.J.L. 85, 58 A.2d 218; vaccination of school child. State v. Perricone, 37 N.J. 463, 181 A.2d 751; giving blood transfusion to infant. City of New Braunfels v. Waldschmidt, 109 Tex. 302, 207 S.W. 303; vaccination of school child. Mosier v. Barren County Board of Health, 308 Ky. 829, 215 S.W.2d 967; vaccination of school child; Board of Education of Mountain Lakes v. Maas, 56 N.J.Super. 245, 152 A.2d 394; vaccination of school child. In Re Clark, Ohio Com.Pl., 185 N.E.2d 128; blood transfusion for three year old child."
The courts have drawn distinction between the free exercise of religious belief which is constitutionally protected against any infringement and religious practices that are inimical or detrimental to public health or welfare.
In the case of In re Sampson, 65 Misc.2d 658, 317 N.Y.S.2d 641 (1970), the question involved herein was fully discussed. Beginning on page 651 the court said:
"To a layman unversed in the seemingly esoteric art of theological interpretation of the 17th century English version of ancient Hebrew and Greek Scriptures, these passages are, to say the least, somewhat obscure. They have to do with blood and the eating or taking thereof. Blood transfusion as administered by modern medicine *457 was unknown to the authors of these cryptic dicta. Had its beneficient effects been known to them, it is not unlikely some exception would have been made in its favor especially by St. Luke who is said to have been a physician.
"`But in our humble Civil Court we must confine ourselves to the civil law of the State. Religious doctrines and dogmas, be they obviously sound or curiously dubious, may not control. The parents in this case have a perfect right to worship as they please and believe what they please. They enjoy complete freedom of religion. The parents also have the right to use all lawful means to vindicate this right * * *.
"`But this right of theirs ends where somebody else's right begins. Their child is a human being in his own right, with a soul and body of his own. He has rights of his own the right to live and grow up without disfigurement (emphasis supplied).
"`The child is a citizen of the State. While he "belongs" to his parents, he belongs also to his State. Their rights in him entail many duties. Likewise the fact the child belongs to the State imposes upon the State many duties. Chief among them is the duty to protect his right to live and to grow up with a sound mind in a sound body, and to brook no interference with that right by any person or organization (emphasis supplied).
"`When a religious doctrine espoused by the parents threatens to defeat or curtail such a right of their child, the State's duty to step in and preserve the child's right is immediately operative.
"`To put it another way, when a child's right to live and his parents' religious belief collide, the former is paramount, and the religious doctrine must give way.'"
CONCLUSION
Under the allegations of plaintiffs' complaint, the facts disclosed by the record and the order of the United States Court of Appeals for the Eighth Circuit of September 24, 1975, the plaintiffs are not entitled to an injunction or to recover of and from the defendants on any one of the damages and judgment is being entered today, sustaining each of the motions of defendants and dismissing the complaint and adjudging all costs against plaintiffs.
NOTES
[1] Following the opinion of the Court of Appeals of September 24, the court contacted Willard Crane Smith, Jr., the local attorney for the plaintiffs, and asked him whether plaintiffs expected to take any further action in the case. He stated that he did not know but that he would contact the other attorneys and advise the court. On the next day, September 26, the court by letter addressed to the nonresident attorneys for plaintiffs requested that they advise the court "as soon as may reasonably be done, within a week or ten days, whether they desire any further action in the case." No reply of any kind has been received.
| {
"pile_set_name": "FreeLaw"
} |
927 F.2d 614
U.S.v.Montano**
NO. 90-8587
United States Court of Appeals,Eleventh Circuit.
FEB 12, 1991
1
Appeal From: S.D.Ga.
2
AFFIRMED.
**
Local Rule 36 case
| {
"pile_set_name": "FreeLaw"
} |
866 F.2d 1421
U.S.v.Stanley***
NO. 88-3580
United States Court of Appeals,Eleventh Circuit.
JAN 11, 1989
1
Appeal From: N.D.Fla.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 23
**
Local Rule: 36 case
| {
"pile_set_name": "FreeLaw"
} |
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NARANJIBHAI PATEL; RAMILABEN No. 08-56567
PATEL,
Plaintiffs-Appellants, D.C. No.
2:05-cv-01571-
v. DSF-AJW
CITY OF LOS ANGELES, a municipal
corporation, ORDER
Defendant-Appellee.
Filed February 13, 2013
ORDER
KOZINSKI, Chief Judge:
Upon the vote of a majority of nonrecused active judges,
it is ordered that this case be reheard en banc pursuant to
Federal Rule of Appellate Procedure 35(a) and Circuit Rule
35–3. The three-judge panel opinion shall not be cited as
precedent by or to any court of the Ninth Circuit.
| {
"pile_set_name": "FreeLaw"
} |
869 F.2d 589
Herzig (Adam H., Anne H.)v.Aetna Casualty & Surety Company
NO. 88-1656
United States Court of Appeals,Third Circuit.
JAN 20, 1989
Appeal From: E.D.Pa.,
Green, J.,
693 F.Supp. 306
1
AFFIRMED.
| {
"pile_set_name": "FreeLaw"
} |
496 F.Supp. 632 (1980)
Booker T. HILLERY, Jr., Petitioner,
v.
George SUMNER, Warden, California State Prison, San Quentin, California, Respondent.
No. CIVIL S-78-594 LKK.
United States District Court, E. D. California.
August 7, 1980.
*633 E. Richard Walker, Federal Defender, Arthur W. Ruthenbeck, Chief Asst. Federal Defender, Sacramento, Cal., for petitioner.
George Deukmejian, Atty. Gen., Wm. George Prahl, Deputy Atty. Gen., Sacramento, Cal., for respondent.
MEMORANDUM AND ORDER
KARLTON, District Judge.
Respondent filed three motions: to dismiss, for reconsideration of my order of March 27, 1980, and for a stay of responses to interrogatories. A brief examination of *634 the procedural history of the case aids in placing the current motions in perspective.
Petitioner, a state prison inmate, filed his application for a writ of habeas corpus in 1978, challenging the constitutionality of his 1962 Kings County, California, Superior Court conviction for murder. He alleges that he is Black and that he was denied equal protection of the laws because Blacks were systematically excluded from the grand jury which indicted him. On January 31, 1979, the Honorable Thomas J. MacBride determined that petitioner had established a prima facie case of discriminatory selection and directed the respondent to show cause why a writ of habeas corpus should not issue on that ground.
In his return to the Order to Show Cause, respondent argued that because the state had provided petitioner with an opportunity to fully and fairly litigate his claim of racial discrimination in a state court, federal habeas review was not available. Alternately he argued that if such review was appropriate, the record reflected that there was no racial discrimination in the selection of the grand jury. Petitioner's traverse took issue with respondent's arguments.
On March 27, 1980, I filed an order which altered the posture of the case. In relevant part that order directed the parties to expand the record of the case by filing certain documentary material which I requested, propounded interrogatories to the parties, and vacated that part of the Order to Show Cause which had found that petitioner had established a prima facie case. In all other respects, however, the Order to Show Cause of January 31, 1979, remained in effect.
I
MOTION TO DISMISS
Respondent's present motion to dismiss, citing Rule 9,[1] is based on the delay between the California Supreme Court's affirmance of the guilt phase of petitioner's conviction (see People v. Hillery (1965) 62 Cal.2d 692, 44 Cal.Rptr. 30, 401 P.2d 382), and the filing of the application for habeas relief in 1978.
The Rule provides:
A motion for relief made pursuant to these rules may be dismissed if it appears that the government has been prejudiced in its ability to respond to the motion by delay in filing unless the movant shows that it is based on grounds of which he could not have had knowledge by the exercise of reasonable diligence before the circumstances prejudicial to the government occurred.
By its terms, Rule 9 does not provide a procedure for raising the issue of prejudicial delay. In his Points and Authorities in support of the motion, respondent likewise failed to suggest any procedural basis for his motion. Since the scope of material to be reviewed by the court in resolving the motion may turn on the procedural nature of the motion, this failure is significant.
Petitioner, on the other hand, using a procedural analysis, has argued that respondent has waived the Rule 9 defense. Looking to Rule 11 which allows a district court to proceed in any lawful manner and to apply the Federal Rules of Civil or Criminal Procedure, petitioner responded to the motion by contending that a Rule 9 motion is analogous to an affirmative defense which may be raised in a motion to dismiss under F.R.Civ.P. 12(b). Petitioner then argued that under F.R.Civ.P. 12, respondent's failure to raise the defense in the return to the Order to Show Cause or in a motion filed before the return constituted a waiver of the defense.
Not surprisingly, at the hearing respondent disputed petitioner's waiver analysis. Upon my inquiry at oral argument, respondent characterized his motion as sui generis to habeas corpus proceedings and thus not analogous to Rule 12(b) at all. Moreover, he maintained no waiver had occurred since the necessity for filing the Rule 9 motion *635 did not become apparent until I issued my order of March 27, 1980, requiring expansion of the record. When the original return was filed, respondent reasons, the only evidence before the court on the jury discrimination claim was the record of the state court proceedings. He contends, however, that the court order augmenting the record resulted in prejudice to the state because a crucial witness is dead and thus cannot be the source of information to counter expected evidence produced pursuant to the order expanding the record. Under these circumstances, according to respondent, there is no waiver, since at the time of filing the return there was no prejudice and thus no Rule 9 objection to be raised. For the reasons set forth below, I now determine that respondent's motion to dismiss must be denied since it was brought in neither a timely nor an appropriate fashion.
Essentially, respondent's argument is one of "surprise," i. e., he could not reasonably anticipate that he would be required to meet evidence outside the state court record. Such an argument cannot prevail, for there could be no surprise. The power of inquiry on federal habeas corpus is plenary. Townsend v. Sain (1963) 372 U.S. 293, 312, 83 S.Ct. 745, 756, 9 L.Ed.2d 770. Although the state court records are generally all that is before the court at the time the return is filed (see Rule 6(b)), the court's consideration of the alleged constitutional violation is not confined to the state court record; the court's power to take evidence relevant to an allegedly unconstitutional detention has been repeatedly upheld. Id. at 311, 83 S.Ct. at 756; U. S. ex rel. Barksdale v. Blackburn (5th Cir. 1980) 610 F.2d 253, 259. If, as petitioner alleges, he did not receive a full and fair evidentiary hearing in the state court, a hearing in this court is mandated (Id. at 312; 28 U.S.C. § 2254(d)); moreover, in other cases it is within the court's discretion to take evidence bearing upon the applicant's claim. Townsend v. Sain, supra, 372 U.S. at 318, 83 S.Ct. at 759. Thus, the possibility of prejudice (as the respondent defines it) is inherent in the very nature of habeas corpus review. That is to say, the state could not reasonably believe that in assessing the effect of delay upon its ability to defend there was no possibility of going beyond the state court record. Accordingly, I cannot agree with respondent's contention that pleading a Rule 9 defense in the return was unnecessary.
Given the fact that respondent's rationalization of his failure to raise a Rule 9 defense in his return is of no avail, I must now assess the effect of that failure. Rule 9 is based on the equitable doctrine of laches (see Paprskar v. Estelle (5th Cir. 1980) 612 F.2d 1003, 1007; Baxter v. Estelle (5th Cir. 1980) 614 F.2d 1030, 1033-1034; D. Dobbs, Remedies, pp. 43-44 (1973)). As I have noted, the rules provide that when no procedure is specified, recourse may be had to the Federal Rules of Civil or Criminal Procedure. See Rule 11. Inasmuch as the criminal rules do not require a written pleading by a defendant, it would appear appropriate to look to the civil rules to determine what must be contained in a return to an Order to Show Cause in habeas.
F.R.Civ.P. 8(c) classifies laches as an affirmative defense, to be set forth "in a pleading to a preceding pleading. . . ." Several courts have held that a failure to plead laches in the answer constitutes a waiver of the defense. Topping v. Fry (7th Cir. 1945) 147 F.2d 715, 718; United States v. A-1 Meat Company, 146 F.Supp. 590, 591, aff'd, 255 F.2d 491 (2nd Cir. 1958); Overseas Motors, Inc. v. Import Motors Limited, Inc. (E.D.Mich.1974) 375 F.Supp. 499, 512, aff'd, (6th Cir. 1975) 519 F.2d 119, cert. denied, 423 U.S. 987, 96 S.Ct. 395, 46 L.Ed.2d 304 (1975). Accordingly, respondent should have pled laches or Rule 9 in his return to the Order to Show Cause. In addition, although the habeas cases focusing on laches and on Rule 9 do not discuss the matter, many implicitly support the idea that laches is properly a matter of defense, for they discuss the question in the course of rendering a decision following an evidentiary hearing, at which evidence on laches *636 presumably was offered. See, e. g., Baxter v. Estelle (5th Cir. 1980) 614 F.2d 1030; United States ex rel. Barksdale v. Blackburn (5th Cir. 1980) 610 F.2d 253; Hudson v. State of Alabama (5th Cir. 1974) 493 F.2d 171; Dean v. State of North Carolina (M.D. N.C.1967) 269 F.Supp. 986. Thus, it would appear proper to treat the Rule 9 problem as a matter of affirmative defense, which should have been pled in the return. The failure to so plead precludes the motion now.[2] See F.R.Civ.P. 8, 5 Wright & Miller, Federal Practice and Procedure § 1278.
Moreover, assuming that respondent has not waived a Rule 9 defense, his motion must nonetheless be denied since however it is characterized, it is insufficient.
One way of viewing the motion is, as petitioner suggests, as a motion to dismiss under F.R.Civ.P. 12(b). See State of Ohio v. Peterson, Lowry, Rall, Etc., (10th Cir. 1978) 585 F.2d 454; Miller v. Shell Oil Co. (10th Cir. 1965) 345 F.2d 891, 893; Overseas Motors, Inc. v. Import Motors Limited, Inc., supra; Russel v. Thomas (S.D.Cal.1955) 129 F.Supp. 605; Wright and Miller, Federal Practice and Procedure, Civil § 1277.
If the motion is treated as a 12(b) motion, however, it must be denied, since such a motion can only be brought before an answer is filed unless it raises specially enumerated defenses not applicable here. See F.R.Civ.P. 12(h) and 12(b); Wright and Miller, Federal Practice and Procedure, Civil § 1361.
Alternatively, the motion can be deemed to be a Motion for Judgment on the Pleadings. See Warner Co. v. Brann & Stuart Co. (E.D.Pa.1961) 198 F.Supp. 634; F.R.Civ.P. 12(c); Wright and Miller, Federal Practice and Procedure, Civil § 1361. Such a characterization also avails the petitioner nothing, for here again the motion must be denied. As the name implies, the matters to be considered on such a motion are the pleadings only in this case, the application, the return and the traverse. When so considered, vital factual issues such as prejudice cannot be resolved.
As I discuss below in relation to respondent's characterization of his motion, laches raises factual issues which ordinarily, and in this case, cannot be resolved on the pleadings. Because the result of characterizing respondent's motion as one for summary judgment is indistinguishable from characterizing a Rule 9 motion as sui generis, I now turn to that characterization.
If we accept Rule 9 as sui generis to habeas corpus proceedings and thus assume that it may be raised by motion in the first instance, the next question is the scope of such a motion. Because laches for habeas corpus purposes is ultimately a complex factual issue, it appears clear that it must be a speaking motion. That is, as shown infra, the moving party must show not merely the passage of time (perhaps discernable from the pleadings) but prejudice in fact, and that the delay was attributable to the opposing party. This the respondent has not done.[3]
Under Rule 9 a respondent must make a particularized showing of prejudice, for delay alone will not justify the denial of habeas corpus relief. Paprskar v. Estelle, supra at 1008; United States ex rel. Barksdale v. Blackburn, supra at 260. See also Advisory Committee Notes, § 2254 Cases, which provide that a court must engage in a case-by-case analysis of the nature and extent of prejudice to the respondent caused by petitioner's delay. Thus, a Rule 9 motion raises issues that ordinarily could not be resolved on the pleadings but rather must be supported by a factual showing. Respondent *637 presented his motion solely on the pleadings; it was not supported by any evidentiary matter upon which the court could determine the nature and extent of the prejudice which respondent contends flowed from petitioner's delay.
The only factual matters as to prejudice were presented at oral argument. There the parties stipulated that Judge Wingrove, the state court judge who selected the grand jury which indicted petitioner, died in 1966. As noted above, respondent argues that the state's ability to respond has been prejudiced by the death of this witness. As I have explained, however, this alone is not sufficient to support dismissal.
Under Rule 9, dismissal is proper only when the prejudice suffered is attributable to petitioner's delay in filing. Davis v. Adult Parole Authority (6th Cir. 1979) 610 F.2d 410, 414. Assuming, arguendo, that the loss of Judge Wingrove's testimony would be sufficient prejudice to the state to support dismissal, a question which I do not decide, dismissal would nonetheless be appropriate only if the judge's testimony could have been secured had petitioner filed his federal writ earlier. Id.; Rule 9. As will be shown below, the history of petitioner's state proceeding makes it extremely unlikely that he could have properly filed his federal action before Judge Wingrove's death.
Although the California Supreme Court affirmed the guilt phase of petitioner's conviction in 1965, it reversed the death penalty imposed and remanded to the trial court for further proceedings. People v. Hillery, supra at 713, 44 Cal.Rptr. 30, 401 P.2d 382. The appeal from the second penalty trial was not completed until 1967. People v. Hillery (1967) 65 Cal.2d 795, 56 Cal.Rptr. 280, 423 P.2d 208, cert. denied, 389 U.S. 986, 88 S.Ct. 486, 19 L.Ed.2d 496 (1968). In 1969, by writ, petitioner was successful in securing the reversal of the second penalty trial because of Witherspoon error. In re Hillery (1969) 71 Cal.2d 857, 79 Cal.Rptr. 733, 457 P.2d 565. At his third penalty trial, petitioner once again received the death penalty. In 1974, on automatic appeal to the California Supreme Court, the Court modified the penalty to life imprisonment. People v. Hillery (1974) 10 Cal.3d 897, 112 Cal.Rptr. 524, 519 P.2d 572. This protracted litigation in effect precluded federal court intervention. Had petitioner sought federal habeas relief while the state court litigation was continuing, considerations of comity and federalism would almost certainly have required dismissal. Both doctrines compel a respect for state functions and counsel against interference with ongoing state judicial proceedings. Juidice v. Vail (1977) 430 U.S. 327, 335, 97 S.Ct. 1211, 1217, 51 L.Ed.2d 376; Huffman v. Pursue, Ltd. (1974) 420 U.S. 592, 601, 95 S.Ct. 1200, 1206, 43 L.Ed.2d 482; Younger v. Harris (1971) 401 U.S. 37, 44, 91 S.Ct. 746, 750, 27 L.Ed.2d 669. Moreover, the California Supreme Court's determination on the guilt phase is unlikely to have induced a district court to hear petitioner's habeas since in this circuit, finality of one issue in the state courts is not generally sufficient to circumvent the requirements of comity and federalism. Drury v. Cox (9th Cir. 1972) 457 F.2d 764, 765. Thus, it appears that at the earliest petitioner could not have filed in federal court until 1967 following the California Supreme Court's affirmance of the death penalty imposed at the second penalty trial, and perhaps not even until 1974 when the state litigation was finally resolved. Measured by either date, no prejudice from delay suffered by the state is attributable to petitioner. Put simply, by 1967 (the earliest date that it may reasonably be argued petitioner could have filed), Judge Wingrove had died. Accordingly, both because it appears respondent has waived his laches defense and because he cannot show prejudice attributable to petitioner's delay, respondent's motion to dismiss must be denied.
II
MOTION TO RECONSIDER MARCH 27, 1980 ORDER
Respondent's objection to my order to augment the record and answer interrogatories is predicated upon his reading of Rose v. Mitchell (1979) 443 U.S. 545, 99 S.Ct. 2993, 61 L.Ed.2d 739. He argues Rose precludes *638 both enlargement of the record as well as an evidentiary hearing. Respondent contends that federal habeas corpus review of state grand jury discrimination claims is limited to the state record.
Although the facts of Rose are somewhat complex, for our purposes they may be briefly summarized. During the state proceeding, the prisoners presented evidence that suggested that there had never been a Black jury foreperson in the county. On the basis of this evidence, the district court found that a prima facie case of discriminatory selection had been shown and ordered the state to provide rebuttal evidence. Id. at 99 S.Ct. 2997 and 3006. In rebuttal the state filed an affidavit executed by the state judge who presided over the selection of the grand jury. Although the affiant admitted that there had been no Black grand jury foreperson "[i]n my five counties," he disclaimed any discrimination. Id. 99 S.Ct. at 3006. On the basis of this "material in rebuttal . . . the District Court declined to issue the writs of habeas corpus." Id.
On appeal the Sixth Circuit reversed, finding that the prisoners had established a prima facie case which the state had failed to rebut. The Court of Appeals apparently reached the conclusion that a prima facie case had been presented by relying on the state trial judge's averment that no Blacks had served as forepersons. As noted, however, that evidence was filed in rebuttal, subsequent to the district court's determination that a prima facie case had been established. Id. 99 S.Ct. at 3007.
The Supreme Court reversed the Sixth Circuit because, in part, it "overemphasized and exaggerated the evidence in support of its conclusion that there had `never been a Black foreman or forewoman.. . .'" Id. 99 S.Ct. at 3007.[4] However, the Supreme Court noted that the Sixth Circuit based its conclusion concerning the prima facie case in part upon the trial judge's affidavit. This affidavit, the Court explained, "formed no part of the case put on by respondents." Id. The evidence in support of the prima facie case, which aside from the trial judge's affidavit, consisted entirely of evidence in the state court record, was found by the Supreme Court to be insufficient as a matter of law to establish a prima facie case.[5]
Respondent rests his claim on the single sentence in Rose that the trial judge's affidavit "formed no part of the case put on by respondents." The Supreme Court's refusal to consider the affidavit in support of the prima facie case, respondent argues, must mean that the district court is limited to the record before it. This cryptic comment of the Supreme Court seems a slender reed to base such a startling departure from Rule 7(a), 28 U.S.C. § 2254(d), and Townsend v. Sain, supra. No court since the Rose decision has so interpreted the case. See, e. g. United States ex rel. Barksdale v. Blackburn, supra.
Rose is subject to a much more straightforward reading. Since the district court judge found that a prima facie case existed prior to accepting the trial judge's affidavit, which he accepted solely as rebuttal, the affidavit clearly was not part of the record supporting a prima facie case. By considering the affidavit as part of the prima facie case, the Sixth Circuit distorted the procedural posture of the case and effectively denied the state an opportunity to rebut its finding of a prima facie case.
This reading of Rose, as opposed to respondent's reading, is supported by the fact that the Court did not comment on the fact that the district judge ordered the state to supplement the record, much less find that such augmentation was improper. It is simply unthinkable that the Supreme Court *639 eviscerated Rule 7 without even mentioning it.
I do not believe a single cryptic sentence in a case that does not address the propriety of supplementing the record or holding an evidentiary hearing invalidates my earlier order based as it is on the habeas corpus rules and firmly established precedent. Accordingly, respondent will be directed to provide full responses to my interrogatories.[6]
IT IS THEREFORE ORDERED THAT:
1. Respondent's motion to dismiss, for reconsideration and for stay is denied;
2. Respondent shall file and serve full responses to the court propounded interrogatories not later than twenty (20) days from the date of this order.
NOTES
[1] Rule 9(a) of the Rules Governing Section 2254 Cases in the United States District Courts, 28 U.S.C. Foll. § 2254 (hereafter "Rules").
[2] I reserve for a proper motion the question of whether respondent should be permitted to amend his return.
[3] Such a speaking motion would be akin to a motion for summary judgment (F.R.Civ.P. 56) and indeed affirmative defenses may be established by such a motion (See Wright & Miller, Federal Practice and Procedure § 1277); however, under such a treatment the respondent must demonstrate that there is no material issue of fact in dispute (See e. g. Commodity Future Tradings Comm. v. Savage (9th Cir. 1979) 611 F.2d 270, 282), and as the analysis infra demonstrates, there are, to say the least, such issues.
[4] This appears to be no more than the hardly startling proposition that a Court of Appeal may not ordinarily substitute its judgment of the facts for the district court's judgment. See, e. g. Canron, Inc. v. Plasser American Corp. (4th Cir. 1979) 609 F.2d 1075.
[5] It was similar reasoning, i. e. that the mere absence of Blacks without evaluation of the statistical significance of such an absence is insufficient to establish a prima facie case, that led me to vacate the portion of Judge MacBride's opinion that petitioner in this case had established a prima facie case and, accordingly, led to my order to augment the record.
[6] Respondent also contends that expansion of the record is improper because expansion is tantamount to a hearing and because petitioner is not entitled to a hearing under Townsend v. Sain, supra.
The Advisory Committee Notes to Rule 7 make it clear that expansion was intended to be a procedure separate and apart from an evidentiary hearing, for "[t]he purpose is to enable the judge to dispose of some habeas petitions . . . without the time and expense required for an evidentiary hearing."
In addition, the Advisory Committee notes to Rule 8, which covers evidentiary hearings, state that a determination of whether to hold a hearing should be made after "a review of the answer, the transcript and record of state proceedings, and, if there is one, the expanded record."
Since the order for expansion is not the functional equivalent of a hearing, the court need not decide at this time whether an evidentiary hearing is proper under Townsend v. Sain, supra. The court notes, however, that even if a hearing is not mandated by the Townsend criteria, the decision whether to hold a hearing is within the discretion of the district court. Id. 372 U.S. at 318, 83 S.Ct. at 759; see also Stone v. Cardwell (9th Cir. 1980) 620 F.2d 212.
| {
"pile_set_name": "FreeLaw"
} |
17‐2997‐cv
M.E.S., Inc. et al. v. Safeco Insurance Co. of America, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term 2018
(Argued: December 10, 2018 Decided: December 14, 2018)
Docket No. 17‐2997‐cv
M.E.S., INC., M.C.E.S., INC., and GEORGE MAKHOUL,
Plaintiffs‐Appellants,
v.
SAFECO INSURANCE COMPANY OF AMERICA, LIBERTY MUTUAL
INSURANCE COMPANY, S.A. COMUNALE CO. INC., RONALD GOETSCH,
DAVID PIKULIN, and CARYN MOHAN‐MAXFIELD,
Defendants‐Appellees.*
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NEW YORK
Before:
SACK, PARKER, and CHIN, Circuit Judges.
The Clerk of Court is directed to amend the official caption to conform to the above.
Appeal from a judgment of the United States District Court for the
Eastern District of New York (Chen, J.), granting summary judgment and
dismissing all claims in the Second Amended Complaint against defendants‐
appellees. On appeal, plaintiffs‐appellants argue that the district court erred in
holding that they failed to demonstrate the existence of a triable issue of fact as to
their claims that defendants‐appellees breached their contractual obligations and
engaged in bad faith and tortious conduct.
AFFIRMED.
MICHAEL CONFUSIONE, Hegge & Confusione, LLC,
Mullica Hill, New Jersey, for Plaintiffs‐Appellants.
VIVIAN KATSANTONIS, Watt, Tieder, Hoffar & Fitzgerald,
L.L.P., McLean, Virginia, for Defendants‐Appellees
Safeco Insurance Company of America, Ronald
Goetsch, David Pikulin, and Caryn Mohan‐Maxfield.
JONATHAN BONDY (Stephen A. Wieder, Beth J.
Rotenberg, on the brief), Chiesa Shahinian &
Giantomasi PC, West Orange, New Jersey, for
Defendant‐Appellee Liberty Mutual Insurance
Company.
JAMES A. KASSIS, Schenck, Price, Smith & King, LLP,
Florham Park, New Jersey, for Defendant‐Appellee
S.A. Comunale Co. Inc.
2
PER CURIAM:
Plaintiffs‐appellants M.E.S., Inc. (ʺMESʺ), M.C.E.S., Inc., and George
Makhoul (collectively, ʺPlaintiffsʺ) appeal the district courtʹs August 25, 2017
judgment dismissing all claims in the Second Amended Complaint against
defendants‐appellees Safeco Insurance Company of America, Ronald Goetsch,
David Pikulin, and Caryn Mohan‐Maxfield (collectively, ʺSafecoʺ); Liberty
Mutual Insurance Company (ʺLiberty Mutualʺ); and S.A. Comunale Co. Inc.
(ʺComunaleʺ). We assume the partiesʹ familiarity with the underlying facts,
procedural history, and issues on appeal.
This case arises from three construction projects undertaken by the
United States Army Corps of Engineers (the ʺCorpsʺ) between 2003 and 2006.
The Corps hired MES as the general contractor on two of the projects and
Hirani/MES, JV (the ʺJoint Ventureʺ) as the general contractor on the third.1 At
MESʹs request, Safeco issued performance and payment bonds for all three
projects, and MES agreed to indemnify Safeco for any losses resulting from its
issuance of the bonds for two of the projects. The Joint Venture is identified as
1 The Joint Venture is listed in the captions in the district courtʹs memorandum and order, but not
in the judgment or notice of appeal. Plaintiffsʹ brief on appeal does not indicate that it was submitted on
behalf of the Joint Venture, nor has a separate brief been filed on its behalf.
3
the ʺPrincipalʺ in an identical indemnity agreement with Safeco for the third
project, which was executed by the Joint Venture, Hirani Engineering & Land
Surveying, P.C., and MES. Thereafter, MES executed a subcontract with
Comunale to perform fire protection work on two of the projects. Liberty Mutual
issued performance and payment bonds for these subcontracts.
In 2008, the Corps issued Cure Notices for each project, notifying
MES and the Joint Venture of their respective failures and requiring them to cure
all failures within 14 days. The Corps subsequently terminated each contract for
default and made a bond demand on Safeco to complete the remaining work for
each project. Safeco incurred losses in responding to the Corpʹs bond demands
and performing its attendant obligations.
Safeco and MES brought separate actions in the United States
District Court for the Eastern District of New York related to the three
construction projects. In its June 16, 2015 Minute Order, the district court
dismissed Plaintiffsʹ claims based on the third project for lack of standing,
reasoning that MES had not shown that it was a third‐party beneficiary of the
contract in question. On September 3, 2015, the district court granted the parties
leave to file cross summary‐judgment motions in both cases. The district court
4
decided these motions in a detailed 76‐page memorandum and order under
captions for both cases, and entered separate judgments for each case. This
appeal concerns only the action initiated by MES.2
The district court dismissed Plaintiffsʹ claims arising from the third
project for lack of standing. We have some doubt as to whether this decision was
correct,3 but we need not decide the question for MESʹs claims based on the third
project are essentially identical to its claims based on the other two projects. We
conclude that MESʹs claims fail on the merits, substantially for the reasons given
by the district court in its memorandum and order of March 30, 2017. Indeed,
after nine years of litigation, including five years of discovery, MES fails to
articulate any support for its accusations that Safeco breached its contractual
obligations or engaged in bad faith or tortious conduct. The claim that Safeco
acted inappropriately by attending the cure meetings is particularly frivolous, as
the record shows that, in its Cure Notices, the Corps ʺrequiredʺ the ʺpresence of
[MESʹs] bonding companyʺ at the meetings. J. App. at 4042, 4045; see also J. App.
2 The judgment in this case dismisses claims in the Second Amended Complaint and does not
address any other claims. There is an appeal pending in the action initiated by Safeco, No. 18‐2672.
3 The record does not indicate whether the Joint Venture is a separate legal entity or whether it was
operating through the two joint venturers. See, e.g., Geneva Pharm. Tech. Corp. v. Barr Labs. Inc., 386 F.3d
485, 514 (2d Cir. 2004) (holding that a member of a joint venture had standing to pursue claims for
injuries to the joint venture). Moreover, the original contract was in MESʹs name and was signed on
behalf of MES, and while the indemnity agreement identified the Joint Venture as principal, it was signed
by and on behalf of three entities, including MES.
5
at 4079, 4110. MES has failed to identify any good faith basis, in law or on the
basis of the agreements at issue, for its assertion that Safeco had no right to take
steps to meet its obligations under the surety bonds. The contention that Safeco
somehow was motivated to induce MES to fail obviously makes no sense, for
MESʹs failure to meet its obligations would have triggered Safecoʹs liabilities as
surety.
CONCLUSION
We have considered MESʹs remaining arguments and find them to
be without merit. Accordingly, we AFFIRM the judgment of the district court.
Defendants‐appellees have not requested sanctions for MESʹs numerous
arguments lacking a basis in law or face. We, however, sua sponte award Safeco
double costs.
6
| {
"pile_set_name": "FreeLaw"
} |
Maragliano v Port Auth. of NY & NJ (2014 NY Slip Op 04907)
Maragliano v Port Auth. of NY & NJ
2014 NY Slip Op 04907
Decided on July 2, 2014
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 July 2, 2014SUPREME COURT OF THE STATE OF NEW YORKAppellate Division, Second Judicial DepartmentTHOMAS A. DICKERSON, J.P.
JOHN M. LEVENTHAL
L. PRISCILLA HALL
ROBERT J. MILLER, JJ.
2012-04188
2012-10413
(Index No. 25787/07)
[*1]Eduardo Maragliano, appellant,
v Port Authority of NY & NJ, et al., respondents (and a third-party action).
The Orlow Firm, Flushing, N.Y. (Adam M. Orlow and Louis A. Badola of counsel), for appellant.
Segal McCambridge Singer & Mahoney, New York, N.Y. (Simon Lee and Christian H. Gannon of counsel), for respondent Port Authority of NY & NJ.
Lipsitz Green Scime Cambria, LLP, Buffalo, N.Y. (John A. Collins of counsel), for respondent Zano Industries, Inc.
DECISION & ORDER
In an action, inter alia, to recover damages for personal injuries, the plaintiff appeals, as limited by his brief, from (1) so much of an order of the Supreme Court, Queens County (J. Golia, J.), entered March 6, 2012, as, upon renewal, in effect, vacated the determination in an order of the same court dated June 27, 2011, denying those branches of the motion of the defendant Port Authority of NY & NJ which were for summary judgment dismissing the causes of action alleging violations of Labor Law §§ 240(1) and 241(6) insofar as asserted against it, and thereupon granted those branches of the motion, and (2) so much of an order of the same court entered October 3, 2012, as (a) denied the plaintiff's cross motion, denominated as one for leave to renew, but which was, in actuality, one for leave to reargue his opposition to the motion of the defendant Port Authority of NY & NJ which was for leave to renew its prior motion for summary judgment dismissing the complaint insofar as asserted against it, and (b) granted that branch of the motion of the defendant Zano Industries, Inc., which was for leave to renew its prior motion for summary judgment dismissing the complaint insofar as asserted against it, which had been denied in the order dated June 27, 2011, and, upon renewal, in effect, vacated the determination in the order dated June 27, 2011, denying those branches of the motion of the defendant Zano Industries, Inc., which were for summary judgment dismissing the causes of action alleging violations of Labor Law §§ 240(1) and 241(6) insofar as asserted against it, and thereupon granted those branches of the motion.
ORDERED that the order entered March 6, 2012, is affirmed insofar as appealed from; and it is further,
ORDERED that the appeal from so much of the order entered October 3, 2012, as denied the plaintiff's cross motion, denominated as one for leave to renew, but which was, in actuality, one for leave to reargue his opposition to the motion of the defendant Port Authority of NY & NJ which was for leave to renew its prior motion for summary judgment dismissing the complaint [*2]insofar as asserted against it, is dismissed, as no appeal lies from an order denying reargument; and it is further,
ORDERED that the order entered October 3, 2012, is affirmed insofar as reviewed; and it is further,
ORDERED that one bill of costs is awarded to the defendants.
The defendant Port Authority of NY & NJ (hereinafter the Port Authority) established, prima facie, that at the time of the subject accident, the plaintiff was not engaged in construction work within the meaning of Labor Law § 240(1) and was not working in a construction area within the meaning of Labor Law § 241(6) (see Jock v Fien, 80 NY2d 965; Flores v ERC Holding LLC, 87 AD3d 419, 420; Pirog v 5433 Preston Ct., LLC, 78 AD3d 676, 677). In opposition, the plaintiff failed to raise a triable issue of fact. Accordingly, contrary to the plaintiff's contention, upon renewal, the Supreme Court properly granted those branches of the Port Authority's motion which were for summary judgment dismissing the causes of action alleging violations of Labor Law §§ 240(1) and 241(6) insofar as asserted against it.
Furthermore, the Supreme Court properly determined that, pursuant to the law-of-the-case doctrine, it was appropriate, upon renewal, to grant those branches of the motion of the defendant Zano Industries, Inc., which were for summary judgment dismissing the causes of action alleging violations of Labor Law §§ 240(1) and 241(6) insofar as asserted against it (see generally Pastrana v Cutler, 115 AD3d 725; Romagnolo v Pandolfini, 75 AD3d 632, 634). Although, pursuant to the law-of-the-case doctrine, this Court is not bound by the Supreme Court's prior determination, under the circumstances presented here, we decline to disturb the Supreme Court's invocation of that doctrine (see Pastrana v Cutler, 115 AD3d 725; Romagnolo v Pandolfini, 75 AD3d at 634).
The plaintiff's cross motion, denominated as one for leave to renew, did not offer any new facts not offered in support of the plaintiff's opposition to the Port Authority's motion which was for leave to renew its prior motion for summary judgment dismissing the complaint insofar as asserted against it. Therefore, his motion, although denominated as one for leave to renew, was, in actuality, one for leave to reargue, the denial of which is not appealable (see Poulard v Judkins, 102 AD3d 665, 665; Strunk v Revenge Cab Corp., 98 AD3d 1030, 1031; Schoenfeld v Shonfeld, 266 AD2d 449). Accordingly, the appeal from so much of the order entered October 3, 2012, as denied the plaintiff's cross motion must be dismissed.
The plaintiff's remaining contentions are without merit.
DICKERSON, J.P., LEVENTHAL, HALL and MILLER, JJ., concur.
ENTER:
Aprilanne Agostino
Clerk of the Court
| {
"pile_set_name": "FreeLaw"
} |
737 F.Supp.2d 1342 (2010)
Michael ANDREWS, etc., et al., Plaintiffs,
v.
CSX TRANSPORTATION, INC., et al., Defendants.
Case No. 3:06-cv-704-J-32TEM.
United States District Court, M.D. Florida, Jacksonville Division.
August 2, 2010.
*1344 Bridget Ferris, Robert Peirce & Associates, P.C., Pittsburgh, PA, Erik William Berger, Law Office of Erik W. Berger, Jacksonville, FL, Gregory G. Paul, Morgan & Paul, PLLC, Sewickley, PA, for Plaintiffs.
Ami N. Wynne, James S. Whitehead, Sidley Austin, LLP, Chicago, IL, Charles M. Trippe, Jr., Stanley Maurice Weston, Moseley, Prichard, Parrish, Knight & Jones, Jacksonville, FL, for Defendants.
ORDER
TIMOTHY J. CORRIGAN, District Judge.
Plaintiffs in this consolidated action bring claims under the Family Medical Leave Act ("FMLA"). 29 U.S.C. § 2601, et seq. (Doc. 50.)[1] The Court considers the following motions for summary judgment filed by defendants (Docs. 129, 135, 139, 143, 145, 151), plaintiffs' responses (Docs. 173, 174, 175, 176, 178, 179) and the exhibits filed by the parties; Defendants' Motion For Sanctions (Doc. 186) and plaintiff's response (Doc. 187); and filings related to settlements of pending claims. *1345 (Docs. 126, 165, 166, 180, 181, 182, 183, 184, 185, S-18, S-19.)
This Order is a continuation of an earlier Order disposing of motions for summary judgment as to other plaintiffs' claims in this case. (Doc. 188.) The legal precepts set forth in that previous summary judgment Order are incorporated into this Order and are not repeated here.
I. Lack of Subject Matter Jurisdiction
Plaintiffs' complaint fails to differentiate among defendants CSXT, CSXI and CSXC. However, CSXT, CSXI, and CSXC are separate corporate entities within the CSX family of companies. (Doc. 84-1 at 5 (Mateer Decl. ¶ 13).) At times material, "final decisions regarding FMLA eligibility and other FMLA matters with respect to a particular employee are made by the CSX entity that employs the employee." (Id.; see also Doc. 83-2 at 17 (Dove Decl. ¶ 48).) The corporate entities that are not the direct employer of each individual plaintiff are entitled to judgment as a matter of law. Wascura v. Carver, 169 F.3d 683, 685 (11th Cir.1999) ("where a defendant in an FMLA suit does not meet the statutory definition of `employer,' there is no federal subject matter jurisdiction over the claim against that defendant"); 29 U.S.C. § 2611(4); see also (Doc. 188 at 6-7). Plaintiffs' claims against the corporate entities that are not their employer are due to be dismissed for lack of subject matter jurisdiction.
II. Resolved Claims
A. Settled Claims
The Court has been informed that the claims brought by plaintiffs Juliet Christie, Harold Fisher, Rodney Puckett, and Lettie McClain have been settled. (Docs. S-18, S-19.) The Court will direct the parties to file papers to close out these claims.
B. Stipulations For Dismissal
Before the Court are three Stipulations For Dismissal Pursuant To F.R.C.P. 41(a) with prejudice as to the claims brought in Complaint "A" by plaintiffs James Adams, Anita Humphrey (in Count I) and Charisse Bell. (Docs. 126, 165, 166.) Defendants consent to these dismissals. (Doc. S-18.) Accordingly, these claims are due to be dismissed with prejudice.
C. Motions For Dismissal
Plaintiffs have filed three Motions For Dismissal Pursuant To F.R.C.P. 41(a)(2) seeking to dismiss with prejudice the claims brought in Complaint "A" by plaintiffs Tammy Howard, Jennifer Saul and Tracey Thompson. (Docs. 180, 181, 182.) Defendants have filed responses to the motions, saying that they do not object to the dismissal of plaintiffs' claims with prejudice, but contending that the Court's dismissal order should require each plaintiff to pay defendants' costs pursuant to Rule 54(d)(1), Federal Rules of Civil Procedure. (Docs. 183, 184, 185.)
A voluntary dismissal of a claim with prejudice operates as an adjudication on the merits in favor of defendant, and the defendant is considered the prevailing party. Mathews v. Crosby, 480 F.3d 1265, 1276 (11th Cir.2007); Hunt v. Hawthorne Assocs., Inc., 119 F.3d 888, 911 n. 63 (11th Cir.1997); see also Gibson v. Walgreen Co., No. 6:07-cv-1053-Orl-28KRS, 2008 WL 4610239, at *2 (M.D.Fla. Oct. 16, 2008). Rule 54(d)(1) provides that "[u]nless a federal statute, these rules, or a court order provides otherwise, costsother than attorney's feesshould be allowed to the prevailing party." Fed. R. Civ. P. 54(d)(1). "Under Rule 54(d), there is a strong presumption that the prevailing party will be awarded costs." Mathews, 480 F.3d at 1276. These claims are due to be dismissed with prejudice, and defendants are awarded costs for these three *1346 claims, as contemplated by 28 U.S.C. § 1920. See id.
D. Defendants' Motion For Sanctions
The Court defers ruling on Defendants' Motion For Sanctions (Doc. 186) and will hear argument of counsel at a hearing to be scheduled.
III. Defendants' Motions For Summary Judgment On Plaintiffs' Claims[2]
A. Michael Andrews (Count I: "Discipline/Termination Under Absenteeism Policy")
1. Facts
Plaintiff Michael Andrews alleges that "CSX" violated his rights under the FMLA when it terminated him for excessive absenteeism because, he alleges, "six of the nine attendance failures that plaintiff Andrews was charged with were due to a serious medical condition" and "defendants, CSX, never informed plaintiff Andrews that these absences could be certified under the FMLA, until after he was charged with excessive attendance failures." (Doc. 50 (2d Am. Compl.("Compl.") ¶¶ 28, 29).) Andrews alleges that he had informed his employer of his serious medical condition and that the "defendants, CSX, failed in its duty under FMLA to inform plaintiff of his eligibility for FMLA" in violation of 29 C.F.R. § 825.208(a) and (b)(1), which then "allow[ed] him to be subject to the absenteeism policy, and leading to his termination." (Id. ¶¶ 31, 35, 36.)
Defendants argue they are entitled to summary judgment because 1) attendance failures charged to Andrews were not covered by the FMLA; 2) Andrews did not put CSXI on notice of his alleged FMLA-qualifying reasons for his absences nor request FMLA leave for his absences; and 3) CSXI fulfilled its employer-notice obligations under the FMLA. (Doc. 129 at 2.)
Andrews worked for CSXI from April 1, 1999 through February 23, 2006 when he was terminated for excessive absenteeism. (Doc. 130-1 at 4, 5 (Andrews Dep. at 10, 20).)[3] Early in his employment with CSXI, Andrews was disciplined for excessive absenteeism. The discipline is documented in letters to Andrews from the CSXI director of administration dated December 8 and 9, 1999, which state that Andrews was absent a total of 13 days between June 8, 1999 and December 7, 1999. Andrews accepted responsibility, waived a hearing under his collective bargaining agreement, and was placed on probation for a six month period. Andrews was again disciplined for excessive absenteeism ("attendance failures") on May 3, 2004 (20-day suspension) and January 27, 2005 (5-day suspension). (Doc. 130-1 at 54 (Andrews Dep. Ex. 1).)[4] The final 2005 discipline resulting in termination of employment marked the fourth time that Andrews was disciplined for excessive absenteeism. Throughout his employment, *1347 Andrews had "marked-off" "sick" due to arthritis in his wrist, "back pain, flu, heart trouble, toothache, bronchitis, anxiety, mental problems, and a spider bite." (Doc. 129 at 5 (citing (Doc. 130-1 at 16, 22, 29-32, 42 (Andrews Dep. at 34, 49, 66, 75-77, 107)); Doc. S-5.))
Andrews testified at the investigative hearing that when he notified his employer CSXI of his absences in 2005, "I would just call them up and tell them I'm . . . having to mark off and I hate to but I'm sick." (Doc. 130-2 at 66 (Andrews Ex. 15).) Andrews said that he informed his supervisors of his illnesses upon his return to work and provided the required doctors' notes. All but one of the doctors' notes provided by Andrews failed to specify Andrews' medical condition, and all of the notes stated that Andrews was fit to perform his job duties. (Doc. 130-1 at 23, 30-33 (Andrews Dep. at 52, 75-78); S-5 (Andrews Dep. Ex. 14).)[5] Andrews' supervisor, CSXI operations manager John Featherston, testified that he was not aware of a medical condition that would have qualified Andrews for FMLA benefits; "that is not information that is something he has provided unless he voluntarily comes forth, and without that information I have no way of recommending FMLA." (Doc. 130-2 at 39 (Andrews Dep. Ex. 15).)
It is undisputed that Andrews was absent or late the following dates and stated reasons:
7/28/05-8/1/05 marked off 3 days: sick
8/22/05 marked off 1 day: other-family
emergency
9/13/05 marked off one day: sick
9/14/05 45 minutes late to work;
doctor appointment
9/27/05 marked of 1 day: other-car
trouble
11/30/05-12/2/05 marked off 3 days; sick
12/6/05 1 hour 20 minutes late to work
12/7/05-12/9/05 marked off sick during shift
(paid time worked 12/7)
12/29/05-12/30/05 marked off sick
totaling fifteen days of missed work and constituting nine "attendance failures." (Doc. 130-3 at 13, 73 (Andrews Dep. Exs. 15, 19); Doc. 129 at 6.)[6]
*1348 On January 3, 2006, Featherston, in a letter to Andrews, charged Andrews with "excessive attendance failures," citing the absences between July 28 and December 30, 2005, which was "more than six attendance failures in the last six months." A hearing on the charges was scheduled for January 26, 2006. Andrews' employee union representative was also notified of the hearing. (Doc. 130-3 at 13-15 (Andrews Dep. Ex. 15).)
On January 4, 2006, the date Andrews signed acknowledgment of the discipline letter, Featherston told Andrews that if Andrews was suffering from an ongoing medical condition, "it might have been something that you could have explored in the past and gotten some of these to have been part of your FMLA, in which case it would not become a part of this attendance occurrence, and it's something that in the future you might want to consider if your condition falls under the guidelines." Featherston directed Andrews to the company bulletin board information about the FMLA. (Doc. 130-2 at 35, 41 (Andrews Dep. Ex. 15).) Featherston said that he did not "have a lot of detailed knowledge about what Mr. Andrews' condition is" and still has "no first-hand knowledge of what Mr. Andrews' ongoing problem is." (Id. at 33, 35, 41)
A hearing on the January 3 disciplinary charge was conducted on January 26, 2006. Andrews was accompanied by his union representative and had the opportunity to present witnesses and documentary evidence. (Doc. 130-1 at 33-36 (Andrews Dep. at 78-81); Doc. 130-2 (Andrews Dep. Ex. 15).)
The first (and only) time Andrews ever sought FMLA leave was on February 10, 2006, when he submitted to CSXI an FMLA doctor's certification reporting a "serious health condition," in which chiropractor Dr. C.C. Reid stated that the "patient [Andrews] hurt himself picking up a trash can" "approximately 3 weeks before 1-27-06 [which would be January 6, 2006]." The prognosis remained "undetermined until reexam scheduled on 2-11-06." The chiropractor said that Andrews had been provided with a 10-day treatment program with a reexam, and physical therapy. (Doc. 178 at 3; S-5 (Andrews Dep. Ex. 17).) The FMLA leave request was approved February 17, 2006, retroactive to leave in accordance with Andrews' request, from January 30 through February 10, 2006. (Doc. 130-3 at 72 (Andrews Dep. Ex. 18).) Andrews never submitted an FMLA claim for any of the medical conditions which occurred between July 28 and December 30, 2005, for which he was disciplined by termination. (See Doc. 130-3 at 75 (Andrews Dep. Ex. 21).)[7]
On February 23, 2006, hearing officer Robert J. Meizinger wrote to Andrews concerning the outcome of the hearing regarding his January 3 disciplinary notice for excessive absenteeism. Meizinger stated:
Your testimony clearly indicates that you were aware of FMLA when you signed for the HUB Rules on March 1, 2000 and had received notification by "Notice to all Employees" dated May 23, 2005 and at no time did you inform or ask anyone about FMLA or it's [sic] application regarding your alleged medical condition. In addition, the attendance guidelines have been posted at the location for several years and you were aware of the instructions contained therein.
(Doc. 130-3 at 73 (Andrews Dep. Ex. 19).) After finding Andrews at fault, the hearing *1349 officer said after considering Andrews' employment record, "it was determined that discipline in this matter would be termination of your employment effective immediately." (Id. at 74.) The union appealed the termination to an arbitration board, which on April 18, 2008, upheld the termination. (Doc. 130-3 at 75 (Andrews Dep. Ex. 21).)
Andrews acknowledged that he received the company's attendance guidelines. (Doc. 130-1 at 19 (Andrews Dep. at 40)) which provide that "[e]mployees who have been absent, tardy, or a combination thereof, on more than six occasions in a six month period" will have their attendance reviewed by their supervisor, and may, "[w]hen appropriate," be subject to disciplinary action "up to and including dismissal from service, after an appropriate investigation of the circumstances." (Doc. 130-3 at 69-70 (Andrews Dep. Ex. 15).) Additionally, Andrews acknowledged that he received a copy of the company's General Regulations every year he was employed. (Doc. 130-1 at 8 (Andrews Dep. at 26).) The regulations require employees to review each day material posted on the company bulletin board located in the employee break room. (Doc. 130-1 at 9-10 (Andrews Dep. at 27-28).) Prior to 2005, the company bulletin board displayed a poster entitled "Your Rights Under the Family Medical Leave Act of 1993" with information about the FMLA which Andrews admits he reviewed, in part. (See Doc. 178 at 1.) After reading the first two paragraphs, Andrews said he did not read any more of the information because he believed that the FMLA pertained only to families and not to him as a "single man." Andrews acknowledged that he did not read the entire document because the first two paragraphs were "misleading." (Doc. 130-1 at 10-14 (Andrews Dep. at 28-32).) Andrews understood that certain medical absences could be covered by the FMLA "[i]f I had had a family." (Id. at 12 (Andrews Dep. at 30).) Andrews never spoke with his supervisors or the company human resources department about the FMLA. (Id. at 15-16 (Andrews Dep. at 33-34).)
Andrews also admits that CSXI employees received a bulletin on May 23, 2005 that included CSXI's FMLA poster and were instructed to "read the following pages carefully" to ensure they "understand this procedure." (Docs. 129 at 4;178 at 2; 130-3 at 65-68 (Andrews Dep. Ex. 15).)
2. Discussion
It is unlawful for an employer to "interfere with, restrain, or deny the exercise of or attempt to exercise, any right provided" by the FMLA. 29 U.S.C. § 2615(a)(1). "`Interfering with' the exercise of an employee's rights would include, for example, not only refusing to authorize FMLA leave, but discouraging an employee from using such leave." 29 C.F.R. § 825.220(b) (2006).[8] Andrews argues that CSXI "improperly interfered with his right to take intermittent medical leave." (Doc. 178 at 6.)[9]
*1350 a. Andrews Failed to Provide Sufficient Notice of a "Serious Health Condition"
Andrews contends that CSXI "failed to provide specific or individual notice of FMLA leave to Mr. Andrews including but not limited to simply providing him with a medical certification form to have completed by his health care provider for each of the events." (Doc. 178 at 3 (citing 29 C.F.R. § 825.301(b)).) Andrews contends that the information CSXI had, including the notes from the doctors "stating that he was treated and that he was cleared to return to work . . . satisfies the initial notice of leave to trigger the employer's duty to send out a medical certification form for completion." (Doc. 178 at 11 (emphasis in original)). Andrews focuses on the requirement of implementing regulation 29 C.F.R. § 825.301(c) which requires that upon receipt of the employee's "notice of the need for leave," the employer must provide written guidance of the employee's rights and responsibilities under the FMLA, including any requirements for the employee to furnish medical certification of a serious health condition and the consequences of failing to do so. 29 C.F.R. § 825.301(a)(2), (b)(1)(ii) and (c). As framed by Andrews, "[t]he issue to be determined is whether Mr. Andrews sufficiently provided either verbal and/or written notice of his need for leave; and then in response did [CSXI] provide individual notice of the procedures to apply for FMLA which would include providing a medical certification form." (Doc. 178 at 10.)
"Under [regulation] § 825.301(c) of the FMLA, the detailed employer written notice obligation . . . arises only after an employee gives sufficient information to the employer to apprise it of the need for leave due to a serious health condition. If an employee gives insufficient or no notice of a serious health condition, § 825.301(c) does not apply. If [the employee] failed to properly notify [his] employer of [his] need for leave, [the] employer would be under no obligation to comply with the requirements of 29 C.F.R. § 825.301(c)." Sanders v. May Dept. Stores Co., 315 F.3d 940, 945 (8th Cir.2003); see also Robinson v. Overnite Transp. Co., 110 F.3d 60, 1997 WL 165416, at *8-9 (4th Cir.1997) (employer's duty to explain to employee his rights and responsibilities required by 29 C.F.R. § 825.301(c) not triggered because employer was never on notice of employee's need for FMLA leave) (unpublished opinion).
Both the employee and the employer have specific notice requirements pursuant to the FMLA and its implementing regulations. See 29 U.S.C. § 2612(e)(1) and (2), 2613; 29 C.F.R. §§ 825.208, 825.300, 825.301, 825.302, 825.303, 825.304, 825.305. "An employee shall provide at least verbal notice, sufficient to make the employer aware that the employee needs FMLA-qualifying leave, and the anticipated timing and duration of the leave." 29 C.F.R. § 825.302(c); see also Lowery v. Strength, 356 Fed.Appx. 332, 333 (11th Cir.2009). "[A]n employee giving notice of the need for . . . FMLA leave does not need to expressly assert rights under the Act or even mention the FMLA to meet his or her obligation to provide notice, though the employee would need to state a qualifying reason for the needed leave." *1351 29 C.F.R. § 825.208(a)(2); see also Cruz v. Publix Super Markets, Inc., 428 F.3d 1379, 1383 (11th Cir.2005) (citing 29 C.F.R. §§ 825.302(c), 825.303(b)). "The FMLA does not require that an employee give notice of a desire to invoke the FMLA. Rather, it requires that the employee give notice of need for FMLA leave. This kind of notice is given when the employee requests leave for a covered reason. After a notice of this sort the employer can inquire further to determine if FMLA applies." Price v. City of Ft. Wayne, 117 F.3d 1022, 1026 (7th Cir.1997). Indeed, "the employee can be completely ignorant of the benefits conferred by the Act: it is sufficient notice if the employee provides the employer with enough information to put the employer on notice that FMLA-qualifying leave is needed." Stoops v. One Call Communications, Inc., 141 F.3d 309 (7th Cir. 1998); see also 29 C.F.R. § 825.303(b) ("[t]he employee need not expressly assert rights under the FMLA or even mention the FMLA, but may only state that leave is needed").
A period of absence alone is not adequate notice under the FMLA. Phillips v. Quebecor World RAI, Inc., 450 F.3d 308, 311 (7th Cir.2006). Nor does an employee's reference to being "sick" "`suggest to the employer that the medical condition might be serious or that the FMLA otherwise could be applicable.'" Id. at 312 (citation omitted). Additionally, a doctor's note that fails to specify the medical reason for the employee's absence does not provide the employer with sufficient notice of a potentially FMLA "qualifying reason." See Lowery, 356 Fed.Appx. at 334 (doctor's certificate and letters saying that employee was previously treated for depression and anxiety, that her absences were due to "medical reasons" and that employee could return to work did not inform employer that employee was currently suffering from a condition that might qualify her for FMLA leave).
"Once an employee gives sufficient notice to her employer that potentially FMLA-qualifying leave is needed, the employer must then ascertain whether the employee's absence actually qualifies for FMLA protection." Cruz, 428 F.3d at 1383 (citations omitted). "The employee cannot merely demand leave; he must give the employer a reason to believe that he is entitled to it." Id., 428 F.3d at 1385. "The employer will be expected to obtain any additional required information through informal means." 29 C.F.R. § 825.303. The FMLA does not "require employers to engage in intrusive inquiries to determine whether the FMLA applies." Manuel v. Westlake Polymers Corp., 66 F.3d 758, 763 (5th Cir.1995); see also Cruz, 428 F.3d at 1385 ("[u]nless the employer already knows that the employee has an FMLA-approved reason for leave, the employee must communicate the reason for the leave to the employer"); Gay v. Gilman Paper Co., 125 F.3d 1432, 1434-36 (11th Cir.1997) (employee's husband's phone call to employee's supervisor that employee was "in the hospital for tests" did not supply employer with sufficient information to make employer aware the employee's absence was due to a potentially FMLA-qualifying reason, as required to trigger employer's burden to request further information). "Requiring employers to determine whether leave is covered by the FMLA every time an employee was absent because of sickness would impose `a substantial and largely wasted investigative burden on employers.'" Phillips, 450 F.3d at 312.[10]
*1352 Andrews and CSXI do not dispute the nature of the communications which occurred between Andrews and CSXI concerning his absences. Nor do they dispute that CSXI, upon sufficient notice, would have specified duties under the FMLA. But the scant information provided by Andrews to CSXI was insufficient to shift the burden to CSXI to request further information or to provide the individualized notice required by 29 C.F.R. § 825.301(c). CSXI could not reasonably be expected to conclude that Andrews had expressed the "need for [FLMA] leave" when phoning in "sick" or providing doctor's notes for unspecified ailments, or that any of Andrews' absences qualified for FMLA leave. See de la Rama v. Ill. Dept. of Human Servs., 541 F.3d 681, 687 (7th Cir.2008). Thus, CSXI had no notice of Andrews' alleged need for FMLA leave, and thus no resulting duty. See Stoops, 141 F.3d at 313. Further, Andrews repeated absences were not for any chronic serious health conditions requiring continuing treatment by a health care provider or inpatient care, nor was Andrews ever incapacitated for any significant period of time. See 29 U.S.C. § 2612(b); 29 C.F.R. §§ 825.114, 825.203(a). Chronic absenteeism for varying reasons alone is not sufficient to put an employer on notice that an employee, who reports a variety of isolated singular non-qualifying reasons for the absences, may qualify for FMLA leave. See Cruz, 428 F.3d at 1385. The FMLA and its regulations "only require the employer to provide leave (or investigate further) if the employee gives notice of a `qualifying reason.'" Stoops, 141 F.3d at 313-14.
b. No "Qualifying Reason"
Even if Andrews' notice was sufficient, it is irrelevant if he cannot demonstrate that he sought FMLA for a "serious health condition" qualifying him for FMLA leave, an essential element of an FMLA interference claim. The FMLA provides eligible employees with leave for "a serious health condition that makes the employee unable to perform the functions of the position of such employee." 29 U.S.C. § 2612(a)(1)(D). The FMLA defines a "serious health condition" as "an illness, injury, impairment, or physical or mental condition that involves . . . inpatient care in a hospital, hospice, or residential medical facility; or . . . continuing treatment by a health care provider." 29 U.S.C. § 2611(11); see also 29 C.F.R. § 825.114(a)(1) and (2). A "serious health condition" involving "[c]ontinuing treatment by a health care provider" includes:
(i) A period of incapacity . . . of more than three consecutive calendar days, and any subsequent treatment or period of incapacity relating to the same condition, that also involves:
(A) Treatment two or more times by a health care provider . . .; or
(B) Treatment by a health care provider on at least one occasion which results in a regimen of continuing treatment under the supervision of the health care provider.
. . .
(iii) Any period of incapacity or treatment for such incapacity due to a chronic serious health condition . . . which:
(A) Requires periodic visits for treatment by a health care provider . . .;
(B) Continues over an extended period of time (including recurring episodes of a single underlying condition); and
*1353 (C) May cause episodic rather than a continuing period of incapacity (e.g., asthma, diabetes, epilepsy, etc.). . . .
29 C.F.R. § 825.114(a)(2). "[T]he term `serious health condition' is intended to cover conditions or illnesses that affect an employee's health to the extent that he or she must be absent from work on a recurring basis or for more than a few days for treatment or recovery. . . . The term `serious health condition' is not intended to cover short-term conditions for which treatment and recovery are very brief. It is expected that such conditions will fall within even the most modest sick leave policies." S.Rep.No. 103-3 at 28 (1993), reprinted in 1993 U.S.C.C.A.N. 3, 30. Such ailments as "the common cold, the flu, ear aches, upset stomach, minor ulcers, headaches other than migraine . . ." are not considered "serious health conditions." 29 C.F.R. § 825.114(c); see generally Stimpson v. United Parcel Service, 351 Fed.Appx. 42, 49 (6th Cir.2009) (citation omitted) ("bruises and mild back pain" suffered in bicycle accident do not qualify as a "serious medical condition"); Morris v. Family Dollar Stores of Ohio, Inc., 320 Fed.Appx. 330, 334, 337 (6th Cir.2009), cert. denied, ___ U.S. ____, 130 S.Ct. 418, 175 L.Ed.2d 272 (2009) ("an out-patient needle biopsy with one follow up visit" is not a "serious health condition"); Beaver v. RGIS Inventory Specialists, Inc., 144 Fed.Appx. 452, 456 (6th Cir.2005) (bronchitis does not qualify as a "serious health condition" (citing cases)).
As a matter of law, Andrews' absences between July and December 2005, for which he was disciplined, do not qualify as a "serious health condition" for FMLA purposes. None of Andrews' absences were due to in-patient hospital care. Likewise, none of the absences due to illness qualify as requiring "continuing treatment by a health care provider." Twice Andrews was absent for three day periods, once for a "spider bite" and once for bronchitis. Both conditions resolved within days, and there is no evidence the bite or the bronchitis caused Andrews to be under "continuing" or "periodic" care or supervision by a health care provider for either medical event. The reoccurrence of bronchitis one month later was treated and resolved, and Andrews returned to work in two days. The remaining absences were of duration of two days or less, for anxiety, bronchitis, an out-patient procedure, and a doctor's appointment. By Andrews' own admission, he was qualified to return to work and able to perform his job duties after each short-term absence. Cf. Curry v. Neumann, No. 98-8969-CIV, 2000 WL 1763842, at *5 (S.D.Fla. April 3, 2000) (granting summary judgment to employer where doctors' notes provided by employee failed to state that she could not perform the duties of a clerk and thus were insufficient certification to justify FMLA leave). Andrews' absences at issue were due to different relatively minor medical events, none of them serious, and none of them continuing or connected. Because the undisputed evidence does not create a triable issue as to whether Andrews suffered from a serious health condition, as a matter of law he was not eligible for FMLA leave.
B. Marcie Hoerig (Count II: "Termination/Discipline under False Pretenses and Subterfuge")
Plaintiff Marcie Hoerig was terminated by her employer CSXT[11] on April 11, 2006. The reason given by CSXT for the termination was that Hoerig was guilty of "conduct unbecoming an CSXT employee, insubordination, misusing FMLA leave, and abandoning her position during her *1354 regular shift on January 24, 2006." On that date, Hoerig "marked off" on FMLA leave during her work-shift after being told by her supervisor to fill in a vacant dispatcher desk job, telling the supervisor that the it was "not part of her job" and becoming upset. (Docs. 135 at 5; 173 at 2; 136-2 at 7, 21, 23-26, 89 (Hoerig Dep. At 20, 96, 99-102 & Ex. 25).) At the time, Hoerig was approved for intermittent FMLA leave for back spasms and aches. (Docs. 135 at 4 (with citations to record); 173 at 2.) Hoerig argues that her need for FMLA was related to her serious medical condition. CSXT contends that it had a "honest belief" that it was not.
1. Hoerig's Interference Claim
"[T]o state a claim that his employer has interfered with a substantive FMLA right, a plaintiff need only demonstrate that he was entitled to but denied the right. He does not have to allege that his employer intended to deny the right; the employer's motives are irrelevant." Strickland v. Water Works and Sewer Bd. of City of Birmingham, 239 F.3d 1199, 1208 (11th Cir.2001). An employer can defeat an interference claim by showing, among other things, that the employee did not take leave "for the intended purpose." While the Court is skeptical about the ultimate merit of plaintiff Marcie Hoerig's FMLA interference claim, the Court is deferring ruling on the summary judgment motion.
2. Hoerig's FMLA Retaliation Claim
To succeed on her FMLA retaliation claim, Hoerig must establish that CSXT "intentionally `discriminated against [her] because [s]he engaged in activity protected by the Act.'" Foshee v. Ascension Health-IS, Inc., No. 09-16499, 384 Fed. Appx. 890, 891, 2010 WL 2511384, at *1 (11th Cir. June 23, 2010) (quoting Strickland, 239 F.3d at 1206). When the plaintiff does not offer direct evidence of the employer's retaliatory intent, the court applies the McDonnell Douglas[12] burden shifting framework. Schaaf v. Smithkline Beecham Corp., 602 F.3d 1236, 1243 (11th Cir.2010). Under this framework, the "plaintiff must first establish a prima facie case by demonstrating (1) she engaged in statutorily protected activity, (2) she suffered an adverse employment decision, and (3) the decision was causally related to the protected activity." Id. "If the plaintiff makes out a prima facie case, the burden then shifts to the defendant to articulate a legitimate reason for the adverse action." Hurlbert v. St. Mary's Health Care Sys., Inc., 439 F.3d 1286, 1297 (11th Cir.2006). "If the defendant does so, the plaintiff must then show that the defendant's proffered reason for the adverse action is pretextual." Id. "`An employer articulates a legitimate, non-discriminatory reason for termination where an employer had an honest, good faith belief for termination, even if it turns out that the employer was mistaken in that belief.'" Hegre v. Alberto-Culver USA, Inc., 485 F.Supp.2d 1367, 1380 (S.D.Ga.2007) (quoting Holmes v. W. Palm Beach Hous. Auth., 309 F.3d 752, 755 (11th Cir.2002)). "[A] plaintiff bringing a retaliation claim faces the increased burden of showing that his employer's actions `were motivated by an impermissible retaliatory or discriminatory animus.'" Strickland, 239 F.3d at 1207 (citation omitted). Clearly, CSXT's "honest belief" is applicable to the analysis of Hoerig's retaliation claim.
Construing the evidence in favor of plaintiff, the Court will assume, without deciding, that Hoerig can establish a prima facie case; that is, that Hoerig exercised *1355 her FMLA right by taking qualified leave two-thirds of the way through her shift on January 24, 2006 and suffered an adverse employment action when she was terminated less than three months later. (The Court here presumes for purposes of this motion, that plaintiff can establish the requisite causal connection, though the evidence is that Hoerig had been taking FMLA leave since 2000 without adverse consequence to her job.)
The burden then shifts to CSXT to articulate a legitimate, non-retaliatory reason for terminating Hoerig. CSXT fired Hoerig[13] for insubordination, dishonesty, using FMLA leave under false pretenses, and abandonment of her position, contrary to employment rules. CSXT grounded its belief that Hoerig did not use her FMLA leave for the intended purpose of her serious health condition in the fact that Hoerig "marked off" for FMLA leave immediately upon being assigned an additional work task she clearly did not want to do, after an exchange of words with her supervisor. This is corroborated by the testimony of Timothy Male, and documentation.
The burden then shifts back to Hoerig to show that the proffered reason for her termination was pretextual.
Where the employer meets its burden, "the plaintiff must introduce significantly probative evidence showing that the asserted reason is merely a pretext for discrimination" to avoid summary judgment. . . . A plaintiff may show pretext "either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence.". . . A plaintiff may point to "weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions" in the employer's proffered reason. . . . However, a plaintiff cannot merely quarrel with the wisdom of the employer's reason, but "must meet the reason head on and rebut it."
Diaz v. Transatlantic Bank, 367 Fed.Appx. 93, 96-97 (11th Cir.2010) (citations omitted). Hoerig has proffered no evidence that CSXT's reason for firing her was pretextual. She raises no genuine issue of fact that the stated reasons for her termination were false, nor can she demonstrate that CSXT's proffered reason did not actually motivate her discharge. Judgment is due to be entered in favor of CSXT on Hoerig's FMLA retaliation claim.[14]
C. Anita Humphrey (Count II: "Termination/Discipline under False Pretenses and Subterfuge")
1. Humphrey's Interference Claim
Plaintiff Anita Humphrey contends that her employer, CSXT[15] violated her FMLA rights when it disciplined her (with a 10-day suspension) on July 10, 2006 for charges arising from her marking off for "a valid FMLA episode" on May 19, 2006. (Doc. 174 at 1.) On that date, Humphrey was testing a bicycle she was considering purchasing from a fellow employee in the CSXT parking lot during the middle of her shift. A manager told her to stop riding the bicycle in the company parking lot during working hours; there is no dispute that the manager spoke to her in a civil, *1356 non-threatening manner. Humphrey abruptly left work, claiming the need for FMLA leave. CSXT disciplined Humphrey with a 10-day suspension contending that she left work early on May 19, 2006 under false pretenses. CSXT argues that it is not liable to Humphrey for interfering with her FMLA rights because it had an "honest belief" that she was not using FMLA leave for its intended purpose. Humphrey argues that she was exercising her protected FMLA rights because her "serious health condition" was "exacerbated by stressful conditions." (Docs. 139 at 4-5, 10 (citation to record); 174 at 2, 3 (citing Humphrey Dep. at 81, 83-85).)
Again, the Court is skeptical about the ultimate merit of plaintiff Anita Humphrey's FMLA interference claim, particularly given the circumstances underwhich she "marked-off" for FMLA leave on May 19, 2006. However, the Court will defer ruling and set this motion for hearing for discussion of the "honest belief" issue and its applicability in the Eleventh Circuit. See Strickland, 239 F.3d at 1208.[16]
2. Humphrey's FMLA Retaliation Claim
CSXT contends that it had "an honest belief that her May 19, 2006 absence was not for a legitimate FMLA leave and that she was not using FMLA leave for its intended purpose." (Doc. 139 at 2; see also Doc. 154-1 at 2-3 (Male Dep. at 52-53).) Assuming that Humphrey has established a prima facie case, CSXT has met its burden of articulating a legitimate non-retaliatory reason for disciplining Humphrey for leaving work. See Holmes, 309 F.3d at 755 ("[a]n employer articulates a legitimate nondiscriminatory reason for [discipline] where the employer had an honest, good faith belief in the reason for termination, even if it turns out that the employer was mistaken in that belief"). "To show pretext, a plaintiff must come forward with evidence . . . sufficient to permit a reasonable factfinder to conclude that the reasons given by the employer were not the real reasons for the adverse employment decision." Hurlbert, 439 F.3d at 1298 (internal quotations and citations omitted). Even if CSXT's "honest belief" ultimately proves to be incorrect and Humphrey's FMLA mark-off on the day in question was for the FMLA's "intended purpose," plaintiff has adduced no evidence that CSXT's "honest belief" was motivated by "an impermissible retaliatory or discriminatory animus." See Strickland, 239 F.3d at 1207. Judgment is due to be entered in favor of CSXT on Humphrey's FMLA retaliation claim.
D. Deanna Miller (Count II: "Termination/Discipline under False Pretenses and Subterfuge")
Plaintiff Deanna Miller, a crew dispatcher with CSXT,[17] was terminated by her employer in April 2005 for her use of FMLA leave in late December 2004 and early January 2005.[18] According to CSXT, Miller was not approved and authorized to take FMLA leave during this time period, *1357 inasmuch as her medical certification for the medical condition of stress and anxiety was not submitted to the company's FMLA administrator until March 8, 2005. (Docs. 143 at 9; 156-1 at 5 (Dove 2d Decl. ¶ 21).) Miller contends that she "likely" mailed a medical certification dated December 21, 2004 to the "medical department" and that after learning of charges against her, she hand-delivered the certification letter to her supervisor on January 29, 2005, which would have covered her absences pursuant to company policy and governing regulations. (Docs. 179 at 4 (citing Miller Dep. at 41-44 and Ex. 9); 144-1 at 20 (Miller Dep. at 41).)
1. Miller's Interference Claim
CSXT argues that Miller's December 2004-January 2005 absences were not protected by the FMLA because she failed to timely submit a medical certification form related to those absences (Doc. 143 at 11-15) (citing e.g. 29 C.F.R. § 825.311(b)) and that it had an "honest suspicion" Miller was misusing FMLA leave. (Id. at 15-18.) The Court defers ruling on CSXT's motion for summary judgment on Miller's interference claim pending a hearing.
2. Miller's Retaliation Claim
Assuming for purposes of considering defendants' motion for summary judgment, that Miller has established a prima facie case of discrimination for her lawful use of FMLA leave, she has adduced no evidence to counter CSXT's contention that Miller was disciplined based upon "CSXT's `honest suspicion' that she had misused FMLA leave by taking leave when she was not approved," believing that its FMLA administrator first received Miller's medical certification in March 2005. (Doc. 143 at 20.) Miller cites to no evidence other than her own testimony that she "likely" mailed and also hand delivered the medical certification to an office supervisor before that date. Miller has failed to meet her summary judgment burden of putting forth evidence that CSXT's proffered legitimate reason is pretext for unlawful retaliation based upon her use of FMLA leave.[19] Summary judgment on Miller's retaliation claim is due to be granted in favor of CSXT.
E. Muzette Robinson (Count II: "Termination/Discipline under False Pretenses and Subterfuge")
Plaintiff Muzette Robinson alleges her employer CSXT[20] violated her rights under the FMLA when it imposed a 20-day suspension based upon the charge of marking off work under false pretenses.[21]*1358 Key to this claim is the undisputed fact that Robinson never served a day of the suspension which was rescinded, and never lost any pay. While the discipline remains on Robinson's employment record, the parties agree that "[b]ecause three years have passed since August, 2005, this disciplinary action will not have an impact on any future discipline that CSXT may issue to Ms. Robinson." (Doc. 145 at 7; 175 at 3.) Robinson contends that she has suffered an "injury in fact." (Doc. 175 at 2.)
The FMLA provides relief only if the employee has been prejudiced by a violation of the statute. Demers v. Adams Homes of Northwest Fla., Inc., 321 Fed.Appx. 847, 849 (11th Cir.2009) (citing Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81, 89, 122 S.Ct. 1155, 152 L.Ed.2d 167 (2002)). "The remedy is tailored to the harm suffered." Ragsdale, 535 U.S. at 89, 122 S.Ct. 1155. Thus, even if there may have been a technical violation of the FMLA, "those violations are not compensable where, as here, a plaintiff has failed to demonstrate that he suffered any `adverse employment action' for purposes of stating a prima facie case under the statute." Drago v. Jenne, 453 F.3d 1301, 1307 (11th Cir.2006) (citing Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1284 (11th Cir.1999)). Besides failing to show that she was subject to an adverse employment action, Robinson has not demonstrated she suffered any "actual monetary losses" as a result of CSXT's actions. 29 U.S.C. § 2617(a)(1)(A)(i)(II).
Additionally, equitable relief is not appropriate in the absence of an FMLA injury. Andrews v. CSX Transp., Inc., No. 3:06-cv-704-J-HTS, 2009 WL 5176462, at *2 n. 6 (M.D.Fla. Dec. 22, 2009); Billups v. Tampa Sports Auth., No. 8:06-cv-1433-T-23TGW, 2007 WL 4093232, at *9 (M.D.Fla. Nov. 15, 2007) (citing Rodgers v. City of Des Moines, 435 F.3d 904, 909 (8th Cir.2006) ("[b]ecause [the plaintiff] suffered no prejudice, the FMLA provides no equitable relief")); see also 29 U.S.C. § 2617(a)(1)(B) (employer who violates FMLA shall be liable "for such equitable relief as may be appropriate, including employment, reinstatement, and promotion").
Even if equitable relief were available in circumstances where plaintiff has suffered no monetary loss, Robinson has made no showing that the inclusion of the discipline report in her personnel record nearly five years ago has caused her any damages, and has conceded that after the passage of three years (i.e. after August 2008), will not cause her any damages in the future. See City of Los Angeles v. Lyons, 461 U.S. 95, 105, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983) (where a plaintiff seeks prospective relief, he must demonstrate a "real and immediate threat" of future injury); Elend v. Basham, 471 F.3d 1199, 1207 (11th Cir. 2006); Wooden v. Bd. of Regents of Univ. Sys. of Ga., 247 F.3d 1262, 1284 (11th Cir.2001).[22] Summary judgment is due to be granted in favor of CSXT on Robinson's claims.
F. Kathy Warren (Count II: "Termination/Discipline under False Pretenses and Subterfuge")
Plaintiff Kathy Warren's employer *1359 CSXT[23] suspended Warren for five days in August 2006, based on its finding that Warren was absent from work under "false pretenses" during her regular shift on July 6, 2006. The issue is whether she indeed "marked off" for FMLA leave on that date, and if so, whether she was using leave for FMLA's "intended purpose."
During the summer of 2006, Warren used both FMLA[24] and non-FMLA sick leave for absences.[25] According to Warren, she requires FMLA leave for her health condition when it is aggravated by stressful situations. (Doc. 176 at 2 (citing Doc. 152-1 at 37) (Warren Dep. at 84).)
On June 5, 2006, Warren worked seven minutes of her shift and "marked off" "on-duty sick" leave (unpaid sick leave) for the remaining seven hours and 53 minutes, substantiating the leave with a doctor's note dated June 6. (Docs. 151 at 4-5 (citing 152-1 at 13, 27 45 (Warren Dep. at 25, 44 & Ex. 7); S-13; 176 at 2).)
On June 6, 2006, Warren was scheduled to work a full shift, starting at 11:00 p.m. She was initially assigned to train another employee in the CSXT Operations Center, a job which Warren preferred because it was "a quiet job." (Docs. 151 at 5 (citing 152-1 at 18-20) (Warren Dep. at 34, 36, 37)); 176 at 2 (citing Doc. 152-1 at 20 (Warren Dep. at 37).) Approximately 30 minutes into the shift, Warren received a call from a CSXT's Crew Management Center ("CMC") directing her to report to a different position (called "diverting") at the CMC for the remainder of her shift. (Docs. 151 at 5 (citing Doc. 152-1 at 21-23 (Warren Dep. at 38-40); 176 at 2).) CSXT recorded the telephone conversation on June 6, 2006 at 11:23 p.m.:
Kathy[26]: Hello?
Caller 1: Yeah um Kathy.
Kathy: Yes?
Caller 1: Yeah, this is Nika admin, Kathy I'm going to have to divert you
. . .
Kathy: . . . Okay, well you just lay me off ODS ["on-duty sick"]
Caller 1: Okay.
Kathy: Okay.
Caller 1: All right then bye.
(Docs. 151 at 5; 176 at 2; 152-1 at 69-70 (Warren Dep. Ex. 10 at 3-4).) Warren in her brief admits defendants' statement that "Ms. Warren immediately marked off `on-duty sick,' not FMLA, at 11:30 p.m. on June 6, 2006," 30 minutes into her scheduled shift. (Docs. 151 at 5 (citing Doc. 152-1 at 33, 45, 89 (Warren Dep. at 79 & Exs. 7, 27)); 176 at 3.) Warren called the CMC administrative caller several minutes later at 11:30 p.m., to discuss the procedures used in determining the "diversion," but again, Warren did not mention FMLA leave. (Docs. 151 at 6 (citing Docs. 152-1 at 24-25, 70-72 (Warren Dep. at 41-42 & Ex. 10 at 4-6); 176 at 3.)) Warren was *1360 absent from work on June 7 and 8 on non-FMLA sick leave, and on June 9 on FMLA leave. (Docs. 151 at 6; 152-1 at 55; 176 at 2-3.)
On June 20, 2006, CSXT charged Warren under her collective bargaining agreement with marking off "on-duty sick" under "false pretenses on June 6, 2006 after she was diverted from a position in the Operations Center to a different position in the CMC." (Docs. 151 at 6 (citing Doc. 152-1 at 16, 66 (Warren Dep. at 28 & Ex. 8); 176 at 3.))
CSXT conducted a disciplinary investigation into the false pretenses charge against Warren on July 20, 2006, which Warren attended with union representation. (Docs. 151 at 6 (citing Doc. 152-1 at 17-18, 67 (Warren Dep. at 33-34 & Ex. 10); 176 at 3.)) Notably, while aware that the discipline concerned her use of "on-duty sick" leave on June 6, 2006, neither Warren or her representative ever stated in the investigative hearing that she was using FMLA leave on June 6, 2006. (Doc. 152-1 at 67, 69, 72-73, 75, 78-79 (Warren Dep. Ex. 10 at 1, 3, 6-7, 9, 12-13).)
On August 7, 2006, CSXT found Warren guilty of marking off "on duty sick" under false pretenses, and suspended Warren for five days. (Doc. 152-1 at 82 (Warren Dep. Ex. 12).)
In her December 10, 2008 deposition, Warren contended for the first time that at some point on June 6, 2006, she called into a CMC crew dispatcher to mark off FMLA. (Docs. 151 at 7 (citing Doc. 152-1 at 34-36 (Warren Dep. at 80-82); 176 at 3.)) Acknowledging that her employment records do not reflect that she ever sought FMLA leave for June 6, 2006, Warren stated: "It should be but . . . because I know that I did, but . . . it's not here." Warren does not know with whom she spoke, only that
I'm sure I told them when I was marking off on duty sick to mark me off FMLA
(Doc. 152-1 at 34 (Warren Dep. at 80).) As to the telephone call recording transcripts, Warren said "they record what they want to record. . . . They put on the transcripts what they want to put on the transcripts." (Id. at 35 (Warren Dep. at 81.)) Warren acknowledged that she did not raise FMLA at her investigative hearing. (Id. at 34-35 (Warren Dep. at 80-81).)
CSXT argues that it is entitled to summary judgment on both Warren's interference and retaliation claims because 1) Warren did not take FMLA leave on June 6, 2006 and thus her absence is not protected by the FMLA; 2) even if Warren did take FMLA leave on June 6, CSXT had an "honest suspicion" that she was not taking FMLA leave for its intended purpose but that she took leave to avoid working a position she found less desirable; and 3) as to her retaliation claim, Warren has failed to adduce any evidence of pretext to overcome CSXT's proffered reason for the discipline. Warren argues that she met the "notice standard" for FMLA leave, indicating "during her telephone conversation with the admin caller that she needed to be marked off sick on June 6, 2006." (Doc. 176 at 4.) Warren contends that "[a]ll that she was required to do under the statute is to indicate a need for leave in circumstances where the employer is already aware of an employee's medical or family history." (Id.) At minimum, argues Warren, the evidence creates an issue of fact.
Summary judgment is appropriate "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 movant is entitled to judgment as a matter of law." *1361 Fed. R. Civ. P. 56(c). Not any factual dispute will defeat a motion for summary judgment; rather, "the requirement is that there be no genuine issue of material fact." Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (emphasis in original). An issue is "genuine" if "a reasonable trier of fact could return judgment for the non-moving party." Miccosukee Tribe of Indians of Fla. v. U.S., 516 F.3d 1235, 1243 (11th Cir. 2008). As noted by the United States Supreme Court:
At the summary judgment stage, facts must be viewed in the light most favorable to the nonmoving party only if there is a "genuine" dispute as to those facts. Fed. Rule Civ. Proc. 56(c). As we have emphasized, "[w]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts .... Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no `genuine issue for trial.'" Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (footnote omitted). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment.
Scott, 550 U.S. at 380, 127 S.Ct. 1769 (emphasis in original).[27] The Court draws reasonable inferences of the evidence in favor of the non-moving party only "`to the extent supportable by the record.'" Penley v. Eslinger, 605 F.3d 843, 848 (11th Cir.2010) (citing Scott, 550 U.S. at 381 n. 8, 127 S.Ct. 1769). "[A] mere scintilla of evidence in support of the nonmoving party's position is insufficient to defeat a motion for summary judgment." Kesinger v. Herrington, 381 F.3d 1243, 1247, 1249-50 (11th Cir.2004) (rejecting the only testimony favorable to the plaintiff because the testimony was in direct conflict with the record and was inconsistent with the witness' initial written statements).
The undisputed evidence is that Warren told the administrative caller on June 6 to "just lay me off ODS" and nothing more. In addition, Warren had taken non-FMLA sick leave on June 5, 7 and 8, the days before and after the day in question, as well as on other days within the month. Warren's vague assertion two years after the fact that she requested FMLA leave on June 6 directly contradicts two recordings of telephone conversations on June 6, 2006 in which Warren requested "ODS" ("on-duty sick" leave) and the transcript of an investigative hearing held on July 20, 2006 concerning CSXT's charge arising out of Warren's use of "on-duty sick" leave on June 6. Warren's request for non-FMLA sick leave on June 6 is further corroborated by detailed CSXT personnel records, which reflect that Warren took advantage *1362 of both FMLA and non-FMLA leave during this time frame. Nothing in the record creates an inference that Warren requested FMLA leave on June 6, 2006. Her uncorroborated testimony, which is devoid of detail and certainty is so "utterly discredited" by the evidence in the record such "that no reasonable jury could have believed [her]." Scott, 550 U.S. at 380, 127 S.Ct. 1769. Further, especially given the undisputed fact that Warren used FMLA and non-FMLA leave interchangeably, nothing in this record supports Warren's argument that her request for "ODS" would have put CSXT on notice that she had a need to take FMLA leave on June 6, 2006. Because Warren was not exercising her right to FMLA-protected leave on June 6, 2006, summary judgment is due to be entered in favor of CSXT on all of her claims. E.g. Earl v. Mervyns, Inc., 207 F.3d 1361, 1367 (11th Cir.2000) (to state a claim under the FMLA, a plaintiff must prove "she availed herself of a protected right").
Upon due consideration, it is hereby
ORDERED:
1. Plaintiffs Juliet Christie, Harold Fisher, Rodney Puckett, and Lettie McClain, and Defendants shall file a joint motion for dismissal or other appropriate documents by August 31, 2010 to close out these plaintiffs' claims which have been settled.
2. The claims brought in Complaint "A" by plaintiffs James Adams, Anita Humphrey (in Count I) and Charisse Bell are DISMISSED WITH PREJUDICE with each party to bear its own fees and costs. (See Docs. 126, 165, 166.)
3. Plaintiffs Tammy Howard, Jennifer Saul, and Tracey Thompson's Motions For Dismissal Pursuant To F.R.C.P. 41(a)(2) (Docs. 180, 181,182) are GRANTED. Plaintiffs Tammy Howard, Jennifer Saul, and Tracey Thompson's claims brought in Complaint "A" against all defendants are DISMISSED WITH PREJUDICE, with plaintiffs to pay defendants recoverable costs. Fed. R. Civ. P. 54(d). Defendants must file a motion to tax costs no later than August 31, 2010.
4. Defendants' Motion For Sanctions Against Plaintiff Jennifer Saul And Her Counsel Gregory G. Paul Pursuant To Fed. R. Civ. P. 11 And 28 U.S.C. § 1927 (Doc. 186) is DEFERRED, to be discussed at the upcoming hearing.
5. Defendants' Motion For Summary Judgment On The Claims Of Plaintiff Michael Andrews In Second Amended Complaint "A" (Doc. 129) is GRANTED to the extent that Andrews' claims brought in Complaint "A" against defendants CSX Transportation, Inc. and CSX Corporation are DISMISSED WITH PREJUDICE for lack of subject matter jurisdiction, and GRANTED as to Andrews' claims against CSX Intermodal, Inc. brought in Complaint "A."
6. Defendants' Motion For Summary Judgment On The Claim Of Plaintiff Marcie Hoerig In Second Amended Complaint "A" (Doc. 135) is GRANTED to the extent that Hoerig's claims brought in Complaint "A" against defendants CSX Intermodal, Inc. and CSX Corporation are DISMISSED WITH PREJUDICE for lack of subject matter jurisdiction; GRANTED as to Hoerig's claim of retaliation under the Family Medical Leave Act against defendant CSX Transportation, Inc.; and DEFERRED as to Hoerig's claim of interference against CSX Transportation, Inc. brought in Complaint "A." A hearing will be scheduled on Hoerig's interference claim.
7. Defendants' Motion For Summary Judgment On The Claims Of Plaintiff Anita Humphrey In Second Amended Complaint "A" (Doc. 139) is GRANTED to the extent that Humphrey's claims brought in Complaint "A" against defendants CSX Intermodal, *1363 Inc. and CSX Corporation are DISMISSED WITH PREJUDICE for lack of subject matter jurisdiction; GRANTED as to Humphrey's claim of retaliation under the Family Medical Leave Act against defendant CSX Transportation, Inc.; and DEFERRED as to Humphrey's claim of interference against CSX Transportation, Inc. brought in Complaint "A." A hearing will be scheduled on Humphrey's interference claim.
8. Defendants' Motion For Summary Judgment On The Claim Of Plaintiff Deanna Miller In Second Amended Complaint "A" (Doc. 143) is GRANTED to the extent that Miller's claims brought in Complaint "A" against defendants CSX Intermodal, Inc. and CSX Corporation are DISMISSED WITH PREJUDICE for lack of subject matter jurisdiction; GRANTED as to Miller's claim of retaliation under the Family Medical Leave Act against defendant CSX Transportation, Inc. and DEFERRED as to Miller's claim of interference against CSX Transportation, Inc. brought in Complaint "A." A hearing will be scheduled on Miller's interference claim.
9. Defendants' Motion For Summary Judgment On The Claims Of Plaintiff Muzette Robinson In Second Amended Complaint "A" (Doc. 145) is GRANTED to the extent that Robinson's claims brought in Complaint "A" against defendants CSX Intermodal, Inc. and CSX Corporation are DISMISSED WITH PREJUDICE for lack of subject matter jurisdiction; and GRANTED as to all claims brought by Robinson in Complaint "A" against CSX Transportation, Inc.
10. Defendants' Motion For Summary Judgment On The Claim Of Plaintiff Kathy Warren In Second Amended Complaint "A" (Doc. 151) is GRANTED to the extent that Warren's claims brought in Complaint "A" against defendants CSX Intermodal, Inc. and CSX Corporation are DISMISSED WITH PREJUDICE for lack of subject matter jurisdiction; and GRANTED as to all claims brought by Warren in Complaint "A" against CSX Transportation, Inc.
11. This case is set for HEARING on November 15, 2010 at 2:00 p.m. before the undersigned, in Courtroom 10D, Tenth Floor, United States Courthouse, 300 North Hogan Street, Jacksonville, Florida[28] on the following pending matters:
A. Defendants' Motion For Sanctions Against Plaintiff Jennifer Saul And Her Counsel Gregory G. Paul Pursuant To Fed. R. Civ. P. 11 And 28 U.S.C. § 1927 (Doc. 186);
B. Defendants' Motion For Summary Judgment On The Claim Of Plaintiff Marcie Hoerig In Second Amended Complaint (Doc. 135) as to Hoerig's claim of interference against CSX Transportation, Inc. brought in Complaint "A";
C. Defendants' Motion For Summary Judgment On The Claims Of Plaintiff Anita Humphrey In Second Amended Complaint (Doc. 139) as to Humphrey's claim of interference against CSX Transportation, Inc. brought in Complaint "A";
*1364 D. Defendants' Motion For Summary Judgment On The Claim Of Plaintiff Deanna Miller In Second Amended Complaint (Doc. 143) as to her claim of interference against CSX Transportation, Inc. brought in Complaint "A";
E. The STATUS of plaintiff Billy Knowles' claims.
12. The Clerk should withhold entry of judgment until further order of the Court.
NOTES
[1] This case was previously divided into Complaint "A" and Complaint "B." The Court here addresses only those claims brought in Complaint "A." (Docs. 49, 50.) The plaintiffs in Complaint "A" are Michael Andrews, James H. Adams, Charisse Bell, Juliet Christie, Harold Fisher, Marcie Hoerig, Tammy Howard, Anita Humphrey, Billy Knowles, Lettie McClain, Deanna Miller, Rodney Puckett, Muzette Robinson, Jennifer Saul, Tracey Thompson, and Kathy Warren. The named defendants are CSX Transportation, Inc. ("CSXT"), CSX Intermodal Inc. ("CSXI"), and CSX Corporation ("CSXC").
[2] Consistent with summary judgment practice, the facts stated are either undisputed or are stated in a light most favorable to the plaintiffs. See Galvez v. Bruce, 552 F.3d 1238, 1239 (11th Cir.2008); White v. Mercury Marine, Div. of Brunswick, Inc., 129 F.3d 1428, 1430 (11th Cir.1997).
In these cases, the parties do not dispute that the individual plaintiffs are eligible employees, 29 U.S.C. § 2611(2) and that the employer of each plaintiff is an eligible private sector employer. 29 U.S.C. § 2611(4).
[3] Defendants CSXT and CSXC are entitled to judgment as a matter of law on Andrews' claim because they were not Andrews' employer. 29 U.S.C. § 2611(4).
[4] The Employee Discipline Report for Andrews also indicates that Andrews was disciplined between 2002 and 2005 six additional times for such infractions as "unlawful harassment," "unsafe conduct," "misrepresentation of facts," and "failure to protect assignment." (Doc. 130-1 at 54-55 (Andrews Dep. Ex. 1).)
[5] Andrews' supervisor John Featherston testified that the company required employees to provide a doctor's note indicating they had been seen and treated by a physician and that the employee was ready to return to work. "We do not pry into the nature of his illness." (Doc. 130-2 at 37 (Andrews Dep. Ex. 15).)
[6] Andrews testified that his absence from July 28 through August 1, 2005 was due to a "spider bite" (Doc. 130-1 at 43-44 (Andrews Dep. at 108-09); Doc. S-5 (Andrews Dep. Ex. 14)); Andrews' absence for a "family emergency" on August 22, 2005 was because his nephew had stolen his car keys (Doc. 130-2 at 45 (Andrews Dep. Ex. 15)); Andrews' absence on September 13 and tardiness on September 14, 2005 was due an anxiety attack and a doctor's appointment the next day which Andrews does not recall telling his supervisor about, the doctor's note makes no reference to Andrews' medical condition, and Andrews himself said that his condition was "nothing that would make me disabled or not be able to perform my job" (Doc. 130-1 at 30-31, 45-46 (Andrews Dep. at 75-76, 111-12); Doc. S-5 (Andrews Dep. Ex. 14)); Andrews' absence on September 27, 2005 was due to "car trouble" because his car was "in the shop" and Andrews stated he was unable to find a ride to work (Doc. 130-2 at 48 (Andrews Dep. Ex. 15)); Andrews' absence on November 30 to December 2, 2005 was due to "bronchitis" that was "going around;" he said that the symptoms went away after he took antibiotics (Doc. 130-1 at 47-48 (Andrews Dep. at 114-15)); Andrews was tardy on December 6, 2005 because of a doctor's appointment, though Andrews never provided his supervisor any additional information about the appointment (Doc. S-5 (Andrews Dep. Ex. 14); Doc. 130-2 at 49 (Andrews Ex. 15)); Andrews' absence from December 7 through 9, 2005 was to have a benign growth removed from his groin on an out-patient basis in his doctor's office (for which he had never previously missed work) (Doc. 130-1 at 49-51 (Andrews Dep. at 116-18); Doc. S-5 (Andrews Dep. Ex. 14)); Andrews' absence on December 29 and 30, 2005 was due to what he believes was a relapse of bronchitis. (Doc. 130-1 at 52 (Andrews Dep. at 119); Doc. S-5 (Andrews Dep. Ex. 14); see also Doc. 178 at 2.)
[7] There is no evidence that Andrews was "certified for intermittent FMLA leave" at "all times relevant," as alleged in paragraph 25 of the Second Amended Complaint. (See Doc. 50 at 5 (Compl. ¶ 25).)
[8] The Department of Labor's FMLA regulations were revised, effective January 16, 2009. See 73 Fed.Reg. 67934 et seq. (Nov. 17, 2008). The revised regulations were not in effect at any time relevant to plaintiffs' claims and when their lawsuit was filed in 2006. Reference to regulations are to those published in the July 1, 2006 Code of Federal Regulations. The parties do not dispute the reference to the 2006 regulations.
[9] Andrews, in his response to defendants' motion for summary judgment, for the first time, contends that his FMLA claim is based on both retaliation and interference pursuant to 29 U.S.C. § 2615(a). (Doc. 178 at 5, 12.) Plaintiff's complaint does not allege a retaliation claim. Rather, Andrews alleges that defendant "terminated plaintiff Andrews on February 23, 2006; due to his excessive absence failures" and that defendant "failed to inform plaintiff Andrews of his eligibility for FMLA in due course, allowing him to be subject to the absenteeism policy, and leading to his termination." (Compl. ¶¶ 33, 36.) Andrews cannot raise this new unpleaded claim in his response to a motion for summary judgment without first obtaining leave to amend his complaint. See Gilmour v. Gates, McDonald and Co., 382 F.3d 1312, 1315 (11th Cir.2004). Given the issues as framed by plaintiff in his complaint, the Court does not consider plaintiff's argument that he was terminated in retaliation for exercising his FMLA rights in February 2006.
[10] In his complaint, Andrews makes reference to 2003 positive drug test, alleging that he had "contacted" defendant "regarding his serious medical condition previous to this time, when plaintiff Andrews had been pulled out of service due to a medication issue." (Compl. ¶ 31.) Andrews does not argue in his response to CSXI's motion for summary judgment that the 2003 positive drug test provides CSXI with notice of his need for FMLA leave in 2005, abandoning this argument.
[11] Defendants CSXI and CSXC are entitled to judgment as a matter of law on Hoerig's claims because they were not Hoerig's employer. 29 U.S.C. § 2611(4).
[12] McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973).
[13] She was later reinstated to her position without back pay.
[14] In view of the standards and burdens of proof on the parties set forth by the Eleventh Circuit in Strickland, 239 F.3d at 1206-1209, granting defendants' motion for summary judgment on Hoerig's FMLA retaliation claim is not inconsistent with denying summary judgment on her FMLA interference claim arising out of the same facts.
[15] Defendants CSXI and CSXC are entitled to judgment as a matter of law on Humphrey's claims because they were not Humphrey's employer. 29 U.S.C. § 2611(4).
[16] Other than CSXT's letter certifying Humphrey for intermittent leave, approving leave "for episodes and follow-up office visits . . . [and] an 8-hour work restriction," (Doc. 140-2 at 41 (Humphrey Dep. Ex. 29)), there is no evidence in the record as to the basis for the medical FMLA certification or exactly what Humphrey's "serious medical condition" was on the date in question.
[17] Defendants CSXI and CSXC are entitled to judgment as a matter of law on Miller's claims because they were not Miller's employer. 29 U.S.C. § 2611(4).
[18] Miller took FMLA leave from her regularly scheduled shifts from December 30, 2004 through January 3, 2005, and January 8-10, 14, 2005 for "anxiety and depression and subsequent exacerbations of her conditions." (Doc. 179 at 5, 13 (with citations to record).)
[19] Miller's contention that CSXT failed to approve or deny the certification when it was presented by Miller's union representative at a hearing prior to CSXT's decision to terminate Miller is unavailing; the investigative hearing on the charge against Miller not was conducted until April 7, 2005. (Docs. 143 at 8; 179 at 5, 14.)
[20] Defendants CSXI and CSXC are entitled to judgment as a matter of law on Robinson's claims because they were not Robinson's employer. 29 U.S.C. § 2611(4).
[21] Robinson was disciplined for claiming FMLA leave to "mark-off" from assigned overtime shifts on May 11, 13, 15, 20, and 22, 2005. CSXT cites to Robinson's April 2005 medical certification form in which her health care provider indicated Robinson would require intermittent FMLA leave for monthly doctor appointments for her serious health condition and that she was not presently incapacitated nor would she have episodes of incapacity. (Docs. 145 at 4; 175 at 2; S-11.) Robinson cites to the same April 2005 medical certification form in which the health care provider checks that it was necessary for Robinson to work intermittently as a result of her condition. (Docs. 175 at 2; S-11.) Robinson was approved for FMLA leave for "monthly follow-up office visits." (Doc. 146-2 at 22 (Robinson Dep. Ex. 5.)) The parties thus dispute whether or not Robinson's absences were contemplated by her medical certification in effect at the time. Robinson submitted a new medical certification form on June 7, 2005 in which her health care provider stated that Robinson would experience episodes of incapacity; "Pt. Currently having 3-4 episodes per month." (Doc. S-11.) Based on the later form, CSXT approved subsequent intermittent FMLA leave for episodes and doctor appointments.
[22] Because Robinson has not established that there are "blanket" or "wholesale" policies of CSXT which have been shown to violate the FMLA to the detriment of employees either now or in the future, this case is readily distinguishable from the case Harcourt v. Cincinnati Bell Tel. Co., 383 F.Supp.2d 944 (S.D.Ohio 2005) cited by Robinson.
[23] Defendants CSXI and CSXC are entitled to judgment as a matter of law on Warren's claims because they were not Warren's employer. 29 U.S.C. § 2611(4).
[24] Warren had submitted a medical certification from her health care provider dated May 3, 2006 saying that Warren suffered from "fatigue, anemia, headaches, anxiety" one to two times per month, each episode lasting one to two days. (Doc. S-13.)
[25] In her brief, Warren admitted the defendants' statement of fact that "Ms. Warren used FMLA leave for her own serious health condition at various times, including on May 4, June 9, June 13, June 18, and June 22-23, 2006. However, she also regularly used sick (non-FMLA) leave during that same period, including on May 15, May 25, June 5, June 6, June 7, and June 8, 2006." (Doc. 151 at 4 (citing Docs. 152-1 at 29-31, 67; S-13 (Warren Dep. at 60, 68, 71 & Exs. 10, 23); 176 at 2.))
[26] "Kathy" is plaintiff Kathy Warren; "Caller 1" is CMC administrative caller Nika Green. (Docs. 151 at 5; 176 at 2.)
[27] In Scott, the Supreme Court found that a videotape of a motorist's encounter with police officersa high-speed car chase which concluded with the police officer ramming the motorist's carso contradicted the motorist's version of events in his civil rights case alleging excessive force, that the court could not rely upon the motorist's version of events in ruling on defendants' motion for summary judgment. 550 U.S. at 378-81, 127 S.Ct. 1769.
[28] Photo identification must be presented to court security officers upon request. Although cell phones and laptop computers are generally not permitted in the Courthouse, counsel will be permitted to bring those items into the Courthouse for purposes of this hearing by presenting a copy of this Order to Court Security Officers. All cell phones must remain off while Court is in session. Counsel may also store such items in the first floor lockers provided by the Federal Bar Association. Locker access is available upon presentation to Court security Officers of a Florida Bar card or Order of special admission pro hac vice.
| {
"pile_set_name": "FreeLaw"
} |
944 F.2d 243
35 Soc.Sec.Rep.Ser. 11, Unempl.Ins.Rep. (CCH) P 16289A,2 NDLR P 121
Rayfield CARRIER, Plaintiff-Appellant,v.Louis SULLIVAN, M.D., Secretary of Health and HumanServices, Defendant-Appellee.
No. 91-4136
Summary Calendar.United States Court of Appeals,
Fifth Circuit.Oct. 11, 1991.
Richard J. Clarkson, Chris Quinn, Reaud, Morgan & Quinn, Beaumont, Tex., for plaintiff-appellant.
Bob Wortham, U.S. Atty., Steven M. Mason, Asst. U.S. Atty., Tyler, Tex., Joseph B. Liken, Dallas, Tex., Karen J. Sharp, Office of the General Counsel, Social Sec. Admin., Dept. of Health and Human Services, Baltimore, Md., for defendant-appellee.
Appeal from the United States District Court for the Eastern District of Texas.
Before REYNALDO G. GARZA, POLITZ and DUHE, Circuit Judges.
PER CURIAM:
1
Rayfield Carrier challenges a decision by the Secretary of Health and Human Services to deny his claim for social security disability and supplemental security income benefits. We find substantial evidence in support of the Secretary's decision and affirm.
2
PROCEDURAL HISTORY.
3
Plaintiff-Appellant ("plaintiff" or "Carrier") applied to the Secretary of the Department of Health and Human Services ("Secretary" or "defendant") for disability benefits on February 3, 1984, alleging that pain, muscle weakness and lack of motor control prevented him from engaging in gainful employment since January of 1983. This application was denied at the first two levels of administrative review. Upon plaintiff's request, an administrative law judge ("ALJ") conducted a hearing and issued a decision denying benefits on April 22, 1985. The Appeals Council denied plaintiff's request for review.
4
On August 27, 1985, plaintiff filed a complaint in the District Court. The District Court granted defendant's motion for summary judgment. Plaintiff appealed to this Court, which dismissed the appeal for lack of a separate judgment on October 7, 1989. Upon plaintiff's motion, the District Court entered a separate judgment for the Secretary on February 8, 1991. Plaintiff now appeals the adverse judgment to this Court.
FACTS.
5
Plaintiff applied for benefits in February, 1984, when he was forty-three years of age. He claimed that he had worked as a roofer until early 1983, when he began to suffer from pain and spasms due to a pinched nerve in his neck. He further testified that he could not stand for more than five minutes without suffering from lower back pain. His wife and another witness corroborated his testimony.
6
In February, 1984, plaintiff was hospitalized for myelopathy and had a spinal fusion performed at three levels. His discharge summary indicated that his leg strength and sensation improved, while his spasms had decreased. The prognosis was "fair to good." By August of 1984, plaintiff's physician noted that plaintiff was "getting better" and had improved strength, but that his gait remained spastic and the prognosis for recovery was not good. Plaintiff took medication for blood pressure and fluid retention, but was not under medication for pain.
7
At the request of the Social Security Administration, M.Y.I. Beck, M.D., examined plaintiff in October, 1984, and reported that the operation had apparently stopped the progression of plaintiff's myelopathy. He indicated that plaintiff was alert and oriented and that he found no evidence of muscle atrophy, but that Carrier continued to suffer from myelopathy, clonus and weakness on his left side.
8
A State Agency physician reviewed all of this evidence in November, 1984, and concluded that plaintiff did not have an impairment or combination of impairments which would meet or equal an Appendix 1 listing.1 The physician determined moreover that plaintiff's condition would continue to improve and that within 12 months he would be able to perform jobs which required a medium level of exertion, and would be able to return to his former occupation as a roofer.
9
Notwithstanding the findings of the State Agency physician, the ALJ determined that plaintiff could not perform medium-level jobs and would not be able to return to his former occupation, but that he would be able to perform light-level jobs available in the national economy. He therefore found plaintiff not disabled in his April, 1985 decision. The District Court held that no basis existed for overturning the ALJ's decision.
10
Plaintiff filed another application and was found to be disabled by the Social Security Administration in a notice dated March 4, 1989. Plaintiff received an award of benefits retroactive to April 23, 1985, the day after the ALJ's decision in our case. Defendant noted that administrative regulations would not allow it to find disability onset prior to that date. At issue in this case are retroactive payments for claimed disability prior to April 23, 1985.
11
ANALYSIS.
12
I. The ALJ Properly Developed the Record.
13
Plaintiff, who has a fifth grade education and was not represented by counsel at the hearing, claims that the ALJ failed to fulfill his "special duty" to develop the record "when an unrepresented claimant unfamiliar with the hearing procedures appears before him." Kane v. Heckler, 731 F.2d 1216, 1219 (5th Cir.1984) (citations omitted). In Kane, we remanded a negative determination to the Secretary because
14
[t]he record disclose[d] no question by the ALJ concerning whether or not Kane desired counsel. The hearing lasted five minutes and its transcript consist[ed] of four pages.... The ALJ asked only one perfunctory question about Kane's subjective complaints.
15
Id. at 1218.
16
In James v. Bowen, 793 F.2d 702 (5th Cir.1986), however, we held that the hearing before the ALJ was adequate and was distinguishable from that in Kane because it lasted for ten minutes and the ALJ questioned the applicant extensively about his condition. The hearing in the case at bar lasted for 26 minutes and yielded 16 pages of testimony. The ALJ reminded plaintiff that he could be represented by counsel if he so desired. The ALJ questioned plaintiff extensively about his condition, treatment which he had received and what he had been told about his condition by his physicians. He also questioned plaintiff about medication that he was taking as well as his daily routines and how his illness had affected them. Moreover, he took testimony from plaintiff's wife and a friend of plaintiff's. If the hearing in James sufficed, the hearing in this case certainly did. Therefore, we find no merit in plaintiff's allegation that the ALJ failed to adequately develop the record.
17
II. The Secretary's Decision is Supported by Substantial Evidence and is in Accord with Relevant Legal Standards.
18
Judicial review of the Secretary's final decision of not disabled is limited under 42 U.S.C. § 405(g) to two inquiries: (1) whether substantial evidence of record supports the Secretary's decision, and (2) whether the decision comports with relevant legal standards. Villa v. Sullivan, 895 F.2d 1019, 1021 (5th Cir.1990). "Substantial evidence is more than a scintilla, less than a preponderance, and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Kane v. Heckler, 731 F.2d at 1219 (citing Richardson v. Perales, 402 U.S. 389, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971)).
19
The legal standard for determining disability under Titles II and XVI of the Social Security Act is whether the claimant is unable to perform substantial gainful activity for at least twelve consecutive months because of a medically determinable impairment. 42 U.S.C. §§ 423(d)(1)(A), 1382c(a)(3)(A). In determining whether or not a claimant is capable of performing substantial gainful activity, the Secretary uses a five-step sequential procedure set forth in 20 C.F.R. § 404.1520(b)-(f) (as paraphrased in Wren v. Sullivan, 925 F.2d 123, 125 (5th Cir.1991)):1. An individual who is working and engaging in substantial gainful activity will not be found disabled regardless of the medical findings.
20
2. An individual who does not have a "severe impairment" will not be found to be disabled.
21
3. An individual who "meets or equals a listed impairment in Appendix 1" of the regulations will be considered disabled without consideration of vocational factors.
22
4. If an individual is capable of performing the work he has done in the past, a finding of "not disabled" must be made.
23
5. If an individual's impairment precludes him from performing his past work, other factors including age, education, past work experience, and residual functional capacity must be considered to determine if other work can be performed.
24
The ALJ found plaintiff not disabled at step five, and found that, while Carrier could no longer perform his past work, that there was light work in the economy which he would be able to perform. See 20 C.F.R. §§ 404.1520(f), 416.920(f).
25
A. Substantial Evidence Supports the Secretary's Decision that Plaintiff did not Suffer from an Appendix 1 Impairment.
26
Plaintiff contends that substantial evidence does not support the ALJ's determination that Carrier did not suffer from an Appendix 1 impairment which would have mandated a finding of disability at step three of the five-step procedure. This would have required a finding that he had a vertebrogenic disorder which produced or was expected to produce the following symptoms for twelve consecutive months:
27
1. Pain, muscle spasm, and significant limitation of motion in the spine; and
28
2. Appropriate radicular distribution of significant motor loss with muscle weakness and sensory and reflex loss.
29
20 C.F.R. Part 404, Subp. P, App. 1, § 1.05(C).
30
This court has found that "an ALJ may properly rely on a non-examining physician's assessment when ... those findings are based upon a careful evaluation of the medical evidence and do not contradict those of the examining physician." Villa v. Sullivan, 895 F.2d at 1024. Nothing in the reviewing physician's report conflicts with the findings of Dr. Beck, defendant's designated examining physician. The Court notes that the reviewing physician's prognosis for recovery seems more optimistic than that of plaintiff's treating physician, who stated merely that Carrier was "getting better." In stating that plaintiff's prognosis was not good, however, the treating physician may well have been speaking of the possibility of full recovery. See Moore v. Sullivan, 919 F.2d 901, 905 (5th Cir.1990) (ALJ's decision of "not disabled" supported by substantial evidence because, inter alia, the treating physician's opinion that claimant was unable to work did not explain whether this referred to claimant's previous work or to work in general). The ALJ did not adopt the reviewing physician's determination that plaintiff would recover to the point that he would be able to perform medium-level work and to return to his former occupation as a roofer. Therefore, to the extent that the reviewing physician's determination may have contradicted the prognosis of plaintiff's physician, the ALJ did not adopt it. That much of the reviewing physician's determination that the ALJ did adopt does not contradict the findings of any examining physician and provides substantial evidence for the ALJ's determination that plaintiff did not suffer from an Appendix 1 impairment.
31
B. The ALJ did not Give Insufficient Weight to Plaintiff's Subjective Complaints of Pain.
32
Plaintiff contends that the ALJ gave insufficient weight to plaintiff's subjective complaints of pain. We do not agree. The record contains no indication that plaintiff ever complained of pain to any of his examining physicians. Nor did he take medication for pain.2 Nevertheless, the ALJ did credit Carrier's assertion that he suffered discomfort. The ALJ found that "[t]he claimant undoubtedly experiences some pain, but the evidence fails to establish that it is of such severity and duration as to interfere with his ability to perform basic work-related activities of a light and sedentary nature."
33
It is, of course, improper for an ALJ not to consider a claimant's subjective complaints of pain. It is also improper for an ALJ to make no finding as to a claimant's subjective complaints of pain if, if the claimant were believed, said claimant would be entitled to benefits. See Scharlow v. Schweiker, 655 F.2d 645 (5th Cir.1981) (negative determination reversed and remanded because ALJ made no findings as to claimant's subjective complaints of pain). This, however, is not such a case. The ALJ made a finding as to plaintiff's subjective complaints and in fact credited them, but not to the extent that plaintiff wished. "How much pain is disabling is a question for the ALJ since the ALJ has primary responsibility for resolving conflicts in the evidence." Id. at 648. We may not reweigh the evidence. Villa v. Sullivan, 895 F.2d at 1022 (citations omitted).
34
Finally, the Court notes that it appears that plaintiff never did recover sufficiently to rejoin the work force and was later found to be disabled. Of course, the Secretary cannot rely upon a physician's prognosis of recovery if such prognosis has already proven to be incorrect by the time that the Secretary issues a final decision. See Taylor v. Bowen, 782 F.2d 1294 (5th Cir.1986). This, however, is not such a case. We are constrained by the record which was available to the ALJ. We cannot compare the ALJ's foresight with our own hindsight.
35
CONCLUSIONS.
36
Much as we sympathize with plaintiff, we cannot agree that the ALJ failed either to compile a sufficient record or to back up his reasoning with substantial evidence. Therefore, the District Court's summary judgment in favor of the Secretary is AFFIRMED.
1
Appendix 1 impairments are specific maladies which automatically entitle claimants, who are not gainfully employed, to benefits. See 20 C.F.R. Part 404, Subp. P, App. 1, § 1.05(C)
2
We have recently found, in a case involving the termination of benefits to a plaintiff whom the Secretary determined to be no longer disabled, that the decision to forego medication for pain is, in conjuntion with medical reports, a relevant factor which may be considered by the ALJ. Griego v. Sullivan, 940 F.2d 942, 945 (5th Cir.1991) (per curiam)
| {
"pile_set_name": "FreeLaw"
} |
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
JOHN-PIERRE BANEY,
Petitioner,
v.
MERIT SYSTEMS PROTECTION BOARD,
Respondent.
__________________________
2010-3184
__________________________
Petition for review of the Merit Systems Protection
Board in DA3443100262-I-1.
__________________________
Decided: February 15, 2011
___________________________
JOHN-PIERRE BANEY, Seagoville, Texas, pro se.
STEPHANIE M. CONLEY, Attorney, Office of General
Counsel, Merit Systems Protection Board, of Washington,
DC, for respondent. With him on the brief were JAMES M.
EISENMANN, General Counsel, and KEISHA DAWN BELL,
Deputy General Counsel.
__________________________
BANEY v. MSPB 2
Before BRYSON, DYK, and PROST, Circuit Judges.
PER CURIAM.
DECISION
John-Pierre Baney appeals a decision of the Merit
Systems Protection Board dismissing his appeal for lack
of jurisdiction. Because Mr. Baney failed to allege claims
falling within the Board’s jurisdiction, we affirm.
BACKGROUND
Mr. Baney works for the Bureau of Prisons at a facil-
ity in Seagoville, Texas. On February 16, 2010, he filed
an appeal with the Board alleging retaliation, breach of
contract, and workplace violence. In his appeal, he indi-
cated that he had filed two other complaints concerning
the same underlying events—an Individual Right of
Action (“IRA”) complaint that he filed with the Office of
Special Counsel (“OSC”) and a complaint under the
Uniformed Services Employment and Reemployment
Rights Act (“USERRA”) that he filed with the Department
of Labor. He did not provide a copy of either complaint,
and he did not provide any details about the events un-
derlying his claims on appeal.
The administrative judge who was assigned to the
case ordered Mr. Baney to show why the Board had
jurisdiction over the appeal. Prior to the due date for Mr.
Baney to respond to the show cause order, the adminis-
trative judge issued a second order requiring Mr. Baney
to submit a copy of his OSC complaint, to identify the
actions that he claimed were taken against him in retalia-
tion for his whistleblowing disclosures and the person
3 BANEY v. MSPB
who took those actions, and to explain how his disclosures
contributed to the agency’s decision to retaliate against
him. For the USERRA claim, the administrative judge
directed Mr. Baney to disclose whether he had chosen not
to file a complaint with the Secretary of Labor or had
opted to file a complaint before the Secretary that was
still pending. The administrative judge also ordered Mr.
Baney to identify each action that he alleged was taken
based on discrimination because of his status as a vet-
eran.
Mr. Baney did not comply with any of the administra-
tive judge’s directives. Instead, he filed a motion for a
formal hearing, asserting that he had an “unconditional
right to a hearing” based on Baney v. Department of
Justice, 109 M.S.P.R. 242, 249 (2008). He did not allege
any specific facts about the retaliatory or discriminatory
actions purportedly taken against him, but alluded to
several additional acts of alleged misconduct by the
agency, including obstruction of justice, perjury, conflict of
interest, and hostile environment based on retaliation.
He provided no details regarding the events underlying
these allegations.
The administrative judge dismissed Mr. Baney’s ap-
peal for lack of jurisdiction because Mr. Baney had not
identified a law, rule, or regulation that would give the
Board jurisdiction over his appeal. Mr. Baney petitioned
the full Board for review, alleging that he had been im-
properly denied a hearing. He also alleged specific facts
about his breach of contract action, claiming that the
agency had retaliated against him for filing appeals by
revoking 13 days of military leave he had won in an
earlier case before the Board.
BANEY v. MSPB 4
The Board denied his petition for review. The Board
explained that Mr. Baney had not provided any of the
information or documentation necessary to show that the
Board had jurisdiction over his claims. Rejecting Mr.
Baney’s contention that he had an unconditional right to
a hearing, the Board noted that a USERRA claimant’s
right to a hearing attaches only after the claimant dem-
onstrates the Board has jurisdiction over his appeal. The
Board stated that it would not consider the specific alle-
gations of agency misconduct that were raised for the first
time in his petition for review of the administrative
judge’s decision. Mr. Baney now petitions for review by
this court.
DISCUSSION
Mr. Baney contends that, as a USERRA claimant, he
had an unconditional right to a hearing before the Board
based on our decision in Kirkendall v. Department of the
Army, 479 F.3d 830 (Fed. Cir. 2007) (en banc). Although
this court held in Kirkendall that USERRA claimants
have the right to a hearing because they are “appeals”
under 5 U.S.C. § 7701, it did not hold that the right to a
hearing attaches simply because a claimant files a claim
with the Board that he denominates as a USERRA claim.
Because the right to a hearing is based on section 7701,
that right only attaches after a USERRA claimant makes
a non-frivolous allegation of Board jurisdiction. Downs v.
Dep’t of Veterans Affairs, 100 M.S.P.R. 139, 148 (2008). 1
1 Mr. Baney has made the same argument to this
court before, and the court has twice rejected it on the
same grounds. See Baney v. Merit Sys. Prot. Bd., 360 Fed.
Appx. 119, 120 (Fed. Cir. 2010); Baney v. Dep’t of Justice,
327 Fed. Appx. 895, 900 (Fed. Cir. 2009).
5 BANEY v. MSPB
Mr. Baney has failed to satisfy the threshold showing
necessary to show that the Board has jurisdiction over his
USERRA claim. He has provided no details about his
claim. He has not described the protected right or benefit
that he was allegedly denied because of his military
status. 2 He did not respond to the administrative judge’s
inquiries as to whether he had pursued the same claim
with the Department of Labor or whether any such claim
before the Department of Labor was still pending, issues
that affect the Board’s jurisdiction. See 38 U.S.C. §
4324(b); Becker v. Dep’t of Veterans Affairs, 107 M.S.P.R.
327, 333-34 (2007) (USERRA complainant who files a
complaint with the Department of Labor pursuant to 38
U.S.C. § 4322 must exhaust administrative remedies
before initiating a proceeding before the Board). Because
Mr. Baney failed to respond to the administrative judge’s
inquiries directed to whether the Board had jurisdiction
over his USERRA claim, we affirm the Board’s decision
dismissing his claim for lack of jurisdiction.
We also affirm the Board’s decision dismissing Mr.
Baney’s IRA appeal without a hearing. To establish that
the Board possessed jurisdiction to consider an IRA
appeal, Mr. Baney had to demonstrate that he had ex-
hausted his administrative remedies before the OSC and
had to make non-frivolous allegations that (1) he engaged
in whistleblowing activity by making a protected disclo-
sure and (2) the disclosure was a contributing factor in
the agency’s decision to take or fail to take a personnel
action as defined under 5 U.S.C. § 2302(a). Yunus v. Dep’t
of Veterans Affairs, 242 F.3d 1367, 1371 (Fed. Cir. 2001).
2 Like the Board, we do not consider Mr. Baney’s
belated assertion that the agency deprived him of 13 days
of military leave, a contention that was raised for the first
time in his petition for review before the full Board.
BANEY v. MSPB 6
If the employee fails to make non-frivolous allegations of
whistleblower activity and retaliation, the Board is not
required to hold a hearing on his claim. Kahn v. Dep’t of
Justice, 528 F.3d 1336, 1341 (Fed. Cir. 2008).
In particular, Mr. Baney failed to provide a copy of his
OSC complaint, despite the administrative judge’s explicit
requirement that he do so. His failure to respond to the
administrative judge’s inquiry as to the OSC proceedings
made it impossible for the administrative judge to verify
the Board’s jurisdiction, which attaches only after an IRA
claimant has exhausted his administrative remedies. See
Yunus, 242 F.3d at 1371. He has also failed to identify
the actions allegedly taken against him or the protected
disclosures he claims to have made that led to those
actions. In light of Mr. Baney’s complete failure to comply
with the administrative judge’s orders directed at deter-
mining whether the Board had jurisdiction over his
appeal, we hold that the Board properly dismissed his
IRA claim for lack of jurisdiction.
AFFIRMED
| {
"pile_set_name": "FreeLaw"
} |
NUMBER
13-05-171-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
________________________________________________________
HERACLIO FLORES, ET AL., Appellants,
v.
MELVIN
JUSTIN, Appellee.
_________________________________________________________
On appeal from County
Court at Law No. 5
of Hidalgo
County, Texas.
_________________________________________________________
MEMORANDUM
OPINION
Before Justices
Rodriguez, Castillo, and Garza
Memorandum
Opinion Per Curiam
Appellants, HERACLIO FLORES, ET AL., perfected an appeal from a judgment
entered by County Court at Law
No. 5 of Hidalgo County, Texas, in cause number CL-32,336-E. After the
record and appellants= brief were filed, the
parties filed a joint motion to dismiss the appeal. In the motion, the parties state that they
have settled all claims and controversies between them. The parties request that this Court dismiss
the appeal.
The Court, having
considered the documents on file and the joint motion to dismiss the appeal, is
of the opinion that the motion should be granted. The joint motion to dismiss is granted, and
the appeal is hereby DISMISSED.
PER CURIAM
Memorandum Opinion delivered and
filed this the 11th day of May, 2006.
| {
"pile_set_name": "FreeLaw"
} |
543 U.S. 978
IACABONIv.UNITED STATES.
No. 04-183.
Supreme Court of United States.
November 8, 2004.
1
C. A. 1st Cir. Certiorari denied. Reported below: 363 F. 3d 1.
| {
"pile_set_name": "FreeLaw"
} |
255 B.R. 336 (2000)
MASSACHUSETTS HOUSING FINANCE AGENCY, Appellant,
v.
Oteldino Brito EVORA; Marie G. Fidalgo Evora, Appellees.
No. CIV. A. 99-12669-WGY.
United States District Court, D. Massachusetts.
November 13, 2000.
*337 *338 Deirdre Keady, Harmon Law Offices, Newton, for Massachusetts Housing Finance Agency, Appellants.
Pamela S. Holleman, Sullivan & Worcester, Boston, for Oteldino Brito Evora, A Fidalgo Evora, Appellees.
MEMORANDUM
YOUNG, Chief Judge.
I. INTRODUCTION
This appeal results from the red hot housing market that has gripped the Boston area in recent years. The Appellant, Massachusetts Housing Finance Agency (the "Finance Agency") appeals the decision of the Bankruptcy Court denying its motion to revalue its secured claim to reflect the rapid appreciation of a home in which it has a security interest. The Appellee, Oteldino Brito Evora and Maria G. Evora (collectively the "Evoras") filed a petition for Chapter 13 relief in 1997 at which time their residence (the "Property") was valued at $80,000. The Finance Agency's allowed secured claim in the Property was properly limited to the then undisputed value. Within two years, however, the value had doubled. The Finance Agency seeks to benefit from the appreciation and asks that its allowed secured claim be redetermined in light of the new valuation.
II. FACTUAL BACKGROUND
Because so much in bankruptcy depends on timing, the procedural and factual history will be provided in chronological order. While the following rendition is dry, at best, it does offer a complete picture of the proceedings that led to this appeal.
On May 23, 1997, the Evoras filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. With a foreclosure sale pending, on August 27, 1997 the Evoras also filed a petition for relief under Chapter 13 of the Bankruptcy Code. Serial bankruptcy filings of this sort are not uncommon and are referred to in bankruptcy lingo as a "Chapter 20."
Pursuant to Section 727 of the Bankruptcy Code, the Evoras were discharged of all unsecured debt contained in their Chapter 7 petition for relief on September 3, 1997. Two days later, the Evoras filed their Chapter 13 plan (the "Plan") in which they proposed to pay the Finance Agency, their only creditor, a total of $99,640.20 at the rate of $1,660.67 per month over 60 months. The Plan valued the Property, in which the Finance Agency held a security interest, at $80,000. On September 9, *339 1997, the Finance Agency filed a proof of claim for a secured claim in the amount of $157,413.17 and arrearage as of August 27, 1997, of $18,861.20.
On September 12, 1997 the Evoras filed motions requesting the Bankruptcy Court to determine the extent of the Finance Agency's secured status and to value the Property at $80,000. In the absence of any objection by the Finance Agency, which agreed with the valuation, the Bankruptcy Court granted the Evoras' motions on October 24, 1997. Three days later, the Chapter 13 Trustee sought an interim order to begin disbursement under the Plan, which was subsequently granted.
An order confirming the Plan was issued on August 11, 1998 reflecting an effective date for the Plan of September 1, 1997.[1] The Plan stated:
The secured claim of Mass Housing Finance Agency is modified as follows: The Creditor shall retain its lien on 17 Payson Avenue, Dorchester, MA until discharge in this case. The Court has determined that the value of the property and the secured claim is $80,000. The balance of the claim was discharged in a prior Chapter 7 case 97-15022. Debtor shall pay $99,640.20 through the plan which is the secured claim with 9% interest.
The Plan also vested the Property in the Evoras. Throughout the Plan, the Evoras complied with the payment schedule and it proceeded without incident.
Then, on September 3, 1999, the Evoras filed a Motion to Approve Refinancing (the "Motion") after they were able to obtain a commitment from a third party, Mortgage Security, to refinance the Property. According to the Motion, the Property then had an appraised value of $156,000. The Evoras proposed to obtain a thirty year mortgage in the amount of eighty percent of the value of the Property. Moreover, the Motion also purported to pay the Chapter 13 Trustee a one-time, lump sum payment in full satisfaction of its obligations to the Finance Agency under the Plan.[2]
The Finance Agency filed an objection to the Motion and suggested that the Bankruptcy Court deny the Motion for several reasons. First, if the Motion was approved, then the Evoras would be allowed to "manipulate the Code to modify a mortgage, receive a `super discharge' and then pocket thousands of dollars on a refinance of a debt simply because the property values have increased." Second, the Evoras had "reintroduced the issue of valuation" and must now amend their plan in accordance with the new valuation. Finally, the intent of Congress was to provide a fresh start "not to provide a windfall profit at the expense of their creditors." At a hearing on October 18, 1999 the Bankruptcy Court overruled the objection.
Undaunted (and feeling misunderstood) the Finance Agency filed a Motion for Reconsideration of the Court's Order in which it asserted that the Evoras were, in effect, modifying the Plan by reducing the amount of time in which the Finance Agency would be paid the full amount of their loan. As a result, the new modified plan must meet the requirements of 11 U.S.C. § 1329 which, according to the Finance Agency, included a revaluation of its claim based on the present value of the Property.
The Bankruptcy Court rejected the Finance Agency's motion for reconsideration, ruling that it was, "in effect, seeking a determination that [its] allowed secured claim is no longer $80,000 but a higher amount." In re Evora, 242 B.R. 560, 561 (Bankr.D.Mass.1999). The Bankruptcy Court neither accepted nor rejected the proposition that the Evoras, through their *340 Motion, were seeking to modify the Plan. See id. Instead, the Bankruptcy Court ruled that a modification of the Plan did not require that the amount of a secured claim be redetermined. See id. To support its holding, the Bankruptcy Court relied on cases that contained analogous circumstances in which courts had refused to allow debtors to shift the burden of depreciation of collateral to the creditor by reclassifying the claim as unsecured. According to the Bankruptcy Court, once a debtor decides to keep the collateral it "is entitled to any later appreciation in value but also must suffer any resulting depreciation or loss." Id. (quoting In re Meeks, 237 B.R. 856, 861-62 (Bankr.M.D.Fla. 1999)).
Following these denials, the Finance Agency also sought a stay pending appeal which was summarily denied. Thus, the refinancing has occurred, the allowed secured claim has been paid, and the Evoras' have essentially completed the Plan.
It is from these decisions that the Finance Agency appeals.
III. RELEVANT STANDARD
A district court's standard of review when deciding an appeal from a bankruptcy court is governed by Fed. R. Bankr.P. 8013. The rule provides that the court "may affirm, modify or reverse a bankruptcy judge's judgment, order or decree or remand with instructions for further proceedings." While a district court reviews conclusions of law de novo, In re First Software Corp., 97 B.R. 711, 713 (D.Mass.1988) (Wolf, J.), "findings of fact . . . shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the bankruptcy court to judge the credibility of the witnesses." Fed. R. Bankr.P. 8013.
Because the case before the Court involves statutory interpretation, the Bankruptcy Court's decision will be reviewed de novo.
IV. DISCUSSION
A. Mootness
Before reaching the merits of this case, the Court must first address the Evoras' contention that the Finance Agency's appeal is moot. The Evoras argue that, because the refinancing has occurred and the funds have been disbursed and accepted by the Finance Agency, there is no controversy before this Court. See Appellee's Brief at 9. Their conclusion is based on their belief that "[the Finance Agency] cannot resurrect its discharged unsecured claim nor seek a new valuation of its secured claim." Id. The argument is circular, however. According to the Evoras, because the Finance Agency cannot seek a new valuation of its secured claim, the appeal is moot and because the appeal is moot, this Court cannot determine whether the Finance Agency can seek a new valuation.
Moreover, this appeal does not fit within the "equitable" or "pragmatic" mootness categories devised by the First Circuit. See Hicks, Muse & Co., Inc. v. Brandt, 136 F.3d 45, 48 (1st Cir.1998). Equitable mootness does not apply because the Finance Agency neither repeatedly ignored nor significantly delayed its right to seek a stay or an appeal. See id. The record shows that the Finance Agency filed an objection to the Motion, filed a Motion for Reconsideration upon denial of its objection, filed a Motion for Stay Pending Appeal, and finally filed this appeal. Likewise, the pragmatic mootness test is inapplicable because the Evoras have failed to demonstrate that an appeal cannot provide meaningful relief. See id.
Thus, the merits of this case are appropriately before this Court.
B. Modification of Secured Claims
The Bankruptcy Court correctly summarized the Finance Agency's position when it stated "the Court finds that [the Finance Agency] is, in effect, seeking a determination that their allowed secured claim is no *341 longer $80,000 but a higher amount." Evora, 242 B.R. at 561. Essentially, the question before this Court is whether the Bankruptcy Code allows such a maneuver.
The Finance Agency's argument rests on two rather precarious building blocks. First, that the Evoras' September 3, 1999 Motion was a modification of the Plan pursuant to section 1329. Second, that plan modification mandates a revaluation of its claim.
A Chapter 13 plan can be modified after confirmation upon the request of the debtor, the trustee, or the holder of an allowed unsecured claim. See 11 U.S.C. § 1329. Thus, by the statute's very terms, the Finance Agency, as a secured creditor, is precluded from seeking modification and must instead rely on the Evoras' motion to trigger section 1329. Once modification is sought by a named party, however, the amended plan must meet the statutory requirements contained in sections 1322(a), 1322(b), 1323(c), and 1325(a).
1. Modification
In the Evoras' Motion, they stated:
The Property has a current appraised value of $156,000, whereas the outstanding balance owed by the Debtors to MHFA under the plan is $59,053.91. Thus, the proceeds of a refinancing pursuant to the Conditional Loan Commitment will be sufficient to cover the entire outstanding loan balance (plus closing costs). [The lender] shall remit such proceeds to the Chapter 13 Trustee as a one-time, lump sum payment in full satisfaction of all of the Debtors' obligations under the Plan, including their obligation to MHFA.
Motion to Approve Refinancing ¶ 4. In a footnote, the Evoras opined that because they planned to satisfy all the outstanding obligations under the Plan through a lump sum payment, "they [did] not believe that [it was] necessary to submit an amended Plan." Id. at 2 n. 2.
The Finance Agency relies on the one-time lump sum payment to support its assertion that the Motion was a modification. Section 1329 allows a plan to be modified to "extend or reduce the time for . . . payments." 11 U.S.C. § 1329(a)(2). Because the Evoras sought to accelerate the payment schedule, thereby reducing the time over which payments were to be made, they were modifying the Plan. Or so the argument goes.
There is a certain simplistic logic to the Finance Agency's argument. Section 1329 is written in permissive and not mandatory language, however. While the Motion contains the reasons for the debtors' tender of payment, there is nothing in the language of the Bankruptcy Code to suggest that a one-time payment requires formal modification. The Finance Agency presents no case law to support its interpretation of the statute.
The Evoras' brief is similarly devoid of citations adequate to support their position. While the Evoras admit that the Motion fell within the literal language of section 1329(a)(2), they point to a footnote in In re Martin to support the proposition that it is not a modification of the Plan. See In re Martin, 232 B.R. 29, 32 n. 4 (Bankr. D.Mass.1999). In Martin, Judge Hillman stated "[a] motion to refinance is not the equivalent of a motion to modify a plan." Id. In isolation, the statement appears to support the Evoras' position. A closer examination of the context, however, reveals that Judge Hillman's statement is not one of substance, but one of procedure. In Martin, the Debtors brought a Motion to Refinance and then a Motion to Amend the Plan to which the Trustee objected. Id. The Debtors argued that the Trustee was precluded from objecting to the Motion to Amend because he had not objected to the Motion to Refinance which set forth their intentions regarding the amended plan. The court disagreed and allowed the Trustee's objection. The statement on which the Evoras rely was not one of statutory interpretation but rather one of *342 procedure that the Trustee's failure to object to the Motion to Refinance was not a procedural bar to an objection to the Motion to Amend. Thus, Martin does not squarely address the issue here.
Case law does exist on this issue, although admittedly it is sparse. In addition to its scarcity, it is confusing. Bankruptcy courts have arrived at vastly different results when faced with a debtor's motion to make a one-time lump sum payment. Compare In re Guentert, 206 B.R. 958, 961 (Bankr.W.D.Mo.1997) (motion to make lump sum payment is motion to modify), and In re Easley, 205 B.R. 334, 335 (Bankr.M.D.Fla.1996) (motion to complete payments is motion to modify), with In re Bergolla, 232 B.R. 515, 516 (Bankr. S.D.Fla.1999) (motion to make lump sum payment does not warrant modification), and In re Smith, 237 B.R. 621, 623 (Bankr. E.D.Tex.1999) (rejecting secured creditors attempt to construe lump sum payment as motion to modify). Although seemingly in conflict, these decisions can be harmonized.
When determining whether a motion is in fact a modification, courts examine the substance of the plan and the nature of the debtor's obligation to the debtor's creditors, not to the number of payments proposed. If a motion, whether or not styled as a motion to amend the plan, seeks to alter the substance of the plan, it is treated as a modification. This reconciles the varied results emanating from the particular bankruptcy courts. The outcome in each of these cases was dictated not by the number of payments but the amount to be paid to the unsecured creditors. See In re Phelps, 149 B.R. 534, 537 (Bankr.N.D.Ill.1993).
For example, in Guentert, the court construed a debtor's motion to make one lump sum payment as a modification of her Chapter 13 plan. See 206 B.R. at 961. The original plan, as mandated by the Code, called for the debtor to use all her disposable income over a three-year period to pay unsecured creditors forty-five percent of their claims. See id. Through unfortunate circumstances, the debtor received the proceeds of a life insurance policy, which is considered disposable income under the Code, and sought to apply a portion of the proceeds to complete her Chapter 13 plan early. See id. The court denied the motion, reasoning that it had "no discretion to shorten the term of a thirty-six month Chapter 13 plan unless the plan, so shortened, pays unsecured creditors 100% of their claims." In short, the debtor sought to alter the substance of the plan in contravention of the Code by reducing the amount unsecured creditors received.
In contrast, the court in Bergolla concluded that there was no modification of the debtors' Chapter 13 plan even though they sought to pre-pay the amount due after only making five payments toward a sixty-month plan. See 232 B.R. at 516-17. To pay the balance of their plan early, the debtors used the proceeds from the sale of exempt property, in this case their home. See id. at 516. The home was otherwise unreachable by the creditors, thus its sale did not enhance the bankruptcy estate or in any way alter the amount the unsecured creditors would receive. In essence, the substance of the plan was not changed by the prepayment.
While the case law is not a model of clarity, it does provide a basis for the Court to review the facts of this case. Here, the Bankruptcy Court was presented with a motion to refinance that proposed to pay all the obligations under the Plan in full. The Finance Agency had an allowed secured claim of $80,000 calculated with nine percent interest over the life of the Plan to be almost $100,000. All unsecured claims, including the Finance Agency's, were discharged in the prior Chapter 7 proceeding. The Evoras wanted to pay the entire amount early, thus benefitting both the Evoras and the Finance Agency. The Motion was not in violation of the Code, nor did it purport to *343 alter the confirmed Plan to the detriment of the creditor. Indeed, given the time value of money, it is in the Finance Agency's best interest to receive the full amount early.
Given that the statute is permissive and the Motion did not purport to alter the confirmed Plan, it does not appear that the Motion was an implicit modification of the Plan. Because the case law is murky, however, this Court will follow the Bankruptcy Court's lead and proceed with the resulting analysis.
2. Revaluation
The Bankruptcy Court concluded even "assuming arguendo that the Debtors are in effect modifying their Chapter 13 plan to reduce the time for payments" there was "no authority for the proposition that this Court must, as a consequence, redetermine the amount of its secured claim." Evora, 242 B.R. at 561. This Court agrees.
There is nothing in the Bankruptcy Code nor case law to suggest that the Finance Agency's secured claim must be, or for that matter can be, redetermined. While section 1329(a)(1) provides that a plan may be modified to increase or reduce the amount of payments it does not state that the plan may be modified to increase or reduce the amount of the secured claim. See 11 U.S.C. § 1329(a)(1); Chrysler Fin. Corp. v. Nolan, 234 B.R. 390, 395-96 (M.D.Tenn.1999) (ruling that "straightforward interpretation" indicates that there can be no change in total amount to be paid); In re Coleman, 231 B.R. 397, 401 (Bankr.S.D.Ga.1999) (stating that section 1329[a] does not expressly permit revaluation of collateral); In re Dunlap, 215 B.R. 867, 870 (Bankr.E.D.Ark.1997) (ruling that section 1329 does not authorize modified plan to alter the amount of previously determined secured claim); In re Banks, 161 B.R. 375, 378 (Bankr.S.D.Miss.1993) (same).
Moreover, valuation of a secured claim is adjudicated by the order of confirmation and a plan is considered res judicata as to claim determinations. See 11 U.S.C. § 1327(a) ("the provisions of a confirmed plan bind the debtor and each creditor. . . ."); Cline v. Welch, No. 97-5080, 1998 WL 773999 (6th Cir. Oct.11, 1998) (unpublished opinion) (binding effect extends to any issue necessarily determined by confirmation order);[3]Ford Motor Credit Co. v. Stevens, 130 F.3d 1027, 1029 (11th Cir.1997) (Ford bound by amount of secured claim defined at confirmation); United States v. Richman, 124 F.3d 1201, 1209 (10th Cir.1997) (the order confirming Chapter 13 plan is binding determination of rights of parties); Nolan, 234 B.R. at 396 (confirmation binding on creditors and debtors regarding total amount to be paid). Thus, valuation, in the context of reorganization, is fixed at the time of plan confirmation. See Taras v. Commonwealth Mortgage Corp. of Am., 136 B.R. 941, 949 (Bankr.E.D.Pa.1992).
The Finance Agency concedes that while it filed a proof of claim in excess of $156,000, it made no objection to the Evoras valuation of the Property nor did it object to the Bankruptcy Court's determination of the allowed secured claim at $80,000. See Appellant Brief at 9 ("Appellant's valuation was no more than debtor's valuation, and therefore no objection was filed to the motion to determine secured status."). It would appear then that section 1327 binds the Finance Agency to the amount allowed in the confirmed Plan. The Code does not provide a second bite at the apple.[4]
*344 Undaunted, the Finance Agency turns to section 1325(a)(5) as a basis to redetermine its secured claim. If a plan is modified pursuant to section 1329, it must also meet the provisions of sections 1325(a). See 11 U.S.C. § 1329(b)(1). Section 1325(a)(5) is the principal protection for secured creditors in Chapter 13. It states that a confirmed plan must provide for, inter alia, "the value, as of the effective date of the plan, of property to be distributed under the plan on account of such claim is not less than the allowed amount of such claim." 11 U.S.C. § 1325(a)(5)(B)(ii). The Finance Agency argues that when read together, sections 1329(b)(1) and 1325(a)(5)(B)(ii) require that the allowed amount of a claim be redetermined when a plan is modified.
This argument is without support. First, there is nothing in the statute that suggests that an allowed secured claim must be redetermined. Indeed, to read section 1325 as requiring revaluation of a secured claim would conflict with the current judicial interpretations of sections 1327 and 1329. It would be difficult to reconcile two Code provisions that state that a determination of an allowed secured claim is binding with a Code provision that mandated redetermination of the value of an allowed secured claim at a later date.
In addition, there is no case law that endorses the Finance Agency's reading of the statute. There are, however, a number of courts that have adopted the opposite view. See, e.g., Stevens, 130 F.3d at 1029; Talbot, 124 F.3d at 1209; Nolan, 234 B.R. at 395; In re Meeks, 237 B.R. at 861; Coleman, 231 B.R. at 400; Banks, 161 B.R. at 378; In re Abercrombie, 39 B.R. 178, 179 (Bankr.N.D.Ga.1984). The court in Meeks succinctly phrased the outcome of these cases:
A debtor who decides to retain the collateral at a confirmation hearing is entitled to any later appreciation in value but also must suffer any resulting depreciation or loss. The allowed amount of the secured claim is fixed at confirmation and is not subject to post confirmation modification.
Meeks, 237 B.R. at 861-62.
The majority of cases that deal with this question occur in the context of collateral depreciation. See Meeks, 237 B.R. at 861; Coleman, 231 B.R. at 399; Dunlap, 215 B.R. at 870; Banks, 161 B.R. at 378; Abercrombie, 39 B.R. at 179. In those instances, debtors are seeking to reclassify a formerly secured claim as partially unsecured to reflect the change in the value of the property. Courts have almost uniformly rejected this proposition concluding that the Code does not allow for a change in the amount to be paid. The courts reason that this "attributes to Congress an unlikely intention to give the debtors the option to shift to holders of allowed secured claims any loss in the value of collateral." Coleman, 231 B.R. at 399 (quoting Norton Bankruptcy Law and Practice 2d, § 124:3 n. 79, at 124-27 [1993]).
Because it is a rare occurrence in the context of bankruptcy, few cases deal with the appreciation of collateral. The courts that have addressed this issue have held that appreciation does not alter the amount of the secured claim. See Stevens, 130 F.3d at 1030; Talbot, 124 F.3d at 1209; Moore, 181 B.R. at 525. The opinion in Talbot is instructive. There the debtors filed for Chapter 13 relief and the IRS filed a proof of claim for pre-petition income *345 taxes in the amount of $37,660. See Talbot, 124 F.3d at 1204. The debt was secured by a tax lien that had attached to the debtors' home. The home was valued at $77,000. Using the undisputed valuation, the IRS asserted that $18,674 of its claim was secured.
After twenty months, the debtors sold their home for $137,500, substantially more than the original value assigned it at confirmation of the plan. See id. The IRS, based on the appreciation, attempted to obtain full satisfaction of the entire debt. The court rejected this notion stating "the IRS was entitled to no more and the Talbots were obligated to pay no less than the amounts set out in the Plan and confirmation order." Id. at 1209.
The Court is persuaded by the reasoning contained in these decisions. Both debtors and creditors are bound by the amount of allowed secured claims set forth in the plan. Just as debtors must shoulder the loss associated with depreciation, so must creditors assume the loss accompanying appreciation. To hold otherwise would provide no finality to a confirmed plan and would subject both creditors and debtors to the whims of the market.
V. CONCLUSION
Based on the foregoing the decision of the Bankruptcy Court is AFFIRMED [Docket # 14].
NOTES
[1] Originally, the Bankruptcy Court had provided for an effective date of September 1, 1996. This was later amended to reflect the correct year as 1997.
[2] At the time of the Motion, a $59,053.91 balance remained.
[3] For the propriety of citing an unpublished opinion, see Anastasoff v. United States, 223 F.3d 898, 905 (8th Cir.2000) (Arnold, J.); see also Giese v. Pierce Chemical Co., 43 F.Supp.2d 98, 106 (D.Mass.1999).
[4] There are two situations where courts have found that the Chapter 13 plan was not binding on the creditor. See In re Rodnok, 197 B.R. 232, 235 (Bankr.E.D.Va.1996); In re Moore, 181 B.R. 522, 523 (Bankr.D.Idaho 1995). Neither situation is present in this case. First, some courts have been reluctant to bind a creditor to the value of collateral stated in a confirmed plan without the creditor receiving adequate notice because it violates due process requirements. See Rodnok, 197 B.R. at 235. There is no question that the Finance Agency received notice here. Second, if a debtor fails to object to the proof of claim filed by the creditor, the proof of claim is presumptively the amount of the secured claim and it may not be reduced by the Chapter 13 plan. See Moore, 181 B.R. at 523. The Finance Agency does not argue that this is the case here. Moreover, from the record it appears that after the Finance Agency filed its proof of claim, the Evoras sought a determination by the Bankruptcy Court of the value of the secured claim.
| {
"pile_set_name": "FreeLaw"
} |
656 So.2d 988 (1995)
Robert C. JORDAN
v.
CENTRAL LOUISIANA ELECTRIC CO., INC.
No. 95-C-1270.
Supreme Court of Louisiana.
June 23, 1995.
PER CURIAM.
Writ granted.
On plaintiff's application, we exercise our supervisory jurisdiction to correct an erroneous ruling by the court of appeal sustaining an exception of improper venue. See Chambers v. LeBlanc, 598 So.2d 337 (La.1992).
Plaintiff contracted with defendant to acquire immovable property located in Iberia Parish. Plaintiff signed the authentic act of sale in Iberia Parish; a few days later, defendant signed in Rapides Parish. Seeking to recover his deposit, plaintiff brought this action in Iberia Parish, based on La.Code Civ. Proc. art. 76.1, which provides for venue in a contractual action "in the parish where the contract was executed." Defendant objected to venue, arguing that venue was proper only in its domicile, Rapides Parish.
The trial court overruled defendant's exception, and defendant appealed. The court of appeal reversed, reasoning that the contract was executed in Rapides Parish "where the last signature required for a valid, enforceable *989 contract to sell immovable property was affixed to the document." We disagree.
Article 76.1 provides that venue is proper in the parish where the contract is executed. A contract, including one executed in authentic form,[1] may be executed in more than one parish. Such is the case here. Plaintiff executed the authentic act in Iberia Parish; defendant, in Rapides. In such a case, we construe Article 76.1 as authorizing venue in any of the parishes in which the contract was executed. Although Article 76.1 uses the singular word "parish," La.Code Civ.Pro. art. 5055 expressly provides that "[u]nless the context clearly indicates otherwise ... [w]ords used in the singular number apply also to the plural."
Our construction is consistent with our holding in Kellis v. Farber, 523 So.2d 843 (La.1988). Kellis held that the alternative, optional venue provisions contained in La. Code Civ.Pro. articles 71 through 85 "are an extension, supplement and legal part of the provisions of article 42." 523 So.2d at 846. As a result, these alternative venue provisions are no longer exceptions to Article 42's "home base" venue that should be strictly construed, as was formerly required under Hawthorne Oil & Gas Corp. v. Continental Oil, 377 So.2d 285 (La.1979). Rather, these alternative provisions are part and parcel of the general venue rule set forth in Article 42.
Explaining this change, we commented in Kellis:
The proliferation of exceptions [to Article 42] mirrors the newly emerging bases of modern venue statutes. These provisions are not based on domicile but on factors such as the following: the convenience of both parties; the relationship between the forum and the cause of action; the reduction of litigation through certainty in the laying of venue; the places where the subject of the action or part thereof is situated; the place where the cause of action arose; the place where the seat of government is located.... With the advent of these important venue grounds, the rationale that the defendant has an inherent or natural right to be sued at his domicile, in the absence of or in addition to positive law, is anachronistic.
523 So.2d at 847.
Given that all the events leading up to the contract in question occurred in Iberia, that the property is located in Iberia, and that the plaintiff actually executed the contract in Iberia, we conclude that venue was proper in Iberia Parish.
Accordingly, the judgment of the court of appeal maintaining the exception of venue and transferring the case is reversed, and the judgment of the trial court overruling the exception is reinstated. The case is remanded to the trial court for further proceedings.
MARCUS, J., not on panel.
NOTES
[1] See La.Civ.Code art. 1833, providing that "[t]o be an authentic act, the writing need not be executed at one time or place ..."
| {
"pile_set_name": "FreeLaw"
} |
954 F.2d 722
In Matter of River Products*
NO. 91-3699
United States Court of Appeals,Fifth Circuit.
Feb 05, 1992
1
Appeal From: E.D.La.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
| {
"pile_set_name": "FreeLaw"
} |
435 F.Supp. 55 (1977)
Fanchon BLAKE et al., Plaintiffs,
v.
CITY OF LOS ANGELES et al., Defendants.
No. CV 73-1962-JWC.
United States District Court, C. D. California.
May 13, 1977.
*56 *57 *58 Timothy B. Flynn, A. Thomas Hunt and Mary-Lynne Fisher, Center for Law in the Public Interest, Jill Jakes, ACLU Foundation of Southern California, Los Angeles, Cal., for plaintiffs.
Burt Pines, City Atty., John B. Rice, Senior Asst. City Atty., Cecil W. Marr and Robert J. Loew, Deputy City Attys., Los Angeles, Cal., for defendants.
Dale B. Goldfarb and George J. Franscell, Dryden, Harrington & Swartz, Los Angeles, Cal., for intervenor.
CURTIS, District Judge.
This class action is an across-the-board attack on alleged sexually discriminatory practices of the City of Los Angeles in the operation of its Police Department. Jurisdiction is claimed under 28 U.S.C. § 1343(3) and (4). The action is brought under 42 U.S.C. § 1983, the Fourteenth Amendment of the United States Constitution, and Title VII of the Civil Rights Act of 1964, as amended (42 U.S.C. § 2000e, et seq.).
The challenged practices have occurred over a time span embracing three different periods; each period brings into play different considerations and different standards of review.
The first relevant period was that prior to March 24, 1972, the date upon which Title VII was made applicable to "governments, governmental agencies [and] political subdivisions." During this period, the City maintained two separate employment classifications for its sworn police officers, "Policemen" and "Policewomen".
The second relevant period runs from the Title VII effective date of March 24, 1972 until June 1973, when the City of Los Angeles put into effect a new hiring system. The City continued the dual system of Policemen and Policewomen during this fifteen month period.
The third period commences in June 1973, when the City attempted to comply with Title VII. Under the new hiring system, the gender-based classifications were abandoned and the single position of sworn "Police Officer" was established. As a part of the new procedure, the City also established candidate selection criteria and policies relating to promotions, pay grades, transfers, retirement, and pension benefits. Although the new policies were not based on gender, they resulted in a statistically greater impact on women than men.
The defendants have moved for summary judgment. In support of their respective positions upon the issues raised by the motion, the parties have furnished the court with voluminous affidavits and a vast amount of statistical data. In addition thereto, the parties have entered into a pretrial conference order containing a stipulation of facts, which has largely limited the factual issues and greatly facilitated a pretrial determination of the many legal questions presented by this case.
I. STATUTE OF LIMITATIONS
As a threshold issue, the defendants have questioned the statute of limitations applicable to the claims under 42 U.S.C. § 1983. The initial complaint was filed August 20, 1973. It is well settled in California that the applicable statute of limitations for civil rights actions brought under 42 U.S.C. § 1983 is the three year statute provided in section 338(1) of the California Code of Civil Procedure. Donovan v. Reinbold, 433 F.2d 738, 741 (9th Cir. 1970), and Smith v. Cremins, 308 F.2d 187 (9th Cir. 1962). This being so, plaintiffs' claims are not barred by the applicable statute of limitations.
II. PERIOD PRIOR TO MARCH 24, 1972
Plaintiffs' first challenge is directed to the City's employment practice for the period prior to March 24, 1972, when the City maintained the separate classifications of "Policemen" and "Policewomen". Plaintiffs urge that this classification system violated the equal protection clause of the Fourteenth Amendment. Although Policemen *59 and Policewomen were both sworn officers, they had different lines of promotion and different types of duties. Policemen were assigned to the more physical tasks, including work on patrol and in the field. Policewomen generally were assigned to specialized tasks and inside work.
In our approach to the question of whether these classifications comply with constitutional requirements, we must first decide what standard of review is applicable. This is a problem fraught with some confusion because of the lack of clarity in the case law.
In a "traditional" equal protection analysis, a legislative classification must be sustained unless it is patently arbitrary. Frontiero v. Richardson, 411 U.S. 677, 683, 93 S.Ct. 1764, 36 L.Ed.2d 583 (1973). See, Jefferson v. Hackney, 406 U.S. 535, 546, 92 S.Ct. 1724, 32 L.Ed.2d 285 (1972); Richardson v. Belcher, 404 U.S. 78, 81, 92 S.Ct. 254, 30 L.Ed.2d 231 (1971); Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970); McGowan v. Maryland, 366 U.S. 420, 426, 81 S.Ct. 1101, 6 L.Ed.2d 393 (1961), and Flemming v. Nestor, 363 U.S. 603, 611, 80 S.Ct. 1367, 4 L.Ed.2d 1435 (1960).
The plaintiffs, however, contend that a classification based upon sex is similar to a classification based upon race, alienage, and national origin. A gender-based classification would then be inherently suspect and subjected to close judicial scrutiny.
In Frontiero v. Richardson, supra, the challenged statute provided that the spouse of a serviceman was deemed a dependent for purposes of obtaining certain privileges. However, the spouse of a female member of the armed services was not deemed a dependent, unless he were in fact dependent on his wife for over one-half of his support. The government admitted that the only justification for such a classification was "administrative convenience." The Court decided that a classification based upon sex could not be justified on the sole ground of "administrative convenience" and struck down the classification as being a denial of equal protection. In a plurality decision, four justices held that classifications based on sex were inherently suspect and subject to strict judicial scrutiny. 411 U.S. at 688, 93 S.Ct. 1764. Mr. Justice Stewart concurred in the result. Id. at 691, 93 S.Ct. 1764.
Notwithstanding Frontiero, a majority of the Supreme Court has not yet added sex to the list of suspect classifications. The Court has suggested, however, that a classification based upon sex will have to be justified by more than the traditional "rational" connection between the classification and some valid legislative purpose. See, Berkelman v. San Francisco Unified School District, 501 F.2d 1264, 1269 (9th Cir. 1974). The Court has never rejected gender as an impermissible classification in all instances. See, e. g., Schlesinger v. Ballard, 419 U.S. 498, 95 S.Ct. 572, 42 L.Ed.2d 610 (1975), and Kahn v. Shevin, 416 U.S. 351, 94 S.Ct. 1734, 40 L.Ed.2d 189 (1974).
In Schlesinger, the Court upheld a classification based upon sex. In that case a naval officer challenged a statutory mandatory discharge provision, which required his discharge before a similarly situated female officer would be discharged. The Court recognized the differing types of service which each sex was likely to render and upheld the classification, saying:
"In both Reed [Reed v. Reed, 404 U.S. 71, 92 S.Ct. 251, 30 L.Ed.2d 225] and Frontiero the reason asserted to justify the challenged gender-based classifications was administrative convenience, and that alone. Here, on the contrary, the operation of the statutes in question results in a flow of promotions commensurate with the Navy's current needs and serves to motivate qualified commissioned officers to so conduct themselves that they may realistically look forward to higher levels of command. This Court has recognized that `it is the primary business of armies and navies to fight or be ready to fight wars should the occasion arise.' Toth v. Quarles, 350 U.S. 11, 17, [76 S.Ct. 1, 5, 100 L.Ed. 8]. See also Orloff v. Willoughby, 345 U.S. 83, 94, [73 S.Ct. 534, 540, 97 L.Ed. 842]. The responsibility *60 for determining how best our Armed Forces shall attend to that business rests with Congress, (citations omitted) and with the President. . . . We cannot say that, in exercising its broad constitutional power here, Congress has violated the Due Process Clause of the Fifth Amendment." 419 U.S. at 510, 95 S.Ct. at 578-79.
In my view, the rule governing our inquiry is set forth in Craig v. Boren, 429 U.S. 190, 97 S.Ct. 451, 50 L.Ed.2d 397 (1976). After analyzing its recent decisions in this field, the Court stated:
"To withstand constitutional challenge, previous cases establish that classifications by gender must serve important governmental objectives and must be substantially related to achievement of those objectives." Id. at 197, 97 S.Ct. at 457.
This approach was reaffirmed by the Court in Califano v. Goldfarb, 430 U.S. 199, 97 S.Ct. 1021, 51 L.Ed.2d 270 (1977). Under this standard of review, we must determine whether the gender-based classification in this case has a substantial relationship to the achievement of an important governmental objective.
The City of Los Angeles has a compelling governmental interest in providing police services to the community. As was stated in Kelley v. Johnson, 425 U.S. 238, 247, 96 S.Ct. 1440, 1445, 47 L.Ed.2d 708 (1976):
"The promotion of safety of persons and property is unquestionably at the core of the State's police power, and virtually all state and local governments employ a uniformed police force to aid in the accomplishment of that purpose."
In assessing the relation of gender to this important governmental objective certain basic facts are apparent:
1. One of the most vital functions a municipality performs is the establishment of an effective police force to protect the lives and property of its citizens, to enforce its laws, and to preserve and maintain peace and tranquility within the community.
2. This police force must consist of Police Officers who upon an appropriate occasion have the capacity to restrain, control, subdue, arrest, or capture persons who are a threat to the community, and who are or can become aggressive, vicious or violent.
3. As defendants' affidavits clearly show and common sense confirms, physical size, strength, and agility have a direct relation to the quality of the performance of these functions. It is also important to have the kind of temperament which allows one to engage unhesitatingly in strenuous physical contact with another, whenever the occasion demands.
4. These qualities are essential to an effective, efficient, and functional police force.
Therefore, the only remaining question is whether a classification by gender is substantially related to the selection of Police Officers with the necessary qualities. It is not required that all men have the necessary qualities and that no women have them. There has to be only a substantial relationship between the relevant traits and gender.
The qualities in issue here are similar to those which prompt the selection of men for the fighting segments of our armed forces. Congress has not seen fit to draft women, and women are used in the armed forces in positions which have only an incidental relationship to actual combat. The Supreme Court has at least implicitly approved the exclusive use of men in combat positions. In Schlesinger v. Ballard, supra, the Court relied on this classification to justify the additional gender-based classification at issue in that case. The same factors of size, strength, and disposition which make a man a more effective combatant than a woman in the event of war, also act to make a man a better Police Officer than a woman in those areas where physical tasks are involved.
Plaintiffs have suggested that a Police Officer needs superior size and strength on relatively few occasions, compared with the *61 other duties an officer is called upon to perform. They therefore conclude that a gender-based classification relevant to these limited situations is not justified. It may well be true that these occasions occur relatively infrequently. But the possibility of such an occurrence exists at all times, and a city is justified in a desire to have a police department capable of exercising whatever degree of force is required, the instant it is required. Furthermore, a police force known to be capable of striking fast and hard whenever necessity demands is a strong deterrent to criminal activity. The fact that many cities have such a force is almost certainly one reason why instances of physical confrontation are so infrequent.
I conclude therefore that the evidence before this court establishes without substantial contradiction that the qualities of disposition, and physical size and strength are substantially related to the important governmental objective of providing an effective police force. I further conclude that a classification based upon gender is substantially related to and serves this important governmental objective. Therefore, the classification of Policemen and Policewomen as established by the defendants for the period prior to March 24, 1972 was valid and did not offend the equal protection clause of the Constitution.
III. PERIOD FROM MARCH 24, 1972 TO JUNE 1973
On March 24, 1972, the provisions of Title VII were expanded to include governments, governmental agencies, and political subdivisions. Title VII subjects an alleged discriminatory classification to a more stringent judicial scrutiny than was required under an equal protection analysis.
Defendants do not claim that the dual classification system for Policemen and Policewomen in effect during this period would comply with the requirements of Title VII. Defendants contend that, irrespective of whether or not this system can withstand Title VII review, the City was justified in continuing the practice until at least June 1973, on the grounds of bona fide business necessity.
The "business necessity test" is one criteria used to determine whether a practice is unlawfully discriminatory under Title VII. This test is used because the courts recognize that the continuation of an employment practice is sometimes justified, regardless of its discriminatory impact. The court in Robinson v. Lorillard Corporation, 444 F.2d 791, 798 (4th Cir. 1971), stated:
"The test is whether there exists an overriding legitimate business purpose such that the practice is necessary to the safe and efficient operation of the business. Thus, the business purpose must be sufficiently compelling to override any racial impact; the challenged practice must effectively carry out the business purpose it is alleged to serve; and there must be available no acceptable alternative policies or practices which would better accomplish the business purpose advanced, or accomplish it equally well with a lesser differential racial impact."
When Title VII was first enacted, it provided for a one year grace period to allow private employers to adjust to the provisions of the Act. When it was made applicable to governments, governmental agencies, and political subdivisions, however, no such grace period was provided. Obviously, it would take some time for an agency as large as the Los Angeles Police Department to accommodate itself to the new requirements. The necessity of maintaining a functioning police department during the transition period would surely meet the test of an overriding legitimate business purpose. This necessity would justify the continuance of the employment practice for the period of time reasonably necessary to enable the City to bring itself into compliance with the Act.
The uncontradicted affidavits filed by the defendants detail the activities of those in charge of formulating and implementing the reorganization of the Department. They establish that the City made a good faith effort to comply with the Act, and *62 that the time required to put the revised hiring practice into effect was not unreasonable under the circumstances.
I hold therefore that during the interim period between March 24, 1972 and June 1973, defendants' hiring plan comes within the "business necessity" exemption and consequently did not violate the provisions of Title VII. I have previously concluded that this dual classification system did not violate the Fourteenth Amendment.
IV. PERIOD SUBSEQUENT TO JUNE 1973
In June 1973, the Los Angeles Police Department was reorganized. The dual classifications of "Policewomen" and "Policemen" were abandoned, and a single classification of "Police Officer" was established without reference to sex. With the initiation of this plan, new rules and regulations were promulgated. The new policies included the establishment of certain entry-level selection standards.
Under the new system, an applicant was required to have a minimum height of 5'7". The height requirement was reduced to 5' 6" less than a year later. An applicant was also required to pass a physical abilities examination designed to test physical endurance, strength, and agility. This test consists of five events; each event is graded on the basis of 1-100, according to the candidate's performance. The combined score on all events must equal or exceed 350. These tests are:
1. Wall scale run a total of 50 yards then scale a smooth wall 6 feet high. (17 seconds)
2. Maintain grip run a total of 50 yards then take an overhand grip on a chinning bar and maintain grip for one minute. (16 seconds run plus 60 seconds on the bar)
3. Weight drag run 50 feet then drag a dead weight of 140 pounds for 50 feet. (16 seconds)
4. Tremor test run a total of 50 yards then hold a stylus steady for 17 seconds. (17 seconds run plus 100 points on the stylus)
5. Endurance run run as many laps as possible in 12 minutes on a one-eighth mile track. (10 laps)
(The performance in parenthesis is that which will yield the average passing score of 70 points per test.)
As might well be expected, relatively fewer women than men were able to qualify on the basis of either height or strength. Consequently, these two requirements imposed a severe adverse impact upon women.
A. EQUAL PROTECTION REVIEW OF THE NEW REQUIREMENTS
After some confusion among the circuits, the Supreme Court has recently decided two cases clarifying the requirements of the Fourteenth Amendment. Under an Equal Protection analysis, an adverse statistical impact alone does not establish a prima facie case of unconstitutional discrimination. There must be additional proof of a discriminatory purpose as a motivating factor in the decision. Such a motive need not be the sole motive, or even the dominant or primary motive, but it must be one of the motives for the decision. Washington v. Davis, 426 U.S. 229, 96 S.Ct. 2040, 48 L.Ed.2d 597 (1976), and Village of Arlington Heights v. Metropolitan Housing Development Corporation, 429 U.S. 252, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977). In Washington, the Court said:
"[W]e have not held that a law, neutral on its face and serving ends otherwise within the power of government to pursue, is invalid under the Equal Protection Clause simply because it may affect a greater proportion of one race than another. Disproportionate impact is not irrelevant, but it is not the sole touchstone of an invidious racial discrimination forbidden by the Constitution. Standing alone, it does not trigger the rule, McLaughlin v. Florida, 379 U.S. 184, [85 S.Ct. 283, 13 L.Ed.2d 222] (1964), that racial classifications are to be subjected to the strictest scrutiny and are justifiable only by the weightiest of considerations." 426 U.S. at 242, 96 S.Ct. at 2049.
*63 Since statistical impact alone is not sufficient to establish a prima facie case, and since there is no other evidence of discriminatory purpose or motive upon the record before us,[1] plaintiffs' challenge on Fourteenth Amendment grounds must fail.
B. TITLE VII STANDARDS OF REVIEW
In a Title VII review, a more probing judicial inquiry is required, and the mere showing of a disproportionate impact alone has been held to establish a prima facie case. Griggs v. Duke Power Co., 401 U.S. 424, 432, 91 S.Ct. 849, 28 L.Ed.2d 158 (1970). However, if applying Title VII standards to local and state agencies brings into play a standard more stringent than appropriate under the Fourteenth Amendment, there would appear to be a constitutional conflict with the Tenth Amendment. Although the Supreme Court has not yet addressed itself to this issue,[2] two district courts have. Harrington v. Vandalia-Butler Board of Education, 418 F.Supp. 603 (S.D.Ohio, 1976), and Scott v. City of Anniston, 430 F.Supp. 508, (N.D.Ala.1977). The Harrington case applied the strict standards of Griggs v. Duke Power Co., supra, to state agencies.
In the Scott case, the court applied the rule established in Washington v. Davis, supra, requiring proof of a discriminatory motive or purpose. In analyzing the problem, the court in Scott said:
"Whether the extension of Title VII to state and local government employment means that impact will not suffice and intent is currently the factor, is decidedly an open question. It hinges upon what Constitutional grant of power Congress has relied upon in extending the coverage of Title VII over state and local governments. If Congress is seen, as in Fitzpatrick v. Bitzer, 427 U.S. 445, [96 S.Ct. 2666, 49 L.Ed.2d 614] (1976), to have extended Title VII in implementation of the fourteenth amendment, no more stringent standard would be appropriate than that for which the fourteenth amendment calls, i. e., intent. If Congress is alternatively assumed to have acted in the exercise of its power to regulate interstate commerce, one comes to the Supreme Court's decision in National League of Cities v. Usery, 426 U.S. 833, [96 S.Ct. 2465, 49 L.Ed.2d 245] (1976), in which the Court struck down an attempt by Congress to regulate employment decisions of state and local governments under the commerce clause powers of Congress. Without the commerce clause as an appropriate alternative basis, it would appear that Congress's extension of Title VII to state and local governments cannot supplant the intent standard of Washington v. Davis, with the more stringent impact standard of Griggs v. Duke Power Company, supra.
In view of this analysis, this court believes that the intent standard, i. e., that there must be proof of discriminatory racial purpose as in Washington v. Davis, supra, should be applied in civil rights litigation brought under Title VII (or 42 U.S.C. § 1981). The Supreme Court held *64 in Fitzpatrick, supra, [427 U.S. at 453, [96 S.Ct. at 2670, 49 L.Ed.2d at 620], that the authority for the 1972 amendment extending Title VII to state and local governments was the fourteenth amendment * * *. Therefore, it is simple logic that a statute can be no broader than its Constitutional base. Consequently, since the extension of Title VII to state and local government rests upon the fourteenth amendment, the statute cannot be any broader than the Constitutional authority upon which it is based. It follows that in Title VII cases against a state or local government the statute is to be construed in accordance with the Constitutional test adopted by the Court in Washington, supra; i. e., there must be proof of discriminatory racial purpose." 430 F.Supp. at 514-515.
The Ninth Circuit has not addressed the constitutional question of the proper scope of Title VII as applied to state and local governments. The Circuit has considered the problem of the requirements of a prima facie case under Title VII, using a "probative" approach. United States v. Ironworkers Local 86, 443 F.2d 544 (9th Cir. 1971). In that case, the court upheld a trial court's finding that a prima facie case of discrimination had been established. The appellant sought a reversal on the ground that the prima facie case had been based upon statistics alone. In affirming the decision below, the court said:
"We are not faced with a situation where a court has relied upon statistical data alone. On the contrary, in its findings, the district court cited specific instances of discrimination on the part of the unions and the apprenticeship committees. Thus the statistical evidence is complementary rather than exclusive." 443 F.2d at 551.
The Fourth Circuit has adopted a similar approach in Roman v. ESB, Inc., 550 F.2d 1343 (4th Cir., 1976). After analyzing earlier decisions in that circuit, the Roman court suggests that statistical impact alone may be sufficient to establish a prima facie case only where the proof discloses "no objective standards based on education, experience, ability, length of service, reliability, or aptitude to account for the preferential employment . . ." 550 F.2d at 1350.
C. PLAINTIFFS' EVIDENCE
The only evidence plaintiff has offered to support the Title VII claim is statistical analyses of the effect of defendants' height and physical abilities requirements. Statistical comparisons and exhibits often give rise to an inference of racial discrimination. However, the same inference does not necessarily follow when a claim of sexual discrimination is asserted. Contrary to the usual situation involving racial discrimination against a Black, there are obvious physical differences between males and females. If these differences are relevant to an important governmental objective, then the inference of a discriminatory purpose is improper.
Furthermore, an inference raised from statistics is not conclusive proof of discrimination. It merely shifts the burden of proof to the defendant. Statistical evidence does not relieve the court of its obligation to determine whether the plaintiffs have established the truth of their allegations. The defendant may overcome a prima facie case by producing credible evidence which rebuts an inference of discrimination. The defendant is not required to produce a preponderance of such evidence; the risk of nonpersuasion remains with the plaintiff. Thus, the City may refute any inference of discrimination by introducing evidence that explains their employment practices on the basis of legitimate non-discriminatory grounds.
The plaintiff's proof, as noted earlier, consists solely of a showing of statistical impact. There is no separate evidence of a discriminatory pattern or policy. Even if we are to assume, arguendo, that the plaintiff's statistics give rise to an inference of illegal discriminatory motives, the inference has been rebutted by uncontroverted evidence in the record.
*65 D. DEFENDANTS' EVIDENCE
The defendants have offered abundant proof of the objectivity of the requirements of physical size and strength. Plaintiffs urge that the defendants' proof of the job-relatedness of its employment practices does not "validate" the practices in the manner recommended in the EEOC regulations. There is no magic in any validating procedure, and the defendants need only supply competent and relevant evidence on this issue. As the Supreme Court said in Washington v. Davis:
"It appears beyond doubt by now that there is no single method for appropriately validating employment tests for their relationship to job performance." 426 U.S. at 247, n.13, 96 S.Ct. at 2051.
The more obscure the justifications are, the more searching the inquiry must be. Conversely, the more obvious the relationship between the classification and the job requirements, the less searching the inquiry becomes.
The defendants' affidavits, for the most part, merely point out what is obvious and needs little proof. The affidavits suggest that a stronger and taller officer can more quickly and effectively control another person in the event of a confrontation. This officer is more likely to be able to do so without having to resort to extreme force, such as the use of a gun or a dangerous control hold. In self-defense situations, the taller and stronger officer is more likely to be successful. The taller the officer, the better his opportunity to observe, evaluate, and properly judge situations in the field. Furthermore, the series of tests to which plaintiffs object was designed by a professional kinesiologist employed by the City specifically to formulate a relevant physical ability test. The expert's opinion that the physical ability test has a direct and rational relationship to the tasks performed by Police Officers, affirms the obvious facts.[3]
Plaintiffs have also contended that defendants' evidence of job relatedness is refuted by the fact that several other police departments use men and women as Police Officers, with less stringent entrance requirements than the City of Los Angeles. Of course, an effective police force can be structured to include both male and female officers. However, this fact does not support plaintiffs' contention that physical size and strength have no relation to the job's requirements. In such an organization sex differences are almost certainly recognized. These characteristics probably influence the job assignments made at the administrative level. Certainly, a sane chief of police would not dispatch a group of women of average female height, weight, and strength to contain a public uprising such as the "Watts riots", when the same number of men possessing the height, weight, and strength of average males are available.
The Los Angeles Police Department could be so structured as to permit the employment of an equal percentage of male and female applicants. However, the City has chosen to have a police department where every officer is able to meet any confrontation with the minimum amount of necessary force. In reviewing the City's plan, this court must not lose sight of the well established rule that a government has traditionally been granted the widest latitude in the dispatch of its own internal affairs. Rizzo v. Goode, 423 U.S. 362, 96 S.Ct. 598, 46 L.Ed.2d 561 (1976).
*66 Rizzo involved a claim under 42 U.S.C. § 1983, for an alleged pattern of unconstitutional police mistreatment of minority citizens and city residents in general. The district court ordered the city to submit a program for handling citizen's complaints of police misconduct. A proposed program was thereafter negotiated between the parties and was included in the final judgment of the district court. The Supreme Court held this action was an unwarranted intrusion by the federal judiciary into the discretionary authority committed to the state under the Eleventh Amendment. The Court stated:
"When a plaintiff seeks to enjoin the activity of a government agency, even within a unitary court system, his case must contend with `the well-established rule that the Government has traditionally been granted the widest latitude in the "dispatch of its own internal affairs."' [citations omitted] The District Court's injunctive order here, significantly revising the internal procedures of the Philadelphia police department, was indisputably a sharp limitation on the department's `latitude in the "dispatch of its own internal affairs."'" 423 U.S. at 378-79, 96 S.Ct. at 608.
Our inquiry here cannot extend to the wisdom of the City's decision on the type of police force it desires, nor to possible alternatives directed toward the accomplishment of sociological goals. The question before us is simply, "Does the Los Angeles plan come within permissible constitutional and statutory limits?"
E. TITLE VII CONCLUSIONS
If the court applied the intent standard enunciated in Scott v. City of Anniston, supra, there is no evidence of an intent to discriminate, and the Title VII claim must fail. Assuming that the Ninth Circuit or the Supreme Court decides that the Duke Power Co. impact standard applies to state and local governments, the Title VII claim would still fail. The undisputed facts before this court are such that the court must conclude as a matter of law that the qualifying tests are appropriate for the selection of qualified applicants for the job in question. The situation here is similar to that in Washington v. Davis, supra, 426 U.S. at 245-46, 96 S.Ct. 2040, where the Supreme Court stated that it was "untenable" that a verbal abilities test for a police officer position was improper, even if it excluded a large number of Negroes.
V. CUT-OFF SCORES
The plaintiffs claim that the cut-off scores which have been established with respect to the physical abilities test are discriminatory, because they exclude a significantly greater percentage of women. The contention is that the defendants have failed to set these scores at a level reasonably consistent with the normal job requirements. Plaintiffs admit, however, that a cut-off score, although discriminatory, is permissible if the test is job related or "validated". This was made clear in Griggs v. Duke Power Co., where the Court said:
"Nothing in the Act precludes the use of testing or measuring procedures; obviously they are useful. What Congress has forbidden is giving these devises and mechanisms controlling force unless they are demonstrably a reasonable measure of job performance. Congress has not commanded that the less qualified be preferred over the better qualified simply because of minority origins. Far from disparaging job qualifications as such, Congress has made such qualifications the controlling factor, so that race, religion, nationality, and sex become irrelevant. What Congress has commanded is that any tests used must measure the person for the job and not the person in the abstract." 401 U.S. 424, 436, 91 S.Ct. 849, 856, 28 L.Ed.2d 158 (1971).
As noted earlier, the validity of these tests has been established by defendants' evidence. In addition, the tests were designed by professionals for the express purpose of testing applicants for the type of police work which is now being done in the Los Angeles area. Since the tests are job related, the setting of cut-off scores is a *67 matter for the employer's judgment. Many factors may go into this decision, such as the number of applicants available, the cost of failures in training and on the job, the critical nature of the job to be performed, and the level of performance at which the employer desires employees to perform.
VI. POLICE ACADEMY
The plaintiffs challenge the program at the Los Angeles Police Academy on the ground that its physical training requirements are set so high that more females fail to meet them than males. A resolution of this issue involves the same considerations which we have previously discussed. The Academy's training program, insofar as it relates to physical performance, is closely related to the job requirements. Therefore, the statistical impact upon women is not relevant.
VII. PERSONNEL POLICIES
Plaintiffs have attacked the defendants' personnel policies as they relate to job assignments, pay grades, promotions, and pensions. This challenge is predicated upon the assumption that the employment policies of the defendants at the entry level or at other times during a plaintiff's employment, have been impermissibly discriminatory. It is not contended that these policies, in and of themselves, contain provisions which create a disproportionate impact upon females. A finding that the employment policies of the defendants are in other respects proper is a complete response to this challenge.
VIII. NO AFFIRMATIVE ACTION REQUIRED
Plaintiffs have claimed that defendants' failure to take affirmative action constitutes unlawful discrimination. Plaintiffs contend that defendants should have accelerated hiring and promotion of women to remedy the effects of past discrimination.
Like some of the other contentions made by the plaintiffs, this charge assumes past illegal discrimination in hiring and promotions. In light of this court's finding that the evidence in the record before us fails to establish any prior illegal discriminatory practices in hiring and promotions, defendants are entitled to summary judgment on this issue.
IX. VETERAN'S PREFERENCES
Although plaintiffs' complaint attacks the use of veteran's preferences in the defendants' employment practices, plaintiffs have since withdrawn that attack and the issue is no longer before this court.
X. CONCLUSION
The keystone of the plaintiffs' case is their contention that a woman can perform all the tasks involved in the performance of the job of Police Officer. Plaintiffs therefore conclude that the City must establish employment practices which will result in an equal proportion of male and female applicants being accepted as Police Officers. Assuming, arguendo, that women can perform all of these tasks to some degree, the fact remains that many men, because of their physical characteristics, can perform certain important functions better than a large majority of women. As the Supreme Court said in Griggs v. Duke Power Co., supra at 436, 91 S.Ct. at 856:
"Congress has not commanded that the less qualified be preferred over the better qualified simply because of minority origins."
There is nothing in Title VII which would require an employer to hire a qualified woman in preference to a more qualified man. Title VII was enacted to eliminate sex as a factor in the employment context, not to establish it as a primary consideration.
The City of Los Angeles has decided to establish a police force with certain characteristics that are related to the proper exercise of its police powers. The fact that proportionately more men than women possess the desired characteristics does not invalidate the City's decision, unless there is some discriminatory intent not shown here.
*68 I find, therefore, that upon the record before this court there is no genuine issue as to any material fact to be litigated, and that the defendants are entitled to judgment as a matter of law.
Let summary judgment issue in favor of the defendants.
NOTES
[1] The record before this court contains no evidence of discriminatory intent. Plaintiffs argue that it was the avowed policy of the management officers prior to 1973 to exclude women "per se" from police work. The affidavits, however, do not support this contention. The statements attributed to Chief Davis give no indication that women "per se" were being excluded; his references to men and women were entirely consistent with the legitimate purposes of the then current classification. If anything, the evidence here shows an intent not to discriminate. For instance, the defendants challenge the minimum height requirement. The City has always had a minimum height requirement, even when all "Police Officers" were men. The minimum height was 5' 9" in 1919. This was lowered to 5' 8" in 1954, and to 5' 7" in 1971. It was lowered again in 1974 to the present requirement of 5' 6", for the specific purpose of lessening the impact on female applicants.
[2] In Fitzpatrick v. Bitzer, 427 U.S. 445, 96 S.Ct. 2666, 49 L.Ed.2d 614 (1976), the Supreme Court expressly stated that they were not presented with a contention ". . . that the substantive provisions of Title VII as applied here are not a proper exercise of congressional authority under § 5 of the Fourteenth Amendment." Id. at 456, 96 S.Ct. at 2671, n.11.
[3] Plaintiffs have filed an affidavit by George H. McGlynn, who purports to be an expert in the effects of stress and fatigue on muscle strength and endurance. Plaintiffs rely upon this affidavit to demonstrate a factual dispute with respect to the propriety of the defendants' physical tests. The McGlynn affidavit states:
"I will testify that the only job related preemployment physical test for a job such as a police officer is a cardiovascular efficiency test . . ."
This statement is inappropriate and without significance in this inquiry. The proposed test determines only whether the particular person is "physically fit". It fails to take into account the wide range of quality-performance variables among those applicants who could successfully pass the cardiovascular efficiency test proposed by the affiant. The defendants' selection tests determine the degree of performance-quality and permit the City to discover the best qualified applicants. In my view, this affidavit raises no issue of fact.
| {
"pile_set_name": "FreeLaw"
} |
646 A.2d 966 (1994)
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., Petitioner,
v.
The RIGGS NATIONAL BANK OF WASHINGTON, D.C., Respondent.
No. 93-SP-1278.
District of Columbia Court of Appeals.
Argued May 24, 1994.
Decided August 18, 1994.
*967 Edward G. Gallagher, Washington, DC, for petitioner.
Eva Petko Esber, with whom Nancy F. Preiss and Karen L. Peck, Washington, DC, were on the brief, for respondent.
Before STEADMAN, SCHWELB and FARRELL, Associate Judges.
STEADMAN, Associate Judge:
Before the court is a certified matter from the United States Court of Appeals for the District of Columbia Circuit relating to the applicability of the so-called "superior equities doctrine" in an action against a drawee bank by an insurance company as a conventional subrogee and assignee of its insured, a depositor in the bank. National Union Fire Ins. Co. v. Riggs Nat'l Bank, 303 U.S.App. D.C. 302, 5 F.3d 554 (1993). We conclude, given the facts described below, that under District of Columbia law, the superior equities doctrine does not apply to this action.
I.
The facts relevant to the questions certified are as follows.[1] Between April 20, 1990, and May 14, 1990, unknown individuals cashed 14 fraudulent checks,[2] totalling $640,712.38, drawn on the account of NHP Property Management, Inc. ("NHP") at the defendant Riggs National Bank ("Riggs"). On June 22, 1990, NHP requested that Riggs recredit its account for the loss. After Riggs formally denied the request on November 15, 1990, NHP submitted its proof of loss to National Union Fire Insurance Company ("National Union") and was paid $597,980 ($640,712.38 less $32,732.38 recovered from a third-party bank and a $10,000 deductible).
Section 14 of NHP's policy with National Union provides in relevant part:
In the event of any payment under this Policy, the Company shall be subrogated to all the Insured's rights of recovery therefor against any person or organization and the Insured shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights.
Pursuant to this provision, NHP assigned National Union all its rights against Riggs and agreed to be bound by the result of the suit.
National Union filed this suit against Riggs as an assignee and, by virtue of Section 14 of the policy, as a conventional subrogee of NHP. After a bench trial, the district court found that Riggs had complied with reasonable commercial standards in processing the checks and therefore was not negligent. The district court further held that, despite the clear presumption in the Uniform Commercial Code ("UCC") favoring the depositor *968 against the bank,[3] District of Columbia law requires a balancing of the equities when the depositor's insurer brings suit to recover from a bank, either by way of assignment or subrogation. Therefore, under the superior equities doctrine, as between two innocent partiesNational Union and Riggsthe equities balanced in favor of Riggs. National Union appealed, asserting that the superior equities doctrine does not apply when the insurer sues as an assignee and conventional subrogee, as opposed to an equitable subrogee.
Pursuant to D.C.Code § 11-723 (1989), the United States Court of Appeals for the District of Columbia Circuit certified the following questions to us:
I. Under District of Columbia law, and given the facts described, does the superior equities doctrine apply to an action by an insurer as an assignee and conventional subrogee of its insured?
II. Under District of Columbia law, and given the facts described, does the adoption of the Uniform Commercial Code abrogate or modify the superior equities doctrine?
II.
A.
Subrogationthe substitution of one person in the place of another with reference to a lawful claim, demand, or right so that the substituted party succeeds to the rights of the other, BLACK'S LAW DICTIONARY 1427 (6th ed. 1990)developed as a device of equity "established as a matter of necessity for the purpose of administering essential justice." 11 JOHN ALAN APPLEMAN AND JEAN APPLEMAN, INSURANCE LAW AND PRACTICE § 6502 (1981); see John D. O'Malley, Subrogation Against Banks on Forged Checks, 51 CORNELL L.Q. 441, 444 (1966). Where one party has paid the debt of another, justice requires that the payor be able to recover his loss from the one who should have paid it, to prevent unjust enrichment.[4] APPLEMAN, supra, § 6502; see Washington Mechanics' Savings Bank v. District Title Ins. Co., 62 App.D.C. 194, 196, 65 F.2d 827, 829 (1933). The rights of the party who paid the debt in no way depend upon showing a contract provision or formal assignment; evidence of payment is sufficient. London Guarantee and Accident Co. v. Enterprising Servs. Inc., 192 A.2d 292, 293 (D.C.1963).
Where, therefore, the right of the party seeking subrogation stems solely from this equitable principle, it is understandable that the thought arose that the doctrine may be invoked only where the equities of the party seeking to benefit are "greater than those of its adversary." Schrier v. Home Indemnity Co., 273 A.2d 248, 251 (D.C.1971); Washington Mechanics' supra, 62 App.D.C. at 196, 65 F.2d at 829. Otherwise, equity perceives no reason to vary the status quo. This so-called "superior equities doctrine" may be seen in its manifestation as the "compensated surety defense," which is invoked to bar a compensated surety from recovering from a third party who would be liable in a suit directly by the insured, unless the surety can show equities superior to the third party. We have applied this principle in several cases in this jurisdiction, most notably Washington Mechanics, Schrier, and American Sec. Bank v. American Motorists Ins. Co., 538 A.2d 736 (D.C.1988).
However, the case now before us is different. Here, the claim of the surety does *969 not depend upon invoking an equitable principle of unjust enrichment. Rather, it flows from the express agreement of the insured that the surety shall be subrogated, here accompanied by an assignment to the surety of the insured's cause of action against the bank. This "conventional subrogation" arises from an express or implied agreement between the payor and the debtor or creditor, in contrast to "equitable subrogation," which arises from the mere fact of payment by a third party. APPLEMAN, supra, § 6501.
In a case involving facts quite similar to those here, we recently took note of the potential difference between these two quite distinct doctrinal bases for invocation of the right to recover from a third party. In American Sec. Bank, supra, an insured depositor discovered twenty-four forged checks and notified the bank. 538 A.2d at 737. After the bank refused to recredit the depositor's account for the amount it had paid on the forged checks, the depositor was reimbursed by the insurer for the full amount. The insurer then sued the bank for that amount. The bank challenged the insurer's right to do so. We noted:
Because the insurer did not produce the necessary declarations page of its insurance policy with ASPEN [the insured], the trial court deemed the policy inadmissible. The insurer thus failed to prove conventional subrogation. See 16 COUCH ON INSURANCE 2D §§ 61:2, 61:3 (Rev. ed. 1983) (distinguishing conventional subrogation arising out of contract from subrogation by operation of law). Nevertheless, under equitable principles, the insurer's payment to ASPEN for its insurance claim conferred upon it "instanter" the right to sue in ASPEN's stead.
Id. at 737 n. 1.[5] Since equitable subrogation was thus involved, we then went on to deal with the bank's argument, based on the superior equities doctrine, without suggesting, however, that the doctrine would necessarily also have applied had the insurer proven conventional subrogation. That is the issue we must decide on this certified matter.
B.
As American Sec. Bank indicates and as the United States Court of Appeals observed in its order of certification, we agree that prior case law has not definitively resolved the issue here. Although admittedly a broader reading is possible, we think the decisions have rested upon a factual postulate of equitable subrogation and its concomitant analysis,[6] and we do not view their inclusion in supporting citations of cases in other jurisdictions involving conventional subrogation as determinative of the issue before us, particularly where conventional subrogation is coupled with an express assignment.[7]
Case law from other jurisdictions presents a mixed picture, with three basic approaches to the issue. First, a few states do not apply the superior equities doctrine to equitable subrogation, conventional subrogation, or assignment. Indeed, commentators have noted that not only has the compensated surety defense "outlived any usefulness that it may once have had," but in the modern world "the `superior equity' doctrine is arbitrary in giving to an insured the choice of allocation of ultimate loss, and unjust in increasing the burden of the insured because of his foresightedness in insuring," E. Allan Farnsworth, Insurance Against Check Forgery, 60 *970 COLUM.L.REV. 284, 324 (1960); moreover, in light of the fact that the vast majority of modern banks are insured against forgery, shifting the loss from one surety to another makes little sense, O'Malley, supra, at 463. See also, e.g., Hartford Fire Ins. Co. v. Riefolo Constr. Co., 81 N.J. 514, 410 A.2d 658, 662 (1980) (rejecting doctrine of superior equities and allowing subrogation as long as insured and insurer have not engaged in behavior which would make such relief unconscionable); South Carolina Nat'l Bank v. Lake City State Bank, 251 S.C. 500, 164 S.E.2d 103, 106 (1968) ("serious challenges have been levied against the usefulness and practicality of the compensated surety defense under modern banking practices").
Some jurisdictions have chosen a second approach and adopted the superior equities doctrine in all cases of equitable or conventional subrogation or assignment. The leading case in this line, Meyers v. Bank of Am. Nat'l Trust & Sav. Ass'n, 11 Cal.2d 92, 77 P.2d 1084, 1085-86 (1938) (per curiam), reasons that assignment is just another type of subrogation and hence all rights therefrom depend upon equitable principles rather than an asserted legal right under an assignment. See, e.g., Castleman Constr. Co. v. Pennington, 222 Tenn. 82, 432 S.W.2d 669, 676 (1968) (conventional subrogation is essentially an equitable claim). A second theory for applying the superior equities doctrine to assignment and conventional subrogation is that payment by an insurer to its insured destroys any claim its insured would have had against the bank, leaving no claim for the insured to assign. Bank of Fort Mill v. Lawyers Title Ins. Corp., 268 F.2d 313, 316 (4th Cir.1959). The only remaining possibility for recovery by the insurer then becomes subrogation, which presumes a destruction of the claim. Id.; see, e.g., American Sur. Co. v. Bank of California, 133 F.2d 160, 164 (9th Cir.1943) (claim destroyed by payment, so no assignment possible).
We think such reasoning takes insufficient regard of the significant doctrinal difference between subrogation by operation of law and that dependent upon agreement. We particularly note that a number of jurisdictions have recognized the importance of agreement of the parties that underlies conventional subrogation and assignment. O'Malley, supra, at 458; cf. Spirek v. State Farm Mutt. Auto. Ins. Co., 65 Ill.App.3d 440, 21 Ill.Dec. 817, 823, 382 N.E.2d 111, 117 (1978) ("common law concepts of subrogation cannot be employed to create rights of subrogation where the insurance policy provides otherwise"); Commissioner of Ins. v. Conveyancers Title Ins. & Mortgage Co., 300 Mass. 457, 15 N.E.2d 820, 826 (1938) (applying the terms of the "legal instruments by which the parties have seen fit to bind themselves" rather than general principles of subrogation). As a leading authority has recognized:
In some jurisdictions the subrogation claimant is in a better position when he claims by way of conventional rather than legal subrogation. For example, there is authority that an action based upon conventional subrogation clearly established by an agreement reduced to writing or otherwise shown, in which no equitable relief is prayed, is a legal action, not controlled by principles of equity, and that a conventional subrogee does not have the burden of showing the superior equity in himself as plaintiff to authorize a recovery.
COUCH ON INSURANCE, supra, § 61.3. Where "it is unquestioned that the right possessed by the insured against the bank [on forged checks] is legally assignable to anyone . . . . , it is difficult to comprehend why a distinction is made in some jurisdictions to the effect that a paid surety must take the assignment subject to a defense which could not be interposed against any other assignee." Id. at 459.
Thus, a third approach is found in states which analyze equitable subrogation and conventional subrogation or assignment separately and do not apply the superior equities doctrine to the latter two cases. See, e.g., American Sur. Co. v. Baker, 172 F.2d 689, 692 (4th Cir.1949) (applying North Carolina law; where the chose of action was assignable, the plaintiff had full legal title under the assignment, so court had "no occasion to invoke the doctrine of subrogation," thus not discussing law for equitable subrogation); First Nat'l Bank, supra, 30 S.E.2d at 406-07 (conventional subrogation and assignment *971 are actions at law, not in equity, so no superior equities required to recover, but suggesting equity would require such a balancing); National Sur. Co. v. Bankers' Trust Co., 228 N.W. 635, 637 (Iowa 1930) (allowed a surety company which had paid its insured and received an assignment, to sue the bank that had paid on the forged drafts although the surety conceded that it would not have been able to prevail under a subrogation claim); Aetna Casualty & Sur. Co. v. Lindell Trust Co., 348 S.W.2d 558, 570-71 (Mo.Ct.App. 1961) (no showing of superior equities was required on a claim of conventional subrogation because it stands on a contract not equity); Grubnau v. Centennial Nat'l Bank, 279 Pa. 501, 124 A. 142, 144 (1924) (subrogation was not at issue where insurer had assignment, so superior equities were not involved); see generally Gregory R. Veal, Subrogation: The Duties and Obligations of the Insured and Rights of the Insurer Revisited, 28 TORT & INS. L.J. 69, 75-76 (Fall 1992) (discussing states which distinguish equitable subrogation from conventional subrogation and assignment).
A leading well-reasoned case is Liberty Mutual Ins. Co. v. Thunderbird Bank, 113 Ariz. 375, 555 P.2d 333, 334-35 (1976) (en banc). Where an unauthorized employee endorsed company checks for his own use, the insurer paid the depositor company and was contractually subrogated to the depositor's rights against the bank that had paid on the checks. Id. The Supreme Court of Arizona analyzed various decisions which prevented an assignee from recovering unless it was also entitled to recovery in equity as a subrogee as well, and compared them to rulings which allowed assignees or conventional subrogees to recover without a balancing of equities. Id. 555 P.2d at 336-37. The court chose to follow the latter line of cases, holding that the compensated surety defense applies only to equitable subrogees and not to assignees. Id. 555 P.2d at 337. The court saw
no reason why Thunderbird [the bank] should be relieved of its unquestioned liability merely because the principal plaintiff, Bruning [the depositor], took the precaution of insuring itself against the risk of loss. Put another way, but for the contract between Bruning and Liberty [the insurer], Thunderbird would clearly have been liable for the amount of the checks to Bruning: it therefore suffers no prejudice when that liability is shifted from Bruning to Liberty under the terms of the contract between those two parties.
Id. 555 P.2d at 337-38. Because the insurer's rights were "measured by the law of contract and not by the equitable doctrine of subrogation," it could sue as an assignee without first showing superior equities. Id.
We agree with the Arizona Supreme Court and are persuaded to follow the line of cases holding that the superior equities doctrine, although applicable to equitable subrogation claims,[8] has no application in cases of conventional subrogation and assignment. Conventional subrogation and assignment are based on contractual agreements between parties and do not derive their validity from principles of equity. Where the bank would be liable to the depositor and the depositor agrees to assign or contract its rights to its insurer, we see no sound reason for allowing the bank to prevail against the insurer. Enforcing the agreement does not saddle the bank with any new or unexpected liability. Further, it will carry out the intent of the insurance contract, under which the insurer has effectively agreed to assume ultimate liability only where the law otherwise would place that liability upon the insured. Because the assignee stands in the same position as the assignor, the bank's liability with or without the assignment will depend upon its duty to the depositor. District of Columbia law evinces a policy of free assignability of claims. See D.C.Code §§ 28-2303, -2304 (1991); Flack v. Laster, 417 A.2d 393, 399 (D.C.1980).[9] Under this principle, *972 the insurer as successor to the depositor's rights should not be subject to the superior equities doctrine which the bank could not have raised to defeat a suit by the depositor. Relevant here, the UCC has spelled out in detail and resolved conflicting views as to the circumstances under which a depository bank should be held liable to its depositor in cases of forgeries. See note 3 supra. The relative certainty thus provided should not be discarded for an amorphous balancing of equities where, by express agreement, an insurer stands squarely in the depositor's shoes.
For the above reasons, we answer the first certified question in the negative.[10] The Clerk is hereby directed to transmit a copy of this opinion to the United States Court of Appeals for the District of Columbia Circuit and to the parties.
So ordered.
NOTES
[1] The facts are those set forth by the United States Court of Appeals for the District of Columbia in its certification of this case. National Union, supra, 303 U.S.App.D.C. at 303-04, 5 F.3d at 555-56.
[2] The trial court's ruling indicates that the forgeries were of the drawer's signature.
[3] Although the trial court does not appear to have squarely so stated, we must assume for present purposes that absent the superior equities doctrine, judgment would have been entered in favor of the insured. This would reflect the long-extant rule, stemming from the famous English case, Price v. Neal, 3 Burr. 1354 (1762), and carried forward in the UCC, that even a nonnegligent drawee is liable for payment on the forged signature of its depositor, at least absent negligence by the depositor. See 1 JAMES J. WHITE & ROBERT S. SUMMERS, UNIFORM COMMERCIAL CODE § 17-2, at 826 (3d ed. 1988).
[4] One case noted "[i]t is difficult to understand why" subrogation was originally more commonly allowed for tort claims than for contract claims although "assignment of tort claims was frowned upon at law while the assignment of choses in action and of many kinds of contracts was encouraged." Standard Accident Ins. Co. v. Pellecchia, 15 N.J. 162, 104 A.2d 288, 296 (1954). It may be that resistance to the assignment of tort claims made the need for an equitable remedy in such cases all the greater.
[5] Included in the cited sections of COUCH ON INSURANCE is a recognition of the authority we follow in this opinion. See pages 8-9, infra.
[6] In addition to the above cited cases, appellee relies on Anacostia Bank v. United States Fidelity & Guaranty Co., 73 App.D.C. 388, 119 F.2d 455 (1941), as applying the superior equities doctrine to an assignment. In fact, the subrogee claimed both by way of subrogation and as assignee. Citing cases in which other jurisdictions allowed equitable subrogation against a third party that knew of or benefitted from the act causing loss, the court determined that equitable subrogation against the bank would be permitted, and thus did not reach the broader issue of assignment. Id. at 389, 119 F.2d at 456.
[7] While the presence of an assignment in our view unquestionably precludes the application of the superior equities doctrine, we fail to see any ready reason why conventional subrogation, also dependent on agreement, should not be likewise treated. We therefore shall treat the two as synonymous for purposes of this opinion. See First Nat'l Bank v. American Sur. Co., 71 Ga.App. 112, 30 S.E.2d 402, 407 (1944).
[8] We as a panel are of course bound by the prior decisions cited above applying the superior equities doctrine to such claims. M.A.P. v. Ryan, 285 A.2d 310, 312 (D.C.1971).
[9] While no code section or reported case deals expressly with the assignability of tort claims, D.C.Code § 28-2304 allows the assignee to sue in his own name on the choses in action included in a general assignment. In addition, it is indisputable that "the whole development of modern law has been in the direction of the freer assignability of choses in action." Baker, supra, 172 F.2d at 691. That case went on to explain:
All things in action which survive and pass to the personal representatives of a decedent creditor as assets, or continue as liabilities against the representatives of a decedent debtor, are in general thus assignable. All which do not thus survive, but which die with the person of the creditor or of the debtor, are not assignable. The first of these classes, according to the doctrine prevailing throughout the United States, includes all claims arising from contract express or implied, with certain welldefined exceptions; and those arising from torts to real or personal property, and from frauds, deceits, and other wrongs whereby an estate, real or personal, is injured, diminished, or damaged. Id. at 691-92 (quoting 4 JOHN N. POMEROY, EQUITY JURISPRUDENCE § 1275 (5th ed. 1941)). Hence, the general rule allows assignment of most tort claims. In any event, appellee does not dispute the validity of the assignment here.
[10] Since we answer the first question in the negative, the second question no longer appears to be "determinative of the cause pending in such certifying court" as required by D.C.Code § 11-723(a) and we therefore do not reach it.
| {
"pile_set_name": "FreeLaw"
} |
COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-13-00227-CR
Karrington McKinley Braziel § From the 297th District Court
§ of Tarrant County (1263688D)
v. § August 7, 2014
§ Per Curiam
The State of Texas § (nfp)
JUDGMENT
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
| {
"pile_set_name": "FreeLaw"
} |
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-6132
ALEXANDER OTIS MATTHEWS,
Plaintiff – Appellant,
v.
UNITED STATES OF AMERICA,
Defendant – Appellee,
and
RYAN FAULCONER, AUSA; CARLA COOPWOOD, U.S. Probation
Officer; BENNETT BROWN, Attorney; CHRISTINE WINDNESS, FBI
Special Agent; JOHN DOE, Unknown Agent of Maryland State
Attys. Office; JANE DOE, Unknown named agents of Maryland
State Attys. Office; MICHAEL PAUZE, AUSA; ALICIA
WOJTKONSKI, FBI Special Agent; ROD ROSENSTEIN, in His
Official Capacity; NEIL MCBRIDE, in His Official Capacity;
DISTRICT OF MARYLAND US ATTORNEYS OFFICE, in its Official
Capacity; EASTERN DISTRICT OF VIRGINIA (ALEXANDRIA) US
ATTORNEYS OFFICE, in its Official Capacity; BENNETT BROWN,
in his Individual Capacity; RYAN FAULCONER, In his
Individual Capacity,
Defendants.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Liam O’Grady, District
Judge. (1:12-cv-01473-LO-TCB)
Submitted: May 19, 2015 Decided: May 22, 2015
Before NIEMEYER and HARRIS, Circuit Judges, and DAVIS, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
Alexander Matthews, Appellant Pro Se. Ayana Niambi Free,
Assistant United States Attorney, Sosun Bae, Andrew Sun Han,
OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
Alexander Matthews appeals the district court’s order
granting the United States’ motion to dismiss his Federal Tort
Claims Act suit for lack of jurisdiction. We have reviewed the
record and find no reversible error. Accordingly, we affirm for
the reasons stated by the district court. Matthews v. United
States, No. 1:12-cv-01473-LO-TCB (E.D. Va. Jan. 13, 2015). We
dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before
this court and argument would not aid the decisional process.
AFFIRMED
3
| {
"pile_set_name": "FreeLaw"
} |
19-438
Simmons v. Trans Express Inc.
United States Court of Appeals
For the Second Circuit
August Term 2019
Argued: January 17, 2020
Decided: April 13, 2020
No. 19-438
CHARLENE SIMMONS,
Plaintiff-Appellant,
v.
TRANS EXPRESS INC.,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of New York
No. 18-cv-5938, Eric N. Vitaliano, Judge.
Before: HALL, SULLIVAN, AND BIANCO, Circuit Judges.
Plaintiff-Appellant Charlene Simmons sued Defendant-Appellee Trans
Express Inc. under the Fair Labor Standards Act and the New York Labor Law,
alleging that she was entitled to unpaid overtime wages, liquidated damages, and
attorneys’ fees. Trans Express moved to dismiss the complaint under Rule 12(b)(6)
of the Federal Rules of Civil Procedure, contending that Simmons’s suit is barred
by claim preclusion because of a previous case involving the same parties in
Queens Small Claims Court. The district court (Eric N. Vitaliano, J.) granted Trans
Express’s motion. On appeal, Simmons maintains that neither the state statute
pertaining to New York City small claims court judgments nor “traditional” claim
preclusion principles bar her federal suit. Because Simmons’s appeal turns on a
question of New York law for which no controlling decisions of the New York
Court of Appeals exist, and about which courts in the New York Appellate
Division are divided, we CERTIFY the question to the Court of Appeals.
QUESTION CERTIFIED.
ABDUL K. HASSAN, Abdul Hassan Law Group,
PLLC, Queens Village, New York, for Plaintiff-
Appellant Charlene Simmons.
EMORY D. MOORE, JR. (P. Kevin Connelly, on the
brief), McDermott Will & Emery LLP, Chicago,
Illinois, for Defendant-Appellee Trans Express Inc.
RICHARD J. SULLIVAN, Circuit Judge:
Plaintiff-Appellant Charlene Simmons sued Defendant-Appellee Trans
Express Inc. under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.,
and the New York Labor Law (“NYLL”), alleging that she was entitled to unpaid
overtime wages, liquidated damages, and attorneys’ fees. Trans Express moved
to dismiss the complaint under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, contending that Simmons’s suit is barred by claim preclusion because
of a previous case involving the same parties in Queens Small Claims Court. The
district court (Eric N. Vitaliano, Judge) granted Trans Express’s motion,
2
determining that (1) claim preclusion applies to judgments rendered in New York
small claims court, (2) no exception to claim preclusion applied to Simmons’s
federal suit due to the limits on recovery in small claims court, and (3) claim
preclusion barred Simmons’s suit because her claims arose from the same facts as
the small claims court action and could have been raised in that action. On appeal,
Simmons maintains that New York City Civil Court Act § 1808 (“Section 1808”) –
the relevant state res judicata statute pertaining to New York City small claims
court judgments – does not bar her federal suit. Because this issue turns on a
question of state law for which no controlling decisions of the New York Court of
Appeals exist, and about which New York’s Appellate Division is divided, we
certify the proper interpretation of Section 1808 to the Court of Appeals, pursuant
to 22 N.Y.C.R.R. § 500.27 and 2d Cir. R. 27.2(a).
I. BACKGROUND
Simmons worked for Trans Express, a transportation services company
headquartered in Brooklyn, as a driver from April 2012 to April 2013 and again
from June 2016 to June 2018. After her employment with Trans Express ended,
Simmons sued Trans Express in August 2018 in Queens Small Claims Court,
seeking “monies arising out of nonpayment of wages.” App’x at 18. After trial
3
before a small claims arbitrator, the court awarded Simmons a $1000 judgment
and a $20 disbursement. Trans Express paid this amount and satisfied the
judgment on September 28, 2018.
Thereafter, on October 24, 2018, Simmons filed this federal suit. She alleged
that, despite her working in excess of forty hours a week, Trans Express did not
pay her time-and-a-half for her overtime hours, thereby violating the unpaid
overtime provisions of the FLSA and several provisions of the NYLL. She sought
a declaratory judgment as well as an award of unpaid wages, liquidated damages,
interest, costs, and attorneys’ fees.
Trans Express moved to dismiss the complaint pursuant to Rule 12(b)(6),
contending that Simmons’s prior small claims court action barred her federal suit
under the doctrine of claim preclusion. The district court agreed and granted
Trans Express’s motion. First, the district court determined that “res judicata
applies to judgments of New York’s small claims courts” and that Section 1808,
which provides that judgments in small claims courts “shall not be deemed an
adjudication of any fact at issue or found therein in any other action or court,”
concerned only issue preclusion, not claim preclusion. Id. at 25. Consequently,
the fact that a small claims court adjudicated Simmons’s prior claim did not
4
“rescue th[e] action from the bar of res judicata, if the bar [was] otherwise
applicable.” Id. at 26.
Second, the district court rejected Simmons’s claim that “res judicata d[id]
not apply because the small claims court was only empowered to award $5,000 in
damages and the present action seeks greater relief.” Id. Though the court
acknowledged that “formal jurisdictional or statutory barriers” precluding a
plaintiff from asserting a claim in a previous action could prevent the application
of res judicata, id. (quoting Weitz v. Wagner, No. 07-cv-1106 (ERK) (ETB), 2008 WL
5605669, at *3 (E.D.N.Y. July 24, 2008), report and recommendation adopted, ECF No.
54 (E.D.N.Y. Aug. 11, 2008)), it determined that New York does not consider the
small claims court damages limit to meet that requirement.
Third, the district court determined that, because the claims in Simmons’s
federal suit arose from her employment at Trans Express and had accrued prior to
the small claims court action, Simmons could have asserted the claims in the prior
proceeding. Therefore, her federal suit was barred by claim preclusion.
Fourth, the district court disagreed with Simmons’s contention that “federal
wage and hour policy neutralizes any res judicata effect of the prior small claims
judgment,” id. at 31, rejecting her interpretation of Caserta v. Home Lines Agency,
5
Inc., 273 F.2d 943 (2d Cir. 1959). Instead, the district court construed Caserta to
“simply stand[] for the proposition that employers cannot relieve themselves of
their obligations under [the] FLSA by contract.” App’x at 32.
Finally, the district court determined that the small claims court’s failure to
describe in detail the reasons for its decision did not preclude the district court
from applying claim preclusion, because “there is no need to determine the
grounds for” a court’s judgment before giving it preclusive effect. Id. at 33.
On appeal, Simmons challenges the district court’s determination that claim
preclusion bars her federal suit, raising three broad arguments. First, Simmons
asserts that Section 1808 provides for a narrow form of res judicata that allows
subsequent claims “involving the same facts, issues and parties,” and therefore,
does not bar her current case. Simmons’s Br. at 14–23. Second, she maintains that
even if Section 1808 mirrors “traditional” principles of claim preclusion, her
current suit is not barred because she did not assert, and could not have asserted,
the claims raised here in her small claims case. Id. at 24–31. Third, again relying
on Caserta, she asserts that claim preclusion is not a cognizable defense to FLSA
and NYLL claims because it is incompatible with the policy goals of those statutes.
6
II. STANDARD OF REVIEW
“We review de novo the dismissal of a complaint under Rule 12(b)(6),
accepting all allegations in the complaint as true and drawing all inferences in
favor of the plaintiff.” TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 498 (2d Cir.
2014). “Our review of a district court’s application of res judicata is also de novo.”
Id.
III. DISCUSSION
A. The New York Courts’ Conflicting Interpretations of Section 1808
“Under the doctrine of res judicata, or claim preclusion, a final judgment on
the merits of an action precludes the parties or their privies from relitigating issues
that were or could have been raised in that action.” Id. at 499 (quoting St. Pierre v.
Dyer, 208 F.3d 394, 399 (2d Cir. 2000)). Because a New York small claims court
decided Simmons’s previous action, New York law determines the preclusive
effect of that judgment. See Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75,
81 (1984) (“[A] federal court must give to a state-court judgment the same
preclusive effect as would be given that judgment under the law of the State in
which the judgment was rendered.”). Consequently, to answer whether claim
preclusion bars Simmons’s federal suit, we must first determine what preclusive
7
effect New York courts give to judgments rendered in New York small claims
court.
Section 1808, the New York state statute governing the preclusive effects of
New York City small claims court judgments, states:
A judgment obtained under this article shall not be deemed an
adjudication of any fact at issue or found therein in any other action
or court; except that a subsequent judgment obtained in another
action or court involving the same facts, issues and parties shall be
reduced by the amount of a judgment awarded under this article.
Simmons asserts that Section 1808 narrowed the preclusive effects of res judicata
for small claims court judgments and allows for “subsequent litigation of claims
that arise out of the same or related facts with claims in the prior [small claims
court] action.” Simmons’s Br. at 14. She supports her interpretation of the statute
by first contending that “small claims judgments only have res judicata effect as to
‘the exact same claim in subsequent proceedings.’” Id. at 16 (quoting Farbstein v.
Hicksville Pub. Library, 323 F. Supp. 2d 414, 423 (E.D.N.Y. 2004)). She next asserts
that the plain language of Section 1808 “specifically allows [her] to bring a claim
in a subsequent action involving the same issues and parties and even the same
facts” and points to the fact that the statute includes a “set-off provision” reducing
future awards “by the amount of a judgment awarded under this article.” Id. at
8
21–22 (quoting Section 1808). She last appeals to the “structure, purpose and
intent” of the small claims court, urging that “the purpose of . . . [Section] 1808 and
small claims court is to allow for expedited recovery of small claims through the
informal process of small claims court without an attorney, while preserving
bigger statutory claims for other higher courts.” Id. at 23.
It cannot be doubted that Simmons’s textual contentions have persuasive
force. Section 1808 clearly contemplates a subsequent action “involving the same
facts, issues and parties” as the small claims court action. The statute even
provides for a set-off in those circumstances: “a subsequent judgment . . . shall be
reduced by the amount of a judgment awarded” in small claims court. The text’s
plain meaning thus strongly supports Simmons’s interpretation.
The New York Court of Appeals has yet to interpret Section 1808, and
despite the appeal of Simmons’s textual interpretation, the conflicting decisions of
the Appellate Division leave us unable to predict how the high court would rule.
See Michalski v. Home Depot, Inc., 225 F.3d 113, 116 (2d Cir. 2000) (“Absent law from
a state’s highest court, a federal court sitting in diversity has to predict how the
state court would resolve an ambiguity in state law.”). Although the Appellate
9
Division decisions to date all agree that small claims court judgments have some
preclusive effect, they differ as to the contours of that effect.
For example, in Katzab v. Chaudhry, No. 10383/2006, 2006 WL 6102979 (N.Y.
Sup. Ct. Sept. 21, 2006), the plaintiff, who had a contract with a doctor for cosmetic
surgery, sued the doctor in small claims court for breach of contract, personal
injury, and medical malpractice. She withdrew the medical malpractice and
personal injury claims, which she subsequently asserted in a second action in state
Supreme Court. The small claims court then rendered a judgment on the breach
of contract claim. In the Supreme Court case, the defendant contended that the
“action should be dismissed because it is based on the same set of facts . . . as set
forth in the [small claims court] action, [and therefore is] barred by res judicata.”
Id. The Supreme Court agreed and dismissed the case under Section 1808, but the
Second Department reversed, relying on the same statute. Katzab v. Chaudhry, 849
N.Y.S.2d 804, 804 (2d Dep’t 2008). The Second Department reaffirmed Katzab in
Merrimack Mutual Fire Insurance Co. v. Alan Feldman Plumbing & Heating Corp., 961
N.Y.S.2d 183, 184 (2d Dep’t 2013), explaining that the “claims in [Katzab] were not
the same as the ones previously asserted in [the] small claims action[].” In other
words, even though the breach of contract, personal injury, and medical
10
malpractice claims in Katzab arose from the same facts, the claims were not the
“same” for purposes of Section 1808. See id.
The First and Third Departments, however, have interpreted Section 1808
quite differently. In Tovar v. Tesoros Property Management, LLC, 990 N.Y.S.2d 307,
308 (3d Dep’t 2014), the plaintiff sued his employer for unpaid wages for a specific
time period in small claims court, and then sued that same defendant for unpaid
wages for a different time period in state Supreme Court. The Third Department
rejected plaintiff’s claim that the previous small claims court judgment did not
preclude the claim he was asserting in Supreme Court under Section 1808,
explaining that it was “evident that the claim brought by plaintiff in [small claims
court] and the instant action ar[o]se out of the same series of transactions in
connection with his work for defendants.” Id. at 309. The court further rejected
plaintiff’s contention that Section 1808 divests small claims court judgments of any
res judicata effect and held that “the language of th[e] statute . . . only prevents
small claims judgments from having issue preclusion effect (collateral estoppel),
but not from having claim preclusion effect (res judicata), in subsequent actions.”
Id. at 310.
11
In Platon v. Linden-Marshall Contracting Inc., 109 N.Y.S.3d 41 (1st Dep’t 2019),
the First Department held similarly, determining that “[a]lthough judgments of
the small claims court are statutorily prohibited from having collateral estoppel or
issue preclusive effect, [Section 1808] does not divest the small claims judgment of
its res judicata, or claim preclusion, effect,” id. at 42 (internal quotation marks and
citations omitted). The court concluded that “plaintiff’s negligence, fraudulent
inducement, and General Business Law claims [were] barred by the doctrine of res
judicata, as they arose out of the same transaction or occurrence as plaintiff’s prior
breach of contract claim.” Id. The First Department has also held that where a
plaintiff asserted a claim in small claims court and received a judgment, Section
1808 barred the plaintiff from asserting the same claim in Supreme Court for
higher damages. Chapman v. Faustin, 55 N.Y.S.3d 219, 220 (1st Dep’t 2017).
We are thus left to survey a landscape of conflicting Appellate Division
decisions. All the New York courts that have interpreted Section 1808 agree that
it has some preclusive effect, despite the statute’s clear language that “a subsequent
judgment obtained in another action or court involving the same facts, issues and
parties” would seemingly not be precluded but merely be “reduced by the amount
of a judgment awarded” in small claims court. However, the New York courts do
12
not agree on the details of Section 1808’s preclusive effect. On the one hand, the
Second Department interprets Section 1808 not to preclude a plaintiff from
asserting claims in Supreme Court that arise out of the same facts or occurrences
as claims previously asserted in small claims court. See Katzab, 849 N.Y.S.2d at 804.
On the other hand, the First and Third Departments interpret Section 1808 to bar
such claims. See Platon, 109 N.Y.S.3d at 42; Tovar, 990 N.Y.S.2d at 309. Given these
divergent understandings of Section 1808, we are unable to predict based on the
current state of New York case law how the Court of Appeals would interpret
Section 1808.
B. Certification to the New York Court of Appeals
“Although the parties did not request certification, we are empowered to
seek certification nostra sponte.” 1 Corsair Special Situations Fund, L.P. v. Pesiri, 863
F.3d 176, 182–83 (2d Cir. 2017) (citation omitted). Under the New York Court of
Appeals’ rules, “[w]henever it appears to . . . any United States Court of
Appeals . . . that determinative questions of New York law are involved in a case
1At oral argument before this Court, held on January 17, 2020, Simmons argued that certification to
the New York Court of Appeals was not necessary, but nevertheless indicated an openness to
certification should the panel deem it appropriate. Six days later, Simmons filed a motion to certify
two questions to the New York Court of Appeals: (1) whether Section 1808 precluded her FLSA and
NYLL claims in this case, and (2) whether res judicata is a cognizable defense under the FLSA and
NYLL in light of those statutes’ policy goals. (Doc. No. 67.)
13
pending before that court for which no controlling precedent of the Court of
Appeals exists, the court may certify the dispositive questions of law to the Court
of Appeals.” 22 N.Y.C.R.R. § 500.27(a); see also 2d Cir. R. 27.2(a) (“If state law
permits, the court may certify a question of state law to that state’s highest court.”).
This Court’s decision to certify questions to the Court of Appeals is
discretionary, and when exercising that discretion we consider whether: (1) “the
New York Court of Appeals has not squarely addressed an issue and other
decisions by New York courts are insufficient to predict how the Court of Appeals
would resolve it;” (2) “the statute’s plain language does not indicate the answer;”
(3) “a decision on the merits requires value judgments and important public policy
choices that the New York Court of Appeals is better situated than we to make;”
and (4) “the questions certified will control the outcome of the case.” Penguin Grp.
(USA) Inc. v. Am. Buddha, 609 F.3d 30, 42 (2d Cir. 2010) (internal quotation marks
and citation omitted). Each of these factors weighs in favor of certification in this
case.
First, the Court of Appeals has not interpreted Section 1808, and the
Appellate Division’s decisions have reached conflicting determinations as to the
proper scope of its preclusive effect. Second, though Section 1808’s plain language
14
allows a litigant to bring a claim “involving the same facts, issues and parties” as
a claim that has been brought to judgment in small claims court – merely offsetting
any subsequent judgment by the amount of the small claims court judgment –
courts in at least two departments of the Appellate Division have not interpreted
the statute in that manner. Third, resolving the proper interpretation of Section
1808 will inevitably require the application of New York principles of statutory
interpretation and may turn on value judgments and policy choices that the Court
of Appeals is best suited to make, balancing the interests of the unsophisticated
parties who appear as plaintiffs in small claims court and the need to ensure the
efficient administration of judicial resources in New York state courts. Fourth, the
proper interpretation of Section 1808 is a necessary component to our
determination of whether Simmons’s federal suit is barred by res judicata. 2
Because these factors weigh in favor of certification, we certify the question
formulated below to the Court of Appeals.
2 Although we reserve judgment on whether claim preclusion is a cognizable defense under the FLSA
in light of the policy goals of that statute, we need not even address that issue if the New York Court
of Appeals determines that Section 1808 has no preclusive effect on claims that arise from the same
facts, issues, and/or parties that were the subject of a prior judgment in small claims court.
15
CONCLUSION
For the reasons stated above, the Court hereby certifies the following
question to the New York Court of Appeals:
Under New York City Civil Court Act § 1808, what issue preclusion,
claim preclusion, and/or res judicata effects, if any, does a small
claims court’s prior judgment have on subsequent actions brought in
other courts involving the same facts, issues, and/or parties? In
particular, where a small claims court has rendered a judgment on a
claim, does Section 1808 preclude a subsequent action involving a
claim arising from the same transaction, occurrence, or employment
relationship?
We invite the Court of Appeals to reformulate this question as it sees fit or expand
it to address any other issues of New York law that would assist this Court in
determining whether Simmons’s federal suit is barred by Section 1808.
It is hereby ORDERED that the Clerk of this Court transmit to the Clerk of
the New York Court of Appeals this opinion as our certificate, together with a
complete set of briefs, appendices, and the record filed in this case by the parties.
The parties shall bear equally any fees and costs that may be imposed by the New
York Court of Appeals in connection with this certification. This panel retains
jurisdiction for purposes of resolving this appeal once the New York Court of
Appeals has responded to our certification.
16
In light of our opinion, we further DENY Simmons’s motion to certify (Doc.
No. 67) as MOOT.
CERTIFICATE
The foregoing is hereby certified to the New York Court of Appeals
pursuant to 22 N.Y.C.R.R. § 500.27(a) and 2d Cir. R. 27.2(a), as ordered by the
United States Court of Appeals for the Second Circuit.
17
| {
"pile_set_name": "FreeLaw"
} |
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHRISTOPHER W. HESSE; NATHANIEL
OLSON,
Plaintiffs-Appellants,
v.
No. 08-35235
SPRINT CORPORATION,
a foreign corporation, D.C. No.
2:-6-cv-00592-JCC
Defendant,
OPINION
and
SPRINT SPECTRUM LP,
doing business as Sprint PCS,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Washington
John C. Coughenour, District Judge, Presiding
Argued and Submitted
November 5, 2009—Seattle, Washington
Filed March 10, 2010
Before: Arthur L. Alarcón, Andrew J. Kleinfeld and
Richard R. Clifton, Circuit Judges.
Opinion by Judge Clifton
3845
3848 HESSE v. SPRINT
COUNSEL
David Elliot Breskin and Daniel Foster Johnson (argued),
Breskin Johnson & Townsend PLLC, Seattle, Washington;
HESSE v. SPRINT 3849
and Bradley Jerome Moore, Stritmatter Kessler Whelan
Coluccio, Seattle, Washington, for the plaintiffs-appellants.
Gavin W. Skok and David Brenner, Riddell Williams, PS,
Seattle, Washington; Robert Bruce Allensworth, Brian M.
Forbes, Ryan M. Tosi, and Andrew Glass (argued), Kirkpat-
rick & Lockhart Preston Gates Ellis LLP, Boston, Massachu-
setts, for the defendant-appellee.
OPINION
CLIFTON, Circuit Judge:
This case requires us to consider whether a broad release of
claims in a nationwide settlement agreement between Sprint
and its customers precludes the present class action involving
a Washington state tax that Sprint invoiced to its Washington
customers. That nationwide settlement arose out of a lawsuit
that challenged Sprint’s billing of customers for certain fed-
eral regulatory fees. Because we conclude that the Washing-
ton Plaintiffs’ interests were not adequately represented in the
prior action and that their claims are not “based on the identi-
cal factual predicate as that underlying the claims in the set-
tled class action,” Williams v. Boeing Co., 517 F.3d 1120,
1133 (9th Cir. 2008), we hold that the prior settlement did not
release the claims at issue in this case, and we vacate the dis-
trict court’s grant of summary judgment in favor of Sprint.
I. Background
The State of Washington imposes a business and occupa-
tion tax (“B&O tax”) on every person engaged in business
activities in the state. Wash. Rev. Code § 82.04.220. Wash-
ington law specifies that the B&O tax must be collected from
a business as part of its “operating overhead” rather than
imposed as a separate “tax[ ] upon the purchasers or custom-
3850 HESSE v. SPRINT
ers.” Id. § 82.04.500 (the “B&O Tax Statute”). It is alleged
that Sprint passed the tax directly to its customers as a sepa-
rate line item labeled “Washington State B&O Tax Sur-
charge” starting in April 2001.
Christopher Hesse and Nathaniel Olson (“the Washington
Plaintiffs”) filed separate class actions in Washington state
court alleging violations of the B&O Tax Statute and the
Washington Consumer Protection Act (“CPA”), Wash. Rev.
Code § 19.86.030, as well as common law breach of contract
and unjust enrichment. Sprint removed both cases to the
United States District Court for the Western District of Wash-
ington pursuant to 28 U.S.C. § 1441(a).
The district court dismissed all claims predicated on the
B&O Tax Statute as preempted by the Federal Communica-
tions Act (“FCA”), 47 U.S.C. § 332(c)(3)(A), but denied
Sprint’s motion to dismiss insofar as it related to “Plaintiffs’
other contract and CPA claims.” The district court then certi-
fied a class of “all current and former Washington state wire-
less service customers of Sprint, who have been charged and
paid to Sprint a ‘Washington State B&O Tax Surcharge’ ”
with the Washington Plaintiffs as class representatives.
After filing its answer to the Washington Plaintiffs’ consol-
idated complaint, Sprint moved for summary judgment, argu-
ing for the first time that the suit was barred by a class
settlement between Sprint and its customers approved by a
Kansas state court in 2006 (the “Benney Settlement”).
The Benney Settlement resulted from several class actions
filed in 2002 in various state courts and then dismissed and
refiled in Kansas state court in 2005 for purposes of settle-
ment. One of those class actions was initiated in Missouri by
Greg Benney (the “Benney Class Plaintiff”), who alleged that
Sprint’s surcharges to recoup federal regulatory fees violated
consumer protection laws, represented a breach of contract,
and resulted in unjust enrichment. The relevant regulatory
HESSE v. SPRINT 3851
fees were defined in the settlement agreement to include only
specified fees imposed to recover the cost of compliance with
federally mandated programs.1 The Benney class was defined
to consist of “all current and former Sprint wireless customers
in the United States who were customers for any time during
the period December 1, 2000 to the Effective Date [of the set-
tlement in late 2006] and who were charged Regulatory Fees
(as defined in [the Benney Settlement]).” It is not disputed
that the named plaintiffs in the case before us were members
of the Benney class and that they did not opt out.
Sprint settled with the nationwide plaintiff classes, includ-
ing the Benney class, in February 2006. The settlement pro-
vided various benefits, including phone cards and invoice
credits on future bills, to members of the various subclasses
of the Benney class who submitted claim forms. Sprint
agreed, in a paragraph titled “Injunctive Relief as to Billing
and Advertising Practices Related to the Regulatory Fees,” to
disclose for at least two years that the regulatory fees and
other surcharges to recoup the cost of compliance with gov-
ernment programs are “not taxes or government mandated
charges.” The term of the Benney Settlement relevant to
Sprint’s defense in the present case is Paragraph 22(a)(1),
1
The Benney Settlement specified that the “Regulatory Fees” at issue in
the Benney class action included only
(i) the “USA Regulatory Obligations & Fees” fee or surcharge on
subscriber invoices that Sprint charged subscribers for the cost of
implementing federally mandated programs for Enhanced 911
(“E911”) emergency calling Phase II and federal Universal Ser-
vice Fund contributions (“USF”); (ii) “Federal Telephone Num-
ber Pooling” fee or surcharge on subscriber invoices that Sprint
charged subscribers to recover costs of implementing the feder-
ally mandated program for wireless number portability; (iii)
“Federal USF,” “Federal E911” and “Federal Wireless Number
Pooling and Portability” fees or surcharges on subscriber invoices
that Sprint charged wireless subscribers to recover costs of imple-
menting federally mandated programs for wireless number pool-
ing and portability, federal Universal Service Fund contributions,
and Enhanced 911 emergency calling Phase II.
3852 HESSE v. SPRINT
which purported to release Sprint from a set of potential
claims much broader than the surcharges for federal regula-
tory fees that were the subject of the Benney action:
any and all claims . . . that have been, could have
been, or in the future might be asserted in the [Ben-
ney] Action[ ] or in any other court or proceeding
which relate in any way to allegations that . . .
[Sprint] failed properly to disclose or otherwise
improperly charged for surcharges, regulatory fees
or excise taxes, including but not limited to the Reg-
ulatory Fees; and all other causes of action . . .
whether based on federal, state, or local statute . . .
that have been, could have been, may be, or could be
alleged or asserted by any Class member . . . against
[Sprint] relating to . . . the subject matter of any of
the claims alleged in the Benney Action.
The Kansas court granted final approval of the Benney Set-
tlement in November 2006. That order incorporated the settle-
ment’s release by reference and included its own expansive
release of liability.2
The district court granted Sprint’s motion for summary
judgment in the present case based on these broad releases of
liability.3
2
The Kansas court’s order approving the Benney Settlement purported
to release Sprint
from any liability to each and every Benney . . . Settlement Class
members [sic] . . . arising from or relating to any and all claims
that were or could have been alleged in the Benney matter,
including but not limited to claims which relate in any way to
allegations that . . . Sprint failed properly to disclose or otherwise
improperly charged for surcharges, regulatory fees or excise
taxes, including but not limited to Regulatory Fees . . . .
3
Sprint also moved for summary judgment on the grounds that the vol-
untary payment doctrine bars the Washington Plaintiffs’ contract and
HESSE v. SPRINT 3853
II. Discussion
A. Federal Preemption
[1] We start with the district court’s dismissal of the claims
based on violations of the B&O Tax Statute. The district court
held that the Washington state law was preempted by a provi-
sion of the FCA decreeing that “no State or local government
shall have any authority to regulate the entry of or the rates
charged by any commercial mobile service or any private
mobile service.” 47 U.S.C. § 332(c)(3)(A)). Our court subse-
quently held, to the contrary, that the B&O Tax Statute does
not regulate “the rates charged” but only “the method of dis-
closure” and is thus not preempted by the FCA. Peck v.
Cingular Wireless, LLC, 535 F.3d 1053, 1058 (9th Cir. 2008).
We therefore vacate the district court’s Amended Order dated
February 13, 2007, which dismissed the Washington Plain-
tiffs’ claims for violations of the B&O Tax Statute.
B. The Benney Settlement
We turn next to the district court’s grant of summary judg-
ment on the ground that the Washington Plaintiffs’ claims
were released by the Benney Settlement. We review the dis-
trict court’s grant of summary judgment de novo. United
States v. Milner, 583 F.3d 1174, 1182 (9th Cir. 2009).
Sprint argues that the Washington Plaintiffs’ claims in this
case fall within the broad release of liability in the Benney
Settlement because they are “claims . . . that . . . could have
been . . . asserted . . . in [an]other court or proceeding which
unjust enrichment claims, that there was no breach of contract under its
interpretation of the contract, that a claim for unjust enrichment is incon-
sistent with a claim for breach of contract, and that CPA claims fail in the
absence of deception and causation. The district court did not reach these
alternative grounds.
3854 HESSE v. SPRINT
relate . . . to allegations that . . . [Sprint] failed properly to dis-
close or otherwise improperly charged for surcharges, regula-
tory fees or excise taxes . . . .” If this release were to operate
according to that interpretation, the Washington Plaintiffs
would have no recourse for their surcharge-related claims in
federal court because “[c]laim preclusion in federal court can
be based on a state court settlement.” Howard v. America
Online, Inc., 208 F.3d 741, 748 (9th Cir. 2000). We conclude,
however, that the release cannot preclude the Washington
Plaintiffs’ claims because the Benney Class Plaintiff did not
adequately represent the Washington Plaintiffs and because
the Washington Plaintiffs’ claims are based on a set of facts
different from those underlying the claims settled in the Ben-
ney Settlement. For these two independent reasons, we vacate
the district court’s order granting summary judgment.
1. Collateral Review
[2] At the threshold, Sprint contends that we may not
inquire into the adequacy of representation in the Benney
action because such an inquiry is an impermissible collateral
attack on the Kansas court’s judgment. The Full Faith and
Credit Act generally requires us to afford the “judicial pro-
ceedings” of any State “the same full faith and credit . . . as
they have by law or usage in the courts of such State” as
determined by the rules of the State. 28 U.S.C. § 1738; see
Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 373
(1996). But a state court’s power to declare the preclusive
effect of its judgments is not without limit: “A State may not
grant preclusive effect in its own courts to a constitutionally
infirm judgment,” and we are “not required to accord full
faith and credit to such a judgment.” Kremer v. Chem. Constr.
Corp., 456 U.S. 461, 482 (1982), quoted in Epstein v. MCA,
Inc. (Epstein II), 179 F.3d 641, 645 (9th Cir. 1999).
In Matsushita, the Supreme Court reversed a decision of
our court that did not accord full faith and credit as required
by 28 U.S.C. § 1738 to a state court judgment approving a
HESSE v. SPRINT 3855
settlement that released exclusively federal claims. 516 U.S.
at 373, rev’g Epstein v. MCA, Inc. (Epstein I), 50 F.3d 644
(9th Cir. 1995). The Supreme Court held that we must look
to state law in determining the preclusive effect of a state
court judgment releasing such claims. Id. at 374. Our court’s
approach in Epstein I had failed to apply the Delaware
Supreme Court’s claim preclusion doctrine under which a set-
tlement could release even exclusively federal claims.
On remand from the Supreme Court in Matsushita, the fed-
eral plaintiff class argued that the named plaintiffs of the set-
tled state court class did not adequately represent their
interests as to the federal claims in state court. Epstein II, 179
F.3d at 644. We stated that while “broad collateral review of
the adequacy of representation . . . is not available” after Mat-
sushita, “[l]imited collateral review would be appropriate . . .
to consider whether the procedures in the prior litigation
afforded the party against whom the earlier judgment is
asserted a ‘full and fair opportunity’ to litigate the claim or
issue.” Id. at 648-49 (quoting Kremer, 456 U.S. at 480); see
also Stephenson v. Dow Chem. Co., 273 F.3d 249, 258 & n.6
(2d Cir. 2001) (holding that under the Epstein II standard, col-
lateral review is permissible where the court that approved the
settlement did not address the adequacy of representation as
to a specific subset of a class “whose injuries manifested after
depletion of the settlement funds”).
[3] Normally we will satisfy ourselves that the party
received the requisite notice, opportunity to be heard, and
adequate representation by referencing the state court’s find-
ings. See Epstein II, 179 F.3d at 648. In Epstein II we found
no need to review collaterally the Delaware Chancery Court’s
decision because that court expressly found that class repre-
sentation was adequate as to the relevant federal claims, id. at
643, 649-50,4 and the Supreme Court’s decision in Matsushita
4
The case for adequate representation was much stronger in Epstein,
where the Delaware Chancery Court specifically released the federal
3856 HESSE v. SPRINT
was based on its own conclusion that the Delaware judgment
satisfied due process. See id. at 645 (citing Matsushita, 516
U.S. at 379). In this case, however, the Kansas court made no
finding that the Benney Class Plaintiff’s representation of the
class was adequate as to the B&O Tax Surcharge claims at
issue in this case, and we are faced with no Supreme Court
decision premised on the constitutional validity of the Kansas
judgment.
The Kansas court’s findings are insufficient to demonstrate
that the Benney Class Plaintiff adequately represented the
Washington Plaintiffs. The Kansas court found that the Ben-
ney Class Plaintiff’s Sprint bills were typical of the other class
members’ bills, but only “in that each bill imposed the
[defined] Regulatory Fees.” The Kansas court also noted that
the Benney Class Plaintiff “paid the Regulatory Fees at issue
in this case” but did not make an explicit finding that the Ben-
ney Plaintiff was an adequate representative of the class,
much less that he was an adequate class representative as to
the B&O Tax Surcharge claims. Because that question was
not addressed with any specificity by the Kansas court, it is
a proper subject for collateral review. Cf. id. at 649 (relying
on the Delaware court’s express finding of “adequate repre-
sentation” and “notice plus an opportunity to be heard and
participate in the litigation.” (quoting Phillips Petroleum Co.
v. Shutts, 472 U.S. 797, 812 (1985))).
[4] Consistent with Epstein II, we review the Benney Judg-
ment only to determine whether, in the absence of a specific
finding by the Kansas court, its judgment satisfies due process
claims at issue in the objectors’ action, Matsushita, 516 U.S. 371-72, and
both identical classes of shareholders advanced claims “aris[ing] out of the
same transaction” — the tender offer by which their shares in a corpora-
tion were sold. Nothing distinguished the subsequent class from the identi-
cal settled class except that the subsequent class filed federal claims in
federal court and objected to the state court settlement, which had been
predicated on state law claims. Epstein I, 50 F.3d at 666; Epstein II, 179
F.3d at 643.
HESSE v. SPRINT 3857
as to the claims at issue here, and whether, under Kansas law,
it precludes the Washington Plaintiffs’ claims. See id. at 645.
2. Inadequate Class Representation
The Benney Class Plaintiff was not an adequate representa-
tive for the claims asserted by the Washington Plaintiffs.
Without adequate representation, a court order approving a
claim-preclusive class action settlement agreement cannot sat-
isfy due process as to all members of the class. See Shutts,
472 U.S. at 812 (“[T]he Due Process Clause . . . requires that
the named plaintiff at all times adequately represent the inter-
ests of the absent class members.”); Hanlon v. Chrysler
Corp., 150 F.3d 1011, 1020 (9th Cir. 1998) (“To satisfy con-
stitutional due process concerns, absent class members must
be afforded adequate representation before entry of a judg-
ment which binds them.”); Brown v. Ticor Title Ins. Co., 982
F.2d 386, 390 (9th Cir. 1992) (“[I]f the plaintiff was not ade-
quately represented in the prior action, or there was a denial
of due process, then the prior decision has no preclusive
effect.”).
[5] Class representation is inadequate if the named plaintiff
fails to prosecute the action vigorously on behalf of the entire
class or has an insurmountable conflict of interest with other
class members. See Hanlon v. Chrysler Corp., 150 F.3d 1011,
1020 (9th Cir. 1998). The Benney Class Plaintiff’s representa-
tion of the Washington Plaintiffs was inadequate for both rea-
sons.
[6] First, the Benney Class Plaintiff did not share the
Washington Plaintiffs’ B&O Tax Surcharge claims, or even
pretend to prosecute those claims on their behalf. The Benney
Class Plaintiff was a resident of Missouri who never paid the
Washington B&O Tax Surcharge. It is evident that the Benney
Class Plaintiff did not vigorously prosecute the claims rele-
vant to this case. His petition, the settlement agreement it
induced, and the judgment approving that settlement agree-
3858 HESSE v. SPRINT
ment all confirm that the Benney class action was brought to
remedy a different set of injuries: Sprint’s nationwide sur-
charges that shifted to its customers certain costs imposed by
the federal government.
[7] Second, as a result of not possessing the same type of
claim as the Washington Plaintiffs, the Benney Class Plaintiff
had an insurmountable conflict of interest with those members
of the class. Conflicts of interest may arise when one group
within a larger class possesses a claim that is neither typical
of the rest of the class nor shared by the class representative.
See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625-27
(1997) (holding class representation inadequate because of the
conflict of interest between class members manifesting asbes-
tos injuries and those with yet undiagnosed injuries). In this
case, the Benney Class Plaintiff’s interest in settling his fed-
eral Regulatory Fee claims, even at the cost of a broad release
of other claims he did not possess, was in conflict with the
Washington Plaintiffs’ unrepresented interest in prosecuting
their B&O Tax Surcharge claims. The Benney Class Plain-
tiff’s representation of the Washington Plaintiffs was there-
fore inadequate as to those claims.
[8] The Benney Judgment would be constitutionally infirm
if it were interpreted, as Sprint contends it should be, to pre-
clude the B&O Tax Surcharge claims at issue in this case,
because the Benney Class Plaintiff’s representation of the
Washington Plaintiffs failed to satisfy due process as to those
claims.5 Thus, even if Kansas law — contrary to our interpre-
tation of it below — did allow the Benney Judgment to
release the Washington Plaintiffs’ claims related to the B&O
5
We do not set aside the Kansas court’s approval of the settlement.
Indeed, we accord that judgment full faith and credit and presume that it
is binding on all claims that it properly released under Kansas law, includ-
ing any claims of the Washington Plaintiffs pertaining to the federal regu-
latory fees at issue in Benney. We hold only that any release of the B&O
Tax Surcharge claims at issue in this case by the judgment approving the
Benney Settlement would violate due process.
HESSE v. SPRINT 3859
Tax Surcharge, we would not be bound to give the Benney
Judgment that effect.
3. Identical Factual Predicate
Even apart from due process concerns, a settlement agree-
ment’s bare assertion that a party will not be liable for a broad
swath of potential claims does not necessarily make it so. See
Williams, 517 F.3d at 1134 (“While Boeing may have drafted
the settlement agreement to include as broad a release as pos-
sible, the release would have only been enforceable as to sub-
sequent claims . . . depending upon the same set of facts.”
(internal quotations marks omitted)).
As a threshold matter, Sprint contends that we may not
consider the Washington Plaintiffs’ argument that their claims
have a different factual predicate from the claims involved in
the Benney Settlement because they raised that argument for
the first time in a motion for reconsideration after the district
court granted Sprint’s motion for summary judgment, and the
Washington Plaintiffs did not amend their notice of appeal
after the district court denied their motion for reconsideration.
See Intercontinental Travel Mktg. v. FDIC, 45 F.3d 1278,
1286 (9th Cir. 1994) (“Raising an issue for the first time in
a motion to reconsider is not considered adequate preservation
of the issue at a summary judgment stage.”).
We have discretion to consider an issue raised for the first
time on appeal “(1) where review is necessary to prevent a
miscarriage of justice or to preserve the integrity of the judi-
cial process; (2) where there is a change in the law creating
a new issue; or (3) when the issue presented is purely one of
law and either does not depend on the factual record devel-
oped below, or the pertinent record has been fully developed.”
Comedy Club, Inc. v. Improv West Assocs., 553 F.3d 1277,
n.11 (9th Cir. 2009) (internal quotation marks omitted). We
exercise that discretion here. The Washington Plaintiffs’
“identical factual predicate” argument is a mixed question of
3860 HESSE v. SPRINT
law and fact. They argue both that a settlement must be based
on the “identical factual predicate” as a subsequent claim to
preclude that claim, and that the Benney claims and the B&O
Tax Surcharge claims do not share an identical factual predi-
cate. We are persuaded to consider this argument because it
is conceptually related to the arguments raised in response to
Sprint’s motion for summary judgment in which Sprint first
put forward the theory that the Benney Settlement released the
Washington Plaintiffs’ claims, and the pertinent factual record
regarding the basis for the claims in both cases is fully devel-
oped.
[9] A settlement agreement may preclude a party from
bringing a related claim in the future “even though the claim
was not presented and might not have been presentable in the
class action,” but only where the released claim is “based on
the identical factual predicate as that underlying the claims in
the settled class action.” Williams v. Boeing Co., 517 F.3d
1120, 1133 (9th Cir. 2008); Class Plaintiffs v. City of Seattle,
955 F.2d 1268, 1287 (9th Cir. 1992), quoted in Howard, 208
F.3d at 747. Thus, we have held that federal district courts
properly released claims not alleged in the underlying com-
plaint where those claims depended on the same set of facts
as the claims that gave rise to the settlement. See Reyn’s Pasta
Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 749 (9th Cir.
2006) (affirming dismissal of a class action against credit card
companies predicated on the same price-fixing predicate and
injury as claims settled in an earlier class action, even though
the subsequent suit “posit[ed] a different theory of anti-
competitive conduct”); Class Plaintiffs, 955 F.2d at 1286-91
(affirming approval of a settlement relating to certain bond
defaults that released claims by an identical class of plaintiffs
in a pending case that related to the same bond defaults).
We applied the same reasoning to hold that a state court’s
approval of a settlement agreement could release not only the
state law fraudulent billing claims before it, but also federal
RICO claims arising from the same billing practices. Howard,
HESSE v. SPRINT 3861
208 F.3d at 746-48; see also Epstein II, 179 F.3d at 644-45
(discussing the Supreme Court’s holding that members of a
settlement class were bound by the Delaware Court of Chan-
cery’s release of federal claims) (citing Matsushita, 516 U.S.
at 377, 379); Class Plaintiffs, 955 F.2d at 1288 (noting with
approval that “other circuits have held that a state court was
within its power to approve the release of a federal claim,
which could not have been brought in the state court”).
Because the Benney Settlement was approved by order of
a Kansas state court, we apply Kansas law in determining its
preclusive effect. See Howard, 208 F.3d at 748 (“The preclu-
sive effect of a state court judgment in federal court is based
on state preclusion law.”). Kansas courts have not explicitly
applied the identical factual predicate doctrine to determine
the effect of releases of liability in court-approved settlement
agreements, but claim preclusion doctrine in Kansas does not
appear to us to be substantially different from the California
and federal law applied in Howard and Reyn’s Pasta Bella. In
Kansas, “[a] voluntary dismissal of a case with prejudice,
based on a settlement agreement that is approved by the court
and journalized, is a final judgment on the merits.” Honeycutt
v. City of Wichita, 836 P.2d 1128, 1133 (Kan. 1992). Such a
dismissal “is res judicata and bars a later lawsuit on the same
transaction or occurrence.” Id. at 1134; see also Anderson v.
Employers Mut. Cas. Ins. Co., 6 P.3d 918, 923-24 (Kan. Ct.
App. 2000) (holding that a general release does not bar claims
against tortfeasors who are not specifically named in the
release). It appears to us that claim preclusion in Kansas is
guided by the same general principles as in this circuit.
[10] Unlike the claims in Reyn’s Pasta Bella, Howard,
Epstein II, and Class Plaintiffs, which were held to have been
validly released by earlier settlements of related claims, the
Washington Plaintiffs’ claims do not share an identical factual
predicate with the claims resolved in the Benney Settlement.
The claims underlying the Benney Settlement dealt exclu-
sively with specific nationwide surcharges to recoup the costs
3862 HESSE v. SPRINT
of compliance with federal programs, whereas the claims at
issue in the present case involve Sprint’s statewide surcharge
to recoup the cost of the Washington B&O Tax allegedly in
violation of a Washington statute. The superficial similarity
between the two class actions is insufficient to justify the
release of the later claims by the settlement of the former.
Both involve claims that Sprint improperly billed government
taxes or fees to its customers, but they deal with different sur-
charges, imposed to recoup different costs, that were alleged
to be improper for different reasons.
[11] Especially relevant to our determination that the
claims lack an identical factual predicate is our observation,
noted above, that the Benney Class Plaintiff did not ade-
quately represent the Washington Plaintiffs as to their B&O
Tax Surcharge claims. The Kansas class action statute, like
Federal Rule 23, requires that a class representative possess
claims “typical of the claims . . . of the class” and that he
“fairly and adequately protect the interests of the class.” Kan.
Stat. Ann. § 60-223(a)(3)-(4); Fed. R. Civ. P. 23(a)(3)-(4).
Under Kansas law, a plaintiff “cannot represent a class in
which she is not a member.” Chamberlain v. Farm Bureau
Mut. Ins. Co., 137 P.3d 1081, 1088 (Kan. Ct. App. 2006). As
a resident of Missouri, Benney’s injury was not typical of the
Washington Plaintiffs’ injury, and, as a result, he failed to
vigorously prosecute their claims or avoid the conflict
between their legal interests. See supra at 3857-59. It seems
to us unlikely that a plaintiff class’s claims would ever be
based on the identical factual predicate as the claims of a third
party who did not adequately represent the class’s interests.
We conclude that the claims raised by the Washington Plain-
tiffs in this case are not derived from the same “transaction or
occurrence” as the claims of the Benney Class Plaintiff,
Honeycutt, 836 P.2d at 1134, and therefore were not released
by the Benney Settlement.
III. Conclusion
[12] In light of the failure of the Benney Class Plaintiff to
adequately represent the Washington Plaintiffs and the
HESSE v. SPRINT 3863
absence of an identical factual predicate between their respec-
tive claims, the Kansas court’s judgment approving the Ben-
ney Settlement cannot preclude the Washington Plaintiffs’
unique causes of action, regardless of the expansive release
contained in that judgment. On both grounds, therefore, we
vacate the district court’s order granting summary judgment.
Sprint raises other grounds for summary judgment that the
district court did not have occasion to consider. We do not
reach them now. On remand, the district court should address
Sprint’s alternate grounds for summary judgment.
VACATED and REMANDED.
| {
"pile_set_name": "FreeLaw"
} |
NO. 07-03-0178-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL A
DECEMBER 10, 2004
______________________________
OTHA LEE CRAIG, APPELLANT
V.
THE STATE OF TEXAS, APPELLEE
_________________________________
FROM THE 286TH DISTRICT COURT OF HOCKLEY COUNTY;
NO. 02-12-5406; HONORABLE HAROLD PHELAN, JUDGE
_______________________________
Before JOHNSON, C.J., and REAVIS and CAMPBELL, JJ.
MEMORANDUM OPINION
Appellant Otha Lee Craig appeals from his conviction for driving while intoxicated.
We affirm.
As a pretrial matter, appellant filed a Special Plea of Double Jeopardy which alleged
that appellant had been placed in former jeopardy for the driving while intoxicated charge
by: (1) the Texas Department of License’s suspension of his driver’s license, (2) the United
States District Court Northern Division’s revocation, after a hearing, of his supervised
release, and (3) the State’s dismissal of a misdemeanor indictment before re-indicting
appellant for a felony. The trial court held a pretrial hearing concerning appellant’s special
plea at which the trial court denied the plea on the basis that, even if all the facts alleged
in the plea were assumed true, the plea did not present a legally sufficient claim of former
jeopardy.
Following the trial court’s denial of the special plea and pursuant to a plea bargain,
appellant pled guilty to the felony charge of driving while intoxicated. The trial court honored
the plea bargain and sentenced appellant to incarceration in the Texas Department of
Criminal Justice, Institutional Division, for five years and fined appellant $500.
Appellant was admonished, both orally and in writing, by the trial court. He signed
a guilty plea memorandum, which included written admonishments, stipulation of evidence,
and jury waiver, and pled guilty on the record while in open court. The trial court stated,
during appellant’s plea, that it would permit appellant to appeal the denial of his Special
Plea of Double Jeopardy and the court has certified appellant’s right to appeal the denial
of this written plea. TEX . R. APP . P. 25.2(a)(2), (d). Appellant has timely filed a notice of
appeal with this court and has been appointed appellate counsel.
Counsel for appellant has filed a Motion to Withdraw as Counsel and a Brief in
Support thereof. In support of the motion to withdraw, counsel has certified that, in
compliance with Anders v. California, 386 U.S. 738, 744-45, 87 S.Ct. 1396, 18 L.Ed.2d 493
(1967), the record has been diligently reviewed and that, in the opinion of counsel, the
-2-
record reflects no reversible error or grounds upon which a meritorious appeal can be
predicated. Counsel thus concludes that the appeal is frivolous. Counsel has discussed
why, under the controlling authorities, there is no arguably reversible error in the trial court
proceedings or judgment. See High v. State, 573 S.W.2d 807, 813 (Tex.Crim.App. 1978).
Counsel has attached exhibits showing that a copy of the Anders brief and Motion
to Withdraw as Counsel have been forwarded to appellant, and that counsel has
appropriately advised appellant of his right to review the record and file a pro se response.
Appellant has not filed a pro se response.
We have made an independent examination of the record to determine whether
there are any arguable grounds for appeal. See Penson v. Ohio, 488 U.S. 75, 80, 109
S.Ct. 346, 102 L.Ed.2d 300 (1988); Stafford v. State, 813 S.W.2d 503, 511 (Tex.Crim.App.
1991). The record reveals no such grounds. We agree with appellate counsel that the
appeal is without merit.
Accordingly, counsel’s Motion to Withdraw is granted. The judgment of the trial
court is affirmed.
Phil Johnson
Chief Justice
Do not publish.
-3-
| {
"pile_set_name": "FreeLaw"
} |
[Cite as In re A.C., 2018-Ohio-386.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 105347
IN RE: A.C., ET AL.
Minor Children
[Appeal by L.C., Mother ]
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Juvenile Division
Case Nos. AD13908673, AD13908674, AD13908675,
and AD14911228
BEFORE: Jones, J., E.A. Gallagher, A.J., and Blackmon, J.
RELEASED AND JOURNALIZED: February 1, 2018
ATTORNEY FOR APPELLANT
Jonathan N. Garver
The Brownhoist Building
4403 St. Clair Avenue
Cleveland, Ohio 44103
ATTORNEYS FOR APPELLEES
For CCDCFS
Michael C. O’Malley
Cuyahoga County Prosecutor
BY: Anthony R. Beery
Assistant County Prosecutor
4261 Fulton Parkway
Cleveland, Ohio 44144
BY: Cheryl Rice
Assistant County Prosecutor
8111 Quincy Avenue, Room 440
Cleveland, Ohio 44104
For P.B. (Father)
Jeffrey Froude
P.O. Box 771112
Lakewood, Ohio 44107
Timothy A. Spurrier
W.H. Hunt Legal Group L.L.C.
24500 Center Ridge Road, Suite 170
Westlake, Ohio 44145
Guardian ad litem for P.B.
Paul Berman
24105 Duffield Road
Shaker Heights, Ohio 44122
For J.S. (Father)
Britta M. Barthol
P.O. Box 670218
Northfield, Ohio 44067
Daniel J. Bartos
Bartos & Bartos, L.P.A.
20220 Center Ridge Road, Suite 160
Rocky River, Ohio 44116
Guardian ad litem for J.S.
Suzanne F. Jucaitis
P.O. Box 771661
Lakewood, Ohio 44107
For A.C.
John M. Stryker
Stryker Law, Co., Ltd.
20006 Detroit Road, Suite 310
Rocky River, Ohio 44116
For T.H. (Maternal Grandmother)
Theodore Amata
12107 Mayfield Road, Suite 202
Cleveland, Ohio 44106
Guardian ad litem
Carla L. Golubovic
P.O. Box 29127
Parma, Ohio 44129
Jonathan Z. Wilbur
13940 Cedar Road, Suite 246
Cleveland, Ohio 44118
LARRY A. JONES, SR., J.:
{¶1} Appellant, Mother, appeals the trial court’s ruling granting permanent
custody of her four children to the Cuyahoga County Department of Children and Family
Services (“CCDCFS” or “the agency”). For the reasons that follow, we affirm.
{¶2} In 2013, CCDCFS filed a complaint alleging that three of Mother’s children,
B.B., C.C., and A.C. were dependent, A.C. was abused, and requesting permanent
custody. The children were not in Mother’s custody at this time, having previously been
adjudicated dependent in 2011. They were in a maternal aunt’s custody, but the aunt
could no longer care for the children. The maternal grandmother moved to intervene in
the case, which the trial court granted.
{¶3} In 2014, the trial court granted permanent custody of the children to
CCDCFS, but this court reversed the decision, finding that the juvenile court failed to
comply with Juv.R. 29 when accepting B.B.’s, C.C.’s, and A.C.’s father’s (“Father 1”)
stipulation to the agency’s request for permanent custody; the case was remanded to the
trial court. In re A.C., 8th Dist. Cuyahoga No. 102351, 2015-Ohio-3673.
{¶4} In September 2014, Mother gave birth to J.S. with Father 2. The agency
filed a complaint alleging the child was dependent and requesting permanent custody of
the child. The case for the older three children, which, as mentioned, was remanded by
this court, and the new case were consolidated for the purposes of a new permanent
custody trial. Maternal grandmother moved for legal custody of the three older children,
but not for J.S.
{¶5} The matter proceeded to trial in October 2016.
{¶6} CCDCFS social worker Mi-Lin Tate (“Tate”) testified that she had been the
family’s caseworker for almost two years. Mother’s three older children had been out of
her care and custody for over five years. The youngest child had been out of Mother’s
care and custody his entire life except for the first two days. Tate testified that the
agency remained committed to working toward reunification, which was the permanency
plan. Mother’s case plan included mental health, parenting, domestic violence services,
and meeting the children’s basic needs. Tate testified that basic needs was on Mother’s
case plan to ensure she could meet the children’s needs given her history of inconsistent
housing. Tate noted that Mother most recently lived with Father 2, but ended her
relationship with Father 2 just before trial and moved out. Mother was currently living
with relatives and did not have adequate housing for four children; thus, she lacked stable
housing.
{¶7} Tate testified that when visitations were scheduled weekly, Mother would
attend about fifty percent of the time. Eventually, due to Mother’s inconsistency and the
children’s poor reaction to the visits, the visits were reduced to every other week. Tate
testified that B.B. attends counseling to address her anger management and coping skills
and receives special education services at school.
{¶8} Dr. Amy Justice conducted Mother’s psychological evaluation; she also
testified at trial. According to the results, Mother scored extremely low in terms of
intellectual function and was functionally illiterate. Dr. Justice reviewed Mother’s
mental health records and was concerned about her lack of consistency in mental health
treatment, opining that a lack of consistency inhibited Mother’s progress. Dr. Justice
was also concerned that Mother lacked comprehension with regard to why she did not
have custody of her children — Mother told the doctor that the three older children were
originally removed from her because they were biracial. Dr. Justice pointed out that
Mother’s inability to understand why her children were originally removed from her was
a concern because it was unlikely Mother could remedy the causes of removal if she still
could not recognize what the causes were.
{¶9} Dr. Justice recommended a number of services for Mother. The doctor
recommended domestic violence services because Mother remained in abusive
relationships and failed to understand that her most recent relationship was violent. Dr.
Justice also recommended sleep practice services because Mother slept during the day
and was awake at night, which was not conducive to raising children. Finally, Dr.
Justice opined that no service could rectify Mother’s intellectual deficits.
{¶10} Mother’s counselor at Recovery Resources testified that she was involved
with Mother for the ten months prior to trial. The counselor testified that she worked
with Mother on her anger issues and mental health diagnoses. The counselor noted that
Mother struggled with consistency in attending appointments, and had failed to show up
to appointments for the last two months. The counselor felt Mother had made some
progress but any gains were inhibited by Mother’s inconsistency and Mother was in
danger of being terminated from services due to her failure to attend her appointments.
{¶11} The foster father testified that at the time the children came into custody
B.B. was having seizures, B.B. and C.C. had head lice, and A.C. was malnourished and
underweight. The children left foster care and were placed with a relative but returned
to foster care in 2013. When the children returned to the foster home, all three had head
lice. Since living with their foster family, B.B.’s seizures had stopped and the children
had no major health issues.
{¶12} According to the foster father, the children reacted poorly to the visits with
Mother. B.B. displayed anger and poor behavior around visitation time, but these
problems got better when the visits were reduced to every other week. C.C. was much
happier after the reduction in visits and told her foster father that she just “wants it to be
done and over with.”
{¶13} CCDCFS social worker Venita Wiggins (“Wiggins”) testified that she was
the previous social worker assigned to the family, and worked with the family for a
couple of years. During her time working with the family, Wiggins had regular contact
with maternal grandmother. Wiggins testified that based on her involvement with
maternal grandmother, she would not support granting legal custody to maternal
grandmother because it would not be in the children’s best interest. Wiggins expressed
concern that grandmother had neglected her own children, including Mother, and that
grandmother’s previous home was unsanitary and unsafe.
{¶14} Maternal grandmother testified that she was seeking legal custody of the
older three children and was aware the children would be separated from their youngest
sibling if she was granted legal custody. Maternal grandmother admitted she had
neglected Mother and her other children when they were young. Grandmother thought
the juvenile court should grant custody of the four children to Mother because Mother
could care for her children but that she would take legal custody of three of the children if
the court did not grant custody to Mother.
{¶15} The Guardian Ad Litem (“GAL”) for the children recommended the trial
court grant permanent custody to the agency. The GAL noted that the foster family
provided for the children’s needs, live in a child-centered home, and the children were
“very happy” with their foster family. She opined that neither the parents nor maternal
grandmother could provide for the children. She stated that Mother had “no stability.
She doesn’t have stability of a relationship. She doesn’t have stability of housing. She
doesn’t have the ability to properly parent. She doesn’t have the insight into what her
children’s needs are.” The GAL noted that neither the fathers nor the maternal
grandmother could provide appropriately for the children.
{¶16} The juvenile court granted the agency’s motion for permanent custody.
Mother filed a notice of appeal. Father 1 and Father 2 are appealing the termination of
their parental rights concerning their respective children. See In Re A.C., 8th Dist.
Cuyahoga No. 105336 (Father 1) and In Re J.S., 8th Dist. Cuyahoga No. 105344 (Father
2).
{¶17} Following oral argument in this matter, the parties were ordered, sua sponte,
to brief the issue whether the trial court complied with 25 U.S.C. 1912 and this court’s
holding in In Re: R.G., 8th Dist. Cuyahoga 104434, 2016-Ohio-7897, with regard a trial
court’s duty to inquire about a parent’s Native American ancestry. Post-briefing, this
court remanded the case to the trial court to hold a hearing for the limited purpose of
complying with this court’s decision in In Re: R.G. The trial court complied with our
limited remand and issued a
journal entry finding that no Native American ancestry had been established.
{¶18} Mother raises one assignment of error for our review:
I. The judgment terminating Appellant’s parental rights and awarding
permanent custody to the agency is against the manifest weight of the
evidence.
{¶19} In her sole assignment of error, Mother argues that the trial court’s decision
to grant permanent custody of her children to CCDCFS was against the manifest weight
of the evidence.
Permanent Custody
{¶20} An agency may request permanent custody of a child as part of its original
abuse, neglect, or dependency complaint. R.C. 2151.353(A)(4). A juvenile court’s
decision to grant permanent custody will not be reversed as being against the manifest
weight of the evidence “if the record contains some competent, credible evidence from
which the court could have found that the essential statutory elements for permanent
custody had been established by clear and convincing evidence.” In re A.P., 8th Dist.
Cuyahoga No. 104130, 2016-Ohio-5849, ¶ 16.
{¶21} When granting permanent custody pursuant to R.C. 2151.353, a trial court
must make two determinations. The court must first find that “the child cannot be
placed with one of the child’s parents within a reasonable time or should not be placed
with either parent” in accordance with R.C. 2151.414(E). The court must also find that
permanent custody is in the best interest of the child pursuant to R.C. 2151.414(D).
Placement with Mother
{¶22} Mother argues that the trial court’s determination that the children could not
be placed with her within a reasonable time is against the manifest weight of the
evidence.
{¶23} As stated, to determine whether a child cannot or should not be placed with
a parent within a reasonable time, courts look to the factors set forth in R.C. 2151.414(E).
If a court determines by clear and convincing evidence that one or more of the following
exist as to each of the child’s parents, the court shall enter a finding that the child cannot
be placed with either parent within a reasonable time or should not be placed with either
parent. Id. A trial court need only find that one of the factors set forth in R.C.
2151.414(E) is met in order to properly find that a child cannot or should not be placed
with a parent. In re Baby Boy M, 8th Dist. Cuyahoga No. 91312, 2008-Ohio-5271, ¶
29-31.
{¶24} “Clear and convincing evidence” is that measure or degree of proof that is
more than a “preponderance of the evidence,” but does not rise to the level of certainty
required by the “beyond a reasonable doubt” standard in criminal cases. In re M.S., 8th
Dist. Cuyahoga Nos. 101693 and 101694, 2015-Ohio-1028, ¶ 8. It “produces in the
mind of the trier of fact a firm belief or conviction as to the facts sought to be
established.” Id. In determining whether a juvenile court based its decision on clear
and convincing evidence, a reviewing court will examine the record to determine whether
the trier of fact had sufficient evidence before it to satisfy the degree of proof. In re
T.S., 8th Dist. Cuyahoga No. 92816, 2009-Ohio-5496, ¶ 24, citing State v. Schiebel, 55
Ohio St.3d 71, 74, 564 N.E.2d 54 (1990).
{¶25} In this case, as it relates to Mother, the juvenile court found that the factors
set forth in R.C. 2151.414(E)(1), (2), and (4) applied and (11) applied to Father 1. As
the court explained:
Pursuant to R.C. 2151.414(E), the Court finds by clear and convincing
evidence that the minor child cannot be placed with either parent within a
reasonable period of time or should not be placed with either parent due to
one or more of the following factors:
(1) Following the placement of the child outside the child’s home and
notwithstanding reasonable case planning and diligent efforts by the agency
to assist the parents to remedy the problems that initially caused the child to
be placed outside the home, the parents have failed continuously and
repeatedly to substantially remedy the conditions causing the child to be
placed outside the child’s home.
***
(2) Chronic mental illness, chronic emotional illness, intellectual
disability, physical disability, or chemical dependency of the parent that is
so severe that it makes the parent unable to provide an adequate permanent
home for the child at the present time and, as anticipated, within one year.
***
(4) The parents have shown a lack of commitment toward the child.
***
(11) The parent has had parental rights involuntarily terminated with respect
to a sibling of the child pursuant to this section * * * .
{¶26} To support its finding under subsection (1), the trial court found that Mother
failed to benefit from case plan services including mental health services and basic needs.
The court stated that Mother failed to consistently attend appointments with mental
health service providers.
{¶27} Under (2), the trial court found that the parents had been diagnosed with
chronic mental and emotional illness that prevent them from providing an adequate
permanent home for the children.
{¶28} Under (4), the trial court found that the parents had demonstrated a
commitment to the children by visiting but had failed to financially support the children,
have not had suitable housing or employment, and therefore, cannot meet the basic needs
of the children.
{¶29} Under (11), the trial court found that Father 1 and Father 2 had previously
had their parental rights involuntarily terminated as to other children.
{¶30} We find competent, credible evidence in the record to support the trial
court’s findings. Mother’s social worker testified that by the time of the permanent
custody trial, Mother had failed to remedy the conditions that caused the removal of her
children. Mother no longer had stable housing, was living with relatives, and did not
have appropriate housing for the children. Mother’s counselor at Recovery Resources
testified that she had been involved with Mother for ten months and while Mother had
made some progress on her goals, her progress was inhibited by her inconsistent
attendance at appointments and she was in danger of being terminated from the program.
{¶31} Mother was reevaluated by Dr. Justice prior to trial and Dr. Justice opined
that Mother had not sufficiently benefitted from services. Dr. Justice recommended
additional services for Mother, including one-on-one domestic violence counseling,
instead of the group counseling Mother had previously received. Dr. Justice
recommended additional domestic violence counseling for Mother because Mother did
not understand that she had been in a domestically violent relationship with Father 2;
therefore, although Mother had previously attended domestic violence classes, she
required more services. Dr. Justice recommended one-on-one counseling for Mother
due to Mother’s intellectual deficiencies.
{¶32} Dr. Justice further testified that Mother scored in the lowest two percent of
all people in terms of intellectual function and identified Mother as functionally illiterate.
Dr. Justice had concerns about Mother’s lack of consistency with mental health
treatment and her inability to understand why her children were not in her custody,
including Mother’s belief that the agency took the children because they were biracial.
Dr. Justice was also concerned about Mother’s sleep habits, which included sleeping all
day and staying up all night and recommended sleep practice services.
{¶33} The family’s social worker, Tate, testified that Mother attended visits about
half of the time when they were scheduled weekly. The agency reduced the visits to
twice a month based on Mother’s inconsistency and the children’s poor reaction to visits.
{¶34} In light of the above, we find clear and convincing evidence in the record to
support the juvenile court’s findings under R.C. 2151.414(E).
Best Interests of the Children
{¶35} R.C. 2151.414(D)(1) further requires that
[i]n determining whether permanent custody is in the best interest of the
child, the juvenile court must consider “all relevant factors,” including, but
not limited to, the following:
(a) The interaction and interrelationship of the child with the child’s
parents, siblings, relatives, foster caregivers and out-of-home providers, and
any other person who may significantly affect the child;
(b) The wishes of the child, as expressed directly by the child or through the
child’s guardian ad litem, with due regard for the maturity of the child;
(c) The custodial history of the child, including whether the child has been
in the temporary custody of one or more public children services agencies
or private child placing agencies for twelve or more months of a
consecutive twenty-two-month period, or the child has been in the
temporary custody of one or more public children services agencies or
private child placing agencies for twelve or more months of a consecutive
twenty-two-month period and, as described in division (D)(1) of section
2151.413 of the Revised Code, the child was previously in the temporary
custody of an equivalent agency in another state;
(d) The child’s need for a legally secure permanent placement and whether
that type of placement can be achieved without a grant of permanent
custody to the agency;
(e) Whether any of the factors in divisions (E)(7) to (11) of this section
apply in relation to the parents and child.
{¶36} The juvenile court has considerable discretion in weighing these factors.
In re J.H., 8th Dist. Cuyahoga No. 105078, 2017-Ohio-7070, ¶ 53. The best interest
determination focuses on the child, not the parent. In re N.B., 8th Dist. Cuyahoga No.
101390, 2015-Ohio-314, ¶ 59, citing In the Matter of: Austin Mayle, 8th Dist. Cuyahoga
Nos. 76739 and 77165, 2000 Ohio App. LEXIS 3379 (2000). Although the juvenile
court is required to consider each factor listed in R.C. 2151.414(D)(1), no one factor is
given greater weight than the others pursuant to the statute. In re T.H., 8th Dist.
Cuyahoga No. 100852, 2014-Ohio-2985, ¶ 23, citing In re Schaefer, 111 Ohio St.3d 498,
2006-Ohio-5513, 857 N.E.2d 532.
{¶37} Mother argues that the trial court’s decision to grant permanent custody of
the oldest three children was against the manifest weight of the evidence because the
maternal grandmother could have taken legal custody of the children. As Mother noted
in her brief on appeal, while consideration of whether the children can be placed with a
relative is not required by the statute, courts have held that the possibility of placement
with a relative ‘“is a matter that ought to be considered in connection with the child’s
interaction and relationship with the child’s parents, relatives, foster caregivers,
out-of-home providers, and any other person who may significantly affect the child.”’
In re S.F., 2d Dist. Montgomery No. 25318, 2013-Ohio-508, ¶ 23, quoting In re F.C., 2d
Dist. Montgomery No. 23803, 2010-Ohio-3113, ¶ 24.
{¶38} The record shows that the agency investigated maternal grandmother as a
possible placement; however, she did not file for legal custody of J.S. and the agency was
concerned with separating the siblings from one another. Maternal grandmother also
admitted that she had neglected her own two children and the first removal of Mother’s
three oldest children happened when they were living with maternal grandmother.
{¶39} The agency also had issues with maternal grandmother’s housing.
Maternal grandmother had recently moved out of state and, although her new house had
been deemed appropriate, she had lived in three different places in the ten months prior to
trial. Maternal grandmother also has legal custody of three other grandchildren and both
the agency and the GAL were concerned whether grandmother could handle additional
grandchildren. Finally, maternal grandmother testified that she believed that Mother
should have custody of the children and only filed for legal custody in case the court did
not grant custody to Mother. Maternal grandmother testified she fully believed Mother
could care for the children even though the children had not been in Mother’s care or
custody for over five years.
{¶40} The children had been placed with the same foster family the entire time,
except for the 14-month period where the three oldest children were committed to the
custody of a relative, and the foster family wished to adopt the children. The GAL
testified that the children appeared more comfortable and bonded with their foster parents
than their biological parents.
{¶41} Next, Mother argues that the trial court erred in that it did not take the
wishes of eight-year-old B.B. and seven-year-old C.C. into account when considering
custody, contrary to R.C. 2151.414(D)(1)(b). But R.C. 2151.414(D)(1)(b) also involves
the child’s wishes as expressed by the child’s GAL. The GAL testified that the children
had negative reactions to visitation with their Mother but were bonded to their foster
family. B.B. displayed issues with anger and behavior when visits occurred, but these
problems reduced when the visits were reduced and C.C. appeared to be happier after the
reduction in visits and told the foster father that she “just wants it to be done and over
with.” As to the wishes of children ages seven and eight years old, the statute requires
the court to take “due regard for the maturity of the child” and the trial court expressly
stated it considered the wishes of the minor child as stated by the GAL, “though the court
has considered the age of the child.”
{¶42} Based on the facts in the record, we find clear and convincing evidence in
the record to support the juvenile court’s findings under R.C. 2151.414(D).
Agency Made Reasonable Efforts
{¶43} Next, Mother contends that CCDCFS failed to make reasonable efforts to
reunite her with her children.
{¶44} R.C. 2151.419 provides:
[A]t any hearing * * * at which the court removes a child from the child’s
home or continues the removal of a child from the child’s home, the court
shall determine whether the public children services agency * * * that filed
the complaint in the case, removed the child from home, has custody of the
child, or will be given custody of the child has made reasonable efforts to
prevent the removal of the child from the child’s home, to eliminate the
continued removal of the child from the child’s home, or to make it possible
for the child to return safely home. The agency shall have the burden of
proving that it has made those reasonable efforts.
{¶45} Mother argues that CCDCFS should have offered her more services,
services at an earlier date, and more follow-through on her services. Whether an agency,
however, made reasonable efforts pursuant to R.C. 2151.419 is based on the
circumstances of each case, not whether there was anything more the agency could have
done. See In re K.M.S., 3d Dist. Marion Nos. 9-15-37, 9-15-38, 9-15-39,
2017-Ohio-1412, ¶ 68.
{¶46} When this case commenced in 2013, Mother’s older children had already
been removed from her care and custody. The social worker, Tate, testified that
Mother’s case plan requirements included mental health, parenting and domestic violence
classes, and meeting the children’s basic needs. Tate testified that Mother had been
referred by previous caseworkers for parenting, and domestic violence services and she
referred Mother to Recovery Resources to address her mental health. Mother’s
Recovery Resources counselor testified that while Mother was making some progress, she
had failed to show up for two months of appointments and was in danger of being
terminated from the program.
{¶47} The trial court recognized that Mother had transportation issues, which may
have prevented her from keeping some of her appointments at Recovery Resources, but
the court also noted that Mother should have informed her social worker so the social
worker could assist Mother with securing free transportation.
{¶48} Mother also contends that she was prejudiced by having a psychological
evaluation done just prior to trial. The record shows, however, that Mother’s
evaluation with Dr. Justice was not her first evaluation — Mother was previously
evaluated by the Juvenile Court Diagnostic Clinic and referred for services. Moreover,
Mother’s initial psychological evaluation appointment was scheduled several months
prior to trial, but Mother missed that appointment. Dr. Justice testified that had Mother
not missed the appointment, she would have had her report completed and there would
have been “three months or so to implement whatever recommendations there were
before trial[.]”
{¶49} Mother also contends that the agency did not make reasonable efforts as to
the children’s fathers and maternal grandmother. But, as mentioned, both fathers
appealed and could have raised that on appeal. The juvenile court denied maternal
grandmother’s motion for legal custody and maternal grandmother did not appeal the
court’s ruling.
{¶50} Therefore, the trial court’s finding that the agency made reasonable efforts
to prevent the removal or continued removal of the children was supported by competent,
credible evidence in the record.
Guardian Ad Litem
{¶51} Mother argues that the there were multiple omissions in the GAL’s
investigation that call into question the thoroughness of her investigation and reliability of
her report and recommendation. Specifically, Mother claims that the GAL failed to
observe Father 2’s interaction with J.S. or conduct a home visit at Father 2’s house, did
not conduct a home visit at maternal grandmother’s house, and did not interview the
children’s previous GAL.
{¶52} The record belies her claims. The GAL attended multiple visitations with
J.S. but Father 2 failed to show up at the visits that the GAL attended. The GAL also
visited Father 2’s house and maternal grandmother’s house before maternal grandmother
relocated out of state. Finally, the GAL testified that she spoke with the GAL assigned
to the case that immediately preceded her.
{¶53} The record shows that the GAL’s investigation included reviewing the court
file, case file, discovery, reports, and court orders. The GAL testified that she visited the
homes of Mother, Father 1, and Father 2. She interviewed the parents, maternal
grandmother, maternal uncle, social workers, foster parents, the parents’ attorneys, the
children’s attorneys, service providers, and school personnel. She also interviewed the
children in their foster placement and at a visitation with their family. Finally, the GAL
prepared a thorough report and recommendation, attended multiple hearings, and testified
at trial.
{¶54} There is nothing in the record that suggests that Mother was prejudiced by
the GAL’s investigation or report and recommendation.
{¶55} The juvenile court’s decision was supported by competent, credible
evidence in the record and was not against the manifest weight of the evidence.
Accordingly, the court did not err by granting permanent custody of the children to
CCDCFS and Mother’s sole assignment of error is overruled.
{¶56} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into
execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
LARRY A. JONES, SR., JUDGE
PATRICIA ANN BLACKMON, J., CONCURS;
EILEEN A. GALLAGHER, A.J., CONCURS
WITH SEPARATE OPINION
EILEEN A. GALLAGHER, A.J., CONCURRING WITH SEPARATE OPINION:
{¶57} I concur with the opinion of my learned colleagues but feel compelled to
write separately regarding my concerns about the suitability of the current foster care
placement.
{¶58} The evidence in this case is scant as to the living conditions in the foster
home. There was testimony that now living in the home are foster mother, foster father,
A.C., B.B., C.C. and J.S. III (the minors subject to the current litigation and companion
cases now before this court.)
{¶59} In addition to those six people, testimony reflects that there are an
unspecified number of tenants in the home whose identity was not revealed and there is
no testimony as to the backgrounds of these persons.
{¶60} In addition, there are numerous animals in the home as well as a suggestion
that there are also two adult, biological children of the foster parents in the home and,
again there is no testimony as to their backgrounds.
{¶61} There was no testimony offered that these other persons, i.e. tenants and
adult biological children have been investigated as to mental health issues, substance
abuse issues or criminal records.
{¶62} In addition, the record reflects that there are one and half bathrooms in the
foster home that are used by up to nine adults and the four children.
{¶63} For those reasons, although I agree to the permanent custody being awarded
to Cuyahoga County Division of Children and Family Services, I believe that the current
placement be investigated.
| {
"pile_set_name": "FreeLaw"
} |
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 3, 2009
No. 09-30481 Charles R. Fulbruge III
Summary Calendar Clerk
CHERYL ANN DUPRE
Plaintiff - Appellant
v.
HEALTHCARE INTEGRITY AND PROTECTION DATA BANK; NATIONAL
PRACTITIONER DATA BANK; JOHN M. HEYOB, Director, Division of
Quality Assurance, Department of Health and Human Services of the United
States Secretary of Health and Human Services,
Defendants - Appellees
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:08-CV-00205
Before KING, STEWART, and HAYNES, Circuit Judges.
PER CURIAM:*
Cheryl Ann Dupre appeals the district court’s dismissal of her claims
against two health care-related data banks and the Director of Health and
Human Services’ Department’s Quality Assurance Division (collectively, “the
Federal Defendants”). Her claims against the Federal Defendants, while never
*
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. 09-30481
clearly articulated here or in the court below, appear to stem from proceedings
in which Dupre’s nursing privileges were revoked. Reports to the health care
data banks she sued were involved at least in some way.
Citing the lack of any pleaded facts that would support a cause of action
against them, the Federal Defendants filed a motion to dismiss in the district
court. They also challenged the court’s subject matter jurisdiction. Under a
local rule in that district, where a respondent fails to file a timely response to a
motion, the court can consider the motion unopposed. Pursuant to that local
rule, the district court granted the motion to dismiss. It also found the motion
well-taken on the merits.
On appeal, Dupre fails to brief the dismissal under the local rules. She
fails in any meaningful way to address the merits of the motion to dismiss or the
district court’s order granting same. Her entire “Argument” section consists of
seven lines, with no citation to authority and only a request for reinstatement
of her nursing license. In other sections of her brief, she cites to a handful of
cases and statutes without explaining how those cases and statutes support her
claims here or demonstrate any error by the district court.
We recognize that Dupre is appearing pro se. While we construe pro se
filings liberally, “‘we also require that arguments must be briefed to be
preserved.’” Yohey v. Collins, 985 F.2d 222, 225 (5th Cir. 1993)(citation omitted).
Dupre has wholly failed to make any intelligible argument in support of her
appeal. We conclude that she has failed to meet her appellate burden. Id.
AFFIRMED.
2
| {
"pile_set_name": "FreeLaw"
} |
723 F.2d 902
Luke (Eugene D.M.)v.Pan American World Airways, Inc.
NO. 82-1902
United States Court of Appeals,Fourth circuit.
DEC 13, 1983
1
Appeal From: E.D.Va.
2
AFFIRMED.
| {
"pile_set_name": "FreeLaw"
} |
537 U.S. 863
MORRISONv.UNITED STATES.
No. 01-10784.
Supreme Court of United States.
October 7, 2002.
1
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT.
2
C. A. 11th Cir. Certiorari denied.
| {
"pile_set_name": "FreeLaw"
} |
Case: 15-40429 Document: 00513307368 Page: 1 Date Filed: 12/15/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 15-40429
Conference Calendar
United States Court of Appeals
Fifth Circuit
FILED
December 15, 2015
UNITED STATES OF AMERICA,
Lyle W. Cayce
Clerk
Plaintiff-Appellee
v.
MARGARITO RUIZ-AGUILLON,
Defendant-Appellant
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 7:14-CR-1816-1
Before JONES, SOUTHWICK, and COSTA, Circuit Judges.
PER CURIAM: *
Appealing the judgment in a criminal case, Margarito Ruiz-Aguillon
raises an argument that is foreclosed by United States v. Martinez-Lugo, 782
F.3d 198, 204-05 (5th Cir. 2015), cert. denied, 2015 WL 3867557 (Nov. 30, 2015)
(No. 14-10355), in which this court held that an enhancement under
U.S.S.G. § 2L1.2(b)(1)(A)(i) for a prior felony conviction of a drug trafficking
offense is warranted regardless whether the prior conviction required proof
* 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: 15-40429 Document: 00513307368 Page: 2 Date Filed: 12/15/2015
No. 15-40429
of remuneration or commercial activity. Accordingly, the motion for
summary disposition is GRANTED, and the judgment of the district court is
AFFIRMED.
2
| {
"pile_set_name": "FreeLaw"
} |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.