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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 07a0387n.06
Filed: June 12, 2007
No. 06-3467
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
BENJAMIN MENDIETA-ROBLES )
)
Petitioner, )
)
v. ) ON REVIEW FROM THE
) BOARD OF IMMIGRATION
ALBERTO R. GONZALES, Attorney General, ) APPEALS
)
Respondent. )
BEFORE: KEITH and COLE, Circuit Judges; and OLIVER, District Judge.*
R. GUY COLE, JR., Circuit Judge. Benjamin Mendieta-Robles, a lawfully admitted alien
from Mexico, petitions this Court for review of a final order of the Board of Immigration Appeals
(“BIA”), affirming an immigration judge’s order that he be removed as an aggravated felon.
Mendieta-Robles pleaded guilty to selling or offering to sell 1,000 grams of cocaine, a felony under
Ohio Revised Code (“ORC”) § 2925.03(A)(1). The immigration judge determined that this
conviction qualified as a drug-trafficking “aggravated felony” under section 101(a)(43)(B) of the
Immigration and Nationality Act (“INA”), 8 U.S.C. § 1101(a)(43)(B), subjecting Mendieta-Robles
to deportation. 8 U.S.C. § 1227(a)(2)(A)(iii). Because we hold that Mendieta-Robles’s Ohio
conviction does not qualify as an aggravated felony under the INA, we REVERSE the BIA’s order
*
The Honorable Solomon Oliver, Jr., United States District Judge for the Northern District
of Ohio, sitting by designation.
No. 06-3467
Mendieta-Robles v. Gonzales
dismissing Mendieta-Robles’s appeal and REMAND this case to the BIA for entry of an order
terminating deportation proceedings against Mendieta-Robles.
I. BACKGROUND
Mendieta-Robles, a citizen and native of Mexico, was lawfully admitted to the United States
in 1996 as a conditional resident and adjusted to permanent-resident status in 1999.
In October 2002, Mendieta-Robles was arrested and charged in a two-count indictment with
(1) trafficking in cocaine, and (2) possession of cocaine, in violation of ORC §§ 2925.03 and
2925.11, respectively. Count One read as follows:
Benjamin Medieta . . . , on or about the 8th day of October in the year of our lord,
2002, within the county of Franklin aforesaid, in violation of section 2925.03 of the
Ohio Revised Code, did knowingly sell or offer to sell a controlled substance
included in Schedule II, to wit: methylbenzoylecgonine, commonly known as cocaine
in an amount equal to or exceeding one thousand(1,000) grams of cocaine as defined
in section 2925.01 of the Ohio Revised Code . . . .
(JA 105.) In September 2003, Mendieta-Robles pleaded guilty to Count One only, without
specification, a felony in the first degree. The Franklin County Court of Common Pleas sentenced
Mendieta-Robles to four years’ imprisonment and suspended his drivers license for six months.
Soon after, the Department of Homeland Security initiated removal proceedings against
Mendieta-Robles, under 8 U.S.C. § 1227(a)(2)(A)(iii), as an admitted alien who had been convicted
of an “aggravated felony,” as defined in 8 U.S.C. § 1101(a)(43). Specifically, the definition of
aggravated felony includes “drug trafficking crimes” and crimes involving “illicit trafficking in a
controlled substance.” 8 U.S.C. § 1101(a)(43)(B). At his removal hearing, Mendieta-Robles
conceded that he was convicted under ORC § 2925.03(A)(1) of knowingly selling or offering to sell
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No. 06-3467
Mendieta-Robles v. Gonzales
a controlled substance, and did not contest the amount of the controlled substance. Mendieta-Robles
argued, however, that the statute was divisible and that a mere offer to sell is not an aggravated
felony. On October 20, 2003, an immigration judge concluded that Mendieta-Robles’s conviction
under ORC § 2925.03(A)(1) qualified as an aggravated felony and ordered Mendieta-Robles
removed to Mexico. Mendieta-Robles timely appealed to the BIA.
The BIA affirmed the immigration judge’s order and dismissed Mendieta-Robles’s appeal,
concluding that Mendieta-Robles had been convicted of an aggravated felony within the meaning
of the INA and Sixth Circuit law. Mendieta-Robles timely appealed.
II. DISCUSSION
We review de novo whether a state drug conviction qualifies as an aggravated felony under
the INA. Patel v. Ashcroft, 401 F.3d 400, 407 (6th Cir. 2005) (“[T]he BIA’s ultimate conclusion that
a particular state conviction amounts to an aggravated felony conviction within the meaning of
§ 1227(a)(2)(A)(iii) is reviewed de novo because such a conclusion depends upon interpreting state
statutes and federal statutes unrelated to immigration.” (citing Chery v. Ashcroft, 347 F.3d 404, 407
(2d Cir. 2003))).
An admitted alien may be deported if he is convicted of an “aggravated felony.” 8 U.S.C.
§ 1227(a)(2)(A)(iii). The INA defines a multitude of offenses that qualify as aggravated
felonies—for example, murder, rape, laundering over $10,000, managing a prostitution business, and
commercial counterfeiting. See 8 U.S.C. § 1101(a)(43). Certain drug offenses may also amount to
aggravated felonies if they fall within the following definition: “illicit trafficking in a controlled
substance (as defined in [21 U.S.C. § 802]), including a drug trafficking crime (as defined in [18
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No. 06-3467
Mendieta-Robles v. Gonzales
U.S.C. § 924(c)]).” 8 U.S.C. § 1101(a)(43)(B). In 18 U.S.C. § 924(c)(2), “the term ‘drug trafficking
crime’ means any felony punishable under the Controlled Substances Act (21 U.S.C. § 801 et seq.),”
or two other federal acts not relevant here. The term “aggravated felony” applies to violations of
both federal and state law. 8 U.S.C. § 1101(a)(43).
We have interpreted the INA’s definition to provide two routes for a state drug conviction
to qualify as an aggravated felony. United States v. Palacios-Suarez, 418 F.3d 692, 697 (6th Cir.
2005); Garcia-Echaverria v. United States, 376 F.3d 507, 512 (6th Cir. 2004); accord Gerbier v.
Holmes, 280 F.3d 297, 299 (3d Cir. 2002). Under the first route—the “illicit trafficking”
approach—a state drug conviction is an aggravated felony if it is (1) a felony under state law, and
(2) contains a trafficking element. See Garcia-Echaverria, 376 F.3d at 512; Gerbier, 280 F.3d at
299. Under the second route—the “hypothetical federal felony” or “hypothetical felony”
approach—a state drug conviction is an aggravated felony if it would be punishable as a felony under
the Controlled Substances Act, regardless of whether the conviction is a felony or a misdemeanor
under state law. See Garcia-Echaverria, 376 F.3d at 512; Gerbier, 280 F.3d at 299. The question
then is whether Mendieta-Robles’s state drug conviction under ORC § 2925.03 qualifies as an
aggravated felony under either of these approaches.
To determine whether a prior conviction should be considered an aggravated felony for
deportation purposes, we start with the analytical model constructed by the United States Supreme
Court in Taylor v. United States, 495 U.S. 575 (1990). See, e.g., Martinez-Perez v. Gonzales, 417
F.3d 1022, 1025-26 (9th Cir. 2005); Singh v. Ashcroft, 383 F.3d 144, 148 (3d Cir. 2004); cf. United
States v. Sanders, 470 F.3d 616, 619 (6th Cir. 2006) (employing Taylor’s approach to determine
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No. 06-3467
Mendieta-Robles v. Gonzales
whether a state conviction was a “violent felony” under the Armed Career Criminal Act). Under this
categorical approach, an adjudicator “must look only to the statutory definitions of the prior
offenses,” and may not “consider other evidence concerning the defendant’s prior crimes,” including
“the particular facts underlying [the] conviction[].” Taylor, 495 U.S. at 600. In some cases,
however, “the language of the particular subsection of 8 U.S.C. § 1101(a)(43) at issue will invite
inquiry into the underlying facts of the case,” or “the disjunctive phrasing of the statute of conviction
will similarly invite inquiry into the specifics of the conviction.” Singh, 383 F.3d at 148. In these
cases, courts have interpreted “Taylor’s edict to include examination of documentation or judicially
noticeable facts that clearly establish that the conviction is a predicate conviction . . . , such as the
indictment, the judgment of conviction, jury instructions, a signed guilty plea, or the transcript from
the plea proceedings[.]” United States v. Rivera-Sanchez, 247 F.3d 905, 908 (9th Cir. 2001) (internal
quotations marks, alterations, and citation omitted); accord Shepard v. United States, 544 U.S. 13,
26 (2005) (explaining that in a nonjury case, a court might examine not only the “charging
document” but also “the terms of a plea agreement,” the “transcript of colloquy between judge and
defendant,” or “some comparable judicial record” of information about the “factual basis for the
plea”).
Therefore, we must first analyze the statute that formed the basis of Mendieta-Robles’s
conviction. ORC § 2925.03 is a broad statute that reads in relevant part as follows: “No person shall
knowingly . . . [s]ell or offer to sell a controlled substance[.]” ORC § 2925.03(A)(1). The statute
punishes a broad range of conduct: an individual can be convicted under it for either selling drugs
or merely offering to sell drugs, without possession or even transfer to a buyer. State v. Chandler,
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Mendieta-Robles v. Gonzales
846 N.E.2d 1234, 1236-37 (Ohio 2006). Indeed, ORC § 3719.01(AA) defines “sale” extremely
broadly to include delivery, barter, exchange, transfer, or even gift. Under the statute, the offense
is complete when an offer is made with the requisite intent—neither delivery of the drug, exchange
of money, nor a direct unequivocal act towards a sale are necessary elements of the offense. See,
e.g., Chandler, 846 N.E.2d at 1236-37. This means, for instance, that a mere offer to give away
marijuana falls within the ambit of ORC § 2925.03(A)(1).
The relevant documents and judicially noticeable facts do not indicate whether Mendieta-
Robles was convicted of selling or merely offering to sell cocaine. Mendieta-Robles pleaded guilty
to Count One only: “in violation of section 2925.03 . . . [Mendieta-Robles] did sell or offer to sell
at least one thousand (1,000) grams of cocaine that is not crack cocaine . . . .” (JA 105.) No other
documents help clarify whether Mendieta-Robles did anything more than offer 1,000 grams of
cocaine for sale, exchange, barter, or gift. Nothing in the record indicates whether Mendieta-Robles
even possessed cocaine. To be sure, Mendieta-Robles did not plead guilty to Count 2 (possession
of cocaine). The only indication that Mendieta-Robles may have done more than simply offer to gift
cocaine is the title of Ohio’s statutory section to which he pleaded: “Trafficking offenses.” ORC §
2925.03. How a state titles its statutory provisions, however, is irrelevant for determining the nature
of the statute a defendant was convicted under. See Warner v. Zent, 997 F.2d 116, 133 (6th Cir.
1993) (“Such headings, however, do not constitute any part of Ohio law. Resort to a title in
construing a statute is unnecessary and improper.”). Indeed, the Ohio legislature has stated, “Title,
Chapter, and section headings and marginal General Code section numbers do not constitute any part
of the law as contained in the ‘Revised Code.’” ORC § 1.01.
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Mendieta-Robles v. Gonzales
We now turn to whether Mendieta-Robles’s Ohio conviction qualifies as an aggravated
felony under the two routes: (1) the “illicit trafficking” approach, and (2) the “hypothetical federal
felony” approach. We conclude that it does not.
A. “Illicit Trafficking” Approach
Under the “illicit trafficking” approach, a state drug conviction is an aggravated felony if it
is (1) a felony under state law, and (2) contains a trafficking element. Garcia-Echaverria, 376 F.3d
at 512; Gerbier, 280 F.3d at 299. Here, there is no question that Mendieta-Robles’s conviction under
ORC § 2925.03(A)(1) was a felony. The parties dispute, however, whether his conviction contains
a trafficking element.
Mendieta-Robles’s conviction does not contain a trafficking element. A trafficking element
involves the “unlawful trading or dealing of a controlled substance.” Garcia-Echaverria, 376 F.3d
at 513 (citing Gerbier, 280 F.3d at 305). “Essential to the concept of trading or dealing is activity
of a business or merchant nature, thus excluding simple possession or transfer without
consideration.” Steele v. Blackman, 236 F.3d 130, 135 (3d Cir. 2001) (internal quotation marks and
citation omitted). As already noted, ORC § 3719.01(AA) defines “sale” extremely broadly to
include delivery, barter, exchange, transfer, or even gift. Thus, an individual may be convicted under
ORC § 2925.03(A)(1) without the offered transfer being commercial in nature—Mendieta-Robles
could merely have offered to gift 1,000 grams of cocaine. Consistent with this, neither possession
nor exchange is a prerequisite to punishment under ORC § 2925.03(A)(1). Chandler, 846 N.E.2d
at 1236-37.
The Attorney General argues that Mendieta-Robles’s conviction falls within the definition
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No. 06-3467
Mendieta-Robles v. Gonzales
of “illicit trafficking” because either portion of the statute—selling or merely offering to sell
cocaine—is, at least, “an attempt to sell cocaine for consideration—i.e. unlawful trading or dealing
for profit.” (Att’y Gen. Br. 10 (underline omitted).) This argument, however, ignores ORC
§ 3719.01(AA), which defines “sale” to include gift—a form of transfer that does not require
consideration. See, e.g., Guethlein v. Ohio State Liquor Control Comm., No. 05AP-888, 2006 WL
827434, at *3 (Ohio App. Mar. 30, 2006) (“The usual and customary meaning of ‘gift’ is a
‘voluntary transfer of property to another made gratuitously and without consideration.’” (quoting
Black’s Law Dictionary 688 (6th ed. 1990))).
Accordingly, an individual may be convicted under ORC § 2925.03(A)(1) without trading
or dealing in a controlled substance for profit. Here, neither the relevant documents nor judicially
noticeable facts indicate whether Mendieta-Robles engaged in commercial trading or dealing of
cocaine. Mendieta-Robles’s conviction is therefore insufficient to establish that the underlying crime
involved “illicit trafficking.” See, e.g., Rivera-Sanchez, 247 F.3d at 908 (“[I]f the statute and the
judicially noticeable facts would allow the defendant to be convicted of an offense other than that
defined as a qualifying offense . . . , then the conviction does not qualify as a predicate offense.”
(internal quotation marks and citation omitted)). Thus, under the “illicit trafficking” approach, his
conviction does not qualify as an aggravated felony.
B. “Hypothetical Federal Felony” Approach
Under the “hypothetical federal felony” approach, a state drug conviction is an aggravated
felony if it would be punishable as a felony under the Controlled Substances Act, regardless of
whether the conviction is a felony or a misdemeanor under state law. Garcia-Echaverria, 376 F.3d
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Mendieta-Robles v. Gonzales
at 512; Gerbier, 280 F.3d at 299. This approach “‘require[s] a comparison between the elements of
the [state] drug offense and [the elements of] a federal drug provision referenced in 18 U.S.C. §
924(c)(2) . . . .’” Steele, 236 F.3d at 136 (quoting Matter of Davis, 20 I. & N. Dec. 536, 541, 1992
WL 443920 (BIA 1992)). In making this determination, the BIA “looks to what the convicting court
must necessarily have found to support the conviction and not to other conduct in which the
defendant may have engaged in connection with the offense.” Id.
The Attorney General argues that, as the BIA found, Mendieta-Robles’s state conviction is
analogous to a felony conviction under two sections of the Controlled Substances Act: 21 U.S.C. §§
841(a)(1) and 846. We hold that neither are analogous.
As an initial matter, § 841(a)(1) is not analogous to ORC § 2925.03(A)(1). Section 841(a)(1)
makes it unlawful for any person to knowingly or intentionally “manufacture, distribute, or dispense,
or possess with intent to manufacture, distribute, or dispense, a controlled substance[.]” “The term
‘distribute’ means to deliver . . . a controlled substance . . . .” 21 U.S.C. § 802(11). Because ORC
§ 2925.03(A)(1) encompasses convictions where the individual neither possessed nor transferred a
controlled substance, it is difficult to see how 21 U.S.C. § 841(a)(1) is analogous to the Ohio statute.
It would mean that offering to sell cocaine is the same as delivering cocaine.
Moreover, the relevant documents and judicially noticeable facts fail to establish that
Mendieta-Robles had the requisite mens rea to commit a distribution crime. To be convicted under
ORC § 2925.03(A)(1), an individual need only intend to offer to sell a controlled substance.
Chandler, 846 N.E.2d at 1236-37; see also State v. Mughni, 514 N.E.2d 870, 872 (Ohio 1987)
(holding that an offense is complete under ORC 2925.03(A)(1) when a person knowingly offers to
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sell a controlled substance); State v. Scott, 432 N.E.2d 798, 799 (Ohio 1982) (“The proscribed
conduct is offering to sell a controlled substance, not offering the controlled substance. Therefore,
our analysis of the statute should not turn on whether appellant transferred a controlled substance.”).
On the other hand, under § 841(a)(1), an individual must intend to or knowingly distribute a
controlled substance. 21 U.S.C. § 841 (“[I]t shall be unlawful for any person to knowingly or
intentionally . . . distribute . . . a controlled substance . . . .”); accord, e.g., United States v. Pope, 561
F.2d 663, 670 (6th Cir. 1977) (“The ‘intent to distribute’ is an essential element of § 841(a)(1). . .
. 21 U.S.C. § 841(a)(1) requires both general criminal intent and the specific ‘intent to distribute’
before a violation is proven.”). Thus, the mens rea elements of each crime are substantially different.
That is, an individual may be convicted under § 2925.03(A)(1) without having any intent to
distribute a controlled substance. Cf. United States v. Garza, 410 F.3d 268, 274–76 (5th Cir. 2005)
(holding that offers to transport, sell, furnish, administer or give away a controlled substance do not
fall within the definition of “drug trafficking offense” under U.S.S.G. § 2L1.2); United States v.
Foster, No. 93-50402, 1994 WL 201201, at *1 (9th Cir. May 23, 1994) (“ORC § 2925.03(A)(4) falls
short of the federal definition of a controlled substance offense. It does not require the State to prove
an intent to distribute.”).
The Attorney General’s argument that Mendieta-Robles’s Ohio conviction is analogous to
a conviction under § 846 must fail for the same reason. To be convicted of attempted distribution,
the Government must prove that (1) the defendant acted “with the kind of culpability otherwise
required for the commission of the crime which he is charged with attempting,” and (2) the
defendant “engaged in conduct constituting a substantial step toward commission of the crime . . . .”
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United States v. Stone, 960 F.2d 426, 433 (5th Cir.1992) (quotation marks and citation omitted); see
also, e.g., United States v. Pratt, 351 F.3d 131, 135 (4th Cir. 2003) (“An attempt to commit a crime,
which is recognized as a crime distinct from the crime intended by the attempt, punishes conduct that
puts in motion events that would, from the defendant’s point of view, result in the commission of
a crime but for some intervening circumstance.”). Because, here, a hypothetical conviction under
§ 846 would require the government to prove that Mendieta-Robles acted with the same mens rea
as a conviction under § 841, and because, as already noted, the mens rea elements of § 841 and ORC
§ 2925.03(A)(1) are substantially different, Mendieta-Robles’s Ohio conviction would also not be
punishable as a felony under § 846.
C. Matter of Garcia-Torres
A recent BIA decision supports our analysis. In Matter of Garcia-Torres, No. A45-864-724,
(BIA Oct. 19, 2006), the BIA held that there was insufficient evidence to conclude that Garcia-
Torres’s two convictions under ORC § 2925.03(A) qualified as an “aggravated felony” under the
INA. The BIA first addressed the “hypothetical federal felony” approach. The BIA explained that
offering to sell a controlled substance can be simplified to a verbal or written communication, which
entails no physical delivery of a controlled substance, and, without the act of delivery, Garcia-Torres
could not be found to have distributed cocaine. Similarly, the BIA also concluded that Garcia-
Torres’s conviction did not amount to an aggravated felony under the “illicit drug trafficking”
approach. The BIA found that the record failed to disclose whether Garcia-Torres was convicted of
selling cocaine for profit. The BIA noted that it is possible for an individual to be convicted under
ORC § 2925.03(A)(1) without trading or dealing in a controlled substance for profit. Even though
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Mendieta-Robles v. Gonzales
the BIA found that the record did not support a conclusion that Garcia-Torres’s conviction qualified
as an aggravated felony, the BIA remanded the case to the immigration court to allow both parties
the opportunity to introduce evidence as to whether either of Garcia-Torres’s convictions qualified
as an aggravated felony under the INA.
Although we agree with the BIA’s analysis in Garcia-Torres, a remand in this case is
unnecessary. As already noted, reviewing courts “must look only to the statutory definitions of the
prior offenses,” and may not “consider other evidence concerning the defendant’s prior crimes,”
including, “the particular facts underlying [a] conviction[].” Taylor, 495 U.S. at 600. Only in
limited circumstances may courts look beyond the conviction and examine documentation or
judicially noticeable facts that clearly establish the conviction as a predicate conviction, such as the
indictment, the judgment of conviction, a signed guilty plea, or the transcript from the plea
proceedings. Rivera-Sanchez, 247 F.3d at 908. Because, in this case, the relevant documents are
already part of the record, a remand to supplement the record is unnecessary. We have a complete
record with which to make a final determination.
D. Two Recent Supreme Court Decisions
Finally, the Attorney General calls our attention to two recent Supreme Court decisions:
Gonzales v. Duenas-Alvarez, 549 U.S. ____, 127 S. Ct. 815 (2007), and James v. United States, 549
U.S. ____, 127 S.Ct. 1586 (2007). Neither helps the Attorney General.
In Duenas-Alvarez, the Supreme Court addressed whether a conviction for aiding and
abetting a theft, under California law, qualified as a “generic theft offense” under the INA. 127 S.
Ct. at 820. In holding that the California conviction qualified, the Supreme Court rejected Duenas-
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Mendieta-Robles v. Gonzales
Alvarez’s argument that the California statute, under which he was convicted, punished conduct
outside the scope of generic definition of theft (as the term is now used in the criminal codes of most
states). Id. at 822. The Supreme Court explained that,
[m]oreover, in our view, to find that a state statute creates a crime outside the generic
definition of a listed crime in a federal statute requires more than the application of
legal imagination to a state statute’s language. It requires a realistic probability, not
a theoretical possibility, that the State would apply its statute to conduct that falls
outside the generic definition of a crime. To show that realistic possibility, an
offender, of course, may show that the statute was so applied in his own case. But
he must at least point to his own case or other cases in which the state courts in fact
did apply the statute in the special (nongeneric) manner for which he argues.
Id.
The Attorney General takes Duenas-Alvarez to mean that we should proceed assuming
Mendieta-Robles was convicted of selling cocaine instead of offering to sell cocaine because it is
less likely he was simply a cocaine offerer—despite the relevant documents’ silence as to the
specifics of Mendieta-Robles’s conviction. This argument fails for two reasons. First, it requires
us to ignore the clear language of ORC § 2925.03(A)(1) (“No person shall . . . [s]ell or offer to sell
a controlled substance”), which expressly and unequivocally punishes both sales and offers. Second,
that a defendant could be convicted under ORC § 2925.03(A)(1) for offering to sell a controlled
substance is not a “theoretical possibility,” nor does it require “the application of legal imagination.”
Rather, as the Ohio Supreme Court has repeatedly stated, “[u]ndoubtedly, a person can be convicted
for offering to sell a controlled substance in violation of [ORC] § 2925.03(A)(1) without actually
transferring a controlled substance to the buyer.” Chandler, 846 N.E.2d at 1236-37; accord, e.g.,
Mughni, 514 N.E.2d at 872; Scott, 432 N.E.2d at 799. Thus, Duenas-Alvarez is inapposite.
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Neither does James v. United States assist the Attorney General. In James, the Supreme
Court addressed whether attempted burglary, under Florida law, is a “violent felony” under the
Armed Career Criminal Act. 127 S. Ct. at 1590. In holding that the Florida attempted-burglary
statute did qualify as a “violent felony,” the Supreme Court explained that Taylor’s categorical
approach does not “require[] that every conceivable factual offense covered by a statute . . .
necessarily present a serious potential risk of injury before the offense can be deemed a violent
felony.” Id. at 1597 (citing Duenas-Alvarez, 127 S. Ct. at 815). “Rather, the proper inquiry is
whether the conduct encompassed by the elements of the offense, in the ordinary case, presents a
serious potential risk of injury to another.” Id. (emphasis added).
Here, the Attorney General relies on James to contend that “selling” is the ordinary
conviction under ORC § 2925.03(A)(1) and “offering to sell” is merely a conceivable factual offense
covered by the statute. We do not agree for the same two reasons that Duenas-Alvarez is inapposite.
First, “offering to sell” is more than a conceivable factual offense covered by ORC § 2925.03(A)(1).
Section 2925.03(A)(1) by its own terms expressly contemplates and punishes offers to sell. ORC
§ 2925.03(A)(1) (“No person shall . . . [s]ell or offer to sell a controlled substance”). Moreover, as
noted, the Ohio Supreme Court has repeatedly stated that an offense under section 2925.03(A)(1)
is complete merely by making an offer to sell. See, e.g., Chandler, 846 N.E.2d at 1236-37; Mughni,
514 N.E.2d at 872; Scott, 432 N.E.2d at 799.
III. CONCLUSION
For the foregoing reasons, we REVERSE the BIA’s order dismissing Mendieta-Robles’s
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appeal and REMAND this case to the BIA for entry of an order terminating deportation proceedings
against Mendieta-Robles.
- 15 -
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5 A.3d 161 (2010)
203 N.J. 581
In the Matter of Stephen TSAI, an Attorney at Law (Attorney No. XXXXXXXXX).
D-141 September Term 2009, 066636
Supreme Court of New Jersey.
October 20, 2010.
ORDER
The Disciplinary Review Board having filed with the Court its decision in DRB 10-097, recommending that STEPHEN TSAI of BRANCHBURG, who was admitted to the bar of this State in 1992, be disbarred for violating RPC 1.1(a) (gross neglect), RPC 1.3 (lack of diligence), RPC 1.15(a) (failure to safeguard funds), RPC 1.15(d) (failure to comply with the provisions of Rule 1:21-6), RPC 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation), Rule 1:21-6 (recordkeeping violations) and the principles of In re Wilson, 81 N.J. 451, 409 A.2d 1153 (1979) and In re Hollendonner, 102 N.J. 21, 504 A.2d 1174 (1985);
And STEPHEN TSAI having been ordered to show cause why he should not be disbarred or otherwise disciplined;
And good cause appearing;
It is ORDERED that STEPHEN TSAI be disbarred, effective immediately, and that his name be stricken from the roll of attorneys;
ORDERED that STEPHEN TSAI be and hereby is permanently restrained and enjoined from practicing law; and it is further
ORDERED that all funds, if any, currently existing or hereinafter deposited in any New Jersey financial institution maintained by STEPHEN TSAI pursuant to Rule 1:21-6 be restrained from disbursement except on application to this Court, for good cause shown, and shall be transferred by the financial institution to the Clerk of the Superior Court, who is directed to deposit the funds in the Superior Court Trust Fund pending the further Order of this Court; and it is further
ORDERED that the entire record of this matter be made a permanent part of respondent's file as an attorney at law of this State; and it is further
ORDERED that respondent reimburse the Disciplinary Oversight Committee for appropriate administrative costs and actual expenses incurred in the prosecution of this matter, as provided in Rule 1:20-17.
|
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6 Ariz. App. 518 (1967)
434 P.2d 520
Howard S. HORNE, dba Howard S. Horne & Associates Investment & Realty Company, Appellant,
v.
Joseph TIMBANARD, Appellee.
No. 2 CA-CIV 345.
Court of Appeals of Arizona.
October 23, 1967.
Rehearing Denied November 15, 1967.
Review Denied December 19, 1967.
*519 Lesher, Scruggs, Rucker, Kimble & Lindamood, by Robert O. Lesher, Tucson, for appellant.
Strickland, Altaffer, Davis & Eppstein, by Robert W. Eppstein, Tucson, for appellee.
MOLLOY, Judge.
This appeal presents the question of whether the trial court, as it was presenting issues of fact to a jury, properly eliminated on its own motion certain factual issues framed by a pretrial order.
The complaint filed in the lower court is one by a real estate salesman against his broker for a share of certain commissions. Part of the relief sought in the complaint is a rescission of an agreement to accept substantially less than the salesman's regular share (60 per cent) of the commission on a certain real estate sale because of an alleged false representation made by the broker that the commission on the sale had to be shared with another broker. In that part of the complaint asking for rescission, the traditional nine elements of fraud were alleged. See Moore v. Meyers, 31 Ariz. 347, 253 P. 626 (1927).
The pretrial order included among the issues of fact:
"4. Are all of the elements of actionable fraud present to overcome the compromise and settlement, if in fact there was a compromise and settlement?"
At the conclusion of the trial, the trial court denied the broker's request for instructions informing the jury of the nine elements of fraud, and gave its own instruction on innocent misrepresentation as follows:
"A transaction into which one is induced to enter by reliance upon untrue and material representations as to subject matter made by the other party to the transaction is subject to rescission at the election of the person deceived."
The broker complains that in giving this instruction, the trial court "* * * went outside the pretrial order to take this case away from counsel and reshape it to fit a framework of its own theories." The broker relies upon Loya v. Fong, 1 Ariz. App. 482, 404 P.2d 826 (1965). But we do not see here any injection into the trial of a factual issue eliminated by the pretrial order, as in Loya. We see only a commendable narrowing of the issues to focus the attention of the jury on the critical factual issue in the case.
*520 The trial court presented this case to the jury under special interrogatories in pursuance of Rule 49(g), R.Civ.P., 16 A.R.S. The question presented on rescission was:
"If the Plaintiff, Joseph Timbanard, agreed to accept $2,000.00 as his share of commission on the first Vertlieb sale, is he now entitled to have this agreement rescinded because of alleged misrepresentations of the Defendant, Howard S. Horne?"
The elimination by the trial court, sua sponte, of the elements of actionable fraud in tort which were not included in the issues submitted to the jury, we regard as an appropriate exercise of the responsibility of the trial court to simplify and expedite litigation when possible. The essence of all pleading is to give notice of opposing claims. The broker here had clear notice from the pleadings and the pretrial order of all allegations of facts which, if true, entitled the salesman to rescind. There is reputable authority holding that a litigant is entitled to no more and has no legitimate complaint if legal theories be changed after the factual issues have congealed. See Spomer v. City of Grand Junction, 144 Colo. 207, 355 P.2d 960 (1960). In this case, the "theory" of the plaintiff's case has been altered only by the elimination of unnecessary appendages.
A suit to rescind a contract is one in equity. Kostolansky v. Lesher, 95 Ariz. 103, 106, 387 P.2d 804 (1963); and see 1 Pomeroy's Equity Jurisprudence (5th ed. 1941) § 112, p. 146. Equity has regarded a suit to rescind a contract for innocent misrepresentation as being one sounding in "fraud." 3 Pomeroy's Equity Jurisprudence (5th ed. 1941) § 885, pp. 486-87; 1 Black Rescission and Cancellation (2d ed. 1929) § 102, p. 301; and see 23 Am.Jur. Fraud and Deceit § 134, p. 932. The "fraud" perceived by equity courts was in the attempt to retain the benefits of a bargain induced by misrepresentation.
The general law is well established that the pleading of immaterial averments does not require proof of such averments in order to prevail. Spomer v. City of Grand Junction, supra; Hinton v. Wilmes, 80 Wyo. 360, 343 P.2d 201 (1959); 41 Am.Jur. Pleading § 369, p. 545; 71 C.J.S. Pleading § 522, pp. 1078-1079. We see no reason why this same law does not apply to a pretrial order. The purpose of a pretrial order is to simplify litigation and not to complicate it. When there is no more change in "theory" than presented here, we hold that if immaterial issues are included in a pretrial order, they may be eliminated by the court at the conclusion of the evidentiary-taking phase of the trial.
The broker questions whether the well-established law permitting rescission in equity for innocent, material misrepresentation is the law of this state. We have indicated in two prior decisions that we believe § 476 of the Restatement of Contracts,[1] is part of the law of this jurisdiction. Apolito v. Johnson, 3 Ariz. App. 358, 359, 414 P.2d 442, 443 (1966); Miller v. Boeger, 1 Ariz. App. 554, 558, 405 P.2d 573, 577 (1965). The broker relies upon Godfrey v. Navratil, 3 Ariz. App. 47, 411 P.2d 470 (1966), as holding contrary to these pronouncements. Insofar as Godfrey may be authority that all nine elements of tortious fraud are necessary to rescind a contract, we find it unsupported by authority and hence decline to follow it. We reaffirm our statements in Apolito and Boeger.
We do not pass upon the contention that the wording of the instruction on innocent misrepresentation was too "abstract." In substance, the instruction properly stated applicable law. There was no *521 objection voiced to the form of the instruction at the time instructions were settled and such objections cannot now be raised. Rule 51(a), R.Civ.P., 16 A.R.S.; Kostolansky v. Lesher, 95 Ariz. 103, 387 P.2d 804 (1963).
Nor do we find the instructions to be a comment upon the evidence. In evaluating this criticism, we take note that there was no dispute in the evidence but what, if the alleged representation was made by the broker, the statement was completely false. Under the undisputed evidence, if such representation was made, it was "material." Restatement of Contracts § 470(2).[2] Also, it is undisputed that the salesman was under no duty to compromise the amount of his commission. Under these circumstances, there was no need to present the questions of falsity, duty or materiality as issues of fact for jury determination. Rule 49(g), R.Civ.P., 16 A.R.S.; Reda v. Lowe, 185 Kan. 306, 342 P.2d 172 (1959); Morrison v. Goodspeed, 100 Colo. 470, 68 P.2d 458, 71 P.2d 154 (1937); 37 C.J.S. Fraud § 125, p. 453; and cf. Corbett v. Kingan, 19 Ariz. 134, 166 P. 290 (1917).
If "right to rely" is a necessary element in a suit to rescind for innocent misrepresentation, then this issue falls in the same category under the undisputed facts of this case. Unlike the situation presented in Godfrey v. Navratil, supra, there are no red flags to alert the recipient of the falsity of this misrepresentation. The salesman here was dealing with his employing broker, a person in whom he should be justified in placing confidence. When the facts are clear, the "right to rely" is a matter for court decision rather than jury determination. Albert v. Title Guarantee & Trust Co., 277 N.Y. 421, 14 N.E.2d 625 (1938); Luedke v. Pauly Motor Truck Co., 182 Wis. 346, 195 N.W. 853 (1923); and see 37 C.J.S. Fraud § 129, p. 455. Hence, though we are unable to agree with some of the reasoning of the Godfrey decision, we do not necessarily quarrel with its results.[3]
Under the undisputed evidence in this case, the only factual issue which needed resolution on the issue of misrepresentation was whether the alleged statement had been made, or not. Under Rule 49(g), R.Civ.P., the trial court has considerable discretion in the wording of interrogatories to be submitted. There might have been an even more direct way of eliciting a "categorical or other brief answer"[4] from the jury on the factual issue presented but the court was given no help from counsel in presenting it in any better fashion, and we see no error in the manner of the submission.
The broker has asked for a new trial on the grounds of newly discovered evidence. The evidence relied upon is as *522 to a collateral fact,[5] in no sense critical to the outcome of the case. We see no abuse of the trial court's discretion in denying the motion for a new trial. Sabin v. Rauch, 75 Ariz. 275, 281, 255 P.2d 206, 209 (1953).
Judgment affirmed.
HATHAWAY, C.J., and KRUCKER, J., concur.
NOTES
[1] § 476 of the Restatement of Contracts reads in pertinent part:
"(1) Where a party is induced to enter into a transaction with another party that he was under no duty to enter into by means of the latter's fraud or material misrepresentation, the transaction is voidable as against the latter, and all who stand in no better position. * * *" (Emphasis added.)
[2] § 470.
* * * * *
"(2) Where a misrepresentation would be likely to affect the conduct of a reasonable man with reference to a transaction with another person, the misrepresentation is material, except as this definition is qualified by the rules stated in § 474."[*]
Restatement of Contracts § 470(2).
[*] (§ 474 pertains to expressions of opinion.)
[3] We note that § 476 of the Restatement of Contracts, see n. 1 supra, does not specify "right to rely" as a necessary element in an action to rescind. There is, however, reputable authority taking a contrary view. Bassford v. Cook, 152 Colo. 136, 380 P.2d 907, 910 (1963).
[4] Rule 49(g), R.Civ.P., reads in part:
"* * * the court may submit to the jury written questions susceptible of categorical or other brief answer or may submit written forms of the several special findings which might properly be made under the pleadings and evidence, or it may use such other method of submitting the issues and requiring the written findings thereon as it deems most appropriate. The court shall give to the jury such explanation and instruction concerning the matter thus submitted as may be necessary to enable the jury to make its findings upon each issue." A.R.S. 16.
[5] There was a dispute as to the date the broker flew the buyers over the land purchased. The "new" evidence is an invoice showing a plane rental to the broker on the date that he testified the flight occurred.
|
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500 F.Supp. 668 (1980)
Jose LAUREANO, Petitioner,
v.
Davis HARRIS, Superintendent, Green Haven Correctional Facility, Respondent.
No. 80 Civ. 2084.
United States District Court, S. D. New York.
October 28, 1980.
*669 Jose Laureano, pro se.
Mario Merola, Dist. Atty., Bronx County, New York City, for plaintiff; Billie Manning, Asst. Dist. Atty., New York City, Laurence J. Leibowitz, of counsel.
MEMORANDUM OPINION AND ORDER
SOFAER, District Judge:
Jose Laureano has advanced seven claims in support of his petition for habeas corpus relief. Although several of these claims are meritless, one is substantial and would normally warrant thorough consideration. But because petitioner has failed to exhaust his available state remedies, the petition must be dismissed without prejudice.
I. The State Court Proceedings
Between December 1973 and March 1975, thirty-nine combined rape-sodomy-robbery-burglaries were committed in one South Bronx neighborhood. The crimes shared a common modus operandi. The perpetrator, armed with a knife or gun, would enter the victim's apartment through a bedroom window and would shout a Spanish vulgarity ("punyetta"). He would force the victim to engage in fellatio and sexual intercourse, then would rob her and burglarize the apartment. The perpetrator usually obscured his face with a handkerchief, although he occasionally pulled a turtleneck shirt over his face.
The two crimes involved in this petition (hereinafter referred to as the Cartagena and Rivera crimes) occurred on July 18 and August 6, 1974. Both followed the common pattern. Petitioner was identified by the two victims as the perpetrator and was arrested on October 18, 1974. While petitioner was in jail, fourteen more rapes occurred in the area, all following the same common pattern. The series of rapes ended on March 16, 1975, with the arrest of Jose Caraballo. Caraballo was charged with twelve separate incidents of rape, sodomy, *670 robbery, and burglary. Pursuant to a guilty plea to one rape charge, Caraballo was sentenced to between twelve and onehalf and twenty-five years of imprisonment.
A hearing pursuant to United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967) was held, and the prosecution's identification evidence was found admissible. Petitioner was then tried for the Cartagena and Rivera crimes. The prosecution's case rested on the identification of petitioner by the two victims.
After the government's case, petitioner's counsel requested permission to call as witnesses Jose Caraballo and various members of the Bronx Sex Crimes Unit. Petitioner made an extensive offer of proof. He contended that the police officers would testify that Caraballo had been arrested as the pattern rapist in the South Bronx neighborhood, that Caraballo's modus operandi and physical appearance were extremely similar to those of the perpetrator of the Cartagena and Rivera crimes, and that in their opinion Laureano had not committed those crimes. Petitioner sought to call Caraballo to prove that he was the perpetrator and to permit the jury to compare Caraballo's appearance with Laureano's.
The trial judge refused to permit petitioner to call these witnesses. The court stated that it would not put Caraballo on the stand merely to have him exercise his Fifth Amendment rights. The Court ruled:
Because of the anticipated evidence proffered by defendant, would be highly suggestive, unduly suggestive, unduly inflammatory and because it would lead to speculation on the trial jurors ... all of this anticipated evidence shall be excluded and that none of these witnesses may be called to the stand when we resume here in front of the jury.
Petitioner called one witness, a former roommate, who testified that petitioner had been at home when the crimes occurred.
On November 7, 1975, the jury convicted petitioner of rape, sodomy, two counts of burglary, robbery, attempted robbery, and menacing. The court sentenced him on January 7, 1976 to two consecutive terms of imprisonment of between eight and one-third and twenty-five years.
Petitioner filed a direct appeal. He contended that five reversible errors had occurred: the court should have granted his motion to sever the two crimes; the eyewitness testimony of the victim Cartagena should have been suppressed; the court should have permitted him to call Caraballo and the police officers as witnesses; the court should not have stated during the charge to the jury that the prosecution's evidence was uncontroverted; and the court should have instructed the jury differently as to his alibi testimony. The Appellate Division (First Department) affirmed petitioner's conviction without opinion. People v. Laureano, 54 A.D.2d 836, 387 N.Y.S.2d 1012 (1st Dep't 1976). Leave to appeal to the New York Court of Appeals was denied.
On May 30, 1977, petitioner moved in the trial court to set aside his conviction pursuant to New York Criminal Procedure Law § 440.10, contending that comments made by the presiding judge at the Wade hearing had denied him a fair trial. The court denied that motion on June 23, ruling that the issue should have been raised on direct appeal. Petitioner did not seek leave to appeal that ruling.
On June 6, 1978, Jose Caraballo confessed to the Cartagena and Rivera crimes. Caraballo wrote the confessions one month after arriving at Green Haven Correctional Facility, where petitioner was also incarcerated. Upon receipt of the confession, the Bronx District Attorney's Office reopened the case to determine whether Caraballo's confession was credible enough to cast doubt upon Laureano's guilt. An Assistant District Attorney interviewed Caraballo on July 12 and 13, 1978. Caraballo was represented by court-appointed counsel at the interview. The District Attorney's Office found Caraballo's confession untrustworthy for a variety of reasons and took no further action.
Petitioner, represented by the attorney who had represented him on appeal, moved *671 before the trial court pursuant to Criminal Procedure Law § 440.10(1)(g) to vacate the judgment and order a new trial because of the newly discovered evidence. The parties submitted written affirmations and presented oral arguments in September and October 1978. No hearing was held. On November 15, 1978, the court denied the motion to vacate. It found that Caraballo's confession was untrustworthy and that Caraballo possessed no independent knowledge of the crimes, having learned the details from Laureano. The court ruled that petitioner had not established a significant probability that the new evidence would result in a more favorable verdict at a new trial.
Petitioner, represented by counsel, appealed the denial of a new trial on December 19, 1978. The Appellate Division (First Department) affirmed the order without opinion. People v. Laureano, 73 A.D.2d 848, 422 N.Y.S.2d 273 (1st Dep't 1979). Leave to appeal to the Court of Appeals was denied. People v. Laureano, 48 N.Y.2d 1031, 425 N.Y.S.2d ___, 402 N.E.2d 151 (1980).
II. Petitioner's Habeas Corpus Claims
Petitioner filed his petition for a writ of habeas corpus, 28 U.S.C. § 2254, on April 16, 1980. He asserts seven grounds upon which the petition should be granted: (A) the trial court's refusal to provide a hearing on the motion to vacate because of new evidence denied petitioner due process; (B) the court's refusal to permit petitioner to call Caraballo and certain police officers denied him his constitutional right to present witnesses in his defense; (C) the court's charge to the jury was incorrect and prejudicial; (D) petitioner's guilt was not established beyond a reasonable doubt; (E) the denial of petitioner's motion to sever the Cartagena and Rivera crimes was unconstitutional; (F) the trial judge denied petitioner due process by failing to recuse himself from ruling on the motion to vacate the judgment; (G) the pretrial identification procedures were unduly suggestive and resulted in the admission at trial of improper identification evidence.
Pursuant to 28 U.S.C. § 2254(b), a federal court reviewing a habeas petition can address only those constitutional claims as to which petitioner has exhausted available state remedies. The Supreme Court had held that, in order to exhaust state remedies, a petitioner must fairly present to the state court the same claim that is the basis for the habeas petition. Picard v. Connor, 404 U.S. 270, 275-76, 92 S.Ct. 509, 512, 30 L.Ed.2d 438 (1971). The Court of Appeals for the Second Circuit has vigorously enforced this requirement, holding that "fair presentation" requires that the issue be presented in the context of a federal constitutional claim. Gayle v. LeFevre, 613 F.2d 21, 22-23 (2d Cir. 1980). "Where a petitioner has raised his claim in the state court solely as a violation of state statute and not on the basis of an invasion of his federal constitutional rights, dismissal by the federal courts is mandated." Wilson v. Fogg, 571 F.2d 91, 92 (2d Cir. 1978). See generally Sabino v. LeFevre, 490 F.Supp. 183 (S.D.N.Y.1980), aff'd per curiam, 630 F.2d 919 (2d Cir. 1980).
All of petitioner's claims here must be dismissed for failure to exhaust. In his direct appeal of the conviction, petitioner raised claims of error similar to those in his petition denominated "(B)" (exclusion of defense witnesses), "(C)" (prejudicial jury instructions), and "(E)" (refusal to sever the charges). Petitioner's briefs in his direct appeal demonstrate, however, that the state courts were not fairly presented with these three constitutional claims, for petitioner did not assert that the alleged errors had violated his federal constitutional rights.
Claim "(G)" (unduly suggestive pretrial identification) presents a less stark instance of failure to exhaust. Point II of petitioner's brief on direct appeal was: "The eye witness testimony of Mrs. Cartagena should have been suppressed because the photographic identification procedure and the in personam line-up procedures were suggestive, improper, and tainted." People v. Laureano, Brief for Defendant-Appellant at 7. Petitioner argued that "the initial photographic identification ... was tainted and that the subsequent photographic and in personam line-ups were the *672 fruits of the poisoned tree. The initial pretrial confrontation was both impermissibly suggestive and conducive to irreparable mistaken identification." Id. at 8. Petitioner cited without discussion one Supreme Court and one United States Court of Appeals case. The portion of claim (G) that involves the Rivera identification was not raised at all in the state court. But even as to the portion that involves the Cartagena identification, petitioner did not explicitly claim that any specific federal constitutional right was violated. The prosecution's brief on appeal concentrated exclusively on the validity of the Cartagena identification under state law. It appears, therefore, that the state courts were not fairly presented with this claim under the Second Circuit standard.[1]
In addition, petitioner failed to file a postjudgment motion pursuant to Criminal Procedure Law § 440.10 seeking to vacate his conviction on federal constitutional grounds with respect to claims (B), (C), (E), and (G).[2] He has thus failed to exhaust available state remedies with respect to these claims. Petitioner has also failed to exhaust claim (D) (guilt not proven beyond reasonable doubt), for he has not presented this claim to the state courts on appeal or in postjudgment motions.
The two remaining claims involve the disposition of the petitioner's motions to vacate and for a new trial because of newly discovered evidence. Claim (A) (failure to grant a hearing on the motion to vacate) was presented to the state courts, but not as a constitutional claim. Moreover, petitioner's counsel had waived his right to a hearing during oral argument, conceding that the motion could be decided on the basis of the papers submitted (including the transcript of the Caraballo interview). Similarly, claim (F) (failure of trial judge to recuse himself on motion to vacate) was not presented to the state courts as a federal constitutional claim. Moreover, petitioner had not requested that the judge recuse himself. Consequently the exhaustion requirement precludes consideration of any of petitioner's claims. The state procedural waivers as to these claims also bar review. See generally Wainwright v. Sykes, 433 U.S. 72, 97 S.Ct. 2497, 53 L.Ed.2d 594 (1977).
Ordinarily, no discussion of the merits of petitioner's claims would be necessary. In this case, however, petitioner is not represented by counsel, and the several clearly unmeritorious arguments he has raised may obscure the relative merit of his claim (B), involving the trial court's refusal to permit petitioner to call Caraballo and members of the Bronx Sex Crimes Unit as witnesses. This testimony, given petitioner's defense and offer of proof, would have been highly relevant. Caraballo subsequently confessed to the crimes for which petitioner was convicted. Even if Caraballo would have refused to testify, the court could have arranged for the jury to compare his appearance with petitioner's, which the record shows is strikingly similar. Such an appearance by Caraballo would not have constituted testimony and therefore could not have been itself barred by Caraballo's invocation of the Fifth Amendment, which could have been placed on the record outside the jury's presence. Moreover, the police officers allegedly would have testified that they believed that Caraballo, not Laureano, had committed these particular *673 crimes. Petitioner's defense that he was innocent would have been buttressed by evidence that the "pattern rapist" was guilty of these similar crimes.
The trial judge's refusal to permit petitioner to call any of these witnesses, because "the anticipated evidence ... would be highly suggestive, unduly suggestive, unduly inflammatory and because it would lead to speculation on the trial jurors," seems erroneous on its face. The evidence would have been "highly suggestive" of the possibility that Caraballo had committed the rapes and would have led "to speculation" as to Laureano's guilt. These are precisely the issues that were before the jury, and the trial judge's ruling essentially denied petitioner an opportunity to establish that a reasonable doubt existed as to his guilt. After this claim is properly presented to the state courts, it will be appropriate to consider it here if relief is not obtained.
The petition is dismissed for failure to exhaust state remedies. 28 U.S.C. § 2254(b).
SO ORDERED.
NOTES
[1] Even if petitioner had exhausted the portion of claim (G) that involves the Cartagena identification, that claim would likely fail on the merits. 28 U.S.C. § 2254(d) requires that a state court's findings after a hearing be presumed correct absent assertion of any of eight specified deficiencies. Petitioner has failed to assert any of the requisite deficiencies. Moreover, the state court held after a Wade hearing that the Cartagena identification had been fairly conducted and had not violated petitioner's rights. Petitioner appears unable to bear his burden of establishing by convincing evidence that the findings of fact were erroneous. See Alexander v. Smith, 582 F.2d 212, 217 (2d Cir.), cert. denied, 439 U.S. 990, 99 S.Ct. 589, 58 L.Ed.2d 664 (1978); Tanner v. Vincent, 541 F.2d 932, 937 (2d Cir. 1976), cert. denied, 429 U.S. 1065, 97 S.Ct. 794, 50 L.Ed.2d 782 (1977).
[2] Petitioner did file a section 440.10 motion related to claim (G), contending that comments made by the presiding judge at the conclusion of the Wade hearing ("I'm sure he did it. But it's for the jury to decide.") denied him a fair trial. This claim was distinct from defects in the Cartagena identification.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-4955
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
MICHAEL CHAD BOWERS,
Defendant – Appellant.
Appeal from the United States District Court for the Middle
District of North Carolina, at Greensboro. Thomas D. Schroeder,
District Judge. (1:09-cr-00240-TDS-1)
Submitted: May 31, 2011 Decided: June 9, 2011
Before GREGORY, SHEDD, and DIAZ, Circuit Judges.
Affirmed by unpublished per curiam opinion.
James B. Craven III, Durham, North Carolina, for Appellant.
Graham Tod Green, Assistant United States Attorney, Winston-
Salem, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Michael Chad Bowers appeals the 327-month sentence
imposed following his guilty plea to conspiracy to possess
stolen firearms, in violation of 18 U.S.C. § 371 (2006);
possession of stolen firearms, in violation of 18 U.S.C.
§§ 922(j) and 924(a)(2) (2006); and two counts of possession of
a firearm by a convicted felon, in violation of 18 U.S.C.
§§ 922(g)(1) and 924(a)(2) (2006). Counsel for Bowers filed a
brief in this court in accordance with Anders v. California,
386 U.S. 738 (1967), questioning whether the district court
erred in overruling Bowers’ objections to the Presentence Report
(“PSR”) and whether Bowers received ineffective assistance of
counsel. Counsel states, however, that he has found no
meritorious grounds for appeal. Bowers filed a pro se
supplemental brief. We affirm.
Bowers’ objections to the PSR are largely factual in
nature. At sentencing, the district court individually
addressed and rejected Bowers’ objections to the PSR, and
adopted the facts in the PSR. This court reviews such factual
determinations for clear error. United States v. Jenkins, 566
F.3d 160, 163 (4th Cir. 2009). We have reviewed the district
court’s rulings as to each of the claims raised and find no
clear error.
2
Further, Bowers is not entitled to relief on his claim
of ineffective assistance of counsel. We will address a claim
of ineffective assistance on direct appeal only if the lawyer’s
ineffectiveness conclusively appears on the record. United
States v. Baldovinos, 434 F.3d 233, 239 (4th Cir. 2006).
Otherwise, such claims are more properly raised in a motion
filed pursuant to 28 U.S.C.A. § 2255 (West Supp. 2010). Our
review convinces us that ineffective assistance does not
conclusively appear on the face of this record, and therefore we
decline to address this claim on direct appeal.
In accordance with Anders, we have reviewed the record
in this case and have found no meritorious issues for appeal.
We therefore affirm the district court’s judgment. This court
requires that counsel inform Bowers, in writing, of the right to
petition the Supreme Court of the United States for further
review. If Bowers requests that a petition be filed, but
counsel believes that such a petition would be frivolous, then
counsel may move in this court for leave to withdraw from
representation. Counsel’s motion must state that a copy thereof
was served on Bowers.
We affirm the judgment of the district court. We
dispense with oral argument because the facts and legal
3
contentions are adequately presented in the materials before the
court and argument would not aid the decisional process.
AFFIRMED
4
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 96-4362
SEAN BUTLER,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, District Judge.
(CR-95-480)
Submitted: October 29, 1996
Decided: December 17, 1996
Before HALL and WILKINS, Circuit Judges, and PHILLIPS,
Senior Circuit Judge.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Gregory B. English, ENGLISH & SMITH, Alexandria, Virginia, for
Appellant. Helen F. Fahey, United States Attorney, Dennis M. Ken-
nedy, Assistant United States Attorney, Alexandria, Virginia, for
Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Sean Butler, a prisoner in the Maximum Security Facility of the
Lorton Reformatory Correctional Complex, Lorton, Virginia, was
convicted of one count each of assault with a dangerous weapon (18
U.S.C. § 113(a)(3) (1994)), assault resulting in serious bodily harm
(18 U.S.C. § 113(a)(6) (1994)), and prisoner possession of a shank
(18 U.S.C. § 13 (1994), assimilating Va. Code Ann. § 53.1-203(4)
(Michie 1994) and Va. Code Ann. § 18.2-10 (Michie 1996)). Finding
no prejudicial error, we affirm.
Appellant's offenses involved the stabbing of a fellow inmate with
a shank during an outside recreation period. Appellant admitted at
trial that he had stabbed the victim, but claimed he acted in self-
defense. Appellant testified on direct examination that he was in
prison pursuant to convictions "for serious felonies, including kidnap-
ping and carrying a pistol without a license." On cross-examination,
Appellant admitted, without objection, that he committed the kidnap-
ping "while armed." When the prosecutor asked Appellant if he had
also been convicted of assault with a dangerous weapon, defense
counsel objected, and, after a brief bench conference, the objection
was overruled. The prosecutor asked the question again, and Appel-
lant answered in the affirmative. On appeal, Appellant argues that the
district court erred in allowing this question.
While the admission of evidence of a prior conviction for assault
with a dangerous weapon presents a close question, we hold that even
if the district court erred in admitting the evidence, the error was
harmless beyond a reasonable doubt. See Arizona v. Fulminante, 499
U.S. 279 (1991). As stated above, the only issue at trial was whether
Appellant stabbed the victim in self-defense. The Government pro-
duced overwhelming evidence contradicting this claim, including the
Appellant's own testimony. We therefore conclude that the two brief
2
references to a prior conviction for assault with a dangerous weapon,
committed under factually distinguishable circumstances, were harm-
less beyond a reasonable doubt.
Accordingly, we affirm Appellant's convictions and sentence. We
dispense with oral argument because the facts and legal contentions
are adequately presented in the material before the court and argu-
ment would not aid the decisional process.
AFFIRMED
3
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129 F.3d 609
Whitev.Cooper*
NO. 96-40266
United States Court of Appeals,Fifth Circuit.
Oct 07, 1997
1
Appeal From: R.D.Tex. ,No.9:91CV177 , 919 F.Supp. 1022
2
Affirmed.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34-2
|
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725 F.2d 732
233 U.S.App.D.C. 205
ITT WORLD COMMUNICATIONS, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Public Broadcasting Service, Spanish International Network,Inc., Communications Satellite Corporation, PublicBroadcasting Service, RCA Global Communications, Inc.,American Broadcasting Companies, Inc., et al., AmericanTelephone and Telegraph Company, European BroadcastingUnion, Aeronautical Radio, Inc., et al., Intervenors.WESTERN UNION INTERNATIONAL, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Public Broadcasting Service, Spanish International Network,Inc., Communications Satellite Corporation, RCA GlobalCommunications, Inc., American Broadcasting Companies, Inc.,et al., American Telephone and Telegraph Company, EuropeanBroadcasting Union, Aeronautical Radio, Inc., et al., Intervenors.ITT WORLD COMMUNICATIONS, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Communications Satellite Corporation, American BroadcastingCompanies, Inc., et al., RCA Global Communications, Inc.,Public Broadcasting Service, Spanish International Network,Inc., American Telephone and Telegraph Company, Intervenors.WESTERN UNION INTERNATIONAL, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States of America.WESTERN UNION INTERNATIONAL, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Communications Satellite Corporation, RCA GlobalCommunications, Inc., Public Broadcasting Service,Intervenors.ITT WORLD COMMUNICATIONS, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Communications Satellite Corporation, RCA GlobalCommunications, Inc., Public Broadcasting Service,Intervenors.RCA GLOBAL COMMUNICATIONS, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Aeronautical Radio, Inc., Communications SatelliteCorporation, Intervenors.WESTERN UNION INTERNATIONAL, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Aeronautical Radio, Inc., Communications SatelliteCorporation, Hawaiian Telephone Company, Intervenors.TRT TELECOMMUNICATIONS CORPORATION, Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Southern Pacific Communications Co., Aeronautical Radio,Inc., Hawaiian Telephone Co., FTC Communications,Inc., GTE Telenet CommunicationsCorporation, Intervenors.ITT WORLD COMMUNICATIONS, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Southern Pacific Communications Co., Hawaiian TelephoneCompany, Aeronautical Radio, Inc., GTE TelenetCommunications Corporation, Intervenors.RCA GLOBAL COMMUNICATIONS, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Aeronautical Radio, Inc., Communications SatelliteCorporation, Intervenors.WESTERN UNION INTERNATIONAL, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Aeronautical Radio, Inc., Communications SatelliteCorporation, Intervenors.ITT WORLD COMMUNICATIONS, INC., Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Aeronautical Radio, Inc., Communications SatelliteCorporation, Intervenors.TRT TELECOMMUNICATIONS CORPORATION, Petitioner,v.FEDERAL COMMUNICATIONS COMMISSION and United States ofAmerica, Respondents,Aeronautical Radio, Inc., Communications SatelliteCorporation, Intervenors.
Nos. 79-1046, 79-1049, 80-1318, 80-1414, 80-1947, 80-1972,82-1992, 82-2077, 82-2082, 83-1241, 83-1244,83-1245 and 83-1247.
United States Court of Appeals,District of Columbia Circuit.
Argued May 17, 1983.Decided Jan. 13, 1984.
Robert E. Conn, Washington, D.C., with whom William J. Byrnes, Washington, D.C., was on brief for petitioner, Western Union International, Inc., Petitioner in 79-1049, 80-1414, 80-1937, 82-1992 and 83-1244. Stephen C. Weingarten, Washington, D.C., also entered an appearance for petitioner.
Theodore J. Fischkin, New York City, for petitioner, ITT World Communications, Inc., petitioner in 79-1046, 80-1318, 80-1947, 82-2082 and 83-1245. Grant S. Lewis and John S. Kinzey, New York City, also entered appearances for petitioner.
Alan Y. Naftalin, Washington, D.C., with whom Margot Smiley Humphrey, Washington, D.C., Gregory C. Staple and Charles M. Lehrhaupt, New York City, were on brief for petitioner, RCA Global Communications, Inc., Petitioner in 82-1972 and 83-1241.
E. Edward Bruce, Thomas William Mayo and Lloyd D. Young, Washington, D.C., were on brief for petitioner, TRT Telecommunications Corporation. Petitioner in 82-2077 and 83-1247.
Bruce E. Fein, General Counsel, Federal Communications Commission, Washington, D.C., with whom Daniel M. Armstrong, Associate General Counsel, John E. Engle, Deputy Associate General Counsel and Nancy E. Stanley, Asst. General Counsel, Federal Communications Commission, Washington, D.C., were on brief, for respondents. Jane E. Mago, Sheldon M. Guttman, Robert R. Bruce, Attorneys, Federal Communications Commission, John J. Powers, III, Peter L. de la Cruz, Barry Grossman, Nancy C. Garrison and Frederic Freilicher, Attorneys, Department of Justice, Washington, D.C., also entered appearances for respondents.
1
Sally Katzen, Washington, D.C., with whom J. Roger Wollenberg, Neal T. Kilminster and Lawrence M. DeVore, Washington, D.C., were on brief for intervenor, Communications Satellite Corporation. Barry M. Heller, Washington, D.C., also entered an appearance for intervenor.
2
John L. Bartlett, Washington, D.C., with whom Robert J. Butler, Washington, D.C., was on brief for intervenor, Aeronautical Radio, Inc. Charles R. Cutler and James E. Landry, Washington, D.C., also entered appearances for intervenor.
3
Joseph DeFranco, Howard Monderer, Joseph M. Kittner and Randolph J. May, Washington, D.C., were on brief for intervenors, American Broadcasting Companies, Inc., CBS, Inc., and National Broadcasting Company, Inc. R. Michael Senkowski, Washington, D.C., also entered an appearance for intervenor.
4
Donald E. Ward and Philip M. Walker, Washington, D.C., were on brief for intervenor, GTE Telenet Communications Corporation.
5
Norman P. Leventhal and Meredith S. Senter, Jr., Washington, D.C., were on brief for intervenor, Spanish International Network, Inc. James A. McKenna, Jr., Washington, D.C., also entered an appearance for intervenor.
6
Thomas J. O'Reilly and Shelly Sternad Dempsey, Washington, D.C., were on brief for intervenor, Hawaiian Telephone Company. Daniel J. Greenwald, III, Washington, D.C., also entered an appearance for intervenor.
7
Harry M. Plotkin, Theodore D. Frank, Peter Tannenwald, and Cynthia L. Hathaway, Washington, D.C., entered appearances for intervenor, Public Broadcasting Service.
8
Edgar Mayfield and Shant J. Harootunian, Bedminster, N.J., entered appearances for intervenor, American Telephone and Telegraph Company.
9
Arthur Scheiner and Stuart F. Feldstein, Washington, D.C., entered appearances for intervenor, European Broadcasting.
10
Mark P. Bresnahan, Washington, D.C., entered an appearance for intervenor, Southern Pacific Communications Company.
11
Before EDWARDS, Circuit Judge, MacKINNON, Senior Circuit Judge and CELEBREZZE,* Senior Circuit Judge.
12
Opinion for the Court filed by Senior Circuit Judge CELEBREZZE.
13
CELEBREZZE, Senior Circuit Judge.
14
Petitioners1 seek review of a series of decisions2 made by the Federal Communications Commission (FCC). In these decisions, the FCC has attempted to restructure the international telecommunications markets by heightening competition between the two principal modes of telecommunications: satellite systems and cable systems. Essentially, the decisions permit the Commercial Satellite Corporation (Comsat), which had functioned previously as a wholesaler of satellite services, to sell its satellite services directly to the public, a role which previously had been performed only by petitioners. By permitting Comsat to operate as a retailer of telecommunication services, the FCC expects to foster competition between satellite and cable systems and, thus, to promote greater efficiency in both systems. The issue in this case is simply stated: whether the FCC may permit Comsat to sell its satellite services to the general public and, if it may, whether it properly has exercised its power in this instance.
I. HISTORICAL BACKGROUND
15
A. The International Telecommunications Industry. Two means of transmitting international telecommunications messages are generally available: cable and satellite. The United States communications common carriers3 own and operate the international cable network. The communications satellites in dispute are owned and operated by the International Satellite Telecommunications Organization (Intelsat).4 The Communications Satellite Corporation (Comsat) is the only United States entity permitted direct access to Intelsat's satellite system.5 Comsat, in turn, is authorized by Congress to provide satellite transmission service only to "authorized entities." 47 U.S.C. Sec. 735(a)(2). In 1966, the FCC established a policy which generally limited the class of authorized users to common carriers. Authorized Entities and Users, 4 FCC 2d 421 (1966) (Authorized User I ). As a consequence of the FCC's 1966 policy, a two-tiered market developed; Comsat acted as a "wholesaler" by leasing satellite circuits to the common carriers, who in turn, acted as "retailers" leasing satellite circuits to the public for transmission of international telecommunications messages.
16
When Comsat first offered commercial communications satellite service in 1965, the international telecommunications markets were rigidly compartmentalized; two separate and distinct classes of common carriers operated at the retail level: voice and non-voice. American Telephone & Telegraph Company (AT & T) enjoyed a monopoly in the international voice communications market, while petitioners dominated the non-voice or record services market.6 Although technological developments in the international telecommunications industry have blurred the traditional distinction between "record" and "voice" systems, see, e.g., Overseas Communications Services, FCC 82-547 (1982), petitioners are still referred to as international record carriers (IRCs).
17
The IRCs provide two types of communications services: exchange and leased-channel. Exchange messages are sent through a common switched network which connects the users to other subscribers of the system. Examples of exchange-type services offered by the IRCs include telegraph,7 telex, and TWX.8 In contrast, a leased-channel is a private line between two or more specified points. Unlike exchange service, a leased-channel user leases all or part of a circuit at an agreed rate. Because leased-channel is more expensive than exchange service, and because the majority of users do not send a sufficient number of messages to require leased-channel service, the consumer market for leased-channel service is limited to a few large and sophisticated users.9
18
Generally, exchange services are provided by the IRCs on an "end-to-end" basis. As its name implies, end-to-end service is a complete service. When exchange messages are sent by satellite, the IRCs make necessary arrangements with a U.S. domestic carrier for connecting circuits between operating centers and U.S. earth stations. The IRCs then lease satellite half-circuits10 from Comsat to transmit messages from earth stations to satellites. To complete the communications link, the IRCs lease satellite half-circuits from Comsat's foreign counterparts and arrange for connecting links between foreign earth stations and final destination points. When exchange messages are sent by cable, the IRCs make necessary arrangements with U.S. domestic carriers to send exchange messages from hinterland operating centers to IRC operating centers in designated "gateway" cities.11 The IRCs then transmit the messages through their submarine cable system and make arrangements with foreign communication corporations for connecting links.
19
Although the IRCs can provide leased-channel service on an end-to-end basis, most leased-channel customers are capable of providing their own link-up facilities. Consequently, leased-channel service generally is not provided by the IRCs on an end-to-end basis; instead, the IRCs simply provide service between designated service points. When the point to point service is between a satellite and a U.S. earth station, the service is called "basic" transmission service.
20
B. Authorized User I and Earth Station Ownership Policies. In 1966, the FCC concluded that it had authority, pursuant to the Satellite Act of 1962, to designate non-carriers as authorized users "upon a proper finding that non-carrier access to the space segment would serve the public interest and comport with the purposes and policies of the Satellite Act."12 Authorized User I, 4 FCC 2d 421, 428 (1966). The FCC, however, restricted the class of authorized users to carriers, absent "unique and exceptional circumstances," in order to protect the IRCs from potentially ruinous competition. The FCC feared that unless the IRCs were insulated from such direct competition, Comsat would capture the leased-channel market, which accounted for approximately 18.9 percent of the IRCs' total revenues, and that the IRCs would be forced to raise their rates for exchange services. Id. at 433. Because the cost benefits of satellite technology would inure to a few leased-channel customers at the expense of many exchange service customers, id. at 432-33, the FCC concluded that such a result would be inconsistent with the primary policy of the Satellite Act to extend the benefits of satellite transmission to all users. Id. See Authorized User II, 90 FCC 2d 1395, 1401 (1982).
21
The FCC recognized that its decision to limit Comsat's role to that of a "carriers' carrier" would have certain anticompetitive effects. Specifically, the FCC acknowledged that its policy would neutralize intermodal competition between satellite and cable, and that absent such competition, the carriers would favor cable over satellite even though satellite offered a less expensive means of transmission.13 Accordingly, to assure that all users would enjoy the lower costs of satellite technology, the FCC established the "prescribed use" formula which required carriers to use satellite and cable circuits in approximately equal proportions, and the "composite rate" policy which required carriers to charge tariffs which took into account any cost savings due to the increased use of the less expensive satellite system.14
22
Initially, the FCC limited ownership of the first three earth stations to Comsat. Proposed Global Commercial Communication Satellite System, 38 FCC 1104 (1965). This policy was to be in effect for two years during which time the FCC would consider applications for earth station ownership filed by Comsat and other qualified carriers. However, at approximately the same time that the FCC established its Authorized User I policy, it revised its earth station ownership policy15 and required joint ownership of all earth stations by Comsat and authorized carriers; Comsat was permitted to own a 50 percent interest in each earth station while the other interested carriers divided the remaining 50 percent interest. Subsequently, the carriers and Comsat formed the Earth Station Ownership Committee (ESOC) to make policy and investment decisions.16 Comsat assumed the general managerial responsibilities of the ESOC. This joint ownership policy was to be in effect for only a few years. In 1969, the FCC issued a notice of inquiry to review its earth station ownership policy, Earth Station Ownership & Operation, 20 FCC 2d 735 (1969), but did not modify its policy; rather, it decided to maintain its joint ownership policy until further notice. This policy remains in effect today.
23
C. The SIN Decisions. In Communications Satellite Corp., 38 FCC 1298, 1304 (1965), the FCC established a temporary "carrier of the week" policy,17 which required customers who desired Intelsat television service to obtain this service from whichever carrier was designated as "carrier of the week." Thus, AT & T and the IRCs offered television transmission service on a rotating basis. The FCC, believing that its carrier of the week policy promoted quality service, continued the policy indefinitely. American Tel. & Tel. Co., 18 FCC 2d 402 (1969). In 1978, the Spanish International Network (SIN), a network which purchases Spanish television programming from foreign countries and sells it in the United States, petitioned the FCC for authorized user status. Spanish International Network, 68 FCC 2d 1260 (1978). SIN argued that television transmission was a "unique and exceptional" service and, thus, that it was entitled to authorized user status under the FCC's Authorized User I policy. Further, SIN believed that elimination of the carrier of the week policy would best serve the public interest.18
24
Although the FCC refused to characterize television transmission service as "unique and exceptional," it did initiate a proceeding to determine whether it should waive its Authorized User I policy and permit networks to obtain television transmission service directly from Comsat. After considering comments submitted by interested parties, the FCC waived its Authorized User I policy and allowed television networks to obtain television transmission service directly from Comsat. Spanish International Network, Inc., 70 FCC 2d 2127 (1978) (SIN I ). Pursuant to SIN I, the FCC permitted Comsat to provide television services directly to all authorized users at U.S. earth stations and to all international television carriers individually. Communications Satellite Corporation, 76 FCC 2d 5 (1980) (SIN II ). Additionally, Comsat was permitted to revise its tariff for this new service. Communications Satellite Corporation, 79 FCC 2d 562 (1980) (SIN III ).
25
D. Authorized User II. The FCC issued a notice of proposed rulemaking to review its Authorized User I policy in Aeronautical Radio, Inc., 77 FCC 2d 535 (1980). In its notice, the FCC proposed to increase intermodal competition between cable and satellite systems by permitting Comsat to compete with the carriers at the retail level. Further, the FCC proposed to review its "prescribed use" and "composite rate" policies to determine whether these policies continued to serve the public interest. After considering the comments submitted by interested parties, the FCC abandoned its Authorized User I policy and established a new authorized user policy which permits non-carrier entities to obtain authorized user status and, thus, to purchase basic transmission services directly from Comsat. Moreover, the FCC permitted Comsat to establish a separate subsidiary to compete with the carriers in the end-to-end market upon the condition that Comsat treat all authorized users in a fair and consistent fashion. Finally, the FCC decided to make its composite rate policy discretionary for the IRCs and to limit its role in prescribing the use of cable and satellite facilities.
26
The FCC justified its decision in Authorized User II by enumerating changes in circumstance. The primary justification for initially restricting Comsat's entry into the retail markets, was that its entry would result in a substantial decrease in the IRCs' leased-channel revenues. Because leased-channel revenues appeared to be the fastest growing segment of the IRCs' business, and because leased-channel business was one of the IRCs' most profitable ventures, the FCC feared that a loss in leased-channel revenue would cause an increase in the IRCs' exchange service rates. Thus, the FCC concluded that the benefits of satellite technology would inure to the few leased-channel users at the expense of the many exchange service users and that such a result was incompatible with the Act's primary policy of extending the economies of satellite technology to all users.
27
A crucial assumption underlying the FCC's Authorized User I decision was that the cost of satellite circuits was substantially less expensive than cable circuits. In Authorized User II, the FCC concluded that the price difference was no longer substantial and that intermodal competition between cable and satellite was feasible. Consequently, the FCC no longer predicts a substantial revenue diversion due to losses from leased-channel revenue. Moreover, the FCC predicts that even if such a diversion does occur, the losses will not affect the IRCs' "overall profitability to such an extent as to impair their ability to provide service." Authorized User II, 90 FCC 2d 1394, 1416 (1982). In short, the FCC found that protecting the carriers from competition with Comsat for leased-channel business was no longer in the public interest.
28
Petitioners warned the FCC that its Authorized User II policy would permit Comsat to use its "monopoly" position to engage in predatory pricing and to cross-subsidize its subsidiary. Further, petitioners urged the FCC to consider the merits of direct access and independent earth station ownership,19 two related issues, prior to permitting Comsat to enter the industry's retail markets. The FCC found that the petitioners' concerns regarding Comsat's potentially illegal activities were premature: the FCC believed that the regulatory tools at its disposal were sufficient to prevent Comsat from engaging in predatory pricing. Further, the FCC determined that its requirement that Comsat establish a separate subsidiary prior to entering the retail exchange service market would permit the FCC to monitor effectively Comsat's activities. Accordingly, if Comsat engaged in a practice of cross-subsidizing its subsidiary, then the FCC would take appropriate action. Finally, the FCC concluded that it could properly implement its change in authorized user policy prior to resolving the direct access and independent earth station ownership issues. In any event, the FCC indicated that it required more information before it could resolve these complex issues.20 In an effort to collect necessary information regarding these issues, the FCC issued two notices of inquiry.21
II. STANDARD OF REVIEW
29
When reviewing a "notice-and-comment" rulemaking proceeding by the FCC, the reviewing court must determine whether the agency's decision is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. Sec. 706(2)(A). Petitioners challenge the FCC's Authorized User II decision on two grounds. First, petitioners contend that the FCC improperly concluded that the Satellite Act of 1962, 47 U.S.C. Sec. 701 et seq., grants the FCC broad discretion to designate non-carriers as authorized users. Alternatively, petitioners argue that the FCC's decision was arbitrary and an abuse of discretion because the FCC failed to consider adequately a number of factors relevant to its decision in Authorized User II.
30
When an agency interprets a statute which it has been charged with administering, the agency's interpretation must be accepted, see, e.g., Ft. Pierce Utilities Authority of Ft. Pierce v. United States, 606 F.2d 986 (D.C.Cir.), cert. denied, 444 U.S. 842, 100 S.Ct. 83, 62 L.Ed.2d 54 (1976), unless its conclusion is inconsistent with obvious congressional intent. See, e.g., United States ex rel. Dancy v. Arnold, 572 F.2d 107 (3rd Cir.1978). When reviewing an agency's policy decision, however, we must determine whether its decision is arbitrary, capricious or an abuse of discretion. In determining whether an agency's action is arbitrary or an abuse of discretion, a reviewing court must assume that the agency acted properly, e.g., Ethyl Corporation v. E.P.A., 541 F.2d 1 (D.C.Cir.) (en banc), cert. denied, 426 U.S. 941, 96 S.Ct. 2663, 49 L.Ed.2d 394 (1976), and it must refrain from substituting its judgment for that of the agency. E.g., Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 824, 28 L.Ed.2d 136 (1971). A court's inquiry, however, is not limited to determining whether the agency's action has a rational basis, e.g., Texaco, Inc. v. F.E.A., 531 F.2d 1071 (TECA), cert. denied, 426 U.S. 941, 96 S.Ct. 2662, 49 L.Ed.2d 394 (1976); a reviewing court must also determine whether the agency's decision was based on a consideration of all relevant factors. E.g., Motor Vehicle Mfrs. Ass'n v. State Farm Mut., --- U.S. ---- (1983), 103 S.Ct. 2856, 2866-67, 77 L.Ed.2d 443 (1983); Bowman Transportation v. Arkansas--Best Freight System, Inc., 419 U.S. 281, 285, 95 S.Ct. 438, 441, 42 L.Ed.2d 447 (1974) ("A reviewing court 'must consider whether the decision was based on a consideration of relevant factors.' "), quoting Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971); Ethyl Corp. v. E.P.A., 541 F.2d 1, 36 (D.C.Cir.1976) (en banc) (Close scrutiny is necessary "to determine whether the agency decision was rational and based on consideration of relevant factors"); In re Dept. of Energy Stripper Well Exemption, 520 F.Supp. 1232, 1268 (D.Kan.1981) ("The relevant factors test simply requires that the court determine the underlying issues or factors the agency must consider in order to reach a rational result."). With these principles in mind, we turn to petitioners' arguments.
III. THRESHOLD QUESTION
31
The threshold question is whether the Satellite Act of 1962, 47 U.S.C. Sec. 701 et seq., permits the FCC to designate non-carriers as authorized users which are able to lease satellite channels directly from Comsat. The plain language of the Act indicates that the class of "authorized users" contains entities other than carriers. Moreover, the plain language, the legislative history, and the statutory scheme of the Act, convince us that Congress intended to give the FCC broad discretion to designate non-carriers as authorized users and that the FCC is not required to maintain a two-tiered structure in the industry.22 Accordingly, we hold that the Act grants the FCC broad discretion to designate non-carriers as authorized users.
32
Although the Satellite Act does not define the class of permissible authorized users, the parties agree that the FCC is the proper licensing agency in this instance, and that the FCC may, under some circumstances, designate non-carriers as authorized users; the question is which non-carriers are eligible for authorized user status. Petitioners argue that the only non-carrier entity entitled to authorized user status is the United States government.23 According to petitioners, such a limitation on the FCC's discretion is consistent with Congress' predictions that Comsat would serve the industry as primarily a "carriers' carrier."24 In response, the FCC asserts that it may designate non-carriers as authorized users whenever it finds that such a designation will serve the public interest. We believe that the FCC's statutory interpretation is correct.
33
The most basic rule of statutory construction requires that courts attribute to the words of a statute their plain meaning. See, e.g., Banks v. Chicago Grain Trimmers, 390 U.S. 459, 465, 88 S.Ct. 1140, 1144, 20 L.Ed.2d 30 (1968). The Act indicates that Comsat may lease satellite channels to "United States communications common carriers and to other authorized entities, foreign and domestic." 47 U.S.C. Sec. 735(a)(2) (emphasis added), and that Comsat may "contract with authorized users, including the United States Government, for the services of the communications satellite system." 47 U.S.C. Sec. 735(b)(4) (emphasis added). Congress has indicated that Comsat may deal directly with "carriers", a well-defined group, as well as with "other authorized entities," a group whose membership is unclear. Petitioners would define the members of the latter class as including only carriers and the United States government. Such an interpretation, however, is inconsistent with the plain meaning of the statute because it renders the statutory language "other authorized entities" a redundancy.25 If Congress intended to restrict the class of authorized users to authorized carriers and the United States government, it knew how to do so.26 Although the intended scope of the class of "authorized entities" is not defined expressly by the Act, the plain language indicates that the words "other authorized entities" mean non-carriers, including the United States government, who receive a license from the appropriate licensing agency. Thus, the plain language of the Act does not limit the FCC's discretion to designate non-carriers as authorized users.
34
The legislative history indicates that Congress specifically considered language which would have limited Comsat's ability to offer retail services. Prior to the passage of the Act, the FCC objected strenuously to the proposed language "and to other authorized entities" because it believed that such language was broad enough to allow Comsat to compete with carriers on the retail level. In February of 1962, Newton Minow, Chairman of the FCC, urged the Senate Committee on Aeronautical and Space Sciences, which was considering Senate Bill S. 2814,27 to delete "other authorized entities" and to restrict expressly Comsat's ability to enter the retail market. Chairman Minow offered the Senate Committee a proposed revision of S. 2814 which would have limited Comsat's ability to serve the general public.28 To assure that Congress was aware of the FCC's opposition to S. 2814, Chairman Minow also appeared before the House Committee on Interstate and Foreign Commerce on March 14, 1962 and warned the Committee, which was considering the House version of S. 2814,29 that the proposed language "authorized entities" would permit Comsat to compete with the carriers at the retail level. Again, Chairman Minow expressed the FCC's desire that the language "authorized entities" be deleted and that Comsat's role in the industry be defined expressly "as a communications common carriers' carrier." Communications Satellites: Hearings on H.R. 10115 and 10138 before the House Comm. on Interstate and Foreign Commerce, 87th Cong., 2d Sess. 408, 416-17 (1962). On April 11, 1962, Chairman Minow testified before the Senate Commerce Committee reiterating the FCC's interpretation that the "authorized entities" language gave it unwanted discretion to permit Comsat to compete with the carriers at the retail level.30 Clearly, Congress was aware that the FCC, the agency charged with the responsibility of choosing which entities would be entitled to authorized user status, would not consider Congress' predictions concerning Comsat's role in the industry as a limitation on its discretion to designate non-carriers as authorized users. Yet, in the bills' final version, Congress retained the "authorized entities" language. Congress' action in this regard is a strong indication that it did not intend to limit the FCC's discretion to designate authorized users and thus to allow Comsat to enter the retail market, by requiring the FCC to promote a two-tiered structure.
35
Finally, the legislative scheme of the Act also supports the conclusion that Congress' predictions concerning Comsat's role as a carriers' carrier were not intended as a limitation on the FCC's discretion in designating non-carriers as authorized users. The Act specifically permits the FCC to "grant appropriate authorizations for the construction and operation of each satellite terminal station (earth station), either to the corporation (Comsat) or to one or more authorized carriers or to the corporation and to one or more such carriers, jointly, as will best serve the public interest, convenience, and necessity." 47 U.S.C. Sec. 721(c)(7). The provision permits both Comsat and the IRCs to own earth stations and, thus, to provide independently earth station service. Entities that are permitted to independently own and operate earth stations can provide retail services;31 thus, the Act grants both Comsat and the IRCs the ability to offer retail services. Also, the Act encourages the FCC to maximize competition "in the provision of equipment and services utilized by the system" and to assure that Comsat is operated in such a fashion as to "maintain and strengthen competition in the provision of communications services to the public." 47 U.S.C. Sec. 701(c). Clearly, if Congress intended to foreclose competition between Comsat and the IRCs at the retail level, it would not have permitted the FCC to allow both Comsat and the IRCs to provide retail services and encouraged the FCC to promote maximum competition in the provision of satellite services. Thus, the scheme of the Act is further evidence that Congress did not intend to foreclose retail competition between Comsat and the IRCs.
36
We find that the plain language, the legislative history and the scheme of the Act indicate clearly that the FCC may designate non-carriers as authorized users, and that the FCC is not required to maintain a two-tiered structure in the industry. Congress' predictions concerning Comsat's role in the industry are insufficient to support petitioners' inference that Congress intended to limit the FCC's discretion to designate non-carriers as authorized users. In light of the FCC's repeated requests that Congress adopt language limiting expressly Comsat's ability to compete with the carriers at the retail level and Congress' refusal to adopt such language, we believe the more reasonable inference is that Congress' predictions were not intended as limitations on the FCC's discretion. Moreover, a review of the Act reveals that both Comsat and the common carriers may offer a retail service and that one of the policies of the Act is to promote maximum competition in the industry when such competition furthers the public interest. We believe that the scheme of the Act indicates that Congress did not intend to restrict the FCC's ability to promote retail competition between Comsat and the common carriers. Accordingly, we hold that the Satellite Act permits the FCC to designate non-carriers as authorized users so long as such status furthers the public interest, and therefore, that the Act affords the FCC the discretion to allow Comsat to compete at the retail level.
IV. RELEVANT FACTORS
37
Petitioners argue that the FCC's decision in Authorized User II is arbitrary because the FCC permits Comsat to enter the retail markets without considering adequately a number of relevant factors.32 First, petitioners claim that the FCC has failed to consider adequately a number of anticompetitive effects which will result from Comsat's entrance into the retail markets.33 In response, the FCC asserts that it has considered fully the potential anticompetitive effects that might result from its change in policy.
38
Petitioners' second argument concerns two issues which the FCC has deferred: direct access and independent earth station ownership.34 Because resolution of these issues may exacerbate or minimize the predicted anticompetitive effects, petitioners believe that these issues are germane to the FCC's Authorized User II policy. Consequently, the petitioners conclude that the FCC acted arbitrarily by failing to consider the direct access and independent earth station ownership issues prior to issuing its decision. The FCC, however, believes that while the direct access and independent earth station ownership issues may have merit, these issues are not "inextricably tied" to its Authorized User II policy. Authorized User II, 90 FCC 2d 1394, 1433-34 (1982). According to the FCC, the complexity of the direct access and independent earth station ownership issues and the lack of adequate information justifies its decision to defer these issues.
39
A. Anticompetitive effects. Petitioners claim that the FCC failed to analyze fully the anticompetitive effects of the FCC's change in authorized user policy. Specifically, they argue that the FCC's new policy will result in a substantial diversion of leased-channel business from the IRCs to Comsat;35 the diversion of revenues will result from the IRCs' inability to compete with Comsat for leased-channel business. The IRCs assert that the leased-channel and exchange service markets are interrelated, and that a substantial loss in leased-channel business will affect adversely exchange service prices and, thus, the public interest. The FCC does not contest the IRCs' reasoning that a substantial diversion of leased-channel business will affect adversely the public interest; rather, it challenges the IRCs' premise that a substantial diversion of leased-channel business is likely to result from its change in policy. Thus, the preliminary dispute is whether the FCC's Authorized User II policy will result in a substantial diversion of leased-channel business from the IRCs to Comsat because of the IRCs' inability to compete effectively on the basis of price.
40
Under the FCC's Authorized User II policy, competitors for leased-channel business will compete primarily on the basis of price. Leased-channel customers are sophisticated and able to arrange for their own link-up facilities.36 Leased-channel consumers do not depend on the IRCs for link-up service. We believe that the IRCs' ability to provide link-up service efficiently will not affect substantially the IRCs' competitive position in the leased-channel market. Moreover, leased-channel customers generally do not perceive any real distinction between cable and satellite service. Indeed, the FCC's use of prescribed use formulas presumes that satellite and cable circuits are, for the most part, interchangeable.37 Moreover, Comsat's basic transmission service and the satellite leased-channel service offered by the IRCs are virtually identical.38 In general, competition for leased-channel business does not depend upon a competitor's ability to provide link-up service, upon a competitor's ability to provide different services, or upon a competitor's ability to operate earth stations efficiently. We believe that the leased-channel customers are likely to distinguish between leased-channel competitors based on the competitor's price per circuit. Consequently, even small variations in price between competitors' satellite circuits or between competitors' cable and satellite circuits are likely to result in a diversion of leased-channel business.
41
In light of the leased-channel market's high sensitivity to price, intramodal competition for leased-channel business does not appear to be feasible under the FCC's Authorized User II policy. The FCC's Authorized User II policy would permit non-carriers to deal directly with Comsat for basic transmission service and would require Comsat to charge both carriers and non-carriers the same bundled rate for basic transmission service; thus, non-carriers and carriers can purchase satellite service at the same price.39 Authorized User II, 90 FCC 2d 1394, 1429 (1982). Non-carriers are unlikely to lease basic transmission from the IRCs if basic transmission service is available directly from Comsat at the same rate. Unless the IRCs are willing to offer basic transmission service to non-carriers at a rate less than cost, leased-channel customers will be encouraged to bypass the IRCs and lease basic transmission service directly from Comsat.40 In short, we find that the FCC's Authorized User II policy is likely to frustrate meaningful intramodal competition for leased-channel business between Comsat and the IRCs.
42
Because intramodal competition is unlikely, vigorous competition between the IRCs and Comsat for leased-channel business depends upon the feasibility of intermodal competition. In 1966, intermodal competition was not feasible because satellite circuits were substantially less expensive than cable circuits. In its Authorized User II decision, the FCC found that "technological advances" have made cable "much more cost competitive than it believed possible." Authorized User II, 90 FCC 2d 1394, 1414 (1982). To support this proposition, the FCC cites one example which indicates that the per circuit cost of cable voice-grade circuits is approximately $46,00041 and notes that initial fiber optics42 projections indicate that the future cost for cable will be approximately $15,000 to $19,000 per circuit. The present cost of a satellite voice-grade circuit is $13,500. Based on this information, the FCC found that cable leased-channel will be competitive with satellite leased-channel at some time in the future. Id. at 1414 n. 21. Whether intermodal competition is presently feasible, however, is a separate question.
43
Although cable is more competitive than it was in 1966, the FCC implicitly recognizes that cable remains a more expensive means of transmitting telecommunications messages. In its Authorized User II decision, the FCC states that "the rapidly diminishing gap between cable and satellite facilities cost should significantly aid the IRCs in pricing their leased-channel services competitively", id. at 1416, and that "cable should be competitive" when fiber optics is implemented by the carriers. Id. at 1414 n. 21 (emphasis added). These statements indicate that a gap between cable and satellite costs still exists, and that cable is not yet competitive with satellite. In light of the leased-channel market's high sensitivity to price, we believe that the IRCs' prediction that a substantial diversion of leased-channel business to Comsat will result from Comsat's entrance into the retail leased-channel market is based on more than speculation.43 Because we believe that a risk exists that Comsat's entrance into the retail leased-channel market will result in a substantial diversion of leased-channel business from the IRCs to Comsat, the critical question is what effect such a diversion will have on the public interest.
44
In Authorized User I, 4 FCC 2d 421, 432 (1966), the FCC's primary concern was that a substantial loss of leased-channel business by the IRCs would result in an increase in the IRCs' rates for exchange services. The FCC reasoned that a substantial loss of leased-channel revenues would substantially decrease the IRCs' operating revenues and, thus, force the IRCs to increase their exchange service rates. Id. Because an increase in exchange service rates would affect adversely many exchange service customers, the FCC concluded that permitting Comsat to compete with the IRCs at the retail level would be inconsistent with the Satellite Act's primary policy of extending the economies of satellite technology to all users and, thus, assumed that an increase in exchange service rates was not in the public interest. In Authorized User II, the FCC did not abandon its assumption; instead, it based its change in policy on a number of changed circumstances. Authorized User II, 90 FCC 2d 1394, 1415 (1982). First, the FCC explained that "the IRC's operations are, at least for the most part, profitable and that the IRCs are experiencing rapid growth." Id. Second, the FCC indicated that the IRCs' rates of return in 1976 for leased-channel business ranged from between -3.3 percent to 5.6 percent. In contrast, the IRCs' rate of return in 1976 for telex, which accounted for 62 percent of the IRCs' total revenues, ranged from between 31.7 percent to 58.3 percent. Id. at 1413. Based on the IRCs' overall profitability and the relative unimportance of leased-channel business to the IRCs' overall revenues, the FCC found that any diversion of leased-channel revenue from the IRCs to Comsat would not "lessen the IRCs' ability to provide service to the public or ... otherwise impair the quality or availability of public service." Id. at 1419 (emphasis added). Although we accept the FCC's conclusion that a loss of leased-channel revenues by the IRCs will not threaten the IRCs' continued existence or impair their ability to provide quality exchange services, the question remains whether the FCC's Authorized User II policy will result in an increase in exchange service rates to the detriment of the many exchange service customers.
45
The FCC's Authorized User II policy could affect adversely exchange service rates and, thus, the public interest in a number of ways. For example, to the extent that a loss of leased-channel business lessens the volume of messages sent by cable, the marginal cost for all cable services will increase.44 Moreover, if leased-channel business is lost, the IRCs' exchange customers must pay a relatively higher proportion of the IRCs' administrative overhead. Further, the FCC's decision to eliminate composite rate formulas and, at least in part, prescribed use formulas, might also affect adversely the IRCs' exchange service prices. Presumably, the FCC's composite rate and prescribed use requirements have kept exchange service prices artificially low; in effect, cable customers have been subsidized by satellite customers. The elimination of composite rate formulas will reflect the true costs of satellite and cable. Cable remains a more expensive medium than satellite; accordingly, the elimination of composite rate formulas will reflect the generally higher cost of cable. In summary, we believe that the cost of cable exchange services in the short term is likely to increase as a result of the FCC's Authorized User II policy.
46
An increase in the IRCs' cable exchange service rates is unimportant unless the increase affects adversely the public interest. See Hawaiian Tel. Co. v. FCC, 498 F.2d 771 (D.C.Cir.1974). In Authorized User I, 4 FCC 2d 421, 432-33 (1966), the FCC concluded that an increase in the IRCs' cable exchange service rates would affect adversely the public interest. In 1966, however, the common carriers were the only entities permitted to offer retail exchange services. Further, the carriers had a clear incentive to prefer cable over satellite transmission. Accordingly, any increase in the carriers' cable exchange service prices necessarily would have been borne by the exchange service customers. In Authorized User II, 90 FCC 2d 1394, 1435 (1982), the FCC authorized Comsat to provide retail satellite exchange service through a separate subsidiary. Clearly, the availability of retail satellite exchange service could minimize any adverse effects which may result from an increase in the IRCs' cable exchange service rates. Therefore, the question whether exchange service customers will be forced to pay higher exchange service prices as a consequence of the FCC's Authorized User II policy, depends upon the IRCs' willingness to offer satellite exchange services or upon Comsat's successful entrance into the retail exchange service market.
47
If the FCC's Authorized User II policy results in an increase in cable exchange service rates, the IRCs will have no incentive to offer satellite exchange services. Carriers are only entitled to earn a rate of return on capital invested reasonably.45 The cable network represents the IRCs' primary capital investment; thus, the IRCs have a clear incentive to prefer cable over satellite transmission. Absent FCC intervention, we doubt that the IRCs would sacrifice profits by offering satellite exchange services as an alternative to their higher cable exchange service rates. Thus, the availability of retail satellite exchange service under the FCC's Authorized User II policy depends primarily on Comsat's successful entrance into the retail exchange service market.
48
Throughout these proceedings, Comsat has maintained steadfastly that it has no intention of establishing a subsidiary to compete for exchange service business.46 If Comsat does not enter the retail exchange service market, exchange service customers must depend necessarily on the IRCs for exchange service. Further, even if Comsat does enter the exchange service market, there are no guarantees that it will be able to compete effectively with the carriers for exchange service business. Unlike the leased-channel market, competitors in the exchange service market must be efficient in arranging foreign communication links; thus, competition is based on service as well as price. Over the years, the IRCs have established working relationships with a number of foreign communications companies. These relationships give the IRCs a distinct advantage over new entrants in the market. See ITT World Communications, Inc. v. FCC, 595 F.2d 897 (2d Cir.1979). Although we do not question Comsat's ability, the end-to-end market presents more obstacles to new entrants than the leased-channel market. In summary, Comsat has indicated its clear intent not to enter the retail exchange service market. Moreover, the retail exchange service market is more difficult to enter than the leased-channel market. In light of these factors, the prospect of Comsat successfully entering the retail exchange service market in the near future is highly unlikely.
49
In conclusion, we believe that the FCC's Authorized User II policy is likely to result in an increase in cable exchange service rates. Whether the increase in cable exchange service rates will affect adversely the public interest depends upon either the IRCs' willingness to offer satellite exchange services or upon Comsat's successful entrance in the exchange service market. The IRCs have a monetary incentive to prefer cable over satellite and Comsat has maintained steadfastly that it has no intention of entering the exchange service market. Accordingly, we believe that any increase in cable exchange service rates will be borne by the many exchange service customers and, thus, that the FCC's Authorized User II policy will have some adverse effects on the public interest.
50
The fact that the FCC's Authorized User II policy may have some adverse effects on the public interest does not mean that the FCC's new policy of heightening intermodal competition by deregulating the industry is necessarily inconsistent with the overall public interest. In making public interest determinations which will affect an entire industry, the FCC is responsible for weighing the potential benefits against the detriments of a proposed policy. In this instance, the FCC has enumerated a number of potential benefits which may result from its change in policy. Authorized User II, 90 FCC 2d 1394, 1419-1422 (1982). Further, the FCC has considered the likelihood that its new policy will have some adverse effects on the public interest. Although we disagree with the FCC's assessment of the potential detrimental effects which may result as a consequence of the FCC's Authorized User II policy, we do not believe that the FCC's failure to afford sufficient weight to the likely detrimental effects of its new policy is, in itself, a sufficient basis from which this Court can conclude the FCC's Authorized User II policy is necessarily inconsistent with the public interest. In this case, however, the petitioners not only claim that the FCC failed to consider adequately the detrimental effects of its change in policy, but also, that the FCC failed to consider issues which may exacerbate or minimize these expected adverse effects. Specifically, petitioners argue that the FCC has abused its discretion by failing to consider the direct access and independent earth station ownership issues prior to issuing its Authorized User II decision.
51
B. Direct Access and Independent Earth Station Ownership. The FCC has determined that no direct connection exists between its policy decision to foster intermodal competition in the leased-channel and exchange markets and the direct access and independent earth station ownership issues. Consequently, the FCC announced its change in authorized user policy and initiated separate proceedings to consider the direct access and independent earth station ownership issues.47 The petitioners argue, however, that the direct access and independent earth station ownership issues are germane to the FCC's Authorized User II policy and, thus, that the FCC abused its discretion by failing to consider these relevant factors. In our view, direct access and independent earth station ownership by the IRCs would affect directly the FCC's policy of promoting intermodal competition. Because of the potential impact that these issues could have on the FCC's policy of promoting intermodal competition, we believe the FCC abused its discretion by restructuring the entire telecommunications industry prior to considering the merits of direct access and independent earth station ownership.48
52
All of the parties agree that direct access and independent earth station ownership by the IRCs will increase the likelihood of intramodal competition for leased-channel business. Presumably, if the IRCs are permitted direct access, they will be able to lease space segment capacity from Intelsat at a rate less than Comsat's present tariff. Clearly, a decrease in the IRCs' cost for the space segment would enhance the IRCs' leased-channel market position and, thus, would increase the potential for intramodal competition for leased-channel business between Comsat and the IRCs. Further, if the IRCs are permitted to independently own and operate earth stations, a new basis for competition will exist: Comsat and the IRCs would compete on their respective abilities to provide efficient earth station service. Thus, the expected consequence of permitting the IRCs direct access and independent ownership and operation of earth stations is an increase in intramodal competition between Comsat and the IRCs for leased-channel business.
53
An increase in intramodal competition in the leased-channel market may be consistent in some respects, and inconsistent in other respects, with the FCC's primary policy of encouraging intermodal competition in both markets. Theoretically, maximum intermodal competition in both the exchange service and the leased-channel markets could be furthered by restricting the IRCs' future capital investments to cable and the development of fiber optics. A decision to deny the IRCs direct access and independent earth station ownership would have such an effect: more of the IRCs' investment capital would be available to promote the cable medium if the IRCs were foreclosed from investing in satellites. In contrast, if the FCC decides to permit the IRCs to invest in the satellite system either by allowing them direct access or independent earth station ownership, the IRCs would have an incentive to earn a rate of return on their investments by channeling some of their business via satellite; the IRCs willingness to offer satellite exchange services may minimize the adverse consequences of an increase in cable exchange service rates. Clearly, the direct access and independent earth station ownership issues affect directly the IRCs' investment decisions and, thus, their ability to promote either cable or both cable and satellite.
54
The FCC's decision concerning direct access and independent earth station ownership is also likely to affect Comsat's decision whether to enter the retail exchange service market. The FCC has promised that it will continue to monitor traffic to assure that both the satellite and cable systems are used reasonably. Authorized User II, 90 FCC 2d 1394, 1426 (1982). Presumably, the FCC plans to limit any substantial diversions from one mode to another by using its prescribed use formula. Such an assurance is inconsistent with the FCC's policy of encouraging intermodal competition because it discourages Comsat from entering the retail exchange service market49 and because it forces the IRCs to buy from their proposed competitor. If the IRCs, however, are permitted direct access and independent earth station ownership, the IRCs would not be forced to buy from their competitor and Comsat may find it necessary to enter the exchange service market if it hopes to get any exchange service business.
55
Finally, independent earth station ownership may also affect the cost of satellite services. If the IRCs are permitted independent earth station ownership and operation and if competition results in the more efficient operation of earth stations, presumably the price for earth station access will decrease. The FCC has identified the potential decrease in consumer cost that may result from an increase in competition for the provision of earth station service as a justification for reviewing its present joint ownership policy. Notice of Inquiry, Modification of Policy on Ownership and Operation of U.S. Earth Stations that Operate with the Intelsat Global Communications Satellite System, 90 FCC 2d 1452 (1982). A dramatic decrease in price would certainly affect the feasibility of intermodal competition for leased-channel business and, to a lesser extent, exchange service business. Conversely, if increased competition leads to a short term increase in the cost of earth station operations and, thus, an increase in the price of satellite services, intermodal competition may be more feasible.50 0] In any event, independent earth station ownership may affect indirectly the likelihood of intermodal competition in both markets.
56
We have enumerated a few of the potential effects that direct access and independent earth station ownership may have on the FCC's policy decision to promote intermodal competition in both markets. The FCC itself has recognized that the resolution of these issues will have a widespread effect on the structure of the industry.51 In the past, we have permitted the FCC to resolve some issues and to defer the resolution of other issues when the issues decided were not inextricably related to the issues deferred. See Western Union Int., Inc. v. FCC, 673 F.2d 539, 543-44 (D.C.Cir.1982). In this case, however, the FCC has attempted to restructure the entire industry on a piecemeal basis. It has firmly established a policy of promoting intermodal competition without considering issues which concern directly the likelihood of intermodal competition. Moreover, the FCC has chosen to promote intermodal competition without considering whether intramodal competition is consistent with its new policy.
57
In our view, an agency does not act rationally when it chooses and implements one policy and decides to consider the merits of a potentially inconsistent policy in the very near future. Of course, the FCC is the agency with the necessary expertise to analyze fully and determine the extent to which direct access and independent earth station ownership will affect intermodal competition in both markets. Perhaps intermodal competition in both markets is consistent with direct access and independent earth station ownership. Perhaps Comsat will change its mind and enter the retail exchange service market without further incentive. On the other hand, intermodal competition may be frustrated if the IRCs are permitted to invest a substantial amount of capital in direct access from Intelsat or in the construction and operation of earth stations. Clearly, the FCC is in a better position than this Court to resolve these important questions. See, e.g., Springfield Television of Utah, Inc. v. FCC, 710 F.2d 620, 626 (10th Cir.1983); Stone v. FCC, 466 F.2d 316, 322 (D.C.Cir.1972). Until the FCC has considered and determined the widespread effects that the direct access and independent earth station ownership issues will have on the industry structure, however, neither the FCC nor this court can determine rationally which policy will best serve the public interest.52 Consequently, we hold that the FCC has abused its discretion by implementing its Authorized User II policy prior to considering the direct access and independent earth station ownership issues.
V. REMEDY
58
Petitioners contend that the FCC has violated its duty to decide issues presented within a reasonable time, 5 U.S.C. Sec. 555(B) (1970), by unduly delaying the resolution of the direct access and independent earth station ownership issues.53 Consequently, petitioners have requested this court to compel the FCC to initiate rulemaking proceedings for the purpose of resolving these issues. The FCC argues that the direct access and independent earth station ownership issues are serious and complicated and that it has only recently collected information necessary to resolve these issues. In light of the FCC's broad discretion to manage its docket and, thus, establish its priorities, see, e.g., Nader v. FCC, 520 F.2d 182, 195-97 (D.C.Cir.1975), it urges this court to decline petitioners' invitation to interfere with the FCC's docket.
59
Although this court has indicated "that nine years should be enough time for an agency to decide almost any issue," id. at 206, we believe that we may not properly establish and enforce a strict timetable for the FCC in this instance. Because of the extremely complicated nature of the direct access and earth station ownership issues, we believe that any prediction concerning the length of time necessary to resolve these issues would be speculative. Moreover, the FCC has indicated that it requires further information from petitioners and others before it can decide the merits of these issues. Thus, the FCC's ability to resolve these issues depends, in part, on the petitioners' prompt action. Finally, we have every reason to believe that the FCC will not unduly delay its decisions. Indeed, the FCC's change in policy manifests its desire to promote the public interest by deregulating the international telecommunications industry. We believe that our decision requiring the FCC to address the direct access and earth station ownership issues prior to implementing a change in its Authorized User I policy is sufficient to insure that the FCC will act expeditiously.
60
We have considered all of the arguments presented by the various parties.54 We hold that the Satellite Act of 1962, 47 U.S.C. Sec. 701 et seq., gives the FCC broad discretion to designate non-carriers as authorized users. In this instance, however, the FCC has abused its discretion by failing to consider adequately a number of relevant factors prior to implementing its Authorized User II policy. Accordingly, the FCC's Authorized User II decision is vacated and remanded to the FCC for proceedings not inconsistent with this opinion.
*
The Honorable Anthony J. Celebrezze, Senior Circuit Judge, United States Court of Appeals for the Sixth Circuit, sitting by designation
1
The petitioners are ITT World Communications, Inc. (ITT), RCA Global Communications, Inc. (RCA), Western Union International, Inc. (WUI) and TRT Telecommunications Corporation (TRT). A number of parties have intervened in this case including: Aeronautical Radio, Inc.; Air Transport Association; American Broadcasting Companies, Inc.; American Telephone and Telegraph Company; CBS, Inc.; Communications Satellite Corporation; European Broadcasting Union; Hawaiian Telephone Company; National Broadcasting Company, Inc.; Public Broadcasting Service; Southern Pacific Communications Corporation; and Spanish International Network, Inc
2
Each of these decisions concerns the question whether the Satellite Act of 1962, 47 U.S.C. 701 et seq., allows the FCC to designate non-carriers as "authorized users". This question was first addressed by the FCC in Authorized Entities and Users, 4 FCC 2d 421 (1966) (Authorized User I ). In Authorized User I the FCC interpreted the Act as conferring upon it the power to designate non-carriers as authorized users, but established a policy of limiting the class of authorized users to carriers absent "unique and exceptional circumstances." Id. at 431. In 1978, Spanish International Network (SIN) petitioned the FCC for authorized user status. Spanish International Network, 68 FCC 1260 (1978). The FCC waived its Authorized User I policy and designated SIN and other television networks as authorized users. Spanish International Network, 70 FCC 2d 2127 (1978) (SIN I ). Pursuant to its decision in SIN I, the FCC granted Comsat's request to provide service at U.S. earth stations directly to the networks and to international television carriers, Communications Satellite Corporation, 76 FCC 2d 5 (1980) (SIN II ), and allowed Comsat to revise its tariff for this new service. Communications Satellite Corporation, 79 FCC 2d 562 (1980) (SIN III ). Petitioners ITT and WUI seek review of the three SIN decisions. The fourth decision before this court is Modification of Authorized User Policy, 90 FCC 2d 1394 (1982) (Authorized User II ). In Authorized User II, the FCC abandoned its Authorized User I policy of permitting only carriers to obtain authorized user status and, thus, permitted Comsat to enter the international telecommunications retail leased-channel market. The FCC also ruled that Comsat could establish a separate subsidiary which would compete with other carriers in the end-to-end retail market. All petitioners request this court to review the FCC's decision in Authorized User II
3
In this opinion, "common carriers" or "carriers" refers to AT & T and a group of entities commonly referred to as international record carriers (IRCs). AT & T and the IRCs provide international message services
4
Comsat, a private corporation, was created by the Satellite Act of 1962, 47 U.S.C. Sec. 731, for the express purpose of planning and constructing the communications satellite system. Although Congress gave Comsat the initial responsibility of establishing the system, it intended that a number of nations would operate the system on a cooperative basis once the system was established. On August 20, 1964, an Executive Agreement was signed by the United States and ten other nations. Agreement Establishing Interim Arrangements for a Global Communications Satellite System, 15 U.S.T. 1705, T.I.A.S. No. 5646, 544 U.N.T. 26, effective August 20, 1964; it established the International Telecommunications Satellite Consortium (Intelsat) which assumed the ownership of the system from Comsat. Comsat became the U.S. representative to Intelsat and the manager of the system
5
Intelsat provides access to its satellite by leasing circuit "units of utilization." Comsat Study, 77 FCC 2d 564, 590, 789, 793-94 (1980). Comsat is presently the only entity permitted to rent these units from Intelsat; common carriers must lease space segment capacity from Comsat
6
In 1966, Petitioners ITT, RCA, and WUI accounted for 96 percent of the record service industry's total revenues. Authorized User II, 90 FCC 2d 1394, 1397 (1982)
7
Telegraph is a method of transmitting a one-way message from point to point. The use of the telegraph has declined markedly because of innovations such as telex, TWX, and other new exchange services. See W.U. Tel. Co. v. FCC, 665 F.2d 1126, 1132 (D.C.Cir.1981)
8
Telex, also referred to as teletype-exchange service, is a two-way form of communication between teletypewriters. Authorized User II, 90 FCC 2d 1394, 1397 n. 4 (1982). TWX is a special type of telex message also characterized by its two-way capabilities
9
In 1966, the United States government accounted for approximately 70 percent of the IRC's total leased-channel revenues. Authorized User II, 90 FCC 2d 1394, 1413-14 (1982). Although the government only accounted for approximately 33 percent of the IRC's leased-channel revenues in 1978, id., the petitioners have established that the vast majority of leased-channel revenue is still generated by a few large users. For example, WUI has indicated that five customers account for 43 percent of its total leased-channel revenues and that twenty-nine customers account for 67 percent of its total leased-channel revenues
10
"A half circuit is a two-way communications link between an earth station and an Intelsat satellite. To obtain a full circuit, one combines a half circuit from one earth station with a half circuit from any other earth station operating with the same satellite." Authorized User II, 90 FCC 2d 1394, 1402 n. 9 (1982)
11
Prior to the FCC's decision in International Record Carriers' Scope of Operations in the Continental United States, 76 FCC 1115 (1980) (Gateways ), aff'd sub nom. W.U. Tel. Co. v. FCC, 665 F.2d 1126 (D.C.Cir.1981), international record carriers operated only in designated "gateway" cities. "Gateway" refers to cities from which messages are sent directly to foreign points. A customer in the hinterland who desired to send an international record message had two choices: either contact an IRC in a gateway city directly or use Western Union Telegraph Company (WUTC) as an intermediary. In Gateways, the FCC authorized the IRCs to pick-up and deliver international messages in twenty-one additional "domestic points of operation", but did not designate these new points of operation as "gateway" cities. Id. at 146-48. Consequently, the IRCs' operations are no longer confined to gateway cities
12
Upon reconsideration of its Authorized User I policy, the FCC indicated that the United States is entitled to deal directly with Comsat "whenever such direct service is in the national interest." Authorized User Reconsideration, 6 FCC 2d 593, 594-95 (1967). None of the parties seriously contest the special status given by the FCC to the United States in matters concerning the national interest
13
Pursuant to traditional ratemaking policy, a carrier is only entitled to earn a rate of return on capital reasonably invested; carriers are not entitled to earn a rate of return on expenses. See, e.g., Communications Satellite Corp. v. FCC, 611 F.2d 883, 897 (D.C.Cir.1977). The common carriers' primary investments are in the cable system. In contrast, the carriers have been precluded from investing in direct access from Intelsat and they have been limited in their ability to invest in earth stations. Consequently, if given the option of sending messages by cable or satellite, the IRCs generally prefer to use the cable system
14
The FCC's initial order required the carriers to review all of their tariffs to reflect any cost savings which would result from the use of the satellite system. Authorized User I, 4 FCC 421, 434 (1966). Apparently, the carriers interpreted the FCC's decision as requiring them to average the cost of cable and satellite circuits for each route; thus, the carriers offered "composite rates". In ITT World Communications, Inc., 6 FCC 2d 514 (1967), the FCC adopted "composite rate" formulas as an appropriate means of assuring that many users could enjoy the cost benefits of satellite technology
15
The FCC's primary purpose for revising its earth station ownership policy was to afford carriers an opportunity to gain experience in satellite communications and to promote contributions by the carriers in the development of satellite communications. Ownership and Operation of Earth Stations, 5 FCC 812 (1966)
16
Pursuant to ESOC procedures, the vast majority of proposals require at least a majority for passage. U.S. Earth Stations, 90 FCC 2d 1458, 1463-64 n. 10 (1982). On the Committee, voting strength is weighted in accordance with earth station ownership interest. Comsat owns fifty percent of each U.S. earth station; consequently, it has the ability to veto any of the carriers' proposals
17
Pursuant to the "carrier of the week" policy, television transmission service was offered under a joint tariff by all participating carriers. The carriers have never competed for television service customers
18
SIN has asserted that the carriers add nothing to the television transmission service offered by Comsat. The FCC, however, has indicated that the carriers have provided television service to SIN on an end-to-end basis. Consequently, the television service offered by the carriers is more than Comsat's basic transmission service
19
The direct access issue concerns which entities are entitled to lease space segment capacity directly from Intelsat. Presently, Comsat is the only entity permitted "direct access". Although the FCC has indicated that the Act prohibits the carriers from purchasing the satellite system, it believes that the Act permits the carriers to invest capital "in the nature of indefeasible right of user." SIN I, 70 F.C.C.2d 2127, 2146 (1978). Presumably, if the FCC would permit the carriers to invest in direct access, the carriers would be entitled to earn a rate of return on their investment. See note 13, supra
The independent earth station ownership issue concerns which entities should, as a matter of policy, be permitted to independently own and operate earth stations. The Act clearly permits the carriers and Comsat to independently own and operate earth stations. 47 U.S.C. Sec. 721(c)(7). The FCC's present policy requires joint ownership between Comsat and the carriers of all earth stations. Petitioners have asked the FCC to change its present joint ownership policy; petitioners desire the ability to independently own and operate earth stations.
20
See text accompanying note 53, supra
21
Notice of Inquiry, Regulatory Policies Concerning Direct Access to Intelsat Space Segment for the U.S. International Service Carriers, 90 FCC 2d 1446 (1982); Notice of Inquiry, Modification of Policy on Ownership and Operation of U.S. Earth Stations that Operate with the Intelsat Global Communications Satellite System, 90 FCC 2d 1452 (1982)
22
If we were to limit the permissible class of authorized entities to carriers and the U.S. government we would, in effect, require the FCC to promote a two-tiered structure in the industry: Comsat would function primarily as a wholesaler of satellite services and the common carriers would act primarily as retailers of satellite services
23
The petitioners also argue that the phrase "other authorized entities, foreign and domestic" was intended to mean "carrier-like" entities including: foreign communications entities doing business abroad, foreign communications entities doing business in the United States and domestic communications entities doing business abroad. Neither the Act nor its legislative history support petitioners' very narrow definition
24
The legislative history of the Act reveals several predictions concerning Comsat's role in the industry as "primarily a carriers' carrier". For example, Senator John O. Pastore, the floor manager of the bill and a chairman of one of the subcommittees stated:
The satellite corporation and the carriers will not be competing in the same market .... The market to be served by the corporation consists of the carriers who will use its facilities. The market to be served by the carriers will be the senders and recipients of communications traffic.
108
Cong.Rec., Sec. 16920 (daily ed. August 17, 1962) (statement of Sen. Pastore)
Senator McGee, a member of the House Commerce Committee, characterized Comsat's role in the industry as follows:
We say sometimes, he is a coach's coach, or a football player's football player; this is a carrier's carrier.
108
Cong.Rec. H.7704 (daily ed. May 3, 1962) (statement of Sen. McGee). Petitioners rely on these statements as evidence that Congress intended to restrict forever Comsat from competing for retail business. Although legislative history often clarifies Congressional intent, we do not believe that the predictions concerning Comsat's role in the industry support petitioners' assertion that Congress intended to restrict forever Comsat from serving the general public. During the many debates which preceded the Satellite Act, many legislators expressed a concern that competition between Comsat and the carriers, especially during the developmental years of the satellite system, would not facilitate the Act's primary purpose: "to establish ... as expeditiously as practicable a commercial communications satellite system." 47 U.S.C. Sec. 701(a) (emphasis added). In our view, the predictions concerning the unlikelihood that such competition would occur during the developmental years were intended simply to convince legislators that the carriers would not interfere with the swift development of the new satellite system
25
By defining the class of authorized users as including "common carriers" and "other authorized entities", Congress must have intended "other authorized entities" to mean something other than common carriers. E.g., Reiter v. Sonotone Corp., 442 U.S. 330, 339, 99 S.Ct. 2326, 2331, 60 L.Ed.2d 931 (1979) ("In construing a statute courts are obliged to give effect, if possible, to every word Congress used."). Moreover, Congress must have intended the class of "other authorized entities" to include at least one entity other than the United States government
26
Congress' ability to limit expressly the class of authorized users is apparent. In 47 U.S.C. Sec. 734(b)(1), Congress restricted expressly the class of common carriers able to purchase and own voting stock in Comsat; only common carriers specifically authorized by the FCC to own shares of voting stock are considered "authorized carriers" for the purposes of Sec. 734(b)(2). Congress recognized the need to limit specifically the language "authorized carriers" for the purposes of this section of the Act. Absent such a limitation, any carrier authorized by the FCC to provide services by means of communication satellites would have been able to purchase voting stock in Comsat. See 47 U.S.C. Sec. 702(7). Clearly, Congress did not perceive a similar need to limit the class of authorized users to "authorized carriers" and the United States government in the very next section of the Act. 47 U.S.C. Sec. 735(a)(2). Instead, Congress described the class of authorized users as including both "carriers" and "other authorized entities."
27
Two alternative bills preceded the enactment of the Satellite Act of 1962: S.2814 and S.2650. See Proposed Communications Satellite Legislation: Hearings on S.2650 and S.2814 Before the Senate Committee on Aeronautical and Space Sciences, 87th Cong., 2d Sess. 2-10 (1962). S.2814 provided for joint ownership of Comsat by the carriers and the general public. The proponents of S.2814 believed that joint ownership of Comsat was necessary to assure that the carriers would not purposely stifle the development of the satellite communications system to protect the carriers' investment in the cable system. Consequently, S.2814 required Comsat to issue two classes of stock: voting and nonvoting. Although the carriers were the only entities permitted to invest in nonvoting stock, both the carriers and the general public were permitted to invest in voting stock. An entities' investment in voting stock, however, could not exceed fifteen percent of the authorized amount of voting stock or twenty-five percent of the outstanding shares of voting stock. Id. at 8-9. In contrast, S.2650, the alternative bill sponsored by Senator Kerr, Chairman of the Senate Committee on Aeronautical and Space Sciences, would have restricted the class of investors in Comsat to the carriers. Id. at 3. The primary reason for limiting the class of permissible investors in Comsat to carriers was to encourage the carriers to promote the development of the satellite communications system
The legislature decided to adopt S.2814 with some revisions. Pursuant to 47 U.S.C. Sec. 734(a), (c), Comsat is authorized to issue two classes of stock: voting and nonvoting. Both authorized carriers and the general public are entitled to purchase either voting or nonvoting stock. Both authorized carriers and other investors, however, are limited in the amount of voting stock they can obtain lawfully. 47 U.S.C. Sec. 734(b)(2), (3). Further, the Act precludes authorized carriers from earning a rate of return on capital invested in voting stock; authorized carriers are permitted to earn a rate of return on the purchase of "nonvoting securities, bonds, debentures, or other certificates ... to the extent allowed by the FCC". 47 U.S.C. Sec. 734(c). Petitioner WUI has indicated that the carriers' present investment in Comsat is not substantial.
28
Chairman Minow expressed the FCC's concern that S.2814, which included the language "authorized users", would be construed as permitting Comsat to compete with the carriers for retail business. Because the FCC opposed such an interpretation, it suggested that S.2814 be rephrased as follows:
[Comsat is authorized to:]
(2) furnish, for hire, channels of communications to United States communications common carriers, as authorized by the Federal Communications Commission, and to foreign governments, foreign communications administrations and foreign recognized private operating agencies, engaged in providing public communications services.
(b) * * *
(4) contract with the entities referred to in subsection (a)(2) of this section for the services of the communications satellite system.
Communications Satellite Legislation: Hearings on S.2650 and S.2814 Before the Senate Comm. on Aeronautical and Space Sciences, 87th Cong., 2d Sess. 2-10, 210, 470-71 (1962). See 47 U.S.C. Sec. 735(a)(2).
29
H.R. 10115, The House version of S.2814, also provided that Comsat could offer satellite services to "other authorized entities". Communications Satellites: Hearings on H.R. 10115 and 10138 Before The House Comm. on Interstate and Foreign Commerce, 87th Cong., 2d Sess. 408, 416-17 (1962)
30
See Communications Satellite Legislation: Hearing on S.2814 and S.2814, Amendment, Before the Senate Comm. on Commerce, 87th Cong., 2d Sess. 65, 67-68 (1962)
31
Basic transmission is a retail service that includes transmission between U.S. earth stations and Intelsat satellites. Carriers who are permitted to independently own and operate U.S. earth stations must be given "nondiscriminatory use of, and equitable access to, the communications satellite system." 47 U.S.C. Sec. 721(c)(2). Thus, carriers who own and operate U.S. earth stations must be permitted access to Intelsat's satellites. Because carriers can provide earth station service and because carriers can obtain access to Intelsat's satellites, the carriers have the ability to offer basic transmission service
32
In 1978, the Department of Defense (DOD) solicited bids for a special type of circuit between earth stations in Hawaii and Guam. In determining their bids, the IRCs obtained quotations from Comsat for the necessary space segment of $183,200 per circuit per month. Despite the FCC's Authorized User I policy, Comsat also entered a bid to provide service for DOD. Comsat's bid was $90,900 per circuit per month. On November 16, 1979, Comsat filed applications with the FCC to construct the Hawaii and Guam earth stations and to provide basic transmission service to the DOD. Thereafter, the DOD filed a pleading in support and a number of carriers filed petitions against Comsat's application. In the carriers' petitions, they asserted, among other things, that Comsat violated the Federal antitrust laws by engaging in predatory pricing. Further, the carriers argued that permitting Comsat to offer basic transmission service to the general public would have certain anticompetitive effects
Initially, the FCC denied Comsat's Hawaii/Guam applications because Comsat's rate did not cover the full cost of the proposed service. Communications Satellite Corporation, 80 FCC 2d 170 (1980). On May 29, 1981, however, the FCC vacated its denial of Comsat's Hawaii/Guam applications and designated the applications for an expedited hearing before an administrative law judge. Communications Satellite Corporation, 86 FCC 712, 713 (1981). After an evidentiary hearing, the administrative law judge found that Comsat's bidding practice was both illegal and anticompetitive. A number of parties filed exceptions to the administrative law judge's initial decision. Because of a potential settlement, the FCC postponed oral arguments indefinitely. On June 8, 1982, ITT filed a motion with the FCC requesting the FCC to incorporate the record of the Hawaii/Guam proceedings into the Authorized User II docket. Although the FCC denied ITT's motion to incorporate, it did consider the proceedings prior to issuing its Authorized User II decision. See Authorized User II, 90 FCC 2d 1394, 1429 (1982).
Petitioners advance two arguments which concern the Hawaii/Guam proceedings. First, petitioners assert that the Hawaii/Guam proceedings illustrate the danger that Comsat will engage in predatory pricing and that Comsat will cross-subsidize its subsidiary if the FCC permits Comsat to enter the retail markets. In our view, Petitioners' concerns are premature. Surely, the FCC can take remedial action if Comsat engages in illegal activity. See United States v. FCC, 652 F.2d 72, 106 (D.C.Cir.1980).
Petitioners' second argument concerns the likelihood that the FCC's Authorized User II policy will have certain anticompetitive effects. Specifically, petitioners assert that the Hawaii/Guam case demonstrates their inability to compete with Comsat for leased-channel business under the FCC's Authorized User II policy. In response, the FCC believes that its requirement that Comsat establish a separate subsidiary prior to competing with the IRCs for exchange service business will prevent any "price squeeze because Comsat's subsidiary and the IRCs will receive space segment capacity from Comsat on equal terms." Authorized User II, 90 FCC 2d 1394, 1429 (1982). The FCC's requirement that Comsat establish a separate subsidiary, however, concerns only the exchange service market. Pursuant to the FCC's Authorized User II policy, Comsat may provide leased-channel service directly to consumers. In the Hawaii/Guam proceedings, DOD requested bids for leased-channel service beginning at a U.S. earth station. Thus, the FCC's requirement that Comsat establish a separate subsidiary prior to entering the retail exchange service market is irrelevant to the question whether the IRCs will be able to compete with Comsat for leased-channel business under the FCC's Authorized User II policy. Indeed, the Hawaii/Guam proceedings confirm this court's conclusion that intramodal competition between the IRCs and Comsat for leased-channel business is unlikely under the FCC's Authorized User II policy. See text accompanying note 40, infra.
33
The petitioners also assert that the FCC, by permitting Comsat to engage in illegal tying arrangements, has violated its duty to assure that Comsat's activities are "consistent with Federal antitrust laws", 47 U.S.C. Sec. 701(c). We disagree. The primary purpose of the Satellite Act is not to maintain and strengthen competition; rather, the Act was intended to establish and operate an efficient global communications system for the benefit of the general public. 47 U.S.C. Sec. 701(a). Although one of the policies of the Act is to "maintain and strengthen competition in the provision of communications services to the public," competition is not an end in itself. United States v. FCC, 652 F.2d 72, 82 (D.C.Cir.1980) ("Competition is but one element of a determination of the public interest."). Competition is important only as a means of furthering the public interest. Indeed, Congress by giving the FCC the power to grant Comsat the sole right to own and operate earth stations, indicated that it was aware that vigorous competition between all carriers within the satellite system might, in some circumstances, hinder the establishment and operation of the global communications satellite system. Thus, although the FCC must consider whether competition is hindered, and whether the risk of reduced competition affects the public interest, we believe that the primary limitation on the FCC's discretion is that it act to promote the public interest. See 47 U.S.C. Sec. 721(c)(7), (8), (9), (10)
34
See note 19, supra
35
If Comsat is permitted to compete with the IRCs at the retail level, Petitioner ITT predicts a diversion of 65 to 70 percent of its total leased-channel business or approximately 20 million dollars of revenue each year to Comsat. With regard to the industry as a whole, ITT predicts that Comsat's entry into the retail markets will result in a total revenue diversion from the IRCs to Comsat of 24 to 27 percent or approximately 120-125 million dollars each year
36
See note 9, supra. See also Authorized User II, 90 FCC 2d 1394, 1416 (1982)
37
Petitioner ITT has indicated that some of its customers still prefer cable to satellite because satellite transmission is more subject to delay. ITT has also informed this court, however, that a recent development in satellite technology has eliminated the risk of delay which accompanies satellite transmission. ITT predicts that the implementation of this new technology will make cable and satellite service even more interchangeable than in the past
38
When the satellite leased-channel service either begins or ends at a U.S. earth station, no important distinction can be made between the leased-channel services offered by Comsat and the IRCs. We recognize that the IRCs also make end-link arrangements for leased-channel customers. One of the primary characteristics of the leased-channel market, however, is that leased-channel customers are capable of making their own arrangement for end-links
39
Comsat's bundled rate for transmission between a U.S. earth station and Intelsat satellite is approximately $1125 per month. Two-thirds of Comsat's bundled rate is considered payment for space segment service; thus, an authorized user's cost for space segment capacity is approximately $750.00 per month. In contrast, Comsat leases space segment capacity from Intelsat at a rate known as the Intelsat utilization charge (IUC); Comsat's present cost for space segment capacity is approximately $390.00 per month
40
Although the IRCs do not simply "resell" basic service to leased-channel consumers, the additional leased-channel services provided by the IRCs are quality control and end-links. Clearly, the IRCs will be unable to compete with Comsat solely on their ability to provide efficient quality control. Presumably, Comsat, the entity with the most experience in satellite communications, is capable of providing an equally efficient quality control system
41
The $46,000 figure used by the FCC as an example of advances in cable technology was the expected capital investment by AT & T for a transatlantic telephone cable with a capacity of 4200 voice-grade circuits. Authorized User II, 90 FCC 2d 1394, 1414 (1982). See American Telephone and Telegraph Co., 73 FCC 2d 248, 257 (1979)
42
Fiber optics is a recent development in cable technology; information can be sent by means of light through a cable which contains very thin glass or plastic fibers. Curves in a fiber optic cable do not affect the transmission of messages
43
See note 35, supra
44
The FCC has indicated that a loss of leased-channel business by the IRCs would result in idle cable facilities. Authorized User II, 90 FCC 2d 1394, 1416 (1982). Because the IRCs' telex business has been experiencing rapid growth, the FCC believes that "IRC facilities idled by any loss of leased-channel service can, at least in part, be transferred to the provision of the growing telex service." Id. (emphasis added). The FCC's conclusion, however, is based on its assumption that Authorized User II is unlikely to result in a substantial diversion of leased-channel business from the IRCs to Comsat
45
See note 13, supra
46
Comsat would have to expend a great deal of time and money to establish a subsidiary which could compete with the IRCs for exchange service business. Comsat's primary incentive for establishing a subsidiary would be to increase its customer base; presumably, Comsat's subsidiary would favor Comsat's satellite service over the common carriers' cable service. The FCC, however, has promised Comsat that it will continue to regulate the industry to assure that both the cable and the satellite systems are "reasonably used". Authorized User II, 90 FCC 2d 1394, 1426 (1982). In light of the great expense involved in establishing a subsidiary and the FCC's decision to guarantee Comsat a number of customers, Comsat's refusal to enter the exchange service market at this time is understandable
47
See note 21, supra
48
We affirm the FCC's decisions in Spanish International Network, 70 FCC 2d 2127 (1978) (SIN I ), Communications Satellite Corporation, 76 FCC 2d 5 (1980) (SIN II ), and Communications Satellite Corporation, 79 FCC 2d 562 (1980) (SIN II ). The only issue presented by these cases is whether the FCC has abused its discretion by granting television networks and other television service consumers authorized user status
The Satellite Act of 1962 grants the FCC broad discretion to designate non-carriers as authorized users upon a proper finding that such status furthers the public interest. In SIN I, 70 FCC 2d 2127, 2141 (1978), the FCC found specifically that permitting television service customers to deal directly with Comsat would further the public interest. To support its public interest determination, the FCC reasoned that direct service from Comsat to television service customers would lessen the risk of "service mix-ups and delays." Id. at 2140. Further, the FCC indicated that its decision, which permits television service customers to make their own arrangements for end-links, would assure that the carriers' price for end-to-end television transmission service reflects the carriers' true costs. The expected public benefits which may result from the FCC's decision granting television service customers the ability to lease basic transmission service directly from Comsat support fully the FCC's public interest determination. Thus, we hold that the FCC has not abused its discretion by designating networks and other television service customers as authorized users.
Our decision to affirm the "SIN" cases is not inconsistent with our conclusion that the FCC has abused its discretion by firmly establishing a policy of promoting intermodal competition prior to considering the direct access and independent earth station ownership issues. International television transmission can only be sent by satellite. SIN I, 70 FCC 2127, 2129 (1978). Consequently, the FCC's decision to grant networks and other television service customers authorized user status does not concern the FCC's new policy of heightening intermodal competition in both the leased-channel and exchange service markets. Moreover, television transmission service accounts for less than one percent of the carriers' total revenues. Consequently, there is no basis for concluding that a loss by the carriers of television service business will affect adversely either the carriers' ability to provide other services or their price for other services. In short, the FCC's SIN decisions do not represent an attempt by the FCC to restructure the entire telecommunications industry.
49
See note 46, supra
50
Independent earth station ownership could result in a short term increase in the cost of earth station services. Presumably, the industry's earth station capacity will increase if the IRCs are permitted to independently construct, own and operate earth stations. If the demand for earth station service either remains constant or fails to keep pace with the industry's increase in earth station capacity, the general cost of operating earth stations will increase. An increase in the cost of earth station operations would increase the potential for intermodal competition; the higher price for satellite services would diminish price difference between cable and satellite services. Of course, the FCC must consider whether a short term increase in the price of the earth station services is likely and whether a short term increase is consistent with the public interest
51
In Aeronautical Radio, Inc., 77 F.C.C.2d 535, 536 (1980), the notice of proposed rulemaking to review the FCC's Authorized User I policy, the FCC indicates that:
The question of Comsat's authority to deal directly with certain authorized users, along with the possibility of allowing the United States International Service Carriers (USISC) access to the international satellite space segment provided by INTELSAT, underlies several matters before us. In view of its far reaching implications, we would prefer to address these questions in the context of a single application rather than on an ad hoc basis. The very nature and complexity of the issues that must be addressed, their basic impact on the overall structure of the international telecommunications industry and the number of parties interested in the outcome compel us to conclude that the questions raised by the petitioners should be considered in a broad rule making proceeding.
52
We emphasize that this Court expresses no opinion regarding the merit of the FCC's policy determination to foster intermodal competition in both the leased-channel and the exchange service markets. We hold only that the FCC failed to consider relevant factors prior to establishing its policy. In this regard, this Court's opinion does not represent an attempt by this Court to infringe on the FCC's primary function of establishing policy
53
Direct access and independent earth station ownership are not new issues. Direct access was first proposed by WUI in 1975 and 1976 during the FCC's international facilities planning process. Memorandum Opinion Order and Notice of Proposed Rulemaking, FCC 77-536 (1977). In 1978, when the FCC began to consider the question whether international television customers should be granted authorized user status, WUI, RCA, and ITT filed comments and asked the FCC to consider the merit of direct access. See SIN I, 70 FCC 2d 2127, 2128 (1978). The Department of Justice also requested that the FCC "establish terms and conditions under which the international carriers may deal directly with Intelsat." Comments of Department of Justice, (April 12, 1978). In its SIN decision, the FCC promised that it would "soon issue a Notice of Inquiry to re-evaluate the entire Authorized User Decision [and that it would] also examine the carrier's capital investment proposals." SIN I, 70 FCC 2127 (1978). In late 1979 and early 1980, when the Department of Defense and Aeronautical Radio, Inc. filed petitions for authorized user status, RCA and other carriers again filed comments urging the FCC to consider the merit of direct access. Opposition to the ARINC petition, January 18, 1980; Comments of ITT on ARINC's petition, January 21, 1980; Comments of WUI on DOD petition, January 28, 1980. In 1980, the merit of direct access was discussed in still another round of public debate. Communication Satellite Corp., 81 FCC 2d 287 (1980)
The independent earth station ownership issue was first brought to the FCC's attention in 1969. In December of 1969, the FCC initiated a proceeding to reconsider its "interim" earth station ownership policy. Earth Station Ownership and Operation, 20 FCC 2d 735 (1969). The FCC solicited comments by the parties concerning the benefits of independent ownership and operation of earth stations and cited the potential for better service and lower rates as public benefits which could justify a reversal of the FCC's joint ownership policy. In the SIN proceeding, the petitioners renewed their request for independent ownership of earth stations. Finally, petitioners and others reiterated their request for the right to independently own and operate earth stations at the onset of these proceedings in 1980. In summary, the direct access issue has been before the FCC for more than seven years and the independent earth station ownership issue for more than thirteen years.
54
Issues not specifically addressed in this opinion have been found by this court to be without merit
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United States Court of Appeals,
Eleventh Circuit.
Nos. 95-4731, 95-4797.
GOLDEN DOOR JEWELRY CREATIONS, INC., a corporation, and Suisse Gold Assayer &
Refinery, Inc., a corporation, Plaintiffs,
Leach & Garner Company, Westway Metals Corp., Plaintiffs-Intervenors-Appellees,
Capital Bank and Stern Metals, Inc., Plaintiffs-Intervenors,
v.
LLOYDS UNDERWRITERS NON-MARINE ASSOCIATION, an association licensed to
underwrite insurance in the State of Florida, and Peter Frederick Wright, Defendants-Appellants,
Sanford Credini and Lawrence Systems, Inc., Defendants-Intervenors.
LEACH & GARNER COMPANY, Plaintiff-Appellee,
v.
Peter Frederick WRIGHT, Defendant-Appellant.
GOLDEN DOOR JEWELRY CREATIONS, INC., a corporation, and Suisse Gold Assayer &
Refinery, Inc., a corporation, Plaintiffs,
Leach & Garner Company, Westway Metals Corp., Plaintiffs-Intervenors-Appellants,
Capital Bank and Stern Metals, Inc., Plaintiffs-Intervenors,
v.
LLOYDS UNDERWRITERS NON-MARINE ASSOCIATION, an association licensed to
underwrite insurance in the State of Florida, and Peter Frederick Wright, Defendants-Appellees,
Sanford Credini and Lawrence Systems, Inc., Defendants-Intervenors.
LEACH & GARNER COMPANY, Plaintiff-Appellant,
v.
Peter Frederick WRIGHT, Defendant-Appellee.
July 28, 1997.
Appeals from the United States District Court for the Southern District of Florida. (No. 83-1409-
CIV-SMA), Sidney M. Aronovitz, Judge.
Before HATCHETT, Chief Judge, BARKETT, Circuit Judge, and RONEY, Senior Circuit Judge.
HATCHETT, Chief Judge.
In this appeal involving a claim for breach of an insurance contract, we affirm the district
court's (1) decision granting summary judgment against the insurer, (2) damage award and (3) denial
of supersedeas bond premiums. We reverse and remand for the district court to recalculate the
prejudgment interest from the date that the payment became due rather than the date of loss.
FACTS
Sanford Credini and his wife each owned fifty percent of two companies, Golden Door
Jewelry Creations, Inc. (Golden Door) and Suisse Gold Assayer and Refinery, Inc. (Suisse Gold).
Credini functioned as the president and "principal operating officer" of both corporations. In
addition to common ownership, the businesses shared common office space in Miami, Florida.
Suisse Gold purchased scrap gold for refinement and resale. Golden Door purchased refined gold
and precious metals, from which it created jewelry and other objects for resale. The businesses often
acted in tandem, with Suisse Gold selling most of its output to Golden Door.
Both companies obtained their respective gold supplies from third parties. Leach and Garner
Company (Leach) consigned refined gold to Golden Door pursuant to a consignment agreement.
Westway Metals Corp. (Westway) entered into a similar consignment agreement for scrap gold with
Suisse Gold. Golden Door retained a warehouser, Lawrence Systems (Lawrence), to store the
consigned materials. Lawrence stored, and retained in its possession, Leach's and Westway's gold
stock in two separate safes on the premises of Golden Door and Suisse Gold, but one representative
of Golden Door and Suisse Gold, respectively, also retained access to the gold.
In 1981, Golden Door and Suisse Gold purchased a "jeweller's block policy" from Lloyds
Underwriters Non-Marine Association and its representative underwriter, Peter Wright (collectively,
Lloyds). The policy insured all jewelry products owned by, delivered to or entrusted to Golden
Door or Suisse Gold against all risks, including theft, subject to several exclusions. The policy
specifically named the insured as "Sanford [Cr]edin, doing business as Golden Door ... and/or Suisse
Gold." Over the next several years, Golden Door and Suisse Gold renewed and amended the policy,
adding excess policies and endorsements. These amendments increased the coverage for each
company to $6,000,000. One endorsement added Westway as a "loss payee" for coverage afforded
to Suisse Gold. Leach was not added as a loss payee.
On February 10, 1983, an unknown party, later identified as Credini, stole $9,000,000 of
goods from Golden Door, Suisse Gold and the safes containing Leach's and Westway's gold.
Attempting to conceal his theft, Credini initially filed a claim with Lloyds. Upon investigating the
claim, however, Lloyds refused payment because it suspected that Credini had been involved in the
loss. In 1988, following a flight from jurisdiction and extradition back to the United States, a grand
jury indicted Credini, and he pleaded guilty to conspiracy in the United States District Court for the
Southern District of Florida.
PROCEDURAL HISTORY
On May 5, 1983 (prior to Credini's guilty plea), Golden Door and Suisse Gold filed an action
for breach of contract against Lloyds in the Circuit Court for the Eleventh Judicial Circuit of Dade
County, Florida, seeking to recover under the policy. On June 8, 1983, Lloyds filed a petition for
removal to the United States District Court for the Southern District of Florida. Lloyds's answer
defended the action on the ground that the loss resulted from the dishonest act of an assured or its
employee, an exception to the policy enumerated in Paragraph 5(A). Lloyds also asserted that the
assureds' failure to maintain a detailed and itemized list of property precluded coverage pursuant to
Paragraph 8(A) of the policy.
On March 13, 1984, Leach intervened as a plaintiff and asserted its right to recover as a
consignor-beneficiary. On December 11, 1984, Westway also intervened as a plaintiff.1 Both Leach
and Westway filed separate actions against Lloyds on the same grounds. The district court
consolidated these actions.
On August 15, 1985, Lloyds filed its first motion for summary judgment. Following
discovery, Lloyds renewed its motion and the district court issued its first published disposition in
this case. The court granted Lloyds's motion for summary judgment in part, barring Credini, Golden
Door and Suisse Gold from recovery for violating Paragraph 8(A). Golden Door Jewelry Creations,
1
Other companies also intervened but have been dismissed during the course of this litigation.
Inc. v. Lloyds Underwriters, 748 F.Supp. 1529, 1534-35 (S.D.Fla.1990) (Golden Door I). The court
denied, however, Lloyds's motions as against Leach and Westway (hereinafter, the Consignors) and
granted the Consignors' motions for summary judgment. Golden Door I, 748 F.Supp. at 1536-46.
The court held that the Consignors had a direct right of recovery under any of three theories: (1) as
third-party beneficiaries; (2) under the legal liability of Golden Door and Suisse Gold (hereinafter,
the Insureds); or (3) pursuant to a reformation of the contract giving the Consignors status as loss
payees and/or named co-insureds. Golden Door I, 748 F.Supp. at 1537. In its reformation of the
policy, the court also rendered the policy defenses inapplicable to the Consignors, thus denying
Lloyds's argument of policy defenses and coverage exclusions. Golden Door I, 748 F.Supp. at 1543-
46.
Upon Lloyds's motion for reconsideration, the court reaffirmed its holding that the
Consignors "entrusted" the goods to the Insureds as required under the policy and that Credini's
dishonesty did not preclude the Consignors' ability to recover. Golden Door Jewelry Creations, Inc.
v. Lloyds Underwriters, 758 F.Supp. 708, 711-15 (S.D.Fla.1991) (Golden Door II). The court also
awarded damages to the Consignors and prejudgment interest from the date of loss. Golden Door
II, 758 F.Supp. at 721-22. Finally, the district court adopted the recommendation of the Special
Master not to strike Lloyds's pleadings despite Lloyds's payments to fact witnesses. Golden Door
II, 758 F.Supp. at 723.
On appeal, this court vacated the district court's decision and remanded for further
proceedings. Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Ass'n, 8
F.3d 760 (11th Cir.1993) (Golden Door III). This court first rejected Lloyds's argument that the
policy did not include coverage for the legal liability of the Insureds. Golden Door III, 8 F.3d at
765. The panel reversed the district court's reformation of the contract, however, holding that the
facts did not support reformation under Florida law and that the Consignors' interest in recovery was
subject to the policy's conditions and exclusions. Golden Door III, 8 F.3d at 766-68. We remanded
for the district court to determine whether Credini's thievery breached the policy exclusions, thus
precluding coverage for all parties under the policy. Golden Door III, 8 F.3d at 768. Finally, this
court also declined to address Lloyds's payments to witnesses because the district court had not
sufficiently addressed the merits of the claim. Golden Door III, 8 F.3d at 768-69. On August 22,
1994, this court issued a corrected Judgment Mandate awarding Lloyds "costs on appeal to be taxed
by the Clerk of this court."
On remand, the district court reaffirmed its prior decisions, albeit on different grounds. The
court first adopted in part, and overruled in part, the opinion of the Special Master regarding
Lloyds's payments to witnesses. Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-
Marine Ass'n, 865 F.Supp. 1516 (S.D.Fla.1994) (Golden Door IV). The court rejected the
Consignors' argument that the payments made to fact witnesses violated 18 U.S.C. § 201(c)(2).
Golden Door IV, 865 F.Supp. at 1523-24. The court determined, however, that the payments were
unethical and in violation of Rule 4-3.4 of the Rules of Professional Conduct, as adopted in Florida
during the relevant time period. Golden Door IV, 865 F.Supp. at 1524-26. As a sanction, the court
excluded all evidence tainted by the ethical violations. Golden Door IV, 865 F.Supp. at 1526-27.
In a separate opinion, the district court also reconsidered the parties' motions for summary
judgment. Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters, 888 F.Supp. 1150
(S.D.Fla.1995) (Golden Door V). As before, the court rejected Lloyds's motions and granted
summary judgment to the Consignors. The court held that Golden Door III limited the scope of the
remand to the application of the policy exclusions to the Consignors. Golden Door V, 888 F.Supp.
at 1153. The court thus held that the Consignors could recover pursuant to the legal liability
provisions because the coverage exclusions were severable and only precluded the recovery of the
assured who arranged the theft. Golden Door V, 888 F.Supp. at 1155-57. In an unpublished
companion order, the court accepted the magistrate judge's recommendation and granted Lloyds
reimbursement for costs, rejecting Lloyds's argument that the premiums on its supersedeas bonds
should be taxed as costs under Federal Rule of Appellate Procedure 39. Upon Lloyds's motion to
reconsider, the court affirmed its decision except that the court revised the applicable prejudgment
interest rate from twelve percent to eight percent after December 31, 1994, pursuant to sections
55.03 and 687.01 of the Florida Statutes. Lloyds filed this appeal of Golden Door V and its two
companion orders, and the Consignors cross-appealed.
CONTENTIONS
Lloyds contends that the district court erroneously granted summary judgment to the
Consignors. According to Lloyds, the Consignors have no direct right of recovery and their interests
are subject to the terms and exclusions of the policy. As loss payees or third party beneficiaries, the
Consignors are barred from recovery where the named insured cannot recover or where the policy
has been breached. Lloyds argues that several provisions of the policy estop the Consignors from
recouping their losses: (1) the Consignors did not entrust the stolen property to the Insureds,
pursuant to Paragraph 3(C), because the Consignors delivered and entrusted their property to
Lawrence, the warehouser; (2) recovery is barred because the district court previously granted
summary judgment to Lloyds against the named assureds—Credini, Golden Door and Suisse
Gold—for violating Paragraph 8(A) of the policy; (3) paragraph 5(A) of the policy precludes
recovery for losses caused by dishonest acts of the "Assured or his or their employees"; and (4)
Credini's fraudulent claim on behalf of the Insureds violated Paragraph 21 of the policy, causing the
policy to become void. Lloyds also asserts that the district court erroneously limited the scope of
the remand to the applicability of the policy exclusions and the witness payment issue.
Lloyds offers three additional challenges to the remand decision. First, Lloyds contends that
the district court improperly calculated the Consignors' losses to include intangible security interests,
including gold that represented collateral for debts that the Insureds owed to the Consignors. Lloyds
argues that pursuant to Paragraph 3(A), the policy only provided coverage for tangible property.
Second, Lloyds argues that the district court erroneously withheld reimbursement for the
supersedeas bond premiums Lloyds paid for the first appeal, as Federal Rule of Appellate Procedure
39 provides for the inclusion of premiums paid for costs of supersedeas bonds in the taxation of
appellate costs when the appeal results in a reversal. Third, the district court incorrectly computed
the prejudgment interest from the date of loss rather than from the date that the payments were due.
The Consignors contend that the district court properly awarded them summary judgment
because the policy language renders the exclusions severable, thereby allowing innocent assureds
to recover despite the misconduct of a co-assured. Under these facts, the innocent Insureds, Golden
Door and Suisse Gold, did not violate any of the policy exclusions. Moreover, the Consignors'
property is covered under Paragraph 3(C) because both the district court and this court properly held
that the Consignors entrusted their property to the Insureds. In addition, the summary judgment
order imposed against the Insureds for violating Paragraph 8(A) does not bar the Consignors'
recovery because that paragraph is inapplicable to losses of entrusted property. Furthermore,
Credini's violation of the dishonest acts provision in Paragraph 5(A)(1) is inapplicable because the
policy distinguishes officers from employees. Finally, according to the Consignors, Paragraph 21
is inapplicable; Credini's acts cannot be imputed to the Insureds because Credini acted adversely
to their interests.
The Consignors offer several responses to Lloyds's additional contentions. First, Lloyds
failed to present a specific showing of error in the valuation of the Consignors' losses or an
alternative valuation. Paragraph 3(C) provides coverage for tangible and intangible property, and
the record clearly supports the district court's calculation of the gold that the Consignors entrusted
to the Insureds. Second, the court properly denied supersedeas bond premium costs because Golden
Door III merely vacated, but did not completely reverse, the district court's prior decision.
Therefore, under these circumstances, Rule 39(a) requires this court to expressly provide for the
appellate costs awarded. Third, the district court properly ordered interest from the date of loss
because under Florida law the insurer's denial of coverage precludes the insurer from enforcing a
provision for payment after the date of loss.2
DISCUSSION
2
On cross-appeal, the Consignors argue that: (1) the district court should have found that
Lloyds's payments to fact witnesses violated 18 U.S.C. § 201(c)(2) because the statute does not
require that the payments constitute a bribe for false testimony; and (2) the court should have
stricken Lloyds's pleadings as the appropriate sanction for these payments. We reject the
Consignors' argument regarding section 201(c)(2) as meritless in light of our decision in United
States v. Moody, 977 F.2d 1420, 1425 (11th Cir.1992) (section 201(c)(2) "obviously proscribes a
bribe for false testimony; persons of ordinary intelligence would come to no other conclusion"),
cert. denied, 507 U.S. 944, 113 S.Ct. 1348, 122 L.Ed.2d 730 (1993). Moreover, we find that the
sanction imposed—barring Lloyds from using the testimony of paid witnesses—adequately
penalized Lloyds for violating Rule 4-3.4(b) of the Rules of Professional Conduct and did not
constitute an abuse of the district court's discretion.
The district court properly interpreted the scope of this court's previous remand order and
granted summary judgment to the Consignors. We conduct a de novo review of a district court's
decision to grant summary judgment. Rooney v. Watson, 101 F.3d 1378 (11th Cir.1996); Duke v.
Massey, 87 F.3d 1226 (11th Cir.1996). Applying the standards that the district court employed, we
independently review the record to determine whether a genuine issue as to any material fact exists.
"A genuine issue of material fact exists when a reasonable trier of fact considering the record
evidence could find for the nonmoving party." Duke, 87 F.3d at 1231. We review the evidence in
the light most favorable to the nonmoving party, with all reasonable inferences in support thereof.
Rooney, 101 F.3d at 1380.
Prior to addressing Lloyds's contentions regarding the applicability of the policy exclusions
under these facts, we must first address two foundational issues that this court's previous decision
forecloses. Lloyds first argues that the legal liability provision of the policy does not provide the
Consignors with a direct claim for recovery. Paragraph 3 of the policy provides:
3. The property insured is as follows:
(C) Property as above described, delivered or entrusted to the Assured by others who are
dealers in such property or otherwise engaged in the jewellery trade, but only to the extent
of the Assured's own actual interest therein because of money actually advanced thereon, or
legal liability for loss of or damage thereto.
In Golden Door III, we held that "the conclusion is inescapable: the jewelers' block policy includes
coverage for the legal liability of the assured deriving from the loss of the property." 8 F.3d at 765.
In fact, we found that "Lloyds ... assumed that consignors would have coverage; the coverage they
anticipated, however, was within the terms and exclusions of the policy." Golden Door III, 8 F.3d
at 767. We vacated the district court's final judgment and remanded for reconsideration on the
ground that the district court erroneously reformed the insurance contract and insulated the
Consignors from the applicable policy exclusions. Golden Door III, 8 F.3d at 768. This
determination did not foreclose the Consignors' right to recovery; rather, this court opined that the
policy exclusions circumscribed the Consignors' rights under the policy. See Golden Door III, 8
F.3d at 767 n. 11. We remanded the case for the district court to resolve "whether the facts of this
case satisfy this coverage exclusion." Golden Door III, 8 F.3d at 768. We therefore agree with the
district court that "the [C]onsignors may recover directly against Lloyds [pursuant to the legal
liability provisions of the policy], provided the terms and conditions of the policy do not preclude
recovery." Golden Door V, 888 F.Supp. at 1158.
Lloyds also challenges the applicability of the legal liability coverage under these facts.
Lloyds argues that the Consignors did not entrust their property to the Insureds, as required for the
legal liability coverage to attach pursuant to Paragraph 3(C), because Lawrence actually held the
gold consigned to the Insureds. This court's prior decision forecloses this issue as well. In Golden
Door III, we held that "the property at issue in this case falls into the third class of property, which
is defined as ... [p]roperty ... entrusted to the Assured...." 8 F.3d at 765. Under the law of the case
doctrine, this issue should not be relitigated. See Burger King Corp. v. Pilgrim's Pride Corp., 15
F.3d 166, 169 (11th Cir.1994) ("[F]indings of fact and conclusions of law by an appellate court are
generally binding in all subsequent proceedings in the same case in the trial or on a later appeal.");
see also Wheeler v. City of Pleasant Grove, 746 F.2d 1437, 1440 (11th Cir.1984) (law of the case
doctrine encompasses issues explicitly and implicitly decided). The Consignors therefore may seek
compensation under the legal liability provision provided that no policy exclusions apply. We must
now examine Lloyds's arguments in that regard.
A. Policy Exclusions
The severability of the policy exclusions is the foundational premise of the district court's
decision. Severability of contractual provisions protects a named assured from the contractually
violative acts of a co-assured. The determination of severability depends on the contractual
language at issue. Overton v. Progressive Ins. Co., 585 So.2d 445, 447 (Fla. 4th D.C.A.1991).3 A
policy jointly covers all insured parties if fraud or dishonesty on behalf of any insured precludes
coverage. See State Farm Fire & Cas. Ins. Co. v. Kane, 715 F.Supp. 1558, 1561-62 (S.D.Fla.1989)
(citing Sales v. State Farm Fire & Cas. Co., 849 F.2d 1383, 1385 (11th Cir.1988), rev'd on other
grounds, 902 F.2d 933 (11th Cir.1990)). Inclusion of the phrase "the insured," on the contrary,
permits an innocent coinsured to recover. See Michigan Millers Mut. Ins. Corp. v. Benfield, 902
3
The parties do not dispute that Florida law applies to this diversity action.
F.Supp. 1509, 1514 (M.D.Fla.1995); cf. Sales, 849 F.2d at 1385 (distinguishing use of "any
insured" from "the insured"); Allstate Ins. Co. v. McCranie, 716 F.Supp. 1440, 1447 (S.D.Fla.1989)
(use of the phrase "an insured" excludes coverage for "all claims which arise from the intentional
acts of any one insured"), aff'd, 904 F.2d 713 (11th Cir.1990). Florida courts have found that the
term "the assured" is, at least, ambiguous and requires a finding of severability. See Auto-Owners
Ins. Co. v. Eddinger, 366 So.2d 123, 124 (Fla.2d D.C.A.1979); see also Overton, 585 So.2d at 449.
The Florida Supreme Court cited Eddinger's innocent co-insured doctrine with approval in
Everglades Marina, Inc. v. American Eastern Development Corp., 374 So.2d 517, 519 (Fla.1979).
The policy at issue herein employs the phrase "the Assured," and we therefore deem the policy
provisions severable.
1. Paragraph 8(A)
This provision of the policy, as well as the previous determinations of the district court,
foreclose Lloyds's contention that the summary judgment previously imposed against the Insureds
precludes the Consignors' recovery. In Golden Door I, the district court entered summary judgment
against Credini, Golden Door and Suisse Gold for failure to properly maintain an inventory of their
property pursuant to Paragraph 8(A) of the policy. Golden Door I, 748 F.Supp. at 1535-36.
Paragraph 8(A) states:
The Assured will maintain a detailed and itemized inventory of his or their property and
separate listing of all travellers' stocks, in such manner that the exact amount of loss or
damage can be accurately determined therefrom by [Lloyds].
As referenced above, Paragraph 3 of the policy delineates the three categories of property
to which coverage is extended. Paragraph 3(A) describes the property of the assureds:
Pearls, precious and semi-precious stones, jewels, jewellery, watches and watch movements,
gold, silver, platinum, and other precious metals, alloys and other stock usual to the conduct
of the Assured's business, owned by the Assured.
(emphasis added). Paragraph 3(C), as quoted above, describes property "delivered or entrusted to
the [a]ssured by others."4
The policy language thus clearly distinguishes between the property coverage afforded to
4
None of the parties contend that the terms of Paragraph 3(B) are relevant to this appeal.
the Paragraph 3(A) property of the assureds and the legal liability coverage provided for the
Paragraph 3(C) property entrusted to the assureds. The inventory requirements of Paragraph 8(A)
apply only to Paragraph 3(A) property. Golden Door V, 888 F.Supp. at 1159. The Insureds' breach
of the record-keeping provisions of Paragraph 8(A) therefore only precluded them from recovering
for the loss of their own property, as defined in Paragraph 3(A). See Golden Door I, 748 F.Supp.
at 1535-36 ("This limited ruling shall not be interpreted, however, to impact upon the opportunities
for recovery provided the intervenors...."). Absent additional breaches of the policy, the remainder
of the policy remains intact and the legal liability provisions remain accessible to the Insureds. See
8 Couch on Insurance 2d § 37A:797-98 (1985). The Consignors are therefore entitled to seek
recovery for Paragraph 3(C) property because Lloyds has not shown that either the Insureds or the
Consignors violated the inventory requirements of Paragraph 8(A) or any other provision with
respect to the entrusted property.
2. Paragraph 5(A)
Lloyds's reliance on the dishonest acts exception of Paragraph 5(A) is also misguided.
Paragraph 5(A) excludes recovery for losses resulting from
[l]oss, damage or expense caused by or resulting from sabotage, theft, conversion or other
act or omission of a dishonest character (1) on the part of the Assured or his or their
employees, or (2) on the part of any person to whom the property hereby insured may be
delivered or entrusted by whomsoever for any purpose whatsoever....
Lloyds contends that Credini's theft of the property violated this provision because Credini acted as
an "employee" pursuant to Paragraph 5(A)(1). That is, Lloyds argues that Credini held the status
of both an employee and an officer of the Insureds. In the alternative, Lloyds asserts that this court
must impute Credini's unlawful act to the Insureds under Paragraph 5(A)(1) or as "persons to whom
the property ... [was] entrusted" under Paragraph 5(A)(2).
"Under the ordinary principals [sic] of contract interpretation, a court must first examine the
natural and plain meaning of a policy's language." Key v. Allstate Ins. Co., 90 F.3d 1546, 1548-49
(11th Cir.1996). Where the policy language is inconsistent, ambiguous or otherwise not open to
reasonable construction, the court must interpret the policy in accordance with the applicable rules
of construction. Florida law provides that ambiguities should be construed against the drafter of the
contract. See Hurt v. Leatherby Ins. Co., 380 So.2d 432, 434 (Fla.1980). "[A]mbiguities in
insurance contracts generally are construed in favor of providing coverage." Key, 90 F.3d at 1549;
see also Nu-Air Mfg. Co. v. Frank B. Hall & Co. of N.Y., 822 F.2d 987, 992 (11th Cir.1987)
("Florida law requires that we resolve a conflict between the provisions of an insurance contract so
as to afford maximum coverage to the policyholder."), cert. denied, 485 U.S. 976, 108 S.Ct. 1270,
99 L.Ed.2d 481 (1988).
The policy itself belies Lloyds's claim that Credini should be considered an employee for
purposes of Paragraph 5(A)(1).5 The policy distinguishes between corporate officers and employees.
Paragraph 5, upon which Lloyds relies, excludes coverage for the dishonest acts of employees.
Paragraph 5(H) excludes coverage for property worn by "the Assured, officer of the corporation,
member of the firm, director, agent, employee, servant, or messenger of the Assured...."
We cannot accept Lloyds's contention that an officer is an employee for purposes of
Paragraph 5(A). As the district court held:
The adoption of the expansive language in [Paragraph] 5(H) demonstrates that the
drafter of the policy had contemplated a policy exclusion that would cover any person
associated with the Assured. The exclusion in [Paragraph] 5(A), on the other hand, is much
more limited in scope, covering only the Assured and "employees."
Golden Door V, 888 F.Supp. at 1156. In its brief, Lloyds admits that Credini was an officer of the
Insureds, but, nonetheless, Lloyds seeks to obtain the benefit of both titles. Adopting such an
interpretation would render much of the language in Paragraph 5(H) superfluous because the term
"employee" in paragraph 5(A)(1) would encompass several of the positions specifically listed in the
former provision. "[A]n interpretation which gives a reasonable meaning to all provisions of a
contract is preferred to one which leaves a part useless or inexplicable." Premier Ins. Co. v. Adams,
632 So.2d 1054, 1057 (Fla. 5th D.C.A.1994); see also Restatement (Second) of Contracts § 203(a)
(1981) ("[A]n interpretation which gives a reasonable, lawful, and effective meaning to all the terms
is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect."); cf.
5
As discussed above, the contractual provisions are severable, creating separate contractual
obligations with each insured. See Eddinger, 366 So.2d at 124. In order to preclude coverage,
Lloyds must therefore show that Credini acted on behalf of the Insureds, causing the Insureds to
forfeit their status as innocent co-insureds.
Maccaferri Gabions, Inc. v. Dynateria, Inc., 91 F.3d 1431, 1442 (11th Cir.1996) ("[W]e are mindful
of the need to give effect to the entire agreement and to avoid an interpretation that creates an
unnecessary conflict between its terms."), cert. denied, --- U.S. ----, 117 S.Ct. 1430, 137 L.Ed.2d
539 (1997). Furthermore, an exclusionary provision must be narrowly and literally construed to
ensure that it unambiguously prohibits coverage. See Indiana Ins. Co. v. Miguelarcaina, 648 So.2d
821, 823 (Fla.3d D.C.A.1995); see also Hodges v. National Union Indem. Co., 249 So.2d 679, 681
(Fla.1971).6
Lloyds's alternative contention regarding the application of Paragraph 5(A)(2) also lacks
merit. Lloyds argues that Credini acted on behalf of the Insureds at the time of the theft. Under this
theory, neither Golden Door nor Suisse Gold is an "innocent co-assured" because the Consignors
entrusted their property to the Insureds, and Credini, as an officer of both corporations, functioned
as an extension of the Insureds. Lloyds, citing Cora Pub, Inc. v. Continental Casualty Co., 619 F.2d
482 (5th Cir.1980), contends that a corporate entity cannot recover under an insurance policy when
the president, principal operating officer and fifty percent shareholder steals or destroys the insured
property.7
We reject the invitation to impute Credini's illegal acts to the Insureds. Florida law prohibits
attributing the acts of a corporate officer to the corporation where the officer acts outside of his
authority or adversely to the interests of the corporate entity. See State Dep't of Ins. v. Blackburn,
633 So.2d 521, 524 (Fla.2d D.C.A.1994); see also Lanchile Airlines v. Connecticut Gen. Life Ins.
Co. of N. Am., 759 F.Supp. 811, 814 (S.D.Fla.1991) ("knowledge and conduct of an agent will not
6
While the district court cited Flight Equipment and Engineering Corp. v. Shelton, 103 So.2d
615, 623 (Fla.1958), for the proposition that the Florida Supreme Court has "drawn a distinction
between corporate officers and employees," we are not convinced that this holding remains
viable. See Fla. Stat. § 607.01401(9) (1993) (defining the term "employee" under the Florida
Business Corporation Act as "includ[ing] an officer but not a director.") Despite our misgivings
about Shelton, the distinction between "officer" and "employee" found in the terms of this policy
supports the district court's determination.
7
On the previous remand, Lloyds argued that the "sole actor doctrine" required that the
district court attribute Credini's actions to the Insureds given Credini's status as the primary
representative of the Insureds. See Vail Nat. Bank v. Finkelman, 800 P.2d 1342, 1345
(Colo.App.1990). Lloyds failed to explicitly assert this contention in its briefs, and we regard it
abandoned for purposes of this appeal.
be imputed to a principal if an agent is secretly ... acting adversely to the principal and entirely for
his own or another's purposes.") (internal quotation marks omitted); Tew v. Chase Manhattan Bank,
N.A., 728 F.Supp. 1551, 1560. (S.D.Fla.1990).
The underlying facts show that Credini did not act in furtherance of the Insureds' interests
when he stole company property and subsequently filed a fraudulent claim for the loss. In the
indictment to which Credini pleaded guilty, the government charged that "Credini unlawfully
entered the safes of Lawrence Systems and stole the gold supplies which were the property of Leach
and Garner and Westway, and embezzled the gold of Golden Door and Suisse Gold, to pay his
casino gambling losses." Credini therefore perpetrated the theft and embezzlement solely for his
own benefit. Credini's actions represent not only a disregard for the interests of the Insureds, they
were directly antagonistic to those interests.8
3. Paragraph 21
Our decision not to impute Credini's actions to the insured also forecloses Lloyds's reliance
on the exclusion in Paragraph 21, which provides:
If the Assured shall make any claim knowing the same to be false or fraudulent, as regards
amount or otherwise, this Policy shall become void and all claim hereunder shall be
forfeited.
Lloyds contends that Credini's fraudulent claim and the Insureds' failure to amend or rescind the
claim upon notice of the impropriety voided the policy and precludes all coverage.
As stressed above, the use of the term "the Assured" renders Paragraph 21 severable.
Credini's actions are therefore distinguishable from the innocent Insureds unless we impute Credini's
actions to the Insureds. As previously discussed, Credini's actions should not be imputed to the
Insureds because Credini acted adversely to their interests.
Lloyds's attempt to separate the theft from the fraudulent claim lacks merit. Although
Credini filed the claim in order to reimburse the Insureds for the property he stole, in doing so he
acted out of self-interest—to cover his tracks. It is disingenuous to distinguish the theft from the
8
We also refuse to accept Lloyds's contention that Credini's wife implicitly participated in the
robbery or the ensuing attempted coverup. Indeed, Lloyds admits that it presented no record
evidence of Credini's wife's knowledge or participation in the illegal scheme.
claim because they both constituted integral parts of Credini's scheme. This fraudulent, illegal
scheme was adverse to the corporation's interests. Moreover, as the district court held, "[w]ith no
imputation of knowledge, the corporations did not know the proof of loss was false." Golden Door
V, 888 F.Supp. at 1159. The Insureds therefore did not knowingly submit a false or fraudulent
claim, as required to void the policy under Paragraph 21. Furthermore, neither the Insureds nor the
Consignors violated any alleged duty to amend the claim.
In sum, we hold that Lloyds has not shown that either the Consignors or the Insureds violated
the policy exclusions. The Consignors are therefore entitled to recover their losses under the legal
liability provisions.
B. Calculation of Damages
We now consider whether the district court erroneously calculated the Consignors' damages
to include non-covered property. We ordinarily review the district court's factual findings for clear
error. Davis v. Prudential Sec., Inc., 59 F.3d 1186, 1188 (11th Cir.1995). In this challenge,
however, it appears that Lloyds finds fault with the district court's interpretation of the policy
coverage rather than the monetary value attached to the property itself. Thus, we review the district
court using the de novo standard. See Zaklama v. Mount Sinai Med. Ctr., 906 F.2d 650, 652 (11th
Cir.1990).
The district court properly interpreted the policy coverage and calculated the losses. Lloyds
erroneously relies on the text of Paragraph 3(A) for its argument that the policy covers only tangible
property. This reliance is misplaced, however, because the legal liability coverage provided to the
Consignors is derived from Paragraph 3(C) rather than Paragraph 3(A). Paragraph 3(C) protects
property "to the extent of the Assured's own interest therein because of money actually advanced
thereon, or legal liability for loss of or damage thereto." The Insureds retained an interest in the gold
which the Consignors entrusted to them, even if the parties used a portion of the gold for security
purposes.
The district court rendered a detailed analysis of Lloyds's non-tangible losses argument in
Golden Door II, 758 F.Supp. at 719-20. The court properly held that the " "legal liability' under the
consignment agreements encompasses a great deal more than the gold held on consignment for
public sale ... and include[s] ... the gold so held to secure additional obligations." Golden Door II,
758 F.Supp. at 720. We agree that Paragraph 3(C) encompasses both tangible property and gold
representing indebtedness to the Consignors. Lloyds cannot use Paragraph 3(A) to limit the legal
liability coverage described in Paragraph 3(C).
C. Supersedeas Bond Premiums
The next issue for consideration is whether the district court erroneously held that premiums
on supersedeas bonds are not included in the taxation of costs unless the appellate court so orders.
We review the district court's decision de novo. Federal Rule of Appellate Procedure 39(a) provides
that "if a judgment is affirmed or reversed in part, or is vacated, costs shall be allowed only as
ordered by the court." Fed. R.App. P. 39(a). Rule 39(e) states that "the premiums paid for the cost
of supersedeas bonds ... shall be taxed in the district court as costs of the appeal in favor of the party
entitled to costs under this rule." Fed. R.App. P. 39(e).
In order to pursue the appeal in Golden Door III, Lloyds posted a supersedeas bond. In
Golden Door III, this court held that "the final judgments entered on behalf of consignors must be
vacated. The case is remanded to the district court for further proceedings not inconsistent with this
opinion." 8 F.3d at 769. On August 22, 1994, this court issued a corrected Judgment Mandate
awarding Lloyds "costs on appeal to be taxed by the Clerk of this court." Lloyds thereafter filed a
Verified Motion to Tax Costs seeking reimbursement for the bond premiums.
Relying on Graham v. Milky Way Barges, Inc., 122 F.R.D. 18 (E.D.La.1988), the magistrate
judge recommended that the district court deny supersedeas bond premiums because the Judgment
Mandate failed to specifically include those costs. The magistrate judge held that when an appellate
court vacates the district court's judgment on appeal, Rule 39(a) provides for costs "only as ordered
by the [appellate] court." Again, this court's Judgment Mandate failed to explicitly provide for
supersedeas bond premiums. Moreover, the magistrate judge refused to imply the inclusion of such
bond premium costs because the Judgment Mandate directed the Clerk of this court to tax the costs
of appeal, while Rule 39(e) specifically provides for recovery of bond premiums in the district court.
We affirm the denial of supersedeas bond premiums. It appears that this issue is one of first
impression in this circuit. Rule 39(a) leaves the imposition of costs to the discretion of the appellate
court where the lower court judgment is affirmed in part, reversed in part or vacated. In exercising
this discretion, a court must provide a specific directive. The phrase "only as ordered by the court"
does not provide the parties with a unfettered right to all costs incurred on appeal. Rather, in cases
where this court's determination does not produce closure, we must determine the relief to which the
parties are entitled. Where this court's order fails to explicitly grant a class of costs, we must
interpret that silence as a rejection of those costs.
We find support for our position in Conway Groves, Inc. v. Coopers & Lybrand, 158 F.R.D.
505 (M.D.Fla.1994). Under the facts in Conway, this court had affirmed in part, vacated in part and
remanded a lower court's decision. This court had also ordered the parties to equally divide the costs
of appeal "to be taxed by the clerk of this court." The district court held that Rule 39(a) required
the appellate court to specify the costs to be taxed on appeal. Our court's inclusion of the phrase
"clerk of this court" precluded the district court from awarding supersedeas bond premium costs
because Rule 39(e) places bond premium costs within the mandatory auspices of the district court.
In contrast, the costs of briefs, appendices and copies of records "undisputably fall within the ambit
of the [appellate] court's order because these costs are specifically discussed in Rule 39(c)."
Conway, 158 F.R.D. at 506; see also Graham, 122 F.R.D. at 20. Rule 39(a) places discretion in the
appellate court. A general order for the clerk of the appellate court to tax costs encompasses those
costs enumerated in Rule 39(e) and does not include costs for supersedeas bond premiums.
D. Calculation of Prejudgment Interest
The final issue is whether the district court properly computed the prejudgment interest from
the date of loss rather than from the date payments became due pursuant to the policy. Lloyds
contends that "in contract actions interest is allowable from the date that the debt is due."
Lumbermens Mut. Cas. Co. v. Percefull, 638 So.2d 1026, 1029 (Fla. 4th D.C.A.1994), (Lumbermens
I), approved, 653 So.2d 389 (Fla.1995) (Lumbermens II); see also Columbia Cas. Co. v. Southern
Flapjacks, Inc., 868 F.2d 1217, 1219 (11th Cir.1989) ("Florida courts have equated the date of the
loss with the date that the proceeds would have been due under the policy.") (internal quotation
marks omitted). Paragraph 15 of the policy states that "the amount of loss or damage for which
[Lloyds] may be liable shall be payable thirty (30) days after satisfactory proof of loss, as herein
provided, is received by [Lloyds]."
The Consignors argue that the district court properly ordered interest from the date of loss.
See Lloyd's U.S. Corp. v. Smallwood, 719 F.Supp. 1540, 1550 (M.D.Fla.1989), aff'd, 903 F.2d 828
(11th Cir.1990). The Consignors assert that an insurer's denial of coverage precludes the insurer
from enforcing a provision for payment after the date of loss. See Independent Fire Ins. Co. v.
Lugassy, 593 So.2d 570, 572 (Fla.3d D.C.A.1992). Moreover, they contend that Paragraph 15 is
inapplicable to the facts at issue because the Consignors are claiming legal liability coverage and,
thus, were not required to file a proof of loss statement.
We hold that the district court's imposition of prejudgment interest from the date of loss was
error. In Lumbermens II, the Supreme Court of Florida approved a lower court's determination that
"in contract actions interest is allowable from the date that the debt is due." Lumbermens II, 653
So.2d at 390. The Consignors cite to Lugassy for the exception that "if the insurer denies liability,
interest begins to run from the date of the loss, even where the policy provides for payment at a later
date." Lugassy, 593 So.2d at 572. Both Lumbermens decisions, however, were released after
Lugassy. Moreover, the lower court in Lumbermens I cited to Lugassy for support, including the
proposition that imposing prejudgment interest from the date payment is due furthers public policy.
See Lumbermens I, 638 So.2d at 1029. Moreover, the Florida Supreme Court seemingly reversed
Lugassy when it noted:
The fact that there is an honest and bonafide dispute as to whether the debt is actually due
has no bearing on the question. The rule is that if it is finally determined that the debt was
due, the person to whom it was due is entitled not only to the payment of the principle of the
debt but to interest at the lawful rate from the due date thereof.
Lumbermens II, 653 So.2d at 390 (quoting Parker v. Brinson Const. Co., 78 So.2d 873, 874
(Fla.1955)). "In cases concerning the recovery of insurance proceeds for property losses, the Florida
courts have equated the date of the loss with the date that the proceeds would have been due under
the policy." Columbia Cas. Co., 868 F.2d at 1219 (internal quotation marks omitted). We conclude
that our interpretation in Columbia Casualty remains viable after the Lumbermens II decision.9 We
consequently remand this case to the district court for it to reassess the prejudgment interest from
the date payment became due.
CONCLUSION
The district court correctly determined that "[n]one of the policy's provisions preclude the
consignors from recovering their losses from Lloyds." Golden Door III, 888 F.Supp. at 1159.
Because no genuine issue of material fact exists, we affirm the district court's grant of summary
judgment to the Consignors and denial of summary judgment to Lloyds. We also uphold the denial
of supersedeas bond premiums. Finally, we affirm the district court's calculation of the Consignors'
losses, but remand for the court to recalculate the amount of prejudgment interest, consistent with
our instructions.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
9
The Consignors' argument that they were not required to submit a proof of loss statement
lacks merit because they are attempting to collect for the Insureds' legal liability. Paragraph 15
requires Lloyds to tender payment thirty days after receiving a satisfactory proof of loss for "loss
or damage for which [Lloyds] may be liable." The coverage afforded to the Consignors falls
"within the terms and exclusions of the policy." Golden Door III, 8 F.3d at 767.
|
{
"pile_set_name": "FreeLaw"
}
|
IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
AT NASHVILLE FILED
DECEMBER 1997 SESSION
March 18, 1998
Cecil W. Crowson
Appellate Court Clerk
STATE OF TENNESSEE, )
)
APPELLEE, )
) No. 01-C-01-9702-CR-00041
)
) Putnam County
v. )
) Leon Burns, Jr., Judge
)
) (Sexual Battery)
CLARENCE JACKSON, )
)
APPELLANT. )
FOR THE APPELLANT: FOR THE APPELLEE:
H. Marshall Judd John Knox Walkup
Assistant Public Defender Attorney General & Reporter
215 Reagan Street 425 Fifth Avenue, North
Cookeville, TN 38501 Nashville, TN 37243-0493
OF COUNSEL: Georgia Blythe Felner
Counsel for the State
David N. Brady 425 Fifth Avenue, North
District Public Defender Nashville, TN 37243-0493
215 Reagan Street
Cookeville, TN 38501 William E. Gibson
District Attorney General
145 South Jefferson Avenue
Cookeville, TN 38501-3424
Lillie Ann Sells
Assistant District Attorney General
145 South Jefferson Avenue
Cookeville, TN 38501-3424
OPINION FILED:_________________________________
AFFIRMED AS MODIFIED
Joe B. Jones, Presiding Judge
OPINION
The appellant, Clarence Jackson (defendant), was convicted of two (2) counts of
sexual battery, a Class E felony, by a jury of his peers. The trial court, finding the
defendant to be a standard offender, imposed a Range I sentence consisting of
confinement for two (2) years in the Department of Correction in each count. The
sentences were ordered to be served consecutively for an effective sentence of four (4)
years. The defendant presents nine issues for review. However, this court finds there are
only three issues presented for review. The defendant contends (a) the evidence is
insufficient, as a matter of law, to support his convictions, (b) the trial court erred by
admitting into evidence his statement to a law enforcement officer because it contained
inadmissible hearsay, and (c) the sentences imposed by the trial court are excessive. After
a thorough review of the record, the briefs submitted by the parties, and the law governing
the issues presented for review, it is the opinion of this court that the two convictions for
sexual battery should be affirmed. However, the sentences are modified. The sentences
are to be served concurrently rather than consecutively.
The defendant married the victim’s great-aunt, Mildred C. Gentry Jackson. Mrs.
Jackson was the sister of the victim’s grandfather, Benton Gentry. The Jacksons and the
Gentrys were very close. The Jacksons, who lived in Dayton, Ohio, visited the Gentrys
frequently. They always stayed with the Gentrys when visiting Tennessee. The two
couples took vacations together. They attended social functions, family reunions, school
reunions, and parties for childhood schoolmates and friends together.
The victim, who was twenty-nine (29) years of age, has suffered from Down’s
Syndrome since she was a child. A doctor testified she has the mind of a child between
the ages of six and eight. She has been unable to work. The victim and her family lived
next door to the victim’s grandparents, the Gentrys. The victim visited the Gentrys almost
daily by walking through a yard between the residences.
On May 7, 1990, the victim’s great-grandmother, Mrs. Maxwell, died in Dayton,
Ohio. A funeral service was held in Dayton. Mrs. Maxwell’s remains were returned to
Tennessee for burial. On May 13, 1990, the family came to the Gentrys’ residence. Those
2
present gathered in the kitchen. The family members visited with each other. However,
the victim went into the living room and began watching television. She sat on a love seat
which could not be seen from the kitchen. Later, the defendant went into the living room
and sat next to the victim.
The victim testified the defendant placed his hand inside of her pants and rubbed
the vaginal area of her body. He then digitally penetrated her. He subsequently performed
cunnilingus on her. The defendant referred to the victim’s vaginal area as her “Tootsie.”
He unzipped his pants and placed the victim’s hand on his reproductive organ. He also
forced her to kiss him several times. During the course of these events, he asked the
victim, “How you feel woman.” He also asked her if she felt “like a woman.”
The victim’s younger brother observed a portion of what occurred on May 13, 1990.
He saw the defendant jerk the victim’s head between four and six times and force the
victim to kiss him. He also saw the defendant place his hand inside the victim’s pants.
In September of 1991, the Gentrys went to Dayton, Ohio, to meet the Jacksons.
They then took a thirty-day vacation. The two couples subsequently returned to Dayton,
and the Gentrys drove home. In a few days, the Jacksons came to Tennessee. As usual,
they stayed with the Gentrys. The purpose of this visit was a party for several women who
knew Mrs. Gentry and Mrs. Jackson in the formative years of their lives.
On Sunday, October 6, 1991, the victim, her parents, Benton Gentry, her
grandfather, and the defendant, went to a football game. The victim’s brother was a
member of a team playing that day. The victim’s parents and Mr. Gentry sat higher in the
stands than the victim, who sat with the students. The defendant sat next to the victim.
The victim removed her jacket and draped it over the lower portion of her body. The victim
testified the defendant placed his hand under her jacket, went inside her pants, and
touched her vaginal area. The victim’s mother saw the victim remove her jacket and place
it over the lower portion of her body.
A Putnam County deputy sheriff interviewed the defendant in Dayton, Ohio, on May
7, 1992. The defendant was apprised of the Miranda warnings. The deputy sheriff had
a letter which contained the dates and events when the defendant was alleged to have
sexually abused the victim. He did not read the entire letter. He simply advised the
3
defendant of the allegations. The defendant freely admitted having sexual contact with the
victim. The contact included digital penetration, kissing the victim’s breasts on two
occasions, and touching the vaginal area of the victim’s body. However, the defendant told
the deputy it was the victim who initiated each sexual encounter. The defendant’s son was
present during the entire interview.
I.
The defendant contends the evidence contained in the record is insufficient, as a
matter of law, to support a finding by a rational trier of fact that he was guilty of two counts
of sexual battery beyond a reasonable doubt. He argues the doctor who examined the
victim “found no medical evidence of the victim’s accusations,” the victim was not
competent to testify, and the victim during cross-examination accused another person, a
schoolmate, of sexually abusing her. The State of Tennessee (state) contends the
evidence is clearly sufficient to support the defendant’s convictions.
Unfortunately, this issue has been waived. The defendant has failed to cite any
authority to support his argument. Tenn. R. App. P. 27(a)(7); Tenn. Ct. Crim. App. 10(b).
Moreover, the arguments made in support of this issue are the conclusory statements set
forth in the previous paragraph.
Nevertheless, this court has read the record to determine whether the evidence
supports the two convictions and whether the victim was competent to testify. The record
reveals defense counsel questioned the victim before she was permitted to testify, and the
defendant did not interpose an objection to the competency of the victim This issue has
been waived. Tenn. R. Evid. 103(a)(1); Tenn. R. App. P. 36(a). However, the record
clearly establishes the victim was competent to testify. Furthermore, this court is of the
opinion the evidence contained in the record is sufficient to support the defendant’s
convictions. Tenn. R. App. P. 13(e); Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 278, 61
L.Ed.2d 560 (1979).
This issue is without merit.
4
II.
The defendant contends the trial court committed error of prejudicial dimensions by
permitting the entire statement he gave to a Putnam County Deputy Sheriff to be admitted
into evidence. He argues the statement contains hearsay.
Unfortunately, this issue has been waived as well. The defendant has failed to cite
authority to support his argument. Tenn. R. App. P. 27(a)(7); Tenn. Ct. Crim. App. 10(b).
Nevertheless, this court has considered this issue on the merits. Given the standard of
appellate review in suppression matters, the evidence contained in the record does not
preponderate against the trial court’s findings of fact.
This issue is without merit.
III.
The defendant challenges the length and the manner of serving the sentences
imposed by the trial court. He argues the trial court erroneously applied three
enhancement factors and failed to consider two mitigating factors. He also argues the trial
court erroneously ordered his sentences to be served consecutively; and the trial court also
erred by refusing to impose some form of alternative sentencing.
A.
When an accused challenges the length and manner of serving sentences, it is the
duty of this court to conduct a de novo review on the record with a presumption that “the
determinations made by the court from which the appeal is taken are correct.” Tenn. Code
Ann. § 40-35-401(d). This presumption is “conditioned upon the affirmative showing in the
record that the trial court considered the sentencing principles and all relevant facts and
circumstances.” State v. Ashby, 823 S.W.2d 166, 169 (Tenn. 1991). Furthermore, this
presumption does not apply to the legal conclusions reached by the trial court in
sentencing the accused or to the determinations made by the trial court which are
5
predicated upon uncontroverted facts. State v. Smith, 891 S.W.2d 922, 929 (Tenn. Crim.
App.), per. app. denied, (Tenn. 1994). However, this court is required to give great weight
to the trial court’s determination of controverted facts as the trial court’s determination is
based upon the witnesses’ demeanor and appearance when testifying. State v. Jernigan,
929 S.W.2d 391, 395 (Tenn. Crim. App.), per. app. denied (Tenn. 1996).
In conducting a de novo review of a sentence, this court must consider (a) any
evidence received at the trial and/or sentencing hearing, (b) the presentence report, (c) the
principles of sentencing, (d) the arguments of counsel relative to sentencing alternatives,
(e) the nature and characteristics of the offense, (f) any mitigating or enhancing factors, (g)
any statements made by the accused in his own behalf, and (h) the accused’s potential or
lack of potential for rehabilitation or treatment. Tenn. Code Ann. §§ 40-35-103 and -210;
State v. Scott, 735 S.W.2d 825, 829 (Tenn. Crim. App.), per. app. denied (Tenn. 1987).
When the accused is the appellant, the accused has the burden of establishing that
the sentences imposed by the trial court are erroneous. Sentencing Commission
Comments to Tenn. Code Ann. § 49-35-401; Ashby, 823 S.W.2d 169; State v. Butler, 900
S.W.2d 305, 311 (Tenn. Crim. App. 1994).
B.
The trial court found the evidence supports four enhancement factors. The factors
included (a) the defendant has a history of criminal behavior and convictions for the
commission of criminal offenses, Tenn. Code Ann. § 40-35-114(1); (b) the victim was
particularly vulnerable due to a mental deficiency, Tenn. Code Ann. § 40-35-114(4); (c)
the defendant committed these offenses to gratify his desire for sexual pleasure, Tenn.
Code Ann. § 40-35-114(7); and (d) the defendant abused a private trust, Tenn. Code Ann.
§ 40-35-114(15).
The defendant contends the trial court erred by using enhancement factors (4), (7)
and (15) to enhance his sentence within the appropriate range.
6
(1)
The defendant argues enhancement factor (4), the victim was particularly
vulnerable, should not have been used to enhance his sentence. He argues the evidence
does not support this factor.
In this case, the victim was twenty-nine years of age. She had suffered from Down’s
Syndrome since she was a child. A doctor testified the victim had a mental age of six to
eight years. The victim’s stepfather testified the victim’s mental age was between five and
six years. The victim’s brother saw the defendant molest the victim on one occasion. He
stated the victim looked “scared.” The victim alluded to the defendant’s “very, very strong”
hands. The trial court found the victim “was not able to respond in the same manner or
way that maybe someone else might who did not have this mental condition.”
This factor relates to the physical and mental physical limitations of the victim rather
than mere age. State v. Adams, 864 S.W.2d 31, 34-35 (Tenn. 1993). A victim is said to
be “particularly vulnerable” when the victim is “incapable of resisting, summoning help, or
testifying against the perpetrator.” Id. at 35. The State of Tennessee has the burden of
proving the victim’s physical or mental limitations rendered him or her particularly
vulnerable. Id.; see State v. Poole, 945 S.W.2d 93, 98 (Tenn. 1997); State v. Kissinger,
922 S.W.2d 482, 487 (Tenn. 1996). The question of whether a victim is particularly
vulnerable entails a factual issue which the trial court must decide on a case-by-case basis.
Poole, 945 S.W.2d at 97; State v. Boggs, 932 S.W.2d 467, 475 (Tenn. Crim. App.), per.
app. denied (Tenn. 1996).
This court is of the opinion the trial court properly used this enhancement factor to
increase the defendant’s sentence within the appropriate range. See State v. Clabo, 905
S.W.2d 197, 206 (Tenn. Crim. App.), per. app. denied, (Tenn. 1995); State v. Robert
Beachboard, Sevier County No. 03-C-01-9302-CR-00041, 1993 WL 350169 (Tenn. Crim.
App., Knoxville, September 15, 1993). While the victim attempted to resist, she was
neither mentally or physically capable of resisting the defendant. She referred to the
defendant’s strong hands. Although there were several people in another room, she did
not summon assistance. On one occasion, it was the victim’s young brother who
7
summoned assistance. The defendant, apparently knowing the brother would seek
assistance, ceased molesting the victim.
This issue is without merit.
(2)
The defendant challenges the use of enhancement factor (7), the commission of a
crime for the gratification, pleasure or excitement of the defendant. Tenn. Code Ann. § 40-
35-114(7). He argues the record does not support this factor; and the trial court did not
make an adequate finding of fact to support the use of this factor. This court is of the
opinion the record supports this factor, and, thus, the trial court properly used this factor
to enhance the defendant’s sentence within the appropriate range.
The victim testified the defendant asked her “[t]ell me how you feel, woman” and do
you “[f]eel like a woman” while he was in the act of sexually abusing the victim. The
defendant called the victim’s vaginal area her “Tootsie” and told her to show him her
“Tootsie.” He admitted kissing the victim’s breasts on two occasions and kissing her on
the lips several times. On one occasion the defendant unzipped his pants and placed the
victim’s hand on his reproductive organ. The defendant further admitted he digitally
penetrated the victim.
This issue is without merit.
(3)
Finally, the defendant challenges the use of enhancement factor (15), he violated
a private trust. Tenn. Code Ann. § 40-35-114(15). The defendant argues the trial court
did not make specific findings of fact to justify the use of this enhancement factor. This
court is of the opinion the record supports the use of this factor. Thus, the trial court
properly used this factor to enhance the defendant’s sentence.
The defendant was married to the victim’s great-aunt. The defendant and the
great-aunt visited the victim’s grandparents, the Gentrys, who lived next door to the victim
8
and her family. When the Jacksons visited Tennessee, they stayed with the Gentrys. The
victim visited her grandparents almost daily.
The sexual abuse occurred in the living room of the Gentrys’ home, a place which
was a safe haven for the victim. The defendant knew the victim was suffering from Down’s
Syndrome. He saw her frequently. The victim’s family and the Gentrys trusted the
defendant while he was in the presence of the victim. The defendant violated this private
trust.
C.
The defendant contends the trial court should have applied two mitigating factors
when determining the length of his sentences. He argues the trial court should have
applied mitigating factor (3), there were substantial grounds which tended to either excuse
or justify his conduct even though these grounds failed to establish a defense. Tenn. Code
Ann. § 40-35-113(3), and factor (8), he suffered from a mental condition which significantly
reduced his culpability, Tenn. Code Ann. § 40-35-113(8), when determining the length of
his sentences.
The defendant states in his brief the same facts support the use of both factors.
The facts submitted by the defendant are contained in a single sentence: “Clearly all the
medical evidence from Drs. Knoll and Kumar was that the defendant suffered from [a]
bipolar disorder and paranoid personality traits.” He argues the trial court “made no
findings regarding defendant’s medical condition as it relates to mitigation.”
Dr. Herman C. Knoll, an internal medicine practitioner, had known and treated the
defendant for twenty years. He also treated Mrs. Jackson. In December of 1991, Dr. Knoll
saw the defendant at the request of Mrs. Jackson. Although Dr. Knoll was not trained or
educated in the field of psychiatry, he opined the defendant had a bipolar disorder or manic
depression. He further opined the defendant was criminally insane in December of 1991.
Dr. Arvind Kumar, a psychiatrist certified by the State of Tennessee in the field of
forensic psychiatry, examined the defendant on July 19, 1993 pursuant to an order of the
trial court. Dr. Kumar found the defendant was fit to stand trial; he was not suffering from
a mental disease; and he knew right from wrong at the time he committed the offenses.
9
He based his opinion upon his examination of the defendant and a review of the
defendant’s medical records from his December, 1991 hospitalization.
Dr. Kumar’s examination revealed the existence of a bipolar disorder which was in
remission, paranoid personality traits, and a multitude of physical problems. He stated
some people with a bipolar disorder are very successful in life. He was of the opinion the
defendant was not paranoid and had had no breaks with reality. Nor was the defendant
suffering from a psychosis. The defendant was taking 300 milligrams of Lithium Carbonate
three times a day for his depression.
The victim’s mother testified at the sentencing hearing. She related her
observations concerning the defendant’s mental condition. She stated:
He [the defendant] was always smart enough to do what he
done with us in the house or on the porch or right under our
noses. I don’t think his mental ability should have any
reflection on this. He’s always been fine to us. We knew he
was manic depressive, but I don’t see how that has anything
to do with what he’s done to [my daughter].
The victim’s stepfather testified during the sentencing hearing regarding the
defendant’s mental condition. He stated:
Well, we’d [the witness and the defendant] sit and talk. He’d
talk about things he’d done in the past. Just, you know, like
you would go visit your father or someone like that. I enjoyed
talking to him. He was just, you know, he’d cut up with you, cut
up with the kids.
****
I see nothing wrong with him mentally. I mean his memory
was better than mine.
****
And he could recollect these things and tell me. He [knew]
names of people. Why, I couldn’t even remember them like he
could. So, mentally, he was as sound as he could be.
There was evidence establishing the defendant did most of the driving locally, on trips to
Tennessee, and on vacation. His wife rarely drove a motor vehicle.
Contrary to the defendant’s contention, the trial court made findings regarding the
mental condition of the defendant. The court said:
10
I find it hard to understand and inconceivable why a great-
uncle of a child who has Down’s syndrome would under any
state, mental condition that he might have been in short of
insanity take advantage of the child in the manner in which he
did.
I guess . . . I’ve sort of indicated, I don’t see much justification
for any of Mr. Jackson’s conduct. I don’t think there’s any
justification based upon the doctors’ testimony. The doctor
testified at trial. I heard that testimony. He did testify as to
problems and mood swings, but the conduct testified to by the
victim as to the incidences that happened certainly do not
indicate any lack of understanding or an inability to understand
what he was doing or form the requisite mental state . . . .
****
I don’t think that there are any significant mitigating factors.
His health condition and mental condition I suppose are in the
record, part of the record, but I don’t believe that it in any way
significantly reduced his culpability of the offense. I think he
knew what he was doing and took pleasure in what he was
doing. And I don’t think the proof that was presented would
justify any lessening of the culpability because of his mental
condition.
The trial court predicated its ruling upon the testimony of Dr. Knoll, Dr. Kumar, and the
victim’s parents.
The evidence concerning the defendant’s mental capacity conflicts. The trial court,
as the trier of fact, saw the witnesses and observed their demeanor. The court opted to
accredit the testimony of Dr. Kumar and the victim’s parents. In summary, the defendant
has failed to overcome the presumption of correctness afforded the trial court’s factual
findings. Tenn. Code Ann. § 40-35-401(d).
This issue is without merit.
D.
The trial court ordered the defendant to serve the two sentences consecutively.
This ruling of the court was based upon the provisions contained in Tenn. Code Ann. § 40-
35-115(b)(5). This statute provides that consecutive sentencing may be required if:
(5) The defendant is convicted of two (2) or more statutory
offenses involving sexual abuse of a minor with consideration
of the aggravating circumstances arising from the relationship
11
between the defendant and the victim or victims, the time span
of defendant’s undetected sexual activity, the nature and
scope of the sexual acts and the extent of the residual,
physical and mental damage to the victim or victims.
The defendant contends the trial court erred in ordering consecutive sentencing
pursuant to this code section. He argues the victim was not a minor. It is his theory the
term “minor” relates to the actual age of the victim -- under the age of eighteen years. The
state contends the statute applies in this case. The state argues the term “minor” includes
an adult who is mentally equivalent to a person under the age of eighteen years. Thus, this
court must determine whether the word “minor” as used in Tenn. Code Ann. § 40-35-
115(b)(5) refers to the chronological age and/or the mental age of the victim.
In 1989 the Tennessee General Assembly revised the penal code. The revision
included a section which contains the definitions of terms used in the penal code. Tenn.
Code Ann. § 39-11-106. This code section defines “minor” as “any person under eighteen
(18) years of age.” Tenn. Code Ann. § 39-11-106(a)(23)(emphasis added). In other
words, this definition encompasses the chronological age of a person. It does not
encompass an adult who has the mental capacity of a child under eighteen years of age.
Dictionaries define the word “minor” in terms of chronological age. Webster’s Ninth
Collegiate Dictionary defines the term “minor” as “[a] person who has not attained majority.”
Webster’s Ninth New Collegiate Dictionary 757 (1984). Black’s Law Dictionary defines
the term “minor” as “[a]n infant or person who is under the age of legal competence . . . .
A term derived from the civil law, which described a person under a certain age as less
than so many years.” Black’s Law Dictionary 689 (6th ed.)(emphasis added).
This court is of the opinion the term “minor,” as used in Tenn. Code Ann. § 40-35-
115(b)(5), means a person under the chronological age of eighteen years of age as
defined by the statute. The statute does not apply when the victim is over the age of
eighteen years even though the victim’s mental capacity is impaired and the victim has the
mental capacity equivalent to a small child.
The sentences in this case must be modified to show the sentences are to be
served concurrently rather than consecutively as the trial court ordered.
12
E.
The defendant vigorously argues the trial court abused its discretion by failing to
impose some form of alternative sentencing. He argues the trial court did not consider
probation or any other form of alternative sentencing notwithstanding the fact he was
presumed to be a favorable candidate for such a sentence.
The statute addressing the purposes of sentencing encompasses a provision
regarding alternative sentencing. Tenn. Code Ann. § 40-35-102(6). Subsection (6) states:
A defendant who does not fall within the parameters of
subdivision (5) and is an especially mitigated or standard
offender convicted of a Class C, D, or E felony is presumed to
be a favorable candidate for alternative sentencing options in
the absence of evidence to the contrary.
Thus, the trial court’s determination of the sentence to be imposed must necessarily
commence with the defendant’s entitlement to the presumption. As the Supreme Court
said: “If [the] determination is favorable to the defendant, the trial court must presume that
he is subject to alternative sentencing. If the court is presented with evidence sufficient to
overcome the presumption, then it may sentence the defendant to confinement according
to the statutory provision[s].” Ashby, 823 S.W.2d at 169 (emphasis added).
The presumption may be rebutted by the state. As this court said in Jernigan:
The presumption can be successfully rebutted by facts
contained in the presentence report, evidence presented by
the state, the testimony of the accused or a defense witness,
or any other source provided it is admissible evidence and
made a part of the record.
929 S.W.2d at 395-96.
In this case, the defendant was entitled to the presumption that he was a favorable
candidate for alternative sentencing. He was convicted of a Class E felony and was
sentenced as a standard offender. The length of the sentence was two years. Therefore,
the question presented is whether the state successfully rebutted the presumption.
The defendant has a history of prior convictions and criminal behavior. He has been
convicted of a weapons offense, assault, endangerment, committing criminal damage and
13
menacing. While the impact statement submitted by the victim’s mother contains hearsay,
she relates that the defendant had sexually abused an adopted daughter, an 86-year-old
relative, and others from his neighborhood.
The criminal conduct of the defendant has had a devastating effect upon the victim
and her family. The victim’s parents testified at the sentencing hearing. They detailed how
the family members had been affected, especially the victim. Besides the defendant’s prior
criminal convictions and behavior, there were three additional enhancement factors
supported by the record. The record does not support any mitigating circumstances.
This court finds the state successfully rebutted the presumption in favor of
alternative sentencing. Therefore, the trial court properly required the defendant to serve
the two sentences in confinement.
In this case, confinement is necessary to avoid depreciating the seriousness of
these offenses as well as to deter others from committing the same or similar offenses.
Tenn. Code Ann. § 40-35-103(1)(B). Sexual offenses are serious when, as here, the
defendant takes advantage of a victim who is mentally retarded due to Down’s Syndrome.
Furthermore, the dockets of this court and the decisions of the appellate courts are replete
with sex-related offenses, particularly sexual battery. In addition, measures less restrictive
than confinement have been applied to the defendant unsuccessfully in the past. Tenn.
Code Ann. § 40-35-103(1)(C).
This issue is without merit.
________________________________________
JOE B. JONES, PRESIDING JUDGE
CONCUR:
___________________________________
PAUL G. SUMMERS, JUDGE
___________________________________
WILLIAM M. BARKER, JUDGE
14
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|
679 A.2d 519 (1996)
Gardner W. MORRILL
v.
George R. MORRILL et al.
Supreme Judicial Court of Maine.
Argued March 6, 1996.
Decided July 17, 1996.
*520 Janet K. Kantz (orally), Thomas F. Hallett Law Offices, P.A., Portland, for Plaintiff.
Jeffrey T. Edwards (orally), Preti, Flaherty, Beliveau & Pachios, Portland, for Defendants.
Before WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD, DANA, and LIPEZ, JJ.
ROBERTS, Justice.
Gardner W. Morrill appeals from a judgment entered in the Superior Court (Cumberland County, Mills, J.) in favor of the defendants, George R. Morrill, Morrill's Auctions, Inc., and Maine Auto Dealers Exchange, Inc. The court granted a judgment as a matter of law to the defendants at the trial of Gardner's claim of tortious interference with an expected inheritance. Gardner argues that the court incorrectly ruled that he failed to establish an expectancy because of the absence of evidence of his parent's intestacy at the time of the alleged tortious conduct. We agree, and vacate the judgment.
Ruth and Gardner R. Morrill had three children, Gardner W., Roger, and George. Between 1981 and 1989, the father and mother made certain real estate and stock transfers to their son George. The father died on November 27, 1990, survived by his wife and children. On July 26, 1993, Gardner brought an action against the defendants alleging, inter alia, that George tortiously interfered with Gardner's expected legacy by inducing his parents to make the transfers.
At the trial, the defendants moved for a judgment as a matter of law arguing that (1) no evidence was introduced showing wrongful conduct by the corporate defendants, (2) Gardner failed to satisfy his burden of proving any wrongful conduct by George, and (3) Gardner failed to establish that he had an expected legacy at the time of the alleged tortious acts. The court granted the motion on the basis that Gardner failed to prove either that he had an expectancy to inherit through intestate succession or as a beneficiary of a will. The court reasoned that in order to establish an expectancy to inherit through intestate succession, Gardner had to prove that his parents were intestate during the alleged tortious conduct. This appeal followed.
I.
Before reaching the merits, we first address a procedural issue raised by the defendants. They argue that Gardner's failure to furnish us with a transcript of the trial proceedings precludes him from arguing on appeal that he had established the necessary elements to set forth a prima facie case of tortious interference with an expected inheritance. To prevail on such a claim, Gardner must establish that he had an expectancy of a benefit from a parent and that the defendant interfered with the expectancy by means of fraud or undue influence. Plimpton v. Gerrard, 668 A.2d 882, 885 (Me.1995); see also DesMarais v. Desjardins, 664 A.2d 840, 843 (Me.1995). Pursuant to M.R.Civ.P. 74(b)(1), as the appellant Gardner is responsible for providing "a transcript of such parts of the proceedings ... [as Gardner] deems necessary." See also C.N. Brown Co. v. Gillen, *521 569 A.2d 1206, 1209 n. 2 (Me.1990). We have stated that the appellant must provide the reviewing court with a sufficient record to permit adequate consideration of his contentions on appeal. State v. Butler, 627 A.2d 530, 531 (Me.1993).
The issue on appeal in this case is a narrow one, namely, whether the court erred in assigning to Gardner the burden of proving his parents' intestacy during the period of the alleged tortious interference. Gardner has provided a transcript of the hearing on the defendants' motion for a judgment as a matter of law establishing that the court's grant of the motion was based on Gardner's failure to prove his parents' intestacy. Contrary to the defendants' contention, a full trial transcript is not necessary for our review of this narrow question. The defendants were notified of Gardner's limited transcript order as well as the limited issue he would raise on appeal. When the defendants seek to argue on appeal for an alternative rationale for affirming the judgment, namely, that Gardner failed to prove undue influence or fraud, they must file and serve on Gardner a request for an additional transcript or be responsible for producing it themselves. M.R.Civ. P. 74(b)(3). Because the defendants pursued neither alternative, we address the single issue before us.
II.
There is no dispute that Gardner is one of three children of Gardner R. and Ruth. On appeal, Gardner argues that he has established an expectancy of inheritance based solely on that status. The defendants argue, as they did before the trial court, that Gardner must prove either (1) that his parents were intestate during the time of the alleged tortious interference or (2) that he would be a beneficiary pursuant to an existing will. The court's decision adopts the defendants' argument that in these circumstances Gardner must prove his parents' intestacy during the alleged tortious conduct to establish an expectancy.
This appeal requires us to focus on the expectancy element in a claim of wrongful interference with an expectancy. See Plimpton, 668 A.2d at 885 (Maine recognizes the tort of wrongful interference with an expected legacy or inheritance). "The essence of such a claim is that `but for the tortious interference of another, [the plaintiff] would in all likelihood have received a gift or specific profit from a transaction.'" DesMarais, 664 A.2d at 843 (quoting Harmon v. Harmon, 404 A.2d 1020, 1024 (Me. 1979)).[1] We have previously held that "[o]nce [a] will has been executed an expectancy has been created in the legatee." Harmon, 404 A.2d at 1022. Recognizing that there is no real distinction between gifts through inheritance and gifts through a revocable trust, courts in other jurisdictions have held that revocable trusts also create expectancies. Hammons v. Eisert, 745 S.W.2d 253, 257 (Mo.App.1988) (citing Davison v. Feuerherd, 391 So.2d 799, 801 (Fla.Dist.Ct. App.1980). These methods, however, are not the only means of establishing an expectancy. Simply by proving that he is their child and therefore a natural recipient of his parents' bounty, Gardner has established an expectancy of inheriting a portion of his parents' estate. Because he is their child, the existence vel non of a will is irrelevant to the issue whether an expectancy has been created. See Avery v. Whatley, 670 A.2d 922, 925 (Me.1996) (citing Plimpton, 668 A.2d at 886). Evidence concerning testacy, however, may be relevant to enhance or diminish the expectancy and to determine damages. The court erred as a matter of law in requiring Gardner to prove his parents' intestacy during the time in question.
The entry is:
Judgment vacated.
All concurring.
NOTES
[1] Section 774B of RESTATEMENT (SECOND) OF TORTS (1979) states: "One who by fraud, duress or other tortious means intentionally prevents another from receiving from a third person an inheritance or gift that he would otherwise have received is subject to liability to the other for loss of the inheritance or gift." Comment b to section 774B defines inheritance to include "any devise or bequest that would otherwise have been made under a testamentary instrument or any property that would have passed to the plaintiff by intestate succession."
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Case: 10-13124 Date Filed: 11/02/2012 Page: 1 of 5
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_____________________________
No. 10-13124
Non-Argument Calendar
_____________________________
D. C. Docket Nos. 1:08-cv-03532-CAP ; 1:04-cr-00571-CAP-CCH-1
JUAN CARLOS ACUNA,
Petitioner-Appellant,
versus
UNITED STATES OF AMERICA,
Respondent-Appellee.
_________________________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________________________
(November 2, 2012)
Before HULL, EDMONDSON, and BLACK, Circuit Judges.
PER CURIAM:
Case: 10-13124 Date Filed: 11/02/2012 Page: 2 of 5
Juan Carlos Acuna, a federal prisoner proceeding pro se, appeals the denial
of his 28 U.S.C. § 2255 motion to vacate. Acuna challenges his counsel’s failure
to call as witnesses the co-defendants who pleaded guilty. But Acuna knowingly
waived his right to contest his counsel’s effectiveness as to this matter. Upon the
district court’s inquiries, Acuna specifically agreed with his counsel’s decision not
to call the potential witnesses, acknowledging that it was based on his own -- apart
from counsel’s advice -- request. Acuna thus gave up his opportunity to have
them testify.
This Court has stated that ineffective assistance does not exist under
Strickland where the defendant ultimately concurred in his counsel’s tactical
decision or strategy. See Hammond v. Hall, 586 F.3d 1289, 1327-28 (11th Cir.
2009). In Ross v. Wainwright, 738 F.2d 1217 (11th Cir. 1984), defense counsel
largely elected not to contest guilt or present a defense. This Court said that,
based on “the repeated statements by counsel in discussing his strategy and the full
acquiescence of the defendant, . . . the district court did not err in concluding that
[the defendant] had waived his right to attack the effectiveness of counsel on
appeal.” Id. at 1222. Besides counsel’s statements, we noted that the petitioner’s
acquiescence in the discussions with respect to the nature of his counsel’s conduct
made the case one in which “mere assent in response to a series of questions from
2
Case: 10-13124 Date Filed: 11/02/2012 Page: 3 of 5
the bench constitute[s] an adequate waiver” of ineffective assistance of counsel
claims. Id. at 1221 (quotations omitted).
Acuna was not prejudiced by his counsel’s decision not to call as witnesses
the co-defendants because Acuna essentially waived his right to contest his
counsel’s ineffectiveness on that decision by agreeing with that choice at trial. See
Hammond, 586 F.3d at 1327-28; Wainwright, 738 F.2d at 1221-22. After Acuna’s
counsel informed the district court that he would not call the co-defendants and
other witnesses, who were available in the courthouse, the district court
specifically informed Acuna that he (not his counsel) had the right to present
evidence and witnesses. Acuna acknowledged that he understood his rights and
his counsel’s decision; and, upon the district court’s further inquiry after a single
witness testified, Acuna confirmed that it was his decision to call no more
witnesses. When both parties rested, Acuna again indicated that he had decided to
present no more evidence. Moreover, following the closing arguments, Acuna
verified that his counsel decided not to call the co-defendants as witnesses after
consulting with Acuna and that he had requested that they not testify. Because
Acuna fully participated in the decision not to have the witnesses testify -- while
knowing of the potential exculpatory nature of their testimonies -- and given his
3
Case: 10-13124 Date Filed: 11/02/2012 Page: 4 of 5
responses to the district court’s questions concerning that decision, he waived his
right to attack his counsel’s effectiveness on this point.
Besides, the record affirmatively contradicts Acuna’s allegation that he
suffered from -- was prejudiced by -- reliance on his counsel’s advice, as
ultimately Acuna himself decided not to call the co-defendants based on the risk to
his father’s defense. Acuna confirmed that his counsel had not unduly influenced
that decision. Therefore, the district court correctly concluded that it was not
reasonably probable that Acuna would have called the co-defendants to testify,
and that, indeed, Acuna himself finally decided that they would not testify.
In addition, the record does not support Acuna’s allegations that his counsel
relied on another person’s counsel’s advice and failed to investigate reasonably the
co-defendants’ prospective testimonies. Acuna’s counsel was aware of the
potential exculpatory nature of the co-defendants’ testimonies for Acuna and their
potential incriminating impact on Acuna’s father. Counsel expressed in open
court that, despite advising Acuna of the possibly exonerating testimonies, Acuna
did not want to call the co-defendants as witnesses because they could harm his
father’s defense. Given that Acuna did not object to these statements by counsel
(but agreed with them) the record shows that counsel’s actions were properly
4
Case: 10-13124 Date Filed: 11/02/2012 Page: 5 of 5
based on informed choices made and information supplied by Acuna.
Accordingly, Acuna’s ineffective assistance of counsel claim is without merit.
AFFIRMED.
5
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Case: 12-10584 Document: 00512128364 Page: 1 Date Filed: 01/29/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 29, 2013
No. 12-10584
Summary Calendar Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
ALEXANDER JAMES BAKER, also known as Alex,
Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:11-CR-193-4
Before DAVIS, BARKSDALE, and ELROD, Circuit Judges.
PER CURIAM:*
Alexander James Baker appeals the district court’s imposing a 128-month
imprisonment sentence following his guilty-plea conviction of conspiracy to
possess with intent to distribute a controlled substance. Baker contends the
district court erred: procedurally, by determining drug quantity based upon
unreliable evidence and improper use of the multiplier method; and
substantively, by sentencing him unreasonably based upon an estimated drug
quantity not supported by reliable evidence.
*
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: 12-10584 Document: 00512128364 Page: 2 Date Filed: 01/29/2013
No. 12-10584
Although post-Booker, the Sentencing Guidelines are advisory only, and
a properly preserved objection to an ultimate sentence is reviewed for
reasonableness under an abuse-of-discretion standard, the district court must
still properly calculate the Guideline-sentencing range for use in deciding on the
sentence to impose. Gall v. United States, 552 U.S. 38, 48-51 (2007). In that
respect, for issues preserved in district court, its application of the Guidelines is
reviewed de novo; its factual findings, only for clear error. E.g., United States v.
Cisneros-Gutierrez, 517 F.3d 751, 764 (5th Cir. 2008); United States v. Villegas,
404 F.3d 355, 359 (5th Cir. 2005).
Although drug quantity was not specified in Baker’s indictment,
“quantities of drugs not specified in the count of conviction may be considered
in determining the [advisory Guidelines] offense level”. U.S.S.G. § 2D1.1 cmt.
n.12 (2011). “Where there is no drug seizure or the amount seized does not
reflect the scale of the offense, the court shall approximate the quantity of the
controlled substance.” Id. When estimating drug quantity, the court “may
extrapolate the quantity from any information that has sufficient indicia of
reliability to support its probable accuracy”. United States v. Valdez, 453 F.3d
252, 267 (5th Cir. 2006) (internal quotation marks omitted). Estimates need not
be precise. E.g., United States v. Alford, 142 F.3d 825, 831-32 (5th Cir. 1998)
(reliance on imprecise testimony of drug amounts for total amount-calculation
not clear error).
Considering the various drug-quantity estimates set forth by the parties
and the record as a whole, the court’s determining Baker was responsible for at
least 500 grams of methamphetamine, resulting in a 32-level base offense, is
plausible and, thus, not clearly erroneous. U.S.S.G. § 2D1.1(c)(4); see, e.g.,
United States v. Betancourt, 422 F.3d 240, 246-47 (5th Cir. 2005). Therefore,
there was no procedural error.
Baker relies solely upon the above-discussed drug-quantity challenge to
contend his sentence is substantively unreasonable. Because the district court
2
Case: 12-10584 Document: 00512128364 Page: 3 Date Filed: 01/29/2013
No. 12-10584
did not err in its drug-quantity calculation, Baker’s sentence, which was within
the advisory Guidelines sentencing range of 108 to 135 months, is presumed
reasonable. See United States v. Mondragon-Santiago, 564 F.3d 357, 360 (5th
Cir. 2009).
AFFIRMED.
3
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635 F.2d 391
81-1 USTC P 9159
UNITED STATES of America and Octavio Saldana, Plaintiffs,United States of America, Plaintiff-Appellant,v.FIRST NATIONAL BANK IN DALLAS and Bank of the Southwest,Defendants-Appellees,Dr. James A. Yeoham, etc. et al., Intervenors-Appellees.
No. 79-2420.
United States Court of Appeals,Fifth Circuit.
Unit A
Jan. 26, 1981.
M. Carr Ferguson, Asst. Atty. Gen., Gilbert E. Andrews, Carleton D. Powell, James A. Riedy, Tax Div., Dept. of Justice, Washington, D.C., for plaintiff-appellant.
Leon Crum, Dallas, Tex., Richard O. Werlein, College Station, Tex., for Yeoham, et al.
Dwight R. Mann, Philip Stewart, Dallas, Tex., for First Nat'l Bank in Dallas.
Kenneth M. Stohner, Dallas, Tex., for Bank of the Southwest.
Appeal from the United States District Court for the Northern District of Texas.
Before INGRAHAM, GEE and TATE, Circuit Judges.
TATE, Circuit Judge:
1
The United States (Internal Revenue Service) appeals from a decision of the district court which denied enforcement of four Internal Revenue Service (IRS) summonses issued to three banks. 468 F.Supp. 415 (N.D.Tex.1979). The stated purpose of these summonses, sought under sections 7402(b) and 7604(a) of the Internal Revenue Code of 1954, was to facilitate an audit of the 1976 joint tax return of Dr. and Mrs. James A. Yeoham. However, as the evidentiary hearing showed, the return was selected for audit to develop data to be used for research in the Internal Revenue Service's Taxpayer Compliance Measurement Program (TCMP). Because we find that the IRS has the statutory power under 26 U.S.C. § 7602 to issue summonses where one good-faith purpose is to ascertain the correctness of specific tax returns, we reverse the decision of the district court. (In rejecting identical contentions by taxpayers, the Eighth Circuit has recently reached the same conclusion as we do. United States v. Flagg, 634 F.2d 1087, (8th Cir., 1980).)
Context Facts
2
The IRS selected the Yeohams' 1976 tax return for audit pursuant to the Taxpayer Compliance Measurement Program, which is a research program primarily designed to measure accuracy in filing federal tax returns. As an integral facet of this program, the taxpayers' return is scrutinized for potential errors. If the tax liability is ascertained to be either understated or overstated on the return, the respective collection or repayment is then undertaken.1
3
In conducting its investigation, the IRS issued four summonses to the three defendant banks for their records pertaining to the accounts of Dr. James A. Yeoham and Mrs. Velma Yeoham (taxpayers on joint return), their children, and Dr. James A. Yeoham, a Professional Association. In the opinion of the IRS agent conducting the audit, these records were needed to assure a thorough investigation.
4
Dr. Yeoham directed the three banks not to comply with the summonses, as is permissible under section 7609(b)(2) of the Internal Revenue Code of 1954. The IRS thereafter, through its agent Saldana, instituted proceedings in district court to seek enforcement of the summonses.
5
The district court refused to enforce the summonses. It concluded that the IRS had exceeded its statutory authority by issuing summonses pursuant to a TCMP audit, an audit conducted "primarily for research purposes." In reaching its conclusion, the district court relied principally on this court's holding in United States v. Humble Oil & Refining Co., 488 F.2d 953 (5th Cir. 1974), vacated and remanded, 421 U.S. 943, 95 S.Ct. 1670, 44 L.Ed.2d 97 (1975), aff'd. per curiam, 518 F.2d 747 (5th Cir. 1975). The district court found that Humble stood for the proposition "that the IRS is not allowed by law to examine returns for the purpose of carrying on research." 468 F.Supp. at 416. In denying the enforcement of the summonses, the district court opined: "As Dr. Yeoham's return was selected primarily for research purposes, this court is compelled to conclude that Humble is controlling ...." Id. at 417.
6
We disagree.
7
Before noting the reasons for the non-application of the Humble holding to the differing factual circumstances before us, we will briefly summarize (1) the statutory framework under which the IRS is allowed to audit taxpayers' returns and (2) the nature of the Taxpayer's Compliance Measurement Program.
Authority to Audit
8
Section 7601(a) of the Internal Revenue Code of 1954 gives the IRS the authority to ascertain the tax liability of all persons who may be liable to pay any Internal Revenue tax. This section reads as follows:
9
The Secretary or his delegate shall, to the extent he deems it practicable, cause officers or employees of the Treasury Department to proceed, from time to time, through each internal revenue district and inquire after and concerning all persons therein who may be liable to pay any internal revenue tax, and all persons owning or having the care and management of any objects with respect to which any tax is imposed.
10
Section 7602 gives the IRS a more specific grant of authority. By it, the IRS is empowered to examine records and witnesses (secured by summonses, if necessary) for the purpose of determining the correctness of returns and the liability of those who fail to make returns. In essence, section 7602 gives the IRS the necessary tools to effect the broad mandate of section 7601. Section 7602 reads as follows:
11
For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax ... or collecting any such liability, the Secretary or his delegate is authorized-
12
(1) To examine any books, papers, records, or other data which may be relevant or material to such inquiry;
13
(2) To summon the person liable for tax or required to perform the act, or any officer or employee of such person, or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax or required to perform the act, or any other person the Secretary or his delegate may deem proper, to appear before the Secretary or his delegate at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and
14
(3) To take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry. (Italics ours.)
Taxpayers Compliance Measurement Program
15
The enforceability of an IRS summons pursuant to a TCMP audit was the subject of a recent opinion in United States v. Flagg, 634 F.2d 1087 (8th Cir. 1980). There the court gave the following description of the TCMP:
16
The Taxpayer Compliance Measurement Program is designed to measure and evaluate how taxpayers comply with the Internal Revenue Code reporting requirements. Under this program, a number of taxpayers are randomly selected by computer. The IRS then makes an extensive examination of these taxpayers' returns in order to ascertain the correctness of their returns. The examinations are in-depth and more extensive than ordinary audits. The results of these audits, in addition to being used in the courts with normal IRS enforcement procedures (such as providing a refund for excess payments or assessing a deficiency for taxes due) are used as data for the TCMP research program, the purpose of which is to improve the overall efficiency of the administration of the income tax law.
17
The TCMP is a quality control program which attempts to pinpoint those areas of the tax law where errors will be most frequently made in filing a return. In order to implement the TCMP, an unbiased, random sample of the correctness of several thousand individual taxpayers' returns is needed to form the proper statistical data base. The IRS, by extensively auditing these returns, can predict which areas of the tax law millions of United States taxpayers may be having difficulty complying with. In so doing, the IRS can obviate the need to engage in costly, extensive examinations of taxpayers in areas of the tax law where the TCMP has shown that taxpayers encounter little difficulty. The TCMP thus aids the IRS is determining those areas of tax administration into which it should concentrate its limited enforcement resources. Both the taxpayers and the IRS gain from the efficiencies resulting from the TCMP.
Id. at 1088-1089
18
As in Flagg, the taxpayers do not challenge the authority of the IRS pursuant to section 7601 to establish the TCMP, nor could they. Id. at 1090.
I.
19
The taxpayers contend (and the district court so held) that summonses should not be enforced when the IRS investigation is being conducted primarily for research purposes. Nevertheless, the district court implicitly recognized that the IRS may conduct research in its effort to effectuate the purposes of Sections 7601 and 7602. Indeed, this circuit has already recognized that research is a legitimate tool for the IRS to utilize in carrying out its broad mandate to both investigate and audit. United States v. Humble Oil & Refining Company, supra; United States v. Carter, 489 F.2d 413 (5th Cir. 1973), rehearing denied, 504 F.2d 428 (5th Cir. 1974).2
20
As was stated earlier, the district court in the present case based its holding on this court's decision in United States v. Humble Oil & Refining Company, supra. There, the IRS had issued a "John Doe" summons to Humble Oil & Refining Company directing it to produce records for 1970 pertaining to mineral leases surrendered during the year. The information sought by the IRS was needed for "research" in the local industry to measure tax compliance and then to take corrective action, if necessary. At the time the summons was issued to Humble, the IRS had not instigated an investigation of any of Humble's lessors.
21
This court ruled that, while section 7601 granted the IRS wide latitude to make general inquiries concerning all taxpayers, including conducting the type of research then in question, the IRS's authority to issue summonses under section 7602 was more limited. Absent an investigation of specific taxpayers, the IRS was found to lack the authority to issue summonses under section 7602.
22
The United States Supreme Court granted the IRS's petition for certiorari, vacated the judgment and remanded Humble for further consideration, in light of United States v. Bisceglia, 420 U.S. 141, 142, 95 S.Ct. 915, 917, 43 L.Ed.2d 88 (1975). In Bisceglia, the Supreme Court found that "John Doe" summonses were permissible in aid of a particularized investigation,3 carefully noting that the section 7602 summons power should not be used to conduct "fishing expeditions." 95 S.Ct. at 921.
23
On remand, this court distinguished the "John Doe" summons in Humble from that in Bisceglia, noting that the summons in Humble had not been issued to facilitate any ongoing, particularized investigation. 518 F.2d at 748. Furthermore, this court concluded: "(T)he information (on the lessors) was sought from Humble to expedite research on an IRS project concerning compliance with the lease restoration requirements of the Internal Revenue Service. An adjustment of tax liability may have incidentally resulted from the project, but the primary purpose of the project was research." 518 F.2d at 748.
24
In the instant case, the lower court apparently read the above statement in Humble to mean that the summons authority granted by section 7602 could not be used if the investigation was conducted primarily for research purposes,4 even though one of the purposes of the investigation was to ascertain the tax liability of a particular taxpayer. The district court misinterpreted our decision in Humble. We hold, as we indicated in Humble,5 that information obtained pursuant to a summons issued under section 7602 may be used for research purposes if the summons is issued in aid of an investigation of the tax liabilities of a specific taxpayer or of an unknown taxpayer where there is an ongoing, particularized investigation. See Note 3, supra.
25
The essence of the Humble holding, thus, was not that a summons could not be enforced where the investigation of a taxpayer's return was conducted primarily for research, but rather was that a particularized investigation (based on specific facts or specific taxpayers) was there non-existent. Contrasted to the facts before us, there is such an ongoing investigation that had been instigated by the IRS with at least one purpose being to ascertain the correctness of the defendant taxpayers' 1976 return, a purpose expressly authorized by section 7602.
26
Section 7602 should not be read so narrowly as to imply that an audit for a purpose authorized by it must be restricted solely to that purpose and may not be utilized as a good-faith effort to obtain ancillary data. To do so would be to deny effect to the congressional intent of section 7601, i. e., to insure the general workability of the federal taxation system. Thus, the IRS may issue summonses for research purposes as long as the summons is based in good faith upon a section 7602 purpose, even though motivated more generally by an investigative or research purpose within the contemplation of section 7601. See Flagg, supra.
II.
27
A section 7602 summons may be issued to gain data that will subsequently be used for research purposes, where the summons is also issued for a purpose authorized by the statute; but the summons must still be issued in good faith. United States v. Harris, 628 F.2d 875, 879 (5th Cir. 1980). In United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 255, 13 L.Ed.2d 112 (1964), the Supreme Court announced several elements of a good faith exercise: "(The IRS) must show that the investigation will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to the purpose, that the information sought is not already within the (IRS's) possession, and that the administrative steps required by the Code have been followed ...." 85 S.Ct. at 255.
28
Furthermore, the court in Powell proceeded to suggest what would constitute bad faith on the part of the IRS: "(A)n abuse would take place if the summons had been issued for an improper purpose, such as to harass the taxpayer or to put pressure on him to settle a collateral dispute, or for any other purpose reflecting on the good faith of the particular investigation." 85 S.Ct. at 255. See, e. g., United States v. Harris, supra. The taxpayer in the instant case does not allege on appeal that the IRS acted in bad faith of this nature in issuing the summonses in conjunction with the TCMP.
Conclusion
29
The enforcement of the summonses was sought for a stated purpose of examining the correctness of the specified tax return of named taxpayers. Their issuance is thus expressly authorized by section 7602 of the Internal Revenue Code. The circumstance that the audit was motivated to obtain research data, where the summonses are sought in good faith for a purpose authorized by section 7602, does not authorize the courts to deny their enforcement as thus issued within the statutory authority conferred upon the Internal Revenue Service by section 7602. Accordingly, we REVERSE and REMAND, with instructions to the district court to order enforcement of the summonses at issue.
30
REVERSED AND REMANDED.
1
Additionally, if the investigating agent believes that fraudulent entries were made on the tax return, it is then referred to the Criminal Investigation Division
2
In Carter, this court was faced with an analogous situation to that before us now. There, the IRS had issued a summons pursuant to the Tax Preparers Project, a research program designed to check for fraudulent tax preparers
In distinguishing Humble, the Carter court stated:
In Humble Oil there was an investigation for the purpose of discovering criminal activity. In Carter there was research, not so much to unearth criminal activity on the part of the taxpayer or even the tax preparer, but more to protect the consumer and, incidentally, to ensure that the United States received all of the funds it was entitled to receive.
504 F.2d at 429.
3
The Supreme Court in Bisceglia was confronted with determining the enforceability of a "John Doe" summons issued by the IRS to a bank to discover the identity of a person who had deposited 400 deteriorated $100 bills with the bank within the space of a few weeks. These transactions suggested the possibility of liability for unpaid taxes. The Court ruled that the summons was enforceable because it was issued to aid an ongoing investigation
4
The district court's characterization of a TCMP audit as one being conducted "primarily for research purposes" is subject to question. It is unnecessary to categorize a multi-purpose summons into its primary purpose, secondary purpose, etc. If a multi-purpose summons is issued pursuant to a legitimate purpose under section 7602, it is enforceable
The United States Supreme Court has already spoken to situations in which the IRS is conducting an audit with a dual purpose. In United States v. LaSalle National Bank, 437 U.S. 298, 98 S.Ct. 2357, 57 L.Ed.2d 221 (1978), the Supreme Court enforced an IRS summons which had been issued for a dual purpose, i. e., both a civil and a criminal investigation. See, e. g., United States v. First National Bank of Atlanta, 628 F.2d 871 (5th Cir. 1980). The statutory grant of authority for the issuance of this summons in LaSalle was found in section 7602, since one of the purposes of the summons was to ascertain the correctness of the tax return. The Supreme Court nevertheless made it quite clear that a section 7602 summons issued solely for a criminal investigation would be unenforceable. 98 S.Ct. at 2367, n. 18.
It follows that a section 7602 summons issued for a dual purpose, one being to ascertain the correctness of the taxpayers' return (as expressly authorized by section 7602) and the other being to assemble research data from the present and other randomly drawn returns, should likewise be enforceable; even though the IRS might lack the statutory power to issue a section 7602 summons for the sole purpose of assembling research data, Humble Oil & Refining Company, supra.
5
"(W)e hold that the Internal Revenue Service is not empowered by section 7602 to issue a summons in aid of its section 7601 research projects or inquiries, absent an investigation of taxpayers or individuals and corporations from whom information is sought." Humble, 488 F.2d at 962-63 (Italics ours)
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
OCT 31 2001
FOR THE TENTH CIRCUIT
PATRICK FISHER
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 01-1167
(D.C. No. 95-CR-334-Z)
CLIFTON HENRY VERETTO, also (D. Colo.)
known as Clifton Henry Deretto,
Defendant-Appellant.
ORDER AND JUDGMENT *
Before TACHA , Chief Judge, BALDOCK , Circuit Judge, and BRORBY Senior
Circuit Judge.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Defendant Clifton Henry Veretto was initially convicted of one count of
being a felon in possession of a firearm, and a fugitive from justice in possession
of a firearm. 18 U.S.C. §§ 922(g)(1), (2). He received a sentence of twenty-one
months’ imprisonment, followed by a period of supervised release of three years.
After Mr. Veretto had served his prison sentence, the government filed a petition
to revoke his supervised release based on five separate violations of its terms.
Mr. Veretto admitted to four of the violations in open court. The district court
revoked his supervised release, and sentenced him to a term of imprisonment of
twenty-four months. He now appeals, raising several procedural and substantive
challenges to the sentence awarded upon revocation.
Mr. Veretto’s counsel has filed a brief pursuant to Anders v. California ,
386 U.S. 738 (1967), and has moved for leave to withdraw as counsel.
Mr. Veretto has filed a response in which he raises three other issues relating to
his sentence and the revocation procedure. For the reasons set out below, we
grant counsel’s motion to withdraw and dismiss the appeal. 1
1
Anders holds that if counsel finds a case to be wholly frivolous after
conscientious examination, he may so advise the court and request permission to
withdraw. Counsel must also submit to the court a brief referring to anything in
the record arguably supportive of the appeal. The brief is then served upon the
client, who may then raise any point he chooses, and this court thereafter
undertakes a complete examination of all proceedings and decides whether the
appeal is in fact frivolous. If it so finds, it may grant counsel’s request to
withdraw and dismiss the appeal. Anders , 386 U.S. at 744.
-2-
Mr. Veretto’s original firearms conviction was a Class “C” felony.
Therefore, the maximum sentence the district court could award for a violation of
the terms of his supervised release was two years. 18 U.S.C. § 3583(e)(3).
A Guideline policy statement suggests a sentence of six to twelve months
for a Grade “C” supervised release violation for a defendant who fits within
criminal history category IV. U.S. Sentencing Guidelines Manual § 7B1.4 (2000)
(revocation table). The district court determined, based on Mr. Veretto’s
repeated violations of the terms of supervised release, that an upward departure
from this range was required. It mistakenly believed, however, that it could
depart upward to a statutory maximum sentence of six years. The district court
stated:
I think the Court to protect the public might very well go up to
as much as six years, but I’m not going to do that.
***
[I]t’s been argued by [counsel] that [Mr. Veretto] has not had
any violations of law, and for this reason I’m not going to go up to
the six years.
***
The Court will at this time order that there shall be an upward
departure from the 12 months at the top of the range to a period –
I’m just going to double that to a period of two years.
R., Vol. 2 at 27-28.
-3-
Despite its misconception about the statutory maximum sentence, the
district court awarded a sentence within the two-year statutory maximum. The
government concedes the legal error but argues it was harmless.
We need not decide how this issue would be resolved if it had come to us
properly preserved in the district court. This issue was not preserved for review
and we can therefore review it only for plain error. Fed. R. Crim. P. 52(b).
Reversal is only warranted for plain error if there is “(1) an error; (2) that is plain
or obvious; [which] (3) affects substantial rights; and [(4)] seriously affect[s] the
fairness, integrity[,] or public reputation of judicial proceedings.” United States
v. Hishaw , 235 F.3d 565, 574 (10th Cir. 2000), cert. denied , 121 S. Ct. 2254
(2001).
Mr. Veretto has failed to carry his burden of showing that the district court
committed plain error. See United States v. Olano , 507 U.S. 725, 741 (1993)
(stating defendant has burden of showing plain error under Rule 52(b)). First,
the resulting sentence did not exceed the statutory maximum. Second, the district
court’s statements at sentencing make it quite clear it intended a substantial
upward departure from the top of the guideline range. The district court tied this
departure to the guideline amount, mathematically, by doubling the guideline
maximum. It did not explicitly tie the length of the sentence to an erroneous view
of the statutory maximum sentence.
-4-
Although the district court was mistaken about the law, Mr. Veretto has
failed to show that the error seriously affected the fairness or integrity of the
proceedings. Under these circumstances, no useful purpose could be served by
remanding his case to the district court for resentencing. See United States v.
Fallin , 946 F.2d 57, 58 (8th Cir. 1991).
The remaining issues raised here lack merit. In the Anders brief, counsel
suggests that Mr. Veretto could argue he was misled into admitting his violations
of supervised release by an erroneous statement in the supervised release report.
The report stated that the maximum sentence he faced was three years, rather than
two. Mr. Veretto does not argue, however, that he would not have admitted to the
violations had he known that he only faced a two-year maximum sentence. Nor
does he deny committing the violations with which he was charged. He has failed
to show prejudice from the error.
In Mr. Veretto’s response to the Anders brief, he argues that the district
court denied him due process by failing to advise him in advance that it intended
to depart upward. Such an advisement is not required where the district court
departs upward from a Chapter 7 policy statement, however. United States v.
Burdex , 100 F.3d 882, 885 (10th Cir. 1996).
Mr. Veretto also argues that the district court failed to consider factors
relevant to the length of his sentence as required by 18 U.S.C. § 3583(e). A
-5-
district court is not required to consider individually each of these factors prior to
issuing a sentence. See Burdex , 100 F.3d at 886. We have reviewed the
sentencing transcript and conclude that the district court’s discussion of the
factors was sufficient to meet the statutory requirements, and that the district
court did not abuse its discretion in departing upwardly as it did.
Finally, Mr. Veretto argues that the district court did not provide an
adequate statement of reasons for imposing its sentence, 18 U.S.C. § 3553(c), and
failed to adequately consider his need for educational or vocational training,
medical care, or other correctional treatment, see id. § 3553(a)(2)(D). Our review
persuades us that the district court’s statement of reasons was adequate. The
district court explicitly encouraged Mr. Veretto to improve himself during his
time in prison by taking whatever seminars and courses would be helpful for him,
and indicated a willingness to sign an order requiring that Mr. Veretto receive
treatment for his back problems. See R., Vol. 2 at 30; see also id. , Vol. 1, doc. 65
at 2 (sentencing minute order recommending that “defendant receive medical
treatment for his back, if any is necessary”).
The appeal is DISMISSED. Counsel’s motion to withdraw is GRANTED.
Entered for the Court
Deanell Reece Tacha
Chief Judge
-6-
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17 F.3d 1553
62 USLW 2570, Fed. Sec. L. Rep. P 98,109
C.L. GRIMES and G.W. Holbrook, on their own behalf and onbehalf of all persons similarly situated, Appellantsv.VITALINK COMMUNICATIONS CORPORATION; Network SystemsCorporation; Leslie G. Denend; J. DanielMcCranie; Charles J. Abbe; Harry T.Rein; Lyle D. Altman.
No. 93-1268.
United States Court of Appeals,Third Circuit.
Argued Oct. 8, 1993.Decided March 9, 1994.Sur Petition for Rehearing April 6, 1994.
Thaddeus Holt (argued), Kittredge, Donley, Elson, Fullem & Embrick, Philadelphia, PA, counsel for appellants C.L. Grimes and G.W. Holbrook.
Steven J. Rothschild (argued), Skadden, Arps, Slate, Meagher & Flom, Wilmington, DE, counsel for appellees Vitalink Communications Corporation, Network Systems Corporation, Leslie G. Denend, J. Daniel McCranie, Charles J. Abbe, Harry T. Rein, Lyle D. Altman.
Before: HUTCHINSON, COWEN and NYGAARD Circuit Judges.
OPINION OF THE COURT
COWEN, Circuit Judge.
1
This case presents the question whether a state court has the power to allow parties as part of a comprehensive court-approved settlement to release exclusive federal securities law claims arising from the same transaction or occurrence as the state law matters before it, even though the state court would not have jurisdiction to hear the federal claims in the first instance. A subsidiary issue presented is whether a non-resident owner of corporate stock who tendered his shares to the Delaware corporation in response to a proxy offer following a merger transaction had sufficient minimum contacts to be bound by the settlement and release entered into on behalf of the plaintiff class of shareholders by a Delaware state court. Answering both questions in the affirmative, we will affirm the district court.
I.
2
The complicated background giving rise to this lawsuit in federal court started with a merger agreement between two Delaware corporations. Vitalink Communications Corporation ("Vitalink") was a manufacturer of computer internetworking products known as wide area bridges. Network Systems Corporation ("Network"), a manufacturer of data communications equipment which connects mainframe computers, minicomputers, and computer networks, entered into a merger agreement on May 6, 1991, by which it would acquire the stock of Vitalink. It is not necessary for purposes of this opinion to lay out precisely the intricate details of the merger negotiations and the final agreement, other than to note that Network ultimately agreed to pay $10.50 in cash for each share of outstanding Vitalink stock.
3
On May 13, 1991, Leslie G. Denend, President of Vitalink, sent a letter to all stockholders stating that the Vitalink Board of Directors had unanimously approved the merger, indicating that the Board of Directors believed the terms of the merger were fair, and recommending that the stockholders accept the offer. The plaintiffs in this action, C.L. Grimes, a Pennsylvania resident, and G.W. Holbrook, a Connecticut resident, were among the Vitalink stockholders.
4
Shortly after the merger agreement was announced seven state law actions were commenced, four in Delaware and three in California. The plaintiffs in these cases alleged that the Vitalink defendants breached their fiduciary duties and that the Network defendants aided and abetted the Vitalink defendants in doing so. The Delaware cases were consolidated and the parties engaged in expedited discovery. Within several days of commencing discovery, the parties agreed to a settlement. The California and Delaware plaintiffs entered into a Stipulation and Agreement of Compromise, Settlement and Release on June 13, 1991. They agreed to settle the dispute and release all claims arising from the merger transaction1 in exchange for a ten-day extension of the merger offer, a reduction in the amount payable to Network under a stock option agreement if a third party made an offer for Vitalink, and for an amendment limiting the reimbursement of Network's fees by Vitalink in the event the merger agreement was terminated. In addition, the defendants agreed not to oppose an application by plaintiffs' counsel for an award of attorneys' fees not to exceed $275,000, and expenses not greater than $25,000.
5
The merger was completed on July 1, 1991, when Vitalink became a wholly owned subsidiary of Network. Vitalink shares that were not tendered were converted into the right to receive $10.50 per share or to seek appraisal. A notice of the completed merger was sent by Vitalink to all shareholders on July 11, 1991. In that letter, stockholders were given the option of surrendering their shares to the paying agent in exchange for $10.50 in cash per share, or to seek appraisal of the shares pursuant to Delaware corporation law. Mr. Holbrook tendered his shares in response to the letter from Vitalink, while Mr. Grimes did not do so.
6
On July 18, 1991, the Delaware Court of Chancery certified the Vitalink stockholders as a non-opt-out settlement class pursuant to Court of Chancery Rule 23(b)(1) and (2).2 This class, consisting of all persons who owned Vitalink common stock between May 6, 1991 and July 1, 1991, included plaintiffs Grimes and Holbrook. A notification letter was sent to all class members discussing the pending class action litigation, describing the settlement benefits to the class, indicating that all class members had an opportunity to oppose settlement, and notifying the class of the date of the settlement hearing. Upon receiving written notice, a group of stockholders including Grimes filed objections to the settlement and presented argument at the subsequent hearing. Mr. Grimes and the other objectors argued that the interests of the stockholders were not adequately represented by the class representatives and that the settlement agreement did not result in any material benefits for the class. Mr. Holbrook did not enter an appearance in the Delaware state court proceedings and never opposed settlement of the class action claims.
7
The Delaware Court of Chancery approved the settlement by memorandum opinion issued on November 8, 1991. See In re Vitalink Communications Corp. Shareholders Litig., [1991-92 Transfer Binder] Fed.Sec.L.Rep. (CCH) p 96,585, 1991 WL 238816 (Del.Ch. Nov. 8, 1991). Mr. Grimes and the other objectors appealed this decision to the Delaware Supreme Court, which affirmed the Court of Chancery in an unpublished disposition without opinion. See Grimes v. John P. McCarthy Profit Sharing Plan, 610 A.2d 725 (Del.1992) (table). In a petition for certiorari, Mr. Grimes argued that the Delaware court proceedings violated due process because the court did not develop a sufficient record to consider whether absent class members were adequately represented. The Supreme Court denied this petition on October 5, 1992. Grimes v. John P. McCarthy Profit Sharing Plan, --- U.S. ----, 113 S.Ct. 179, 121 L.Ed.2d 124 (1992).
8
Prior to the disposition of the writ of certiorari, Grimes and Holbrook filed the present action in the U.S. District Court for the Eastern District of Pennsylvania. In this case, the plaintiffs alleged that the defendants violated their duty of disclosure pursuant to sections 10(b) and 14(e) of the Securities Exchange Act of 1934. See 15 U.S.C. Secs. 78j & 78n(e) (1988). Federal courts have exclusive jurisdiction over suits alleging violations of these securities law provisions. 15 U.S.C. Sec. 78aa (1988);3 Cramer v. General Tel. & Elecs. Corp., 582 F.2d 259, 270 n. 15 (3d Cir.1978), cert. denied, 439 U.S. 1129, 99 S.Ct. 1048, 59 L.Ed.2d 90 (1979). In addition, the plaintiffs complained that the procedures employed by the state courts in resolving the Delaware action denied them due process of law.
9
Vitalink, Network, and the other defendants moved the district court to dismiss the federal action based on the judgment in the Delaware action. In essence, they argued that the state court approved a release of all claims arising from the merger, including exclusive federal claims, and that the federal court was required to adhere to that judgment consistent with full faith and credit.4 Grimes and Holbrook opposed dismissal of their suit and requested the district court to treat the motion as one for summary judgment. Likewise, they moved the district court for partial summary judgment and submitted several supporting documents to the court.
10
In a memorandum opinion dated February 27, 1993, the district court denied plaintiffs' partial motion for summary judgment and granted defendants' motion for summary judgment. Grimes v. Vitalink Communications Corp., No. 92-2722, 1993 WL 56032 (E.D.Pa. Feb. 27, 1993). The district court ruled that the legal doctrines of collateral estoppel and release bar the federal court from considering the alleged violations of federal securities law stemming from the merger. Id. at *2-5 First, the district court found that the plaintiffs in this case were members of the non-opt-out state court class who were bound by the broad release approved by the Delaware Court of Chancery. Id. at *2-4 Second, and alternatively, the district court held that this federal securities case is barred by the collateral estoppel effect of the Delaware judgment because the predicate facts that underlie the federal case, which primarily involve issues of nondisclosure, overlap significantly with facts conclusively established in the state court proceeding. Id. at *4-5 Finally, the district court also examined the federal plaintiffs' allegation that they were denied due process in the state court proceedings and concluded that this claim was not meritorious. Id. at * 5-6.II.
11
The district court had jurisdiction over this case pursuant to section 27 of the Securities Exchange Act of 1934. 15 U.S.C. Sec. 78aa. By granting the defendants' motion for summary judgment, the district court ordered the case dismissed. We have appellate jurisdiction pursuant to 28 U.S.C. Sec. 1291 as plaintiffs have appealed a final judgment of dismissal.
12
The district court's grant of summary judgment in favor of defendants is subject to plenary review. Wheeler v. Towanda Area School Dist., 950 F.2d 128, 129 (3d Cir.1991); American Medical Imaging Corp. v. St. Paul Fire and Marine Ins. Co., 949 F.2d 690, 692 (3d Cir.1991). To the extent the district court interpreted and applied Delaware law, the district court is not entitled to deference. The determinations regarding state law, where appropriate, will be reviewed de novo. Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991); Borse v. Piece Goods Shop, Inc., 963 F.2d 611, 613 (3d Cir.1992).
III.
A.
13
The central issue raised in this appeal is whether a state court, which does not have subject matter jurisdiction to hear exclusive federal claims, may nevertheless approve a settlement and release of those claims by the parties. The plaintiffs urge this court to adhere to the view that the Delaware release does not extinguish the exclusive federal claims because Congress did not authorize Delaware or other state courts to hear such claims in the first instance. As a starting point, however, it is important to emphasize that the Delaware court did not purport to exercise any inherent power to release causes of action that it had no jurisdiction to entertain. Rather, the Delaware court only acted to enter a settlement agreement that was initiated, negotiated, and adopted by the parties to a lawsuit that was properly before it.
14
It is significant to note that a release may take one of at least two distinct forms. In the first situation, a release may be entered into by parties engaged in a colorable legal dispute for which no formal complaint has been filed. The parties may negotiate a settlement of the dispute and in the process execute a release of all claims. The release acts as a simple contract between two private parties not engaged in a lawsuit. If one of the parties later breaches that contract by filing a complaint stemming from the relevant transaction, then the defendant may present the release as a defense to the lawsuit and argue that the claims alleged in court were contracted away by the plaintiff. Assuming that there is no relevant exception to the release defense, for instance that the release was only entered into on the basis of deception or coercion, see In re Complaint of Bankers Trust Co., 752 F.2d 874, 885 (3d Cir.1984), then the contract should be given full preclusive effect by the court.
15
In the second situation, which encompasses the case sub judice, a lawsuit has been commenced by one party asserting claims against the other. When the parties in a pending case negotiate a settlement, the resulting court order dismissing the case is a final judgment in that lawsuit. As a judgment, the settlement and release of claims is a contract that not only is agreed upon by the parties, but also is stamped with the imprimatur of the court with jurisdiction over the parties and the subject matter of the lawsuit. See Nottingham Partners v. Trans-Lux Corp., 925 F.2d 29, 33 n. 2 (1st Cir.1991). Thus, the release is not simply a contract entered into by private parties, but is one that has been given a stamp of approval by the court.
16
When the underlying legal dispute is a class action, as is the present case, then the court has more than a ministerial duty to enter the negotiated settlement and release as a judgment. In this circumstance, the court has an elevated duty to ensure that the settlement is fair and adequate to all the plaintiff class members, not just the named representatives who negotiated its substantive terms. This duty is particularly acute when the class action is one certified under Federal Rules of Civil Procedure 23(b)(1) or (2), or their state counterparts, because the class members have been denied an opportunity to opt out of the putative class. In effect, all ordinary class members are bound by the deal struck by their named representatives in the event the court determines that they were adequately and fairly represented during the course of the negotiations.
17
That is not to say, however, that non-representative class members are without recourse in the event that they do not feel the negotiated settlement and release is in their individual or the class' best interest. When this fairly usual circumstance arises, the objecting class members must be given an opportunity to address the court as to the reasons the proposed settlement is unfair or inadequate. The court then rules as to the adequacy and fairness of the settlement. See, e.g., Girsh v. Jepson, 521 F.2d 153, 156-57 (3d Cir.1975) (discussing the factors a trial court should utilize when determining the fairness of a class action settlement for absent members of the plaintiff class).
18
As the district court noted, Grimes, 1993 WL 56032, at * 3, the federal plaintiffs pursuing this case on appeal were provided with such an opportunity in the state court litigation. As the district court stated:
19
The plaintiffs, as class members, received notice of the Delaware proceedings and were provided an opportunity to be heard. Indeed, plaintiff Grimes vigorously exercised this opportunity. Both the Delaware Chancery Court and the Delaware Supreme Court rejected Mr. Grimes' disclosure claims and found the settlement to be fair to the Vitalink stockholders.
20
Id. (citing the Delaware court dispositions); see also In re Vitalink, [1991-92 Transfer Binder] Fed.Sec.L.Rep. (CCH) p 96,585, at 92,743-45, 1991 WL 238816 (Del.Ch. Nov. 8, 1991). Not only did plaintiff Grimes pursue the adequacy of representation and disclosure claims through the Delaware court system to its highest court, but when relief was denied he petitioned the United States Supreme Court to hear the case. When the Supreme Court declined to disturb the decision of the Delaware Supreme Court, see Grimes, --- U.S. at ----, 113 S.Ct. at 179, he and the other class members had been granted all the process that was due. The members of the class, including Holbrook and Grimes, were provided an opportunity to be heard, actually litigated, and lost on the issue of whether they were deprived due process in the state court proceeding.
21
The plaintiffs' attempt to relitigate the issue of whether they were adequately represented during the settlement negotiations and whether the state court considered sufficient evidence to make its determination is even less compelling than that of the federal plaintiffs in Nottingham Partners, the most analogous case on point. In Nottingham Partners, the plaintiffs filed suit in federal court "in vain pursuit of back-door relief" without even appealing the state court adjudication to the United States Supreme Court. 925 F.2d at 33. Here, the objectors pursued their direct appeal all the way to the Supreme Court without obtaining relief.
B.
22
Although plaintiffs concede they pursued the adequacy of representation issue on appeal through the Delaware court system, they argue that such process cannot bind non-resident, non-objecting class members like Holbrook who never entered an appearance during the pendency of the Delaware litigation.5 Plaintiffs would even take this argument one step further to assert that the Delaware judgment does not bind Holbrook because he did not formally consent to personal jurisdiction in the Delaware court and because he does not have "minimum contacts" with this forum for purposes of this adjudication. See International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).
23
Although the class members in the present case were not provided with an opportunity to opt out, the state court had the requisite power to bind absent class members as long as they had minimum contacts with the forum and they were not otherwise denied due process. See id. at 317-18, 66 S.Ct. at 159 (minimum contacts in and of themselves suffice for specific jurisdiction). We first consider whether Holbrook had sufficient minimum contacts with the Delaware forum to be bound by its judgment. Addressing this issue, a Delaware court has held that it may exercise in personam jurisdiction over absent members of a plaintiff class who have not been provided an opportunity to opt out based solely on the fact of ownership of Delaware corporate stock. Hynson v. Drummond Coal Co., 601 A.2d 570, 575-79 (Del.Ch.1991). In Hynson, Chancellor Allen stated that:
24
it is not unreasonable--not inconsistent with traditional notions of fairness ...--to conclude that the law has long put the buyer of corporate stock on notice that corporate rights attaching to stock ownership may be adjudicated in a single proceeding in another jurisdiction, including at a minimum the corporation's state of incorporation.
25
Id. at 579 (citing Shaffer v. Heitner, 433 U.S. 186, 219-28, 97 S.Ct. 2569, 2588-92, 53 L.Ed.2d 683 (1977) (Brennan, J., concurring in part and dissenting in part)). Such an exercise of personal jurisdiction is inherently limited to adjudication of rights associated with ownership of that stock. Id. Thus, stock ownership alone suffices for "specific jurisdiction" but not "general jurisdiction."
26
We have long recognized an important distinction between basing personal jurisdiction in a particular forum on contacts that are unrelated to the claim being adjudicated (general jurisdiction), as opposed to basing personal jurisdiction on contacts directly related to the claim or claims at issue (specific jurisdiction). E.g., Dollar Sav. Bank v. First Security Bank of Utah, 746 F.2d 208, 211 (3d Cir.1984); Compagnie des Bauxites de Guinea v. Insurance Co. of N. Am., 651 F.2d 877, 889 (3d Cir.1981) (Gibbons, J., dissenting in part) ("Specific and general jurisdiction analyses are quite distinct."), aff'd sub nom. Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinea, 456 U.S. 694, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982). Unlike establishing general jurisdiction where the party must be shown to have "maintained continuous and substantial forum affiliations," Dollar Sav. Bank, 746 F.2d at 212, establishing specific jurisdiction, at a minimum, requires only that a party be shown to have committed at least one act in the relevant forum which is substantially related to the claim being adjudicated, see Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146-48 (3d Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 61, 121 L.Ed.2d 29 (1992). The claims adjudicated in the Delaware Court of Chancery involved the duties of care and disclosure exercised by the members of the Vitalink Board of Directors in accepting Network's merger offer, as well as the fairness and adequacy of representation by the class representatives. An appropriate basis for the Delaware court's power to bind non-resident shareholders in such a proceeding is ownership of Vitalink stock6 together with any other activity engaged in by the members of the class pursuant to their shareholder rights. Thus, in this collateral attack we are concerned with whether the Delaware Court of Chancery had specific jurisdiction to bind non-resident members of the plaintiff class like Holbrook.
27
In the present case, plaintiff Holbrook and all other class members owned stock in Vitalink, a Delaware corporation. Nevertheless, we need not decide whether the single act of purchasing and owning stock in a Delaware corporation would provide sufficient contacts for the state court to exercise specific jurisdiction over every member of the class because the record discloses that Holbrook had an important further contact with the Delaware forum. By surrendering his shares in response to the tender offer with knowledge of his status as a member of the plaintiff class in a pending class action lawsuit containing all the attendant procedural protections designed to ensure that only a fair and adequate settlement judgment would be entered by the court, Holbrook purposefully availed himself of the privilege of having the Delaware Court of Chancery finally, and in a single lawsuit, determine the adequacy of the settlement agreement, "thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958).
28
Prior to class certification, each member, including Holbrook, was provided with notice that the Vitalink Board had accepted a merger offer from Network that would provide a cash payment of $10.50 per share. This notice was followed by a letter from the Delaware Court of Chancery discussing the pendency of the class action litigation, describing the terms of the settlement agreement, and indicating that every class member had the right to oppose the settlement at a formal hearing. In response to these notifications, Holbrook elected to tender his shares to the Delaware corporation in exchange for the merger price. This affirmative act provided an important further contact with the Delaware forum. Based on his ownership of stock in Vitalink, a Delaware corporation, and his additional act of tendering his shares, we conclude that Holbrook had sufficient contacts with Delaware for its courts to exercise in personam jurisdiction for the limited purpose of determining the fairness of the settlement with respect to his stock ownership rights.7
29
Turning to the issue of the adequacy of process, the Supreme Court in a related context has indicated that the due process protections required for out-of-state class plaintiffs are significantly lower than those needed for defendants. Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 808-11, 105 S.Ct. 2965, 2972-74, 86 L.Ed.2d 628 (1985). Plaintiffs require fewer due process protections because there are inherent protections built into the class action device and because they are subjected to lesser burdens than defendants. Id. at 809-11, 105 S.Ct. at 2973-74. Thus, the Delaware state court need only have provided "notice plus an opportunity to be heard and participate in the litigation" in order to satisfy due process.8 Id. at 812, 105 S.Ct. at 2974.
30
The Delaware Court of Chancery sent by mail to each class member, including Holbrook, written notice of the pendency of the class action containing a full disclosure of the proposed settlement and its ramifications.9 This disclosure statement also notified all class members that a hearing to determine the fairness and reasonableness of the settlement had been scheduled for September 16, 1991 before the Delaware Court of Chancery. The class members were invited to appear at the hearing to "present any evidence or arguments that may be proper and relevant" concerning the settlement upon providing ten days written notice of their intent to appear. App. at 535. Despite receiving written notice and an opportunity to challenge the settlement, Holbrook made a conscious choice to accept the tender offer price of $10.50 per share without objecting. Although the present class members were not provided with an opportunity to opt out of the class, we conclude that the Delaware Court of Chancery provided sufficient due process protections to bind absent class members like Holbrook who failed to appear and object to the settlement.
31
The plaintiffs contend that In re Real Estate Title & Settlement Servs. Antitrust Litig., 869 F.2d 760, 762 (3d Cir.), cert. denied sub nom. Chicago Title Ins. Co. v. Tucson Unified School Dist., 493 U.S. 821, 110 S.Ct. 77, 107 L.Ed.2d 44 (1989), provides support for the proposition that the state court could not release Holbrook's federal claims because it did not have personal jurisdiction to bind him. We agree with the district court, see Grimes, 1993 WL 56032, at * 3, that this reading of Real Estate Title is mistaken.
32
If at all relevant to this case, Real Estate Title stands only for the limited principle that "an absent class member can[not] be enjoined from relitigation if the member does not have minimum contacts with the forum" or consent to jurisdiction. 869 F.2d at 769 (emphasis in original). The present case does not involve a suit brought by the merging corporations to enjoin the federal plaintiffs from relitigating any claims or issues. Rather, the defendants have only raised the state court release as a defense--it is a judgment that precludes relitigation of all claims that were released by the parties. More importantly, we have already concluded that Holbrook had sufficient contacts with Delaware to be bound by the judgment of the Court of Chancery concerning his Vitalink stock ownership rights. Therefore, Real Estate Title does not change our analysis of the personal jurisdiction issue.
33
We therefore conclude that the Delaware court had in personam jurisdiction over the class members, including Holbrook, who tendered their shares in response to the proxy mailing and who did not make an appearance at the hearing to voice objections to the adequacy of the negotiated settlement. Both Grimes and Holbrook were provided sufficient process by the Delaware court system to challenge the settlement. Despite the objections actually lodged, the settlement and release were approved by the Delaware court and thereby bind all who were parties to the lawsuit. As members of the plaintiff class, Grimes and Holbrook are bound by the terms of the release that was entered into on their behalf.
C.
34
We next consider whether the release defense interposed by the federal court defendants applies to preclude the federal securities case from proceeding forward. In the federal lawsuit, the plaintiffs have alleged claims that were resolved by the final judgment entered into by the state court.10 Even though the state court did not have subject matter jurisdiction to consider a suit alleging violations of the federal securities laws, the judgment entered by the court must be given due accord by a subsequent federal court entertaining a lawsuit based upon facts and transactions conclusively determined in the state court proceeding.
35
The district court made a factual finding that Grimes presented arguments during the state court proceeding concerning disclosure requirements under federal law. Grimes, 1993 WL 56032, at * 2.11 The facts that underlie the federal non-disclosure claims were actually litigated during the state court proceeding and were conclusively resolved against the objectors, here the federal plaintiffs. Grimes, 1993 WL 56032, at * 5 ("[T]he plaintiffs and the objectors, including plaintiff Grimes, actually litigated the disclosures accompanying defendants' offer and merger into N[etwork]"). See also In re Vitalink, [1991-92 Transfer Binder] Fed.Sec.L.Rep. (CCH) p 96,585, at 92,743-45, 1991 WL 238816 (Del.Ch. Nov. 8, 1991) (the Delaware Court of Chancery fully considered and rejected all of the objectors' non-disclosure arguments). As a result, the plaintiffs cannot relitigate in federal court the issues of non-disclosure and fairness of the settlement that were conclusively determined in the Delaware proceeding.
36
We are compelled to conclude that the present lawsuit is barred by the terms of the federal full faith and credit statute. See 28 U.S.C. Sec. 1738. "The preclusive effect of a state court judgment in a subsequent federal lawsuit generally is determined by the full faith and credit statute, which provides that state judicial proceedings 'shall have the same full faith and credit in every court within the United States ... as they have by law or usage in the courts of such State ... from which they are taken.' " Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 380, 105 S.Ct. 1327, 1331-32, 84 L.Ed.2d 274 (1985) (quoting 28 U.S.C. Sec. 1738). In Marrese, the Court considered whether the federal full faith and credit statute operates to preclude a federal court from considering exclusive federal antitrust claims that arose from the same transaction that was the subject of a prior state law action in which the state court entered a final judgment dismissing all claims.
37
The Court held that the federal full faith and credit statute can operate to bar the relitigation of issues decided by the state court, even though the state court would not have subject matter jurisdiction to consider the federal claims in the first instance, if state law would give the state court judgment preclusive effect. Id. at 380-81, 105 S.Ct. at 1332. Viewed properly as an interpretation of the full faith and credit statute, the Marrese decision is consistent with earlier Supreme Court cases requiring a subsequent federal court to look to state law to determine whether issue preclusion is a necessary consequence of the prior state court litigation. See Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81, 104 S.Ct. 892, 896, 79 L.Ed.2d 56 (1984); Kremer v. Chemical Const. Corp., 456 U.S. 461, 480-82, 102 S.Ct. 1883, 1897-98, 72 L.Ed.2d 262 (1982) (The full faith and credit statute "does not allow federal courts to employ their own rules of res judicata in determining the effect of state judgments. Rather, it goes beyond the common law and commands a federal court to accept the rules chosen by the State from which the judgment is taken."); cf. Allen v. McCurry, 449 U.S. 90, 95-96, 101 S.Ct. 411, 415-16, 66 L.Ed.2d 308 (1980) (federal courts are required to give collateral estoppel effect to prior state court judgments when state courts would do so). Thus, the Supreme Court instructs a federal court to inquire into the scope of state preclusion law when applying the full faith and credit statute to a prior state court judgment.
38
For present purposes, we find it unnecessary to determine whether operation of the full faith and credit statute could preclude a subsequent federal court from entertaining exclusive federal securities claims on the basis of res judicata. As the Marrese court held, where a state court would give a prior state judgment such broad res judicata effect, then a federal court is required to follow suit. 470 U.S. at 379-81, 105 S.Ct. at 1331-32.12 We need not address this question because the district court expressly ruled that the federal claims had been released as a part of the state court judgment. Grimes, 1993 WL 56032, at * 3, and that these claims were precluded by the collateral estoppel effect of this judgment, id. at *4-5.
39
As we previously indicated, we agree with the district court that the language of this broad release manifests an intent by the parties to settle all claims arising from the merger transaction. See supra note 10. In addition, we have determined that all class members, including Grimes and Holbrook, are constitutionally bound by the prior judgment. Therefore, the full faith and credit statute operates to bar a federal court from considering any claims arising from the merger transaction if a Delaware state court would find that the judgment precludes the relitigation of any issues conclusively determined in the state court proceeding.
40
As the district court found when it analyzed state law, Grimes, 1993 WL 56032, at * 4, Delaware follows the usual rule that a judgment in one case constitutes a final determination concerning questions of fact litigated by the parties. See E.B.R. Corp. v. PSL Air Lease Corp., 313 A.2d 893, 894 (Del.1973); Winkler v. Balentine, 254 A.2d 849, 851 (Del.1969); accord Nottingham Partners, 925 F.2d at 32. Since a state court would conclude that the plaintiffs are collaterally estopped from relitigating the factual issues of nondisclosure, adequacy of representation, and fairness of the settlement that they raise in this lawsuit, the district court correctly ruled that the federal defendants were entitled to summary judgment. In short, the full faith and credit statute requires the federal court to give collateral estoppel effect to the state court judgment. Since this judgment places the court's stamp of approval on a broad release of all claims arising from the merger transaction, including any exclusive federal claims, the subsequent federal court is precluded from entertaining a case involving claims arising from the same nucleus of operative facts.
D.
41
While this rule of law may seem anomalous at first glance, it is widely recognized that courts without jurisdiction to hear certain claims have the power to release those claims as part of a judgment. See, e.g., Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1287-88 (9th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 408, 121 L.Ed.2d 333 (1992) (a federal court may release not only claims alleged in the complaint, but also state claims arising from the same nucleus of operative facts over which the court would not have jurisdictional competency); TBK Partners Ltd. v. Western Union Corp., 675 F.2d 456, 460 (2d Cir.1982) (same); In re Corrugated Container Antitrust Litig., 643 F.2d 195, 221-22 (5th Cir.1981), cert. denied, 456 U.S. 998, 102 S.Ct. 2283, 73 L.Ed.2d 1294 (1982) (same). This rule of law serves the important policy interest of judicial economy by permitting parties to enter into comprehensive settlements that "prevent relitigation of settled questions at the core of a class action." TBK Partners, 675 F.2d at 460.
42
Nor is this rule of law limited to federal courts entering judgments that release state claims that they would not have jurisdictional competency to entertain in the first instance. We hold that as a matter of federal law a state court has the power to enter a settlement negotiated by the parties as a judgment which releases exclusive federal claims that the state court could not itself entertain. With this holding, we follow several other federal courts that have recognized the broad power of state courts to approve and enforce settlements which reflect the parties' intent to release all claims arising from a transaction regardless of whether the class action court has jurisdictional competency to hear those claims. See Nottingham Partners, 925 F.2d at 34; Abramson v. Pennwood Inv. Corp., 392 F.2d 759, 762 (2d Cir.1968). See also Sandler Assocs., L.P. v. BellSouth Corp., 818 F.Supp. 695, 704-05 (D.Del.1993), appeal filed, No. 93-7343 (3d Cir. May 12, 1993); Lowenschuss v. Resorts Int'l, No. 89-1071, 1989 WL 73254, 1989 U.S.Dist. LEXIS 7407, at * 20 n. 15 (E.D.Pa. June 29, 1989).
43
Despite the well established authority for this legal proposition, the federal plaintiffs urge this court to hold that the state court did not have power to enter such a broad release based on the rationale put forth by Judge Friendly in National Super Spuds, Inc. v. New York Mercantile Exch., 660 F.2d 9, 18-19 (2d Cir.1981). In National Super Spuds, the U.S. Court of Appeals for the Second Circuit ruled that a federal court was not precluded from entertaining a federal claim despite an earlier broad release entered into by the parties to a state court proceeding. Id. at 17-18. However, National Super Spuds is distinguishable from the case sub judice because the federal plaintiff brought claims based on unliquidated futures contracts, while the state court class was organized only to litigate claims based on futures contracts liquidated during the relevant time period. Id.
44
Thus, our holding today is not inconsistent with the holding of the National Super Spuds court that a state court class representative cannot release federal claims arising from a different factual predicate than that before the state court. Judge Friendly expressly limited the opinion to the facts before the court by recognizing that "a settlement could properly be framed so as to prevent class members from subsequently asserting claims relying on a legal theory different from that relied upon in the class action complaint but depending upon the very same set of facts." Id. at 18 n. 7. While National Super Spuds was "not such a case," id., the present one is.
IV.
45
We conclude that the district court properly entered summary judgment in favor of the defendants because all of the elements of a dispositive release defense were present. As a member of the plaintiff class who owned Vitalink stock and tendered his shares, plaintiff Holbrook had sufficient contacts with the Delaware forum such that the Court of Chancery could exercise specific jurisdiction to adjudicate his stock ownership rights. Furthermore, the state court judgment releasing all claims arising from the merger transaction was entitled to full faith and credit by the district court even though the state court did not have jurisdictional competency to entertain the present exclusive federal claims. We will affirm the judgment of the district court. Each party will bear its own costs.
46
HUTCHINSON, Circuit Judge, dissenting.
47
I respectfully dissent from the Court's mandate insofar as it affirms the district court's dismissal of Holbrook's federal actions. I concur with the Court's holding that Grimes and other members of the non-opt-out plaintiff class, over whom the Delaware Court of Chancery had personal jurisdiction, are bound by the class representatives' general release of all of the class members' claims that arise out of the merger of Vitalink with Network, including claims under federal securities law, for material misrepresentations which the defendants may have made in connection with the merger and the stock subject to the tender offer. I think Holbrook is not bound because the courts of Delaware lacked personal jurisdiction over him. I reason as follows.
I.
A.
48
Holbrook is not a Delaware resident, he has not consented to jurisdiction and he was not given a chance to opt out. Nevertheless, in Part III.B. of its opinion, the Court holds that his tender of shares of stock he owned in a Delaware corporation meets International Shoe's due process test of minimum contacts. It concludes these tenuous contacts with Delaware permit a court of that state, sitting in equity, to exercise in personam jurisdiction over Holbrook as a member of a Rule 23(b)(1) or (b)(2) non-opt-out class. Because of its conclusion that the state court had personal jurisdiction over Holbrook, the Court goes on to hold that the class representatives' settlement of a state suit to enjoin the merger of Vitalink and Network on the theory that Vitalink's officers and directors deceitfully or fraudulently breached their common law fiduciary duties to the corporation or its shareholders binds Holbrook.
49
Finally, the Court holds that a non-resident who never consented to class representation in a state court is not only precluded from further equitable relief by a release of claims incorporated into the settlement decree but also from all legal actions for money damages, including actions Congress has entrusted to the exclusive jurisdiction of federal courts.
50
In doing so, the Court recognizes that due process prohibits the courts of any particular state from exercising personal jurisdiction over a non-resident absent minimum contacts. See International Shoe v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). I think it errs, however, in concluding that Holbrook's stock ownership, when coupled with his tender of stock in accord with the tender offer that he claims violated federal law, gives Delaware the "minimum contacts" which are necessary before a state court can exercise personal jurisdiction over non-resident, non-consenting members of a class that otherwise purports to include all the stockholders of one of that state's domestic corporations.
51
Under the Supreme Court's jurisprudence placing due process limitations on a court's exercise of jurisdiction, it is clear that the exercise of such jurisdiction must comport with "traditional notions of fair play and substantial justice." See International Shoe, 326 U.S. at 320, 66 S.Ct. at 160. Specifically, the Supreme Court has stated:
52
The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful "contacts, ties, or relations." [ ] By requiring that individuals have "fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign," [ ] the Due Process Clause "gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit...."
53
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72, 105 S.Ct. 2174, 2181-82, 85 L.Ed.2d 528 (1985) (citations and footnote omitted). I believe that the Delaware court's exercise of jurisdiction over Holbrook does not comport with this standard.
54
In Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), the Supreme Court extended International Shoe to all exercises of state court jurisdiction, including exercises of quasi in rem jurisdiction. Shaffer involved a shareholder's derivative action, filed in Delaware state court against officers and directors of a Delaware corporation, including some officers and directors who were non-residents of Delaware. Shaffer, 433 U.S. at 189-96, 97 S.Ct. at 2572-75. The Delaware court exercised quasi in rem jurisdiction over these nonresident defendants by sequestering their stock in a Delaware corporation. Id. at 196, 97 S.Ct. at 2575. The United States Supreme Court held that the non-resident officers' and directors' ownership of stock in a Delaware corporation did not give Delaware the minimum contacts due process required. Id. at 213-14, 97 S.Ct. at 2584-85. Accordingly, the Supreme Court decided Delaware's Chancery Court could not subject non-resident officers and directors who owned shares in a Delaware corporation to a sequestration procedure. Id. at 216-17, 97 S.Ct. at 2586-87. Justice Stevens specifically noted that "[o]ne who purchases shares of stock on the open market can hardly be expected to know that he has thereby become subject to suit in a forum remote from his residence and unrelated to the transaction." Id. at 218, 97 S.Ct. at 2587 (Stevens, J., concurring).
55
Despite the Supreme Court's holding in Shaffer, the Delaware Chancery Court, in Hynson v. Drummond Coal Co., 601 A.2d 570, 579 (Del.Ch.1991), concluded that ownership of stock in a Delaware corporation is a sufficient basis for a Delaware court to exercise jurisdiction over the corporation's stockholders. I believe that Hynson is inconsistent with Shaffer and that the Delaware Chancery Court's position that it could exercise, in this case, personal jurisdiction over absent class members who have not been given an opportunity to opt out solely because they own stock in a Delaware corporation runs afoul of the Due Process Clause of the Fourteenth Amendment to the Constitution. Because Hynson was not appealed, we do not have the benefit of the Delaware Supreme Court's view on this issue.
56
Shaffer is not the only case which has held, or implied, that ownership of stock in a domestic corporation is not enough of a contact to give the courts of the state of incorporation personal jurisdiction over the corporation's stockholders. Even when that ownership is coupled with other local contacts connected with the acquisition or disposition of a domestic corporation's stock, courts have held that they have no personal jurisdiction over nonresident stockholders. See Edwards v. Geosource, Inc., 473 So.2d 36, 37 (Fla.Dist.Ct.App.1985) (mere ownership of stock in Florida corporation, coupled with execution of promissory note to purchase the stock, insufficient contacts to confer personal jurisdiction); cf. Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333, 336-38, 45 S.Ct. 250, 251-52, 69 L.Ed. 634 (1925) (activities of subsidiary corporation did not subject parent holding stock in subsidiary to local court's jurisdiction absent parent's control of subsidiary or other facts permitting corporate veil to be pierced). But see Gaudio v. Gaudio, 23 Conn.App. 287, 580 A.2d 1212, 1220 (1990) (dictum) (noting plaintiff's argument that mere ownership in stock was an insufficient contact "might be persuasive if the transaction at issue involved the relatively routine and anonymous purchase of publicly traded stock through a broker or agent" but that an express agreement to purchase stock could supply the necessary contact).
57
Shaffer shows this Court's decision not to rely solely on Holbrook's ownership of stock is wise. While I agree with the Court that in this case we are concerned with specific jurisdiction, I am unable to see how Holbrook's response to the tender offer he claims was misleading under the federal disclosure laws adds any material contact with Delaware or, alternately, supplies sufficient evidence of consent to personal jurisdiction to satisfy due process. Whether stock ownership coupled with a tender under the offer a plaintiff claims is misleading as a matter of federal law provides the minimum contacts due process requires seems to be a question of first impression on which I have uncovered no specific authority. The Court cites Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958) and Carteret Savings Bank, FA v. Shushan, 954 F.2d 141, 146-48 (3d Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 61, 121 L.Ed.2d 29 (1992), in support of its proposition that the tender was a sufficient contact. I do not think these cases answer the question. Neither have anything to do with tender offers. See Hanson, 357 U.S. at 251-52, 78 S.Ct. at 1238-39 (Florida had no personal jurisdiction over Delaware trust when trustee later became domiciled in Florida because the trust company did not transact business there and none of the trust assets were held there); Carteret, 954 F.2d at 149-50 (when Louisiana attorney not only telephoned and corresponded with client's management in New Jersey but also traveled to New Jersey to meet with management concerning transaction in question, lawyer and his law firm had minimum contacts courts in New Jersey needed to exercise personal jurisdiction over defendant in claim for breach of duty in preparing contract). I do not think these cases support the Court's position. Though I am equally unable to cite authority directly on point, I believe the effect of depriving Holbrook of his exclusively federal securities claims which the Court's holding has done does not square with the federalism component I believe to be intertwined in the due process requirements concerning personal jurisdiction.1
B.
58
The question thus becomes whether a lack of minimum contacts deprives a court-approved consent decree settling a Rule 23(b)(1) or (2) class action of any binding effect on non-resident, non-consenting members of a non-opt-out class. The Supreme Court has stated generally that International Shoe's test of "traditional notions of fair play and substantial justice" applies to all exercises of state court jurisdiction, and it has never explicitly held a court can exercise personal jurisdiction over absent unconsenting members of a plaintiff class if minimum contacts are lacking.
59
This general principle, however, is set out in cases involving jurisdiction over individual, as opposed to class, defendants. See, e.g., Burger King Corp., 471 U.S. at 471-72, 105 S.Ct. at 2181-82; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295, 100 S.Ct. 559, 566, 62 L.Ed.2d 490 (1980). Thus, some courts have relied on Hansberry v. Lee, 311 U.S. 32, 61 S.Ct. 115, 85 L.Ed. 22 (1940), to indicate that a court may bind unnamed members of a plaintiff class without personal jurisdiction over all of them. See Miner v. Gillette Co., 87 Ill.2d 7, 56 Ill.Dec. 886, 889, 428 N.E.2d 478, 481 (1981), cert. dismissed, 459 U.S. 86, 103 S.Ct. 484, 74 L.Ed.2d 249 (1982); Katz v. NVF Co., 119 Misc.2d 48, 462 N.Y.S.2d 975, 977 (1983), rev'd on other grounds, 100 A.D.2d 470, 473 N.Y.S.2d 786 (1984). These courts base this conclusion on dictum in Hansberry which says that a class action may be appropriate for "causes in which the number of those interested in the litigation is so great as to make difficult or impossible the joinder of all because some are not within the jurisdiction...." Hansberry, 311 U.S. at 41, 61 S.Ct. at 118. I think they overlook the teaching of International Shoe, decided after Hansberry.
60
Indeed, in Hansberry, the Court repeated the principle that "one is not bound by a judgment in personam in a litigation in which he is not designated as a party or to which he has not been made a party by service of process." Hansberry, 311 U.S. at 40, 61 S.Ct. at 117 (citing Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878)).2 The Supreme Court went on to state that the considerations which induce a court to certify a class differ from those it must consider in deciding whether absent members of the class will be bound by the decree. Id., 311 U.S. at 42, 61 S.Ct. at 118. Perhaps foreshadowing International Shoe, it then said: "[T]here has been a failure of due process only in those cases where it cannot be said that the procedure adopted, fairly insures the protection of the interests of absent parties who are bound by it." Id.
61
No issue of personal jurisdiction was before the Court in Hansberry, and it seems to me a conclusion that a court may bind unnamed class members ignores Hansberry's distinction between the requirements for valid class actions and the limitations due process puts on their preclusive effect on absent, non-consenting class members. It is also in stark conflict with the Supreme Court's holding in Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985), that due process requires non-resident, non-consenting class members be given notice, an opportunity to be heard, and a chance to opt out. 472 U.S. at 812, 105 S.Ct. at 2974. Therefore, it does not seem to me that Hansberry's dictum stating a class suit "may bind members of the class or those represented who were not made parties to it" announces an exception to the general principle that a party is not bound by a court's order unless it has personal jurisdiction over him. Hansberry, 311 U.S. at 41, 61 S.Ct. at 118.
62
Many cases which state or seem to imply that personal jurisdiction can be exercised over absent members of a plaintiff "class" without minimum contacts are "common fund" cases in which the court entertaining the action had jurisdiction over nonresident members. Jurisdiction there is present because the plaintiffs have a property interest in the fund or alternately because the court had in rem or quasi in rem jurisdiction over the fund. See, e.g., Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950); Supreme Tribe of Ben-Hur v. Cauble, 255 U.S. 356, 41 S.Ct. 338, 65 L.Ed. 673 (1921), overruled on other grounds, Toucey v. New York Life Ins. Co., 314 U.S. 118, 62 S.Ct. 139, 86 L.Ed. 100 (1941); Hartford Life Ins. Co. v. Ibs, 237 U.S. 662, 35 S.Ct. 692, 59 L.Ed. 1165 (1915). See also generally Barbara A. Winters, Jurisdiction Over Unnamed Plaintiffs in Multistate Class Actions, 73 Calif.L.Rev. 181 (1985). The case now before us is not a typical limited fund or common interest case. It has its genesis in its state, as well as federal, version of what Holbrook alleges is the defendants' fraud or deceit in connection with a merger the state court plaintiffs unsuccessfully sought to enjoin. In any event, I believe the procedural rules governing class actions in all courts, state and federal, are subject to due process under either the Fifth Amendment or the Fourteenth Amendment, as it applies to the states.3
63
The Shutts case arose when a class of leaseholders brought suit over royalty payments in Kansas state court. Almost all of the plaintiffs and leases lacked any relationship to Kansas. The class notification informed all members of the pendency of a class action that could affect them and provided them with the opportunity to opt out of the class. Shutts, 472 U.S. at 799-801, 105 S.Ct. at 2967-69. In upholding the class action, the Supreme Court specifically stated that an absent member of a plaintiff class who lacks minimum contacts with the state whose court is entertaining a class action cannot be bound by a judgment entered in it unless the plaintiff has received "at a minimum ... an opportunity to remove himself from the class by executing and returning an 'opt out' or 'request for exclusion' form to the court." Id. at 812, 105 S.Ct. at 2974.
64
In In re Drexel Burnham Lambert Group, Inc., 960 F.2d 285 (2d Cir.1992), cert. dismissed sub nom. Hart Holding Co. v. Drexel Burnham Lambert Group, --- U.S. ----, 113 S.Ct. 1070, 122 L.Ed.2d 497 (1993), the court of appeals decided that members of a plaintiff class who had filed federal securities claims before Drexel filed for bankruptcy could be denied an opportunity to opt out of a settlement only because all of the class members had consented to the bankruptcy court's jurisdiction when they filed proofs of claim in the defendant's bankruptcy proceeding. Id. at 292.4 In reaching this conclusion, the court of appeals noted:
65
We are not unaware of the Supreme Court's statement in Phillips Petroleum Co. v. Shutts, 472 U.S. 797 [105 S.Ct. 2965, 86 L.Ed.2d 628] (1985), that "due process requires at a minimum that an absent plaintiff be provided with an opportunity to remove himself from the class by executing and returning an 'opt out' or 'request for exclusion' form to the court." Id. at 812 [105 S.Ct. at 2974]. Shutts mandates that a plaintiff be permitted to opt out of a proposed class when the court does not have personal jurisdiction over the plaintiff. Id. at 811-12 [105 S.Ct. at 2974-75].
66
In re Drexel Burnham Lambert, 960 F.2d at 292 (parallel citations omitted).
67
Shutts has been the subject of much discussion by both courts and commentators. In In re A.H. Robins Co., 880 F.2d 709, 744 (4th Cir.), cert. denied sub nom., Anderson v. Aetna Cas. & Sur. Co., 493 U.S. 959, 110 S.Ct. 377, 107 L.Ed.2d 362 (1989), another court of appeals, analyzing Shutts' effect on mandatory non-opt-out class certification (i.e., Rule 23(b)(1) and (2) classes), noted that some commentators view Shutts as holding " 'that a state court can bind absent class plaintiffs to a judgment for money damages (only) if it provides the absent parties the minimal procedural protections of adequate representation, notice of the action, and an opportunity to opt out of the litigation.' " Id.5 The court also noted a commentary which concludes " '[t]here is no neat and logical means of resolving the question whether mandatory actions survive Shutts.' " In re A.H. Robins Co., 880 F.2d at 744 (quoting Arthur R. Miller & David Crump, Jurisdiction and Choice of Law in Multistate Class Actions After Phillips Petroleum Co. v. Shutts, 96 Yale L.J. 1, 52 (1986)).
68
In re A.H. Robins Co. was a Rule 23(b)(1) action. There, the court referred to commentary concerning the binding effect of Rule 23(b)(2) class actions on non-residents who were not given a chance to opt out. Quoting this commentary, the court of appeals said:
69
The problem of the Rule 23(b)(2) class action is that binding absent class members without giving them notice and the right to opt out violates due process. The problem is clear under the apparently applicable standards of Phillips Petroleum Co. v. Shutts. Indeed, the only way in which the binding Rule 23(b)(2) class action might be seen not to be a violation of due process is if one follows Matthews v. Eldridge [424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) ] and weighs the harm to the interests of absentees with the cost of the alternative safeguard of notice and the right to opt out.
70
In re A.H. Robins Co., 880 F.2d at 744-456 (quoting Mark Weber, Preclusion and Procedural Due Process in Rule 23(b)(2) Class Actions, 21 U.Mich.J.L.Ref. 347, 394 (1988) (footnote omitted in original)).7
71
Shutts, on its facts, was a plaintiff class's action for money damages, and the Supreme Court expressly reserved the question whether its holding applied to cases in which a plaintiff class sought equitable relief. Shutts, 472 U.S. at 811 n. 3, 105 S.Ct. at 2974 n. 3. Accordingly, some commentators and courts have concluded that Shutts has no application to cases in which a plaintiff class seeks relief that is primarily equitable in nature. See, e.g., White v. National Football League, 822 F.Supp. 1389, 1410-11 (D.Minn.1993) (reading Shutts to require a chance to opt out only in actions that concern claims "wholly or predominantly for money judgments" and not claims in which injunctive relief is the predominate relief sought) (citing Shutts, 472 U.S. at 811-12 & n. 3, 105 S.Ct. at 2974-75 & n. 3); see also In re Jackson Lockdown/MCO Cases, 107 F.R.D. 703, 713-14 (E.D.Mich.1985).
72
If this conclusion is correct in its broad sense, a chance to opt out is not required when a class is properly certified as a Rule 23(b)(1) or (2) class. A brief excursion into the genesis of class actions and their present division among Rule 23(b)(1), (2) and (3) may help explain, but not necessarily justify, this conclusion.8 Our class actions originated in the English bill of peace. They were originally cognizable only in equity, see Charles A. Wright et al., 7A Federal Practice & Procedure Civil 2d (hereinafter "Federal Practice & Procedure "), Sec. 1751, at 7-10, because the procedural tools available in the law courts were not adequate to protect the rights of unknown parties. See id. Sec. 1751, at 11. Because of its utility, the class suit in equity came to this country with the common law and was eventually incorporated into numerous state procedural codes. "The obvious advantage of the representative suit was that it was far cheaper and more convenient to maintain a single proceeding in equity than to adjudicate the controversy in piecemeal fashion by multiple actions at law." Id. Sec. 1751, at 8.
73
As the modern class action evolved from this background, its efficiency in disposing of claims involving common issues affecting many persons resulted in an expansion of its use that took it beyond the confines of the old bill of peace. Ultimately, it was extended to actions at law. See id. Sec. 1751, at 11. Since then, class actions have been divided into three parts. They were originally referred to as "spurious," "hybrid" and "true." Under the Federal Rules of Civil Procedure, these terms were abandoned in the 1966 amendments to our rules. See generally 7A Federal Practice & Procedure Sec. 1752 at 16. The "spurious" class action covered separate claims with common questions of law or fact. It loosely resembled today's Rule 21(b)(3) action. In a spurious class action, the class remedy was dependent solely on multiplicity or numerosity of parties. "True" class actions involved joint or common interests. They arose naturally out of the old bill of peace. "Hybrid" actions involved claims against limited pools of property or cash that bear some analogy to estates or trusts of all kinds.9 There, equity's long experience with the administration of estates commonly requiring resolution of competing claims to a res among various kinds of creditors and classes of beneficiaries provided an additional underpinning for the remedy of class relief with its origin in equity.
74
Members of true classes were wholly bound by res judicata, but hybrid class members were bound only to the extent that their claims concerned the fund before the court. See Miller & Crump, supra, at 39-40 & n. 276. The 1966 amendments to Federal Rule 23(b)(1) and 23(b)(2) brought most of the actions that would have been labelled true or hybrid under the Rule's original terminology within Rule 23(b)(1) or (2). Id. at 40 & n. 277. As I have stated, others involving only common issues affecting many persons, generally fall under Rule 23(b)(3).
75
Both Federal Rule of Civil Procedure 23, and Delaware's Rule governing class actions provide in a class action maintained under subdivision (b)(3) that notice advising class members of their right to opt out of the class must be given. See Fed.R.Civ.P. 23(c)(2); Del.Chanc.R.P. 23(c)(2). By negative implication, however, this right to notice and a chance to opt out has been thought not to apply to class actions maintained under subdivisions (b)(1) and (b)(2). Thus, Rule 23(b)(1) & (2) class actions are often referred to as mandatory class actions.
76
Though Shutts was not a mandatory class action, i.e., one certified under Rule 23(b)(1) or (b)(2) and thus left the due process concerns implicated by mandatory classes unresolved, it did not limit its discussion of due process and its requirement of personal jurisdiction to Rule 23(b)(3) classes. Accordingly, Miller and Crump in their commentary have concluded that the right to opt out is a fundamental due process requirement which conflicts with the notion of a mandatory non-opt-out class that has developed, somewhat insensibly, under Rule 23(b)(1) & (2). In what may perhaps appear to be a bit of semantic overstatement, they say: "There can be no 'mandatory class' if the members have the constitutional right to opt out." Miller & Crump, supra, at 39 (single quotes added). Of course, it is clear, even under Shutts, that a court can deny a class member a right to opt out if either the member or the object of the action has sufficient contact with the forum, just as any absent person can be joined involuntarily as a defendant and later discover that his interest in a particular res has been affected by orders issued in actions in rem or quasi in rem. With these exceptions, Miller and Crump suggest that Shutts "prohibit[s] mandatory class certification completely [because that] result seems supported by the unconditional statement of the right to opt out in Shutts." Id. at 54. Where a member of a plaintiff class lacks the minimum contacts that are necessary to give the courts of a particular state personal jurisdiction over him, I too believe Shutts implies his involuntary inclusion in a mandatory class certified under Rule 23(b)(1) or (b)(2) should be prohibited unless he is given notice and a chance to opt out.
77
Recently, in Carlough v. Amchem Products, Inc., 10 F.3d 189, 199 (3d Cir.1993), we stated "it would offend the Fifth Amendment's guarantee of due process for a federal court to enjoin an absentee class member whose minimum contacts with the forum have not been established or, in lieu of minimum contacts, who has not consented to the court's jurisdiction, explicitly or inferentially."
78
Moreover, In re Real Estate Title & Settlement Services Antitrust Litigation, 869 F.2d 760, 769 (3d Cir.), cert. denied sub nom. Chicago Title Insurance Co. v. Tucson Unified School District, 493 U.S. 821, 110 S.Ct. 77, 107 L.Ed.2d 44 (1989), also contains dicta supporting my conclusion that any class member lacking minimum contacts with the forum entertaining the class action must be given a chance to opt out. It involved a federal injunction of a state action for violations of state antitrust law on the basis of a prior class action settlement in the district court. We referred to the fact that the classes were certified pursuant to Federal Rule 23(b)(1) and (b)(2) making them "types of class actions that do not provide the right to opt out." Id. at 763. We went on to hold that a federal district court could not enjoin a state court action for damages. We stated that a member of a plaintiff class who lacks minimum contacts must have a chance to opt out before a court can exercise personal jurisdiction over him:
79
[I]f the member has not been given the opportunity to opt out in a class action involving both important injunctive relief and damage claims, the member must either have minimum contacts with the forum or consent to jurisdiction in order to be enjoined by the district court that entertained the class action.
80
Id. at 769 (emphasis added and footnote omitted).
81
Despite these dictum, the question whether due process requires either minimum contacts or an opportunity to opt out in a case like this has heretofore been an open question in this Court. See In re Real Estate Title & Settlement Servs. Antitrust Litig., 869 F.2d at 768-69 ("We need not reach the issue, left open by Shutts ... whether an absent plaintiff can be bound to the judgment in a hybrid (damage and injunctive) class action if it was not afforded the opportunity to opt out.") (emphasis added & citation omitted).
82
In this case, I think the issue is squarely presented. Here, the plaintiff class settled a state case in which it had sought equitable relief in the form of an order enjoining the proposed merger. Alternately, it sought compensatory and rescissionary damages if injunctive relief proved inappropriate or untimely.
83
I do not think the distinction between cases seeking equitable relief as opposed to money damages has any logical relation either to Fourteenth Amendment or Fifth Amendment concepts of due process's requirement of personal jurisdiction. Rather, it seems to me only a vestigial reminder of the different ways in which the law relating to joinder of parties evolved in courts of equity as opposed to courts of law. See supra at 1568.
84
Accordingly, I am unable to conclude that the arcane distinction between equitable jurisdiction based on multiplicity of parties (Rule 23(b)(3)) and equitable jurisdiction in cases involving multiple parties where multiplicity was coupled with an independent basis of equitable jurisdiction, e.g., injunction, interpleader, etc. (Rule 23(b)(1) & (2)) affects the restrictions due process places on a court's exercise of jurisdiction in personam.
85
Thus, if a decision on money damages is to bind a non-resident, non-consenting member of a class, I think the Constitution requires an opportunity to opt out in the absence of minimum contacts whether the class action has as its basis only a common question involving many parties or an independent basis for equitable intervention.
86
Some courts and scholars contend, however, that giving non-consenting, non-resident class members who lack minimum contacts with the forum in which the class action is brought a right to opt out is likely to deprive class actions of their efficiency. The magnitude of that concern has been seriously questioned, however. See Miller & Crump, supra, at 37. In many multistate class actions, contacts will be adequate to establish jurisdiction over the person of all class members. They will almost always be so when the action concerns a joint interest in property or a common fund, or where the class members have engaged in activities in the forum. See id. Moreover, the efficiency of class actions should be weighed against the equitable and due process concerns implicated by the potential res judicata effect on non-resident and absent plaintiffs. See supra n. 5. Professors Miller & Crump illustrate this problem as follows: "The rights of nonresident class members can be appreciated by considering ... a class action ... that is settled for much less than some class members think is reasonable." Miller & Crump, supra, at 16-17. In the case now before us, it is not too hard to understand how a non-consenting class member could think a settlement that puts no money in his pocket but takes away his right to seek damages under federal laws entrusting his non-disclosure claims exclusively to federal courts is unfair.
II.
87
Thus, here the state court's attempt to release federal claims that Congress has placed in the exclusive jurisdiction of federal courts under the interstate commerce power Article I, Section 8, Clause 3 of the Constitution grants Congress, compounds the difficulties that arise if the Delaware decree binds Holbrook. It has been noted that the requirement of minimum contacts has as one of its elements a respect for the individual sovereignty of the various states and their dual sovereignty with the national government. That mutual respect is said to be inherent in our federalism. See World-Wide Volkswagen, 444 U.S. 286, 293-94, 100 S.Ct. 559, 565-66, 62 L.Ed.2d 490 (1980); see also Miller & Crump, supra, at 32. Thus, in World-Wide Volkswagen, 444 U.S. at 291-94, 100 S.Ct. at 564-66, the Supreme Court, concerned with upholding shared state interests, reaffirmed its commitment to the minimum contacts and fair play and substantial justice test of International Shoe. The restriction the Fourteenth Amendment imposes on state courts' exercise of personal jurisdiction serves not only the interest of the absent plaintiff but also acts in the interest of federalism. It ensures that states do not reach out beyond the limits of their power. World-Wide Volkswagen, 444 U.S. at 292-93, 100 S.Ct. at 564-65; but see Shutts, 472 U.S. at 807, 105 S.Ct. at 2972 (endorsing approach of Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702-03 & n. 10, 102 S.Ct. 2099, 2104-05 & n. 10, 72 L.Ed.2d 492 (1982), and stating "the requirement that a court have personal jurisdiction comes from the Due Process Clause's protection of the defendant's personal liberty interest and ... the requirement 'represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty.' ") (footnote omitted in original)); cf. Miller & Crump, supra, at 33 (indicating that approach of Shutts adopting limited role for federalism leaves open the question whether there are valid interests that will be left unprotected by the abandonment of the World-Wide Volkswagen approach). I do not think those concerns are present here and, in any event, it would be my view that the liberty interest the due process clause protects is complemented by the common federal interest that is the concern of the commerce clause.
88
If the residual sovereignty of the individual states is part of the rationale behind the restrictions minimum contacts place on the state courts' exercise of personal jurisdiction over each other's citizens or residents, then it also seems to me that respect for the sovereignty of the federal government in areas in which the Constitution grants it power should also affect the power of a state to preclude the exclusively federal actions of persons who lack minimum contacts with that state or the cause it is hearing.10
89
Use of a state's mandatory class action to bar later actions by non-consenting, non-residents under the Securities Exchange Act of 1934 and the Williams Act thus seems to me to infringe on the mutual respect of the states and the federal government for each others' sovereignty that our federalism requires. See Radzanower v. Touche Ross & Co., 426 U.S. 148, 157-59 & n. 15, 96 S.Ct. 1989, 1994-96 & n. 15, 48 L.Ed.2d 540 (1976); see also 15 U.S.C.A. Sec. 78aa (West Supp.1993). Balkanization of the national system regulating interstate commerce in corporate securities is foreseeable if each state can subject any non-resident stockholder of one of its domestic corporations to decrees which settle disputes about state corporate law by taking from non-consenting, non-resident shareholders remedies they may have under federal securities law against those who control the corporation.11
III.
90
For all these reasons, I think that state courts have no power to bind non-resident shareholders, who do not consent to state jurisdiction, to state court settlements of disputes over local corporate law which include waivers of their federal claims. I would conclude that Holbrook's ownership of stock in a Delaware corporation and his tender pursuant to the tender offer that he claims failed to meet federal disclosure standards did not, consistent with due process, give the Delaware Court of Chancery in personam jurisdiction over him as a non-resident, non-consenting member of a non-opt-out class certified under Delaware Chancery Rule 23(b)(1) and (b)(2). That being the case, I do not think he is bound by the class representative's release of his federal securities law claims. I would therefore reverse the district court's order granting Vitalink's motion for summary judgment based on claim or issue preclusion arising out of the release of the parties the state court included in the consent decree insofar as that order concerns Holbrook.12 I would hold instead that Holbrook was not subject to the in personam jurisdiction of Delaware's Court of Chancery and that its attempt to bind him without his consent was a denial of due process. I would then enter an order remanding this case to the district court for further proceedings on Holbrook's claims under the federal law that regulates the sale and transfer of corporate securities.
SUR PETITION FOR REHEARING
April 6, 1994
91
Before: SLOVITER, Chief Judge; BECKER, STAPLETON, MANSMANN, GREENBERG, HUTCHINSON, SCIRICA, COWEN, NYGAARD, ALITO, ROTH, and LEWIS, Circuit Judges.
92
The petition for rehearing filed by appellants having been submitted to the judges who participated in the decision of this court and to all the other available circuit judges of the circuit in regular active service, and no judge who concurred in the decision having asked for rehearing, and a majority of the circuit judges of the circuit in regular active service not having voted for rehearing by the court in banc, the petition for rehearing is denied.
93
Judge HUTCHINSON would have granted rehearing in banc.
1
The language of the settlement and release agreement, which is vital to the disposition of this case, is set out in full below:
NOW, THEREFORE, IT IS STIPULATED AND AGREED, subject to the approval of the Court of Chancery, pursuant to Rule 23 of the Rules of the Court of Chancery, that the Consolidated Action shall be dismissed on the merits with prejudice as to all the defendants and the Defendants' Affiliates ... and against the plaintiffs and all other members of the Class without costs, except as provided in the Stipulation. All claims, rights, causes of action, suits, matters and issues, known or unknown, that arise now or hereafter out of, or that relate to, or that are, were or could have been asserted in connection with, Vitalink's and N[etwork's] employment agreements, change of control agreements, stock arrangements, and similar arrangements with Vitalink's employees, the Stock Option Agreement, N[etwork's] proposals to acquire Vitalink's stock ..., the disclosures made in the Schedule 14D-9, the Offer and the Merger, or any matters, transactions or occurrences referred to in the Complaint, or any other complaint in the Consolidated Action, or in any complaint in the California Actions, or any public statements, announcements or other activities relating to any of the foregoing, or the Settlement ..., by any member of the Class or by Vitalink, either directly, individually, derivatively, representatively or in any other capacity against any of the defendants in the Consolidated Action, their respective present or former officers, directors, stockholders, agents, employees, attorneys, representatives, advisors, investment bankers ..., commercial bankers, accountants, insurers, trustees, parents, affiliates, subsidiaries ..., directors and officers of such parents, affiliates and subsidiaries, general and limited partners, heirs, executors, personal representatives, estates, administrators, successors and assigns ... shall be compromised, settled, released and discharged subject to [certain terms and conditions summarized in the text].
App. at 41-43.
2
This rule is virtually identical to Federal Rule of Civil Procedure 23(b)(1) and (2)
3
Title 15 U.S.C. Sec. 78aa provides in relevant part that "[t]he district courts of the United States ... shall have exclusive jurisdiction of violations of this chapter ..., and of all suits in equity and actions at law brought to enforce any liability or duty created by this chapter." Id. (emphasis added)
4
"Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State." U.S. Const. art. IV, Sec. 1. Congress has extended the reach of the Full Faith and Credit Clause to require federal courts to uphold the judgments of state courts. 28 U.S.C. Sec. 1738 (1988). The full faith and credit statute provides that state court judgments "shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken." Id
5
Plaintiff Grimes does not contest that the Delaware Court of Chancery had personal jurisdiction over him as he appeared at the settlement hearing to litigate his objections
6
The state of Delaware is the situs of ownership of all stock in Delaware corporations. Del.Code Ann. tit. 8, Sec. 169 (1991)
7
We need not articulate whether we agree or disagree with most of what Judge Hutchinson has written in dissent because his opinion focuses on an issue that is beyond the scope of this case, namely whether it is constitutional for a court to bind a non-resident, non-consenting member of a non-opt-out class who has insufficient contacts with the forum. In light of our analysis as set forth above, we hold that Holbrook had sufficient contacts with the Delaware forum to be bound by the settlement agreement and judgment entered into on behalf of the class plaintiffs by the Delaware Court of Chancery. In addressing this holding, Judge Hutchinson expresses without analysis that he fails to see why Holbrook's affirmative act of tendering his shares to the Delaware corporation provides a further, sufficient contact with the Delaware forum so that the Court of Chancery could exercise specific jurisdiction over him
8
We recognize that in Shutts the Supreme Court addressed the minimal due process requirements to bind absent members of a plaintiff class who had an opportunity to opt out. Id. at 812, 105 S.Ct. at 2974. The Court described the class action device as one that protects the interests of absent plaintiffs through court inquiry into the common nature of all claims, the adequacy of representation, proper jurisdiction over the class, as well as a judicial determination of the fairness and adequacy of any proposed settlement agreed upon by the parties. Id. at 809-10, 105 S.Ct. at 2973. Although the present case involves a class action in which the absent plaintiffs were not given the additional procedural protection of an opportunity to opt out, we conclude that the due process protections as articulated in Shutts are sufficient to bind absent class members who had sufficient minimum contacts with the forum
9
The class notice contained a section entitled "DISMISSAL OF THE CONSOLIDATED ACTION AND RELEASE OF CLAIMS." App. at 533-34. This section stated in relevant part:
All claims, rights, causes of action, suits, matters and issues, known or unknown, that arise now or hereafter out of, or that relate to, or that are, were or could have been asserted in connection with ... N[etwork's] proposals to acquire Vitalink stock ..., the disclosures made in the Schedule 14D-9, the Offer and the Merger, ..., by any member of the Class ... shall be compromised, settled, released and discharged.
Id. Holbrook does not contend that he failed to receive this written notification.
10
The language contained in the release negotiated by the parties was very broad in scope, see supra note 1, and manifests an intent to settle all disputes that did or might arise out of the merger transaction. Consistent with the reading of the district court, see Grimes, 1993 WL 56032, at * 3, we interpret the settlement agreement to release all potential causes of action, even those like the present claims that can only be brought in federal court. See, e.g., Erie Telecommunications, Inc. v. City of Erie, Pa., 853 F.2d 1084, 1097 (3d Cir.1988) (broad language of a release "was obviously meant to put an end to all disputes ... arising out of" a franchise agreement transaction)
"Under Delaware law, even a provision that releases 'any matter related to any of the acts or transactions described in the complaints in the said actions' will not be struck down as too general." Nottingham Partners, 925 F.2d at 33 n. 3 (quoting Rutman v. Kaminsky, 226 A.2d 122, 126 (Del.1967)). Thus, as the Nottingham Partners court found, "breadth is not a problem." 925 F.2d at 33 n. 3.
11
The district court stated: "Grimes argued that defendants had breached their duty of care in approving the offer and merger, and breached their duty of candor under Delaware law and federal securities laws." Id. (emphasis added). Although Grimes and Holbrook have not specifically argued that this factual finding is clearly erroneous, we have reviewed it and find it amply supported by the record. See In re Vitalink, [1991-92 Transfer Binder] Fed.Sec.L.Rep. (CCH) p 96,585, at 92,743, 1991 WL 238816 (Del.Ch. Nov. 8, 1991) ("The objectors argue that the Board failed to satisfy their duty of candor under Delaware law and their duty not to make material misrepresentations in the offering documents under federal law.")
12
The Supreme Court recognized that "a state court will not have occasion to address the specific question whether a state judgment has issue or claim preclusive effect in a later action that can be brought only in federal court." Id. at 381-82, 105 S.Ct. at 1332. This is necessarily so because a state court would not possess subject matter jurisdiction to entertain such a case in the first instance. We note, however, that a state court might need to address this issue as a collateral matter to determine the merits of an underlying legal claim such as attorney malpractice, or to determine the rights of certain parties in a state receivership proceeding. Such an inquiry by a state court of competent jurisdiction would be rare indeed. To the limited extent the Delaware courts have addressed this question, they recognize that the parties to a fair and procedurally sufficient global settlement "are bound by the release or the doctrine of issue preclusion." In re MCA, Inc., 598 A.2d 687, 691 (Del.Ch.1991)
1
See infra pp. 1572-73 for a discussion of the impact of federalism
2
Pennoyer 's so-called iron fence theory of territorial jurisdiction was expressly superseded by International Shoe's more flexible due process test. See International Shoe, 326 U.S. at 316, 66 S.Ct. at 158
3
Similar problems of personal jurisdiction arose as interpleader evolved in the United States. There, in an effort to avoid the problem of personal jurisdiction that accompanies a federal system of dual state and national sovereignty, parties to claims against insurance companies, entities that commonly face conflicting claims to a single fund, sought from the one side to attach the obligation or from the other to pay it into court in order to create a res whose ownership could be litigated without a need for personal jurisdiction. In one of these cases, on appeal from this Court, the Supreme Court rejected such efforts to avoid the requirement of in personam jurisdiction. New York Life Ins. Co. v. Dunlevy, 241 U.S. 518, 522, 36 S.Ct. 613, 614, 60 L.Ed. 1140 (1916). Congress then attempted to solve the problem of personal jurisdiction by enacting the Federal Interpleader Act, now codified at 28 U.S.C.A. Secs. 1335, 1397, 2361 (West 1993). It permits nationwide service of process in actions in interpleader. 28 U.S.C.A. Sec. 2361
4
Cf. Doumani v. Casino Control Comm'n, 614 F.Supp. 1465, 1471-73 (D.N.J.1985) (New Jersey Casino Commission had in personam jurisdiction over nonresident shareholders of New Jersey casino corporation only because shareholders' substantial stock interest gave them ability to significantly affect casino operation in New Jersey. Jurisdictional objection arguably waived.)
5
Quoting Note, Phillips Petroleum Company v. Shutts: Procedural Due Process and Absent Class Members: Minimum Contacts Is Out--Is Individual Notice In?, 13 Hastings Const. L.Q. 817, 821 (1986); Note, Phillips Petroleum Company v. Shutts: Multistate Plaintiff Class Actions: A Definite Forum, But Is It Proper?, 19 John Marshall L.Rev. 483, 485 (1986)
6
For an analogous solution proposing factors for a balancing test, see Miller & Crump, supra, at 55-56. They propose a four factor balancing test to determine the propriety of mandatory class certification after Shutts. The factors they would consider are: (1) efficiency, i.e., the economies of scale that can be achieved in a class action; (2) equity concerns, i.e., whether some plaintiffs will be unfairly harmed if other plaintiffs litigate first and whether defendants may be subjected to multiple liability, such as is present in the mass tort cases by virtue of punitive damages; (3) the concern about distant forum abuse; and (4) the interest in individualized control. Id
7
The court of appeals in In re A.H. Robins Co., after extensively discussing Shutts' impact on actions for money damages and recognizing that even "if [Shutts is] taken as requiring an opt-out provision in any class certification," did not reach or decide the issue of jurisdiction because the Trust Plan did include an implied chance to opt out. In re A.H. Robins Co., 880 F.2d at 745 (emphasis added)
8
The text of Delaware Chancery Rule 23 is the same as that of Federal Rule of Civil Procedure 23. Both jurisdictions recognize non-opt-out classes under (b)(1) and (b)(2). Cf. Fed.R.Civ.P. 23(b)(1), (b)(2); In re Joint Eastern & Southern District Asbestos Litig., 982 F.2d 721, 739 (2d Cir.1992) (mandatory non-opt-out class under Rule 23(b)(1)(B) in action seeking equitable distribution of res of trust established pursuant to confirmed Chapter 11 Plan), opinion modified on reh'g, 993 F.2d 7 (2d Cir.1993). I note that Wright and Miller, in discussing antitrust and securities fraud actions including those for misrepresentation, generally refer only to Federal Rule 23(b)(3), not (b)(1) or (b)(2), as a vehicle for the class action suit. See Charles A. Wright et al., 7B Federal Practice & Procedure Civil 2d (hereinafter "Federal Practice & Procedure" ) Sec. 1781 at 4-5, 33; id. Sec. 1778 at 529-33 & n. 14. Thus, it is not clear to me that this case involves a non-opt out class
9
Cf. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950) (involving question of due process notice requirement in judicial settlement of trust fund, where trust company sought binding settlement over all beneficiaries of the trust on the sole basis of notice by publication)
10
Conventional notions of express or implied preemption were never presented here either in the district court or this Court. Therefore, I do not believe it would be appropriate to consider directly any actual or potential conflict between Delaware Rule 23(b)(2) and the Securities Exchange Act or the Williams Act
11
The parties have cited only two courts of appeals' cases that have addressed a state court's power to relinquish federal rights through approval of a class action settlement. See Nottingham Partners v. Trans-Lux Corp., 925 F.2d 29, 33-34 (1st Cir.1991); Abramson v. Pennwood Investment Corp., 392 F.2d 759, 762 (2d Cir.1968). Abramson was a federal stockholders derivative action that was barred because the corporation had released all related claims in a state court settlement. 392 F.2d at 760. Because Abramson was a derivative action, as opposed to a representative suit, the claims released belonged to the corporation and there should be little doubt about a corporation's ability to release its own claims. See National Super Spuds, Inc. v. New York Mercantile Exch., 660 F.2d 9, 18-19 (2d Cir.1981). This case is a representative action, not a derivative action. As such, it is distinguishable
TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456 (2d Cir.1982), the other case cited by the parties, is also distinguishable. It concerned a settlement of a federal action that released defendants from all claims the plaintiff class might assert in a state appraisal proceeding. The objectors in TBK Partners never challenged the district court's certification of the class as a non-opt-out class. Thus, the court expressly reserved that question, stating "[w]e therefore do not consider the case of a release of claims of members of a class that had been improperly certified as a non-opt-out class." Id. at 460 n. 4; see also In re Real Estate Title & Settlement Servs. Litig., 869 F.2d 760, 770 (3d Cir.), cert. denied, 493 U.S. 821, 110 S.Ct. 77, 107 L.Ed.2d 44 (1989) (assuming that federal court in properly certified Rule 23(b)(1) and (2) class action could validly approve release of state claims). Cf. Nottingham Partners, 925 F.2d at 31, 34 (Delaware court had approved settlement of a class action including release of federal claims, but Nottingham had already unsuccessfully litigated its inclusion in a non-opt-out class in the Delaware proceedings).
12
Though our opinions in the case concern the rights of an absent plaintiff, we should not ignore the problems a defendant or defendants could face if a judgment or decree favorable to the plaintiffs binds the defendants but also permits non-consenting, non-resident plaintiffs to seek additional relief. One way to reduce that problem is to refuse to give non-consenting members of a plaintiff class the benefit of issue preclusion
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417 F.2d 126
LENOX, INCORPORATED, Petitioner,v.FEDERAL TRADE COMMISSION, Respondent.
No. 241.
Docket 32476.
United States Court of Appeals Second Circuit.
Argued April 24, 1969.
Decided October 10, 1969.
Andrew C. Hartzell, Jr., New York City (Debevoise, Plimpton, Lyons & Gates, Meredith M. Brown, New York City, on the brief), for petitioner.
Gerald J. Thain and Jerold D. Cummins, Washington, D. C. (James McI. Henderson, Gen. Counsel for the F.T.C., J. B. Truly, Asst. Gen. Counsel, on the brief), for respondent.
1
Before LUMBARD, Chief Judge, ANDERSON, Circuit Judge, and WYATT, District Judge.*
WYATT, District Judge:
2
Before us is a petition of Lenox, Incorporated (Lenox) praying that an order of the Federal Trade Commission (the Commission) be set aside or modified. The order of the Commission was made under the Federal Trade Commission Act (15 U.S.C. § 41 and following; sometimes "the Act"), specifically Section 5(a) (1) of the Act (15 U.S.C. § 45(a) (1)) forbidding unfair methods of competition. Review by this Court of such an order is provided for in Section 5(c) of the Act (15 U.S.C. § 45 (c)).
3
Lenox makes fine china dinnerware (plates, cups and saucers, etc.) and fine china giftware (vases, ashtrays, etc.). It sells these throughout the United States directly to a large number of retailers, such as department stores, jewelry stores, and gift shops. The products of Lenox are sold under the trademarks "Lenox" and "Oxford" and over many years have become well known under these names for their high quality.
4
The Commission in October 1966 issued a complaint against Lenox charging a violation of Section 5(a) (1) of the Act in that Lenox had engaged in an unfair method of competition by a system of resale price maintenance. It had years ago been held that such a system was an unfair method of competition within the meaning of Section 5 of the Act. Federal Trade Commission v. Beech-Nut Co., 257 U.S. 441, 42 S.Ct. 150, 66 L.Ed. 307 (1922) (McKenna, Holmes, McReynolds, and Brandeis, JJ., dissenting).
5
Beginning some years ago, however, a number of state legislatures passed laws which, for trademarked products such as those of Lenox, made it lawful for a sales contract to fix resale prices. These statutes are usually called "fair trade laws." Many such statutes also provided that if any seller in the state had made a contract with a retailer fixing resale prices, the seller could enforce observance of such retail prices against all retailers in the state, whether they were parties to such a contract or not; those not parties to such a contract were called "nonsigners."
6
In 1937, Congress adopted the Miller-Tydings Act as an amendment to Section 1 of the Sherman Act (15 U.S.C. § 1). Thereby Congress made lawful in interstate commerce under the antitrust laws and under Section 5 of the Federal Trade Commission Act those fair trade contracts which by state law were lawful for intrastate transactions.
7
In Schwegmann Bros. v. Calvert Corp., 341 U.S. 384, 71 S.Ct. 745, 95 L.Ed. 1035 (1951) the Supreme Court held that the Miller-Tydings Act did not make retail price fixing lawful as against nonsigners.
8
Congress then passed in 1952 the McGuire Act (66 Stat. 632) as an amendment to Section 5 of the Federal Trade Commission Act. The purpose of the McGuire Act was to reverse the Schwegmann decision and "to provide that if the State statutory scheme permitted price maintenance against nonsigners, such contracts would be immunized from antitrust violations." Janel Sales Corp. v. Lanvin Parfums, Inc., 396 F.2d 398, 402 (2d Cir), cert. denied 393 U.S. 938, 89 S.Ct. 303, 21 L.Ed.2d 275 (1968).
9
Lenox, before issuance of the Commission's complaint, had not made any fair trade contracts. After issuance of the Commission's complaint, however, Lenox changed its policy and began to make express written fair trade contracts in those states where such contracts were lawful.
10
After answer and the taking of evidence, the Hearing Examiner in May 1967 filed his initial decision and proposed order. He found that Lenox had adopted and employed a system of establishing resale prices for its products and he proposed a cease and desist order; he proposed, however, that the order expressly provide that it did not affect any resale price maintenance contracts which Lenox might make in accordance with Section 5 of the Federal Trade Commission Act as amended by the McGuire Act. The effect of this last proviso was to permit Lenox to fix resale prices in "fair trade" states where this was lawful.
11
The Commission in its final order departed in several respects from the order proposed by the Hearing Examiner.
12
The principal change made by the Commission was to eliminate the proviso permitting Lenox to make fair trade contracts where lawful. Instead, the Commission (order, paragraph 9) forbade Lenox to make any such contracts for three years.
13
The Commission also (order, paragraph 6) prohibited the use by Lenox of suggested resale price lists for three years, instead of the two years proposed by the Hearing Examiner. The Commission (order, paragraph 5) prohibited, without time limit, sales by Lenox to dealers at a discount from a retail price; the Hearing Examiner proposed that this prohibition be for two years. There should logically be the same time limit for both prohibitions (paragraphs 5 and 6) and the form of the Commission's order must be the result of inadvertence.
14
The basic attack by Lenox on the order must fail. We are satisfied that there is substantial evidence to support the finding of the Commission that Lenox "entered into illegal price maintenance agreements with its dealers." The activities of Lenox were similar to those found illegal in United States v. Parke, Davis & Co., 362 U.S. 29, 80 S.Ct. 503, 4 L.Ed.2d 505 (1960). They were too extensive to pass through the "narrow channel" left after the Parke, Davis decision. George W. Warner & Co. v. Black & Decker Mfg. Co., 277 F.2d 787, 790 (2d Cir. 1960).
15
There is no justification, however, for that part of the order (paragraph 9) which forbids Lenox to make resale price maintenance agreements in states where such agreements are lawful. Not only is such conduct lawful; it is sanctioned by a public policy twice declared by Congress, first in the Miller-Tydings Act and again in the McGuire Act. Against this background, no remedial purpose can be seen for the prohibition; it can only be regarded as punitive. In this connection we have reexamined United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 64 S.Ct. 805, 88 L.Ed. 1024 (1944), on which the Commission chiefly relies. The distribution system there before the Supreme Court and the place of fair trade agreements in that system were greatly different (including an involvement of both wholesalers and retailers) from the situation with respect to Lenox; this difference deprives the decision of any strength as a precedent here. It may also be noted that the Supreme Court declined to approve any restriction on fair trade contracts for a longer period than six months.
16
Thus, paragraph 9 of the Commission's order must be eliminated and the following substituted therefor:
17
"9. Nothing hereinabove contained shall be construed to limit or otherwise affect any resale price maintenance contracts that respondent may enter into in conformity with Section 5 of the Federal Trade Commission Act, as amended by the McGuire Act (66 Stat. 632 [1952], 15 USC 45 [a]);"
18
The effect of this provision is to limit the force of paragraph 6 of the order to states where Lenox has no lawful fair trade agreements.
19
Paragraph 5 of the Commission's order should be modified, for the reason already indicated, so that the paragraph will read as follows:
20
"5. Selling to dealers at a mark down or discount from a resale or retail price for a period of three years following the effective date of this order. Provided, however, that respondent may, two years following the effective date of this order, upon a showing that competition in the resale of its products has been restored, petition the Commission to repeal this provision;"
21
The force of this paragraph 5 is also limited to states where Lenox has no lawful fair trade agreements.
22
We have reviewed the objections of Lenox to procedural matters — (a) the admission of documentary evidence and (b) the receipt of testimony from a witness, a former Lenox dealer, whose reinstatement was required by the proposed order and who was given a copy of that order (with the complaint) before testifying. We do not find sufficient merit in these objections to affect the order of the Commission. It does not seem to us a good practice, however, to show a prospective Commission witness a copy of a proposed order under which the witness would secure a benefit.
23
The petition is denied in part and granted in part. The Commission's order is affirmed as modified and as modified may be enforced. The judgment will be settled in accordance with Rule 19 of the Federal Rules of Appellate Procedure.
Notes:
*
Of the Southern District of New York, sitting by designation
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378 F.Supp. 376 (1974)
FAIRFIELD COUNTY BEVERAGE DISTRIBUTORS, INC., Plaintiff,
v.
NARRAGANSETT BREWING COMPANY, Defendant.
Civ. No. B-87.
United States District Court, D. Connecticut.
July 19, 1974.
Thomas E. Minogue, Jr., Joel E. Kanter, Bridgeport, Conn., for plaintiff.
David M. Reilly, Jr., Reilly, Peck, Raffile & Lasala, New Haven, Conn., for defendant.
LUMBARD, Circuit Judge:[*]
This is a private action for treble damages under the antitrust laws. Plaintiff Fairfield County Beverages Distributors, Inc. (Fairfield) is a wholesale distributor of soft drinks and beer to retail outlets in Connecticut. From June 1966 to December 1968 Fairfield was the wholesale distributor in certain parts of Fairfield County of the beer products manufactured by defendant Narragansett Brewing Company (Narragansett). *377 Narragansett is a brewer of several brands of beer and is located in Cranston, Rhode Island.
Fairfield claims that territorial restrictions placed on its distribution of Narragansett products during the period in which it was a distributor of them violated Section 1 of the Sherman Act, 15 U.S.C. § 1. By agreement of the parties a bench trial concerned solely with the question of defendant's liability under the Sherman Act was held on May 8, 1974.
Fairfield has been in the wholesale distribution of soft drinks and beer since 1953. In the spring of 1966 Fairfield was distributing soft drinks throughout the Fairfield County area and was distributing certain private label beers to chain stores throughout Connecticut. Under the applicable Connecticut liquor laws and regulations Narragansett was an out-of-state shipper which could only sell its product to a licensed manufacturer or wholesaler in the State of Connecticut. Section 30-6-B7 of the Connecticut liquor regulations then in effect provided for the appointment of such distributors of an out-of-state shipper's products:
Each manufacturer and out-of-state shipper permittee shall file with the [liquor control] commission a list of his authorized distributors, setting forth the brands and also the exact geographical area in which the distributor or wholesaler shall be authorized to sell, and shall also file a certificate from the wholesaler to the effect that he is, in fact, servicing the area designated and no other area for the brand or brands for which he has been appointed as distributor. No change on the list of authorized distributors or wholesalers of a manufacturer or out-of-state shipper shall be made except after ninety days' notice by registered mail to all such authorized distributors or wholesalers affected by such change which appear on the list of the particular manufacturer or out-of-state shipper as recorded in the office of the liquor control commission, and except after ninety days' like notice to and approval by the liquor control commission. Such changes may be made without waiting the ninety days with approval of the commission where waivers are executed by the distributors or wholesalers concerned, or where the geographical area of distribution has not been already allocated to a distributor or wholesaler, or after a hearing has been held, upon presentation of sufficient evidence of any violation of the liquor control act or regulations of the commission, or evidence of any other act detrimental to the orderly conduct of the business, in which a present authorized distributor or wholesaler has been involved. The notice of change shall indicate that the name of the permittee is to be an additional distributor or wholesaler or, in the case of eliminating the name of a present distributor or wholesaler, with or without substituting another permittee's name, the notice of change shall so indicate an "elimination" or "substitution." Geographical areas of distribution shall be submitted either by townships or counties or statewide, and any change in geographical area of distribution shall fully conform to the same essential conditions as required in the notice of change to distributors or wholesalers.
The evidence at trial indicated that with the exception of private label brands sold to chain stores the liquor control commission required that a wholesaler be prepared to supply all the retailers within his geographic area with the brands he distributed. There were also additional state regulations which provided for the setting of minimum consumer prices below which intoxicating beverages could not be sold, as well as a system of posting uniform prices on liquor sold by wholesalers to retailers.
In the spring of 1966 Fairfield and Narragansett discussed the possibility of plaintiff's becoming defendant's distributor in the Fairfield County area. At this time the towns of Stratford and *378 Milford were serviced by the Hannon Distributors Company. Three other distributors handled most of the rest of Fairfield County. One distributed Narragansett and Krueger beer throughout this area, while the other two distributed Haffenreffer beer, another Narragansett brand, in separate, non-overlapping territories. Narragansett decided to give Fairfield an exclusive distributorship in the area served by the three other distributors for the Narragansett, the Krueger, and the Haffenreffer brands.[1] Hannon Distributors was to continue to service Milford and Stratford. The requisite waivers were obtained from the other three distributors and in June 1966 Fairfield was appointed a distributor for Narragansett.
Fairfield served as a distributor for Narragansett for two and a half years. Fairfield's president, Jack Greengarden, testified that several times during this period he requested that Narragansett expand his territory to include an exclusive distributorship in Milford and Stratford and the right to distribute Narragansett products to the supermarket chains Fairfield serviced throughout Connecticut. Narragansett never agreed to expand Fairfield's area. Instead, Narragansett's representative, Dominic DiFolco, made it very clear that Fairfield was not to sell outside the territory that it had been given. On two occasions when Fairfield sold Narragansett beer to stores considered to be in Stratford, DiFolco said that these sales must not be repeated.
Narragansett terminated Fairfield's distributorship in December 1968. Originally the second count of the complaint in this case alleged that the termination had been caused by Fairfield's efforts to sell a competitor's products. This count, however, has been dismissed by agreement of the parties. In fact, the evidence brought out at trial indicates that Fairfield was terminated for other reasons, among them the selling to several taverns draft beer that had gone bad due to inadequate refrigeration by Fairfield.
Fairfield argues that Narragansett's efforts to restrict the area in which it could sell Narragansett's products constitutes a per se violation of Section 1 of the Sherman Act. It bases this argument on United States v. Arnold, Schwinn & Co., 388 U.S. 365, 87 S.Ct. 1856, 18 L.Ed.2d 1249 (1967), where the Supreme Court said: "As the District Court held, where a manufacturer sells products to his distributor subject to territorial restrictions upon resale, a per se violation of the Sherman Act results." 388 U.S. at 379, 87 S.Ct. at 1865 (emphasis original). Fairfield argues that although Connecticut requires that a territory of a wholesaler be filed with the liquor control commission, it does not require that the area be limited in scope to only one part of the state nor does it require that the territory be an exclusive one. Fairfield argues that it was Narragansett, not Connecticut, that chose to limit Fairfield's area to only part of Fairfield County. Fairfield argues that it could have been appointed an additional distributor for the whole State of Connecticut.
It is clear that Schwinn requires that the plaintiff must prevail unless Connecticut's liquor regulations either limit the scope of the Schwinn rule or the Sherman Act itself. The beer here was sold to Fairfield; indeed Connecticut liquor regulations forbade consignment arrangements. Beer is subject to the Schwinn per se rule even though it is perishable. Adolph Coors Co. v. FTC, 497 F.2d 1178 (10th Cir. 1974), BNA Antitrust & Trade Reg. Rep., June 11, 1974, at D-1. Narragansett clearly tried to enforce these territorial restrictions, so the requirement of Janel Sales Corp. v. Lanvin Parfums, Inc., 396 F.2d 398, 406-407 (2d Cir.), cert. denied, 393 U.S. 938, 89 S.Ct. 303, 21 L.Ed.2d 275 (1968), has been met. *379 Finally, the fact that Fairfield benefited from exclusive territories, while possibly relevant to the question of damages, is irrelevant to the question of liability since in pari delicto is no defense in antitrust cases. Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 88 S.Ct. 1981, 20 L.Ed.2d 982 (1968).
Section 2 of the Twenty-first Amendment provides: "The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited." The Supreme Court has made it "clear in the early years following adoption of the Twenty-first Amendment that by virtue of its provisions a State is totally unconfined by traditional Commerce Clause limitations when it restricts the importation of intoxicants destined for use, distribution, or consumption within its borders." Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U.S. 324, 330, 84 S.Ct. 1293, 1296, 12 L.Ed.2d 350 (1964). See, e. g., Joseph E. Seagram & Sons, Inc. v. Hostetter, 384 U.S. 35, 86 S.Ct. 1254, 16 L.Ed.2d 336 (1966); State Board of Equalization v. Young's Market Co., 299 U.S. 59, 57 S.Ct. 77, 81 L.Ed. 38 (1936); cf. California v. La Rue, 409 U.S. 109, 93 S.Ct. 390, 34 L. Ed.2d 342 (1972). Therefore, Connecticut's regulations concerning the distribution of Narragansett's products are valid.
While the wisdom of per se rules concerning territorial restrictions of distribution has been extensively discussed, see, e. g., Bork, The Rule of Reason and the Per Se Concept: Price Fixing and Market Division (pt. 2), 75 Yale L.J. 375 (1966); Comanor, Vertical Territorial and Customer Restrictions: White Motor and Its Aftermath, 81 Harv.L. Rev. 1419 (1968); Note, Territorial Restrictions and Per Se Rules A Re-evaluation of the Schwinn and Sealy Doctrines, 70 Mich.L.Rev. 616 (1972), the Supreme Court has given no indication of any retreat from per se rules in this area, see United States v. Topco Associates, Inc., 405 U.S. 596, 92 S.Ct. 1126, 31 L.Ed.2d 515 (1972). But this does not mean that every territorial restriction on distribution when a product is sold necessarily violates a Schwinn per se rule. The Third Circuit in Tripoli Co. v. Wella Corp., 425 F.2d 932 (3d Cir.), cert. denied, 400 U.S. 831, 91 S.Ct. 62, 27 L.Ed.2d 62 (1970), concluded that restrictions on resale were not per se illegal when justified by considerations of safety.
Here Connecticut has imposed many restrictions on intraband competition between the distributors of a single brand of beer. There are minimum consumer prices and uniform prices on beer sold to retailers that must be followed. The record does not indicate precisely how these prices are set nor what degree of price competition remains in Connecticut between the various distributors and retailers of Narragansett beer, but it is fair to say that price competition may be sharply curtailed. Connecticut has made any change in territories burdensome in procedure by requiring a ninety-day waiting period and notice to affected distributors, thus restricting the more rapid changes in territories served by distributors that would occur without these procedures. Furthermore, Connecticut has also required that a distributor be willing to serve every retailer in its area. Thus if Fairfield's area had been the whole state of Connecticut, it would have had to service every retailer in the state, no matter how small, not just the large chain stores, as it wished to do. It can be maintained that these regulations so restrict intraband competition, the promotion of which is the major economic justification of the Schwinn rule, that the Schwinn rule should no longer apply. It would then be incumbent upon Fairfield to show that Narragansett unreasonably restrained trade, which it has failed to do. However, this matter need not be decided since the court concludes that Connecticut's *380 regulations have placed Narragansett's conduct altogether beyond the pale of the Sherman Act.
The Sherman Act applies in cases in which its applicability would not defeat the state's liquor policy. United States v. Frankfort Distilleries, Inc., 324 U.S. 293, 65 S.Ct. 661, 89 L.Ed. 951 (1945); United States v. Connecticut Package Stores Association, Inc., 205 F.Supp. 789 (D.Conn.1962) (Blumenfeld, J.). Here, however, Connecticut has permissively allowed, and apparently encouraged, Narragansett to set up territories of less than the whole state beyond which a distributor cannot sell. Connecticut has also permitted Narragansett to set up exclusive distributorships within these restricted territories. The most extensive discussion in the Supreme Court of the interrelationship between the Sherman Act and the Twenty-first Amendment is Mr. Justice Frankfurter's concurring opinion in Frankfort Distilleries. He said there that the Twenty-first Amendment freed a state from the strictures of the Commerce Clause in regulating the traffic of liquor within its borders, but the operation of the Commerce Clause continued if the state chose not to exercise its powers under the Twenty-first Amendment. The Sherman Act, which derives its authority from the Commerce Clause, has no greater scope than the Commerce Clause itself. The problem then in cases like this is to determine whether the policy of the state sanctions the arrangement alleged to violate the Sherman Act. "Such a policy may be expressed either formally by legislation or by implied permission." 324 U.S. at 301, 65 S.Ct. at 666.
At the very least, Connecticut's regulations must be considered to be "implied permission" for Narragansett's actions. Those actions are therefore immune from the prohibitions of the Sherman Act. Judge McLaren has reached the same conclusion concerning an identical claim under a similar Illinois statute. J. W. T., Inc. v. Kobrand Corp., 1973-2 Trade Cas. ¶ 74,726 (N.D.Ill. 1973).
Accordingly, judgment will be entered for defendant Narragansett Brewing Company. This opinion constitutes the court's findings of fact and conclusions of law, Fed.R.Civ.P. 52(a).
So ordered.
NOTES
[*] Sitting by designation.
[1] In particular, Fairfield was to service one area consisting of the townships of Greenwich, Stamford, New Canaan, Wilton, Weston, Easton, Monroe, Trumbull, Darien, Norwalk, Westport, Fairfield, and Bridgeport.
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48 Cal.App.2d 337 (1941)
BAYSHORE SANITARY DISTRICT, Appellant,
v.
COUNTY OF SAN MATEO, Respondent.
Civ. No. 11872.
California Court of Appeals. First Dist., Div. Two.
Dec. 8, 1941.
Frank V. Kington for Appellant.
Gilbert D. Ferrell, District Attorney, for Respondent.
SPENCE, J.
Plaintiff brought this action seeking declaratory relief against the defendant county of San Mateo. The *338 trial court sustained defendant's demurrer to the complaint without leave to amend and this appeal followed.
A preliminary point raised by defendant should be mentioned. The order sustaining the demurrer without leave to amend was entered on September 23, 1940, but, through inadvertence, no judgment was entered at that time. On October 2, 1940, plaintiff served and filed its notice of appeal "from the judgment entered in the above entitled superior court on the 23rd day of September, 1940, in favor of defendant and against plaintiff, and from the whole thereof." On October 24, 1940, the trial court signed and caused to be entered a judgment in favor of defendant and ordered that "this judgment be entered nunc pro tunc this day as of September 23, 1940."
While defendant calls our attention to the above mentioned facts, it appears unnecessary to discuss the situation thus presented. Defendant has made no motion to dismiss the appeal and, for the reasons hereinafter stated, we believe the trial court correctly sustained defendant's demurrer without leave to amend and that the judgment in favor of defendant should be affirmed.
[1a] The main question argued by the parties is the question of whether the section 1060 of the Code of Civil Procedure, relating to actions for declaratory relief, authorizes the bringing of such an action against the state or its political subdivisions. Plaintiff claims that it does and defendant claims that it does not.
Said section 1060 reads as follows: "Any person interested under a deed, will or other written instrument, or under a contract, or who desires a declaration of his rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an action in the superior court for a declaration of his rights and duties in the premises, including a determination of any question of construction or validity arising under such instrument or contract. He may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of such rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative *339 in form and effect, and such declaration shall have the force of a final judgment. Such declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought."
The foregoing section authorizes any "person" to bring such action against "another" under certain circumstances. Is the state or one of its political subdivisions a "person" within the meaning of said section?
[2] Plaintiff argues that "A corporation, whether private or public, is a person," (See City of Pasadena v. Stimson, 91 Cal. 238, 248 [27 P. 604]), but this general statement is subject to the qualification that in statutes creating new rights or affording new remedies, general language will not be held to create such rights or to afford such remedies against the state or its political subdivisions in the absence of a clear indication that such was the legislative intent. (Newcomb v. City of Newport Beach, 7 Cal.2d 393 [60 PaCal.2d 825]; Kearney Inv. Co. v. Golden Gate Ferry Co., 198 Cal. 560 [246 P. 322]; State v. Royal Consolidated Mining Co., 187 Cal. 343 [202 P. 133]; Berton v. All Persons, 176 Cal. 610 [170 P. 151]; Miles v. Ryan, 172 Cal. 205 [157 P. 5] Whittaker v. County of Tuolumne, 96 Cal. 100 [30 P. 1016]; Mayrhofer v. Board of Education, 89 Cal. 110 [26 P. 646, 23 Am.St.Rep. 451].) This rule of statutory construction is expressed in 23 Cal. Juris. at page 625: "Statutes are ordinarily designed for the government of citizens and residents rather than the state, and it is settled that the state is not bound by general words of a statute or code provision which would operate to trench upon its sovereign rights, injuriously affect its capacity to perform its functions, or establish a right of action against it, unless the intent to bind it thereby otherwise clearly appears. General language should not be construed to apply to the government or its agencies unless expressly included by name." (See also 23 Cal.Jur. 579; Balthasar v. Pacific Elec. Ry. Co., 187 Cal. 302 [202 P. 37, 19 A.L.R. 452]; Lossman v. City of Stockton, 6 Cal.App.2d 324 [44 PaCal.2d 397].)
[1b] The section under consideration contains only general language, there being no express mention by name of the state or any of its political subdivisions. Furthermore, a reading of the entire section does not give any clear indication that the legislature intended that actions for declaratory *340 relief should be maintained thereunder against the state or any of its political subdivisions. Under these circumstances, we are of the view that the authorities above cited sustain the position taken by the trial court.
In reaching the foregoing conclusion, we are aware of the fact that actions for declaratory relief have been brought against certain political subdivisions of this state and that it has been assumed in certain decisions that said remedy was available. (See Henderson v. Oroville-Wyandotte Irrigation District, 207 Cal. 215 [277 P. 487]; Andrews v. City of Piedmont, 100 Cal.App. 700 [281 P. 78].) It does not appear, however, that it was urged in said cases that said remedy was not available against such political subdivisions because of the rules of statutory construction to which reference has been made. We see no escape from the foregoing conclusion under the authorities hereinbefore cited.
The judgment is affirmed.
Nourse, P. J., and Dooling, J. pro tem., concurred.
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990 F.2d 1261
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.UNITED STATES of America, Plaintiff-Appellant,v.Ramon BONILLO-CASTRO, Defendant-Appellee.
No. 92-50379.
United States Court of Appeals, Ninth Circuit.
Submitted March 10, 1993.*Decided March 18, 1993.
Before WALLACE, Chief Judge, and FARRIS and BRUNETTI, Circuit Judges.
1
MEMORANDUM**
2
The United States appeals the 106-month sentence imposed on Ramon Bonillo-Castro, following his guilty plea, for conspiracy to distribute heroin in violation of 21 U.S.C. §§ 841(a)(1) and 846, and use of a firearm during a drug trafficking crime in violation of 18 U.S.C. § 924(c)(1). The government contends that the district court erred by imposing a sentence below the statutorily-mandated minimum. We have jurisdiction under 28 U.S.C. § 1291, and we vacate and remand.
3
We review de novo a district court's decision to depart below the statutorily-mandated minimum sentence. United States v. Vilchez, 967 F.2d 1351, 1353 (9th Cir.1992).
4
Under the Guidelines, if "a statutorily required minimum sentence is greater than the maximum of the applicable guideline range, the statutorily required minimum sentence shall be the guideline sentence." U.S.S.G. § 5G1.1(b); see also United States v. Sharp, 883 F.2d 829, 831 (9th Cir.1989). A district court may only depart below the mandatory minimum upon a motion of the government reflecting the " 'defendant's substantial assistance in the investigation or prosecution of another person who has committed an offense.' " Vilchez, 967 F.2d at 1355 (quoting 18 U.S.C. § 3553(e)). In limited circumstances, the district court may depart in the absence of a government motion if the government's failure to make the motion was unconstitutionally motivated or not rationally related to any legitimate state objective. Wade v. United States, 112 S.Ct. 1840, 1843-44 (1992).
5
Here, Bonillo-Castro pled guilty to conspiracy to distribute 560 grams of heroin in violation of 21 U.S.C. §§ 841(a)(1) and 846, and use of a firearm during a drug trafficking crime in violation of 18 U.S.C. § 924(c)(1). Although Bonillo-Castro's applicable sentencing range was 46 to 57 months, the statute mandates a sentence of 60 months. See 21 U.S.C. § 841(b)(1)(B)(i). Additionally, section 924(c)(1) required a consecutive 60-month sentence to any other term of imprisonment.
6
At sentencing, the district court imposed a 46-month sentence for the drug offense, followed by a consecutive 60-month sentence for the firearm offense. The court indicated that the 46-month sentence was "in keeping with the minimum mandatory purpose of the statute" because Bonillo-Castro was already serving a consecutive 60-month sentence for the firearm offense. The government contends that the district erred by failing to impose the mandatory 60-month sentence required by statute for the drug offense. We agree.
7
The government did not make a motion for substantial assistance. The record is devoid of any evidence that the government's decision was irrational or based upon an unconstitutional motive. In the absence of a government motion, the district court lacked the authority to disregard the mandatory 60-month sentence applicable to the drug offense. See Vilchez, 967 F.2d at 1356.
8
Accordingly, we vacate Bonillo-Castro's sentence and remand the case for resentencing consistent with this memorandum disposition.
9
VACATED AND REMANDED.
*
The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a); 9th Cir.R. 34-4
**
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
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542 U.S. 960
ALEXANDERv.DRETKE, DIRECTOR, TEXAS, DEPARTMENT OF CRIMINAL JUSTICE, CORRECTIONAL INSTITUTIONS DIVISION.
No. 03-9613.
Supreme Court of United States.
August 23, 2004.
1
Petition for rehearing denied.
2
Reported below: 541 U. S. 1077.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-4202
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
ANTONIO HOOD, a/k/a Tony,
Defendant - Appellant.
Appeal from the United States District Court for the District of
South Carolina, at Rock Hill. Joseph F. Anderson, Jr., Chief
District Judge. (CR-02-1173-JFA)
Submitted: April 21, 2006 Decided: May 25, 2006
Before LUTTIG,* MOTZ, and GREGORY, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Cameron B. Littlejohn, Jr., Columbia, South Carolina, for
Appellant. Marshall Prince, Jonathan Scott Gasser, Assistant
United States Attorney, Columbia, South Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
*
Judge Luttig was a member of the original panel but did not
participate in this decision. This opinion is filed by quorum of
the panel pursuant to 28 U.S.C. § 46(d).
PER CURIAM:
Antonio Hood appeals his conviction and sentence imposed
after he pled guilty to conspiracy to distribute and possess with
intent to distribute fifty grams or more of cocaine base or crack
cocaine and five kilograms of cocaine, in violation of 18 U.S.C.
§§ 841(b)(1)(A), 846 (2000). On appeal, Hood’s counsel filed a
brief under Anders v. California, 386 U.S. 738, 744 (1967), stating
there were no meritorious issues, but raising the issue of whether
the district court complied with Rule 11 in accepting Hood’s guilty
plea and whether the life sentence was required. Hood filed a pro
se supplemental brief alleging ineffective assistance of counsel.
We affirm.
We find no error with respect to either the Rule 11
proceeding or the statutory mandatory life sentence. Hood contends
counsel was ineffective on a number of counts. Insofar as Hood
claims counsel was ineffective for not challenging the drug
quantity in the presentence investigation report, this claim is
without merit because Hood was sentenced to a statutory sentence.
The recommended sentence under the guidelines was not relevant.
With respect to his other challenges to counsel’s effectiveness,
the proper proceeding in which to pursue an ineffective assistance
of counsel claim is not a direct appeal but a collateral proceeding
under 18 U.S.C. § 2255 (2000). United States v. DeFusco, 949 F.2d
114, 120 (4th Cir. 1991). We will entertain such a claim on direct
- 2 -
appeal only if it “conclusively appears” from the record that the
defendant’s counsel was ineffective. United States v. Russell, 221
F.3d 615, 619 n.5 (4th Cir. 2000). Because the record is
incomplete in this regard, the claim will not be reviewed.
As required by Anders, we have reviewed the entire record
and have found no meritorious issues for appeal. We therefore
affirm Hood’s conviction and sentence. This court requires counsel
inform his client, in writing, of his right to petition the Supreme
Court of the United States for further review. If the client
requests that a petition be filed, but counsel believes such a
petition would be frivolous, then counsel may move in this court
for leave to withdraw from representation. Counsel’s motion must
state that a copy thereof was served on the client. We dispense
with oral argument because the facts and legal contentions are
adequately presented in the materials before the court and argument
would not aid the decisional process.
AFFIRMED
- 3 -
|
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860 F.Supp. 393 (1994)
Anthony KEPLER, Rosanne Kepler, Irene Kepler, Brad Kepler, Lisa Kepler, and Terri Kepler, Plaintiffs,
v.
ITT SHERATON CORPORATION, DeBartolo Corporation, Pratt/DeBartolo Associates, d/b/a Sheraton Plaza Hotel, Edward D. DeBartolo Corporation, Pratt Hotel Management Corporation, and Sheraton Inns, Inc., Defendants.
Civ. A. No. 94-71544.
United States District Court, E.D. Michigan, Southern Division.
August 11, 1994.
*394 *395 Geoffrey N. Fieger, Gary S. Fields, Michael A. Schwartz, Fieger, Fieger & Schwartz, Southfield, MI, for Terri Kepler.
Lee C. Patton, Sullivan, Ward, Bone, Tyler & Asher, P.C., Southfield, MI, for Edward D. DeBartolo.
John B. DeMoss, DeMoss & DeMoss, Clinton Tp., MI, for Blue Cross Blue.
Patrick F. Hickey, Dykema Gossett, Detroit, MI, for Alicia Antosiek.
Richard A. Kudla, Richard A. Kudla Assoc., Southfield, MI, for Sheraton Inns Inc.
William D. Booth, Plunkett & Cooney, Detroit, MI, for Edward D. DeBartolo.
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO TRANSFER PURSUANT TO 28 U.S.C. § 1404(a)
GADOLA, District Judge.
This matter is before the court on defendants' motion for change of venue under 28 U.S.C. § 1404(a) for the convenience of the parties and the interest of justice. In the alternative, defendants are seeking dismissal or transfer of this action pursuant to 28 U.S.C. § 1406(a) due to improper venue. For the reasons discussed below, the court will order that the action be transferred to the United States District Court for the Middle District of Florida.
I. Background
On January 15, 1994, plaintiff Anthony Kepler was a guest at the Sheraton Plaza Hotel in Orlando, Florida when he was injured by an electric shock in a hot tub located in the pool area of the hotel. Kepler and his family are seeking recovery of damages based upon the injuries he suffered, allegedly due to defendants' negligence.
While plaintiffs are all citizens of Michigan, the remaining defendants in this matter are all foreign corporations with their principal places of business outside of the state. Defendants ITT Sheraton Corporation and Sheraton Inns, Inc. (the "Sheraton defendants") are Delaware corporations which own and advertise the "Sheraton" trademark. These defendants issued a license for the operation of the hotel at the center of the controversy in this case. Defendants DeBartolo Corporation and Edward D. DeBartolo Corporation (the "DeBartolo defendants") are Ohio developers that are part owners of the hotel and the adjoining shopping mall. Defendant Pratt/DeBartolo Associates ("Pratt/DeBartolo") is a Florida general partnership which does business as the Sheraton Plaza Hotel. Defendant Pratt Hotel Management Corporation ("Pratt") is a Texas corporation that manages the hotel under a license from Pratt/DeBartolo.
Plaintiffs filed this action in the Wayne County Circuit Court on March 16, 1994. Defendants then removed the action to this court on April 19, 1994 on the basis of the court's diversity jurisdiction. Plaintiffs also originally named as defendants American Express Travel Related Services Company and two of its Michigan employees, Jane Ortner and Alicia Antosiek, who booked the hotel room in Florida for Kepler. In their notice of removal, defendants alleged that these three defendants had been fraudulently joined by plaintiffs in order to defeat this court's diversity jurisdiction. Subsequently, *396 these three defendants were dismissed from the case.
The DeBartolo defendants have filed a motion to transfer this case, pursuant to 28 U.S.C. § 1404(a), to the Middle District of Florida because the convenience of the parties and witnesses favors such a change in venue. In the alternative, the DeBartolo defendants have filed a motion to dismiss and/or to transfer under 28 U.S.C. § 1406(a) based on their claim that venue for this case is not proper in the Eastern District of Michigan. In addition, the Sheraton defendants, Pratt, and Pratt/DeBartolo have together filed a separate motion for change of venue based on section 1404(a). Subsequently, the Sheraton defendants joined the motion to transfer pursuant to section 1406(a). Plaintiffs have responded that the action should remain in this district because it is more convenient and because venue is proper.
II. Analysis
A. Improper Venue
Defendants have brought a motion to dismiss that challenges venue in this district pursuant to section 1406(a). Section 1406(a) provides as follows:
The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.
Id. Plaintiffs have the burden of showing that venue is proper. Highland Music, Inc. v. Masters Int'l, Inc., No. 93-71778, 1993 U.S. Dist. LEXIS 15717, at *8 (E.D.Mich. Sept. 16, 1993) (citing Bartholomew v. Virginia Chiropractors Ass'n, 612 F.2d 812, 816 (4th Cir.1979), cert. denied, 446 U.S. 938, 100 S.Ct. 2158, 64 L.Ed.2d 791 (1980)). Because jurisdiction in this matter is premised upon the diversity of the parties, the venue provisions in 28 U.S.C. § 1391(a) apply. Under section 1391(a), venue is proper in
(1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, ..., or (3) a judicial district in which the defendants are subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.
Id.
It appears to the court that plaintiffs base their allegation of proper venue in this district on the first provision of section 1391(a), their claim that all defendants reside in Michigan and that one of the defendants resides in the Eastern District of Michigan.[1] Where an action involves a corporate defendant, for purposes of determining venue, the defendant corporation "shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." Id. § 1391(c). Because all of the defendants in this matter are corporations or corporations engaged in a joint venture, in order to resolve the issue of whether there is improper venue, the court must determine if each of the defendants is subject to personal jurisdiction in the state of Michigan.
When personal jurisdiction is challenged, the burden is on the plaintiffs to establish that the court has jurisdiction over each of the defendants. Welsh v. Gibbs, 631 F.2d 436, 438 (6th Cir.1980), cert. denied, 450 U.S. 981, 101 S.Ct. 1517, 67 L.Ed.2d 816 (1981). However, when determining whether there have been sufficient contacts with the forum state to establish personal jurisdiction, the court must interpret the pleadings and affidavits in the light most favorable to plaintiffs. Id.
A court may exercise personal jurisdiction over an out-of-state defendant only if the defendant is amenable to service of process under the state's long-arm statute, and only if the exercise of personal jurisdiction would not deny the defendant his due process of law. Omni Capital Int'l Ltd. v. Rudolf Wolf & Co., 484 U.S. 97, 104, 108 S.Ct. 404, 409, 98 L.Ed.2d 415 (1987). Michigan's *397 long arm statute regarding general jurisdiction, M.C.L.A. § 600.711, provides that
[t]he carrying on of a continuous and systematic part of a corporation's general business within the state, shall constitute a sufficient basis of jurisdiction over the corporation to enable the courts of record of [Michigan] to exercise general jurisdiction over the corporation and to enable such courts to render personal judgments against the corporation.
Michigan's long-arm statute regarding specific jurisdiction, M.C.L.A. § 600.715, provides that limited personal jurisdiction exists over a corporation that "transact[s] ... any business within the state" where the controversy involved arises out of the transaction of that business within the state.
The principles of general jurisdiction may be applied when the defendant's forum contacts are so substantial that the plaintiff's cause of action need not be related to the defendant's in-state activities. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 9, 104 S.Ct. 1868, 1872 n. 9, 80 L.Ed.2d 404 (1984). Specific jurisdiction is applied when a defendant who would not otherwise be subject to general jurisdiction, has transacted business within the forum and the plaintiff's cause of action arises out of that transaction. Id. at n. 8.
During oral argument, the Sheraton defendants admitted that they were subject to personal jurisdiction in the state of Michigan because they carried on a continuous and systematic part of their business in the state. Counsel for the DeBartolo defendants, however, indicated that he would investigate further to determine if his clients were subject to jurisdiction within the state. The court then directed the parties to supplement the record with additional information concerning the various defendants' contacts with Michigan.
The DeBartolo defendants subsequently submitted an affidavit admitting that the Edward J. DeBartolo Corporation manages a mall in Benton Harbor, Michigan and that it is doing business within the state "as determined by the venue statute." The DeBartolo Corporation does not directly do business in Michigan, but it owns one hundred percent of the stock of the Edward J. DeBartolo Corporation.
The Sheraton defendants also submitted supplemental material. In an affidavit, a representative of ITT Sheraton and Sheraton Inns merely stated that neither company owns any hotel within Michigan. An executive of Pratt Hotel Management stated that his company conducts no business in Michigan. Based on these affidavits, counsel for the Sheraton defendants asked the court to reconsider his admission during oral argument that his clients are subject to personal jurisdiction within the state.
In response to defendants' submissions, plaintiffs contend that even though defendants ITT Sheraton and Sheraton Inns may not own any hotels in Michigan, they still conduct a continuous and systematic part of their business within the state. In support of their contention, plaintiffs identify four hotels in Michigan that are subject to extensive licensing agreements by ITT Sheraton and Sheraton Inns. In addition, plaintiffs cite prior court precedent holding that a corporate defendant that conducts no business within Michigan, but that manages a hotel that is identified with a national hotel chain is subject to limited personal jurisdiction under MCLA § 600.715. Wronikowski v. General Hotels Corporation, 716 F.Supp. 5 (E.D.Mich.1989). In Wronikowski, a Michigan plaintiff filed suit in the Eastern District of Michigan after he was injured while staying in a Holiday Inn in Indiana. An Indiana defendant who managed the hotel claimed lack of personal jurisdiction in Michigan. The court held, however, that the Indiana hotel's association with a national hotel chain made jurisdiction proper under MCLA § 600.715 and under principles of due process. Id. at 6. Plaintiffs contend that this matter presents the same issues.
The court finds that venue is proper in this district. Each of the defendants is subject to personal jurisdiction under Michigan's long-arm statute and the exercise of that jurisdiction does not offend "traditional notions of fair play and substantial justice." International Shoe Company v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 *398 L.Ed. 95 (1945). Because each of the defendants is subject to personal jurisdiction in this state, venue is proper under section 1391(a).
The court finds that the facts presented by this case are indistinguishable from those presented in Wronikowski. Further support is presented in Hughes v. Cabanas del Caribe Hotel, 744 F.Supp. 788 (E.D.Mich.1990), aff'd without op., 947 F.2d 945 (6th Cir.1991), where the court found that personal jurisdiction did not exist in a similar situation. In Hughes, however, the hotel involved was not identified with a national chain. The court indicated that personal jurisdiction would have existed had the hotel been part of a national chain. Id. at 797 (citing Wronikowski, 716 F.Supp. at 6; Witbeck v. Bill Cody's Ranch Inn, 428 Mich. 659, 411 N.W.2d 439 (1987)). In this case, the hotel involved is a part of the Sheraton national chain. Thus, those defendants that may not directly conduct business in the state are still subject to personal jurisdiction based upon their affiliation with Sheraton Hotels.
Under these circumstances, the court finds that each of the defendants is subject to personal jurisdiction under either MCLA § 600.711 or MCLA § 600.715. The exercise of such jurisdiction would not be in violation of the due process requirements of the Constitution. Because each of the defendants is subject to personal jurisdiction in Michigan, venue is proper pursuant to section 1391(a).
B. Section 1404(a)
In addition to challenging venue, defendants are seeking a transfer of this action to the United States District Court for the Middle District of Florida pursuant to 28 U.S.C. § 1404(a) based upon the convenience of witnesses and the interest of justice. Section 1404(a) provides as follows:
For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
To transfer an action under section 1404(a) the following criteria must be met: (1) the action could have been brought in the transferee district court; (2) a transfer serves the interest of justice; and (3) transfer is in the convenience of the witnesses and parties. International Show Car Ass'n v. ASCAP, 806 F.Supp. 1308, 1310; In re Crash Disaster at Detroit Metropolitan Airport, 737 F.Supp. 391, 393 (E.D.Mich.1989). In deciding a section 1404(a) motion, the court must consider the following factors: (1) the convenience of the parties; (2) the convenience of the witnesses; (3) the relative ease of access to sources of proof; (4) the availability of process to compel attendance of unwilling witnesses; (5) the cost of obtaining willing witnesses; (6) the practical problems associated with trying the case most expeditiously and inexpensively; and (7) the interest of justice. ASCAP, 806 F.Supp. at 1310. District courts have more discretion to transfer under section 1404(a) than was previously allowed under the doctrine of forum non conveniens. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 253, 102 S.Ct. 252, 264-65, 70 L.Ed.2d 419 (1981).
As an initial matter, there is no dispute that this action could have been filed in the Middle District of Florida. In fact, as is clear from an earlier portion of this decision, there is a strong dispute concerning the propriety of venue and personal jurisdiction in this district, while such issues would be clear and unchallenged in a district court in Florida. Such a fact militates in favor of transfer.
Defendants seek to have this action transferred to the district in which the events giving rise to this litigation occurred. Anthony Kepler was injured in Orlando, Florida. All of the fact witnesses and some of the damage witnesses are located in the Middle District of Florida. Defendants contend that the following witnesses are present in that district and are amenable to process there: (1) employees of the hotel involved in the accident; (2) members of the Orange County Sheriff's Department who performed an extensive investigation; (3) inspectors from the county electrical and building inspection departments; (4) the building contractors who worked on the hot tub where the accident took place; (5) the inspector who examined the hot tub before the accident; (6) a representative of the light fixture manufacturer; and (7) emergency medical personnel and *399 doctors who treated Mr. Kepler immediately after the accident. In addition, defendants contend that litigation and discovery will be more convenient in the Middle District of Florida because exhibits and documentary evidence from hotel records, government reports, and investigative materials are located in that district.
In response, plaintiffs contend that a transfer should not be granted because Mr. Kepler and his family reside in Michigan and because "over 50" medical personnel involved in his continuing treatment are also located in Michigan. Furthermore, plaintiffs emphasize the difficulty that Mr. Kepler, who is confined to a wheelchair, would experience in traveling to Florida for the trial.
After considering all of the relevant factors, the court finds that a transfer to the Middle District of Florida will further the interest of justice and the convenience of the parties and witnesses. Although plaintiffs' choice of forum should be granted some deference, "it is undisputed that `courts will not blindly prefer the plaintiff's choice of forum'" over a more convenient location. Danuloff v. Color Ctr., No. 93-73478, 1993 U.S. Dist. LEXIS 18783 (E.D.Mich. Nov. 22, 1993) (citing Waste Distillation Tech., Inc. v. Pan American Resources, 775 F.Supp. 759, 764 (D.Del.1991). In the case at bar, a trial in the Middle District of Florida would be easier and more expeditious and inexpensive.[2] All of the fact witnesses, except for the plaintiffs, are located in Florida and are subject to process.[3] Finally, this case will be governed by questions of Florida law, questions with which the federal judges in Florida are much more familiar with than this court.
In a nearly identical case decided in this district, the court found that a transfer to the site of the accident would advance the administration of justice. In Cambell v. Hilton Hotels Corporation, 611 F.Supp. 155 (E.D.Mich.1985), a Michigan plaintiff was injured while vacationing at a Florida hotel. The court granted defendant's motion to transfer pursuant to section 1404(a) because the pertinent documents and records were in Florida and the convenience of all of the witnesses, except the plaintiff, was served by a transfer. Id. at 157.
Based on the foregoing analysis, the court will grant defendants' motion to transfer. The court finds that after considering and weighing of the factors presented, the interest of justice as well as the convenience of parties and witnesses is best served by further litigation of this matter in Florida.
III. Conclusion
For the reasons discussed above, the court finds that venue is proper in this district and that it shall deny defendants' motion to transfer made pursuant to section 1406(a). In addition, however, the court will grant defendants' section 1404(a) motion to change venue based upon the convenience of witnesses and the interest of justice. As a result, the court shall order that this matter be transferred to the Middle District of Florida.
ORDER
THEREFORE, IT IS HEREBY ORDERED that defendants' motion to transfer pursuant to 28 U.S.C. § 1406(a) is DENIED.
IT IS FURTHER ORDERED that defendants' motion for change of venue pursuant to 28 U.S.C. § 1404(a) is GRANTED.
*400 IT IS FURTHER ORDERED that this action shall be transferred to the United States District Court for the Middle District of Florida.
SO ORDERED.
NOTES
[1] Section 1391(a)(2) is inapplicable in this matter as the parties agree that a substantial part of the events or omissions giving rise to the claim have not occurred within this district.
[2] Although it sympathizes with the additional inconvenience that Mr. Kepler may experience from attending trial in Florida, such added difficulty is only one factor out of many that the court must consider.
[3] In addition, the court is troubled by the multiple witnesses cited by plaintiffs' counsel in his affidavit. Rather than merely relying upon the difficulty faced by Mr. Kepler in traveling to Florida, the efficacy of respecting his choice of forum, and mentioning that his treating physicians are located in Michigan, plaintiffs' counsel has attempted to present a blizzard of medical witnesses that he claims require trial in the Eastern District of Michigan. Upon closer examination, however, it becomes clear that the blizzard is merely a mirage. The witnesses that plaintiffs' counsel hopes to call at trial include eight speech and/or occupational therapists, ten nurses, four home care nurses, two flight nurses, and two ambulance drivers. The court wonders about the value of the testimony presented by, for example, the ambulance drivers. Although the road conditions encountered by the ambulance crew may be interesting, they are of questionable relevance in this matter.
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114 F.2d 278 (1940)
REYNOLDS & REYNOLDS CO.
v.
NORICK et al.
No. 2035.
Circuit Court of Appeals, Tenth Circuit.
July 31, 1940.
*279 Rowan A. Greer, of Dayton, Ohio (Keaton, Wells & Johnston, of Oklahoma City, Okl., Toulmin & Toulmin, of Dayton, Ohio, David I. Johnston, of Oklahoma City, Okl., and H. A. Toulmin and H. A. Toulmin, Jr., both of Dayton, Ohio, on the brief), for appellant.
Kenneth E. McAfee and J. B. Dudley, both of Oklahoma City, Okl. (Brown & McAfee and Dudley, Hyde, Duvall & Dudley, all of Oklahoma City, Okl., on the brief), for appellees.
Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.
BRATTON, Circuit Judge.
This action was instituted by Reynolds & Reynolds Company, of Dayton, Ohio, against Henry Norick and Walter Norick of Oklahoma City, Oklahoma, copartners engaged in business under the trade name Norick Bros., Printers. The parties will be referred to as they appeared in the trial court. Both are engaged in the printing business and are competitors, particularly in the printing and furnishing of forms for use by automobile dealers and agencies. Plaintiff alleged that in the year 1929 it originally conceived and placed on the market a set of complete forms covering business systems, including accounting, sales, service and miscellaneous forms, shop and repair orders, binders and other forms, adaptable to automobile dealers and agencies; that such forms were prepared and arranged under various, proper and appropriate headings, all in a distinctive style, form, color, design and arrangement of matter thereon; that they have become generally known throughout the trade and to the public as Dealers' Standard Accounting Forms, generally referred to as DSA forms; that DSA is the duly registered trade-mark of plaintiff, issued October 4, 1932; that with intent to cheat and defraud plaintiff of its just rewards and profits, and in misappropriation of its property rights and interests, defendants copied, simulated, imitated, counterfeited, pirated and plagarized a number of such forms, and sold them to the same trade as that dealt with by plaintiff; that in further effort to appropriate the business of plaintiff, defendants placed *280 or printed upon their forms the repeat order numbers of plaintiff for their genuine forms, with the digit "1" added in front of the regular repeat order of plaintiff; that the forms of defendants are inferior in quality, grade and skill in workmanship to those of plaintiff, but that the two cannot be distinguished by casual examination; that through their wrongful conduct, defendants caused the trade generally to believe that they handle, make and sell the genuine forms of the manufacture of plaintiff; and that plaintiff has lost and, unless defendants are restrained from continuing such unfair trade practice, will continue to lose profits and sustain injury to its reputation, standing and good will in the trade. The prayer was that defendants be enjoined from further copying and simulating such forms and selling them to the trade, and for an accounting.
Defendants answered that they have served automobile dealers since 1910; that in 1918, they adopted and began printing the various forms comprising a complete accounting system called Standard Accounting System for use by those engaged in the business of automobile dealers and agencies; that most, if not all, of such forms were different from those previously seen by defendants, but the methods and practices for accounting in such business were more or less uniform; that such original system was improved and revised on different occasions; that the forms constituting the system of plaintiff are remarkably similar to those previously printed and sold by defendants; that in theory, practice and effect the two are the same, and by slightly changing the names of the various accounts and numbers thereof, those printed by defendants could be substituted and used in the place of those printed by plaintiff; that the forms of plaintiff were not in any sense new, novel or original; that in preparing its forms, plaintiff copied and simulated forms theretofore made and printed by defendants; that the forms of plaintiff were designed particularly for use by the various dealer organizations of General Motors Corporation and its subsidiaries; that General Motors and its subsidiaries designed them, and ever since have waged an active campaign to induce all of their dealers to adopt and use them; that a provision contained in the licenses or franchises of the dealers required them to use and keep a uniform accounting system in strict accord with the accounting manual furnished by General Motors and its subsidiaries; that such dealers have thus been induced and required to install the Dealers' Standard Accounting System and keep it in accordance with such manual; that the necessity of following the instructions contained in the manual rendered it imperative that anyone desiring to sell any of the various accounting forms to such dealers make his forms of the size and arrangements of those set out in the manual; that in an effort to procure a monopoly upon the right to furnish all of such forms, plaintiff actively engaged in leading such dealers to believe that it was necessary for them to adopt and use such forms and that it had the exclusive right to make and furnish them; that the trade-mark DSA was imprinted on all of the forms furnished by plaintiff; that defendants so distinguished their various forms that it is extremely unlikely that any person has been or will be misled as to the source of manufacture; that defendants consistently maintained and carried on an extensive and expensive advertising campaign to promote their name and products; and that plaintiff simulated and copied certain of their forms and sold them to the same trade with which defendants dealt.
The court found that the accounting systems for automobile dealers had been gradually developed, based upon the actual experience of and suggestions from dealers and manufacturers; that the forms constituting such systems are directly the result of the development of the automobile business, and have been reduced to their present form by expert accountants and printers specialized in that type of work; that during 1929, plaintiff utilized the information derived from the representatives of the industry, and upon the advice and with the approval of General Motors Corporation composed the system of accounting and bookkeeping in question for use by its dealer agencies and subsidiaries; that such forms were prepared as to form, shape, design, arrangement of columns and printed matter, as specified by General Motors; that plaintiff also printed and distributed a publication called "Dealers' Standard Accounting System Manual"; that in various of such manuals and over the signature of the subsidiaries of General Motors, plaintiff represented to the buying public and particularly to the dealers in the products of General Motors and its subsidiaries, that such forms and system were designed by General Motors and its *281 subsidiaries; that plaintiff began to market such forms under its registered trade name DSA, and was the first in the field to market such forms as a complete system, under the approval of the manufacturer of automobiles; that since 1913, defendants have specialized in the making and selling of accounting forms for automobile dealers and have become known as a source of supply for such forms by most of the dealers in the United States; that General Motors urged and insisted that all of its dealers adopt and use accounting forms of uniform ruling, and with columns headed up in the particular manner and arrangement of the forms which constitute the DSA system; that during the year 1937, defendants began making and selling forms of the same identical columnar arrangement and of the same general form as the forms theretofore made by plaintiff; that they made them for General Motor dealers for the reason that the trade could not and would not use them of any other form and arrangement, and not because of any desire or intention on the part of defendants to mislead expected purchasers as to the source or origin of the products being sold; that on each of such forms defendants placed in the upper left-hand corner their tradename, address and reorder number in such position and with such prominence that any one looking at such forms would recognize and know that they were made by defendants and not by plaintiff; that in the conduct of their business, defendants advertised the products which were sold as products of their own manufacture, and did not at any time misrepresent the facts in connection with the manufacture and sale thereof; and that no one had been deceived by defendants in respect to the source or origin of any of the products which they sold, and nothing appeared to indicate the likelihood of deception in the future. Judgment was entered for defendants, and plaintiff appealed.
A trade-mark is a distinctive mark of authenticity through which the merchandise of a particular producer or manufacturer may be distinguished from that of others. Its sole and exclusive function is to designate, identify and point out distinctively the origin of the products to which it is attached. Elgin National Watch Co. v. Illinois Watch Co., 179 U.S. 665, 21 S.Ct. 270, 45 L.Ed. 365; Standard Paint Co. v. Trinidad Asphalt Co., 220 U.S. 446, 31 S.Ct. 456, 55 L.Ed. 536. But the trade-mark of plaintiff may be laid aside without more as there is no claim that it has been infringed in any manner.
The grievance of plaintiff is that defendants simulated its forms, and in doing so engaged in unfair trade practice. Deceit is the basis of an action of this character. The principle underlying unfair trade practice cases is that one manufacturer or vendor is palming off his merchandise as that of another, Singer Manufacturing Co. v. June Manufacturing Co., 163 U.S. 169, 16 S.Ct. 1002, 41 L.Ed. 118; Elgin National Watch Co. v. Illinois Watch Co., supra; Standard Paint Co. v. Trinidad Asphalt Co., supra; Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 59 S.Ct. 109, 83 L.Ed. 73; or that he is vending the products of another as his own, International News Service v. Associated Press, 248 U.S. 215, 39 S.Ct. 68, 63 L.Ed. 211, 2 A.L.R. 293.
These forms are not protected by copyright or patent. In the absence of such protection, plaintiff has no exclusive right to their use. They belong to the public and are open to use by defendants or any one else, and the enjoyment of that right by defendants carries with it only the obligation to identify their products in such manner that they will not reasonably be taken for those of plaintiff. Kellogg Co. v. National Biscuit Co., supra. And it is not necessary that they so designate their merchandise that careless or indifferent buyers will not fail to know their source. Instead, they are required only to mark or designate them in such manner that purchasers exercising ordinary care to discover whose products they are buying will know the truth and not become confused or mistaken. Allen B. Wrisley Co. v. Iowa Soap Co., 8 Cir., 122 F. 796; Turner & Seymour Manufacturing Co. v. A. & J. Manufacturing Co., 2 Cir., 20 F.2d 298.
Both plaintiff and defendants in this case are widely known in their trade. Both market their forms by direct sales to dealers who use them. Some sales are made through orders solicited by salesmen and others through the mails. Neither has brokers, wholesale or retail agencies, or other like distribution facilities. The forms of plaintiff are of a distinctive design and appearance, and they bear its trade-mark. Those of defendants are printed on a different kind of paper; they do not bear the trade-mark; and the tradename, address and reorder number of defendants are *282 placed in their upper left-hand corner in such a position and with such prominence that any purchaser or other person looking at such forms would immediately know the truth that they were manufactured by defendants, not plaintiff. They are of identical columnar arrangement and of the same general form as those of plaintiff. They bear the same reorder numbers as those of plaintiff with the digit "1" positioned in front of the repeat order numbers of plaintiff. But defendants began thus simulating the forms of plaintiff for the sole reason that through the concert of action between General Motors and its subsidiaries and plaintiff in respect to these uncopyrighted forms, dealers of General Motors and subsidiaries could not and would not use any other form or arrangement. The simulation was not due to any desire on the part of defendants to mislead expected purchasers in respect of the source or origin of their merchandise. It was not to palm off the merchandise of defendants as that of plaintiff, or to vend the products of plaintiff as those of defendants. In the conduct of their business which is very substantial in volume, defendants have consistently advertised the forms which they sold as forms of their own manufacture. They have never misrepresented the facts concerning the source or origin of their merchandise. They have not deceived any one. The record is barren of evidence of deceit in the past and there is no fact or circumstance which indicates the likelihood of deceit in the future. To grant plaintiff the relief which it seeks would be to proscribe legitimate competition, not to punish unfair competition. It would be nothing short of extending by judicial mandate the doctrine of unfair competition to the point of creating a copyright for the benefit of plaintiff. That we are not at liberty to do.
Plaintiff relies strongly upon International News Service v. Associated Press, supra. There complainant was engaged in the business of gathering at great expense news from all parts of the world and distributing it to its members for publication in their newspapers. Defendant similarly gathered news and sold it to customers and clients for like publication. Defendants pirated the news of complainant by copying it from bulletin boards and early editions of newspapers and selling it either bodily or in rewritten form to its own customers. The court held that complainant had a property right in the news thus gathered, as a business commodity; and that the practice of defendant in taking news from bulletins and early editions and selling and distributing it without any original investigation or expense constituted unfair business competition for which a court of equity would grant appropriate relief. It is manifest that the facts in that case were essentially and decisively different from those presented here. The determinative differences are plain and do not call for elaboration.
The judgment is affirmed.
|
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510 U.S. 847
Thrasherv.United States.
No. 92-9043.
Supreme Court of United States.
October 4, 1993.
1
Appeal from the C. A. 9th Cir.
2
Certiorari denied. Reported below: 981 F. 2d 1260.
|
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|
In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 16‐1889
DONALD CHARLES WILSON,
Plaintiff‐Appellant,
v.
LORI ADAMS, PATRICK MURPHY, and WISCONSIN DEPARTMENT
OF CORRECTIONS,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Western District of Wisconsin.
No. 14‐cv‐222 — Barbara B. Crabb, Judge.
____________________
ARGUED APRIL 19, 2018 — DECIDED AUGUST 23, 2018
____________________
Before RIPPLE, MANION, and KANNE, Circuit Judges.
KANNE, Circuit Judge. Since entering the custody of the
Wisconsin Department of Corrections in 2009, Donald Wilson
has sought medical treatment for dementia and Alzheimer’s
disease, neck and throat pain, and difficulty breathing and
swallowing. He alleges that medical staff at Oshkosh Correc‐
tional Institution were deliberately indifferent in their treat‐
ment of these ailments in violation of his Eighth Amendment
2 No. 16‐1889
rights. The district court, however, found that no reasonable
jury could find that the doctors were deliberately indifferent.
We agree and affirm the grant of summary judgment in favor
of the defendants.
I. BACKGROUND
Donald Wilson was incarcerated at the Oshkosh Correc‐
tional Institution in December 2009 after violating his parole.
Shortly thereafter he sought treatment for cognitive problems
as well as problems with his neck and throat.
Dr. Adams, a psychology supervisor at Oshkosh, first re‐
viewed Wilson’s mental health records shortly after Wilson
arrived. The records indicated that Wilson had been diag‐
nosed with a possible cognitive disorder. Dr. Adams ob‐
served Wilson exhibit symptoms associated with cognitive
disorders and referred him to a psychiatrist, Dr. Thompson.
Initially, Dr. Thompson also observed Wilson to be disori‐
ented and struggling with memory. Later that spring, how‐
ever, after talking with other prison staff‐members, she deter‐
mined that Wilson was likely feigning his symptoms in the
presence of medical staff. She reported this to Dr. Adams.
Nevertheless, Dr. Adams sent Wilson to the Wisconsin Re‐
source Center—a specialized mental health facility for prison‐
ers—for testing and medical observation. While there, Wilson
received a CT scan and counseling. After eight months of ob‐
servation, no evidence of dementia or Alzheimer’s was re‐
vealed, and Wilson was returned to Oshkosh. When asked
about Wilson’s diagnosis by another treating physician, Dr.
Adams reported that she had seen no evidence of cognitive or
memory deficiency.
No. 16‐1889 3
During this time, Wilson also began to complain of neck
and throat problems. He additionally reported experiencing
dizziness, double vision, and breathing trouble. Dr. Murphy,
Wilson’s primary care provider at Oshkosh, coordinated with
a number of different specialists at the University of Wiscon‐
sin Hospital over the course of several years to try to diagnose
the problems and address Wilson’s symptoms.
Initially, Dr. Murphy provided Wilson with naproxen for
pain and ordered testing to determine whether the problems
were caused by Wilson’s thyroid. An endocrinologist eventu‐
ally ruled that diagnosis out and instead thought Wilson
might have laryngeal cancer or a hypopharyngeal lesion. Dr.
Murphy scheduled an appointment with an otolaryngologist,
prescribed Wilson an antibiotic and a soft diet to accommo‐
date his trouble swallowing, and continued to provide
naproxen for pain.
After two endoscopies, it was determined that hardware
from an earlier spinal fusion surgery was likely the cause of
Wilson’s problems. Dr. Murphy referred Wilson to a surgeon
to determine whether the hardware could be removed. Dr.
Murphy also extended Wilson’s soft diet indefinitely upon
the recommendation of a speech pathologist who performed
a swallow evaluation, and changed Wilson’s pain manage‐
ment regime from naproxen to daily extra‐strength aceta‐
minophen.
In April 2013, a surgeon determined that the spinal fusion
hardware could not be removed without a high risk of mor‐
bidity. When this was explained to Wilson, he requested a sec‐
ond opinion.
4 No. 16‐1889
Throughout that spring, Wilson continued to seek treat‐
ment for pain. Dr. Murphy scheduled a tooth extraction, be‐
lieving some of the pain was caused by decaying teeth. Ini‐
tially, Wilson did not consent to the procedure. Another time
the procedure could not be completed because Wilson’s blood
pressure was too high. Once the extraction was completed,
however, the swelling in Wilson’s neck subsided.
In May 2013, Wilson was taken to a hospital, where the
doctors also indicated the hardware was likely the source of
Wilson’s pain. When Wilson returned from the hospital, Dr.
Murphy prescribed an antibiotic and narcotic pain medica‐
tion. Wilson was also provided with a wheelchair, an order
that someone push the wheelchair, and six months’ worth of
a nutritional supplement to address his weight loss.
Wilson attended follow‐up appointments at the Univer‐
sity of Wisconsin Hospital in July 2014 and January 2015. Spe‐
cialists there recommended a bronchoscopy, an airway exam,
lab tests, a transthoracic echocardiogram, and a CT scan of
Wilson’s chest. Dr. Murphy ensured that all of the procedures
were scheduled and performed.
In 2015, Wilson sought a court order obliging the defend‐
ants to transport him to the doctor of his choice for an evalu‐
ation regarding the spinal fusion hardware. The court granted
the order, and Wilson was transported to see Dr. Kalmjit Paul.
Dr. Paul requested that Dr. Murphy schedule Wilson for a se‐
ries of tests, which he did. Dr. Paul reviewed the results with
Wilson at a subsequent appointment and informed Wilson
that he agreed that surgery would not improve his condition.
Instead, he recommended conservative treatment. In a fol‐
low‐up letter to Wilson’s attorney, Dr. Paul explained that
“conservative treatment” includes many different types of
No. 16‐1889 5
treatment, including pain medication. He did not recommend
any more specific type of treatment for Wilson.
Wilson sued Dr. Adams, Dr. Murphy, and the Wisconsin
Department of Corrections for violating the Americans with
Disabilities Act and the Rehabilitation Act and for violating
his Eighth Amendment rights, on the basis that they had been
deliberately indifferent to his medical needs. He also claims
they were negligent under state law. The district court
granted summary judgment for the defendants in full. Wilson
does not appeal the entry of judgment on his Americans with
Disabilities Act or Rehabilitation Act claims, but he does ap‐
peal the district court’s dismissal of his Eighth Amendment
claim and his state‐law negligence claim.
II. ANALYSIS
We review the district court’s grant of summary judgment
de novo, construing all facts and reasonable inferences in the
light most favorable to Wilson, the non‐moving party. Zaya v.
Sood, 836 F.3d 800, 804 (7th Cir. 2016). We will affirm if there
are no genuine issues of material fact and the defendants are
entitled to judgment as a matter of law. Fed. R. Civ. P. 54.
A. Wilson’s § 1983 deliberate indifference claims
“[D]eliberate indifference to serious medical needs of pris‐
oners constitutes the ‘unnecessary and wanton infliction of
pain’ proscribed by the Eighth Amendment.” Whiting v. Wex‐
ford Health Sources, Inc., 839 F.3d 658, 661–62 (7th Cir. 2016)
(alteration in original) (quoting Estelle v. Gamble, 429 U.S. 97,
104 (1976)). Wilson, seeking damages pursuant to 42 U.S.C
§ 1983, claims the medical staff at Oshkosh were deliberately
indifferent to his medical needs. To prove such a claim, he
6 No. 16‐1889
needed to establish that he suffered from “an objectively seri‐
ous medical condition” and that the “defendant was deliber‐
ately indifferent to that condition.” Petties v. Carter, 836 F.3d
722, 728 (7th Cir. 2016). “To determine if a prison official acted
with deliberate indifference, we look into his or her subjective
state of mind.” Petties, 836 F.3d at 728; see Farmer v. Brennan,
511 U.S. 825, 834 (1994). An official is deliberately indifferent
when he disregards a known condition that poses “an exces‐
sive risk to inmate health or safety.” Dunigan v. Winnebago
County, 165 F.3d 587, 590 (7th Cir. 1999); see Farmer, 511 U.S.
at 837; Whiting, 839 F.3d at 662. Mere negligence or malprac‐
tice is insufficient. Petties, 836 F.3d at 728; Whiting, 839 F.3d at
662.
Wilson claims Dr. Adams was deliberately indifferent in
her treatment of Wilson’s mental health and that Dr. Murphy
was deliberately indifferent in his treatment of Wilson’s phys‐
ical health. We review each claim in turn.
1. Dr. Adams was not deliberately indifferent in her treatment of
Wilson’s mental health.
Wilson claims Dr. Adams should have done more to treat
his Alzheimer’s disease and dementia. But he has failed to
prove that he actually suffers from either condition. He relies
on the report of a psychologist who saw him in 2003 in re‐
sponse to an application for disability benefits. The report in‐
dicates he had some cognitive disorder. None of the testing
done at Oshkosh or at the Wisconsin Resource Center, how‐
ever, provided any evidence that Wilson suffered from a cog‐
nitive disorder. We recognize that these disorders are difficult
to identify and diagnose, but without such evidence, Wilson
cannot show that he suffered a serious medical condition, let
No. 16‐1889 7
alone that Dr. Adams was indifferent in her treatment of that
condition.
Furthermore, the record indicates Dr. Adams investigated
Wilson’s mental health condition. She referred him to a psy‐
chiatrist and sent him to a specialty center for extensive ob‐
servation. She only refused to provide further treatment after
these specialists reported that they were not diagnosing Wil‐
son and that they were suspicious that he was feigning his
symptoms when in the presence of medical professionals.
There is nothing in the record that would allow a reasonable
juror to find that Dr. Adams believed that Wilson suffered
from Alzheimer’s disease or dementia and refused to provide
proper treatment. Therefore, the district court did not err
when it granted summary judgment for the defendants on
this claim.
2. Dr. Murphy was not deliberately indifferent in his treatment of
Wilson’s physical health.
Wilson also contends the district court should not have en‐
tered summary judgment on his claim that Dr. Murphy was
deliberately indifferent in his treatment of Wilson’s neck,
back, and throat pain. The district court assumed for purposes
of the summary judgment motion that this pain constitutes a
serious medical condition, as do we. “[W]e look at the totality
of [Wilson’s] medical care when considering whether that
care evidences deliberate indifference to serious medical
needs.” Petties, 836 F.3d at 728.
The record is replete with evidence of Dr. Murphy’s at‐
tempts to diagnose the source of Wilson’s pain. He worked
with endocrinologists, an otolaryngologist, a speech
pathologist, a pulmonologist, a neurosurgeon, and a dentist.
8 No. 16‐1889
He repeatedly coordinated with these specialists to schedule
follow‐up appointments, procedures, and tests. By the time
Wilson brought this suit, the Department had also made ar‐
rangements for Wilson to receive a second opinion regarding
the removal of his spinal fusion hardware from a doctor of his
choosing, albeit after the court ordered the Department to do
so.
Wilson’s strongest argument is that Dr. Murphy was in‐
different in his treatment of Wilson’s pain while he under‐
went these attempts to diagnose the source of the pain. For
most of the relevant time period, Dr. Murphy provided Wil‐
son with naproxen. It is true that continuing the same treat‐
ment despite no results can constitute indifferent treatment,
Kelley v. McGinnis, 899 F.2d 612, 616 (7th Cir. 1990), but Wilson
makes no suggestion that Dr. Murphy was withholding an‐
other more effective available treatment option. Wilson pre‐
sents no evidence tending to show this is a situation in which
the medical professional “chooses an ‘easier and less effica‐
cious treatment’ without exercising professional judgment.”
Petties, 836 F.3d at 730. Furthermore, Wilson saw a number of
other medical professionals, and none suggested his pain
management regime was insufficient. At most, Dr. Paul sug‐
gested there were a number of potential treatment options,
but he did not indicate that the pain medication provided was
insufficient or that some other treatment should be provided.
Wilson also asserts that Dr. Murphy failed to comply with
the recommendation of a pulmonologist regarding numbness
in Wilson’s hand. The pulmonologist noted that Wilson “may
need further evaluation with Neurology.” (R. 62‐1 at 108.) Dr.
Murphy declined to schedule any such further evaluation. “A
jury can infer conscious disregard of a risk from a defendant’s
No. 16‐1889 9
decision to ignore instructions from a specialist.” Zaya, 836
F.3d at 806; see Petties, 836 F.3d at 729. But that does not mean
that a doctor must always follow the recommendation of a
specialist. See Petties, 836 F.3d at 729 (“[E]vidence that some
medical professionals would have chosen a different course
of treatment is insufficient to make out a constitutional
claim.”); Jackson v. Kotter, 541 F.3d 688, 698 (7th Cir. 2008) (“A
medical professional’s treatment decisions will be accorded
deference ‘unless “no minimally competent professional
would have so responded under those circumstances.”’”)
(quoting Sain v. Wood, 512 F.3d 886, 894–95 (7th Cir. 2008)).
Dr. Murphy explained that he was aware of Wilson’s hand
condition before sending him to the pulmonologist, that Wil‐
son had been examined by a neurologist earlier in the year,
and that he decided the best course of action was to continue
providing pain medication and monitoring the numbness in
Wilson’s hand. Wilson presents no evidence that this decision
was “a substantial departure from accepted professional
judgment, practice, or standards.” Sain, 512 F.3d at 895 (quot‐
ing Collignon v. Milwaukee Cty., 163 F.3d 982, 988 (7th Cir.
1998)).
Finally, Wilson claims Dr. Murphy delayed an appoint‐
ment for three‐and‐a‐half months, despite Wilson’s repeated
requests for treatment. Delaying treatment, even if not life
threatening, can be evidence of deliberate indifference. Gut‐
tierrez v. Peters, 111 F.3d 1364, 1371 (7th Cir. 1997); see Petties,
836 F.3d at 730; Perez v. Fenoglio, 792 F.3d 778, 777–78 (7th Cir.
2015). But delays can also be reasonable. See Petties, 836 F.3d
at 730 (noting that delays are common in prison and that
length of the delay, seriousness of the condition, and ease of
providing treatment must be considered when evaluating
10 No. 16‐1889
whether a delay is “tolerable”). The defendants assert that de‐
lays during that time were common because Dr. Murphy was
the only physician treating more than two thousand inmates
and he needed to prioritize his appointments. Furthermore, a
plaintiff must prove the delay in treatment “exacerbated the
injury or unnecessarily prolonged pain,” Petties, 836 F.3d at
730–31, and Wilson is unable to identify any evidence that
such resulted from the delay. See Knight v. Wiseman, 590 F.3d
458, 466 (7th Cir. 2009) (explaining that an Eighth Amend‐
ment claim based on delay will fail “unless the plaintiff intro‐
duces verifying medical evidence that shows his condition
worsened because of the delay”).
No reasonable jury could find that Dr. Murphy was delib‐
erately indifferent in his treatment of Wilson’s physical
health—either in seeking a diagnosis or in treating Wilson’s
symptoms. The district court did not err when it entered sum‐
mary judgment for the defendants on this claim.
B. Wilson’s state‐law negligence claim
Wilson also claims the defendants were negligent in their
treatment of his healthcare. This is a state‐law claim. The dis‐
trict court properly exercised its supplemental jurisdiction
and considered the claim along with Wilson’s federal‐law
claims. 28 U.S.C. § 1367; see Hansen v. Bd. of Trs., 551 F.3d 599,
607 (7th Cir. 2008) (noting that “[t]he district court has broad
discretion in deciding whether to retain supplemental
claims”).
Wisconsin law requires that an expert witness testify to es‐
tablish the standard of care in a medical malpractice case, un‐
less “the situation is one where the common knowledge of
laymen affords a basis for finding negligence.” Christianson v.
No. 16‐1889 11
Downs, 279 N.W.2d 918, 921 (Wis. 1979); see also Carney‐Hayes
v. Nw. Wis. Home Care, Inc., 699 N.W.2d 524, 537 (Wis. 2005).
Wilson offered no expert medical testimony. On appeal, Wil‐
son argues that expert testimony was not necessary in this
case, or, alternatively, that the report from Dr. Paul should be
treated as expert testimony.
Expert testimony was necessary in this case, because ordi‐
nary laymen would not know what medical treatment was
necessary based on the symptoms Wilson presented. In fact,
the evidence presented indicates that a team of well‐qualified
specialists struggled to identify the cause of Wilson’s pain or
to diagnose any cognitive functioning problem. And Dr.
Paul’s report is not sufficient for these purposes, because it
does not include any opinion regarding the proper standard
of care or whether Dr. Murphy had provided proper care.
Without expert testimony, Wilson could not prove his claim.
Therefore, the district court did not err when it entered sum‐
mary judgment for the defendants on this claim.*
* We have in the past expressed doubt concerning the applicability of Wis‐
consin’s expert‐evidence rule in diversity cases. Gil v. Reed, 381 F.3d 649,
659 (7th Cir. 2004). We need not resolve that issue here. We have observed
that the federal rule (“no expert testimony is needed when the symptoms
exhibited are not beyond a layperson’s grasp”) may be indistinguishable
from the Wisconsin rule. See Gil v. Reed, 535 F.3d 551, 558 n.2 (7th Cir.
2008) (quoting Gil, 381 F.3d at 659). And under either rule, Wilson has not
presented any evidence from which a jury could reasonably determine the
defendants’ conduct fell below the appropriate standard of care.
12 No. 16‐1889
III. CONCLUSION
Because we conclude the grant of summary judgment was
appropriate, we do not consider the defendants’ arguments
regarding qualified immunity.
The judgment of the district court is AFFIRMED.
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698 So.2d 315 (1997)
Joseph Henry POTTS, Appellant,
v.
STATE of Florida, Appellee.
No. 96-1769.
District Court of Appeal of Florida, Fourth District.
July 30, 1997.
Clarification Denied August 29, 1997.
*316 Gary S. Israel of Gary S. Israel, P.A., West Palm Beach, for appellant.
Robert A. Butterworth, Attorney General, Tallahassee, and Don M. Rogers, Assistant Attorney General, West Palm Beach, for appellee.
FARMER, Judge.
We affirm the conviction for sale of cocaine but write briefly on the issue involving self representation at trial by defendant. Without detailing all of the events that led to the discharge of appointed counsel, it is enough to say that defendant himself persistently and consistently sought the discharge. The trial court's inquiry was sufficient under Hardwick v. State, 521 So.2d 1071 (Fla.1988), cert. denied, 488 U.S. 871, 109 S.Ct. 185, 102 L.Ed.2d 154 (1988), and Nelson v. State, 274 So.2d 256 (Fla. 4th DCA 1973). We also conclude that the trial court complied with Faretta v. California, 422 U.S. 806, 95 S.Ct. 2525, 45 L.Ed.2d 562 (1975).
In Faretta the Court rejected the notion that the state can compel a defendant to accept a lawyer he does not want. In the words of the Court:
"The value of state-appointed counsel was not unappreciated by the Founders, yet the notion of compulsory counsel was utterly foreign to them. And whatever else may be said of those who wrote the Bill of Rights, surely there can be no doubt that they understood the inestimable worth of free choice."
422 U.S. at 833-34, 95 S.Ct. at 2540. Indeed, as the Court further explained its holding:
"It is undeniable that in most criminal prosecutions defendants could better defend with counsel's guidance than by their own unskilled efforts. But where the defendant will not voluntarily accept representation by counsel, the potential advantage of a lawyer's training and experience can be realized, if at all, only imperfectly. To force a lawyer on a defendant can only lead him to believe that the law contrives against him. Moreover, it is not inconceivable that in some rare instances, the defendant might in fact present his case more effectively by conducting his own defense. Personal liberties are not rooted in the law of averages. The right to defend is personal. The defendant, and not his lawyer or the State, will bear the personal consequences of a conviction. It is the defendant, therefore, who must be free personally to decide whether in his particular case counsel is to his advantage. And although he may conduct his own defense ultimately to his own detriment, his choice must be honored out of `that respect for the individual which is the lifeblood of the law.'"
422 U.S. at 834, 95 S.Ct. at 2541. Hence it is obvious that a defendant has a right to represent himself and may not be required to accept the lawyer given him by the state.
The crux of proper self-representation under Faretta is voluntariness, by which the Court means a knowing and intelligent waiver of counsel. To return again to the words of the Court:
"When an accused manages his own defense, he relinquishes, as a purely factual matter, many of the traditional benefits associated with the right to counsel. For this reason, in order to represent himself, the accused must `knowingly and intelligently' forgo those relinquished benefits.
*317 Although a defendant need not himself have the skill and experience of a lawyer in order competently and intelligently to choose self-representation, he should be made aware of the dangers and disadvantages of self-representation, so that the record will establish that `he knows what he is doing and his choice is made with eyes open.'
"Here, weeks before trial, Faretta clearly and unequivocally declared to the trial judge that he wanted to represent himself and did not want counsel. The record affirmatively shows that Faretta was literate, competent, and understanding, and that he was voluntarily exercising his informed free will. The trial judge had warned Faretta that he thought it was a mistake not to accept the assistance of counsel, and that Faretta would be required to follow all the `ground rules' of trial procedure. We need make no assessment of how well or poorly Faretta had mastered the intricacies of the hearsay rule and the California code provisions that govern challenges of potential jurors on voir dire." [e.s.]
422 U.S. at 835-36, 95 S.Ct. at 2541.
While the Court required that the defendant claiming the right to represent himself "should be made aware of the dangers and disadvantages of self-representation," the Court then proceeded to note in the record before it that "[t]he trial judge had warned Faretta that he thought it was a mistake not to accept the assistance of counsel." In giving this warning, the trial judge in Faretta apparently did not engage in any extensive colloquy with him about all of the possible dangers lying within self-representation. More importantly, the Court's opinion does not suggest that the warning there included a recapitulation of the nature of the charges against the defendant and the possible penalties, or the like. Thus, there is nothing in Faretta suggesting that a knowing and intelligent assertion of self-representation depends on the trial court engaging in a catalog check list of every possible criminal law and procedure that may bear on the defense of the case. Nor does the opinion even hint that the court must cover matters presumably taken up at the arraignment, such as the nature of the charges and all the possible penalties, if the self-representation proves unsuccessful.
Our reading of Faretta is consistent with recent decisions of the Florida supreme court on the subject. In Hill v. State, 688 So.2d 901 (Fla.1996), a death penalty case, the court affirmed a waiver of counsel under Faretta, saying:
"We emphasize that a defendant does not need to possess the technical legal knowledge of an attorney before being permitted to proceed pro se. As the Supreme Court stated in Godinez v. Moran, 509 U.S. 389, 399, 113 S.Ct. 2680, 2686-87, 125 L.Ed.2d 321 (1993), `the competence that is required of a defendant seeking to waive his right to counsel is the competence to waive the right, not the competence to represent himself.' Thus, the judge was not required to give Hill a lesson on how to try a lawsuit before finding that Hill was making a knowing waiver of his right to counsel. It was enough for Hill to be alerted generally to the difficulties of navigating the legal system, and in this case the inquiry went beyond the minimum requirements to warn Hill of the particular difficulty of laying a predicate for a defense." [e.o.]
688 So.2d at 905. More recently, in State v. Bowen, 698 So.2d 248 (Fla.1997), the court held that:
"once a court determines that a competent defendant of his or her own free will has `knowingly and intelligently' waived the right to counsel, the dictates of Faretta are satisfied, the inquiry is over, and the defendant may proceed unrepresented. The court may not inquire further into whether the defendant `could provide himself with a substantively qualitative defense' ... for it is within the defendant's rights, if or she so chooses, to sit mute and mount no defense at all."
698 So.2d at 251. Neither case, however, expressly disapproves earlier district court opinions requiring more extensive inquiry than that in Faretta itself.
*318 For the above reasons, we disagree with Dortch v. State, 651 So.2d 154 (Fla. 1st DCA 1995), in which the first district concluded that the obligation to warn a defendant of the "disadvantages of self-representation" necessarily requires that the trial judge tell the defendant of the "seriousness of the charges against him, the potential sentence he might face if found guilty, [and] the consequences of habitualization." 651 So.2d at 157. As the supreme court explained concerning the death penalty in Hill:
"Nor does the fact that this is a death penalty case make it so complex that a defendant cannot make an intelligent choice to represent him or herself. It was sufficient that the judge made sure that Hill knew the State would be seeking the death penalty. E.g., Hamblen v. State, 527 So.2d 800 (Fla.1988); Muhammad v. State, 494 So.2d 969 (Fla.1986); Goode v. State, 365 So.2d 381 (Fla.), cert. denied, 441 U.S. 967, 99 S.Ct. 2419, 60 L.Ed.2d 1074 (1979)."
688 So.2d at 904. We know of no reason why in noncapital cases the court must review the possible sentencing alternatives to find that a waiver of counsel under Faretta is knowing and intelligent.
Actually, we agree with Judge Barfield in dissent in Dortch where he said:
"None of this is required by Faretta. The accused doesn't have to be very good at representing himself or know much about the law. He must only understand that judges don't think self-representation is a good idea, and most defendants would be better off with a lawyer. The accused must understand there are serious consequences that may flow from a criminal trial."
651 So.2d at 158. Our own reading of Faretta is exactly like Judge Barfield's.
Here the trial judge twice told defendant that it would be a big mistake for him to represent himself. She frankly told him at one point that she doubted that he had sufficient legal knowledge to do an adequate job. In these comments, the court was adequately conveying the thought that there was considerable danger in rejecting the services of the lawyer. Nevertheless, defendant insisted that he would prefer to represent himself rather than take his chances with the appointed lawyer, whom he characterized as argumentative. We reject defendant's late arising perception that he should not have been allowed to have the "fool for the client."
AFFIRMED; CONFLICT CERTIFIED.
GUNTHER and POLEN, JJ., concur.
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07/21/2020
IN THE SUPREME COURT OF THE STATE OF MONTANA Case Number: DA 20-0082
No. DA 20-0082
CITY OF BILLINGS,
Plaintiff and Appellee,
v.
KATRINA LYNN HOFMAN,
Defendant and Appellant.
ORDER
Upon consideration of Appellant’s motion for extension of time,
and good cause appearing,
IT IS HEREBY ORDERED that Appellant is granted an extension
of time to and including August 26, 2020, within which to prepare, file,
and serve Appellant’s opening brief on appeal.
Electronically signed by:
Mike McGrath
Chief Justice, Montana Supreme Court
July 21 2020
|
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NUMBER 13-12-00251-CR
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
_________
JOSE JUAN VARELA, Appellant,
v.
THE STATE OF TEXAS, Appellee.
On appeal from the 430th District Court
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Justices Rodriguez, Garza, and Benavides
Memorandum Opinion by Justice Benavides
A jury convicted appellant, Jose Juan Cruz Varela, of murder, a first-degree
felony, and he received a sentence of forty-five years’ confinement. See TEX. PENAL
CODE ANN. § 19.02(b) (West 2011). By three issues, appellant contends that: (1) the
evidence “is inadequate under the Brooks standard to show that the testimony of the co-
conspirators was corroborated so as to show that [he] was a party or a conspirator to
the murder of his brother”; (2) the trial court erred in failing to suppress evidence
acquired from a cell phone in appellant’s possession when he was arrested “because
there was no probable cause or other authority”; and (3) the trial court commented on
the weight of the evidence in front of the jury by stating that one of the State’s witnesses
was a co-conspirator and a party opponent. We affirm.
I. PERTINENT FACTS
Appellant had a brother named Ruben (the “victim”). The victim had a meeting
with appellant and their father. During this meeting, Josue Gonzalez Rodriguez (the
“shooter”) shot and killed the victim.
Marco Antonio Hernandez stated that he knew appellant as “MP.” According to
Hernandez, shortly after he met appellant, appellant offered him $10,000 to kill
someone. 1 Hernandez testified that he told appellant that he did not do that type of job,
but that he would find someone who would do it. Hernandez spent several months
attempting to find someone who would do the killing. Hernandez saved appellant’s
phone information on his own phone as “MP.” Hernandez’s phone number at this time
was “776-5422.” The men exchanged many phone calls.
Hernandez contacted Jose De Leon to do the killing. De Leon put Hernandez in
contact with his “in-law,” the shooter (Rodriguez). Hernandez and De Leon met in
Reynosa, Tampico, Mexico in 2007, and the men discussed the killing.
In 2008, Hernandez informed appellant that he had found someone who would
perform the killing. While at a meeting with De Leon, the shooter, and Hernandez,
appellant gave some money to Hernandez, and the men went to “check the house
1
Hernandez claimed that at the time that he did not know the identity of the intended victim.
2
where the person to be killed was supposed to be.” Hernandez stated that initially, the
men had planned for the shooter to kidnap the victim and force him to sign some
paperwork, including a document that removed the victim and his mother as signatories
on a bank account in Mexico. Hernandez testified that once the victim signed the
papers, he would be killed. However, according to Hernandez, the plan changed
because they were unable to locate the victim for the kidnapping.
According to Hernandez, the plan changed and the shooter was supposed go to
the house, ask for “Ruben Ovidio” (the victim), and then kill him. According to
Hernandez, at this time, appellant gave him a picture of the victim. Hernandez testified
that he used the money that appellant gave him to get a car (a Grand Marquis) and a
gun.
Hernandez stated that on the date of the killing, appellant informed him that a
meeting would occur between the victim, appellant, and their father. Hernandez
instructed the shooter to go to the location and “do whatever he had to do.” De Leon
was supposed to go to the location with the shooter but he declined to go and another
man named “Fernando” went instead. However, Fernando did not know that the
shooter planned to kill the victim. After the shooter killed the victim, Hernandez met with
the shooter and Fernando at a Wal-Mart in Sharyland. Hernandez sold the gun used in
the killing in Mexico. Hernandez asked a man known as “Pechocho” to burn the car
used in the killing.
De Leon testified that Hernandez offered him $3,000 to kill somebody and that
Hernandez would get $10,000 for the killing. De Leon stated that Hernandez had taken
him to a subdivision named Cimarron and told him that the intended victim lived close to
3
their location. De Leon declined the offer to commit the murder for money. De Leon
stated that, later, the shooter and Hernandez told him that the shooter had committed
the murder. De Leon claimed that he did not know the victim, that he knew nothing
about the Varela family, and that he did not know appellant other than seeing him in the
newspaper.
Officer David M. Garcia testified that he investigated the scene shortly after the
murder occurred. He interviewed appellant and testified that he found appellant “very
evasive.” Officer Garcia stated “[appellant] was being really animated in reference to
what happened. I tried to get answers from him, and he would, pretty much, fall down
and cry—overly animated.” On cross-examination, Officer Garcia described appellant’s
behavior as “a fake cry” because usually when a person cries, “you see tears” and
appellant had no tears. When asked if based on his training and experience he
believed that appellant’s behavior was suspicious, Officer Garcia replied, “Yes, I did.”
Corporal Manual Casas testified that he investigated the murder. Bullet casings
and shells were found at the scene of the murder; however, the murder weapon was
never found. According to Corporal Casas, shortly after the murder, appellant was
arrested “because they thought they had sufficient probable cause to detain him.
[Appellant] was under arrest under an article of the Code of Criminal Procedure that
allows the police to detain someone.”
Corporal Casas later inspected the property taken from appellant when he was
arrested, which included a black Motorola Boost phone (the “Motorola phone”) that had
been found in appellant’s boot. Corporal Casas stated that based on the information he
discovered in the Motorola phone, he located other phone records showing calls made
4
between appellant and other co-conspirators. Corporal Casas testified that appellant
also had an iPhone, admitted as State’s Exhibit No. 70. Corporal Casas testified that
when he asked appellant about the Motorola phone, appellant told him that the phone
belonged to a friend named “Tocayo.” According to Corporal Casas, appellant claimed
that he had the Motorola phone because he used it when the battery on his iPhone
died.
Corporal Casas also inspected three small pieces of paper which were notes
found in appellant’s possession. State’s Exhibit 73 includes the notes and State’s
Exhibits 74 and 75 are “Detalles Llamada” taken from the Motorola phone. Corporal
Casas discovered that the Motorola phone had been purchased from a store owned by
one of appellant’s relatives. Corporal Casas found that one of the calls made on the
Motorola phone was made ten minutes before the murder to someone identified on the
phone as “Toca.” Another number called belonged to Hernandez.
Corporal Casas determined that Hernandez had been involved in the murder and
that a call was made from the Motorola phone to Hernandez on the date of the murder
at 6:06 p.m. Corporal Casas testified that someone had called the number belonging to
the shooter from the Motorola phone. Corporal Casas stated that there were also
phone records showing that calls were made to and from Hernandez on appellant’s
iPhone.
According to Corporal Casas, Hernandez confessed that he had been involved in
the murder, and the shooter admitted that he shot the victim. Corporal Casas also
testified that the shooter told him that Hernandez acted as a middle man and that
appellant “had actually asked for [the victim] to be murdered.” Corporal Casas stated
5
that the shooter informed him that appellant had provided a black and white Xerox copy
of a picture of the victim to assist him in identifying the victim. Corporal Casas testified
that when shown a photo lineup with six pictures, the shooter identified appellant as
“MP”—the man who wanted the shooter to kill the victim.
Jose P. Varela (“Pepe”), appellant’s first cousin, testified that he spoke with
Corporal Casas regarding the Motorola phone found in appellant’s possession. Pepe
owned a cellular phone store in downtown McAllen, Texas, and he also owned “another
store of Nextel Radios” in Reynosa, Mexico. Pepe testified that he told Corporal Casas
“that some phones were sold [to appellant] for business.” Pepe did not have any
knowledge of what the phone numbers assigned to those phones were.
Several witnesses testified that the victim did not have a good relationship with
appellant and that the victim was afraid of appellant. Specifically, Jose Porfirio Cantu
Alaniz, a friend of the Varela family, testified that: (1) the victim and appellant did not
get along for the past few years; (2) the victim told him that appellant would pressure
the family to give him money in large quantities; (3) the family wanted to take away
appellant’s check-writing privileges regarding the family business; (4) the victim
attempted to mend his relationship with appellant; (5) the victim was a successful
businessman; (6) the victim indicated that he was afraid of appellant; and (7) the victim
was not fearful of anyone else and had no enemies.
Also, Francisco S. Avalos testified that before the murder, the victim was
“worried, concerned, and very nervous” due to “things that happened” between
appellant and their father and that the victim “always had the feeling that [appellant] was
going to do something to him,” including possibly that appellant would have something
6
to do with the victim’s death. According to Avalos, the victim believed that appellant’s
conduct “was inappropriate” because “of the way some of the company money was
being handled—and his parents had made a decision for him not to have any
access . . . to the company’s money.” Avalos stated that the victim had been fearful of
appellant for approximately two years before he died. Avalos said that the victim “was
always preoccupied, and afraid. At times he wouldn’t sleep—and on whatever occasion
he had—for his own suspicion, preoccupation, and his safety, he would become real
nervous.” Avalos stated that eventually appellant’s parents stopped allowing appellant
to have access to their money; and, appellant believed that his parents were favoring
the victim. Avalos stated that the victim asked him to pray for his family because
appellant “had said that he was going to hurt the parents where it was the most hurtful—
where it would hurt them in the worst place.” Avalos testified that the victim never
stated that he feared anyone other than appellant.
The victim’s wife testified that the victim was afraid of appellant and that the
victim “would tell [her], and also to [their children], that, not to open—if anyone comes to
the house—and he would give us instructions for our own security that if he would go,
not to open. . . .” The victim’s wife stated that the victim was not afraid of anyone other
than appellant. The victim’s wife testified that the day before the victim was murdered,
a man wearing a sweater came to the door asking for “Ruben Ovidio.” The victim’s wife
explained that the victim did not open the door because it was not cold that day and “no
one here knows him as Ruben Ovidio.” The man told the victim that he wanted to
discuss some properties; however, the victim refused to open the door. According to
7
the victim’s wife, the victim “had something in his mind that [this occurrence] was related
[to appellant].”
Apolinar Luna, who worked for the victim’s father, testified that on the day of the
murder, he waited outside the home where the men planned to meet in order to “warn”
the victim of appellant’s arrival because the victim was afraid of appellant. Luna stated
that the purpose of the meeting was for the brothers “to discuss” their differences and
“reach good terms, because the businesses were stopped.” Luna did not participate in
the meeting. Luna stated that the victim had expressed fear that someone was trying to
kill him and that the victim was afraid of appellant.
Appellant’s and the victim’s mother, Maria del Carmen Cruz de Varela, testified
that appellant’s relationship with the victim was bad and that appellant threatened that
blood would be spilled in the family. Appellant’s mother stated that appellant was angry
because the family stopped allowing him access to the family business. Appellant’s
mother stated that appellant “came to our home threatening us. He threatened out that
he would do something bad. And we did this to protect him. He said you’re family, but
you’re not my family.” Appellant’s mother said that the victim had expressed concern
about appellant “trying to take his life.” Appellant’s mother testified that she told
investigators that she believed that appellant was responsible for the victim’s murder.
The prosecutor asked appellant’s mother to review the documents found in
Hernandez’s possession and to explain what those documents were “purporting to do.”
Appellant’s mother replied, “It is—so that the properties of [the victim]—[the victim’s]
properties—out in the hands of [appellant’s] property, under his control and the name.
Why? Why?” The record shows that appellant’s mother then became emotional.
8
Appellant’s mother explained that other documents found purported to “cancel” the
victim’s and her own signature from the bank account “and then freedom is given to
[appellant’s] signature to use it indifferently [sic].” Appellant’s mother explained that
some of the documents were giving “a power of attorney for [appellant] on the [victim’s
behalf].” While reviewing the documents, appellant’s mother clarified that in one
particular document, “[the victim] and [appellant’s mother] are giving power of attorney
to [appellant] of our properties. This one too.”
Corporal Ted Rodriguez testified that when he interviewed appellant, appellant
did not act like someone who witnessed his brother’s murder. Rodriguez interviewed
the victim’s wife, and he learned that there was “some sibling rivalry” between appellant
and the victim regarding money and properties. Corporal Rodriguez testified that the
victim’s mother indicated that the victim had one enemy—appellant. Corporal
Rodriguez explained that the victim’s mother told him that appellant became “enraged”
when they “switched” the bank accounts to require “dual signatures” and that appellant
“made the threat that there was going to be bloodshed because of those actions. He
also indicated that the father would have been there to witness the bloodshed.”
Corporal Rodriguez stated that he asked the victim’s mother to clarify her statement,
and “she advised that she knew that she was referring to [the victim], that [appellant]
was targeting [the victim].”
Corporal Rodriguez testified appellant was “detained” because the officers “had a
reasonable suspicion” that appellant was a suspect in the murder and they wanted to
“avoid [sic] him from fleeing.” Corporal Rodriguez testified that Hernandez identified
appellant as “MP” and told him that appellant had hired Hernandez to assist in the
9
murder. Corporal Rodriguez stated that the shooter confessed his part in the murder
and the shooter identified appellant in a photo lineup as the person who hired him to kill
the victim. Corporal Rodriguez testified that Hernandez kept some documents that the
victim was supposed to sign “granting him the power over them” and once the victim
signed the documents, the victim would be killed. Corporal Rodriguez explained that
Hernandez said, “I have evidence that can prove the reason why he wanted him
murdered” and that Hernandez then produced the documents. On redirect examination,
Corporal Rodriguez stated that Hernandez told him, “I got evidence that can prove that
[appellant] knows me, and I know him because I got documents made under his name
in my possession.” Corporal Rodriguez testified that the documents corroborated what
Hernandez had told him about the murder, that the shooter’s statement corroborated
Hernandez’s statement, and that the family indicated a motive for the murder. Corporal
Rodriguez stated that Hernandez claimed that he called appellant on the day of the
murder “to get him out of there so that he wouldn’t get mistaken [for the victim].”
Appellant testified that he did not have any involvement in the victim’s death. He
stated that he told Corporal Casas that the Motorola phone did not belong to him and
that a friend had left it with him. Appellant denied that it was possible for the Motorola
phone to have been hidden in his boot. Appellant stated that he had a fine relationship
with the victim but that they had business differences. Appellant claimed that because
the victim had been openly developing the family’s land in Reynosa, a group of men
with machine guns had made the victim kneel and demanded money.
10
II. CORROBORATION OF THE ACCOMPLICE WITNESSES’ TESTIMONY
By his first issue, appellant challenges the sufficiency of the evidence
corroborating the co-conspirators’ testimony.
A. Applicable Law
A person cannot be convicted based upon the testimony of an accomplice
witness unless the testimony is corroborated by other evidence tending to connect the
defendant with the offense committed; and the corroboration is not sufficient if it merely
shows the commission of the offense. TEX CODE CRIM. PROC. ANN. art. 38.14 (West
2005). Corroborating evidence can be direct or circumstantial and does not have to
establish the guilt of the accused. Smith v. State, 332 S.W.3d 425, 442 (Tex. Crim.
App. 2011) (“The direct or circumstantial non-accomplice evidence is sufficient
corroboration if it shows that rational jurors could have found that it sufficiently tended to
connect the accused to the offense.”); Gill v. State, 873 S.W.2d 45, 48 (Tex. Crim. App.
1984) (en banc). The corroborating evidence must merely tend to connect the accused
to the commission of the offense. Smith, 332 S.W.3d at 442. In reviewing a complaint
of insufficient corroborating evidence, we are required “to consider the combined force
of all of the non-accomplice evidence that tends to connect the accused to the offense.”
Id.
There are two types of accomplices: (1) accomplices as a matter of law; and (2)
accomplices as a matter of fact. Id. at 439. A person is an accomplice as a matter of
law if the witness is indicted for the same offense or a lesser-included offense as the
accused. Id. However, when a doubt exists regarding whether the witness is an
11
accomplice, the trial judge may instruct the jury to determine the witness’s status as a
fact issue. Id. at 439–40.
B. Discussion
Appellant claims that Hernandez, the shooter, and De Leon were accomplices as
a matter of law. 2 Appellant points out that Hernandez and the shooter were indicted for
the victim’s murder and that a jury found the shooter guilty of killing the victim and that
conviction was affirmed by this Court. Thus, according to appellant, corroboration of
their testimony was required. By a sub-issue, appellant contends that any references
by the witnesses to any acts or statements made by the shooter must also be
corroborated and that we may not rely on such evidence in corroborating the testimony
of Hernandez and De Leon.
1. The Shooter’s Out-of-Court Statements
The shooter did not testify at trial. However, the trial court allowed the witnesses
to testify about statements made by the shooter and actions the shooter took. In
Bingham v. State, the court of criminal appeals “inferred” that article 38.14 requires
corroboration only of testimony of “the legally understood kind”; that is evidence
2
In a footnote to his brief, appellant states that the trial court “changed his mind” and decided that
whether De Leon was a co-conspirator was a fact issue for the jury. Appellant states that the trial court
instructed the jury that Hernandez was an accomplice as a matter of law. The State responds that
appellant’s statement that De Leon was an accomplice as a matter of law is a misstatement of the record.
The State also points out that appellant has not claimed that the trial court erred by allowing the jury to
determine whether De Leon was an accomplice as a matter of fact. According to the State, at the charge
conference, appellant conceded that whether the accomplice-witness rule would apply to De Leon was a
fact matter for the jury to decide. The State points out that at the conference, appellant’s trial counsel
said, “No, no. But that’s not what I am arguing. I am not arguing that he should be an accomplice
witness as a matter of law. I’m saying as a matter of fact. . . . And that’s the issue that the jury needs to
resolve, Judge. That’s the question that’s left up to the jury. They resolve whether or not he is, he
isn’t . . . .” Thus, the State appears to take the position that appellant cannot now claim that De Leon was
an accomplice as a matter of law. However, for purposes of our analysis, we need not resolve whether
De Leon was an accomplice as a matter of law or fact because we will assume, without deciding, that De
Leon was an accomplice. See TEX. R. APP. P. 47.1.
12
adduced “through live witnesses speaking under oath or affirmation in presence of
tribunal [.]” 913 S.W.2d 208, 210–13 (Tex. Crim. App. 1995). The court explained that
the legislature did not regard out-of-court statements made by accomplices “with the
same degree of suspicion as it did an accomplice witness who testifies in court.” Id. at
211. The court held that the court of appeals “was mistaken to conclude that the trial
court should have given an instruction to the jury that [an accomplice’s] out-of-court
statement must be corroborated before the jury could rely on it for conviction,” and that
“the court of appeals erred to hold that the trial court should have instructed the jury that
accomplice witnesses cannot corroborate one another . . . [b]ecause [the non-testifying
accomplice] did not give ‘testimony’ within the meaning of Article 38.14.” Id. at 213.
Here, the shooter did not appear at appellant’s trial and none of the statements
attributed to him by other witnesses were under oath or in the presence of a tribunal;
accordingly, the shooter did not give testimony within the meaning of article 38.14. See
id. We therefore conclude that any references made by non-accomplice witnesses
concerning the shooter’s words and actions do not require corroboration. See id.
Accordingly, we overrule appellant’s sub-issue.
2. Corroboration of Hernandez’s and De Leon’s Testimony
The State concedes that Hernandez’s testimony required corroboration before
the jury could consider it and assumes that the jury determined that De Leon was an
accomplice as a matter of fact also requiring corroboration. See Smith, 332 S.W.3d at
442. We, likewise, will assume, without deciding, that De Leon was also an accomplice
witness and that his testimony required corroboration tending to link appellant to the
murder. See id.
13
The State asserts that the following non-accomplice witness evidence tends to
link appellant to the victim’s murder: (1) appellant did not immediately call for help or
offer help to the victim after witnessing his own brother’s murder; (2) immediately after
the murder, appellant told his father and Luna, “Let’s go. Let’s go. All of us, let’s go
from there, because this is going to become very hot”; (3) appellant had threatened that
there would be “bloodshed” within his family due to his rivalry with the victim and the
family’s decision to cut him off from the bank accounts; (4) the motive for the killing
(getting the victim to sign documents) was corroborated by the documents in
Hernandez’s possession which, if executed, would have had the effect of transferring to
appellant rights to and control over most if not all of the victim’s assets 3; (5) Corporal
Casas testified that the Motorola phone found in appellant’s possession when he was
detained “led” Corporal Casas “to the discovery of a lot of other things in this case”; (6)
telephone records showed that there had been numerous phone calls between
Hernandez and appellant on the Motorola phone and on appellant’s iPhone, including
calls made to and from appellant to Hernandez on the date of the murder and
specifically a phone call at around the time the murder occurred; (7) Corporal Casas
testified that the police determined that Hernandez was involved in the victim’s murder;
and (8) Corporal Casas testified that the phone records showed that there had been
phone calls between the shooter and appellant on the Motorola phone.
3
State’s Exhibit 87 was admitted without objection and includes documents that the victim was
allegedly supposed to sign as well as translations of these documents. The documents included two
letters dated November 22, 2007 for the victim to sign, which state that the victim had requested to be
removed from three bank accounts in Reynosa, Mexico. This would have left appellant as the sole
signatory on the accounts. There were also several copies of documents for the victim to sign granting
appellant “a general power of attorney for litigation and collections, acts of management and ownership.”
Appellant’s mother testified that the power of attorney was for real property.
14
Further, the appellant’s wife, Martha E. Varela, when asked by the prosecutor
whether appellant had stated that “his family was going to pay,” responded, “He told me
that every one, we were going to pay him dearly.” Martha also testified that she recalled
that in 2007, she saw appellant making copies of certain documents including his
mother’s and the victim’s passport pictures that he had “enlarged to letter size.” Martha
stated that after making the copies, appellant called someone and said that he had
“finished the job of developing and printing, and that he was about to go there.”
Evidence was presented that the shooter had been provided with Xerox copies of the
victim’s picture. Finally, Avalos testified that appellant threatened to hurt his parents “in
the worst place.”
We conclude that the combined force of the above-mentioned evidence tends to
connect appellant to the commission of the murder in this case. See TEX CODE CRIM.
PROC. ANN. art. 38.14. As previously stated, the corroborating evidence need not
establish appellant’s guilt. We overrule appellant’s first issue.
III. SUPPRESSION OF THE EVIDENCE
By his second issue, appellant contends that the trial court erred in “failing to
suppress any information acquired as a result” of the seizure of the Motorola phone
because appellant was arrested “without any probable cause or other authority.”
Without citing any authority, appellant argues that “[b]ut for the illegal arrest and
detention in the Mission Police Department jail, the State would not have had the
[Motorola] phone.” Then, again without citation to authority, appellant states, “Whether
Appellant’s arrest was legal is not the issue as far as the statements are concerned. He
15
was under arrest and in custody and was asked question about the case,” and the State
failed to show that the officer read him his Miranda warnings.
A. Pertinent Facts
A pre-trial hearing was held on appellant’s challenge to the admissibility of
comments he made to Corporal Casas that the Motorola phone was not his and that he
only used it when his iPhone died. Appellant argued that the statements were
inadmissible on the basis that he “had already invoked his right not to be questioned”
when Corporal Casas asked about the Motorola phone. Corporal Casas testified that
he did not receive any notice or letter from appellant’s trial counsel that he was not
allowed to question appellant. Corporal Casas stated that appellant did not invoke his
right to an attorney when he was asked about the Motorola phone. Corporal Casas
claimed that he did not question appellant about the case, and only asked him about the
Motorola phone.
On cross-examination, Corporal Casas clarified that appellant was under arrest
when he asked appellant about the Motorola phone. Corporal Casas stated that at that
point, the Motorola phone had not been identified as evidence in the case against
appellant. Corporal Casas admitted that he had not given appellant Miranda warnings
before asking about the Motorola phone. On redirect examination, Corporal Casas
stated that under the circumstances, no Miranda warnings were necessary because he
was not questioning appellant about the murder itself.
B. Failure to Suppress Any Information Acquired from the Motorola Phone
Appellant objected to the admissibility of the statements he made to Corporal
Casas. The trial court stated that it would take the issue concerning appellant’s
16
statement, while under arrest without being read the Miranda warnings, under
advisement. The trial court told the prosecutor only to mention that a phone had been
found in appellant’s possession when he was arrested pending his review of authorities
on the issue. Appellant argued that the State should not be allowed to mention that the
Motorola phone had been found in appellant’s possession. Appellant did not state the
basis of his objection. The trial court again ruled that the State could comment that the
Motorola phone was found in appellant’s boot when appellant was arrested.
The trial court then explained that it had not yet ruled on appellant’s objection to
the admissibility of the comments he made to Corporal Casas regarding the Motorola
phone. At the pre-trial hearing, appellant did not complain that the evidence obtained
from the Motorola phone was inadmissible and did not object to the admissibility of the
phone records or other evidence obtained as a result of the acquisition of the Motorola
phone.
On appeal, appellant complains that the trial court abused its discretion by “failing
to suppress any information acquired as a result” of the seizure of the Motorola phone
because appellant was arrested without any probable cause or other authority.
However, appellant cites no portion of this voluminous record where he objected on this
basis, and we have found no such objection upon our review. 4 Appellant has also not
cited any authority to support his contention that the trial court should have
“suppress[ed] any information acquired as a result” of the seizure of the Motorola phone
because appellant was arrested without any probable cause or other authority.
Because appellant did not object at trial on the basis he complains on appeal, this issue
4
There are over 1,500 pages of trial transcript in the record.
17
has not been preserved for our review. See TEX. R. APP. 33.1; see also id. R. 38.1(i)
(providing that appellant’s brief must cite the record and appropriate authority).
Even if the issue had been preserved, it would be meritless. When the Motorola
phone was offered into evidence as State’s Exhibit 71 along with other items, trial
counsel affirmatively stated, “I don’t have any objections to any of the three [items],
Judge” and when the records for the Motorola phone were offered into evidence as
State’s Exhibits 78 and 79, appellant’s trial counsel stated that he had no objection to
either exhibit. See Swain v. State, 181 S.W.3d 359, 368 (Tex. Crim. App. 2005) (“The
affirmative acceptance of [] previously challenged evidence waive[s] any error in its
admission.”). Also, when Corporal Casas testified that the Motorola phone “led” him “to
the discovery of a lot of other things in this case,” appellant did not object. See id. We
overrule appellant’s second issue in this regard.
C. Failure to Suppress Appellant’s Oral Statements to Corporal Casas
Appellant claims that Corporal Casas failed to perform any of the required
procedures as set out in section 3(a) of article 38.22, which allows admission of a
defendant’s oral statements. See TEX. CODE CRIM. PROC. ANN. art. 38.22, § 3(a) (West
2005). 5 Thus, according to appellant, all of his statements to Corporal Casas were
inadmissible.
5
Article 38.22, section 3(a) states:
(a) No oral or sign language statement of an accused made as a result of custodial
interrogation shall be admissible against the accused in a criminal proceeding unless:
(1) an electronic recording, which may include motion picture, video tape,
or other visual recording, is made of the statement;
(2) prior to the statement but during the recording the accused is given
the warning in Subsection (a) of Section 2 above and the accused
knowingly, intelligently, and voluntarily waives any rights set out in the
warning;
18
Appellant does not cite the record location where he objected on article 38.22
grounds or where the trial court ruled on such an objection, and we have not found any
such objection or ruling in the record. Therefore, appellant has not preserved this issue
for our review. See TEX. R. APP. P. 33.1. We overrule appellant’s second issue in this
regard.
Regarding his complaint that the officers failed to read him his Miranda rights, the
State counters that although appellant made the objection outside the jury’s presence,
he never obtained an adverse ruling from the trial court. Therefore, error, if any, has not
been preserved. We agree with the State.
At the conclusion of the pre-trial hearing, the trial court took the issue under
advisement concerning the admissibility of appellant’s statements to Corporal Casas
that the Motorola phone belonged to a friend. The trial court made it clear to the parties
that it wanted to review pertinent authorities before making a ruling. Appellant does not
provide citation to where the trial court ruled on his objection, and we have not located
such a ruling in the record. See id.; see also id. 38.1(i). Moreover, when Corporal
Casas testified that appellant told him that the Motorola phone belonged to his friend
“Tocayo,” appellant did not object. See Ethington v. State, 819 S.W.2d 854, 858 (Tex.
(3) the recording device was capable of making an accurate recording,
the operator was competent, and the recording is accurate and has not
been altered;
(4) all voices on the recording are identified; and
(5) not later than the 20th day before the date of the proceeding, the
attorney representing the defendant is provided with a true, complete,
and accurate copy of all recordings of the defendant made under this
article.
TEX. CODE CRIM. PROC. ANN. art. 38.22, § 3(a) (West 2005).
19
Crim. App. 1991) (“[D]efense counsel must object every time allegedly inadmissible
evidence is offered.”). We overrule appellant’s second issue in this regard.
IV. IMPROPER COMMENT
By his final issue, appellant contends that the trial court “erred by making a
statement in front of the jury that a witness being questioned by the prosecutor was a
co-conspirator and a party opponent.” Appellant argues that due to this error, he
suffered egregious harm because: “(1) the comments tainted his presumption of
innocence; (2) the [principal] factual issue for the jury to resolve was whether Appellant
was a co-conspirator; and (3) the comments were on the weight of the evidence.”
During his testimony, the prosecutor asked De Leon if Hernandez “at some point
around February, 2008” offered him a job. Appellant’s trial counsel objected on the
basis of hearsay. A discussion was held off the record at the bench. The trial court
then stated, “Okay. The objection is overruled. The Court is going to admit it as a
statement of a co-conspirator. It’s an exception to the hearsay rule. Go ahead.”
Appellant’s defense counsel did not object to the trial court’s comment regarding its
reason for its ruling.
On a second occasion during De Leon’s testimony, the prosecutor asked a
question, and appellant’s defense counsel objected on the basis of hearsay. The
prosecutor argued that the statement was admissible because it was made by a co-
conspirator. Appellant’s defense counsel argued that the party had not been
established to be a co-conspirator. The trial court then stated, “the Court is going to
overrule the objection, and admit in under 801(e)(2), an admission of a party
20
opponent—the statement by a co-conspirator in furtherance of a conspiracy.”
Appellant’s defense counsel did not object to the comment.
On a third occasion, during the State’s direct examination of Corporal Casas, the
prosecutor asked if Hernandez had provided “any information that led [him] to
[appellant].” Corporal Casas replied that Hernandez had provided information. The
prosecutor asked, “[W]hat specifically did you learn about the murder?” Appellant’s trial
counsel objected on the basis of hearsay. The trial court replied, “That’s a statement of
a co-conspirator,” and it overruled the objection. Appellant’s trial counsel did not object
to the trial court’s comment.
The State responds that appellant’s complaint lacks merit because when the trial
court made the complained-of statements, it was within the context of ruling on
appellant’s objections to certain testimony. The State further argues that an objection is
ordinarily required to preserve error when a trial judge makes an allegedly improper
remark or comment unless the error is so prejudicial that it fundamentally affects the
presumption of innocence and cannot be cured by an instruction. Finally, the State
points out that the jury was aware of the fact that De Leon and Hernandez were co-
conspirators.
Appellant did not object to the trial court’s comments. Mestiza v. State, 923
S.W.2d 720, 724, 726 (Tex. App.—Corpus Christi 1996, no pet.) (“A timely proper
objection is necessary to preserve error concerning a trial judge's comment on the
weight of the evidence.”). Thus, the issue has not been preserved for our review. See
id.; see also TEX. R. APP. P. 33.1. However, appellant argues that pursuant to the
plurality opinion in Blue v. State, 41 S.W.3d 129, 132 (Tex. Crim. App. 2000) (plurality
21
op.), no objection was needed because the trial court’s allegedly improper comments
were so prejudicial that it fundamentally affected the presumption of innocence.
Nonetheless, we conclude that the trial court’s comments in this case did not
constitute fundamental error. The jury in this case heard ample testimony that
Hernandez and De Leon had conspired to murder the victim. In Blue, the judge told the
jury that, prior to his trial, the defendant had considered pleading guilty to the offense—
facts that a jury would not have otherwise known—and that the judge would have
preferred the defendant to plead guilty. Id. In effect, the trial court’s comments in Blue
provided the jury information that was not admissible, would not have been available to
the jury, and insinuated that the defendant was in fact guilty and should not go to trial. 6
Id. Here, as stated above, the trial court’s comments did not give the jury information
that it did not already know. It made the comment in the context of ruling on objections.
See id. Moreover, as the State points out, the trial court properly instructed the jury that
it should not concern itself with any of the objections or rulings that it made, that the jury
should presume appellant’s innocence, and that it should wholly disregard the rulings
and comments of the judge. See Colburn v. State, 966 S.W.2d 511, 520 (Tex. Crim.
App. 1998) (“We generally presume the jury follows the trial court’s instructions in the
manner presented.”); Jones v. State, 264 S.W.3d 26, 29 (Tex. App.—Houston [1st Dist.]
2007, pet. ref’d); see also Vega v. State, 255 S.W.3d 87, 105 (Tex. App.—Corpus
Christi 2007, pet. ref’d) (“[A]ny error was harmless because the [limiting] instruction,
which we presume the jury followed, identified material issues for which the evidence
6
We note that in Unkart v. State, 400 S.W.3d 94, 101 (Tex. Crim. App. 2013), the Texas Court of
Criminal Appeals clarified that the plurality opinion in Blue v. State, 41 S.W.3d 129 (Tex. Crim. App. 2000)
(plurality op.) is not binding authority but may still be persuasive.
22
could be considered under Rule 404(b),” and appellant did not present any evidence
rebutting the presumption that the jury followed the trial court’s instructions). Thus, we
cannot conclude that in this case, the trial court’s comments violated appellant’s
fundamental rights which would have required no objection. See Unkart v. State, 400
S.W.3d 94, 101 (Tex. Crim. App. 2013) (finding no fundamental error and that the
appellant forfeited his complaint by failing to object, while instructing the jury about the
defendant’s right not to testify, the judge said, “if I were [charged with a crime], then I
think I would probably [would] want to get up and tell my side. It’s just my nature. I
would want to probably say my point of view on the thing or my version of the facts, but
that’s just me”). We overrule appellant’s final issue.
V. CONCLUSION
We affirm the trial court’s judgment.
_________________
GINA BENAVIDES
Justice
Do not publish.
TEX. R. APP. P. 47.2(b).
Delivered and filed the
9th day of January, 2014.
23
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238 F.Supp.2d 903 (2003)
James and Janice ELSMAN, Plaintiffs,
v.
STANDARD FEDERAL BANK (MICHIGAN); Standard Federal Bank (Chicago); Standard Federal Bancorporation, a holding company; ABNAMRO North America, Inc., a Delaware corporation; Ronald Gorga; "Chip" Miller; Dan Watson; Scott Heitmann; Dykema Gossett PLLC., Law Firm; Craig L. John; Andrew J. Lusk; Katherine M. White; et al, Defendants.
No. CIV.00-72022.
United States District Court, E.D. Michigan, Southern Division.
January 9, 2003.
*904 *905 James Elsman, Birmingham, MI, for plaintiffs.
Katherine White, Dykema, Gossett, PLLC, Detroit, MI, for defendants.
MEMORANDUM OPINION AND ORDER
TAYLOR, District Judge.
I.
This motion for sanctions arises out of pleadings which Plaintiff James Elsman ("Elsman"), an attorney, submitted during litigation concerning loans the Standard Federal Defendants ("the Bank") provided him. Elsman appeared in this Court claiming that the Bank had violated several of his constitutional rights when the Bank executed on a judgment which it had secured in the state courts against him. This Court granted Defendants' motion to dismiss and or for summary judgment of Plaintiffs' statutory and constitutional claims and assessed sanctions against Elsman pursuant to Rule 11 of the Federal Rules of Civil Procedure. Fed.R.Civ.P. 11. Upon the Sixth Circuit's remand of this Court's order granting sanctions, the Defendants filed a renewed motion for sanctions against Elsman. On November 18, 2002, the Court heard oral arguments on Defendants' renewed motion. For the reasons explained below, the Defendants' motion is GRANTED.
II.
Although Janice Elman, James Elsman's wife, is a named Plaintiff, the pertinent facts of this case solely relate to Mr. Elsman ("Elsman"). Elsman, a licensed attorney, has represented himself throughout the entire course of this litigation. Because Defendants' renewed motion relates to Elsman's various written submissions, a discussion of the procedural posture of this case is appropriate.
A. State Court Proceedings
The Bank defendant had made several loans to Elsman which were secured by a mortgage interest in his real property located in Birmingham, MI. When Elsman failed to timely repay the loans, the Bank secured a judgment of possession of that property in Oakland County Circuit Court against Plaintiffs. Elsman unsuccessfully appealed the judgment in the Michigan courts. See Standard Fed. Bank v. Elsman, 461 Mich. 898, 607 N.W.2d 726 (2000) *906 (Table): Standard Fed. Bank v. Elsman, 461 Mich. 898, 603 N.W.2d 644 (1999) (Table).
After exhausting the appeals process in the state courts, Elsman did not appeal to the U.S. Supreme Court, but rather filed a complaint in this Court on May 2, 2002, alleging that Defendants had violated his due process right to sell the Birmingham real property to a party offering more than the Bank's contracted buyer. Elsman also filed a notice of lis pendens on the Birmingham property with the Oakland County Register of Deeds. On May 3, 2002, Elsman appeared before the state trial court arguing that the filing of this federal suit had stayed the writ of restitution scheduled to be issued that day. The state court denied the motion and issued the writ of restitution. On May 3, 2000, Elsman also appeared in the federal district court seeking a temporary restraining order ("TRO") against the Bank, which request was denied.
In addition, the Bank foreclosed on another piece of real property owned by Elsman. The Bank had secured a separate judgment in Oakland County Circuit Court against him because the proceeds from this foreclosure sale were insufficient to cover Elsman's debt. Elsman failed to satisfy this judgment as well, at which time the Bank obtained an execution against his personal property. Consequently, the Bank seized Mr. Elsman's automobile, a van, as well as some personal property within the van. Elsman alleges that the executing officer, accompanied by two Birmingham police officers (who are not defendants here), made an unconstitutional and forced entry into his locked office building to take possession of the personal property.
B. Federal District Court Proceedings
Plaintiffs' federal complaint requesting class action certification and injunctive relief, contained allegations that Defendants violated various federal statutes and constitutional provisions when they arrived at Mr. Elsman's business office to execute the judgment of possession against him. Elsman contended that the persons executing the van seizure violated his constitutional rights to due process and equal protection, as well as his rights under the Takings Clause. Elsman also asserted several statutory claims including: § 1983 claims for violation of unspecified Michigan and United States constitutional provisions, 42 U.S.C.A. § 1983; violations of the Truth in Lending Act ("TILA"), 15 U.S.C.A. § 1640, et seq., the Consumer Credit Protection Act, 15 U.S.C.A. § 1681, the Fair Debt Collection Act, 15 U.S.C.A. § 1962, and RICO, 18 U.S.C.A. § 1961; and, "lender liability" for breach of fiduciary duty, fraud, and violation of good faith and fair dealing.
On August 18, 2000, Defendants forwarded their original proposed motion for sanctions to Plaintiffs by mail. When Plaintiffs did not dismiss their complaint within the 21 days required by Rule 11, Fed.R.Civ.P. 11(c)(1)(a),[1] Defendants subsequently filed a motion to dismiss and/or for summary judgment. This Court granted Defendants' dispositive motion relying on the Rooker/Feldman doctrine, District of Columbia Court of Appeals v. Feldman, *907 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983); Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923), which holds that a federal district court lacks subject matter jurisdiction to review final determinations made by a state's highest court. The Court also held that res judicata barred the remainder of Elsman's claims, which previously had been presented to and ruled upon by the state courts.
The Court heard and granted Defendants' initial motion for Rule 11 sanctions, awarding Defendants costs and attorney fees but leaving the amount of the sanctions award undetermined until supported under oath. Upon receiving Defendants' affidavit detailing the fees incurred at both the district and appellate levels, this Court entered its order assessing $16,690.56 in fees against Elsman, and instructing Elsman to remove the notice of lis pendens on the Birmingham property. The amount assessed against Elsman as a sanction reflected the expenses Defendants' incurred in defense of this action in the district court only.
C. Sixth Circuit Proceedings
Elsman appealed the grant of Defendants' motion to dismiss and or for summary judgment, and the sanctions award to the federal court of appeals. The Sixth Circuit affirmed this Court's order granting Defendants' motion to dismiss and/or for summary judgment, holding that the Rooker/Feldman doctrine barred review of the Michigan Supreme Court's decision in any tribunal other than the United States Supreme Court. See Elsman v. Standard Federal Bank, 46 Fed. Appx. 792, 798 (6th Cir.2002). The federal appeals court stated that although an exception to the Rooker/Feldman doctrine exists when a plaintiff makes a claim facially attacking the constitutionality of a statute, this case did not fit that exception. Id. Elsman's statutory claims were also rejected because Defendants are not state actors. Id. at 798. While the appeals court disagreed that res judicata barred Elsman's personal property claims, the court nevertheless affirmed the district court's order on the grounds that Elsman clearly failed to allege more than "bare legal conclusions" which are insufficient to survive a Rule 12(b)(6) motion to dismiss and that "the complaint did not adequately plead any actionable claim." Id. at 799-800 quoting Advocacy Org. for Patients and Providers v. Auto Club Ins. Ass'n, 176 F.3d 315, 319 (6th Cir.1999).
The Sixth Circuit reversed the monetary sanctions award, however, and remanded to this Court with instructions to: 1) identify the basis for the Rule 11 sanctions; and 2) conduct an inquiry into the reasonableness of the amount awarded, 46 Fed. Appx. at 801-02. This memorandum constitutes the Court's findings of fact and law on Defendants' renewed motion for Rule 11 sanctions.
III.
Defendants contend that sanctions should be awarded against Elsman because he did not thoroughly research the law. If Elsman had done so, Defendants posit that he would have known: 1) that the Defendants are not state actors, thus any constitutional claims against them must fail; 2) that res judicata barred the complaint; and, 3) that the district court lacked subject matter jurisdiction according to the Rooker/Feldman doctrine or any good faith argument for extension thereof.
In response, Elsman argues that a 111-paragraph complaint, by definition, requires reasonable and careful investigation. Elsman also asserts that he made a good faith argument for an exception to the Rooker/Feldman doctrine, or, alternatively, that the doctrine should not apply, when he cited another district court's ruling in Puertas v. Mich. Dep't of Corrections, *908 et al. 88 F.Supp.2d 775, 779 (E.D.Mich.2000), in his complaint. Elsman further argues that the focus of his complaint was not on Rooker/Feldman doctrine issues, but rather on the Bank's harassment and the allegedly unlawful entry into his business office to execute on a vehicle located outside the office.
A. Sanctionable Conduct
By signing a complaint, or any other written motion or pleading, an attorney certifies that the claims made therein are warranted by existing law or are nonfrivolous arguments to extend, modify, or reverse existing law. See Fed.R.Civ.P. 11(b)[2]; Tropf v. Fid. Nat'l Title Ins. Co., 289 F.3d 929, 939(6th Cir.2002). The purpose of Rule 11 is to deter baseless filings. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990); Knestrick v. IBM, 945 F.Supp. 1080, 1082 (E.D.Mich.1996)(noting that Rule 11 sanctions are appropriate when a pleading is frivolous, being both baseless and made without a reasonable or competent inquiry).
It is true that federal courts have jurisdiction to review alleged denials of a federal constitutional right by state courts. Puertas, supra, 88 F.Supp.2d at 779. A reasonable investigation of the law, however, would have revealed that Puertas only refers to a deprivation of federal constitutional rights by courts, not by private individuals in an alleged capacity as state actors. Id. Elsman does not complain that, or explain how, the Michigan courts deprived him of any federal constitutional rights. His failure to plead any facts supporting his claim that Puertas offers an exception to the well-settled Rooker/Feldman doctrine further weakens Elsman's representations that he intended to make a nonfrivolous argument for the extension or modification of existing law in his complaint. Thus, Elsman's complaint warrants sanctions as it clearly was filed without competent inquiry. Knestrick, supra, 945 F.Supp. at 1082.
Defendants also assert that Elsman filed his federal complaint for the improper purposes of avoiding a judgment against him and to punish the Dykema defendants for vigorously representing the Bank. Elsman contends that the federal complaint was filed because there were legal issues questioning the acts of Michigan courts and that the Dykema defendants were named because they directed bailiffs to act illegally. The test for imposing sanctions is whether the individual's conduct was reasonable under the circumstances. Union Planters Bank v. L & J Dev. Co., 115 F.3d 378 (6th Cir.1997). Whether sanctions should be granted is not to be determined in hindsight, but rather by examining counsel's conduct and reasonable beliefs when the offensive pleading was filed. Mann v. G & G Mfr., Inc., 900 F.2d 953, 958 (6th Cir.1990). Good faith is insufficient to establish reasonableness. Id.
Counsel's subjective belief in the propriety of the pleading is irrelevant in determining whether Rule 11 has been violated since that assessment must be made using *909 an objective test of reasonableness under the circumstances. Knestrick, supra, 945 F.Supp. at 1082. The relevant question . . . is whether a competent attorney . . ., after appropriate investigation, would have reasonably believed that the claim was well grounded in fact and law. Id.
Elsman did not allege that Defendants' actions as private citizens could be attributed to the state. The complaint lacks any factual or legal support that Elsman's claims involved state actors, a necessary element for his constitutional and § 1983 claims. Elsman's argument on remand that the bailiffs present at execution of the judgment served as state actors likewise is unsupported by existing law. The "mere acquiescence by police to stand by in case of trouble does not constitute state action in a repossession situation." Haverstick Enter. v. Financial Fed. Credit, Inc., 803 F.Supp. 1251, 1256 (E.D.Mich. 1992). Elsman did not name the bailiffs as defendants in this case, thereby vitiating his claims that the bailiffs' conduct provided the basis of the lawsuit brought before this Court. Elsman interposes this argument for the first time on remand in a plain attempt to avoid the imposition of sanctions. Moreover, even if Elsman possessed a good faith belief that the bailiffs were state actors, his good faith is not sufficient to establish that his beliefs were reasonable at the time the complaint was filed. A competent attorney's careful investigation would have revealed that none of the Defendants are state actors and, therefore, that there were no plausible legal grounds on which to file a complaint asserting constitutional claims against them.
Additionally, conclusory allegations unsupported by facts or law warrant sanctions. Haverstick, supra, 803 F.Supp. at 1259-61 (admonishing plaintiffs and their counsel to research their claims more carefully to avoid monetary sanctions); Pierzynowski v. Detroit Police Dep't, 947 F.Supp. 1147, 1151 (E.D.Mich.1996). Elsman's complaint is sanctionable because it contains summary assertions without including or explaining citations to any legal authority that support his contentions. For example, Elsman does not effectively refute Defendants' assertions that he filed the complaint for improper purposes except to say that the Bank harassed him. See Pl.'s Answer, ¶ 10(B), p. 3. Elsman's conduct, therefore, objectively "falls short of the obligations owed by a member of the bar to the court." Pierzynowski supra, 947 F.Supp. at 1151. That conduct resulted in considerable expense for Defendants to contest his claims. Id. (awarding attorney fees pursuant to 28 U.S.C. § 1927 against an attorney who did not present any evidence to support his client's claims that an arresting officer violated his civil rights due to poor training).
By filing his complaint in federal court, Elsman simply sought to re-litigate issues already conclusively decided by the Michigan courts, including the Michigan Supreme Court. Therefore, Elsman is subject to sanctions because his conduct was unreasonable under the circumstances. The complaint he submitted does not reflect careful, reasonable investigation of the facts and law, nor does it constitute a nonfrivolous argument to extend, modify, or reverse existing law. Elsman is also subject to sanctions because none of the Defendants are state actors and therefore, he has not effectively contradicted Defendants' claims that Elsman filed his complaint for the improper purposes of punishing the Dykema defendants for vigorously representing their clients and avoiding the judgments the Bank defendants secured against him. See Alcan Aluminum v. Lyntel, 656 F.Supp. 1138, 1140 (N.D.Ill.1987)(noting that a complaint presented to avoid collection of a judgment is filed for an improper purpose).
*910 B. Sanction Award
Defendants contend that an award of Defendants' costs and attorney fees in defending this action and in bringing this motion is necessary to deter repetition of Elsman's conduct. Defendants also request that this Court enter an order prohibiting the Plaintiffs from filing any further actions against the instant Defendants relative to the Real Property and Personal Property actions.
At oral argument, Elsman proposed three (3) alternatives to awarding the relief Defendants' request. Initially Elsman argued that no sanctions should be awarded at all because the case has concluded, Plaintiffs have paid all judgments due and owing, and because Plaintiffs will not make any further filings related to this case. The second proposed alternative was to award only one-third, or approximately $5,000 of Defendants' requested relief because the complaint's sole defect was the Rooker/Feldman claims which only constitute 20% of the 11 counts. The third, and final, alternative Elsman proposed was that any sanction award should not exceed $15,000 because that amount is what Defendants previously requested on the record in the first hearing for sanctions.
A claim for a party's total costs requires an investigation into the reasonableness of those costs. Orlett v. Cincinnati Microwave, Inc., 954 F.2d 414 (6th Cir.1992). Before awarding a party's total costs and fees as sanctions, the district court should consider the offending party's ability to pay, want of diligence, and the amount necessary and effective to bring about deterrence. Id. Compensable fees under Rule 11 should be limited to those incurred as a result of the offensive pleading. See Bodenhamer Bldg. Corp. v. Architectural Research Corp., 989 F.2d 213, 217 (6th Cir.1993). Further, when granting Rule 11 attorney fees on remand, the district court must review such costs with exacting scrutiny; a blanket award of all fees incurred during litigation is not authorized under Rule 11. Id.
When questioned about the reasonableness of the attorney fees and expenses incurred, Defendants' counsel, commented that although her expertise was not stated in Defendants' Affidavit supporting September 2002 Rule 11 sanctions, she has been practicing since 1996. Defendants' counsel further expressed that the $135 per hour rate charged for attorney fees is less than the actual rate of $150 per hour for an associate of like experience. The $225 per hour rate charged by other attorneys working on the case reflect their experience as very senior partners. When the Court inquired as to why Defendants' attorney billing statements made some references to the state court proceedings, Defendants' counsel stated that the fees submitted were incurred only in this federal district court case, and that discussion of the state court proceedings was necessary as the state court cases formed the basis of Plaintiffs' claims.
The Court finds that an award of the total fees Defendants' incurred is necessary due to Mr. Elsman's want of diligence in researching and supporting the allegations set forth in his complaint and to effectively deter similar conduct in the future. The Defendants' Affidavit thoroughly documents the attorneys who worked on the matter, their respective billing rates, and their final fees and costs devoted to defending Elsman's complaint. The Court also finds that the fees submitted are reasonable based on those attorneys' experience. Given Mr. Elsman's comments at oral argument that no further filings are forthcoming in this case, the Court declines to enter an order preventing Plaintiffs from filing any further actions against these Defendants related to Plaintiffs' real or personal property at this time.
*911 IV.
IT IS ORDERED that Plaintiffs are liable for sanctions in the form of attorney fees and costs totaling $16,690.56.
IT IS SO ORDERED.
NOTES
[1] Fed.R.Civ.P. 11(c)(1)(a) in relevant part reads:
(c) Sanctions.
(1)(A) By Motion. A motion for sanctions . . . shall be served . . . but shall not be filed with or presented to the court unless, within 21 days after service of the motion . . . the challenged paper, claim, defense, contention, allegation, or denial is not properly withdrawn or appropriately corrected. If warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorney's fees incurred in presenting or opposing the motion.
[2] Fed.R.Civ.P. 11(b) reads in relevant part:
(b) Representations to the Court. By presenting the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances.
(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law . . . .
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930 F.2d 33
Unpublished DispositionNOTICE: Tenth Circuit Rule 36.3 states that unpublished opinions and orders and judgments have no precedential value and shall not be cited except for purposes of establishing the doctrines of the law of the case, res judicata, or collateral estoppel.Richard DEMAREST, Petitioner-Appellant,v.James MANSPEAKER, Clerk of United States District Court forthe District of Colorado, and Cathy, Last NameUnknown, Defendants-Appellees.
No. 88-1899.
United States Court of Appeals, Tenth Circuit.
Feb. 22, 1991.
Before LOGAN and EBEL, Circuit Judges, and COOK, District Judge.*
ORDER AND JUDGMENT**
LOGAN, Circuit Judge.
1
This matter is before us upon remand from the United States Supreme Court. The Supreme Court of the United States held that the clear language of 28 U.S.C. Sec. 1821 requires payment of witness fees to a convicted state prisoner who testifies at a federal trial pursuant to a writ of habeas corpus ad testificandum, reversing our holding to the contrary in Demarest v. Manspeaker, 884 F.2d 1343 (10th Cir.1989). Demarest v. Manspeaker, 111 S.Ct. 599 (1991). The case was remanded to us for further proceedings consistent with the Supreme Court's opinion.
2
We hereby recall the mandate and vacate our earlier judgment. We conclude that there is nothing further for us to redetermine with respect to the case. The Supreme Court's action requires that the judgment of the United States District Court for the District of Colorado be reversed. The cause is remanded to the United States District Court for the District of Colorado for further proceedings in accordance with the opinion of the United States Supreme Court.
3
It is so ordered. The mandate shall issue forthwith.
*
The Honorable H. Dale Cook, Chief Judge, United States District Court for the Eastern, Northern and Western Districts of Oklahoma, sitting by designation
**
This order and judgment has no precedential value and shall not be cited, or used by any court within the Tenth Circuit, except for purposes of establishing the doctrines of the law of the case, res judicata, or collateral estoppel. 10th Cir.R. 36.3
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839 F.Supp. 171 (1993)
Robert B. REICH, Secretary of Labor, United States Department of Labor, Plaintiff,
v.
NEW YORK CITY TRANSIT AUTHORITY, A Corporation, Defendant.
No. CV 89-4284.
United States District Court, E.D. New York.
December 13, 1993.
*172 Patricia M. Rodenhausen, Regional Solicitor, U.S. Dept. of Labor, New York City, Judith E. Kramer, Deputy Solicitor of Labor, (Louis De Bernardo and Harold W. Lemar, Attys., of counsel).
Proskauer, Rose, Goetz & Mendelsohn, New York City (Myron D. Rumeld and Neil Howard Abramson, of counsel).
OPINION AND ORDER
SPATT, District Judge.
This is an action by the Secretary of Labor ("the Secretary") brought pursuant to the Fair Labor Standards Act of 1938, as amended (29 U.S.C. § 201 et seq.) ("FLSA") to enjoin the defendant New York City Transit Authority ("TA") from violating the provisions of the FLSA with regard to the transportation of canines ("canines" or "dogs") by the New York City Transit Authority Police Department ("TAPD") Canine Unit.
The issue is whether the hours spent traveling from the police officer dog handler's home to the place of work and the return trip to the home of the handler transporting a canine of the TAPD, constitutes compensable hours under the FLSA and the Regulations promulgated under the FLSA (29 C.F.R. 785 and 29 C.F.R. 790.7[d]).
BACKGROUND
The defendant TA is a public benefit corporation engaged in the operation of transportation units in the City of New York including the subway system. The New York City Transit Authority Police Department is the police and law enforcement arm of the TA. With regard to the issues in this case, the TA admits it is an employer within the meaning of Section 3(d) of the FLSA (29 U.S.C. § 203[d]); it is an enterprise within the meaning of Section 3(r) (29 U.S.C. § 203[r][1]; and it employs "certain employees" within the meaning of Section 3(s)(6) (29 U.S.C. § 203[s][6]) of the Act.
The TAPD contains a canine unit first established in 1980. The canine unit consists of police officers known as "handlers" and the canines. These TAPD police dog handlers patrol the New York City subway system accompanied by male German Shepherd dogs weighing between 75 to 110 pounds. The canine teams are used to deter criminal activity and assist in the detection and prevention of crimes.
The police canine handlers are solely responsible for the care of the dogs assigned to them. They are required to personally transport the dogs and to personally care for the dogs at their homes. Their categorical mandate is to transport the dogs in their motor vehicles and not by public transportation. The TAPD handlers solely transport, feed, care for and train their police dogs.
In a partial consent order approved by the Court in April 25, 1992, the parties settled all claims for uncompensated dog care duties and travel time for the period preceding October 15, 1990. In this consent order the parties also settled all claims for dog care duties performed at their homes for certain handlers for the period prior to the filing of the stipulation. Moreover, the parties consented to reserve for trial certain issues for the period commencing October 15, 1990, including the following:
"(A) Whether the hours spent traveling from the handler's home to his/her place of work and return, transporting a canine to be utilized by the Canine Unit of the New York City Transit Authority Police Department constitutes hours worked compensable under the Act and regulations found at 29 C.F.R. 785 and 29 C.F.R. 790.7(d);
(B) Whether the defendant violated sections 7 and 15(a)(2) of the Act by failing to pay for the activity described in (A) above;
....
(G) Whether, in the event plaintiff prevails with respect to the issue set forth in (A) above, plaintiff is entitled to a permanent injunction enjoining defendant from future violations of the Act pursuant to § 17 of the Act with respect to employees *173 of the Canine Unit of the New York Transit Authority Police Department."
The Court bifurcated the trial so as to try liability and the plaintiff's request for injunctive relief, and reserved the issue of damages, if necessary, to a later date.
CONTENTIONS
The plaintiff Secretary contends that the TAPD canine handlers are entitled, under the law and regulations, to overtime wages for the time spent traveling from the handler's home to his/her place of work and the return trip transporting the canine. The Secretary further states that such travel time is compensable within the purview of the Fair Labor Standards Act and the Regulations at 29 C.F.R. Parts 785 and 790 (1993). Stated simply, the Secretary claims that the TAPD canine handlers should be compensated for their home-to-work-and return to home travel time while transporting the canines.
On the other hand, the defendant contends that the handlers' travel time is not compensable merely because they are accompanied by the dogs. The defendant further asserts that the Department of Labor ("DOL") claim is barred by Section 4(a)(1) of the Portal-to-Portal Act. In addition, the defendant argues that the handlers' travel time is not compensable under an "integral and indispensable" analogy or as "travel between principal activity job sites."
THE TRIALFINDINGS OF FACT
This opinion and order includes the Court's findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a) (see also Colonial Exchange Ltd. Partnership v. Continental Casualty, 923 F.2d 257 [2d Cir.1991]).
During this discussion, the Court will make findings of fact which will be supplemented by additional findings later in the opinion.
The trial counsel for the defendant was substantially correct when he said in his opening statement that "this case is almost entirely, if not exclusively, legal" (Tr. at p. 5). The testimony adduced by the twenty witnesses, including the nineteen dog handlers who testified, was enlightening to the Court on the duties and responsibilities of a dog handler, and, in particular, with regard to their canine transportation duties. However, the facts with regard to the compulsory transportation of the dogs by the handlers' motor vehicles, and the occurrences on such car rides with the dogs are essentially undisputed.
THE PLAINTIFF'S CASE
In fairly typical testimony, JOHN BENINTENDO, a sergeant in the TAPD, volunteered for the newly organized Canine Unit in 1980. He was a handler, assistant trainer and Director of training. A handler patrols the subways and other TA areas with his canine to deter crime, arrest suspects, search buildings and other duties. It is necessary for the handlers to take their dogs home to be fed and otherwise cared for. It is the sole responsibility of the handler to transport by car, feed, house and care for his or her dog. The object of the sole responsibility by the handler in transporting and caring for the dog is to create a bond between the handler and the dog.
The dogs, all male German Shepherds, are given aggression training, are taught to bite culprits, obedience to the handler and to respond to threats to their handlers. While it may be a strange use of the term to a lay person, most of the TAPD dog handlers, considered their dog to be a "tool" as well as a pet. In another unusual concept, they likened the transportation of their dog as a tool, to the carrying of their gun.
There is a single reporting place for the handlers and their dogs; the Brooklyn Army Terminal ("Terminal" or "BAT"). All the dog handlers are instructed that the dogs must be transported to and from work by car and not by public transportation. Significantly, if a handler is sick and unable to work, another police officer is sent to the handler's home to transport the dog to the Terminal by car. That person is paid for traveling time (see Tr. p. 42).
As to the transportation of the dog in the handler's car, it is the responsibility of the handler to tend to the dog during the trip. The vicissitudes of a trip by car with the *174 German Shepard dog trained to be aggressive, consumed most of the trial time. In a fairly common experience, Sgt. Benintendo testified as follows:
"Q During training did you communicate to the handlers that they had any type of responsibility toward the canine during transporting that dog to and from work?
A Yes. That he should be attended to even in the car. He needs water in the car also, if it is a long ride home, he may have to stop the car, walk the dog. He may have to drive a little more defensively, when you have a volatile object in the back of the car.
....
Q Do you have an opinion as to while the handler transports the dog to and from work as to where the handler's direction attention is directed?
A It is two phased. He has to keep track of the road, that's natural. And he should be aware of what the canine is doing.
Q Under what circumstances would the handler have to interact or do something to the canine, to the dog?
A Well, if he started panting and being restless, it is a behavior sign of the dog being in some stressful situation, maybe he has to be walked or he is going to throw up or whatever. And he should investigate the further.
Q Have you been aware of situations where the canine has thrown up in the car?
A Yes, my assigned canine has thrown up in the car many times.
Q Is this something that would acquire (sic) immediate attention?
A Yes. The well-being of the dog is always immediate, and secondary is driving the rest of the trip with that unwarranted objects and feces and vomit in the car. You have to take care of that, too, treat it out" (Tr. at pp. 45, 51-51).
Sgt. Benintendo was of the opinion that the handler's social activity after work is diminished because the handler has to take the dog directly home.
A common trait with regard to all the dog handler witnesses is that they love dogs. The handlers are permitted to "adopt" the dogs after the canines reach retirement age. The Court finds that these special members of the TAPD accept the canine assignments because they want to work with dogs and know that, after a number of years, they will acquire a valuable pet.
The TA pays for many of the dog expenses, including food, veterinary treatment and parking fees. At the inception of their assignment, each TAPD dog handler was advised that there would be no travel time compensation and they willingly accepted the duty without such compensation. Further, the union contract governing the TAPD does not require that the canine handlers be compensated for travel time and such compensation has never been paid.
The Court finds that the usual transportation of the dogs to and from work is affected by the presence of the dog when the dog becomes sick or unruly. For example, Sgt. Benintendo testified that he had to stop his car and walk his dog on more than twenty occasions a year.
KEITH SAINTEN, another TAPD dog handler, testified that while transporting his dog, the animal is kept in the back seat. This is apparently the uniform method of traveling with the canine in the car. Sainten's dog, who weighs 75 to 80 pounds, reacts to people who approach his car, as follows:
"Q And I believe you testified that Pete's reaction to windshield washers, prostitutes, kids or someone else who approaches the car; is that correct?
A Yes.
Q And how does he react?
A He would be barking at them. He would jump up and bark at them, lunges toward them.
Q Do you take corrective action?
A Yes.
Q How do you do that?
A I have to hold him. If he sees a dog he goes after them also. And I have to hold him.
Q Has he ever seen a dog or someone out the front windshield?
A Yes.
*175 Q And what does (sic) they do then?
A Lunges toward the front of the car.
Q What do you do then?
A Grab him and hold it back.
....
Q Have you ever had to stop your vehicle when you are transporting people (sic)?
A Yes.
Q And what were the circumstances, if you can, would you tell us.
A Usually in the summertime, sometimes I feel he may need water, he starts panting or something. And he may want to be exercised, he starts whining and I see his tail is standing up or something. And I pull to the side.
Q Has he thrown up while transporting him?
A Yes.
Q And what do you do when he throws up?
A I carry towels in the car, and I clean it up.
Q You stop the vehicle to clean it up?
A Yes" (Tr. at pp. 140-142).
Sainten testified that while taking "Pete" to work doesn't increase the time of his commute, in the summer "he can be a burden in the car."
MICHAEL D. BARROW has been in the Canine Unit since September 1984. His dog is a 100 pound German Shepherd. He related his experience in transporting the dog, as follows:
"Q Could you describe to us the trip you make to work transporting Champ?
A Transporting the canine, depending on traffic conditions, and the dog's state of mind, traveling to work, he is usually in an excited state.
Q Does he ever stand up?
A He stands up quite often, constantly.
Q Where is he in the vehicle?
A Seated in the back seat of my car. I have a two-door car.
....
Q Would there be any occasion where you have to stop your vehicle in the transport?
A There have been occasions when I have to, when I sit in traffic for an inordinate amount of time, and he is crying to go and I have to pull over or exercise him or relieve him. When he is throwing up I have to pull over and let him throw up outside the car.
....
Q Does Champ react to anything outside of your vehicle while you are transporting him?
A Constantly.
Q What does he react to?
A If eye contact with another person in another vehicle, he sees, he instantly starts barking and getting aggressive.
....
Q With respect to taking corrective measures, would there be any problem of letting Champ or when you had Bandit, to let them bark the whole route?
A You are not allowed to let that happen.
Q Why not?
A Too much of a distraction driving from our own personal safety, and it is not good for the dog to be constantly in that aggressive mode" (Tr. at pp. 182-185, 190).
On the other hand, Barrow testified that he did not expect to be compensated for travel time; he rarely has to stop to relieve the dog; and he generally can discipline his dog in the car by verbal commands.
JOHN HANSEN entered the Canine Unit in 1986. Hansen testified that while transporting his dog, if there is traffic, the dog gets agitated and starts barking. Also, people on the street cause the dog to be agitated. He drives and watches the dog at the same time.
"Q You testified you have the windows open slightly, approximately an inch and a half you said. Why not more?
A He can't jump out and nobody can put the hand in there.
....
Q Can you describe for us how hard or easy it was to transport King to and from work?
*176 A Well, some days it might be easy and some days harder. It depends on like traffic, or if stopped at a light somebody runs across, or noise, and I would be jumping up and down. My old car, he ripped the back seat in my old car. Some days it would be easy and some days hard" (Tr. at pp. 204-207).
However, Hansen said that his commuting time is increased no more than five to ten minutes and it is rare for him to have to pull the car over.
Dog handler KENNETH YULE explained how he was trained by Lieutenant Galfano, presently the commander of the Canine Unit, as follows:
"Q And did he tell you anything during the interview about the canine unit?
A Yes. He told us the responsibilities, that the dog is to be considered like your gun, and that it is a twenty-four hour a day responsibility, and anything that happens, it is your fault and you will be held liable.
Q Did he mention anything about transporting the dog?
A Yes. He said you would need your own car to transport the dog to and from" (Tr. at p. 235).
It takes handler Yule an hour and a half each way to commute with his dog. He described the average trip:
"Q Could you describe to us the transporting your dog back and forth?
A I place him in the back seat, and place the lead through the door and tie it in a knot so he doesn't move around too much.
Q Can you describe what happens in transporting?
A We get in the car and we start driving. He is constantlyyou know, you are constantly watching him, watching the road. It is work. It doesn't end. It is nonstop. Once he gets in the car, until I get to work, until I get home again, he is constantly moving around, barking, standing up.
....
Q And do you utilize the rear-view mirror?
A When he stands up it's a major problem because he is so big he blocks the whole mirror. And by that time now as you are driving along, you are looking behind at him, trying to pull him down, down, and looking at the roads. It is a real pain in the neck" (Tr. at pp. 236-239).
Although, his trip with his dog is sometimes disturbing, there is generally no increase in travel time except when Yule has to stop the car, which occurred ten to twelve times in two and a half years, resulting in a ten minute increase in travel time. Yule considers his dog to be a "tool" at work but not at home.
FRANK VOLLARO has been a dog handler in the TAPD for more than seven years. While he states his dog is a "tool," his wife and daughter treat the dog like a pet. Vollaro's commute is not burdensome and he didn't expect to be paid for his travel time. The family of handler CHRISTOPHER REGGI also treat his dog as a pet, even though he equated his dog with his gun in that he is responsible for both on a twenty-four hour basis. Handler JAMES JOYCE considers transporting his dog to be a significant responsibility. However, his travel time is not increased by having the dog since he never stops enroute.
HOWARD SILVERSTEIN was in the Canine Unit for five years. He considers his dog to be a "tool" and a "partner". Enroute in the car if people approached, he barked. His dog Buddy was aggressive at home, growled at his wife and bit Silverstein on several occasions. Buddy was not adopted and was destroyed. His commuting time was no longer except in the summer by only five minutes.
EDWARD ULMER has been in the Canine Unit for eight years and is now a trainer. He testified as to his instructions to the dog handlers while training them, as follows:
"Q And what do you instruct new handlers?
A New handlers are instructed from day one, that these dogsthat these dogs are notthey are not your average family pet; that there is a lot of responsibility in handling one of these dogs. They arethey are another tool like your gun, and you have to be aware of the dog's presence at *177 all times. And anything that dog does is your responsibility.
Q Do you instruct them in any way as to whether or not they can leave the dog alone in the car?
A The dog is not supposed to be left alone in the car at any time.
Yes, we do instruct them to do that.
Q Is there any instruction given to the new handlers regarding whether they can have someone else perform their duties of caring for the dog?
A Yes. They are instructed that this dog is their sole responsibility, and that it is no one else's responsibility in their family to walk this dog, feed this dog, or groom this dog" (Tr. at pp. 443, 444).
THE DEFENDANT'S CASE
Lieutenant BARRY GALFANO was in the TAPD Canine Unit from 1983 to 1987. He was a canine handler and trainer. He is presently the Commander of the Canine Unit. Lt. Galfano owned German Shepherds all of his life and has a fondness for dogs. He was advised that he would be responsible for transporting his dog in his car and, that he would not be compensated for such travel time and did not expect to be paid for such time.
Lt. Galfano retired his dog "Harry," adopted the dog and he is now a pet at his home. Lt. Galfano testified that the dog was a family pet even during his canine service. He enjoyed having his own dog and that it was not "inconvenient." During his service, Lt. Galfano overheard four or five "incidents" while transporting his dog. Also, during his journeys to and from work with his dog, he made stops for personal errands while the dog remained in the car. Further, he stated that his commuting time and distance was not increased by having his dog in the car. While he considered the dog to be a "tool" while involved in police activity, this was not true of the activities of the dog at home.
However, Lt. Galfano conceded that sometimes his dog became agitated while being transported and would bark. He further stated that his dog was a "tool" while on patrol. Further, if the need arose while transporting his dog, he would be a "working dog." He agreed that transporting "Harry" was an important duty.
FRANCES MILBERG formerly was the Deputy Director and General Counsel of the office of Labor Relations of the City of New York. She was a member of the negotiating team for contracts with City employees. Ms. Milberg is familiar with the collective bargaining agreements with the TAPD. She testified about the "generous overtime pay" for TA police officers for more than forty hours of work per week.
The collective bargaining agreements do not provide for overtime compensation for the travel time of the canine handler to and from work. Nor is there such provision in the New York City Police Department ("NYCPD") collective bargaining agreement. She was involved in negotiation between the NYCPD and TAPD Unions, the TA, the NYCPD and the Department of Labor. The City of New York took the position that the canine officers should not be compensated for travel time. "They felt it was a windfall, (and) unfair because the City was encouraging its police officers to live within the city limits." This was communicated to Henry Szablicki, an investigator in the Wage & Hour Division of the U.S. Department of Labor. When the collective bargaining agreements with the NYCPD and the TAPD, which did not provide for compensation for travel time were consummated, the Department of Labor apparently did not pursue the matter of travel pay with regard to the NYCPD, as they are now doing in regard to the TAPD.
However, Ms. Milberg received a letter from Thomas Kelly, District Director of the U.S. Department of Labor, and Szablicki's superior, dated November 8, 1990 (Plf's Exh. 63) which reads as follows:
"Dear Ms. Milberg:
This will confirm our telephone conversation on Wednesday, November 7, 1990 regarding the issue of home-to-work travel for police officers in the New York City Canine Unit.
As I explained, the position of the Department of Labor is that any time spent by a *178 police officer transporting a dog between the work site and home or home and the work site must be considered as hours worked, and compensated as required by the FLSA of 1938, as amended (29 U.S.C. Sec. 201, et seq.)."
WILLIAM McNAUGHTON was a canine handler for eight years. He likes dogs and that is why he applied for this duty. His wife and two sons have a good relationship with his dog "Sam." The children, fifteen years and four years of age play with Sam. McNaughton lives in Centereach in Suffolk County and enjoys the company of Sam on his trip to and from Brooklyn. The dog does not distract him on the trip and his commutation time is not increased. McNaughton feels no additional compensation for travel time is necessary; the home care compensation is sufficient.
However, on cross-examination, McNaughton testified that Sam was his "partner" and his "tool." In fact, he related that the "tool" concept is in the Canine Handler's Guide. On the trips to and from Centereach, on occasion Sam, who weighs 105 pounds, tried to bite the service station attendants, has vomited in the car and barks in the car "all the time" (Tr. at p. 478). He barks so much that McNaughton "can't hear the radio" (Tr. at p. 479). Also, during the trip Sam tries to get in the front seat "all the time" (Tr. at p. 479).
CHERYL CAPERS has been a canine handler for six years. She loves dogs and her canine "Wolf" is well behaved and her travel time with him is not burdensome or lengthened. On her commuting with Wolf, her attention is sometimes diverted and she is distracted by his barking but only for "a few seconds." However, she also reiterated what almost every other canine handler said, namely, that Wolf is "always a tool to me" and he is also "my partner." Ms. Capers also conceded that she rarely leaves Wolf unattended in her car and that he ripped up the back seat of her car and broke a panel.
ADDITIONAL FINDINGS
1. The dog handlers do consider their dogs to be a "tool" similar to their gun.
1. Despite the "tool" concept, the Court finds that these handlers like to work with dogs and generally treat the dogs as "pets" while the dogs are home. The Court finds that the dogs are considered both a "tool" and a "pet."
3. Transporting the dogs to and from the job creates definite problems to the handlers, such as the dogs barking, leaping into front seats, vomiting, inability to stop for personal business and causing damage to the rear seat area.
4. On their own time, in connection with the transportation of their dog, the canine handlers must clean the interior of their car; clean dog vomit and feces in the interior of their car; and repair damage done by the dog to the interior of their car.
5. Despite the problems involved in transporting the dogs, the handlers' commuting time is generally not substantially increased.
6. Reviewing all of the facts in this case, the Court finds that the usual transportation of the dogs to and from work by car is adversely affected by the presence of the dogs in that they do become sick or unruly, damage the cars and do restrict the personal activity of the handlers.
DISCUSSION
1. Statutory and Regulatory Overview.
The Fair Labor Standards Act of 1934 requires employers to compensate employees for all hours worked. 29 U.S.C. § 206. When an employee works for more than forty hours per week, they must be compensated at a rate one and a half times their wage rate. 29 U.S.C. § 207. An employer who fails to do so is subject to liability and punishment under the FLSA. 29 U.S.C. § 216.
In 1947, Congress amended the FLSA by enacting the Portal-to-Portal Act ("Act").[1] The primary purpose of the Act was to provide *179 relief to employers who were subject to increasing liabilities and labor costs on account of an ever-broadening judicial definition of what was considered compensable work under the FLSA. Steiner v. Mitchell, 350 U.S. 247, 253, 76 S.Ct. 330, 334, 100 L.Ed. 267 (1956). The Act provides that certain activities engaged in by an employee are not considered work, and, therefore, not compensable. These activities are described as:
"(1) walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform, and
(2) activities which are preliminary to or postliminary to said principal activity or activities,
which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities" 29 U.S.C. § 254(a).
The Act excludes from the scope of the above described non-compensable activities, any such activities made compensable by reason of a contract, practice or custom in effect at the work establishment. 29 U.S.C. § 254(b). Since in this case there is no contract, custom or practice in effect that covers the transportation of the canines by the dog handlers, this latter part of the statute is not in issue.
The only preliminary or postliminary activities that the statute expressly defines are "walking, riding, or traveling to and from the actual place of performance of the principal activity." 29 C.F.R. § 790.7(b). However, not all such "walking, riding, or traveling," is non-compensable. If an employee engages in an activity that is considered a "principal activity" while traveling, that time is compensable. This conclusion can be inferred from the language of the statute, and is made abundantly clear from the regulatory interpretation and legislative history of the statute. For example, the regulations promulgated pursuant to the statute state:
"[a]n employee who walks, rides or otherwise travels while performing active duties is not engaged in the activities described in section [254(a)]. An illustration of such travel would be the carrying by a logger of a portable power saw or other heavy equipment (as distinguished from ordinary handtools) on his trip into the woods to the cutting area. In such a situation, the walking, riding, or traveling is not segregable from the simultaneous performance of his assigned work (the carrying of the equipment, etc.) and it does not constitute travel "to and from the actual place of performance" of the principal activities he is employed to perform." 29 C.F.R. § 790.7(d) (emphasis added).
See also 29 C.F.R. § 790.7(d) n. 47 (citing the following comments of Senator Cooper, sponsor of the Senate bill and Conference Committee floor manager for the Senate: "We have clearly eliminated from compensation walking, traveling, riding, and other activities not an integral part of the employment for which the worker is employe[d]."); 29 C.F.R. § 790.7(h) (an activity which is preliminary or postliminary in one set of circumstances, may be a principal activity in other circumstances); 29 C.F.R. § 785.41 ("Any work which an employee is required to perform while traveling must, of course, be counted as hours worked.") (emphasis supplied).
Accordingly, if transportation of the canine by the dog handler from the home to the BAT, and the return trip, is considered a "principal activity," then such an activity is outside the ambit of the Act's exclusion of compensation for "walking, riding or traveling" to work, and is, instead, compensable.
2. Principal Activities.
The Portal-to-Portal Act does not define what constitutes a "principal activity," or a "preliminary or postliminary activity." Rather, because of the fact-specific nature of the activities potentially encompassed by the terms, the Act leaves it to the administrative agencies and the courts to define which work activities fall within the scope of either term. See e.g., S.Rep. No. 48, 80th Cong., 1st Sess. 47-48 (1947) (Section 254 "does not attempt to define what constitutes work.... This *180 section does not attempt to cover by specific language the many thousands of situations that do not readily fall within the pattern of ordinary workday."); 12 F.R. 7655, 7658 (Nov. 18, 1947) (a categorical list of "preliminary" or "postliminary" activities cannot be made, since such activities may in other circumstances be "principal activities.").
In Steiner v. Mitchell, supra, the United States Supreme Court considered whether the pre work and post work changing of clothes and showers by workers at a battery factory, who did so in order to protect themselves from potentially hazardous materials, were compensable under the FLSA. In allowing compensation, the court held that a principal activity "includes all activities that are integral and indispensable to the principal activity." Id. 350 U.S. at 256, 76 S.Ct. at 335; accord 29 C.F.R. § 790.8(b). Agreeing with the Court of Appeals, the Steiner court stated that activities which are integral and indispensable to the principal activity consist of the following elements:
"[they] are made necessary by the nature of the work performed;" that they fulfill "mutual obligations between the [employers] and their employees; that they "directly benefit" [the employers] in the operation of their business, and that they "are so closely related to other duties performed by [the] employees as to be an integral part thereof...." 350 U.S. at 252, 76 S.Ct. at 333 (quoting 215 F.2d 171, 172 (6th Cir.1954).
Accord Dunlop v. City Elec., Inc., 527 F.2d 394, 401 (5th Cir.1976) (test for determining whether an activity is a principal activity, or an integral and indispensable part of such an activity, is "whether the activities are performed as part of the regular work of the employees in the ordinary course of business," and are performed for benefit of employer).
The integral and indispensable activities may take place before or after an employee's work hours. Steiner, 350 U.S. at 256, 76 S.Ct. at 335. Moreover, such activities need not predominate over all the other activities in order to be considered principal activities. Dunlop, 527 F.2d at 400-01. The fact that the activities are performed voluntarily is not determinative of whether they are principal activities or not. See 29 C.F.R. § 785.11 (compensable work includes voluntary work).
In contrast to an integral and indispensable activity, preliminary or postliminary activities are such actions spent predominantly in the employees own interest, and are "undertaken for the [employees] own convenience, not being required by the employer and not being necessary for the performance of their duties." Dunlop, 527 F.2d at 398.
The plaintiff Secretary in this case argues that transporting the canines to and from work is a compensable activity under the FLSA. The basis of his argument is that the activity is integral and indispensable to the primary activity of handling canines. By way of analogy, the Secretary asserts that the dog handler's situation is similar to that of a worker transporting a vital tool to the work site. See, e.g., Crenshaw v. Quarles Drilling Corp., 798 F.2d 1345 (10th Cir.1986); 29 C.F.R. § 790.7(d).
The defendant disagrees, and argues that transporting the canines in the officers' private vehicles falls squarely within the exclusion to compensation provided by the express terms of "riding or traveling" in section 254(a). According to the defendant, the handlers do nothing more in their commute than "assume responsibility for the dogs seated in the back seats of their cars." (Defendant's Post-Trial Memorandum of Law, at p. 2). Moreover, the defendant contends that the cases relied on by the plaintiff in support of compensating travel time are inapposite, because the cases deal with travel from a central work location to a job site, and not from the home to the job site.
3. Transportation of the Canines is Compensable Work Under the FLSA.
To date, apparently only one court has analyzed and squarely addressed the issues raised here, and that court decided that transporting the canines to work is a compensable activity under the FLSA. See Graham v. City of Chicago, 828 F.Supp. 576 (N.D.Ill.1993). Moreover, while not analyzing *181 the issue of transporting the canines to and from work, two other courts have similarly determined that the off-duty home care a dog handler renders to the canine is integral and indispensable to the primary activity of being a dog handler, and, thus, outside the ambit of section 254(a)'s exclusion from compensation. See Truslow v. Spotsylvania County Sheriff, 783 F.Supp. 274 (E.D.Va. 1992), aff'd 993 F.2d 1539 (4th Cir.1993) and Nichols v. City of Chicago, 789 F.Supp. 1438 (N.D.Ill.1992).
In Graham the plaintiffsCity of Chicago police dog-handlerssought to be compensated under the FLSA for transporting the canines to and from work. After reviewing the statutory and regulatory background of the Portal-to-Portal Act, and the criteria enunciated in Steiner and Dunlop to determine whether an activity is integral and indispensable to a primary activity, the Graham court rejected the defendants' argument that transportation of the canines fell within the exclusion of section 254(a). Rather, the Graham court concluded that transporting the canines was a primary activity that was compensable under the FLSA:
"[T]ime spent transporting police canines is more than merely `riding to work'.... Rather, it is an integral and indispensable part of the officers' principal duties as canine police officers and thus not excluded from coverage. Certainly, the officers need to get themselves to work every day. However, when transporting the canines, they are performing an indispensable part of their principal activities that is required by their employer and which inures to the employer's benefit.
As in Dunlop, these activities are `within the range of principal activities covered by the act and [are] performed at the behest and for the benefit of the employer.' Certainly, if the City provided a central kennel for the dogs, the time spent picking up the dogs at the kennel and transporting them to work would be compensable even though it would be `riding' to work. The City may not escape liability by requiring the officers to board the dogs at home." Graham, 828 F.Supp. at 582 (emphasis added, quoting Dunlop, supra.).
Significantly, the Graham court determined that transporting the canines was neither a preliminary nor a postliminary activity, because transportation of the dogs occurred after the officers began their principal activity in the morning of feeding and preparing the dogs for the day's work, and before the end of the principal activity at night upon returning home. Id. at 582.
Although not dealing with the issue of whether transporting the canines is a compensable activity under the FLSA, the court in Nichols v. City of Chicago, supra, succinctly reviewed the issue of compensating dog handlers for the off-duty care of the canines. There, the court found that the off-duty dog care activities of the plaintiff officers were integral and indispensable to the principal activity, because such activities were necessary, required, of benefit to the employers, and identical to the activities and care given the canines while on duty.
"First, plaintiffs' off duty home dog-care activities are necessary to the plaintiffs' principal activities of canine patrol. It is not disputed that in order for the canine patrol officer to properly perform his or her principal activity of canine patrol, the canine portion of the work team must be in proper working order.... Second, the plaintiffs perform their off-duty dog-care activities at the behest and for the benefit of the City.... Moreover, the plaintiffs efforts at keeping the police dogs well-fed and free of disability are clearly for the benefit of the City, which owns the police dogs. Last, and perhaps most significant, the City compensates the plaintiffs for dog-care activities performed by the plaintiffs while on duty. The dog care activities are identical no matter when or where performed." Nichols, 789 F.Supp. at p. 1442 (emphasis added). Accord Truslow, 783 F.Supp. at p. 279.
This Court agrees with the reasoning of the Graham court, and finds that transporting the canines is also compensable under the FLSA, because that activity is not segregable from the primary activity the officers are engaged in. See 29 C.F.R. § 790.7(d). All of the criteria established under Steiner and Dunlop defining "integral and indispensable" *182 have been met in this case, and the facts support a determination that transporting the dogs is an integral and indispensable activity to the officers' primary activity, and a direct, substantial benefit to the handlers' employer.
First, transporting the dogs to work in the officers private vehicles is required by the defendant employer. Indeed, the dog handlers are prohibited from using mass transit to transport the dog, or to car pool. Second, transporting the dogs is necessary to the primary activity engaged in by the dog-handlers. Transporting the dogs facilitates the close bond between the officer and dog that is necessary for the successful working relationship between the two. Moreover, while transporting the dog the officer is engaged in reinforcing this "bonding" process, and is attentive to the needs of the dog. Beyond keeping the vehicle clean, the officer must maintain proper eye contact with the canine during stops, and control of the dog's agitation level. (Tr. 217, 239 and 282).
Third, transporting the dogs directly benefits the defendant employer. Requiring that the dogs be transported directly to and from the BAT in the officers' private vehicles, with all of the attendant circumstances involving bonding with the dog, facilitates the working relationship of the dog and handler, avoids centralized kenneling in the City at the TA's expense, and inures to the direct benefit of the TA. Finally, the off-duty transportation of the dogs is not fundamentally different from their on-duty transportation. The tasks performed by the officers while transporting the dogs on-duty are closely related, if not identical, to the tasks performed in transporting the dogs while off-duty. The similarity of on and off-duty dog care by dog handlers led the Nichols and Truslow courts to conclude that off-duty care of the dogs at home was compensable under the FLSA. The same reasoning applies to transportation of the dogs, and, therefore, the off-duty transportation activity should be compensated similar to the compensable on-duty transportation.
The defendant's argument that the Court in Truslow determined that transportation of the canines was not compensable under the FLSA, is without merit. In dicta, Truslow only referred to the issue in a footnote, see Truslow, 783 F.Supp. at 277 n. 5, 279, and did not undertake any analysis of the issue under the statute and regulations as this Court and the court in Graham has done. The Court, therefore, finds that Truslow is not dispositive of the issue presently before this Court. Accord Graham, 828 F.Supp. at 579.
Finally, the Court notes that the conclusion it has reached is supported by the policies and purposes underlying the Portal-to-Portal Act. The primary evil that section 254(a) was directed at alleviating was compensating workers for the time they spent traveling before and after the work whistle, such as riding to and from work or walking to their work bench after entering the factory gate. Congress recognized that compensating such time under the FLSA potentially subjected employers and the economy to billions of dollars in compensation claims, and threatened the then war effort. See 29 U.S.C. § 251(a) (Congressional findings of Portal-to-Portal Act); S.Rep. No. 48, supra, §§ 2-3, pages 5-41). Thus, for example, the Act sought to prevent, unless otherwise required by a written contract or custom in effect at the workplace, compensation to underground miners for the time spent traveling between the portal of the mine and the working face at the beginning and end of each workday, or compensation to factory workers for walking and riding between the plant gate and the actual place of performance of their work. See 29 C.F.R. §§ 790.5(b) and 790.7(e); S.Rep. No. 48, at 47.
However, as described above, the Act's language does not portend to cover every possible situation. The congressional sponsors of the Act realized that activities may be preliminary or postliminary in one situation, and principal activities in another. See 29 C.F.R. § 790.7(h) n. 50 (citing S.Rep. No. 48). For that reason, walking, riding or transporting that is integral to the job is not considered a preliminary or postliminary activity. See 29 C.F.R. § 790.7(d) n. 47.
In light of these policies, the instant case is not a quintessential portal-to-portal case involving compensation for time spent traveling *183 from the factory gate to the job site. The "work whistle" for the dog handlers starts earlier in the day, when the dog handlers prepare the dogs for their days work, and ends later at night, after feeding and exercising the dogs. Rather then merely riding to work, transporting the dogs is part and parcel of that is, not segregable from the work activity for the dog handlers, and is integral and indispensable to their daily principal activity. Such transportation is far removed from the type of riding or transporting Congress had in mind when it enacted section 254(a).
CONCLUSIONS
The Court finds that the plaintiff Secretary has sustained his burden of proving that the daily transportation of the canines to and from the Brooklyn Army Terminal and their homes by the dog handlers is a principal activity within the meaning of 29 U.S.C. § 254(a), because it is integral and indispensable to the principal activity of the dog handlers. Such transportation is required of the dog handler by the defendant employer, is necessary to the proper functioning of the dog handlers' principal activity, is for the direct benefit of the defendant employer, and is compensable when performed on-duty.
Accordingly, judgment is granted in favor of the plaintiff to the following extent. The defendant New York City Transit Authority is prospectively permanently enjoined from violating the overtime and recordkeeping provisions of the Fair Labor Standards Act with respect to the transportation of canines by the TAPD dog handlers to and from their home and the BAT. Further, the TA is restrained from withholding the unpaid withheld overtime compensation.
In addition, the defendant TA is liable for unpaid overtime compensation owing to its employees with regard to the travel time of the TAPD dog handlers from October 15, 1990 to the present time.
As to the status of this case, and to determine whether any further proceedings are required, the parties are directed to appear at the United States Courthouse, 2 Uniondale Avenue, Uniondale, New York, Courtroom A, on December 22, 1993 at 9:00 o'clock a.m.
SO ORDERED.
NOTES
[1] Pub.L. No. 49, 80th Cong., 1st Sess (May 14, 1947), 61 Stat. 84 (codified as amended at 29 U.S.C. §§ 251-262).
|
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03/09/2020
IN THE SUPREME COURT OF THE STATE OF MONTANA Case Number: DA 19-0653
No. DA 19-0653
IN THE MATTER OF:
P.K.,
Respondent and Appellant.
ORDER
Upon consideration of Appellant’s motion for extension of time,
and good cause appearing,
IT IS HEREBY ORDERED that Appellant is granted an extension
of time to and including April 15, 2020, within which to prepare, file,
and serve Appellant’s opening brief on appeal.
Electronically signed by:
Mike McGrath
Chief Justice, Montana Supreme Court
March 9 2020
|
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|
Case: 16-11145 Date Filed: 01/18/2017 Page: 1 of 10
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-11145
Non-Argument Calendar
________________________
D.C. Docket No. 2:02-cr-00191-LSC-JHE-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
LARON DIMITRIC PLAYER,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
________________________
(January 18, 2017)
Before TJOFLAT, HULL and WILSON, Circuit Judges.
PER CURIAM:
Loran Player appeals his 24-month sentence following the revocation of his
supervised release pursuant to 18 U.S.C. § 3583(e)(3). On appeal, Player argues
Case: 16-11145 Date Filed: 01/18/2017 Page: 2 of 10
that the district court erred in finding by a preponderance of the evidence that he
knew or had reasonable grounds to know the vehicle he drove was stolen. Player
also argues that the district court abused its discretion in imposing a 24-month
sentence. The district court did not err in determining that Player knew or had
reasonable grounds to believe he operated a stolen vehicle. Additionally, the
district court imposed a sentence that was supported by the record and that satisfies
the requirements of 18 U.S.C. § 3353(a). Accordingly, Player’s sentence was
reasonable.
I.
First, Player argues that the district court erred in finding by a preponderance
of the evidence that he knew or had reasonable ground to know the vehicle he had
drove was stolen. Alabama Criminal Code 13A-8-7 states that “[t]he theft of lost
property which exceeds two thousand five hundred dollars ($2,500) in value
constitutes theft of lost property in the first degree,” and that “[t]heft of lost
property in the first degree is a Class B felony.” “Under an indictment for
receiving stolen property, the prosecution must prove that the accused actually
knew that the property was stolen or that he had reasonable grounds to believe that
it was stolen.” Ashurst v. State, 462 So. 2d 999, 1004 (Ala. Crim. App. 1984). In
revocation hearings, a district court must only find that the defendant violated a
condition of supervised release by a preponderance of the evidence. 18 U.S.C.
2
Case: 16-11145 Date Filed: 01/18/2017 Page: 3 of 10
§ 3583(e)(3). We afford great deference to a district court’s credibility
determinations. United States v. Gregg, 179 F.3d 1312, 1316 (11th Cir. 1999).
We review a district court’s finding of a violation of a term of supervised release
for an abuse of discretion. United States v. Copeland, 20 F.3d 412, 413 (11th Cir.
1994) (per curiam).
The district court did not err in determining that Player knew or had
reasonable grounds to believe that the vehicle he drove was stolen. The record
reflects that a number of items of Player’s were found in the vehicle, indicating
that the car was in Player’s possession for some time. Player and his wife were
unable to provide basic information regarding the individual from whom they
claimed to have borrowed the car, including his address, occupation, and his last
name. We give the credibility determinations of the district court great weight.
Gregg, 179 F.3d 1316. Particularly given the lower standard of proof required at
revocation hearings, see § 3583(e)(3), we find that the district court did not abuse
its discretion in determining that Player knew or had reasonable grounds to believe
that the car he was driving was stolen. See Copeland, 20 F.3d at 413.
II.
Second, Player argues that the district court abused its discretion in imposing
a 24-month sentence. We generally review the reasonableness of a sentence under
the deferential abuse of discretion standard of review. Gall v. United States, 552
3
Case: 16-11145 Date Filed: 01/18/2017 Page: 4 of 10
U.S. 38, 51 (2007). We first ensure that the district court did not improperly
calculate the guidelines range, treat the guidelines range as mandatory, fail to
consider the § 3553(a) factors, select a sentence based on clearly erroneous facts,
inadequately explain the chosen sentence, or commit any other significant
procedural error. Id. We then examine if, in light of the totality of the
circumstances, the sentence imposed was substantively reasonable. Id. The party
challenging the sentence bears the burden of showing the unreasonableness of the
sentence in light of the record and the § 3553(a) factors. United States v. Tome,
611 F.3d 1371, 1378 (11th Cir. 2010).
Upon determining that a defendant violated a condition of supervised
release, the district court may revoke the term of supervision and impose a term of
imprisonment after considering: (1) the nature and circumstances of the offense
and the history and characteristics of the defendant; (2) the need for the sentence
imposed to afford adequate deterrence, protect the public, and effectively provide
the defendant with needed training, medical care, or other correctional treatment;
(3) relevant policy statements by the Sentencing Commission; (4) the need to avoid
unwarranted sentence disparities; and (5) the need to provide restitution. See 18
U.S.C. §§ 3583(e), 3553(a); see also United States v. Campbell, 473 F.3d 1345,
1348 (11th Cir. 2007) (per curiam). A district court need not state explicitly that it
considered the § 3553(a) factors if the record indicates that the court indeed
4
Case: 16-11145 Date Filed: 01/18/2017 Page: 5 of 10
considered the factors. United States v. Dorman, 488 F.3d 936, 944 (11th Cir.
2007).
We ordinarily expect a sentence falling within the guideline range is
reasonable. United States v. Hunt, 526 F.3d 739, 746 (11th Cir. 2008). A sentence
well below the statutory maximum may be considered another indicator of
reasonableness. United States v. Gonzalez, 550 F.3d 1319, 1324 (11th Cir. 2008).
However, we may not assume that a sentence outside the guidelines is necessarily
unreasonable. United States v. Irey, 612 F.3d 1160, 1187 (11th Cir. 2010) (en
banc). All sentences, whether inside, outside or significantly outside the
Guidelines range, are reviewed for an abuse of discretion. Gall, 552 U.S. at 51.
Nevertheless, significant variations from the Sentencing Guidelines require the
district court to identify significant justifications. Irey, 612 F.3d at 1186–1187.
If an error is not timely objected to, we usually review for plain error.
United States v. Turner, 474 F.3d 1265, 1275 (11th Cir. 2007). However, after
imposing a sentence, a district court must give both parties an opportunity to object
to its ultimate findings of fact, conclusions of law, and the manner in which the
sentence was pronounced. United States v. Jones, 899 F.2d 1097, 1102 (11th Cir.
1990) overruled in part on other grounds by United States v. Morrill, 984 F.2d
1136, 1137 (11th Cir. 1993) (en banc). Failure to elicit objections after imposition
of a sentence usually results in vacating and remanding a sentence to allow the
5
Case: 16-11145 Date Filed: 01/18/2017 Page: 6 of 10
parties an opportunity to present their objections. Id. at 1103. Merely inquiring
whether there is “anything further?” or “anything else” is insufficient. Campbell,
473 F.3d at 1348. If the record on appeal is sufficient to enable review, remand
may be unnecessary. Id. at 1347. When imposing a sentence for the violation of a
condition of supervised release, there must be some indication that the district
court considered the sentencing range established by the guidelines. Id. at 1348–
49. The Jones rule applies to supervised release revocation proceedings. Id. at
1348. If a Jones violation is found but the record is sufficient to enable review, we
review the legality of the sentence imposed de novo. Id.
The district court did not abuse its discretion by imposing a 24-month
sentence. Player’s argument that the district court was required to renew its offer
of a 14-month sentence is contradicted by the record, which demonstrates that
Player, through counsel, indicated his agreement to having a hearing regarding the
stolen property charge. Player agreed after the district court plainly explained that
holding a new hearing would render the offer of a 14-month sentence with 3 years’
supervised release unavailable. Compare United States v. Jernigan, 341 F.3d
1273, 1290 (11th Cir. 2003) (holding that an affirmative stipulation may invite
error in the case of the admission of evidence). Player offers no meaningful
support for his argument that he should have been provided a later opportunity to
accept the district court’s offer of a 14-month sentence, even given his explicit
6
Case: 16-11145 Date Filed: 01/18/2017 Page: 7 of 10
agreement to a new hearing on the stolen property charge. Additionally, an
independent review of the caselaw discloses none. See Mabry v. Johnson, 467
U.S. 504, 511 (1984) overruled on separate grounds by Puckett v. United States,
556 U.S. 129, 138 (U.S. 2009) (holding that a defendant’s acceptance of a
prosecutor’s proposed plea agreement does not create a constitutional right to have
that bargain enforced). Since the party challenging the reasonableness of a
sentence bears the burden of proof, Player’s claim fails. Tome, 611 F.3d at 1378.
Player next argues that the district court’s refusal to impose a 14-month
sentence as opposed to a 24-month sentence was substantively unreasonable. As
Player did not object to the substantive reasonableness of his sentence at the
revocation hearing, we would usually review for plain error. Turner, 474 F.3d at
1275. However, under our ruling in United States v. Jones, the district court was
required to give both parties an opportunity to object to its ultimate findings of
fact, conclusions of law, and the manner in which the sentence was pronounced.
899 F.2d at 1102. The record reflects that the district court did not do so in this
case. The district court did ask if there was “[any]thing that I have missed.”
However, as previously stated, our case law makes clear that such limited inquiries
are insufficient. See Campbell, 473 F.3d at 1348. Such an omission normally
requires vacating and remanding the sentence, see Jones, 899 F.2d at 1103, unless
the record on appeal is sufficient to enable review, Campbell, 473 F.3d at 1347.
7
Case: 16-11145 Date Filed: 01/18/2017 Page: 8 of 10
Upon careful review, we hold that the record here is sufficient to not require
vacating and remanding the case. Campbell, 473 F.3d at 1347. In determining
whether the record is sufficient to enable review, one factor we consider is whether
the district court considered the applicable guidelines range. Id. at 1348–49 (“[I]t
is sufficient for there to be some indication that the district court was aware of and
considered the Guidelines, which requires the court to consider the sentencing
range established.”) (quotations and citation omitted). At the first revocation
hearing, the district court specifically articulated the applicable guidelines range
and statutory maximum. The district court did not recalculate the guidelines range
at the second revocation hearing following its finding that Player was guilty of the
stolen property charge. But, the new range and statutory maximum were provided
by the government. Ultimately, the district court sentenced Player in the middle of
the new guidelines range. The record reflects that district court was sufficiently
aware of and considered the applicable guidelines range. Compare Campbell, 473
F.3d at 1348–49.
In addition to the applicable guidelines range, the record also reflects that the
district court considered other relevant § 3553(a) factors. Specifically, court
considered “the nature and circumstances of the offense and the history and
characteristics of the defendant” pursuant to § 3553(a)(1). At the first revocation
hearing, the court noted that Player had “one of the worst records [he had] ever
8
Case: 16-11145 Date Filed: 01/18/2017 Page: 9 of 10
seen.” The district court also noted Player’s failure to respond to several
rehabilitative programs in which he participated. Although the district court did
not mention § 3553(a) specifically, it was not required to so long as the record
reflects that the court did indeed consider the other § 3553(a) factors. United
States v. Dorman, 488 F.3d 936, 944 (11th Cir. 2007). Finally, the record reflects
that the district court heard argument from Player regarding sentencing at the first
revocation hearing. While player did not re-make his sentencing arguments
following the court’s determination that he was guilty of the stolen property
charge, he had the opportunity to do so. These acts create a record sufficient to
avoid the need to vacate and remand. We therefore proceed to review the
reasonableness of Player’s sentence de novo. Id. at 1348.
Player failed to articulate the way in which the court’s refusal to re-extend a
sentencing offer rendered the imposition of a later sentence, based upon a new
charge, is plain error. As explained above, the district court correctly determined
by a preponderance of the evidence that Player knew or had reasonable grounds to
know that the vehicle he drove was stolen. With the addition of the Receiving
Stolen Property charge, the applicable guidelines range increased to 21–27 months.
Player admitted to the initial three offenses for which his supervised release was
revoked and the district court found him guilty of the fourth. While Player did
offer uncontradicted testimony indicating that he used the vehicle to take his wife
9
Case: 16-11145 Date Filed: 01/18/2017 Page: 10 of 10
to a doctor’s appointment, the district court also stated that he had “one of the
worst records I have ever seen.” The sentence imposed also fell squarely within
the applicable guidelines range and well below the statutory maximum, two factors
that we ordinarily consider to be indicators of reasonableness. Hunt, 526 F.3d at
746; Gonzalez, 550 F.3d at 1324. On this record, the district court did not err in
imposing a 24-month sentence.
AFFIRMED.
10
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38 So.3d 778 (2010)
MORRIS
v.
STATE.
No. 2D10-1934.
District Court of Appeal of Florida, Second District.
May 18, 2010.
Decision Without Published Opinion Prohibition denied.
|
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|
996 F.2d 1346
36 ERC 2054, 62 USLW 2064, 23 Envtl.L. Rep. 21,282,Prod.Liab.Rep. (CCH) P 13,646
Ernest L. KING, Sr., et al., Plaintiffs, Appellants,v.E.I. DUPONT DE NEMOURS AND COMPANY, et al., Defendants, Appellees.
No. 92-2381.
United States Court of Appeals,First Circuit.
Heard April 8, 1993.Decided July 7, 1993.
James F. Freeley, III with whom James F. Freeley, Jr. and Freeley & Freeley, Boston, MA, were on brief, for plaintiffs, appellants.
George S. Isaacson with whom Peter D. Lowe, Brann & Isaacson, Lewiston, ME, Charles A. Harvey, Jr., Christopher D. Byrne, Verrill & Dana, Peter J. Rubin, Diane S. Lukac, and Bernstein, Shur, Sawyer & Nelson, Portland, ME, were on brief, for defendants, appellees.
Before BREYER, Chief Judge, FRIEDMAN,* Senior Circuit Judge, and STAHL, Circuit Judge.
FRIEDMAN, Senior Circuit Judge.
1
The issue in this case, on appeal from the United States District Court for the District of Maine, 806 F.Supp. 1030 (D.Me.1992), is whether the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. §§ 136-136y (1988), preempts state tort law claims based upon the alleged failure of the manufacturers of herbicides to provide adequate warning language on the products' labels, which the Environmental Protection Agency (EPA) approved in accordance with FIFRA's requirements. The district court held that FIFRA preempts those state law claims. We affirm.
2
* The plaintiffs, King and Higgins (and their wives) filed this diversity tort damage suit against four manufacturers of chemical herbicides. Their second amended complaint alleged that, as part of their duties as employees of the State of Maine, King and Higgins were engaged in the "seasonal spraying of chemical herbicides"; that "[d]uring the chemical spraying operations [they] performed," King and Higgins "were exposed to significant amounts" of specified "chemical products" manufactured by the defendants; and that, "as the direct result of their exposure to the herbicides," King and Higgins have suffered various ailments.
3
The complaint contained two counts. Count I charged the defendants with negligence because they "failed to warn the Plaintiffs ... of the harm and danger of exposure to the chemical products listed above, failed to advise them how to safely use the products and failed to warn them of the long term, permanent physical injuries which would follow said exposure." Count II alleged strict liability and tort theories, based upon the defendants having "placed into the stream of commerce unreasonably dangerous and defective chemical products, rendered unreasonably dangerous by the absence of an adequate warning to the ultimate consumers and users thereof of the short term and long term permanent physical injuries resulting from exposure thereto." At oral argument, the plaintiffs admitted that the sole basis of their complaint was the defendants' failure to provide adequate warnings.
4
The parties stipulated that the labels on all the herbicides involved had been submitted to and approved by the EPA, as FIFRA required.
5
The district court granted the defendants' motion for summary judgment, holding that FIFRA preempted the plaintiffs' claims. 806 F.Supp. at 1037. The court, following the preemption standards the Supreme Court applied in Cipollone v. Liggett Group, Inc., --- U.S. ----, ----, 112 S.Ct. 2608, 2617, 120 L.Ed.2d 407 (1992), held:
6
Because the language of FIFRA mandates the preemption of the establishment or enforcement or any common law duty that would impose a labeling requirement inconsistent with those established by the Act, or the EPA's regulations, Plaintiffs' common law failure to warn claims are preempted as a matter of law.
7
806 F.Supp. at 1037.
II
8
A. FIFRA provides a detailed scheme for regulating the content of an herbicide's label. All herbicides sold in the United States must be registered for use by the EPA. 7 U.S.C. § 136a(a). The EPA has promulgated comprehensive labeling requirements governing the scope, content, wording and format of herbicide labeling. 40 C.F.R. § 156 (1992). The manufacturer itself designs and formulates the content of the label, and must file with the EPA a statement which includes "the name of the pesticide," "a complete copy of the labeling of the pesticide, a statement of all claims to be made for it and any directions for its use," and "a full description of the tests made and the results thereof upon which the claims are based." 7 U.S.C. § 136a(c)(1)(B)-(D).
Section 136v provides in pertinent part:
9
(a) In general. A State may regulate the sale or use of any federally registered pesticide or device in the State, but only if and to the extent the regulation does not permit any sale or use prohibited by this subchapter.
10
(b) Uniformity. Such State shall not impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under this subchapter.
11
Id. § 136v.
12
B. Cipollone recently summarized the standards governing preemption analysis:
13
The purpose of Congress is the ultimate touchstone of preemption analysis.
14
Congress' intent may be explicitly stated in the statute's language or implicitly contained in its structure and purpose. In the absence of an express congressional command, state law is pre-empted if that law actually conflicts with federal law, or if federal law so thoroughly occupies a legislative field as to make reasonable the inference that Congress left no room for the States to supplement it.
15
Cipollone, --- U.S. at ----, 112 S.Ct. at 2617 (citations and internal quotations omitted).
16
Cipollone involved similar preemption provisions of the federal statutes governing cigarette labelling and advertising. The suit concerned a woman who died of lung cancer after smoking for many years. It was a state tort law diversity suit against the cigarette manufacturers, charging them with responsibility for her death because, among other things, "they failed to warn consumers about the hazards of smoking." Id. at ----, 112 S.Ct. at 2613. The defendants contended that the Federal Cigarette Labelling and Advertising Act (1965 Act), Pub.L. No. 89-92, 79 Stat. 282 (1965) (codified as amended at 15 U.S.C. §§ 1331-1340 (1988)), and its successor, the Public Health Cigarette Smoking Act of 1969 (1969 Act), Pub.L. No. 91-222, 84 Stat. 87 (1969) (codified as amended at 15 U.S.C. §§ 1331-1340), preempted the claims. Those Acts required health warnings on cigarette packaging, but barred the requirement of such warnings in cigarette advertising.
17
Section 5 of the 1965 Act, captioned "Preemption," provided in relevant part:
18
(b) No statement relating to smoking and health shall be required in the advertising of any cigarettes the packages of which are labeled in conformity with the provisions of this Act.
19
Federal Cigarette Labelling and Advertising Act, quoted in Cipollone, --- U.S. at ----, 112 S.Ct. at 2616.
20
The Court held that this provision "only pre-empted state and federal rulemaking bodies from mandating particular cautionary statements and did not pre-empt state law damages actions." Cipollone, --- U.S. at ----, 112 S.Ct. at 2619 (footnote omitted).
21
This provision was changed by the 1969 Act to read:
22
(b) No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this Act.
23
Public Health Cigarette Smoking Act of 1969, quoted in Cipollone, --- U.S. at ----, 112 S.Ct. at 2616. See also 15 U.S.C. § 1334(b) (1988).
24
The Court held that this provision preempted the plaintiff's state law tort claims based on the defendants' failure to warn of the hazards of cigarette smoking. The Court stated that "[t]he phrase '[n]o requirement or prohibition' sweeps broadly and suggests no distinction between positive enactments and common law; to the contrary, those words easily encompass obligations that take the form of common law rules." Cipollone, --- U.S. at ----, 112 S.Ct. at 2620. It, therefore, "reject[ed] petitioner's argument that the phrase 'requirement or prohibition' limits the 1969 Act's pre-emptive scope to positive enactments by legislatures and agencies." Id. The Court held that "insofar as claims under either failure to warn theory require a showing that respondents' post-1969 advertising or promotions should have included additional, or more clearly stated, warnings, those claims are pre-empted. The Act does not, however, pre-empt petitioner's claims that rely solely on respondents' testing or research practices or other actions unrelated to advertising or promotion." Id. at ---- - ----, 112 S.Ct. at 2621-22.
25
Only four Justices joined in the portion of the opinion that held that the 1969 Act preempted the failure to warn tort claims. In his opinion concurring in the judgment in part and dissenting in part (in which Justice Thomas joined), however, Justice Scalia stated that he "agree[d]" with the following statements in the plurality opinion: "that 'the language of the [1969] Act plainly reaches beyond [positive] enactments,'; that the general tort-law duties petitioner invokes against the cigarette companies can, as a general matter, impose 'requirement[s] or prohibition[s]' within the meaning of § 5(b) of the 1969 Act; and that the phrase 'State law' as used in that provision embraces state common law." Id. at ----, 112 S.Ct. at 2634 (citations omitted). Justice Scalia also referred to the plurality opinion's "correct disposition of petitioner's post-1969 failure to warn claims." Id. at ----, 112 S.Ct. at 2637. Justice Scalia's partial disagreement with the plurality was that he would have held that the failure to warn claims under the 1965 Act and all of the claims under the 1969 Act were preempted. Id. at ----, 112 S.Ct. at 2632.
26
In these circumstances, the holding in the plurality opinion that the 1969 Act preempted the plaintiff's failure-to-warn claim fairly can be said to constitute the view of the Court because six members of the Court concurred in that conclusion. See Shaw v. Dow Brands, Inc., 994 F.2d 364, 370 n. 4 (7th Cir.1993).
27
The Supreme Court itself has indicated that Cipollone applies to FIFRA preemption determinations. In the Papas v. Upjohn Co. and Arkansas-Platte cases discussed below, the Court vacated two courts of appeals judgments that FIFRA impliedly preempted state law failure-to-warn claims and remanded for those courts to reconsider their decisions in light of Cipollone.
28
B. We hold that, in light of Cipollone, FIFRA preempts the plaintiffs' state law tort claims based on the defendants' alleged failure to provide adequate warnings about the health hazards of the herbicides they manufactured and sold.
29
The warnings on the labels of the herbicides King and Higgins used in spraying were approved by the EPA, as FIFRA required. If the plaintiffs could recover on their state law claims that, despite this labeling, the defendants had failed to provide adequate warning, those additional warnings necessarily would be "in addition to or different from those required under this subchapter." 7 U.S.C. § 136v(b). The question, therefore, is whether state law liability based upon such defective warning would constitute the "impos[ition]" by the state of "any requirements for labeling or packaging" under section 136v(b). Id.
30
Cipollone held that the words in the 1969 cigarette statute " '[n]o requirement or prohibition' ... easily encompass[ed] obligations that take the form of common law rules." Cipollone, --- U.S. at ----, 112 S.Ct. at 2620. The FIFRA language prohibiting the states from "impos[ing] or continu[ing] in effect any requirements," 7 U.S.C. § 136v(b), is virtually indistinguishable from the state-imposed "requirement" language that Cipollone held preempted the state common law tort claims based on inadequate warning. FIFRA's language, too, preempts the state law lack-of-warning claims involved in this case.
31
The plaintiffs contend that the reference in section 136v(b) to "Such State" means the state described in subsection (a), namely, a state that has "regulate[d] the sale or use of any federally registered pesticide." From this, they conclude that the prescription provision of subsection (b) covers only state regulation, but not state common law claims. Subsection (a), however, is a grant of authority to the states to regulate the "sale or use" of pesticides, not a limitation upon the preemptive effect of subsection (b). The word "Such" in subsection (b) does not limit to state regulation the state "requirements for labeling or packaging" which that section preempts.
32
The legislative history of the 1972 amendments to FIFRA, which added section 136v to the statute, supports our conclusion. The Senate Committee Report on the provision stated that section 136v(b) "preempts any State or local government labeling or packaging requirements differing from such requirements under the Act." S.Rep. No. 92-970, 92d Cong., 2d Sess. (1972), reprinted in 1972 U.S.C.C.A.N. 3993, 4092, 4128. See also S.Rep. No. 92-838, 92d Cong., 2d Sess. 30 (1972), reprinted in 1972 U.S.C.C.A.N. 3993, 4021 (the provision "preempts any State labeling or packaging requirements differing from such requirements under the Act"). The House Committee Report stated: "[i]n dividing the responsibility between the States and the Federal Government for the management of an effective pesticide program, the Committee has adopted language which is intended to completely preempt State authority in regard to labeling and packaging." H.R.Rep. No. 92-511, 92d Cong., 2nd Sess. 16 (1971), U.S.Code Cong. & Admin.News 1972, p. 3993.
33
Our conclusion accords with the decisions of the three courts of appeals that, since Cipollone, have decided the question.
34
In Papas v. Upjohn Co., 926 F.2d 1019 (11th Cir.1991), the court held that FIFRA impliedly preempted state common law claims based upon inadequate labeling. On petition for certiorari, the Supreme Court vacated the court of appeals' judgment and remanded the case for further consideration in light of Cipollone. Papas v. Zoecon Corp., --- U.S. ----, 112 S.Ct. 3020, 120 L.Ed.2d 892 (1992). On remand the court of appeals concluded that "FIFRA expressly preempts state common law actions against manufacturers of EPA-registered pesticides to the extent that such actions are predicated on claims of inadequate labeling or packaging." Papas v. Upjohn Co., 985 F.2d 516, 520 (11th Cir.1993). The court stated:
35
Section 136v(b) pre-empts those of the Papases' state law claims which constitute "requirements for labeling or packaging in addition to or different from" the labelling and packaging requirements imposed under FIFRA. Cipollone convinces us that the term "requirements" in section 136v(b) "sweeps broadly and suggests no distinction between positive enactments and the common law." Cipollone [--- U.S.], at ----, 112 S.Ct. at 2620. Common law damages awards are one form of state regulation and, as such, are "requirements" within the meaning of section 136v. To the extent that state law actions for damages depend upon a showing that a pesticide manufacturer's "labeling or packaging" failed to meet a standard "in addition to or different from" FIFRA requirements, section 136v preempts the claims.
36
Id. at 518 (citation omitted).
37
In Arkansas-Platte & Gulf Partnership v. Van Waters & Rogers, Inc., 959 F.2d 158 (10th Cir.1992), the court also held that "state tort actions based on labeling and alleged failure to warn are impliedly preempted by FIFRA as a matter of law." Id. at 164. On petition for certiorari the Supreme Court vacated the judgment of the court of appeals and remanded for that court to reconsider the case in light of Cipollone. Arkansas-Platte & Gulf Partnership v. Dow Chemical Co., --- U.S. ----, 113 S.Ct. 314, 121 L.Ed.2d 235 (1992). On remand the court "ADHERE[D] to the opinion previously announced." Arkansas-Platte & Gulf Partnership v. Van Waters & Rogers, Inc., 981 F.2d 1177, 1179 (10th Cir.1993), petition for cert. filed, 61 U.S.L.W. 3789 (U.S. May 10, 1993) (No. 92-1784). The Court stated:
38
[T]he common law duty is no less a "requirement" in the preemption scheme than a state statute imposing the same burden.... [T]he common law duty to warn is subjected to the same federal preemptive constraints as a state statute.... To the extent that state tort claims in this case require a showing that defendants' labeling and packaging should have included additional, different, or alternatively stated warnings from those required under FIFRA, they would be expressly preempted.
39
Id.
40
In Shaw, 994 F.2d 364, the Seventh Circuit held that FIFRA preempted a state law claim based on failure-to-warn of the dangers of a chemical stain remover. The court stated:
41
In order to succeed in the wake of Cipollone, then, Shaw would have to show that FIFRA's preemption language is less sweeping than the language of the 1969 Cigarette Act. Yet we can discern no significant distinction at all--FIFRA says that "[s]uch State shall not impose * * * any requirements for labeling or packaging in addition to or different from those required * * *," while the cigarette law says "[n]o requirement[s] or prohibition[s] * * * imposed under State law" shall be permitted. Both seem equally emphatic: "[n]o requirements or prohibitions" is just another way of saying a "[s]tate shall not impose * * * any requirements." Not even the most dedicated hair-splitter could distinguish these statements. If common law actions cannot survive under the 1969 cigarette law, then common law actions for labeling and packaging defects cannot survive under FIFRA.
42
Id. at 371.
43
C. The plaintiffs rely on Ferebee v. Chevron Chemical Co., 736 F.2d 1529 (D.C.Cir.), cert. denied, 469 U.S. 1062, 105 S.Ct. 545, 83 L.Ed.2d 432 (1984). There, the plaintiff became ill and died as a result of his exposure to an herbicide he sprayed. In affirming a jury verdict for the plaintiff, the court held that FIFRA did not preempt the plaintiff's state law tort claims based upon the inadequacy of the warning labels on the herbicide. The court reasoned that "Chevron can comply with both federal and state law by continuing to use the EPA-approved label and by simultaneously paying damages to successful tort plaintiffs such as Mr. Ferebee." Id. at 1541.
44
In deciding Ferebee, the District of Columbia Circuit did not have the benefit of the Supreme Court's subsequent analysis and ruling in Cipollone. It is impossible to predict whether, in light of Cipollone and the other courts of appeals' decisions discussed above, the District of Columbia Circuit would continue to follow Ferebee. In any event, for the reasons set forth in this opinion, we do not find Ferebee persuasive.
45
Affirmed.
*
Of the Federal Circuit, sitting by designation
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FILED
NOT FOR PUBLICATION SEP 01 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
JOSEPH AMAZIAH TRENTON, a.k.a. No. 09-15377
Clinton Joseph Slone,
D.C. No. 3:05-cv-03362-MHM
Petitioner - Appellant,
v. MEMORANDUM *
ATTORNEY GENERAL FOR THE
STATE OF ARIZONA; CHARLES L.
RYAN,
Respondents - Appellees.
Appeal from the United States District Court
for the District of Arizona
Mary H. Murguia, District Judge, Presiding
Submitted August 10, 2010 **
Before: LEAVY, HAWKINS, and IKUTA, Circuit Judges.
Joseph Amaziah Trenton appeals pro se from the district court’s orders
dismissing his 28 U.S.C. § 2254 habeas petition and denying his motion for
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
reconsideration. We have jurisdiction under 28 U.S.C. § 2253, and we affirm.
On remand from this Court, the district court dismissed as moot Trenton’s
habeas petition, which challenged the original calculation of his parole eligibility
date. Trenton contends the district court erred by dismissing the petition and
denying his subsequent motion for reconsideration because the Arizona
Department of Corrections’ subsequent recalculation of his release dates was also
incorrect. However, the recalculated release dates are not the subject of Trenton’s
section 2254 petition or his original appeal. The issue of whether the recalculated
release dates were erroneously calculated therefore has no bearing on whether the
district court properly dismissed the petition.
The rule of mandate required the district court to dismiss the petition
because this Court had determined that the only timely issue raised in the petition,
whether the original parole-eligibility date was miscalculated, was moot. See
United States v. Thrasher, 483 F.3d 977, 981-82 (9th Cir. 2007) (“‘a district court
could not refuse to dismiss a case when the mandate required it’”) (quoting United
States v. Cote, 51 F.3d 178, 181 (9th Cir. 1995)).
2 09-15377
We construe Trenton’s additional arguments as a motion to expand the
certificate of appealability. So construed, the motion is denied. See 9th Cir. R.
22-1(e); see also Hiivala v. Wood, 195 F.3d 1098, 1104-05 (9th Cir. 1999) (per
curiam).
AFFIRMED.
3 09-15377
|
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2019 IL App (1st) 171009-B
No. 1-17-1009
Opinion filed June 28, 2019
Second Division
_____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
______________________________________________________________________________
) Appeal from the
RAFAEL MUNOZ, ) Circuit Court of
) Cook County.
Plaintiff-Appellee, )
)
v. ) No. 14 L 4331
)
NORFOLK SOUTHERN RAILWAY COMPANY, )
) Honorable
Defendant-Appellant. ) Lorna E. Propes,
) Judge, presiding.
JUSTICE HYMAN delivered the judgment of the court, with opinion.
Justices Mason and Walker* concurred in the judgment and opinion.
OPINION
¶1 Rafael Munoz, a railroad freight conductor, sued his employer, Norfolk Southern
Railway Company (Norfolk), under the Federal Employee Liability Act (FELA) (45 U.S.C. § 51
et seq. (2012)), claiming negligence for injuries he incurred at work. A jury awarded him
$821,000, including $310,000 for past and future lost wages. After the verdict, Norfolk moved
Justice Walker replaces Justice Neville, who was appointed to the Illinois Supreme Court after
*
the court issued its original opinion.
No. 1-17-1009-B
for a setoff, claiming Munoz owed taxes on the lost wages under the Railroad Retirement Tax
Act (RRTA) (I.R.C. § 3201 et seq. (2012)). The trial court denied the motion, relying on cases
holding that, like personal injury judgments under section 104(a)(2) of the Internal Revenue
Code (I.R.C. § 104(a)(2) (2012)), the RRTA does not require employers to withhold taxes for
FELA personal injury awards.
¶2 Norfolk appealed, arguing section 104(a)(2) only applies to nonrailroad employees’
personal injury awards. Moreover, Norfolk asserted that because the RRTA funds employees’
retirement benefits provided by the Railroad Retirement Act of 1974 (RRA) (45 U.S.C. § 231
et seq. (2012)), the statutes should be read together. That makes a FELA award for lost wages
taxable “compensation” subject to a withholding tax. Alternatively, Norfolk contended that if we
found the applicable RRTA language ambiguous, we should look to Internal Revenue Service
(IRS) regulations, which have interpreted “compensation” in the RRTA to include payments for
lost wages.
¶3 We rejected Norfolk’s arguments and affirmed the trial court. We found that the RRTA
defines “compensation” as money paid to an employee for “services rendered” and that lost
wages cannot be paid to an employee for “services rendered.” Further, under the test in Chevron
U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), we found that we
need not look to agency regulations for clarification where, as here, the statutory language
provides an unambiguous expression of congressional intent. Because we affirmed on that basis,
we did not consider the applicability of section 104(a)(2) to the RRTA.
¶4 After our decision, the United States Supreme Court held in BNSF Ry. Co. v. Loos, 586
U.S. ___, 139 S. Ct. 893 (2019), that FELA lost-wages awards constitute compensation subject
to withholding taxes. The Illinois Supreme Court entered a supervisory order directing us to
-2-
No. 1-17-1009-B
vacate our initial judgment and consider the effect of Loos. Munoz v. Norfolk Southern Ry. Co.,
No. 123894 (Ill. May 22, 2019). Based on Loos, we conclude Munoz’s lost wages award to be
compensation taxable under the RRTA. Thus, we vacate our prior disposition, reverse the order
of the trial court, and remand for further proceedings.
¶5 Background
¶6 Munoz injured his shoulder and neck when a train he was working on in Norfolk’s
Calumet Yard came to a sudden stop. Munoz sued Norfolk for negligence under the FELA (45
U.S.C. § 51 et seq. (2012)), and sought damages for lost wages, medical bills, loss of future
earning capacity, and pain and suffering. Norfolk admitted liability, leaving damages as the only
issue. Norfolk asserted in a trial brief that any lost earnings award must be offset by Munoz’s
share of RRTA taxes, which, under the RRA, fund railroad employees’ retirement benefits. The
court did not address the issue at that time.
¶7 The trial court instructed the jury, in part, “If you find for the Plaintiff, any damages you
award will not be subject to income taxes and therefore you should not consider taxes in fixing
the amount of the verdict.” The jury returned a verdict in Munoz’s favor, awarding him $821,000
in damages, including $310,000 for past and future lost wages.
¶8 Norfolk filed a posttrial motion arguing it had a $14,560.79 statutory lien on the verdict
for “sickness benefits” it paid Munoz and asking for a $16,610.23 setoff from Munoz’s $310,000
lost wages award for his share of RRTA taxes. Munoz did not contest the lien for sickness
benefits; however, as to his lost wages portion, Munoz contended lost wages should be treated no
differently under the RRTA than other personal injury awards, which are not subject to income
tax withholding under the Internal Revenue Code. See I.R.C. § 104(a)(2) (2012) (“gross income
-3-
No. 1-17-1009-B
does not include *** the amount of any damages (other than punitive damages) received
(whether by suit or agreement and whether as lump sums or as periodic payments) on account of
personal physical injuries or physical sickness”).
¶9 After a hearing on the motion, the trial court followed the Missouri Supreme Court in
Mickey v. BNSF Ry. Co., 437 S.W.3d 207, 212 (Mo. 2014), which held, in part, that like the
exclusion for personal injury awards under Internal Revenue Code section 104(a)(2), a FELA
lost wages award does not constitute income and, therefore, does not qualify as taxable
“compensation” under the RRTA. The trial court rejected the opposite result, which had been
reached in Heckman v. Burlington Northern Santa Fe Ry. Co., 837 N.W.2d 532, 543 (Neb. 2013)
(“Under the RRA, the entire award is compensation subject to RRTA taxes that must be paid by
the employer.”).
¶ 10 Analysis
¶ 11 Norfolk contends the RRTA is not ambiguous, asserting that the plain language of the
statute, when read in conjunction with the RRA, supports a finding that a FELA lost wages
award is compensation subject to withholding taxes. Alternatively, Norfolk asserts that if we find
the RRTA language is ambiguous, we should look to IRS regulations and RRA information
notices, which support withholding.
¶ 12 When Congress enacted the RRTA in 1937, it defined “compensation” to include lost
wages. But, Congress amended the statute in 1975 (Railroad Retirement Tax Act, Pub. L. No.
94-93, § 204, 90 Stat. 466 (1975)) and again in 1983 (Railroad Retirement Solvency Act of 1983,
Pub. L. No. 98-76, § 225(a)), 97 Stat. 411, 424 (1983)), removing all reference to “pay for time
lost.” Section 3231(e)(1) of the RRTA now defines compensation as “any form of money
-4-
No. 1-17-1009-B
remuneration paid to an individual for services rendered as an employee to one or more
employers.” I.R.C. § 3231(e)(1) (2012). Section 3231(e)(1) includes numerous exceptions to its
definition of compensation, none of which refer to lost wages or FELA awards.
¶ 13 For years, it was generally accepted that, like damages for personal injury awards under
section 104(a)(2) of the Internal Revenue Code, neither RRTA nor the IRS required railroads to
withhold taxes when paying FELA judgments. Jeffrey R. White, The Taxman Cometh to Your
FELA Judgment, 50-APR Trial 16, 18 (2014). Then, in 2013, the Nebraska Supreme Court
issued an opinion in Heckman, 837 N.W.2d at 543, holding that a general verdict in a FELA case
presumes to be for time lost, making the entire award subject to RRTA withholding taxes.
¶ 14 Several state supreme courts followed Heckman’s lead, holding that FELA lost wages
awards constitute compensation subject to RRTA taxes. See Liberatore v. Mononogahela Ry.
Co., 2016 PA Super 79, and Phillips v. Chicago Central & Pacific R.R. Co., 853 N.W.2d 636
(Iowa 2014). Others found that “compensation” does not include FELA damages for lost wages
and thus, they were not subject to withholding. See, e.g., Mickey, 437 S.W.3d 207, and Loy v.
Norfolk Southern Ry. Co., No. 3:12-CV-96-TLS, 2016 WL 1425952 (N.D. Ind. Apr. 12, 2016).
In Loos v. BNSF Ry. Co., 865 F.3d 1106 (8th Cir. 2017), the Eighth Circuit Court of Appeals
adopted this view, prompting the United States Supreme Court to grant review to resolve the
division of opinion. Loos, 586 U.S. ___, 139 S. Ct. 893.
¶ 15 In Loos, the plaintiff sued his employer, BNSF, alleging the railroad negligently caused
his knee injury. Loos, 865 F.3d at 1009-10. The FELA claim resulted in a jury verdict in Loos’s
favor for pain and emotional distress, lost wages, and past medical expenses. Id. at 1111. BNSF
moved to offset the lost wages award by the amount of Loos’s share of taxes owed under RRTA.
-5-
No. 1-17-1009-B
Id. The trial court denied the motion, finding that no RRTA tax to be owed on the award, and the
appellate court affirmed. Id.
¶ 16 The Supreme Court reversed. Loos, 586 U.S. ___, 139 S. Ct. 893. The Court noted that
taxes under the RRTA are measured by an employee’s “compensation,” which the RRTA defines
as “any form of money remuneration paid to an individual for services rendered as an employee”
(I.R.C. § 3231(e)(1) (2012)). Loos, 586 U.S. at ___, 139 S. Ct. at 895. The Court found this
definition textually similar to the definition of “wages” in the Federal Insurance Contributions
Act (FICA) (I.R.C. § 3101 et seq. (2012)) and the Social Security Act (SSA) (42 U.S.C. § 301
et seq. (2012)). Loos, 586 U.S. at ___, 139 S. Ct. at 899. The Court found its earlier holdings in
Social Security Board v. Nierotko, 327 U.S. 358 (1946), and United States v. Quality Stores, Inc.,
572 U.S. 141 (2014), helpful in defining the term “compensation” under the RRTA. The Court
noted that in Nierotko and Quality Stores, “wages” under the SSA and FICA included awards of
backpay and severance payments, respectively, because those awards represented pay for active
service as well as pay for periods of absence from active service. In line with those cases, the
Court concluded that “compensation” under the RRTA can encompass pay for periods of
absence from active service, as long as the remuneration in question “stems from the ‘employer-
employee relationship.’ ” Loos, 586 U.S. at ___, 139 S. Ct. at 900 (quoting Nierotko, 327 U.S. at
366).
¶ 17 The Court found that damages for lost wages awarded under the FELA “fit comfortably”
within that definition. Like backpay, lost wages damages compensate an employee for time
during which he or she is “ ‘wrongfully separated from [work].’ ” Id. at ___, 139 S. Ct. at 900
(quoting Nierotko, 327 U.S. at 364). Thus, just as backpay falls within the definition of wages,
-6-
No. 1-17-1009-B
FELA damages for lost wages qualify as “compensation” and are taxable under the RRTA. Id. at
___, 139 S. Ct. at 901.
¶ 18 The Court also rejected the Eighth Circuit’s finding that the 1975 and 1983 amendments
to the RRTA show that “compensation” no longer includes pays for time lost. Id. at ___, 139 S.
Ct. at 901; Loos, 865 F.3d at 1119. The Court found that the 1975 amendment left unaltered the
language, “remuneration *** for services rendered as an employee” and did not alter RRTA’s
description of pay for time lost. (Internal quotation marks omitted.) Loos, 586 U.S. at ___, 139 S.
Ct. at 901. And, the 1983 amendment involved only “technical amendments” related to changing
from monthly to annual computation of compensation. The Court concluded that the language of
the RRTA “continues to indicate that ‘compensation’ encompasses pay for time lost.” Id. at ___,
139 S. Ct. at 901.
¶ 19 The Court rejected Loos’s assertion that FELA damages should not be deemed
“compensation” because they are “involuntary payments” that compensate an employee for an
injury rather than for services rendered. The Court noted that in Nierotko, an award of backpay
compensating an employee for his wrongful discharge were “wages” under the SSA, even
though it was “occasioned by ‘the employer’s wrong.’ ” Id. at ___, 139 S. Ct. at 902 (quoting
Nierotko, 327 U.S. at 364). “Applying that reasoning,” the Court stated, “there should be no
dispositive difference between a payment voluntarily made and one required by law.” Id. at ___,
139 S. Ct. at 902.
¶ 20 Lastly, the Court rejected Loos’s assertion that the exclusion of personal injury damages
from federal income taxation under section 104(a)(2) of the Internal Revenue Code applies to
FELA damages. Section 104(a)(2) exempts from federal income tax “damages *** received ***
on account of personal physical injuries” by excluding those damages from “gross income.”
-7-
No. 1-17-1009-B
I.R.C. § 104(a)(2) (2012). Loos argued that the exclusion of personal injury damages from “gross
income” should carry over the RRTA’s tax on the income of railroad workers. The Court found
the argument “unconvincing” because it conflates “gross income” under the Internal Revenue
Code with “compensation” under the RRTA, which Congress kept as discrete tax bases. Loos,
586 U.S. at ___, 139 S. Ct. at 903. Further, Congress did not adopt for RRTA purposes the
exclusion of personal injury damages from the federal income tax in section 104(a)(2).
Accordingly, section 104(a)(2) does not exempt FELA damages from the RRTA’s income and
excise taxes. Id. at ___, 139 S. Ct. at 904.
¶ 21 In light of the holding in Loos, we conclude that Munoz’s FELA award is subject to
withholding under RRTA, and the trial court erred in denying Norfolk’s motion for a setoff. We
reverse and remand for further proceedings.
¶ 22 Reversed and remanded.
-8-
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928 F.2d 396
Saunders (Pamela)v.Spano (Anthony), Dittert (William J., Jr.), Smythe (Robert),Borough of Darby, Preate (Ernest, Jr.), Nix (Robert N.C.,Jr.), Larsen (Rolf), Flaherty (John P.), McDermott (JamesT.), Zappala (Stephen A.), Papadakos (Nicholas P.)
NO. 90-1675
United States Court of Appeals,Third Circuit.
FEB 12, 1991
Appeal From: E.D.Pa.,
Broderick, J.
1
APPEAL DISMISSED.
|
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|
641 S.W.2d 31 (1982)
277 Ark. 298
FIRST NATIONAL MORTGAGE COMPANY, Appellant,
v.
ARKMO LUMBER & SUPPLY COMPANY, Appellee.
No. 82-132.
Supreme Court of Arkansas.
November 8, 1982.
*32 Charles Darwin Davidson, P.A., Little Rock, for appellant.
Homer Tanner, North Little Rock, for appellee.
GEORGE ROSE SMITH, Justice.
When the appellee Arkmo filed this suit in 1980 to foreclose its second mortgage upon land in Pulaski county, the appellant First National filed a cross-complaint to foreclose its construction-money first mortgage upon the same land. The mortgagors, apparently insolvent, let both claims go by default. Arkmo pleaded in response to the cross-complaint that First National's mortgage was void for usury. This appeal is from a decree sustaining that plea.
For reversal First National contends: First, Arkmo lacks standing to challenge the first mortgage for usury; second, Arkmo's plea of usury should have been disregarded as a mere conclusion of law; and third, the first mortgage was not usurious. We hold that the chancellor's decision was correct.
First, the matter of Arkmo's standing. Ever since 1887 our statute has provided that any creditor having a lien upon property may attack the validity of a rival lien arising from a usurious contract. Ark. Stat.Ann. §§ 68-609 and -610 (Repl.1979). In Hiner v. Whitlow, 66 Ark. 121, 49 S.W. 353, 74 Am.St.Rep. 74 (1899), we construed the statute so narrowly that it was practically of no effect, but we overruled the Hiner case in Bailey v. Commerce Union Bank, 223 Ark. 686, 269 S.W.2d 314 (1954). We adhere to our holding in Bailey, despite the suggestion made there on rehearing that the ruling was dictum.
Second, Arkmo's conclusory plea of usury. Arkmo's plea was in fact a conclusion, asserting merely that First National's note and indebtedness were void for usury. In a 1975 case we denied an application for a writ of prohibition on the ground that usury is an affirmative defense which the trial court may in its discretion reject without a hearing when no facts are pleaded to support the assertion of usury. Girley v. Wood, 258 Ark. 408, 525 S.W.2d 454 (1975). We indicated, however, that a conclusory plea would be good if the note is usurious on its face.
That case is not controlling here, expecially in view of the Rules of Civil Procedure that became effective in 1979. In the case at bar the conclusory plea was filed in August, 1981. First National went to trial six months later, in February, without having moved for a more definite statement, as it was entitled to do under Rule 12(e). At the trial counsel for Arkmo, without objection, adduced facts supporting its plea of usury by cross-examining First National's principal witness, Dennis Mills. There was no claim of surprise. At the conclusion of the trial counsel for both sides argued the question of usury and submitted *33 written briefs within a week. The trial judge, in deciding the case, specifically held that First National had sufficient notice of the allegation of usury. Thus under Civil Procedure Rule 15 the trial court properly treated the pleadings as having been amended to conform to the proof.
Third, the question of usury. First National's promissory note, dated November 8, 1977, ostensibly obligated the makers to pay $38,800 on or before November 8, 1978, with interest from date until maturity at 8.75% per annum and thereafter until paid at 10% per annum. The note recited that it was secured by a construction-loan mortgage and contained this typed insertion in the printed form: "The signers hereby agree to pay 1% commitment fee." The accompanying mortgage recited that the loan would be used solely for the construction of improvements on the mortgaged land and that construction would be optional with the mortgagors. Thus the transaction was a typical construction loan, which is one to finance a building project until its completion and the issuance of the long-term mortgage. Webster's Third New International Dictionary (1961).
Here Arkmo's argument that the note was usurious on its face was accepted by the chancellor. We have held that a commitment fee, assessed by the lender for its readiness to have the total amount of a construction loan available when needed, is in fact part of the lender's cost of doing business and must be treated as interest if charged to the borrower. Ark. Sav. & Loan Assn. v. Mack Trucks of Ark., 263 Ark. 264, 566 S.W.2d 128 (1978). Under the language of First National's note, the 1% commitment fee could have been charged to the borrowers at the outset, as was done in the case cited. In that event the inclusion of the commitment fee in the principal amount of the note would have resulted in an excessive interest charge after maturity. Hence the exaction of the commitment fee made the note usurious.
There is an alternative basis demonstrating the correctness of the chancellor's decision. The witness Mills testified that during the original one-year term of the note First National made four disbursements as construction progressed. We list those four advances, with the interest accrued at 8.75% from the date of each advance until the one-year maturity of the note on November 8, 1978:
Amounts Advanced Interest at 8.75%
Nov. 8, 1977: $ 5,352 $ 468.30
Dec. 28, 1977: 6,288 474.83
Feb. 22, 1978: 15,520 963.61
Apr. 26, 1978: 4,000 188.04
_________
Total interest accrued first year 2,094.78
Plus 1% commitment fee 388.00
_________
Total chargeable to borrowers 2,482.78
The maximum legal interest, at 10% per annum, upon the four advances from their dates until maturity would be only $2,394.03. Hence the addition of the 1% commitment fee, deductible at the outset, resulted in an excessive interest charge of $88.75 during the first year. First National did not actually charge the commitment fee, perhaps because such a fee was disapproved in Mack Trucks a few months after the date of the construction loan now in question. The option to make the charge lay with the lender, however, not with the borrowers. A lender cannot purge a loan of usury by dropping the excess charge when suit is filed. Bunn v. Weyerhaeuser Company, 268 Ark. 445, 598 S.W.2d 54 (1980). The chancellor's decision was right.
Affirmed.
|
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NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
ANDRES RODRIGUEZ-AGUILAR, )
)
Appellant, )
)
v. ) Case No. 2D14-1719
)
STATE OF FLORIDA, )
)
Appellee. )
)
Opinion filed March 9, 2016.
Appeal from the Circuit Court for
Hillsborough County; Gregory P. Holder,
Judge.
Howard L. Dimmig, II, Public Defender,
and Maureen E. Surber, Assistant Public
Defender, Bartow, for Appellant.
Pamela Jo Bondi, Attorney General,
Tallahassee, and Jessica Stephans,
Assistant Attorney General, Tampa, for
Appellee.
ALTENBERND, Judge.
Andres Rodriguez-Aguilar appeals his order of revocation of probation and
the resulting sentence of five years in prison. We conclude that the trial court erred in
imposing a prison sentence under section 775.082(10), Florida Statutes (2011). We
thus reverse the sentence and remand for sentencing with instructions to impose a
nonstate prison sanction. See Bryant v. State, 148 So. 3d 1251, 1258-59 (Fla. 2014).
In 2012, the State charged Mr. Rodriguez-Aguilar with one count of failure
to redeliver leased personal property—a television and a laptop—to Aaron Rents, which
offense is a third-degree felony. See § 812.155(3), Fla. Stat. (2011). Mr. Rodriguez-
Aguilar negotiated a plea for a withhold of adjudication and an eighteen-month term of
probation, requiring restitution of $2509.95. His scoresheet at the time reflected one
prior felony, which involved uttering a forged instrument, and his total score was seven
points. The trial court entered an order of probation.
As explained in our opinion in Rodriguez-Aguilar v. State, No. 2D14-2793
(Fla. 2d DCA Mar. 9, 2016), in December 2013, Mr. Rodriguez-Aguilar was arrested
after police observed him enter and briefly operate a motor vehicle that had been
reported stolen. An officer who searched him incident to the arrest discovered a loaded
firearm in a pocket of Mr. Rodriguez-Aguilar's pants. This resulted in the new charges
discussed in case number 2D14-2793 and in this revocation of probation proceeding.
The affidavit of violation also alleged that Mr. Rodriguez-Aguilar had violated his
probation by committing the offenses of grand theft of an automobile and burglary of an
unoccupied conveyance and by failing to pay restitution.
The nonjury hearing on the revocation of probation occurred on March 6,
2014, about six weeks before the jury trial in the proceeding for the new law violations.
At the nonjury hearing, the State called several witnesses, including four officers who
were involved in the investigation leading to Mr. Rodriguez-Aguilar's arrest. After the
State rested, Mr. Rodriguez-Aguilar testified. Contrary to the testimony of the officers,
-2-
he denied driving the vehicle or having a firearm in his possession when he was
arrested. The court found that the State had not proven the grounds relating to the
burglary and theft of the automobile but that the State had proven the grounds relating
to the firearm. It then immediately proceeded to the sentencing phase.
Because of the violation of probation, Mr. Rodriguez-Aguilar's scoresheet
totaled thirteen points at the sentencing hearing on the violation of probation. This
score was well below the twenty-two points necessary under the Criminal Punishment
Code for the imposition of a state prison sanction based on a conviction of a felony that
was not a forcible felony. See § 775.082(10). The State summarily argued that Mr.
Rodriguez-Aguilar should be sentenced to five years' imprisonment, providing no factual
basis or legal justification for this prison sentence. Mr. Rodriguez-Aguilar's attorney
responded: "Judge, I'd like to tell you that I'm arguing for supervision, but that would not
be an appropriate thing for me to say right now. So I'm going to ask that you sentence
him to an appropriate sentence, which would be less than the five years." 1 The judge
sentenced Mr. Rodriguez-Aguilar to the maximum five-year sentence without any
explanation about how this sentence could be imposed given the scoresheet. 2 Mr.
Rodriguez-Aguilar's attorney then objected to the sentence because his client's
1We are unable to determine from our record why defense counsel
thought it would be inappropriate to argue for supervision. From the record, the trial
court seemed to be very bothered by the fact that Mr. Rodriquez-Aguilar had essentially
testified that the officers were committing perjury concerning the circumstances
surrounding his arrest. But that would not be a reason to dispense with an argument for
a nonstate prison sanction.
2The sentence imposed six weeks later is a ten-year sentence consecutive
to this sentence. Neither decision on appeal disturbs the ten-year sentence.
-3-
scoresheet had fewer than twenty-two points. The trial court responded stating only:
"Yes, I understand. I understand."
The written judgment and uniform commitment to custody were signed on
March 6, 2014, the same day as the hearing, although they were not filed at that time.
Oddly, on March 12, the trial court entered an order titled "Written Findings Pursuant to
Section 775.082(10), Florida Statutes." Given that no one at the sentencing hearing
mentioned section 775.082(10), that no additional evidence was presented at the
sentencing hearing, and that no findings were orally announced at the hearing before
the sentence was imposed, it is unclear what prompted the trial court to enter this order
after the sentence had been imposed and Mr. Rodriguez-Aguilar had begun serving it.
The order of revocation, the written sentence, and the uniform commitment were
subsequently filed on March 14.
Section 775.082(10) states:
If a defendant is sentenced for an offense committed
on or after July 1, 2009, which is a third degree felony but
not a forcible felony as defined in s[ection] 776.08, and
excluding any third degree felony violation under chapter
810, and if the total sentence points pursuant to s[ection]
921.0024 are 22 points or fewer, the court must sentence
the offender to a nonstate prison sanction. However, if the
court makes written findings that a nonstate prison sanction
could present a danger to the public, the court may sentence
the offender to a state correctional facility pursuant to this
section.
See also Fla. R. Crim. P. 3.704(29).
Recently, in Bryant, the supreme court characterized this statute as a
"reinstate[ment]" of "[t]he practice of upward departure sentences," which had been
abolished with the passage of the Criminal Punishment Code in 1998. Bryant, 148 So.
-4-
3d at 1254-58. According to the statute, an upward departure to a prison sentence
requires a written finding that imposing a nonstate prison sanction in a given case
"could present a danger to the public." § 775.082(10). This is a factual question
requiring a finder of fact to make a determination based on evidence in the record. See
Jones v. State, 71 So. 3d 173, 174-76 (Fla. 1st DCA 2011) (concluding that the trial
court's written findings were not supported by the record and did not justify a prison
sentence under section 775.082(10)).
In this case, Mr. Rodriguez-Aguilar was not placed on notice that his
danger to the public was an issue being tried by the court without a jury. 3 He was never
informed that he had the right to present evidence on this issue. His attorney did not
argue the issue because the State never asked for a sentence based on this special
factual finding. Mr. Rodriguez-Aguilar never had an opportunity in court to object to the
court's written findings because the order was delivered to his attorney days after he
had already been sentenced. Thus, there are some serious due process and Sixth
Amendment concerns in this case.
"Fundamental principles of justice require that decisions restricting a
person's liberty be made only after a neutral magistrate gives due consideration to any
argument and evidence that are proper." Ree v. State, 565 So. 2d 1329, 1332 (Fla.
1990), holding modified by State v. Lyles, 576 So. 2d 706, 708-09 (Fla. 1991), receded
from on other grounds by Smith v. State, 598 So. 2d 1063, 1066 (Fla. 1992). For this
3Cf. Plott v. State, 148 So. 3d 90, 95 (Fla. 2014) (concluding that the
failure to obtain a waiver of trial by jury before conducting a resentencing under Heggs
v. State, 759 So. 2d 620 (Fla. 2000), during which time an upward departure sentence
was imposed based on factual findings, rendered the defendant's sentence illegal for
purposes of Florida Rule of Criminal Procedure 3.800(a)).
-5-
reason, a trial court imposing an upward departure sentence under the pre-Criminal
Punishment Code guidelines was always required to provide the reasons for departure
at the time the sentence was imposed. 4
We are not holding that all of the sometimes arcane procedural
requirements for the imposition of an upward departure sentence under the old
sentencing guidelines apply to section 775.082(10). But to the extent that those rules
were needed to satisfy due process and the requirements for oral pronouncement of a
sentence in open court, those older rules inform current courts of the procedures that
may be important for the imposition of a sentence under section 775.082(10). Thus,
although section 775.082(10), as a matter of substantive law, makes no reference to the
procedures required in open court prior to the rendering of written findings, the total
absence of those procedures in this case is very troubling.
These due process and Sixth Amendment concerns aside, we conclude
that the trial court erred in imposing a prison sentence in this case because the court's
written findings pursuant to section 775.082(10) are not supported by the record. The
court's order relies on the evidence that the State presented and the trial court
considered to determine whether Mr. Rodriguez-Aguilar had violated his probation. In
its order, the trial court first finds that a nonstate prison sanction for Mr. Rodriguez-
4See, e.g., Fla. R. Crim. P. 3.702(d)(18) (requiring a trial court, in imposing
an upward departure under the 1994 sentencing guidelines, to "orally articulat[e]" the
reasons for departure at the time of sentencing and to file a signed, written statement
delineating the reasons for departure within fifteen days of the date of sentencing);
Ree, 565 So. 2d at 1331 (interpreting Florida Rules of Criminal Procedure 3.701(b)(6)
and 3.701(d)(11) and section 921.001(6), Florida Statutes (1987), and holding that,
under the original guidelines sentencing scheme, written reasons for an upward
departure must be entered contemporaneously or at the time of sentencing).
-6-
Aguilar could present a danger to the public because he "committed multiple serious
violations of his probation conditions." It supports this finding with two virtually identical
paragraphs that find that Mr. Rodriguez-Aguilar twice violated condition four of his
probation and once violated condition five by having the gun in his pants pocket. Thus,
he actually committed a single act that qualified as multiple violations. Without
minimizing the offenses of carrying a concealed weapon and possessing a weapon as a
felon—even a felon convicted of uttering a forged instrument and failing to redeliver
leased property—this evidence is simply not evidence sufficient to support a finding of
fact that Mr. Rodriguez-Aguilar had "committed multiple serious violations" of probation.
The trial court in its order next finds that a nonstate prison sanction for Mr.
Rodriguez-Aguilar could present a danger to the public because Mr. Rodriguez-Aguilar
has proven that he "cannot live at large without engaging in a continuous pattern of
criminal activity." It bases this finding on "his arrest for several offenses," even though
the court did not find that the State had proven the burglary or the grand theft charges
by even the preponderance of the evidence. We conclude that a prediction of future
danger to the public that allows for a prison sentence under section 775.082(10) cannot
be established by proof of alleged prior offenses when the proof falls below the standard
of preponderance of the evidence; proof that merely reaches the level of probable
cause or reasonable suspicion is not sufficient. See Dinkines v. State, 122 So. 3d 477,
481 (Fla. 4th DCA 2013) (concluding that the trial court erred in relying on offenses for
which the defendant was either acquitted or never charged to support its findings under
section 775.082(10)); Jones v. State, 71 So. 3d 173 (Fla. 1st DCA 2011) (concluding
that the trial court's findings under section 775.082(10) of the defendant's future
-7-
dangerousness were "speculative at best because it d[id] not appear from the record
that [the defendant] ha[d] a history of vehicle accidents or engaging in high speed
chases with law enforcement"). 5
Finally, the order relies upon the trial court's following finding:
[Mr. Rodriguez-Aguilar] made false statements under
oath. [He] testified that he had not driven the stolen vehicle
from which he was removed and arrested and that he did not
possess the firearm found in his pants pocket; however,
testimony from the hearing shows that he was observed
driving the stolen vehicle and subsequently arrested while in
the stolen vehicle. Moreover, the firearm was actively
recovered from [his] pocket.
Without minimizing the need for witnesses to testify honestly under oath, a trial court's
determination that a defendant has made false statements under oath simply is not
evidence that supports a prediction that the defendant will be a danger to the public in
the future. Cf. Dinkines, 122 So. 3d at 480-81 (concluding that the trial court's improper
consideration of the defendant's lack of remorse in imposing a prison sanction under
section 775.082(10) required reversal). As Mr. Rodriguez-Aguilar accurately argues on
appeal, in a normal sentencing proceeding it is regarded as fundamental error and a
denial of due process for a trial judge to consider a defendant's refusal to admit guilt,
unwillingness to take responsibility for his actions, or the untruthfulness of his testimony.
See, e.g., Williams v. State, 164 So. 3d 739, 740-41 (Fla. 2d DCA 2015); Bracero v.
State, 10 So. 3d 664, 665-66 (Fla. 2d DCA 2009); Hannum v. State, 13 So. 3d 132,
135-36 (Fla. 2d DCA 2009). There arguably may be a slight distinction between a
5See also Fla. R. Crim. P. 3.701(d)(11) (explaining that for offenses prior
to 1994, "[r]easons for deviating from the guidelines shall not include factors relating to
prior arrests without conviction or the instant offenses for which convictions have not
been obtained").
-8-
finding of danger based on a defendant's testimony at trial and the imposition of a prison
sentence whose length is based on the court's conclusion that the defendant testified
untruthfully. But in this case we conclude that the testimony is not competent evidence
to establish a future danger.
We note that six weeks after this hearing, the trial court sentenced Mr.
Rodriguez-Aguilar in case number 2D14-2793 to a consecutive sentence of ten years'
imprisonment with a three-year minimum mandatory term for the same gun in his pants.
The "danger" that arguably required a longer sentence was addressed in that case. We
make no holding as to this observation, but it suggests that this particular sentencing
method might reasonably be deferred until the outcome of the jury trial on the new
charges in cases similar to this. Concerns under the old guidelines sentencing
procedures about the possibility of imposing more than one sentencing enhancement
based on a single act may be concerns under this statute as well. Cf. Lambert v. State,
545 So. 2d 838, 841 (Fla. 1989) (holding that under the old sentencing guidelines, even
when a conviction on a new law offense was obtained prior to sentencing on the
probation violation, factors related to the violation could not be used as grounds for a
departure on the sentence for the violation).
In Bryant, the supreme court held that when a trial court fails to provide
written reasons for an upward departure sentence under section 775.082(10) or when
the reasons the trial court provides are found to be invalid on appeal, the trial court must
impose a nonstate prison sanction on remand. Bryant, 148 So. 3d at 1258-59. Thus,
on remand the trial court shall impose a nonstate prison sanction in accordance with
section 775.082(10).
-9-
Affirmed in part, reversed in part, and remanded.
NORTHCUTT and CRENSHAW, JJ., Concur.
- 10 -
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
November 30, 2005
No. 04-11921 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 03-00358-CR-T-27-TGW
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
SIDNEY R. BEACHER,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(November 30, 2005)
Before ANDERSON, HULL and WILSON, Circuit Judges.
PER CURIAM:
Sidney Beacher appeals his conviction for possession of an unregistered
destructive device, in violation of 26 U.S.C. §§ 5861 and 5871. On appeal, Beacher
argues that the evidence presented at trial was insufficient to support either the
district court’s denial of his motion for judgment of acquittal or the jury verdict
because there was no evidence that the device in question was made to be a
destructive device, pursuant to 26 U.S.C. § 5845. He argues that his device fell
within the § 5845(f) exclusion for devices not designed or redesigned as weapons,
because it was only a firework intended just to produce a loud noise. Pointing to
United States v. Worstine, 808 F.Supp. 663 (N.D. Ind. 1992), and United States v.
Hammond, 371 F.3d 776 (11th Cir. 2004), Beacher argues that, because the design
of the device did not contain extra items intended as shrapnel, it was not a
destructive device. Pointing to characteristics mentioned in Hammond, Beacher
further argues that his device was not designed as a weapon, objectively or
subjectively, because his device did not contain any of the items mentioned in
Hammond that could cause a device to be classified as destructive. Beacher also
contends that his device was used only for the entertainment purpose of creating a
loud noise and had no features that would eliminate the entertainment value of the
device.
We review “de novo the district court’s denial of a motion for judgment of
acquittal, applying the same standard used in reviewing the sufficiency of the
2
evidence.” United States v. Descent, 292 F.3d 703, 706 (11th Cir. 2002). We must
determine whether, viewing “the facts, and draw[ing] all reasonable inferences
therefrom, in the light most favorable to the government,” a “reasonable fact-finder
could conclude that the evidence established the defendant’s guilt beyond a
reasonable doubt.” United States v. Hansen, 262 F.3d 1217, 1236 (11th Cir. 2001)
(internal quotations and citation omitted); United States v. Pistone, 177 F.3d 957,
958 (11th Cir. 1999).
To convict a defendant of possession of an unregistered destructive device,
in violation of § 5861(d), the government must show that the defendant knowingly
possessed a destructive device that was not registered. United States v. Crawford,
906 F.2d 1531, 1534 (11th Cir. 1990). The government also must prove that the
defendant knew of the features of his device that brought it within the scope of the
statute. Staples v. United States, 511 U.S. 600, 619, 114 S.Ct. 1793, 1804, 128
L.Ed.2d 608 (1994). However, the government is not required to prove that the
defendant knew that the device was a “firearm” within the meaning of the statute
or that registration was required. United States v. Owens, 103 F.3d 953, 956 (11th
Cir. 1997).
Under § 5845(f), a destructive device is, in relevant part, any (1) explosive
bomb, (2) weapon, by whatever name known, that will, or that readily may be
3
converted to, “expel a projectile by the action of an explosive or other propellant,
the barrel or barrels of which have a bore of more than one-half inch in diameter,”
or (3) “combination of parts either designed or intended for use in converting any
device into a destructive device as defined.” 26 U.S.C. § 5845(f)(1)(A), (2), and
(3). “The term ‘destructive device’ shall not include any device which is neither
designed nor redesigned for use as a weapon,” or “any device, although originally
designed for use as a weapon, which is redesigned for use as a signaling,
pyrotechnic, line throwing, safety, or similar device.” Id. In determining whether
a device is designed or redesigned for use as a weapon, the critical inquiry is:
whether the device, as designed, has any value other than as a weapon.
In this inquiry, the presence of design features that eliminate any
claimed entertainment or other benign value supports a finding that
the device was designed as a weapon. On the other hand, evidence
that does not unambiguously support the inference that the explosive
device has no legitimate social value or use does not support a finding
that the device was designed as a weapon.
Hammond, 371 F.3d at 781. Design features that could support a finding that a
device was designed as a weapon include objects that could act as shrapnel upon
explosion, injuring those in the vicinity, and the expulsion of projectiles. Id. at
780-81.
Because a reasonable fact-finder could conclude that the evidence
established beyond a reasonable doubt that Beacher knowingly possessed an
4
unregistered destructive device while knowing of its destructive characteristics, the
evidence was sufficient. Agent Campbell testified at trial that encasing the
sparklers in PVP pipe, as Beacher had done, did nothing to enhance the loud noise
produced by the explosion and instead created plastic shrapnel. He also testified
that the sparklers Beacher used contained sixteen to eighteen grains, compared to
the standard consumer sparkler, which contains only two. Additionally, he
testified that the plastic shrapnel from the bombs could injure a person standing
nearby and inflict property damage. Finally, Campbell testified that the wrapped
sparklers placed in the PVP pipe “as a fragmenting sleeve . . . would definitely
have no social, industrial or commercial value.” Beacher referred to the device as
a pipe bomb and told one of the agents that it needed to be set off in an alley, for
safety reasons. In light of this sufficient testimony, we affirm.
AFFIRMED.1
1
Beacher’s request for oral argument is denied.
5
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401 S.W.2d 140 (1966)
Willard I. BOSS, Appellant,
v.
PRINCE'S DRIVE-INS, Appellee.
No. 4438.
Court of Civil Appeals of Texas, Waco.
March 10, 1966.
Rehearing Denied March 31, 1966.
Thompson, Hippard, Gibson, Korioth & Tita, Houston, for appellant.
Fulbright, Crooker, Freeman, Bates & Jaworski, Blake, Tartt and Jerry Wickliffe, Houston, for appellee.
*141 WILSON, Justice.
Judgment for defendant, operator of a drive-in eating establishment, was rendered notwithstanding jury findings that its negligence in failing to call the police proximately caused plaintiff customer's injuries received in an assault by a third person.
Plaintiff drove his car upon defendant's premises to order food. He was accompanied by his wife. He saw "a crowd of young fellows stand around, moving, milling around," and saw a youth, Yosemite, whose clothes were wet, muddy and disheveled, and who appeared to have been involved in a fight. Plaintiff concluded that what he saw "could signify trouble of some sort, and immediately I decided to avoid the area and get as far away as I could", he testified. He then moved his car toward the opposite end of the parking lot and ordered food. He parked next to another car occupied by a man. Plaintiff observed no further fighting, but "saw Yosemite back away from the group and run across the parking area." After an interval (during which Yosemite testified he entered defendant's cooking area and requested some employees to call the police) Yosemite came to the front of plaintiff's car where he testified he was waiting for the police to arrive. A waitress asked Yosemite, "Can I help you, or is there anything we can do?"
Two or three minutes later two young men (who the evidence shows had been fighting Yosemite), whom plaintiff had earlier seen talking to Yosemite, came to the front of the car and demanded that Yosemite pay them money due on a $13 gambling debt. Plaintiff testified he had then been on the parking area about 15 minutes. Yosemite offered to give them an "I. O. U.", but the two men insisted on a cash payment. Plaintiff testified, "As things progressed they seemed to be working up to some sort of violence." Using profanity and threats, the two began to push Yosemite. "I stepped out of the car, and it seemed to me maybe that some calm words by an older man would try to calm the situation down or there would be a fight, and I stepped out and said something like, `Look fellows, why don't you forget about it; it is just about a little money and not worth causing any trouble about.'"
One of the men, Ainsworth, then wheeled on plaintiff and said, "What in the hell are you butting into this for?" Plaintiff cautioned that someone would call the police, and commented that "it would be stupid to start a fight about such a trivial sum of money." "Are you calling me stupid?" asked Ainsworth, who said to Yosemite as he struck him, "I am going to give you something to remember me by." Plaintiff thereupon asked Yosemite, "Why don't you file assault charges, and I'll testify for you." Plaintiff immediately received a blow from Ainsworth, whose wristwatch fell to the ground. Yosemite fled. Plaintiff attempted to retrieve the watch, when he was struck again. Upon announcement by the waitress that the police were on the way, Ainsworth drove off with his friend. The police arrived two or three minutes later, plaintiff testified. The evidence shows they were called at 11:00 P.M. Plaintiff testified he had arrived approximately between 10:30 and 10:45.
Plaintiff testified that when he stepped from his car he knew he was "getting out between two cars where some boys were getting ready to start a fight", and he "knew there was a risk that he would get hit"; that no one had said anything to him until he stepped out and initiated a conversation; that he knew if he interjected himself "into other peoples' quarrels you run the danger and risk of being involved in it yourself", and appreciated and knew the danger. He had no fear for the safety of himself or his wife. It was stipulated that "the danger that he might be struck by one of the participants at the time the argument took place on the outside of his car was known to and appreciated by plaintiff, and he voluntarily exposed himself to such danger."
The jury found defendant's manager failed to call the police prior to the time plaintiff was struck, which was negligence *142 and a proximate cause. It also found that plaintiff acted as a reasonably prudent man in voluntarily intervening in the argument.
There is evidence from which it may be deduced that defendant's manager knew the two men were fighting before plaintiff drove in, and that he did not then call the police. He testified the fighting stopped. There is evidence that the manager was preparing to call a wrecker to have a car which was left on the parking area removed when the waitress notified him of the fight at plaintiff's car, and that he then called the police as soon as the telephone was available. Plaintiff estimated he was hit "at least ten minutes before 11" P.M., when the police received the manager's call.
Plaintiff's contentions are that judgment non obstante veredicto was improper because his voluntarily encountering a danger known and appreciated does not preclude his recovery since he was motivated by humanitarian impulses in attempting to assist Yosemite, and the jury found he acted as a reasonably prudent person. He says the "no duty" and volenti doctrines discussed in Halepeska v. Callihan Interests, Inc., Tex. Sup., 371 S.W.2d 368, are made inapplicable because he was engaged in rescue effort, which he urges as an exception to the Halepeska non-liability rules.
As the rescue doctrine may relate to and affect defendant's liability, however, it is essential that the hazardous situation of the person toward whom plaintiff's rescue efforts are directed result from breach of a duty defendant owes to the one sought to be rescued by plaintiff. American Law Inst., Restatement, Torts, Sec. 893.
In this case Yosemite, the person plaintiff now says he was attempting to rescue, was not an invitee on defendant's premises. He was not a customer. He and a friend were going to another town to see some girls. The boys met at the drive-in parking lot where the friend left his car during the trip taken in Yosemite's car. They returned about 10:15 or 10:20 to get the car. As his friend started to get out of Yosemite's car, the latter found Ainsworth waiting for him and the fight ensued.
Yosemite occupied no better status toward defendant than that of a licensee to whom defendant owed no duty to prevent assaults by third persons for reasons personal to them. See Denison Light & Power Co. v. Patton, 105 Tex. 621, 154 S.W. 540, 45 L.R.A.,N.S., 303; Gulf Refining Co. v. Beane, 133 Tex. 157, 127 S.W.2d 169; Texas Cities Gas Co. v. Dickens, 140 Tex. 433, 168 S.W.2d 208; Carlisle v. J. Weingarten, Inc., 137 Tex. 220, 152 S.W.2d 1073; Hernandez v. Heldenfels, Tex.Sup., 374 S.W.2d 196. Plaintiff's attempted rescue of Yosemite, therefore, did not constitute a justification which affected absence of defendant's duty to plaintiff.
In our opinion, recovery is barred because defendant owed plaintiff no duty, the danger being fully known and appreciated. Plaintiff's recovery is barred also because he deliberately and voluntarily exposed himself to the danger so known and appreciated, as a result of an intelligent choice; and there was no justification in law which would excuse his conduct barring recovery under the doctrine of volenti non fit injuria. Halepeska v. Callihan Interests, Inc. (Tex.Sup.1963) 371 S.W.2d 368, 378-380.
The judgment of the trial court was required for another reason: Defendant's failure to call the police was not a proximate cause of plaintiff's injuries; the element of causation is absent.
Although others were seated in cars in proximity to plaintiff, none got out or became involved, and no one else got hit. The participants had not spoken to plaintiff, and there is nothing to indicate they were aware of his presence. Plaintiff knew police officers were not present; he had warned that someone "would call" them if a fight ensued. As plaintiff concedes, his intervention in the quarrel precipitated his involvement in the affray. He anticipated *143 the result. It was directly caused by his assumption of the role of intercessor and mediator which he knew was likely to provoke the combatants to injure him, and which he admits by his testimony would not have occurred but for his intercession. Without this moving and efficient cause the injury would not have occurred.
The judgment is affirmed.
|
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|
219 F.3d 930 (9th Cir. 2000)
REX K. DEGEORGE, Petitioner,v.UNITED STATES DISTRICT COURT FORTHE CENTRAL DISTRICT OF CALIFORNIA, Respondent, UNITED STATES OF AMERICA, Real Party in Interest.
No. 99-71446
Office of the Circuit Executive
U.S. Court of Appeals for the Ninth Circuit
Argued and Submitted March 6, 2000--Pasadena, CaliforniaFiled July 18, 2000
[Copyrighted Material Omitted][Copyrighted Material Omitted]
Richard Marmaro, McCambridge, Deixler & Marmaro, LLP, Los Angeles, California, for the petitioner.
David C. Marcus and Eileen M. Decker, Assistant United States Attorneys, Criminal Division, Los Angeles, California, for the real party in interest.
Appeal from the United States District Court for the Central District of California, Lourdes G. Baird, District Judge, Presiding; D.C. No. CR-99-38-LGB
Before: J. Clifford Wallace, Harry Pregerson, and Sidney R. Thomas, Circuit Judges.
WALLACE, Circuit Judge:
1
Rex K. DeGeorge petitions this court for a writ of mandamus commanding the United States District Court for the Central District of California to (1) vacate its order denying DeGeorge's motion to dismiss certain counts for which he has been indicted as time barred, and (2) enter an order dismissing those counts. We have jurisdiction pursuant to the All Writs Act, 28 U.S.C. S 1651. Because DeGeorge's case does not meet the strict prerequisites for extraordinary relief, we deny his petition.
2
* In January 1999, a federal grand jury returned a fourteen-count indictment charging DeGeorge with various federal crimes related to his participation in an alleged insurance fraud scheme. In late 1992 and early 1993, DeGeorge and a partner purportedly purchased a 76-foot motor yacht in Italy, artificially inflated its value through sham sales and purchases, insured it at the inflated value, and attempted to collect insurance proceeds after scuttling it on its maiden voyage from Italy. In April 1993, the insurer filed a declaratory relief action in the Central District Court of California seeking to rescind the policy and avoid payment. After extensive discovery, the district court alerted the United States Attorney about a possible perjury investigation. Eventually, the district court rescinded the policy and entered judgment for the insurer. Cigna Prop. & Cas. Ins. Co. v. Polaris Pictures Corp., 1997 WL 382108 (C.D. Cal. Feb. 20, 1997), aff'd, 159 F.3d 412 (9th Cir. 1998), cert. denied, 120 S. Ct. 53 (1999).
3
An Assistant United States Attorney investigated the perjury claim for a brief time before resigning. The matter was reassigned in April 1997 to another Assistant United States Attorney, who investigated the perjury claim as well as the alleged conduct surrounding the yacht's sinking. On August 18, 1997, as part of his investigation, the Assistant United States Attorney made a formal request to the Italian government for relevant documentary evidence and for assistance in obtaining interviews with eight witnesses in Italy who allegedly had first-hand information. A grand jury subpoena was issued on August 25, 1997, to one of the insurer's attorneys, ordering all documents from the civil case to be provided to the government by October 7, 1997. Most critical to DeGeorge's petition for a writ of mandamus, on August 26, 1997, the Assistant United States Attorney filed an ex parte, in camera application, pursuant to 18 U.S.C. S 3292, for an order suspending the running of the statute of limitations for any federal offenses related to DeGeorge's alleged conduct pending the government's foreign evidence request. A district court judge granted the section 3292 request on September 3, 1997, suspending the statute of limitations period as of August 18, 1997, the date of the foreign evidence request.
4
After DeGeorge was indicted, his case was assigned to a different district court judge than the one who made the section 3292 order. DeGeorge filed a motion to dismiss, arguing that the section 3292 order was invalid, that counts one through twelve of the indictment were time barred or otherwise defective, and that they should therefore be dismissed. The district court denied the motion. It is the district court's denial of DeGeorge's motion to dismiss that he challenges in this petition for a writ of mandamus.
II
5
A writ of mandamus is "an extraordinary or drastic remedy," Calderon v. United States Dist. Court , 163 F.3d 530, 534 (9th Cir. 1998) (en banc) (internal quotation omitted), used "only to confine an inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so." Will v. United States, 389 U.S. 90, 95 (1967) (internal quotation omitted). The petitioner has the burden to establish "that its right to issuance of the writ is clear and indisputable." Bankers Life & Cas. Co. v. Holland, 346 U.S. 379, 384 (1953) (internal quotation omitted). We typically examine five factors, first enumerated in Bauman v. United States District Court, 557 F.2d 650 (9th Cir. 1977), to evaluate whether a petitioner carries its burden:
6
(1) The party seeking the writ has no other adequate means, such as a direct appeal, to attain the relief he or she desires. (2) The petitioner will be damaged or prejudiced in a way not correctable on appeal . . . . (3) The district court's order is clearly erroneous as a matter of law. (4) The district court's order is an oft-repeated error, or manifests a persistent disregard of the federal rules. (5) The district court's order raises new and important problems, or issues of law of first impression.
7
Id. at 654-55 (citations omitted). The Bauman factors are "guidelines," id. at 655, to be "weighed together, as is appropriate, based on the facts of the individual case. " Calderon, 163 F.3d at 534. Usually, "the absence of factor three -clear error as a matter of law -will always defeat a petition for mandamus. . . . [F]actors one and two usually travel together, while factors four and five seldom do." Id. (citations omitted).
A.
8
We first examine whether DeGeorge has any other adequate means, such as direct appeal, to attain the relief he seeks, which is the dismissal of counts one through twelve of his indictment as time barred. We are guided in this issueby United States v. Rossman, 940 F.2d 535, 536 (9th Cir. 1991) (per curiam), which held that the denial of a motion to dismiss an indictment as time barred was not a final order appealable pursuant to 28 U.S.C. S 1291, or an interlocutory order appropriate for immediate review pursuant to Abney v. United States, 431 U.S. 651, 656-58 (1977). It is implicit in Rossman, and the decisions of the Third and Sixth Circuits upon which it relies, that the denial of a motion to dismiss an indictment as time barred may be reviewed on direct appeal after trial. See Rossman, 940 F.2d at 536, citing United States v. Davis, 873 F.2d 900, 908-09 (6th Cir. 1989), and United States v. Levine, 658 F.2d 113, 126 (3d Cir. 1981). Since direct appeal is available to DeGeorge for obtaining the relief he seeks, this factor weighs against granting mandamus.
9
DeGeorge, citing Credit Suisse v. United States District Court, 130 F.3d 1342, 1345-46 (9th Cir. 1997), argues that since the denial of his motion to dismiss is not immediately appealable, he is entitled to mandamus relief. In that case, we issued a writ of mandamus compelling the district court to vacate its denial of a motion to dismiss and also to dismiss the action. In so doing, we did state that "immediate review of the denial of the[ ] motion to dismiss" was not available. Id. at 1346. However, a careful reading of Credit Suisse confirms that we granted the writ only after consideration of other relevant Bauman factors that weighed heavily in favor of granting the writ -specifically, "severe prejudice that could not be remedied on direct appeal," id., and a clear error of law. Id. at 1346-48. A careful reading of Credit Suisse demonstrates that it does not stand for the proposition that the first Bauman factor is always satisfied when a motion to dismiss is denied because that order is not immediately appealable. The Credit Suisse analysis of the first Bauman test is the exception, not the rule, because direct appeal after trial, as opposed to immediate review, is the typically adequate means of review. Bauman, 557 F.2d at 654, 656. If writs of mandamus could be obtained merely because an order was not immediately appealable, as DeGeorge argues, mandamus would eviscerate the statutory scheme established by Congress to "strictly circumscrib[e] piecemeal appeal," Bankers Life, 346 U.S. at 383, citing 28 U.S.C. SS 1291, 1292, and mandamus would "become a substitute for the normal appellate process. " Calderon, 163 F.3d at 534, citing Kerr v. United States District Court, 426 U.S. 394, 402 (1976), and Bankers Life, 346 U.S. at 383. We therefore disagree with DeGeorge's argument, and hold that direct appeal is an adequate means for him to obtain the relief he seeks. Thus, the first Bauman factor weighs against DeGeorge.
B.
10
We next address whether DeGeorge will suffer damage or prejudice that cannot be corrected on direct appeal. This factor is closely related to the preceding one. Bauman, 557 F.2d at 654. A mandamus petitioner "must demonstrate some burden . . . other than the mere cost and delay that are the regrettable, yet normal, features of our imperfect legal system." Calderon, 163 F.3d at 535. Prejudicial harm serious enough to require mandamus relief includes situations in which one's "claim will obviously be moot by the time an appeal is possible," or in which one "will not have the ability to appeal." Id.
11
DeGeorge's prejudice argument involves his detention pending trial, without bail, because the district court found him to be "a substantial flight risk." DeGeorge argues, without citing any supporting legal authority, that the district court's denial of his motion to dismiss prejudices him because (1) his detention aggravates health problems and inhibits his relationship with his wife and newborn child, and (2) he will incur substantial legal expenses and delay from trial and appeal.
12
This is not the type of prejudice that is relevant in determining mandamus relief. Being forced to stand trial despite the running of the statute of limitations on certain charges is not inherently prejudicial: " `The limitations statute . . . creates a safeguard against unfair convictions arising from delinquent prosecutions but does not entail a right to be free from trial . . . .' " Rossman, 940 F.2d at 536 (emphasis added), quoting Levine, 658 F.2d at 126. Further, "unnecessary cost and delay" resulting from "an erroneous ruling of the district court," Calderon, 163 F.3d at 534, are not prejudice correctable through use of the writ of mandamus. Id. at 534-35 (citations omitted); see also Bankers Life, 346 U.S. at 383. While we are sympathetic to the hardships that DeGeorge's detention pending trial poses to his personal and family life, these hardships are not the type that we weigh in determining whether mandamus relief should be granted. Cf. Calderon, 163 F.3d at 535 (describing prejudicial situations as ones actually limiting petitioner's ability to bring direct appeal later). Thus, the second Bauman factor weighs against DeGeorge.
C.
13
We next consider whether the district court's denial of DeGeorge's motion to dismiss was clearly erroneous. The absence of clear error is usually fatal to a petition for writ of mandamus. Id. at 534. In a case like this one involving statutory interpretation, the clearly erroneous standard is met only if we have a definite and firm conviction that the district court's interpretation of the statute was incorrect. See In re Cement Antitrust Litig., 688 F.2d 1297, 1306 (9th Cir. 1982). If, on the other hand, the question is a close one, and we are "not firmly convinced, either way, as to what the correct result should be," we cannot hold the district court's interpretation to be clearly erroneous, and thus we cannot issue the writ, even though the district court's interpretation might be overruled later on direct appeal. See id., citing Bauman, 557 F.2d at 660.
14
The district court denied DeGeorge's motion to dismiss, holding that his charges were not time barred because the previous order suspending the statute of limitations on his charges complied with 18 U.S.C. S 3292. It is undisputed that, but for the section 3292 suspension order, counts one through twelve of DeGeorge's indictment would be time barred. There is a five year limit on the charges, 18 U.S.C. S 3282; the factual events surrounding those charges occurred in late 1992 and early 1993; and the indictment was returned in January 1999. DeGeorge challenges the district court's interpretation of section 3292, arguing that the statute: (1) disallows ex parte, in camera applications; (2) requires that the foreign evidence sought be documentary, unobtainable in the United States, and essential to bringing charges against the target of the investigation; and (3) mandates that a grand jury actually be impaneled and hearing evidence on the target's offenses before the statute of limitations is suspended.
15
Before analyzing each of these arguments, we first review the basic principles of statutory construction:
16
The purpose of statutory construction is to discern the intent of Congress in enacting a particular statute. The first step in ascertaining congressional intent is to look to the plain language of the statute. To determine the plain meaning of a particular statutory provision, and thus congressional intent, the court looks to the entire statutory scheme. If the statute uses a term which it does not define, the court gives that term its ordinary meaning.
17
The plain meaning of the statute controls, and courts will look no further, unless its application leads to unreasonable or impracticable results. If the statute is ambiguous -and only then -courts may look to its legislative history for evidence of congressional intent.
18
United States v. Daas, 198 F.3d 1167, 1174 (9th Cir. 1999) (citations omitted). We thus start with the language of the statute itself.
Section 3292 states:
19
Upon application of the United States, filed before return of an indictment, indicating that evidence of an offense is in a foreign country, the district court before which a grand jury is impaneled to investigate the offense shall suspend the running of the statute of limitations for the offense if the court finds by a preponderance of the evidence that an official request has been made for such evidence and that it reasonably appears, or reasonably appeared at the time the request was made, that such evidence is, or was, in such foreign country.
20
18 U.S.C. S 3292(a)(1).
1.
21
DeGeorge first argues that the government's section 3292 application was invalid because it was ex parte and in camera. However, there is no basis in the statute for such an argument. Section 3292(a)(1) refers to the government making an "application," not a "noticed application." 18 U.S.C. S 3292(a)(1). Nowhere in the section does it state that the party whose statute of limitation is being suspended is entitled to notice or a hearing.
22
DeGeorge argues that because section 3292(a)(1) refers to the court making certain findings "by a preponderance of the evidence," he was entitled to appear at a section 3292 hearing and present evidence. However, to follow that interpretation would be to ignore the traditionally non-adversarial and secret nature of grand jury investigations. See, e.g., United States v. Calandra, 414 U.S. 338, 343-44 (1974). Rather, we read the phrase "if the court finds by a preponderance of the evidence" in section 3292(a)(1) to mean that the government has some burden to establish, as opposed to being able merely to assert without support, that the foreign evidence it seeks meets the section's requirements.
23
DeGeorge cites one district court opinion denying a section 3292 application because it was ex parte. In re Grand Jury Investigation, 3 F. Supp. 2d 82 (D. Mass. 1998). However, this opinion is not precedential and, as the district court stated, another district court has implicitly allowed an ex parte application. Id. at 83, citing United States v. Neill, 940 F. Supp. 332, 335 (D.D.C. 1996), vacated on other grounds , 952 F. Supp. 831, 831 (D.D.C. 1996). Finally, DeGeorge cites United States v. Ordonez, 722 F.2d 530, 540 (9th Cir. 1983), and In re Intermagnetics America, Inc., 101 B.R. 191, 192-93 (C.D. Cal. 1989), which discuss the hazards of ex parte and in camera proceedings. However, neither of these cases is on point as they do not involve grand jury proceedings which, as Calandra makes clear, 414 U.S. at 343-44, are unique proceedings in the criminal justice system. Thus, there is no clear error in this aspect of the district court's order.
2.
24
DeGeorge next argues that the word "evidence" in section 3292(a)(1) means admissible, documentary evidence that is unobtainable in the United States and that is essential to bringing charges against the target of the investigation. He argues that the government improperly used the section 3292 application as a dilatory tactic because much of the evidence it sought was obtainable in the United States from the discovery taken in the civil declaratory judgment case. However, DeGeorge's interpretation of "evidence" in section 3292(a)(1) is entirely without textual support in the statute or in the reality of grand jury investigations.
25
Section 3292(a)(1) does not define "evidence"; thus, we interpret it according to "its ordinary meaning. " Daas, 198 F.3d at 1174. The ordinary definition of evidence is broad: "Something (including testimony, documents and tangible objects) that tendsto prove or disprove the existence of an alleged fact." Black's Law Dictionary 576 (7th ed. 1999). "Evidence" in the context of a grand jury investigation is especially broad, encompassing many types of evidence inadmissible at trial:
26
The grand jury may compel the production of evidence or the testimony of witnesses as it considers appropriate, and its operation generally is unrestrained by the technical procedural and evidentiary rules governing the conduct of criminal trials. It is a grand inquest, a body with powers of investigation and inquisition, the scope of whose inquiries is not to be limited narrowly by questions of propriety or forecasts of the probable result of the investigation, or by doubts whether any particular individual will be found properly subject to an accusation of crime.
27
Calandra, 414 U.S. at 343 (internal quotation omitted). Congress easily could have limited the type of evidence the government could seek pursuant to section 3292 in the manner DeGeorge suggests above, but it did not. The only limits Congress imposed on the type of evidence sought pursuant to a section 3292 application were that the evidence be "of an offense" and that it "reasonably appear[ ] . . . that such evidence is . . . in [a] foreign country." 18 U.S.C. S 3292(a)(1).
28
DeGeorge also argues for limitations on section 3292 applications. DeGeorge argues that "evidence" means documentary evidence, citing legislative history that he argues shows Congress's intent to limiting section 3292 applications to situations in which the government is seeking foreign business records. However, because Congress used the unlimited word "evidence" in section 3292(a)(1), not "foreign records," this aspect of the statute is plain, and we disregard DeGeorge's legislative history argument. Ratzlaf v. United States, 510 U.S. 135, 147-48 (1994) ("[W]e do not resort to legislative history to cloud a statutory text that is clear."); Daas, 198 F.3d at 1174 (same). DeGeorge also argues that, unlike this case, every other decided section 3292 case involves requests for documentary evidence alone; however, that is incorrect. See United States v. Meador, 138 F.3d 986, 989 (5th Cir. 1998) (indicating government sought interviews in addition to documents). In any event, it is clear from the record that the government's section 3292 application indicated that it sought documentary evidence, as well as testimonial evidence, in its request to Italian authorities.
29
DeGeorge next argues that "evidence" in section 3292(a)(1) means evidence that would be admissible at trial. He cites United States v. Bischel, 61 F.3d 1429, 1433 (9th Cir. 1995), contending that our statement " `Evidence of an offense' is essentially worthless unless admissible " is the holding of the case. That is not the holding in Bischel; that case addressed the interpretation of the phrase "final action" in section 3292. Id. at 1434 ("We therefore conclude that `final action' for purposes of S 3292 means. . . ."). The statement upon which DeGeorge relies is thus not a holding but dicta and does not necessarily apply in other contexts. The district court was not clearly erroneous in rejecting the theory that section 3292 may only be used when the government seeks foreign evidence that is admissible at trial.
30
DeGeorge asserts that any evidence the government seeks must be essential to bringing charges against the target of the government's investigation. The only support he offers for this interpretation is legislative history, which we disregard because, as we stated earlier, of the plain language of the statute. The statute clearly states that the government need only establish that "evidence of an offense," not evidence essential to bringing charges on an offense, is "in [a] foreign country." 18 U.S.C. S 3292(a)(1). DeGeorge's proposed interpretation of the statute would require district courts to make a determination of the value of the foreign evidence the government seeks -to second-guess the government'sinvestigation -which the statute simply does not contemplate.
31
Finally, DeGeorge argues that the foreign evidence the government seeks to qualify for a section 3292 suspension must be unavailable in the United States. He argues that all the evidence the government used in its eventual grand jury proceeding against him was available in the discovery records from the civil trial, filed in the same building in which the United States Attorney's office is located, making the section 3292 suspension request an abusive stalling tactic to allow the government more time to investigate DeGeorge's alleged crimes. The record indicates, however, that the government did seek evidence that was unavailable in the United States. For example, while transcripts of the depositions of two persons the government sought to question in Italy were available in the United States as part of the record in the civil suit, there were six other individuals the government sought to question who had not been previously deposed.
32
The district court's interpretation of "evidence" for purposes of section 3292(a)(1) was not clearly erroneous.
3.
33
DeGeorge finally argues that section 3292(a)(1) requires that a specific grand jury be investigating the defendant's underlying offenses before the district court may suspend one's statute of limitations. It is factually undisputed that the Assistant United States Attorney investigating DeGeorge's alleged offenses had not presented evidence regarding those offenses before one of the several grand juries impaneled at the time in the Central District of California before making the section 3292 application, but that one day before making the section 3292 application, he served a grand jury subpoena on one of the attorneys for the insurer in the civil trial for documentary evidence related to that trial.
34
In support of his argument, DeGeorge points to the following language in section 3292(a)(1): "Upon application of the United States . . . , the district court before which a grand jury is impaneled to investigate the offense shall suspend the running of the statute of limitations for the offense .. . ." 18 U.S.C. S 3292(a)(1) (emphasis added). The district court rejected DeGeorge's argument, stating that there is nothing "in the statute or the legislative history, for that matter, that requires that a grand jury be impaneled and investigating the offense at the time that a [section] 3292 request is made." The district court stated that it was sufficient that grand juries were impaneled in the Central District of California at the time, and that a grand jury subpoena had been issued before the section 3292 request was made.
35
No case has been cited to us, nor have we found one, deciding this issue. It appears that this is an issue of first impression for the federal courts. There is scant case law interpreting section 3292, and the opinions that exist interpret other aspects of that section. See, e.g., Meador, 138 F.3d 992 (interpreting "final action"); Bischel, 61 F.3d at 1434 (same); United States v. Miller, 830 F.2d 1073, 1076 (9th Cir. 1987) (holding section 3292 applies when suspension request made after government already obtained foreign evidence). One case, United States v. Neill, 952 F. Supp. 831, 833 (D.D.C. 1996), vacating 940 F. Supp. 332 (D.D.C. 1996), states: "The government can only request that statutes of limitation be tolled for offenses under investigation by the grand jury . . . ." However, it is clear that this statement was neither Neill's central holding nor essential to its disposition, and is thus dicta.
36
The use of the phrase "the district court before which a grand jury is impaneled to investigate the offense " in section 3292(a)(1) is ambiguous. A statute is ambiguous if it "gives rise to more than one reasonable interpretation. " A-Z Int'l v. Phillips, 179 F.3d 1187, 1192 (9th Cir.1999). The phrase could be read merely as a venue-type provision, indicating Congress's intent was only to limit which court could issue the order suspending the statute of limitations. This is the district court's interpretation of the statute, and it is entirely plausible. On the other hand, section 3292(a)(1) might be held to require implicitly that before an application is brought to suspend the statute of limitations for the offense, a grand jury already be impaneled to investigate an offense. This is also a reasonable interpretation, because the phrase "a grand jury is impaneled to investigate the offense" is phrased in the active and present voice, suggesting an implicit requirement.
37
This ambiguous phrase is not clarified by looking "to the entire statutory scheme" surrounding statutes of limitations and grand juries. Daas, 198 F.3d at 1174. The United States Code sections concerning statutes of limitations, 18 U.S.C. SS 3281-95, and grand juries, 18 U.S.C. SS 3321-22; Fed. R. Crim. P. 6, do not contain language similar to the phrase "the district court before which a grand jury is impaneled to investigate the offense" in section 3292(a)(1).
38
In light of this ambiguity, we turn to the legislative history. Daas, 198 F.3d at 1174. Only House Report No. 98907 discusses section 3292(a)(1). The report states in part:
39
Subsection (a)(1) of new section 3292 authorizes a Federal court, upon application of a Federal prosecutor that is made before the return of an indictment and that indicates that evidence of an offense is located in a foreign country, to suspend the running of the applicable statute of limitation. If the court finds by a preponderance of the evidence that (1) an official request has been made for the evidence and (2) it appears (or reasonably appeared at the time the official request was made) that the evidence is (or was) in that country, the court must order such suspension.
40
H. Rep. No. 98-907, at 7 (1984), reprinted in 1984 U.S.C.C.A.N. 3578, 3584. At the very least, this scant legislative history does not contradict the district court's interpretation.
41
The district court faced a difficult statutory interpretation question. Because this was a question of first impression regarding an ambiguous statute, and because the limited legislative history did not compel an interpretation different than the district court's, we cannot hold that the district court clearly erred. The third Bauman factor therefore weighs against DeGeorge.
D.
42
We finally consider the last Bauman factors, which are usually alternative -if one is present, the other probably will not be. Calderon, 163 F.3d at 534. DeGeorge only argues that his case raises new and important problems or issues of law of first impression; he does not argue that the court's order perpetuates an oft-repeated error or manifests a persistent disregard of the federal rules.
43
We have already stated that DeGeorge's petition raises issues of first impression. They do not, however, appear to be particularly important or pressing to the courts as a whole, because no court in the fifteen years since section 3292(a)(1) became effective has been forced to address them. Even if they were important issues, we would not issue a writ of mandamus in this case because the district court's decision was not clearly erroneous. See id. (stating absence of clear error usually fatal to petition for writ of mandamus). Having failed to show that he has a "clear and indisputable " right to the writ, DeGeorge's petition fails. Bankers Life , 346 U.S. at 384.
III
44
DeGeorge also petitions, on a separate ground, for a writ of mandamus concerning the district court's denial of his motion to dismiss count three of the indictment,alleging mail fraud in violation of 18 U.S.C. S 1341. DeGeorge argues that the district court should have granted his motion to dismiss because the document the indictment avers he mailed was sent after the alleged insurance scheme was complete.
45
Even without examining whether the district court's decision was clearly erroneous as a matter of law, it is clear that the other Bauman factors weigh heavily against DeGeorge: he can raise this issue on direct appeal, he is not prejudiced by having to defend himself on count three, and the district court's decision does not involve an oft repeated error or an important issue of first impression.
46
Because DeGeorge has not carried his burden to establish "that [his] right to issuance of the writ is clear and indisputable," id., we deny it.
47
PETITION DENIED.
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ALD-068 NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 10-3380
___________
MARCUS DUKES,
Appellant
v.
CATHERINE E. PAPPAS, Senior Trial Counselor, Securities and Exchange
Commission; AMY GREER, (Securities and Exchange Commission); KATY CODY,
(Securities and Exchange Commission); KEVIN DELACY, (Securities and Exchange
Commission); LUCY CARDWELL, Assistant Attorney General of Maryland
____________________________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 09-3869)
District Judge: Honorable William H. Yohn Jr.
____________________________________
Submitted for Possible Dismissal Pursuant to 28 U.S.C. § 1915(e)(2)(B)
or Summary Action Pursuant to Third Circuit LAR 27.4 and I.O.P. 10.6
December 16, 2010
Before: SCIRICA, HARDIMAN and VANASKIE, Circuit Judges
(Filed: December 28, 2010)
_________
OPINION OF THE COURT
_________
PER CURIAM.
Pro se appellant Marcus Dukes appeals the District Court’s dismissal of his
complaint under 28 U.S.C. § 1915(e). We have jurisdiction pursuant to 28 U.S.C. § 1291
and exercise plenary review over the District Court’s order. See Allah v. Seiverling, 229
F.3d 220, 223 (3d Cir. 2000). Because this appeal presents no substantial question, we
will summarily affirm the District Court’s judgment. See 3d Cir. L.A.R. 27.4; I.O.P.
10.6.
Dukes co-founded the Financial Warfare Club and Covenant EcoNet, Inc., which
sold memberships in a purported investment club to African Americans. The FBI and
SEC investigated Dukes and ultimately instituted civil and criminal actions against him.
The criminal action proceeded first, and Dukes was convicted of mail fraud and money
laundering and sentenced to 108 months’ imprisonment. Dukes’s attempts to challenge
the conviction — both on appeal and in a proceeding under 28 U.S.C. § 2255 — were
unsuccessful. At the conclusion of the criminal action, the civil action resumed, and the
United States District Court for the Eastern District of Pennsylvania granted summary
judgment to the SEC on its claims that Dukes committed fraud and violated the Securities
Act.
Dukes then filed this action. In his second amended complaint, which is at issue in
this appeal,1 he asserted claims arising under 42 U.S.C. § 1983 and Bivens v. Six
Unknown Named Agents, 403 U.S. 388 (1971). More specifically, he raised two claims:
(1) several attorneys and an accountant employed by the SEC (“the SEC defendants”)
1
It is unclear whether Dukes continues to assert claims that he included in his first
amended complaint but omitted from his second amended complaint. To the extent that
those claims have not been waived, see United States ex rel. Atkinson v. Pa. Shipbuilding
Co., 473 F.3d 506, 516 (3d Cir. 2007), we conclude, for essentially the reasons provided
by the District Court, that the claims fail as a matter of law.
2
created a spreadsheet for the criminal prosecution cataloging Dukes’s companies’
financial transactions and violated his rights under Brady v. Maryland, 373 U.S. 83
(1963), by refusing to disclose the spreadsheet to the prosecution or Dukes; and (2) an
SEC defendant and Maryland’s assistant attorney general made and continue to make
defamatory statements about Dukes’s businesses, thus undermining his efforts to recover
lost money.2
The District Court permitted Dukes to proceed in forma pauperis, but then rejected
both claims and dismissed the complaint sua sponte pursuant to 28 U.S.C. § 1915(e). The
Court concluded that any amendment would be futile and thus dismissed the complaint
without providing leave to amend.
We discern no error in the District Court’s ruling that Dukes’s Brady claim fails.
While Brady claims are typically directed against prosecutors, we have suggested that
other government actors may be liable for failing to disclose exculpatory information to
the prosecutor, see Yarris v. County of Delaware, 465 F.3d 129, 141 (3d Cir. 2006), and
we assume here that the SEC defendants represent a proper target. Nevertheless, a
meritorious Brady claim, by definition, implies the invalidity of the attendant criminal
conviction. See Strickler v. Greene, 527 U.S. 263, 281 (1999) (“[T]here is never a real
‘Brady violation’ unless the nondisclosure was so serious that there is a reasonable
probability that the suppressed evidence would have produced a different verdict.”).
2
Dukes’s claims against the SEC defendants are properly brought under Bivens, while his
claim against Maryland’s assistant attorney general is properly brought under § 1983.
See Lora-Pena v. Fed. Bureau of Investigation, 529 F.3d 503, 504 n.1 (3d Cir. 2008). The
legal analysis detailed below applies with equal force to both species of claims.
3
Dukes’s Brady claim is therefore barred by the rule of Heck v. Humphrey, 512 U.S. 477
(1994). See, e.g., Amaker v. Weiner, 179 F.3d 48, 51 (2d Cir. 1999) (holding that Brady
claims implicate the validity of the resulting conviction and are thus barred by Heck).
Dukes seeks to avoid this result by arguing that while this spreadsheet would have
been helpful to him, further proceedings are necessary before it can be determined
whether its suppression was sufficiently prejudicial to call his criminal verdict into
question. However, this argument cuts both ways. If there is not a “reasonable
probability that his conviction or sentence would have been different had these materials
been disclosed,” then there has been no Brady violation, Strickler, 547 U.S. at 296, and
Dukes has failed to plead the underlying constitutional violation necessary to make out a
Bivens claim, see Bivens, 403 U.S. at 397. Accordingly, under either scenario, Dukes’s
claim cannot succeed.
We also affirm the District Court’s alternative holding that there was no Brady
violation because the information Dukes claims the government withheld was known by
and available to him. “[T]he rationale underlying Brady is not to supply a defendant with
all the evidence in the Government’s possession which might conceivably assist the
preparation of his defense, but to assure that the defendant will not be denied access to
exculpatory evidence only known to the Government.” United States v. Zackson, 6 F.3d
911, 918 (2d Cir. 1993) (internal quotation marks omitted, emphasis added). Therefore,
“Brady does not compel the government to furnish a defendant with information which he
4
already has or, with any reasonable diligence, he can obtain himself.” United States v.
Pelullo, 399 F.3d 197, 213 (3d Cir. 2005) (internal quotation marks omitted).
Dukes does not allege that he was unaware of or unable to obtain information
concerning the financial transactions cataloged in the spreadsheet; to the contrary, as the
District Court noted, in his criminal appeal he acknowledged that he had access to
relevant bank records before trial. See United States v. Dukes, 242 F. App’x 37, 49 (4th
Cir. 2007); see also United States v. Dixon, 132 F.3d 192, 199 (5th Cir. 1997) (no Brady
violation when government seized defendants’ financial records because defendants
either knew or should have known about this information). While Dukes may have found
it more convenient to work from the government’s spreadsheet than from the raw
financial information that he either already had or could have acquired with reasonable
diligence, Brady does not require the government “to facilitate the compilation of
exculpatory material that, with some industry, defense counsel could marshal on their
own.” United States v. Runyan, 290 F.3d 223, 246 (5th Cir. 2002).
We likewise agree with the District Court that Dukes’s defamation claim lacks
merit. “The Supreme Court has made clear that federal courts are not to view defamatory
acts as constitutional violations.” Boyanowski v. Capital Area Intermediate Unit, 215
F.3d 396, 400 (3d Cir. 2000). This bar applies even where the plaintiff claims that the
defamatory statement caused financial injury. See Kelly v. Borough of Sayreville, 107
5
F.3d 1073, 1078 (3d Cir. 1997). Therefore, Dukes’s defamation claim fails as a matter of
law.3
Finally, we are satisfied that further amendment to Dukes’s complaint would be futile,
and therefore conclude that the District Court properly dismissed the complaint without
providing leave to amend. See Grayson v. Mayview State Hosp., 293 F.3d 103, 114 (3d
Cir. 2002). We will thus summarily affirm the District Court’s order dismissing Dukes’s
second amended complaint. See 3d Cir. L.A.R. 27.4; I.O.P. 10.6.
3
To the extent that Dukes asserts claims against SEC employees Kevin Delacey and Katy
Cody for creating false evidence for use at his 2005 criminal trial, these claims are also
barred by Heck. See, e.g., Perez v. Sifel, 57 F.3d 503, 505 (7th Cir. 1995). Even if they
were not, the claims would still fail because, as the District Court correctly held, they are
barred by the applicable statute of limitations.
6
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932 F.Supp. 210 (1996)
David and Kathy RITER, individually and on behalf of all others similarly situated, Plaintiff,
v.
MOSS & BLOOMBERG, LTD., an Illinois Professional Corporation, Defendant.
No. 96 C 2001.
United States District Court, N.D. Illinois, Eastern Division.
June 24, 1996.
*211 James S. Shedden, David J. Philipps, Catherine Lee Gemrich, Michael S. Hilicki, Beeler, Schad & Diamond, P.C., Chicago, IL, for David Riter, Kathy Riter.
Daniel Francis Konicek, Connelly, Mustes, Palmer & Schroeder, Geneva, IL, for Moss & Bloomberg, Ltd.
OPINION AND ORDER
NORGLE, District Judge:
Before the court is Defendant Moss & Bloomberg's ("Defendant") Motion to Dismiss the Complaint of Plaintiffs David and Kathy Riter ("Riters"). The only issue relevant to this motion is whether condominium association fees are "debt" for purposes of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-16920 (1988 & Supp. V) ("FDCPA").
The Riters filed their Complaint alleging that Defendant violated certain provisions of the FDCPA in the process of collecting condominium fees. The Riters assert that this court has subject matter jurisdiction over their claim pursuant to § 1692(k)(d) of the FDCPA. Defendants move under Federal Rule of Civil Procedure 12(h)(3), arguing that the court lacks such jurisdiction.
Congress created the FDCPA to protect consumers from unfair, deceptive, and harassing debt collection practices. 15 U.S.C. § 1629(e). However, this protection extends only to "debt" as defined by the FDCPA. That is:
Any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes ...
15 U.S.C. § 1692(a)(5).
Other courts in this district have had occasion to interpret this definition of debt. Debt
requires the offer or extension of credit to a consumer; an offer or extension of credit is a contractual transaction in which a consumer is offered or extended the right to acquire money, property, insurance, or services that are primarily for household purposes in which the consumer is permitted to defer payment.
Perez v. Slutsky, No. 94 C 6137, 1994 WL 698519, at * 2 (N.D.Ill. Dec. 12, 1994).
In Vosatka v. Wolin-Levin, Inc., No. 94 C 4129, 1995 WL 443950 (N.D.Ill. July 21, 1995), another court in this district addressed the exact issue presented by the instant case, i.e., whether condominium fees are "debt" within the definition of the FDCPA. The Vosatka court determined that they are not. The Vosatka court found that a condominium fee does not arise from a transaction, which is "an offer or extension of the right to acquire household-related property or services and to `defer payment' for them." Id. at * 3 (citing Zimmerman v. HBO Affiliate Group, 834 F.2d 1163, 1168-69 (3d Cir.1987)). A "transaction" occurs when one is given the opportunity to use a commodity or service now, and to pay later. Id. The deferred payments are "debt." Id. The Vosatka court found that a condominium fee, or assessment, works in reverse fashion by definition: payments are due prior to the time when communal goods and services are provided. Id. Thus, there is no extension of credit.
In addition, like taxes, condominium fees operate to provide communal goods and services which only indirectly benefit the payer. Id. at * 4. This remote benefit also suggests that condominium fees do not qualify as FDCPA debts. Id. Hence, the Vosatka court found that it lacked subject matter jurisdiction.
Other district courts have also found that condominium fees are not FDCPA debts. *212 See Azar v. Hayter, 874 F.Supp. 1314 (N.D.Fla.), aff'd Azar v. Hayter, 66 F.3d 342 (11th Cir.1995) (holding that condominium fees are not debt because the sums do not reflect deferred payments on prior benefits); Archer v. Beasley, No. 90-2576(CSF), 1991 WL 34889 (D.N.J. Mar. 5, 1991) (finding that condominium fees are not debt because they do not involve the extension of credit).
In response to Defendant's motion, the Riters argue that Vosatka, Azar, and Archer all base their holdings on the incorrect determination that the FDCPA requires an extension of credit. Citing Black's Law Dictionary, the Riters state that a transaction is an agreement which alters the legal relationship between parties, rather than an extension of credit. As such, the Riters contend that Congress did not intend to require the extension of credit when it sought to protect consumer "transactions" which benefit personal, family, or household purposes. Although this argument is not entirely unsound, the court declines to rely on Black's Law Dictionary for purposes of holding contrary to the trend in district courts.
The Riters also cite to an appellate case which found that debt for bankruptcy purposes includes condominium fees. See Matter of Rosteck, 899 F.2d 694, 696-97 (7th Cir.1990). "The court is neither required to disregard the definition from another statute, nor accept it as the one intended by Congress" for purposes of a second statute. Davis v. Coler, 601 F.Supp. 444, 451 (N.D.Ill. 1984), aff'd Watkins v. Blinzinger, 789 F.2d 474 (7th Cir.1986). Given the numerous distinctions between the purposes and operations of the bankruptcy and FDCPA statutes, the court declines to carry the bankruptcy definition of debt into the FDCPA.
Finally, the Riters cite to a Federal Trade Commission commentary which states that condominium fees are debts under the FDCPA. See Federal Trade Commission's Statements of General Policy or Interpretation Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed.Reg. 50097, 50102 (1988). Unfortunately, this commentary does not address the subsequent case law on this issue, and the court does not find it sufficiently persuasive.
In the instant case, the Riters attempt to state an FDCPA claim based on the collection of condominium fees. Although the Riters have raised good faith arguments in support of their disagreement with the relevant case law, their arguments have not persuaded the court to extend the protection of the FDCPA beyond that already recognized by other courts. Accordingly, this court also finds that condominium fees are not "debt" within the meaning of the FDCPA. As such, Defendant's motion to dismiss is granted.
IT IS SO ORDERED.
|
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FILED
NOT FOR PUBLICATION AUG 19 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 12-10322
Plaintiff - Appellee, D.C. No. 4:10-cr-01999-RCC
v.
MEMORANDUM *
CARLOS EDUARDO ROBLES-LOPEZ,
Defendant - Appellant.
Appeal from the United States District Court
for the District of Arizona
William F. Downes, District Judge, Presiding **
Submitted August 14, 2013 ***
Before: SCHROEDER, GRABER, and PAEZ, Circuit Judges.
Carlos Eduardo Robles-Lopez appeals from the district court’s judgment and
challenges the 51-month sentence imposed following his guilty-plea conviction for
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable William F. Downes, United States District Judge for
the District of Wyoming, sitting by designation.
***
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
possession with intent to distribute cocaine, in violation of 21 U.S.C. § 841(a)(1)
and (b)(1)(A)(ii)(II). Pursuant to Anders v. California, 386 U.S. 738 (1967),
Robles-Lopez’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 Robles-
Lopez the opportunity to file a pro se supplemental brief. No pro se supplemental
brief or answering brief has been filed.
Robles-Lopez has waived his right to appeal 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 the appeal. See id. at
988.
Counsel’s motion to withdraw is GRANTED.
DISMISSED.
2 12-10322
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636 F.2d 1182
UNITED STATES of America, Plaintiff-Appellee,v.C. E. HARRINGTON, Defendant-Appellant.
No. 80-1169.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted Aug. 13, 1980.Decided Dec. 22, 1980.As Amended on Denial of Rehearing and Rehearing En Banc Feb. 13, 1981.
Bernardo P. Velasco, Tucson, Ariz., for defendant-appellant.
Christopher L. Pickrell, Asst. U. S. Atty., Tucson, Ariz., argued for plaintiff-appellee; Gerald S. Frank, Asst. U. S. Atty., Tucson, Ariz., on brief.
Appeal from the United States District Court for the District of Arizona.
Before CHOY and FLETCHER, Circuit Judges, and EAST,* District Judge.
CHOY, Circuit Judge:
1
Harrington appeals his conviction on five counts of transporting illegal aliens in violation of 8 U.S.C. § 1324(a)(2). We affirm.
I. Facts
2
The area around Douglas, Arizona, is notorious as a smuggling region. On October 25, 1979 Border Patrol Agent Foley observed Harrington (a California resident) driving aimlessly around Douglas in a blue van that had been rented in Los Angeles. On December 1, 1979 Harrington, once again in Douglas, this time driving a white van with commercial license plates, was stopped by Customs Officer Jennings. The white van also had been rented from a Los Angeles agency. Jennings asked Harrington for his driver's license and to open the back of the van. A check of the license disclosed Harrington's prior drug record. The back of the van contained only a gas can. The tread on the white van's tires matched subsequently-discovered tracks left by a vehicle at a smuggling site. On December 2, 1979 a group of 14 illegal aliens were arrested at that same site. Three of the aliens told the arresting agent that they were supposed to be picked up by a van.
3
At the request of border patrol agents in Douglas, agents in Los Angeles periodically checked to determine whether Harrington had rented another van. On December 18, 1979, Los Angeles Agent Keating learned that Harrington had rented a white Dodge van that was to be returned on December 21, 1979.
4
On December 19, 1979 Harrington was seen driving the van in Douglas. When he rented a room at a motel, a border patrol agent rented the one next door. A Mexican male visited Harrington at 7:00 p. m. and 9:00 p. m. that night, and again at 4:15 a. m. the following morning. After the last visit Harrington quickly left the motel, left Douglas by a circuitous route, traveled to a known smuggling spot, and parked with his lights out. The agent watching Harrington saw no one else in the area. Harrington then drove to another alien pick-up site and parked with his parking lights on. Again no one was visible in that area.
5
Harrington then proceeded to Douglas and was met en route by a second vehicle which appeared to be the same vehicle driven earlier by the male visitor to Harrington's motel room. The two vehicles appeared to be traveling in tandem. Harrington returned to the motel and the other vehicle continued on toward the port of entry at Douglas.
6
When Harrington left the motel, he drove northwest on Highway 80. An officer observed that the van appeared to ride lower, to sway on turns, to bounce more on dips, and to struggle climbing a hill. At the request of the border patrol a Tombstone police officer stopped Harrington. Harrington got out of his van and met the officer at the rear of the vehicle. While the officer was talking with Harrington about exceeding the speed limit, Border Patrol Agent Escobedo told Harrington that he was an immigration officer and that he was going to check the van. Looking in the side window between the curtain and the door, Agent Escobedo saw a large number of people of Latin extraction inside. Seventeen illegal aliens were found in the van.
7
Harrington moved to suppress the evidence (i.e., the aliens) seized as a result of an allegedly unlawful stop. At the suppression hearing Harrington testified that no immigration officer spoke to him until after the van had been opened and he had been arrested. Harrington also testified that at the time of the seizure the van was not carrying a maximum load and, therefore, would not have swayed, bounced, or ridden significantly lower. The district court nonetheless denied the motion.
8
At trial the evidence of the events occurring December 18-20 was presented. Also, five of the aliens testified that they had paid a guide to lead them through the desert and to arrange a trip to Los Angeles. Some testified that a white van or truck was to pick them up and that when Harrington arrived at the pick-up spot, the guide briefly talked with him.
9
Harrington testified that he was en route to see a female friend in Texas, but stopped in Douglas to try to get some marijuana. He further testified that shortly after leaving Douglas, he stopped to pick up a couple who was hitchhiking. According to Harrington, the male hitchhiker threatened him with a knife and forced him to transport the aliens, telling him that the alien immediately behind him in the van also had a weapon.
10
On cross-examination the prosecutor asked Harrington whether he told the police officer who stopped his van about the man with the knife. Harrington responded that he had not.1 Defense counsel moved for a mistrial, but the district court found the questioning to be proper because of Harrington's testimony and, thus, denied the motion.
11
Harrington contends that the border patrol did not have founded suspicion to stop his van, that the border patrol did not have probable cause to arrest him, and that the cross-examination regarding Harrington's failure to tell the police officer about the alien with the weapon violated his constitutional rights.
II. Motion to Suppress
12
Where no findings of fact were made or requested, we will uphold a trial court's denial of a motion to suppress if there is a reasonable view of the evidence that will sustain it. United States v. Williams, 630 F.2d 1322, 1326-1327 (9th Cir. 1980). We must view the evidence in the light most favorable to the Government. United States v. Henry, 615 F.2d 1223, 1230 (9th Cir. 1980).
A. Founded Suspicion
13
A brief investigatory stop of a vehicle is constitutionally permissible if the officer has founded suspicion, i.e., "specific articulable facts, together with rational inferences from those facts, that reasonably warrant suspicion that the (vehicle) contain(s) aliens who may be illegally in the country." United States v. Brignoni-Ponce, 422 U.S. 873, 884, 95 S.Ct. 2574, 2581, 45 L.Ed.2d 607 (1975). Some fact or facts must focus suspicion on the particular vehicle as being involved in criminal activity. See United States v. Carrizoza-Gaxiola, 523 F.2d 239 (9th Cir. 1975).
14
In determining whether an officer has founded suspicion, we must balance the factors of the particular case, considering such factors as proximity to the border, previous illegal alien traffic, the type of vehicle, the driver's behavior, and the characteristic appearance of aliens. United States v. Brignoni-Ponce, 422 U.S. at 884-85, 95 S.Ct. at 2581-2582.
15
Harrington contends that the information obtained as a result of the allegedly unlawful stop on December 1, 1979, should have been suppressed and that with or without that information the officers did not have founded suspicion to stop him on December 20.
1. The December 1 Stop
16
Harrington asserts that the evidence of the allegedly unlawful December 1 stop and the evidence obtained thereby should not have been used to support the finding of founded suspicion as to the December 20 stop. Harrington did not make this specific argument to the lower court. Thus, we do not reach this issue. See United States v. Fong, 529 F.2d 55, 58 (9th Cir. 1975).
2. The December 20 Stop
17
Even without considering the evidence obtained from the December 1 stop, we find that there was founded suspicion supporting the stop. Douglas, a town near the Mexican border, is a known smuggling area. Border patrol officers there observed Harrington driving a van, a vehicle commonly used for transporting aliens. Harrington had registered at a motel under an assumed name. During the surveillance of Harrington, border patrol agents observed a Mexican male visiting Harrington's motel room at three different times, for periods of about 15 minutes, the last of which was just before dawn. Almost immediately after this visit, Harrington left his motel room and, after taking a circuitous route, proceeded to two known alien pick-up spots where he parked for a short time. Thereafter the van appeared to be riding lower, swaying on curves, bouncing at dips, and struggling to climb hills. These facts are sufficient to reasonably warrant suspicion that the van contained illegal aliens, and the stop was justified.
B. Probable Cause
18
Probable cause exists where facts within the officers' knowledge and of which they had reasonably trustworthy information are sufficient in themselves to warrant a reasonably prudent person to believe that an offense has been or is being committed by the person to be arrested. Dunaway v. New York, 442 U.S. 200, 208 n.9, 99 S.Ct. 2248, 2254 n.9, 60 L.Ed.2d 824 (1979); United States v. Chamberlin, 609 F.2d 1318, 1323 (9th Cir. 1979). Whether an investigative stop becomes an arrest, thereby requiring probable cause, depends on all of the surrounding circumstances including the extent that freedom of movement is curtailed and the degree and type of force or authority used to effectuate the stop. United States v. Beck, 598 F.2d 497, 500-02 (9th Cir. 1979).
19
Harrington argues that the stop was not a mere investigatory stop, but that in fact he was under arrest as soon as he was told he was going to be questioned about an immigration violation. Because the aliens had not then been discovered, he contends that the warrantless arrest was without probable cause.
20
Harrington was stopped by a police officer, ostensibly for a traffic violation. While they were talking, a border patrol agent identified himself and said to Harrington, "Depending on what I find (when checking the van) I need to come back and talk to you about an immigration violation." There is nothing in these circumstances from which a reasonable person would conclude he was under arrest.
21
Furthermore, once the border patrol agent saw the aliens through the window of the van, he clearly had probable cause to arrest Harrington and to search the van.
22
The motion to suppress was properly denied.
III. Cross-Examination
23
In Jenkins v. Anderson, 447 U.S. 231, 100 S.Ct. 2124, 65 L.Ed.2d 86 (1980), the defendant testified on his own behalf that he had stabbed and killed the victim in self-defense. During cross-examination the prosecutor attempted to impeach the defendant's credibility by asking whether before his arrest he had reported the stabbing to anyone and by suggesting that he would have done so if he had killed in self-defense. The Supreme Court held that the defendant's constitutional rights were not violated where the defendant's own decision to take the stand placed him in a position to be impeached by his prior words or silence and no governmental action2 induced the defendant to remain silent before his arrest. Id. 100 S.Ct. at 2127-30.
24
We are presented with similar circumstances in this case. At trial Harrington voluntarily testified on his own behalf that a man with a knife had coerced him into transporting the aliens and had told him that the man sitting behind him in the van also had a weapon. On cross-examination the prosecutor questioned Harrington as to whether, after Harrington was out of the van or after "all these people with those weapons" were out of the van, he told any of the officers "Hey, somebody in there may have a weapon; they threatened me." Harrington admitted that he had not done so.
25
It would seem natural that if Harrington had been threatened with a weapon, he would have blurted that out to the police officer as soon as he was a safe distance away from the van. The prosecutor's questions clearly were probative of Harrington's credibility and, as such, would seem appropriate for use for impeachment purposes.
26
The problem here is that the prosecutor's questions referred both to when Harrington got out of the van (before the arrest), and to when the aliens were removed from the van (after the arrest). Thus, under Doyle v. Ohio, 426 U.S. 610, 96 S.Ct. 2240, 49 L.Ed.2d 91 (1976), in which the Court held that cross-examination regarding the defendant's post-arrest silence violated his constitutional rights, there may have been some infringement in this case.
27
Even if there was error in allowing the questions regarding Harrington's actions after the aliens were removed from the van, however, it was harmless beyond a reasonable doubt. When Harrington began discussing what happened after he was arrested, the prosecutor focused his discussion on what happened "right out there in the highway, after they had gotten you out of the truck (sic)." The truth of Harrington's testimony was otherwise challenged when, after questioning, he admitted that the hitchhiker who allegedly coerced him into transporting the aliens did not get into the van. Additionally, the aliens testified that they did not see or know of anyone having a knife. Also, the officers testified that Harrington had gotten out of the van voluntarily at least twice-once at the motel just after picking up the aliens and once when stopped just prior to his arrest-suggesting that he was voluntarily driving the van and not being forced by threat of violence.
28
These facts, combined with the other evidence here, make the Government's case so strong as to preclude doubt about the verdict. See Bradford v. Stone, 594 F.2d 1294, 1296-97 (9th Cir. 1979); United States v. Wycoff, 545 F.2d 679, 682 (9th Cir.), cert. denied, 429 U.S. 1105, 97 S.Ct. 1135, 51 L.Ed.2d 556 (1977). The judgment, therefore, is AFFIRMED.
*
The Honorable William G. East, Senior District Judge for the District of Oregon, sitting by designation
1
The colloquy between Harrington and the prosecutor was as follows:
Q After the border patrol stopped your van, and it had gotten all these people with those weapons out, did you report that to a law enforcement agency?
A All what people with what weapons?
COUNSEL FOR DEFENSE: Your Honor, I object.
THE COURT: Overruled.
Q (By the Prosecutor) Well, the knife, and-somebody was sitting in back of you.
A The guy that had the knife, that I saw, did not get in the van. And-and I assumed the man behind me had a weapon, because that's what he had told me. I have no idea what he did with it.
They took me out of the van, and took me to the Tombstone jail. The next time I saw any of the individuals was when they brought them into the same jail.
Q No, I'm talking about right-right out there in the highway, after they had gotten you out of the truck, or-the aliens out of-not the truck, but the van-and the aliens out of the van-
A They didn't take the aliens out of the van on the highway.
Q They got you out, right?
A Yes.
Q Did you tell them at that point that, "Hey, somebody in there may have a weapon; they threatened me"?
A No, While I was talking to the patrolman, who was-telling me about a citation for speeding, one of the marshals-not marshal, the-well, anyway, he came back with his badge, and told me I was under arrest.
Q So you never did tell anybody about that?
A No.
2
E.g., being given Miranda warnings
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 02-60196
Conference Calendar
CHARLIE WEST SCOTT,
Petitioner-Appellant,
versus
UNITED STATES OF AMERICA,
Respondent-Appellee.
--------------------
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 5:01-CV-72-RG
--------------------
February 20, 2003
Before WIENER, EMILIO M. GARZA, and CLEMENT, Circuit Judges.
PER CURIAM:*
Charlie West Scott, now federal prisoner #02199-043, appeals
the district court’s dismissal of his 28 U.S.C. § 2241 habeas
corpus petition raising a challenge pursuant to Apprendi v. New
Jersey, 530 U.S. 466 (2000), to his conviction and sentence for
conspiring to possess with the intent to distribute cocaine base,
possessing with the intent to distribute cocaine base, and
possessing with the intent to distribute cocaine base within
1,000 feet of a school. Scott argues that he is entitled to
*
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 02-60196
-2-
raise Apprendi claims in a 28 U.S.C. § 2241 petition, that the
drug quantity should have been alleged in his indictment, and
that the issue of drug quantity should have been submitted to the
jury, who could not have found him responsible for the quantity
of drugs attributed to him at sentencing.
Under the “savings clause” of 28 U.S.C. § 2255, a 28 U.S.C.
§ 2241 petition that attacks custody resulting from a federal
sentence may be entertained only if the petitioner establishes
that the 28 U.S.C. § 2255 remedy is inadequate or ineffective to
test the legality of his detention. See 28 U.S.C. § 2255;
Tolliver v. Dobre, 211 F.3d 876, 878 (5th Cir. 2000). The
savings clause applies to a claim “(i) that is based on a
retroactively applicable Supreme Court decision which establishes
that the petitioner may have been convicted of a nonexistent
offense and (ii) that was foreclosed by circuit law at the time
when the claim should have been raised in the petitioner’s trial,
appeal, or first § 2255 motion.” Reyes-Requena v. United States,
243 F.3d 893, 904 (5th Cir. 2001). Because Apprendi is not
retroactively applicable on collateral review, Scott’s Apprendi
claims do not satisfy the requirements of the savings clause and
thus cannot be raised in a 28 U.S.C. § 2241 petition. See Wesson
v. U.S. Penitentiary Beaumont, Tx., 305 F.3d 343, 347 (5th Cir.
2002).
AFFIRMED.
|
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Filed: March 23, 1999
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
Nos. 98-6471(L)
(CR-92-34, CA-97-209-P, CA-97-210-P)
United States of America,
Plaintiff - Appellee,
versus
Alton Ray Truesdale, et al,
Defendants - Appellants.
O R D E R
The court amends its opinion filed September 8, 1998, as
follows:
On the cover sheet, section 4, line 3, and on page 2, text of
opinion, line 7 -- case number “CA-97-209-P” is added to the lower
court information.
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 98-6471
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
ALTON RAY TRUESDALE,
Defendant - Appellant.
No. 98-6472
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
TENNISON ALEXANDER HARRIS,
Defendant - Appellant.
Appeals from the United States District Court for the Western
District of North Carolina, at Charlotte. Robert D. Potter, Senior
District Judge. (CR-92-34, CA-97-209-P, CA-97-210-P)
Submitted: July 28, 1998 Decided: September 8, 1998
Before ERVIN and HAMILTON, Circuit Judges, and PHILLIPS, Senior
Circuit Judge.
Dismissed by unpublished per curiam opinion.
Alton Ray Truesdale, Tennison Alexander Harris, Appellants Pro Se.
Kenneth Davis Bell, OFFICE OF THE UNITED STATES ATTORNEY,
Charlotte, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Alton Ray Truesdale and Tennison Alexander Harris seek to
appeal the district court’s orders denying their motions filed
under 28 U.S.C.A. § 2255 (West 1994 & Supp. 1998). We have reviewed
the records and the district court’s opinions and find no rever-
sible error. Accordingly, we deny certificates of appealability and
dismiss the appeals on the reasoning of the district court. United
States v. Truesdale, No. CR-92-34; CA-97-209-P (W.D.N.C. Mar. 4,
1998); United States v. Harris, Nos. CR-92-34; CA-97-210-P
(W.D.N.C. Mar. 9, 1998). We dispense with oral argument because the
facts and legal contentions are adequately presented in the ma-
terials before the court and argument would not aid the decisional
process.
DISMISSED
3
|
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400 F.2d 702
UNITED STATES of America, Plaintiff-Appellee,v.Joseph Leroy MILBY and Andy K. McClellan, Defendants-Appellants.
No. 18176.
United States Court of Appeals Sixth Circuit.
Sept. 25, 1968.
Terrence R. Fitzgerald, Louisville, Ky., for Joseph Leroy Milby.
Jack M. Lowery, Jr., Louisville, Ky., for Andy K. McClellan.
John L. Smith, Asst. U.S. Atty., Louisville, Ky., for appellee; Ernest W. Rivers, U.S. Atty., Louisville, Ky., on brief.
Before O'SULLIVAN, McCREE and COMBS, Circuit Judges.
O'SULLIVAN, Circuit Judge.
1
Joseph Leroy Milby and Andy K. McClellan appeal from judgments convicting them, upon jury trial, of 'assault with intent to commit a felony, that is, sodomy' upon a named person (Count I of the involved indictment) and the taking of a wrist watch from said person 'by force, violence and intimidation' (Count II of the indictment), in violation of 18 U.S.C. 113(b) and 2111, respectively.1
2
They were tried in the United States District Court for the Western District of Kentucky, jurisdiction under the mentioned statutes being grounded on the special territorial jurisdiction of the United States, 18 U.S.C. 7-- the crimes having taken place on the United States Military Reservation at Fort Knox, Kentucky. Appellant Milby received consecutive sentences of five years on each count; McClellan was sentenced to ten years on Count I and five years on Count II, said sentences to run consecutively. A third defendant, one Hayes, also involved in the conduct hereinafter described, was found guilty under Count I of the lesser included offense of simple assault, and guilty under Count II. He was sentenced under the Youth Corrections Act, 18 U.S.C. 5005, et seq. He has not appealed. A fourth participant in the affair, one Edwards-- later apprehended-- was separately indicted for the same two offenses as appellants, pleaded guilty to both counts, and was also sentenced under the Youth Corrections Act.
3
Three questions are presented: 1) Were the appellants, or either of them, entitled to direction of acquittal as to one or both of the counts because of insufficiency of the evidence? 2) Did the trial judge commit reversible error as to appellant Milby in his instructions on aiding and abetting? and 3) Was the sentence of ten years imposed upon appellant McClellan under Count I illegal?
4
We affirm and discuss the questions before us as follows:
5
1) Sufficiency of evidence.
6
The District Judge denied each appellant's timely motion for judgment of acquittal, made upon the ground of insufficiency of evidence. The criminal enterprise here involved, as told by the complaining witness, was a revolting affair during which four young men sexually assaulted a 15 year old boy. Appellant McClellan was 25 years of age and Milby was 20; a third defendant, Hayes, was 18 and the fourth participant, Edwards, was also a minor.
7
Dealing first with the sexual assaults, appellants charge that the testimony of the complaining witness-- the victim of the assaults-- was inherently incredible, weakened by cross-examination, and its probative worth destroyed by testimony offered to oppose it. Appellant Milby urges as an additional proposition that if the evidence relevant to the Charges of Count I substantiates anything at all, as to him, it is that he committed an act of sexual perversion on the victim which was not an act of sodomy under the applicable law-- in this case that of Kentucky.2 Concededly, by virtue of Commonwealth v. Poindexter, 133 Ky. 720, 118 S.W. 943 (1909), in order for the act of sodomy to be committed by one person on another, under Kentucky law, it is necessary that there be anal penetration. He says this was not accomplished or attempted by him.
8
Avoiding, where possible, recital of loathsome details, we set out the facts contained primarily in the testimony of the complaining witness, whom we shall herein refer to as the victim or the boy. On the afternoon of January 14, 1967, he was hitchhiking down a Kentucky highway on his way to a youth dance to be held that evening. He was picked up by a vehicle driven by appellant McClellan, containing also Milby, Hayes and Edwards. There was evidence that the occupants of the car had no particular destination. It was a Saturday afternoon and the young men had supplied themselves with a couple of bottles of wine which they were consuming. There was evidence also that one of the group was inhaling glue fumes, and the occupants of the car were spraying each other with a bottle of cologne that was in the possession of the boy later assaulted. The victim said he had one drink of the wine. When it appeared that the car was going to change its direction, the boy sought to leave but was not allowed to get out. Thereafter, McClellan turned off onto a gravel road. After finding a parked bus at his first chosen destination, he turned the car around and drove to a secluded spot at the end of a gravel road.
9
When the vehicle and its occupants reached this spot, and before the occupants alighted, one of the boys (Edwards) reached over from the back seat and pulled the boy backwards, causing his back to be arched over the front seat. There was evidence that all of the occupants then joined in attacking the boy, while someone in the back seat stripped off his wrist watch and McClellan, from the front seat, took his wallet and searched it, but replaced it after finding no money. The theft of the wrist watch is the basis of the charge in Count II.
10
The assailants and the victim then alighted from the vehicle and he attempted to escape, but was restrained. From this point on the witness recounted the process by which all of the four-- Milby, McClellan, Hayes and Edwards-- cooperated in forcing him to submit to various sexual assaults, including that of sodomy. He testified definitely that each of the four committed at least one of the acts and, on direct, described both McClellan and Milby as performing sodomy. On cross-examination, the victim was not clear as to whether Milby's activity actually met the Kentucky definition of sodomy. During the entire activities, the appellants, with Hayes and Edwards, were congregated in an area not more than twenty or thirty feet from the parked car, and at times were all immediately present while one of their number took his turn at sexually assaulting the victim. At the end of the affair, one of the assailants told the boy that he would kill him if he told what had happened. When he was finally released, he was advised to say that he had been in a fight, thus to explain his bruised and battered condition.
11
We need not detail the events which followed the victim's call to the police. The subsequent investigation by federal as well as state police authorities, in some substantial respects, corroborated the victim's account and in other respects would, to a degree, cast doubt on his story. None of the police discoveries, however, was of conclusive probative force. The appellants and Hayes took the stand and denied the crimes charged to them. They admitted that they did pick up the complaining witness at the time alleged, but claimed they let him out of the car without abusing him.
12
It was the jury's function to resolve the issues of credibility and any conflicts in the evidence. United States v. Hoffa, 349 F.2d 20, 38 (6th Cir. 1965); United States v. Kessler, 352 F.2d 499 (6th Cir. 1965); United States v. Conti, 339 F.2d 10, 13 (6th Cir. 1964). In testing whether there is sufficient evidence to allow a case to be submitted to the jury, the trial judge must view the evidence in a light most favorable to the government. United States v. Decker, 304 F.2d 702, 705 (6th Cir. 1962); United States v. Berkley, 288 F.2d 713, 716 (6th Cir. 1961), cert. denied,368 U.S. 822, 82 S.Ct. 41, 7 L.Ed.2d 27 (1961). And it is this Court's duty to take a like view of the evidence,
13
'and determine therefrom whether the finding was supported by substantial and competent evidence, and where there is substantial and competent evidence, which if believed, supports the conviction, the appellate court can not weigh the evidence or determine the credibility of witnesses.' Battjes v. United States, 172 F.2d 1, 5 (6th Cir. 1949).
14
In this case there was direct evidence of the criminal conduct charged, and the jury obviously found such evidence credible. The District Judge, who saw and heard the witnesses, denied the motion for judgment of acquittal.
15
We still must deal with appellant Milby's contention that, in all events, the evidence as to him disclosed only a form of sexual perversion that did not come within Kentucky's definition of sodomy. The victim, on direct, gave several accounts of Milby committing the act of sodomy, but on cross-examination agreed that the act of perversion committed by Milby was not such as would meet Kentucky's specific definition of such offense, although it was equally odious. But even assuming the insufficiency of the evidence in this respect, if Milby aided and abetted the specific conduct described in the indictment, he may be punished as a principal. 18 U.S.C. 2. We are of the view that regardless whether or not Milby committed the technical act of sodomy, there is substantial evidence that others of the defendants did do so, including appellant McClellan, and that Milby was indeed an aider and abettor of these others.
16
Like reasoning compels us to find that whether or not Milby or McClellan actually took the victim's watch, the evidence may be fairly viewed as showing that both participated actively in the whole criminal affair in such a way as to aid and abet the theft. We agree that in order to aid and abet one must do more than be present at the scene of the crime and have knowledge of its commission. See, e.g., United States v. Luxenberg, 374 F.2d 241, 249-250 (6th Cir. 1967); United States v. Garguilo, 310 F.2d 249, 253-254 (2d Cir. 1962). The Supreme Court in Nye & Nissen v. United States, 336 U.S. 613, 619, 69 S.Ct. 766, 93 L.Ed. 919 (1949), quoted Judge Learned Hand's statement from United States v. Peoni, 100 F.2d 401, 402 (2d Cir. 1938) as follows:
17
'In order to aid and abet another to commit a crime it is necessary that a defendant 'in some sort associate himself with the venture, that he participate in it as in something that he wishes to bring about, that he seek by his action to make it succeed."
18
We think it unnecessary that each defendant be shown either to have committed the offenses charged in the indictment or to have physically assisted in every detail of their perpetration. Presence at the scene and active participation in the criminal conduct being undertaken, in such a way as to encourage the commission of the charged offenses, is enough to constitute aiding and abetting; by such conduct, one assists others in the criminal enterprise. And there is direct testimony that each appellant did, in fact, force the victim to endure one or more sexual assaults and did, in fact, intimidate him by physical force. We think there was ample evidence for a finding of aiding and abetting.
19
2) Instructions on Aiding and Abetting.
20
Appellants charge reversible error in the District Judge's instructions on aiding and abetting. This is what he told the jury on the subject:
21
'In an act where two or more persons are charged with the commission of a crime the guilt of the accused may be established without proof that the accused personally did every act constituting the offense charged. 'Whoever commits against the United States, or whoever aids, abets, counsels, demands, produces, or procures its commission is punishable as a principal. 'Whoever willfully causes an act to be done which if directly performed by him or another, would be an offense against the United States is punishable as a principal. 'Every person who thus willfully participates in the commission of a crime may be found guilty of that offense. 'Participation is willfully done if done voluntarily and intentionally and with specific intent to do something that the law forbids or with specific intent to fail to do something the law requires to be done, that is to say, with bad purpose, either to disobey or to disregard the law. 'In order to aid and abet another to commit a crime it is necessary that the accused willfully associated himself in some way with the criminal venture and willfully participated in it as he would in something he wishes to bring about, that is to say that he willfully seeks by some act or omission of his to make the criminal venture succeed.'
22
We first observe that no instructions on aiding and abetting were proffered by appellants. Counsel's objection that,
23
'I would like also to object that the instructions do not indicate what constitutes sufficiency, what constitutes participation in a crime,'
24
does not meet the requirement of Rule 30 F.R.Crim.P. that an objection to an omission from a charge must state 'distinctly the matter to which he objects and the grounds of his objection.' It is the rule that in such a case as this the trial judge should, without request, advise the jury of the applicable law, especially where, as here, it was important that the jury know what conduct of the defendants could be considered by them as amounting to aiding and abetting. We are satisfied, however, that the relevant instructions, which bear close resemblance to the recommended instructions on aiding and abetting as found in 27 F.R.D. 53, 54, were sufficient to discharge the trial judge's initial duty. If further and more detailed discussion was desired, the general language of the quoted objection was not sufficient to require it. In this situation, we will not employ Rule 52(b) of the Federal Rules of Criminal Procedure to find plain error in the trial court's instructions.
25
'Our discretionary power in this regard must be viewed in light of Rule 30 and in no event can be exercised except in situations where the error (we find none here) is such as to involve a manifest miscarriage of justice.' United States v. Provenzano, 334 F.2d 678, 690 (3rd Cir. 1964).
26
Appellant Milby asserts that,
27
'Even if the instructions were abstractly correct, it would be erroneous in the case at bar because the closeness of the issue as to Milby imposed a duty on the trial judge to instruct the jury with extreme precision and to caution them plainly that presence and guilty knowledge is not enough.'
28
He relies upon United States v. Garguilo, 310 F.2d 249, 253-54 (2nd Cir. 1962), to support that statement. Without detailing them, we mention that the special facts of that case distinguish it. Judge Friendly observed that the there criticized charge 'may have led the jury to believe that a finding of presence and knowledge on the part of Bacchia was enough for conviction.' 310 F.2d, at 254. Such cannot be said of the District Judge's charge here. Neither were the proofs of appellants' participation in the larcenous and sexual assaults upon their victim at all comparable to the scant evidence of Garguilo's activity in the transportation of counterfeiting equipment. In the case at bar, the District Judge also fully discussed the requirements of willfulness, intent, and guilty beyond a reasonable doubt. We are not persuaded that there is reversible error in the instructions.
29
3) Excessive Sentence.
30
Appellant McClellan says the ten year sentence imposed under Count 1 is illegal. He was prosecuted under 18 U.S.C. 113(b) which permits a ten year sentence for 'assault with intent to commit any felony'; the indictment was for assault with intent 'to commit a felony, that is, sodomy.' Sodomy is not defined as a felony by any federal statute, but becomes such by reason of18 U.S.C. 13 under which any person guilty of an act committed on the Fort Knox Reservation,
31
'although not made punishable by any enactment of Congress, would be punishable if committed * * * within the * * * State * * * in which such place is situated, by the laws thereof in force at the time of such act or omission, shall be guilty of a like offense and subject to a like punishment.'
32
K.R.S. 436.050 makes sodomy a felony punishable by imprisonment 'for not less than two nor more than five years.'
33
Appellant asserts that because five years would have been the maximum sentence if the prosecution was for sodomy, no greater sentence should be imposed for assault with intent to commit such crime. No case is cited to support this assertion, and although the argument has the virtue of a certain symmetry. Congress chose to write the statute otherwise. Moreover, it can be seen that in many cases the assault would be a greater threat to an individual's bodily integrity than the commission of the felony, e.g., larceny. Furthermore, sodomy may be committed without the element of coercion present in an assault, as where consented to. We think appellant's argument has been answered by the opinion of Judge Swaim in United States v. Gill, 204 F.2d 740 (7th Cir. 1953), cert. denied, 346 U.S. 825, 74 S.Ct. 42, 98 L.Ed. 350 (1953), the only case in point discovered by our own research. There also the contention was made that the state law maximum penalty provision for the crime of sodomy should limit the punishment imposable for violation of 18 U.S.C. 113, assault with intent to commit sodomy. Judge Swaim stated:
34
'But the defendant says that if we are prosecuting him in the Federal courts under the Assimilative Crimes Statute we must limit the punishment to the same punishment as provided by the Indiana statute. This would, of course, be true if the defendant had been prosecuted for the crime of sodomy as defined by the Indiana statute. But the defendant was not so charged. He was charged only for assault with intent to commit a felony as defined by 18 United States Code, section 113(b). We look to the Indiana statute and to 18 United States Code section 13, the Assimilative Crimes Statute, therefore, only for the purpose of finding that Congress has made the crime of sodomy a crime against the United States and to determine the punishment fixed therefor. Since the crime was made punishable by imprisonment for more than one year, it was a felony within the meaning of 18 United States Code, Section 1, and Count III of the indictment did charge a crime against the United States.' 204 F.2d at 743.
35
Judgment affirmed.
1
18 U.S.C. 113 reads, in part:
'Whoever, within the special maritime and territorial jurisdiction of the United States, is guilty of an assault shall be punished as follows:
'(b) Assault with intent to commit any felony, except murder or rape, by fine of not more than $3,000 or imprisonment for not more than ten years, or both.' 2111 reads:
'Whoever, within the special maritime and territorial jurisdiction of the United States, by force and violence, or by intimidation, takes from the person or presence of another anything of value, shall be imprisoned not more than fifteen years.'
2
The statute allegedly violated, 18 U.S.C. 113(b), refers to 'assault with intent to commit any felony.' Sodomy is not a defined felony by Congressional enactment but becomes such here by virtue of 18 U.S.C. 13 which provides that any act committed on a military reservation, such as Fort Knox here, shall be punishable as a federal offense if it would be punished by the laws of the state in which such federal facility is located. Under Kentucky law, K.R.S. 436.050, sodomy is defined as a crime punishable by imprisonment for not less than two nor more than five years. Title 18, U.S.C. 1 provides that any offense punishable by 'imprisonment for a term exceeding one year is a felony.'
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Case: 18-12178 Date Filed: 12/13/2018 Page: 1 of 4
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-12178
Non-Argument Calendar
________________________
D.C. Docket No. 1:17-cr-00287-LMM-JFK-8
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
RODNEY ANTWAIN SALTER,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(December 13, 2018)
Before MARCUS, ROSENBAUM, and NEWSOM, Circuit Judges.
PER CURIAM:
Rodney Salter, a former letter carrier for the United States Postal Service,
appeals his 60-month sentence for conspiracy to distribute at least 500 grams of
Case: 18-12178 Date Filed: 12/13/2018 Page: 2 of 4
cocaine, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(B) and 846, and accepting
bribes as a public official, in violation of 18 U.S.C. § 201(b)(2). He argues that the
district court clearly erred when it found him ineligible for “safety-valve” relief
under U.S.S.G. § 5C1.2.
We review the district court’s factual determinations under the U.S.S.G.
§ 5C1.2 safety-valve provision for clear error. United States v. Cruz, 106 F.3d
1553, 1557 (11th Cir. 1997) (citation omitted). A district court’s choice between
“two permissible views” of the same evidence “is the very essence of the clear
error standard of review.” United States v. Rodriguez De Varon, 175 F.3d 930,
945 (11th Cir. 1999) (citation omitted). We rarely find clear error “[s]o long as the
basis of the trial court’s decision is supported by the record and does not involve a
misapplication of a rule of law.” Id.
The safety-valve provision—§ 5C1.2(a) of the Sentencing Guidelines—
provides that a district court “shall impose a sentence in accordance with the
applicable guidelines without regard to any statutory minimum sentence,” if it
finds that the defendant satisfies the following relevant provision:
(5) not later than the time of the sentencing hearing, the defendant
has truthfully provided 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, but the fact that the defendant has no relevant or
useful other information to provide or that the Government is
already aware of the information shall not preclude a
2
Case: 18-12178 Date Filed: 12/13/2018 Page: 3 of 4
determination by the court that the defendant has complied with
this requirement.
18 U.S.C. § 3553(f)(5). A qualifying defendant’s offense level is also decreased
by two levels, pursuant to U.S.S.G. § 2D1.1(b)(17).
The defendant has the burden of proving his eligibility for relief under
§ 5C1.2. Cruz, 106 F.3d at 1557. To satisfy § 5C1.2(a)(5), the defendant “must
demonstrate to the court that he has made a good faith attempt to cooperate with
the authorities.” Id. (quotation omitted). Section 5C1.2(a)(5) is a “tell-all
provision: to meet its requirements, the defendant has an affirmative responsibility
to truthfully disclose to the government all information and evidence that he has
about the offense and all relevant conduct.” United States v. Johnson, 375 F.3d
1300, 1302 (11th Cir. 2004) (quotation and citation omitted).
While engaged in the conspiracy to distribute cocaine, Salter corresponded
with the confidential source (CS) and discussed using P.O. Boxes, how to address
the packages, and what sizes and quantity of drugs would be suitable. Salter also
sent the CS an address and information about when to send packages that were
later picked up by his co-conspirator and given to the CS in exchange for money.
Later, before his sentencing hearing, Salter requested a safety-valve interview at
which time he denied any knowledge about his co-conspirator delivering or
intercepting any packages.
3
Case: 18-12178 Date Filed: 12/13/2018 Page: 4 of 4
Based on the record before us, we conclude that the district court did not
clearly err when it found Salter ineligible for safety-valve relief. Salter did not
truthfully provide all information and evidence regarding his co-conspirator’s
involvement in the post-office drug-mailing scheme. He maintained—through two
debriefings—that he had no knowledge of his co-conspirator’s involvement in the
scheme beyond her initially introducing him to the CS. Salter’s statements,
however, were inconsistent with documented communications between Salter and
the CS, which, when viewed in combination with the co-conspirator’s activities,
clearly implied an ongoing pattern of communication between Salter and his
co-conspirator. Salter provided no additional evidence to resolve these
inconsistencies, and therefore did not meet his burden of proving his eligibility for
safety-valve relief. Particularly where the district court considered at length “the
details of the calls and the text messages and the evidence” and admitted that “this
is a very close call,” we find no clear error. We therefore AFFIRM Salter’s
sentence.
4
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Case: 16-11720 Date Filed: 01/25/2017 Page: 1 of 6
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-11720
________________________
D.C. Docket No. 2:14-cv-00269-WKW-TFM
JUDITH A. NEELLEY,
Plaintiff - Appellant,
versus
CLIFFORD WALKER,
in his official capacity as Chairman of the Alabama Board of Pardons and
Paroles,
WILLIAM W. WYNNE, JR.,
in his official capacity as a member of the Alabama Board of Pardons and
Paroles,
ROBERT P. LONGSHORE,
in his official capacity as a member of the Alabama Board of Pardons and
Paroles,
Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Alabama
________________________
(January 25, 2017)
Case: 16-11720 Date Filed: 01/25/2017 Page: 2 of 6
Before WILSON and JULIE CARNES, Circuit Judges and HALL,∗ District Judge.
PER CURIAM:
The Alabama Parole Board denied Judith Neelley’s parole eligibility in 2014
based on a law passed in 2003. The question in this case is: did Neelley’s cause of
action related to her parole denial accrue in 2003 or 2014. In this specific
circumstance, we hold that Neelley’s cause of action accrued in 2014.
I.
In 1983, a jury convicted Judith Neelley of murder and recommended life
imprisonment without parole. Instead, the trial judge sentenced Neelley to death.
In 1999, Alabama Governor Forrest James commuted her sentence to life
imprisonment. As a result, pursuant to then existing Alabama law (specifically,
§ 15-22-27(b) of the Alabama Code), Neelley was eligible for parole consideration
as soon as she served fifteen years of her life sentence.
In 2001, Neelley sought a declaratory judgment that she was eligible for
parole because she had already served fifteen years. An Alabama state court held
that Neelley would be eligible for parole on January 15, 2014, fifteen years after
Governor James commuted her death sentence.
On June 18, 2003, the Alabama legislature amended § 15-22-27(b) by
passing Act 2003-300 (the Act). The Act stated that “[a]ny person whose sentence
∗
Honorable James Randall Hall, United States District Judge for the Southern District of
Georgia, sitting by designation.
2
Case: 16-11720 Date Filed: 01/25/2017 Page: 3 of 6
to death has been commuted by the Governor shall not be eligible for parole” and
“the operation of this act shall be retroactive to September 1, 1998.” On
November 23, 2010, in response to an inquiry from Neelley, the Parole Board
informed her that “she [would] be eligible for parole consideration in January of
2014.” On December 20, 2012, the Parole Board informed Neelley that her case
“was submitted to the Review Committee on July 19, 2012 for earlier parole
consideration [and t]he Review Committee voted not to change her January 2014”
parole consideration date.
In January of 2014, Neelley asked the Parole Board for a hearing. The
Parole Board initially believed the Act “would not apply to Ms. Neelley’s case”
but requested an opinion from the Attorney General on whether Neelley was
eligible for parole. The Parole Board believed the Act did not apply to Neelley
because the retroactivity clause reached back to 1998 and the crime was committed
in 1982. The Attorney General disagreed with the Parole Board’s initial
interpretation of the Act and issued an opinion concluding Neelley was not eligible
for parole based on the retroactive application of the Act. The Parole Board sent
Neelley a notice that she was barred from parole.
Neelley challenged the Act as an unconstitutional ex post facto law and bill
of attainder, naming members of the Parole Board as defendants. The district court
dismissed Neelley’s claims via summary judgment because Neelley failed to file
3
Case: 16-11720 Date Filed: 01/25/2017 Page: 4 of 6
the action within the two-year statute of limitations. The court ruled that Neelley’s
injury occurred when the Act was passed in 2003, rather than when Neelley felt the
effects of the Act in 2014. As such, the court dismissed Neelley’s claims based on
the statute of limitations.
After reviewing the briefs and hearing oral argument, we reverse.
II.
The main issue is when Neelley’s cause of action began to accrue. Neelley’s
claims arise under 42 U.S.C. § 1983. “All constitutional claims brought under
§ 1983 are tort actions, subject to the statute of limitations governing personal
injury actions in the state where the § 1983 action has been brought.” Crowe v.
Donald, 528 F.3d 1290, 1292 (11th Cir. 2008) (internal quotation marks omitted).
Neelley brought this action in Alabama, which has a limitations period of two
years. See Powell v. Thomas, 643 F.3d 1300, 1303 (11th Cir. 2011) (per curiam).
Even though the statute of limitations is determined by state law, “[t]he accrual
date of a § 1983 cause of action is a question of federal law.” Wallace v. Kato, 549
U.S. 384, 388, 127 S. Ct. 1091, 1095 (2007). In order to determine when a claim
accrued, a court must first identify the injury alleged, and then determine when the
plaintiff could have sued. See Rozar, 85 F.3d at 561–62.
The district court held that the injury here was the passage of the Act and
that Neelley should have filed her claims within two years of the enactment of the
4
Case: 16-11720 Date Filed: 01/25/2017 Page: 5 of 6
Act in 2003. The court relied on Chardon v. Fernandez, 454 U.S. 6, 102 S. Ct. 28
(1981) (per curiam), for the proposition that “when ascertaining the relevant injury,
courts must focus on the moment of the adoption of the unconstitutional act itself
rather than the moment at which the claimant experiences its effects.” Neelley v.
Walker, 173 F. Supp. 3d 1257, 1265 (M.D. Ala. 2016). Chardon involved whether
a claim accrued when an employee was formally notified that his employment
would terminate at a future date or at the future date when he was actually
terminated. The Supreme Court held it was the former because that was when “a
final decision had been made.” Chardon, 454 U.S at 8, 102 S. Ct. at 29. The
Supreme Court stated that the “the proper focus is on the time of the discriminatory
act, not the point at which the consequences of the act become painful.” Id.
The district court’s characterization of the passage of the Act as the relevant
action ignores the fact that, by twice informing Neelley that she remained eligible
for parole on the previously-set date, the Parole Board indicated its decision that
the Act did not apply to Neelley. As the Alabama Supreme Court has stated, “[t]he
parole board is charged with the responsibility of determining who is eligible for
parole.” Ex parte Ellard, 474 So. 2d 758, 763 (Ala. 1985). The Parole Board
initially thought the Act did not apply to Neelley because the retroactivity clause
went back to 1998 and she committed her crime in 1982. The Parole Board
generally looks to the date of the commission of an offense in determining the
5
Case: 16-11720 Date Filed: 01/25/2017 Page: 6 of 6
applicability of laws bearing on parole eligibility. It was not until after seeking and
receiving the opinion of the Attorney General in 2014 that the Parole Board
reversed course and notified Neelley that it had changed its position and had
decided that Neelley was ineligible for parole at any time. In Chardon, the statute
of limitations began when a “final decision had been made.” Chardon, 454 U.S at
8, 102 S. Ct. at 29. Here, there was no final decision in 2003; the relevant action
occurred in 2014 when the State, by way of the Parole Board, decided to apply
retroactively the Act to Neelley. See Communist Party of U.S. v. Subversive
Activities Control Bd., 367 U.S. 1, 71–72, 81 S. Ct. 1357, 1397–98 (1961) (“No
rule of practice of this Court is better settled than never to anticipate a question of
constitutional law in advance of the necessity of deciding it.” (internal quotation
marks omitted)).
REVERSED AND REMANDED.
6
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 17-2529
________________
UNITED STATES OF AMERICA
v.
DANIEL LAMPLEY,
also known as DANNY LAMPLEY,
Appellant
________________
Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Criminal Action No. 2-04-cr-00106-001)
District Judge: Honorable Cathy Bissoon
________________
Submitted Under Third Circuit LAR 34.1(a)
May 21, 2018
Before: MCKEE, SHWARTZ, and COWEN, Circuit Judges
(Opinion filed: August 16, 2018)
________________
OPINION*
________________
McKEE, Circuit Judge
*
This disposition is not an opinion of the full Court and under I.O.P. 5.7 does not
constitute binding precedent.
Daniel Lampley appeals the sentence imposed following the revocation of his
supervised release. For the reasons that follow, we will affirm the District Court’s
judgment of sentence.
I.1
In 2005, Lampley pled guilty to conspiracy,2 possessing heroin with intent to
distribute,3 and firearms offenses and was sentenced to prison and a period of supervised
release.4 After serving a term of incarceration,5 the Bureau of Prisons (“BOP”) released
him to a halfway house. While there, Lampley again began selling heroin. When an arrest
warrant was issued in May 2015 based on the new drug offenses, the Probation Office
ordered Lampley to surrender. Instead of complying, he absconded. In response, the
Probation Office filed a “Petition for Warrant or Summons for Offender Under
Supervision” with the District Court. Lampley remained a fugitive for about three months
before police arrested him in New Jersey. He eventually pled guilty to charges stemming
from these new drug sales and received a sentence of 100 months’ incarceration.
After Lampley was sentenced for his new offenses, the Probation Office
recommended that its initial petition be withdrawn and that Lampley’s supervised
released be terminated. The Government objected, and, on June 28, 2017, the District
1
The district court had jurisdiction under 18 U.S.C. § 3231. We have jurisdiction over
this appeal under 28 U.S.C. § 1291.
2
21 U.S.C. § 846.
3
21 U.S.C. §§ 841(a)(1), 841(b)(1)(B)(i).
4
18 U.S.C. § 924(c)(1)(A)(i); 18 U.S.C. §§ 922(g)(1), 924(e)(1).
5
Lampley initially received an aggregate sentence of 322 months’ incarceration followed
by eight years of supervised release. He ultimately received two reductions and a
sentence of 149 months of imprisonment.
2
Court held a revocation hearing. Thereafter, the court sentenced Lampley to serve eight
months’ incarceration, consecutive to the 100 month sentence he was already serving.
This appeal followed.
II.
Lampley raises both procedural and substantive challenges to the imposition of his
eight-month revocation sentence. We typically review the reasonableness of a district
court’s sentencing decision for abuse of discretion.6 This requires a two-step process. We
first “ensure that the district court committed no significant procedural error” such as
failing to calculate the proper Guidelines range or failing to consider the appropriate
factors under 18 U.S.C. § 3553(a).7 If the district court’s sentence is procedurally sound,
we then examine the substantive reasonableness of the sentence to determine whether,
under the totality of the circumstances, the sentencing court abused its discretion.8
Lampley did not object to the procedural determination of his sentence.
Accordingly, we review the sentence for plain error.9 An error is plain if it is obvious and
affects substantial rights or the “fairness, integrity, or public reputation of judicial
proceedings.”10 He now argues that the District Court failed to “give meaningful
consideration to the § 3553(a) factors” because it did not make specific factual findings
6
Gall v. United States, 552 U.S. 38, 51 (2007).
7
Id.; see also 18 U.S.C. § 3583(e) (stating that a court may revoke a term of supervised
release “after considering the factors set forth in [§ 3553(a)]”).
8
Gall, 552 U.S. at 51.
9
United States v. Flores-Mejia, 759 F.3d 253, 256 (3d Cir. 2014) (en banc) (“[W]e now
hold that a defendant must raise any procedural objection to his sentence at the time the
procedural error is made[.]”).
10
Id. at 259 (quoting United States v. Dragon, 471 F.3d 501, 505 (3d Cir. 2006)).
3
about each factor.11 The argument ignores the fact that a sentencing court “need not
‘discuss and make findings as to each of the § 3553(a) factors if the record makes clear
the court took the factors into account in sentencing.’”12 A sentencing procedure is
sufficient when the record shows that the sentencing judge considered each argument,
weighed the supporting evidence, and understood the defendant’s claim for a lower
sentence.13
Here, the District Court stated that it would “consider the factors set forth in
3553(a)(1), (a)(2)(B) through (D), and (a)(4) through (7)” in fashioning its sentence.14
The record confirms that the court understood, but rejected, Lampley’s argument that the
100 month sentence he received on his most recent drug convictions covered both the
offense conduct and the attendant violation of his supervised release.15 The court also
recognized that Lampley had cooperated and received a downward variance in that
case.16
The District Court also considered the extensive argument of Lampley’s attorney
and Lampley’s lengthy allocution.17 Finally, the court considered “the nature and
11
Br. for Appellant, 16.
12
United States v. Thielemann, 575 F.3d 265, 271 (3d Cir. 2009) (quoting United States
v. Cooper, 437 F.3d 324, 329 (3d Cir. 2006)).
13
Rita v. United States, 551 U.S. 338, 358 (2007).
14
App. 60.
15
App. 65, 67 (“I have not had that experience, I’ll just say for the record, nor does the
record reflect that . . . was the intention here . . . . There was still a pending petition for a
supervised release violation.”).
16
App. 67 (“There clearly was a variance in this case as I understand it in connection
with your client.”).
17
App. 71–72 (“I’ve also considered everything said here today . . . . As I said, I
appreciate everything Mr. Lampley and [his attorney] said here today, but due to the
4
circumstances of the offense, history and characteristics of this defendant, the need to
afford adequate deterrence to criminal conduct, the need to protect the public from further
crimes, and the need to provide defendant with any appropriate treatment” as well as the
applicable sentencing guidelines.18 Given the District Court’s review of these factors, we
discern no error in Lampley’s sentencing procedure at all, and certainly no plain error.
We thus turn to Lampley’s claim that his sentence was substantively unreasonable.
We may not disturb a district court’s sentence unless “no reasonable sentencing court
would have imposed the same sentence on th[e] particular defendant for the reasons the
district court provided.”19
Lampley’s sentence was at the lowest end of the applicable Guidelines.20 Those
Guidelines explicitly recommended that any term of imprisonment imposed after
revocation be served consecutively to any sentence that was already being served.21
Lampley violated his supervised release by selling heroin while in BOP custody,
absconding from supervision, and remaining a fugitive for approximately three months.
nature of the violation of defendant’s supervised release, which this Court does not view
to be inconsequential, as well as the relevant factors, most notably deterrence,
incarceration in a federal penitentiary is appropriate.”).
18
App. 70–71.
19
United States. v. Tomko, 562 F.3d 558, 568 (3d Cir. 2009).
20
See Gall, 552 U.S. at 51 (“If the sentence is within the Guidelines range, the appellate
court may, but is not required to, apply a presumption of reasonableness.”); United States
v. Hoffecker, 530 F.3d 137, 204 (3d Cir. 2008) (“Although we do not deem a within-
Guidelines sentence presumptively reasonable, it is more likely to be reasonable than one
that lies outside the advisory guidelines range.”) (internal quotations omitted).
21
U.S. SENTENCING GUIDELINES MANUAL § 7B1.3.
5
The eight-month consecutive sentence he received was hardly unreasonable, and his
argument that it was borders on frivolity.22
22
Lampley’s sole counterargument is that the District Court’s sentence was unreasonable
because the Probation Office recommended terminating supervision. As stated above, the
District Court rejected that recommendation.
6
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137 B.R. 775 (1992)
In re BROADVIEW LUMBER COMPANY, INC., Debtor.
Bankruptcy No. 91-30593-SW.
United States Bankruptcy Court, W.D. Missouri.
March 6, 1992.
Norman Rouse, Collins, Webster & Rouse, Joplin, Mo., for debtor.
Brent D. Green, Springfield, Mo., for creditor.
*776 MEMORANDUM OPINION
ARTHUR B. FEDERMAN, Bankruptcy Judge.
I. INTRODUCTION AND STATEMENT OF FACTS
This is an involuntary case. Petitioning creditors and the alleged debtor, Broadview Lumber Company, Inc. ("Broadview Lumber"), have filed cross-motions for summary judgment. The main issue is whether the claim of one of the petitioning creditors is barred by the doctrine of accord and satisfaction. This Court has core jurisdiction pursuant to 28 U.S.C. §§ 1334(b) and 157(b)(2). Based on the reasons set forth below, I find that the petitioning creditors' motion for summary judgment should be sustained, and that the motion of Broadview Lumber should be denied. Therefore, an order for involuntary relief will be entered.
Broadview Lumber had been in business for over 85 years before it decided to close its doors in January, 1991, at which time it had over 200 creditors. Based upon the analysis of its accountants, Broadview Lumber determined that in a liquidation its creditors would receive 16.6 percent of their outstanding claims. Accordingly, Broadview Lumber sent to each of its creditors a check representing 16.6 percent of the amount owed according to its own records. Along with each such check Broadview Lumber sent a letter stating that negotiation of the enclosed instrument would constitute a full release of Broadview Lumber, its management, and others, from any further liability.
The majority of Broadview Lumber's creditors cashed these checks without objection to the release provisions in the letter.
However, two of the petitioning creditors did not accept the proposed release and settlement, and returned the checks. These two creditors are Walter M. Fields, and C & S Lumber Company, Inc. Broadview Lumber admits the validity of the claims of these two creditors, but disputes the amounts of those claims.
Another petitioning creditor, Robert C. Melloway ("Melloway"), cashed the money order sent to him, by Broadview Lumber, but added a restrictive endorsement: "Deposited under protest with recourse. Robert C. Melloway." Melloway's claim is for the balance due on a March, 1987 Promissory Note in the original amount of $14,257.80 and signed by Richard T. Manfield, as President of Broadview Lumber. The status of Melloway as a petitioning creditor is the issue now before this Court.
II. LEGAL ANALYSIS
Broadview Lumber qualifies as a debtor under section 109(b) of the Bankruptcy Code. 11 U.S.C. § 109(b). For creditors to petition successfully for involuntary bankruptcy under 11 U.S.C. § 303, a Court must determine that the creditors have standing and that the alleged debtor generally has not been paying its debts as they become due. Where as here, the number of creditors exceeds twelve, at least three qualified creditors must join in the filing of the involuntary petition. 11 U.S.C. § 303(b)(2).
There is no dispute that Broadview Lumber is not generally paying its debts as they come due. The real issue is whether there are at least three qualified petitioning creditors which hold claims against Broadview Lumber that are not contingent as to liability or the subject of a bona fide dispute, as required by section 303(b)(1). Broadview Lumber admits that Walter M. Fields and C & S Lumber each hold a claim against it, but disputes a portion of the claims allegedly amounting to $19,456.80 and $5,000.75 respectively. In order to disqualify a creditor's claim for the purpose of meeting the involuntary petition requirements, the bona fide dispute must exist as to the validity of an entire claim, not merely a portion of it. In re Ross, 63 B.R. 951, 966 (Bankr.S.D.N.Y.1986) (where liability as to a claim is fixed, there is no requirement that a petitioner's claim be liquidated in amount).
Thus, the Court need only find one other creditor to meet the requirements of section 303. By placing a restrictive endorsement on Broadview Lumber's money *777 offered as full and final settlement of its claim, Robert C. Melloway reserved his right to assert the rest of his claim and therefore qualifies as the third petitioning creditor.
Broadview Lumber contends that the restrictive endorsement does not cure the fact that he accepted the instrument with knowledge that it was offered as full and final settlement. Thus, Broadview Lumber argues, the money order was accepted as a valid accord and satisfaction of Melloway's claim. Broadview Lumber further bolsters its argument that Melloway accepted the settlement payment by going to "great lengths" in order to obtain the payment. It appears that the first check offered to Melloway was returned to Melloway by the bank as the check had been written from a closed account. Melloway sent a letter to Broadview Lumber's attorney indicating that he wanted the check covered. Broadview promptly provided Melloway with a money order in the amount of $869.33 purporting to represent 16.6 percent of his claim.
Notwithstanding his attempts to obtain a valid instrument offered as a settlement of his claim, Melloway did not "accept" the money order as a full and final settlement. The letter from Broadview to Melloway expressly stated that negotiation of the instrument constituted acceptance of a full and final settlement, or an accord and satisfaction. The letter, which was executed as part of the same transaction, modifies or affects the terms of the instrument. See Mo.Rev.Stat. § 400.3-119 (1986). The money order was not negotiated until it was delivered to Melloway's bank with his restrictive endorsement. Mo.Rev.Stat. § 400.3-202(1) (1986). A restrictive endorsement may be conditional. Mo.Rev.Stat. § 400.3-205 (1986). Such a condition may include a reservation of rights as contemplated by Mo.Rev.Stat. § 400.1-207 (1986).
Section 1-207 of Missouri's Uniform Commercial Code ("U.C.C. § 1-207") provides as follows:
A party who with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as "without prejudice", "under protest" or the like are sufficient.
Mo.Rev.Stat. § 400.1-207 (1986).
Despite this provision's clear applicability to bar an alleged accord and satisfaction, it is Broadview's position that Melloway's claim has been compromised and settled. Broadview could find support for its position in the case law of many other jurisdictions. See Anderson, Accord and Satisfaction: An Attempted Reservation of Rights, 46 Journal of the Missouri Bar 113, 115 (March 1990).
Missouri, however, has chosen to follow the minority, but better-reasoned, position that the uniform version of U.C.C. § 1-207 applies to accord and satisfaction transactions. Therefore this provision modifies the traditional outcome to permit the creditor to keep the money without losing his claim for the remaining amount alleged to be due. See Majestic Bldg. Materials, Inc. v. Gateway Plumbing, Inc., 694 S.W.2d 762 (Mo.Ct.App.1985).
In Majestic, a supplier sued on an account to recover $2,200 for gravel sold to defendant plumbing company. The plumbing company defended on the basis that it had forwarded a "full payment" check to the supplier with a notation on the back of the check stating the instrument was "payment in full and in full and final settlement of all claims and demands . . . against Gateway Plumbing . . ." (Id. at 763).
Prior to negotiating the check, the supplier added the following notation to its endorsement:
This check is accepted under protest and with full reservation of rights to collect the balance owing of $2,200.28. (Id. at 764)
The trial court held that U.C.C. § 1-207 was inapplicable to the "full payment" check, concluding it operated as a valid accord and satisfaction. The Court of Appeals specifically reversed on this issue, holding that the trial court erred as a matter of law. (Id. at 766). Thus, the supplier *778 was entitled to recover the balance of the claim, the reasonableness of which was not disputed.
Broadview Lumber has not disputed the reasonableness of Melloway's claim, which represents the balance owing on a Promissory Note originally in the amount of $14,257.80. Broadview Lumber merely disputed Melloway's negotiation of the "full payment" money order. As this Court holds that Melloway's negotiations of the money order containing a restrictive endorsement pursuant to U.C.C. § 1-207 bars an accord and satisfaction, Broadview Lumber does not have a bona fide dispute as to Melloway's claim. Therefore, the Court concludes that the petitioning creditors have met all the requirements of 11 U.S.C. § 303 for an involuntary petition.
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505 F.2d 926
Robert WEBSTER, Petitioner-Appellee,v.W. J. ESTELLE, Director, Texas Department of Corrections,Respondent-Appellant.
No. 74-2316.
United States Court of Appeals, Fifth Circuit.
Dec. 26, 1974.
John L. Hill, Atty. Gen., Larry F. York, Ben M. Harrison, Asst. Attys. Gen., Austin, Tex., for respondent-appellant.
Joe D. Clayton, Tyler, Tex. (Court-appointed), for petitioner-appellee.
Before BROWN, Chief Judge, and AINSWORTH and DYER, Circuit Judges.
AINSWORTH, Circuit Judge:
1
W. J. Estelle, Director of the Texas Department of Corrections, appeals from the granting of habeas corpus to petitioner Robert Webster. Petitioner was convicted of theft in Texas in 1968. At his punishment hearing the state court applied the Texas Habitual Criminal Act1 to set his sentence at life imprisonment. One of the offenses submitted to the court as a basis for enhancement of punishment was Webster's conviction of robbery by assault on March 25, 1938. Webster's sole contention in his habeas petition was that the 1968 sentence was unconstitutionally enhanced because the 1938 conviction was based on an uncounseled guilty plea. The District Court accepted petitioner's allegations and granted the habeas petition. We reverse.
I.
2
The importance of the right to be represented by legal counsel in a criminal proceeding and to be provided with counsel if indigent is beyond dispute. See Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963). An uncounseled conviction cannot be used directly as a basis of punishment or indirectly as a basis for enhancement of punishment. Burgett v. State of Texas, 389 U.S. 109, 88 S.Ct. 258, 19 L.Ed.2d 319 (1967). The right of indigent defendants to have counsel appointed, as announced in Gideon v. Wainwright, supra, has been held to apply retroactively to both direct and collateral uses of pre-Gideon uncounseled convictions. See, e.g., Doughty v. Maxwell, 376 U.S. 202, 84 S.Ct. 702, 11 L.Ed.2d 650 (1964); Loper v. Beto, 405 U.S. 473, 92 S.Ct. 1014, 31 L.Ed.2d 374 (1972). The question we confront in this case is whether petitioner proved that he was in fact without counsel at the time of his guilty plea in 1938.
3
The fundamental rules by which petitioner's claim must be judged are well settled. The burden of proof is on the petitioner in a habeas corpus proceeding. Swain v. Alabama, 380 U.S. 202, 226-227, 85 S.Ct. 824, 839-840, 13 L.Ed.2d 759 (1965); Williams v. Estelle, 5 Cir., 1974, 500 F.2d 206 (1974); Richardson v. State of Texas, 5 Cir., 1970, 425 F.2d 1372, 1373. A judgment of conviction must be presumed to have been reached in accordance with due process until otherwise shown. Johnson v. Zerbst, 304 U.S. 458, 468, 58 S.Ct. 1019, 1025, 82 L.Ed. 1461 (1938); United States v. Marcello, E.D.La., 1962, 210 F.Supp. 892, aff'd 5 Cir., 1964, 328 F.2d 961.
4
If the result of the adjudicatory process is not to be set at naught, it is not asking too much that the burden of showing essential unfairness be sustained by him who claims such injustice and seeks to have the result set aside, and that it be sustained not as a matter of speculation but as a demonstrable reality.
5
Adams v. United States, 317 U.S. 269, 281, 63 S.Ct. 236, 242, 143 A.L.R. 435 (1942). See Stroble v. California, 343 U.S. 181, 198, 72 S.Ct. 599, 607, 96 L.Ed. 872 (1952); Mallonee v. Lanier, 5 Cir., 1966, 354 F.2d 940; United States v. Branan, 6 Cir., 1972, 457 F.2d 1062, 1066; Barbara v. Johnson, 6 Cir., 1971, 449 F.2d 1235, 1237; United States ex rel. Stickler v. Tehan, 6 Cir., 1966, 365 F.2d 199, 201; United States ex rel. Castillo v. Fay, 2 Cir., 1965, 350 F.2d 400, 401.
6
Although the District Court did not directly address the question of the burden of proof, its opinion suggests the court believed either that the State must bear the burden of proving petitioner had counsel, or that once petitioner alleged lack of counsel, the burden of proof shifted to the State.2 In Gutierrez v. Estelle, 5 Cir., 1973, 474 F.2d 899, 900, we concluded that the petitioner 'properly put the state to its burden of defending the prior enhancing conviction.' We believe this statement merely acknowledges that a conviction used collaterally is subject to the same constitutional scrutiny given to a conviction that is itself the direct basis of punishment. Gutierrez does not place the burden of proof on the state in post-conviction proceedings attacking collateral use of a conviction. See Wesley v. State of Alabama, 5 Cir., 1974, 488 F.2d 30, 31.
II.
7
With these principles in mind, we turn to the record and ascertain that the District Court erroneously interpreted the evidence. Petitioner's case rested entirely on his uncorroborated testimony that he was not represented by counsel when he pleaded guilty. Against this testimony the State offered documentary evidence that counsel was appointed for petitioner. The indictment in petitioner's case bears the notation 'Attorneys-- Bell and Meyer.' Bell is the name of a prosecutor assigned to the court in which petitioner pleaded guilty. Meyer was apparently a reference to a defense counsel. The Criminal Docket Sheet on which petitioner's guilty plea is recorded bears the same notation, as does the Criminal Docket for that court. The Docket Sheet also reveals that attorney Meyer represented a defendant in another case heard that same day. Finally, the Judgment and Sentence form recites that Webster 'appeared in person and by counsel.'
8
The District Court considered this evidence insufficient to establish that petitioner was represented by counsel, citing Gutierrez v. Estelle, 5 Cir., 1973, 474 F.2d 899, 900, and Dulin v. Henderson, 5 Cir., 1971, 448 F.2d 1238. In Dulin it was undisputed that no attorney appeared for the defendant. The only issue was whether he had waived his right to counsel. See United States v. Lewis, 5 Cir., 1973, 486 F.2d 217; Craig v. Beto, 5 Cir., 1972, 458 F.2d 1131. In Gutierrez we said that '(a) minute entry alone is insufficient to prove previous representation by counsel . . ..' The entry referred to there was only a form recitation that the defendant 'appeared in person and by counsel.' Similarly in Loper v. Beto, 405 U.S. 473, 92 S.Ct. 1014, 31 L.Ed.2d 374 (1972), which we relied on in Gutierrez, there was no indication in the court records that defense counsel had been appointed. See Henley v. Ellis, 5 Cir., 1956, 228 F.2d 657; Brown v. United States, 4 Cir., 1973, 483 F.2d 116, 121. In this case we have three documents recording the names of the attorneys.
9
On facts similar to those in the present case we recently affirmed a denial of habeas corpus relief. In Jiles v. Beto, 5 Cir., 1971, 442 F.2d 569, petitioner alleged lack of counsel. The State offered the trial judge's marginal notations of the names of the attorneys on court records, although the records themselves carried no reference to the attorneys, both of whom were shown to be practicing in the jurisdiction at the time of petitioner's guilty plea. In the present case we have, in addition to marginal notations on the docket sheet, an official entry in the docket book and a notation on the indictment; and the fact that at least six attorneys named 'Meyer' were practicing in Texas in 1938.
10
We believe the District Court gave insufficient weight to the State's documentary evidence. Official records are entitled to a presumption of regularity. See Williams v. Babineaux, 5 Cir., 1966, 357 F.2d 481, 482; United States ex rel. Rambert v. New York, 2 Cir., 1966, 358 F.2d 715, 717; United States ex rel. Machado v. Wilkins, 2 Cir., 1965, 351 F.2d 892, 894. The admissibility of such records rests on the presumption that sworn public officials faithfully execute their duties. 'The official duty and the habit of honesty and accuracy in the performance of such duties supply the element of special trustworthiness.' C. McCormick, Law of Evidence 291 (1954). The same special reliability that warrants relaxing the hearsay rule as to these records also warrants according them great evidentiary weight.
11
The State also offered the deposition of Spurgeon E. Bell, the prosecutor at petitioner's guilty plea and later Chief Justice of the Court of Civil Appeals in Houston, Texas. Chief Justice Bell testified that although he had no specific recollection of petitioner's 36-year-old conviction, it was the uniform practice of the Criminal District Court to appoint counsel for indigent defendants. He also stated he was familiar with the practices of the judges in that court, one of whom took petitioner's plea,3 and that these judges regularly appointed counsel for indigent defendants. In light of Chief Justice Bell's description of the procedures in that court, it is very unlikely that counsel was not appointed for petitioner. He also testified that he recalled a man named Meyer who regularly represented defendants in the Criminal District Court in Houston.
12
The District Court discounted Bell's testimony because the prosecutor had no specific recollection of petitioner's case and because he 'testified that he was certain that the man he remembered named Meyer was not one of the six attorneys who were listed by the Supreme Court as licensed to practice prior to 1939.' We believe Chief Justice Bell's deposition deserved more weight than the District Court gave it. Bell did recall specifically an attorney named Meyer appearing frequently in the criminal court, and although a specific recollection of petitioner's case would have been virtually conclusive evidence, the testimony of this highly reputable witness was still of considerable probative value.
13
We also question the District Court's conclusion that Bell was certain none of the Meyers licensed by the Texas Supreme Court in 1938 was the Meyer who appeared in criminal court. When asked whether he was confident that neither of two of the Meyers was the correct one, Bell answered yes, but also stated that he knew nothing more than what he had stated in an earlier deposition. In that deposition he stated only that he could not confirm that any of the Meyers listed in Martindale-Hubbell as practicing in Houston in 1938 was definitely the Meyer who appeared in criminal court. When shown the list of attorneys licensed by the Texas Supreme Court in 1938, Justice Bell stated that the initials of two of the six made no impression on him one way or the other. Moreover, the Clerk of the Texas Supreme Court certified that, prior to the organization of the State Bar of Texas in 1939, state district courts were authorized to issue licenses to practice law. The Clerk indicated that the records of pre-1939 licensing were quite possibly incomplete.4
14
Our review of the documentary and testimonial evidence clearly shows that the judgment of the District Court cannot stand. We note, however, that even if the judgment below were affirmed, there would be no effect on petitioner's sentence. Petitioner has a long list of prior convictions: robbery with firearms, 2/17/38, 4/27/38, 5/17/38; theft from person, 3/12/38; escape, 5/1/57; assault with a prohibited weapon, 5/1/57; robbery by assault, 5/1/57; burglary, 5/1/57; felony theft, 5/1/57; driving while intoxicated (repetition), 1/23/67; theft, 11/4/46. Where enhancement could have been based on other convictions, reliance on an invalid one is harmless. Cline v. United States, 5 Cir., 1972, 453 F.2d 873.
15
Reversed.
1
Vernon's Tex.Rev.Code Ann. 12.42:
Penalties for Repeat and Habitual Felony Offenders . . .. (d) If it be shown on the trial of any felony offense that the defendant has previously been finally convicted of two felony offenses, and the second previous felony conviction is for an offense that occurred subsequent to the first previous conviction having become final, on conviction he shall be punished by confinement in the Texas Department of Corrections for life.
2
The court stated:
This court is unable to say that petitioner was represented by counsel at either the convicting or sentencing stages of his 1938 plea of guilty . . ..
Since this court concludes that the evidence fails to show that petitioner was afforded counsel at both the convicting and sentencing stages of the criminal process, the enhancement sentence of life imprisonment relying on this prior conviction is invalid.
3
It was unclear from the records and testimony which judge took petitioner's plea in 1938
4
The District Court, apparently relying on Bell's inability to identify any of the Meyers listed on the Supreme Court's list as the Meyer he recalled, stated that the State had failed to show that petitioner was represented by a licensed attorney. Bell also testified, however, that Meyer was generally accepted as a licensed attorney in the Criminal District Court
The court below also held that the State of Texas had not proved that even if an attorney was appointed, he actually appeared with petitioner at the entry of the plea. We are at a loss to understand, however, what further proof of actual appearance the State could ever offer in a case in which the disputed conviction is based on a guilty plea. Trial judges and prosecutors-- including those blessed with sufficient longevity to be able to testify concerning 36-year-old convictions-- cannot possibly recall the specific facts of each of the staggering numbers of guilty pleas they observe during their careers.
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317 F.2d 44
NATIONAL LABOR RELATIONS BOARD, Petitioner,v.COLVERT DAIRY PRODUCTS COMPANY, Respondent.
No. 7090.
United States Court of Appeals Tenth Circuit.
May 7, 1963, Rehearing Denied June 12, 1963.
Melvin J. Welles, Washington, D.C. (Stuart Rothman, Dominick L. Manoli, Marcel Mallet-Prevost, James C. Paras and Glen M. Bendixsen, Washington, D. C., were with him on the brief), for petitioner.
Edward E. Soule, Oklahoma City (Louis A. Fischl, Ardmore, Okl., was with him on the brief), for respondent.
Before BRATTON, LEWIS and HILL, Circuit Judges.
LEWIS, Circuit Judge.
1
The National Labor Relations Board petitions this court under Sec. 10(e) of the National Labor Relations Act, 29 U.S.C.A. 160(e), for enforcement of its order of April 25, 1962, directing respondent to cease and desist from certain designated activities and requiring the usual affirmative requirements of posting. The order also carries a provision setting aside an election held August 2, 1961, and a remand of this aspect of the proceeding to Regional Director for the purpose of conducting a new election.
2
In issuing its order the Board adopted the findings and recommendations of the trial examiner who concluded that respondent had illegally affected the result of an election in violation of Sec. 8(a)(1) of the Act by coercive questioning of its employees and by the prohibited use of photographic equipment in pre-election activities. The respondent resists enforcement, asserting that the Board committed fundamental error in its consideration of the evidence; that the evidence in insufficient to premise findings of violation of Sec. 8(a)(1); and that the order of the Board requiring a new election should be set aside and declared void.
3
The proceedings before the Board were a consolidation of two cases, separately docketed and numbered. Case No. 16-CA-1532 charged respondent with committing unfair labor practices in its pre-election activities; Case No. 16-RC-2910 petitioner the Board to set saide the August 2, 1961, election. Since the same evidence was pertinent to the issues of both cases the matters were consolidated for hearing. The Board's present petition seeks enforcement of its order only as to the issues presented in Case No. 16-CA-1532. This court consequently lacks present jurisdiction to give consideration to respondent's contention that the Board erred in setting aside the results of the August 2 election and directing that a new election be held. And, for reasons that will become apparent, we do not give consideration to respondent's assertion that the evidence is insufficient to sustain the Board's findings that respondent committed unfair labor practices as charged and found in Case No. 16-RC-2910.
4
Early in 1961, Local 670 of the International Union of Operating Engineers, AFL-CIO, began a campaign to organize some 100 production and maintenance employees working at respondent's milk processing and distribution plant at Ardmore, Oklahoma. On April 25, 1961, having complied with required procedures, the union petitioned for a Board election and a date was set. Thereupon both respondent and the union engaged in extensive activities intended to influence the employees in the exercise of their votes. On May 31, July 18, and July 31, respondent's general manager read to the assembled employees prepared statements expressing management's opinion regarding the union's attempt to organize the plant. In the trial examiner's evidentiary findings, adopted in toto by the Board, the examiner bottoms his consideration of the credibility of the conflicting testimony of witnesses and the weight to be given to the evidence thus:
5
'* * * The statements read by Respondent's representatives to the assembled employees clearly conveyed to them Respondent's position succinctly stated in the sentence in the prepared statement read to the employees on May 31, 1961, that, 'We are convinced that there is no place for a union here and that all of you will be much better off without one.'
6
'The Examiner does not find that Respondent committed any unfair labor practices or engaged in conduct illegally affecting the results of the Board-conducted election by assembling the employees and reading to them the prepared statements. However, this conduct is evidence of an antiunion animus on the part of Respondent and its officers. It will be considered as background evidence in appraising the conduct of Respondent alleged to constitute unfair labor practices and conduct illegally affecting the results of the Board election.'
7
It seems patently clear that the trial examiner has taken the lawful statements of respondent, protected as they are by the First Amendment and specifically authorized by Section 8(c) of the Act,1 as a basis authorizing an unfavorable inference in the appraisement of respondent's conduct and the credibility of its witnesses. In the case at bar the burden so imposed upon respondent may have been determinative of the ultimate issues and we hold it to be specific error to have so premised the findings of unfair labor practices. The record indicates that credibility and varying permissible inferences that might be drawn from the undisputed facts were of undeniable importance in reaching a result unfavorable to respondent. But in so holding we are not inferring that evidence of attitude is not material to or admissible in the determination of intent or the judging of credibility in labor cases. It often is. Nor, by referring to the error of the Board as being specific, do we intend an indication that the case at bar has particulars which limit our views to peculiar facts. We consider the case at bar to be typical.
8
It has often been said that the general purpose of the National Labor Relations Act is to balance the interests of management, labor, unions and the public interest so as to accomplish harmony in furtherance of the welfare of each. In broad outlook a mutuality of interests exists but in the administration of the Act in specific cases the reality is a hard, and too often, bitter conflict of interest. The campaign immediately preceding a Board election is usually such a situation and the Act provides both affirmative rights and prohibited acts governing the conduct of both management and union. Each is accorded the right of persuasion and denied the use of coercion. But it would be unrealistic indeed to expect management to use words of conviction in an effort to persuade an employee to vote against unionization without the presence of 'antiunion animus.' In the matter of the election the management is, of course, antiunion. The union is equally anticompany. It is necessarily so. And hostility toward each other in such regard is not an unfair labor practice.
9
The Act (sec. 8(c)) specifically provides that privileged communications between employer and employee shall not be evidence of an unfair labor practice. To allow the privileged communications to become an instrument of destruction by indirection is to frustrate the right of free speech and the privilege of persuasion. Management cannot effectually attempt lawful persuasion if by so doing there is an ever-present penalty of 'antiunion animus' for inherent in every campaign that is strenuously but lawfully waged is the expressed resistance to the views and claims of the opponent. The weakness of contra-position is often a premise of successful persuasion.
10
In the case at bar the Board specifically acknowledges that the remarks of the general manager were privileged and lawful but nevertheless uses them as damaging background evidence in its consideration of the charges of violation of Sec. 8(a)(1). To do so, is, in the language of the Third Circuit, an 'attempt to hoist by its own boot-straps, so to say, its own findings * * *.' N.L.R.B. v. Rockwell Manufacturing Company, 271 F.2d 109. The right of management to freely express its views in opposition to unionization cannot be burdened by indirection and thus destroyed through technical rationalization. We will not enforce orders so premised.
11
Enforcement is denied.
12
BRATTON, Circuit Judge (concurring in part and dissenting in part).
13
I share with the majority the view that the court is presently without jurisdiction to review the proceedings involving the selection of a bargaining representative. And I also share with the majority the view that mere general statements of an official or supervising representative of an employer to its assembled employees to the effect that it disfavors the union as their bargaining representative, standing alone and without more, does not constitute an unfair labor practice.
14
But this case does not turn upon whether general statements of that kind, standing alone and without more, suffice to constitute an unfair labor practice. The boundaries of the case are not restricted to those narrow limits. In addition to making general statements indicating hostility to the union as bargaining agent for the employees, the statement was made in private conversation to an employee that if the union came in the employees stood a chance to lose benefits under the plan and program of the company. A day or two before the election a supervising representative of the company took pictures of representatives of the union passing out literature to employees of the company at points immediately adjacent to the plant of the company. And the representative also took a picture of an automobile belonging to a representative of the union which was parked near the property of the company. While the general statements of hostility to the union did not of themselves constitute an unfair labor practice, the trial examiner was warranted in taking them into consideration as background tending to lend corroborative support to the evidence that the statement was made to the employee and the pictures were taken, not innocently or in the abstract, but with the intent and purpose of producing coercive influence or pressure upon the employees in the selection of their bargaining representative.
15
I think the order should be enforced.
1
This section provides:
'The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall nor constitute or be evidence of an unfair labor practice under any of the provisions of this subchapter, if such expression contains no threat of reprisal or force or promise of benefit.'
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208 S.W.3d 173 (2005)
Kevin McKENZIE, a/k/a Keith Barrett, Appellant,
v.
STATE of Arkansas, Appellee.
No. CR 03-775.
Supreme Court of Arkansas.
May 12, 2005.
*174 Leah Chavis, Jacksonville, for appellant.
Mike Beebe, Att'y Gen., by: Misty Wilson Borkowski, Ass't Att'y Gen., Little Rock, for appellee.
*175 TOM GLAZE, Justice.
Appellant Kevin McKenzie was convicted of possession of marijuana and cocaine with intent to deliver and was sentenced to a total of sixty years' imprisonment. The court of appeals certified McKenzie's appeal to this court because the appeal presents an issue needing clarification or development of the law regarding the constructive possession of contraband. See Ark. Sup.Ct. R. 1-2(b)(5).
In his first point on appeal, McKenzie argues that the trial court erred in denying his directed-verdict motion because the evidence was insufficient to demonstrate beyond a reasonable doubt that McKenzie constructively possessed the contraband. In reviewing a challenge to the sufficiency of the evidence, we determine whether the verdict is supported by substantial evidence, direct or circumstantial. Garner v. State, 355 Ark. 82, 131 S.W.3d 734 (2003); Polk v. State, 348 Ark. 446, 73 S.W.3d 609 (2002). Substantial evidence is evidence forceful enough to compel a conclusion one way or the other beyond suspicion or conjecture. Id. We view the evidence in the light most favorable to the verdict, and only evidence supporting the verdict will be considered. Id. Circumstantial evidence provides the basis to support a conviction if it is consistent with the defendant's guilt and inconsistent with any other reasonable conclusion. Id.
We have explained that, in constructive possession cases, the State need not prove that the accused physically possessed the contraband in order to sustain a conviction for possession of a controlled substance if the location of the contraband was such that it could be said to be under the dominion and control of the accused. George v. State, 356 Ark. 345, 151 S.W.3d 770 (2004). Constructive possession may be established by circumstantial evidence. Polk, supra. When seeking to prove constructive possession, the State must establish that the defendant exercised care, control, and management over the contraband. Id. This control can be inferred from the circumstances, such as the proximity of the contraband to the accused, the fact that it is in plain view, and the ownership of the property where the contraband is found. George, supra; Nichols v. State, 306 Ark. 417, 815 S.W.2d 382 (1991).
Further, while this court does not appear to have addressed this particular question in the context of a driver of an eighteen-wheel tractor-trailer, we have opined that joint occupancy of an ordinary vehicle (such as a car) standing alone, is not sufficient to establish possession or joint possession. Mings v. State, 318 Ark. 201, 884 S.W.2d 596 (1994). There must be some other factor linking the accused to the drugs. Id. Other factors to be considered in cases involving automobiles occupied by more than one persons are: (1) whether the contraband is in plain view; (2) whether the contraband is found with the accused's personal effects; (3) whether it is found on the same side of the car seat as the accused was sitting or in near proximity to it; (4) whether the accused is the owner of the automobile, or exercises dominion and control over it; and (5) whether the accused acted suspiciously before or during the arrest. Id.; see also Plotts v. State, 297 Ark. 66, 759 S.W.2d 793 (1988). Constructive possession may be established by circumstantial evidence, but when such evidence alone is relied on for conviction, it must indicate guilt and exclude every other reasonable hypothesis. Hodge v. State, 303 Ark. 375, 797 S.W.2d 432 (1990).
The evidence presented during the State's case-in-chief at McKenzie's trial was as follows: On September 23, 2001, Officer Greg Toland of the Arkansas Highway *176 Police was working at a weigh station in Crawford County. Toland pulled McKenzie over for a random inspection of his truck; when McKenzie showed Toland his log book, Toland noticed that McKenzie was two hours over his permissible drive hours. Toland also saw that McKenzie's bill of lading indicated that only two pallets had been picked up in California, which Toland thought unusual. Toland asked for consent to search the vehicle, which McKenzie granted.
McKenzie provided Toland with the key to open the trailer. When Toland and McKenzie opened the trailer, Toland noticed it was warmer than it should be, given that the bills of lading indicated that McKenzie was carrying lemons and grapefruit, which should have been stored at a temperature between thirty-seven and forty-five degrees, according to the loading sheet. After noticing the temperature, Toland saw that somebody had been on top of the load of produce, "like they had been crawling from the back to the front," and the boxes were "mashed down." Toland shone his flashlight underneath the pallets; at the very front, far end of the truck, he saw some green and black material that turned out to be duffel bags. Toland said that there was a "space on the left hand side, where you could see all the way down," and at the front, there was a stack of empty pallets.
Toland called for back-up, because McKenzie had a passenger in the cab of his truck. When Officer Jeff Smith of the Crawford County Sheriff's Department arrived, the two proceeded to the front of the trailer and started taking pallets off the top of the duffel bags; then they opened the bags and found 334.4 pounds of marijuana.[1]
Jack Stepp, assistant safety supervisor for the Arkansas Highway Police, also testified for the State. Stepp testified about drivers' responsibilities under Department of Transportation regulations, stating that "the driver is ultimately responsible for [the] load" in his trailer, and that "[w]ith respect to produce, if there is a seal and a lock on the load, the driver is responsible for putting it there," although it was not common for a shipper of produce to lock the load. It was so unusual, Stepp testified, that he could not recall ever seeing a lock on a load of produce in his fifteen years of experience. Stepp further stated that it was uncommon to have the temperature at sixty-one degrees for a load of produce, and that it was "not a common trucking practice to have a load crawled on top of because it would damage the produce." Of the five or six trucks Stepp had seen where someone had crawled on top of the produce, he said, "all of them were hauling illegal controlled substances."
We believe that this evidence, viewed in the light most favorable to the State, supports the jury's finding of guilt. As mentioned above, there have been no other Arkansas cases involving constructive possession of contraband in a tractor-trailer or eighteen-wheeler, but cases from federal courts of appeal are instructive. For example, in United States v. Sanchez, 252 F.3d 968 (8th Cir.2001), the Eighth Circuit Court of Appeals affirmed a conviction for possession of marijuana with intent to deliver. In that case, the facts showed that appellant Sanchez was driving a tractor-trailer; at a weigh station, Missouri State Highway Police Officer John Adams stopped the truck and decided to perform a safety inspection. Adams became suspicious *177 because the trailer lacked proper registration; the bill of lading indicated that Sanchez was hauling onions from Springer, Oklahoma (despite the fact that Adams had never seen produce that originated in Springer, Oklahoma); the weight on the bill of lading did not match the weight on the scales; the onions were being refrigerated, even though it was November; and the trailer was only half-full, despite Sanchez's assertions that he was traveling all the way to the east coast. In addition, Adams later testified that Sanchez appeared nervous and had a difficult time sitting still while the two spoke. Sanchez, 252 F.3d at 970.
A second officer arrived and asked permission to search the trailer; Sanchez gave the officer a key. When the officer looked in the trailer, he became suspicious that a false wall had been built into the trailer, because there was new metal trim that was out of keeping with the rest of the truck. Information that Sanchez gave to the officers about his trip eventually turned out to be false, such as the fact that the company for which Sanchez claimed to work indicated that they had never met Sanchez. In addition, a search of the cab turned up a Home Depot receipt that reflected the recent purchase of items consistent with those necessary to build a false compartment. Id. at 971.
In affirming, the Eighth Circuit held that Sanchez had sole control and dominion over the vehicle in which the contraband was discovered; Sanchez had given false and evasive answers in response to police questioning; and his testimony at trial was inconsistent with the responses he had given to police. Id. at 972.
In another Eighth Circuit case, that court affirmed a conviction for possession of cocaine with intent to distribute. United States v. Johnson, 285 F.3d 744 (8th Cir.2002). There, appellant Johnson was stopped at a weigh station; the officer present discovered that Johnson's log book was missing information for three days of his trip. The log book did reflect, however, that Johnson had stopped in El Paso, Texas, which was several hundred miles out of the way for his stated itinerary of Bakersfield, California, to "someplace in Connecticut or Maryland." The officer also noticed that the trailer was locked with a lock "of a type impervious to bolt cutters, and the truck's vent door, a small door permitting inspection of the load, was locked." Johnson, 285 F.3d at 746. When the officer finally got up into the back of the trailer and began moving boxes, Johnson jumped up into the truck to move the boxes around. Id. at 747. The officer eventually discovered forty boxes containing approximately 1,000 bricks of cocaine weighing 2,213 pounds. Id.
At trial, Johnson's passenger, Joseph Heck, testified that he and Johnson had moved some of the melons around "in order to create an igloo-shaped space for a load Johnson said they would add in El Paso." Id. at 748. Heck also testified that he saw Johnson meet with several Hispanic men in El Paso, where the men loaded forty cardboard boxes into the truck. After leaving El Paso, Heck said, Johnson made several phone calls during which Heck heard him say, "We're on time," and "She's on board." Id. Given all of this evidence, the Eighth Circuit concluded that the jury was presented with "ample evidence that Johnson was aware of the cocaine in the truck and was transporting it as part of an agreement to distribute it[.]" Id. at 750.
Similarly, in United States v. Morales, 854 F.2d 65 (5th Cir.1988), the Fifth Circuit Court of Appeals held there was sufficient evidence of constructive possession to support appellant Morales's conviction, where there was testimony that Morales *178 had dominion and control over the truck and trailer he was driving from the time he picked it up until he was stopped; further, an employee who oversaw the loading of the trailer testified that he saw no marijuana in the trailer when it was loaded, nor did he see anyone else in the trailer until Morales picked it up and drove away in it. Morales, 854 F.2d at 68. Thus, the court concluded, the jury could reasonably infer that the marijuana was placed inside the truck after Morales took possession of it, and that Morales had either actual or constructive knowledge of its presence. Id.
In the present case, McKenzie testified that he did not observe or oversee the loading of his truck, and was unaware of the presence of the contraband in the trailer he was hauling. However, this court has made it patently clear that the jury is the sole judge of the credibility of the witnesses and the weight to be given their testimony, see Garner v. State, 355 Ark. 82, 131 S.W.3d 734 (2003), and a jury is not required to believe a defendant's self-serving testimony. See Sera v. State, 341 Ark. 415, 17 S.W.3d 61 (2000).
The State's evidence showed that McKenzie had the only key to a locked trailer, and the fact that the trailer was locked was very unusual, as it only contained produce. In addition, the pallets appeared to have had someone crawl over them; as McKenzie was the only person with a key to the trailer, the jury could reasonably have concluded that McKenzie was the person who crawled on the fruit to reach the contraband at the far end of the trailer. Further, McKenzie's testimony that he did not oversee the loading of the trailer was contradicted by the State's evidence that it was an established industry practice for the driver of a truck to observe the loading of his trailer. A defendant's improbable explanation of suspicious circumstances may be admissible as proof of guilt. See Baughman v. State, 353 Ark. 1, 110 S.W.3d 740 (2003); Stephens v. State, 328 Ark. 81, 941 S.W.2d 411 (1997). In sum, we conclude in this constructive possession case that the State proved other factors linking McKenzie to the contraband, and we therefore reject his challenge to the sufficiency of the evidence.
In McKenzie's second point on appeal, he argues that the trial court erred in allowing the State to leave the marijuana out in the open during the trial. After the jury was selected for McKenzie's trial, the court asked counsel if there was "anything that needs to be taken up" before opening arguments began. McKenzie's attorney replied, "[W]e've got to find a place to put all this marijuana because, you know, obviously, it's permeating the air because of the fact that it's open." Counsel further objected on the grounds that the strong odor would "give the jury the impression that that's the condition it was in when it . . . was discovered, and that's not true." The court stated that it "[didn't] see any problem with it. It can stay where it is. I need to get on with the trial."
During trial, Dan Hedges of the State Crime Laboratory testified that the packages of marijuana were not open when they were delivered to his laboratory, and that the odor was caused by the "terpenes coming off the plant material." Hedges noted that when the packages were sealed up, "some people would smell something, and some people wouldn't. Some people probably wouldn't smell a thing." Just after Hedges's testimony, the court called the attorneys to the bench, whereupon the following colloquy occurred:
COURT: Is any juror I noticed some were using tissues. Is any of the jurors having trouble with the smell?
JUROR: I can't smell anything. I've got allergies; that might be the reason.
*179 COURT: When we take a break, I'd like for it to be removed. If they're not having an immediate problem, I'll leave it here. At the break, let's have it moved out.
On appeal, McKenzie argues that the trial court abused its discretion in allowing the marijuana to remain in the courtroom during the trial. He asserts that the State's entire theory was based on constructive possession, and suggests that the jury could have reasoned, based on the very strong smell in the courtroom, that McKenzie must have been able to smell the marijuana in the truck and, thus, have knowledge of its presence. The State responds that the marijuana was not, as McKenzie asserts, in the courtroom for the "entire first day of trial," pointing out that the record shows it was brought into the courtroom at 2:15 p.m. and was removed during a break between 4:45 and 5:00 p.m. The State further suggests that this was not an improper tactic, but was instead a critical element of the prosecution's case, as three of the State's four witnesses directly testified about the marijuana. There is no reported Arkansas case involving the odor of marijuana in the courtroom. McKenzie relies on United States v. Garcia, 986 F.2d 1135 (7th Cir.1993), in which the Seventh Circuit Court of Appeals held that the trial court erred in allowing containers of marijuana to "remain open and emit the odor of marijuana during the defendant's case in chief"; the court noted that the problem was compounded by the fact that "the odor of marijuana in the truck's cab was a key issue." Garcia, 986 F.2d at 1142. The court opined that the government's refusal to close the containers appeared to be "no more than an effort to produce a condition which supported its theory of guilt[.]" Id.
However, when the Garcia case was remanded to the federal district court, that court noted that it was "disturbed" by the Seventh Circuit's ruling regarding the odor of marijuana. United States v. Garcia, 818 F.Supp. 238 (C.D.Ill.1993). The district court wrote that it had presided over the trial and could "categorically state that there was no `strong, pungent odor of marijuana' pervading the courtroom," Garcia, 818 F.Supp. at 240, and criticized Garcia for having "dissembled" and "misrepresented" to the appellate court that the odor of marijuana permeated the courtroom. Id. The court also pointed out that Garcia did not object to the introduction of the physical evidence, and that marijuana, as a piece of evidence, was more probative than prejudicial. Id. Given the district court's clarifications of the facts of the Garcia case, McKenzie's reliance on the Seventh Circuit's ruling is inapposite.
Other state and federal courts have held that it is not error to permit open containers of marijuana to remain in the courtroom during trial. In United States v. Ramos Rodriguez, 926 F.2d 418 (5th Cir. 1991), the Fifth Circuit Court of Appeals held that the presence of 227 pounds of marijuana in the courtroom during trial was neither a violation of Fed.R.Evid. 403 nor a due process violation, as the marijuana remained in the courtroom no more than four hours, and there was no evidence that the government had acted in bad faith. In United States v. Dunn, 961 F.Supp. 249 (D.Kan.1997), a federal district court held that the odor of marijuana in the courtroom did not prejudice the defendant, where the marijuana had been properly admitted into evidence, and the defendant was able to argue to the jury that there was a difference in the "odor-producing circumstances of the marijuana's presence in the courtroom and its presence, wrapped in trash bags, in the trunk of a new, full-sized car." Dunn, 961 F.Supp. at 252. Finally, in Kalinosky v. State, 414 So.2d 234 (Fla.Ct.App.1982), a *180 Florida court of appeals held that there was no merit to Kalinosky's argument that his attorney had been rendered ill by the odor of the marijuana; the court did, however, "caution that the trial court and counsel should be continually conscious of maintaining a proper atmosphere of judicial decorum in the courtroom." Kalinosky, 414 So.2d at 235.
We cannot say that the presence and alleged odor of the marijuana in the courtroom during McKenzie's trial was unduly prejudicial. Only one juror responded to the court's question about jurors' using tissues, and that juror said that he had allergies and could not smell anything. Further, contrary to McKenzie's assertion in his brief, the forensic chemist did not specifically testify that the "marijuana odor" in the courtroom was "quite potent." As noted above, Dan Hedges testified that the odor in the courtroom was caused by the "terpenes," which were "quite potent." In any event, the court had the marijuana removed from the courtroom at the end of the testimony of the three witnesses who had been in contact with the marijuana. As such, there was no abuse of discretion in allowing the marijuana to stay in the courtroom during the first two and a half hours of the trial.
The final argument in this appeal concerns the prosecutor's cross-examination of McKenzie and his closing arguments to the jury. Although McKenzie acknowledges that his attorney never objected to either the cross-examination or the closing arguments, he contends on appeal that the prosecutor's errors were so flagrant and highly prejudicial in character as to have required the trial court to intervene on its own motion and admonish the jury to disregard the prosecutor's comments.
Before discussing the application of the so-called Wicks exceptions to our contemporaneous objection rule, see Wicks v. State, 270 Ark. 781, 606 S.W.2d 366 (1980), we set out the prosecutor's objectionable comments in their entirety. During the State's cross-examination of McKenzie, the two following sets of questions occurred the first involved McKenzie's mother, and the second dealt with McKenzie's knowledge of the policies of the fruit-packing companies for whom McKenzie was driving. Prosecutor Marc McCune's exchange with McKenzie about his mother was as follows:
Q: You've testified that you were a law enforcement officer.
A: Law enforcement, yes.
Q: Would it surprise you if your mom said you were not in law, never were in law enforcement?
A: My mom could never tell you that.
Q: Your mom told me that.
A: My mom could never tell you that.
Q: Your mom's name is Maude Ford.
A: My mom could never tell you that. I spent five years in the military law and with law enforcement.
Q: Your mom's name is Maude Ford:
A: Correct.
Q: Lives in Pompano Beach, Florida?
A: My mother does not live in Pompano Beach, Florida. My mother lives in Hollywood, Florida.
Q: Hollywood, Florida? Would it surprise you that she said you left because you were accused of a crime in Kingston, Jamaica?
A: My mom could never tell you that I was accused of a crime in Kingston, Jamaica, Mr. McCune.
Q: Would it surprise you that I talked to your mom on the phone?
A: Well, Mr. McCune, you could not have talked to my mom on the phone. My mom does not have a *181 phone. You might have got that communication because I communicated with my mom from the mail while I'm here.
Q: Would it surprise you that I looked up your mom's name on the internet, and your mom has a phone?
A: My mom does not have a phone, Mr. McCune. I would have called her from if my mom had a phone, I would have called her. And I know that the phone record doesn't show that I ever called my mom since I'm here, and that is my mom.
Q: Right. And, so, it doesn't surprise you that your mom said you were accused of a crime in Kingston, Jamaica, and that's why you came to America?
A: I never . . . was accused of a crime in Jamaica. I spent five years in the military, and I happened to be . . . [to] help the DEA from here to put away people like politicians who are involved in drugs and er er gang leaders.
Q: Mr. McKenzie, would it surprise you that DEA said they had no record of your ever helping, assisting, or arresting anybody?
A: That could never be true, Mr. McCune, because DEA came to Jamaica back then in order for us to stop the flow of drugs coming from Jamaica to this country.
Q: Mr. McKenzie, my question is, would it surprise you that they have no record of you ever helping or assisting?
A: It would surprise me, because I helped.
Q: Okay. Thank you.
The next exchange occurred when McCune was asking McKenzie about McKenzie's response to the temperature variance in the back of the truck[2]:
Q: Wouldn't you think the fruit companies have a better knowledge of how to refrigerate fruit than you?
A: I have seen where shippers tell you to put your
Q: Mr. McKenzie, my question is, don't you think they would have a better knowledge than you, not other shippers, you?
A: I have better knowledge. I see where I have knowledge better than the shippers because they tell you to put to set the temperature at a certain degree, and it is wrong.
Q: Now, when you're loading, are you permitted to be back there and watch them load?
A: Most docks, you are not in California.
Q: I'm not talking about most docks. These loads you picked up.
A: I never did.
Q: Are you permitted?
A: You are not permitted.
Q: Not permitted?
A: Because of liability purpose. I was there.
Q: Would you be surprised if Blue Banner says they have posted signs, saying, stand back there and watch it and count it?
A: They never there was no sign that says, driver I see sign for liability purpose; the drivers are not permitted on the dock. You could get sued they could get sued for it.
*182 Q: Would it surprise you that Blue Banner said they had posted signs, saying to watch it?
A: It would surprise me.
Q: Would it surprise you that Ventura Pacific says that more than ninety percent of the drivers stand back in the loading docks and watch it and watch it be counted?
A: There was no reason when I went there, that was the reason why the loading had
Q: Mr. McKenzie, my question is, would it surprise you that Ventura Pacific says that more than ninety percent of their drivers watch it being loaded and counted?
A: It would surprise me, Mr. McCune, because there were signs there, that says that there is no drivers not permitted to be on the dock because of liability purpose.
Q: So, it would surprise you that if Ventura said the drivers are encouraged to observe the product as it is loaded, as they are solely responsible for their count and the method of loading?
A: It would surprise me because they didn't want you to be on the dock, in the first place; and then it was a contract between the shipper and receiver. There was no reason for me to be on the back[.]
Q: So Blue Banner and Ventura Pacific, they'd be lying if they said that you could stand back there and watch?
A: It's a surprise to me because the sign is there.
Q: Would it also surprise you that Ventura Pacific, in checking this load number, says, no locks or seals were applied to your trailer?
A: There's a contract between the shipper and the receiver. There was
Q: My question is, would it surprise you when they check their loading records, that no lock or seal was applied to your trailer?
A: It would surprise me because they gave me a lock to put on that trailer because of the contract between the shipper.
Q: Would it surprise you that Blue Banner does not lock or seal?
A: It surprises me because they do have a lock and seal.
Q: Would it surprise you that Ventura says, we do not use door locks under any circumstances?
A: It surprises me because they gave me a lock; they had a lock there.
* * * * * *
Q: So, it would surprise you when they say these companies say, we don't put locks or seals under any circumstances?
A: It would surprise me.
Q: Who opens up your doors?
A: When we back up there, somebody's there with a key because once you give them your load number and your shipping number
Q: Who opens up your doors? The question is, who opens up your doors?
A: They got a hand, somebody there, that comes out there with the key to open the door.
Q: Would it surprise you that Blue Banner and Ventura says [sic] that the driver backs it up, the driver opens the door, the driver pulls forward, and the driver closes the door?
*183 A: It surprises me, Mr. McCune, because on this particular load, this is exactly what took place.
Q: So these companies, again, would be lying?
A: [No oral response.]
Finally, we quote prosecutor McCune's statements made during his closing argument:
What did McKenzie put on the truck, a lock that he had the key to. Jack Stepp testified that in his fifteen years of experience, produce haulers driving trucks do not lock their trucks. Blue Banner and Pacific, they don't put any locks or seals on it because it's fruit. It's not like they're hauling TVs, it's not like they're hauling DVD players for Best Buy or something like that. It's true. They don't lock them. Blue Banner doesn't lock; Ventura Pacific doesn't lock.
* * * * * *
Then we use our common sense on who's responsible for the load. All the officers testified, even even McKenzie said that the driver's responsible for it. Ventura Pacific said over ninety percent of their drivers watch it because they're responsible. . . . Blue Banner says the drivers, they have signs posted up there saying, you need to watch it and you need to count because you're responsible.
(Emphasis added.) And during his rebuttal closing argument, McCune said the following:
[McKenzie] said that truck drivers, this is all standard procedure, they don't watch it, they don't pay attention. Well, what did Ventura Pacific say, that ninety percent of the drivers watch the loading procedure, watch it and count it. Mr. McKenzie got up there and said, oh, the companies open and close your doors; [but] both Blue Banner and Ventura Pacific said no, it's the driver's truck, they open it and they close their doors. Mr. McKenzie said they lock it, and there's a contract, where they've got this key that they just pass it on to these different companies. Well, Ventura Pacific on this particular load number said no locks or seals applied. Blue Banner says no locks applied.
(Emphasis added.)
Clearly, Mr. McCune was, in essence, testifying during his cross-examination of McKenzie; just as clearly, because the State never called a witness from either Blue Banner or Ventura Pacific to testify about the companies' shipping practices during the State's case-in-chief, McCune was arguing facts not in evidence during his closing arguments. The question, however, is whether this unprofessional conduct was so egregious as to give rise to the trial court's duty to intervene, without an objection from McKenzie's attorney, Charles Waldman.
In Wicks, 270 Ark. 781, 606 S.W.2d 366, this court recognized four exceptions to the contemporaneous objection rule, of which only the third one is relevant in the instant case. The Wicks court wrote as follows:
A third exception is a mere possibility, for it has not yet occurred in any case. That relates to the trial court's duty to intervene, without an objection, and correct a serious error either by an admonition to the jury or by ordering a mistrial. We implied in Wilson v. State, 126 Ark. 354, 190 S.W. 441 (1916), that no objection is necessary if the trial court fails to control a prosecutor's closing argument and allows him to go too far: "Appellant can not predicate error upon the failure of the court to make a ruling that he did not at the time ask the court to make, unless the remarks were so *184 flagrant and so highly prejudicial in character as to make it the duty of the court on its own motion to have instructed the jury not to consider the same. See Kansas City So. Ry. Co. v. Murphy, 74 Ark. 256 [85 S.W. 428 (1905)]; Harding v. State, 94 Ark. 65 [126 S.W. 90 (1910)]."
Wicks, 270 Ark. at 786, 606 S.W.2d 366.[3] Of particular importance for the present case, however, the Wicks court also rendered the following caution:
It must be noted that, first, we did not reverse the judgment in Wilson, and second, the quoted statement was taken essentially from the cited Murphy case, where we went on to say explicitly that if the court fails to restrain an improper argument, counsel should make a definite objection and call for a ruling. We have mentioned the Wilson suggestion in two recent cases, but in neither one was the judgment actually reversed because of the trial court's failure to act on its own motion. Ply v. State, 270 Ark. 554, 606 S.W.2d 556 (1980); Wilson & Dancy v. State, 261 Ark. 820, 552 S.W.2d 223 (1977). Thus, every statement of the original Wilson suggestion has been obiter dictum, because no judgment has been reversed on account of the trial court's failure to intervene. Such a reversal would necessarily be an extremely rare exception to our basic rule.
Id. at 786-87, 606 S.W.2d 366 (emphasis added); see also Vaughn v. State, 338 Ark. 220, 992 S.W.2d 785 (1999) (refusing to apply third Wicks exception in the case of allegedly improper cross-examination).
McKenzie concedes that this exception has still never been applied in the context of improper cross-examination or closing arguments. Indeed, this court recently pointed out in Anderson v. State, 353 Ark. 384, 108 S.W.3d 592 (2003), that the third Wicks exception has only been applied to cases in which a defendant's fundamental right to a trial by jury is at issue. Anderson, 353 Ark. at 398, 108 S.W.3d 592 (citing Grinning v. City of Pine Bluff, 322 Ark. 45, 907 S.W.2d 690 (1995); Calnan v. State, 310 Ark. 744, 841 S.W.2d 593 (1992); and Winkle v. State, 310 Ark. 713, 841 S.W.2d 589 (1992)). The Anderson court further pointed out that the third Wicks exception "has not been applied to consider possible prosecutorial errors in relation to cross examination, Vaughn v. State, [supra], to privileged testimony, Hale v. State, 343 Ark. 62, 31 S.W.3d 850 (2000), or closing arguments, Buckley [v. State, 349 Ark. 53, 76 S.W.3d 825 (2002)], and Greene v. State, 343 Ark. 526, 37 S.W.3d 579 (2001)." Id.
In Buckley, supra, this court rejected an argument that the prosecutor's reference to another criminal case was improper and fundamental error; there, the State had asked a character witness for the defense if she "`would be surprised' to find out that Buckley had provided drugs to `some person who was on a binge that killed somebody that night.'" Buckley, 349 Ark. at 69, 76 S.W.3d 825. Despite Buckley's protestations of prejudice, this court held that "this kind of alleged error must be preserved by contemporaneous objection." Id. at 70, 76 S.W.3d 825 (emphasis added). In addition, the Buckley court rejected an *185 argument that the third Wicks exception should apply where the State had allegedly argued outside the record by telling jurors that Buckley had been trafficking in drugs for ten years. Buckley did not object that the prosecutor was arguing outside of the record, and this court declined to conclude that this kind of error was so "fundamental" that the Wicks exception should apply. Id. at 69, 76 S.W.3d 825.
In the instant case, while we express serious concern over both prosecutor McCune's improper cross-examination and closing argument and defense attorney Waldman's obvious failure to object to the prosecutor's overly aggressive conduct, we must conclude that the errors of which McKenzie complains are not of the sort that fall into the third Wicks exception and that would require the trial court to intervene on its own motion. McKenzie's remedy, if any, is a petition for postconviction relief under Ark. R.Crim. P. 37.
Affirmed.
NOTES
[1] Dan Hedges, a forensic chemist at the Arkansas State Crime Lab, testified that he tested the matter removed from the truck, and it was indeed marijuana; there were also 4.26 pounds of cocaine.
[2] Despite this exchange, the State never introduced testimony or documentary evidence from either of the two California shipping companies that would have proven what their shipping practices were.
[3] The first exceptions occur 1) when the trial court fails to bring to the jury's attention a matter essential to its consideration of the death penalty itself; 2) when defense counsel has no knowledge of the error and hence no opportunity to object. The fourth exception arises in the context of Ark. R. Evid. 103(d), which provides that the appellate court is not precluded from taking notice of errors affecting substantial rights, although they were not brought to the attention of the trial court. See Wicks, 270 Ark. at 785-87, 606 S.W.2d 366; Anderson v. State, 353 Ark. 384, 108 S.W.3d 592 (2003).
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463 F.Supp. 155 (1979)
Hollis Wayne BRYANT
v.
Ray BLANTON, Governor of the State of Tennessee, William Leech, Attorney General of the State of Tennessee, Michael W. Whitaker, District Attorney General, Thomas Ray Morris, Judge of the General Sessions Court of Hardeman County, Hardeman County Ambulance Service, Mike Inlow, Director, Hardeman County Ambulance Service.
No. 78-1052.
United States District Court, W. D. Tennessee, E. D.
January 11, 1979.
*156 Thomas M. Daniel, Ratner, Sugarmon, Lucas & Henderson, Memphis, Tenn., for plaintiff.
Linda R. Butts, Asst. Atty. Gen., Nashville, Tenn., for Blanton, Leech, Whitaker, and Morris.
Charles M. Cary, Denton & Cary, Bolivar, Tenn., for Hardeman County Ambulance Serv. and Mike Inlow.
MEMORANDUM AND ORDER
McRAE, District Judge.
This action was brought pursuant to 42 U.S.C. § 1983 and § 1343(3) seeking declaratory and injunctive relief against several state and local defendants based upon the alleged unconstitutionality of T.C.A. § 53-5110(f)(1) (1977) which provides criminal sanctions for failure to pay for ambulance services. A previous claim for compensatory and punitive damages against county defendants for alleged violation of constitutional rights has been disposed of by consent Order of Dismissal with Prejudice as to those defendants.
Presently before the Court is plaintiff's Motion for Judgment on the Pleadings. In addition to this motion there is pending a Motion for Class Certification. However, in light of the Court's ruling on the present motion, as set forth herein, it is unnecessary to reach a determination regarding the class aspects of the claim.
In 1974, plaintiff, Hollis Wayne Bryant, received ambulance service from the Hardeman County Ambulance Service. As a result of his failure to pay for the services, plaintiff was prosecuted and convicted in General Sessions Court in May 1978, and was ordered to serve one day in jail in lieu of imposition of a fine and costs. Subsequent to that conviction, plaintiff received additional ambulance services for which, it is contended, he is subject to future criminal prosecutions pursuant to T.C.A. § 53-5110(f)(1) (1977). These facts are not contested by the defendant.
Constitutionality of T.C.A. § 53-5110(f)(1) (1977)
T.C.A. § 53-5110(f)(1) (1977) provides:
(f) It shall be a misdemeanor for any person to:
(1) Obtain or receive ambulance services without intending at the time of obtaining or receiving such services to pay, if financially able, the necessary charges. A determination that the recipient of such services has failed to pay for the services rendered for a period of sixty (60) days after request for payment, and that the recipient is financially able to do so, shall raise a presumption that the recipient of the services did not intend to pay for the services at the time they were obtained or received or ....
Upon careful consideration of the pleadings, the motion and memoranda in support thereof, the response, and a close examination of the challenged statutes, the Court finds the statutory presumption created by *157 the second sentence of subparagraph (f)(1) to be unconstitutional.
Defendant has not alleged or argued the constitutionality of T.C.A. § 53-5110(f)(1) (1977), but rather in the Answer of October 31, 1978, characterized the constitutionality of the statutory presumption within the section as "highly questionable" and without supporting empirical data.
In applying the "more likely than not" test of Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57 (1969), it is clear that the challenged statute creates an inference that one who fails to pay for ambulance services within sixty days of billing, though financially able, intended not to pay for the services at the time they were received. This presumption is invalid as it presents no rational connection between the fact to be proved, nonpayment for ambulance services, and the ultimate fact presumed, intent not to pay for the services when they were received.
There are a number of reasons why a recipient of services might fail or refuse to pay for services which bear no connection to intent to pay at the time the services were received. A recipient of services may be acting in reliance upon insurance coverage or a third party's representations of intended payment. Further, as noted by plaintiff, even a recipient's arbitrary refusal to pay for services may be totally unconnected with actual intent to pay or not to pay when the services were received. Thus, the inference created by T.C.A. § 53-5110(f)(1) (1977) is "`irrational' or `arbitrary,' and hence unconstitutional ...." Id. at 36, 89 S.Ct. at 1548.
Defendant has raised the doctrine of elision in its Answer, which provides the Court with a means to strike that part of T.C.A. § 53-5110(f)(1) (1977) which contains the unconstitutional presumption and yet preserve the validity of the remainder of the subsection. In Baxter v. Ellington, 318 F.Supp. 1079 (E.D.Tenn.1970), Judge Taylor noted the intention of the state legislature that all statutes in Tennessee are to be severable by virtue of T.C.A. § 1-310 (1977). In addition, Moore v. Fowinkle, 512 F.2d 629 (6th 1975) recognized the establishment of the elision doctrine in Tennessee and its consistent enforcement within the state. The Sixth Circuit summarized the application of the doctrine as follows:
When a statute contains one or more unconstitutional provisions, the obnoxious provisions will be eliminated and the statute sustained as to the rest, unless the invalid provisions are deemed so essential, and are so interwoven with others, that it cannot be reasonably presumed that the legislature intended the statute to operate otherwise than as a whole.
Id. at 632.
The Court finds that the doctrine of elision should be applied to this statute to strike the second sentence of the statute, which creates the constitutionally invalid presumption. The remaining portion of T.C.A. § 53-5110(f)(1) (1977) has not been challenged by plaintiff, nor is there any contention that failure to strike the section will adversely affect the relief requested.
Declaratory Judgment Provides Adequate Relief
Having declared the second sentence of T.C.A. § 53-5110(f)(1) (1977) to be unconstitutional, and having elided that sentence from the statute, the Court does not find it necessary to enjoin enforcement of the statute. See Doran v. Salem Inn, 422 U.S. 922, 95 S.Ct. 2561, 45 L.Ed.2d 648 (1975). In Poe v. Gerstein, 417 U.S. 281, 94 S.Ct. 2247, 41 L.Ed.2d 70 (1974) the Supreme Court reaffirmed its prior holding that, absent proof or allegation that defendants would not acquiesce in the district court's decision holding a challenged statute unconstitutional, declaratory relief was sufficient to protect the plaintiff's interest. See Douglas v. City of Jeannette, 319 U.S. 157, 165, 63 S.Ct. 877, 87 L.Ed. 1324 (1943).
Plaintiff has not presented to the Court any evidence or allegation of defendants' potential non-compliance with this Court's ruling. It is presumed that defendants intend to and will abide by this declaratory judgment in all future actions involving *158 enforcement of the statute. Therefore, the Court denies plaintiff's request for injunctive relief. However, it should be noted that today's action is not intended to affect plaintiff's right to seek additional relief at a later time should it become apparent that the declaratory judgment is not being complied with by the defendants.
IT IS THEREFORE ORDERED that plaintiff be granted a Judgment on the pleadings and that a Declaratory Judgment be entered eliding the second sentence of T.C.A. § 53-5110(f)(1) (1977). Pursuant to 42 U.S.C. § 1988, counsel for plaintiff is directed to submit an application for costs and attorneys fees detailing the services and their amount rendered in this cause and stating the parties against whom the costs and fees are to be assessed.
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959 So.2d 465 (2007)
STATE of Louisiana
v.
Jennifer COLEMAN.
No. 2005-K-1617.
Supreme Court of Louisiana.
June 29, 2007.
*466 Charles C. Foti, Jr., Attorney General, Julie E. Cullen, Assistant Attorney General, Camille A. Morvant, II, District Attorney, for applicant.
Christopher Albert Aberle, Mandeville, Louisiana Appellate Project, Sherry Watters, for respondent.
CALOGERO, Chief Justice.[*]
In this case, we apply the standard for granting a new trial in a criminal matter based on newly discovered evidence and conclude the trial judge did not abuse his discretion in denying the defendant's motion for new trial. For the reasons set forth below, we vacate the court of appeal's decision, which reversed the defendant's convictions for aggravated second degree battery and second degree kidnapping, and we remand the case to the court of appeal for consideration of the defendant's remaining assignment of error.
FACTS and PROCEDURAL HISTORY
In May 2001, the victim, Frank Bayonne,[1] drifted from Natchitoches to Thibodaux and began "hanging around" the defendant's neighborhood. Believing that Bayonne had broken into her apartment and stolen some of her belongings, the defendant, Jennifer Coleman, made a report to the police on May 25, 2001, at approximately 8:16 p.m. Thereafter, one of the defendant's neighbors saw Bayonne exit the defendant's apartment and walk down an alley. The defendant called the police, and then grabbed an aluminum bat with which to confront Bayonnne. In the presence of three of her girlfriends, the defendant swung the bat at Bayonne, hitting him in the legs. Her second swing struck a brick building. Bayonne, unarmed, promised to return the defendant's property and fled to a nearby convenience store.
At the defendant's request, two acquaintances, Anthony Ayrow and Derrick Adams, forced the victim out of the convenience store to the parking lot, where a *467 crowd of people had gathered.[2] The store's security camera showed the two men forcibly taking the unarmed victim out of the store; the defendant waited outside the store yelling that she wanted her property back, "I'm going to get you," and "I'm going to kill you." Different people attacked the victim, including one of the defendant's neighbors who hit him with a tree branch,[3] and another man kicked him. Though at trial she denied having done so, the defendant was seen hitting the fallen victim in the head with the baseball bat she had carried with her. The defendant and her friends then left the scene. As she placed the baseball bat in the trunk of the car, the defendant told one of her girlfriends that she "beat his ass."
At 8:41 p.m., during the altercation in the parking lot, the owner of the convenience store called the police and reported the fight. Officers arrived promptly, but the fight was over, and the victim was standing in the parking lot with no apparent injuries. Bayonne told the officers that he had not been in a fight. The police questioned the defendant, who also made no mention of the attack on the victim but instead reported that the victim had broken into her house. Not realizing Bayonne had been seriously injured, the police arrested him for burglary of the defendant's apartment and transported him to the police station.
After viewing the store's videotapes and interviewing the various witnesses at the store, the police learned the defendant had been involved in the fight and had used a baseball bat to beat the victim. The defendant consented to a search of her car's trunk where the police found the bat.
Meanwhile, the victim was placed in the holding cell at the police station at approximately 8:52 p.m. Within about 15 minutes, the victim became uncommunicative and collapsed. An ambulance was called at 9:10 p.m., and the victim was transported to the hospital. He was semi-conscious upon arrival at 9:53 p.m., or just about one hour and a quarter after the beating he had sustained in the convenience store parking lot, and he was "deeply comatose" when examined by Dr. Thomas Donner, the attending neurosurgeon, shortly thereafter. The critical nature of the victim's condition was obvious to Dr. Donner. After an immediate CAT scan revealed that the victim had a large subdural hematoma on the left side of his brain, the doctor rushed him into surgery. The victim survived brain surgery, but remained in a comatose state. For months thereafter he resided in a nursing home, unable to walk, feed himself, talk, or dress himself. He was paralyzed on the right side of his body, and his arms and legs were drawn. The victim eventually died in 2006.
Prosecution commenced in 2001 when the state charged the defendant with attempted first degree murder and second degree kidnapping. Before jury selection, the state amended count one of the bill of information to charge aggravated second degree battery, instead of attempted first degree murder. Following trial in July 2003, a jury returned a verdict of guilty as charged on both counts. The defendant filed motions for new trial and for post-verdict judgment of acquittal. The defendant based her motion for new trial on information supplied by an employee of the Thibodaux Regional Medical Center, Sheila Marie Williams, who claimed the victim *468 had informed her that he had suffered a second beating at the Thibodaux City Police Station. The defendant asserted this evidence established that the severe injury suffered by the victim was a result of a police beating and not from her baseball bat. Following a hearing in September 2003 at which Williams testified, the trial court denied both of the defendant's post-trial motions. Subsequently, the trial court sentenced the defendant to concurrent terms of 15 years imprisonment at hard labor, and ordered that the first two years be served without benefit of parole, probation, or suspension of sentence.
On appeal, the defendant raised three assignments of error: insufficient evidence as to the charge of second degree kidnapping, erroneous denial of the motion for new trial, and excessive sentence. Based on the jury's credibility determinations, the appellate court held the evidence was sufficient to convict the defendant as a principal to the second degree kidnapping. A majority of the appellate court panel, however, held that the trial court had erred in denying the motion for new trial. The majority reversed that conviction, along with the aggravated second degree battery conviction, after finding merit in the defendant's claim that the newly discovered evidence allegedly proved that the victim's injuries were possibly caused by a beating inflicted by the Thibodaux police and not at the hands of the defendant, who on the stand denied hitting the victim in the head with her bat. State v. Coleman, 04-0758 (La.App. 1st Cir.3/24/05), 918 So.2d 23. On rehearing granted in part, the appellate court majority again reversed both convictions, reasoning that the new evidence "could perhaps add weight to defendant's credibility as to both charges." State v. Coleman, 04-0758 (La.App. 1st Cir.5/20/05), 918 So.2d 23, 40 (on reh'g).[4]
We granted the state's application to examine the correctness of the appellate court's ruling reversing the convictions and sentences. State v. Coleman, 05-K-1617 (La.1/12/07), 948 So.2d 140.
DISCUSSION
Under La.Code Crim. Proc. art. 851(3), a court "shall grant a new trial whenever . . . [n]ew and material evidence that, notwithstanding the exercise of reasonable diligence by the defendant, was not discovered before or during the trial, is available, and if the evidence had been introduced at the trial it would probably have changed the verdict or judgment of guilty." State v. Knapper, 555 So.2d 1335, 1339 (La.1990). Thus, a new trial shall be granted based on Article 851(3) when: (1) new evidence was discovered after trial; (2) the new evidence is material; (3) the failure to discover the evidence was not due to a lack of diligence on the part of the defense; and (4) had the evidence been introduced, the verdict or judgment of guilty probably would have been changed. See State v. Cavalier, 96-3052, 97-0103, p. 3 (La.10/31/97), 701 So.2d 949, 951; State v. Hammons, 597 So.2d 990, 994 (La.1992); Knapper, 555 So.2d at 1339.
A ruling on a motion for a new trial rests within the sound discretion of the trial judge. State v. Quimby, 419 So.2d 951, 960 (La.1982). In State v. Talbot, 408 So.2d 861 (La.1980), we explained the trial judge's obligation as follows:
The scope of the trial judge's duty toward the motion for a new trial based upon the new evidence must be kept in mind. It was not for him to determine the guilt of [another alleged suspect] or *469 the innocence of [the defendant]; it was not for him to weigh the new evidence as though he were a jury, determining what is true and what is false. The judge's duty was the very narrow one of ascertaining whether there was new material fit for a new jury's judgment. If so, will honest minds, capable of dealing with evidence, probably reach a different conclusion, because of the new evidence, from that of the first jury? Do the new facts raise debatable issues? Will another jury, conscious of its oath and conscientiously obedient to it, probably reach a verdict contrary to the one that was reached on a record wholly different from the present, in view of evidence recently discovered and not adducible by the defense at the time of the original trial?
Talbot, 408 So.2d at 885.
More recently, in State v. Watts, 00-0602 (La.1/14/03), 835 So.2d 441, we quoted the above passage with approval and added:
The test is objective in that the trial judge does not sit as the ultimate arbiter of the resolution of the case once the new evidence is considered, that is, the trial court does not weigh the evidence. The role of the trial court is to review the evidence constituting the State's case, not to determine the sufficiency of the evidence, but to evaluate the effect of the newly discovered evidence.
Watts, 00-0602, p. 7, 835 So.2d at 447 (footnote omitted) (citing State v. Hammons, 597 So.2d at 998).
The state conceded that Williams's testimony was newly discovered evidence. The trial judge agreed and further noted that the failure to discover hospital employee Williams's connection to the case was not attributable to any lack of diligence on the part of defendant. No party disputes that finding. Accordingly, the issues before this court are whether the newly discovered evidence is fit for the jury's consideration in a new trial, whether the evidence is material, and whether introduction of this evidence at trial would have probably resulted in a different verdict.
The state argues the appellate court erred when it found that the newly discovered evidence had a probability of rendering a different verdict if presented to the jury, as the newly discovered evidence constitutes hearsay; the evidence appears vague, unreliable, and not material; and, even if admissible and material, the evidence would not have changed the outcome of the jury's guilty verdict. Further, the state contends Williams's testimony regarding whether the victim had undergone surgery at the time of her interview and whether he was conscious during her interview was contrary to the testimony of the victim's neurosurgeon, Dr. Donner, who testified that the victim was rushed into surgery very soon after he arrived at the hospital and that the victim was deeply comatose at that time and remained consistently comatose thereafter.
The defendant counters that the new evidence is admissible because it is not hearsay, but is instead part of the "res gestae" of the offense, comparable to the statement the victim made to police when he was found in the parking lot. The defendant also argues that the evidence, if hearsay, is admissible under an exception to the rule barring hearsay evidence, namely, as a statement in contemplation of death, as a present sense impression or excited utterance, as a statement of mind or physical condition, or as a statement for medical treatment. Additionally, the defendant argues that the statement to Williams possessed indicia of reliability, as it was made to a hospital worker, a disinterested third party. The defendant contends the evidence, even if hearsay, justifies *470 a new trial in the interest of justice, because it will allow an investigation to discover non-hearsay, corroborative evidence that would create a reasonable doubt. The defendant lastly points out that the testimony contained non-hearsay evidence in that it consisted of the witness's observations of the defendant's physical condition.
For the reasons set forth below, we find the trial court did not abuse its discretion in denying the motion for new trial. We first turn to the newly discovered evidence in the testimony of Williams.
Williams interviewed the victim in the ICU of Thibodaux Regional Hospital the day after he was admitted for the purpose of obtaining information for Medicaid forms. Specifically, Williams's job was to complete a "Victim of Crime Report" for the hospital and the state. Williams recalled that the victim was in ICU when she conducted the interview, and she described his physical condition as follows:
A: He had a lot of bruises and abrasions. Uh, when I saw him, he hadn't been quite cleaned up yet so there was a lot of blood stains and blood . . . [a]round the head. In his face, around his eyes. No major trauma to the back that I could see. It was in the facial part because it was swelling. He was starting to swell when I met him.
According to Williams, the blood around Bayonne's lips, jaw, neck and facial areas indicated simply that "he hadn't been cleaned," because he "had never undergone surgery to [her] knowledge." During the approximate one to two hours that Williams spent with the victim, she described him as "awake, incoherent, in and ou[t] of consciousness." Williams indicated that she had to lean closer to understand the victim's mumbling. Despite the victim's fading "in and out" of consciousness, Williams was able to ascertain that "he had been beaten twice," relating in the following colloquy:
A: . . . And that time I asked him and he kept saying, `the police, the police, the police.' And I kept saying, `Why are [you] saying that? What happened to you with the police.' * * *
Q: Did he describe the beating from the police?
A: Not in detail. He just kept saying the same thing over and over and over. Just, `The police. The police, the police.[']
Williams conceded that the victim's invocation of the word police was not in response to any particular question she had asked, although she volunteered that she "was trying to find out from him who had beaten him."
In a critical portion of her testimony, heavily emphasized by the appellate court majority in both opinions, Williams recalled that:
A: All he was saying was the police and because he kept saying the same thing over and over then I asked him, `Mr. Baion, were you beaten by the police?' And I asked him did he understand that-I asked if he understood what I was saying blink his eyes or say yes.
Q: And what did he do?
A: He said, `Yes.'
Q: Did he blink his eyes too?
A: He did that too.
On cross-examination, the state exposed the discrepancy with Williams's time line:
Q: If Dr. Donner had testified that Mr. Baion had brain surgery the night he was brought within or a fairly short period of time after he was brought in, would you tend to think that maybe your impression was incorrect? That he had not [had surgery] when you saw him?
*471 A: I wouldn't know ma'am. I read his records. I don't recollect what I read that day.
Q: And my question to you is, if you were advised that Doctor Thomas Donner testified that he was the neurosurgeon who did surgery on Mr. Baion within an hour to two hours after he was brought in to the hospital, would you have any reason to dispute Doctor Donner's testimony?
A: No.
* * *
Q: Let me ask you this, Ms. Williams. If Dr. Donner testified that Mr. Bion's condition was [deteriorating] from the time that he had this head injury, that it was a massive head injury and that his condition was [deteriorating] and he would have died without surgery and his condition never improved and he can't talk, are you just saying Dr. Donner's wrong?
A: No, ma'am. . . . He only talked to me the first time I saw him and that was it. Never again.
Williams assessed the victim's state as "in and out" of consciousness based on her observations that he would "talk and then he would quit talking." She assumed that he was on medication because of "all the machines on him." Williams admitted that the victim was not able to give her much of the information that she sought as to his financial status or answer any of her questions "other than his name" and repeating the word "police."
The victim's mother, Mary Thomas, also testified, and her testimony diverged with Williams's on the issue of whether the victim could speak. Ms. Thomas testified that she went to the hospital on the night following her son's attack, arriving after he had undergone surgery. She stated that she arrived at the hospital at about 7:30 p.m. and that her son was in a deep coma, breathing with the assistance of a machine. According to the victim's mother, her son was unable to speak from the time she first saw him at the hospital to the time he was discharged.
The police video, introduced at trial, shows the victim arriving at the police station and being booked. No sign of injury is apparent, and nowhere on the video is there any evidence whatsoever of the police striking the victim, who in one moment went from standing at the booking desk to putting his head down and then slumping over moaning. The police officers are heard asking, "Frank, Frank, what's the matter. Are you okay. Do you want some water." When no response came from the victim, the police called EMT's. The video shows the paramedics lifting the victim onto the stretcher for transport by ambulance to the hospital. In contrast to Williams's testimony, there are no bloody facial features, bruising or swelling revealed on the victim's face on the tape.
Williams's lay assessment that the victim had not yet undergone surgery when she interviewed him and was coherent at times during that interview does not comport with Dr. Donner's testimony that the victim was rushed into surgery shortly after his arrival at the hospital and remained comatose thereafter. Dr. Donner, whose credibility has not been questioned, testified that "at the time [Bayonne] came to the emergency room I was trying to get him to the operating room so fast I didn't pay a lot of attention to [assessing the number of blows the victim may have incurred to the head]." According to the doctor, "our rationale at that point was just to try to get him into the operating room as fast as we could to try to save his life." Dr. Donner further indicated that by the time he first saw the victim, he was already "deeply comatose." Dr. Donner *472 also testified that he saw the victim after surgery and throughout his hospitalization at Thibodaux Regional Medical Center and assessed him as consistently comatose.
The trial court denied the motion for new trial, evaluating the testimony offered by Williams as follows:
First of all, Ms. Williams testimony is somewhat incredible here today. Obviously from the medical evidence, if the records and Dr. Donner's testimony is to be believed, Ms. Williams saw Mr. Baion before he had surgery or she saw Mr. Baion after he had surgery and doesn't really recall what she saw that his physical appearance was post surgical. Either one of those two scenarios, her testimony is somewhat incredible.
* * *
I think her testimony is also confusing, in the sense that, she said he was in and out. That he was incoherent but that he was in and out. Now I don't know what that means, if she slips in to ask him a question when he's apparently in, how does she know when he goes out. I don't know.
* * *
If she testified-if this witness said in front of the jury everything that she said here in this courtroom today and the other witnesses gave the same testimony, I would have to conclude that a reasonable fact finder would have to exclude her testimony as being so far outweighed by the other evidence that it would be incredible for me to say here today that it would likely produce a different verdict.
Finally, the judge opined that even if he were to grant the motion for new trial, he could not imagine Williams's testimony in which she recalled the victim's statements to her would ever overcome a hearsay objection.[5]
The admissibility at a new trial of the newly discovered evidence is a factor in determining its "fitness" for consideration by a jury at a second trial, and it should be addressed before a conviction is reversed and a new trial ordered. See State v. Watts, 00-0602 at 12-13, 835 So.2d at 452. While the trial court did not make a specific finding as to the hearsay nature of Williams's testimony at the conclusion of the hearing, its remarks clearly suggested that admissibility would likely be an insurmountable obstacle had the evidence been offered for trial. Yet, because the trial court found the evidence would not result in a different verdict if presented to another jury, it was not required to decide the admissibility of that evidence at a subsequent trial. Cf. State v. Watts, 00-0602 at 12-13, 835 So.2d at 452.
At any rate, the defense contends the victim's statements to Williams do not constitute hearsay, or should be admissible under various exceptions to the hearsay rule. Hearsay is defined by La.Code Evid. art. 801(C) as a "statement, other than the one made by the declarant while testifying at the present trial or hearing, offered in evidence to prove the truth of the matter asserted" and is inadmissible *473 except as provided by law. La.Code Evid. art. 802. Because the defendant seeks to introduce the out-of-court statements to prove that the police rather than the defendant possibly caused the victim's injury, Williams's testimony as to what the victim had allegedly communicated to her, either verbally or non-verbally, about the police beating him certainly constitutes hearsay evidence.
Furthermore, although the defendant asserts that a variety of hearsay exceptions would permit introduction of Williams's testimony to a jury, that argument falters at the first hurdle. Williams freely conceded that the victim never stated directly that the police beat him. Although a statement for purposes of La. Code Evid. art. 801(A)(1) and (2) may include nonverbal conduct "intended . . . as an assertion," Williams's testimony left insolvably ambiguous, apart from her own opinion of what the victim may have meant, whether the victim's statement, "Yes," and the blinking of his eyes meant, "Yes, the police beat me," or "Yes, I understand what you are saying." Accordingly, even assuming that the victim repeatedly uttered "the police" in Williams's presence, her opinion as to what he meant in response to her questions would not be admissible under any exception to the hearsay rule. Therefore, the trial court was correct in ruling that the evidence was not fit to be considered by a second jury.
At any rate, even if the testimony could have been admitted over the state's inevitable hearsay objection, we find the trial court clearly did not abuse its broad discretion in denying the motion for new trial on the basis that, ultimately, Williams's testimony would probably not change the result at a second trial. In finding otherwise, the appellate court majority took a skewed view of Dr. Donner's testimony. While stating that ordinarily a person with the kind of severe head injury experienced by the victim would quickly manifest symptoms of an impending neurological crisis, Dr. Donner also testified that it is "actually not surprising when people show up with sizable subdural hematomas in the emergency room and little in the way of acute complaints before they appear." Given the size of the hematoma that formed on the victim's brain, Dr. Donner would not give "it more than an hour or two before, you know, he became symptomatic." In the interim, the victim would have experienced "an evolution of this venous bleeding which . . . can occur . . . sort of at a slow to deliberate rate until people start to become symptomatic." Thus, the time line offered by the state of the incident from its inception in the store parking lot to the victim's collapse at the station house, or just about an hour and a quarter, falls within the "hour or two" period of time Dr. Donner gave for the "unusual" but not rare case in which evolutionary bleeding within the brain manifests in the onset of symptoms leading to a deep coma after the initial injury and tearing of a blood vessel.
Thus, contrary to the appellate court majority's reasoning, in light of the entirety of Dr. Donner's testimony, the trial court had a reasonable basis for concluding that Williams's account of the alleged statements, verbal or non-verbal, of a fitfully conscious victim sometime after the emergency room admitted him in a "deeply comatose" state, did not constitute material evidence that would have resulted in a different verdict had it been presented to the jury. The state's theory of the case was that the defendant took the law into her own hands rather than wait for police, struck the victim with her bat, chased him to the convenience store, had him forcibly removed from the store, and, along with an angry mob incited by the defendant, began *474 to beat the victim, striking him in the head with her bat, thereby causing a severe injury to his brain. The trial court's conclusion that the verdicts of guilt on both counts would not have changed on the basis of Williams's testimony was reasonable. At a subsequent trial, jurors could do no more than speculate that the victim tried to tell Williams that the police had beaten him in addition to the beating he received at the hands of the defendant. The evidence introduced by the state, including the videotape of the booking which showed the victim's actual collapse, was entirely consistent with the state's theory of the case, as jurors necessarily found when they returned the verdicts of guilty on both counts. The defendant denied striking the victim in the head with her bat in the parking lot of the store, though witnesses testified otherwise. The case, as the appellate court noted, turned on the credibility of the defendant and the state's witnesses. Williams's testimony, when presented to "honest minds capable of dealing with evidence," would not have reasonably tipped that credibility decision in favor of the defendant. The record thus establishes the trial court properly evaluated the effect of the newly discovered evidence on the record evidence constituting the state's case and reasonably concluded that the outcome of a guilty verdict would not have been different.
For these reasons, we conclude the appellate court majority erred in finding the trial court abused its discretion in denying the defendant's motion for a new trial based on newly discovered evidence. Accordingly, we vacate the appellate court's decision, which reversed the defendant's convictions for aggravated second degree battery and second degree kidnapping, and we remand the case to the court of appeal for consideration of the defendant's remaining assignment of error.
DECREE
DECISION VACATED AND CASE REMANDED TO THE COURT OF APPEAL.
JOHNSON, J., concurs.
NOTES
[*] Retired Judge Fred C. Sexton sitting ad hoc for Associate Justice John L. Weimer, recused.
[1] The victim's surname is spelled variously in the record as "Baion," "Bion," and "Bayonne." This opinion adopts the spelling also adopted by the appellate court opinion, "Bayonne."
[2] Ayrow and Adams pleaded guilty to simple kidnapping and were sentenced, respectively, to four and three years imprisonment at hard labor.
[3] Latasha Green pleaded guilty to simple battery.
[4] The appellate court pretermitted its review of the defendant's third assignment of error in which she claimed the court imposed an excessive sentence. Coleman, 04-0758 at 16, 918 So.2d at 32.
[5] At the outset of the hearing on the motion for new trial, the state objected to the hearsay nature of the testimony that the defense was anticipating presenting through its newly-discovered witness, Williams, the gist of which would be to repeat what the victim stated to Williams, namely that he was beaten by Thibodaux police officers. The state further objected that no exception under La.Code Evid. arts. 803 and 804 applied. To avoid unnecessary delay, the judge permitted the hearing to go forward and indicated that he would address the evidentiary (hearsay) issue at the time he ruled on the motion for new trial.
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515 F.2d 504
Kockv.Brunswick Corporation
74-2499
UNITED STATES COURT OF APPEALS Second Circuit
4/16/75
1
S.D.N.Y.
WITHDRAWN
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492 F.2d 917
Clarence MARSHALL, Jr., Appellant,v.Allyn R. SIELAFF et al.
No. 73-1630.
United States Court of Appeals, Third Circuit.
Argued Nov. 29, 1973.Decided Feb. 27, 1974.
1
R. Stanton Wettick, Jr., Pittsburgh, Pa., for appellant.
2
Israel Packel, Atty. Gen., Donetta W. Ambrose, Asst. Atty. Gen., Pittsburgh, Pa., for appellee.
3
Before ADAMS and ROSENN, Circuit Judges and SHERIDAN, District Judge.
4
SHERIDAN, District Judge.
5
This is an appeal from an order of the district court for the Western District of Pennsylvania denying in part appellant's motion for a writ of habeas corpus ad testificandum and granting dismissal of his action for lack of prosecution.
6
This civil rights action was initiated in June 1972 to secure redress for various allegedly unconstitutional actions by the defendants. Appellant, Clarence Marshall, Jr., an inmate incarcerated at the State Correctional Institution at Graterford, Pennsylvania, filed a complaint under 42 U.S.C.A. 1983 against certain prison officials and medical personnel at the State Correctional Institution at Pittsburgh, Pennsylvania. In his complaint, appellant made several allegations of violations of his constitutional and civil rights, including the claim that he had been subjected to medical mistreatment while previously incarcerated at the State Correctional Institution at Pittsburgh.1 Specifically, the appellant claims that he injured his elbow, which required medical attention and an operation, which were refused.
7
Prior to the date set for trial, appellant filed a motion for a writ of habeas corpus ad testificandum for the appearance of five inmates (including appellant). The district court granted the writ in part, ordering the appearance of the appellant and Rayford Smith, a witness incarcerated at the State Correctional Institution at Pittsburgh. The court denied the motion for the writ as to the other three witnesses-- Walter P. McGough, Foster Thomas and Hezekiah Thomas, all of whom were incarcerated at the State Correctional Institution at Graterford-- on the ground that the court had no jurisdiction in a civil case to issue such a writ for persons confined outside the territorial limits of the Western District of Pennsylvania.2
8
On the date set for trial, appellant filed a motion for reconsideration of the denial of the writ as to the three inmates at Graterford. At this time, appellant's counsel advised the district court that these witnesses were essential and that appellant would not proceed with the trial in their absence. Counsel had advised appellant to proceed even if the court denied his motion for reconsideration, because in counsel's opinion this was the 'proper procedure.' Appellant refused to proceed. The defendants moved to dismiss the action for failure to prosecute. After hearing oral argument on the motions, the court adjourned the hearing to take them under consideration. The court thereafter denied appellant's motion for reconsideration and granted defendants' motion to dismiss for lack of prosecution. The district court based its denial on the ground that it lacked jurisdiction to issue a writ of habeas corpus ad testificandum for persons confined outside the territorial limits of its district, and added that even if the court had the power to issue the writ, it would have been discretionary and, under the circumstances of this case, the court would have refused to issue it.
9
Under Rule 41(b) of the Federal Rules of Civil Procedure, as well as under the inherent power of the court, a case may be dismissed with prejudice for want of prosecution. Dismissal is a harsh remedy and should be resorted to only in extreme cases; the policy of the law is to favor the hearing of a litigant's claim upon the merits. Davis v. Operation Amigo, Inc., 10 Cir. 1967, 378 F.2d 101, 103. Nevertheless, the authority to dismiss for lack of prosecution, both on defendants' motion and sua sponte, is an inherent '. . . control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases.' Link v. Wabash Railroad Co., 1962, 370 U.S. 626, 630-631, 82 S.Ct. 1386, 1389, 8 L.Ed.2d 734. Thus, the scope of appellate review of an order of dismissal is extremely narrow, confined solely to whether the trial court has abused its discretion. Dyotherm Corp. v. Turbo Machine Co., 3 Cir. 1968,392 F.2d 146; Theilmann v. Rutland Hospital, Inc., 2 Cir. 1972, 455 F.2d 853. No precise rule can be laid down as to what circumstances justify a dismissal for failure to prosecute, but the procedural history of each case must be examined in order to make that determination. The power of the court to prevent undue delays and to achieve the orderly disposition of cases must be weighed against the policy of law which favors disposition of litigation on its merits. Link v. Wabash Railroad Co., supra; Dyotherm Corp. v. Turbo Machine Co., supra; Theilmann v. Rutland Hospital, Inc., supra; Richman v. General Motors Corp., 1 Cir. 1971, 437 F.2d 196; U.S.N. Co., Inc. v. American Express Co., E.D.Pa. 1972, 55 F.R.D. 31.
10
From a careful consideration of the history of this litigation and from all the surrounding circumstances, we hold that the district court's dismissal of plaintiff's case for lack of prosecution was not an abuse of discretion. Indeed, appellant left the district judge no choice. The appellant refused to proceed with the trial because of the court's adverse decision on his motion for issuance of a writ ad testificandum for the three inmates at Graterford, despite the advice of his counsel that the 'proper procedure' was to proceed. Both the appellant and Rayford Smith were present, having been transferred by the prison authorities to the courthouse. The issues in the case may well have been resolved without the other inmate witnesses. If appellant had proceeded, he might have been successful. If appellant had proceeded and lost, the appellate court would have had a complete record upon which to make its determination.
11
For these reasons we affirm the dismissal for lack of prosecution and do not reach the substantive issue involving the denial of the writ of habeas corpus ad testificandum. To adjudicate the issue of the writ under the circumstances of this case would undermine the 'basic and persisting policy against piecemeal appeals.' Cf. Borden Co. v. Sylk, 3 Cir. 1969, 410 F.2d 843; Kelly v. Greer, 3 Cir. 1961, 295 F.2d 18; Panichella v. Pennsylvania Railroad Co., 3 Cir. 1958, 252 F.2d 452, 454. If a litigant could refuse to proceed whenever a trial judge ruled against him, wait for the court to enter a dismissal for failure to prosecute, and then obtain review of the judge's interlocutory decision, the policy against piecemeal litigation and review would be severely weakened. This procedural technique would in effect provide a means to avoid the finality rule embodied in 28 U.S.C.A. 1291. To review the district court's refusal to grant the writ under the facts of this case is to invite the inundation of appellate dockets with requests for review of interlocutory orders and to undermine the ability of trial judges to achieve the orderly and expeditious disposition of cases.
12
The order of the district court dismissing the action for want of prosecution will be affirmed.
1
The district court granted partial summary judgment on the ground of res judicata on all issues except the claim of lack of proper medical treatment for plaintiff's injured elbow. Appellant did not appeal from this judgment
2
The State Correctional Institution at Graterford is located in the Eastern District of Pennsylvania
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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 08a0192p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
Plaintiff-Appellee, -
UNITED STATES OF AMERICA,
-
-
-
No. 07-1375
v.
,
>
RICKEY DONNEL SMITH, -
Defendant-Appellant. -
N
Appeal from the United States District Court
for the Eastern District of Michigan at Flint.
No. 05-50062-001—Paul V. Gadola, District Judge.
Argued: April 28, 2008
Decided and Filed: May 22, 2008
Before: BATCHELDER and SUTTON, Circuit Judges; BARZILAY, Judge.*
_________________
COUNSEL
ARGUED: David A. Koelzer, FEDERAL DEFENDER’S OFFICE, Flint, Michigan, for Appellant.
Robert W. Haviland, ASSISTANT UNITED STATES ATTORNEY, Flint, Michigan, for Appellee.
ON BRIEF: David A. Koelzer, FEDERAL DEFENDER’S OFFICE, Flint, Michigan, for
Appellant. Robert W. Haviland, ASSISTANT UNITED STATES ATTORNEY, Flint, Michigan,
for Appellee.
_________________
OPINION
_________________
SUTTON, Circuit Judge. Rickey Smith contends that the district court should have
suppressed evidence that officers discovered in his residence while he was serving the last years of
a 15-to-30-year sentence as a prisoner in a community residential home, which is to say he was
living in a private home while connected to an electronic-monitoring device that ensured he never
left the walls of the home without permission. Because the search was reasonable in view of Smith’s
continuing prisoner status and in view of his knowledge that officers could search his living quarters
as freely as they could search his prison cell and because the exclusionary rule does not apply to
knock-and-announce violations, we affirm.
*
The Honorable Judith M. Barzilay, Judge of the United States Court of International Trade, sitting by
designation.
1
No. 07-1375 United States v. Smith Page 2
I.
In January 1990, a jury convicted Rickey Smith of stealing a car, and, because this was
Smith’s fourth felony, the court sentenced him to 15 to 30 years’ imprisonment as an “habitual
offender.” JA 56. Fourteen years later, in February 2004, the Michigan Department of Corrections
transferred Smith to its Community Residential Program and permitted him to live in a “community
residential home.” See Mich. Dep’t of Corr. Policy Directive 06.03.102 (Oct. 23, 1989). This
arrangement permitted Smith to live in his sister’s home, but it required him to remain there “on
tether,” JA 90—meaning that Smith would have to remain at his sister’s home (unless he obtained
permission to leave) and that the State would ensure he did so by tracking him through a transmitter
on his ankle and a monitoring device connected to a phone jack in the home.
On July 21, 2004, members of the Department of Corrections responded to a tip that Smith
had guns and drugs in the home. After forcibly entering the home, the officers searched the
basement (where they believed Smith was staying) and discovered two loaded guns under a mattress
in the corner of the room.
Smith pleaded guilty to one felon-in-possession-of-a-firearm charge, see 18 U.S.C.
§ 922(g)(1), while reserving his right to challenge the court’s denial of his motion to suppress.
II.
A.
“The right of the people to be secure in their persons, houses, papers, and effects, against
unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon
probable cause, supported by Oath or affirmation, and particularly describing the place to be
searched, and the persons or things to be seized.” U.S. Const. amend. IV. The question here is one
of reasonableness, as the warrant and probable cause requirements generally do not apply to searches
of parolees, probationers or their residences. See Samson v. California, 547 U.S. 843, 857 (2006)
(permitting suspicionless searches of parolees); United States v. Knights, 534 U.S. 112, 118, 121
(2001) (upholding a warrantless search of a probationer’s apartment based on reasonable suspicion
and a probation condition requiring him to submit to a search at any time). That means we must
consider “the degree to which [the search] intrudes upon an individual’s privacy” as well as “the
degree to which it is needed for the promotion of legitimate governmental interests.” Samson, 547
U.S. at 848 (internal quotation marks omitted); see also Virginia v. Moore, 128 S. Ct. 1598, 1604
(2008).
One factor central to this balancing inquiry is an individual’s status on the “privacy
continuum.” Wilson v. Collins, 517 F.3d 421, 425 n.2 (6th Cir. 2007) (internal quotation marks
omitted); see also Samson, 547 U.S. at 850. At one end of the continuum are free citizens, who
enjoy “absolute liberty.” Knights, 534 U.S. at 119 (internal quotation marks omitted); see also
Wilson, 517 F.3d at 425 n.2. Probationers have fewer expectations of privacy than free citizens, see
Knights, 534 U.S. at 119, and parolees have still “fewer expectations of privacy than probationers,”
Samson, 547 U.S. at 850. At the other end of the spectrum are inmates, who have no legitimate
expectation of privacy from searches of their prison cells. See Hudson v. Palmer, 468 U.S. 517,
525–26 (1984).
In assessing Smith’s situation, Samson provides considerable guidance. There, an officer
conducted a suspicionless search of a parolee walking down the street. 547 U.S. at 846–47. A
condition of Samson’s parole order required him “to be subject to search or seizure . . . at any time
of the day or night, with or without a search warrant and with or without cause.” Id. at 846 (internal
quotation marks omitted). After balancing Samson’s privacy interests against the State’s law-and-
order interests, the Court held that the search was reasonable because (1) Samson’s status as a
No. 07-1375 United States v. Smith Page 3
parolee, together with his parole-search condition, deprived him of “an expectation of privacy that
society would recognize as legitimate” and (2) the State has an “overwhelming interest in
supervising parolees.” Id. at 850, 852–53 (internal quotation marks omitted).
Smith had fewer expectations of privacy than Samson. Smith was treated as a “prisoner”
living in a community residential home, Mich. Comp. Laws § 791.265a(1)(c), (9)(b); Mich. Admin.
Code r. 791.4401(2)(h), not as a parolee. And while the State permitted Samson to move freely and
travel within 50 miles of his home without requesting permission and placed no monitoring device
on him, 547 U.S. at 851, the State physically connected Smith to a device that monitored his every
movement and made him obtain approval before leaving the walls of his sister’s home—even if he
wished only to go into the yard or onto the porch, see Mich. Admin. Code r. 791.4425(3); Mich.
Dep’t of Corr. Policy Directive 06.03.102. If “[t]he extent and reach of [Samson’s] conditions
clearly demonstrate[d] that [he had] severely diminished expectations of privacy by virtue of [his]
status alone,” Samson, 547 U.S. at 852, then the same assuredly was true for Smith.
Nor should any of this have come as a surprise to Smith. The officers’ uncontradicted
testimony shows that they informed Smith that they had as much freedom to enter his home as they
did to enter his prison cell. At an orientation, Smith viewed a video explaining “that the Department
has the authority to go to the home, make home calls if need[ed] to search the premises, his area of
control where he . . . sleeps . . . , just as if he were still in the facility,” JA 94 (emphasis added), and
officials explained to Smith that “his home was his prison,” JA 93; see also Mich. Admin.
Code r. 791.4425(3). No one disputes these facts, and no one argues that an inmate has any
legitimate expectation of privacy from unannounced searches of his prison cell. See Palmer, 468
U.S. at 526 (holding that “society is not prepared to recognize as legitimate any subjective
expectation of privacy that a prisoner might have in his prison cell”). Smith thus was “aware” that
his home was subject to search at any time, with or without suspicion. Samson, 547 U.S. at 852.
Accounting for all of these circumstances—the tether, the need for authorization to leave the walls
of his home and the officers’ authority to search his home at any time—Smith had little, if indeed
any, reasonable expectation of privacy in being free from a suspicionless search of his residence.
The State’s interest in permitting such searches is at least as great as it was in Samson. As
in Samson, “a State has an overwhelming interest in supervising” community-resident prisoners
because they “are more likely to commit future criminal offenses.” Id. at 853 (internal quotation
marks omitted). As in Samson, the State’s interests in reducing recidivism and promoting
rehabilitation “warrant privacy intrusions that would not otherwise be tolerated under the Fourth
Amendment.” Id. And as in Samson, a State’s ability to release individuals into a Community
Residential Program depends on its ability to supervise the inmates effectively, enforce the
conditions of confinement and protect the public from recidivist offenders. See id. at 854.
Nor do a trio of cases—United States v. Knights, 534 U.S. 112, 121 (2001), Griffin v.
Wisconsin, 483 U.S. 868, 875–76 (1987), and United States v. Henry, 429 F.3d 603, 608–09 (6th
Cir. 2005)—establish that the reasonable-suspicion standard should apply instead. Not only did
Knights, Griffin and Henry all involve probationers, as opposed to parolees or community-resident
prisoners, but all of these cases were decided before Samson. Samson addressed (at least in the
context of a parolee search) a question it had reserved in Knights: “whether the search would have
been reasonable under the Fourth Amendment had it been solely predicated” on the inmate’s
condition of release, not on reasonable suspicion. Samson, 547 U.S. at 850. Because “parolees have
fewer expectations of privacy than probationers,” the Court held that a suspicionless search of a
parolee was reasonable. Id. at 850, 857. “Imposing a reasonable suspicion requirement,” the Court
added, “would give parolees greater opportunity to anticipate searches and conceal criminality.”
Id. at 854. This reasoning applies with at least as much force to a community-resident prisoner
No. 07-1375 United States v. Smith Page 4
released with an electronic-monitoring device attached to him, prohibited from leaving the home
without permission and told that he has no more privacy in the home than he had in his jail cell.
Samson, true enough, involved the search of a parolee’s person, not his residence. But the
Court’s reasonableness inquiry focused on the parolee’s status and the freedom-to-search condition
attached to his parole, not on a person-versus-premises distinction. Smith’s status gave him no
greater expectation of privacy than Samson, and the rules governing Smith’s confinement allowed
officers to search the premises and the areas within Smith’s control “just as if he were still in the
facility.” JA 94. Samson thus applies. “Any other rule would diminish the protection to society
given by the search condition [that] permit[s] search at any time.” United States v. Lopez, 474 F.3d
1208, 1213 (9th Cir. 2007) (applying Samson to the search of a parolee’s residence).
Smith also tries to distinguish Samson on the ground that his search condition was
communicated through a video and orientation discussions, not through a written parole agreement.
That fact neither distinguishes Samson nor diminishes the clarity of the condition. There was no
written search condition for parole because the Department of Corrections did not place Smith on
parole. Individuals released to a community residential home, like prisoners in a correctional
facility, are bound by the Department of Corrections’ rules, which may or may not include a written
agreement. Compare Mich. Admin. Code r. 791.4425(3) (“Each prisoner who is classified to
community status shall be subject to general and special conditions that are established by the head
of the office of residential and electronic programs.”), with id. r. 791.7730(4) (“A paroled prisoner
shall comply with the conditions of parole contained in the parole order and with all subsequent
conditions approved by the chairperson of the parole board.”). Samson expressly declined,
moreover, to rest its holding solely on a consent rationale, 547 U.S. at 852 n.3, explaining that the
written condition was but one “salient” factor in the “totality of the circumstances pertaining to [the
parolee’s] status,” id. at 852 (internal quotation marks omitted). See Wilson, 517 F.3d at 426–27
(refusing to confine Samson to situations in which a suspicionless search is expressly authorized by
a parole agreement). The district court correctly denied Smith’s suppression motion.
B.
Smith independently argues that the officers’ unannounced entry into the residence failed
to comply with the knock-and-announce rule “in violation of the Fourth Amendment and 18 U.S.C.
§ 3109” and contends that the evidence should be suppressed on this ground alone. JA 12; see also
Richards v. Wisconsin, 520 U.S. 385, 394 (1997). We disagree.
1.
Like the district court, we find it unnecessary to resolve the witnesses’ conflicting testimony
to determine whether there was a knock-and-announce violation. And we agree with the district
court that, regardless of whether there was a violation, the Supreme Court has held that the
exclusionary rule does not apply in this setting. Hudson v. Michigan, 547 U.S. 586 (2006),
concluded that, if officers violate the knock-and-announce rule in the course of executing a search
warrant, the victim may file a § 1983 action for money damages but may not suppress the evidence
because that remedy does not further the interests served by the knock-and-announce rule, see id.
at 593, 597, and because at any rate the “deterrence benefits” of the exclusionary rule do not
“outweigh its substantial social costs,” id. at 594 (internal quotation marks omitted).
Nor, contrary to Smith’s suggestion, does Hudson apply only when the officers have a search
warrant. The explanations given by Hudson are not confined to situations in which the officers
violate the knock-and-announce rule after obtaining a warrant as opposed to situations, like this one,
where they allegedly violate the rule when they need not obtain a warrant. In both settings, the
interests served by the knock-and-announce rule—protection of life and limb, protection of property
No. 07-1375 United States v. Smith Page 5
and the opportunity to collect oneself before answering the door—“have nothing to do with the
seizure of the evidence,” id., and nothing to do with whether the Fourth Amendment required the
officers to obtain a warrant. There is nothing about the presence of a warrant that increases the
value of deterring knock-and-announce violations, which the Court tells us “is not worth a lot,” id.
at 596, or that mitigates the “substantial social costs” of suppressing the evidence, id. at 594 (internal
quotation marks omitted).
Smith’s rule also inverts the relative vices and virtues of the two situations. Why should
Smith have more to gain from a knock-and-announce violation when the Fourth Amendment does
not even require the officer to obtain a warrant to search his home because he has little-to-no
expectation of privacy? Or what about a probationer who expressly consents to future searches?
See Knights, 534 U.S. at 114. If there is a potential distinction here, it would be that when the
Fourth Amendment requires the police to have a warrant before they search a home, the victims of
that knock-and-announce violation ought to benefit from the exclusionary rule more than individuals
for whom the Fourth Amendment imposes no such requirement—a distinction quite the opposite
from the one Smith proposes. Yet because Hudson already says that the exclusionary rule does not
apply to the individuals with the greatest and most legitimate expectations of privacy, it necessarily
does not apply to those with the least.
2.
As for Smith’s reliance on the federal knock-and-announce statute, 18 U.S.C. § 3109, there
is not much to say. It “regulates only federal officers . . . and has no application when state officers,
acting totally without federal involvement, seize evidence that is later offered in a federal
prosecution.” United States v. Gatewood, 60 F.3d 248, 249 (6th Cir. 1995) (internal quotation marks
omitted); see also United States v. Ferguson, 252 F. App’x 714, 719 (6th Cir. Oct. 26, 2007).
Because both sides agree that only state officers conducted the search, the statute does not apply.
III.
For these reasons, we affirm.
|
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752 F.2d 454
22 ERC 1273, 15 Envtl. L. Rep. 20,190
Raymond W. LUCKIE, et ux., et al., Plaintiffs-Appellants,v.ENVIRONMENTAL PROTECTION AGENCY, et al., Defendants-Appellees.
No. 83-1907.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted Nov. 15, 1984.Decided Jan. 25, 1985.
Joe P. Sparks, Kevin T. Tehan, Sparks & Siler, P.C., Scottsdale, Ariz., for plaintiffs-appellants.
David O. Ledbetter, Trial Atty., U.S. Dept. of Justice, Washington, D.C., for defendants-appellees.
Appeal from the United States District Court for the District of Arizona.
Before MERRILL, KENNEDY, and ANDERSON, Circuit Judges.
J. BLAINE ANDERSON, Circuit Judge:
1
Appellants ("Residents") appeal from the district court's dismissal of their complaint for lack of jurisdiction and failure to state a claim upon which relief could be granted. Residents' claims against the Environmental Protection Agency ("EPA") were premised upon the Clean Air Act ("CAA"), 42 U.S.C. Sec. 7401 et seq. (1982), the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Sec. 6901 et seq. (1982), and the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. Sec. 9601 et seq. (1982). We affirm in part, and remand in part with instructions.
I. BACKGROUND
2
Residents are owners and occupants of certain lots within the Mountain View Mobile Home Subdivision ("Mountain View") situated in Globe, Arizona. Residents purchased their respective lots between the years 1975 and 1978. Located nearby are various asbestos mining and processing facilities, one of which, the Metate Mill, is apparently located inside the boundaries of Mountain View. Mountain View itself is built atop a dumpsite for asbestos tailings (waste left over from the milling process).
3
In December of 1979, Residents learned from the state of Arizona of the possibility that Mountain View was contaminated. The state applied a covering of topsoil to Residents' yards in an effort to contain the asbestos. In addition, the Metate Mill was dismantled. In early 1980, EPA's Environmental Research Center informed EPA Region Nine that the abandoned Metate Mill presented very high health hazards to Residents, and recommended that Residents' homes be removed and relocated. By the middle of 1980, the protective soil coverings showed signs of erosion, but no action was taken by EPA at that time.
4
The Administrator of the EPA ("Administrator") was delegated authority under CERCLA1 in August of 1981. Residents claim that after this time the EPA ceased providing them with information pertaining to their possible relocation under CERCLA. Residents filed a request under the Freedom of Information Act, which went unanswered. This lawsuit followed in November of 1981, filed by Residents against the Administrator and various other defendants.
5
Residents' complaint prayed for various forms of relief, primarily injunctive and declaratory, based upon CAA, RCRA and CERCLA. Pursuant to Fed.R.Civ.Proc. 34, Residents made a request for documents in an effort to substantiate their claims. Arguing that Residents' claims were based upon discretionary duties of the agency and, therefore, not reviewable, EPA moved the court to dismiss the complaint. EPA also moved, pursuant to Fed.R.Civ.Proc. 37, for a protective order to prevent discovery of the requested documents until the motion to dismiss could be ruled upon. Residents countered with a motion to compel discovery, claiming that EPA's motion to dismiss should be treated as a motion for summary judgment, therefore permitting discovery before a response. The district court denied Residents' motion to compel, and in due course granted EPA's motion to dismiss. Residents then brought this appeal.
6
Subsequently, several events have taken place which change the posture of this lawsuit. First, on May 13, 1983, pursuant to a request by the Administrator, the United States brought an enforcement action against the mill and waste dump owners to abate the hazard at Mountain View. Second, on September 8, 1983, Mountain View was placed on the National Contingency Plan's "National Priority List."2 Finally, in cooperation with the state government, and under the provisions of CERCLA (SUPERFUND), the EPA has undertaken a comprehensive program at Mountain View which includes permanent removal and relocation of all Residents, purchase of their property at full value, and on-site destruction of their mobile homes. These developments raise the question of mootness.
II. DISCUSSION
7
In dismissing the complaint, the district court carefully considered the many claims alleged by Residents. Because questions of law are involved, we review the district court's decision under the de novo standard of review. United States v. McConney, 728 F.2d 1195 (9th Cir.1984) (en banc), cert. denied, --- U.S. ----, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984).
1. Emission Standards
8
Residents challenge EPA's current "no visible emission" standard for asbestos3 by claiming that it is not quantifiable and, therefore, not a valid emission standard as required by the CAA, 42 U.S.C. Sec. 7412. In so challenging, Residents rely heavily upon Adamo Wrecking Co. v. United States, 434 U.S. 275, 98 S.Ct. 566, 54 L.Ed.2d 538 (1978).
9
The district court concluded that the "no visible emission" standard is an emission standard within the meaning of 42 U.S.C. Sec. 7412. Consequently, the district court also concluded that it lacked subject matter jurisdiction. We agree.
10
Claims challenging the validity of standards promulgated by the Administrator "may be filed only in the United States Court of Appeals for the District of Columbia." 42 U.S.C. Sec. 7607(b)(1). The Supreme Court in Adamo held "that one ... who is charged with a criminal violation under the [CAA] may defend on the ground that the 'emission standard' which he is charged with having violated was not an 'emission standard' within the contemplation of Congress when it employed that term." 434 U.S. at 279, 98 S.Ct. at 570, 54 L.Ed.2d at 544 (emphasis added). Furthermore, the Court took great care to limit the holding, warning district courts not to engage in judicial review of that type precluded by section 7607 "under the guise of making a determination as to whether a regulation is an 'emission standard.' " 434 U.S. at 285, 98 S.Ct. at 573, 54 L.Ed.2d at 548. Adamo is, without question, inapplicable to the facts at bar, as Residents face no criminal charges. The district court correctly concluded that this claim was improperly before the court and wisely dismissed for lack of subject matter jurisdiction. We affirm as to this issue.
2. Statutory Review
11
Residents' complaint before the district court asserted numerous claims against EPA for violations of CAA, RCRA, and CERCLA in that the Agency allegedly failed to carry out certain "mandatory" duties. Both CAA and RCRA contain a so-called "citizens-suit" provision which allows federal jurisdiction for suits against the Administrator "where there is alleged a failure of the Administrator to perform any act or duty under this [statute] which is not discretionary with the Administrator." 42 U.S.C. Sec. 7604(a)(2); 42 U.S.C. Sec. 6972(a)(2). (Emphasis added). CERCLA does not contain such a provision, and much has been made of the legislative history and intent behind this conscious exclusion, as well as the possibility that Congress is now considering an amendment to include some similar provision.
12
The district court reviewed separately the alleged violations under each act, concluding for the most part that EPA's duties under the specified provisions were discretionary. Therefore, these allegations were dismissed under Fed.R.Civ.P. 12(b)(6). As to the CERCLA claims, the district court also held that there was no cause of action because, inter alia, citizens-suits were not allowed. One of Residents' allegations (under RCRA), however, was dismissed because it was not ripe for review. This concerned EPA's alleged failure to regulate asbestos as a hazardous waste, pursuant to a special study which was not yet due at the time of the decision below.
13
On appeal, residents have placed little reliance on these claimed violations of mandatory duties. They do, however, note that the special study, which was due in October, 1983, has never been issued. For this reason, Residents demand that this count be remanded to the district court.
14
This court's power is limited to the adjudication of actual cases and live controversies. We lack jurisdiction to hear moot cases. We cannot give opinions upon abstract propositions; an actual controversy must exist at all stages of review. DeFunis v. Odegaard, 416 U.S. 312, 316, 94 S.Ct. 1704, 1705, 40 L.Ed.2d 164 (1974) (per curiam); Trustees For Alaska v. EPA, 749 F.2d 549, at 554 (9th Cir.1984); Enrico's, Inc. v. Rice, 730 F.2d 1250 (9th Cir.1984).
15
To the extent that Residents' claims regarding mandatory duties under the statutes are again being asserted on appeal, we find that they are now moot. For reasons discussed more completely infra, there remains no effective relief which we can offer Residents.
3. Non-Statutory Review
16
Residents have also asserted a right to review under provisions outside of the specific allowances of CAA, RCRA, and CERCLA. These contentions have proved to be the heart of Residents' appeal. Simply put, Residents argue that, although the Administrator is granted wide discretion under the statutes, a complete failure to exercise that discretion through some remedial or response action is itself an abuse of discretion. Residents then point to a clause common to both CAA and RCRA which states:
17
Nothing in this Section shall restrict any right which any person (or class of persons) may have under any statute or common law to seek enforcement of any ... standard ... or to seek any other relief (including relief against the Administrator or a State agency).
18
42 U.S.C. Sec. 7604(e); 42 U.S.C. Sec. 6972(f). Relying on this language in CAA and RCRA, and the fact that CERCLA contains no citizens-suit clause, Residents assert that there is jurisdiction independent of the statutes' own provisions with which to review this alleged abuse of discretion. Residents then state that under the authority of the Administrative Procedure Act ("APA"), 5 U.S.C. Sec. 701 et seq. (1982), this independent jurisdiction is granted by the general federal question statute, 28 U.S.C. Sec. 1331 (1982), the Federal Mandamus and Venue Act, 28 U.S.C. Sec. 1361 (1982) and the Declaratory Judgment Act, 28 U.S.C. Sec. 2201 (1982).
19
The district court rejected the Mandamus Act, the Declaratory Judgment Act, and section 1331, holding that they did not grant independent jurisdiction. In addition, the court held that the lack of any provision in CERCLA allowing suits against the Administrator precludes a private cause of action to compel EPA to perform its mandatory duties.4 For its part, EPA has strenuously fought this notion of "nonstatutory" review, but the Agency does concede that jurisdiction is available under the APA to compel performance of CERCLA's mandatory duties.5
20
These arguments raise intriguing and complex legal questions which, when combined with the circumstances of Residents' plight, threaten to lure this court down a path it has an obligation not to tread. It is deeply unfortunate that Residents were in need of EPA's help and found EPA unable to respond. However, EPA has since moved, albeit belatedly, to provide for as much or more relief as the Residents had prayed. As we have noted, this relief includes an enforcement action brought against the private defendants, and permanent relocation of the Residents, among other things. Because we simply cannot grant any remaining effective relief, we must find these claims moot.
21
Confronted with these circumstances, Residents further assert that the issues should be decided because they are "capable of repetition, yet evading review." This test of the mootness doctrine applies when:
22
(1) the challenged action [is] in its duration too short to be fully litigated prior to its cessation or expiration, and (2) there [is] a reasonable expectation that the same complaining party would be subjected to the same action again.
23
Weinstein v. Bradford, 423 U.S. 147, 149, 96 S.Ct. 347, 348, 46 L.Ed.2d 350 (1975) (per curiam); Trustees For Alaska v. EPA, 749 F.2d 549, at 554 (9th Cir.1984); Johansen v. San Diego County Dist. Council, 745 F.2d 1289, 1292 (9th Cir.1984).
24
Although the "capable of repetition" test is most logically applied in situations where intervening events beyond the control of either party render relief impossible or unnecessary,6 rather than in instances such as this where it is the defendants' actions which create an issue of mootness, we briefly address Residents' contentions. There is very little chance, much less a "reasonable expectation," that Residents will be subjected to the same action again. For this to occur, Residents would have to be relocated atop another asbestos dump, or similar site, and again be subjected to EPA's regulatory and enforcement scheme. We note as well that this lawsuit is not a class action. A possibility this speculative does not meet the second half of the test, and therefore we need not discuss the remainder.
25
Consideration must also be given to the "voluntary cessation" doctrine, which is a more logical test for mootness in this situation. Ordinarily, voluntary cessation of allegedly illegal conduct does not render a case moot, United States v. W.T. Grant Co., 345 U.S. 629, 632, 73 S.Ct. 894, 897, 97 L.Ed. 1303, 1309 (1953), unless the defendant can show (1) that there is no reasonable expectation that the alleged violation will recur,7 and (2) that interim relief or events have completely and irrevocably eradicated the effects of the alleged violation. County of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 1383, 59 L.Ed.2d 642, 649 (1979). We feel EPA has met its heavy burden under this test.
26
In addition to our earlier discussion on the unlikelihood of recurrence, we add that most of Mountain View's residents have received and accepted offers for their property at the fair market value before the problem was discovered. Further, in EPA's lawsuit against those allegedly responsible for the contamination, the Agency has been granted a partial summary judgment.8 Any settlement of the remainder of this enforcement action would require concurrence of the Assistant Attorney General and be preceded by the lodging of the settlement with the court, pending a period of public notice and comment. 28 C.F.R. 50.7 (1984). We conclude that the effects of EPA's violations, as alleged by these Residents, have been completely and irrevocably eradicated, and that there is no reasonable expectation of recurrence. Consequently, Residents' claims are now moot.
4. Discovery Orders
27
Residents also allege that reversal of the district court is warranted by erroneous rulings on discovery matters. Once again, a treatment of the merits of this issue is fruitless and prohibited. We can give no more effective relief. For the reasons outlined above, this issue is also moot.
28
Accordingly, the district court's decision is
29
AFFIRMED in part, and VACATED and REMANDED in part, with instructions that Residents' claims be dismissed as moot.
1
CERCLA contains SUPERFUND, designed to finance clean-up actions. SUPERFUND was enacted on December 11, 1980. President Reagan delegated his authority under SUPERFUND to Administrator Anne Burford on August 14, 1981, through Executive Order No. 12316, 45 Fed.Reg. 42237
2
The revised National Contingency Plan was promulgated on July 16, 1982, 47 Fed.Reg. 31180, et seq. Mountain View was placed on the NCP's National Priority List, promulgated September 8, 1983, 48 Fed.Reg. 50670
3
40 C.F.R. 61.142 (1984)
4
The district court also held, as noted supra, that even if such a private cause of action were recognized, it would not aid Residents, who had raised as error only discretionary duties of the Administrator
5
EPA agrees with Residents that this is necessary to accomplish the same purposes accomplished by the citizens-suit provisions of CAA and RCRA
6
See E.D.F. v. Gorsuch, 713 F.2d 802, 818-821 (DC Cir.1983) (Wilkey, J., dissenting) (distinguishing between applications of the "voluntary cessation" and the "capable of repetition" tests)
7
Some circuits, including this one, have said that where the government's actions are those questioned, "the mere probability of recurrence must be coupled with a certainty that the impact will fall on the same objecting litigants." State Highway Commission of Missouri v. Volpe, 479 F.2d 1099, 1106 (8th Cir.1973); Accord, Halvonik v. Reagan, 457 F.2d 311, 313 (9th Cir.1972); Committee to Free the Fort Dix 38 v. Collins, 429 F.2d 807, 812 (3d Cir.1970)
8
The United States District Court for the District of Arizona granted partial summary judgment on April 10, 1984, in United States v. Metate Asbestos Corp., et al., 584 F.Supp. 1143
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. PD-1631-09
WILLIAM MARK GIBSON Appellant
v.
THE STATE OF TEXAS
ON REHEARING OF APPELLANT’S
PETITION FOR DISCRETIONARY REVIEW
FROM THE FIRST COURT OF APPEALS
McLENNAN COUNTY
Per curiam.
O P I N I O N
Appellant was convicted of capital murder and punishment was assessed at
confinement for life. The Court of Appeals affirmed the conviction. Gibson v. State, No.
01-08-00275-CR (Tex. App. — Houston [1st], delivered July 30, 2009). Appellant’s
petition for discretionary review was dismissed as untimely filed on May 26, 2010.
Appellant has filed a motion for rehearing requesting reinstatement of his petition so that
it will be considered by this Court. Appellant’s motion for rehearing is granted. His
petition filed on March 17, 2010, is reinstated as of June 30, 2010, and will be considered
in accord with Tex.R.App.P. 68. The copies must be filed in THIS Court by July 7, 2010.
Delivered June 30, 2010
Do not publish
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477 S.W.2d 683 (1972)
ROYAL INDEMNITY COMPANY, Appellant,
v.
David HUME, Administrator of the Estate of Adolfo Mireles, Deceased, Appellee.
No. 15023.
Court of Civil Appeals of Texas, San Antonio.
March 1, 1972.
*684 Delno J. Grosenheider, House, Mercer, House & Brock, Austin, for appellant.
Hume & Hume, David Hume, V. F. Knickerbocker, Eagle Pass, for appellee.
CADENA, Justice.
Plaintiff, David Hume, administrator of the estate of Adolfo Mireles, deceased, filed this suit to recover under an accidental death insurance policy. Defendant insurer, Royal Indemnity Company, appeals from a judgment, based on a jury verdict, awarding plaintiff $5,000.00, the face amount of the policy, plus $2,233.25 interest, $610.00 penalty and $2,500.00 as attorney's fees.
In answer to the first three special issues the jury found that the death of Mireles (1) resulted from accidental bodily injuries (2) directly and independently of all other causes, and that (3) a heart attack or heart condition did not contribute to the death.
Appellant presents twelve points contending that the verdict lacks support in the evidence and one point complaining of the admission of the testimony of Dr. Harry Kaback concerning the cause of decedent's death. We consider first the point relating to the admission of the doctor's testimony.
Appellant asserts that the trial court erred in admitting the doctor's testimony "... for the reason that when his testimony is considered as a whole it does not meet the test of reasonable medical probability." Appellant's brief fails to direct our attention to any portion of the record which reflects that it objected to the evidence, or moved that the evidence be stricken, for the reason presented in the point now under consideration. Nor was this claim of error incorporated in appellant's motion for new trial, although appellant states that the point is germane to the third assignment of error in its motion for new trial. This assignment complains of the admission of the doctor's answer to a hypothetical question "... over the objection that said hypothetical question contained facts not in evidence before the Court and no proper predicate had been laid by Dr. Kaback to answer the hypothetical question." This assignment does not embody the complaint here raised by appellant. We cannot consider the point concerning the admission of Dr. Kaback's testimony. Rules 320, 321, Texas Rules of Civil Procedure.
*685 In passing on appellant's "no evidence" points we shall consider only the evidence, and the inferences from such evidence, which support the jury findings. Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex.L.Rev. 361, 364 (1960).
Mireles, a member of the volunteer fire department of the City of Eagle Pass, died while participating in a fire drill during the evening of September 9, 1963. He had already participated in one drill that night, but volunteered to participate in the second drill when a member of the crew scheduled to engage in the second drill could not be located. During the second drill Mireles was assigned the duty of inspecting the fire hose, after it had been laid, and to remove any kinks which he might find in the hose.
About ten or fifteen minutes after the second drill had begun, one of the firemen found Mireles lying unconscious in the street between the curb and the fire hose, about one foot from the curb. There was a bruise, marked by swelling and discoloration, in the area of his right temple. After mouth-to-mouth resuscitation had failed to revive him, he was taken to the hospital in a truck. At the hospital, an oxygen mask was placed over his face. About 30 or 45 minutes later, Dr. Raul Montemayor arrived at the emergency room and, without removing the oxygen mask, placed a stethoscope on various parts of the decedent's body. According to the undisputed testimony, this was the extent of the examination conducted by Dr. Montemayor, who then pronounced Mireles dead. According to the hospital records, Mireles was "dead on arrival." From the time that he was found lying on the street, Mireles did not speak, nor did anyone detect any bodily movement of any kind.
One of the witnesses testified that blood was "coming" from the right corner of decedent's right eye.
During the drill, the water pressure in the hose at the pump was 150 pounds per square inch, while at the nozzle of the hose the pressure was 125 pounds per square inch. In order for a man to remove kinks from the hose, it is necessary that he bend over and pick up the hose. When a kink is removed from a hose subjected to the pressure detailed above, the hose may "pull" or "kick" with a force sufficient to knock down even an experienced fireman. There was water in the street along which the hose had been laid. No one saw Mireles between the time that he left the truck to inspect the hose and the time that he was found lying in the street. No one saw him fall.
At the time of his death, Mireles was 51 years old, 68 inches in height, and weighed 140 pounds, with no evidence of a bulging midriff. His sister, with whom he had lived for the 25 years immediately preceding his death, testified that he had never been ill during that time and had never consulted a physician. On the evening of his death he came home from his regular employment as a painter and ate supper. When he left for the fire station there were no marks on his face, did not complain of feeling ill, and was in good spirits. The fireman who saw him at rather close range when he volunteered to participate in the second drill testified that he was in good spirits, did not complain of physical discomfort, and had no marks on his face.
In answer to a hypothetical question, Dr. Kaback stated that Mireles probably died as a result of a blow to the head. He based this conclusion on the presence of the swelling and discoloration in the area of the right temple. He stated that swelling in the area of an injury results from the diffusion of blood and other bodily fluids from the fine capillaries, and that if Mireles had suffered a heart attack as the result of which he fell "... and injured himself, there would not be any swelling ...." due to the absence of sufficient blood pressure as the result of the heart attack. He further testified that when a person faints he usually leans forward and will "sag downward," so that in *686 most cases he will not be hurt as the result of falling to the ground, since his fall is not a violent one. He stated: "... I would say, everything is probable without an autopsy, but I would say 60 head blow, 40 heart attack. That is my sincere feeling. I always feel that it's possible it was a heart attack."
Dr. Kaback testified that, in his opinion, neither disease nor bacterial infection contributed to the death of Mireles. Appellant did not specifically plead any other exclusionary provision of the policy. See Rule 94, T.R.C.P.
In view of the circumstances showing the application of violent external force to the body of Mireles, and taking into consideration the testimony of the doctor that a collapse due to a heart attack was unlikely to produce the bruise on the face of Mireles, we cannot say that there is no evidence supporting the inference that deceased was the victim of an accidental injury. Nor, considering the testimony of the doctor, can it be said that there is no evidence supporting the finding that the blow to the head was the sole cause of the death of insured. Order of United Commercial Travelers v. Simpson, 177 S.W. 169 (Tex.Civ.App.Dallas, 1915, writ ref'd); Koger v. Mutual of Omaha Ins. Co., 152 W.Va. 274, 163 S.E.2d 672 (1968); Barnes v. Home Beneficial Life Ins. Co., 271 N.C. 217, 155 S.E.2d 492 (1967); Griffin v. Prudential Ins. Co., 102 Utah 563, 133 P.2d 333 (1943); Bickes v. Travelers' Ins. Co., 87 Colo. 297, 287 P. 859 (1930); 10 Couch on Insurance 2d, Sec. 41:45, pp. 70-71 (1962).
Appellant calls our attention to the so-called rule against pyramiding inferences, relying on Briones v. Levine's Department Store, Inc., 446 S.W.2d 7 (Tex. 1969), and Alamo Casualty Co. v. Stephens, 259 S.W.2d 729 (Tex.Civ.App.Austin 1953, writ ref'd n. r. e.). It is doubtful if the rule on which appellant relies actually exists.[1] The true nature of the rule against *687 cumulative inferences was correctly stated by the late Justice Norvell, who then graced this bench, as merely "... a shorthand rendition of the rule which requires that verdicts be based upon more than surmise and guesswork." Phoenix Ref. Co. v. Powell, 251 S.W.2d 892, 902 (1952, writ ref'd n. r. e.).
In any event, the rule contended for by appellant, if it does exist, is inapplicable here. There is direct testimony to the effect that Mireles received an injury which was the sole cause of his death. The only inference which need be drawn in order to establish appellant's liability is that the injury was accidental. The conclusion that the injury was the sole cause of death rests on the fact, established by direct testimony, of the existence of the physical injury and not on the inferred fact of accident.
Appellant's remaining points assert that the evidence is insufficient to support the findings of the jury.
In appellant's motion for new trial, only the fourth and fifth paragraphs question the evidentiary support for the finding in response to special issue no. 1. The fourth paragraph asserts that the answer to the first special issue is not supported by the evidence "... because there was no evidence that Adolfo Leopoldo Mireles died of accidental bodily injuries." The fifth paragraph challenges the finding as being contrary to the evidence "... in that the undisputed evidence shows that Adolfo Leopoldo Mireles died of a cardiac infarction, or heart attack."
Paragraphs 8 and 9 of the motion for new trial challenge the finding, in answer to the third issue, that a heart attack did not contribute to the death of Mireles. Paragraph 8 contends that there is "no evidence" to show that a heart attack did not contribute to the death, while paragraph 9 asserts that the "... undisputed evidence shows that a heart attack, or heart condition, did contribute to his death."
These four assignments are "no evidence" assignments. Paragraphs 4 and 8 are expressly couched in "no evidence" language. Paragraphs 5 and 9 assert that the challenged findings cannot stand because the "undisputed evidence" shows the contrary. A statement to the effect that the "undisputed" evidence establishes the existence of a fact asserts that there is no evidence to the contrary. Cf. Texas Indemnity Ins. Co. v. Dunn, 221 S.W.2d 922, 923 (Tex.Civ.App.Waco 1949, no writ), where it is held that an assignment to the effect that the evidence shows "conclusively that plaintiff had not suffered total and permanent disability" amounts to a complaint that there is no evidence showing total and permanent disability; and Spurlock v. Burnette, 365 S.W.2d 812, 814 (Tex. Civ.App.Austin 1963, no writ), holding that an assignment that a finding is "against the uncontradicted testimony" is a "no evidence" complaint and cannot be enlarged to embrace the ground that the jury findings are against the overwhelming weight and preponderance of the evidence.
Since appellant did not complain in its motion for new trial that there was *688 "insufficient evidence" to support the answers to issues 1 and 3, and since the motion for new trial contains no assertion that the answers to such issues are against the overwhelming weight and preponderance of the evidence, we cannot consider appellant's points challenging the factual sufficiency of the evidence to support the jury's answers to those issues. Darryl v. Ford Motor Co., 440 S.W.2d 630 (Tex. 1969); Smith v. Texas Pipeline Co., 455 S.W.2d 346 (Tex.Civ.App.Corpus Christi 1970, writ ref'd, n. r. e.).
Paragraph 6 of the motion for new trial asserts that the jury finding that decedent's death resulted from accidental bodily injury, directly and independently of all other causes (special issue no. 2), is not supported by the evidence "... because the evidence shows that a cardiac infarction, or heart attack, was the cause of death." This paragraph can be interpreted as embodying the contention that the finding is against the overwhelming weight and preponderance of the evidence or, more correctly, since the burden on this issue was on plaintiff, that the evidence is insufficient to support the finding. We so interpret it. We, therefore, will examine all of the evidence to determine whether there is sufficient evidence to support the finding that the death resulted independently of a heart attack.
In its brief, appellant summarizes the testimony of Dr. Kaback as follows:
"Dr. Harry Kaback began his testimony in response to a hypothetical question and at that time stated that in his opinion the chances were 60-40 that a blow to the head caused Mireles' death. Upon cross-examination Dr. Kaback lowered his opinion to 55-45, and by the time Dr. Kaback concluded his testimony and after having an opportunity to examine the death certificate signed by Dr. Montemayor which stated that the death was caused by a myocardial infarction, instant, due to overexertion stated that he himself was puzzled as to which it was and that even though in 95 out of 100 cases a death of this nature would be due to heart attack or myocardial infarction, it could be possible that the man died as the result of a blow to the head."
In Insurance Co. of North America v. Myers, 411 S.W.2d 710, 713 (Tex.1966), it was pointed out that reasonable medical probability "... is determinable by consideration of the substance of the testimony of the expert witness and does not turn on semantics or on the use by the witness of any particular term or phrase." That is, although the physician uses "possibility" language in expressing his opinion, it may still amount to "probability" testimony when it is considered as a whole.
Here, the opinion of the doctor, while vacillating, must be considered as a whole. He stated directly that, in reasonable medical probability, the death of Mireles was caused by a blow to the head, rather than a heart attack. In evaluating the doctor's evidence, "... we must recognize that there are areas for jury and judge to construe the testimony of the doctor." Insurance Co. of North America v. Kneten, 440 S.W.2d 52, 54 (Tex.1969). While, in view of the sometimes equivocal nature of the doctor's testimony, the jury might well have determined that plaintiff had not discharged his burden of establishing that a heart attack did not contribute to the death of Mireles, we cannot say that, when all of the evidence is considered, the testimony is insufficient to support the conclusion that heart attack did not contribute to the death.
The cursory nature of the examination conducted by Dr. Montemayor, who signed the death certificate, was unknown to Dr. Kaback, but known to the jury. In evaluating the testimony of Dr. Kaback, the jury would be justified in concluding that the hedging nature of his testimony after being shown the death certificate was due to his mistaken belief that Dr. Montemayor had *689 conducted a careful examination of the corpse.
The judgment of the trial court is affirmed.
BARROW, C. J., concurs in the result.
NOTES
[1] The origin of the rule is obscure. Judges and legal scholars who have made any serious effort to analyze the rule approach unanimity in condemning it. 1 Wigmore on Evidence, Sec. 41, p. 435 (3d ed. 1040); Anno: 5 A.L.R.3d 100, 105, 120-131 (1966).
In almost all of the Texas cases in which the no-inference-upon-an-inference rule is invoked, the incantation of the formula is mystifying, for the opinions clearly reflect that there is no demon, in the form of pyramided inferences, to be exorcised. The two cases relied on by appellant are excellent examples.
In Briones v. Levine's Department Store, Inc., supra, recovery by plaintiff depended on a finding that a lawnmower over which she had tripped "was amongst the clothes on a clothes rack." The evidence, as summarized in the opinion of a bare majority of the Supreme Court showed that in defendant's store an aisle was formed by a display table, at which plaintiff was examining merchandise, and a clothes rack. Plaintiff, who was at one end of the display table, took one step back and tripped over the lawnmower. The Court said that before the jury could find that the lawnmower was among the clothes in the clothes rack, it would have to infer that the rack ran the full length of the display table, since there was no testimony to that effect. Even if this "presumption" be indulged, said the Court, the second "presumption" as to the location of the lawnmower among the clothes could not be indulged, because the law does not permit the pyramiding of one "presumption" upon another. 446 S.W. 2d at 10. The problem in Briones does not involve the basing of an inference upon an inferred fact. The weakness in plaintiff's case there, if we accept the majority's evaluation of the evidence, was simply that, even if it be assumed that the clothes rack ran the full length of the display table, this fact is insufficient to support the inference that the lawnmower was "amongst" the clothes in the clothes rack. Stated differently, the inference that the lawnmower was among the clothes in the clothes rack cannot be fairly drawn from the fact that the clothes rack ran the full length of the table, and this is true whether the location of the clothes rack was established by inference or by direct, positive and undisputed testimony.
In Alamo Casualty Co. v. Stephens, supra, plaintiff sought recovery for the loss by fire of a building covered by a fire policy issued by defendant. Defendant contended that plaintiff had intentionally set fire to the building, but this issue was resolved by the jury in favor of plaintiff. On appeal, defendant complained of the exclusion of evidence concerning plaintiff's use of intoxicants and his altercation with the woman who operated a business in the building prior to the fire. The holding on appeal was that the evidence was properly excluded because the fact that plaintiff, when drunk, was abusive to women "... does not tend to prove that he knowingly set the building on fire." 259 S.W.2d at 735. Simply stated, the proffered evidence would not support the inference that plaintiff committed arson. Where the only holding is that the existence of fact A is no evidence of the existence of fact B, reference to the supposed prohibition against drawing of inferences from inferred facts is irrelevant.
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861 P.2d 516 (1993)
W.A. MONCRIEF, Jr., Appellant (Plaintiff),
v.
The LOUISIANA LAND AND EXPLORATION COMPANY; BHP Petroleum Company, Inc.; Inexco Oil Company; and North Central Oil Corporation, Appellees (Defendants).
MYCO INDUSTRIES, INC. and Yates Drilling Company, Appellants (Plaintiffs),
v.
The LOUISIANA LAND AND EXPLORATION COMPANY; BHP Petroleum Company, Inc.; Inexco Oil Company; and North Central Oil Corporation, Appellees (Defendants).
Nos. 92-23, 92-24.
Supreme Court of Wyoming.
November 4, 1993.
Rehearing Denied December 9, 1993.
*517 Morris R. Massey of Brown & Drew, Casper, Robert C. Grable of Kelly, Hart & Hallman, Fort Worth, TX, for appellant W.A. Moncrief, Jr. in No. 92-23.
Phillip Wm. Lear, Salt Lake City, UT, for appellants MYCO Industries, Inc. and Yates Drilling Co. in No. 92-24.
Marilyn Kite and Jack D. Palma, II of Holland & Hart, Cheyenne, Peter A. Bjork and James L. Simmons of Poulson, Odell & Peterson, Denver, CO, for appellees in Nos. 92-23, 92-24.
Before MACY, C.J., and THOMAS, CARDINE, GOLDEN and TAYLOR, JJ.
GOLDEN, Justice.
According to the parties, this declaratory judgment action involves the construction of unambiguous provisions of several written agreements relating to the non-consent drilling operations of a deep exploratory oil and gas well on acreage committed to the unitized field known as the Madden Deep Unit,[1] and the application of those unambiguous provisions to undisputed facts.
Following the publication of this court's original opinion in this case which reversed a summary judgment in favor of appellees, appellees applied for rehearing.[2] We granted that application. Appellees relied upon their memorandum of points and authorities submitted with their rehearing application, as well as upon their previous brief. Appellants also relied upon their previously filed briefs and filed a response to appellees' rehearing memorandum. Later, pursuant to this court's grant of rehearing, *518 oral argument was held on June 24, 1993.[3]
Upon the rehearing, a majority is now convinced that this court's original opinion was in error. Accordingly, that original opinion is herewith withdrawn. To place this in proper perspective, the following background is provided. Having the declaratory judgment action before it, the district court, in a summary judgment setting, determined that the provisions of the several written agreements were unambiguous and that the consenting parties (appellants) to the proposed drilling of the deep exploratory well in question constituted a minority in interest in the deep well's 640-acre drilling block area. Consequently, the district court held that the non-consenting parties (appellees) had to pay a penalty of 1,000 percent of the drilling costs and the cost of newly acquired equipment to and including wellhead connections, but did not have to execute an assignment to the consenting parties of their lease interests in a number of sections.
In this court's original opinion, a majority reversed the district court's summary judgment. The majority concluded (1) the doctrine of equitable conversion was applicable to the farmout agreement in question and the farmees, who belonged to the group of consenting parties, had earned an equitable interest in the farmout acreage when drilling of the deep exploratory well commenced and (2) the unit operating agreements were ambiguous with respect to (a) whether all acreage within the 640-acre drilling block area, including the 160-acre farmout tract, must be accounted for as either consenting or non-consenting, and (b) at what point in time the parties' ownership interests must be assessed, i.e., when they elect whether or not to participate in the drilling of the well or when the drilling of the well is commenced. Having concluded that these ambiguities existed, the majority remanded with directions that the district court consider extrinsic evidence to determine the parties' intent.
Having had the benefit of rehearing, a majority of this court has now concluded that the district court's summary judgment must be affirmed.
In the briefs originally filed, the respective parties presented certain issues to be addressed. As seen by appellant W.A. Moncrief, Jr., (Moncrief), the issues were:
A. The district court erred in ruling that the Farmout acreage did not constitute a committed working interest.
B. The district court erred in ruling that the Farmout acreage was not a carried working interest.
C. The district court erred in concluding that the Farmout acreage did not qualify as a working interest under the Unit Agreement.
D. The district court erred in ruling that Moncrief was not vested with an interest in the nature of an equitable title.
E. The district court erred in concluding that the interest of Moncrief in the Farmout was not an interest in the lease under federal regulations.
Appellants MYCO Industries, Inc. (MYCO) and Yates Drilling Company (Yates), being aligned with Moncrief, listed these issues:
A. Whether the district court committed reversible error by considering the *519 consenting parties' ownership interests at the time the well was proposed instead of at the time drilling operations commenced thereby concluding that the 160-acre tract was not "committed working interest" acreage owned by a party to the supplemental unit operating agreement?
B. Whether the district court committed reversible error by concluding Amoco's interest was not a "carried working interest" even though the farmees held a present interest in the working interest of the 160-acre tract and were obligated to pay all of the costs of the well while Amoco had no obligation to contribute to the costs?
Appellees, consisting of the Louisiana Land and Exploration Company, BHP Petroleum Company, Inc., Inexco Oil Company, and North Central Oil Corporation (all of whom are hereinafter collectively referred to as "non-consenting parties"), declared a single issue:
The District court was correct in ruling that Moncrief, MYCO, and Yates are not a "majority in interest" in the drilling of the Exploratory well in the Madden Deep Gas Unit.
FACTS
On May 1, 1967, the parties to this dispute, or their predecessors in interest, Amoco Production Company (Amoco), and others entered into a unit agreement for the Madden Deep Unit Area (unit agreement) covering about 70,000 acres in Natrona County and Fremont County, Wyoming. Each party's working interest in acreage committed to the unit was listed on Exhibit B attached to the unit agreement. Amoco was the working interest owner of the 160-acre tract of land at issue in this case,[4] and Amoco held a federal oil and gas lease on this tract. Amoco's working interest was shown on Exhibit B.
On April 2, 1968, the parties to this dispute, or their predecessors in interest, entered into the so-called Madden-Badwater Agreement. Article III of that agreement, titled "After Acquired Leases," provided, in relevant part, that if a party acquires an interest in an oil and gas lease within a certain designated area then that party shall promptly offer an interest in such lease interest to the other parties. An offeree has ten days in which to notify in writing the offeror of its election to participate in the acquisition.
On June 17, 1969, the parties to the unit agreement entered into a Revised Unit Operating Agreement (Revised UOA). Among others, the parties to this Revised UOA include Amoco and the parties to this dispute, or their respective predecessors in interest. As to all parties, the Revised UOA governs unit operations at subsurface depths above the base of the Waltman Shale.
On June 2, 1975, some of the parties to the Revised UOA, notably including appellants and appellees, entered into a Supplemental Unit Operating Agreement (Supplemental UOA) to govern operations at subsurface depths greater than 5,500 feet below the base of the Waltman Shale. Amoco did not enter into this Supplemental UOA. Accordingly, Amoco's deep rights, i.e., rights at subsurface depths greater than 5,500 feet below the base of the Waltman Shale, continued to be governed by the Revised UOA. In summary, then, either the Revised UOA or the Supplemental UOA, or both, apply to operations of the Madden Deep Unit, depending upon the depth of the drilling and the identity of the parties involved.
In May, 1990, Moncrief obtained a commitment from Amoco to enter into a farmout *520 agreement[5] covering Amoco's 160-acre tract. Amoco's lease was not in danger of expiring if drilling was not expeditiously commenced. Rather, the lease was held by production. The parties agree that Amoco's purpose in entering into the farmout was to obtain geologic information.[6] Moncrief and Amoco continued negotiations about the specific terms of the farmout agreement into July, 1990. They did not finalize these terms until July 26, 1990, or a few days thereafter.[7] Before we examine more closely their negotiations and the relevant language of the farmout agreement as it appeared both in the initial proposed agreement and in the finalized agreement, we shall note the other events that transpired during the time period in which those negotiations continued.
By Moncrief's letter dated May 31, 1990, showing addressees as
"Madden Deep Group
Madden Deep Unit
Working Interest Owners"
Moncrief discussed the Amoco farmout, proposed an exploratory well to be drilled on the farmout tract, designated the drilling block area for this exploratory well, and invoked the provisions of both the Revised UOA and the Supplemental UOA concerning the election whether or not to participate in the drilling of the proposed well. About the Amoco farmout, Moncrief stated he "has obtained" the farmout covering Amoco's 160-acre tract "which will be earned by drilling a well on or within a mile of said tract." About the drilling of that well, Moncrief proposed "a 24,500' Madison test in the SW¼ NE¼ of Section 12," which was the Amoco tract, under the terms of both the Revised UOA and the Supplemental UOA. Moncrief designated the 640 acres of Section 12 as the drilling block area "for this exploratory Madison well." About the working interest owners' election whether or not to participate in the proposed exploratory well, Moncrief stated, "[u]nder the terms of [both the Revised UOA and the Supplemental UOA], kindly advise of your decision within the 30-day required time period." It is useful to remember that this letter was sent May 31, 1990, but the Moncrief-Amoco farmout agreement was not finalized until July 26, 1990, or a few days thereafter.
It is evident that in the time period between Moncrief's May 31 letter and another letter written by Moncrief dated July 11, *521 1990, the contents of which we will describe shortly, the parties made their first of two elections whether or not to participate in Moncrief's proposed exploratory well. Appellants (the consenting parties) elected to participate in the proposed exploratory well to be drilled on the Amoco tract. Appellant Yates also agreed to participate in the Moncrief-Amoco farmout, the agreement for which was still being negotiated. Appellees (the non-consenting parties) elected not to participate either in the proposed exploratory well or the proposed farmout. These foregoing facts are evident from the contents of Moncrief's July 11 letter addressed to the parties to this dispute. In that letter Moncrief announced which of the parties had elected to participate in the proposed well and which had elected not to participate. Noticeably absent from either group was the name of Amoco. In that letter, Moncrief also specifically referred to Section 6.4 of Article 6 of the Supplemental UOA, which is titled "Non-Consent Drilling," stating his intention to proceed with the drilling of the proposed exploratory well even though more than fifteen percent of the total working interests had elected not to participate. Section 6.4 provides in relevant part that if more than fifteen percent of the working interests initially elect not to participate in the proposed well and if the proposer of the well still desires to proceed with the well, then the parties must make a second election. That is, within ten days, each of the parties shall again elect whether or not it wishes to participate. Since Moncrief's July 11 letter invoked Section 6.4, Article 6, Supplemental UOA, each of the parties then had ten days in which to make its second election. A party's failure to make the election constituted an election not to participate, according to Section 6.4. Thus, the results of that second election would have been known by July 22, 1990.
From our examination of the record, we find no indication that Amoco as a party to the Revised UOA, but not the Supplemental UOA, affirmatively elected to participate in sharing the costs to be incurred in Moncrief's proposed exploratory well. Obviously, during the time period in question, May-July, 1990, Moncrief and Amoco were negotiating the terms of their farmout arrangement. Of course, one of the key features of a farmout arrangement is that the farmor, such as Amoco, incurs none of the costs associated with the proposed farmout well.[8] Those costs are to be borne by the farmee, such as Moncrief. By drilling the proposed farmout well, the farmee earns an interest in the farmor's tract. The farmor assigns that interest to the farmee upon the farmee's fulfillment of the terms of the farmout arrangement. Having fulfilled those terms, the farmee is deemed to have earned the interest in question.[9] At the time that the results of the second participation election would have been known, July 22, 1990, Moncrief and Amoco were still negotiating the terms of their farmout arrangement and the farmout agreement was not yet in existence.[10] We now examine more closely those farmout negotiations and the pertinent terms of the farmout agreement, both as originally proposed and as finally agreed upon.
The pertinent language of the farmout agreement as originally proposed in the document dated July 5, 1990, reads:
2. Farmee [Moncrief], on or before December 31, 1990, agrees to commence or to participate in, as to Farmor's interest, the actual drilling of a test well at a legal location in the NE¼ of Section 12, Township 38 North, Range 89 West, Natrona County, Wyoming. Said well, once commenced, shall be continuously prosecuted, with due diligence and in a workmanlike manner, to a subsurface depth of 20,000 feet or to a subsurface depth sufficient *522 to test the Cody formation, whichever is the lesser depth ("contract depth"), and shall then be completed as a producing well, a well capable of production, or plugged and abandoned within ninety (90) days from the date of commencement. Said test well shall be drilled at Farmee's sole cost, risk and expense. Except as provided in the takeover provision of Paragraph 5 hereof, the costs associated with testing, completing, equipping or plugging and abandoning said test well, as applicable, shall also be borne solely by Farmee. All contributions to the test well shall be owned solely by Farmee.
* * * * * *
6. If Farmee has drilled the test well to contract depth in accordance with the terms of this agreement and has otherwise complied with the terms hereof, Farmor agrees, upon written request within thirty (30) days of the date the test well is (check one) * * * or
(b) completed as a producing well in paying quantities or as a well capable of producing or is plugged and abandoned, to execute and deliver to Farmee an assignment of all of its right, title and interest in and to the Subject Lands, reserving unto Farmor an overriding royalty of twelve and one-half percent of eight-eights (12.5% of 8/8).
(Emphasis added).
By letter dated July 20, 1990, Moncrief advised Amoco:
Enclosed herewith is one fully executed copy of the captioned Agreement dated July 5, 1990 [the Farmout Agreement] subject to your acceptance of the following changes thereto:
* * * * * *
5) Farmee [Moncrief] agrees to use his best efforts in accordance with good oil field practice to complete the test well as a producer of oil or gas, but shall not be firmly obligated to drill the well. The only liability or penalty for failure to drill will be the forfeiture of all rights hereunder.
(Emphasis added).
Amoco accepted this change on July 26, 1990.[11] With candor, but tellingly, Moncrief admits in his brief:
The Farmout Contract, under which Moncrief has the right (but not the obligation) to earn the lease by drilling the Well, is in the nature of an option.
(Emphasis added).
Moncrief spudded in the well on the designated drilling block on August 24, 1990.[12]
By letter dated August 30, 1990, Moncrief furnished to all Supplemental UOA working interest owners a list of which parties had consented to participate in the well and also how Moncrief calculated all parties' acreage so that it could be determined whether those parties who would drill the well constituted a "majority in interest" in the Drilling Block. Moncrief's calculation was as follows:
Consenting Parties
in the Drilling
W½, SE¼ (480.00 ac.) NE¼ (160.00 ac.) Block (640.00 ac.)
WAM, Jr. 150.00 WAM, Jr. 145.45 WAM, Jr. 295.45
LL & E/Inexco 160.00 Yates 14.55 Grace 30.00
co ______
North Central 60.00 160.00 Yates 29.55
BHP 50.00 MYCO 15.00
_____
Grace 30.00 370.00
Yates 15.00
MYCO 15.00
______
480.00
*523 Thus, under Moncrief's calculation, in which Moncrief treated the working interest in the 160-acre Amoco farmout tract as belonging to himself and Yates as farmees, the consenting parties' ownership interests amounted to a "majority in interest." That is, the combined interests of the consenting parties, 370 acres, was 57.8125 percent of the 640-acre drilling block.
On September 6, 1990, Moncrief brought this action seeking a declaration that, as defined by the Supplemental UOA, the consenting parties constituted a "majority in interest" in the 640-acre drilling block.[13] On April 2, 1991, the well was drilling at a depth below 20,000 feet. Twenty-five percent of the costs of the well were allocable to the NE¼ of Section 12, and Moncrief and Yates were bearing those allocable costs. As provided in the Supplemental UOA, the consenting parties bore the costs of drilling in proportion to their shares of the drilling acreage.
On April 10, 1991, appellants filed a motion for summary judgment, asserting that no genuine issue of material fact existed and, as a matter of law, Moncrief and Yates, as farmees of the Amoco tract, were entitled to count the working interest of that tract as consenting and, therefore, the consenting parties constituted a majority in interest. In support of their motion, appellants submitted Moncrief's affidavit, attached to which were copies of many of the documents to which we have referred.
On July 5, 1991, appellees filed a cross-motion for summary judgment, asserting that, as a matter of law, appellants as consenting parties were only a minority in interest. In support of their position, appellees relied on appellants' materials and also submitted their own, including a copy of the earlier-referenced Madden-Badwater Agreement.
On September 18, 1991, the district court filed its decision letter opinion in which it concluded that "[t]he critical time for assessing the ownership interests was when Moncrief proposed the drilling of the well. * * * The Defendants had a right to consent or not based upon the circumstances as they were prior to commencement of drilling." In addition, the district court found, as a matter of law, that the Amoco farmout tract should not be counted as consenting acreage and, therefore, appellants as consenting parties were a minority in interest. Accordingly, the district court entered summary judgment in favor of appellees. This appeal followed.
DISCUSSION
1. Standard of Review.
In a contract case, such as this one, summary judgment is appropriate when no genuine issues of material fact exist, the provisions of the contract are unambiguous, and those provisions are controlling because the construction of the contract's provisions is for the court to decide as a matter of law. Allmaras v. Mudge, 820 P.2d 533, 535 (Wyo.1991). We review a summary judgment in "the same light as the trial court, using the same materials and following the same standards." Allmaras, at 535. However, as a matter of appellate practice, an appellate court "accords no special deference and is not bound by a district court's decision on a question of law." Moncrief v. Harvey, 816 P.2d 97, 102 (Wyo.1991).
We shall affirm summary judgment if it "is sustainable on any legal ground appearing in the record." Deisch v. Jay, 790 P.2d 1273, 1278 (Wyo.1990).
2. Rules of Contract Construction.
In order to evaluate the parties' positions, we must apply our established rules of contract construction. We have said:
The primary purpose in interpreting or construing a contract is to determine the *524 intent of the parties. The interpretation and construction of a contract are done by the court as a matter of law. Where an agreement is in writing and the language is clear and unambiguous, the intent of the parties is to be secured from the words of the contract. The contract as a whole should be considered, taking into consideration the relationship between the various parts.
Cliff & Co. v. Anderson, 777 P.2d 595, 598 (Wyo.1989) (citations omitted).
We have also recognized that the parties' subsequent disagreement concerning the contract's meaning does not establish an ambiguity which would require resort to extrinsic evidence. Cliff, at 599. We must avoid construing a contract so as to render one of its provisions meaningless, since each provision is presumed to have a purpose. Wyoming Game and Fish Comm'n v. Mills Co., 701 P.2d 819, 822 (Wyo.1985). If reasonably possible, we must avoid a construction of a contract leading to a conclusion that inconsistent provisions exist. Shepard v. Top Hat Land & Cattle Co., 560 P.2d 730, 732 (Wyo.1977). In giving effect to the contracting parties' intent, as expressed in the language of their written contract, this court abides by the rule that common sense and good faith are the leading characteristics of contract construction. Wangler v. Federer, 714 P.2d 1209, 1213 (Wyo.1986). The language of the parties expressed in their contract must be given effect in accordance with the meaning which that language would convey to reasonable persons at the time and place of its use. Klutznick v. Thulin, 814 P.2d 1267, 1271 (Wyo.1991).
With the foregoing rules in mind, we turn to the critical question in this contract case and the parties' respective contentions.
3. The Critical Question and the Parties' Contentions.
The critical question we must answer is at what point in time, according to the provisions of the unit operating agreements, must the determination be made whether the consenting parties constitute a majority or minority in interest for purposes of selecting which one of the two penalty provisions shall apply to the non-consenting parties.
Briefly stated, appellants contend that the majority-minority determination must be made at the commencement of the actual drilling of the exploratory well, that is, spudding in or as their counsel more colorfully phrased it during re-argument, when the drilling bit hits the dirt and the table moves right. At that precise moment in time and space, according to appellants, the consenting parties, Moncrief and Yates, as farmor Amoco's farmees, through the application of the doctrine of equitable conversion, which is more traditionally recognized in installment land sales transactions, acquired sufficient equitable interest in farmor Amoco's working interest in the 160-acre tract so as to entitle them to count that working interest as consenting for purposes of the majority-minority determination upon which the selection of penalty hinged.
In the event the court does not embrace appellants' equitable conversion theory, however, appellants advance several alternative arguments why the Amoco 160-acre tract must be counted as belonging to Moncrief and Yates for voting purposes. They contend the unit agreement itself, which covers the farmout tract in question, contemplates that parties (like Moncrief and Yates) may control acreage in the Unit by "independent contracts," of which a farmout agreement is a type. They also contend the unit operating agreements specify that working interests that are "carried interests," of which a farmor's interest under a farmout agreement is a type, will be credited to the carrying parties, of which farmees like Moncrief and Yates are a type. Yet another alternative argument made by appellants is that applicable federal regulations demonstrate the interest acquired by Moncrief and Yates from Amoco under the farmout agreement was an interest in a federal lease. Finally, they contend *525 Amoco assigned its federal lease to Moncrief in March 1991, albeit after the declaratory judgment action was filed, and such assignment merely confirmed the previously existing status of Moncrief and Yates as being entitled to count Amoco's working interest as consenting for purposes of the majority-minority determination.
Again briefly stated, appellees reject each of the foregoing contentions. In particular, appellees' answer to the critical question is that the majority-minority determination must be made, according to the unambiguous provisions of the Supplemental UOA, before the commencement of the exploratory well's drilling operations. In this regard, they point to the provisions of the election procedure set out in the Supplemental UOA and apply those provisions to the undisputed facts surrounding Moncrief's May 31 and July 11 notifications to the parties. Under appellees' approach, since the majority-minority determination must be made before drilling operations commence, the application vel non of the doctrine of equitable conversion is a non-issue. Responding to appellants' alternative arguments, appellees present arguments addressing each one.
As we shall explain, we find appellees' arguments persuasive and their positions legally correct, and, therefore, we affirm the district court's summary judgment in their favor.
4. The Equitable Conversion Theory.
The issue at the heart of this controversy is whether Moncrief and Yates can be deemed to own or control Amoco's working interest in the 160-acre farmout tract, for purposes of voting that working interest as consenting, at the critical point in time that the majority-minority determination must be made for purposes of selecting the applicable non-consent penalty provision.
Moncrief and Yates claim ownership or control of Amoco's working interest by virtue of the Amoco-Moncrief farmout agreement finalized by those two entities on July 26, 1990, or a few days later. Moncrief and Yates concede that when that farmout agreement came into existence in late July 1990, they, as farmees, had a "mere option to drill a well." They assert, however, that their "mere option to drill a well" converted at the precise moment the well was spudded in on August 24, 1990, from the "mere option" to the ownership of the equitable title of Amoco's 160-acre tract. Under this equitable conversion theory, then, during the time period from May 31, 1990, when Moncrief proposed the well to August 24, 1990, just before Moncrief spudded in the well, Moncrief and Yates did not own or control Amoco's working interest so as to be able to vote it as consenting for purposes of the crucial majority-minority determination.
Because Moncrief and Yates had no such ownership or control of Amoco's working interest until the well was spudded in on August 24, 1990, under their equitable conversion theory, in order for them to prevail in this action the majority-minority determination has to be held to occur at that same time, i.e., when the well was spudded in. If that majority-minority determination is held to have occurred before the well was spudded in, then at that earlier time Moncrief and Yates would not have had ownership or control of Amoco's working interest so as to be able to vote it as consenting.
Because the "spud in" date must be the date on which the majority-minority determination is made, for appellants to prevail, they must find language in the Supplemental UOA that supports that position. Ignoring the detailed election procedure provisions in Article 6 of the Supplemental UOA, in which the parties, including these appellants, have set forth a specific timing scheme to govern the sequential elections whether or not to participate that all working interest owners must make, appellants support their position with a slender reed, viz., the definition of the term "Consenting Party" provided in Section 1.9 of Article 1, the definitions article of the Supplemental UOA. That definition is as follows:
*526 "Drilling Party" or "Consenting Party" means the * * * Parties obligated to bear the Costs incurred in Drilling * * * a well in accordance with the agreement at the commencement of such operation.
(Emphasis added).
Leaning on this slender reed, appellants assert that a party becomes a consenting party "at the commencement of such [drilling] operation." Without citation of authority, appellants claim that "at the commencement of such [drilling] operation" is synonymous with the spudding in of the well. From this, appellants reason that in order to determine whether the consenting parties constitute a majority in interest, the critical time to calculate the ownership interests of the consenting parties is at the time of the commencement of the drilling operation, i.e., when the well is spudded in.
Appellees reject appellants' argument, and so do we for several reasons. First, by relying solely on the definition of the term "Consenting Party" and by ignoring the detailed election procedure provisions that clearly govern the majority-minority determination process, appellants disregard the basic tenets of contract construction. Appellants urge us to read only an isolated part of the Supplemental UOA. We may not. We read the whole contract and consider the contract as a whole, taking into account relationships between the component parts. True Oil Co. v. Sinclair Oil Corp., 771 P.2d 781, 790 (Wyo.1989). This requires us to consider as well the detailed election procedure provisions set forth in Article 6 of the Supplemental UOA. Were we to follow appellant's urging and ignore those detailed election procedure provisions, we would render those provisions meaningless; we must avoid such construction, since each provision is presumed to have a purpose. Wyoming Game & Fish Comm'n v. Mills Co., 701 P.2d 819, 822 (Wyo.1985). Appellants' construction of the contract, placing its reliance on its view of the meaning of the phrase "at the commencement of the drilling operation," seemingly leads to a possible conclusion that inconsistent provisions exist. If reasonably possible, we must avoid a construction of a contract leading to a conclusion that inconsistent provisions exist. Shepard v. Top Hat Land & Cattle Co., 560 P.2d 730, 732 (Wyo.1977). When the critical question to be answered is at what point in time must the determination be made whether the consenting parties or the non-consenting parties constitute a majority in interest, common sense strongly suggests that the answer more likely is found in the detailed election procedure provisions of the parties' agreement than in an isolated general definition of a single term. In giving effect to the parties' intent, as expressed in the language of their written contract, this court abides by the rule that common sense and good faith are the leading characteristics of contract construction. Wangler, 714 P.2d at 1213.
Second, appellants place too narrow of a construction on the phrase "at the commencement of such [drilling] operation," as it appears within the definition of "Consenting Parties." Without citation of authority, they assume that phrase means "when the well is spudded in." That gloss does not stand up well against the generally accepted meaning of that phrase. That phrase and subtle variations of it are found in various contexts in drilling clauses. For example, well completion clauses frequently contain a condition that thelessee must have commenced operations for the drilling of a well before the end of the primary term. RICHARD W. HEMINGWAY, LAW OF OIL AND GAS § 6.7, at 362 (3d Ed.1991). Delay rental clauses often call for the commencement of drilling operations before the next ensuing anniversary date of the primary term to suspend the necessity of paying the next delay rental. HEMINGWAY, supra, at 362 n. 292. "Such operative language has been generally interpreted to mean that operations for the drilling of a well, and not the actual spudding in or drilling of the hole, must have commenced before the end of the primary term." HEMINGWAY, supra. The cases are laden with examples of preliminary preparatory pre-spudding in activities that qualify as "the commencement of *527 drilling operations." HEMINGWAY, supra, at 363. Several Wyoming cases are aligned with this general interpretation. See LeBar v. Haynie, 552 P.2d 1107, 1109-10 (Wyo.1976); True Oil Co. v. Gibson, 392 P.2d 795, 799-801 (Wyo.1964); and Fast v. Whitney, 26 Wyo. 433, 442-43, 187 P. 192, 196-97 (1920). And see 3 EUGENE O. KUNTZ, A TREATISE ON THE LAW OF OIL AND GAS § 32.3, at 75 (1989): "[I]t is generally held that acts which are preparatory to drilling are sufficient to constitute the commencement of a well and that it is not essential that the lessee be in the process of making a hole"; and LOWE, supra note 5, at 802-03.[14]
Third, as appellees point out, the definition of the term "Non-Consenting Parties" provided in Section 1.10 of Article 1, Supplemental UOA, does not contain the phrase "at the commencement of such [drilling] operation." Thus, a non-consenting party is "a party who has had the optional right to participate in the drilling * * * of a well and who has elected not to participate therein." Since the determinations of consenting parties and non-consenting parties are made simultaneously, if those determinations are to be made when the well is spudded in, as appellants contend, it would seem the phrase "at the commencement of such [drilling] operation" would be found in both definitions. That they are not undermines appellants' contention.
Fourth, as appellees point out, the election procedure provisions of Article 6, Supplemental UOA, which appellants have avoided treating, specifically govern the timing of the majority-minority determination. Those provisions set forth clearly the sequence of events which must occur when a party proposes the drilling of an exploratory well. When the well proposer notifies the working interest owners of its intention to drill a well, it also designates the drilling block area. Upon this notification, a thirty-day period comes into existence, within which each working interest owner must elect in writing sent to all other working interest owners whether or not to participate. A party's failure to make the election is deemed a non-participating election.
Upon the expiration of this thirty-day "first election" period, if more than fifteen percent of the affected parties elect not to participate, as happened here, and if a party still wishes to drill the proposed well, as happened here, then that party shall so notify in writing the other parties, as Moncrief did here on July 11. At this point in time, a ten-day period comes into existence. Within that ten-day period the parties must again elect whether or not to participate. As before, a party's failure to make the election within that time period is deemed a non-participation election.
Upon the expiration of this ten-day "second election" period, all of the affected parties shall know at that time which of them have elected to be obligated to bear the costs of the proposed well.
From the time Moncrief sent its July 11 letter notifying the parties of its intention to proceed to drill the well, those parties had ten days within which to make their "second election" to participate or not. Thus, by July 22, the date when that ten-day period expired, all of the affected parties knew which were consenting and which were not. As appellees correctly point out, Amoco and Moncrief had not yet finalized the terms of their farmout agreement on July 22. That finalization did not come until at least four days later, on July 26, when Amoco signed off on the changes Moncrief had proposed in its July 20 letter. There can be no serious question that Amoco's *528 160-acre tract is part of the Moncrief-designated drilling block area and, therefore, must be included in any calculation of majority-minority interests. In oral argument on the rehearing, Moncrief's counsel asserted that Amoco "has to be either fish or fowl," i.e., counted either as consenting or non-consenting. We agree. It would be a curious state of affairs if the working interest owner of the very land on which the exploratory well is proposed is, somehow, excluded from the election procedure.
On July 22, 1990, when the ten-day "second election" period expired, Moncrief had no "mere option to drill a well" on the Amoco tract, let alone an equitable ownership of it. On that date, only Amoco could make the election whether or not it would participate in the costs of the proposed well. We have carefully examined the record and have not found that Amoco elected to participate. Indeed, Moncrief points out in its initial appellate brief that Amoco chose not to make its own election but, rather, chose to farmout its interest to Moncrief. Moncrief asserts, without supporting authority, that Amoco's farming out of its interest to Moncrief constituted Amoco's authorizing Moncrief to vote the farmout acreage as a consenting interest. We have carefully read the terms of the Amoco-Moncrief farmout agreement finalized on or about July 26, and have found no provision by which Amoco authorized Moncrief to make retroactively Amoco's election to participate. We are left with the fact that Amoco did not elect to participate. According to the election procedure provisions of Article 6, Supplemental UOA, as well as those of the Revised UOA,[15] a party's failure to make the election is deemed an election not to participate. Since, as Moncrief's counsel agreed at oral argument on rehearing, Amoco must be either "fish or fowl," i.e., counted as either participating or not participating, Amoco must be deemed not participating.
Since we consider the Supplemental UOA as a whole, taking into consideration the relationship between the various parts, we have noted that several of the provisions of Article 10, titled "Rights and Obligations of Consenting Party and Non-Consenting Party," shed further light on the question under consideration. Section 10.1, titled "Scope of Article," provides that the unit operator shall conduct the non-consent operation (which exists when not all parties elected to participateas here); however, if the unit operator is a non-consenting party, it may elect not to serve as operator for the operation, in which case the "Consenting Parties" shall elect one of their group to conduct the operation. This provision suggests that the groups of "Consenting Parties" and "Non-Consenting Parties" are fixed before operations are commenced. That suggestion is strongly reinforced when one considers the following provision which reads in pertinent part:
10.2 Conduct of Operation. After all notices of election whether to participate in the non-consent operation have been received, Unit Operator shall commence work on such operation with reasonable dispatch (within 90 days thereafter, or as promptly as possible where the drilling rig is on location) and complete it with due diligence. In the event such operation is not commenced within said ninety (90) day period, Unit Operator shall not have the right to Drill such well until notification and response as provided in Article 6 hereof have been again given and received.
(Emphasis added). The unambiguous language of this section confirms that the non-consent operation shall not commence until after the election notices referred to in the election procedure provisions of Article 6, which we discussed earlier, have been received. According to the section's first sentence, work on the non-consent operation shall be commenced within ninety days after all election notices whether or not to participate have been received. If work is not commenced within that time period, *529 then the election procedure provisions of Article 6 must be again invoked because, until the notification and response process of those provisions has been again complied with, no right to "Drill" exists. The word "Drill" as used in Section 10.2 means, according to Section 1.11 of Article 1, titled "DEFINITIONS," Supplemental UOA:
to perform all operations reasonably necessary and incident to the Drilling of a well to its projected total depth, including preparation of roads and drill site, testing, logging, and, if productive of Unitized Substances, completing and equipping for Production, including flow lines, treators, separators and tankage, or plugging and abandoning, if dry.
(Emphasis added.)
Thus, if work on the non-consent operation has not been commenced within the initial ninety-day period following the receiving of the election notices, then no right to engage in preparatory pre-spudding-in activities exists until the election procedure is again initiated and completed.
For all of the foregoing reasons, we hold that, according to the unambiguous language of the pertinent provisions of the Supplemental UOA, the majority-minority interest determination must be made upon the expiration of the ten-day "second election" period as provided in Section 6.4, Article 6, Supplemental UOA.
5. Alternative Arguments.
Since we have not embraced appellants' equitable conversion theory, we next consider the several alternative arguments made by appellants as to why the Amoco 160-acre tract must be counted as belonging to Moncrief and Yates for voting purposes.
A. Succinctly stated, appellants assert that the Unit Agreement dated May 1, 1967, contemplates that parties, here Moncrief and Yates of appellants' group, may control acreage by leases and independent contracts such as a farmout agreement. This argument is based on the language of Section 7 of the Unit Agreement which provides that benefits of the Unit be allocated to the working interest owners "in conformity with their underlying * * * leases, or other independent contracts." Similarly, because Section 13 of the Unit Agreement grants "any party," whether "owning or controlling" the working interest of any unitized land, the right to drill a well to test any formation, appellants conclude that the Supplemental UOA contemplates an intent to permit a party to drill on farmout acreage the same as if that party owned legal title.
Appellants fail to cite legal authority in support of this argument. We have said countless times that we shall refuse to consider an issue not supported by legal authority or cogent argument. Burg v. Ruby Drilling Co., 783 P.2d 144, 153 (Wyo. 1989). Moreover, the words "other independent contracts" and "owning or controlling" do not evince an unequivocal intention that farmout acreage, before the farmee performs the conditions precedent to his earning the farmout acreage, is intended to be counted as the farmee's acreage for voting purposes. Further, as we have determined in our treatment of the equitable conversion theory, the specific provisions of Article 6 of the Supplemental UOA governing the election procedure for non-consent operations clearly set forth the critical time periods covering the majority-minority determination. The farmout agreement in question was not even in existence at the critical time when the voting was to have occurred. Appellants' argument is without merit.
B. Next, appellants argue the Supplemental UOA provides that working interest owners may "carry" the interests of others and those "carried interests" may be credited to the "carrying party" who may then vote those interests as consenting. They claim that Moncrief and Yates are "carrying parties" of Amoco's "carried interest" by virtue of the farmout agreement.
As appellees point out, several flaws exist with this argument. Appellants have cited no legal authority to support their assertion that a farmout agreement creates a "carried interest." Although appellants *530 ask us to consider the expansive definition of "carrying party" as the party "who assumes responsibility for that share of the costs of drilling which another party has elected not to assume," HOWARD R. WILLIAMS & CHARLES J. MEYERS, MANUAL OF OIL AND GAS TERMS, at 152 (7th ed. 1991), we find it more appropriate to consider the definition of "carried interest" to which the "carrying party" definition applies. A "carried interest" is:
A fractional interest in oil and gas property, usually a lease, the holder of which has no personal obligation for operating costs, which are to be paid by the owner or owners of the remaining fraction, who reimburse themselves therefor out of production, if any. The person advancing the costs is the carrying party and the other is the carried party.
WILLIAM & MEYERS, supra, at 148.
Even more helpful is this analysis:
The [term] carried interest * * * is now accepted as a technical one in the industry.
Broadly speaking, a carried interest is created from an arrangement between two or more owners of a working interest whereby one agrees to advance development costs on behalf of the other for a period of time, retaining the right to recover fully such advances from any future production accruing to the other owner's interest. The interest of the party making the advances is referred to as the carrying interest and the interest for which advances are made is known as the carried interest.
* * * * * *
Customarily, the carried interest arrangement terminates when development and current operating costs have been recovered by the carrying party. Therefore, the carried and carrying parties jointly own the working interest and share in both costs and production.
GARY B. CONINE, Rights and Liabilities of Carried Interest and Nonconsent Parties in Oil and Gas Operations, 37 INST. ON OIL & GAS L. & TAX. 3-1, 3-10 to 3-12 (1986) (emphasis added.).
From this definition and analysis, we conclude that the farmout agreement in question did not create a carried interest of Amoco's tract. We agree with appellees that the Amoco-Moncrief farmout agreement merely memorialized Moncrief's option to drill a well (not a firm obligation) in exchange for Amoco's conveyance of its interest, except for Amoco's one-eighth overriding royalty interest, when the well was completed to contract depth and Moncrief requested the conveyance. At all material times, Amoco and Moncrief were not two owners of a working interest. Amoco was the sole working interest owner of its tract until Moncrief satisfied the conditions precedent in the farmout agreement. Moreover, the Amoco-Moncrief arrangement contained no "back-in" provision by which Amoco would have jointly owned the working interest in the future. And, finally, as we have mentioned before, the farmout agreement was not even in existence when the critical consent/non-consent vote took place as prescribed by the provisions of Article 6, Supplemental UOA. For all of these reasons, appellants' argument fails.
C. Appellants next contend that Moncrief's and Yates' interest under the Amoco farmout agreement was an interest in a federal lease. To support Moncrief's and Yates' assertion they can count the Amoco tract as committed to them for voting purposes, they point to 43 C.F.R. § 3000.0-5(1) that an "interest" in a federal lease "may be created by direct or indirect ownership, including options." They cite no legal authority, however, to support their conclusion that a farmout agreement, "the mere option to drill a well," is the kind of "option" intended by this regulation. Further, they cite no authority for the assertion that this regulation supports their claim for counting Amoco's acreage as acreage under Moncrief's and Yates' control for voting purposes. This argument, too, is without merit.
D. Amoco and Moncrief amended their farmout agreement by executing a document dated March 14, 1991, in which Amoco purported to make a present assignment to Moncrief of the record title to the subject *531 160-acre tract. We agree with appellees that this assignment is of no concern in the context of this declaratory judgment action. This action was filed to determine rights as they existed on the date the action was filed, viz., September 6, 1990. Declaratory judgment actions do not determine future rights. Wyo. Stat. § 1-37-101 through 114 (1988); White v. Bd. of Land Comm'rs, 595 P.2d 76, 79 (Wyo.1979). The parties' positions for purposes of declaring rights in this action were fixed as of September 6, 1990, and we have no jurisdiction to determine their rights based on events transpiring after that date.
Affirmed.
NOTES
[1] As noted in Moncrief v. Wyoming Bd. of Equalization, 856 P.2d 440, 442 n. 2 (Wyo.1993), for several years "this large federal oil and gas unit has not only produced significant amounts of natural resources but it also has contributed generously to this court's case load."
[2] Moncrief v. Louisiana Land & Exploration Co., 861 P.2d 500 (Wyo.1993) (withdrawn upon grant of rehearing). Appellees' rehearing pleading was titled, "Motion to Vacate Mandate of Reversal and For an Order of Affirmance or, In the Alternative, For Rehearing Including Memorandum of Authorities." By our order entered March 16, 1993, this court denied the motion to vacate mandate of reversal because the mandate had not yet issued and this court granted the application of rehearing.
[3] On July 23, 1993, appellants filed a post-argument brief; appellees moved to strike that brief; and by order entered August 10, 1993, this court granted appellees' motion.
[4] The tract's legal description is the NE¼ of Section 12, Township 38 North, Range 89 West, 6th P.M.
[5] One scholar has described a farmout in this way:
An oil and gas farmout agreement is an agreement by one who owns drilling rights to assign all or a portion of those rights to another in return for drilling and testing on the property. The individual or entity that owns the lease, called the "farmor" or "farmouter," is said to "farm out" its rights. The person or entity that receives the right to drill, referred to as the "farmee" or "farmoutee," is said to have "farmed in" to the lease or to have entered into a "farm-in agreement."
JOHN S. LOWE, Analyzing Oil and Gas Farmout Agreements, 41 SW.L.J., 759, 763 (1987); see also, EDWIN M. CAGE, Anatomy of a Farmout, 21 ANNUAL INST. ON OIL & GAS L. & TAX. 153, 154 (1970).
[6] Among the farmor's possible purposes for entering into a farmout are lease preservation, lease salvage, risk sharing, exploration and evaluation, access to market, obtaining reserves, and drilling an obligation well. Among the farmee's purposes are obtaining or expanding an acreage position or obtaining reserves; keeping busy equipment, personnel or cash; obtaining property it has highly evaluated; and risk sharing. LOWE, supra note 5, at 778-82.
[7] The negotiations consisted of the initial proposed agreement dated July 5, 1990, offered by Amoco; Moncrief's counter-offer embodied in its July 20, 1990 letter; Amoco's counter-offer embodied in its July 26, 1990 response; and Moncrief's acceptance of the Amoco response a few days later. Under basic principles of contract law, "[a]n unconditional, timely acceptance of an offer, properly communicated to the offeror, constitutes a meeting of the minds and establishes a contract." Wyoming Sawmills, Inc. v. Morris, 756 P.2d 774, 775 (Wyo.1988) (citations omitted). "To be effective an acceptance must be unconditional; it cannot be combined with any conditions which materially vary the terms of the offer. If such conditions are included, the acceptance is treated as a rejection of the original offer and acts as a counter offer vesting in the original offeror the power of acceptance." Madison v. Marlatt, 619 P.2d 708, 715 (Wyo.1980). "[N]o contract exists unless the original offeror accepts the counteroffer." Panhandle Eastern Pipe Line Co. v. Smith, 637 P.2d 1020, 1023 (Wyo.1981). Applying these principles to the Amoco-Moncrief negotiations, the farmout agreement did not come into existence until a few days after July 26, 1990, when Moncrief accepted the changes contained in Amoco's July 26, 1990 response to Moncrief's July 20, 1990 changes in Amoco's initial July 5, 1990 proposal.
[8] As stated by LOWE, supra note 5, at 797, "[allmost by definition, a farmout is an agreement by which the farmee agrees to pay the costs of the operations contemplated. Generally that undertaking is explicitly stated in the farmout."
[9] Under a "produce-to-earn" farmout agreement, "the farmee earns an interest in the property being farmed out by drilling and completing a well capable of producing in paying quantities"; under a "drill-to-earn" farmout agreement, "the farmee can earn its interest merely by drilling to a specified formation or formations and conducting agreed testing." LOWE, supra note 5, at 793.
[10] See supra note 7 and accompanying text.
[11] See supra note 7.
[12] "Spudding in" refers to "[t]he first boring of the hole in the drilling of an oil well." 8 HOWARD R. WILLIAMS AND CHARLES J. MEYERS, OIL AND GAS LAW 1182 (1991).
[13] In March of 1991, Amoco assigned record title in the lease to Moncrief.
[14] LOWE cites the classic case Vickers v. Peaker, 227 Ark. 587, 300 S.W.2d 29 (1957), in which the court construed the phrase "commence the drilling of a well" appearing in a farmout assignment. The farmee had executed a drilling contract, surveyed and cleared the location, constructed a road to the location, obtained a drilling permit, and moved material to the drill site. Holding that these activities, before the drill bit pierced the earth, constituted commencement of the drilling of the well, the court asked the rhetorical question: "Does 'baking a cake' begin with the preparation of the dough, or only with the actual placing of the dough in the oven?" Vickers, 300 S.W.2d at 32. As LOWE explains, "virtually any activity of the farmee on the land will be sufficient to commence the well properly * * *." LOWE, supra note 5, at 803.
[15] Section 9.1, Article 9, Revised UOA, states that the drilling of exploratory wells is governed by the provisions of part 1 of exhibit 4. The latter provisions, in sections 4 and 5, provide that a party's failure to advise the other parties within the prescribed time period of its election to participate or not to participate shall be deemed an election not to participate.
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427 F.2d 346
The GOVERNMENT OF the CANAL ZONE, Plaintiff-Appellee,v.Arnold Maxwell BROOKS, Defendant-Appellant.
No. 28373 Summary Calendar.
United States Court of Appeals, Fifth Circuit.
May 18, 1970.
Albert J. Joyce, Jr., Balboa, Canal Zone, John D. Goodwin, Shreveport, La., for defendant-appellant.
Rowland K. Hazard, U. S. Atty., Balboa, Canal Zone, for plaintiff-appellee.
Before JOHN R. BROWN, Chief Judge, and MORGAN and INGRAHAM, Circuit Judges.
PER CURIAM.
1
Pursuant to Rule 18 of the Rules of this Court, we have concluded on the merits that this case is of such character as not to justify oral argument and have directed the clerk to place the case on the Summary Calendar and to notify the parties in writing. See Murphy v. Houma Well Service, 5 Cir., 1969, 409 F.2d 804, Part I; and Huth v. Southern Pacific Company, 5 Cir., 1969, 417 F.2d 526, Part I.
2
Brooks was convicted of the crime of returning to a military reservation after having been ordered not to reenter the reservation by the base commander, in contravention of 18 U.S.C. § 1382.1 Brooks appeals his conviction; we affirm.
3
The Post Commander of Fort Amador, Canal Zone, observed Brooks, the son of a civilian employee on the base, smoking what he took to be a marijuana cigarette within the confines of Fort Amador, and, on another occasion, observed Brooks speeding his automobile within the reservation. The commander testified that he dispatched a letter through ordinary mail to Brooks, barring him from the reservation, but later, in order to satisfy applicable Army regulation, personally delivered a formal letter of barment to Brooks on December 28, 1968. Brooks acknowledged receipt of the letter by his signature upon delivery and this acknowledgment was witnessed by a Major Starr, who accompanied the base commander. Brooks was observed within the confines of Fort Amador on two subsequent occasions and these reentries serve as the basis of the conviction.
4
Brooks contends that the formal letter of barment failed to comply with the applicable regulation, United States Army Forces Southern Command Regulation 210-2, entitled "Installations — Expulsion of individuals from United States Army Reservations and Licensed Areas",2 in that only one witness, Major Starr, certified to the letter's delivery, instead of the requisite two witnesses, and that the letter was thereby null and void.
5
It is well established that the commanding officer of a military installation has the right to summarily exclude civilians from the installation without violating the requirements of the due process clause. Cafeteria and Restaurant Workers, etc. v. McElroy, 367 U.S. 886, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961); United States v. Brown, 5 Cir., 1969, 411 F.2d 478; Cf. Weissman v. United States, 10 Cir., 1967, 387 F.2d 271. It is equally well established that it is a denial of due process for any government agency to fail to follow its own regulations providing for procedural safeguards to persons involved in adjudicative processes before it. Vitarelli v. Seaton, 359 U.S. 535, 79 S.Ct. 968, 3 L.Ed.2d 1012 (1959); Service v. Dulles, 354 U.S. 363, 77 S.Ct. 1152, 1 L.Ed.2d 1403 (1957); United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681 (1954). Brooks was not denied due process by the Army's failure to have two witnesses attest to the delivery of the formal letter of barment as required by Regulation 210-2 since the deviation in no way deprived him of the procedural safeguard of notice or prejudiced his rights in any adjudicative proceeding. It is uncontroverted that Brooks had adequate notice of his barment from Fort Amador, notice that he acknowledged by his own signature; consequently, he has suffered no prejudice and the Army's noncompliance with its own regulation in this case can only be described as de minimis.
6
The judgment of the District Court is hereby
7
Affirmed.
Notes:
1
Section 1382 provides:
Whoever, within the jurisdiction of the United States, goes upon any military, naval, or Coast Guard reservation, post, fort, arsenal, yard, station, or installation, for any purpose prohibited by law or lawful regulation; or
Whoever reenters or is found within any such reservation, post, fort, arsenal, yard, station, or installation, after having been removed therefrom or ordered not to reenter by any officer or person in command or charge thereof —
Shall be fined not more than $500 or imprisoned not more than six months, or both.
2
Regulation 210-2 provides in pertinent part:
4
(b) 1. Installation commanders who determine that a person is to be expelled from the U. S. Army reservation which they command will prepare a letter utilizing Appendix A or B as a guide. Receipt of the letter must be acknowledged in writing by the person expelled. * * * The expulsion letter receipt will be signed by the officer delivering the letter and two witnesses. * * *
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21 B.R. 800 (1982)
In re Louis Vincent MAGNIFICO, Debtor.
The STATE OF ARIZONA, Plaintiff,
v.
Louis Vincent MAGNIFICO, Defendant.
Bankruptcy No. B-81-2395-PHX-RGM, Adv. No. 82-532 RGM.
United States Bankruptcy Court, D. Arizona.
July 12, 1982.
Cliff C. Wamacks, Deputy County Atty., Phoenix, Ariz., for plaintiff.
Patricia J. Finley, Phoenix, Ariz., for debtor/defendant.
OPINION AND ORDER OF DETERMINATION THAT CRIMINAL RESTITUTION IS NOT A DEBT UNDER THE BANKRUPTCY CODE AND THEREFORE NOT SUBJECT TO THE DISCHARGEABILITY PROVISIONS THEREOF AND FURTHER DENYING DEBTOR-DEFENDANT'S MOTION TO DISMISS
ROBERT G. MOOREMAN, Bankruptcy Judge.
The debtor in the instant proceeding filed a petition under the provisions of Chapter 7 of the Bankruptcy Code on October 9, 1981. This matter comes before the court in the posture of an adversary complaint for determination of dischargeability under the Bankruptcy Code with reference to an obligation for restitution in a state court criminal case and upon the hearing of debtor's Motion to Dismiss and the Response filed by the State of Arizona.
The legal issues before this court involve a determination of the nature and status of criminal restitution. The uncontested underlying facts are set forth hereinafter as the record herein.
*801 On April 10, 1981, the debtor, Louis Vincent Magnifico, was a patron at Kriskimkeel's restaurant and bar located at Phoenix, Arizona. While in the bar, he argued with another patron and was subsequently asked by the manager to leave the premises and on starting toward the door to leave another patron also went to the door and at that time, Mr. Magnifico turned and, producing a knife, ordered him to get back inside. Thereafter, moments later, a white 1977 Ford van, driven by Mr. Magnifico, came crashing into the bar through the front wall. The vehicle proceeded into the building and crashed into the bar pinning patron Donald Raymond between the vehicle and the bar. Then the van was backed up and driven forward within the restaurant a second time. This time it struck patron, Joseph Varelli, who had come to the aid of victim Raymond. Thereafter, the van was backed up and a third time driven forward crashing against the bar. The debtor then abandoned the van, ran out of the restaurant/bar, crossed the street and secreted himself in the ladies room of a paint store where he was later arrested. Both victims, Mr. Raymond and Mr. Varelli, suffered injuries as a result of the intentional assault upon their person and have filed proofs of claim for damages in the bankruptcy proceedings.
On April 16, 1981, the debtor was indicted by the State of Arizona in case No. CR 118972, on charges of Count I: Aggravated Assault, a class three dangerous felony; Count II: Aggravated Assault, a class three, dangerous felony; and Count III: Criminal Damage, a class four felony. Thereafter, some three and one-half months prior to these bankruptcy proceedings, Mr. Magnifico entered a plea agreement for a change of pleas to Count I, as a non-dangerous offense and stipulating, in contemplation of probation, to restitution on all counts. Subject to this agreement, the debtor was allowed by the state court to change his plea to no contest and was found guilty of the stipulated class three, nondangerous felony. The presentence report found that Mr. Varelli had incurred medical bills in excess of $8,000, Mr. Raymond had incurred medical bills in excess of $15,000 and Kriskimkeel restaurant/bar had been damaged in excess of $10,000 in repair costs. Thus the damages were estimated in excess of $33,000 without taking into consideration the loss of restaurant business and lost wages by Varelli and Raymond. The State Superior Court suspended imposition of sentence for five years and placed Mr. Magnifico on probation. Among the court approved terms and conditions of probation defendant agreed to accept was restitution to the victims of his actions in the total amount of $5,500 itemized as follows: $3,000 to Mr. Varelli, $1,000 to Mr. Raymond, and $1,500 to the restaurant. This amount was ordered by the Superior Court to be paid in regular monthly payments of only $100 commencing on September 1, 1981. After making one payment, the debtor, on October 8, 1981, filed a petition in bankruptcy listing the unliquidated obligations to Mr. Varelli, Mr. Raymond and the restaurant as debts, as well as listing the "Clerk of Superior Court" for restitution in the criminal case in the amount of $5,400.
Thereafter, on March 16, 1982, plaintiff State of Arizona filed its complaint in this court to determine the nondischargeability of an order of restitution as a condition of probation resulting from a pre-petition criminal conviction and alternately seeking a determination that such criminal restitution is not a debt and that as a probationary obligation is not contemplated or perceived to be within the scope of the Bankruptcy Code. In response, the debtor/defendant filed a Motion to Dismiss on March 29, 1982, alleging untimely filing for the reason that the plaintiff missed the last day for filing complaints to determine dischargeability of debt by one month and a day and also urged during oral argument that the obligation was subject to the stay of this court under cited case law.
The court is presented with two questions:
1. Should the State's Complaint to Determine Dischargeability be dismissed for untimely filing?
*802 2. Is criminal restitution, as one of the conditions of probation, a debt within the scope of the Bankruptcy Code and, if so, does it fall within one of the exceptions to discharge and therefore, nondischargeable?
The State of Arizona, in urging its position, argues that Perez v. Campbell, 402 U.S. 637, 91 S.Ct. 1704, 29 L.Ed.2d 233 (1971) does not apply to the instant case. It states that the decision, holding Arizona's Motor Vehicle Safety Responsibility Act invalid insofar as it conflicted with the Bankruptcy Act, 11 U.S.C. § 35, was the result of finding that the sole emphasis of the Arizona Act was to provide "leverage for the collection of damages from drivers who either admit they are at fault or are adjudged negligent." Perez, supra, at 646, 91 S.Ct. at 1710. The State further argues that attempts by Congress to interfere via the Bankruptcy Code with a state court criminal process would be invalid as a contravention of the Tenth Amendment. In support, Supreme Court decisions are cited including National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976), which addresses the various aspects of the constitutionality of the states' reserved police powers. The State also urges that an order of criminal restitution as a condition of probation is not a debt within the scope of the Bankruptcy Code and relies principally upon People v. Mosesson, 356 N.Y.S.2d 483, 78 Misc.2d 217 (1974); People v. Topping Bros., 359 N.Y.S.2d 985, 79 Misc.2d 260 (1974); People v. Washburn, 97 Cal.App.3d 621, 158 Cal.Rptr. 822 (1979); and also relied on In re Ralph Button, 8 B.R. 692 (Bkrtcy.W.D.N.Y.1981) in the State's supplemental response.
The debtor, in support of his position on the merits, argues case law urging that restitution resulting from criminal proceedings is a debt and dischargeable in bankruptcy and should be stayed by this court. Cited to the court at oral argument were the cases of Barnett v. K-Mart, et al. (In re Barnett), 15 B.R. 504 (Bkrtcy.D.Kan.1981), Whitaker v. Locker (In re Whitaker), 16 B.R. 917 (Bkrtcy.M.D.Tenn.1982); Reid v. Young (In re Reid), 9 B.R. 830 (Bkrtcy.M.D. Ala.1981); and Kaping v. State (In re Kaping), 13 B.R. 621 (Bkrtcy.D.Or.1981). This court holds that these cases do not apply to the fact situation before this court and distinguish these cases below.
The principal issue herein, the dischargeability of or effect of criminal restitution, was recently before the Bankruptcy Court in the Western District of New York, In re Ralph Button, supra. The New York court determined that criminal restitution is not a debtor/creditor relationship and stated at page 694:
Under the new Bankruptcy Code, § 101(11) says the term "debt" means liability on a claim. "Claim," pursuant to § 101(4) means right to payment. "Creditor," according to § 101(9) generally means an entity that has a claim against the debtor that arose before filing. From these definitions, it does not appear that restitution could be considered a debt nor that a victim could be considered a creditor. With restitution, the victim has no right to payment. It is the criminal court which sets the restitution amount and if it is not paid the victim cannot proceed against the debtor to enforce payment, but instead the probation officer must report the event of nonpayment to the court which in turn determines if a violation of probation has occurred.
Two cases relied on in Button, supra from New York, People v. Topping Bros., supra, and People v. Mosesson, supra, and a California case, People v. Washburn, supra, expressly held that restitution was not a debt and did not create a debtor/creditor relationship.
Legislative history also serves to guide the result as to the relationship between the debtor and the State in its criminal proceedings:
The bankruptcy laws are not a haven for criminal offenders, but are designed to give relief from financial over-extension. Thus, criminal actions and proceedings may proceed in spite of bankruptcy.
House Report No. 95-595, 95th Cong., 1st Sess. (1977); Senate Report No. 95-989, *803 95th Cong., 2nd Sess. (1978) 51-2, 5 U.S. Code Cong. & Admin.News, 5787, 5837 (1978).
A research of the law indicates that the purposes stated for probationary restitution in criminal cases vary from case to case. The court in Mosesson, supra, at 484, indicates that probationary restitution is intended as a means to insure the defendant will lead a law-abiding life thereafter. The Washburn court, supra, at 825, states that, among other purposes, it was meant to rehabilitate, make a criminal understand that he had harmed individual human beings, as well as society in the abstract, and it was not a part of a civil debtor-creditor relationship. Some courts, as urged by the debtor, under different factual situations, however, have taken apparently different views. See In re Barnett, supra, and In re Whitaker, supra, involving State "bad check" laws. In re Reid, supra, involves a Chapter 13 debtor whose plan proposed 100% payout to the very creditors who were urging the criminal proceedings to collect payment. In re Kaping, supra, the court stayed criminal nonsupport proceedings after the underlying debt for non-support proceedings had been discharged in bankruptcy pursuant to 11 U.S.C. § 523(a)(5)(A). Those courts, though each noting the reluctance of the Bankruptcy Court to interfere in any way with the enforcement of criminal law, looked to the motivation involved in the criminal charges when litigated to collect the debt. The decisions reflect that the true purpose for the restitution in each case was to make the victim whole after discharge of an underlying, pre-existing debt; therefore, the criminal proceedings involving restitution therein was properly stayed by the Bankruptcy Code under such limited circumstances explained therein.
The facts surrounding the criminal restitution in this case are part and parcel of the agreement for probation made between the defendant Magnifico and the State of Arizona. It is one of thirteen conditions for probation flowing from the debtor/defendant's conviction of a Class 3 felony. The nominal amount of total restitution under the circumstances fixed by the state court of $5,500 is not the amount of damages sustained by the claimants injured, nor is such amount due and owing directly to them. It is an obligation made directly to the State of Arizona, acting on behalf of its citizens for their benefit, and to further impress the debtor of his criminal responsibility for his criminal acts.
This court therefore finds and determines that the underlying purpose of probationary criminal restitution under the facts of the case is not one of simple debt servicing for victims but is in fact rehabilitative in nature. There is no pre-petition, pre-existing debtor-creditor relationship between the State and the convicted felon. Compare U.S. v. Carson, 669 F.2d 216 (5th Cir. 1982).
Accordingly, it is determined that the criminal restitution involved herein as a condition of probation in this case is not a debt contemplated by the Bankruptcy Code and such probationary obligation is not contemplated or perceived to be within the scope of debts dischargeable here and therefore not subject to the stay or discharge provisions of the Bankruptcy Court. Concerning the issue of untimeliness of the State's Complaint to Determine Dischargeability, filed one month and one day after the last day fixed therefor, for the purposes of this opinion, the court finds the complaint is timely filed,
AND IT IS FURTHER ORDERED denying the debtor/defendant's Motion to Dismiss, this court having concluded probationary restitution is not a debt and therefore the determination sought by the State of Arizona is therefore not subject to time restrictions of the discharge provisions of the Bankruptcy Code.
Pursuant to F.R.Civ.P. 52, as adopted by Rule 752 of the Rules of Bankruptcy Procedure, this opinion and order shall constitute findings of fact and conclusions of law herein.
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
MAR 6, 2009
No. 08-11107 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket Nos. 04-21128-CV-FAM
01-00092-CR-FAM
JOSEFINA OLACIREQUI SANCHEZ,
Petitioner-Appellant,
versus
UNITED STATES OF AMERICA,
Respondent-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(March 6, 2009)
Before BIRCH, HULL and FAY, Circuit Judges.
PER CURIAM:
Josefina Olacirequi Sanchez, whose conviction for heroin-trafficking
offenses became final in 2003, appeals through counsel the district court’s denial
of her 28 U.S.C. § 2255 motion to vacate, set aside, or correct sentence as untimely
and barred by the nonretroactivity doctrine of Teague v. Lane, 489 U.S. 288, 109
S.Ct. 1060, 103 L.Ed.2d 334 (1988). For the reasons set forth below, we affirm.
I.
Sanchez filed a pro se § 2255 motion, alleging two instances of ineffective
assistance of trial counsel. Several months later, she filed a pro se supplement to
her § 2255 motion, claiming that Blakely,1 issued in the interim, required re-
calculation of her guideline imprisonment range, as it was based on judge-found
facts. The government responded that Sanchez’s Blakely claim was time-barred
because the supplement was filed more than one year after her convictions became
final2 and barred because Blakely did not apply retroactively, pursuant to Teague.
The government also responded that any claim that Sanchez’s trial or appellate
counsel were ineffective for failing to raise a Blakely-type claim failed on the
merits because counsel could not be held responsible for failing to anticipate a
change in the law.
1
Blakely v. Washington, 542 U.S. 296, 124 S.Ct. 2531159 L.Ed.2d 403 (2004).
2
The parties do not dispute that Sanchez’s supplement was filed more than one year after
her convictions became final or that her Blakely claim did not “relate back” to the claims raised
in her initial motion.
2
A magistrate judge recommended denying Sanchez’s Blakely claim,3
reasoning that the claim was time-barred because the supplement was filed more
than one year after her convictions became final, and barred because Blakely and
its progeny did not apply retroactively on collateral review, pursuant to Varela v.
United States, 400 F.3d 864, 867 (11th Cir. 2005). The magistrate also
recommended denying any claim that Sanchez’s trial and appellate counsel were
ineffective for failing to raise a Blakely-type claim, reasoning that Blakely had yet
to be decided. Sanchez objected that her Blakely claim was timely under 28
U.S.C. § 2255(f)(4) because she filed her supplement within one year of Blakely’s
issuance, the date on which she discovered that her counsel was ineffective for
failing to argue that her sentence was unconstitutionally based on judge-found
facts. Sanchez also objected that her Blakely claim was not barred by Teague
because (1) Blakely was not a new rule of law announced after her convictions
became final but, rather, an application of the rule of law announced in Apprendi v.
New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), before her
3
The report referenced here actually was the second prepared by the magistrate.
Initially, the magistrate recommended denying the two claims raised in the initial motion, but
failed to address the Blakely-claim raised in the supplement. Over Sanchez’s objection to the
oversight, the district court adopted the magistrate’s report. On Sanchez’s motion, the district
court granted a certificate of appealability (“COA”) concerning the oversight. In an unpublished
opinion, we vacated and remanded with instructions to consider the Blakely claim. Sanchez v.
United States, 247 Fed.Appx. 194, 196-97 (11th Cir. 2007). The report referenced here was
prepared on remand.
3
convictions became final; and (2) Varela was inapposite because that defendant’s
conviction became final before Apprendi, while hers became final after Apprendi.
The district court adopted the magistrate’s report. On Sanchez’s motion, the
district court granted a COA concerning Blakely’s and Booker’s4 retroactivity and
the supplement’s timeliness.
II.
In reviewing the denial of a § 2255 motion, we review questions of law de
novo and findings of fact for clear error. Lynn v. United States, 365 F.3d 1225,
1232 (11th Cir. 2004).
A. Retroactivity
In Teague, the Supreme Court held that “new constitutional rules of criminal
procedure will not be applicable to those cases which have become final before the
new rules are announced.” 489 U.S. at 310, 109 S.Ct. at 1075. In Varela, in which
the defendant’s conviction became final before Apprendi, we applied Teague to
Blakely and Booker and held that the “constitutional rule [announced in Blakely
and Booker] falls squarely under the category of new rules of criminal procedure
that do not apply retroactively to § 2255 cases on collateral review.” 400 F.3d at
866-68. In United States v. Morris, 429 F.3d 65, 70-71 (4th Cir. 2005), in which
4
United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005).
4
the defendant’s conviction became final after Apprendi, the Fourth Circuit applied
Teague and similarly held that Booker did not apply retroactively. In so holding,
the Fourth Circuit specifically rejected an argument that Booker was not a new rule
of law but merely a clarification of Apprendi. The Fourth Circuit reasoned in part
that the Supreme Court itself viewed Booker as announcing a new rule of law, as
(1) in holding that the rule must apply to all cases on direct review, the Supreme
Court reasoned that “a new rule for the conduct of criminal prosecutions is to be
applied retroactively to all cases . . . pending on direct review or not yet final”; and
(2) the rule was not “apparent to all reasonable jurists,” since four dissenting
Supreme Court justices undertook to explain why the holding in Blakely was not
compelled by Apprendi. Id. at 70-72 (citing Booker, 543 U.S. at 268, 329-33, 125
S.Ct. at 769, 805-07).
The district court did not err in concluding that Sanchez’s Blakely claim was
barred by Teague. See Lynn, 365 F.3d at 1232. We previously have held that
Blakely and Booker are not retroactively applicable on collateral review. See
Varela, 400 F.3d at 866-68. Our holding applies equally to cases in which the
defendant’s conviction became final before Apprendi, as in Varela, and cases in
which the defendant’s convictions became final after Apprendi, as here. See also
Morris, 429 F.3d at 70-72 (holding that Booker did not apply retroactively in a
5
case in which the defendant’s conviction became final after Apprendi). Likewise,
our sister Circuit previously has rejected an argument, such as that made by
Sanchez on appeal, that Booker was not a new rule of law for Teague purposes.
See id. We agree with the Fourth Circuit. Accordingly, we affirm as to this issue.
B. Timeliness
The AEDPA imposes a one-year statute of limitations for filing a § 2255
motion. 28 U.S.C. § 2255(f). This limitations period runs from the latest of
(1) the date on which the judgment of conviction becomes final;
(2) the date on which [an unconstitutional government-imposed]
impediment to making a motion . . . is removed . . . ;
(3) the date on which the right asserted was initially recognized by the
Supreme Court, if that right has been newly recognized by the
Supreme Court and made retroactively applicable to cases on
collateral review; or
(4) the date on which the facts supporting the claim or claims
presented could have been discovered through the exercise of due
diligence.
Id.
As stated above, we have held that Blakely and Booker are not retroactively
applicable on collateral review. See Varela, 400 F.3d at 866-68. Thus, these
decisions do not trigger a later starting date under 28 U.S.C. § 2255(f)(3). We
have yet to consider, however, whether the issuance of Blakely and Booker and/or
the alleged prejudice resulting from counsel’s failure to preserve a Blakely/Booker-
6
type claim5 constitute “facts” for the purposes of § 2255(f)(4).6
The district court did not err in concluding that Sanchez’s Blakely claim was
time-barred. See Lynn, 365 F.3d at 1232. We have foreclosed reliance on
§ 2255(f)(3) for claims raising Blakely/Booker issues. See Varela, 400 F.3d at
866-68. Were a defendant allowed to skirt the principle that Blakely and Booker
are not retroactive for § 2255(f)(3) purposes and argue instead that she just
discovered, when Blakely was issued, that her counsel was ineffective for failing to
preserve a Blakely-type claim, the principle would have no teeth. See United
States v. Brown, 526 F.3d 691, 713 (11th Cir. 2008) (“[This Court] construe[s]
statutory language as to avoid absurd results”). Thus, logic mandates that
Sanchez’s theory is meritless. Accordingly, we affirm as to this issue.
AFFIRMED.
5
On appeal, the government argues that Sanchez did not raise an ineffective-assistance-
of-counsel claim in her supplement, but merely argued that her sentence was ineffective under
Blakely. We agree. However, both the government, in its response to the supplement, and
magistrate judge, in his report, treated the supplement as raising such an ineffective-assistance-
of-counsel claim. Accordingly, we will do the same.
6
On appeal, Sanchez argues that the Supreme Court held in United States v. Johnson,
544 U.S. 295, 125 S.Ct. 1571, 161 L.Ed.2d 542 (2005), that “facts” for § 2255(f)(4) purposes
may include “court rulings.” In Johnson, the Supreme Court held that a state-court vacatur of a
federal prisoner’s prior state conviction, which was used to enhance his federal sentence, is “a
matter of fact” for § 2255(f)(4) purposes and concluded that the limitation period begins to run
on the date that the prisoner receives notice of the order vacating the predicate conviction. 544
U.S. 295, 302, 304-07, 308, 125 S.Ct. at 1577-80. The Supreme Court did not address whether
court opinions also constitute matters of fact. See generally id. Thus, the “court ruling” to
which Sanchez referred was not the sort of court ruling at issue here, and Johnson is irrelevant.
7
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978 F.2d 707
U.S.v.Byrum
NO. 92-1099
United States Court of Appeals,Second Circuit.
Aug 18, 1992
1
Appeal From: D.N.Y.
2
AFFIRMED.
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205 F.Supp.2d 942 (2002)
KRAFT FOODS HOLDINGS, INC., a Delaware corporation Plaintiff,
v.
Stuart HELM a/k/a "King Velveeda," Defendant.
No. 02 C 2171.
United States District Court, N.D. Illinois, Eastern Division.
June 7, 2002.
*943 Steven P. Mandell, Stephen J. Rosenfeld, Catherine Ann Van Horn, David Seth Argentar, Mandell, Menkes & Surdyk, Chicago, IL, for Plaintiff.
Burton Joseph, Barsy, Joseph & Lichtenstein, James W. Joseph, Chicago, IL, for Defendant.
MEMORANDUM OPINION AND ORDER
KEYS, United States Magistrate Judge.
This matter comes before the Court on Plaintiff's Motion a Preliminary Injunction. For the reasons set forth below, the Court grants Plaintiff's motion.
BACKGROUND
The plaintiff, Kraft Foods Holdings, Inc. ("Kraft"), is the manufacturer and distributor of Velveeta® brand cheese products. (Oglesby Aff. ¶ 3). Kraft has owned the Velveeta® trademark since 1923. (Pl.'s Mem. Supp. Prelim. Inj., Ex. 1A).[1] Revenue from sales of Velveeta® brand cheese products have exceeded 3 billion dollars since the early 1990's, and Kraft has sold more than 1 billion pounds of the cheese products in that same period of time. (Oglesby Aff. ¶ 3). Kraft has extensively advertised, marketed and promoted its Velveeta® brand cheese products in the United States and worldwide for years through a variety of mediums, including print, radio, television and the Internet. (Oglesby Aff. ¶ 3; Tr. at 41). Some Velveeta® commercials date back to 1949. *944 (Pl.'s Suppl. Ex, Ex. 9-12). In the last decade, Kraft has spent more than 100 million dollars in advertising Velveeta® brand cheese products alone. (Oglesby Aff. ¶ 3). In any given year, almost one in four households in the United States use Velveeta® brand cheese products. (Pl.'s Suppl. Ex., Ex. 8). Kraft markets Velveeta® brand cheese products to the public, including families with children. (Oglesby Aff. ¶ 7).
The Defendant, Stuart Helm, calls himself "King VelVeeda" and operates a website at www.cheesygraphics.com and built the website and provided the content for www.courtofporn.com. (Helm Dep. at 20-21). Mr. Helm has inserted the word "VelVeeda" into his website as a metatag or metaname so that individuals looking for him on the Internet need only type "VelVeeda" into an Internet search engine to find his website. (Tr. at 125-126). The top page of the www.cheesygraphics.com website has the omnipresent banner reading "King VelVeeda's Cheesygraphics.com."[2] (Helm Dep. at 19-20). Mr. Helm testified that "King VelVeeda" is his nickname and that he has been using it for approximately 17 years to identify himself, including to sign his artwork. (Helm Dep. at 8-9; Def.'s Resp. ¶ 7). Mr. Helm uses the name "King VelVeeda" throughout the aforementioned websites to identify the particular content as belonging or referring to him. (Helm Dep. at 8, 23; Pl.'s Mem. Supp. Prelim. Inj., Ex. 2A, 2B, 2C). Mr. Helm testified that he uses his website in order for people to contact him, to give him ideas and to "hire [him] for art, sure." (Tr. at 144).
Both websites contain photographs, drawings and other material of an admittedly adult nature, which is geared toward "mature audiences." (Def.'s Suppl. Resp. at 1). Mr. Helm's website contains various photographs and illustrations of nude women and women in various stages of undress, striking sexually suggestive poses. (Pl.'s Mem. Supp. Prelim. Inj., Ex. 2B, 2E). Some illustrations also depict women and men engaging in sexual activity, including bestiality. (Pl.'s Suppl. Ex., Ex. 16, 20, 23, 25). Mr. Helm's website also contains references to, and illustrations of, drug use and paraphernalia. (Pl.'s Mem. Supp. Prelim. Inj., Ex. 2A). The websites also contain links to other web pages containing photographs of nude or semi-nude women in sexually suggestive poses. (Pl.'s Suppl. Ex., Ex. 22). Mr. Helm's website contains various references to "cheese" or "cheesiness;" for example, there are links on his website for purchasing "Cheesy Merch[andise]," for viewing photographs of nude or semi-nude women, entitled "extra cheese," or for signing the "cheesy guestbook," (Pl.'s Mem. Supp. Prelim. Inj., Ex. 2B).
Mr. Helm designs the artwork on a variety of merchandise, including tee-shirts, coffee mugs and custom artwork, which he then makes available for sale on his website. (Helm Dep. at 38). Mr. Helm also offers his design services to the public, including web, graphic and print design. (Pl.'s Mem. Supp. Prelim. Inj., Ex. 2B, 2C). The www.cheesygraphics.com homepage contains the following six links at the top of the page: "Free Comics," "Art Gallery," "Cheesy Merch[andise]," "Portfolio," "Picture of the Day Archives" and "Binky's Linky Dinks." (Pl.'s Mem. Supp. Prelim. Inj., Ex. 2A). The links "Art Gallery," "Cheesy Merch[andise]" and "Portfolio" all provide merchandise or services for sale to the public. (Helm Dep. at 64-68.) Mr. Helm testified that he has sold items from his website to individuals *945 outside of Illinois. (Helm Dep. at 88). One of the items Mr. Helm designed and sells on his website is a comic book called "VelVeeda SINGLES and Seconds." (Pl.'s Mem. Supp. Prelim. Inj., Ex. 2F).
Kraft learned of Mr. Helm's website and his use of the name "King VelVeeda," and in January 2002, an attorney for Kraft contacted Mr. Helm and asked him to cease using "VelVeeda" in his commercial activities. (Mandell Aff. ¶ 3). Mr. Helm refused, and Kraft notified Mr. Helm again and offered him a sixty day "transition" period in which he would gradually phase in a new name and then cease using "VelVeeda" altogether. (Pl.'s Mem. Supp. Prelim. Inj., Ex. 3B).
After receiving no response from Mr. Helm, Kraft filed a Complaint and Request for Permanent Injunction against Mr. Helm on March 25, 2002.[3] Kraft alleges that Mr. Helm is tarnishing the Velveeta® trademark, in violation of the Federal Trademark Dilution Act of 1995 (the "Lanham Act") and the Illinois Trademark Registration and Protection Act (the "Illinois Anti-Dilution Act").[4] (Compl. ¶ 1). Kraft filed a Motion for Preliminary Injunction against Mr. Helm, which was subsequently referred to this Court for a report and recommendation by Judge Guzman. However, both parties consented to this Court to rule on the issue of a preliminary injunction pending the decision on the merits.
DISCUSSION
A court will grant a preliminary injunction if the moving party proves that: (1) its case has some likelihood of success on the merits; (2) no adequate remedy at law exists; and (3) it will suffer irreparable harm if the injunction is not granted. Ty, Inc. v. Jones Group, Inc., 237 F.3d 891, 895 (7th Cir.2001). If the moving party demonstrates all three of these elements, then the court "must consider the irreparable harm that the nonmoving party will suffer if preliminary relief is granted, balancing such harm against the irreparable harm the moving party will suffer if relief is denied." Id. The court should then consider the public interest in granting or denying the injunction. Id. Finally, the court sits as would a court of equity and weighs all of these factors in determining whether to grant the injunction. Id.
When First Amendment rights are at stake, an injunction must be "no more burdensome to the defendant than necessary to provide complete relief to the plaintiffs." Madsen v. Women's Health Ctr., Inc., 512 U.S. 753, 765, 114 S.Ct. 2516, 129 L.Ed.2d 593 (1994) (internal quotations and citations omitted). An injunction must be "tailored as precisely as possible to the exact needs of the case." Carroll v. President and Comm'rs of Princess Anne, 393 U.S. 175, 184, 89 S.Ct. 347, 21 L.Ed.2d 325 (1968).
I. The Lanham Act[5]
A. Likelihood of Success on the Merits
At the preliminary injunction stage, the plaintiff need only demonstrate that it *946 has a "better than negligible" chance of success on the merits. Int'l Kennel Club of Chicago, Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1084 (7th Cir.1988). Therefore, the first step the Court must take is to determine Kraft's likelihood of success on the merits of its Complaint against Mr. Helm.
Section 43(c) of the Lanham Act entitles owners of famous trademarks to an injunction against third parties that are diluting the famous mark if the owner of the senior mark can prove the following: (1) the senior mark is famous; (2) the junior mark is being used in commerce and for commercial purposes; (3) the use of the junior mark began after the senior mark became famous; and (4) the junior mark causes dilution of the senior mark. 15 U.S.C. § 1125(c) (1998); see Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456, 466 (7th Cir.2000).
1. Velveeta® is a famous mark.
The Lanham Act provides the following factors which courts may use to determine whether a mark is famous:
(a) the degree of inherent or acquired distinctiveness of the mark;
(b) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
(c) the duration and extent of advertising and publicity of the mark;
(d) the geographical extent of the trading area in which the mark is used;
(e) the channels of trade for the goods or services with which the mark is used;
(f) the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought;
(g) the nature and extent of use of the same or similar marks by third parties; and
(h) whether the mark was registered under the Act of March 3, 1881 or the Act of February 20, 1905, or on the principal register.
15 U.S.C. § 1125(c) (1998).
In accordance with the Lanham Act, the "strongest protection is reserved for fanciful marks that are purely the product of imagination and have no logical association with the product." Eli Lilly, 233 F.3d at 466. A trademark that is "distinctive, arbitrary, fanciful or coined" rather than "generic or descriptive" falls under this category, because it is inherently distinctive. Mead Data Cent., Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1033 (2nd Cir.1989) (internal citations omitted); see also Platinum Home Mortgage Corp. v. Platinum Fin. Group, Inc., 149 F.3d 722, 727 (7th Cir.1998). A trademark acquires a secondary meaning and is entitled to protection when that mark specifically identifies and distinguishes one company's goods or services from those of its competitors. Platinum, 149 F.3d at 727.
Kraft first registered the name "Velveeta®" in 1923, and has spent millions of dollars advertising, marketing and promoting its product through television, radio, print and Internet advertising. Further, revenue from sales of Velveeta® brand cheese products have reached billions of dollars, and one in four households have Velveeta® products in their home at any given time. Mr. Helm conceded Velveeta®'s ubiquitousness when he was asked to recall whether he was aware of a product called Velveeta® when he first adopted his nickname "King VelVeeda;" he answered that Kraft was engaging in a "massive advertising campaign" and that he must have been aware of the name Velveeta® at that time. (Helm Dep. at 9).
Mr. Helm posits that the word "velveeta" has developed an alternate meaning in *947 the English language, and therefore, is generic and has not acquired a protectable secondary meaning. (Def.'s Suppl. Resp. at 6). Mr. Helm asserts that the word "velveeta" is used on the Internet and describes a spam-type message. (Def.'s Suppl. Resp. at 6). The Court does not find Mr. Helm's argument convincing. While some Internet users may refer to excess message postings as spam or "velveeta," this niche group does not negate the strength of Kraft's Velveeta® trademark with the general public. Velveeta®, like Polaroid®,[6] Coca-Cola®[7] and Kodak®[8] are coined words in the English language that conjure up nothing less than images of the respective products associated with each mark. Therefore, the Court finds that Velveeta® is a famous mark.
2. Mr. Helm is using the words "King VelVeeda" in commerce for commercial purposes.
The United States Supreme Court has held that courts must construe the phrase "in commerce" liberally, because the Lanham Act "confers broad jurisdictional powers upon the courts of the United States." Steele v. Bulova Watch Co., 344 U.S. 280, 283, 73 S.Ct. 252, 97 L.Ed. 319 (1952). A person's "use of the Internet satisfies the `in commerce' requirement of Section 43(c)." Intermatic, Inc. v. Toeppen, 947 F.Supp. 1227, 1239 (N.D.Ill. 1996). The "in commerce requirement would be met in a typical Internet message, be it trademark infringement or false advertising." Id. (quoting 1 GILSON, TRADEMARK PROTECTION AND PRACTICE, § 5.11(2), at 5-234 (1996)).
Mr. Helm admitted that he has sold merchandise on his website, www.cheesygraphics.com to individuals outside of Illinois and that he continues to offer his products and services for sale. Mr. Helm also testified that he signs his artwork as "King VelVeeda" and uses that name to identify himself, his artwork and various merchandise and services showcased on his website on the Internet. Given Mr. Helm's own admissions, Kraft has clearly met the requirement showing Mr. Helm's commercial use of the name "King VelVeeda" in commerce.
Mr. Helm argues that he also provides commentary and free displays of artwork on his website, and therefore, his use of the name "King VelVeeda" can hardly be categorized as "propos[ing] a commercial transaction."[9] (Def.'s Suppl. Resp. at 9). Mr. Helm understates the predominance of his activities that propose a commercial transaction. While it is true that Mr. Helm has noncommercial content on his website, three of the six links that display prominently at the top of his homepage offer his merchandise or services for sale. The Court is unconvinced that commerce does not encompass a significant portion of Mr. Helm's website. Further, given the broad scope set forth by the Supreme Court in construing the term "in commerce" in association with the Lanham Act, Mr. Helm's arguments must fail.
*948 3. Mr. Helm adopted the name "King VelVeeda" after Velveeta® became famous.
Kraft first registered its Velveeta® trademark in 1923. Mr. Helm began calling himself "King VelVeeda" in approximately 1985, when, as he testified, the name "King VelVeeda" just "popped into [his] head." (Helm Dep. at 8). Mr. Helm began using the name "King VelVeeda" on his website approximately 12 years ago. (Helm Dep. at 12).
The record establishes that Mr. Helm adopted the name "King VelVeeda" after Velveeta® became famous. Mr. Helm practically conceded this fact when he said that he was aware of Kraft's massive marketing campaign for Velveeta® during the time the name "King VelVeeda" popped into his head. Kraft had been advertising Velveeta® for more than 60 years, and started running television commercials for its cheese products back in 1949. The Court finds it unlikely that Mr. Helm came up with the nickname "King VelVeeda" independent of any knowledge of Kraft's Velveeta® brand cheese products. Whether "VelVeeda" has any connection to Velveeta® is for the trier of fact to determine. At this stage of the proceedings, Kraft has shown that it is likely that Mr. Helm's choice of the word "VelVeeda" was deliberate in order to bring to mind Velveeta®. Therefore, the Court finds that Mr. Helm adopted the name "King VelVeeda" after Velveeta® became famous.
4. The "King VelVeeda" name dilutes Velveeta®.
Section 45 of the Lanham Act defines "dilution" as "the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of competition between [the marks] or likelihood of confusion...." 15 U.S.C. § 1127(1998). The Seventh Circuit has held that "proof of a mere `likelihood of dilution' is sufficient to satisfy the `causes dilution' element...." Eli Lilly, 233 F.3d at 468.
Dilution can occur by blurring or tarnishment.[10]See id. at 466. Dilution by tarnishment occurs when "a junior marks's similarity to a famous mark causes consumers to mistakenly associate the famous mark with the defendant's inferior or offensive product." Id. Further, with tarnishment, the positive associations that the public once had for plaintiff's product have been "corroded" and have decreased the mark's value. See McCARTHY, TRADEMARKS AND UNFAIR COMPETITION § 24:95. Tarnishment is often found when the senior mark is placed in the context of sexual activity, obscenity or illegal activity. See, e.g. Eastman Kodak, 739 F.Supp. 116; Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 467 F.Supp. 366 (S.D.N.Y.), aff'd, 604 F.2d 200 (2d Cir.1979); Pillsbury Co. v. Milky Way Prods., Inc., 1981 WL 1402, 215 U.S.P.Q. (BNA) 124 (N.D.Ga.1981).
In evaluating the similarity of two trademarks, "if one word or feature of a composite trademark is the salient portion of the mark, it may be given greater weight than the surrounding elements." Ty, 237 F.3d at 898 (citing Henri's Food Prods. Co. v. Kraft, Inc., 717 F.2d 352, 356 (7th Cir.1983)). The court held that plaintiff's and defendant's mark were similar and that defendant infringed on plaintiff's mark. In Ty, the plaintiff and the defendant were both manufacturers of plush toysplaintiff's toy was called "Beanie Baby" and defendant's toy was called "Beanie Racer." See Ty, 237 F.3d at 898. However, certain parts of the hanging name tag were different, such as the shape, color and wording. Id. at 899. The *949 court found that "the term `Beanie' is salient and reduces the importance of the surrounding elements." Id. The court held that the "Beanie" mark was the common thread among all of Ty's products. Id.
In a trademark infringement and dilution by blurring case, the Seventh Circuit held that the words "Herbrozac" and "Prozac" were similar enough in spelling and pronunciation to cause a likelihood of confusion. See Eli Lilly, 233 F.3d at 462. The prefix "herb" was added to the junior mark and the "p" was replaced with a "b." Id. The defendant claimed that the spelling and the pronunciation were, therefore, dissimilar. Id. The court was not convinced and held that the marks were "strikingly similar." Id. The court held that "slight variations in spelling or arrangement of letters are often insufficient to direct the buyer's attention to the distinction between the marks." Id. (internal quotations and citations omitted).
The name "VelVeeda" is strikingly similar to the name Velveeta®. Similar to the facts in the Eli Lilly case, both "VelVeeda" and Velveeta® are pronounced the same and are spelled the same, except that the second "v" in "VelVeeda" is capitalized and Mr. Helm uses a "d" in his mark instead of a "t."
Mr. Helm argues that the marks are not similar, and that, therefore, he is not diluting Kraft's mark. (Def.'s Suppl. Resp. at 5). Mr. Helm points out that he uses the word "King" at all times with "VelVeeda," the "a" is frequently inverted, the "font, size, color, placement and word angle" are different, and he uses a "three-pronged gold crown" with a "V" inside the crown in association with his nickname. (Def.'s Suppl. Resp. at 5). The Court has examined the exhibits displaying Mr. Helm's website and takes judicial notice that the inverted "a" appears only once (Def.'s Ex. B) and that, at all other times in the exhibits, the "a" remains in a normal position.
The Court finds that the salient portion of the Velveeta® trademark is the word "Velveeta®" itselfnot the font, size, color or placement of the mark. Nor is the fact that Mr. Helm occasionally inverts the "a" in "VelVeeda" or places his crown insignia near his nickname crucial to the determination of similarity. The Court gives these surrounding elements much less weight, because it is the distinctiveness of the name itself that gives Velveeta® its protected status. As the Court noted above, the pronunciation and spelling of "VelVeeda" and Velveeta® are similar. Further, Velveeta® and "VelVeeda" is the "common thread" for both Kraft and Mr. Helm's respective marks. Therefore, the Court concludes that the marks are sufficiently similar.
Finally, the Court must determine whether "VelVeeda" tarnishes the brand name Velveeta®, in order to satisfy the second element of a dilution by tarnishment claim. This case is similar to the facts of the cases where tarnishment has been found in the context of sexual activity and illegal activity.[11] The content of Mr. Helm's website and the www.courtofporn.com website is of an admittedly adult nature. It depicts graphic sexuality and nudity, as well as illustrations of drug use and drug paraphernalia. These images conflict with the image that Kraft has successfully cultivated for more than 79 years as a wholesome, family-oriented product. The two similar marks would cause consumers to associate Velveeta® with Mr. Helm's arguably offensive product, thereby tarnishing the Velveeta® *950 mark. Further, Mr. Helm's use of "VelVeeda" corrodes Kraft's mark, because the association of Velveeta® with "VelVeeda" likely causes the former to lose the reputation and goodwill that it once had. Thus, the Court finds that, given the graphic, sexually explicit nature of the website and the illustrations of illegal drug use, the "VelVeeda" mark likely tarnishes Velveeta®.
Kraft has satisfied the first element of a preliminary injunction claimlikelihood of success on the merits. Kraft has provided ample evidence which shows that it has more than a negligible chance of proving its dilution claims against Mr. Helm under the Lanham Act. The Court now turns to the remaining elements for the granting of a preliminary injunction.
B. Kraft Has No Adequate Remedy At Law
Dilution of a trademark is "remarkably difficult to convert into damages." Hyatt Corp. v. Hyatt Legal Srvcs., 736 F.2d 1153, 1158 (7th Cir.1984). Damages caused by dilution are insidious, because courts find it "impossible to ascertain the precise economic consequences of intangible harms, such as damage to reputation and loss of goodwill, caused by such violations." Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 16 (7th Cir.1992); see also Ty, 237 F.3d at 902.
Kraft has demonstrated that it has more than a negligible chance of success on the merits. Therefore, Kraft's loss of goodwill or reputation caused by Mr. Helm's commercial use of the word "VelVeeda" is immeasurable.
C. Kraft Will Suffer Irreparable Harm If A Preliminary Injunction Is Not Granted.
Preliminary injunctions are granted in cases of dilution, because "dilution is an infection which, if allowed to spread, will inevitably destroy the advertising value of the mark." Polaroid Corp. v. Polaraid Inc., 319 F.2d 830, 836 (7th Cir.1963); see, e.g., Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Celozzi-Ettelson Chevrolet, Inc., 855 F.2d 480, 484 (7th Cir. 1988); Hyatt, 736 F.2d at 1158. The standard in the Seventh Circuit is to presume irreparable harm in cases of dilution. See Eli Lilly, 233 F.3d at 469.
Kraft has satisfied the final element for the issuance of a preliminary injunction by showing that it will suffer irreparable harm if an injunction is not granted. The Court must now consider the harm that Mr. Helm will suffer if the preliminary injunction is granted, and then balance that harm against the irreparable harm that Kraft will suffer if such relief is denied.
D. Balancing The Harms Favors Kraft.
The balancing of harms analysis incorporates a "sliding scale approach;" the more likely the plaintiff will succeed on the merits, the less the balance of harms need favor the plaintiff. Ty, 237 F.3d at 895. In Ty, the court held that the district court did not abuse its discretion when it held that the balance of harms favored the plaintiff in a trademark infringement case. Id. at 904. The defendant "conceded that it had full knowledge of plaintiff's trademark prior to adopting its mark." Id. In its analysis of the balance of harms, the district court excluded the burden defendant "voluntarily assumed by proceeding in the face of a known risk." Id.
The Ty court concurred with the district court's finding that defendant could not now claim that he would suffer economic harm after knowingly adopting an already registered and famous trademark. Id. at 903. The district court found no evidence that an injunction against defendant would *951 "put [defendant] out of business." Id. The court found that the irreparable harm suffered by plaintiff, and that it would continue to suffer if the injunction was not granted, outweighed defendant's harm. Id. The court reasoned that "plaintiff could lose control of its reputation and goodwill ... and would risk losing years of nurturing its business." Id.
The Court finds that the Seventh Circuit's observation that a party "entering a field already occupied by another has a duty to select a trademark that will avoid confusion" also applies to dilution claims, given the fact that dilution and trademark confusion (where likelihood of confusion is an element) are two different types of dilution. See Ideal Indus., Inc. v. Gardner Bender, Inc., 612 F.2d 1018, 1025 (7th Cir.1979).
Although Ty was a trademark infringement case, the facts supporting the Ty court's balance of harms analysis is similar to the facts in the case before this Court. Again, Mr. Helm admitted that he had knowledge of the Velveeta® mark at the time that he adopted his nickname, "King VelVeeda." The Court finds it extremely unlikely that Mr. Helm chose the name "VelVeeda" without any thought to Kraft's Velveeta®, as Mr. Helm contends. Especially convincing to the Court is Mr. Helm's use of the word "cheese," and derivatives thereof, appearing on his website, given that Kraft markets Velveeta® as a cheese product.
Also damning to Mr. Helm's case is the title for a comic book designed by Mr. Helm called "VelVeeda SINGLES and Seconds," which is remarkably similar to two Kraft products, Kraft Singles® and Velveeta Slices®. Mr. Helm had knowledge of Velveeta®'s existence, and, therefore, he had a duty to select another name for himself, but chose to use "VelVeeda." Mr. Helm chose this name at his own peril, including the risk of an action for dilution being brought against him.
Further, Mr. Helm testified that he would suffer no economic harm if he were enjoined from using the name "VelVeeda." He changed the heading on the top of his navigation page, which now substitutes the letters "er" for the final letter "a" in VelVeeda. He testified that the name VelVeeda has "no effect" on his website, and that people would still be able to access his website and purchase his goods and services, even if he ceased calling himself "VelVeeda." (Tr. at 108-109). Mr. Helm also testified that the name "VelVeeda" plays no role in the sales of his goods and services, and that the artwork, and not his name, sells itself. (Trans.124-125). Finally, Mr. Helm testified that it would be financially burdensome to alter his website and to recall all the artwork he has sold in order to remove his name from the items. (Tr. at 122).
The Court finds that Mr. Helm, by his own admission, has not proven that he will suffer irreparable harm if the injunction is granted. He will still be able to sell his art, post his art on his website and do everything he has done before. Certainly, the balance of harms shifts in favor of Kraft in this case. The Court is sympathetic to the fact that it would cost Mr. Helm approximately two weeks worth of his income, which he estimates to be approximately $250 per week, to remove all references to "VelVeeda" from his website. (Tr. at 122). However, given the evidence showing little, if any, harm to Mr. Helm and the fact that he had prior knowledge of the Velveeta® name and Kraft products, including Kraft Singles® and Velveeta Slices®, Mr. Helm assumed the risk of an injunction being entered against him. *952 Therefore, the Court finds that the balance of harms favors Kraft.
E. The Public Will Not Suffer Harm If The Court Grants Kraft A Preliminary Injunction.
The Eli Lilly court held that "the public interest is served by [granting] a preliminary injunction because enforcement of the trademark laws prevents consumer confusion." 233 F.3d at 469. The Seventh Circuit's reasoning extends to the other branch of the Actdilution. The facts that this Court used in its balance of harms analysis are similar for the facts used in the analysis of the public's interest.
After Mr. Helm is enjoined from using the name "VelVeeda," his fans, as well as the general public, will still be able to visit his website, view and purchase his artwork and otherwise engage in other commercial activities with him. The only change is that the public will no longer see any references to "VelVeeda" on his website or on his artwork. Also, individuals seeking to purchase Mr. Helm's artwork or to hire him for services will no longer be able to find him on the Internet by typing "VelVeeda" into an Internet search engine. However, given Mr. Helm's testimony, his nickname is not important in order do any of the above.
Kraft has shown that it is entitled to a preliminary injunction. However, Mr. Helm raises two affirmative defenses:[12] First Amendment protection and laches, which the Court will now address.
II. First Amendment Freedom of Speech Protection
Mr. Helm denies diluting the Velveeta® brand. However, he claims that even if he is found to be diluting Kraft's mark, the protections afforded to individuals under the First Amendment protect him from a preliminary injunction. First, Mr. Helm asserts that "VelVeeda" is a parody of Velveeta®, and, therefore, is protected under the First Amendment. (Def.'s Suppl. Resp. at 10). Next, Mr. Helm asserts that his use of the "VelVeeda" name on the Internet and in connection with his writing and design work are "inextricably intertwined" with his commercial use of the name "Velveeda," and, therefore, should give him heightened free speech protection. (Def.'s Suppl. Resp. at 8-9).
In his filings, Mr. Helm claims that his use of the name "King VelVeeda" is a parody and is entitled to heightened protection. The Seventh Circuit has defined parody as "a humorous or satirical imitation of a work of art that `creates a new art work that makes ridiculous the style and expression of the original.'" Eli Lilly, 233 F.3d at 463 (citing Rogers. v. Koons, 960 F.2d 301, 309-10 (2nd Cir.1992)). In his Supplemental Response, Mr. Helm's claim that his use of "VelVeeda" is a parody of Kraft (Def.'s Suppl. Resp. at 10-11) contradicts his statements in both his deposition and in his in-court testimony that his use of "VelVeeda" is not meant to be an opinion, commentary or parody of Kraft or *953 Velveeta®. (Helm Dep. at 99-101; Tr. at 144-145).
Both parties cite a variety of cases to support their respective claims concerning the parody issue. See Dr. Seuss Enters. L.P. v. Penguin Books, 109 F.3d 1394, 1403 (9th Cir.1997) (a parodist's poem about the O.J. Simpson murder trial, entitled The Cat NOT in the Hat! A Parody by Dr. Juice, was an infringement of The Cat in the Hat, by Dr. Seuss.); Eveready Battery Co. v. Adolph Coors Co., 765 F.Supp. 440, (N.D.Ill.1991); Hormel Foods Corp. v. Jim Henson Prods., 73 F.3d 497 (2nd Cir.1996) (puppet character named "Spa`am" is a harmless parody and does not infringe on the Spam lunch meat); Jordache Enters. v. Hogg Wyld, Ltd., 625 F.Supp. 48 (D.N.M.1985), aff'd 828 F.2d 1482 (10th Cir.1987) (court found no dilution of Jordache mark by maker of Lardashe jeans); Nike, Inc. v. "Just Did It" Enters., 6 F.3d 1225 (7th Cir.1993) (court of appeals held that lower court abused its discretion in granting summary judgment finding infringement, because trier of fact could find that parody existed and was not infringing); Dallas Cowboys Cheerleaders, 604 F.2d 200 (plaintiff's cheerleading outfits were trademarks that defendant diluted by its use of plaintiff's mark in pornographic film); Original Appalachian Artworks, Inc. v. Topps Chewing Gum, 642 F.Supp. 1031 (N.D.Ga.1986) (defendant's unsavory and noxious "Garbage Pail Kids" products infringed mark of "Cabbage Patch Kids"); Coca-Cola v. Gemini Rising, Inc., 346 F.Supp. 1183 (E.D.N.Y.1972) ("Enjoy Cocaine" logo similar to Coca-Cola's mark diluted plaintiff's "wholesome" product and would injure plaintiff's business reputation); General Electric Co. v. Alumpa Coal Co., 205 U.S.P.Q. (BNA) 1036 (D.Mass.1979) ("Genital Electric" monogram on underpants and T-shirts injured plaintiff's trademark.)
The cases cited by Mr. Helm to support his contention that parodies of famous marks should not be enjoined are distinguishable. The junior marks in Hormel, Jordache and Everready, did not involve explicit sexual or illegal activities. The respective courts found the parodies in each case to be harmless, obvious jokes, parodying the original product. Further, the Nike[13] case, decided in this Circuit, involved trademark infringement, and, therefore, the court used a likelihood of confusion analysis, which is inappropriate for dilution cases. Also, the Nike defendant's use of "Just Did It" hardly comes under the same category as "Enjoy Cocaine" or "Genital Electric," and therefore, is distinguishable from the facts in the case before this Court.
Mr. Helm's website contains items of a sexually explicit nature and illustrations of illegal drug paraphernalia and drug use. Finally, and perhaps most fatal to Mr. Helm's claim that he is parodying Velveeta® and should be protected, are his admissions to the contrary. He stated twice that he never parodied Kraft or Velveeta® and that his use of the name "VelVeeda" is not a parody of the Kraft cheese products. Thus, the Court concludes that "VelVeeda" is not a parody of Velveeta,® and this portion of Mr. Helm's First Amendment defense fails.
Next, Mr. Helm argues that his use of the word "VelVeeda" for commercial purposes is "inextricably intertwined" with his use of "VelVeeda" in non-commercial *954 speech, and therefore, an injunction would be erroneous. He cites the United States Supreme Court's decision in Riley v. National Fed'n of the Blind of North Carolina, Inc., 487 U.S. 781, 108 S.Ct. 2667, 101 L.Ed.2d 669 (1988) to support his position. (Def.'s Suppl. Resp. at 8-9).
The United States Supreme Court has held that traditional political or social speech receives greater protection than commercial speech. See, e.g., San Francisco Arts & Athletics, Inc. v. U.S. Olympic Committee, 483 U.S. 522, 107 S.Ct. 2971, 97 L.Ed.2d 427 (1987). Trademark rights need not "yield to the exercise of First Amendment rights under circumstances where adequate alternative avenues of communication exist." Dallas Cowboys Cheerleaders, 604 F.2d at 206 (quoting Lloyd Corp. v. Tanner, 407 U.S. 551, 567, 92 S.Ct. 2219, 33 L.Ed.2d 131 (1972)). Further, a First Amendment defense fails "where the trademark functions to connote the source of the product or message, rather than being used in a communicative message." Brach Van Houten Holding, Inc. v. Save Brach's Coalition for Chicago, 856 F.Supp. 472, 476 (N.D.Ill. 1994).
In Riley, the Supreme Court held that, where "the component parts of a single speech are inextricably intertwined ..." courts must apply the test for fully protected speech. Riley, 487 U.S. at 796, 108 S.Ct. 2667. Riley involved a state law concerning solicitation of funds for charitable purposes. Id. at 784, 108 S.Ct. 2667. The Court had previously ruled that "charitable solicitations involve a variety of speech interests," and, therefore, invoke some First Amendment protections. Id. at 788, 108 S.Ct. 2667 (internal quotations and citations omitted).
The Riley Court found that the state law at issue regulated both fully protected speech and commercial speech. Id. at 788-89, 108 S.Ct. 2667. The Supreme Court held that "[r]egulation of a solicitation `must be undertaken with due regard for the reality that solicitation is characteristically intertwined with informative and perhaps persuasive speech ... and for the reality that without solicitation the flow of such information and advocacy would likely cease.'" Id. at 796, 108 S.Ct. 2667 (quoting Schaumburg v. Citizens for a Better Environ., 444 U.S. 620, 632, 100 S.Ct. 826, 63 L.Ed.2d 73 (1980)). The Supreme Court held that commercial speech does not "retain[s] its commercial character when it is inextricably intertwined with otherwise fully protected speech," and therefore, the Supreme Court applied its heightened free speech standard to the law relating to the solicitation of funds for charitable purposes. Riley, 487 U.S. at 796, 108 S.Ct. 2667.
However, the Supreme Court distinguished its holding in Riley in its later decision in Board of Trustees of the State Univ. of New York v. Fox, 492 U.S. 469, 109 S.Ct. 3028, 106 L.Ed.2d 388 (1989). In Fox, the college prohibited commercial enterprises from taking place on campus, including so-called "tupperware parties" in dormitories. Id. at 471-72, 109 S.Ct. 3028. The students holding these parties alleged that the parties not only served a commercial purpose but "also touch on other subjects, however, such as how to be financially responsible and how to run an efficient home." Id. at 473-74, 109 S.Ct. 3028. The Supreme Court held that the protected speech was not inextricably intertwined with the commercial purpose of selling housewares, because:
no law of man or of nature makes it impossible to sell housewares without teaching home economics, or to teach home economics without selling housewares. Nothing in the resolution prevents the speaker from conveying, or the audience from hearing, these noncommercial messages, and nothing in the *955 nature of things requires them to be combined with commercial messages.
Id. at 474, 109 S.Ct. 3028. Justice Scalia, writing for the majority, distinguished the facts in Riley from the facts in Fox, because the regulation in Riley required the commercial speech to be included with the fully protected speech, and was, therefore, inextricably intertwined. See Fox, 492 U.S. at 474, 109 S.Ct. 3028. However, in Fox, Justice Scalia determined that the resolution did not prevent the students from exercising their freedom of expressionthey were only prohibited from engaging in commercial activities in their dormitories. Id. The Supreme Court held that the non-commercial aspects of the "tupperware" presentations were not inextricably intertwined with the prohibited, commercial aspects, and therefore, did not deserve the Supreme Court's heightened scrutiny. Id. at 474-75, 109 S.Ct. 3028.
Mr. Helm uses the name "King VelVeeda" as a nickname and to identify his artwork and services as belonging to him. Mr. Helm admits that he does not need the name "King VelVeeda" to write political or social commentary, because "VelVeeda" is the source and not the object of his commentary. (Tr. at 168). Further, Mr. Helm concedes that his website is not about free speech, and he has never used the name "VelVeeda" in any parody or commentary. (Tr. at 120, 127). Mr. Helm did not reveal any examples of his commentarypolitical or social, that he allegedly posts on his website, save for the drawing of a giant noodle, which he has posted on his website since the filing of the instant lawsuit.
Similar to the facts in Fox, and, therefore, unlike the facts in Riley, the portion of Mr. Helm's website that is non-commercial is not inextricably intertwined with the commercial portions of the website. As noted above, Mr. Helm's website serves the purpose of selling his artwork and his services. However, Mr. Helm's website also provides free art for viewing and contains other non-commercial entertainment. As noted above, Mr. Helm admitted that his use of the name "VelVeeda" is unnecessary to sell or display his art or to post commentary. The Court concludes that "no law of man or of nature makes it impossible" for Mr. Helm to exercise his free speech rights after the Court issues a preliminary injunction against him.
An injunction ordering Mr. Helm to discontinue using the word "VelVeeda" in his commercial endeavors would not prevent him from displaying art, writing commentary or engaging in other protected free speech activities. Thus, Mr. Helm's use of the name "King VelVeeda" to sell his wares in a commercial endeavor is not inextricably intertwined with his fully protected free speech rights, and therefore, is not entitled to the heightened scrutiny that Mr. Helm requests.
III. Kraft is not barred by laches in bringing this suit.
In order to succeed with a laches affirmative defense, the defendant must show that the plaintiff did not move with "reasonable promptness" to enjoin defendant's use of the trademark and that the delay harms defendant. See Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 222 (2d Cir.1999). However, "[l]aches will not bar injunctive relief where a defendant adopted the trade name with knowledge of a plaintiff's rights [in the trade name]...." Ameritech, Inc. v. American Info. Techs. Corp., 811 F.2d 960, 963 (6th Cir.1987).
Mr. Helm raises an interesting point when he asserts that he has been using the name "King VelVeeda" for 17 years and only now is being asked by Kraft to cease. (Def.'s Suppl. Resp. at 3). However, the law on the application of laches is clear. Mr. Helm has not submitted any evidence *956 showing that Kraft had knowledge of Mr. Helm's use of the name "VelVeeda." Mr. Helm speculates that Kraft employs a "small army of employees whose sole job it is to detect possible trademark infringement." (Def.'s Suppl. Resp. at 11). However, Mr. Helm cites nothing in the record to prove his claim, nor does the Court find that such evidence of an "army" would be dispositive in finding laches. Thus, Mr. Helm's affirmative defense of laches fails.
CONCLUSION
Kraft has shown that (1) it has a likelihood of success on the merits of its dilution case against Mr. Helm, (2) no adequate remedy at law exists, and (3) Kraft will suffer irreparable harm if the preliminary injunction is not granted. Kraft also established that Mr. Helm's use of the name "VelVeeda" in his commercial endeavors is likely to dilute by tarnishment the Velveeta® trademark, in violation of the Lanham Act and the Illinois Anti-Dilution Act. After balancing the harms between Mr. Helm and Kraft, and assessing the harm that would incur to the public if the injunction is not granted, the Court concludes that a preliminary injunction is proper.
IT IS THEREFORE ORDERED that Mr. Helm, his agents, servants, employees, attorneys, successors and all those in active concert or participation with him, are hereby enjoined, pending a final decision in this matter, from using all references to "VelVeeda," (regardless of the capitalization of the letters), in any commercial manner or activity, including on Mr. Helm's websites and any other websites on which Mr. Helm is authorized to post or create web pages. Mr. Helm shall also remove all references to "VelVeeda," and variations thereof, from any metatags, metanames or any other keywords on his websites, effective immediately. The Court orders Mr. Helm to appear before the Court at 9:00 AM on June 21, 2002, to confirm that he is complying with this Order.
In the event that Mr. Helm is found to have been wrongfully enjoined, Mr. Helm is entitled to security for the payment of any costs or damages suffered by him. Mr. Helm's testimony as to the relatively small amount of money he earns from his sales and services, as well as the modest costs needed to comply with this injunction, lead this Court to hereby order Kraft to post a bond, made payable to the Clerk of the Court, in the amount of $10,000.00 no later than June 21, 2002.
NOTES
[1] Kraft owns several registered trademarks of the "Velveeta" name. The first trademark application was filed with the United States Patent and Trademark Office in 1923, and the latest was filed in 1996. (Pl.'s Mem. Supp. Prelim. Inj., Ex. 1, A).
[2] The banner at the top of Mr. Helm's website currently reads "King VelVeeder's Cheesygraphics.com." (Helm Dep. at 107).
[3] Judge Guzman is presiding over the merits of the underlying case and the issue of a permanent injunction and damages.
[4] The Court has subject matter jurisdiction over Kraft's federal law claim based on 15 U.S.C. § 1052 and 28 U.S.C. § 1331 and 1338(a). Further, the Court has supplemental jurisdiction over Kraft's state law claim pursuant to 28 U.S.C. § 1367(a) and 28 U.S.C. § 1338(b).
[5] The elements in finding dilution under the Illinois Anti-Dilution Act are almost identical to the elements required in the Lanham Act. Therefore, the Court will incorporate the Illinois Anti-Dilution Act in its analysis of the Lanham Act.
[6] See Polaroid Corp. v. Polaraid, Inc., 319 F.2d 830 (7th Cir.1963).
[7] See Coca-Cola v. Gemini Rising, Inc., 346 F.Supp. 1183 (E.D.N.Y.1972).
[8] See Eastman Kodak Co. v. Rakow, 739 F.Supp. 116 (W.D.N.Y.1989).
[9] Additionally, Mr. Helm contends that his commercial use of the name "VelVeeda" is "inextricably intertwined" with his constitutionally protected right of free speech, and therefore, should be given greater protection. (Def.'s Suppl. Resp. at 8-9). The Court will address later in this Opinion, Mr. Helm's First Amendment argument, including his contention that the name "King VelVeeda" is a parody and deserves heightened protection.
[10] Kraft's allegations against Mr. Helm constitute a dilution by tarnishment claim. Therefore, the Court will not discuss the issue of dilution by blurring.
[11] The Court is not making any determinations as to whether the content of Mr. Helm's website is obscene or not. That issue is not currently before the Court.
[12] In Mr. Helm's Supplemental Response, he asserts that this case should be stayed until the United States Supreme Court renders its decision in V Secret Catalogue, Inc. v. Moseley, 259 F.3d 464 (6th Cir.2001), cert. granted, Moseley v. V. Secret Catalogue, Inc., ___ U.S. ___, 122 S.Ct. 1536, 152 L.Ed.2d 463 (2002). The Seventh Circuit provided a thorough analysis of the two prevailing views dividing the circuits in dilution cases and chose to follow the Second Circuit. Therefore, in the Seventh Circuit, a "mere likelihood" of confusion, not actual confusion, is necessary to satisfy the "causes dilution" element. The Eli Lilly decision is the law in this circuit, and this Court will not and cannot speculate as to how the Supreme Court will rule on the V Secret case or whether the High Court will overrule Eli Lilly.
[13] Mr. Helm mischaracterizes the finding of the Nike court. In that case, the Seventh Circuit held that the lower court erred in granting the plaintiff summary judgment. Nike, 6 F.3d at 1233. The court found that an issue of fact existed as to whether the junior mark was a valid parody of the senior mark, and that, therefore, summary judgment was inappropriate at that time. Id. at 1232.
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556 F.3d 344 (2009)
In Re: Larry Ray SWEARINGEN, Movant.
No. 09-20024.
United States Court of Appeals, Fifth Circuit.
January 26, 2009.
Philip Harlan Hilder, James Gregory Rytting, Hilder & Associates, Houston, TX, for Larry Ray Swearingen, Movant.
*345 Before JONES, Chief Judge, and WIENER and DeMOSS, Circuit Judges.
PER CURIAM:
Texas inmate Larry Ray Swearingen ("Swearingen"), sentenced to death for the capital murder of Melissa Trotter, seeks a stay of his execution scheduled for January 27, 2009, and authorization to file a successive petition for writ of habeas corpus in the United States District Court for the Southern District of Texas. For the following reasons, we GRANT IN PART AND DENY IN PART the motion and STAY the execution.
I. Factual & Procedural Background
Swearingen was convicted of capital murder by a jury in Montgomery County, Texas and sentenced to death on July 11, 2000. The jury found that on December 8, 1998, he murdered nineteen-year-old Melissa Trotter by ligature strangulation during the commission or attempted commission of either (1) a kidnaping or (2) an aggravated sexual assault. On direct appeal, the Texas Court of Criminal Appeals (TCCA) affirmed his conviction and sentence on March 26, 2003. Swearingen v. State, 101 S.W.3d 89 (Tex.Crim.App.2003).
On March 11, 2002, while his direct appeal was still pending, Swearingen filed his first state habeas petition, which raised ten claims. The TCCA adopted the state trial court's factual findings and legal conclusions and denied relief. Ex Parte Swearingen, No. WR-53,613-01 (Tex.Crim.App. May 21, 2003) (online citation unavailable).
On May 21, 2004, Swearingen filed his first federal habeas petition in the United States District Court for the Southern District of Texas. The district court granted the State's summary judgment motion and dismissed the case with prejudice, but it issued a certificate of appealability on Swearingen's sufficiency of the evidence claim under Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979).[1] In his first federal habeas petition, Swearingen did not challenge the sufficiency of the evidence that he murdered Trotter; he only challenged the sufficiency of the evidence that he murdered her during the commission or attempted commission of either a kidnaping or an aggravated sexual assault. This position was consistent with his trial strategy. On July 31, 2006, we affirmed the district court's denial of the Jackson claim. Swearingen v. Quarterman, 192 Fed.Appx. 300 (5th Cir.2006) (per curiam) (unpublished), cert. denied 549 U.S. 1216, 127 S.Ct. 1269, 167 L.Ed.2d 93 (2007).[2]
*346 On January 22, 2007, Swearingen filed his first successive state habeas petition. After evaluating whether the claims complied with Article 11.071, Section 5 of the Texas Code of Criminal Procedure, the TCCA remanded six claims to the state trial court. Ex Parte Swearingen, No. WR-53,613-04 (Tex.Crim.App. Jan. 23, 2007) (online citation unavailable). The TCCA later adopted the state trial court's factual findings and legal conclusions regarding those six claims and denied relief. Ex Parte Swearingen, No. WR-53,613-04, 2008 WL 152720 (Tex.Crim.App. Jan. 16, 2008).
On January 16, 2008, Swearingen filed his second successive state habeas petition. After evaluating whether the claims complied with Article 11.071, Section 5 of the Texas Code of Criminal Procedure, the TCCA dismissed four claims as an abuse of the writ and remanded two claims to the state trial court. Ex Parte Swearingen, No. WR-53,613-05, 2008 WL 650306 (Tex. Crim.App. March 5, 2008). The TCCA later adopted the state trial court's factual findings and legal conclusions regarding those two claims and denied relief. Ex Parte Swearingen, No. WR-53,613-05, 2008 WL 5245348 (Tex.Crim.App. Dec. 17, 2008), pet. for cert. filed (U.S. Jan. 14, 2009) (No. 08-8202). On January 14, 2009, Swearingen filed a petition for writ of certiorari regarding the TCCA's denial of the second successive state habeas petition, and he sought a stay of execution.
On January 20, 2009, Swearingen filed his motion for leave to file a second federal habeas petition with this court. He asserts the following claims:[3]
(1) In violation of Herrera v. Collins, 506 U.S. 390, 113 S.Ct. 853, 122 L.Ed.2d 203 (1993), the State seeks to execute Swearingen when he is actually innocent of capital murder based on newly discovered evidence.
(2) In violation of Herrera v. Collins, 506 U.S. 390, 113 S.Ct. 853, 122 L.Ed.2d 203 (1993), the State seeks to execute Swearingen when he is actually innocent of kidnaping and aggravated sexual assault based on newly discovered evidence.
(3) In violation of Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984), Swearingen's trial counsel failed to effectively cross-examine Dr. Joye Carter and failed to develop histological,[4] pathological, and entomological evidence regarding when Trotter's body was left in the forest.
*347 (4) In violation of Giglio v. United States, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104 (1972), the State sponsored false and misleading forensic testimony regarding when Trotter's body was left in the forest.
(5) In violation of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), the State withheld material, exculpatory entomological evidence collected at the crime scene.
(6) In violation of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), the State withheld material, exculpatory evidence that another man, not Swearingen, had made serious, credible threats on Trotter's life near the time of her disappearance.
(7) In violation of the Sixth and Fourteenth Amendments, Swearingen was convicted of capital murder under instructions that did not require the jury to agree on one of four alternative theories: attempted aggravated sexual assault, aggravated sexual assault, attempted kidnaping, or kidnaping.
II. Analysis
We do not address the merits of Swearingen's claims and only consider whether to excuse his procedural default of failing to raise them in his first federal habeas petition. This court may authorize a successive habeas petition only if the application "makes a prima facie showing that the application satisfies the requirements of this subsection." 28 U.S.C. § 2244(b)(3)(C). The relevant portion of the subsection requires that a claim be dismissed unless:
(i) the factual predicate for the claim could not have been discovered previously through the exercise of due diligence; and
(ii) the facts underlying the claim, if proven and viewed in light of the evidence as a whole, would be sufficient to establish by clear and convincing evidence that, but for constitutional error, no reasonable factfinder would have found the applicant guilty of the underlying offense.
28 U.S.C. § 2244(b)(2)(B).
Section 2244 establishes two independent gates through which the motion to file a successive petition must pass before the merits will be addressed.[5] First, this court must determine whether the motion makes a prima facie showing that it can meet the requirements of § 2244(b)(2). This requires "a sufficient showing of possible merit to warrant a fuller exploration by the district court," and permission will be granted when it "appears reasonably likely that the application satisfies the stringent requirement for the filing of a second or successive petition." In re Morris, 328 F.3d 739, 740 (5th Cir.2003) (quoting Bennett v. United States, 119 F.3d 468, 469-70 (7th Cir.1997)). Second, before addressing the merits of the successive petition, the district court must independently determine whether the petition actually satisfies the stringent § 2244(b)(2) requirements. Id. at 741.
The TCCA has detailed the facts of this case. See Swearingen, 101 S.W.3d at 92-95. In brief, Melissa Trotter disappeared on December 8, 1998. Her body was found in the Sam Houston National Forest on January 2, 1999. Swearingen had been in jail since December 11, 1998. The claims he seeks to raise in his successive petition primarily relate to forensic evidence *348 that allegedly proves that Trotter's body was left in the forest after his arrest.[6]
Swearingen raises two claims of actual innocence. The Fifth Circuit does not recognize freestanding claims of actual innocence on federal habeas review. See Graves v. Cockrell, 351 F.3d 143, 151 (5th Cir.2003) (collecting cases). This panel cannot overturn the decision of an earlier panel. Teague v. City of Flower Mound, Tex., 179 F.3d 377, 383 (5th Cir.1999).
Swearingen asserts that the State sponsored the false or misleading testimony of Dr. Carter, the Harris County Medical Examiner who testified at trial for the State as to the date of death, in violation of his due process rights as set forth in Giglio v. United States, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104 (1972). The factual predicate for this claim is an October 31, 2007 affidavit that casts some doubt on her testimony as to the date of death. At trial, Dr. Carter testified that Trotter's body had been left in the forest for approximately twenty-five days, which was consistent with the State's theory that Swearingen murdered Trotter on December 8, 1998, and left her body in the forest. In her affidavit, Dr. Carter does not address the correctness of her original testimony based on decomposition and fungal growth, but states that if she had been provided certain additional data, she would have testified that the findings of her autopsy "are consistent with a date of exposure in the Sam Houston National Forest within fourteen days of discovery, and incompatible with exposure for a longer period of time." Swearingen has made a prima facie showing that this affidavit could not have been discovered previously with the exercise of due diligence. § 2244(b)(2)(B)(i). Unlike his other claims, this claim rests not on the correctness of her testimony (which could have been disputed at any time) but on the State's interactions with its witness, which could not be known before her affidavit. We assume the merits of Swearingen's asserted constitutional error at this stage, and given the importance of Dr. Carter's expert testimony to the State's case, we find that Swearingen has made a prima facie showing that but for the alleged constitutional error of the State sponsoring the false testimony of Dr. Carter, no reasonable juror could find guilt beyond a reasonable doubt. § 2244(b)(2)(B)(ii).
Swearingen also raises several Strickland claims, two of which satisfy the prima facie showing required by § 2244(b)(2)(B). First, Swearingen alleges that his trial counsel performed a constitutionally deficient cross-examination of Dr. Carter. Like his Giglio claim, this Strickland claim is based in part on Dr. Carter's *349 affidavit. As discussed above, this claim should be permitted to proceed. Second, Swearingen alleges that his trial counsel failed to develop histological evidence involving a paraffin block that contained Trotter's body tissue. Because Swearingen's expert, Dr. White, was unable to analyze this evidence until January 15, 2009, the factual predicate for this claim could not have been previously discovered with the exercise of due diligence. § 2244(b)(2)(B)(i). Swearingen has made a prima facie showing that but for the alleged constitutional error of his trial counsel's failure to develop this histological evidence, no reasonable juror could find guilt beyond a reasonable doubt. § 2244(b)(2)(B)(ii). Swearingen's remaining Strickland claims fail to satisfy the criteria of § 2244(b)(2)(B).[7]
The factual predicates for Swearingen's remaining claims were either known at the time of trial or, with the exercise of diligence, could have been discovered in time for presentation in his first federal habeas petition.[8] These claims therefore fail to make a prima facie showing of satisfying § 2244(b)(2)(B) and may not be presented in a successive habeas petition.
Accordingly, we authorize Swearing to file a successive habeas corpus petition with the district court limited to: (1) Giglio violations in the State's presentation of Dr. Carter's testimony; and (2) Strickland violations in trial counsel's cross-examination of Dr. Carter, and his failure to develop histological evidence. We reiterate that this grant is tentative in that the district court must dismiss the motion that we have allowed the applicant to file, without reaching the merits, if the court finds that the movant has not satisfied the § 2244(b)(2) requirements for the filing of such a motion. In re Morris, 328 F.3d at 739 (quoting Reyes-Requena v. United States, 243 F.3d 893, 899 (5th Cir.2001)).
We GRANT the motion for a stay of execution. We GRANT IN PART AND DENY IN PART the motion to file a successive petition for writ of habeas corpus and ORDER counsel to show cause.
WIENER, Circuit Judge, specially concurring:
Although my concurrence in the foregoing opinion makes it unanimous, I write separately to address the elephant that I perceive in the corner of this room: actual innocence. Consistently repeating the mantra that, to date, the Supreme Court of the United States has never expressly recognized actual innocence as a basis for habeas corpus relief in a death penalty case, this court has uniformly rejected standalone claims of actual innocence as a constitutional ground for prohibiting imposition of the death penalty.[1] The Supreme Court has, however, made statements in *350 dicta which at least strongly signal that, under the right circumstances, it might add those capital defendants who are actually innocent to the list of persons who like the insane,[2] the mentally retarded,[3] and the very young[4] are constitutionally ineligible for the death penalty.[5]
I conceive the real possibility that the district court to which we return this case today could view the newly discovered medical expert reports as clear and convincing evidence that the victim in this case could not possibly have been killed by the defendant, yet find it impossible to force the actual-innocence camel through the eye of either the Giglio or the Strickland needle, and thus have no choice but to deny habeas relief to an actually innocent person. Should that prove to be so, this might be the very case for this court en banc or the U.S. Supreme Court if we should demur to recognize actual innocence as a ground for federal habeas relief.[6] To me, this question is a brooding omnipresence in capital habeas jurisprudence that has been left unanswered for too long.
NOTES
[1] Swearingen raised seven claims in his first federal habeas petition. The district court held that actual and independent state procedural law barred consideration of four unexhausted claims. It denied the remaining three claims on the merits.
[2] In this opinion, we explicitly warned Swearingen's counsel to avoid the form of timing gamesmanship we now face:
We note also that at various times in his briefings Petitioner states that he intends in the future to raise a claim based on actual innocence. If so, Petitioner must file his claim promptly or run the risk of having that claim deemed dilatory and therefore rejected. Such a dilatory filing could also raise the issue of bad faith on the part of Petitioner's attorneys and lead to the imposition of sanctions.
Swearingen, 192 Fed.Appx. at 300 n. 2. The late filing of this motion demonstrates disrespect for this court and for Swearingen's life; consequently, Swearingen's counsel are ordered to show cause within 7 days from the date hereof as to why this petition could not have been filed before January 20, 2009 in light of the dispositive order of the TCCA dated December 17, 2008.
We commend the State on the quality of its response, particularly given the extremely limited time that Swearingen's counsel's actions allowed us to provide.
[3] The claims identified in Swearingen's motion to file a successive federal habeas petition and the attached proposed petition are not consistent. We have included all the constitutional claims that he raised in either document. On January 23, 2009, Swearingen filed a supplemental brief seeking authorization to file actual innocence and ineffective assistance of counsel claims based on newly discovered histological evidence.
[4] On January 20 and 21, 2009, Dr. Lloyd White reviewed slides prepared from a paraffin block that contained Trotter's body tissue. Swearingen claims that he did not discover this histological evidence sooner because the Harris County Medical Examiner's office repeatedly stated that all samples from the autopsy had been discarded. According to Swearingen, the medical examiner did not disclose that it had the paraffin block until January 15, 2009.
[5] State court findings and state procedural bars do not affect whether Swearingen may file his habeas petition but will affect consideration of the merits of his claims, if they are reached. In re Wilson, 442 F.3d 872, 878 (5th Cir.2006).
[6] We note the inconsistencies in the forensic evidence presented by Swearingen. Dr. Carter's affidavit describes "marked decomposition of the head and neck region" and finds that the body was exposed in the woods "within fourteen days of discovery." Dr. G.M. Larken suggests that the body was in the woods and deceased for 3-4 days. Dr. Luis Sanchez concludes that the body was likely in the field for 10-15 days but was "some place else before that." Dr. James Arends, an entomologist, testified that the body was "stored someplace cold" ("frozen") before being placed in woods based on the different decomposition from one end of the body to another. Finally, Dr. White analyzed tissues that he concluded "are of an individual that has been dead no more than two or three days." Obviously, although each expert opines that the body was not placed in the woods on December 8, 1998, the differences undermine the credibility of their conclusions.
The State presented entomological evidence at evidentiary hearings indicating that the body was colonized by the fly Cynomyopsis Cadavarina, a secondary colonizer, on December 18, 1998. Nor does any expert testimony weaken the link between the victim's stomach contents and the meal she ate with Swearingen on December 8, 1998.
[7] Swearingen claims that his trial counsel's failure to develop entomological and pathological evidence was constitutionally deficient; however, the factual predicate for both of these Strickland claims could have been previously discovered with the exercise of due diligence.
[8] Among his other claims, Swearingen asserts that the State violated Brady by withholding exculpatory evidence that another man threatened Trotter. In addition to being discoverable with due diligence, in light of the strong circumstantial case against Swearingen and the cumulative nature of the evidence, this claim fails to make a prima facie showing that he will be able to establish by clear and convincing evidence that, but for the alleged concealment of this statement, no reasonable factfinder would have found the applicant guilty of the underlying offense. This claim thus fails to meet either prong of § 2244(b)(2)(B).
[1] See, e.g., Graves v. Cockrell, 351 F.3d 143, 151 (5th Cir.2003) (citing cases).
[2] See Ford v. Wainwright, 477 U.S. 399, 409-10, 106 S.Ct. 2595, 91 L.Ed.2d 335 (1986).
[3] See Atkins v. Virginia, 536 U.S. 304, 321, 122 S.Ct. 2242, 153 L.Ed.2d 335 (2002).
[4] See Roper v. Simmons, 543 U.S. 551, 568, 125 S.Ct. 1183, 161 L.Ed.2d 1 (2005) (holding that imposition of the death penalty on juvenile offenders under eighteen violates the Eighth Amendment).
[5] Herrera v. Collins, 506 U.S. 390, 417, 113 S.Ct. 853, 122 L.Ed.2d 203 (1993) ("We may assume, for the sake of argument in deciding this case, that in a capital case a truly persuasive demonstration of `actual innocence' made after trial would render the execution of a defendant unconstitutional, and warrant federal habeas relief if there were no state avenue open to process such a claim."); see House v. Bell, 547 U.S. 518, 554-55, 126 S.Ct. 2064, 165 L.Ed.2d 1 (2006) (emphasizing that Herrera "left open" the hypothetical possibility of a freestanding actual innocence claim); see also Herrera, 506 U.S. at 419, 113 S.Ct. 853 (O'Connor, J., concurring) ("I cannot disagree with the fundamental legal principle that executing the innocent is inconsistent with the Constitution."); David v. Hall, 318 F.3d 343, 347-48 (1st Cir.2003) ("The actual innocence rubric ... has been firmly disallowed by the Supreme Court as an independent ground of habeas relief, save (possibly) in extraordinary circumstances in a capital case.").
[6] The Second Circuit has noted the possibility that in addition to the obvious Eighth Amendment concerns the continued incarceration of an innocent person raises an "open and significant due process question." See Triestman v. United States, 124 F.3d 361, 379 (2d Cir. 1997). In that case, Judge Calabresi said:
The Supreme Court has stated that a procedural limitation is not subject to proscription under the Due Process Clause unless it offends some principle of justice so rooted in the traditions and conscience of our people as to be ranked as fundamental. Concern about the injustice that results from the conviction of an innocent person has long been at the core of our criminal justice system. It is certainly arguable, therefore, that the continued imprisonment of an actually innocent person would violate just such a fundamental principle.
Id. (internal quotation marks and citations omitted). Although, the Second Circuit did not restrict its analysis to the capital context, the Due Process issue only magnifies if we consider the execution of an actually innocent person.
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787 S.W.2d 141 (1990)
Ex parte Larry H. GRAHAM, Relator.
No. A14-89-1045-CV.
Court of Appeals of Texas, Houston (14th Dist.).
March 15, 1990.
*142 Terry J. Calhoun, Houston, for appellant.
Walter Mahoney, Jr., Houston, for appellee.
Before J. CURTISS BROWN, C.J., and JUNELL and MURPHY, JJ.
OPINION
JUNELL, Justice.
This is an original habeas corpus proceeding. Relator was held in contempt of court on November 13, 1989, for failing to comply with temporary orders dated September 12, 1989, requiring, inter alia, that relator make monthly mortgage payments on the home occupied by his spouse. Pursuant to Tex.Gov't Code Ann. § 22.221(d) this court granted leave to file the petition for writ of habeas corpus and admitted relator to bail pending hearing set for January 10, 1990. We deny the writ of habeas corpus.
Relator was incarcerated pursuant to a commitment order dated November 13, 1989, and issued by the 310th Judicial District Court of Harris County for failure to make three consecutive monthly payments in the aggregate amount of $1,413.00 on the residence of his spouse as "further support" ordered in the temporary orders related to Cause No. 89-35327, styled:
IN THE MATTER OF THE MARRIAGE OF LaVERNE A GRAHAM and LARRY H. GRAHAM AND IN THE INTEREST OF LaJEANA GRAHAM, LaRONDA GRAHAM, La-REANA GRAHAM, AND LaWANDA GRAHAM, MINOR CHILDREN
Relator seeks avoidance of the commitment order on grounds that the underlying order is not sufficiently clear and unambiguous, and the commitment order is void under section 14.33(a) of the Texas Family Code due to lack of specificity.
Before an appeals court may order the release of relator in a habeas corpus proceeding, the trial court's order must be void because either it was beyond the power of that court, or because it deprived the relator of his liberty without due process of law. Ex parte Barnett, 600 S.W.2d 252 (Tex.1980).
The temporary orders of the court below read as follows:
IT IS ORDERED that as further support, Larry H. Graham shall pay promptly and timely the house payment due each month for the residence at 17022 Guinn, Houston, Texas 77044 commencing with the payment due for the month of September, 1989.
After service of appropriate notice and a hearing, the commitment order was issued upon these findings:
Larry H. Graham, Respondent is in contempt of this court in that he failed and refused to make support payments in defiance of said Judgment hereinabove referred to [$471.00 each month (House Payment) for the temporary support and maintenance of his spouse, La Verne A. Graham] and further that the unpaid support under said order is the sum of $1,413.00, representing the September, October and November, 1989 payments.
We hold there is no ambiguity in the underlying temporary orders. The facts in this case are easily distinguishable from Ex *143 parte Slavin, 412 S.W.2d 43 (Tex.1967), where it was possible to construe the underlying court order in more than one way with more than one meaning. In the case before us, the underlying order can be read only one way and relator was given adequate notice of his obligations. Although no payee, due date, or amount are specified in the order, a reasonable person in relator's position would know the details of the house payments or he could determine them with minimal inquiry. Additionally, there is no need for the degree of precision required of orders under Tex.Fam.Code Ann. § 14.33 which is related solely to the enforcement of orders for child support. See Ex parte Boykins, 764 S.W.2d 590 (Tex.App.Houston [14th Dist.] 1989, orig. proceeding). The court below has characterized the arrearages in this case not as child support, but as temporary support for relator's spouse. As such, the support payments fall under the provisions of Tex.Fam. Code Ann. § 3.59 which are subject to contempt proceedings as an interlocutory order. See Ex parte Davis, 101 Tex. 607, 111 S.W. 394 (1908).
The writ of habeas corpus is denied, the order of the trial court is affirmed, and relator, Larry H. Graham, is remanded to the custody of the Sheriff of Harris County for the confinement prescribed in the November 13, 1989, commitment order and judgment in Cause No. 89-35327, subject to relator's leave to apply for probation as granted in that order.
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109 F.3d 768
Georgev.City of Carrollton*
NO. 95-10897
United States Court of Appeals,Fifth Circuit.
Feb 26, 1997
1
Appeal From: N.D.Tex. , No. 3:94-CV-1116-X
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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713 F.Supp. 1382 (1989)
CONTE & COMPANY, INC., Plaintiff,
v.
Robert T. STEPHAN, Attorney General of the State of Kansas, Defendant.
No. 88-4033-R.
United States District Court, D. Kansas.
May 3, 1989.
*1383 Randy L. Baird, Topeka, Kan., Frank J. Shannon, III, Henritze & Shannon, Atlanta, Ga., for plaintiff.
Nancy L. Ulrich, Asst. Atty. Gen., Topeka, Kan., for defendant.
MEMORANDUM AND ORDER
ROGERS, District Judge.
Plaintiff brings this action seeking declaratory relief against investigations by the defendant, the Attorney General for the State of Kansas, into its business activities within the State of Kansas. Plaintiff contends that the actions of the defendant in applying the provisions of the Kansas Consumer Protection Act (KCPA), K.S.A. 50-623 et seq., to its direct mail business are unconstitutional. This matter is presently before the court upon cross-motions for summary judgment. The court has carefully reviewed the matters submitted by the parties and we are prepared to rule.
The facts that form the background of this litigation are generally not in dispute. Plaintiff is a Georgia corporation which engages in direct mail marketing. Plaintiff solicits customers exclusively through the use of the United States Postal Service. Plaintiff's mailing of certain postcards to Kansas residents generated several complaints to the defendant. The postcards congratulated Kansas residents on having been selected "to receive one of 17 valuable giftsa NATIONAL GIFT HOUSE EXTRAVAGANZA!!!" These gifts included such items as an automobile, a color television, a video camera, cash and, most importantly, a "holiday vacation for two." In order to receive their gifts, the Kansas residents were required to pay a $17.00 fee "to cover processing and handling of [the] award package." The recipients of the postcards were not notified of the probabilities associated with the award of any of the enumerated gifts. The defendant thereafter conducted investigations of the plaintiff's activities. Following the completion of these investigations, defendant threatened to bring an action under the KCPA in Kansas state court against the plaintiff for injunctive and monetary relief unless the plaintiff entered into a consent decree. The consent order required the defendant to discontinue sending the postcards to Kansas consumers and to pay fees and penalties in the amount of $40,000.00. Plaintiff responded by filing this action. Defendant subsequently filed an action in state court alleging that the plaintiff violated the KCPA by the following acts and practices, which are deceptive and unconscionable: "a) The Defendant offers nothing of value to the consumer; b) The Defendant's advertisement appears to be a notice that the consumer has won a `valuable gift'; c) The Defendant requires payment of a $17 gift `processing and handling' fee before telling the consumer what he or she has `won'; d) The consumer who pays the $17 is told he or she has won a `Holiday Vacation for Two'; e) The `Holiday Vacation for Two' appears to be the only prize actually awarded from all those listed on the advertisement; f) The `winner' of the `Holiday Vacation for Two' would be required to pay for his or her own transportation and lodging expenses; and g) The odds of winning the listed prize are not given in the advertisement."
Plaintiff has three prongs to its attack on the actions of the defendant. First, plaintiff argues that the application of the KCPA to mailed materials is preempted by Article I, section 8, clause 7 of the United States Constitution and provisions in the United States Code allowing the United States Postal Service to investigate and act on allegedly fraudulent or deceptive acts being carried on through the mails. Second, plaintiff contends that the application of the KCPA to its activities violates its First Amendment rights to engage in commercial speech. Lastly, plaintiff asserts that the application of the KCPA to its activities violates its due process rights under the Fifth and Fourteenth Amendments.
Before we consider the arguments of the parties, we shall briefly examine the laws applicable to this action. The United States Constitution provides in pertinent *1384 part that "[t]he Congress shall have Power ... To establish Post Offices ..." U.S. Const. art. I, section 8, clause 7. Congress has passed in Title 39 a number of statutes to implement this constitutional provision. Several of the statutes have some importance here. Nonmailable matter may not be deposited in the United States mail. 39 U.S.C. § 3001. The use of the United States mail to conduct a lottery, or to engage in a scheme to obtain money by means of false representations is prohibited. 39 U.S.C. § 3005. The United States Postal Service may order the return of such mail and require a person to cease and desist when it has satisfactory evidence that a violation has occurred. Id.
The KCPA prohibits suppliers from engaging in deceptive acts or practices in Kansas consumer transactions. K.S.A. 50-626. The KCPA further prohibits any supplier from engaging in any unconscionable act or practice in Kansas consumer transactions. K.S.A. 50-627. The stated purpose of the KCPA is, in part, to "protect consumers from suppliers who commit deceptive and unconscionable practices." K.S.A. 50-623(b). The Kansas Attorney General is responsible for enforcing the KCPA and acting upon consumer complaints. K.S.A. 50-628. The Attorney General is empowered to investigate suppliers who violate the KCPA and to file actions in state court to obtain declaratory or injunctive relief. K.S.A. 50-631, 50-632.
I.
Plaintiff contends that the federal government has the sole and exclusive power to regulate the communications contained in the United States mail and that any effort by the State of Kansas to regulate mail matters would conflict with the powers of the federal government. Plaintiff's argument is based upon the constitutional provision which provides that "[t]he Congress shall have Power ... To establish Post Offices ...", U.S. Const. art. I, § 8, clause 7; and (2) the statutes and regulations which prohibit the mailing of nonmailable matters such as materials containing false representations, 39 U.S.C. §§ 3001 and 3005, 39 C.F.R. § 1.1 et seq.
The constitutional provision gives Congress the power to establish post offices. Plaintiff has failed to produce any authority for the proposition that this provision was meant to prohibit the states from passing laws to protect their residents. Courts faced with similar arguments concerning this constitutional provision have determined that it does not preempt state regulations that involve postal matters. See Roth v. United States, 354 U.S. 476, 77 S.Ct. 1304, 1 L.Ed.2d 1498 (1957) (state law forbidding obscenity did not violate constitutional provision when obscene matters were mailed); Railway Mail Assoc. v. Corsi, 326 U.S. 88, 65 S.Ct. 1483, 89 L.Ed. 2072 (1945) (state law forbidding discrimination in labor organizations which applied to railway postal clerks association did not violate constitutional provision); Aldens, Inc. v. Packel, 379 F.Supp. 521 (M.D.Pa.1974) (state law regulating finance charges on transactions conducted by mail within state did not violate constitutional provision), modified on other grounds, 524 F.2d 38 (3d Cir.1975), cert. denied, 425 U.S. 943, 96 S.Ct. 1684, 48 L.Ed.2d 187 (1976); State v. McHorse, 85 N.M. 753, 517 P.2d 75 (App.1973) (state law prohibiting distribution of controlled substances not preempted by constitutional provision when substances were mailed); Ministers Life and Casualty Union v. Haase, 30 Wis.2d 339, 141 N.W.2d 287 (1966) (state law regulating mail-order insurance business did not violate constitutional provision), appeal dismissed, 385 U.S. 205, 87 S.Ct. 407, 17 L.Ed.2d 301 (1966) (per curiam). Only when the state law involves a "direct, physical interference with federal activities under the postal power or some direct, immediate burden on the performance of postal functions" will state regulation be deemed unconstitutional. Railway Mail Assoc. v. Corsi, supra, 326 U.S. at 96, 65 S.Ct. at 1488. We fail to find here that the provisions of the KCPA violate the constitutional provision giving the Congress the power to establish post offices because the KCPA does not impinge on federal mail service or the power of the government to conduct it.
*1385 In determining whether the statutes and regulations that have promulgated in accordance with the constitutional provision have by virtue of the Supremacy Clause preempted the provisions of the KCPA, we are guided by teachings of Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 713, 105 S.Ct. 2371, 2375, 85 L.Ed.2d 714 (1985):
Under the Supremacy Clause, federal law may supersede state law in several different ways. First, when acting within constitutional limits, Congress is empowered to pre-empt state law by so stating in express terms. Jones v. Rath Packing Co., 430 U.S. 519, 525 [97 S.Ct. 1305, 1309, 51 L.Ed.2d 604] (1977). In the absence of express pre-emptive language, Congress' intent to pre-empt all state law in a particular area may be inferred where the scheme of federal regulation is sufficiently comprehensive to make reasonable the inference that Congress "left no room" for supplementary state regulation. Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 [67 S.Ct. 1146, 1152, 91 L.Ed. 1447] (1947). Pre-emption of a whole field also will be inferred where the field is one in which "the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject." Ibid.; see Hines v. Davidowitz, 312 U.S. 52 [61 S.Ct. 399, 85 L.Ed. 581] (1941).
Even where Congress has not completely displaced state regulation in a specific area, state law is nullified to the extent that it actually conflicts with federal law. Such a conflict arises when "compliance with both federal and state regulations is a physical impossibility," Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-143 [83 S.Ct. 1210, 1217-18, 10 L.Ed.2d 248] (1963), or when state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," Hines v. Davidowitz, supra, [312 U.S.] at 67 [61 S.Ct. at 404]. See generally Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 698-699 [104 S.Ct. 2694, 2699-2700, 81 L.Ed.2d 580] (1984).
Plaintiff does not contend that Congress explicitly preempted the KCPA. Therefore, the question becomes (1) whether the federal statutes and regulations are so broad as to cover the entire field, or (2) whether the federal interest is so dominant that the federal law will be assumed to preclude any state laws on the subject, or (3) whether it is impossible to comply with both the federal and state laws.
The court finds no support for the positions taken by the plaintiff on the first two issues. Plaintiff has failed to cite any authority, and we have not discovered any cases supporting its contentions. The defendant has cited several cases which are instructive on the aforementioned questions.
In State of Washington v. Reader's Digest Assoc., Inc., 81 Wash.2d 259, 501 P.2d 290 (1972) (en banc), appeal dismissed, 411 U.S. 945, 93 S.Ct. 1927, 36 L.Ed.2d 406 (1973), the Attorney General of Washington brought action seeking a declaratory judgment that the defendant's sweepstakes violated the state's consumer protection act, an injunction against conducting or advertising the sweepstakes in Washington or accepting sweepstakes entries from that state, and an order directing the defendant to pay a civil penalty for each advertisement of the sweepstakes disseminated after a certain date. The defendant argued that the field in which the state was seeking to regulate had been preempted by the United States Postal Service. The Washington Supreme Court responded to the preemption argument as follows:
[R]espondent argues that federal statutory control over lotteries by mail preempts the regulation of mail order lotteries by states. This contention is without merit. While it is true the state is without power to regulate the mail, it is not powerless to prevent respondent from using unfair trade practices within its borders. Roth v. United States, 354 U.S. 476, 493-494, 77 S.Ct. 1304 [1313-1314] 1 L.Ed.2d 1498 (1957). The state cannot enjoin the mails, but it can enjoin respondent from conducting the Sweepstakes within its borders, subjecting respondent *1386 to the penalties of the Consumer Protection Act for refusal to comply. (Footnote omitted.)
501 P.2d at 303.
In State ex inf. Danforth v. Reader's Digest Assoc., Inc., 527 S.W.2d 355 (Mo. 1975) (en banc), the Attorney General of Missouri brought an action alleging the defendant's mailing into the state violated the state lottery laws. The defendant argued that the federal government had occupied the field of mailability of lottery material and that any regulation of such material had been preempted to the exclusion of state action. The Missouri Supreme Court rejected the argument and stated:
[I]t is obvious that there would be no "... direct, physical interference with federal activities under the postal power or some direct, immediate burden on the performance of the postal functions ..." (Roth, case, supra). The postal service would not be affected in its operations; there would be no responsibility on its behalf to screen mail addressed to Missourians; in no sense would the service be an enforcement agent of the lottery laws of Missouri; and granting of the relief sought would not be an attempt to decide what can or cannot be accepted and delivered as mail. Only the respondent would be told that it cannot conduct its lottery (if, in fact, it is found to be a lottery) in Missouri or advertise it or solicit participation in it from residents of Missouri. Respondent would not be penalized for using the mails but for conducting an enterprise which is repugnant to the laws and public policy of this state.
527 S.W.2d at 362-63.
Plaintiff attempts to distinguish the aforementioned cases by stating that they are limited to situations involving lotteries. We disagree. Although the context is somewhat different, the reasoning is directly applicable here.
There is little doubt that the federal statutory scheme for handling, delivering and sorting the mails is comprehensive. The United States Postal Service may determine whether matter is nonmailable under statutory guidelines, and may return any nonmailable matter to the sender. "But merely because the federal provisions were sufficiently comprehensive to meet the need identified by Congress did not mean that States and localities were barred from identifying additional needs or imposing further requirements in the field." Hillsborough County v. Automated Medical Laboratories, Inc., supra, 471 U.S. at 717, 105 S.Ct. at 2377. Thus, while the state may not regulate the mail, it may prevent unfair trade practices from occurring within its boundaries. The state has chosen here through the KCPA to augment the federal laws by providing additional safeguards. We find nothing in the federal statutes on the United States mails to preclude the passage and implementation of legislation such as the KCPA.
The court also finds no support for the position that the federal interest in preventing fraud or deception through the use of the United States mails is so dominant as to preclude any state laws on the subject. In reaching this conclusion, we were guided again by Hillsborough County v. Automated Medical Laboratories, Inc., supra, at 719, 105 S.Ct. at 2378:
Undoubtedly, every subject that merits congressional legislation is, by definition, a subject of national concern. That cannot mean, however, that every federal statute ousts all related state law. Neither does the Supremacy Clause require us to rank congressional enactments in order of "importance" and hold that, for those at the top of the scale, federal regulation must be exclusive.
Instead, we must look for special features warranting preemption.
No such special features are present here. The protection of consumers from fraud and deception has historically been a matter of state interest. Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 462, 98 S.Ct. 1912, 1921, 56 L.Ed.2d 444 (1978); Savage v. Jones, 225 U.S. 501, 32 S.Ct. 715, 56 L.Ed. 1182 (1912). The federal statutes prohibiting the mailing of fraudulent materials simply do not convert this area into a matter of overriding national concern.
*1387 Finally, we find no conflict between the federal statutes and the KCPA. The KCPA prohibits the actual fraudulent activities while the federal law merely prohibits the mailing of fraudulent materials. There is some overlap, but each law is intended for and serves different purposes.
In sum, we do not find that the application of the KCPA to mailed materials is preempted by the Constitutional provision giving Congress the power to establish post offices or the federal statutes allowing the United States Postal Service to investigate and act on allegedly fraudulent or deceptive acts being carried on through the mails. Accordingly, the defendant must be granted summary judgment on this claim.
The preemption issue raised here by plaintiff has recently been decided in another case brought by this plaintiff in Georgia. In Bazarian v. Harris, No. 1:88-cv-232-MHS (N.D.Ga., unpublished, 2/22/89), Judge Marvin Shoob rejected the plaintiff's argument that the application of the Georgia Fair Business Practices Act was preempted by Article I, section 8, clause 7 of the United States Constitution and the provisions of the United States Code allowing the United States Postal Service to investigate and act on allegedly fraudulent or deceptive acts being carried on through the mails. The reasoning of Judge Shoob provides additional support for this court's ruling:
The Georgia statute prohibits the actual fraudulent activities; the federal regulation merely prohibits the mailing of fraudulent materials. While the two statutes obviously overlap, they were each intended for and serve different purposes. The state could never attempt to prohibit plaintiffs from using the mail to conduct their business, but they could ban plaintiffs from conducting business within the state if it were necessary to protect state residents. The minor impact of the state action on the federal regulation of the mails is precisely how our system is supposed to work: the federal government makes broad regulations designed to provide general protection to U.S. citizens; then the state makes and enforces regulations which define and apply those general regulations in a way designed to enhance the protection provided by the federal government. The federal government cannot possibly provide the same protection that the states can provide on a local level.
Since Congress undoubtedly knew of the states' history of regulating fraud and dishonest business dealings within the state, it could easily have written into the federal postal regulations that the regulations were intended to be the sole rules applicable to such activities. Without any evidence of such an intent or of such a pervasive regulation that there is no room left for state protection, the Court must find that the federal regulations do not preempt the state regulation.
All states have laws requiring certain actions by people or companies wishing to conduct business in the state. Requiring that such business be conducted in a fair and honest manner is one law that everyone must agree is within the state police power. Unless that law conflicts with similar federal regulations, it cannot be preempted. In this case there is no evidence on which to base a conclusion that Congress intended that the federal regulations preempt state laws.
Id., slip op. at 7-8.
II.
Plaintiff next contends that its First Amendment rights have been violated by the application of the KCPA to its activities in the State of Kansas. Plaintiff asserts that its mailings are commercial speech which is protected by the First Amendment.
In Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976), the Court held that unwarranted governmental regulation of commercial speech infringes upon the First Amendment rights of both the speaker and the listener. Nevertheless, the Court made clear that it did not intend by its decision to impair the government's ability to regulate misleading or deceptive speech. "Obviously, *1388 much commercial speech is not provably false, or even wholly false, but only deceptive and misleading. We foresee no obstacle to a State's dealing effectively with this problem." Id., at 771, 96 S.Ct. at 1830.
In Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980), the Court adopted the following four-part analysis for assessing the validity of restrictions on commercial speech:
At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.
Id., at 566, 100 S.Ct. at 2351.
In applying this analysis to the provisions of the KCPA, we find no violation of the plaintiff's First Amendment rights. Through the KCPA, the State of Kansas has attempted to deal with deceptive and misleading practices. The statutes adopted by the state clearly and directly advance the governmental interest of the protection of consumers from fraud and deception. The KCPA as applied to plaintiff does not overreach. The law does no more than necessary to protect consumers from fraud. Accordingly, the court shall grant summary judgment to defendant on this claim.
III.
Plaintiff also contends that the KCPA has violated its rights to due process under the Fifth and Fourteenth Amendments. The exact nature of this contention is somewhat unclear. Plaintiff argues initially that the KCPA "attempts to impair the obligation of contracts between consenting parties in that it attempts to regulate the type of `material benefit' received by either party to a contract and attempts to determine whether a contract is `excessively one-sided in favor of the supplier, in violation of the due process clause of the Fifth and Fourteenth Amendments of the United States Constitution and as they relate to the contract clause and the First Amendment of the United States Constitution." Plaintiff also claims its due process rights are violated by the KCPA because the state is able "to obtain jurisdiction on a nonresident, whose only contact with the State is through the United States Mail."
To the extent that we understand plaintiff's arguments, we fail to find any support for them. The law is quite explicit that the states have clear "authority to safeguard the vital interests" of their people, even when private contracts are thereby altered. City of El Paso v. Simmons, 379 U.S. 497, 508, 85 S.Ct. 577, 583, 13 L.Ed.2d 446 (1965). Moreover, the activities of the plaintiff of which complaint is made in this action establishes sufficient minimum contacts with the State of Kansas to satisfy the due process clause of the Fourteenth Amendment. State ex inf. Danforth v. Reader's Digest Assoc., Inc., supra, at 358. Thus, we must also reject this argument and award summary judgment to the defendant.
In sum, we find that the motion of defendant for summary judgment must be granted. The undisputed facts demonstrate the plaintiff is entitled to no relief in this action.
IT IS THEREFORE ORDERED that plaintiff's motion for summary judgment be hereby denied.
IT IS FURTHER ORDERED that defendant's motion for summary judgment be hereby granted. Judgment shall be entered for the defendant and against the plaintiff.
IT IS SO ORDERED.
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118 Ga. App. 515 (1968)
164 S.E.2d 158
WHITE
v.
THE STATE.
43803.
Court of Appeals of Georgia.
Submitted July 2, 1968.
Decided October 14, 1968.
*516 Henritze & Smith, Walter M. Henritze, Jr., for appellant.
Lewis R. Slaton, Solicitor General, J. Walter LeCraw, Tony H. Hight, for appellee.
BELL, Presiding Judge.
Defendant was convicted of a violation of Code § 26-2637, which provides: "If any person shall break and enter any automobile or other motor vehicle with the intent to commit a larceny or a felony, he shall be guilty of a felony." The indictment specifically charged that the act was done "with intent to steal."
1. The gist of the offense is the breaking and entering of the automobile with larcenous or felonious intent. Assuming, without deciding, that it was necessary to prove ownership of the vehicle, this was done by testimony of one detective that detective E. R. Tolliver actually owned the car and detective Richard Burkett was using it at the time; it did not appear that the witness was not testifying from his own knowledge. It was not necessary for the State to prove either that the automobile contained valuable effects or that there was an asportation of valuable effects from the vehicle. These are not included in the statutory definition, either expressly or implicitly, as essential elements of the offense. However, there was something of value in the car that is, a sack of money. Sudan v. State, 68 Ga. App. 752, 754 (23 SE2d 867). Positive testimony showed an actual breaking and entering of the automobile and that defendant's accomplice was reaching for the sack of money when caught. Thus the evidence was ample to support an inference that the acts were done with the specific intent charged in the indictment. Woodward v. State, 54 Ga. 106.
2. The solicitor, in his argument to the jury prior to defendant's concluding argument, stated: "We don't know what his defense is going to be. We have not had the benefit of hearing from him in this case." Remarks of this kind do not constitute cause for mistrial unless they occur in such connection as to imply to the jury that the defendant's failure to testify or make an unsworn statement should be counted against him. See Carter v. State, 7 Ga. App. 42 (65 SE 1090); Head v. State, 58 Ga. App. 375, 376 (198 SE 550). The transcript of proceedings does not include, as it should, the context in which the remarks were made. We are therefore unable to determine that the remarks were prejudicial to defendant or that the court erred in failing to grant defendant's motion for mistrial on account of them.
Judgment affirmed. Hall and Quillian, JJ., concur.
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NO. 07-03-0239-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL D
JUNE 14, 2005
______________________________
DAVIE HARRISON, APPELLANT
V.
TDCJ-TDCJID AND AGENTS, SERVANTS
AND EMPLOYEES AND COUNTY OF POTTER, APPELLEES
_________________________________
FROM THE 223RD DISTRICT COURT OF GRAY COUNTY;
NO. 33,023; HONORABLE LEE WATERS, JUDGE
_______________________________
Before QUINN, C.J., and REAVIS and CAMPBELL, JJ.
MEMORANDUM OPINION
Appellant Davie Harrison, a prison inmate acting pro se, filed a complaint alleging
that he was injured and threatened by L. Delfierro, an employee of the Clements Unit of the
Texas Department of Criminal Justice (TDCJ). Appellant's complaint also named Warden
Price, Assistant Warden Joe Nunn, Major Barry Martin, and Captain Beach all employees
of the Jordan Unit of the TDCJ. Other named defendants were B. Bauer, identified as
being from the "Office of the Inspector General Investigations Division" and Kellie Ward,
identified as a grievance supervisor in Huntsville, Texas. Appellant named Jerry Neal,
Amarillo Chief of Police, and Amarillo Mayor Trent Sisemore, Potter County Sheriff Mike
Shumate and the Potter County Commissioners as defendants. (1) With the complaint,
Appellant filed an affidavit of inability to pay costs. The trial court dismissed the suit before
service of process pursuant to Chapter 14 of the Civil Practice and Remedies Code. See
Tex. Civ. Prac. & Rem. Code Ann. § 14.003(a)-(b) (Vernon 2002). Appellant appeals the
dismissal. We affirm the trial court's order.
Appellant complains of incidents that occurred when he was transferred from the
Jordan Unit in Pampa, Texas, to the Clements Unit located near Amarillo. Appellant was
in transit to the Montford Unit in Lubbock for medical evaluation. The first incident occurred
while he was being processed into the Clements Unit. He claims that an officer ordered him
to empty his shirt pocket. According to appellant, when he reached to retrieve his
identification card and a bottle of nitroglycerin pills, the officer knocked appellant's hand
down. Appellant had the bottle of pills in his hand as the officer removed the identification
card that remained in appellant's pocket. Appellant alleges that the officer accused him of
assault and ordered him handcuffed. He complains of injuries from the handcuffs and a fall
that occurred when he was pushed into a cell. Appellant alleges that his medication was
taken from him and thrown in the trash. He further alleges he suffered extreme emotional
distress.
The complaints against employees of the Jordan Unit arise from events that
allegedly occurred after appellant filed a grievance regarding the occurrences at the
Clements Unit. Appellant complains that he was threatened with retaliation and brought
before a prison disciplinary committee. Appellant asserts he was not given notice of the
hearing and was denied the opportunity to call witnesses to testify on his behalf.
As relief, appellant's pleadings requested "liberty, 25% of the total amount of
$300,000," and expunction of his criminal record "in exchange to drop this suit."
When an inmate files a lawsuit and an affidavit of inability to pay costs, the suit may
be dismissed if the court finds it is frivolous or malicious. Tex. Civ. Prac. & Rem. Code Ann.
§ 14.002. In determining whether a claim is frivolous or malicious, the court may consider
whether it has no arguable basis in law. Id. § 14.003(b)(2). Trial courts have broad
discretion to determine whether a case should be dismissed under Chapter 14. Retzlaff
v. Texas Dep't of Criminal Justice, 94 S.W.3d 650, 653 (Tex.App.-Houston [14th Dist.]
2002, pet. denied); Montana v. Patterson, 894 S.W.2d 812, 814-15 (Tex.App.-Tyler 1994,
no writ). We will not interfere with the exercise of that discretion absent proof the trial court
abused its discretion, acting arbitrarily or unreasonably in light of all the circumstances in
the case, without reference to any guiding rules and principles. Lewis v. Johnson, 97
S.W.3d 885, 886-87 (Tex.App.-Corpus Christi 2003, no pet.).
Appellant's pleadings provide no legal basis for the trial court to order a change in
appellant's confinement or to order expunction of his criminal record "in exchange" for
dropping the suit. These claims were properly dismissed as having no basis in law. We
address further only appellant's claim for damages for the alleged misconduct of TDCJ
employees and officials of the City of Amarillo and Potter County.
The Texas Department of Criminal Justice is a governmental unit of the State of
Texas. See Tex. Civ. Prac. & Rem. Code Ann. § 101.001(3)(A) (Vernon 2005). In Texas,
a governmental unit is immune from suit and liability unless the State consents. Dallas
Area Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex. 2003); Texas Dep't of Criminal
Justice v. Miller, 51 S.W.3d 583, 587 (Tex. 2001). Governmental immunity from suit defeats
a court's subject matter jurisdiction. Whitley, 104 S.W.3d at 542. In a suit against a
governmental unit, the plaintiff must affirmatively demonstrate the court's jurisdiction by
alleging a valid waiver of immunity. Id. To waive the State's sovereign immunity, a statute
or resolution must contain a clear and unambiguous expression of the Legislature's waiver
of immunity. See Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex. 2003).
Suits against government employees in their official capacity (2) are in fact claims
against the government. Ware v. Miller, 82 S.W.3d 795, 800 (Tex.App.-Amarillo 2002, pet.
denied); Friona Indep. Sch. Dist. v. King, 15 S.W.3d 653, 657 n.3 (Tex.App.-Amarillo 2000,
no pet.). See Brandon v. Holt, 469 U.S. 464, 471, 105 S. Ct. 873, 878, 83 L. Ed. 2d 878
(1985).
On appeal, appellant argues his pleadings asserted claims arising from the
employees' failure to follow Department regulations, the failure of medical personnel to
examine his injuries, to replace his nitroglycerine tablets, and to take photographs,
employees' failure to call supervisors, and their failure to use a video camera. He further
argues his suit alleged a cause of action for the negligent misuse of medical and other
records, and a cause of action for malicious prosecution, arising from the disciplinary action
taken against him. Allegations of non-use of tangible personal property are not within the
statutory waiver of the Tort Claims Act. Tex. Civ. Prac. & Rem. Code Ann. § 101.021(2)
(Vernon 2005). See, e.g., Texas Dep't of Criminal Justice v. Miller, 51 S.W.3d 583, 587-88
(Tex. 2001); Texas Natural Resource Conservation Comm'n v. White, 46 S.W.3d 864, 869
(Tex. 2001); University of Tex. Med. Branch v. York, 871 S.W.2d 175, 178-79 (Tex. 1994).
See also Cherry v. Texas Dep't of Criminal Justice, 978 S.W.2d 240, 242-43
(Tex.App.-Texarkana 1998, no pet.). Nor does the Tort Claims Act waive a governmental
unit's immunity from suits alleging the failure to follow its policies and procedures, or those
alleging malicious prosecution by its agents acting in their official capacity.
Further, where the purpose of a proceeding against state officials is to control an
action of the State or subject it to liability, it is a suit against the State within the rule of
immunity of the State from suit. Griffin v. Hawn, 161 Tex. 422, 424, 341 S.W.2d 151, 152
(1960). Based on his contentions on appeal, we must conclude the trial court reasonably
could have decided that all appellant's claims against the employees of TDCJ asserting
damages under state law are barred by the State's immunity from suit.
Appellant's brief alleges he has a tort claim for retaliation under the Eighth
Amendment to the United States Constitution and 42 U.S.C.A. § 1983. Section 1983
provides a remedy when any "person" acting under color of state law deprives another of
rights, privileges, or immunities protected by the United States Constitution or laws. 42
U.S.C.A. § 1983 (West 2003). See Thomas v. Collins, 960 S.W.2d 106, 109
(Tex.App.-Houston [1st Dist.] 1997, writ denied). Neither a state nor its officials acting in
their official capacities are "persons" under section 1983. Will v. Michigan Dep't of State
Police, 491 U.S. 58, 71, 109 S. Ct. 2304, 2312, 105 L. Ed. 2d 45 (1989). Appellant's claims
against the employees pursuant to 42 U.S.C.A. § 1983 therefore must fail.
Appellant's tort and Eighth Amendment complaints against Amarillo's chief of police
and mayor, and Potter County's sheriff and commissioners, are based on his assertions
that Potter County provided inadequate training of officers. Appellant's pleadings fail to
establish a connection between his complaints and the City of Amarillo, Potter County, or
their employees. That some of the incidents occurred at the Clements Unit located in
Potter County is not material since the Clements Unit is operated and staffed by the Texas
Department of Criminal Justice. Those claims were properly dismissed as having no basis
in law.
Appellant also asserted claims in the trial court based on other constitutional and
statutory provisions. Appellant's brief does not contend the trial court abused its discretion
by dismissing those claims, nor does the brief contain any argument or authority regarding
them. He has waived them on appeal. Generally, we may not reverse a trial court's
judgment absent properly assigned error. Pat Baker Co., Inc. v. Wilson, 971 S.W.2d 447,
450 (Tex. 1998) (per curiam). The Texas Rules of Appellate Procedure apply with equal
force to pro se litigants and licensed attorneys. Greenstreet v. Heiskell, 940 S.W.2d 831,
834 (Tex.App.-Amarillo 1997, no writ). Those rules require an appellant's brief to contain
a clear and concise argument for the contentions made, with appropriate citations to
authorities and to the record. Tex. R. App. P. 38.1(h). Appellate issues are waived when
an appellant's brief contains no citation to authority or substantive discussion of how the
trial court erred. See Knie v. Piskun, 23 S.W.3d 455, 460 (Tex.App.-Amarillo 2000, pet.
denied).
In his brief on appeal, appellant also asserts the liability of the defendants under
statutes not mentioned in his pleadings in the trial court. Review of issues on appeal is
limited to those asserted in the trial court. Tex. R. App. P. 33.1. See In re Vega, 10 S.W.3d
720, 722 (Tex.App.-Amarillo 1999, no pet.).
Finding the trial court's dismissal of appellant's suit was not an abuse of its
discretion, we affirm its order.
James T. Campbell
Justice
1.
" " '
2. Language in appellant's trial court pleadings indicates he sued at least some
defendants in their individual capacities. As we understand appellant's brief in this court,
however, his contention here is that the State employees, although sometimes acting
contrary to TDCJ policy, were acting in their capacity as government employees.
|
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|
540 U.S. 1068
BROWNv.UNITED STATES.
No. 03-7278.
Supreme Court of United States.
December 1, 2003.
1
Appeal from the C. A. 4th Cir.
2
Certiorari denied. Reported below: 49 Fed. Appx. 432.
|
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|
Filed 11/30/15 P. v. Howard CA1/1
Reposted to provide correct version
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION ONE
THE PEOPLE,
Plaintiff and Respondent,
A139179
v.
DANIEL HOWARD, (Alameda County
Super. Ct. No. H53333B)
Defendant and Appellant.
A jury convicted defendant Daniel Howard of one count of first degree murder
and one count of conspiracy to commit murder based on his participation in the 2010
killing of 17-year-old Justice Afoa, although it found untrue an allegation that Howard
personally used a knife during the murder.1 It also convicted Howard of two counts of
attempted premeditated murder, one count of criminal threats, and one count of simple
kidnapping based on his attempt in 2012 to hang his pregnant girlfriend, A.R., from a
tree.2
After the trial court determined that a prior conviction for assault with a firearm
constituted a strike, it sentenced Howard to prison for an indeterminate term of 70 years
1
The knife-use allegation was made under Penal Code section 12022, subdivision (b)(1).
All further statutory references are to the Penal Code unless otherwise noted.
2
Howard was convicted under sections 187, subdivision (a) (first degree murder), 182,
subdivision (a)(1) (conspiracy to commit murder), 187, subdivision (a) and 664,
subdivision (a) (attempted premeditated murder), 422 (criminal threats), and 207,
subdivision (a) (kidnapping). In addition, the jury found true the enhancement
allegations that he committed the crimes of murder and conspiracy to commit murder for
the benefit of a criminal street gang under section 186.22, subdivision (b)(1).
1
to life and a determinate term of 11 years, four months. The indeterminate sentence was
composed of a term of 55 years to life for Afoa’s murder, a concurrent term of 55 years
to life for the conspiracy to commit murder, a consecutive term of 15 years to life for the
attempted murder of A.R., and a concurrent term of 15 years to life for the attempted
murder of her fetus. The determinate sentence was composed of a term of 16 months for
the criminal threats and 10 years for the kidnapping.3
On appeal, Howard claims that his convictions for first degree murder and
conspiracy to commit murder must be reversed because the trial court (1) improperly
admitted into evidence testimony from A.R. that Howard was involved in Afoa’s murder
and hearsay statements by coconspirators, (2) incorrectly instructed the jury, and
(3) committed cumulative error. We reject the two evidentiary claims but conclude that
both convictions must be reversed because of instructional errors. Accordingly, we do
not reach the claim of cumulative error, in which Howard seeks the same relief. On
remand, the People will have the option of retrying both charges. (See People v.
Hernandez (2003) 30 Cal.4th 1, 6-7.) If they elect not to retry the first degree murder
charge, the judgment will be modified to reflect a conviction of second degree murder.
Regarding the 2012 counts, Howard claims that the trial court improperly failed to
sever them from the 2010 counts and that insufficient evidence supported the kidnapping
conviction. We disagree and affirm those convictions.
Finally, Howard contends that the trial court erred under section 654 by not
staying the sentences for three convictions and that the determination he suffered a prior
3
We note some errors on the current abstract of judgment so they will be avoided on
remand. First, the abstract incorrectly indicates that Howard entered a plea to the counts
of criminal threats and kidnapping and that the term for criminal threats is 8 months
instead of 16 months. Second, the abstract incorrectly indicates that the indeterminate
term for the murder count is to run concurrently to the determinate sentence instead of
consecutively, as the trial court ordered. Finally, the abstract incorrectly indicates that
the term without enhancement time for the attempted-murder counts is 15 years to life
and that the second attempted-murder count is count 4 instead of count 5.
2
strike must be reversed.4 His section 654 claim lacks merit, but he is correct that the
strike determination cannot stand, which means the allegation must be retried.
I.
FACTS
A. The Murder of Justice Afoa.
1. The murder.
In 2010, members of the Newark Memorial High School football team were
engaged in an ongoing conflict with students affiliated with Norteño street gangs. That
September, 17-year-old Justice Afoa, one of the football players, and several of his
friends went to the home of another Newark Memorial student, Daniela G., at her
invitation. When they arrived, Daniela was not yet there, but her older brother, Rafael
Tovar, was outside and seemingly drunk.
Tovar, who was in his late twenties or early thirties at the time, is a self-admitted
member of FMT (Fremont Mexican Territory or Fremont), a Norteño gang. Tovar
confronted a member of Afoa’s group, a football player whose previous relationship with
Daniela had ended badly. Afoa pushed Tovar’s shoulder and told him to “calm down”
several times in an attempt to break up the fight, and Tovar responded by punching Afoa
in the face. Afoa punched him back, causing Tovar to fall. Several others in Afoa’s
group hit Tovar while he lay on the ground, and they then left with Afoa. Daniel R., a
close friend of Daniela’s who was also a student at Newark Memorial, testified that she
and Daniela arrived at Daniela’s house sometime later to find Tovar lying in the
driveway, bleeding and struggling to speak. He was taken to the hospital.
Howard, then 29 years old, had been good friends with Tovar and his family for
several years and also belonged to FMT. Tovar’s and Daniela’s sister testified that
4
Howard also contends, and the Attorney General concedes, that the proper sentence for
attempted premeditated murder was 14 years to life instead of 15 years to life. Although
we need not reach this issue because our reversal of the strike determination will result in
resentencing on the attempted-murder counts, on remand the trial court should resentence
him on those counts in compliance with section 664, subdivision (a) and, if the prior-
conviction allegation is found true again, section 667, subdivision (e)(1).
3
Howard told the sister sometime soon after the assault, “ ‘[D]on’t worry about it, we
already got boys on it.’ ” After leaving the hospital, Tovar was recorded agreeing with a
cousin in prison, also a Norteño, that Tovar and “Danny” were “going to take care of” the
situation. During the same telephone conversation, Daniela indicated to the cousin that
she was angry about her “brother get[ting] jumped” and wanted to retaliate.
About a week after the assault, Daniel R. again went to Daniela’s house.
Daniel R. saw two men leaving the house as she entered. One of them, whom Daniel R.
identified as Howard, was a man Daniela called “Danny” or “Danny Boy” and referred to
as “her brother.” Daniel R. was surprised to see Tovar, who was playing a game and
“had no bruises, no nothing,” because Daniela had told her he was in a coma. When
Daniel R. asked Daniela what was going on, Daniela said that Tovar “was working on
something and he didn’t want Daniela to open her mouth too quickly and start[] telling
people he was out of the hospital[, s]o they created a story of hi[s] being in [a] coma”
because he “didn’t want to get his hands dirty” and wanted to avoid suspicion “when
anything did happen.” Daniela also told Daniel R. that Howard “would be the one
handling it and Daniela would be the eyes.” A few days later, Daniel R. saw Howard in
the car with Daniela when Daniela arrived at Daniel R.’s apartment complex to retrieve a
book.
In early October 2010, on the same day as a Newark Memorial football game,
Howard sent a text message to Daniela that said, “ ‘Give me updates on your movements
and when you guys are leaving so I can coordinate. What time about is the game[]
over?’ ”5 After Daniela estimated when the game would end, Howard responded,
“ ‘[W]here are you going, Fremont or UC,’ ” an apparent reference to Union City, and
“ ‘[A]lso what’s he wearing? Let me know ASAP.’ ” Daniela texted back, “ ‘[Z]igzag
jacket with red green and black. Some white in front. It’s striped. Gray cargo shorts and
black high socks and a red hat. Hair pulled back in a ponytail. Jordans.’ ” She then sent
5
For the sake of simplicity, our discussion of the evidence assumes that the person to
whom a cell phone was registered was the person using it, though we recognize that cell
phone records do not definitively establish who used a phone at any given time.
4
another message appearing to indicate that her group was at an In-N-Out Burger
restaurant in Fremont. Howard later responded, “ ‘[O]nly one red hat I seen . . . white
boy with a black sweatshirt on. You in Fremont? . . . [¶] . . . [Y]ou still there[?]’ ”
Daniela responded, “ ‘[Y]eah. Where you at?’ ”
A few weeks later, on the same day as another Newark Memorial football game,
Howard and Daniela again exchanged text messages. Howard texted, “ ‘Make sure
you’re giving me updates, okay,’ ” and Daniela agreed. She then sent a text saying,
“ ‘Justice big dark ass is wearing a black sweater with his hair pulled back in a ponytail
with light jeans.’ ” Howard asked, “ ‘What color jeans? What else? Socks, shoes . . .[,]
hair band.’ ” Daniela responded with further details about Afoa’s appearance and
clothing. Shortly thereafter, Howard texted, “ ‘Let me know where you’re going
ASAP. . . . [¶] I just want to know everything and the location ASAP.’ ” Daniela
initially indicated she was going to In-N-Out Burger but then texted, “ ‘Don’t come. We
lost the game and the guys are not gonna come.’ ”
Afoa attended a house party with several other high school students the night
before Halloween. A friend of Afoa’s saw some “Mexican guys” attack Afoa by trying
to stab him with broken beer bottles. After fighting back, Afoa eventually ran away and
escaped. The two men then entered the car of another high school student, whom they
also stabbed.
The other stabbing victim was taken to a hospital, and later that night Afoa went
there. Daniela arrived soon after and had an angry verbal confrontation with Afoa. Her
cell phone records showed that earlier that night, she had sent a text message to Howard,
who did not respond, that said, “ ‘Justice is at a party that I’m at right now.’ ”
In early November, during an exchange of text messages with someone with the
last name Rosas, who was apparently another student, Daniela bragged that Tovar was
going to kill in retaliation for having been assaulted. When Rosas said he “ ‘heard
[someone] was gonna get stabbed or something like dat,’ ” Daniela responded, “ ‘Yeah,
that’s the nigga Justice. That’s the nigga that jumped Rafa.’ ” About a month later,
someone with the last name Lara sent Tovar a text message asking, “ ‘[S]up wit dat
5
murdah, primo?,’ ” to which Tovar responded that he would get in touch after he was
done with work.
Five days later, on December 15, 2010, Afoa was stabbed to death on a Newark
street corner a few blocks from Tovar’s and Daniela’s home. Around 3:40 p.m., soon
after school ended at Newark Memorial, witnesses saw two men attack Afoa as he said,
“I didn’t do anything.” The men, who were described as “Hispanic,” over six feet tall,
slender, and wearing black hooded sweatshirts, then ran from the area.6 Two of the
witnesses were shown photographic lineups containing photographs of Howard and
Tovar but did not identify either as being one of the men who murdered Afoa.
A Newark police detective with training in “the analysis of cell phone call records
and the towers that those cell phones hit” testified that Howard’s cell phone records
showed that Tovar called Howard approximately 20 minutes before Afoa’s murder, when
Howard was near his home in Fremont, and the call lasted six minutes. About a minute
later, Howard called Tovar back, and when that call ended, about ten minutes before the
murder, the records indicated that Howard was close to both Tovar’s and Daniela’s house
and the location of the murder. Tovar’s cell phone records indicated that Tovar was also
near his home and the murder’s location around the time of the murder. The detective
acknowledged that the tower data did not allow him to pinpoint exact locations but only
to determine locations within a radius of anywhere from less than a mile to three miles.
The only defense witness was Howard’s sister. She testified that in late 2010, she
and Howard were both living at their parents’ house in Fremont and helping to care for
their mother, who had Alzheimer’s disease. Howard “was there almost every day helping
feed [their mother], bathe her, give her medicine.” His sister denied seeing any gang
members, including Tovar, ever came to their house or seeing Howard display gang signs
or wear gang paraphernalia. She also stated that during this time period, Howard had
6
A stipulation was entered that at the time of trial in May 2013, Howard was five feet,
ten inches tall and weighed 175 pounds. He is Caucasian.
6
multiple phones and that she eventually stopped trying to call him because “other people
would answer or he would say he didn’t have a phone, he’d lost another phone.”
Howard’s sister testified that Howard was at home during the afternoon of Afoa’s
murder and gave two reasons for her recollection. She explained that after their mother
returned home from being hospitalized in late November, they started a log at the
direction of a nutritionist to track everything that she ate. An entry for 12:00 p.m. on the
day of Afoa’s murder indicated that their mother had been given “eggs and bacon, milk,
toast, jam.” Howard’s sister recalled that Howard had given their mother “almost a
plate” of bacon, which was against the nutritionist’s directions because hard foods could
cause choking, and their father had later yelled at him about it.
Howard’s sister also remembered that she had left work early that day and arrived
home around 1:00 p.m. She had some personal things to take care of before leaving on a
vacation, including a hair appointment at a salon in San Ramon scheduled for 5:30 p.m.
Before she left for the appointment, Howard helped her “get [their] mom squared away”
by bathing her, dyeing her hair, changing her clothes, and painting her nails. Howard’s
sister agreed that she was “absolutely sure” that Howard was at home with their mother
when she left for the appointment at 4:00 p.m. The jury was shown two documents from
the salon indicating that Howard’s sister had an appointment there at 5:30 p.m. on
December 15.
2. Gang evidence.
Detective Andrew Gannam of the Union City Police Department testified as a
gang expert. He explained that FMT is a street gang in Fremont with 400 to 450
members. Although FMT “is generally a Hispanic gang,” it also has members of other
races. FMT is a Norteño gang, meaning it is affiliated with the Nuestra Familia prison
gang. FMT’s “biggest rivals” are the various Sureño gangs, and as a Norteño gang, FMT
uses common Norteño signifiers like the color red and symbols that refer to the fact N is
the fourteenth letter of the alphabet. These include the number 14, the Roman numeral
XIV, and a grouping of one dot and four dots. FMT engages in extensive criminal
activity, including murder, assault, and robbery.
7
Detective Gannam opined that both Tovar and Howard were FMT gang members
at the time of Afoa’s murder. Tovar identified himself as a Norteño and FMT member
when being admitted to county jail in March 2010 and November 2012, “ha[d] been
arrested for gang-related crimes in the past,” had ongoing contact with other known gang
members, and had many gang-related tattoos, including “FMT,” “East Bay,” “XIV,” and
“X4.” In 2008, Tovar was found in possession of a drawing that included several gang-
related symbols, including the phrase “death before dishonor,” which Gannam explained
was a common gang slogan referring to the importance of honor in Norteño culture and
gang members’ belief that “[a]ny sign of disrespect towards them or their gang has to be
answered and answered violently.”
Howard had several tattoos suggestive of gang membership, including “Bay Area
Warrior,” the Bay Bridge, a Huelga bird (a symbol Norteños have co-opted from the
United Farm Workers), and a “key lock” indicating previous incarceration across his
chest, and “East Bay” and “Fremont” on his back. In addition, he was involved in
previous gang-related incidents. In February 2001, Howard, Tovar, and another Norteño
gang member were driving through an area of Fremont claimed by a Sureño gang and
engaged in a confrontation with two Sureños, who threw rocks at Howard’s vehicle.
Howard got out and chased one of the rival gang members while shooting at him. In May
2003, Howard confronted a woman in a Mountain View 7-Eleven store whom he
recognized as Sureño-affiliated. He threatened to assault her, “called her a ‘scrap
bitch,’ ” a derogatory term for Sureños, and said, “[I]t’s all about FMT.”
Howard also had a history of assisting other gang members. At some time after
Tovar’s and Daniela’s cousin was incarcerated, the cousin was taped describing how
Howard helped him to escape when there was an “active manhunt” for him involving
several different agencies. On another occasion in October 2012, police officers saw
Howard with another FMT member. While the other gang member, who had an
outstanding arrest warrant, fled, Howard “became aggressive” with one of the officers,
thus “assisting the individual who[ was] fleeing by creating a disturbance for the police
officers who [were] trying to catch him.” Although Howard claimed when arrested in
8
2012 that he was a “drop out” of FMT and no longer involved with the gang, Detective
Gannam opined that it was highly unlikely a drop out would be associating with members
of his prior gang because “[i]t’s very common for drop outs to be violently attacked and
killed.”
Finally, Detective Gannam testified that he believed Afoa’s murder was gang-
related. He explained that assaulting a gang member not only on his turf but at his actual
home is “an extreme sign of disrespect” to both the individual gang member and his gang
as a whole, “one that has to be answered violently.” The fact that Afoa and his friends
were significantly younger than Tovar, “an older guy, well respected within the gang,”
would have also increased the perceived need to retaliate. According to Gannam, by
killing Afoa, FMT members would “[raise] the level of respect back up” by showing that
“[y]ou jump them or you get into some sort of disrespectful issues with them and they’ll
kill you.” An additional indication that Afoa’s murder was gang related was that a
memorial at the site where he had died had been defaced with “XIV” markings on
pictures placed there, which indicated that Norteños were “claiming responsibility for the
murder . . . [and] disrespect[ing] their victim[].”
B. The Attempted Murders of A.R. and Her Unborn Child.
A.R. met Howard a few months before Afoa’s murder, and she and Howard began
dating. During the summer of 2012, she became pregnant with Howard’s child. Howard
soon started to question whether he was the baby’s true father.
In late November 2012, A.R. and her 17-year-old son, who both lived in San Jose,
spent the night at Howard’s house in Fremont. The next night, a Sunday, A.R. told
Howard that she wanted to go home, because she needed to do laundry and get ready for
the upcoming week. Howard said, “[N]o, you’re not going home,” and refused to give
her the keys to the vehicle they shared. The two went outside, and as A.R. kept asking to
go home, Howard forced her toward a shed on the property that was about 100 to 150 feet
away from the house’s front door.
Once they were inside the shed, Howard began asking A.R. whether Tovar was the
father of her child, questioning apparently prompted by information he received earlier
9
that day from a woman with whom Tovar had a sexual relationship. Howard tied A.R.’s
hands behind her back with plastic zip ties and continued to ask her if she had slept with
Tovar, which she repeatedly denied. A.R. testified that she felt “concerned” because she
wanted to go home but was not yet afraid. Even though several of Howard’s family
members were in the house, she did not call out because she thought the situation would
resolve itself, and she did not want to involve anyone else. At one point, she heard
Howard’s father coming toward the shed and asking Howard where some keys were, but
she remained silent as Howard told him it was not a good time.
After they had been in the shed for about 20 minutes, Howard took A.R. outside to
a tree about 40 feet away that had a rope hanging from it.7 Howard then told A.R. “he
was going to hang [her] from the tree.” In an interview with a police detective after the
incident, A.R. said that Howard threatened to kill both her and her son, although at trial
she claimed she could not remember whether any such threats were made.
A.R was seated on a canister near the tree that allowed her feet to touch the
ground. Howard knotted the rope, placed it around A.R.’s neck, and asked her again
whether she had had sex with Tovar. He then went inside the house, telling A.R. that he
was going to get a cigarette.
After Howard left, A.R. was able to grab her cell phone from her back pocket and
call 911. She told the operator that her boyfriend was trying to kill her and gave the
house’s address. After A.R. hung up, Howard reappeared and offered her a cigarette,
asking her “if [she] wanted [her] last cigarette.” A.R. testified that she felt “numb” and
was “just . . . waiting for the cops to come.”
Soon thereafter, A.R. saw two police officers in the front of the house and yelled
out to them. The officers went to the backyard and saw A.R. According to the officers’
testimony, Howard was standing behind A.R. with his arm around her, and a rope was
wrapped around A.R.’s neck and tied to the tree. It appeared that A.R. “was in danger of
7
A.R. testified that “there was always a rope on the tree” since she “first went into the
house” and later clarified that she had seen the rope on the tree before the day in question.
10
hanging,” and the officers ordered Howard to get away from her. The officers testified
that in response, Howard began winding more rope around A.R.’s neck. A.R., on the
other hand, claimed at trial that Howard “was taking the rope off [her] neck.” (Italics
added.)
As the officers approached, they saw Howard push A.R. toward a steep
embankment that was next to the tree and begin to run. A.R. was able to catch herself
and sink to her knees, which caused the rope to tighten around her neck but allowed her
to avoid a fall of several feet over the embankment that would likely have strangled her.
A.R. was taken to the hospital with bruises and abrasions but had not sustained any
serious injuries. Howard was soon apprehended in a neighbor’s yard.
In an interview with a district attorney investigator a couple days later, A.R.
agreed that she was “familiar with a football player being killed in Newark.” She
explained that she had seen a memorial to the player when driving to Tovar’s house and
that Howard later took a mural painted on wood from the memorial and cut it up to build
storage at a store he had opened. In addition, the night before the hanging incident, A.R.
and Howard went to the shed, where Howard smoked methamphetamine. A.R. stated
that Howard was crying and said, “[T]he kid disrespected Rafael’s sister,” which she
interpreted to mean that Tovar had killed the football player and Howard had helped.
II.
DISCUSSION
A. The Trial Court Did Not Err by Admitting A.R.’s Testimony that She
Interpreted Certain Statements by Howard to Mean He Was
Involved in Afoa’s Murder.
A.R. expressed her belief that Howard was involved in Afoa’s murder in both her
trial testimony and in a recording of her interview with the district attorney investigator,
which was played for the jury. Howard claims that these statements were improperly
admitted into evidence because they constituted inadmissible lay opinion. We disagree.
At trial, the prosecutor asked A.R. whether Howard had “sa[id] something to [her]
that left [her] with the impression that he had assisted . . . Tovar in killing . . . a high
school football player.” She responded that Howard had said, “[T]he kid disrespected his
11
sister,” and she “assumed” Howard meant Tovar’s sister although Howard “never said
any names.” After the prosecutor asked her why “that conversation left [her] with the
impression that [Howard] was telling [her] that [Tovar] killed the kid and [Howard]
assisted,” Howard objected that the question called for speculation, and the trial court
overruled the objection. Although she did not answer the objected-to question, A.R. later
agreed that she had told the district attorney investigator that the conversation “made
[her] believe that [Tovar] did kill the kid and that [Howard] assisted.”
An audio recording of A.R.’s interview with the district attorney investigator was
also played to the jury. In the interview, A.R. stated that she became aware Howard was
connected to the “football player [who] got killed” because Howard had taken a mural
from the victim’s memorial site. She also stated that “one time [Howard] was crying, and
he said that the kid disrespected [Tovar]’s sister. And . . . he didn’t use the exact words,
but he made me believe that [Tovar] did kill that kid and that [Howard] assisted.”
Finally, she told the investigator that Howard said “he was going to kill Rafael,” although
she testified at trial that she could not remember whether Howard had threatened Tovar.
A lay witness’s opinion testimony must be “[r]ationally based on the perception of
the witness . . . and . . . [h]elpful to a clear understanding of [the witness’s] testimony.”
(Evid. Code, § 800, subds. (a) & (b).) In addition, a witness must have “personal
knowledge of [a] matter” to testify about it. (Evid. Code, § 702.) Thus, “ ‘[a]n
examiner’s question asking a lay witness . . . to state an opinion not based on his or her
own observations [] calls for speculation and conjecture by the witness and is prohibited
by’ Evidence Code sections 702 and 800.” (People v. Rodriguez (2014) 58 Cal.4th 587,
631.) We review the trial court’s determination whether a question calls for speculative
lay opinion for an abuse of discretion. (People v. Thornton (2007) 41 Cal.4th 391, 429.)
The Attorney General contends Howard forfeited this claim because he objected
“on the ground of speculation, not improper lay opinion.” We disagree that this objection
amounted to a forfeiture. Howard’s position on appeal is that A.R.’s testimony was
improper lay opinion because it was speculative. Although other types of testimony may
12
also be speculative, Howard was not required to specify that the question called for lay
opinion testimony to fairly present the issue to the trial court.
Turning to the merits, we observe that the premise of Howard’s claim is that
A.R.’s testimony amounted to an opinion that his statement constituted “an admission
that [Howard] assist[ed] . . .Tovar in killing the football player.” But even if we accept
this characterization of A.R.’s testimony, we are not persuaded that the trial court abused
its discretion in overruling Howard’s objection.
Howard cites two cases in support of his argument that A.R.’s opinion was
speculative because it was based on her “impression.” In People v. Edwards (2013)
57 Cal.4th 658, the defendant made an offer of proof that a witness had an
“ ‘impression’ ” that the victim had removed the key to her apartment from its hiding
place because her daughter would sometimes enter the apartment without her permission,
providing “an alternate explanation for [the victim’s] missing jewelry” and undermining
the daughter’s credibility. (Id. at pp. 670, 674, 727.) In rejecting the defendant’s claim
that the witness’s “ ‘impression’ ” should have been admitted as a lay opinion, our state
Supreme Court stated that “[t]he opinion was wholly speculative, not ‘[r]ationally based
on the perception of the witness.’ ” (Id. at p. 727, quoting Evid. Code, § 800, subd. (a).)
Unlike the witness in People v. Edwards, supra, 57 Cal.4th 658, A.R. actually
testified at trial, and her statements to the district attorney investigator were also played
for the jury. Thus, several details to support her interpretation of Howard’s statement
were introduced, not just the bare assertion of what she thought the statement meant. The
evidence indicated that A.R. knew Howard and Tovar were close friends, that she already
associated Howard with Afoa’s killing because Howard had taken the mural from the
memorial site, that Howard was crying when he made the statement, and that Howard
was angry with Tovar because he believed Tovar might have impregnated A.R. These
details supported A.R.’s interpretation of Howard’s statement, and the trial court did not
abuse its discretion by determining that the interpretation was “[r]ationally based on
[A.R.’s] . . . perception.” (Evid. Code, § 800, subd. (a).)
13
Howard also cites People v. Thornton, supra, 41 Cal.4th 391, where, after defense
counsel asked a witness “if it appeared from the vehicle occupants’ behavior that they
knew each other,” the trial court sustained the prosecutor’s objection that the question
called for speculation. (Id. at p. 428.) The witness was a stranger who did not know the
vehicle’s occupants, the victim and the defendant. (Id. at p. 427.) In affirming the trial
court’s evidentiary decision, the Thornton court refused to “second-guess the [trial]
court’s ruling . . . that the question called for a conjectural lay opinion” and was thus
“not . . . ‘[h]elpful to a clear understanding of [the witness’s] testimony.’ ” (Id. at p. 429,
quoting Evid. Code, § 800, subd. (b).) But in contrast to the Thornton witness, who was
asked to opine on the relationship between two people she did not know, A.R. knew
Howard well and her interpretation of his statement was grounded on facts known to her.
Moreover, as did People v. Edwards, supra, 57 Cal.4th 658, Thornton affirmed a trial
court’s exclusion of evidence. Its holding that the trial court did not abuse its discretion
in excluding the evidence does not amount to a ruling that the trial court would have
necessarily abused its discretion if it had admitted the evidence.
Howard also relies on decisions establishing that a witness may not offer an
opinion on a defendant’s guilt or innocence. (People v. Torres (1995) 33 Cal.App.4th 37,
46-47; People v. Mason (1960) 183 Cal.App.2d 168, 173.) As Torres explains, however,
the rationale for this principle is not that such opinions are speculative—that is, not based
on the witness’s personal knowledge—but that they “are of no assistance to the trier of
fact . . . [because it] is as competent as the witness to weigh the evidence and draw a
conclusion on the issue of guilt.” (Torres, at p. 47.) Thus, these decisions are unhelpful
in evaluating whether A.R.’s opinion that Howard admitted to helping Tovar kill Afoa
was speculative. We conclude that the trial court did not abuse its discretion in admitting
the challenged testimony.
Even if we were to conclude that A.R.’s opinion testimony should not have been
admitted, we would also conclude that any such error was harmless. Howard had and
exercised the opportunity to cross-examine A.R. on the basis for her opinion. (See
People v. Bradley (2012) 208 Cal.App.4th 64, 84.) Moreover, there was significant other
14
evidence of Howard’s involvement in Afoa’s murder, particularly Howard’s exchange of
text messages with Daniela and cell phone records. Therefore, it is not reasonably
probable that the jury would have reached a more favorable result had the error not
occurred. (People v. Watson (1956) 46 Cal.2d 818, 836; Bradley, at p. 84.)
B. Howard’s Contention that Certain Statements by Tovar and Daniela
Were Improperly Admitted Hearsay Lacks Merit.
Howard contends the trial court erred by admitting hearsay evidence consisting of
statements made by (1) Tovar during the telephone conversation with his and Daniela’s
imprisoned cousin and in text messages with Lara; (2) Daniela during the same telephone
call; and (3) Daniela to Daniel R. and in text messages with Rosas. We disagree.
Before trial, the prosecution moved to admit the challenged evidence as statements
of coconspirators under Evidence Code section 1223 (section 1223) and as statements
against penal interest under Evidence Code section 1230 (section 1230). Howard argued
that a conspiracy had not been established and that the statements were made neither in
furtherance of such a conspiracy nor against penal interest. The trial court ruled the
evidence was admissible under both sections 1223 and 1230. In doing so, it specifically
found that Tovar and Daniela were unavailable as witnesses because they were awaiting
trial in separate matters.
Under section 1223, a hearsay statement by a coconspirator is admissible against a
defendant if “ ‘independent proof of a conspiracy [is] shown’ ” and the following facts
are demonstrated: “ ‘ “(1) that the declarant was participating in a conspiracy at the time
of the declaration; (2) that the declaration was in furtherance of the objective of that
conspiracy; and (3) that at the time of the declaration the [defendant] was participating or
would later participate in the conspiracy.” ’ ” (People v. Homick (2012) 55 Cal.4th 816,
871; § 1223.)
Under section 1230, a hearsay statement “by a declarant having sufficient
knowledge of the subject” is admissible as a statement against penal interest “if the
declarant is unavailable as a witness and the statement, when made, . . . so far subjected
[the declarant] to the risk of . . . criminal liability . . . that a reasonable [person] in [the
15
declarant’s] position would not have made the statement unless he [or she] believed it to
be true.” (§ 1230.) In addition to demonstrating that “ ‘the declarant is unavailable . . .
[and] that the declaration was against the declarant’s penal interest when made,’ ” the
party seeking to admit such evidence must show “ ‘that the declaration [is] sufficiently
reliable to warrant admission despite its hearsay character.’ ” (People v. Brown (2003)
31 Cal.4th 518, 535.)
We review the trial court’s evidentiary rulings for an abuse of discretion.
(People v. Waidla (2000) 22 Cal.4th 690, 717.) Applying this standard, we overturn
those rulings only if the trial court “exercised its discretion in an arbitrary, capricious, or
patently absurd manner that resulted in a manifest miscarriage of justice.” (People v.
Rodriguez (1999) 20 Cal.4th 1, 9-10.) The court’s “determination of preliminary facts”
necessary to establish an exception to the hearsay rule “will be upheld if supported by
substantial evidence.” (People v. Brown, supra, 31 Cal.4th at pp. 540-541.)
1. Howard’s claim as to Tovar’s statements fails.
Howard challenges the admission of two exchanges involving Tovar. The first,
during the September 2010 telephone call with Tovar’s and Daniela’s cousin in prison,
went as follows:
[COUSIN]: Hey, and was Danny in the house earlier?
[TOVAR]: Yeah.
[COUSIN]: Yeah?
[TOVAR]: Mm-hm.
[COUSIN]: So everything is good? Are you guys going to take care of
that?
[TOVAR]: Yeah, it’s all good.
Although Howard states in a subheading of his briefing that Tovar’s statements
during this call “did not further the conspiracy and were not against [Tovar]’s interests,”
Howard does not actually argue either point. (Capitalization omitted.) He has therefore
forfeited his challenge to this exchange. (See People v. Holford (2012) 203 Cal.App.4th
16
155, 186 [conclusory assertion of error forfeited where unsupported by “reasoned
argument or citation to authority”].)
The second challenged exchange consists of a text message from Lara to Tovar
stating, “[S]up wit dat murdah, primo?” and Tovar’s response stating, “I’m working. I’ll
hit you when I get out.” Howard argues the statements were inadmissible under section
1223 because they were not in furtherance of a conspiracy to kill Afoa and were
inadmissible under section 1230 because an admission of knowledge of a murder is not a
statement against penal interest. We conclude that the trial court did not abuse its
discretion by admitting the statements under section 1230, and we therefore do not
address whether they were also properly admitted under section 1223.
Although neither party raises the issue, we take a moment to address the threshold
issue of whether the two text messages are actually hearsay. Lara’s question does not
make any express assertion of fact. (See People v. Jurado (2006) 38 Cal.4th 72, 117 [“a
request, by itself, does not assert the truth of any fact . . . [and] cannot be offered to prove
the truth of the matter stated”].) A question may still be hearsay, however, “ ‘if such
evidence is offered to prove—not the truth of the matter that is stated in such statement
expressly—but the truth of a matter that is stated in such statement by implication.’ ”
(People v. Garcia (2008) 168 Cal.App.4th 261, 289.) For example, in People v. Morgan
(2005) 125 Cal.App.4th 935, the Court of Appeal held that a declarant’s question whether
the person who answered the defendant’s telephone had any drugs was hearsay because
the question was relevant only to the extent it implied the declarant wanted drugs and
believed they could be obtained by calling the defendant. (Id. at pp. 939, 943.)
Similarly, Lara’s question was relevant only to the extent it implied a murder was
planned and Tovar was involved. And although Tovar’s response was not introduced for
the truth of the matter directly asserted—that he was at work and would contact Lara
after he was done—it was also relevant to the extent it implied that Tovar was, in fact,
involved in a murder. Thus, we conclude both statements are hearsay.
In arguing that the statements were inadmissible under section 1230, Howard
relies on People v. Alexander (2010) 49 Cal.4th 846. In that case, our state Supreme
17
Court held that the trial court did not abuse its discretion by refusing to admit under
section 1230 a witness’s proffered testimony that a man other than the defendant had
“told [the witness] ‘he knew about’ the murder” with which the defendant was charged.
(Alexander, at pp. 855, 915-916.) Emphasizing that the witness claimed the other man
said only that he knew about the murder, not that he was involved in it, the Supreme
Court observed, “Merely knowing about a murder is not a crime, and it follows that
admitting to someone that one knows about a murder is not a statement against one’s
penal interest, or any other interest listed in section 1230.” (Id. at p. 916.)
We disagree with Howard that the statement here merely suggested that Tovar
knew about some unidentified murder and was therefore not against his penal interest. A
plausible interpretation of Tovar’s and Lara’s exchange, given that Afoa was killed five
days later and that there was other evidence Tovar planned to retaliate against him, is that
Tovar was actively planning Afoa’s murder. Indeed, Howard also argues that Tovar’s
statement to Lara “served exactly the image Tovar wanted to project—that he was a
tough gang member who would not let a prior act of disrespect go unavenged,” thus
acknowledging the possibility of viewing the exchange as indicating Tovar did not just
know about the murder but was involved in it. As a result, People v. Alexander, supra,
49 Cal.4th 846 is distinguishable, and the trial court did not abuse its discretion by
determining that the statements were against Tovar’s penal interest.
Even if the admission of Tovar’s and Lara’s exchange was error, it was harmless.
The text messages tended to establish the existence of a conspiracy to kill Afoa in which
Tovar was involved, but the conspiracy was supported by other significant and more
direct evidence. In addition, the exchange did not implicate Howard whatsoever. As a
result, we conclude it is not reasonably probable that the verdict would have been
different had the exchange between Tovar and Lara been excluded. (People v. Duarte
(2000) 24 Cal.4th 603, 618-619; People v. Watson, supra, 46 Cal.2d at p. 836.) And, to
the extent Howard argues that the evidence’s admission violated the federal
Constitution’s Confrontation Clause, we conclude that any error was harmless beyond a
reasonable doubt. (Chapman v. California (1967) 386 U.S. 18, 24.)
18
2. Any error in the admission of Daniela’s statements during the call
with her and Tovar’s cousin was harmless.
Howard next challenges the following exchange between Daniela and her and
Tovar’s cousin during the same September 2010 telephone call:
[COUSIN]: What happened?
[DANIELA]: Nothing. We just gotta find out who these people are.
[COUSIN]: Oh you guys don’t know who it was?
[DANIELA]: I know who it was. I just want to find out who the bitch was.
[COUSIN]: The bi- there was a girl there?
[DANIELA]: Yeah.[8]
...
[COUSIN]: But [Tovar] knows who it was, right?
[DANIELA]: Yeah, we all know who it was. I just want to find out who
the bitch is. ‘Cuz I mean about the dudes, I can’t do shit about the dudes
‘cuz it’s not like they can hit me back. But that bitch, I already got like
fuckin’ 10 girls to fuckin’ be with me. Or by myself I’m not even trippin’.
That bitch is fuckin’ gonna get it. She don’t even know. That bitch is not
just gonna stand there and watch my brother get jumped. I will fuckin’ kill
you. You don’t understand.
We need not determine whether the trial court properly admitted this exchange
because any error was harmless. That Daniela and Tovar knew who had beaten Tovar
was amply demonstrated by other evidence. And as Howard himself argues, Daniela’s
statements about her desire to determine which girl had been present and retaliate against
her “were remote from any conspiracy to retaliate against Afoa.” Taken as a whole,
Daniela’s statements were marginally relevant to the existence of a conspiracy to kill
Afoa and did nothing to implicate Howard in such a conspiracy. As a result, we conclude
it is not reasonably probable that the verdict would have been different had these
statements been excluded and that any error was harmless beyond a reasonable doubt.
8
At least one girl from Afoa’s group of friends was present during the assault on Tovar.
19
(Chapman v. California, supra, 386 U.S. at p. 24; People v. Duarte, supra, 24 Cal.4th at
pp. 618-619; People v. Watson, supra, 46 Cal.2d at p. 836.)
3. Daniela’s statements to Daniel R. and to Rosas were
admissible as statements against penal interest.
Finally, Howard contends that Daniel R.’s testimony about statements Daniela
made to her soon after Tovar was beaten and text messages Daniela exchanged with
Rosas were inadmissible hearsay. We conclude this evidence was admissible as
statements against penal interest under section 1230, and we therefore do not consider
whether it was also admissible as statements of a coconspirator under section 1223.
Howard challenges the admission of Daniel R.’s testimony that Daniela said “that
[Tovar] was working on something and he didn’t want Daniela to open her mouth too
quickly and start[] telling people he was out of the hospital. So they created a story of
hi[s] being in [a] coma so that when anything did happen they wouldn’t look at [him].
[¶] . . . [He] didn’t want to get his hands dirty.” Howard also challenges the admission
of Daniel R.’s testimony that Daniela “portrayed to [her] that [Howard] would be the one
handling it and Daniela would be the eyes pretty much,” which Daniel R. interpreted to
mean that Daniela “was in the streets with us, at school, events, parties. Daniela would
know.”
In addition, Howard challenges the admission of the text messages Daniela
exchanged with Rosas. After the two discussed what was apparently a fight at school, the
following exchange occurred:
[ROSAS]: So yo brother still gonna get those niggas back?
[DANIELA]: Yeee.
[ROSAS]: They gonna kill em?
[DANIELA]: Yeee.
[ROSAS]: For real?
[DANIELA]: Yeee. Ah, he a real OG.
[ROSAS]: Damn, yo fucken brother my role model. Ha ha. He hella
fuckin koo.
20
[DANIELA]: Haha, fasho. He’s mines too.
[ROSAS]: So da football players after you o what?
[DANIELA]: Yee aha, but they bitchass niggas.
[ROSAS]: Ayy, so why they think dat I was YNL.[9] I heard one of his
homies was gonna get stabbed or something like dat.
[DANIELA]: Yeah, that’s the nigga Justice. That’s the nigga that jumped
Rafa.
Howard argues that none of Daniela’s statements were against penal interest or
sufficiently trustworthy because they were merely the boasts of a teenage girl “trying to
impress her friends in an environment where gang[]life was glamorized and gang
members idolized.” First, we disagree that the statements were not against Daniela’s
penal interest, as they demonstrated participation in the conspiracy to kill Afoa. The
statements to Daniel R. implicated Daniela in both developing the coma story and helping
Howard carry out the plan. And the statements to Rosas, while not directly addressing
Daniela’s role, demonstrated her knowledge of specific details about the crime planned
and therefore also tended to suggest she was involved in the conspiracy.
Second, we disagree that the statements were insufficiently trustworthy. “ ‘To
determine whether [a particular] declaration [against penal interest] passes [section
1230’s] required threshold of trustworthiness, a trial court “may take into account not just
the words but the circumstances under which they were uttered, the possible motivation
of the declarant, and the declarant’s relationship to the defendant.” ’ [Citation.] We have
recognized that, in this context, assessing trustworthiness ‘ “requires the court to apply to
the peculiar facts of the individual case a broad and deep acquaintance with the ways
human beings actually conduct themselves in the circumstances material under the
exception.” ’ ” (People v. Duarte, supra, 24 Cal.4th at p. 614.) Although “ ‘[t]here is no
litmus test for the determination of whether a statement is trustworthy,’ ” “ ‘the most
reliable circumstance is one in which the conversation occurs between friends in a
9
A Newark police detective testified that “YNL” refers to a Norteño gang called Young
Newark Locos.
21
noncoercive setting that fosters uninhibited disclosures.’ ” (People v. Cervantes (2004)
118 Cal.App.4th 162, 175.) Here, Daniela made both sets of statements to friends in
private conversation. And both contained specific details of the conspiracy—the coma
story, the role Daniela was to play, the plan to stab Afoa—that were corroborated by
other evidence. Despite the boasting tone of some of Daniela’s statements, particularly to
Rosas, we cannot conclude that the trial court abused its discretion by determining these
statements were sufficiently trustworthy and admitting them under section 1230.
C. The Jury Instruction Permitting Howard to Be Convicted of First
Degree Murder Based on the Natural and Probable Consequences
Doctrine Requires Reversal of That Conviction.
Howard argues that his first degree murder conviction must be reversed because
the version of CALCRIM No. 403 given to the jury permitted him to be convicted of first
degree murder under the natural and probable consequences doctrine in contravention of
People v. Chiu (2014) 59 Cal.4th 155 (Chiu).10 We agree that the conviction cannot be
sustained.
The jury was instructed under CALCRIM No. 403 that, “[to] prove that [Howard]
is guilty of murder as alleged in Count 1,” the People had to prove: (1) he was “guilty of
Assault with a Deadly Weapon in violation of . . . section 245[, subdivision] (a)(1)”;
(2) “[d]uring the commission of Assault with a Deadly Weapon, a coparticipant in the
assault committed the crime of murder”; and (3) “[u]nder all of the circumstances, a
reasonable person in [Howard]’s position would have known that the commission of the
murder was a natural and probable consequence of the commission of the Assault with a
Deadly Weapon.” The instruction directed, “To decide whether the crime of Murder was
committed, please refer to the separate instructions . . . on that crime.” In addition, the
10
Chiu, supra, 59 Cal.4th 155 was decided after Howard filed his opening brief, and we
granted his request to submit supplemental briefing on the decision’s impact. Given our
conclusion that the instruction was erroneous under Chiu, we need not consider his
original claim that the instruction was erroneous because it failed to specify that he could
be convicted of first degree murder only if the jury found “that premeditated murder was
in fact a reasonably foreseeable consequence of assault with a deadly weapon.” (Italics
omitted.)
22
jury was instructed on the elements of assault with a deadly weapon under CALCRIM
No. 875, which was modified to note that “Assault with a Deadly Weapon is referred [to]
in Instruction 403.”
We review de novo whether a jury instruction correctly states the law. (People v.
Posey (2004) 32 Cal.4th 193, 218.) “Review of the adequacy of instructions is based on
whether the trial court ‘fully and fairly instructed on the applicable law.’ [Citation.] ‘ “In
determining whether error has been committed in giving or not giving jury instructions,
we must consider the instructions as a whole . . . [and] assume that the jurors are
intelligent persons and capable of understanding and correlating all jury instructions
which are given.” [Citation.]’ ” (People v. Ramos (2008) 163 Cal.App.4th 1082, 1088.)
The natural and probable consequences doctrine is a theory of vicarious liability
applicable to both conspirators and aiders and abettors. (Chiu, supra, 59 Cal.4th at
pp. 163-164; People v. Prettyman (1996) 14 Cal.4th 248, 261.) Under the doctrine, “a
conspirator is vicariously liable for the unintended acts by coconspirators if such acts . . .
are the reasonable and natural consequence of the object of the conspiracy.” (People v.
Hardy (1992) 2 Cal.4th 86, 188.) Similarly, an aider and abettor “ ‘ “is guilty of not only
the intended crime [target offense] but also of any other crime the perpetrator actually
commits [nontarget offense] that is a natural and probable consequence of the intended
crime.” ’ ” (Chiu, at p. 161.) The unintended crime is a “natural and probable
consequence” of the intended crime “if, judged objectively, the additional offense
was . . . a reasonably foreseeable consequence of the act [conspired to be committed or]
aided and abetted.” (Id. at pp. 161-162; People v. Zielesch (2009) 179 Cal.App.4th 731,
739.) Whether an offense is reasonably foreseeable is a factual issue for the jury to
decide. (Chiu, at p. 162; Zielesch, at p. 739.)
In Chiu, supra, 59 Cal.4th 155, our state Supreme Court held that “an aider and
abettor may not be convicted of first degree premeditated murder under the natural and
probable consequences doctrine. Rather, his or her liability for that crime must be based
on direct aiding and abetting principles.” (Id. at pp. 158-159, italics omitted.) We agree
with Howard that the given version of CALCRIM No. 403, which addresses the aiding-
23
and-abetting variety of that doctrine (People v. Canizalez (2011) 197 Cal.App.4th 832,
849) was erroneous under Chiu because it permitted him to be convicted of first degree
murder if the jury found Afoa’s murder was the natural and probable consequence of
Howard’s participation in assault with a deadly weapon. Nothing in the instruction
informed the jury that Howard could be convicted of only second degree murder based on
this theory of liability. To the contrary, the instruction referred to finding him “guilty of
murder as alleged in Count 1” (i.e., first degree murder), and it told the jury “[t]o decide
whether the crime of Murder was committed” based on the other instructions on murder
given, CALCRIM Nos. 520 and 521, which address both first degree and second degree
murder.
The Attorney General argues that there was no error because in Chiu, supra,
59 Cal.4th 155, the jury was instructed under CALCRIM Nos. 520 and 521 that the
degree of murder for which the defendant was liable depended on which degree of
murder the perpetrator committed (Chiu, at pp. 161-162), whereas here, the versions of
those instructions given referred to Howard. The Attorney General reasons that, as
CALCRIM No. 520 instructed the jury to decide first whether Howard committed murder
and then what degree of murder it was, the jury must have “resolve[d his] aiding and
abetting liability, if any, first, and then turn[ed] to CALCRIM No. 521 to decide the
degree.” In turn, as CALCRIM No. 521 instructed that first degree murder was
established only if Howard acted willfully, deliberately, and with premeditation, the
Attorney General posits that “it is not possible that the jury used someone else’s
premeditation and deliberation to find murder in the first degree.”
We cannot accept this reasoning. Chiu, supra, 59 Cal.4th 155 held that an aider
and abettor can never be found guilty of first degree murder based on the natural and
probable consequences doctrine. CALCRIM No. 403, the challenged instruction,
addresses the aiding-and-abetting variety of that doctrine, and we therefore fail to see
how the jury could have properly relied on that instruction, regardless of what the general
instructions on murder stated, to find Howard guilty of first degree murder. In any event,
it is unlikely that the jury interpreted the instructions as the Attorney General suggests.
24
The challenged instruction required a finding that “a coparticipant in the assault . . .
committed the crime of murder” and directed the jury that “[t]o decide whether the crime
of Murder was committed” by “refer[ring] to the separate instructions . . . on that crime”
(i.e., CALCRIM Nos. 520 and 521). (Italics added.) The jury could not have reasonably
believed it was supposed to determine whether a coparticipant committed murder and
then consider Howard’s mind state in determining the degree of murder committed by the
other person.
We therefore turn to consider whether the error was prejudicial, and we conclude
that it was. “When a trial court instructs a jury on two [or more] theories of guilt, one [or
more] of which was legally correct and one legally incorrect, reversal is required unless
there is a basis in the record to find that the verdict was based on a valid ground.” (Chiu,
supra, 59 Cal.4th at p. 167.) If we cannot “conclude beyond a reasonable doubt that the
jury based its verdict on [a] legally valid theory,” then we must reverse Howard’s
conviction for first degree murder. (Ibid.)
The Attorney General argues there was no prejudice because Howard’s conviction
of the conspiracy count established he had the intent to commit first degree murder and
the jury therefore must have “based its verdict on the legally valid theory that
[Howard] . . . necessarily [directly] aided and abetted premeditated murder.” She relies
on Chiu, in which our state Supreme Court indicated that “[a]iders and abettors may still
be convicted of first degree premeditated murder based on direct aiding and abetting
principles.” (Chiu, supra, 59 Cal.4th at p. 166.) The argument fails for two reasons.
First, as we discuss in section II.D., the jury was erroneously instructed on the conspiracy
count as well. Thus, we cannot rely on any finding the jury might have made in returning
that conviction. Second, unlike in Chiu (id. at pp. 166-167), the jury here was never
instructed on direct aiding and abetting liability. Instead, the only instruction on aiding
and abetting given was CALCRIM No. 403, despite the fact that the Bench Notes to that
instruction direct that CALCRIM Nos. 400 (Aiding and Abetting: General Principles) and
401 (Aiding and Abetting: Intended Crimes) are to be given before CALCRIM No. 403
is. (Bench Notes to CALCRIM No. 403.) In short, the jury was never given the option to
25
convict Howard of first degree murder on the theory he directly aided and abetted that
crime.
The jury did receive correct instructions, CALCRIM Nos. 520 and 521, on the
theory that Howard was a direct perpetrator of the murder. But the jury could not have
accepted this theory since it found not true the allegation that he personally used a deadly
weapon during the murder’s commission. And, as we shall now explain, the other
instructions the jury received addressing that crime presented invalid theories of liability.
As mentioned above, the natural and probable consequences doctrine also applies
to conspirators. The jury was instructed under CALCRIM No. 417—the instruction on
liability for the acts of coconspirators—that it could find Howard guilty based on his
participation in a conspiracy to commit either murder or assault with a deadly weapon.
As we discuss further in section II.D., however, the instruction incorrectly stated that it
applied to the charge of conspiracy to commit murder, not the murder charge itself. In
other words, the jury was instructed that it could find Howard guilty of conspiracy to
commit murder if he conspired to commit murder or assault with a deadly weapon—not,
as was intended, that he was guilty of murder if that crime was a natural and probable
consequence of either type of conspiracy.11 Moreover, even if the instruction had
referred to the proper charge, it may well have violated Chiu, supra, 59 Cal.4th 155
because it would have permitted Howard to be convicted of first degree murder as a
natural and probable consequence of a conspiracy to commit assault with a deadly
weapon. Although we need not decide the issue here, we note that another Court of
Appeal has extended Chiu to the conspiracy variety of the natural and probable
consequences doctrine. (People v. Rivera (2015) 234 Cal.App.4th 1350, 1355-1356
11
The first sentence of CALCRIM No. 417, which was read to the jury here, states, “A
member of a conspiracy is criminally responsible for the crimes that he or she conspires
to commit, no matter which member of the conspiracy commits the crime.” Read in
isolation, this statement would seem to permit the jury to conclude Howard was guilty of
murder if it found he conspired to commit that crime. Given that the instruction refers to
proving his guilt of only the conspiracy charge, however, we are unable to conclude that
the jury relied on this sentence to convict him of first degree murder.
26
[reversing conviction for first degree murder where jury instructed that conviction could
be based on finding that murder was natural and probable consequence of conspiracy to
discharge firearm at occupied vehicle].)
Finally, the only other instruction involving the murder charge was also incorrect.
The trial court gave a version of CALCRIM No. 415 that provided, “I have explained that
[Howard] may be guilty of a crime if he either [sic] commits the crime. He may also be
guilty if he is a member of a conspiracy. [¶] Defendant Daniel Howard is charged in
Count 1 with murder in violation of Penal Code section 187. [¶] To prove that the
defendant is guilty of this crime, the People must prove [the elements of a conspiracy to
commit murder].”12 CALCRIM No. 415 is an instruction on the crime of conspiracy,
however, not murder. Thus, to the extent the instruction’s reference to “this crime” can
be interpreted to refer to the murder count, the instruction erroneously permitted the jury
to convict Howard of murder if it found he conspired to commit murder, even though the
two crimes are distinct and have different elements.13 (See People v. Swain, supra,
12 Cal.4th at p. 603 [murder requires killing whereas conspiracy “ ‘fixes the point of
legal intervention at [the time of] agreement to commit a crime’ ”].)
In sum, we are unable to conclude beyond a reasonable doubt that the jury based
the murder conviction on a legally valid theory. We therefore reverse Howard’s
conviction for first degree murder.14 Because the instructional error Howard identified
affects only the degree of murder of which he was convicted, the People will have the
12
We requested and received supplemental briefing from the parties on whether this
instruction was erroneous.
13
Even if the Attorney General were correct that there is no reasonable likelihood the
jury interpreted the instruction to refer to the murder count instead of the conspiracy
count, we agree with Howard that CALCRIM No. 415 applies only to conspiracies to
commit crimes other than murder and should not have been given at all. (See People v.
Cortez (1998) 18 Cal.4th 1223, 1226-1227; People v. Swain (1996) 12 Cal.4th 593, 602-
603; Bench Notes to CALCRIM No. 415.)
14
In light of this conclusion, we need not consider Howard’s claim that his conviction of
first degree murder must be reversed because the trial court failed to instruct the jury on
the lesser included offense of second degree murder.
27
option of either retrying him for first degree murder or accepting a modification of the
judgment to reflect a conviction for second degree murder.15 (Chiu, supra, 59 Cal.4th at
p. 168; People v. Edwards (1985) 39 Cal.3d 107, 118.)
D. Howard’s Conviction for Conspiracy to Commit Murder Must Be
Reversed Because of Prejudicial Instructional Error.
Howard claims that his conspiracy conviction must be reversed because the trial
court erred by instructing the jury “that it could convict [him] of conspiracy to commit
murder as a natural and probable consequence of a conspiracy to commit an assault with
a deadly weapon.” (Italics omitted.) He argues that although a coconspirator “is
vicariously liable for the foreseeable, but unintended completed crimes committed by
other conspirators, . . . the liability does not extend to other possible conspiracies.” We
agree.
As mentioned above, the jury was instructed under CALCRIM No. 417 on liability
for the acts of coconspirators. But instead of being instructed that Howard was guilty of
the murder charge if the killing was a natural and probable consequence of a conspiracy
to commit murder or assault with a deadly weapon in which he participated, the jury was
instructed that he was “guilty of the crime charged in Count 2”—the conspiracy charge—
if (1) he “conspired to commit one of the following crimes: Assault with a Deadly
Weapon or Murder”; (2) “[a] member of the conspiracy committed Assault with a Deadly
Weapon to further the conspiracy”; and (3) “Murder was a natural and probable
consequence of the common plan or design of the crime that [Howard] conspired to
commit.” When reading the instruction, the trial court initially correctly referred to
“Count 1,” the murder charge, but it then stated, “I think there’s an error because I don’t
think that’s alleged in Count 1. I think conspiracy is Count 2.”
15
At oral argument, Howard argued that we should simply reverse the murder conviction
instead of permitting a modification to second degree murder, because the instructional
errors and alleged evidentiary errors collectively denied him due process. We disagree,
and we decline his invitation to impose such a remedy for error under Chiu, supra,
59 Cal.4th 155.
28
Thus, the jury was instructed that it could find Howard guilty of conspiracy to
commit murder if he conspired to commit assault with a deadly weapon, a coconspirator
committed assault with a deadly weapon to further the assault conspiracy, and murder
was a natural and probable consequence of the assault conspiracy. This was legally
erroneous, because a conspiracy to commit murder requires proof of intent and agreement
to murder. (People v. Cortez, supra, 18 Cal.4th at p. 1232.)
The Attorney General claims there was no error because the jury was properly
instructed under CALCRIM No. 563 “that in order to find [Howard] . . . guilty of
conspiracy to commit murder it had to find that [he and his coconspirators] agreed to
commit that offense and possessed the specific intent to kill.” Although it is true that the
jury received the correct instruction on the elements of conspiracy to commit murder, the
reference to the wrong count in CALCRIM No. 417 transformed that instruction into one
on an alternate theory of liability for conspiracy to commit murder. When instructions
are given on multiple theories of liability for the same crime, a reasonable jury would not
conclude that it had to find the requirements of every theory met to return a conviction for
that crime.
The Attorney General also argues that there was no error because “the jury had no
cause to find that CALCRIM No. 417 applied in this case,” as that instruction involves
liability for “an independent criminal act by a coconspirator,” whereas Tovar, Daniela,
and Howard “clearly planned the most violent and lethal retaliation [for Tovar’s beating]
possible: murder.” This argument really goes to the issue of prejudice, not error: the
likelihood that the jury relied on CALCRIM No. 417 has nothing to do with whether the
instruction correctly stated the law. We conclude that the trial court erred by referring to
the wrong count in the version of CALCRIM No. 417 it gave.
In assessing whether the error was prejudicial, our task is again to determine
whether “there is a basis in the record to find that the verdict was based on a valid
ground” instead of the legally incorrect theory. (Chiu, supra, 59 Cal.4th at p. 167.) And
if we cannot “conclude beyond a reasonable doubt that the jury based its verdict on [a]
29
legally valid theory,” then we must reverse Howard’s conviction for conspiracy to
commit murder. (Ibid.)
The Attorney General argues that any error was harmless because “the evidence
overwhelmingly established that [Howard] and his coconspirators specifically intended to
kill . . . Afoa.” We disagree. The evidence that Howard agreed to a plan to kill Afoa was
far from overwhelming. Howard’s own statements implicating him in the conspiracy,
particularly the text messages Howard sent to Daniela, strongly suggest that he intended
to harm Afoa in some way, but none of the evidence directly demonstrates that he
intended to kill Afoa. And although the evidence that Tovar and Daniela planned to kill
Afoa was strong, there was likewise no direct evidence that Howard knew that was their
aim. In any event, any evidence tending to establish a conspiracy to commit murder was
not inconsistent with the existence of a conspiracy to commit assault with a deadly
weapon. Thus, regardless of the strength of the evidence that Howard conspired to
commit murder, that evidence would not provide a basis for concluding beyond a
reasonable doubt that the jury convicted him of the conspiracy count under CALCRIM
No. 563—the only correct instruction on the conspiracy count given—instead of an
erroneous instruction.
The Attorney General also argues there was no prejudice because the jury found
Howard guilty of first degree murder, and the finding of premeditation “is inconsistent
with a plan to assault rather than kill.” This contention fails because we reverse
Howard’s murder conviction. As we are unable to perceive any other basis on which to
conclude that Howard was found guilty of conspiracy to commit murder on a valid theory
of liability, we conclude the conspiracy conviction must be reversed as well.
E. The Trial Court Properly Declined to Sever the 2012 Counts from
the 2010 Counts, and Joinder Did Not Deprive Howard of a Fair
Trial.
Howard claims that his convictions of the 2012 attempted murders of A.R. and her
fetus must be reversed because the trial court erroneously denied his motion to sever
those and the related 2012 counts from the counts related to Afoa’s 2010 murder. He
30
also claims that even if the court properly denied the motion, his convictions of the 2012
counts must be reversed because “joinder . . . resulted in a gross unfairness and denial of
due process.” We disagree.
Before trial, Howard moved to sever the 2010 counts from the 2012 counts. He
argued that severance was required because there was no overlap in the evidence, the
gang evidence was inflammatory, and the prosecution’s cases as to both sets of counts
were weak. The prosecution responded that joinder was proper under section 954
because the crimes were of the same class and Howard failed to show sufficient
prejudice, since A.R.’s statements about Afoa’s murder were cross-admissible, both sets
of counts were equally inflammatory, and both cases were strong.
The trial court denied the motion. It found that “[t]here [was] cross-admissibility
of the evidence because there [was] going to have to be evidence of [Howard and
Tovar’s] relationship, which would include the gang affiliation, among other things, and
their relationships with respect to [Afoa’s murder] as it related to the reason why
[Howard] would commit the second crime and his relationship with Tovar as to his belief
that in fact [Tovar] was the one who impregnated [A.R.].” The court also “disagree[d]”
with the defense’s argument about the cases’ relative merits.
Joinder of criminal counts for trial is permitted by section 954, which provides,
“An accusatory pleading may charge two or more different offenses connected together
in their commission, or different statements of the same offense, or two or more different
offenses of the same class of crimes or offenses, under separate counts.” (§ 954;
People v. Soper (2009) 45 Cal.4th 759, 771-772 (Soper).) A trial court, “in the interests
of justice and for good cause shown, may in its discretion order that the different offenses
or counts set forth in the accusatory pleading be tried separately or divided into two or
more groups and each of said groups tried separately.” (§ 954.)
Howard does not contend that the counts’ joinder violated section 954. Instead, he
argues that severance was necessary because of the joinder’s prejudicial effect. A
defendant seeking severance on this basis has the burden to show “ ‘a substantial danger
of undue prejudice’ ” that outweighs “ ‘countervailing considerations [of efficiency and
31
judicial economy].’ ” (Soper, supra, 45 Cal.4th at p. 773, italics omitted.) “First, we
consider the cross-admissibility of the evidence in hypothetical separate trials. [Citation.]
If the evidence underlying the charges in question would be cross-admissible, that factor
alone is normally sufficient to dispel any suggestion of prejudice and to justify a trial
court’s refusal to sever properly joined charges.” (Id. at pp. 774-775.) Only “[i]f we
determine that evidence underlying properly joined charges would not be cross-
admissible [do] we proceed to consider” the issue whether a substantial danger of
prejudice outweighs countervailing considerations in favor of joinder. (Id. at p. 775,
italics in original.)
We review the denial of a severance motion for an abuse of discretion, considering
the record before the trial court at the time it ruled. (Soper, supra, 45 Cal.4th at p. 774.)
“ ‘[E]ven if a trial court’s ruling on a motion to sever is correct at the time it is made,’ ”
however, “ ‘a reviewing court still must determine whether, in the end, joinder of the
counts . . . for trial resulted in gross unfairness depriving the defendant of due process of
law,’ ” which requires us to “[c]onsider[] the proceedings as a whole.” (Id. at pp. 783-
784.)
Howard claims the trial court incorrectly determined that the gang evidence was
cross-admissible. In general, “evidence of gang membership and activity,” like any other
evidence, “is admissible if it is logically relevant to some material issue in the case, other
than character evidence, is not more prejudicial than probative[,] and is not cumulative.”
(People v. Albarran (2007) 149 Cal.App.4th 214, 223.) Such evidence may be relevant
to establish a variety of facts “other than criminal propensity,” including motive. (Id. at
pp. 223-224; see Evid. Code, § 1101.) “Nonetheless, even if [such] evidence is found to
be relevant, the trial court must carefully scrutinize [it] before admitting it” because of its
heightened potential to have an “inflammatory impact on the jury.” (Albarran, at
pp. 223-224; see Evid. Code, § 352.)
Although Howard makes the cursory assertion that “the gang evidence would not
likely have been admissible” under Evidence Code section 1101 in a trial involving only
the 2012 counts, he offers no reason that the trial court’s determination that that evidence
32
was relevant to establish motive was erroneous. Instead, he focuses on the issue of undue
prejudice, arguing that he “and Tovar were life-long friends and neighbors for much of
their lives” and “[a]dditional explanation of the reason for [Howard’s] anger” in the form
of their affiliation with the same gang was unnecessary.
Moreover, in focusing on the gang evidence, Howard fails to address other
evidence that the trial court also found cross-admissible. The court specified that it was
denying the motion to sever based on the cross-admissibility of evidence of Howard’s
and Tovar’s relationship generally, including the circumstances of Afoa’s murder, not
just the cross-admissibility of evidence of Howard’s and Tovar’s gang affiliation. Thus,
even if the court’s determination that the gang evidence was cross-admissible had been
incorrect, Howard has offered no reason to upset the court’s ruling as to the other
evidence of his and Tovar’s relationship. We conclude the court properly denied the
motion to sever on the basis of the evidence’s cross-admissibility.
Having determined that the trial court did not abuse its discretion when ruling, we
turn to consider Howard’s position that joinder nevertheless violated his due process
rights based on the proceedings at trial. He claims that “[j]oinder resulted in admission of
a significant amount of emotionally charged gang evidence” that “was likely the pivotal
evidence” resulting in the jury’s determination that Howard intended to kill A.R., not just
scare her. We agree that the gang evidence tended to show that Howard was capable of
forming the intent to kill, particularly given the incident in which he chased a rival gang
member while shooting at him. We can also see how Howard’s gang membership may
have been suggestive, based on Detective Gannam’s testimony that gang members tend
to retaliate violently when they are disrespected, of an intent to kill A.R. in particular out
of a belief that she had cheated with Tovar.
We disagree, however, that the gang evidence was likely determinative on the
attempted-murder counts. Howard bound A.R.’s hands, marched her to a tree, tied a rope
hanging from it around her neck, and pushed her toward a steep embankment, resulting in
her nearly being hanged. Moreover, there was evidence that in the course of this
incident, Howard specifically threatened to kill A.R. and asked her whether she wanted
33
her “last cigarette.” Thus, even without Detective Gannam’s testimony, there was strong
evidence that Howard intended to kill A.R. We conclude Howard has failed to meet “his
high burden of establishing that the trial was grossly unfair and that he was denied due
process of law” as a result of the joinder of the 2010 and 2012 counts. (Soper, supra,
45 Cal.4th at pp. 783-784.)
F. Sufficient Evidence Supports Howard’s Kidnapping Conviction.
Howard contends that his conviction for kidnapping A.R. must be reversed
because there was insufficient evidence of the element of asportation. We are not
persuaded.
Howard was convicted of simple kidnapping under section 207, which provides
that “[e]very person who forcibly, or by any other means of instilling fear, steals or takes,
or holds, detains, or arrests any person in this state, and carries the person into another
country, state, or county, or into another part of the same county, is guilty of kidnapping.”
(§ 207, subd. (a); People v. Bell (2009) 179 Cal.App.4th 428, 435.) The elements of
simple kidnapping are: “ ‘(1) a person was unlawfully moved by the use of physical
force or fear; (2) the movement was without the person’s consent; and (3) the movement
of the person was for a substantial distance.’ [Citation.] This last element, . . . that the
victim be moved a substantial distance, is called the ‘asportation’ element.” (Bell, at
p. 435.)
A distance is “ ‘substantial’ ” if it is “ ‘more than slight or trivial.’ ” (People v.
Martinez (1999) 20 Cal.4th 225, 237 (Martinez).) Whether movement is substantial is
determined under “the totality of the circumstances,” and “in a case where the evidence
permitted, [a] jury might properly consider not only the actual distance the victim is
moved, but also such factors as whether that movement increased the risk of harm above
that which existed prior to the asportation, decreased the likelihood of detection, and
increased both the danger inherent in a victim’s foreseeable attempts to escape and the
attacker’s enhanced opportunity to commit additional crimes.” (Ibid.) In addition,
where, as here, the kidnapping is linked to another crime, “the jury should be instructed
to consider whether the distance [the] victim was moved was incidental to the
34
commission of [the associated] crime in determining the movement’s substantiality.”
(Ibid.) But although the jury may consider these additional factors, “it may convict of
simple kidnapping without finding . . . any other contextual factors . . . . At the same
time, . . . contextual factors, whether singly or in combination, will not suffice to
establish asportation if the movement is only a very short distance.” (Ibid.)
To evaluate Howard’s claim, “ ‘we review the whole record to determine
whether . . . [there is] substantial evidence to support the verdict . . . such that a
reasonable trier of fact could find the defendant guilty beyond a reasonable doubt.
[Citation.] In applying this test, we review the evidence in the light most favorable to the
prosecution and presume in support of the judgment the existence of every fact the jury
could reasonably have deduced from the evidence. . . . “We resolve neither credibility
issues nor evidentiary conflicts; we look for substantial evidence.” ’ ” (People v.
Manibusan (2013) 58 Cal.4th 40, 87.)
Initially, we must address which movement of A.R. is at issue. Howard’s claim
focuses on the 40-foot movement from the shed to the tree, but the Attorney General
argues that we may also consider the earlier 100- to 150-foot movement from the house
to the shed.
We agree with Howard that the prosecutor elected to rely on only the 40-foot
movement. “When an accusatory pleading charges the defendant with a single criminal
act, and the evidence presented at trial tends to show more than one such unlawful act,
either the prosecution must elect the specific act relied upon to prove the charge to the
jury, or the [trial] court must instruct the jury that it must unanimously agree that the
defendant committed the same specific criminal act.” (People v. Melhado (1998)
60 Cal.App.4th 1529, 1534.) In closing argument, after mentioning the elements of
simple kidnapping, the prosecutor argued as follows:
“Here we have [A.R.’s] testimony that she went from the house to
the shed, but [Howard] had her hands behind her back and he was forcing
her out there. I know she says she kind of consented to walk out there, but
what she was really saying is I didn’t want to be out in that shed. She
didn’t want to continue the barrage of what was going on. But when she
35
was moved from the shed to the tree she was moved a substantial distance.
You saw the diagram of the officer where he put the shed. It wasn’t trivial
and it wasn’t slight, but the main thing about it was it allowed for [Howard]
to effectuate his plan. And the movement itself has to, in essence, make it
much more dangerous for the victim in that the peril is increased by
movement.
. . . You are moved a substantial distance such that . . . the danger to
you is enhanced. And that’s what happened with that tree. When he
moved her to that tree, the danger was increased because it allowed him to
take the rope that was already hanging from the tree and put it around her
neck. And she can dance around the consent issue [, but] . . . [t]hat’s why
you see bruises on her arms, because he’s probably got her by the arm
forcing her to that milk can, forcing her to her demise.”
(Italics added.) Aside from the initial reference to the movement from the house to the
shed, which he undercut by referring to A.R.’s testimony about consent, the prosecutor
focused exclusively on the movement from the shed to the tree. In particular, he argued
the issue of substantial distance only as to the latter movement. As a result, we will not
consider the movement from the house to the shed in determining whether there was
sufficient evidence of asportation.16
Howard argues that 40 feet is not a “substantial distance” as a matter of law,
relying on decisions predating Martinez, supra, 20 Cal.4th 225 that held particular
distances were insufficient to establish asportation. (People v. Green (1980) 27 Cal.3d 1,
65-67 [90 feet]; People v. Daly (1992) 8 Cal.App.4th 47, 55-57 [40 feet].) Before our
state Supreme Court held in Martinez that asportation should be determined under the
totality of the circumstances, that element of simple kidnapping was “exclusively
dependent on the distance involved” under People v. Caudillo (1978) 21 Cal.3d 562.
(Martinez, at p. 233.) But although “[t]he simple kidnapping standard remain[ed]
‘substantial distance’ ” after Martinez, “in overruling Caudillo [the court] . . . not only
16
It appears the jury may not have understood the exclusive reliance on the movement
from the shed to the tree, as it sent a note to the trial court requesting “[t]estimony of
[A.R.] regarding movement from the house to shed to the tree.” This does not affect our
analysis, however, as we conclude there is sufficient evidence that the shorter distance
moved was “substantial” enough to establish asportation.
36
expanded the factual basis for making that determination but in the process effectively
overruled cases holding that specific distances failed to establish asportation.” (Martinez,
at p. 239; see also id. at p. 236 [“[A]s we have historically recognized for both aggravated
and simple kidnapping, limiting a trier of fact’s consideration to a particular distance is
rigid and arbitrary, and ultimately unworkable”].) Indeed, the court refused to apply its
holding in Martinez retroactively to the defendant in that case and reversed the
kidnapping conviction for insufficient evidence, determining that the movement was too
short under prior law and Martinez “constitute[d] ‘judicial enlargement of a criminal
Act’ ” of which the defendant did not have fair warning. (Id. at pp. 239, 241.) In doing
so, the court signaled that movements that were too short under prior law might well
support a conviction after Martinez. Accordingly, we do not find the pre-Martinez
decisions persuasive on the issue whether the movement here was sufficiently far.
Although Martinez, supra, 20 Cal.4th 225 dispensed with previous guidelines on
the minimum number of feet required to establish asportation, the decision indicated that
asportation cannot be established by “contextual factors, whether singly or in
combination, . . . if the movement is only a very short distance.” (Id. at p. 237.) Howard
cites no authority, however, for the proposition that 40 feet can never be sufficiently far,
regardless of any other factors, because it is “a very short distance.” In fact, at least one
post-Martinez decision has held there was sufficient evidence to support a conviction of
simple kidnapping where the victim was moved an even shorter distance, 15 feet.
(People v. Arias (2011) 193 Cal.App.4th 1428, 1435-1436.) We conclude that 40 feet is
not too short as a matter of law to establish asportation.
Howard also claims that, even if 40 feet may be a sufficient distance otherwise, the
other Martinez “factors weigh against finding the minimal distance [here] was otherwise
substantial,” as the evidence shows that A.R. “was moved from an isolated environment
to an open, more public location where she was more readily seen and more likely to, and
did get help.” We disagree with Howard that the Martinez factors—including whether
the movement decreases the possibility of detection and increases the risk to the victim—
weigh against a finding that the movement here was substantial. (Martinez, supra,
37
20 Cal.4th at p. 237.) The shed was located by the front of the house, “near the
sidewalk,” whereas the tree was located in or near the backyard, and the responding
officers saw the shed and determined no one was inside before they discovered A.R. by
the tree. Thus, the jury could have reasonably determined that the tree was in a less
public location than the shed. Moreover, the tree was next to a steep embankment.
Howard’s movement of A.R. there increased the danger to her in that she might fall when
trying to escape or that Howard might push her off the side (as he in fact did).
Howard also argues that even if asportation were otherwise established, the
conviction cannot be upheld because the movement of A.R. from the shed to the tree was
incidental to the attempted murders. As stated above, Martinez held that “in a case
involving an associated crime, the jury should be instructed to consider whether the
distance a victim was moved was incidental to the commission of that crime in
determining the movement’s substantiality.” (Martinez, supra, 20 Cal.4th at p. 237.)
The court observed that “such consideration is relevant to determining whether more than
one crime has been committed, and is amply supported by the case law,” citing several
earlier decisions. (Ibid.) Howard quotes language from one of those decisions, In re
Earley (1975) 14 Cal.3d 122, 129, footnote 9, holding that defendants cannot be
convicted of simple kidnapping when the asportation is “ ‘incidental’ ” to the associated
crime. Under Martinez, however, whether a movement is incidental is “not a separate
threshold determinant of guilt or innocence” under section 207 but only a factor bearing
on the movement’s substantiality. (People v. Bell, supra, 179 Cal.App.4th at p. 440,
italics in original.)
Even if Howard’s view of the law were correct, he fails to convince us that A.R.’s
movement was incidental to the attempted murders. His only explanation of why the
movement was incidental is that, “[b]ased on the evidence and the prosecutor’s
argument”—in which the prosecutor urged that the movement was substantial because it
“ ‘allowed for [Howard] to effectuate his plan’ ” (italics omitted) and increased the
danger A.R. faced—“walking from the shed to the tree was merely the movement
necessary to effectuate the attempted murder [of A.R.]. There was no other purpose
38
suggested.” It cannot be, however, that movement is incidental to an associated crime
any time that the defendant undertakes the movement with the purpose of furthering that
crime. If that were the case, then Howard could have transported A.R. to a location
hundreds of miles away and would still not be guilty of simple kidnapping as long as he
did so intending to murder her in that location. In addition, although the evidence is
consistent with Howard’s having formed the intent to kill A.R. before moving her to the
tree, another reasonable inference is that he did not form that intent until afterward. He
did not threaten to hang her or kill her until after they reached the tree, and there was no
evidence he was the person who put the rope around it. It is possible that he intended to
keep questioning her about Tovar in the more secluded location and changed his mind
after the movement was complete.
In sum, there was sufficient evidence that Howard’s movement of A.R. was
substantial under the totality of the circumstances, and we therefore affirm the
kidnapping conviction.
G. Section 654 Does Not Require the Sentences for Criminal Threats
and Kidnapping to Be Stayed.
Howard claims that the sentences for criminal threats and kidnapping must be
stayed under section 654 because both crimes were part of the same course of conduct as
the attempted murder of A.R.17 We disagree.
Section 654 provides that “[a]n act or omission that is punishable in different ways
by different provisions of law shall be punished under the provision that provides for the
longest potential term of imprisonment, but in no case shall the act or omission be
punished under more than one provision.” (§ 654, subd. (a).) The statute “generally
precludes multiple punishments for a single physical act that violates different provisions
of law [citation] as well as multiple punishments for an indivisible course of conduct that
violates more than one criminal statute [citations].” (People v. Newman (2015)
238 Cal.App.4th 103, 111-112, italics omitted.) Even if convictions arise from the same
17
Howard also contends that the sentence for conspiracy to commit murder should be
stayed under section 654, a claim we need not reach because we reverse that conviction.
39
course of conduct, however, “section 654 [is] inapplicable . . . if the defendant
‘ “entertained multiple criminal objectives which were independent of and not merely
incidental to each other . . . .” ’ ” (Id. at p. 112.)
We review the trial court’s implicit determination that section 654 does not apply
for substantial evidence. (People v. Rodriguez (2015) 235 Cal.App.4th 1000, 1005.) In
doing so, we consider the court’s finding “ ‘in the light most favorable to the respondent
and presume the existence of every fact the . . . court could reasonably deduce from the
evidence.’ ” (People v. Ortiz (2012) 208 Cal.App.4th 1354, 1378.)
Howard argues that the attempted murder of A.R., the threat to kill her, and the
kidnapping “were in furtherance of a single course of conduct” during which he had
“only one objective, which was to pressure [her] into admitting that Tovar was the father
of her baby.” We cannot agree with this view of the evidence. Howard’s intent in
attempting to murder A.R. was to kill her, not to get an admission from her. Attempting
to murder a person is, to put it mildly, counterproductive if one’s aim is to obtain
information from that person. The question, then, is whether there is substantial evidence
that Howard committed the crimes of criminal threats and kidnapping in furtherance of
an objective other than killing A.R., and we conclude there is.
As to the criminal threats, we find People v. Solis (2001) 90 Cal.App.4th 1002
persuasive. There, the defendant was convicted of arson and criminal threats after he left
messages on the victim’s answering machine threatening to kill the victim. (Id. at pp.
1008-1009.) The victim left her home and returned an hour later to discover that her
apartment was on fire. (Id. at p. 1009.) The Court of Appeal rejected the defendant’s
argument that the two crimes “were committed pursuant to the same objective of
threatening and scaring” the victim, because “they had distinct objectives: in making the
terrorist threats, the defendant intended to threaten whereas in committing arson an hour
later the defendant intended to burn.” (Id. at p. 1022.) Similarly, here, there was
substantial evidence to permit the conclusion that Howard had an objective in threatening
A.R.—to scare her so she would disclose the baby’s parentage—that had changed by the
time he attempted to kill her.
40
Although the issue is closer as to the kidnapping, we likewise conclude that there
was substantial evidence from which the trial court could determine that Howard did not
move A.R. from the shed to the tree with the objective of killing her. He continued to
question her about Tovar after moving her to the tree and tying the rope around her neck,
and he did not attempt to kill her until after the police arrived. Thus, as we already
concluded in our discussion of his previous claim, it is possible to infer that he did not
form the intent to kill A.R. until sometime after he moved her to the tree. As a result, we
conclude there was no error under section 654.
H. The Strike Determination Must Be Reversed Because Howard Was
Not Advised of the Constitutional Rights He Would Waive by
Admitting to the Truth of the Prior Conviction.
Howard challenges the determination that his prior conviction for assault with a
firearm constituted a strike on the basis that the trial court failed to advise him of his
constitutional rights before accepting his admission that he suffered that conviction. We
agree that the strike determination must be reversed because the record does not allow us
to infer that Howard knowingly waived his constitutional rights before admitting the truth
of the prior conviction.
The operative version of the information alleged that Howard was convicted in
April 2001 of the felony of assault with a firearm under section 245, subdivision (a)(2)
and that the prior crime was both a serious felony under sections 667, subdivision (a)(1)
and 1192.7, subdivision (c) and a violent felony under section 667.5, subdivision (c).
The information also alleged another prior conviction in June 2003, for false
imprisonment by violence under section 236, which was not ultimately established. Trial
on the prior convictions was bifurcated.
Before closing arguments, the trial court, the prosecutor, and Howard’s trial
counsel discussed various procedural matters, including whether Howard intended to
request a jury trial on the prior convictions. Howard was not present. The prosecutor
noted that “[t]he prior convictions are bifurcated, so we need to know what Mr. Howard’s
position is before we discharge this jury.” The court then asked Howard’s attorney
41
whether he had spoken to his client about the issue. Counsel responded, “I have, and we
have agreed that we will not be requesting a jury trial. He’s going to admit to those if we
were to get convictions [on the crimes charged].”
The next day, while the jury was deliberating, the trial court said to Howard’s trial
counsel, “I understand just for purposes of getting a couple of things off our list that[,] in
the event that there is a verdict of guilty on any of the charges[,] you’re prepared to admit
the charges.” Counsel indicated that an issue had arisen whether the information
specified the correct crime as to the June 2003 conviction but that Howard was “willing
to admit [the April 2001 assault conviction] if we want to do that right now. [¶] . . . [¶]
So as to [his] prior conviction from April 18, 2001, out of the County of Alameda . . .
[under section] 245[, subdivision] (a)(2), Mr. Howard is willing to admit he suffered that
prior conviction.” The court then stated, “Mr. Howard, it’s been alleged . . . that you
suffered a first prior conviction in Alameda County April 19th [sic], 2001, you were
convicted of a violation of [section] 245[, subdivision] (a)(2)[,] assault with a firearm;
and you’re prepared to admit on the record that that is a true and correct conviction?”
Howard responded, “Yes.” This prior conviction was not mentioned on the record again,
and Howard’s sentence reflected a determination that he had suffered one prior strike.18
Before accepting a defendant’s “admission that he has suffered prior felony
convictions,” a trial court must advise that the admission “waives, as to the finding that
he has indeed suffered such convictions,” his constitutional rights to jury trial,
confrontation, and the privilege against self-incrimination. (In re Yurko (1974) 10 Cal.3d
857, 863 & fn. 5.) The failure to expressly advise a defendant of those rights and secure
a waiver of them does not, however, automatically require reversal. (People v. Mosby
(2004) 33 Cal.4th 353, 360-361.) Instead, “if the transcript does not reveal complete
advisements and waivers, the reviewing court must examine the record of ‘the entire
18
Assault with a firearm under section 245, subdivision (a)(2) is a serious felony by
definition (§ 1192.7, subd. (c)(31)), and thus there was no need for the trial court to
review the record of conviction to determine whether the conviction constituted a strike.
(Cf. People v. Best (1997) 56 Cal.App.4th 41, 43.)
42
proceeding’ to assess whether the defendant’s admission of the prior conviction was
intelligent and voluntary in light of the totality of the circumstances.” (Id. at p. 361.)
Initially, we note it is hardly clear that Howard even admitted to suffering the prior
conviction. The question to which he responded “Yes” was whether he was “prepared to
admit” that the conviction was “true and correct,” not whether he actually admitted it.
(Italics added.) Indeed, other conversations between the trial court and the attorneys
suggested that Howard intended to admit to the prior convictions only if the jury found
him guilty of the crimes charged. He does not contend that the court failed to secure a
valid admission on this basis, however, so we will assume that his response to the court’s
question constituted an admission to the truth of the prior conviction.
The Attorney General concedes that error occurred, as “the record in this case does
not contain any advisement or waiver of [Howard]’s rights before he admitted the prior
conviction for assault with a firearm.” She argues, however, that we can infer that the
admission was knowing and voluntary under the totality of the circumstances. She points
to the statement by Howard’s trial counsel that he and Howard “ha[d] agreed that we will
not be requesting a jury trial,” apparently as evidence that Howard understood he had a
right to have a jury decide the truth of the prior conviction.
Counsel’s offhand remark about an off-the-record conversation does not establish
that Howard understood his right to a jury trial as it related to the prior conviction,
however, much less that he waived that right by merely saying “Yes” when the trial court
asked whether he was prepared to admit the conviction’s truth. Where, as here, a
defendant has not been informed of the right to a jury trial and has not expressly waived
that right, “we cannot infer that in admitting the prior the defendant has knowingly and
intelligently waived that right as well as the associated rights to silence and confrontation
of witnesses.” (People v. Mosby, supra, 33 Cal.4th at p. 362.) Therefore, we must
reverse the strike determination and remand for a retrial of the prior-conviction
allegation. (People v. Sifuentes (2011) 195 Cal.App.4th 1410, 1421-1422.)
43
III.
DISPOSITION
Howard’s convictions for two counts of attempted murder, criminal threats, and
kidnapping are affirmed. His convictions for first degree murder and conspiracy to
commit murder are reversed, as is the determination that he suffered a prior strike, and
the cause is remanded to the trial court for further proceedings. The People shall have the
option to retry the charges of first degree murder and conspiracy to commit murder and
the prior-strike allegation. If the People do not retry Howard on the first degree murder
element of premeditation and deliberation, the judgment shall be modified to reflect his
conviction for second degree murder instead of first degree murder.
_________________________
Humes, P.J.
We concur:
_________________________
Dondero, J.
_________________________
Banke, J.
44
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249 F.2d 847
STANDARD ACCIDENT INSURANCE COMPANY, Plaintiff-Appellant,v.NEW AMSTERDAM CASUALTY COMPANY et al., Defendants-Appellees.
No. 12016.
United States Court of Appeals Seventh Circuit.
December 3, 1957.
Charles D. Snewind, Chicago, Ill., for appellant.
Carl E. Abrahamson, Chicago, Ill., for appellees.
Before DUFFY, Chief Judge, and FINNEGAN and HASTINGS, Circuit Judges.
HASTINGS, Circuit Judge.
1
This is an action for a declaratory judgment brought by Standard Accident Insurance Company against New Amsterdam Casualty Company, et al., for a declaration of the rights and obligations of the respective companies under policies of automobile liability insurance issued by Standard to R. Lenn Franke and by New Amsterdam to Kelliher, Inc.
2
R. Lenn Franke, who was driving the automobile insured under the New Amsterdam policy; Nash Dowdle, who was riding in the automobile with Franke and who was using the Kelliher car with the permission of Virginia Kelliher, a vice-president of Kelliher, Inc., (and who is also Dowdle's sister); and Josephine Klotz, who was injured in an accident involving this automobile, were made parties defendant to the action because of their interest in the subject matter, but no affirmative relief was sought against them.
3
The case was tried to the court without a jury, and findings of fact and conclusions of law were made favorable to New Amsterdam and this appeal is from the judgment rendered thereon.
4
Among other things the trial court found "that the actual use and operation of said automobile by R. Lenn Franke, Jr., was not with the permission of Kelliher, Inc., the named insured of the New Amsterdam Casualty Company," and concluded that New Amsterdam was not obligated or liable to pay the judgment rendered against him.
5
The facts disclosed that Kelliher, Inc. was the named insured in the New Amsterdam policy and was the owner of the 1949 Pontiac convertible automobile described therein. Virginia Kelliher, as an officer of this corporation, had proper possession and control of the Pontiac and the right to use it in the business of the company and for her own use, and had authority to permit its use by others. On the date of the accident in question, Nash Dowdle called his sister, Virginia Kelliher, told her that "he had a date that evening" and asked if he could "borrow the car for that date." She gave him permission to use the car and delivered the keys to him. He took the car from his sister's residence and drove to Franke's place of business since Franke was going on the date with him. The two first went to a print shop in the immediate vicinity of Franke's place of business where Dowdle transacted some business and then drove to meet the two girls they were going to take out to dinner. All this time the automobile was driven by Franke at Dowdle's request, with Dowdle sitting beside him in the front seat, because, as Dowdle testified later, Franke was better acquainted with the neighborhood. It collided with another automobile with resulting personal injuries to Josephine Klotz. She subsequently obtained judgment in the Circuit Court of Cook County, Illinois, in the sum of $4000 against both Dowdle and Franke. The evidence further shows that Dowdle had on previous occasions been permitted to use the car in question for his own "social engagements" and that he had allowed Franke to drive on some of those occasions. Franke is an acquaintance of the Kelliher family. There is no evidence that Virginia Kelliher knew that Franke had driven the car before. She testified that she did not know that Franke was to accompany Dowdle.
6
The New Amsterdam policy in force at the time of the accident contained the following clause:
7
"With respect to the insurance for bodily injury and property damage liability, the unqualified word `insured' includes the named insured and also includes any person while using an owned automobile or a hired automobile, and any person legally responsible for the use thereof, provided the actual use of the automobile is by the named insured, or with his permission." (Our emphasis.)
8
The Standard policy in force at the time of the accident covered Franke as the "named assured" and as owner and operator of a certain automobile (not the one involved in this case) and, among other things, agreed to pay on his behalf damages recovered by any person in an accident involving any other automobile driven by Franke. It also provided that this latter "shall be excess insurance over any other valid and collectible insurance available to the insured, either as an insured under a policy applicable with respect to said automobile or otherwise." It is conceded that the Standard policy afforded Franke complete protection as the driver of the 1949 Pontiac in the accident in question, and that the New Amsterdam policy afforded similar protection to Dowdle in his use of the car.
9
The ultimate issue is whether or not Franke was an additional insured of New Amsterdam under the "omnibus" provision of its policy above set out. The question is, therefore, whether or not Franke's use of the car brought him within the provision of the New Amsterdam policy affording protection if "the actual use of the automobile is by the named insured or with his permission." (Our emphasis.) Both parties agree that the construction of the New Amsterdam policy is to be governed by the law of Illinois and that there is no decided case in point.
10
In the case at bar, we have a second permittee who is sought to be classified as the additional insured. It is a situation where the first permittee is properly permitted to use the car for a specific purpose, and while using the car for such purpose requests another to drive the car for him in pursuance of that purpose, viz.: a social engagement, the first permittee riding in the front seat of the car with the second permittee driver. Did the first permittee have authority to sub-delegate the operation of the car to another, and in so doing place the operator in the position of using the car with the implied consent of the named insured owner?
11
Appellant makes marked reference to an annotation in 160 A.L.R. 1195 under the general subject entitled "Omnibus clause of automobile liability policy as covering accidents caused by third person who is using car with consent of permittee of named insured." Particular reliance is placed upon the following generalization at page 1206:
12
"4. The initial permission given by the named assured to the original permittee includes, according to the better view, the use of the automobile by the second permittee where in doing so the second permittee serves some purpose, benefit or advantage of the first permittee. This is the case if the original permittee is riding in the car * * * or if the car is driven in his interest or for a purpose mutual to him and the second permittee."
Quoting further:
13
"It should be noted in this connection that the liability of the insurance company under the omnibus clause may be invoked upon the liability of either the first or the second permittee * * * if the claim is based upon the fault of the second permittee, the problem to be decided is whether or not he used the automobile with the insured's `permission.'"
14
Appellee finds support in a quotation from Appleman, Insurance Law and Practice, Vol. 7, Sec. 4360, pp. 157-158, as follows:
15
"The ordinary rule is usually stated to be that the bailee of an automobile having possession with the permission of the named insured cannot validly permit a third person to operate the vehicle so as to bring such third person within the policy protection; such person occupying the same position as would a volunteer or inter-meddler."
16
However, Appleman states further in the same section from which the above quotation is taken, that "if it appears that the insured had given either express or implied permission for such delegation or it fell within the scope of the permission granted, protection would be afforded." (Our emphasis.) Appleman, supra, Vol. 7, Sec. 4360, p. 158.
17
A careful review of the cases cited by the annotator and the text writer shows there is much authority for all of these general propositions. Both cite Aetna Life Ins. Co. v. Chandler, 1937, 193 A. 233, 89 N.H. 95, in which the Supreme Court of New Hampshire found implied permission to delegate the use of a car where the permittee, being ill, had let another person drive the car to obtain medicine. While on this errand the third person was involved in an accident. This driver was unknown to the insured owner of the car and had no express permission to use the car. From these circumstances the court held that permission could be implied since the insured had intended the car to be used for the personal needs of the first permittee. Also, in the case of Odden v. Union Indemnity Co., 1930, 156 Wash. 10, 286 P. 59, 72 A.L.R. 1363, coverage was extended under an omnibus clause to a person who drove the car of the insured with the permission of the first permittee where there was evidence that the insured knew that the permittee was allowing others to drive and had not objected.
18
Typical of the authorities denying extended coverage under an omnibus clause is the case of Card v. Commercial Casualty Insurance Co., 1936, 20 Tenn.App. 132, 95 S.W.2d 1281, at page 1284, where the court states:
19
"When the car is being driven by a person without the actual permission (either express or implied) of the named assured, then the driver is not an additional assured. Even if the person is present in the car who had permission to use it (but is not driving), there is no coverage under the policy. In that case the person who was given permission is not an `additional assured,' for the reason that the named assured must personally exercise his discretion in selecting the driver. Permission to use means permission to operate."
20
The Tennessee Court of Appeals in this case goes on to describe implied permission to drive as arising only by an act of the named insured who was granted authority to select additional insureds under the policy's omnibus clause. The court placed emphasis on the fact that the insurer selected the insured as one who was a good risk and also as one who could be trusted to use discretion in the selection of a driver for the car.
21
Appellee relies strongly on the case of Aetna Casualty & Surety Co. v. De Maison, 3 Cir., 1954, 213 F.2d 826. In this case the father owned an automobile insured under a policy in the Merchants Indemnity Company of New York, and the policy contained the usual omnibus clause. He gave his son permission to drive the insured's car to a theater in Jenkintown, a suburb of Philadelphia, but instead he drove to a tavern in Ardsley, Pennsylvania, and there met Mrs. De Maison. They decided to drive to Willow Grove, some three or four miles beyond Ardsley, to dine. The son permitted Mrs. De Maison to drive the car while he was riding with her and the accident occurred en route, with resulting damage to the automobile with which it collided. The owner of the damaged automobile brought suit against Mrs. De Maison. At the time of the accident Mrs. De Maison's husband owned an automobile which was insured by Aetna Casualty & Surety Company, the policy containing a clause insuring Mrs. De Maison in the event she was involved in an accident while driving another car, with a further provision that the policy applied only as excess insurance above whatever public liability insurance might cover such other car. The case arose under Pennsylvania law and, as here, the Court of Appeals for the Third Circuit could find no Pennsylvania decisions upon the precise question involved. Judge Kalodner, for the court, noted that pursuant to Pennsylvania decisions, when an automobile is involved in an accident while being operated by one other than the insured, "* * * `there is no * * * liability if at the time of the accident the car is being driven at a time or place or for a purpose not authorized by the insured.'" Id. at 831. The court noted that: "What we are here concerned with is the critical issue as to whether a third person is entitled to the status of an additional assured when he is allowed to drive a vehicle by one who has been authorized by the insured owner to use it but who has not been given express or implied permission to delegate his authority." Id. at 830. The court in thus framing the issue negated the possible existence of implied permission for the delegation and, in effect, cut off inquiry as to the existence of permission.
22
The following year the same court again passed upon the authority of a permittee to delegate the permission to drive an insured's car in the case of Maryland Casualty Co. v. Marshbank, 3 Cir., 1955, 226 F.2d 637. This case also was determined under Pennsylvania law. A named insured under a policy gave permission to his son and three of the son's friends to drive the car to a theater. One of the son's friends drove the car with the consent of the son and an accident occurred while he was driving. The court held that the son's friend was an additional insured under the omnibus clause of the policy on the ground that the use to which the car was being put at the time of the accident was the use the named insured had agreed to permit. In referring to the De Maison case of the previous year the court commented: "* * * it is clear that in that case the actual use to which the automobile there in question was being put at the time of the accident was not the use for which permission had been given." Id. at 640. The court said further: "Where, as in the De Maison case, there has been a deviation at the time of the accident from the particular use for which permission was given the user at that time does not come within the policy definition as an additional insured. * * * It will be seen that the distinction between the use and operation of the automobile, which is crucial in this case, was of no legal significance in the De Maison case." Id. at 640.
23
Recently, a Louisiana Court of Appeals allowed extended coverage in a situation quite similar to the one in this case. Brooks v. Delta Fire & Casualty Co., La. App., 1955, 82 So.2d 55. There permission was granted a daughter, Mrs. Moreau, by the insured owner, her father, Dr. Pierce, to use the car to drive to New Orleans for the purpose of taking a medical examination. Mrs. Moreau was accompanied by her infant child and a friend, Miss Dietz. On the return trip, the baby required Mrs. Moreau's attention and the friend was asked to drive. An accident ensued. The evidence showed that Dr. Pierce, the owner, had forbidden his daughter to allow anyone else to drive the car. The court discounted this prohibition stating:
24
"[T]he owner of the car knew that his daughter and her infant child was to be accompanied on the trip to New Orleans by her friend, Miss Dietz. Here the transfer of drivership took place when the infant's crying required the attentions of its mother. * * * Surely it was contemplated that for this reason, or even were the daughter tired or beset by headache or for any other reason was unable or unwilling to continue driving, that Miss Dietz would take the wheel so that the journey could continue * * *. Under these circumstances, despite the alleged general instructions given at some indefinite time in the past not to allow others to drive, we feel that special permission may be fairly implied consenting for the original permittee to let her companion drive." Id. at 58.
25
It thus appears that the Third Circuit laid down the Pennsylvania rule based on a strict construction of the omnibus clause where there is a substantial deviation from the designated permitted use. The Louisiana rule in the Brooks case, supra, is said to arise from a "liberal" construction by their Supreme Court of the "permission" in the omnibus clause.
26
Here, we are required to consider what approach the Illinois courts might make to this question. The Illinois Act known as the "Motor Vehicle Law", Ill. Rev.Stat.Ch. 95½, as amended in 1951, fixes requirements as to motor vehicle policies in Section 58k, as follows:
27
"* * * (a) Said policy shall insure the person named therein and any other person using or responsible for the use of said motor vehicle or vehicles with the express or implied permission of said insured * * *." (Our emphasis.)
28
"[This] so-called statutory omnibus, or extended coverage, or additional insured clause" is deemed written into the New Amsterdam policy by operation of law. Konrad v. Hartford Accident & Indemnity Co., 1956, 11 Ill.App.2d 503, 514, 137 N.E.2d 855, 860. This statutory provision differs little from the one in the New Amsterdam policy, but does specifically recognize that the "permission" for the use of the car may be either "express or implied."
29
It should be noted here that Illinois has adopted and adhered to the so-called initial permission rule. In the Konrad case, supra, the court said:
30
"When the named insured has initially once given permission to another person to use his motor vehicle but that person deviates from the permission granted, Illinois follows the so-called initial permission rule to the effect that the user need only to have received permission to take the vehicle in the first instance, and any use while it remains in his possession is with `permission', under the omnibus clause, though that use may be for a purpose not contemplated by the named insured when he parted with possession of the vehicle; if the original taking by the user is with the named insured's consent, every act of the user subsequent thereto while he is driving the vehicle is with the named insured's permission so far as the omnibus clause is concerned, assuming there is no termination of permission; a deviation from the permission is immaterial; the only essential thing is that permission be given in the first instance; the rule is based on the theory that the insurance contract is as much for the benefit of the public as for the insured, and that it is undesirable to permit litigation as to the details of the permission and use; this is the view followed also in Connecticut, Louisiana, Massachusetts, New Jersey, Tennessee, Wisconsin, and probably North Dakota, Oregon, Oklahoma, Florida, Indiana, and West Virginia, and is the weight of authority." (citations following.) 11 Ill.App.2d at pages 514-515, 137 N.E.2d 861.
31
To the same effect see Muthart for use of Zitnik v. Burik, 1945, 327 Ill.App. 170, 63 N.E.2d 635, and Jefson, for use of Alber v. London Guarantee & Accident Co., 1937, 293 Ill.App. 97, 11 N.E.2d 993.
32
However, Illinois does not extend this initial permission rule to carry with it authority for a permittee to let another use the car when the owner expressly forbids such delegation. Cocos v. American Automobile Ins. Co., 1939, 302 Ill. App. 442, 24 N.E.2d 75. In the Cocos case, the owner gave his employee permission to use his car with the express limitation that it was to be used solely for business purposes and by no other person. The employee gave his son permission to use the car for a Christmas night visit to his uncle and an accident occurred through his negligence. The court held this prohibited use was not with the permission of the owner, and that the policy did not cover the liability of the son.
33
In the instant case, the first permittee, Dowdle, was properly given permission to use the insured car for his own social purpose. While so engaged in such use of the car he requested the second permittee to drive it and in so doing he did not deviate from the use for which permission had been granted. Under these circumstances and in view of the liberal policy adopted by the Illinois courts above referred to, it may be fairly concluded that in the initial permission given Dowdle to use the car there was an implied permission for him to allow Franke to drive the car.
34
We are of the opinion, therefore, that in Illinois one to whom the named insured has given the initial permission to use an automobile for a specific purpose has implied authority to permit the use of the automobile to another, where in doing so the second permittee uses the car for the same purpose for which the initial permission was given, the original permittee being present in the car with him. We hold that Franke was using the automobile described in the New Amsterdam policy with the implied permission of the named insured; that Franke was an additional insured under the New Amsterdam policy; and that New Amsterdam is obligated and liable to pay the judgment rendered against Franke. In view of this determination we need not pass on other questions raised by appellant.
35
For the reasons stated the judgment of the district court is reversed with directions to proceed in accordance with this opinion.
36
FINNEGAN, Circuit Judge (concurring).
37
Justice Stone might well have been describing our position as a transitory Supreme Court for Illinois when he wrote for the majority in Meredith v. City of Winter Haven, 1943, 320 U.S. 228, 234, 64 S.Ct. 7, 11, 88 L.Ed. 9, "In the absence of some recognized public policy or defined principle guiding the exercise of the jurisdiction conferred, which would in exceptional cases warrant its non-exercise, it has from the first been deemed to be the duty of the federal courts, if their jurisdiction is properly invoked, to decide questions of state law whenever necessary to the rendition of a judgment * * * (cases collected). When such exceptional circumstances are not present, denial of that opportunity by the federal courts merely because the answers to the questions of state law are difficult or uncertain or have not yet been given by the highest court of the state, would thwart the purpose of the jurisdictional act." (Emphasis supplied.) See also Preston v. Aetna Life Ins., 7 Cir., 1949, 174 F.2d 10.
38
We are called upon to make a decision in this diversity of citizenship case where the law of the State of Illinois is nonexistent. Everyone involved, court and counsel, cheerfully agree we are confronted with a question of local law, only the local law is conspicuous by its absence. Moreover, district judges are assumed to know the local law in their districts and here we reverse the lower court, though I think rightly so. It has been suggested that federal courts be empowered to certify questions of state law to state courts and obtain a response. See Hart and Wechsler, The Federal Courts and The Federal System 632 (1953) and Vestal, The Certified Question of Law, 36 Iowa L.Rev. 629 (1951) concerning Fla.Stat. Ann. §§ 25.031-25.032 "authorizing the Supreme Court of Florida to answer questions certified by federal appellate courts." Ibid.
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873 F.2d 1133
49 Fair Empl.Prac.Cas. 1216,53 Empl. Prac. Dec. P 39,798,27 Fed. R. Evid. Serv. 1390William K. HALL, Appellant,v.AMERICAN BAKERIES COMPANY, Appellee.
No. 88-1644.
United States Court of Appeals,Eighth Circuit.
Submitted Nov. 18, 1988.Decided May 2, 1989.Rehearing Denied June 1, 1989.
D. Eric Sowers and Elaine E. Bensavage, St. Louis, Mo., for appellant.
Henry D. Menghini, St. Louis, Mo., for appellee.
Before FAGG and WOLLMAN, Circuit Judges, and FLOYD R. GIBSON, Senior Circuit Judge.
FLOYD R. GIBSON, Senior Circuit Judge.
1
William K. Hall appeals the district court's1 decision after a bench trial that appellee American Bakeries Company did not engage in unlawful age discrimination in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621-634 (1982), by discharging him from his position as Thrift Store Coordinator in April 1984. We affirm.
I. BACKGROUND
2
Hall first began working for American Bakeries in 1957. Over the years, he received a number of promotions and worked in several different locations across the country. In June 1980, Hall was transferred to St. Louis and in 1983 was appointed Thrift Store Coordinator. Hall's main function in this position was to supervise the personnel of American Bakeries' various thrift stores in the St. Louis area; his job also involved store maintenance, advertising, and budgeting. In April 1984, when he was fifty-nine, Hall was discharged from this position by Jack Long, who had been hired as general manager of the St. Louis plant in November 1983.
3
Hall claims that his job was filled by a younger employee, Susan Canania. He claims that the evidence shows that the duties performed by Canania after he was discharged were the same as the duties he had performed. American Bakeries claims that Hall was discharged as part of a reduction-in-force effort. There was testimony that the St. Louis plant had been losing money rapidly since 1981 and that Jack Long was hired in 1983 to attempt to turn around the St. Louis plant's declining financial situation. As part of that effort, according to American Bakeries, several management positions, including Hall's, were eliminated. American Bakeries disputes Hall's claim that his position remained and was filled by a younger employee; it claims that the position was indeed eliminated and Hall's duties were combined with other positions.
4
At the close of Hall's case, American Bakeries moved for a directed verdict, claiming that Hall failed to establish a prima facie case of age discrimination. The district court did not explicitly rule on that motion and required the presentation of evidence to continue. After a full trial, the district court found that Hall failed to show that age was a factor in his discharge. The district court concluded that Hall's job was eliminated and that his duties were split among several employees.
5
This appeal followed.
II. DISCUSSION
6
A. District Court's Finding of No Discrimination
7
It is well established that the guidelines set out in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) regarding the order of proof in Title VII cases are applicable to age discrimination cases brought under the ADEA. Holley v. Sanyo Mfg., Inc., 771 F.2d 1161, 1164 (8th Cir.1985); Halsell v. Kimberly-Clark Corp., 683 F.2d 285, 289 (8th Cir.1982), cert. denied, 459 U.S. 1205, 103 S.Ct. 1194, 75 L.Ed.2d 438 (1983). According to McDonnell Douglas, the burden of production rests first with the plaintiff to establish a prima facie case of discrimination. If that is accomplished, the burden shifts to the defendant to show some legitimate, nondiscriminatory reason for the adverse employment action. Then, the burden returns to the plaintiff to show that the defendant's proferred reason was pretextual. McDonnell Douglas, 411 U.S. at 802-04, 93 S.Ct. at 1824-25. The particular facts that must be proved at the prima facie stage must necessarily vary with differing factual situations. See id. at 802 n. 13, 93 S.Ct. at 1824 n. 13; Leichihman v. Pickwick Int'l, 814 F.2d 1263, 1270 (8th Cir.), cert. denied, --- U.S. ----, 108 S.Ct. 161, 98 L.Ed.2d 116 (1987). But, in any event, the plaintiff bears the ultimate burden of producing evidence that supports an inference that the employer's decision was based on an illegal motivation. Id. at 1269.
8
We have held that a plaintiff in an ADEA case may establish a prima facie case by showing:
9
(1) that he or she is within a protected age group, (2) that he or she met applicable job qualifications, (3) that despite these qualifications, he or she was discharged, and (4) that, after the discharge the position remained open and the employer continued to seek applications from persons with similar qualifications.
10
Cova v. Coca-Cola Bottling Co., 574 F.2d 958, 959 (8th Cir.1978). However, in Holley, 771 F.2d 1161, we adopted a special requirement for plaintiffs attempting to prove age discrimination in reduction-in-force cases. According to Holley, in such cases the plaintiff must show more at the prima facie stage than that he or she was in a protected age group, was performing competently, and was discharged. The Holley court held that "the 'plaintiff in such reorganization cases must come forward with additional * * * evidence that age was a factor in his termination in order to establish a prima facie case.' " Id. at 1166 (quoting LaGrant v. Gulf & Western Mfg. Co., Inc., 748 F.2d 1087, 1091 (6th Cir.1984)).2
11
In its opinion, the district court stated that this case "clearly involves a reduction in force situation" and that Hall thus had to establish the following five elements to make a prima facie case:
12
1. That he was between 40 and 70 years old at the time of his termination;
13
2. That he was performing his job at a level that met his employer's legitimate expectations;
14
3. That despite his performance in his job, he was terminated;
15
4. That his job in its various parts continued to exist; and
16
5. That plaintiff's age was a determining factor in defendant's actions.
17
Hall v. American Bakeries, No. 86-678, slip op. at 4 (E.D.Mo. Feb. 9, 1988) (citing Leichihman, 814 F.2d at 1268). The district court went on to conclude that Hall failed to show that his age was a factor in his discharge. The court credited American Bakeries' evidence that it was faced with a rapidly declining financial situation and responded by, among other things, eliminating Hall's position and assigning his duties to several other employees. The district court considered American Bakeries' reason for terminating Hall to constitute good cause under section 4(f)(3) of the ADEA, which provides that termination of an employee for good cause is not unlawful. 29 U.S.C. Sec. 623(f)(3) (1982).
18
Hall complains that the district court inappropriately viewed the evidence in this case in terms of the burden of production rule in Holley. Hall argues that American Bakeries' claim that it discharged him as a part of a reduction in force was pretextual. Thus, Hall claims, the district court erred in considering Holley to be applicable because Holley provides a burden-allocation scheme only for true reduction-in-force cases.
19
Because this case proceeded to a full trial on the merits and the district court made a determination on the discrimination issue after hearing the evidence presented by both sides, we need not linger over whether the district court's discussion of Holley was correct. Where, as here, a finding of discrimination vel non has been made, the appellate court need not concern itself with the order of proof and presumptions, but, rather, should "simply study the record with a view to determining whether the evidence is sufficient to support whatever finding was made at trial." Barber v. American Airlines, Inc., 791 F.2d 658, 660 (8th Cir.), cert. denied, 479 U.S. 885, 107 S.Ct. 278, 93 L.Ed.2d 254 (1986). The ultimate factual issue in this case is whether American Bakeries discriminated against Hall on the basis of age, and " 'because the case was fully tried on the merits, [on appeal] we focus our attention on the ultimate question presented and not on the adequacy of a party's showing at any particular stage of the analysis set down in McDonnell Douglas Corp. * * * as applied in an age discrimination case.' " Bethea v. Levi Strauss & Co., 827 F.2d 355, 357 (8th Cir.1987) (quoting Gilkerson v. Toastmaster, Inc., 770 F.2d 133, 135 (8th Cir.1985)). See also United States Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 713-15, 103 S.Ct. 1478, 1480-82, 75 L.Ed.2d 403 (1983).
20
Thus, it is not our task at this point to determine whether this is a case to which Holley applies at the prima facie stage. The district court required the case to proceed past the prima facie stage; it required American Bakeries to produce its evidence of its legitimate, nondiscriminatory reason for discharging Hall and it allowed Hall the opportunity to produce his evidence of pretext. And, the district court in the end reached the conclusion that age was not a "determining, substantial or even a motivating factor in [American Bakeries'] decision to terminate Mr. Hall." Hall, slip op. at 4. Our task at this point is only to review that factual finding. See Mullins v. Uniroyal, Inc., 805 F.2d 307, 308 (8th Cir.1986) (noting that a district court's finding of no discrimination under the ADEA is a finding of fact).
21
Our review of the district court's factual findings is quite limited; we review those findings under the clearly erroneous standard. See Fed.R.Civ.P. 52(a). We may not reverse the district court's finding of no discrimination simply because we may have reached a different result. Reversal is appropriate only if after reviewing the record we are " 'left with the definite and firm conviction that a mistake has been committed.' " Anderson v. Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948)).
22
Applying that standard, we affirm the district court's judgment that age was not a factor in American Bakeries' decision to discharge Hall. After hearing the evidence, the district court concluded that American Bakeries was forced to do some internal reorganizing of staff and facilities because of its declining sales. Jack Long was hired in November 1983 as manager of the St. Louis plant to try to turn that plant, which had lost $3,000,000 in the prior two years, into a profit-making operation. After studying the company, Long decided to eliminate several management positions as well as implement union job layoffs and wage concessions. Hall's position was among those terminated. Hall argues that his position was not actually eliminated but, rather, was given to a younger employee. However, the district court credited American Bakeries' evidence that the job was indeed eliminated and Hall's duties were assigned in a piecemeal fashion to other existing employees.
23
Based on the record, we believe that the district court's findings, outlined above, are persuasive. Accordingly, we are compelled to uphold the district court's judgment. See Anderson, 470 U.S. at 573-74, 105 S.Ct. at 1511-12 ("If the district court's account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse * * *.")
B. Witness's Use of Notes
24
Hall also argues that the district court abused its discretion by allowing one of American Bakeries' witnesses to refer to notes while testifying. During American Bakeries' direct examination of Jack Long regarding the job duties performed by Hall and the employees to whom those duties were assigned after Hall's discharge, Hall's attorney objected to Long's use of written notes. The district court allowed Hall's attorney to question Long regarding the notes, and Long stated that he made the notes a few days before trial to assist him in testifying. The district court overruled Hall's objection and allowed Long to continue using the notes.
25
We consider the district court's allowance of this procedure to be error, but not error that was so prejudicial to Hall that reversal is warranted.
26
This is not a situation in which a document was used as a means to refresh a witness's recollection as allowed by Federal Rule of Evidence 612. No foundation was laid regarding Long's need to refresh his memory or whether the notes would be of assistance. It appears that when Long was questioned as to the nature of the Thrift Store Coordinator's duties, he testified, for the most part, from his notes prepared for trial and not from his own recollection.
27
It is error to allow a witness to testify at trial from prepared notes under the guise of refreshing recollection. See United States v. Davis, 551 F.2d 233, 235 (8th Cir.), cert. denied, 431 U.S. 923, 97 S.Ct. 2197, 53 L.Ed.2d 237 (1977); Goings v. United States, 377 F.2d 753, 759-62 (8th Cir.1967). However, the error is not grounds for reversal in this case because the evidence elicited from Long while he was testifying from his notes was generally cumulative of other properly-admitted evidence. See United States v. Davis, 551 F.2d at 235 (stating that "although the use of [a witness's prior statement] was questionable, it was cumulative and did not so prejudice the trial to require reversal"). The issues to which Long's notes were relevant--namely, the nature of Hall's duties and whether those duties were assigned exclusively to Susan Canania after Hall's discharge--were addressed by other witnesses and also in Long's deposition, which was admitted at trial. We are convinced that the district court had sufficient evidence apart from the portion of Long's trial testimony that was based on his notes upon which to base its conclusion that Hall's duties as Thrift Store Coordinator were combined with several jobs and were not assigned exclusively to Susan Canania. Thus, the district court's allowance of the witness's use of the notes, although erroneous, is not grounds for reversal.
III. CONCLUSION
28
We conclude that the district court committed no error of law in its analysis of the evidence in this case, and that its finding that American Bakeries did not discriminate against Hall based on age was not clearly erroneous. Further, we hold that the district court's failure to sustain Hall's objection to American Bakeries' witness's use of notes while testifying was not reversible error.
1
The Honorable Stephen N. Limbaugh, United States District Judge for the Eastern District of Missouri
2
We also noted in Holley that in reduction-in-force cases the requirement that the plaintiff show that the position remained open will necessarily be modified to account for the fact that in such cases the position is often eliminated altogether. Holley, 771 F.2d at 1165. See also Leichihman, 814 F.2d at 1268-70 (upholding a jury instruction in an ADEA reduction-in-force case requiring the plaintiff to show, inter alia, "[t]hat his job in its various parts continued in existence" after his discharge)
|
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NUMBER 13-10-00197-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
____________________________________________________________
GULF ISLAND FABRICATION, INC. AND
GULF ISLAND, L.L.C., Appellants,
v.
LUCINDA F. FLORES, ET AL., Appellees.
____________________________________________________________
On appeal from the 156th District Court
of San Patricio County, Texas.
____________________________________________________________
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Benavides
Memorandum Opinion Per Curiam
Appellants, Gulf Island Fabrication, Inc. and Gulf Island, L.L.C., perfected an
appeal from a judgment entered by the 156th District Court of San Patricio County, Texas,
in cause number S-08-5392-CV-B. The parties have filed a joint motion to reverse the
judgment and remand to the district court on grounds that all matters in controversy
between them in this cause have been fully compromised and settled. The parties
request that we reverse the trial court’s judgment without regard to the merits and remand
the case for implementation of settlement.
The Court, having considered the documents on file and the joint motion to reverse
and remand, is of the opinion that the motion should be granted. See TEX. R. APP. P.
42.1(a). Accordingly, the joint motion is granted. We REVERSE the trial court=s
judgment without regard to the merits, and REMAND this case to the trial court for further
proceedings in accordance with the parties’ agreement. See TEX. R. APP. P.
42.1(a)(2)(B), 43.2(d).
Costs will be taxed against appellants. See TEX. R. APP. P. 42.1(d) (“Absent
agreement of the parties, the court will tax costs against the appellant.”). Having
reversed the trial court’s judgment and remanded the case at the parties’ request, no
motion for rehearing will be entertained.
Furthermore, the parties request immediate issuance of our mandate. See TEX.
R. APP. P. 18.1(c). The motion is GRANTED. We direct the Clerk of the Court to issue
the mandate immediately. See id.
PER CURIAM
Delivered and filed the
16th day of June, 2011.
2
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IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
AT KNOXVILLE FILED
JULY SESSION, 1997 December 18, 1997
Cecil Crowson, Jr.
Appellate C ourt Clerk
OLEN EDWARD HUTCHISON, ) C.C.A. NO. 03C01-9702-CR-00065
)
Appe llant, )
) CAMPBELL COUNTY
)
V. )
) HON. JAMES WITT, JUDGE
STATE OF TENNESSEE, )
)
Appellee. ) (POST-CONVICTION)
FOR THE APPELLANT: FOR THE APPELLEE:
CHRISTOPHER VAN RIPER JOHN KNOX WALKUP
STUART & VAN RIPER Attorney General & Reporter
300 Market Street
Clinton, TN 37716 JOHN P. CAULEY
Assistant Attorney General
2nd Floor, Cordell Hull Building
425 Fifth Avenue North
Nashville, TN 37243-0943
WILLIAM PAUL PHILLIPS
District Attorney General
MICHAEL O. RIPLEY
Assistant District Attorney General
P.O. Box 323
Jacksboro, TN 37757
OPINION FILED ________________________
AFFIRMED
THOMAS T. WOODALL, JUDGE
OPINION
The Petitioner, Olen Edward Hutchison, appeals as of right from the
trial court’s dismissal of his second petition for post-conviction relief. The
dismissal followed argument by both parties on the State’s motion to dismiss.
The trial court allowed both parties to arg ue the m erits of the S tate’s mo tion to
dismiss, but no evidence was submitted by either side at the hearing. W e affirm
the judgm ent of the tria l court.
In his appeal, Petitioner presents three (3) issues for review:
(1) The trial court erred by not finding that the statute of
limitations codified in Tennessee Code Annotated section 40-
30-202(a) violated the due process rights of Petitioner and by
not making findings of fact mandated by our supre me c ourt in
Sand s v. State, 903 S.W .2d 297 (Te nn. 1995).
(2) The trial court erred by findin g that s tatem ents in clude d within
an exhibit attached to the petition for post-conviction relief
were no t “Brady” materia l.
(3) The trial judge w ho gran ted the S tate’s mo tion to dismiss was
not one who was properly designated to hear this petition for
post-conviction relief pursuant to Tennessee Code Annotated
section 40-30-205.
F ACTUAL BACKGROUND
Petitioner was c onvicted of the first degree murder of Hugh
Huddleston, conspiracy to take a life, and solicitation to commit first degree
murder. For the conviction of first degree murder, he received the de ath penalty.
The convictions and sentences were affirmed on direct appe al. State v.
Hutchison, 898 S.W .2d 161 (Tenn . 1994), cert. denied, ____ U.S. ____, 116
-2-
S.Ct. 137 (19 95). On May 4, 19 95, Petition er filed his first pe tition for post-
conviction relief. The trial court denied the petition following an evide ntiary
hearing on September 27, 1995, and the dismissal of the first petition for p ost-
conviction relief was recently affirmed by a pan el of this cou rt. Olen Eddie
Hutchison v. State, No. 03C01-9601-CC-00033, Campbell County (Tenn. Crim.
App., Knoxville, Oct. 3, 1997). In the case sub judice, Petitioner filed his second
petition for post-co nviction relief pro se on August 1, 1996. The State filed a
motion to dism iss this second petition on August 29, 1996. Petitioner filed a pro
se respo nse o n Sep temb er 12, 1 996, a nd Pe titioner’s counsel in the first po st-
convic tion petition appeared in the present case and filed a motion in the case
sub judice on Se ptem ber 17 , 1996 . The tr ial cou rt allowe d a he aring in this
matter o n Septe mber 1 9, 1996 , and dism issed the petition.
In the seco nd pos t-conviction petition wh ich is the su bject of this
appe al, the Petitioner alleges that the State withhe ld exculpatory m aterial before
and during the original trial which led to his convictions. Petitioner alleged that
the material withheld was in violation of the mandates found in Brady v. Maryland,
373 U.S. 83, 83 S.Ct. 1194 (1963). The specific item argued in this court to be
Brady material is a statement purportedly made by one Tony Goings to an
insurance company investigator. In this recording of the statemen t given by Mr.
Goings, one D avid Da vis told Mr. Goings about a conve rsation he had with
Richard Miller w ho wa s, as d escrib ed by o ur sup reme court in the direct appe al,
the chief prosec ution witne ss. Hutchison, 898 S.W.2d at 165. Petitioner a dmits
in his brief that the report from the insurance investigator was included in a large
volume of documents which Petitioner’s attorney was allowed to examine prior
to the hearing of the original po st-convictio n petition. Petitioner argues , however,
-3-
that he and his counsel were not provided with adequate time to “examine and
utilize” the investigative report in order to include it in the original post-conviction
hearing .
The trial court dismissed the present petition because it was filed
after the expiration of the applicable one year statute of limitations and a prior
petition for post-conviction relief had be en previo usly filed an d heard on its
merits. He als o ruled that the claims and issues asserted had been waived
pursuant to Tenness ee Co de Ann otated se ction 40-3 0-206(g ), and the facts
alleged in the Petition, even if taken as true, failed to sho w that th e Petitio ner is
entitled to relief as the alleged exculpatory evidence does not constitute “Brady”
material pursu ant to Tenn essee C ode Ann otated section 4 0-30-206(f).
D UE PROCESS VIOLATION
Relying upon Sand s v. State, 903 S.W.2d 297 (Tenn. 1995), the
Petitioner argues that the trial court erred by not making certain findings of fact
as mand ated in tha t decision of our supreme court, and by not finding that the
statute of limitations violated his due process rights. In Burford v. State, 845
S.W.2d 204 (Tenn. 1992), our supreme court held that the three-year statute of
limitations then in effect on post-conviction petitions complies with the due
process requirements of the United States and Tennessee Constitutions.
Howeve r, the supreme court also recog nized that “before a state m ay termin ate
a claim for failure to comply with procedural requirements such as statutes of
limitations, due p roces s requ ires tha t poten tial litigants be provided an
opportu nity for the presentation of claims at a meaningful time and in a
-4-
meaningful manne r.” Id. at 208 (citations omitted). The refore, the suprem e court
found that in particular circumstances, application of the statute of limitations
might not afford a reasonable opportunity to have an issue heard and decided.
Id. In add ition, the court s ugge sted th at “[c]lea rly, it wou ld be h elpful in such
instances for the legislature to adopt a shorter statute of limitations for later
arising grounds providing such a reasonable opportunity.” Id. In a sepa rate
concurring opinion Justice Daughtrey also noted that “[i]t obviously would be best
if the Te nnes see G enera l Asse mbly would enact legislation dealing spec ifically
with the effect of T.C.A. § 40-30-102 [statute of limitations on post-conviction
matters] on later-a rising grounds .” Id. at 212.
Petition er’s first petition for post-convic tion relie f attack ing his
convictions and sentences was timely filed and an evidentiary hearing was held.
Not only does the statute of limitations bar the second petition for post-conviction
relief, but it is also barred by the provisions of Tennessee Code Annotated
section 40-30-202(c) which states in part, “[t]his part contemplates the filing of
only one (1) petition for post-conviction relief. In no event may more than one (1)
petition for pos t-conv iction re lief be filed attacking a single judgment.” Tennessee
Code Annotated section 40-30-206(b) provides in pertin ent pa rt that “[i]f it plainly
appears from the face of the petition, any annexed exhibits or the prior
proceedings in the cas e that . . . a prior petition was filed attacking the conviction
and was resolved on the merits, the judge shall enter an order dismissing the petition.”
As noted above, Petitioner candidly admits that he had access to the
alleged “Brady” material prior to the hearing on the first petition for po st-
conviction relief. There is no evidence in the record to suggest that Petitioner
-5-
was not provided an opportunity for the presentation of claims at a meaningful
time and in a m eaningful m anner as req uired by Burford, 845 S.W.2d at 208.
There fore, this issu e is withou t merit.
F INDING THAT ALLEGED EXCULPATOR Y INFORMATION WAS N OT “BRADY” MATERIAL
The trial cou rt was ju stified in dism issing this sec ond p etition for
post-conviction relief on the basis that it had been filed after expiration of the
statute of limitations, and another petition for relief had already been filed and
heard on the merits. However, the trial court erred in relying upon Tennessee
Code Annotated section 40-30-206(f) to support dismissal of the petition without
an evide ntiary hea ring.
In its order dismis sing the petition, the trial court stated that the
allegations in the petition, even if true, failed to show that the Petitioner was
entitled to relief, failed to show that the claims for relief had not been waived, and
made a finding that the allege d excu lpatory eviden ce did not constitute “Brady”
mate rial. In its ruling from the ben ch, the trial court expressed doubt that
Petitione r could pro ve the alleg ations co ntained in the petition .
Included within the petition are the allegations that the prosecution
know ingly presented perjured testimony during the trial and withheld exculpa tory
information, among other c laims . In esse nce, it appears from the record that the
trial court m ade a d etermin ation, witho ut an evid entiary hearing, that it did not
believe the allegation s.
-6-
The standa rd in Ten nesse e Cod e Anno tated sec tion 40-3 0-206(f)
requires the trial court to assume the facts alleged to be true, and then make a
determination that the Petitioner is still not entitled to any relief. Also, there are
allegations in the petition that the claims fo r relief were n ot waived . We
respe ctfully find that the trial court applied the wrong standard of review and the
petition shou ld not have been dismissed pursuant to Tennessee Code Annotated
section 40-30-206(f). However, since we determined that the petition was
prope rly dismiss ed bec ause it ha d been filed after exp iration of the statu te of
limitations and a prior post-conviction petition had been filed and heard on the
merits, any error by the trial court was harmless.
T RIAL COURT’S JURISDICTION
Petitioner argues that Judge James C. Witt did not have jurisdiction
to enter an order dismissing the petition for post-conviction relief. In support of
his argument, he relies upon Tennessee Code Annotated section 40-30-205(b)
which provides as follows:
At either the trial proceeding or an appellate proceeding reviewing
the proceeding, the presiding judge of the ap propr iate co urt sha ll
assign a judge to hear the petition. The issue of competency of
counsel may be heard by a judge other than the original hearing
judge. If a presiding judge is unable to assign a judge, the chief
justice of the supreme court shall designate an approp riate judge to
hear the matter.
It appears from the record that Judge Witt was designated to preside
over the trial of the original charges and also was designated to hear the first
petition for post-conviction relief. Counsel for Petitioner did not challenge the
-7-
approp riateness of Judge Witt to hear the case until the morning of the hearing
on the S tate’s mo tion to dism iss.
W hile we recognize that the language contained in Tennessee Code
Annotated section 40-30 -205(b) app ears to be man datory , we als o note there is
nothing in the record to indicate that the presiding judge of the Circuit Court of
Cam pbell County would not appoint Judge Witt to hear this particular petition.
Even if it was error for Judge Witt to hear the State’s motion to dismiss without
strict compliance with Tennessee Code Annotated section 40-30-205(b), we hold
that it was harmless error. In May v. Sta te, 589 S.W.2d 933, 934 (Tenn . Crim.
App. 1979), our court held that it was harmless error for the trial court to dismiss
a petition for post-conviction relief with out an eviden tiary he aring a nd no t com ply
with a statute requiring the court to designate a judge other than the one who
presided at trial to hear a related post-conviction matter. This issue is without
merit.
Finding no reversible error, we affirm the judgment of the trial court.
The senten ce of dea th will be carried out as provided by law on the 8th day of
April, 1998, unless otherwise ordered by the Tennessee Supreme Court or other
proper a uthority.
____________________________________
THOMAS T. W OODALL, Judge
CONCUR:
___________________________________
DAVID H. WELLES , Judge
-8-
___________________________________
JOHN K. BYERS, Senior Judge
-9-
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361 F.2d 335
Allison T. WILLIAMS, Appellant,v.Raymond W. ANDERSON.
No. 15755.
United States Court of Appeals Third Circuit.
Argued May 20, 1966.Decided June 1, 1966.
David Snellenburg, II, Wilmington, Del., for appellant.
Charles L. Paruszewski, Chief Deputy Atty. Gen., Wilmington, Del., for appellee.
Before STALEY, Chief Judge, and McLAUGHLIN and SMITH, Circuit Judges.
OPINION OF THE COURT
PER CURIAM.
1
The judgment of conviction of appellant in the Delaware Superior Court on its own particular facts is not in conflict with Jackson v. Denno, 378 U.S. 368, 84 S.Ct. 1774, 12 L.Ed.2d 908 (1964) or with Escobedo v. State of Illinois, 378 U.S. 478, 84 S.Ct. 1758, 12 L.Ed.2d 977 (1964), whether or not finally held retrospective in its application or with United States ex rel. Russo v. State of New Jersey, 351 F.2d 429 (3 Cir. 1965). In all other aspects the state trial was free from substantial error.
2
The judgment of the District Court will be affirmed.
|
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Electronically Filed
Supreme Court
SCWC-XX-XXXXXXX
08-OCT-2018
09:11 AM
SCWC-XX-XXXXXXX
IN THE SUPREME COURT OF THE STATE OF HAWAII
JAMES K. LIBERO,
Petitioner/Petitioner-Appellant,
vs.
STATE OF HAWAII,
Respondent/Respondent-Appellee.
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-XX-XXXXXXX; S.P.P. NO. 17-1-0013(2); CR. NO. 98-0697(2))
ORDER DISMISSING APPLICATION FOR WRIT OF CERTIORARI
(By: Recktenwald, C.J., Nakayama, McKenna, Pollack, and Wilson, JJ.)
It appearing that the judgment on appeal in the above-
referenced matter not having been filed by the Intermediate
Court of Appeals at the time the application for writ of
certiorari was filed, see Hawaii Revised Statutes § 602-59(a)
(2017); see also Hawaii Rules of Appellate Procedure (HRAP) Rule
36(b)(1) (2016),
IT IS HEREBY ORDERED that Petitioner’s application for
writ of certiorari, filed September 28, 2018, is dismissed
without prejudice to re-filing the application pursuant to HRAP
Rule 40.1(a) (2014). (“The application shall be filed within 30
days after the filing of the intermediate court of appeals’
judgment on appeal or dismissal order, unless the time for
filing the application is extended in accordance with this
Rule.”).
DATED: Honolulu, Hawaii, October 8, 2018.
/s/ Mark E. Recktenwald
/s/ Paula A. Nakayama
/s/ Sabrina S. McKenna
/s/ Richard W. Pollack
/s/ Michael D. Wilson
2
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699 S.E.2d 924 (2010)
STATE
v.
David John WILLIAMS.
No. 33P10.
Supreme Court of North Carolina.
June 16, 2010.
Daniel P. O'Brien, Assistant Attorney General, for State of North Carolina.
Jarvis John Edgerton, for David John Williams.
The following order has been entered on the motion filed on the 22nd of January 2010 by State of NC for Temporary Stay:
"Motion Dissolved by order of the Court in conference this the 16th of June 2010."
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13 Cal.App.2d 573 (1936)
JOHN TURNER, Respondent,
v.
THE REDWOOD MUTUAL LIFE ASSOCIATION OF FRESNO, CALIFORNIA (a Corporation), Appellant.
Civ. No. 1769.
California Court of Appeals. Fourth Appellate District.
April 29, 1936.
Clyde E. Cate for Appellant.
Sutherland, Dearing & Jertberg for Respondent.
Marks, J.
This is an appeal from a judgment in favor of plaintiff recovered on a policy of life insurance issued October 19, 1928, by defendant upon the life of Maude Turner, who died on October 23, 1934. The statement of the question for decision on this appeal, required by section two of rule VIII, Rules for the Supreme Court and District Courts of Appeal, is thus stated by defendant on the first page of his opening brief: "Is the privilege of confidential communications created by Section 1881, subdivision 4 of the Code of Civil Procedure of the State of California (Physician and client) waived for all purposes when it appears that a written waiver is given by the insured to an insurance association?"
Under date of October 18, 1928, Mrs. Turner signed an application for membership in the defendant corporation for a policy of insurance. The application was granted and the policy issued the following day without medical examination. The policy incorporated the application by reference. The application contained the following provision: "I hereby authorize any doctor at any time to give to said association any information he or she may have regarding me." The following questions were asked and answered: "What doctors have you consulted during last three years? Dr. Newton & Vanderburg. From what illnesses have you suffered during the last three years? Droppage of bladder (fully recovered). ... Have you ever had an operation? Operation for small rupture, 1921 ... I am ... in good health and so far as I know have no disease or other condition that would prevent me from obtaining life insurance."
The answer sought to relieve defendant from liability under its policy because of alleged fraud on the part of the insured in making untrue answers in her application for the policy and in an application for its reinstatement made *576 July 10, 1934. Defendant asserts that Mrs. Turner had suffered from twenty-three ailments during the period between October 18, 1925, three years prior to the date of the application, and the date of her death, and that these were concealed from defendant constituting fraud on her part voiding the insurance. It sought to support this defense by the evidence of the physicians who had attended Mrs. Turner. The trial court excluded the evidence of these witnesses under the provisions of subdivision four of section 1881 of the Code of Civil Procedure. Defendant maintains that the provisions of this section were waived by Mrs. Turner by the quoted paragraph in her application for insurance and that the testimony of the physicians who had treated her was therefore admissible. The precise question seems to be a new one in California. It must be admitted there is considerable authority from other jurisdictions supporting the position of defendant.
[1] In approaching the question we must bear in mind two well-settled rules of construction in California. (1) That the provisions of subdivision four of section 1881 of the Code of Civil Procedure should be liberally construed in favor of the patient (Kramer v. Policy Holders etc. Assn., 5 Cal.App.2d 380 [42 PaCal.2d 665]; McRae v. Erickson, 1 Cal.App. 326 [82 P. 209]), and, (2) that as the application and insurance policy were both prepared by the insurance carrier, and the provisions here in question are invoked to forfeit the policy, their terms should be strictly construed against it. (Witherow v. United American Ins. Co., 101 Cal.App. 334 [281 P. 668].)
[2] A very similar situation under a statute quite like subdivision four of section 1881 of the Code of Civil Procedure, where the policy of insurance contained a waiver of the privilege of physicians, was before the Supreme Court of Iowa in the case of Pride v. Interstate Business Men's Acc. Assn. of Des Moines, 207 Iowa, 167 [216 N.W. 62, 62 A.L.R. 31]. That court said: "It is contended by appellant that by such application the insured waived the privilege of the statute on confidential communication. It is undoubtedly true that a patient may waive his privilege, and that he may do so by contract in advance. But it is contended by appellee that the proviso above quoted has no application to the particular question before us. It will be noted from a reading of the quoted proviso that the waiver speaks in *577 the present and in the past tense, and that it does not in terms refer to future communications. The appellant construes this proviso as though it read as follows:"
'"In so far as you are permitted to do so under the laws of the state in which you now reside, for yourself and for your beneficiary do you consent that any physician or surgeon who has been consulted by you (or may hereafter be consulted by you) may be examined,' etc. (The parentheses are ours.)"
"We think appellee's position is well taken, and that the insured did not purport to waive the confidence of communications which he might thereafter make. The parenthetical words are not in the proviso, and the appellant is not entitled to enlarge, by interpretation, the policy which was formulated by itself."
The Supreme Court of Michigan also considered the same question in the case of Gilchrist v. Mystic Workers of the World, 196 Mich. 247 [163 N.W. 10], and went so far as to hold that the waiver was against public policy and void. (See, also, Robinson v. Supreme Commandery, 38 Misc. 97 [77 N.Y. Supp. 111]; Meyer v. Supreme Lodge, Knights of Pythias, 82 App. Div. 359 [81 N.Y. Supp. 813]; Meyer v. Supreme Lodge, K. of P., 178 N.Y. 63 [70 N.E. 111, 64 L.R.A. 839]; Supreme Lodge, K. of P., v. Meyer, 198 U.S. 508 [25 S.Ct. 754, 49 L.Ed. 1146].)
In the case of Geare v. United States Life Ins. Co., 66 Minn. 91 [68 N.W. 731], the Supreme Court of Minnesota had a similar question before it. It was there held that the waiver did not extend to any communications made after the date of the policy and that an application for reinstatement reverted back to the date of the policy and did not constitute a new waiver.
[3] Under the foregoing rules, the only illness of deceased which the proffer of proof shows to be material here, and which was not disclosed in the application for insurance was an operation performed on deceased in 1926. It should be remembered that plaintiff disclosed an operation in 1921 and stated that she had suffered from "droppage of bladder" within three years prior to October 18, 1928. While the proffer of proof shows that the operation in 1926 was not on Mrs. Turner's bladder, but an organ in close proximity to it, there is nothing to show that she did not believe it was *578 on her bladder and not on another organ. She gave the names of her attending physicians and defendant could have ascertained the exact nature of her illness and treatment had it sought that information before it issued its policy. There is nothing to show that the operation was not a complete success and that she had not "fully recovered" from that illness as stated in the application.
As we have observed, defendant did not require an examination by a physician of any of its policyholders. It issued its policies upon the statements contained in the applications and in the instant case one day after the date of the application which informed defendant that the applicant had suffered an illness and had been treated by physicians within the specified period of three years. Defendant had placed at its disposal the exact source from which it could obtain the information which it now maintains was withheld from it. It did not choose to make any inquiry but issued its policy with extreme promptness, to say the least, and accepted deceased's money for six years, during all of which time defendant led her to believe she had a valid and enforceable policy of insurance on her life. Under such circumstances defendant should not be permitted to come into court after death had sealed the insured's lips and prevented her from explaining, if she could, why she did not mention an operation in 1926, when she did mention an illness and treatment by physicians which, we conclude from the evidence and proffer of proof, occurred at the same time as the operation. The illness and some treatment, though not the correct organ involved, were disclosed, and only the fact of an operation to effect a cure was withheld. As defendant made no investigation when it should and could have, and as it issued its policy or insurance, accepted Mrs. Turner's money for six years and lulled her into the secure belief that she had a valid policy of life insurance, it must be held that it waived the misstatement in the application and is now estopped from asserting the purported fraud.
[4] Defendant bases its defense upon the further fact that in July, 1934, an application for reinstatement was filed in which it was stated that Mrs. Turner was in good health and had not consulted any physicians, when it could prove by attending physicians, if permitted, that those statements were false. The evidence shows this application was not *579 signed by Mrs. Turner. There is nothing to show that she knew anything about it. The record discloses that her adopted son went to the office of defendant in Fresno and was requested by an employee in charge of reinstatement to make out and sign the application, which he did in the presence of the employee and paid the premiums on the policy. Mrs. Turner was not in Fresno at that time. The statements in this application show that they relate more to the son than to Mrs. Turner.
[5] The record shows that on the fifteenth of each month defendant mailed Mrs. Turner a death assessment notice requiring payment of a death assessment on the first of each succeeding month. On each notice was printed, "If not paid within fifteen days from date mailed, insurance will lapse." The records introduced by defendant show that the death assessment was paid by Mrs. Turner on the first of the month on but four occasions. On all others it was paid and accepted on later dates and only on the one occasion was an application for reinstatement made, and, in so far as we know, Mrs. Turner knew nothing about that instance. Under these facts the defendant waived the right to forfeit the policy because the death payments were made after the dates upon which they were due and the application for reinstatement signed by the son was not necessary to continue the policy in force. (Vinther v. Sunset Mutual Life Ins. Co., 11 Cal.App.2d 118 [53 PaCal.2d 182]; Knarston v. Manhattan Life Ins. Co., 124 Cal. 74 [56 P. 773]; Bryson v. National Travelers Cas. Co., 206 Cal. 475 [274 P. 957].)
[6] A further ground exists for rejecting many of defendant's contentions of fraud practiced by Mrs. Turner as it fails to appear that she knew of the ailment from which she was supposed to be suffering at the time of and prior to the issuance of the policy, except "droppage of bladder", which she disclosed, as well as others prior to filing the application for reinstatement. In the case of Wills v. Policy Holders Life Ins. Assn., 12 Cal.App.2d 659 [55 PaCal.2d 920], provisions similar to those in the instant case were contained in the application for insurance. The court there said: "There is no substantial evidence to support the judgment which was rendered against the plaintiff in the present case. The burden was on the defendant to prove as a matter of defense that the statements of the insured which are contained *580 in her application were not only untrue but that she knew they were false or at least that she had reasonable cause to believe they were false. ... The mere fact that insured first said that she was 'in good health', in the absence of evidence that she knew or believed that she was not in good health, is not such misstatement of fact or fraud as will render an insurance policy void. (Burr v. Policy Holders Life Ins. Assn., 128 Cal.App. 563 [17 PaCal.2d 1014]; 4 Cooley's Briefs on Insurance, 2d ed., p. 3296, sec. 17, subd. [i].) In the Burr case above cited it is said in that regard: 'The term "good health" in the life insurance policy or application is comparative, and an assured is in good health unless affected with a substantial attack of illness threatening his life or with a malady which has some bearing on the general health. It does not mean perfect health; nor would it depend upon ailments slight and not serious in their natural consequences.' And in 2 Cooley's Briefs on Insurance, at page 3296, it is said with respect to the use of the term 'good health': 'If the applicant is free from apparent sensible disease, and unconscious of any derangement of important organic functions, he may truthfully say that he is in good health, although he may have some slight or temporary indisposition.' The preceding definitions of the term 'good health' are peculiarly applicable to the facts of this case, for the very next statement of the applicant is that 'so far as I know have no disease'. That statement regarding the general state of the applicant's health upon which the respondent relies does not constitute fraud nor furnish grounds upon which the obligation of the insurance company may be repudiated. In the absence of evidence to the contrary, we must assume the insured believed she was in good health at the time she signed her application for a policy."
What we have said disposes of the question involved in this appeal as stated on the opening page of defendant's brief. Defendant argues two other questions which are not there stated. While we are probably not required to consider questions not so stated yet we will give them our attention.
[7] Defendant introduced in evidence the death certificate prepared and filed after the death of Mrs. Turner. This was later stricken out on motion of plaintiff. Defendant urges this ruling as reversible error. Neither the certificate nor a summary of its contents appear in the record. Assuming *581 that it was admissible in evidence, and that it was error to strike it out, still we cannot hold the alleged error prejudicial because we know nothing of the contents of the document. It is incumbent on defendant to bring up a sufficient record upon which we may determine the prejudicial nature of any alleged erroneous ruling of the trial judge. As it has failed to do this the error, if any, cannot be considered as prejudicial.
[8] The trial court gave judgment against defendant for $1500. The insurance policy had a maximum face value of that amount but contained a provision to the effect that the beneficiary should only receive the amount raised by a death assessment of one dollar on each member in good standing, but not exceeding the sum of $1500. There was no evidence introduced showing the number of members of defendant subject to the assessment, and its counsel urges that in the absence of evidence that there were fifteen hundred members in good standing, it was error to render judgment for the full amount of $1500.
It is alleged in the complaint, on information and belief, that on the date of the death of Mrs. Turner defendant had sufficient members in good standing so that at least the full sum of $1500 would have been produced if a death assessment had been levied at the rate and in the manner provided in the insurance policy. This allegation was denied in the answer for lack of information and belief, and not otherwise.
It is evident that defendant had possession of its own records, an examination of which would have disclosed the exact number of its members in good standing at the time of the death of Mrs. Turner. This information would have enabled defendant to answer the allegation of the complaint definitely. The possession of such information rendered abortive its attempt to deny the allegation for lack of information and belief. A denial upon information and belief or for lack of information and belief of an allegation in a verified complaint where the facts alleged and attempted to be denied are within the actual knowledge of a defendant, raises no issue and is in effect an admission of the truth of the allegation. (McLellan v. Cocola, 133 Cal.App. 9 [24 PaCal.2d 200]; Boscus v. Bohlig, 173 Cal. 687 [162 P. 100]; Goldwater v. Oltman, 210 Cal. 408 [292 P. 624, 71 A.L.R. *582 871].) The allegation of the complaint not having been denied the trial court did not err in entering judgment for the full amount of $1500. (Taketa v. Policy Holders Life Ins. Assn., 131 Cal.App. 551 [21 PaCal.2d 646].)
Judgment affirmed.
Barnard, P. J., and Jennings, J., concurred.
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243 Cal.App.2d 710 (1966)
LINDA GUTIERREZ, a Minor, etc., Petitioner,
v.
THE SUPERIOR COURT OF THE CITY AND COUNTY OF SAN FRANCISCO, Respondent; OJAI VALLEY INN et al., Real Parties in Interest.
Civ. No. 23593.
California Court of Appeals. First Dist., Div. One.
July 28, 1966.
David B. Gold for Petitioner.
No appearance for Respondent.
Ernest Arnold, Sedgwick, Detert, Moran & Arnold, Robert A. Seligson, John P. Hardy, Bledsoe, Smith, Cathcart, Johnson & Rogers and Clyde R. Rockwell for Real Parties in Interest.
MOLINARI, J.
In this mandamus proceeding the essential question for determination is whether the trial court could disregard the residence of a party who had been sued by a fictitious name, and whose true name was substituted after a motion to change venue, but before the hearing thereon. We have concluded that the court below was required to consider the residence of such party in determining the motion for change of venue, and that since the residence of such defendant was established to be in San Francisco County, the trial court erred in ordering a change of venue to Ventura County. In reaching this conclusion we have determined that the trial court was also in error in finding that plaintiff's joinder of such party defendant was not made in good faith.
In the instant action a complaint for damages for personal *714 injuries was filed on January 11, 1966 [fn. 1] by plaintiff in San Francisco County naming Ojai Valley Inn, Ojai Hotel Company, Northrop Architectural Systems and 15 Does as defendants. The complaint alleged that plaintiff sustained injuries when she came into contact with certain sliding glass doors while a paying lodger at the Ojai Valley Inn. It was alleged that defendants Ojai Hotel Company and Does One through Eight were the owners and operators of Ojai Valley Inn; that defendants Northrop Architectural Systems and Does Nine through Eleven were the manufacturers, fabricators, distributors and installers of the subject glass doors; and that defendants Does Twelve through Fourteen were the manufacturers, fabricators and distributors of the glass used in said doors. With respect to the charging allegations, the complaint was framed in two "causes of action," the first alleging negligence against all of defendants "in designing, manufacturing, constructing, selling, distributing, installing and maintaining" the hotel premises and the subject doors; and the second seeking recovery on a warranty theory against Northrop Architectural Systems and Does Nine through Fourteen.
The subject complaint specifically alleged that Northrop Architectural Systems and Does Nine through Fourteen "have their principal place of business in the City and County of San Francisco" and alleged that the true names and capacities of all defendants were unknown to plaintiff "who therefore sues said defendants by such fictitious names and designations."
On March 15, Ojai Hotel Company, a corporation (hereinafter referred to as Ojai), filed a notice of motion for change of venue wherein it alleged that it was the defendant sued as Ojai Valley Inn, Ojai Hotel Company and Does One through Eight. The notice stated that on April 1, or as soon thereafter as the matter could be heard, Ojai would move to transfer the cause to Ventura County. The motion was predicated on the allegation that the alleged injury took place in Ventura County, that Ojai's principal place of business was in Ventura County, and that none of defendants resided or had their place of business in San Francisco County. A declaration of facts in support of the motion made by the attorney for Ojai was filed in conjunction with the motion. A similar motion, supported by the declaration of its attorney, was filed on March 21 by Northrop Architectural Systems, a corporation (hereinafter referred to as Northrop), alleging that its place *715 of business was in Los Angeles County and that Ventura County was the proper place for trial of the action.
The motions for change of venue were not heard on April 1 but were apparently continued by stipulation to either April 7 or 8. [fn. 2] On April 6 a declaration of service was filed showing that on March 25 Libbey-Owens-Ford Glass Company, a corporation (hereinafter referred to as Libbey), was served as "Doe Twelve" in San Francisco County, and on the same day a "First Amendment to Complaint" was served and filed by plaintiff reciting that pursuant to section 474 of the Code of Civil Procedure [fn. 3] defendant sued in the complaint under the fictitious name of "Doe Twelve" was thereby amended to read "Libbey-Owens-Ford Glass Company." Additionally, on April 6 counsel for plaintiff filed a declaration stating that on March 25 he had ascertained the name of "Doe Twelve" and served Libbey as "Doe Twelve"; that Libbey was an Ohio corporation doing business in California and had designated with the Secretary of State its principal place of business in California as 635 Rialto Building, San Francisco, and the C T Corporation System as its agent to accept service; that Libbey had complied with former section 6202 of the Corporations Code of the State of California; that service of summons and complaint was effectuated by service upon said designated agent on March 25; that on April 6, "a substitution of name" was filed substituting Libbey for "Doe Twelve"; that Libbey, accordingly, at all times mentioned in the complaint was a resident of San Francisco County; that Libbey was a necessary party to the action as a manufacturer and distributor of the glass installed in the doors with which plaintiff collided; and that if this glass was defective in its manufacture, construction and distribution as alleged in the complaint, Libbey would be liable to plaintiff in damages. A supplemental declaration was served and filed by counsel for Northrop prior to the hearing on the motion for change of venue asserting that Libbey had its principal place of business in Ohio, with offices in California consisting of a sales office in San Francisco and a regional sales office in Los Angeles, and that any glass sold in the Ventura area would have been sold out of the *716 Los Angeles office. This declaration concluded, on information and belief, that Libbey had been joined solely for placing venue in San Francisco County.
When the motions for change of venue came on for hearing Libbey had not appeared in the action [fn. 4] nor did it specially appear with respect to these motions. The motions were heard upon the declarations hereinbefore alluded to. In addition there was introduced in evidence by plaintiff a letter from the Secretary of State showing that Libbey had designated San Francisco as its principal place of business in California. On April 8 the motions of Ojai and Northrop to change venue and to transfer the matter to Ventura County were granted. This ruling was based upon the rule that in determining venue the trial court must look only to the residence of defendants who are specifically named at the time the motion for change of venue is tendered; that this rule cannot be circumvented by an amendment substituting the true name of a defendant who has been named in the complaint by a fictitious name; and that plaintiff, in designating Libbey as a defendant, did so solely for the purpose of placing venue in San Francisco County and therefore was not acting in good faith.
Plaintiff contends that although it is the general rule that residence for purposes of venue is to be determined by the pleadings at the time the motion for change of venue is tendered, this rule applies only when a complaint undertakes to make substantive amendments to the pleadings, but does not apply where the amendment merely substitutes the true name of a defendant sued and previously named in the complaint by a fictitious name. Ojai and Northrop maintain that the general rule, requiring that a motion to change venue be determined by the pleadings as they stand at the time the motion is interposed, applies in the instant case. This rule, sometimes denominated the "freezing of facts" doctrine, has been articulated in a myriad of cases. (See Buell v. Dodge, 57 Cal. 645; Brady v. Times- Mirror Co., 106 Cal. 56, 60 [39 P. 209]; Donohoe v. Wooster, 163 Cal. 114, 117 [124 P. 730]; McClung v. Watt, 190 Cal. 155, 159 [211 P. 17]; Prendergast v. Mitchell-Silliman Co., 65 Cal.App. 456, 458 [224 P. 243]; Kallen v. Serretto, 126 Cal.App. 548, 549 [14 P.2d 917]; Sims v. Mains, 131 CalApp. 307, 310 [21 P.2d 447]; Story v. Christin, 137 Cal.App. 484, 486 [30 P.2d 1016]; Vickerson v. Wehr, 42 Cal.App.2d 678, 682 [109 P.2d 743]; Warren v. Ritter, 61 *717 Cal.App.2d 403, 405 [142 P.2d 948]; Konnoff v. Fraser, 62 Cal.App.2d 788, 791-792 [145 P.2d 368]; Abbey v. Schaefer, 108 Cal.App.2d 554, 556-557 [239 P.2d 44]; Wiley v. Long, 148 Cal.App.2d 230, 233 [306 P.2d 1063]; Estep v. Budger Mfg. Co., 164 Cal.App.2d 119, 122 [330 P.2d 298]; Pfefferle v. Lastreto, 206 Cal.App.2d 575, 581 [23 Cal.Rptr. 834, 99 A.L.R.2d 663]; see also 92 C.J.S., Venue, 185, p. 912; 25 Cal.Jur., Venue, 41, p. 907; 51 Cal.Jur.2d, Venue, 93, p. 215; 1 Witkin, Cal. Procedure (1954) Actions, 189, p. 704; The Nonresident Defendant--Seventy Years of Confusion, 4 Stan.L.Rev. 79, 81.) [fn. 5]
[1] Before proceeding with a discussion of the applicability of the subject rule to the instant case it should first be noted that "A corporation ... may be sued in the county where the contract is made or is to be performed, or where the obligation or liability arises, or the breach occurs; or in the county where the principal place of business of such corporation is situated, subject to the power of the court to change the place of trial as in other cases." (Cal. Const., art. XII, 16.) This provision is self-executing, applies to domestic and foreign corporations (Hale v. Bohannon, 38 Cal.2d 458, 470, 475, 479 [241 P.2d 4]; Ellis v. National Casualty Co., 99 Cal.App.2d 77, 79 [221 P.2d 127]), and may be invoked in ex delicto actions (Shida v. Japan Food Corp., 185 Cal.App.2d 443, 447 [8 Cal.Rptr. 271]; Searls v. Greyhound Corp., 180 Cal.App.2d 463, 465 [4 Cal.Rptr. 206]; Ray Wong v. Earle C. Anthony, Inc., 199 Cal. 15, 17 [247 P. 894]). [2] A corporation's principal place of business is its residence for purposes of determining venue. (All-Cool Aluminum etc. Co. v. Superior Court, 224 Cal.App.2d 660, 666-667 [36 Cal.Rptr. 769].) Accordingly, a corporate defendant challenging venue may obtain an order changing venue only to the county of its principal place of business. (Beutke v. American Securities Co., 132 Cal.App.2d 354, 361 [282 P.2d 201].) [3] It should be noted, however, that where more than one corporate defendant challenges venue in the same action, such defendants have an absolute right upon request to have the trial moved to one or the other of the counties of their residence. *718 (See Sausen v. Anderton, 129 Cal.App.2d 324, 326 [276 P.2d 814].)
Adverting to the general rule hereinbefore set out we note that it has been consistently applied where a plaintiff amends his complaint, subsequent to the interposition of a motion for change of venue, by stating a new cause of action against a resident. (See Buell v. Dodge, supra, 57 Cal. 645; Ah Fong v. Stearnes, 79 Cal. 30, 33 [21 P. 381]; Konnoff v. Fraser, supra, 62 Cal.App.2d 788, 791-792; Hayutin v. Rudnick, 115 Cal.App.2d 138, 141 [251 P.2d 707]; 1 Witkin, supra, 240(c), pp. 754, 755.) Our inquiry, however, is whether the subject rule is applicable where an amendment substituting the real name of a party, designated by a fictitious name, but who has been a party from the commencement of the action, is made after a motion for change of venue. In the pursuit of an answer to this query we must take note that there is abundant authority for the proposition that the substitution by amendment of the true name of a defendant sued by a fictitious name does not change the original cause of action. (Farris v. Merritt, 63 Cal. 118, 119; Austin v. Massachusetts Bonding & Insurance Co., 56 Cal.2d 596, 599 [15 Cal.Rptr. 817, 364 P.2d 681], and cases cited therein.)
The earliest case on the point here under consideration and the sole Supreme Court case touching upon it, is Bachman v. Cathry (1896) 113 Cal. 498 [45 P. 814]. There an action was brought in Kern County against Cathry and two fictitiously named parties. Cathry moved to change the place of trial to Inyo County alleging that at the time of the action's commencement all named defendants were residents of Inyo County. After notice of the motion, the plaintiff had an alias summons issued and submitted an affidavit that it was served on Jean Brun, a resident of Kern County and sued as John Doe. The motion was granted, and the plaintiff appealed. The Supreme Court, in affirming the order, noted that "No amendment of the complaint was made, nor was Jean Brun made a defendant by having his name substituted in the complaint for that of John Doe." (P. 500.) It also made the following significant observation: "[T]he court, in considering the action of Cathry, could not consider the residence of Brun until after his name had been inserted in the complaint as one of the defendants." (Italics added; p. 501.) Noting that an individual who is served under a fictitious name may be substituted as a defendant under section 474, Bachman states unequivocally that "until such substitution is made the rights *719 of other parties to the action will not be affected by such service, or by his appearance in the suit." (P. 502.) With respect to the affidavit of the plaintiff to the effect that Brun, a resident of Kern County, had been served with summons as John Doe, the Supreme Court stated that, since the purport of such affidavit was to merely show Brun's residence, the statement therein that Brun was the individual whom the plaintiff intended to make a defendant in the action was merely hearsay.
The next case in point is Kallen v. Serretto, supra, 126 Cal.App. 548, which was decided in 1932. There the plaintiffs sued in San Francisco County for damages arising out of an automobile accident in San Mateo County. The complaint designated Ed Serretto, his wife and two Does as defendants. The complaint alleged the Does to have an interest in the Serrettos' automobile. The Serrettos moved to change venue to San Mateo County, their place of residence. After motion to change, the plaintiffs were allowed to file an amended complaint wherein it was alleged that " 'the defendants, acting through said defendant Ed Serretto, drove and operated their motor vehicle, etc.' " (P. 549.) The plaintiffs' affidavit in opposition to the motion averred that "First Doe" was one Irani, a resident of San Francisco County, however, it did not appear that Irani was named, substituted or served. Motion to change venue was denied. The appellate court, applying the "frozen fact" rule, reversed the order and stated as follows: "When the appellants filed their demurrer and demand for a change of venue they were the only real parties defendant named in the pleadings. In fact, the same condition existed at the time the motion was heard because no other defendant had been brought into court by substitution, appearance or service of process. The amended complaint and the affidavit of plaintiffs' attorney, both of which were filed after appellants' appearance and demand, and from which it might be inferred that some other defendant might be brought in, could not be considered in the hearing of the motion to change. Appellants' residence in San Mateo County being conceded, they were entitled to a change of the place of trial to that county." (Pp. 549-550.) Kallen made no mention of the Bachman case. We note, however, this significant language in Kallen: "[T]he parties defendant 'as revealed by the pleadings existing at the time' (McClung v. Watt [190 Cal. 155, 159 (211 P. 17)]) the demand was made and the demurrer was filed are the only parties to be considered on the motion for a change of the place of trial. ... Fictitious defendants who have not been *720 brought into court are not to be regarded in consideration of the motion for a change of venue. [Citations.]" (Italics added; p. 549.)
The Kallen case and the rule that the propriety of a motion to change venue is to be determined by the pleadings as they exist at the time the moving party first appears were distinguished by Vickerson v. Wehr, supra, 42 Cal.App.2d 678, which was decided in 1941. There an action was filed in San Francisco County against one Terkel, a resident of San Francisco County and the administrator of the estate of Wehr, for money allegedly owed to the plaintiff by the decedent. Prior to appearance Terkel resigned as administrator and his letters were revoked. Thereafter, the decedent's widow was appointed special administratrix. The widow moved to change venue to Alameda County, her place of residence, urging that venue must be determined upon the status of the pleadings at the time she first appeared. The lower court granted the motion, but this order was reversed by the reviewing court upon the rationale that from the commencement of the action the estate, and not the legal representative, was the real party in interest and that no new or different interest was brought into the case by the widow's substitution. The appellate court further disposed of the widow's contention that the matter was controlled by the Kallen case on the basis that Kallen did not deal with the situation of a substituted defendant and that it was "apparent that the language there employed has no application to such a case." (P. 682.) [fn. 6]
In Warren v. Ritter, supra, 61 Cal.App.2d 403, decided in 1943, the appellate court noted both the general rule and the rule of Bachman, but made no mention of the Kallen case. In Warren an action was filed in San Bernardino County against two individuals, a corporation, the State Corporation Commission and various fictitious defendants. One individual defendant filed a motion to change venue to Los Angeles County, the residence of all named defendants except the corporation. The order denying change of venue was reversed, the reviewing court noting that certain amendments [fn. 7] filed by the plaintiff after the motion could not be considered as having any bearing on the decision of the motion under the general rule, and, citing Bachman, stated that the fact that certain defendants were sued under fictitious names could likewise have no *721 bearing because "the rights of another defendant to change the place of trial cannot be affected thereby until the substitution of their true names." (Italics added; p. 405.) With respect to the corporate defendant it was held that since it was a foreign corporation which had not designated a principal place of business in this state, it could not defeat the right of other defendants to move the place of trial to the county of their residence.
The Bachman rule was alluded to in Herschfelt v. Knowles- Raymond etc. Co. (1955) 130 Cal.App.2d 347 [279 P.2d 104]. In that case the plaintiff filed suit in Madera County seeking to quiet title as to a promissory note payable to two individuals and to certain stock in the defendant corporation. Other parties were named as defendants, some by fictitious names. The principal place of business of the corporate defendant was alleged to be in Madera County. The defendants moved to change venue on the basis that all but one of the defendants were residents of San Mateo County and the nonresident had consented to having the matter heard in the latter county. On the date of the motion the plaintiff served a fictitiously named defendant as "Doe I." Thereafter he served another fictitiously named defendant as "Roe I." No further steps by way of substitution or otherwise were undertaken to make these last two individuals party to the action. The appellate court reversed an order denying change of venue. The plaintiff argued, inter alia, that the order was proper since some of the parties, designated by fictitious names in the complaint, who were served, were residents of Madera County. In rejecting this contention Justice Peek said: "Even assuming, but definitely not deciding, that plaintiff had fully complied with the rule so aptly set forth in Bachman ..., the case must nevertheless be reversed for the further reason that plaintiff has failed to bring himself within the provisions of section 474. ..." (P. 351.) The reviewing court held that the plaintiff had not met the requirements of section 474 since his ignorance of the true names of the parties designated by fictitious names was not real and could have been removed by ready inquiry; and secondly, that he did not have them in mind as proper parties at the time he filed his complaint.
[4] Reconciling the foregoing cases we conclude that it is the decisional law of this state that when the plaintiff is truly ignorant of the name of a defendant and therefore designates him by a fictitious name, he may, where such complaint alleges or attempts to state a cause of action against such fictitiously *722 named defendant, amend the complaint to allege the true name of such defendant after a motion for change of venue has been interposed, and prior to the hearing of said motion, and that when such amendment is made the residence of such defendant must be considered in connection with the determination of the motion. This is the rule of the Bachman case. Although Bachman does not explicitly delineate the time during which such amendment may be made, the rule we ascribe to Bachman is implicit from the rationale and language of the opinion. Our understanding of the Bachman rule coincides with that of the Herschfelt and Warren cases where the reviewing court refused to apply the rule because there was no substitution of the true names of the defendants sued by fictitious names by amendment, pursuant to section 474. In Herschfelt a further reason for not applying the rule was the circumstance that the allegation in the complaint that the plaintiff did not know the true names of the said defendants was patently untrue.
A careful reading of the Kallen case discloses that it is not at odds with Bachman and Herschfelt. In Kallen there was likewise no attempt to amend the complaint at any time to allege the true name of the defendant sued by a fictitious name, but, as in Bachman and Herschfelt, the allegation as to the true name was contained in the affidavit in opposition to the motion for change of venue. Upon closer scrutiny, it is also apparent that Kallen was properly enunciating the general rule that after motion for change of venue the trial court cannot permit a substantive change in the complaint, since there the original complaint apparently alleged that the defendants who drove the vehicle in " 'a careless, negligent, and unskilled manner' " (p. 549) were the Serrettos, while the amended complaint sought to include the fictitiously named defendants by alleging that " 'the defendants, acting through said defendant Ed Serretto, drove ... etc.' " (P. 549.)
We note here that the distinguishment we make in the Kallen case parallels that made in Warren, where the appellate court apparently distinguished between a substantive amendment, where the general rule is applicable, and an amendment which merely substitutes the true name of a defendant who has been sued by a fictitious name. This same distinction was made in Vickerson where it was specifically noted that the rule applied in Kallen is not controlling in the "situation of a substituted defendant. ..." (P. 682.)
We are persuaded that the conclusion reached by us is *723 correct because the type of amendment which here concerns us does not state a new cause of action or change the character of the action, nor does it prejudice the rights of nonresident defendants or constitute action by the trial court which is functus officio. [5] It is established that a defendant named in a complaint by a fictitious name is a party to the action from its commencement and an amendment inserting his true name does not change the original cause of action. (Farris v. Merritt, supra, 63 Cal. 118, 119; Austin v. Massachusetts Bonding & Insurance Co., supra, 56 Cal.2d 596, 599.) [6] Indeed, taking cognizance of an amendment substituting the true name of a defendant sued by a fictitious name gives effectiveness to the policy permitting the designation of parties by fictitious names and complies with the mandatory provisions of the statute so providing. Section 474 specifically provides as follows: "When the plaintiff is ignorant of the name of a defendant, he must state that fact in the complaint, ... and such defendant may be designated in any pleading or proceeding by any name, and when his true name is discovered, the pleading or proceeding must be amended accordingly; ..." (Italics added.) [7] Section 474 does not state how or in what manner such amendment is to be made. It appears, however, that it may be made of course within the time prescribed in section 472, or, otherwise, by leave of court under section 473. (See Thomasian v. Superior Court, 122 Cal.App.2d 322, 335 [265 P.2d 165].) Whether such amendment conforms to section 474, that is, whether it is made in good faith or is otherwise proper, is, in either event, a matter which rests primarily with the trial court. (Day v. Western Loan & Bldg. Co., 42 Cal.App.2d 226, 235 [108 P.2d 702].)
[8] Defendants argue that the power of the trial court to pass upon the propriety of the subject amendment was functus officio because jurisdiction to act, except for the limited purpose of determining the motion for change of venue, was suspended by the timely filing of such motion. (See Pickwick Stages System v. Superior Court, 138 Cal.App. 448, 449 [32 P.2d 433]; Beard v. Superior Court, 39 Cal.App.2d 284, 286 [102 P.2d 1087].) This rule applies generally where the challenged act deals with the merits of the case and upon matters which should properly be determined by the court of ultimate venue. (Pfefferle v. Lastreto, supra, 206 Cal.App.2d 575, 580; City of Oakland v. Darbee, 102 Cal.App.2d 493, 503 [227 P.2d 909]; 1 Witkin, supra, 250, p. 769.) It does not apply to certain ancillary steps authorized by statute or matters incidental *724 to a consideration by the court of the motion to change venue. (Pfefferle v. Lastreto, supra, p. 580; City of Oakland v. Darbee, supra, p. 503; Prendergast v. Mitchell-Silliman Co., supra, 65 Cal.App. 456, 459.) Thus, in Pfefferle, a motion to sever the cases of various plaintiffs was held to be incidental to the trial court's determination of the defendants' motion for change of venue; and in Prendergast, it was held that while a motion for change of venue is pending, the plaintiff may request the clerk, who is authorized by section 581 to comply therewith, to dismiss the action as to certain defendants. (Cf. Taaffe v. Bloch, 127 Cal.App. 678 [16 P.2d 303].) The case of Brady v. Times-Mirror Co., supra, 106 Cal. 56, cited by defendants, is clearly distinguishable. There, after a motion for change of venue was heard and was under consideration, the plaintiff moved the court for leave to amend her complaint by dismissing the action against two named nonresident defendants. The motion to amend was granted and thereupon the court denied the motion for change of venue. In reversing the order, the Supreme Court, applying the "frozen facts" doctrine, held that after the motion for a change of the place of trial had been made, "it was not competent for the court to entertain or make an order for the amendment of the complaint in the matter of parties, any more than in the matter of substantive averments." (Italics added; p. 61.) The rationale of the opinion was that the amendment called for judicial action which could only be made after the motion was determined, and that if the defendants were entitled to have their motion granted, they were entitled to have such judicial action determined in the superior court of their own county. Brady took particular note, however, that the action taken by the plaintiff was not in accordance with section 581 but by way of an order directing the plaintiff to amend her complaint. [9] In the instant case there was no motion to amend the complaint by removing a party from the action, but a mere substitution of the true name of a party who was in the action from its commencement. This procedure is an ancillary step authorized by section 474 which plaintiff was specifically entitled to avail herself of and which the trial court was required to recognize if the substitution was in conformity with the legal requirements. The determination of the propriety of such substitution was a matter incidental to a consideration by the trial court of the motion for change of venue. If the substitution was made in good faith and was otherwise proper, the trial court was required to consider the residence of the *725 defendant originally sued by a fictitious name in connection with the motion for change of place of trial; if it was improper, such fictitiously named defendant was to be disregarded in determining such motion.
Turning to the issue of good faith, we first note that in the instant case this issue must be determined in the light of section 474, that is, whether plaintiff's claimed ignorance of the true name of the subject defendant sued by a fictitious name was real at the time she filed her complaint. We must also determine, in light of section 395, plaintiff's good faith in joining the resident defendant. [fn. 8]
With respect to the application of section 474 we find nothing in the record which discloses that plaintiff's allegation that she was ignorant of the true name of defendant "Doe Twelve" was not true. It is clear, moreover, that she did have the party sued by such fictitious name in mind when she filed her complaint since she alleged therein that such defendant was a manufacturer, fabricator and distributor of the glass doors in question. [10] The declaration by plaintiff's counsel that he did not ascertain the true name of Libbey until March 25 is uncontradicted. The only attempt to contradict this assertion is that contained in the supplemental declaration filed by Northrop's counsel that he was informed and believed that Libbey was joined solely for the purpose of having the action tried in San Francisco County. This assertion does not serve to establish the facts therein because an affidavit which is to be used as evidence must be positive, direct and not based upon hearsay. Affidavits made upon information and belief as to the facts purporting to be stated therein are hearsay and must be disregarded. (Riviello v. Journeymen Barbers etc. Union, 88 Cal.App.2d 499, 503 [199 P.2d 400]; Pelegrinelli v. McCloud River etc. Co., 1 Cal.App. 593, 597 [82 P. 695]; Tracy v. Tracy, 213 Cal.App.2d 359, 362 [28 Cal.Rptr. 815].)
[11] Adverting to the applicability of the "good faith" provision of section 395, we note that the usual test by which to determine whether a defendant has been joined in good faith is whether or not the complaint states a cause of action against him. (Taff v. Goodman, 41 Cal.App.2d 771, 776 [107 P.2d 431]; California Collection Agency v. Fontana, 61 Cal.App.2d 648, 653-654 [143 P.2d 507].) [12] The question *726 whether the only resident defendant is improperly joined must be determined from an examination of the pleadings then before the court. Allegations which merely " 'shadow forth the semblance of a cause of action' "against such defendant are proof against assault on the ground that they are sham and frivolous, provided such cause of action is apparently pleaded in good faith and is not prima facie so glaringly and vitally defective as to be beyond correction by amendment. (Gottesfeld v. Richmaid Ice Cream Co., 115 Cal.App.2d 854, 856 [252 P.2d 973]; Dennis v. Overholtzer, 143 Cal.App.2d 606, 608 [299 P.2d 950]; Russello v. Mori, 153 Cal.App.2d 828, 830 [315 P.2d 343]; Freeman v. Dowling, 219 Cal. 213, 216 [25 P.2d 980].)
Defendants contend that even if Libbey was properly substituted for a fictitiously named defendant, they are nevertheless entitled to a change of venue because plaintiff's second cause of action does not state a cause of action against Libbey, the only defendant named therein who is alleged to be a resident of San Francisco County. [fn. 9] [13a] In urging this contention defendants rely upon the well established rule that when several causes of action are alleged in a complaint a motion for change of venue must be granted on all causes if the moving defendant is entitled to a change on any one. (Haurat v. Superior Court, 241 Cal.App.2d 330, 333 [50 Cal.Rptr. 520]; Quick v. Corsaro, 180 Cal.App.2d 831, 835 [4 Cal.Rptr. 674]; Johnson v. Superior Court, 232 Cal.App.2d 212, 217 [42 Cal.Rptr. 645].) Under this rule defendants are entitled to a transfer to the county of residence of either of them unless San Francisco County is proper as to each count.
Defendants' assertion that the second cause of action does not state a cause of action against Libbey is predicated upon Greenman v. Yuba Power Products, Inc., 59 Cal.2d 57 [27 Cal.Rptr. 697, 377 P.2d 897]. That case holds that a manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect which causes injury to a human being. (See also Vandermark v. Ford Motor Co., 61 Cal.2d 256, 260-261 [37 Cal.Rptr. 896, 391 P.2d 168].) Defendants contend that the Greenman rule does not apply unless the person who is injured is a user of the product in question, and that since plaintiff is not alleged to have been a user of the glass doors involved in this case no cause of action *727 is stated under the theory of that case. Plaintiff concedes that her second cause of action is predicated, in part, upon the principle announced in Greenman and Vandermark and asserts that she has pleaded a cause of action under the principle announced in those cases.
A perusal of the allegations of the second cause of action discloses that if the theory relied upon by plaintiff is that delineated in Greenman and Vandermark the complaint, as to this alleged cause, is inartfully drawn. As pleaded, the second cause of action appears to be predicated upon the theory of breach of an implied warranty for merchantability under the sales act. [14] Under the Greenman doctrine the rule of strict liability in tort is not based on the law of contract warranties, nor upon the implied warranties of the Sales Act, nor upon negligence. (Greenman v. Yuba Power Products, Inc., supra, pp. 62-65; Alvarez v. Felker Mfg. Co., 230 Cal.App.2d 987, 994 [41 Cal.Rptr. 514].) [15] To establish liability under the Greenman doctrine it is sufficient that a plaintiff allege and prove that the defendant placed an article on the market, knowing that it was to be used without inspection for defects, that the plaintiff was injured as a result of a defect in the design and manufacture of the article while he was using it in a way it was intended to be used, and that he was unaware that such defect made the article unsafe for its intended use. (Alvarez v. Felker Mfg. Co., supra, p. 994.) [13b, 16] In the instant case all that plaintiff has pleaded, insofar as defendant Libbey is concerned, is that Libbey manufactured, sold, distributed and installed sliding glass doors in the Ojai Valley Inn; that Libbey implied that such doors were merchantable and were fit for the ordinary purpose for which they were sold; that they were not merchantable or fit for such purpose; and that plaintiff was injured when she came in contact with such doors while a guest at the Inn. It is apparent that these allegations do not suffice to plead a cause of action for strict liability in tort. It is doubtful that they suffice to state a cause of action based upon implied warranties of fitness for use and of merchantable quality since it is not alleged that plaintiff was in privity with Libbey, or, at least, that she had the "successive right to the possession and use" of the sliding doors by reason of their being turned over to her by the operators or owners of the Inn. (Peterson v. Lamb Rubber Co., 54 Cal.2d 339, 348 [5 Cal.Rptr. 863, 353 P.2d 575]; see this case for a discussion of the meaning of "privity.") *728
In spite of these deficiencies, however, we cannot say that the complaint does not meet the test set forth in the cases hereinbefore cited; it is not prima facie so glaringly and vitally defective as to be beyond correction by amendment. To the contrary, it does "shadow forth" the semblance of a cause of action against Libbey, either upon the theory of strict liability or that of breach of the implied warranties of fitness for use and merchantable quality. With particular regard to the theory of strict liability, we note that the complaint alleges that the glass doors in question were installed in the common passageway leading into the room which plaintiff occupied and that said doors broke when plaintiff "came into contact with them." This allegation is susceptible of the inference that plaintiff was using such doors. Accordingly, although the allegations of the second cause of action are ineptly pleaded, it cannot be said that said allegations, insofar as they concern Libbey, indicate on their face, and without any showing to the contrary, that Libbey was merely joined for the purpose of retaining venue in San Francisco County.
[17] Turning, finally, to the question of whether Libbey was actually a resident of San Francisco County we note that the record indisputably shows that Libbey has designated such county as its principal place of business in its certificate of qualification prerequisite to its transacting intrastate business in California as required by Corporations Code section 6403. The only showing by defendants as to Libbey's residence is the declaration of the attorney for Northrop that Libbey maintained a "local sales office in San Francisco and has its regional sales office in Los Angeles." This allegation in no way counters or refutes the fact, established by the certificate, as to Libbey's principal place of business. [18] Having filed pursuant to Corporations Code section 6403, Libbey's principal place of business has become fixed by law. (Bohn v. Better Biscuits, Inc., 26 Cal.App.2d 61, 64-65 [78 P.2d 1177]; see 1 Chadbourn, Grossman, Van Alstyne, Cal. Pleading, 337, pp. 271, 275- 276.) [19] It should be noted here that in Hardin v. San Jose City Lines, 103 Cal.App.2d 688, 689 [230 P.2d 31], it was held that a domestic corporation cannot defeat the jurisdiction of the court by showing that it had no office or place of business in the county or district designated as its place of business in its articles of incorporation. Since the principal place of business of a domestic corporation and a foreign corporation is fixed by law (Bohn v. Better Biscuits, Inc., supra, p. 65; Corp. Code, 301, 6403), it would appear that the rule of the Hardin case should apply by analogy *729 where a foreign corporation has filed in accordance with Corporations Code section 6403.
We are not unmindful of the rule announced in Partch v. Adams, 55 Cal.App.2d 1, 6 [130 P.2d 244], wherein it was held that although a corporation's residence is usually deemed to be where its principal office or place of business, as designated in the articles, is located, "that rule is not of inevitable application." The reviewing court there stated further that "There are many situations in the law where, for purposes of venue and jurisdiction, a corporation has been held to be present in any county where it conducts its operations." (P. 6.) The rationale of the case appears to be that a court can give recognition "to the practical aspects of the situation, refusing to be bound by the mere paper domicile of the corporation." (P. 7.) It is thus apparent that Hardin, which did not cite Partch, presents a divergent view from that announced in the latter case. Assuming that Partch declares the correct rule, it does not affect the instant case because the rule announced in Partch applies to a situation where the corporation conducts no business in the county which it has designated as its principal place of business. [20] In the instant case San Francisco County is not merely the "paper domicile" of Libbey, but, as admitted by the declaration of Northrop, Libbey does conduct business in San Francisco County. This undisputed fact, when coupled with the uncontroverted fact that Libbey has declared by the appropriate certificate that its principal place of business is in San Francisco County, requires, in the light of provisions of Corporations Code section 6403 and the holding in Bohn, that Libbey is, as a matter of law, a resident of such county. [fn. 10]
[21] Libbey has filed for the first time on this appeal, an affidavit by its district manager to the effect that in October 1964 Libbey's regional office was moved from San Francisco to Los Angeles and that its San Francisco office then became the District Office for Northern California. We cannot consider this affidavit since it was not presented to or considered by the *730 trial court and we are precluded from considering matters dehors the record. (Dryer v. Dryer, 231 Cal.App.2d 441, 451 [41 Cal.Rptr. 839]; People v. Croft, 134 Cal.App.2d 800, 804 [286 P.2d 479]; Ehman v. Moore, 221 Cal.App.2d 460, 463 [34 Cal.Rptr. 540].) But even if we could, it is apparent that this affidavit in no way refutes the fact that San Francisco County has been fixed by law as Libbey's principal place of business by Libbey's compliance with Corporations Code section 6403 or that Libbey is conducting business operations in such county. The record is entirely barren of any evidence that the certificate filed by Libbey pursuant to said section has been amended because of a change of its principal place of business as is required by Corporations Code section 6403.3.
Let a peremptory writ of mandate issue.
Sullivan, P. J., and Sims, J., concurred.
NOTES
[fn. 1] 1. All dates hereinafter referred to are in the year 1966.
[fn. 2] 2. The record does not disclose when the hearing was actually held. Plaintiff states that it was continued by stipulation to April 8 at her request; Ojai states that it was continued by stipulation at plaintiff's request to April 7. In any event the record discloses that both motions for change of venue were granted on April 8.
[fn. 3] 3. Unless otherwise indicated all statutory references are to the Code of Civil Procedure.
[fn. 4] 4. The record discloses that Libbey had obtained an order extending time to plead to the complaint to April 25.
[fn. 5] 5. One California case states that the merits of a motion for change of venue are determined upon the pleadings as they stand at the time of hearing the motion. (See Peterson v. Sherman, 68 Cal.App.2d 706, 711 [157 P.2d 863].) That case is contrary to the rule generally announced by the California cases and seems patently inconsistent with the rule of Brady v. The Times-Mirror Co., 106 Cal. 56 [39 P. 209], upon which Peterson relies as authority for its statement. (See 92 C.J.S., Venue, 185, pp. 912, 913, fns. 90-91.)
[fn. 6] 6. The same rationale was applied to McClung v. Watt, 190 Cal. 155 [211 P. 17], and Ah Fong v. Stearnes, 79 Cal. 30 [21 P. 381], also urged by the widow respondent in support of her contention.
[fn. 7] 7. The opinion does not disclose the nature of these amendments.
[fn. 8] 8. Section 395 in pertinent part provides: "If any person ... has been made a defendant solely for the purpose of having the action tried in the county ... where he resides, his residence must not be considered in determining the proper place for the trial of the action."
[fn. 9] 9. Neither movant asserts that a cause of action is not stated against Libbey in the first cause which sounds in negligence.
[fn. 10] 10. Although the Supreme Court denied a hearing in Bohn, the views therein expressed by the District Court of Appeal were approved in a memorandum opinion accompanying the order of denial. In Hale v. Bohannon, 38 Cal.2d 458, 474 [241 P.2d 4], the Supreme Court reaffirmed its approval of the holding in Bohn that as to foreign corporations which complied with former Civ. Code 405 such corporations were placed on the same footing under the California Constitution with respect to the applicability of section 395. (See also Ellis v. National Casualty Co., 99 Cal.App.2d 77, 79 [221 P.2d 127].)
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NO. 07-02-0430-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL E
JANUARY 29, 2003
______________________________
IN THE MATTER OF THE MARRIAGE OF JOEY DEWAYNE MCROREY, JR.
LYN ADELLE MCROREY AND IN THE INTEREST OF
A.S.M., S.A.M. AND K.R.M, CHILDREN
_________________________________
FROM THE COUNTY COURT AT LAW NO. 1 OF LUBBOCK COUNTY;
NO. 2002-516,498; HONORABLE RUSTY LADD, JUDGE
_______________________________
Before JOHNSON, C.J., REAVIS, J. and BOYD, S.J.
(footnote: 1)
MEMORANDUM OPINION
On August 8, 2002, the judge of the County Court at Law Number 1 of Lubbock County signed a judgment in cause number 2002-516,498. By restricted appeal,
see
Tex. R. App. P.
30, appellant Lyn Adelle McRorey appeals from such judgment.
Pursuant to motion of appellant, agreed to by counsel for appellee Joey Dewayne McRorey, the judgment of the trial court is reversed and this cause is remanded for further proceedings.
See
Tex. R. App. P.
43.2.
Per Curiaméé!íê
Memorandum Opinion
______________________________
Before QUINN, C.J. and CAMPBELL and HANCOCK, JJ.
Appellant Travis Nealy appeals his conviction for aggravated assault with a deadly weapon after entering an open plea of guilty. His sole issue involves the sufficiency of the evidence to support the conviction. We overrule the issue and affirm the judgment of the trial court.
Appellant was charged with “intentionally, knowingly, and recklessly caus[ing] bodily injury to Sherry Thomas, by driving and operating [a] motor vehicle and causing said motor vehicle to collide with a motor vehicle operated by the said Sherry Thomas . . . .” Furthermore, he contends that the State failed to prove he drove recklessly since he did not remember driving, he was intoxicated, and his conduct only resulted in Thomas suffering minor injuries. According to the record evidence, the vehicles collided after appellant ran a red light at the same time Thomas attempted to drive through the intersection. This was not his first collision that morning, however. Minutes before striking Thomas, he had not only used his van to push a vehicle stopped at a red light but also side-swiped another car. So too had he struck barrels, cones, and curbs appearing on or adjacent to the roadway during the same excursion. Moreover, appellant did not stop after any of these prior incidents but continued on. Indeed, his progress was halted only after colliding with Thomas because his vehicle was rendered inoperable. He also conceded that although he had no recollection of driving that night, his conduct put others at risk. Because voluntary intoxication is not a defense to the commission of a crime,
Tex. Pen. Code Ann.
§8.04(a) (Vernon 2003);
Reyna v. State,
11 S.W.3d 401, 402 (Tex. App.–Houston [1
st
Dist.] 2000, pet. ref’d, untimely filed),
the foregoing evidence was and is sufficient to allow a rational jury to conclude beyond reasonable doubt that appellant drove or otherwise operated his vehicle recklessly.
(footnote: 1)
See
Tex. Pen. Code Ann.
§ 6.03(c) (Vernon 2003) (stating that a
person acts recklessly with respect to circumstances surrounding his conduct or the result of his conduct when he is aware of but consciously disregards a substantial and unjustifiable risk that the circumstances exist or the result will occur);
Blott v. State,
588 S.W.2d 588, 592 (Tex. Crim. App. 1979) (holding that the jury could have inferred from the fact that the defendant drove erratically on the wrong side of the road for a number of miles in broad daylight without any recollection that he was aware of the risk and chose to ignore it).
Accordingly, the judgment is affirmed.
Brian Quinn
Chief Justice
Do not publish.
FOOTNOTES
1:John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by assignment.
1:
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DATA PRACTICES ACT: LABOR AND INDUSTRY: ORDERS: Orders of Commissioner of
Labor and Industry and objections thereto are public data. Minn. Stat. §§ 13.39, 176.181.
852
(Cr. Ref. 523a-17, 5233-27)
August 4, 2000
Gretchen Maglich, Commissioner
Minnesota Department of
Labor and Industry
443 Lafayette Road North
St. Paul, MN 55155
Dear Commissioner Maglich:
In materials submitted to Attorney General Mike Hatch, you set forth substantially the
following:
FACTS
On September 24, 1998, the Commissioner of Labor and Industry, in accordance with
Minn. Stat. § 176.181 subd. 3 (a), issued to certain persons and their companies (“the
Respondents”) an Order and an amended Order to Comply and Penalty Assessment (“the
Orders”). The Orders notified the Respondents that the Commissioner had determined that they
had violated Minn. Stat. § 176.181 subd. 2 by not maintaining workers compensation insurance,
ordered them to obtain workers compensation insurance, and assessed penalties. On October 6,
1998, the commissioner received objections from the subjects of the Orders, submitted pursuant
to Minn. Stat. § 176.181 subd. 3 (b) (_“the Objections”).
Subsequently, the Depaitment of Labor and Industry released, in response to a data
practices request, the Orders, and the Objections. Based upon those facts, one of the individuals
named in the Orders and Objections requested an opinion of the Commissioner of
Administration as to whether the Department of Labor and Industry violated the rights of the
individual by releasing the Orders and Objections to a member of the public.
In an opinion dated February 15, 2000, the Commissioner of Administration determined
that release of those documents violated the data practices rights of the individual named.
You then ask substantially the following:
QUESTION
Did the Minnesota Department of Labor and Industry (DOLI) improperly
disseminate to the public data about the Respondents contained in the following
Gretchen Maglich, Commissioner
Page 2
documents: 1) an Amended Order to Comply and Penalty assessment dated
September 24, 1998; Z) an Order to Comply and Penalty Assessment dated
September 25, 1998; and 3) an Objection to the Amended Order to Comply and
Penalty Assessment filed with DOLI (received on October 6, 1998) by the data
subject’s attorney?
OPINION
It is our opinion that Orders of the Commissioner issued pursuant to Minn. Stat. § 176.18,
subd. 3, and objections to the Orders submitted pursuant to paragraph (b) of that subdivision, are
public data under the Minnesota Govemment Data Practices Data Practices Act. Their release
does not violate the rights of the Respondents named in those documents. '
The Department’s enforcement provisions for mandatory workers compensation
insurance requirements are contained in Minn. Stat. § 276.18, subd. 3 which provides, in part, as
follows:
Subd. 3. Failure to insure, penalty. (a) The commissioner, having reason
to believe that an employer is in violation of subdivision 2, may issue an order
directing the employer to comply with subdivision 2, to refrain from employing
any person at any time without complying with subdivision 2, and to pay a
penalty of up to $1,000 per employee per week during Which the employer was
not in compliance.
(b) An employer shall have ten working days to contest such an order by
filing a written objection with the commissioner, stating in detail its reasons for
objecting. lf the commissioner does not receive an objection within ten working
days, the comrnissioner’s order shall constitute a final order not subject to further
review, and violation of that order shall be enforceable by way of civil contempt
proceedings in district court. If the commissioner does receive a timely objection,
the commissioner shall refer the matter to the office of administrative hearings for
an expedited hearing before a compensation judge. The compensation judge shall
issue a decision either affinning, reversing, or modifying the comrnissioner’s
order within ten days of the close of the hearing. If the compensation judge
affirms the comrnissioner’s order, the compensation judge may order the
employer to pay an additional penalty if the employer continued to employ
persons without complying with subdivision 2 while the proceedings Were
pending.
The Commissioner’s order described in subdivision 3(a) and the employer’s objection
described in subdivision 3(b) were the documents released by the Department. Together they
provide the jurisdictional basis for a contested case proceeding Both the plain wording of the
statutes and rules of statutory construction lead to the conclusion that the Order and Objections
are public under the Minnesota Govemment Data Practices Act (“MGDPA”), Minn. Stat. ch. 13.
Gretchen Maglich, Commissioner
Page 3
Under Minn. Stat. § 13.03, subd. 1, all government data are considered public unless
specifically classified otherwise by state statute, federal law or temporary classification We are
aware of no statute, federal law, or temporary classification that would classify such orders and
objections as other than public.
However, the Commissioner of Adrninistration concluded otherwise in his February 15,
2000 opinion. He opined that the Orders and Objections must, as a matter of law, be classified
as civil investigative data pursuant to Minn. Stat. § 13.39. We disagree That statute provides, in
part, as follows:
Subdivision 1. Definitions. A “pending civil legal action” includes but is
not limited to judicial, administrative or arbitration proceedings Whether a civil
legal action is pending shall be determined by the chief attorney acting for the
state agency, political subdivision or statewide system.
Subdivision 2. Civil actions. (a) Except as provided in paragraph (b), data
collected by state agencies, political subdivisions, or statewide systems as part of
an active investigation undertaken for the purpose of the commencement or
defense of a pending civil legal action, or which are retained in anticipation of a
pending civil legal action, are classified as protected nonpublic data pursuant to
section 13.02, subdivision 13, in the case of data not on individuals and
confidential pursuant to section 13.02, subdivision 3, in the case of data on
individuals Any agency, political subdivision, or statewide system may make
any data classified as confidential or protected nonpublic pursuant to this
subdivision accessible to any person, agency or the public if the agency, political
subdivision, or statewide system determines that the access will aid the law
enforcement process, promote public health or safety or dispel widespread rumor
or unrest.
While these provisions authorize government agencies to withhold, from both the,public
and the data subject, information developed in the course of an investigation, it does not follow
that all documents produced or held by an agency during the time period of an active
investigation must be considered confidential or protected nonpublic investigative data. For
example, in Everest Development Ltd. v. Cin ofRoseville, 566 N.W.2d 341 (Minn. App. 1997),
the court held that settlement documents distributed among the parties could not be considered
protected civil investigative data. The court reasoned that they were not created “for the
commencement or defense of a civil action” and that, by their very nature, such documents could
not be inaccessible to the subject matter of the data. The court explained:
[W]e reject the city’s reasoning that the documents were protected nonpublic data
because the civil legal action was still “pending” until final settlement. The city
seeks to label as protected nonpublic data documents that have already been
distributed to the city, CPIC, and Ryan during the settlement negotiations Such
analysis would lead to an absurd outcome because, under Minn. Stat. § 13.02,
subd. 13, protected nonpublic data is not accessible to the subjects of the data.
Gretchen Maglich, Commissioner
Page 4
See State v. Murphy, 545 N.W.2d 909, 916 (Minn. 1996) (applying Minn. Stat.
§645.17 (1996)) (when construing statutes, court must presume legislature did
not intend absurd results.) The legislature could not have intended to make
settlement documents protected nonpublic data because the documents, by their
very nature, must be made available to the parties to the settlement.
Id. at 344 - 45.
In St. Peter Herald v. City of St. Peter, 496 N.W.2d 812 (Minn. 1993), the supreme court
determined that a city could not treat a notice of tort claim submitted to the city pursuant to
Minn. Stat. § 466.05 as nonpublic investigative data despite the fact that it contained information
pertinent to an anticipated legal action because the data was not “collected” by the city in the
course of an investigation,
In our view, the reasoning of both Everest and St. Peter Herald applies to the documents
referred to in your request. '
First, the “data” contained in the Orders or objections was not “collected” or “retained”
by the agency “as part of an active investigation undertaken for the purpose of the
commencement or defense” of a proceeding
While they were undoubtedly based upon information gathered during an investigation,
the order and the amended order are not part of the investigation process. The Orders were part
of the civil legal action itself, in which the Commissioner had ordered that certain persons and
companies which violated Minnesota law had to comply with the law and be assessed penalties
for their violations. The Orders were the official documents initiating the process that could lead
to an administrative proceeding. In that respect the Orders are analogous to criminal citations,
arrest warrants, or a civil summons, which are at all_ times public in the hands of the originating
agency. See Minn. Stat. § 13.82 subd. 2(j). Likewise the objections filed by the subjects of the
Orders, (which are the official documents that determine the need for an administrative hearing),
were not “collected” by the commissioner in an investigative sense. Cf. St. Peter Herald.
Second, the Orders and Objections are not considered “confidentia ” or “protected
nonpublic” as defined by Minnesota Statutes § 3.02, subd. 3. This statute defines “confidential
data” on individuals as “data which is made not public by statute or federal law applicable to the
data and is inaccessible to the individual subject of that data.” (Emphasis added.) Subdivision
13 of that section defines protected “nonpublic data” as “data not on individuals which is made
by statute or federal law applicable to the data (a) not public and (b) not accessible to the subject
of the data.” (Emphasis added.) In contrast, any order and penalty assessment issued by the
Commissioner must be served upon the subject of the order. Sirnilarly, an objection filed by the
Respondent to the order of the Commissioner is necessarily accessible to the subject of the data
because the subject created it. Thus, its existence and the information contained within it are
known to the subject. As the court observed in Everest Development, the Legislature did not
intend the absurdity of providing that documents which must always be available to data subjects
Gretchen Maglich, Commissioner
Page 5
should be included within a category of data which, by definition, is not normally available to
data subjects.l
Third, it should be noted that the principal purpose of Minn. Stat. § 13.39 is to enable the
agency to protect its investigative work product from premature disclosure in situations which
could prejudice the person being investigated as well as the continuing investigation or
presentation of the agency’s case. The issuance of an Order means that the Commissioner is not
simply investigating Rather, the Commissioner has made a determination and is taking action
against a Respondent. It would serve no public purpose for the Commissioner to keep private
the fact that she has made a determination that a company is not providing statutory mandated
workers’ compensation insurance, Even if the Commissioner was still only investigating the
matter, the statute gives the Commissioner discretion to release “investigative” data in situations
where, as here, it Would advance the law enforcement process,
Finally, this opinion is supported by reference to other provisions of the MGDPA, which
consistently provide for disclosure of the identity of persons formally charged with offenses long
before the legal processes are concluded See, e.g., Minn. Stat. §§ 13.43, subd. 2 (4) (existence
and status of complaints or charges against public employees are public) and 13.82, subd.2
(name, age, sex and address of persons cited, arrested or incarcerated are public). See also Minn.
Stat. §471.705, subd. 1d (c) (meetings concerning disciplinary matters must be open following
initial determination that discipline may be warranted).
Therefore, we conclude that Orders and objections are not civil investigative data within
the meaning of Minn. Stat. § 13.39, and are therefore to be considered public pursuant to Minn.
Stat. § 13.03.
Very truly yours,
MIKE HATCH
Attomey General
State of Minnesota
KENNETH E. RASCHKE, JR
Assistant Attomey General
(651) 297-1141
AG: 3936ll,v. 01
l See Minn. Stat. § 645.17 (1) (the legislature does not intend a result that is absurd, impossible
of execution or unreasonable).
|
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75 B.R. 669 (1987)
In re The GOLD STANDARD AT PENN, INC., Debtor.
Bankruptcy No. 86-02849K.
United States Bankruptcy Court, E.D. Pennsylvania.
July 13, 1987.
*670 Charles C. Coyne, Roger F. Perry, Philadelphia, Pa., for debtor.
Spencer Ervin, Jr., Philadelphia, Pa., for The Christian Ass'n of the University of Pennsylvania.
OPINION
DAVID A. SCHOLL, Bankruptcy Judge.
Presently before the Court is the Debtor's Motion For Approval of the Assumption of its unexpired lease with the landlord of the premises which houses the Debtor's restaurant business pursuant to 11 U.S.C. § 365(b)(1). What we find to be unusual about the Debtor's Motion is that it not only fails to define the parameters of the default, i.e., the amount of rental arrearages *671 is not specified, but also the Debtor specifically asks that the Court not make a finding as to the amount of arrearages. Thus, the Debtor asks the Court to "merely" approve its proposed method of curing the arrearages. The landlord objects to this Motion on the basis that the Debtor has not met the requirements of § 365(b)(1). We are constrained to agree with the landlord and to deny the Debtor's Motion, although we do continue an interim Order in effect pending a determination of the arrearages, which we believe must be determined before we can make a ruling on such a Motion.
The Debtor is THE GOLD STANDARD AT PENN, INC. (hereinafter referred to as "the Debtor"), a corporation operating a restaurant located at 3601 Locust Walk, Philadelphia, Pennsylvania, on the campus of the University of Pennsylvania (hereinafter referred to as "the premises"). The Debtor, as the tenant, and the Christian Association (hereinafter referred to as "the C.A."), a non-profit corporation, as the landlord, are parties to an unexpired lease dated June 1, 1983, for a substantial portion of the premises, the subject of the within Motion. The term of the lease is for ten years with two five-year options to renew thereafter. At this point in time, there are six years remaining on the initial ten-year period.
The Debtor filed a petition under Chapter 11 of the Bankruptcy Code on June 10, 1986. On June 30, 1986, the C.A. filed a Motion for Relief from the Automatic Stay which was originally scheduled to be heard on July 30, 1986. By three separate agreements between the parties, this hearing was continued until October 20, 1986, at which time the Court heard this Motion along with the Debtor's Motion to extend the time within which to assume or reject the subject lease, which had been filed on July 28, 1986, and was also continued twice by agreement of the parties. Following the October 20, 1986, hearing on both Motions, we entered an Order: (1) granting the Debtor's Motion to extend the time in which to assume or reject the Lease until December 19, 1986; (2) directing the Debtor to make weekly rental payments of $1,750.00 as adequate protection instead of the rental payments of $1,350.00 per week which the Debtor was making; and (3) denying the C.A.'s Motion without prejudice to relist said Motion if the Debtor failed to comply with the other aspects of the Order.
On December 15, 1986, the Debtor filed the instant Motion for Approval of Assumption of the lease under certain proposed conditions. The said Motion also requested the interpretation of certain provisions of the lease and resolution of certain disputes over lease provisions. The Debtor filed therewith a proposed Order of five pages which detailed the terms under which the Debtor sought to assume the lease. On January 7, 1987, the C.A. filed its Answer objecting to the assumption of the lease on the proposed terms, asserting that (1) the Debtor was not making all payments currently due under the lease; (2) the Debtor's proposed order would impermissibly modify the terms of the lease respecting the sale of alcoholic beverages; and (3) the Debtor had failed to provide adequate assurance for payment of all arrearages in full.
In keeping with the practice of the parties in this case to agree to continuances while they attempted to resolve their differences, the original hearing date, January 7, 1987, was continued, by agreement, three times until a hearing was held on March 3, 1987. Thereafter, a briefing schedule was entered, allowing both parties the opportunity to file Briefs, the Debtor on or before March 24, 1987, and the C.A. on or before April 7, 1987, which were duly filed.
After we were prepared to render a decision, we decided to conduct a conference with the parties on June 18, 1987, to see if we could urge them to amicably resolve their differences. With the agreement of the parties, we delayed our decision to allow the parties such an opportunity to settle the matter. However, on July 6, 1987, we were informed by the C.A.'s counsel that "settlement could not be reached." Hence, it is necessary that we now proceed to make a disposition of the Debtor's Motion.
*672 The subject lease, which is of record in this case, provides for three types of payments: (1) minimum rent of $70,000.00 per year, payable in monthly installments of $5,833.33 (or $1,350.00 per week); (2) an additional amount measured by two (2%) percent of gross operating revenues and an additional two (2%) percent of liquor sales; and (3) an additional payment of $29,167.00 for rents accrued prior to the Debtor's taking possession of the premises, payable in monthly installments of $1,000.00 which were to commence on June 1, 1985. Both parties agree that neither the second nor the third type of payments cited above have ever been paid by the Debtor to the C.A. In fact, a longstanding problem has been the Debtor's failure to provide the C.A. with reliable figures and records from which the second type of payments could be calculated. Thus, both parties assert a yet undetermined amount of arrearages as the crux of the default under the lease.
We begin our task by quoting 11 U.S.C. § 365(b)(1), which governs the assumption of a lease where default has occurred:
(b)(1) If there has been a default in an executory contract or unexpired lease of the debtor, the trustee may not assume such contract or lease unless, at the time of assumption of such contract or lease, the trustee
(A) cures, or provides adequate assurance that the trustee will promptly cure, such default;
(B) compensates, or provides adequate assurance that the trustee will promptly compensate, a party other than the debtor to such contract or lease, for any actual pecuniary loss to such party resulting from such default; and
(C) provides adequate assurance of future performance under such contract or lease.
It is undisputed that a substantial default has occurred here and that § 365(b)(1) applies. However, it is the amount of the arrearages or the parameters of the default which is unknown. The Debtor apparently seeks to have the Court approve the assumption of the lease with no regard for the requirement of § 365(b)(1)(A). Obviously, the Debtor is not proposing to immediately cure the arrearages, especially since the amount of arrearages is disputed and it proposes to defer the determination of same. Therefore, it is difficult for the Debtor to argue that its proposal both promptly cures the default and provides adequate assurance that the default will be cured and that the C.A. will be compensated for future losses.
We believe, contrary to the Debtor's position, that it is necessary to determine the precise nature of the default first, in order to analyze whether its proposal for curing is prompt and whether adequate assurance has been given for the eventual, but necessarily "prompt," cure. This appears obvious to us because an analysis of whether the cure is prompt and whether adequate assurance has been given must be correlated to the parameters of default or amount of arrearages to be cured.[1]
Assuming arguendo that the arrearages are $50,000.00, which the Debtor suggests over the dispute of the C.A., the Debtor's Motion must be denied because the Debtor fails to make any provision for adequate assurance of a prompt cure, unless we optimistically extrapolate from the testimony of the Debtor's principal, Roger Harmon, that an increase in cash of $1,200.00 from the date of filing as compared to the end of the monthly reporting period of January, 1987, and an increase in accounts receivables of $10,800.00 for the month of January, 1987, concerning which he testified, suffice as adequate assurance for a prompt cure. We do not so find. As was succinctly stated in In re Berkshire Chemical Haulers, Inc., 20 B.R. 454, 458 *673 (Bankr.D.Mass.1982), and is a propos in the case under consideration:
This Court can envision many cases where the promise to cure a default out of future profits might be sufficiently assured as to warrant approval of such a proposal. But, in the case before the Court there is no past history of profitability, there is no competent evidence of future profitability, and the debtor's projections seem nothing more than pipe-dreams.
In fact, the Debtor herein does not offer sufficient evidence to warrant a finding that its economic situation is improving. We have no evidence of either decreased costs in the operation of its business or increased sales. As in In re R.H. Neil, Inc., 58 B.R. 969, 971 (Bankr.S.D.N.Y. 1986), the Debtor herein has not shown that it has a "reasonably demonstrable capability" to promptly cure the arrearages, which the Debtor has conceded to be at least $50,000.00.[2]
Since § 365(b)(1)(A) requires a prompt cure, the question arises as to what will constitute promptness as a matter of law. We agree with the statement that "the period of time that is considered `promptly' may vary in accordance with the circumstances on a case by case basis." In re Lawrence, 11 B.R. 44, 45 (Bankr.N.D. Ga.1981) (10 months to cure $554.10 is held prompt but court speculates that a period in excess of one year is unlikely to be considered prompt). However, we do not agree with the dicta expressed in Lawrence, as we believe that a period of time in excess of a year could be prompt depending on the circumstances. See In re Coors of North Mississippi, Inc., 27 B.R. 918 (Bankr.N.D.Miss.1983) (curing of default of between $110,000.00 and $115,000.00 within a 3-year period is a prompt cure in the circumstances presented there, particularly in light of the prospective longevity of successful business operations).
In re R/P International Technologies, 57 B.R. 869 (Bankr.S.D.Ohio 1985) (hereinafter referred to as "R/P"), is squarely on point with the case sub judice, as it involved a Chapter 11 debtor whose business was housed in a building under a lease who had fallen behind in rental payments. Wishing to continue to occupy those premises, the R/P debtor filed a motion to assume its lease, proposing to cure a stipulated arrearage of $156,000.00 over a 5-year period with interest at ten (10%) percent per annum. The R/P court squarely defined the issue as being whether this proposal met the "promptness" requirement of § 365(b)(1)(A). Noting that the proposed payment period was virtually co-extensive with the claimed life of the lease, and following the holding of Berkshire, supra, at 458, the R/P court was not satisfied as to the promptness of the cure. Id. at 873. The R/P court was also not satisfied that adequate assurance was given for the ultimate curing of the default because, while the debtor was current in its rent, it had not made the agreed-upon monthly payment on arrearages. Id.
In the instant case, assuming arguendo the existence of at least $50,000.00 arrears to be cured, the proposed repayment at the minimal rate of $250.00 per week for thirty-nine weeks per year would result in slightly more than five years, a period of time very close to being co-extensive with the remaining six-year life of the lease, not including the two five-year options to renew the lease. Although the Debtor's proposal provides that it will pay an additional four (4%) percent on its gross sales towards arrearages, there was no testimony as to the probability of its sales exceeding $75,000.00. The only evidence as to sales was the December, 1986, Operating Report showing cash sales of $49,285.34 plus collection of accounts receivables of $20,863.60 for a total of $70,225.54; and the *674 January, 1987, Operating Report showing $36,983.17 in cash sales and $14,597.44 in collected receivables for a total of $51,580.61. The evidence before us does not indicate a high likelihood that the Debtor would ever be responsible for payment of an additional four (4%) percent of gross sales towards arrearages. We note, without deciding, that such a repayment schedule without more, e.g., competent evidence of future profitability, would not appear to be a "prompt" cure.
Section 365(b)(1)(B) also requires that the Debtor compensate or provide adequate protection of prompt compensation for the actual pecuniary loss suffered by a party as a result of the default. This requirement was not addressed or raised by either party. Consequently, we shall only note its existence in passing.
In addition to curing and compensating or providing adequate assurance of promptly doing so, the Debtor must also provide adequate assurance of future performance pursuant to § 365(b)(1)(C). Although what will satisfy § 365(b)(1)(C) will vary from case to case, some possibilities can include sufficient financial backing, escrow deposits or other similar forms of security or guaranty, or even promises. In re Luce Industries, Inc., 8 B.R. 100, 107 (Bankr.S. D.N.Y.1980), rev'd on other grounds, 14 B.R. 529 (S.D.N.Y.1981). We agree with the Luce court that the assurance required "will fall considerably short of an absolute guaranty of performance." Id. Accord, In re Bygaph, Inc., 56 B.R. 596, 605 (Bankr.S.D.N.Y.1986). However, as we stated earlier, the Debtor here has not provided any specific promises resembling adequate assurance of anything.
In addition to objecting to the proposed assumption on the basis that the Debtor has failed to provide adequate assurance for payment of all arrearages in full, the C.A. has also asserted that the Debtor is not making all payments currently due under the lease, i.e., that the Debtor has defaulted in its post-petition rental obligations. This assertion is apparently not contested by the Debtor. In any event, § 365(b)(1) does apply "to both pre-petition and post-petition defaults." In re Bon Ton Restaurant & Pastry Shop, Inc., 53 B.R. 789, 793 (Bankr.N.D.Ill.1985) (citing Berkshire, supra, 20 B.R. at 457; and Luce, supra, 8 B.R. at 104). Therefore, the foregoing analysis of § 365(b)(1) is not changed by the fact of post-petition arrears.
With respect to the C.A.'s contention that the Debtor's proposal would impermissibly modify the terms of the lease respecting the sale of alcoholic beverages, our examination of the lease reveals that it contains no restrictions on the sale of alcohol. Hence, the C.A.'s objection to the assumption of the lease on this basis could not be sustained, and the Debtor may sell alcoholic beverages in keeping with the permits issued by the Pennsylvania Liquor Control Board.
We do not find it necessary to address all of the proposed terms of the Order under which the Debtor seeks approval for the assumption of the lease with the C.A. We have only addressed those terms to which the C.A. has objected or which we believed must be addressed in the Debtor's efforts to cure its default pursuant to § 365(b)(1).
In addition to denying the Debtor's Motion as it stands, we are, in our accompanying Order, also striving to obtain a determination of what the arrearages actually are and what sort of a proposal the Debtor can tender to fashion a sufficiently "prompt" cure for the default, taking into account that the practical time for requiring the Debtor to make significant additional payments must wait until September, when student patronage will render the Debtor at full financial strength.
We have intentionally fashioned the attached Order with short timelines because we have assumed that the Debtor, acting in good faith pursuant to its earlier proposed Order, has already compiled the necessary information to determine the arrearages, and may have already provided it to the C.A. In any event, we strongly believe that the Debtor has derived a significant benefit from the delay in the determination compliance to § 365(b)(1), and we do not *675 wish to accord it any further such benefits unfairly.
However, we recognize that the C.A. also had its remedy pursuant to our Order of October 20, 1986, to relist its Motion for Relief from the Automatic Stay if the Debtor's terms for assumption were unacceptable. Despite the C.A.'s stated dissatisfaction with the proposed terms of assumption, we surmise that the C.A. is not greatly distressed at the Debtor's continued occupation of the premises since it has not moved for relief. In fact, the C.A. has stated its approval of the Debtor's assumption of the lease if done pursuant to different conditions. This may not be surprising when we consider that the lease rental, as compared to the fair market rental, as per the testimony at the October 10, 1986, hearing, is quite liberal to the C.A. Thus, the C.A. is faring quite well if it receives any payments on arrearages in addition to the lease rentals compared to what it would receive (possibly less than the current rent) if the Debtor were forced to liquidate or leave the premises. Also, the C.A. acknowledged, in the October 20, 1986, hearing, that the Debtor made significant improvements to the premises, and that the relationship between the parties, given the circumstances, has remained rather cordial.
On the other hand, we cannot overlook the fact that the Debtor has accumulated a default of admittedly at least $54,000.00. It would take fifty-four months to cure this arrearage at the rate of approximately $1,000.00 per month additional rent that we shall impose upon the Debtor beginning in September, 1987, even with the 13-week "moratorium" that the Debtor requests. Moreover, in so ordering, we are not suggesting that even $1,000.00 extra monthly payments without a moratorium would effect a prompt cure, but merely that payments of at least this amount would be prerequisite.
In sum, we cannot grant the Debtor's Motion. However, we will proceed to enter an Order which will keep the Debtor in place and compel it to begin making payments which are at least in the range that it would have to make to cure the default promptly. We also set forth a schedule to resolve this matter in the fashion which we believe that 11 U.S.C. § 365(b) dictates.
ORDER
AND NOW, this 13th day of July, 1987, upon consideration of the testimony adduced and the briefs of the parties relative to the Debtor's Motion for Approval of its Assumption of an unexpired lease with the Christian Association (hereinafter referred to as the "C.A.") and the C.A.'s objection of the terms of the proposed assumption based upon the requirements of 11 U.S.C. § 365(b)(1), it is hereby ORDERED as follows:
1. The Debtor's Motion is DENIED without prejudice.
2. Through September 3, 1987, the Debtor shall continue to pay the C.A. the amount of $1,750.00 per week each Thursday pursuant to the terms of our Order dated October 20, 1986.
3. Beginning on September 10, 1987, the Debtor shall pay the C.A. the amount of $2,000.00 each Thursday pursuant to the terms of our Order of October 20, 1986.
4. The amount of arrearages under the parties' lease shall be established pursuant to the following schedule:
a. On or before July 31, 1987, the Debtor shall provide the C.A. with a schedule of total sales and sales of alcoholic beverages sold since the commencement of the lease and shall provide the C.A. with a specific statement showing all amounts which the Debtor believes to constitute arrearages under the lease, by category.
b. On or before August 12, 1987, the C.A. shall accept the amount of arrearages as stated by the Debtor or shall provide the Debtor with a specific statement showing all amounts which the C.A. believes to constitute arrearages under the lease, by category.
c. The parties shall have until August 24, 1987, to reconcile any difference between the amounts believed to constitute arrearages. In the absence of agreement, a hearing will be held on
*676 TUESDAY, AUGUST 25, 1987 at 10:00 A.M. in Court Room No. 2 (Room 3718), United States Court House, 601 Market Street, Philadelphia, PA 19106, at which time the statements provided for above, together with such additional evidence as the parties may introduce will be considered for the determination of the amount of the arrearages.
5. The Debtor shall have the right to file another Motion to Assume the Lease in issue, on or before September 18, 1987, or within seven days of the Court's determination of the arrearages after the hearing on August 25, 1987, whichever is later. If the Debtor fails to do so, the Lease shall be deemed rejected.
6. The C.A. may relist its Motion for Relief from Automatic Stay if the terms of paragraph two and three hereof are not complied with, upon the conditions set forth in paragraph one of the Order dated October 20, 1986, if it so chooses.
NOTES
[1] Therefore, were there a sufficient record made, we would be compelled to make a determination of arrearages. However, we find ourselves in a quandary because no evidence was produced from which the Court can fix the arrearages. Because we recognize that the lease is necessary for the reorganization and operation of the Debtor's business, as well as for other reasons hereinafter expressed, we will fashion an Order designed to bring this matter to a head.
[2] We must observe that the Debtor's concession that the arrearages are as low as approximately $50,000.00 is misleading for two reasons. First, the Debtor arrives at that figure by starting at an undocumented $64,000.00 figure as of June, 1986, and crediting itself for monies purportedly owed by the C.A. to the Debtor, but without specifying same. Secondly, the Debtor candidly testified that this figure, calculated in June, 1986, had not been adjusted for accruing arrearages since that date.
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|
157 B.R. 342 (1993)
In Re David J. WILCH, Debtor.
Louis J. YOPPOLO, Trustee, Plaintiff.
v.
David J. WILCH, Defendant.
Bankruptcy No. 92-3248.
United States Bankruptcy Court, N.D. Ohio, W.D.
May 5, 1993.
*343 Jonathan M. Jackson, Bowling Green, OH, for defendant.
MEMORANDUM OPINION AND ORDER
RICHARD L. SPEER, Bankruptcy Judge.
This cause comes before the Court upon Plaintiff's Complaint Objecting to Discharge of Debtor and Defendant's Answer. At the Trial, the parties were afforded the opportunity to present evidence and arguments they wished the Court to consider in reaching its decision. The Court has reviewed the entire record in this case. Based upon that review, and for the following reasons, this Court finds that pursuant to 11 U.S.C. § 727(a)(3), Defendant's discharge should be Denied.
FACTS
Defendant has been employed at the Budd Company as a machine repairman since September, 1978. Prior to 1978, Defendant attended business school in Tiffin, Ohio for approximately one (1) year. While attending business school, Defendant took classes in accounting, business machines and marketing.
Judgment was rendered in Wood County, Ohio against the Defendant for Six Hundred Thousand and 00/100 Dollars ($600,000.00) on October 16, 1991. On November 14, 1991, Defendant sold his 1990 Ford Ranger to his brother for Fifteen Hundred and 00/100 Dollars ($1,500.00). Defendant transferred title to his brother for less than the fair market value as payment in full for a claimed outstanding loan for which there is no written evidence. Also in November, 1991, Defendant sold to Donna Hatcher a boat for Seven Hundred and 00/100 Dollars ($700.00) and a 1984 Harley Davidson Motorcycle for One Thousand and 00/100 Dollars ($1000.00). Between September, 1991 and December 20, 1991, Defendant liquidated what he referred to as his entire life savings and obtained Thirty One Thousand Six Hundred Thirty Two and 04/100 Dollars ($31,632.04). Defendant claims that he contributed One Thousand and 00/100 Dollars ($1,000.00) of the liquidation proceeds to the Salvation Army. Defendant did not obtain a tax statement for this contribution.
With the exception of his experience playing the lottery, Defendant had never gambled. After conducting some research at the library on gambling, Defendant departed for Atlantic City with his entire life's savings. While in Atlantic City, Defendant intended to amass a fortune so that he could return and satisfy the judgment. Lady Luck thwarted his plans and according to Defendant, he lost his entire savings.
Defendant initially contemplated filing bankruptcy on December 29, 1991; however, his first contact with legal counsel was not until March 10, 1992. On March 12, 1992, Defendant sold a motorcycle for One Hundred and 00/100 Dollars ($100.00) and *344 on March 16, 1992, Defendant retained legal counsel. Defendant's petition under Chapter 7 of the Bankruptcy Code was filed on April 1, 1992. At the time that Defendant filed his petition, he had unsecured debts, not related to the judgment, totalling Nineteen Hundred Forty Three and 85/100 Dollars ($1,943.85).
LAW
Section 727 of the Bankruptcy Code reads as follows:
§ 727. Discharge
(a) The court shall grant the debtor a discharge, unless
(2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed
(A) property of the debtor, within one year before the date of the filing of the petition; or
(B) property of the estate, after the date of the filing of the petition;
(3) the debtor has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor's financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case;
(5) the debtor has failed to explain satisfactorily, before determination of denial of discharge under this paragraph, any loss of assets or deficiency of assets to meet the debtor's liabilities;
DISCUSSION
Both parties concur that this case is a core proceeding under 28 U.S.C. § 157(b)(2)(J).
Based upon the evidence presented, Defendant's discharge should be denied based upon 11 U.S.C. §§ 717(a)(3) and 727(a)(5). Section 727(a)(3) provides, in part, that a bankruptcy court may deny the discharge of debts when the debtor has failed to keep or preserve any recorded information from which the debtor's financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case. This discharge objection imposes upon the debtor a duty to maintain records so that the creditors may be able to reconstruct debtor's financial status. In re Dolin, id., (citing In re Underhill, 82 F.2d 258 (2d Cir.1958)). In determining the sufficiency of evidence, the court may consider the sophistication of the debtor. This inquiry should include the education, experience, and the volume of the debtor's business. In re Wilson, 33 B.R. 689, 692 (M.D.Ga.1983).
This Court finds from the evidence that Defendant has the acumen necessary to preserve and keep records. At trial, Defendant presented documentation, which he prepared, itemizing the property he liquidated prior to his trip to Atlantic City. The documentation showed that Defendant had invested in various mutual funds and certificates of deposits. Upon liquidation, his investments were transferred into cash totalling more than Thirty One Thousand and 00/100 Dollars ($31,000.00). Consequently, it is incomprehensible that Defendant's only recollection of how he spent his entire life savings is limited to a contribution made to the Salvation Army. The Court also finds it equally unreasonable that at least for tax purposes, Defendant would not have evidence of such a significant contribution. The Court further finds that based upon the evidence that Defendant has presented to the Court, Defendant's creditors are unable to reconstruct his financial condition. Given these circumstances and Defendant's educational background, this Court can not find that Defendant has any justification for his failure to maintain the appropriate records. Accordingly, Defendant's discharge should be denied.
Title 11 U.S.C. § 727(a)(5) provides that before the determination of denial of *345 discharge, a bankruptcy court may deny the discharge of debts to any debtor who fails to explain satisfactorily any loss or deficiency of assets to meet the debtor's liabilities. Defendant argues that his explanation regarding the gambling trip satisfactorily explains the loss or deficiency in his assets.
This Court finds that Defendant's explanation simply does not pass muster. Defendant, unsophisticated in the methods of gambling, liquidated his entire life savings and went on a trip to Atlantic City for purposes of parlaying his savings into a huge financial gain. Defendant's allegations are not substantiated by any evidence that he even went to Atlantic City or that he disposed of, by gambling, approximately Thirty Thousand and 00/100 Dollars ($30,000.00). Defendant has failed to explain satisfactorily the loss of assets and therefore Defendant's discharge should likewise be denied under 11 U.S.C. § 727(a)(5). See In re Dolin, 799 F.2d 251 (6th Cir.1986) (citing Baum v. Earl Millikin, Inc., 359 F.2d 811, 814 (7th Cir.1966)).
In judging the credibility of the witness and the weight given to his testimony, this Court has considered the witness' age, intelligence, memory and demeanor while testifying. The Court has also considered the reasonableness of the witness' testimony in light of the evidence in the case and any interest, bias, or prejudice that he may have.
In reaching the conclusion found herein, the Court has considered all of the evidence, exhibits and arguments of counsel, regardless of whether or not they are specifically referred to in this opinion.
Accordingly, it is
ORDERED that Defendant's discharge be, and is hereby, DENIED.
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742 F.Supp. 287 (1990)
DETROIT EDISON COMPANY; Duke Power Company; Gulf Power Company; Kansas Gas & Electric Company; Mississippi Power & Light Company; Pacific Gas and Electric Company; Potomac Electric Power Company; San Diego Gas & Electric Company; Savannah Electric and Power Company; South Carolina Electric & Gas Company; Southern California Edison Company; Southwestern Electric Power Company; Wisconsin Power & Light Company; and Wisconsin Public Service Corporation, Plaintiffs,
v.
PACIFIC INSURANCE COMPANY, Defendant.
No. C-87-878-G.
United States District Court, M.D. North Carolina, Greensboro Division.
July 30, 1990.
*288 John L. Sarratt, William G. Ross, Jr., James W. Miles, Jr., Greensboro, N.C., for plaintiffs.
J. Reed Johnston, Jr., Frederick K. Sharpless, Greensboro, N.C., for defendant.
James W. Miles, Jr., Greensboro, N.C., for plaintiff, Potomac Elec. Power Co.
MEMORANDUM ORDER
TILLEY, District Judge:
This dispute centers on the responsibility for the clean-up costs of the premises of a company that abandoned several million pounds of toxic waste. The case stands before the Court on cross motions for summary judgment. For the reasons which follow, the Plaintiffs' motion for summary judgment is DENIED and that of Defendant is GRANTED.
I.
Plaintiffs in this action are various enterprises which produce toxic wastes in the form of PCBs and PCB-contaminated equipment, as a result of their operations. Plaintiffs engaged the services of SED, Inc. ("SED") to remove PCB filled capacitators and related PCB material from their premises and dispose of it in a safe and legal manner. In the course of its business, SED obtained both General Liability Insurance and the policy in question. This policy is entitled, "Environmental Protection Liability." The initial policy was purchased in 1982 and extended at each end of a term into the year in question.[1]
In the spring of 1985, SED became unable to continue its operations or otherwise to dispose of the materials that had accumulated in its facilities in Greensboro. At that time, PCB contaminated materials were dangerously stacked in the warehouses and left out in open truck trailers on the premises.
As generators of the toxic waste in question, Plaintiffs to this action and other customers of SED were identified by the EPA as potentially responsible parties to the environmental hazard presented by the abandoned sites. The parties pooled their resources and had the site decontaminated.
In an attempt to recoup clean-up costs of $5,483,583.72,[2] the Plaintiffs filed this claim against SED and Pacific Insurance, as carrier of the Environmental Protection Liability Policy. SED was subsequently dropped as a party due to its insolvency.
II.
Any discussion of the merits of this case must be preceded by a decision of what law to apply. This dispute focuses on the interpretation of the insurance policy between SED and Pacific Insurance. The jurisdiction of this Court, however, is not based in diversity, but on a federal question under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA").
Neither party contends that the existence of the federal statute should indicate that Congress meant to have federal law applied to the interpretation of insurance contracts *289 in this context. In fact, it is clear that state law is properly applied to the substantive aspects of this dispute. See e.g., Maryland Casualty Co. v. Armco, Inc., 822 F.2d 1348 (4th Cir.1987) (applying Maryland law). The existence of jurisdiction under the federal statute, however, profoundly affects the selection of the choice of law rules to determine which of the state laws is most appropriate.
Because this case is not founded in diversity, the rule in Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), does not bind this Court. No clear Klaxon -type rule exists for federal courts sitting in non-diversity cases involving state law issues. See, e.g., 1A-Pt2 Moore's Federal Practice ¶ 0.325 (1990). Even in cases where the federal law is found to embody or to incorporate state law, a decision to use state choice of law rules would seem only to beg the question. Use of any state's choice of law rules would be a choice of law decision itself. When the parties and properties are as far flung as in this case, any one of a number of states could have interests in having their law applied. Use of the forum state's choice of law rules, moreover, would be nothing less than arbitrary without the Erie foundation in Klaxon.
For these reasons, the Court finds that the proper approach appears in Edelmann v. Chase Manhattan Bank, N.A., 861 F.2d 1291 (1st Cir.1988) (Wisdom, J., sitting by designation). In Edelmann, the court held that federal courts, not sitting in diversity, should apply a federal common law of conflicts to select the proper state law. In determining the federal common law, the court relied on the principals in the Restatement (Second) of Conflict of Laws.
Use of the factors either in section 193 (contracts of insurance) or 188 (general contract considerations) do not make the choice of law in this matter clear. The parties to the agreement are located in Wisconsin and California, the contract was entered into in New York, and the insured premises are in North Carolina, Wisconsin and Ohio. The parties, here, however, contend the choice is only between the laws of New York and North Carolina. The Court, nevertheless, finds that the choice between the laws of these two fora does not change the substantive decision made in this case.
The Court, however, does find that if such a choice were necessary that the law of New York should be applied. While North Carolina does have a significant interest because of the location of the contaminated facility, insured interests were in other states as well. The expectations of the parties could not have been that the contract be subject to varying interpretations dependent only upon the location of an occurrence forming the basis for a claim.
III.
Pacific first declines coverage of the expenses of this clean up on the basis that the policy only includes "... sums which the Insured shall become legally obligated to pay for damages...." Insurance Policy at 1 (emphasis added). Pacific argues that "damages" refers only to moneys paid as the result of legal, rather than equitable, remedies and that clean-up costs under CERCLA have clearly been held to be equitable under federal law.
Plaintiffs concede to the correctness of the characterization of the nature of the remedy. The sharp conflict, however, exists over the proper interpretation of "damages" under the applicable state law. If this case were to be decided under North Carolina law, the resolution of this portion of the dispute would be simple. In C.D. Spangler Construction Co. v. Industrial Crankshaft and Engineering Co., Inc., 326 N.C. 133, 388 S.E.2d 557 (1990), the North Carolina Supreme Court held that "damages" was to be given a nontechnical meaning and to include the sums payable due to an award of either legal or equitable remedies.
The New York law, which seems more relevant to this case, however, is far from clear. In fact, the only decisions from the state courts in this regard were made by Supreme Courts. Use of these lower court decisions to predict the law of New York *290 would engage this Court in an undesirable amount of speculation. For this reason, and because this matter may be resolved on other, more firm grounds, this Court will decline to hypothesize about the future findings of the New York Court of Appeals.
IV.
Pacific next contends that coverage does not extend under Insuring Agreement "A" of the Policy because the injury suffered does not qualify as "personal injury," "property damage," or "impairment or diminution of or other interference with any other environmental right or amenity protected by law."[3] Plaintiffs do not claim either personal injury or property damage, but rather claim that they have been deprived of an environmental right.
Plaintiffs' argument seems to be able to be boiled down to the statement that because they have a statutory right under the federal statutes against SED and the statute in question was promulgated to protect the environment, they have an "environmental right" which Pacific is bound to cover. While this argument is not completely specious, its conclusion flies in the face of the Policy read as a whole and the ordinary meaning to be ascribed to the terms of the Policy.
The Court finds that the term "environmental right" in the context of the insurance policy in question relates only to damage done to third parties that has not been traditionally categorized as personal injury or property damage, but is a legally protected right that could be violated in the type of enterprise in which SED was engaged. The Court envisions these rights as those of the genre recognized in nuisance actions, for example.
The Court finds that the Plaintiffs' argument that these nuisance-type injuries are encompassed solely in the word "amenity" as it is used in the same phrase strains logic. Given that personal injury and property damage were each accorded their own subsection, the conclusion that damage to other amenities and CERCLA liability were listed in the same subsection does not seem consistent with the pattern of drafting.
The Court's interpretation of the language of the Policy also conforms with the other types of insurance carried by SED and the premium paid by SED on the Pacific policy. In addition to the Environmental Liability Protection policy with Pacific, SED also carried a General Liability Coverage policy with Great American and an excess liability policy with Fireman's Fund. Both of these policies contained special exclusions for damage caused by pollution. These exclusions went beyond the normal "pollution exclusion" and did not even cover sudden and accidental occurrences. Without this type of coverage from these policies, the need for the insurance from Pacific becomes clear and the interpretation of the Court does not create duplicative coverage.
In considering the Policy as a whole, the Court finds that the premium paid on the Pacific policy does not reflect an expectation of the parties that Pacific could be held responsible for the CERCLA clean-up costs in question. A sixteen thousand dollar premium does not adequately reflect the exposure that an insurance company would face if held accountable for the clean-up costs of an abandoned property.
As a result, the Court finds that the Plaintiffs did not suffer a violation of one of their "environmental rights" when they were forced to assume the costs of the clean up at the North Carolina locations of SED.
*291 V.
The Plaintiffs also assert that Pacific is obligated to provide coverage pursuant to Insuring Agreement "B" of the Policy as well. This section reads:
The Insurer shall further reimburse the Insured for costs and expenses of operations designed to remove, neutralize or clean up outside of the Insured's premises any substance released or escaped which had caused Environmental Impairment, or could cause Environmental Impairment if not removed, neutralized or cleaned up, to the extent that such costs and expenses have been incurred or have become payable by the Insured as a result of a legal obligation or in an endeavor to avert a loss covered by this policy, provided that such costs and expenses, except in respect of emergency measures undertaken to avert loss, are incurred with prior written consent of Insurer, such consent not to be unreasonably withheld.
Insurance Policy, at 1.
The Plaintiffs argue that the materials in the warehouse and the trailers fit within this section because of the danger of off site contamination posed by their condition of disregard. Because of the undesirability of saying that damage must actually occur, Plaintiffs contend that the Policy should cover preemptory on-site clean ups.
This assessment of the meaning of the Agreement, however, again fails to read this Agreement in context with the remainder of the contract. The Court understands that Insuring Agreement "A" of the Policy is designed to cover those aspects of SED's operations that occurred at the sites listed on the Policy and the damage that might be done to SED's physical neighbors. Agreement "B" extends the coverage of Pacific to cover the aspect of SED's business which included the transport of PCB contaminated materials from its customer's places of business to its own facilities. This interpretation embodies the plain meaning of the phrase "outside of the Insured's premises."
The losses incurred by Plaintiffs do not fall within the unambiguous meaning of the Policy. Under the law of either of the relevant states, no presumption of coverage attaches to unambiguous clauses or policies. See, e.g., Fidelity Bankers Life Insurance Co. v. Dortch, 318 N.C. 378, 348 S.E.2d 794, 796 (1986) ("Only when the contract is ambiguous does strict construction become inappropriate."); Moshiko, Inc. v. Seiger & Smith, Inc., 72 N.Y.2d 945, 529 N.E.2d 420, 533 N.Y.S.2d 52 (1988) (clear insurance policies are enforced as written).
VI.
Defendant also makes claims that coverage should be denied on the basis of exclusions within the Policy and a failure by the Plaintiffs to lodge a claim before the cancellation of the Policy. Because these matters are unnecessary to the Court's decision, these arguments have not been considered.
VII.
Therefore, the Defendant's motion for summary judgment is GRANTED. The Plaintiffs' motion for summary judgment is DENIED.
NOTES
[1] The parties do dispute the date of cancellation of this policy. The Court, however, finds it unnecessary to decide this aspect of Pacific's defense.
[2] Total clean-up costs were $6,052,660.33. The amount sought represents the liability of Plaintiffs and their assigns.
[3] Insuring Agreement "A" reads:
To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay for damages as a result of CLAIMS FIRST MADE AGAINST THE INSURED DURING THE POLICY PERIOD OR WITHIN THE DISCOVERY PERIOD, IF APPLICABLE, FOR:
1. Personal Injury
2. Property Damage
3. Impairment or diminution of or other interference with any other environmental right or amenity protected by law;
caused by Environmental Impairment and arising out of or in the course of the Insured's business and/or locations both as specifically designated in the Policy Declaration.
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
August 10, 2004
Charles R. Fulbruge III
FOR THE FIFTH CIRCUIT Clerk
______________________
No. 03-20882
Summary Calendar
_______________________
UNITED STATES OF AMERICA, Plaintiff-Appellee,
versus
RICHARD N. PATE AND
JESSIE KAY PATE, Defendants-Appellants.
_________________________________________
Appeal from the United States District Court
for the Southern District of Texas
(USDC No. 03-MC-204)
________________________________________
Before SMITH, BARKSDALE, and STEWART, Circuit Judges.
PER CURIAM:*
Defendants-Appellants, Richard N. Pate and Jessie Kay Pate (the “Pates”) appeal a district
court order which denied their claim of Fifth Amendment privilege against self incrimination
pertaining to documents sought by the United States Internal Revenue Service (“IRS”) in a tax
enforcement proceeding. Because, as we explain below, the district court was correct in determining
that the Pates were not entitled to the Fifth Amendment privilege here, we affirm.
*
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.
DISCUSSION
I. Facts & Procedural History
On June 3, 2003 the IRS filed a Petition to Enforce Internal Revenue Service Summons
seeking the enforcement of a summons the IRS had previously served on the Pates requesting
documents and testimony pertaining to the failure of the Pates to file personal income tax returns for
the tax years 1997, 1998, 1999, and 2001. The IRS summons had directed the Pates to appear before
the IRS, however, the Pates did not comply with the summons. On June 6, 2003, the district court
signed an Order to Show Cause (“Show Cause Order”) directing the Pates to appear and show cause
why the IRS summons should not be enforced. On June 30, 2003, the Pates appeared, pro se, before
the district court. However, they refused to produce any of the documentation referenced in the
Show Cause Order, and refused to answer any of the district court’s questions stating that without
advice of counsel, they could not respond. The district court then signed an order directing the
Pates to appear before it on July 7, 2003, to show cause why they should not be held in contempt of
court if they failed to bring the requested documentation. On July 7, 2003, the Pates appeared before
the district court, accompanied by counsel, and in possession of a large bag purportedly containing
documents responsive to the IRS summons. The Pates claimed the right to keep the documents out
of the possession of the IRS based on the Fifth Amendment privilege against self-incrimination. The
district court then conducted an ex parte, in-camera examination to determine whether, and to what
extent, the Pates were entitled to their Fifth Amendment claim to the bag of documents. After the
conclusion of the examination the district court asked the IRS to re-enter the courtroom and ruled
via an order that it was denying the Pates claim of Fifth Amendment privilege. The district court then
2
stayed its order to allow the Pates to appeal the order.
II. Standard of Review
We review a district court’s denial of a claim of Fifth Amendment privilege de novo. See
United States v. Southeast First Nat’l Bank, 655 F.2d 661, 665 (5th Cir. 1981).
III. Analysis
This court has established that the IRS may enforce a summons issue pursuant to 26 U.S.C.
§ 76021, provided that the IRS’s purpose in issuing the summons is not solely the pursuit of a criminal
investigation and/or prosecution. Southeast First Nat’l Bank, 655 F.2d at 664. The United States
Supreme Court has held that because any tax fraud inquiry involves civil and criminal elements that
are intertwined, the IRS is empowered to issue a section 7602 summons even though the investigation
may result in a recommendation for criminal prosecution of the taxpayer. See United States v.
LaSalle Nat’l Bank, 437 U.S. 298, 309 (1978); Donaldson v. United States, 400 U.S. 517, 532-36
1
This statute provides in pertinent part:
(a) Authority to summon, etc.--For the purpose of ascertaining the correctness of
any return, making a return where none has been made, determining the liability
of any person for any internal revenue tax or the liability at law or in equity of any
transferee or fiduciary of any person in respect of any internal revenue tax, or
collecting any such liability, the Secretary is authorized--
(1) To examine any books, papers, records, or other data which may be relevant
or material to such inquiry;
(2) To summon the person liable for tax or required to perform the act, or any
officer or employee of such person, or any person having possession, custody, or
care of books of account containing entries relating to the business of the person
liable for tax or required to perform the act, or any other person the Secretary may
deem proper, to appear before the Secretary at a time and place named in the
summons and to produce such books, papers, records, or other data, and to give
such testimony, under oath, as may be relevant or material to such inquiry; and
(3) To take such testimony of the person concerned, under oath, as may be relevant
or material to such inquiry.
3
(1971). Furthermore, this court held in United States v. Roundtree that it is the taxpayer who bears
the burden of showing that the IRS’s purpose in issuing the summons is solely criminal. 420 F.2d
845, 852 (5th Cir. 1970). If the taxpayer fails to carry that burden, the summons is enforceable and
the taxpayer must present him or herself before the court with the requested documents. Id. It is
then, before the court, that the taxpayer must raise the taxpayer’s Fifth Amendment privilege defense
for each document or each question. Id. However, the court cannot issue a blanket refusal on the
Fifth Amendment claim, but rather, must consider each document or question, and determine if, in
each instance, the claim of self-incrimination is well founded. Id.
We find that the district court acted properly and made the correct decision in denying the
Pate’s request for Fifth Amendment protection for the documents they brought with them to the July
7, 2003 show cause hearing. First, our review of the record reveals that the Pates have failed to
carry their burden of showing that the IRS’s sole purpose in issuing the summons was criminal. The
IRS testified that it has not initiated a criminal referral in this case, and the purpose of issuing the
summons was to determine if the Pates owed any taxes. The Pates acknowledged, in the presence
of the IRS, that they had not filed tax returns for the years 1997, 1998, 1999, and 2001.
Furthermore, § 7602 authorizes the IRS to summon from taxpayers information pertaining to years
when a tax return has not been filed to determine if a tax liability is in fact due. Thus, the Pates were
bound t o respond to the summons. Second, the district court granted the Pates an ex parte, in-
camera, hearing to allow them to make their argument as to why the documents they brought with
them in response to the summons should be granted Fifth Amendment protection. Our review of the
sealed transcript testimony reveals that the documents the Pates sought protection for pertains to the
amount of income they earned in the years they did not file tax returns, and thus would answer the
4
question as to whether or not their income level required them to file a tax return.2 As the Pates’ own
counsel acknowledged, the fact that a taxpayer may have been required to file a tax return is not, in
itself, evidence of tax fraud or a criminal failure to file. The IRS would be required to prove other
factors beyond the mere failure to file.3
We find that the district court, as instructed by Roundtree, sufficiently addressed the
documents for the tax years at issue during the ex parte, in-camera hearing, and did not err, as a
matter of law, in denying the Pates request that those documents be given Fifth Amendment
protection. 420 F.2d at 852.
CONCLUSION
Because the Pates have not shown that the IRS’s sole purpose in issuing the summons was
criminal in nature, and the district court sufficiently reviewed, during an ex parte hearing, the
documents sought to be protected and correctly found that such documents were not entitled to such
protection, we affirm the district court’s denial of the Pates’ request for Fifth Amendment protection
of those documents.
AFFIRMED
2
For example, IRS Publication 501 for the year 2003 states that married taxpayers who have gross income
of $15,600 or more in 2003 are required to file a tax return.
3
For example, 26 U.S.C. § 7203 requires the IRS to show a “willful failure to file”, not simply a failure to file.
5
6
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16 N.J. Super. 285 (1951)
84 A.2d 485
FIDELITY UNION TRUST COMPANY, A NEW JERSEY CORPORATION, ARTHUR E.C. HELLER AND RUPERT B. LOWE, AS EXECUTORS AND TRUSTEES UNDER THE LAST WILL AND TESTAMENT OF PAUL E. HELLER, DECEASED, PLAINTIFFS,
v.
ARTHUR E.C. HELLER, ET ALS., DEFENDANTS.
Superior Court of New Jersey, Chancery Division.
Decided November 1, 1951.
*287 Mr. Irving Riker for the plaintiffs (Messrs. Riker, Emery & Danzig, attorneys).
Mr. Frederick Frelinghuysen for the defendants Arthur E.C. Heller, Ruth Heller Lowe, et als. (Messrs. Pitney, Hardin & Ward, attorneys).
Mr. James W. Hart for the defendant Martha Henry.
Mr. Earle Ogden Bennett for the defendant Frances Ward (Messrs. Bailey, Schenck & Bennett, attorneys).
*288 Mr. George D. McLaughlin for the defendant Constance Heller Henry.
Mr. Aaron Marder for the defendant Elaine Heller Blount.
FREUND, J.S.C.
Paul E. Heller executed his last will and testament on February 12, 1935. In the second article thereof, he expressed the desire that his body rest in a mausoleum in Fairmount Cemetery in the City of Newark, directed his executors to erect the mausoleum at a cost of $25,000 upon a plot in the cemetery, and provided for the interment therein of both deceased and surviving members of his family. Elsewhere in the will he set up a trust fund for the care and maintenance of the plot and mausoleum. Seven years later, on February 16, 1942, he bought a plot in another cemetery, Mount Pleasant Cemetery, in Newark, and secured from that cemetery association its approval to erect a mausoleum thereon. From correspondence in his files it appears that from 1942 to 1944 he negotiated for the erection of the mausoleum and procured elaborate sketches, blueprints and estimates, but material shortages during the war years prevented him from completing his project. He died on February 26, 1948, without having changed his will. His body has been placed in the receiving vault of Fairmount Cemetery, awaiting determination of the place of final interment.
The plaintiffs, executors and trustees under the will filed this proceeding for instructions as to (1) the burial of the testator, (2) the erection of a mausoleum, (3) the removal of the bodies of deceased members of the Heller family, and (4) the trust for the maintenance of the cemetery plot.
The facts are undisputed and have been stipulated. The testator was unmarried. His closest surviving next-of-kin are nephews and nieces. The bodies of nine members of his family, including his parents and brothers, are buried in the Heller family plot in Fairmount Cemetery, which is too small to accommodate a mausoleum. Another plot suitable for a mausoleum could be procured in Fairmount Cemetery, but *289 the next-of-kin of the deceased persons all object to moving the bodies now interred in the family plot. The plot in Mount Pleasant Cemetery acquired by the decedent is adequate for a mausoleum, but since the bodies now interred in Fairmount Cemetery would not be moved and the surviving members of his family do not wish to be interred in the mausoleum, it would contain only the remains of the decedent. All of the testator's next-of-kin, with but one exception, desire that he be interred, and, if erected, the mausoleum be in Mount Pleasant Cemetery. The single objector urges that if a mausoleum is erected, it should be in Fairmount Cemetery.
Paragraph Two of the will reads as follows:
"SECOND: I desire that my body shall rest in a mausoleum in Fairmount Cemetery in the City of Newark, New Jersey. In the event I shall die without having erected a mausoleum in said cemetery, I direct my executor to build a mausoleum at a cost of approximately Twenty Five Thousand ($25,000.00) Dollars upon my plot, if I have acquired one in my lifetime for that purpose, or if I shall die without having acquired one, then upon the present family plot, or if that be impossible or undesirable, then upon such desirable plot in the cemetery as my executors may choose. The cost of the plot, if one is to be acquired, is to be borne by my estate out of the principal thereof in addition to the sum which I have appointed to be spent for the erection of a mausoleum. I direct my executors to cause my body to be interred therein and, pending the erection thereof, my body shall be cared for in the receiving vault of the cemetery. I also direct that my executors shall cause to be interred therein the bodies of my father, my mother and of all the members of my family, who are named in this will as beneficiaries, desiring interment in it. My father and mother having predeceased me and being now buried in the cemetery, the expense of removing their bodies to the mausoleum shall be borne by my estate."
This proceeding is not for the construction of decedent's will, for the will itself is unambiguous. Generally, the facts and circumstances considered in the construction of a will are those which existed when the will was made and not subsequent events. 2 Page on Wills (Lifetime ed.), sec. 920, p. 816. Here, the plaintiffs seek the instruction of the court whether to comply with the clear and specific provisions of *290 the will or whether to depart from strict compliance. The issues call for discussion of the following legal questions: What is the nature of the right of a decedent respecting the disposition of his body after death? What is the duty of the executor in that respect?
It is settled that there is no property right in a dead body in a strict sense or ordinary use of the term. Toppin v. Moriarty, 59 N.J. Eq. 115 (Ch. 1899); DeFestetics v. deFestetics, 79 N.J. Eq. 488 (Ch. 1911); Glatzer v. Dinerman, 142 N.J. Eq. 88 (Ch. 1948). It is not part of the estate of the decedent. Some states, like New York, have statutory provisions which specifically confer upon a person the right to direct the manner in which his body shall be disposed of. Penal Law, N.Y., sec. 2210. In re Johnson's Estate, 7 N.Y.S.2d 81, 169 Misc. 215 (Surr. 1938); In re Eichner's Estate, 18 N.Y.S.2d 573, 173 Misc. 644 (Surr. 1940). This right is merely a personal right and is not regarded as testamentary in character. The general rule is that although not essentially testamentary, and legal compulsion may not attach to them, the wishes or directions of a decedent as to his interment are entitled to respectful consideration and have been allowed great weight. "It always has been, and ever will continue to be, the duty of courts to see to it that the expressed wish of one, as to his final resting place, shall, so far as it is possible, be carried out." Thompson v. Deeds, 93 Iowa 228, 61 N.W. 842, 35 L.R.A. 56 (Sup. 1895); Pettigrew v. Pettigrew, 207 Pa. 313, 56 A. 878, 64 L.R.A. 179 (Sup. 1904); Wilson v. Read, 74 N.H. 322, 68 A. 37, 16 L.R.A., N.S. 332 (Sup. 1907); Wood v. E.R. Butterworth & Sons, 65 Wash. 344, 118 Pac. 212 (Sup. 1911); Yome v. Gorman, 242 N.Y. 395, 152 N.E. 126, 47 A.L.R. 1165 (Ct. App. 1926); Burnett v. Surratt, 67 S.W.2d 1041 (Tex. App. 1934); Jackson, Law of Cadavers (1937), page 49 et seq.; 25 C.J.S., Dead Bodies, sec. 3, p. 1018.
There has not come to my attention any reported case in this State dealing with the effect of a specific direction in a will regarding disposition of decedent's body, but I am *291 convinced that we adhere to the general rule, for in Toppin v. Moriarty, supra, Vice-Chancellor Stevens examined the authorities and effectuated the verbal deathbed request of a decedent as to place of burial.
Revocation of the direction in a will with respect to burial may be accomplished without the execution of "another will or codicil in writing or other writing declaring the alteration executed in the manner in which written wills are required by law to be executed," as prescribed in R.S. 3:2-5. In re Scheck's Estate, 14 N.Y.S.2d 946, 172 Misc. 236 (Surr. 1939); Wales v. Wales, 190 A. 109 (Ch. Del. 1936). I am in accord with the views expounded by Surrogate Wingate in the Scheck case, supra, a case involving the principles pertinent here. There, the decedent in her will provided that her body should be buried in Palestine. Unaware of these directions, her children had her remains interred in a cemetery in New York, where she died, and they were unanimous in their wish that her body be left undisturbed. Affidavits were submitted tending to establish that when the will was executed, the decedent was living with her second husband in Palestine and was making payments on a burial plot in that country; that she later became estranged from him and returned here, after which she discontinued payments on the cemetery plot in Palestine and made regular payments on the plot in which her body was later buried, and that subsequent to the execution of her will and up to the time of her death she expressed the wish to be buried here. The court, ruling that the testator's right of disposition of her body was not testamentary, continued:
"An inevitable sequence of this conception is the right of a particular decedent, from time to time in his discretion, to vary the directions respecting disposal of his remains, with the result that the inquiry of the court must be directed to the ascertainment of the latest expression of wish by the testator on the subject.
Whereas, however, the question is merely one of proof, a demonstration, as in the present case, that a formal and deliberate expression has been made, raises an inference of a continuance of the indicated desire which may not lightly be overcome. * * * That *292 the primary obligation * * * is to effectuate the expressed wishes of a testator insofar as this process involves no infringement of positive rules of law, is axiomatic. * * * It follows, in the present situation, that reversal of the formally expressed wishes of this decedent respecting disposal of her remains is permissible only upon a clear and convincing demonstration by competent and credible testimony, that such was in fact her desire."
And in Wales v. Wales, supra, the Chancellor said:
"It is not the law that the wishes of the deceased concerning the place of his burial are to be gathered exclusively from a formally executed will, and that, if there is no will to reveal the decedent's wishes, the law can take no cognizance of his desires. Oral statements made by the deceased of his wishes in such matters are receivable by the courts and where satisfactorily shown are accorded the full weight of their significance in the light of all the facts attending their utterance."
One of the first duties of an executor is to attend to the decent and proper burial of the decedent. Toppin v. Moriarty, supra; DeFestetics v. de Festetics, supra. While a court cannot direct executors to perform their duties in a manner contrary to the will, even when all parties concerned are in court competent to and do consent, Holden v. Morgan, 115 N.J. Eq. 59 (Ch. 1933), a court may relieve an executor from the duty to carry out the provision in a will if the best interests of the estate are served thereby, Wilber v. Asbury Park National Bank & Trust Co., 142 N.J. Eq. 99 (Ch. 1948), affirmed 2 N.J. 167 (1949). An executor has the right to apply to the courts for direction and guidance in the performance of the duties of his office or trust when he is in doubt as to the extent of his powers and duties or as to the proper manner in which to proceed. Baxter v. Baxter, 43 N.J. Eq. 82 (Ch. 1887), affirmed 44 N.J. Eq. 298 (E. & A. 1888); Griggs v. Veghte, 47 N.J. Eq. 179 (Ch. 1890).
After interment a body is in the custody of the law, and removal or disturbance of such body is subject to the jurisdiction of a court of equity; but the power should not be exercised unless it be clearly shown that good cause and urgent necessity for such action exists. Perth Amboy Gas *293 Light Co. v. Kilek, 102 N.J. Eq. 588 (E. & A. 1928); Peters v. Peters, 43 N.J. Eq. 140 (Ch. 1887); Smith v. Shepherd, 64 N.J. Eq. 401 (Ch. 1903).
Applying the foregoing principles to the facts in this case, I am satisfied that the testator by his conduct and acts subsequent to the execution of his will changed his mind about interment in Fairmount Cemetery and abandoned the plan for the erection of a mausoleum there. The second article of the will was specifically limited to Fairmount Cemetery and provided for the erection of a mausoleum on one of three plots in that cemetery: (1) on a plot bought by the decedent, (2) on the family plot or, if that were impossible, (3) on a plot purchased by the executors. No plot in Fairmount Cemetery was purchased by the decedent or his executors, and it is impossible to erect a mausoleum on the family plot. The testator by the purchase of a plot in Mount Pleasant Cemetery and the negotiations for a mausoleum there indicated his intention to abandon the provisions of the will in so far as they related to Fairmount Cemetery, and a preference to be interred in Mount Pleasant Cemetery. The executors have ascertained that all but one of the next-of-kin desire that the decedent should be interred in Mount Pleasant Cemetery. Accordingly, the executors may be relieved from carrying out the directions of the second article of the will; they may erect a mausoleum in Mount Pleasant Cemetery at a cost not to exceed the sum stipulated in the will. Canfield v. Canfield, 62 N.J. Eq. 578 (Ch. 1901). The court is not directing them to erect a mausoleum; it is merely relieving them of performance of the directions of the second article of the will, and the estate should be treated as though the will made no provision regarding interment. In attending to the decent and proper interment of the remains of the decedent in a manner suitable to his estate and station in life, a reasonable and judicious expenditure for this purpose, including a mausoleum and perpetual care of the same, has been held to be properly allowed. Pratt v. Douglas, 38 N.J. Eq. 516 (E. & A. 1884); Griggs v. Veghte, supra; Zipper v. McCutcheon, *294 9 N.J. Misc. 164 (Sup. Ct. 1931), affirmed 109 N.J.L. 274 (E. & A. 1932); Bank of Montclair v. McCutcheon, 110 N.J. Eq. 539 (Prerog. 1932); In re Gilchrist, 110 N.J. Eq. 666 (Prerog. 1925).
Paragraph nine of the decedent's will provides as follows:
"(a) During the term of the trust to expend annually the sum of TWO HUNDRED FIFTY DOLLARS ($250.00) for the care and decoration of the cemetery plot upon which is erected my mausoleum, it being my purpose that there shall be flower decorations for each Easter Day and Decoration Day."
This provision for flower decorations will apply to any plot where the decedent is interred.
Section (e) of paragraph nine provides in part as follows:
"(e) Upon the death of the last survivor of my said brother * * *, my said trustees shall distribute the corpus of the trust property as follows: TWENTY FIVE HUNDRED DOLLARS ($2,500.00) to Fairmount Cemetery Association, in trust, to invest the same and to apply the net annual income thereof for the perpetual care, decoration and maintenance of my cemetery plot and the mausoleum erected thereon; and I charge the said cemetery association specifically with the duty of appropriately decorating the said plot with flowers upon each recurring Easter Day and Decoration Day; * * *."
The sum of $2,500 was to be paid to Fairmount Cemetery Association not as a gift or legacy, but as a trust fund for investment, the income to be applied for perpetual care and maintenance. That cemetery was designated by the decedent as trustee because he then contemplated interment there. He hardly would have appointed it as trustee for the care and maintenance of a plot in another cemetery, and indeed the cemetery association would have no authority to serve in such a capacity, R.S. 8:2-33. If the decedent is interred in Mount Pleasant Cemetery, Fairmount Cemetery will be disqualified to serve as trustee, and application may be made to the court for the appointment of an appropriate substituted trustee.
Judgment in accordance with this opinion may be submitted.
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208 Okla. 683 (1953)
258 P.2d 619
GESCHWIND
v.
BRORSEN.
No. 35238.
Supreme Court of Oklahoma.
June 23, 1953.
Al. T. Singletary, Perry, for plaintiff in error.
L.E. Roseboom, Enid, for defendant in error.
WILLIAMS, J.
Parties are referred to herein as in the trial court.
In 1949, defendant received a notice from the Collector of Internal Revenue to bring his financial records and books to the post office at Perry, Oklahoma, for an examination as to the source and extent of his income for certain years. Shortly thereafter, defendant hired plaintiff, who is a licensed attorney and certified public accountant specializing in tax matters, to represent him and assist in straightening out his tax troubles. The contract of employment was partly oral and partly written, but its terms, including a rate of payment based upon hours of work performed, were definitely proved at the trial, and were not denied by defendant.
Before hiring plaintiff, defendant had retained another attorney, who was not a tax specialist. This attorney worked on the case for some time; when it became apparent to him that the financial affairs of defendant were in such condition that much accounting work would be required, he withdrew from the case and recommended the employment of plaintiff. As a part of plaintiff's contract of employment, defendant agreed to pay to the plaintiff the fee due the first attorney hired, and plaintiff agreed to pay such sum to the attorney. As a result of his agreement, *684 plaintiff was to be allowed to use the information already compiled by the first attorney. This fee is included in the amount here sued for.
Defendant represented to plaintiff that his financial affairs were simple and that not much work would be required. However, as plaintiff got into the work, which extended over a period of several months, he found that such was not the case; for instance, defendant had told him that he had made 16 interest bearing loans during the period in question; plaintiff's investigations showed that there were 93 such loans. Plaintiff testified that as more and more tax liability was uncovered, defendant became less co-operative, and plaintiff's work was thereby made more difficult. In order for him to complete his work, plaintiff had secured several continuances from the Collector; finally, as a condition of granting another continuance, the Collector demanded that plaintiff file a power of attorney showing that he was in fact representing defendant. It was shown that such an instrument was required to be filed by U.S. Treasury Department regulations.
In an effort to comply with the Collector's demand, plaintiff prepared such power of attorney and asked defendant to sign it, which he refused to do. Such refusal constituted a breach of the contract by defendant, making it impossible for plaintiff to represent defendant before the Collector and carry to a final conclusion the purpose of his employment. Two days thereafter, plaintiff returned defendant's bank statements, records, etc., to him, and demanded payment for work performed. When such payment was refused, he filed this action in the district court, seeking payment at the rate set out in the contract of employment. Defendant prevailed in the lower court, and plaintiff has duly appealed.
At the trial, plaintiff introduced 13 exhibits consisting, for the most part, of data sheets and work sheets prepared by him in the course of his employment and investigations into defendant's financial transactions. These exhibits include about 110 large sheets of paper of the type generally used for accounting work. They reflect an enormous amount of work done by plaintiff, the performing of which is not denied by defendant.
Only one witness testified for defendant; he was a tax specialist, attorney, and accountant who testified as an expert. It had previously been shown that after defendant breached the contract, he hired another attorney to represent him before the Collector; that such attorney determined defendant's income by computing the excess of bank deposits over withdrawals, and adding to this the amount of interest earned by the 93 loans above referred to. Of course, this method did not take into account other items of income previously uncovered by plaintiff herein. On the basis of such computations, the Collector assessed an additional tax liability of $3,000 against the defendant, which was paid. The tax specialist who testified for defendant said the value of such services was between $250 and $300. However, on cross-examination, he testified in part as follows:
"Q. If you had no records and you were trying to determine a man's tax liability for three years, would you try to compile a record of all of the checks that he had issued during those three years so that you could determine what he spent his money for? A. That's the only way you could do that.
"Q. That's the only way you could do it, isn't it? And if he had no records of his deposits over a three year period, would you try to compile a record of those deposits from the best source obtainable, the bank? A. That's the only place you could.
"Q. And after you have got those deposit slips, and where you found that those deposit slips didn't show the source of the money, in order to make an accurate tax return would you try to make an investigation to find out *685 where the money came from? A. That would be the procedure."
The methods outlined in the questions above were substantially the same as those used by the plaintiff herein. This witness also admitted that the payment of the $3,000 did not necessarily mean that defendant had paid all the tax he owed, or that he would not have to make further payments later.
At the conclusion of defendant's evidence, plaintiff demurred to the evidence, which demurrer was overruled. At the conclusion of all the evidence, plaintiff moved for a directed verdict in his favor, which motion was overruled. The jury thereafter returned a verdict for defendant, and judgment was pronounced thereon.
One of the assignments of error made by plaintiff is error of the court in failing to sustain plaintiff's motion for a directed verdict in his favor. Since we deem this proposition controlling, we will not discuss herein the other errors alleged.
From the above summary, it is apparent that there was no conflict in the evidence. Plaintiff proved that the contract of employment was entered into; that he performed his duty under the contract with defendant's knowledge; and that defendant, by his lack of cooperation and refusal to execute the power of attorney, made it impossible for him to continue in the employment. There was absolutely no evidence produced by the defendant in contradiction or denial of these facts.
The principal argument advanced by defendant that does not go generally to the sufficiency of the evidence is to the effect that plaintiff "rescinded without restoration". In support thereof, he quotes 15 O.S. 1951 § 235, which provides in substance that one who elects to rescind a contract must restore to the other party everything of value that he has received from such other party under the contract. As we have heretofore shown, the contract was breached by defendant, not rescinded by plaintiff, and the argument is therefore inapplicable. Further, the record shows that plaintiff did restore to defendant all of the bank statements, records, etc., that defendant had given to him. Defendant now contends that plaintiff should have "restored" to defendant the data sheets, work sheets, etc., which plaintiff prepared in the course of his work for defendant. It is obvious that plaintiff could not have "restored" to defendant something that the defendant never had in the first place. The work sheets were prepared by plaintiff and represented the result of many hours of work. They were his personal property. He was under no obligation to part with them until he had been paid therefor.
Defendant also argues that plaintiff "stipulated himself out of a quantum meruit recovery by requesting the court to instruct the jury" that plaintiff was entitled to the entire amount sued for or nothing. The stipulation referred to is as follows:
"It is stipulated by counsel for plaintiff and defendant that the Court may instruct the Jury that plaintiff is entitled to collect the entire amount sued for, or nothing."
As is evident, this stipulation, which was entered into after denial of plaintiff's motion for directed verdict, merely amounted to an agreement between the parties as to what might be included in an instruction to the jury. It was not an agreement that plaintiff should collect "all or nothing". Since the trial court was under the positive duty to instruct the jury, if at all, as to all of the law applicable to the case at hand, it is elementary that such stipulation was not binding upon him.
No complaint was made by either party as to the measure of damages embodied in the court's instructions.
It is not alleged, and the record does not show, that the evidence of plaintiff is unreasonable or improbable, or is contrary to other facts in evidence
*686 Under the circumstances shown to exist in this case, the following rule of law is applicable:
"Where the evidence introduced by the plaintiffs makes out the plaintiffs' case, and the defendant introduces no evidence to rebut it, the court should instruct a verdict for plaintiffs." Moore v. Leigh-Head & Co., 48 Okla. 228, 149 P. 1129.
See, also, State v. Strange, 202 Okla. 11, 209 P.2d 691, wherein this court said, at page 17 of the Oklahoma Reports:
"We have many times held that where the evidence offered by a plaintiff to sustain his case is undisputed, and is not unreasonable or improbable, or contrary to facts and circumstances shown in the record, it is the duty of the trial court to direct a verdict in his favor."
The judgment of the trial court is reversed, with directions to enter judgment for plaintiff.
HALLEY, C.J., JOHNSON, V.C.J., and WELCH, CORN, O'NEAL, and BLACKBIRD, JJ., concur. DAVISON, J., dissents.
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786 F.Supp. 1209 (1992)
HEALING THE CHILDREN, INC., Plaintiff,
v.
HEAL THE CHILDREN, INC., d/b/a Heal the Children PA, Inc. and Judith Staeger, Defendants.
Civ. A. No. 91-63E.
United States District Court, W.D. Pennsylvania.
February 27, 1992.
*1210 *1211 Walter J. Steinkraus, Vidas & Arrett, P.A., Minneapolis, Minn., Dennis W. Krill, Dunlavey Nichols Ward & Krill, Erie, Pa., for plaintiff.
John R. Fernan, Fernan, Whitney & Masson, Ridgeway, Pa., for defendants.
MEMORANDUM OPINION
COHILL, Chief Judge.
Presently before us are cross motions for summary judgment filed by plaintiff Healing the Children, Inc. and defendants Heal the Children, Inc. d/b/a/ Heal the Children Pa., Inc., and Judith Staeger. As the reader may have guessed from the caption of the case, this action is based on alleged infringement of federally registered service mark, false designation of origin and false description, infringement of common law trademark and service mark rights, dilution of service mark, unfair competition, and tortious interference with business. We have jurisdiction pursuant to 15 U.S.C. § 1121 and 18 U.S.C. §§ 1332 and 1338.
Facts
The facts of this case are undisputed. Plaintiff is an international organization which serves children who are unable to obtain adequate medical treatment in their own countries. Plaintiff was incorporated as a non-profit corporation in the State of Washington in 1981 originally under the name "Heal the Children, Inc." As will be described in some detail herein, plaintiff's legal name subsequently became "Healing the Children, Inc." By 1986 there were more than 10 affiliated chapters of volunteers undertaking the corporation's activities in local regions around the United States. Defendant Heal the Children, Inc. was one such chapter.
In 1986, plaintiff reorganized its corporate structure. At the same time, with plaintiff's consent, many of the local chapters incorporated separately. Defendant Heal the Children, Inc. was one such chapter and incorporated under that name on November 24, 1986. Plaintiff's consent to the incorporation of its chapters was made subject to restrictions including the authority of plaintiff to "establish, accredit, and guide HTC chapters." "HTC" was the commonly used abbreviation of Heal the Children, Inc.
Apparently, disagreements arose between plaintiff and defendant Heal the Children, Inc. In one instance, plaintiff issued a directive to all chapters not to accept further referrals from a Guatemalan agency called Casa Guatemala. Defendant Heal the Children, Inc., however, refused to comply with this directive. Despite their differences, the plaintiff and defendant continued to work together on various projects until early 1989.
In late 1988 or early 1989, defendant Judith Staeger assumed control over the defendant Heal the Children, Inc. Ms. Staeger made it clear that she did not intend to work with plaintiff or to acknowledge that plaintiff had any authority over her actions. Complaint, ¶ 12. The name Heal the Children PA, Inc. was apparently adopted. Defendant Heal the Children PA, Inc. is not now a recognized chapter of plaintiff.
*1212 In December of 1986, when plaintiff was organized into distinct national and local chapter organizations, the national organization filed an application to register the service mark "Heal the Children" in the United States Patent and Trademark Office. The registration was opposed by Save the Children Federation, Inc., apparently due to the similarity of the names. Subsequently, the parties resolved this matter in a settlement agreement which became effective January 1, 1989. Defendant's Motion for Summary Judgment, attachment. Pursuant to the settlement, plaintiff agreed to withdraw the pending application for registration and agreed within 6 months to discontinue using the mark "Heal the Children." Save the Children Federation, Inc. agreed not to oppose the adoption by plaintiff of the service mark of "Healing the Children" and paid $1,000 to plaintiff.
In January of 1990, plaintiff filed an application to register the service mark of "Healing the Children" with the United States Patent and Trademark Office. The registration issued without opposition on October 16, 1990.
Plaintiff then brought this action alleging infringement of federally registered service mark, false designation of origin and false description, infringement of common law trademark and service mark rights, dilution of service mark, unfair competition, and tortious interference with business. Although plaintiff's complaint contains five counts, the summary judgment motion pertains only to Count II. Plaintiffs assert that "[w]hile the other Counts of the complaint are not being waived at this time, Plaintiff intends to dismiss its other claims without prejudice when the relief requested herein is provided by the Court."
Discussion
Federal Rule of Civil Procedure 56(c) provides that summary judgment may be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c).
When confronted with a motion for summary judgment, it is not the court's function to weigh the evidence and determine the truth of the matter, but rather simply to determine whether there is a genuine issue of fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). An issue is genuine only if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id.
The moving party has the burden to identify those portions of pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The nonmoving party then must go beyond the pleadings and by affidavits, depositions, answers to interrogatories, and admissions on file, designate facts showing that there is a genuine issue for trial. Id. at 324, 106 S.Ct. at 2553.
Count II of the Complaint asserts a cause of action for false designation of origin and false description pursuant to § 43(a) of the Lanham Act which establishes in pertinent part:
Any person who, or in connection with any goods or services ... uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which ... is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person ... shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a).
A claim for common law trademark infringement or unfair competition under *1213 § 43(a) is proven if (1) the trademark owner's mark is distinctive and thus protectable, and (2) the subsequent user's actions cause a likelihood of confusion among the relevant buyer class. Trans Pacific Ins. Co. v. Trans-Pacific Ins. Co., 739 F.Supp. 240, 244 (E.D.Pa.1990).
A. Protection
As to the first element, for purposes of determining the degree of protection to which a mark is entitled under the federal and common law, courts have classified trade names as either "generic," "descriptive," "suggestive," or "arbitrary." A.J. Canfield Co. v. Honickman, 808 F.2d 291, 296-97 (3d Cir.1986).
A generic name suggests the basic nature of the article or service and is generally incapable of achieving trade name protection. American Television and Communications Corp. v. American Communications and Television, Inc., 810 F.2d 1546, 1548 (11th Cir.1987). A descriptive term identifies a characteristic or quality of an article or service, and may become a protected trade name only if it acquires a secondary meaning. Id. A suggestive name suggests, rather than describes, characteristics of goods or services and requires effort of the imagination by the consumer in order to be understood as descriptive. Id. at 1549. An arbitrary (or fanciful) term bears no logical or suggestive relation to the actual characteristics of the goods. A.J. Canfield Co. v. Honickman, 808 F.2d at 296. Both suggestive and arbitrary terms automatically qualify for trademark protection. Id. at 297.
Plaintiff does not make a concise argument as to whether it believes that "Healing the Children" is descriptive or suggestive. Nevertheless, we believe that there is enough evidence to conclude that the name "Healing the Children" is a suggestive mark.
First we will examine several cases where the courts found certain marks to be descriptive. One example is Transfer Print Foils, Inc. v. Transfer Print America, Inc., 720 F.Supp. 425 (D.N.J.1989) where the court found "Transfer Print Foils" to be descriptive.
The phrase `transfer print,' as used by plaintiff, connotes that plaintiff engages in some sort of marketing or printing through the transfer of a substance to another surface. Use of the word `foil' in its name further suggests that the images are made through the use of foils. Taken together, it is arguable that no imagination is required for a potential consumer to reach a conclusion about the nature of plaintiff's product or services, and, as such, Transfer Print, as applied to the word `foil' and as used in the relevant industry, is not suggestive.
Id. at 437.
Another example is the case of Eagle Snacks, Inc. v. Nabisco Brands, Inc., 625 F.Supp. 571 (D.N.J.1985). In that case the court held that "Honey Roast" lacks the degree of inventiveness or imaginativeness that would put it over the border into the suggestive category, and thus was a descriptive mark. Id. at 581.
In this case, "Healing the Children," does suggest an organization which benefits children in a salutary, curative, beneficial, or remedial way. But it is only with imagination that the consumer can determine that the organization's activities include coordinating medical teams which visit foreign countries to train local medical personnel and to provide acute care and diagnostic services for local children, and organizing transportation, visas, medical care, and foster care for children referred to plaintiff by cooperating foreign governments and private agencies. Declaration of Angeles Glick, ¶ 3. We must therefore conclude that "Healing the Children" is a suggestive mark and entitled to protection under § 43(a) of the Lanham Act.
B. Confusion
As to the second element, where the owner of the trademark and the infringer deal in competing goods or services, the court need rarely look beyond the mark itself to determine whether there is a likelihood of confusion among the relevant buyer class. Opticians Assn. v. Independent Opticians, 920 F.2d 187, 195 (3d Cir.1990). *1214 Proof of actual confusion is not necessary; likelihood is all that need be shown. Id.
In this case, both plaintiff and defendant Heal the Children offer identical services in many of the same localities such as Guatemala. When we look at the names, "Healing the Children" and "Heal the Children" (or even "Heal the Children PA") we find that the only difference is the form of the verb to heal.
Plaintiffs point out two instances where actual confusion has resulted from the similarity in names. First, Terry Rutherford, plaintiff's National Executive Secretary, received a courtesy copy of a letter from Namugongo Fund for Special Children, Kampala, Uganda to the Director of Heal the Children, 555 Maple Avenue, Ridgeway, PA 15853. Declaration of Terry Rutherford, Exhibit B. This is defendant Heal the Children's address. See Complaint, ¶ 2. Mr. Rutherford avers that he believes that the author of the letter mistakenly believed that the plaintiff and the defendant Heal the Children are the same or associated organizations. Declaration of Terry Rutherford, ¶ 7.
Second, Dr. Ruben Ruiz Santa Cruz, Medical Director of Juan Pablo II Hospital in Guatemala City, Guatemala, avers that he was confused between the similarity of the names "Healing the Children" and "Heal the Children." Declaration of Dr. Ruben Ruiz Santa Cruz, ¶ 6. Dr. Santa Cruz had heard of the work of Heal the Children or Healing the Children in Guatemala for the past 11 years and had agreed that it would be a good idea for the organization to work at Juan Pablo II Hospital. Declaration of Dr. Ruben Ruiz Santa Cruz, ¶ 2. Around April of 1991, Judith Staeger, the executive director of Heal the Children, accompanied by an individual from Casa Guatemala, visited Juan Pablo II Hospital and informed Dr. Santa Cruz that she would return in two weeks with a couple of doctors to perform oral maxillofacial surgery on children. Declaration of Dr. Ruben Ruiz Santa Cruz, ¶¶ 2, 3. Dr. Santa Cruz informed Ms. Staeger that two weeks was not enough time to gather patients. Declaration of Dr. Ruben Ruiz Santa Cruz, ¶ 3. Nevertheless, the team of doctors arrived two weeks later but did not operate because there were no suitable patients. Declaration of Dr. Ruben Ruiz Santa Cruz, ¶ 4.
Then on May 20, 1991, Angeles Glick, the president of plaintiff, visited Juan Pablo II Hospital and inquired about the possibility of a visiting medical team performing surgeries at the hospital in November of 1991. Declaration of Dr. Ruben Ruiz Santa Cruz, ¶ 5. When Dr. Santa Cruz informed Ms. Glick of the events of April 1990, Ms. Glick stated that the two groups were not connected. Declaration of Dr. Ruben Ruiz Santa Cruz, ¶ 5, Declaration of Angeles Glick, ¶ 12. Dr. Santa Cruz avers that he believes that the similarity between the names Heal the Children and Healing the Children is confusing an is likely to cause confusion among doctors, hospitals, and patients in Guatemala. Declaration of Dr. Ruben Ruiz Santa Cruz, ¶ 6.
Plaintiff also asserts that because many of their activities take place in foreign countries, where many people have little or no understanding of English, the people would not be able to distinguish between "Healing the Children" and "Heal the Children" or "Heal the Children PA."
C. Affirmative Defense
Defendant does not contest the elements of plaintiff's claim under § 43(a) of the Lanham Act. Defendant does, however assert the affirmative defense of what we interpret to be abandonment of the service mark as set out in 15 U.S.C. § 1115(b)(2).
Defendants theorize that plaintiff gave up its right to use the name "Heal the Children" in the January 1, 1989 settlement agreement. Furthermore, defendants assert that plaintiff recognized that it did not have a right to stop defendants from using the name "Heal the Children." Finally, plaintiff did not reserve the right in the January 1, 1989 agreement to stop defendants from using the name "Heal the Children," according to defendants. We find defendants' arguments to be totally unsupported and unsubstantiated and thus, we reject their abandonment defense.
*1215 The burden of proof relating to the defense of abandonment is upon the defendant. Fotomat Corp. v. Cochran, 437 F.Supp. 1231, 1245 (D.Kan.1977). The defendant must prove that plaintiff intended to abandon its service mark. Id. Minor modifications of a service mark do not constitute abandonment. Id. A change in a mark that does not affect the distinctive characteristics of the mark represents a continuity of the prior mark. Id.
In this case, defendants failed to establish that plaintiff intended to abandon its service mark. In fact, the evidence points to the contrary. Angeles Glick, the president of plaintiff, avers that when the organization agreed to change its name from "Heal the Children" to "Healing the Children," it intended to choose a name where the good will built up by the name "Heal the Children" would not be lost. Declaration of Angeles Glick, ¶ 6.
Additionally, when plaintiff filed the application to register the mark "Healing the Children" with the United States Patent and Trademark Office, the registration application specifically stated, "[t]he mark is a Modification of the mark HEAL THE CHILDREN used by application and its predecessor unincorporated association since 1978." Declaration of Angeles Glick, ex. P, p. 2.
Plaintiff cites several cases to show that minor modifications of a mark do not constitute abandonment. The only requirement in these instances is that the mark be modified in such a fashion as to retain its trademark or service mark impact and symbolize a single and continuing commercial impression. Humble Oil & Refining Co. v. Sekisui Chemical Co., 165 U.S.P.Q. 597, 603 (T.M.T. Appeal Bd. 1970). That is, a change which does not alter its distinctive characteristics represents a continuity of trademark or service mark rights. Id. "Thus, where the distinctive character of the mark is not changed, the mark is, in effect, the same and the rights obtained by virtue of the earlier use of the prior form inure to the later form." Id. at 603-604 (citations omitted).
In the Humble Oil & Refining Co. case, the Patent Office Trademark Trial and Appeal Board held that "ESLON" is but a mere modification of "S-LON" which does not alter the inherent significance thereof and that "S-LON" and "ESLON" constitute the same trademark. Id. at 604. Sekisui initially modified the name "S-LON" because another corporation alleged an infringement if its trademark "SEILON." Id. at 165.
Similarly, in this case plaintiff undoubtedly modified its name to Healing the Children because of the claimed trademark infringement by Save the Children Federation.
Several other cases support this conclusion: Li'l' Red Barn, Inc. v. Red Barn System, Inc., 322 F.Supp. 98, 108 (N.D.Ind. 1970) ("THE LI'L' RED BARN" in white, superimposed on a frontal view of a somewhat stylized red barn was modified to "LITTLE RED BARN" in white on a detailed red barn with a rooster perched on a weather vane), aff'd, 174 U.S.P.Q. 193 (7th Cir.1972); Puritan Sportswear Corp. v. Shure, 307 F.Supp. 377, 389 (W.D.Pa.1969) (mark was modified when the corporation changed it from "Puritan Sportswear, the Choice of All Americans" to "Puritan"); and Proxite Products, Inc. v. Bonnie Brite Products Corp., 206 F.Supp. 511, 514 (S.D.N.Y.1962) ("Prox Bonnie Blue" was modified to "Bonnie Blue").
Each organization asserts that it has no interest in preventing the other organization from engaging in any activity on behalf of the world's children. Both parties believe that extensive and expensive litigation would detract from the salutary purpose of each organization and request that this court determine the cross motions for summary judgment on the briefs.
We conclude that there is no genuine issue of material fact and that plaintiff is entitled to judgment as a matter of law on Count II of the Complaint which is the claim under § 43(a) of the Lanham Act. We will grant plaintiff's motion for summary judgment and deny defendants' motion. Consistent with its representation to the court, we will require plaintiff to submit, *1216 within 45 days from the date of this Order, a proposed order dismissing the remaining claims of the complaint, and thus, closing the case.
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T.C. Memo. 2015-178
UNITED STATES TAX COURT
GARY WAYNE RODRIGUES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 27277-11L. Filed September 10, 2015.
Gary Wayne Rodrigues, pro se.
Peter R. Hochman, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
VASQUEZ, Judge: This case arises from a petition for review filed in
response to a Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 63301 (notice of determination) with respect to petitioner’s
1
Unless otherwise indicated, all section references are to the Internal
(continued...)
-2-
[*2] Federal income tax liability for 2009. The issues for decision are:
(1) whether distributions from petitioner’s individual retirement account (IRA)
were includable in his gross income; and (2) whether respondent abused his
discretion in sustaining the filing of a notice of Federal tax lien (NFTL).
FINDINGS OF FACT
I. Petitioner’s Criminal Conviction
From 1984-2002 petitioner served as plan administrator of the United
Public Workers Mutual Aid Trust Fund (UPW plan).2 In 2003 he was convicted in
the U.S. District Court for the District of Hawaii of mail fraud, health care fraud,
money laundering, conspiracy to commit money laundering, embezzlement, and
accepting kickbacks to influence operation of the UPW plan. Consequently, he
was sentenced to 64 months in prison and ordered to pay a $50,000 fine to the
District Court and $378,103.63 in restitution to United Public Workers (UPW).
Petitioner at that time had no liquid assets from which the judgment could
be satisfied. However, petitioner while employed at UPW participated in a
1
(...continued)
Revenue Code in effect at all relevant times.
2
The UPW plan was an ERISA-governed employee welfare benefit plan
that provided hospitalization benefits to its participants.
-3-
[*3] defined contribution plan under which he had accrued pension benefits.3 The
Government sought to collect petitioner’s fine and restitution by garnishing his
pension benefits. During a court hearing petitioner’s counsel, the Government’s
counsel, and the presiding judge voiced concern over, among other things, the tax
consequences of the potential garnishment order. As a result--to avoid immediate
taxation and to buy time in the hope of finding an alternate source of payment--
petitioner, through undersigned counsel, established an IRA at FHB whereby his
pension benefits were transferred and rolled over into the IRA.4
Petitioner eventually appealed his conviction and, in 2007, the Court of
Appeals for the Ninth Circuit affirmed. Thereafter, petitioner filed a petition for a
writ of certiorari, which the U.S. Supreme Court denied. In 2008 the District
Court ordered FHB to disburse the funds it held in petitioner’s IRA to satisfy
petitioner’s fine and restitution obligations (2008 garnishment order).
In 2008 UPW pursued a civil action against petitioner in the District Court
and obtained a judgment against him for $850,000. UPW, in order to collect the
3
The defined contribution plan was established and maintained at First
Hawaiian Bank (FHB).
4
Petitioner established the IRA by executing a stipulation with the
Government and filing it with the District Court. In the stipulation petitioner
agreed that, if necessary, the IRA proceeds would be dispersed to satisfy his fine
and restitution obligations.
-4-
[*4] judgment, filed a motion to garnish the gains and interest that had accrued in
petitioner’s IRA. Petitioner objected to the motion, arguing that the gains and
interest were exempt from garnishment under Haw. Rev. Stat. Ann. sec. 651-124
(LexisNexis 2012). The magistrate judge disagreed with petitioner and held that
the gains and interest were not exempt because the pension benefits “lost their
character as ‘retirement plan assets’” when they were transferred into the IRA.
Subsequently, in 2009 the District Court filed an order adopting the magistrate
judge’s findings and recommendation.
On December 7, 2009, FHB issued a check for $428,103.63 from
petitioner’s IRA to the clerk of the District Court. Additionally, on December 8,
2009, FHB issued a check for $89,343.98 from petitioner’s IRA to UPW.
Thereafter, FHB issued a Form 1099-R, Distributions From Pensions, Annuities,
Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to petitioner
for 2009 reporting that he had received taxable distributions from his IRA of
$517,447.61 ($428,103.63 + $89,343.98).
II. Petitioner’s Tax Return Filing and Collection Due Process (CDP) Hearing
Petitioner filed his 2009 Federal income tax return, on which he reported
taxable IRA distributions of $517,448 and a tax liability of $133,116. On
-5-
[*5] November 22, 2010, the Internal Revenue Service (IRS) assessed petitioner’s
tax as reported on his return.
Petitioner did not fully pay the assessed tax liability. The IRS filed an
NFTL regarding the liability, and on February 24, 2011, the IRS mailed petitioner
a Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing
Under IRC 6320. In response to the Letter 3172 petitioner timely submitted a
Form 12153, Request for a Collection Due Process or Equivalent Hearing. On his
Form 12153 petitioner (1) indicated that he was not liable for the tax owed; (2)
questioned the legality and validity of the 2008 garnishment order; (3) requested a
telephone CDP hearing from prison; and (4) asked the IRS to restore his IRA with
interest. Petitioner also attached various documents to his Form 12153.
On May 17, 2011, the IRS Office of Appeals (Appeals) mailed petitioner a
letter stating that they had received his CDP hearing request. However, the letter
was returned as undeliverable because of petitioner’s failure to provide an inmate
register number in his CDP hearing request. On July 20, 2011, Appeals mailed
petitioner a letter notifying him that his CDP hearing had been transferred to the
San Francisco, California, Appeals Office.
The IRS assigned petitioner’s CDP hearing to Settlement Officer Alan
Owyang. On September 12, 2011, Settlement Officer Owyang mailed petitioner a
-6-
[*6] letter scheduling a telephone CDP hearing for October 5, 2011. In response,
petitioner sent a letter to Settlement Officer Owyang, dated September 26, 2011,
requesting a correspondence CDP hearing and an extension of time. Petitioner
also informed Settlement Officer Owyang that his wife would soon contact
Settlement Officer Owyang on his behalf.
On September 28, 2011, petitioner’s wife sent a letter to Settlement Officer
Owyang informing him that petitioner had received his September 12, 2011, letter,
and would soon request an extension of time. The letter also stated that petitioner
had no access to a computer and limited access to a typewriter.
Settlement Officer Owyang denied petitioner’s extension request. On
October 6, 2011, he mailed petitioner a “last chance letter” indicating that he
would make a determination by reviewing the administrative file and any
information petitioner had previously submitted. Settlement Officer Owyang
advised petitioner that if he wanted to provide additional information he should do
so within 14 days from the date of the letter. Petitioner did not submit any
additional information.
On October 13, 2011, petitioner’s wife sent a final letter to Settlement
Officer Owyang informing him that petitioner had received his October 6, 2011,
letter, and that petitioner had requested an extension of time on September 26,
-7-
[*7] 2011. The letter also reiterated that petitioner had no access to a computer
and limited access to a typewriter.
During the course of the CDP hearing petitioner did not propose any
collection alternative. On October 31, 2011, the IRS issued petitioner the notice
of determination sustaining the lien action at issue.5 Petitioner, while residing in
California, timely petitioned this Court for review of the notice of determination.
OPINION
I. Statutory Framework
Section 6321 imposes a lien in favor of the United States on all property and
rights to property of a taxpayer liable for tax when a demand for payment of the
tax has been made and the taxpayer fails to pay the tax. Section 6320(a) provides
that the Secretary shall furnish the taxpayer with a notice of the filing (i.e., Letter
3172) within five business days after the NFTL is filed.
If a taxpayer requests a hearing in response to a Letter 3172 pursuant to
section 6320, a hearing shall be held before an impartial officer or employee of
Appeals. Sec. 6320(b)(1), (3). At the hearing the taxpayer may raise any relevant
issue, including appropriate spousal defenses, challenges to the appropriateness of
5
Before the notice of determination was issued, Settlement Officer Owyang
verified that all legal and administrative requirements for collection had been met.
-8-
[*8] the collection action, and collection alternatives. Sec. 6330(c)(2)(A). A
taxpayer is precluded from contesting the existence or amount of the underlying
tax liability unless the taxpayer did not receive a notice of deficiency for the
liability in question or did not otherwise have an earlier opportunity to dispute the
liability. Sec. 6330(c)(2)(B); see also Sego v. Commissioner, 114 T.C. 604, 609
(2000).
Following a hearing Appeals must determine whether proceeding with the
lien action is appropriate. In making that determination Appeals is required to
take into consideration: (1) verification presented by the Secretary during the
hearing process that the requirements of applicable law and administrative
procedure have been met; (2) relevant issues raised by the taxpayer; and
(3) whether the lien action appropriately balances the need for efficient collection
of taxes with the taxpayer’s concerns regarding the intrusiveness of the collection
action. Sec. 6330(c)(3).
II. Standard of Review
If the taxpayer disagrees with Appeals’ determination, the taxpayer may
seek review of the determination by filing a timely petition in this Court. Secs.
6320(c), 6330(d). If a taxpayer’s underlying liability is properly at issue, we
review any determination with respect to the underlying liability de novo. Sego v.
-9-
[*9] Commissioner, 114 T.C. at 610; Goza v. Commissioner, 114 T.C. 176, 181-
182 (2000). We review any other administrative determination for abuse of
discretion. Craig v. Commissioner, 119 T.C. 252, 260 (2002) (citing Sego v.
Commissioner, 114 T.C. at 610).
Respondent concedes that petitioner did not receive a notice of deficiency
and did not otherwise have an opportunity to challenge the underlying tax liability.
Accordingly, petitioner may challenge the underlying liability in this proceeding
and, to the extent the underlying liability is at issue, we will review respondent’s
determination de novo.
III. Burden of Proof
Petitioner does not dispute that the IRA distributions were made or
respondent’s calculation of tax. Rather, petitioner disagrees only with
respondent’s legal conclusions (i.e., that petitioner’s IRA distributions were
taxable). Because the relevant facts are undisputed and only a legal issue remains,
we need not decide who bears the burden of proof on this issue. See Estate of
Morgens v. Commissioner, 133 T.C. 402, 409 (2009), aff’d, 678 F.3d 769 (9th Cir.
2012); see also Waamiq-Ali v. Commissioner, T.C. Memo. 2010-86; Rozzano v.
Commissioner, T.C. Memo. 2007-177.
-10-
[*10] IV. Distributions From Qualified Retirement Plans
Distributions from qualified retirement plans are generally includable in the
distributee’s income in the year of distribution as provided in section 72. Secs.
402(a), 408(d)(1). An exception exists if the distribution proceeds are rolled over
into an IRA within 60 days of the distribution. Sec. 408(d)(3).
This case revolves around three separate distributions--one in 2004 and two
in 2009--that occurred after petitioner’s criminal conviction. As part of his
criminal sentence, the District Court ordered petitioner to pay a fine to the District
Court and restitution to UPW. However, at that time petitioner had no liquid
assets from which the judgment could be satisfied. As a result, in 2004, to satisfy
petitioner’s fine and restitution obligations, the Government moved to garnish
petitioner’s pension benefits. Petitioner--to avoid immediate taxation and to buy
time in the hope of finding an alternate source of payment--established an IRA at
FHB whereby his pension benefits were transferred and rolled over into the IRA.
The parties do not dispute that this rollover distribution was nontaxable in 2004
and thus allowed petitioner to continue to defer taxation of his pension benefits
until a subsequent distribution.
Petitioner unfortunately was unable to find an alternate source of payment.
As a result, in 2008--after the District Court’s conviction was affirmed by the
-11-
[*11] Court of Appeals for the Ninth Circuit--the District Court ordered FHB to
disburse the funds it held in petitioner’s IRA to satisfy petitioner’s fine and
restitution obligations. Thereafter, in 2009 FHB issued two checks from
petitioner’s IRA--one to the clerk of the District Court for $428,103.63 and the
other to UPW for $89,343.98. Petitioner argues, among other things, that these
distributions should not be subject to tax because he personally did not receive the
funds or receive a benefit therefrom and the withdrawals were involuntary.
Respondent argues that the statute requires the imposition of the tax irrespective of
actual receipt by or benefit to petitioner or the voluntary nature of the distribution.
We agree with respondent. Petitioner constructively received the IRA
distributions when the distributions were made to the District Court and UPW in
satisfaction of petitioner’s obligations, and petitioner cannot escape taxation on
the basis that the funds were disbursed to third parties. See Larotonda v.
Commissioner, 89 T.C. 287, 291 (1987). “The discharge by a third person of * * *
[a taxpayer’s obligation] is equivalent to receipt by the person taxed.” Old Colony
Trust Co. v. Commissioner, 279 U.S. 716, 729 (1929); see also Young v.
Commissioner, 113 T.C. 152, 157 (1999), aff’d, 240 F.3d 369 (4th Cir. 2001).
The fact that the transfer is involuntary, such as by garnishment, has no
significance. See, e.g., Tucker v. Commissioner, 69 T.C. 675, 678 (1978);
-12-
[*12] Chambers v. Commissioner, T.C. Memo. 2000-218 (holding amounts
garnished from employee’s wages for alimony and child support were includable
in employee’s income), aff’d, 17 Fed. Appx. 688 (9th Cir. 2001); Vorwald v.
Commissioner, T.C. Memo. 1997-15 (holding that amounts transferred from
taxpayer’s retirement account to his former spouse in garnishment proceeding
constituted deemed distributions to taxpayer from his retirement account and were,
therefore, includable in his income).
Petitioner’s IRA was garnished to satisfy his fine and restitution obligations
imposed by the District Court. The garnished funds, in other words, were paid to
satisfy legal obligations that petitioner owed and thus constitute gross income to
him.
Petitioner also attempts to find fault with the District Court, the
Government, and FHB. Petitioner asserts on brief that he trusted and relied on
these entities to “comply with the law” and that they violated the law when they
established and administered his IRA, and ultimately distributed the proceeds from
his IRA. We disagree. First, it was petitioner who, through undersigned counsel,
decided to establish the IRA at FHB. Second, petitioner generally cited various
sections of the Internal Revenue Code--including sections 408 and 3405--but
failed to specify how any of the entities involved did not comply with these
-13-
[*13] provisions. Third, petitioner is mistaken in his belief that the IRA was
established to escape taxes indefinitely. Petitioner was advised to establish the
IRA to avoid a taxable event before he had exhausted his appeal of his conviction
and to give himself additional time to find an alternate source of payment. When
petitioner was unable to find an alternate source of payment, the District Court
ordered FHB to disburse the proceeds from petitioner’s IRA to satisfy his fine and
restitution obligations. The economic benefit petitioner enjoyed in 2009 when he
constructively received the distributions cannot be ignored.
Petitioner also refers to the magistrate judge’s findings and recommendation
in Decosta ex rel. Bd. of Trs. of United Public Workers v. Rodrigues, No. 03-
00598 DAE-LEK, 2009 WL 3399091 (D. Haw. Oct. 22, 2009), to show that the
IRA distributions were not taxable to him. These findings stem from UPW’s
motion filed in the District Court to garnish the gains and interest that accrued in
petitioner’s IRA. Petitioner objected to the motion, arguing that the gains and
interest were exempt from garnishment under Haw. Rev. Stat. Ann. sec. 651-124.6
The magistrate judge disagreed with petitioner and held that the gains and interest
6
Haw. Rev. Stat. Ann. sec. 651-124 (LexisNexis 2012) exempts from
attachment, execution or seizure, the rights of a debtor to a pension, annuity,
retirement or disability allowance under certain retirement plans described under
the Internal Revenue Code.
-14-
[*14] were not exempt because petitioner’s pension benefits “lost their character
as ‘retirement plan assets’” when they were transferred into the IRA. Petitioner
urges us to adopt the magistrate judge’s line of reasoning here. We decline to do
so. First, it is important to note that the magistrate judge’s findings were made in
a different context. Additionally, we do not agree with the magistrate judge’s
conclusion that the IRA was created for the Government and UPW. The record
shows that the IRA was created for the sole purpose of assisting petitioner to avoid
a taxable event before he had exhausted his appeal of his conviction and to give
him additional time to find an alternate source of payment. Furthermore, our
inquiry here is whether the distributions at issue were taxable to petitioner for
2009. The fact is, petitioner enjoyed an economic benefit in 2009 when, for
purposes of satisfying his fine and restitution obligations, FHB disbursed the
funds it held in his IRA--an account established solely for his benefit and funded
by his pension fund. Accordingly, because petitioner constructively received the
IRA distributions in 2009, they are includable in his gross income for that year.
Petitioner lastly argues that the 2008 garnishment order violated the
Consumer Credit Protection Act as well as the Mandatory Victims Restitution Act.
Petitioner requests that, as a consequence, we reverse the 2008 garnishment order
and restore his IRA with interest. Petitioner must resort to the appropriate Federal
-15-
[*15] court for a resolution of such disputes. Complaints of this nature are beyond
the jurisdiction of this Court. Although petitioner disagrees with the 2008
garnishment order, he has not shown a legitimate basis for excluding the 2009
distributions from his gross income.
V. Abuse of Discretion
We now turn to respondent’s determination to proceed with collection,
which we review under an abuse of discretion standard. Appeals abuses its
discretion if it acts “arbitrarily, capriciously, or without sound basis in fact or
law.” Woodral v. Commissioner, 112 T.C. 19, 23 (1999).
Petitioner has not advanced any argument that Settlement Officer Owyang’s
actions were an abuse of discretion. Additionally, petitioner did not offer any
collection alternative during the course of the CDP hearing. Furthermore,
Settlement Officer Owyang determined that the requirements of applicable law
and administrative procedure were met and concluded that sustaining the NFTL
appropriately balanced the need for efficient collection of taxes with petitioner’s
concerns regarding the intrusiveness of the lien action. Accordingly, we hold that
respondent did not abuse his discretion in sustaining the NFTL.
-16-
[*16] In reaching our holding, we have considered all arguments made, and to the
extent not mentioned, we consider them irrelevant, moot, or without merit.
To reflect the foregoing,
Decision will be entered
for respondent.
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674 P.2d 1146 (1984)
Donald Leon LENNOX, Appellant,
v.
The STATE of Oklahoma, Appellee.
No. O-83-145.
Court of Criminal Appeals of Oklahoma.
January 17, 1984.
Thomas G. Smith, Jr., Asst. Appellate Public Defender, Norman, for appellant.
Michael C. Turpen, Atty. Gen. of Oklahoma, Alan B. Foster, Asst. Atty. Gen., Oklahoma City, for appellee.
*1147 OPINION
CORNISH, Judge:
Donald Leon Lennox entered a plea of guilty to a charge of Burglary in the Second Degree, and was sentenced to two (2) years in prison, suspended. Subsequently, the State filed an application to revoke the suspended sentence, alleging in relevant part that the
sentence so imposed upon said defendant, DONALD L. LENNOX by the Court was suspended during the good behavior of said defendant
and that
DONALD L. LENNOX violated the terms and conditions of the suspension clause of the Judgment and Sentence, which was in full force and effect as aforesaid, in the following particular, to wit: that the said DONALD L. LENNOX failed to comply with the rules of probation, and has wilfully and wrongfully failed to comply with the order of the Court.[1]
*1148 We note that the only condition of probation referred to in the application was that defendant remain on "good behavior", generally defined as conduct conforming to law. See State v. Oliver, 247 A.2d 122 (Me. 1968); State v. Chesnut, 11 Utah 2d 142, 356 P.2d 36 (1960); In Re Weber, 75 Ohio App. 206, 61 N.E.2d 502 (1945); and State v. Pelley, 221 N.C. 487, 20 S.E.2d 850 (1942). The original judgment and sentence in this case reveals that the only condition of the suspended sentence reasonably encompassed by the language of the application to revoke was that defendant "refrain from violation of any City, State or Federal law."
However, it became apparent at the revocation hearing that the State was, in fact, relying on the alleged violations of three totally different conditions of the suspended sentence. On cross-examination of the State's only witness, petitioner's probation officer, we find the following:
Q Okay. I was just looking at your report. Now you've brought this action or for the violation. Now, what violation specifically are you complaining of here today?
A Well, that he didn't report monthly as required, that he did not pay his probation fees as required by the Court, and he initially furnished erroneous information to an official.
Tr. 8.
The trial court revoked the suspended sentence, stating only that "the Court hereby finds you in violation of the conditions of your suspension", Tr. 23, and "the Court being fully advised in the premises, finds that the said DONALD L. LENNOX has violated the terms and conditions of the suspension clause of the Judgment and Sentence as in the Application set out." O.R. 42.[2]
On review, petitioner asserts several propositions of error, only one of which need be addressed at this time, to wit, that there was inadequate notice of the violations alleged by the State. This contention is well taken. In In Re Collyar, 476 P.2d 354 (Okl.Cr. 1970), this Court stated that "[w]hen an application to revoke a suspended sentence is presented to the trial court, said application must state allegations sufficiently clear to advise the person of the reasons for seeking such revocation, as being violations of the terms and conditions of suspension." Id. at 357.
The application must allege facts with such clarity that the defense is able to *1149 determine what reason is being submitted as ground for revocation, enabling preparation of a defense to the allegation. Knight v. State, 506 P.2d 927 (Okl.Cr. 1973). Notice sufficient to apprise the defendant of the grounds upon which revocation is sought is essential. Brown v. State, 494 P.2d 344 (Okl.Cr. 1972). "[W]ritten notice of the claimed violations" is now recognized as among the minimum requirements of due process. Morrissey v. Brewer, 408 U.S. 471, 488-489, 92 S.Ct. 2593, 2604, 33 L.Ed.2d 484 (1972), held applicable to probation revocation proceedings in Gagnon v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973), and Woods v. State, 526 P.2d 944 (Okl.Cr. 1974). This requirement is codified in 22 O.S. 1981, § 991b, which provides in part that "the suspended sentence of said person may not be revoked, in whole or in part, for any cause unless a petition setting forth the grounds for such revocation is filed by the district attorney with the clerk of the sentencing court."
It is manifest that the petitioner in this case was not afforded sufficient notice of the grounds upon which revocation was sought and that revocation was ordered on the basis of violations not alleged in the application.[3] A suspended sentence may not be revoked on a ground not stated in the application, thus depriving the defendant of an opportunity to prepare a defense. See, Poindexter v. State, 585 P.2d 360 (Okl.Cr. 1978). Given the misleading character of the application, which only came to light at the revocation hearing, we attach no significance to petitioner's failure to demur to the application or move that the application be made more definite and certain prior to the hearing. Cf. Knight v. State, supra.
The revocation order is REVERSED and the cause REMANDED.
BUSSEY, P.J., and BRETT, J., concur.
NOTES
[1] The revocation application stated more fully as follows:
... on the 4th day of March, 1982, the said DONALD L. LENNOX entered his plea of guilty in case No. CRF-81-220 in the District Court of Comanche County, Oklahoma, to the charge of Burglary Second Degree as set out in the Information on file in this cause and said Defendant, DONALD L. LENNOX was sentenced to serve a term of two years under the Supervision of the Department of Corrections which said sentence so imposed upon said defendant, DONALD L. LENNOX by the Court was suspended during the good behavior of said defendant.
That subsequent to the pronouncement of said Judgment and Sentence, and on the 12th day of July, 1982, the said DONALD L. LENNOX violated the terms and conditions of the suspension clause of the Judgment and Sentence, which was in full force and effect as aforesaid, in the following particular, to-wit: that the said DONALD L. LENNOX failed to comply with the rules of probation, and has wilfully and wrongfully failed to comply with the order of the Court.
[2] The revocation order provides:
And now on this the 9th day of September, 1982, the Application of Dick W. Tannery, District Attorney, in and for Comanche County, Oklahoma to revoke the suspension clause of the Judgment and Sentence in the above entitled cause, CRF-81-220 comes regularly on for hearing, and the defendant, DONALD L. LENNOX appearing in person, and the Court being fully advised in the premises, finds that the said DONALD L. LENNOX has violated the terms and conditions of the suspension clause of the Judgment and Sentence as in the Application set out.
That on the 12th day of July, 1982, the Judgment and Sentence in this cause was in full force and effect; and that the suspension clause in said Judgment and Sentence should be set aside and revoked.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED by the Court, that the suspension clause in the Judgment and Sentence of this Court on the 4th day of March, 1982, in the above entitled cause, CRF-81-]]0 be and the same is hereby set aside and revoked.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED by the Court, that the said DONALD L. LENNOX in this cause be sentenced to serve two years with the Oklahoma Department of Corrections.
[3] The only evidence relating to criminal activity by petitioner was testimony that he was in jail at one point during probation on a petit larceny charge. However, the State did not prove a final judgment and sentence on such charge, nor did it offer proof of the elements of the offense. See Stoner v. State, 566 P.2d 142 (Okl.Cr. 1977).
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